‘SUMMER TRAINING PROJECT REPORT’

ON
“ANALYSIS OF FINANCIAL ACCOUNT AT MINDA CORPORATION
LIMITED”

SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE AWARD OF THE DEGREE
OF
BACHELOR OF BUSINESS ADMINISTRATION
Affiliated To: C.C.S. University, Meerut
Session: 2016-2019

INTERNAL GUIDE:
Mr. SANTOSH SHAH
ASSISTANT PROFESSOR
IMS, GHAZIABAD

EXTERNAL GUIDE:
Mr. AHUJA ARORA
ASSISTANT MANAGER ACCOUNT

SUBMITTED BY:
ARNAV RASTOGI
169359037
BBA – VIth SEMESTER

INSTITUTE OF MANAGEMENT STUDIES

(UNIVERSITY CAMPUS)
GHAZIABAD

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 STUDENT’S DECLARATION

This is to declare that this project report entitled “Analysis of Financial Accounting at Minda

Corporation Ltd..” is a record of genuine work done by me under the supervision of Mr. Ashish

Ahuja (Assistant Manager Account), ‘‘Minda Corporation Ltd..”, Institute’s project guide Mr.

Santosh Shah (Assistant Professor) in the partial fulfillment of the requirement for Bachelor of

Business Administrations of C.C.S. University, Meerut. I declare that this project is original and not

submitted to any university before.

Place:

Arnav Rastogi
Roll No.: 169359037
BBA-VIth Sem.

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 ACKNOWLEDGEMENT

My debts to those who have helped me in one-way or and I’m heavily indebted. I take this

opportunity to thank all of them. They are too numerous to mention individually. First and foremost I

would like to thank the almighty whose blessing passed the way for the successful completion of the

project.

It was a great honour to assign the project “Analysis of Financial Accounting at Minda
Corporation Ltd,” I express my sincere thanks to Mr. Ashish Ahuja - (Assistant Manager
Account) for giving me the opportunity to do training and to learn and upgrade my skills in this
esteemed company.

The making of any report calls for contribution and co-operation from many others besides the

individual alone. It is the result of meticulous effort put in by many minds that contribute to the final

report formation and this report is no exception. Several eminent people have valuable contribution

to this report through their inputs. I thank him for being my mentor, educating me about the working

and intricacies of the, the distribution network and innumerable other details. I hope this project

serves the purpose it was intended for and benefits the organization in as many ways as possible.

(ARNAV RASTOGI)

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 CONTENT

Chapter Index Page No.

Chapter 1. Introduction

Chapter 2. Company Profile

Chapter 3. Statement of the problem

Chapter 4. Objectives

Chapter 5. Research Methodology

Chapter 6. Data Analysis & Interpretation

Chapter 7. Conclusion

Chapter 8. Recommendation

Chapter 9. Bibliography

Chapter 10. Audited Report – 2014-2018

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 INTRODUCTION

 The Project Report “Financial Accounting System and Analysis of Financial

Strength, A Study of MINDA CORPORATION LTD.” for MINDA
CORPORATION LTD. Has been divided into two major parts, in first part, a
study about the proves of different functions in Finance Dept., has been made
whereby all those functions and their inter-relation with other departments has
been explained. In second half of the report, performance analysis of MINDA
CORPORATION LTD. is done which is divided into two parts; Financial
accounting system, ratio analysis, in ratio analysis, long term and short-term
liquidity position of the Company along with the cost structure has been studied
for a period of five years of Financial Statement, has been calculated so as to
provide a simple view of fluctuations during past years.

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 COMPANY PROFILE

1. Background/Company profile/Activities
Founded in 1958 by Shri SL Minda, UNO the Minda Group today is one of the leading Tier 1
Manufacturer and Supplier of automobile components with a net sale turnover of Rs. 1857.08
Crores and employs approx. 3500 people India-wide & Overseas.
The group is a major supplier to OEM's both in India and overseas. The group companies are
accredited with quality and environment certification and have collaborations and strategic
alliances with international manufacturers

 ASHOK MINDA GROUP MANUFACTURES DIFFERENT LINES OF

AUTOMOBILE PARTS:

 Brake Shoes
 Clutch Plates
 Control and Speedometer Cables
 Electronic and Mechanical Security Systems
 Starter Motor and Alternators

PROFILE:
For over five decades, MINDA has been a major presence in India's automobile industry.
These fifty years have been interspersed by a number of technological innovations that have
gone on to become industry standards. For the technological edge, they have a dedicated
R&D facility and collaborations with the pioneers and leaders of the Automobile Industry.
For assimilating the latest technologies, Minda has entered into strategic alliances and
technical collaborations with leading international companies. This has provided Minda with
the cutting edge in product design and technology to meet strict international quality
standards. The Groups' companies are accredited with QS 9000 and ISO-14001 certification
from TUV, GERMANY. We are one of India's leading manufacturers of Security systems,
wiring harnesses, Couplers & Terminals and Instrument Clusters, Die Casting, Polymers
catering to all major two & four wheeler vehicles manufacturer in India.
The products are well accepted worldwide both with O.E.M's and the after market.
The present set up of the company is as under:-

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SUB-DIVISION OF FINANCE DEPARTMENT

 PURCHASE
 SALES
 COLLECTIONS
 SALARY
 BANK
 MISCELLANEOUS

 PURCHASE
Process:
Materials which are consumed in the process of production are divide in three categories:
a) Regular items: items whose minimum, maximum & reorder level of purchase is maintained by
the stores.
b) Temporary items: these items are required only when the consumable deptt. Demand for the
same.
c) Essential items: these are items which are required less often but their stock is to be
maintained because are of critical nature in production process.

In case of regular & essential items stores checks daily the stock level and if the items reaches
reorder level then indent is raised by stores which is passed on to respective consumable deptt.
Where it is signed by departmental head and then it is forwarded by stores to purchase deptt. In case
of temporary items indent is raised by concerned deptt. And is directly forwarded by them to the
purchase deptt.
After this, Purchase Deptt. Invites quotations, which are compared and the one offering materials at
the most economical terms is placed with an order.
When materials reach premises a gate pass is provided to the lorry driver who takes materials to
stores where testing of material is done.
If material is up to mark then it is accepted and stock of goods is increased by passing journal entry.
From stores following documents reaches finance deptt.
Goods Receipt Note which is prepared by Stores when material is received by it.
Challan/Bill accompanies G.R.N. which specifies the quantity and value of goods.

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A weighing report by the party.
A weighing report by the factory which is considered as final for payment of bill.
Inspection report of stores whereby the quality of goods and the percentage of impurity present is
mentioned, which is taken into consideration by finance Deptt. For determining the value of goods.
All these documents are checked and purchase entry is finalized by crediting the party with amount
ascertained after providing deductions on account of impurities and tax deducted at source.
Through Intra-net, Finance Deptt. Can have access to the values and specifications of the materials
which are entered by the Stores and if any rectification in the value entered by Stores is to be done,
then it is analyzed by Finance Deptt.

 SALES
The Marketing Unit of MINDA located at NOIDA accepts the order for supply of products and sends
dispatch advice to the manufacturing units, Sales Deptt.
Production Planning Deptt. Collects information regarding the stock of finished goods and the
production to be done so as to meet the requirement of parties. On the basis of information so
gathered, a production schedule is prepared which helps in making the requirement of party in a time
bound manner. Information of production schedule is also sent to sales deptt. So that they may
handle any query of the party regarding its consignment.

Records Maintained by Sales deptt.

Party Purchase order: This is an order placed by Party for purchase of goods at the Marketing
division of MINDA. This order is remitted in original to the organization. This order acts as a base
against which all the dispatches of goods are done.
Order Acceptance: Whenever an order is placed with first of all a feasibility report is prepared as to
whether it will be appropriate to accept the order or not. If resources allow for the same and the order
is of required minimum quantity, then it is accepted and a record of same is sent to MINDA
Industries for reference purpose. On the order acceptance, it is mentioned the code of fans required,
party code, date and terms & conditions with address of the party.

Dispatch Report Record: It is a ledger in which the names of transporters through which the
goods are sent and the name of the party to whom goods, are sent is recorded on daily basis. All the
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 dispatches done during the day are numbered against the party and the transporter.
Stock Ledger: Record of stock of different type of finished goods at the warehouse is maintained by
the Sales Deptt. in stock ledger entry is done on daily basis according to the packed material which
comes in, and the finished goods which are transported directly from the warehouse. Any
change in stock is entered into stock card daily, next day the entries at the start of the day, are
recorded in the stock ledger. Thus Sales Deptt. Has the responsibility of stock in the warehouse.
Personal Ledger Account: Balance of excise duty payable is maintained on daily basis and is
presented before Excise Office at the end of the month. The ledger contains details about the value of
material being sold and the amount of excise duty payable on the same. Excise duty is also payable
on any finished goods, date transferred from manufacturing unit to warehouse situated outside the
premises. Excise duty is paid at the end of the month, reconciliation of sales for which duty is
payable is done. If excess excise duty based on average sales of previous months is paid, then the
credit for the same can be calculated in future payments.

Cenvat Credit: CENVAT credit is a credit in respect of central excise on inputs purchased for the
manufacture or duty paid in relation to the manufacture of the final product.

Invoice: At the time when billing is done, six copies of invoice are prepared, one copy is retained by
Sales Deptt. as an excise record, one copy, is given to the driver as a gate pass, one copy is mailed to
the purchaser, the other is given to the transporter for his record and one extra copy is maintained for
record, one copy goes to the Accounts Deptt. It contains details regarding code of finished goods;
order no. address of party, value of goods, quantity etc.

