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ISSN: 2249-7137 Vol. 3, Issue. 10, October 2013 ACADEMICIA

The South Asian Academic Research Journals

http://www.saarj.com

127

Published by: South Asian Academic Research Journals

ACADEMICIA:A n I n t e r n a t i o n a l

M u l t i d i s c i p l i n a r y

R e s e a r c h J o u r n a l(A Double Bl ind Referred & Reviewed Internat ional Journal)

A PAPER ON FINANCIAL ANALYSIS OF K2K INFRASTRUCTURE PVT

LTD THROUGH COMPARATIVE AND TREND ANALYSIS

Dr. G. Malyadri*; B. Sudheer Kumar**

*Associate Professor,

Department of MBA,

Sreenivasa Institute of Technology and Management Studies (SITAMS),Chittoor, A.P., India.

**Assistant Professor,

Department of MBA,Vaagdevi Institute of Technology and Science (VITS),

A.P., India.

ABSTRACT

Financial management is planning organizing, Directing and controlling various

financial activities of the organization. In order to perform all the managerial

function effective and efficiency, sufficient, past and present information about theform and its operation should be equipped along with this changes overtime. Astatement portion of information required in financial decision-making is found in

financial statements, particularly, the income statements and the balance sheetfinancial statements and the balance sheet financial statement, particularly, the

income statements and the balance sheet financial statements also help inforecasting the financial effects of planning.

KEYWORDS: Financial Statement Analysis, Comparative Income Statement &

Balance Sheet, Comparative Statement Analysis, Common Size Statement Analysis,Trend Analysis.

_________________________________________________________________________

INTRODUCTION

Financial Management emerged as a distinct field of study at the turn of this century. Many

eminent persons defined it in the following ways.

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DEFINITION OF FINANCIAL MANAGEMENT

1. ACCORDING TO GUT HMANN AND DOUGHAL: Business finance can broadly be

defined as the activity concerned with planning, rising, controlling and administering of used inthe business.

2. ACCORDING TO BONNEVILE AND DEWEY: Financing consists is the rising,providing and managing of all the money, capital or funds of any kind to be used in connection

with business.

TYPES OF FINANCIAL ANALYSIS

The process of financial analysis may be classified based on the nature of information used andas the basis of methodology of operation.

1. ON THE BASIS OF NATURE OF INFORMATION USED:

A. EXTERNAL ANALYSISThe information used is that which is freely available to any body published financial statementare an example of such information. There is no access to internal records of an organization

with increasing emphasis on disclosers in recent timer the quality of external analysis is likely toimprove in the future.

B) INTERNAL ANALYSIS

The source of information is internal analysis is the internal for use of mgt. For other internal

needs of the organizations.

2. ON THE BASIS OF METHODOLOGY OF OPERATION:

A) HORIZONTAL ANALYSIS

It involves analysis and review of financial statements; pertaining to a number of years. An

attempt is made to identify the periodical trend of various items in the financial statementpercentage Increases/Decreases is calculated for all such item. Alternatively base years are

indexed to that of base period.

TRENDS ANALYSIS: -It is also known as dynamic analysis.

VERTICAL ANALYSIS: - Vertical analysis involves anglicizing a single set offinancial statement, by expressing various items of the statement, as a percentage of aparticulars item. Quantitative relationship is established among great various items at a

particular data. It is also known as Static analysis (or) structural analysis.

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TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS

A. Comparative statement analysis.B. Common Size Statement Analysis.C. Trend analysis.D. Fund flow analysis.E. Cash flow analysis.F. Ratio analysis.A. COMPARATIVE STATEMENT ANALYSIS

The comparative financial statements are statements of the financial position at different periodof time. The elements of financial position are shown in a comparative form so as to give an

idea of financial position at two or more periods. Any statement prepared in a comparative formwill be covered prepared in a comparative form for financial statements (Balance sheet and

income statement) are prepared in comparative form of financial analysis purposes.

A.COMPARATIVE BALANCE SHEETSThe comparative balance sheet analysis is the study of the trend of the same items, group ofitems and computed items in two or more balance sheets of the same business enterprise an

different dates. The changes in periodic balance sheet items reflect the conduct of a business.

B.INTERPRETATION OF COMPARATIVE BALANCE SHEETWhile interpretation comparative balance sheet the interpretation is expected to study thefollowing aspects.

