67177111 Financial Performance Analysis

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FINANCIAL PERFORMANCE ANALYSISOF

A Project report submitted to AICTE in partial

fulfillment of the Requirements For the award of the

diploma of

POST GRADUAGE DIPLOMA IN MANAGEMENT

Submitted By

Girish Vishwakarma

Under the guidance ofMiss. Vibha Mittal

(Faculty Of Finance (PGDM) IMR)

INSTITUTE OF MANAGEMENT & RESEARCH

(Affiliated to AICTE)8TH MILESTONE, DELHI-MEERUT ROAD, DUHAI,

GHAZIABAD (U.P.)

2010 - 2012

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DECLARATION

I hereby declare that this project report titled-

FINANCIAL PERFORMANCE ANALYSIS OF SAMTEL

COLOR LTD.

is submitted by me to AICTE is a bonafide work

undertaken by me and it is not submitted to any other

University or Institute for the award of any Diploma /

Certificate or published any time before.

Place: Ghaziabad Signature

Date: (GIRISHVISHWAKARMA)

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ACKNOWLEDGEMENTS

At the out set, I wish to express my sincere

thanks to almighty for showering his blessing on me to

develop this project.

I would like to acknowledge my sincere thanks to

Mr. RISHI TAPARIA, Faculty of Finance & H.O.D,

Institute Of Management & Research for his

excellent guidance and supervision for the completion of

this project successfully.

I am deeply indebted to the Dr. UMESH SHARMA,Ph.D., Director General, Institute of Management

& Research for enabling me to do this project.

I express my sincere thanks to Mr. Amitabh

Ranjan Sinha, General Manager of Samtel Color

Ltd, Ghaziabad for according permission to carry out

this study in his esteemed organization & under the

guidance Miss. VIBHA MITTAL Faculty of Finance,

Institute Of Management & Research.

Last but not the least I wish to thank my Parents

who always believed me and have faith in me in

whatever I wished to do.3


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GIRISH VISHWAKARMA

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CONTENTS

CHAPTERPARTICULARS

PAGENO

CHAPTER I

PROFILE 1-18

1.1 Industry Profile

1.2 Company Profile

CHAPTERII

INTRODUCTION AND DESIGN OF THESTUDY

19-31

2.1 Introduction of the Study

2.2 Objective of the Study

2.3 Research Methodology

2.3.1 Research Design

2.3.2 Nature of Data

2.3.3 Methods Data Collection

2.3.4 Research ToolsCHAPTERIII DATA ANALYSIS AND INTERPRETATION 32-81

CHAPTERIV

FINDINGS AND SUGGESTIONS 82-87

4.1 Findings

4.2 Suggestions

CHAPTERV

CONCLUSION AND BIBLIOGRAPHY 88-91

5.1 Conclusion

5.2 Limitations of the Study

5.3 BibliographyCHAPTERVI

ANNEXURE 92-94

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LIST OF TABLE

SL.NO PARTICULRSPAGENO

1Current ratio

34

2Liquid ratio

36

3 Absolute liquidity ratio 38

4Debt equity ratio

40

5Proprietary ratio

42

6Stock turnover ratio

44

7Fixed assets turnover ratio

46

8Working capital turnover ratio

48

9

Total assets turnover ratio

50

10Capital turnover ratio

52

11Return on total assets

54

12Gross profit ratio

56

13Net profit ratio

58

14Expenses ratio

60

15Common Size Income Statement (2006,

2007)62

16Common Size Income Statement (2007,2008) 63


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19Common Size Balance Sheet (2006, 2007)

66

20 Common Size Balance Sheet (2007, 2008) 67


68


69

23Comparative income Statement (2006,2007) 70

24Comparative income Statement (2007,2008) 71

25Comparative income Statement (2008,

2009)72

26Comparative income Statement (2009,

2010)73

27Comparative Balance Sheet (2006, 2007)

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75

29

Comparative Balance Sheet (2008, 2009)

76


77

31Trend income statement

78

32Trend Balance sheet

79

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LIST OF CHARTS

SL.NO PARTICULRS PAGE NO

1 Current ratio 34

2 Liquid ratio 36

3 Absolute liquidity ratio 38

4 Debt equity ratio 40

5 Proprietary ratio 42

6 Stock turnover ratio 44

7 Fixed assets turnover ratio 46

8 Working capital turnover ratio 48

9 Total assets turnover ratio 50

10 Capital turnover ratio 52

11 Return on total assets 54

12 Gross profit ratio 56

13 Net profit ratio 58

14 Expenses ratio 60

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EXECUTIVE SUMMARY

Samtel Group's journey began in 1973, with a vision to create a

world-class organization. Today, Samtel Group is Indias largest

integrated manufacturer of a wide range of displays for television,

avionics, industrial, medical and professional applications, TV glass,

components for displays, machinery and engineering services. The

group employs 6000 people in nine world-class factories and has an

annual turnover of Rs 12 billion (USD 300M)

Samtel Group has strong design and development skills and is a

dependable player with excellent technological capabilities and a

long-term commitment to the display industry. Its products are known

for ruggedness and reliability and conform to the latest relevant

quality standards. The group has excellent relationships with

suppliers of key components and the ability to design new products

as well as set up hi-tech manufacturing facilities. Samtel has

registered many patents for developments in display technology and

also developed its own technology for automation.

My Project is FINANCIAL PERFORMANCE ANALYSIS OF

SAMTEL COLOR LTD.

The project was of 45 Days duration. During the project I interviewed

the executives

& staff to collect the data, & also made use of company records &

annual reports. The data collected were then compiled, tabulated and

analyzed.

Some the points to be studied under this topic are:

How much total assets a firms hold?

What should be the firms working capital?

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How much firms stock turnover ratio?

How much capital turnover ratio in firms?

How to & when to pay the creditors of the firm?

How much to invest in inventories?

CHAPTER- I

PROFILE

Contents:

1.1 Industry Profile

1.2 Company Profile

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1.1 INDUSTRY PROFILE

Samtel Display Industry- an Overview:

Samtel Display Systems bags the Hot Investment

Opportunity award by Frost & Sullivan:

The first Indian company to be acknowledged in the aerospace

segment SDS awarded for its outstanding business model and for

providing a significant cost benefit to its clients vis--vis its

competitors London, September 24: The Indian avionics leader, Samtel

Display Systems (SDS), has been awarded the Frost & Sullivan Hot

Investment Opportunity Award 2009 in the Indian Aviation Suppliers

Market. This award recognizes the Companys outstanding business

model based on unique and differentiated products, continuous

upgrades of systems, long-term client contracts and industry

certifications such as SAE/AS 9100 Rev-B. This is the first time that

Business Financial Services (BFS) at Frost & Sullivan is awarding an

Indian participant in Aerospace Sector.

Speaking at the award ceremony organized at The Marriott Marble

Arch Hotel (London), Gary Jeffery, Partner & Director, UK Operations for

Frost & Sullivan, congratulated all the award recipients including SDS

for their excellence.

A delighted Puneet Kaura Executive Director, Samtel Display

Systems said- The Indian defense and aviation industry is extremely

dynamic and has tremendous business potential, while Samtel Display

Systems is the only privately owned company manufacturing high-end

avionics products in the country. We are extremely honored to receive

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the Frost & Sullivan Hot Investment Opportunities Award as it is an

acknowledgement of the accomplishments and potential of Samtel

Display Systems, and also gives the Indian Aerospace industry the

global recognition it truly deserves.

