Manik and An

A STUDY ON FINANCIAL PERFORMANCE AND ANALYSIS IN SRI SOWDESWARI MILLS (P) LTD, JALAKANTAPURAMA project submitted to thePERIYAR UNIVERSITYIn partial fulfillment of the requirements For the award of the degreeMASTER OF BUSINESS ADMINISTRATIONSubmitted byP.MANIKANDANREGISTER NUMBER: P12MGT2027Under the guidance of Dr. T. SARATHY, BE (ECE)., M.B.A., Ph.D.Assistant ProfessorPRIMSPeriyar University, Salem.

PERIYAR INSTITUTE OF MANAGEMENT STUDIES (PRIMS)PERIYER UNIVERSITYSALEM 6360112013

BONAFIED CERTIFICATE

PERIYAR INSTITUTE OF MANAGEMENT STUDIES PERIYAR UNIVERSITYSALEM 636 011BONAFIDE CERTIFICATECertified that this project report titled A STUDY ON FINANCIAL PERFORMANCE AND ANALYSIS IN SRI SOWDESWARI MILLS PRIVATE LIMITED., JALAKANTAPURAM is the bonafide work of P.MANIKANDAN (REGISTER NUMBER : P12MGT2027 ) who carried out the project under my supervision . Certified further , that to the best of my knowledge the work reported here in does not from part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate,

DIRECTOR SUPERVISOR

Viva voice held on

INTERNAL EXAMINER EXTERNAL EXAMINER

DECLARATION

DECLARATIONI P.MANIKANDAN [REGISTER NUMBER : P12MGT2027 ] a student of Periyar Institute of Management Studies, Periyar University , Salem hereby declare that the Project work titled A STUDY OF FINANCIAL PERFORMANCE AND ANALYSIS IN SRI SOWDESWARI MILLS PRIVATE LIMITED., JALAKANTAPURAM submitted to the Periyar University in partial fulfillment of the requirement for the award of degree of MASTER OF BUSINESS ADMINISTRATION is a record of bonafide research carried out by me under the guidance of Dr.T.SARATHY, Assistant Professor, PRIMS, Periyar University, Salem and no part of it has been for any other degree or diploma

Place: (P.MANIKANDAN)Date: signature of the student

ACKNOWLEDGEMENT

ACKNOWLEDGEMENT

First of all I thank god and My Parents who have brought me to this position.It is my responsibility to express my thanks to Vice chancellor Dr.K.MUTHUCHELIAN, Periyar University, Salem, for encouragement me to do this project.I would like to convey my sincere thanks to Dr.N.RAJENDHIRAN, M.com, MBA., PhD. Professor cum Director, Periyar Institute of Management Studies (PRIMS), Periyar University, Salem-11 for his Valuable encouragement.I express my Deep Sense of gratitude Dr.T.SARATHY, B.E., M B A.,Ph.D. in Periyar Institute of Management Studies (PRIMS) , Periyar University, Salem-11. Who gave me constant inspiration and guidance throughout the Project work.My Sincere thanks to MR.R.GUNASEKARAN, ACCOUNTS MANAGER, FINANCIAL DEPARTMENT, SRI SOWDESWARI MILLLS, JALAKANTAPURAM, SALEM (DT) for giving the necessary facilities for the successive completion of the Project.I record My Sincere thanks to My Friend and all those who helped me to prepare the Project and helped me in getting the Project work beautiful Printed and bound.

CERTIFICATE

ABSTRACT

ABSTRACTThe study focuses about the financial performance of Sri Sowdeswari Mill Private Limited, Jalakantapuram, Salem and titled as A STUDY ON FINANCIAL PERFORMANCE AND ANALYSIS IN SRI SOWDESWARI MILLS PRIVATE LIMITED, JALAKANTAPURAM, SALEM undertaken at Sri Sowdeswari Mills Private Limited, Jalakantapuram, Salem. Financial analysis is to identify the strength and weakness of the firm by properly establishing relationships between the items of balance sheet and profit and loss account, and other operative data. The current study covers a period of five years (from 2009-2013).The study aims assessing the liquidity, profitability position of the firm. It analyzed by using the ratios, schedule of changes in working capital, and comparative balance sheets.The analysis reveals that the companys short term solvency position is not up to the optimal but long term and increase their current assets like cash and bank balance.

TABLE OF CONTENTS

CONTENTSCHAPTER NOTITLEPAGE NO

List of Tables

List of charts

Abstract

IGENERAL INTRODUCTION

1.1 Introduction of the study1

1.2 Introduction about industry2-6

1.3 About the company Profile7-29

IIREVIEW OF THE LITERATURE30-31

IIIINTRODUCTION TO THE STUDY

3.1 Objectives of the Study32

3.2 Scope of the Study33

3.3 Limitation of the study34

IVRESEARCH METHODOLOGY35-40

VDATA ANALYSIS AND INTERPRETATION41-76

VIRESULT

6.1 Findings77

6.2 Suggestion78

6.3 Conclusion79

BIBLIOGRAPHY80

APPENDIX81-82

LIST OF TABLES

LIST OF TABLESTABLENONAME OF THE TABLEPAGE NO

5.1.1NET PROFIT RATIO41

5.1.2OPERATING PROFIT RATIO43

5.1.3DEBTORS TURNOVER RATIO45

5.1.4FIXED ASSETS TURNOVER RATIO47

5.1.5TOTAL ASSETS TURNOVER RATIO49

5.1.6INVENTORY TURNOVER RATIO51

5.1.7CURRENT ASSET TURNOVER RATIO53

5.1.8WORKING CAPITAL TURNOVER RATIO55

5.1.9CURRENT ASSET RATIO57

5.1.10LIQUID ASSET RATIO59

5.2.1COMPARATIVE BALANCE SHEET 2009-201061

5.2.2 COMPARATIVE BALANCE SHEET 2010-201163



5.3.1STATEMENT OF CHANGES IN WORKING CAPITAL 2009-201069


5.3.3 STATEMENT OF CHANGES IN WORKING CAPITAL 2011-2012 72


LIST OF CHARTS

LIST OF CHARTSCHARTNONAME OF THE CHARTPAGE NO

5.1.1NET PROFIT RATIO42

5.1.2OPERATING PROFIT RATIO44

5.1.3DEBTORS TURNOVER RATIO46

5.1.4FIXED ASSETS TURNOVER RATIO48

5.1.5TOTAL ASSETS TURNOVER RATIO50

5.1.6INVENTORY TURNOVER RATIO52

5.1.7CURRENT ASSET TURNOVER RATIO54

5.1.8WORKING CAPITAL TURNOVER RATIO56

5.1.9CURRENT ASSET RATIO58

5.1.10LIQUID ASSET RATIO60





CHAPTER I

GENERAL INTRODUCTION

CHAPTER-I1.1 INTRODUCTION TO THE STUDY Financial statements are prepared primarily for decision making. They play a dominant role in setting the framework of managerial decisions. The term financial analysis, also known as analysis and interpretation of financial statements refers to the process of determining financial strengths and weaknesses of the firm by establishing strategic relationship between the items of the Balance sheet, profit and loss account and other operative data. Analyzing financial statements, according to Metcalf and Tigard, is a process of evaluating the relationship between component parts of a financial statement to obtain a better understanding of a firms position and performance. The purpose of financial analysis is to diagnoses the information contained in financial statements so as to judge the profitability and financial soundness of the firm.

