1.

1 Introduction Of Industry
Knowing the customer satisfaction is always the top prerogative in any business. Getting to
know the level of satisfaction and (or) the changing expectations of customers is a
continuous process. Though there are various methods and tools available for this, mystery
shopping is considered as unique and undeniable tool in any organisation. As defined by
Wilson (2001), mystery shopping is a form of participant observation that uses researchers
to deceive customer-service personnel into believing that they are serving real customers or
potential customers. Mystery shopping is a technique that involves looking at your
business from outside and measure the efficiency of your own key processes from the view
point of customers. Mystery Shopping can be carried out in person, by telephone, or less
commonly by email. It can recognize strengths and weaknesses and aid to show exactly
where service delivery can be improved. In instances where excellent service is provided,
the service may be considered an example of best practice and specific staff members can be
singled out for recognition and reward. Initially set up in retail and private sector service
industries, now mystery shopping is used increasingly in the private as well as public sector
to gain a better understanding of how service users are taken care of when they approach
front line offices. Research is the foundation stone of effective marketing planning and is
vital for implementing successful marketing strategies. Mystery shopping is a research to
know about company in customer point of view. It is the use of individuals, skilled to
measure any customer service process, by acting as potential customers and in some way
reporting back on their experiences in a detailed and objective way. It is also an act of
purchasing goods and services for collecting information for market research.
Mystery shopping is more visible in developing countries and it is mostly prevailing in retail
sector. But other sectors also use it as a tool to measure their customer satisfaction,
competition, new technology advancements etc. some of the areas where mystery shopping
is seen commonly are Banks, Restaurants, Hotels, Supermarkets, Automobile shops, Repair
shops, Bars, Clubs, Theaters, Shopping malls, Retail chain operators. FMCG companies,
Consumer durable companies, Apparel retailers. Mystery shoppers are professional in this
field as he charges a reasonable amount from the companies for doing this service of
conducting research. A feedback is given by them to the client whether the services are
1

being performed according to expectations or not and gives a chance for the further
improvements that company thinks necessary for its survival. On the other hand they tries to
offer a better delivery to the customers to make them satisfied and a company can attract
more and more customers if it is efficient in the market.
Mystery shopping is necessary for companies to get an objective opinion on how their
business is doing. If they used their own employees to evaluate their service and operations,
it would be biased. So mystery shoppers, who don't already have a connection with the
company, are used to provide honest and unbiased feedback. In the UK mystery, shopping is
increasingly used to provide feedback on customer services provided by local authorities,
and other non-profit organizations such as housing associations and churches. Mystery
shopping is a term that describes a field based research technique of using independent
auditors posing as customers to gather information about product quality and service
delivery by a retail firm. The mystery shopper poses as a customer in order to objectively
gather information on the business being.
In the industry, the practice of helping organizations to improve their performance,
operating primarily through the analysis of existing organizational problems and the
development of plans for improvement. Organizations may draw upon the services of
management consultants for a number of reasons, including gaining external (and
presumably objective) advice and access to the consultants' specialized expertise.
As a result of their exposure to, and relationships with numerous organizations, consulting
firms are typically aware of industry "best practices", although the specific nature of
situations under consideration may limit the transferability of such practices from one
organization

to

another.

management assistance,

Consultancies

may

development

also

provide

organizational change

of coaching skills, process

analysis, technology implementation, strategy development, or operational improvement

services. Management consultants often bring their own proprietary methodologies or
frameworks to guide the identification of problems and to serve as the basis for
recommendations for more effective or efficient ways of performing work tasks.

Management consulting grew with the rise of management, as a unique field of study. The
first management consulting firm was Arthur D. Little Inc., founded in 1886 as a
partnership, and later incorporated in 1909.
The industry experienced significant growth in the 1980s and 1990s, gaining considerable
importance in relation to national gross domestic product. In 1980 there were only five
consulting firms with more than 1,000 consultants worldwide, whereas by the 1990s there
were more than thirty firms of this size.
An earlier wave of growth in the early 1980s was driven by demand for strategy and
organization consultancies. The wave of growth in the 1990s was driven by both strategy
and information technology advice. In the second half of the 1980s the big accounting firms
entered the IT consulting segment. The then Big Eight, now Big Four, accounting firms
(PricewaterhouseCoopers; KPMG; Ernst & Young; Deloitte Touche Tohmatsu) had always
offered advice in addition to their traditional services, but from the late 1980s onwards these
activities became increasingly important in relation to the maturing market of accounting
and auditing. By the mid-1990s these firms had outgrown those service providers focusing
on corporate strategy and organization. While three of the Big Four legally divided the
different service lines after the Enron scandals and the ensuing breakdown of Arthur
Andersen, they are now back in the consulting business.
At an estimated $14 billion in size, and with a compound annual growth rate projected at
8.8% through 2009, the IT Strategy and Planning (ITSP) consulting market is healthier than
it's been since the crazy days of the dotcom boom. Consulting research firm Kennedy
Information, publishers of Consultants News, says that there are three key reasons for the
growth: The technology marketplace is maturing, with identifiable key players; competition
is forcing companies to make better use of technology to be more efficient; and complex IT
systems require companies to seek outside help.

1.2 ABOUT THE COMPANY:

Since 1995, Total Solution Group has delivered actionable intelligence to our clients,
helping to drive exceptional bottom-line performance. Hundreds of thousands of
shoppers have registered at our website and been trained over the years. When coupled
with our continual investment in the latest internet and communication technologies, you
can rest assured that working with Total Solution Group is a satisfying and rewarding
experience.
Business Owners and Managers
Use Total Solution Group to help inspect your daily store interactions, monitor frontline
employee phone effectiveness, and check your competitors pricing and sales strategies.
Over the years, Total Solution Group has amassed a large shopper pool so we can verify
your product is displayed, priced and stocked correctly. We have the capability to support
your product launch, merchandising needs, or build an ongoing mystery shopping
program. View our Services to find out more about how Total Solution Group can help
your business grow.
Mystery Shopping, also referred to as Secret Shopping, gives you objective insight into
exactly how your business is presenting itself to your customers.
We are the largest mystery shopping company in the India, with 500 mystery
shoppers in India. We can be every place you cant. We make anonymous visits or calls to
your locations and answer custom questionnaires to give you a comprehensive, unbiased
view of your operations from the point of view of your customer.
From branding and operational compliance to customer service, appearance and wait
time, you can measure and optimize your operations, improve customer satisfaction and
maximize sales.

Utilize

A Mystery Shopper Force of over 2500 individuals throughout India .

Years of success and experience in the mystery shopping industry since 1995.

Highest quality standards for shopper recruiting, data collection and reporting.

Expertise in designing and implementing large, complex and custom evaluation

programs.

Applications including purchase/return scenarios, telephone mystery shopping and

call center monitoring.

