Final Report 09-11

8/6/2019 Final Report 09-11

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A

PROJECT REPORT

ON

STERLITE TECHNOLOGICAL LIMITED

BY

RAVI KANT SHARMA

P.G.D.B.M.-SEMESTER-IV

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE

POST GRADUATE DIPLOMA IN BUSINESS MANAGEMANT

SUBMITTED TO

UNIVERSITY OF PUNE

(2008-10)

PRESTIGE COLLEGE OF MANAGEMENT & TECHNOLOGY


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PROJECT REPORT

(FINANCE)

STERLITE TECHNOLOGICAL LIMITED

(Optical Fiber Division)

FINANCIAL OVERVIEW OF OPTICAL FIBER AND OPTICAL FIBER

CABLE COMPANIES

INTERNATIONAL INSTITUTE OF MANAGEMENTSCIENCES PUNE

(Post Graduate Management Program)

(Post Graduate Diploma in Business

Management)


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(2008-2010)

Subm

itted by

Ravi

kant Sharma

Roll

Number - 156


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Acknowledgement

I take the opportunity with great pleasure to plot the circle of warm complement

deep sense of gratitude and profound thanks to all those who have spend their

valuable time and given me their cooperation to make project complete.

First of all I would like to express my sincere thanks to my

internal guide Mr ashok Gandhi ,Senior Finance Manager of Strlite optical

technological limited for his efforts, continuos proper guidance ,supervision

and generous co-operation through out the work which enable to present this

project report.

I would be failing in my duty, if I do not express my heartiest

thanks to my lecturer and co-ordinator department for giving all possible

support suggestion and its valuable time in preparing this project report.

Last but not the least I am grateful to my parents and friendwho always encourage to do summer training efficiently and effectively


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Preface

As an essential and obligatory part of my course undergone 45 Days month

complete summer training at STERLITE TECHNOLOGIES LIMITED. This

training helps me in getting practical knowledge into business environment.

I got practical knowledge about STERLITE TECHNOLOGIES

LIMITED. I have more emphasis on training programmed in STERLITE, this

project report give all information about collection, comparative analysis withrivals and customers companies and recommendation on the basis of financial

data.

In this project report I gave all the information which is not only

serve comprehensive knowledge and reader can easily understand the

fundamental relation about subject.


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Declaration

I Ravi Kant Sharma hereby declare that the project entitled financial overview

of optical fiber & optical fiber cable companies with STERLTE

TECHNOLOGIES LIMITED which has been personally done by me under the

guidance of Mr .Abhay khulage Head of purchase department in STERLTE

TECHNOLOGIES LIMITED during academic year 2008-2010 all the data

represented in this project is true and correct to the best of my knowledge and

belief. This work has not been submitted for any other degree/diploma exam.


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Objective of summer project:-1) Collection and comparative analysis of financial data of rivals and

customer companies across India and recommendation

My first and important objective is to collect all relevant financial

data i.e. (Optical fibre and optical fibre cable companies) and

customer companies i.e. (optical fibre cable and telecom

companies) of India.

Collection of financial data like:-Balance sheet, Profit and loss a/c,

annual report, Ratio analysis, Raw material description, andquarterly, half yearly and yearly reports.

After collection of these data I did comparative analysis Of the

following type of companies:-

Our company Rivals and customers

Sterlite

technologies(opticalfibre)

Optical fibre cable

companies(customer) an opticalfibre companies(Rivals)

Sterlite

technologies(OFC)

Optical fibre cable

companies(Rivals) and Telecom

companies(Customers)

Comparative analysis on the basis of ratio analysis, trend analysis

and other financial tactics.

Scope:-

Comparative analysis of rival and customer companies across

India.


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Company Profile:

Description:

Sterlite Technologies Limited, formerly Sterlite Optical Technologies Limited, is

an India-based company. The Company is a global manufacturer of wire and

cable solutions for the telecom and power industries. Some of its products

include aluminum conductors (advanced audio coding (AAC)/ aluminum

conductor, steel reinforced (ACSR)), optical fiber, fiber optic fiber, jelly filled

telephone cable and broadband access networks. It is also a provider of

telecommunication cables and power transmission conductors. The Company

sells its telecom and power products in over 60 countries. It offers a range of

end-to-end optical fibers for a variety of applications in telecommunication

networks. The Company also offers a range of structured cables for premise

networks. In addition, it offers a range of end-to-end power conductors for

transmission and distribution in power networks.

Executive Directors

Executive Chairman - Mr Anil Agarwal

Deputy Executive Chairman1 - Mr Navin Agarwal

Chief Executive Officer2 - Mr M S Mehta


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Comp

anies vision mission and value:

1) Mission: Based on industry and customer requirements, we strive todevelop a portfolio of quality product and solution through the effective

use of information technology and six sigma and a sustain focus on

intellectual property and the environment.

2) Vision: We will be among top three manufacturers in the world by 2010

in terms of market share for all our product line.

3) Values: Excellency creativity, integrity, responsibility and respect.

