TRAINING REPORT

ON
Financial Performance Analysis
On the
Palm Green Resort & Hotel

Submitted in partial fulfillment of the requirement of Degree in

Masters of Business Administration
MANAGEMENT EDUCATION RESEARCH & INSTITUTE
(Session 2017-19)

UNDER THE GUIDANCE OF: SUBMITTED BY

Dr. Mandeep Kaur Divya
MBA 3rd SEMESTER
ROLL NO: 02115103917

1
 MANAGEMENT EDUCATION & RESEARCH INSTITUTE
JANAK PURI

TO WHOM SO EVER IT MAY CONCERN

This is to certify that DIVYA, a student of MBA 3rd sem. at MANAGEMENT EDUCATION &
RESEARCH INSTITUTE, has completed her project work entitled FINANCIAL PERFORMANCE
ANALYSIS at PALM GREEN RESORT & HOTEL. under my guidance I found her work satisfactory
and the same has not been submitted to any other university or college for the award of any other degree.

Dr. MANDEEP KAUR

Associate Professor

Management Education & Research Institute, Janak puri

2
 DECLARATION

I DIVYA student of the “MANAGEMENT EDUCATION & RESEARCH INSTITUTE” hereby

declare that the Summer Training report entitled, “FINANCIAL PERFORMANCE ANALYSIS” is an
original work and the same has not been submitted to any other institute for the award to any institute for
the award of any other degree. The suggestions as given by the faculty were duly incorporated.

I hereby certify that all the endeavours put in the fulfilment of the task are genuine and original to the best
of my knowledge and I have not submitted it earlier elsewhere.

The main objective of preparing this project report is to understand the scenario of financial management.
The feasible suggestions have been duly incorporated in consultation with the Supervisor

3
 PREFACE

There is a vast difference between theory and practical applicability of management concepts,
principles and theories in any industry. This practical training program in the course is designed with
an objective of bridging the gap between the theory and practical applicability of management
concepts and theories studied during the MBA program and their applicability in an industry.

I am very fortunate to have an opportunity to undergo my project in on “Financial Performance

Analysis”.

This Project training has been indeed a great learning experience which has provided a lot of exposure
regarding corporate functional environment in an industry. It has been a great pleasure for me to do my
project work in such an esteemed organization.

4
 ACKNOWLEDGEMENT

Training as learning is an essential part of an individual’s future career. The “learn while you
work” attitude is a very practical touch in the complete tenure of a person’s life. Training
bridges the gap between the learnt and the happening. During this phase the trainer or guide is
the one who can help most of this golden opportunity

With a sense of great pleasure and satisfaction, I present this Project report entitled “A study on
Financial Performance Analysis in Palm Green Resort & Hotel”. The Project Report is a
product of invaluable support & contribution from various people towards whom I wish to
express my whole-hearted gratitude. A project of this nature calls for intellectual nourishment,
professional guidance, encouragement and sincere criticism from various quarters associated
with this project, indirectly or directly.

I’m thankful to Mr. Rajesh kumar for their vital inputs and valuable suggestions and continuous
guidance, which have gone a long way in providing necessary impetus to my efforts in consummating this
report and other staff members for their support and cooperation.

5
 TABLE OF CONTENT

S.No. Chapter Page

No

Chapter-1 INTRODUCTION 7-14

1 Need, Objectives and Scope

C of the study 15-17
Chapter-2
Chapter-3 Literature Review 18-21

2 C
Chapter-4 Research Methodology
22-27

Chapter-5 Data Analysis and Interpretation 28-53

Chapter-6 Conclusion And Suggestion 54-58

3
Chapter-7 References
59-60

6
 CHAPTER – 1

INTRODUCTION
The financial statement provides the basic data for financial performance analysis. The financial
statements provide a summarized view of the financial position and operations of a firm.
Financial analysis (also referred to as financial statement analysis or accounting analysis) refers
to an assessment of the viability, stability and profitability of a business. The analyst first
identifies the information relevant to the decision under consideration from the total information
contained in the financial statements. Therefore, much can be learnt about a firm from a careful
examination of its financial statements as invaluable documents and performance reports.

The analysis of financial statements is an important aid to financial analysis. They provide
information on how the firm has performed in the past and what is its current financial position.
Financial analysis is the process of identifying the financial strengths and weakness of the firm
from the available accounting data and financial statements. The analysis is done by establishing
relationship between the different items of financial statements.

The focus of financial analysis is on key figures in the financial statements and the significant
relationship that exists between them. The analysis of financial statements is a process of
evaluating relationship between component parts of financial statements to obtain a better
understanding of the firm’s position and performance.

The first task of financial analyst is to select the information relevant to the decision under
consideration from the total information contained in the financial statement. The second step
involved in financial analysis is to arrange the information in a way to highlight significant
7
relationships. The final step is interpretation and drawing of inferences and conclusions. In brief,
financial analysis is the process of selection, relation, and evaluation.

8
 COMPANY PROFILE:
PALM GREEN HOTEL & RESORTS
It is perfectly located at northern end of Delhi for both business and leisure guests. All hotel
guestrooms have all the conveniences expected in its class to suit guest utmost comforts as per
International Standard To unwind guests can enjoy leisure facilities provided on the resort hotel
property, including outdoor pool, Walking and Running Track With elegant facilities and
hospitality, guests at this resort hotel will surely have a comfortable stay. To reserve at the
PALM GREEN HOTEL & RESORTS, simply select your dates of stay and fill in our secure
online booking form.

The PALM GREEN HOTEL & RESORTS classifies itself as a NOT DEFINED star hotel as
the team strives to meet the best standards of the hospitality industry.

Enter in to the world of PALM GREEN HOTEL & RESORTS - A premier destination for
tourists, business travellers and event management groups. The Resort Hotel combines the
luxury of stay with best-in-class facility for business meetings, conferences and high-energy
social get together. Beside, the spacious banquet halls make every celebration even larger than
life.

Terms & Conditions

Cancellation Policy

Cancellation Policy for any confirmed booking:

 10 days or more before check-in date - Loss of booking deposit (10% of entire stay)
 7-10 days before check-in date - 1 night charge or booking deposit whichever is higher
 3-7 days before check-in date - 50% of entire stay
 Cancellation received less than 3 days before check in date or No Show - 100% of entire
stay

Booking Policy

 A booking deposit of minimum 50% of entire stay will be charged to confirm bookings.
 The balance has to be paid before check out.

9
Extra Adult Policy

 12 yrs and above - Adult (Only 1 extra adult will be allowed per room with applicable
charges.)

Child Policy

 Below 5 yrs - infants (up to 2 infants allowed free sharing per room with parents.)
 6 yrs - 12 yrs - children (only 1 child allowed free sharing per room with parents.)
 Children between 6 - 12 yrs will be charged as per the tariff.