1.2 INDUSTRIAL PROFILE INDRODUCTION ABOUT THE INDUSTRYTextile industry is the eldest and one of the firmly established major industries in the country producing a wide range of products for human consumption in India as well as abroad. Cotton textile industries is the largest industry in providing Employment about 20 million people. During 1992-1993, 138 lakhs bales of cotton valued at Rs.94 crores was produced. Out of this, 13 lakhs bales were exported during the same period. The position has greatly improved to 173.94 lakhs bales during 1992-1993 while the demand (or) total take is 133 lakhs bales. Indias share in the world trade of cotton exports is just 5% during 1992-1993. Cotton textile exports touched Rs.3884.64 crores. The basic tenant of Indias exports policy has been to exports which will take into consideration the interest of traders, mills and state agencies has to be implemented. In 1998 the cotton textile exports fall by 3% as a result of sharp fall in the export of Cotton yarn and knitted fabrics. The cotton exports during 2006 were to the tune of Rs.57.41 crores against Rs.46.83 crores in the previous year.

PRESENT CONDITION OF THE INDUSTRYThe growth of the cotton spinning sector, in terms of capacity, received an impetus in 1991 with the deli censing of spindle age. Installed spindle age has been rising steadily since then, in 1991, the number of spindles installed was around 26.27 million and the number went up to nearly 50 million in 1995 (in the non-SSI units). The total spindles installed by 2007 are estimated to have gone up to 400 millions.Cotton spun yam production (excluding blended and 100 percent non-cotton yarn declined from 2.213 million kg in 1997-98 but recovered to 2.266.86 million kg in 2000-01. Spindle capacity utilization, which was 76 percent in 1991-1992, had gone up to 86 percent in 1996-1997 fell to 79 percent in 2004-2005 before bouncing back to 83 percent in 2005-2006.As on march 31, 2006, the spinning capacity was 57, 41 million. During 2005-2006, while the power loom sector had consumed around 24 percent was exported.The cotton yarn spinning units could capitalize on the growth in yarn imports expected in key Asian destinations. According to the Chairman of Southern India mills Association (SIMA), there has been a revival both in the domestic and export makers. However, if the revival is to be sustained, certain issues need to be addressed, he feels. The Chairman of textile Exports Promotion Council says a major step needed is to reduce the cost of production. The cost of almost all components power, raw material, transport and labour has gone up during the last four or five years. Up to Rs.1776.54 kg. In order to make availability raw cotton of good quality at reasonable price, the price, the thrust is on integrated cotton farming now.

TEXTILE INDUSTRY IN INDIA Textile industry is the eldest and one of the firmly established major industries in the country producing a wide range of products from human consumption in India as well as abroad. Cotton textile industry is the largest industry in providing Employment to about 20million people. During 1992-1993, 138 lakhs bales of cotton valued at Rs.94 crores was produced. Our of the above 131 lakhs bales were exported during the same period. The position has greatly improved to 173.94 Lakhs bales during 1992-93 while the demand (or) total take off is 133 lakhs bales.Indias share in the world trade of cotton exports just 5 percent during 1992-93. The cotton textile exports touched Rs.3884.64 crores. The basic tenant of Indias exports policy has been to export only the surplus however a liberalized policy in cotton exports which will take into consideration the interest of traders, mills and state agencies has to be implemented. In 1998 the cotton textile exports fall by 3% as a result of sharply falls in the export of cotton yarn and knitted fabrics. Total cotton exports during 1998 were to the tune of Rs.14.216 crores against Rs.13.028 crores in the previous year.

PRESENT TREND OF THE INDUSTRY The growth of the cotton spinning sector, in terms of capacity, received an impetus in 1991 with the deli censing of spindle age, installed spindle age has been rising steadily since, in 1991. The number of spindles installed was around 26.27 million and the number went up to nearly 50 million in 1995 (in the non-SSI units). The total spindles installed by 2001 are estimated to have gone up to 35.53 million.The share of spinning capacity of south Indian mills (including small scale spinning units) in All India capacity is estimated to be around 50 per cent. As on march 31.2002. The spinning capacity of southern mills was 19.53 million spindles with the All India capacity was 38.33 million. During 2000-01, while the power loom sector had consumed nearly 42 per cent of the total cotton yarn produced, handlooms had consumed around 23 per cent was exported. During 1994-2002 some of the major destinations for Indian cotton yarn exports had been South Korea, Bangladesh and Hong Kong. According to a report on Achieving Breakthrough Growth in Cotton Textile Export, India has a large and modern spinning industry and a major portion of its capacity is in the organized sector. In 2001, it had shot up to Rs.232.63 a kgs. In order to make available raw cotton of good quality at reasonable price, the thrust is on integrated cotton farming now.

GROWTH AND DEVELOPMENT Even while there has been a steady rise in spindle age, there has been an increase in the number of mills that stopped production temporarily, and those closed and sick. While the number of closed mills (non SSI) was 130 in 1991-92 and 132 in 1994-95, it rose to 383 in 2000-01. There is a feeling that serious efforts should be made to identify and support mills that can be revived. The south India textile Research Association (SITRA) has done an ABC Analysis and submitted the report to the ministry of textile. According to SITRA, the study covered nearly 90 spinning mills (that are in operation) in the four southern states. The objective was to identify mills that could be revived with some support. They will be classified into A, B and C categories based on criteria such as financial performance during the last 10 year and the level of modernization.As a measure to find a solution for the problems of the units and ensure a level playing field, the industry has been demanding an unbreakable convert chain. Representatives of the spinning sector are of the opinion that a four percent excise duty on cotton yarns for a two or three year period will help the revival trend.With modernization and value addition at every stage including weaving and processing, domestic consumption of high quality yarn is bound to go up. With the restructuring of the sector, and the revival of the market, it is felt that the spinning units can be put back on the rails with immediate attention to these external factors and the problems faced at the factory level.

1.3 COMPANY PROFILE SRI SOWDESWARI MILLS PRIVATE LIMITED This Project work was carried out at SRI SOWESWARI MILLS PVT LTD is registered office 201-A, Tharamangalam Main Road, Jalakantapuram, Salem 636 501. It has been incorporated as private limited company, 1991 and the companies act, 1956. The factory is constructed in a modern type.PROMOTERS OF THE COMPANYR. Arthanari Cettiar,A. Kandasamy,R. Chokalingam,A. Padmanaban,A. Saravanan,P. Sivaraj Sri R. Arthanari Cettiar is the main promoter of the company, and he have good experience person in power loom fabric manufacture in jalakandapuram. At the time of incorporation of the company, the share capital was just Rs. 50Laks but now the authorized capital of the company is Rs. 85 Lakhs and the paid up capital is around Rs. 75 Lakhs. Thus company has a prosperous growth in its life time.

MILLS SITUATED ATSri Sowdeswari Mills Pvt Ltd,Near Kattampatti,Jalakantapuram, Salem (Dt).GENESIS AND DEVELOPMENT Ventured in 1995 the mill started with a spindle capacity of 3024 had grown into a unit having as installed of 15720 spindles.SRI SOWDESWARI MILLS PRIVATE LIMITED1. Name and Address of the Company : SRI SOWDESWARI MILLS PVT LTD, 201-A, Tharamangalam main Road, Jalakantapuram 636 501.

