Industry Profile: Chapter - 1

AN ANALYSIS OF FINANCIAL STATEMENT BY USING THE TECHNIQUE OF RATIO ANALYSIS AT DTL
CHAPTER - 1
INDUSTRY PROFILE
1. a INTRODUCTION OF MANUFACTURING INDUSTRY:
MANUFACTURING IS the organized activity devoted to the transformation of raw

materials into marketable goods. Manufacturing sector is the backbone of any economy. It
fuels growth, productivity, employment, and strengthens agriculture and service sectors.
The manufacturing sector in India will grow as the nation grows. Indian
Manufacturing sector is broadly divided into - Capital Goods &Engineering, Chemicals,
Petroleum, Chemicals & Fertilizers, Packaging, Consumer non-Durables, Electronics, IT
Hardware & peripherals, Gems & Jewelry, Leather & Leather Products, Mining, Steel &
non-Ferrous Metals, Textiles & Apparels and Water Equipment.
1.b. KEY POINTS OF INDIAN MANUFACTURING SECTOR.
1. India's manufacturing sector is gaining momentum and has been ranked fourth in terms of
textiles, tenth in leather and leather products.
2. The manufacturing sector contributes around 9.8% of the India GDP.
3. It employs over 17% of the total workforce in the country.
4. India’s manufacturing sector contributes around 1.8% of the global manufacturing output.
5. It occupies 9th position among the leading manufacturing countries.
6. It has come out as a global manufacturing hub with presence of MNCs such as LG,
Samsung, Hyundai, Pepsi, GE, General Motors, Ford and Suzuki.
DEPT. OF MBA, AIT, CHICKMAGALUR Page 1

1.c GLOBAL MANUFACTURING INDUSTRY:
Owing to the emerging technologies worldwide, the world manufacturing industry has
geared up and has incorporated several new technologies within it’s purview.
Economists consider the world manufacturing industry as a sector which generates a lot
of wealth. Generating employment, introducing latest techniques, real earnings from
shipments etc..have put the world manufacturing industry in a favorable position.
With the implementation of the concept of eco friendly environment , world

manufacturing industries worldwide abide by the eco friendly norms. world
manufacturing industry also plays an important role in the defense of a country. By
manufacturing aircrafts which play a vital role in the country’s defense, the aerospace
manufacturing industry acts as a shield. other industry in the manufacturing sectors
manufactures products which are indispensable in our daily lives. With regard to the
GDP or gross domestic product, world manufacturing industry contributes to the global
economy as well as the global GDP.
Surveys and analysis of trends and issues in manufacturing and investment around the
world focus things as;
 The nature and sources of the considerable variations that occur cross-nationally
in levels of manufacturing and wider industrial-economic growth.
 Competitiveness.
 Attractiveness to foreign direct investors.
 1.d MANUFACTURING INDUSTRY IN INDIA:
The ‘India Manufacturing’ sector has the potential to elevate much of the Indian
population above poverty by shifting the majority of the workforce out of low –wage
agriculture.
Manufacturing sector is the backbone of any economy .It fuels growth, productivity,
employment ,and strengthens agriculture and service sectors. Astronomical growth in
worldwide distribution systems and IT, coupled with opening of trade barriers, has led

to stupendous growth of global manufacturing networks, designed to take advantage of

low-waged yet efficient work force of India.
‘Indian manufacturing’ sector is broadly divided into:-
 Capital Goods & Engineering.

 Chemicals, Petroleum, Chemical & Fertilizers.
 Packaging.
 Consumer non-Durables.
 Electronics, IT Hardware & peripherals.
 Gems & Jewelry.
 Leather & Leather products.
 Mining.
 Steel &non-Ferrous Metals.
 Textiles & Apparels.
 Water Equipment.
Indian Manufacturing Industry is successfully competing in the global marketplace and

registering high growth ,but large sections of ‘ Indian manufacturing’ sector still suffers
from bottlenecks like-
 Use of primitive technology or under utilization of technology.
 Poor infrastructure
 Over staffed operations.
 Expensive financing and bureaucracy.
GDP’s share of manufacturing industry in India as grown from 25.38% in 1991 to

27% in 2004. Its contribution to exports has increased from 52% in 1970 to 59% in
1980 and 71% in 1990,77% in 2000-01 .Manufacturing exports accounted for a little
over 5% of the value of output of the manufacturing sector in 1990 . It is now close to
10%. India’s currently exports manufactured products worth about $50 billion .A recent
study on’ scenario of Indian manufacturing industry ‘ has forecast an annual growth of
17% and to cross the $300 billion mark by 2015. Most of these off- business would be
in the auto components, pharmaceutical, apparel, specialty chemical ,electrical and
electronic equipment sectors.

Owing to the emerging technologies worldwide ,the world manufacturing industry has
geared up and has incorporated several new technologies with in its purview
.economists consider the world manufacturing industry as a sector which
Generates a lot of wealth .generating employment, introducing latest techniques, real
earning from shipments etc., have put the world manufacturing industry in a favorable
position.
1.e IMPORTANCE OF MANUFACTURING SECTOR IN INDIA’S ECONOMIC

GROWTH:
 Manufacturing sector now accounts for about 50 per cent of the GDP.
 manufacturing company is ideal for Indian education where more than 80% people
are below middle - school level
 it can reform Indian economy which entirely rely on endemic unemployment
providing agricultural industry

CHAPTER - 2
COMPANY PROFILE
2.a BACKGROUND AND INCEPTION
Name of the company: Dynamatic Technologies Limited.
Incorporated on: 8 th march 1973.
Present Chairman: Mr. J.K .Malhoutra.
Major product lines: Hydraulics Gear Pumps.
Employees are: 1021.
DTL company produce: 2800 varieties products.
Company’s product range covers 2800 varieties of Hydraulics Gear Pumps and
Hydraulics Systems, which is their forte. They also have diversified applications in the
Defense & Aerospace Sectors and in Metallurgy. With that start thirty three years ago,
they have now come a long way with ever increasing scale of operations and plans for
expansion. Company’s main manufacturing plant as well as the Head Office is suited at
Dynamatic park, Peenya, Bangalore. They have two plants in Chennai and one plant in
Swindon, United Kingdom.
The company entered into a technical collaboration agreement with Dowty hydraulic
units limited, U.K It was then as Dynamatic Hydraulics Limited.
In 1981 the company hydraulics division developed declutching unit, integral with the
hydraulic pump for agricultural tractors
In 2001 the company had entered into a strategic alliance with Atos Spa of Italy
Company’s product range covers verities of Hydraulic Gear Pumps and Hydraulic
system. They also have diversified into the Defense and Aerospace sectors and in
Metallurgy. Company’s main manufacturing plant as well as the head office is situated
at Dynamatic Park, Peenya, Bangalore.

2.b NATURE OF BUSINESS CARRIED:
Company is involved in transforming raw material in finished goods, which gets to

demands of automobile industry, aircraft, below are the subsidies of the company. Its
products and services are spread across wide areas such as
2.b 1.DYNAMATTC HYDROLICS:
Dynamatic is the market leader in the field of various hydraulics dynamitic products.
Literally each every conceivable hydraulic user in India, enjoy very high brand
recognition and flange market share
2.b 2.DYNAMATIC AEROSPACE:-
Dynamitic Aerospace, a division of Dynamatic technologies ltd division of Dynamatic

technology ltd, a pioneer and a recognized leader in the India private sector for the
development of temples aero sector for the development of 1995.
2.b.3POWERMETRIC DESIGN:-
It is a world class design Venter capable for total product and system design with
advanced capacity in sector, Dynamatic engineering for design validation. Analysis and
optimization.
2.b.4DYNAMETAL:-
Dynametal a division of dynamitic technologies produces high quality non ferrous alloy
and castings for industrial automotives and aerospace’s applications this foundry is
located in CHENNAI.

With a proven track record spanning over a quarter of a century, DTL are the largest
producer of Hydraulic Gear pumps in Asia. In addition to leading the Indian market
with a share of 70%, it has also made a mark in the international arena as the fourth

largest producer world-wide. DTL are the original equipment manufacturer for all the
major tractor and earth moving equipment manufacturers in India like.
Mahindra and Mahindra, Eicher, Punjab Tractor, TAFE, HMT, BEML, BHEL, Telco,
Godrej and Boyce, Bajaj, Larsen and Toubro, McNeil Engineering, Ingersoll Rand,
Ashok Leyland, Hindustan Motors, Crompton Greaves, etc. In the recent past DTL has
made inroads into the Aerospace and Defense sectors, expanding the horizons, the pilot
less Target Aircraft LAKSHYA was a prestigious project for industry aerospace
division, where they manufactured its wings and rear fuselage DTL has also bagged the
National Awards for Excellence in Indigenization of Defense Equipment awarded by
the Ministry Defense.
DYNAMATIC RESEARCH AND DEVELOPMENT UNIT, BANGALORE:
Dynamatic Technologies Ltd, an Indian maker of components for Airbus SAS, Deere &
Co. and Ford Motor Co., plans to invest 900 million rupees ($19.3 million) to tap rising
demand for defense equipment and automobiles in India. Dynamatic is betting on more
opportunity at home as India upgrades its military capabilities. The South Asian nation
plans to buy 126 combat aircraft valued at $11 billion. As part of an offset clause, the
government wants 50 percent of the value of the order to be met through local
production and procurement.