The company has a differentiated product portfolio and

commands a very high market share (more than 85.0 per cent) in the

segments in which it operates, remarks Frost & Sullivan Research

Analyst Madusudanan Ramani. SDS offers a significant cost benefit to

customers as compared to its competitors from developed economies

such as the United States and Europe.

The offset policy in the defense segment (according to which

companies that get a defense contract from the Indian Government

have to invest 30 per cent back into the country, either by way of

purchases from the local participants or as investment into the sector)

coupled with intensifying pressure on OEMs to source more from low-

cost destinations such as India is expected to strongly drive revenues

for SDS in the future., concludes Frost & Sullivan Research Analyst

Madusudanan Ramani.

The major challenges faced by companies in the Indian aviation

suppliers market are inconsistent order flow, long gestation period of

projects, and lack of competitive technology. SDS has addressed these

challenges by signing long-term contracts with its customers ranging

from a period of eight years to a lifetime to ensure consistent supply.

SDS has forged partnerships with many large companies for the

development and supply of key parts, such as Hindustan Aeronautics

Limited (HAL), Thales Aerospace, Honeywell Aerospace and Defense

Research and Development Organization (DRDO). SDS is currently a

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tier 2 supplier to many global participants, and Tier 1 supplier to the

only significant Indian player HAL.

The sales contracts with foreign clients are for a 20-year

period and the Indian sales contracts are for a period ranging from

eight to ten years, notes Ramani. The deal between Samtel and HAL

for Sukhoi runs for the entire lifetime. The repeat business ratio for

SDS is expected to be very high because of the company's

differentiated product line and substantial order book.

About the awardThe Frost & Sullivan Hot Investment Opportunity Award in the

Indian Aviation Suppliers Market is bestowed each year upon the

private company that has demonstrated excellence in managing its

growth, attracting venture capital funding, maintaining a strong

management team, and establishing a sustainable competitive

advantage in an attractive market. The Award recipient must be well

positioned in a growing market and have demonstrated the potential to

obtain market leadership in the near-term. Finally, clear exit paths

must exist, along with the potential for exceptional investment returns

at an acceptable risk level for potential investors.

Frost & Sullivan Best Practices Awards recognize companies in a

variety of regional and global markets for demonstrating outstanding

achievement and superior performance in areas such as leadership,technological innovation, customer service, and strategic product

development. Industry analysts compare market participants and

measure performance through in-depth interviews, analysis, and

extensive secondary research in order to identify best practices in the

industry.

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About Samtel Display Systems

Samtel Display Systems (SDS) is a key Indian player in high-

technology products for avionics and military applications in both

domestic and international markets. SDS straddles the entire value

chain from design, development, manufacture, testing, qualification,

repair & maintenance and obsolescence management of avionics

products and equipment for military as well as commercial aircraft. Its

products include Color Avionic Tubes (CAT), Multi Function Displays

(MFD), Head Up Displays (HUD), Helmet Mounted Displays (HMD),

Automated Test Equipments (ATE) and IADS, as well as Control

Displays for Armored Military Vehicles. SDS is a part of the Samtel

Group, Indias largest integrated manufacturer of a wide range of

displays for television, avionics, industrial, medical and professional

applications, TV glass, components for displays, machinery and

engineering services.

1.2 COMPANY PROFILE

SAMTEL GROUPSamtel Group's journey began in 1973, with a vision to create a

world-class organization. Today, Samtel Group is Indias largest

integrated manufacturer of a wide range of displays for television,

avionics, industrial, medical and professional applications, TV glass,

components for displays, machinery and engineering services. The

group employs 6000 people in nine world-class factories and has an

annual turnover of Rs 12 billion (USD 300M)

Samtel Group has strong design and development skills and is a

dependable player with excellent technological capabilities and a long-

term commitment to the display industry. Its products are known for

ruggedness and reliability and conform to the latest relevant quality

standards. The group has excellent relationships with suppliers of key

components and the ability to design new products as well as set up hi-

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tech manufacturing facilities. Samtel has registered many patents for

developments in display technology and also developed its own

technology for automation.

Group CompaniesSAMTEL COLOR LTD

Samtel Color, the flagship company of the group

manufactures the widest range of Colour TV

tubes in India from 14 inches to 29 inches, and

has a capacity of over 10 million picture tubes

per annum. Integrated backwards with its

component divisions at Ghaziabad and

Parwanoo, it also manufactures electron guns

and deflection yokes for colour picture tubes.With a market share of over 60%, it is the

largest tube manufacturer and exporter in the country. Its clients include

leading domestic and international TV manufacturers.

SAMTEL GLASS LTD

Originally formed as a JV between Corning Inc.,

USA and Samtel in 1989, Samtel Glassmanufactures glass parts for color picture

tubes through its plant in Kota, Rajasthan.

Samtel Glass is now owned fully by Samtel and

is one of the leading manufacturers of glass for

color picture tubes

SAMTEL DISPLAY SYSTEMS LTD

Samtel Display Systems (SDS) is a key Indian

player in high-technology products for avionicsand military applications in both domestic and

international markets. SDS straddles the entire

value chain from design, development,

manufacture, testing, qualification, repair &

maintenance and obsolescence management

of avionics products and equipment for military

as well as commercial aircraft. Its products

include Color Avionic Tubes (CAT), Multi Function Displays (MFD), Head Up

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Displays (HUD), Helmet Mounted Displays (HMD), Automated Test

Equipments (ATE) and IADS, as well as Control Displays for Armored Military

Vehicles.

SAMTEL HAL DISPLAY SYSTEMS LTD

Samtel HAL Display Systems (SHDS), a joint

venture between Hindustan Aeronautics

Limited (HAL) and Samtel, was created to

address the avionics requirements of HAL,

especially cockpit displays of all kinds. SHDS

is responsible for system design,

development, manufacturing, MRO and

obsolescence management of display

systems, ATE and IADS for all Indian

platforms.

SAMTEL THALES AVIONICS LTD

Samtel Thales Avionics is a joint venture

between Samtel and Thales, and brings

Thales' technological expertise to India

through Thales' multi-domestic strategy of

partnering with leading industry players across

the world. The JV will work towards the localdevelopment, production, sale and

maintenance of Helmets Mounted Sight &

Display (HMSD) and other Avionics Systems

destined for the Indian market. Samtel Thales Avionics will become the

design authority for products and equipment developed and manage them

through their entire life cycle.

SAMTEL ELECTRON DEVICES, GmbH

SAMTEL ELECTRON DEVICES GmbH, with its

core competencies in the design andmanufacturing of high technology Electron

Guns and high efficiency Phosphor Screens, is

dedicated to professional applications of

Cathode Ray Tubes (CRT), scientific

instruments (RHEED), X-Ray Guns, Phosphor

screens for TEM and other related

technologies.

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SAMTEL MACHINES

Samtel Machines is a key player in the domain

of Industrial Automation and Special Purpose

Machines manufacturing in India. SamtelMachines is a consequence of Samtels

inhouse expertise in internal automation for

various inhouse automation requirements,

focusing on Automation, Material handling,

Special Purpose Machines and Assembly lines,

which set the foundation for a full-fledged

division catering to Machine building called Samtel Machines.