2. Registered and Administrative Office:JALAKANTAPURAM

3. State in which the company is registered:TAMIL NADU

4. Status:PRIVATE LIMITED COMPANY

5. Year of Commencement:19956. Type of Industry:100% cotton yarn production7. Mill Location:Near Kattampatti,Jalakantapuram,Salem 636 5018. Sales Office:381, Trichy main Road,Guai, Salem.9. The Management:The Board of Directors,B. Arthanari Chettiar,A. Padmanaban,A. Saravanan,R. Chockelingam P.Sivaraj10. Financial Institutions:The city union Bank,Jalakantapuram.11. Auditors:R. Gunasekaran.Chartered Accountants, Salem.

PRESENT PLAN: The Company is presently headed by Sri R. Arthanari Chettiar, Managing Director who is sincere, Motivated with hands on approach towards all issues and leading from the front. He is ably assisted by his sons A. Padmanaban and A. Saravanan. They have been involved in the running of the company for the past more than to decade and have acquired considerable knowledge in finance, textile and general management Sri A. Saravanan yen graduate GOAL OF THE COMPANYFUTURE PLAN The company is planned for a forward integration, in the area of weaving, knitting and processing and also garments manufacturing for exports with in a period of 3 years.GROUP STRENGTH The company directors have own Power looms and Auto looms to consumed their yarns used to 50% of the mill yarn production.FULFILLMENT OF SOCIAL RESPONSIABILITIES The Company has contributed its share to the well being of the social, it lends a helping towards the educational aids and medical contribution to the poor people by foundation of R..ARTHANARI CHETTIAR AND SIVAGAMI AMMAL CHARITABLE TRUST.

DEPARTMENT ACTIVITIES1. Receipts: Funds Transfer from Head office Cash with drawls Sale of scraps A.C. Sheet sales2. Payments: Validated & approved bill are paid on due dates through bank. Petty expenses are paid after verification by accounts officer & approved by works.PURCHASE / JOB WORK Purchase orders are screened & forwarded to work manager for approval. After Approval of purchase orders, GRN is raised against the material receipt at the stores. Supplier invoices is obtained & matched with PO & GRN then the process of ERP-Validation approves & crate accounting is carried out. Job works are certified by the concern HOD & approval by works manager. Approved job work bill works bills are verified and entered in the system. TDS & Service tax wherever applicable is provide then the process of ER-validation approval & create accounting is carried out.PART TIME MEDICAL OFFICER We are pleased to inform that Dr. S. parasuraman, M.B.B.S., will be visiting our factory on every Monday and Thursday between 3.00 pm and 4.00 pm. All are advised to check up their health, if required, and take advice from medical officer.SOURCES OF FINANCE:The finance of the company can be obtained from. Private Share Capital. Loans from bank & financial institutions.PRIVATE CAPITALS It means the capital sponsored by the board of directors (or) the founders of the organization (or) company.LOANS FROM BANK &FINANCIAL INSTITUTIONS: It means the capital raised from the banks (or) financial Institution the bankers and financial institution of the company are THE CITY UNION BANK respectively. The financial status of GSM is studied from the accounts department. The company started it business with their Own Capital. The Companys share capital is 2.85 crores. They also utilized reserves and surplus and loans.The companies maintain good accounting policies in the following areas. (1). Fixed asset. (2). Investments. (3). Inventories. (4). Sales. (5). Government grants. (6). Contingencies

SPINNING METERIALSTotal Machine: 16Machine Name: LAKHSMIModel: LR 6Year of Bought: 2004 and 2005Machine: 6Machine name: LMW C LakhsmiModel: LRG 5/1Year of Bought: 1995 TO 1998No. of Machines : 4Machine name : Lakhsmi LMWModel : LR 60Year of bought : 2012No. of machines : 6I Cops Weight: 86 to 96 gramsEmpty Cops Weight : 53 grams INPUT: Raving 270 per M/COUTPUT: Cop

PRODUCTION PROCESS CHART

Cotton

Mixing

Blow Room

Silver Ribbon LabCarding

ComberDrawing

Simplex

Spinning

DoublingCone WindingReeling

Yarn Go downBalingPacking

PRODUCTION PROCESSMixingThis department plays an important role. In this department, the various varieties of cotton are mixed, according to their length, strength, fineness and maturity to get the required counts of yarn i.e. 60s, 80s etc. Usually four buckets of water and one liter firm soap oil is sprayed on the spread cotton and kept for 24 hours before the next process.Blow RoomMixed cotton is cleaned by removing the foreign matters and waste. This may consist of seed coats, jute, etc. The output from this process is a uniform and clean sheet like form rolled in a rod and is known as LAP.CardingThe proverb of the experts says, well carded is half spun and effective carding, efficient spinning. All these 4 proverbs demonstrate that the immense significance of carding is the final result of the spinning operation.Carding Process The laps that are produced in a sheet form are sent to the carding section. The main aim of carding is to eliminate short fibers and also elimination of laps which are formed in the blow room. The process done here is completely open into individual fibers and the dirty foreign matter and nap are removed.Carded SliverThe sliver produced after normal carding in the form of long thread like fibers called as carded sliver. There carded slivers are sent to drawing the next stage.

Combined SliverThe combined slivers aim is to further remove short fibers and laps that are still present in it. The comber process means just like we comb over hair. In this combing process short fibers are removed and fibers are arranged in parallel formation. This combed sliver is the best quality of sliver then the carded.Sliver LapThe carding slivers are fed and by pressing them it is transformed into lab form. The output is called as Sliver Lap.Ribbon LapThe sliver lap is fed and by drafting process it is converted into a Ribbon Lap.ComberIt is the high quality process. In this process producing the high quality sliver. It is the next stage of carding. Then go to the sliver into the simplex and spinning. The main different between drawing and comber is producing the high quality combed yarn. Also 20% waste reduces than drawing process. - 20 slivers converted into single comber lap - Per comber lap producing time 7 minutes. - Per comber lap have 3.7 kgs weight - Get the output time of the comber sliver within 2.5 hours. 17

DrawingIt is the fourth stage in the manufacturing process. In this process eight slivers can be converted into singly sliver.Again 8 single can be converted into one sliver. There are 8 machines installed in the drawing room.Processing Time.Eight sliver completing time is 4 hours.Simplex Operation:Sliver is converted into Roving. In this process sliver size is decreased. There are 8 machines located in the simplex operation. Each machine has 120 spindles. Spindles mean rod or shaft rotating which twist the yarn.Processing Time40s and 41s output get within 2 hours.80s output get within 4 hours.Cone windingInputFinishing FormOutputSpinning Cop: Single Yarn on ConesPackingSpinning Cop: Doubled Yan Doubled WindingDoubling Cop: Double Yan on ConesPackingDoublingTwist the doubt thread into single thread. There are 32 doubling machines being the doubling section. Each machine has 400 spindles. Twist than yarn according to the order according to the order basis. For Example2 yarns X 40s Count = 2/40s2 yarns X 60s Count= 2/60sReelingThe yarn spindles are wound in hank from the process is called reeling. There are 36 machines installed in the reeling section. Each machine has 80 spindles.PackingPacking refers to the activities of designing and producing the container or wrapper for a product. There are two types of packing used are as under:i.Cone Packingii. Yarn packingAccording to the customer a requirement the packing is done by the packing department. Cone packing is done using manpower. For yarn packing, bale press machine is used.