Boeing Co., Lockheed Martin Corp., BAE Systems Plc, Saab AB, Desalt Aviation SA
and Russia’s United Aircraft Corp. are among the manufacturers vying for the Indian
fighter jet order. India has tripled defense spending in a decade as it competes with
China’s military expansion. It aims to increase the proportion of defense equipment
produced at home from about 30 percent to 70 percent in the next 10 years.
2. c. VISION, MISSION AND QUALITY POLICY
2. c. 1.VISION:
Be it the ISO 9000 certification for quality systems or the ISO 14000 certification for
environmental standards. DTL believes that the role in society is that of a responsible
and accountable organization, that is actively contributing to the society. DTL vision
has been to
 Develop products and technologies in line with national priorities

 Achieve global competence
 To operate at the international level, to think global and to be the world’s largest
producer of hydraulic gear pumps.
 Transform our organization in to a knowledge based organization
DTL value system too reflects the commitments to quality and innovation in a societal
context.
2. c. 2. MISSION:
“To achieve GLOBAL LEADERSHIP through TOTAL CUSTOMER

SATIAFACTION’
 Aimed to develop diversified products

 To expands towards more functional area
 Focused on continuous quality management
 To achieve rapid growth

2. c. 3. QUALITY POLICY
Dynamatic technology limited is involved in the design and manufacture of highly

engineered components and systems for hydraulic, Aerospace and Automotive
applications.
 It is the policy to provide creative and innovative solutions to delight the

customers at cost effective prices on a continuous basis.
 By delivering superior value to the customers, they will build a successful
business model for themselves, capable of returning high yields to investors and
improving the quality of life of all employees.
All processes will be eco friendly and be designed to eliminate wastage, and all
employees will strive to constantly expand the boundaries of knowledge through
imagination and diligence.
2. d. PRODUCT / SERVICE PROFILE:
 Automotive Sector
 Aerospace & Defense Sector
 Agricultural Equipment Industry
 Construction Equipment Industry
DTL is the largest supplier for the tractor industry and major force in
 Earth moving Equipment

 Drilling Equipment
 Material Handling Equipment
 Machine Tools
Apart from Gear pump, DTL also provides
 Hand Pumps
 Manually operated DC Valves

 Hydraulic Motors
2. d.1 A brief classification of the product range:
 Hydraulic gear motors, Hydraulic power packs

 Directional Control Valves
 Servo Test Equipments for Helicopters
 Hydraulic Biogases Components
 Automatic Depth & Control Valves for Tractors
 Aluminum Casting
 Specially Heat treated components
 High precision Airframe Structures.
 Break Actuating System
 Transmission Products for Battle tanks
 Load sensing Hydraulic valves
 Ground support Equipment for military jets
 Complete Tractor Hydraulic System.
2.d.2 Automotive Components:
 Water Pumps
 Oil Pumps
 Intake Material
 Exhaust Manifold
 Rocker Arms
 Rocker Covers
 Shift Forks
 Rear Case Oil Seals.

 DYNAMATIC
HYDRAULICS is one of the
world’s largest Hydraulic Gear
Pumps makers, and, is focused
on being number one. It has
two state-of-the-art
manufacturing facilities,
located in Bangalore, India,
and Swindon, U.K.
 AUTOMOTIVE
In June 2007, Dynamatic® acquired the manufacturing facilities of Sauer Danfoss

Limited, UK, at Swindon through its subsidiary Dynamatic Limited, UK. This
acquisition has conferred upon Dynamatic®, a global delivery chain, a vastly
broadened product offering, a world-class design laboratory as well as better
technologies to support its growth plans.

 DYNAMATIC
AEROSPACE® is a pioneer
& a recognized leader in the
Indian Private Sector for the
development of exacting
Airframe Structures and
Precision Aerospace
Components.
 PUMPS AND AUTOPARTS
Dynamatic, which has also entered into an agreement to supply Lockheed Martin, will
invest 700 million rupees on a factory to make aerospace components and spend 200
million rupees to modernize its automobile parts plants this fiscal year, Malhoutra said.
The company has an accord with Wichita, Kansas- based Spirit Aero Systems Holdings
Inc. to supply the flap-track beams to Airbus.
2.e. Areas of Operation:
The main manufacturing plant as well as office is located at Dynamatic Park Peenya,
Bangalore. in India.
Branch across INDIA
 Chennai
 Mumbai
 Gujarat
Around the Globe:
 Swindon, United Kingdom.

 Singapore.

2.f. Ownership Pattern:
Dynamatic technologies limited are a widely held public limited company and the
shares of the company are listed on Bangalore and Bombay Stock Exchanges.
Share Holding Pattern in Percentage:
(As on 30 June 2011)
Promoters : 25.6%
Corporate Bodies : 31.91%
Public : 31.30%
FIIs : 10.2%
Banks & Institutions: 0.01%
Mutual Funds : 0.98%
0.98
0.01
10.2
25.6 Promoters
Corporate Bodies
Public
31.3 FIIs
Banks & Institutions
Mutual Funds
31.91
Figure 1

C.E.O. & .M.D. : Udayant Malhotra
Chairman of the Board : Vijay Kapoour
Directors : Dr.K. Aprameyan
 Mr. Govind Mirchandhini

 Malavika Jayaram
 Mr. Raymond Keith Lawton
 Air chief Marshal. Krishnamurthy
 Ms. Shanthi Ekambaram
2.g. COMPETITORS INFORMATION:
DTL is a market leader in Hydraulic as learnt in the beginning it holds 70% of the
Indian Market. In other Industries the company in an infant, but still it is doing well.
Not much information about it as they are all well known companies like,
 Bosch Limited
 Eaton Corporation
 Yuken India Limited
They are all the competitors in the field of Electro Components.
Competitors Hydraulic pumps for tractors Industrial pumps
DYNAMATIC 85% 60-70 %

BOSCH EATEN 15% ------------
YUKEN INDIA LTD --------- 30-40 %
In aerospace industry though the competition is not that much because of the sustained
conservative approach of the government. And complementing nature of the industry.
This makes the companies on each other rather than making them rivals. Automotive
industry is a vast industry and in world context there are thousands of companies, and
Bosch stands as the rival again, but there are some components which the company has
control over for which there are no competitors.

2.h.. Infrastructural facilities:
Aiming to achieve and sustain product excellence, DTL has cut no corners in
establishing comprehensive world-class facilities for its entire range of products, the
main assembly shops, the manufacturing and testing operations.
DTL has got well equipped class rooms with the facilities of LCD’s and OHP’s which
are use to train the employees and trainee students.
Internal communication:
Internal communication is usually through Inter Office Memos, which are sent to the
required persons/department. If the communication is intended for all the people in the
company, it has to be put up on the notice board. They have three notice boards, one on
the Hydraulics shop Floor, one on the aerospace floor, the other on the first floor
landing near the canteen and the third in the Aerospace Machine Shop.
Telephones and Intercom:
Company has three telephone lines. All incoming and outgoing calls are sourced
through the EPABX at the reception. A few departments have external lines or can dial
‘0’ to access external lines.
E-mail:
Almost all the departments have access to e-mail. Check out with their Departmental
Head whether the department has access to the Internet. Normally, based on the
requirement of the department, their own personal email id with @dynamatics.net
address is created within 3 working days.
Quality Policy Cards:
All employees are required to have one of our quality policy cards at all times with
their premises. The personnel department will give the card at the time of joining.

2. i. ACHIEVEMENTS/AWARDS:
2. i.a .Awards
 HAL Best Vendor Award for Dynamatic Aerospace – 2003
 DTL receives National Award for Excellence – 2003.
 In 2001, Dynamatic was awarded the status of ‘Recognized In-house R&D
Unit’, by the Department of Scientific and Industrial Research (DSIR),
Government of India.
 LRQA approves DTL’s Quality Management Systems- 2000
2. i. b Achievements
 Dynamatic exports its products to over 30 countries and its export segment
 Dynamatic is the only Indian manufacturer of pumps in this segment and
therefore, has a cost advantage over its competitors. It expects expanding
activity in this segment over the next decade.
 Dynamatic Aerospace has the largest infrastructure in the Indian Private
Sector for manufacture of exacting Air Frame Structures and Precision
Aerospace Components.
 Dynamatic is the market leader in the field of Hydraulics.
 Dynamatic bags maiden order from John Deere, Germany – 2003
 Dynamatic Technologies Limited has acquired the Hydraulic Business
Division (Swindon Unit) of Sauer Danfoss limited, UK, through its
subsidiary Dynamatic Limited. UK, on 15 June 2007.
 Efficient collaboration for customer satisfaction – 2003

2.j. WORK FLOW MODEL (END TO END:
DTL uses a generic model for all the components, through some slight changes are
made at the floor level by the people responsible. Atypical cam be depicted like this’
PURCHASE
PLAN FOR PRODUCTION
PRODUCTION
FINISHED GOODS
FINAL
FINAL DESIGN
PACKING AND DISTRIBUTION
WORK FLOW MODEL :
 Purchase order, DTL that is taking (purchase) order from, which is one regular
customer.
 Plan for production: According to the purchase order of quality quantity, the
production department is preparing the schedule for production.
 Production and assembly: The production department is producing the product
and services and the basis of schedule and requirements. Then they will assign
in assembly department.

 Finished goods: The finally company is preparing the finished products

according to purchase order.
 Final inspection: The final inspection is taken by the inspection department of
the company on quality of products.
 Final design: The design is one of the lost stages of packing list that is dividing
a basis quantity and customer requirement.
 Packaging and distribution: After packing the products the company is taking
initiatives to delivery products through various mode of transportation.
2.k. FUTURE GROWTH AND PROSPECTUS:

 DTL is growing rapidly with the turnover growing strongly over the past few
years.
 Exports are expected to constitute 15-20 percent of the company’s turnover, in
the next 2 years.
 The company also expects to acquire better technologies to support over all
business and gain overall inorganic business growth with a better synergy
effect.
 Company looks forward to working closely with Northrop Grumman’s
Electronic Systems sector to help meet the advanced technology aerospace and
defense product and service needs indentified by the Indian ministry of defense
going forward, a world-leading provider of advanced military radar, electronic
warfare and other avionics system

CHAPTER - 3
MCKENSY’S 7S FRAME WORK
3.a. INTRODUCTION
The 7’s frame work for management analysis was developed by Mckensy’s &
company. 7’s model provides an effective way of analyzing an organization, in terms of
dynamic relationship among 7 key elements namely Structure, Skill, Style, Strategy,
System, Staff, Shared values.

