paresh vaghani 2003

7/31/2019 Paresh Vaghani 2003

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PREPARED BY: GUIDED BY:

PARESH VAGHANI VIDHI JOSHIT.Y.B.B.A (Lecturer)ROLL NO: 158 SSCCM

B.B.A. Department,

SWAMI SAHAJANAND COLLEGE OF COMMERCE & MANAGEMRNT,(Affiliated to Bhavnagar University)

Plot No.639,

ISCON Megha city,

Behind Bhavnagar Uni. Karyalay,

Bhavnagar -364002.

Batch - 2008-11


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49

BHAVNAGAR JILLA DOODH UTPADAK SANGH LTD

SARVOTTAM DAIRY

A

Research Project Report

On:

Financial PerformanceA PROJECT REPORT SUBMITTED

TO BHAVNAGAR UNIVERSITY OF BHAVNAGAR

IN PRACTICAL FULFILLMENT OF

THE DEGREE OF THIRD YEAR

BACHELOR OF BUSINESS ADMINISTRATION

PREPARED BY: GUIDED BY:

PARESH VAGHANI VIDHI JOSHI

T.Y.B.B.A. (Lecturer of SSCCM)

ROLL NO: 158

SWAMI SAHJANAND COLLEGE OF

COMMERCE AND MANAGEMENT

BHAVNAGAR UNIVERSITY

BHAVNAGAR

BATCH: 2008-11


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49

Management study without practical knowledge is like learning horseriding without sitting on horse and by just reading the book.

Basically science is theoretical knowledge and art is practical knowledge

to apply it. Thus they are supplementary to each other and are highly dependent

on each other.

Practical knowledge is very essential for a management student because

through this the student gets the total know how of different departments of the

unit.

Experience is the best teacher

I had taken my practical training from SARVOTTAM DAIRY and I fell that itis running well though there is tough competition nowadays. The following report

prepared by me is the reflection of all the knowledge gained by me.

I had tried my level best to show each aspect of the unit. This report is

truly for the purpose of study and as a part of training.

Applied Knowledge is Power.

ACKNOWLEDGEMENT


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49

One Teacher is equal to hundred

Mothers

I have a great pleasure and zeal that I express my deep gratitude and

thanks to our respected Trust Mr. SAVANISIR and Principal Mrs. HETALMAM toinspire and motivate us for our industrial training. She gives us a clear vision

about industrial training.

I am also thankful to coordinator Mrs. POOJA MEHTA and also thanks to

Mrs. VIDHI JOSHI who guided us in report writing.

I am also thankful to library head MATANGIMAM.

I would like to express my gratitude to the industry for giving their valuabletime and give information to him for the work in each field. I am thankful to every

executive officer, accountant Mr. NILESHBHAI and head of the production

department Mr. HASMUKHBHAI PANDYA who give me his precious time.

I am also thankful to the management of SARVOTTAM DAIRY who

helped to develop this report and provide infrastructure facility to take up my

industrial training at SARVOTTAM DAIRY.

Signature:

XParesh Vaghani


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CONTENTS


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1.1: NAME AND ADDRESS

1. Name of Industry: SARVOTTAM DAIRY

2. Address: Sarvottam Dairy,BhavnagarRajkot Highway Road,Sihor,Bhavnagar.

NO PARTICULARSPAGE

NO

1 Name and Address

2 History of SARVOTTAM DAIRY

3 Development of unit

4 Size of unit

5 Form organization

6 Formal organization

7 The Product of Sarvottam dairy

8 Manufacturing process

9 Organization Structure

10 Time Keeping System

11 Employee services

12 Contribution of the Dairy to the Industry


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3. Telephone: Office:- (02846) 329633,225502Fax: - (0278) 2436743

4. Form of Organization: Co-operative firm

5. Products: Special milkSilver Milk

Kanchan MilkLight MilkButter Milk

6. Bankers: Bhavnagar Jilla Sahkari Bank Ltd.State Bank of Saurashtra.I.D.B.I. Bhavnagar.Bank of Baroda.

7. Auditors: Jagdishbhai Mehta

8. Size of Unit: Medium scale Industry.

9. Total Worker & staff: 53

10. R.G. No. REDG/U28701

11. Main Product: Milk

12. Future Plan : - SweetsCheese

ChocolatesIce-Cream

13. Average Marketing 1,80,000 Litter per Day

1.2: HISTORY:

Right Person makes brilliant company,

Brilliant company makes bright future

GUJARAT DAIRY DEVELOPMENT BOARD establishes BHAVNAGAR

DAIRY IN 1974. Bhavnagar dairy has brand name SAURAS. By this name


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Bhavnagar dairy sells milk and ghee in Bhavnagar district, by co-operative

members of the district the milk is sold to the SANGH and after processing the

milk it is sold under the name of Bhavnagar dairy. In year 1989 the highest milk

purchased from co-operative members was 42,500 liters and they sell the

purchased milk to different areas of district. As the year passed the production

came down and due to some crisis government closed Bhavnagar Dairy on 24-12-1999.

SANGH was enabling to serve Bhavnagar dairy from crisis. When SANGH

was established in 1974 they took the responsibilities to solve the problems of

their co-operative members but the response by the government was not proper

to save Bhavnagar dairy to help the small milk producers.

