Professional Documents
Culture Documents
1 INTRODUCTION
The project was undertaken mainly to study the financial position and the working capital management of YCH Group Pvt. Ltd. Established in the year 1955. YCH logistics is nurtured by quality consciousness, passion for hard work and the will to succeed. YCH services deals various with Intribution, Intrabution, and Retrogistics which cater the requirements of Consumer Goods Industry, Hi-tech Electronics, Chemical and Health Care. YCH with its diversified services has a strong supply chain management across India, which helps in tapping the market as a whole and provides at time services to its customers. It has also introduced a V-hub so that virtual sourcing of raw materials can be done based on the requirements, to feed the global manufacturing plants, enabling manufactures and brand owners to Buy Anywhere, Make Anywhere and Sell Anywhere. The growth of all the services which the company is dealing is linked to the economic development of the country. Our country is thriving to progress further and aims to convert her as a developed nation. To attain this
objective, the development of all the core sectors like infrastructure, power, construction, automobiles, consumer durables, etc. is essential and this in turn is expected to augment the growth of the corporate sector of the country as a whole. As the economy is growing in a faster manner, the disposable income of the people are also increasing and most of the population is brought under the spectrum for spending for housing and white goods. Importantly, the
aspiration to own luxury goods is also seen increasing and this has resulted in a revolution for consumer durables. The company is confident of capitalizing all these factors and increasing its market presence across the country.
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1.3 OBJECTIVES
1) To study the financial position of YCH Group Pvt. Ltd and to evaluate the progress for a period of 4 years. 2) To know the financial efficiency and weakness of the concern. 3) To find out the liquidity position of the company.
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Secondary data are the data, which are early, collected by some ones. It is obtained from various sources other than primary data. Secondary data consists of catalogue, manuals, magazines, annual reports and Internets. It is sufficient for an effective study. Secondary data were collected by. Annual reports of YCH Group Pvt. Ltd Periodicals, books, etc. published by the company Internet website (www.ych.com )
1.6 LIMITATIONS OF THE STUDY 1. The effectiveness of the study depends on the correctness of the
information provided.
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DORMANT YEARS
DEVELOMENT YEARS
TAKE-OFF YEARS
1950s
1960 s
1970s
1980s
1990s
21ST CENTURY
A bit broad, but the elements that make up the modern logistics industry continue to evolve as the breadth of value added services warehouse logistics providers offer does. This expansion has been accelerated by three vital trends in the new economy:
The general trend toward outsourcing, The previously unprecedented growth of e-commerce and
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A recent study found that 95 percent of the U.S.s chief executives believe they should have some form of logistics strategy, and nearly 50 percent of the nations CEOs are currently incorporating supply chain planning into their overall business strategies. One thing is certain: no matter how logistics is defined, the function accounts for 8.7 percent of the total U.S. Gross Domestic Product ($910 billion in 2002). It is growing dramatically in terms not just of services provided and outsourced but in terms of volume. The industrys 3PL provider element (that most closely served by IWLA) alone counts for more than $78 billion and is estimated to be growing by 15-20 percent per year. Its benefits include:
Reduced need for personnel Reduced transportation and distribution cost Improved customer service Improved cycle time Free-up capital in manufacturers and marketers non-core areas.
2. WAREHOUSING: Warehousing refers to the storing and assorting products in order to create time utility. Generally, larger the number of warehouses firm has the lesser would be the time taken in serving customers at different locations, but greater would be the cost of warehousing. Thus, the firm has to strike a balance between the cost of warehousing and the level of customer service.
Major decision in warehousing is as follow: Logistics of warehousing facility Number of warehousing Size of warehouse Design of the building Ownership of the warehouse
3. INVENTORY MANAGEMENT: Linked to warehousing decisions are the inventory decisions which hold the key to success of physical distribution especially where the inventory costs may be as
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4. TRANSPORTATION: Transportation seeks to move goods from points of production and sale to points of consumption in the quantities required at times needed and at a reasonable cost. The transportation system adds time and a place utility to the goods handled and thus, increases their economic value. To achieve these goals, transportation facilities must be adequate, regular, dependable and equitable in terms of costs and benefits of the facilities and service provided.
5. INFORMATION: The physical distribution managers continuously need up-to-date information about inventory, transportation and warehousing. For example, in respect on inventory, information about present stock position at each location, future commitment and replenishment capabilities are constantly required. Similarly, before choosing a 16 carrier, information about the availability of various modes of transport, their costs, services and suitability for a particular product is needed. About warehousing, information with respect to space utilization, work schedules, unit load performance, etc., is required.