3.1 STRUCTURE
The basic organization of the company. It prescribes the formal relationships among
various positions and activities, how an organization member is to communicate with
other member.
CEO & Managing Director
President & Group CFO
Executive Director & COO, Executive Director& Vice president &

Hydraulics & Dynamental COO, Automotive COO, Aerospace
Personal & GM SGM

Administration Production operations
GM
Dynament
Corporate GM al
AGM
planning Marketing Materials
GM
Facility
Secretarial AGM Mgt
AGM PPC
Marketing
SGM
HR/Legal/Admi
R&D
n AGM Exports DGM
Production
Corporate
AGM
Communications
R&D
AGM DGM
Marketing PLANT
GM Compliance
Company
Secretary

3.2 STRATEGY:
Strategy refers to a coherent set of actions aimed at gaining a suitable advantage over
competitors, improving positions of customers and allocation sources.
Here the strategy explained with reference to DTL is:
 Continuous efforts for developing innovative and cost effective products

through constant research and development activities.
 To transform the company into a global R&D organization, with a pre-eminent
market position in the Hydraulic, Automotive and Defense sectors in Asia.
 Introduction of product life cycle management tools
 Engaging all employees through participative management to instill a sense of
ownership of all business process of the company.
 Design and redesign products that are safe, energy saving and environmental
friendly.
 Energy consumption in each plant is monitored optimized and minimized.
 Practice open dialogue with employees, customers, government agencies, trade
associations and with communities all around our facilities.
3.3 SYSTEM:
Internal control system and their adequacy:
The company has deployed a comprehensive internal audit system, which is

commensurate with the scale of operations. Competent and qualified professionals,
who are external to the company’s business, conduct regular and detailed audits, both at
the manufacturing locations and its branch offices. The board level audit committee of
the company meets at regular internal control systems and takes stock of the situation
from time to time.
Steps in the system
 Overseeing the company’s financial reporting process and the disclosure of its
financial statement is correct, sufficient and credible.

 Recommending to the broad, the appointment, re-appointment and if required,

replacement or removal of the statutory auditor, fixation of audit fee as well as
approval of payments to the statutory auditors for any other services rendered to
the company.
 Reviewing with the management the annual financial statements before
submission to the board for approval.
 Reviewing with the management the performance of statutory and internal
auditors, and adequacy of internal control systems of the company.
 Reviewing adequacy of internal audit function.
 Discussion with internal auditors about any significant findings and follow up
thereon.
3.4 SHARED VALUE:
 Dynamatic’s long standing commitment to high standards of corporate

governance and ethical business practices is a fundamental shared value of its
board of directors, management and employees. The company’s philosophy of
corporate governance stems from its belief that timely disclosures, transparent
accounting policies, and a strong and independent board go a long way
preserving shareholder’s trust while maximizing long term shareholder value.
 Whilst simultaneously enabling the company to fulfill its obligations to other
stakeholders such as customers, suppliers, financiers, employees, the
government and to the society at large. The company firmly believes that such
practices are founded upon the core values of transparency, professionalism,
empowerment, equity and accountability.
3.5 SKILL:
Applicants with less than a year’s experience are appointed as trainees. After training,
the employee will be on probation for the prescribed period of time. The performance
of the employee determines the duration of the training and t
The probation experienced candidates are appointed as probationers. The

management will decide the period of the training/probation.

3.6 STAFF:
Staffing is the process of acquiring human resources for the organization and assuring
that they have the potential to contribute to the achievement of the organization’s goals.
The total number of staff in the company is 1021.
The strength of DTL is the experience. Many of the employees working in the
organization are employed working in the organization are employed for than 10 years
and the recruitment process in the last 10 years has been very less. Every employee is
carrying with him a lot of experience. Other important strength of DTL is the
employees association with the company, almost every employee working in DTL is
proud to be working here which is a very important thing for the company. Other
strengths include highly skilled and efficient employees.
3.7 STYLE:
The organization follows Participative style of decision making process:
As a process of good corporate governance for corporate affairs and all matters
requiring discussion / decisions by the board / committee, the company has a policy for
board and committee meetings. This policy ensures that the decision making process at
board / committee meetings is done in an informed, systematic and in the most efficient
manner.
Developing and using top down / bottom up communication channels:
The communication needs were evolved over the years and refined based on
experiences gained by leaders and the requirements of organization. Feedback for the
improvement is taken from the employee’s perception survey.
Top down communication
 Communication meetings (unit heads to functional heads, functional heads to

managers and executives, executives to supervisors and workers).
 Interoffice memos,

 E-mail and intranet websites.

 Bulletin board of departments
 Notice boards
Upward communication:
 Participative forum.
 Meeting with union & associations.

CHAPTER - 4
SWOT ANALYSIS
A scan of the internal and external environment is an important part of the strategic
planning process. Environmental factors internal to the firm usually can be classified as
strength (S) or weaknesses (W), and that external to the firm can be classified as
opportunities (O) or threats (T). Such an analysis of the strategic Environment is
referred to as SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm’s
resources and capabilities to the competitive environment in which it operate. As such,
it is instrumental in strategy formulation and selection. The following diagram shows
how a SWOT analysis fits into an environmental scan.
4.1 STRENGTHS:
 The company is Asia’s largest producer of Hydraulic Gear pumps and one of
the top five worldwide.
 The company imparts training to workmen for working on multiple machines
along with combination of reengineering of processes, which has constantly
increased the productivity levels.
 Excellent engineering laboratory.
 Export continues to be the growth driver. Company has now been approved as a
global strategic source by the world’s leading agricultural and construction
equipment manufacturers such as John Deere, Case New Holland, CLASS,
JCB, etc.
 Highly experienced, competitive and creative staff of the company is their main
strength.

 Company has wide variety of product range which helps them to enter into
different sectors.
 The company imparts training to workmen for working on multiple machines
along with combination of reengineering of processes, which has constantly
increased the productivity levels.
4.2 WEAKNESS:
 Inconsistency in the supply of raw materials due to poor supplier evaluation.

 Power intensive, department on power and any miscarriage here results in under
utilization of capacity.
 Needs updating with the times in terms of plant and machinery.
4.3 OPPORTUNITIES:
 The market for tractors in India constitutes 36 percentage of the world market ,
and is still not fully mechanized in India , thus creating an opportunity For
the company.
 The rapidly growing infrastructure sector has opened a gateway to the company.
 The automotive components industry is poised to witness significant change
over the next decade.
 Company presently operates predominantly in the highway vehicle segment
which is characterized by high volumes and thin margins.
 Company is continuing to develop numerous of pumps used in the industrial
sector , with an aim of increasing penetration in this lucrative and growing
market.
4.4 THREATS:
 Climatic conditions are one important threat ,as tractors being agriculture based
product and are empowered by hydraulic pumps.
 New players engaged with new innovations and updating materials are bought
to market.
 Competition

CHAPTER - 5
5. ANALYSIS OF FINANCIAL STATEMENTS
Introduction:-
The study financial performance analysis was conducted in Dynamitic Technologies

Limited. In order to know the financial status or position of the company. The analysis
and inter predation of data to the financial position and operation as well. A number of
numbers of techniques are used to study the R/S...Different statement.
Meaning:-
One of steps of accounting is the analysis & interpretation of the financial statement
which result in presentation of data. That helps various categories of persons in forming
opinion about the profitability and financial position of business counter.
In the words of Myers:-
Financial performance statement analysis is longest study of relationship among the

various financial factors in a business as disclosed by a single set of statement and a
study of the trend of the set factors as shown in a series of statement.
Steps in Performance analysis:-.
The major steps in adapting through the performance analysis. There are three types
 ANALYSIS
 INTERPRETATION
 COMPARISION
A) ANALYSIS:-
Financial statement means. Splitting up or regrouping of the figures funds in the

financial statement in to derived homogeneous comparable parts. In other words it is
the Reclassification & rearrangement of the Data

B) INTERPRETATION:-
After the analysis and comparison of financial statement the result must means the
formation of national judgment and drawing of proper conclusion about the progress
financial position and future prospects of the business through careful study of the
relationship of component parts obtained through analysis and compares.
C) COMPARISON:-
It required to inter connected figures must be compared with each other and their
relative magnitude on relationship must be measured.
Objectives of the study:
 To overview the financial position of the company.
 Indentify the factors affecting the finance and operational performance.
 To analysis the performance of the company by ratio analysis.
 To predict the market value added oft the company.
 To summaries the findings and suggest the corrective action.