Because of the crisis of Bhavnagar dairy the milk producers of whole

district came into financial crisis as they had no option to sell their milk. After

sometime the producers made meeting in JILLA PANCHAYATS ground and

majority of them took the responsibility of re-establishment of SANGH. Mr. H.R.

NANDVA and Mr. M.P.PANDYA decided to establish the SANGH. Mr.

H.R.NANDVA and Mr. M.P.PANDYA send the application to GUJARAT

GOVERNMENT for the re-establishment of SANGH in the district. On temporary

basis GOVERNMENT think up milk producer of Bhavnagar district with UTTAM

DAIRY AHMEDABAD and Government also formed a government body under

president ship of Mr. V.C.JOSHI to take care of the responsibility of producers of

Bhavnagar district and UTTAM DAIRY and also to work as a mediator between

this two.

As I mentioned above that H.R.NANDVA and M.P.PANDYA are the main

bodies of this work on the behalf of whole district. They started to sell the milk

produced by the district to UTTAM DAIRY on 3-1-2000 and on the date of 14-4-

2000 UTTAM DAIRY established a chilling center in TALAJA near Bhavnagar.

This system was temporary. So a permanent body was required to be

formed on behalf of all the milk producers. For this purpose, the meeting of milk

producer was needed under the chairmanship of Mr. MAHENDRABHAI PANOT.


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The registrar of Bhavnagar Mr. K.B.UPADHYAY also supported and guided for

further process. At the end, on the date of 27-6-2001 under the registration

number: REDG/U 28701 the SANGH formed second time. But as the handling of

the milk was done by UTTAM DAIRY the SANGH started to make the members

at co-operative level and after some time they started to provide animal food and

other basic things to their members in order to increase the number of member.

At the end, with the help of that is GUJARAT CO-OPERATIVE MILK

MARKETING FEDERATION. The meeting was held between Mr. MOHANBHAI

BHARWAD the chairman of UTTAM DAIRY and Mr. MAHENDRABHAI PANOT

the chairman of BHAVNAGAR JILLA DOODH UTPADAK SANGH LTD. In this

meeting it was decided that the chilling center which was developed by UTTAM

DAIRY and other dead stock was purchased by SANGH, they started production

in TALAJA on rented land. On the date 21-11-2004 the SANGH started its

production and distribution system. The profit earned thereby under the name of

SARVOTTAM DAIRY was used in purchasing a land near Sihor and a new plant

was established on the date 12-12-2005.

1.3: DEVELOPMENT OF THE UNIT:

SARVOTTAM DAIRY was established on 12-12-2005 and it is a single

largest dairy of district level. Basically SARVOTTAM was the brand name of the

products which was processed by BHAVNAGAR JILLA DOODH UTPADAK

SANGH LTD. After the closure of Bhavnagar dairy in 1999 the dairy of our owndistrict was needed because other district had their own dairies and our milk

producers did not earn require profit. So taking this problem into consideration


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the political bodies and some business persons of the district started a new

venture namely SARVOTTAM DAIRY to solve the problem of milk procedure of

the district.

When SARVOTTAM DAIRY was started at that time many problems

arises regarding row materials, equipments, machinery, etc. it had not purchasing

power of hiring the skillful labour, knowledgeable employee. But its performance

was very effective between the tough competitions and now they have 1

distributor in every Taluka and 17 distributors in Bhavnagar city. At present, the

dairy collects 1,80,000 liters of milk per day, but it processed only on 50,000 liters

and remaining 1,30,000 liters of milk is sent to Mather dairy.

Sarvottam Dairy is not looking the better sale of its product but also

they are looking better quality.

Better product,

Better value,

Better living

1.4: SIZE OF UNIT:


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According to the industrial policy 1991;

Small Scale:

Small Scale Unit is a unit in which investment in fixed assets and current

assets is between Rs. 25 Lacs to Rs. 5 Crore.

Medium Scale:

Medium Scale Unit is a unit in which investment in fixed assets and currentassets between range of Rs. 5 Crore but not more than 10 Crore.

Large Scale:

Large Scale Unit is the one in which investment in machinery and plant is

more than Rs.10 Crore.

In SARVOTTAM DAIRY the total plant cost is of 7 crore and it is said to be

a MEDIUM SCALE co-operative dairy.

1.5: FORM ORGANIZATION:


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Depending on the ownership, the business organization can be classified

in the following forms :

SARVOTTAM DAIRY is a CO-OPERATIVE ORGANIZATION. The

producers of milk get together and form a SANGH which runs by trained and

experienced persons and they get the profit from selling their milk to the

SANGH. The SANGH is processed that milk and sell it to the local market and

the profit is divided into the form of dividend.

1.6: FORMAL ORGANIZATION


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Board of directors:

Mr. MAHENDRABHAI PANOT, CHAIRMAN

Mr. H.R.NANDVA, M.D

Mr. BHALIYA MAUJIBHAI, DIRECTOR

Mr. CHUNILAL BARAIYA, DIRECTOR

Mr. BHIKHABHAI KHODAFAD DIRECTOR

Mr. DAYARAMBHAI BARAIYA, DIRECTOR

Mr. GIRJASANKARBHAI DHANDHALIYA DIRECTOR

Mr. MATHURBHAI ZINJALA DIRECTOR

Mr. JESHABHAI KHER DIRECTOR

Mrs. SHRADDHABEN RAJYAGURU DIRECTOR

Mrs. PRABHABEN VALAKI DIRECTOR

Mrs. DEVUBEN BHATT DIRECTOR

Mr. LAKHUBHAI KAMALIYA DIRECTOR

MEMBER OF GUJRAT CO-OPERATION MILK MARKETING FEDRATION

DIRECTOR.

