1. CHAPTER-I INTRODUCTION 1. FINANCIAL STATEMENT: A financial statement is an organized collection of data according to logical and consistent accounting procedures .its purpose is to convey an understanding of some financial aspects of a business firm. It may show a position at a moment of time as in the case of a balance sheet, or may reveal a series of activities over a given period of time, as in the case of an income statement. Thus, the term financial statement generally refers to the basis statements; i) The income statement ii) The balance sheet iii) A statement of retained earnings iv) A statement of charge in financial position in addition to the above two statement. Financial statement analysis: It is the process of identifying the financial strength and weakness of a firm from the available accounting data and financial statement. The analysis is done by properly establishing the relationship between the items of balance sheet and profit and loss account the first task of financial analyst is to determine the information relevant to the decision under consideration from the total information contained in the financial statement. The second step is to arrange information in a way to highlight significant relationship. The final step is interpretation and drawing of inferences and conclusion. Thus financial analysis is the process of selection relating and evaluation of the accounting data/information. 1

2. This studying contain following analysis: 1) Comparative analysis statement 2) Common-size analysis statement 3) Trend analysis 4) Ratio analysis 1) COMPARATIVE FINANCIAL STATEMENT: Comparative financial statements are those statements which have been designed in a way so as to provide time perspective to the consideration of various elements of financial position embodied in such statements. In these statements, figures for two or more periods are placed side by side to facilitate comparison. But the income statement and balance sheet can be prepared in the form of comparative financial statement. i) Comparative income statement: The income statement discloses net profit or net loss on account of operations. A comparative income statement will show the absolute figures for two or more periods. The absolute changes from one period to another, if desired the change in terms of percentage. Since, the figures for two or more periods are shown side by side; the reader can quickly ascertain whether sales have increased or decreased, whether cost of sales has increased or decreased etc. ii) Comparative balance sheet: Comparative balance sheet as on two or more different dates can be used for comparing assets and liabilities and finding out any increase or decrease in those items. Thus, while in a single balance sheet the emphasis is on present position, it is on change in the comparative balance sheet. Such a balance sheet is very useful in studying the trends in an enterprise. 2 3. 2) COMMON-SIZE FINANCIAL STATEMENT: Common-size financial statement are those in which figures reported are converted into percentages to some common base in the income statement the sales figure is assumed to be 100 and all figures are expressed as a percentage of sales. Similarly, in the balance sheet, the total of assets or liabilities is taken as 100 and all the figures are expressed as a percentage of this total. 3) TREND ANALYSIS The method of calculating trend percentage involves the calculation of percentage relationship that each item bears to the same item in the base year. Trend analysis in immensely helpful in making a comparative study for several years. Any year may be taken as a base year is taken as 100 and on that basis the percentage for each of the items of each of the years are calculated 4) RATIO ANALYSIS: The primary uses of financial statement are evaluating performance and predicting future performance and both of these are facilitated by comparison. Therefore the focus of financial analysis is always on the crucial information contained in the financial statements. This depends on the objectives and purpose of such analysis. The purpose of evaluating such financial statements is different from person to person depending upon its relationship. In other words, even through the business unit it and share holders, debenture holders, investors etc., all undertake the financial analysis for the purpose of extent of such analysis differs. 3 4. For example trade creditors may be interested primarily in the liquidity of a firm because the ability of the business unit to pay their claims is best judged by means of a thorough analysis of its liquidity. The share holders and the potential investors may be interested in the present and the future earnings per share, the stability of such earnings and comparison of these earnings with other units in the industry. Similarly the debenture holders and financial institutions lending long term loans may be concerned with the cash flow ability of the business unit to pay back the debts in the long run. The management of the business unit, in contrast looks to the financial statements form carious angles. The financial analysis always needs certain yardstick to evaluate the efficiency and performance of any business unit. The one of the most frequently user yardstick is ratio analysis. Ratio analysis involves the use of various methods for calculating and interpreting financial ratios to assess the performance and status of the business unit. It is a tool of financial analysis, which studies the numerical or quantitative relationship between two variables or items. A ratio can be worked out by dividing one of the variables of the relationship with other variable and such ratio value is compared with standard or norms in order to highlights the deviations made from those standards. In other words, a ratio is relative figures reflecting the relationship between variables and enables the analysis to draw conclusions regarding the financial operations. However, ratio analysis should not be considered as the ultimate objectives test but it may be carried further based on the outcome and revaluations about the causes of variations. Sometimes large variations are due to unreliability of financial data or inaccuracies contained therein, therefore before taking any decision on the basis of ratio analysis, their reliability must be ensured. Similarly, while doing the inter - firm comparison, the variations may be due to different technologies or degree of risk in those units. 4 5. So it is necessary to make certain that business units or items to be examined are in fact the comparable ones. It must be mentioned here that if the ratios are used to evaluate Operating performance, these should exclude extra ordinary items because these are regarded as non- recurring items that do not reflect normal performance. Ratio analysis is the systematic process of determining and interpreting the numerical relationship of various pair of items derived from the financial statements of a business. Absolute figures do not convey much tangible meaning and is not meaningful while comparing the performance of one business with the other. It is very important that the base (or denominator) selected for each ratio is relevant with the numerator. The two must be such that one is closely connected with and is influenced by the other. USES AND ADVANTAGES OF RATIO ANALYSIS Ratio analysis is the most powerful tools in financial analysis. It is used as a tool to analyze and interpret the financial health of an enterprise. The use of ratios is not confined to financial managers only. The suppliers of goods on credit, banks, financial institutions, shareholders and managers all make use of ratio as tools in evaluating the financial position and performance of a firm for granting credit or providing loans to the firm. With the use of ratio analysis one can measure the financial conditions of a firm and can indicate whether the condition is strong, good, questionable or poor. Managers can draw valuable conclusions as the ratio analysis. ADVANTAGES Helps in decision making. Helps in financial forecasting and planning. Helps in communicating financial strengths and Weaknesses, and 5 6. Helps in co-ordination and control. CHAPTER-II PROFILE OF THE COMPANY 2.1 INDUSTRY PROFILE Construction industry in India is one of the rapidly growing sectors and contributes significantly to the Nations economy .The sector is likely to record higher growth in the coming years. India has construction capabilities in the areas of buildings, infrastructure development and highways projects. The growth of construction industry provides impetus to other manufacturing sectors like cement, iron and steel, power, chemicals, etc., NATURE OF THE INDUSTRY Houses, apartments, factories, offices, schools, roads, and bridges are only some of the products of the construction industry. This industrys activities include the building of new structures as well as additions and modifications to existing ones. The industry also includes maintenance, repair, and improvements on these structures. The construction industry is divided into three major segments. Constructions of buildings contractors, general contractors, build residential, industrial, commercial, and other buildings. Heavy and civil engineering construction contractors build sewers, roads, highways, bridges, tunnels, and other projects. Specialty trade contractors perform specialized activities related to construction such as carpentry, painting, plumbing, and electrical work. Specialty trade contractors usually do the work of only one trade, such as painting, carpentry, or electrical work, or of two or more closely related trades, such as plumbing and heating. 