5.b Profit & Loss
(Rs in Crores)
INCOME 31/3/2011 31/3/2010
Sale of manufactured products 34,10,250 30,60,557
Less: Excise duty 3,04,843 2,29,534
Sale of manufactured products, Net 31,05,407 28,31,023
Income from project execution service 4,36,558 1,42,379
Service income 1,022 3,825
Other income 61,615 49,751
36,04,602 30,26,978
EXPENDITURE
Cost of materials consumed 19,05,118 16,39,690
Personnel expenses 5,19,104 4,04,034
Other operating expenses 5,18,194 4,43,908
29,42,416 24,87,632
EBITDA 6,62,186 5,39,346
Depreciation 2,04,065 1,85,63
Interest and finance charges 2,40,543 2,14,265
PROFIT BEFORE TAXATION 2,17,578 1,39,418
Provision for tax
------- current tax 44,170 21,817
-------Minimum alternate tax credit entitlement (6,432) (11,928)
-------deferred tax charge 31,076 21,126
-----wealth tax 343 229
PROFIT AFTER TAX 1,48,421 1,08,174
Balance brought forward from previous year 3,32,483 2,82,638
Amount available for appropriation 4,80,904 3,90,812
--interim dividend 32,488 24,366

--proposed dividend 21,659 16,244
---tax on dividend 8,909 6,901
Transferred to general reserve 14,842 10,818
Balance carried forward 4,03,006 3,32,483

4,80,904 3,90,812
Earning per share(E P S) (Equity share per value 27.41 19.98
Rs 10 each)

5. a Balance Sheet
(Rs in Crores)
SOURCES OF FUNDS As on 31/3/2011 As on 31/3/2010
Shareholders funds
Share capital 54,147 54,147
Reserves and surplus 16,61,748 14,06,538
LONS FUND
Secured loans 24,52,440 17,37,888
Unsecured loans 2,30,844 1,19,232
Deferred tax liability, net 2,61,977 2,30,901
46,61,156 35,48,706
APPLICATION OF FUNDS
Fixed assets
Gross block 38,77,018 32,45,297
Less: Accumulated depreciation 12,64,967 10,62,007
Net block 26,12,051 21,83,290

Capital work-in-progress 5,08,933 84,382
31,20,984 22,67,672
Investments 5,24,357 5,09,857
CURRENT ASSETS,LOANS AND
ADVANVCES
Inventories 5,72,013 4,25,880

Sundry debtors 8,68,251 6,64,174
Cash and bank balances 70,109 52,594
Other current assets 71,601 37,857
Loans and advances 4,54,295 3,24,736

2,036,269 1,505,241
CURRENT LIABILITIES AND 9,59,226 6,98,769
PROVISIONS
Current liabilities 61,228 35,295

Provisions 10,20,454 7,34,064
10,15,815 7,71,177
Net Current assets 46,61,156 35,48,706

INTERPRETATION OF RATIOS
CURRENT RATIO-
(In Crores)
Particulars 2009-10 2010-11
Current assets 150.52 73.42
Current liabilities 203.62 10.20
Current ratio 2.05 1.99
Current ratio is calculated to establish relationship between the current assets and
current liabilities. It is also called as working capital ratio or banker’s ratio. The
difference between current assets and current liabilities is called working capital. It
attempts to measure the firm’s ability to meet its short term obligation.
In any operating concern, the current ratio should be 2:1 it is called as ideal ratio. In
DTL current ratio is 1.99:1. It shows that the company is performing well as there is a
higher current assets compared to current liabilities.
QUICK RATIO cid Test Ratio= LIQUID ASSET
Current liabilities (In Crores)
Liquid assets 107.93 146.42
Current liabilities 73.42 10.20
Acid Test Ratio 1.47 1.43

Liquid ratio is the ratio of liquid asset to current liabilities. It is the more severe and
stringent test of a firms ability to meet its current obligations. Liquid assets are those
assets which are readily converted into cash. It is wise to keep liquid assets at least
equal to current liabilities. The ideal quick ratio is 1:1 for any business concern but
DTL has quick ratio of 1.43:1. Here the quick assets are more than quick liabilities so
this is a favorable condition.
NET PROFIT RATIO
(in Crores)
PAT 10.82 14.84
Net sales 297.73 354.29
Net profit ratio 0.03 0.04
This ratio establishes relationship between net profit and sales which is generally
expressed as a percentage. It indicates operational efficiency or inefficiency of an
enterprise. High net profit is the index of better operational efficiency. DTL has a net
profit of 0.04%.
DEBT EQUITY RATIO
Debt-Equity Ratio= Long Term Debt
Shareholder’s equity

(in Crores)
Long Term Debt 185.71 253.59
Shareholder’s equity 354.86 466.11
Debt-Equity Ratio 0.52 0.54
This Ratio shows relative contribution of creditors and owners. It is used to

analyze long term solvency of the firm. Debt equity ratio describes the lenders
contribution for each rupee of the owner’s contribution. DTL has a debt equity ratio of
0.54:1. the ideal debt equity ratio is 2:1.
WORKING CAPITAL TURNOVER
Net working capital turnover ratio= Total sales
Net current assets
(in Crores)
Total sales 77.10 78.20
Net current assets 428.28 411.57
Net working capital turnover ratio 0.18 0.19 Wor

king
capital turnover ratio is calculated to study the efficiency with which the working
capital is utilized in the business. This ratio is also called net current assets turnover.
This ratio indicates speed with which working capital is turned over during the year.
Higher the working capital indicates better management of working capital and vice
versa.

FIXED ASSETS TO NETWORTH
Fixed assets ratio= Fixed assets
Net worth
(In Crores)
Total sales 297.73 354.29
Net fixed assets 261.20 218.33
Fixed asset turnover 0.88 0.62
This ratio establishes the relationship between fixed assets and proprietor’s funds. The
ratio indicates the extent to which fixed assets are financed by owner’s funds. The
DTL has fixed assets to Net worth ratio of 0.62
FIXED ASSETS TURNOVER
Fixed asset turnover = Total sales
Net fixed assets
(in Crores)
Fixed assets 29.22 38.00
Net worth 297.73 354.29
Fixed assets ratio 1.36 1.35
This ratio is calculated to measure the adequacy or otherwise of investment in fixed

assets. This ratio is very significant for the manufacturing concerns. High ratio

indicates efficiency in performance and vice versa. The DTL shows high fixed assets
turnover ratio i.e. 1.35 times and managing better.
INVENTORY TURNOVER
Inventory Turnover Ratio = Cost of Goods Sold
Average Inventory
(in Crores)
Cost of Goods Sold 297.73 354.29
Average Inventory 42.59 57.20
Inventory Turnover Ratio 6.99 6.19
Average Inventory
This ratio indicates the velocity of the movement of the goods during the year.
Movement or otherwise of goods decide the success or failure of a business concern,
because it has direct influence on the profits of any business concern. If the ratio is high
that indicates that the efficiency of management in converting stock into cash quickly,
sound liquidity position and quality of goods maintained. The DTL shows 6.19 times
inventory turnover ratio which is an average condition.

CHAPTER-6
LEARNING EXPERIENCE
• It was a great experience working in the Dynamatic Technologies Ltd when It’s
a good opportunities to interact with Industrial Experience
• The company has given full support for me to learn new things ,Ignoring my
mistakes
• Very happy with the A.G.M. (Finance) for his great support, & the way he
thought us.
• To survive in corporate by handling pressure from superior authority strong

dedication towards job is very require
I learnt many things about the functioning of an organization in accordance with the
present market trends. I had learnt within the classroom being practiced in real life
situation.
The main purpose of the organization study is to make acquainted with the practical
knowledge about the overall functioning of the organization. It gave me an opportunity
to study the human behavior and make myself ready different situations, which
normally would come across while in factory environment. It has given me lot of
exposure as to the working of the organization.
In spite of their busy schedules the officials were very much kind towards me to take
time and explain to me the different concepts of the organization. It always gave me a
use fill insight in to the topic. There is great attitude of the employees that keeps them
in to social fabric of a work place and greatly contributes to the success and heightened
performance of the organization. Employees from every corner of the department
helped me in getting required information for the successful completion of this training.
The atmosphere was friendly and I didn’t feel any difficulty during the training period
Finally I would like to conclude that this in plant training provided me a greatest
opportunity to study the financial performance and the study includes ratio analysis of
financial performance of Dynamatic Technologies Ltd last 6 years.

PART B:
1a. GENERAL INTRODUCTION
Financial statement analysis is the process of identifying the financial strength and
weakness of the firm by properly establishing relationships between the items of the
balance sheet and profit and loss account. Financial statement analysis can be
undertaken by the management of the firm or by parties outside of the firm viz, owners,
creditors, investors, and others.
Financial statement analysis is also known as analysis and interpretation of financial

statements. Financial statements are prepared primarily for decision-making. They play
a dominant role in setting the framework of managerial decisions. But, the information
provided in the financial statement is not an end in itself as no meaningful conclusion
can be drawn from these statements alone.
However the information provided in the financial statement is of immense use in

making designs through analysis and interpretation of financial statements. Typically,
the major financial statements which results from the process of accounting are:
 Profit and loss account.

 Balance sheet
Financial statements analysis is an attempt to determine the significance and meaning

of the financial statement data so that forecast may be made of the future earnings,
ability to pay interest and debt maturities (both current and long-term) and profitability
of sound dividend policy.
Types of Ratios:
 Liquidity ratios
 Turn Over ratios
 Profitability ratios
 Leverage ratios

I. Liquidity Ratios
Liquidity refers to the ability of a firm to meet its obligations in the short-run,
usually one year. Liquidity ratios measure the ability of the firm to meet its current
obligations. Liquidity ratios are generally based on the relationship between current
assets and current liabilities. . A firm should ensure that it does not suffer from lack of
liquidity, and also that it does not have excess liquidity, will result in a poor
creditworthiness, loss of creditors confidence or even in legal tangles resulting in the
closure of the company. A very high degree of liquidity is also bad idle assets earn
nothing. The firm’s funds will be unnecessarily tied up in current assets. Therefore, it is
necessary to strike a proper balance between high liquidity and lack of liquidity.
To measure the liquidity of a firm, the following ratios can be calculated:
 Current Ratios
 Quick or Acid Test or Liquid Ratios
 Absolute Liquid Ratio or Cash Ratios
Current Ratio
Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio, also known as working capital ratio, is a measure of general
liquidity and is most widely used to make the analysis of a short-term financial position
or liquidity of a firm. It is calculated by dividing the total of current assets by total of
the current liabilities.
Current assets include cash and those assets which can be easily converted into cash
within a short period of time generally, one year, such as marketable securities, bills
receivables, sundry debtors, prepaid expenses, inventories, work in progress, etc.
Current liabilities are those which are payable within a short period generally one year
and include outstanding expenses, bills payable, sundry creditors, accrued expenses,
short-term advances, income tax payable, dividend payable, bank over draft, etc.
Standard Current ratio in India is ‘1.33’ and internationally is ‘2’. It indicates the
availability of current assets in rupees for every one rupee of current liabilities.

