INTRODUCTION

1.1 Historical Background

For development of the real business world, T.U. has taken a bold and dynamic step
by inducting the BBS students to prepare a field work report. This step has been taken in
order to overcome the weakness of the past graduate, who suffered a lot of while facing
the actual would of business after graduation, since theories of the book differ a lot from
the practical work place to make the students aware of the problems and facts of the
workplace, fieldwork is the best thing that one can experience.

With development of human civilization, application of human labor and machineries
is growing, extracting manufacturing the materials. The main target is to produce goods
and provide service to consumer. There are many types of industries. Some industries are
big where as some are small. Cottage industries are small industries they perform their
activities in houses or cottages. They require the use of hands or small machines. They
are performed with limited number of employees. These industries can be carried on
independently by individuals.

There are different kinds of cottage industries in Nepal. The activities that performed
by cottage and small industries of Nepal are cotton spinning, weaving, paper making,
bamboo works, metal woks, woolen spinning, wood works, pottery, paddy husking,
leather processing, vegetable oil crushing, dyeing and printing etc. There are sources of
earning in various parts of the country.

Nepal has a rich cultural heritage in art and architecture. Cottage industries help to
preserve traditional Nepalese art and architecture. Art painting, thanka paintings, wood
crafts, filigrees i.e. metal work etc constitute the cultural heritage of Nepal. It is only
because of cottage industries that these have been able to survive and make progress.


There was no pioneer in wrought iron furniture before. But "KANTIPUR" is a pioneer
for wrought iron furniture, which was established in 2051/04/06. This industry has
invested Rs.477500/- as fixed capital and Rs.200000/- as working capital. This industry is
first wrought iron furniture industry in Nepal. It is in Maitidevi, Kathmandu. Now it has a
branch at Hattigauda, Kathmandu.

It has original and high quality of wrought iron furniture which includes various types
of items like dinning table, sofa set, bed hanger, lamp stand, bench, chair, railing, racks
and windows etc.



Organization Chart












Proprietor
Production Control dept Sales manager
1. A/c dept
2. Mkt dept
3. Sales dept



1. Quality Control
2. Production Store
3. Liaison works


1. Hand Section
2. Machine Section
3. Workers
4. Welding







The production department consists of hand section, machine section, welding and
workers. In the same way, control department section includes quality control production
store and Liaison works. Similarly sales manager include a/c dept, marketing department
and sales department.


1.2 Objectives of the study

The objective of the study is mentioned below:

1 To analyze current financial status of the company.
2 To analyze the trading and profit and loss a/c, schedule forming parts of a/c and
other financial statement.
3 To describe financial analysis of wrought iron furniture.
4 To identify problems faced by wrought iron furniture industries.


1.3 Limitation of study:

1 Busy schedule of an entrepreneur makes difficult to acquire information from them
2 Workers are not giving interest to the questionnaire survey.
3 Due to the limited time it is difficult to collect the data.
4 There is no well management of systematic recording system of entrepreneur.
5 This field report can't analyze the data of wrought iron furniture.

Methodology:

The methodology includes the following terms:

1 Research design:

An exploratory analytical research design has been adopted by this study. Direct
contact with concerned authorities has made this research fruitful.

2 Sources of data:

It is based on primary and secondary sources of data. The primary data collection
included interview schedules, observation consultation with the concerned persons.
The secondary source of data comprised journals, conference reports, books,
bulletins, statistics, censure reports, survey report, other official documents and
previous studies.

3 Data collection method:

The following methods were adopted to collect the primary and secondary sources
for essential data:

a. Questionnaire: Data are collected through questionnaire. Different questions
are asked to workers of the company.

b. Observation: Different situation and activities were directly observed by the
research in order to collect information.


c. Interview: It is one of the major tools used for collection of the data. By taking
the interview of the workers working in the organization, data are collected.

4 Data processing Techniques:

Information is represented in different tables, diagrams and groups with possible
description. Basically, simple statistical tools and interpretation procedure are
adopted by the research.

5 Tools used:

Materials as the sources of secondary data such as books, reports, office records,
journals and surreys were used to understand the accuracy of problems and
situations. The structural questionnaires, interviews and observation were the
primary source of data.





Chapter 2

Presentation and Analysis of Data

2.1 Income and expenditure:
It is found that there is tough competition among the different iron furniture or
industries. Many companies are importing and exporting different type of product from the
local market and hardware. In this regard the economics situation has not been much
helpful for sustainability of such company and the profitable amount of the company is not
so high. The financial position of the company is increasing in its sale & profit. While
analyzing the financial position the result of the company of last 4 years, the company is
able to increase the amount of sales and profit.