6 7. WORKING CONDITIONS Most employees in this industry work full time, and many work over 40 hours a week. Construction workers may sometimes work evenings, weekends, and holidays to finish a job or take care of an emergency. Construction workers, who work outdoors, often must contend with the weather. Rain or wind may halt construction work, causing workers to go home or not report to work. Workers in this industry need physical stamina because the work frequently requires prolonged standing, bending, stooping, and working in cramped quarters. They also may be required to lift and carry heavy objects. Exposure to weather is common because much of the work is done outside or in partially enclosed structures. Construction workers often work with potentially dangerous tools and equipment amidst a clutter of building materials; some work on temporary scaffolding or at great heights and in bad weather. Consequently, they are more prone to injuries than are workers in other jobs. Employers increasingly emphasize safe working conditions and work habits that reduce the risk of injuries. To avoid injury, employees wear safety clothing, such as gloves and hardhats, and devices to protect their eyes, mouth, or hearing, as needed. OCCUPATIONS IN THE INDUSTRY Construction offers a great variety of career opportunities. People with many different talents and educational backgroundsmanagers, clerical workers, engineers, truck drivers, trades workers, and construction helpersfind job opportunities in the construction industry. Most of the workers in construction are construction trades 7 8. workers, which include both skilled and apprentice crafts workers, construction managers, and construction laborers. Most construction trades workers are classified as either structural, finishing, or mechanical workers, with some Performing activities of more than one type. Structural workers build the main internal and external framework of a structure and can include carpenters; construction equipment operator; brick masons, block masons, and stonemasons; cement masons and concrete finishers; and structural and reinforcing iron and metal workers. Finishing workers perform the tasks that give a structure its final appearance and may include carpenters; drywall and ceiling tile installers; plasterers and stucco masons; segmental pavers; terrazzo workers; painters and paperhangers; glaziers; roofers; carpet, floor, and tile installers and finishers; and insulation workers. Mechanical workers install the equipment and material for basic building operations and may include pipe layers, plumbers, pipe fitters, and steamfitters; electricians; sheet metal workers; and heating, air-conditioning, and refrigeration mechanics and installers. TRAINING AND ADVANCEMENT Persons can enter the construction industry through a variety of educational and training backgrounds. Those entering construction out of high school usually start as laborers, helpers, or apprentices. While, some laborers and helpers can learn their job in a few days, the skills required for many of the trades worker jobs take years to learn and are usually learned through some combination of classroom instruction and on-the-job training. In a few cases, skills can be learned entirely through informal on-the-job training, but the more education received, generally the more skilled workers become. Skilled 8 9. workers such as carpenters, bricklayers, plumbers, and other construction trade specialists most often get their formal instruction by attending a local technical or trade school or through an apprenticeship, or other employer-provided training program. Safety training is also required for most jobs and English skills are essential for workers to advance within their trade. Laborers and helpers advance to the more skilled trade occupations by acquiring experience and skill in various phases of the craft. As they demonstrate their ability to perform tasks they are assigned, they move to progressively more challenging work. As they broaden their skills, they are allowed to work more independently, and responsibilities and earnings increase. They may qualify for jobs in related, more highly skilled occupations. For example, after several years of experience, painters helpers may become skilled painters. To develop their skills further, construction trades workers can work on different projects, such as housing developments, office and industrial buildings, or road construction. Flexibility and a willingness to adopt new techniques, as well as the ability to get along with people, are essential for advancement. Those who are skilled in all facets of the trade and who show good leadership qualities may be promoted to supervisor or construction manager. Construction managers may advance to superintendent of larger projects or go into the business side of construction. Some go into business for themselves as contractors. Outside of the construction industry, skilled trades workers may transfer to jobs such as construction building inspector, purchasing agent, sales representative for building supply companies, or technical or vocational school instructor. In order to advance to a management position, additional education and training is recommended. Opportunities for workers to form their own firms are better in construction than in many 9 10. other industries. Construction workers need only a moderate financial investment to become contractors and they can run their businesses from their homes, hiring additional construction workers only as needed for specific projects. EARNINGS Earnings in construction are higher than the average for all industries. In general, the higher skilled trades workers, such as electricians and plumbers, get paid more than less skilled trades workers, laborers, and helpers. Earnings also vary by the workers education and experience, type of work, the complexity of the construction project, and geographic location. Earnings of construction workers are often affected when poor weather prevents them from working, because they usually do not get paid if they do not work. Traditionally, winter is the slack period for construction activity, especially in colder parts of the country, but there is a trend toward more year-round construction even in colder areas. Construction trades are dependent on one another to complete specific parts of a projectespecially on large projectsso work delays in one trade completing its work can delay or stop the work of another trade. 2.2 COMPANY PROFILE HISTORY OF THE COMPANY ECCI A renowned name in the construction field of History for more than four decades. Its track record in the construction field is a string of landmark structures constructed by the company exhibits eloquent evidence of versatile capabilities e.g. Dams, Bridges, Flyovers, Roads, Water Works, Irrigation and Canals, Power Plants, 10 11. Industrial Structures, Commercial Complexes, Fabrications, Sub-Stations, Transmission lines etc. GLARING & EYECATCHING MEGA PROJECTS COMPLETED ANNA FLYOVER, CHENNAI MIT GATE, CHROMEPET, CHENNAI GENERAL HOSPITAL, CHENNAI VALLUVAR KOTTAM, CHENNAI CMDA TOWER, CHENNAI BHAVANI KATTALI BARRAGE CHURCH AT THIRUVANNAMALAI MOSQUE AT KILAKARAI MA CHITAMBARAM STADIUM, CHENNAI ECCI INFO PARK, CHENNAI TINDIVANAM FLYOVER BENNIGANA HALLI FLYOVER, BANGALORE RICHMOND CIRCLE FLYOVER, BANGALORE MADIWALA FLYOVER, BANGALORE LINGARAJAPURAM BRIDGE, BANGALORE BANASWADI BRIDGE, BANGALORE OTIS FACTORY, BANGALORE ASHOK LEYLAND FACTORY, HOSUR DENSO KIRLOSKAR FACTORY, BANGALORE DIAMOND DISTRICT, BANGALORE THE ESTATE, BANGALORE PLATINUM CITY, BANGALORE GOLF VIEW HOMES, BANGALORE 11 12. SOTHUPARAI DAM MORDHANA DAM ECCI delivers Quality Construction and to the entire satisfaction of clients who have come back with repeat orders Clients SRF, Manali & PATNI Computers, Siruseri. ECCI proudly says that they posses well groomed engineering expertise, highly motivated & dedicated workforce. Amongst all, it is an ISO 9001-2000 certified organization. GROUP VISION AND MISSON Mission To design, build and market residential and commercial complexes of international quality. They wish to leave no stone unturned to fulfill the dreams of their customers. They are committed to achieving new landmarks in property development - not only in India, but also across the globe. Vision Tomorrow where the world will see them as the most trusted and reputed company in the Real estate business in India and overseas. QUALITY POLICY OF THE COMPANY Quality tops the list of priorities for ECCI while executing any project. ECCI firmly believes that quality is the sole parameter for measuring ones reputation. ECCI as earned for itself many garlands from a large number of clients through its workmanship par excellence combined with quality execution of its project, in time. ECCI has earned BVQI and UKAS certificate of approval for its excellent Quality management systems and has been assessed and found to be in accordance with requirements of the Quality standards. 12 13. To deliver high quality construction services to meet customer requirements following safe practices. To strive to enhance customer satisfaction through continual improvements in our quality management system. To meet applicable statutory and regulatory requirements. The Flagship Company of the Buharia Group, ECCI stands as a leading player in the construction industry today. The company was established in 1962 by Mr B S Abdul Rahman, he is also the Founder of ETA-ASCON the US$ 1.5 billion organization headquarted in Dubai with offices in over 17 countries, Mr. Rahman brings to ECCI a global world view and the benefit of international perspectives. The ECCI Group Backing ECCIS strengths is the RS 2500 crore Buharia group, with several group of companies and wide ranging activities in diverse fields. The following are the ECCI group of companies. Coastal Energy Pvt. Ltd, which trades mainly in coal. Chennai Citi Centre Holdings (P) Ltd, which deals with property development. Transcar India (P) Ltd and Trans Tempo (P)Ltd, dealers in Mercedes Benz and Bajaj Tempo. Buharia Estate and Company which deals with property development and management and coffee growing. ETA- Ascon Buharia Holdings Pvt. Ltd, which is the holding company for the group. ETA constructions 13 14. West Asia Maritime Ltd, which is a shipping company. East Coast Consultants and Infrastructure Limited, which is a 100% subsidiary of ECCI-Karur BOT project. Educational Institutions and Trust B.S Abdur Rahman Crescent Engineering College. TBAK College for Women Crescent School for Boys Crescent School for Girls Seethakathi Trust Enhancing Technology with People Skills Beyond technological expertise, What makes a difference in ECCI project is a highly motivated and dedicated workforce that ensures quality in every aspect from project management to actual construction and delivery, It is also an ISO 9001: 2000 certified company. ECCIS engineering expertise is complimented by several strategic tie ups with leading global consultants in the field of design and specialized in structural engineering services, providing clients with total solutions and the benefit of global trends in construction and technology. Bridges and Flyovers ECCI rises to the challenge of erecting heavy-duty structures that withstand constant dynamic loads day after day, year after year with the promise of safety. A variety of bridge projects have been executed with experience in Rivers, Road and Rail over Bridges, which requires in-depth skills in structural engineering and necessary expertise for longer spans and multilane structures. Some Challenging Projects Richmond Circle Flyover- Bangalore Anna Flyover- Chennai 14 15. Benniganahalli Flyover- Bangalore Bridge at Vaniyambadi Madiwala Flyover- Bangalore Thindivanam Flyover Lingarajapuram Bridge- Bangalore Banaswadi Bridge- Bangalore Cross