MEANING AND DEFINITION OF FINANCE :-

Finance is the life blood of business.Without finance,the heart

and brain of business cannot function implying thereby its natural
death.right from conceiving the idea of birth of a business to its liq-
uidation finance is required.It is a prerequisite for obtaining physical
resources, which are needed to perform productive activities and car-
rying business operations such as sales,pay compensations,reserve
for contingencies(unascertained liabilities)and so on.So,finance is the
pivot around which the whole business operations cluster.
According to F.W.paish:-Finance may be defined as the position
of money at the time it is wanted.
MEANING AND DEFINITION OF FINANCIAL MANAGE-
MENT:-
Financial means procuring sources of money supply and allocation
of these sources on the basis of forecasting monetary requirements of
the business.the word managementrefers to planning,organization,
co-ordination and control of human activities and physical resources
for achieving the objectives of an enterprise.
Financial management refers to the management of fi-
nance.It is the effective & effective utilization of financial resources.
According to Weston & Brigham:-financial management is anarea
of financial decision making harmonizing individual motives& en-
terprise goals.

1
 IMPORTANCE OF FINANCIAL MANAGement:-
Some of the importance of the financial management is as follws:
1) FINANCIAL PLANNING AND CONTROL:-Finance is a base
for all the business activities.Business activities shouls be not only
harmonized but also planning determination implementation offer
analysis of finance.All activities revolve around the finance. So fi-
nance planning and control are important function.
2) ESSENCE OF MANAGERIAL DECISION:-Financial manage-
ment provides a sound base to all managerial decisions.Financial
management is the focal point in the process of decision making
.Production,sales, employees,research & development decisions are
based on financial management.
3) IMPROVE PROFITABILITY:-Profitability of the concern purely
depends on the effectiveness and proper utilization of funds by the
business concern .Financial management helps to improve the profit-
ability position of the concern with help of strong financial control
devices such as budgetary control,ratio analysis and cost volume
profit analysis.
4) BASIS OF AMANAGERIAL PROCESS:-financial management
is the basis of whole management process,such as planning,co ordi-
nation and control.According to sound financial planning all other
plans are executed & controlled.
5) MEASURE OF PERFORMANCE:-financial management deals
with risk & uncertainty factors which are directly hit by profitability
& risk.Thus,financial management is needed for maintaining proper
balance in risk & uncertainty.

2
 INTRODUCTION OF RATIO ANALYSIS
In the last to last chapter we studied five of the tool available in the
tool available in the tool kit of a financial analyst namely multi step income
statement,horizontal analysis ,common sized analysis,trend analysis and
analytical balance sheet and applied them to analyse the financial statement
of capol ltd and libertyeltd. We can upon some interesting findings based
on that analysis .what you must have observed is that in all the cases we
analysed the two financial statements ,that is,balance sheet and profit and
loss statement,almost in isotation .In reality however,the two statements are
totally interrelated and dependent on each other . this is ,despite their mer-
its, one of their limitations and thence the need for amore comprehensive
tool of analysis,that is Ratio Analysis.One of the ratio that is Eps has been
analysed in the last chapter.
Definition of Ratio analysis:-
Ratio Analysis is a comprehensive tool of analysis in that it seets to meas-
ure and establish cause and effects the relationships between either two
items of balance sheet , say current ratio ,that is ratio of current assests to
current liabilities, or of profit and loss account, say net profit margin that is
ratio of pat to net sales or both the balance sheet and the profit and loss ac-
count say return on net worth that is ratio efficiency protitability and capi-
tal market valuation of a company.

3
Ratio analysis is thus a relative and more focusedanalysis of financial
statements. That does not mean that it can be used independently of other
tools and techniques .It leads to an expansion and futher analysis of the
findings recorded through other tools.
Ratio analysis is of particular significance in the following cases
Inter firm comparison,because absolute figure comparison will lead
to now where
Intra firm compari8son for the same reson
Comparison against industry benchmarks
Analysis of chronological performance over a long period

As you will observe later in this chapter ,while

analysing the ratios of industries Ltd., ratio analysis ,particularly the com-
putation part may accquire numerous reasonable and logical assumption
depending upon the information available.hence the need for a full annual
report .At the same time, however, to initiate you in the subject it is neces-
sary to take up abridged finacial statements.

4
 INTRODUCTION

The success any organization mainly depends upon four functional areas of
management namely finance, production, marketing and personal manage-
ment. Finance is defined as the provision of money at the time it is re-
quired. Every enterprise either big, medium or small, needs finance to carry
on its operations and to achieve its targets. Ratio Analysis is part of the fi-
nance statement analysis, which helps in know in the companies position to
the outsiders.

A ratio is relationship between to variable unless to variables are

compared it cannot be calculated which one is superior to other. This is the
region why the ratio analysis is done.

This technique is very much usefully in the assessment of working

capital requirement and also to know the performance of company. By us-
ing the these ratios we can review the at how much working capital are in-
vested in current assets.

The companys Financial Information is contained in the basic finan-

cial statements i.e. balance sheet, trading and profit & loss account.

5
These statements are very useful for evaluating the financial position and
performance of the of a firm. In practical use these statements does not give
much more detailed information what creditors, investors, other people
who these with the company. So ratio analysis is a technique that helps
these people to deal with the company.

However, it is to be noticed that there is a basic limitation of the tra-

ditional financial statement comprising the balance sheet and the profit &
loss account i.e., they do not give all the information regarding financial
operation of the firm. Accordingly RATIOS not only indicate the present
position, they also indicate the causes leading up the large extent for in-
stance accounts ratio. May indicate not only the financial position and pre-
cautions but also the past policies and actions they have caused.

Using various ratios we can find out the liquidity and solvency posi-
tion of the company.

Ratio Analysisis a powerful tool of financial analysis,it is a widely

used tool of financial analysis and interpretation of ratios should give
experienced , skilles analysts a better understanding of the financial
condition and performance of the firm than they would obtain from
the analysis of financial data alone .Aratio
analysis is analyzing the information by comparing two different vari-
ables.

6
Ratio Analysis the principle tool of finance statememt analysis. it is the
process of analyzing the relation between two financial variables. It is
also defined as the systematic use of ratio is to interpret the finan-
cial statement so that the strengths and weakness of afirm as well as
its historical performance and current financial condition can be de-
termined. The relationship can be expressing items that are related
with each other are for the purpose of financial analysis , referred
to as ratio Analysis.

But comparing ratios merely does not add any information of profits
and sales. They reveal the relationship in more meaningful way which
enables to draw better conclusions.

7
 NEED OF THE STUDY

The study has great significance and provides benefit to various par-

ties who are directly or indirectly connected with the company.

The study is also beneficial to employees and offers motivation by

showing how actively they are contributing for company growth.

By using the technique of ratio analysis the labor leaders reveal how

the company stands in relation to labor & welfare.

A banker can judge the liquidity position. A creditor can establish the

credit rating & an investor can plan buying and selling of shares on

the basis of safety of principal earnings.

8
 SCOPE OF THE STUDY

The study is based on analysis of the historical data & information

contained in company published income statements & balance sheets for a
period of 5 years from 2011-12 to 2015-16. Ratio Analysis is done with se-
lected ratios.

The study consists of only the past performance of Coromondel Agro

Products and Oils Limited (CAPOL)

The study does not consist of the future trend analysis.

Only the ratios concerned with profitability, liquidity and leverage

and activity ratios only.

The study is based on secondary data only.

9
 OBJECTIVES OF THE STUDY

The major objective of the study is to know about financial strengths

& weakness of Coromondel Agro Products and Oils Limited (CAPOL)
through financial ratio analysis.

The main objectives of study are:

To understand the liquidity, profitability and efficiency position of the

company.
To evaluate and analyze various facts of the financial performance of
the company.
To make appropriate suggestions and measures for the effective work-
ing of the company.
To make comparison between the ratios during different periods.
To understand the impact of broader changes in higher education on the
working lives of administrative and support staff and in particular on
their roles and responsibilities.
To examine the opportunities available to them for training, staff devel-
opment and career progression.
To assess levels and sources of job satisfaction and job dissatisfaction
To explore their ideas on the development of higher education over the
next twenty years.

10
 LIMITATIONS OF THE STUDY

The ratio analysis is one of the most powerful tools of financial

management throught ratios are to calculate and easy to understand they
suffer from some serious limitations.

1.Limited use of single ratios:A single ratio usually does not convey much
of asense.To make a better interpretation a number of ratios have to be cal-
culated which is likely to confuse the analyst then help him in making any
meaningful Conclusion.

2.Lack of Adequate standards:There are no well accepted standards or

rules to thumb for all ratios which can be accepted as norms .it renders
interpretation of the ratios difficult.

3.Inherent Limitations of Accounting:Like financial statement, ratios

also suffer from the inherent weakness of accounting records such as
their historical nature ratios of the past are not necessarily true indi-
cators of the future

4.Personal Bias:ratios are only means of financial analysis and

not an endin itself ratios have to be interpreted and different
people may interpret the same ratio in different ways.

11
 METHODOLOGY OF THE STUDY

The information is collected from secondary sources during the project.

That information was utilized for calculating performance and based on
that, interpretations were made.

1. Primary Data:
It is collected from the direct interaction with the financial per-
sons and other officials of the company.
Primary research: involves the collection of original primary
data by researchers. It is often undertaken after researchers
have gained some insight into an issue by review-
ing secondaryresearch or by analyzing previously collecte
primary data It can be accomplished through various methods,
including questionnaires and telephone interviews in market
research, or experiments and direct observations in
the physical sciences, amongst others. The distinction between
primary research and secondary research is crucial among
market-research professionals
TOOLS OF PRIMARY DATA:
Observation: is the most commonly used method of data col-
lection in the humanities and social sciences. To some extent
this method is also used in natural sciences. In natural sciences
observation is conducted in natural settings while in the social
sciences an artificial situation can also be created where the
observer can observe the participants.

12
 Interviews: are another important method of primary data col-
lection. Interviews are expensive as compared to other meth-
ods of data collection. In the interview the interviewer collects
information from each respondent independently. Due to this
reason it becomes costly as well as time consuming.
Questionnaire: is one of the most commonly used methods of
data collection in research. Questionnaires are formulated to
get to the point information on any subject area. The question-
naire is an inexpensive method of data collection as compared
to other methods of primary research.
2. Secondary Data:
Most of the calculations are made on the financial statements
of the company.Some of the information regarding theoretical
aspects is collection through referring standards text books.

13
TOOLS OF SECONDARY DATA:

MAGAZINE:
A magazine isapublication,usuallya periodicalpublication,whichis printedo
r electronically published sometimes referred to as an online magazine.
Magazines are generally published on a regular schedule and contain a va-
riety of content. They are generallyfinanced by advertising, by a purchase
price, by prepaid subscriptions, or a combination of the three.
JOURNALS:

A journal (through French from Latin diurnalis, daily) has several related
meanings:

a record of events or business a private journal is usually referred to as

a diary
a newspaper or other periodical, in the literal sense of one published
each day
REPORTS:
A report or account is any informational work (usually of writing, speech,
television, or film) made with the specific intention of relaying information
or recounting certain events in a widely presentable form.
NEWSPAPER:
A newspaper is a serial publication containing news about current events,
other informative articles (listed below) about politics, sports, arts, and so
on, and advertising. A newspaper is usually, but not exclusively, printed on
relativelyinexpensive,

14
 INDUSTRY PROFILE

About Cooking Oil:

Cooking oil is purified fat of plant, which is liquid at room tempera-
ture. The different kinds of edible vegetable oils include: Olive oil, Palm
oil, Soya beam oil, Canola oil, Pumpkin seed oil, Corn oil, Sunflower oil,
Safflower oil, Penult oil, Grape seed oil, Sesame oil and rice bran oil. Many
other kinds of vegetable oils are also used for cooking. The generic term
vegetable oil when used to label a cooking oil product refers to a blend of
a variety of oils often based on palm, corn, soyabean or sunflowr oils.

Processing of Cooking Oil in India:

The vegetable oil processing industry the extraction and processing
of oils and fats from vegetable sources. Vegetable oils and fats are princi-
pally used for human consumption but are also used in animal feed, for
medicinal purposes and for certain technical applications. The oils and fats
are extracted from a variety of fruits, seeds, and nuts. The following are the
steps involved in the processing of oils.

Step1:
Preparation of seeds begins with heating and dehulling, followed by chop-
ping or grinding, to break the cell walls, freeing the oil to make the penetra-
tion of solvents into the cells easier. This is accomplished by rolling or
flaking, In addition, all oil seeds have enzymes that can influence quality.
During processing, the object is to deactivate these enzymes early by means
of heat.

