Professional Documents
Culture Documents
P.JANAKI CHANDRA
(Regd. No. 113234702020)
Under the guidance of
Mrs. K. DEEPIKA
MBA., MCom
.
The Project has been carried out by her under my guidance in partial fulfillment of the award of the
MASTER OF BUSINESS ADMINISTRATION
Place : Visakhapatnam
Date :
[2]
DECLARATION
I P.JANAKI CHANDRA hereby declare that this project work entitled VAIBHAV
EMPIRE PVT.LTD., Visakhapatnam on the topic RATIO ANALYSIS, with reference to
(VSQUARE, VAIBHAV JEWELLERS VISAKHAPATNAM) has been prepared by me in partial
fulfilment of the requirement for the award of M.B.A. in FINANCE.
I further declare that this project work is a result of my own efforts and that it has not been
submitted to any other college or University or Institute.
Date :
Place : Visakhapatnam
(P.JANAKI CHANDRA)
M.B.A FINANCE
ID No. 113234702020
[3]
ACKNOWLEGEMENT
I express my deep sense of gratitude to the management of Vaibhav jewellers. For giving me an
opportunity to do my observation studies for the award of MBA (RATIO ANALYSIS).
I wish to express deep gratitude to my project guide, K.DEEPIKA of Visakha Institute For
Professional Studies,Visakhapatnam who has given me valuable advice throughout my project
work.
I am extremely thankful to my project guide at Vaibhav jewellers Mr.P.RAM
PRASAD (SR.Manager - Finance) of Vaibhav in Visakhapatnam. For their valuable support and
guidance given throughout the project. I would like to thank them for having spared their time for
me, in spite of their busy schedules.
Finally, I would like to thank everyone involved in this project for cooperating in completing
the project successfully.
P.JANAKI CHANDRA
[4]
CHAPTER:1
Introduction
Need for the study
Objective of the Study
Methodology
Limitations of the Study
What is retailing
Retail format in India
Global scenario of retailing
Retail scenario of Andhra Pradesh
Importance of retailing
The future of retailing
CHAPTER - 3
Summary
Suggestions
Conclusion
Bibliography
[6]
CHAPTER 1
Introduction
Need for the study
Objective of the Study
Methodology
Limitations of the Study
RATIO ANALYSIS
[7]
analysis is not an end for itself. It is only a means of better understanding of financial strengths and
weakness of a firm.
1. Evaluation of Ratio Analysis effectiveness process for understanding the direction in which the
company is moving so as To decide and implement the future e course of action with a view to
achieve the objectives in the best interest of the organization.
2. The main need of the study is to ensure the methods followed by the organization for ratio analysis
3.
techniques.
The financial department can implement and can get positive results by maintaining proper
financial reports.
4. To analyze the proposal for expansion or creating additional capacities.
5. To make financial analysis of various proposals regarding capital investment so as to choose the best
out of many alternatives proposals.
[8]
This study of M/s. Vaibhav Empire Pvt Ltd (VEPL) has been undertaken to evaluate the financial
efficiency of the organization by establishing the following objectives.
To know about the various sources of finances, working capital to VEPL.
To judge the financial position, i.e. the short-term liquidity position and the long-term solvency of
VEPL.
To measure the operational efficiency of VEPL.
To determine the profitability trends of VEPL.
To assess the overall financial position of the company through various established techniques.
METHODOLOGY:
The analysis of the project was based on the available information. Any information about the topic
is called the data. The data was gathered from various sources i.e., Primary and Secondary sources.
Type of Data:
Primary Data
Secondary Data
Primary Data:
Any information that is collected afresh and for the first time is called Primary data. The primary
data happen to be original in character. The Information is gathered from concerned employees. The
employees and manager of the financial department have provided the information needed for the study.
Secondary Data:
Information which has already been collected by somebody else or some other agency with definite
purpose and which has already been processed is called secondary data. The secondary data for the study
[9]
have been gathered from the balance sheets, profit and loss accounts annual reports and other books and
manuals of the Vaibhav Empire Private Limited.
CHAPTER-2
What is retailing
[10]
WHAT IS RETAILING:
Retailing consists of the sale of goods or merchandise from a fixed location, such as a department
store, boutique or kiosk, or by post, in small or individual lots for direct consumption by the purchaser.
Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In
commerce, a "retailer" buys goods or products in large quantities from manufacturers or importers, either
directly or through a wholesaler, and then sells smaller quantities to the end-user. Retail establishments are
often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the
process of retailing as a necessary part of their overall distribution strategy. The term "retailer" is also applied
where a service provider services the needs of a large number of individuals, such as a public utility, like
electric power.
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Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall.
Online retailing, a type of electronic commerce used for business-to-consumer (B2C) transactions and mail
order, are forms of non-shop retailing.
Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities
such as food and clothing; sometimes it is done as a recreational activity. Recreational shopping often
involves window shopping (just looking, not buying) and browsing and does not always result in a purchase.
Retail is the second-largest industry in the United States both in number of establishments and
number of employees. The U.S. retail industry generates $3.8 trillion in retail sales annually ($4.2 trillion if
food service sales are included), approximately $11,993 per capita. The retail sector is also one of the largest
worldwide. Wal-Mart is the world's largest retailer and the world's largest company with more than $312
billion (USD) in sales annually. Wal-Mart employs 1.3 million associates in the United States and more than
400,000 internationally. The second largest retailer in the world is France's Carrefour.
Retail trade accounts for about 12.4 percent of all business establishments in the United States.
Single-store businesses account for over 95 percent of all U.S. retailers, but generate less than 50 percent of
all retail store sales. Gross margin typically runs between 31 and 33 percent of sales for the industry but varies
widely by segment.
Few best organized jewelry stores in world are like.
Zale Corporation, Gordons jewelers, Kay jewelers, DDmas, Tanishq, swarovski group, EROS fine jewelry,
De Beers.
IMPORTANCE OF RETAILING:
As the final link between consumers and manufacturers, retailers are a vital part of the business
world. Retailers add value to products by making it easier for manufactures to sell and consumers to buy. It
would be very costly and time consuming for you to locate, contact and make a purchase from the
manufacturer every time you wanted to buy a candy bar, a sweater or a bar of soap. Similarly, it would be very
costly for the manufactures of these products to locate and distribute them to consumers individually. By
bringing multitudes of manufacturers and consumers together at a single point, retailers make it possible for
products to be sold, and, consequently, business to be when they interact with the final user of the product or
service. Retailers also provide services that make it less risky and more fun to buy products. They have
salespeople on hand who can answer questions, may offer credit, and display products so that consumers
[13]
know what is available and can see it before buying. In addition, retailers may provide many extra services,
from personal shopping to gift wrapping to delivery, which increases the value of products and services to
consumers.
According to the National Retail Federation, 1 in 5 American workers are employed in the retail
industry. The Department of Labor estimates that since 1990, 700,000 new jobs have been created in the retail
sector. Thats 13% of all new jobs in the United States. At present, more jobs are provided in retailing than the
entire U.S. manufacturing sector.
CHAPTER 3
PROFILE OF THE ORGANIZATION
INTRODUCTION:
Evolution of VAIBHAV started in 1900 AD, when Late Sri. Grandhi Ram Murthy started a
unique textile showroom at Eluru. In 1937 Late. Sri. Grandhi Bala Krishna developed it into the largest
cloth showroom in Eluru. In 1964 Sri.Grandhi Narendra with the help of Sri. Vasantlal Mehta, Hirachand K.
Sahan entered into the world of jewellery and opened a showroom at Eluru named VAIBHAV.
Late. Mr.Grandhi Manoj Kumar streamlined the business by implementing industry best practices
and strict quality control measure, single-handedly propelling the Vaibhav name as the single largest retailer
and exporter of the precious metals and jewels in Vizag. His vision of creating a consolidated business
platform is what came to be called as THE VAIBHAV EMPIRE.
The Vaibhav group has become one of Visakhapatnams largest distributors of jewellery and a leading
name in the Indian Real-Estate Industry. It has also diversified into the wind energy power generation by
[16]
commissioning two windmills in the Dindigul district of Tamilnadu. Today the group stands tall after four
generation of sustained growth and expansion.
Vaibhav is the Indias largest ISO certified jewellery shopping mall. Its is the extending its services
with Gold, Diamond & platinum Jewellery. For the first time in Andhra Pradesh Vaibhav is offering 925
Sterling Silver . It is also offering branded gift items like RADO, TAGHEUER, TISSOT, DIVINITI, D
MART EXCLUSIF and KESAR products for the corporate clients.The Prestigious lineage of the Grandhis
& Emergence of Vaibhav Empire Private Limited
HISTORY:
1900 Late.Sri Grandhi ram Murthy of early 1900 laid the foundation for the successive Grandhis of
the later years, by starting a unique textile showroom at Eluru, west Godavari district, Andhra Pradesh,
which helped the later Grandhis to have an edge over others.
1937 Late. Sri Grandhi Bala Krishna took the mantle from his father and improved upon the business
by leaps and bounds. Grandhi Bala Krishna & Sons, an innovative textile showroom in Eluru was a big
milestone in Grandhis Family.
1964 It was Sri Grandhi Narendra who took the torch forward. Let by success in Eluru in textile
industry extended his dream stream into the world of Jewellery market by opening Vaibhav. When
Vaibhav opened its door, a tradition of unsurpassed service, quality and value was born. As the years, the
[17]
tradition became more and more entrenched and the approach towards business has been changed drastically
parings the along of Vaibhav Era.
