Textile Project Report

Financial Statements Analysis
1.1 INTRODUCTION
1.2 OBJECTIVES OF THE STUDY
1.3 RESEARCH METHODOLOGY
1.4 SCOPE OF THE STUDY
1.5 IMPORTANCE OF THE STUDY
1.6 LIMITATION OF THE STUDY
Maniba Institute of Business Management, Sabargam Page 1

1.1 Introduction
The project report on “The Financial Statements Analysis of Sagar Texofab
Company” in which various financial statements are used like Comparative Financial
Statements Analysis, Trend Analysis, Fund Flow Statement Analysis, Ratio Analysis,
and Common Size Statement Analysis and study duration from 1st April 2012 to 31st
March 2017.
1.2 Objectives of the Study
1.2.1 Primary Objective

The primary objective is “The Financial Statements Analysis of Sagar Texofab
Company”.
1.2.2 Secondary Objectives
 To know the financial position of Sagar Texofab Company.

 To get the practical knowledge of the Sagar Texofab Company.
 To make the study of Sagar Texofab Company on the basis of Comparative
Financial Statements Analysis, Trend Analysis, Fund Flow Statement
Analysis, Ratio Analysis, and Common Size Statement Analysis.
1.3 Research Methodology
Meaning of Research
“It refers to all those methods that are used for conduction of research which
systematically solve the research problems”.
Meaning of Research Methodology
Research is a diligent and systematic inquire or investigate into a subject in order to

discover or revise facts, theories, application, etc.
Methodology is system of methods followed by particular discipline. Thus research
methodology is the way how we conduct our research.
1.3.1 Problem Identification
The project report of “Financial Statements Analysis of Sagar Texofab Company”.

1.3.2 Study Duration
Study duration is from 20th December, 2017 to 20th February, 2018. But researcher
used last 5 years data from 2012-13 to 2016-17 as per financial years for the
analytical purpose.
1.3.3 Sources of data Collection
There are mainly two types of data collection methods:-

 Primary Data
 Secondary Data
Primary Data: - Those data collected first time from the market. Primary data are
also known as raw data. Data are collected from the original source in a controlled or
an uncontrolled environment. There are various ways for collect the primary data
from the market like personal interview, telephonic interview, mail survey, electronic
mail survey.
Secondary Data: - Secondary data refers to data that was collected by someone other
than the user. Secondary data is related to what has already happened in the past
period. Sometimes there is no is possibility of gathering primary data and hence
during that time secondary data is available easily, quickly and cheaply. Secondary
data provide information, which may not affect the project under study directly.
For the present research work secondary data has been used. The secondary data has
been collected from the official websites of a concerning company, annual report of
the company, other websites and reference books.
1.3.4 Research Design
There are three types of research design. They are as follows:-
Types of Research
Design
Exploratory Descriptive Causal Research

Research Design Research Design Design
The researcher has used descriptive research design for the financial data analytical
purpose.

1.4 Scope of Study
The scope of the study is limited to “Sagar Texofab Company”. These financial
statements analyses will be helpful to other students or company to refer.
1.5 Importance of the Study
 It provides vast knowledge about textile industry.

 It is useful for analysis of the actual financial situation of the company.
 Helps in evaluating the problems of the company.
 It identifies new opportunities of the company.
1.6 Limitation of the Study
 The data was not available in sufficient form.

 There are many sectors, but researcher has selected only textile sector.
 Information is collected through secondary data, hence accuracy is major
concern.
 Due to lack of time during the project, so researcher have just considered last
five years duration.
 The time factors are the most important constraint for researcher study.

2.1. INTRODUCTION
2.2. ADVANTAGE OF FINANCIAL STATEMENTS

2.3. DISADVANTAGE OF FINANCIAL STATEMENTS
2.4. TOOLS OF FINANCIAL STATEMENTS

2.1 INTRODUCTION
The study of the researcher is “Financial Statements Analysis of Sagar Texofab
Company”. The researcher has used the financial data of the last five financial years,
i.e. 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17. The researcher has used
different methods/tools, i.e. Comparative Financial Statements, Trend Analysis, Fund
Flow Statement, Ratio Analysis, and Common Size Statement of financial analysis to
study the financial position of the company.
Meaning of Financial Statements Analysis

Financial Statements are the collective name given to Income Statement and
Positional Statement of an enterprise which show the financial position of business
concern in an organized manner. We know that all business transactions are first
recorded in the books of original entries and thereafter posted to relevant ledger
accounts. For checking the arithmetical accuracy of books of accounts, a Trial
Balance is prepared.
Trial balance is a statement prepared as a first step before preparing financial

statements of an enterprise which record all debit balances in the debit column and all
credit balances in credit column. To find out the profit earned or loss sustained by the
firm during a given period of time and its financial position at a given point of time is
one of the purposes of accounting. For achieving this objective, financial statements
are prepared by the business enterprise, which include income statement and
positional statement.
Definition
According to John N. Myer, “The financial statements provide a summary of the
accounts of a business enterprise, the balance sheet reflecting the assets, liabilities and
capital as on a certain date and the income statement showing the results of operations
during a certain period.”
According Smith and Asburne define financial statements as, “the end product of
financial accounting in a set of financial statements prepared by the accountant of a
business enterprise-that purport to reveal the financial position of the enterprise, the
result of its recent activities, and an analysis of what has been done with earnings.”
Types of Financial Statements Analysis

A complete set of financial statements consists of:
1. The Income Statement or Profit and Loss A/c,
2. The Balance Sheet or Position Statement,

3. Statement of Retained Earnings or Surplus Statement, and
4. Statement of changes in Financial Position.
1. The Income Statement (Profit and Loss A/c)

Income statement is a statement of revenues earned and the expenses incurred for
earning that revenue. Revenue or income is the golden egg, the centre of attraction of
all those interested in the concern. Thus revenue or income statement is a performance
report recording the changes in income, expenses, profits and losses as a result of
business operation. When the revenues are more than expenditure, there will be a
profit and vice versa.
2. The Balance Sheet (Position Statement)

The balance sheet is one of the important statements depicting the financial position
of the concern. It lists the sources of funds as well as their uses. In fact, it is a
classified summary of assets and the sources of financing the assets. The American
Institute of Certified Public Accountants defines Balance Sheet as “A tabular
statement of summary of balances (debits and credits) carried forward after an actual
and constructive closing of books of account and kept according to principles of
accounting.”
3. Statement of changes in Owner’s Equity (Retained Earnings)

The term owner’s equity refers to the claim of the shareholders against the assets of
the firm. It comprises: (a) paid-up share capital representing the initial amount of
funds invested by the shareholders, and (b) retained earnings representing undisturbed
profits.
4. Statement of changes in Financial Position

The statement of changes in financial position shows the changes in assets and
liabilities from the end of one period to the end of another point of time. The
statement explains the movement of funds (working capital or cash) during a
particular period. There are two forms of this statement:-
 Funds Flow Statement

 Cash Flow Statement
Nature of Financial Statements Analysis

The financial statements are prepared on the basis of recorded facts. The recorded
facts are those which can be expressed in monetary terms. The statements are
prepared for a particular period, generally one year. The transactions are recorded in a
chronological order, as and when the events happen.

The accounting records and financial statements prepared from these records are
based on historical costs. The financial statements, by nature, are summaries of the
items recorded in the business and these statements are prepared periodically,
generally for the accounting period.
The American Institute of Certified Public Accountants states the nature of financial
statements as “Financial Statements are prepared for the purpose of presenting a
periodical review of report on progress by the management and deal with the status of
investment in the business and the results achieved during the period under review.
They reflect a combination of recorded facts, accounting principles and personal
judgments.”
According to John N. Myer, “The financial statements are composed of data which
are the results of combinations of:
(1) Recorded facts concerning the business transactions,
(2) Conventions adopted to facilitate the accounting technique,
(3) Postulates, or assumptions made to and
(4) Personal judgments used in the application of the conventions and postulates.”
Objectives of Financial Statements Analysis
The following are the important objectives of the financial statements:-

A. It provides reliable financial information about economic resources and
obligation of a business concern.
B. It provides other needed information about changes in such economic
resources and obligation.
C. It provides reliable information about changes in net resources arising out of
business activities.
D. It provides financial information that helps in estimating the earning potential
of a business.
E. It discloses, to the extent possible, other information related to the financial
statements that is relevant to the needs of the users of these statements.
2.2 Advantages of Financial Statements Analysis

(i) Knowing Profitability of Business:
Financial statements are required to ascertain whether the enterprise is earning
adequate profit and to know whether the profits have increased or decreased as
compared to the previous year’s, so that corrective steps can be taken well in advance.
(ii) Knowing the Solvency of the Business:
Financial statements help to analyse the position of the business as regards to the
capacity of the entity to repay its short as well as long term liabilities.
(iii) Judging the Growth of the Business:

Through comparison of data of two or more years of business entity, we can draw a
meaningful conclusion as regard to growth of the business. For example, increase in
sales with simultaneous increase in the profits of the business, indicates a healthy sign
for the growth of the business.
(iv) Judging Financial Strength of Business:

Financial statements help the entity in determining solvency of the business and help
to answer various aspects viz., whether it is capable to purchase assets from its own
resources and/or whether the entity can repay its outside liabilities as and when they
become due.
(v) Making Comparison and Selection of Appropriate Policy:

To make a comparative study of the profitability of the entity with other entities
engaged in the same trade, financial statements help the management to adopt sound
business policy by making intra firm comparison.
(vi) Forecasting and Preparing Budgets:

Financial statement provides information regarding the weak-spots of the business so
that the management can take corrective measures to remove these short comings.
Financial statements help the management to make forecast and prepare budgets.
2.3 Disadvantages of Financial Statements Analysis

(i) Manipulation or Window Dressing:
Some business enterprises resort to manipulate the information contained in the
financial statements so as to cover up their bad or weak financial position. Thus, the
analysis based on such financial statements may be misleading due to window
dressing.
(ii) Use of Diverse Procedures:

There may be more than one way of treating a particular item and when two different
business enterprises adopt different accounting policies, it becomes very difficult to
make a comparison between such enterprises. For example, depreciation can be
charged under straight line method or written down value method. However, results
provided by comparing the financial statements of such business enterprises would be
misleading.

(iii) Qualitative Aspect Ignored:
The financial statements incorporate the information which can be expressed in
monetary terms. Thus, they fail to assimilate the transactions which cannot be
converted into monetary terms. For example, a conflict between the marketing
manager and sales manager cannot be recorded in the books of accounts due to its
non-monetary nature, but it will certainly affect the functioning of the activities
adversely and consequently, the profits may suffer.
(iv) Historical:
Financial statements are historical in nature as they record past events and facts. Due
to continuous changes in the demand of the product, policies of the firm or
government etc, analysis based on past information does not serve any useful purpose
and gives only post-mortem report.
(v) Price Level Changes:

Figures contained in financial statements do not show the effects of changes in the
price level, i.e. price index in one year may differ from price index in other years. As
a result, misleading picture may be obtained by making a comparison of figures of
past year with current year figures.
(vi) Subjectivity & Personal Bias:

Conclusions drawn from the analysis of figures given in financial statements depend
upon the personal ability and knowledge of an analyst. For example, the term ‘Net
profit’ may be interpreted by an analyst as net profit before tax, while another analyst
may take it as net profit after tax.
Meaning of Financial Analysis

The importance of the financial statements lies not in their preparation but in their
analysis. ‘Analysis’ is the mathematical classification of the data. Thus “Financial
Analysis” refers to the process of evaluating the financial position and the results of
operation of a business. It is the last step of accounting and results in the presentation
of information useful to the business managers, investors and creditors.
The various steps involved in financial analysis are:
I. To select the information from the total information in the financial statements
this is relevant for a decision.
II. To highlight important relationship by arranging the information contained in
the financial statements, and
III. To interpret important relationship and give explanations of the importance.

Types of Financial Statements Analysis

The various types of financial analysis are as follows:-
A. External Analysis
B. Internal Analysis
C. Horizontal Analysis
D. Vertical Analysis
2.4 Tools of Financial Statements Analysis

The following are the tools of Financial statements analysis:-
A. Comparative Financial Statements Analysis

B. Trend Analysis
C. Fund Flow Statement Analysis
D. Ratio Analysis
E. Common Size Statement Analysis
A. Comparative Financial Statements Analysis
Introduction
The comparative financial statements are statements of the financial position at
different periods; of time. The elements of financial position are shown in a
comparative form so as to give an idea of financial position at two or more periods.
Any statement prepared in a comparative form will be covered in comparative
statements.
From practical point of view, generally, two financial statements (balance sheet and
income statement) are prepared in comparative form for financial analysis purposes.
Not only the comparison of the figures of two periods but also be relationship
between balance sheet and income statement enables an in depth study of financial
position and operative results.
Definition
A comparative statement is a document that compares particular financial statements
with prior period statements or with the same financial report generated by another
company. Analyst and business managers use the income statement, balance sheet and
cash flow statement for comparative purposes. The process reveals trends in the
financials and compares one company's performance with another business.

Advantages of Comparative Financial Statements Analysis

(a) Comparison:
The comparative statements show the figures of various firms or number of years side
by side i.e. both for inter-firm comparison and intra-firm comparison.
(b) Horizontal Analysis:

The variables are arranged horizontally for the purpose of analysis and interpretations
of data taken from financial statements for assessing profitability, overall efficiency
and financial position of a firm.
(c) Trend Analysis:

The comparative financial statements helps to ascertain the ‘trend’ relating to sales,
cost of goods sold, operating expenses etc. so that a proper comparison can easily be
made which helps the analyst to understand the overall performance of a firm.
(d) Trend and Directions:

The comparative financial statements provides necessary information for comparison
of trends in related items e.g. the analyst can compare the trend of sales with the trend
of accounts receivable which gives very useful information. A 20% increase in
accounts receivable and an increase of sales by only 10% warrants investigation into
the reasons for this difference in the rate of increase.
(e) Evaluation of:

The comparative financial statements helps the analyst to compare Performance the
performance of one firm with that of other similar firm in the industry and also
compare the performance of the competitors in the line. This comparison helps to find
out the weakness or strength of a firm and to take adequate steps.
Disadvantages of Comparative Financial Statements Analysis

(a) Inter-firm Comparison:
Inter firm comparison will only be effective if both the firms follow the same
accounting principles, method of valuations of stocks, assets etc. i.e. all the
accounting concepts and conventions, which in real world situation, are not
identically followed by both the firms e.g. Firm A follows the FIFO method of
valuing stock whereas Firm B follows LIFO method for the same.
(b) Inflationary Effect:

Comparative financial statements do not recognize the change in prices level and, as
such, it will be of no use.

(c) Ascertaining Correct Trend:
It is very difficult to ascertain the correct trend if there is a structural changes in a firm
which are frequently happened.
(d) Supply Misleading Information:

Sometimes a comparative financial statement provides meaningless information, e.g.
if a negative amount comes in base year, and a positive amount in the next year, it is
not possible to find out the change in percentage.
(e) Uniformity in Principle:

There must be a consistency while following accounting principles, concepts and
convention. But in practice, this is not done and as such, multi-year analysis becomes
useless.
B. Trend Analysis
Introduction
The financial statements may be analyzed by calculating the trends of a service of
information. Trend analysis involves the computation of percentage relationship that
each statement item bears to the same item in the base year. The base year may be the
earliest year involved in comparison or the latest year on any intervening year. The
trend percentage discloses change in the financial and operating data between specific
periods. Thus the analyst can form an opinion as to whether favorable or adverse
tendencies are reflected by the data.
Definition
A trend analysis is a method of analysis that allows traders to predict what will
happen with a stock in the future. Trend analysis is based on historical data about the
stock's performance given the overall trends of the market and particular indicators
within the market.
Advantages of Trend Analysis

(a) Possibility of making Inter-firm Comparison:
Trend analysis helps the analyst to make a proper comparison between the two or
more firms over a period of time. It can also be compared with industry average. That
is, it helps to understand the strength or weakness of a particular firm in comparison
with other related firm in the industry.
(b) Usefulness:
Trend analysis (in terms of percentage) is found to be more effective in comparison
with the absolutes figures/data on the basis of which the management can take the
decisions.
(c) Useful for Comparative Analysis:
Trend analyses is very useful for comparative analysis of date in order to measure the
financial performances of firm over a period of time and which helps the management
to take decisions for the future i.e. it helps to predict the future.
(d) Measuring Liquidity and Solvency:
Trend analysis helps the analyst/and the management to understand the short-term
liquidity position as well as the long-term solvency position of a firm over the years
with the help of related financial Trend ratios.
(e) Measuring Profitability Position:

Trend analysis also helps to measure the profitability positions of an enterprise or a
firm over the years with the help of some related financial trend ratios (e.g. Operating
Ratio, Net Profit Ratio, Gross Profit Ratio etc.).
Disadvantages of Trend Analysis

(a) Selection of Base Year:
It is not so easy to select the base year. Usually, a normal year is taken as the base
year. But it is very difficult to select such a base year for the propose of ascertaining
the trend. Otherwise, comparison or trend analyses will be of no value.
(b) Consistency:
It is also very difficult to follow a consistent accounting principle and policy
particularly when the trends of business accounting are constantly changing.
(c) Useless in Inflationary Situations:

Analysis of trend percentage is useless at the time of price-level change (i.e. in
inflation). Trends of data which are taken for comparison will present a misleading
result.
C. Fund Flow Statement Analysis
Introduction
Fund flow analysis is a report on the movement of funds or working capital. In a
narrow sense the term fund means cash and the fund flow statement depicts the cash
receipts and cash disbursements/payments. It highlights the changes in the cash
receipts and payments as a cash flow statement in addition to the cash balances i.e.,
opening cash balance and closing cash balance. Contrary to the earlier, the fund
means working capital i.e., the differences between the current assets and current
liabilities.

The term flow denotes the change. Flow of funds means the change in funds or in
working capital. The change on the working capital leads to the net changes taken
place on the working capital i.e., especially due to either increase or decrease in the
working capital. The changes in the volume of the working capital are due to
numerous transactions. Some of the transactions may lead to increase or decrease the
volume of working capital. Some other transactions neither register an increase nor
decrease in the volume of working capital.
Definition
It is a statement which is put together to analyse the causes of changes, i.e., an inflow
and outflow of funds, that can be found on two different balance sheets.
According to R. N. Anthony
“The funds flow statement describes the sources from which additional funds were
derived and the uses to which these funds were put.”
Roy A. Fouke defines fund flow statement as “a statement of sources and application
of funds is a technical device designed to analyse the changes in the financial
condition of a business enterprise between two dates.”
Meaning of Funds Flow Statement Analysis

A fund flow statement is a statement in summary form that indicates changes in terms
of financial position between two different balance sheet dates showing clearly the
different sources from which funds are obtained and uses to which funds are put.
It summarizes the financing and investing activities of the enterprise during an

accounting period. By depicting all inflows and outflows of fund, the statement shows
their net impact on working capital of the firm.
If the total of inflows is greater than the outflows, the excess goes to increase in
working capital. If there is deficit of funds during a particular accounting period, the
working capital is impaired. So fund flow statement is an important tool for working
capital management.
Advantages of Funds Flow Statement Analysis

a) Changes in the Financial Position of the Company:
Fund flow statement portrays the movement of the funds and changes in the financial
position of the company between two accounting periods, which the balance sheet or
the profit and loss statement fail to provide.
b) Level of Working Capital Adequacy:
This statement helps to test if working capital has been effectively used or not. It
helps to understand if short-term sources of funds are used to build long term assets
and vice versa. Overall it aids better working capital management for the firm.
c) Future Business and Budget Projections:
Projected fund flow statements can be used for putting up necessary controls and
budgetary allocations. Projected statements aid in deciding future financial policies
like credit period, inventory requirement etc. for the company.
d) Company Image:
A well-managed working capital firm earns high respect among shareholders and
increases credit-worthiness among creditors. An effectively managed fund flow
activity of the firm can help the company to build a good reputation for itself with
respect to its efficiency and credit worthiness.
Disadvantages of Funds Flow Statement Analysis

1. Historical Nature:
The information used for the preparation of the fund flow statement is essentially
historical in nature. It does not estimate the sources and application of funds for
the near future.
2. Structural Changes Not Disclosed:

The fund flow statement does not disclose the structural changes in financial
relationship in a firm. In other words, it does not reveal shifts among items
making up the current assets and current liabilities. It does not tell us whether any
loss of working capital has unduly weakened the financial position or not.
3. Not Foolproof:
The fund flow statement is prepared from the data provided in the balance sheet
and profit and loss account. Hence, the defects in financial statements will be
carried over to the fund flow statement also.
4. Ignores Non-Fund Items:

As fund flow statement ignores non-fund items, it becomes a crude device
compared to income statement and balance sheet.
D. Ratio Analysis
Introduction
Ratio analysis is the process of determining and interpreting numerical relationships
based on financial statements. A ratio is a statistical yardstick that provides a measure
of the relationship between two variables or figures.
This relationship can be expressed as a percent or as a quotient. Ratios are simple to

calculate and easy to understand. The persons interested in the analysis of financial
statements can be grouped under three heads,

i) Owners or investors
ii) Creditors and
iii) Financial executives.
Although all these three groups are interested in the financial conditions and operating
results, of an enterprise, the primary information that each seeks to obtain from these
statements differs materially, reflecting the purpose that the statement is to serve.
Investors desire primarily a basis for estimating earning capacity. Creditors are
concerned primarily with liquidity and ability to pay interest and redeem loan within a
specified period. Management is interested in evolving analytical tools that will
measure costs, efficiency, liquidity and profitability with a view to make intelligent
decisions.
Definition
A ratio analysis is a quantitative analysis of information contained in a company’s
financial statements. Ratio analysis is based on line items in financial statements like
the balance sheet, income statement and cash flow statement; the ratios of one item –
or a combination of items - to another item or combination are then calculated. Ratio
analysis is used to evaluate various aspects of a company’s operating and financial
performance such as its efficiency, liquidity, profitability and solvency. The trend of
these ratios over time is studied to check whether they are improving or deteriorating.
Types of Ratio:
 Profitability Ratio
 Earnings Ratio
 Solvency Ratio
[I] Short-Term (Liquidity)
[II] Long-Term (Debt-Equity)
 Activity Ratio
Advantages of Ratio Analysis
a) Simplifying Financial Information:

Ratio analysis helps to simplify and summaries various complex data
contained in the financial statements. Ratios such as return on investment and
debt equity ratio are very useful to lenders and financial institution for
determining the financial health of a concern.
b) Converting Absolute Figures:
Ratio analysis helps to convert absolute figures of financial statements into
relative ones. Absolute figures standing alone often convey no meaning. They
become significant only when considered along with other figures. For

instance, a firm earns a profit of Rs. 2 lakhs. This information is meaningless
unless either the figure of capital employed to earn it or of sales affected is
available.
c) Helps in Control:
Ratio analysis also helps in bringing about effective control of the concern.
The top management may lay down the standard of various ratios. These
standards are used to make a comparison with actual ratio at the end of the
year. Thus the top management can initiate corrective actions, in case of wide
variations.
d) Trend Analysis:
Accounting ratio tabulated for a number of years indicate the trend of the
change. This helps in the preparation of the estimates for the future.
e) Helps in Decision-making:
Ratio analysis helps in making decision from the information given in the
financial statements. Thus it is useful to the management and outsiders. For
instance, a bank investor would like to know the liquidity, profitability and
long-term solvency of the concern before advancing money.
Limitations of Ratio Analysis

1. It is always a challenging job to find an adequate standard. The conclusions drawn
from the ratios can be no better than the standards against which they are compared.
2. When the two companies are of substantially different size, age and diversified
products, comparison between them will be more difficult.
3. A change in price level can seriously affect the validity of comparisons of ratios
computed for different time periods and particularly in case of ratios whose numerator
and denominator are expressed in different kinds of rupees.
4. Comparisons are also made difficult due to differences of the terms like gross
profit, operating profit, net profit etc.
5. If companies resort to ‘window dressing’, outsiders cannot look into the facts and
affect the validity of comparison.
6. Financial statements are based upon part performance and part events which can
only be guides to the extent they can reasonably be considered as dues to the future.
7. Ratios do not provide a definite answer to financial problems. There is always the
question of judgment as to what significance should be given to the figures. Thus, one
must rely upon one’s own good sense in selecting and evaluating the ratios.

The following Ratio’s are those which I have used in my study. They
are as follows:-
A. Current Ratio:-
The current ratio is a liquidity ratio that measures whether or not a firm has enough
resources to meet its short-term obligations. It compares a firm's current assets to its
current liabilities, and is expressed as follows:
Current Ratio = Current assets ÷ Current liabilities
The current ratio is an indication of a firm's liquidity. Acceptable current ratios vary
from industry to industry. In many cases a creditor would consider a high current ratio
to be better than a low current ratio, because a high current ratio indicates that the
company is more likely to pay the creditor back. Large current ratios are not always a
good sign for investors. If the company's current ratio is too high it may indicate that
the company is not efficiently using its current assets or its short-term financing
facilities.
B. Quick Ratio:-
The acid-test or quick ratio or liquidity ratio measures the ability of a company to use
its near cash or quick assets to extinguish or retire its current liabilities immediately.
Quick assets include those current assets that presumably can be quickly converted to
cash at close to their book values. A company with a quick ratio of less than 1 cannot
currently fully pay back its current liabilities, and is expressed as follows:
Quick Ratio = Liquid assets ÷ Liquid liabilities
OR
Quick Ratio = Current assets – Inventories ÷ Current liabilities
C. Net Profit Ratio :

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been
deducted from sales, and income taxes recognized.
As such, it is one of the best measures of the overall results of a firm, especially when
combined with an evaluation of how well it is using its working capital. The measure
is commonly reported on a trend line, to judge performance over time. It is also used
to compare the results of a business with its competitors. Net profit is not an indicator
of cash flows, since net profit incorporates a number of non-cash expenses, such as
accrued expenses, amortization, and depreciation, and is expressed as follows:
Net Profit = (Net profit / Net sales) x 100

D. Fixed Assets Turnover Ratio:
Fixed assets turnover ratio is an activity ratio that measures how successfully a
company is utilizing its fixed assets in generating revenue.
The following formula is used for calculating Fixed Assets Turnover Ratio:
Fixed Assets Turnover Ratio = COGS / Fixed Assets
E. Current Assets Turnover Ratio:

Current Assets Turnover Ratio indicates that the current assets are turned over in the
form of sales more number of times. A high current assets turnover ratio indicates the
capability of the organization to achieve maximum sales with the minimum
investment in current assets. Higher the current ratio better will be the situation.
The following formula is used for calculating Current Assets Turnover Ratio.
Current Assets Turnover Ratio = COGS / Current Assets
F. Total Assets Turnover Ratio:

Total asset turnover is a financial ratio that measures the efficiency of a company's
use of its assets in generating sales revenue. It is also known as the investment
turnover ratio.
The following formula is used for calculating Total Assets Turnover Ratio:
Total Assets Turnover Ratio = COGS /Total Assets
G. Working Capital Turnover Ratio:

Working capital turnover ratio is computed by dividing the cost of goods sold by net
working capital. It represents how many times the working capital has been turned
over during the period.
The following formula is used for calculating Working Capital Turnover Ratio:
Working Capital Turnover Ratio = COGS / Working Capital
Working Capital = Current Assets – Current Liabilities
H. Debtor Turnover Ratio :

Debtor turnover ratio is the relationship between net sales and average debtors. It is
also called account receivable turnover ratio.
The following formula is used for calculating Debtor Turnover Ratio.
Debtor Turnover Ratio = Net sales / Debtors + Bills Receivable

I. Inventory Turnover Ratio:
The inventory turnover ratio is an efficiency ratio that shows how effectively
inventory is managed by comparing cost of goods sold with average inventory for a
period. This measures how many times average inventory is "turned" or sold during a
period. In other words, it measures how many times a company sold its total average
inventory during the year.
The following formula is used for calculating Return on ordinary Shareholders Equity
Ratio:
Inventory Turnover Ratio = Net Sales / Inventories
Inventory turnover Ratio = COGS / Average Inventory
Average Inventory = (Closing Stock + Opening Stock) / 2
J. Operating Ratio:
The operating ratio can be used to determine the efficiency of a company's
management by comparing operating expenses to net sales. It is calculated by
dividing the operating expenses by the net sales. The smaller the ratio, the greater the
organization's ability to generate profit.
The following formula is used for calculating operating ratio:
Operating Ratio = (Operating cost / Net Sales) x 100
Operating Cost = COGS + Operating Exp
K. Gross Profit Ratio :

Gross profit ratio (GP ratio) is a profitability ratio that shows the relationship between
gross profit and total net sales revenue. It is a popular tool to evaluate the operational
performance of the business. The ratio is computed by dividing the gross profit figure
by net sales.
The formula for calculating a company’s growth ratio is:
Gross profit ratio = (Gross profit / Net sales) x 100
Gross Profit = Net Sales – COGS

E. Common Size Statement Analysis
Introduction
A common-size statement is an income statement or balance sheet in which each line
item is expressed as a percentage of sales or assets, respectively.
Meaning of Common-Size Statement Analysis:

The common-size statement, balance sheet and income statement are shown in
analytical percentages. The figures are shown as percentages of total assets, total
liabilities and total sales. The total assets are taken as 100 and different assets are
expressed as a percentage of the total. Similarly, various liabilities are taken as a part
of total liabilities.
These statements are also known as component percentage or 100 per cent statements
because every individual item is stated as a percentage of the total 100.
Types of Common-Size Statement Analysis:

(i) Common-Size Balance Sheet:
A statement in which balance sheet items are expressed as the ratio of each asset to
total assets and the ratio of each liability is expressed as a ratio of total liabilities is
called common-size balance sheet.
(ii) Common Size Income Statement:

The items in income statement can be shown as percentages of sales to show the
relation of each item to sales. A significant relationship can be established between
items of income statement and volume of sales. The increase in sales will certainly
increase selling expenses and not administrative or financial expenses.
Advantages of Common-Size Statement Analysis:

(a) Easy to Understand:
Common-size Statement helps the users of financial statement to make clear about the
ratio or percentage of each individual item to total assets/liabilities of a firm.
(b) Helpful for Time Series Analysis:

A Common-Size Statement helps an analyst to find out a trend relating to percentage
share of each asset in total assets and percentage share of each liability in total
liabilities.

(c) Comparison at a Glance:
An analyst can compare the financial performances at a glance since percentage of
increase or decrease of each individual component of cost, assets, liabilities etc. are
available and he can easily ascertain his required ratio.
(d) Helpful in analysing Structural Composition:

A Common-Size Statement helps the analyst to ascertain the structural relations of
various components of cost/expenses/assets/liabilities etc. to the required total of
assets/liabilities and capital.
Limitations of Common-Size Statement Analysis:

(a) Standard Ratio:
Common-Size Statement does not help to take decisions since there is no standard
ratio/percentage regarding the change of percentage in the various components of
assets, liabilities, sales etc.
(b) Change in Price-level:

Common-Size statement does riot recognise the change in price level i.e. inflationary
effect. So, it supplies misleading information’s since it is based on historical cost.
(c) Following Consistency:

If consistency in the accounting principle, concepts and conventions is not maintained
then Common Size Statement becomes useless.
(d) Seasonal Fluctuation:

Common-Size Statement fails to convey proper records during seasonal fluctuations
in various components of sales, assets liabilities etc. e.g. sales and closing stock
significantly vary. Thus, the statement fails to supply the real information to the users
of financial statements.

3.1. INDUSTRY PROFILE
3.1.1 TEXTILE A GLANCE IN THE WORLD

3.1.2 TEXTILE A GLANCE IN THE INDIA
3.2. COMPANY PROFILE
3.2.1. GROUP OVERVIEW
3.2.2. SAGAR OVERVIW

3.1 INDUSTRY PROFILE:
 MEANING OF SECTOR:
“There are many companied or scrip that manufactures the same products provides
services are specified under the particular name that called sector.”
 VARIOUS SECTOR:
There are various sectors working in world economy.
 AGRO INPUTS
 AUTO ANCILLARIES
 AUTO MOBILE
 AVIATION
 BREWERIES & DISTILLERIES
 CEMENT
 CHEMICALS
 CIGARATE
 CONSTRUCTION
 CONSUMER DURABLES
 COURIER SERVIES
 CYCLE & ACCESSORIES
 DIVERCIFIED
 ENGINEERING
 FMCG
 FINANCIAL INSTITUTE
 FOOD PRODUCT
 GLASS
 HEALTH CARE
 HOTELS
 IT
 INSURANCE
 MINING
 MEDIA & ENTERTAINMENT
 OIL & GAS
 PAINT
 PAPER
 PHARMACEUTICAL
 PETROCHEMICALS
 POWER
 REAL ESTATE

 RETAIL
 SHIPPING
 STEEL
 SUGAR
 TELE COMMUNICATION
 TEXTILE
 TYRES
The researcher has selected & made research on textile sector for the financial data
analytical purpose.
3.1.1 TEXTILE A GLANCE IN THE WORLD
Textile word at world
The term 'Textile' is a Latin word originating from the word 'texere' which means 'to
weave' Textile refers to a flexible material comprising of a network of natural or
artificial fibers, known as yarn. Textiles are formed by weaving, knitting, crocheting,
knotting and pressing fibers together. Textile Museum is that specialized category of
museum which primarily preserves different types of textile and textile products.
History of Textile at world

The history of textile is almost as old as that of human civilization and as time moves
on the history of textile has further enriched itself. In the 6th and 7th century BC, the
oldest recorded indication of using fiber comes with the invention of flax and wool
fabric at the excavation of Swiss lake inhabitants. In India the culture of silk was
introduced in 400AD, while spinning of cotton traces back to 3000BC. In China, the
discovery and consequent development of sericulture and spin silk methods got
initiated at 2640 BC while in Egypt the art of spinning linen and weaving developed
in 3400 BC. The discovery of machines and their widespread application in
processing natural fibers was a direct outcome of the industrial revolution of the 18th
and 19th centuries. The discoveries of various synthetic fibers like nylon created a
wider market for textile products and gradually led to the invention of new and
improved sources of natural fiber.

Table no. 1; The Top 10 Best Textile Companies in the World in

2017-2018
Sr.no. Name of the Company Web Site Native Place
1. Arvind Limited www.arvind.com Naroda,

Ahmedabad
2. Dorothy Perkins www.dorothyperkins.com London,

United
kingdom
3. Bombay Dyeing www.bombaydyeing.com Mumbai
4. Agile www.agilealliance.org United States
5. Canterbury of New www.canterbury.com Canterbury,

Zealand New Zealand
6. Admiral Sportswear www.admiralsportswear.com Manchester,

United
Kingdom
7. Ashworth www.ashworthinc.com Carlsbad,

California,
United States
8. Bruno Banani www.brunobanani.com Germany
9. Cone Mills corporation www.conedenim.com Greensboro,

North Caroline
10. Cotton Corporation of www.cotcorp.gov.in Mumbai

India

The Top 10 Best Textile Companies in the World in 2017-2018
1. Arvind Limited
Arvind Limited is an Indian textile
manufacturer and the flagship company
of Lalbhai group founded in 1931 in
Ahmedabad city of India with its
headquarters in Naroda and Gujarat. It
is believed to establish trendsetting
styles for over multiple decades in the
lifestyle products. They are more
cautious in producing finest fabrics by
defining and shaping unique styles that
make them stand out of the crowd. This
company is now extended its business
in agriculture- the backbone of India and in e-commerce and engineering. It holds
the license for the populous international brands like Arrow, Tommy Hilfiger,
Cherokee, lee, wrangler and owns brands like Flying Machine, Newport.
Even clothing retail chains like Unlimited, Mega mart are managed by Arvind
limited. This company delivers Denim, Shirting’s, Khakis, Knitwear, Voile, and
Jeans. Arvind limited has undisputedly renounced an eternal place in the world of
textile.
2. Dorothy Perkins
Dorothy Perkins is a UK based fashion
retailer. It aims at selling clothes and
branded fashion goods. They are known for
their lingerie, tights, and sleepwear
collections. They are involved in designing
clothes that suit people of all classes. They
are providing a wide range of facilities and
different outfit ideas on their online stores
thereby attracting masses of customers
across different parts of the world. They are
literally in the hearts of every woman who
has fashion as their passion.

3. Bombay Dyeing
Bombay dyeing is an Indian flagship
company of the Whadia group established in
Bombay Presidency at 1879. Bombay dyeing
enhances and redefines the beauty of our
home with some of its finest products like
linens, bed sheets, curtains, comforters,
blankets and a whole range of other products. It customises every other part of our
home adding colours of heaven as we all know home is where the heart is. It provides
different customisation for living rooms, washrooms and dining halls with its elegant
products. It offers different styles according to the needs of the customers and also
offers door delivery to all of its products via online shopping.
4. Agile
It resembles as the father of all textile industries
being established in the year 1853. It is a French
company founded by an American businessman
Hiram Hutchinson aimed to deliver quality
footwear and textile products. This company shows
its major importance on the essential chinos, bias
ribs jumper, essential 5 pocket trousers, long warm
parka, padded winter jackets and leathered jumper.
It holds an official online shopping site to facilitate its customers with a travel free
shopping.
5. Canterbury of New Zealand

It is a UK based company established in 1904. It is
a sports clothing company that is focused on rugby
football. Their motto is well explained in the tagline
stating “Committed to the Game”. They are the
official sponsors of New Zealand and Scotland
cricket teams and have sponsored for many rugby
football clubs and nations like England, Georgia,
Japan, Poland etc. It reclaims the world number one
rugby brand for several decades. They have also
shown their interest in men, women, and kids
clothing, especially with hoodies.

6. Admiral Sportswear
This company admiral sportswear with its
sustained new releases has never failed to
admire their customers for more than a
century. It has been established on 1914 in
Manchester city, the United Kingdom serving
as its headquarters. This company is focused
in manufacturing sportswear related to football and cricket. This company initially
showed its interest on football clubs by sponsoring certain clubs and providing tailor-
made kits from their production house. Later they widened their sponsorship to
different sports like football cricket tennis etc. It served as an official kit supplier for
England cricket team in the late 2000’s. The three genres in which this company is
focused are football sports performance, retro-inspired sports fashion and casual
sports-inspired fashion.
7. Ashworth
Ashworth is a US-based golf-apparel company
established in 1987 in California. Now, the company
has been acquired by Taylor made-Adidas. They
initially dealt with golf based goods and later shifted
their interest on designing clothes by endorsing their
brand with golf players as its brand ambassadors. This
company has been led by different leaders yet sustained
its place in the world market. They are at present
focused on both modern and traditional clothing.
8. Bruno Banani
It is a German-based fashion company
established in 1933 at Chemnitz. This company
is aimed at delivering men’s clothing women’s
clothing and undergarments. The other areas of
interest include belts, wallets, shoulder bags,
handbags and perfumes. They are known for
the standard of quality in their products. They
have introduced eco-friendly fiber biopsies
from advice that is expected to create a major
breakthrough in the fashion industry.

9. Cone Mills Corporation

Cone Mills Corporation was a leader of 20th-
century textile business. It focuses on various
fabrics. It is the world’s largest producer of denim.
It is a German based company established in 1895
at Carolina. This corporation owns Asheville
cotton, Minneola Manufacturing Company, John
wolf textiles, American spinning company etc.
which were later acquired by W.L. Ross. They are
still ruling as great leader in the production of
denim clothing.
10.Cotton Corporation of India

Cotton Corporation of India is an Indian
Government undertaken company managed
by Ministry of Textiles, is indulged in the
activities of textile trading like importing and
exporting. They have mainly been involved
in trading cotton and cotton related products
across different nations in the world.
Textile industry at a world glance:-

Projections in the Textile Sector at a Glance
The global textile & clothing business 2017 is

said to be worth roughly US €3660 billion.
According to the World Trade Organisation
forecast global trade is set to expand by 3.3%
this year and 4% in 2018. Major investment
into innovation has helped to foster the
success of the industry. The success of the
modern industry of world textiles is dependent
largely upon continuing major investment in
innovation and invention. Below is a table
showing market size in billions from to 2013, predictions for 2025 and the projected
Compound Annual Growth Rate (CAGR);

Table no. 2; Projections in the Textile Sector at a Glance
 EU-27, USA, Japan have 2% Compound Annual Growth Rate (CAGR)

which shows the steady growth of Developed countries.
 Countries like China, India, Russia & Brazil are emerging as apparel
retail markets and are set to form significant alternate markets to US,
EU-27, Japan.
 India had 46 US$bn apparel market size in 2013 which is estimated to

grow for 200US$ with 12% of Compound Annual Growth Rate
(CAGR) in between 2013 – 2025. India is predicted to be the fastest
growing market.
 In 2013, surpassing Italy and Germany, India exported textile & apparel
garments goods worth $40 billion, with a share of about 5 percent of
global textile & garment trade.
 China looks likely to continue to lead the global market with 540
US$bn in 2025. China has led 165 billion US$ market which is growing
at Compound Annual Growth Rate (CAGR) of 10%.