PRODUCT TESTINGIt is the final testing in the product to find the imperfection. The buyers accept the 495-imperfection condition within the 100 kilometers yarn.U% 12.5Thin 25.0Thick 160.0Neps 297.5_______Total 495.0 It is accepted for the 80s combed yarn.NUMBER OF WORKERS The manpower details areTotal numbers of workers are-183Out of this, permanent workers-128Temporary workers- 55OFFICE STAFFNon Technical staff-10Technical staff-10Total-20ALLOCATION OF WORKERSThe worker in the company is working in different department as pet the details given below: Up to preparatory-21Spinning-46Cone Winding-30Doubling-17 Reeling-25Bundling / Packing- 7Maintenance & Cleaning-20Others-17Total- 183FORMATION OF SHIFT SYSTEMThe shift timing for general shift workers and staff category is Non TechnicalTechnicalMorning9.00 am to 1.00 pm8.00 pm to 1.00 pmAfternoon2.00 am to 6.00 pm2.00 pm to 5.00 pm

The Shift Working For Workers Are;1st Shift7.00 am to 3.00 pmwith half an hour break2nd Shift3.00 am to 11.00 pmwith half an hour break3rd Shift3.00 am to 11.00 pmwith half an hour breakANNUAL LEAVE WITH WAGES As per the provisions of the Factories Act, all the workers are provide with one day annual leave for the 20 worked days in the previous year. Apart from this, maximum 9 days of national & Festival holidays are allowed in a calendar year. They are Republic Day-1May 1st-1Independence Day-1Gandhi Jayanthi-1Pongal Day-2Mariamman Festival-1 (local holidays)Pooja Holiday-1Deepavali-1

PAYMENT OF WAGES / SALARYWAGESThe wages are disbursed to workers on 7th of every month by way of THE CITY UNION BANK ATM.SALARYThe salary to staff is being paid on 7th of every month by way of THE CITY UNION BANK ATM.STATUTORY BENEFITSPROVIDENT FUND The company is deducting 12% of basic plus dearness allowances of employees as employees contribution to provident fund and the company is contributing 12% as its contribution. In this, 3.67% goes to provident fund and the remaining 8.33% goes to family pension scheme.ESI SCHEME The company is deducting 1.75% on total wages and salary of employees as a contribution to ESI scheme and the company is contributing 4.75% as its contribution.The various benefits which the employees enjoying under this scheme are 1. Sickness Benefit 2. Maternity Benefit

An insured women is entitled to claim maternity benefit in case of1 Confinement2 Miscarriage 3Funeral Benefit 4 Disablement BenefitTAMIL NADU LABOUR WELFARE FUND All the employees have to contribute the prescribed amount to this fund every year. The benefits from this fund are1 Scholarship for workers children2 Funeral expenses up to Rs. 1000/- for the workers3 Medical facilitiesBONUS Bonus is provided to all workers, for the period of one year. It is given as per discussed with SIMA (South India Mill Owners Association) on the basic salary of previous year i.e. Basic, Dearness Allowance 20%LOAN In case of marriage, family function and any emergency expenses, workers are provided with loan. This loan is recoverable from their wage in monthly installments.

SAFETY MEASURES Adequate safety measures with water fire extinguisher are providing throughout the mill.UNIFORM Aprons and caps are providing to female workers. Male workers are providing with Banyans and Toreros. Free uniform is given permanent workers once in a year. Temporary workers purchase their union outside. The company will issues banyans and the cost will be deducted from their wages.UNION Trade union principle underlined in the above is that a group of persons whether workers or employees will have a better voice than an individual raising a loan voice.FACILITIES OR WORKERS1 Rs. 75 is given to each worker for medical allowances.2 Rs. 150 is given to each worker for housing rent.3 Tea and sacks is given free to all workers of night shift.4 Water coolers are provided for employees to use in the mill.5 First aid facilities are available.

INCREMENT The regular employers are eligible for increment on every year in January based on their job performance.Excluding casual workers, other workers are eligible for this increment.

CategoriesAmountBasis

WorkersRs. 3/- to Rs. 10/-(on daily wages)Once in 6 months

StaffRs. 500/-Yearly once

PROMOTION It is carried out in three stages and to become eligible for such promotion, all workers should have completed certain period of year in services.Workers6 months to 1 yearApprentice3 yearsConfirmation2 yearsWhen a worker employees all the stages have become a permanent workers.

WAGE STRUCTUREThe labours are classified as follows. unskilled labour Semi-skilled labour. Skilled labour Permanent labour.UNSKILLED TRAINEESNewly employed trainees who are yet to start training. They have only daily wage scheme which is around 25/day.SEMI-SKILLED TRAINEESThey are those in the training career and have the same daily wage structure.SKILLED TRAINEES:-Those who completed the training successfully are called skilled trainees. They are entitled to ex-gratia, cloth, wan etc. Their leave and absent during the year is taken into account for the annual increment. Their efficiency and job turn over plays an important factor in becoming a permanent worker.PERMANENT WORKERSThe workers who have been working for a period of 5years and above are considered to be permanent workers. The enjoy the benefit of.

WORKING HOURSThey are having 3 shifts/dayFirst Shift7A.M. to 3P.M.Second Shift3P.M to 11P.MThird Shift11P.M to 9 A.M.MEDICAL FACILITIESThey also extend their welfare towards the employee of their concern. Concessions are provided to the workers.LABOUR WELFARE FACILITYHospital, co-operating, society loan, provident fund was given to workers.FUNDS 3.67%- Provident Fund8.33%- Family FundBONUSLast years bonus 24%Minimum bonus 8.33%

IDENTIFICATIONIdentification card is given to each and every worker.White card- permanent workersAny color- Training workersINCREMENT BASESIncrements are paid to the workers which are as follows.

GRADERS.ABSENTEEISM

O5Up to 2 days

A4Up to 7 days

B3Up to 15 days

C2.50Up to 25 days

D1More than 25 days

EXPORT MARKET IN LOCAL The yarns have specific application which is manufacture according at the specifications of the buyers. This companys products are being sold into industrial consumers at local market in Erode Shevapet (Salem)DELIVERY GOODS In Sri Sowdeswari Spinning Mills Limited, are two types of delivery of goods. There areCONE & HANK.HANK Hank yarn in hand loom sectors are used to only of them. Yarn it is not a final product. Only semi-finished goods.

CHAPTER II

REVIEW OF LITERATURE

CHAPTER-II REVIEW OF LITERATUREFinancial performance analysis is vital for the triumph of an enterprise. Financial performance analysis is an appraisal of the feasibility, solidity and fertility of a business, sub-business or mission. Altman And Eberhart (1994) reported the use of neural network in identification of distressed business by the Italian central bank. Using over 1,000 sampled firms with 10 financial ratios as independent variables, they found that the classification of neural networks was very close to that achieved by discriminate analysis. They concluded that the neural network is not a clearly dominant mathematical technique compared to traditional statistical techniques. Altman (1968) and Ohlsons (1980) models to a matched sample of failed and non-failed firms from 1980s, they found that the predictive accuracy of Altmans model declined when applied against the 1980s data. The findings explained the importance of incorporating the time factor in the traditional failure prediction models. Campbell (2008) constructed a multivariate prediction model that estimates the probability of bankruptcy reorganization for closely held firms. Six variables were used in developing the hypotheses and five were significant in distinguishing closely held firms that reorganize from those that liquidate. The five factors were firm size, asset profitability, the number of secured creditors, the presence of free assets, and the number of under-secured secured creditors. The prediction model correctly classified 78.5% of the sampled firms. This model is used as a decision aid when forming an expert opinion regarding a debtors likelihood of rehabilitation.No study has incorporated the financial performance analysis of the central public sector enterprises in Indian drug & pharmaceutical Industry. Nor has any previous research examined the solvency position, liquidity position, profitability analysis, operating efficiency and the prediction of financial health and viability of public sector drug & pharmaceutical enterprises in India.Dr, S.P Gupta rightly pointed out, it is only by interpreting the financial reports one can make the figure position of a business concern in clear and simple language understand by the layman.Financial statement analysis is a method if analysis of interpreting information the financial statements contain. In doing so, our goal is to determine whether a company is going or losing ground struggle for profitability and solvency.ANTHONS (2005), the financial statements essentially are interim reports presented annually and reflect a division of life of an enterprise into more or less arbitrary accounting period more normally a year .AMUTHAVALLI (2000) in her study had revealed that the companys profitability position and short term financial position are sound during the period of the study.SUMATHI (2002) had concluded that the operating efficiency solvency position and the profitability of the company were satisfactory. The liquidity position company remarkable good.