Quick Ratio
Quick ratio is a fairly stringent measure of liquidity than the current ratio. It is based on
those current assets which are highly liquid i.e. inventories are excluded from the
current assets of this ratio because inventories are deemed to be least liquid component
of current assets. It establishes a relationship between quick assets and current
liabilities.
As a rule of thumb or as a convention quick ratio of 1:1 is considered

satisfactory.
Cash Ratio
Cash ratio is perhaps the most stringent measure of liquidity because cash and bank
balances and short-term marketable securities are the most liquid assets of a firm. The
ideal ratio for absolute liquid ratios is 0.5:1
II. Turnover Ratios
Turnover ratios, also referred to as activity ratios or asset management ratios, measures
how efficiently the assets are employed by a firm. These ratios are based on the
relationship between the level of activity, represented by sales or cost of goods sold and
levels of various assets. The various turn over ratios are:
a. Inventory Turnover Ratio

b. Debtor Turnover Ratio
c. Creditor Turnover Ratio
d. Working Capital Turnover Ratio
e. Fixed Assets Turnover Ratio
f. Current Assets Turnover Ratio
g. Total Assets Turnover Ratio
Inventory Turnover Ratio
Inventory turnover ratios indicate the number of times inventory is replaced during the
year. It measures the velocity of conversion of stock into sales. Usually, a high
inventory turnover indicates efficient management of inventory because more

frequently the stocks are sold; the lesser amount of money is required to finance the
inventory. A low inventory turnover implies over-investment in inventories, dull
business and so on.
Debtor Turnover Ratio
Debtor turnover ratio indicates the velocity of debt collection of firm. In simple words,
it indicates the number of times average debtors (Receivables) are turned over during
the year. Generally, the higher the value of debtor’s turnover the more efficient is the
management of debtors or more liquid are the debtors and vice versa. An increase in the
period will result in greater blockage of funds in debtors. A longer collection period
implies too liberal and inefficient credit collection performance.
Creditor Turnover Ratio

The creditor’s turnover ratio indicates the speed with which the payments for credit
purchases are made to the creditors. It indicates the promptness or otherwise in making
payment of credit purchases. A higher ‘creditors turnover ratio’ or a ‘lower credit
period enjoyed ratio’ signifies that the creditors are being paid promptly, thus
enhancing the credit worthiness of the company. However a very favorable ratio to this
effect also shows that the business is not taking full advantage of credit facilities, which
can be allowed by creditors.
Working Capital Turnover Ratio

Working capital turnover ratio indicates the velocity of the utilization of net working
capital. This ratio indicates the number of times the working capital is turned over in
the course of a year. This measures the efficiency with which the working capital is
being utilized by a firm.
If a firm makes higher volume of sales with relatively small amount of working capital,
it is an indicator of the operating efficiency of the company.
Fixed Assets Turnover Ratio

The fixed assets turnover ratio underlines the relationship between a company sales and
fixed assets. This ratio measures sales per rupee of investment in fixed assets.

Current Assets Turnover Ratio

The current assets turnover ratio underlines the relationship between a company sales
and current assets.
Total Assets Turnover Ratio

The total assets turnover ratios underline the relationship between a company sales and
total assets.
III. Profitability Ratios

Primary objective of a business undertaking is to earn profits. Profit earning is
considered essential for the survival of the business. A business needs profits not
only for survival but also for expansion and diversification. Profitability ratios are
calculated either in relation to sales or in relation to investment. The various types
of profitability ratios are:
a. Gross Profit Ratio
b. Net Profit Ratio
c. Return on Shareholders’ Investment
d. Return on Equity
e. Return on Assets
f. Return on Capital Employed
Gross Profit Ratio

Gross profit ratio measures the relationship of gross profit to net sales and is usually
represented as a percentage. Thus, it is calculated by dividing the gross profit by sales.
Net Profit Ratio

Net profit ratio establishes a relationship between net profit (after tax) and sales, and
indicates the efficiency of the management in manufacturing, selling, administration
and other activities of the firm.

Return on Shareholders’ Investment

Return on shareholders’ investment is popularly known as return on investment is the
relationship between net profits and shareholders fund. It determines whether the
investments in the firm are attractive or not as the investors would like to invest only
where the return is higher.
Return on equity
Return on equity capital is the relationship between profits of the company and its
equity capital. Ordinary shareholders are more interested in the profitability of a
company and the performance of a company should be judged on the basis of return on
equity capital of the company.
Return on Capital Employed

Return on capital employed establishes the relationship between profits and the capital
employed. It is the primary ratio and most widely used to measure the overall
profitability and efficiency of a business.
Leverage Ratios or Solvency Ratios

The term ‘Solvency’ refers to the ability of a concern to meet its long term obligations.
The long term indebtedness of a firm includes debenture holders, financial institutions
providing medium and long-term loans and other creditors selling goods on installment
basis. Long term solvency ratios indicate a firm’s ability to meet the fixed interest and
costs and repayment schedules with its long term borrowings. The various types of
solvency ratios are:
a. Debt –equity Ratio
b. Debt-assets Ratio
c. Proprietary Ratio
d. Fixed assets to net worth
e. Current assets to net worth
f. Sales to net worth
g. Interest coverage Ratio

Debt-equity Ratio
Debt-equity ratio, also known as External-Internal Equity Ratio is calculated to
measure the relative claims of outsiders and the owners against the firm’s assets. This
ratio indicates the relationship between the external equities or the outsider’s funds and
the internal equities or the shareholders’ funds.
Proprietary Ratio
Proprietary ratio is also known as equity ratio or shareholders to total equities ratio.
This ratio establishes the relationship between shareholders funds to total assets of the
firm. It is important ratio for determining the solvency of a firm. Higher the ratio better
is the long-term solvency position of the company.
Fixed Assets to Net Worth

The ratio establishes the relationship between fixed assets and shareholder’s funds, i.e.
share capital plus reserves, surplus and retained earnings. It indicates the extent to
which shareholders funds are sunk into the fixed assets.
Current Assets to Net worth

The ratio establishes the relationship between current assets and shareholder’s funds,
i.e. share capital plus reserves, surplus and retained earnings.
Interest Coverage Ratio

This ratio is calculated by dividing the net profit before interest and taxes by fixed
interest charges. It indicates the number of times interest is covered by the profits
available to pay the interest charges. Long term creditors of a firm are interested in
knowing the firm’s ability to pay interest on their long-term borrowing.
Comparative Financial Statement

The Comparative financial statements are statements of the financial position at
different periods of time. The elements of financial position are shown in a comparative
form so as to give an idea of financial position at two or more periods. Any statements
prepared in a comparative form will be covered in comparative statements. From
practical point of view, generally, two financial statements are prepared in comparative
form for financial analysis purpose.

The comparative statements may show:

a. Absolute figures.
b. Changes in absolute figures i.e. increase or decrease in absolute figures.
c. Absolute data in terms of percentages.
d. Increase or decrease in terms of percentage.
The two comparative financial statements are:
a. Comparative Balance Sheet
b. Comparative Income Statements
Comparative Balance Sheet

The comparative balance sheet analysis is the study of the trend of the same items,
group of items and computed items in two or more balance sheets of the same business
enterprise on different dates. The changes in periodical balance sheet items reflect the
conduct of a business. . The changes can be observed by comparison of the balance
sheet at the forming an opinion about the progress of an enterprise. The comparative
balance sheet has two columns for the data of original balance sheets. A third column is
used to show increases in figures. The fourth column may be added for giving
percentages of increases or decreases.
Comparative Income Statements
The income statement gives the results of the operation of a business. The comparative
income statement gives an idea of the progress of a business over a period of time. The
changes in absolute data in money values and percentages can be determined to analyze
the profitability of the business. Like comparative balance sheet, income statement also
has four columns. First two columns give figures of various items for two years. Third
and fourth columns are used to show increase or decreases in figures in absolute
amounts and percentages respectively.
Common Size Statements
The common-size statements i.e. balance sheet and income statement are shown in
analytical percentages. The figures are shown as percentages of total assets, total
liabilities and total sales. The total assets are taken as 100 and different assets are
expressed as a percentage of the total. Similarly, various liabilities are taken as a part of
total liabilities. These statements are also known as component percentage or 200

percent statements because every individual item is stated as a percentage of the total
100. The shortcomings in comparative statements and trend percentages where changes
in items could not be compared with the totals have been covered up. The analyst is
able to assess the figures in relation to total values.
The common-size statements may be prepared in the following way:
 The totals of assets or liabilities are taken as 100.

 The individual assets are expressed as a percentage of total assets, i.e., 100 and
different liabilities are calculated in relation to total liabilities.
Common Size Balance Sheet
A statement in which balance sheet items are expressed as the ratio of each asset to
total assets and the ratio of each liability is expressed as a ratio of total liabilities is
called common-size balance sheet.
Common Size Income statements:
The items in income statement can be shown as percentages of sales to show the
relation of each item to sales. A significant relationship can be established between
items of income statement and volume of sales. The increase in sales will certainly
increases selling expenses and not administrative or financial expenses. In case the
volume of sales increases to a considerable extent, administrative and financial
expenses may go up. In case the sales are declining, the selling expenses should be
reduced at once. So, a relationship is established between sales and other items in
income statement and this relationship is helpful in evaluating operational activities of
the enterprise.
Trend Analysis:
The financial statement may be analyzed by computing trends of series of information.

This method determines the direction upwards or downwards and involves the
computation of the percentage relationship that each statement item bears to the same
item in the base year. The information for a number of years is taken up and one year,
generally the first year, is taken as a base year. The figures of the base are taken as 100
and trend ratios for other years are calculated on the basis of base year.

1a1. STATEMENT OF PROBLEM/NEED OF THE STUDY:- :
Evaluation of the financial statement of any industry is very important as the success of
the industry mainly depends on its effective performance to understand the general
direction in which the company is moving and the steps is taken to correct the
deviations against the set standards is of supreme importance. Whenever we analyze the
financial statements i.e the income statement and balance sheet it is very difficult to
analysis the complete picture of financial statement.
Thus. “A Study On An Analysis Of Financial Statement By Using The Technique of

Ratio Analysis” in order to give a better scope to the investors, shareholders, creditors
and the management themselves about rating of Dynamitic technologies limited and its
performance in the market.
1a2. OBJECTIVES OF THE PROJECT:
 To study the liquidity and profitability of DTL, Bangalore.