3.1.2 TEXTILE A GLANCE IN THE INDIA
Textile History in India

Indian textile enjoys a rich heritage and the origin of textiles in India traces back to
the Indus valley Civilization where people used homespun cotton for weaving their
clothes. Rig-Veda, the earliest of the Veda contains the literary information about
textiles and it refers to weaving. Ramayana and Mahabharata, the eminent Indian
epics depict the existence of wide variety of fabrics in ancient India. These epics refer
both to rich and stylized garment worn by the aristocrats and ordinary simple clothes
worn by the common people. The contemporary Indian textile not only reflects the
splendid past but also cater to the requirements of the modern times.
Introduction
India’s textiles sector is one of the oldest industries in Indian economy dating back
several centuries. Even today, textiles sector is one of the largest contributors to
India’s exports with approximately 13 per cent of total exports. The textiles industry
is also labour intensive and is one of the largest employers. The textile industry has
two broad segments. First, the unorganised sector consists of handloom, handicrafts
and sericulture, which are operated on a small scale and through traditional tools and
methods. The second is the organised sector consisting of spinning, apparel and
garments segment which apply modern machinery and techniques such as economies
of scale.
The textile industry employs about 45 million people directly and 20 million people
indirectly. India's overall textile exports during FY 2015-16 stood at US$ 40 billion.
The Indian textiles industry is extremely varied, with the hand-spun and hand-woven
textiles sectors at one end of the spectrum, while the capital intensive sophisticated
mills sector at the other end of the spectrum. The decentralised power looms/ hosiery
and knitting sector form the largest component of the textiles sector. The close linkage
of the textile industry to agriculture (for raw materials such as cotton) and the ancient
culture and traditions of the country in terms of textiles make the Indian textiles sector
unique in comparison to the industries of other countries. The Indian textile industry
has the capacity to produce a wide variety of products suitable to different market
segments, both within India and across the world.

Table no.3; The Top 10 Best Textile Companies in India in 2017-2018
Sr.no Name of the Web site Native place

company
1. Vardhaman Textiles www.vardhaman.com Ludhiana, Punjab
2. Bombay Dyeing www.bombaydyeing.com Mumbai
3. Grasim Industries www.grasim.com Mumbai
4. Reliance Textiles www.ril.com Neruda, Ahmadabad
5. FabIndia www.fabindia.com New Delhi
6. JCT Limited www.jct.co.in Hoshiarpur, Punjab
7. Lakshmi Mills www.lakshmimills.com Coimbatore, Tamil

Nadu
8. Mysore Silk Factory www.ksicsilk.com Bangalore,

Karnataka
9. Raymond’s www.raymond.in Mumbai
10. Arvind Mills www.arvind.com Ahmadabad

The Top 10 Best Textile Companies in India in 2017-2018
1. Vardhaman Textiles
The No 1 spot goes to Vardhamn Textiles. One of
the largest suppliers of steel yarn and sewing
threads, Vardhamn Textiles belonging to the
Oswald group has declared a profit of Rs 653.05
crores against sales of Rs 5587.14 crores. Without
the contribution from this company, no other
company could have entered the list. Hence, this
company is a worthy No 1 in this list of ten top
textile industries in India.
While presenting this report of the textile industries, we have accounted for the
suppliers of raw materials as well. This makes it a comprehensive list. Each of these
industries has a contribution to make towards the textile industry.
2. Bombay Dyeing
Bombay Dyeing is synonymous with textiles
right since the time they set up shop in 1879.
Historically, this is one of the oldest functioning
textile mills in the country. In addition to the
Bombay Dyeing fabrics, they manufacture bed
sheets, towels, etc. With a sale of Rs 1845
crores, this unit has declared a net loss of Rs
85.24 lacs for the year 2015-16. In spite of the loss by the textile unit, we rank this
industry at No 2 on the list because of its heritage value.
3. Grasim Industries
Established in 1947, Grasim Industries comes
under the control of the Aditya Birla Group. One
of largest manufacturers of viscose staple fiber,
pulp, yarn, etc, this company is a corporate giant.
With a turnover of Rs 7656 crores in viscose yarn
alone in 2015-16, this company proudly occupies
the No 3 spot on the list. In addition to yarn,
Grasim Industries manufactures cement, caustic
soda, etc. The profit from sale of viscose yarn
alone is Rs 1093 crores.

4. Reliance Textiles
When there is any discussion of textiles, the most
popular name of Vimal should come into play.
Reliance Textiles, the textiles wing of the
corporate giant, Reliance Industries, occupies the
No 4 position in this list. Established in 1966 as a
subsidiary of Reliance Industries, Vimal is the
flagship brand of the company. They have merged
their accounts with Reliance Industries. However,
popularity wise, no one can beat Vimal.
5. FabIndia
At No 5 on the list is FabIndia, the fastest
growing retail brand of apparel. It had crossed
the Rs 1000 crore turnover in 2015 itself.
Starting as an exporter of home furnishings,
they diversified into retail apparels, organic
food, and personal care items as well. However,
their apparel brand has become the most popular
in India overtaking big brands such as Zara and
Levis. With such a high turnover and still
growing, FabIndia is fit to occupy the 5th
position in this list.
6. JCT Limited
One of the top manufacturers of textile and
filament yarn in the country, JCT Mills Ltd,
Phagwara belongs to the Thapar Group of
Companies. An annual turnover of Rs 913.39
crores, this company has retained its position as
the principal supplier of raw materials to
various companies in India and abroad. The
position of this company would have been
better had they not witnessed a decline in their
income from Rs 1022 crores in 2015 to Rs 913
crores this year. This dip in the income is the main reason for the decrease in the
profit to Rs 5.43 crores from the figure of Rs 8.78 crores in 2015.

7. Lakshmi Mills
One of the top fabric suppliers to textile mills all over
India, Lakshmi Mills has a turnover of Rs 199.20
crores for this year. Producers of synthetic yarn and
cotton, the biggest raw materials for the other textile
mills in this list, Lakshmi Mills exports its products
as well. One should view their contribution as being
instrumental for the growth of the big mills like
Raymond, Reliance, etc. In business for a considerable amount of time, one should
not take the performance of Lakshmi Mills and the Mysore Silk Factory lightly.
Hence, in spite of the turnover being significantly less than the bigwigs in the industry
are, these companies find a place here in this list. This is because these big industries
would be nowhere without the contribution of these two mills.
8. Mysore Silk Factor

Mysore is famous for its silk. It is famous all
over the world. In fact, the Mysore silk factory
is one of the largest fabric manufacturers in
India. You can find the products of this factory
in practically every household. They are the
suppliers of the maximum textile companies in
India. Mysore silk is a brand of its own.
Operating under the auspices of the Karnataka
State Industries Corporation, they have crossed a
turnover of Rs 100 crores this year making them one of the fastest growing fabric
manufacturers in India. This explains their position at No 8 ahead of textile giants like
Arvind Mills and Raymond.
9. Raymond’s
Raymond’s has been a consistent performer
in this field. It is a constant member of the
top ten clubs. This year, they occupy the No
9 spot. In existence since 1925, Raymond
has a terrific presence all over India. You
can find a Raymond’s showroom in
practically every top city in India. Their slogan, “The Complete Man” has become
very popular over the years. This year, they have made sales of Rs 2810.81 crores.
The net profit of Rs 82.09 crores make it perfect to rank at No 9 in the list.

10. Arvind Mills

For a long time in the past, you could find Arvind
Mills among the top three mills in India. They
occupied the top spot for three consecutive years
from 2013 to 2015. Certain internal problems are
the reason for the slipping down of this company
from the top spot. With overall sales of Rs
5407.26 crores in 2015-16 and a net profit of Rs
318.85 crores, this company occupies the 10th
rank among the textile companies in India.
Contribution of Textile in Indian Gross Domestic Product (GDP):-

Textile plays a major role in the Indian economy
i. It contributes 14 per cent to industrial production and 4 per cent to Gross

Domestic Product (GDP)
ii. With over 45 million people; the industry is one of the largest sources of
employment generation in the country
The industry accounts for nearly 15 per cent of total.
Government benefits/policy's for textile industry:-

The Indian government has come up with a number of export promotion policies for
the textiles sector. It has also allowed 100 per cent Foreign Direct Investment (FDI) in
the Indian textiles sector under the automatic route. Initiative will be taken into
consideration by Government of India.
The Government has planned to connect as many as 5 crore (50 million) village
women to charkha (spinning wheel) in next 5 years with a view to provide them
employment and promote khadi and also, they inaugurated 60 khadi outlets which
were renovated and re-launched during the completion of Khadi and Village
Industries Commission (KVIC) 60th anniversary and a khadi outlet.
The Textiles Ministry will organise 'Hastkala Sahyog Shivirs' in 421 handloom-
handicrafts clusters across the country which will benefit over 1.2 lakhs weavers and
artisans.
The Gujarat government's decision to extend its textile policy by a year is set. It is
believes to attract Rs 5,000 crore (US$ 50 billion) of more investment in sectors
across the value chain. The government estimates addition till now of a million units
of spindle capacity in the spinning sector and setting up of over 1,000 units in
technical textiles.

Some of initiatives taken by the government to further promote the industry are
as under:
The Government of India plans to introduce a mega package for the power loom
sector, which will include social welfare schemes, insurance cover, cluster
development, and up gradation of obsolete looms, along with tax benefits and
marketing support, which is expected to improve the status of power loom weavers in
the country.
The Ministry of Textiles has signed Memorandum of Understanding (MoU) with 20
e-commerce companies, aimed at providing a platform to artisans and weavers in
different handloom and handicraft clusters across the country for selling their
products directly to the consumer.
Memorandum of Understanding (MoU) worth Rs 8,835 crore (US$ 1.3 billion) in
areas such as textile parks, textile processing, machinery, carpet development and
others, were signed during the Vibrant Gujarat 2017 Summit.
The Union Minister for Textiles inaugurated Meghalaya’s first-ever apparel and
garment making centre to create employment opportunities in the region. The Union
Minister for Textiles also mentioned Meghalaya has been sanctioned Rs 32 crore
(US$ 4.8 million) for promotion of handlooms.
The Government of India has announced a slew of labour-friendly reforms aimed at
generating around 11.1 million jobs in apparel and made-ups sectors, and increasing
textile exports to US$ 32.8 billion and investment of Rs 80,630 crore (US$ 12.09
billion) in the next three years.
STOW Analysis of Textile Industry in India

Strengths
 Stable democracy, with peaceful changes of government
 Large internal market, providing some insulation from global business cycle
 Successful diversification into manufacturing (motor vehicles) and services
(including call centres, IT and biotechnology)
 High annual Gross Domestic Product (GDP) growth
 External debt is low relative to earnings and repayment capacity
 Strong foreign exchange reserves
Weaknesses
 Vulnerable to natural disasters (including tsunami, droughts, floods and
earthquakes)
 The Kashmir region remains volatile and a source of potential conflict
 The political system tends to engender coalition governments that lack the
ability to push through economic reforms
 Poverty remains pervasive and income distribution uneven

 Structural weaknesses include inadequate infrastructure, current and fiscal
account deficits and state involvement crowds out private sector initiatives in
some sectors
 Weak structural business environment
Opportunity
 Growth rate of Domestic Textile Industry is 6-8% per annum.
 Large, Potential Domestic and International Market.
 Product development and Diversification to cater global needs.
 Eliminating of Quota Restriction leads to greater Market Development.
 Market is gradually shifting towards Branded Readymade Garment.
 Greater Investment and Foreign Direct Investment (FDI) opportunities are
available.
 Increased Disposable Income and Purchasing Power of India Customer open
New Market Development
Threats
 Competition from other developing countries, especially China.
 To make balance between price and quality.
 To balance the demand and supply.
 Geographically Disadvantage.
 International labour and Environment Laws.
 Eliminating of Quota system will leads to fluctuation in Export Demand.
 Threats for Traditional Market for Power loom and Handloom Products and
forcing them for product diversification.
Market Size of Textile Industry in India

The Indian textiles industry, currently estimated at around US$ 120 billion, is
expected to reach US$ 230 billion by 2020. The Indian Textile Industry contributes
approximately 2 per cent to India’s Gross Domestic Product (GDP), 10 per cent of
manufacturing production and 14 per cent to overall Index of Industrial Production
(IIP).
Indian khadi products sales increased by 33 per cent year-on-year to Rs 2,005 crore
(US$ 311.31 million) in 2016-17 and is expected to exceed Rs 5,000 crore (US$
776.33 million) sales target for 2018-19, as per the Khadi and Village Industries
Commission (KVIC). The total area under cultivation of cotton in India is expected to
increase by 7 per cent to 11.3 million hectares in 2017-18, on account of expectations
of better returns from rising prices and improved crop yields during the year 2016-17.
Indian exports of locally made retail and lifestyle products grew at a Compound
Annual Growth Rate (CAGR) of 10 per cent from 2013 to 2016, mainly led by
bedding bath and home decor products and textiles. The Government of India targets
textile and garment sector exports at US$ 45 billion for 2017-18.

Investment of Textile Industry in India

The textiles sector has witnessed a spurt in investment during the last five years. The
industry (including dyed and printed) attracted Foreign Direct Investment (FDI) worth
US$ 2.55 billion during April 2000 to June 2017.
Some of the major investments in the Indian textiles industry are as follows:
Future Group is planning to open 80 new stores under its affordable fashion format,
Fashion at Big Bazaar (FBB), and is targeting sales of 230 million units of garments
by March 2018, which is expected to grow to 800 million units by 2021.
Raymond has partnered with Khadi and Village Industries Commission (KVIC) to
sell Khadi-marked readymade garments and fabric in Khadi and Village Industries
Commission (KVIC) and Raymond outlets across India.
Road Ahead for Textile Industry in India

The future for the Indian textile industry looks promising, buoyed by both strong
domestic consumption as well as export demand. With consumerism and disposable
income on the rise, the retail sector has experienced a rapid growth in the past decade
with the entry of several international players like Marks & Spencer, Guess and Next
into the Indian market. The apparel market in India is estimated to grow at a
Compound Annual Growth Rate (CAGR) of 11.8 per cent to reach US$ 180 billion by
2025.
High economic growth has resulted in higher disposable income. This has led to rise
in demand for products creating a huge domestic market. The domestic market for
apparel and lifestyle products, currently estimated at US$ 85 billion, is expected to
reach US$ 160 billion by 2025.
The Indian cotton textile industry is expected to showcase a stable growth in FY2017-
18, supported by stable input prices, healthy capacity utilisation and steady domestic
demand.
Table no: 4; Raw Materials/Type of fabrics used in textile
1. Fabrics from Natural Fibers -Cotton Fabric

-Silk Fabric, etc.
2. Fabrics from Man-made Fibers -Polyester Fabric
- Grey Fabric, etc.
3. Fabrics for Special Uses -Industrial Fabric

- Plain Fabric, etc.

 Fabric Types
Fabrics are manufactured from various raw-materials which are available from nature
or artificially generated or mix of both. Fabrics can be classified based on the origin
of fibers and its processes or its end usage.
Natural fabrics are those which are created from the fibers of animal’s coats, the
cocoons of silkworms, and plants seeds, leaves and stems. It is breathable and never
causes rashes apart from being soft and durable. Natural fabric is the best choice for
everyone. It does not change colour from UV light and there is no warming until the
material loses its tensile strength.
Synthetic or man-made fabrics are made from fibers which are either completely
made from inorganic materials or organic materials combined with chemicals.
Synthetic fabrics have numerous properties with the purpose for which it is produced
and finished. Some are lightweight with ultra sheer while others are moisture wicking
and fast drying. Few are very luxurious to imitate some other natural fabrics and some
are very strong and tough.
1. Fabrics from Natural Fibers
Cotton Fabric
The fabric which is believed to be most soothing and safe is called as cotton fabric.
Immense use of cotton fabric for infant s dresses or beddings is a live testimony of its
softness and skin-friendliness. Cotton fabric has a distinctive feature that it adjusts
easily with climatic requirements that is why it is called all-season fabric. In summer
season cotton fabric keeps the body cool and absorbs the sweat easily whereas they
give a warm feel if worn in winder season.
Silk Fabric
Silk counts are to the strongest natural fabric in the world. Known for its softness,
luster, beauty and luxurious look, silk fabric is one of the higher grade fabrics
providing comfort to the wearer in all types of weather. Keeping the body cool in
summer and warm in winter, silk was discovered during 2640 B.C. in china. Today
there are different varieties of silk available in the market like Chiffon, Georgette,
Organza, Crepe de Chine, Duponi, Noil, Pongee, Shantung, Tussar, etc. Because of its
sheer variety of designs, weaving and quality, Indian silk textile are popular
worldwide.
2. Fabrics from Man-made Fibers
Polyester Fabric
Polyester is a type of fabric that is not found naturally. The polyester fabric is
manmade. The polyester fabric is widely used in various applications and is very
much in demand in markets. This fabric has various qualities due to those it is so

popular like wrinkle resistance and springing back into its smooth shape. The
polyester fabric is very strong and soft as well.
Grey Fabric
Due to its cost effectiveness, exquisiteness and longevity, grey fabric has been widely
used for cloth manufacturing. Uniquely woven grey fabric has become increasingly
popular in appreciation of increased market demand. Clothes made out of grey fabric
can simply be termed as stunning in each and every aspect.
3. Fabrics for Special Uses

Industrial Fabric
Industrial fabric is a fabric which is usually made from man-made fibers like
fiberglass, carbon, and aramid fibers. It covers a wide variety of widths, weights and
construction particularly made to meet a specific application. Industrial fabric is used
for decorative purposes. Industrial fabric is woven in various thicknesses and
constructions in basic weave, namely plain, leno, satin, basket etc. It is primarily used
for filtration, marine and recreational products, insulation, electronics, commercial &
construction and protective garments etc.
Plain Fabric
Plain fabrics are well known for their soberness and long lasting durability. Clothing
made of plain fabric can simply be termed as the most impressive and exclusive range
of clothing available today. With the available different varieties of plain fabric, the
choice is endless. Plain fabrics are also well known for their durability and cost
effectiveness.
Table no: 5; Sources and Types of Textiles

1. Animal Textiles
2. Plant Textiles
3. Mineral Textiles
4. Synthetic Textiles
Textiles can be made from many materials. These materials come from four main
sources: animal wool, silk, plant cotton, flax, jute, mineral asbestos, glass fibre, and
synthetic nylon, polyester and acrylic. In the past, all textiles were made from natural
fibres, including plant, animal, and mineral sources. In the 20th century, these were
supplemented by artificial fibres made from petroleum.

1. Animal Textiles
Animal textiles are commonly made from hair, fur, skin or silk. Wool refers to the
hair of the domestic goat or sheep, which is distinguished from other types of animal
hair in that the individual strands are coated with scales and tightly crimped, and the
wool as a whole is coated with a wax mixture known as lanolin, which is waterproof
and dirt proof. Wool is commonly used for warm clothing.
2. Plant Textiles
Grass, rush, hemp, and sisal are all used in making rope. In the first two, the entire
plant is used for this purpose, while in the last two; only fibres from the plant are
utilized. Coir coconut fibre is used in making twine, and also in floor mats, doormats,
brushes, mattresses, floor tiles, and sacking. Traditional textile making tools from
14th century Persia Straw and bamboo are both used to make hats. Straw, a dried
form of grass, is also used for stuffing, as is kapok.
3. Mineral Textiles
Asbestos and basalt fibre are used for vinyl tiles, sheeting, and adhesives, "transited"
panels and siding, acoustical ceilings, stage curtains, and fire blankets. Glass fibre is
used in the production of spacesuits, ironing board and mattress covers, ropes and
cables, reinforcement fibre for composite materials, insect netting, flame-retardant
and protective fabric, soundproof, fireproof, and insulating fibres.
4. Synthetic Textiles
A variety of contemporary fabrics from the left: even weave cotton, velvet, printed
cotton, calico, felt, satin, silk, hessian, polycotton. Woven tartan of Clan Campbell,
Scotland Embroidered skirts by the Alfaro-Nunez family of Cochas, Peru, using
traditional Peruvian embroidery methods. All synthetic textiles are used primarily in
the production of clothing. Polyester fibre is used in all types of clothing, either alone
or blended with fibres such as cotton. Carbon fibre is mostly used in composite
materials, together with resin, such as carbon fibre reinforced plastic. The fibres are
made from polymer fibres through carbonization.
Government Budgets
A. 2011-2012:-
Standard rate of excise duty raised from 10 percent to 12 percent; service tax rates
raised from 10 percent to 12 percent; no changes in peak custom duties of 10 percent
on non-agriculture goods regarding textile sector, the finance minister announced
setting up of two more mega clusters, one to cover prakasam and Guntur district in
Jharkhand in addition to 4 mega handlooms clusters already operational zed. He also
proposed setting up of three weaver’s service centers, one each in Mizoram, Nagaland
and Jharkhand. The minister proposed an Rs 500 cr. Pilot Scheme in twelfth plant for
promotion and application of Geo textiles in the northeast. A power looms mega
cluster will be set up in ichalkaranjee in Maharashtra.

