51630203 Project on Fixed Assets Management(1)

8/12/2019 51630203 Project on Fixed Assets Management(1)

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A

PROJECT REPORT

ON

FIXED ASSETS MANAGEMENT

UNDERTAKEN

AT

RAYMOND LIMITED.

VAPI.

1


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2. OBJECTIVES:

MAIN OBJECTIVE:-

To Study the Fixed Assets Management System using At

Raymond Limited.

SUBSIDIARY OBJECTIVE:- later

3. DESIGN/METODOLOGY/APPROAC:

The project report includes the information regarding the company Fixed

Assets Data of Raymond Ltd. !additional"

!. SAMPLING METODS: later

". STATISTICAL TOOLS:

For Analysis purpose different charts and other o#ser$ation data has#een studied through %hich & came out %ith the interpretation for my

project.

#.TE FINDINGS OF TIS STUDY: later

2


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INDEX

SRNo.

PARTICULAR PAGE

NO

' Background of the company

( Vision, Mission and Values

) Company Profile

* Group Companies

+ Joint Ventures, Brand Portfolio

- Faric !utlines

Plant "etails

#


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/ $%!& 'nalysis

'0

!rgani(ation $tructure

'

'

Milestones

'(

&echnological Breakthrough

')

!)er)ie* of other "epartments

'*

Production "epartment

'

+

General $tore and Commercial "epartment

',

$upply Chain Management "epartment

'-

'ccount "epartment

'

Pro+ect eport F-./" '$$/&$

'

/

-ntroduction

(0

( ole of other functional "epartment

0


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/)0

'nalysis Findings Graphical Presentation3

)

'

ecommendation

)(

Conclusion

))

Biliography

4


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BACKGROUND OF TE COMPANY

The Raymond 1roup %as incorporated in '/(+2 and %ithin a span of a

fe%

years transformed from #eing an &ndian textile major to #eing a glo#al

conglomerate.

RA3M45D deals in mainly three sectors6

$. A%&'(&)*:

Raymond ltd is one of the first co7operate house in &ndia to launch Air

charter ser$ice in &ndia in '//, and since then it has #een al%ays a

%ay

ahead of Raymond A$iation.

2. E*+&*,,&*+:

8.9.Files : tools and Ring ;lus A of mar?et share in %orsted suitings in

&ndia

: ran?s amongst the first four fully integrated manufactures of %orsted

5


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suiting in the %orld.

The Raymond@s endea$or to ?eep nurturing


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Raymond also has some of the most highly respected apparel #rands

in

their portfolio6 Raymond ManBoni ;ar? A$enue Eolor ;lus ;arx e6

appG

And 5otting Hill.

The Raymond 1roup also has an expansi$e retail presence esta#lished

through the exclusi$e chain of The Raymond Shop and stand7alone

#rand

stores for ManBoni ;ar? A$enue Eolor ;lus ;arx e6 appG And

5otting

Hill.

=ith a +00 million ISJ turno$er Raymond is today one of the largest

players in fa#rics designer %ear denim cosmetics : toiletries

engineering

files : tools prophylactics and air charter ser$ices in national and

international mar?ets. All Raymond plants are &S4 certified le$eraging

oncutting7edge technology that adheres to the highest


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Raymond the most desired %or?place for top talent

HR Mission

=e commit to the HR Kision of ma?ing Raymond the most desired

%or?place for top talent =e %ill stri$e to %ea$e in the core

Raymond $alue

namely Nuality Trust Leadership and Cxcellence in all our actions :

HR

processes so as to ma?e e$ery Raymondiate a complete man.

VALUES

Trust

Nuality

Leadership

Cxcellence

8


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COMPANY PROFILE

5ame of the company 6 Raymond Limited !Textile di$ision"

Address of Registered 4ffice 6 ;lot '+,OH 5o. ( adgaon

Ratnagiri

*'+ ,'(.

Factory Location and Address6 5 .H. 5o. 9had?i Id%ada Tal7;ardi

Tel 5o 6 0(,07)(+((*)

Fax 5o 6 0(,07()*0)((

3ear of Csta#lishment At Kapi 6 (00+

usiness Acti$ities 6 Manufacturing ;rocess of Fi#re to

Fa#ric

oard of Directors 6 Dr. Kijaypat Singhania 1autam Hari

Singhania .9. 9edia 5ana Ehudasama

.K.harga$a I.K.Rao &.D.Agar%al

5a#an?ur 1upta ;.9.handari

19


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an?ers 6 !'" an? of &ndia

!(" an? of Maharashtra

!)" an? of America

!*"Eentral an? of &ndia

!+" Eity an? 5.A.

!," HDFE an? Limited

!-" The Hong?ong and

Shanghai an?ing

Eo7operation Limited

!" Standard Ehartered

an?

Stoc? Eode 6 om#ay Stoc? Cxchange Ltd 7+00))0

5ational Stoc? Cxchange of &ndia7

Raymond CN

Auditors 6 Dalal : shah

=e#site 6 =%%.Raymondindia.Eom

11


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GROUP COMPANIES

There are '0 Eompanies in Raymond 1roup.

Raymond Ltd.

&t is among the largest integrated manufacturers of %orsted fa#rics in

the %orld.

Raymond Apparel Ltd.

Raymond Apparel Ltd. has in its folio some of the most highly

regarded apparel #rands in &ndia 7 ManBoni ;ar? A$enue Eolor ;lus

;arx e6 and appG And 5otting Hill.

Eolor ;lus Fashions Ltd.

The company %as ac


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C$er lue Apparel Ltd.

A state7of7the7art denim garmenting facility.

Eele#rations Apparel Ltd.

A facility set7up for the manufacture of formal shirts

8.9. Files : Tools

A leading player in the engineering files : Tools segment and the

largest producer of steel files in the %orld.

Ring ;lus A


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14

1 M'*)*&

ManBoni is a luxury lifestyle #rand pro$iding the #est in contemporary

international style : luxury. The #rand offers the discerning customer a

super premium range of suits trousers jac?ets shirts and accessoriessuch as ties cufflin?s #elts soc?s shoes and leather #ags.

P' A%,*4,

;ar? A$enue is a premium lifestyle #rand and has #een the single

largest formal %ear #rand in &ndia for the past t%o decades.

C)) P45

Eolor ;lus is among the largest smart casual #rands in the premium

category. The company ac


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FABRIC

6)5(,7 54&(&*+5:

;ure %ool ;oly%ool #lended fa#ric

)) million meters

* integrated plants in &ndia

Raymond %ith an installed capacity of )) million meters of %ool : %ool

#lended fa#rics is the leading integrated producer of %orsted suiting

fa#ric in

the %orld. &t has four plants located in the states of Maharashtra 1ujarat

and

Madhya ;radesh. The company exports its suiting fa#ric to more than ++

countries including ISA Eanada Curope 8apan and the Middle Cast.

Raymond an inno$ator in the &ndian textile industry has de$eloped a

heritage of in7house s?ills for research : de$elopment. This has resultedin

path7#rea?ing de$elopments of ne% products %hich are today the

corner

stones of the %orsted suiting industry in &ndia. The 1roup has mastered

the

craft of producing suiting using %ool from 0s to ()0s count #lends

%ith

superfine polyester and other specialty fi#ers li?e Eashmere Angora

Alpaca

Sil? Linen etc.

15


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T8'*, P'*(

This is the mother plant and is the centre of competence for %orld class

manufacturing and design facilities. =ith decades and expertise and

finely honed s?ills this plant is a treasure house of ?no%ledge for

producing superfine %orsted suiting fa#rics.