Bankers of the dairy:

1) Bhavnagar District Co-operative Bank, Bhavnagar.

2) Bhavnagar District Co-operative Bank, Talaja.

3) Bhavnagar District Co-operative Bank, Sihor.

4) Bank of Baroda, Bhavnagar.

5) Bank of Baroda, Sihor.

6) IDBI, Bhavnagar.

7) State Bank of Saurastra, Sihor.

Auditors:

Mr. Jagdishbhai Mehta.

Charted Accountant


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1.7: THE PRODUCTS OF SARVOTTAMDAIRY

Milk is the core product of the dairy but they also produce buttermilk.

There are different brands which has a difference between them regarding price,

Fat and S.N.F. These brands are as below;

1) SARVOTTAM SPECIAL MILK

1) SARVOTTAM SILVER MILK

2) SARVOTTAM KANCHAN MILK

3) SARVOTTAM LIGHT MILK

4) SARVOTTAM BUTTERMILK


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1.8: MANUFACTURING PROCESS:

SARVOTTAM DAIRY is a consumer goods production sector. Milk is

essential ingredient in our life. In Every stage of life milk is useful to develop and

maintain our body.

The process is as under:

The process is described as under;


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Receive milk from members of co-operative society. Basically the SANGH itself says that it is a joint effort of the milk

producers. There are 10 routs of milk producers. These routes are covering

almost all the villages of milk producers. The dairy only accepts the milk from that

producer who is its member in co-operative society. Jesser, Gadhada, Timana,

Nesvad, TarSara, Vallbhipur, Goriyali, Gopnath, Bagdana, and Mahuva these are

the routs and every route allotted specific time for carrying down their milk to the

dairy.

Milk Tank:In the milk tank they store the milk for the process. The milk gets the

steady temperature in the tank before the process starts. We can also say thatthe different process on milk starts from this tank.

Taking general FAT and S.N.F.:The dairy do the test of FAT and Solid Not Fat (S.N.F.) for the payment to

co-operative members because as the FAT and S.N.F. is high the member get

higher amount of his milk. The part of FAT in the milk can be known by using the

SULPHURIC ACID. Moreover, because of heat the FAT part comes out in the

liquid form. After that a SANTRIFUSE comes out which is measured by

LITEROMETER.

S.N.F. is measured by using LACTOMETER. In the boiled milk, they put

the lactometer and after using the formula given below they can know about

S.N.F. figure;

There is a certain standards are there for S.N.F. and FAT. They are,

-The milk of buffalo must contain 6% S.N.F. and 9% FAT-The milk of cow must contain 8.5% S.N.F. and 3.5% FAT

Standardization:


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There are certain standards set for the milk. Each standard have their own

S.N.F. and FAT. Afterwards it is decided that what should be the price of the milk.

There are four standards,

Variety Fat (%) SNF (%)*Amul Gold (Whole milk) 6 9

Amul Shakti (Standardised milk) 4.5 8.5

Amul Taaza (Toned milk) 3 8.5

Amul Slim N Trim(Double toned milk) 1.5 9.0

Pasteurization:

On the name of the founder of this process it is called pasteurization.

Louie Pasteur is the founder of this method. He found this process to save the

liquor of king from spoiling out. To save the milk from the bacteria they boiled the

milk on certain temperature and quickly down the temperature.

In the olden process they emptied the milk into a big utensil and after that

they boiled the milk up to 63 degree Celsius temperature for 30 minutes and after

that they cool down the temperature for 30 minutes. This method was very time

consuming and improper.

In the modern era the H.T.S.T. method is used for pasteurization. H.T.S.T.

means High Temperature Short Time method. In this method they boiled the milk

up to 72 degree Celsius for 16 seconds and after this they quickly level down the

temperature up to 5 degree Celsius.

They use GASKET PLATES for these methods. Gasket plates are

adjusted by a specific way that the milk passes from one gasket to another

gasket. The first gasket had hot water on both the side and the milk is in the

middle plate, so because of heat from both the side the milk is boiled out up to 72

degree Celsius and after 16 seconds milk is passes to another gasket which

contains cold water on both the side. Here the temperature of milk is level down

to 5 degree Celsius.


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Test of Pasteurization: Because of pasteurization the milk becomes bacteria

free. To see that the milk is free from bacteria or not, there is one test namely

PHOSPHATE TEST. In this test they set the temperature on 72 degree Celsius.

On 72 degree Celsius all the bacteria is fade away and also phosphate enzyme is

fade away from the milk. After that they do a test for phosphate enzyme if the

phosphate enzyme is still there in the milk the color of milk becomes yellow whichshows that the pasteurization is not done properly and if there is no change in the

color than it is proved that the milk can use for the general purpose.

Packaging:

For the packaging they use the machine of R.M.C. Packaging System Pvt.