Measure

On-site branding and operational compliance.

Staff appearance, friendliness and engagement.

Sales force effectiveness.

Wait and service time.

Overall quality of product or service.

Cleanliness and general appearance of locationboth interior and exterior.

Product/service selection and availability.

Cleanliness, functionality and stock condition of restrooms.

Up-selling of additional products and services.

Customer thank you and invitation to return.

Overall on-site customer experience.

Just about anything that is important in your many locations.

Achieve

Improved operational performance to maximize the customer experience, sales and

profitability.

Better brand compliance and performance, differentiating your brand promise to

customers.

Identified areas where new procedures and/or additional training can improve your
bottom line.

An understanding in real time of top and bottom performing stores.

Desired employee behaviors reinforced by rewarding store managers and personnel

who deliver an outstanding guest experience.

Correlated sales results to specific operational areas in your stores with Advanced
Analytics.

New Initiative Of Total Solution Group

TOTAL RESOURCE ACADEMY OF INDIA
TRAIN is the strategic arm of the group which was co-founded by few of our loyal clients
who needed professional, sustainable and scalable expertise in the areas of training and
development, creation of standard operating procedures, train the trainer programs,
psychometric tests & implementation of objectives through focused interventions et all.

One of the revolutionary products that has changed the face of trainings and its
efficiency has been our 'E Learning Management System' and its certification program
'Center of Excellence'.
These programs have demonstrated tangible results in a very short span of time and has
given the Industry an opportunity in uplifting its standards.
TRAIN ensures that its interventions bring measureable and monitorable gains which
bring tremendous value towards customer satisfaction, speed and service.
1. Theatrical Based Training Program
2. SOP Based Training
3. Soft Skills Training
4. E-Learning Management System
5. Rate My Service' Program

SUB COMPANIES OF TOTAL SOLUTIONS GROUP

TOTAL SOLUTIONS INCORPORATED :
Total Solutions Incorporated (TSI) is a leading ISO 9001:2000 certified strategy consulting
organization having over a decade long experience & presence across all major cities in India.
To create a philosophy and experience that provides clients with an enriched platform of
growth, expansion and profit- is why we exist.
Our core existence rest on the work philosophy
7

"Your Growth Is Our Aim"

Having various national & international alliances TSI has cemented its position as a leader in the
fields of:
1. Market Research & Intelligence
2. Audits (Mystery, Internal, Operations)
3. Fixed Asset Management Systems (Bar-coded, RFID, GPS
Solutions)
4. Business Re-engineering Programs
5. Software Solutions
TSI has a dedicated team of specialists and experts that has been instrumental in building
and contributing to the business growth of our clients and we look forward to providing
many more solutions in a lot more areas in the near future.
Hoping to be partners as your total solutions provider!
TOTAL RETAIL SOLUTIONS INDIA PVT. LTD. :
Our latest venture is dedicated to the retail segment which has been growing exponentially
and has become the new star of the Indian success story.
We proudly introduce TRSPL- launched in early 2010 & already boasts of several
success stories wherein it contributed towards introducing various brands from across the
globe and India into newer retail avenues and has established itself as a total retail
solutions provider.
TRSPL look forward to adding to your success as well through our proprietary solutions as
under:
1. Retail Expansion Strategies

2. Franchise Development Program

3. Brand Building Activities
4. SOP Creation & Implementation
5. Customer Centricity Programs (Focus Groups, Voice of the Customer
Programs, CRM)
6. Mystery Shopping Program
With our experience we have also ventured into active retailing and will start launching our
own multi-brand large formats across the country which will make retail democratic and
viable for all the stakeholders in the near future. We hope and envision TRSPL to become
a very strong extended arm of TSI and look forward to a brighter tomorrow.

TOTAL RESOURCE ACADEMY OF INDIA

TRAIN is the strategic arm of the group which was co-founded by few of our loyal clients
who needed professional, sustainable and scalable expertise in the areas of training and
development, creation of standard operating procedures, train the trainer programs,
psychometric tests & implementation of objectives through focused interventions et all.

One of the revolutionary products that has changed the face of trainings and its
efficiency has been our 'E Learning Management System' and its certification program
'Center of Excellence'.
These programs have demonstrated tangible results in a very short span of time and has
given the Industry an opportunity in uplifting its standards.
9

TRAIN ensures that its interventions bring measureable and monitorable gains which
bring tremendous value towards customer satisfaction, speed and service.
1. Theatrical Based Training Program
2. SOP Based Training
3. Soft Skills Training
4. E-Learning Management System
THE EMPLOYMENT CELL OF INDIA
TECOI has been instrumental in identifying and acquiring talent right from the entry
level up to the CXO levels and has been instrumental in ensuring a healthy pipeline of
trained man-power for various Industries.
The evolution of TECOI has been a strategic move to fulfill the demands of any business
venture & to complete the life-cycle of services through the Total Solutions Group
companies.
TECOI boasts of a central repository of data of various job-seekers across the country
and its collaboration with TRAIN ensures that not only the demand of a position gets
fulfilled but more importantly the skill-sets required for the job function are truly
addressed.
It also channelizes fresh talent through a unique initiative with the TRAIN foundation
under the Igniting Minds & Ideas EEE Certification Program.
We hope that through this unique amalgamation of talent and training we would be able
to address the human resource demands of the Industry.

Resource Management Program

10

Voice of the Employee

Succession Management

HR Manual & Restructuring Employee Verification

Campus Placement & Internship Programs

THE LEASING COMPANY (TLC) & FEDERATION OF RETAIL & RETAIL ESTATE
MEMBERS (FORREM)
Another very important area wherein we have contributed is to ensure that the right
brands reach the right place at the right price.
TLC & FORREM boasts of one of the largest networks of brands and locations across
India and has been able to manage the demands of the growth of the Industry with great
success.
The two companies work in tandem with leading national & international brands and
have tie-ups with various real estate players, individual owners of properties on high
streets and hence ensure a scientific match-making process that not only involves market
research but also ensures that transparent & fair deals are executed within a reasonable
span of time.
The eco-system formed ensures a symbiotic profitable, scalable and sustainable business
environment leading to mutually beneficial long-term association for all.
Location Identification Program
Due Diligence & Feasibility Studies

11

 Brand Tie-Ups
Zoning & Mall Management Solutions
Marketing & Promotional Strategies
The Leasing Company
INVEST IN INDIA III
Invest In India III is a dedicated platform wherein it provides a one-stop-shop solution on
how to enter and to make investments into various Industries into the Indian markets. It
was launched in September 2010 in Los Angeles, USA.
III provides requisite information on sun-rise and already established sectors/industries
and also provides advice on regulatory matters, M & A opportunities, green field and
brown field projects.
IIIs panel of experts and advisors provide the much needed assistance in providing
customized solutions to your queries & problems.