Other Policies

 Pet Policy: Pets are not permitted in the Hotel.

 Smoking Policy: Only permitted in designated areas of the Hotel.
 Check in/ Checkout Policy: Check-in time is from 1200 hrs onwards. Check-out is at
1100 hrs. All early arrivals need to be pre-booked with one full night charges.
 Late Checkout Policy: Late check-out from 1100hrs to 1800hrs at half the daily room
rate, thereafter a full night's room charge is applicable, subject to availability.
 Early Departure Policy: In case of an early departure, the hotel has the right to charge a
minimum one night and a maximum of 100% of the total room night actually booked.
 Please Note that all rates, wherever seen, are based on availability and are subject to
change without notice.
 ALL GUESTS ARE REQUIRED TO PRESENT PROPER PHOTO IDENTIFICATION
UPON CHECK IN. (The identity proof would include a valid driving license / voter
identity card / PAN card, etc.. Valid passport is mandatory for all foreign guests)

Privilege Club Membership Benefits

Palm Green, Hotels & Resorts a unique destination, with its luxurious accommodation facility,
highly experienced and trained staff, warm and gracious hospitality and serene ambiance, offers
you a chance to take marriage vows in a style. A special occasion deserves a celebration equally
spectacular - and that's exactly what the Palm Green specializes in. Our lush, sprawling lawns
with pool side lawn can accommodate 50 to 2000 pax with 2 Indoor Grand Ball Room Banquets
With our spectacular theme based decorations, acclaimed menu by renowned chefs, impeccable
service and genuine hospitality - we bring up to you the perfect setting for lavish wedding
parties, social functions.

We offers you a privilege membership of our fully furnished a unique star property which
delivers best hospitality, awesome food, a great place for your needs and choices. We will Greet
you as a special guest and a warm welcome will inspire as a privileged guest. We have some
10
special packages like Weekend away Package , Dinner Discount Package, Pool party Package,
Kitty Party Package and many more. We will offer discount vouchers to our privileged members
in this membership. In our membership you will get 20 % flat discount on published rate in any
of our Global Cuisine Restaurant and Bar, Round the year during membership.We will assist you
as a special guest during membership and you can avail special on banquet Menu.

A special Benefit of our membership is use of pool twice in a year. And exclusive benefit as
privileged guest on special occasion and on prior reservation we will arrange a separate sitting
'IN THE POOL' for your dinner on your Birthday and Anniversary.

Our Green Chilly a global cuisine Restaurant and Savannah bar gives you an unique experience
and live music will touché your soul. The Palm Green pleases the palate of the gastronome in a
variety of ways. Conveniently located at the lobby level, Green Chilli- a Global Multi-Cuisine
Restaurant, offers an eclectic fare - from classic American to gourmet French, from authentic
Oriental to traditional Indian specialties - prepared from the freshest ingredients and turned to
perfection by master-chefs. Be it a lavish breakfast spread, a leisurely lunch or a mid- night feast,
your complete satisfaction is our motto. The Savannah Bar, also located at lobby level, will offer
you the perfect ambiance to raise a toast over a choice of connoisseur spirits, cocktails and
beverages - the perfect place to unwind with friends, colleagues and clients alike.

Membership Includes a lot of wonderful benefits some of them are as follows:-

 1 Complimentary one Room Night Stay with Breakfast

 1 Complimentary Voucher of Welcome Dinner for a Couple
 2 Complimentary Vouchers Of Rs 1000/-
 3 Complimentary Vouchers of two Pegs (30 ML) IMFL
 2 Complimentary Vouchers of Desserts
 2 Complimentary vouchers of Complimentary Cake on Members Birthday and
Anniversary
 2 Vouchers of 25% discount on Weekend Package.
 2 Vouchers of 50% discount on Rooms Rack Rate.

HOTEL ORGANIZATIONAL CHART

Every hotel, whether it’s big or small, needs an organizational structure to carry out its daily
operations. It is used to help divide tasks, specify the job for each department, and delegate
authority within and among departments. Effective job specifications will increase work
11
productivity and efficiency. Each hotel organizes workforce in different ways. Here shows a
medium size hotel organizational structure.

It was basically segmented into six divisions: finance, front office, human resources, food and
beverage, sales and logistics.

Financial

The financial department’s role is to record financial transactions, prepare and interpret financial
statements, and deal with cost accounting and cost control.

Front Office

12
The front office (room management) department handles customer service including front desk
service, reservation, laundry, concierge, telephone, and housekeeping service. A hotel’s front
office is where guests are greeted when they arrive, where they get registered and assigned to a
room, and where they check out. It’s almost the most important department as it often offers
contact with customers.

Human Resources

The human resources department is given the responsibility to handle employee recruitment,
arrange staff training, make promotion and disciplinary decisions, and check staff attendance.

Food & Beverage

The food and beverage department is responsible for all of the dining rooms, restaurants, bars,
kitchen, clean up services, etc. Here we basically divide F/B department into two parts: kitchen
and restaurant. Kitchen department is responsible for food preparation including main food,
dessert, side food, and beverage. Restaurant department‘s role is to provide dining room
operation, waiter service, food runner, and clean up service.

13
Sales

The responsibility for sales department is to sell the hotel facilities and services to individuals
and groups. They sell rooms, food, beverage or special services such as massage and laundry to
potential customers through advertising or direct contacts.

Logistics

The logistics department is responsible for tracking for daily supplies, purchasing appliances,
and keeping security.

14
15
NEED, OBJECTIVES AND SCOPE OF THE STUDY

2.1 NEED FOR THE STUDY

The Financial Statements are mirror which reflects the financial position and strengths or
weakness of the concern. Every business needs to view the financial performance analysis.

The study on effectiveness of o financial performance of Palm green hotel & resort is conducted
to measure the overall performance of company. The financial analysis strengths the firms to
make their best use, and to be able to spot out financial weakness of the firm to state suitable
corrective actions.

This study aims at analyzing the overall financial performance of the company by using various
financial tools like Comparative Analysis, common size statement analysis, Ratio Analysis, and
Cash Flow Analysis.

2.2 OBJECTIVES OF THE STUDY

2.2.1 PRIMARY OBJECTIVE:

o To study the financial performance analysis of Palm green hotel & resort, Delhi.

2.2.2 SECONDARY OBJECTIVES:

o To compare and analyze the financial statements for the past three financial years
(2015, 2016, 2017)

o To know the profitability, liquidity and solvency position of Palm green hotel &
resort.

