Project ODYSSIA New

1 RAPTURE INDIA FOOTCARE Co PVT Ltd
1.1 INTRODUCTION
Finance is defined as the provision of money at the time when it is required. Every enterprise
whether big, medium or small, need finance is so indispensable today that it is rightly said it
is life blood of an enterprise with out adequate finance, no enterprise can possibly accomplish
its objectives. A financial manager is a person who is responsible in a significant way to carry
out the finance function in modern enterprise the financial manager occupied a key position .
He plays a pivotal role in planning quantum and pattern of fund requirement procuring the
desired amount of fund allocating fund so pooled among profitable out let and controlling the
uses of funds.A well designed and implemented financial management is expected to
contribute positively to the creation of a firm’s value. Dilemma in financial management is to
achieve desired tradeoff between liquidity, solvency and profitability. Management of
working capital in term of liquidity and profitability management is essential for sound
financial recital as it has a direct impact on profitability of the company.
The crucial part in managing working capital is required in maintaining its liquidity
in day to day operation to ensure its smooth running and meets its obligation .ultimate goal of
profitability can be achieved by efficient use of resources. It is concerned with maximization
of shareholders or owners wealth. It can be attained through financial performance analysis
.financial performance mean firm overall financial health over a given period of time.
financial performance analysis is the process of the determining the operating and financial
characteristics of a firm from accounting and financial statements. The goal of such analysis
Is to determine the efficiency and performance of firm’s management, as reflected in the

financial records and reports. The analyst attempted to measure the firms liquidity ,
profitability and other indicators that the business is conducted in a rational and normal way;
ensuring enough returns to the shareholders to maintain at least its markets value.
JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

1.2 SIGINIFICANCE OF THE STUDY
Financial analysts often assess the firms liquidity, solvency , efficiency, profitability,
operating efficiency and financial stability in both short- term and long –term. Ratio analysis
provides relative measures of the company’s performance and can indicate clues to the
underlying financial position. For measuring financial position and financial efficiency ,
appropriate level of financial performance indicators are required with whom comparison can
be made. Generally liquid ratio, interest coverage ratio, inventory turnover ratio, return on
investment ratio and debt to net worth ratio are highly useful in determining financial
position, financial performance and ted financial stability or otherwise of such management .
In this study the odyssia foot wares is being selected to conducted a study on the
comprehensive financial performance, such as ratio analysis in term of liquidity ratio,
profitability ratio, leverage ratio and capital structure ratio.
The study of the ODYSSIA foot wares has been undertaken with certain objectives by
highlighting the unique features, functions and working as well as statutory regulations
governing of the company.
1.3 OBJECTIVE OF THE STUDY

The finance department of the odyssia foot wears foot ware company (pvt)LTD has an
important role in the continuous progress of the company. The board objective of the study
was to provide the financial performance with some new financial analysis tools so that they
could find the accuracy and different for timely decision making this important to improve
their performance and efficiency.
 To obtain a true insight into financial position of the company.

 To make comparative study of financial statement of different years.
 To draw the correct picture of the financial operations of the company in term
of liquidity, solvency, turnover, profitability etc.
 To find out the reason for unsatisfactory results.

1.4 LIMITATION OF THE STUDY
The ratios analysis is one of the most powerful tools of financial management. Though are
simple to calculate and easy to understand , they suffer from serious limitations.
 Limitations of financial statement

 Comparative study required
 Problems of price level changes
 Lack of adequate standard
 Limited use of single ratios
 Personal bias
 Incomparable
1.5 scope of the study
Financial analysis in an organization is a principal and central subsystem and it operates

upon and control all other subsystems. The need for financial analysis to run the day to day
business activities cannot be over emphasized. We know that the firm should first aim at
maximizing the wealth of its shareholder earning a steady amount of profit requires
successful sale activity .the firm has to invest enough fund, in current assets for generating
the sales.

1.6 RESEARCH METHODOLOGY
Meaning of research
Research in common parlance refers to a search for knowledge. the advanced learner’s
dictionary of current English lays down the meaning of research as “A careful investigation
or enquiry especially through search for facts in any branch ok knowledge”.
Definition;
According to woody,” research comprises and redefining problem formulating

hypothesis or suggested solution collecting organizing and evaluating, data making,
education and researching concessions to determine whether they fit the formulating
the hypothesis”
RESEARCH DESIGN:
A research designed is programmed which guides the investigator in the process of collecting
and analyzing interpreting the observation. It is needed to facilitate the smooth sailing of the
various research operations thereby making research as efficient as possible. A research
design is the blue print of the data collections measurements and analysis of data.
Analytical research design;
The research has adopted analytical in the present study. Analytical research is use facts or
information already available, and analyze these to make a critical evaluation of the problem
DATA COLLECTION
A) PRIMARY DATA
Primary data related to the project was collected from the discussion and interaction with
the senior employees and executives in the organization from accounts and finance
department.

A) SECONDARY DATA
Secondary data was collected from the document, which were in printed forms like
annual report, pamphlets, reference book based on the financial management and through
websites.
TOOLS USED FOR ANALYSIS
1) Ratio analysis
2) comparative balance sheet
3) common –size balance sheet
4) Trend analysis

2.1 Literature review & theoretical frame work
METCALF AND TITARD: “analysis of financial statement is a process of

evaluating the relationship between component part of a financial statement to obtain a better
understanding of a firms operation and performance.”
Myers:” financial statement analysis is largely a 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 these factors as shown in a series of statements.”
Dr r. k. sahu: in his articulate ,analysis of corporate profitability a multivariate approaches

mention that among all the techniques used in financial statement analysis, ratio analysis is
most power full tool of financial analysis. but there is no international profitability ratio in
itself does not different conclusion for the same firm. So the attempt ion to measure the
composite profitability of a firm by a single indeed thereby facilitating case of comparison
and ranking.
Dr abhiman dar: in his article title” profitability of public sector bank” analyzed
Different profitability ratio and formulate a profitability ratio and decomposition model. He
expressed profitability as a ratio of operation profit to working fund.
Mrs .m. jayalekshmi: in her research , the study on the financial statement analysis of
PRICOL diagnosed the financial position and the performance of premier instrument and
control limited company with the help of liquidity and solvency ratio and suggested to reduce
the amount locked excessively in the form of current assets.
FINANCIAL RATIO ANALYSIS
Ratio analysis is the process of determining and interpreting relationship between the
item of financial statement to provide a meaningful understanding of the performance and
financial position of an enterprise. Ratio analysis is an accounting tool to presenting
accounting variables in a simple, concise, intelligible and understandable form.

As per the “ratio analysis is a study of relationship among various financial factors in a
business” objective of financial ratio analysis the objective of ratio analysis is to judge the
earning capacity ,financial soundness and operating efficiency of a business organization . the
use of ratio in accounting and financial management analysis help the management to know
the profitability , financial position and operating efficiency of an enterprise.
Ratio analysis is an important and age -old technique. It is powerful tool of financial analysis
. It is defined as the indicated quotient of two mathematical expression and as the relationship
between two or more things .Systematic use of ratio to interpret the financial statement so
that the strength and weakness of a firm as well as its historical performance and current
financial condition can be determined.
A ratio is only comparison of the numerator with the denominator. The term
ratio refers to the numerical or quantitative relationship between two figures. Thus, ratio is
the relationship between two figures, and obtained by dividing the former by the latter. Ratios
are designed show how on numbers is related to another.
The data given in the financial statement are in absolute form, are dump, and are unable to
communicate anything . Ratios are relatives form of financial data and very useful technique
to check upon the efficiency of a firm. Some ratio indicates the trend, progress ,or downfall
of the firm.
Classification ratios
Classification of ratios
Based on financial Based on Based on

statement importance functions

a) Balance sheet ratios 1) primary ratio 1liquidity ratio

2) secondary ratio 2)leverage ratio
b) Profit &loss accounts ratio 3)activity ratio
c) Composite ratio 4)profitability ratios
5)market test ratios
1) based on financial statement
 Balance sheet ratios

