A.gayathridevi 11 a Study on Financial Performance Using Ratio Analysis at Emami Ltd

8/10/2019 A.gayathridevi 11 a Study on Financial Performance Using Ratio Analysis at Emami Ltd

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A STUDY ON FINANCIAL PERFORMANCE USING

RATIO ANALYSIS AT EMAMI LTD

SUMMER PROJECT REPORT

Submitted by

A.GAYATHRIDEVIREGISTER NO: !"#$"%%

U&de' t(e )uid*&+e ,-

M'. R. HEMALATHA/ M.0.A./

F*+u1ty ,- m*&*)eme&t tudie

In partial fulfilment for the award of the degree

of

MASTER OF 0USINESS ADMINISTRATION

DEPARTMENT OF MANAGEMENT STUDIES

SRI MANA2ULA VINAYAGAR ENGINEERING

COLLEGE

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PONDICHERRY UNIVERSITY

PUDUCHERRY/ INDIA

SEPTEM0ER 33!

SRI MANA2ULA VINAYAGAR ENGINEERING

COLLEGEPONDICHERRY UNIVERSITY

DEPARTMENT OF MANAGEMENT STUDIES

0ONAFIDE CERTIFICATE

This to certify that the project work entitled A STUDY

ON FINANCIAL PERFORMANCE USING RATIO

ANALYSIS AT EMAMI LTD4is a bonafide work done by

A.GAYATHRIDEVI 5REGISTER NO: !"#$"%%6 in partial

fulfilment of the requirement for the award of Master of

Business Administration by Pondicherry Uniersity durin! the

academic year "##$%"##&'

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GUIDE HEAD OF

THE DEPARTMENT

Vi7*8V,+e E9*mi&*ti,& (e1d O&(((((((((((((((

ETERNAL EAMINER

CertificateThis is to certify that Mr' Adil Bashir )heikh has completed his

)ummer Trainin!Project under my direct superision' *e underwentthe )ummer Trainin! on andfrom 1"thof May "#1#to "ndof +uly "#1#, durin! which he was assi!ned the task of Unit linked-nsurance plans offered by -.-.- Prudential and its comparison

withits competitors/ which he has successfully completed and thesame is presented inthe form of the present Project 0eport'-t is further


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certified that the project report submitted by Adil Bashir)heikhreflects his ori!inal work and on the work assi!ned to him forthe )ummer Trainin!and that the present project report has not been

submitted elsewhere for award of any de!ree, diploma orfellowship'Mr' 2asir AhmadA!ency Mana!er

D E C L A R A T I O N

-,

Adil Bashir )heikh, a bonafide student of MBA 34ull Time5

Pro!ramme at the-M67, Pune, hereby declare that - haeunder!one the )ummer Trainin! at -.-.-Prudential 8ife-nsurance .o' 8td' under the superision of Mr'*'9 Abhyankar onand from 1"%May to #"%+uly'- also declare thatthe present project report is based on the aboe summertrainin!and is my ori!inal work' The content of this projectreport has not been submittedto any other uniersity orinstitute either in part or in full for the award ofanyde!ree, diploma or fellowship'4urther, - assi!n the ri!ht tothe uniersity, subject to the permission fromtheor!anisation concerned, use the information and contentsof this project to deelopcases, case lets, case leads, and papers forpublication and:or for use in teachin!'Place; Pune Adil Bashir )heikh7ate; "1%#$%"#1# 0oll no'; #$%MBA395%A

ACKNOWLEDGEMENT

-t is with immense satisfaction that, - am completin! my)ummer Project 0eport, - therefore,would like to waitfor few moments and thank -M67, B


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members for their e>tensie support by impartin! in us thepractical approach of corporate sector, and theiraluableback in! of !ett in! ourseles inoled with

the functionin! of the company rather thanjustinole us in our projects'- would also wish toacknowled!e my profound !ratitude to -.-.- Prudential8ife -nsurance .o'8td' who allowed me to do )ummerTrainin! and helped me in the completion of this project'-am e>tremely !rateful to all the concerned employeesfor their full support and !uidance despitetheir ti!ht and

busy schedules'- would like to e>press my special andsincere thanks to Mr' 2asir Ahmad 3A!encyMana!er5who happened to be my industry !uide forrenderin! aluable !uidanceand necessarysu!!estions in brin!in! out this projectreport'8ast but not the least? - shall fail in my duty, if - don@tthank all those concerned people who haedirectly orindirectly contributed in the completion of this entire )ummer-nternship Project'Adi1 S(ei;(