CHAPTER III

INTRODUCTION OF THE STUDY

CHAPTER- III3.1 OBJECTIVES OF THE STUDY To analyze the financial performance of the company through the measurement profitability, liquidity, turnover and capital structure aspects To measure the efficiency and performance of SRI SOWDESWARI MILLS (P) LTD. To study the changes in the assets, liabilities of the company during the period of study. To offer suggestion to increase the financial performance of the company

3.2 SCOPE OF THE STUDY Financial analysis is the process of identifying the financial strengths and weakness of the firm by properly establishing relationships between the item of the balance sheet and profit and loss account. It is process of synthesis and summarization of financial and operative data with a view to getting an insight in to the operative activities of a business enterprise. The study is conducted at Sri Sowdeswari Mills (P) Ltd. He topic selected is A GENERAL STUDY ON FINANCIAL PERFORMANCE AND ANALYSIS WITH SPECIAL REFERENCE TO VENUS SRI SOWDESWARI MILLS (P) LTD, KATTAMPATTI, JALAKANTAPURAM, SALEM -636 501. The project work is confined to finance department only. Various tools of financial operations like, Ratio analysis, Comparative balance sheet, schedule of changes in working capital have been used. Based on analysis some findings and recommendation are given.

3.2 LIMITATIONS OF THE STUDY The study is based on the result of limited period only i.e.5 years from 2008-09 to 2012-13. The analysis and interpretation are based on secondary data taken from financial reports. Ratio itself will not completely show the companys good (or) bad financial position. The figures from the financial statements for analysis were historical in nature and the time value of money is not considered.

CHAPTER IV

RESEARCH METHODOLOGY

CHAPTER-IV4.1 RESEARCH METHODOLOGYINTRODUCTION: This chapter deals with the methodology and the steps undertaken for the collection and organization of data and presenting the findings of investigation. The methodology of research indicates the general pattern of organizing the procedure for gathering valid and reliable data for the purpose of investigation The methodology of the study includes the description of research design, population sample size, sampling technique development and description of tool, data collection procedure and method analysis.4.2 TYPES OF RESEARCHThe study is based on theoretical and also the data can be analyzed. The research type is analytical research.

4.3 ANALYTICAL RESEARCHIn this study the researcher has to use facts or information already available and analyze these to make a critical evaluation of the material.

4.4 SAMPLING DESIGNSample unitThe sample unit A financial year.Sample sizeThe sample size of the study is 5 years from 2008-09 to 2012-2013.Method of collection dataSource of data1. Primary data2. Secondary dataPrimary dataResearch data collected has to be done of industry of companyIt refers to collected the informationUsing different type of data and finance analysisPresent study collected working capitalSecondary dataThis information already collected in the data some of earlier research workThe secondary data has annual report financial reportAll information collected Sri Sowdeswari Spinning Mills4.5 TOOLS USED FOR ANALYSISA financial analyst can adopt the following tools for analysis of the financial statement. These are also termed as methods of financial analysis. Ratio Analysis Comparative Balance Sheet Changes In Working Capital

4.5.1 RATIO ANALYSISRatio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratios to interpret the financial statements so that the strengths and weakness of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two items/ variables. This relationship can be expressed as (i) percentages (ii) Fractions (iii) Proportion of numbers. Computing of ratios does not add any information not already inherent in the financial statement. The ratios reveal that relationship in a more meaningful way so as to enable us to draw conclusions from them. The rationale of ratio analysis lies in the fact that it makes related information comparable. A single figure by itself has no meaning but when expressed in terms of a related figure, it yields significant interfaces. The ratio analysis, as a quantitative tool, answers to questions such as are the net profits adequate? Are the assets being used efficiently? Is the firm Solvent? Can the firm meet its current obligations? And so on.

A) PROFITABILITY RATIOS The primary objective of a business undertaking is to earn profits. Profit earning is considered essential for the survival of the business. A business needs profits not only for its existence but also for expansion and diversification. Generally, profitability ratios are calculated either in relation to sales or in relation to investment.The following ratios can be calculated, Net Profit Ratio Operating Profit RatioB) TURN OVER RATIOSTurn over ratios, also referred to as activity ratios or asset management ratios, measure how efficiency the assets are employed by the firm. . Here the calculated activity ratios are Debtors Turnover Ratio Fixed Asset Turnover Ratio Total Assets Turnover Ratio Inventory Turnover Ratio Current Assets Turnover Ratio Working Capital Turnover Ratio

C) LIQUIDITY RATIOSLiquidity refers to the ability of a concern to meet its current obligations as and when these become due. The short term obligations are met by realizing amounts from current floating or circulating assets. The current assets should either be liquid or hear liquidity. These should be convertible into cash for paying obligations of short term nature. Current Ratio Liquid Ratio

D) LEVERAGE RATIOFinancial leverage refers to the use of debt finance. While debt capital is a cheaper source of finance, it is also a riskier source of finance. Leverage ratios help in assessing the risk arising from the use of debt capital.4.5.2 WORKING CAPITAL MANAGEMENTWorking capital management also referred to short term financial management refers to the day to day financial activities that deal with current assets (inventors, debtors short term holding of marketing securities and cash ) and current liabilities ( short term debt, trade creditors, accrual provisions)

WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITY

STATEMENT OF CHANGES IN WORKING CAPITIALWorking capital means the excess of current assets over current liability, statements of changes between the two balance sheet dates. This statement is prepared with the help of current assets liabilities derived from the two balance sheets.Every business needs funds for two purposes for its establishment and to carry out its day operations. Long term funds are required to create production facilities through the fixed assets such as plant & machinery land buildings furniture etc.