PRODUCTS OF STERLITE TECHNOLOGIES LIMITED:

Optical fibers

Fiber optics cable

Copper telecom cables
http://www.sterlitetechnologies.com/solutions/passivesolutions.aspxhttp://www.sterlitetechnologies.com/solutions/coppertelecom.aspxhttp://www.sterlitetechnologies.com/solutions/fibercables.aspxhttp://www.sterlitetechnologies.com/solutions/opticalfiber.aspx


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Telecom integration and

managed service

OPTICAL FIBERS

An optical fiber(orfibre) is a glass orplastic fiber that carries light along its

length. Fiber optics is the overlap of applied science and engineering

concerned with the design and application of optical fibers. Optical fibers are

widely used in fiber-optic communications, which permits transmission over

longer distances and at higher bandwidths (data rates) than other forms of

communications. Fibers are used instead of metal wires because signals travel

along them with less loss, and they are also immune to electromagnetic

interference. Fibers are also used for illumination, and are wrapped in bundles

so they can be used to carry images, thus allowing viewing in tight spaces.

Specially designed fibers are used for a variety of other applications, including

sensors and fiber lasers.

Light is kept in the core of the optical fiber by total internal reflection. This

causes the fiber to act as a waveguide. Fibers which support many propagationpaths or transverse modes are called multi-mode fibers (MMF), while those

which can only support a single mode are called single-mode fibers (SMF).

Multi-mode fibers generally have a larger core diameter, and are used for

short-distance communication links and for applications where high power must

be transmitted. Single-mode fibers are used for most communication links

longer than 550 metres (1,800 ft).

Optical fibers cable :

An optical fiber cable is a cable containing one or more optical fibers. The

optical fiber elements are typically individually coated with plastic layers and

contained in a protective tube suitable for the environment where the cable will

be deployed
http://en.wikipedia.org/wiki/Glasshttp://en.wikipedia.org/wiki/Plastichttp://en.wikipedia.org/wiki/Lighthttp://en.wikipedia.org/wiki/Applied_sciencehttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Fiber-optic_communicationshttp://en.wikipedia.org/wiki/Bandwidth_(computing)http://en.wikipedia.org/wiki/Attenuationhttp://en.wikipedia.org/wiki/Electromagnetic_interferencehttp://en.wikipedia.org/wiki/Electromagnetic_interferencehttp://en.wikipedia.org/wiki/Sensorhttp://en.wikipedia.org/wiki/Fiber_laserhttp://en.wikipedia.org/wiki/Core_(optical_fiber)http://en.wikipedia.org/wiki/Total_internal_reflectionhttp://en.wikipedia.org/wiki/Waveguide_(optics)http://en.wikipedia.org/wiki/Transverse_modehttp://en.wikipedia.org/wiki/Multi-mode_fiberhttp://en.wikipedia.org/wiki/Single-mode_fiberhttp://en.wikipedia.org/wiki/Cablehttp://en.wikipedia.org/wiki/Optical_fiberhttp://www.sterlitetechnologies.com/solutions/ims.aspxhttp://en.wikipedia.org/wiki/Plastichttp://en.wikipedia.org/wiki/Lighthttp://en.wikipedia.org/wiki/Applied_sciencehttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Fiber-optic_communicationshttp://en.wikipedia.org/wiki/Bandwidth_(computing)http://en.wikipedia.org/wiki/Attenuationhttp://en.wikipedia.org/wiki/Electromagnetic_interferencehttp://en.wikipedia.org/wiki/Electromagnetic_interferencehttp://en.wikipedia.org/wiki/Sensorhttp://en.wikipedia.org/wiki/Fiber_laserhttp://en.wikipedia.org/wiki/Core_(optical_fiber)http://en.wikipedia.org/wiki/Total_internal_reflectionhttp://en.wikipedia.org/wiki/Waveguide_(optics)http://en.wikipedia.org/wiki/Transverse_modehttp://en.wikipedia.org/wiki/Multi-mode_fiberhttp://en.wikipedia.org/wiki/Single-mode_fiberhttp://en.wikipedia.org/wiki/Cablehttp://en.wikipedia.org/wiki/Optical_fiberhttp://en.wikipedia.org/wiki/Glass


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CABLE TYPES

OFC: Optical fiber, conductive

OFN: Optical fiber, nonconductive

OFCG: Optical fiber, conductive, general use

OFNG: Optical fiber, nonconductive, general use

OFCP: Optical fiber, conductive, plenum

OFNP: Optical fiber, nonconductive, plenum

OFCR: Optical fiber, conductive, riser

OFNR: Optical fiber, nonconductive, riser

OPGW: Optical fiber composite overhead ground wire

SPEED: Fiber optic networks operate at high speeds - up into the gigabits

BANDWIDTH: large carrying capacity DISTANCE: Signals can be transmitted further without needing to be

"refreshed" or strengthened.

RESISTANCE: Greater resistance to electromagnetic noise such as radios,

motors or other nearby cables.

MAINTENANCE: Fiber optic cables costs much less to maintain.