 To study the factor affecting the operating performance of DTL,
Bangalore.
 To analyze the turnover efficiency of DTL, Bangalore.
 To study the efficiency of the company, in utilizing the financial resource.
1a3. SCOPE OF THE STUDY:
Scope of the study in general terms means the extent to which it is possible to cover the
subject. This study attempts to cover some of the tools and techniques for the purpose
of evaluating the comparative statement analysis at Dynamatic Technologies Limited.
However the following areas are covered:
 Various ratios of different categories like liquidity ratios, Turn over ratios,
Profitability ratios, and leverage ratios are calculated to know the financial
soundness of the company.

 Trend analysis is done to know the performance of the company over a number
of years. This study trend is calculated for a period of 6 years from 2005-06 to
2010-11.
 Comparative statements and Common size statements are prepared to know the
financial position of the company.
1a 4. METHODOLOGY:
Type of study
Analytical study
SOURCES OF DATA:
As the data is related to analysis and interpretation of financial performance there was
no need for the collection of structured data. For collected from various sours they are,
1. Primary data:
It was collected mainly with the interactions and discussions with company’s
executives.
2. Secondary data
 Annual reports and financial statements of the company like (balance sheet and
profit and loss account)
 Various publications and manuals of Dynamatic Technologies Limited
 Company websites.
Tools of analysis
Ratio Analysis is the tool used for analyzing the financial reports.
1a5. LIMITATIONS OF THE STUDY:
The efforts have been made to study completely and as exhaustively as possible.
However the following problems were faced during the study is as follows:
 Figures for the analysis are taken from the annual reports.

 The study is limited only for 6 years hence broad generalization about the
company is not be possible.
 The study is based on the data given by the officials and reports of the company
and assumed to be true..
 The ratios are generally calculated from past financial statement so they are not
the indicators of future.

1.b. ANALYSIS OF DATA AND FINDINGS OF THE STUDY
INTRODUCTION
The analysis and interpretation of financial statements is used to determine the financial
position and results of operations as well. A number of methods are used to study the
relationship different statements. An effort is made to use those devices which clearly
analyze are generally used.
 RATIO ANALYSIS
This is the most important tool available to financial analyst for team work. It shows
the relationship between accounting figures. The figures have to be interrelated. Eg:
Profit and sales, current assets and current liabilities) because no useful purpose will be
served it ratio’s are calculated between two figures, which are not at all related to each
other. (Example: sales and discount o issue and debentures).
 Analysis of the liquidity position of the company

o Liquidity Ratio
It refers to the ability of the firm to meet its current liabilities. The liquidity ratio,
therefore, are also called ‘Short-term Solvency Ratio’.
These ratio include the following ratios:
a. Current Ratio
b. Quick Ratio or Acid Test Ratio
c. Cash Ratio
 CURRENT RATIO:
Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio, also known as working capital ratio, is a measure of general
liquidity and is most widely used to make the analysis of a short-term financial position
or liquidity of a firm. It is calculated by dividing the total of current assets by total of
the current liabilities.

CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITIES
Table:-2 (Rs in Crores)
Year Current assets Current liabilities Current ratio

2005-06 56.74 37.46 1.80
2006-07 62.30 39.06 1.59
2007-08 125.75 75.57 1.66
2008-09 153.80 74.24 2.07
2009-10 150.52 73.42 2.05
2010-11 203.62 10.20 1.99
Sources: Computed from balance sheet for the year 2005-11
current ratio
2.5
2.07 2.05 1.99
2 1.8
1.59 1.66
1.5
current ratio
1
0.5
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Graph: 2
Analysis and Interpretation
A company with reasonable financial health must have a current ratio > 1 and a
company with poor financial health will have a current ratio of < 1.
According to current ratio data, DTL plant achieves highest current ratio in 2008-09
with 2.07 and the in 2006-07 with lowest current ratio 1.59.

The firm is having more current assets than the current liabilities. So it is in good
position maintaining twice the current liabilities. So the company is utilizing its current
assets effectively.
CASH RATIO:
Cash ratio is perhaps the most stringent measure of liquidity because cash and bank
balances and short-term marketable securities are the most liquid assets of a firm. The
ideal ratio for absolute liquid ratios is 0.5:1
CASH RATIO = CASH & BANK + SHORT TERM MAKETABLE
SECURITIES/CURRENT LIABILITIES
Table 3 (Rs in Crores)

YEAR CASH & BANK CURRENT CASH RATIO
LIABILITIES
2005-06 1.77 31.46 0.05
2006-07 1.69 39.06 0.04
2007-08 5.29 75.57 0.07
2008-09 7.30 74.24 0.09
2009-10 5.26 73.42 0.07
2010-11 7.01 10.20 0.06
Source: Computed from balance sheet for the year 2005-11
Cash Ratio
0.1 0.09
0.08 0.07 0.07

0.06
0.06 0.05
RATIO
0.04
0.04
0.02
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph 3

According to cash ratio data, DTL has achieved Its highest cash ratio , 0.09 in the year
2008-09 and the lowest, 0.04 in the year 2006-07
The cash ratio of the company is less than the ideal ratio of 1:1, so the company’s
liquidity position is not satisfied because the company maintaining cash and bank
balance is not sufficient to meet emergency consequences. Hence the cash ratio of the
company is fluctuating year to year.
QUICK RATIO
Quick ratio is a fairly stringent measure of liquidity than the current ratio. It is
based on those current assets which are highly liquid i.e. inventories are excluded
from the current assets of this ratio because inventories are deemed to be least
liquid component of current assets. It establishes a relationship between quick
assets and current liabilities.
QUICK RATIO = LIQUID ASSETS/CURRENT LIABILITIES
Table:4 (Rs in Crores)
Year Liquid assets Current liabilities Quick ratio
2005-06 41.24 31.46 1.31
2006-07 45.97 39.06 1.17
2007-08 91.77 75.57 1.21
2008-09 116.35 74.24 1.56
2009-10 107.93 73.42 1.47
2010-11 146.42 10.20 1.43
Source: Computed from balance sheet for the year 2005-11

QUICK RATIO
2 1.56 1.47 1.43

1.31 1.21
1.5 1.17
RATIO
0.5
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph 4
From the above table it can be analyzed that the company achives its highest quick
ratio 1.56 in 2008-09 and lowest, 1.17 in 2006-07
The ideal liquid ratio is supposed to be 1:1 i.e. liquid assets must be equal to the current
liabilities. The company is having more liquid assets than current liabilities, it is more
than 1:1, it shows a better financial position.
To Identify the Factors Affecting the Finance and Operational Performance
NET PROFIT MARGIN:
Net profit ratio establishes a relationship between net profit (after tax) and sales,
and indicates the efficiency of the management in manufacturing, selling,
administration and other activities of the firm.
NET PROFIT RATIO = PROFIT AFTER TAX / SALES

Table:- 5 (Rs in Crores)
YEAR PAT NET SALES N.P RATIO
2005-06 8.70 92.56 0.09
2006-07 9.99 111.03 0.08
2007-08 18.58 273.84 0.06
2008-09 4.87 296.38 0.01
2009-10 10.82 297.73 0.03
2010-11 14.84 354.29 0.04
Source: Computed from P&L A/c for the year 2005-11

NET PROFIT RATIO
0.1 0.09
0.08
0.08
RATIO 0.06
0.06
0.04
0.04 0.03
0.02 0.01
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph:- 5
From the above table it can be analyzed that the company achieves its highest net
profit ratio 0.09 in 2005-06 and lowest, 1.01 in 2008-09
When company has high net profit margin then it means that it has one or more
advantages over its competition to improve that market share during the hard time.
According to net profit ratio data, DTL has a achieved 0.04 in the 2010-11. Its highest
net profit ratio was 0.09 in 2005-06 and lowest net profit ratio 0.01 in 2008-09. The net
profit ratio of the company is very low. Only 0.03 percent of the sales is the net profit.
RETURN ON EQUITY:
Return on equity capital is the relationship between profits of the company and its
equity capital. Ordinary shareholders are more interested in the profitability of a
company and the performance of a company should be judged on the basis of return on
equity capital of the company.

RETURN ON EQUITY = NET PROFIT/EQUITY
Year Net profit Equity Return on equity

2005-06 8.70 4.19 2.07
2006-07 9.99 4.19 2.38
2007-08 18.58 4.81 3.86
2008-09 4.81 5.41 0.90
2009-10 10.82 5.41 2.00
2010-11 14.84 5.41 2.74
Source: Computed from balance sheet & P&L A/c for the year 2005-11
RETURN ON EQUITY
3.86
4
3.5
2.74
3
2.38
2.5 2.07 2
RATIO
2
1.5 0.9
1
0.5
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph 6
From the above table it can be analyzed that the company achieves its highest return on
equity 3.86 in 2007-08 and lowest, 0.9 in 2008-09

The company retune on equity is not satisfactory because it is not attracting more
investments there fore the dividend payable by the form in varying.
FIXED ASSETS TURN OVER RATIO:
It is calculated to measure the adequacy or otherwise of investment in fixed assets. It

4.48indicates how well the business is using its fixed assets to generate sales. Higher
the ratio the better. Because higher ratio indicates the business less money is tied up in
fixed assets
FIXED ASSETS TURN OVER RATIO = SALES/FIXED ASSETS
Year Net sales F.A F.A T.O Ratio

2005-06 92.56 29.22 3.16
2006-07 111.03 38.00 2.92
2007-08 273.84 145.29 1.88
2008-09 296.38 200.19 1.48
2009-10 297.73 218.33 1.36
2010-11 354.29 261.20 1.35
FIXED ASSETS TURN OVER RATIO
3.16
3.5 2.92
3
2.5 1.88
RATIO
2 1.48 1.36 1.35

1.5
1
0.5
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Source: Computed from balance sheet, P&L A/c for the year 2005-11
Graph 7
The higher the fixed assets turnover ratio, the company’s investment in net property
plant and equipment will become more effective.