The items used for the calculation of these ratios are taken out from the balance sheet,
eg...,current ratio, proprietary ratio, fixed assets ratio etc.
 Profit and loss account ratios

These establish relationship between two items in the profit and loss account e g, ...gross
profit ratio, operating profit ratio etc.
 Combined or mixed ratio

These ratios are calculated by taking out one item from the profit and loss account and other
from the balance sheet, e g......,stock turn over ratio, fixed asset turnover etc.
2) based on importance
 Primary ratios
Secondary ratios are mainly used to explain the primary ratios. The success of any business
is measured by the amount of profit earned . Therefore, ratios like profit to sales, return on
capital employed etc. Are treated as primary ratio.
 Secondary ratios : explain the primary ratio

3) based on functions
 Liquidity ratios

These ratios measures the capacity of a firm to meet its short term liability out of the short
term resource . Current ratio, quick ratio etc. Are examples
 Leverage ratios
These are also called capital structure ratio . These ratios analyses the long term solvency or
financial position of a firm. Debt-equity ratio. ,proprietary in this etc are calculated in this
category .
 Activity ratios
This ratio also called turn over ratios. These ratio indicate how effectively the resource are
being utilized by firm in other word, these ratio reflect the efficiency of a firm in the asset
management . Debt turn over ratio, fixed asset turnover ratio, stock turn over ratio
 Profitability ratios
These ratios measures the profitability or operating efficiency of a firm,for example. gross
profit ratio, operating ratio, investment etc.
 Market test ratio

This ratio are used for evaluating the shares and stock which are traded in the market .
Dividend per share....
ADVANTAGE OF THE ANALYSIS
The advantage derived by an enterprise by the use of accounting ratios are:
1) Useful in analysis of financial statement :
Bankers, investors, creditors , etc analysis balance sheet and profit and loss account by
means of ratios.
2) Useful in simplifying accounting figures:

Accounting ratio simplifies summarized and systematizes a long array of accounting

figures to make them understandable . in the words of biramn and dribin, “financial ratios are
useful because they summarize briefly the results of detailed and complicated computation”.
3)Useful in judging the operating efficiency of business:
Accounting ratio are also useful for diagnose sis of the financial health of the
enterprise. This is done by evaluating liquidity , solvency , profitability etc. such a evaluation
enables management to access financial requirement and the capability of various business
units.

3.1 COMPANY PROFILE
Name of the company Raptur India Footcare Pvt Ltd :(ODYSSIA GROUP)
Location :Perumanna ,Kozhikode
Email :hr –odyssia @ gamil.com
General manager :Sasidharan
Year of commencement :2006
Product :Foot wears
No of workers :400
Export of product :Centralized

Purchase of raw materials :Centralized purchasing by Kozhikode unit

3.2 ORGANIZATIONAL STRUCTURE
FIGURE :3.1
CHAIRMAN
MANAGING
DIRECTOR
PRODUCTION MARKETING FINANCE HUMAN

DEPARTMENT DEPARTMENT DEPARTMENT RESOURCE
DEPARTMENT
PRODUCTION MARKETING FINANCE H.R

DIRECTOR DIRECTOR MANAGER MANAGER
OPERATION MARKETING H.R EXECUTIVES

MANAGER MANAGER
PRODUCTION SUPERVISOR
MANAGER
SUPERVISOR WORKERS
WORKERS
Source: (company information)

3.3 INDUSTRY PROFILE
History of Footwear’s
Spanish cave drawing from more than 15000 years age shows humans with
animal skins or furs wrapped around their feet. The body of a well preserved “ice-man”
nearly 5000 years old wears leather foot coverings stuffing with straw. Shoes in some
form or another have been around for a very long time. The evolution of foot coverings
from the sandal to present day athletes shoes are marvels of engineering and continues
even today as we find new materials with which to cover our feet.
Has the shoes really changed that much though? We are in fact wearing sandals
the oldest crafted foot covering known to us. Many of the shoes we wear today can be
traced back to another era. The Cuban heels may have been named for the dance craze of
the 1920’s, but the shape can be seen long before that time. Platform soles, which are one
of the most recognizable features of footwear in 1970’s and 1990’s,were handed down to
us from the 16th century Chopin. Then, high sole were a necessity to keep the feet off the
dirty streets. Today, they are worn strictly for fashion’s sake. The pup lane with its
ridiculously long toes is not different from the wrinkle pickers worn in 1960’s.
If one can deduce, the basic shoe shapes have evolved only so much, it is
necessary to discover why this has happened. It is surely not due to a lack of imagination-
the color and materials of shoes today demonstrate that, looking at shoes from different
parts of the world, one can see undeniable similarities. While the Venetians were wearing
the “Chopin”, the Japanese balanced on high soled wooden shoes called “get”. Though the
shape is slightly different, the idea remains the same. The Venetians had no contact with
the Japanese, so it is not a case of imitation. Even the mystical Chinese practical of foot
binding has copied in our culture.
Some European women and men of the past bound their feet with tape and
squashed them into too-tight shoes. In fact, a survey from the early 1990’s reported that 88
% of women wear shoes that are too small.
As one examines footwear history, both in the west and in other parts of the
world, the similarities are apparent. Though the shoemaker of the past never would have

thought to pair a sandal with platform sole, our shoe fashions of today are for the most
part, modernized adaptations of past styles.
Overview of the Indian Footwear Industry
The footwear industry is a significant segment of the leather industry in

India. India ranks second among the footwear producing countries next to china. The
industry is labour intensive and is concentrated in the small and cottage industry sectors.
While leather shoes and uppers are concentrated in large scale units, the sandals and
chappals are produced in the house hold and cottage sector. India produces more of gents
footwear while the worlds major production is in ladies footwear, in case chappals and
sandals, use of non-leather material is prevalent in the domestic market.
The major production centers India are Chennai, Ranipet, Ambur in Tamil nadu ,Mumbai
in Maharashtra, Kanpur in UP, Jalandhar in Punjab, Agra and Delhi. The Indian footwear
industry is provided with institutional infrastructure support through premier institutions’
like Central Leather Research Institute, Chennai, Footwear Design And Development
institute, Noida, National Institute of Fashion Technology, New Delhi ,etc in the areas of
technological development, design and product development and human resource
development. The availability of abundant raw material base, large domestic market and
the Opportunity to cater to world markets makes India an attractive destination for
technology and Investments.
IMPORT
In 1999, the global import of footwear (leather and non-leather) in terms of value
was around US$ 43278 million, accounting a share of 63.42% in the total global import of
leather and leather products. Out of this, import of leather footwear alone accounted for
US$ 26379 million and non-leather footwear US$ 16899 million.
EXPORT
India’s export of Leather Footwear touched US$ 331 million in 1999-2000,

recording an increase of 3.29% over the preceding year. India thus holds a share of 1.25%
in the global import of leather footwear. The major markets for Indian Leather Footwear

are the U.K., the U.S.A., Germany, Italy, France and Russia. Nearly 71% of India‘s export
of Leather Footwear is to Germany, the U.S.A., the U.K and Italy.
In 1999-2000, export of leather footwear from India constituted 31% share of its
total export of leather and leather products. Nearly 33 million pairs of various types of
leather footwear were exported during the year, out of which shoes / boots constituted
90%.
The different types of leather footwear exported from India are dress shoes, casuals,
moccasins, sport shoes, horrachies, sandals, beallerinas, booties.
Present Scenario
Now-a-days footwear has become as absolute necessity rather than fashion for
civilized people. The demand for footwear is increasing day by day. Depending on the
purchasing power different classes of people use different type and quality of footwear.
The middle and lower level income group prefer low cost, durable, wear and tear resistant
footwear which can be used in all climatic condition. PU footwear emerges as the obvious
choice which satisfies the entire above requirement. The increasing popularity of PU
chappal in Kerala and other parts of the country is assuming good demand for the product
in future.
As a result of rapid economic development taking place in our country, increase

in population, increase in awareness of hygiene among the people and above all the
absolute and continuing necessity for footwear in general and PU chappal is bound to
increase considerably. PU chappal is an economic substitute for leather footwear. The
people in rural and urban area use PU chappal throughout the year, since it is suitable in
any type of terrain and weather condition.

