A

PROJECT REPORT
ON
Analysis of UPL in Ankleshwer
At
UPL in Ankleshwer
Submitted by:
SR.
1
2
3
4

Name
Dave Palak
Patel Kinjal
Prajapati Dipixa
Mehta Priya

Enrollment no.

MBA-II

A report submitted in partial fulfillment of the requirement of MBA

Program of
Narmada College of Management
Affiliated to
Gujarat Technological University
Faculty Guide

Organization Guide

Prof. Chetna Makwana

Sagar Pachchigar

CERTIFICATE

I hereby, certify that this project report entitled Analysis of Financial management of UPL
Ankleshwer submitted to Gujarat Technological University, Ahmadabad in partial
fulfillment of the requirement for the degree of Masters of Business Administration,
embodies the result of bonafide work carried out by Miss. Palak Dave, Patel Kinjal, Prajapati
Dipixa and Mehta Priya
I, further certify that work has been carried out under the guidance of Prof. Chetna Makwana.

Faculty Guide
Prof. Chetna Makwana

Director
Dr. Trupti Almola

DECLARATION
I, hereby declare that the Project report entitled Analysis of Financial management of
United Phosphorus Pvt. Ltd. Ankleshwer Is a result of our own work & our indebtedness
to other work / publications, if any, have been duly acknowledged.

Place: Bharuch
Date:

ACKNOWLEDGEMENT
It was a very nice experience as it provided the opportunity for us to learn many
things and to gain practical knowledge before entering in the real

world. Only

theoretical knowledge is not sufficient practical aspect are also important.

I would like to thank Mrs. Chetna Makwana (Faculty Guide), for providing all kind of
support and guidance as and when require. It would not be possible for us to prepare &
shape this report without her guidance.

I am very thankful to our Director Dr. Trupti Almola for providing me the opportunity to
learn practical things.

I would like

to thank Mr. Sagar Pachchigar (HR manager) of United Phosphorus Pvt.

Ltd. Ankleshwer Who had given us permission for project work in this organization.
I would also like

to thank all the respondents for their good response & co

operation as without their support it was impossible for me to carry out the survey and obtain
correct results.

It has been a pleasure to work with United Phosphorus Pvt. Ltd. Ankleshwer
Although there remain some names but none are remain un-thanked.

TABLE OF CONTENTS
No.
1
2

Particular

Page No.

Introduction
Company profile
3.1 Organization structure
3.2

Research Project :
4.1 Literature Review

4
5
6
7
8
9
10

4.2 Research Method

Data Interpretation & Analysis
Findings
Suggestions
Conclusion
Limitation of study
Bibliography
Annexure

INTRODUCTION

COMPANY OVERVIEW
The Companys market capitalisation as on 31st March, 2015 stood at
RS. 18,953 Crore. The Company is listed on the National Stock
Exchange and Bombay Stock Exchange in India.

Upl is almost 40 years ago, when United Phosphorus had started as a

small scale unit to manufacture Red Phosphorus. Through backward
and forward integrations respectively, today they are a leading global
producer of crop protection products, intermediates, speciality
chemicals and other industrial chemicals. Being the largest
manufacture of agrochemicals in India, they offer a wide range of
products that includes Insecticides, Fungicides, Herbicides, Fumigants,
PGR and Rodenticides.
At UPL, they have a team of experts in different parts of the world
which conducts a proper study of the market and the other
competitors, charts out growth plans through mergers, acquisitions
and strategic alliances.
Upl operate in every continent and have a customer base in 123
countries with their own subsidiary offices in Argentina, Australia,
Bangladesh, Brazil, China, Canada, Denmark, France, Germany, Hong
Kong, Indonesia, Japan, Korea, Mauritius, Mexico, New Zealand, Russia,
Italy, Turkey, Spain, South Africa, Taiwan, USA, UK, Vietnam, Zambia,
Shanghai, Columbia and Netherland. Upl rank amongst the top 5 post
patent agrochemical industries in the world.
With 24 manufacturing sites (10 in India, 4 in France, 2 in Spain, 3 in
Argentina, 1 each in UK, Vietnam, Netherlands, Italy, China) and each
of them boast of strong support from the on-site technical services
and the quality control teams. Each of our units operates under the
strictest international quality standards and has been certified under
ISO 9001 for Quality Assurance, 14001 for Environment Pollution
Control Norms and OHSAS 18001 for Health and the Society.
Working in synergy with the customers in the marketplace, Upl
recognize the requirement for the highest level of support in product
research, development and registration. Capability in applied R & D is
one of their major core competences.