16
 o To compare and interpret financial statements of the Palm green hotel & resort
with comparative and common-size statement analysis.

o To forecast the annual growth rate of income of the company with the help of
regression analysis.

o To provide suggestions for improving the overall finance performance of the

company.

2.3 SCOPE OF THE STUDY

The study is based on the accounting information of the PALM GREEN HOTEL & RESORT,
DELHI. The study covers the period of 2015-2017 for analyzing the financial statement such as
income statements and balance sheet.
The scope of the study involves the various factors that affect the financial efficiency of the
company. To increase the profit and sales growth of the company. This study finds out the
operational efficiency of the organization and allocation of resources to improve the efficiency of
the organization.

The data of the past three years are taken into account for the study. The performance is
compared within those periods. This study finds out the areas where Palm green hotel & resort
can improve to increase the efficiency of its assets and funds employed.

17
CHAPTER – 3
LITERATURE
REVIEW

18
LITERATURE REVIEW

I.M.Pandey (2007), had stated that the financial statements contain information about the
financial consequences and sources and uses of financial resources, one should be able to say
whether the financial condition of a firm is good or bad; whether it is improving or deteriorating.
One can relate the financial variables given in financial statements in a meaningful way which
will suggest the actions which one may have to initiate to improve the firm’s financial condition.

Chidambaram Ramesh kumar & Dr. N. Anbumani (2006), he argue that Ratio Analysis
enables the business owner/manager to spot trends in a business and to compare its performance
and condition with the average performance of similar businesses in the same
industry. To do this compare your ratios with the average of businesses similar to yours and
compare your own ratios for several successive years, watching especially for any unfavorable
trends that may be starting. Ratio analysis may provide the all-important early warning
indications that allow you to solve your business problems before your business is destroyed by
them.

Jae K.Shim & Joel G.Siegel (1999), had explained that the financial statement of an enterprise
present the raw data of its assets, liabilities and equities in the balance sheet and its revenue and
expenses in the income statement. Without subjecting these to data analysis, many fallacious
conclusions might be drawn concerning the financial condition of the enterprise. Financial
statement analysis is undertaken by creditors, investors and other financial statement users in
order to determine the credit worthiness and earning potential of an entity.

Susan Ward (2008), emphasis that financial analysis using ratios between key values help
investors cope with the massive amount of numbers in company financial statements. For
example, they can compute the percentage of net profit a company is generating on the funds it

19
has deployed. All other things remaining the same, a company that earns a higher percentage of
profit compared to other companies is a better investment option.

M Y Khan & P K Jain (2011), have explained that the Financial statements provide a
summarized view of the financial position and operations of a firm. Therefore, much can be
learnt about a firm from a careful examination of its financial statements as invaluable
documents / performance reports. The analysis of financial statements is, thus, an important aid
to financial analysis.

Elizabeth Duncan and Elliott (2004), had stated that the paper in the title of efficiency,
customer service and financing performance among Australian financial institutions showed that
all financial performance measures as interest margin, return on assets, and capital adequacy are
positively correlated with customer service quality scores.

Jonas Elmerraji (2005), tries to say that ratios can be an invaluable tool for making an
investment decision. Even so, many new investors would rather leave their decisions to fate than
try to deal with the intimidation of financial ratios. The truth is that ratios aren't that intimidating,
even if you don't have a degree in business or finance. Using ratios to make informed decisions
about an investment makes a lot of sense, once you know how use them.

Carlos Correia (2007), had explained that any analysis of the firm, whether by management,
investors, or other interested parties, must include an examination of the company’s financial
data. The most obvious and readily available source of this information is the firm’s annual
report. The financial statements shall, in conformity with generally accepted accounting practice,
fairly present the state of the affairs of the company and the results of operations for the financial
year.

Greninger et al.(1996), identified and refined financial ratios using a Delphi study in the areas
of liquidity, savings, asset allocation, inflation protection, tax burden, housing expenses and,
insolvency. Based on the Delphi findings, they proposed a profile of financial well-being for the
typical family and individual.
20
Rachchh Minaxi A (2011), have suggested that the financial statement analysis involves
analyzing the financial statements to extract information that can facilitate decision making. It is
the process of evaluating the relationship between component parts of the financial statements to
obtain a better understanding of an entity’s position and performance.

Salmi, T. and T. Martikainen (1994), in his "A review of the theoretical and empirical basis of
financial ratio analysis", has suggested that A systematic framework of financial statement
analysis along with the observed separate research trends might be useful for furthering the
development of research. If the research results in financial ratio analysis are to be useful for the
decision makers, the results must be theoretically consistent and empirically generalizable.

John J.Wild, K.R.Subramanyam & Robert F.Halsey (2006), have said that the financial
statement analysis is the application of analytical tools and techniques to general-purpose
financial statements and related data to derive estimates and inferences useful in business
analysis. Financial statement analysis reduces reliance on hunches, guesses, and intuition for
business decisions. It decreases the uncertainty of business analysis.

21
 CHAPTER- 4
RESEARCH
METHODOLOGY

22
 RESEARCH METHODOLOGY

Research can be defined as “A Scientific and Systemic Search for pertinent information on a
specific topic”. Therefore, research could be understood as an organized activity with specific
objectives on a problem or issues supported by compilation of related data and facts, involving
application of relevant tools of analysis and deriving logically on originality.

4.1 RESEARCH DESIGN

Research Design is the arrangement of condition for collection and analysis of data in manner
that aims to combine relevance to the research purpose with the economy in procedure. Research
Design is important primarily because of the increased complexity in the market as well as
marketing approaches available to the researchers. A research design specifies the methods and
procedures for conducting a particular study.

4.2 TYPE OF RESEARCH

ANALYTICAL RESEARCH

In this type of research has to use facts or information already available, and analyze these to
make a critical evaluation of the material. The researcher depends on existing data for his
research work. The analysis revolves round the material collected or available.

4.3 SOURCE OF DATA

SECONDARY DATA

Secondary Data refers to the information or facts already collected such data are collected with
the objectives of understanding the past status of any variable or the data collected and reported
by some source is accessed and used for the objective of a study. Normally in research, the
scholars collect published data, journals, annual reports and websites.

23
4.4 TOOLS USED FOR ANALYSIS

(1) Ratio Analysis

(2) Comparative Statement Analysis

(3) Common-size Statement Analysis

(4) Cash Flow Statement Analysis

(5) Regression Analysis

4.4.1 RATIO ANALYSIS

A ratio is the process of determining and presenting the relationship of items and groups of items
in the financial statements. The ratios can be classified into the following types:

4.4.1.1 PROFITABILITY RATIO

Profitability Ratio measured as a ability to make maximum profit from optimum utilization of
resources by a business concern is termed as profitability.