Ltd. It costs more than 50,000 Rs. The machine can fill 160 pouch of milk in aminute. There are two machines in the dairy for the packaging and the machines

are fully automatic, once you set the program there is rarely any problem.

Dispatch:

There are total 31 distributors in the district. From the 31 distributors 17

distributors are only in Bhavnagar city and rest of the distributor are in thedifferent Taluka. The distributors vehicles come to the dairy in the early morning

and they get their carats of milk as per requirement. The distributor must book

their order before the evening of previous day, and then they can get the milk in

next morning.

1.9: ORGANIZATIONAL STRUCTURE


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1.10: TIME KEEPING SYSTEM:


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The company has a fully fledged time keeping system. At the security

office near the company gate, all the staff members has to sign in the attendance

register in morning at 9.00 a.m. While all the workers have to sign in the

attendance register at the beginning of every shift. The security officer records

the time. The register is passed over the manager. The timings of both the staff members and the workers are as below:

The milk process is an ongoing process. The milk comes from the co-

operative members of village in the morning time as well as evening time. The

time is nearly about 09:00 am for morning and 10:00 pm for evening and they are

processing it for a day as well as night and at evening they start packaging and

the process of packaging is continue till 3:00 am and after that the distributors

come to the dairy with their respective vehicles for taking the milk to their village

or town. So, there are always some responsible people in dairy to lookout that the

process is going well or not. There is two-shift policy in the dairy.

The time keeping system is as below:

Production department:

Engineering

department:

Administrative department:

There is no shift in administrative department. The

office starts at 8:00 am and it closes at 5:00 pm.

There is an overtime facility in this dairy.

Rs. 25 per hour for an over timer.

2-3 official leave is allowed to the employees per month and if they take more

from the official, their salary will be deducted.

Shift TimeFirst Shift 9:00 am To 9:00 pm

Second Shift 9:00 pm To 9:00 am

Shift TimeFirst Shift 9:00 am To 9:00 pm

Second Shift 9:00 pm To 9:00 am


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1.11: EMPLOYEES SERVICES

Employees play an important role in the success of any business.

According to the Indian legislation some industries establishment other than

plantation and meaning provide full facility and benefit to their employees.

Employees services and benefit denoted as wage cost not directly related to theproduction efforts for maintaining good relationship between the workers and

management. Employees are the heart of the organization therefore the dairy is

making most focus on employees services.

It is said that if you give proper attention on employees, the employees

will give you fully attention in your business and profitability of business will

increase.

Some of the important services of the Sarvottam dairy mainly two types

are as under:

1) Statutory services.

2) Non- Statutory services.

1) STATUTORY SERVICES:-

These mandated by the factory act, 1948; the mines act 1952; the plan

station labour act, 1951; and some other acts, of all these the factories act is

more significant and hence is covered in detail here.

Accident fund. Provident fund. Insurance of every employee. Medicine facility.

2) NON- STATUTORY SERVICES:-

Non- Statutory benefits, also called voluntary benefits, includes loans for

house building, education of children, leave travel concession, fair price shops,

loans for purchasing personal convenience and a host of other facilities. The

Sarvottam dairy has provided Non- Statutory facilities are as follows:

Uniform facility. Mobile facility. Canteen facility. Shoes facility .


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1.12: CONTRIBUTION OF UNIT TOTHE INDUSTRY

The total capacity of dairy is 1,80,000 liters per day. From which they use

50,000 liters of milk for packaging and distribute it in the district and rest of

1,30,000 liters of milk they sent to Mather dairy. If we take the production part of

the dairy, But if we take the selling part, the dairy only have 20-22% market of

Bhavnagar district. There is two reasons for this scarcity, first is that the dairy was

started in the year 2005 so it does not have huge amount for marketing. And the

second is that the Amul brand is so much popular in the district that people only

buy Amuls milk or the products of Amul as there are many competitors in this

industry. The Sarvottam dairy is largest producer of milk at district level apart

from this dairy the competitors like B.D.P.L., SUGAM, and RAJWADI are also

there to compete in the local level.


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CONTENTS

WHAT IS RESEARCH?

NO PARTICULARSPAGE

NO

1 What is Research 26

2 Research objective 27

3 Research Design 28

4 Research Instrument 30

5 Research Process 32

6 Limitation of Study 35


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Research for knowledge through objective & systematic method of findings

solution to a problem i.e. Research. Research methodology has many

dimensions & research methods do constitute a part of Research methodology.

The scope of Research methodology is wider than that of Research

methods we talk of Research methodology. We not only talk of the Research

methods but also consider the logic behind the methods.

We use in the context of our Research study & explain why we are using

particular methods or technique & why we are not using others. So that the

Research results are capable of evaluated by researcher & others.

Why a research study has been undertaken, how the research problem

has been defined in what way & why the hypothesis has been formulated, whatdata have been collected & what particular method has been adopted, why

particular technique of analyzing data has been used & a host of similar other

questions are usually answered when we talk of research methodology.

RESEARCH OBJECTIVES


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There must an objective behind any research. Without objective there is

no meaning of research. The purpose of research is to discover answers to

questions through the application of scientific procedures. The main aim of

research is to find out the truth which is hidden and which has not been

discovered yet. As each research has some or the other objectives the following

are the objectives of this research:

It helps investors to know efficiency of the company while taking

investment decision.

