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P ublis he d b y: S out h A s ia n A c ade m ic R es e arc h J our nals

ACADEMICIA:
An International Multidisciplinary Research Journal
( A D o u b le B l i n d R e fe r r e d & R e v ie we d I nt e r na t io na l J o ur na l)

A PAPER ON FINANCIAL ANALYSIS OF K2K INFRASTRUCTURE PVT LTD THROUGH COMPARATIVE AND TREND ANALYSIS
Dr. G. Malyadri*; B. Sudheer Kumar** *Associate Professor, Department of MBA, Sreenivasa Institute of Technology and Management Studies (SITAMS), Chittoor, A.P., India. **Assistant Professor, Department of MBA, Vaagdevi Institute of Technology and Science (VITS), A.P., India. ABSTRACT Financial management is planning organizing, Directing and controlling various financial activities of the organization. In order to perform all the managerial function effective and efficiency, sufficient, past and present information about the form and its operation should be equipped along with this changes overtime. A statement portion of information required in financial decision-making is found in financial statements, particularly, the income statements and the balance sheet financial statements and the balance sheet financial statement, particularly, the income statements and the balance sheet financial statements also help in forecasting the financial effects of planning. KEYWORDS: Financial Statement Analysis, Comparative Income Statement & Balance Sheet, Comparative Statement Analysis, Common Size Statement Analysis, Trend Analysis. _________________________________________________________________________ INTRODUCTION Financial Management emerged as a distinct field of study at the turn of this century. Many eminent persons defined it in the following ways.

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DEFINITION OF FINANCIAL MANAGEMENT 1. ACCORDING TO GUT HMANN AND DOUGHAL: Business finance can broadly be defined as the activity concerned with planning, rising, controlling and administering of used in the business. 2. ACCORDING TO BONNEVILE AND DEWEY: Financing consists is the rising, providing and managing of all the money, capital or funds of any kind to be used in connection with business. TYPES OF FINANCIAL ANALYSIS The process of financial analysis may be classified based on the nature of information used and as the basis of methodology of operation. 1. ON THE BASIS OF NATURE OF INFORMATION USED: A. EXTERNAL ANALYSIS

The information used is that which is freely available to any body published financial statement are an example of such information. There is no access to internal records of an organization with increasing emphasis on disclosers in recent timer the quality of external analysis is likely to improve in the future. B) INTERNAL ANALYSIS

The source of information is internal analysis is the internal for use of mgt. For other internal needs of the organizations. 2. ON THE BASIS OF METHODOLOGY OF OPERATION: A) HORIZONTAL ANALYSIS It involves analysis and review of financial statements; pertaining to a number of years. An attempt is made to identify the periodical trend of various items in the financial statement percentage Increases/Decreases is calculated for all such item. Alternatively base years are indexed to that of base period. TRENDS ANALYSIS: - It is also known as dynamic analysis. VERTICAL ANALYSIS: - Vertical analysis involves anglicizing a single set of financial statement, by expressing various items of the statement, as a percentage of a particulars item. Quantitative relationship is established among great various items at a particular data. It is also known as Static analysis (or) structural ana lysis.

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TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS A. B. C. D. E. F. Comparative statement analysis. Common Size Statement Analysis. Trend analysis. Fund flow analysis. Cash flow analysis. Ratio analysis.

A. COMPARATIVE STATEMENT ANALYSIS The comparative financial statements are statements of the financial position at different period of time. The elements of financial position are shown in a comparative form so as to give an idea of financial position at two or more periods. Any statement prepared in a comparative form will be covered prepared in a comparative form for financial statements (Balance sheet and income statement) are prepared in comparative form of financial analysis purposes. A. COMPARATIVE BALANCE SHEETS The comparative balance sheet analysis is the study of the trend of the same items, group of items and computed items in two or more balance sheets of the same business enterprise an different dates. The changes in periodic balance sheet items reflect the conduct of a business. B. INTERPRETATION OF COMPARATIVE BALANCE SHEET While interpretation comparative balance sheet the interpretation is expected to study the following aspects. 1) Current financial position and liquidity position, 2) Long-term financial position, 3) Profitability of the concern, 4) For studying current financial position or short term financial position of a concern one should see the working capital in both the years. The excess of current assets over current liabilities will give the figures of working capital. 5) The increase in working Capital will mean improvement in the current financial position of the business. An increase in current assets accompanied by the increase in current liabilities of the same amount will not show any improvement in the short-term financial position.