SAMTEL USA

Samtel USA is a US Company, wholly ownedby Samtel Group of New Delhi, India with

offices in San Jose, CA and Princeton, NJ.

Samtel USA will facilitate close liaison with

Samtel Display Systems existing and

potential North American customers, while

helping to pursue Business Development

activities in the region.

Management

The Group is headed by Mr. Satish K. Kaura, designated as the Chairman and

Managing director. He has three decades of rich experience in the picture tube industry

at various levels.

Mr. Satish K. Kaura is ably supported by a team of talented and dedicated

professionals from the picture tube industries.

The Groups progressive HR policies and welfare programmes ensure atransparent, productive and growth oriented environment to the 1300 plus employees who

play a key role to the success enjoyed by the organization as a prominent exporter of

picture tubes.

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Social accountability

The Samtel Group was founded with a vision of building an institution which

would achieve business excellence while contributing to nation building by

caring for the society and environment. In its desire to play a significant role

beyond the boundaries of its factories in the communities that reside around

its plants, the Group founded the Samtel Achrumal Medical Aid Trust (SAMA)

in 1988.

Through SAMA, Samtel has provided mobile medical vans with trained

medical staff, which are dedicated to providing healthcare services to thecommunities around its plants in Ghaziabad, Kota and Parwanoo. SAMA has

also held a number of medical camps on maternal and child health,

immunization, blood donation and eye care in the last few years because of

which many people have benefited.

In collaboration with I Care Hospital, NOIDA and Lion's Eye Hospital,

Ghaziabad, the trust has been conducting eye camps for the detection and

surgery of cataracts in patients. In these camps, patients are also given IOL

implants free of cost. In addition to this, SAMA has also arranged First Aid

Camps for Kavad Yatris since 2001.

Our work continues and we plan to focus our efforts further in the areas of

maternal and child health as well as launch vocational training and income

generation programs in the areas in which we operate in the coming days.

Environmental Accountability

Samtel Color Ltd maintains high safely standards, and not to

forget the Effluent treatment plant, which plays a big role in their

commitment to preserving the delicate eco-system.

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RESEARCH AND TECHNOLOGY

Samtel's strong R&D capability has helped us to always remain

the first movers in the domestic market with customized, innovative

and competitive new products and retain our leadership position in the

market. Over the years, our in-house team has been responsible for

the design and launch of CPTs in various sizes, setting-up assembly

lines with completely indigenous technology, apart from development

of several types of Deflection Yokes and Electron Guns.

Through the Samtel Center for Display Technologies at IIT Kanpur, we

plan to set new standards in next-generation display technologies.

Samtel Center for Display Technology, IIT-Kanpur

Samtel, in Partnership with

IIT Kanpur and Department of Science andTechnology, has set up a "Samtel Centre

for Display Technologies", located at the

Indian Institute for Technology at Kanpur.

The Centre is doing extensive research in the area of emerging

technologies like Organic Light Emitting Diodes (OLED), and is working

towards improving and commercially exploiting this technology.

VISION, MISSION, CORE VALUES

Our Vision

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Our Vision is to build a mega corporation - An institution with

business excellence impacting nation building & caring for the

environment and society. Our culture will be self-driven, self-searching

& exploring to develop a mind of our own.

Our Mission

Our Mission is to be globally the best value provider of video

display and other chosen products, through leveraging technology and

competencies. We shall achieve it by creating a culture of self-striving

with focus on total employee involvement towards customer

satisfaction. Our approach shall be value based as a responsible

member of the society, contributing to its growth and development.

Our Values

TRUST

TRANSPARENCY

RESPECT

CARING

RISK-TAKING

AUTONOMY

PARTNERSHIPS AND ALLIANCES

We, at Samtel, believe in the power of enhanced expertise as we

extend our business and knowledge capabilities by partnering with

some of the best-known names in the industry. Long before

globalization became a corporate buzzword, we were collaborating with

some of the leaders in the industry be it setting up our first assembly

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with Mitsubishi Electric, Japan; or partnering with Corning, USA and

Samsung Corning, Korea to set-up our glass component manufacturing

plant; or joining hands with IIT-Kanpur and Department of Science and

Technology for OLED research.

Today, we are proud to have some of the leading names in

industry and academia as our alliance partners:

Hindustan Aeronautics Limited

HAL is a major player in the global

aviation arena and is currently ranked 34th

among the world's top 100 defense companies.

The Company has proven capabilities in R&D,

manufacturing and maintenance of fighters, trainers, transport aircraft,

helicopters, their engines and associated systems. As our JV partners in

Samtel HAL Display Systems Limited, HAL will help us in developing

indigenous next-generation avionic display systems for HAL's star

programmes.

Thales Aerospace

Thales is a leading international electronics

and systems group addressing defense,

aerospace and security markets worldwide. The

group builds its growth on its unique multi-

domestic strategy based on trusted partnerships with national

customers and market players, while leveraging its global expertise to

support local technology and industrial development. Thales and

Samtel have a joint venture in Samtel Thales Avionics, which will work

towards the local development, production, sale and maintenance of

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Helmets Mounted Sight & Display (HMSD) and other Avionics Systems

destined for the Indian market.

IIT-Kanpur, andDepartment of Science and Technology, Govt. of India

Samtel, in Partnership with IIT Kanpur andDepartment of Science and Technology, has set up a"Samtel Centre for Display Technologies", located atthe Indian Institute for Technology at Kanpur. TheCentre is doing extensive research in the area of

emerging technologies like Organic Light EmittingDiodes (OLED), and is working towards improving andcommercially exploiting this technology.

DRDO (Defense Research and DevelopmentOrganization, Govt. of India)

Samtel Display Systems has signed a Mo U withDefense Avionic Research Establishment (DARE) toindigenize cockpit displays under the aegis of

DRDO Lab's DARE (Defense Avionics ResearchEstablishment) program.

Infrastructure Machinery:

SPECIAL PURPOSE MACHINES

In response to customer specific needs, Samtel Machines hasdeveloped certain Special Purpose Machines such as Continuousmotion assembly equipments, Packaging Equipments, AutomaticTaping machines, Indexing machine, Pick and Place machines, and

Chemical Processing Equipment.

Some typical case studies include:

Testing and Inspection Automation Gauging / Leak

TestingApplication:

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Leak testing of manifolds, oil cases, engine covers, plastic moulds,Aluminum die castings

General Description:

Leak testing is the branch of nondestructive testing that is concernedwith the escape of liquids, vacuum or gasesfrom sealed components or systems. Leaktesting has a great impact on the safety orperformance of a product. Reliable leaktesting saves costs by reducing the numberof reworked products, warranty repairs and liability claims to thecustomer.

Generally a leak is a hole or porosity in an enclosure capable of passinga fluid from the higher-pressure side to the lower pressure side.However, capillary effects can also be causes of leakage flows.

The flow characteristics of a leak are often depending upon thegeometry of the leak, the nature of the leaking fluid, the pressuredifferential, and the prevailing temperature.

Leak testing in itself is a challenge to be built as it is playing with thefluids (air/water/oil). The controlling of fluid in itself is a difficult task tobe carried out but here we are not less in doing so. Our vast knowledge

of subject over fluids and expertise in this field has brought us well-satisfied and repeated customers orders, covering 50% of market inIndia.

