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CONTENT

Introduction of the Organization


Need of study or Research Problem
Objective of the Study
Research Methodology
Data presentation and Analysis
Financial analysis
Findings of the study
Suggestions and Recommendations
Bibliography
10. Appendix

INTRODUCTION
With a history that goes back to 50 years, B.L. Agro Oils Ltd. is a company with a
simple corporate objective - to manufacture, package and market the purest
possible edible oil that would offer healthier and tastier solution to millions of
consumers. Currently, B.L. Agro is in the business of Refining, Quality Control,
Packaging and Marketing of branded mustard and other edible oils.
VISION
To be a way of life for every Indian.

MISSION
To be the benchmark in purity and perfection. To achieve a leadership position in
the Indian market and to become the preferred Indian edible oil name globally.
QUALITY POLICY
B.L. Agro Oils Ltd. is committed to total customer satisfaction, and compliance
with regulatory bodies at all times and at maximum effectiveness.
We aim to
- Consistently enhance our understanding of market dynamics and changing

customer needs so as to offer finest quality products that at all times meet our
customers' expectations and the ever changing demands of the market place.
- Provide a high level of service to our customers with minimum cause for
complaint.
- Maintain a healthy & constructive work environment that enables personnel to
produce
Optimal

output.

- Continually comply with the requirements of ISO 9001:2000, ISO 14002:2004,


HACCP and other government regulations and continuously improve the
effectiveness of our Quality Management System.

MANAGEMENT

The foundations of B.L. Agro were laid half a century ago by its Managing
Director,
Shri Ghanshyam Khandelwal - a veteran of the Indian mustard industry. Since then
the management of B.L. Agro has gained an unmatched, in-depth insight of the
industry and the continuously evolving customer needs. The leadership at B.L.
Agro has a vision for the future and their acumen in adapting to the changing times
has

translated

into

consistent

growth

by

the

company.

However, the most important attribute of the B.L. Agro leadership is the un-fallible
commitment towards quality, towards customers and towards community at large.
At B.L. Agro 'No Compromise with Quality' is a guiding philosophy. And the
management takes it as their responsibility to not just ensure the highest quality
standards of company's products but also to instill this 'quality attitude' in every
member

of

the

B.L.

Agro

organization.

Another distinctive characteristic of the B.L. Agro management team is their strong
belief that Success and growth do not mean much unless accompanied by trust
and respect from the community. And over the years this belief has ensured that
as a corporate citizen, B.L. Agro Oils Ltd. earns an image of one of the most
respected and revered organization in its region of activity.
Company Profile Directors
Ghanshyam Khandelwal

Managing Director

A true entrepreneur, Ghanshyam Khandelwal stepped into the mustard oil trading
business in the 1950s when he was still at a very young age. Beginning from
Bareilly, he single-handedly expanded operations and soon transformed Bail Kolhu
into one of the most preferred mustard oil brand in the entire belt of Eastern UP.

A man of foresight and vision Ghanshyam Khandelwal has been the guiding force
behind consistent growth of B.L. Agro Oils Ltd. With an eye on the future, he has,
over the years, displayed a tremendous prowess for anticipating the changing
consumer needs and has repeatedly led the organization to be a winner in a
dynamic industry scenario. The mantras of his success include his unflinching
commitment towards quality and his passion for perfection.
An un-doubted achiever, he is a man of undaunted determination and courage
along with exemplary business acumen.

What distinguish Ghanshyam Khandelwal are his philosophies that originate from
his commitment towards the community. A man of values, he strongly believes in
business ethics and corporate social responsibilities.

Ashish Khandelwal
Director - Finance & Sales
Post Graduate in Commerce, Ashish Khandelwal joined his father's business at a
very young age. A quick learner and a very hard worker he learnt the nuances of
the trade within no time and established himself as a growth motivator by bringing
in

new-age

marketing

concepts

and

fresh

opportunities.

With extraordinary abilities in sales and channel management, Ashish Khandelwal


has an unmatched hold on the market pulse. Still in his prime youth, he has already
played a key role in taking B.L. Agro to newer heights. In his leadership, the
company entered into the consumer packs segment and the venture resulted in
unprecedented

success.

Having spent over 12 years in this trade, Ashish Khandelwal possesses a rare
combination of experience as well as youthful exuberance. With a futuristic
outlook, he has an unmatched ability to think ahead of the times and a vision that is
set to take B.L. Agro into a glorious future.

Richa Khandelwal
Director Marketing

BTech from IET, Lucknow and MBA from ICFAI, Hyderabad. Richa Khandelwal
adds a fresh dimension to the management competencies at B.L. Agro. Among her
many contributions to the organization is her vision to take B.L. Agro to the
highest

national

and

international

level.