1991 The Grandhis of the 21 Century took a new light through Sri Amarendra Grandhi, an
Engineering Graduate who is engaged in putting to practice his fathers glorious years, the house of
Grandhis has grained n Immemorable experience and is now handling the enterprises, Vaibhav Jewellers
with a state of the art Showroom at Visakhapatnam.
1994 with new blood at the helm in the form of Late. Mr.Manoj Kumar Grandhi, change was
inevitable. The man with a blend of old school traditionalism with keen sense for manage rid practices vis-svis quality consciousness is the part of expansion and has drawn the diversification plans into Real Estate
and Hospitality industries.
1995 Feburary 9th in the year 1995 Mr.manoj Grandhi extended his dream vision Vaibhav
Jewellers to Visakhapatnam, the city of destiny with the help of his father.
2003 Mr.Manoj Grandhi vision was to channel the success of 2 nd generation force fathers textile
business into what came to be called The Vaibhav Empire. Vaibhav group has become one of the
Visakhapatnam a largest makers and distributors of Jewellery and a leading name in the Indian Real Estate
Industry.
Incredible reliability, innovative and qualitive services are the hall marks of Vaibhav which is
marked the beginning of a new Era in the history of Grandhis. Manoj Kumar Grandhi an unfretted man
with immense simplicity and composure has immeasurable Customer Care & Services Orientation. His
Jewellery conveys a sense of opulence without being expensive. Thus making house hold name in Vizag
has become :Vaibhav empire Private Limited an emerging Corporate in the year 2003.
2007 Achieving success in the form of increased revenues, expanding contacts, scale of operations
and genuience customer delight the group widens its interest in the jewellery markets, Real estate market in
[18]
Andhra Pradesh. The groups business is primarily spearheaded by its Jewellery Division with its Newly
launched Indias chosen clothing Emporium Kankatala, under one roof more than 106000 sq.ft area VSQUARE Which was launched by the Finance Minister Dr. K. Rosaiah on 15 th Nov 2007 which was
provided employment for more than 317 PG/Degree/Inter Candidates. Vaibhav Empire blends Modern
Corporate Management style with Ols School Business ethics with confidence.
As a part of strategic development in Real estate Vaibhav Empire plans to have 8 V-Square Malls and 34
Vaibhav chain stores across Andhra prades by 2012.
Vaibhav empire has grown by leaps and bounds with its Real Estate Ventures in Visakhapatnam and
Mega Ventures like V empire Building (5 floors). And a BOT project with VUDA having plinth area of
1,27,000 sq.ft. Commercial complex under the flagship of Vaibhav Sky Scapes Ltd., which is in the process
of construction. And many other projects like V Tower a never before venture with unbelievable facilities.
The group also believes in power and a greener tomorrow. It has diversified into the wind energy
power generation by commissioning two windmills in the Dindigal district of Tamilnadu.
The Grandhis family has always been a patron of the arts. They have identified and encouraged
talent over the years and have been sponsoring the National Eminence awards function, the 5 days
cultural extravagance of music and dance recognizing and felicitating exceptional contributions to the arts
every year since 2002.
COMPANY HISTORY:
The Patriarch and Former Generations:
It begin during the early 1900s in a little-known town called Eluru, situated on the road between
Vijayawada and Visakhapatnam. Sri Grandhi Rama Murthy, spurred by a successful and established family
business in Chennai, choose Eluru to open his very own Textile Showroom. Little did he know then, he
would lay the foundation for one of the largest privately held corporate in India.
Taking over from his father, Sri Grandhi BalaKrishna rehristened the showroom to Grandhi
BAlaKrishna and Sons. Under the new name the showroom grew in stature and acceptance amongst the
people of Eluru. The
showroom eventually went o to become Elurus biggest retails outlet and the
[20]
Mr.Manoj shifted the operations base from Eluru to Visakhapatnam and established the Vaibhav
name as one of the most trusted and preferred jewelers in Visakhapatnam. Mr.Manoj Kumar Grandhi is a
blend of od school traditionalism with a keen sense for management and opportunity.
He streamlined the business by implementing industry best practices and strict quality control
measures, single-handedly propelling the Vaibhav name as the single largest retailer and exporter of
precious metals and jewels in Vizag. His vision of creating a consolidated business platform is what came to
be called as The largest distributors of jewellery and a leading name in the Indian Real-Estate Industry. It
has also diversified into the wind energy power generation by commissioning two windmills in the
Dindigul district of Tamilnaidu.Today the group stands tall after four generations of sustained growth and
expansion.
LOCATION:
Vaibhav is located near Dwarakanagar, Station Road, Visakhapatnam in Andhra Pradesh.
This is situated in the catchments area, which is a core business area, where large number of
customers is covered. The most advantage issue is the railway station and the main aspect is that the
showroom is just 500 meters away from the bus complex (APSRTC).
The location is very convenient to the customers to shop, which is the major plus point or merit to
Vaibhav.
[21]
STORE LAYOUT:
The major asset of Vaibhav is its outstanding architecture which was designed by one of the Indias
renowned architect. The layout is very keenly designed and structured by giving every importance to minute
aspects.
The furnishing and fixtures are very uniquely designed with imported wood and glasses. The
interiors are fabulously designed, which will be covered later in the further studies in visual merchandising.
[22]
VSQUARE is hugely constructed in and about 106000 sft, which has very large cellar and sub cellar for
parking cars and two wheelers.
The approximate area of cellar and sub cellar is 18000 sft and 17000 sft respectively, where 200
numbers of vehicles can be parked at a time.
Let us now, have a detailed picture about all the floors in Vaibhav.
SUB CELLAR:
Sub cellar of Vaibhav covers a very huge area of 17000 sft. Sub cellar is accommodating
CELLAR:
Customer parking.
Vaibhav gold purchase plan office.
Time office.
Maintenance office.
There is a lobby which is an atrium of around 3000 sft which has divided Vaibhav and Kankatala
with 48000 sft each.
GROUND FLOOR:
The ground floor carries heavy gold jewellery. The total area it covers is 6418.25 sft. Ground floor
comprises of like
[23]
FIRST FLOOR:
This floor carries of light gold jewellery which is about 5972.40 sft.
SECOND FLOOR:
This floor accommodate with 92.5 sterling silver jewelry and decorative items, which also of
5972.40 sft.
THIRD FLOOR:
Third floor is for diamond jewellery, temple and antique jewellery, which are unique in Vaibhav.
FOURTH FLOOR:
This floor carries of gem stones jewellery and all ruby, emerald, sapphire etc. There are some
international brand items like watches and accessories of brands like TISSOT, RADO, MONT BLANC and
TAGHEUER. This floor covers an area of about 6104.10 sfts.
7 counters
CMDs personal cabin, conference room, pantry, guest
room and big lounge.
Finally the whole building from the ground level is about 64.6 feet height. There are three
alleviators, one for the customers, one for the employees and other for CMD which is his personal.
Each and every aspect in the organization is giving high important as the anything should not hurt
the convenience of the customer and as well as employees.
[25]
Then the process of cleaning process starts by the house keeping department. Each and every part of the
store is made to clean and housekeeping is responsible for the cleaning process. This process continues
till 9.45am.
The staff is supposed to come to before 10.00am and give their attendance through thumb print
detectors.
Then by sharp 10.00am prayer is held in the atrium for 5minutes where it is compulsory for each and
every employee.
As the prayer completes the floor managers are responsible to open the strong room lockers and made
the products assorted in the counters by the counter incharges.By the 10.30am assortment process
completes.
Then the floor manager will check the total staff attendance and make a note of weekly off, leaves,
absentees and late comers.
On each and every day the jewellery packing materials, counter accessories, display stock pads are
checked and are replenished before the sales starts.
At 10.30am the customers are welcomed to the shop, and then the sales process starts. When the
customer enters the show room, they are well received by the CREs and they guide them to reach the
require counters.
Counter incharges assist the customer to reach their requirement by showing them the jewelry they
wanted and then the estimation process starts. If the customer purchases the jewelry, then without any
delay the billing is made.
And in this way from morning 10.30 to night 9.00 the sales goes on, and the customers always goes out
of the store with a great shopping experience.
The floor manager plays a vital role in organizing the day to day operations .He checks the staff
grooming, timings of the staff entry.
[26]
House keeping staff are introduced to mob the floors, counters, for every one hour and also introduced to
clean the floor, dusting the counters and special cleaning if any.
While the sales go on the pantry boys are instructed to serve the
customers.
The administrative grievances like the electrical, plumbing, carpentry and EDP ARE CHECKED by the
floor managers if any.
Finally the sales process goes on till night 9.00pm.Then after the counter incharges are responsible to
hand over the slips of the closing stock details to the inventory department.
Then the products are safely stored in the strong room lockers and finally the keys are handed over the
vigilance offers.
MERCHANDISING:
Merchandising covers all the functions involved in identifying the right product for the retailer,
sourcing it and then eventually, ensuring that it reach the end consumer, is merchandising.
In merchandising the three functions are very important for better functioning of retail store. In that
the first on is
1) ASSORTMENT:
Assortment refers to the selection of merchandising carried by a retailer. It includes both the breath of a
product categories and the variety with in each category.
Assortment is one of the core aspects in merchandising. The width of the assortment is
the number of distinct goods categories or product line that a retailer carries. And the depth of assortment is
the variety in any one of goods category with which a retailer is involved
[27]
Now lets have a study of assortment made in Vaibhav jewelry show room, where there is a
vast of product, variety and range of jewelry. Lets starts from floor wise.
Ground Floor. (This is assorted with all heavy weight gold jewelry)
Two counters for necklace, haram and vaddanam
Bangles counter of daily wear and fancy wear.