1)Current financial position and liquidity position,2)Long-term financial position,3)Profitability of the concern,4)For studying current financial position or short term financial position of a concern oneshould see the working capital in both the years. The excess of current assets over currentliabilities will give the figures of working capital.

5)The increase in working Capital will mean improvement in the current financial position ofthe business. An increase in current assets accompanied by the increase in current liabilities of

the same amount will not show any improvement in the short-term financial position.

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6)The long term financial position of the concern can be analyzed by studying the changes infixed assets, long term liabilities and capital the proper financial policy of the concern will be

finance fixed assets by the issue of either long term securities such as debentures, bonds, loansfrom financial institution on issue of fresh share capital. An increase in fixed assets should be

compared to the increase in long-term loans and capital.

7)The next aspect to be studied in a comparative balance sheet question is the profitabilitybalance sheet question is the profitability of the concern. The study of increase or decrease inretained earnings, various resources and surplus etc. Will enable the interpretation to see

whether the profitability has improved or not.

8) After studying various assets and liabilities an opinion should be formed about the financialposition of the concern are cannot say if short term financial position is good then long termfinancial position is good then long term financial position will also be good or vice-versa.

B. COMMON SIZE STATEMENT ANALYSIS

A common size statement facilitates comparison of financial statements of not only a single firmover a time period but also comparison of financial statements of different companies offinancial statements of different companies for any given time. Under this method, all the times

of the statement are presented as percentages or rations of a particulars item. Therefore, Even ifthe absolute figures relates to a vastly. Different scale of operations, a common base for

comparison is created.

In case of common size income statement, all items are presented as a percentage of net sellers.

A common size balance sheet shows each item as a Percentage of total asset or total liabilities.A common size statement helps in determining the relative efficiency and sounders of a firm and

helps in understanding its financial strategy.

C. TREND ANALYSIS

Trend analysis involves computations of index number of the movements of the various financialitems in the financial statements for a no. of periods. It helps in understandings the nature and

rate of movements in various financial factors however; conclusion should not be drawn on thebasis of a single trend. Trends of related items should be carefully studied. Due weighted

should be given to extraneous factors such as govt. policy, economic policy, economicconditions etc, as they can affect the trend significantly.

POINTS TO BE NOTED

1. The accounting policies for the entire period should be uniform.2. Trend values must be read along with absolute values.3. Non-Financial factors should be considered while interpreting the trend.

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D. FUND FLOW ANALYSIS

A funds flow statements is a statement which explain the various sources from which funds were

raised and the user to which these funds were put. (The reader may notice that this definition offunds flow statement comes disconcertingly close to the definition of a balance sheet. Since

liabilities and assets are themselves sources and user of funds.

Respectively even a balance sheet itself may be considered a form of funds flow statement one

would notice that in fact the balance sheet of most companies are increasingly being expressed inthe Sources of funds and Application of funds formats.

The major differences, however, between a true fund flow statement and a balance sheet lies inthe fact that the former capturer the movements in funds. While the latter merely presents a

static picture of the sources and user of funds an account of this property a funds flow statementwould enable one to see how the business financed its fixed assets, built up the inventory,

discharged its liabilities, paid its dividends and taxes and so on. Similarly it would enable one tosee how the business managed to meet the above capital or revenue expenditure was it by raising

additional capital or loans from public? Was it by stretching the trade creditors or by incurringsome other liabilities.

E. CASH FLOW ANALYSIS

Cash flow analysis involves the preparation of a cash flow statement from one period to another.

The term cash includes cash and bank balance. This statement is very much similar to thestatement of funds flow statement focuses attention cash instead of working capital.

F. RATIO ANALYSIS

Ratios are well known and widely used tools of financial analysis. A ratio gives themathematical relationship between one variable and another. Though the computation of a ratioinvolves only a simple arithmetic operation, its interpretation is a difficult exercise. The analysis

of a ratio can disclose relationship as well as basis of comparison that reveal conditions of theratio.

The usefulness of ratios is ultimately dependent on their intelligent and skill interpretation.

REVIEW OF LITERATURE

1. ENVIRONMENTAL AND FINANCIAL PERFORMANCE LITERATUREDonald P.Cram, on March 27 , 2000

The study reviews the growing literature relating corporate environmental performance tofinancial performance. The researchers seek to identify achievements and limitation of this

literature and to highlights areas for further research. This studys primary interest is to assess theadequacy of the literature in informing corporate managers how, when, and where to make pro-

environment investments that will be pay off with financial returns for long-term shareholders.