With path-breaking ideas, Richa Khandelwal has played a key role in further
strengthening the Bail Kolhu and other B.L. Agro brands and has led its expansion
into Delhi NCR and other newer territories with outstanding success. In a short
span of time, she has turned Bail Kolhu into a household name in Delhi that has
already

become

the

largest

selling

mustard

oil

in

certain

regions.

Always a forward looking person, Richa Khandelwal has helped the organization
get into an overdrive with her astute marketing strategies and innovative
techniques.

Growth so Far

Having started as a mustard trading house in 1958, B.L. Agro has come a long way
today. During the course of its journey, 1999 proved to be a landmark year which
transformed the business house from a commodity trading organization to an
FMCG company. The year witnessed the birth of B.L. Agro Oils as a registered
company and also marked its advent into quality control, packaging and marketing
of consumer packs of their flagship brand - Bail Kolhu Kachchi Ghani Mustard
Oil. Achieving an astonishing turnover of Rs. 60 crores in the first year itself, the
company has not looked back since.

Expansion and up-gradation has been a continuous process for B.L. Agro. The
marketers of a single mustard oil brand subsequently started rolling out multiple
varieties of mustard oil - thus catering to a much wider consumer base. As the

product range swelled, the competencies, capabilities and capacities were


continuously enhanced to meet the growing challenges. However even with its
ever-expanding size, B.L. Agro never lost sight of its ultimate goal that of
providing only the highest product quality - and hence set up its own advanced
quality control systems and packaging facilities.

Later, the company took another stride when being a player in the lone mustard oil
segment, B.L. Agro diversified into Refined Soybean oil and then further to
various blended edible oils. In 2006, B.L. Agro achieved yet another milestone
when it established its own state-of-the-art Refinery.

What Drives Success

The Market and Consumer Insights possessed by B.L. Agro leadership is


unparalleled. B.L. Agro understands that eating habits of consumers are very
individualistic and vary from house to house. And in order to make a long term
relationship with the collective base, the company needs to pack Real Customer
Delight in each pack that it offers.

Moreover what has brought laurels to B.L. Agro and awarded it a leadership
position is the company's ability to anticipate and adopt to Market Demand Shifts
resulting from either consumer Living Pattern Shifts or any other reason. At B.L.
Agro, change has been one of the most consistent processes. Be it technological
capabilities, be it the strength of human minds or be it the collective efficiencies,
B.L. Agro has always anticipated the changing environment and empowered itself
for the same.

The most important success driver at B.L. Agro is its ability to offer Consistency

of Highest Quality Standards. Pack by pack, batch by batch, consignment by


consignment, the products of B.L. Agro carry exactly the same quality and purity
standards for which they have gained widespread respect.

Strength

The processes and facilities at the B.L. Agro plant match the highest standards
The Double Filter Process for Mustard Oil ensures that only the purest product is
dispatched from the B.L. Agro plant. The Refining is undertaken by Chemical
Refining process through which flows out the purest form of cooking oil that beats
the best known brands on transparency tests. Moreover, the oil is processed using
the Nitrogen Blanketing process that reduces the loss of nutritional values and
ensures Maximum Nutrition Retention (MNR) in the Refined Oils.

B.L. Agro Oils Ltd. is also one of the selected oil players in the country that have
been granted the Blending License thus enabling it to further expand its product
portfolio. With the vast possibilities in Blending, the company is now in a position
to develop many new products and cater to the evolving consumer needs.

Whatever the product and whatever be the process, at B.L. Agro the Purity &
Hygiene factor is always the topmost priority. At its technologically advanced
refinery plant, all processes are designed to be automated. Right from the unloading of the crude oil tankers to the filling and packaging of oil in various packsizes, the product remains untouched by human hand.

As a result the established Edible Oil Brands of B.L. Agro are today enjoying
Market Leadership in a vast market and region. The unique taste preference
developed by the company's products ensure an unflinching consumer loyalty that
in turn results in the consistent demand for the company.

The company has secured sources for supply of crude oil. The identification of
multiple regions ensures that supplies to B.L. Agro are not affected by climatic
adversities or any other form of agricultural contingencies.

One of the unique strengths of B.L. Agro is that the company even has its own
facilities for manufacturing of packaging materials used for its products. This
results not just in controlling the costs and enhancing value but also in maintaining
the product purity to the last possible level.

The company has an Excellent Track Record With the Management experience
of 50 years, B.L. Agro has displayed a consistent and exemplary growth right since
its inception.

