Professional Documents
Culture Documents
1.1 INTRODUCTION L
T
In financial strength and profitability of any firm, we study
about the financial statement of the firm. The financial statements are the end
but the financial information presented in concise and capsule from, and the
financial information relating to the financial position of the firm. The financial
position of the firm. To analyze the operation and performance of the firm for
future planning.
considerations with different ratio which shows the strength of the firm.
be used to compare the risk and return relationship of films of different size. It
that the strength and weakness of a firm as well as its historical performance
regarded as the most signification and basic financial statement of any firm.
financial position at a given point of time. It presented the assets of the firm (i.e.
summarizes of the revenues and expense of the firm for an accounting of source
company shall given true and fair view of profit or loss of the company during
the financial year. The Income statement include revenues, Expenses and net
profit or loss.
enjoys. The Indian economy is on a new growth path with buoyancy in capital
GARDEN CITY COLLEGE Page 2
BI
markets, positive growth in GDP, strong forex reserves and remarkableL
T
growth in industrial sector. The future prospects of Industrial sector as a
whole looks promising as outlays on mega projects in Paper & power sectors
with lower costs & higher scope for increasing exports to neighboring countries.
Paper industry in India is the 15th largest paper industry in the world. It
to the government's kitty. The government regards the paper industry as one of
dependent upon forest-based raw materials. The first paper mill in India was set
up at Sreerampur, West Bengal, in the year 1812. It was based on grasses and
introduced in India in early 1905. Since then the raw material for the paper
wood and bamboo, other non-conventional raw materials have been developed
for use in the papermaking. The Indian pulp and paper industry at present is
very well developed and established. Now, the paper industry is categorized as
forest-based, agro-based and others (waste paper, secondary fibre, bast fibers
The pulp & paper industries in India have been categorized into large-scale
and small-scale. Those paper industries, which have capacity above 24,000
tonnes per annum are designated as large-scale paper industries. India is self-
confined only to certain specialty papers. To meet part of its raw material needs
the industry has to rely on imported wood pulp and waste paper.
Indian paper industry has been de-licensed under the Industries (Development
& Regulation) Act, 1951 with effect from 17th July, 1997. The interested
Memorandum (IEM) with the Secretariat for Industrial Assistance (SIA) for
Growth of paper industry in India has been constrained due to high cost of
power cost and concentration of mills in one particular area. Government has
supply of raw materials, duty on pulp and waste paper and wood logs/chips has
been reduced.
GARDEN CITY COLLEGE Page 4
BI
Following measures need to be taken to make Indian paper industryL
T
more competitive:
facilities.
It’s a tool which enable the lender or banker to arrive at the following factors :
➢ Liquidity Position.
➢ Profitability.
➢ Solvency.
➢ Financial Stability.
Safety and security of the loans and advances to be already been provided.
In this page you should complete the table below (you can do this
by printing it out). In the left hand column there is a list of interest group one by
one. Our job is complete the right hand column by giving two or three example
of ratio when you have filled gaps you will appreciate that it gives us some
ideas about the ratio that each of the users we have identified would be as
follows
Return on capital
investor employed
Gearing
Lender ratio
Profitability
Manager ratio
Owners of company and other Return on capital
institution employed
Supplier and other
trade creditor Liquidity
Customers Profitability
Government and other
agencies Profitability
Local This could be long and
community interesting list
INTRODUCTION
INTERPRETAION:
Group of ratio.
Historical ratio.
Project ratio.
Inter-firm comparison.
ROLE:
The ratio analysis is used by the manager for the decision making,
control.
Ratio analysis helps in appraising the firm in term of their profitability and
capital required in the business. Current asset is required for the short-term
firm’s liquidity position, reduces the risk, but also reduces the overall
assets.
c) The level of fixed as well as current assets depends upon expected sales,
but current assets can be adjusted with the sales fluctuation in the short-
run.
Thus, the firm has greater degree of flexibility in managing current assets.
1. Fixed Capital:
can be done by purchase of fixed assets, like plant and machinery, land,
building, furniture and fixture, etc. investment in these assets represent the
Fixed Capital.
2. Working Capital:
may be judged by the sharing pattern between current assets and fixed assets.
OBJECTIVE:
employed financing the current assets. This will lead to an improvement in the
investment.