C88&*79'' P'*(

The Raymond Ehhind%ara plant set up in '//' is a state7of7the7art

integrated manufacturing facility located +- ?ms a%ay from 5agpur in

Eentral &ndia. uilt on '00 acres of land the plant produces premium pure

%ool %ool #lended and polyester $iscose suiting.

This plant has achie$ed a record production capacity of '*.,+ million

meters gi$ing it the distinction of #eing the single largest integrated

%orsted suiting unit in the %orld.

J'+')* P'*(

16


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A ne% manufacturing facility %as set up at 8algaon to meet the

increasing demand for %orsted %oolen fa#rics in '/-/. &n (00,%orld

class carded %oolen unit Raymond Fedora Ltd also set up.

V'& P'*(

Raymond has increased its %orsted suiting capacity #y ) million

meters as part of the second de$elopmental phase of the Kapi plant.

After this expansion Raymond %ill ha$e a total capacity for

manufacturing )' million meters of %orsted suiting per annum.

Modeled to meet international standards the Kapi plant has #een

set up on ''( acres of lush green land %ith Hi7tech machinery such as

%arping e


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Multi7 culture community %ith communal harmony

Eurrently the unit is engaged in manufacturing of premium %orsted

suiting fa#rics and is e


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S6OT ANALYSIS

S(,*+(8:

Location Ad$antage =ater a$aila#ility Ra% material A$aila#ility S?illed la#our at lo% cost Modern %orld class

machineries Schematic Layout

6,'*,55:

Current $cenario of market /ffect of go)ernment policies "elay in Procedure3

O)(4*&(&,5:

-ncrease focus on productde)elopment

199:capcity utili(ation -ncrease foreign market

usiness

T8,'(5 :

Competition in "omesticMarket

-nternational market /cological social a*areness egional 'lliances

29


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ORGANISATIONAL STRUCTURE

21


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22


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MILESTONES

$=2"7 Setup of The Raymond =oolen mill in the area around Thane cree?.

$=!! 7 Lala 8uggilal Lala 9ailashpat Singhania too? o$er The Raymond

=oolen Mill. The mill %as primarily ma?ing cheap and coarse %oolen

#lan?ets and modest


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$==$7 A ne% manufacturing facility %as set up at Ehhind%ara near 5agpur.

$=="7 Superfine pure %ool collection under the Lineage Line !Super '00S to

Super '*0S".

$==# 7 The Renaissance Eollection made of Merino %ool #lended %ithpolyester and specialty fi#res !Super '00S to Super '*0S".

$==#7 Raymonds denim2 focusing on


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2>>" 7 Raymond achie$ed a rare feat and a historical milestone %ith the

creation of the %orlds finest %orsted7suiting fa#rics from the finest %ool

e$er produced in the %orld7 The Super ()0s made up of ''. micron of %ool.

2>>" 7 Launch of Cxpressions an ex>#7 Set of Raymonds third %orsted unit at Kapi in 1ujarat. Raymond no%

has ) state of the art units %ith a com#ined capacity of )' million meters of

%orsted fa#ric.

2>>#7 Launch of design studio in &taly for cutting edge design capa#ilities

for exports and domestic #rands.

2>>#7 Set up of %orld class carded %oolen unit Raymond Fedora Ltd in

8algaon.

2>># - Set up of 1reenfield shirting unit at 9olhapur producing high $alue

cotton shirting. This facility is set up as part of the companys 8K %ith 1ruppo

am#aiti.

2>>#- Set up of 8.9 Tala#ot Ltd 8K %ith M4 France for the manufacturing

of files and rasps.

2>>#- Launch of appG 4ur ?ids %ear #rand %ith first store in Ahmeda#ad

2>>@7 Cntered into joint $enture to retail premium #rand 1AS@ in &ndia.

2>>@-Launch of ne% #rands for %omen@s %ear.

2>>?-Launch of Raymond Finely Erafted 1arments@7 readymade apparel

under Raymond #rand

2>>?7launch of 5ec?ties : More@7 ne% format store for accessories.

24


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TECNOLOGICAL BREAKTROUGS

Raymond has #een pioneering technological #rea?throughs o$er the

years and %as the first to introduce ;olyester7=ool and ;olyester7

=ool7Kiscose in the &ndian mar?et. During the last decade many path

#rea?throughs %ere made.

$==": Superfine pure %ool collection under the Lineage Line !Super '00s to

Super '*0s".

$==#6 The Renaissance Eollection made of Merino %ool #lended %ith

polyester and specialty fi#ers !Super '00s to Super '*0s".

$===6 The Ehairmans Eollection of Super '+0s made from Merino =ool and

Eashmere follo%ed #y Super ',0s to Super '/0s.

2>>26 Super (00s !').+ microns" fa#rics under the Ehairmans Eollection.

2>>36 Applause =ool7Rich Home =asha#le Suiting.

25


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2>>36 Super ('0s !').( microns" fa#rics under the Ehairmans Eollection.

2>>!6 Super ((0s !'(.- microns" fa#rics under the Ehairmans Eollection.

2>>"6 Raymond achie$ed a rare feat and a historical milestone %ith the

creation of the %orlds finest %orsted7suiting fa#ric from the finest %ool e$erproduced in the %orld7 The Super ()0s fa#ric made up of ''. micron of

%ool.

2>>"6 Launch of Cxpressions an ex


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Eonfidential ad$ice to internal customers in relation to pro#lems at

%or?

Eareer de$elopment

Eompetency Mapping

ENGINEERING DEPARTMENT

Cngineering department includes four major su# departments6

Mechanical

Clectrical

&nstrumentation

Ei$il

The major acti$ities of Mechanical and Clectrical department are to

fulfilthe follo%ing re


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Clectricity

Air

IT DEPARTMENT O,;(&%,5

To pro$ide computer system facility to all department.

To pro$ide internet access facility to all department.

To facilitate company login &D creation to officers.

To facilitate printouts and erox in se$eral department.

To facilitate net%or?ing of all computer system in the company.

To chec? and sol$e the pro#lems related to computer system

accessing in the factory premises.

&T comprises in three parts6

28


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Hard%are

Soft%are

Administrator

There are three types of ser$er inside the &T room.

Data#ase ser$er

=indo%s ser$er

Monitoring ser$er

UALITY CONTROL DEPARTMENT

Nuality Eontrol is concerned %ith e$aluation of test data and its

application to the control of textile process ra% material intermediate

product and final product. &t is concerned not only %ith


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Maintenance and cali#ration of process control e


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stores and the $erification of


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SE4IR&51 '*000

9g.1R&C1C E4M&51 ')0

0

9g.

-000

9g.

E45KCRTCR -00

0

9g.

-000

9g.

RCE4M&51 )(0

0

9g.

'*000

9g.

D3C&51 )(0

0

9g.

'*000

9g.

S;&55&51 )(0

0

9g.

-+00

9g.

=CAK&51 -00

0

mtrs

'*0

00

mtrs

(000

mtrs

F&5&SH&51 '+000

mtrs

(+000

mtrs

*0000mtrs

F4LD&51 '+0

00

mtrs

)00

00

mtrs

*0000

mtrs

=ARC4ISC '+0

00

mtrs

)00

00

mtrs

'+0000

mtrs

#0


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PRODUCTION PROCESS:

#4

$C!;-


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SCOURING

Scouring is the process of cleaning the ra%7%ool %hich containsnatural 1reece and foreign particles li?e dirt dust7#urrs and t%igs hey

and other $egeta#le matters. 5ormally fi#er length is + to / cm and

a#o$e and fi#er diameter is '- to (, micron. Here the ra% material is

coming in form of #ales. 4ne #ale %eight has '+0 to ',0 ?g. ale

opening is done #y manually spreading of fi#ers from #ale on the floor

%ith the help of %or?ers. A special mixture of lu#rication oil and %ater

is sprayed on the spreaded fi#ers. Here lu#rication of fi#ers is done so

that %ool %ill #e going in to carding and a$oids any static generation

further processing of the %ool. After completing the process of

scouring clean %ool pass on to the next department.