B.L. Agro Oils Ltd. possesses India's largest mustard oil packaging facilities.

In-house QC Lab Best equipped & biggest in UP. The company has an in-house
Quality Control Laboratory with a Gas Chromatography that ensures purity, ideal
blends and PFA certified quality of all B.L. Agro products.

The company's lab is the biggest and best equipped in the entire state of Uttar
Pradesh.

To further complement its efforts and enhance its performance the company has

established Enterprise Resource Planning (ERP) systems and has obtained ISO
9001:2000, ISO 14002:2004 and HACCP certifications.

Potential Market Dynamics

Overview of Edible Oil Industry


In India the popular cooking mediums include Mustard Oil, Groundnut Oil,
Sunflower Oil, Coconut Oil, Soyabean Oil and Palm Oil.
Mustard, Soyabean and Palm Oil (mainly imported) account for over 75% of total
edible oil consumption.
Only around 16% of the households in India consume branded edible oils.
Among branded oils, refined oils account for 60% of consumption and crude oils
(only filtered) account for the balance.
Branded edible oils have penetrated 31% of households in urban areas and only

9% in rural areas.
The edible oil sector in India is largely unorganized with only a few organized
players.
Edible oil is sold in the country either in consumer packs (less than 5 lt pack sizes),
bulk packs (15 kg/ lt) or as loose oil in tankers or barrels.

Macroeconomic situation Industry growth rates


Indian edible oil economy is world's fourth largest after USA, China and Brazil
(India accounts for 7% of world oilseeds & oil meal production and 10% of world
consumption of edible oil).
2nd largest import bill item for India - favorable government policies for
domestic industry by way of high import duties on imported edible oils.
Increasing health consciousness, preference for packaged products (hygiene
factors and avoidance of any adulteration) and low-saturated fat cooking mediums.

Current & expected demands


According to an estimate, the demand for edible oils is expected to increase from
current levels of 11.5 million tones to 15.6 million tones in 2010 and 21.3 million
tones by 2015.

Growth Opportunities
Emergence of branded edible oil as a high growth segment in Indian FMCG
industry.
With a huge proportion of total Indian households still not using branded oils but
displaying continuous shift in their using pattern - from loose unbranded oils to
packed branded oils, the category of branded edible oils has emerged as a high
growth segment in the Indian FMCG industry.
With an excellent record of adapting to the dynamic trends, B.L. Agro Oils Ltd. is
well positioned and preparing itself to play an important role in facilitating this
transition in consumer behavior.

Future Strategy & Growth Plans

Expansion in geographic reach and newer markets - The company has already
extended its distribution network covering almost entire North India and is now
poised to further expand in newer markets.

To meet the challenges of growing demands, B.L. Agro is preparing for capacity
enhancement and expansion of manufacturing capabilities.

The company has an ambitious plan for setting up an Integrated Oil Complex for
which it has already identified the locations. With comprehensive facilities
available within this complex, the company will be able to provide integrated
solutions and enhance its competitive pricing power.

In addition to the existing facilities, the proposed complex will include Solvent
Extraction Plant, Rice Bran & Sunflower Refinery and Mustard Crushing

Facilities.

To make its procurement processes smooth and cost effective B.L. Agro oils is
also contemplating setting up of Rack Facilities connecting its Oil Complex to
various Port.

With the addition of Mustard Crushing Facilities, the company plans to


consolidate as

well as increase its market share in the mustard segment.

Increase in brand power B.L. Agro Oils Ltd. has planned widespread
promotional and consumer connect campaigns to achieve an increase in its brand
power.

The company is working to expand its product and brand portfolio through
extension of the existing lines as well as through diversification into other edible
food items.

Through ensuring a substantial market share in the mustard oil as well as other
segments, B.L. Agro aims to obtain better pricing power.
Corporate Social Responsibility

As socially responsible citizens, the promoters of B.L. Agro are committed to


contribute their bit in the nation building process and work towards the betterment
of the society.

The Khandelwal family actively participate in and support various community


service programs like Blood Donation camps, Plantation Drives, Service for
Physically Disabled etc.
As an environment sensitive industrial house, B.L. Agro takes various voluntary
measures in addition to the mandatory steps to ensure environment conservation.
Theseinclude
Effluent Treatment Plant for Water Pollution Control as well as Water
Conservation.
Installation of advanced equipments for Air Pollution Control.
Use of only Agriculture Bio-Mass for steam generation; and many more such
measures.
Khao Sarson, Jiyo Barson

Mustard

OilThe

Healthiest

One

Mustard Oil is extracted at a low pressure at low temperature (40-600C).