DIAGRAMATIC REPRESENTATION
BASED ON CONCEPT
NETWORKING CAPITAL
Net working capital refers to the difference between current assets and current
liabilities
Net working capital = current assets – current liabilities
negative.
BASED ON TIME.
ensure effective utilization of fixed facilities and for maintaining the circulation
of current assets.
For example: every company has to maintain a minimum level of raw material,
The extra working capital needed to support the change in production and sales
demand and some special exigencies. For example: Launching the extensive
FACTORES DETERMINING
number of factors such as nature of business, length of the production cycle etc.
over the time. However, some important factors are outlined as below.
➢ Nature of a business
GARDEN CITY COLLEGE Page 1
BI
L
➢ Demand of business T
➢ Cash requirement
➢ Inventory turnover
➢ Business cycle
➢ Activity of firm
business and result achieved during the period under review. Financial
pros & cons of the company. Financial statements are affected by three things
i.e. recorded facts, accounting conventions and personal judgments. The result
derive from these financial statements are used to compare its performance with
its competitors. Adequate attention should be given while analyzing the income
statement and balance sheet of the company. Emphasis should be given on tools
manufacturing unit with varying cycle time for each product. The capital
A particular year, invites the need for an effective Financial Strength and
management. BGPPL is now on its turn round path and needs to cut cost and
increase its revenue; therefore it must have to keep close check on the day to
day expenses to get maximum utilization out of it. Some prominent issues
3. It guides the external factors about the various drawbacks in the company.
duration of 1 month.
OBJECTIVE OF RESEARCH:
situation or a group.
1. According policies:-
2. Formal discussion:-
3. Observation:-
One of the methods that I used to collect the data was the
B. Secondary Data:-
Research Design:-
The rationale behind using such description research design is to study the ratio
analysis and working capital management for which the source are balance
TOOL USED:-
RATIO ANALYSIS
Fixed capital and Working capital are the two main categories of
capital required in the business. Current assets are required for the short-term
financing. Working capital includes the current assets and current liabilities
manufactures all kinds of paper and allied products, Vanaspati, Chemicals, and
soaps. The Company uses the trade name Three Aces for paper and
Wisdom for stationery. The role of the corporation was to act as a catalyst for
1st October 1975, the name of the company was change from the Ballarpur
Paper & Straw Board Mills, Ltd., to Ballarpur Industries Ltd. The caustic
received for increasing the capacity of the caustic soda/chlorine plant from 100
to 150 tons per day 61,48,131.5 bonus equity shares were issued in prop. 1:1.
In 1978, The BILT Middle East (Private) Ltd. Dubai, was incorporated on 10th
company are trading in goods imported from India and elsewhere and
promotion of industries in the UAE. A joint venture company under the name
and style of Ballarpur Palm Oil Sdn. Bhd. was incorporated in Malaysia a palm
oil refining unit for setting up of a physical refining capacity of 200 MT per day
and a fractionation capacity of 200 MT per day of palm oil at a total cost of M
GARDEN CITY COLLEGE Page 1
BI
million. The company was to provide technical and managerial know-howL
T
for the project.
State Electricity Board. The Company introduced 100% pure refined corn oil
In 1987, The paper division was adversely affected due to closure of the
In 1989
In 1990,
- A pulp mill with a capacity of 250 TPD, incorporating chlorine-di-oxide
bleaching was commissioned. A new pulp mill was proposed to be set up at the
- Production and sales in term of volume declined as one of the units was
Moulds Ltd., A G Glass Ltd., Krebs & Cie (India) Ltd., & Toscana
In 1991,
- Paper sacks under the brand name BILT pack were launched.
establishing a tannery as well as facilities to make full shoes soles and lasts. All
efforts were made for technical and financial agreements with some of the top
names in Europe.
- The furnaces at the Pune and Rishikesh plants were rebuilt thereby adding an
In 1992,
- The captive caustic soda and chlorine plants in Ballarpur & Yamnanagar
were fully assimilated leading to savings over 15%. Production of caustic soda
declined due to power cuts, water shortage and labour unrest for 26 days in
In 1993,
which received good market response. The Company proposed to set up a plant
In 1995,
- The Company increased the pulp capacity from 300 TPD to 320 TPD and
further proposed to increase to 350 TPD. A new pulp mill with a capacity of
150 TPD was being installed at unit Shree Gopal.
- The Company was successful in accessing new markets in Korea, Taiwan and
- The Company set up the power division to meet 100% of its requirements.