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To do so, we create a conceptual framework that maps the influence of regulators, public healthscientists, environmental advocates, consumers, employees, and other interested parties

interested in influencing corporate actions that effect the environment.

2. IMPLICATIONS FOR FINANCIAL PERFORMANCE AND CORPORATESOCIAL RESPONSIBILITY

Philippe Jacquart, Catherine Ramus & John Antonakis, on may 23, 2004

This study investigated whether CEO implicit motives predict corporate social performanceand financial performance. Using longitudinal data on 258 CEOs from 118 firms, and

controlling for country and industry effects, we found that motives significant predicated bothfinancial performance (Tobins Q & the CAPM) and social responsibility. In general, need for

and responsibility disposition were positively predictive whereas need for achievement andaffiliation were negatively predictive of outcomes. Contrary to previous theorizing, corporate

social responsibility had no link to financial performance. Our findings suggest that executivecharacteristics have important consequences for corporate level outcomes.

NEED OF THE PAPER

Financial analysis is a process of identifying the strength and weakness of the company to

establishing the relationship between the balance sheet and profit &loss account.

The financial data can be used to analyze the firm past performance and assess in presentfinancial strength.

Hence the present study is made to analyze the financial health of the company.

OBJECTIVES

1. To study the financial statements of K2K Infrastructure pvt., ltd.2. To evaluate the financial efficiency through suitable tools.3. To analyze the sales, stock and profit of the company.METHODOLOGY

The research methodology used for this study includes both primary & secondary sources of

data. However most of the study is conducted based on secondary sources.

TYPE OF RESEARCH:

This study is an analytical one which is based on the existing facts & figures and the method ofthe study is descriptive.

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NATURE OF DATA

1. Primary sources of data were collected through interviews and meetings or discussions with

executives and top managers in the financial departments of this company itself.

2. Secondary sources of data were collected for this study and they are from annual reports,

official websites, books & journals.

TOOLS USED

1. Comparative income statement &

2. Balance sheet and

3. Trend Analysis are the tools used for the analysis and Bar charts are used in it.

DATA ANALYSIS AND INTERPRETATION

FINANCIAL STATEMENT ANALYSIS

Financial statement analysis is defined as the process of identifying financial strengths and

weakness of the firm by properly establishing relationship between the items of the balance sheetprofit and loss account.

There are various methods or techniques that are used in analyzing financial statements, such ascomparative statements, common size percentages and trend analysis.

COMPARATIVE INCOME STATEMENT

The comparative income statement summarizes and compares income and expenses across twoor more specified time periods. You can use to compare your companys performance withprevious years.

This comparison helps you to measure your companys progress and to make future projections.

COMPARATIVE BALANCE SHEET

A comparative balance sheet is designed to show financial differences between severalaccounting periods. A balance sheet is a detail account of everything lost and gained financially

during a certain time, containing both physical and abstract data.

A comparative balance sheet is useful because a business can instantly compare profits and

losses between different time periods. Most businesses use comparative balance sheets to helpincrease profits and functionality of a company.

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TREND ANALYSIS

Trend analysis is a form of comparative analysis that is often employed to identify current and

future movements of an investment or group of investments. The process may involve comparingpast and current financial ratios as they related to various institutions in order to project how long

the current trend will continue. This type of information is extremely helpful to investors whowish to make the most from their investments. The process of a trend analysis begins with

identifying the category of the investments that are under considerations. Once the focus isestablished, the investors take a long at the general performances for the category over the last

couple of years. After identifying past and present factors that are maintaining a current trend inperformance, the investor can analyze each factor and project which factors are likely to continue

exerting influence on the direction of the investment. Assuming that all or most of the factorswill continue to exerting influence for the foreseeable future, the investor can make an informed

decision on whether to buy or sell a given assets.

A Trend Analysis may be used to identify and project upswings in the performance of a stock or

commodity to identify the potential for an upcoming downturn in value. By comparing the

financial ratio of the past with the present and identifying key factors that helped the investmentto arrive at the current point, it is possible to use the process of trend analysis to project futureworth and adjust the components of the financial portfolio accordingly.