 Transporter’s Freight Bill: Whenever finished goods are transported from Factory to the
party, the transporter presents a bill for the payment of his due amount. The bill either is in
the form of “to be billed” or in the form of “to be paid.”
In case of “to be billed”, freight amount is added to the invoice and the payment is made to
the transporter at the time of dispatch of goods, the amount which is paid is usually restricted
to 50% of freight. The balance payment is done to the transporter when the proof of delivery
of goods is shown by him.
In case of “to be paid,” the full amount of freight is not added to invoice, instead full payment
is made to the transporter only when the goods have been finally delivered and endorsement

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 of the receipt of goods by the purchaser is presented by the transporter.

The Finance Deptt. Receives following documents from Sales Department.

 Invoice: Invoice contains details of the finished goods, their value, code name of the
purchaser, freight, taxes etc.

 Transporter’s bill: It contains details of the destination, the quantity of goods being
transported and the party’s name along with the freight.
The main function of Finance Deptt. Is to confirm the same for the day. Until the Finance
Deptt. Finalizes the transaction, the sale is not deemed to have taken place.
Sales Deptt. Is connected with Finance Deptt. Through Intra-net. Every time a transaction
takes place all the requisite information is fed into the program that can also be accessed by
the Finance Deptt.
Accounts of different parties to whom sale is made, is maintained by the Finance Deptt.
Different codes have been assigned to different parties when the transaction is finalized by
the Sales Deptt. Then automatically the party’s account is debited with sales.

 Collections:
There is a centralized system of collecting sales amount. Sales made by any unit of MINDA, the
amount is not directly collected by the unit concerned instead all the payments are received as the
MINDA Head Office which is then credited to the respective accounts of the concerned units.

Invoice-wise: Under invoice-wise collection system, the total amount of sales is received directly
through cheque for particular Invoice No. and the Head Office is informed of the receipt of amount
from the party.

Advance Payment: In certain cases, the party pays advance for supply of Product for a particular
period of time. The conditions of payments are controlled by the contract between the party and unit.

Mix of Advance and Credit: Sales value can also be realized in a mix of advance and credit. In

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such a case the party pays a percentage of amount in advance and the rest is paid after the credit
period is over which depends upon the agreement between the parties.
Hundi: Hundi is a negotiable instrument. It is drawn by MINDA Industries Ltd. upon its debtors for
the amount due. Hundi is prepared at the end of each month for the sales that have taken place during
the month. In the hundi the details of each sale are specifically mentioned with the invoice no.,
amount of sale and date. After hundi has been prepared, it is sent to the Head Office along with
supporting documents for the realization of amount due. When the Head office receives the same, it
forwards the documents to the bankers of the party concerned, after which the bankers inform the
party and after the party has checked the original documents, it directs the bank to release the
payment.

Letter of Credit: Letter of credit account is opened by the party with bank. There is a limit to which
bank can pay on behalf of party. The bank charges interest for this service on the amount which has
debited to the buyer. When the payment is demanded on Letter of Credit, it is immediately paid off.
Letter of Credit is forwarded to the party by the Accounts Deptt. This letter contains specification of
Invoice, Date & amount against which payment is to be received. The L/C is sent along with
supporting documents to the banker of the party after which the bank confirms authenticity of the
documents and release payment in favour of seller. Bank sends a statement specifying the amount
released in favour of seller to the party. Collection is usually done by the Head Office after which
respective account of seller is debited.

 Records Maintained by Finance Deptt:

Sales Journal: Whenever sale is made against dispatch order by the Sales Deptt. And
invoice is prepared for sales value and the quantity of the product. The name and address of
the party is also mentioned on the Invoice. When this invoice is prepared, data entry relating
to transaction is passed by Sales Deptt. In which the name of party, their address, the no. of
product being sold, their value per thousand, tax, excise duty etc. are mentioned. After this
one copy of Invoice along with freight bill reaches Finance Deptt. The accounting system
which is linked with Intra-net passes information fed by Sales Deptt. To finance Deptt.
Where that information is checked on screen. All the particulars which have earlier been fed
are scrutinized and when the information is found to be correct, then the transaction is
finalized and the sale is assumed to have taken place. After this the balance of respective
debtors is automatically debited and it shows renewed balance.
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Bills Receivable Outstanding: A B/R outstanding account for all the sales is maintained
which is updated daily. If there is any sale then the balance of this account increases, on the
other hand on the receipt of amount due, the balance is reduced.

Bills Receivable Ledger Account: In this account only Sales are recorded on daily basis,
any receipt of amount due is not updated. This account shows the balance of total sales
that have taken place upto date. This account is only up dated at the end of the month. When
a statement is generated and all the receipts fork the month are updated, thereby showing
reduced balance.

Aging Report: Every party to whom sale is made is provided with credit day’s which
normally are of duration of 45 days and may vary for contracts. Aging report shows the no. of
days, amount has remained outstanding. Reminder of collection of amount is sent to party on
the basis of this report and Interest is also charged on amount outstanding according to
contract.

Freight: Freight’s are fixed according to destination, with each sale invoice bill is prepared
by sales department which along with transporter’s freight bill are forwarded to finance
department. At the time billing was done by sales deptt. Particulars of invoice and freight bill
are entered by it in the software; this information is passed online to the finance deptt.
Finance Deptt. Checks and finals particulars after matching same with invoice forwarded to
it. Finally the account of transporter concerned is credited.

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  SALARY
LEAVE:
(A) CASUAL LEAVE: Casual Leave which can be availed by employees per year is up to a
maximum limit of 07 days. Leave is to be sanctioned by respective departmental head.
(B) EARNED LEAVE: Employees are entitled to get the respective salary for the period of leave in
case of earned leave.

Types of Earned leave and their respective limits are as follows:

Management Staff: Management staff is provided Earned Leave at a flat rate of 26 days leave per
year.

 Workers: Total no. of Earned Leave which can be availed by Workers is calculated as
follows:
Earned Leave = {(Total days worked + Rest + Leave availed) / 15 per
year.}
 Clerical: In case of clerical staff, the total leave which can be availed by them is calculated
on the same line as that of workers.
Earned Leave = {(Total days worked + Rest + Leave availed)/12.5 per year.}

(C) SICK LEAVE: Provisions relating to sick leave are as follows:

 Salary below Rs. 77500 per annum;

 Covered by E.S.I. – No leave.
 Salary above Rs. 77500 per annum.
 Not covered by E.S.I. – 11 days leave per year.
INCENTIVE:
Incentive is that extra payment which is made to workers for their increased efficiency. The basic
purpose of incentive payment is to promote workers to work harder and reduce wastage thereby
contributing their efforts resulting in economies of scale. Incentive helps boosts the morale of
employees by rewarding efficient workers along with the clerical staff which is in direct touch
with those workers.

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 Incentives are calculated on the basis of production/machine efficiency. Incentive is
provided at two levels:

 Monthly Incentive: Here the total production of the month is calculated and the percentage
yield is found out. If the total percentage yield for the month is higher than the minimum
stipulated yield for incentive calculated, the employees as well as the clerical staff is
rewarded for the same.
 Daily Incentive: In this case daily targets are fixed by Production Deptt. And if there is
higher efficiency than stipulated then the workers as well as the clerical staff are rewarded
according to slabs of efficiency on which their output falls. Daily efficiency in production is
calculated by Costing Deptt. From the data which is provided to it from the Production
Planning Deptt.

The amount of incentive calculated is then forwarded to Personnel Deptt. Where the recording of
incentive amount is done and is clubbed with salary.

 Every employee of organization is provided with a punch card which is punched every time
at the gate when an employee enters or leaves organization. There by recording his hours of
work. Thus salary is calculated on the basis of this data. Report of employees’ attendance is
generated daily and one copy is sent to concerned department where employees work and it is
signed by the departmental head.
One summary copy of attendance is maintained by Personnel Deptt. Which is signed and is
kept for calculation of monthly salary along with overtime payment and providing for
appropriate deductions from salary At the end of the month when salary has been calculated
and is ready to be disbursed, the employees who have their account with bank, are credited
their salary in their bank account and those who do not have their account in bank, are paid
their

 BANK

Two types of transactions take place through bank:

 Receipt of amount on sale

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  Payment of expenses.

RECEIPT: The amount on sales is not directly received by the unit. The procedure followed in this
case is given as follows:
Sale is done according to dispatch advice of the Head Office, which is confirmed by Finance Deptt.
By passing journal entry for the same.
Debtors are provided with credit days which can range from 45 to 60 days depending upon the
contract.
Ageing report of the debtors is prepared through which total amount outstanding as on particular date
can be known.
Information is sent to the Head Office about the debtors whose amount becomes due for payment.
Head Office initiates the process of realizing amount due by sending reminders and giving details of
the invoice and the amount.
Amount realized is credited to the account of Head Office.
Finally amount due against invoices of the unit is credited to it by transferring the amount.

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PAYMENT: The procedure for payment of expenses through bank is as follows:
After following the proper process of purchase from Stores and passing on to Purchase Deptt. Where
order for purchase is made, goods are received.
Relevant documents reach to Finance Deptt. After the goods have been entered by Stores.
Ledger entry for purchase is passed.
Month-wise purchase records are maintained and a statement is prepared, showing due date of
payment.
According to the bills payable ledger, every day the due date is checked.
On due date, cheques are drawn in favour of party to whom the amounts become due.
The cheque is sent to the party along with the details of the bills against which the payment is done.
Bank charges on Drafts are borne by the party.

Reconciliation of Bank Balance:

Bank books are maintained by MINDA in which all the transactions relating to bank are passed.
Some times during the transaction period, it happens that cheques drawn by MINDA are not
presented to bank or the cheques deposited by MINDA are not cleared by bank within time some
times bank charges or interest earned are not recorded in bank book. For the purpose of reconciling
the bank balance with pass book balance, a bank reconciliation statement is prepared at the end of the
month, in which all those transactions during the month which were not taken into account are taken
cognizance of.