STRETEGIES:

Our core values of growth, entrepreneurship, excellence, trust andsustainability not only encompass our business philosophy, but also underline

our relationships with all our stakeholders, shape the culture of our company

and guide us in our actions and decisions.
http://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_nonconductive&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive,_general_use&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_nonconductive,_general_use&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive,_plenum&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_nonconductive,_plenum&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive,_riser&action=edit&redlink=1http://en.wikipedia.org/wiki/Optical_fiber,_nonconductive,_riserhttp://en.wikipedia.org/wiki/Optical_fiber_composite_overhead_ground_wirehttp://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_nonconductive&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive,_general_use&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_nonconductive,_general_use&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive,_plenum&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_nonconductive,_plenum&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Optical_fiber,_conductive,_riser&action=edit&redlink=1http://en.wikipedia.org/wiki/Optical_fiber,_nonconductive,_riserhttp://en.wikipedia.org/wiki/Optical_fiber_composite_overhead_ground_wire


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Integral to our business philosophy

Sustainability is integral to our business philosophy. We see the key drivers of

our approach as being: proactive engagement with our stakeholders; attracting

and retaining the best talent; our provision of a safe and healthy working

environment; our focus on using environmentally friendly technologies in all of

our businesses and our drive to conserve natural resources.

Conservation of natural resources

This is a fundamental aspect of everything we do. We have set ambitious

targets at each of our businesses to use less resources. Our water and energy

conservation performance has been promising and has exceeded our targets in

some instances. This area will continue to be an area of focus in the coming

years.

Our local communities

We believe we have a responsibility to engage with the communities in which

we operate and to foster their social and economic development. These

principles are embedded across the organization and are a key element of ouremployee training, development and performance at all levels.

Our people

Our people are our key asset and drive our overall performance. Our vision is

to build a flexible, agile and flat organization with world-class capabilities and a

high-performance culture. Respect for the individual, valuing diversity, fostering

entrepreneurship, ensuring an enabling environment and developing a can do

attitude is a way of life at Vedanta.

Health and safety

Vedanta is committed to achieving best practice in health and safety at all of

our sites. Our systems are well established and are regularly reviewed and


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monitored taking into account our own experiences and industry best practice.

Knowledge-sharing around Vedantas companies plays an important part in this

process

Policies:

We aim to:

Develop, implement and maintain environment management systems aligned

with our commitments and beliefs and consistent with world-class standards;

Comply as a minimum with all applicable legislative and statutory

requirements;

Conserve natural resources, raw materials, water and energy by processimprovements, recycling and reducing and re-using waste;

Seek continual improvements through setting and reviewing targets,

assessing and reporting environmental performance, applying best practices

and providing all employees with relevant training;

Encourage contractors and suppliers to adopt our principles and practices;

and

Implement regular health surveillance and risk-based monitoring of

employees.

PEOPLE AND COMMUNITY

Our people and community policies, which are applied across all of our group

companies, are to:


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Be a significant contributor to addressing social needs within the communities

in which we operate;

Create sustainable partnerships to support our local communities;

Strive to actively enter into dialogue and engagement with our stakeholders;

Follow a philosophy of meritocracy. We are committed to ensuring that our

workplaces are free from all forms of discrimination or harassment relating to

age, caste, sex, ethnic origin or religion;

Manage our businesses in a fair and equitable manner, meeting all our social

responsibilities as a direct and indirect employer and respect the human rights

of all of our stakeholders;

Have robust processes and systems in place to foster leadershipdevelopment, learning and growth and to deliver value to the organization and

society;

Provide employees with the opportunity to report matters which transgress or

contravene our Code of Conduct;

Ensure that our supplier and customer relationships are conducted in a fair,

proper and transparent manner;

Strive to achieve and drive forward industry best practice in our social

stewardship;

Be a responsible and good neighbor; and

Align our activities with the principles in the Convention on the Rights of the

Child of the United Nations and Convention 138 of the International Labor

Organization

Research methodology:

For carrying out the study of this particular topic the data has been collected

basically by two major sources these are:


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(a)Primary sources:-

Primary source consist of the basic information collected from staff

people of various department, the officers as well as managers of Sterlite

technology limited. It has been collected by consulting.

(B)Secondary sources:-

Secondary sources consist of the data and information collected

are annual reports, balance sheet, profit and loss a/c, ratio analysis, Quarter-

half yearly reports, from magazines , journal & from internet .

But at the time of collecting data I felt that internet and books these

two sources is most effective source to collect information about all the

companies.

Data interpretation:

Tools and Techniques of Financial Statement Analysis:

Following are the most important tools and techniques of financial statement

analysis:

1. Horizontal and Vertical Analysis


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2. Ratios Analysis

1. Horizontal and Vertical Analysis:

Horizontal Analysis or Trend Analysis:

Comparison of two or more year's financial data is known as horizontal

analysis, or trend analysis. Horizontal analysis is facilitated by showing

changes between years in both dollar and percentage form.

Trend Percentage:

Horizontal analysis of financial statements can also be carried out by

computing trend percentages. Trend percentage states several years'

financial data in terms of a base year. The base year equals 100%, with all

other years stated in some percentage of this base.

Vertical Analysis:

Vertical analysis is the procedure of preparing and presenting common size

statements. Common size statement is one that shows the items appearing

on it in percentage form as well as in dollar form. Each item is stated as a

percentage of some total of which that item is a part. Key financial changes and

trends can be highlighted by the use of common size statements.

2. Ratios Analysis:

Accounting Ratios Definition, Advantages, Classification and Limitations:

The ratios analysis is the most powerful tool of financial statement analysis.