ANALYTICAL PART OF FINANCIAL STATEMENT ANALYSIS

COMPARATIVE INCOME STATEMENT & BALANCE SHEET

COMPARATIVE INCOME STATEMENT [2007 & 2008]

TABLE NO: 1: COMPARATIVE INCOME STATEMENT OF K2K

INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-08

PARTICULARS MARCH-31 INCREASE / DECREASE

2007 2008 AMOUNT PERCENTAGE

Net sales

Cost of goods sold

Gross profit(A)

Operating expenses

Employee benefit

Depreciation &amortization expenses

68,51,329,288

45,85,338,729

83,47,962,546

55,32,852,108

1,49,66,33,258

94,75,13,379

21.84

20.66

22,65,990,559 28,15,110,438 54,91,19,879 24.23

1,25,70,58,350

11,35,52,319

1,59,39,73,597

13,60,39,414

33,69,15,247

2,24,87,095

26.80

19.80

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Total operating

expenses(B)

Operating income(A-B)

Non Operating income

Other income

Non Operating expenses

Other expenses

Profit Before interest &

tax

Interest (finance cost)

Profit Before Tax

Tax

Provision for taxadjustments

Profit after tax

1,37,06,10,669 1,73,00,13,011 35,94,02,342 26.22

8,95,379,890

20,74,78,708

60,71,93,931

(39,97,15223)

29,46,986.80

10,50,165,43

11,89,98,685

(6,64,879)

1,08,50,97,427

26,03,9887

73,92,60,892

(47,89,210,05)

36,30,471,71

115,873,834

14,35,34,982

(1,17,66,272)

18,97,17,537

5,28,61,179

13,20,66,961

7,92,05,782

6,83,48,491

1,08,57,291

2,45,36,297

5,11,801

21.19

25.48

21.75

19.81

23.19

10.34

20.62

76.98

(1,33,17,271) (2,64,84,476) 3,98,01,747 298.87

Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2008

INTERPRETATION

From the above table-3.1, it shows that the comparative Income Statement of K2K Infra

Structure PVT. LTD., for the years 2007 & 2008. By comparing the year 2008 with 2007 ofIncome & Expenditure, the sales have increased 21.84 percent while the cost of goods sold has

increased by 20.66 percent and the operating expenses have increased to 26.22 percent. Duringthe year 2007, it reflects a favorable impact on net profit because costs increased at a faster rate

than sales.

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COMPARATIVE BALANCE SHEET [2007 & 2008]

TABLE NO: 2: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT

LTD.AS AT 31-03-08

ASSETS

PARTICULARS MARCH 31ST INCREASE /DECREASE


Fixed Assets

(Net Block)

Investments

Current Assets:

Inventories

Trade Receivables

Cash & cash equivalents

Short term loan & advance

Other current Assets

Total current assets

Total Assets

69,23,09,273

44,07,775,965

25,99,100,130

31,78,530,958

12,06,12,411

58,52,60,974

71,84,22,727

72,01,927,200

84,42,79,601

53,35,118,006

31,39,146,500

39,06,745,071

19,58,68,794

67,71,47,529

86,39,30,154

87,82,838,048

15,19,70,328

92,73,42,041

54,00,46,370

72,82,14,113

7,52,56,383

9,18,86,555

14,55,07,427

15,80,910,848

21.95

21.04

20.79

22.91

0.62

15.70

20.25

21.95

12,30,201,244 22,56,075,207 10,25,873,963 83.39


INTERPRETATION

From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,

for the years 2007 & 2008. By comparing the year 2008 with 2007 of Assets, the fixed assetshave increased to 21.95 percent and the current assets have increased by 21.95 percent. Finally,

the total assets were increased at 83.39 percent.

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TABLE NO: 3: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT

LTD.AS AT 31-03-08

LIABILITIES

PARTICULARS MARCH-31 INCREASE/ / DECREASE


Capital and reserves

Long term loans

Current liabilities

Short term borrowings

Trade payables

Other current liabilities

Short term provisions

Total current liability

Total liabilities

4,20,23,35,965

73,89,63,023

1,36,79,49,161

1,53,88,84,602

2,30,00,82,244

14,13,03,065

53,48,21,90,720

5,12,96,78,006

89,62,96,370

1,59,50,59,953

1,90,10,78,783

2,85,37,58,835

17,23,20,811

6,52,22,18,382

92,73,42,041

15,73,33,347

22,71,10,792

36,21,94,181

55,36,76,591

15,80,17,746

4,69,59,97,234

22.07

21.29

16.60

23.54

24.07

111.83

87.80

12,30,201,244 22,56,075,207 10,25,873,963 83.39


INTERPRETATION


for the years 2007 & 2008. By comparing the year 2008 with 2007 of Liabilities, the capital &reserves have increased to 22.07 percent and the current liabilities have increased by 87.80

percent. Finally, the total assets were also increased at 114.78 percent.