Transaction of a company ledger (fiscal year 2057 to 2061)


Gross income
Table 2.1 (in Rs.)
Year Sales Other Income Total income
2057/58 1225036 322000 1547036
2058/59 1549771 340450 1890221
2059/60 1805400 264150 2069550
2060/61 1956050 360600 2316650

Source: a. Annual repot for FY 2057/582060/61
b. Field Survey


Other income

2056/57 2057/58 2059/60 2060/61

Transaction of the company i.e. FY 2060/61 shows that net sales was Rs.
19,56,050/- & other income was Rs.360,600/- in total income of the company. Till FY
2059/60 shows that the company net sales is quite low.

From the above sales table it is clear that the company's sale is increasing year by
year. The total amount of Wrought Iron Furniture sold in the year 2057/58 was equal to
Rs.12,25,036/- and it is equal to Rs.15,49,771/- in year 2058/59 . It was increased by
26.50%.

i.e. 15,49,771.-12,25,036. x 100%
12,25,036.

This table and bar diagram shows that income of the company has been increasing
year to year. Due to its quality product and good service customer buy more furniture
from this company in comparison to its competitors. Customers are more attracted
0
50000
100000
150000
200000
250000
300000
350000
400000
12,25,036 1549771 1805400 1956050
OTHER INCOME

towards the company product and find more comfortable. By this analysis, we can say
that sale has been increasing year to year.


Expenditure
Table 2.2 (In Rs.)
Details of
Expenditure
2057/58 2058/59 2059/60 2060/61
Raw Materials
Consumed
80,190. 1,01,000. 75,600. 30,700.
Office rent 33,000. 33,000. 33,000. 36,000.
Office Supplies maintain 7,352. 9,499. 11,302. 9,301.
Depreciation 16,165. 13,531. 14,464. 10,847.
Printing and Stationary 4,525. 6,200. 9,200. 4,522.
Transportation 15,300. 22,700. 28,300. 26,900.
Electricity & water 69,322. 75,421. 77,433. 64,201.
Total Expenditure 2,25,854. 2,61,251. 2,49,299. 1,823,81.

Sources: Field Survey



It is clear that total expenditure of 2057/58 was Rs.2,25,854/- in the year 2058/59
has been increased up to Rs.2,61,251/-. In the same way, in the year 2059/60 it was
decrease i.e. total expenditure was Rs.2,49,299/-. Similarly, in the year 2060\61 total
expediter was decreasing i.e. Rs.1,82,371/-.
It is clear that ratio of increasing in percentage of expenditure is lower than that of is
lower than that of percentage of income. That means definitely increment in the figure of
profit year to year.
The total expenditure during 2057/58 was Rs.2,25,854. and Rs.2,61,252. in year
2058/59 which was increased by15.67% but the income on that year was revealed
increased by 26.5%. In the year the increased ratio of income has increased with that of
increased ratio of expenditure. That is because of availability of raw materials in proper
time, proper managing, trained management and skilled manpower.
0
20000
40000
60000
80000
100000
120000
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2057/58
2058/59
2059/60
2060/61

2.2 Ratio Analysis:

The term ratio refers to the numerical relationship between two terms in variables.
Its main focus is to study various items or groups of items in financial statement. In
simple term it simplifies accounting figures. It utilizes various assets and liabilities in
generating sales revenues.

Necessary data of different years
Table 2.3 (In Rs.)
S.N. Particular 2057/58 2058/59 2059/60 2060/61
1 Sales 11,25,036. 1,44,977. 17,05,400. 18,56,050.
2 Gross profit 2,48,844. 3,78,720. 4,67,862. 3,80,084.
3 Stock x x x x
Opening x 30,700. 60,500. 75,600.
Closing 30,700. 60,500. 75,600. 82,650.
4 Bills Receivable 5,55,288 6,98,205. 35,62,252. 7,89,605.
5 Bills Payable 4,17,416 5,69,200. 2,62,711. 4,88,566.
6 Creditors 42,612 x 62,177. 17,260.
7 Bank balance 1,42,600 2,72,855. 2,99,698. 1,64,500.
8 Total assets 7,56,726. 899,842. 11,27,812. 1,265,288.
9 Net profit 16,744 77,746. 58,946. 67,852.

