A Project Report on Ratio Analysis at Patel Shanti Steel Private Ltd, RAICHUR

8/17/2019 A Project Report on Ratio Analysis at Patel Shanti Steel Private Ltd, RAICHUR

1/80

A study on financial Performance based on Ratio Analysis” At Patel Shanti Steel Private

Ltd, RAICHUR

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CONTENTS

l. No. Titles

IChapter 1

Executive summary

Introduction to the company

• Introduction

• ro!le of the company

• Or"ani#ation structure

IIChapter $

Introduction to the topic

Statement of the roblem

urpose of the Study

Scope of the study

Ob%ectives of the Study

&ethodolo"y

IIIChapter '

(nalysis and interpretation

)indin"s

Su""estions

Conclusion

I*Chapter +

(ppendix

Biblio"raphy


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EECU!I"E SU##AR$

The project report on “A study on financial Performance based on Ratio

Analysis” is studied in the “atel Shanti Steel vt Co, -T /oushala

0oad 0aichur ” for a period of two months as summer in plant training.

Patel Shanti Steel Pvt Co, Ltd(PSSPL),was established in the year of 1998. Company located at

armars, !aich"r #8$ 1%1.. !aich"r&s 1st steel prod"ction

't was a reat eperience to "ndero s"mmer in plant trainin on *A study on financial

Performance based on Ratio Analysis” at %Patel Shanti Steel Com&any” .+"rin the st"dy

' fo"nd that the company is carryin its activity in prod"cin steel. The company

managers have co-operated me a lot in completing my summer-in-plant

training. They have given me all the information that I need for my study.

'n this report the effort is made to now the financial position of the PSSPL Company .

process to identify the financial performance of a firm by properly establishin the relationship

between the items of balance sheet and profit or loss acco"nt. -h"s, we can say that, inancial

/nalysis is a startin point for main plans before "sin any sophisticated forecastin and plannin.



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Pur&ose of the study '

/ company&s balance sheet and profit 2 loss acco"nts are val"able information so"rces

for identifyin ris tain and assessin ris manaement effectiveness. /ltho"h amo"nts

fo"nd on these statements does not provide val"able insihts of performance so ratio analysis

is re3"ired for determinin ood or bad performance of company and also for determinin its

ca"ses. -he st"dy incl"des the calc"lation of different financial ratios. 't compares fo"r years

financial statements of the company to now its performance in these different years.

Sco&e of the study

-he scope of the st"dy is limited to financial aspects of PSSPL Company.

(b)ectives

o -o now the financial performance of the orani4ation.

o -o st"dy financial position of PSSPL based on different ratios.

o -o determine the profitability and li3"idity of the company thro"h ratios

analysis.

o -o compare the present and previo"s years performance of PSSPL Company.

#ethodolo*y

+ata Collection method

5 Primary +ata 6 -he information Collected from Personnel 'nteraction with manaer

and other staff

5 Secondary67 /nn"al reports of PSSPL Company

#easurement techniue- Statistical tool

• /cco"ntin ratio

• inancial statement of the company

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.I/+I/0S

1) -he c"rrent ratio of the company has been increased from %.#8 to 0.9,to #.1 from the

0%%#,0%% and 0%% respectively. 2 it decreased to .9 in year 0%%8. C"rrent ratio is on par

with the standard ratio, so it is favorable to the company.

0) +ebt e3"ity ratio of the company has been decreased to .%, 1.#$, 1.0, and 1.11

respectively from 0%%# to 0%%8 . it is favorable to the company.

) -he proprietary ratio of the company has been increased by %.1$, %.$, %.$% 2 %.$%

respectively from 0%%# to 0%%8 . -he ratio is very low: it is "nfavorable to the company.

$) -he interest coverae ratio has been contin"o"sly decreased by year to year i .e ..#, 0.,

.0, 0.8, respectively from 0%%# to 0%%8. 't shows that lower the ratio less safe to the lon7

term creditors.

#) -he inventory t"rnover ratio of the company has been decreased contin"o"sly i .e .0.10,

1.#%,1.1 21.8 respectively from 0%%# to 0%%8.So, it is not favorable to the company.

) ;orin capital t"rnover ratio of the company is neative i .e. 7.%9 in the year 0%%# 2 in

0%% it can recovered the neative 2 also ecessive in times 2 it decreased to #., $.9, and

.1 from 0%% to 0%%8. -he decrease of worin capital ratio is "nfavorable to the company beca"se it shows the inefficient "tili4ation of worin capital

) -he ret"rn on capital employed has been decreased by 0$8.8,10.$,10.$% 2 11.#0

from 0%%# to 0%%8 . -he company is not "tili4in the capital in efficient manner.

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SU00ES!I(/S

1. -he company needs to increases interest t"rnover ratio by "tili4in the rec"rrin f"nd

and the profit retentions: it is more safe to the lon7term creditors.

0. -he company needs to maintain ood inventory t"rnover ratio by increasin the sales.

. -he company needs to increase the worin capital t"rnover ratio for efficient

"tili4ation of the worin capital.

$. -he company needs to increase the ret"rn %n capital employed ratio for efficient

"tili4ation of capital.



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C(/CLUSI(/

inancin is the bac bone of the proress of any company. -herefore a financial ratio

has its impact on the manaement. !atios ive the clear pict"re of financial condition of the

company.

-he areas which were assined to me were all ey areas of the finance divisions which

also incl"de different departments 2 f"nctions. -he profitability position of the company is

very ood beca"se, the cost of prod"ction is low 2 sellin price is hih .-he company has

minim"m debt in the capital str"ct"re, it doesn&t have financial ris.


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Ü '=-!>+?C-'>=

Ü P!>'L@ > -A@ C>BP/=

Ü >!/='S/-'>= S-!?C-?!@



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I/!R(+UC!I(/'1


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-he company has a networ of more than 1#% distrib"tors and dealers spread across the State

of Jarnataa.

PR(.ILE (. !HE C(#PA/$

/ame of the com&any' 1 PA!EL SHA/!I S!EEL P"! L!+

Re*4 (ffice Address ' 1 5617177, 0oushala Road Raichur189:5;6

.actory Location ' 1 Survey /o4 68


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0OCT 0O)I-E23

!#! Steel

3ars

-B-


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!#! 3ars .eatures'1

E@cellent 3ond Stren*th '1

-he rib pattern of -B-


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Standard siBes !#! .e:58 bars as &er 3IS'1

Section (mm) =ominal ;eiht (Hmeter)

8 %.9#

1% %.1

10 %.888

1 1.#8%

0% 0.$%

PA!EL SHA/!I S!EEL P"! L!+ man"fact"res followin 3"ality of steel bars6

C!+ 3ARS67

Cold -wisted +eformed


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-he salient feat"res of these prod"ct are6

5 Aih strenth

5 Aih d"ctility

5


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CHE#ICAL C(#P(S!I(/ FD

Carbon %.% Ba. %.% Ba.