Ratios simply means one number expressed in terms of another. A ratio is a

statistical yardstick by means of which relationship between two or various

figures can be compared or measured. Ratios can be found out by dividing one

number by another number. Ratios show how one number is related to

another.

Profitability Ratios:

Profitability ratios measure the results of business operations or overall

performance and effectiveness of the firm. Some of the most popular

profitability ratios are as under:
http://www.accountingformanagement.com/horizontal_analysis_or_trend_analysis.htmhttp://www.accountingformanagement.com/trend_percentages.htmhttp://www.accountingformanagement.com/vertical_analysis_full.htmhttp://www.accountingformanagement.com/financial_statement_analysis_accounting_ratios.htmhttp://www.accountingformanagement.com/horizontal_analysis_or_trend_analysis.htmhttp://www.accountingformanagement.com/trend_percentages.htmhttp://www.accountingformanagement.com/vertical_analysis_full.htmhttp://www.accountingformanagement.com/financial_statement_analysis_accounting_ratios.htm


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Gross profit ratio

Net profit ratio

Operating ratio

Expense ratio

Return on

shareholders

investment or net

worth

Return on equity

capital

Return on capital

employed

Dividend yield ratio

Dividend payout

ratio

Earnings Per

Share Ratio

Liquidity Ratios:

Liquidity ratios These are the ratios which measure the short term solvency of

financial position of a firm. These ratios are calculated to comment upon the

short term paying capacity of a concern or the firm's ability to meet its current

obligations. Following are the most important liquidity ratios.

Current ratio

Liquid / Acid test / Quick ratio

Activity Ratios:

Activity ratios are calculated to measure the efficiency with which the resources

of a firm have been employed. These ratios are also called turnover ratios

because they indicate the speed with which assets are being turned over into

sales. Following are the most important activity ratios:

Inventory / Stock turnover ratio Debtors / Receivables turnover ratio

Average collection period

Creditors / Payable turnover ratio

Working capital turnover ratio

Fixed assets turnover ratio
http://www.accountingformanagement.com/gross_profit_ratio.htmhttp://www.accountingformanagement.com/net_profit_ratio.htmhttp://www.accountingformanagement.com/operating_ratio.htmhttp://www.accountingformanagement.com/expense_ratio.htmhttp://www.accountingformanagement.com/retun_on_share_holders_investment_or_net_worth.htmhttp://www.accountingformanagement.com/retun_on_share_holders_investment_or_net_worth.htmhttp://www.accountingformanagement.com/retun_on_share_holders_investment_or_net_worth.htmhttp://www.accountingformanagement.com/retun_on_share_holders_investment_or_net_worth.htmhttp://www.accountingformanagement.com/return_on_equity_capital.htmhttp://www.accountingformanagement.com/return_on_equity_capital.htmhttp://www.accountingformanagement.com/return_on_capital_employed.htmhttp://www.accountingformanagement.com/return_on_capital_employed.htmhttp://www.accountingformanagement.com/dividend_yield_ratio.htmhttp://www.accountingformanagement.com/dividend_payout_ratio.htmhttp://www.accountingformanagement.com/dividend_payout_ratio.htmhttp://www.accountingformanagement.com/earnings_per_share_ratio.htmhttp://www.accountingformanagement.com/earnings_per_share_ratio.htmhttp://www.accountingformanagement.com/current_ratio.htmhttp://www.accountingformanagement.com/liquid_ratio.htmhttp://www.accountingformanagement.com/stock_turn_over_ratio.htmhttp://www.accountingformanagement.com/debtors_or_receivable_turnover_ratio.htmhttp://www.accountingformanagement.com/average_collection_period.htmhttp://www.accountingformanagement.com/creditors_payable_turnover_ratio.htmhttp://www.accountingformanagement.com/working_capital_turnover_ratio.htmhttp://www.accountingformanagement.com/fixed_assets_turnover_ratio.htmhttp://www.accountingformanagement.com/gross_profit_ratio.htmhttp://www.accountingformanagement.com/net_profit_ratio.htmhttp://www.accountingformanagement.com/operating_ratio.htmhttp://www.accountingformanagement.com/expense_ratio.htmhttp://www.accountingformanagement.com/retun_on_share_holders_investment_or_net_worth.htmhttp://www.accountingformanagement.com/retun_on_share_holders_investment_or_net_worth.htmhttp://www.accountingformanagement.com/retun_on_share_holders_investment_or_net_worth.htmhttp://www.accountingformanagement.com/return_on_equity_capital.htmhttp://www.accountingformanagement.com/return_on_equity_capital.htmhttp://www.accountingformanagement.com/return_on_capital_employed.htmhttp://www.accountingformanagement.com/return_on_capital_employed.htmhttp://www.accountingformanagement.com/dividend_yield_ratio.htmhttp://www.accountingformanagement.com/dividend_payout_ratio.htmhttp://www.accountingformanagement.com/dividend_payout_ratio.htmhttp://www.accountingformanagement.com/earnings_per_share_ratio.htmhttp://www.accountingformanagement.com/earnings_per_share_ratio.htmhttp://www.accountingformanagement.com/current_ratio.htmhttp://www.accountingformanagement.com/liquid_ratio.htmhttp://www.accountingformanagement.com/stock_turn_over_ratio.htmhttp://www.accountingformanagement.com/debtors_or_receivable_turnover_ratio.htmhttp://www.accountingformanagement.com/average_collection_period.htmhttp://www.accountingformanagement.com/creditors_payable_turnover_ratio.htmhttp://www.accountingformanagement.com/working_capital_turnover_ratio.htmhttp://www.accountingformanagement.com/fixed_assets_turnover_ratio.htm


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Over and under trading

Long Term Solvency or Leverage Ratios:

Long term solvency or leverage ratios convey a firm's ability to meet the

interest costs and payment schedules of its long term obligations. Following are

some of the most important long term solvency of leverage ratios.