#5

SE4IRCD

ALC

P!C/$$-


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GREY COMBING

This department is the preparatory department #efore going for dyeing

or re7Eom#ing. According to the ra% material it has t%o sections !a"

=ool !#" ;olyester. &n this process the ra% materials goes through

$arious su# processes li?e carding gilling and com#ing %ith respect to

%ool and su# processes li?e con$erter and gilling for polyester. The

#asic aim of this department is to remo$e the impurities in the fi#ers

and create e


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To impart luster

The process flo% of 1rey Eom#ing is gi$en #elo%6

#7

C'"-


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CONVERTER:

Eon$erter machine is only for polyester materials. The flat %e# of

continuous filament called T4= %hich is fed to the con$erter and cutinto the desired staple length so that it can #e used to spin the staple

yarn finally the filaments are con$erted to sli$er and fed to cans Then

sli$er fed to gilling machines so that fi#er #ecomes more parallel and

e$en.

#8

C!


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DYEING

This is the one of most important department of all #ecause here the

fi#ers are dyed to suita#le shades as per the customer re


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RE-COMBING

After dyeing the dyed materials are going to Re7com#ing department.

&nput in terms of %ool tops polyester tops etc go to the Re7com#ing

section. Then they #lend these according to their re


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SPINNING:

Spinning is the process in %hich fi#ers are con$erted into yarn %hich is

actually used for the %ea$ing and to ma?e the fa#ric here the Re7

com#ed tops are again passed through gilling machine to increase the

strength of the fi#er and to prepare sli$ers that can #e fad into ru##ing

frame no% the sli$er is con$erted into ro$es #y applying draft and

dou#ling operations and reduction of sli$er@s cross sections. 5o%

ro$ing spools are #rought to ring frame and ro$ing is con$erted into

yarn #y roller drafting system. After the ring frame spinning is done

yarn is su#jected to steaming #ecause highly t%isted yarns are prone

to snarling during %inding. After the spinning of the fi#ers on the ring

frames it is chec?ed for the uniformity and #rea?ages in the Auto7Eonner section and also remo$e the defects li?e slu#s neps thic?

place thing place etc. and to o#tain suita#le pac?ages for further

processing. The yarns in the corn and cheese form are recei$ed from

02

/C!MB-


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auto7%inding machine here t%o yarns are just %ound together %ithout

any t%ist. Then t%isting is done for impro$e the e$enness strength

and elongation. After the T.F.4 the pac?ages is again sent to steaming

to reduce snarling tendency and finally all yarn pac?ages sent to the

yarn room department for storage.

The process flo% of spinning is gi$en #elo%6

Eo

unt elo% )0 5m

0#

$P-


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Siro

Lycra

Siro Lycra

and

Single =eft

YARN ROOM:

This is the storage room for the yarn that are produced in the spinning

section and the yarn that are outsourced. &t acts as a #ridge #et%een

the Spinning and the =arping stage of the production. The main

function of yarn room is to arrange all yarn pac?ages according to

correct shade num#er lot %ise etc. The yarn is %eighted and entry is

done in computer. 3arn needed for %arping and %ea$ing is determined

#y S.E.M department. &f yarn is not sufficient then it is imported from

$arious exporters li?e CLC15T S;&55CRS H&=A5& =CLS;I5 54KA

;CTR4EHCM&EALS SA1AR T=&STCRS K&9RAM =44LC5 etc or other

plants of RA3M45D. &t is the only section that does not add $alue to

00

$&/'M

';&! C!


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the in$entory #ut despite that is critical for the smooth functioning of

the processes. The capacity of the yarn room is nearly a#out ')0 tones

of the yarn.

3arn Room is an intermediary storage location for yarns and it comes

in #et%een the spinning department and the %ea$ing department in

the process flo%. The yarn room at Raymond Kapi currently stores (+0

T of yarn on an a$erage. To ma?e the storage and retrie$al of the

yarns simpler and systematic =arehouse Management System !=MS"

is trying to #e implemented in Kapi. Ho%e$er implementation of =MS

re


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$P-


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3arn room currently stores (+0 T of yarn on an a$erage.

The #rea?up of this figure on the #asis of the type of yarn is sho%n

#elo%.

T, )Y'*

4'*(&(

Deco 3arn , TKiscose3arn

, T

Texturised

3arn , T;= 3arn '-* T;K 3arn + TAll %ool * T

For #ar coding purposes a yarn is distinguished from another on the

#asis of a com#ination of the follo%ing parameters6

'. atch no.(. Eount). lend*. Material+. Source,. =eight-. Date of receipt. Date of deli$ery

06


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T%o yarns though they may #e of the same count #lend and material

cannot #e used for the production of the %arp of the same fa#ric

unless they ha$e the same #atch no. Any $iolations to this are su#jectto the discretion of the SEM department. Hence #atch no. is used as

the primary ?ey for a #ar code. atch no. %hen fed in for a yarn %ill

gi$e other rele$ant details. A single sales order can ha$e se$eral #atch

num#ers %hile a #atch num#er %ill correspond to only one sales

order. =hene$er a #ar code is entered it should return details of the

yarn including the #in O trolley locations %here it is stored. Similarly

the =MS should #e a#le to pro$ide information of the yarns contained

in that #inO trolley and ho% much capacity is remaining in it %hen a

#in num#er is entered.

6ARPING

The yarns %hich are coming from Spinning Section are going for

%inding for preparing re


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Sectional %arping is a process of preparation of %arp yarn for process

of creeling here length of %arp yarn is determine #y length of fa#ric

according to considering the factor li?e shrin?age %eight loss etc.

=axing is done during %arping and #eaming process to ma?e %rap

yarn smooth so that there %ill #e minimum #rea?age on loom. 9notting

is a process of ma?ing ?nots of %arp yarn on #eam to achie$e %arp

length for particular length of fa#ric. Dra%ing in is the process of

passing of %arp yarn through the eye of healds according to peg plan.

Denting in this process this plan is descri#es the arrangement of the

%arp ends in the reed. Denting plans are entirely dependent on the

end density and num#er of dents per centimeters

&n the reed though there are some fa#rics that re


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6EAVING

=ea$ing is the department %here #y means of simple interlacement

of %arp %eft and sel$edge@s t%o sets of threads are con$erted in to

fa#ric. The #eam from the %arping section is used here to prepare the

real fa#ric that %e ?no%.

;assage of %arp yarn through looms the %arp yarns are contains on

%ea$er@s #eam at the #ac? of loom each ends are successfully passed

through each of drop pin eyes %hich is an essential part in stopping

the loom in e$ent of a #rea? in any of the %arp yarn then it is passthrough the eye of heads through gaps #et%een the %ire of reed

%hich is the com# light structure in front of the reed %arp and %eft

yarns are com#ined together to form fa#ric %hich is dro%n for%ard to

49

%'P- B/'M-

';&! "'%-


51/103

#e store on the cloth roller. After completing pre7decides length of the

fa#ric the cloth roller is gi$en to grey perching ta#le. Here $isi#le

inspection of fa#ric is done. The fa#ric is pass o$er the frosted glass

%ith light #ehind it and it inspect $isually if any defects are there then

the %or?er gi$e some mar? on fa#ric %ith some mar?ing material

%hich is easily remo$a#le. Then material is hando$er to mending

department.