VISION
To be world class organization by:

 Enhancing values to our customers and other stakeholders.

Caring for employee to work as a motivated team in an open and
learning environment.
Setting challenging new standards of performance.
Focusing on total quality, innovation and responsible care towards
the environment.

MISSION
We are in the business of:
Manufacturing and Supplying Crop Protection and Specialty
Chemicals Worldwide.

Providing solutions to optimize farm productivity for the farmer

through innovative and cost effective products to provide the
customer better value for money.

HISTORY AND GROWTH OF COMPANY

Ratio Analysis

It concentrates on the interrelationship among the figures appearing in the Income Statement,
Balance Sheet, Statement of retained earnings, and Statement of Changes in the financial
position. It helps the management to analyze the past performance of the firm and to make
further projections.
Ratio analysis is a technique of analysis, comparison and interpretation of financial
statements.
It is helpful to know about the liquidity, solvency, capital structure and profitability of
an organization.

ADVANTAGES & LIMITATIONS:

ADVANTAGES:
Ratio analysis is an important and age-old technique of financial analysis. The following are
some of the advantages of ratio analysis:
1. Simplifies financial statements: It simplifies the comprehension of financial statements.
Ratios tell the whole story of changes in the financial condition of the business.

2. Facilitates inter-firm comparison: It provides data for inter-firm comparison. Ratios

highlight the factors associated with successful and unsuccessful firm. They also reveal
strong firms and weak firms, overvalued and undervalued firms.

3. Helps in planning: It helps in planning and forecasting. Ratios can assist management, in
its basic functions of forecasting. Planning, co-ordination, control and communications.

4. Makes inter-firm comparison possible: Ratios analysis also makes possible comparison
of the performance of different divisions of the firm. The ratios are helpful in deciding about
their efficiency or otherwise in the past and likely performance in the future.

5. Help in investment decisions: It helps in investment decisions in the case of investors and
lending decisions in the case of bankers etc.

LIMITATIONS:

The ratios analysis is one of the most powerful tools of financial management. Though ratios
are simple to calculate and easy to understand, they suffer from serious limitations.
1. Limitations of financial statements: Ratios are based only on the information which has
been recorded in the financial statements. Financial statements themselves are subject to
several limitations. Thus ratios derived, there from, are also subject to those limitations. For
example, non-financial changes though important for the business are not relevant by the
financial statements. Financial statements are affected to a very great extent by accounting
conventions and concepts. Personal judgment plays a great part in determining the figures for
financial statements.

2. Comparative study required: Ratios are useful in judging the efficiency of the business
only when they are compared with past results of the business. However, such a comparison
only provide glimpse of the past performance and forecasts for future may not prove correct
since several other factors like market conditions, management policies, etc. may affect the
future operations.

3. Problems of price level changes: A change in price level can affect the validity of ratios
calculated for different time periods. In such a case the ratio analysis may not clearly indicate
the trend in solvency and profitability of the company. The financial statements, therefore, be
adjusted keeping in view the price level changes if a meaningful comparison is to be made
through accounting ratios.

4. Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There are
no well accepted standards or rule of thumb for all ratios which can be accepted as norm. It
renders interpretation of the ratios difficult.

5. Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To
make a better interpretation, a number of ratios have to be calculated which is likely to
confuse the analyst than help him in making any good decision.

6. Personal bias: Ratios are only means of financial analysis and not an end in itself. Ratios
have to interpret and different people may interpret the same ratio in different way.
7. Incomparable: Not only industries differ in their nature, but also the firms of the similar
business widely differ in their size and accounting procedures etc. It makes comparison of
ratios difficult and misleading.