Cut Road Flyover- Coimbatore. Industrial Structures Numerous projects have been executed with comprehensive technical knowledge in a variety of fields which involves in house engineering expertise in specialist areas like automobile factories, factories for furnitures, containers, salt, shrimp-feed mills, acid plants, spinning mills, cargo projects. Some Challenging Projects OTIS factory- Bangalore Ashok Leyland- Hosur Denso Kirloskar factory- Bangalore Shrimp Feed Mills- Bangalore DCM Hyundai factory- Chennai Indian furniture factory- Chennai High Rise Buildings 15 16. ECCI rises to the challenge with some of the finest examples of modern construction technology, which requires meticulous planning, and the ability to combine precision with great finishes. Some Challenging Projects GH Tower II Hospital, Chennai IT Park Patni Phase I, Chennai CMDA Tower II, Chennai Mahtma Gandhi Dental College, Pondicherry Koyembedu Flower and Vegetable Market Apollo Hospitals, Chennai Hotel Park Sheraton, Chennai Fabrication Power and Industry ECCI demonstrates its competence in power projects that demand certain capability, infrastructure and skill. The Multicircuit line for KCB in Kerala, Substation/Terminal Bay in Maddur at Karnataka, Palaya Substation in Hollegal are some of its challenging projects. Water Supply and Sewerage Numerous projects in sewage, water treatment, water supply have been executed in this field. Some of its projects are Mannur water supply project, Chitradurga water distribution project, Salem water supply project, SIPCOT- Chennai, etc.. Dams, Barrages and Canals Projects that test the mettle of any construction company is working against odds, in hostile, in hospitable terrain, defying mountains and rivers. Several irrigation and 16 17. thermal projects have been executed which requires sound understanding of technical requirements, necessary infrastructure and equipments. Some Challenging Project Sothuparai Dam Valliyur Dam Mordhana Dam Bhavani Kattalai Barrage project Sivagangai Left & Right Main Canal Designer Buildings and Roads Where imagination adds new dimensions to concrete is creativity. A number of designer projects have been executed which involves receptiveness to new ideas, necessary technical competence and the ability to adapt to new ideas, necessary technical competence and the ability to adapt to new technology. Some Challenging Projects Valluvar Kottam- Chennai M.A.C. Cricket Stadium Chennai Light House- Chennai Mosque at Kilakarai Church at Thiruvanamalai The Agamalai Hill road project and the Outer Ring Road- Bangalore are some the challenging projects in roads sector. 17 18. Reputed Clients CPCL SRF HAL IBC Group IT Express Way Ltd Southern Railway South Western Railway CMDA TWAD BDA PWD CHAPTER-III REVIEW OF LITERATURE Title: Sachiko Corporation: A Case in International Financial Statement Analysis. Authors: Gujarathi, MahendraR.1 Source: Issues in Accounting Abstract: Sachiko is a comprehensive case on financial statement analysis within an international context. Upon reviewing the financial statements and relevant footnotes of Sachiko Corporation, a Japanese company, and U.S.-based Radiance Inc., you are required to restate the two companies' financials to evaluate whether the revised ratios 18 19. are consistent with each company's strategy and business environment and, subsequently, to recommend the better investment prospect. The case provides a forum for you to examine the role of environmental differences (cultural, institutional, business, and financial reporting) in interpreting the risk and profitability ratios in an international context. [ABSTRACT FROM AUTHOR] Copyright of Issues in Accounting Education is the property of American Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material. Title: A Systematic Approach to Contextual Financial Analysis in Small Business Asset-Based Lending. Authors: Scott, Stan1 Source: Secured Lender Abstract: The article provides information on a systematic approach to contextual financial analysis in small business asset-based lending. The objective of financial statement analysis is to interpret results in a business environment. Key factors to consider in evaluating management impact on financial result include the company's attempt to distinguish itself from competition. One example of external environmental risk factors is the current economic state and trend. 19 20. Title: Trends Affecting Next Generation of Accountants. Authors: Marshall, Jeffrey Heffes, Ellen M. Source: Financial Executive Abstract: The article discusses research pertaining to trends affecting the next generation of accountants. Corporate governance regulations and the increased emphasis on greater transparency within public, private, and non-profit organizations have altered the environment for accounting and finance professionals. Key training areas in accounting are identified. They include forensic accounting, internal auditing, financial statement analysis, and risk management. The certified public accountant (CPA) credential is a key requirement for advancement in the industry. Title: Application and Assessment of an Ethics Presentation for Accounting and Business Classes. Authors: Smith, L. Murphy1 Lmsmith@tamu.eduSmith, Katherine T.2 Mulig, Elizabeth Vallery3 oyealiz@yahoo.com Source: Journal of Business Ethics; Oct2005, Vol. 61 Issue 2, p153-164. Abstract: This paper describes a presentation on ethics for accounting and business students. In 2001 and 2002, major corporate failures such as Enron and Worldcom, combined with questionable accounting practices, made ethics a paramount concern to persons working in business and accounting. While financial statement analysis and regulatory requirements are important technical topics, the issue of ethics provides faculty a unique and very appropriate setting to discuss deeper truths about doing business and living life well. This paper briefly describes the development and 20 21. assessment of one approach to presenting ethics built around a computerized slide show (PowerPoint). The goal of the presentation is to increase students' understanding of the essential role of ethics to accounting and business. Following the presentation, students indicated a heightened recognition of the importance of ethics. Educators should do all that they can to encourage students to do the "right" thing, even in difficult circumstances. This encouragement may serve them well in school and later in their careers. [ABSTRACT FROM AUTHOR] Copyright of Journal of Business Ethics is the property of Springer Science & Business Media B.V. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts Title: A Systematic Approach to Contextual Financial Analysis in Small Business Asset-Based Lending. Authors: Scott, Stan1 Source: Secured Lender; Nov/Dec2005, Vol. 61 Issue 6, p104-113, 6p Abstract: The article provides information on a systematic approach to contextual financial analysis in small business asset-based lending. The objective of financial statement analysis is to interpret results in a business environment. Key factors to consider in evaluating management impact on financial result include the company's attempt to distinguish itself from competition. One example of external environmental risk factors is the current economic state and trend. 21 22. Title: Are M.B.A. Students a Good Proxy for Nonprofessional Investors? Images go to all 12 images Authors: Elliott, W. Brooke1Hodge, Frank D.2Kennedy, Jane Jollineau2Pronk, Maarten3 Source: Accounting Review; Jan2007, Vol. 82 Issue 1, p139-168, 30p, 7 charts Abstract: We investigate a key assumption underlying much of the experimental research in financial accounting that graduate business students are a good proxy for nonprofessional investors. To conduct our investigation, we categorize recent experimental studies in financial accounting, based on the relative level of integrative complexity inherent in each study's task. We then conduct experiments using two tasks, one that is relatively low in integrative complexity and one that is relatively high in integrative complexity, and compare the responses of two groups of M.B.A. students and nonprofessional investors. Our results suggest that using M.B.A. students as a proxy for nonprofessional investors is a valid methodological choice, provided researchers give careful consideration to aligning a task's integrative complexity with the appropriate level of M.B.A. student. M.B.A. students who have completed their core M.B.A. courses and are enrolled in or have completed a financial statement analysis course are a good proxy for nonprofessional investors in tasks that are relatively low in integrative complexity. Though less definitive, the majority of our tests also suggest that these students are a good proxy for nonprofessional investors in tasks that are relatively high in integrative complexity. However, care must be taken when using students in the first-year core financial accounting course. In tasks that are relatively low in integrative complexity, these students perform similarly to nonprofessional investors except when they are asked 22 23. to make an investment decision. In tasks that are relatively high in integrative complexity, these students acquire information similarly to nonprofessional investors, but they do not appear to integrate the information in a similar manner. [ABSTRACT FROM AUTHOR] Copyright of Accounting Review is the property of American Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts) Title: Analyzing The Financial Condition Of The City Of Corona, California: Using A Case To Teach The Gasb 34 Government-Wide Financial Statements. Authors: Chaney, Barbara A.1 Source: Journal of Public Budgeting, Accounting & Financial Management; Summer2005, Vol. 17 Issue 2, p180-201, 22p, 4 charts Abstract: A financial statement analysis case uses the government-wide financial statements of Corona, CA to teach students about the financial overview provided in the new governmental financial reporting model. Educators are struggling to incorporate the new model in their governmental accounting curricula. The case analysis is beneficial to students in three ways. First, the active, case learning approach of using a real world example complements existing pedagogical materials for better mastery of the new 23 24. reporting model. Second, the case approach of using ambiguity and alternative solutions promotes the development of analytical skills. Third, the written requirement and class discussion promotes the development of communication skills. [ABSTRACT FROM AUTHOR] Copyright of Journal of Public Budgeting, Accounting & Financial Management is the property of PrAcademics Press and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts) Title: Reporting