Cash Payments:
Payment whose value is less in monitory are paid in cash. The Cashier keeps a balance in his till to
meet the expenses for the week and he is reimbursed with cash expended at the end of the week.
For cash payment bill is presented to Cashier along with supporting documents, e.g. in
case payment is made in cash to a transporter, he will present bill along with proof of delivery i.e. a
Good Receipt Note. The payment is authorized by Asstt. General Manager.

 MISCELLANEOUS:
This function is created to cater miscellaneous expenditure of the organization. These expenditures
can either be directly related to manufacturing or not. Items dealt with this function can be purchase
of office equipments, stationery or payment to employees and recording of E.P.F. /P.F. contribution.
The expenditure usually are of sundry nature.

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Steps taken:
Before any kind of expenditure gets recorded here it follows a series of steps which are explained
below:
Whenever any Department of organization needs useable items e.g. stationery, tube light or other
electrical equipments and sundry items etc. it raises an indent or requisition form in which request is
made for acquiring the item. The indent specifically mentions the quality and quantity along with
code no. of item required.
After indent has been raised, it has to be authorized by departmental Head conforming the need. This
indent then gets the sanction of Vice President of organization. When Vice President Grants sanction
the process proceeds further. One copy of indent is retained by user deptt. & the other goes to
Purchase Deptt.
Purchase Deptt. On receiving the indent specifying the quantity and quality of material required,
invites quotations from interested parties through personal contacts or by an advertisement.

When Purchase Deptt. Receives quotations along with terms & conditions it scrutinizes those
statements and prepare a comparative statement of cost offered by different parties.
The party offering lowest cost and with reasonable conditions is selected and an order is placed.
Some times before placing an order the Purchase head consults with Finance head to arrive at a
consensus for placing order.
When the useable arrive at premises a gate entry is passed whereby description of goods, date & time
of arrival are noted.
Useable goods are then passed to Stores, where the quality and quantity according to indent raised is
checked and a Goods receipt Note is prepared. An entry is also passed in Stores Ledger Account.
Thereafter bill of the goods purchased along with transport bill reaches Account Deptt. These are
accompanied by a copy of indent Goods Receipt Note and the Inspection Report.
The entry for purchase which was asked by Purchase Deptt. Is confirmed by Accounts Deptt.
Through Intra-net and purchase is finalized by crediting the party.

Ledgers Maintained:
The total system of recording entries is through computers, which are connected through Intra-net.
After entries have been passed, vouchers are prepared and they are accompanied by supporting
documents like Bills, challan etc.

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General Ledger: Any entry relating to expense is passed in general ledger from where they are
transferred to respective ledger account.

Expense Ledger: All the expenses are diverted to this account. At the end of the month, a statement
is prepared showing the expenses for the month.

Bills payable Ledger: When-ever a purchase of sundry/miscellaneous items is done; proper

recording of transaction is passed. If the amount is to be paid in future, then it is credited to this
account which when becomes due is presented for payment.

Miscellaneous: For all miscellaneous items whose monetary value is less, on receiving the bill, entry
is passed in miscellaneous account and voucher is prepared. Bill is forwarded to person dealing with
bank and cheque is prepared which after being signed by authorized person, is presented for
payment.

Travelling: Travelling expenses are reimbursed up to some extent based on company’s rules. The
person who has to get his expenses reimbursed, fill in application form indicating amount to be
reimbursed along with supporting documents, if the amount claimed is within limits prescribed then
an entry is passed for that expense, after it has been sanctioned by Account head and then payment is
made through cheque.

Advance salary: If employees seek advance salary then they present the request in application to the
Personnel deptt. Personnel Deptt. After considering the request forwards it to Vice President of
organization to get the sanction, after the request has been approved it reaches Accounts Deptt.
Where entry relating to advance salary is passed in ledger maintained for this purpose and cheque is
issued which after being signed by Accounts head is presented for payment.

Loan Ledger: Maximum amount of loan which can be availed by an employee is Rs. 8000 p.a.
Before another loan can be sanctioned, the prior loan should have been set off against salary.

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The process of sanctioning loan is as follows:

The person seeking loan has to fill an application form specifying the amount of loan. Then the
Accounts Deptt. Checks the account of the person concerned if the prior loan has expired or not. If it
has expired then the application is signed by departmental head of the employee, after which the
application finally reaches Accounts Deptt. And an entry is passed for the amount of loan passed.
Thereafter a cheque is issued to the employee concerned.

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 PROBLEMS OF STUDY

 The current system slow and incapable of handling large number of transactions at a time
 FLEXIBLE: The system is getting obsolete and addition of new features and incorporating
new functionality is impossible.
 PRIMITIVE TECHNIQUES: The data between the offices is sent either manually or
through floppies. It is a very primitive way of data transmission and the chance of data
corruption and loss is very high. Moreover this process delays the data consolidation and
analysis activities.
 DOS BASED SYSTEM: The application system is developed using DOS based FoxPro. As
a result the visual effects are poor and the system lacks graphical interfaces. The reports are
text based and lack richness in quality and presentation capabilities. The commands are using
keyboard combinations and no mouse support is incorporable.

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OBJECTIVE

17
 OBJECTIVE OF STUDY

During the project at MINDA CORPORATION Ltd.’ Finance Dept. the project undertaking by me
was “Financial Accounting System and Analysis of Financials, A Study of MINDA
CORPORATION LTD.”
The objective of my study was:
 To understand the functioning of Finance Dept. as a whole and its components
 To analyze the performance of the company for a period of five years in particular.
 To have an understanding about the different ratios and their applicability to enhance my
understanding of the organization.

My study is divided in two parts:

Part ‘A’ -
It deals with mechanical functioning of Finance Dept.
Part ‘B’ -
It deals with ratio analysis of financial statement of MINDA CORPORATION.

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 RESEARCH
METHODOLOGY

19
 RESEARCH METHODOLOGY

RESEARCH DESIGN

As the objective of this report was to study the accounting system as well as performance of the

organization, the research for the first part was design in such a manner so as to start from the

originating function and then researching the finance department thereby covering the whole process.

For second part, financial statement of the organization was analyzed through the show interrelation

between different items.

DATA COLLECTION METHOD

Data for the purpose of ratio analysis, to show an interrelation between different items of the balance

sheet so as to arrive at a meaningful conclusion and to analyze the position of the company has been

calculated through secondary sources of data i.e. that is audited financial statement (balance sheet

and profit & loss account) of the company.

SAMPLE SIZE

Data for the purpose has been collected form the audited financial statements for a period of five

years i.e. from 2014 to 2018.

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 DATA ANALYSIS & INTERPRETATION

DATA ANALYSIS

After collection of data different ratios have been calculated to show an interrelation between

different items of balance sheet and to draw a meaningful inference. Ratios have been presented

graphically, on the basis of which they have been analyzed year to year giving results for their

fluctuations.

FINANCIAL STATEMENT: ANALYSIS AND INTERPRETATION

INTRODUCTION:
The Goal of financial analysis is to assess the performance of a firm in the context of its stated and
strategy. There are two principal tools of financial analysis: ratio analysis and cash flow analysis.
Ratio analysis involve assessing how various line item in a firm‘s financial statement relate to one
another. Cash flow analysis allows the analyst to examine the firm liquidity and how the firm is
managing its operating investment and financing cash flows.
Financial analysis is used in s varity of contexts. Ratio analysis of a company’s present and past
performance provide the foundation for making forecasts of future performance. Financial
forecasting is use ful in company valuation, credit evaluation financial distress prediction, security
analysis, merger and acquisition analysis, and corporate financial policy analysis.

TECHNIQUES OF FINANCIAL ANALYSIS

A financial analyst can adopt one or more of the following techniques / tools of financial
analysis.

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FINANCIAL ANALYSIS TECHNIQUES

 RATIO ANALYSIS
 CASH FLOW ANALYSIS
 FUND FLOW ANALYSIS
 TREND PERCENTAGE
 CVP ANALYSIS
 COMMON SIZE FINANCIAL STATEMENT
 COMPARATIVE FINANCIAL STATEMENT

22
 ANALYSIS

Meaning:
The value of a firm is determined by the its profitability and growth . the firm’s growth and
profitability are influenced by its product market and financial market strategies . The product
market strategy is implemented through the firm’s competitive strategy, operating policy and
investment decision. Financial market strategies are implemented through financing and dividend
policies.
Rational analysis is widely used tool of financial analysis. It is defined as the defined as
the systematic use of ratio to interpret the financial statement, so that the strength and the weakness
of a firm as well as its historical performance and current financial condition can be determined. The
term ratio refers to the numerical or quantitative relationship between two variables. This
relationship can be expressed as percentage, fraction and proportion of numbers. These alternative
methods of expressing items which are related to each other, are for purpose of financial analysis
reffered to as ration analysis.
The rationale of ratio analysis lies in the fact that it makes related information
comparable. The single figure by itself has no meaning but when expressed in terms of related figure,
it yields significant inferences.

TYPES OF RATIO
The analysis of performance of minda Industries Ltd., has been done on the basis of following
ratios:
1) LIQUIDITY RATIO: The importance of adequate liquidity in the sense of the ability of
firm to meet current short term obligations when they become due for payment can hardly be
overstressed. The liquidity is a prerequisite for the very survival of the firm. The short term creditors
of the firm are interested in the short term solvency of the firm, but liquidity implies form the view
point of utilization of the funds of the firm and funds are idle or they earn very little. A proper
balance the two contradictory requirements that is liquidity and the profitability is required for
efficient financial management.