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6) The long term financial position of the concern can be analyzed by studying the changes in fixed assets, long term liabilities and capital the proper financial policy of the concern will be finance fixed assets by the issue of either long term securities such as debentures, bonds, loans from financial institution on issue of fresh share capital. An increase in fixed assets should be compared to the increase in long-term loans and capital. 7) The next aspect to be studied in a comparative balance sheet question is the profitability balance sheet question is the profitability of the concern. The study of increase or decrease in retained earnings, various resources and surplus etc. Will enable the interpretation to see whether the profitability has improved or not. 8) After studying various assets and liabilities an opinion should be formed about the financial position of the concern are cannot say if short term financial position is good then long term financial position is good then long term financial position will also be good or vice-versa. B. COMMON SIZE STATEMENT ANALYSIS A common size statement facilitates comparison of financial statements of not only a single firm over a time period but also comparison of financial statements of different companies of financial statements of different companies for any given time. Under this method, all the times of the statement are presented as percentages or rations of a particulars item. Therefore, Even if the absolute figures relates to a vastly. Different scale of operations, a common base for comparison is created. In case of common size income statement, all items are presented as a percentage of net sellers. A common size balance sheet shows each item as a Percentage of total asset or total liabilities. A common size statement helps in determining the relative efficiency and sounders of a firm and helps in understanding its financial strategy. C. TREND ANALYSIS Trend analysis involves computations of index number of the movements of the various financial items in the financial statements for a no. of periods. It helps in understandings the nature and rate of movements in various financial factors however; conclusion should not be drawn on the basis of a single trend. Trends of related items should be carefully studied. Due weighted should be given to extraneous factors such as govt. policy, economic policy, economic conditions etc, as they can affect the trend significantly. POINTS TO BE NOTED 1. The accounting policies for the entire period should be uniform. 2. Trend values must be read along with absolute values. 3. Non-Financial factors should be considered while interpreting the trend.

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D. FUND FLOW ANALYSIS A funds flow statements is a statement which explain the various sources from which funds were raised and the user to which these funds were put. (The reader may notice that this definition of funds flow statement comes disconcertingly close to the definition of a balance sheet. Since liabilities and assets are themselves sources and user of funds. Respectively even a balance sheet itself may be considered a form of funds flow statement one would notice that in fact the balance sheet of most companies are increasingly being expressed in the Sources of funds and Application of funds formats. The major differences, however, between a true fund flow statement and a balance sheet lies in the fact that the former capturer the movements in funds. While the latter merely presents a static picture of the sources and user of funds an account of this property a funds flow statement would enable one to see how the business financed its fixed assets, built up the inventory, discharged its liabilities, paid its dividends and taxes and so on. Similarly it would enable one to see how the business managed to meet the above capital or revenue expenditure was it by raising additional capital or loans from public? Was it by stretching the trade creditors or by incurring some other liabilities. E. CASH FLOW ANALYSIS Cash flow analysis involves the preparation of a cash flow statement from one period to another. The term cash includes cash and bank balance. This statement is very much similar to the statement of funds flow statement focuses attention cash instead of working capital. F. RATIO ANALYSIS Ratios are well known and widely used tools of financial analysis. A ratio gives the mathematical relationship between one variable and another. Though the computation of a ratio involves only a simple arithmetic operation, its interpretation is a difficult exercise. The analysis of a ratio can disclose relationship as well as basis of comparison that reveal conditions of the ratio. The usefulness of ratios is ultimately dependent on their intelligent and skill interpretation. REVIEW OF LITERATURE 1. ENVIRONMENTAL AND FINANCIAL PERFORMANCE LITERATURE

Donald P.Cram, on March 27 , 2000 The study reviews the growing literature relating corporate environmental performance to financial performance. The researchers seek to identify achievements and limitation of this literature and to highlights areas for further research. This studys primary interest is to assess the adequacy of the literature in informing corporate managers how, when, and where to make proenvironment investments that will be pay off with financial returns for long-term shareholders. The South Asian Academic Research Journals http://www.saarj.com 131

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To do so, we create a conceptual framework that maps the influence of regulators, public health scientists, environmental advocates, consumers, employees, and other interested parties interested in influencing corporate actions that effect the environment. 2. IMPLICATIONS FOR FINANCIAL PERFORMANCE AND CORPORATE SOCIAL RESPONSIBILITY Philippe Jacquart, Catherine Ramus & John Antonakis, on may 23, 2004 This study investigated whether CEO implicit motives predict corporate social performance and financial performance. Using longitudinal data on 258 CEOs from 118 firms, and controlling for country and industry effects, we found that motives significant predicated both financial performance (Tobins Q & the CAPM) and social responsibility. In general, need for and responsibility disposition were positively predictive whereas need for achievement and affiliation were negatively predictive of outcomes. Contrary to previous theorizing, corporate social responsibility had no link to financial performance. Our findings suggest that executive characteristics have important consequences for corporate level outcomes. NEED OF THE PAPER

1. 2. 3.

Financial analysis is a process of identifying the strength and weakness of the company to establishing the relationship between the balance sheet and profit &loss account. The financial data can be used to analyze the firm past performance and assess in present financial strength. Hence the present study is made to analyze the financial health of the company.

OBJECTIVES To study the financial statements of K2K Infrastructure pvt., ltd. To evaluate the financial efficiency through suitable tools. To analyze the sales, stock and profit of the company.

METHODOLOGY The research methodology used for this study includes both primary & secondary sources of data. However most of the study is conducted based on secondary sources. TYPE OF RESEARCH: This study is an analytical one which is based on the existing facts & figures and the method of the study is descriptive.