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%.#! Limit*ti,& ,- t(e tudy

An underlyin! assumption for the entire project is that the

details and the feedback receiedfrom the population is true')ample of only 1## respondents is selected from thepopulation'

)ome of the respondents were not ready to fill thequestionnaires and some of them werenot ready to comeout openly'

C(*posed to same or similar riskshares loss of the unfortunatefew'8oss of assets depries the owner of the e>pected benefit'-nsurance in this conte>t is a mechanism that helps

to reduce the aderse consequences dueto loss of assets'. NEED FOR INSURANCE:

The possibility of dama!e to assets caused by any perilis the risk that the asset is e>posedto'0isk means the possibility of loss or dama!e that may or may

not happen'


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-t is because of the uncertainty about the risk that insurancebecomes important'

Co uncertainty implies no insurance'*uman life is an income !eneratin! asset that can be lost incase of early death or disabilitycaused by an accident'-nsurance does not protect the assets but only compensates the

economic or financial loss'Basically, insurance coers tan!ible assets but theconcept can be e>tended to intan!iblesalso'People are e>posed to risks the consequences ofwhich are difficult to be borne by anindiidual' Thepurpose of insurance is to protect the income ofindiidual and proidefinancial security to his familydependent on his income in the eent of his premature death'The indiidual himself also needs financial securityfor the old a!e or on his becomin!permanently disabledwhen his income will stop

Co p e r son shou ld b e in a pos i t io n t o ma ke theri sk ha pp en or oc cu r an d ta ke un fa ir adanta!e'-nsurance coers the risk of dyin! too early or liin! too lon!'." HISTORY OF INSURANCE

The ori!in of insurance is ery old' The time when we werenot een born? man has sou!htsome of protection from the

nature' The basic ur!e in man to secure himself a!ainst

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anyform of risk and uncertainty led to the ori!in ofinsurance'*istorians beliee insurance first deeloped insummer and Babylonia 3both in whatis now -raq5

be!innin! in about ###B.' The merchants andtrade rs of these societ ies transferred and pooled theirmoney to protect themseles from losses of car!o tothieesand pirates'- n t h e 1 &thcentury B., Babylonian kin! *ammurabi deelopeda code of law,known as the code of *ammurabi,

whichcodifie d many specif ic rules !oernin! thepracticesof early risk%sharin! actiities' 4or instance, the codedictated that traders had torepay merchant s whofinanced tradin! oya!es unless thiees stole !oodsin transit, inwhich case debts would wecancelled')ea!oin! merchants from Phoenicia 3in andaround present%day 8ebanon5 be!anus in! a system ofinsurance known as bottom about 1"## B.' -n thissystem' Backer @sloaned money to merchants to financeoya!es' Merchants offered their ships 3the hullwasknown as the ship@s Dbottom@5 as collateral for suchloans'Ehen a trip succeeded, the merchant wouldpay the trip@s backer the ori!inal loan plus interest,the equialent of a premium' -f a shop went down on its

oya!e, the trip@s backer would cancel the merchant@sloan' 4orms of insurance resemblin! bottomry hadspread toother parts of Asia and the Mediterranean by =##B.'-n the last seeral centuries B. the societies of 9reeceand 0ome deeloped someof t he ear lies t systems oflife insurance' 9reek and roman citiFens formed

beneolentsocieties? or!aniFations in which members

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paid dues that went toward payin! for the burialofmembers who died' )ometimes these societies alsopaid for the liin! e>penses of deceased members@

families' 7urin! the Middle A!es 3thto 1thcenturies A75, workersjoined to!ether in craft' Many !uilds,particularly in 6n!land and -taly, proided benefits toworkersand their families in the eents of illness or death'

.# LIFE INSURANCE IN INDIA:.#% INTRODUCTION:

Eith such a lar!e population and the untappedmarket area of this populationinsurance happens tobe a ery bi! opportunity in -ndia' Today it standsas a business!rowin! at the rate of 1%"# per centannually' To!ether with bankin! serices, itaddsabout $ perce n t to th e coun t ry@s 97P' -nsp i t e o f a l l t h i s ! r o wth t h e s t a t i s t i c s o ft he penetration of the insurance in the country is erypoor' Cearly G of -ndian populationsare without 8ifeinsurance coer and the health insurance' This is anindicator that !rowthpotential for the insurance sector isimmense in -ndia, -t was due to this immense!rowththa t the re!u l a t i ons were in t r oduc ed i n th

e ins uranc e se c tor a nd in co n t in ua t i on the !oernment in 1HH to e>amine the arious aspects of theindustry constituted Malhotra.ommittee/' The keyelement of the reform process was participation of oerseasinsurancecompanies with "G capital' .reatin! a moreefficient and competitie financial systemsuitable for therequirements of the economy was the main idea behind

this reform' )incethen the insurance industry has !one

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throu!h many sea chan!es'The competition 8-. started facin!from these companies were threatenin! to the e>istenceof 8-.')ince the liberaliFation of the industry the insurance industry

has neer looked backand today stand as the one of the most competitieand e>plor in! indust ry in -ndia' Theentry of the priateplayers and the increased use of the new distribution are in thelimeli!httoday' The use of new distribution techniquesand the -T tools has increased the scope of the industry inthe lon!er run'

.#0RIEF HISTORY:

T h e i n su r a n c e c a m e to - n d i a f r o m UI? w i th t h ees tab l i shm ent of t he J rie nta l 8i fe insurance.orporation in 1&1&' The -ndian life insurance companyact 1H1" was the firststatutory body that started tore!ulate the life insurance business in -ndia' By 1Habout1= -ndian, 1 forei!n and $ proident firms werebeen established in -ndian' Then thecentral !oernmenttook oer these companies and as a result the 8-. wasformed' )incethen 8-. has worked towards spreadin!life insurance and buildin! a wide network across thelen!th and the breath of the country'After theliberaliFation the entrance of forei!n players hasadded to the compet it ion in market' The !eneral

insurance business in -ndia, on the other hand, can trace itsroots to thetriton insurance company 8td', the first!eneral insurance company established in the year 1in .alcutta by the British' -n 1H$"The 9eneral -nsuranceBusiness 3CationaliFation5Act, 1H$" nationaliFed the!eneral insurance business in -ndia with effect from 1st

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+anuary1H$' -t was after this that 1#$ insurersamal!amated and !rouped into four companiesiF'the Ca t iona l -n su rance .ompany 8 td ' , t he ne

w -n di a As su ra nc e .o mp an y 8t d' 9- .incorporatedas a company'

Chapter 3COMPANY PROFILE

CORPORATE INTRODUCTION ICICIPRUDENTIAL LIFEINSURANCE3.1 Entry of Priate P!ayer"The introduction of priate players in the industryhas added to the colors in the du ll industry' Theinitiaties taken by the priate players are erycompetitie and hae !ienimmense competition to theon time monopoly of the market 8-.' )ince the adentof thepriate players in the market the industry has seennew and innoatie steps taken by theplayers in thissector' The new players hae improed the serice quality ofthe insurance''The followin! companies are present in the 8ife-nsurance -ndustry in -ndia'Na#e of the P!ayerBajaj AllianF 8ife -nsurance .ompany 8imited'Birla )un 8ife

-nsurance .o' 8td*74. )tandard 8ife -nsurance .o' 8td-.-.-Prudential 8ife -nsurance .o' 8td-C9 Cew2ork 8ife -nsurance .o' 8td'Met 8ife -ndia -nsurance .ompany Pt'8tdIotak Mahindra Jld Mutual 8ife -nsurance8imited)B- 8ife-nsurance .o' 8tdTata A-9 8ife -nsurance .ompany8imited0eliance 8ife -nsurance .ompany 8imited'Aia 8ife

-nsurance .o' -ndia Pt' 8td')ahara -ndia 8ife -nsurance .o'

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8td')hriram 8ife -nsurance .o' 8td'Bharti AKA 8ife -nsurance.ompany 8td3.$ The Co#pany

-.-.- Prudential 8ife -nsurance .ompany is a jointenture between -.-.- Bank , Apremier financialpowerhouse, and prudential pica leadin! internationalfinancial serices!roup headquartered in the UnitedIin!dom' -.-.- Prudential was amon!st the firstpriatesector insurance companies to be!in operationsin 7ecember "### after receiin! approalfrom -nsurance