The ratios which indicate the liquidity of the firm are;

i) Current ratio,

23
 ii) Quick ratio/Liquid ratio
iii) Absolute liquid ratio/super quick ratio

2) CAPITAL STRUCTUIRE RATIO/SOLVENCY RATIO:

The second category of financial ratios is leverage or capital structure ratios. The long term
creditors would judge the soundness of a firm on the basis of the term financial strength measured in
terms of
ts ability to pay the interest regularly as well as repay the installment of the principal on due dates or
in one lump-sum at the time of maturity. The long term solvency of a firm can be examined by using
leverage of capital structure ratios. The leverage ratio may be defined as financial ratios which throw
light on the long term solvency of a firm as reflected in its ability to assure the long term creditor
with regard to (I) periodic payment of interest during the period of loan and (II) repayment of
principal on maturity or in predetermined installments at due dates. Ration included in this category
are:
i) Debt equity ratio
ii) Shareholder Equity ratio
iii) Capital gearing ratio
iv) Funded det to total capitalization ratio
v) Equity ratio
vi) Solvency ratio
vii) Fixed assets to net worth ratio
viii) Fixed assets to total long term fund
ix) Current assets to equity fund ratio

3) ACTIVITY RATIO/TURNOVER RATIO

Activity ratios are concerned with measuring the efficiency in asset management. These
ratios are also called efficiency ratios or asset utilization ratio. The efficiency with which the
assets are used would be reflected in the speed and rapidity with which assets are converted into
sales. The greater is the rate of turn over or conversion, the more efficient
it the utilization, other things being equal. For this reason such ratios are also designated as turn
over ratio. Turn over is the primary more for measuring the extent of efficient employment of
assets by relating assets to sales. Depending upon the assets, there are various types of activity
ratios:
I. Inventory turnover ratio
24
 II. Inventory conversion period
III. Debtors turnover ratio
IV. Average collection period
V. Creditors turnover ratio
VI. Average payment period
VII. Working capital turnover ratio
VIII. Fixed asset turnover ratio
IX. Sales to capital employed

4) PROFITABLITY RATIO
Profit is the difference between revenues and expenses over a provide of time. Profit is the
ultimate output of a company, and it will have no future it is fails to make sufficient profits.
Therefore, the financial manager should continuously evaluate efficiency of a company in terms of
profits. The profitability ratios are calculated to measuring the operating efficiency of the company.
Besides management of the company, creditors and owners are also interested in the profitability of
the firm. Creditors want to get interest and repayment of principal regularly. Owners want to get a
required rate of return of their investment. Profitability ratios which have been considered are as
follows:
a. Gross profit ratio.
b. Net profit ratio.
c. Expenses ratio.
d. Material cost ratio .
e. Operating cost ratio.
f. Depreciation ratio.

Type of Ratios:
(I) Financial Ratio:
A) Liquidity Ratio:
1. Current Ratio
2. Quick Ratio
3. Absolute Quick Ratio.
B) Stability Ratio:
1. Fixed Assets Ratio
2. Inventory Ratio
25
(II) Solvency Ratio/Capital Structure Ratio:
1. Debt Equity Ratio.
2. Funded Act to Total Capitalization ratio.
3. Equity Ratio
4. Solvency Ratio
5. fixed assets to Net worth ratio.
6. fixed assets to total long term fund
7. Current Assets to Equity fund ratio.
8. Share holder Equity Ratio.
9. Capital gearing ratio.
(III) Activity Ratio:
1. Inventory Turn over ratio
2. Inventory conversion period.
3. Debtors Turnover ratio
4. Average collection period
5. Creditors Turnover Ratio
6. Average Payment period.
7. Working capital turnover ratio.
8. fixed assets turnover ratio
9. Sales to capital employed.
(IV) Profitability Ratio:
1. Gross Profit Ratio
2. Net Loss Ratio
3. Expenses Ratio
4. Material Cast Ratio
5. Operating Cast Ratio
6. Depreciation Ratio

26
 LIQUIDITY RATIO

CURRENT RATIO:

The current ratio of the firm measures its short term solvency that is its ability to meet short

term obligations. As a measure of short term/current financial liquidity, it indicates the Rupees of

current assets available for each rupee of current liability. It is calculated as follow:

Current ratio = Current assets

Current liabilities

Current assets = Cash & Bank balances+ Marketable

securities + Inventory + Debtors + Bills
receivable.

Current liabilities = Trade creditors + Bills payable + Bank Credit + Provision for taxation +
Dividents payable + Outstanding expreses.

Year 2014 2015 2016 2017 2018

Ratio 2.05 2.2 2.01 2.19 2.11

CURRENT RATIO

2.3
2.2 2.19
2.2
VALUE

2.11
2.1 2.05 Ratio
2.01
2
1.9
YEAR

ANALYSIS:

 The higher the current ratio, the larger is the amount of Rupees available for current

liabilities.

 Conventionally a current ratio of 2:1 is considered satisfactory.

27
  As can be seen form the data, the firm is having enough liquidity to meet its current liability.

 This ratio indicates that even if there is 25% shrinkage in current assets, the firm will be able

to meet its current liabilities.

 Reason for increase in current ratios was due to increase in current assets and decrease in

current liabilities.

 In year 2016, there was decrease in current ratio because of proportionately higher decrease

in current assets.

 Consequently in 2017, current assets increase because of which current ratio also increase.

 In 2018 current assets increased further.

 From 2018 onwards there was increase in current ratio because of constant increase in value

of current assets which was higher than compared to increase in current liabilities during that

period.

 Although the ratio has declined in 2018, but still it is above the comfort level.

QUICK RATIO:

Quick ratio measures a firm’s ability to convert its current assets quickly into cash in order to

meet its current liabilities. Thus it is a measure of quick or acid liquidities.

The acid ratio is the ratio between quick current asset and current liabilities and is calculated

as follows:

Acid Test ratio = Quick assets

Current liabilities.

Quick asset = Cash & Bank balances + Short term marketable securities + Debtor receivable.

Current liabilities=Current liabilities & Provisions

28
Year 2014 2015 2016 2017 2018

Ratio 1.50 1.70 1.64 1.90 1.79

QUICK RATIO
1.9 1.79
2 1.7 1.64
1.5
1.5
VALUE

1 Ratio
0.5
0
YEAR

ANALYSIS:

 This ratio is a more accurate measure of liquidity of a firm since it measures only liquid

assets on hand.

 This indicates the proportion of current assets which can be readily converted into cash to

meet current assets which can be readily converted into cash to meet current liabilities.

 Quick ratio of 1:1 is considered satisfactory as a firm can easily meet all current claims.

 Quick ratio has shown a fluctuating trend with alternate increase and decrease in the ratio

with quick ratio being highest in 2010 when the firm at the highest quick asset balance to

meet current liabilities.

 On an average the firm has optimum quick ratio to meet its obligation.

 The minimum of liquid assets as a percentage of current assets is around 70% on an average.

29
Absolute Quick Ratio/Super Quick Ratio:

This is a variation of quick ratio. The ratio is calculated as follows:

Absolute liquid ratio = Absolute liquid Amts.

Current Liabilities

Absolute Liquid assets = Cash+Bank+Short Envestment+Marketable securities.

Year 2014 2015 2016 2017 2018

Ratio 0.80 0.70 0.60 0.40 0.30

SUPER QUICK RATIO

1 0.8
0.8 0.7
0.6
VALUE

0.6 0.4
0.3 Ratio
0.4
0.2
0
YEAR

ANALYSIS:

1. Absolute liquid ratio is the variation of quick ratio.

2. The ratio is more accurate measure of liquidity of a firm since it measures only liquid assets

on hand.

3. This indicates the proportion of C.A. which can be quickly converted into cash to meet C.L.

4. A&R of 0.5:1 is corridued satisfactory as a firm can easily meet all current claim.

5. A&R is showing a during trend.

30
 6. The ratio was maximum in the year 2016, which is 0.80.

7. And the ratio was minimum in the year 2018, which is .30

STABILITY RATIO:

These ratios help in ascertaining the long term solvency of a firm which depends upon three factors:

1. Whether the firm has adequate resources to meet its long term funds requirement.

2. Whether the firm has an appropriate debt equity mix to raise long term funds.

3. Whether the firms earns enough to pay interest and installments of long term loans.

FIXED ASSETS RATIO:

This ratio is calculated as follows:

Fixed Asset Ratio = Fixed assets/Long term funds

Long term funds = Share holders fund + Loan fund

Fixed assets = Gross block – Depreciation

Year 2014 2015 2016 2017 2018

Ratio 0.43 0.39 0.33 0.27 0.24

FIXED ASSETS RATIO

0.5 0.43
0.39
0.4 0.33
VALUE

0.27 0.24
0.3
Ratio
0.2
0.1
0
YEAR

31
ANALYSIS:

 The ratio is less than one which shows that a part of working capital is financed
by long term funds.

 Fixed asset ratio has kept on declined over a period of time.

 The reason for declining the ratio is that over the period of time, depreciation
and gross block has increased as long term funds, have also increased over that
period.

 From the year 2015 to 2016, the ratio declined heavily because of
proportionately higher increase in long term funds.

 Same was the case during the year 2016 and 2017.

 In the year 2018 gross block of fixed asset showed very less variation which
means that additions were less.`

INVENTORY RATIO:

This ratio helps in estimating the money which is blocked in inventory. The ratio is calculated as

follows:

Inventory ratio = (Inventory/ Current assets) x 100

Current assets = Current assets + Loan and Advances

Inventory = Balance of inventory at the end of year

Year 2014 2015 2016 2017 2018

Ratio 35.0 47.4 43.83 41.88 44.75

32
 INVENTORY RATIO
47.4 44.75
50 43.83 41.88
40 35
VALUE

30
Ratio
20
10
0
YEAR

ANALYSIS:
 This ratio indicates percentage of inventory to total current assets and gives an idea of
how much money has been blocked in carrying inventory.