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NATURE OF DATA

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1. Primary sources of data were collected through interviews and meetings or discussions with executives and top managers in the financial departments of this company itself. 2. Secondary sources of data were collected for this study and they are from annual reports, official websites, books & journals. TOOLS USED 1. Comparative income statement & 2. Balance sheet and 3. Trend Analysis are the tools used for the analysis and Bar charts are used in it. DATA ANALYSIS AND INTERPRETATION FINANCIAL STATEMENT ANALYSIS Financial statement analysis is defined as the process of identifying financial strengths and weakness of the firm by properly establishing relationship between the items of the balance sheet profit and loss account. There are various methods or techniques that are used in analyzing financial statements, such as comparative statements, common size percentages and trend analysis. COMPARATIVE INCOME STATEMENT The comparative income statement summarizes and compares income and expenses across two or more specified time periods. You can use to compare your companys performance with previous years. This comparison helps you to measure your companys progress and to make future projections. COMPARATIVE BALANCE SHEET A comparative balance sheet is designed to show financial differences between several accounting periods. A balance sheet is a detail account of everything lost and gained financially during a certain time, containing both physical and abstract data. A comparative balance sheet is useful because a business can instantly compare profits and losses between different time periods. Most businesses use comparative balance sheets to help increase profits and functionality of a company.

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TREND ANALYSIS

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Trend analysis is a form of comparative analysis that is often employed to identify current and future movements of an investment or group of investments. The process may involve comparing past and current financial ratios as they related to various institutions in order to project how long the current trend will continue. This type of information is extremely helpful to investors who wish to make the most from their investments. The process of a trend analysis begins with identifying the category of the investments that are under considerations. Once the focus is established, the investors take a long at the general performances for the category over the last couple of years. After identifying past and present factors that are maintaining a current trend in performance, the investor can analyze each factor and project which factors are likely to continue exerting influence on the direction of the investment. Assuming that all or most of the factors will continue to exerting influence for the foreseeable future, the investor can make an informed decision on whether to buy or sell a given assets. A Trend Analysis may be used to identify and project upswings in the performance of a stock or commodity to identify the potential for an upcoming downturn in value. By comparing the financial ratio of the past with the present and identifying key factors that helped the investment to arrive at the current point, it is possible to use the process of trend analysis to project future worth and adjust the components of the financial portfolio accordingly. ANALYTICAL PART OF FINANCIAL STATEMENT ANALYSIS COMPARATIVE INCOME STATEMENT & BALANCE SHEET COMPARATIVE INCOME STATEMENT [2007 & 2008] TABLE NO: 1: COMPARATIVE INCOME STATEMENT OF K2K INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-08 PARTICULARS Net sales Cost of goods sold Gross profit(A) Operating expenses Employee benefit Depreciation & amortization expenses 1,25,70,58,350 1,59,39,73,597 33,69,15,247 11,35,52,319 13,60,39,414 2,24,87,095 26.80 19.80 MARCH-31 2007 68,51,329,288 45,85,338,729 22,65,990,559 INCREASE / DECREASE AMOUNT PERCENTAGE 1,49,66,33,258 21.84 94,75,13,379 54,91,19,879 20.66 24.23

2008 83,47,962,546 55,32,852,108 28,15,110,438

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1,37,06,10,669 1,73,00,13,011 35,94,02,342

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26.22 21.19

Total operating expenses(B) Operating income(A-B) Non Operating income Other income Non Operating expenses Other expenses Profit Before interest & tax Interest (finance cost) Profit Before Tax Tax Provision for tax adjustments Profit after tax

8,95,379,890

1,08,50,97,427 18,97,17,537

20,74,78,708

26,03,9887

5,28,61,179

25.48

60,71,93,931 (39,97,15223) 29,46,986.80 10,50,165,43 11,89,98,685 (6,64,879) (1,33,17,271)

73,92,60,892

13,20,66,961

21.75 19.81 23.19 10.34 20.62 76.98 298.87

(47,89,210,05) 7,92,05,782 36,30,471,71 115,873,834 14,35,34,982 (1,17,66,272) (2,64,84,476) 6,83,48,491 1,08,57,291 2,45,36,297 5,11,801 3,98,01,747

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2008 INTERPRETATION From the above table-3.1, it shows that the comparative Income Statement of K2K Infra Structure PVT. LTD., for the years 2007 & 2008. By comparing the year 2008 with 2007 of Income & Expenditure, the sales have increased 21.84 percent while the cost of goods sold has increased by 20.66 percent and the operating expenses have increased to 26.22 percent. During the year 2007, it reflects a favorable impact on net profit because costs increased at a faster rate than sales.