The process flo% of %ea$ing is gi$en #elo%6

41

%/'V-

?!'"-/""-/C-


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The process flo% of Mending is sho%n #elo%6

FINISING:

After ta?ing fa#rics from mending department the #atch %ise

arrangement is done in finishing department. The term finishing means

completing the manufacture of cloth #y surface treatment. Finishing is

an essential process for textile goods #efore they are put on the

mar?et. There are three types of finishing phases

=et

4#

G/= P/C>-


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Dry

1rey finish

The main o#jecti$e of finishing are67

To impro$e the appearance of the fa#ric that is ma?e it moreattraction or lustrous.

To impro$e the feel of the fa#ric.

To co$er faults in original fa#ric.

To increase the %eight of the fa#ric.

To impro$e the %ea$ing


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Batching

Super Finishing

TMT

Super Finishing

Pressing

Damping

Semi Perch

Shering

2nd Drying

Rope Opening

Rope Scouring /Resin

Singing

Shearing

Heat Setting

Resin

Prescouring

44

Finishing


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FOLDING

After completion of finishing process the fa#ric transfer to folding

department here the full finished fa#ric comes from finishing

department is #eing folded. The first step of folding process is to ma?e

grey sample made for future use then samples are #eing matched %ith

the standard fa#ric sample from chhind%ada plant. After that the fa#ric

is chec? on perching machine for their


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G r ey S a m p le M a in g

S t o r age o ! F a " r ic

# e ig h i n g

P ac ing

T ag $ t tach ing

P ape r T r ans ! e r P as t ing

%app ing&D o m e s t ic M a r e t' R o llin g&( )po r t M a r e t'

F lagg ing

F a c e* B ac s i de + nspec t i ons

%a" T e s t ing&( )po r t M a r e t F a" r i c'

M e n d i n g

F in i sh ,he ing

S a m p le M a t c h in g

46

Folding


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6AREOUSE AND DISPATC

After folding department fa#ric is transfer to %arehouse for final

storage then final pac?ing. The material is first di$ided into


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MATERIAL ANDLING

Material handling is defined as mo$ement and storage of material at

the lo%est possi#le cost through the use of proper methods and

e


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)

*

Dyeing

Recom#ing

Dyed top trolleys Eheese creel

trolleys Clectrically operated

Eranes

Roller cans Finish top trolleys Tractor7trailer

train!MCL" ;allets

+ Spinning Roller cans Ereel trolleys o##in trolleys

, 3arn room Ereel trolleys For? lift truc?s and truc?s Stac?er

- =arping eam lifter trolleys Heald shaft trolleys o##in trolleys

=ea$ing 1aiting trolleys Fa#ric #eam trolleys

/ Mending Folding fa#rictrolleys

=ooden pallets

'0 Finishing Folding fa#rictrolleys

'' Folding Trolleys

'( =arehouse and truc?s

59


61/103

Some of the miscellaneous handling e


62/103

Supply Ehain ;lanning

). Eore ;rocesses

;rocurement : &n#ound Logistics

Sales 4rders

Ra% Materials

Spare ;arts

4utsourcing Eapacities

Factory ;lanning : ;roduction

Eapacity alancing

Deli$ery Eommitments

;riority setting

&nternal Follo% up

Sales : 4ut#ound Logistics

=are House Stoc? Maintenance

Deli$ery ;lanning

1ood Dispatching

*. Support ;rocesses

Financial : Eost Management

Maintenance : Cngineering

Nuality Management

Human Resources

SEM also focuses on the ci$il : export mar?eting. SEM is done these

acti$ities on the #asis of Ma?e To Stoc? : Ma?e To 4rder. Kapi SEM

has follo%ing 9ey Result Areas.

Eommitment to Sales

52


63/103

Timely Deli$ery

Ra% Material A$aila#ility

Maximum ;roduction #y using minimum Eapacity

Help ;roduction Departments to impro$e


64/103


65/103

I*%)&;, %,&&;'(&)*

&n$oices are $erified against the purchase orders made. The


66/103

an? #oo? and pass #oo? is maintained is #y the accounts

department. Difference in #an? charges is reconciled #y the accounts

B47+,(

The expenses %hich are incurred for production the estimation of

these expenses is sent #y $arious plants to the accounts department.

After getting estimation from the entire plants #udget is prepared #y

the accounts department and sent to the head office for appro$al.

2. C'58 '*'+,,*(

A certain le$el of cash is maintained for %or?ing capital re


67/103

F4*7 M'*'+,,*(

C$ery department estimates the expense to #e incurred in the coming

month and gi$es this estimate to the accounts department. Some

statutory payments li?e electricity #ills %ater #ills also included in

these. Accounts department intimate this to head office and as? for

funds for these expenses.

At the end of e$ery month stoc? sho%n in SA; should #e matched %ith

the physical stoc?. Audit for that is conducted on any day in a month.

S('(4() P',*(5Statutory payments li?e 1C #ills %ater #ills and CT; #ills are also

made #y the accounts department.

FINANCIAL IGLIGTS:

P'(&;4'5 BSE NSE

5o. of Shares/''(*/*

'0+/,(/)

Highest Share ;rice!Rs.&n Lacs")0)./+ )0(

Lo%est ;rice Share!Rs.&n Lacs" ,.' ,-./+

Elosing Share ;rice as on )'.).0/-,.*+ -,.'+

Mar?et Eapitaliation as on )'.).0/ !Rs. &n

Lacs"

*,/(

, *,-*(

56


68/103

&his graph sho*s the continuous increase in the total assets of the last fi)e yearsE-t

indicates the company has good in)estments in oth fied and current assets as *ellE

-n 2998,company facing loss as per the calculation of profit efore taE %e can see that in

2996, the company has more than 299 ?acs sE Profit efore taE

&he reported net profit is good in last 0 yearEBut in current year 2998,the company facing

loss of more than 299lacsE &his happens ecause of the hea)y loss in eport usiness and

due to recessionE

57


69/103

BALANCESHEET

58


70/103

69

P'(&;4'

M';82>$>

M';82>>=

M';82>>?

M';82>>@

M';82>>#

SOURCES OFFUNDS :

Share Eapital-.01

-.01

-.01

-.01

-.01

Reser$es Total

..

..30

.4-3-4

.00-54

.25671

..213-

Total ShareholdersFunds

..725.

..2-51

.05121

.03-.-

..1556

Secured Loans73-5-

1-113

34246

3--1-

36--1

Insecured Loans65373

67-22

07672

22473

22.2

Total De#t.2327.

.06347

17-7-

717-.

7-711

Total Lia#ilities

2623-2

267243

227346

2.6077

.53712

APPLICATION OFFUNDS :

1ross loc?

.7

.064

.744-6

.0636.

.20440

.0--70

Less 6

AccumulatedDepreciation77251

74.-

-2311

33051

-77--

Less6 &mpairmentof Assets 4 4 4 4 4

5et loc?56462

55546

7.530

-7-43

-1547

Lease Adjustment 4 4 4 4 4Eapital =or? in

;rogress6.-6

-2..