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2.5 PROSPECTS OF GROWTH IN THE INDUSTRY In years gone by, the traditional warehousing and logistics facility was located by rail, road tracks, a sea port, and/or air ways, usually in the least desirable parts of cities or large towns. This stereotype then faded as gigantic, state-of-the-art facilities began to sprout in more rural areas on the outskirts of transportation and population hubs. The World started beginning to see such facilities showing up in even less "traditional" areas. Modern warehouses now are being located in carefully manicured industrial parks that are sprouting as fast as the corn and wheat once did in these open spaces-often in out-of-the-way places. Why the emphasis on such locations for logistics companies? Much of it is due to the great flux that the logistics industry has been undergoing in the first three years of the 21st century. Most of these changes are being driven by a growing trend in the manufacturing and retail sectors to form partnerships with companies to which they can outsource non-core logistics competencies-3PL providers. In turn, 3PL providers are continually looking to provide innovative supply chain solutions to customers by focusing on value-added capabilities, differentiating themselves from the competition. They focus on key objectives, such as implementing information technologies, instituting effective management
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THIRD PARTY LOGISTICS IN INDIA Third party logistics (3PL) market in India is at its nascent stage.3PL is fast gaining popularity in Indian logistics market. Companies in textile , automotive ,pharmaceutical, manufacturing , retail and FMCG sectors are increasingly opting to outsource their logistics requirements to specialized service providers According to the recent survey of 3 PL service providers Engineering, Automotive And Retail sectors are the top revenue earners
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ASSET BASED
NON-ASSET BASED
Own some of the assets used in the SCM which includes trucks, distribution centre and warehouses Chart no: 2
20.00%
15.00%
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MILESTONES
EARLY YEARS 1955-1970s We were established in 1955 as a small local passenger transportation business under the name of Yap Chwee Hock Transport and General Contractors ("YCH Transport"). In 1973, YCH Transport was converted from a sole proprietorship to
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In 1996, we were awarded an Innovation Development Award under EDB's Innovation Development Scheme, for the development of the Intribution solution. We were appointed by Compaq Asia to implement our Intribution solution to service its Asia-Pacific manufacturing operations in the same year. Today, we have implemented the Intribution solution for our various clients, such as Natsteel Electronics in Singapore and Mexico, Motorola in Singapore and China, Gateway in Malaysia, MiTac in Taiwan and Solectron in Mexico. In 1999, YCH Logistics Pte Ltd was renamed YCH Group Pte Ltd and presently serves as our holding company.
3.3 PHILOSOPHY
Our Philosophy YCH is founded on a philosophy that thrives on overcoming challenges. This is embodied in the corporate philosophy using the Chinese Character (Sheng)
meaning to RISE. The acronym of the word RISE was adopted as the companys
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3.4MISSION
Our Mission to Be The No. 1 Supply Chain Solutions Player in Asia Pacific.
3.5VISION
Our Vision to Build THE Logistics Superhighway in a Borderless World represents our passion in creating the ultimate superhighway of optimal efficiency & speed. THE Logistics Superhighway will enable the Physical, Informational, and Financial flows of the supply chain to flow seamlessly throughout a borderless world.
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Hence, in 1999, the company updated the logo to give it a more modern look for the times. The YCH logo embodied a new dynamism. A robust spirit that has evolved from a corporate philosophy of rising to the challenges in exceeding customer expectations, in a demanding, ever-changing world. The symmetry of each letter rendered in twin lines headed in the same direction suggests a commitment to building strong partnerships.
The current YCH brand identity was introduced in October 2005, on YCHs 50th Anniversary. Research from our branding exercise indicated that the brand audience associated YCHs brand essence with the characteristic font type and the colour yellow. The new YCH logo encapsulates the companys vision, energy, and dynamism. It personifies YCH Groups forward-looking spirit and also signifies strong partnerships, in a journey on the Logistics Superhighway.
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connecting global businesses, empowering through a connected supply chain The company had gone through three eras of change and had emerged a more vibrant, dynamic leading-edge company than ever before. The new logo embraced the strengths of the previous logo - the twin lines and the familiar yellow corporate colour. YCH is now better represented in this new visually dynamic context and ready to move towards new horizons in this borderless world.
Suppliers and manufacturers, where raw materials are aggregated to support the manufacturing process; Manufacturers and end consumers, where finished consumer goods are distributed directly to the end consumer or indirectly via various distribution channels such as distributors, wholesalers and retailers; and
End consumers and manufacturers, where defective goods are returned to the manufacturer or appointed returns centre for service and repair.