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COMPARATIVE BALANCE SHEET [2007 & 2008] TABLE NO: 2: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD.AS AT 31-03-08 ASSETS PARTICULARS MARCH 31ST 2007 2008 69,23,09,273 84,42,79,601 INCREASE /DECREASE AMOUNT PERCENTAGE 15,19,70,328 21.95 21.04 Investments Current Assets: Inventories Trade Receivables Cash & cash equivalents Short term loan & advance Other current Assets Total current assets Total Assets 12,30,201,244 22,56,075,207 10,25,873,963 83.39 Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2008 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2007 & 2008. By comparing the year 2008 with 2007 of Assets, the fixed assets have increased to 21.95 percent and the current assets have increased by 21.95 percent. Finally, the total assets were increased at 83.39 percent. The South Asian Academic Research Journals http://www.saarj.com 136 25,99,100,130 31,39,146,500 54,00,46,370 31,78,530,958 39,06,745,071 72,82,14,113 12,06,12,411 58,52,60,974 71,84,22,727 19,58,68,794 67,71,47,529 86,39,30,154 7,52,56,383 9,18,86,555 14,55,07,427 20.79 22.91 0.62 15.70 20.25 44,07,775,965 53,35,118,006 92,73,42,041

Fixed Assets (Net Block)

72,01,927,200 87,82,838,048 15,80,910,848 21.95

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COMPARATIVE INCOME STATEMENT [2007 & 2008] TABLE NO: 3: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD.AS AT 31-03-08 LIABILITIES PARTICULARS MARCH-31 2007 2008 4,20,23,35,965 73,89,63,023 INCREASE/ / DECREASE AMOUNT PERCENTAGE 22.07 21.29

Capital and reserves Long term loans

5,12,96,78,006 92,73,42,041 89,62,96,370 15,73,33,347

Current liabilities

Short term borrowings Trade payables Other current liabilities Short term provisions

1,36,79,49,161 1,53,88,84,602 2,30,00,82,244 14,13,03,065

1,59,50,59,953 22,71,10,792 1,90,10,78,783 36,21,94,181 2,85,37,58,835 55,36,76,591 17,23,20,811 15,80,17,746

16.60 23.54 24.07 111.83

Total current liability

53,48,21,90,720 6,52,22,18,382 4,69,59,97,234 87.80

Total liabilities

12,30,201,244

22,56,075,207

10,25,873,963

83.39

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2008 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2007 & 2008. By comparing the year 2008 with 2007 of Liabilities, the capital & reserves have increased to 22.07 percent and the current liabilities have increased by 87.80 percent. Finally, the total assets were also increased at 114.78 percent.

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COMPARATIVE INCOME STATEMENT [2008 & 2009] TABLE NO: 4: COMPARATIVE INCOME STATEMENT OF K2K INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-09 PARTICULARS MARCH-31 2008 2009 83,47,962,546 55,32,852,108 97,05,770,402 64,20,176,870 INCREASE / DECREASE AMOUNT PERCENTAGE 13,57,807,856 88,73,24,762 16.27 16.04

Net sales Cost of goods sold Gross profit(A) Operating expenses Employee benefit Depreciation & amortization expenses Total operating expenses(B) Operating income(A-B) Non Operating Incomes Other income Non Operating expenses Other expenses Profit Before interest & tax Interest (finance cost) Profit Before Tax Tax Provision for tax adjustments

28,15,110,438

32,85,593,532

47,04,83,094

16.71

15,93,973,597 13,60,39,414 17,30,013,011 10,85,097,427

18,54,620,462 15,70,22,574 20,11,643,036 12,73,950,496

26,06,46,865 2,09,83,160 28,16,30,025 18,88,53,069

16.35 15.42 16.28 1740.

26,03,39,887

30,03,95,218

40,055,331

15.38

73,92,60,892

76,65,82,432

27,321,540

3.69 -197.34 16.28 -61.99 15.39 105.22

(47,89,21,005) (46,61,87,214) (94,51,08,219) 36,30,47,171 42,21,47,873 5,91,00,702 11,58,73,834 14,35,34,982 (11,76,672) 4,40,39,341 16,56,22,072 24,14,734 (71,834,493) 22,087,090 12,38,062

Profit after tax

10,16,380,524 (11,91,67,667) (11,35,548,521) -11.72 Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2008 & 2009 The South Asian Academic Research Journals http://www.saarj.com 138

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INTERPRETATION

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From the above table, it shows that the comparative Income Statement of K2K Infra Structure PVT. LTD., for the years 2008 & 2009. By comparing the year 2009 with 2008 of Income & Expenditure, the sales have increased 16.27 percent while the cost of goods sold has increased by 16.04 percent and the operating expenses have increased to 16.28 percent. During the year 2009, it reflects a favorable impact on net profit because costs increased at a faster rate than sales. COMPARATIVE BALANCE SHEET [2008 & 2009] TABLE- 5: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD.AS AT 31-03-09 ASSETS PARTICULARS Fixed Assets (Net Block) Investments Current Asset Inventories Trade Receivables Cash & cash equivalents Short term loan & advance Other current Assets Total current assets Total Assets 31,39,146,500 31,39,146,500 39,06,745,071 39,06,745,071 19,58,68,794 67,71,47,529 86,39,30,154 19,58,68,794 67,71,47,529 86,39,30,154 53,27,118,006 56,33,118,006 (30,60,00,000) -5.74 MARCH-31 2008 84,16,75,454 INCREASE / DECREASE AMOUNT PERCENTAGE