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TABLE NO: 4: COMPARATIVE INCOME STATEMENT OF K2K

INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-09



Net sales

Cost of goods sold

Gross profit(A)

Operating expenses

Employee benefitDepreciation &

amortization expenses

Total operating

expenses(B)

Operating income(A-B)

Non Operating Incomes

Other income

Non Operating

expenses

Other expenses

Profit Before interest &tax

Interest (finance cost)

Profit Before TaxTax

Provision for taxadjustments

Profit after tax

83,47,962,546

55,32,852,108

97,05,770,402

64,20,176,870

13,57,807,856

88,73,24,762

16.27

16.04

28,15,110,438 32,85,593,532 47,04,83,094 16.71

15,93,973,59713,60,39,414

18,54,620,46215,70,22,574

26,06,46,8652,09,83,160

16.3515.42

17,30,013,011 20,11,643,036 28,16,30,025 16.28

10,85,097,427

26,03,39,887

73,92,60,892

(47,89,21,005)36,30,47,171

11,58,73,834

14,35,34,982(11,76,672)

12,73,950,496

30,03,95,218

76,65,82,432

(46,61,87,214)42,21,47,873

4,40,39,341

16,56,22,07224,14,734

18,88,53,069

40,055,331

27,321,540

(94,51,08,219)5,91,00,702

(71,834,493)

22,087,09012,38,062

1740.

15.38

3.69

-197.3416.28

-61.99

15.39105.22

10,16,380,524 (11,91,67,667) (11,35,548,521) -11.72


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INTERPRETATION

From the above table, it shows that the comparative Income Statement of K2K Infra Structure

PVT. LTD., for the years 2008 & 2009. By comparing the year 2009 with 2008 of Income &Expenditure, the sales have increased 16.27 percent while the cost of goods sold has increased by

16.04 percent and the operating expenses have increased to 16.28 percent. During the year 2009,it reflects a favorable impact on net profit because costs increased at a faster rate than sales.


TABLE- 5: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT

LTD.AS AT 31-03-09

ASSETS



Fixed Assets

(Net Block)

Investments

Current Asset

Inventories

Trade Receivables

Cash & cash equivalents

Short term loan & advance



Total Assets

84,16,75,454

53,27,118,006

31,39,146,500

39,06,745,071

19,58,68,794

67,71,47,529

86,39,30,154

87,82,838,048

84,16,75,454

56,33,118,006

31,39,146,500

39,06,745,071

19,58,68,794

67,71,47,529

86,39,30,154

87,82,838,048

(30,60,00,000) -5.74

14,95,163,151 15,25,763,151 (30,600,000) -2.05


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INTERPRETATION


for the years 2008 & 2009. By comparing the year 2009 with 2008 of Assets, the fixed assetshave decreased to nil percent and the current assets have in decreased by 00.00 percent. Finally,

the total assets were decreased at -2.05 percent.

TABLE- 6: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT

LTD., AS AT 31-03-09

LIABILITIES




Long term loans

Current liabilities


Trade payables




Total liabilities

51,21,678,006

89,62,96,370

15,95,059,953

19,01,078,783

28,53,758,835

17,23,20,811

65,22,218,382

51,29,678,006

89,62,96,370

15,95,059,953

1,90,10,78,783

2,85,37,58,835

17,23,20,811

6,52,22,18,382

(80,00,000) -0.15

14,95,163,151 15,25,763,151 (30,600,000) -2.05


INTERPRETATION

From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2008 & 2009. By comparing the year 2009 with 2008 of Liabilities, the capital &reserves have decreased to -0.15 percent and the current liabilities have decreased by 0.00


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INTERPRETATION


PVT. LTD., for the years 2009 & 2010. By comparing the year 2010 with 2009 of Income &Expenditure, the sales have increased 38.86 percent while the cost of goods sold has decreased

by -78.02 percent and the operating expenses have increased to 36.78 percent. During the year2010, it reflects a favorable impact on net profit because costs increased at a faster rate than

sales.