Objectives of Ratio Analysis

Standardize financial information for comparison.

Evaluate current operations.

Compare performance with past performance.

Compare performance against other firms or industry standards.

Study the efficiency of operations.

Study the risk of operations.

Uses of Ratio Analysis.

Evaluate bank loan application.

Evaluate customers credit worthiness.

Assess potential merger candidates.

Analyze internal management control.

Analyze and compare investment opportunities.

Ratio Analysis:
Ratio analysis is a techniques of analysis comparison and interpretation of
financial statement.
According to accounts hard book by wixon, kell, and Bedford the quantitative
relationship between two numbers.
Its is helpful to know about the liquidity, solvency capital structure and
profitability of an organization.

Types of
ratios

Liquidity
ratio

Leverage
ratio

Activity
ratio

DATA ANALYSIS

LIQUDITY RATIO:a) Current ratio:- Current assets/Current Liabilities

b) Quick Ratio :- Liquid asset/ Current Liabilities

LEVERAGE RATIO:a) Dept equity ratio:- Long term loans/Share holders funds
b) Proprietary ratio:- Shareholders funds/Total assets

Profitability
ratio

ACTIVITY RATIO:a) Stock turnover ratio:- Cost of Goods Sold/Average Inventory

b) Dept turnover ratio:- Net Sales/Average Debtors
PROFITABILITY RATIO:a) Gross profit ratio:-Gross profit/net sales
b) Net profit ratio:- Net Profit after Tax/Net Sales

Liquidity ratio:Liquidity refers to the ability of a concern to meet its current obligations as & when there
becomes due. The short term obligations of as firm can be met only when there are sufficient
liquid assets. The short term obligations are met by realizing amount from current, floating
circulating assets. The current assets should either be calculated liquid near liquidity. They
should be convertible into cash for paying obligations of short term nature. The sufficiency
insufficiency of current asset should be assessed by comparing them with short term current
liabilities. If current assets can pay off current liabilities, then liquidity position will be
satisfactory.
To measure the liquidity of a firm the following ratios can be calculated.

Current ratio

Quick (or) Acid-test (or) Liquid ratio

(a) CURRENT RATIO:

Current ratio may be defined as the relationship
Between current assets and current liabilities. This ratio also known as working capital is a
measure of general liquidity and is most widely used to make the analysis of a short term
financial position.

Current ratio: - Current assets/Current Liabilities

year
2012-13
2013-14
2014-15

Current assets
3642.87
3390.83
3592.42

Current liabilities
1957.50
2290.84
2894.22

Ratio
1.86
1.48
1.24

Current Ratio
2
1.8
1.6
1.4
1.2

Current Ratio

1
0.8
0.6
0.4
0.2
0
2012-13

2013-14

2014-15

(b) QUICK RATIO

Quick ratio is a test of liquidity than the current ratio. The term liquidity refers to the
ability of a firm to pay its short term obligations as & when they become due. Quick
ratio may be defined as the relationship between quick or liquid assets and current
liabilities. An asset is said to be liquid if it is converted into cash with in a short period
loss of value.
Quick Ratio:- Liquid asset/ Current Liabilities
Year
2012-13
2013-14
2014-15

Quick assets
3022.33
2518.63
2355.45

Current liabilities
1957.50
2290.84
2894.22

ratio
1.54
1.10
0.81

Quick Ratio
1.8
1.6
1.4
1.2
Quick Ratio

1
0.8
0.6
0.4
0.2
0
2012-13

2013-14

2014-15

2. LEVERAGE RATIOS
The leverage or solvency ratio refers to the ability of a concert meet its long term
obligations. Accordingly, long term solvency ratio indicate firms ability to meet the
fixed interest and costs and repayment schedules associated with its long term
borrowings.
The following ratio serves the purpose of determining the solvency of the concern.
(a) PROPRIETORY RATIO
A variant to the debt-equity ratio is the proprietary ratio which is also known as
equity ratio. This ratio establishes relationship between share holders funds to
total assets of the firm.
Proprietary ratio:- Share holders funds/Total assets
year
2012-13
2013-14
2014-15

Share holders fund

3357.69
3307.64
3524.08

Total assets
7015.90
7082.52
7639.31

Ratio
0.47
0.46
0.46

3.