Locket set with ear rings.
The ground floor is mainly concentrated on heavy weight gold as because it will attract the more
walk ins of customer and may create in impulse buying.
But at every floor, few jewelry displays are made to communicate the customer about their assortments in
the show room.
2) PRICING:
Price is the integral part of retail mix; it is the factor which is the source of revenue for the retailer.
The price of the merchandise also communicates the image of the retail store to the customers.
Vaibhav private enterprise deals with jewelry of the gold, sterling silver, diamonds and gems where
pricing is the heart of the business.
Pricing of metals should depend carefully as the whole core business depends on it. Mainly the pricing
policy that is used in the business is cost oriented where the price of jewelry depends on the metal cost and
basing on it some additional expenses are added like the manufacturing costs, wastage cost craft and design
cost.
Basing on these criteria the pricing of jewelry is considered .There are also few parameters by which
the jewelry is decided that are like the carat of gold or diamond it is, making or craftsmanship that is
[29]
involved, the logistics, that from which the place is brought, the maintenance that is done to store or
preserve the inventory, the competitive analysis and economic conditions that appear in external
environment and basing on these the pricing is done for jewelry.
The cost of the metal is variable as it fluctuates with the slight change in the external environment
hence estimation becomes very difficult.
But for diamonds, pricing is done basing on the parameters like
carat
cut
shape
size
When the gold, silver, diamonds are purchase a value added tax (VAT) of 1% is also added to the cost of
jewelry and finally the selling price is calculated.
VISUAL MERCHANDISING:
All the components of the retail merchandising mix play a role in creating the image, the manner
in which it is presented to the consumer is, many a times a differentiating factor. Shopping today is a
sensory experience. The retailer needs to appeal to the senses of sight, touch, sound and smell. When guided
by these, he can create a shopping experience that will entice the shoppers into the store.
Every minute thing has to be presented in an attractive manner and at the same time, it has to
be profitable to the retailer. Basically visual merchandising is concerned with the store design and its
environment. The elements of the store environment are like.
[30]
The necks used for the jewelry display are white in colored as the jewelry should give soothing impression
on customer.
There are theme graphics, sign ages, and promotional graphics. To make it as a shopping experience,
sound is also very important to relax the customer while shopping. Vaibhav has always concentrated on the
customers satisfaction; they play very soft music like classical as high class customers step ins more. The
whole store theme is designed basing on the target customers and merchandise mix. The atmosphere and
dcor are very appealing to every individual who step in the store.
STAFFING:
EMPLOYEE is always known as the internal customer of the organization. The roles of staff are
always an important issue for an organization and its performance.
Behind VAIBHAVS success the staff contribution is very large. The team work which is involved is
apprecitable.VAIBHAV believes in oneness among the employee and they consider it as their family. The
unique feature in VAIBHAV is that equal importance is given to each and every employee.
In Toto the number staff employed in Vaibhav is 296 members including the top management one is
Vaibhav jewellery showroom and cooperate office.
There are few departments in corporate office which look after the operations of Vaibhav.
There is a marketing department in which there are 8 members employed .In HR department, 11
members look after the human resource management. In finance dept there are 11 members and in EDP
there are 2 members who operate.
Coming to the showroom part in ground floor there are 43 employee who look after the operations in
the floor
In first floor there are 47 employees
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CRES-11
VIGILENCE-11
RELEIVERS-4
The support staff like the doormans and drivers is 6 and 3 respectively.
The maintenance departments there are 11 members working .In Vaibhav project there are 5 civil
workers .There are housekeeping staff, who are 23 in number and security who are 11 in member are hired
from the private people by Vaibhav. Now coming to the back office staff in showroom managers cabin, we
find 21 staff working.
In data entry department there are 11 members.
Inventory department there are 10 members.
Purchase plan department there are 8 members.
And finally there are three members employed personally for CMD and they include one Vigilance, one
Personal Assistance, one Driver
There is a vast hierarchy of staff members employed in Vaibhav, which will give a clear picture of staff in
showroom. This starts with
CMD
SHOWROOM MANAGER
FLOOR MANAGER
SALES COORDINATOR
COUNTER INCHARGE
CASHIERS
VIGILENCE OFFICERS
PANETRY SUPERVISOR
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INVENTORY
Vaibhav Pvt Ltd is a huge retailer in jewelry market, with a large number of varieties of gold,
sterling silver and diamond items. It manufactures its jewelry for sale. But mainly it is a procurer of jewelry
items from many branded and specialized manufacturer and dealers in India and neighboring countries.
Vaibhav is connect with only procurement process, but as this is a jewelry business, the role of
supply chain is not so major. It does not have any chain process from manufacturer to whole seller. They
does not maintain warehouse or distribution centre, as they deal with very precious metal. So they bring all;
the procured stock to the inventory department in show room.
They procure stock from manufacturer and dealers like in Mumbai, Chennai, Kolkata,
Ahmedabad, Bangalore, Vijayawada, Jodhpur and Vellore.
Lot of jewelry is created, which are stored in lockers in inventory and then tagging process takes
place. This is done in the software called cadmium, prepared by Jilaba Infosys Ltd. The programming is of
SQL and Visual Basic. In inventory department software is also developed.
After the tagging is done, pricing is made on the respective jewelry on its weight and cost and then it is
prepared for delivery, as soon as the respective counter incharges place the demand for it.
[35]
There is also an Audit department, which look after the accuracy and authenticity of all the tagging
and order of the jewelry in each and every counter. This helps in avoid of shrinkages and theft of jewelry
items.
And if we talk about the Logistics, that is done very carefully as this deals with a jewelry item. While
transportation many measures are taken to avoid misrepresentations.
CUSTOMER RELATION MANAGEMENT:
Vaibhav is becoming skilled in CRM which focuses on meeting the individual needs of valued
customers. Vaibhav is providing excellent real time customer service through the effective use of effective
use of individual account information they gather from each customer so that they customize market
offerings, services, programs, messages and media. Vaibhav maintains and mines a rich customer database
with information derived from all the channels.
Vaibhav is gaining a lot of customers with the help of CRM and the reasons are as follows:
The goal is to create and to keep the customers.
The employees are trained in such a way that their motto is not to sell but help the customers to buy.
Finally they want the customers to say I LOVE TO BUY IN VAIBHAV.
They maintain good relationships with customers by understanding their needs in Vaibhav and
helping the customers is their top priority.
Vaibhav focuses mainly on the following points:
They ensure that customer gets good value for the money they pay.
They make sure that the employees are well dressed, good at communication, and good body language.
[36]
The satisfaction that they derive because they what they want from what they have.
BOARD OF DIRECTORS:
S. No.
1.
DIRECTOR NAME
Bharata Mallika Ratna Kumari Grandhi
DESIGNATION
Chairman and Managing director
2.
Executive Director
3.
Sinduri Grandhi
Director
4.
Director
5.
Company Secretary
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CHAPTER 4
THEORATICAL REVIEWS OF RATIO ANALYSIS
[38]
INTRODUCTION:
As observed, a basic limitation of the traditional financial statement comprising As
observed, a basic limitation of the traditional financial statement comprising the balance sheet and the
profit and loss account is that they do not give all the information related to the financial operation of the
firm. Nevertheless, they provide some extremely useful information to the extent that the Balance Sheet
mirrors the financial position on a particular date in terms of the structure of assets, liabilities and owners
equity and so on. The profit and loss account shows the results of operations during a certain period of
time in terms of the revenues obtained and the cost incurred during the year. Therefore, much can be learnt
about a firm from a careful examination of its financial statements as invaluable documents/performance
analysis. Users of financial statements can get further insight about financial strengths and weaknesses of
the firm if they properly analyze information reported in these statements.
Management should be
particularly interested in knowing financial weakness of the firm to take suitable corrective actions. The
future plans of the firm should be laid down in view of the firms financial strengths and weaknesses.
[39]
Thus, financial analysis is the starting point for making plans, before using any sophisticated forecasting
and planning procedures. Understanding the past is a pre-requisite for anticipating the future.
MEANING AND RATIONALE:
Ration analysis is a widely used tool of financial analysis. It is defined as the systematic use of
ration to interpret the financial statements so that the strengths and weaknesses of the firm as well as its
historical performance and current financial condition can be determined. Ratio analysis is a powerful tool
of financial analysis. A ratio is defined as the indicated quotient of two mathematical expressions and as
the the relationship between two or more things.
In financial analysis, a ratio is used as a benchmark for evaluating the financial position and performance of
a firm.
The term ratio refers to the numerical or quantitative relationship between two items/variables. This
relationship can be expressed as:
Percentages, say, Net Profits are 25% of Sales (assuming Net Profit of Rs.25,000 and Sales of Rs.1,00,000),
1.
2.
Proportion of numbers (the relationship between Net profits and Sales is 1:4).
These alternative methods of expressing items, which are related to each other, are, for purpose of
financial analysis, referred to as ratio analysis. It should be noted that computing the ratios does not add
any information already inherent in the above figures of profits and sales. What the ratios do is that they
reveal the relationship in a more meaningful way so as to enable us to draw conclusions from them. The
rationale of ratio analysis lies in the fact that it makes related information comparable. A single figure by
itself has no meaning but when expressed in terms of a related figure, it yields significant inferences. For
instance, the fact that the Net profits of a firm amount to, say Rs. Ten Lakhs throws no light on its adequacy
or otherwise.
[40]
The figure of Net profit has to be considered in relation to other variables. How does it stand in
relation to sales? If, therefore, Net profits are shown in terms of their relationship with items such as Sales,
Assets,Capital employed, Equity capital and so on, meaningful conclusions can be drawn regarding their
adequacy.