TABLE-8: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT

LTD.AS AT 31-03-10

ASSETS



Fixed Assets

(Net Block)

Investments

Current Assets

Inventories

Trade Receivables

Cash & cash equivalentsShort term loan & advance



Total Assets

98,17,20,466

13,78,25,496

35,33,891,27

9

43,10,168,687

22,77,54,411

67,11,01,778

84,33,64,691

95,86,280,846

10,72,102,792

16,84,53,384

40,94,756,008

48,81,317,284

22,94,77,61332,02,35,507

69,63,34,622

10,22,212,103

90,382,326

30,627,888

56,08,64,729

57,11,48,597

17,23,202(35,08,66,271)

(14,70,30,069)

63,58,40,188

9.21

22.22

15.87

13.25

0.76-52.28

-17.43

6.63

10,70,582,68

1

22,62,768,219 11,92,185,538 111.36


INTERPRETATION


for the years 2009 & 2010. By comparing the year 2010 with 2009 of Assets, the fixed assets

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have increases to 9.21 percent and the current assets have in increased by 6.63 percent. Finally,the total assets were increased at 111.36 percent.


LTD.AS AT 31-03-10

LIABILITIES




Long term loans

Current liabilities


Trade payablesOther current liabilitiesShort term provisions


Total liabilities

5,13,76,78,006

4,56,67,531

1,85,47,20,876

2,20,12,54,3993,27,11,14,92220,03,73,037

7,52,74,63,234

5,17,76,78,006

2,57,41,711

1,96,68,81,070

2,69,04,22,0433,99,35,84,9052,94,19,00,378

11,59,27,884

4,00,00,000

(1,99,25,820)

11,21,60,194

48,91,67,64472,24,69,983

2,74,15,27,341

4,66,53,25,162

0.78

-43.63

6.05

22.2222.09

1368.21

54.01

10,70,582,681 22,62,768,219 11,92,185,538 111.36


INTERPRETATION

From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2009 & 2010. By comparing the year 2010 with 2009 of Liabilities, the capital &

reserves have decreased to 0.78 percent and the current liabilities have increase by 54.01 percent.Finally, the total assets were also increased at 318.49 percent.

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TABLE-10: COMPARATIVE INCOME STATEMENT OF K2K INFRASTRUCTURE

PVT LTD., FOR THE Y.E.31-03-11



Net salesCost of goods sold

Gross profit(A)

Operating expenses

Employee benefit

Depreciation &amortization expenses

Total operating

expenses(B)

Operating income(A-

B)

Non Operating

Income

Other income

Non Operating

expenses

Other expenses

Profit Before interest

& taxInterest (finance cost)

Profit Before Tax

TaxProvision for tax

adjustments

Profit after tax

13.47.74.58,8921,41,09,34,525

15,32,66,57,8321,00,59,46,476

184,91,98,940(40,49,88,049)

13.72-28.70

1,20,66,52,437 1,43,20,71,135 1,30,04,05,892 1086.81

2,57,51,67,308

17,64,20,242

294,90,53,759

19,99,09,366

37,38,86,451

2,34,89,124

14.52

13.31

2,75,15,87,550 3,14,89,63,125 39,73,75,575 14.44

(1,54,49,35,113)

41,02,71,136

1,02,30,31,156

(61,27,60,020)

57,54,27,601

4,03,32,41922,73,36,211

(38,14,909)

(1,71,68,91,990)

46,62,17,200

1,18,52,62,677

(71,90,45,477)

65,10,54,092

6,79,91,38525,78,82,058

(37,66,942)

3,26,18,27,103

5,59,46,064

16,16,31,521

1,33,18,05,497

7,86,26,491

2,76,58,9663,05,45,847

(47,967)

-211.13

13.64

15.80

217.34

13.73

68.5813.44

-1.26

(18,31,88,883) (18,61,23,731) (36,93,12,614) -201.60


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145

INTERPRETATION


PVT. LTD., for the years 2010 & 2011. By comparing the year 2011with 2010 of Income &Expenditure, the sales have increased 13.72 percent while the cost of goods sold has decreased

by -28.70 percent and the operating expenses have increased to 14.44 percent. During the year2011, it reflects a favorable impact on net profit because costs increased at a faster rate than

sales.