Assembly Automation & Semi automatic assembly

stations

Application:

Assembly of connector pins


The design for an assembly line isdetermined by analyzing the stepsnecessary to manufacture each productcomponent as well as the final product.All movement of material is simplified,with no cross flow, backtracking, or

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repetitious procedure. Work assignments, numbers of machines, andproduction rates are programmed so that all operations along the lineare compatible.

Automated assembly lines consist entirely of machines run bymachines, with little or no human supervision. In such continuous-process industries as petroleum refining and chemical manufactureand in many modern automobile-engine plants, assembly lines arecompletely mechanized and consist almost entirely of automatic, self-regulating equipment.

Many products however are still assembled by hand because manycomponent parts are not easily handled by machines, as they beenexpensive and somewhat inflexible, as such semi-automatic assembly

machines are economical to produce a high level of output in thatcase.

As this is the case of building assembly automations Samtel Machineshas well expertise in the field with much competency and has executedmany projects to our valuable customers giving them the bestautomation assembly machines for the execution of their target instipulated time period.

Welding Automations

Application:

Welding of wheel rims, body frames


Welding is a fabrication process that joinsmaterials, usually metals orthermoplastics, by causing coalescence.This is often done by melting the work

pieces and adding a filler material to forma pool of molten material (the weld pool)that cools to become a strong joint, withpressure sometimes used in conjunction with heat, or by itself, toproduce the weld. This is in contrast with soldering and brazing, whichinvolve melting a lower-melting-point material between the workpieces to form a bond between them, without melting the work pieces.

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Many different energy sources can be used for welding, including a gasflame, an electric arc, a laser, an electron beam, friction, andultrasound. While often an industrial process, welding can be done inmany different environments, including open air, under water and in

outer space.

However, welding remains dangerous, and precautions must be takento avoid burns, electric shock, eye damage, poisonous fumes, andoverexposure to ultraviolet light.

Samtel Machines has a vast experience of welding automations as itmastered the technology

Floor Conveyors (Idle Roller, Power Roller, Chain, Belt,

Slat etc.)

Application:

Transfer of materials


A conveyor system is a common piece ofmechanical handling equipment thatmoves materials from one location toanother. Conveyors are especially usefulin applications involving thetransportation of heavy or bulkymaterials. Conveyor systems allow quickand efficient transportation for a widevariety of materials, which make themvery popular in the material handling andpackaging industries. Many kinds ofconveying systems are available, and are

used according to the various needs of different industries.

Warehouse

The company has a centralized warehousing, cutting and packingfacilities installed at one of its units. Standard processes, strictadherence to quality norms and regular maintenance is carried out atthe warehousing end as well

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PRODUCTS & SERVICES

Special Purpose Machines:

Design Engineering and Manufacturing of Special purpose Machines.

Automation solutions:

Design and build production and assembly lines and customautomation machines of any size or capability specializing in high-speed processes and assembly equipment.

Robot integration:

Articulate robots and gantries. Design of end effectors for hot andfragile applications, SCADA and central control rooms for small tomedium lines.

Contract manufacturing:

Component level and sub-assembly system manufacturing services.

Control engineering solutions:

Design of control panels, PLC, CNC software and dedicated controller

Purchase procedure:

A systematic procedure for purchase of raw materials helps inbuying materials quickly with consistency. In general, purchaseprocedure of an organization includes the following aspects.

RECEIVING PURDHASE REQUISITION:

The purchase department cannot buy the materials on its own asit will not be aware of what materials are required, their quantity,quality and other details. Therefore, it will have to be intimated aboutthe materials required by those departments which are in need ofmaterials. This is done through purchase requisition. The purchasemanager comes to know the details of materials required by theconcern through the purchase requisitions. Purchase requisition isprepared by the store keeper for materials requirements which are not

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available in the store. This requisition has to be approved by head ofthe department in addition to the head of department in person who isoriginating the requisition.

STUDUING THE MARKET AND CHOOSING THE

SUPPLIER

The purchase department generally maintains a list of suppliersand other details for each type or group of materials. Tenders /quotations may be invited from these suppliers. The comparativestatement of various quotations is to be prepared and the best supplieroffering most favorable terms should be selected. When selecting aparticular supplier, the purchase departments supply of requiredquantity.

Reliability for supply of quantity Price quoted Financial position of the supplier Terms of payment Reputation of the supplier Discounts offered

ISSUING PURCHASE ORDER AND FOLLOWING UP OF

DELIVERY SCHEDULES:

Once the supplier is selected the purchase order is to beprepared. The purchase order is the written commitment frompurchase department to buy the materials and authorization to thesupplier to supply materials. It is the contract between the buyer andseller for stated terms and condition. The supplier is committed tosupply and make payment. It is also an authorization to goodsreceiving departments to accept the invoice for payment to thesupplier.

Generally, five copies of the purchase order are prepared andused as follows:

One copy is sent to the supplier. The purchase department retains one copy.

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One copy is sent to the store keeper/department, which hasrequisition materials.

One copy is sent to the receiving department. One copy is sent to the accounts department.

The purchase order provides detailed information to the supplierregarding price, quantity, delivery terms, etc. It reduces the purchasingand clerical work into a routine.

RECEIVING AND INSPECTION OF MATERIALS:

In large organization there may be a separate department forreceiving the materials. But in this organization, this may be entrustedto the store keeper.

FUNCTION OF RECEIVING DEPARTMENT:

Keeping purchase order files in a systematic way. Receiving and unpacking of materials sent by supplier under

various challans. Verifying the materials received by comparing with purchase

orders. This includes checking quantity, quality, andphysical condition of material.

GOODS RECEIVED NOTE:

Preparing a goods received note (GRN), entering the details ofmaterials received for the information of all those concerned withmaterials.

Generally, five copies of goods received are purchase and used asgiven below:One copy is retained by the goods receiving department.

Four copies are to the store keeper along with materials. Thestore keeper will verify the entries with actual goods Countersign them

and will send one copy to the purchase department; one copy to theaccount department; one copy to be department which initiated therequisition and one copy is retained by the store keeper.

VERIFYING AND PASSING SUPPLIERS INVOICE FOR

PAYMENT AND DEDUCTION OF TDS:

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Based on goods received note, purchases are verified and apayment is made to supplier. When the invoice is received from thesupplier, it is sent to the accounting department to check theauthenticity as well as accuracy. The quantity, price and amount

received are checked with reference to purchase order and goodsreceived note. If everything is found in order, the accounting sectionapproves the invoice for payment and the cashier makes the paymentas per the agreed.

TAX DEDUCTED AT SOURCE (TDS):

In certain specified case of income, tax should deduce at sourceby the person responsible for making payment of such income. As perrule, while making payment to the supplier TDS is deducted from thepayment at a certain rate and the actual amount is only paid to the

concerned supplier. Payment to contractors

Tax deduction at source on commission and brokerage

Tax deduction at sources on rent

Tax deduction at sources on fees for technical or professionalsservices

SALES DEPARTMENTS:

Selling is most characteristic feature of the modern marketing

system. It is important not only for increasing the profits ofbusinessman but also for making the goods and services available tothe consumers. The main object of production is to sell the goodsproduces. The efficiency of marketing efforts can be measured onlyfrom the volume of sales affected y a businessman.

