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FINANCIAL ANALYSIS OF MYMUL
EXECUTIVE SUMMARY
A study has been conducted at MYMUL; for the project entitled “A study on Financial
Analysis” in order to study the financial performance of the MYMUL.
The purpose of the study is to understand the financial position of the company. This also
involves finding the solutions to the problems by adding a new knowledge to the existing
knowledge. .
To understand the conceptual framework of financial statement analysis and

compares the previous five years and present year performance of the company. To assess
the short term as well as long term profitability position
It shows a growth rate in financial performance over year on year. It also includes an
operating performance and financial position.
For the analysis of the performance, secondary data has been used. Since the project aims to
study the financial performance for various purpose & also analyze its monetary performance
over a period of 5 years.
If MYMUL is increase the share capital is good sing to organization as it indicates that the
organization is going to meet capital expenditure and it is best sources of finance.
To conclude finance accounting system provides the service to aid the managers in
achievement of the goals and targets laid by the management and its effectiveness evaluated
from time to time. The overall performance of the finance accounting department of
MYMUL is satisfactory
Vidyavardhaka college of engineering ,MBA Page 1

1.1 INTRODUCTION:
Financial Analysis is the collective name for the tool and techniques that are intended to
provide relevant information to decision maker. Financial analysis is a process of assessing
relationship between components of financial statement to get a better understanding of the
firm’s position and performance. The concept ‘position ‘indicate the financial position of the
firm and performance.
The concept of analysis means methodological classification of the data given in the financial
statement. The Financial statement analysis is a powerful tool or mechanism to determine
strengths and weakness of an enterprise which depends on the data of financial statement.
The Financial statement analysis will also help the business owners and other interested
peoples to analyze the data in financial statements to provide them with better information
about such key factors for decision making and ultimate business survival.
1.2 TOPIC CHOOSEN FOR THE STUDY:
ABSTRACT
Financial analysis is an important tool for measuring the financial performance of any
company .The main aspect of financial management is working capital management and
should be done one day-to-day basis. This study helps to review the financial performance of
the company.
According to Myers “Financial analysis is largely a study of relationship among the various
financial factors, in a business as disclosed by a single set of statements, and a study of the
trend of these factors as shown in the series of statements”.

1.3 NEEDS OF THE STUDY:
 The study has been conducted for gain knowledge about financial statement of KMF,
Mysore.
 To know the financial strength of the organization.
 To know the productivity of the organization.
1.4 OBJECTIVES OF STUDY:
1. To understand the conceptual framework of financial statement analysis
2. To compare the previous five years and present year performance of the company.
3. To know the present financial system of mymul
4. To assess the short term as well as long term profitability position.
5. To evaluate the performance of the company by using ratios and its help to measure the
efficiency of the company.
6. To study the management in having effective control over the activities of different
departments
7. To give suggestion and recommendation based on the study.
1.5 SCOPE OF THE STUDY:
The study is to find out different managerial efforts to manage the total working capital as
well as the individual current assets.it is confined to the limits of MYMUL only.it covers
various financial statements such as profit and loss a/c,and balance sheet of preceding 5

years. The study is directed towards understanding the functions of different departments
especially in finance department.
The study has been done to ascertain the final status of the company, the study is made to
analyze the financial performance with references of financial statement like profit and loss
a/balance sheet.
1.6 RESEARCH METHODOLOGY:
Research is an intensive and purpose search for knowledge and understanding of social
and physical phenomena.
Data collection
 Primary data:
Primary data is the data pragmatic or composed directly from first hand experienced
primary data collected through the communication with managers and original in
nature.
 Secondary data:
Secondary data are those data that have been compiled already before conducting the
research. It may be internal as well as external.
The sources of secondary data are;

 Annual report
 Mymul website
 Journals and articles
Duration: 5 years

Research Type: descriptive research
1.7 LITERATURE REVIEW:
Edward J.Riedl explained that whether manager’s presentation of special items within the
financial statements reflects international motivations or oppurtunististic motivations. Special
items receiving income statement presentation are less persistent than those receiving
footnote presentations.
Cenap1lter explained that international accounting standard 29 “Financial Reporting in

Hyperinflationary Economies-IAS 29” imposes some percentage criteria as to the restatement
of financial statements. Inflation can have hazardous effects on financial statements. It is an
uncontainable external factor for management The Company might be a local one or a
subsidiary, whether shares are merchandized in the stock exchange or not, in all situations
companies are under the effect of inflation.
p.sasikala (2012) explained that current ratio indicated the extent of soundness of the current
financial position of a company, and degree of safe and security provided for the creditors.
The short term creditor of the firm primarily interested in knowing the firm’s ability to meet
its current and short term obligations. It also states that excessive liquidity may lead to lower
profitability. So negative association between liquidity and profitability should be controlled
through skillful liquidity management
Brealy,(2012) explained that a well formulated financial ratio analysis report helps investors
to quantify a company’s financial strengths and weakness and potential risks and
opportunities and identify the company’s financial strengths. Using financial ratio Analysis as
a tool in conjunction with other business evaluation processes, and the other company factors,
are beneficial for the investors.
Amoeboid(2012) explained that in order to have better understanding and cover the financial
statements, a primary analysis will be done before stating ratios calculations. Later ratios will

be used to compare shell with other competitors keeping in mind that ratios cannot be used
without considering other factors.
Professor M.R kumaraswamy explained that today money rules every aspect of human and
economic life. Man has been enslaved by money. He lives a superficial, sorrowful and
artificial life. This is indeed a great pity. In chase of money, man descends to the level of the
beast by engaging in manipulative dealings like money laundering, falsehood, accounts
manipulation and other crimes.
1.8. LIMITATIONS OF THE STUDY:
 The study duration in short period

 Non availability of the data as per the requirement
 Time was been constraint
 The study is limited only Mysore Milk Union Dairy
 To understand the concept of financial statement analysis techniques

CHAPTER-2
1. INDUSTRY PROFILE
2.1 General information of milk and milk industry
The progress of mankind and civilization has, since history began, been closely alike
with his diet. Even today the leading nation and nations capable of becoming strong are
those, which can obtain food in abundance for their people.
It has been said that cow is a machine that converts raw materials (plants) in food in a
surprisingly efficient manner. The method by which cattle are managed in order to produce
milk can be accomplished in many ways. In order to be most successful, dairymen or those
contemplating entering the business should carefully survey to produce under local
conditions.
Milk may be defined as the whole, fresh, clean, lacteal secretion obtained by the
complete milking of one or more healthy milk (milk giving) animals. It is an almost an Ideal
food. Although milk is commonly thought as a beverage, it is nature’s most nearly prefect
food and contains more actual solids than many so called solid food, especially vegetables.
Milk is the only food, which is designed by the nature solely as food. It serves as the
foundation of as adequate diet. It supplies bodybuilding protein, bone forming minerals and
health giving vitamins and furnishes energy giving lactose and milk fat. All these properties
make milk important for pregnant mothers, growing children, adolescents, adult’s invalids,
convalescents and proteins alike. An adequate consumption of milk can correct dieting
deficiencies for most people to have strong and healthy bodies. It is a delicious and

appetizing food for all ages as well as being healthful. The Table 1.1 shows constituents of
milk and its percentages
Table 1.1: Constituents of Milk and its Percentages
Constituents of milk Percentage (%)

Water 87.0
Butter fat 4.0
Casein 2.8
Albumin 0.5
Lactose (milk sugar) 5.0
Minerals 0.7
Milk constituent is divided water and solids. The constituents other than water are
called the total solids (TS). The total solids minus the butterfat termed as the solids - non-fat
(SNF). All the constituents except the butterfat are known as the milk serum. The casein and
albumin make up most of the protein of the milk. Actually about 0.055 globulin is also
present.
The major constituents of milk are water, butterfat, protein, lactose and minerals. The
minor constituents are vitamins, pigments such as carotene, fat-soluble pigment lacto Flavin,
and water-soluble pigment lacto Flavin, and cholesterol, phospholipids (lecithin), and sterols,
enzymes such as lipase, galactose, diastase etc., gases such as carbon-dioxide, oxygen and
nitrogen and nitrogenous substances such as uric, urea's nitrogen and traces of amino acids.
That true constituents are milk obese, casein and lactose.

Milk is completely essential for the development of the human race, the cow has been
rightly called “the foster mother of the human race” and she is found in most of the civilized
of the world.
ORIGIN OF THE INDUSTRY

The term “market milk” refers to fluid whole milk that is sold to individual usually for
direct consumptions, as a major enterprise, the market milk industry is of comparatively
recent origin even in developed diary countries such as USA though ancient written record
report milk as an important food, it's processing and distribution as a separate commercial
business did not develop in those countries until the concentration of population in the cities
reached a high level in the middle of the 19th century.
In India, dairying has been practiced as a rural cottage industry since the remote past.
Semi commercial dairying started with establishment of military dairy farms and co-operative
milk unions throughout the country towards the end of the 19th century, however, market milk
technology may be considered to have commenced in 1965, with the functioning of the
central dairy of Aarey milk colony and milk product in 1956 with the establishment of
AMUL.
In developed daring countries such as the USA, the year 1850 is seen as the dividing
between form and factory-scale product .various factors contribute to this change in these
countries. Viz, concentration of population incites where jobs were plentiful, rapid
industrialization, improvement in transportation facilities, development of machines etc.
Whereas the rural areas were identified for milk production, the urban centers were selected
for the location of milk processing plants and products manufacturing factories. Gradually
formers within easy driving distance begin delivering milk over regular routes in the cities.