To study the mechanism of ratio prevailing in the company and its effect

on the financial condition of the company.

To take decision regarding long term finance ratio analysis is very useful

tool.

It helps management to know efficiency of the different department.

We can know the level of profit, expenses, dividend pay-out ratio etc.


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RESEARCH DESIGN

There are the different types of research designs can be conveniently

described if we categorized them as:

1. Research design in case of exploratory.

2. Research design in case of descriptive.

3. Research design in case of hypotheses-testing.

From the above are the different types of research design are as followed:

1. RESEARCH DESIGN IN CASE OF EXPLORATORY:

Exploratory research studies are also termed as formulate studies. The

main purpose of such studies is that of formulating a problem for more precise

investigation or of developing the working hypotheses from an operational point

of view. The major emphasis in such studies is on the discovery of ideas and

insights. As such the research design appropriate for such studies must be

flexible enough to provide opportunity for considering different aspect of a

problem under study.

Generally, the following three methods in the context of research design

for such studies are talked about: (a) the survey of concerning literature; (b) the

experience survey and (c) the analysis of insight- stimulating examples. In my

project I use this research design because of this research design is base on the

literature, experience survey or secondary data collection.


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2. RESEARCH DESIGN IN CASE OF DESCRIPTIVE:

Descriptive research studies are those studies are concerned with

describing the characteristics of a particular individual, or of a group, whereasdiagnostic research studies determine the frequency with which something

occurs or its association with something else. Most of the social research comes

under this category. The research design must make enough provision for

protection against bias and must maximize reliability, with due concern for the

economical completion of the research study.

3. RESEARCH DESIGN IN CASE OF HYPOTHESIS-TESTING:

Hypothesis-testing research studies (generally know as experimental

studies) are those where, the researcher tests the hypothesis of causal

relationships between variables. Such studies require procedures that will not

only reduce bias and increase reliability, but will permit drawing inferences about

causality. Usually experiments meet this requirement. Hence, when we talk of

research design in such studies, we often mean the design of experiments.Today, the experimental designs are being used in researches relating to

phenomena of several disciplines. Since experimental designs originated in the

context of agriculture operational, we still use, though in a technical sense,

several term of agriculture (such as treatment, yield, plot, block etc.) in

experimental deigns.


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RESEARCH INSTRUMENT

There are the different types of method of data collection. The task of data

collection begins after a research problem has been defined and research

design/ plan chalked out. While deciding the methods of data collection to be use

for the study, the researcher should keep in mind two types of data viz.,

1. Primary data

2. Secondary data.

The primary data are those which are collected afresh and for the time,

and thus happen to be original in character.

The secondary data on the other hand are those which have already been

collected by someone else and which have already been passed thought the

statistical process. The researcher would have to decide which sort of data he

would be using (thus collecting) for his study and according to him he will have toselect one or the other method of data collection. The method of collecting

primary and secondary differ since primary data are originally collected, while in

case of secondary data the nature of data collection works is merely that of

compilation, we describe the different of data collection, with the pros and cons of

each method.

1. PRIMARY DATA:

The primary data are those which are collected afresh and for the time,

and thus happen to be original in character. We collect primary data during the

course of doing experiments research but in case we do research of the

descriptive type and perform surveys, whether sample surveys or census

surveys, then we can obtain primary data either through observation or through

direct communication with respondent in one form or another or through personal

interview.


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RESEARCH PROCESS

1) Formulating research problem:

The researcher must be aware about the problem; it means he must know

the area of research, objective of the research. The best way of understanding

research problem is to discuss it with ones own colleagues or with those having

expertise knowledge. In academic institution the researcher can seek help from

guide who is usually an experienced man and has several research problems in

mind.

2) Extensive literature survey:

Once the problem is formulated, a brief summary of it should be written

down. It is a compulsory for a research worker writing a thesis for a Ph.D. degree

to write a synopsis of the topic and submit it to the necessary committee or the

research board for approval.

Formulating the research problem

Analysis of the data

Extensive literature survey

Development of working hypotheses

Preparing the research design

Collection of the data


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3) Development of working hypothesis:

After extensive literature survey, researcher should state in clear terms the

working hypotheses. Working hypotheses is tentative assumption. Made in order

to draw out and test its logical or its empirical consequence. One can develop

working hypotheses in following steps,

Discussion with the colleagues and exports about the problem.

Examination of data and records, if available, concerning the

problem for possible trends.

Review of similar studies in the area or of the studies on similar

problems,

Exploratory personal investigation which involves original field

interviews on a limited scales with interested parties and individuals.

4) Preparing the research design:

While designing research following items must be include,

a) Sources of Data:

The data sources can be primary or secondary.

Primary Data :

Primary data are the raw data and structures of variables that have been

specifically collected and assembled for a correct information research problem.

The questionnaire we got filled from the customers served as our primary data.

Following are the types of primary research,

Observation method

Interview method

i. Personal interview

ii. Telephone interview

Questionnaires


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Secondary Data:

The information that is collected from Newspapers, Magazines or Reports

is known as Secondary Data.

b) Contact Method:

There is a various ways; mail, telephone, personal or online interview,

to contact the people, Questionnaires etc.