 From the ratio, it can be inferred that for four years i.e. 2015, 2016, 2017 and 2018, the
ratio of inventory was above 40% which is a high ratio and indicates slow moving
inventory.

 This ratio was highest in 2015 when sales were lowest.

 During the year 2016, the ratio was below 40% which shows that during these years sales
were bit higher and the inventory was low.

 During the year 2017, the ratio was lowest indicating highest sales and proper
management of inventory, so as to minimize the amount blocked.

33
 CAPITAL STRUCTURE RATIO

DEBT EQUITY RATIO:

Relationship between borrowed funds and owners’ fund is a popular measure of long term

financial solvency of a firm. This ratio reflects the relative claim of creditors and shareholders

against the assets of the firm. Alternatively, ratio indicatesj the relative proportion of debt and equity

in financing the assets of a firm. This ratio is calculated as follows:

Debt equity ratio = Long term funds/Shareholders’ fund

Long term fund= Secured fund+Unsecuredj fund

Shareholders’ fund= Share capital+Reserves & Surpluses

Year 2014 2015 2016 2017 2018

Ratios 2.52 3.12 3.35 3.59 6.09

DEBT EQUITY RATIO

8
6.09
6
VALUE

3.12 3.35 3.59

4 2.52 Ratios
2
0
YEAR

34
 ANALYSIS:

 This ratio reflects the relative contribution of creditors and owners of the business in

its financing.

 A high ratio shows a large share of financing by the creditors of the firms. A low ratio

implies smaller claim of creditors.

 It indicates margin of safety to the creditors.

 In 2018, debt equity ratio is higher with debts totaling more that shareholders’ funds.

 But during the following years it has considerably increased showing that debt has

constantly been repaid and shareholders employing funds in the firm.

 In case the firm earns profit with a too low debt equity ratio, it will not be able to

trade on equity because of absence of adequate debt.

 If the firm earns profit and the equity ratio is sufficiency higher, the shareholders will

be able to get higher returns.

 For a loss making firm, a high debt equity ratio is unhealthy.

Funded Debt to Total Capitalization Ratio:

Relationship between the funded Act and Total capitalization is a means of long-term financial

solvency of a firm.

This ratio is calculated as follow:

Funded DEBT

Total capitalization x 100

Funded Act = Debt +Loans+Bonds+Mortgage

Total capitalization= Share holders fund + Act

35
Year 2014 2015 2016 2017 2018

Ratio 74.49 75.01 77.02 78.23 85.90

FUNDEDDEBT TO CAPTILIZATION
RATIO

90 85.9
77.02 78.23
VALUE

80 74.49 75.01
Ratio
70
60
YEAR

ANALYSIS:

1. This shows a relationship between one funded Act and total capitalization.

2. This is a measure of long-term financial solvency of a firm.

3. The ratio was highest in 2018, that is 85.90.

4. The ratio was lowest in 2017, which is 74.49.

5. The ratio is showing a increasing trend.

36
 Equity Ratio:

This shows a relationship between the shareholder’s fund and total assets of the company.

This ratio is calculated as follows:

Equity Ratio = Share holder’s fund X 100

Total Assets

Year 2014 2015 2016 2017 2018

Ratio 10.01 19.90 18.80 17.04 10.25

EQUITY RATIO

25 19.9 18.8
20 17.04
VALUE

15 10.01 10.25 Ratio

10
5
0
YEAR

ANALYSIS:

1. The ratio is showing a inconsistent increase and decrease.

2. This ratio shows the relationship between the share holder’s fund and total assets.

3. The ratio was highest in 2015, which is 19.90

4. The ratio is lowest in 2016, which is 10.25

5. This ratio started decreasing from the year 2017 to 2018.

37
 Solvency Ratio:

This ratio shows the relationship between the total liabilities to outsiders and total assets.

This ratio is calculated as follows :

Solvency Ratio = Total liabilities to outsiders x 100

Total Assets.

OR

Solvency Ratio = 100-Equity Ratio

Year 2014 2015 2016 2017 2018

Ratio 80.99 80.10 81.24 82.96 89.75

SOLVENCY RATIO

95
89.75
90
VALUE

85 82.96 Ratio
80.99 80.1 81.24
80
75
YEAR

ANALYSIS:

1. This ratio is also showing an inconsistent increase and decrease.

2. But this ratio started increasing from the year 2015 to 2016.

3. The ratio was maximum in 2017.

4. And the ratio was minimum in 2018.

38
 Fixed Assets to Net worth Ratio:

This ratio shows the relationship between the fixed Assets after depreciation and share holders

fund.

This ratio is calculated as follows: = Fixed Assets after Depreciation

Share holder’s fund

Year 2014 2015 2016 2017 2018

Ratio 2.05 1.75 2.01 1.65 2.12

FIXED ASSETS TO NET WORTH RATIO

2.5
2.05 2.12
2.01
2 1.75
1.65
VALUES

1.5
Ratio
1

0.5

0
YEAR

ANALYSIS:

1. This ratio shows the relation between the fixed assets and share holders fund.

2. There is a inconsistent ups and downs in the ratio.

3. The ratio was highest in 2018.

4. The ratio was lowest in 2017.

39
 Fixed Assets to Total long-term fund:

This ratio shows the relationship between the fixed Assets after depreciation and total long term

fund.

This ratio is calculated as follows:

Fixed Assets after depreciation x 100

Total long term funds.

Total long term fund = Share holders fund + Act.

Year 2014 2015 2016 2017 2018

Ratio 49.51 47.03 36.10 35.96 29.95

FIXED ASSETS TO TOTAL LONG TERM FUND

60
49.51
50 47.03

40 36.1 35.96
VALUE

29.95
30 Ratio

20

10

0
YEAR

40
ANALYSIS:

1. This ratio is showing an consistent decrease in the ratio.

2. This is not a good sign.

3. The ratio was maximum in 2017.

4. And the ratio is minimum in 2018.

5. This ratio is showing that fixed assets is decreasing.

6. And this is also showing that total long term funds is decreasing but slowly.

Current Assets to Equity fund Ratio:

This ratio shows the relationship between current assets and equity fund.

This ratio is calculated as follows: = Current Assets

Equity fund

Year 2014 2015 2016 2017 2018

Ratio 7.01 9.09 7.44 9.04 7.78

CURRENT ASSETS TO EQUITY FUND RATIO

10 9.09 9.04

7.44 7.78
8 7.01
VALUE

6
Ratio
4

0
YEAR

41
ANALYSIS:

1. This ratio is showing an inconsistent Ups & Downs through out one years.

2. The ratio was maximum in the year 2015.

3. The ratio was minimum in the year 2016.

4. The ratio started rising up in 2017 but again in 2018, this went down.

42
SHAREHOLDER’S EQUITY RATIO:

This ratio helps to identify as to what proportion of total assets are financed to shareholders’ funds

and what proportion is financed through loan fund or creditors fund. This ratio is calculated as

follows:

Shareholder’s equity ratio = Shareholders equity/total assets

Shareholders equity = Equity shares+ Preference share + Reserves & Surpluses –

Losses.

Total assets = Total assets – Preliminary Expenses

Year 2014 2015 2016 2017 2018

Ratio 0.84 0.83 0.75 0.84 0.84

SHAREHOLDER EQUITY RATIO

0.86
0.84 0.84 0.84
0.84 0.83
0.82
0.8
VALUE

0.78 Ratio
0.76 0.75
0.74
0.72
0.7
YEAR

43
ANALYSIS:

 This ratio indicates the proportion of total assets which are financed by shareholders’ equity.

 This ratio has also increased over a period of time showing an increase in shareholders’

equity financing total assets.

 This ratio provides security to the creditors higher the ratio greater will be the security to

creditors.

 The ratio was lowest in 2017 showing that a part of total assets was financed by loans.

 The ratio was highest in 2018 showing that minimum of total assets were finance by loan

funds.

CAPITAL GEARING RATIO:

The gearing ratio is useful in indicating the extra residual benefits accruing to the equity shareholder

because the company earns a certain rate of return on total capital employed but is required to pay to

the preference shareholders and debenture holder at fixed rate. Thus surplus can be utilized for

paying dividends.

In case fixed interest funds are more than the equity shareholder funds the capital structure is said to

be high geared and in low geared in vice-versa case.

Capital gearing ratio = fixed interest bearing funds/equity shareholder Funds.

Fixed interest bearing funds = secured funds + unsecured funds

Equity shareholders’ fund = share capital + Reserves & surpluses.

Year 2014 2015 2016 2017 2018

Ratio 1.02 0.005 0.06 0.001 0.002

44
 CAPITAL GEARING RATIO

1.2
1.02
1

0.8
VALUE

0.6 Ratio

0.4

0.2 0.06
0.005 0.001 0.002
0
YEAR

Analysis:

 During 2014, the company was highly geared as its loan fund was higher than shareholders’

fund.

 After 2014, the ratio remained low with the amount of loan fund decreasing over a period of

time which shows that Company has become a low geared company.

 In 2015, the proportion of loan funds increased but not to an extent that could turn a company

into a high geared company.

 From 2016 to 2017, there was constant decrease in capital gearing ratio.

 In 2018, loan funds increased by small margin but in subsequent years it showed a trend of

decrease depicting a marginal change in loan fund.