2009 84,16,75,454

87,82,838,048 87,82,838,048 14,95,163,151 15,25,763,151 (30,600,000) -2.05

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2008 & 2009

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INTERPRETATION

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From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2008 & 2009. By comparing the year 2009 with 2008 of Assets, the fixed assets have decreased to nil percent and the current assets have in decreased by 00.00 percent. Finally, the total assets were decreased at -2.05 percent. TABLE- 6: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD., AS AT 31-03-09 LIABILITIES PARTICULARS Capital and reserves Long term loans 89,62,96,370 Current liabilities Short term borrowings Trade payables Other current liabilities Short term provisions Total current liability 65,22,218,382 Total liabilities 14,95,163,151 15,25,763,151 (30,600,000) -2.05 15,95,059,953 15,95,059,953 1,90,10,78,783 19,01,078,783 2,85,37,58,835 28,53,758,835 17,23,20,811 17,23,20,811 6,52,22,18,382 MARCH-31 2008 2009 51,21,678,006 51,29,678,006 89,62,96,370 INCREASE / DECREASE AMOUNT PERCENTAGE (80,00,000) -0.15

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2008 & 2009 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2008 & 2009. By comparing the year 2009 with 2008 of Liabilities, the capital & reserves have decreased to -0.15 percent and the current liabilities have decreased by 0.00 percent. Finally, the total assets were also increased at 900.64 percent.

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COMPARATIVE INCOME BALANCE SHEET [2009 & 2010] TABLE- 7: COMPARATIVE INCOME STATEMENT OF K2K INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-10 PARTICULARS Net sales Cost of goods sold Gross profit(A) Operating expenses Employee benefit Depreciation & amortization expenses Total operating expenses(B) Operating income(A-B) Non Operating Income Other income Non Operating expenses Other expenses Profit Before interest & tax Interest (finance cost) Profit Before Tax Tax Provision for tax adjustments Profit after tax 76,65,82,432 (46,61,87,214) 42,21,47,873 44,039,341 16,56,22,072 (24,14,734) (1811,91,67,997) 10,23,031,156 (61,27,60,020) 57,24,27,601 40,332,419 22,73,36,211 (38,14,909) (,31,88,883) 25,64,48,724 10,78,947,234 15,02,79,728 (37,06,922) 61,714,139 14,00,175 6, 4020,886 33.45 231.44 35.60 -8.42 37.26 57.98 53.72 18,54,620,462 15,70,22,574 20,11,643,036 12,73,950,496 25,75,167,308 17,64,20,242 27,51,587,550 (15,44,935,113) 10,72,054,684 19,397,668 73,99,44,514 28,18,885,609 578.04 12.35 36.78 221.27 MARCH-31 2009 97,05,770,402 64,20,176,870 32,85,593,532 INCREASE / DECREASE 2010 AMOUNT PERCENTAGE 13,477,458,892 37,71,688,488 38.86 14,10,934,525 (50,09,242,345) -78.02 12,06,652,437 87,80,930,833 267.25

30,03,95,218

41,02,71,136

10,98,75,918

36.58

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2009 & 2010 The South Asian Academic Research Journals http://www.saarj.com 141

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INTERPRETATION

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From the above table, it shows that the comparative Income Statement of K2K Infra Structure PVT. LTD., for the years 2009 & 2010. By comparing the year 2010 with 2009 of Income & Expenditure, the sales have increased 38.86 percent while the cost of goods sold has decreased by -78.02 percent and the operating expenses have increased to 36.78 percent. During the year 2010, it reflects a favorable impact on net profit because costs increased at a faster rate than sales. COMPARATIVE BALANCE SHEET [2009 & 2010] TABLE-8: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD.AS AT 31-03-10 ASSETS PARTICULARS MARCH-31 2009 2010 98,17,20,466 10,72,102,792 INCREASE / DECREASE AMOUNT PERCENTAG E 90,382,326 9.21

Fixed Assets (Net Block) Investments Current Assets Inventories Trade Receivables Cash & cash equivalents Short term loan & advance Other current Assets Total current assets Total Assets

13,78,25,496

16,84,53,384

30,627,888

22.22

35,33,891,27 9 43,10,168,68 7 22,77,54,411 67,11,01,778 84,33,64,691 95,86,280,84 6

40,94,756,008 56,08,64,729 48,81,317,284 57,11,48,597 22,94,77,613 17,23,202 32,02,35,507 (35,08,66,271) 69,63,34,622 10,22,212,103 (14,70,30,069) 63,58,40,188

15.87 13.25 0.76 -52.28 -17.43 6.63

10,70,582,68 22,62,768,219 11,92,185,538 111.36 1 Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2009 & 2010 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2009 & 2010. By comparing the year 2010 with 2009 of Assets, the fixed assets The South Asian Academic Research Journals http://www.saarj.com 142