5) Collecting Data:

It is very important to collect data, which are appropriate. There are

several ways of collecting the appropriate data. Here I have collected all the data

through secondary data collection method.

6) Analysis of Data:

For the analysis of collected data, we have used the tabulation technique

and graphical method.


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LIMITATION OF THE STUDY

Every coin has two sides it means there are merits and demerits of each

and every method and research. Following are the limitation of my project report,

As my project report is based on secondary data only provided by company so

there must be primary data also be collected before taking any decision based on

this project.

Lacks of advanced scientific techniques for analysis and interpretation. It means

that I have amylase data by ratio analysis method as my project report is on ratio

analysis but there are many other method which are not used in my project

report.

In such cases respondents were not able to give all information in such cases as

much as possible information was taken.

I cant meet each and every user because of Human Limitations and other

problems so we select some sample.

Conclusion is derived by oneself

Time constrain.


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CONTENTS


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No. ParticularPage

No

1 Introduction 38

2 Meaning 39

3 Classification of ratio analysis 40

4 Advantages of ratio analysis 51

5 Limitation of ratio analysis 52

INTRODUCTION


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The financial statement as prepaid and presented annually is of little use

for the guidance of prospective investors, creditors, and even management. They

are interested in information regarding the exact financial position of the

business, its earning capacity, the present position with regarding the profitability

and the future possibilities. They have only the published accounts of the

company before taking any decision about their money. The publishes accountscontain profit & loss account, balance sheet, directors report, auditors report and

the chairmans speech. The earning capacity and result could be ascertained

from the profit and loss account.

An idea about the financial position can be head from the balance sheet.

The directors report and chairmans speech would assist them in foreseeing the

future prospects of the company. However, accurate conclusion cannot be drawn

from the mass of figures included in these financial statements. Hence they are to

be analysis an interpreted with the help of the number of devices.

MEANING


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The financial statement as prepaid and presented annually is of little use

for the guidance of prospective investors, creditors, and even management. If

relationships between various related items in these financial statements are

established, they can provide useful clues to gauge accurately the financial

health and ability of business to make profit .this relation between two related

items of financial statement is known as ratio. A ratio, is thus, one number expressed in terms of another, e.g. in order to obtain the rate of return on paid of

capital, the net profit of the business is divided by the paid up capital, the figure

so obtained in the ratio. If the same is multiplied by 100, a percentage rate of

return on capital is obtained.

A ratio is customarily expressed in three different ways it may be

expressed as a proportion between two figures. For example, if the current

assets are twice the current liabilities it can be said that the current ratio is 2:1.

Second method is to express it in form of % e.g. the rate of return on capital

employed is 30%. This method is to express it as rates. For example, stock

turnover is 6 or stock turns 6 times a year.

CLASSIFICATION OF RATIO

ANALYSIS


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Accounting ratios are classified in to two parts, which are as following:

1) TRADITIONAL CLASSIFICATION

2) FUNCTIONAL CLASSIFICATION

This accounting ratio are again divided in to different parts:

1)TRADITIONAL CLASSIFICATION

The traditional ratio is divided in to three categories on the basis of the

statement from which the figures are for computing the ratio. The ratio are dividedas follow,

a) BALANCE SHEET RATIO :

When ratio is calculated, by taking information from balance sheet, it is

known as balance sheet ratio e.g. ratio, of current assets to current liabilities.

Following are the balance sheet ratio which are covered in my project work

Current ratio

Liquidity ratio

Proprietary ratio

Debt- equity ratio

Capital gearing ratio

b) REVENUE STATEMENT RATIO

The ratios which are calculated by taking information from revenue

statement it means from profit and loss A|C than it is known as revenue

statement ratio. Following are the revenue statement ratio:

Gross profit ratio


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This ratio is useful for outside person or investors of the business. Liquidity

ratio shows whether the firm will be able to meet its liability as and when they

mature. Liquidity ratios are as follow,

Current ratio

Liquidity ratio

Acid- test ratio

b) LEVERAGE RATIO:

The composition of capital of business and the proportion of owners are

capital and Capital provided by outsiders are related to measure the firms ability

to meet its interest cost and repayment its liabilities. Leverage ratios are as

follow:

Proprietary ratio

Debt equity ratio

Interest coverage ratio

Capital gearing ratio

Debt to total capital ratio

c) EFFICIENCY TURNOVER RATIO:

Efficiency turnover ratio shows efficiency of the work done. Efficiency

turnover ratio is useful to measure efficiency of different department. These ratios

are useful to take decision for top management. These ratios are as follow:

Inventory turnover ratio

Debtor turnover ratio

Creditors turnover ratio

Fixed assets turnover ratio

d) PROFITABILITY RATIO:


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A various number of ratios are design to indicate the profitability ratio of

the business and are grouped into the category of profitability ratio. Profitability

ratios are as follow:

Gross profit ratio

Net profit ratio

Operating profit ratio

Expense ratio

Operating ratio

Return on investment

Return on equity

Return on capital employed

ADVANTAGES OF RATIO ANALYSIS

The process to concern with the identification of the significant accounting

data relationship which give the decision makers inside in to the company

being assessed.

A ratio analysis involves the study of the total financial picture. The analyst

can recommend and indicate positive action with confidence.

