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Findings suggestions and conclusion

The object behind this study is to appraise the financial position of m\s vishal precission products

private limited. This chapter gives a brief description of findings, suggestions and conclusion based on

the analysis of the firm.

Findings

1. The current ratio of the firm is less than the ideal ratio of 2:1 general consideration is 2:1 to bea desirable current ratio. In vishal precision products pvt ltd., it is maintained an average of 1.6

is to be improved.

2. Usually a high quick ratio indicates a firms ability to meet its current liabilities. The analysisshowed an average quick ratio of 1.28:1. So liquid assets are quite sufficient to provide a cover

to the current liabilities and to be improved.

3. The debtor turnover ratio of the firm is on an average of 5.28 and it shows that the firm followsa liberal credit policy.

4. The firms average collection period is 69 days which has to improved and minimized to 45 days.5. During the period of study the average payment period indicates a dissatisfactory to improved

lot.

6. Working capital turnover ratio indicates a high fluctuating trend. This fluctuation indicates lack ostability in working capital policy of the firm. It has gone to 5.35 in 2009-10 which is

comparatively lower position comparing to other industries.

7. Debt-equity ratio shows the extent of outsiders fund to insiders fund. Here the debt equity ratiois on an average of 2.13:. the ratio is an equal to the idle ratio is 2:1, the company has to

maintained the existing levels during corresponding years.

8. The firms return on total resource ratio 6% shows a low percentage, when compared to theideal ratio o 10% to 12% which has to be improved. From this it has been concluded the

investments made is not utilized to the maximum to retain the ideal ratio level of 10% to 12%.

9. The ratio indicates whether investment in stock is efficiently iused or not. Higher the ratio isgood for the concern here the ratio is good and in can even improve for the concern here the

ratio is good and in can even improve for the better result. Here the average stock turnover

ratio is 10.15.

10.The fixed assets ratio of the firm is maintained same and came to the desired ideal ratio of 1:1to be maintained. The ratios are more than the ideal ratio 1:1, which means the firm has not

good financial policy out of the working capital.

11.The solvency ratio of the firm is above 42.25%. it generally indicates that the firm sufficientresources to set out its external liabilities. So the firm solvency in a stable condition.

12.The gross profit ratio of the firm shows an increasing trend. It indicates the firm utilizes moreproduction capacity. Hence cost of production decreased year . so the gross profit is found to be

fluctuating over the years.

13.The net profit ratio of the firm varies from year to year. Net profit ratios decreased to someextent after 2006-2007 and maintained same and decreased drastically in the year 2009-2010.

This shows that the firm is having low profitability margin or it can be understood that it has

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some major expenditure which may also cause this decreasing trend . the firm is recommended

to take more care in increasing the net profit ratio.

14.The operating profit is decreased from year to year. This shows that the firm is having lowprofitability marin or it can be understood that it has some major operating expenditures, which

may also cause this decreasing trend. The firm is recommended to take more care in increasing

the operating profit in forth coming years.

Suggestions

After the analysis and interpretation of the data, I found the following suggestions to be implemented

to improve the profitability and to improve the stability of the business.

1. The firm should utilize its idle funds for productive purposes by proper management.2. The firm should follow correct accounting practices and must make frequent analysis

continuously. Then it can evaluate the performance and take remedial measures in time.

3. The firm should analyze the cost of production with the help of a cost accountant and takeproper measure and techniques to control the cost of production

4. The firm should develop a new strategy so as to penetrate into international market.5. The form must make necessary study for the fall ing of net profit as well as gross profit and

should take necessary steps to increase the gross profit as well s net profit . due to retain in his

market share the company has sacrificed his portion of profitability as an investment hence

there is a shortfall in net profit justified.

6. The firms external liabilities which are utilized to promote the business brought into accountand the interest loss as well as the other modalities to be discussed to minimize the external

liabilities at the earliest.

7. Man-power reduction such as unskilled labour can be eliminated.8. Inventory management to be improved. Dead stovks to e removed. Good tracking have to be

implememted to find the excess purchase.

9. Management information system should ne analyze every month.10.Rejection \ Rework costs have to be minimized.11.Customer service expenses to be controlled based on the price they are giving.

Conclusion

The above analysis of the financial statements and general working of m/s vishal precision products pvt

ltd., indicates a favourable sign of performance in all its operations. This study really helped the

management to know lot of findings to increase the productivity and profitability. Based on this reportthe management assured to take more decisions to increase profitability. The credit days taken for to

pay the suppliers are abnormal and the management will make necessary arrangements to bing down

the credit days 105 for the yea 2009-10 to less than 45 days.

Apart from this the external liabilities, which has been accumulated which has been obtained during the

time investments. The interest rates have to be worked out and alternate planning to be done to

minimize the interest loss. Also this study revealed that it is highly possible to retain minimum 10% of

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net profit, since the product and the market is very good for vishal and since it is one of the leading

players in mould base manufacturing and precisions machining.

Overall the performance and based on the financial reports it is highly possible to retain at least 10%

net profit by making and monitoring the total expenses and providing sufficient gap between the

investments which will reduce the liabilities and the repayment in a planned manner will increase thereserves and surplus of the company.

Bibliography

Books

1. Khan.m.y. and a.k. jain 1992 financial management 2nd edition, tata mc graw hill publishingcompany limited , new delhi.

2. Pandey i.m 1992 financial management , 6th edition, vikas publishing hous private limited newdelhi.

3. Prasanna Chandra 1999 financial management theory, 6th edition, tata mc grow hill publishingcompany limited, new delhi.

4. Maheswari s.n 2001 principles of management accounting 16th edition, sultan chand & sons,new delhi.

5. Financial management by dr.s.n.mahaswari.