COMPANY PROFILE
Opportunity Identification
Feroke is a place famous for footwear. This sector began with the PVC modeled
footwear here direct manufacturing of footwear was not done, instead the used footwear
were purchased and powdered , which was the main raw material for the footwear. In
India, Kerala is leading in the footwear industry. Initially PVC footwear entered into the
market, i.e. both upper and sole was made by PVC. Later lightweight Eva footwear
emerged. During this period, footwear was offered for the price ranging from 50 to 100.
Even though Kerala is well known for footwear, it has not tapped the entire
opportunity in a right way and none of the company has identified either a segment or a
target market nor did their focus include middle and the lower class people.
Thus ODYSSIA identified this opportunity to start a company by focusing middle class
people.
A Joint Effort – An Initiative
Footwear is a competitive sector as there are so many international brands as well

as other brands including unrecognized players focusing the low class people. The present
directors of ODYSSIA footwear wear initially independent players more specifically
competitors in the footwear industry but their brands were not much popular as the
competition was high and the customers had wide choice and highly branded products in
the market.
The independent players were the people (competitors) with the same mentality.
Thus those people with the same mentality joined together. They identified their need to
survive in the market and the importance of creating and building a brand image. Thus
“survival or existence” is the main factor that led them to unite together into a new high
quality venture with the sole motive of building a brand image and thereby widening the
market so that they can easily capture the entire market and thereby ensure their survival
and also market all their products under the license of this brand. Thus the Odyssia
branded footwear was born in the company rapture India Pvt. Ltd.

ODYSSIA GROUP
The company had achieved a prominent positioning the footwear market of India.
The main markets which are concentrated by the company are Kerala, Tamil Nadu and
Karnataka. The good quality and variety in models of ODYSSIA products help the
companies to face the market competition. The company has been able to maintain the
quality of the products by adopting Italian technology. The group is now looking for
further avenues in the field of footwear to stretch their hands.
ODYSSIA footwear is a renowned footwear division in south India with exclusive

Italian PU Technology dealing with a spectrum of footwear. The latest and cutting – edge
technology is based on Italian know-how and is used world – wide. The footwear is based
on high quality upper which can be used in all seasons with odorless and non fading
colors. ODYSSIA footwear is a famous footwear brand manufactured by a group of
companies
There are many associate units producing a single brand “ODYSSIA”. All the
units are situated in different parts of Calicut &Thrissur district. These units include:
 Rapture India Foot care Pvt. Ltd.(Perumanna , 17alicut)
 Rapture India Foot care Pvt. Ltd. (Athani , Trissur)
 Rapture India Foot care Pvt. Ltd. (Olavanna,Calicut )
 Soltek Polymers Pvt. Ltd.
 Polytek Footwear Pvt. Ltd.
 Fakco Polymers Pvt. Ltd.
 Teflon Plastics Pvt. Ltd.
 Hynix Elastomers Pvt. Ltd.
 Navakeralam Footwear Pvt. Ltd.
During the period new bloods with technical, commercial and practical
knowledge were inducted and now the group consist of 9 working directors and
have annual group turnover of Rs 75 cores. More than 700 employees are working
in this unit.

RAPTURE INDIA FOOTCARE Co Pvt Ltd
Rapture India Footcare Co Pvt Ltd was commenced in the year 2006. It is one of the
associate concerns of very renowned ODYSSIA group of companies. The chairman of
Rapture India Footcare Co Pvt Ltd is Mr. Sasidaran. The company situated in Perumanna,
Calicut, Kerala. The Company has been able to achieve a landmark in the field of footwear
through the continuous researches in footwear industry. The company manufactures
“ODYSSIA” brand footwear.
All affairs and day-to-day business administration of the firm is vested in the
hands of Board of Directors. They are in charge of various activities like Production,
Finance, Marketing and human resource. The Board is assisted by qualified administrative
staffs. Rapture India Foot care Co Pvt Ltd caters to extend its markets of Kerala,
Karnataka and Tamil Nadu. The company has started with its first export to U.A.E. The
company has a good market for their products in the country and abroad.
ODYSSIA has a high brand value in the minds of the Kerala because of the
quality and the affordable price of the product. The management gives high priority to the
quality of the product. The company the quality of the product through the continuous
quality checking in each and every stages of the production process
VISION & MISSION OF THE COMPANY
Vision
“…………..To International Heights”
Mission
ODYSSIA Group introduced first time in Kerala 100% pure Italian PU technology. Foot
wear manufacturing out of the best quality material using latest technology to last longer
which gives the highest comfort to users.
ODYSSIA produces footwear items first of its kind in Kerala with Italian technology. By
the use of best raw materials and craftsmanship the company produces high quality
footwear

ODYSSIA Group produced footwear at a international quality. They produce variety

model footwear at high quality. They are easy to wear in all season and are mode of the
unique comfort and satisfaction. ODYSSIA is offering value for money. They give
footwear for international quality.
The Brand Name – ODYSSIA
The name ODYSSIA was derived from a Greek word “odyssey”. Odysseus is probably
best known as the eponymous hero of the Odyssey. This epic describes his adventurous
journey as he tries to return home after the Trojan War and how he managed all the
hurdles throughout his journey which covered a decade.
Odysseus was one of the most influential Greek champions during the Trojan War. He
was one of the most trusted counselors and advisers. Odysseus is frequently viewed as a
man of the mean, renowned for his self-restraint and diplomatic skills. Odysseus was
considered the cleverest hero, and not surprisingly, he was protected by Athena, goddess
of wisdom. He often found solutions for important problems. He was amongst Helen’s
(Helen of Troy, the most beautiful woman) suitors, but to avoid war between them, he
made them all swear to respect Helens decision, and to protect whoever she chose

PRODUCTION DEPARTMENT
Production department is responsible for the production of goods and services in

the organization. Production department consists of around 350 workers. They are using
the exclusive Italian PU technology for manufacturing the footwear. In production, the
capacity has increased over the years. There is a separate packing section in the production
department. More than 100 female workers are working in the production department.
Figure :3.2
PRODUCTION DEPARTMENT
PRODUCTION
DIRECTOR
OPERATIONS
MANAGER
PRODUCTION STORE/DISPA
MANAGER TCH
MANAGER
SUPERVISOR STORE
KEEPER
PRE-MOULDING MOULDING FINISHING PACKING
RAW FINIS
MATERIALS HED
GOO
DS
WORKERS WORKERS
Source of( company informations)

ODYSSIA maintains a separate Finance Department under the supervision of the

Finance Manager. He is assisted by the Accountants. The section handles all the financial
aspects of the firm. All the transactions are
handled through computerized system. The dealings are handled by tally with the latest
accounting package.
Figure :3.3
Finance Department Structure
Director
Finance manager
Accounts manager
Accountants
Stock Sales order
Source :(company information)

4.1 CURRENT RATIO
The ratio is mainly used to given an idea of the company’s ability to pay back its
short –term liabilities (debt and payables) with its short –term assets (cash, inventory,
receivables). The higher the current ratio, the more capable the company is of paying its
obligations. A ratio under 1 suggests that the company would be unable to pay off its
obligations if they came due at that point. While this shows the company is not in good
financial health, it does not necessarily mean that it will go bankrupt- as there are many ways
to access financing- but it is definitely not a good sign.
The current ratio can given a sense of the operating cycle or its ability to turn its
product into cash. Companies that have trouble getting paid on their receivables or have long
inventory turnover can run into liquidity problems because they are unable to alleviate their
obligation. in Because business operations differ in each industry always more useful to
compare companies within the same industry.
This ratio is similar to the acid –test ratio except that the acid test ratio does not
include inventory and prepaid as assets that can be liquidated. The components of current
ratio (current asset and current liabilities ) can be used to derive capital (difference between
current assets and liabilities ). Working capital is frequently used to derive the working
capital ratio, which is working capital as a ratio of sales.
As a conventional rule, a current ratio of 2:1 is considered as satisfactory. A very high

current ratio indicates that funds are not being used economically in the concern . similarly a
low ratio reveals that the firm may have some difficulty in meeting its debts.