S"lph"r %.% Ba. %.% Ba.

Phosphoro"s %.% Ba. %.% Ba.

SKP %.11+eree Ba. %.11+eree Ba.

.or 0rade .e1 8;;

#ECHA/ICAL PR(PER!IES

Proof Stress #%%=Hmm0 #%=Hmm0

-ensile Strenth #$#=Hmm0 %%=Hmm0

@lonation 10G 1#G


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Organization Structure

Organization Chart

/sst. Banaer /sst. Banaer /sst. Banaer

oreman

Sales @ec"tives inancial @ec"tives itter

Aelper

-he company&s orani4ational chart is formed in a hierarchical way, where the

hierarchy starts with the *Banain +irectorI. -hen in the net level of hierarchy two

*+irectorsI are there. /fter +irector, *actory BanaerI leads to the net level which is

f"rther divided into fo"r department namely *Baretin BanaerI, *inancial BanaerI,

*Prod"ction BanaerI, *A"man !eso"rce BanaerI. ;here each department is f"rther

divided into assistant manaers and helpers which helps the "pper level of the orani4ation to

wor effectively and efficiently. Aence the orani4ational chart shows the str"ct"re of the

company and the flow of a"thority between different levels.


Banain +irector

1st +irector 0nd +irector

Baretin

Banaer

inancial

Banaer

Prod"ction

Banaer

A"man !eso"rce

Banaer

actory Banaer


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3oards of +irectors'1

#ana*in* +irector #r4 Shiv)i Patel

5st4 +irector #r4 #ohanlal Patel

6nd4 +irector #r4 Lal)i Patel

.actory #ana*er #r4 Shamlal

#ar=etin* #ana*er #r4 3him Rao

Assistant #ar=etin* #ana*er #r4 #alli=ar)un

.inance #ana*er #r4 "inay Patel

Assistant .inance #ana*er #r4 #u=esh "yas

Production #ana*er #r4 Rav)i Patel

Assistant Production #ana*er #r4 Punesh Solan=i

Human Resource #ana*er #r4 Shamlal



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.U/C!I(/S (. "ARI(US +EPAR!#E/!S

-he company consists of fo"r departments namely Production, .inance,

Administration 2 #ar=etin* and Human Resource #ana*ement4 -he company of $8

permanent staff and there are some #71% more who wor on a daily wae basis. @very

employee who Foins the company for the first time has to "nder o a probation period for one

year. -he employee will be "nder observation d"rin this period. 'f the director board is

satisfied with the performance, he will be made permanent. -he permanent staff members are

entitled for provident f"nd, rat"ity, employee state ins"rance, ho"se rent allowance. -he daily

wae basis employees are entitled for shift allowance. +"rin the pee seasons the company

wors ro"nd the cloc with two shifts. -he normal office worin ho"rs are from 9.%% to 1$.%%

hrs and 1#.%% hrs to 19.%% hrs. -he worin shifts is of (si) hrs of two shifts.

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MARKETING DEPARTMENT:-

#ARGE!I/0 +EPAR!#E/!'1

Baretin occ"pies an important position in the orani4ation of any b"siness "nit.

Baretin f"nctions are not limited to the f"nctions of b"yin and sellin b"t they incl"de all

f"nction necessary to satisfy the c"stomer s"ch as financin, storae, ris bearin and after

sales services etc. Baretin is a vital connectin lin between the prod"cer and the c"stomer.

.unctions'1

!ar*et Customer'1

-aret c"stomer are small dealers vendin in -al"s and small villaes and ho"se

constr"ctin c"stomers.

#ar=et Research'1

Baret !esearch are determined by the feedbac by their dealers and wal7in

c"stomers.

Present #ar=et Situation'1

-he demand sit"ation is slac d"e to eneral slowdown on the eport front and there by

d"e to a slowdown eneral 'ndian economy. Aowever d"e to aric"lt"ral prod"ction the r"ral

demand is intact and therefore demand sit"ation is not totally hopeless and the prod"ction is

some7how seems to be picin "p d"e to the seasonal demand.

#a)or Com&etitor'1

BaFor Competitor are from o"tside the state steel prod"cers beca"se there is very less

prod"ction as the local electricity power rate is very hih, so there is minim"m prod"ction

allover the state(bein electricity is the maFor cost in the prod"ction of steel), nat"rally the

oods comes from o"t of the state for local demand within the state.

#ar=et Se*mentation'1/bo"t #%G from city and other #%G from near by r"ral marets.



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#ar=et !ar*et'1

-aret Baret is o"r own district(!aich"r), beca"se delivery to other places involves

hiher transportation chares and hence less profitable.

Positionin*'1

-he main stratey is to prod"ce only economically viable prod"ction that is prod"ce

only s"ch etant which is viably saleable.

Sales Promotion'1

or sales promotion, s"itable incentives in ind are bein offered to the dealer and as

well as direct c"stomer, so that the sales vol"me is maintained at the optim"m level.

E"st lie6 1. "antity disco"nt.

0. Price disco"nt.

.


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Com&etition'1

Sellin prices of company prod"cts may be affected if competition intensifies,

incl"din as a res"lt of increased capacity of Competitors or company competitors adopt

aressive pricin strateies in order to ain maret share or new competitors enter the marets

we serve.

Ra2 #aterial Prices'1

!aw materials i.e Steel 'nots, Spone 'ron and B.S. Scrap constit"te a maFor portion

of company total epenses. l"ct"ations in the cost of these raw materials may alter company

cost str"ct"re and affect profitability. Aistorically, we have been able to pass on increases in

raw material costs to company c"stomers b"t company cannot ass"re yo" that in f"t"re also

company will be able to do so.

(ther .actors'1

Company res"lts of operations are dependent "pon company s"ccess in manain

company inventories. Company have to sched"le o"t prod"ction process and proc"rements

accordin to delivery sched"le of c"stomers. /ny chane in sched"le may affect company

operation in short r"n.

+emand .orecastin*'1

-he company epects the demand revival in the third 3"arter of this year followin the

overnment reali4ed finance thro"h vario"s schemes for enhancin constr"ction activities.