15
For example, with canola or rapeseed, the enzyme myrosinase can influ-
ence quality because it catalyses hydrolysis of glucosinolates to give glu-
cose, sulpate, isthiocyanates, oxazolinine thiones and other compounds.
Some of these compounds act as a catalyst poison during hydro generation
of oil for margarine production.

Step2:
Extraction from seeds is accomplished either by mechanically press-
ing or by mixing such gasoline-like solvents as hexane and heptanes (which
are lung irritants and nerve depressants). At this stage, if the chemical ex-
traction method is used, the oil is extremely flammable and some factories
have been known to blow up or catch on fire. Later, the oils are steam heat-
ed to evaporate the solvents at temperatures around 3000 F. Most of the sol-
vents are evaporated, but not all. The primary objective of this step is to
produce a clean, crude oil product. Be aware that, at this stage, the oil can
now be bottled and sold as unrefined oil in health food stores. Oil desig-
nated for more refining goes through more processing procedures. After be-
ing mashed and cooked for up to two hours at varying temperatures, de-
pending on t he seed type, mechanically pressed seeds are subject to addi-
tional heating during the auger process, where the average temperature
reaches about 1200C (2480) with higher temperature and pressures produc-
ing more oil. At this temperature, producing fatty acid damage. In some
cases, after mechanical pressing, the oil is filtered and sold as unrefined oil,
but more often, the oil undergoes further refining.

16
Step 3:
Degumming is a treatment of crude oils and water, salt solutions, di-
lute acids, or alkalis used in order to remove phosphates, waxes and other
impurities. Caustic soda, (often sodium hydroxide commonly known as
Drano or a mixture of sodium hydroxide and sodium carbonate) is one
such substance used to remove free fatty acids that can cause rancidity and
decreases the quality of the oil. Alkali solutions combine with the free fatty
acids to form soaps and also help to remove toxic substances that are natu-
rally present in many plants. Temperatures again have reached 750C (1670).
At this stage, the oil still has its pigmentation of red, yellow, or greenish
hue, which is also deemed undersirable Degumming coverts the phospha-
tides to hydrated gums which are insoluble in oil and readily separated as
sludge. The hydrated gums are vacuum dried for crude lecithin processing.
This process also involves the addition of phosphoric acid and water at
temperatures of 600C (1400F)

The Industrys rationale for the degumming process is as follows:

It is necessary to remove the lecithin, which can cause rancidity of the oil.
It satisfies export oil requirements for a product free of impurities that settle
out during shipment.
Gum removal prior to alkali refining often improves yield because the
phosphates can acts as emulsifiers in a caustic solution, increasing the neu-
tral oil contained in the soap stock.
It substantially decreases refinery waste load because of the lower neutral
oil lossess and the reduction of gums discharged.

17
It prepares the oil for steam refining. Degummed oil is more suitable to this
physical refining technique because of the significant reduction in such
nonvolatile impurities as phosphatides and metallic prooxidants.
It results in improved acidulation performance. The soap stock from alkali
refining is easier to adulate because of lower emulsifier content and the ac-
id water has less impact on the waste water treatments systems.

Step4:
Bleaching oils is necessary because they have a strong yellow or
reddish pigment that is considered undesirable. In the bleaching process,
oils heated to temperatures of 1750 - 2250 C, for about 4 hours, and mixed
with a type of clay substance that will absorb the unwanted pigment. Most
of the spent clay is then filtered from the oil. During this phase, some of the
plyunsaturated fatty acids may undergo oxidation and toxic peroxides,
forming conjugated fatty acids.

Step5:
Deodorization is done through pressurized steam distillation at tem-
peratures of 2400-2700 C (464-5180F) for 30 to 60 minutes, which removes
undersirable odors and tastes from the oil.
Note: When temperatures go above 1500C (3020F) unsaturated fatty acids
become mutagenic. Above 1600C (3200F), trans acids begin to form. Above
2000C (3920F) trans fatty acids multiply substantially and above 220 0C, the
trans fatty acid explodes. Deodorizing reduces the content of many other
substances, including residues, toxins, and products or oxidation formed
during the bleaching stage, as well as removing sulphur, monoglycerides,
sterols, beta carotene and tocopherols (Vitamin E).

18
The oil is now tasteless and cannot be distinguished from other oils derived
from seeds or plants. At this point, despite all of the heating involved the
oils can stillb e sold as cold-pressed since there is no accepted definition
of the term. Preservatives are added such as synthetic antioxidants, BHT
(Butylated Hydroxy Toluene), BHA (Butylated Hydroxy Anisole, Propyl
Gallate, TBHQ (Tertiary Buty1 Hydroquinone), citric acid, or methyl sili-
cone. A defoamer may also be added to prevent turbidity when refrigerated.

Step6:
Hydrogeneration After all this, oil not designated for sale, go on to
more processing in the form of hydrogenation to make margarine, shorten-
ing oils. The hydrogenation oil convents liquid oils into hard fats by adding
hydrogen to the fat molecule. Oils can be hydrogenated to varying degrees,
depending on the harness. The most common forms are shortening, marga-
rines, and the partially hydrogenated fats used for frying and in processed
foods. These fates are desirable for its melting point, allowing for high
temperature cooking and frying. Hydrogenation involves the artificial satu-
ration of fully refined oils to harden them into spreadable products. All oils
sold in supermarkets and convenience stores are processed in the above
manner.
All includes safflowr, walnut, sunflower, corn, grape seed, soyabean,
sesame, rice bran, canola, almond, peanut, avocado and others including
belnds. Olive oil is the only oil sold on supermarket shelves that is not
heated above 1500 C, However is a poor source of essential fatty acids, con-
taining on average 10% LA and 0.5% LNA.

19
After the above refining process oils are put under pressure, using hydrogen
gas at temperatures of 120-2100 C (248-4100F) in the presence of a metal
catalyst (nickel, platinum or copper) for six to eight hours. A nickel catalyst
is actually 50% nickel and 50% aluminum. Remmants of both metals re-
main in the final products of hydrogenated or partially hydrogenated goods.
During complete hydrogenation, all double bonds are saturated with hydro-
gen. This means there are no unsaturated fatty acids, no w6s and no w3s.
In some partially hydrogenated margarine, the trans fatty acid content can
be more than 60%. Paritally hydrogenated oils are found in French fries
(37.4%) candies (38.6%) and bakery products (33.5%) completely hydro-
genated oil is now a hard fat containing no essential fatty acid activity,
causing a nation-wide deficiency of the essential fatty acids.

20
21
Source for Edible in India:

There are two sources of oils:

Primary sources
Secondary sources

Theprimary sources include those oilseeds, which are cultivated. The main
edible oils from these sources are groundnut, rapeseed/mustard, soya bean,
sunflower, sesame, niger and safflower. The main secondary sources of oils
include coconut, cottonseed and rice bran.
Name of the Oilseeds 2014-15 2015-16
A. Primary Source
Groundnut 67.74 15.58 78.67 18.09
Rapeseed/Mustard 75.93 23.54 78.87 24.45
Soyabeen 68.77 11.00 83.50 13.36
Sunflower 11.87 3.92 14.88 04.91
Seasame 6.74 2.09 06.97 02.16
Nigerseed 1.12 0.34 01.07 00.32
Castor 7.93 3.17 09.67 03.87
Linseed 1.70 0.51 1.73 00.52
Subtotal 243.54 60.67 277.31 68.27
B. Secondary Source
Coconut 5.50 4.20
Cotton seed 4.30 5.70

22
 Importance of Edible Oils in the Countrys Economy:
Oilseeds and edible oils are two of the most sensitive essential com-
modities. India is one of the largest producers of oilseeds in the world and
this sector occupies an important position in the agricultural economy and
accounting for the estimated production of 24.35 million tons of nine culti-
vated oilseeds during the year 2014-15. India contributes about 7-8% of the
world oilseeds production. Export of oil meals, oilseeds and minor oils has
increased from 3.36 million tons in the financial year 2014-15 to
4.98million tons in the financial year 2015-16. In terms for value, realiza-
tion has gone up from Rs.4613crores to Rs.5299crores. India accounted for
about 6.4% of world oil meal export.

Oil Year Production of Net availability of Consumption of

(Nov.Oct.) Oilseeds edible oils from all Edible Oils
domestic sources (from domestic
and important
sources) in lakh
tones
2008-2009 247.48 69.60 95.82
2009-2010 207.15 60.15 102.11
2010-2011 184.40 54.99 96.76
2011-2012 206.63 61.46 104.68
2012-2013 148.39 46.64 90.29
2013-2014 251.86 71.40 124.30
2014-2015 243.54 72.47 117.89
2015-2016 277.31 82.37 125.25
2016-2017 307.73 71.46 107.78

23
Types of Oils commonly in use in India:
India is fortunate in having a wide range of oilseeds crops grown in
its different agro climatic zones. Groundnut, mustard/rapeseed. Sesame,
sunflower, linseed, Niger seed/castor are the major traditionally cultivated
oilseeds. Soya been and sunflower have also assumed importance in recent
years. Coconut is most important amongst the plantation crops. Efforts are
being made to grow oil plan in Andhra Pradesh, Karnataka, Tamilnadu in
addition to Kerala and Andaman & Nicobar Islands. Among the non-
conventional oils, rice bran oil and cotton seed oil are the most important.
In addition, oilseeds of trees and forest origin, which grow mostly in tribal
inhabited areas, are also a significant source of oils. Figures pertaining to
estimated production of major cultivated oilseeds, availability of edible oils
from all domestic sources and consumption of edible oils (from Domestic
and Import Sources) during the last few years are as under.
Consumption Pattern of Edible Oils in India:
India is a vast country and inhabitants of several of its regions have
developed specific preference for certain oils largely depending upon the
oils available in the region. For example, people in the South and West pre-
fer groundnut oil while those in the East and North use mustard/rapeseed
oil. Likewise several pockets in the South have a preference for coconut
and sesame oil. Inhabitants of northern plain are basically hard fat consum-
ers and therefore, prefer Vanaspati, a term used to denote a partially hydro-
genated edible oil mixture. Vanaspati has an important role in our edible oil
economy. Its production is about 1.2million tons annually. It has around
10% share of the edible oil market. It has the ability to absorb a heteroge-
neous variety of oils,

24
For example, newer oils like soyabean, sunflower, rice bran and cottonseed
and oils from oil seeds of tree and forest origin had found their way to the
edible pool largely through vanaspathi route. Of late, things have changed,
through technological means such as refining, bleaching and de-
odorisation, all de-odorisation, all oils have been rendered practically col-
ories and tasteless and, therefore, have become easily interchangeable in
the kitchen. Newer oils which were not known before they have entered the
kitchen, like those of cottonseed, sunflower, palm oil or its liquid fraction
(palmolein), soyabean and rice bran. These tend to have a strong and dis-
tinctive test preferred by most traditional customers. The share of raw oil,
refined and vanaspati in the total edible oil market is estimated at 35%,
55% and 10% respectively.
Major Features of Edible Oil Economy:
There are two major features, which have very significantly contrib-
uted to the development of this sector. One was the setting up of the Tech-
nology Mission on Oilseeds in 1986. This gave a thrust to Governments
efforts for augmenting the production of oilseeds. This is evident by the
very impressive increased in the production of oilseeds from about 11.3
million tons in 1986-87 to 24.8million tons in 1998-99. There was some
setback in 1999-2000 because of the un-seasonal rain followed by inclem-
ent weather. The production of oilseeds declined to 20.7million tones in
1999-2000. other dominant feature which has had significant impact on the
present status of edible oilseeds/oils industry has been the program of liber-
alization under which the Governments economic policy allows greater
freedom to the open market and encourages healthy competition and self
regulation rather than protection and control.

25
 Present Status of Indian Vegetable Oil Industry:
Status of the Vegetable Oil Industry
(As on August 2006)
Type of Vegetable No. of Units Annual Capacity (Lakh Average Capacity
Oil Industry MT) Utiliztion
Oilseed Crushing 1,50,000 (Ap- 425 (In terms of Seeds) 10-30%
Units prox)
Solvent Extraction 711 313 (In terms of Oil- 31%
Units bearing Material)
Refineries attached 127 51 (In terms of oil) 45%
with Vanaspati
Units
Refineries attached 297 36 (In terms of oil) 27%
with Solvent Units
Independent Re- 585 35 (In terms of oil) 36%
fineries
Total Refineries 1009 122 (in terms of oil) 35%
Vanaspati Units 264 53 (in terms of Vanaspa- 18%
ti, Bakery Shortening &
Margarine)

Oil seeds crushing units include crushing units in the small scale sec-
tor as also in the organized sector. The capacity utilization generally ranges
from an average of 10% for the ghanis (small scale sector) to around 30%
in case of the expellers in the organized sector.
Regulation/Control Order of Edible Oil Industries:
a) The Regulatory Functions are performed basically through the fol-
lowing three Orders.
Edible Oils Packaging (Regulation) Order 1998;
Vegetable Oil products (Regulation) Order, 1998; And
Solvent Extracted Oil, De-Oiled Meal and Edible Flour (Control) Order,
1967.
b) The above Orders are statutory in nature promulgated under the Es-
sential Commodities Act, 1995.