Prior of the 1850's most milk was necessarily produced within a short distance of the lace of
consumption because of lakh of suitable means of transport and refrigeration.
GROWTH AND DEVELOPMENT OF THE INDUSTRY

Until the 1940, there was very little published information on the method of
preparation and use of these products. The credit for the first publication on the subject goes
to Dr. W.B. Davis, the first director of the industry research, Indian dairy research institutes
(now national), Bangalore. Within the span of these four decades since his book appeared,
considerable research has been places in indigenous dairy products.
PRESENT STATUS OF THE INDUSTRY

The Indian dairy industry is heading towards new century with an accelerated and
positive momentum. With unprecedented growth in milk production by over two and a half
time in the also two decades to about 58.8 million tons in 1992, India has emerged as the
largest milk producer in the world with an annual milk production of 76million tones. Food
processing industry ranks as the 5th largest industry in the country. Through the milk and milk
products have 85% business in unrecognized sector; it is having only 7% growth per year.
The establishment of a co-operative structure as a ready and regular buyer or milk

produced gave a new turn to the rural economy. Today, over 275 dairy plants and 83 milk
products factories in the co-operative, public and private sectors handle an estimated 12-15%
of the total milk produced. In most of the countries in the world, the proportion of milk
delivered to the dairies is over 90%. The trends are now changing fast in India too it is
expected that the processing of milk on organized scale will increase sharply in developed
countries. This will consequently increase the opportunities for value addition. While the
value of the output of the dairy products in the countries food sector has increased from 5-7%
during the same period. Now, the days of milk scarcity and imports are behind us, the
organized sector can seize the opportunity of tapping the market of value added dairy
products like butter, cheese, lactose, khova, paneer, etc.

It is beyond doubt to mention that the organized dairy industry has done a splendid
job by transformation itself from an import-dependent enterprise to self-sufficient industry
and the embarking on export of various products. And, now it is poised for another wave of
expansion by undertaking large-scale production of milk in the organized sector.
CHANGING PATTERN OF THE INDUSTRY

The demand for milk and milk products in the country is on the rise. The increase in
purchasing power and pace of urbanization is leading to a change to a change in the lifestyle
and consumption habits of the households .the current trends indicates that 44% of the total
population would be urban. This will definitely lead to an increase in consumption of dairy
products.
The domestic market for butter and ghee is growing at a healthy rate of over 10% per annum
but the same may not be true in case of an international market. The production and export of
butter has witnessed a major decline in some of the developed countries. The situation is now
alarming to the industries which are having international markets for this product. These
companies definitely have to think about other potential products that are gaining steady
growth all over the world.
The production of dried milk and related products has become an incurring important
segment of dairy industry. The concept was started to utilize the surplus milk manufacture of
products having good shelf life at room temperature in the flush season. Today, a number of
industries are involved in the manufacturing of variety of dried products comparable to their
western counterparts. A range of products is widely accepted for direct consumption or
they're their different applications in various products.
Ice cream, a modern frozen dairy product, is relatively new addition in India. At present, the
market reach of an ice cream may not be very large. But, the potential market is more than
the ten times. That might be one of the reasons that a company like unlived group has

delivered into this segment to build their brands and capitalize its production in Indian
market. Today, ice cream is treated as one occasional treat but the dairy is not for off when it
transfers itself into a dairy delight of the masses. It is expected that ice cream will constitute a
sizeable part of the dairy.
Cheese, which is considered a main delicacy in the breakfast in so many countries,

hasn’t been given its due status so far. About 2% of the total milk production goes into cheese
preparation. The demand in India is mainly confined to urban centers and armed forces.
However as the awareness towards cheese is spreading, the demand is gathering momentum.
The export potential of cheese has generated interested in the private sector in setting up
larger units.
A major quantity of milk output is converted into varieties of traditional dairy products
catering to regional tastes. These products are produced in large quantities but on a small
caused by the organized sector, by using the old process that is empirical in nature.
There are so many popular products but still those are being prepared in households.
Hardly, efforts have been made to capture and capitalize in this area.
Strategies to boost Indian dairy products globally

 Improve the quality of the products.
 Value addition into widely accepted products.
 Improving productivity and reducing the cost of production.
 Building brands.
 Public relations and strict measures to avoid misinformation, viz., and superiority of
buffalo milk synthetic milk.
 To lead in milk production.
 Research and development.
 Energy conservation.
 Utilization of desirable constituents from the waste rather than draining.

2. 2 COMPANY PROFILE
KARNATAKA COOPERATIVE MILK PRODUCERS FEDERATION

LIMITED (KMF)
KMF is the Apex body Karnataka representing dairy farmer’s co-operatives. It is the
third largest the dairy cooperatives in the country. In south India it stands first in terms of
procurement as well as sales. One of core functions of the federation is marketing of milk and
milk products. The brand ‘NANDINI’ is the household name for pure and fresh milk and
milk products.
KMF has 13 milk unions throughout the state, which procure milk form primary dairy
cooperative societies (DCS) and distribute milk to the consumers in various towns/cities/rural
markets in Karnataka.
The first ever world bank funded dairy development program in the country started in
Karnataka with the organization of village level dairy co-operatives in 1974.the AMUL
pattern of dairy co-operatives started functioning in Karnataka from 1974-75 with the
financial assistance form world bank, operation flood II & III. The dairy co-operatives were
established under the ANAND pattern in a three tier structure with the village level dairy co-
operatives forming the base level, the district level milk unions at the middle level to take
care for procurement, processing and marketing of milk and the Karnataka milk federation as
the apex body to co-ordinate the growth of the sector at the state level.

Coordination of the activities among the unions and developing market for milk and
milk products is the responsibility of KMF. The respective milk unions organize marketing
milk in the respective jurisdiction. The federation monitors surplus/deficit of liquid milk
among the member milk unions. While and outside the state, all the milk and milk products
are sold under a common brand name NANDINI.
BACKGROUND AND INCEPTION OF THE COMPANY
Mysore milk union was registered in the year 1987. The product dairy was then
managed by Mysore dairy. In the year 1988, the product dairy, Gejjalagere was handed over
to Mysore milk union.
MYMUL with its headquarters at Mysore has got milk plant of 2.0-lakh litter’s
capacity. It has three chilling centers at Ch-nagara, Hunasuru and Kollegala. The dairy as a
spread of 10 acres of land at Mysore.
MYMUL was a part of Mysore milk union till 1987. In 1988 started union marketing
about 5000 lts per day which gradually extended to about 15000lts. There come a boom
through the at advent of milk marketing in Bangalore city from 1993. as an today the milk
sales is about 1.59lakhs litters per day (1.24lts in sachet and 0.35 lakhs it’s in bulk) with
annual turnover of Rs65 crores alone on this account out of the total RS 100 crores turnover
through the sales including milk products, butter, gee, burfi, lassies, curd etc.. it has steady
and continuous profits from 1994-95.
The philosophy of union is to eliminate middlemen and organize institution to be

owned and managed by the milk producers themselves, employing professionals and to
achieve economies of scale to ensure maximum returns to the milk producers.
2.3 NATURE OF THE BUSINESS CARRIED
The MYMUL is stand for Mysore milk producers co-operative union limited. the
name implies union is found for the purpose of the milk producers who were un-organized in

nature in earlier days before foundation of the unions. The nature of the the organized milk
union formed for the protecting the interest milk producers who were un-organized in the
nature of olden days. But In previous days milk producers were, who situated in villages are
use to keep cows, buffalo’s, goats, sheep’s etc. in that time what milk they produced is has no
any organized market and they were not getting reasonable price for produced milk. They
provide milk producers status in that time how they un-organized in nature. These are the
basis for the foundation of these dairy union
The mainly union stands for accumulating the milk from the milk producers who
located in the villages bulk numbers. From village level co-operative societies milk
transported through trucks to district milk union. These Union supplies that milk to the milk-
buying customers who located in the urban areas. They use to fix the reasonable price to both
buyers and milk producers.
2.3 VISION, MISSION AND QUALITY
Vision
To grow in to model cooperative milk union in the country by accomplishing the

mission of assuring rural prosperity in the lives of member milk producers in Mysore dist.
As a part of long-term growth oriented development strategy, the union is expanding

rapidly by implementing several infrastructure projects and schemes. Union can play an
important role in assuring rural prosperity in the lives of the milk producers.
Mission
Assuring the rural property in the lives of member milk producers in Mysore district and to
provide good quality of milk and milk products to the people of urban People
The Quality Policy and Objective

1. To encourage rural farmers to engage in dairy forming and producing more milk and
good quality of milk at least cost.
2. To provide assured and remunerative market for the milk produced by the farmer
members.