 GROSS PROFIT RATIO

This ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit Ratio includes
the difference between sales and direct costs.

Gross Profit Ratio = (Gross Profit / Net Sales ) * 100

 NET PROFIT RATIO

It measures of management efficiency in operating the business successfully from the owner’s
point of view. Higher the ratio better is the operational efficiency of business concern.

Net Profit Ratio = ( Net Profit After Tax / Net Sales ) * 100

24
RETURN ON EQUITY OR RETURN ON NET WORTH

This ratio signifies the return on equity shareholders funds. The profit considered for computing
the ratio is taken after payment of preference dividend.

Return on Equity = (Net Profit After Interest And Tax / Shareholder’s funds ) * 100

4.4.1.2 ACTIVITY RATIO OR TURNOVER RATIOS:

Activity ratios highlight the operational efficiency of the business concern. The term operational
efficiency refers to effective, profitable and rational use of resources available to the concern.

WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It also measures the
smooth running of business. The ratio establishes relationship between cost of sales and working
capital.

Working Capital Turnover Ratio = ( Sales / Net Working Capital )

CAPITAL TURNOVER RATIO

Managerial efficiency is also calculated by establishing the relationship between cost of sales or
sales with the amount of capital invested in the business.

Capital Turnover Ratio = (Sales / Capital Employed)

FIXED ASSET TURNOVER RATIO

This ratio determines efficiency of utilization of fixed assets and profitability of a business
concern.

Fixed Asset Turnover Ratio = (Sales / Net Fixed asset)

25
4.4.1.3 SOLVENCY OR FINANCIAL RATIOS

Solvency or Financial Ratios include all ratios which express financial position of the concern.
The term financial position generally refers to short-tem and long-term solvency of the business
concern, including safety of different interested parties.

o CURRENT RATIO

In order to measure the short-term liquidity or solvency of a concern, comparison of current

assets and current liabilities is inevitable. Current ratio indicates the ability of a concern to meet
its current obligations as and when they are due for payment.

Current Ratio = ( Current asset / Current liabilities )

o DEBT EQUITY RATIO

The debt equity ratio is determined to ascertain the soundness of the long term financial policies
of the company and also to measures the relatives’ proposition of outsider’s funds and
shareholders’ funds investments in the company.

Debt-Equity Ratio = ( Total Long-term Debt / Shareholder’s Funds )

o DEBT TO TOTAL FUNDS RATIO

This ratio gives same indication as the debt equity ratio as this is a variation of debt equity ratio.
This ratio is the relationship between long term debts and total long term funds.

Debt to Total Funds Ratio = ( Long-term Debt / Total Funds)

o EQUITY TO TOTAL FUNDS

Equity to total funds explains the relationship between equity and total funds.

Equity to Total Funds = ( Equity / Total Funds)

26
4.4.2 COMPARATIVE STATEMENT ANALYSIS

Comparative balance sheet as on two or more different dates can be used for comparing assets
and liabilities and findings out any increase or decrease in the items. Thus while in single
balance sheet the emphasis is on present position, it is on change in the comparative balance
sheet.

4.4.3 COMMON SIZE STATEMENT ANALYSIS

Common size statements indicate the relationship of various items with some common items. In
the income statements, the sales figure is taken as basis and all other figures are expressed as
percentage of sales. Similarly, in the balance sheet the total assets and liabilities is taken as base
and all other figures are expressed as percentage of this total.

4.4.4 CASH FLOW STATEMENT

Cash flow includes cash inflows and out flows - cash receipts and cash payments during a
period. A cash flow statement is a statement which portrays the changes in the position between
two accounting period. Cash flow analysis can reveal the causes for even highly profitable firms
experiencing acute cash shortages.

4.4.5 REGRESSION ANALYSIS

A fundamental and versatile research technique that seeks to explain an outcome variable in
terms of multiple predictor variables. This analysis reveals the nature and strength of the
relationship between each predictor variable and the outcome, independent of the influence from
all other predictors.

Regression Equation Y on X is given as:

Y = a + bX
Equations to find constants ‘a’ and ‘b’ are given as:
∑Y = Na + b∑X
∑XY = a∑X + b

27
 CHAPTER - 5
DATA ANALYSIS AND
INTERPRETATION

28
5 DATA ANALYSIS AND INTERPRETATION

5.1 RATIO ANALYSIS :-

5.1.1 PROFITABILITY RATIOS

5.1.1.1 Gross Profit Ratio:

This ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit Ratio includes
the difference between sales and direct costs.

Gross Profit
Gross Profit Ratio = X100
Net Sales

Table No 5.1.1 GROSS PROFIT RATIO

Years Gross Profit Net sales Ratio

(Rs.) (Rs.) (In %)
2014-2015 30289.71 90176.44 33.58
2015-2016 21971.03 108277.62 20.29
2016-2017 32347.63 118189.37 27.37

29
 Chart No 5.1.1 GROSS PROFIT RATIO

Total
40

35

30

25

20
Total
15

10

0
2014-15 2015-16 2016-17

INFERENCES:

The Gross Profit for the financial year 2014-2015 was recorded as per the ratio is 33.58%,
where as the years between 2015-2016 went through a change in the ratio of 20.29% and the
companies profit went upward in 2016-2017 with the ratio of 27.37%. Thus, it is showing the
steady growth in the company profile.

5.1.1.2 NET PROFIT RATIO

It measures of management efficiency in operating the business successfully from the owner’s
point of view. It indicates the return on shareholder’s investment. Higher the ratio better is the
operational efficiency of business concern.

Net Profit after Tax

Net Profit Ratio = X 100
Net Sales

30
 Table No 5.1.2 NET PROFIT RATIO

Years Net Profit Net sales Ratio

(Rs.) (Rs.) (In %)
2014-2015 21254.24 90176.44 23.56
2015-2016 15073.14 108277.62 13.92
2016-2017 22674.86 118189.37 19.18

Chart No 5.1.2 NET PROFIT RATIO

Total
25

20

15

Total
10

0
2014-15 2015-16 2016-17

INFERENCES:

The Net Profit Ratio depicts that the company had a good profit in 2014-2015 where it had a
good yield profit. Comparing to the year 2015-2016 is 13.92%, the sales of the company have a
steady attitude and increase upwards to 19.18%. This indicates that there is an improvement in
the operational efficient of the business and it leads to the increase in the profitability of the firm.

31
RETURN ON EQUITY OR RETURN ON NET WORTH

This ratio signifies the return on equity shareholders funds. The profit considered for computing
the ratio is taken after payment of preference dividend.