III also has the support of some large investors, PE funds, Venture Capitalists, Angel
Investors, Family Funds, Funds of Funds et all who will be interested in providing
funding to businesses in
India.

Real Estate Advisory

12

 NRI Solutions

Joint Ventures, Mergers, Acquisitions & Collaborations

2.1 Literature Review

Financial ratio analysis is a process of determining

and interpreting relationships

between the items to financial statements to provide a meaningful understanding of the

performance and financial position of an enterprise. Ratio analysis is an accounting tool
to present accounting variables in a simple, concise, intelligible and understandable form.
Ratio analysis is a study of relationship among various financial factors in a business.
Thus, it seeks to measure the value of the entity and purpose which it pursues, financial
analysis develops the steps of collecting, shaping and treatment of range of management
information which may clarify the wanted diagnosis and prognosis.
Many researchers have studied financial ratios as a part of working capital management;
however , very few of them have discussed the working capital policies in specific. Some
earlier work by Gupta & Heffner (1972) examined the differences in financial ratios
averages between industries. The conclusion of both the studies was that differences do
exist in mean profitability, activity, leverages and liquidity ratios amongst industry
13

groups. Pinches et al. (1973) used factor analysis to develop seven classifications of
ratios, and found that classifications were stable over the 1951-1969 time periods.
Chu et al. (1991) analyzed the hospital sectors to observe the differences of financial
ratios groups between hospital sectors and industrial firms sectors. Their study concluded
that financial ratios groups were significantly different from those of industrial firms
ratios as well these ratios were relatively stable over the five years period. A significance
relationships for about half of industries studied indicated that results might vary from
industry to industry.
Sathamoorthi (2002) focused on good corporate governance and in turn effective
management of business assets. He observed that more emphasis is given to investment
in fixed investments in fixed assets both in management area & research. However,
effective management working capital has been receiving little attention and yielding
more significant results. He analysed selected co-operatives in Botswana for a period of
1993-1997 and concluded that an aggressive approach has been followed by these firms
during all four years of study.
Doron Nissim & Stephen H Penman (1999): In his research article on financial
performance he has pointed that this paper outlines a financial statement analysis for use
in equity valuation. Standard profitability analysis is incorporated, and extended, and is
complemented with an analysis of growth. The perspective is one of the forecasting
payoff to equities. So financial statement analysis is presented first as a matter of
Performa analysis of the future, with forecasted ratios viewed as building blocks of
forecasts of payoffs.
Filbeck and Krueger (2005) highlighted the importance of efficient working capital
management by analyzing the working capital management policies of 32 non-financial
industries in USA. According to their findings significant differences exist between industries
in working capital practices over time. Moreover, these working capital practices,
themselves, change significantly within industries over time. Similar studies are conducted
by Gombola and Ketz (1983), Soenen (1993), Maxwell et al. (1998), and Long et al. (1993).

14

John J. Wild, K.R. Subramanyam & Robert F. Halsey (2006): In his research article
on financial 54 performance he has pointed that he have said that the financial statement
analysis is the application of analytical tools and techniques to general purpose financial
statements and related data to derive estimates and inferences useful in business
analytics. Financial Statements analysis reduces reliance on hunches, guesses and
intuition for business decisions. It decreases the uncertainty of business analysis.
I.M. Pandey (2007): In his research article on financial performance he has pointed that
the financial statements contain information about the financial consequences and sources
and uses of financial resources, one should be able to say whether the financial condition
of a firm is good or bad; whether it is improving or deteriorating. One can relate the
financial variables given in financial statements in a meaningful way which will suggest
the actions which one may have to initiate to improve the firms financial condition.
Rachchh Minaxi A (2011): In his research article on financial performance he has
pointed and suggested that the financial statement analysis involves analyzing the
financial statements to extract information that can facilitates decision making. It is the
process of evaluating the relationship between components parts of the financial
statements to obtain a better understanding of an entitys positions and performance.
Priyaaks (Mar 2012): In his research article on financial performance he has pointed
that Financial statement analysis is the process of examining relationships among
financial statement elements and making comparisons with relevant information. It is a
tool in decision making processes related to stocks, bonds and other financial
instruments.
From the above literature review, it is evident that, the financial performance depicts the
efficiency of organization. Along with that financial statements are very useful for
decision making in the company by Board Of Directors and management. It is also helps
to know the prosperity of the company with the profitability.

15

2.2 ABOUT THE TOPIC

FINANCIAL STATEMENT ANALYSIS
The process of reviewing and evaluating a companys financial statements(Such as
balance sheet and trading and profit and loss statement), thereby gaining an
understanding of the financial health of the company and enabling more effective
decision making. Financial statement record financial data ; however, this information
must be evaluated through financial statement analysis to become more useful to
investors, shareholders, managers and other interested parties.
Financial statement are very useful as they serve varied affected group having an
economic interest in the activities in the business entity. The purpose served by financial
statement are as follows:

16

 The basic purpose of financial statement is communicated to their interested

users, quantitative and objective information are useful in making economic
decision.
Secondly, financial statements are intended to meet the specialized needs of
conscious creditors and investors.
Financial statements are prepared to provide reliable information about the
earning of business enterprise and it ability to operate of profit in future. The users
who are interested in this information are generally the investors, creditors,
suppliers and employees.
Financial statements are intended to provide the base for tax assessments.
Financial statement are prepare in a way a provide information that is useful in
predicting the future earning power of the enterprise.
Financial statements are prepared to provide reliable information about the
changes in economic resources.
Financial statements are prepared to provide information about the changes in net
resources of the organization that result from profit directed activities.
Thus, financial statement satisfy the information requirements of a wide cross-section of
the society representing corporate managers, executives, bankers, creditors, shareholders,
investors, laborers, consumers and government institution.
Methods Of Financial Analysis:
Financial Analysis is an art and as such there are various approaches towards financial
analysis. Two basic approaches are:
HORIZONTAL ANALYSIS:
In such type of analysis,financial statement for a number of years are reviewed and
analysed. Figures for two or more years are contained in such type of analysis and these
figures are placed side by side to facilitate comparison. Such analysis indicates the
increase or decrease in these items not only in absolute figures but also in percentage
form. Thus, it involves making comparisons establishing relationship among related
items of an enterprise for a number of years. When a data about sales, cost of production,
profits etc. are compared for two or more years of a firm, they indicate the areas of
17

strength and weakness of the enterprise. It also helps in knowing the trend of business.
Since such type of analysis is based on the data from year-to-year rather than only one
year, it is also called DYNAMIC ANALYSIS.
VERTICAL ANALYSIS:
In such type of analysis, financial statement for a single year or on a particular date are
reviewed and analyzed with the help of proper device like ratios. It involves a study of
quantitative relationship among various itemsof balance sheet or Profit & Loss Account
of a single period. The items in the financial statements are expressed as a percentage of
total and the total is taken as equivalent to 100. Statements containing such analysis are
termed as COMMON SIZE STATEMENT.
Vertical analysis is not very useful for a proper analysis of the companys financial
position because it depends on the data of a single period whereas the business is
dynamic process. In comparison to vertical analysis, horizontal analysis is more useful
because it brings out more clearly the nature and trends of current changes affecting the
enterprise. Horizontal presentation emphasizes the fact that statement for a series of
periods is far more significant than those for single period and that the accounts for one
period are but an installment of what is essentially a continuous history.