From the above table, Ratio Analysis can be done as follows:



2.2.1 Liquidity Ratio:
Liquidity ratio means that ratio which measure the firm's ability to meet current
obligation so they are used to measure a firm ability to meet short term obligation.
The types of liquidity ratio are:
a) Current ratio:
It is calculated by dividing current assets by current liabilities. Generally
current assets ratio of 2:1 is considered more satisfactory. The current ratio of KWIF
for economic year 2057/58 2060/61 is shown below.

Current ratio = Current assets
Current liabilities

= Closing stock + B/R + Bank
B/P + Creditor

Current ratio for 2057/58 = 30,700.+5,65,288.+1,52,600.
4,17,416.+52,612.

= 7,48,588 = 1.59:1
470,028

Current ratio for 2058/59 = 60,500.+6,98,205.+2,72,855.
5,69,200.

= 1.81:1


Current ratio for 2059/60 = 75,600.+3,62,252.+2,98,698.
36,2711.+62,177.

= 7,36,550. = 1.7:1
43,24,888.

Current ratio for 2060/61 = 82,650.+7,89,605.+10,64,500.
4,88,566.+17,260.

= 10,36,755. = 2.0:1
5,05,826.


b) Liquid ratio = Current assets-Closing stock
Current liabilities

Liquid ratio for 2057/58 = 7,17,888 = 0.9:1
4,70,028

Liquid ratio for 2058/59 = 10,31,560-60,500 = 1.71:1
5,69,200
Liquid ratio for 2059/60 = 7,36,550 = 1.56:1
424888


Liquid ratio for 2060/61 = 10,36,755-82,650 = 1.89:1
5,05,826.

2.2.2 Activity ratio:
a) Inventory turnover ratio: It is calculated as, COGS
Average stock

= Total Sales-Gross profit
Opening+Closing
2

Inventory turnover ratio for 2057/58 = 12,25,036.-2,48,844.
0+30,700.
2

= 9,76,192 . = 63.6 times
15350.

Inventory turnover ratio for 2058/59 = 15,49,771.-3,78,720.
30,700.+60,500.
2

= 11,71,051. = 25.68 times
45,600.


Inventory turnover ratio for 2059/60 = 18,05,400.-4,67,862.
60,500.+7,56,000.
2

= 13,37,538. = 19.66 times
6,80,500.

Inventory turnover ratio for 2060/61 = 19,56,050.-3,80,084.
75,600.+8,26,500.
2

= 15,75,966. = 19.92 times
79,125.


b) Total assets turnover ratio:
It explains how well the how well the company's assets are being used to
generate sales. The ratio shows the relationship between total assets sales. It is
calculated as:

Total assets turnover ratio = Sales
Total Assets

Total assets turnover ratio for 2057/58 = 12,25,036. =1.62 times

7,56,726.

Total assets turnover ratio for 2058/59 = 15,49,771. =1.72 times
8,99,842.

Total assets turnover ratio for 2059/60 = 18,05,400. =1.76 times
19,27,812.

Total assets turnover ratio for 2060/61 = 1,95,605. =1.55 times
12,65,288.


2.2.3 Profitability ratio: This ratio can be divided into two types.
a) Gross profit margin: It can be calculated by using the following formula.

Gross profit margin (GPM) = Gross Profit
Sales

GPM for a year 2057/58 = 2,48,844. = 20.31%
12,25,036

GPM for a year 2058/59 = 3,78,720. = 24.44%
15,49,771.


GPM for a year 2059/60 = 467,862. = 25.90%
18,05,400

GPM for a year 2060/61 = 3,89,084. = 19.00%
19,56,050.
b) Net profit margin: Net Profit margin is the relationship between net profit and
sales. That means, it is the rate of net profit earned on sales. It is calculated as:

NPM = Net Profit
Sales

NPM for a year 2057/58 = 1,56,744. x100% = 12.8%
12,25,036.

NPM for a year 2058/59 = 78,746. x100% = 5.08%
15,49,771.

NPM for a year 2059/60 = 58,946. x100 = 3,26%
18,05,400.

NPM for a year 2060/61 = 67,853. x100 = 3.47%
19,56,050.




2.3 Finding

As stated in chapter 1, the study has been carried out in limited time. Despite the
fact the investigation of course did not become an overview rather some special
phenomena could be broken out. Some facts could be identified.

1 Total income of Kantipur Wrought Iron Furniture has been increasing best
Expenditure has increased in 1
st
year and next two year its expenditure has
defined the sales of this industry was increased.