According to the sec (1) of the sale of goods act, a contractof sale is a contract where by the seller transfers or agrees to transferthe property in goods to the buyer for a price. In simple sense, salemeans any transfer of property in goods by one person to another cashdeferred payment for any other valuable consideration.

BRANCHES OF SAMTEL COLOR LTD:

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These are the concerned branches of Samtel Group (picture tubes) in

the following countries namely,

1. Ulm (Germany) 3.Kota (Rajasthan) 5.Delhi

2. Ghaziabad 4.Gurgaon

6.Kanpur

7. Parwanoo (H.P.)

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CHAPTER- IIINTRODUCTION

Contents:

2.1 Introduction of Study

2.2 Objective of the Study

2.3 Research Methodology2.3.1 Research Design2.3.2 Nature of Data

2.3.3 Methods DataCollection

2.3.4 Research Tools

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2.1 INTRODUCTION

Financial statement:

A financial statement is an organized collection of data according to

logical and consistent accounting procedures. Its purpose is to convey

an understanding of some financial aspects of a business firm. It may

show a position at a moment of time as in the case of a balance sheet,

or may reveal a series of activities over a given period of time, as in

the case of an income statement.

Thus, the term financial statement generally refers to the basis

statements;

i) The income statement

ii) The balance sheet

iii) A statement of retained earnings

iv) A statement of charge in financial position in addition to the

above two statement.

Financial statement analysis:

It is the process of identifying the financial strength and weakness of

a firm from the available accounting data and financial statement.

The analysis is done by properly establishing the relationship

between the items of balance sheet and profit and loss account the

first task of financial analyst is to determine the information relevant

to the decision under consideration from the total information

contained in the financial statement. The second step is to arrange

information in a way to highlight significant relationship. The final

step is interpretation and drawing of inferences and conclusion. Thus

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financial analysis is the process of selection relating and evaluation of

the accounting data/information.

This studying contain following analysis:

1) comparative analysis statement

2) common-size analysis statement

3) Ratio analysis

4) Trend analysis.

1) Comparative financial statement:

Comparative financial statement is those statements which have been

designed in a way so as to provide time perspective to the

consideration of various elements of financial position embodied in

such statements. In these statements, figures for two or more periods

are placed side by side to facilitate comparison.

But the income statement and balance sheet can be

prepared in the form of comparative financial statement.

i) Comparative income statement:

The income statement discloses net profit or net loss on account of

operations. A comparative income statement will show the absolute

figures for two or more periods. The absolute change from one period

to another and if desired. The change in terms of percentages. Since,

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the figures for two or more periods are shown side by side; the reader

can quickly ascertain whether sales have increased or decreased,

whether cost of sales has increased or decreased etc.

ii) Comparative balance sheet:

Comparative balance sheet as on two or more different dates can be

used for comparing assets and liabilities and finding out any increase

or decrease in those items. Thus, while in a single balance sheet the

emphasis is on present position, it is on change in the comparative

balance sheet. Such a balance sheet is very useful in studying the

trends in an enterprise.

2) Common-Size Financial Statement:

Common-size financial statement are those in which figures reported

are converted into percentages to some common base in the income

statement the sales figure is assumed to be 100 and all figures are

expressed as a percentage of sales. Similarly, in the balance sheet, the

total of assets or liabilities is taken as 100 and all the figures are

expressed as a percentage of this total.

3) Ratio analysis:

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Ratio analysis is a widely used tool of financial analysis. The term ratio

in it refers to the relationship expressed in mathematical terms

between two individual figures or group of figures connected with each

other in some logical manner and are selected from financial

statements of the concern. The ratio analysis is based on the fact that

a single accounting figure by it self may not communicate any

meaningful information but when expressed as a relative to some

other figure, it may definitely provide some significant information the

relationship between two or more accounting figure/groups is called a

financial ratio helps to express the relationship between two

accounting figures in such a way that users can draw conclusions

about the performance, strengths and weakness of a firm.

Classification of ratios:A) Liquidity ratios

B) Leverage ratios

C) Activity ratios

D) Profitability ratios

A ) LIQUIDITY RATIOS :

These ratios portray the capacity of the business unit to meet its short

term obligation from its short-term resources (e.g.) current ratio, quick

ratio.

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i) Current ratio:

Current ratio may be defined as the relation ship between current

assets and current liabilities it is the most common ratio for measuring

liquidity. It is calculated by dividing current assets and current

liabilities. Current assets are those, the amount of which can be

realized with in a period of one year. Current liabilities are those

amounts which are payable with in a period of one year.

Current assets

Current assets = -------------------------

Current liabilities

ii) Liquid Ratio:

The term liquidity refers to the ability of a firm to pay its short-term

obligation as and when they become due. The term quick assets or

liquid assets refers current assets which can be converted into cash

immediately it comprises all current assets except stock and prepaid

expenses it is determined by dividing quick assets by quick liabilities.

Liquid assets

Liquid ratio = -------------------------

Liquid liabilities

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iii) Absolute liquidity ratio :

Absolute liquid assets include cash, bank, and marketable securities.

This ratio obtained by dividing cash and bank and marketable

securities by current liabilities.

Cash + bank +marketable

securities

Absolute liquidity ratio =----------------------------------------------

Current liabilities

B ) LEVERAGE RATIOS :

Many financial analyses are interested in the relative use of debt and

equity in the firm. The term solvency refers to the ability of a concern

to meet its long-term obligation. Accordingly, long-term solvency ratios

indicate a firms ability to meet the fixed interest and costs and

repayment schedules associated with its long-term borrowings. (E.g.)

debt equity ratio, proprietary ratio, etc.

i) Debt Equity ratio:

It expresses the relationship between the external equities and

internal equities or the relationship between borrowed funds and

owners capital. It is a popular measure of the long-term financial

solvency of a firm. This relationship is shown by the debt equity ratio.35


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greater the rate of turnover, the more efficient the management would

be (E.g.) stock turnover ratio, fixed assets turnover ratios etc.

i) Stock turnover ratio:

This ratio indicates whether investment is inventory is efficiently used

or not it explains whether investment in inventories in with in proper

limits or not. It also measures the effectiveness of the firms sales

efforts the ratio is calculated as follows.

Cost of goods sold

Stock turnover ratio =

-----------------------------

Average stock

Opening Stock + Closing

Stock

Average stock =

-----------------------------------------

2

ii) Fixed assets turnover ratio:

The ratio indicates the extent to which the investments in fixed assets

contribute towards sales. If compared with a pervious year. It indicates

whether the investment infixed assets has been judies or not the ratio

is calculated as follows.

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Net sales

Fixed assets turnover ratio = -------------------

Fixed assets

iii) Working capital turnover ratio:

Working capital turnover ratio indicates the velocity of the utilization of

net working capital. This ratio indicates the number of times the

working capital is turned over in the course of a year. It is a good

measure over trading and under-trading.

Net sales

Working capital turnover ratio = ----------------------------

Net working

capital

iv)Return on total assets:

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Profitability can be measured in terms of relationship between net

profit and total assets. It measures the profitability of investment. The

overall profitability can be known by applying this ratio.