Debt-to-equity ratio

Proprietary or Equity ratio

Ratio of fixed assets to shareholders funds

Ratio of current assets to shareholders funds

Interest coverage ratio

Capital gearing ratio

PROFITABILITY RATIOS OF OPTICAL FIBER CABLE

COMPANIES:

a)Gross profit ratio: Gross profit ratio (GP ratio) is the ratio ofgross profit to net sales expressed as a percentage. It expresses

the relationship between gross profit and sales.

Formula:

Gross profit ratio = (Gross profit / Net sales) 100
http://www.accountingformanagement.com/over_and_under_trading.htmhttp://www.accountingformanagement.com/debt_equity_ratio.htmhttp://www.accountingformanagement.com/equity_ratio.htmhttp://www.accountingformanagement.com/fixed_assets_to_proprietors_fund_ratio.htmhttp://www.accountingformanagement.com/current_assets_to_proprietors_fund_ratio.htmhttp://www.accountingformanagement.com/interest_coverage_ratio.htmhttp://www.accountingformanagement.com/capital_gearing_ratio.htmhttp://www.accountingformanagement.com/over_and_under_trading.htmhttp://www.accountingformanagement.com/debt_equity_ratio.htmhttp://www.accountingformanagement.com/equity_ratio.htmhttp://www.accountingformanagement.com/fixed_assets_to_proprietors_fund_ratio.htmhttp://www.accountingformanagement.com/current_assets_to_proprietors_fund_ratio.htmhttp://www.accountingformanagement.com/interest_coverage_ratio.htmhttp://www.accountingformanagement.com/capital_gearing_ratio.htm


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Net Profit Ratio (NP Ratio):

Definition of net profit ratio:

Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed

as percentage.The two basic components of the net profit ratio are the net

companies 2004 2005 2006 2007

Beol -27.78 8.7 5.89 2.5

HFCL -33.78 -22.19 -49.82 13.22paramount 15.15 21.65 18.70 3.80

sterlite -46.09 11.32 9.51 7.29

Tvs -12.11 3.64 -12.12 -11.29

UM 11.43 13.08 15.01 14.46

Uniflex -28.9 -60.98 -19.5 11.73

Universa; -1.14 6.62 11.31 11.34VTL -8.65 4.51 4.54 9.62


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profit and sales. The net profits are obtained after deducting income-tax and,

generally, non-operating expenses and incomes are excluded from the net

profits for calculating this ratio

Companies 2004 2005 2006 2007 2008

BEOL -45.49 1.02 2.45 -1.13 0.71

HFCL -35.2 -39 -121.88 9.79 -44.03

Paramount 7.49 12.09 11.00 1.29 0.14

sterlite -19.82 3.1 7.37 4.2 5.94

TVS -38.72 -33.17 -28.12 -37.07 22.53

UM 1.95 3.43 5.23 7.19 8.68

Uniflex -35.46 -74.82 60.27 79.69 -7.23

Operating Ratio:

Definition:


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Operating ratio is the ratio of cost of goods sold plus operating expenses to

net sales. It is generally expressed in percentage. It measures the cost of

operations per dollar of sales. This is closely related to the ratio of operating

profit to net sales. Operating expenses normally include (a) administrative andoffice expenses and (b) selling and distribution expenses. Financial charges

such as interest, provision for taxation etc. are generally excluded from

operating expenses

Operating ratio = (Operating cost / Net sales) 100

Companies 2004 2005 2006 2007 2008

BEOL -52.63 -3.5 2.33 -2.84 2.42

HFCL -22.27 -17.54 -47.72 15.92 -16.58

Paramount

16.55

22.79

19.94

5.88 5.36

Sterlite -38.65 13.27 11.59 9.62 12.3

TVS -3.02 7.79 -5.11 -6.68 -0.03

UM 20.73 19.02 20.7 19.51 19.63

Uniflex -15.22 -41.64 -19.76 19.58 2.41

Universal 0.48 8.5 12.34 12.64 10.82

VTL -24.24 -5.8 0.97 -1.91 1.2


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Return on Shareholders Investment or Net Worth Ratio:

It is the ratio of net profit to share holder's investment. It is the relationship

between net profit (after interest and tax) and share holder's/proprietor's fund.

This ratio establishes the profitability from the share holders' point of view. Theratio is generally calculated in percentage. The two basic components of this

ratio are net profits and shareholder's funds. Shareholder's funds include equity

share capital, (preference share capital) and all reserves and surplus belonging

to shareholders.