26
 Market
Industry structure
1. Highly fragmented industry.
2. Over 600 oil extraction units.166 vanaspathi manufacturing
units.
3. Only 10 edible oil units and 8 Vanaspathi units have national
reach.
4. Over 50% of the units silk or underutilized due to surplus ca-
pacity.
5. Idle capacities among these units due to shortage in feed stock
supply.
6. Major oil brands sundrop Dhara Saffola week postman.
7. Vanaspathi brands Dalda Rath.

Market size and Growth:-

Out of the total oil consumption pf 9 million ton per annum refined oil
account for only around 2 million ton 70% refined oil is sold in loose
unbranded from sunflower ground nuts are popular throughout the
country rape seed (also known as mustard) has high penetration in the
north and fast edible oil consumption has been raising their last 5-6
years resulting in higher imports of edible oil nut the widening deficit
domestic production of edible oil was 7 million ton in 2005-06 to 2,1
million ton in 2007-08 imports in 2008-09 are expected to be around
2.20-2.50m million.

27
Agro Products and Oil Ltd
Characteristics
1. Oils primarily a commodity market price sensitive.
2. Effective distribution chain through a complex network of
C$F aizents.
3. Whole sellers/ stockiest & retailers (kirana shops super
markets).
4. Oil sold in bulk (tin, IIDPE containers) to institutions: In
retails packs (PET bottles cans, jars, and pouches) to small
customers seasonal demand for oils and vanaspathi Sep-
tember to November (pack season).
5. Regulations: under the edible oils packaging (regulation)
order 1998 edible oils cannot be sold loose but can be sold
only in packed form oil consumption north is largest
market followed by south, west & east zones.

28
Future of the Agro products
1. Macro Economic Factors:population growth per capi-
tal income purchasing power oil seeds crop.
2. Influence of branded products health message.
3. Growing preference for convenience foods.
4. Raw materials sourcing: Fours on improving yields get-
ting better quality oil seeds ensuring regular supplies
through symbolic relationship with farmer.

Key Success Factors

1. Branding essential for success(vanaspathi Dalda oils
Sundrop)
2. Better distribution network to improve reach.
3. Efficiency in operation to become price competent and
with stand overseas competition.
4. Proposed future trading in edible oils will help curtail price
volatility and lend knowledge based assistance to farmers
of eliminate unofficial markets.
5. In the next five years the market for future edible oil will
grow by 8% to 12.65 million MT Vanaspathi will grow to
1.5 million MT.
6. Free imparts low imports duties and slump in global prices
lead to.

29
Imports and price

1. Oils and vanaspathi substitutes can be fleck imported under

OGL.
2. Import duties : 15% basic 10% surcharge oils basic (oil
seed)
3. Large scale imports of oils and vanaspathi substitutes pri-
marily to check price rise and meet supply shortages.
4. Imports during 1998-1999-2.38 million MT.
5. Estimable imports 1999-2000-3million MT.
6. Prices of edible oils: RBD palmoein Rs.23500/MT (whole
sale, Ex-Mumbai).
7. World market: $420/MT (Rs.18060/MT) c.i.f-july99.
8. Prices of vanaspathi: Rs.647151of (whole sale. Ex-
Calcutta)10|May99
9. Oil and vanaspathi used as cooking media (in households,
hotels, restaurants, canteens, institutions)

30
Agro Industry Corporation
These corporation have been setup in17 states in the sector under taking in
which both central and state Govt. of India has central directors on the
board of each corporation the total authorized share capital of all the corpo-
ration up to march 1970 was Rs.80 crores out of which Govt. of Indias
contribution was 31.5 croresCAPOL is an oil producing industry at chirala
has acquired much importance in this part of the parkasam district in AP
thesis because of the extensive of cotton by the growers.
Cotton seeds are removed from the cotton and would be sold to company of
manufacturing of various products.
By a product that is cotton seed oil cake cotton seed hulls soap stock etc
further the products of CAPOL like de oiled cake are also exported to Japan
Thailand Malaysia and West Germany etc. therefore the study on consumer
survey of the CAPOL has assumed a greater significance in recent times.
Cotton seed crushing industry is one of the Agro based industries cotton
seed is used in the manufacturing of edible oils deoils cake bulls and acid
oil. India is the 3rd largest edible oil based economy in the world after US
and Chinas. India accounts 9.7% to the global oil seed production the main
production of this industry is edible oil.

31
Edible Oils Packaging (Regulation) Order, 1998:
In order to ensure availability of safe and quality edible oils in
packed form at pre-determined prices to the consumers, the Central Govt.
promulgated on 17th September, 1998, an Edible Oils Packaging (Regula-
tion) Order, 1998 under the Essential Commodities Act, 1995 to make
packaging of edible oils, sold in retail, compulsory unless specifically ex-
empted by the concerned State Govt.

Silent features:
Edible oils including edible mustard oil millers will have to register
themselves with a registering authority.
The packer will have to have his own analytical facilities or adequate
arrangements for testing the samples of edible oils to the satisfaction of
the Government.
Only oils which conform to the standards of quality as specified in the
Prevention of Food Adulteration Act, 1954 and Rules made there under
will be allowed to be packed.
Each container or pack will have to show all relevant particulars so that
the consumer is not misled, so also the identity of the packer becomes
clear.
Edible oils shall be packed in conformity with the Standards of Weights
and Measures (Packaged Commodities) Rules, 1977, and the Prevention
of Food Adulteration Act, 1654 and Rules made there under.
The State Governments will have power to relax any requirement of the
packaging order for meeting special circumstances.

32
The power for implementation of the order is basically delegated to the
State Governments. The Central Govt is aware of the production of edible
oils is a highly unorganized industry. A substantial quantity of oil produc-
tion is in the small scale or unorganized sector. It is in view of the situa-
tions that the State Governments have been empowered to exempt any edi-
ble oils from the provisions of this order in specific circumstances. The
State Governments namely Tamilnadu, Andhra Pradesh, Orissa, Delhi,
Pondicheery, Karnataka and Rajasthan have started implementation of the
Packaging order. The other States have also initiated action and appointed
Registering Authority and Inspecting officer for implementation of this or-
der. For the smooth implementation of the packaging order, efforts are be-
ing made to remove some operational difficulties.

Vegetable Oil Products (Regulations) Order, 1998:

The Vanaspathi industry was controlled by this department through
two control orders under the Essential Commodities Act, 1995, namely (i)
Vegetable Oil Products (Control) Order, 1947 and (ii) Vegetable Oil Prod-
ucts (Standards of Quality) Order, 1975. These two Orders were issued at a
time when the vanaspati industry was at a primitive stage and strict control
over manufacture and distribution of the product was required. The controls
exercised were stringent and covered both the manufacturer and the dealer.
Looking to the status of the vegetable products industry in the coun-
try, Government had carried out a through review and intensive consulta-
tions with the industry. It was decided that in future, it would be sufficient
if control is limited to the manufacturing stage only.

33
Therefore, the earlier orders have been replaced with a single order called
the Vegetable oil products (Regulation) order, 1998.
This order, promulgated on 16th December 1998, reduces the area of control
and limits the role of this Department to the manufacturing stage of the
vegetable oil product. The standards of quality prescribed under the Sched-
ule have been tightened and all requirements which were vague and non-
measurable and thus open to arbitrary interpretation have been done away
with.
Salient Features:
Procedure simplified
Transparency in operation
Minimizing area of control
Consumer Protection through quality assurance
Requirements which were vague and non-measurable done away
with

Solvent Extracted Oil, De-oiled Meal and Edible Flour (Control)

Order, 1967:
The order is basically a quality control order to ensure that the sol-
vent extracted oils particular are not reached to the consumers for consump-
tion before the same are refined and conformed to the quality standards
specified in the order for the purpose. Standards for the solvent (hexane),
which is to be used for extraction of oil from the oil-bearing materials,
have also specified so as to eliminate possible contamination of oil from the
solvent used.

34
GENESIS:
In July, 1964 Ministry of Health accorded permission for the import of
solvent extracted soyabean oil from USA and its use in vanaspati manu-
facture subject to certain consideration.
The question of extending similar facilities the indigenously produced
solvent extracted oils considered in an Inter-ministerial meeting held in
Food Secretarys room in December 1964 and decided in the meeting
that the Ministry of Health to set up a Committee of
Technical Experts for a detailed study on the question and the nature of
controls to be exercised in this regard.
The committee constituted in January, 1966 comprising of representa-
tives of the then Ministry of Supply and Technical Development, Food
and Agriculture (Sugar and Vanaspati Directorate) ICMR (Nutrition Re-
search Laboratory, Hyderabad) CSIR (RRLO, Hyderabd and CFTRI,
Mysore), ISI etc.
The Committee recommended that solvent extracted oils might be used
in the manufacture of vanaspathi and refined oils provided that such use
was governed by regulatory order providing inter-alias for the licensing
of solvent extraction units and also for an effective system of distribu-
tion control for ensuring that solvent extracted oils did not reach the
consumers except after being processed in the form of vanaspati or re-
fined oil and that unprocessed oil was dispatched to industrial user only.
Ministry of Health also indicated that since all solvent extraction units
were not equipped to market their products in a fully refined form for
direct edible use and many of them could only manufacture crude or
semi-refined oil which had to be further processed.

35
Salient Features:
Governs the manufactures, quality and movement of solvent extract-
ed oils, de-oiled meal and edible flour;
Consumer protection through quality assurance of solvent extracted
oils, de-oiled meal and edible flour;
Eliminates the possibility of diversion of the oils for uses not intend-
ed.
Prohibit by, offer to buy, use or stock for use, any solvent not con-
forming to the quality standards for extraction of vegetable oils; and
Specific particulars to be declared on the label affixed to the contain-
er.

Oil Quality Monitoring in India:

The monitoring of Quality of edible oils and fats in done by the
DVVO&F (Directorate of Vanaspati, Vegetable Oils & Fat) in terms of the
provisions of the Orders. For the purpose of ensuring proper quality con-
trol, regular inspections of the units are carried out by the Field Officers of
DVVO&F posted in different zones, in addition to surprise inspections by
the Officers from Headquarters.

Irregularities pointed out by the Field Officers in their Inspection

Reports are considered for appropriate action against the defaulting units.
The samples drawn by the officers are sent for analysis for checking con-
formity with the prescribed requirements.

A well-equipeed laboratory exclusively devoted to the analytical

work pertaining to oil and fats in available with DVVO&F in the case of
failure of samples, appropriate action has been taken against the defaulting
units.

36
POLICY ON IMPORT & EXPORT OF EDIBLE OILS:
In pursuance of the policy of liberalization of the Government, there
have been progressive changes in the Import Policy in respect of edible oils
during the past few years. Edible Oil, which was in the negative list of im-
ports was first de-canalized partially in April, 1994 when import of edible
vegetable palmolein was placed under Open General License (OGL) sub-
ject o 65% of basic Custom Duty. Subsequently import of other edible oils
was also place under OGL, expect Coconut Oil. In order to harmonize the
interests of edible oils to the extent possible, import duty structure on edi-
ble oils is reviewed from time to time.