To carry the above example further, assuming the capital employed to be Rs.50 lakh and Rs.100
lakh, the Net profit are 20% and 10% each respectively. Ratio analysis, thus, as a quantitative tool, enables
analysts to draw quantitative answers to questions such as; are the Net profits adequate? Are the assets being
used efficiently? Is the firm solvent? Can the firm meet its current obligations and so on?
IMPORTANCE AND LIMITATIONS OF RATIO ANALYSIS
Importance:
As a tool of financial management, ratios are of crucial significance. The importance of ratio
analysis lies in the fact that is presents facts on a comparative basis and enables the drawing inference
regarding the performance of a firm. Ratio analysis is relevant in assessing the performance of a firm in
respect to the following aspects.
i. Liquidity position
ii. Long-term solvency
iii. Operational efficiency
iv. Overall profitability
v. Inter-firm comparison, and
vi. Trend analysis
Liquidity position:
With the help of ratio analysis conclusions can be regarding the liquidity position of a firm. The
liquidity position of a firm would be satisfactory if it is able to meet its current obligations when they
[41]
become due. A firm can be said to have the ability to meet its short-term liabilities if it has sufficient liquid
funds to pay the interest on its short-maturing debt usually within a year as well as to repay the principal.
This ability is reflected in the liquidity ratio of a firm. The liquidity ratios are particularly useful in credit
analysis by banks and other suppliers of short-term loans.
Long-term solvency: Ratio analysis is equally useful for assessing the long-term financial viability of a firm. This aspect
of the financial position of a borrower is of concern to the long-term creditors, security analysts and the
present and potential owners of a business. The long-term solvency is measured by the leverage/capital
structure and profitability ratios, which focus on earning power and operating efficiency. Ratio analysis
reveals the strength and weaknesses of a firm in this respect. The leverage ratios, for instance, will indicate
whether a firm has a reasonable proportion of various sources of finance or if it is heavily loaded proportion
of various sources of finance or if it is heavily loaded with debt in which case its solvency is exposed to
serious strain. Similarly the various profitability ratios would reveal whether or not the firm is able to offer
adequate return to its consistent with the risk involved.
Operating Efficiency: Another dimension of the usefulness of the ratio analysis, relevant from the view point of
management, is that it throws light on the degree of efficiency in the management and utilization of its
assets. The various activity ratios measure this kind of Operational efficiency.
Overall Profitability: Unlike the outside parties, which are interested in one aspect of financial position of a firm, the
management is constantly concerned about the over-all profitability of the enterprise. That is, they are
concerned about the ability of the firm to meet its short-term as well as long-term obligations to its creditors,
to ensure a reasonable return to its owners and secure optimum utilization of the assets of the firm. This is
possible if an integrated view is taken and all the ratios are considered together.
Inter-firm Comparison: [42]
Ratio analysis not only throws light on the financial position of a firm but also serves as a stepping
stone to remedial measures. This is made possible due to inter-firm comparison and comparison with
industry averages. A single figure of a particular ratio is meaningless unless it is related to some standard or
norm. One of the popular techniques is to compare the ratios of a firm with the industry average. An interfirm comparison would demonstrate the firms position vis--vis its competitors.
Trend Analysis: Finally, ratio analysis enables a firm to take the time dimension into account. In other words,
whether the financial position of a firm is improving or deteriorating over the years. This is made possible
by the use of trend analysis. The significance of a trend analysis of ratios lies in the fact that the analysis
can know the direction of movement, the is, whether the movement is favorable or unfavorable. For
example, the ratio may be low as compared to the norm but the trend may be upward. On the other hand,
though the present level may be satisfactory but the trend may be a declining one.
Limitations:
Ratio Analysis is a widely used tool of financial analysis. Yet, it suffers from various limitations.
The operational implication of this is that while using ratios, the conclusions should not be taken on their
face value. Some of the limitations, which characterize ratio analysis, are
i.
Difficulty in comparison.
ii.
iii.
Conceptual Diversity
Difficulty in comparison: -
[43]
One serious limitation of ratio analysis arises out of the difficulty associated with there
comparability. One technique that is employed is inter-firm comparison. But such comparison is vitiated by
different procedures adopted by various firms.
1)
2)
3)
4)
Differences in basis of inventory valuation (e.g.:- last in first out, average cost and cost);
Different depreciation methods (i.e. straight line Vs. written down basis);
Estimated working life of assets, particularly of plant and equipment;
Amortization of deferred revenue expenditure such as preliminary expenditure and discount on issue
of shares;
5) Capitalization of lease;
6) Treatment of extraordinary items of income and expenditure; and so on.
Secondly, apart from different accounting procedures, companies may have different
accounting procedures, implying differences in the composition of assets, particularly current assets. For
these reasons, the ratios of two firms may not be strictly comparable.
Impact of Inflation: The second major limitation of the ratio analysis is a tool of financial analysis is associated
with price level changes. This infact is a weakness of the traditional financial statements, which are based
on historical cost. An implication of this feature of the financial statements as regards ratio analysis is that
assets acquired at different periods are, in effect, shown at different prices in the balance sheet, as they are
not adjusted for changes in the price level. As a result, ratio analysis will not yield strictly comparable and
therefore, dependable results.
Conceptual Diversity:
The factor that influences the usefulness of ratios is that there is difference of opinion regarding the
various concepts used to compute the ratios. There is always room for diversity of opinion as to what
constitutes shareholder`s equity, debt, assets, profit and so on.
Finally, ratios are only a post-mortem analysis of what has happened between two balance sheet
dates. For one thing the position in the interim period is not revealed by ratio analysis. Moreover, they give
no clue about the future.
[44]
In brief, ratio analysis suffers from serious limitations. The analyst should not be carried away by its
over simplified nature, easy computation with high degree of precision. The reliability and significance
attached to ratios will largely depend upon the quality of data on which they are based. They are as good as
the data itself. Nevertheless, they are an important tool of financial analysis.
Precautions for use of ratios:
The calculation of ratios may not be a difficult task but their use is not easy. The information on
which these are based, the constraints of financial statements, objectives for using them, the caliber of the
analyst, etc, are important factors, which influence the use of ratios. Following guidelines/factors may be
kept in mind interpreting various ratios.
1. The reliability of ratio is linked to the accuracy of information in financial statements. Before
calculating ratios one should see whether proper concepts and conventions are used for preparing
financial statements of not. Competent auditors should properly audit the statements.
The purpose of the user is also important for the analysis of ratios. A creditor, a banker, an investor,
a shareholder, all has different objects for studying ratios. The purpose (or) object for which ratios
are required to be studied should always be kept in mind for studying various ratios. Different
objects may require the study of different ratios.
2. Another precaution in ratio analysis is the proper selection of appropriate ratios. The ratios should
match the purpose for which these are required.
Calculating a large number of ratios without determining their need in the present context may
confuse the things instead of solving them. Only those ratios should be selected which can throw
proper light on the matter to be discussed.
[45]
3. Unless otherwise the ratios calculated are compared with certain standards one will not be reach at
conclusions. These standards may be a rule of thumb as in current ratio (2:1), may be industry
standards, may be projected ratios etc. The comparison of calculated ratios with the standards will
help the analyst in forming his opinion about financial situation of the concern.
4. The ratios are only the tools of analysis but their interpretation will depend upon the caliber and
competence of the analyst.
[46]
interest and repay principle and the relationship between various sources of funds. (Capital structure
relationship).
Investors, who have invested their money in the firms share, are most concerned about the firms
earnings. They restore more confidence in those firms that show steady growth in earnings. As
such, they concentrate on the analysis of the firms present and future profitability. They are also
interested in the firms financial structure to the extent it influences the firms earnings ability and
risk.
Management of the firm would be interested in every aspect of the financial analysis. It is their
overall responsibility to see that the resources of the firm are used most effectively and efficiently,
and that the firm`s financial condition is sound.
Types of Ratios
Several ratios, calculated from the accounting data, can be grouped into various classes
according to financial activity or function to be evaluated. As stated earlier, the parties interested in
financial analysis are short-term and long-term creditors, owners and management. Short-term creditors`
main interest is in the liquidity position or the short-term solvency of the firm. Long-term creditors`, on the
other hand, are more interested in the long-term solvency and profitability of the firm. Similarly, owners
concentrate on the firms profitability and financial condition.
Management is interested in evaluating every aspect of the firms performance. They have to
protect the interests of all parties and see that the firm grows profitably. In view of the requirements of the
various users of ratios, we may classify them into the following four important categories:
LIQUIDITY RATIOS
LEVERAGE RATIOS
ACTIVITY RATIOS
PROFITABILITY RATIOS
[47]
LIQUIDITY RATIOS
It is extremely essential for a firm to be able to meet its obligations as they become due.
1. CURRENT RATIO
2. QUICK RATIO
3. CASH RATIO
CURRENT RATIO:
The current ratio is calculated by dividing current assets by current liabilities.
Current assets
CURRENT RATIO
=
Current liabilities
Current assets include cash and those assets, which can be converted into cash within a year,
such as Marketable Securities, Debtors and Inventories. Prepaid expenses are also include in current assets
as they represent the payments that will not be made by the firm in future. Current Liabilities include
[48]
Creditors, Bill payable, Accrued expenses, Short-term bank loan, and Income Tax Liability and Long-term
debt maturing in the current year.
The current ratio is a measure of the firms` short-term solvency. The higher the current ratio, the
larger is the amount of rupees available per Rupee of current liability, the more is the firms` ability to meet
current obligations and the greater is the safety of funds of short-term creditors.