Investments in the assets such as plant part of firms capital which is blocked on a permanent of fixed bass answer it called fixed capital. Funds are also needs for short term purpose for purchase for purchase raw material payment of wages and other day to day expenses etc., these funds are known as working capital.In the words of statement of working capital is the amount of funds necessary to cover the cost of opening of the enterprise.4.5.3 COMPARATIVE BALANCE SHEETThe comparative balance sheet analysis is the study trend of the same items groups of items and compute items in two more balance sheet items reflect the conduct of the business. The change can be observed by comparison of the balance sheet, at the beginning and at the period and these can help is forming an opinion about the columns for the original balance sheets. A third column is used to show increase in figures. The following items are included in the share balance viz., Fixed assets investments current asset, loans and advances, share capital, reserves, secured loans, current liabilities and provisions, deferred tax. CHAPTER -V

DATA ANALYSIS AND INTERPRETATION

CHAPTER-VDATA ANALYSIS AND DATA INTERPRETATION5.1 RATIO ANALYSIS 5.1.1 NET PROFIT RATIOThe ratio indicates net margin earned on income this ratio, helps to determine the efficiency with which the affairs of business are being managed. A higher ratio indicates better position. Net profitNet Profit Ratio = x 100 Net SalesTABLE NO; 5.1.1S.NoYearNet Profit (Rs.in.Lakhs)Net Sales(Rs.in.Lakhs)Ratio %

12008 20097121603.28

22009 20108429032.89

32010 201110935143.10

42011 201216147333.40

52012 2013-844207-1.99

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows the net profit ratio is maximum 3.40% in the year 2011-2012. It gradually changes in the year 2009&2010&2011. It was minimum -1.99% in the year 2012-2013. It shows an average net profit ratio is 2.13% for the study period.CHART NO; 5.1.1NET PROFIT RATIO

5.1.2 OPERATING PROFIT RATIOThis ratio indicates the relationship between operating profit and sales. It shows the operational efficiency of the firm and it measures the operational efficiency of the management in carrying the routine operations of the firm.

Operating ProfitOperating Profit Ratio = X 100SalesTABLE NO; 5.1.2S.NoYearOperating Profit (Rs.in.Lakhs)Sales (Rs.in.Lakhs)Ratio%

12008 20099021604.16

22009 - 20109029033.10

32010 - 201117235144.89

42011 - 201223647334.98

52012 20135342071.24

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows the operating profit ratio is maximum 4.98 in the year 2011-2012. It gradually changes in the year 2009-2011. It is minimum 1.24% in the year 2012-2013. It shows an average operating profit ratio is of 3.67% for the study period.CHART NO; 5.1.2OPERATING PROFIT RATIO

5.1.3 DEBTORS TURNOVER RATIODebtors turnover ratio is called "Receivable Turnover ratio" or "Debtors Velocity". Goods are sold on credit based on credit policy adopted by the firm. Those customers who are purchases on credit are called traded debtors or book debtors. Bills or bundies are termed as bills receivables. The debtors turnover ratio can be calculated as follows: Total Sales Credit SalesDebtors Turnover Ratio = or ______________ Debtors Average DebtorsTABLE NO; 5.1.3S.NoYearSales (Rs.in.Lakhs)Debtors (Rs.in.Lakhs)Ratio

12008 200921609123.73

22009 - 201029039929.32

32010 - 201135149835.85

42011 - 201247337761.46

52012 2013420718622.61

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that debtors turnover ratio during 2011-2012 was 61.46 then 2010-2011 was 35.85 and it has been 2009-2010 was 29.32. But has been decreased was 23.73 and 22.61 in the year 2008-209 & 2012-2013. The average Debtors turnover ratio is 34.59 during the period of study.CHART NO; 5.1.3DEBTORS TURNOVER RATIO

5.1.4 FIXED ASSET TURNOVER RATIOThese ratios express the number of times fixed asset are being turned over in a stated period. It also indicated the adequacy of sales is relation to the relation to the investment in fixed assets. It shows whether fixed assets are being efficiently used or not. A higher rate shows efficient utilization of fixed assets. SalesFixed assets turnover ratio = Net fixed assetTABLE NO; 5.1.4S.NoYearSales (Rs.in.Lakhs)Fixed Asset (Rs.in.Lakhs)Ratio

12008 2009216019411.11

22009 2010290312821.54

32010 2011351418041.94

42011 2012473316562.85

52012 2013420714902.82

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that fixed assets turnover ratio during 2011-2012 was 2.85 then 2012-2013 was 2.82 and it has been 2010-2011 was 1.94. But has been decreased was 1.54 and 1.11 in the year 2009-2010 & 2008-2009. The average fixed assets turnover ratio is 2.05 during the period of study.CHART NO; 5.1.4FIXED ASSET TURNOVER RATIO

5.1.5 TOTAL ASSETS TURNOVER RATIOThe total asset turnover represents the amount of revenue generated by a company as a result of its assets on hand. This equation is a basic formula for measuring how efficiently a company is operating Sales Total Assets Turnover Ratio = Total AssetsTABLE NO; 5.1.5 S.NoYearSales (Rs.in.Lakhs)Total Assets (Rs.in.Lakhs)Ratio

12008 2009216024120.89

22009 - 2010290324691.10

32010 - 2011351425411.38

42011 - 2012473326101.81

52012 2013420725501.64

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that total assets turnover ratio during 2011-2012 was 1.81. Then 2012-2013 was 1.64 and it has been 2010-2011 was 1.38. But has been decreased was 1.10 and 0.89 in the year 2009-2010 & 2008-2009. The average total assets turnover ratio is 1.36 during the period of study.

CHART NO; 5.1.5TOTAL ASSET TURNOVER RATIO

5.1.6 INVENTORY TURNOVER RATIOInventory turnover ratio indicates how quickly the goods are sold by a enterprise. It measures the number of times the inventories are held and replaced during the period, by comparing the cost of good sold with the stock carried. A company uses this ratio to determine whether there is excess stock or not. Ideal ratio is 7-8 times per year. SalesInventory/Stock Turnover Ratio = Average InventoriesTABLE NO; 5.1.6S.NoYearSales (Rs.in.Lakhs)Inventories (Rs.in.Lakhs)Ratio

12008 2009216016013.50

22009 - 2010290328210.29

32010 - 201135145456.44

42011 - 2012473337012.79

52012 2013420726016.18

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that inventory turnover ratio during 2012-2013 was 16.18 then 2008-2009 was 13.50 and it has been 2010-2012 was 12.79. But has been decreased was 10.29 and 6.44 in the year 2009-2010 & 2010-2011. The average of inventory turnover ratio is 11.84 during the period of study.

CHART NO; 5.1.6INVENTORY TURNOVER RATIO

5.1.7 CURRENT ASSETS TURNOVER RATIOThat indicates how efficiently a firm is its to generate.

Net SalesCurrent Assets Turnover Ratio = __________________ Current Assets TABLE NO; 5.1.7S.NoYearSales (Rs.in.Lakhs)Current Assets (Rs.in.Lakhs)Ratio

12008 200921603615.98

22009 - 201029035015.79

32010 - 201135147894.45

42011 - 201247337925.97

52012 201342077115.91

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that current assets turnover ratio during 2008-2009 was 5.98 then 2011-2012 was 5.97 and it has been 2012-2013 was 5.91. But has been decreased was 5.79 and 4.45 in the year 2009-2010 & 2010-2011. The average of current assets turnover ratio is 5.62 during the period of study.

CHART NO; 5.1.7CURRENT ASSET TURNOVER RATIO

5.1.8 WORKING CAPITAL TURNOVER RATIOThese ratio measures the effective utilization of working capital it also measure the smooth running of business or otherwise the ratio establishes relationship between cost of sales and working capital.SalesWorking capital Turnover Ratio = _________________ Working capital TABLE NO; 5.1.8S.NoYearSales (Rs.in.Lakhs)Working Capital (Rs.in.Lakhs)Ratio

12008 20092160-97- 22.26

22009 - 201029031519.35

32010 - 2011351414025.10

42011 - 2012473335113.48

52012 2013420724717.03

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that working capital turnover ratio during 2010-2011 was 25.10 then 2009-2010 was 19.35 and it has been 2012-2013 was 17.03. But has been decreased was 13.48 and -22.26 in the year 2012-2013 & 2008-209. The average working capital turnover ratio is 10.54 during the period of study.