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have increases to 9.21 percent and the current assets have in increased by 6.63 percent. Finally, the total assets were increased at 111.36 percent. TABLE-9: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD.AS AT 31-03-10 LIABILITIES PARTICULARS Capital and reserves Long term loans Current liabilities Short term borrowings Trade payables Other current liabilities Short term provisions Total current liability Total liabilities 10,70,582,681 22,62,768,219 11,92,185,538 111.36 1,85,47,20,876 2,20,12,54,399 3,27,11,14,922 20,03,73,037 7,52,74,63,234 1,96,68,81,070 11,21,60,194 2,69,04,22,043 48,91,67,644 3,99,35,84,905 72,24,69,983 2,94,19,00,378 2,74,15,27,341 11,59,27,884 4,66,53,25,162 6.05 22.22 22.09 1368.21 54.01 MARCH-31 2009 2010 5,13,76,78,006 5,17,76,78,006 4,56,67,531 2,57,41,711 INCREASE / DECREASE AMOUNT 4,00,00,000 (1,99,25,820) PERCENTAGE 0.78 -43.63

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2009 & 2010 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2009 & 2010. By comparing the year 2010 with 2009 of Liabilities, the capital & reserves have decreased to 0.78 percent and the current liabilities have increase by 54.01 percent. Finally, the total assets were also increased at 318.49 percent.

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COMPARATIVE INCOME STATEMENT [2010 & 2011] TABLE-10: COMPARATIVE INCOME STATEMENT OF K2K INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-11 PARTICULARS Net sales Cost of goods sold Gross profit(A) Operating expenses Employee benefit Depreciation & amortization expenses Total operating expenses(B) Operating income(AB) Non Operating Income Other income Non Operating expenses Other expenses Profit Before interest & tax Interest (finance cost) 41,02,71,136 46,62,17,200 5,59,46,064 13.64 2,57,51,67,308 17,64,20,242 2,75,15,87,550 294,90,53,759 19,99,09,366 3,14,89,63,125 37,38,86,451 2,34,89,124 39,73,75,575 14.52 13.31 14.44 -211.13 MARCH-31 2010 13.47.74.58,892 1,41,09,34,525 1,20,66,52,437 2011 15,32,66,57,832 1,00,59,46,476 1,43,20,71,135 INCREASE / DECREASE AMOUNT PERCENTAGE 184,91,98,940 13.72 (40,49,88,049) -28.70 1,30,04,05,892 1086.81

(1,54,49,35,113) (1,71,68,91,990) 3,26,18,27,103

1,02,30,31,156 (61,27,60,020) 57,54,27,601 4,03,32,419 22,73,36,211 (38,14,909) (18,31,88,883)

1,18,52,62,677 (71,90,45,477) 65,10,54,092 6,79,91,385 25,78,82,058 (37,66,942) (18,61,23,731)

16,16,31,521 1,33,18,05,497 7,86,26,491 2,76,58,966 3,05,45,847 (47,967) (36,93,12,614)

15.80 217.34 13.73 68.58 13.44 -1.26 -201.60

Profit Before Tax Tax Provision for tax adjustments Profit after tax Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2010 & 2011

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From the above table, it shows that the comparative Income Statement of K2K Infra Structure PVT. LTD., for the years 2010 & 2011. By comparing the year 2011with 2010 of Income & Expenditure, the sales have increased 13.72 percent while the cost of goods sold has decreased by -28.70 percent and the operating expenses have increased to 14.44 percent. During the year 2011, it reflects a favorable impact on net profit because costs increased at a faster rate than sales. COMPARATIVE BALANCE SHEET [2010 & 2011] TABLE-11: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD., AS AT 31-03-11 ASSETS PARTICULARS MARCH-31 2010 Fixed Assets (Net Block) Investments Current Assets Inventories Trade Receivables Cash & cash equivalents Short term loan & advance Other current Assets 1,02,22,12,103 1,17,86,50,118 Total current assets Total Assets 1,51,25,26,189 8,26,54,89,737 67,52,963,548 446.47 15,64,38,015 6.63 4,09,47,56,008 4,63,04,04,554 4,88,13,17,284 5,56,96,78,732 22,94,77,613 26,07,70,015 32,02,35,507 43,20,85,803 69,63,34,622 89,35,62,071 53,56,48,546 68,83,61,448 3,12,92,402 11,18,50,296 19,72,27,449 15.87 13.25 0.76 -52.28 -17.43 2011 INCREASE / DECREASE AMOUNT 43,02,86,744 PERCENTAGE 9.21

1,07,21,02,792 1,50,23,89,536

16,84,53,384

19,14,24,300

2,29,70,916

22.22

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2010 & 2011 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2010 & 2011. By comparing the year 2011 with 2010 of Assets, the fixed assets have increases to 40.13 percent and the current assets have in increased by 15.30 percent. Finally, the total assets were increased at 26.94 percent. The South Asian Academic Research Journals http://www.saarj.com 145