QUICK RATIO:
The Quick ratio is calculated by dividing quick assets by quick liabilities.
Quick assets
QUICK RATIO =
Quick liabilities
Quick assets or Liquid assets means those assets which are immediately convertible into cash
without much loss. All current assets except prepaid expenses and inventories are categorized in liquid
assets. Quick liabilities means those liabilities, which are payable within a short period. Normally, Bank
overdraft and Cash credit facility, if they become permanent mode of financing are in quick liabilities.
As this ratio concentrates on cash, marketable securities and receivables in relation to current
obligation, it provides a more penetrating measure of liquidity than current ratio.
CASH RATIO:
The cash ratio is calculated by dividing cash + marketable securities by current liabilities.
Cash + Marketable Securities
CASH RATIO =
Current liabilities
[49]
Since cash is most liquid asset, a financial analyst may examine cash ratio and its equivalent
to current liabilities. Trade investment or marketable securities are equivalent of cash; therefore, they may
be included in the computation of cash ratio.
2 LEVERAGE RATIOS:
The short-term creditors like bankers and suppliers of raw material are more concerned
with the firms` current debt-paying ability. On the other hand, long-term creditors like debenture holders,
financial institutions etc., are more concerned with the firms` long-term financial strength. In fact, a firm
should have strong short-as well as long-term financial position. To judge the long-term financial position
of the firm, financial leverage, or Capital structure, ratios are calculated. These ratios indicate mix of funds
provided by owners and lenders. As a general rule, there should be an approximate mix of debt and owners
equity in financing the firms` assets.
The manner in which assets are financed has a number of implications. First, between debt
and equity, debt is more risky from the firms` point of view. The firm has a legal obligation to pay interest
on debt holders, irrespective of the profits made or losses incurred by the firm. If the firm fails to debt
holders in time, they can take legal action against it to get payment and in extreme cases, can force the firm
into liquidation.
Secondly, use of debt is advantageous for shareholders in two ways:
a.
They can retain control of the firm with a limited stake and
b.
Their earnings will be magnified, when the firm earns a rat of return on the total capital employed
higher than the interest rate on the borrowing funds. The process of magnifying the shareholders
return through the use of debt is called financial leverage or financial gearing or trading on
equity.
Leverage ratios may be calculated from the balance sheet to determine the proportion of debt
in total financing. Many variations of these ratios exist; but all these ratios indicate the same thing-the
[50]
extent to which the firm has relied on debt in financing assets. Leverage ratios are also computed from the
profit and loss items by determining the extent to which operating profits are sufficient to cover the fixed
charges.
DEBT EQUITY RATIO
The relationship describing the lender contribution for each rupee of the owners contribution
is called DEBT-EQUITY RATIO. DEBT EQUITY RATIO is directly computed by the following
formula.
DEBT
DEBT-EQUITY RATIO =
EQUITY
Proprietary Ratio:
This ratio states relationship between share capital and total assets.
Proprietors equity represents equity share capital, preference share capital and reserves and surplus.
The latter ratio is also called capital employed to total assets.
EQUITY SHARE CAPITAL
PROPRIETORY RATIO =
TOTAL TANGIBLE ASSETS
(OR)
PROPRIETORS EQUITY
PROPRIETORY RATIO =
TOTAL TANGIBLE ASSETS
EBIT
--------------------------------INTEREST CHARGES
Debtors turnover,
b.
c.
Credit Sales
DEBTORS COLLECTION PERIOD RATIO =
Avg.Accounts Receivable
DEBTORS COLLECTION PERIOD RATIO:
This ratio indicates the extent to which the debts have been collected in time. The debt collection
period indicates the average debt collection period. This ratio is a good indicator to the lenders of the firm,
because it explains to them whether their borrower is collecting from its debt in time. An increase in this
period indicates blockage of funds in debtors.
Months/Days (in a year)
DEBTORS COLLECTION PERIOD RATIO =
Debtors turn over
[53]
Debtors X
Months/Days(in a year)
(or)
Sales
FIXED ASSETS TURNOVER RATIO:
The fixed assets turnover ratio measures the efficiency with which the firm is utilizing its
investments in fixed assets, such as land, building, plant and machinery, furniture, etc. It also indicates the
adequacy of sales in relation to the investment in fixed assets. The fixed assets turnover ratio is sales
divided by net fixed assets. The firm assets turnover ratio should be compared with past and future ratios
and also with ratio of similar firms and the industry average. The high fixed assets turnover ratio indicates
efficient utilization of fixed assets in generating sales, while low ratio indicates inefficient management and
utilization of fixed assets.
Sales
FIXED ASSETS TURNOVER RATIO =
Net fixed assets
[54]
4. PROFITABILITY RATIOS:
A company should earn profits to Survive and Grow over a long period of time. Profits are
essential, but it would be wrong to assume that every action initiated by management of a company should
be aimed at maximizing profits, irrespective of social consequences.
Profit is the difference between revenues and expenses over a period of time (usually a year).
Profit is the ultimate Output of a company, and it will have no future if it fails to make sufficient profits.
Therefore, the financial manager should continuously evaluate to the efficiency of the company in term of
profits. The profitability ratios are calculated to measure the operating efficiency of the company. Besides
management of the company, creditors and owners are also interested in the profitability of the firm.
Creditors want to get interest and repayment of principle regularly. Owners want to get a required rate of
return on their investment. This is possible only when the company earns enough profits.
Generally two major types of profitability ratios are calculated.
1. PROFITABILITY IN RELATION TO SALES
2. PROFITABILITY IN RELATION TO INVESTMENT
PROFITABILITY RATIOS IN RELATION TO SALES
1.
2.
CASH MARGIN
3.
OPERATING MARGIN
4.
1. Gross profit margin reflects the efficiency with which the management produces each unit of
product. This ratio indicates the average spread between the cost of goods sold and the sales
revenue. When we subtract the gross profit margin from 100%, we obtain the ratio of Cost of goods
to Sales.
Both this shows profits relative to sales after the deduction of production costs, and indicates the
relation between Production costs and Selling price. A high gross profit margin relative to the industry
average implies that the firm is able to produce at relatively lower cost.
A high gross profit margin ratio is a sign of good management. A gross margin ratio may increase due
to any of the following factors.
Higher sales prices, cost of goods sold remaining constant,
i.
ii.
A combination of variations in sales prices and costs, the margin widening, and
iii.
can be improved.
A low gross profit margin may reflect higher cost of goods sold due to the firms` inability to
purchase raw materials at favorable terms, inefficient utilization of plant and machinery, resulting in higher
cost of production. The ratio will also be low due to fall in prices in the market, or market reduction in
selling price by the firm in an attempt to obtain large sales volume, the cost of goods sold remaining
unchanged. The financial manager must be able to detect the causes of a falling gross margin and initiate
action to improve the situation.
Sales Cost of goods sold
(or) Gross profit
GROSS PROFIT MARGIN RATIO =
Sales
NET PROFIT MARGIN RATIO:
[56]
Net profit is obtained when operation expenses, interest and taxes are subtracted from the gross
profit.
If the non-operating income figure is substantial, it may be excluded from PAT to see
profitability arising directly from sales. Net profit margin ratio establishes a relationship between net profit
and sales and indicated managements efficiency in manufacturing, administering and selling the products.
This ratio is the overall measure of the firms` ability to turn each rupee sales into net profit. If the net
margin is inadequate, the firm will fail to achieve satisfactory return on shareholder`s funds.
This ratio also indicates the firms` capacity to withstand adverse economic conditions. A firm
with a high net margin ratio would be in an advantageous position to survive in the face of falling selling
prices, rising costs of production or declining demand for the product. It would really be difficult for a low
net margin firm to withstand these adversities. Similarly, a firm higher net profit margin can make better
use of favorable condition, such as rising selling prices; fall in costs of production or increasing demand for
the product. Such a firm will be able to accelerate its profits at a faster rate than a firm with a low net profit
margin will.
An analyst will be able to interpret the firms profitability more meaningfully if he/she evaluates
both the ratios-gross margin and net margin-jointly. To illustrate, if the gross profit margin has increased
over years, but the net profit margin has either remained constant or declined, or has not increased as fast as
the gross margin, this implies that the operating expenses relative to sales have been increasing. The
increasing expenses should be identified and controlled. Gross profit margin may decline due to fall in sales
price or increase in the cost of production.
Profit after tax
NET PROFIT MARGIN RATIO =
Sales
[57]
depreciation. This ratio indicates the relationship between the profit, which accrues in cash and sales.
Greater percentage indicates better position and Vice-Versa as it shows the correct profit earned by the firm.
This ratio is expressed as cash profit to sales.
Cash profit
CASH MARGIN RATIO =
X 100
Sales
X 100
Sales
1. RETURN ON INVESTMENT
[58]
RETURN ON INVESTMENT:
The term investment refers to Total Assets. The funds employed in Net assets are known as
Capital Employed. Net assets equal net fixed assets plus current assets minus Current liabilities excluding
Bank loans. Alternatively, Capital employed in equal to Net worth plus total debt.
The conventional approach of calculating return on investment (ROI) is to divide PAT by
Investment. Investment represents pool of funds supplied by shareholders and lenders, while PAT represents
residual income of shareholders; therefore, it is conceptually unsound to use PAT in the calculation of ROI.
Also, as discussed earlier, PAT is affected by capital structure. It is, therefore more appropriate to use one of
the following measures of ROI for comparing the operating efficiency of firms.