It contains 0.30-0.35 % essential oil (AllylIso-Thiocynate) which acts as
preservative.
Mustard Oil is one of the best cooking oil particular for heart patient because it has
an Omega 3 (MUFA) and 6 Fatty Acid composition (Linolic and alpha Linolic
Acid respectively) in good proposition close to 10:1 rarely found in any other oil.
The ideal ratio of Omega 6 and Omega 3 is 10:1.A Favourable Composition

Organization structure & hierarchy

Organization design & structure

HIERARCHY OF B.L.AGRO

Ideal Product Mix Bail Kolhu


Bail Kolhu Kachchi Ghani Mustard Oil is the flagship brand of the company. This
is a Grade A Mustard Oil and due to its unique taste and ideal pungency, it enjoys a
tremendous consumer preference throughout the states of UP, Uttaranchal and
Delhi.

Bail Kolhu is a clear market leader in most of its distribution territories and
commands almost monopolistic leadership position in many of the markets. Bail
Kolhu also enjoys a very high level of brand recall and brand loyalty amongst a
vast consumer base.

Mohan Dhara
Mohan Dhara is a well-accepted brand in the Refined Soyabean Oil segment.

Balance Lite
this is a fast growing brand that has facilitated the advent of B.L. Agro in the
Refined Vegetable Oil segment.

Aviral Dhara
Aviral Dhara is a multi-product brand of Mustard Oil, Palmolein Oil, and
Vegetable Oils. Having gained instant acceptance in the market, the brand is on a
steady growth chart.

NewProductDevelopment
In its quest to further expand its operations and reach for larger customer base,
B.L. Agro is in the process of developing ambitious new products. Nourish Delite

soon

to

be

launched

multi-product

National

Food

brand.

Nourish Delite is a Dream Project of B.L. Agro management that promises to


enhance

the

image

as

well

as

scale

of

company's

operations.

First product to be offered under this brand will be Premium Soyabean oil followed
by Premium Mustard Oil. The line will be further expanded to multiple food
products that will even extend beyond edible oils and include products like Atta,
Besan, Pulses on one hand and Packaged Drinking Water on the other. At B.L.
Agro, the vision is to make Nourish Delite India's biggest and most trusted Food
Brand and the company is planning and preparing to make this dream a reality.

Objective of the study:


The main objective of the study is financial analysis of B.L. Agro oils ltd.
are To know the sales revenue and growth rate of B.L. Agro oils ltd.
To know the financial position of B. L. Agro.
To Find out different accounting ratios of B.L. Agro.
To enhance my knowledge about production process.
To find out the different future plans of B.L. Agro oils ltd.

Research Methodology:
My project report is secondary data base so the secondary data is collect on the
basis of requirement, convenience and availability of data as well as the reliability
of data. The sources through which the data is collected such asNewspaper, Internet, Balance sheets and some other sources of the company.

Research methodology deals with the various methods of research. The


purpose of the

research methodology is to describe the research

procedure used in the research.


Research methodology helps in carrying out the project report in by
analyzing the

various research findings collected through the data

collection methods.

In the project I am collecting the data from various website through internet
because my project based on secondary information which is already available
somewhere.

Research methodology may be treated as the heart of the projects. Without a proper
and well organized plan it is impossible to complete the projects and draw
conclusive and prepare result.

Research methodology is a systematic way which consists of series of action or


steps necessary to effectively carry out research and the desired sequencing of
these steps.

The research is processes of involve a number of inner related activities, which


overlap and rigidly follow a particular sequence.

It consist of following steps


Formulating the objective of the study.
Designing the methods of data collection.
Selecting the sample plan.
collecting the data
Processing and analyzing the data
Reporting the finding

Steps in Research Methodology

OBJECTIVE OF STUDY

An exploratory research focuses on the discovery of ideas and is generally based


on secondary data. It is primarily investigation which does not have a rigid design.
This is because a researcher engaged in an exploratory study may have to change
his focus as a result of new ideas and relationship among the variables.

Analysis and
Interpretations

Finance and accounts department


Money or capital being a scare as well as crucial resource in the working of any
organization needs to be given prime importance. The financial resources have
been planned and controlled in a proper and continuous manner. As among the
most crucial decisions of a firm are those that relate to finance. Finance and
accounts from an integral part of any organization proper and smooth functioning
of this section is very vital for the organization to survive and grow.