Advantages:
It simplifies the financial statements.
It helps in comparing of different size with each other.
It helps in trend analysis which involves comparing a single company over a
period.
It highlights important information in simple form quickly. A user can judge a
company by just looking at few numbers instead of reading the whole financial
statements.

18

PURPOSE:
The objective of financial statements is to provide information about the financial
position, performance and changes in financial positions of an enterprise that is useful to
a wide a range of users in making economic decisions. Financial statements provide
useful information to a wide range of users:
S. No.

Users

Purpose
To manage the affairs of the company by assessing its

Managers

financial and performance positions and taking important

1.
2.

3.
4.

business decisions.
To assess the risk & return of their investment in the
Shareholders

ProspectiveInvestors

company and take investment decision based on the

analysis.
To assess the viability of investing in the company.
Investors may predict the future dividend based on the

Financial-

profits disclosed in financial statements.

To decide whether to grant a loan or credit to a business.

Institutions

Financial Institutions assess the financial health of a

19

business to determine the probability of bad loan.

To assess the credit worthiness of a business and ascertain
5.

6.
7.

Suppliers

Customers

Employees

whether to supply goods on credit. Suppliers need to know

if they will be paid.
To assess whether the supplier has the resources to ensures
a steady supply of goods in future.
For assessing the companys profitability and its
consequences on their future remunerations and job
security.
To compare the their performance with rivals companies

8.

9.

10.

Competitors
General

to learn and develop strategies to improve their

competitiveness.
It is interested to know the effects of the company on the

Public

economy, environment and the local community.

Government also keeps track of economic progress

Government

through analysis of financial statement of businesses from

different sectors of the economy.

Tools For Financial Analysis:

Financial statements contain absolute figures of assets, liabilities, revenues, expenses and
profit and loss of an enterprise. They do not reveal the earning capacity, liquidity and
financial soundness of the enterprise. They are not readily understandable to their users.
Hence they are analyzed to present them in simple and understandable form. Various
tools or devices employed for analyzing statements are as follows:

Comparative Statements: When Financial Statements figures for two or more years
are placed side by side to facilitate comparison, these are called, Comparative Financial
Statements. In such a statement figures of production, sales, expenses, profits, etc. put
side by side to draw conclusions about the profitability and financial health of the
business. It also indicates the trnd of change as well as the strong points and weak points
of the enterprise.

20

Common Size Statement: In these statements, various figures are converted into
percentages to some common base. In profit and loss account, sales figure is taken as 100
and all other figures are expressed as percentage of sale. Similarly, in Balance Sheet total
assets are taken as 100 and all assets are expressed as percentage of the total.
Trend Analysis: It is one of the most useful form of horizontal analysis in making
comparative study of the financial statement for a number of years. For calculating trend
percentages any year is selected as the base year. Each item of the base year is assumed
to be equal to 100 and on that basis the percentage of each item of each year is calculated.
The trend percentage is helpful in revealing the trend increase or decrease in various
items.
Accounting Ratios: A ratio is simply one number expressed in relation to another and a
study of the relationship between various items or group of items is known as Ratio
Analysis. It simplifies and summarizes a long array of accounting data to provide useful
information regarding the liquidity, solvency, profitability etc. .

Cash Flow Statement:

It shows the inflows and outflows of cash and cash equivalents during a particular period
and analyzes the reasons for changes in balance of cash between the two balance sheet
dates. A firm may earn huge profits yet it may have paucity of cash or when it suffered a
loss it may still have plenty of cash. The reason for these deviations can be analyzed and
understood by preparing cash flows statements.

Fund Flow Statement:

A fund flow statement is designed to show the changes in the assets, liabilities and capital
of the firm between the dates of two balance sheets. It indicates the causes of changes in
the working capital of an enterprise during the year. It also discloses the sources from

21

which funds are obtained by the enterprise and the specific uses to which funds were
applied.

Break Even Point Analysis:

Break-even point is the point where total costs are exactly equal to the total sales. At this
point, there is neither any profit nor any loss.

Ratio Analysis
According to Diamond (2006), Ratio analysis is a method of expressing relations among
various items in a companys financial statement. However, ratios are not substitutes for
looking dipper into the financial position of the company.
The main technique used for financial analysis of Minda corporation limited is ratio
analysis therefore we will see ratio analysis in detail.

Financial ratio
Financial ratios are very powerful tools to perform some quick analysis of financial
statements. Accounting Ratios are used to describe significant relationships which exist
between figures shown in balance sheet, in a profit and loss account, in a budgetary
control system or in any part of the accounting organization.
Ratio analysis is a study of relationship among various financial factors in a business. It is
a technique of analyzing the financial statements so as to check financial health of the
organization for its various:
stakeholders
investors
22

 customers
financial institutions
Departments of government like statistical department, revenue department;
So as to fulfill its goal such as wealth maximization, banking transactions, credit
worthiness, for job, etc.
We analyzed financial statement of Minda Corporation Limited to draft various
inferences for its various stakeholders including, but not limited to, shareholders,
investors, customers, vendors, financial institutions, employees and last but not the least
government.

Classifications of Ratios
RATIOS

Liquidity Ratio

Solvency Ratio

Activity Ratio

Profitability Ratio

LIQUIDITY RATIO
Liquidity ratio, expresses a company's ability to repay short-term creditors out of its total
cash. The liquidity ratio is the result of dividing the total cash by short-term borrowings.
It shows the number of times short-term liabilities are covered by cash. If the value is
greater than 1.00, it means fully covered.
They comprise of the following two ratios:
a) Current ratio
b) Liquid ratio

SOLVENCY RATIO

23

The solvency ratio indicates whether a companys cash flow is sufficient to meet its
short-term and long-term liabilities. The lower a company's solvency ratio, the greater the
probability that it will default on its debt obligations.
The most common solvency ratios include:
a) Debt Equity ratio
b) Total assets to debt ratio
c) Proprietary ratio

ACTIVITY RATIO
Activity ratios are used to measure the relative efficiency of a firm based on its use of its
assets, leverage or other such balance sheet items. These ratios are important in
determining whether a company's management is doing a good enough job of generating
revenues, cash, etc. from its resources.
Activity ratios can be classified as follows:
(a)
(b)
(c)
(d)

Debtors turnover ratio

Creditors turnover ratio
Working capital turnover ratio
Fixed assets turnover ratio

PROFITABILITY RATIO
Profitability ratios measure a companys ability to generate earnings relative to sales,
assets and equity. These ratios assess the ability of a company to generate earnings,
profits and cash flows relative to relative to some metric, often the amount of money
invested. They highlight how effectively the profitability of a company is being managed.
Important profitability ratios are:

24

a)
b)
c)
d)

Net Profit ratio

Return on investment or return on capital employed
Earnings per share
Dividend per share

3.1 PURPOSE OF STUDY

The purpose of study is to evaluate the financial performance of the company, to
understand the liquidity, profitability and efficiency of the company and to evaluate and
analyze various fact of the financial statement of the company.