45
 INVENTORY TURNOVER RATIO:

This ratio helps in finding out whether investments have been blocked due to slow moving

inventory, the higher is the ratio, the lower will be investments blocked in inventory.

This ratio is calculated as follows:

Inventory turnover ratio = Net sales/ Average inventory

Net sales = sales – excise.

Average inventory= (Opening balance + Closing balance)/2

Year 2014 2015 2016 2017 2018

Ratios 5.95 6.53 6.66 7.69 8.71

INVENTORY TURNOVER RATIO

10
8.71
7.69
8
6.53 6.66
5.95
VALUE

6
Ratios
4

0
YEAR

46
 ANALYSIS:

 This ratio indicates how fast the inventory is sold. A high ratio is good from the view

point of liquidity. A low ratio would signify that inventory does not sell fast and stays on

shelf for a long time.

 The ratio increased from 2014 to 2018 because of sudden increase in sales.

 From 2014 to 2018 the ratio increased gradually because of increase in sales.

 There was a slow increase in the ratio during 2017 because of reduced sales during that

year.

 The ratio increased further because of lower inventory and higher sales.

 Instead of not much increase sales in 2018 the ratio increased, this was caused by

reduction of average inventory.

 In 2018 ratio shot up because of considerable improvement in sales and decrease in

average inventory.

Inventory Conversion Period:

This ratio shows that in how many days inventory is getting converted.

This is a relationship between the number of days worked and the inventory Turn over Ratio.

This is calculated as follows:

Inventory conversion period = No.of days in a year

Inventory Turn over Ratio

Year 2014 2015 2016 2017 2018

Ratio 49.58 45.18 44.29 38.36 33.87

47
 INVENTORY CONVERSION PERIOD

60
49.58
50 45.18 44.29
38.36
40 33.87
VALUES

30 Ratio

20

10

0
YEAR

ANALYSIS:

1. This is a relationship between the number of working days and the inventory turn over ratio.

2. The lower the ratio, better the result.

3. We can see that the ratio is decreasing year by year and this is good.

4. The ratio was maximum in 2014.

5. And the ratio is minimum in 2018.

48
 DEBTOR’S TURNOVER RATIO:

This ratio measures how rapidly debts are collected. High ratio is indicative of shorter time lag

between credit sales and cash collection. A low ratio shows that debts are not being collected rapidly.

This ratio is calculated as follows:

Debtors turnover ratio = Net credit sale/ Average debtors

Net credit Sales = Gross credit sales – Returns from customers

Average Debtors = (Opening balance + Closing balance)/2

Year 2014 2015 2016 2017 2018

Ratio 1.07 1.06 1.05 1.08 1.07

DEBTORS TUROVER RATIO

1.09
1.08
1.08
1.07 1.07
1.07
VALUE

1.06
1.06 Ratio
1.05
1.05

1.04

1.03
YEAR

49
 ANALYSIS:

 This ratio supplements information regarding liquidity of debtors. Higher the ratio the

more liquid debtors are.

 Liquidity of debtors from 2014 to 2015 declined because of more than proportionate

increase in debtors with increased credit sale.

 From 2015 to 2016, sales increased and debtors increased with slow rate. There by

showing higher turnover for the period.

 In 2016, 2017 & 2018, turn over ratio fluctuated alternatively instead of decreasing

debtors because of change in credit sales position. Debtors turn over ratio was lowest in

2018 showing that the debtors were not so liquid in that year.

 In 2018, the ratio shot up because of receipts from debtors and due to increased credit

sales in that year compared to previous year.

Average Collection Period:

This ratio shows that in how many days collection is coming.

This is a relationship between the number of days worked and the Debtors Turnover ratio.

This is calculated as follows:

Average Collection Period = No. of working days

Debtors Turnover Ratio

Year 2014 2015 2016 2017 2018

Ratio 275.70 278.30 280.95 273.15 275.70

50
 AVERAGE COLLECTION PERIOD

282 280.95
280 278.3
278
275.7 275.7
VALUE

276
Ratio
274 273.15

272
270
268
YEAR

ANALYSIS:

1. This is a relationship between the number of working days and the Debtors Turnover Ratio.

2. The lower the ratio, better the result.

3. The ratio has increased from the year 2014 to 2018.

4. In the year 2017 the ratio has decreased.

5. But again in 2016 the ratio decreased.

Creditors Turnover Ratio:

This is a relationship between the Net Credit annual Purchase and the average Trade Creditors.

The lower the ratio is better.

This is calculated as follows:

Creditors Turnover Ratio = Net Credit Annual purchase

Average Trade Creditors

Average Trade Creditors = Opening Creditor + Closing Creditor/2

OR

Average Trade Creditors = Creditors + B/P

51
 Note:-

o Creditors are always be taken on Gross value.

o No provision will be deducted.

Year 2014 2015 2016 2017 2018

Ratio 1.05 0.91 1.00 0.09 1.08

CREDITORS TURNOVER RATIO

1.2 1.08
1.05
1
1 0.91

0.8
VALUE

0.6 Ratio

0.4

0.2 0.09

0
YEAR

ANALYSIS:

1. This ratio shows the relationship between the net credit annual purchase and the average trade

creditors.

2. The lower the ratio is better.

3. The ratio is showing the inconsistency.

4. The ratio is maximum in 2018.

5. The ratio was minimum in 2017.

52
 Average Payment Period:

This ratio is a relationship between the number of working days and Creditors Turn over ratio.

The higher the ratio is better.

This is calculated as follows:

Average Payment period = No. of working days

Creditors Turnover Ratio

Year 2014 2015 2016 2017 2018

Ratio 280.95 324.18 295 327.78 273.15

AVERAGE PAYMENT PERIOD

340
324.18 327.78
330
320
310
295
VALUE

300
290 280.95 Ratio
280 273.15
270
260
250
240
YEAR

53
ANALYSIS:

1. This ratio should be kept high, then this will be good.

2. This ratio is a relationship between the number of working days and creditors turnover ratio.

3. The ratio was maximum in 2017.

4. And the ratio is minimum in 2018.

TURN OVER RATIO:

Another way of determining how quickly certain current assets are converted into cash is calculation

of turnover ratios.

WORKING CAPITAL TURNOVER RATIO:

This ratio indicates whether or not working capital has been effectively utilized in making sales. In

case a Company can achieve higher volume of sales with relatively small amount of working capital,

it is an indication of the operating efficiency of the company.

This ratio is calculated as follows:

Working capital turnover ratio = Net sales/ Working capital

Net Sales = Sales – Excise

Working capital = Current assets - Current liabilities

Year 2014 2015 2016 2017 2018

Ratio 1.05 1.1 1.18 1.23 1.17

54
 WORKING CAPITAL TURNOVER RATIO

1.25 1.23

1.2 1.18 1.17

1.15
VALUE

1.1
1.1 Ratio
1.05
1.05

0.95
YEAR

ANALYSIS:

 This ratio indicates whether not working capital has been effectively utilized in making sales.
 The higher the ratio, he better is the operating efficiency of the Company.
 This ratio should be compared with that of other firms to find out the optimum level for the
industry.
 Working capital has increased constantly up to 2016 after which there has been decrease in
the ratio.
 In 2018 the ratio declined because of lower sales in that year.
 After 2017 there was steep increase in the ratio because of reduced working capital which
shows the efficient utilization of working capital.

55
 ACTIVITY RATIO:

FIXED ASSET TURNOVER RATIO:

This ratio helps in estimating the contribution of fixed assets in the sales of the Company. A

high ratio depicts higher efficiency in the utilization of fixed assets while a low ratio shows low

efficiency in managing the fixed assets.

Fixed Assets Turnover Ratio = Net sales/Fixed assets

Fixed assets = Gross block – Depreciation

Year 2014 2015 2016 2017 2018

Ratio 1.13 1.02 1.10 1.11 1.40

FIXED ASSETS TURN OVER RATIO

1.6
1.4
1.4
1.13 1.1 1.11
1.2 1.02
1
VALUE

0.8 Ratio
0.6
0.4
0.2
0
YEAR

56
ANALYSIS:

 This ratio measures the efficiency of a firm in managing and utilizing its assets.

 Up to the year 2014, there has been an decrease in fixed assets turn over ratio which shows

that assets have not been effectively utilized during this period.

 Ratio declined in 2015 because of reduced sales.

 After 2015, the ratio shows a constant increase instead of fluctuating sales for that period

because the amount of depreciation accumulated increased which resulted in reduction of net

block of assets.

SALES TO CAPITAL EMPLOYED:

This ratio measures turnover of the Company. It is calculated as follows :

Turn over = Net sales/ Capital employed

Net sales = Sales – Excise

Capital employed= (Shareholders’ fund+Loan Fund)-(Investment+ Current liabilities + Capital

W.I.P.+ Preliminary expenses + P/L)

Year 2014 2015 2016 2017 2018

Ratios 0.83 0.75 0.84 0.89 1.21

57
 SALES TO CAPITAL EMPLOYED

1.4
1.21
1.2
1 0.84 0.89
0.83
0.75
VALUE

0.8
Ratios
0.6
0.4
0.2
0
YEAR

ANALYSIS:

 This turnover indicates the number of times capital has been rotated in thej process of

doing business.

 It is a measure of return on capital employed.

 If we look at the figures from 2014 to 2018 then one thing is for sure that return on capital

employed was less than unity which shows that return on capital employed were not

adequate.

 In 2014 the return on capital employed was lowest because of lowest sale during that

year.

 Capital employed has shown a fluctuating trend. It decreased from 2014 to 2015 and it

increased from 2015 to 2016. After 2017 it constantly increased up to 2018.

 In 2018 return on capital employed was more than unity, which shows that there was

efficient utilization of capital employed during that year.