.031

13-5

.3-43

&n$estments15.75

11135

.46704

51667

70--

Eurrent AssetsLoans : Ad$ances

&n$entories216

3064

602576

210--

0.546

Sundry De#tors25-53

04661

21515

2-177

26167

Eash and an?2-3-

6-1

2.12

23-2

2340


71/103

Profit & loss Account

Particul

ars

Mar-

10

Mar-

09

Mar-

08

Mar-

07

Mar-

06

&5E4MC 6

SalesTurno$er

.03415

.642.-

.06261

.04-16

.06463

Cxcise Duty605 .64- .675 .335 2402

5et Sales .06-34

.011.4

.027-5

.25.23

.024.0

4ther&ncome

.331.

....-

.673.

.5360

.4717

Stoc?adjustment

867-2

2-.7

3415

645- .122

Total &ncome.636

-5.323

60.32-

45.327

-6.66-

22

C;C5D&TIRC 6

Ra%Materi

als01..

76644

261.7

505.6

.6476

0

po%er : fuelcost

15--

1516

12.3

1300

501.

CmployeeEost

2657.

23-72

22771

2.1.5

.55-6

4therManufacturing Cxpenses

.-533

.5572

243-3

.13--

.55-6

Selling andAdministration Cxpenses

2.016

20.50 2.72

.547-

.322-

MiscellaneousCxpenses

.20-5

60231

1527

.4715

.2015

Less6 ;re7operati$eCxpenses

4 4 4 43. 47.

61


72/103

EapitalisedTotalexpenditure

.227-2

.-341.

.04016

..7170

..735-

4perating;rofit2274

7

8

.2301

22223

0615.

2742-

&nterest 5140 134. -4. 67.2 0321

1ross ;rofit.254

6

82.40

5.-2.

304.7

52065

1

Depreciation ...0 111. 1.47 -25- 7272;rofit eforeTax .776 82552 1.41

20110

.-22-

Tax 4 43 865. 62.. 27-1Fringeenefit tax 4 0.3 062 273 031

Deferred Tax 8702 80.0 .4.3 81.3 .4

Reported 5et;rofit 234-

827.3

3 7262242.

2 .2.

Cxtraordinary &tems .32.

822246 02.2 5031 2025

Adjusted 5et;rofit 513 8653. 640

.4136 577.

Adjst. #elo%5et ;rofit 4 4 4 4 4

; : Lalance#roughtfor%ard 33.5

02-76

27115

.-7.7

.4-4.

StatutoryAppropriations 4 4 4 4 4

Appropriations 4 4 2637 546 3516

; : Lalancecarrieddo%n

1423

33.5

02-76

27115

.-7.7

Di$idend 4 4 .303 04-5 04-5

62


73/103

;referenceDi$idend 4 4 4 4 4

C 4 4 23 34 34Carnings ;er

Share7Init Eurr 641 4

..07

0241

.54.

Carnings ;erShare!Adj"7Init curr 641 4 ..07 0241 .54.oo? Kalue7Init Eurr

.5.45

.10-.

2271.

22456

22456

Cas !lo" Stat#$#nt

Particulars %ar ' %ar ( %ar ) %ar * %ar +

9et Pro!it Be!ore Ta)..

-34

.70-

3

.3-55

1-.3

83173

9et ,ash From Operating$cti:ities

.4

563

.3

73-

3

7.1

.

332

.2

436

9et ,ash &used in'/!rom+n:esting $cti:ities

8.3

61-

82170

3

8.5622

8.0..

80-..0

9et ,ash &used in'/!romFinancing $cti:ities

0.15

.6.3

1

.07-2

8-24

2-3

37

9et &decrease'/increase +n,ash and ,ash (;ui:alents

8.03.

..71

431

8

075

2657

Opening ,ash * ,ash(;ui:alents

2-7-

.023

2340

23-.

2.12

6#


74/103

,losing ,ash * ,ash(;ui:alents

.023

2340

23-.

2.12

6-14

!IXED ASSETS %ANAGE%ENT

!i,#- Ass#ts D#finition/Fixed assetis an asset held *ith the intention of eing used for the purpose

of producing or pro)iding goods or ser)ices and is not held for sale in the

normal course of usinessE

Fied assets often comprise a significant portion of the total assets of an

enterprise, and therefore are important in the presentation of financial

positionE Furthermore, the determination of *hether an ependiture

represents an asset or an epense can ha)e a material effect on an

enterprises reported results of operationsE

RATIO ANAL0SIS

T12#s of Ratios

$e)eral ratios, calculated from the accounting data, can e grouped into

)arious classes according to financial acti)ity or function to e e)aluatedE

&he parties interested in financial analysis are shortterm and long term

creditors, o*ners and managementE $hort term creditorsH main interest is in

the liIuidity position or the short term sol)ency and profitaility of a firmE

$imilarly, o*ners concentrate on the firmHs profitaility and financial

conditionE Management is interested in e)aluating e)ery aspect of the firmHs

60


75/103

performanceE &hey ha)e to protect the interest of all parties and see that the

firm gro*s profitalyE -n )ie* of the reIuirements of the )arious users of

ratios, *e may classify them into the follo*ing four categories

1E ?iIuidity ratios

2E ?e)erage ratios

#E 'cti)ity ratios

0E Profitaility ratiosE

+. Li3ui-it1 ratios

-t is etremely essential for a firm to e ale to meet its oligations as they

ecome dueE ?iIuidity ratios measure the aility of the firm to meet its

current oligationsE -n fact, analysis of liIuidity needs the presentation of

cash udgets and cash and fund flo* statementsK ut liIuidity ratios, ut

estalishing a relationship et*een cash and other current assets to currentliailities, pro)ide a Iuick measure of liIuidityE ' firm should ensure that it

does not suffer from lack of liIuidity, and also that it does not ha)e ecess

liIuidityE &he failure of a company to meet its oligations due to lack of

sufficient liIuidity, *ill result in a poor credit *orthiness, loss of creditorsH

confidence, or e)en in legal tangles resulting in the closure of the companyE

' )ery high degree of liIuidity is also adK idle assets earn nothingE &he

firmHs funds *ill e unnecessarily tied up in current assetsE &herefore, it is

necessary to strike a proper alance et*een high liIuidity and lack of

liIuidityE

64


76/103

&he most common ratios, *hich indicate the etent of liIuidity or lack of it,

arei3 Current ratio

ii3 @uick ratio

Curr#nt Ratio

Current ratio is calculated y di)iding current assets y current liailitiesK

Current ratioL Current assetsCurrent liaility

Current assets include cash and those assets that can e con)erted in to cash

*ithin a year, such as marketale securities, detors and in)entoriesE Prepaid

epenses are also included in current assets as they represent the payments

that *ill not e made y the firm in the futureE 'll oligations maturing

*ithin a year are included in current liailitiesE Current liailities includecreditors, ills payale, accrued epenses, shortterm ank loan, incometa

liaility and longterm det maturing in the current yearE

&he current ratio is a measure of the firmHs shortterm sol)encyE -t indicates

the a)ailaility of current assets in rupees for e)ery one rupee of current

liailityE ' ratio of greater than one means that the firm has more current

assets than current claims against themE

65


77/103

4uic5 Ratio

@uick ratio, also called acid test ratio, estalishes a relationship et*eenIuick, or liIuid, assets and current liailitiesE 'n assets is liIuid if it can e