Net profit

Return on total assets = -----------------------------

x100

Total assets

D) PROFITABILITY RATIOS :

The profitability ratios of a business concern can be measured by the

profitability ratios. These ratios highlight the end result of business

activities by which alone the over all efficiency of a business unit can

be judged, (E.g.) gross ratios, Net profit ratio.

i) Gross profit ratio:

This ratio expresses the relationship between Gross profit and sales. It

indicated the efficiency of production or trading operation. A high gross

profit ratio is a good management as it implies that cost of production

is relatively low.

Gross profit

Gross profit ratio = ----------------------------------- x 100

Net sales

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i) Net profit ratio:

Net profit ratio establishes a relationship between net profit (after

taxes) and sales. It is determined by dividing the net income after tax

to the net sales for the period and measures the profit per rupee of

sales.

Net profit

Net profit sales = ----------------- x 100

Net sales

iii) Expenses ratio:

This ratio establishes the relationship between various indirect

expenses to net sales.

a) ADMINISTRATIVE

EXPENSES

RATIO

:

Administ

rative expenses

Administrative expenses ratio =

------------------------------- x 100

Sales

b) SELLING &DISTRIBUTIONEXPENSESRATIO:

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Selling

&distribution expenses

Selling &distribution expenses ratio =

----------------------------------------- x 100

Sales

2.2 OBJECTIVES OF THE STUDY

The basic objective of studying the ratios of the

company is to know the financial position of the

company.

To know the borrowings of the company as well as

the liquidity position of the company.

To study the current assets and current liabilities so

as to know the shareholders could invest in Samtel

Color Ltd or not.

To study the profits of the business and net sales of

the business and to know the stock reserve for sales of

the business.

To know the solvency of the business and the

capacity to give interest to the long term loan lenders

(debenture holders) and dividend to the share holders.

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To study the balance of cash and credit in the organization.

2.3 RESEARCH METHODOLOGY:

2.3.1 Research design:

The descriptive form of research method is adopted for study.

The major purpose of descriptive research is description of state of

affairs of the institution as it exits at present. The nature andcharacteristics of the financial statements of Samtel Color Ltd have

been described in this study.

2.3.2 Nature of data:

The data required for the study has been collected from secondary

source .The relevant information were taken from annual reports,

journals and internet.

2.3.3 Methods of data collection:

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This study is based on the annual report of Samtel Color Ltd. Hence

the information related to, profitability, short term and long term

solvency and turnover were very much required for attaining the

objectives of the present study.

2.3.4 Tools applied:

To have a meaningful analysis and interpretation of various data

collected, the following tools were made for this study.

Ratio analysis

Common-size statement

Comparative statement

Trend analysis

CHAPTER- III43


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DATA ANALYSIS AND

INTERPRETATION

RATIO ANALYSIS:

Ratio analysis is a widely used tool of

financial analysis. The term ratio in it refers to the

relationship expressed in mathematical terms between two

individual figures or group of figures connected with each

other in some logical manner and are selected from financial

statements of the concern. The ratio analysis is based on the

fact that a single accounting figure by it self may not

communicate any meaningful information but when

expressed as a relative to some other figure, it may

definitely provide some significant information the

relationship between two or more accounting figure/groups

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is called a financial ratio helps to express the relationship

between two accounting figures in such a way that users can

draw conclusions about the performance, strengths and

weakness of a firm.

Classification of ratios:

A) Liquidity ratios

B) Leverage ratios

C) Activity ratios

D) Profitability ratios

A) Liquidity ratios:

These ratios portray the capacity of the business unit

to meet its short term obligation from its short-term

resources (e.g.) current ratio, quick ratio.

i)Current ratio :

Current ratio may be defined as the relation ship

between current assets and current liabilities it is the most

common ratio for measuring liquidity. It is calculated by

dividing current assets and current liabilities. Current assets

are those, the amount of which can be realized with in a

period of one year. Current liabilities are those amounts

which are payable with in a period of one year.

Current assets

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Current assets = -------------------------

Current liabilities

TABLE -1CURRENT RATIO:

CHART-1CURRENT RATIO

46

Year Current asset Currentliabilities

Ratio

2005-2006 63,232,294 27,943,268 2.26

2006-2007 96,699,412 28,547,982 3.38

207-2008 87,908,620 23,128,596 3.80

2008-2009 98,197,393 64,509,752 1.52

2009-2010 56,028,561 19,276,000 2.91


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0

0.5

1

1.5

2

2.5

3

3.5

4

2005-06 2006-07 2007-08 2008-09 2009-10

Current ratio

Interpretation and Analysis:

The above table and diagram shows that the current ratio in

the year 2005-06 was 2.26 and then in increases to 3.38 in

the year 2007-08, further move upwards to 3.80 and in the

year 2006-07 it slashed down to 1.52 and finally in the year

2008-09 it again moved up to 2.91.

The normal current ratio is 2:1. The above table shows

current ratio is more than 2% in all the first four years. But in

2008-2009 the current ratio is lower than the normal. This

shows that the company is enjoying credit worthiness.

ii) LIQUIDITY RATIO :

The term liquidity refers to the ability of a

firm to pay its short-term obligation as and when they47


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become due. The term quick assets or liquid assets refers

current assets which can be converted into cash immediately

it comprises all current assets except stock and prepaid

expenses it is determined by dividing quick assets by quick

liabilities.

Liquid assets

Liquidity ratio = -------------------------

Liquid liabilities

TABLE-2LIQUIDITY RATIO:

CHART-2LIQUIDITY RATIO:

48

Year Liquidityassets

Liquidityliabilities

Ratio

2005-2006 47,782,491.51 20,073,088.54 2.382006-2007 55,809,100.59 25,805,580.98 2.162007-2008 54,831,547.34 20,615,801.31 2.652008-2009 76,488,121.13 29,645,904.71 2.582009-2010 18,362,128.30 18,784,066.35 0.97


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0

0.5

1

1.5

2

2.5

3

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

Liquidity Ratio


The above table and diagram shows the liquidity ratio during

the study period except in the year 2009-2010 is more than

the normal (i.e.) 1:1.It was 2.38 in the year 2005-06 and

reached the highest in 2007-08 to 2.65 and then came down

to .97 in the year 2009-10.

Hence the firm is controlling its stock position

because there linear relationship between current ratio and

liquidity ratio.

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ii) ABSOLUTE LIQUIDITY RATIO:

Absolute liquidity assets include cash, bank, and

marketable securities. This ratio Obtained by dividing cash

and bank and marketable securities by current liabilities.

Cash + bank

+marketable securities

Absolute liquidity ratio =

----------------------------------------------

Current liabilities

TABLE-3ABSOLUTE LIQUIDITY RATIO:

50

Year Cash andsecurities

Currentliabilities

Ratio

2005-2006

1,002,474 27,943,268 0.03

2006-2007

1,496,467 28,547,982 0.05

2007-2008

332,231 23,128,596 0.01

2008-2009

3,225,488 64,509,752 0.05

2009-2010

260,094 19,276,000.47 0.01


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ii) PROPRIETARY RATIO :

Proprietary ratio relates to the proprietors funds to

total assets. It reveals the owners contribution to the total

value of assets. This ratio shows the long-time solvency of

the business it is calculated by dividing proprietors funds by

the total tangible assets.