58
 PROFITABILITY RATIO

GROSS PROFIT RATIO

The first profitability ratio in relation to sales is the gross profit margin. It is calculated as follows:

Gross profit margin = (Sales – cost of goods sold)/ Sales

The gross profit margin reflects the efficiency with which management produces each unit of

product. This ratio indicates the average spread between the cost of goods sold and the sales

revenue. When we subtract the gross profit margin from 100 percent, we obtain the ratio of cost of

goods sold to sales. Both these ratios show profits relative to sales after the deduction of production

costs, and indicate the relation between production costs and selling price.

A high gross profit margin ratio is a sign of good management. A gross margin ratio may increase

due to any of the following factors:

i) higher sales price, cost of goods sold remaining constant,

ii) lower cost of goods sold, sales price remaining constant,

iii) a combination of variations in sales price and costs, the margin widening, and

iv) an increase in the proportionate volume of higher margin items. The analysis of

these factors will reveal to the management how a depressed gross profit margin can be

improved.

A low gross profit margin may reflect higher cost of goods sold to the firms’ inability to purchase

raw material at favorable terms, inefficient utilization of plant and machinery, or over investment in

plant and machinery, resulting in higher cost of production. The ratio will also be low due to a fall in

prices in the market, or marked reduction in selling prices by the firm in an attempt to obtain large

sales volume, the cost of goods sold remaining unchanged. The financial manager must be able to

detect the causes of a falling gross margin and initiate action to improve the situation.

59
Year 2014 2015 2016 2017 2018

Ratio 8.51 7.98 6.65 3.06 0.05

GROSS PROFIT RATIO

9 8.51
7.98
8
6.65
7
6
VALUE

5
Ratio
4 3.06
3
2
1 0.05
0
YEAR

ANALYSIS:

 There is a regular decrease in the gross profit ratio.

 This is not a good sign for the company.

 Gross profit ratio was a highest in 2017 that is 8.51.

 In 2018 is at its lowest point that is 0.05.

 Gross profit ratio is the measurer of the company’s performance so one should keep it high.

 Company’s performance is declining day by day.

60
NET LOSS RATIO:

Net profit is obtained when operating expenses, interest and taxes are subtracted from the gross

profit. The net profit margin is measured as follows:

Net loss ratio = profit after tax/ sales x 100

Net profit margin ratio establishes a relationship between net profit and sales and indicates

management efficiency in manufacturing, administering and selling the products. This ratio is the

overall measure of the firms ability to turn each rupee sales into net profit. If the net margin is

inadequate, the firm will fail to achieve satisfactory return on shareholders fund.

This ratio also indicates the firms capacity to withstand adverse economic conditions. A firm with

high net margin ratio would be in an advantageous position to survive in the face of falling selling

prices, rising costs of production or declining demand for the product. It would really be difficult for

a low net margin firm to withstand these adversities. Similarly, a firm with high net profit margin can

make better use of favorable conditions, such as rising selling prices, falling costs of production or

declining demand for the product. Such a firm will be able to accelerate its profits at a faster rate than

a firm with a low net profit margin.

Profitability of a firm can be interpreted more meaningfully. If both gross profit and net profit ratios

are studied together. For example, if the gross profit margin has increased over years, but the net

profit margin has either remained constant or declined, or has not increased as fast as the gross

margin, this implies that the operating expenses relative to sales have been increasing. The increasing

expenses should be identified and controlled. Gross profit margin may decline due to fall in sales

price or increase in the cost of production. As a consequence, net profit margin will decline unless

operating expenses decrease significantly.

61
Year 2014 2015 2016 2017 2018

Ratio 25.48 26.97 29.56 30.10 35.95

NET LOSS RATIO

40 35.95
35
29.56 30.1
30 25.48 26.97
25
VALUE

20 Ratio
15
10
5
0
YEAR

ANALYSIS:

 There is a increase in loss on a regular basis.

 This is not a good sign for the company.

 The ratio was lowest in 2017 that is 25.48.

 The ratio is highest in 2018, that is 35.95.

 The company has faced the maximum loss in the year 2018.

 They should control there expenses.

62
EXPENSES RATIO

The expenses ratio is very important for analyzing the profitability of a firm. It should be compared

over a period of time with the industry average as well as firms of similar type. As a working

proposition, a low ratio is favorable while a high one is unfavorable. Thej implication of a high

expense ratio is that only a small percentage share of sales is available for meeting financial

liabilities. An analysis of the factors responsible for a low ratios may reveal changes in selling prices

or the operating expenses.

This ratio is calculated as follow:

Expenses ratio = expenses/net sales x 100

Year 2014 2015 2016 2017 2018

Ratio 25.49 27.98 33.80 31.75 31.80

EXPENSIS RATIO

40
33.8
35 31.75 31.8
30 27.98
25.49
25
VALUE

20 Ratio
15
10
5
0
YEAR

ANALYSIS:

 The expenses ratio is very important for analyzing the profitability of a firm.

 The low ratio is favorable while a high one is unfavorable.

 Company’s expenses ratio is full of ups and downs.

 The company has the lowest ratio in the year 2016, that is 25.49 which was

63
 very high.

 The companies have the highest ratio in the year 2017, which is 33.80.

 Company should control the situation, by controlling the expenses.

MATERIAL COST RATIO:

Material cost ratio helps in estimating the percentage of material consumed to net sales. This ratio is

calculated as follows:

Material cost ratio = (Material consumed/ Net sales) x 100

Year 2014 2015 2016 2017 2018

Ratio 32.0 34.7 26.7 27.0 26.3

MATERIAL COST RATIO

40
34.7
35 32
30 26.7 27 26.3
25
VALUE

20 Ratio
15
10
5
0
YEAR

ANALYSIS:

 From year 2014 to 2018 the increase in percentage of material consumed was higher than

percentage increase in sales.

64
  This trend continued till 2016 when the material cost ratio increased further with higher

increase in cost of material consumed in year 2017.

 In 2015 sales increased further with decrease in consumption of material for the year.

 In 2014 both sales and material consumed decreased with percentage decrease in sales

higher than decrease in percentage of material consumed.

 In 2014 due to more proportionate decrease in material consumed the ratio declined.

 So in 2018, because of increased sale compared to consumption of raw material, ratio

declined.

OPERATING COST RATIO:

Operating cost ratio = Operating expenses/ Net sales

Operating cost include all the direct expenses incurred in the production with an exception to direct

material cost.

Year 2014 2015 2016 2017 2018

Ratio 0.69 0.90 0.98 0.90 0.63

OPERATING COST RATIO

1.2
0.98
1 0.9 0.9

0.8 0.69
0.63
VALUE

0.6 Ratio

0.4

0.2

0
YEAR

65
ANALYSIS:

 Operating cost ratio increased from the year 2014 to 2015 because of decrease in sale

and increase in operating expenses.

 From the year 2015 to 2016, operating cost ratio remained almost constant instead of

increasing sales because there was a proportionately equal increase in operating cost

as that of sales.

 From the year 2014 to 2015, the ratio climbed up to its maximum in the year 2016.

Except in year 2017 the sales for the other years following it decreased and the

increasing operating ratio indicates that the operating cost has increased over this

period considerably.

 In the year 2017, operating cost ratio declined instead of declining the sales in that

year because the costs were controlled in that year.

 In the year 2018 the ratio again came to its lowest because of increasing sales and

decrease in operating cost due to increase in efficiency.

66
DEPRECIATION RATIO:

This ratio helps to measure the percentage of depreciation which is charged to the sales of a

particular year.

Calculation of this ratio is as follows:

Depreciation ratio = Depreciation/ Net sales

Year 2014 2015 2016 2017 2018

Ratio 8.0 10.1 9.8 11.9 7.5

DEPRICIATION RATIO

14
11.9
12
10.1 9.8
10
8 7.5
VALUE

8
Ratio
6
4
2
0
YEAR

ANALYSIS:

 In 2014 percentage of depreciation charged to sales was low because of low value of

gross block.

 In 2014 the ratio grew up because of high sales.

 In 2015 there was a slight decrease in the depreciation ratio because of increase in

sales and decrease in gross block.

 So, in 2016 ratio declined slightly because of high sales.

67
 In 2017, ratio soared because of low sales and high value of gross block.

 In 2017, the value of gross block declined due to which ratio declined.

 In 2017, there was higher percentage of decrease in sales compared to gross block.

 In 2018, gross block decreased further with increase in sales which reduced the ratio

of depreciation.

68
 CONCLUSION

After having studied the financial statements of Minda Corporation Ltd. for a period of five years,

following conclusions from the ratios calculated can be made about the organization.

1) Current ratio has shown a trend of inconsistent increase and decrease during the years. Ratios are

above the required level which shows that the firm has liquid to meet its current liabilities and is safe

from the view of creditors.

But company is not investing as it should do.

But during the last year in 2018, current ratio has decreased. This is a good sign because current ratio

has decreased mainly because of decrease in inventory and sundry debtors which gives an impression

that debtors have become more liquid and there is less amount of money invested in stock compared

to previous years.

2) Quick ratio has also shown a trend of inconsistent increase and decrease during the years. The

ratio of 1:1 is good but here company is not maintaining this. We can see that the ratio is above this

level. The ratio was lowest in 2017 but still was very high. Which shows that company is not

utilizing it’s quick assets.

3) Absolute Quick Ratio has shown a decreasing trend over the years. Thumb rule for this ratio is

0.5:1, but company is not maintaining this ratio.

4) Working capital turnover ratio has also shown a fluctuating trend with it being lowest in 2017

showing less productive utilization of working capital. During first four years, this ratio has shown

an increasing trend which is a positive sign indicating efficiency in utilization of working capital.