From the above table it can be analyzed that the company achieves its highest turn over
ratio 3.16 in 2005-06 and lowest, 1.35 in 2010-11
The company is not utilizing its fixed assets to the fullest extent, so it has to put all
the assets into effective usage.
 To find the efficiency of the company in utilizing its financial resources
 INTEREST COVERAGE RATIO:
This ratio is calculated by dividing the net profit before interest and taxes by fixed
interest charges. It indicates the number of times interest is covered by the profits
available to pay the interest charges. Long term creditors of a firm are interested in
knowing the firm’s ability to pay interest on their long-term borrowing.
INTEREST COVERAGE RATIO = EBIT/INTEREST
Table:8 (Rs in Crores)
Year EBIT Interest Interest coverage
ratio
2005-06 16.8 4.02 4.17
2006-07 19.04 4.45 4.27
2007-08 40.26 10.32 3.90
2008-09 28.28 17.70 1.63
2009-10 35.35 21.43 1.64
2010-11 39.62 24.05 1.65
Source: Computed from Profit and loss account for the year 2005-11
INTEREST COVERAGE RATIO
5 4.17 4.27
3.9
4
3
1.63 1.64 1.65 RATIO
2
1
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Graph 8

From the above table it can be analyzed that the company achieves its highest interest
coverage ratio 4.27 in 2006-07 and lowest, 1.63 in 2008-09
The interest coverage ratio shows whether a company is earning enough profit before
interest and tax to pay its interest cost comfortably. Compared to the previous years the
company’s earnings are increasing which is enough to cover the interest charges of the
firm. Therefore creditors of the firm are secured.
 INVENTORY TURN OVER RATIO:

Inventory turnover ratios indicate the number of times inventory is replaced during the
year. It measures the velocity of conversion of stock into sales. Usually, a high
inventory turnover indicates efficient management of inventory because more
frequently the stocks are sold; the lesser amount of money is required to finance the
inventory. A low inventory turnover implies over-investment in inventories, dull
business and so on.
INVENTORY TURN OVER RATIO = SALES/INVENTORY
Year Net Sales Inventory Inventory T.O
Ratio
2005-06 92.56 15.50 5.97
2006-07 111.03 16.33 6.79
2007-08 273.84 33.98 8.05
2008-09 296.38 37.45 7.91
2009-10 297.73 42.59 6.99
2010-11 354.29 57.20 6.19

INVENTORY TURN OVER RATIO
10 8.05 7.91
8 6.79 6.99
5.97 6.19
6
RATIO
4
2
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph 9
From the above table it can be analyzed that the company achieves its highest
inventory turn over ratio 8.05 in 2007-08 and lowest, 5.79 in 2005-06
The higher the turnover ratio is good for the firm, but several expect of inventory
holding policy should The company is efficient enough in converting the stock into
cash. It is not maintaining heavy stocks. There is a sound liquidity position and quality
of goods is maintained.
 DEBTORS TURN OVER RATIO:
management of debtors or more liquid are the debtors and vice versa. An increase in the
period will result in greater blockage of funds in debtors. A longer collection period
implies too liberal and inefficient credit collection performance.
DEBTORS TURN OVER RATIO = CREDIT SALES/DEBTORS


Year Net sales Debtors Debtors T.O Ratio
2005-06 92.56 28.83 3.21
2006-07 111.03 33.94 3.27
2007-08 273.84 63.15 4.33
2008-09 296.38 72.43 4.09
2009-10 297.73 66.42 4.48
2010-11 354.29 86.82 4.08
DEBTORS TURN OVER RATIO
5 4.33 4.48
4.09 4.08
4 3.27
3.21
3
RATIO
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph 10
From the above table it can be analyzed that the company achieves its highest debtors
turn over ratio 4.48 in 2009-10 and lowest, 3.21 in 2005-06
A high ratio implies that a collection of accounts receivables is efficient. A low ratio
implies that the company should reassess its credit policy in order to ensure the timely
collection of credit that is not earning the interest for the firm.The Company is
following good credit collection pattern. So it indicates more efficient collection of
debts and more liquidity of debts.

 CASH TURN OVER RATIO:
The cash Turnover ratio is the ratio between cash and sales. Cash for this purpose,
means cash in hand, cash at bank and readily realizable investment or securities. This
ratio indicates the extent to which the company efficiently utilizes cash resources. It is
also helpful in determining the liquidity of the company.
CASH TURN OVER RATIO = NET SALES / CASH

Year Net sales Cash Cash turn over
ratio
2005-06 92.56 1.77 52.29
2006-07 111.03 1.69 65.69
2007-08 273.84 5.29 51.76
2008-09 296.38 7.30 40.6
2009-10 297.73 5.26 56.60
2010-11 354.29 7.01 50.54
source: Computed from balance sheet, P&L A/c for the year 2005-11
CASH TURN OVER RATIO

65.69
70
56.6
60 52.29 51.76 50.54
50 40.6
RATIO
40
30
20
10
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph 11

The standard cash turnover ratio is 10: 1 or more indicates the effective utilization
of cash resource of the company. According to cash turnover ratio data, DTL plant
achieves 56.6 in 2009-10. Its highest cash turnover ratio was 65.69 in 2006-07 and
the lowest is 40.6 in 2009-10. For the past five fiscal years, as shown in the table
the ratios are not varying from the standards, the changes has taken place slightly
which indicates the better position of the company.
 To Provide the Report Of Assets, Liabilities And Equity Which Are

Directly Related To An Organization Financial Position
 PROPRIETARY RATIO:
Proprietary ratio is also known as equity ratio or shareholders to total equities ratio.
This ratio establishes the relationship between shareholders funds to total assets of the
firm. It is important ratio for determining the solvency of a firm. Higher the ratio better
is the long-ter m solvency position of the company
PROPRIETARY RATIO = SHARE HOLDERS FUND/TOTAL ASSETS
PROPRIETARY
YEAR SHAREHOLDERS FUND TOTAL ASSETS
RATIO
2005-06 26.29 101.36 0.25
2006-07 33.79 130.06 0.25
2007-08 65.91 296.13 0.22
2008-09 134.88 435.14 0.30
2009-10 146.06 428.28 0.34
2010-11 166.17 433.22 0.38
Source:- Computed From Balance Sheet Of 2005-11

PROPRIETARY RATIO
0.38
0.4 0.34
0.3
0.3 0.25 0.25
0.22
RATIO
0.2
0.1
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph:-12
From the above table it can be analyzed that the company achieves its proprietary ratio
0.38 in 2010-11 and lowest, 0.22 in 2007-08
 NET WORKING CAPITAL RATIO:
It is a financial metric of business owner can use in order to help measure the cash and
operating liquidity position of the resource firm.
NET WORKING CAPITAL RATIO = NET WORKING CAPITAL/NET ASSETS
Table : 13 (Rs in Crores)
YEAR NET W.CAPITAL NET ASSETS NET W.C RATIO

2005-06 25.58 101.36 0.25
2006-07 23.24 130.06 0.17
2007-08 50.18 296.13 0.16
2008-09 79.56 435.14 0.18
2009-10 77.10 428.28 0.18
2010-11 78.20 411.57 0.19

NET WORKING CAPITAL RATIO

0.25
0.25
0.18 0.18 0.19
0.2 0.17 0.16
RATIO
0.15
0.1
0.05
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
YEAR
Graph: 13
From the above table it can be analyzed that the company achieves its highest net
working capital ratio 0.25 in 2005-06 and lowest, 0.16 in 2007-08
A positive net working capital means that the company is able to pay off its short-term
liabilities and negative working capital ratio means that the company is currently
unable to meet its short-term liabilities.
The cash conversion cycle of the firm is low in 2009-10 compared to previous years, it
is essentially cash needed to run the business
 DEBT - EQUITY RATIO:
management of debtors or more liquid are the debtors and vice versa.
DEBT – EQUITY RATIO =LOAN CAPITAL +PREFERENCE SHARE

CAPITAL/NET TANGIBLEASSETS

Table.14 (Rs in Crores)
Year Loan capital Net tangible Debt equity ratio

assets
2005-06 39.91 69.9 0.57
2006-07 51.70 91.00 0.56
2007-08 139.87 220.56 0.63
2008-09 205.04 360.9 0.52
2009-10 185.71 354.86 0.52
2010-11 253.59 466.11 0.54
DEBT EQUITY RATIO
0.7
0.6
0.5
0.4
ratio
0.63
0.3 0.57 0.56 0.54
0.52 0.52
0.2
0.1
0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
From the above table it can be analyzed that the company achieves its highest debt
equity ratio 0.63 in 2007-08 and lowest, 0.52 in 2008-09
A debt equity ratio over 100% indicates a highly geared company and any prudent
leader will not be able to extend loan finance to such business.
The company is using more of the outsider’s funds to invest in the assets of the firm

1.c FINDINGS
From the following ratios calculated the following findings are noted
It has been found by the analysis at financial statement of Dynamatic technologies

limited for the years 2005-06- to 2010-11 by using one of the tools of financial analysis
that is ratio analysis which leads to the following conclusions
 The current ratio in 2005-06 was satisfactory and next 2 years 2006-07 to 2007-08
decreased, in 2008-09 it again increased to 2.07 and in 2010-11there is a slight
decreased to 2.05 which is an indication that there is a slight difference in current
liabilities.
 The quick ratio of the company is meeting its standard level which indicates that
company is investing less in inventories.
 Proprietary ratio indicates good solvency position as it has invested more capital
and fixed assets and has sound financial position.
 The company’s net working capital ratio in 2005-06 was 0.25. the company’s net
working capital has shown a slight variation from 2006-07 to 2010-11. The net
working capital in 2005-06 shows the soundness of the company whereas the
working capital of remaining period were relatively less than that of 2005-06
 Inventory turnover ratio of DTL is efficient enough in converting the stock into
cash
 According to debtors turnover ratio, a high ratio implies that collection of A/c’s
receivable is efficient and finding DTL plant has achieved 4.48 in the year 2010-11