Proprietors funds

Proprietary ratio = ---------------------------

Total tangible

assets

TABLE-5

PROPRIETARY RATIO:

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Opening Stock + Closing

Stock

Average stock =

-----------------------------------------

2

TABLE-6STOCK TURNOVER RATIO:

CHART-6

STOCK TURNOVER RATIO:

57

Year Cost of goods sold Average stock Ratio

2005-2006 147,163,123 4,186,860 35.142006-2007 141,793,483 2,142,590 66.172007-2008 154,284,918 4,065,741 39.082008-2009 195,951,080 13,599,668 14.402009-2010 105,517,193 15,166,139 6.95


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0

10

20

30

40

50

60

70

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

Stock Turnover

Ratio


The above table and diagram shows the relation

ship between costs of goods sold and average stock. During

the year 2006-07 it is 66.17% which shows higher position of

cost of goods sold. In the years of study it is shown above

that the cost of goods sold are almost 35-65times of the

average stock. But at the same time during 2009-10 it is only

6.95 which shows that more stock was remaining in the

company.

ii) FIXED ASSETS TURNOVER RATIO :

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iii) WORKING CAPITAL TURNOVER RATIO :

Working capital turnover ratio indicates the velocity of

the utilization of net working capital. This ratio indicates the

number of times the working capital is turned over in the

course of a year. It is a good measure over trading and

under-trading.

Net salesWorking capital turnover ratio = ----------------------------

Net working

capital

TABLE-8WORKING CAPITAL TURNOVER RATIO:

61

Year Net sales Net workingcapital

Ratio

2005-2006 169,056,118 35,289,026 4.792006-2007 173,869,782 68,151,430 2.552007-2008 179,231,321 64,780,024 2.77

2008-2009 225,250,870 33,687,641 6.692009-2010 113,095,288 36,752,561 3.08


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CHART-9TOTAL ASSETS TURNOVER RATIO:

0

0.1

0.2

0.3

0.4

0.50.6

0.7

0.8

0.9

2005-06 2006-07 2007-08 2008-09 2009-10

Total assets T/o Ratio


The above table and diagram shows the relation ship

between the total assets to net sales. During all the study

period years the relationship between sales to total assets is

high. The ratio increased from 0.44 (2005-06) to 0.68 (2006-

07) and then it was decreasing and reached to again 0.44 in

the year 2008-09 and raised to 0.81 in the year 2009-10 due

to the heavy fall in the sales. Thus the company's sales were

almost directly proportionately in the first three years of the

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study and then in the year 2008-09 it was adversely

affected.

v) CAPITAL TURNOVER RATIO :

This is a ratio which shows how much sales are

entertained from the capital. It shows how the sales are

attracted from the Proprietor's Fund.

Sales

Capital turnover ratio = -----------------------

Proprietors fund

TABLE-10CAPITAL TURNOVER RATIO:

65

Year Sales Proprietors funds Ratio

2005-2006 169,056,118 53,331,692 3.172006-2007 173,896,782 63,576,119 2.742007-2008 179,231,321 65,810,599 2.722008-2009 225,250,870 66,462,086 3.392009-2010 113,095,288 66,405,370 1.70


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D) PROFITABILITY RATIOS :

The profitability ratios of a business concern can be

measured by the profitability ratios. These ratios highlight

the end result of business activities by which alone the over

all efficiency of a business unit can be judged, (E.g.) gross

ratios, Net profit ratio.

i) GROSS PROFIT RATIO :

This ratio expresses the relationship between Gross

profit and sales. It indicated the efficiency of production ortrading operation. A high gross profit ratio is a good

management as it implies that cost of production is relatively

low.

Gross profit

Gross profit ratio = ----------------------------------- x 100

Net sales

TABLE-12GROSS PROFIT RATIO:

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The above table and diagram shows the relation ship

between the gross profit and net sales in percentage. During

2005-06 the gross profit position was 12.95% and in the very

next year it slashed down to 9.29% and again raised to

13.92% and since then it was decreasing and finally reached

the lowest to 6.70% in the year 2009-10. However it can be

noticed that the sales also reduced to about 50% in 2009-10

when compared to sales of 2008-09.

ii) NET PROFIT RATIO :

Net profit ratio establishes a relationship between net

profit (after taxes) and sales. It is determined by dividing the

net income after tax to the net sales for the period and

measures the profit per rupee of sales.

Net profit

Net profit sales = ----------------- x 100

Net sales

TABLE-13NET PROFIT RATIO:

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from Rs.179,231,321 to Rs.225,250,870. In the year 2008-09

cost of sales is 40.50%. There is heavy decrease in the other

incomes. In the year 2008-09 income increased from

Rs.231,044 to Rs.621,487.

TABLE-18

Common size income statement (2008-09 & 2009-10)

Inference:

79

Particulars 2008-2009

% 2009-2010

%

Income:

Sales 225,250,870

88.22 113,095,288

75.74

Other income 9,908,254 3.88 26,032,716 17.46

Closing stock 20,177,353 7.90 10,154,926 6.80

Total income 255,336,477

100 149,309,646

100

Expenditure:

Opening stock 7,021,983 2.75 20,177,353 13.52

Purchases 105,677,583

41.38 39,032,353 26.14

Direct expenses 103,428,867

40.50 56,462,413 37.82

Administrationexpenses

22,308,545 8.76 19,570,521 13.10

Selling Expenses 11,154,272 4.36 9,785,260 6.55

Depreciation 5,123,740 2.00 4,308,462 2.88

Total expenses 254,714,990

99.75 149,336,362

100.01

Net profit 621,487 0.25 (26716) (0.01)

Total 255,336,477

100 149,309,646

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Inference:

The common size balance sheet for the year 2009 to

2010 is as follows:Share capital figure remained constant

however their %age to net worth has increased from 56.12%

85

Particulars 2008-2009 % 2009-

2010

%

Sources of funds:Share capital 55,375,152 56.12 55,375,15

260.41

Reserves & surplus 11,056,934 11.21 11,030,218

12.03

Loan funds:

Secured loan 32,212,520 32.65 25,236,103

27.53

Unsecured loan 25,500 0.02 19,500 0.03

Total 98,670,106 100 91,660,9

73

100

Application of funds:Fixed assets 64,982,465 65.86 54,908,4

1259.90

Current assets & Loanand advancesCash & bank 1,573,364 1.59 260,095 0.28

Sundry debtors 67,142,698 68.05 41,001,210

44.73

Advances and deposits 9,297,978 9.42 4,612,330 5.03

Investments 6,000 0.01 -------- -----

Other assets 20,177,353 20.45 10,154,926

11.08

Total 98,197,393 99.52 56,028,561

61.13

current liabilities &provisions:

Less: Current liabilities 54,707,520 55.44 15,919,410

17.37

Expenses for provisions 9,802,232 9.93 3,356,590 3.66

Net Current assets 33,687,641 34.14 36,752,561

40.10

Total 98,670,106 100 91,660,973

100


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TABLE-24

Comparative income statement (2006-07 &2007-08)

Inference:The sales level has increased 2007 to 2008 in

3.07% .Other income of the company has decreased in

10.31%. The stock differential of the firm in the year of 2007

to 2008 is increased which is almost 533% of the last year.