This ratio was achieved because of constantly lower working capital that was required year by year

69
to achieve a level of sales. Also, as inventory has decreased over this period, it is a clear indication

that there is efficient utilization of working capital.

5) In case of inventory turn over ratio, the ratio has increased constantly from year 2017 to 2018

and rather steeply in year 2016 and 2017. The reason for same was because in 2016 and 2017, there

was increase in sales compared to previous year as well as reduction in inventories it caused higher

turnover. The ratio is highest in 2017, it shows that its condition is improving and rotation of

inventory is increased with average holding period coming down to 8.71 months.

6) Debtors’ turnover ratio has shown a fluctuating trend for the years 2014, 2015 and 2016. It

increased from year 2016 to 2017 then decreased in the year 2018. The reason for same instead of

declining debtors’ balance was that in year 2014, sales decreased compared to year 2015 and the

percentage increased in debtors’ was higher than that of sales which caused lower ratio, but finally in

2015 because of higher sales and reduced debtors’ the ratio improved with average debtors’ period

being 1.07 months

70
 RECOMMENDATION

On the basis of graphical analysis of ratios calculated. I would like to recommend following:

1. Liquidity of the company was too high during period of 2014 to 2018, a current ratio of two

provides more than comfortable liquidity to the creditors, moreover high liquidity blocks the

current assets thereby blocking the returns. Supplementing to that quick ratio of company was

also very high for the period under consideration. There should be a check on the liquid asset

of the company because they are in in high proportion to the total assets. In the last year the

company has shown its concern over the increasing current assets and it needs to further

control its current assets so that high liquidity does not result in blocked assets.

2. As is evident from the capital structure ratios, the share holders capital has kept on decreasing

steeply from year to year which shows that the leverage of the firm is not good. Due to this

the company will not be able to trade on equity that is to get exemption of tax on earnings by

using debt and thereby increasing shareholders wealth.

3. Though during the last three years the company has shown an improvement in its turnover

ratios depicting a proper utilization of company’s resources but the same can be improved

further the sales of the company are pushed up. Although the inventory turnover ratio

reached its peak point in 2018 by pushing sales, the activity ratios of the firm can be

improved further.

4. Expenses have been controlled during past years but this was followed with a proportionate

reduction in market share. During the period under study company has considerably reduced

its costs to sales ratio, at this point of time by pushing sales in the market the company can

earn higher margin. But during the year 2014 to 2018 the fixed assets have shown a

decreasing trend, compared to that sales have not shown a direct relation to it.

71
5. Fixed assets have shown an increasing trend during the year 2018, compared to that sales

have not shown a direct relation to it, which clearly show that much of its capacity can be

utilized and revenues can be increased.

72
 BIBLIOGRAPHY

BOOKS:

 Bhole – “Financial Markets & Institutions”.

 Krishnan & Narta – “Security Markets in India”.

 Avdhani – “Marketing of Financial Services”

 Khan - “Marketing Financial Services”

 ICAI – “Financial Management”

WEBSITES:

 www.insuranceinfoline.com

 www.managermentor.com

 www.geocities.com

 www.indiainfoline.com

 www.thehindubusinessline.com

 www.marketmojo.com

 www.moneycontrol.com

73
 QUESTIONNAIRE

Balance Sheet of Minda

------------------- in Rs. Cr. -------------------
Industries
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds
Total Share Capital 17.41 15.87 19.37 19.37 19.37
Equity Share Capital 17.41 15.87 15.87 15.87 15.87
Share Application Money 0.00 300.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 3.50 3.50 3.50
Reserves 952.49 512.45 419.23 353.34 314.35
Networth 969.90 828.32 438.60 372.71 333.72
Secured Loans 36.75 80.57 68.95 78.16 101.44
Unsecured Loans 43.63 90.19 29.74 24.06 32.02
Total Debt 80.38 170.76 98.69 102.22 133.46
Total Liabilities 1,050.28 999.08 537.29 474.93 467.18
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds
Gross Block 381.06 314.90 627.82 609.65 548.15
Less: Accum. Depreciation 101.27 50.09 376.49 331.60 292.83
Net Block 279.79 264.81 251.33 278.05 255.32
Capital Work in Progress 37.09 10.56 4.93 0.57 18.23
Investments 604.40 356.75 194.65 82.20 93.50

74
Inventories 111.15 87.60 89.10 90.03 74.09
Sundry Debtors 335.98 241.47 251.29 210.33 187.77
Cash and Bank Balance 14.75 318.96 16.81 20.74 14.43
Total Current Assets 461.88 648.03 357.20 321.10 276.29
Loans and Advances 113.01 61.53 53.58 70.19 72.75
Total CA, Loans & Advances 574.89 709.56 410.78 391.29 349.04
Current Liabilities 404.84 307.70 282.45 239.72 220.75
Provisions 41.05 34.90 41.96 37.47 28.17
Total CL & Provisions 445.89 342.60 324.41 277.19 248.92
Net Current Assets 129.00 366.96 86.37 114.10 100.12
Total Assets 1,050.28 999.08 537.28 474.92 467.17

Contingent Liabilities 409.60 421.42 128.58 141.10 181.52

Book Value (Rs) 111.43 66.60 274.24 232.71 208.14

75
Profit & Loss account of Minda
------------------- in Rs. Cr. -------------------
Industries
Mar 18 Mar 17 Mar 16 Mar 15 Mar 14

12 mths 12 mths 12 mths 12 mths 12 mths

INCOME
Revenue From Operations
1,881.85 1,786.52 1,590.46 1,466.84 1,194.71
[Gross]
Less: Excise/Sevice Tax/Other
46.72 165.66 143.11 119.80 99.92
Levies
Revenue From Operations
1,835.13 1,620.86 1,447.36 1,347.05 1,094.78
[Net]
Other Operating Revenues 21.95 18.43 21.38 23.33 13.28
Total Operating Revenues 1,857.08 1,639.29 1,468.74 1,370.38 1,108.06
Other Income 38.39 24.81 22.38 18.68 12.71
Total Revenue 1,895.47 1,664.10 1,491.12 1,389.06 1,120.77
EXPENSES
Cost Of Materials Consumed 1,178.32 1,053.78 965.26 890.26 739.50
Purchase Of Stock-In Trade 0.00 0.20 2.96 41.34 23.04
Changes In Inventories Of
-9.06 1.78 -3.35 -3.90 -7.12
FG,WIP And Stock-In Trade
Employee Benefit Expenses 254.23 216.41 186.44 162.51 139.85
Finance Costs 6.82 14.00 10.22 12.56 15.03
Depreciation And Amortisation
52.52 51.12 52.78 53.71 41.73
Expenses
Other Expenses 242.55 208.55 177.97 166.76 136.55
Total Expenses 1,725.38 1,545.84 1,392.27 1,323.23 1,088.60
Mar 18 Mar 17 Mar 16 Mar 15 Mar 14

12 mths 12 mths 12 mths 12 mths 12 mths

Profit/Loss Before Exceptional,

170.09 118.26 98.85 65.82 32.17
ExtraOrdinary Items And Tax
Exceptional Items 5.49 0.00 0.00 3.87 1.50
Profit/Loss Before Tax 175.58 118.26 98.85 69.69 33.67

76
Tax Expenses-Continued Operations
Current Tax 40.74 26.61 19.93 15.96 6.06
Less: MAT Credit Entitlement 0.00 0.00 -1.65 2.79 0.00
Deferred Tax -0.99 -2.31 -2.11 3.32 0.49
Total Tax Expenses 39.75 24.30 19.47 16.49 6.55
Profit/Loss After Tax And
135.83 93.96 79.38 53.20 27.12
Before ExtraOrdinary Items
Profit/Loss From Continuing
135.83 93.96 79.38 53.20 27.12
Operations
Profit/Loss For The Period 135.83 93.96 79.38 53.20 27.12
Mar 18 Mar 17 Mar 16 Mar 15 Mar 14

12 mths 12 mths 12 mths 12 mths 12 mths

OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 15.72 11.83 49.96 33.45 17.01
Diluted EPS (Rs.) 15.67 11.77 49.96 33.45 17.01
VALUE OF IMPORTED AND
INDIGENIOUS RAW MATERIALS
Imported Raw Materials 0.00 0.00 67.67 58.25 57.35
Indigenous Raw Materials 0.00 0.00 897.59 832.01 682.16
STORES, SPARES AND LOOSE
TOOLS
Imported Stores And Spares 0.00 0.00 0.73 0.51 0.24
Indigenous Stores And Spares 0.00 0.00 29.41 29.65 15.52
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 19.01 15.87 11.11 9.52 4.76
Preference Share Dividend 0.00 0.11 0.11 0.11 0.11
Tax On Dividend 3.17 1.28 2.28 1.94 0.83
Equity Dividend Rate (%) 140.00 110.00 70.00 60.00 30.00

77
Cash Flow of Minda Industries ------------------- in Rs. Cr. -------------------
Mar 18 Mar 17 Mar 16 Mar 15 Mar 14

12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit/Loss Before

175.60 118.99 98.85 69.69 33.67
Extraordinary Items And Tax
Net CashFlow From Operating
140.18 174.68 124.39 110.77 60.20
Activities
Net Cash Used In Investing
-307.00 -217.01 -100.69 -48.96 -62.88
Activities
Net Cash Used From Financing
-133.14 340.34 -27.11 -57.67 -19.18
Activities
Net Inc/Dec In Cash And Cash
-299.96 298.01 -3.41 4.13 -21.86
Equivalents
Cash And Cash Equivalents
314.54 16.54 13.94 10.24 32.09
Begin of Year
Cash And Cash Equivalents End
14.58 314.55 10.54 14.37 10.24
Of Year

78