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TABLE-12: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD., AS AT 31-03-11 LIABILITIES PARTICULARS MARCH-31 2010 Capital and reserves Long term loans Current liabilities Short term borrowings Trade payables Other current liabilities Short term provisions Total current liability Total liabilities 1,96,68,81,070 2,57,60,01,216 2,69,04,22,043 3,05,72,97,776 3,99,35,84,905 4,14,04,37,393 29,49,00,378 27,82,95,882 60,91,20,146 36,68,75,733 14,68,52,488 (1,66,04,496) 6.05 22.2 22.09 1368.21 12.37 446.47 2011 INCREASE / DECREASE AMOUNT 25,00,00,000 83,08,13,020 PERCENTAGE 0.78 -43.63

5,17,76,78,006 5,42,76,78,006 1,00,17,95,484 1,83,26,08,504

8,94,57,88,396 1,00,52,03,227 1,10,62,43,871 1,51,25,26,189 8,26,54,89,737 67,52,963,548

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2010 & 2011 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2010 & 2011. By comparing the year 2011 with 2010 of Liabilities, the capital & reserves have decreased to 4.83 percent and the current liabilities have increase by 12.37 percent. Finally, the total assets were also increased at 446.47 percent.

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COMPARATIVE INCOME STATEMENT [2011 & 2012] TABLE-13: COMPARATIVE INCOME STATEMENT OF K2K INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-12 PARTICULARS Net sales Cost of goods sold Gross profit(A) Operating expenses Employee benefit Depreciation & amortization expenses Total operating expenses(B) Operating income(A-B) 2,94,90,53,759 19,99,09,366 314,89,63,125 3,78,85,79,017 25,68,04,710 4,04,53,83,727 83,95,25,258 5,68,95,344 8,964,20,602 28.47 28.46 28.47 -231.42 MARCH-31 2011 15,32,66,57,832 1,00,59,46,476 1,43,20,71,135 2012 19,21,20,03,939 1,32,20,54,648 1,78,89,94,928 INCREASE / DECREASE AMOUNT 3,88,53,46,100 31,61,08,172 ,164,57,87,815 PERCENTAGE 25.35 31.42 114.92

(1,71,68,91,990) (2,25,63,88,799) (3,97,32,80,789)

46,62,17,200

48,34,80,785

1,72,63,585

3.70

Non Operating Income Other income Non Operating expenses

1,18,52,62,677 (71,90,45,477) 65,10,54,092 6,79,91,385 25,78,82,058 (37,66,942)

1,47,88,27,848 (99,53,47,063) 91,26,64,611 8,26,82,452 43,01,736 1,78,78,664

29,35,65,171 (71,43,92,540) 2,61,61,0519 1,46,91,067 (25,35,80,322) 1,41,11,722

24.77 -238.43 40.18 21.61 -98.33 374.62

Other expenses Profit Before interest & tax (18,61,23,731) 9,62,59,380 8,98,64,351 48.28 Interest (finance cost) Profit Before Tax Tax Provision for tax adjustments Profit after tax Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2011 & 2012 The South Asian Academic Research Journals http://www.saarj.com

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From the above table, it shows that the comparative Income Statement of K2K Infra Structure PVT. LTD., for the years 2011 & 2012. By comparing the year 2012with 2011 of Income & Expenditure, the sales have increased 25.25 percent while the cost of goods sold has increased by 31.42 percent and the operating expenses have increased to 28.47 percent. During the year 2012, it reflects a favorable impact on net profit because costs increased at a faster rate than sales. COMPARATIVE BALANCE SHEET [2011 & 2012] TABLE-14: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD.AS AT 31-03-12 ASSETS PARTICULARS Fixed Assets (Net Block) Investments Current Assets Inventories Trade Receivables Cash & cash equivalents Short term loan & advance Other current Assets 1,17,86,50,118 1,28,99,80,721 1,17,21,15,709 Total current assets Total Assets 6,49,63,08,360 6,67,54,21,215 17,91,12,855 27.58 994.46 4,63,04,04,554 5,12,25,44,887 49,21,40,333 5,56,96,78,732 5,86,34,80,854 29,38,02,122 26,07,70,015 8,19,02,616 (17,88,67,399) 43,20,85,803 48,00,80,455 4,79,94,652 89,35,62,071 1,35,17,98,396 45,82,36,325 10.63 5.27 -2.62 11.11 51.28 MARCH-31 2009 2010 1,50,23,89,536 1,70,56,64,858 INCREASE / DECREASE AMOUNT PERCENTAGE 20,32,75,322 13.53

19,14,24,300

19,14,29,300

5,000

0.02

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2011 & 2012 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2011 & 2012. By comparing the year 2012 with 2011 of Assets, the fixed assets have increases to 13.53 percent and the current assets have in increased by 994.46 percent. Finally, the total assets were increased at 10.95 percent .