Imports of Edible Oils:

The quantities of edible oils imported during the last few years are as
under:
Year (Apr Mar) Import of Edible Oils*
Quantity (in Lakh Value (Rs.In Croes)
tons)
2007-08 26.22 7588.93
2008-09 41.96 7983.87
2009-10 41.77 5976.53
2010-11 43.22 6464.97
2011-12 43.65 8779.64
2012-13 52.90 11683.24
2013-14 45.42 10755.65
2014-15 42.88 8961.99
2015-16 33.95 7579.73
2016-2017(uptoMar.06) 44.78 9889.74

37
 Exports of Edible Oils:
Some of the important measures taken by the Government of India to
promote export of edible oils/oilseeds are:
Export of all oilseeds such as HPS groundnut, sesame seeds, sunflower
seeds, mustard seeds, etc. when exported for consumption, have been
made free without any quantitative or licensing requirements.
Export of vegetable oils such as coconut oil, conttonseed oil, kardi oil,
linseed oil, mustard oil, niger seed oil, palm oil, palm kernel oil, rice
bran oil, salad oil, sunflower oil, soya bean oil have been made free.
Export restrictions like registration and packaging requirements have
been removed on groundnut oil.
Export of oilseed, minor oils and fats and oil meals during the last nine
years are as under:
(Qty. in lakh tonne) (Value in Rs.Crores)
Year Oil Seeds Minor Oils OilCake/extraction Total
(Apr- and Fats
Mar)
Qty Value Qty Value Qty Value Qty Value
2008-09 1.39 515.4 1.96 614.6 36.27 2042.9 39.62 3172.9
2009-10 2.40 663.6 2.37 918.6 26.77 1736.9 31.54 33191.1
2010-11 3.23 837.7 2.32 843.8 23.53 1711.6 29.08 3393.0
2011-12 3.73 860.4 2.09 581.3 30.22 21181.1 36.04 3559.7
2012-13 2.10 591.6 1.65 530.7 19.02 1530.7 22.77 2653.0
2013-14 3.85 1287.3 2.62 1096.6 33.71 3065.06 40.18 5449.5
2014-15 3.66 1261.2 2.60 1027.7 27.34 2323.9 33.60 4612.8
2015-16 3.48 1106.07 1.84 635.97 44.48 3557.3 49.80 5299.3
2016-17 3.64 1207.04 2.42 726.87 36.58 4338.2 34.70 4723.7

38
Role of Cotton seed oil in Indian Economy:
The global production of cottonseed oil in the recent years has been
at around 4-4.5 million tons. Around 2 lakh tons are traded globally every
year. The major seed producers, viz, China, India, United States and Paki-
stan are the major producers of oil. United States (60000tons) is the major
exporter of cottonseed oil, while Canada is the major importer.

Cottonseed is traditional oilseed of India. In India the average pro-

duction of cotton oil is around 4 lakh tons a year. It is estimated that, if sci-
entific processing is carried out the oil production can be increased by an-
other 4 lakh tons.

In India, the oil recovery from cottonseed is around 11% Gujarat is

the major consumer of cottonseed oil in the country. It is also used for the
manufacture of vanaspathi. The price of cottonseed oil is generally depend-
ent on the price behavior of other domestically produced oils, more particu-
larly groundnut oil.

India used to import around 30000 tons of crude cottonseed oil, be-
fore palm and soya oil became the only imports of the country. Currently,
the country does not import cottonseed oil.

39
 COMPANY PROFILE

HISTORY OF ORGANIZATION:
The Company Coromandel Agro Products and Oils Limited was
incorporated on 12th December, 1975 as joint venture with AP Industrial
Development Corporation Limited, as a public limited Company. The cer-
tificate of commencement of business was obtained on 5 th January, 1976.
The joint ventures agreement with AP Industrial development Corporation
Limited was signed on 1st February, 1976 was transferred to the company
on February 13th, 1976.

The Plant has been installed by M/s. Sevotech Engineers (Pvt) Lim-
ited, Bombay on urn key basis in 1976. The company started its commer-
cial production in April, 1977 i.e. in a record time of 10 months form time
of foundation stone was laid. The Company is mainly processing cotton
seed, a by product of cotton on scientific basis.

The company CAPOL has been located at Jandrapet Villages,

6Kms away from Chirala. The area occupied by the factory is nearly 29
acres. The plot has been acquired from Government A.P. on lease for peri-
od of 99 years. The site is selected through roadside railway track and near
to the seashore. And the company is favorably located near the availability
of raw material, infra-structural facilities like power, water, transportation,
construction material, skilled personnel etc., requiring for the project pro-
cessing operations.

40
BACK GROUND OF PROMOTERS OF ORGANIZATION:
The promoters of the company are Capt. J.Rama Rao (Retd) V.S.M.
Sri Maddi Lakshmaiah, Edn. Sri. A.V.Badur (Retd) and Sri P.M.Mohan
Rao (Retd)
Capt. J.Rama Rao was the M.D. of the experienced man with high
skills and got the inspection of the company. He was a very experienced
man with high sills and got very wide experience. After the retirement of
Capt. Rama Rao, Sri Maddi Lakshmaiah Group has taken the management
of the company, who was also one of the promoters of the company and
they have got major shares, since the beginning Sri Maddi Venkateswara
Rao, S/o. Maddi Lakshmaiah has become Executive Director of the com-
pany. Sri Madi Venkateswara Rao has completed his Masters degree in
Business Administration (MBA) from Oxford University. USA Soon after
completion of his studies he come to India and he was nominated as direc-
tor in Maddi Lakshmaiah Pvt. Limited and MC Agro Products Limited. He
has very rich and good experience in tobacco line of business. He visited so
many East European countries and boosted their turnover.

Before taking over the management by M.L.Group, CAPOL has in-

curred huge lossess and lost its working capital because of under-utilization
of plant. It has been maintaining cordial relationship with the workers and
successfully completed the three years agreement with the union for the pe-
riod of 1990 to 1992.

41
PROGRESS OF PROJECT IMPLEMENTATION:
Civil construction work is being carried departmentally by the com-
pany under the supervision of M/s. N.N. Associates one of the leading civil
engineers and architects. The plant and machinery are being procured from
indigenous sources. In order to coordinate the procurement, fabrication and
erection of equipment from various sources and expedite implementation of
the project, the company has entrusted the entire work turn key basis to
M/s. Servotech Engineers Pvt. Limited. Bombay one of the reputed engi-
neering constructors in the oil seed industry. The installation of the plant
and machinery was expected to commence in the month of September,
1976 but due to unforeseen circumstances, the company went into com-
mercial production in the month April, 1997.

ORGANIZATION CHART:
A diagrammatic representation of the line of authority and subordi-
nate that is the position of each employee in the organization and relation-
ship, he has with other in the organization chart. The organizational chart
presents a summarized view of the whole organization, but also indicates
the independence of the various financial aspects of the concern.

42
AWARDS FOR CAPOL:
1)CAPOL was awarded prizes for best stalls in 1978. CAPOL re-
ceived prize as best exporter in India in 1979 in C.S. extractions and cakes
from the Union Minister, Government of India. Among Oil Mills, CAPOL
stood first in safety competition and received prize from Chief Inspector of
factories, A.P.

2)For the year 1993-94, company was selected by council for Indus-
trial trade of Development, India for its quality and productivity and re-
ceived GOLD UDYOG PATRA Award from Sri Pranab Mukerjee, Honor-
able Union Commerce Minister and Deputy Chairman, Planning Commis-
sion. On this occasion, Managing Director was facilitated at Rashtrapathi
Bhavan by Honorable President of India, Dr. Sankar Dayal Sharma. The
company also received awards from all India Cotton Seed Crushers Associ-
ation for being the third highest exporter and second domestic seller of cot-
ton seed extractions for the year 1992-93.

3)The company has received an award from All India Cotton Seed Crush-
ers Association for being the highest exporter and highest domestic seller
of cotton seed extraction for the year 1993-94. As part of the Industrial re-
lations, remained cordial during the year under review.

4)The director also wished to inform that the company has been
awarded May ay Commendation Certificate by Government of A.P. for
the continuous harmonious relations and with its employees.

5)In addition to this, Trade Union of the Company also awarded

also awarded BEST TRADE UNION by the government of A.P. for their
best relation for the year 1995.
43
Objectives of the CAPOL

1)Following are the objectives of the company. To acquire promote estab-

lish and carry on business of manufacture oils from cotton seed castor line
seed sunflower picebran and other types of edible and non crushing solvent
extraction chemical or any other process and utilize sell the oils and cakes
to be produced (or) acquired for edible purpose of in any type or pro-
cessing i.e. ordinary crushing solvent extraction.

2)Chemical or any other and to use sell the oils cakes to be produced or ac-
quired for edible purpose Orin any industry in the manufactured of nutri-
tion tools, soaps cattle fed manure fatty acids perfumes chemical and other
products in which such oils cakes are utilized.

3)To carry on in India or everywhere in any part of the world business of

spinning weaving of manufacturing or dealing in cotton or other fibrous
substances. The preparations the pressing of sand otherwise dealing with
cotton seed and extraction in and other such products.

4)There fourth relining and treating of such products and subjects them to
further processor manufacture to act as stockiest a commission agent repre-
sentatives or agents. Selling and purchasing agents distracters brokers of
edible oils.

44
Ancillary objectives of the company

To manufacture and deal in all kinds of plant machinery apparatus,

tools utensils materials and things necessary or convenient for carrying on
any of the main objects of the company.

To buy sell manufacture plant prepare treat alter exchange hire let on
hire, import export despise and ordeal in all kinds of articles and things
which may he required for the purpose of any of the business which the
company is expressly or by implication authorized by this memorandum at
carry on.

To establish appoint regulate and discontinue offices agents, repre-

sentatives distributors or retires in call such places as the company may
from time to time determine fair carrying out all or any of the companys
objects and to acts agents for others.

45
PRODUCTION PROCESS:
Cotton seed is by-product of the cotton and is a valuable source of
edible oil, cake linters and hulls. Oil has several industrial and other appli-
cations. India is probably the oldest cotton producing in the world.
The process of cotton-seed involves the following:
1. Cotton-seed pre-processing
2. Oil Mill
3. Solvent Extraction
4. Refining
COTTONSEED PRE-PROCESSING PLANT:
The following operation are carried out in this plant are
a) Seed cleaning
b) Delinting
c) Hulling and separation
d) Lint cleaning
e) Hull grinding
A) SEED CLEANING:
Cotton-seed has been taken directly by company without cleaning
and will face problems, because of impurities like leaf particles, sand and
dust in the seed into the linters during the de-lining operating and their
quality.
B) DELINTING:
After cleaning the next stage in processing is delinting cotton from
the cottonseed. Fuzzy fibers are extracted though this process. There are
first cut and second cut, in the first cut fine cotton is extracted, whereas in
the second cut rough cotton is extracted. At present the plant capacity is
150MT per day.

46
C) HULL AND SEED SEPARATION:
The mixture of hulls and uncut seed from the upper tray of the shak-
en separator is conveyed to that of the hull and seed separator. The adjust-
ment of the flow of the air through the hull and seed separator is important
and requires considerable attention in the beginning.

DOUBLE DRUM HULL HEATER:

The primary object of his hull beater is to remove fine following
powder, This is designed to reduce the oil content in the hull. Heavy paddle
shafts revolving in drums of perforated metal do the beating operation.

D) LINT CLEANING:
The unusual impurities in the linter are trash sticks. All these have
the effect of lowering the cellulose content of the linters and thus degrading
their quality. The importance of proper cleaning is to make readily salable
cotton. Linters cannot be over emphasized. In order to carry this two prem-
atic covering systems are provided fro the covering of the cycles of the
first and second cut delinters.

E) HULL GRINDING:
The extracted hull is made into fine powder through hull Grinding,
blocks of hull are powdered which can be used as Animal feeds and even in
Aquaculture.
MECHANICAL EXCELLING PLANT:
First meat will come from cottonseed per-processing plant to the oil
mill. The meat will go to the tempo conditioner. In this conditioner slightly
meat will be heated by the supply of steam.

47
From this tempo conditioner will go be two sides that is one side there is a
elevator and the other side there is a rotator lift. With the use of these two
meats will go to the conveyors and the conveyors will give meat to all the
xix expellers. Top of Kettle is opened and there is a tray to collect the meat,
from this tray meat will fall down is the kettle and inside there is a jacket to
heat the meat, steam will come down form the water-tube boiler and steam
is fed to the kettle to heat meat with use of an alligators, meat will fall on
the warm shaft. Thus meat will get crushed inside. Therefore oil will come
to the bottom part of the machine and cake will come in the front part of the
machine. Again cake will bend into broken cracks i.e. it will become small
pieces, then it goes to the Solvent Extraction Plant (SEP). Here the cake
may have 6% to 8% of oil.

SOLVENT EXTRACTION PLANT (SEP):

Oil cake breaks into small pieces and that is discharged into the ex-
tractor. In extractor hexane (one of the petroleum product) is sprayed on the
cake. Hexane is absorbed from oil cake and from the misella. After the ex-
traction cake contains oil below 0.5% but this cake has the hexane, so the
do-oiled cake is sent to the de-hexaning toaster. In the toaster, de-oiled cake
is heated with steam, hexane is evaporated and these vapors are cooled and
reused extraction.

REFINER:
Crude oil is having the following undesirable quantities
1. Free-fatty Acid
2. Gums and
3. Colour Pigments.