One of the most faithful areas for the use of traditional financial ratio seems

to be that of predicting company future.

Ratio enables the companys management to analysis business situation

and to monitor their performance as well as that of their competitors.


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Ratio analysis helps the management to diagnose the situation, monitor the

performance and check out future plans of the company.

The priority ratio enables the chief executive understand the relationship

between his organization at the end, and the market, investors, suppliers,

and employers at the other. He is also in position to watch well is the

organization using its assets and how well it is proved for the future.

LIMITATION OF THE RATIO

ANALYSIS

Industry ratio present a more difficult problems to the financial analystbecause of the following reasons:

A) It is difficult to determine the industry to which a company belongs.

B) The whole emphasis of the system of accounting is on consistency rather

than profitability among different company at a single paint in time.

Within limits, a company may be able to arrange its current assets and

liabilities.


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So as to have the desire at the time the balance is presented to stock

holders.

Financial standard data are not exact and have therefore treated with grade

caution.

The ratio to the refers past events and may not represent the present of

future events.

Financial statements are generally based on historical original cost. The

current economic conditions are ignored.

The technique of ratio analysis has failed to accomplished the expected

impact ability moreover it has made technique more complicated and

complex for beyond the understanding of ordinary business man.

Not all ratio and percentage are significant and useful.

A ratio is little value. It is necessary to have some standard with which to

compare it. The standard may be a budget one. It may be set by a company.

It may be historical one; it may be based on the past performance of the

company. It may be based on the industry comparison.

Changes in many ratios are closely associated and connected with one

another.

While comparing the ratio of particular firm with those of similar firm, the

different between the firms should be recognized.

Ratio are likely to be miss-used there are some situation in which they may

appear to be miss-lending.

-: PROFITABILITY RATIO :-

GROSS PROFIT RATIO:

It is a ratio expressing relationship between gross profits earned to net

sales. It is useful indication of the profitability of business. The gross profit margin

represents the limits beyond which fall in sales are outside the tolerance limit.


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Sr .No. YearGross Profit

Ratios1 2007-08 7.27 %

2 2008-09 7.57%

3 2009-10 4.67%


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Analysis:

Gross profit ratio for the last three years are 7.27 %, 7.57 %, and 4.67

% while standard ratio for gross profit ratio is 50%.

But here all the ratio of the firm is below standard ratio.

From the year 2008-09 to 2009-10, firms gross profit increased by 0.30

% and reached at 4.67 % in 2009-10.

From this chart we can say that firms profit is fluctuating since last

three years. Over roll, Firms gross profit decreased by 3.40 % from

2007-08 to 2009-10.


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Sr .No. YearNet Profit

Ratios1 2007-08 0.344 %

2 2008-09 0.589 %

3 2009-10 0.262 %

Analysis:

Net profit ratio of the firm for last three years are respectively 0.344%,

0.589%, and 0.262%

Standard ratio for net profit ratio is 20% but here in this firm it very less

compare to standard ratio.

In year 2007-08 ratio is 0.334% and second year increase by 0.245

and reach 0.589

Year 2008-09 ratio is 0.589 in year 2009-10 decrease and reach 0.262.

From this chart we can say that firms profit for last three years is not

maintain it is decreases by 21% from 2007-08 to 2009-10.


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OPERATING RATIO

It is a ratio showing relationship between cost of goods sold plus operating

expenses and Net Sales. It shows the efficiency of the management. The higher

the ratio, the less will be the margin available to proprietor. This ratio is also

usually expressed as a percentage.


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Sr .No. YearOperating

Ratios1 2007-08 92.74%

2 2008-09 92.43 %

3 2009-10 95.32 %

Analysis:

Net profit ratio of the firm for last three years are respectively 92.74%,

92.43%, and 95.32%

In year 2007-08 operating ratio 92.74% but in 2008-09 reach 92.43 andyear 2009-10 its increase by 3.11% and reach at 95.32%.

In overall year 2007 to 2010 operating expenses is increase by 2.58.

From this chart we can say that firms profit for last three years is not

maintain it is decreases by 21% from 2007-08 to 2009-10.


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STOCK TURNOVER RATIO:-

Stock turnover ratio is also known as inventory turnover ratio. This ratio is

calculated to know how many time stock is turn over to calculate stock turnover

ratio is calculated by dividing cost of goods sold with average stock average

stock is calculated by combining opening stock and closing stock than dividing bytwo.


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Sr.No. YearStock Turn-over

Ratios1 2007-08 80.60 times

2 2008-09 311 times

3 2009-10 301 times

Analysis:

Stock turns over ratio of last three year are 80.60 times, 311 times, and

301 times respectively.

Standard ratio for stock turnover ratio is 4 times but here it is very high

compare to standard ratio.

The movement of stock is very high. It seems there is no any unsalable

item of inventories in the firm.


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Standard ratio for current ratio is 2:1, but firms ratio is very low compare to

standard ratio

The current ratio of the firm is increases form 2007-08 to 2008-09 by 113%

but in the year of 2009-10 it is decreases by 54%.


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LIQUID RATIO:-

A variant of current ratio is the liquid ratio or quick ratio which is designed

to show the amount of cash available to meet immediate payments. It is obtained

by dividing the liquid assets by liquid liabilities. This ratio is used as a measure of

the companys ability to meet its current obligations. A quick ratio of 1:1

(standard) indicates highly solvent position.