3.2 RESEARCH OBJECTIVES

The primary objective of the study is to find out the financial performance of the
company. There have been various secondary objectives of the study, which are as
follows:
To Study the financial statement of the company i.e. Balance Sheet & income
statement.
To understanding and assessment of financial ratios based on the statement of the
company.
To recognize the position of the company through these ratio and data available.
To see the applicability and usability of theory, which has been taught during the
first year of the course.

3.3 RESEARCH METHODOLOGY

A broad definition of research is given by Martyn Shuttleworth-In the broadest sense of
the word, thee definition of research includes any gathering of data, information and facts
for the advancement of knowledge.
25

Research is a systematic inquiry to describe, explain, predict and control the observed
phenomenon. Research involves inductive and deductive methods. Inductive methods
analyse the observed phenomenon and identify the general principles, structures, or
processes underlying the phenomenon observed; deductive methods verify the
hypothesized principles through observations. The purposes are different: one is to
develop explanation, and the other is to test the validity of the explanations.

TYPES OF RESEARCH:
A research design is the specification of method and procedure for accruing the
information needed. It is overall operational pattern of frame work of project that
stipulates what information is to be collected for sources by that procedures.

Descriptive Research design is appropriate for this study.

Descriptive study is used to study the situation. The major purpose of descriptive research
is the description of the state of affairs as it exists at present. This study helps to describe
the situation. A detail descriptive about present and past situation can be found out by the
descriptive study.
The methods of research utilized in descriptive research are survey methods of all kinds,
including comparative and correlation methods. This involves the analysis of the situation
using the secondary data.
Sources Of Data:
Generally we can collect data from two sources, primary sources and secondary sources.
Data collected from primary sources are known as Primary data and data collected from
secondary sources are secondary data.
Following are the secondary sources of data that are studied and analysed for this project:

26

Annual Report Of The Company

Financial Balance Sheet
Income Statement
Financial reports
Different reports prepared by Finance Department

Limitation Of The Study:

The study provides an insight into the financial aspects of organization. Every study will
be bound with certain limitation. The below mentioned are the constraints under which
the study is carried out.
One of the factors of the study was lack of availability of ample information.
Most of the information has been kept confidential and as such as not assed as art

of policy of company.
Time is an important limitation. The whole study was conducted in a period of 7

to 8 weeks, which is not sufficient to carry out proper interpretation and analysis.
The changes made in the schedule IV have posed as a major problem which have
a caused a difficulty in the valuation of items in the balance sheet and other

reports.
Different companies operate in different industries each having different
environmental conditions such as regulation, market structure etc. Such factors
are so significant that a comparison of two companies from different industries

might be misleading.
Financial accounting information is affected by estimates and assumptions.
Accounting standards allow different accounting policies, which impairs

comparability and hence ration analysis is less useful in such situations.

Ratio analysis explains relationships between past information while users are

more concerned about current and future information.

Some firms resort to window dressing their financial statement to cover up bad

financial position on the eve of accounting date.

Financial statement record only those events and transactions which can be
expressed in terms of money. Qualitative aspects of business units are omitted,
27

thus change in management, reputations of the business, customer satisfaction etc.

are ignored which have a vital bearing on the profitability of company.

LIQUIDITY RATIO
CURRENT RATIO
Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio also known as Working capital ratio is a measure of general liquidity
and is most widely used to make the analysis of a short-term financial position (or)
liquidity of a firm. It measures the liquidity position of the firm with its future events.
Main purpose of this ratio is to know the has power to meet its current liabilities.

Current Ratio =

Current Assets/Current Liabilities

Components of Current Ratio

CURRENT ASSETS

CURRENT LIABILITIES

Cash in hand

Outstanding or accrued expenses

Cash at bank

Bank over draft

Bills receivable

Bills payable

Marketable securities

Short-term advances

Short-term investments

Sundry creditors

Sundry debtors

Dividend payable

Prepaid expenses

Income-tax payable
28

TABLE NO. C-1

Current Ratio
(Amount in Rs.)

(Amount in Rs.)

Year

Current Assets

Current Liabilities

Ratio

2012-13

9,132,820

4,711,719

1.94:1

2013-14

11,564,206

3,026,666

3.82:1

Table No. 4.1

CURRENT RATIO
4
RATIO

2
0

3.82

1.94

2012-13

2013-14
YEAR

Graph No. 4.1

Interpretation
As a rule, the current ratio with 2:1 (or) more is considered as satisfactory position of the
firm. When compared with 2012-13, there is an increase in the provision for tax, because
the debtors are raised and for that the provision is created.
The sundry debtors have increased due to the increase to corporate taxes.
In the year 2013-14, the loans and advances include majorly the advances to employees
and deposits to government. The loans and advances reduced because the employees set
off their claims. The other current assets include the interest attained from the deposits.
29

The huge increase in sundry debtors resulted an increase in the ratio, which is above the
benchmark level of 2:1 which shows the comfortable position of the firm.

QUICK RATIO:
Quick ratio is a test of liquidity than the current ratio. The term liquidity refers to the
ability of a firm to pay its short-term obligations as & when they become due. Quick ratio
may be defined as the relationship between quick or liquid assets and current liabilities.
An asset is said to be liquid if it is converted into cash within a short period without loss
of value.

Quick Ratio = Liquid Assets/ Current Liabilities

Components of Quick or Liquid ratio

QUICK ASSETS

CURRENT LIABILITIES

Cash in hand

Outstanding or accrued expenses

Cash at bank

Bank over draft

Bills receivable

Bills payable

Sundry debtors

Short-term advances

Marketable securities

Sundry creditors

Temporary investments

Dividend payable
Income tax payable
TABLE NO. C-2

Quick Ratio
30

(Amount in Rs.)

(Amount in Rs.)

