FINANCIAL PERFORMANCE FINANCIAL PERFORMANCE THROUGH THE RATIO ANALYSIS THROUGH THE RATIO ANALYSIS

OF OF KRISHNA MILK UNION LTD VIJAYAWADAKRISHNA MILK UNION LTD VIJAYAWADA

PRESENTED BY PRESENTED BY

CH.VIJAYA BABUCH.VIJAYA BABU

08481E005308481E0053

Objective of the study

• Primary objective:

To know the financial performance of the firm between 2004-

2009 through calculation of various ratios.

• Secondary objectives:

To find out the liquidity position of the firm.

To find out the solvency position of the firm.

To find out ability of firm in utilise the assets.

Industry Profile

India has the worlds largest cattle and buffalo population adapted to tropical eliminate and pure nutrition and environment.

Milk production gives employment to 70 million dairy farmers.

According to live stock census 1982, Indians bovine population was 191 million cattle and 69 million buffalos.

The surplus milk after meeting requirement of the liquid milk is being converted into products like food, milk powder, ghee, butter, sterilized milk, doodhpeda, etc.

APDDCF was firmed in October 1981.

APDDCF involve in procurement , production, processing and marketing.

APDDCF has got 6 product manufacturing units in the AP, namely;

Hyderabad.Chittor.Nandyala. (Kurnool).Proddutoor.Vaddlamudi.Vijayawada.

ORGANIZATION OF A DAIRY FIRM

o Housing

o Feeding

o Breeding

o Disease control

Krishna milk union is a district “co-operative came into existing in July 1983, registered KRISHNA DISTRICT MILK PRODUCERS MUTUALLY AIDED CO-OPERATIVE UNION LTD”.

Krishna milk union currently 515 functional dairy co-operations in villages and introduced from various chilling centers and district routes.

It is located in 27.3 acres.

The Krishna District Milk Products authorized capital Rs.5,00,000, at the time of started.

Paid up share capital is Rs.3,02,000.

It is also handled surplus milk received from district of VISAKHAPATNAM,EAST AND WEST GODAVARI,PRAKASAM AND NELLORE .

MISSION&VISSION

Mission: “Farmers’ prosperity through technical

innovations and customer orientation with specific focus on quality and cost”.

Vision:“Dairying in the district to be the major

instrument of strengthening rural economy and making available safe milk and milk products”.

Mission: “Farmers’ prosperity through technical innovations and customer orientation with specific focus on quality and cost”.Vision:“Dairying in the district to be the major instrument of strengthening rural economy and making available safe milk and milk products”.

RATIO ANALYSIS

DEFINITION• Ratio analysis is defined as the systematic use of

the ratio to interpret the financial statements.

• To know the company strengths and weaknesses.

• Ratio reflects a quantitative relationship helps to form a quantitative judgment.

TOOLS OF FINANCIAL ANALYSIS

• Comparative financial statements.• Common size financial statements.• Trend Analysis.• Ratio Analysis.• Cash Flow Statement.• Funds Flow Statement.

CLASSIFICATIONS OF RATIOS

There are mainly classified into three types of Ratios

• Traditional Classification:These ratios deals with the following

types.1) Balance sheet (or) position statement ratio2) Profit & loss account (or) revenue statement

ratios3) Composite (or) inter statement ratios

• Functional Classification:These ratios help the to know the firm

position. These are classified into the following.

1. Liquidity ratio2. Leverage ratio3. Activity ratio4. Profitability ratio

DATA ANALYSIS

CURRENT RATIO

QUICK RATIO

NET PROFIT RATIO

OPERATING PROFIT RATIO

INVENTORY TURNOVER RATIO

NET WORKING CAPITAL RATIO

DEBTORS TURNOVER RATIO

FINDINGS• The return on investment of KRISHNA MILK UNION is also

quite small satisfactory. Because the return on investment of KRISHNA MILK UNION is just at 0.10 (on an average).

• The debtors’ turnover ratio is also completely dissatisfaction for all the 5 years. It reveals that the debtors’ turnover ratio of KRISHNA MILK UNION for the past 5 years is at 17% (on an average).

• The fixed assets turnover ratio is not encouraged for all the 5 years. Since it is just two limes (approximately) for the first two years and it is with 0.75 for the rest of three years.

• There was no long term debts for the company.

SUGGESITIONS• The current ratio, quick ratio and absolute

liquid ratio of KRISHNA MILK UNION are below the standard 2:1, 1:1 and 0.5:1 respectively.

• The profitability position of KRISHNA MILK UNION is quite dissatisfactory since it is with minimum percentages.

• The Return On investment of KRISHNA MILK UNION for the past 5 years is not encouraged.