Current assets
Current ratio=
Current liabilities
Table no:4.1
Table showing current ratio
Year Current assets Current liability Current ratio

(Rs) (Rs)
2008-2009 3457.23 5473.83 0.63
2009-2010 3636.45 4701.13 0.77
2010-2011 4006.67 4898 0.82
2011-2012 3890 5679 0.68
2012-2013 5308 7859 0.67
Source (annual report)

Figure :4.1
Source : (annual report)
Interpretation
The ideal current ratio is 2:1 which implies to meet every one rupees of current liabilities two
rupees of current assets are available. The above analysis states that the company has
indicates working capital. The company cannot meet their short-term obligation in time. A
relatively high current ratio is an indication that the firm is liquid and has the ability to pay its
current obligation in time as when they become due. But the firm current ratio for the past
five years were relatively low than the standard.

4.2 QUICK RATIO OR ACID TEST RATIO
Quick ratios or liquid ratio
Measure the ability of a company to use its near cash or quick assets to extinguish or retire its
current liability immediately. Quick assets include those current assets that presumably can
be quickly converted to cash at close to their book values. A company with a quick ratio of
less than I cannot current pay back its current liabilities .
Quick ratio is more rigorous test of liquidity than current ratio since it eliminates inventories
and prepaid expenses as a part of current assets. The liquid ratio gives a better picture of
firm’s capacity to meet its short –term obligation out of short –term assets.
QUICK ASSETS
QUICK RATIO =
CURRENT LIABILITIES
An ideal quick ratio often suggested is 1:1 for a concern because it is wise to keep the liquid
assets at least equal to current liabilities at all times.
A high quick ratio compared to current ratio may indicate

under stocking while a low quick ratio may indicate over stocking.

Table :4.2
Quick ratio
QUICK ASSETS CURRENT Quick ratios

YEAR LIABILITY /liquid ratio
2008-2009 2439 5473.83 0.45
2009-2010 2132.24 4701.13 0.45
2010-2011 2375.08 4898 0.48
2011-2012 3024.37 5679 0.53
2012-2013 31775.45 7859 0.40
Source:( annual report)

Figure : 4.2
Interpretation
The liquid ratio represent that the firm’s liquidity position is not good. A quick ratio of 1:1 is
considered satisfactory. It indicates that quick are sufficient to pay off the short term
obligation s. but the ratio is less than the standard for the past 5 years. From 2008-2011 the
ratio shows an increased trend but the main reason is that increased both cash and sundry
debtors. Not satisfactory .

4.3 ABSOLUTE LIQUIDITY RATIO
In addition to computing current and quick ratio, some analysts also compute absolute liquid
ratio to test the liquidity of the business. Absolute liquid ratio is computed by dividing the
absolute liquid assets by current liabilities.
Absolute liquid assets are equal to liquid assets minus accounts receivables(including bills
receivables). Some example of absolute liquid assets are cash , bank balance and marketable
securities etc
CASH + MARKETABLE SECURITIES
ABSOLUTE LIQUIDITY RATIO =
CURRENT LIABILITIES

Table :4.3
TABLE SHOWING ABSOLUTE LIQUID RATIO
YEAR Absolute liquidity Current liabilities Absolute liquidity

assets(Rs) (Rs) ratios
2008-2009 115.26 5473.83 0.02
2009-2010 102.49 4701.13 0.02
2010-2011 58.85 4898 0.01
2011-2012 65.69 5679 0.01
2012-2013 328.56 7859 0.04

Figure :4.3
Source(annual report)
Interpretation
The acceptable norm for this ratio is 50% or 0.5:1 or 1:2 rs.1 worth absolute liquid assets are
considered adequate to pay rs:2 worth current liabilities in time as all the creditors are not
expected to demand cash at the same time and then cash may also be realized from debtors
and inventories

4.4 Gross profit ratio
The gross profit ratio play an important role in two management area. In the area of financial
management, the ratio serves as a valuable indicates of the ability to utilize effectively
outside source of fund. And shaping the pricing policy of the firm
This ratio is ascertained as follows.
Gross profit *100
Gross profit =
Net sales

Table : 4.4
Table of gross profit ratio
Gross profit Net sales Gross Profit Ratio

year
2008-2009 43.69 9390 0.47
2009-2010 -273.52 12063 -2.26
2010-2011 -249.73 10752 -2.32
2011-2012 -471.43 12911 -3.465
2012-2013 298.31 15375 1.94

Figure :4.4
Interpretation
The gross profit ratio indicates the extent to which selling price of goods per unit may decline
without resulting in losses on operation of a firm .it reflects the efficiency with which a firm
produces its products. There is no standard norm for gross profit ratio. A low g/p generally
indicates high cost of good sold due to unfavorable purchasing polices lesser sales, lower
selling prices, excessive competition , over investment in plant and machinery.

4.5 Analysis of profitability (profitability ratios)
1.net profit ratio
The two basic components of the net profit ratio are the net profit and sales. The net profits
are obtained after deducting income-tax and, generally, non operating expenses and incomes
are excluded from the net profit for calculating this ratio. Thus incomes such as interest on
investments outside the business, profit on sales of fixed assets and losses on sales of fixed
assets, etc excluded.
Net profit *100
Net profit ratio =
Sales
No standard has been fixed for the profit ratios. Higher the ratio the better is the firm’s
efficiency.

Table : 4.5
Table showing net profit ratios
Years Net profit Sales Net profit ratios

(Rs in lakhs) in lakhs
2008-2009 28 9384.56 0.29
2009-2010 -281 12061.25 -2.33
2010-2011 -249 10747.84 -2.32
2011-2012 -471.43 12906.22 -3.65
2012-2013 238.62 15370.024 1.55

Figures : 4.5
Source (annual report
Interpretation
Net profit ratio is used to measures the overall profitability of the organization it is an index
of efficiency and profitability of the business. The net profit ratio shows an unfavorable
condition to the company. The ideal ratio must be 10% or more in every industry. The net
profit ratio of the company is not satisfactory. It indicates the company could not increase the
turn over or control its operating cost.

4.5 Return on total assets ratio
A ratio that measures earnings before interest and taxes(EBIT) against its total net assets.
The ratio is considered an indicators of how effectively a company is using its assets to
generate earnings before contractual obligations must be paid. The greater a company’s
earnings in proportion to its assets(and the greater the co efficiency from this calculation),
the more effectively that company is said to be using its assets.
To calculate ROTA, you must obtain the net income figure from a company’s income
statement, and then add back interest and/or taxes that were paid during the year. The
resulting number will reveal the company’s EBIT . the EBIT number should then be divided
by the company’s total net assets(total assets less depreciation and any allowance for bad
debts) to reveal the earning that company has generated for each dollar of assets on its books.
Profitability can be measured in term of relationship between net profit and total assets.
Net profit x100
Return on total assets =
Total assets
The term net profit stand for after interest and taxes.