Earnings at Summer Technology-- A Capstone Case Involving Intermediate Accounting Topics. Authors: Kohlbeck, Mark1 Source: Issues in Accounting Education; May2005, Vol. 20 Issue 2, p195-212, 18p Abstract: Summer Technology, Inc. (the Company) is a fast-growing high-technology firm and is facing many pressures, including those related to financial reporting. Financial analysts, however, are optimistic about the future of the Company. The firm is about to report its first annual profit, and the preliminary unreported results are just short of the analysts' consensus annual earnings forecast. This case requires financial analysis to evaluate a number of judgments involved in preparing financial statements and to prepare a recommendation to management with respect to reported earnings per share. The cases learning objectives are: (1) to increase understanding and exposure to the integration of financial reporting decisions with financial statement analysis, (2) to help 24 25. students understand how business decisions impact reporting, (3) to demonstrate how decisions may be influenced by pressures to manage earnings and produce desirable financial results, and (4) to raise ethical issues in an accounting setting. [ABSTRACT FROM AUTHOR] Copyright of Issues in Accounting Education is the property of American Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts) Title: Divorced Marriage Between Ethics And Business Leads To Corporate Misgovernance: Focus On Moral Value-Based Financial Statement Analysis. Authors: Swamy, M. R. Kumara1 Source: Journal of Financial Management & Analysis; Jul-Dec2004, Vol. 17 Issue 2, p29-40, 12p, 1 chart Abstract: Though countries like the U.S.A., India and Nigeria have set their mottos based on high moral values like "In God We Trust"; "Truth Alone Wins"; "Unity ; Faith: Peace & Progress", it appears from experiences that to-day's governance (Man- Management) has been degraded to such an extent that moral bankruptcy has become an integral part of day to day business activities - - as evidenced by the presented case studies of the collapsed/bankrupt Enron Corporation (U.S.A.) and Johnson Matthey Bank (U.K.) - - where righteousness is at a discount (tampering, manipulation/falsification of accounts and frauds are rampant); truth has become rare (trickery is spreading and integrity is vanishing); and selfishness is growing alarmingly in all spheres of human 25 26. activity. There is an urgent need to resort to the use of the proposed new and unique approach to financial statement analysis based on moral values to ensure value-based (God-ment) management of organizations. [ABSTRACT FROM AUTHOR] Copyright of Journal of Financial Management & Analysis is the property of Om Sai Ram Center for Financial Management Research and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts) Title: Skills development, motivation and learning in financial statement analysis: an evaluation of alternative types of case studies. Authors: Arquero Montao, Jos Luis1 arquero@us.esJimnez Cardoso, Sergio Manuel1Joyce, John2 Source: Accounting Education; Jun2004, Vol. 13 Issue 2, p191-211, 21p, 11 charts, 2 diagrams Abstract: Relevant accounting bodies have questioned the way accounting education should be redirected. They concluded that communication, group working and problem- solving skills appear to be at least as important as 'technical' knowledge. The use of case studies is highly recommended for the development of those skills and also for increasing motivation. Improvements in motivation and the practising of non-technical skills facilitate content learning. Traditionally the use of real and complex case studies has not been as widespread as other active educational methods, such as the solving and public presentation of problems or shorter cases. This paper aims to study and compare the influences on content learning, skills development, and students' attitudes when 26 27. studying Financial Statement Analysis due to changing the previously successful pedagogical strategy of using short cases to one that uses complex cases. [ABSTRACT FROM AUTHOR] Copyright of Accounting Education is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts) Title: Financial Statement Analysis: A Global Perspective (Book). Authors: Bloom, Robert1 Source: Issues in Accounting Education; May2004, Vol. 19 Issue 2, p264-265, 2p Abstract: Reviews the book, "Financial Statement Analysis: A Global Perspective," by Thomas R. Robinson, Paul Munter, and Julia Grant. Title: Financial Statement Analysis (Book). Authors: Stokes, Leonard E.1 Source: Issues in Accounting Education; May2004, Vol. 19 Issue 2, p264-264, 0p Abstract: Reviews the book, "Financial Statement Analysis," by John J. Wild, K. R. Subramanian, and Robert R. Halsey. Title: Financial Statement Analysis: A Valuation Approach (Book). Authors: Gruber, Robert Source: Issues in Accounting Education; Nov2003, Vol. 18 Issue 4, p465-466, 2p Abstract: 27 28. Reviews the book "Financial Statement Analysis: A Valuation Approach," by Leonard Soffer and Robin Soffer. Title: Financial Statement Analysis and Security Valuation (Book) Authors: Walker, Martin Source: European Accounting Review; Dec2002, Vol. 11 Issue 4, p813-817, 5p Abstract: Reviews the book 'Financial Statement Analysis and Security Valuation, by Stephen H. Penman. CHAPTER-IV RESEARCH METHODOLOGY 4.1 RESEARCH DESIGN: The descriptive from of research is adopted for study. The major purpose of descriptive research is description of state of affairs of the institution as it exits at present. The nature and characteristics of the financial statements of EAST COAST CONSTRUCTION INDUSTRIES LTD have been described in this study. 4.2 OBJECTIVES OF THE STUDY: To study about the over all analysis financial performance of the company. To study liquidity, profitability, solvency turn over of the company. To study about the operational efficiency of the company. To study about the important inter-relationship of the company. 28 29. 4.3 NATURE OF DATA: The data required for the study has been collected from secondary source. The relevant figures are taken from annual reports, journals and contents gathered from internet. 4.4 METHODS OF DATA COLLECTION: This study is based on the annual report of EAST COAST CONSTRUCTION INDUSTRIES LTD. Hence the information related to, profitability, short term and long term solvency and turnover are very required for attaining the objectives of the present study. 4.5 TOOLS APPLIED: To have a meaningful analysis and interpretation of various data collected the following tools were made of, for this study. Comparative statement Common-size statement Trend analysis Ratio analysis 4.6 LIMITATION OF THE STUDY: The analysis was made with the help of the secondary data collected from the company. All the limitations of ratio analysis, common-size statement, comparative statements, and trend analysis and interpret the data applicable to this study. 29 30. Our analysis is based upon monetary information and non-monetary factors are ignored. CHAPTER-IV DATA ANALYSIS AND INTERPRETATION TABLE NO: 5.1 COMPARATIVE INCOME STATEMENT COMPARATIVE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2004-31.03.2005 Particulars 31.03.2005 31.03.2004 increase or decrease in R.S(in Mn) increase or decrease in % (A)source of fund 1.sharesholders funds share capital 70000000 70000000 0 0.00 reserves & surplus 223178683.6 243240018.5 -20061334.89 -8.25 2.Loan funds 0 secured loan 84299603.37 132568219 -48268615.64 -36.41 unsecured loan 1715087.82 1715087.82 0 0.00 3.Deferred tax liability 62554754 0 62554754 0.00 TOTAL 441748128.8 447523325.4 -5775196.53 -1.29 ((b) application of fund 0 1.Fixed assets 0 gross block 240151754.5 218041577.8 22110176.72 10.14 less: depreciation 117457612 104474386 12983226 12.43 net block 122694142.5 113567191.8 9126950.72 8.04 capital work in progress 0 0.00 2.Invesments 113634101 55995500 57638601 102.93 3. current asset, loans &advance Inventory 47437704.76 47879717.25 -442012.49 -0.92 30 31. Sundry debtors 282380369.9 285542053.6 -3161683.68 -1.11 cash and bank balances 29719195.42 26714242.61 3004952.81 11.25 Loans and advances 115795258.9 169595665 -53800406.01 -31.72 (a) 475332529 529731678.4 -54399149.37 -10.27 Less: current liabilities &provisions Liabilities 253323205.7 241951716.8 11371488.88 4.70 Provisions 16635938 9889078 6746860 68.23 (b) 269959143.7 251840794.8 18118348.88 7.19 Net current assets (a)-(b) 205373385.3 277890883.6 -72517498.25 -26.10 4.Miscellaneous expenditure 46500 69750 -23250 -33.33 Total 441748128.8 447523325 -5775196.17 -1.29 COMPARATIVE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2005-31.03.2006 particulars 31.03.2006 31.03.2005 increase or decrease in R.S (in Mn) increase or decrease in % (A)source of fund 1.sharesholders funds share capital 91000000 70000000 21000000 30.00 reserves & surplus 252126134. 6 223178683. 6 28947450.95 12.97 2.Loan funds secured loan 120115278. 8 84299603.3 7 35815675.42 42.49 unsecured loan 1715087.82 1715087.82 0 0.00 3.Deferred tax liability 70020162 62554754 7465408 11.93 TOTAL 534976663. 2 441748128. 8 93228534.37 21.10 (B) Application of Fund 1.Fixed assets gross block 259751001 240151754. 5 19599246.5 8.16 less: depreciation 128362564. 7 117457612 10904952.67 9.28 net block 131388436. 3 122694142. 5 8694293.83 7.09 capital work in progress 0 0.00 2.Invesments 117465770 113634101 3831669 3.37 3. current asset, loans &advance Inventory 90952549.4 3 47437704.7 6 43514844.67 91.73 Sundry debtors 308616846. 9 282380369. 9 26236477.05 9.29 cash and bank balances 30871751.6 9 29719195.4 2 1152556.27 3.88 31 32. Loans and advances 184958278. 4 115795258. 9 69163019.49 59.73 (a) 615399426. 5 475332529 140066897.5 29.47 Less: current liabilities &provisions Liabilities 311967132 253323205. 7 58643926.34 23.15 Provisions 17333087 16635938 697149 4.19 (b) 329300219. 6 269959143. 7 59341075.94 21.98 Net current assets (a)-(b) 286099206. 9 205373385. 3 80725821.54 39.31 4.Miscellaneous expenditure 23250 46500 -23250 -50.00 Total 534976663. 2 441748128. 8 93228534.37 21.10 COMPARATIVE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2006-31.03.2007 particulars 31.03.2007 31.03.2006 increase or decrease in R.S(in Mn) increase or decrease in % (A)source of fund 1.sharesholders funds share capital 91000000 91000000 0 0.00 reserves & surplus 320799823. 7 252126134. 6 68673689.11 27.24 2.Loan funds secured loan 206174658. 3 120115278. 8 86059379.54 71.65 unsecured loan 1715087.82 1715087.82 0 0.00 3.Deferred tax liability 72530307 70020162 2510145 3.58 TOTAL 692219876. 9 534976663. 2 157243213.7 29.39 (B) Application of fund 1.Fixed assets 0 gross block 276294105. 1 259751001 16543104.07 6.37 less: depreciation 142102629. 1 128362564. 7 13740064.45 10.70 net block 134191476 131388436. 