Finance functions are of two types:


Managerial finance function
Routine finance function

Managerial finance functions require skillful, planning, control, and execution of


financial activities.
Routine finance functions do not require a great managerial ability to carry them
out. They are chiefly and incidental to the effective handling of the material
finance functions.
Role of the finance management
Finance is lifeblood of business thats why the finance function assumes more
significance because it plays important role in successful performance of all

operational and managerial function through there are other basic function also like
production, marketing etc.
The industrial development of the last 60yrs or so has made finance and financial
management an indispensable part of business management.

A firms success and even survival, its ability and willingness to maintain
production and to invest in fixed or working capital are to a very considerable
extent determined by its financial policies, both past and present. In fact the
financial manger is now being placed at central focal point of modern corporate
organization due to organizational changes and revolutionary changes in financial
management.
Financial management is viewed properly viewed as an integral part of overall
management rather than as a staff specialty concerned with production, marketing
and other functions with in an enterprise wherever decisions are made about the
acquisition or distribution of asset.
It is often said that now a days, financial management watches and cases various
development activities liquidity and profitability of the firm.
Few activities to be cased for:
High cost of financial the risky investment due to capital-intensive
environment.

Diversification by the firm of various business, markets and products.


A high rate of inflation affecting firms forecast and planning.
Technological changes at high speed & need for more expenditure on R &
D.
Flow of information at rapid speed causing the use high-speed computers.
Last but not least, the sound financial decisions not only affect the
production and distribution but also affect the organizations profitability
and liquidity.
Financial statement analysis
Financial statement provides a view of the financial position and operation of the
firm. The focus of financial analysis is on key figures in the financial statement and
the significant relationship that exist between them.

The analysis of financial statement is a process of evaluating the relationship


between components parts of financial statements to obtain a better
understanding of the firms position & performance.

Steps of financial analysis

To select the information relevant to the decision under consideration from


the total information contained in the financial statement.
To arrange the information in a way to highlight significant relationship.
To interpret & draw inference &conclusion

RATIOS ANAYLSIS
Ratio analysis is a widely used tool of financial analysis. It may be defined as the
systematic use of ratio to interpret the financial statement so that the strengths &
weaknesses of the firm as well as historical performance and current financial
condition can be determined. Here, the term ratio refers to the numerical or
quantitative relationship between two items/ variables, which are connected with
each other in some manner. Ratio analysis makes the related information
comparable.
Ratio may be expressed in either of the following ways:
In proportion: - in this form the amounts of the two items are being
expressed in a common denominator.
E.g.- current ratio as 2:1

Quick ratio as 1:1


In times of coefficient: - in this form, a quotient obtained by dividing one item
by another item.
E.g.- 6times is the ratio between sales & stock.

In percentage: - in this form, a quotient obtained by dividing one item by


another is multiplied by 100 & becomes the percentage form of expression.
E.g.- Relationship between gross profit & sales may be expressed as 25%

Financial analysis of B. L. Agro oils ltd.


Profitability ratio:Operating profit ratio

= operating profit / sales * 100


= 467928770.37/4212526565.03*100

= 11.108
= 395052176.04/3540722900
= 11.157

Operating profit

= gross profit + depreciation + Interest other

income

(Year 2010-2011)

= 353896723.40+ 49681199.16 +72863059.81 -

8512212.00
= 467928770.37

(Year 2009-2010)

= 305585893 + 42734324.00 + 47318871.04 -

586912.00
= 395052176.04

Operating ratio Operating ratio establishes relationship between the cost


of good sold, and the other operating expenses and sales. The other
operating expenses include the cost of goods, administrative expenses, and
financial expenses, selling expenses. The costs of goods are also known as
direct operating expenses. Operating ratios are generally expressed in
percentage;
Operating ratio = Cost of sales + other operating expenses / sales
(Year 2010-2011) = 3858629841.63 +146035126.94
= 4004664968.57/4212526565.03
= 0.951
(Year 2009-2010) = 3235137007 +139424585.86
= 3374561592.86/3540722900
= 0.953

Cost of good sold = (Total sale - GP)


(Year 2010-2011) = 4212526565.03 353896723.40
= 3858629841.63
(Year 2009-2010) = 3540722900 305585893
= 3235137007

Gross profit ratio Gross profit ratio measures the relationship of gross
profit to net sales is usually represented as a percentage. It is calculated as:

Gross profit ratio = G.P / net sale * 100


(Year 2010-2011) = 353896723.40 /4212526565.03*100
= 8.401% (year 2010-2011)
(Year 2009-2010) =305585893/3540722900*100
= 8.631%
Net sales = total sales sales return
(Year 2010-2011) = 4212526565.03 0
= 4212526565.03
(Year 2009-2010) = 3540722900 0
= 3540722900

Net profit ratio: Net profit ratio is also called net profit to sales ratio (profit
margin). Profit margin is indicative of the managements ability to operate
the business with sufficient success not only to recover from the revenues of
the period, the cost of merchandise or services, the expenses of operating the
business and the cost of borrowed funds, but also to leave a margin of
reasonable compensation to the owners for providing their capital at risk.