[Return on share holder's investment = {Net profit (after interest and tax) /

Share holder's fund} 100]


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Return on Capital Employed Ratio (ROCE Ratio):

Capital employed and operating profits are the main items. Capital employed

may be defined in a number of ways. However, two widely accepted definitions

are "gross capital employed" and "net capital employed". Gross capital

employed usually means the total assets, fixed as well as current, used in

business, while net capital employed refers to total assets minus liabilities. On

the other hand, it refers to total of capital, capital reserves, revenue reserves

(including profit and loss account balance), debentures and long term loans.

[Return on Capital Employed=(Adjusted net profits*/Capital

employed)100]

2004 2005 2006 2007 2008

Companies 2004 2005 2006 2007 2008

BEOL -15.14 1.05 3.2 -0.92 1.34

HFCL -17.55 -13.12 -25.9 16.95 -38.58Paramount

15.35

22.53

39.74

3.44 0.52

sterlite -7.56 3.92 12.28 12.21 18.66

TVS -13.11 -27.7 -19.4 -22.46 13.78

UM 3.63 9.07 10.98 14.07 16.76

Uniflex 4.67 11.3 8.9 7.9 -19.19

Universal -4.55 4.2 11.69 13.97 10.29

VTL -5.22 0.19 0.59 1.3 1.26


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BEOL -7.51 1.46 0.86 -1.88 2.86

HFCL -7.59 -4.45 -29.64 9.46 -5.15

PARAMOUNT 18.37 23.34 57.68 10.19 6.21

STERLITE -13.77 5.18 6.5 8.8 15.02

TVS -3.93 -0.6 -6.54 -6 -6.17

UM 7.59 12.33 14.65 13.78 14.04

UNIFLEX -19.83 -27.8 -23.79 3.54 1.91

UNIVERSAL -1.79 8.41 16.85 16.36 13.42

VTL -2.79 0.5 0.84 0.88 2.25

Definition::Earnings Per Share (EPS) Ratio:


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Earnings per share ratio (EPS Ratio) is a small variation of return on equity

capital ratio and is calculated by dividing the net profit after taxes and

preference dividend by the total number of equity shares.

[Earnings per share (EPS) Ratio = (Net profit after tax Preferencedividend) / No. of equity shares (common shares)]

Companies 2004 2005 2006 2007 2008

BEOL -3.34 0.23 0.74 -0.21 0.31

HFCL -8.47 -5.15 -

26.41

2.53 -3.5

Paramount 3.53 4.41 19.42 1.09 0.15

Sterlite -3.38 1.83 6.93 8.26 15.62

Tvs -

28.64

-

32.95

-

22.18

-

20.97

14.93

Um 4.19 11.04 14.68 21.2 5.79

Uniflex -

22.44

-

18.26

17.29 17.01 -3.69

Universal -2.08 1.96 8.27 9.5 7.46

Vtl -9.65 0.36 1.09 2.46 2.42


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LIQUIDITY RATIOS OF OPTICAL FIBER CABLE COMPANIES:

Current Ratio:

Definition:

Current ratio may be defined as the relationship between current assets and

current liabilities. This ratio is also known as "working capital ratio". It is a

measure of general liquidity and is most widely used to make the analysis for

short term financial position or liquidity of a firm. It is calculated by dividing thetotal of the current assets by total of the current liabilities.

[Current Ratio = Current Assets / Current Liabilities]


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Companie

s

2004 2005 2006 2007 2008

BEOL 8.63 6.41 3.47 2.9 1.71

HFCL 1.71 1.49 1.25 1.63 1.26

Paramoun

t

3.40

4.57

2.46

1.79

1.94

sterlite 0.76 0.83 0.76 0.69 0.65

tvs 1.39 0.45 0.58 0.39 0.45

Um 0.96 0.85 1.05 0.85 0.92

uniflex 0.63 0.29 0.23 5.42 13.7

2

Universal 0.86 0.86 1.14 1.12 0.89

Vtl 3.6 3.16 3.44 3.09 2.28


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Liquid or Liquidity or Acid Test or Quick Ratio:

Definition:

Liquid ratio is also termed as "Liquidity Ratio", "Acid Test Ratio" or "Quick

Ratio". It is the ratio of liquid assets to current liabilities. The true liquidity refers

to the ability of a firm to pay its short term obligations as and when they

become due.

[Liquid Ratio = Liquid Assets / Current Liabilities]

Companies 2004 2005 2006 2007

BEOL 5.77 5 4.4 3.86

HFCL 2.86 2.95 1.78 2.81

Paramou 1.70 2.90 1.36 0.71

sterlite 0.72 0.83 1.69 2.13

tvs 5.21 1.65 1.66 1.19

um 0.93 0.9 0.78 0.65

uniflex 0.83 0.99 1.04 7.99

Universal 1.25 1.31 1.42 1.13

vtl 9.91 6.87 5.61 5.18


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Debtors Turnover Ratio | Accounts Receivable Turnover Ratio:

Debtors turnover ratio or accounts receivable turnover ratio:

indicates the velocity of debt collection of a firm. In simple words it indicates

the number of times average debtors (receivable) are turned over during a

year.