B. 2012-2013:-
Budgetary supports schemes presented in the new Indian budget are: 1) Continuation
of the Technology Up gradation Fund (TUF) scheme; 2) Scheme For Integration
Textile Parks (SITP); 3) Reduction in the base custom duty for imported textile
machinery and a parts from 7.5% to 5.0% and; 4) Extending optional roots for central
excise duty for the fibers to finished goods value chain. India employees about 100
million people in various forms related to the textile industry. This number is about
1/3rd of the total population of the United States. Owing to the employment and
revenue generation, India has a cabinet level ministry for the textile sector.
C. 2013-2014:-
NEW DELHI: Finance Minister Arun Jaitley today unveiled a host of proposals,
including setting up of more mega cluster, to boost the textile sectors.
“I proposed to set up a trade facilitation center and a craft museum with an outlay of
50 crore to develop and promote handloom product and carry forward the rich
tradition of handlooms of Varanasi, where I also intend to support a textile mega
cluster,” Jaitley said in his maiden budget speech.
D. 2014-2015:-
The budget 2015 is a disappointing one for the textile sector, especially because the
industry had high expectations from the development oriented new government.
Being the most Labour-intensive industry in the country employing over 35 million
rural workers directly and contributing to over 17% to the country industrial
production, the sector was expecting some encouragement for improving production
efficiency. In view of the social and economic importance of this sector, the
government has included the textile industry as an important component
E. 2015-2016:-
The honourable Finance Minister Arun Jaitley tabled the first full budget that aims at
high growth, as he seeks to boost investment and ensure that ordinary people benefit.
The budget reflects the scaling up of disinvestment figures and India needs to keep
fiscal discipline in mind despite the need for higher investment. In 2015-16, the
budget allocation for the ministry was Rs. 4326.44 crores. Indian economy has seen a
turn around with growth picking up and inflation well within RBI’s comforts zone.
This has restored the macroeconomic stability and steered towards conditions for job
creation and double digit economic growth and a move towards the path of fiscal
consolidation. India would now be viewed by global investment with renewed hope
and interest. Budget Allocation to Ministry of Textiles Increased
F. 2016-2017:-
The ministry has received Rs. 4594.82 crores for the upcoming financial year to
support its various schemes covering the entire textile industry. In 2015-16, the
budget allocation for the ministry was Rs. 4326.44 crores. The flagship ATUF scheme
has been allocated Rs. 1480 crores for FY 2016-17 compared to Rs. 1510.79 crores in
the FY 2015-16. Apart from ATUFS, all central funded schemes for textile sector
have received required allocation of funds.

G. 2017-18
Total budget allocation to the Textile Ministry is at Rs. 6226.5 crores for the year
2017-18 against last year’s revised allocation of 6286.1 crores. Budgetary allocation
for Power loom, Silk and Wool textile sectors increased while handloom and
handicraft sector were allocated sizable amount of the fund.
H. 2018-19
 It is proposed to provide an outlay of Rs. 7148 crores for the textile sector in 2018-
19.
 Major fund allocated under ATUFS has been increased to Rs. 2300 crores for
2018-19 from Rs. 2013 crores during 2017-18.
 Fund allocation under ROSL has been increased to Rs. 2164 crores from Rs. 1555
crores during 2017-18.
 Customs Duty on Silk fabrics has been increased to 20% from current 10% to
protect the domestic manufacturers from surging imports in line with “Make in
India” initiative of the Government.
Fund for Interest Equalization Scheme has been more than doubled to Rs. 2500 crores
for 2018-19 from Rs. 1100 crores during 2017-18. This will substantially help in
reducing the cost of capital in India which at present is significantly higher as
compared to the competing countries.
Key Achievements
- Financial Inclusion- 12.5 crores families financially mainstreamed in 100
days.
- Transparent Coal Block auctions to augment resources of the states.
- Swachh Bharat is not only a programmed to improve hygiene and cleanliness
but has become a moment to regenerate India.
- Game changing reforms on the anvil.
- Goods and Service Tax (GST).
- Jan Dhan, Aadhar and Mobile (JAM) - for direct benefit transfer.

3.2 Company Profile
3.2.1 Group Overview
Farmson group is a well-known manufacturer and exporter of Grey fabrics, Dyed

Fabrics & Printed Sarees for the textile industry since 1993. Our manufacturing units
for from yarn to fabrics are located surrounding Surat, Gujarat, India. Our textile yarn
processing includes printing and dyeing for all types of fabrics including cotton,
polyester, viscose, and blended with printing colours. We are positioned as one of the
textile market leaders and to provide best service of Yarn Processing, Grey fabrics,
Dyed Fabrics, Printed Sarees manufacturer. We are widely recognized as one of the
best in the textile for our quality products. Our products meet with the exact
requirements of our customers and provide good value for money. We believe the
primary purpose of our business is to delight our customers. We have gained a
reputation among our customers in both local and national market.

Group of Companies
 Shukan Synthetics
 Farmsons Fiber
 Farmsons Filatex Pvt. Ltd.
 Sagar Texofab
 Sakshi Silk Mills
 Sakshi Saree

Overview
Innovation Is Identification
Farmsons group is one of the leading synthetic fabric manufacturers from Surat.
Farmsons group is founded by Ramjibhai Bhingradia (Chairman) in 1993. Farmsons
group is a pioneering organization with latest technical knowhow and huge
experience in textile sector. A good quality approach is our primary initiative.
Farmsons Group is focusing on new technologies and innovation to drive its business
in India and Internationally.
Infrastructure State art of unit

We have best class infrastructure and facilities. We have divided departments to
different functions like quality check, designing, manufacturing and servicing. Our
infrastructure is the root source of all our effective services.
Our Team
We highly skilled professional's teams for completed any Tasks. We provide complete
customer satisfaction. Through constant hard work and dedication, so we can rich
quality products binding to high quality standards.
Why Farmsons Groups

 We produce best quality Grey fabrics, Dyed Fabrics, Printed Saree
 We are manufacturing Fabrics by using premium quality
 We have State of the art production facilities
 Well experienced staff

Our Product Line

 Yarn Processing
Farmsons Group is one of the leading
yarn processors company in Surat,
Gujarat, India. We supply and process a
wide range of high quality cotton,
Polyester, Viscose & Nylon yarns in
India. We offer innovative textile
process solutions in pre-treatment,
dyeing, finishing, and printing. We use
the latest technology and innovative
production techniques for yarn
processing. We can offer requested
services to our clients in the ever
changing yarn markets. Our fabrics are
processed in state of the art processing plants. We have well experience allowing us to
carefully yarn process and provide the best service to our customers.
Yarns are processed and stocked in our modern manufacturing and warehousing
facilities in Surat, India. We use the latest technology and innovative production
techniques ensuring the ability to offer a yarn processor service to our clients in a
constantly changing yarn market. Our semi-worsted machinery is especially good for
handling short natural fiber. Our technical support team checks yarn products each
production step to achieve best yarn quality for India as well as international market.
We would like to help to customer to develop new type of fabrics.
Polyester Sized Beam
Denier
 50|36 Bright Beam
 70|72 Semi Dull Beam
 80|36 Bright Beam

 50|36 Bright Catonic Beam
 70|72 B.D Catonic Beam
 Pano (Width)-42" to 98"
Ends - 3600 to 19200
Polyester Crep Yarn
 70|36 Semi Dull Catonic crep

 50|48 Semi Dull Catonic crep
 70|36 Bright Catonic Beam
 50|48 B.D Catonic Beam
We can manufacture customer order for twist & false tan'st according to client’s
requiments.
 Dyed Fabrics
Sakshi Silk Mills one of the leading
manufacturers & Exporter Company in
Surat, Gujarat, India. We offer optimum
quality dyed fabrics that are manufactured
using high quality raw material. We
manufacturer & supply Dyed Fabric as per
requirement of the garments, textile industry
etc. We provide a vast collection of Yarn
Dyed Fabrics consisting of different patterns,
colors and styles to suit every need. Our dyed
fabrics are export in the domestic and abroad
textile market. We have with us rich
experience in offering our customers these beautiful and enchanting collection of yarn
dyed garment range. Made using 100% natural fiber yarns, the quality fabric used in
its making is also highly preferred by designers, knitters and weavers alike and help in
providing beautiful rich finish to the apparels.
Our state of art weaving unit produces high-quality Grey fabrics of perfect finish
which are highly durable, of elegant texture and economical. Our expertise in the
textile industry has obtained a further boost with exclusive dyed Fabrics.

Features of dyed fabrics

 High grade yarn
 Color fast dyes
 Durable
 Resistant to shrinking
 Easy to wash
Required for
 Saree
 Dress Material
 Ladies Weaving
 Printed Saree
We are continually developing latest designer
saree catalog. Shakshi Saree manufacture,
export & supply of exclusive collection of
Printed Sarees in Surat, Gujarat, India. We
offer printed sarees which are manufactured
using premium quality fabrics. Our printed
sarees are designed by our well experience
designers keeping in mind varied
requirements of our clients. Designer printed
sarees are available in varied peerless designs
and in varied mesmerizing colors. Our
Printed Sarees are widely demanded by our
customers for their attractive colors, designs, pattern & stunning prints.
Our sarees are printed from excellent quality blocks, printed sarees is easily washable.
Designer printed sarees provide a sparkling look to the wearer with their excellence
prints. Our collection of printed sarees has wide options of prints available for our
clients ranging from simple, small to bold prints. Printed sarees best for any casual or
formal event, these sarees are available for our clients at market leading prices. we are
continually develop latest designer saree catalog.

Our range is widely known for the following attributes

 Attractive colors
 Complimentary designs
 Shrink resistance
 Colorfastness
 Soft quality
 Fade resistant
 Fine prints
3.2.2 Sagar Overview

History of Sagar TexoFab
Incorporated in the year 2009 as a private limited company, sagar texofab had only
one industrial unit of revere a crep till 2011. Since then the company has made rapid
progress in widely diverse fields. At present, the company is a trendsetter in textiles
and also has a remarkable presence in textile industries they are making almost 80
qualities of fabrics.
Sagar texofab is one of the leading grey processor companies in Surat, Gujarat, India.
We supply and process a wide range of high quality cotton. Polyester, Viscose &
Nylon grey in India. We offer innovative textile solutions in pre-treatment, dyeing,
finished and printing. We use the latest technology and innovative production
technique for grey processing. We can offer requested services to our clients in the
ever changing grey market. We have well experience allowing us to carefully grey
process and provide the best services to our customer.
Grey are processed and stocked in our modern manufacturing and warehousing
facilities in Surat, India. We use latest technology and innovation production
techniques ensuring the ability to offer a grey processor services to our client in a
constantly changing grey market. Our semi-worsted machinery is especially good for
handling short natural fiber. Our technical support team checks grey product each
production step to achieve best grey qualities for India as well as international market.
We would like to help to customer to developed new type of fabrics.

We have best class infrastructure and facilities. We have divided department to
different function like quality check designing, manufacturing and servicing. Our
infrastructure is the root sources of all our effective services.
Product Line of Sagar TexoFab
 Grey Fabrics Manufacturer

Farmsons Group is a quality Grey fabrics for
garment & textiles industries. Grey Fabric
has been widely used for cloth
manufacturing. We offer Grey Fabrics
manufactured with using latest technologies.
Grey fabrics available one of the leading in a
wide variety to suit different requirements of
the clients. High quality Grey fabric has
become increasingly popular in appreciation
of increased market demand. Clothes made out of Grey fabric can simply be termed
as stunning in each and every aspect. We receive repeated demands from clients all
over the domestic & international market as we are the one-stop destination for Grey
manufacturer, exporter & suppliers of Grey fabrics in Surat, Gujarat, India.
We manufacture high fabrics in different counts, patterns and weaves.
Grey Fabrics Known for

 Sophisticated looks
 High absorbency
 Easy stitching
 Easy maintenance
 Fine draping

Scope of Gray Fabrics Manufacturing

 Fabric - Polyester, Viscose, Cotton or Blended
 Weaving Type - Plain & Dobby
 Width - 32" to 98"
Also we can manufacture any customer fabric according to clients requirements like
width, GSM and reed pick.
Organization structure:-
Management Team
Mr. Ramjibhai Bhingradia
Founder & President

He is Founder & President of the Sagar Texofab. His
hard work and effort had built a stable foundation for
our company and now it has been developed as a
synthetic yarn to fabric manufacturer Textile Company.
He built up a stable business and grown smoothly in
changing markets over the past three decades. Our Grey
brand “Sagar” has gained a national reputation and
recognition among quality conscious customers.
Miss. Sharmishthaben. R. Bhingradia
Founder & President

She is Founder & Partner of the Sagar Texofab. She
is hard working and committed to his work. Under
her dynamic leadership, we dream bigger, think
faster and most important of all we work harder with
commitment to stay ahead of competition to achieve
our goal. She is working on design, develop and
implement strategic plans for the organization in a
cost-effective and time-efficient manner.

Mr. Dhiren Patel
Plant Incharge - Core Team

He is working as a Plant in charge in farmsons. He Lead
looms and yarn production and maintenance personnel
in day to day activities to ensure the safe and efficient
maintenance of equipment and facilities. He ensures
preventative maintenance and repairs of all material
handling systems and equipment to minimize
downtime. He works with Plant Maintenance
Supervisor in planning, budgeting, organizing
resources, executing work plans, monitors production
and quality, resolves issues and participates in special
projects and work schedules.
Mr. Devidas Thomble
General Manager - Core Team

He is working as a general manager. He is responsible
for revenue generation throughout sales and marketing
of textile fabrics products. He is able to carry out proper
analysis on the textile market research data. On the
basis of the analysis report, to develop an effective
marketing strategy that takes into account all the
marketing view. He is able to develop and maintain
good customer relations.
Mr. Chenram Chaudhry
General Manager Sales & Marketing-Core

Team
He is working as a general manager sale & marketing of
dyed, printed fabrics sarees. He is able to develop a
positive, professional and engaged team environment to
ensure sales & marketing goals. He establishes standard
operating procedures for all sales & marketing
activities. He works with operational leaders to identify
business growth opportunities.

Mr. P. C. Patel
Technical Incharge - Core Team

He is working as a Technical Incharge. He has depth
knowledge in testing standard and technical know about
textile fabrics. He is well experience in ensure
execution to schedule by assigned to production.
Identifying issues & identifying risks associated with
the products and working together
Mr. Vipul Shiroya Vakil
Sr. Accountant - Core Team
He is working as a senior accountant. He has depth

knowledge in finance accounting. He is well
experience in company accounting. If he found any
unwanted expenditure in the company then he give
his valuable advice to overcome that expenses. The
company generate revenue then he gives the idea
about the investment in plant and machineries.
Mr. Vishal Patel
Computer operator - Core Team

He is working as a Computer operator for data entry.
He help senior accountant in the work of the
accountancy. He also makes data entry of the
company. He is hard working and honest to his work.
He completes his work in time. If the work load is
more then he work overtime and complete his work.

Vision Mission Quality Assurance
“Vision Statement"
By 2025 Sagar texofab aspires to be
one of the fastest Growing and most
respected organization dealing in
textile product.
"Mission Statement"
Produce premium Quality product
through highly responsive and dedicated
team and creating an environment of
fairness, honesty and courtesy for our
entire stake holder.
"Quality Assurance"
We never compromise on quality of the
products. The yarns and fabrics that we
supply are assured to be of premium
quality. Our products are duly tested at
our end using latest equipment that
assures their colour fastness, fine
texture, finish, etc. The testing is
conducted as per the textiles industry
standards.
Value:
 Customer’s satisfaction and delight

 Superior quality of performance.
 Concern for the environment and community.
 Fair to all.
 To provide a safe work place and promote healthy work habits.

Objectives:
 To ensure optimum utilization of existing.

 Plant and machinery, through proper maintenance.
 To enlarge product mix through product development.
 To lead and enhance and the development of fashion and textile
industry.
 To become an area of excellence in fashion and textile education and
research, regionally.
Table no.6; Company PROFILE

Name Sagar Texofab
Address Plot No. B/4, Diamond Nagar, Laskana,
Ta:-Kamrej, Dist:-Surat.
st
Date of Establishment 21 .May.2009
Business Operation Textile
Headquarters Diamond Nagar, India
Management Details Founder & President:-
Mr. Ramjibhai Bhingradia,
Miss. Sharmishthaben. R. Bhingradia
Bankers IDBI Bank, State Bank of India,
Axis Bank
Website sagartexofab@farmsons.com
Human Resource B/4 Diamond Nagar , Diamond Rose
Nursery Gate , At:- Laskana , Ta:- Kamrej
, Di:- Surat
Sales Manager Devidas Rameshwar Thomble,
Nandkishor Prajapati
Accountant Vipul Shiroya Vakkil [Sr. Accountant],
Amit Rakho [Ass. Accountant]
Computer operator for data entry Vishal Patel
Dispatch Department Sunil Kumar Thakur,
Jitendra Khuswaha
Plant Supervisor Praful Champanera,
Harsh Patel,
Hitesh Thakkar,
Ravi Jadvani,
Dharmesh Goti
M-Plant Master Prabhunath Yadav,
Ratan Master

ORGANIZATIONAL STRUCTURE

4.1. DATA PRESENTATION AND ANAYLSES
A. TABLES
B. GRAPHS / DIAGRAMS

4.1 Data Presentation & Analysis

(A)Comparative Statement Analysis
The researcher has used five year data for comparing the P&L A/C and Balance Sheet
to know the changes in Assets/ Liabilities and Profit /Loss of the company.
Table no: 7; Comparative Profit & Loss Statement of Sagar Texofab

for the Year 2012-13 & 2013-2014
Increase /
2012-13 2013-14 Decreases Changes in
Particulars (Rs.) (Rs.) (Rs.) (%)
Sales 120654128 136065364 15411236 12.7730698
Less: Sales returns 1949584 3495122 1545538 79.275271
Net Sales (A) 118704544 132570242 13865698 11.6808485
Less: Cost of Sales
Raw materials 83091899 97490731 14398832 17.3288036
Direct Wages 10202150 10401539 199389 1.95438216
Manufacturing expenses 13354741 12956070 -398671 -2.9852395
Total of cost of sales (B) 106648790 120848340 14199550 13.3143095
Gross Profit (A-B)= C 12055754 11721902 -333852 -2.7692337
Less: Operating expenses
Administrative expenses 1732183 1520048 -212135 -12.246685
Selling & Distribution
expenses 224864.48 174538.15 -50326.33 -22.380738
Total of Operating
expenses (D) 1957047.48 1694586.15 -262461.33 -13.411086
Net operating profit
(C-D)=E 10098706.52 10027315.85 -71390.67 -0.7069289
Add:Non -trading Income
Interest received 3689973.01 4201653 511679.99 13.8667678
Dividend received 312015 312015 0 0
Less:Non-trading
expenses
Interest paid 8845003 9369101 524098 5.92535695
Earnings before
depreciation, interest &
tax (EBDIT) 5255691.53 5171882.85 -83808.68 -1.5946271
Less: Depreciation 5061889 4315234 -746655 -14.750521
Earnings before interest
& tax (EBIT) 193802.53 856648.85 662846.32 342.0215
Less: Interest - - - -

Earnings before tax
(EBT) 193802.53 856648.85 662846.32 342.0215
Less: Tax 58140.759 256994.655 198853.896 342.0215
Earnings after tax (EAT) 135661.771 599654.195 463992.424 342.0215
Interpretation:-
From the above table it can be seen that the sales are increased by 12.77% i.e. from
120654128 to 136065364. The Sales return also increased from 1949584 to 3495122.
The Net sales are increased by 11.68% i.e. from 118704544 to 132570242. The cost
of sales is also increases from 106648790 to 120848340. Due to increase in cost the
Gross profit reduced from 12055754 to 11721902. Operating expenses reduced from
1957047.48 to 1694586.15. The Net Operating profit is reduced by 0.71%. The Non
trading income i.e. Interest received increased by 13.87%. The Non trading expenses
increased from 8845003 to 9369101. The Earnings before depreciation, interest & tax
is reduced by 1.59%. The deprecation is also reduced from 5061889 to 4315234. The
Earnings before tax is increased from 193802.53 to 856648.85 and the earnings after
tax are increased by 342.02% respectively.
Table no: 8; Comparative Balance Sheet Statement of Sagar Texofab

for the Year Ending 31st March, 2012-2013 & 2013-2014
Increase/
Assets
Current Assets
(a)Inventories 12876462.94 4281357 -8595105.94 -66.75052
(b)Cash & bank balance 726231.67 295983.22 -430248.45 -59.243967
(c)Trade Payables 34858525 47421747 12563222 36.0406013
(d)Short Term loan & advance 1886139 168862 -1717277 -91.047213
(e)Other Current Assets 45049 45049 0 0
Total of Current Assets 50392407.61 52212998.22 1820590.61 3.6128272
Fixed Assets
(a)Building 1451515 1306363 -145152 -10.000034
(b)Furniture 41497 37347 -4150 -10.000723
(c)Machinery 27429030 23219901 -4209129 -15.345526
(d)Investment 2461883 4197764 1735881 70.5102964
(e)Other Fixed Assets 357875 336822 -21053 -5.8827803
Total of Fixed Assets 31741800 29098197 -2643603 -8.3284596
Total of Assets 82134207.61 81311195.22 -823012.39 -1.0020336