3. To provide good quality of milk and milk products to the people of urban area by
scientifically processing the milk obtained from rural area.
4. To build village level institution co-operative sector to manage the dairy activities.
5. To provide good quality milk and milk products at competitive price to urban and
rural consumers.
In order to fulfil the objective of union is constantly engaged in working towards

improvements of the business as well as the welfare of the producer members. This has
resulted in greater performance on commercial as well institutional fronts.
2.4 Product and service profile.
The product profile, which refers to the study of the products information of the company.
The various milk and milk products manufactured at MYMUL are shown in the below table.
The Table 2.1 shows types of milk and milk product
MYMUL has manufactured the following products:
Products of mymul
Type of product Product Image Quantity Available in
Nandini Toned Milk 520 ml, 1 litre

Nandini Homogenized Toned Milk 270 ml, 500 ml
Nandini Homogenized Cow Milk 515 ml
Nandini Curd 215 grams, 515 grams
Nandini spiced Buttermilk 200 ml
NandiniShubam Milk 515 ml
Nandini Sweet Lassi 200 ml

200 ml, 500 ml, 1 litre, 15

Nandini Ghee
kg
NandiniPeda 100 grams, 250 grams
25 grams, 100 grams, 250

Mysore Pak
grams
Products:
1. NANDINI FULL CREAM MILK: full milk: contain 6.1% far and 9% solid not fat.
Rich creamier and tasted milk. Ideal for preparing homemade sweets and
savouries.available in 500 ml
2. NANDINI HOMOGENIZED TONED MILK: nandini homogenized toned milk is
pure milk, which is homogenized and pasteurized, consistent right through. Available
in 500ml packs.it gives you more cup of tea and coffee and is easily digestible.
3. NANDINI GHEE : a taste of purity, nandini ghee made from pure butter it is fresh
and pure with a delicious flavor, hygienically manufactured and packed in a special
pack to remain the goodness of pure ghee. Shelf life of six months ambient
temperatures. Available in 200ml, 500ml, 100ml, sachets and 15kgs tins.
4. NANDINI CURD: nandini curd made by pure milk,and it is thick and delicious. Give
you all the goodness of homemade curds. Available in 200gms and 500gms sachet.
And 1 ltr packs.

5. NANDINI STANDARDISED MILK: this milk contains 4.6% fat and 8.5% solid not
fat. Available at 500ml pack.
6. NANDINI PEDA: no matter what you are celebrating nandini peda from delicious
treat for the family made by pure milk, stored at room temperature approximately
seven days. Available in 50 grams for pack containing 10 pieces of each.
7. NANDINI MYSORE PAK: fresh and delicious, nandini Mysore pak is made from
high quality Bengal gram, nandini ghee and sugarcane. Available at 250grams and
500grams.
8. SWEET LASSIE: sterilized flavored milk, nutritious and healthy milk and an all
season wholes home drink available at different flavours.
9. MASALA MAJJIGE: it is one of the drink available from dairy.it should be
prepared with masala ingredients.
10. NANDINI BUTTER: It is rich, smooth and delightful. Nandini butter is made from
fresh pasteurized cream. Available at 100gms, 200gms.and 500gms packs.
11. NANDINI SHUBHAM MILK: pure milk contains 6%fat and 9%SNF.a rich, creamer
and tastier milk which is ideal for preparing homemade sweets and savories.
Available at 500ml and 1 litre packs.
12. NANDINI MILK POWDER: nandini milk powder gives purity and taste as similar
as liquid milk.it can be stored for longer time than liquid milk at room
temperature.avalible in 100 Gms, 200 Gms, 500 gms and 1 kg packets.
Following is the general information of MYMUL plant in Mysore:

Area of the dairy: 10 acres
Handling capacity 2, 74,000 LPD.
Estimated cost of building: 2.89 crores
Number of employees 380
SERVICE PROFILE:

The service profile of the MYMUL is characterized by motive of providing service

without expectation. The service provided by the union is completely for service purpose
rather than commercial purposes they are render service to their customers in the sense of the
serve the milk producers who supplying the milk to the union. We can call this union’s
service motive as “maximum service with minimum expectancy”. The analysis of the service
profile of MYMUL as follows.
1. Step program: This program is developed for the purpose of creating the employment
opportunities for women’s in this sector.
2. Training and development programs: In order to achieve the objective of development
of milk producer’s dairy activities and dairy milk co-operative societies status, the
union is conducting a training and development programs for staff members of dairy
co-operative societies and milk producers.
3. Dairy food development: This is an important service provided by the union of its
milk producers. The union is providing developed green food growing and healthy
cattle feed to healthy development of dairy animals. To achieve this are providing
cattle feed, which produced by the union to sell for the rural milk producers, through
its dairy co-operative societies.
4. Providing assistance in organizational development to dairy co-operative societies.
5. Conducting dairy animal’s health awareness and milk production improvement
programs.
6. Storage services and technical assistance to dairy co-operative societies.
2.5 AREA OF OPERATION

As a district milk union of KMF, the union has no opportunities to expand their operation.
This because the MYMUL is structured under KMF as a district milk union of Mysore
district. The union itself acts as a branch of KMF but the union has opportunities by way of
marketing its milk products out of its limited market borders means of its district market
borders.

The district milk unions are managed by the KMF, which acts as a mother of organization
to all other district unions in Karnataka. The union received all types demand orders from in
and outside company. Especially milk powder is more demand from foreign countries the
union will produce other milk product according to their demand rate.
MILK PROCUREMENT
Co-operative societies of dairy function : 895
Societies registered in dairy : 936
Outcome routes : 71
Distribution centers : 4
Capacities covered : 2
: Cities covered : more than 2000
MILK DISTRIBUTION
Basis routes : 35
States covered : 2
Promoting agents : 60
Export agents in urban : 374
Trade agents in rural : 235
Milk plants : 48

OWNERSHIP PATTERN OF MYMUL
The ownership pattern in the MYMUL is characterized by the members share capital
investment. The members of the unions are dairy co-operative societies (DCS), which
parented by district milk union. The unit, acts as representative member of district milk union
by located in villages, is called as dairy co-operative societies of respective village.
The capital structure of union is a accumulation of member share investment which

invested by every member of dairy co-operative societies in village to get the membership as
milk supplier to the district milk union
Member of share capital structure of the union is as here Accumulated members of

share capital in the union is share capital; this share capital is deposited in MYMUL bank
account in the name of respective member dairy co-operative societies.
2.6 INFRASTUCTURAL FACILITIES IN MYMUL
a. Production Infrastructure Facilities

Good nature and flexibility to fulfill the production demands characterize the
infrastructure facilities in MYMUL. The union has good milk processing plant, which
supported by new advanced technology. MYMUL was a part of Mysore, tumkur milk unions
till 1987. In1988 it started marketing about 5000 liters a day, which gradually extended about
15,000 liters.
MYMUL has got liquid milk plant two-lakh liters capacity and powder plant of ten M T
capacities per day through the assistance of national dairy development board (NDDB). It has
chilling centers at Nagamangala, Malavalli and K.R. Pet. The dairy was spread of 47 acres
of land at Gejjalagere and 3 acres of each at K.R.Pet, Nagamangala and . The union has it
own trucks for transporting the milk from dairy co-operative societies to its manufacture
units, with good milk earning networks

a. Canteen facilities for employee and workers: As a Section 46 of factories act, at

1948 imposes statutory obligation to employees to provide canteens in premises employing
more than 300 workers, in MYMUL a big canteen is situated beside the working complex to
provide canteen facilities.
b. Accommodated buildings for operations of the union: The union has good
building infrastructure facilities to smooth functioning of different department’s day-to-day
operations in organization.
ACHIEVEMENT/AWARDS EARNED BY MYMUL

On 26-03-2005 the union is recognized as “ONE OF THE HONEST INCOME TAX
PAYER” by the commercial taxes department. The Other achievements of union can be
revealed in following milestones of the union.

1. Establishment of 18 co-operative societies in district, which fully administered by women

members.
2. In 1993-94 the union has increased its milk production plant capacity to 2.0-lakh ltr.
3. In the year of 2002-03 the union has got the international license. The MYMUL is the
first south milk union in getting this license.
4. In the year 2003-04 the union has developed consolidated price list for cow’s milk
and buffaloes milk, which is first in its types in all over Karnataka. In the same period
union released double toned milk.
2.7 COMPETITORS INFORMATION
MYMUL largest milk industry in Mysore and chamarajanagar. Both the districts are having
more villages or rural areas. Therefore tough competition from milk vendors and other milk
industries. The competing Brands are: -
 MUKUNDA
 FRISH MILK
 AROKYA
 JERSY
 DODLA MILK
 SWSTIK MILK
 THIRUMALA
 NANDA
 HERITAGE MILK
Many Individual Customers and small Dairy for Street Milk Tanker, Parallel Milk
Storage Tanks and Milk Treatment Equipment’s from Maharashtra, Andhra Pradesh,
Karnataka, Tamil Nadu, Gujarat etc. are GRB, Sri Krishna, Revati, Joy, MTR, etc.