con)erted into cash immediately or reasonaly soon *ithout a loss of )alueE

Cash is the most liIuid assetE !ther assets are considered to e relati)ely

liIuid and included in Iuick assets are detors and ills recei)ales and

marketale securitiesE -n)entories are considered to e less liIuidE

-n)entories normally reIuire some time for reali(ing into cashK their )alue

also has a tendency to fluctuateE &he Iuick ratio is found out y di)iding

Iuick assets y current liailitiesE

@uick ratioL Current assets -n)entories Current liailities

N#t 6or5in7 Ca2ital Ratio

&he difference et*een current assets and current liailities ecluding short

term ank orro*ing is called net *orking capital


78/103

8. L#9#ra7# Ratios

&he shortterm creditors, like ankers and suppliers of ra* material, are

more concerned *ith the firmHs current detpaying ailityE !n the other

hand, longterm creditors, like deenture holders, financial institutions etcE

are more concerned *ith the firmHs longterm financial strengthE -n fact, a

firm should ha)e a strong shortas *ell as longterm financial positionE &o

+udge the longterm financial position of a firm, financial le)erage, or capital

structure ratios are calculatedE &hese ratios indicate mi of funds pro)ided

y o*ners and lendersE 's a general rule, there should e an appropriate mi

of det and o*nersH eIuity in financing the firmHs assetsE

&he manner in *hich assets are financed has a numer of implicationsE First,

et*een det and eIuity, det is more risky from the firmHs point of )ie*E

&he firm has a legal oligation to pay interest to det holders, irrespecti)e of

the profit made or losses incurred y the firmE -f the firm fails to pay to det

holders in time, they can take legal action against it to get payments and in

etreme cases, can force the firm into liIuidationE $econd, use of det is

ad)antageous for share holders in t*o *ays

a3 &hey can retain control of the firm *ith a limited stake and

3 &heir earning *ill e magnified, *hen the firm earns a rate of return on

the total capital employed higher than the interest rate on the orro*ed

fundsE

&he process of magnifying the shareholdersH return through the use of det

is called Nfinancial le)erageO or Nfinancial gearingO or Ntrading on eIuityEO

>o*e)er, le)erage can *ork in opposite direction as *ellE -f the cost of det

67


79/103

is higher than the firmHs o)erall rate of return, the earning of shareholders

*ill e reducedE -n addition, there is threat of insol)encyE -f the firm is

actually liIuidated for non payment of detholdersH dues, the *orst suffers

*ill e shareholders the residual o*nersE &hus, use of det magnifies theshareholdersH earnings as *ell as increases their riskE &hird, a highly det

urdened firm *ill find difficulty in raising funds from creditors and o*ners

in futureE Creditors treat the o*nersH eIuity as a margin of safetyK if the

eIuity ase is thin, the creditors risk *ill e highE &hus, le)erage ratios are

calculated to measure the financial risk and the firmHs aility of using det to

shareholdersH ad)antageE

?e)erage ratios may e calculated from the alance sheet items to determine

the proportion of the det in total financingE Many )ariations of these ratios

eistK ut all these ratios indicate the same thingthe etent to *hich the firm

has relied on det in financing assetsE ?e)erage ratios are also computed

from the profit and loss items y determining the etent to *hich operating

profits are sufficient to co)er the fied chargesE

:. Acti9it1 Ratios

Funds of creditors and o*ners are in)ested in )arious assets to generate sales

and profitsE &he etter the management of assets, the larger the amount of

salesE 'cti)ity ratios are employed to e)aluate the efficiency *ith *hich the

firm manages and utili(es its assetsE &hese ratios are also called turno)er

ratios ecause they indicate the speed *ith *hich assets are eing con)erted

or turned o)er into salesE 'cti)ity ratios, thus, in)ol)e a relationship et*een

sales and assetsE ' proper alance et*een sales and assets generally reflects

68


80/103

that are managed *ellE $e)eral acti)ity ratios can e calculated to +udge the

effecti)eness of asset utili(ationE >ere *e *ill take different acti)ity ratio

i3


81/103

$ome analysts eclude intangile assets like good*ill, patents etcE, %hile

computing the net assets turno)erE $imilarly, fictitious assets, accumulated

losses or deferred ependitures may also e ecluded for calculating the net

assets turno)er ratioE

Total ass#ts turno9#r

$ome analysts like to compute the total assets turno)er in addition to or

instead of the net assets turno)erE &his ratio sho*s the firmHs aility in

generating sales from all financial resources committed to total assetsE

&otal assets turno)erL $ales

&otal assets

&otal assets &'3 includes net fied assets


82/103

6or5in7 ca2ital turno9#r

' firm may also like to relate net current assets to salesE -t may thus compute

net *orking capital turno)er y di)iding sales y net *orking capitalE


83/103

efficiency of the companyE Besides management of the company, creditors

and o*ners are also interested in the profitaility of the firmE Creditors *ant

to get interest and repayment of principal regularlyE !*ners *ant to get a

reIuired rate of return on their in)estmentE &his is possile only *hen thecompany earns enough profitsE

Generally, t*o ma+or types of profitaility ratios are calculated

Profitaility in relation to sales

Profitaility in relation to in)estmentE

>ere *e *ill consider t*o profitaility ratio

i3 eturn on in)estment and

ii3 eturn on eIuity

R#turn on In9#st$#nt

&he term in)estment may refer to total assets or net assetsE &he funds

employed in net assets are kno*n as capital employedE


84/103

eturn on -n)estmentL /B-&1&3&otal assets

!r

eturn on -n)estmentL /B-&1&3


85/103

eturn on /IuityL Profit after taesere certain ratios are calculated according to the data of alance sheet of

last fi)e years of '=M!


86/103

sE -n lacs3

(00/7'0

(0070/

(00-70

(00,70-

(00+70,

5)4;,5 ) 4*7 58', 8)7,5H 4*7

shar capital,').0

,').0

,').0

,').0

,').0

share %arrant(0,./

+(0,./

+

reser$e : surplus''''+

)'0,+,

0.)')),/

0.*'(/*-

-./''(+

,.+

Loan Funds

secured loans-+,/+.

,',*.

'+0(0*.

',+,,,.

0++*,,-.

+,

unsecured loans

*)+-+.

(*

*-,('.

+

)-*-(.

('

((0-*.

/,

(('(0.

(

deffered tax lia#ility('0+.0

) ()-.(+/,-.+

++-.-

),*0(.-

)

total V(**,,

-(+('(

/.(()+++

/.*('//,

*.-(0('

+.'

A&;'(&)* F&,7 A55,(5

gross #loc?'-'))

/.*'-00,

*.'')*+*

0.)'()00

).+'),,-

(.

Less6 depreciation--(/-.

+-0'+/.

+,(+-.

-,++)/-.

*,--,+.

net #loc?/*0*'.

+/*0*'.

+-'/+(.

+',-,0+.

,* ,/0-

capital %or? in progress*',*.(

*',*.(

')+.)

,+,.+

''+,0*.

'

I*%,5(,*(/'-.

+,+/.

*,'0*-)

0.(/**-.

+-),,0.

(;4,*( '55,(5 )'*5 0'7%'*;,5

&n$entories(*+0.

))*0*0.

),)(/-*.

'(),,.

),)'/0*.

',

De#tors

(/,/*.

)+

)0**-.

,'

(/.

+,

(,--.

0-

(**,.

-*

Eash(,+,.'

,*,-/./

*('(.*

(+,'.*(+0).'

-

4thers *))(.)+0,,.)

*+--+.*

/ (/,/./))'+.0

,Loans (-(-. ()/)'. ()),'. ('-'+. '***(.

75


87/103

,) )) ) , 0,,55: ;4,*( &'&&(&,5'*7 )%&5&)*5

current lia#ilities)0),-.'*

)+0**.()

(('0.0)

(/0)./

(,((-.)*

;ro$ision+)''.*

(+/,,.,

(-++).-

)0,).,

,,--0.

*

net assets+-((.

(,+-'+*.

*+-+'.

))*+)*).