3 2803039.62 2.13 2.Invesments 117522770 117465770 57000 0.05 3. current asset, loans &advance Inventory 171120709 90952549.4 3 80168159.58 88.14 Sundry debtors 393555597. 308616846. 84938750.55 27.52 32 33. 5 9 cash and bank balances 43356997.5 9 30871751.6 9 12485245.9 40.44 Loans and advances 220825583. 5 184958278. 4 35867305.1 19.39 (a) 828858887. 6 615399426. 5 213459461.1 34.69 Less: current liabilities &provisions Liabilities 372952383. 2 311967132 60985251.18 19.55 Provisions 15400873.5 2 17333087 -1932213.48 -11.15 (b) 388353256. 7 329300219. 6 59053037.1 17.93 Net current assets (a)-(b) 440505630. 9 286099206. 9 154406424 53.97 4.Miscellaneous expenditure 0 23250 -23250 -100.00 Total 692219876. 9 534976663. 2 157243213.7 29.39 COMPARATIVE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2007-31.03.2008 particulars 31.03.2008 31.03.2007 increase or decrease in R.S(in Mn) increase or decrease in % (A)source of fund 1.sharesholders funds share capital 91000000 91000000 0 0.00 reserves & surplus 372775782 320799823.7 51975958.3 16.20 share capital suspense account 3963720 0 3963720 0.00 share application money allotment 192177284 0 192177284 0.00 2.Loan funds 0 secured loan 526579745 206174658.3 320405086.7 155.40 unsecured loan 99282.77 1715087.82 -1615805.05 -94.21 3.Deferred tax liability 53724145.37 72530307 -18806161.63 -25.93 TOTAL 1240319960 692219876.9 548100083.2 79.18 (b) Application of fund 0 1.Fixed assets 0 gross block 458185611.9 276294105.1 181891506.9 65.83 less: depreciation 172734955.5 142102629.1 30632326.32 21.56 net block 285450656.5 134191476 151259180.5 112.72 capital work in progress 13694616.12 0 13694616.12 0.00 2.Invesments 299142910 117522770 181620140 154.54 3. current asset, loans &advance 0 Inventory 346152220.3 171120709 175031511.3 102.29 33 34. Sundry debtors 562767157.6 393555597.5 169211560.1 43.00 cash and bank balances 78403517.45 43356997.59 35046519.86 80.83 Loans and advances 376392904.6 220825583.5 155567321 70.45 (a) 1363715800 828858887.6 534856912.3 64.53 Less: current liabilities &provisions Liabilities 705540484.1 372952383.2 332588100.9 89.18 Provisions 16143538.39 15400873.52 742664.87 4.82 (b) 721684022.5 388353256.7 333330765.8 85.83 Net current assets (a)-(b) 642031777.4 440505630.9 201526146.5 45.75 4.Miscellaneous expenditure 0 0 0 0.00 Total 1240319960 692219876.9 548100083.2 79.18 COMPARATIVE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2008-31.03.2009 particulars 31.03.2009 31.03.2008 increase or decrease in R.S(in Mn) increase or decrease in % (A)source of fund 1.sharesholders funds share capital 288422670 91000000 197422670 216.95 reserves & surplus 452910284.9 372775782 80134502.93 21.50 share capital suspense account 0 3963720 -3963720 -100.00 share application money allotm 8820000 192177284.9 -183357284.9 -95.41 2.Loan funds secured loan 666122614.6 526579745 139542869.6 26.50 unsecured loan 99282.77 99282.77 0 0.00 3.Deferred tax liability 73024145.37 53724145.37 19300000 35.92 TOTAL 1489398998 1240319960 249079037.6 20.08 (b) Application of fund 1.Fixed assets gross block 625277041.4 458485611.9 166791429.4 36.38 less: depreciation 228676478.7 172734955.5 55941523.25 32.39 net block 396600562.7 285450656.5 111149906.2 38.94 capital work in progress 6740375.62 13694616.12 -6954240.5 -50.78 2.Invesments 251796910 299142910 -47346000 -15.83 3. current asset, loans &advance Inventory 436488740.9 346152220.3 90336520.58 26.10 Sundry debtors 811838511.7 562767157.6 249071354.2 44.26 cash and bank balances 135587196.7 78403517.45 57183679.24 72.94 Loans and advances 538751165.4 376392904.6 162358260.9 43.14 (a) 1922665615 1363715800 558949814.8 40.99 Less: current liabilities &provisions Liabilities 1058043042 705540484.1 352502557.8 49.96 Provisions 30361423.5 16143538.39 14217885.11 88.07 (b) 1088404465 721684022.5 366720442.9 50.81 Net current assets (a)-(b) 834261149.4 642031777.4 192229372 29.94 4.Miscellaneous expenditure 0 0 0 0.00 34 35. Total 1489398998 1240319960 249079037.6 20.08 Interpretation of Comparative Balance Sheet for the Period of Five Years. While comparing the balance sheet it reveals that 1. The capital has no margin in the 2002-03 after that increase in 2003-04, another two years no margin, 216.95% in 2006-07. 2. The reserves & surplus has during the year 2002-03 decreased 8.25 percentage, 27 percentage in 2003-04, 12.97% in the year 2003-04, as 27.24 %in the year 2004-05, 16.20% in 2005-06, and 21.50% in the year 2006-07. 3. Secured loans by decreased 36.41 % during the year 2002-03, 42.49 % in the year 2003-04, 71.65 % in the 2004-05, 155.40% in the year 2005-06 and 26.50% in the year 2006-07. 4. First three years unsecured loan is decrease but- 94.21 % in the year 2005-06. 5. The fixed asset has 8.04 % during the year 2002-03, 7.09% in the 2003-04, 2.13 % in 2004-05, 112.72% in 2005-06, and 38.94 % in the year 2006-07. 6. The sundry debtors shows as decreased 1.11% in the year 2002-03, 9.29% in 2003-04, 27.52% in 2004-05, 43% in the year 2005-06, and 44.26 % in the year 2006-07. 7. The liabilities shows an higher percentage in 4.70 during the year 2002-03, 23.15% in the year 2003-04, 19.55% in 2004-05, 89.19 % in 2005-06, and 49.96% in the year 2006-07. 8. The provision has increased to 88.07 % during 2006-2007. 35 36. TABLE NO.5.2 COMPARATIVE INCOME STATEMENT Comparative statement (2004, 2005) 36 37. 37 COMPARITIVE STATEMENT FOR PROFIT & LOSS ACCOUNT AS ON 31-03-2004---31-03-2005 particulars 31.03.2005 31.03.2004 increase or decrease in R.S(in Mn) INCREASE OR DECREASE IN % INCOME contract income 908374426. 5 802683087.5 105691339 13.17 other income 10352119.7 9 8709998.89 1642120.9 18.85 TOTAL (a) 918726546. 3 811393086.5 107333459.7 13.23 EXPENDITURE increase/decrease in stock 442012.49 -20043472.94 20485485.43 -102.21 project expenditure 755558669. 7 690252137 65306532.75 9.46 employee cost 40308914.1 2 35881071.66 4427842.46 12.34 administrative expenses 32209399.7 3 22453615.66 9755784.07 43.45 finance cost 23040010.9 8 29522812.68 -6482801.7 -21.96 depreciation 20271370.1 1 19767617.3 503752.81 2.55 TOTAL (b) 871830377. 2 777833781.3 93996595.82 12.08 NET PROFIT BEFORE TAX and extra -ordinary item (a)-(b) 46896169.1 1 33559305.2 13336863.91 39.74 less: provision for taxation current year tax provision 8183684 4700000 3483684 74.12 deferred tax provision 6754381 0 6754381 0.00 0 PROFIT AFTER TAX but before extra-ordinary item 31958104.1 1 28859305.2 3098798.91 10.74 extra ordinary item 1832016 0 1832016 profit after taxation and extra ordinary item 30126088.1 1 28859305.2 1266782.91 4.39 Profit &loss-surplus b/f 134812590. 5 163853358.3 -29040767.8 -17.72 PROFIT AVAILABLE FOR APPROPRIATION 164938378. 6 192712663.5 -27774284.89 -14.41 APPROPRIATIONS 0 proposed final dividend 2800000 2100000 700000 33.33 tax on dividend 358750 0 358750 0.00 BALANCE taken to b/s 161779628. 6 190612663.5 -28833034.89 -15.13 38. COMPARITIVE STATEMENT FOR PROFIT & LOSS ACCOUNT AS ON 31-03-2005---31-03-2006 particulars 31.03.2006 31.03.2005 increase or decrease in R.S(in Mn) INCREASE OR DECREASE IN % INCOME contract income 830993967.1 908374426. 5 -77380459.4 -8.52 Other income 15279733.79 10352119.7 9 4927614 47.60 TOTAL (a) 846273700.9 918726546. 3 -72452845.4 -7.89 EXPENDITURE 0 increase/decrease in stock -43514844.67 442012.49 -43956857.16 -9944.71 project expenditure 713583386.4 755558669. 7 -41975283.3 -5.56 employee cost 43085727.79 40308914.1 2 2776813.67 6.89 administrative expenses 38393036.82 32209399.7 3 6183637.09 19.20 finance cost 25871789.79 23040010.9 8 2831778.81 12.29 depreciation 19107751.49 20271370.1 1 -1163618.62 -5.74 TOTAL (b) 796526846.9 871830377. 2 -75303530.24 -8.64 0 NET PROFIT BEFORE TAX and extra -ordinary item (a)-(b) 49746853.95 46896169.1 1 2850684.84 6.08 0 less: provision for taxation 0 current year tax provision 10160263 8183684 1976579 24.15 deferred tax provision 7465408 6754381 711027 10.53 0 PROFIT AFTER TAX but before extra-ordinary item 32121182.95 31958104.1 1 163078.84 0.51 extra ordinary item 0 1832016 -1832016 -100.00 0 profit after taxation and extra ordinary item 32121182.95 30126088.1 1 1995094.84 6.62 profit &loss-surplus b/f 161779628.6 134812590. 5 26967038.11 20.00 PROFIT AVAILABLE FOR APPROPRIATION 193900811.5 164938378. 6 28962432.95 17.56 APPROPRIATIONS 0 proposed final dividend 2800000 2800000 0 0.00 Tax on dividend 366828 358750 8078 2.25 proposed dividend on preference share 6,904.00 6904 38 39. BALANCE taken to b/s 190727079.5 161779628. 6 28947450.95 17.89 COMPARITIVE STATEMENT FOR PROFIT & LOSS ACCOUNT AS ON 31-03-2006---31-03-2007 particulars 31.03.2007 31.03.2006 increase or decrease in R.S(in Mn) INCREASE OR DECREASE IN % INCOME contract income 1401367078 830993967.1 570373111.4 68.64 other income 20125092.65 15279733.79 4845358.86 31.71 TOTAL (a) 1421492171 846273700.9 575218470.2 67.97 EXPENDITURE 0 increase/decrease in stock -80168159.58 -43514844.67 -36653314.91 84.23 project expenditure 1249170996 713583386.4 535587609.9 75.06 employee cost 46288462.55 43085727.79 3202734.76 7.43 administrative expenses 64552951.32 38393036.82 26159914.5 68.14 finance cost 38763941.86 25871789.79 12892152.07 49.83 depreciation 19059014.52 19107751.49 -48736.97 -0.26 TOTAL (b) 1337667207 796526846.9 541140360.1 67.94 NET PROFIT BEFORE TAX and extra -ordinary item (a)-(b) 83824964.11 49746853.95 34078110.16 68.50 less: provision for taxation 0 current year tax provision 6575000 10160263 -3585263 -35.29 deferred tax provision 2510145 7465408 -4955263 -66.38 PROFIT AFTER TAX but before extra-ordinary item 32121182.95 -32121182.95 -100.00 extra ordinary item 0 0 0 profit after taxation and extra ordinary item 74739819.11 32121182.95 42618636.16 132.68 Profit &loss-surplus b/f 190727079.5 161779628.6 28947450.95 17.89 PROFIT AVAILABLE FOR APPROPRIATION 265466898.6 193900811.5 71566087.11 36.91 APPROPRIATIONS 0 proposed final dividend 2800000 2800000 0 0.00 tax on dividend 746130 366828 379302 103.40 proposed dividend on preference share 2,520,000.00 6,904.00 2513096 36400.58 BALANCE taken to b/s 259400768.6 190727079.5 68673689.11 36.01 39 40. COMPARITIVE STATEMENT FOR PROFIT & LOSS ACCOUNT AS ON 31-03-2007---31-03-2008 particulars 31.03.2008 31.03.2007 increase or decrease in R.S(in Mn) INCREASE OR DECREASE IN % INCOME sales less return 20300242 0 20300242 0.00 contract income 1698515405 20125092.65 1678390312 8339.79 export sales 673464 0 673464 0.00 other income 36091746.29 20125092.65 15966653.64 79.34 TOTAL (a) 1755580857 1421492171 334088686.3 23.50 EXPENDITURE 0 increase/decrease in stock -168181330.3 -80168159.58 -88013170.74 109.79 project expenditure 1600064469 1249170996 350893472.6 28.09 employee cost 79280137.89 46288462.55 32991675.34 71.27 administrative expenses 95402435.35 