Liabilities
Current Liabilities
(a)Short term liabilities 6747932 7476707 728775 10.7999755
(b)Trade Payable 29133000.99 33882727.99 4749727 16.3035967
(c)Short term Provisions 225375 296436 71061 31.5301165
(d)Other Current Liabilities 10727305 10727305 100
Total Current Liabilities 36106307.99 52383175.99 16276868 45.0803998
Long term liabilities
(a)Long term borrowing 38261809.84 19952329.55 -18309480.3 -47.853147
Capital Account 7766089.78 8975689.68 1209599.9 15.5754045
Total of liabilities 82134207.61 81311195.22 -823012.39 -1.0020336
Interpretation:-
From the above table it can be seen that the inventory is reduced from 12876462.94 to
4281357. Short term loan & advance is reduced from 1886139 to 168862. There are
no changes that can be seen in the other current asset. The total current asset is
increased as compared to 2012-13 to 2013-14 by 3.61%. The investment is increased
from 2461883 to 4197764 by 70.51%. The other fixed assets are reduced by 5.88%.
The total fixed asset is reduced from 31741800 to 29098197 by 8.33%. The total
assets are reduced as compared to 2012-13 to 2013-14 by 1.002%. The Short term
liabilities are increased by 10.80%. The trade payable is also increased by 16.30%.
The Short term provisions are increased by 31.53%. The other current liabilities are
increased by 10727305. The total current liabilities are increased by 45.08%. The long
term borrowing is reduced from 2012-13 to 2013-14 by 47.85%. The capital is
increased by 15.57%. The total liabilities are reduced by 1.002% respectively.
Table no: 9; Comparative Profit & Loss Statement of Sagar Texofab

for the Year 2013-2014 & 2014-2015
Increase/
Sales 136065364 103797957 -32267407 -23.714637
Less: Sales returns 3495122 3227015 -268107 -7.670891
Net Sales (A) 132570242 100570942 -31999300 -24.137619
Less: Cost of Sales
Raw materials 97490731 60485067 -37005664 -37.958136
Direct Wages 10401539 12376405 1974866 18.9862865

Manufacturing expenses 12956070 14596973 1640903 12.6651292
Total of cost of sales (B) 120848340 87458445 -33389895 -27.629585
Gross Profit (A-B)= C 11721902 13112497 1390595 11.8632198
Administrative expenses 1520048 2078703 558655 36.7524578
expenses 174538.15 229256 54717.85 31.3500802
Total of Operating
expenses (D) 1694586.15 2307959 613372.85 36.1960264
(C-D)=E 10027315.85 10804538 777222.15 7.75104885
Add: Non -trading Income
Interest received 4201653 2269679.82 -1931973.18 -45.981265
Less:Non-trading expenses
Interest paid 9369101 8762254 -606847 -6.4771102
Earnings before
tax (EBDIT) 5171882.85 4623978.82 -547904.03 -10.593899
Earnings before interest &
tax (EBIT) 856648.85 930891.82 74242.97 8.6666748
Earnings before tax (EBT) 856648.85 930891.82 74242.97 8.6666748
Less: Tax 256994.655 279267.546 22272.891 8.6666748
Interpretation:-
From the above table it can be seen that the sales are decreased by 23.71% i.e. from
136065364 to 103797957. The Sales return is also decreased from 3495122 to
3227015. The Net sales are decreased by 24.14% i.e. from 132570242 to 100570942.
The cost of sales is also decreased from 120848340 to 87458445. The Gross profit is
increased from 11721902 to 13112497. The operating expenses are increased from
1694586.15 to 2307959. The Net operating profit is increased by 7.75%. The Non
trading income i.e. Interest received decreased by 45.98%. The Non trading expenses
is reduced from 9369101 to 8762254. The Earnings before depreciation, interest & tax
are reduced by 10.59%. The deprecation is also reduced from 4315234 to 3693087.
The Earnings before tax is increased from 856648.85 to 930891.82 and the earnings
after tax are increased by 8.67% respectively.

Table no: 10; Comparative Balance Sheet Statement of Sagar

Texofab for the Year Ending 31st March, 2013-2014 & 2014-2015
Increase/
Assets
Current Assets
(a)Inventories 4281357 8984335 4702978 109.847836
(b)Cash & bank balance 295983.22 1506602.22 1210619 409.016092
(c)Trade Payables 47421747 39351618.58 -8070128.42 -17.01778
(d)Short Term loan &
advance 168862 65951 -102911 -60.943848
(e)Other Current Assets 45049 54592 9543 21.1836001
Total of Current Assets 52212998.22 49963098.8 -2249899.42 -4.3090792
Fixed Assets
(a)Building 1306363 1175727 -130636 -9.999977
(b)Furniture 37347 33612 -3735 -10.000803
(c)Machinery 23219901 19736915 -3482986 -15.000004
(d)Investment 4197764 4078976 -118788 -2.8297922
(e)Other Fixed Assets 336822 413592 76770 22.7924542
Total of Assets 81311195.22 75401920.8 -5909274.42 -7.2674795
Liabilities
Current Liabilities
(a)Short term liabilities 7476707 7048201 -428506 -5.731213
(b)Trade Payable 33882727.99 36974132 3091404.01 9.12383445
(c)Short term Provisions 296436 215255 -81181 -27.385675
(d)Other Current Liabilities 10727305 4743248 -5984057 -55.783414
Total Current Liabilities 52383175.99 48980836 -3402339.99 -6.4951006
(a)Long term borrowing 19952329.55 20914504.29 962174.74 4.82236792
Capital Account 8975689.68 5506580.51 -3469109.17 -38.650057
Total of liabilities 81311195.22 75401920.8 -5909274.42 -7.2674795
Interpretation:-
From the above table it can be seen that the inventory is increased from 4281357 to
8984335. Short term loan & advance is reduced from 168862 to 65951. There is
increased in the other current asset from 45049 to 54592. The total current asset is
decreased as compared to 2013-14 to 2014-15 by 4.31%. The investment is reduced

from 4197764 to 4078976 by 2.83%. The other fixed assets are increased by 22.79%.
The total fixed asset is reduced from 29098197 to 25438822 by 12.57%. The total
assets are reduced as compared to 2013-14 to 2014-15 by 7.27%. The Short term
liabilities are reduced by 5.73%. The trade payable is also increased by 9.12%. The
Short term provisions are reduced by 27.38%. The other current liabilities are reduced
by 55.78%. The total current liabilities are reduced by 6.5%. The long term borrowing
is reduced from 2013-14 to 2014-15 by 4.82%. The capital is decreased by 38.65%.
The total liabilities are reduced by 7.27% respectively.
Table no: 11; Comparative Profit & Loss Statement of Sagar

Texofab for the Year 2014-2015 & 2015-2016
Increase/
Sales 103797957 82600731 -21197226 -20.421622
Less: Sales returns 3227015 6513065 3286050 101.8294
Net Sales (A) 100570942 76087666 -24483276 -24.344284
Less: Cost of Sales
Raw materials 60485067 36632180 -23852887 -39.435993
Direct Wages 12376405 9427651 -2948754 -23.82561
Manufacturing expenses 14596973 17949827 3352854 22.9695157
Gross Profit (A-B)= C 13112497 12078008 -1034489 -7.8893364
Less:Operating expenses
Administrative expenses 2078703 2265853.27 187150.27 9.00322316
expenses 229256 246448 17192 7.49904037
Total of Operating
expenses (D) 2307959 2512301.27 204342.27 8.85380849
(C-D)=E 10804538 9565706.73 -1238831.27 -11.465842
Add:Non-trading Income
Interest received 2269679.82 1403677 -866002.82 -38.155286
Less:Non-trading
expenses
Interest paid 8762254 7741001.68 -1021252.32 -11.655133
Earnings before
tax (EBDIT) 4623978.82 3540397.05 -1083581.77 -23.433969

& tax (EBIT) 930891.82 827157.05 -103734.77 -11.14359
Earnings before tax
(EBT) 930891.82 827157.05 -103734.77 -11.14359
Less: Tax 279267.546 248147.115 -31120.431 -11.14359
Earnings after tax (EAT) 651624.274 579009.935 -72614.339 -11.14359
Interpretation:-
103797957 to 82600731. The Sales return is increased from 3227015 to 6513065. The
Net sales are decreased by 24.34% i.e. from 100570942 to 76087666. The cost of
sales is also decreased from 87458445 to 64009658. The negative thing is that the
Gross profit is decreased from 13112497 to 12078008. The operating expenses are
increased from 2307959 to 2512301.27. The Net operating profit is reduced by
11.47%. The Non trading income i.e. Interest received decreased by 38.16%. The Non
trading expenses are reduced from 8762254 to 7741001.68. The Earnings before
depreciation, interest & tax is reduced by 23.43%. The deprecation is also reduced
from 3693087 to 2713240. The Earnings before tax is decreased from 930891.82 to
827157.05 and the earnings after tax are decreased by 11.14% respectively.

Increase/
Assets
Current Assets
(a)Inventories 8984335 8536388 -447947 -4.9858671
(b)Cash & bank balance 1506602.22 2279385 772782.78 51.2930865
(c)Trade Payables 39351618.58 29978620.83 -9372997.75 -23.818583
advance 65951 55188 -10763 -16.319692
(e)Other Current Assets 54592 45613 -8979 -16.447465
Total of Current Assets 49963098.8 40895194.83 -9067903.97 -18.149202

Fixed Assets
(a)Building 1175727 1058154 -117573 -10.000026
(b)Furniture 33612 30251 -3361 -9.999405
(c)Machinery 19736915 17219419 -2517496 -12.755266
(d)Investment 4078976 2048692 -2030284 -49.774355
Total of Assets 75401920.8 61601492.83 -13800428 -18.302489
Liabilities
Current Liabilities
(a)Short term liabilities 7048201 3744055.54 -3304145.46 -46.879274
(b)Trade Payable 36974132 22188387 -14785745 -39.989431
(d)Other Current
Liabilities 4743248 1065084.07 -3678163.93 -77.545259
Total Current Liabilities 48980836 27209652.61 -21771183.4 -44.44837
Capital Account 5506580.51 3834996.54 -1671583.97 -30.356116
Total of liabilities 75401920.8 61601492.83 -13800428 -18.302489
Interpretation:-
From the above table it can be seen that the inventory is decreased from 8984335 to
8536388. The Short term loan & advance is reduced from 65951 to 55188. There is
decreased in the other current asset from 54592 to 45613. The total current asset is
decreased as compared to 2014-15 to 2015-16 by 18.15%. The investment is reduced
from 4078976 to 2048692 by 49.77%. The other fixed assets are decreased by
15.43%. The total fixed asset is reduced from 25438822 to 20706298 by 18.60%. The
total assets are reduced as compared to 2014-15 to 2015-16 by 18.30%. The Short
term liabilities are reduced by 46.88%. The trade payable is decreased by 39.99%.
The Short term provisions are reduced by 1.45%. The other current liabilities are
reduced by 77.55%. The total current liabilities are reduces by 44.45%. The long term
borrowing is increased from 2014-15 to 2015-16 by 46.10%. The capital is decreased
by 30.36%. The total liabilities are reduced by 18.30% respectively.

Table no: 13; Comparative Profit & Loss Statement of Sagar

Increase/
Sales 82600731 46914850 -35685881 -43.202863
Less: Sales returns 6513065 2259743 -4253322 -65.304461
Net Sales (A) 76087666 44655107 -31432559 -41.310978
Less: Cost of Sales
Raw materials 36632180 24366117 -12266063 -33.484393
Direct Wages 9427651 5790012 -3637639 -38.584786
Manufacturing expenses 17949827 7256352 -10693475 -59.574251
Gross Profit (A-B)= C 12078008 7242626 -4835382 -40.034598
Less:Operating expenses
Administrative expenses 2265853.27 2440267.8 174414.53 7.69752094
expenses 246448 253132 6684 2.712134
Total of Operating
expenses (D) 2512301.27 2693399.8 181098.53 7.20847186
(C-D)=E 9565706.73 4549226.2 -5016480.53 -52.442341
Add:Non -trading Income
Interest received 1403677 1008494 -395183 -28.153414
Dividend received 312015 234011.25 -78003.75 -25
Less:Non-trading
expenses
Interest paid 7741001.68 5731443.32 -2009558.36 -25.959927
Earnings before
tax (EBDIT) 3540397.05 60288.13 -3480108.92 -98.297136
Less: Depreciation 2713240 8136231 5422991 199.871408
& tax (EBIT) 827157.05 -8075942.87 -8903099.92 -1076.3494
Earnings before tax
(EBT) 827157.05 -8075942.87 -8903099.92 -1076.3494
Less: Tax 248147.115 -248147.115 -100
Earnings after tax (EAT) 579009.935 -8075942.87 -8654952.81 -1494.7849

Interpretation:-
82600731 to 46914850. The Sales return is decreased from 6513065 to 2259743. The
Net sales are decreased by 41.31% i.e. from 76087666 to 44655107. The cost of sales
is deceased from 64009658 to 37412481. The Gross profit is decreased from
12078008 to 7242626. The operating expenses are increased from 2512301.27 to
2693399.8. The Net operating profit is reduced by 52.44%. The Non trading income
i.e. Interest received is decreased by 28.15%. The Non trading expenses are reduced
from 7741001.68 to 5731443.32. The Earnings before depreciation, interest & tax is
reduced by 98.30%. The deprecation is increased from 2713240 to 8136231. The
Earnings before tax is decreased from 827157.05 to -8075942.87 and the earnings
after tax is decreased by 1494.78% respectively.

Increase/
Decreases Changes in
2015-16 2016-17
Assets
Current Assets
(a)Inventories 8536388 19086715 10550327 123.592402
(b)Cash & bank balance 2279385 923928.75 -1355456.25 -59.465876
(c)Trade Payables 29978620.83 23311363 -6667257.83 -22.240042
advance 55188 4839844.83 4784656.83 8669.7413
(e)Other Current Assets 45613 10959 -34654 -75.973955
Fixed Assets
(a)Building 1058154 1237200 179046 16.9205995
(b)Furniture 30251 27226 -3025 -9.9996694
(c)Machinery 17219419 48045970.87 30826551.87 179.022021
(d)Investment 2048692 2582458 533766 26.0539896
Total of Fixed Assets 20706298 52188821.87 31482523.87 152.043228
Total of Assets 61601492.83 100361632.5 38760139.62 62.9207797
Liabilities
Current Liabilities
(a)Short term liabilities 3744055.54 6868480.54 3124425 83.4502845
(b)Trade Payable 22188387 24465933.67 2277546.67 10.2645887

(d)Other Current
Liabilities 1065084.07 7632608.78 6567524.71 616.620311
Total Current
Liabilities 27209652.61 39094969.99 11885317.38 43.6805186
Capital Account 3834996.54 10109995.54 6274999 163.624633
Total of liabilities 61601492.83 100361632.5 38760139.62 62.9207797
Interpretation:-
From the above table it can be seen that the inventory is increased from 8536388 to
19086715. The Short term loan & advance is increased from 55188 to 4839844.83.
There is decreased in the other current asset from 45613 to 10959. The total current
assets are increased compared to 2015-16 to 2016-17 by 17.8%. The investment is
increased from 2048692 to 2582458 by 26.05%. The other fixed assets are decreased
by 15.39%. The total fixed asset is increased from 20706298 to 52188821.87 by
152.04%. The total assets are increased as compared to 2015-16 to 2016-17 by
62.92%. The Short term liabilities are increased by 83.45%. The trade payable is also
increased by 10.26%. The Short term provisions are reduced by 39.68%. The other
current liabilities are reduced by 616.62%. The total current liabilities are increased
by 43.68%. The long term borrowing is increased from 2015-16 to 2016-17 by
67.41%. The capital is increased by 163.62%. The total liabilities are increased by
62.92% respectively.
(B)Trend Analysis
The researcher has used last five year data for finding out the trend of the business in
which flow the business is going. To know whether the company is going downward
or upward as compared to the profit increases or decreases.
Table no: 15; Trend analysis of P&L Account for Year 2012-2013,
2013-2014, 2014-2015, 2015-2016 and 2016-2017 (Amount in Rupees)
2012-13 2013-14 2014-15 2015-16 2016-17

Particulars (Rs.) (Rs.) (Rs.) (Rs.) (Rs.)
Sales 120654128 136065364 103797957 82600731 46914850
Less: Sales returns 1949584 3495122 3227015 6513065 2259743
Net Sales (A) 118704544 132570242 100570942 76087666 44655107
Less: Cost of Sales
Raw materials 83091899 97490731 60485067 36632180 24366117

Direct Wages 10202150 10401539 12376405 9427651 5790012
Manufacturing
expenses 13354741 12956070 14596973 17949827 7256352
Total of cost of sales
(B) 106648790 120848340 87458445 64009658 37412481
Gross Profit
(A-B)= C 12055754 11721902 13112497 12078008 7242626
Less:Operating
expenses
Administrative
expenses 1732183 1520048 2078703 2265853.27 2440267.8
expenses 224864.48 174538.15 229256 246448 253132
Total of Operating
expenses
(D) 1957047.48 1694586.15 2307959 2512301.27 2693399.8
(C-D)=E 10098706.52 10027315.85 10804538 9565706.73 4549226.2
Add: Non -trading
Income
Interest received 3689973.01 4201653 2269679.82 1403677 1008494
Dividend received 312015 312015 312015 312015 234011.25
Less: Non-trading
expenses
Interest paid 8845003 9369101 8762254 7741001.68 5731443.32
Earnings before
depreciation, interest
& tax (EBDIT) 5255691.53 5171882.85 4623978.82 3540397.05 60288.13
Less: Depreciation 5061889 4315234 3693087 2713240 8136231
Earnings before
interest & tax (EBIT) 193802.53 856648.85 930891.82 827157.05 -8075942.87
Less: Interest - - - - -
Earnings before tax
(EBT) 193802.53 856648.85 930891.82 827157.05 -8075942.87
Less: Tax 58140.759 256994.655 279267.546 248147.115
Earnings after tax
(EAT) 135661.771 599654.195 651624.274 579009.935 -8075942.87

Table no: 16; Trend analysis of P&L Account for Year 2012-2013, 2013-
2014, 2014-2015, 2015-2016 and 2016-2017 (Amount in Percentage)
2012- 2013-14 2014-15 2015-16 2016-17

Particulars 13(%) (%) (%) (%) (%)
Sales 100 112.7730698 86.0293458 68.46075834 38.88375042
Less: Sales returns 100 179.275271 165.5232603 334.0746026 115.9089837
Net Sales (A) 100 111.6808485 84.72375076 64.09836004 37.61870059
Less: Cost of Sales
Raw materials 100 117.3288036 72.79297709 44.08634348 29.32429911
Direct Wages 100 101.9543822 121.3117333 92.40847272 56.75286092
Manufacturing expenses 100 97.01476053 109.3018053 134.4079005 54.33540044
Total of cost of sales (B) 100 113.3143095 82.00603589 60.0191132 35.08008014
Gross Profit
(A-B)= C 100 97.23076632 108.7654659 100.1845924 60.07609313
Less: Operating
expenses
Administrative expenses. 100 87.75331475 120.0048147 130.809116 140.8781751
expenses. 100 77.61926206 101.952963 109.5984568 112.5709138
Total of Operating
expenses
(D) 100 86.58891352 117.9306595 128.3720143 137.6256748
(C-D)=E 100 99.29307115 106.9893256 94.72209843 45.04761269
Add: Non -trading
Income
Interest received 100 113.8667678 61.50938811 38.04030534 27.33066061
Dividend received 100 100 100 100 75
Less: Non-trading
expenses
Interest paid 100 105.925357 99.06445481 87.51836127 64.79865886
Earnings before
tax (EBDIT) 100 98.40537293 87.9804074 67.36310588 1.147101759
Less: Depreciation 100 85.249479 72.95867215 53.60133342 160.7350734
& tax (EBIT) 100 442.0214999 480.3300659 426.8040515 -4167.09878
Less: Interest - - - - -
Earnings before tax
(EBT) 100 442.0214999 480.3300659 426.8040515 -4167.09878
Less: Tax 100 442.0214999 480.3300659 426.8040515 0
Earnings after tax
(EAT) 100 442.0214999 480.3300659 426.8040515 -5952.99826

Interpretation:-
From the above table it can be seen that the sales is increased in 2013-14 i.e.105.17
and then after in other years sales are decreased. The sale return is increased in 2013-
14 & 2015-16 i.e179.28 & 334.07 but there is some decline in 2014-15 & 2016-17
i.e165.52 & 115.91. The net sales is increased in 2013-14 i.e.104.08% and then after
there is continuous decreases in the net sales. The cost of sales is increased in the
2013-14 i.e.104.77% as compared to 2012-13 and then after there is continuous
decrease year by year in cost of sales. The operating expenses are decreased in the
year 2013-14 i.e.86.59% and then after increased year by year i.e.2014-15, 2015-16,
and 2016-17. In the net operating profit some fluctuation can be seen i.e. there is little
decreases in the 2013-14 i.e.99.29% and increases in 2014-15 i.e.106.99% and then
after it decline rapidly in 2015-16 & 2016-17 i.e.94.72% & 45.05. In the Earnings
before depreciation, interest & tax there is decrease year by year i.e.2013-14 , 2014-
15 & 2015-16 i.e.98.41%, 87.98% & 67.36% but it increased in 2016-17 i.e.
114.71%.The earnings after tax is increased year by year 2013-14, 2014-15, 2015-16
i.e.442.02%, 480.33%, 426.80% but it decreased in the year 2016-17 i.e. -1553.43%
respectively.
Table no: 17; Trend analysis of Balance Sheet for Year Ending 31st
March, 2012-2013, 2013-2014, 2014-2015, 2015-2016 and 2016-2017
(Amount in Rupees)
2012-13 2013-14 2014-15 2015-16 2016-17