[Debtors Turnover Ratio = Net Credit Sales / Average Trade Debtors]


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Fixed Assets Turnover Ratio:

Definition:

Companie

s

2004 2005 2006 2007 2008

BEOL 1.38 6.88 8.02 5.11 6.58

HFCL 1.25 0.85 1.51 1.7 0.47

Paramou 0 0 0 0 0

sterlite 4.09 5.55 4.33 4.11 3.54

tvs 0.93 1.74 2.93 1.94 2.46

um 3.49 4.19 4.73 4.16 3.87

uniflex 3.8 3.32 5.79 3.27 4.83

Universal 7.36 6.91 6.95 6.94 6.86

vtl 1.43 5.25 5.73 2.7 10.8

3


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Fixed assets turnover ratio is also known as sales to fixed assets ratio. This

ratio measures the efficiency and profit earning capacity of the concern. Higher

the ratio, greater is the intensive utilization of fixed assets. Lower ratio means

under-utilization of fixed assets. The ratio is calculated by using followingformula:

Fixed Assets Turnover Ratio = Cost of Sales / Net Fixed Assets

Companies 2004 2005 2006 2007 2008

BEOL 0.52 1.86 2.83 1.8 1.25

HFCL 2.1 1.15 2.44 4.11 0.75

Paramou 126.23 54.08 29.21 25.81 27.27

sterlite 0.24 1 1.83 3.1 1.83

Tvs 0.85 1.19 1.28 0.92 0.65

Um 0.88 1.32 1.33 1.32 0.99

LEVERAGE

RATIO FOR OPTICAL FIBER CABLE COMPANIES:

Debt to Equity Ratio


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Debt-to-Equity ratio indicates the relationship between the external equities or

outsiders funds and the internal equities or shareholders funds. It is also known

as external internal equity ratio. It is determined to ascertain soundness of

the long term financial policies of the company. [De

bt Equity

Ratio =

External

Equities /

Internal

Equities]

Debt Service Ratio or Interest Coverage Ratio:

2004 2005 2006 2007 2008

BEOL 0.78 0.55 0.56 0.53 0.63

HFCL 0.66 0.82 4.1 1.88 3.03

PARAMOUNT

0.86

0.77

0.19

0.19

0.25

STERLITE 0.67 0.56 0.73 1.42 1.23TVS 2.05 1.83 1.18 1.04 1.09

UM 2.05 1.83 1.18 1.04 1.09

UNIFLEX -- -- 1.907 2.47 1.77

UNIVERSAL 0.47 0.71 0.38 0.63 0.87


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Interest coverage ratio is also known as debt service ratio ordebt service

coverage ratio. This ratio relates the fixed interest charges to the income

earned by the business. It indicates whether the business has earned sufficien

profits to pay periodically the interest charges. It is calculated by using thefollowing formula.

Companie

s

2004 2005 2006 2007 2008

BEOL -

17.36

9.34 3.72 -5.26 1.6

HFCL -1.75 -1.77 -

20.9

1

4.78 -1.27

Paramou 0 0 0 0 0

Sterlite -3.94 2.01 2.76 2.64 4.07

Tvs -1.28 -0.17 -1.68 -1.43 -1.02

Um 1.23 2.11 2.35 2.63 3.03

Uniflex -1.37 -2.25 -

18.8

3

1.09 0.22

Universal -0.85 3.33 6.61 6.3 2.85

Vtl -

24.69

2.4 3.2 78.0

5

2.18


35/43

Other financial data

There are some other but very important financial data also which I alsoHad to look for

COMPANYNAME COMPANY TYPE WEB SITE ADDRESS CONTACT NUMBER

D-U-N-SNUMBER

DanaHolding

Corporatio

nPublicHeadquarter www.dana.comDana Holdin

Phone: 419-

535-450080910535

1

P.O.box1000

Toll Free: 800-

472-8810

Toledo,Ohio 43697

Fax: 419-535-

4643
http://www.dana.com/http://www.dana.com/http://www.dana.com/


36/43

CASH FLOW STATEMENT

Dec-08 Dec-07 Dec-

Net operating cash flow -1019 -52 5Net investing cash flow -144 348 -7

Net financing cash flow 705 166 -4Net change in cash -454 462 -6

Depreciation & Amortization 66Capital expenditure -250 -254 -31Cash dividends paid 18

HISTORICAL FINANCIAL DATA

YEAR REVENUE(MIL.$) NET

INCOME(MIL. $)

NET PROFIT

MARGIN

EMPLOYE

Dec-08 8095 18 0.20% 29000

Dec-07 8721 -551 35000

Dec-06 8504 -739 45000

Dec-05 8611 -1609 44000

Dec-04 9056 82 0.90% 45900

Dec-03 7918 222 2.80% 59000


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Dec-02 9504 38 0.40% 60900

Dec-01 10271 -298 70000

Conclusion on the

basis of data

interpretation:

As an acustomer

UM ,Universal

and sterlite

these three

doing better

business, so we

can easily

recover our

credit amount

from them.

And as an

competitor UM

and Universal

both the

companies will

have capacity to

capture moremarket share of

Sterlite so, Sterlite will have to do something different so, that they will be

a market leader.