Net profit after interest and tax

Return on Equity = X 100
Shareholder fund

Table No 5.1.3 RETURN ON EQUITY

Years Net profit after Shareholder Ratio

interest and tax Fund (Rs.) (In %)
(Rs.)
2014-2015 21254.24 231280.81 9.18

2015-2016 15073.14 268538.97 5.61

2016-2017 22674.86 333318.07 6.80

Chart No 5.1.3 RETURN ON EQUITY

Total
10
9
8
7
6
5
Total
4
3
2
1
0
2014-15 2015-16 2016-17

32
INFERENCES:

Return on shareholder fund determines the profitability from the shareholders point of view.
From the above, it shows that in the year 2015-2016, the company shows 5.61% of ratio and it
has risen to 6.80%. This is a clear indication of overall operation is efficient.

5.1.2 TURNOVER RATIO

5.1.2.1 WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It also measures the
smooth running of business. The ratio establishes relationship between cost of sales and working
capital.
Sales
Working Capital Turnover Ratio =
Net Working Capital

Table No 5.1.4 WORKING CAPITAL TURNOVER RATIO

Years Sales Net Working Capital Ratio

(Rs.) (Rs.) (In Times)
2014-2015 90176.44 645733.44 0.13
2015-2016 108277.62 666319.18 0.16
2016-2017 118189.37 898497.54 0.13

33
 Chart No 5.1.4 WORKING CAPITAL TURNOVER RATIO

Total
0.18
0.16
0.14
0.12
0.1
0.08 Total

0.06
0.04
0.02
0
2014-15 2015-16 2016-17

INFERENCES:
A higher ratio is the indication of lower investment of working capital and more profit. In 2014-
2015, the sales of the company are low at 0.13 times but in the year 2015-2016, it gone upward
of sales to 0.16 times.
5.1.2.2 CAPITAL TURNOVER RATIO

Managerial efficiency is also calculated by establishing the relationship between cost of sales or
sales with the amount of capital invested in the business.

Net Sales
Capital Turnover Ratio =
Capital Employed

Table No 5.1.5 CAPITAL TURNOVER RATIO

Years Net Sales Capital Employed Ratio

(Rs.) (Rs.) (In Times)
2014-2015 90176.44 536009.27 0.16
2015-2016 108277.62 533288.26 0.20
2016-2017 118189.37 720052.92 0.17

34
 Chart No 5.1.5 CAPITAL TURNOVER RATIO

Total
0.25

0.2

0.15

Total
0.1

0.05

0
2014-15 2015-16 2016-17

INFERENCES:
In the year 2014-2015, the sales’ comparing to 2015-2016 it is increased to 0.20 times and it
shows that efficient methods are adopted to use the capital employed. In 2016-2017, which
compares to the year 2014-2015 it indicates higher ratio of 0.17 times. The capital of the
company has utilized efficiently comparing to 2014-2015.
5.1.2.3 FIXED ASSET TURNOVER RATIO

This ratio determines efficiency of utilization of fixed assets and profitability of a business
concern.
Net Sales
Fixed Asset Turnover Ratio =
Net Fixed asset
Table No 5.1.6 FIXED ASSET TURNOVER RATIO

Years Sales Fixed Asset Ratio

(Rs.) (Rs.) (In Times)

2014-2015 90176.44 17264.30 5.22

2015-2016 108277.62 20241.05 5.35
2016-2017 118189.37 23237.80 5.09

35
 Chart No 5.1.6 FIXED ASSET TURNOVER RATIO

Total
5.4

5.35

5.3

5.25

5.2

5.15 Total

5.1

5.05

4.95
2014-15 2015-16 2016-17

INFERENCES:

Higher the ratio is more than the efficiency in utilization of Fixed Assets. Lower ratio indicates
the under utilization of fixed assets. From the above table it indicates in the year 2015-2016, the
sales have been increased comparing to the next year 2016-2017. And it’s gradually declining
over the next year 2016-2017 for 5.09 times.
5.1.3 SOLVENCY OR FINANCIAL RATIOS:

5.1.3.1 CURRENT RATIO

In order to measure the short-term liquidity or solvency of a concern, comparison of
current assets and current liabilities is inevitable. Current ratio indicates the ability of a concern
to meet its current obligations as and when they are due for payment.

Current asset
Current Ratio =
Current liabilities

36
 Table No 5.1.7 CURRENT RATIO
Years Current Asset Current Liabilities Ratio
(Rs.) (Rs.) (In Times)
2014-2015 56187.53 53034.57 1.06
2015-2016 68876.04 50360.94 1.36
2016-2017 166489.36 55084.13 3.02

Chart No 5.1.7 CURRENT RATIO

Total
3.5

2.5

2
Total
1.5

0.5

0
2014-15 2015-16 2016-17

INFERENCES:
A high current ratio is an assurance that the firm will have adequate funds to pays current
liabilities and other payment. During the year 2016-2017, the current ratio is 3.02 times and it is
more when compared with previous year 2015-2016 is 1.36 times.

5.1.3.2 DEBT EQUITY RATIO

The debt equity ratio is determined to ascertain the soundness of the long term financial policies
of the company and also to measures the relatives’ proposition of outsider’s funds and
shareholders’ funds investments in the company.

Total Long-term debt

Debt Equity Ratio =
Shareholders’ Funds
37
 Table No 5.1.8 DEBT EQUITY RATIO

Years Long term debts Shareholders’ funds Ratio

(Rs.) (Rs.) (In Times)

2014-2015 431716.93 104292.34 4.13

2015-2016 418021.26 115267 3.62
2016-2017 588417.27 131635.65 4.47

Chart No 5.1.8 DEBT EQUITY RATIO

Total
5
4.5
4
3.5
3
2.5
Total
2
1.5
1
0.5
0
2014-15 2015-16 2016-17

INFERENCES:

From the above table, during the year 2014-2015 the debt equity ratio is 4.13 times and it is
decreased to 3.62 times then it shows the uptrend from the year 2016-2017 as 4.47 times.
Suggest that the debt from the company has increased over the years with increase in shareholder
funds as well.

38
5.1.3.3 DEBT TO TOTAL FUNDS RATIO

This ratio gives same indication as the debt equity ratio as this is a variation of debt equity ratio.
This ratio is also known as solvency ratio. This ratio is the relationship between long term debts
and total long term funds.

Total Long Term Debts

Debt to Total Funds Ratio =
Total Funds

Table No 5.1.9 DEBT TO TOTAL FUNDS RATIO

Years Long Term Debts Total Funds Ratio

(Rs.) (Rs.) (In Times)
2014-2015 431716.93 712389.16 0.60
2015-2016 418021.26 742843.84 0.56
2016-2017 588417.27 981013.79 0.59

Chart No 5.1.9 DEBT TO TOTAL FUNDS RATIO

Total
0.61

0.6

0.59

0.58

0.57 Total

0.56

0.55

0.54
2014-15 2015-16 2016-17

INFERENCES:
During the year 2014-2015, the debt to total funds ratio is 0.60 times and it was decreased. And
in 2016-2017 again it had an increase in the company’s sales comparing to previous year 2015-
2016 is 0.56 times to 0.59 times in 2016-2017.
39
5.1.3.4 EQUITY TO TOTAL FUNDS

Equity to total funds explains the relationship between equity and total funds.