Higher the ratio of net operating profit to sales better is the operational
efficiency of the concern.

Net profit ratio = N.P / net sales * 100


(Year 2010-2011) = 95589988.13/4212526565.03*100
= 2.269%
(Year 2009-2010) = 49440062/3540722900*100
= 1.410 %

5. Return on capital employed - It is also return on investment or rate of


return.
It indicates the percentage of return on the total capital employed in the
business.
It measures the profit, which a firm earns on investing a unit of capital the
return on
Capital expresses all efficiencies or inefficiencies of a business.

Return on capital employed = PBIT / capital employed * 100

(Year 2010-2011) = 200520420.06 / 969095600.45*100


= 20.691%
(Year 2009-2010) = 123933397/776208704*100
= 15.966%
Capital employed = total assets current liabilities
(Year 2010-2011) = 1329257685.72 - 360162085.27

= 969095600.45

(Year 2009-2010) = 973913721- 197705017


= 776208704

(Year 2010-2011) Total assets = fixed assets + current assets + investment


= 451232774.11 + 863953120.61 + 14071791.00

= 1329257685.72
(Year 2009-2010)

=351748239 + 617977315 + 4188167


= 973913721

(Year 2010-2011)

PBIT = PBT + interest


= 127657360.25 + 72863059.81

= 200520420.06
(Year 2009-2010)

= 76614526 + 47318871
= 123933397

6. Profit After tax to sales The ratio expressed the relationship between
profits
After tax and sales.

Profit after tax to sale = PBT / sale * 100


(Year 2010-2011) = 127657360.25 / 4212526565.03*100
= 3.030
(Year 2009-2010) = 76614526/3540722900*100

=2.163

Activity Ratio
Stock turnover ratio: stock turnover is also known as inventory ratio
merchandise turnover ratio or stock velocity ratio. This ratio measures the
number of times the stock turns, flows or rotates in an accounting period
compared to the sales effected during the that period. It indicates the
frequency of inventory replacement, i.e. the number of times the inventory
has been sold and replaced during the given period of time.

Stock turnover ratio = cost of goods sold / average stock


(Year 2010-2011) =3858629841.63/790749120.8/2
= 3858629841.63/395374560.4
= 9.759
(Year 2009-2010) = 3235137007/561860002.95/2
= 3235137007/280930001.47
= 11.516

Debtors turnover ratio: It is also known as turnover of debtors ratio and


accounts receivable turnover ratio. This ratio attempts to measure the
collectability of debtors and other account receivables. It shows the rate at
which the trade debts are being collected. A firm sells goods on credit and

cash basis. Debtors are expected to be converted into cash over a short
period and thus, included in current assets. Financial analysis employee two
ratios to judge the quality or liquidity of debtors: Debtors turnover and
average collection period. It measures the number of times the receivable
rotate in a year in terms of sales.
Debtors turnover ratio = sales / average receivable
(Year 2010-2011)

= 4212526565.03/98300928.1105
= 42.853

Average receivable = 196601856.21/2


(Year 2009-2010) = 3540722900/146364114.69
= 24.191
Average receivable = 292728229.38/2
=

146364114.69

Working capital turnover ratio- It reveals the efficiency with which


Working capital has been utilized by a concern.

Working capital turnover ratio = cost of goods sold / working capital


(Year 2010-2011) = 3858629841.63/503791035.34
= 7.659 times

(Year 2009-2010) = 464037007/420272298


=1.104 times

Working capital = current assets current liabilities


(Year 2010-2011) = 863953120.61 - 360162085.27
= 503791035.34
(Year 2009-2010) = 617977315 - 197705017
= 420272298

Capital turnover ratio sometimes the efficiency and effectiveness of the


operation is judged by

comparing the sales with the amount of capital

invested in the business. Capital employed is either equal to shareholders


fund plus long-term loans or equal to total assets minus current liabilities.
This is calculated by establishing the relationship between sales and capital
employed.
Capital turnover = sale / capital employed
(Year 2010-2011) = 4212526565.03 / 969095600.45
= 4.346 times
(Year 2009-2010) = 3540722900 / 776208704
= 4.561 times

Capital employed = total assets current liabilities


(Year 2010-2011) = 1329257685.72 - 360162085.27
= 969095600.45
(Year 2009-2010) = 973913721-197705017
= 776208704

Assets turnover ratio:-

Assets turnover ratio shows the relationship

between total assets and sales of concern.