64552951.32 30849484.03 47.79 finance cost 58602334.61 38763941.86 19838392.75 51.18 depreciation 32370243.68 19059014.52 13311229.16 69.84 TOTAL (b) 1697538290 1337667207 359871083.1 26.90 0 NET PROFIT BEFORE TAX and extra -ordinary item (a)-(b) 58042567.3 83824964.11 -25782396.81 -30.76 less: provision for taxation 0 current year tax provision 5000000 6575000 -1575000 -23.95 deferred tax provision -2101433 2510145 -4611578 -183.72 fringe benefit tax 1000000 0 1000000 0.00 0 PROFIT AFTER TAX but before extra-ordinary item 54144000.3 74739819.11 -20595818.81 -27.56 Extra ordinary item 0 0 0 profit after taxation and extra ordinary item 0 profit&loss-surplus b/f 231389026.6 190727079.5 40661947.11 21.32 PROFIT AVAILABLE FOR APPROPRIATION 285533026.9 265466898.6 20066128.3 7.56 APPROPRIATIONS 0 propsed final dividend 3117098 2800000 317098 11.32 tax on dividend 790603 746130 44473 5.96 proposed dividend on preference share 2,520,000.00 2,520,000.00 0 0.00 BALANCE taken to b/s 279105325.9 259400768.6 19704557.3 7.60 40 41. COMPARITIVE STATEMENT FOR PROFIT & LOSS ACCOUNT AS ON 31-03-2008---31-03-2009 particulars 31.03.2009 31.03.2008 increase or decrease in R.S(in Mn) INCREASE OR DECREASE IN % INCOME sales 10891191 20300242 -9409051 -46.35 contract income 3026523126 1698515405 1328007721 78.19 export sales 967565 673464 294101 43.67 other income 59041989.7 36091746.29 22950243.41 63.59 TOTAL (a) 3097423871 1755580857 1341843014 76.43 EXPENDITURE 0 increase/decrease in stock -90336520.58 -168181330.3 77844809.74 -46.29 project expenditure 2626443991 1600064469 1026379522 64.15 employee cost 119204446 79280137.89 39924308.1 50.36 administrative expenses 156557422.6 95402435.35 61154987.28 64.10 finance cost 124130736.4 58602334.61 65528401.83 111.82 depreciation 58067683.13 32370243.68 25697439.45 79.39 TOTAL (b) 2994067759 1697538290 1296529469 76.38 0 NET PROFIT BEFORE TAX and extra -ordinary item (a)-(b) 103356112.7 58042567.3 45313545.38 78.07 0 less: provision for taxation 0 current year tax provision 10000000 5000000 5000000 100.00 deferred tax provision 19300000 -2101433 21401433 -1018.42 fringe benefit tax 1800000 1000000 800000 80.00 0 PROFIT AFTER TAX 72256112.68 54144000.3 18112112.38 33.45 profit& loss- surplus brought forward 279105325.9 231389026.9 47716299 20.62 PROFIT AVAILABLE FOR APPROPRIATION 351361438.6 285533026.9 65828411.68 23.05 0 APPROPRIATIONS 0 proposed final dividend 3136907 3117098 19809 0.64 Tax on dividend 1002752 790603 212149 26.83 proposed dividend on preference share 2,763,370.00 2,520,000.00 243370 9.66 BALANCE taken to b/s 344458409.6 279105325.9 65353083.68 23.42 41 42. Interpretation of comparative statement for a period of five years. While comparing the income statement it reveals that 1. The sales increased by 13.1 % during the year 2004-05. It is decreased by 8.52 % during the year 2005-06. It is increased by 68.64 % in 2006-07, 83.79 % in 2007- 08, and decreased by78.19 % in 2006-07. 2. The other income has increased to 18.85 % during the year 2002-03, 47.60 %in 2005-06, 31.71% in 2006-07, 79.34 %in 2007-08, and 63.59% in 2008-09. 3. The opening stock has decreased in first two year 2004-05 and 2005-06, After that increased 84.23 %in 2006-07, 109.79 %in 2007-08, and -46.29% in 2008-09. 4. The employee cost is 12.34 %in the year 2004-05, as decreases 6.89% in the year 2005-06, as 7.43 %in the year 2006-07, as 71.27 %in the year 2007-08, and 50.36% in the year 2008-09. 5. The administrative expenses was 43.45 %in the year 2004-05,as 19.20 %in the year 2005-06,as 68.14 %in then year 2006-07, as 47.79 %in the year 2005-06, and 64.10 %in the year 2008-09. 6. The profit was increase in 4.39% in the year 2004-05, as 6.62%in the year 2003- 04 as 132.86 % in the year 2006-07, but next two year profit will decreases. 42 43. TABLE NO 5.3 COMMONSIZE BALANCE SHEET COMMANSIZE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2004-31.03.2005 particulars 31.03.2005 percentag e 31.03.2004 percentage (A)source of fund 1.sharesholders funds share capital 70000000 15.85 70000000 15.64 reserves & surplus 223178683.6 50.52 243240018.5 54.35 2.Loan funds secured loan 84299603.37 19.08 132568219 29.62 unsecured loan 1715087.82 0.39 1715087.82 0.38 3.Deferred tax liability 62554754 14.16 0 0.00 TOTAL 441748128.8 100.00 447523325.4 100.00 ((B) application of fund 1.Fixed assets gross block 240151754.5 54.36 218041577.8 48.72 less:depreciation 117457612 26.59 104474386 23.35 net block 122694142.5 27.77 113567191.8 25.38 capital work in progrerss 2.Invesments 113634101 25.72 55995500 12.51 3. current asset, loans &advance Inventory 47437704.76 10.74 47879717.25 10.70 Sundry debtors 282380369.9 63.92 285542053.6 63.80 cash and bank balances 29719195.42 6.73 26714242.61 5.97 Loans and advances 115795258.9 26.21 169595665 37.90 (a) 475332529 107.60 529731678.4 118.37 Less:current liabilities&provisions Liabilities 253323205.7 57.35 241951716.8 54.06 Provisions 16635938 3.77 9889078 2.21 (b) 269959143.7 61.11 251840794.8 56.27 Net current assets (a)-(b) 205373385.3 46.49 277890883.6 62.10 4.Miscellaneous expenditure 46500 0.01 69750 0.02 Total 441748128.8 100.00 447523325 100.00 43 44. COMMONSIZE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2005-31.03.2006 particulars 31.03.2006 percentag e 31.03.2005 percentage (A)source of fund 1.sharesholders funds share capital 91000000 17.01 70000000 15.85 reserves & surplus 252126134.6 47.13 223178683.6 50.52 2.Loan funds secured loan 120115278.8 22.45 84299603.37 19.08 unsecured loan 1715087.82 0.32 1715087.82 0.39 3.Deferred tax liability 70020162 13.09 62554754 14.16 TOTAL 534976663.2 100.00 441748128.8 100.00 ((b) application of fund 1.Fixed assets gross block 259751001 48.55 240151754.5 54.36 less:depreciation 128362564.7 23.99 117457612 26.59 net block 131388436.3 24.56 122694142.5 27.77 capital work in progrerss 2.Invesments 117465770 21.96 113634101 25.72 3. current asset, loans &advance Inventory 90952549.43 17.00 47437704.76 10.74 Sundry debtors 308616846.9 57.69 282380369.9 63.92 cash and bank balances 30871751.69 5.77 29719195.42 6.73 Loans and advances 184958278.4 34.57 115795258.9 26.21 (a) 615399426.5 115.03 475332529 107.60 Less:current liabilities &provisions Liabilities 311967132 58.31 253323205.7 57.35 Provisions 17333087 3.24 16635938 3.77 (b) 329300219.6 61.55 269959143.7 61.11 Net current assets (a)-(b) 286099206.9 53.48 205373385.3 46.49 4.Miscellaneous expenditure 23250 0.00 46500 0.01 Total 534976663.2 100.00 441748128.8 100.00 44 45. COMMONSIZE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2006-31.03.2007 particulars 31.03.2007 percentage 31.03.2006 percentage (A)source of fund 1.sharesholders funds share capital 91000000 13.15 91000000 17.01 reserves & surplus 320799823.7 46.34 252126134.6 47.13 2.Loan funds secured loan 206174658.3 29.78 120115278.8 22.45 unsecured loan 1715087.82 0.25 1715087.82 0.32 3.Deferred tax liability 72530307 10.48 70020162 13.09 TOTAL 692219876.9 100.00 534976663.2 100.00 ((b) application of fund 1.Fixed assets gross block 276294105.1 39.91 259751001 48.55 less: depreciation 142102629.1 20.53 128362564.7 23.99 net block 134191476 19.39 131388436.3 24.56 2.Invesments 117522770 16.98 117465770 21.96 3. current asset, loans &advance Inventory 171120709 24.72 90952549.43 17.00 Sundry debtors 393555597.5 56.85 308616846.9 57.69 cash and bank balances 43356997.59 6.26 30871751.69 5.77 Loans and advances 220825583.5 31.90 184958278.4 34.57 (a) 828858887.6 119.74 615399426.5 115.03 Less:current liabilities&provisions Liabilities 372952383.2 53.88 311967132 58.31 Provisions 15400873.52 2.22 17333087 3.24 (b) 388353256.7 56.10 329300219.6 61.55 Net current assets (a)-(b) 440505630.9 63.64 286099206.9 53.48 4.Miscellaneous expenditure 0 0.00 23250 0.00 Total 692219876.9 100.00 534976663.2 100.00 COMMONSIZE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2007-31.03.2008 45 46. particulars 31.03.2008 percentage 31.03.2007 percentage (A)source of fund 1.sharesholders funds share capital 91000000 7.34 91000000 13.15 reserves & surplus 372775782 30.05 320799823. 7 46.34 share capital suspense account 3963720 0.32 0 0.00 share application money allotment 192177284 15.49 0 0.00 2.Loan funds secured loan 526579745 42.46 206174658. 3 29.78 unsecured loan 99282.77 0.01 1715087.82 0.25 3.Deferred tax liability 53724145.37 4.33 72530307 10.48 TOTAL 1240319960 692219876. 9 100.00 ((b) application of fund 1.Fixed assets gross block 458185611.9 36.94 276294105. 1 39.91 less:depreciation 172734955.5 13.93 142102629. 1 20.53 net block 285450656.5 23.01 134191476 19.39 capital work in progrerss 13694616.12 1.10 0 0.00 2.Invesments 299142910 24.12 117522770 16.98 3. current asset, loans &advance Inventory 346152220.3 27.91 171120709 24.72 Sundry debtors 562767157.6 45.37 393555597. 5 56.85 cash and bank balances 78403517.45 6.32 43356997.5 9 6.26 Loans and advances 376392904.6 30.35 220825583. 5 31.90 (a) 1363715800 109.95 828858887. 6 119.74 Less:current liabilities&provisions Liabilities 705540484.1 56.88 372952383. 2 53.88 Provisions 16143538.39 1.30 15400873.5 2 2.22 (b) 721684022.5 58.19 388353256. 7 56.10 Net current assets (a)-(b) 642031777.4 51.76 440505630. 9 63.64 4.Miscellaneous expenditure 0 0.00 0 Total 1240319960 100.00 692219876. 9 100.00 46 47. COMMONSIZE STATEMENTS FOR BALANCE SHEET AS ON 31.03.2008-31.03.2009 particulars 31.03.2009 percentage 31.03.2008 percentage (A)source of fund 1.sharesholders funds share capital 288422670 19.37 91000000 7.34 reserves & surplus 452910284.9 30.41 372775782 30.05 share capital suspense account 0 0.00 3963720 0.32 share application money allotm 8820000 0.59 192177284. 9 15.49 2.Loan funds secured loan 666122614.6 44.72 526579745 42.46 unsecured loan 99282.77 0.01 99282.77 0.01 3.Deferred tax liability 73024145.37 4.90 53724145.3 7 4.33 TOTAL 1489398998 100.00 1240319960 ((b) application of fund 1.Fixed assets gross block 625277041.4 41.98 458485611. 9 36.97 less:depreciation 228676478.7 15.35 172734955. 5 13.93 net block 396600562.7 26.63 285450656. 5 23.01 capital work in progrerss 6740375.62 0.45 13694616.1 2 1.10 2.Invesments 251796910 16.91 299142910 24.12 3. current asset, loans &advance Inventory 436488740.9 29.31 346152220. 3 27.91 Sundry debtors 811838511.7 54.51 562767157. 6 45.37 cash and bank balances 135587196.7 9.10 78403517.4 5 6.32 Loans and advances 538751165.4 36.17 376392904. 6 30.35 (a) 1922665615 129.09 1363715800 109.95 Less:current liabilities&provisions Liabilities 1058043042 71.04 705540484. 1 56.88 47 48. Provisions 30361423.5 2.04 16143538.3 9 1.30 (b) 1088404465 73.08 721684022. 5 58.19 Net current assets (a)-(b) 834261149.4 56.01 642031777. 