OBESERVATION AND FINDING:

PRODUCT

Automotive

Axles

Chassis

DriveshaftsEngine sealing products

Steering and suspension componentsStructural products

Thermal management products

Commercial Vehicle

Axles

BrakesChassis and suspension modules

Driveshafts

Engine sealing products

Thermal management products

Off-Highway

Axles

Brakes

DriveshaftsElectronic controls


38/43

After calculating all the ratios of optical fiber companies I get to know that

following companies performing well in their respective area:

FINDINGS:

1) POSITIVE FINDING

As an a customer UM,Universal and sterlite these three

companies doing well business, so we can easily recover our

credit amount from them means Sterlite technologies

limited manufacturer of optical fiber can recover credit

amount easily or as early as possible.

2)NEGATIVE FINDING:

And as an competitor UM and Universal both the companies

will have capacity to capture more market share of Sterlite.

Other companies like TVS, UNIFLEX and PARAMOUNT are

also showing significant improvement in their respective

business but still they have to work hard to achieve highest

position in their area. On the basis of financial data I get to

know that these companies are small competitors for

STERLITE and we can not easily collect our credit amount

from them

OBESERVATIONS:

Sterlite technology is performing well in his respective area of

optical fiber and optical fiber cable manufacturing.

On the basis of my observation I get to know that Sterlite

technologies limited exports is near by domestic transaction

means his domestic transaction is 53% and his exports is

47%.

Most of the vendors of Sterlite technology limited are foreigncompanies.

All the employees of Sterlite technologies limited are only

professional.

Daily interactions with foreign people and companies to

expand his business well.


39/43

My observation in that company related to financial data

management is as follows:

Well management of sale data which is called as

a ANTI DUMPING DATA

Well management of fund which is called as a

FUND INVOLVEMENT DATA from that we get to

know that what is budgeted fund and what is

actual fund spend for all the thing like; WIP, RAW

MATERIAL,STORES,MATERIAL IN TRANSIT

etc.

Particulars Budgeted Actual

Finish goods

WIP

Raw material

Stores

Materila in transit

TOTAL INNVENTORY

Debtor

Loans and advances

Tax

GROSS

INVOLVEMENT

Total liability


40/43

NET INVOLVEMENT

Allocation of apportionment of expenditure from that we get to know

profit and loss of that particular year.

Particular Amount

Raw Material

Labour

Manufacturing OH

Administration OH

Selling and distributionDepreciation

Financial expenses

Other miscellaneous expenses

TOTAL EXPENSES(1)

Sales

Other IncomeTOTAL INCOME(2)

PROFIT AND LOSS(2-1)

Then the monthly summery Of domestic and exports transaction so it is

easy to understand that monthly expenses

Name Qty Sum of

excise

Sum of cess Sum of

education

cess

Sum of centra

sales tax

Domestic - - - - - -

IUT - - - - - -

Sample

domestic

- - - - - -


41/43

Scrap - - - - - -

Exports - - - - - -

Sample - - - - - -


42/43

Limitations of Ratios Analysis:

The ratios analysis is one of the most powerful tools of financial management.

Though ratios are simple to calculate and easy to understand, they suffer from

serious limitations.

1. Limitations of financial statements: Ratios are based only on the

information which has been recorded in the financial statements.

Financial statements themselves are subject to several limitations. Thus

ratios derived, there from, are also subject to those limitations. For

example, non-financial changes though important for the business are not

relevant by the financial statements. Financial statements are affected to

a very great extent by accounting conventions and concepts. Personal

judgment plays a great part in determining the figures for financial

statements.

2. Comparative study required:Ratios are useful in judging the efficiency

of the business only when they are compared with past results of the

business. However, such a comparison only provide glimpse of the past

performance and forecasts for future may not prove correct since several

other factors like market conditions, management policies, etc. may affect

the future operations.

3. Ratios alone are not adequate: Ratios are only indicators, they cannot be

taken as final regarding good or bad financial position of the business.

Other things have also to be seen.

4. Problems of price level changes: A change in price level can affect the

validity of ratios calculated for different time periods. In such a case the

ratio analysis may not clearly indicate the trend in solvency and

profitability of the company. The financial statements, therefore, be

adjusted keeping in view the price level changes if a meaningful

comparison is to be made through accounting ratios.

5. Lack of adequate standard: No fixed standard can be laid down for ideal

ratios. There are no well accepted standards or rule of thumb for all ratios


43/43

which can be accepted as norm. It renders interpretation of the ratios

difficult.

6. Limited use of single ratios: A single ratio, usually, does not convey

much of a sense. To make a better interpretation, a number of ratioshave to be calculated which is likely to confuse the analyst than help him

in making any good decision.

7. Personal bias: Ratios are only means of financial analysis and not an

end in itself. Ratios have to interpreted and different people may interpret

the same ratio in different way.

8. Incomparable: Not only industries differ in their nature, but also the firms

of the similar business widely differ in their size and accounting

procedures etc. It makes comparison of ratios difficult and misleading.

Limitation:

1) The study was limited to the particular sector

2) Time and resource constraint.

3) It has not been possible to get personal interview with the top

management employees of all optical fiber and optical fiber cable

companies.

Final Report 09-11

Documents

Transcript of Final Report 09-11