;e have appointed special representative to st"dy the demand from vario"s sement of

the ind"stry and vario"s c"stomers p"ttin "p ho"ses.



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Marketing Department Chart

Human Resource Department:-

Human Resource +e&artment'1

A"man !eso"rce department is a department for the effective manaement of personnel

at wor. A"man !eso"rces manaement is the sense of plannin orani4in and controllin the

vario"s operatin f"nctions of processin, developin, maintainin and "tili4in the labor

process for the p"rpose of contrib"tin a lot towards the accomplishment of maFor oals of the

orani4ation.

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+irector

Baretin Banaer

/sst. Baretin Banaer

Sales @ec"tives


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.U/C!I(/S'1

1. !ecr"itment 2 Selection.

0. Performance /ppraisal.

. Compensation.

$. A"man !eso"rce Plannin.#. Banpower Plannin.

. Baintainin Comm"nication with @mployees.

HU#A/ RES(URCE P(LIC$'1

1. Patel Shanti Steel reconi4es that its people are the primary so"rce of its

competitiveness.

0. 't will p"rs"e manaement practices desined to enrich the 3"ality of life of its

employees, develop their potential and maimi4e their prod"ctivity.

. Patel Shanti Steel will strive contin"o"sly to foster a climate of openness, m"t"al

tr"st and teamwor.

#A/P(ER PLA//I/0'1

-he present strenth of the Company is % employees.

S4/o4 /ame of +e&artment /umber of Em&loyees

1. -echnical 2 /dministration Staff at 1%

0. /dministration ,Baretin and inance at !eistered >ffice %8

!otal 8.

-he Company also employs contract labo"r for its man"fact"rin facility at !aich"r, 0#

Jarnataa

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RECRUI!#E/! A/+ SELEC!I(/'1

-here is no recr"itment from last few years in Patel Shanti Steels Pvt Ltd +"e to heavy

comp"teri4ation, mechanisms, and modern technoloies. Preference is iven to son(s) of

worman.

-hey re3"ire m"ch lesser manpower as there is centrali4ed manaement.

PER.(R#A/CE APPRAISAL67

Performance appraisal assesses an individ"alMs performance aainst previo"sly areed wor

obFectives. Performance appraisal is normally carried o"t once a year. -hey assess ey res"lt

areas of their employees, worers and s"pervisors. Since it is a Foint responsibility of the

individ"al and the s"pervisor: every individ"al in PSSPL are co prime to each other.

't also enables manaement to compare performance and potential between employees and

s"bordinates of the same ran. !atin of employees is done by their performances. 't is iven

as per rans very ood, averae, and averae to medi"m and below averae.

!RAI/I/0 A/+ +E"EL(P#E/!'1

5 Safety is a hih priority area. Several movements to inc"lcate a c"lt"re of safety have been

practiced, b"t the Company needs to do more to prevent accidents and improve its safety

record.

5 -hey are trained to now the chanes in environment, maret, and in steel prices.

5 -hey also et trainin of problem solvin techni3"es, conflict manaement, etc.



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FINANCIAL DEPARTMENT

)IN(NCI(- E(0T&ENT23

't is finance, which brins toether vario"s sements of an orani4ation and transforms

them into an interated whole so that it may f"nction smoothly and move in the direction of

achievin the orani4ational oal. inance Baner is the top a"thority in inance +epartment.

Ae has e3"al rihts and responsibilities as compared to the Banain +irector of the Company

in eneral matters.

+irector himself handles finance department coverin both p"rchase and sales as price

of steel very volatile, chanin almost every day. -herefore they have mae b"l p"rchase at

the time of lower price and mae sales as and when appropriate.

Capital Structure of the Company

Capital str"ct"re or composition of capital or pattern of sec"rities or the sec"rity mi is

a maFor aspect of financial plannin. >nce the finance manaer has determined the firm&s

financial re3"irements and his net tas is to see that there are f"nd in hand. -he capital comes

in many forms lon term and short term Loans, sec"red and "nsec"red debtors, share

contrib"tion etc. -he decision "pon the ratio of these sec"rities into total capitali4ation is to

decide the capital str"ct"re.

or=in* Ca&ital'1

Short -erm "nds67 ;orin Capital enerally taen care of by cash credit facility

etended by S


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.inancial Position'1

C"rrent financial position of the orani4ation is 3"ite stable.

Re&ort to 0overnment A*encies'1

1. -he "s"al financial reports are always re3"ired for ecise department, D/-

department and lendin


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Accountin* Policies

1. 3asis of Accountin*' inancial statement is prepared "nder the historical cost

convention and on ann"al basis.

0. .i@ed Assets' ied /ssets are stated at their historical and less acc"m"lated

depreciation there own. -he cost of fied assets comprises their ac3"isition cost and

any attrib"table of brinin the asset to its worin conditions. -he cost of self 7

constr"cted fied assets comprise those costs that are related directly to the specific

assets and overheads consistently allocated at predetermined percentae of direct

salaries and waes.

?4 "aluation of Inventories'1

a. !aw Baterial, stores 2Spares, Pacin Baterial, "el, Stoc in process are

val"ed at cost

b. inished oods are val"ed at cost or reali4able val"e whichever is less.

c. ;aste 2 scrap and !"nner 2 !iser are val"ed at reali4able val"e.

:4 Sales'1

Sales are stated net of sales ret"rns.

84 CE/"A!'1

Cenvat claimed on Plant 2 Bachinery is red"ced from the cost of

Plant2 Bachinery. Cenvat claimed on p"rchases of raw materials and other

materials red"ced from the cost of s"ch materials.

>4 PR("ISI(/ .(R CURRE/! A/+ +E..ERE+ !A'1

Provision for c"rrent ta is made after tain into consideration benefits

admissible "nder the provision of income ta /ct, 191. +eferred ta res"ltin from

*timin differenceI between boo profit and taable profit is acco"nted for "sin theta rates and laws that have been enacted or s"bstantively enacted as on the dare of

balance sheet. -he deferred ta liability is reconi4ed and carried forward only to the

etent that there is a reasonable certainty that the same will be reali4ed in f"t"re.