4 51.76 4.Miscellaneous expenditure 0 0.00 0 0.00 Total 1489398998 100.00 1240319960 100.00 TABLE NI 5.4 COMMONSIZE STATEMENT FOR PROFIT& LOSSACCOUNT 48 COMMONSIZE STATEMENT FOR PROFIT &LOSS ACCOUNT AS ON 31.03.2004--31.03.2005 particulars 31.03.2005 percentage 31.03.2004 percentage INCOME contract income 908374426.5 98.87 802683087.5 98.93 other income 10352119.79 1.13 8709998.89 1.07 Total income 918726546.3 100 811393086.5 100.00 EXPENDITURE increase/decrease in stock 442012.49 0.05 -20043472.94 -2.47 project expenditure 755558669.7 82.24 690252137 85.07 employee cost 40308914.12 4.39 35881071.66 4.42 administrative expenses 32209399.73 3.51 22453615.66 2.77 finance cost 23040010.98 2.51 29522812.68 3.64 depreciation 20271370.11 2.21 19767617.3 2.44 Total EXPENSES 871830377.2 94.90 777833781.3 95.86 net profit for the year 46896169.11 5.10 33559305.2 4.14 Total 918726546.3 100 811393086.5 100.00 49. COMMONSIZE STATEMENT FOR PROFIT &LOSS ACCOUNT AS ON 31.03.2005--31.03.2006 particulars 31.03.2006 percentage 31.03.2005 percentage INCOME contract income 830993967.1 98.19 908374426.5 98.87 other income 15279733.79 1.81 10352119.79 1.13 Total income 846273700.9 100 918726546.3 100.00 EXPENDITURE increase/decrease in stock -43514844.67 -5.14 442012.49 0.05 project expenditure 713583386.4 84.32 755558669.7 82.24 employee cost 43085727.79 5.09 40308914.12 4.39 administrative expenses 38393036.82 4.54 32209399.73 3.51 finance cost 25871789.79 3.06 23040010.98 2.51 depreciation 19107751.49 2.26 20271370.11 2.21 Total expenses 796526846.9 94.12 871830377.2 94.90 NET PROFIT FOR THE YEAR 49746853.95 5.88 46896169.11 5.10 Total 846273700.9 100 918726546.3 100.00 49 50. COMMONSIZE STATEMENT FOR PROFIT &LOSS ACCOUNT AS ON 31.03.2006--31.03.2007 particulars 31.03.2007 percentag e 31.03.2006 percentage INCOME contract income 1401367078 98.58 830993967.1 98.19 other income 20125092.65 1.42 15279733.79 1.81 TOTAL INCOME 1421492171 100 846273700.9 100.00 EXPENDITURE increase/decrease in stock -80168159.58 -5.64 -43514844.67 -5.14 project expenditure 1249170996 87.88 713583386.4 84.32 employee cost 46288462.55 3.26 43085727.79 5.09 administrative expenses 64552951.32 4.54 38393036.82 4.54 finance cost 38763941.86 2.73 25871789.79 3.06 depreciation 19059014.52 1.34 19107751.49 2.26 TOTAL EXPENSES 1337667207 94.10 796526846.9 94.12 NET PROFIT FOR THE YEAR 83824964.11 5.90 49746853.95 5.88 TOTAL 1421492171 100 846273700.9 100.00 50 51. COMMONSIZE STATEMENT FOR PROFIT &LOSS ACCOUNT AS ON 31.03.2007--31.03.2008 particulars 31.03.2008 percentage 31.03.2007 percentage INCOME sales less return 20300242 1.16 0 0.00 contract income 1698515405 96.75 1401367078 98.58 export sales 673464 0.04 0 0.00 other income 36091746.29 2.06 20125092.65 1.42 TOTAL INCOME 1755580857 100 1421492171 100.00 EXPENDITURE increase/decrease in stock -168181330.3 -9.58 -80168159.58 -5.64 project expenditure 1600064469 91.14 1249170996 87.88 employee cost 79280137.89 4.52 46288462.55 3.26 administrative expenses 95402435.35 5.43 64552951.32 4.54 finance cost 58602334.61 3.34 38763941.86 2.73 depreciation 32370243.68 1.84 19059014.52 1.34 TOTAL EXPENSES 1697538290 96.69 1337667207 94.10 NET PROFIT FOR THE YEAR 58042567.3 3.31 83824964.11 5.90 TOTAL 1755580857 100 1421492171 100.00 COMMONSIZE STATEMENT FOR PROFIT &LOSS ACCOUNT AS ON 31.03.2008--31.03.2009 particulars 31.03.2009 percentage 31.03.2008 percentage INCOME sales 10891191 0.35 20300242 1.16 contract income 3026523126 97.71 1698515405 96.75 51 52. export sales 967565 0.03 673464 0.04 other income 59041989.7 1.91 36091746.29 2.06 TOTAL INCOME 3097423871 100 1755580857 100.00 EXPENDITURE increase/decrease in stock -90336520.58 -2.92 -168181330.3 -9.58 project expenditure 2626443991 84.79 1600064469 91.14 employee cost 119204446 3.85 79280137.89 4.52 administrative expenses 156557422.6 5.05 95402435.35 5.43 finance cost 124130736.4 4.01 58602334.61 3.34 depreciation 58067683.13 1.87 32370243.68 1.84 TOTAL EXPENSES 2994067759 96.66 1697538290 96.69 NET PROFIT FOR THE YEAR 103356112.7 3.34 58042567.3 3.31 TOTAL 3097423871 100 1755580857 100.00 TABLE NO 5.5 Trend analysis for balance sheet as on 31.03.2004---31.03.2009 52 53. CHART 5.1 1. RESERVE & SURPLUS 53 PERCENTAGE IN YEAR particulars 2004 2005 2006 2007 2008 2009 (A)source of fund 1.sharesholders funds share capital 100 100.0 130.0 130.00 130.00 412.03 reserves & surplus 100 91.75 103.6 131.89 153.25 186.20 share capital suspense a/c 100 0.00 0.00 0.00 0.00 0.00 share application money allotment 100 0.00 0.00 0.00 0.00 0.00 2.Loan funds secured loan 100 63.59 90.61 155.52 397.21 502.48 unsecured loan 100 100.0 100.0 100.00 5.79 5.79 3.Deferred tax liability 100 0.00 0.00 0.00 TOTAL 100 98.71 119.5 154.68 277.15 332.81 (b) Application of fund 1.Fixed assets gross block 100 110.1 119.1 126.72 210.14 286.77 less: depreciation 100 112.4 122.8 136.02 165.34 218.88 net block 100 108.0 115.6 118.16 251.35 349.22 capital work in progress 100 0.00 0.00 0.00 0.00 0.00 2.Invesments 100 202.9 209.7 209.88 534.23 449.67 3. current asset, loans &advance Inventory 100 99.08 189.9 357.40 722.96 911.64 Sundry debtors 100 98.89 108.0 137.83 197.09 284.31 cash and bank balances 100 111.2 115.5 162.30 293.49 507.55 Loans and advances 100 68.28 109.0 130.21 221.94 317.67 (a) 100 89.73 116.1 156.47 257.44 362.95 Less: current liabilities &provisions Liabilities 100 104.7 128.9 154.14 291.60 437.30 Provisions 100 168.2 175.2 155.74 163.25 307.02 (b) 100 107.1 130.7 154.21 286.56 432.18 Net current assets (a)-(b) 100 73.90 1029 158.52 231.04 300.21 4.Miscellaneous expenditure 100 66.67 33.3 0.00 0.00 0.00 Total 100 98.71 119.5 154.68 277.15 332.81 54. CHART 5.2 2. UNSECURED LOAN CHART 5.3 3. FIXED ASSET TABLE NO 5.6 54 RESERVE & SURPLUS 0.00 50.00 100.00 150.00 200.00 Series1 Series1 91.75 103.65 131.89 153.25 186.20 2004-05 2005-06 2006-07 2007-08 2008-09 UNSECURED LOAN 0.00 100.00 200.00 300.00 400.00 500.00 600.00 Series1 Series1 63.59 90.61 155.52 397.21 502.48 2004-05 2005-06 2006-07 2007-08 2008-09 FIXED ASSET 108.04 115.69 118.16 251.35 349.22 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00 Series1 Series1 108.04 115.69 118.16 251.35 349.22 2004-05 2005-06 2006-07 2007-08 2008-09 55. Trend analysis for profit & loss account as on 31.03.2004-31.03.2009 CHART 5.4 1. SALES 55 PERCENTAGE IN YEAR particulars 2004 2005 2006 2007 2008 2009 INCOME sales 100 0 0 0 0 0 contract income 100 113.1 103.52 174.58 211.60 377.05 export sales 100 0 0 0 0 0 other income 100 118.8 175.42 231.05 414.37 677.86 TOTAL (a) 100 113.2 104.29 175.19 216.36 381.74 EXPENDITURE increase/decrease in stock 100 -2.20 217.10 399.97 839.08 450.70 project expenditure 100 109.4 103.38 180.97 231.80 380.50 employee cost 100 112.3 120.07 129.00 220.95 332.22 administrative expenses 100 143.4 170.98 287.49 424.88 697.24 finance cost 100 78.04 87.63 131.30 198.49 420.45 depreciation 100 102.54 96.66 96.41 163.75 293.75 TOTAL (b) 100 112.08 102.40 171.97 218.23 384.92 NET PROFIT BEFORE TAX and extra -ordinary item (a)-(b) 100 139.74 148.23 249.78 172.95 307.98 less: provision for taxation current year tax provision 100 174.12 216.17 139.89 106.38 212.76 deferred tax provision 100 0 0 0 0 0 fringe benefit 100 0 0 0 0 0 PROFIT AFTER TAX but before extra-ordinary item 100 110.73 111.30 0 0 0 extra ordinary item 100 0 0 0 0 0 profit after taxation and extra ordinary item 100 104.38 111.30 258.97 187.61 250.37 Profit &loss-surplus b/f 100 82.27 98.73 116.40 141.21 170.33 PROFIT AVAILABLE FOR APPROPRIATION 100 85.58 100.61 137.75 148.16 182.32 APPROPRIATIONS proposed final dividend 100 133.33 133.33 133.33 148.43 149.37 tax on dividend 100 0 0 0 0 0 proposed dividend on preference share 100 0 0 0 0 0 BALANCE taken to b/s 100 84.873 100.06 136.08 146.42 180.71 56. CHART 5.5 2. OTHER INCOME CHART 5.6 3. OPENING STOCK 56 SALES 0.00 50.00 100.00 150.00 200.00 250.00 300.00 350.00 400.00 Series1 Series1 113.16 103.52 174.58 211.60 377.05 2004-05 2005-06 2006-07 2007-08 2008-09 Other income 0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00 Series1 Series1 118.85 175.42 231.05 414.00 677.86 2004-05 2005-06 2006-07 2007-08 2008-09 57. CHART 5.7 4. NET PROFIT AFTER TAXS TYPES OF RATIOS Several ratios, calculated from the accounting can be grouped various class according to financial activity or function to be evaluated. As stated earlier, the parties 57 Opening stock -200.00 0.00 200.00 400.00 600.00 800.00 1000.00 Series1 Series1 -2.20 217.10 399.97 839.08 450.70 2004-05 2005-06 2006-07 2007-08 2008-09 Net profit after tax 0.00 50.00 100.00 150.00 200.00 250.00 300.00 Series1 Series1 104.38 111.30 258.97 187.61 250.37 2004-05 2005-06 2006-07 2007-08 2008-09 58. interested in financial activities or function to be evaluated. As stated earlier, the parties interested in financial analysis are short and long-term creditors, owners and management. Short-term creditors' main interest is in the liquidity position or the other hand, are more interested in the long-term solvency and profitability of the firm. Similarly, owners concentrate on the firm's profitability and financial condition. Management is interested in evaluating every aspect of the firm's performance. They have to protect the interest of all parties and see that the firm grows profitability .In view of the requirements of the various users of ratios, we may classify them into the following four important categories. Liquidity ratios Leverage ratios. Activity ratios Profitability ratios LIQUIDITY RATIO Liquidity ratios measure that firm's ability to meet current obligations; leverage ratios show the proportion of debts and equity in financing the firm's assets; activities ratios reflect the firm's efficiency in utilizing its assets, and profitability ratios measure- overall performance and effectiveness of the firm. Each of these ratios is discussed below. They indicate whether the firm has sufficient liquid resources to meet its short term liabilities. 1. CURRENT RATIO Current ratio is the relationship between current assets and current liabilities. Current asset 58 59. Current ratio = -------------------- Current liabilities Current Assets = Inventories + Sundry Debtors + Cash and Bank Balance + Loans and Advances Current Liabilities = Sundry Creditors + Security Deposits from Customers and Contractors + Interest Accrued but not due on loans+ Unclaimed Dividend + other liabilities + employee Terminal + provision for tax Proposed dividend + tax on dividend A current ratio of 2:1 is considered ideal. If the ratio is more than two, it is an indicator of ideal funds. If the ratio is less than two, it may be difficult for a firm to pay current liabilities. TABLE 5.7 CURRENT RATIO 59 YEAR CURRENT ASSET CURRENT LIABILITIES RATIO 2004-2005 475332529 269959143.7 1.76 2005-2006 615399426.5 329300219.6 1.87 2006-2007 828858887.6 388353256.7 2.13 2007-2008 1363715800 721684022.5 1.89 2008-2009 1922665615 1088404465 1.77 60. CHART 5.8 CURRENT RATIO INTERPRETATION: The above ratio shows the liquidity position of the firm. The standard norm for this ratio is 2:1. The current ratio is 2.13 :1 in the year 2004 05, 1.89 :1 in the year 60 1.76 1.87 2.13 1.89 1.77 0.00 0.50 1.00 1.50 2.00 2.50 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 61. 