FINANCIAL STATEMENT ANALYSIS AT BHARAT BAGS

Presented by:G.Sai Shirov,

5022-14-672-079,

NISHITHA DEGREE & PG COLLEGE.

INTRODUCTION Financial statement is an organized collection of

data according to logical and consisted

accounting procedures.

the financial analysis is on key figures in the

financial statements and the significant

relationships that exists between them.

DEFINITION Financial analysis is the process of identifying the financial

strengths and weakness of the firm by property establishing

relationships between the item of the balance sheet and the

profit and loss account. Financial analysis can be undertaken

by management of the firm, or by parts outside the firm.

Objectives

To provide a strong theoretical framework for analyzing

financial statements.

To study the financial position of the company and

operation of Bharat Bags.

To offer suggestions for improvement in the company.

To appraise financial soundness of the company.

Need of the studyo The study mainly attempts to analyze the financial

performance of the company selected for the study.

o There can be forecasting to evaluate the overall

performance of the Bharat Bags in future.

o The financial authorities can use this for evaluating their

performance in future, which will help to analyze financial

statements and help to apply the resources of the company

properly for the development of the company.

Methodology METHODOLOGY:- TYPES OF FINANCIAL STATEMENTS ADOPTED: Following two types of financial statements are

adopted in analyzing the firm financial position BALANCE SHEET. Profit and Loss statements.

TOOLS OF FINANCIAL STATEMENT ANALYSIS USED

The following financial analysis tools are used in order to interpret the financial position of the firm.

Methods of data collectionData we collected based on two sources: primary data. secondary data.• Primary data : The primary data are those information’s which are

collected afresh and for the first time, thus happen to be original in character.

• Secondary data : The secondary data are those which are already collected

by some agencies reports the source of secondary data are annual, browsing, through magazines.

Company profileCompany name - Bharat BagsEstablished year - 1980Chairman - Sri Bhoopendar ParmarClass - private companyActivity type -Manufacturing and selling of BagsRegistrar - Nizamabad

Bharat Bags is a expert quality production located in Nizamabad. The capacity of the factory is tons 1lakh. The machinery of the factory are of brands like Bharat & Toffee.

DATA INTERPRETATION Current Ratio during the year

06-07 is the 1.57. In the next year 2007-08 it was maximum 1.58 and in the year 2008- 09 it was 1.46. In the year 2009-10 the current ratio is 1.39 and in the last year 2010--11 the current ratio decreased to 1.30.

The ideal value of current ratio 2:1, but during the period of study, the current ratio is lesser than the standard. This shows the current ratio to shows a do down ward which indicates the inefficiency of the company to meet its current obligations.

2006-07

2007-08

2008-09

2009-10

2010-2011

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Current Ratio

Current Ratio

Net Profit Interpretation It is found that the net

profit has been fluctuating during the study period. In the year 2006-07 the net profit ratio was 9.2%. In the year 2007-08 it was increased to 11.6%. In the next year 2008-09 it was further increased 12.9%. During the year 2009-10 there was a slight increases to 13.4%. During the year 2010-11 the net profit ratio was 11.20%. 2006-2007 2007-2008 2008-2009 2009-2010

0

2

4

6

8

10

12

14

16

FINDINGS

• Current ratio shows a document trend indicating the company not

able to fulfill current obligations furthers this also indicate that

liquidity position of the company is less satisfactory.

• In all the five years the liquid ratio is higher than the ideal ratio of 1

Common size financial statements clearly shoes the firm allocates

half of the total current assets to debtor.

• Sales shows the increasing trend at the rate in every year.

SUGGESTIONS :- The current ratio of the company is below the standard

ratio in all the 5 years under study , Hence it should be improved at least to the standard.

The debt collection period is more than 180 days which is to be reduced or the debt collection policy of the company is to be changed.

  Suitable training may be imparted to all the executives

including laborers as and when they are recruited. 

CONCLUSION:- BHARAT BAGS is developing corporate social

responsibility such as self Employment generation,

Environment protection, Education apart also.

The company may take one of the measures for improving

more profits, sale should be enhanced from into end

through innovative marketing techniques.

THANK YOU