0)**0').

0'

total V(**,,

-(+('(

/.(()+++

/.*('//,

*.-(0('

+.'

Ratio Anal1sisCurr#nt ratio Current ratioL Current assets

Current liaility

For the year 2995,

L 66911E18 #2887E17

L 2E##1

For the year 2996, L 72089E48 #6106E45

L2E221

For the year 2997, L 80#02E#9 #4688E25

L2E5#1

76


88/103

For the year 2998, L 87154E## 01919E74

L2E#81

For the year 2919, L 82859E72 #4567E45

L2E511

Int#r2r#tation of Curr#nt Ratio

!i7ur# so"in7 Curr#nt ratio

's a con)entional rule, a current ratio of 2 to 1 or more is considersatisfactoryE CompanyHs current asset for the year 2995 *as s 66911E18and a current liaility *as s #2887E17E $o the current ratio of a companyfor the year 2995 is 2E##1E-n year 2996, companyHs current assets increase up to s 72089E48 *ithincrease in current liailities up to s #6106E45E $o the current ratio for thecompany reduced to 2E221 in that yearE-n year 2997, companyHs current assets increased up to s 80#02E#9 *ith

decrease in current liailities up to s #4688E25E $o the ratio for the year is2E5#1E-n year 2998, there is an increase in current assets of a company up to s87154E## and also increase in current liailities up to s 01919E74E $o theratio for that year reduced to 2E#81E

77


89/103

-n year 2919, there is a reduction in current assets of a company incomparison of last year and it reduced s to 82859E72E But current liailitiesof a company also reduced to s #4567E45E $o the ratio for the year 2919 isincreased to 2E511E&his trend of current ratio interprets that there is no significant change in thecurrent ratio of a company during last fi)e yearsE -t sho*s that there is nosignificant impact of current assets and liailities of a company on the fiedassets of a companyE&he ideal current ratio for a company is 21E Company has a current ratiomore than 21 for all the yearsE -t interprets that company ha)e more*orking capital than its actual reIuirementsE $o company should in)est infied assets rather than in)esting in such non performing *orking capitalECompany can earn interest y in)esting such *orking capital in any otherin)estmentsE Company should in)est money in such *ay that it can get somereturn on such in)estmentE

Total Ass#ts Turno9#r

&otal 'ssets &urno)er L sales&otal assets

For the year 2995,&otal assets turno)er L 1095#6

127420E72

L 1E98 times

For the year 2996,

&otal assets turno)er L 1#6086E16121416E17

L 1E1# times

78


90/103

For the year 2997,

&otal assets turno)er L 105914E691#174#E81

L 1E11 times

For the year 2998,

&otal assets turno)er L 106668E6715#258E62

L 9E81 times

For the year 2919,

&otal assets turno)er L 102695E07144077E#8

L 9E82 times

Int#r2r#tation of n#t ass#ts turno9#rfi7ur# so"s n#t ass#ts turn o9#r

&he firm can compute net assets turno)er simply y di)iding sales y net assetsE


91/103

For the year 2995, sales of a company *as s 1095#6 and the total assets of a

company for a year *as s 127420E72E $o the ratio for the year *as 1E98 timesE

-t interprets that company is producing sE 1E98 of sales for one rupee of capital

employedEFor the year 2996, sales of a company decreased to s 1#6086E16 ut the total

assets of a company also decreased to s 121416E17E $o the ratio for the year

increased to 1E1# timesE -t interprets that company is producing sE 1E1# of sales

for one rupee of capital employed in net assetsE

For the year 2997, sales of a company sho*s increased to s 105914E69 and also

increased in its total assetsE $o the ratio sho*s decreased to 1E11 times ecause

increase in total assets is higher in proportion of increase in salesE

For the year 2998, sales of a company increased to s 106668E67 and also increase

in total assets of a company to s 15#258E62E &he gro*th of total assets *as

higher in comparison of sales ecause of capital formation of assetsE $o there is

a reduction in ratio e)en there is an impro)ement in salesE $o the ratio for the

year *as 9E81E

For the year 2919, there is a decline in oth sales and total assets of a company tos 102695E07 and s 144077E#8 respecti)elyE But the reduction in sales *as

lo*er in proportion of reduction of total assetsE $o there is a slight increase on

ratio up to 9E82 times in the yearE

N#t Ass#ts Turno9#r


92/103

For the year 2995,


93/103

L 9E47 times

Int#r2r#tation for n#t ass#ts turno9#r

!i7ur# so"in7 n#t ass#ts turno9#r

&his ratio sho*s the firmHs aility in generating sales from all financial

resources committed to net assetsE &he firm can compute net assets turno)er

y di)iding sales y net assetsE

for the year 2995, sales of a company *as s 1095#6 and net assets of a

company *as s 292174E $o the net assets turno)er for the company for that

year *as 1E55 times *hich interprets that company *as generating a sales of

sE 1E55 for one rupee in)estment in fied and current assets togetherE

For the year 2996, sales of a company decreased to s 1#6086E16 and net

assets of a company increased to s 218850E57E -t creates a decrease in the

ratio of a companyE atio of the company for that year *as 9E5# timesE &his

*as happen mainly ecause of decrease in sales and increase of a net assetsE

For the year 2997, sales of a company increased up to s 105914E69 and net

assets of a company also increasedE But the ratio of a company slightly

8#


94/103

decline ecause the gro*th of net assets *as little more in proportion of

gro*th of salesE &he ratio for the year *as 9E52 timesE

For the year 2998, sales of a company increased to s 106668E67 and net

assets also increased up to s 242128E17E But same as pre)ious year ratiodecline to 9E48 timesE

For the year 2919, oth sales and net assets has reduced up to s 102695E07

and s 200555E84 respecti)elyE $o the ratio decline for this year up to 9E47

timesE

!i,#- an- Curr#nt ass#ts turno9#r

Fied assets turno)er L $alesFied assets

'nd

Current assets turno)er L $alesCurrent assets

For the year 2995,

Fied assets turno)er L 1095#670412

L 1E55

Current assets turno)er L 1095#666911E18

80


95/103

L 1E72

For the year 2996,

Fied assets turno)er L 1#6086E1665160E14

L 1E71

Current assets turno)er L 1#6086E1672089E48

L 1E56

For the year 2997,

Fied assets turno)er L 105914E696##19E76

L 1E88

Current assets turno)er L 105914E6980#02E#9

L 1E44

For the year 2998,

Fied assets turno)er L 106668E67195114E20

L1E#8

Current assets turno)er L 106668E6787154E##

L 1E41

84


96/103

For the year 2919,Fied assets turno)er L 102695E07

87295E1#

L 1E04

Current assets turno)er L 102695E0782859E72

L 1E40

Int#r2r#tation of !i,#- an- Curr#nt ass#t turno9#r&he firm may *ish to kno* its efficiency of utili(ing fied assets and current

assets separatelyE ' firm can compute fied assets turno)er simply y di)iding

sales y fied assets and can compute current assets turno)er y di)iding sales

y current assetsE

-n year 2995, the reciprocal of a companyHs fied assets turno)er ratio *as 9E59

and reciprocal of current assets turno)er *as 9E44E $o it implies that companyHs

fied assets is faster than current assets and for generating sale of one rupee, the

company needs respecti)ely sE 9E59 in)estment in fied assets and s 9E44 in

current assetsE

-n year 2996, current asset of a company eceeds the )alue of fied assetsE '