Assets turnover ratio = Net Sales/Total assets

(Year 2010-2011) = 4212526565.03/1329257685.72

= 3.169 times
(Year 2009-2010) = 3540722900 / 973913721
= 3.635 times

Total assets = fixed assets + current assets + investment


(Year 2010-2011) = 451232774.11 + 863953120.61 + 14071791.00
= 1329257685.72
(Year 2009-2010) =351748239 + 617977315 + 4188167
= 973913721
I. Current assets turnover ratio - Current assets turnover attempts to measures
the utilization and effectiveness of the uses of current assets or state over
investment or under investment in current assets. It may be pointed out that over
and under

investment in current assets may indirectly affect the solvency of the

concern. Its the ratio between costs of sales and currents assets.
Current assets turnover = sales / current asset
(Year 2010-2011) = 4212526565.03/863953120.61
= 4.875 times
(Year 2009-2010)

= 3540722900/617977315

= 5.729 times
II. Fixed assets turnover ratio this ratio assumes added significance in the case
of manufacturing concern an increase in this ratio is the indicator of efficiency in
work-performance and decrease in this ratio speaks of unwise and improper
investment in fixed assets.

Fixed assets turnover ratio = Net sales / Fixed assets

(Year 2010-2011) = 4212526565.03/451232774.11

= 9.335 times
(Year 2009-2010)

= 3540722900/351748239

= 10.066 times

Financial ratio
Currents Ratio- The ratio of current assets to current liability is called
current ratio. This ratio is an indicator of the firms commitment to meet its
short-term liabilities. Current assets include cash and other assets convertible
into cash during the operating cycle of the business. Current liabilities mean
liabilities payable within a years time. An idle current ratio is 2:1, the ratio
of 2 is considered as a safe margin of solvency. A very high current ratio
would indicate the less efficient use of funds while a poor current ratio is a
danger signal to the management.

Current ratio = current assets / current liabilities


(Year 2010-2011) = 863953120.61/ 360162085.27
= 2.398: 1
(Year 2009-2010) =617977315/197705017

=3.125: 1

Current Assets = Stock + Sundry debtors + cash + loan &advances

(Year 2010-2011) = 559090945.36 +196601856.21 + 9462985.67 +

98797333.37
= 863953120.61
(Year 2009-2010) = 231658175 + 292728229 +16220352 + 77370559
= 6617977315

Current liabilities = Creditors + Current Liabilities for Others +


Provisions

(Year 2010-2011) = 152223025.00 + 174561631.27+ 33377429.00

= 360162085.27
(Year 2009-2010) = 68151089+101543687 +28010241
= 197705017

Quick ratio This ratio is also called acid test ratio and liquidity ratio.
This ratio is ascertained by comparing the liquid assets to current liability.
The idle ratio is 1. This ratio is also an indicator of short-term solvency of
the company. A comparison of current ratio to quick ratio will indicate the

inventory hold-ups. For example, if two units have same current ratio but
different liquidity ratio, it indicates over stocking by the concern having low
liquidity ratio as compared to the concern, which has a higher liquidity ratio.

Quick ratio = liquid assets / current liabilities


(Year 2010-2011) = 304862175.25 / 360162085.27
= 0.846: 1
(Year 2009-2010) = 386319140 /197705017
= 1.954: 1
Liquid assets = Current assets (inventory + prepaid exp.)
(Year 2010-2011) = 863953120.61- (559090945.36 + 0)
= 304862175.25
(Year 2009-2010) = 617977315 (231658175 + 0)
= 386319140

Cash ratio This is the ratio between cash and balances to current liabilities.
As such
Cash ratio = Cash + bank / current liabilities
(Year 2010-2011) = 9454306.00 + 8679.67/360162085.27
= 9462985.67/360162085.27

= 0.026: 1
(Year 2009-2010) = 16220352/197705017

=0.082:1

Solvency ratio This ratio highlights upon the long-term solvency of the
concerned and is ascertained by the formula
Solvency ratio = Total assets / Total liabilities
(Year 2010-2011) = 1329257685.72/979021639.01
= 1.358

(Year 2009-2010) = 973913721/724150419.01


= 1.345

Debt equity ratio - The debt equity ratio is determined to ascertain the
soundness of long-term financial policies of the company. It is also known as
external and internal equity ratio. This ratio establishes the relationship
between the internal equities and external equities. If this ratio is 1:1, the
long-term financial position of any business concern is considered
satisfactory. If this ratio is lower than 1:1, it means that outside liabilities are

lower than shareholders fund and in this case financial position will be
considered more good and satisfactory.