2005 06, 1.87 :1 in the year 2003 04, 1.77 :1 in the year 2006 07, and 1.76: 1 in the year 2002 -03. 2. QUICK RATIO (OR) LIQUID RATIO Quick ratio is also called Acid-test ratio because it is the acid test of a concerns financial soundness. It is the relationship between quick assets and quick liabilities. Liquid asset Liquid ratio = -------------------- Liquid liabilities Liquid Assets = Debtors + Cash and Bank Balances Liquid Liabilities = Creditors + Security Deposits from Customers +interest Accrued + Unclaimed dividend + Provision for taxation + tax on dividend (Or) Quick Assets Quick ratio = ------------------- Quick Liabilities Quick Assets = Current Assets (Stock + Prepaid Expenses) Quick Liabilities = Current Liabilities Bank Overdraft 61 62. A quick ratio of 1:1 is considered satisfactory. TABLE 5.8 QUICK RATIO (OR) LIQUID RATIO YEAR QUICK ASSET CURRENT LIABILITIES RATIO 2004-2005 427894824.2 269959143.7 1.59 2005-2006 524446877 329300219.6 1.59 2006-2007 657738178.6 388353256.7 1.69 2007-2008 1017563580 721684022.5 1.41 2008-2009 1486176874 1088404465 1.37 INTERPRETATION: The standard norm for the quick ratio is 1:1. From the above table the quick ratio for all the years are below the standard norm except in the year 2006-07. So, quick ratios found not satisfactory. CHART 5.9 62 63. 3. WORKING CAPITAL TURNOVER RATIO A firm may also like to relate net current assets to sales. It may thus compute net working capital turnover by dividing sales by net working capital. Working Capital Turnover Ratio = TABLE NO 5.9 WORKING CAPITAL TURNOVER RATIO 63 0.00 0.50 1.00 1.50 2.00 PERCENTAGE PERCENTAGE 1.59 1.59 1.69 1.41 1.37 2004-20052005-20062006-200752007-20082008-2009 YEAR SALES NET CURRENT ASSET RATIO 2004-2005 908374426.5 205373385.3 4.42 2005-2006 830993967.1 286099206.9 2.90 2006-2007 1401367078 440505630.9 3.18 2007-2008 1678215163 642031777.4 2.61 2008-2009 3026523126 834261149.4 3.63 64. INTERPRETATION: From the above table, it is inferred that, Working capital turnover ratio is very high in the year 2006-07, and whereas for the other years it is very low. CHART5.10 WORKING CAPITAL TURNOVER RATIO working capital ratio 0.00 1.00 2.00 3.00 4.00 5.00 PERCENTAGE PERCENTAGE 4.42 2.90 3.18 2.61 3.63 1 2 3 4 5 4. FIXED ASSET TURNOVER RATIO: This ratio determines efficiency of utilization of fixed asset and profitability of a business concern. Higher the ratio more is the efficiency in utilization of fixed asset. Fixed asset turnover ratio = cost of sales ______________ Net fixed asset 64 65. TABLE 5.10 FIXED ASSET TURNOVER RATIO INTERPRETATION: From above table, it is inferred that the fixed asset turnover ratio is 10.44 in the year 2006-07, as 7.63 percentage in the year 2008-09, as 7.40 percentage in the year 2004-05, as 6.32 percentage in the year 2005-06, and 5.88 percentage in the year 2007- 08. CHART 5.11 NET FIXED ASSET RATIO 5. CAPITAL TURNOVER RATIO: Managerial efficiency is also calculated by established the relationship between cost of sales with the amount of capital invested in the business. Capital turnover ratio is calculated with the help of the following formula: 65 YEAR cost of sales NET FIXED ASSET RATIO 2004-2005 908374426.5 122694142.8 7.40 2005-2006 830993967.1 131388436.3 6.32 2006-2007 1401367078 134191476 10.44 2007-2008 1678215163 285450656.5 5.88 2008-2009 3026523126 396600562.7 7.63 NET FIXED ASSET 7.40 6.32 10.44 5.88 7.63 0.00 2.00 4.00 6.00 8.00 10.00 12.00 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 66. Cost of Sales Capital Turnover = ___________________ Capital Employed TABLE 5.11 CAPITAL TURNOVER RATIO INTERPRETAION: From the above table, it is inferred that capital turnover ratio is high in the year 2004-05 and whereas in the year 2006-07, 2008-09, it is about 2.26 and 3.33 and it is less than 2 in the remaining years. CHART 5.12 CAPITAL TURNOVER RATIO 6. PROPRIETORY RATIO Proprietary ratio is relationship between properties funds and total tangible assets. Proprietary Ratio = 66 YEAR cost of sales CAPITAL EMPLOYED RATIO 2004-2005 908374426.5 379193374.8 2.40 2005-2006 830993967.1 464956501.2 1.79 2006-2007 1401367078 619689569.9 2.26 2007-2008 1678215163 990454809.8 1.69 2008-2009 3026523126 1407554852 2.15 CAPITAL TURNOVER RATIO 0.00 0.50 1.00 1.50 2.00 2.50 3.00 Series1 2.40 1.79 2.26 1.69 2.15 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 67. Proprietary ratio indicates the portion of share holders funds in the total assets. A high proprietary ratio indicates less danger and risk to creditors in the event of winding up. TABLE 5.12 PROPRIETORY RATIO INTERPRETATION: From above table, it is inferred that the capital turnover ratio is 3.07 in the year 2006-07, as 2.61 percentage in the year 2005-06, as 2.39 percentage in the year 2004-05, as 2.39 percentage in the year 2007-08, and 1.89 percentage in the year 2008-09. CHART 5.13 PROPRIETARY RATIO 7. GROSS PROFIT RATIO This ratio expresses the relation between the gross profit and net sales. 67 YEAR SHAREHOLDER FUNDS TOTAL TANGIEBLE ASSET RATIO 2004-2005 293178683.6 122694142.5 2.39 2005-2006 343126134.6 131388436.3 2.61 2006-2007 411799823.7 134191476 3.07 2007-2008 659916786.9 285450656.5 2.31 2008-2009 750152954.9 396600562.7 1.89 PROPRIETARY RATIO 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 68. Gross Profit Ratio = x 100 It indicates the efficiency of production (or) trading operations. A high gross profit ratio is a sign of good management as it implies that the cost of production is relatively low. TABLE 5.13 GROSS PROFIT RATIO INTERPRETATION: From above table, it is inferred that the gross profit ratio is 9.82 in the year 2004-05, as 11.91 percentage in the year 2005-06, as 9.96 percentage in the year 2006-07, as 8.49 percentage in the year 2007-08, and 9.22 percentage in the year 2008-09. CHART 5.14 GROSS PROFIT RATIO 8. NET PROFIT RATIO 68 YEAR GROSS PROFIT SALES RATIO 2004-2005 89202368.68 908374426.5 9.82 2005-2006 92988224.92 830993967.1 11.19 2006-2007 139576161 1401367078 9.96 2007-2008 142480467.3 1678215163 8.49 2008-2009 279045432.2 3026523126 9.22 gross profit ratio 0 500000000 1000000000 1500000000 2000000000 2500000000 3000000000 3500000000 RATIO sales RATIO 9.82 11.19 9.96 8.49 9.22 sales 908374426 830993967 140136707816782151633026523126 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 69. This ratio measures the relationship between net profit and net sales. Net Profit Ratio = x 100 It indicates the efficiency of overall operations of the firm. It shows what percentage of sales is left to the owners after meeting all costs. An increase in net profit ratio year after year is an indication of improving working conditions and vice versa. TABLE 5.14 NET PROFIT RATIO 69 YEAR NET PROFIT AFTER TAX NET SALES RATIO 2004-2005 31958104.11 908374426.5 3.52 2005-2006 32121182.95 830993967.1 3.87 2006-2007 74739819.11 1401367078 5.33 2007-2008 54144000.3 1678215163 3.23 2008-2009 72256112.68 3026523126 2.39 70. INTERPRETATION: From the above table, it is inferred that net profit ratio of the Mincore resources is increasing year by year except for the last two years. Especially, in the past year this ratio shows 2006-07 high net profit than previous years. But in the year 2007-08 it was 3.23.But in the year 2008-09 it has decreased to 0.34. CHART 5.15 NET PROFIT RATIO 70 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 S1 net profit ratio Series1 3.52 3.87 5.33 3.23 2.39 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 71. 9. RETURN ON SHARE HOLDERS FUNDS Common (or) ordinary share holders are entitled to the residual profits. A return on share holders funds is calculated to see the profitability of owners investment. Return on Share Holders Funds = This will reveal the relative performance and strength of the company in attracting future investments. TABLE 5.15 RETURN ON SHARE HOLDERS FUNDS INTER PRETATION: From above table, it is inferred that the fixed asset turnover ratio is 10.90 in the year 2004-05,as 9.63percentage in the year 2008-09,as 9.36 percentage in the year 2004- 05,as 8.20 percentage in the year 2007-08, and 5.26 percentage in the 2006-07. CHART 5.16 RETURN ON SHAREHOLDER FUNDS 71 YEAR NET PROFIT AFTER TAX S. HOLDER FUNDS RATIO 2004-2005 31958104.11 293178683.6 10.90 2005-2006 32121182.95 343126134.6 9.36 2006-2007 74739819.11 1421492171 5.26 2007-2008 54144000.3 659916786.9 8.20 2008-2009 72256112.68 750152954.9 9.63 72. 10. RETURN ON INVESTMENT: The return on investment (ROI) is to divide PAT by investment (or) capital employed. Return on Investment = x 10 TABLE5. 16 RETURN ON INVESTMENT: INTERPRETATION: From above table, it is inferred that the return on investment ratio is 13.53 percentage in the year 2006-07,as 12.37 percentage in the year 2004-05,as 10.70 percentage in the year 2005-06, as 7.30 percentage in the year 2008-09, and 4.89 percentage in the year 2007-08. 72 Return on shareholder funds Ratio 0.00 2.00 4.00 6.00 8.00 10.00 12.00 Series2 10.90 9.36 5.26 8.20 9.63 2004-20052005-20062006-20072007-20082008-2009 YEAR OPERATING PROFIT CAPITAL EMPLOYED RATIO 2004-2005 46896169.11 379193374.8 12.37 2005-2006 49746853.95 464956501.2 10.70 2006-2007 83824964.11 619689569.9 13.53 2007-2008 58042567.3 1186595815 4.89 2008-2009 103356112.7 1416374852 7.30 73. CHART 5.17 RETURN ON INVESTMENT RATIO: 11. DEBTORS TURNOVER RATIO: This ratio show, on an average, the number of times debtors are turned over during a year. A higher ratio indicates efficiency in asset management and vice-versa. TABLE 5.1 DEBTORS TURNOVER RATIO 73 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 Return on investment RATIO 12.37 10.70 13.53 4.89 7.30 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 74. INTERPRETATION: From above table, it is inferred that the return on debtor turnover ratio is 3.22 percentage in the year 2004-05,as 2.69 percentage in the year 2005-06,as 3.56 percentage in the year 2006-07, as 2.98 percentage in the year 2007-08, and 3.73 percentage in the year 2008-09. CHART 5.18 DEBTOR TURNOVER RATIO 12. ADMINISTRATIVE EXPENSES RATIO 74 YEAR SALES CLOSING DEBTORS RATIO 2004-2005 908374426.5 282380369.9 3.22 2005-2006 830993967.1 308616846.9 2.69 2006-2007 1401367078 393555597.5 3.56 2007-2008 1678215163 562767157.6 2.98 2008-2009 3026523126 811838511.7 3.73 0.00 1.00 2.00 3.00 4.00 debtor turnover ratio RATIO RATIO 3.22 2.69 3.56 2.98 3.73 2004-20052005-20062006-20072007-20082008-2009 75. These ratios are also known as supporting ratios to operating ratio. they indicate the efficiency wit