In addition to the physical movement of goods, each of these interactions also involves the exchange of information between parties in the supply chain The supply chain management also involves the co-ordination and integration of various functions such as procurement, manufacturing planning, distribution and marketing. INTRIBUTION Manufacturing Logistics Solutions: Managing the flow of your raw materials information and financial transactions has never been smoother than with Intribution , a web enabled manufacturing logistics solutions .Intribution ensure that the manufacturers needs are met throughout the manufacturing process in a cost and time efficient manner. Vendor Managed Inventory/Suppliers Owned Inventory: As we know how everything connects, we can help you to nimble in your business. It is done by orchestrating the movements of your inventories on a Just - In - Time basis to support built to order (BTO) and configured to order (CTO) manufacturing .under the SOI model, we enable the transfer of materials ownership from suppliers to manufacturers only upon manufacturing pull.
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3.9 SERVICES
Freight Management Warehousing Transportation
Freight management: There freight management service includes managing clients' freight requirements and activities, including the booking and scheduling of freight activities and the preparation and coordination of the necessary documentation. They have established a network of overseas air and sea freight agents to provide on time deliveries to Europe, the Americas and Asia. Y-Track their web-based global track and trace system, is incorporated to our freight management services to provide their customers with end-to-end visibility in tracking shipments via the Internet. The YCH Freight Connector provides user an access to the simplest shipment booking system with competitive rates from multiple Carriers/Agents. The Freight Connector is an interactive multi-modal, internet-based supply chain management tool that allows customers to create shipment bookings over the
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3.10 EVENTS
YCH (Tianjin) donates to Quake Victims. YCH (India) organizes Blood Donation Camp in association with Lions Club of India. YCH (Thailand) launches Voices of Customer Survey
3.11 AWARDS
YCH was awarded with Best IT/Electronic Logistics Service Provider (Singapore). YCH bagged frost and Sullivan Best Domestic Logistic Service Provider (Singapore). YCH bags SBA ENTERPRISE of the year award. YCH wins the prestigious CIO 100 award for the year 2010. YCH has been honoured with the Singapore Chemical Industry Councils (SCIC) Responsible Care achievement award for Employee Health and Safety Code in 2010.
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Significance/ purpose
1) Judging the operational efficiency of the business: It is very
significant that the company must know the operational efficiency of its management. We analyze the financial, match the amount of manufacturing, selling, distribution and financial expenses of the current year with the corresponding expenses of the previous year and assess the managerial efficiency of the business. We can judge the operational efficiency of the business by calculating the profitability ratios. 2) Measuring short term and long term financial position: The business must know its financial soundness. It should satisfy itself that its current resources are sufficient to meet its current liabilities. We can calculate current and liquid ratios for comparing current assets and current liabilities to ascertain short term financial soundness. Long term and financial position can be measured by calculating debt equity, proprietary d fixed asset ratios. The results of the financial analysis may be studied and corrective steps can be taken, if necessary. 3) Indicating the trend of achievements: Financial statements of the previous years can be compared and the trend regarding various expenses, purchases, sales, gross profit and net profit can be ascertained, cost of goods sold, values of assets and liabilities can be compared and the future prospects of the business can be indicated.
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3.6
MEANING
OF
ANALYSIS
OF
FINANCIAL
STATEMENTS
Financial statements analysis is largely a study of relationship among various financial factors in a business as disclosed by single set of statements and a study of the trend of these factors as shown in a series of statements MYER Analysis is the process of critically examining in detail Accounting information given in the financial statements. For the purpose of analysis, individual items are studied; their interrelationships with other related figures established, the data sometimes rearranged to have better understanding of the information with the help of different techniques or tools for the purpose. Analyzing financial statements is a process of evaluating relationship between component parts of financial statements to obtain better understanding of firms position and performance. The analysis of financial statements thus refers to the treatment
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Meaning of Interpretation
Analysis and interpretation are closely related. Interpretation is not possible without analysis and without interpretation analysis has no value. Various Account balances that appear in the financial statements do not represent homogeneous data so it is difficult to interpret and draw conclusion. This requires an analysis of the data in the financial statements so as to bring some homogeneity to the figures shown in the financial statements. Interpretation is thus drawing inference and stating what the figures in the financial statements really mean. Interpretation is dependent on interpreter itself. Interpreter must have experience, understanding and intelligence to draw correct conclusions from the analyzed data.