Table :4.6
Table of return on total assets
Years Net profit Total assets Return on Total

(Rs) (Rs) Assets Ratio(%)
2008-2009 28 12028.2 0.23
2009-2010 -281 11463.11 -2.45
2010-2011 -249 11460.53 -2.17
2011-2012 -471.43 11239.71 -4.19
2012-2013 298.31 12515.85 2.38

Figures : 4.6
source (annual report)
Interpretation
Return on total assets is an important ratio is measure the profitability of investment . it is

useful measure of financial resource invested infirm assets. The most efficiently the assets
used, more profitable would be the business. Here the highest ratio for return on total assets
was during the year 2012-2013 the lowest was in periods.

4.6 Activity ratios or turnover ratios
activity ratios sometimes referred to as operating ratios or management ratios ,measure the
efficiency with which a business uses its assets, such as inventories, account receivable, and
fixed (or capital) assets. The more commonly used operating ratios are the average collection
period, the inventory turn over the fixed assets turnover, and the total assets turnover
turnover ratio or activity ratio measure the performance or operation efficiency of an

enterprise . the ratio indicates the effective utilization of various assets by the organization.
The better management of the assets resulted to large amount sales. A proper balance
between sales and assets reflect that the assets are managed well. The various turnover ratio
used to judge the effectiveness of assets utilization are:-
1. Fixed assets turnover ratios

2. Total assets turnover ratio
Fixed assets turnover ratio
Fixed assets turnover ratio shows how well the fixed assets are being used to generate sale in
the business. In a manufacturing concern this ratio is important because sales are produced
not only by use of current assets but also by amount invested in fixed assets. This ratio
measures the efficiency of the fixed assets use.
It is calculated as follows.
Net sales
Fixed assets turn over ratio =
Fixed assets

Table : 4.7
Table of fixed assets turnover ratio
years Net sales Fixed assets Fixed assets turnover

ratios
2008-2009 9390 8558.10 1.097
2009-2010 12063 778.04 1.55
2010-2011 10752 1.49
2011-2012 12911 7181.56 1.79
2012-2013 15374 7779.97 1.98

Figure : 4.7
Source( annual report)
Interpretation
The fixed assets turn over ratio measure a company generate net sales from fixed asset
investment. Here all fixed assets to turn over ratio are above one. Sale are almost equal to
fixed assets. The highest ratio was 2.27 in the year 2012-2013 and lowest was 1.09 in2008-
2009 there was an increasing trend for the past years because of increase in sale and decrease
in fixed assets.

4.7 Total assets turnover ratio
Assets are used to generate sales. Total assets turnover ratio is a measure of
the overall performance or activity of the business enterprise. This ratio indicates the firm’s
ability for generating the sales per rupees of investment .This ratio aim to point out the
efficiency or inefficiency in the use of total assets.
The formula for calculating total assets turnover ratio is as follows:
Net sales
Total assets turnover ratio =
Total assets
An ideal total assets turnover ratio is 2:1 a higher ratio indicates the over trading of assets.
While low ratio indicates the assets are idle.

Table : 4.8
Table of total assets turnover ratio
Years Sales Total assets Total assets turn

over ratios
2008-2009 9390 12028.2 0.78
2009-2010 12063 11463.1 1.052
2010-2011 10752 11460.53 0.94
2011-2012 12911 1239.71 1.15
2012-2013 15374 12515.85 1.23

Figure : 4.8
Interpretation
The total assets turn over ratio of the company from2008-2009 to 2012-2013 are 0.78, 1.052,
0.94,1.15,1.23 respectively . A high ratio is an indicator of over trading of total assets while a
low ratio reveals idle capacity

4.8 Inventory turn over ratio:
Every firm has to maintain a certain level of inventory of finished goods as to enable to meet
the requirement of the business. Inventory turnover ratio also known as stock velocity is
normally calculated as sales/average inventory or cost of goods sold/ average inventory. It
would indicate whether inventory has been efficiently used or not. The purpose is to see
whether only the required minimum fund have been locked up in inventory.
Cost of goods sold or net sales
Inventory turn over ratio =
Average inventory
Average inventory= opening stock+ closing stock/

Table :4.9
Inventory turn over ratio
Years Net sales Average inventory Inventory turn over

ratio
2008-2009 2918776.62 6379397.15 0.457
2009-2010 6547123.11 7291287.38 0.89
2010-2011 12444217.76 9020206.23 1.37
2011-2012 15379509.78 8076545.48 1.90
2012-2013 25329002.81 8175794.30 3.09

Figure : 4.9
Interpretation
There are no rules of thumb or standard inventory turnover ratio for interpreting the inventory
turnover ratio. The norm may be different for different firms depending on the nature of
industry and business conditions. But here the inventory turnover ratio of the firm shows a
fluctuating trend. In the year 2011-2012, the inventory turnover ratio is comparatively higher
than the subsequent year which indicates efficient management of inventory.

4.9 Proprietary ratio or equity ratio
the proprietary ratio represent the proportion of shareholders funds in the total assets used in
the business. This ratio indicated to which the assets of the company can be lost without
affecting the interest of creditors of the company. This ratio reveals the long term future
solvency of the company. This ratio is worked as follows:
shareholders funds
Proprietary ratio =
Total assets

table : 4.10
Table of proprietary ratio
Years Shareholders’ funds Total assets Proprietary

ratio
2008-2009 2131.19 12028.2 0.18
2009-2010 2131.19 .11463.1 0.19
2010-2011 2131.19 11460.53 0.19
2011-2012 2131.19 11239.71 0.19
2012-2013 2131.19 12515.85 0.17

Figure :4.10
Interpretation
The proprietary ratio is computed for the purpose of knowing how much fund have been
provided by the shareholders towards the total assets. Generally a ratio 0.5:1 above is
considered ideal. A higher ratio indicates that the firm is less dependence on creditors for wo

4.10 WORKING CAPITAL TURNOVER RATIO :
This ratio reflects the turnover of the firm’s net working capital in the course of the year. It is
a good measures of over-trading and under trading . the higher is the ratio, the lower is the
investment in working capital and the greater are the profits. However, a very high turnover
of working capital is sign of over trading and may put the concern in to financial difficulties.
Net sales
Working capital turn over ratio=
Net working capital
Table no: 4.11
Table showing working capital turn over ratio: (in lakhs)
Year Net sales Net working capital Working capital

turn over ratio
2008-2009 9390 -2016.60 -4.65
2009-2010 12063 -1064.68 -11.33
2010-2011 10752 -891.36 -12.06
2011-2012 12911 -1789 -7.21
2012-2013 15374 -2551 -6.02

Figure : 4.11
Interpretation
The standard or ideal working capital turnover ratio is7 or 8 .higher ratio the better working
capital but the higher the ratio indicates over trading. Low ratio indicates under trading w/c
turn over ratio show inefficient use of working capital in the firm.. net w/c is negative for the
five year2009-2010 and2010-2011 showing inefficient use of working capital.