CHART NO; 5.1.8WORKING CAPITAL TURNOVER RATIO

5.1.9 CURRENT RATIOThe ratio of current assets to current liabilities is called current ratio. In order to measure the short term liquidity or solvency of the concern, comparison of current assets and current liabilities is inevitable. Current ratio in the case liability of a concern to meet its current obligations as and well they are due for payment.The current ratio is calculated by the following formula. Current Assets Current ratio = Current LiabilitiesTABLE NO; 5.1.9S.NoYearCurrent Assets (Rs.in.Lakhs)Current Liability (Rs.in.Lakhs)Ratio

12008 20093614580.79

22009 - 20105014861.03

32010 - 20117896491.21

42011 - 20127924411.80

52012 20137114641.53

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that current ratio during 2011-2012was 1.87 then 2012-2013 was 1.53 and it has been 2010-2011 was 1.21.But has been decreased was 1.03 and 0.79 in the year 2009-2010 & 2008-2009. The average current ratio is 1.27 during the period of study.CHART NO; 5.1.9CURRENT RATIO

5.1.10 QUICK RATIOThis ratio is otherwise known as quick ratio. This ratio measures the firms ability to convert its current assets quickly into cash in order to meet its current liabilities. It is a true test of business solvency. A company uses this ratio to determine the extent to which its immediate liabilities are met. Higher ratio indicates sound financial position. (Quick Assets = Current Assets Inventory)

Liquid Assets Liquid/Quick Ratio = Liquid LiabilitiesTABLE NO; 5.1.10S.NoYearQuick Asset (Rs.in.Lakhs)Current Liability (Rs.in.Lakhs)Ratio

12008 20092014580.43

22009 20102194860.45

32010 20112446490.37

42011 20124224410.95

52012 20134514640.97

Source: Annual Report 2009-2013 of SSM PVT LtdINTERPRETATIONThe above table shows that quick ratio during 2012-2013was 0.97 then 2011-2012 was 0.95 and it has been 2009-2010 was 0.45. But has been decreased was 0.43 and 0.37 in the year 2008-2009 & 2010-2011. The average quick ratio is 0.63 during the period of study.CHART NO; 5.1.10QUICK RATIO

5.2 COMPARATIVE BALANCE SHEET

TABLE NO; 5.2.1 Comparative balance sheet for the year ended 31st March 2009 to 31st March 2010.

Particulars2008-2009 (Rs.in.Lakhs)2009-2010(Rs.in.Lakhs)Increase/Decrease AmountIncrease/Decrease%

ASSETS

Fixed Assets

Gross block43084322140.32

Less: Depreciation23672440733.08

Net Block19411882-59-3.03

Capital Working process5516-39-70.90

Sub Total19961898-98-4.90

Investments10810800

Current Assets & Loans

Inventories16028212276.65

Sundry Debtors919988.79

Cash & Bank Balance110120109.09

Loans & Advances4054484310.61

Miscellaneous exp0.000.00--

Sub Total76694918323.90

Grand Total27622847853.07

LIABILITIES

Current Liabilities450478286.22

Provisions8800

Sub Total458486286.22

Secured Loan672770284.16

Share Holders Fund

Share capital28528500

Reserves and Surplus14541413-41-2.81

Sub Total17391698-41-2.81

Grand Total28692954852.96

Source: Annual Report 2009-2010INTERPRETATION From the comparative balance sheet of the year 2009 2010 The following inference can be made. Net block has decreased by 3.03%. Capital work in progress has been decreased by 70.90%. No changes in investment. Net current asset & loan has been increased by the 23.90% Current liability has been increased by the 6.22% Secured loan increase 4.16% No changes in share capital. Reserve has been decreased by 2.81%.

TABLE NO; 5.2.2Comparative balance sheet for the year ended 31st March 2010 to 31st March 2011Particulars2009-2010 (Rs.in.Lakhs)2010-2011 (Rs.in.Lakhs)Increase/DecreaseAmountIncrease/Decrease%

ASSETS

Fixed Assets



Net Block18821804-78-4.14


Sub Total18981819-79-4.16

Investments108105-3-2.77


Inventories28254526393.26

Sundry Debtors9998-1-1.01



Sub Total1057137131429.70

Grand Total295531902357.95

LIABILITIES

Current Liabilities47863415632.63

Provisions815787.5

Sub Total48664916333.53


Share Holders Fund



Sub Total16981683-15-1.06

Grand Total295431912378.02

Source: Annual Report 2010-2011INTERPRETATION From the comparative balance sheet of the year 2010 2011. The following inference can be made. Net block has decreased by 4.14%. Capital work in progress has been decreased by 6.25%. Investment has been decrease 2.77% Net current asset & loan has been increased by the 29.70% Current liability has been increased by the 33.53% Secured loan increase 11.55% No changes in share capital. Reserve has been decreased by 1.06%.

TABLE NO; 5.2.3Comparative balance sheet for the year ended 31st March 2011 to 31st March 2012Particulars2010-2011(Rs.in.Lakhs)2011-2012(Rs.in.Lakhs)Increase/DecreaseAmountIncrease/Decrease%

ASSETS

Fixed Assets



Net Block18041656-148-8.20


Sub Total18191664-155-8.52

Investments10510500


Inventories545370-175-32.11

Sundry Debtors9877-21-21.42



Miscellaneous exp0000

Sub Total12661282161.26

Grand Total30852946-139-4.50

LIABILITIES

Current Liabilities634420-214-33.75

Provisions1521640

Sub Total649441-208-32.04


Share Holders Fund


Reserves and Surplus13981434362.57

Sub Total16831719362.13

Grand Total22052159-46-2.08

Source: Annual Report 2011-2012INTERPRETATION From the comparative balance sheet of the year 2011 2012. The following inference can be made. Net block has decreased by 8.20%. Capital work in progress has been decreased by 46.66%. No changes in investment. Net current asset & loan has been increased by the 1.26% Current liability has been increased by the 32.04% Secured loan increase 3.84% No changes in share capital. Reserve has been decreased by 2.17%.

TABLE NO; 5.2.4Comparative balance sheet for the year ended 31st March 2012 to 31st March 2013Particulars2011-2012(Rs.in.Lakhs)2012-2013(Rs.in.Lakhs)Increase/DecreaseAmountIncrease/Decrease%

ASSETS

Fixed Assets



Net Block16561490-166-10.02

Capital Working process87-112.5

Sub Total16641497-167-10.03

Investments1050-105-100


Inventories370260-110-29.72

Sundry Debtors77186109141.55

Cash & Bank Balance345265-80-23.18


Miscellaneous exp0000

Sub Total1282151723518.33

Grand Total30513014-37-1.21

LIABILITIES

Current Liabilities420412-8-1.90

Provisions215231147.61

Sub Total441464235.21


Share Holders Fund



Sub Total16921510-209-12.15

Grand Total30253014-11-0.36

Source: Annual Report 2012-2013INTERPRETATION From the comparative balance sheet of the year 2012 2013. The following inference can be made Net block has decreased by 10.02%. Capital work in progress has been decreased by 12.5%. Investment has been decrease by 100%. Net current asset & loan has been increased by the 18.33% Current liability has been increased by the 5.21% Secured loan increase 16.59% No changes in share capital. Reserve has been decreased by 14.57%.5.3 SCHEDULE OF CHANGES IN WORKING CAPITALTABLE NO; 5.3.1Statement showing changes in working capital for the year ended 31st March 2010.PARTICULAR2008-2009(Rs.in.Lakhs)2009-2010(Rs.in.Lakhs)INCREASEDECREASE