EBIT (1-T)
ROI = ROTA =
Total Assets
EBIT (1-T)
ROI =
RONA =
NET Assets
Where ROTA and RONA respectively Return on Total assets and Return on Net
X 100
Shareholders funds
RETURN ON CAPITAL:
The ROCE is the second type of ROI. The term capital employed refers to long-term funds
supplied by the creditors and owners of the fund. It can be computed in two ways. First, it is equal to noncurrent liabilities (long-term liabilities) plus owners equity. Alternatively, it is equivalent to Net Working
Capital plus Fixed Assets. Thus, the Capital Employed provides a basis to test the profitability related to the
sources of long-term funds. A comparison of this ratio with similar firms, with the industry average and
overtime would provide sufficient insight into how efficiency the long-term funds of owners and creditors
are being used. The higher the ratio, the more efficient is the use of Capital Employed.
NET PROFIT AFTER TAX/EBIT
ROCE =
X 100
Average Total Capital Employee
Net profit
X 100
Gross Block
NET PROFIT is profit before Tax. Gross Block means Gross fixed assets i.e., Fixed assets before
deducting depreciation.
[60]
CHAPTER - 5
DATA ANALYSIS AND INTERPRETATION
[61]
FINANCIAL RATIOS:
(Financial Ratios are calculated to judge the financial position of the concern for long term as well
as the short term solvency point of view)
A. Liquidity Ratios: (Liquidity Ratios are used to measure the firms ability to meet short term
obligations.)
I.
Current Ratio
II.
Quick Ratio
III.
Absolute Quick Ratio
IV. Working Capital Ratio
B. Stability Ratios: (Stability Ratios help in ascertaining the long term solvency of a firm to
meet long term obligations.)
I.
II.
III.
IV.
A. LIQUIDITY RATIOS:
I.
CURRENT RATIO:
Current ratio may be defined as the relationship between Current Assets and Current Liabilities. The
rule of thumb or arbitrary standard prescribed that at 2:1 position is considered to be satisfactory. The two
basic components of this ratio are:
Current Ratio =
Year
Current assets
Current liabilities
Ratio
2011-12
2012-13
2,08,30,43,557
2,46,53,90,945
1,73,90,01,570
1,96,15,13,369
1.19:1
1.25:1
2,49,65,85,380
1,83,06,27,668
1. 36:1
*2013-14
[62]
Interpretation:
As a rule the current ratio with 2:1 or more is considered as satisfactory position of the firm. There is
a gradual increase in the current ratio every year. While compared to 2011-12 the ratio has been increased to
0.06 in 2012-13 (Current Assets increased by 18%, Current Liabilities increased by 12%) and when
compared to 2012-13 it has increased 0.11 points in 2013-14, it is due to the decrease in the Current
Liabilities (7%) and increase in the Current Assets by (1%). The Current Ratio of the Company is Gradually
Improving.
II.
QUICK RATIO:
Quick Ratio is also known as Acid Test Ratio or Liquid Ratio. It shows the relationship between
liquid assets to liquid / quick liabilities. The term liquidity refers to the ability of a firm to pay its short term
obligations as and when they become due.
Quick Ratio =
Year
Current
Stock in hand
Quick assets
Current liabilities
Ratio
2011-12
assets
2,08,30,43,557 1,69,69,55,664
38,60,87,893
1,73,90,01,570
0.22:1
2012-13
2,46,53,90,945 2,22,37,26,775
24,16,64,170
1,96,15,13,369
0.12:1
*2013-14
2,49,65,85,380 2,14,65,57,076
35,00,28,304
1,83,06,27,668
0.19:1
Interpretation:
As a rule quick ratio with 1:1 is considered as a satisfactory position of the firm. It has been
observed that the Stock is Hand is 85% of the Total Current Assets (on Average for 3 Years), which impacts
the Quick Ratio. The Quick Ratio is at 0.17 (on Average) as the Quick Assets are at 15% of the Total Current
Assets. Since the Gap between Inventories & Total Current Assets is decreased in the FY 2012-13, it has
impacted the Quick Ratio in the Corresponding year to decrease to 0.12 from 0.22
III.
The Current Assets which are ready in the form of cash are considered as absolute Quick Assets.
Here the cash and bank balance and the interest on fixed assets are considered as Absolute Quick Assets. It
is the relation between absolute quick assets and Current Liabilities.
[64]
Year
2011-12
2012-13
*2013-14
Current liabilities
14,27,24,887
17,33,54,457
9,77,88,402
1,73,90,01,570
1,96,15,13,369
1,83,06,27,668
Ratio
0.082:1
0.088:1
0.053:1
Interpretation:
As a rule the Absolute quick ratio with 0.5:1 is considered as ideal ratio.
The Absolute Ratio is 0.075 on Average for the Past 3 years. This shows that the Company has no
significant Cash & Bank Balances as compared to the Current Liabilities.
IV.
This ratio indicates the velocity of the utilization of net working capital. It indicates the number of
time the working capital is turned over in a year.
Year
2011-12
2012-13
* 2013-14
Sales
11,49,51,81,823
13,02,78,85,431
7,97,60,30,224
Ratio
33.41
25.85
11.97
Interpretation:
The Working Capital Ratio in 2011-12 is 33.41 and in 2012-13 it is 25.85, there is a decrease of 7.56 points.
In the year 2013-14 the Working Capital Ratio is 11.97, there is a decrease of 13.88 points, this is due to the
decline in the bullion sales during the FY 2013-14, as per RBI directives and increase in the working capital
by 32% and decrease in the sales by 40%.
[66]
B. STATBILITY RATIOS:
I. FIXED ASSETS RATIO:
This ratio explains whether the firm has raised adequate long term funds to meet its fixed assets
requirement. It gives an idea as to what part of the capital employed has been used in purchasing the fixed
assets for the concern. If the ratio is less than 1 it is good for the company.
Year
Fixed assets
Business assets
Current
Capital
Ratio
employed
88,20,41,579
0.43
2011-12
38,23,10,202
2,62,10,43,149
liabilities
1,73,90,01,570
2012-13
37,02,98,343
2,97,52,18,745
1,96,15,13,369
1,01,37,05,376
0.36
* 2013-14
38,99,48,340
3,04,14,15,869
1,83,06,27,668
1,21,07,88,201
0.32
Interpretation:
As of a rule, the ideal ratio for the Fixed Assets Ratio is 0.67. There is a decrease (-3%) of fixed
assets in the year 2012-13 and the capital employed is increased (15%), The ratio has been decreased 0.07.
[67]
In the year 2013-14 the fixed assets have been increased (5%) whereas the capital has increased (19%). The
ratio has been decreased 0.04 points due to less increase of fixed assets compared to the capital employed.
Year
Current assets
Inc/(dec)
Fixed assets
of ca
Inc/(dec) of
Ratio
fa
2011-12
2,08,30,43,557
38,23,10,202
5.44
2012-13
2,46,53,90,945
18%
37,02,98,343
-3%
6.65
* 2013-14
2,49,65,85,380
1%
38,99,48,340
5%
6.40
[68]
Interpretation:
In the year 2012-13 the Ratio has been increased 1.21
assets (18%) and decrease of fixed assets (-3%). In the year 2013-14 the ratio has been decreased 0.25 points,
due to the increase of current assets (1%) and more increase of fixed assets (5%) than the current assets.
III.Debt Equity Ratio:
The ratio indicates the relationship between the external equities or the outsiders funds and the internal
equities or the shareholders funds; this is why this ratio is also known as External Internal Equity Ratio or
Debt to Net worth Ratio.
A high ratio shows that the claims of the creditors are greater than that of owners and is un-favorable
from the firms point of view. Sometimes sufficient profit cannot be earned to pay even the interest changes
of the creditors. Thus a low ratio shows a favorable position.
[69]
Year
Outsider funds
Shareholders funds
Ratio
2011-12
6,86,84,710
74,11,53,541
0.09
2012-13
10,92,07,247
85,81,27,596
0.12
* 2013-14
20,17,63,666
96,78,86,745
0.20
Interpretation:
As a rule the Debt Equity Ratio with 1:1 is considered as ideal ratio. When compared to 2011-12,
the outsider funds are increased to 14%, and the share holder sunders funds are increased 116%, this results
decrease in the ratio. In the year 2013-14 there is high increase (116%) in outsider funds when compared to
previous year, the share holder funds are increased to 62%. This results in high increase of the ratio due to
the more outsider funds.
IV. PROPRIETARY RATIO:
This ratio establishes the relationship between the equity share holders funds to total assets of the firm.
The ratio of proprietors funds to total funds (Total assets) is an important ratio for determining long-term
solvency of a firm. This ratio is also known as share holders to Net Worth ratio.
[70]
Proprietary Ratio =
Year
2011-12
2012-13
* 2013-14
Total assets
2,62,10,43,149
2,97,52,18,745
3,04,14,15,869
Ratio
0.28
0.28
0.31
Interpretation:
A high equity ratio is an indicator of a good financial position of the firm. The ideal ratio is 0.5:1.
There is a increase in both shareholder funds and Total Assets. The Proprietary Ratio is increased to
(0.31) as the Reserves & Surplus have increased (113%) more than the rate at which the Total Current
Assets increased (102%).
[71]
1.PROFITABILITY RATIOS
(These ratios are calculated to enlighten the end results of business activities which is the sole
criterion of the overall efficiency of a business)
1.
2.
3.
4.
5.
6.
7.
8.
9.
I.
represented as a percentage. It indicates the extent to which selling prices of goods per unit may decline
without resulting in losses on operation of a firm. A comparison of gross profit ratio over time for different
firms in the same industry is a good measure of profitability. A higher ratio is always considered as an index
of higher profitability and may be due to any or few of the following factors.