Table : 4.12
COMPARATIVE BALANCE SHEET
For the year ending 31st march 2008-2009
particulars 2008 2009 Increase/ %increase/
(In lakhs) (In Lakhs) decrease decrease
assets
Fixed assets(net) 9406.43 8558.10 -848.33 -9.02%
Capital working in 1.16 10.57 9.41 811.20%

progress
investment 2.30 2.30 - -
Current assets and 3717.33 3457.23 -260.1 -6.10%

loans& advance
Profit& loss account 813 785.33 -27.67 -3.40%
Total assets 13940.22 12813.53 -1126.69 -8.08%
Liabilities
Share capital 21211.19 2131.19
Secured loan 6225.70 4836.46 -1389.24 -22.31%
Unsecured loan - 372.05 372.05 -
Current liabilities 5583.33 5473.83 -109.5 -1.96%

&provision
Total liabilities 13940.22 12813.53 -1126.69 -8.08%

INTERPRETATION
The fixed assets are decrease by 0.55%. the decrease in these assets has been used mainly for
production activities .profit and loss account shows a debit increase by 35.84% the company
not having profit.
There is no changes in share capital i..e.. no additional fund has been raised .the current
liabilities is increased by 15.95% the company cannot properly meet its creditors . there is no
reserve surplus. The company has no profitability.
The current assets of the company have decrease to;116.27 in lakhs in the year 2010 the
current liabilities are also increased to Rs:781.27 company has not satisfactory

Table :4.13
Particulars 2009 2010 Increases / %increase
( in lakhs ) ( in lakhs ) Increase Decrease
Assets
Fixed assets 8558.10 7783.04 -775.06 -9.056%
Capital work in 10.57 41.32 30.75 290.92%

progress
Investment 2.30 2.30 - -
Current assets and 3457.23 3636.45 179.22 5.18%

loans & advance
Profits &loss a/c 785.33 1065.88 280.55 35.72%
Total assets 12813.53 12528.99 -284.54 -2.22%
Liabilities
Secured loan 4836.46 5267.23 430.77 8.90%
Unsecured loan 372.05 429.44 57.39 15.42%
Current liabilities 5473.83 4701.13 -772.7 -14.12%

&provision
Total liabilities 12813.53 12528.99 -284.54 -2.22%

INTERPRETATION
 The current assets of the company increased to Rs:179.22 and current liabilities has
decreased to Rs:772.7 lakhss. The liquidity position of the company is satisfactory.
 The fixed asset of the company is decreased by Rs:775.06 lakhs and long term loans
are increase by Rs:430.77 Lakhs. This shows that company use loans to maintain
working capital.
 There is no change in share capital i…e..no additional fund has been raised .
 There is no reserve and surplus. The company has no profitability.

Table :4.14
COMPARATIVE BALANCE SHHET
For the year ending 31st march 2010--2011
Assets
Fixed assets 7783.04 7221.63 -561.41 --7.26%
Capital work in 41.32 229.93 188.61 456.46%

progress
Current assets and 36.36.45 4006.67 370.22 10.18%

loans & advance
Profits &loss a/c 1065.88 1315.05 249.17 23.38%
Total assets 12528.99 12528.99 246.59 1.96%
Liabilities
Secured loan 5267.23 5248.91 -18.32 -0.34
Unsecured loan 429.44 497.45 68.01 15.83%
Current liabilities 4701.13 4898.03 196.9 4.18

&provision
Total liabilities 12528.99 12775.88 246.59 1.96%

INTERPRETATION
The increased to current assets of the company have increased to Rs:370.22 in the year 2010
the current liabilities are also increase 1.96.9 . the capital position company is satisfactory.
There is no money is kept as reserve and surplus.
There is no change in share capital no additional fund been raised.

Table : 4.15
COMPARATIVE BALANCE SHHET
Assets
Fixed assets 7221.63 7181.56 -40.07 --0.55%
Capital work in 229.93 165.45 -64.48 -28.04%

progress
Current assets and 4006.67 3890.4 -1167.27 -2.90%

loans & advance
Profits &loss a/c 1315.05 11786.48 471.43 35.84%
Total assets 12775.58 13026.19 250.61 1.96%
Liabilities
Secured loan 5248.91 4638.74 -610.17 -11.62%
Unsecured loan 497.45 576.96 79.51 15.98%
Current liabilities 4898.03 5679.3 781.27 15.9%

&provision

INTERPRETATION
not having profit.
current liabilities are also increased to Rs:781.27 company has not satisfactory .

Table : 4.16
Assets
Fixed assets 7181.56 6776.97 401.59 5.59.5%
Capital work in 165.45 122.05 -43.5 -26.23%

progress
Current assets and 3890.4 7159.5 3268.98 84.02%

loans & advance
Profits &loss a/c 1786.48 1547.8 -238.62 -13.35%
Total assets 13026.19 14063.% 1037.51 7.96%
Liabilities
Secured loan 4638.74 3396 --1247.2 -26.79%
Unsecured loan 576.96 3638.51 3061.55 530.63%
Current liabilities 5679.3 4898 -781.3 -13.76

&provision

INTERPRETATION
 The fixed assets are decreased by 5.59% the decrease in the assets has been used
mainly for production activities.
 There is no change in share capital
 The current assets of the company increased to84.02% and current liabilities has
decreased to 13.76% the liquidity position of the company is satisfactory.
 There is no money kept as reserves and surplus.

4.11 Common size balance sheet
A statement in which all item are expressed as a percentage of bas figure useful
for purpose of analysis trend and changing relationship among financial
statement.
Advantages
 To establish a relationship
 To present the change in various item in relation to total assets or total

liabilities.
 Common base comparison
 Vertical common size analysis involves stating all balance sheet item as a
percentage of total assets. It useful in comparing current balance sheet.

Table :4.17
COMMON SIZE BALANCE SHEET
particulars 2008 % 2009 in %

lakhs
In lakhs
assets
Fixed assets(net) 9406.43 67.48% 8558.10 66.79%
Capital working in 1.16 0.08% 10.57 0.09%

progress
investment 2.30 0.02% 2.30 0.02%
Current assets and 3717.33 26.67% 3457.23 26.98%

loans& advance
Profit& loss account 813 5.83% 785.33 6.13%
Total assets 13940.22 100% 12813.53 100%
Liabilities
Share capital 21211.19 15.28% 2113.19 16.63%
Secured loan 6225.70 44.66% 4836.46 37.74%
Unsecured loan - 372.05 2.90%
Current liabilities 5583.33 40.05% 5473.83 42.71%

&provision
Total liabilities 13940.22 100% 12813.53 100%

Interpretation
From the above common size balance sheet we can that share capital of the company is
decreasing trend both secured loan were increasing trend and unsecured loan in decreasing
trend . the fixed asset decreased from 67.48% to 66.79%it is because of the depreciation of
fixed assets. In case of current asset were increased by 0.31% and the current liability also
shows increasing trend but the current asset is less than liability.

Table : 4.18
particulars 2010 % 2009 in %

lakhs
in lakhs
assets
Fixed assets(net) 7783.04 62.12% 8558.10 66.79%

progress
investment 2.30 0.02% 2.30 0.02%

loans& advance
Profit& loss account 1065.88 8.51% 785.33 6.13%
Total assets 12528.99 100% 12813.53 100%
Liabilities
Share capital 2131.19 17.018% 2113.19 16.63%
Secured loan 5267.23 42.04% 4836.46 37.74%
Unsecured loan 429.44 3.42 372.05 2.90%

&provision

interpretation
In 2008 the share capital is 16.63% and in 2009 the share capital is increased by 17.01% both
secured loan and unsecured loan shows an increased trend. There is no reserve and surplus in
both years. The percentage of fixed assets has decreased from 66.79%to 62.% that indicates
there is a sale of fixed assets. Taking total assets 100 the current assets show as increasing
trend the current liabilities shown decreasing trend.

Table : 4.19
Common size balance sheet
particulars 2010 % 2011 %
assets
Fixed assets(net) 7783.04 62.12% 7221.63 56.53%

progress
investment 2.30 0.02% 2.3 0.02%

loans& advance
Total assets 12528.99 100% 12775.58 100%
Liabilities
Share capital 2131.19 17.018% 2113.19 16.68%
Secured loan 5267.23 42.04% 5248.9 41.08%
Unsecured loan 429.44 3.42 497.45 3.9%

&provision

Interpretation
The percentage of fixed assets has decreased from 62% to 56% that indicates
there is a sale of fixed assets. Both secured loans show a decreasing trend and
unsecured loan showing increasing trend. In 2010 the current assets is 29.02
and in 2011 it is increase from 31.36 it is because of the increasing of sundry
debtors and also increase of inventory, cash bank balance.