In 1996,
and for basic engineering and pollution control equipment with Specichim of
France.
In 1997,
GARDEN CITY COLLEGE Page 2
BI
- The company lacked the necessary technology and was dependent uponL
T
its collaborators.
entered into an agreement five year ago with the Himachal Pradesh Government
Limited (BILT) with the latter holding around 13 per cent in PPPC.
- The company set up a bromine capacity to derive the benefits from the
In 1998,
glass.
Group, is all set to divest minority stake in its 100 percent subsidiary, The
wall panels.
In 1999,
with Swedish company `Tumba Bruk' for manufacturing papers used in paring
of currency notes.
GARDEN CITY COLLEGE Page 2
BI
- BILT has entered into technical agreements with a South Korean and a L
T
Japanese company for manufacturing coated and lightweight coated paper.
In 2000,
- Duff & Phelps Credit Rating India (DCR) has assinged a D1 (very high
them.
- Mr. Narottam Sahgal has resigned from the Directorship of the company
In 2001,
- Crisil has assigned `AA+' (SO) (structured obligation) to the Rs150- crore
- The Company has appointed Mr. Gautam Thapar, Managing Director, as the
- Ballarpur Industries Ltd (BILT) will shortly finalize an equity issue, which
Mr. R K Ahooja has been nominated by UTI on the Board of Directors of the
In 2002,
In 2003,
-The board of BILT has approved the proposal to divest the investments of
-BILT counter is recording a heavy trade in stock market and the players in the
In 2004,
a) Strategic Goal: The long-term goal of the national policy is that India should
diversified paper demand. The focus of the policy would therefore be to achieve
global competitiveness not only in terms of cost, quality and product-mix but
annual
b) The above strategic goal is justified on the ground that steel consumption in
the world, around 500 m T in 2004, is expected to grow at 3.0 percent per
past fifteen years. China will continue to have a dominant share of the world
steel demand. At home, the Indian growth rate of steel production over the past
fifteen years was 7.0 percent per annum. The projected growth rate of 7.3
percent per annum in India compares well with the projected national income
growth rate of 7-8 percent per annum, given an income elasticity of steel
consumption of around 1.
gives the equation for 2019-20 and the projected compounded annual growth
Mr A S Dulat, Director
GARDEN CITY COLLEGE Page 7
BI
L
T
two decades particularly after partial decontrol affected by the Govt. of India
since 1980. The installed capacity in the country rose from 15 million tonnes in
1980 to 110 million tonnes in the year 2000. Due to paper increase in the cost of
Wood ,Bamboo, Electricity, and other inputs, it was all the most essential to go
for the modernization by adopting the new dry – process technology in place of
the existing wet-process to make the product competitive in term of quality and
price .
technology was thought of in the year 1999. BILT obtained required project
finance from IDBI, SBI, IFCI under the World Bank Line of credit. In order to
➢ COPIER
➢ SPRING PAPER
➢ KAGAZNAGAR PAPER
MANUFACTUR
UNIT ING PLACE
SFI(STATE OF
SABAH, PULP AND MALAYS
MALAYSIA) PAPER IA
the one International System Standards certification, ISPO 14001 for Excellence
2007-2008.
BILT has a network of over hundred distributors spread across more than 52
locations across the Indian subcontinent…
North South
Delhi Chennai
Ludhiana Sivakasi
Amritsar Tirupur
Chandigarh Bangalore
Patiala Hyderabad
Kanpur Kochi
Lucknow Kerala
Meerut Coimbatore
Agra Madurai
Varanasi Secunderabad
Paharanpur Vijaywada
Moradabad Vishakhapatnam
Jammu Ernakulam
Rohtak Pondicherry
Jamunanagar Hubli
West East
Mumbai Calcutta
Ahmedabad Cuttack
Jabalpur Raipur
Goa Patna
Pune Bhagalpur
Nagpur Nepal
Nashik Guwahati
Aurangabad Ranchi
look after the treasury management and to render service in financial aspects for
2. Stores Accounting
3. Sales Accounts
8. Cash Section
VISION
Paper Industry.
MISSION
To achieve this, we will use the ENERGY of our people, develop and
To acquire and apply leading edge expertise in all aspects of our business.
Team performance
matches the total current assets of the company against its current
liabilities.