Increased in selling price per unit without changing in the Cost of Goods Sold.
Decrease in the unit cost of Cost of Goods Sold.
Change in both the selling price and Cost of Goods Sold.
Year
Gross profit
Sales
Ratio
2011-12
73,46,55,199
10,76,05,26,624
11,49,51,81,823
6.39
[72]
2012-13
69,08,93,793
12,33,69,91,638
13,02,78,85,431
5.30
* 2013-14
72,92,02,990
7,24,68,27,234
7,97,60,30,224
9.14
Interpretation:
The higher the gross profit the better the financial performance of the firm. There is a decrease in
both the Cost of Goods Sold and Sales, compared to previous years; however there is an increase in gross
profit.
II.
Net profit ratio establishes a relationship between net profit (after taxes) and sales. It indicates the
efficiency of the management in manufacturing, selling, administrative and other activities of the firm.
Higher the ratio, the better is the profitability. This is useful to the proprietors and investors because it
reveals the overall profitability of the concern
[73]
Year
2011-12
2012-13
* 2013-14
Net profit
5,58,87,255
11,69,74,055
10,97,59,151
Sales
11,49,51,81,823
13,02,78,85,431
7,97,60,30,224
Ratio
0.48
0.89
1.37
Interpretation:
The higher net profit ratio is an indicator of the strong financial position of the company. There is an
increase in Net Profit Ratio of 0.41% in 2012-13 while compared to the 2011-12. In the year 2013-14 there
is an increase of 0.48% while compared to 2012-13, this is due to decrease in both the sales and net profit,
the net profit Ratio is increased to 1.37.
III.
OPERATING RATIO:
[74]
Operating Ratio =
Year
2011-12
2012-13
* 2013-14
Operating cost
Inc/(dec)
Net sales
I/(d) in net
Ratio
11,09,55,89,240
12,62,84,19,957
7,59,02,81,630
in o.c
0.13%
-0.39%
11,49,51,81,823
13,02,78,85,431
7,97,60,30,224
sales
0.13%
-0.38%
96.52%
96.93%
93.44%
Interpretation:
The smaller the ratio, the greater the organizations ability to generate profit if revenue decreases.
Here the operating ratio in 2011-12 is 96.52% and is increased to the 96.93% in 2012-13, due to more
increase in operating cost than the sales. In the year 2013-14 the Operating ratio is decreased, due to
decrease in the sales (-39%) and the operating cost (-41%).
[75]
IV.
operating profit and net sales of the company. Operating profit is calculated by deducting the net sales from
the operating cost.
Gross profit
Operating
Operating
Inc/(dec)
Net sales
I/(d) of
Ratio
2011-12
2012-13
73,46,55,199
69,08,93,793
expenses
33,50,62,616
29,14,28,319
profit
39,95,92,583
39,94,65,474
of o.p
0%
11,49,51,81,823
13,02,78,85,431
sales
13%
3.47%
3.06%
*2013-14
72,92,02,990
34,34,54,396
38,57,48,594
-3%
7,97,60,30,224
-39%
4.83%
Interpretation:
The operating profit ratio is used to measure the relationship between the operating profit and net
sales of the firm. Higher the operating profit ratio the firm can increase its sale and can cuts down its
operating cost. In the year 2012-13 the operating profit ratio has been decreased 0.41%, this is due to
[76]
increase of sales (13%). In the year 2013-14 the operating profit ratio has been increased 1.77%, this is due
to decrease of the sale (-39%) and increase of operating profit (13%) when compared to the previous year.
V.
Return on capital employed is calculated with the help of earnings before tax and capital employed.
Capital employed is the sum of the share holders equity and debt liabilities. It is used to prove the value the
business gains from its assets and liabilities. It basically can be used to show how much a business is
gaining for its assets, or how much it is losing for its liabilities.
Net Profit
2011-12
2012-13
*2013-14
5,58,87,255
11,69,74,055
10,97,59,151
Business
Current
Assets
Liabilities
2,62,10,43,149 1,73,90,01,570
2,97,52,18,745 1,96,15,13,369
3,04,14,15,869 1,83,06,27,668
[77]
Capital Employed
Ratio
88,20,41,579
1,01,37,05,376
1,21,07,88,201
6.33
11.53
9.06
Interpretation:
Here, in the year 2012-13 there is an increase of net profit up to 109% and the capital employed was
less (15%), so there was an increase of 4.98 points in the ratio. In the year 2013-14 the capital employed
(37%) was higher than the net profit (-6%) due this there is a decrease in the ratio.
VI.
Ratio of net profit to shareholders fund shows the extent to which profitability objective is being
achieved. Higher the ratio, the better it is. When it is desired to work out the profitability of the company
from the shareholders point of view, then it is calculated by the following:
* 100
Inc/(Dec) of
Shareholders
Inc/(Dec)
Funds
Of Npit
74,11,53,541
85,81,27,596
96,78,86,745
109%
-27%
[78]
Shs Funds
Ratio
16%
13%
7.54
13.63
11.34
Interpretation:
Here, in the year 2012-13 there is a huge increase in the net profit (109%) due to the increase of the
share holder funds. In the year 2013-14 the net profit decreases (-27%) even though the shareholders funds
are increased. It is due to the decrease of the sales the net profit decreases and the return on the shareholders
fund ratio has been decreased to 6.2 points in 2013-14.
VII.
Shareholders Funds. It measures the rate of return on the ownership interest (shareholders equity) of the
common stock owners. It measures a firms efficiency at generating profits from every unit of shareholders
equity. Return on equity between 15% and 20% are generally considered as good. This ratio is expressed as
follows:
Year
2011-12
2012-13
* 2013-14
Ratio
5,58,87,255
11,69,74,055
10,97,59,151
fund
74,11,53,541
85,81,27,596
96,78,86,745
0.07
O.13
0.11
[79]
Interpretation:
In the year 2012-13 the Net Profit has been increased due to the increase of the Equity
Shareholders Funds. But in the year 2013-14 the Net Profit has been decreased due to the low revenue
generation compared to the previous year, even though Equity Shareholders funds has been increased. The
return on the Equity Shareholders Fund has been decreased 0.02 points.
VIII. RETURN ON TOTAL ASSETS:
This ratio is useful to measure the profitability of all the financial resources invested in the
firms assets. It indicates how effectively the pool of funds is utilized to generate favorable earnings. The
higher the ROA the better, because the company is earning more money on less investment.
Year
Inc/(dec)
2011-12
2012-13
* 2013-14
tax
5,58,87,255
11,69,74,055
10,97,59,151
of npt
109%
-6%
Total assets
Inc/(dec) of
Ratio
2,62,10,43,149
2,97,52,18,745
3,04,14,15,869
ta
14%
2%
2.13
3.93
3.60
[80]
Interpretation:
A company can have a high return on assets even if it has a low profit margin because it
has a high asset turnover. The profits of the company in 2013-14 have been decreased when compared to the
previous year, but the turnover on the assets has been increased. The company has generated more assets
with less investment. So the company is better at converting its investment into profit.
IX.
from their shares. After charging depreciation and payment of tax, the remaining amount will be distributed
[81]
to the share holders. It is generally considered to be the single most important variable in determining a
shares price. It is also a major component used to calculate the price to earnings valuation ratio.
tax
5,58,87,255
11,69,74,055
10,97,59,151
Preference dividend
No. Of equity
Earning per
shares
97,70,000
97,70,000
97,70,000
share
5.72
11.97
11.23
Interpretation:
If the earning per share increases, there is a possibility that the company may pay more
dividend or issue bonus shares. In short the market price of the share of the company will be affected by
all these factors. Here the in the Year 2012-13 the net profit has been increased very much (109%)
[82]
eventually the earning per share has also been increased. Due decrease of net profit in 2013-14 the
earning per share decreased to 0.74 points.
III.
IV.
V.
computing how many times capita employed is turned-over in a stated period. The higher the ratio, the
greater are the profits. A low Capital turnover ratio should be taken to mean that sufficient sales are not
being made and profits are lower. The ratio is ascertained as follows:
Year
Sales
Inc/(dec)
Capital employed
Inc/(dec)
2011-12
11,49,51,81,823
sales
-
88,20,41,579
e
-
2012-13
13,02,78,85,431
13%
1,01,37,05,376
15%
* 2013-14
7,97,60,30,224
-39%
1,21,07,88,201
19%
Ratio
13.03
12.85
6.58
Interpretation:
In the year 2012-13 the Capital employed is increased (15%) and the sales have been decreased
(13%), due to this the Capital Turnover Ratio has been decreased (0.18 points). In the year 2013-14 also the
[84]
capital employed is increased (19%) but the sales have been decreased (-39%), due to this changes the
Capital Turnover Ratio has been decreased (6.2 points)
II.
generate greater sales per rupee invested in all the assets of a concern. The inefficient use of the asset will
result in low sales volume coupled with higher overhead charges and under utilization of the available
capacity. This ratio expresses the number of fixed assets are being turned-over in a stated period.
Year
2011-12
2012-13
* 2013-14
Sales
Inc/(dec)
11,49,51,81,823
13,02,78,85,431
7,97,60,30,224
in sales
13%
-39%
Fixed assets
Inc/(dec) in
Ratio
38,23,10,202
37,02,98,343
38,99,48,340
fa
-3%
5%
30.06
35.18
20.45
[85]
Interpretations:
In the Year 2012-13 the sales increased to (13%) when compared to previous year. The fixed assets
are decreased to (-3%). The ratio also increased 5.12 points. There is a better utilization of fixed assets. In
the year 2013-14 even though the utilization of fixed assets increased (5%) the sales had decreased to (39%). The ratio had decreased 14.73 points.