Debt equity ratio

= long term debt / shareholders funds

(Year 2010-2011) = 618712496.74/336806671.63


=1.837
(Year 2009-2010) = 470403900.01/250024302.45
=1.881

a)Table form
b)Graphical

Profitability ratio.
Operating profit ratio
Operating ratio
Gross profit ratio
Net profit ratio
Return on capital employed
Profit After tax to sales

2009-2010
11.16%
0.95%
8.63%
1.41%
15.97%
2.16%

2010-2011
11.11%
0.95%
8.40%
2.27%
20.69%
3.03%

2009Activity Ratio
Stock turnover ratio
Debtors turnover ratio
Working capital turnover ratio
Capital turnover ratio
Assets turnover ratio
I. Current assets turnover ratio
II. Fixed assets turnover ratio

2010
11.516
24.191
1.104
4.561
3.635
5.729
10.066

2010-2011
9.759
42.853
7.659
4.346
3.169
4.875
9.335

Financial ratio
Currents Ratio
Quick ratio
Cash ratio
Solvency ratio
Debt equity ratio

2009-2010
3.125
1.954
0.082
1.345
1.881

2010-2011
2.398
0.846
0.026
1.358
1.837

Findings of the study

Based on the above financial analysis it is clear that Quick ratio of B.L. Agro
oils ltd is more than 1 i.e.1.594 in 2009-2010 and less than in.846 in 20102011.

Debt-equity ratio of B.L. Agro oils ltd is very less which means that B.L.
Agro oils ltd has not been aggressive in financial its growth with debt. The
company has better support from the shareholders.

In B.L. Agro oils ltd collection period is very quick i.e. 9days.

During my visit I observed that there is no more wastage of raw material ,

Inventory management in B.L. Agro oils ltd is effective & efficient.


Through the financial analysis it is find that the return on capital employed
is 20.691%
To meet the challenges of growing demands, B.L. Agro is preparing for
capacity enhancement and expansion of manufacturing capabilities.

The company has an ambitious plan for setting up an Integrated Oil


Complex for which it has already identified the locations. With
comprehensive facilities available within this complex, the company will be
able to provide integrated solutions and enhance its competitive pricing
power.

In addition to the existing facilities, the proposed complex will include


Solvent Extraction Plant, Rice Bran & Sunflower Refinery and Mustard
Crushing Facilities.

To make its procurement processes smooth and cost effective B.L. Agro oils
is also contemplating setting up of Rack Facilities connecting its Oil
Complex to various Port.
With the addition of Mustard Crushing Facilities, the company plans to
consolidate as

well as increase its market share in the mustard

segment.
The company is working to expand its product and brand portfolio through
extension of the existing lines as well as through diversification into other
edible food items.
Through ensuring a substantial market share in the mustard oil as well as
other segments, B.L. Agro aims to obtain better pricing power.

Expansion in geographic reach and newer markets - The company has


already extended its distribution network covering almost entire North India
and is now poised to further expand in newer markets.

The company has an Excellent Track Record With the Management


experience of 50 years, B.L. Agro has displayed a consistent and exemplary
growth right since its inception.

B.L. Agro Oils Ltd. possesses India's largest mustard oil packaging facilities.
In-house QC Lab Best equipped & biggest in UP. The company has an inhouse Quality Control Laboratory with a Gas Chromatography that ensures
purity, ideal blends and PFA certified quality of all B.L. Agro products.
The company's lab is the biggest and best equipped in the entire state of
Uttar Pradesh.
The processes and facilities at the B.L. Agro plant match the highest
standards The Double Filter Process for Mustard Oil ensures that only the
purest product is dispatched from the B.L. Agro plant.
The Refining is undertaken by Chemical Refining process through which
flows out the purest form of cooking oil that beats the best known brands on
transparency tests. Moreover, the oil is processed using the Nitrogen
Blanketing process that reduces the loss of nutritional values and ensures
Maximum Nutrition Retention (MNR) in the Refined Oils.

The financial position of B.L.Agro is much better because company earns a


good profit in 2009-2010 gross profit ratio is 8.63% and in 2010-2011 it is
8.40% .
The net profit ratio is find out of B.L. agro oils ltd in 2009-2010 is 1.421%
and in 2010-2011 it is 2.27%.

BIBLIOGRAPHY

BOOKS/MAGAZINES:
Marketing Management by Philip Kotler
Marketing Management by Shrma,Kothari
Economic Times.
Data gathered from Broachers.
Business World

WEBSITES:
http://www.google.com
http://www.blagro.org