WORK FLOW MODEL OF THE MYMUL
Production process has the following workflow model.
DCS
Fresh Liquid Milk
Chilling Sample Testing Fat and SNF
Storing
Homogenization
Separation
Pasteurization
Storing
Packing
Dispatching

PRODUCTION PROCESS
The main objective of this department is to follow up production schedule as per the plan and
to maintain close and co-ordinate relationship with other departments and ensure to upgrade the
technical efficiency of production. Milk, as is a highly perishable product, has to be processed
immediately to avoid spoilage with respect to the flavor, quality and taste.
Production department is well equipped and has various types of highly sophisticated
machines imported from Sweden and Denmark. Once the milk is received from P&I department, it is
first weighted with the help of weighting bowl. Later, it is poured in tip tank. Sample testing made
through lactometer reading and other tests. The fat and SNF content of each sample of milk is
accessed.
Later, the raw milk is passed through plate chiller of capacity where it is cooled up to 4-50
Celsius. This cooled raw milk is further stored in a storage tower of 30,000 liters capacity.
 DISTRICT CO-OPERATIVE SOCITIES (D.C.S):
 Milk reception collects the milk from the co-operatives. The raw milk comes in vans which
enter the input dock. The cans go one by one through a machinery track, workers check the
cans, and write the number of liters of milk contained in the cans.
 FRESH LIQUID MILK (SAMPLE TESTING):
 Quality control mainly concerns with the quality checkup of milk collected from co- operative
societies. The quality control department takes the sample of milk and analyses the fat content
and divides it, like fat and SNF (solid not fat).

 CHILLING & STORING:
The collected raw milk is chilled in the system at 50C for bringing down the temperature of
atmospheric temperature. After chilling, the milk is transferred to the silos (container) and milk is
standardized. After milk standardization, the milk is drawn from silos for pasteurization. In
pasteurization process, the milk is heated to 750C and cooled to 50C, and then it is stored in silos
again.
o The pasteurized milk is transferred to cream separation tank. Here, the cream is
separated and stored in cream storage tank. The cream separated milk is passed to
further processes.
 HOMOGENIZATION, SEPERATION & PASTRURIZATION:
o In separator, fat percent is removed from milk (raw milk contains 4.3 % of fat and
dairy milk packet contains mainly 3 % of fat). The separator separates milk on the
basis of fat like Toned milk 3 % fat and 8.5 % SNF.
o The required quantity of standardized and pasteurized milk is transferred for further
production of milk products like Butter, Ghee, Milk Powder, Peda etc.,
 PACKING & DISPATCHING:
o After the above-mentioned process is completed the milk and milk products goes to
packing section. They are packed and dispatched according to the shifts.

2.8 SWOT ANALYSIS

STRENGTHS:
 Nandini is a strong brand value.

 Highest market share among the organized brands in the packed milk market segment.
 Strong distribution of networks (cold chain distribution for quality milk supply).
 Price leader in the organized market (less price compared to competitors).
 Geographical location in order to quick supply of milk in the market.
 Local milk processing and parking facilities.
 brand
WEAKNESS:
 advertisement
 Channel members not loyal to Nandini.
 Consumer not getting milk at MRP.
 Research and development facilities.
OPPORTUNITIES:
 New product innovation

 To export its products to other states
 Growing institutional demand for homogenized milk.
 Vast rural market potential.
 Scope for milk variants and milk products.
 Market expansion
 Servicing the below poverty of low income people with new schemes
THREATS
 Competition with local dealers

 Many private firms have entering.
 Rapid growth in technology.
 Lakh of consumer awareness

2.9 FUTURE GROWTH AND PROSPECTS
 The union intends to establish total of 100 DCS by the end of 2010.
 Planed to establish artificial insemination centers and chilling centers across the
district.
For this they are expected expenses of Rs 16800 for single AIl centers, and Rs 201600
For cluster centers.
 The milk procurement is expected to increase to 44850-kgs.per day.

 The local sales are expected to 108610 LPD and bulk sales are 51610 LPD.
 Cattle food sales will also be increased to 106 metric ton.

2.10 FINANCIAL STATEMENT
BALANCE SHEET
Particulars 2010 2011 2012 2013 2014
Liabilities
Capital Account 285606827 385646834 457119133 550156983 738815315
Loans 70278651 152028450 96072688 149795197 230469477
Current Liability 96235854 218582463 167280898 288419747 599923413
Profit and Loss 86958441 114305798 102693946 84223271 107338209

Account
Total 539079773 870563546 823466665 1072595199 1676546414
Assets
Fixed Assets 250159222 260587644 277297008 348163007 489648885
Investments 19619212 126371278 60048369 24607384 77053491
Current Assets 269301339 493604624 485821288 699824808 1109844039
Total 539079773 870563546 823166685 1072595199 1676546414
3. MC-KINSEY’S 7-S FRAMEWORK

McKenzie’s 7s frame work with special reference to organization under study.

Mc Kinsey’s 7S frame work was developed in the late 70’s Mc Kinsey Company, a reputed
management consultancy firm in the United States.
McKenzie’s 7s frame work with special reference to organization under study.
The structure rest on proposition that effective organizational change is best understood in
terms of complex relationship between Strategies.
1. strategy
2. Structure
3. Systems
4. Style
5. Skills
6. Staff
7. Shared values (or super-ordinates goals)
1) Strategy:
Strategy refers to those actions that a company plans in response to or in
anticipation of changes in its external environment, its customers and its competitors.
It is a plan or course of action leading to the allocations of an organization’s finite
resources to reach identified goals.
Push Strategy- In this type of marketing strategy the activities are incentives, gifts etc. are
given to dealers to introduce them to enhance the sale of milk to end users. The marketing
activity is not implied upon end users in this case, the idea is to push the product through the
help of the dealers and other intermediates.
Pull Strategy – Here the marketing activities are focused on the end users by providing
them with gifts, incentives; mason meet engineers meet, etc. so that demand is created in the
market and is sold to dealers in lieu of demand created in the market by end users.

ORGANIZATION STRUCTURE
President
Director Director
Director Director Director
(Govt) (Govt) (Society)
(DCS) (NDDB)
MANAGING DIRECTOR
Procurement Product Marketing Admn Finance

Dept. process Dept. Dept. Dept.
Dept.
Quality FGS & Account &

Transport Control Stores MIS Purchase

3. System:
Rules, regulations and procedures constitute ‘system’s in the 7-S frame work, which
complement the organizational structure. The ‘System’, may be called the ‘infrastructure’
and include sub-systems relating to production planning and control, cost accounting
procedures, capital budgeting, recruitment, training and development, planning and
budgeting, performance evaluation of organization in the KMF Unit, of Mysore dairy.
4) Staff:
It refers to the way organization initiate young recruits into the main stream of activities and
manner in which they manage their careers as the new entrants develop into managers.
5) Skills:
‘Skills’ refers to the ‘distinctive’ competence, which reflects the dominant skills of an
organization.
Closely related to staff are the distinctive abilities and talents that a company
possesses. Skills may range from ability of a staff to speak Spanish to an understanding of
Statistics to computer literacy etc.
6) Style:
‘Style’ is another variable, which may determine the effectiveness of organizational

change effort; style determines the culture of the organization
The culture of the organization, consist of two components:
 ORGANIZATION CULTURE: the leading value and beliefs, and norms, which
develop over time and become relatively enduring features of organizational file.
 MANAGEMENT STYLE: more a matter of what managers do that what they say;
how do a company’s managers spend their time? What are they focusing attention

Symbolism – the creation and maintenance (or sometime deconstruction) of meaning is a

fundamental responsibility of managers.
7) Shared values:
Shared values in the Mc-Kinsey’s model refer to the set of values and aspirations that
go beyond the formal statement of corporate objective.