Shareholder Fund
Equity to Total Funds =
Total Funds

Table No 5.1.10 EQUITY TO TOTAL FUNDS

Years Equity Total Funds Ratio
(In Rs.) (In Rs.) (In Times)
2014-2015 104292.34 712389.16 0.14
2015-2016 115267.00 742843.84 0.15
2016-2017 131635.65 981013.79 0.13

Chart No 5.1.10 EQUITY TO TOTAL FUNDS

Total
0.155

0.15

0.145

0.14

0.135 Total

0.13

0.125

0.12
2014-15 2015-16 2016-17

INFERENCES:

In the year 2014-2015, the total funds was Rs.712389.16 (in lakhs) and it shows upward trend of
Rs.981013.79 (in lakhs) and during the year 2016-2017 comparing to the year 2015-2016 is
Rs.742843.84 (in lakhs).

40
5.2.1 COMPARATIVE INCOME STATEMENT OF PALM GREEN HOTEL &
RESORT FOR THE YEAR ENDED 31.03.2017

Particulars 2016 2017 Amount Increase / Percentage

(Rs.) (Rs.) Decrease during Increase / Decrease
2016-2017 (Rs.) during
2016-2017 (In %)

Income from Operation 108277.62 118189.37 +9911.75 +9.15

Less: Financial Expense 64544.09 63379.55 (1164.54) (1.80)

Gross Profit (A) 43733.53 54809.82 +11076.29 +25.33

Other Income:
Profit on Sale of Shares - 2538.90 - -
Other Income 3199.28 4142.57 +943.29 +29.48

Total (B) 3199.28 6681.47 +3482.19 +108.84

Total Income 46932.81 61491.29 14558.48 +134.17

(A+B) = C

Expense:
Operating Expense:

Administration Expense 7160.91 6042.27 (1118.64) (15.62)

Establishment Expense 9407.97 10011.23 +603.26 +6.41
Provision 4616.80 8608.59 +3991.79 +86.46
Depreciation 3776.10 4481.57 +705.47 +18.68

Total Operating
Expense (D) 24961.78 29143.66 +4181.88 +16.75

Operating Profit 21971.03 32347.63 +10376.6 +47.23

(C-D)

Non-Operating Expense:

Taxation 6897.89 9672.77 +2774.88 +40.23

Total Non-Operating
Expense (F) 6897.89 9672.77 +2774.88 +40.23

Net Profit (E-F) 15073.14 22674.86 +7601.72 +50.43

41
INFERENCES:

The comparative income statement shows income from operation amount increase during the
year 2016-2017 was Rs.9911.75 and increase in percentage of 9.15.

For the year 2016-2017, the total income indicates Rs.14558.48 and percentage increase during
the year 2016-2017 was 134.17.

The operating profit has been increased is Rs.32347.63 in the year 2010 which is comparing to
the previous year was Rs.21971.03 and the percentage shows increase by 47.23.

The Net profit amount increases during 2016-2017 is Rs. 7601.72 and shows percentage increase
by 50.43.

42
 5.2.2 COMPARATIVE BALANCE SHEET OF PALM GREEN HOTEL & RESORT
FOR THE YEAR ENDED 31.03.2017

Amount Increase / Percentage

2016 2017 Decrease during Increase /
Particulars
(Rs.) (Rs.) 2016-2017 Decrease during
(Rs.) 2016-2017 (In %)
Assets:

Current Assets 68876.04 166489.36 +97613.32 +141.72

Loans & Advance 653955.77 799363.96 +145408.19 +21.98
Deferred Tax Asset 5691.36 6124.40 +433.04 +7.61
Investment 51188.87 53744.80 +2555.93 +4.99
Fixed Asset 20241.05 23237.80 +2996.75 +14.80

Total Asset 799953.09 1048960.32 +249007.23 +31.13

Liabilities and
Capital:

Current Liability 58478.77 67946.53 +9467.76 +16.19

Unsecured Loan 208479.20 260960.87 +52481.67 +25.17
Secured Loan 417728.12 588417.27 +170689.15 +40.86

Total Liabilities 684686.09 917324.67 +232638.58 +33.98

(A)

Capital and
Reserve:

Share Capital 5555.19 5555.19 - -

Reserve & Stock
Options 109711.81 126080.46 +16368.65 +14.92

Total
Shareholders 115267.00 131635.65 16368.65 +14.20
Funds (B)

Total Liabilities 799953.09 1048960.32 249007.23 +31.13

and Capital (A+B) ========== ========== ============= =============

43
In the year 2016-2017, the investment it shows the uptrend for the year 2010 as Rs.53744.80 and
it has increased by 4.99%.

Fixed assets has been increased was Rs.23237.80 in the year 2010 which is comparing to the
previous year and the percentage shows increase by 14.80.

During the year 2009, the shareholders fund amount to Rs.115267.00 it has been increased to the
amount of Rs. 131635.65 and percentage increased was 14.20.

Secured loans shows uptrend by Rs.588417.27 over the previous year of Rs.417728.12 and
increase in percentage of 33.98.

44
5.3.1 COMMON SIZE INCOME STATEMENT OF PALM GREEN HOTEL & RESORT
FOR THE YEAR ENDED 31.03.2015
2015 2016
Particulars
Amount Percentage (%) Amount Percentage (%)
(Rs.) (Rs.)

Income from Operation 90176.44 100 108277.62 100

Less: Financial Expense 49699.52 55.1 64544.09 59.6

Gross Profit (A) 40476.92 43733.53

44.88 40.39

Other Income:
- - - -
Profit on Sale of Shares
3199.28 3199.28 2.95
Other Income 3.54

Total (B) 3199.28 3.54 3199.28 2.95

Total Income 43676.20 48.43 46932.81 43.34

(A+B) = C

Expense:
Operating Expense:

7198.81 7160.91 6.61

Administration Expense 7.98
8821.90 9407.97 8.68
Establishment Expense 9.78
3308.02 4616.80 4.26
Provision 3.66
3012.19 3776.10 3.48
Depreciation 3.34

Total Operating 22340.92 24.77 24961.78 23.05

Expense (D)

Operating Profit 20.29

21335.28 23.65 21971.03
(C-D) = E

Non-Operating Expense:

Taxation 9035.47 10.01 6897.89 6.37

Total Non-Operating
9035.47 10.01 6897.89
Expense (F) 6.37

12299.81 13.63 15073.14 13.92

Net Profit (E-F)

45
INFERENCES:

The operating profit of the Palm Green Hotel & Resort has been increased during the year 2015-
2016, the operating profit shows Rs.21335.28 in 2015 and Rs.21971.03 in the financial year
2016.