Table : 4.20
Common size balance sheet
assets
Fixed assets(net) 7221.63 62.12% 7181.56 56.53%

progress
investment 2.3 0.02% 2.3 0.02%

loans& advance
Total assets 12775.58 100% 13026.19 100%
Liabilities
Share capital 2131.19 17.018% 2113.19 16.68%
Secured loan 5248.9 42.04% 4638.74 35.61.%
Unsecured loan 497.44 3.42 576.96 4..43%

&provision

Interpretation
In2011 the share capital is 16.68% and in 2012 the share capital is decreased by 16.36% there
is no reserve and surplus in both years. From the above common size balance sheet we can
see that share capital of the company is decrease trend both secured loan were decrease trend
and unsecured loan in increasing trend. The percentage of fixed assets has decreased from
56.53% to 55.13%.

Table :4.21
In lakhs in lakhs
assets
Fixed assets(net) 7181.56 56.53% 6779.97 48.2

progress
investment 2.3 0.02% 2.3 0.02%

loans& advance
Total assets 13026.19 100% 14063.70 100%
Liabilities
Share capital 2113.19 16.68% 2131.9 15.15%
Secured loan 4638.9 35.61% 3396 24.15%
Unsecured loan 576.96 4.43% 3638.51 25.87%
Current liabilities 5679.3 43.6% 4898 34.83%

&provision

Interpretation
From the above common size balance sheet we can see that share capital of the company is
decrease trend both secured loan were decreasing trend and unsecured loan in trend is
increasing. There is no reserve surplus in both years. The fixed assets decreased from55.13%
to48.2% it indicates that there is a sale of fixed assets.

4.12 Trend analysis
Comparing past data over a period of time with a base year is called trend analysis. This
method determine the direction upwards or down words and involves the computation of the
percentage relationship the cash statement. Item bears to the same item in base years. The
information for a numbers of years is taken up and one year, generally the first year as taken
as base year. The figure of base year taken as 100 and trend ratios for other years calculated
on the basis of base year the analyst is able to see the trend of figures, whether upward or
downward. The trend percentage is generally computed for major items in the statement
Sales
Table : 4.22
Table of trend percentage of sales (in lakhs)
Years Sales Trend%
2008-2009 10856.67 100%
2009-2010 13538.5 124.70%
2010-2011 11622.24 107.05%
2011-2012 14184.15 130.65%
2012-2013 16956.11 156.18%

Figure : 4. 12
Source(annual report)
Interpretation
In this analysis year 2007-2008 taken as base year while comparing with it, in 2009-2010
sales increase to 124.70 from 100% where as in 2010-2011 sales was 107.5% showing a
decrease from that of2010 while looking in to 2011-2012 the sales again increase to 130.65
sales showing a good trend in 2013 that 156.18% .

Table : 4.23
TREND ANALYSIS ON PROFIT
Table of trend percentage profit
Years Profit Trend%
2008-2009 28 100
2009-2010 -281 -1003.57
2010-2011 -249 -889.28
2011-2012 -471.43 -1683.67
2012-2013 298.31 1065.39

Figure : 4. 13
Interpretation
In this analysis year 2008-2009 taken as base year while comparing with it in 2009-2010
from profit decreased to 1003.57% from100% where as in 2010-2011 was -888.28%
showing again deceasing trend.1683.67% profit showing a good trend.

TREND ANALYSIS ON PURCHASE:
Table of trend percentage of purchase
Table : 4.24
Purchase
Years Trend%
2008-2009 1268 100
2009-2010 2043 161.12
2010-2011 1603 126.42
2011-2012 1933 152.45
2012-2013 2586 203.94

Figure :4.14
Interpretation
While considering purchase which shows the trend increase in 2010- at 161.12 diminish it to
126.42% then show a slight increase in 152.45% a huge change occur in the year 2013 that
of 203.94%.

5.1 FINDINGS
1)The company shows a fluctuating trend for the current ratio and the ideal ratio is 2:1
Average current ratio of the company0.72 for the last five year showing that the liquidity
position of the company not be the satisfaction level.
2)The company’s liquidity ratio for the last five year is fluctuating . the ideal ratio is 1:1 for
the last year shows that company is not maintaining a satisfactory liquidity position.
3) The gross profit ratio indicates the extent to which selling price of goods per unit may
decline without resulting in losses on operation of a firm .it reflects the efficiency with which
a firm produces its products. There is no standard norm for gross profit ratio. A low g/p
generally indicates high cost of good sold due to unfavorable purchasing polices lesser sales,
lower selling prices, excessive competition , over investment in plant and machinery.
4)Proprietary ratio showed as decreasing trend which indicate that the long term solvency
position was liquidating against the interest of creditors.
5)Return on total asset ratio is not be satisfactory position in the study period
6) In this analysis year 2008-2009 taken as base year while comparing with it in 2009-2010
from profit decreased to 1003.57% from100% where as in 2010-2011 was -888.28%
showing again deceasing trend.1683.67% profit showing a good trend
7) The fixed assets turn over ratio measure a company generate net sales from fixed asset
investment. Here all fixed assets to turn over ratio are above one. Sale are almost equal to
fixed assets. The highest ratio was 2.27 in the year 2012-2013 and lowest was 1.09 in2008-
2009 there was an increasing trend for the past years because of increase in sale and decrease
in fixed assets.
8)In this analysis year 2007-2008 taken as base year while comparing with it, in 2009-2010
sales increase to 124.70 from 100% where as in 2010-2011 sales was 107.5% showing a
decrease from that of2010 while looking in to 2011-2012 the sales again increase to 130.65
sales showing a good trend in 2013 that 156.18%
Comparative balance sheet 2008-2009 details are following

not having profit.
current liabilities are also increased to Rs:781.27 company has not satisfactory
Comparative balance sheet 2009-2010
 The current assets of the company increased to Rs:179.22 and current liabilities has
decreased to Rs:772.7 lakhss. The liquidity position of the company is satisfactory.
 The fixed asset of the company is decreased by Rs:775.06 lakhs and long term loans
are increase by Rs:430.77 Lakhs. This shows that company use loans to maintain
working capital.
 There is no change in share capital i…e..no additional fund has been raised .
 There is no reserve and surplus. The company has no profitability.
From the above common size balance sheet we can see that share capital of the company is
decrease trend both secured loan were decreasing trend and unsecured loan in trend is
increasing. There is no reserve surplus in both years. The fixed assets decreased from55.13%
to48.2% it indicates that there is a sale of fixed assets in 2012-2013
In2011 the share capital is 16.68% and in 2012 the share capital is decreased by 16.36% there
is no reserve and surplus in both years. From the above common size balance sheet we can
see that share capital of the company is decrease trend both secured loan were decrease trend
and unsecured loan in increasing trend. The percentage of fixed assets has decreased from
56.53% to 55.13%.

5.2 Suggestions:
1) Expenses should controlled by improving the earning of the company.
2) the company should try to minimize investment in inventories.
3) the company should try to reduce the current liabilities for achieving good liquidity
position.
4) the current liabilities can be maintained with the help of issue additional share. This
will increase the cash position, current assets and long term capital. This will never affect
current liabilities.
5) the company shows a negative working capital for the last year so the company should
maintain adequate current asset to meet its day to day operation.
6) the balance land property available can be utilize for leasing because lease rent is one
of the source for increasing current asset.
7) liquidity position of the company is not satisfactory, so the company should ,make
necessary step to maintain an adequate liquidity position.
8)in order to manage debtors more efficiency, establish clear credit practices as a matter
of the company policy and make sure that these practices are clearly understood by staff,
suppliers and customers.
9)investment in slow moving inventory should be cut down this fund should be directed
towards marketable securities so as to improve the liquidity position of the company.
10) proper techniques should be adopted for planning and control of cash order to
regularize and optimize the use of cash balance.

5.3 CONCLUSION
The present business world is becoming more complex because

of its dynamic nature. The rapture India foot wear pvt ltd provide foot wears.
To conclude the management of the “ rapture india foot care” should improve the liquidity
position by reducing the investment. The company should adopt necessary and relevant step
for curtailing the cost to improve the profitability. The perfect wealth position depend upon
the capability competency and effectiveness of the business activities . the company should
counter check the situation and give more importance to improve the profitability and
activity of the company.