Year

Quick Assets

Current Liabilities

Ratio

2012-13

8,943,359

4,711,719

1.9

2013-14

11,543,186

3,026,666

3.81

Table No. 4.2

QUICK RATIO
4
RATIO

3
2

3.81
1.9

1
0

2012-13

2013-14
YEAR

Graph No. 4.2

Interpretation
Quick assets are those assets which can be converted into cash within a short period of
time, say to six months. So, here the sundry debtors which are with the long period does
not include in the quick assets. Compare with 2012-13, the Quick ratio is increased
because the sundry debtors are increased due to the increase in the corporate tax and for
that the provision created is also increased. So, the ratio is also increased with the 201213.

ABSOLUTE LIQUIDITY RATIO

31

Although receivable, debtors and bills receivable are generally more liquid than
inventories, yet there may be doubts regarding their realization into cash immediately or
in time. Hence, absolute liquid ratio should also be calculated together with current ratio
and quick ratio so as to exclude even receivables from the current assets and find out the
absolute liquid assets.

Absolute liquid ratio= Absolute liquid assets/ Current liabilities

Absolute liquid assets include cash in hand etc. The acceptable forms for this ratio is 50%
(or) 0.5:1 (or) 1:2 i.e., Rs.1 worth absolute liquid assets are considered to pay Rs.2 worth
current liabilities in time as all the creditors are nor accepted to demand cash at the same
time and then cash may also be realized from debtors and inventories.

Components of Absolute Liquid Ratio

ABSOLUTE LIQUID ASSETS

CURRENT LIABILITIES

Cash in hand

Outstanding or accrued expenses

32

Cash at bank

Bank over draft

Interest on Fixed Deposit

Bills payable
Short-term advances
Sundry creditors
Dividend payable
Income tax payable
TABLE NO. C-3

Absolute Cash Ratio

(Amount in Rs.)

(Amount in Rs.)

Year

Absolute Liquid Assets

Current Liabilities

Ratio

2012-13

5,385,085

4,711,719

1.14

2013-14

3,564,907

3,026,666

1.18

Table No.4.3

ABSOLUTE CASH RATIO

1.18
1.17
1.16
RATIO 1.15
1.14
1.13
1.12

1.18
1.14

2012-13

2013-14
YEAR

Graph No. 4.3

33

Interpretation
The current assets which are ready in the form of cash are considered as absolute liquid
assets. Here, the cash and bank balance are absolute liquid assets. In the year 2012-13,
the cash and bank balance is decreased due to decrease in the deposits and the current
liabilities. That causes a slight increase in the current years ratio.
LEVERAGE RATIOS
PROPRIETARY RATIO
A variant to the debt-equity ratio is the proprietary ratio which is also known as
equity ratio. This ratio establishes relationship between share holders funds to
total assets of the firm.

Proprietary ratio= Owners funds/ Total assets

Components Of Proprietary Ratio

Owners FUND

TOTAL ASSETS

Owners Capital

Fixed Assets

Reserves & Surplus

Current Assets
Cash in hand & at bank
Bills receivable
Inventories
Marketable securities
Short-term investments
Sundry debtors, Prepaid Expenses
34

TABLE NO. C-4

Proprietary Ratio
(Amount in Rs.)
Year

(Amount in Rs.)

Owners Funds

Total Assets

Ratio

2012-13

5,647,365

10,638,520

0.53

2013-14

9,706,001

12,980,510

0.75

Table No. 4.4

PROPRIETARY RATIO
0.8
0.6
RATIO

0.4

0.75

0.53

0.2
0
2012-13

2013-14
YEAR

Graph No. 4.4

Interpretation
The proprietary ratio establishes the relationship between owners funds to total assets. It
determines the long-term solvency of the firm. This ratio indicates the extent to which the
assets of the company can be lost without affecting the interest of the company. There is
no increase in the capital. The reserves and surplus is increased due to the increase in
balance in profit and loss account, which is caused by the increase of income from
services.

35

Total assets, includes fixed and current assets. The fixed assets are reduced because of the
depreciation and there are no major increments in the fixed assets. The current assets are
increased compared with the year 2012-13. Total assets are also increased than precious
year, which resulted an increase in the ratio than older.

ACTIVITY RATIOS
WORKING CAPITAL TURNOVER RATIO
Working capital of a concern is directly related to sales.

Working capital = Current assets - Current liabilities

It indicates the velocity of the utilization of net working capital. This indicates the no. of
times the working capital is turned over in the course of a year. A higher ratio indicates
efficient utilization of working capital and a lower ratio indicates inefficient utilization.

Working capital turnover ratio=cost of goods sold/working capital.

Components of Working Capital

CURRENT ASSETS

CURRENT LIABILITIES

Cash in hand

Outstanding or accrued expenses

36

Cash at bank

Bank over draft

Bills receivable

Bills payable

Marketable securities

Short-term advances

Short-term investments

Sundry creditors

Sundry debtors

Dividend payable

Prepaid expenses

Income-tax payable
TABLE NO. C-5

Working Capital Turnover Ratio

(Amount in Rs.)

(Amount in Rs.)

Year

Income From Services

Working Capital

Ratio

2012-13

5,555,064

4,421,100

1.26

2013-14

9,665,490

8,537,540

1.13

Table No. 4.5

WORKING CAPITAL TURNOVER RATIO

1.3
1.25
RATIO

1.2

1.26

1.15

1.13

1.1
1.05
2012-13

2013-14
YEAR

Graph No. 4.5

37

Interpretation
Income from services is greatly increased due to the extra invoice for Service Provided
and the working capital is also increased greater due to the increase in from services
because the huge increase in current assets.
The income from services is raised and the current assets are also raised together resulted
in the decrease of the ratio of 2013-14 compared with 2012-13.

FIXED ASSETS TURNOVER RATIO

It is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit
earning capacity of the firm. Higher the ratio, greater is the intensive utilization of fixed
assets. Lower ratio means under-utilization of fixed assets.

Fixed assets turnover ratio= Cost of Sales/ Net fixed assets

Cost of Sales = Income from Services
Net Fixed Assets = Fixed Assets - Depreciation

Fixed Assets Turnover Ratio

(Amount in Rs.)

(Amount in Rs.)

Year

Income From Services

Net Fixed Assets

Ratio

2012-13

5,555,064

1,505,699

3.69

2013-14

9,665,490

1,416,303

6.82

Table No. 4.6

38

FIXED ASSET TURNOVER RATIO

RATIO

7
6
5
4
3
2
1
0

6.82
3.69

2012-13

2013-14
YEAR

Graph No. 4.6

Interpretation
Fixed assets are used in the business for providing services. This ratio shows the firms
ability in generating sales from all financial resources committed to total assets. The ratio
indicates the account of one rupee investment in fixed assets.The income from services is
greaterly increased in the current year due to the increase in the service provided due to
the increase in extra invoice and the net fixed assets are reduced because of the increased
charge of depreciation. Finally, that effected a huge increase in the ratio compared with
the previous years ratio.