LTD., AS AT 31-03-11

ASSETS



Fixed Assets

(Net Block)

Investments

Current Assets

InventoriesTrade Receivables

Cash & cash equivalentsShort term loan &

advance



Total Assets

1,07,21,02,792

16,84,53,384

4,09,47,56,0084,88,13,17,284

22,94,77,61332,02,35,507

69,63,34,622

1,02,22,12,103

1,50,23,89,536

19,14,24,300

4,63,04,04,5545,56,96,78,732

26,07,70,01543,20,85,803

89,35,62,071

1,17,86,50,118

43,02,86,744

2,29,70,916

53,56,48,54668,83,61,448

3,12,92,40211,18,50,296

19,72,27,449

15,64,38,015

9.21

22.22

15.8713.25

0.76-52.28

-17.43

6.63

1,51,25,26,189 8,26,54,89,737 67,52,963,548 446.47


INTERPRETATION

From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2010 & 2011. By comparing the year 2011 with 2010 of Assets, the fixed assets

have increases to 40.13 percent and the current assets have in increased by 15.30 percent.Finally, the total assets were increased at 26.94 percent.

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146


LTD., AS AT 31-03-11

LIABILITIES




Long term loans

Current liabilities

Short term borrowingsTrade payables




Total liabilities

5,17,76,78,006

1,00,17,95,484

1,96,68,81,0702,69,04,22,043

3,99,35,84,905

29,49,00,378

8,94,57,88,396

5,42,76,78,006

1,83,26,08,504

2,57,60,01,2163,05,72,97,776

4,14,04,37,393

27,82,95,882

1,00,52,03,227

25,00,00,000

83,08,13,020

60,91,20,14636,68,75,733

14,68,52,488

(1,66,04,496)

1,10,62,43,871

0.78

-43.63

6.0522.2

22.09

1368.21

12.37

1,51,25,26,189 8,26,54,89,737 67,52,963,548 446.47


INTERPRETATION

From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2010 & 2011. By comparing the year 2011 with 2010 of Liabilities, the capital &

reserves have decreased to 4.83 percent and the current liabilities have increase by 12.37 percent.Finally, the total assets were also increased at 446.47 percent.

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148

INTERPRETATION


PVT. LTD., for the years 2011 & 2012. By comparing the year 2012with 2011 of Income &Expenditure, the sales have increased 25.25 percent while the cost of goods sold has increased by

31.42 percent and the operating expenses have increased to 28.47 percent. During the year 2012,it reflects a favorable impact on net profit because costs increased at a faster rate than sales.



LTD.AS AT 31-03-12

ASSETS



Fixed Assets

(Net Block)

Investments

Current Assets

InventoriesTrade Receivables

Cash & cash equivalentsShort term loan &

advance



Total Assets

1,50,23,89,536

19,14,24,300

4,63,04,04,5545,56,96,78,732

26,07,70,01543,20,85,803

89,35,62,071

1,17,86,50,118

1,70,56,64,858

19,14,29,300

5,12,25,44,8875,86,34,80,854

8,19,02,61648,00,80,455

1,35,17,98,396

1,28,99,80,721

20,32,75,322

5,000

49,21,40,33329,38,02,122

(17,88,67,399)4,79,94,652

45,82,36,325

1,17,21,15,709

13.53

0.02

10.635.27

-2.6211.11

51.28

994.46

6,49,63,08,360 6,67,54,21,215 17,91,12,855 27.58


INTERPRETATION


for the years 2011 & 2012. By comparing the year 2012 with 2011 of Assets, the fixed assetshave increases to 13.53 percent and the current assets have in increased by 994.46 percent.

Finally, the total assets were increased at 10.95 percent.