Proprietary ratio
0.47
0.47
0.47
0.47
Proprietary ratio

0.46
0.46
0.46
0.46
0.46
0.45
2012-13

2013-14

2014-15

4.
5. ACTIVITY RATIOS

Funds are invested in various assets in business to make sales and earn profits. The efficiency
with which assets are managed directly effect the volume of sales. Activity ratios measure the
efficiency (or) effectiveness with which a firm manages its resources (or) assets.
These ratios are also called turn over ratios because they indicate the speed with which
assets are converted or turned over into sales.

Working capital turnover ratio

Fixed assets turnover ratio

Capital turnover ratio

Current assets to fixed assets ratio

(a) WORKING CAPITAL TURNOVER RATIO

Working capital of a concern is directly related to sales

.
Working capital:- Current assets-Current liabilities
It indicates the velocity of the utilization of net working capital. This indicates the no. of
times the working capital is turned over in the course of a year. A higher ratio indicates
efficient utilization of working capital and a lower ratio indicates inefficient utilization.

Working capital turnover ratio:- cost of goods sold/working capital

(b) FIXED ASSETS TURNOVER RATIO

It is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit
earning capacity of the firm. Higher the ratio, greater is the intensive utilization of fixed
assets. Lower ratio means under utilization of fixed assets.

1. Fixed assets turnover ratio:- cost of sale/net fixed assets

2. Cost of sales:- income from service
3. Net fixed assets:- fixed assets-depreciation

(c) CAPITAL TURNOVER RATIOS

Sometimes the efficiency and effectiveness of the operations are judged by comparing
the cost of sales or sales with amount of capital invested in the business and not with
assets held in the business, though in both cases the same result is expected. Capital
invested in the business may be classified as long term and short term capital or as
fixed capital and working capital or owned capital and loan capital.
All capital turnover are calculated to study the uses of various types of capital.
1. Cost of goods sold capital turnover ratio:- Capital Employed
2. Cost of goods sold:- Income from Services
3. Capital Employed:- Capital + Reserves & Surplus

(d) CURRENT ASSETS TO FIXED ASSETS RATIO

This ratio differs from industry to industry. The increase in the ratio means that
trading is slack or mechanization has been used. A decline in the ratio means that
debtors and stocks are increased too much or fixed assets are more intensively used. If
current assets increase with the corresponding increase in profit. It will show that the
business is expanding.

Current assets to fixed assets ratio: - current assets/fixed assets

4. PROFITABILITY RATIOS

The primary objectives of business undertaking are to earn profits. Because profit
is the engine that drives the business enterprise.
1. Net profit ratio
2. Return on total assets

3. Reserves and surplus to capital ratio

4. Earnings per share
5. Operating profit ratio
6. Price- earnings ratio
7. Return on investment

(a) Net profit Ratio

Net profit ratio establishes a relationship between net profit (after tax) and sales
and indicates the efficiency of the management in manufacturing, selling
administrative and other activities of the firm.
Net Profit after tax: - Net profit ratio/net sales
Net profit after tax: - Net profit(-) Depreciation (-) Interest (-) Income tax
Net sales: - Income from Services
It also indicates the firms capacity to face adverse economic conditions such as
price competitors, low demand etc. obviously higher the ratio, the better is the
profitability.
(b) RETURN ON TOTAL ASSETS
Profitability can be measured in terms of relationship between net profit and
assets. This ratio is also known as profit to assets ratio. It measure the profitability
of investments. The overall profitability can be known.
1. Return on assets :- Net profit/Total assets
2. Net profit :- Earning before Interest and Tax
3. Total Assets :- Fixed assets + current assets