48
Refining is done in three stages:
a. Neutralization
b. Bleaching
c. De-odourisation

a) Neutralization:
Oil is mixed with sodium hydroxide. It is reacted with F.F.A and
soap. After mixing oil is fed to the centrifuged in I, bubble is rotating with
high speed due to that oil and soap are separated. That oil is having the high
colour (reddish). After neutralization oil is called Neutral Oil for reducing
the colour of oil we are send it to the next process called bleaching.
b) Bleaching:
Neutral Oil is discharged to bleacher and it is heated with steam vac-
uum. After belaching oil is filtered for removing the particles. The resultant
oil is called bleached oil. It smells bad, to remove it, oil is de-odorized in
de-odoriser.
c) De-odourisation:
Bleached oil is charged upto 175 degree centigrade with the help of
hot and cold steam under vacuum. At temperature odors and some color
pigments are evaporated. After de-odourisation oil is filtered and sent to
storage tanks that are called Refined. Oil.

49
 THEORETICAL FRAME WORK

INTRODUCTION:
The companys financial information is contained in Balance Sheet
and Profit and loss account. The figures contained in these statements are
absolute and sometimes unconnected with one another. An absolute figure
does not convey much meaning. However it is only in the light of other in-
formation that the significance of a figure is realized. For instance, Mr.X
weights 50Kg. Is lie fat? We cannot give answer unless we know his age
and height Similarly a companys profitability cannot be known unless to-
gether with the amount of profit, the capital employed is also seen. The re-
lationship of these two figures expressed mathematically is called a RA-
TIO. The ratio refers to the numerical or quantitative relationship between
two variables or items. A ratio is calculated by dividing one item of the re-
lationship between two variables or items. A ratio is calculated by dividing
one item of relationship with the other. The ratio analysis is one of the most
useful and common method of analyzing financial statements. As compared
to other tools of financial analysis, The need for ratios arises due to the fact
that absolute figures are often misleading. Absolute figures are certainly
valuable but their value increases manifold if they are studied with another
through ratio analysis. Ratios enable the mass of data to be summarized and
simplified. Ratio analysis is an instrument for diagnosis of the data to be
summarized and simplified. Ratio analysis is an instrument for diagnosis of
the financial health of an enterprise. Ratios, In fact, are full of meaning and
communities the relative importance of the various items appearing in the
Balance shet and profit and loss account.
50
MEANING OF RATIO:
A ratio is only a comparison of the numerator with the denominator.
The term ratio refers to the numerical or quantitative relationship between
two figures. A ratio is the relationship between two figures, and obtained
by dividing the former by the latter. Ratios are designed to show how one
number is related to another. It is worked out by dividing one number by
another.

Ratio analysis is an important and age old technique of financial

analysis. The data given in financial statements, in absolute form, are dump
and are unable to communicate anything. Ratios are relative form of finan-
cial data and very useful technique to check upon the efficiency of a firm.
Some ratios indicate the trend or progress or downfall of the firm.

MODE OF EXPRESSION:
i) RATE, which is the ratio between the two numerical facts over a
period of time, for example, stock turnover is three times a year.
ii) PURE RATIO OR PROPORTION which is arrived at by the
simple division of one number by another, for example, Current
Assets to Current Liability ratio is 3:1
iii) PERCENTAGE which is a special type of rate expressing the re-
lationship in hundred it is arrived at by multiplying the quotient
by 100, for example, gross profit is 30% of sales.

51
STEPS IN RATIO ANALYSIS:
i. The first task of the financial analysis is to select the infor-
mation relevant to the decision under consideration from the
statements and calculates appropriate ratios.

ii. The second step is to compare to calculated ratio with the ra-
tios of the same firm relating to past or with the industry rati-
os.

iii. This step facilities in assessing success of failure of the firm.

iv. The third step involves interpretation, drawing of inferences

and report-writing.

v. Conclusions are drawn after comparison in the shape of report

or recommended course of action.

52
IMPORTANCE OF RATIO ANALYSIS:

The inter relationship that exists among the different items appeared
in the financial statements, are revealed by accounting ratios. Ratio analysis
of a firms financial statements is of interest to a number of parties, mainly,
shareholders, creditors, financial executives etc. shareholders are interested
with earning capacity of the firm: creditors are interested in knowing the
ability of firm to meet its financial obligation: and financial executives are
concerned with evolving analytical tools that will measure and compare
costs, efficiency, liquidity and profitability with a view to making intelli-
gent decisions.

1. Aid to measure General Efficiency: Ratios enable the mass of ac-

counting data to be summarized and simplified. They acts an index
of the efficiency of the enterprise. As such they serve as an instru-
ment of management control.
2.Aid to measure Financial Solvency: Ratios are useful tools in the
hands of management and other concerned to evaluate the firms perfor-
mance over a period of time by comparing the present ratio with the past
ones. They point out firms liquidity position to meet its short term obli-
gation and long term solvency.
3.Aid in Forecasting and Planning: Ratio analysis is an invaluable aid
to management in the discharge of tits basic function such as planning,
forecasting, control etc. The ratio that are derived for analyzing and
scrutinizing the past result, helps the management to prepare budgets to
formulate policies and to prepare the future plan of action etc.

53
4.Facilitate decision-making:It throws light on the degree of efficiency
of the management and utilization of the assets and that is why it is
called surveyor of efficiency. They help management in decision mak-
ing.
5.Aid in corrective Action: Ratio analysis provides interfirm compari-
son. They highlight the factors associated with successful and unsuc-
cessful firms. If comparison shows an unfavorable variance, corrective
actions can be initiated. Thus, it helps the management to take correc-
tive action.
6.Aid in Intra Firm Comparison: Intra firm comparisons are facilitat-
ed. It is an instrument for diagnosis of financial health of an enterprise.
It facilitates the management to know whether the firms financial posi-
tion is improving or deteriorating by setting a trend with the help of ra-
tios.
7.Act as a Good Communication: Ratios are an effective means of
communication and play a vital role in informing the position of and
progress made by the business concern to the owners and their interest-
ed parties. The communication s by the use of simplified and summa-
rized ratios are more easy and understandable.
8. Evaluation of Efficiency: Ratio analysis is an effective instrument
which, when properly used, is useful to uses important characteristics of
business liquidity, solvency, profitability etc. A study of these aspects
may enable conclusions to be drawn relating to capabilities of business.
9.Effective Tool: Ratio analysis help in making effective control of the
business measuring performance, control of cost etc. Effective control is
the keynote of better management. Ratio ensures secrecy.

54
Nature of Ratio Analysis:
Ratio analysis is a powerful tool of financial analysis. A ratio defined
as the indicated quotient of two mathematical expressions and as the re-
lationship between two or more things. In financial analysis, a ratio is used
as an index or yardstick for evaluating the financial position and perfor-
mance of a firm. Analysis of financial statements to obtain a better under-
standing of the firms position and performance. Financial analysis is used
as a device to analyse and interpret the financial health of enterprise. The
absolute accounting figures reported in the financial statements do not pro-
vide a meaningful understanding of the performance and financial perfor-
mance of a firm. An accounting figure conveys meaning when it is related
to some other relevant information. Just like a doctor examines his patient
by recording his body temperature, blood pressure etc., before making his
conclusion regarding the illness and before giving his treatment, a financial
analyst analyses the financial statements with various tools of analysis be-
fore commenting upon the financial health or weaknesses of an enterprise.
A ratio is known as a symptom like blood pressure, the pulse rate or the
temperature of an individual. It is with help of ratios that the financial
statements can be analysed more clearly and decisions are drawn from such
analysis. The point to note is that a ratio indicates a quantitative relation-
ship, which can be, in turn, used to make a qualitative judgment. Such is
the nature of all financial ratios.

55
Limitations of Ratio Analysis
Ratio analysis is, as already mentioned a widely-used tool of finan-
cial analysis. It is because ratios are simple and easy to understand. But
they must be used very carefully. They suffer from various limitations. For
instance, financial statements suffer from a number of limitations and may
therefore, affect the quality of ratio analysis. If due care is not taken, they
might confuse rather than clarify the situation. Different firms may use
these terms in different senses or the same firm may use them to mean dif-
ferent things at different times. Some of the limitations of the ratio analysis
are given below:

1. Differences in Definitions
2. Limitations of Accounting Records
3. Lack of Proper Standards
4. No Allowances for Price Level Changes
5. Changes in Accounting Procedure
6. Qualitative Factors are ignored
7. Limited use of Single Ratio
8. Background is overlooked
9. Limited Use
10.Personal Bias
11.Arithmetical Window Dressing
12.Changing Policies

Interested Parties
56
 Ratio analysis of a firms financial is of interest to number of parties
mainly share-holders, creditors, debtors firms own management etc. Par-
ties interested and application of different ratios in short, are given below:

Parties Interested Application of Ratios To Test

1. Creditors (short-term) 1. Current Ratio
Investors 2. Liquid Ratio
Money Lenders 3. Absolute Liquid Ratio Liquidity and Solvency
4. Proprietary Ratio
5. Assets to Proprietor
Ratio
6. Debt-Equity Ratio
7. Capital Grearing Ratio
II. Shareholders 1.Gross Profit Ratio
Creditors (Long term) 2. Net Profit Ratio
Government 3. Operating Ratio Profitability
Purchasers of Enterprise 4. Return on capital em-
Employees ployed
5. Dividend Ratio
6. Earning per share
7. Dividend per share
III. Share-holders and 1. Capital Gearing Ratio Capital Structure
Outsiders 2. Equity Capital Ratio
3. Long Term Loans to
Net worth
IV. Management All types of ratios Management Efficiency

CLASSIFICATION OF RATIOS

57
 Financial ratios have been classified in several ways. A number of
standpoints may be used as base for classifying the ratios. It is a matter of
great surprise that no uniformity has been achieved in this regard. Different
authors have classified the ratios in varying groups. To illustrate. The short-
term creditors main interest is in the liquidity position or short-term sol-
vency of the firm: long-term creditors are more interested in the long-term
solvency and profitability analysis and the analysis of the firms financial
conditions: management is interested in evaluating every activity of the
firm because they have to protect the interest of all parties. Thus accounting
ratios may be classified on the following bases leading to somewhat over-
lapping categories.
A) Classification by Statements
B) Classification by users
C) Classification according to importance
D) Classification by purpose

A) Classification by Statements:

58
 The Traditional classification is based on those statements from
which information is obtained for calculating the ratios. The ratios are clas-
sified as follows:

CLASSIFICATION BY STATEMENTS

Balance Sheet Ratios (Fi- Profit & Loss A/c Rati- Inter statements Ratios
nancial Ratios) os (Operating Ratios) (Composite/mixed ratios)

Egs: Egs: Egs:

Liquidity Ratio Gross Profit Ratio Return on Capital Employed
Current Ratio Net Profit Ratio Return on Shareholders fund
Stock Ratio Operating Ratio Turnover of Working capital
Proprietary Ratio Expense Ratio, etc. Debtors Turnover Ratio etc.
Debt Equity Ratio
Capital Gearing Ratio, etc.

B) Classification by Users:
This classification based on the parties who are interested in making
the use of ratios.
CLASSIFICATION BY USERS

Ratios for Management Ratios for Creditors Ratios for Share holders

Egs: Egs: Egs:

Operating Ratio Current Ratio Yield Rate
Debtors Turnover Solvency Ratio Proprietary Ratio
Stock Turnover Fixed Assets Ratio Dividend Rate
Solvency Ratio Creditors Turnover Ratio, Capital Gearing
Return on Capital etc. etc. Return on capital fund etc.

C) Classification According to Importance:

59
 This basis of classification of ratios has been recommended by the
British Institution of Management. They are two types.

CLASSIFICATION BY IMPORTANCE

Primary Ratios Secondary Ratio

Egs: Egs:
Assets Turnover. Working Capital turnover
Profit Ratio Stock to Current Assets
Operating Profit Ratio Fixed Assets to Total As-
Return on Capital Fund set stock velocity
etc. Expense Ratio etc.

D) Classification by Purpose / Function:

This is classification based on the purpose for which an analyst com-
putes these ratios. The modern approach of classifying the ratios is accord-
ing to purpose or object of analysis. Normally, ratios are used for the pur-
pose of assessing the profitability and sound financial position. Thus, ratios
according to the purpose are more meaningful. There can be several pur-
pose which can be listed. For analysis, it is customary to group the purpos-
es into broad headings. The following are the broad categories of account-
ing ratios from functional point of view.