0e!ulatory deelopment authority 3-07A5'-.-.-Prudential@s equity base stands at 0s 11& crore with-.-.- Bank and Prudentialand Prudential plc holdin!$=G and "G stake respectiely' 4or the past fieyears, -.-.-Prudential has retained its position as theCo' 1 priate life insurer in the country, with awide ran!e of fle>ible products that meet the needs ofthe -ndian customer at eery step inl ife' -n the fi rs tquartet of financial year "##%#$, we hae crossed anew milestone of insurin! the lies of more than "'million policy holders'-.-.- Prudential 8ife -nsurance is thefirst in -ndia to receie a Cational -nsurer 4inancial)tren!thratin! of AAA 3-nd5 by 4itch 0atin!s' This ratin! isdetermined after a thorou!healuation of the company@sfinancial processes, risk mana!ement framework, product

mi>,market share etc' After a thorou!h ealuation, 4itchhas assi!ned us ratin! reflectin!thehi!hest creditworthiness' Jer the pastfie y ears, we hae paid oer ",1## cla imsamountin!to more than 0s " crore and taken seeral steps toassure customers of a quick and smooth claims process'Ee hae a record of settlin! H"G of claims receied

withinei!ht workin! days from the date of receiin! the

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last requirement' The AAA ratin! alsoreflects theon!oin! operational and capital support that -.-.-Prudential receies from itsshareholders'-.-.- Prudential

Assets under mana!ement crosses H## crores mark;A!ain we are theno' 1 amon! the priate 8ife -nsurers toachiee this milestone'Ee hae once a!ain maintained ourleadership position with a "G market share amon!st thepriate 8ife -nsurance .ompanies'3.$1 Di"tri%&tion-.-.- Prudential has one of the lar!est distribution networks

amon!st priate life insurersin -ndia, hain! commencedoperations in H cities and towns, with 11 branches and"#spoke branches' Ee hae seen bancas surance tie%ups, hain! a!reements with -.-.-Bank, 4ederal Bank,south -ndian Bank, Bank of -ndia, 8ord Irishna Bankand some .o%operatie banks, as well as oer 1#corporate a!ents and brokers' Ee hae also tied upwithC9Js, M4-s and corporate for the distribution of ruralpolicies as well asor!aniFations like 7han for distributionofSalaam Zindagi, a policy for the socially andeconomicallyunderpriile!ed sections of society'3.$$ O&r Pre"en'e-.-.- Prudential has recruited and trained oer #,### L

insurance adisors to interfaceand adise customers'4urther, it leera!es its state%of%the%art -T infrastructureto proidesuperior quality serice to customers'3.$3 A%o&t the Pro#oter"-.-.- Bank 3C2)6;-BC5 is -ndia@s second lar!est bankand lar!est priate sector bank with oer # years offinancial e>perience and with assets of 0s 1&H"'1& billion as

on #

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th)eptember ,"##' -.-.- Bank offers a wide ran!e ofbankin! and financial serices tocorporate and retail

customers' This is done throu!h a ariety of delierychannels, throu!hits specialiFed subsidiaries andaffiliates in the areas of inestment bankin!, life andnon%life insurance, enture capital and assetmana!ement' -.-.- bank is a leadin! player in there ta ilbankin! market and has oer 1 million retailcustomer accounts ' The Bank has anetwork of oer &

branches and e>tension counters, and ",###LATMs'6stablished in 8ondon in 1&=& , Prudential plc ,throu!h its business in the UI and Asia,proides retailfinancial serices products and serices to more than1 million customers ,policyholder and unit holdersworldwide' As of )eptember #, "##, the company had oer

1 billion in funds under mana!ement' Prudential hasbrou!ht to market an inte!ratedran!e of financialserices products that now includes lifeinsurance ,pensions , mutualfunds , bankin! , inestmentmana!ement and !eneral insurance ' -n Asia , Prudential istheleadin! 6uropean 8ife insurance company with a astnetwork of "= life and mutual fundoperat ions in twele

countries N .hina , *on!Ion! , -ndia , -ndonesia +apan , Iorea ,Malaysia , thePhilippines , )in!apore , Taiwan , Thailand , and