CHAPTER-3
THEORITICAL BACKGROUND
FINANCIAL STATEMENT ANALYSIS:
Financial statement Analysis is a tool for business analysis. Business analysis is the
evaluation of the company prospects and risk for the purpose of making business decisions.
Different stakeholders Analyze business for different purpose. An Investor an analyst analyze
a business for valuation of equity and debt
TOOLS AND TECHNIQUE OF FINANCIAL ANALYSIS ARE:
 Comparative Financial statement

 Common size financial statement
 Trend Analysis
 Ratio Analysis
 COMPARITIVE FINANCIAL STATEMENT

Analyst review consecutive balance sheet, Income statement or statements of cash flows
from period to period, usually from year to year, comparative financial statement analysis
reveals Trend. An analysis of financial statement over several years reveals the direction,
speed and extent of the trend, comparison of statement over a long period is sometimes
unmanageable and is difficult to understand, compare financial statement over a short
period of 2 to 3 years.
 COMMON SIZE FINANCIAL STATEMENT :

Common size financial statement analysis helps understanding what proportion of a
group are sub group is made up of a particular account, In analyzing balance sheet it is

common to express invested capital of Total asset as 100 percent. Then each line item
within This group is expressed as a percentage of the Total of invested capital or total
asset. Invested capital is the amount of total asset minus intrest free credit. It is also
known as vertical Analysis.
 TREND ANALYSIS:
Trend percentage is very much helpful in making a comparative study of the financial
statement for several years. The way of calculating trend percentages involves the
calculation of percentage relationship that each item bears to the same item for the base
year. Each item for the base year is considered as 100 and a basis the percentage for each
of the items of base year is taken is calculated.
Trend analysis
Basic formula for trend analysis
Current year
Base year
 RATIO ANALYSIS:
Ratio analysis is a powerful tool of financial analysis used by financial analyst. It is the
process of creating and understanding different ratios showing quantitative relationship
between figures and groups of figures. Ratio is useful for assessment of business
performance, evaluation of financial condition of an enterprise and making decision in the
business.
A ratio is a simple arithmetical expression of the relationship of one number to another.

It may be defined as’’ The quotient of two mathematical expressions’’. A ratio can be
expressed as a proportion, some analyst express ratio as a rate of time.

Ratio analysis is technique of analysis and interpretation of financial statement. The

process of establishing and interpreting various ratios for helping in making certain financial
decision.
TYPES:
Static Analysis: It is a type of analysis which involves only one year financial statement.
Trend analysis: It involves the study of financial statements of two or more years.
ADVANTAGES:
 Trends in costs, sales, profits and other related facts are revealed by the past ratios and
future events can be forecasted on the basis of such trends.
 Ideal ratios can be constructed and the relationship found between strategic ratios can
be used for achieving the desired coordination.
 Ratio may be used as instrument of management control, particularly in the area of
sales and costs,
 Ratios also facilitate the function of communication. It can be easily conveyed
through the ratios as what as happened during the two intervening periods.
 Ratio may also be used as a measure of efficiency. Since the ratios bring consistency
in the financial rate, inter firm comparison is made possible.
 It helps in investment decision to make profitable investment.
 Ratio analysis helps not only the management but also outsiders like creditors,
shareholders etc.

DISADVANTAGES:
 The accuracy and exactness of ratios are totally depended on the reliability of the data
in the financial statements on the basis of which ratios are calculated.
 Ratio may make the comparative study complicated and misleading accounting
changes in price levels.
 Time lag in calculating the ratios and communicating the same to the concerned
person should not unnecessary being too much.
TYPES OF RATIOS:
In the view of financial management there are four types of ratios
There are:
 Liquidity ratio
 Solvency ratio
 Activity ratio
 Profitability ratio
1. LIQUIDITY RATIOS:
Liquidity refers to the ability of a firm to meet its obligations in the short run, usually
one year. An enterprise should have enough cash and other current assets which can be
converted into cash so that it can pay its suppliers and lenders on time.
a) Current Ratio:

Current ratio may be defined as the relationship between current assets and current
liabilities. It is a widely used indicator of the company’s ability to pay its debts in the
short-term.
Formula: current ratio = Current assets
Current liabilities
Current assets include loans and advances, bills receivables, sundry debtors and
inventories, work in progress these assets are easily converted into cash within a short
period of time generally one year.
Current liabilities are those obligation which are payable within a shorter period of time
generally one year. It includes bills payable, sundry creditors, accrued expenses, short
term advances, dividend payable etc.
b) Quick Ratio or Acid Test Ratio:
The quick ratio or acid test ratio is calculated by deducting inventories from the
current assets and then dividing the numerator by current liabilities. Inventories are
the least liquid of firm’s current asset: hence losses are most likely to be occurred on
these assets in bankruptcy. Therefore measure of the firm’s ability to pay off short
term obligations without relying on the sale of inventories is important.
2. Solvency Ratios:
It refers to the ability of the firm to pay both short term and long term liability. It is
the ratio which expresses the relationship between total assets and total outsider
liabilities of an organization.

a) Debt equity Ratio:

Debt equity ratio shows the relationship between long-term debts and shareholders
funds’. It measures the relationship of the capital provided by the creditors to the
amount provided by the shareholders.
b)Interest coverage Ratio:

The interest coverage ratio is a measure the number of times a company could make the
interest payments on its debt is also known as EBIT.The lower interest coverage ratio,
higher the company’s debt problem and the greater the possibility of bankruptcy or default.
c) Proprietary or Equity Ratio:
The proprietary ratio is the proportion of shareholder’s equity assets, and it provides
uneven estimate of the amount of capitalization currently used to support a business. High
ratio indicates that a company has a sufficient amount of equity to support the functions of
the business .A low ratio indicates that the business may be making use of too much debt or
trade payables rather than equity, to support those operations.
Proprietary or equity ratio: shareholder Fund

Total Assets
DuPont Analysis:
A type of Analysis that examines company return on equity by breaking it into three major
components, Turnover margin, asset revenue and leverage factor. By breaking up the ROE

into distinct parts. Investor can be examined how effectively a company is using equities,
since it has poorly performing components will drag down the overall figure.
To calculate firms ROE through DuPont Analysis multiple the profit margin, Asset
turnover, leverage factor Together.
Activity Ratio:
Activity ratio is also referred to as Turnover Ratio or Asset management Ratio,
measure how efficiency the assets are engaged by a firm. The ratios are based on
relationship between the levels of the activity, characterized by sales or cost of goods
sold, and the levels of several assets.
a) Inventory Turnover Ratio:

Inventory turnover Ratio or stock turnover ratio measure how fast the inventory is
moving through the firm and generating sales. It has defined

Formula: Inventory Turnover Ratio = Cost of goods sold

Average stock
b) Debtors Turnover Ratio;

This Ratio depicts that the number of periods sundry debtors turn over during the
year.
Fixed Assets Turnover Ratio:
This Ratio measures sales per rupee of investment in the fixed assets. It can be
defined as
Formula:
Net sales
Average net fixed assets
a) Working capital Turnover Ratio:
Working capital turnover ratio indicates whether working capital is effectively

utilized in making trades. It measures the efficiency in working capital management.
The objective of computing this is to determine how efficiently the working capital is
utilized in making sales.
3) Profitability Ratio:

The main aspect of an enterprise is to earn profit which is necessary for the survival
and growth of the business enterprise it is earned with the help of invested in business.
It is required to know how much profit has been earned with the help of amount
invested in industry. It is possible through profitability ratio.
These ratios examine the current operating performance and efficiency of
the business concern. These Ratios are very much helpful for management to take
remedial measures if there is a declining trend.
 Gross Profit Margin Ratio:

Gross profit measures the relationship of gross profit to net sales and is usually
represented as a percentage.
 Net profit Margin Ratio:

, The net profit margin is not very good at comparing companies in the different
industries. It is good, at however, the comparing companies in the same industry if
you want to look at the bottom line.
It is a good time series analysis measure by business owners can look at data for their
own company across different time periods to see how the net profit margin will be
Trending. Financial ratios are only useful when the comparative analysis is used.

CHAPTER-4
ANALYSIS AND INTERPRETATION OF THE DATA
Comparative statement;
Analysts like comparative statements because they show the effect business decisions have
on a company' lowest line. Analysts identify trends and to evaluate the performance of
managers, and for new lines of business and new products on one statement instead of having
to flip through individual financial statements from different periods of time. When compare
the different concerns, a comparative statement shows how business react to market
conditions affecting an entire industry.
Comparative balance sheet of 2011-12 to 2012-13

Particulars 2011-2012 2012-2013 Increase/decrease Increase/decrease

(amount) %
Source Of Fund
Capital Account 45,71,19,133 55,01,56,983 9,30,37,850 20.35
Loans 9,60,72,688 14,97,95,197 5,37,22,509 55.91
Current Liability 16,72,80,898 28,84,19,747 12,11,38,849 72.41
Profit and loss 10,26,93,946 8,42,23,271 1,84,70,675 17.98
A/C
Total 82,31,66,665 1,07,25,95,199 24,94,28,533 30.30
Application of
fund
Fixed assets 27,72,97,008 34,81,63,007 7,08,65,999 25.55
Investment 6,00,48,369 2,46,07,384 3,54,40,985 59.02
Current asset 48,58,21,288 69,98,24,808 21,40,03,520 44.04
Total 82,31,66,665 1,07,25,95,199 24,94,28,534 30.30
TABLE 4.1

Increase/decrease Increase/decrease
Particulars 2012-2013 2013-2014
(amount) %
Source of fund
Capital Account 55,01,56,983 73,88,15,315 18,86,58,332 34.29
Loans 14,97,95,197 23,04,69,477 8,06,74,280 53.85
Current Liability
Profit and loss
28,84,19,747 59,99,23,413 31,15,03,666 108
A/C
8,42,23,271 10,73,38,209 2,31,14,938 27.44
Total 1,07,25,95,199 1,67,65,46,414 60,39,51,216 56.3
Application of
fund
Fixed assets
Investment 34,81,63,007 48,96,48,885 14,14,85,878 40.63
Current asset 2,46,07,384 7,70,53,491 5,24,46,107 213.13
69,98,24,808 1,10,98,44,039 41,00,19,231 58.58
Total 1,07,25,95,199 1,67,65,46,414 60,39,51,216 56.3

Current assets
The investments in the current Assets are very high. The current assets has been increased by
44.04% in the year 2012-2013 from 2011-2012
In the year.2012-2013 TO 2013-2014 it has been majorly increased to 58.58% where this
says the company has made a huge investment on current asset compared to the previous
years.
NET FIXED ASSTES
The investments in the fixed assets are very high. The fixed assets has been increased by
25.55 in the year 2011-2012 TO 2012-2013
In the year.2012-2013 TO 2013-2014 it has majorly increased to 40.63% where this says the
company has made a huge investment on fixed assets compared to the previous years
INVESTMENT
The investments has been decreased by 59.02 in the year 2011-2012 TO 2012-2013
In the year.2012-2013 TO 2013-2014 it has majorly increased to 213.13% where this says the
company has made a huge increase in investment compared to the previous years.