Current AssetsInventoriesSundry debtorsCash and bank balanceLoan and advances160911104052829912044812281043----

Total current assets766949

Current LiabilityCurrent liabilityProvisions45084788-028-

Total current liability458486--

Net working capital(CA-CL)Increase Working Capital308

15546318328

155

Total463463183183

Source: Annual Report 2009-2010INTERPRETATIONIn the year 2009-2010 the working capital has been increased up to 155 lakhs due to the increase in the current asset such as inventories, debtors, cash and bank balance, loan and advance. The current liability is decrease. In the year firm has enough money to met its current liability.CHART NO; 5.3.1SCHEDULE OF CHANGES IN WORKING CAPITAL

TABLE NO; 5.3.2Statement showing changes in working capital for the year ended 31st March 2011PARTICULAR2009-2010 (Rs.in.Lakhs)2010-2011 (Rs.in.Lakhs)INCREASEDECREASE

Current AssetsInventoriesSundry debtorsCash and bank balanceLoan and advance2829912044854598146447263-2629-1--


Current LiabilityCurrent liabilityProvision478863415

1567

Total current liability486649

Net working capital(CA-CL)Increase working capital463

154617

318164

154

Total617617318318


TABLE NO; 5.3.3Statement showing changes in working capital for the year ended 31st March 2012PARTICULAR2010-2011(Rs.in.Lakhs)2011-2012(Rs.in.Lakhs)INCREASEDECREASE

Current AssetsInventoriesSundry debtorsCash and bank balanceLoan and advances5459814647737077345490

1991317521


Current LiabilityCurrent liabilityProvisions6341542021214

6



224841426202

224

Total841841426426


TABLE NO; 5.3.4Statement showing changes in working capital for the year ended 31st March 2013PARTICULAR2011-2012(Rs.in.Lakhs)2012-2013(Rs.in.Lakhs)INCREASEDECREASE

Current Assetsinventoriessundry debtorscash and bank balanceloan and advances37077345490260186265806

109

31610

80


Current liabilityCurrent liabilityProvisions42021412528

31



2121053433221

212

Total10531053433433


CHAPTER -VI

FINDING, SUGGESTION, CONCULSIONCHAPTER-VI6.1 FINDINGS Net profit ratio has a slow growth and decline during the period of study. It is decreases in the year 2012 2013. It indicates insignificant improvement in conditions of the business. Operating profit ratio is the test of operational efficiency. The efficiency has risen slightly and decreases 1.24 in the year 2012 2013. Debtor turnover ratio shows slight variation between the all years, the higher ratio it signifies that the debts are being collected more promptly in the company. Fixed asset turnover ratio shows increasing trend in the all financial year during the period of study. It shows asset share well utilized. Total asset turnover ratio indicates the fluctuation status of the company. The lowest ratio 0.89 in the year 2008 2009. Inventory turnover ratio indicates the utilization of inventory in an efficient manner. It was higher ratio 16.18 in the year 2012-2013. Current asset turnover ratio shows the smooth condition of the company. Working capital turnover ratio shows the negative 22.26 in the year 2008 2009. It is smooth condition during the period 2009 -2010 to 2012 2013. The current ratio was favorable to the organization during the year 2010-2013. It is decrease 0.79 in the year 2009. The liquid ratio was dissatisfaction level. Liquid liability is excesses the liquid asset during the period of study. Comparative balance sheet shows the overall financial position in good. The schedule of changes in working capital shows the increasing trends of all period.6.2 SUGGESTIONS & RECOMMENDATIONS The management may take proper decisions to maintain their absolute liquid ratio, so that they can maintain their liquidity position in the long run. The liquidity position could be strengthened by reducing the current liabilities. The management may try to increase the EPS by increasing the profitability of the company. The cash balance level of the company when compared to current liabilities is minimum and the management may improve the cash balance to an optimum level to meet the contingencies. The company may increase their net profit. The company may control the expenses and increase their operating profit. The company should concentrate with investment and it will be helpful to the company for its successful running.

6.3 CONCLUSION The study made the researcher to analyses the financial position of the SRI SOWDESWARI MILLS. The company has maintained the proper financial position to meet day to day activities. But if we take the current liability, they should keep some attention the reduce these things in the following year through the company is a small scale company. If they utilize the resources in a effective and efficient way to meet the profit. The study was undertaken on the financial performance of the company tools such as ratio analysis and schedule of changes in working capital, comparative balance sheets have been used to find out of the companys efficiency. The firm has healthy condition of finance for long term.

BIBLIOGRAPHY

BIBLIOGRAPHYI. Company profile is Sri Sowdeswari Mills Private Ltd.II. Dr.S.N.Maheswari (2000) Principles Of Management Accounting, Publishing By Sultan Chand&Sons, New Delhi.III. Dr.V.R.Palanivel (2010) Financial Management 1st Edition, S Chand & Company Ltd, New Delhi.IV. Dr.I.M.Pandey (2003) Financial Management 8th Edition, Vikas Publishing House Pvt. Ltd, New Delhi.V. T.S. REDDY, Y.HARI PRASAD REDDY, Management AccountingREAD MORE;I. http;//www.investorwords.comII. http;//www.businessdictionary.comIII. http;//www.google.comIV. http;//www.yahoo.com

APPENDIX

APPENDIX;

SRI SOWDESWARI MILLS PRIVATE LIMITED BALANCE SHEET .. In Rs Cr..Sources of fundsMar '13

Mar '12

Mar '11

Mar '10

Mar09

Total Share Capital2.852.852.852.852.85

Equity Share Capital2.852.852.852.852.85

Share Application Money0.000.000.000.000.00

Preference Share Capital0.000.000.000.000.00

Reserves12.2514.3413.9814.1314.54

Revaluation Reserves0.000.000.000.000.00

Networth15.1017.1916.8316.9817.39

Secured Loans10.408.928.597.706.72

Unsecured Loans0.000.000.000.000.00

Total Debt10.408.928.597.706.72

Total Liabilities25.5026.1125.4224.6824.11

Application of fundsMar '13Mar '12Mar '11Mar '10Mar09

Gross Block43.9943.8743.5543.2243.08

Less: Accum. Depreciation29.0927.3125.5124.4023.67

Net Block14.9016.5618.0418.8219.41

Capital Work in Progress0.070.080.150.160.55

Investments0.001.051.051.081.08

Inventories2.603.705.452.821.60

Sundry Debtors1.860.770.980.990.91

Cash and Bank Balance2.653.451.461.201.10

Total Current Assets7.117.927.895.013.61

Loans and Advances8.064.904.774.484.05

Fixed Deposits0.000.000.000.000.00

Total CA, Loans & Advances15.1712.8212.669.497.66

Deffered Credit0.000.000.000.000.00

Current Liabilities4.124.206.344.784.50

Provisions0.520.210.150.080.08

Total CL & Provisions4.644.416.494.864.58

Net Current Assets10.538.416.174.633.08

Miscellaneous Expenses0.000.000.000.000.00

Total Assets25.5026.1025.4124.6924.12

Contingent Liabilities0.000.000.000.000.00

Book Value (Rs)52.9760.3059.0459.5961.03

Manik and An

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