1.cCONCLUSION
A Financial Performance Analysis of any company is very important which shows the
Performance, Efficiency and Effectiveness of the company, Efficiency is nothing but
doing things Rite, but Effectiveness is imparting and performing of Rite things. It helps
growth and prosperity of any organization, and also growth of the share holders, and
employees of the company.
From the study considered by we A STUDY ON AN ANALYSIS OF FINANCIAL

STATEMENT BY USING THE TECHNIQUE OF RATIO ANALYSIS AT DTL,
BANGALORE. Come know the performance of D T L. then way of classification of
cost. Come to know the risk taken by DTL both financial & technically by calculating
the financial performance of dynamitic technologies limited from last 6 year. The firm
is having more current assets than the current liabilities. So it is in good position
maintaining twice the current liabilities. So the company is utilizing its current assets
effectively.
The quick ratio of the company is meeting its standard level which indicates that
company is investing less in inventories. And Proprietary ratio indicates good solvency
position as it has invested more capital and fixed assets and has sound financial
position.
The net working capital in shows the soundness of the company where as the working
capital of remaining period were relatively less than that of previous year and Inventory
turnover ratio of DTL is efficient enough in converting the stock into cash.
According to debtors turnover ratio, a high ratio implies that collection of A/c’s
receivable is efficient and finding DTL plant has achieved current year.
.Considering the above analysis are done at Dynamatic Technology Ltd. It can be
observed that wealth of the company is satisfactory in the current year 2011

1.d SUGGESTIONS
 Sales have to be increased to carry out the company in a good position.

 Company has to reduce overstocking which helps to manage the inventories.
 Shareholders have to invest more into the assets to earn profit
 Performance and effectiveness of the firm are not satisfactory due to
ineffective working capital management, and it should be managed
effectively.
 Company has to take suggestions and feedback from the employees, which
can be implemented when investment and purchase of assets take place
 Management has to take care of proper allocation of funds for machineries
and raw materials for production
 Company has to reduce the cost of managing the thing, which includes
production and other expenditure, which helps to retain the more profit.
 Management has to make proper investment, which helps in making profit
 It is highly essential to invest more in fixed assets. By doing so, profitability
could be improved without affecting the liquidity of the company.
 The company is required to improve the financial position efficiency by
adopting the following measures:
 Expenditure should be controlled.
 The amount of net profit should be raised.
 Operating cost should be reduced.

1.e BIBLIOGRAPHY
Books:
1. CHANDRA, PRASSANNA, (2008), Financial Management. 7th edition, Tata

McGraw- Hill, New Delhi,
2. M.Y.KHAN. (2006), Financial Management. 4th edition, Tata McGraw-Hill, New

Delhi.
3. PANDAY. I.M. (2005), Ratio Analysis (Financial Management, Ratio Analysis,

Financial Analysis), Financial Management. 9th edition, Vikas Publishing House Pvt
Ltd, New Delhi.
Annual Reports:
 Annual Report of Dynamatic Technologies Ltd; for the year 2005-06

 Broachers of Dynamatic Technologies Ltd
Websites
 www.dynamatictechnologies.com
 http://en.wikipedia.org/wiki/dtl

ANNEXTURE
5.a Profit & Loss
 (Rs in Crores)
INCOME 31/3/2011 31/3/2010
Sale of manufactured products 34,10,250 30,60,557
Less: Excise duty 3,04,843 2,29,534
Sale of manufactured products, Net 31,05,407 28,31,023
Income from project execution service 4,36,558 1,42,379
Service income 1,022 3,825
Other income 61,615 49,751
36,04,602 30,26,978
EXPENDITURE
Cost of materials consumed 19,05,118 16,39,690
Personnel expenses 5,19,104 4,04,034
Other operating expenses 5,18,194 4,43,908
29,42,416 24,87,632
EBITDA 6,62,186 5,39,346
Depreciation 2,04,065 1,85,63
Interest and finance charges 2,40,543 2,14,265
PROFIT BEFORE TAXATION 2,17,578 1,39,418
Provision for tax
------- current tax 44,170 21,817
-------Minimum alternate tax credit entitlement (6,432) (11,928)
-------deferred tax charge 31,076 21,126
-----wealth tax 343 229
PROFIT AFTER TAX 1,48,421 1,08,174
Balance brought forward from previous year 3,32,483 2,82,638
Amount available for appropriation 4,80,904 3,90,812
--interim dividend 32,488 24,366

--proposed dividend 21,659 16,244
---tax on dividend 8,909 6,901
Transferred to general reserve 14,842 10,818
Balance carried forward 4,03,006 3,32,483

4,80,904 3,90,812
Earning per share(E P S) (Equity share per value 27.41 19.98
Rs 10 each)


5. b Balance Sheet
(RsinCrores)
SOURCES OF FUNDS As on 31/3/2011 As on 31/3/2010
Shareholders funds
Share capital 54,147 54,147
Reserves and surplus 16,61,748 14,06,538
LONS FUND
Secured loans 24,52,440 17,37,888
Unsecured loans 2,30,844 1,19,232
Deferred tax liability, net 2,61,977 2,30,901
46,61,156 35,48,706
APPLICATION OF FUNDS
Fixed assets
Gross block 38,77,018 32,45,297
Less: Accumulated depreciation 12,64,967 10,62,007
Net block 26,12,051 21,83,290

Capital work-in-progress 5,08,933 84,382
31,20,984 22,67,672
Investments 5,24,357 5,09,857
CURRENT ASSETS,LOANS AND
ADVANVCES
Inventories 5,72,013 4,25,880

Sundry debtors 8,68,251 6,64,174
Cash and bank balances 70,109 52,594
Other current assets 71,601 37,857
Loans and advances 4,54,295 3,24,736

2,036,269 1,505,241
CURRENT LIABILITIES AND 9,59,226 6,98,769
PROVISIONS
Current liabilities 61,228 35,295

Provisions 10,20,454 7,34,064
10,15,815 7,71,177
Net Current assets 46,61,156 35,48,706

Industry Profile: Chapter - 1

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AN ANALYSIS OF FINANCIAL STATEMENT BY USING THE TECHNIQUE OF RATIO ANALYSIS AT DTL

1. a INTRODUCTION OF MANUFACTURING INDUSTRY:

MANUFACTURING IS the organized activity devoted to the transformation of raw

1.b. KEY POINTS OF INDIAN MANUFACTURING SECTOR.

DEPT. OF MBA, AIT, CHICKMAGALUR Page 1

1.c GLOBAL MANUFACTURING INDUSTRY:

With the implementation of the concept of eco friendly environment , world

 1.d MANUFACTURING INDUSTRY IN INDIA:

DEPT. OF MBA, AIT, CHICKMAGALUR Page 2

to stupendous growth of global manufacturing networks, designed to take advantage of

‘Indian manufacturing’ sector is broadly divided into:-

 Capital Goods & Engineering.

Indian Manufacturing Industry is successfully competing in the global marketplace and

GDP’s share of manufacturing industry in India as grown from 25.38% in 1991 to

DEPT. OF MBA, AIT, CHICKMAGALUR Page 3

1.e IMPORTANCE OF MANUFACTURING SECTOR IN INDIA’S ECONOMIC

DEPT. OF MBA, AIT, CHICKMAGALUR Page 4

2.a BACKGROUND AND INCEPTION

Name of the company: Dynamatic Technologies Limited.

Incorporated on: 8 th march 1973.

Present Chairman: Mr. J.K .Malhoutra.

Major product lines: Hydraulics Gear Pumps.

Employees are: 1021.

DTL company produce: 2800 varieties products.

DEPT. OF MBA, AIT, CHICKMAGALUR Page 5

2.b NATURE OF BUSINESS CARRIED:

Company is involved in transforming raw material in finished goods, which gets to

2.b 1.DYNAMATTC HYDROLICS:

2.b 2.DYNAMATIC AEROSPACE:-

Dynamitic Aerospace, a division of Dynamatic technologies ltd division of Dynamatic

DEPT. OF MBA, AIT, CHICKMAGALUR Page 6

DEPT. OF MBA, AIT, CHICKMAGALUR Page 7

DYNAMATIC RESEARCH AND DEVELOPMENT UNIT, BANGALORE:

DEPT. OF MBA, AIT, CHICKMAGALUR Page 8

2. c. VISION, MISSION AND QUALITY POLICY

 Develop products and technologies in line with national priorities

“To achieve GLOBAL LEADERSHIP through TOTAL CUSTOMER

 Aimed to develop diversified products

DEPT. OF MBA, AIT, CHICKMAGALUR Page 9

Dynamatic technology limited is involved in the design and manufacture of highly

 It is the policy to provide creative and innovative solutions to delight the

2. d. PRODUCT / SERVICE PROFILE:

 Earth moving Equipment

Apart from Gear pump, DTL also provides

DEPT. OF MBA, AIT, CHICKMAGALUR Page 10

2. d.1 A brief classification of the product range:

 Hydraulic gear motors, Hydraulic power packs

2.d.2 Automotive Components:

DEPT. OF MBA, AIT, CHICKMAGALUR Page 11

In June 2007, Dynamatic® acquired the manufacturing facilities of Sauer Danfoss

DEPT. OF MBA, AIT, CHICKMAGALUR Page 12

2.e. Areas of Operation:

Branch across INDIA

Around the Globe:

 Swindon, United Kingdom.

DEPT. OF MBA, AIT, CHICKMAGALUR Page 13

2.f. Ownership Pattern:

Share Holding Pattern in Percentage:

(As on 30 June 2011)

Corporate Bodies : 31.91%

Banks & Institutions: 0.01%

Mutual Funds : 0.98%

DEPT. OF MBA, AIT, CHICKMAGALUR Page 14