Current liability
Current Liabilities includes current liability and provisions. Current liabilities are increase to
72.41% in 2012-13 when compared to 2011-12. In the year 2013-14 current liabilities
increased by 108% when compared to 2012-13.
4.2 INCOME STATEMENT
The income statement includes three major financial statements. The other two are statements
balance sheet and statement of cash flows. The income statement is differentiated into two
parts: the operating and non-operating sections.
The portion of the income statement that deals with operating items is interesting to investors
and analysts alike because this section discloses information about revenues and expenses
that are a direct result of the regular business processes. For example, if business created
athletic equipment, then the operative items section would speak about the revenues and
expenses involved with the production of sports equipment
TABLE: 4.3
Table showing Comparative income statement of 2011-12 to 2012-13
TABLE SHOWING COMPARITIVE INCOME STATEMENT IN THE

YEAR 2013-14

particulars 2012-2013 2013-2014 Increase/decrea Increase/decre

(Rupees) (Rupees) se ase
(Rupees) %
Sales account 5,12,09,55,505 6,26,71,72,709 1,14,62,17,204 22.38
Cost of sales
Opening stock 11,65,03,229 27,71,31,219 16,06,27,990 137.87
Add: purchase
A/c 4,51,85,12,694 5,16,23,72,104 64,38,59,410 14.24
Less; Closing 27,71,31,219 13,63,54,787 14,07,76,432 50.79

stock
Direct Expenses 51,23,80,766 49,67,24,075 1,56,56,691 3.05
Gross profit 25,06,90,035 46,73,00,098 21,66,10,063 86.40
Income
Statement
Add: Indirect 1,89,83,244 2,39,56,726 49,73,482 26.19
income
Less: Indirect
Expenses 20,00,66,910 40,28,24,984 20,27,58,074 101.34
Profit before Tax 6,96,06,368 8,84,31,840 1,88,25,472 27.04
Less: Income Tax 2,32,00,000 2,75,00,000 43,00,000 18.53
Net Profit 4,64,06,368 6,09,31,840 1,45,25,472 31.30
TABLE: 4.4

Interpretation
On the basis of Comparative income statement it can be said that gross profit for the year
2011-12 has increased by 24.55% over the profit 2012-13. In the year 2012-13 the profit is
decreased by 24.55%. The net sales during the same period have increased by 35.02% in
2011-12. In the year 2012-1 the net sales has increased by 20.88% and direct expenses has
increased by 29.17% in 2011-12 over the profit 2010-11. In the year 2012-13 direct expenses
increased 140.39%. Indirect incomes is increased by 51.54% in 2011-12 in the year 2012-13
the indirect incomes decreased by 47.74%. The profit before tax of both the year has been
gradually decreasing from the year 2010 to 2013. But the net profit of the year 2012-13 has
been increased by 2.63%.
4.3 TREND ANALYSIS
Emphasize on change in financial and operational data from the year to year with the help of
trend analysis. It is possible to identify the areas in which the organization has achieved
improvement over the year.
Trend Percentage
Trend percentage is very much helpful in making a comparative study of the financial
statement for several years. The way calculating trend percentage involves the relationship
that each item bears to the same item in the base year. Each item the base year is will be
taken as 100 and a basis the percentage for each of the items of base year is calculated.

Trend analysis amount in (lakhs) TABLE: 4.5
Particulars 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Net sales 2269 3133 4236 5120 6267
Gross profit 2943 3402 3322 2506 4673
Profit before 8219 8078 6600 6960 8843
tax
Net profit 5613 5516 4521 4640 6093
Current assets 2693 4936 4858 6998 11098
Current 9623 21858 16728 28841 59992
liabilities
Fixed assets 2501 2605 2772 3481 4896
1. Net Sales
Chart showing net annual sales
Years Net
Sales(Amount
in Lakh)
2009-2010 2269
2010-2011 3133
2011-2012 4236
2012-2013 5120
2013-2014 6267
TABLE: 4.6

Figures showing Net Sales (TABLE: 4.6)
Net Sales(Rs in Lakhs)

7000
6000
Net Sales(Rs in Lakhs)
6267
5000
5120
4000
4236
3000
3133 Net Sales(Rs in Lack)
2000
2269
1000
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year
Interpretation
Net sales of MYMUL have been increased in 2013-14 Rs 6267 lakh this is the highest sales
in a company compared to the previous year Net sales in the year 2009-2010 is Rs 2269
lakhs, 2010-11 is Rs 3133 lakh, 2011-12 is Rs 4236lakh and 2012-13 is Rs 5120 lakh
2. Gross profit

Diagram shows gross profit
Years Gross profit

2009-2010 2943
2010-2011 3402
2011-2012 3322
2012-2013 2506
2013-2014 4673
TABLE: 4.7
Chart showing gross profit
Gross profit
5000
4500 4673
4000
3500 3402 3322
Gross profit
3000 2943
2500 2506
2000 Gross profit
1500
1000
500
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year
Interpretation
The gross profit of the MYMUL in 2009-10Rs 2943 lakh, 2010-11 Rs 3402 lakh, 2011-12 Rs
3322 is decreased.andIn 2012-13 the gross profit has been reduced at the rate Rs 2506 lakhs
and in the year 2013-14 is increased by Rs 4673 lakhs.

3. Profit before tax
Table showing profit before tax
Profit before tax

Years
(Rs in Lakh)
2009-2010 8219
2010-2011 8078
2011-2012 6600
2012-2013 6960
2013-2014 8843
TABLE: 4.8
Images show profit before tax.
PBT(Rs in Lakhs)
10000
9000 8843
8000 8219 8078
7000 6960
6600
6000
PBT
5000
4000 PBT
3000
2000
1000
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year

TABLE: 4.8
Interpretation
The profit before tax of the MYMUL in 2009-10 Rs 8219 lakh, 2010-11 Rs 8078 lakh, 2011-
12 Rs 6600 is decreased. In 2012-13 the profit before tax is increased to Rs 6960 lakh and
2013-14 is increased to Rs 8843 lakh.
4. NET PROFIT RATIO
Table showing net profit
Net profit (Rs in

Years
lakh)
2009-2010 5613
2010-2011 5516
2011-2012 4521
2012-2013 4640
2013-2014 6093
TABLE: 4.9
GRAPH SHOWS NET PROFIT

7000 6093
5613 5516
6000
4521 4640
5000
4000
3000
2000
1000
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
Net profit (Rs in lack)
GRAPH: 4.9
Interpretation
The net profit in 2009-10 was Rsss 5613 lakhs. In 2010-11 the net profit is decreased to Rs
5516 lakh. In 2011-12 the net profit is decreased to Rs 4521 lakh and again in 2012-13 the
net profit has increased to Rs 4640 lakh. In 2013-14 the net profit has increased to Rs 6093
lakh.