Com&anys .uture 3usiness strate*y'1

Company has taen a conscio"s decision to develop and enlare its b"siness operations

by adoptin ranchise ro"te. -he ranchisee marets the Prod"cts at its own "sin Baretin

networ of PSSPL and payin the Company !oyalty on sales per tonne basisHper

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baHpercentae. Company have plans to establish o"r own Stoc ards at vario"s strateic

locations and materials re3"ired for these yards will be so"rced from the nearby ranchisees,

who are man"fact"rers of PSSPL Steel -B-H C-+


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.inancial +e&artment Chart


+irector

inance Banaer

/sst. inance Banaer

inancial @ec"tives


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PRODUCTION DEPARTMENT

roduction rocess Chart23

!aw Baterials (B S 'nots)

Chared in !e7heatin "rnace

!o"hin Bil

('not $&& red"ced to 0&&)

inishin Bill

(0&& to red"ced to re3"ired finishin si4e)

-B- -reatment Plant

Coolin


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PR(CESS .L( CHAR! .(R PR(+UC!I(/ (. S!EEL 3ARS'1

#4S4 In*ot'1

Spone iron and Bild Steel Scrap is fed into ind"ction f"rnace for meltin at the temp of 1##%

deree Celsi"s. S"itable 3"antity of erro /lloys i.e. erro Silicon, erro mananese al"min"m

sorts etc are added as per re3"ired chemical composition. -he melted scrap is tapped from

ind"ction f"rnace to C.'. Bo"lds for man"fact"rin B.S. 'not by bottom

!#! !em&core 3ars'1

-he -empcore process is the best process for the prod"ction of hih 3"ality rebar&s beca"se it

replaces costly alloy elements lie Danadi"m and =iobi"m with low cost raw material. 't

res"lts in hih mechanical properties, ecellent weld ability, ecellent d"ctility2 bend ability.

't imparts hih strenth to the bar "sin the latest techni3"e of -hermo Bechanical -reatment

(-B-).

Steel billets are heated in a !eheatin "rnace and rolled thro"h a se3"ence of rollin stands,

which proressively red"ce the billet to the final si4e and shape of the reinforcin bar.

/ccordin to -empcore process, the bar leavin the final stand is s"bmitted to a special heat

treatment involvin three staes.

uenchin* Sta*e'1

-he first stae consists of a drastic water coolin applied to the bar as it leaves the last

finishin stand. -he efficiency of the water coolin e3"ipment "sed at this stae has to be as

hih as to prod"ce a very hard coolin, on the bar s"rface, faster than the critical rate to form

the martensite so as to obtain a s"rface layer of cr"de martensite while core remains a"stenite.



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!em&erin* Sta*e'1

'n the second stae the bar leaves the water 3"enchin line and is eposed to air. -he heat fl"

from the still hot core reheats the 3"enched by cond"ction and the martensite formed in the

first stae is th"s s"bFected to self temperin ivin a str"ct"re called *-empered BartensiteI

which is stron and to"h. -he core is still a"stenitic at this stae.

.inal Coolin* sta*e'1

-he third stae of */tmospheric CoolinI occ"rs on the coolin bed, where the a"stenitic core

is transformed to a d"ctile ferrite pearlier core. -h"s, the final str"ct"re consists of a

combination of stron o"ter layer of tempered martensite and a d"ctile core of ferrite7partite.



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Structure of roduction and Operation23


Prod"ction

Banaer

@lectricity

+epartment

itter >peration

Br.

/sst. Prod"ctionHs"pervisor

Store Banaer

!oller inisher

-"rner

Aelper

@lectricity

S"pervisor

/sst. @lectrition

Aelper

Prod"ction ;orer Aelpers

>peration Banaer

oreman

;or shop

+epartment

!o"hin Bill

inishin Bill

;orers

8 ;orers

Baterials

Aandlin

!aw Baterials

$ ;orers 0$ ;orers

inish oods


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Production +e&artment Chart


+irector

Prod"ction Banaer

/sst. Prod"ction Banaer

oreman

itter

Aelper


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Sources of Ra21#aterials'1

'not are proc"red from vario"s private man"fact"rers(f"rnaces) from different states,

lie oa, Baharastra, /ndra Pradesh and within Jarnataa itself.

ater'1

;ater cons"mption for -B- 2 Bill Coolin and for domestic p"rpose cons"mption is met

from a bore well t"be well within the factory premises. ;ater is recirc"lated and re7"sed.

Po2er'1-he Company so"rces Power from @SC>BB,thro"h dedicated hih voltae feeder lines

and do not have alternate so"rce of electricity for man"fact"rin facilities.

Evaluate of Su&&liers' 1

+emandin "pon the 3"ality s"pplied by vario"s private man"fact"rers and best prices

offered by them.

Su&&liers Evaluation and Ratin* #echanism'1

?s"ally eval"ation is done in7ho"se by 3"ality material received from him and best

pri4ed offered by him, these are only criteria for eval"ation and ratin mechanism.

Usual (rderin* Practice'1

+"rin these time of economic slowdown of lower demand, orderin is done only when

the inventory is of minim"m re3"irement (i.e., 1% tons.)

Purchase'1

/ro"nd $0%% tons per ann"m.

Production Ca&acity'1

Prod"ction capacity is abo"t %%% ton per ann"m, "s"ally sinle shift is operated

beca"se of lower demand.



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Schedule of or=in* Hours'1

Sched"le is from am to pm with intermittent interval of one ho"r after each ho"r of

wor for all worers, that mean effectively each worer wors for only ho"rs d"rin am to

pm.

!y&ical #echanism- !echnolo*y Used'1

1. Rou*hin* Stands'1

;here in passes are taen "p for rollin down the materials from 1%%mm s3

to #mm s3.

0. .inishin* Stands'1

;here in to 9 passes are "nder taen "p for rollin down to finishin si4e of

materials from #mm s3 to finishin si4e (i.e., 8mm, 1%mm, 10mm, 1$mm,

1mm, 0%mm.)

. !echnolo*y Used'1

Eet therm technoloy is "sed for -B-


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SWOT Analysis

(Strength, Weakness, Opportunity, Threat)

Stren*th'1

1. Company is "sin*-empcore ProcessI which is the most advanced technoloy

worldwide for the man"fact"rin of the -hermo Bechanical -reatment bars. /s the

plants are based on the "praded /"tomatic ?S -echnoloy, the speed of the plant is 0

seconds for man"fact"rin of -hermo Bechanical -reatment


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. Aih cost of prod"ction compared to iant prod"cers lie -ata, S/'L (Steel /"thority

of 'ndia Limited).

$. 'rre"larity of power s"pply stops the prod"ction process and leads to the idle machine

time, idle worforce as there is no power bac"p.

OPPORT#NITIES!"

1. -he maFor raw material is available within the bo"ndary of 0%% ms, so that company

can compete easily with the bier player as the cost of prod"ction is very less.

0.