39

 CAPITAL TURNOVER RATIO

Sometimes the efficiency and effectiveness of the operations are judged by
comparing the cost of sales or sales with amount of capital invested in the
business and not with assets held in the business, though in both cases the same
result is expected. Capital invested in the business may be classified as long-term
and short-term capital or as fixed capital and working capital or Owned Capital
and Loaned Capital. All Capital Turnovers are calculated to study the uses of
various types of capital.

Capital turnover ratio= Cost of goods sold/ Capital employed

Cost of Goods Sold = Income from Services

Capital Employed = Capital + Reserves & Surplus

Capital Turnover Ratio

(Amount in Rs.)
Year

(Amount in Rs.)

Income From Services

Capital Employed

Ratio

2012-13

5,555,064

5,647,365

0.98

2013-14

9,665,490

9,706,001

1.00

Table No. 4.7

40

CAPITAL TURNOVER RATIO

1
RATIO

1.00

0.99
0.98

0.98

0.97
2012-13

2013-14
YEAR

Graph No. 4.7

Interpretation
This is another ratio to judge the efficiency and effectiveness of the company like
profitability ratio. The income from services is greater increased compared with the
previous year and the total capital employed includes capital and reserves & surplus. Due
to huge increase in the net profit the capital employed is also increased along with
income from services. Both are affected in the increment of the ratio of current year.

CURRENT ASSETS TO FIXED ASSETS RATIO

This ratio differs from industry to industry. The increase in the ratio means that trading is
slack or mechanization has been used. A decline in the ratio means that debtors and
stocks are increased too much or fixed assets are more intensively used. If current assets
increase with the corresponding increase in profit, it will show that the business is
expanding.

Current Assets to Fixed Assets Ratio=Current Assets/Fixed Assets

41

Component of Current Assets to Fixed Assets Ratio

CURRENT ASSETS

FIXED ASSETS

Cash in hand

Machinery

Cash at bank

Buildings

Bills receivable

Plant

Marketable securities

Vehicles

Short-term investments
TABLE NO. C-6
Current Assets To Fixed Assets Ratio
(Amount in Rs.)
Year

(Amount in Rs.)

Current Assets

Fixed Assets

Ratio

2012-13

9,132,820

1,505,699

6.07

2013-14

11,564,206

1,416,303

8.17

Table No. 4.8

CURRENT ASSET TO FIXED ASSET RATIO

10
RATIO

5
0
2012-13

2013-14
YEAR

Graph No. 4.8

Interpretation

42

Current assets are increased due to the increase in the sundry debtors and the net fixed
assets of the firm are decreased due to the charge of depreciation and there is no major
increment in the fixed assets. The increment in current assets and the decrease in fixed
assets resulted an increase in the ratio compared with the previous year.

PROFITABILITY RATIOS
GENERAL PROFITABILITY RATIOS
NET PROFIT RATIO
Net profit ratio establishes a relationship between net profit (after tax) and sales
and indicates the efficiency of the management in manufacturing, selling
administrative and other activities of the firm.

Net profit ratio=Net profit after tax/Net sales

Net Profit after Tax = Net Profit () Depreciation () Interest () Income Tax
Net Sales = Income from Services
It also indicates the firms capacity to face adverse economic conditions such as
price competitors, low demand etc. Obviously higher the ratio, the better is the
profitability.
Net Profit Ratio
(Amount in Rs.)
Year

Net Profit After Tax

(Amount in Rs.)
Income from Services

Ratio

2012-13

1,825,958

5,555,064

0.33

2013-14

4,058,635

9,665,490

0.42

Table No. 4.9

43

NET PROFIT RATIO

0.5
0.4
RATIO

0.3

0.42

0.33

0.2
0.1
0
2012-13

2013-14
YEAR

Graph No. 4.9

Interpretation
The net profit ratio is the overall measure of the firms ability to turn each rupee of
income from services in net profit. If the net margin is inadequate the firm will fail to
achieve return on shareholders funds. High net profit ratio will help the firm service in
the fall of income from services, rise in cost of production or declining demand. The net
profit is increased because the income from services is increased. The increment resulted
a slight increase in 2013-14 ratio compared with the year 2012-13.

OPERATING PROFIT
Operating ratio establishes the relationship between cost of goods sold and other
operating expenses on the one hand and the sales on the other.

Operating ratio= Operating cost/ Net sales

Operating profit = Net sales - Operating cost
Operating profit ratio= Operating profit/ Sales

44

However 75 to 85% may be considered to be a good ratio in case of a manufacturing under

taking. Operating profit ratio is calculated by dividing operating profit by sales.

Operating Profit
(Amount in Rs.)
Year

(Amount in Rs.)

Operating Profit

Income From Services

Ratio

2012-13

3,158,671

5,555,064

0.57

2013-14

6,719,267

9,665,490

0.70

Table No. 4.10

OPERATING PROFIT RATIO

0.8
0.6
RATIO

0.4

0.7

0.57

0.2
0
2012-13

2013-14
YEAR

Graph No. 4.10

Interpretation
The operating profit ratio is used to measure the relationship between net profits and
Consultancy of a firm. Depending on the concept, it will decide.
The operating profit ratio is increased compared with the last year. The earnings are
increased due to the increase in the income from services because of Services Provided.
So, the ratio is increased slightly compared with the previous year.
45

 RETURN ON TOTAL ASSETS RATIO:

Profitability can be measured in terms of relationship between net profit and assets. This
ratio is also known as profit-to-assets ratio. It measures the profitability of investments.
The overall profitability can be known.

Return on assets= Net profit/ Total assets

Net Profit = Earnings before Interest and Tax

Total Assets = Fixed Assets + Current Assets

Return on Total Assets Ratio

(Amount in Rs.)
Year

(Amount in Rs.)

Net Profit After Tax

Total Assets

Ratio

2012-13

1,825,958

10,638,520

0.17

2013-14

4,058,635

12,980,510

0.31

Table No. 4.11

RETURN TO TOTAL ASSETS RATIO

0.4
RATIO

0.3
0.2

0.31

0.17

0.1
0
2012-13

2013-14
YEAR

Graph No. 4.11

46

Interpretation
This is the ratio between net profit and total assets. The ratio indicates the return on total
assets in the form of profits. The net profit is increased in the current year because of the
increment in the income from services due to the increase in Service Provided. The fixed
assets are reduced due to the charge of depreciation and no major increments in fixed
assets but the current assets are increased because of sundry debtors and that affects an
increase in the ratio compared with the last year i.e. 2012-13.

RESERVES & SURPLUS TO CAPITAL RATIO:

It reveals the policy pursued by the company with regard to growth shares. A very high
ratio indicates a conservative dividend policy and increased ploughing back to profit.
Higher the ratio better will be the position.