Assets
Current Assets
(a)Inventories 12876462.94 4281357 8984335 8536388 19086715
(b)Cash & bank
balance 726231.67 295983.22 1506602.22 2279385 923928.75
(c)Trade Payables 34858525 47421747 39351618.58 29978620.83 23311363
(d)Short Term
loan & advance 1886139 168862 65951 55188 4839844.83
(e)Other Current
Assets 45049 45049 54592 45613 10959
Total of Current
Assets 50392407.61 52212998.22 49963098.8 40895194.83 48172810.58
Fixed Assets
(a)Building 1451515 1306363 1175727 1058154 1237200
(b)Furniture 41497 37347 33612 30251 27226
(c)Machinery 27429030 23219901 19736915 17219419 48045970.87
(d)Investment 2461883 4197764 4078976 2048692 2582458
(e)Other Fixed 357875 336822 413592 349782 295967

Assets
Total of Fixed
Assets 31741800 29098197 25438822 20706298 52188821.87
Total of Assets 82134207.61 81311195.22 75401920.8 61601492.83 100361632.5
Liabilities
Current
Liabilities
(a)Short term
liabilities 6747932 7476707 7048201 3744055.54 6868480.54
(b)Trade Payable 29133000.99 33882727.99 36974132 22188387 24465933.67
(c)Short term
Provisions 225375 296436 215255 212126 127947
(d)Other Current
Liabilities 10727305 4743248 1065084.07 7632608.78
Total Current
Liabilities 36106307.99 52383175.99 48980836 27209652.61 39094969.99
Long term
liabilities
(a)Long term
borrowing 38261809.84 19952329.55 20914504.29 30556843.68 51156666.92
Capital Account 7766089.78 8975689.68 5506580.51 3834996.54 10109995.54
Total of liabilities 82134207.61 81311195.22 75401920.8 61601492.83 100361632.5
Table no: 18; Trend analysis of Balance Sheet for Year Ending 31 st
March, 2012-2013, 2013-2014, 2014-2015, 2015-2016 and 2016-2017
(Amount in Percentage)
2012- 2013-14 2014-15 2015-16 2016-17

Particulars 13(%) (%) (%) (%) (%)
Assets
Current Assets
(a)Inventories 100 33.24948023 69.77331463 66.29450991 148.2294873
(b)Cash & bank
balance 100 40.75603313 207.4547672 313.8647203 127.222316
(c)Trade Payables 100 136.0406013 112.8895115 86.00083001 66.87420939
advance 100 8.952786619 3.496613982 2.925977354 256.6006445
(e)Other Current
Assets 100 100 121.1836001 101.2519701 24.3268441
Total of Current
Assets 100 103.6128272 99.14806847 81.15348476 95.59537411

Fixed Assets
(a)Building 100 89.99996555 80.99998967 72.89997003 85.23508197
(b)Furniture 100 89.99927706 80.99862641 72.89924573 65.60956214
(c)Machinery 100 84.65447375 71.95629958 62.7780822 175.1646736
(d)Investment 100 170.5102964 165.6852092 83.2164648 104.8976739
(e)Other Fixed Assets 100 94.1172197 115.5688439 97.73859588 82.70122249
Total of Fixed Assets 100 91.67154037 80.14297236 65.23353433 164.4167056
Total of Assets 100 98.99796636 91.80330948 75.00101921 122.1922453
Liabilities
Current Liabilities
(a)Short term
liabilities 100 110.7999755 104.4497929 55.48448828 101.7864516
(b)Trade Payable 100 116.3035967 126.9149444 76.16238028 83.98013537
(c)Short term
Provisions 100 131.5301165 95.50970605 94.1213533 56.77071547
(d)Other Current
Liabilities - - - - -
Total Current
Liabilities 100 145.0803998 135.6572819 75.3598308 108.2773957
(a)Long term
borrowing 100 52.14685252 54.66156561 79.86251515 133.7016391
Capital Account 100 115.5754045 70.9054449 49.38130576 130.1812859
Total of liabilities 100 98.99796636 91.80330948 75.00101921 122.1922453
Interpretation:-
From the above table it can be seen that the total of current assets are increased in
2013-14 i.e.103.61 and then after there is rapidly decline in 2014-15, 2015-16 &
2016-17 i.e.99.15%, 81.15% & 95.60%. The fixed assets are decreased year by year
i.e. 2013-14, 2014-15 & 2015-16 i.e.91.67%, 80.14% & 65.23% and there is increase
in the 2016-17 i.e.164.42. The total asset is decreased in the year 2013-14, 2014-15 &
2015-16 i.e.99%, 91.80% & 75% and there is increased in the year 2016-17
i.e.122.19. The total current liabilities are increased in the year 2013-14, 2014-15 &
2016-17 i.e.145.08%, 135.66% & 108.28% and decreased in the 2015-16 i.e.75.36%.
The capital is increased in the year 2013-14 & 2016-17 i.e. 115.57 & 130.18 and
reduced in the year 2014-15 & 2015-16. The total liabilities are decreased in the year
2013-14, 2014-15 & 2015-16 i.e.99%, 91.80% & 75% and there is increase in the
year 2016-17 i.e. 122.19 respectively.

[C] Fund Flow Statement

The operation of a business concern involves the conversion of cash into non-cash
assets. These non-cash assets when used are recovered back in the cash form. These
funds used in this circuit flow can be raised through various means. But the soundness
of financial programme of a business concern depends on the selection of means to
raise funds along with its associated uses.
Hence, there is a need of preparing a statement which gives information about the
various sources of funds and their respective uses. Such a statement is known as
“Fund Flow Statement”.
Table no: 19; Fund Flow Statement of Sagar Texofab for the Year
2012-13 & 2013-14.
Increase Decreases
2012-13 2013-14
Particulars (Rs.) (Rs.) (Rs.) (Rs.)
[A] Current Assets
(a)Inventories 12876462.94 4281357 8595105.94
(b)Cash & bank balance 726231.67 295983.22 430248.45
(c)Trade Payables 34858525 47421747 12563222
(d)Short Term loan & advance 1886139 168862 1717277
(e)Other Current Assets 45049 45049 0 0
Total of Current Assets [A] 50392407.61 52212998.22
[B] Current Liabilities
(a)Short term liabilities 6747932 7476707 728775
(b)Trade Payable 29133000.99 33882727.99 4749727
(c)Short term Provisions 225375 296436 71061
(d)Other Current Liabilities - 10727305 10727305
Total Current Liabilities [B] 36106307.99 52383175.99
Working Capital [A]-[B] 14286099.62 -170177.77
Net Decreases in working
capital 14456277.39 14456277.39
Total 14286099.62 14286099.62 27019499.39 27019499.39
Interpretation:-
In the above table it can be seen that the current assets are increased in the 2013-14
i.e. 52212998.22 as compared to 2012-13 i.e. 50392407.61. The current liability is
increased in 2013-14 as compared to 2012-13. It can be seen that in year 2012-13 the
current asset is more as compared to current liabilities and in the 2013-14 the current
liability is more than the current asset that’s why it give negative result in working
capital in 2013-14 and need more working capital i.e.14456277.39 respectively.
2013-14 & 2014-15.
Increase Decreases
2013-14 2014-15
[A] Current Assets
(a)Inventories 4281357 8984335 4702978
(b)Cash & bank balance 295983.22 1506602.22 1210619
(c)Trade Payables 47421747 39351618.58 8070128.42
(e)Other Current Assets 45049 54592 9543
(a)Short term liabilities 7476707 7048201 428506
(b)Trade Payable 33882727.99 36974132 3091404.01
(d)Other Current Liabilities 10727305 4743248 5984057
Total Current Liabilities [B] 52383175.99 48980836
Working Capital [A]-[B] -170177.77 982262.8
Net Increases in working
capital 1152440.57 1152440.57
Total 982262.8 982262.8 12416884 12416884
Interpretation:-
In the above table it can be seen that the current assets are decreased in the 2014-15
i.e. 49963098.8 as compared to 2013-14 i.e.52212998.22. The current liability is
decreased in 2014-15 as compared to 2013-14. It can be seen that in year 2014-15 the
current asset is more as compared to current liabilities and in the 2013-14 the current
liability is more than the current asset that’s why it give negative result in working
capital in 2013-14 and need more working capital i.e.1152440.57 respectively.

2014-15 & 2015-16.
Increase Decreases
2014-15 2015-16
[A] Current Assets
(a)Inventories 8984335 8536388 447947
(b)Cash & bank balance 1506602.22 2279385 772782.78
(c)Trade Payables 39351618.58 29978620.83 9372997.75
(a)Short term liabilities 7048201 3744055.54 3304145.46
(b)Trade Payable 36974132 22188387 14785745
(d)Other Current Liabilities 4743248 1065084.07 3678163.93
Total Current Liabilities [B] 48980836 27209652.61
Working Capital [A]-[B] 982262.8 13685542.22
Net Increases in working
capital 12703279.42 12703279.42
Total 13685542.22 13685542.22 22543966.17 22543966.17
Interpretation:-
In the above table it can be seen that the current assets are decreases in the 2015-16
i.e. 40895194.83 as compared to 2014-15 i.e.49963098.8. The current liability is more
in 2014-15 as compared to 2015-16. It can be seen that in both the year the current
asset is more than current liabilities but in 2015-16 the working capital is more than in
2014-15 so in year 2014-15 it needs more capital i.e. 12703279.42 respectively.

2015-16 & 2016-17.
2015-16 2016-17 Increase Decreases

[A] Current Assets
(a)Inventories 8536388 19086715 10550327
(b)Cash & bank balance 2279385 923928.75 1355456.25
(c)Trade Payables 29978620.83 23311363 6667257.83
(d)Short Term loan & advance 55188 4839844.83 4784656.83
(a)Short term liabilities 3744055.54 6868480.54 3124425
(b)Trade Payable 22188387 24465933.67 2277546.67
(d)Other Current Liabilities 1065084.07 7632608.78 6567524.71
Total Current Liabilities [B] 27209652.61 39094969.99
Working Capital [A]-[B] 13685542.22 9077840.59
Net Decreases in working
capital 4607701.63 4607701.63
Total 13685542.22 13685542.22 20026864.46 20026864.46
Interpretation:-
In the above table it can be seen that the current assets are increased in the year 2016-
17 i.e. 48172810.58 as compared to 2015-16 i.e. 40895194.83. The current liability is
more in 2016-17 as compared to 2015-16. It can be seen that in both the year the
current asset is more than current liabilities but in 2015-16 the working capital is more
than in 2016-17 so in year 2016-17 it needs more capital i.e. 4607701.63 respectively.
(D) Ratio Analysis:

Ratio analysis is the most popular technique of financial analysis. It is “the technique
of analyzing and interpreting financial statement with the help of accounting ratios.”
A ratio is a mathematical relationship between two items expressed in quantitative
forms. It may be defined as the indicated quotient of two mathematical expressions.
But a financial ratio is the relationship between two accounting figures expressed
mathematically. The researcher has calculated the following Ratio:

A. Current Ratio:-
Formula: - Current Ratio = Current Assets
Current Liabilities
Table no: 23; Current Ratio

Year Current Asset {A} Current Liabilities {B} Current Ratio
2013 50392407.61 36106307.99 1.395667694
2014 52212998.22 52383175.99 0.99675129
2015 49963098.8 48980836 1.020054023
2016 40895194.83 27209652.61 1.502966444
2017 48172810.58 39094969.99 1.232199707
Graph no: 1; Current Ratio
Current Ratio
1.6
1.4
1.2
1
Ratio
0.8
0.6 Current Ratio
0.4
0.2
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the current ratio of the company is
continuously fluctuating every year. In a sound business a current ratio is 2:1 is
considered an ideal one. The current ratio is highest in the year 2016 i.e. 1.50 as
compared to remaining year and lowest in the year 2014 i.e. 0.996. In 2013 the ratio
was 1.40 and it decline in 2014 at 0.996 then it start increasing from in 2015 i.e. 1.02
& 2016 i.e.1.50 and then it decline in 2017 i.e. 1.23 respectively.

B. Quick Ratio:-
Formula: - Quick Ratio = Liquid Assets
Liquid liabilities
Table no: 24; Quick Ratio

Years Liquid Assets [A] Liquid Liabilities[B] Quick Ratio
2013 37515944.67 36106307.99 1.039041286
2014 47931641.22 52383175.99 0.915019762
2015 40978763.8 48980836 0.836628509
2016 32358806.83 27209652.61 1.189239984
2017 29086095.58 39094969.99 0.743985622
Graph no: 2; Quick Ratio
Quick Ratio
1.4
1.2
1
Ratio
0.8
0.6
Quick Ratio
0.4
0.2
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the quick ratio of the company is
continuously fluctuating every year. In a business if more than 1:1 indicates sound
financial position & if less than 1:1 then it indicates financial difficult. The quick ratio
is highest in the year 2016 i.e. 1.19 as compared to remaining year and lowest in the
year 2017 i.e. 0.74. In 2013 the ratio was 1.04 and it decline in 2014 at 0.91 and in
2015 i.e. 0.84 & in 2016 it increases i.e.1.19 and then it decline in 2017 i.e. 0.74
respectively.

C. Net Profit Ratio:

Formula: - Net Profit Ratio = (Net profit / Net sales) x 100
Table no: 25; Net Profit Ratio

Year Net Profit after Tax[EAT]{A} Net Sales {B} Net Profit Ratio
2013 135661.771 118704544 0.114285238
2014 599654.195 132570242 0.452329411
2015 651624.274 100570942 0.647924998
2016 579009.935 76087666 0.76097739
2017 -8075942.87 44655107 -18.08514952
Graph no: 3; Net Profit Ratio
Net Profit Ratio

5
0
1 2 3 4 5
-5
Ratio
-10 Net Profit Ratio
-15
-20
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the Net profit ratio of the company
is continuously fluctuating every year. The Net profit ratio is highest in the year 2016
i.e. 0.761% as compared to remaining year and lowest in the year 2017 i.e. -18.08%.
In 2013 the ratio was 0.114% and then after it increases in 2014 i.e.0.4523%, 2015 i.e.
0.648% & 2016 i.e.0.761% and then it decline in 2017 i.e.-18.081% respectively.

D. Fixed Assets Turnover Ratio

Formula: -
Fixed Assets Turnover Ratio = Cost of Good Sales
Fixed Assets
Table no: 26; Fixed Assets Turnover Ratio
Year Cost of Good Sales Fixed Assets Fixed Assets Turnover Ratio
2013 106648790 31741800 3.359884758
2014 120848340 29098197 4.15312124
2015 87458445 25438822 3.437991154
2016 64009658 20706298 3.091313474
2017 37412481 52188821.87 0.716867706
Graph no: 4; Fixed Assets Turnover Ratio
Fixed Assets Turnover Ratio

5
3
Ratio
2
Fixed Assets Turnover Ratio
1
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the fixed assets turnover ratio of
the company is continuously fluctuating every year. The fixed assets ratio is highest in
the year 2014 i.e. 4.15 as compared to remaining year and lowest in the year 2017
i.e.0.72. In 2013 the ratio is 3.36 and then after it increased in 2014 at 4.15 and in
2015 i.e. 3.44. Then it decline in 2016 i.e.3.09 and 2017 i.e.0.72 respectively.

E. Current Assets Turnover Ratio

Formula: - Current Assets Turnover Ratio
= Cost of Good Sales
Current Assets
Table no: 27; Current Assets Turnover Ratio
Year Cost of Good Sales Current Assets Current Assets Turnover Ratio
2013 106648790 50392407.61 2.116366236
2014 120848340 52212998.22 2.314525963
2015 87458445 49963098.8 1.750460782
2016 64009658 40895194.83 1.565212203
2017 37412481 48172810.58 0.776630646
Graph no: 5; Current Assets Turnover Ratio
Current Assets Turnover Ratio

2.5
1.5
Ratio
1 Current Assets Turnover

Ratio
0.5
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the current assets turnover ratio of
the company is continuously fluctuating every year. The current assets ratio is highest
in the year 2014 i.e.2.31 as compared to remaining year and lowest in the year 2017
i.e.0.78. In 2013 the ratio is 2.12 and then after it increased in 2014 at 2.31. It decline
year by year in 2015 i.e. 1.75, in 2016 i.e.1.56 and 2017 i.e.0.78 respectively.

F. Total Assets Turnover Ratio

Formula: -
Total Assets Turnover Ratio
Total Assets
Table no: 28; Total Assets Turnover Ratio
Year Cost of Good Sales Total Assets Total Assets Turnover Ratio
2013 106648790 82134207.61 1.298469823
2014 120848340 81311195.22 1.486244787
2015 87458445 75401920.8 1.159896778
2016 64009658 61601492.83 1.039092643
2017 37412481 100361632.5 0.372776728
Graph no: 6; Total Assets Turnover Ratio
Total Assets Turnover Ratio

1.6
1.4
1.2
1
Ratio
0.8
0.6 Total Assets Turnover Ratio
0.4
0.2
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the Total assets turnover ratio of
the company is continuously fluctuating every year. The current assets ratio is highest
i.e.0.37. In 2013 the ratio is 1.30 and then after it increased in 2014 at 1.49. It decline
year by year in 2015 i.e. 1.16, in 2016 i.e.1.04 and 2017 i.e.0.37 respectively.

G. Working Capital Turnover Ratio

Formula: -
Working Capital Turnover Ratio
Working Capital
Working Capital = Current Assets – Current Liabilities
Table no: 29; Working Capital Turnover Ratio

Year Cost of Good Sales Working Capital Working Capital Turnover Ratio
2013 106648790 14286099.62 7.465213938
2014 120848340 -170177.77 -710.1300011
2015 87458445 982262.8 89.03772493
2016 64009658 13685542.22 4.67717369
2017 37412481 9077840.59 4.12129742
Graph no: 7; Working Capital Turnover Ratio
Working Capital Turnover Ratio

200
100
0
-100 1 2 3 4 5
-200
Ratio
-300
-400 Working Capital Turnover
Ratio
-500
-600
-700
-800 2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the working capital turnover ratio
of the company is continuously fluctuating every year. The working capital turnover
ratio is highest in the year 2015 i.e.89.04 as compared to remaining year and lowest in
the year 2014 i.e.-710.13. In 2013 the ratio is 7.47 and then after it decreased in 2014
at -710.13. It increased in 2015 i.e. 89.04, in 2016 i.e.4.68 and 2017 i.e.4.12
respectively.

H. Debtors Turnover Ratio

Formula: - Debtor Turnover Ratio
= Net sales / Debtors + Bills Receivable
Table no: 30; Debtors Turnover Ratio
Year Net Sales Debtors Debtors Turnover Ratio

2013 118704544 34858525 3.405323203
2014 132570242 47421747 2.795557954
2015 100570942 39351618.58 2.555700264
2016 76087666 29978620.83 2.538064257
2017 44655107 23311363 1.915593996
Graph no: 8; Debtors Turnover Ratio
Debtors Turnover Ratio

4
3.5
3
2.5
Ratio
2
1.5
Debtors Turnover Ratio
1
0.5
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the debtor’s turnover ratio of the
company is continuously fluctuating every year. The debtor’s turnover ratio is highest
i.e.1.92. In 2013 the ratio is 3.41 and then after it decreased in year by year i.e.2014 at
2.80, in 2015 i.e. 2.55, in 2016 i.e.2.53 and 2017 i.e.1.91 respectively.

I. Inventory Turnover Ratio

Formula: -
Inventory Turnover Ratio = Net Sales / Inventories
Table no: 31; Inventory Turnover Ratio
Year Net Sales Inventories Inventory Turnover Ratio

2013 118704544 12876462.94 9.218722917
2014 132570242 4281357 30.96453811
2015 100570942 8984335 11.19403295
2016 76087666 8536388 8.913332665
2017 44655107 19086715 2.339591019
Graph no: 9; Inventory Turnover Ratio
Inventory Turnover Ratio

35
30
25
Ratio
20
15
Inventory Turnover Ratio
10
5
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the inventory turnover ratio of the
company is continuously fluctuating every year. The inventory turnover ratio is
highest in the year 2014 i.e.30.96 as compared to remaining year and lowest in the
year 2017 i.e.2.34. In 2013 the ratio is 9.22 and then after it increased in 2014 at
30.96. It decreased in 2015 i.e. 11.19, in 2016 i.e.8.91 and 2017 i.e.2.34 respectively.