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e3"ity and profit or loss acco"nt shows the res"lts of operation d"rin the year. -h"s the

financial statements will provide a s"mmari4ed view of the firm. -herefore in order to learn

abo"t the firm the caref"l eamination of an val"able reports and statements thro"h financial

analysis or ratio is re3"ired.

#eanin* and +efinition

!atio analysis is one of the powerf"l techni3"es which are widely "sed for

interpretin financial statements. -his techni3"e serves as a tool for assessin the financial

so"ndness of the b"siness. it can be "sed to compare the ris and ret"rn relationship of firms of

different si4es. -he term ratio refers to the n"merical or 3"antitative relationship between two

itemsH variables.

-he idea of ratio analysis was introd"ced by /leander ;all for the first time in

1919. !atios are 3"antitative relationship between two or more variables taen from financial

statements.

!atio analysis is defined as, *the systemic "se of ratio to interpret the financial

statement so that the strenth and weaness of the firm a well as its historical performance and

c"rrent financial condition can be determined.

'n the financial statement we can find many items are co7related with each other

for eample c"rrent assets and c"rrent liabilities, capital and lon term debt, ross profit and

net profit p"rchase and sales etc

Im&ortance of the ratio analysis

/s a tool of financial manaement, ratios are of cr"cial sinificance. -he importance of the

ratio analysis lies in the fact that it presents facts on a comparative basis and enables the

drawin of inference reardin the performance of a firm. !atio analysis is relevant in

assessin the performance of a firm in respect of the followin aspects



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54 Liuidity Position

;ith the help of ratio analysis concl"sion can be drawn reardin the li3"idity position of

the firm. -he li3"idity position of the firm wo"ld be satisfactory if it is able to meet its c"rrent

obliation when they become d"e. a firm can be said to have the ability to meet its short term

liabilities if it has s"fficient li3"idity f"nds to pay the interest on its short mat"rin debts

"s"ally within a year as well as to repay the principal.

64 Lon* term solvency

!atio analysis is e3"ally "sef"l for assessin the lon term viability of a firm. -his

aspect of the financial position of a borrower is of concern to lon term creditor, sec"rity

analysts and the present and potential owners of a b"siness. -he lon term solvency is

meas"red by the leveraeH capital str"ct"re profitability ratio which foc"s on earnin power

and operatin efficiency. !atio analysis reveals the strenth and weaness of the firm in this

respect.

?4 (&eratin* efficiency

et another dimension of the "sef"lness of the ratio analysis, relevant from the view

point of the manaement, is that it throws liht on the deree of the efficiency in the

manaement and "tili4ation of its assets. -he vario"s activity ratios meas"re this ind of

operational efficiency. 'n fact, the solvency of a firm is, in the "ltimate analysis, dependent

"pon the sales enerated by the "se of its assets7total as well as its components.

:4 (verall &rofitability

?nlie the o"tside parties which are interested in one aspect of the financial position of a firm,

the manaement is constantly concerned abo"t the overall profitability of the enterprise. -hat

is, they are concerned abo"t the ability of the firm to meet its short term as well as lon term

obliations to its creditors, to ens"re a reasonable ret"rn to its owners and sec"re optim"m

"tili4ation of the assets of the firm. -his is possible if an interated view is taen and all the

ratios are considered toether.

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84 Inter1firm com&arison

!atio analysis not only throws the liht on the financial position of a firm b"t also

serves as a steppin stone to remedial meas"res. -his is made possible d"e to inter7firm

comparison and comparison with the averaes. / sinle fi"re of a partic"lar ratio is

meaninless "nless it is related to some standard or norm. >ne of the pop"lar techni3"es to

compare the ratio of the firm with the ind"stry averae. 't sho"ld be reasonably epected that

the performance of a firm sho"ld be in broad conformity with that of the ind"stry to which it

belons. /n inter7firm comparison wo"ld demonstrate the firm&s position vis7O7vis its

competitors.

>4 !rend analysis

inally, ratio analysis enables a firm to tae the time dimension into acco"nt. 'n other

words, whether the financial position of a firm is improvin or deterioratin over the years.

-his is made possible by the "se of the trend analysis. -he sinificance of a trend analysis of

the ratio lies in the fact that the analyst can now the direction of movement, that is, whether

the movement is favorable or "nfavorable.

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A+"A/!A0ES A/+ +ISA+"A/!A0ES (. RA!I( A/AL$SIS

Advanta*es

Sim&lifies financial statements6 !atio /nalysis simplifies the comprehension of financial

statements. !atios tell the story of chanes in financial condition of the b"siness.

#a=es intra firm com&arison &ossible' !atio analysis also maes possible comparison of

the performance of different division of the company. -he ratio helpf"l in decidin abo"t

their efficiency.

Hel&s in &lannin*' !atio /nalysis helps in plannin and forecastin over period of time acompany develops certain norms that may indicates f"t"re s"ccessH fail"re. 'f relationship

chanes in firms data over different time periods. -he ratio may provide cl"es on trends

and f"t"re problems.

Liuidity &osition' ;ith the help of ratio analysis concl"sions can be drawn reardin

li3"idity position of the company. -he li3"idity position of a companyco"ld be satisfactory

if it is able to meet its c"rrent obliations when they become d"e.

Lon* term solvency' !atio analysis e3"ally "sef"l for assessin the lon7term financial

viability of a firm. -he lon7term solvency is meas"red by the leverae H capital str"ct"re

and profitability ratios, which foc"s on earnin power and operatin efficiency.

.acilitates inter firm com&arison' !atio analysis provides data for inter company

comparison. !atio hihlihts the association with s"ccessf"l and "ns"ccessf"l firms. -hey

also reveal stron and wea companies, overval"ed and "nderval"ed company&s.



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+isadvanta*es

!atio analysis is a widely "sed tool of financial analysis. et, it s"ffers from vario"s

limitations. -he operational implication of this is that while "sin ratios, the concl"sion sho"ld

not been taen on their face val"e. Some of the limitation which characteri4e ratio analysis are

54 +ifficulty in com&arison

>ne serio"s limitation of ratio analysis arises o"t of the diffic"lty associated with their

comparability. >ne techni3"e that is employed is interfirm comparison.


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?4 Conce&tual +iversity

et another factor which affects the "sef"lness of ratios is that there is difference of

opinion reardin the vario"s concepts "sed to comp"te the ratios. there is scope for diversity

of opinion as to what constit"tes shareholders& e3"ity, debt, asset, profit and so on. +ifferent

firms may "se these terms in different senses or the same firm may "se them to mean different

thins at different times.