The operating expenses were increased by 30.12% in both

88

Particulars 2006-2007 2007-2008 INC /DEC %

Income:

Sales 173,896,783

179,231,321 5334538.00 3.07

Other income 22,257,266 19,961,865(2295401.00) (10.31)

Closing stock 1,109,500 7,021,9835912483.00 532.90


206,215,169 8951621.00 4.54

Expenditure:

Opening stock 1,033,090 1,109,50076410.00 7.40


81,132,703 (29537754.00) (26.69)

Direct expenses 47,140,653 79,064,69831924045.00 67.72


18,864,268 24,545,8655681597.00 30.12

Selling Expenses 9,432,134 12,272,932 2840798.00 30.12Depreciation 650368 7,858,427

7208059.00 1108.30Total expenses 187,640,0

21205,984,1

2518344104.0

0 9.78Net profit /Loss 9,472,578 231,044

(9241534.00) (97.56)Total 197,263,5

48206,215,1

69 8951621.00 4.54


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The sales level has increased 2008 to 2009 in

25.68% .Other income of the company has decreased by

50.36%. The stock differential of the firm in the year of 2008

to 2009 is increased. The operating expenses are decreased

in 9.11% in both administration and selling and the net profit

of the year is increased.

TABLE-26

Comparative income statement (2008-09 & 2009-10)


2009-2010

INC / DEC %

Income:

Sales 225,250,870

113,095,288

(112155582.00) (49.79)

Other income 9,908,254 26,032,71616124462.00 162.74

Closing stock 20,177,353 10,154,926(10022427.00) (49.67)


149,309,646

(106026831.00) (41.52)

Expenditure:

Opening stock 7,021,983 20,177,35313155370.00 187.35


39,032,353(66645230.00) (63.06)

Direct expenses 103,428,867

56,462,413(46966454.00) (45.41)


22,308,545 19,570,521(2738024.00) (12.27)

SellingExpenses

11,154,272 9,785,260(1369012.00) (12.27)

Depreciation 5,123,740 4,308,462(815278.00) (15.91)

Totalexpenses

254,714,990

149,336,362

(105378628.00) (41.37)

Net profit /Loss 621,487 (26716)(648203.00) (104.30)

Total 255,336,477

149,309,646

(106026831.00) (41.52)

90


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96


2008-2009

INC /DEC

%

Sources of funds:Share capital 55,375,152 55,375,15

2 0 0.00Reserves & surplus 10,435,447 11,056,93

4 621,487 5.96Loan funds:Secured loan 40,741,814 32,212,52

0-

8,529,294 -20.93Unsecured loan ------ 25,500 25,500 100.00

Total 106,552,413

98,670,106

-7,882,30

7 -7.40Application of

funds:Fixed assets 41,772,38

964,982,46

523,210,0

76 55.56Current assets &

Loan and advancesCash & bank 326,232 1,573,364 1,247,132 382.28

Sundry debtors 58,873,736 67,142,698 8,268,962 14.05

Advances anddeposits

21,680,669 9,297,978 -12,382,69

1 -57.11Investments 6,000 6,000 0 0.00Other assets 7,021,983 20,177,35

313,155,37

0 187.35Total 78,204,998 98,197,39

319,992,39

5 25.56current liabilities

& provisions:Less: Current

liabilities19,777,355 54,707,52

034,930,16

5 176.62Expenses for

provisions

3,351,241 9,802,232

6,450,991 192.50Net Current assets 64,780,02

433,687,64

1-

31,092,383 -48.00

Total 106,552,413

98,670,106

-7,882,30

7 -7.40


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TABLE-30

Comparative balance sheet (2008-09& 2009-10)

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0

00

00

00

00

000

000

000

000

-2 2 2 2

00

-0000

2 2

-0000

00

-0000

2 2

-0000

00

Total income

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-20

0

20

40

60

80

100

120

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

Net profit

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TABLE-32

TREND BALANCE SHEET IN THE STUDY PERIOD (2005-06to 2009-10)

Inference:Trend Percentages of Balance Sheet is done by taking

100 as base for all financial years 2006 to 2010. Fixed assets

have been decreased during the period 2009-10.current

104

Particulars2005 2006 2007 2008 2009

Trend Trend Trend Trend Trend

Share capital 100101.467

4 105.2762105.276

2 105.2762Reserves and

surplus100 1394.37

7 1425.9481510.87

1 1507.221

Secured loans 100 259.9536 192.203

151.9654 119.0535

Un secured

loans100

100 0111.817

6 85.50756

Fixed assets 100128.749

5 106.3919165.506

7 139.8486

Other assets 100107.396

3 679.70681953.10

7 982.9662

Debtors 100150.312 138.7379 158.224 96.62074Cash and

bank balance100 148.678

8 32.54269156.948

1 25.94531Advances and

deposits100 161.544

6 115.559249.5587

6 24.58398Current

liability100 129.207

9 100.2653277.350

9 80.70667

Provisions 10037.2549

1 40.77806 119.274 40.84315


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assets, Current liabilities and provisions were fluctuating

during the study period. Therefore the balance sheet total

shows an increasing trend in the figures.

CHAPTER- IV

FINDINGS AND SUGGESTIONS

Contents:

4.1 Findings

4.2 Suggestions

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more than the base year in all other years of the

study period.

During 2005-06 it was 6.32% on sales and in 2006-07

it was 5.45. But in all other 3 years it is less than 1%

and even negative in the year 2009-10. This means

that either there is any defect in pricing the product

or excess non-value added expenditures which

reduces the net profit of the company. The sales of

the organization are also decreasing and hence

management must take care of the quality and

market situations into consideration to resolve the

issue so that it may bring good profits to the

organization.

The administration and selling expenses during 2009-

10 is very high when compared to previous year's

%age as they were in between 13-20% of sales. This

may also be one of the reasons to a net loss in that

year.

The sales figure increasing year after year. It

increased about Rs.48,40,665. Administrative and

other expenses were fluctuating. The other income of

the company was increased year by year.

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Net profit has been reduced from 100% to (0.25) %.

During the period of study the total income was less

than the total expenditure which is not good for the

company.

Share capital has been increased in 2006-07 and

after that it remained constant.

Sundry debtors have been fluctuating over the years.

It increased during the first four years of the study

period from 100% to 158.22% i.e. from 2005-06 to

2008-09 and then from there it decreased to 96.62%

in the year 2009-10

4.2 SUGGESTION

The company's profit over the years has been

decreasing when compared to previous years and

even it incurred loss in the last year. The company

must increase the profit in future. The company must

take steps to increase the profit level.

The Gross Profit ratio can be improved by increasingthe gross profit and the factors decreasing the grossprofit ratio should be thoroughly checked timely

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CONCLUSION AND BIBLIOGRAPHY

Contents:

5.1 Conclusion

5.2 Limitations of the Study

5.3 Bibliography

5.1 CONCLUSION:-

On studying the financial performance of Samtel ColorLtd. for a period of five years from 2005-06 to 2009-10, thestudy reveals that the financial performance is better.Samtel Color Ltd has been able to maintain optimal costpositioning. Despite price drops in various products, thecompany has been able to maintain and grow its marketshare to make strong margins in market, contributing to thestrong financial position of the company. The company was

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ANNEXURE

Contents:

6.1 Balance Sheet

6.2 Profit & Loss

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67177111 Financial Performance Analysis

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