III.
period. The higher is the ratio, the lower is the investment in working capital and the greater are the profits.
However, a very high turnover of working capital is a sign of overtrading and may put the concern into
financial difficulties. A low working capital turnover ratio indicates that working capital is not efficiently
utilized.
Year
Sales
Current Assets
2011-12
2012-13
* 2013-14
11,49,51,81,823
13,02,78,85,431
7,97,60,30,224
2,08,30,43,557
2,46,53,90,945
2,49,65,85,380
[86]
Current
Net Working
Liabilities
Capital
1,73,90,01,570
1,96,15,13,369
1,83,06,27,668
34,40,41,987
50,38,77,576
66,59,57,712
Ratio
33.41
25.85
11.97
Interpretation:
In the year 2012-13 the ratio has been decreased 7.56 points, this is due to low increase of sales than
the increase of working capital. In the year 2013-14 the ratio has been decreased (13.88). This is due to the
less utilization of the working capital in the company. The working capital ratio in the year 2012-13 is
11.97.
IV.
efficiently generate sales. This ratio considers all assets, current and fixed. The total assets turnover ratio is
calculated by dividing the net sales with total assets. The lower the total assets turnover ratio there is
ineffective utilization of assets. The higher the total assets turnover ratio there is effective utilization of
assets.
Year
Sales
2011-12
2012-13
* 2013-14
Inc/(Dec)
Total Assets
Inc/(Dec) In
11,49,51,81,823
In Sales
-
2,62,10,43,149
Total Assets
-
13,02,78,85,431
7,97,60,30,224
13%
-39%
2,97,52,18,745
3,04,14,15,869
14%
2%
[87]
Ratio
4.38
4.37
2.62
Interpretation:
In the year 2012-13 the total assets turnover ratio has been decreased 0.01 points, this is due to
less INC/DEC of sales (13%) compared to INC/DEC of Total Assets (14%). In the year 2013-14 there is a
huge decrease of sales (-39%) and decrease of total assets (2%), the ration had decreased 1.75 points.
V.
be able to meet the requirements of the business. But the level of inventory should neither be too high nor
too low.
Inventory Turnover Ratio (I.T.R.) indicates the number of times the stock has been turned over
during the period and evaluates the efficiency with which a firm is able to manage its inventory. If the
turnover is higher, then it means lesser amount of capital is blocked up in the form of working capital. A
very low ratio indicates excessive inventory.
Year
Cost of goods
sold
I/(d)
in cgs
Opening stock
Closing stock
Average
inventory
I/(d)
in a
in
Rati
o
2011-12
10,76,05,26,624
1,67,81,73,856
1,69,69,55,664
1,68,75,64,760
2012-13
12,33,69,91,638
15%
2,75,04,97,886
2,22,37,26,775
2,48,71,12,331
31%
4.96
*2013-14
7,24,68,27,234
-41%
2,06,93,87,377
2,14,65,57,076
2,10,79,72,227
-3%
3.43
[88]
Interpretation:
In the year 2012-13 the cost of goods sold has been increased (15%), and the average inventory is
also high (53%) compared to previous year. In the year 2013-14 the inventory turnover ratio has been
decreased 0.89 points, this is due to the decrease of the average inventory (-19%) and cost of goods sold (41%). These both are decreased due to the low opening and closing stock. The inventory turn ratio is low
due to the cost of goods sold is low compared to the average inventory.
3. COVERAGE RATIOS
[89]
(These ratios indicate the extent to which the interests of the persons entitled to get a fixed return or
a scheduled repayment as per agreed terms are safe. The higher the cover, the better it is)
I.
Fixed Interest coverage Ratio
I.
from lenders point of view and indicates whether the business would earn sufficient profits to pay
periodically the interest charges. The higher the ratio, the more secured the lenders will be in respect of their
periodical interest income.
Year
2011-12
2012-13
* 2013-14
Pbit
40,77,37,519
40,87,97,148
Interest
21,05,94,833
20,54,77,370
Ratio
1.93
1.98
37,70,53,118
21,30,51,067
1.76
Interpretation:
As of a rule, the interest coverage ratio below 1 indicates the company is not generating
sufficient revenues to satisfy the interest expenses. In the year 2011-12 the interest coverage ratio is 1.93
and in 2012-13 it is 1.98, there is an increase of 0.05 points. There is a significant decrease in the ratio to
0.22 points in the year 2013-14.
[90]
4.LEVERAGE RATIOS
(These ratios explain the extent to which the debt is employed in the capital structure of a firm.)
I.
Operating Leverage
II. Financial Leverage
I. OPERATING LEVERAGE:
It occurs when with fixed costs the percentage change in profits due to change in sales
volume is greater than the percentage change in sales volume. It shows the extent of the change in earnings
before interest and tax (EBIT) as a result of change in sales volume. The degree of operating leverage goes
on decreasing with every increase in sales volume above the break even point. It is calculated by the
following formula:
Operating Leverage =
Year
Sales
Purchases
Marginal
Ebit
Ratio
2011-12
2012-13
* 2013-14
11,49,51,81,823
13,02,78,85,431
7,97,60,30,224
10,76,05,26,624
12,33,69,91,638
7,16,96,57,535
contribution
75,34,37,007
16,41,22,682
80,63,72,689
40,77,37,519
40,87,97,148
37,70,53,118
1.84
0.40
2.13
[91]
Interpretation:
In the year 2011-12, the operating leverage is 1.84. In 2012-13 it decreased 1.44 points; it is
due to heavy decrease of the marginal contribution and increase of the EBIT. In the year 2013-14 it has
increased 1.73 points; it is due to the increase of the marginal contribution to (391%) and decrease of the
EBIT to (-8%).
Financial Leverage =
[92]
Year
Ebit
Inc/(dec)
Ebt
in ebit
Inc/(dec) in
Ratio
ebt
2011-12
40,77,37,519
9,76,46,104
4.17
2012-13
40,87,97,148
0%
18,00,66,984
84%
2.27
* 2013-14
37,70,53,118
8%
16,40,02,051
-9%
2.29
Interpretation:
In the year 2011-12 the financial leverage is high (4.17). It has decreased 1.90 points. In the
year 2012-13 the financial leverage had decreased 1.90 points; this is due to the increase of the EBT (84%).
In the year 2013-14 the financial leverage had increased 0.02 points, this is due to the increase of EBIT (8%)
when compared to the decrease of EBT(-9%).
[93]
CHAPTER 6
Summary
Suggestions
Conclusion
Bibliography
[94]
Summary
Ratio analysis is the technique to know the financial position of the company. Ratio analysis in
Vaibhav Empire Pvt. Ltd is very important as it indicates the liquidity, solvency and profitability position .
Liquidity ratios i.e., Quick ratio and Cash ratio are up to the conventional ratios. So, it could be
further improved by decreasing its Current liabilities and increasing its Current assets in par with its
requirements.
Although Debt Equity ratio is low, it is in a satisfactory position. Under unfavorable conditions
lower Debt/Equity is desirable. The increase in the interest coverage ratio shows that the firm has
improved its ability to a greater extent in handling fixed charge liabilities. Also the Proprietary ratio is in
satisfactory state.
Inventory turnover ratio has improved in the current year, shows the operational efficiency of the firm
in managing the inventories. The increase in the Debtors turnover ratio and decrease in the Debtors
collection period shows the effective management of debtors/credit sales.
There is a Net Profit in the current year. All the profitability ratios basing on investment like return
on investment, net worth, capital and gross block which were negative in the previous years. But turned
positive and has yielded reasonable results in the current year.
The analysis for the purpose of the investing in shares generally concentrates on the return on equity,
which is increasing; therefore the shares may be purchased.
SUGGESTIONS
Some of the Suggestions drawn from the findings of the ratio analysis for the better
performance of Vaibhav Empire Pvt Ltd. are as follows.
[95]
The liquidity Position of the firm is increasing, which is evident from the findings. Even though the
As against the
conventional ratio 2:1. It is still only 1.59:1. The same way the quick ratio needs to be improved
further.
Though the company has recorded very good improvement in managing the inventories and
Debtors. The firm was not able to generate the reasonable turnover over the fixed assets. So, this calls
for further improvement in the ratio, by generating more sales.
The company has recorded profits in the current year for the last 5 years. It is due to the fact that
vast improvement in Gross profit ratio. The company may put some more special efforts to further
consolidate its position by concentrating on more market share.
Another reason for the company to have the less Net Profit is, due to the increase in its expenditure
and operating expenses. The company may consider by that efficiency can be improved further by
reducing the operating expenses.
The other main area where Vaibhav empire pvt. ltd. has tremendous scope for improvement is in
manufacturing of value added products and concentrating on the Exports. This will result in better sales
realization and higher profit.
Conclusion:
It is conclude that the VAIBHAV EMPIRE PVT LTD is in the promising growth so company need to
utilize all available funds for efficient operations it leads to standard company in good position.
The company is managing the funds in optimum manner for earning profits to the firm.
[96]
Finally it is concluding that company has bright future in near year so it needs to stick on its
operations in optimum manner
BIBLOGRAPHY
Books:
Financial management
I.M .Pandey
Financial management
M.Y.Khan
Websites:
www.domain-b.com
www.google.com
www.answer.com
www.managementparadise.com
Journals:
Annual report of VAIBHAV EMPIRE PVT LTD.
Financial statements.
[97]