5. Current assets
Table showing current assets
Current assets (Rs in

Years
lakh)
2009-2010 2693
2010-2011 4936
2011-2012 4858
2012-2013 6998
2013-2014 11098
TABLE: 4.10
Graph showing current assets
Current assets (Rs in lack)

Current assets (Rs
in lack), 11098
12000
current assets(Rs in lakhs)
10000
8000
6000
4000
2000
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year
Interpretation

The current asset of the year 2009-10 is Rs 2693 lakh. In 2010-11 current asset is increased to
Rs 4936 Lakhs. In 2011-12 the current asset is decreased to Rs 4858 lakhs. And in 2012-13
the current Asset has increased to Rs 6998 Lakhs. And again 2013-14, Current asset has
increased to Rs 11098 lakhs.
6. Current liabilities
Chart showing current liabilities
Current liabilities
Years
(Rs in lakh)
2009-2010 9623
2010-2011 21858
2011-2012 16728
2012-2013 28841
2013-2014 59992
TABLE: 4.11
Image shows current liabilities

Current liabilities (Rs in lack)

59992
60000
current liabilities(Rs in Lacks)
50000
40000
30000 21858 28841
20000 9623 16728
10000
0 Current liabilities (Rs in lack)
year
GRAPH: 4.11
Interpretation
The current liabilities and Provisions of the company stood at RS 9623 lakhs in 2009-10 and
in the year 2010-11 increased to Rs 21858 lakh. In 2011 -12 the current liabilities and the
provisions are decreased to RS 16728 Lakh. In 2012-13 the current liabilities increased to Rs
28841 lakhs. In 2013-14 the current liabilities and provisions has highly increased to Rs
59992 lakhs.
7. Fixed assets
Table shows fixed assets

Fixed assets (Rs in

Years
lakh)
2009-2010 2501
2010-2011 2605
2011-2012 2772
2012-2013 3481
2013-2014 4896
TABLE: 4.12
The Diagram showing fixed assets
Fixed assets (Rs in lack)

6000 Fixed assets (Rs in
Fixed assets
lack), 4896
4000
2000
0
Fixed assets (Rs in lack)
year
GRAPH: 4.12
Interpretation

The fixed assets needs of the company have increased by Rs2772 lakh to Rs3481 lakh in the
year 2012-13 has compared to 2011-12.In the year 2009-10 and 2010-11 it has increased by
Rs2501lakh to Rs2605 lakh respectively. For the year 2012-13 and 2013-14 it has increased
Rs3481 to Rs4896 lakhs. The total fixed assets are arrived after subtracting depreciation from
the gross block and net block will be calculated current ratio
RATIO
Current Asset Ratio
Formula: Current Assets
Current liabilities
Table Showing Current Asset Ratio of Mymul from the year 2009-10 to
2013-14
Year Current Asset Current Liability Current ratio

2009-2010 26,93,01,339 9,62,35,854 2.79
2010-2011 49,36,04,624 21,85,82,463 2.25
2011-2012 48,58,21,288 16,72,80,898 2.90
2012-2013 69,98,24,808 28,84,19,747 2.42
2013-2014 1109844039 599923413 1.84
Analysis

We can observe from above table the current assets of MYMUL are going from 2009-10 to
2013-14. This current ratio table is shows the highest current ratio in the year 2011-12 as
compared to previous years. But in the year 2013-14 the current ratio is being reduced
compare to 2012-13.
Current ratio
3.5
3
2.5 2.79 2.9
current Ratio
2 2.42
2.25
1.5 1.84
Current ratio
1
0.5
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year
GRAPH: 4.13
Interpretation
It can be inferred from the above graph the solvency of the firm has been decreased from the
year 2009-10 to 2010-11 is 2.79 to 2.25. In 2011-12 the ratio has increased to 2.90 again the
ratio has decreased to 2.42. In 2013-14 the current ratio has been reduced to 1.84.this shows
the liquidity position of MYMUL is up to the mark.
Total Assets Turnover Ratio

Formula : sales
Total asset
Table No 4.14
Showing Total Assets Turnover Ratio of Mymul from the year 2009-10
to 2013-14
Year Sales Total assets Ratio
2009-2010 2,26,98,21,411 53,90,79,773 4.21

2010-2011 3,13,31,82,030 88,05,63,546 3.55
2011-2012 4,23,61,64,250 82,31,66,665 5.14
2012-2013 5,12,09,55,505 1,07,25,95,199 4.77
2013-2014 6,267,172,709 1,676,546,414 3.74
Analysis:
A higher ratio is an indicator of over trading of total assets while lower ratio reveals idle
capacity. In MYMUL the total assets turnover ratio fluctuates from year to year. This shows
there is an optimal capacity of total assets
Graph No 4. 14

Showing Total Assets Turnover Ratio of Mymul from the year 2009-10 to
2013-14
Total Assets Turnover Ratio

Total assets Turnover Ratio
6
4.21 5.14
4.77
4 3.55
3.74
2
0
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
year
Interpretation
In Above graph it is clearly shows that the total asset turnover ratio has decreases from 4.21
to 3.55 in the year 2010-11 again it increases to 5.14 in the year 2011-12.again In the year
2012-13 the ratio has decreased to 4.77 while low turnover ratios are indicative of
underutilization of Available resources.
Fixed assets turnover ratio
Table showing fixed assets turnover ratio
Formula:Fixed Asset Turnover ratio Net Sales
Net fixed assets

Year Net Sales Fixed assets Ratio

2009-2010 2,26,98,21,411 25,01,59,222 9.07
2010-2011 3,13,31,82,030 26,05,87,644 12.02
2011-2012 4,23,61,64,250 27,72,97,008 15.27
2012-2013 5,12,09,55,505 34,81,63,007 14.70
2013-2014 6,26,71,72,709 48,96,48,885 12.79
TABLE: 4.15
Analysis
This table shows the fixed asset turnover ratio is being increased every year from 9.07 in
2009-2010 to 14.70 in 2012-13.But in the year 2013-14 it has been decreased to 12.79.
Chart showing fixed asset turnover ratio from 2009-10 to 2013-14
20
15.27
15 12.02 14.7
9.07 12.79
10
5
0
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
Ratio
GRAPH: 4.15
Interpretation:

There is a continuous increase in the Ratio from 2009-10 to 2011-12.but the ratio has been
decrease to 14.7 in the year 2012-13 again it has been decreased to 12.79 in the year 2013-14.
WORKING CAPITAL TURNOVER RATIO:
Year Net Sales Networking Ratio

capital
2009-2010 2,26,98,21,411 173065485 13.11
2010-2011 3,13,31,82,030 27,50,22,161 11.39
2011-2012 4,23,61,64,250 31,85,40,390 13.29
2012-2013 5,12,09,55,505 41,14,05,061 12.44
2013-2014 6,26,71,72,709 50,99,20,626 12.29
Formula
Working capital turnover Ratio = Sales
Net working capital
Net working capital = Current Assets – Current Liabilities
Analysis
The table shows the relationship between sales and working capital, by analyzing the above
ratio in the year 2009-10 that is 13.11 times and it decreases to 11.39. In 2010-11 then it has
increased to 13.29 in 2011-12. In the year 2012-13 it has been decreases to 12.44.Again it has
been decreased to 12.29 in the year 2013-14.

Chart showing working capital turnover ratio from 2009-10 to 2013-14
WORKING CAPITAL TURNOVER RATIO
2013-2014, 2009-2010,
12.29 13.11
2012-2013, 2010-2011,
12.44 11.39
2011-2012,
13.29
GRAPH: 4.16
Interpretation:
MYMUL is having decreasing trend in working capital 2009-10 to 2010-11. In 2011-12 it has
increased to 13.29.Again it has been decreased to 12.44 in the year 2012-13. This act as an
indicator of effective utilization working capital. In 2012-14 there is a slight decrease in
working capital turnover ratio.

TABLE SHOWING GROSS PROFIT OR LOSS RATIO OF MYMUL
TABLE: 4.17
Year Gross profit Net Sales Ratio

2009-2010 29,43,13,858 2,26,98,21,411 12.97
2010-2011 34,02,09,430 3,13,31,82,030 10.85
2011-2012 33,22,84,407 4,23,61,64,250 7.84
2012-2013 25,06,90,035 5,12,09,55,505 4.895
2013-2014 46,73,00,098 6,26,71,72,709 7.456
Gross profit ratio
Formula
Gross profit ratio = Gross Profit X 100
Sales
Analysis
From the above table we find that a trend in change of gross profit of the MYMUL from the
year 2009-10 to 2013-14.in the year 2009-10 is 12.97,for the year 2010-11 is 10.85,for the
year 2011-12 it has been decreased to 7.84,in the year 2012-13 again decreases to 4.89.again
it has been increased to 7.45 in the year 2013-14.

Graph Showing Gross Profit or Loss Ratio From 2009-10 to 2013-14
Gross profit Ratio

15 12.97
Gross profit ratio
10.85
10 7.84
7.456
5 4.895
0
Ratio
year
GRAPH: 4.17
Interpretation
From the above graph is show out the gross profit for the MYMUL (2009-10 to 2012-13) is
gradually decreases from year to year. But In the year 2013-14 Gross profit has highly
increased to 7.456.
NET PROFIT RATIO
Formula
Net profit ratio = Net profit
Net Sales

Table Showing Net Profit or Loss Ratio of Mymul:
TABLE: 4.18
Year Net profit Net Sales Ratio

2009-2010 5,61,36,270 2,26,98,21,411 2.47
2010-2011 5,51,64,866 3,13,31,82,030 1.76
2011-2012 4,52,16,037 4,23,61,64,250 1.07
2012-2013 4,64,06,368 5,12,09,55,505 0.009
2013-2014 6,09,31,840 6,26,71,72,709 0.009
Analysis:
It can be observed from the above table the net profit of MYMUL for the year (2009-10 to
2013-14) has gradually decreases from year to year. In the year 2009-10 it was 2.47 it
decreases to 1.76 in 2010-11. From the year 2010-11 to 2013-14 the net profit ratio has
gradually decreased. The net profit of the year 2012-13 and 2013-14 is 0.
. Graph Showing Net Profit or Loss Ratio of Mymul from 2009-10 to 2013-
14

Net profit Ratio

2.47
2.5
net profit ratio
2 1.76
1.5
1 1.07
0.5
0
0.009
2009-2010 0.009
2010-2011
2011-2012
2012-2013
2013-2014
year
Ratio
GRAPH: 4.18
Interpretation
From the above graph we can observe that the net profit of MYMUL has decreased from the
year 2010-11 to 2013-14 the net profit ratio has gradually decreased. From the year 2010-11
to 2013-14. The net profit of the year 2012-13 and 2013-14 is 0.