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149


LTD., AS AT 31-03-12

LIABILITIES




Long term loans

Current liabilities

Short term borrowingsTrade payables

Other current liabilitiesShort term provisions


Total liabilities

5,42,76,78,006

6,34,27,127

2,57,60,01,2163,05,72,97,776

4,14,04,37,39327,82,95,882

1,00,52,03,227

5,43,16,21,283

6,76,45,165

3,03,62,04,2853,79,34,14,229

4,89,59,94,8463,59,34,314

1,17,61,54,767

(4,88,45,15,723)

42,18,038

46,02,03,06973,61,16,453

75,55,57,453(24,23,61,568)

1,07,56,34,445

-89.99

6.50

17.8624.08

18.25-87.09

1070.07

6,49,63,08,360 6,67,54,21,215 17,91,12,855 27.58


INTERPRETATION


for the years 2011 & 2012. By comparing the year 2012 with 2011 of Liabilities, the capital &reserves have decreased to -89.99 percent and the current liabilities have increase by 1070.07


TREND ANALYSIS

TREND ANALYSIS [20072012]

TABLE- 16: STATEMENT SHOWING TREND PERCENTAGES OF K2K

INFRASTRUCTURE PVT LTD., FROM 2007-2012

YEA

RS

SALES STOCKS PROFIT BEFORE TAX

AMOUNT PERCENTAGE

AMOUNT PERCENTAGE

AMOUNT

PERCENTAGE

20082009

20102011

2012

8,34,79,62,546

9,70,57,70,402

13,47,74,58,

100116.26

138.86113.72

125.35

3,13,91,46,500

3,53,38,91,279

4,09,47,56,

100112.57

115.87113.08

110.63

11,58,73,834

4,40,39,341

4,03,32,4

10038.01

91.58168.57

121.61

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150

892

15,32,66,57,832

19,21,20,03,939

008

4,63,04,04,554

5,12,25,44,887

19

6,79,91,385

8,26,82,452


INTERPRETATION

From the above Table-4.16, it shows that the Trend Percentages of K2K., from the years 2007-2012. By analyzing the years from 2007 to 2012 of Trend Percentages, the sales have increased

to 125.35 percent over the five year period while the stock fluctuates up to 2010 & has increasedby 110.63 percent in 2012 and the Profit before Tax is fluctuating & have increased to 121.61

percent in 2012. The trend look different if evaluated after five years. The trend percentages forprofit appear to be higher because the base year amount is much smaller than the other balances

and also fluctuates.

CHART-17: TREND PERCENTAGES OF K2K INFRASTRUCTURE PVT LTD.,FROM THE YEARS 2007-2012

5. FINDINGS

The sales factor is gradually increasing from the year 20008 to 2012.

The stock is also maintained in a satisfactory level. But it holds more in 2012.

There is a fluctuation in the profit and also huge loss occurred in 2011. The assets must be utilized efficiently. There is a decreasing trend in the liabilities.

0

20

40

60

80

100

120

140

160

180

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

Percentages

Years

Trend Percentage

SALES

STOCK

PROFIT BEFORE TAX

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htt // j

The share holders fund is increasing gradually. So that it initiates the share holders toinvest more in the company.

The company also maintains the reserves in the satisfactory level to meet thecontingencies.

6. CONCLUSION:

The above analysis and the interpretation done with the help of the tools like Comparative

Income Statement & Balance Sheet & Trend Analysis. The sales, stock, profit before tax,current assets, current liabilities and all the financial factors are strong enough to increase the

profit in future also.

This study shows that the overall financial performance of K2K Infrastructure Pvt Ltd.,

is to the mark during the year 2012 in comparison to the rest of the past four years. Theirfinancial growth is optimum even a loss occurred during the year 2008 and they had a tax benefit

in the year 2009.

At last, I conclude that by doing this project work, I got a view about the K2K

Infrastructure Pvt Ltd., a major producer of construction materials in the country. The industryacts as a manufacturer, distributor and has acquired a worldwide reputation for its innovative

skills, the reliability of its products and the quality of its services. From the financial statementanalysis the companys overall position is good and also the performance of the company is

satisfactory.

7. REFERENCE

BOOKS

1. Annual report of K2K infrastructure Pvt Ltd., from 20072012.2. Pandey I.M. 1997, Financial Management, Vikas Publishing House Private Limited,

New Delhi.

3. Sharma R.K. Shashi and K.Gupta 1996, Management Accounting and FinancialManagement.

4. Prasanna Chandra, Financial Management Theory & Practice, Tata McGraw-Hillpublishing Company Limited, New Delhi.

WEBSITES

www.k2kinfra.net

www.investpedia.com

www.wikipedia.com

www.moneycontrol.com
http://www.k2kinfra.net/http://www.investpedia.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.investpedia.com/http://www.k2kinfra.net/

Documents

10.13, Dr. G. Malyadri