current asset of a company *as s 72089E48 lacs *hile a fied asset *as s

65160E14 lacsE $o the reciprocal of a fied asset turno)er ratio *as 9E44 and

reciprocal of current assets turno)er ratio *as 9E59E -t implies that companyHs

current assets is faster than its fied assets and for generating a sale of one

85


97/103

rupee, the company needs respecti)ely sE 9E44 in)estment in fied assets and

sE 9E59 in current assetsE

-n year 2997, trend *as also sameE Current assets of a company *as increased

up to s 80#02E#9 lacs and a fied asset *as further reduced to s 6##19E76lacsE $o the reciprocal of a fied assets turno)er *as 9E49 *hile the reciprocal

of a current assets *as 9E54E so it implies that companyHs current assets is faster

than its fied assets and for generating a sale of one rupee, the company needs

respecti)ely sE 9E49 in)estment in fied assets and sE 9E54 in current assetsE

-n year 2998, oth fied and current assets of a company *ere increased ut

fied assets increased more than current assetsE $o the reciprocal of the fied

assets turno)er *as 9E62 and reciprocal of current assets turno)er *as 9E55E -t

implies that fied assets of a company is faster than the current assets of a

company and for generating a sale of one rupee, the company needs

respecti)ely sE 9E62 in)estment in fied assets and sE 9E55 in)estment in

current assetsE

-n year 2919, oth fied and current assets of a company reducedE But current

assets reduced more in proportion of fied assetsE $o the reciprocal of a fiedassets turno)er *as reduced to 9E58 and reciprocal of current assets turno)er

*as reduced to 9E54E $o it implies that fied assets of a company is faster than

current assets and for generating a sale of one rupee, the company needs

respecti)ely sE 9E58 in)estment in fied assets and sE 9E54 in)estment in

current assetsE

86


98/103

6or5in7 Ca2ital Turno9#r

%orking capital turno)er L $ales


99/103

%orking capital turno)er L 106668E6746140E07

L 2E48 times

For the year 2919,

%orking capital turno)er L 102695E0746272E25

L 2E08 times

Int#r2r#tation of "or5in7 ca2ital turno9#r

!i7ur# so"s "or5in7 ca2ital turno9#r

' firm may like to relate net current assets to salesE -t may thus compute net

*orking capital turno)er y di)iding sales y net *orking capitalE

For the year 2995, a sale of a company *as s 1095#6 and a current asset *as

s 0091#E91E $o the reciprocal of the ratio implies that for one rupee of sales,

the company needs sE 9E#1 of *orking capitalE

For the year 2996, a sale of a company *as reduced to s 1#6086E16 and a

current asset *as increased up to s 04#0#E9#E $o the reciprocal of the ratio

*as 9E##E &he ratio increased ecause of the increase in current assets of a

companyE

For the year 2997, a sale of a company *as s 105914E69 *hich is more than

pre)ious year and current assets *as also more than pre)ious year that is s

4740#E90E so the reciprocal of the ratio *as 9E09 *hich implies that for one

rupee of sales, the company needs sE 9E09 of *orking capitalE

88


100/103

For the year 2998, a sale of a company increased to s 106668E67 ut the

current assets of a company reduced to s 46140E07E$o the reciprocal of the

ratio slightly decline to 9E#8E

For the year 2919, a sale of a company reduced to s 102695E07 and there is aslight increase in current assets of a company *hich leads to little increase in

ratioE atio for the year is 9E09E

&he gaps for all these years are met from long term sources of funds of a

companyE

R#turn on In9#st$#nt

eturn on -n)estment L /B-& 1&3&otal assets

For the year 2995,

eturn on -n)estment L 15#69E07 9E63

292174

L 9E945 or 4E5:3

For the year 2996,

eturn on -n)estment L 2#72#E27 9E63 218850E57

L 9E964 or 6E4:3

For the year 2997,

eturn on -n)estment L 7158E55 9E63

199


101/103

2#5470E11

L 9E920 or 2E0:3

For the year 2998,eturn on -n)estment L 28644E953 9E63

242128E17

L 9E97# ?oss or 7E#:3

For the year 2919,

eturn on -n)estment L 2990E#0 9E63 200555E84

L9E995 or 9E5:3

Int#r2r#tation of r#turn on in9#st$#nt!i7ur# so"s r#turn on in9#st$#nt

&he con)entional approach of calculating return on in)estment is to di)ide P'& yin)estmentE Firm can compute the return on in)estment *hich is yield yin)esting in total assets simply y di)iding P'& y total assetsE Company pays#9: ta on profit e)ery yearE

-n year 2995, company earns s 15#69E07 lacs profit efore taE 'fter the paymentof #9: taE Company has P'& of s 11048E## lacsE 'nd the total asset of thecompany *as s 292174 lacsE $o the return on in)estment for the company forthe year 2995 *as 4E5:E

-n year 2996, P'& of a company *as s 15565E#9 lacsE 'nd the total asset of acompany *as s 2#5470E11 lacsE $o the company got 6E4: return onin)estment for that yearE

-n year 2997, P'& of a company *as s 4617E65 lacsE &here *as a huge reduction

in the profit of a company ecause of recessionE &he total asset of a company*as s 2#5470E11 lacsE Because of the reduction in profit, the return onin)estment reakdo*n to 2E0: in that yearE

191


102/103

-n year 2998, effect of recession continues and ecause of that company faced lossof s 29727E40 lacsE $o the ratio ecame negati)e for that yearE &he ratio forthat year *as 7E#:E

-n year 2919, company o)ercomes from the effect of recessionE Company hasmade P'& of s 109#E90 lacsE 'nd the total assets of a company are s200555E84 lacsE Because of the lo* profit and high rate of in)estmentE eturnon in)estment is )ery lo* ut in positi)e natureE &he return on in)estment forthe year is 9E5:E

E3uit1 to !i,#- Ass#ts Ratio

/Iuity to fied assets ratio L &otal eIuity shares Fied assets

For the year 2995,

/Iuity to Fied assets ratio L 5 1#7E9770411E71

L 9E965 or 6E5:3

For the year 2996,

/Iuity to fied assets ratio L 51#7E9765160E14

L 9E971 or 7E1:3

For the year 2997,

/Iuity to fied assets ratio L 51#7E97

6##19E76

L 9E970 or 7E0:3

192


103/103

For the year 2998,

/Iuity to fied assets ratio L 51#7E97195114E20

L 9E947 or 4E7:3

For the year 2919,

/Iuity to fied assets ratio L 51#7E9787295E1#

L9E95# or 5E#:3

Int#r2r#tation of E3uit1 to !i,#- ass#ts ratio

Many times, firm compute the eIuity on fied assets ratio to kno* its eIuity inrelation *ith fied assets simply y di)iding its eIuity shares y its fied assetsE-f eIuity shares are lo* and fied assets is high than ratio is lo* and )icee)ersaE /Iuity of a company is same or unchanged from last 4 yearsE /Iuity of acompany from last 4 years is s 51#7E97 lacsEFor the year 2995, the fied asset of a company *as s 70411E71 lacsE $o theratio for the year *as 6E5 :E-n year 2996, the fied asset of a company *as decreased up to s 65160E14lacsE Because of such reduction, ratio increase up to 7E1:E-n year 2997, the fied asset of a company *as further reduced to s 6##19E76

lacsE &his creates further impro)ement in ratio up to 7E0:E-n year 2998, the fied asset of a company *as increased to s 195114E20 lacs

ecause of capital formationE &his leads to decline in ratio up to 4E7:E-n year 2919, the fied asset of a company again reduced in comparison of

pre)ious year up to s 87295E1# lacsE $o ratio increase up to 5E#:E

Documents

51630203 Project on Fixed Assets Management(1)