CHAPTER-5
SUMMAR OF FINDINGS
5.1 FINDINGS
THE following are some of the findings undertaken in MYMUL:
 MYMUL has an effective control over the cost and profit.

 Personnel department will look after all the matter relating to salaries and wages
relating to the employees.
 Cost accounting system in MYMUL performs its function satisfactorily. It provide
information system department which in turn reports to the top management. It
produces reports without the loss of time and value.
 MYMUL is presently pursuing standard costing technique to analyses the
effectiveness of cost and cost control.
 MYMUL has been low profit and safety margins 2012-2013 compared previous
years.
 MYMUL has been producing currently double excess than its available capacity.
 MYMUL is also getting good profit with lower risk and better operating cost.
 MYMUL produce different types of Milk products. As it is a manufacturing unit it
maintains a separate cost accounting and finance department.

5.2 CONCULSION:
MILK is one of the important consumable and very essential products for the society
at a large. Mysore dairy is playing a very important role in providing milk and milk products
to the society. The service provided by the union is appreciated by variety of people
throughout the state.
As there is a huge competition in private vendors, MYMUL should reduce its cost. It
is reducing the cost of production from past three years by increasing the efficiency of
workers and replacing old machines. Due to this companies profit is increasing year by year.
To conclude finance accounting system provides the service to aid the managers in
achievement of the goals and targets laid by the management and its effectiveness evaluated
from time to time. The overall performance of the finance accounting department of
MYMUL is satisfactory.
Members use the information generated under finance accounting system by

management at different layout, thus different set of information could be develop under
finance accounting and supplied to different persons responsible for activities in the
organization. It is used for the purpose of analysis and decision making.

5. 3 SUGESSTIONS AND RECOMONDATION:
The following are some of the recommendation to improve the financial

position of the MYMUL:
 MYMUL may expand its business due to it has more market share and it has
shortage of capacity.
 MYMUL get an optimal level of the management union should taken
necessary measures in order to see that all the resources like men, machine,
materials, method and money.
 If MYMUL is increase the share capital is good sing to organization as it
indicates that the organization is going to meet capital expenditure and it is
best sources of finance.
 Increase in sales volume is not profitable to the company so, it should aim at
reducing costs and expenses before thinking of increasing the sales volume.
 It can adopt just-in-time approach which not only make stores activities
effective, but also eliminate unnecessary activities that involved in the stores.
This will help in control of cost.
 Attempts should be made to reduce production costs with the help of research
and development department.
 The company should increase their sales to acquire increased level of market
share in the domestic market. This may help in achieving goals of the
organization.
4.4 SCOPE FOR FUTURE STUDY:
 The study can be conducted different companies and across industries.

 Time period of the study is can be extended

BIBLOGRAPHY/REFERENCES
Books
 Financial Management- I.M Pandey

 Financial Analysis- Prasanna Chandra
 Company annual reports
 Financial management – khan M. Y. & Jain P.K, 6/e, TMH, 2011
 Fundamentals of Financial management – Brigham & Houston, 10/e,
cengage Learning.
Websites
 www.investopidia.com
 www.kmf.com
 www.mymul.com

ANNEXURES: PROFIT AND LOSS ACCOUNT
Particulars 2010 2011 2012 2013 2014

Sales Account 2269821411 3133182030 4236164250 5120955505 6267172709
Cost of Sales
Opening Stock 16705638 18205829 51569643 116503229 277131219
Add purchase 1846730761 2627506632 3755673987 4518512694 5162372104
Account
Less closing Stock 18529417 17738184 116503229 277131219 136354787
1844906982 2627974277 3690740401 4357884704 5303148536

Direct expenses 130600571 164998324 213139442 512380766 496724075
1975507553 2792972601 3903879843 4870265470 5799872611

Gross profit 294313858 340209430 332284407 250690035 467300098
Income Statement
Add Indirect 30224699 23953549 36299513 18983244 23956726

incomes
324538557 364162979 368583920 269673279 491256824

Less Indirect 242348346 283382971 302575156 200066910 402824984
Expenses
Profit Before Tax 82190211 80780007 66008764 69606368 88431840
Less Income Tax 26059941 25615141 20792727 23200000 27500000
Net Profit 56130270 55164866 45216037 46406368 60931840

BALANCE SHEET
Particulars 2010 2011 2012 2013 2014
Liabilities
Capital Account 285606827 385646834 457119133 550156983 738815315
Loans 70278651 152028450 96072688 149795197 230469477
Current Liability 96235854 218582463 167280898 288419747 599923413
Profit and Loss 86958441 114305798 102693946 84223271 107338209

Account
Total 539079773 870563546 823466665 1072595199 1676546414
Assets
Fixed Assets 250159222 260587644 277297008 348163007 489648885
Investments 19619212 126371278 60048369 24607384 77053491
Current Assets 269301339 493604624 485821288 699824808 1109844039
Total 539079773 870563546 823166685 1072595199 1676546414

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FINANCIAL ANALYSIS OF MYMUL

To understand the conceptual framework of financial statement analysis and

Vidyavardhaka college of engineering ,MBA Page 1

1.2 TOPIC CHOOSEN FOR THE STUDY:

Vidyavardhaka college of engineering ,MBA Page 2

1.3 NEEDS OF THE STUDY:

1.4 OBJECTIVES OF STUDY:

1. To understand the conceptual framework of financial statement analysis

3. To know the present financial system of mymul

4. To assess the short term as well as long term profitability position.

7. To give suggestion and recommendation based on the study.

1.5 SCOPE OF THE STUDY:

Vidyavardhaka college of engineering ,MBA Page 3

1.6 RESEARCH METHODOLOGY:

The sources of secondary data are;

Vidyavardhaka college of engineering ,MBA Page 4

Research Type: descriptive research

1.7 LITERATURE REVIEW:

Cenap1lter explained that international accounting standard 29 “Financial Reporting in

Vidyavardhaka college of engineering ,MBA Page 5

1.8. LIMITATIONS OF THE STUDY:

 The study duration in short period

Vidyavardhaka college of engineering ,MBA Page 6

2.1 General information of milk and milk industry

Vidyavardhaka college of engineering ,MBA Page 7

Table 1.1: Constituents of Milk and its Percentages

Constituents of milk Percentage (%)

Vidyavardhaka college of engineering ,MBA Page 8

ORIGIN OF THE INDUSTRY

Vidyavardhaka college of engineering ,MBA Page 9

GROWTH AND DEVELOPMENT OF THE INDUSTRY

PRESENT STATUS OF THE INDUSTRY

The establishment of a co-operative structure as a ready and regular buyer or milk

Vidyavardhaka college of engineering ,MBA Page 10

CHANGING PATTERN OF THE INDUSTRY

Vidyavardhaka college of engineering ,MBA Page 11

Cheese, which is considered a main delicacy in the breakfast in so many countries,

Strategies to boost Indian dairy products globally

Vidyavardhaka college of engineering ,MBA Page 12

KARNATAKA COOPERATIVE MILK PRODUCERS FEDERATION

Vidyavardhaka college of engineering ,MBA Page 13

BACKGROUND AND INCEPTION OF THE COMPANY

The philosophy of union is to eliminate middlemen and organize institution to be

2.3 NATURE OF THE BUSINESS CARRIED

Vidyavardhaka college of engineering ,MBA Page 14

2.3 VISION, MISSION AND QUALITY

To grow in to model cooperative milk union in the country by accomplishing the

As a part of long-term growth oriented development strategy, the union is expanding

The Quality Policy and Objective

Vidyavardhaka college of engineering ,MBA Page 15

In order to fulfil the objective of union is constantly engaged in working towards

2.4 Product and service profile.

MYMUL has manufactured the following products:

Type of product Product Image Quantity Available in

Nandini Toned Milk 520 ml, 1 litre

Vidyavardhaka college of engineering ,MBA Page 16

Type of product Product Image Quantity Available in

Nandini Homogenized Toned Milk 270 ml, 500 ml

Nandini Homogenized Cow Milk 515 ml

Nandini Curd 215 grams, 515 grams

Nandini spiced Buttermilk 200 ml

NandiniShubam Milk 515 ml

Nandini Sweet Lassi 200 ml