(c) RESERVES AND SURPLUS TO CAPITAL RATIO

It reveals the policy pursued by the company with regard to growth. A very high
ratio indicates a conservative dividend policy and increased plugging back to
profit. Higher the ratio better will be the position.
Reserves & surplus to capital: - Reserves & surplus/capital
(d) EARNINGS PER SHARE
Earnings per share is a small verification of return of equity and is calculated by
dividing the net profits earned by the company and those profits after taxes and
preference dividend by total no. of equity shares.
Earnings per share: - Net profit after tax/Number of equity shares
The earnings per share is a good measure of profitability when compared with
EPS of similar other components (or) companies, it gives a view of the
comparative earnings of a firm.
(e) OPERATING PROFIT RATIO
Operating ratio establishes the relationship between cost of goods sold and other
operating expenses on the one hand and the sales on the other.
Operation ratio: - Operating Cost/Net sales
However 75 to 85 % may be considered to be a good ratio in case of a
manufacturing under taking.
Operating profit ratio is calculated by dividing operating profit by sales.
Operating profit: - Net sales Operating cost
Operating profit ratio: - Operating profit/Sales
(f) PRICE EARNINGS RATIO
Price earnings ratio is the ratio between market price per equity share and earnings
per share. The ratio is calculated to make an estimate of appreciation in the value
of a share of a company and is widely used by investors to decide whether (or) not
to buy shares in particular company.

Generally, higher the price earnings ratio, the better it is. If the price earnings ratio
falls, the management should look into the causes that have resulted into the fall
of the ratio.
1. Price earnings ratio:- Market price per share/earnings per share
2. Market price per share:- Capital + Reserves & surplus/no of equity share
3. Earnings per share:- Earnings before interest & tax/ no of equity share

(g) RETURN ON INVETSMENT

Return on shareholders, investment, popularly known as return on investment (or)
return on share holders or proprietors fund is the relationship between net profit
(after interest and tax) and the proprietors fund.
Return on shareholders investment: - Net profit (after interest and
tax)/shareholder funds.
The ratio is generally calculated as percentages by multiplying the above with
100.

GRAPHICAL REPORT
Current Ratio
year
2012-13
2013-14
2014-15

Current assets
3642.87
3390.83
3592.42

Current liabilities
1957.50
2290.84
2894.22

Ratio
1.86
1.48
1.24

Current Ratio
2
1.8
1.6
1.4
1.2

Current Ratio

1
0.8
0.6
0.4
0.2
0
2012-13

Interpretation:

2013-14

2014-15

Quick Ratio
Year
2012-13
2013-14
2014-15

Quick assets
3022.33
2518.63
2355.45

Current liabilities
1957.50
2290.84
2894.22

ratio
1.54
1.10
0.81

Quick Ratio
1.8
1.6
1.4
1.2
Quick Ratio

1
0.8
0.6
0.4
0.2
0
2012-13

2013-14

2014-15

Interpretation:

Proprietary Ratio:
year
2012-13
2013-14
2014-15

Share holders fund

3357.69
3307.64
3524.08

Total assets
7015.90
7082.52
7639.31

Ratio
0.47
0.46
0.46

Proprietary ratio
0.47
0.47
0.47
0.47
Proprietary ratio

0.46
0.46
0.46
0.46
0.46
0.45
2012-13

2013-14

2014-15

Interpretation:

Net profit ratio:

year
2012-13
2013-14
2014-15

Net profit after

tax
208.13
415.73
463.33

sales

Ratio

3939.44
4968.27
5334.99

8.68
8.36
5.28

Net profit ratio

10
9
8
7
6

Net profit ratio

5
4
3
2
1
0
2012-13

2013-14

2014-15

Interpretation:

RETURN ON EQUITY
Year

Net profit after Shareholders

tax
fund

2012-13
2013-14
2014-15

208.13
415.73
463.33

3357.69
3307.64
3524.08

ratio
6.20
12.56
13.14

Return on equity
14
12
10
Return on equity

8
6
4
2
0
2012-13

Interpretation:

2013-14

2014-15