CLASSIFICATION BY PURPOSE
60
 SOLVENCY PROFITABILITY ACTIVITY EARNINGS
(Stability) (Performance)

Short-Term Long-Term
(Liquidity)

1. Current Ratio 1. Gross Profit Ratio 1. Dividend Ratio

2. Liquidity Ratio 2. Net Profit Ratio 2. Earnings per share
3. Cash Position Ratio 3. Expenses Ratio 3. Price Earnings Ratio
4. Stock Ratio 4. Operating Profit Ra- 4. Pay-out Ratio
5. Debtors Velocity tio 5. Earning Power Ratio
6. Creditors Velocity, 5. Return on Capital,
etc. etc.

1. Proprietary Ratio 1. Capital Turnover

2. Debt-Equity Ratio 2. Creditors Turnover
3. Leverage Ratio 3. Debtors Turnover
4. Security Ratio 4. Cash Turnover
5. Interest Coverage 5. Stock Turnover etc.
etc.

BALANCE SHEET RATIOS

61
1. Current Ratio
The ratio reflects the relation between currents assets and current lia-
bilities. It is also known as working capital ratio. The objective of calculat-
ing of this ratio is to determine the ability of the concern to meet its short-
term obligations.
Current assets
Current Ratio =
Current liabilities

Internationally accepted current ratio is 2:1 current assets shall be

two times to current liabilities .

If current assets have more of stock, debtors other than cash and
bank. Its may be difficult to meet current obligations.
But at the same time most of the current assets consist of bank and
cash it is easier to meet the obligations.
The higher ratio indicates that the firm ability to pay to current obli-
gations in time.
A very high current ratio also does not indicate efficiency since it
means less efficient use of funds.
A ratio of less than to indicates inablequate current assets to meet
current liabilities.

2. Networking Capital Ratio:

62
 Networking capital is not a ratio. The difference between current as-
sets and current liabilities is called net working capital. The term current
assets refers to assets which in the normal course of business get converted
into cash over a short period, usually not exceeding one year. Current lia-
bilities are those liabilities which are required to be paid in short period,
normally a year. But this is not necessarily so. At the same time, it
measures the firms potential reservoir of funds.

Networking capital
Net working Capital Ratio =
Net Assets

3. Quick Ratio:

Quick ratio is also known as liquid ratio or acid test ratio or near
money ratio. This ratio regarded as a good indicates of liquidity quick. This
ratio establishes the relationship between quick assets and current liabili-
ties. The objective is to measure the instant debt paying ability of the con-
cern.
For this purpose stock and Prepaid expenses are not included in current
assets.
Quick or Liquid Assets
Quick Ratio =
Liquid / Current liabilities

Current assets (Stock and Prepaid expenses)

=
Current liabilities Bank over draft

4. Cash Position Ratio or Absolute Liquid Ratio:

63
 It is a variation of quick ratio. When liquidity is highly restricted in
terms of cash and cash equivalents, this ratio should be calculated. Liquidi-
ty ratio measures the relationship between each and near cash items on the
one hand, and immediately maturing obligations on the other. The invento-
ry and the debtors are excluded from current assets, to calculate this ratio.
Cash + Marketable Securities
Cash Ratio =
Current Liabilities
Generally, 0.75: 1 ratio is recommended to ensure liquidity. This test
is more rigorous measure of a firms liquidity position. If the ratio is 1:1
then the firm has enough cash or hand to meet all current liabilities. This
type of ratio is not widely used in practice.

5. Proprietary Ratio:
Proprietary Ratio relates the shareholders funds to total assets. It is a
variant of the debt equity ratio. This ratio shows the long term or future
solvency of the business. It is calculated by dividing shareholders funds by
the total assets.
Shareholders Funds
Proprietary Ratio =
Total Assets or Total Resources

Preference share capital and equity share capital plus all reserves and
items are called shareholders fund. Total assets includes all assets includ-
ing goodwill. The acceptable nor of the ratio is 1:3.

6. Capital Gearing Ratio:

64
 Capital Gearing Ratio is also known as Capitalisation Ratio or Lev-
erage Ratio. Closely related to solvency ratios is the capital gearing ratio
which is mainly used to analyse the capital structure of a company. The
term Capital Gearing or Leverage normally refers to the proportion be-
tween the fixed intrest or dividend bearing funds and non-fixed interest or
dividend bearing funds. The former includes funds supplied by debenture
holders and preference shareholders and the latter include equity sharehold-
ers fund, including reserves and surplus.
Fixed Interest Bearing Funds
Capital Gearing =
Equity Share Capital

The capital gearing ratio show the mix of finance employed in the
business. If indicates the proportion between owners fund and non-owners
funds (Preference shares plus long-term debt.)

7. Debt Equity Ratio:

65
 The financing of total assets of a business concern is done by own-
ers equity (also known as internal equity) as well as outside debts (known
external equity). How much fund has been provided by the owners and how
much by outsiders in the acquisition of total assets is a very significant fac-
tor affecting the long-term solvency position of a concern. In other words,
the relationship between borrowed funds and owners capital is a popular
measure of the long-term financial solvency of a firm. This ratio indicates
the relative proportions of debts and equity in financing the assets of a firm.
This ratio is calculated in various ways.

External Equities
Debt Equity Ratio =
Internal Equities
(or)
Outsiders Funds
Debt Equity Ratio =
Share holders Funds

As acceptable norm for this ratio considered 2:1. A higher debt-

equity ratio is allowed in the case of capital intency industries, a norm of
4:1 used for fertilizers and comment units and a norm of 6:1 is used for
shipping units.

8. Reserves to Equity Share Capital Ratio:

66
 It reveals the policy pursued by the company with regard to growth
shares. A very high indicates a conservative dividend policy and increased
back of profit. Higher the ratio better will be the position.
Revenue Reserves
Reserve to Equity Capital Ratio=
Equity Capital

9. Solvency Ratio:
It is also known as debt ratio. It is a difference of 100 and proprietary
ratio. This ratio is found out between total assets and external liabilities of
the company. External liabilities means all long period and short period lia-
bilities.
Total liabilities
Solvency Ratio =
Total Assets

Solvency generally refers to the capacity or ability of the business to

meet it short term and long term obligations it measure the proportion of
total assets provided by the forms. Creditors with total assets are far more
external liabilities, created as solvent.

10. Security Ratio:

Fixed liabilities usually make the form of debentures, preferably , se-
cured on fixed assets, of the company the market value or depreciated book
value fixed assets, should be taken into account at the date of calculation of
this ratio. A ratio of 1.5:1 is considered good.

REVENUE STATEMENT RATIO

67
 (OR)
PROFIT & LOSS ACCOUNT RATIO

1. Gross Profit Ratio:

The gross profit ratio is also known as Gross Margin Ratio, Trading
Margin ration etc., is expressly as a Per Cent Ratio The difference be-
tween Net Sales and Cost of goods Sold is known as Gross Profit. Gross
profit is highly significant. The earning capacity of the business can be as-
certained by taking the margin cost of goods sold and sales. It is very useful
has a test of proprietary and management efficiency. It is generally content-
ed that the margin of gross profit should be sufficient enough to recover all
operation expenses and other expenses and also leave adequate amount as
Net Profit in relation to sales and owners equity. Thus, in a trading busi-
ness, gross profit is net sales minus trading cost of sales.
Gross Profit
Gross profit ratio = x 100
Net sales
Sales cost of goods sold x100
or =
Net Sales

2. Operating Ratio:

68
 This ratio establishes the relationship between total operating ex-
penses and sales. Total operating expenses include cost of goods, adminis-
trative expenses. Cost of goods sold are also known are also known as di-
rect operating expenses and the rest are known as other operating expenses.
Operating ratios are generally expressed in percentages.

Cost of goods sold + Operating Expenses

Operating ratio =
Net Sales

Cost of goods sold = Opening Stock + Purchases Closing

Stock
Operating expenses= Administrative expenses + Financial Expenses + SellingExpens-
es

3. Expenses Ratio:
The expenses is also known as supporting ratios to operating ratio it
becomes imperative that each aspect of cost of sales and or operating ex-
penses should be analyzed in detailed just findout as how for the concern is
able to say or is making over expenditure in respect of different type of ex-
penses. There are many expenses ratio. The following are a few:
Factory Expenses
a. Factory expenses ratio = x 100
Net Sales

Administrative expense
b. Administrative Expenses = x 100
Net Sales

4. Net Profit Ratio:

69
 It is also called Net profit to Sales Ratio = (Profit margin). The profit
margin indicative of managements ability to operate the business with
sufficient success not only to recover from 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 compensa-
tion 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
Net Profit Ratio = x 100
Net Sales

This ratio is used to measure the overall profitability and hence it is

very useful to proprietors. It is an index of efficiency and profitability when
used with gross profit ratio and operating ratio.

70
PROFITABILITY RATIOS RELATED TO INVESTMENTS

1) Return on 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
measures the profitability of investments. Thus overall profitability can be
known.
Net Profit
Return on Assets = x 100
Total Assets
There are various approaches possible to define net profits and as-
sets, according to the purpose and intent of the calculation of the ratios.

2. Return on Capital Employed:

This is the second type ROI (Return on Investment). This is also
known as Return on Investment or Rate of Return. The prime objective of
making investments in any business is to obtain statisfactory return on capi-
tal invested. It indicates the percentage of return on the capital employed in
the business and it can be used to show efficiency of the business as a
whole.
Operating Profit
Return on Capital Employed = x 100
Capital Employed

3. Return on Shareholders Equity:

71
 The ratio establishes the profitability from the shareholders point of
view.
Net Profit
Return on share holders equity = x 100
Shareholders Fund

The term net profit as used here, means net income after payment of
interest and tax including net non-operating income (i.e. Non-operating in-
come minus non-operating expenses.)

ACTIVITY RATIOS
OR
TURNOVER RATIOS

Inventory Turnover Ratio:

This is also known as stock velocity. This ratio is calculated consider
the adequacy of the quantum of capital and its justification for investing in
inventory. A firm must have reasonable stock in comparison to sales. It is
the ratio of the cost of sales and average inventory. This ratio helps the fi-
nancial manager to evaluate inventory policy.
Cost of Goods Sold
Stock Turnover Ratio =
Average inventory at cost

72
 CREDITORS TURNOVER RATIO

This is also known as Accounts Payable or Creditors Velocity. A

business usually purchase on credit goods, raw materials and services from
other firms. The amount of total payables of a business concern depends
upon the purchases policy of the concern, the quantity of the purchases and
suppliers credit policy. Longer the period of outstanding payable is lessor is
problem of working capital of the firm. But when the form does not pay off
its creditors within time it may have adverse effect on the business.
Net Credit Purchases
Creditors Turnover Ratio =
Average account payable

Working Capital Turnover Ratio:

Working capital of a company is directly related to sales. The current

assets like debtors bills receivables cash and stock etc., change with the in-
crease or decrease in sales.
This ratio indicates the efficiency of the management in utilizing the
working capital of the business concern Net working Capital means the
sum of total current assets minus current liabilities.
Net Sales
Working Capital Turnover Ratio =
Net working Capital

73
Debtors Turnover Ratio:

This ratio express the relationship between sales and average debtors.
In order to increase their sales the business concern start making. Credit
Sales as a result of credit sales debtors bills receivables are created. This
ratio also called receivables turnover ratio or Debtors velocity ratio.
Net Credit Sales
Debtors Turnover Ratio =
Average Debtors + Bills Receivables
Net Credit sales means that the sales return are deducted from total
credit sales. The objective of this ratio is to measure the liquidity of receiv-
ables or ascertaining the average period over which receivables are uncol-
lected.
Generally the shorter the average collection period the better is the
qualities of debtors. 45 to 60 days may be considered as normal ratio.The
higher ratio is considered congenial for the business implies better cash
flow.
DU PONT CHART

The Du pont Company of US pioneered a system of financial analy-

sis which has received widespread recognition. As a useful tool for finan-
cial analysis, it has been adopted by many firm in some form or the other.
The earning power, represented by return on capital employed, shows the
combined effect of the net profit margin and the capital turnover. A change
in any of these ratios will change in these factors will bring a change in
these two ratios.

74
The usefulness of the Du Pont type of analysis lies in the fact that it pre-
sents the over all picture of the performance of a firm as also enables the
management to identity the factors which have a bearing on profitability.
The two components of this ratio, namely, the profit margin and the in-
vestment turnover ratio individually do not give an over-all view as the
former ignores the profitability of investments while the later fails to con-
sider the profitability on sales.