J. Operating Ratio
Formula: -
Operating Ratio = (Operating cost / Net Sales) *100
Operating Cost = Cost of Good Sales + Operating Expenses
Table no: 32; Operating Ratio
Year Operating cost Net Sales Operating Ratio

2013 10098706.52 118704544 8.507430448
2014 10027315.85 132570242 7.563775776
2015 10804538 100570942 10.74320056
2016 9565706.73 76087666 12.57195447
2017 4549226.2 44655107 10.18747128
Graph no: 10; Operating Ratio
Operating Ratio
14
12
10
Ratio
8
6
Operating Ratio
4
2
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the operating ratio of the company
is continuously fluctuating every year. The operating ratio is highest in the year 2016
i.e.12.57% as compared to remaining year and lowest in the year 2014 i.e.7.56%. In
2013 the ratio was 8.51% and then after it decreased in 2014 at 7.56%. It increased in
2015 i.e. 10.74%, in 2016 i.e.12.57% and 2017 i.e.10.18% respectively.

K. Gross Profit Ratio

Formula: -
Gross profit ratio = (Gross profit / Net sales) x 100
Gross Profit = Net Sales – Cost of Good Sales
Table no: 33; Gross Profit Ratio
Year Gross Profit Net Sales Gross Profit Ratio

2013 12055754 118704544 10.15610152
2014 11721902 132570242 8.84203108
2015 13112497 100570942 13.03805726
2016 12078008 76087666 15.87380535
2017 7242626 44655107 16.21903179
Graph no: 11; Gross Profit Ratio
Gross Profit Ratio

20
15
Ratio
10
Gross Profit Ratio

5
0
2013 2014 2015 2016 2017
YEAR
Interpretation:-
From the above table and graph it can be seen that the gross profit ratio of the
company is continuously fluctuating every year. The gross profit ratio is highest in the
year 2017 i.e.16.2% as compared to remaining year and lowest in the year 2014
i.e.8.8%. In 2013 the ratio was 10.2% and then after it decreased in 2014 at 8.8%. It
increased in 2015 i.e. 13.04%, in 2016 i.e.15.9% and 2017 i.e.16.2% respectively.

[E] Comparative Common sized Profit and loss account

Financial statements when read with absolute figures are not easily understandable.
They are ever misleading. Each item of assets is converted into percentage to Total
Assets and each item of capital and liabilities is expressed to total liabilities and
capital fund. Thus the whole balance sheet is converted into percentage form. Such
converted Balance sheet is known as common sized balance sheet. When balance
sheets of the same concern for several years or when balance sheet of two or more
than two concerns for the same year are converted into percentage form and presented
as such, they are known as comparative common sized balance sheet.
Table no: 34; Comparative Common sized Profit & Loss Statement
of Sagar Texofab for the Year 2012-13 & 2013-14
2012-13 Changes in 2013-14 Changes in

Particulars (Rs.) (%) (Rs.) (%)
Sales 120654128 101.642384 136065364 102.6364303
Less: Sales returns 1949584 1.64238363 3495122 2.636430278
Net Sales (A) 118704544 100 132570242 100
Less: Cost of Sales
Raw materials 83091899 69.9989202 97490731 73.53892512
Direct Wages 10202150 8.5945741 10401539 7.846058695
Manufacturing expenses 13354741 11.2504042 12956070 9.772985102
Total of cost of sales (B) 106648790 89.8438985 120848340 91.15796892
Gross Profit (A-B)= C 12055754 10.1561015 11721902 8.84203108
Administrative expenses 1732183 1.459239 1520048 1.146598194
expenses 224864.48 0.18943207 174538.15 0.13165711
Total of Operating expenses
(D) 1957047.48 1.64867107 1694586.15 1.278255304
(C-D)=E 10098706.52 8.50743045 10027315.85 7.563775776
Interest received 3689973.01 3.1085356 4201653 3.169378691
Dividend received 312015 0.26285009 312015 0.235358249
Less: Non-trading expenses
Interest paid 8845003 7.45127583 9369101 7.067273061
Earnings before
depreciation, interest & tax
(EBDIT) 5255691.53 4.42754031 5171882.85 3.901239654
Less: Depreciation 5061889 4.26427568 4315234 3.255054781

tax (EBIT) 193802.53 0.16326463 856648.85 0.646184873
Less: Tax 58140.759 0.04897939 256994.655 0.193855462
Interpretation:-
From the above table it can be seen that the net sales as a base 100%. Sales increased
in year 2013-14 i.e. 102.64% as compared to 2012-13 i.e. 101.64% and the sales
return is increased in the year 2013-14 i.e.3495122 as compared to 2012-13 i.e.
1949584. The cost of sales is increased in year 2013-14 i.e.91.16% as compared to
2012-13 i.e.89.84%.The gross profit is more in the year 2012-13 i.e.12055754 as
compared to 2013-14 i.e.11721902. The operating expenses are reduced at
1694586.15 as compared to 2012-13 i.e.1957047.48. The net operating profit is more
in year 2012-13 i.e.10098706.52 as compared to 2013-14 i.e.10027315.85. The
earnings after tax is increased in year 2013-14 i.e.599654.195 as compared to 2012-13
i.e. 135661.771 respectively.
Table no: 35; Comparative Common sized Balance Sheets of Sagar

Assets
Current Assets
(a)Inventories 12876462.94 15.6773448 4281357 5.265396712
(b)Cash & bank balance 726231.67 0.88420123 295983.22 0.364012876
(c)Trade Payables 34858525 42.4409342 47421747 58.32130111
advance 1886139 2.29641103 168862 0.20767374
(e)Other Current Assets 45049 0.05484804 45049 0.055403195
Fixed Assets
(a)Building 1451515 1.76724783 1306363 1.606621323
(b)Furniture 41497 0.05052341 37347 0.045930945
(c)Machinery 27429030 33.3953791 23219901 28.55683149
(d)Investment 2461883 2.99739058 4197764 5.162590451
(e)Other Fixed Assets 357875 0.43571979 336822 0.414238161

Total of Fixed Assets 31741800 38.6462607 29098197 35.78621237
Total of Assets 82134207.61 100 81311195.22 100
Liabilities
Current Liabilities
(a)Short term liabilities 6747932 8.21573885 7476707 9.195175375
(b)Trade Payable 29133000.99 35.469997 33882727.99 41.67043406
(c)Short term Provisions 225375 0.27439846 296436 0.364569724
(d)Other Current Liabilities 0 0 10727305 13.1929004
Total Current Liabilities 36106307.99 43.9601343 52383175.99 64.42307956
Capital Account 7766089.78 9.4553658 8975689.68 11.03868865
Total of liabilities 82134207.61 100 81311195.22 100
Interpretation:-
From the above table it can be seen that the total assets and total liabilities are taken
as a base year 100%. The inventory is more in the year 2012-13 i.e.15.68% as
compared to 2013-14 i.e.5.26%. The cash and bank balance is more in the year 2012-
13 i.e. 726231.67 as compared to 2013-14 i.e.295983.22. The total current assets are
more in the year 2013-14 i.e. 64.21% as compared to 2012-13 i.e. 61.35%. The total
fixed assets are reduced in the year 2013-14 i.e.29098197 as compared to 2012-13 i.e.
31741800. The total assets of 2013-14 i.e. 81311195.22 are less than 2012-13
i.e.82134207.61. The current liabilities are increased in 2013-14 as 64.42% as
compared to 2012-13 43.96%. The long term liabilities are reduced in the year 2013-
14 i.e. 24.54% and in 2012-13 i.e.46.58%. The total liabilities are more in the year
2012-13 i.e.82134207.61 as compare to 2013-14 i.e.81311195.22 respectively.

Sales 136065364 102.63643 103797957 103.2086952
Net Sales (A) 132570242 100 100570942 100
Less: Cost of Sales
Raw materials 97490731 73.5389251 60485067 60.14169282
Direct Wages 10401539 7.8460587 12376405 12.30614406

Gross Profit (A-B)= C 11721902 8.84203108 13112497 13.03805726
Administrative expenses 1520048 1.14659819 2078703 2.066902187
expenses 174538.15 0.13165711 229256 0.227954512
(D) 1694586.15 1.2782553 2307959 2.294856699
(C-D)=E 10027315.85 7.56377578 10804538 10.74320056
Interest received 4201653 3.16937869 2269679.82 2.25679483
Interest paid 9369101 7.06727306 8762254 8.712510618
Earnings before
(EBDIT) 5171882.85 3.90123965 4623978.82 4.597728457
tax (EBIT) 856648.85 0.64618487 930891.82 0.92560714
Less: Tax 256994.655 0.19385546 279267.546 0.277682142
Interpretation:-
From the above table it can be seen that the net sales as a base 100%. Sales decreased
in year 2014-15 i.e. 103797957 as compared to 2013-14 i.e. 136065364 and the sales
return is decreased in the year 2014-15 i.e.3227015 as compared to 2013-14
i.e.3495122. The cost of sales is also increased in year 2013-14 i.e.91.16% as
compared to 2014-15 i.e.86.96%.The gross profit is more in the year 2014-15
i.e.13112497 as compared to 2013-14 i.e.11721902. The operating expenses are
reduced at 1694586.15 as compared to 2014-15 i.e.2307959. The net operating profit
is more in year 2014-15 i.e.10804538 as compared to 2013-14 i.e.10027315.85. The
earnings after tax is increased in year 2014-15 i.e.651624.274 as compared to 2013-14
i.e.599654.195 respectively.



Assets
Current Assets
(a)Inventories 4281357 5.26539671 8984335 11.91526012
(b)Cash & bank balance 295983.22 0.36401288 1506602.22 1.998095279
(c)Trade Payables 47421747 58.3213011 39351618.58 52.18914606
advance 168862 0.20767374 65951 0.087465942
Total of Current
Assets 52212998.22 64.2137876 49963098.8 66.26236874
Fixed Assets
(a)Building 1306363 1.60662132 1175727 1.559279906
(b)Furniture 37347 0.04593094 33612 0.044577114
(c)Machinery 23219901 28.5568315 19736915 26.17561302
(d)Investment 4197764 5.16259045 4078976 5.409644684
Total of Assets 81311195.22 100 75401920.8 100
Liabilities
Current Liabilities
(a)Short term liabilities 7476707 9.19517538 7048201 9.347508558
(b)Trade Payable 33882727.99 41.6704341 36974132 49.03606116
(c)Short term
Provisions 296436 0.36456972 215255 0.285476812
(d)Other Current
Liabilities 10727305 13.1929004 4743248 6.290619589
Total Current
Liabilities 52383175.99 64.4230796 48980836 64.95966612
Capital Account 8975689.68 11.0386887 5506580.51 7.302971133

Interpretation:-
as a base year 100%. The inventory is more in the year 2014-15 i.e.11.91% as
compared to 2013-14 i.e.5.26%. The cash and bank balance is more in the year 2014-
15 i.e. 1506602.22 as compared to 2013-14 i.e.295983.22. The total current assets are
less in the year 2013-14 i.e. 64.21% as compared to 2014-15 i.e. 66.26%. The total
fixed assets are increased in the year 2013-14 i.e.29098197 as compared to 2014-15
i.e. 25438822. The total assets of 2013-14 i.e. 81311195.22 are more than 2014-15
i.e.75401920.8. The current liabilities are increased in 2013-14 i.e.52383175.99 as
compared to 2014-15 i.e.48980836. The long term liabilities are reduced in the year
2013-14 i.e. 24.54% and in 2014-15 i.e.27.74%. The total liabilities are less in the
year 2014-15 i.e.75401920.8 as compared to 2013-14 i.e.81311195.22 respectively.
Particulars 2014-15 Changes in 2015-16 Changes in

(Rs.) (%) (Rs.) (%)
Sales 103797957 103.208695 82600731 108.5599485
Net Sales (A) 100570942 100 76087666 100
Less: Cost of Sales
Raw materials 60485067 60.1416928 36632180 48.14470193
Direct Wages 12376405 12.3061441 9427651 12.39051149
Gross Profit (A-B)= C 13112497 13.0380573 12078008 15.87380535
Administrative expenses. 2078703 2.06690219 2265853.27 2.977950815
expenses. 229256 0.22795451 246448 0.323900065
(D) 2307959 2.2948567 2512301.27 3.301850881
(C-D)=E 10804538 10.7432006 9565706.73 12.57195447
Interest received 2269679.82 2.25679483 1403677 1.844815426

Interest paid 8762254 8.71251062 7741001.68 10.17379306
Earnings before
(EBDIT) 4623978.82 4.59772846 3540397.05 4.653049878
tax (EBIT) 930891.82 0.92560714 827157.05 1.087110557
Less: Tax 279267.546 0.27768214 248147.115 0.326133167
Interpretation:-
From the above table it can be seen that the net sales as a base 100%. Sales increased
i.e.6513065. The cost of sales are decreased in year 2015-16 i.e.64009658 as
compared to 2014-15 i.e.87458445.The gross profit is more in the year 2014-15
i.e.13112497 as compared to 2015-16 i.e.12078008. The operating expenses are
reduced at 2307959 as compared to 2015-16 i.e.2512301.27. The net operating profit
is more in year 2014-15 i.e.10804538 as compared to 2015-16 i.e.9565706.73. The
earnings after tax are less in year 2014-15 i.e.651624.274 as compared to 2015-16

Particulars 2014-15 Changes in 2015-16 Changes in

(Rs.) (%) (Rs.) (%)
Assets
Current Assets
(a)Inventories 8984335 11.9152601 8536388 13.8574369
(b)Cash & bank balance 1506602.22 1.99809528 2279385 3.700210653
(c)Trade Payables 39351618.58 52.1891461 29978620.83 48.66541289
advance 65951 0.08746594 55188 0.089588738

Fixed Assets
(a)Building 1175727 1.55927991 1058154 1.717740839
(b)Furniture 33612 0.04457711 30251 0.049107576
(c)Machinery 19736915 26.175613 17219419 27.95292485
(d)Investment 4078976 5.40964468 2048692 3.325718105
Total of Assets 75401920.8 100 61601492.83 100
Liabilities
Current Liabilities
(a)Short term liabilities 7048201 9.34750856 3744055.54 6.077864948
(b)Trade Payable 36974132 49.0360612 22188387 36.01923587
(d)Other Current Liabilities 4743248 6.29061959 1065084.07 1.72899068
Total Current Liabilities 48980836 64.9596661 27209652.61 44.17044354
Capital Account 5506580.51 7.30297113 3834996.54 6.225492864
Interpretation:-
From the above table it can be see that the total assets and total liabilities are taken as
a base year 100%. The inventory is more in the year 2014-15 i.e.8984335 as
compared to 2015-16 i.e.8536388. The cash and bank balance is more in the year
2015-16 i.e.2279385 as compared to 2014-15 i.e. 1506602.22. The total current assets
are more in the year 2015-16 i.e. 66.38% as compared to 2014-15 i.e. 66.26%. The
total fixed assets are decreased in the year 2015-16 i.e.20706298 as compared to
2014-15 i.e. 25438822. The total assets of 2015-16 i.e. 61601492.83 are less than
2014-15 i.e.75401920.8. The current liabilities are decreased in 2015-16
i.e.27209652.61 as compared to 2014-15 i.e.48980836. The long term liabilities are
increased in the year 2015-16 i.e. 49.60% as compared to 2014-15 i.e.27.74%. The
total liabilities are more in the year 2014-15 i.e.75401920.8 as compared to 2015-16

of Sagar Texofab for the Year 2015-16 & 2016-17.

Sales 82600731 108.559948 46914850 105.0604358
Net Sales (A) 76087666 100 44655107 100
Less: Cost of Sales
Raw materials 36632180 48.1447019 24366117 54.56512958
Direct Wages 9427651 12.3905115 5790012 12.96606903
Gross Profit (A-B)= C 12078008 15.8738054 7242626 16.21903179
Administrative expenses. 2265853.27 2.97795082 2440267.8 5.464700376
expenses. 246448 0.32390007 253132 0.566860135
(D) 2512301.27 3.30185088 2693399.8 6.031560511
(C-D)=E 9565706.73 12.5719545 4549226.2 10.18747128
Interest received 1403677 1.84481543 1008494 2.25840686
Dividend received 312015 0.41007303 234011.25 0.524041405
Interest paid 7741001.68 10.1737931 5731443.32 12.83491118
Earnings before
(EBDIT) 3540397.05 4.65304988 60288.13 0.135008365
tax (EBIT) 827157.05 1.08711056 -8075942.87 -18.08514952
Earnings before tax (EBT) 827157.05 1.08711056 -8075942.87 -18.08514952
Less: Tax 248147.115 0.32613317
Earnings after tax (EAT) 579009.935 0.76097739 -8075942.87 -18.08514952

Interpretation:-
From the above table it can be seen that the net sales as a base 100%. Sales decreased
i.e.6513065. The cost of sales is also more in year 2015-16 i.e.64009658 as compared
to 2016-17 i.e.37412481.The gross profit is less in the year 2016-17 i.e.7242626 as
compared to 2015-16 i.e.12078008. In the year 2016-17 the operating expenses are
also increased at 2693399.8 as compared to 2015-16 i.e.2512301.27. The net
operating profit is less in year 2016-17 i.e.4549226.2 as compared to 2015-16
i.e.9565706.73. The earnings after tax are less in year 2016-17 i.e.-8075942.87 as
compared to 2015-16 i.e.579009.935 respectively.

Assets
Current Assets
(a)Inventories 8536388 13.8574369 19086715 19.01793996
(b)Cash & bank balance 2279385 3.70021065 923928.75 0.920599563
(c)Trade Payables 29978620.83 48.6654129 23311363 23.22736531
advance 55188 0.08958874 4839844.83 4.822405447
Fixed Assets
(a)Building 1058154 1.71774084 1237200 1.232742005
(b)Furniture 30251 0.04910758 27226 0.027127897
(c)Machinery 17219419 27.9529249 48045970.87 47.87284712
(d)Investment 2048692 3.32571811 2582458 2.573152645
Total of Fixed Assets 20706298 33.6133055 52188821.87 52.00077021
Total of Assets 61601492.83 100 100361632.5 100
Liabilities
Current Liabilities
(a)Short term liabilities 3744055.54 6.07786495 6868480.54 6.843731387
(b)Trade Payable 22188387 36.0192359 24465933.67 24.37777572

(d)Other Current Liabilities 1065084.07 1.72899068 7632608.78 7.605106248
Total Current Liabilities 27209652.61 44.1704435 39094969.99 38.95409933
Capital Account 3834996.54 6.22549286 10109995.54 10.07356626
Interpretation:-
as a base year 100%. The inventory is more in the year 2016-17 i.e.19086715 as
compared to 2015-16 i.e.8536388. The cash and bank balance is more in the year
2015-16 i.e.2279385 as compared to 2016-17 i.e. 923928.75. The total current assets
are more in the year 2016-17 i.e. 48172810.58 as compared to 2015-16 i.e.
40895194.83. The total fixed assets are decreased in the year 2015-16 i.e.20706298 as
compared to 2016-17 i.e. 52188821.87. The total assets of 2015-16 i.e. 61601492.83
are less than 2016-17 i.e.100361632.5. The current liabilities are decreased in 2015-
16 i.e.27209652.61 as compared to 2016-17 i.e.39094969.99. The long term liabilities
are decreased in the year 2015-16 i.e. 27209652.61 as compared to 2016-17
i.e.39094969.99. The total liabilities are more in the year 2016-17 i.e.100361632.5 as
compared to 2015-16 i.e.61601492.83 respectively.

5. MAJOR FINDINGS, CONCLUSION, SUGGESTION &

SWOT ANALYSIS
5.1 MAJOR FINDINGS
5.2 CONCLUSION
5.3 SUGGESTION & RECOMMENDATION
5.4 SWOT ANALYSIS

5.1 MAJOR FINDINGS

[A] Comparative Financial Statements Analysis
 In the table no.11 it can be say that the sales are decreased by 20.42% as
compared to 2014-15. The negative thing is that the Gross profit is decreased
by 7.89% as compared to 2014-15. The earnings after tax are decreased by
11.14% as compared to 2014-15 respectively.
 In the table no.12 it can be say that the inventory are decreased by 4.98% as
compared to 2014-15. The Short term loan & advance, other current asset &
total current assets are also reduced. The total assets are reduced by 18.30% as
compare to 2014-15. The total liabilities are reduced by 18.30% respectively.
 In the table no.13 it can be say that the sales are decreased by 43.02% as
compare to 2015-16. The Gross profits are decreased by 40.03%. The earnings
after tax are decreased by 1494.78% as compare to 2015-16 respectively.
 In the table no.14 it can be say that the inventory are increased by 123.59%.
The Short term loan & advance & total current assets are increased. The total
assets are increased by 62.92% as compared to 2015-16. The total liabilities
are increased by 62.92% respectively.
[B] Trend Analysis

 In the table no.16 it can be say that the sales are increased in 2013-14
i.e.105.17% and then after in other years sales are decreased. The operating
expenses are decreased in the year 2013-14 i.e.86.59% and then after
increased year by year i.e.2014-15, 2015-16 and 2016-17. The earnings after
tax are increased year by year 2013-14, 2014-15 and 2015-16 i.e.442.02%,
480.33% and 426.80% but it decreased in the year 2016-17 i.e. -1553.43%
respectively.
 In the table no.18 it can be say that the total of current assets are increased in
2013-14 i.e.103.61% and then after there is rapidly decline in 2014-15, 2015-
16 and 2016-17. The total asset is decreased in the year 2013-14, 2014-15 and
2015-16 and there is increased in the year 2016-17 i.e.122.19%. The total
liabilities are decreased in the year 2013-14, 2014-15 and 2015-16 and there
are increased in the year 2016-17 i.e. 122.19% respectively.
[C] Fund Flow Statement Analysis

 In the table no.21 it can be say that the current assets are more than current
liabilities but in 2015-16 the working capital are more than in 2014-15 so in
year 2014-15 it needs more capital i.e. 12703279.42 respectively.
 In the table no.22 it can be say that the current assets are more than current
liabilities but in 2015-16 the working capital are more than in 2016-17 so in
year 2016-17 it needs more capital i.e. 4607701.63 respectively.