!eliance on a sinle ratio for a partic"lar p"rpose may not be a concl"sive indicator.

for instance, the c"rrent ratio alone is not a ade3"ate meas"re of short7term financial strenth:

it sho"ld be s"pplemented by the acid test ratio, debtors t"rnover ratio and inventory and

inventory t"rnover ratio to have a real insiht into the li3"idity aspect.

?4 !y&es of Ratios'

-he ratios can classified in the followin broad main ro"ps

1. Li3"idity ratios.

0. Capital str"ct"re or leverae ratio

. -"rnover ratios.

$. Profitability ratios.

#. @penses ratios.

54 Liuidity Ratios'

Li3"idity of the company means its ability to meet its c"rrent and short term

obliations when they become d"e for payment. 't reflects the short financial strenths and

solvency of a company. -he short term creditors of the company are interested in the short

solvency or li3"idity of the company.


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Current Ratio'

-he c"rrent ratio is the ratio of c"rrent assets to the c"rrent liabilities. 't is calc"lated

by dividin c"rrent assets by c"rrent liabilities.

C"rrent !atio C"rrent /ssetsHC"rrent Liabilities

-he c"rrent assets of the company represent s"ch assets, which can by converted into

cash within sort time or period which is normally not eceedin one year and incl"des cash and

ban balances, maretable sec"rities, inventory of raw material, wor in process and finished

oods, net debtors, bills receivable. Similarly total of c"rrent liabilities incl"des sort term

liabilities namely trade debtors, bills payable, o"tstandin epenses etc.

-he c"rrent ratio is meas"re of sort term solvency of the company. 't indicates the r"pee

of c"rrent asset available for each r"pee of c"rrent liability. -he hiher the c"rrent ratio the

larer the amo"nt of r"pees available per r"pee of c"rrent liability and the reater the safety of

the sort term creditors.

/ hih ratio indicates better li3"idity position.


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it is a meas"rement of a company&s ability to pay off its c"rrent liabilities. -he acid test ratio is

ratio of 3"ic c"rrent assets and 3"ic c"rrent liabilities.

/cid -est !atio "ic /ssetsH"ic Liabilities

-he 3"ic assets refer to c"rrent assets, which can be converted in to cash immediately. 't

ecl"des the inventory from the c"rrent assets, which are the most li3"id assets. -o et

converted into cash the inventory sho"ld be converted in to the debtors first and ten in to cash,

"nless it sold on cash basis the norm for this ratio is 161. -his ratio provides chec on the

li3"idity position of the company. 't is more rioro"s and penetratin test for the li3"idity

position of a company. Similarly to the c"rrent ratio, chanes from ind"stry to ind"stry.

64 Levera*e or Ca&ital Structure Ratios'

-he lon term creditors wo"ld F"de the so"ndness of a firm on the basis of the lon term

financial strenth meas"red in terms of its ability to pay the interest re"larly as well as repay

installment of the principal on d"e debts or in l"mp7s"m at the time of mat"rity. -he lon term

solvency of a firm can be eamined by "sin leverae or capital str"ct"re ratios. -hose ratios

are as follows:

+ebt Ratio' -his is a ratio between total debts and total assets.

-his ratio represents contrib"tion of the o"t side f"nd in the total assets of a company. 't shows

the proportion of total assets financed by the o"t side f"nds. / low ratio is desirable from point

of view of creditors as there is a s"fficient marin of safety is available to tem. -he creditorsare at hiher ris, when this ratio is on the hiher side. -his may be d"e to over val"ation of the

assets or d"e to the method of charin depreciation on the assets.

+ebt1Euity Ratio' -his ratio represents relation between borrowed f"nds and owners

e3"ity capital is a pop"lar meas"re of lon term solvency of a firm. -he relationship of the debt

e3"ity ratio shown by6

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+ebt !atio -otal +ebt H -otal /ssets Q1%%


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+ebt7@3"ity !ation Lon term debt H shareholders e3"ity

-he e3"ity ratio is an important tool of financial analysis to apprise financial str"ct"re >f firm.

't has important view point of the debt holders, owners and the firm itself what 's the

relationship between debt 2 e3"ityR -here can not be riid r"le. 't will depend "pon

Circ"mstances, prevailin practices, type 2 si4e of the b"siness, nat"re of the ind"stry and

deree of ris involved and so on. or eample, firm&s havin a stable income or a firm

prod"cin basic pro d"cts can afford to have a hiher(i.e.60 better)

Pro&rietors Ratio'

-his ratio shows proportion of total assets financed by the owners f"nd. / hih ratio indicates

that the debt is not bein eploited to et the benefit of the tradin on e3"ity. 'n eneral a

company sho"ld have moderate ratio.

Interest Covera*e Ratio'

-his ratio meas"res the debt N servicin capacity of a firm in so for as fied interest on lonterm loan is concerned.

-his ratio, as the name s"ests, shows how many times the interest chares are covered by

the @


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ratios are the test of relationship between sales (or cost of oods sold ) and vario"s assets of

company. +ependin on vario"s types of assets there are vario"s types of activities ratios.

Q Inventory or stoc= turnover ratio'1

't is comp"ted by dividin the cost of oods sold by the averae inventory.

-he cost of the oods sold can also be comp"ted as net sales less ross profit.

-he averae inventory is comp"ted as the simple averae of the openin stoc and closin

stoc of the inventory. -his ratio indicates n"mber of times inventory is replaced d"rin the

year. 'n case of seasonal ind"stries, the averae can be comp"ted by tain simple averae for

openin stoc of a month for a year, which will smoothen o"t fl"ct"atin in the inventory. 'n

some cases if the data is not easily available, then this ratio can be calc"lated by dividin the

net sales by closin inventory.

'n eneral, a hih inventory t"rnover ratio is better, as it shows the efficient

manaement of inventory. b"t, a very hih inventory t"rnover ratio can be an indicative of

"nder investment in a very low level of inventory. / very low level of inventory serio"s

implications. 't will adversely effect the prod"ction d"e to *o"t of stocI sit"ation which in

t"rn effect the ability of a company to meet c"stomer demand. Conversely a very low

inventory t"rnover ratio is also not ood as this indicates ecessive inventory or over

investment. 'n inventory d"e top this f"nds are bloced in ecessive inventory, which may

impose serio"s problem in worin capital manaement.

-he inventory t"rnover ratio can also be epressed in terms of days or months of cost of

oods sold.

J/et Asset !urnover Ratio' =et asset is also called capital employed .'t is calc"lated by

dividin net assets divide by net sales.