Return on Capital Employed

Turnover x Profit Margin

Capital Em-
Sales
Sales Net Profit
ployed

Working Cap- + Sales Mfg. Costs

Fixed
ital
Assets +
Selling Costs
Stock + B/R
+ +
Debtors + Cash
Adm. Costs

A financial ratio is the principal tool for analysis of financial state-

ments. It helps to ascertain the financial condition of a firm. Financial ratios
seem to have predictive ability, particularly in signaling business strengths
and weakness of a firm. The most important financial ratios may be divided
into four types.

75
A) LIQUIDITY refers to the ability of a firm to meet its obligations in the
short run usually one year. Liquidity ratios are calculated by establishing
relationships between current assets and current liabilities. For examples,
Current Ratios. Liquid Ratios. Fund Flow Ratios etc.

B) FINANCIAL LEVERAGE refers to the use of debt finance. To judge

the long term financial position a firm, leverage or capital structure ratios
are calculated. These ratio indicate the funds provided by owners and credi-
tors. That is these ratios measure the proportion of outsiders capital in fi-
nancing the firms assets and establishing the relationship between bor-
rowed capital and equity capital. For example. Debt-Equity Ratios, Capital-
Equity Ratios, Interest Coverage Ratios etc.

C) TURNOVER RATIOS, also referred to as activity ratios or asset man-

agement ratios measure how efficiently the assets are employed by the
firm. These ratios are calculated by establishing relationship between sales
and assets. For examples, Stock Turnovers, Debtors Turnover, Fixed Asset
Turnover etc.

PROFITABILITY RATIO measure the overall performance of Business

profit margin ratios and rate of return ratios. Profit margin ratios show
the relationship between profit and sales, for examples, Gross Profit Mar-
gin. Net Profit Margin etc. Rate of Return Ratios reflect the relationship be-
tween profit and Investment for examples, Return on Investment, Return on
Equity etc.

76
CURRENT RATIO:
Current ratio is the relationship between the current assets and cur-
rent liabilities. The thumb of rule for current ratio is 2:1 This ratio is the
measured of general liquidity and is most widely used to make the analysis
of a shorter financial position or liquidity of a firm.
The higher ratio indicates that the firm ability to pay its current obli-
gations in time.

Curent ratio = Curent assets

Current liabilities

Current Ratio of CAPOL During 2011-17

Year Current Assets Curent labilits Ratio

2011-12 14,24,17,744 2,64,52,909 5.38

2012-13 14,23,53,683 2,94,93,103 4.83

2013-14 12,53,65,907 2,48,35,378 5.05
2014-15 14,67,14,461 2,65,36,149 5.53
2015-16 20,85,48,849 3,65,87,636 5.70
2016-17 22,23,17,426 4,56,23,264 4.87

77
 CURRENT RATIO

5.8 5.7
5.53
5.6 5.38
5.4
RATIO
5.2 5.05
5 4.83 4.87
4.8
4.6
4.4
4.2
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
YEARS

Interpretation:

During the years 2011-17 the current ratio was approximately 5 to 6

times. But as per the bankers thumb rule the current ratio must be 2:1
CAPOL is having the more than the standard rule. High current ratio in-
dicates lack of management practices leading to excessive inventories for
the current requirements and poor credit management of over extended ac-
counts receivable and it also means the CAPOL may not be making full use
of its current borrowings capability.

78
LIQUIDITY RATIO:
Liquidity ratio is relationship between the liquid assets and current
liabilities. Liquid assets mean which assets are converted immediately into
the cash. Current liabilities means which liabilities are payable within one
year. The theoretical standard for liquidity ratio is 1:1 it means one current
liabilities there must be one liquid asset. Because for payment of current
liabilities. We must have same amount of liquid asset.

Liquidity Ratio of CAPOL During 2011-17

Year Liquid Assets Current liabilities Ratio

2011-12 4,50,94,749 2,64,52,909 1.70
2012-13 5,61,54,678 2,94,93,103 1.90
2013-14 4,63,15,480 2,48,35,378 1.86
2014-15 6,47,33,455 2,65,36,149 2.45
2015-16 10,27,27,985 3,65,87,636 2.81
2016-17 12,36,42,324 3,87,56,324 3.19

79
 LIQUIDITY RATIO
3.5
3
2.5
2
RATIO

1.5
1
0.5
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Interpretation:
CAPOL has maintaining its liquid ratio with in the range from 1.70
to 2.81. In the year 2011-12 the liquidity ratio was 1.70 and this was little
bit increased in 2012-13 up to 1.90 and it was reduced to 1.86 in the year
2013-14 than in the previous year.and it was increased in 2014-2015 up to
2.45 This ratio was more increase in the year 2015-16 and 2016-17 the ratio
was 2.81, 3.19 respectively. The ratios are higher than the theoretical stand-
ard of 1:1 indicating poor utilization of liquid assets. The liquid assets in
the form of sundry debtors are substantial as an outcome credit sales lead-
ing to relatively higher liquid ratios. This is an outcome of the very nature
of cooking oil where sales are not possible without going for credit sales.

80
ABSOLUTE RATIO:

The ratio is to judge the immediate ability of the company to pay off
its current liabilities. Absolute liquidity assets obtained through adding the
cash, bank marketable securities.

Absolute liquidity ratio = absolute liquidity assets

Current liabilities
Where absolute liquidity assets = cash + bank +marketable securities

Absolute Liquidity Ratio of CAPOL During 2011-17

Year Absolute liquidity Current liabilities Ratio

Assets
2011-12 3,25,492 2,64,52,909 0.012
2012-13 2,52,718 2,94,93,103 0.008
2013-14 35,09,191 2,48,35,378 0.0141
2014-15 10,95,667 2,65,36,149 0.041
2015-16 6,92,625 3,65,87,636 0.018
2016-17 12,25,342 3,87,56,324 0.031

81
 ABSOLUTE LIQUIDITY RATIO

0.16
0.14
0.12
RATIO

0.1
0.08
0.06
0.04
0.02
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

YEARS

Interpretation:

Generally, the absolute quick ratio must be 0.5:1. In the CAPOL the
absolute quick assets very lower than the standard rule. This is an outcome
of poor cash and bank balance for the that cash sales are poor.

82
PROPRIETARY RATIO

The ratio establishes the relationship between shareholders funds and total
assets of the firm. This ratio is important to determine the long term sol-
vency of a firm. The higher ratio indicates that the better long term solven-
cy position of the company.

Proprietary ratio = Share holders funds

Total assets

Proprietary Ratio of CAPOL During 2011-17

Year Shareholders Total Assets Ratio

fund
2011-12 6,85,93,157 21,03,51,198 0.3260
2012-13 7,61,23,241 20,77,99,651 0.3663
2013-14 8,47,77,359 19,04,56,097 0.4451
2014-15 9,58,12,406 21,25,70,067 0.4507
2015-16 11,09,17,208 28,52,04,903 0.3889
2016-17 12,10,16,312 30,63,12,342 0.3950

83
 SHAREHOLDERS FUND
0.5
0.45
0.4
0.35
0.3
RATIO

0.25
0.2
0.15
0.1
0.05
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Series1 0.326 0.3663 0.4451 0.4507 0.3889 0.395

Interpretation:

During the year 2011-12 this ratio is 32.60% and next year it is in-
creased to 36.63% from the 2012-13 to 20-08 the ratio is increases from
45.51% to 45.07% and it is decrease to next year 38.89%.and it is increases
to next year 39.50%. So the company is maintaining better solvency posi-
tion and maintain better proprietary
ratio.

84
INVENTORY TURNOVER RATIO:

The inventory turnover ratio indicates the no. of times than an inven-
tory is sold and replaced over a given time period. This ratio can be used to
assess the quality of inventory. Inventory turnover ratios vary widely by in-
dustry and obvious deviations from the industry standard may indicate im-
proper purchasing, inadequate marketing, or an undesirable product. On the
other hand, too little inventory can cause problems with product availability
and can therefore hurt sales.

Inventory tunrover ratio = Cost of goods sold

Inventory

Inventory Turnover Ratio of CAPOL During 2011-17

Year Cost of goods sold Inventory Ratio

2011-12 38,60,16,270 8,36,81,449 4.61
2012-13 45,89,61,261 9,17,61,000 5.00
2013-14 46,23,38,306 8,26,24,716 5.60
2014-15 60,11,50,093 8,05,15,717 7.47
2015-16 62,51,69,834 9,39,00,935 6.66
2016-17 64,45,82,762 10,52,10,245 6.12

85
 INVENTORY TURN OVER RATIO
8
7
6
5
RATIO

4
3
2
1
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Series1 4.61 5 5.6 7.47 6.66 6.12

Interpretation:

The Inventory turnover ratio was varies from 4.61 in 2011-12 to 7.47
in 2013-2014but, in the year 2015-16 the ratio was 6.66 , in the year 2016-
17 the ratio was 6.12 a high ratio implies good inventor management. But,
it also indicates low level of inventory. CAPOL should carefully maintain
the high ratio without fail in meeting demands of customer requirements.

86
WORKING CAPITAL TURNOVER RATIO

Working capital of a company is directly related to sales. The current

assets like debtors bill receivables, cash and stock etc. Charge with the in-
crease or decrease in sales.

Working capital turnover ratio indicates the velocity of the utilization

of net working capital, which is difference between current assets and cur-
rent liabilities. The ratio indicates the no.of times the working capital is
turned over in the year. The ratio measures the efficiency with the working
capital is being used by a firm. A higher ratio indicates efficient utilization
of working capital and a low ratio indicates otherwise. While interpreting
the ratio these ratios can at best different firms in the same industry and for
various periods this can be calculate as below

Working Capital Turnover Ratio of CAPOL During 2011-17

Year Sales Working Capital Ratio

2011-12 42,37,42,302 11,59,64,835 3.65
2012-13 51,84,67,430 11,28,60,580 4.59
2013-14 54,63,50,198 10,05,30,529 5.43
2014-15 69,44,57,939 12,01,78,312 5.78
2015-16 72,91,38,804 17,19,61,213 4.24
2016-17 76,82,42,634 19,45,23,462 3.94

87
 WORKING CAPITAL
7
6
5
4
RATIO

3
2
1
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Series1 3.65 4.59 5.43 5.78 4.24 3.94
.
Interpretation:

Working capital turnover ratio measures the efficiency of utilizing its

assets. The higher the ratio reflects efficiency of managing its assets effi-
ciency of managing assets effectively, while low working capital turnover
ratio indicates under utilization.

During the year, 2011-12 the working capital turnover ratio was 3.65
times and the next year the ratio was increased to 4.5 times. In 2013-14year
and 2014-15 also increased. But, in the year 2015-16the ratio decreased to
4.24 times, in the year 2016-17 the ratio was decreases at 3.94 times. Be-
cause the reason is the working capital percentage was increased than the
net sales percentage. The ideal ratio. 7:1. the ratio are lower than ideal in-
dicating inefficiency of utilization of assets

88
DEBTORS TURNOVER RATIO:
The receivable turnover ratio measures the effectiveness of firms
Credit and collections. A high receivable turnover rate can indicate an ef-
fective credit and collection policy or alternatively it can indicate that a
business operates on a cash basis. A low turnover rate indicates that the
firm should pay more attention to collecting its accounts receivable. Ac-
counts receivable cam amount to interest free loans to customers. The firm
should analyze is accounts receivable in terms of its stated credit policy.

Debtors turnover ratio = Credit sales

Average debtors

Debtors turnover ratio of CAPOL during the year 2011-17

Year Credit Sales Average debtors Ratio

2011-12 42,37,42,302 3,13,64,227 13.5
2012-13 51,84,67,430 3,71,52,723 14.0
2013-14 54,63,50,198 3,52,55,495 15.5
2014-15 69,44,57,939 4,27,15,919 16.25
2015-16 72,91,38,804 6,96,22,772 10.47
2016-17 76,82,42,634 7,45,32,864 10.30

89
 DEBETORS TURNOVER RATIO
18
16
14
12
10
RATIO

8
6
4
2
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Series1 13.5 14 15.5 16.25 10.47 10.3

Interpretation:

Generally, higher turnover ratio means shorter average collection pe-

riod. During the year 2011-12 to 2013-14 the company maintains the high
debtors turnover ratio. It means the firm having the effective credit and
collection policy. But in the year 2015-16 and in 2016-17 the company
having the low debtors turnover ratio. It means the company should focus
about the collection from debtors.