For the year 2015, the establishment expense shows Rs.8821.90 and it has been increased to
Rs.9408.97 during the year 2016.

In 2015, provision is 3.66% and it indicates increase during the year 2016 was 4.26%.

The operating expenses incurred to the Palm green hotel& resort during the financial year 2015
which shows Rs.22340.92 and it has risen to Rs.24961.78 during the financial year 2016.

The net profit percentage recorded as 13.63 in 2015 where as in the year 2016 the company’s
profit went upward with the percentage of 13.92.

46
 5.3.2 COMMON SIZE BALANCE SHEET OF PALM GREEN HOTEL & RESORT
FOR THE YEAR ENDED 31.03.2016

2015 2016
Particulars
Amount Percentage Amount Percentage
(Rs.) (%) (Rs.) (%)
Assets:

Current Assets 56187.53 7.24 68876.04 8.61

Loans & Advance 652655.00 84.10 653955.77 81.74
Deferred Tax Asset 4263.67 0.54 5691.36 0.71
Investment 45645.50 5.88 51188.87 6.39
Fixed Asset 17264.30 2.22 20241.05 2.53

Total Asset 776016.00 100 799953.09 100

=========== =============

Liabilities and
Capital:

Current Liability 63626.84 8.19 58478.77 7.31

Unsecured Loan 176379.89 22.72 208479.20 26.06
Secured Loan 431716.93 55.63 417728.12 52.21

Total Liability (A) 671723.66 86.56 684686.09 85.59

Capital and Reserve:

Share Capital 2777.60 0.35 5555.19 0.69

Reserve & Stock
Options 101514.74 13.08 109711.81 13.71

Total Shareholders 104292.34 13.43 115267.00 14.40

Funds (B)

Total Liabilities and

776016.00 100 799953.09 100
Capital (A+B) ===========
========== ============ =============

47
INFERENCES:

The current assets have increased during the financial year 2016 is 8.61% which is comparing to
2015 was 7.24% of the Palm Green Hotel & Resort.

There was an increase in fixed assets of Rs.20241.05 comparing to the year 2016. Higher the
ratio is more than the efficiency in utilization of fixed assets.

The current liabilities have been decreased to 7.31% of the total liabilities of the Palm green
hotel & resort during the year 2016. The current liability was 8.91% of the total liabilities during
the year 2015.

Reserves and stock options has been increased was in the year 2016 which is Rs.109711.81
comparing to the previous year and the percentage shows increase by 13.71%.

During the year 2015-2016, the shareholders fund amount to Rs.104292.34, it has been increased
to the amount of Rs.115267 and the percentage increased was 14.40% in 2016.

48
 1.4 CASH FLOW STATEMENT OF PALM GREEN HOTEL & RESORT FOR THE
YEAR ENDED 31.3.2017

Particulars 2016-2017
(In Rs.)
(A)CASH FLOW FROM OPERATING ACTIVITIES
Net Profit
226,74.86
Add: Lease Equalization Account
(91.85)
Provision for Taxation (Including Wealth Tax)
96,72.77
Add: Financial Expenses 322,55.78
633,79.55 956,35.33
Depreciation
45,80.23
Provision against Investments
1,44.64
Provision against Non - Performing assets
4,79.98
General Provisions on Standard Assets
31,61.69
Employee Stock Option Compensation Expenses
23.28
(Profit) loss on sale of assets
34.21
(Profit) loss on sale of Investments
(53,36.95)
Interest / Dividend Income
(22,00.38)
Effect of Foreign Exchange rates on Cash and Cash Equivalents,
0.18
net
OPERATING PROFIT BEFORE WORKING CAPITAL
CHANGES 965,22.21
Increase in Net Stock on hire 67,08.38
Decrease in Leased assets - net of sales (60,87.57)
Increase in Trade Bills purchased 15,44.60
Decrease in Net Investment in Lease (32.25)
Decrease in Loans and Advances (1465,04.17)
Increase in Other Receivables 13.29
Decrease in Bank Deposits (net) (1079,89.81)
Decrease in SLR Investments - net of sales (22,40.77)
Increase in Current Liabilities 32,87.01
Cash generated from Operations
Financial Expenses (619,43.37)
Direct Taxes Paid (709,48.53)
(90,05.16)
NET CASH FROM OPERATING ACTIVITIES (A) (2257,27.61)
B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (15,38.40)
Sale of Fixed Assets 96.09
Purchase of Investments (12677,85.28)
Purchase of Investments in Subsidiaries/Joint Venture (18,33.50)
Sale of Investments 12746,00.34
Interest Received 2.75
Dividend Received 21,97.65
49
NET CASH FROM INVESTING ACTIVITIES (B) 57,39.65

C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Debentures 3475,75.18
Debentures Redeemed (2686,00.00)
Increase (Decrease) in Long Term Borrowings 869,13.98
Increase (Decrease) in Fixed Deposits 154,84.84
Increase (Decrease) in Short Term Loans and Advances 417,96.83
Dividend paid (including Corporate Dividend Tax) (53,51.34)
NET CASH FROM FINANCING ACTIVITIES (C) 2178,19.49
D) Effect of Foreign Exchange rates on Cash and Cash
Equivalents, net (D) (0.18)

NET INCREASE IN CASH AND CASH EQUIVALENTS

(A)+(B)+(C)+(D) (21,68.65)

CASH AND CASH EQUIVALENTS AT THE BEGINNING

OF THE YEAR 48,39.35

CASH AND CASH EQUIVALENTS AT THE END OF THE

YEAR 26,70.70

COMPONENTS OF CASH AND CASH EQUIVALENTS

AT THE END OF THE YEAR

Current Account with Banks 13,50.13

Cash, Stamps and Stamp Papers on Hand 13,20.57
26,70.70

50
INFERENCES:

In the year 2016-2017, the operating profit before working capital changes show the profit
amount of Rs.96522.

The employee stock option compensation expenses of the Palm Green Hotel & Resort has shown
31,61.69 (Rs. in lakhs) during the year 2016-2017.

While the Net Cash from investing activities depicts Rs.5739.65 in the year 2016-2017.

There was a increase in net stock on hire during the financial year 2016-2017 of 67,08.38 (Rs. in
lakhs).

The financial year 2016-2017 depicts the Net cash from financing activities amount of
Rs.217819.49 shows upward profit in the company.