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'nventory -"rnover !atio cost of oods sold H averae inventory

'nventory Aoldin period #H 'nventory -"rnover !atio

=et /sset -"rnover !atio =et sales H =et /ssets


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or=in* Ca&ital !urnover Ratio6 / firm may also lie to red"ce net c"rrent assets to net

sales. 't may comp"te worin t"rnover by dividin net sales by the net worin capital

Aiher ratio indicates efficiency of "sin worin capital to maimi4e the sales and vice7versa.


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-he manaement of a company or the company itself is nat"rally interested to meas"re

operatin efficiency. /lso, the owners invest their f"nds in the company in the epectation of

reasonable ret"rn to its share holders depends on the profits earned by it. Profitability an

important meas"re of efficiency. 't also indicates the acceptance of the p"blic the prod"ct and

its effectiveness in the maret. /lso, the profits provide the money for the repayment of the

inc"rred to finance the proFect, epansion proramme and other related activities. -he

profitability ratios help in meas"rin the profitability of the company. Dario"s types of s"ch

ratios are eplained below,

0ross &rofit #ar*in' ross profit marin represents the relation between the profits and

sales.

ross profit is the res"lt of the relation between prices, sales val"e and cost. /ny chanes in

these well affect the ross profit. / hih ross profit marin is the of ood manaement. /s it

implies that the cost of oods it self miht have red"ced.

Q (&eratin* Profit #ar*in' -his ratio meas"res the relationship between operatin profitand sales.

-he operatin profit means the profit before the interest and taes and before

considerin the effect of non tradin transactions. (-his may also be considered as after interest

and ta) P/-H@


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-he profit ta is the total profit (i.e. incl"din operatin profit and non operatin) after

interest and ta. -his ratio indicates the percentae of the net sales left after payin the interest

and taes. -his incl"des the amo"nt available for the apportionment to its owners for providin

their capital at ris.

-he hih net profit marin sho"ld ens"re ade3"ate ret"rn to the owners as well as

enable company to withstand adverse economic conditions and sellin price declinin, the cost

of prod"ction is risin and the demand prod"ct is fallin.

Return (n Ca&ital Em&loyed' 't is the indicator of relationship between net profit

and total assets (capital employed).

-his ives the ret"rn on total assets employed. n @3"ity (=et Profit /fter -aes) 1%% H /verae =et Profit


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'n case of lower ratio is favorable while hiher one is "nfavorable



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+ESI0/ (. !HE S!U+$

!itle of the &ro)ect

*/ St"dy of inancial Performance n !atio /nalysisI at PSSPL Company.

Statement of the &roblem

!atios are very "sef"l to draw the concl"sion so manaement wants to now what are

the factor contrib"tin for the f"t"re rowth and also wants to maintain the same in the loner

r"n and also improve the profitability and li3"idity of the orani4ation.

Research &roblem

-o now the financial performance of the orani4ation thro"h ratio analysis, by

comparin years financial performance of the company.

Pur&ose of the study

/ company&s balance sheet and profit 2 loss acco"nts are val"able information so"rces

for identifyin ris tain and assessin ris manaement effectiveness. /ltho"h amo"nts

fo"nd on these statements does not provide val"able insihts of performance so ratio analysisis re3"ired for determinin ood or bad performance of company and also for determinin its

ca"ses. -he st"dy incl"des the calc"lation of different financial ratios. 't compares fo"r years

financial statements of the company to now its performance in these different years.

Sco&e of the study

-he scope of the st"dy is limited to financial aspects of PSSPL Company.

(b)ectives

o -o now the financial performance of the orani4ation.

o -o st"dy financial position of PSSPL based on different ratios.

o -o determine the profitability and li3"idity of the company thro"h ratios

analysis.

o -o compare the present and previo"s years performance of PSSPL Company.



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#ethodolo*y

+ata Collection method

5 Primary +ata 6 -he information Collected from Personnel 'nteraction with manaer

and other staff

5 Secondary67 /nn"al reports of PSSPL Company

#easurement techniue- Statistical tool

•/cco"ntin ratio

• inancial statement of the company

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54Liuidity Ratios

Current Ratio' -he c"rrent ratio is the ratio of c"rrent assets to the c"rrent liabilities

.'t is calc"lated by dividin c"rrent assets by c"rrent liabilities.

Current Ratio K Current Assets - Current Liabilities

!able 545

Sl.=o ear C"rrent /ssets

/mt in !S

C"rrent Liabilities

/mt in !S

!atio

1 6;;81;> 6:,>:9,?1;7 69,?65,7584;; ,8;


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uic= Ratio'1 't is the ratio between 3"ic or li3"id assets 2 li3"id

liabilities. 't is a meas"rement of a companys ability to pay off its c"rrent liabilities.

uic= Ratio K Liuid Assets - Liuid Liabilities

Li3"id /ssets C"rrent /ssets N Stoc 2 Prepaid @penses

Li3"id Liabilities C"rrent Liabilities N verdraft

!able54 6

Sl.=o ear Li3"id /ssets

/mt in !S

Li3"id Liabilities

/mt in !S

!atio

1 6;;81;> 7;,75,5794;

;

:,6:,;?,75:4;; ;45>

0 6;;>1;7 7,6;;4;; 64:9

Chart 1.0

Inter&retation' enerally 3"ic ratio of 161 is considered to represent a satisfactory

C"rrent financial condition of the company. -he 3"ic ratio of the company is contin"o"sly

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increased by %.1 to 1.8 to 1.0 to 0.$8 from the year of 0%%# to 0%%8 respectively .


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respectively .ther lon term debt (Bortaes K ?,9>,;6,5674;; 5,6>,;;,1;7 :,76,76,89;4;; ?,;>,


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to 1.11 from 0%%#7% to 0%%87%9 respectively by observin $ years ratio, the company has hih

ratio i.e. .% in 0%%#7%

Pro&rietary Ratio'1 -he !atio indicates the relationship between proprietary f"nds 2 total

assets.

Pro&rietary Ratio K Pro&rietors fund - !otal Assets

Proprietor&s f"nd Share Capital K !eserves 2 S"rpl"s.

-otal /ssets C"rrent assets K ied /ssets

!able 64?