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TABLE-15: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT LTD., AS AT 31-03-12 LIABILITIES PARTICULARS Capital and reserves Long term loans Current liabilities Short term borrowings Trade payables Other current liabilities Short term provisions Total current liability Total liabilities 2,57,60,01,216 3,03,62,04,285 3,05,72,97,776 3,79,34,14,229 4,14,04,37,393 4,89,59,94,846 27,82,95,882 3,59,34,314 1,00,52,03,227 1,17,61,54,767 6,49,63,08,360 6,67,54,21,215 46,02,03,069 73,61,16,453 75,55,57,453 (24,23,61,568) 1,07,56,34,445 17,91,12,855 17.86 24.08 18.25 -87.09 1070.07 27.58 MARCH-31 INCREASE / DECREASE 2011 2012 AMOUNT PERCENTAGE 5,42,76,78,006 5,43,16,21,283 (4,88,45,15,723) -89.99 6,34,27,127 6,76,45,165 42,18,038 6.50

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2011 & 2012 INTERPRETATION From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd., for the years 2011 & 2012. By comparing the year 2012 with 2011 of Liabilities, the capital & reserves have decreased to -89.99 percent and the current liabilities have increase by 1070.07 percent. Finally, the total assets were also increased at 27.58 percent. TREND ANALYSIS TREND ANALYSIS [2007 2012] TABLE- 16: STATEMENT SHOWING TREND PERCENTAGES OF K2K INFRASTRUCTURE PVT LTD., FROM 2007-2012 YEA RS SALES AMOUNT 2008 2009 2010 2011 2012 8,34,79,62,5 46 9,70,57,70,4 02 13,47,74,58, PERCENTA GE 100 116.26 138.86 113.72 125.35 STOCKS AMOUNT 3,13,91,46, 500 3,53,38,91, 279 4,09,47,56, PERCENTA GE 100 112.57 115.87 113.08 110.63 PROFIT BEFORE TAX AMOUN T 11,58,73, 834 4,40,39,3 41 4,03,32,4 PERCENTA GE 100 38.01 91.58 168.57 121.61

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892 008 19 15,32,66,57, 4,63,04,04, 6,79,91,3 832 554 85 19,21,20,03, 5,12,25,44, 8,26,82,4 939 887 52 Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2012 INTERPRETATION From the above Table-4.16, it shows that the Trend Percentages of K2K., from the years 20072012. By analyzing the years from 2007 to 2012 of Trend Percentages, the sales have increased to 125.35 percent over the five year period while the stock fluctuates up to 2010 & has increased by 110.63 percent in 2012 and the Profit before Tax is fluctuating & have increased to 121.61 percent in 2012. The trend look different if evaluated after five years. The trend percentages for profit appear to be higher because the base year amount is much smaller than the other balances and also fluctuates. CHART-17: TREND PERCENTAGES OF K2K INFRASTRUCTURE PVT LTD., FROM THE YEARS 2007-2012

180 160 140 120 100 80 60 40 20 0

Trend Percentage

Percentages

SALES STOCK PROFIT BEFORE TAX

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Years

5. FINDINGS The sales factor is gradually increasing from the year 20008 to 2012. The stock is also maintained in a satisfactory level. But it holds more in 2012. There is a fluctuation in the profit and also huge loss occurred in 2011. The assets must be utilized efficiently. There is a decreasing trend in the liabilities. The South Asian Academic Research Journals http://www.saarj.com 150

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The share holders fund is increasing gradually. So that it initiates the share holders to invest more in the company. The company also maintains the reserves in the satisfactory level to meet the contingencies.

6. CONCLUSION: The above analysis and the interpretation done with the help of the tools like Comparative Income Statement & Balance Sheet & Trend Analysis. The sales, stock, profit before tax, current assets, current liabilities and all the financial factors are strong enough to increase the profit in future also. This study shows that the overall financial performance of K2K Infrastructure Pvt Ltd., is to the mark during the year 2012 in comparison to the rest of the past four years. Their financial growth is optimum even a loss occurred during the year 2008 and they had a tax benefit in the year 2009. At last, I conclude that by doing this project work, I got a view about the K2K Infrastructure Pvt Ltd., a major producer of construction materials in the country. The industry acts as a manufacturer, distributor and has acquired a worldwide reputation for its innovative skills, the reliability of its products and the quality of its services. From the financial statement analysis the companys overall position is good and also the performance of the company is satisfactory. 7. REFERENCE BOOKS 1. 2. 3. 4. Annual report of K2K infrastructure Pvt Ltd., from 2007 2012. Pandey I.M. 1997, Financial Management, Vikas Publ ishing House Private Limited, New Delhi. Sharma R.K. Shashi and K.Gupta 1996, Management Accounting and Financial Management. Prasanna Chandra, Financial Management Theory & Practice, Tata McGraw -Hill publishing Company Limited, New Delhi.

WEBSITES www.k2kinfra.net www.investpedia.com www.wikipedia.com www.moneycontrol.com The South Asian Academic Research Journals http://www.saarj.com 151