90
FIXED ASSETS TURNOVER RATIO:
This ratio measures the efficiency with which fixed assets are em-
ployed. A high ratio indicates a high degree of efficiency. It is calculated as
follows:

Fixed assets turnover ratio = Net sales

Net fixed assets

Fixed assets turnover ratio of CAPOL during the year 2011-17

Year Net Sales Fixed Assets Ratio

2011-12 42,37,42,302 6,79,32,604 6.23
2012-13 51,84,67,430 6,54,45,118 7.92
2013-14 54,63,50,198 6,52,20,427 8.37
2014-15 69,44,57,939 6,58,54,756 10.54
2015-16 72,91,38,804 7,66,55,204 9.51
2016-17 76,82,42,634 8,42,34,806 9.12

91
 FIXED ASSETS TURNOVER RATIO
12

10

8
RATIO

0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Series1 6.23 7.92 8.37 10.54 9.51 9.12

Interpretation:

From the above analysis it is clear that the company has maintained
sufficient fixed assets turnover ratio though it has been varying from year
to year and it has been improving gradually indicating a constant improve-
ment.

92
GROSS PROFIT RATIO:
This ratio indicates the percentage of gross profit that is earned on each dol-
lar of sales. The gross profit margin for a firm should be compared to the
industry averages.

Gross Profit Ratio = gross profit / net sales

Gross Profit ratio of CAPOL during the year 2011-17

Year Net Sales Fixed Assets Ratio

2011-12 3,77,26,032 42,37,42,302 0.0890
2012-13 5,95,06,169 51,84,67,430 0.1148
2013-14 8,40,11,392 54,63,50,198 0.1538
2014-15 9,33,07,846 69,44,57,939 0.1344
2015-16 10,39,68,970 72,91,38,804 0.1426
2016-17 11,45,72,680 76,82,42,634 0.1491

93
 GROSS PROFIT RATIO
0.18
0.16
0.14
0.12
RATIO

0.1
0.08
0.06
0.04
0.02
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
YEARS

Interpretation:

From the analysis it is clear that the gross profit ratio has been im-
proving gradually indicating improved financial performance. During all
the years the gross profit has been varying between 15.38% and 8.9%.
However it is felt that the ratio is sufficiently poor.

94
NET PROFIT RATIO:

The net profit ratio establishes the relationship between the net profit
of the firm and the net and may be calculated as follows:

Net profit ratio = net profit /sales

Net Profit ratio of CAPOL during the year 2011-17

Year Net Profit after Net Sales Ratio

tax
2011-12 73,05,514 42,37,42,302 0.0172
2012-13 1,06,30,584 51,84,67,430 0.0205
2013-14 92,64,683 54,63,50,198 0.0169
2014-15 1,19,51,046 69,44,57,939 0.0172
2015-16 1,89,81,931 72,91,38,804 0.0260
2016-17 2,23,45,659 76,82,42,634 0.0290

95
.

NET RPOFIT RATIO

0.035
0.03
0.025
0.02
RATIO

0.015
0.01
0.005
0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
YEARS

Interpretation:

From the above analysis it is clear it has been varying unevenly yet
we can observe it has been improving. During all the years the net profit
has been varying between 1.72% and 2.9% It is interpreted that the net
profit margins are very poor.

96
 RETURN ON TOTAL ASSETS:

It measures the profitability of the firm in terms of assets employed

in the firm. It calculates the establishing relationship between the profits
and the assets employed to earn the profit.

Return on assets = Net profit after tax / average total assets*100

Return On Total Assets of CAPOL during the year 2011-17

Year Net profit after Total assets Ratio

tax
2011-12 73,05,514 21,03,51,198 3.47
2012-13 1,06,30,584 20,77,99,651 5.11
2013-14 92,64,683 19,04,56,097 4.86
2014-15 1,19,51,046 21,25,70,067 5.62
2015-16 1,89,81,931 28,52,04,903 6.06
2016-17 2,23,45,659 31,25,40,329 7.14

97
 RETURN ON TOTAL RATIO
8

5
RATIO

0
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Series1 3.47 5.11 4.86 5.62 6.06 7.14

Interpretation:

From the above analysis it is clear return on assets was improving

from year to year and has been varying between 3.47% and 7.14% and it is
felt that the return on assets substantial improvement.

98
CAPOL BALANCE SHEET AS ON 31ST MARCH 2011-17

As at 31-3-2011 As at 31-3-2012
LIABILITIES SCHEDULE
Rupees Rupees
Share Capital A 79,00,000 79,00,000
Reserves & Surplus B 6,06,93,157 5,63,07,470
Secured Loans C 9,56,89,916 6,08,76,041
Un Secured Loans D 1,89,65,412 2,29,59,662
Current Liabilities & 2,64,52,909 1,62,78,337
E
Provisions
Deferred Tax Liabil-
P(5)
ity/(Asset) 6,49,804 (4,320)

TOTAL 21,03,51,198 16,43,17,190

ASSETS
Fixed Assists F 6,79,32,604 5,71,96,902
Investments G 850 850
Current Assets Loans
H 14,24,17,744 10,71,19,438
& Advances

TOTAL 21,03,51,198 16,43,17,190

99
CAPOL BALANCE SHEET AS ON 31ST MARCH 2012-13

As at As at
LIABILITIES SCHEDULE 31-3-2012 31-3-2013
Rupees Rupees
Share Capital A 79,00,000 79,00,000
Reserves & Surplus B 6,82,23,241 6,06,93,157
Secured Loans C 7,85,58,221 9,56,89,916
Un Secured Loans D 2,21,36,137 1,89,65,412
Current Liabilities & 2,94,93,103 2,64,52,909
E
Provisions
Deferred Tax Liabil-
P(5)
ity/(Asset) 14,88,949 6,49,804
TOTAL 20,77,99,651 21,03,51,198

ASSETS
Fixed Assists F 6,54,45,118 6,79,32,604
Investments G 850 850
Current Assets Loans 14,23,,53,683 14,24,17,744
H
& Advances
TOTAL 20,77,99,651 21,03,51,198

100
CAPOL BALANCE SHEET AS ON 31ST MARCH 2013-14

As at As at
LIABILITIES SCHEDULE 31-3-2013 31-3-2014
Rupees Rupees
Share Capital A 79,00,000 79,00,000
Reserves & Surplus B 7,68,77,359 6,82,23,241
Secured Loans C 5,64,81,947 7,85,58,221
Un Secured Loans D 2,22,30,886 2,21,36,137
Current Liabilities & 2,48,35,378 2,94,93,103
Provisions E

Deferred Tax Liabil- 22,61,614 14,88,949

P(5)
ity/(Asset)
TOTAL 19,05,87,184 20,77,99,651

ASSETS
Fixed Assists F 6,52,20,427 6,54,45,118
Investments G 850 850
Current Assets Loans 12,53,65,907 14,23,,53,683
H
& Advances
TOTAL 19,05,87,184 20,77,99,651

101
CAPOL BALANCE SHEET AS ON 31ST MARCH 2014-15

As at As at
LIABILITIES SCHEDULE 31-3-2014 31-3-2015
Rupees Rupees
Share Capital A 79,00,000 79,00,000
Reserves & Surplus B 8,79,12,406 7,68,77,359
Secured Loans C 7,07,31,166 5,64,81,947
Un Secured Loans D 1,71,75,185 2,22,30,886
Current Liabilities & Pro- 2,65,36,149 2,48,35,378
E
visions
Deferred Tax Liabil-
P(5)
ity/(Asset) 23,15,161 22,61,614
TOTAL 21,25,70,067 19,05,87,184

ASSETS
Fixed Assists F 6,58,54,756 6,52,20,427
Investments G 850 850
Current Assets Loans & 14,67,14,461 12,53,65,907
H
Advances
TOTAL 21,25,70,067 19,05,87,184

102
CAPOL BALANCE SHEET AS ON 31ST MARCH 2015-16

As at As at
LIABILITIES SCHEDULE 31-3-2015 31-3-2016
Rupees Rupees
Share Capital A 79,00,000 79,00,000
Reserves & Sur- 10,30,17,208 8,79,12,406
B
plus
Secured Loans C 11,55,36,386 7,07,31,166
Un Secured Loans D 1,88,42,570 1,71,75,185
Current Liabilities 3,65,87,636 2,65,36,149
E
& Provisions
Deferred Tax Lia- 33,21,103 23,15,161
P(5)
bility/(Asset)
TOTAL 28,52,04,903 21,25,70,067

ASSETS
Fixed Assists F 7,66,55,204 6,58,54,756
Investments G 850 850
Current Assets 20,85,48,849 14,67,14,461
H
Loans & Advances
TOTAL 287,52,04,903 21,25,70,067

103
CAPOL BALANCE SHEET AS ON 31ST MARCH 2016-17

As at As at
LIABILITIES SCHEDULE 31-3-2016 31-3-2017
Rupees Rupees
Share Capital A 79,00,000 79,00,000
Reserves & Sur- 11,23,12,103 8,79,12,406
B
plus
Secured Loans C 13,45,23,465 7,07,31,166
Un Secured Loans D 95,82,750 1,71,75,185
Current Liabilities 3,86,54,532 2,65,36,149
E
& Provisions
Deferred Tax Lia- 34,23,213 23,15,161
P(5)
bility/(Asset)
TOTAL 306,396,063 21,25,70,067

ASSETS
Fixed Assists F 7,73,52,202 6,58,54,756
Investments G 850 850
Current Assets 24,72,53,562 14,67,14,461
H
Loans & Advances
TOTAL 324606614 21,25,70,067

104
FINDINGS

1. From the above it is evident that working capital turnover ratio is steadily
increasing except in 2008-09. The trend of working capital turnover ratio is
satisfactory.
2. From the above study it is clear that the current ratio of CAPOL was vary-
ing between 5.05 to 4.87 in last 5 years. It is very high when comparing to
standard ratio 2:1 it indicates that CAPOL Company has over invested in
current assets.
3. From the above study it is found that liquidity ratio of CAPOL Company
was satisfactory. The liquidity ratio also increasing year by year from 1.90
to 3.19. It indicates company is maintaining over liquid assets than current
liabilities.
4. From the above it is evident that absolute liquidity ratio has been very poor
when compared to the standard ratio. The standard ratio of absolute liquidi-
ty ratio is 0.5:1
5. From the above study it is clear that CAPOL maintains the high debtors
turnover ratio. Higher turnover means shorter average collection period.
But in the year 2008-09 the company having the lower debtors turnover ra-
tio.
6. From the above study it is found that inventory turnover ratio was fluctuat-
ed during the period 4.64 to 7.47. CAPOL maintains the good inventory ra-
tio. They meet the demands of customer requirements without fail.
7. From the above it is evident that debt equity ratio explains the relationship
of the tenders contribution for each of owners contribution. The continuous
decline in this ratio in found.

105
 SUGGESTIONS

1. It may be suggested that the company is investing more in current assets

leading to higher current ratio. So it should decreases investment from
the current assets.
2. It may be suggested that the company is having the high debtors collec-
tions period. So it is suggested to reduce the collection period.
3. It may be suggested that company maintains high inventory level and
they having the high inventory holding period. So it is suggested to re-
duce the inventory level and maintain proper inventory level instead of
high inventory level.
4. It may be suggested that the company should make proper utilization of
current asets to increase sales.
5. It may be suggested that the company should improve its debtors turno-
ver ratio towards collecting debt from customers more promptly
6. The current ratio of CAPOL was varing between 5.05-4.87 in last
5years it is very high when comparing to standard ratio 2:1 it indicates
that CAPOL company has over interested in current assets.
7. The liquidity ratio of CAPOL company was satisfactory.The liquidity
ratio also increased year by year from 1.70-3.19.It indicates
company is maintaining over liquid assets than current liabilities.
8. It is suggested that the company may go for the production of oils like
sunslower, ground nuts and so on for higher turnover and sales and
there by enhance its financial position and prositability through devel-
oping its own brands and improved product mix.

106
 BIBLIOGRAPHY

S.No TITLE OF THE AUTHOR NAME PUBLICATIONS

BOOK
1 FINANCIAL STATE- M.Y KHAN & TATA Mc GRAW-
MENT TEXT AND P.K.JAIN HILL PUBLISHING
PROBLEMS COMPANY LIM-
ITED, NEW DELHI
2 FINANCIAL MAN- I.M.PANDEY VIKAS PUBLISH-
AGEMENT ING HOUSE PVT.,
LTD., NEW DELHI
3 FINANCIAL MAN- V.K.BHALLA ANMOL PUBLICA-
AGEMENT AND POL- TIONS PVT. LTD.,
ICY NEW DELHI
4 FINANCIAL MAN- PRASANNA TATA MC GRAW
AGEMENT THEORY CHANDRA HILL PUBLISHING,
AND PRACTICE NEW DELHI

WEB SITES

1. www.capol/org.com
2. www.investopedia.com
3. www.microsolpower.com
4. www.capol@mlgroup.com

107