2. Comparing the current ratio of 2057/58 is more than 2058/58, and then in
2059/60 it is decreased. In the year 2061/62 it is increased. Liquid ratio is
increasing in the year 2058/59. Then it decreases in the year 2059/60.In the year
2060/61 it is increasing.

3. Profitability ratio includes gross profit margin GPM in 2057/58 is 21.31% than in
the year 2058/59 to 59/60. It is increased up to 23.44% and 24.9% in the year
2060/61 and it is decreased to 19.43%, which is not good for the company. In the
same way, NPM decreases from the year 2058/59 to 2059/60; it is increased in
the year 260/61.

4 Total income of Kantipur Wrought Iron Furniture has been increasing best.
Expenditure has increased in 1
st
year and next two year its expenditure has been
declined. The sales of this industry were also increased.

5 Activity ratio of Kantipur Wrought Iron Furniture increased in 1
st
year, and then it
decreased in next two years.


CHAPTER 3


SUMMARY AND CONCLUSION


3.1 Summary

This fieldwork is carried out for the fulfillment of the course of bachelor in Business
in business studies. The study carried out mainly focused on the financial position of the
Kantipur Wrought Iron Furniture.

This historical background shows that it the first iron rod in Nepal. In comparison to
the competitor it has best quality in market. The 1
st
chapter of report deals with
introduction part, which includes background of the company, it also deals with objectives
of study and methodology. Since, the subject matter of the study is to know its financial
position of the company.

KWIF has original and high quality of wrought iron furniture in compare to its
competitor. It produces various types of items such as i.e. dining table, sofa set, bed,
hanger, lamp stand, bench, chair railing, rack and windows etc.

Where as the second chapter has explained about the presentation of analysis of the
data and charts. In this chapter, different kinds of income expenditure tables are
presented. In the same way, income and expenditure tables are shown in the bar
diagram. These tables and diagram has helped to study different type of ratio analysis
with their calculation.


Thus, by this presentation and analysis of the data we can know income and
expenditure of the company. Where as, analysis of ratio helps to know the financial
position of the company and level of services that KWIF is providing to their customer.









3.2 Major Findings:

The study of the Kantipur Wrought Iron Furniture shows that they are able to
maintain its financial position. The analysis has helped to know the trading profit.

The expenditure is increasing in the fiscal year 2057/58 to 2058/59 but it is
decreasing from the fiscal year 2059/60 to 2060/61. The sales of the company also have
been increasing year to year, which means there is profit in the company.

Profitability ratio includes GPM in 2057/58 is 21.31%than in the year 2058/59 to
59/60. It is creating up to 23.44% and 2409% in the year 2060/61 and it is decreasing to
19.43%, which is not good for a company. In the same way, Net profit margin decreases
from the year 2058/59 to 2059/60; it is increasing in the year 2060/61.



3.3 Conclusion:

The main objective of this study is to examine the financial position of the company.
As we know, the financial position of the organization is measured through different ratio.
During the study period it is found that KWIF has controls 50% wrought iron furniture in
Nepal, because of its excellent quality and performance, wide product range and
unmatched service level.

The analysis shows the financial position of the company, trading profit and loss,
schedule forming parts of a/c and financial statement .It has shown the financial problems
faced by wrought iron furniture industry.

To control each department, separate department has been designed such as hand
section, machine section, control department, machine section, control department,
marketing department, a/c department and sales department. These departments have
increased efficiency in production of goods.

The level of satisfaction acquired by the consumer is increasing day by day. Thus this
result is increasing of the sales year by year. The success of this industry will undoubtedly
leads to the development in other iron furniture industries. Due to the best quality of
products the industry has gain fame and popularity in the national market. Where as the
company is able to provide goods and services as required by the consumer. Thus this
helps to maintain the goodwill of the organization.







3.4 workable suggestions:

a) This company should export their product in other country for gaining the
fame of the organization.
b) The company should distribute their sample in the market for earning the
reputation.
c) The internal accounting work should be done at reasonable period (one month).
d) This company is suffering by authorized import, production and sales of the
products. These activities should be checked and necessary action should be
taken.
e) The company should launch new product in market to maintain its goodwill
to compete the market.
f) The company should produce furniture according to the preference of the
customer rather than their own choice.