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ACID-TEST RATIO

The measure of absolute liquidity may be obtained by comparing only

cash and bank balance as well as readily marketable securities with liquid

liabilities. This is a very exacting standard of liquidity and it is satisfactory if the

ratio is 0.5: 1. It is computed by dividing the value of quick assets by liquid

liabilities.


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PROPRIETARY RATIO

The ratio shows the proportion of proprietors fund to the total assets

employed in the business. The proprietors funds or shareholders equity consist

of share capital and reserves & surplus.


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Sr .No. YearProprietary

Ratios1 2007-08 14.30 %

2 2008-09 23.97 %

3 2009-10 17.40 %

Analysis: Net profit ratio of the firm for last three years are respectively 14.30%,

23.97%, and 17.40%

In year 2007-08 proprietary ratio is 14.30 and increase 2008-09 by 9.67

and reaches 23.97% and last year decrease and reaches at17.40.

In three year ratio continue fluctuating and it shows very low standard.


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LONG TERM FUND TO FIXED ASSETS

Normally, the fixed assets of business must be purchase out of fixed

capital only, which includes share capital, reserves and long term liabilities. This

ratio, therefore, shows the relationship between fixed capital and fixed assets.

The ratio must be 1 : 1.


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Sr .No. Year

Long term Fund

to Fixed Assets

Ratios1 2007-08 55.77

2 2008-09 61.58

3 2009-10 55.15

Analysis :

Long term fund to fixed assets ratio of the last three year of the firm is

55.77 , 61.58, and 55.15 respectively.

In year 2007-08 ratio is 55.77 and second year its increase by 5.81 and

reaches at 61.58% and in last year decrease by 6.43 and reaches at

55.15%.

As per chart ratio continues fluctuating 2008-09 increase and 2009-10

decrease.


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-: EFFICIENCY TURNOVER RATIO :-

RETURN ON CAPITAL EMPLOYED:-

It is an index of profitability of business and is obtained by comparing net

profile with capital with capital employed. The ratio is normally expressed in the

percentage. The term capital employed includes share capital, reserves and long

term loans such as debentures.


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Sr .No. Year

Return on

Capital

Employed

Ratios1 2007-08 3.94 %2 2008-09 7.07 %

3 2009-10 4.08 %

Analysis:

Here return on capital employed ratios are 3.94%, 7.07%, and 4.08%

respectively for the last three years.

Here also first step ratio medium and second step increase and last year

decrease.

2007-08 3.94 and 2008-09 its increase by 3.13 and reaches at 7.07%

2009-10 decrease and reaches at 4.08.


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FIXED ASSETS TURN-OVER RATIO:-

To ascertain the efficiency and profitability of business, the total fixedassets are compared to sales. The more the sales in relation to the amount

invested in fixed assets, the more efficient is the use of fixed assets. It is indicate

higher efficiency.


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Sr .No. YearFixed Assets Turn-

over Ratios1 2007-09 6.37

2 2008-09 7.39

3 2009-10 8.58

Analysis:

Fixed assets turns over ratio of last three year are 6.37 times, 7.39 times,

and 8.58 times respectively. Higher ratio indicate firm has a capability to

earn more with less investment.


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TOTAL ASSETS TURN-OVER RATIO:-

The amount invested in the business are invested in all assets jointly and

sales are effected through them to earn profits. So in order to find out relation

between total assets to sales.


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Sr .No. YearTotal Assets Turn-

over Ratios1 2007-08 4.22

2 2008-09 4.61

3 2009-10 4.85

Analysis:

Total assets turns over ratio of last three year are 4.22 times, 4.61 times,

and 4.85 times respectively. Higher ratio indicate firm has a capability to

earn more with less investment.


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CONCLUSION

As a part of one of my subject of TYBBA I have taken tanning at

SARVOTTAM DAIRY for 25 days during my project report I conclude following

things.

SARVOTTAM DAIRY is most popular company which is receive milk from

the society and process on that afterwards sells in to market. Its having a good

market at their place, and its have better infrastructure facilities. Company having

latest technology which is use for milk, company is cooperative firm so that its no

have any financial problems in coming years.

The company is having marvelous support from consumers. The

companys Management criterion is good its executive officers and the chairmanare having good Field knowledge and he is highly experienced.

Going through the report, assumptions can be made that the company will

be having Wide scope of development in the next coming years. And I am sure

that company will achieve all their objectives in coming year.


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BIBLIOGRAPHY

BOOKS

FINANCIAL MANAGEMENT, I.M. PANDEY, 8 th EDITION

PUBLISHER: - VIKAS PUBLISHING HOUSE PVT LTD.

FINANCIAL MANAGEMENT,M.Y. KHAN, P.K. JAIN,5 th EDITION

PUBLISHER: - TATA MCGRAW HILL

BUSINESS FINANCE, PRIN. T.J. RANA, 3 rd EDITION

PUBLISHER: - SUDHIR PRAKASHAN

FINANCIAL MANAGEMENT, S.N. MAHESHWARY, 9 th EDITION

PUBLISHER: - SULTAN CHAND & SONS

paresh vaghani 2003

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