BIBILIOGRAPHY
1.I.M PANDEY, FINANCIAL MANAGEMENT ,edition-5 vikas publishing

house private limited, New Delhi.
2. PRASANNA CHANDRA , “FINANCIAL MANAGEMENT”, edition-4 tata mcgraw hill

publishing co-operative limited.
3. C.R. KOTHARI, “RESEARCH METHODOLOGY “ edition -2 new age international

limited ,new delhi
www.odyssiagroup.com
HTTP://EN.WIKIPEDIA.ORG/Wiki/financial analysis
http://www.finance.umich.edu/analysis

Appendix
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH ,2009
SI PARTICULARS 2009 2008

NO
I INCOME
1 Sale less excise duty (net sales) 9384.56 12313.80
2 Trading sales 6.04 6.87
3 Other income 1673.90 218.76
Total 11064.50 12539.43
II EXPENDITURE
1 Raw material consumed 1253.26 1630.73
2 Trading purchase 14.56 16.92
3 Powers, fuel ,stores and repairs 5668.06 6702.38
4 Employee cost 2634.45 2369.04
5 Selling & administration expenses 70.12 77.48
6 Other expenditure and losses 34.95 48.74
7 Interest and financial charges 289.10 964.13
8 Depreciation 1011.75 920.14
9 (Increases) decreased in stocks (3.59) (920.14)
Total 10973.46 12530.10

1 Profit(loss) before prior period 91.04 9.33

items
2 Priors period items(net) (47.35) 52.54
Profit /loss before taxation 43.69 61.87
Provision for taxation:
4 Current tax 5.25 5.23
5 Fringe benefit tax 10.77 8.12
Net profit/(loss)after taxation 27.67 48.52
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH ,2010-2011
SI PARTICULARS 2011 2010

NO
I INCOME
1 Sale less excise duty (net sales) 10747.84 12061.25
2 Trading sales 4.61 1.40
3 Other income 685.60 313.46
Total 11438.05 12376.11
II EXPENDITURE
1 Raw material consumed 1601.53 2035.24
3 Powers, fuel ,stores and repairs 6186.25 6374.41
4 Employee cost 2454.88 2333.12

5 Selling & administration expenses 144.93 76.33
7 Interest and financial charges 660.01 789.87
8 Depreciation 936.4 969.47
9 (Increases) decreased in stocks (3.32.81) 35.62
Total 11702.39 12659.42
1 Profit(loss) before prior period (264.34) (283.31)

items
2 Priors period items(net) 41.61 9.79
Profit /loss before taxation (249.73) (273.52)
Provision for taxation:
4 Current tax 00.0 (1.53)
5 Fringe benefit tax (0.56) 8.56
Net profit/(loss)after taxation (249.17) (280.55)

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH ,2012-2013
SI NO PARTICULARS 2013 2012
I INCOME
1 Revenues from operations(gross) 16956.11 14184.15
Less: excise duty 1581.63 1273.13
Revenue from operation (net) 15374.48 12911.02
2 Other income 611.83 360.12
Total revenue 15986.31 13271.15
II EXPENDITURE
1 Cost of material consumed 2585.51 1932.32
3 Change in inventories of finished goods (47.13) 486.70

work in progress and stock in trade
4 Employee cost 4054 2558.86
5 Finance costs 611.21 727
7 Depreciation and amortization expenses 971 948.4
8 Prior period expenditure 0.576 27.03
Total 15688.005 13742.58
Profit/loss before taxation 298.31 (471.43)
Tax expenses

4 Current tax 59.68 0.00
Net profit /(loss ) after taxation 238.62 (471.43)
BALANCE SHEET AS AT 31ST MARCH 2008-2009

PARTICULARS 2008 2009
SOURCES OF FUNDS
Shareholders fund :
Share Capital 2131.19 2131.19
Reserves and surplus
Loan funds:
Secured Loans 4836.46 6225.70
Unsecured loans 372.05
7339.70 8356.89
TOTAL
Application of funds
Fixed asset 8558.10 9406.43
Capital work in progress 10.57 1.16
investments 2.30 2.30
Current assets, loans and advances 3457.23 3717.33
Less: current liabilities & provisions 5473.83 5583.33
Net current assets 2016.60 1866
Profit & loss account 785.53 813
TOTAL 7339.70 8356.89

SOURCES OF FUNDS
Shareholders fund :
Loan funds:
Unsecured loans 429.44 372.05
7827.86 7339.70
TOTAL
Fixed asset 7783.04 8558.10
Net current assets 1064.68 2016.60
Profit & loss account 1065.88 785.33
TOTAL 7827.86 7339.70

SOURCES OF FUNDS
Shareholders fund :
Loan funds:
7827.86 7877.86
TOTAL
Fixed asset 7783.04 7221.63
Less: current liabilities & provisions 4701 4898.03
Net current assets (1064.68) (891.36)
TOTAL 7827.86 7877.55

SOURCES OF FUNDS
Shareholders fund :
Loan funds:
7346.89 7877.86
TOTAL
Fixed asset 7181.56 7221.63
TOTAL 7346.89 7877.55

SOURCES OF FUNDS
Shareholders fund :
Loan funds:
Secured Loans 4638.74 3396
7346.89 9165.7
TOTAL
Fixed asset 7181.56 6779.97
Less: current liabilities & provisions 5679.3 4898
TOTAL 7346.89 9165.7


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1 RAPTURE INDIA FOOTCARE Co PVT Ltd

Is to determine the efficiency and performance of firm’s management, as reflected in the

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

1.2 SIGINIFICANCE OF THE STUDY

1.3 OBJECTIVE OF THE STUDY

 To obtain a true insight into financial position of the company.

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

1.4 LIMITATION OF THE STUDY

 Limitations of financial statement

1.5 scope of the study

Financial analysis in an organization is a principal and central subsystem and it operates

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

1.6 RESEARCH METHODOLOGY

According to woody,” research comprises and redefining problem formulating

Analytical research design;

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

TOOLS USED FOR ANALYSIS

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

2.1 Literature review & theoretical frame work

METCALF AND TITARD: “analysis of financial statement is a process of

Dr r. k. sahu: in his articulate ,analysis of corporate profitability a multivariate approaches

FINANCIAL RATIO ANALYSIS

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

Based on financial Based on Based on

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

a) Balance sheet ratios 1) primary ratio 1liquidity ratio

1) based on financial statement

 Balance sheet ratios

 Profit and loss account ratios

 Combined or mixed ratio

 Secondary ratios : explain the primary ratio

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

 Market test ratio

ADVANTAGE OF THE ANALYSIS

The advantage derived by an enterprise by the use of accounting ratios are:

1) Useful in analysis of financial statement :

2) Useful in simplifying accounting figures:

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

Accounting ratio simplifies summarized and systematizes a long array of accounting

3)Useful in judging the operating efficiency of business:

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

3.1 COMPANY PROFILE

Location :Perumanna ,Kozhikode

Email :hr –odyssia @ gamil.com

General manager :Sasidharan

Year of commencement :2006

Product :Foot wears

Export of product :Centralized

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

3.2 ORGANIZATIONAL STRUCTURE

PRODUCTION MARKETING FINANCE HUMAN

PRODUCTION MARKETING FINANCE H.R

OPERATION MARKETING H.R EXECUTIVES

Source: (company information)

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

3.3 INDUSTRY PROFILE

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

Overview of the Indian Footwear Industry

The footwear industry is a significant segment of the leather industry in

India’s export of Leather Footwear touched US$ 331 million in 1999-2000,

JAI BHARATH SCHOOL OF MANAGEMENT STUDIES, PERUMBAVOOR

As a result of rapid economic development taking place in our country, increase