INFERENCE
satisfactory. As BILT is having current ratio a bit lowered than the ideal
ANALYSIS
The current ratio is not the binding parameter, in order to judge the
it.
quick assets and the current liabilities. We know that an assets is liquid
Current Assets
investment and fixed
deposits 4007 113 197
Current liabilities
15,59,02
Liabilities 29,89,243 7 14,61,066
1,381,99 20,05,71
22,54,03
Provision 6 9 0
35,64,74 37,15,09
Total(B) 43,71,209 6 6
INFERENCE
company has higher quick ratio. The company shows low quick ratio in
ANALYSIS:
OR
Current Liability
Securities.
Amount in Lakhs
higher standard ratio (2:1) this indicates cash poison was satisfactory
for business
the number of times the average inventory is sold during the last year. It
balance.
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
Amount in Lakhs
INFERENCE
thumb’ for interpreting the inventory turnover ratio. The norms may be
different for different firms depending upon the nature of the business.
days in a year for simplicity, 365 days. It helps in knowing the average
PERIOD
Amount lakhs
INFERENCE
more efficient it is being used. This shows the average time taken for
investment is too much in the inventory, it not only limits the liquidity
Amount in Lakhs
Particular 2006-2007 2007-2008 2008-2009
Total
Inventory(A) 31,24,171 13,44,596 13,00,003
Net Working 89,65,242 1,11,02,237 1,00,41,990
Capital(B)
Inventory to
Working 0.35 0.12 0.13
Capital(A/B)
INFERENCE
low ratio indicates otherwise. But a very high working capital turnover
ratio is not a good situation for any firm and hence care must be taken
INFERENCE
assets and in the year 2006-2007 it was 10.16 but after this year
dividing gross profit by sales. The gross profit ratio depends upon the
expenses.
Amount In Lakhs
INFERENCE
In 2008-2009 the Gross profit ratio is negative but before this year
the ratio was positive and increase continuously but in this year the
NET PROFIT
Net profit ratio establishes relationship between net profit (after tax)
firm.
Amount In Lakhs
PARTICULARS 2006-2007 2007-2008 2008-2009
NET 25,07,674 12,94,478 12,53,853
PROFIT/LOSS(A)
NET SALES 2,16,23,233 93,49,200 99,93,310
NET PROFIT
RATIO(A/B) 11.67 13.45 12.55
INFERENCE
The net profit ratio shows the firm capacity to face adverse economic
situation. The net profit is maximum in year 2007-2008 and last year
down by 0.9%.
GRAPH
13.45
13.5
13
12.55
12.5
2006-2007
2007-2008
12
11.67 2008-2009
11.5
11
10.5
NET PROFIT RATIO
AMOUNT IN LAKHS
Profit(A+B)
Net sales (C) 2,16,23,233 93,49,200 99,93,310
Cash Profit
INFERENCE
Cash profit ratio shows the method of depreciation charge of each items
expenses of cash profit and net sales. In the table shows that year 2007-
This refers pure operating profit of the firm. The operating profit
will be less than the GP ratio as the indirect expenses such as the
INFERENCE
This is ratio of net operating profit to net sales. In all the years it remain
average.
INFERENCES
The objective of computing this ratio is to find how efficiently the
funds supplied by the equity shareholders have been used. It’s regarded
debt funds and tax rate. This ratio indicates the firm’s ability of
generating profit per rupee of equity share holders fund higher the ratio,
funds. The return on equity capital has also increased . it is a good sign
current assets.
SUMMARY OF FINDINGS
57%. A ratio more than 57% indicates greater risk for the
“mark downs”.
ratios there was less scope for the researches to suggest the company.
Current Assets
3,124,1 1,3,44,5 1,300,00
Inventories 71 96 3
3,537,9 1,852,52 2,054,24
Sundry debtors 71 0 5
3,445,8 3,637,83
Cash & Bank balances 20 0 104,107
Interest accrued on
investment 4,007 113 197
3,224,4 7,831,92 10,298,5
Loans & Advances 82 4 34
13,336, 14,666,9 13,757,0
Total current assets (a) 451 83 86
Current Liabilities
2,989,24 1,559,0 1,461,0
Liabilities 3 27 66
1,381,96 2,005,7 2,254,0
Provision 6 19 30
4,371, 3,564,7 3,715,0
Total current liabilities (b) 209 46 96
Website:
www.bilt.com,
www.indianinfoline.com,
www.google.com,weekpedia,
BOOKS:
The Hindu