Cash and cash equivalents at the end of the year were Rs.4839.35 it shows that the company
position in the year 2016-2017.

51
5.5 REGRESSION ANALYSIS FOR SALES

Sales
Year X Rs XY X2
( in Lakhs )
Y
2015 ─1 90176.44 ─ 90176.44 1
2016 0 108277.62 0 0
2017 1 118189.37 118189.37 1
Total ∑x = 0 ∑y= 316643.43 ∑x y= 28012.93 ∑ X2 =2

∑Y=Na+b∑X

∑ XY = a ∑ X + b ∑ X2

Y=a+bX

3 a + 0 b = 316643.43 --------------- ( 1 )

0 a + 2 b = 28012.93 --------------- ( 2 )

Solving ( 1 ) and ( 2 ) We get,

a = 105547.81

b = 14006.46

When X = 2, Y2018 = 105547.81 + 14006.46( 2 )

Y2018 = Rs. 133560.73 ( in Lakhs )

When X = 3, Y2019 = 105547.81 + 14006.46( 3 )

Y2019 = Rs. 147567.19 ( in Lakhs )

52
INFERENCE:

The net sales during the year 2015 were 90176.44 (Rs. in Lakhs) which has been increased to
108277.62 (Rs. in Lakhs) during 2016 which also raised to 118189.37 (Rs. in Lakhs) during
2017.

The projection is made for the fore coming years 2018 and 2019 where the net sales would be
133560.73 (Rs. in Lakhs) during the year 2018 and the net sales during the financial year 2019
will be 147567.19 (Rs. in Lakhs.

53
CHAPTER - 6
CONCLUSION
AND
SUGGESTIONS

54
 FINIDNGS

 The Gross Profit Ratio shows that increasing in sales has maintained the companies profit
level. In the year 2015-2016, the percentage shows 20.29 it has been increased during the
year 2016-2017 to 27.37.

 The net profit ratio has been increased to 19.18 during the financial year 2016 – 2017 to
13.92 during 2015 – 2016 which indicates that there is an improvement in the operational
efficient of the business and it leads to the increase in the profitability of the firm.

 It has found that the return on equity during the year 2015-2016, the company shows
5.61% of ratio and it has risen to 6.80%. This is a clear indication of overall operation is
efficient.

 The Working capital in the year 2015-2016, the sales of the company is low at
Rs.666319.18 and it is increased to Rs.898497.54 in 2016-2017. It measures the effective
utilization of working capital.

 The capital turnover of capital employed in the financial year 2015-2016 it shows
Rs.533288.26 and during the year 2016-2017 it is increased to Rs.720052.92. It has
effective utilization of capital employed under the current year.

 Fixed asset turnover shows increase in sales of Rs.118189.37 comparing to the previous
year of Rs. 108277.62 and the firm should maintain this increasing trend in future also.

 During the year 2016-2017, the current ratio is 3.02% and it is more when compared with
previous year 2015-2016 is 1.36 %. So the short term liquidity of a concern, comparison
of current assets and current liabilities is inevitable.

55
 The debt equity ratio has shows 3.62% in 2015-2016 and it has been raised to 4.47%
during 2016-2017 which indicates that the company has increased over the years with
increase in shareholder funds as well.

 It is found that the shareholders funds had increased by Rs.16368.65 over the percentage
of 14.20 in comparative income statement analysis. It determines the profitability from
the shareholders point of view.

 The financial year 2016-2017 depicts the Net Cash from financing activities amount of
Rs.217819.49 shows upward profit in the company.

56
 SUGGESTIONS
The current ratio is improving rapidly so the company wants to keep an eye on the current assets
flow. The company has been suggested to reduce the expenditure as it increases every year.
Decrease in expenses will increase the profitability.

By over viewing the working capital turnover ratio it is clear that the company wants to utilize its
working capital efficiently that is the excess current assets should be adjusted according to
current scenario. Though the net profit shows it is increased but we found that the net profit ratio
has been decreased. So the company should consider increasing the sales in turn to increase the
actual profit.

The debt equity ratio of the company is also increasing. The company should focus on the debt
and long term funds which are utilized in the company. The excess cash flow should or can be
utilized in any new ventures if the company wishes to do.

57
 CONCLUSION

In the study of Financial Performance of Palm Green Hotel & Resort, it is clear that the
company’s financial performance is satisfactory. The company has stable growth and it shows a
greater efficiency in all the areas it works.

If the company utilizes its working capital then the company can go heights which it wanted to
achieve. The comparative income statement shows increase in the current year of net profit and it
depict the companies current profit position. To improve the efficiency the company will strive
for better performance and increase the market share the company.

The suggestions provided through the study will help the company to improve the operational
performance efficiently. The suggestions provided through the study will help the company to
improve the operational performance efficiently.

58
 REFERENCES

 Carlos Correia, David Flynn, Enrico Uliana & Michael Wormald, “Financial
Management”, 6th Edition, 5.1 -5.34.

 Chidambaram Rameshkumar, Anbumani N, “An overview on financial statements and

ratio analysis”,2006, Vol.1, p. 30

 George Foster, “Financial Statement Analysis”, 2nd Edition, 57 – 94.

 Greninger et al.(1996), Fundamentals of Financial Management, 5th Edition, 4.1-4.18.

 Jae K.Shim, Joel G.Siegel, Schaum’s Outline of Theory and Problems of Financial
Accounting, 1999, 279-298.

 John J.Wild, K.R.Subramanyam & Robert F.Halsey (2006), Financial Statement

Analysis, 9th Edition, 2-90.

 Jonas Elmerraji, “Analyze Investments Quickly with ratios”, 2005, 33-36

 Kennedy and Muller, “Analysis of Financial Statements”,1999, 1.3 – 1.34

 Khan M Y & Jain P K, “Financial Management”, 4th Edition , 2006, 6.1 - 6.81

 Pandey I M, “A Management Guide for Managing Company’s Funds and Profits”, 6th
Edition, 1 – 58

 Peeler J. Patsula, “Successful Business Analysis”,2006, 18-19

59
 Rachchh Minaxi A (2011), Introduction to Management Accounting, 3-88.

 Reddy T S & Hari Prasad Reddy Y, “Management Accounting”, 3rd Edition, 2008, 3.9 -
3.25

 Salmi, T. and T. Martikainen (1994), "A review of the theoretical and empirical basis of
financial ratio analysis", The Finnish Journal of Business Economics 43:4, 426-448.

 Susan ward, “Financial Ratio Analysis For Performance Check”, p.132

Websites:

 www.google.com

 www.palmgreen.in

 http://scholar.google.com

 www.managementparadise.com

60