Bibliography


1. Pandey, Ramesh (2004): Accounting for financial analysis and planning

Kathmandu : Bhudha Academic Publishers


2: Pant, Prem Raj (1998): Field work Assignment Report writing

Kathmandu : Veena Academic Enterprise














Appendix -A


Interview Schedule:

1. What is your annul production capacity?

2. Have your industry innovated new product?

3. Have your industry get any support from HMG, NGOS, INGOS, and Donor Agencies?

4. When did your company establish?

5. Did your company have any branches?

6. What are the steps to be followed during the exports?

7. Have your industry participated any trade fairs?










Formula Used:

1. Liquidity Ratio:

a) Current ratio = Current assets
Current liabilities

b) Liquid ratio = Current assets-Closing stock
Current liabilities


2. Activity Ratio:

a) Inventory turnover ratio: = COGS
Average stock

= Total Sales-Gross profit
Opening+Closing
2

b) Total assets turnover ratio = Sales
Total Assets


3. Profitability ratio:

a) Gross profit margin (GPM) = Gross Profit
Sales

b) Net profit margin (NPM) = Net Profit
Sales




















A CASE STUDY
ON
KANTIPUR WROUGHT IRON FURNITURE
(A Pioneer Entrepreneur)







By :
Gopal Khanal
Redg No: -7-1-3-1029-96
Campus Roll no:490/060


A Field Work Report









Submitted to:
Public Youth Campus
Tribhuvan University

In partial fulfillment of the requirements for the degree of
Bachelors of Business Studies (BBS)







Kathmandu, Nepal
Jestha 2063





Faculty of Management

TRIBHUVAN UNIVERSITY

RECOMMENDATION

This is to certify that the fieldwork assignment report

Submitted by:
Gopal Khanal
Redg No: -7-1-3-1029-96
Campus Roll no:490/060




Entitled:
A CASE STUDY ON KANTIPUR WROUGHT IRON FURNITURE
has been prepared as approved by this department.


This fieldwork assignment report is forwarded for examination.







Supervisor

Date: ......................... Head of the Dept.

Public Youth Campus
ACKNOWLEGEMENT



This case study has been designed for the partial fulfillment of the degree of Bachelor
of Business Studies (B.B.S) prescribed in T.U. syllabus of 3 year course. Its primary
objective is to analyze the financial position of Kantipur Wrought Iron Furniture situated at
Maitidevi, Kathmandu.


In course of the preparation of this field work report entitled "A case study on
Kantipur Wrought Iron Furniture", I would heartily like to thank to Mr. Ashok
Shrestha who helped me for, entrepreneurship and small business management of his
encouragement and support me.


I have done my best to present the data in easy, clear, and systematic way. Hope
this case study will help Kantipur Wrought Iron Furniture and the newcomers of B.B.S. 3
rd

year students.


I am very much grateful to Mr. and Mrs. Kumar Bahadur Thapa, the owner of
Kantipur Wrought Iron Furniture for suggestions and advises and constant inspiration
during the preparation of this study. Likewise, I am thankful to Mr. Samir Shrestha Sir for
his suggestion.


Last but not the least, I would like to thank other teachers of Public Youth Campus
and my friends for their continued moral support.




Thank you


Gopal Khanal
Public Youth Campus

Table of Contents



CHAPTER-1 INTRODUCDTION

1.1 Historical background 1
1.2 Objective of the study 2
1.3 Limitation of the study 2
1.4 Methodology 3

1. Research design 3
2. Sources of data 3
3. Data collection method 3
4. Data processing technique 3
5. Tools used 3




CHAPTEER-2 PRESENTATIONS AND ANALYSIS OF DATA

2.1 Income and expenditure 4
2.2 Ratio analysis 7

2.2.1 Liquidity Ratio 7
2.2.2 Activity Ratio 8
2.2.3 Profitability Ratio 9


2.3 Finding 10


CHAPTER-3 SUMMARY AND CONCLUSION

3.1 Summary 11
3.2 Major findings 12
3.3 Conclusion 13
3.4 Workable suggestions 14


Bibliography 15

Appendix-A 16











List of Tables


Table No. Page No.

2.1 Gross Income 4
2.2 Expenditure 5
2.3 Necessary data of different years 7





List of Figures


Figure No.

1.1 Organization chart 2
1.2 Gross Income 4
1.3 Expenditure 6




A CASE STUDY
ON
KANTIPUR WROUGHT IRON FURNITURE
(A Pioneer Entrepreneur)






By :
Gopal Khanal
Redg No: -7-1-3-1029-96
Campus Roll no:490/060

A Field Work Report






Submitted to:
Public Youth Campus
Tribhuvan University

In partial fulfillment of the requirements for the degree of

Bachelors of Business Studies (BBS)








Kathmandu, Nepal
Jestha 2063


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