Sl.=o ear Proprietor&s f"nd

/mt in !S

-otal /ssets

/mt in !S

!atio

1 6;;81;> 5,6>,;;,


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Inter&retation' -his ratio indicates the percentae of shareholders contrib"tion in

total assets. Proprietary ratios of the company is contin"o"sly increased for $ years i.e. %.1$ to

%.$ to %.$% to %.$% in the year 0%%#7% to 0%%87%9 respectively.Aiher ratio indicates a

sec"red position to creditors 2 a low ratio indicates reater ris to creditors. 5,;6,9?,?;;4;; 69,9>,761;7 5,:>,89,?;;4;; 86,


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Inter&retation' . 'nterest coverae ratio is meas"rin of solvency of the firm in payin the

interest. -he interest coverae ratios of the company is contin"o"sly increased 2 decreased in

$ years i.e. . to 0. to .0 to 0.8 in the year 0%%#7% to 0%%87%9 respectively. -he

hihest ratio . in 0%%#7%, .



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?4 !urnover or activity Ratio'1

Inventory !urnover Ratio' -his ratio is "sed for meas"rin the profitability. 't is comp"ted by

dividin the =et sales by averae inventory

Inventory !urnover Ratio K Cost of *oods sold - Avera*e inventory

Cost of oods sold >HS K P"r K +irect @p N CHS

/v 'nventory >penin Stoc K Closin Stoc

0

!able ?45Sl.=o ear Cost of oods sold

/mt in !S

/verae inventory

/mt in !S

!atio in times

1 6;;81;> ,1,$#,8.%% 5,58,98,>:64;; 0.10

0 6;;>1;7 1,1,$0,100.%% 5,;7,;5,;


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/et Assets !urnover Ratio'1 =et assets is also called capital employed. 't is calc"lated by

dividin net assets divide by net sales

/et Assets !urnover Ratio K /et Sales - /et Assets

=et Sales Sales N Sales !et"rn

=et /ssets C"rrent /ssets N C"rrent Liabilities

!able ?46

Sl.=o ear =et Sales

/mt in !S

=et /ssets

/mt in !S

!atio in times

1 6;;81;> 56,8,>584;; 15,77,88,?574;; 7.%9

0 6;;>1;7 5;,9:,77,564;; #.

6;;71;9 5;,7?,;6,;;;4;; 6,69,?7,?8?4;; $.9$ 6;;91;< 56,6


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:4Profitability Ratios'

0ross Profit Ratio ' ross profit ratio represents the relation between the profit 2 sales.

0ross Profit Ratio K 0ross &rofit - /et Sales 5;; =et Sales Sales N Sales !et"rn

-able $.1Sl.=o ear ross Profit

/mt in !S

=et SalesQ 1%%

/mt in !S

!atio in G

1 6;;81;> ,1,%##.%% 56,8,>584;; .10

0 6;;>1;7 ,,0#.%% 5;,9:,77,56


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(&eratin* Profit Ratio 6 -his ratio meas"res the relationship between operatin profit 2

sales.

(&eratin* Profit RatioK (&eratin* Profit - /et Sales 5;;


!able :46Sl.=o ear >peratin Profit

/mt in !S

=et SalesQ 1%%

/mt in !S

!atio in G

1 6;;81;> 5577;68774;; 56,8,>584;; 9.$#

0 6;;>1;7


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/et Profit #ar*in' -his ratio meas"res the relationship between 2 profit after ta 2 net sales.

/et Profit #ar*in K /et Profit - /et sales 5;;

=et profit profit after ta


!able :4?

Sl.=o ear =et Profit

/mt in !S

=et SalesQ 1%%

/mt in !S

!atio in G

1 6;;81;> 09,$,.%% 56,8,>584;; 0.#

0 6;;>1;7 $,#,$.%% 5;,9:,77,56


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Return on Ca&ital Em&loyed' 't is the indicator of relationship between operatin profit 2

capital employed

Return on Ca&ital Em&loyedK (&eratin* Profit - Ca&ital Em&loyed 5;;

>peratin profit =et sales N >peratin @penses

Capital @mployed =et ;orin Capital K ied /ssets

!able :4:

Sl.=o ear >peratin Profit

/mt in !S

Capital @mployed Q1%%

/mt in !S

!atio in G

1 6;;81;> 55,77,;6,8774;; :,7?,5>,5794;; 0$8.#

0 6;;>1;7 4;; 10.$

6;;71;9 ,78;4;; 98,7>4;; 11.#0

Chart :4:

Inter&retation' !et"rn on capital employed or ret"rn on investment indicates act"al amo"nt

earned on capital employed .-he ret"rn on capital employed ratio of the company is decreased

for 08#.# to 10.$ to 10.$% to 11.#0 from 0%%%#7% to 0%%87%8 respectively



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ret"rn on e3"ity in the year 0%%87%9 and also overall position of the ret"rn on e3"ity was

satisfactory.



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84 E@&enses Ratios'

E@&enses Ratio' 't is the relationship between epenses to net sales.

E@&enses Ratio E@&enses - /et Sales 5;;

!able 845Sl.=o ear @penses

/mt in !S

=et Sales Q 1%%

/mt in !S

!atio in G

1 6;;81;> 5;,9:,;8>4;; 56,8,>584;; %.8

0 6;;>1;7 :7,7;,6?74;; 5;,9:,77,56


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Summary of the Ratios'

.I/+I/0S


Particulars 6;;81;> 6;;>1;7 6;;71;9 6;;91;<

54Liuidity Ratios

C"rrent !atio ;489 64


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SU00ES!I(/S

54 -he company needs to increases interest t"rnover ratio by "tili4in the rec"rrin

f"nd and the profit retentions: it is more safe to the lon7term creditors.

64 -he company needs to maintain ood inventory t"rnover ratio by increasin the

sales.

?4 -he company needs to increase the worin capital t"rnover ratio for efficient

"tili4ation of the worin capital.

:4 -he company needs to increase the ret"rn %n capital employed ratio for efficient

"tili4ation of capital.



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C(/CLUSI(/

inancin is the bac bone of the proress of any company. -herefore a financial ratio

has its impact on the manaement. !atios ive the clear pict"re of financial condition of the

company.

-he areas which were assined to me were all ey areas of the finance divisions which

also incl"de different departments 2 f"nctions. -he profitability position of the company is

very ood beca"se, the cost of prod"ction is low 2 sellin price is hih .-he company has

minim"m debt in the capital str"ct"re, it doesn&t have financial ris.


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3I3(L(0RAPH$

3oo=s'

• .inancial #ana*ement ' Ghan and ain M I4# 4Pandey4

• .inancial Accountin* ' /arayanas2amy

• Annual Re&ort of PSSPL Com&any4

Documents

A Project Report on Ratio Analysis at Patel Shanti Steel Private Ltd, RAICHUR