The present and future earning capacity or profitability of the concern, The operational efficiency of the concern as whole and of its various
parts of the departments,
The short term and long term solvency of the concern for the benefit of
the debenture holders and trade creditors,
It is made by those persons who are not connected with the enterprise. They do not access to the enterprise. They do not have access to the detailed record of the company and have to depend mostly on published statements. Such type of analysis is made by the investors, credit agencies, governmental agencies and research agencies. Internal analysis
The internal analysis is made by those persons who have access to the books of Accounts. They are members of the organisation. Analysis of financial statements or other financial data for managerial purpose in the internal type of analysis. The internal analyst can give more reliable result than the external because every type of information is at his disposal. 2) According to the objective of the analysis Long term analysis
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This is made to determine the short term solvency, stability and liquidity as well as earning capacity of the business. The purpose of this analysis is to know whether in the short run a business concern will have adequate funds readily available to meet its short-term requirements and sufficient borrowing capacity to meet contingencies in the near future. This analysis is made with reference to items of current assets and current liabilities (working capital analysis) to have fairly sufficient knowledge about the companys current position which may be helpful for short term financial planning and long-term planning. 3) According to the modus operandi of the analysis Horizontal (or dynamic) analysis
This analysis is made to review and analyze financial statements of a number of years and therefore based on financial data taken from several years. This is very useful for long-term trend analysis and planning. Comparative financial statement is an example of this type of analysis. Vertical (or static) analysis
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Chart No: 5 Tools of Financial analysis 1) Comparative financial statements 2) Common size statements 3) Trend analysis 4) Funds flow statement 5) Cash flow statement 6) Cost profit volume analysis 7) Ratio analysis COMPARATIVE FINANCIAL STATEMENTS In the words of FLAUKE Comparative analysis is the study of trend of the same items and computed from two or more financial statements of the same business enterprise on different dates. The comparative financial statements are statements of the financial position at different periods of time. The elements of financial position are shown in a
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The comparative balance sheet analysis is the study of the trend of the same items, group of items and computed items in two or more balance sheets of the same business enterprise on different dates. The changes in periodic balance sheet items reflect the conduct of the business. The changes can be observed by comparison of the balance sheet at the beginning and at the end of a period and these changes can help in forming an opinion about the progress of an enterprise. Comparative income statement
The income statement gives the result of the operations of a business. The comparative income statement gives an idea of the progress of a business over a period of time. The changes in absolute data in money values and percentages can be determined to analyze the profitability of the business. COMMON SIZE STATEMENT The common size statements, balance sheet and income statement, are shown as analytical percentages. The common size statements may be prepared in the following way: 1. The total assets or liabilities are taken as 100 2. The individual assets are expressed as a percentage of total assets, i.e., 100 and different liabilities are calculated in relation to total liabilities.
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A statement in which balance sheet items are expressed as the ratio of each asset to total assets and in the ratio of each liability is expressed as a ratio of each asset to total liabilities is called common size balance sheet. Common size income statement
The items in income statement are shown as percentages of sales to show the relation of each item to sales. This relationship is helpful in evaluating operational activities of the enterprise. TREND ANALYSIS Trend analysis refers to the comparison of past data over a period of time with that of a base year. Under this method, percentage relationship that each statement item bears to the same item in the base year is calculated. Any year i.e., earliest year involved in comparison, or the latest year, or any intervening year, may be taken as the base year. As the purpose of this analysis is to highlight some important changes, the trend calculated only for some important items that can be connected with each other. The concerned item in the base year is taken to be equal to as 100 and then based on this, trend percentage for the corresponding items in other years are calculated. This method is a horizontal type of analysis of financial statements. The trend percentages are shown in comparative financial statements. Trend analysis is a useful tool for the management since it reduces large amount of absolute data in to a simple and easily readable form. By looking at the trend in a particular ratio one can see whether the ratio is increasing or decreasing or remaining constant. From this a problem is unearthed and good management is observed.
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information from financial statements in the form of ratios is termed as ratio analysis. A ratio is a simple arithmetical expression of the relationship of one number to another. It may be defined as the indicated quotient of two mathematical expressions. However, ratio analysis is not an end in itself. It is only a means of better understanding of financial strengths and weaknesses of a firm. Calculation of mere ratios does not serve any purpose, unless several appropriate ratios are analysed and interpreted. There are a number of ratios which can be calculated from the information given in the financial statements, but the analyst has to select the appropriate data and calculate only a few appropriate ratios from the same keeping in mind the objective of analysis. The following are the four steps involved in the ratio analysis: 1) Selection of relevant data from the financial statements depending upon the objective of the analysis. 2) Calculation of appropriate ratios from the above data. 3) Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statements or
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Current Ratio Quick Ratio Or Acid Test Ratio Or Liquid Ratio Absolute Liquid Ratio Or Cash Position Ratio
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3 2.5 2 1.5 1 0.5 0 2007-2008 2008-2009 2009-2010 2010-2011 2.87 1.73 0.96 1 current ratio
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