Reserves & surplus to capital= Reserves& Surplus/Capital

Reserves & Surplus To Capital Ratio

(Amount in Rs.)
Year

(Amount in Rs.)

Reserves & Surplus

Capital

Ratio

2012-13

3,775,437

1,871,928

2.02

2013-14

7,834,073

1,871,928

4.19

Table No. 4.12

47

RESERVE & SURPLUS TO CAPITAL RATIO

5
4
RATIO

4.19

2.02

1
0
2012-13

2013-14
YEAR

Graph No. 4.12

Interpretation
The ratio is used to reveal the policy pursued by the company a very high ratio. Higher
the ratio better will be the position.
The reserves & Surplus is increased in the year 2013-14 as the Profit is increased due to
increase in Service Provided. But the capital is remaining constant.
So the increase in the reserves & surplus caused a greater increase in the current years
ratio compared with the older.

48

OVERALL PROFITABILITY RATIOS

RETURN ON INVESTMENT
Return on share holders investment, popularly known as Return on investments (or)
return on share holders or proprietors funds is the relationship between net profit
(after interest and tax) and the proprietors funds.

Return on shareholders investment = Net profit (after interest and tax)/Shareholders

funds

The ratio is generally calculated as percentages by multiplying the above with 100.
Return on Investment
(Amount in Rs.)
Year

(Amount in Rs.)

Net Profit After Tax

Owners Capital

Ratio

2012-13

1,825,958

5,647,365

0.32

2013-14

4,058,635

9,706,001

0.42

Table No. 4.13

Graph No. 4.13

49

Interpretation
This is the ratio between net profits and shareholders funds. The ratio is generally
calculated as percentage multiplying with 100.
The net profit is increased due to the increase in the income from services and the Capital
funds are increased because of reserve & surplus. So, the ratio is increased in the current
year.

50

5.1 FINDINGS OF THE STUDY

The current ratio has shown in a fluctuating trend as 1.94 and 3.82.In the year 201213 current ratio is 1.94 & it is optimum because it is quite near to the optimum level
but in the 2013-14 current ratio was 3.82 which indicates a continuous increase in
current assets and decrease in current liabilities.

The quick ratio is also in a fluctuating trend resulting as 1.9, and 3.81. The companys
present liquidity position is satisfactory.

The absolute liquid ratio has been increased from 1.14 to 1.18, from 201213 to
2013-14.

The proprietary ratio has shown a fluctuating trend. The proprietary ratio is increased
from 0.53 to 0.75 compared with the last year. So, the long term solvency of the firm
is increased.

The working capital ratio decreased from 1.26 to 1.13 in the year 2013-14.

The fixed assets turnover ratio is in increasing trend from the year 2012-13 to 201314 i.e. 3.69 to 6.89. It indicates that the company is efficiently utilizing the fixed
assets.

The capital turnover ratio is increased from 2012-13 to 2013-14 i.e. 0.98 to 1.00.

The current assets to fixed assets ratio is increasing gradually from 2012-13, 6.07 to
2013-14, 8.17. It shows that the current assets are increased than fixed assets.

The net profit ratio is also in increasing order as compared to previous year.

The net profit is increased greater in the current year. So the return on total assets
ratio is increased from 0.17 to 0.31.

The Reserves and Surplus to Capital ratio is increased to 4.19 from 2.02. The capital
is constant, but the reserves and surplus is increased in the current year.

The operating profit ratio is in fluctuating manner as 0.57 and 0.70 from 201213
respectively.
51

The return on investment is increased from 0.32 to 0.42 compared with the previous
year. Both the profit and shareholders funds increase cause an increase in the ratio.

52

RECOMMENDATIONS AND SUGGESTIONS

With reference to the findings of the study, the researcher recommends the following:

Organization is doing well in the respective field of mystery shopping and service

consultancy. All the financial ratios are increasing on yearly basis.

Organization has sufficient amount of current assets and current liabilities are
decreasing. Therefore Current ratio is increasing. I would like to suggest organization

should invest in the market securities that yields the income for organization in future.
Current Assets to fixed assets ratio shows that current assets plays a vital role in total
assets. I suggest the company to employ the current assets effectively for generating

the revenue.
As Profit of the organization is increasing trend, company should look up for growth

via expansion and diversification of business.

Financial ratios should be used with careful examination and proper understanding of
the meaning, implication and effect of the actual figures shown in financial

statements, in order to avoid making wrong judgments, conclusions and decision.

Financial ratios should be judiciously used by firms, investors, lenders, shareholders,
managers, and other stakeholders, in view of their numerous benefits and limitations.

CONCLUSION
53

The companys overall position is at a good position. Particularly the current years
position is well due to raise in the profit level from the last year position. It is better for
the organization to diversify the funds to different sectors in the present market scenario.
.
The main objective of all the investor is to earn the higher return on their investment so
they always try to invest in those securities and fund which give them higher return with
a less risk.

In this project, I tried to focus on the performance of various funds of the Total Solution
Group. From the various data available for helping in the project compilation we said that
the performance of the various funds of the Total Solution Group is better than previous
year i.e. 2012-13.
I also got useful insights regarding financial analysis of this organization and about their
proceedings and also its general background. It helped me gain useful information about
how the revenue management is actually practiced.
The majority of the companys profitability ratio show increasing trend. The various ratio
that have been analyzed, interpret that the company has a good financial position & the
overall credibility is also very good. The performance of the company can be considered
as satisfactory although there is a whole lot of scope for improvement.

54

BIBILOGRAPHY

BOOKS

R.P. Rustagi (2013): FINANCIAL MANAGEMENT Theory, Concepts & problems,

Taxmann Publication, New Delhi, Revised Edition

Khan M.Y. & Jain P.K. (1992): Financial Management, Tata McGraw Hill Publishing

Co. Ltd., New Delhi, Third Edition.

Grewal T.S. (2006): Double Entry Book Keeping, Laxmi Publication, New Delhi,
fifth Edition

JOURNAL

Dr. Promod Kumar; Analysis of financial statement of Indian Industries Saujaniya

publication Ltd. 1992.

Doron Nissim & Stephn H Penman (March 1999), Columbia university-Columbia

business school, Department of Accounting.

Jonas Elmerraji, Analyze Investment Quickly with ratios, 2005, Pg no-33-36.
Rachchh Minaxi A(2011), Introduction to Management Accounting.
John J. Wild, K.R. Subramanyam & Robert F. Halsey (2006): Impact Of Environment

of Financial Performance of Organisation Ohio University- School Of Management.

Priyaaks (Mar 2012): Analyze the relationship between Financial Statement.

WEBSITE
https://en.wikipedia.org/wiki/financial _analysis
http://www.investopedia.com/terms/f/financial-analysis.asp
www.totalsolutions.in/about/reports

55