[D] Ratio Analysis

 The current ratio (table no.23) are highest in the year 2016 i.e. 1.50 as
compared to remaining year and lowest in the year 2014 i.e. 0.996. In 2013 the
ratio was 1.40 and it decline in 2014 at 0.996 then it start increasing in 2015,
2016 & 2017 respectively it shows good financial health.
 The quick ratio (table no.24) are highest in the year 2016 i.e. 1.19 as
compared to remaining year and lowest in the year 2017 i.e. 0.74. In 2013 the
ratio was 1.04 and it decline in 2014 at 0.91 and in 2015 i.e. 0.84 & in 2016 it
increases i.e.1.19 and then it decline in 2017 i.e. 0.74 respectively.
 The net profit ratio (table no.25) are highest in the year 2016 i.e. 0.761% as
compared to remaining year and lowest in the year 2017 i.e. -18.08%. In 2013
the ratio was 0.114% and then after it increases in 2014, 2015 & 2016. Then it
decline in 2017 i.e.-18.081% respectively.
 The fixed assets turnover ratio (table no.26) are highest in the year 2014 i.e.
4.15 as compared to remaining year and lowest in the year 2017 i.e.0.72. In
2013 the ratio is 3.36 and then after it increased in 2014, 2015. Then it decline
in 2016 i.e.3.09 and 2017 i.e.0.72 respectively.
 The current assets turnover ratios (table no.27) are highest in the year 2014
i.e.2.31 as compared to remaining year and lowest in the year 2017 i.e.0.78. In
2013 the ratio is 2.12 and then after it increased in 2014 at 2.31. It decline year
by year in 2015, 2016 and 2017 respectively.
 The total assets turnover ratio (table no 28) are highest in the year 2014
i.e.1.49 as compared to remaining year and lowest in the year 2017 i.e.0.37. In
2013 the ratio is 1.30 and then after it increased in 2014 at 1.49. It decline year
by year in 2015, 2016, 2017 respectively.
 The working capital turnover ratio (table no 29) of the company are
continuously fluctuating every year. The working capital turnover ratios are
highest in the year 2015 i.e.89.04 as compared to remaining year and lowest in
the year 2014 i.e.-710.13. In 2013 the ratio is 7.47 and then after it decreased
in 2014 at -710.13. It increased in 2015, 2016, 2017 respectively.
 The debtor’s turnover ratios (table no.30) are highest in the year 2013 i.e.3.41
as compared to remaining year and lowest in the year 2017 i.e.1.92. In 2013
the ratio is 3.41 and then after it decreased in year by year i.e.2014, 2015,
2016 & 2017 respectively.
 The inventory turnover ratios (table no.31) are highest in the year 2014
i.e.30.96 as compared to remaining year and lowest in the year 2017 i.e.2.34.
In 2013 the ratio is 9.22 and then after it increased in 2014 at 30.96. It
decreased in 2015, 2016 & 2017 respectively.
 The operating ratios (table no.32) are highest in the year 2016 i.e.12.57% as
compared to remaining year and lowest in the year 2014 i.e.7.56%. In 2013
the ratio was 8.51% and then after it decreased in 2014 at 7.56%. It increased
in 2015, 2016 & 2017 respectively.

 The gross profit ratio (table no 33) is highest in the year 2017 i.e.16.2% as
compared to remaining year and lowest in the year 2014 i.e.8.8%. In 2013 the
ratio was 10.2% and then after it decreased in 2014 at 8.8%. It increased in
2015, 2016 & 2017 respectively.
[E] Common Size Statement Analysis

 In the table no. 34 it can be say that the net sales as a base 100%. The cost of
sales are increased in year 2013-14 i.e.91.16% as compared to 2012-13
i.e.89.84%.The gross profit is more in the year 2012-13 i.e.12055754 as
1694586.15 as compared to 2012-13 i.e.1957047.48 respectively.
 In the table no. 35 it can be say that the total assets and total liabilities are
taken as a base year 100%. The inventories are more in the year 2012-13
i.e.15.68% as compared to 2013-14 i.e.5.26%. The total fixed assets are
reduced in the year 2013-14 i.e.29098197 as compared to 2012-13 i.e.
31741800. The total assets of 2013-14 i.e. 81311195.22 are less than 2012-13
i.e.82134207.61. The total liabilities are more in the year 2012-13
i.e.82134207.61 as compare to 2013-14 i.e.81311195.22 respectively.
 In the table no. 36 it can be say that the net sales as a base 100%. Sales
decreased in year 2014-15 i.e. 103797957 as compared to 2013-14 i.e.
136065364. The gross profits are more in the year 2014-15 i.e.13112497 as
1694586.15 as compared to 2014-15 i.e.2307959. The earnings after tax are
increased in year 2014-15 i.e.651624.274 as compared to 2013-14
 In the table no. 37 it can be say that the total assets and total liabilities are
taken as a base year 100%. The cash and bank balance are more in the year
2014-15 i.e. 1506602.22 as compared to 2013-14 i.e.295983.22. The total
current assets are less in the year 2013-14 i.e. 64.21% as compared to 2014-15
i.e. 66.26%. The total assets of 2013-14 i.e. 81311195.22 are more than 2014-
15 i.e.75401920.8. The total liabilities are less in the year 2014-15
i.e.75401920.8 as compared to 2013-14 i.e.81311195.22 respectively.
 In the above table no.40 it can be say that the net sales as a base 100%. Sales
decreased in year 2016-17 i.e. 46914850 as compared to 2015-16 i.e.
82600731. The gross profits are less in the year 2016-17 i.e.7242626 as
compared to 2015-16 i.e.12078008. The earnings after tax are less in year
2016-17 i.e.-8075942.87 as compared to 2015-16 i.e.579009.935 respectively.
 In the above table no.41 it can be say that the total assets and total liabilities
are taken as a base year 100%. The inventories are more in the year 2016-17
i.e.19086715 as compared to 2015-16 i.e.8536388. The total assets of 2015-16
i.e. 61601492.83 are less than 2016-17 i.e.100361632.5. The total liabilities
are more in the year 2016-17 i.e.100361632.5 as compared to 2015-16

5.2 CONCLUSION
 From the above study it is concluded that Sagar Texofab Company are giving
their full efficiency to do better in the competitive generation. Yes, there are
some fluctuations coming but the company had managed many time and
covered all their mistakes by giving more focus on the problems efficiently.
 The profit of the company is fluctuating. The profit of the company is
increasing at a slower rate but in the last year it bears loss. The company has
to pay more attention towards its income and expenses. The cash on hand in
increased year by year, so we can say that company is a strong financial
position.
 From the above current ratio analysis it can be concluded that the assets and
liabilities are fluctuating on a continuous basis. Company should focus on
managing its liabilities and increasing assets. The working capital is also
showing an increase with the passing years. Therefore it is strength of the
company as they can meet their day-to-day expenses properly.
 From the above overall study it can be concluded that the company are
effective and efficient in all departments and are in a sound position to
compete in the market.
 Finally the researcher concluded that this practical training at Sagar Texofab
was a great experience.

5.3 SUGGESTION & RECOMMENDATION
[A] Comparative Financial Statements Analysis

 The company’s sales are decreasing year by year and the sales returns are
increasing due to that the net sales are decreasing year by year; the company
has to make attention to reduce the sales return and to increases the sales.
 The operating expenses and other expense are reduced so the company profit
increases and it can use that money for the development of the company.
 The profit of the company is fluctuating. The profit of the company is
increasing at a slower rate and in the last year it bears loss. The company has
to pay more attention towards its income and expenses. The cash on hand in
increased year by year, so they can achieve a strong financial position.
 The current assets are reducing year by year so due to that the total assets are
also reducing and the current liabilities and the total liabilities is increasing,
so company has to reduce his liabilities and increase his assets
[B] Trend Analysis

 The sales are reducing year by year so the company has to make the product as
per present trend so the more the people aware about the product the more
they purchase the product so the sales increases.
 The company has to work on the cost cutting of the company so that profit can
be used in the other purpose of the company.
[C] Fund Flow Statement Analysis

 As per the fund flow statement it is shown that the assets of the company are
increasing continuously so company has to maintain it, so that company can
be able to use the profit for the company’s efficiency enhancement.
 The company has to reduce its liabilities so that the company has to increases
its asset so it working capital increases to meet the day to day expenses of the
company.
[D] Ratio Analysis
 Current ratios are showing increases so the company should maintain &
increases their current assets so bring this ratio upward.
 Quick ratio the company has to increase it quick ratio to maintain the ratio of
1:1 for the better position of the company
 The Net profit ratio are increasing at the slower rate and the company has to
increase its net profit by reducing the cost of the company but in the last year
it decreases at faster and company has bear net loss.

[E] Common Size Statement Analysis

 Company has to cut their cost of production in order to achieve great profit
in the future
 Company should have to manage their debts and try to reduce them so that
if company can get big profit then it can be used for company expansion &
other development.
 From the above common sized statements study of Balance sheet (2016-
17) we can say that as it is showing a negative flow the company should
change his strategy.

5.4 Table no: 42; SWOT Analysis
SWOT Analysis
Strengths 1. One of the largest manufacturing of the grey fabrics in

India and the world.
2. Economics of scales through complete integration.
3. The Latest Manufacturing tools in production of grey
fabric and Crep.
Weaknesses 1. Global penetration is limited as compared to a few other

international brands.
2. Presence of Indian and international brands offers more
offering to customers there for high brand switching.
Opportunities 1. Growth in the garment industry.

2. Rapid growth in target group as well as higher income.
3. Global expansion and reach of brands to increases sales.
Threats 1. Increasing competition from Indian as well as international

brands.
2. Cheaper imports from other countries and printing
products.

BIBLIOGRAPHY
BOOKS
 Management Accounting - By RS.N. PILLAI, BHAGVATI- S.CHAND.
(Page on: 40, 41, 56, 164, 165, 193, 231)
 Research Methodology – Sangharsh Publication by Rajesh Desai & Dr. Baxis
Patel. (Page on: 7, 100)
WEBSITE (LINK)
- (https://en.m.wikipedia.org/wiki/Textile) (Dated on: 27th Dec, 2017)
- (https://en.m.wiktionary.org/wiki/industry) (Dated on: 29th Dec, 2017)
- (http://www.india-crafts.com/textile/textile-history.html) (Dated on: 30th Dec,
2017)
- (http://www.thedailyrecords.com/2018-2019-2020-2021/world-famous-top-
10-list/highest-selling-brands-products-companies-reviews/best-textile-
companies-world-largest-exporter/12903/) (Dated on: 30th Dec, 2017)
- (https://ambadipba.wordpress.com/2013/11/30/top-ten-textile-companies-in-
india/) (Dated on: 1st Jan, 2018)
- (http://www.worldblaze.in/top-10-best-textile-companies-in-india/) (Dated on:
10th Jan, 2018)
- (https://textilechapter.blogspot.com/2016/12/textile-companies-
world.html?m=1) (Dated on: 12th Jan, 2018)
- (http://www.textileworld.com/textile-world/business-
financial/2017/10/october-2017-textile-activity-at-a-glance/) (Dated on: 15th
Jan, 2018)
- (https://www.ibef.org/industry/textiles.aspx) (Dated on: 16th Jan, 2018)
- (https://www.trendrr.net/1655/most-famous-best-textile-companies-india-top-
10-brands-list/) (Dated on: 18th Jan, 2018)
- (http://www.textileschool.com/articles/330/type-of-fabrics) (Dated on: 19th
Jan, 2018)
- (http://www.eulerhermes.com/economic-research/country-
reports/Pages/India.aspx) (Dated on: 21st Jan, 2018)
- (https://www.fashionatingworld.com/new1-2/union-budget-2017-18-gets-a-
thumbs-up-from-textile-industry) (Dated on: 21st Jan, 2018)
- (http://www.textileexcellence.com/news/details/1005/textile-industry-to-
benefit-from-union-budget) (Dated on: 22nd Jan, 2018)
- (http://www.financialexpress.com/budget/budget-2017-outlay-for-labour-
intensive-textiles-sector-set-to-jump/530114/) (Dated on: 23rd Jan, 2018)
- (http://www.textileexcellence.com/news/details/1793/budget-2017-18-brings-
cheers-to-indian-textile-&-apparel-industry/) (Dated on: 24th Jan, 2018)

- (http://www.livemint.com/Industry/TVeyKBf8A8Em6Hz0IMCI6M/Budget-
2018-Textile-industry-welcomes-fund-allocation-for-t.html) (Dated on: 25th
Jan, 2018)
- (http://www.textileschool.com/articles/330/type-of-fabrics) (Dated on: 27th
Jan, 2018)
- (https://en.m.wikipedia.org/wiki/Company) (Dated on: 1st Feb, 2018)
- (http://farmsons.com/farmsons-group-overview.html) (Dated on: 1st Feb,
2018)
- (http://farmsons.com/index.html) (Dated on: 1st Feb, 2018)
- (http://farmsons.com/grey-fabrics-manufacturer.html) (Dated on: 3rd Feb,
2018)
- (http://www.accountingnotes.net/financial-statement/financial-statement-
meaning-objectives-and-limitations/4280) (Dated on: 5th Feb, 2018)
- (http://www.yourarticlelibrary.com/accounting/funds-flow-statement/fund-
flow-statement-meaning-objectives-and-preparation-with-specimen/65266)
(Dated on: 7th Feb, 2018)
- (http://www.yourarticlelibrary.com/financial-management/ratio-analysis-
meaning-classification-and-limitation-of-ratio-analysis/29418) (Dated on: 10th
Feb, 2018)
- (https://www.myaccountingcourse.com/financial-ratios/current-ratio) (Dated
on: 12th Feb, 2018)

ANNEXURE
Table no: 43; P&L Account for Year 2012-2013, 2013-2014, 2014-2015, 2015-
2016 and 2016-2017(Amount in Rupees)
2012-13 2013-14 2014-15 2015-16 2016-17
Sales 120654128 136065364 103797957 82600731 46914850
Less: Sales returns 1949584 3495122 3227015 6513065 2259743
Net Sales (A) 118704544 132570242 100570942 76087666 44655107
Less: Cost of Sales
Raw materials 83091899 97490731 60485067 36632180 24366117
Direct Wages 10202150 10401539 12376405 9427651 5790012
Manufacturing expenses 13354741 12956070 14596973 17949827 7256352
Total of cost of sales
(B) 106648790 120848340 87458445 64009658 37412481
Gross Profit
(A-B)= C 12055754 11721902 13112497 12078008 7242626
Less:Operating
expenses
Administrative expenses 1732183 1520048 2078703 2265853.27 2440267.8
expenses 224864.48 174538.15 229256 246448 253132
Total of Operating
expenses (D) 1957047.48 1694586.15 2307959 2512301.27 2693399.8
(C-D)=E 10098706.52 10027315.85 10804538 9565706.73 4549226.2
Add: Non -trading
Income
Interest received 3689973.01 4201653 2269679.82 1403677 1008494
Dividend received 312015 312015 312015 312015 234011.25
Less: Non-trading
expenses
Interest paid 8845003 9369101 8762254 7741001.68 5731443.32
Earnings before
tax (EBDIT) 5255691.53 5171882.85 4623978.82 3540397.05 60288.13
Less: Depreciation 5061889 4315234 3693087 2713240 8136231
Earnings before
interest & tax (EBIT) 193802.53 856648.85 930891.82 827157.05 -8075942.87
Less: Interest
Earnings before tax
(EBT) 193802.53 856648.85 930891.82 827157.05 -8075942.87
Less: Tax 58140.759 256994.655 279267.546 248147.115
Earnings after tax
(EAT) 135661.771 599654.195 651624.274 579009.935 -8075942.87

Table no: 44; Balance Sheet for Year Ending 31st March, 2012-2013, 2013-2014,
2014-2015, 2015-2016 and 2016-2017(Amount in Rupees)
2012-13 2013-14 2014-15 2015-16 2016-17

Assets
Current Assets
(a)Inventories 12876462.94 4281357 8984335 8536388 19086715
(b)Cash & bank
balance 726231.67 295983.22 1506602.22 2279385 923928.75
(c)Trade Payables 34858525 47421747 39351618.58 29978620.83 23311363
(d)Short Term loan
& advance 1886139 168862 65951 55188 4839844.83
(e)Other Current
Assets 45049 45049 54592 45613 10959
Total of Current
Assets 50392407.61 52212998.22 49963098.8 40895194.83 48172810.58
Fixed Assets
(a)Building 1451515 1306363 1175727 1058154 1237200
(b)Furniture 41497 37347 33612 30251 27226
(c)Machinery 27429030 23219901 19736915 17219419 48045970.87
(d)Investment 2461883 4197764 4078976 2048692 2582458
(e)Other Fixed
Assets 357875 336822 413592 349782 295967
Total of Fixed
Assets 31741800 29098197 25438822 20706298 52188821.87
Total of Assets 82134207.61 81311195.22 75401920.8 61601492.83 100361632.5
Liabilities
Current Liabilities
(a)Short term
liabilities 6747932 7476707 7048201 3744055.54 6868480.54
(b)Trade Payable 29133000.99 33882727.99 36974132 22188387 24465933.67
(c)Short term
Provisions 225375 296436 215255 212126 127947
(d)Other Current
Liabilities 10727305 4743248 1065084.07 7632608.78
Total Current
Liabilities 36106307.99 52383175.99 48980836 27209652.61 39094969.99
Long term
liabilities
(a)Long term
borrowing 38261809.84 19952329.55 20914504.29 30556843.68 51156666.92
Capital Account 7766089.78 8975689.68 5506580.51 3834996.54 10109995.54
Total of liabilities 82134207.61 81311195.22 75401920.8 61601492.83 100361632.5


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Financial Statements Analysis

1.2 OBJECTIVES OF THE STUDY

1.3 RESEARCH METHODOLOGY

1.4 SCOPE OF THE STUDY

1.5 IMPORTANCE OF THE STUDY

1.6 LIMITATION OF THE STUDY

Maniba Institute of Business Management, Sabargam Page 1

1.2 Objectives of the Study

1.2.1 Primary Objective

1.2.2 Secondary Objectives

 To know the financial position of Sagar Texofab Company.

1.3 Research Methodology

Meaning of Research Methodology

Research is a diligent and systematic inquire or investigate into a subject in order to

1.3.1 Problem Identification

The project report of “Financial Statements Analysis of Sagar Texofab Company”.

Maniba Institute of Business Management, Sabargam Page 2

1.3.2 Study Duration

1.3.3 Sources of data Collection

There are mainly two types of data collection methods:-

1.3.4 Research Design

There are three types of research design. They are as follows:-

Exploratory Descriptive Causal Research

Maniba Institute of Business Management, Sabargam Page 3

1.4 Scope of Study

1.5 Importance of the Study

 It provides vast knowledge about textile industry.

1.6 Limitation of the Study

 The data was not available in sufficient form.

Maniba Institute of Business Management, Sabargam Page 4

2.2. ADVANTAGE OF FINANCIAL STATEMENTS

2.4. TOOLS OF FINANCIAL STATEMENTS

Maniba Institute of Business Management, Sabargam Page 5

Financial Statements Analysis

Meaning of Financial Statements Analysis

Trial balance is a statement prepared as a first step before preparing financial

Types of Financial Statements Analysis

Maniba Institute of Business Management, Sabargam Page 6

1. The Income Statement (Profit and Loss A/c)

2. The Balance Sheet (Position Statement)

3. Statement of changes in Owner’s Equity (Retained Earnings)

4. Statement of changes in Financial Position

 Funds Flow Statement

Nature of Financial Statements Analysis

Maniba Institute of Business Management, Sabargam Page 7

(1) Recorded facts concerning the business transactions,

(2) Conventions adopted to facilitate the accounting technique,

(3) Postulates, or assumptions made to and

Objectives of Financial Statements Analysis

The following are the important objectives of the financial statements:-

2.2 Advantages of Financial Statements Analysis

(iii) Judging the Growth of the Business:

(iv) Judging Financial Strength of Business:

(v) Making Comparison and Selection of Appropriate Policy:

(vi) Forecasting and Preparing Budgets:

2.3 Disadvantages of Financial Statements Analysis

(ii) Use of Diverse Procedures:

Maniba Institute of Business Management, Sabargam Page 9

(v) Price Level Changes:

(vi) Subjectivity & Personal Bias:

Meaning of Financial Analysis

The various steps involved in financial analysis are:

Maniba Institute of Business Management, Sabargam Page 10