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bi!!est "%O %wheeler manufactures in the world'AllianFA9 is a leadin! insurance con!lomerate !lobally and thelar!est asset mana!er inthe world, mana!in! assets

worth oer HH billion 6uros 30s', =,= .rores5'AllianFA9 has 11 years of financial e>perience inoer $# countrie s' Baj aj Auto is the most trustedname in the -ndian marker for oer years'The BajajAllianF 8ife -nsurance .o'8td ' has been from = y earssince this company has established its roots in-ndia' Thi scompany was incorporated on 1"

thMarc h , "## 1 and th e compa ny re ce i ed -0 7Acertification on rdAu!ust, "##1'The Baj aj AllianF 8ife -nsurance .o'8td', customer deli!ht is there !uidin!principle'6nsurin! world%class solutions by offerin!customiFed products with transparent benefits,supportedby the best technolo!y is there business philosophy' Andthe punch line of thecompany is-)AISI *AROORAT ,AISA INSURANCE /PRODUCTS TO SUITYOUR NEEDS0.3.3$ LIFE INSURANCE COMPANY ANINTRODUCTION8ife -nsurance .orporation of -ndia is the lar!est life

-nsurance company in -ndia and alsothe country@s lar!estinestor' -t is fully owned by the !oernment of -ndia' -talso fundsclose to "='G of the -ndian !oernment@se>penses' -t has assets estimated of & trillionrupees' -twas found in 1H'*eadquartered in Mumbai, which isconsidered the financial capital of -ndia ' Thelifeinsurance corporation of -ndia currently has &

Fonal offices and 1#1 d iisional offices located in

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ICICI Pr& Sae n Prote't 6ndowment plan

ICICI Pr& Ca"h (a6 An anticipatory endowment plan

S#art 7i2 An anticipatory education plan for children3.1% Pen"ionP!an"This option is helpful for retired persons N this planhelps the retired person to lie worry%free life'

ICICI Pr& Life Ti#e S&per Pen"ionN re!ular Premium, unit%linked pension policy

ICICI Pr& LifeLin6 S&per Pen"ionN )in!le premium, unit%linked pension policy'

ICICI Pr& Pre#iLife Pen"ionN 8imited premium payin! unit linked pension Policy'

ICICI Pr& LifeSta5e Pen"ionN Co premium allocation char!e for re!ularpremiumswhich means 1##G of the money is inested'

E!ite Pen"ion% 8imited, si> year term and three year premium paymentterm pensionplan'3.$ (A)A) ALLIAN*3.$a TRADITIONAL PLANSEn2o8#ent

Life Ti#e Care /

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A whole life plan , which proides surial benefitsat the a!e of , thereby makin! sure you are financiallysecure at the time when you need it the most'

Ine"t 4ain

Sae Care3.$% MONEY (AC7

Ca"h 4ain /A money

back plan which !uarantees 1"G payout andbonuses' easypayouts which !ie upto 1" G L bonuses'3.$' PENSION PLANSAnnuity

Pension 9uarantee06T-06M6CT

Ne8 Unit 4ain Ea"y

Pen"ion P!&" RP

F&t&re In'o#e 4enerator

3.3 Life In"&ran'e Co#panyIn"&ran'e P!an"9-nsurance plans are policies that talk to you indiidually and!ie you themost suitable options that can fit yourrequirements'3.3a CILDREN PLANS

)eean An&ra5

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Re!ian'e En2o8#ent p!an3.%RETIREMENT PLANS

Tota! Ine"t#ent P!an 11Pen"ion

Re!ian'e S&per 4o!2en Year" P!an

Re!ian'e ,ea!th : ea!th P!an

Chapter

Unit Lin6 In"&ran'e P!an".1 Unit Lin6

In"&ran'e P!an"

U8-P) are a cate!ory of !oal based financial solutions thatcombine the safety of insuranceprotection with wealthcreation opportunities' -n U8-P), a part of inestment!oes towardsproidin! you life coer' The residualportion of the U8-P is inested in a fund which in turninests in stocks or bonds? the alue of inestments

al te rs wi th the performance of underlyin! fund opted byyou

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.$ ,OR7IN4 OF ULIPSEhen you decide the amount of premium to be paid and

the amount of life coer you wantfrom U8-P, the insurerdeducts some portion of U8-P premium upfront' Thisportion isknown as Premium allocation chan!e, andaries from product to product' The rest of premium isinested in fund or mi>ture of funds chosen by you'.3 Unit Lin6e2 In"&ran'e P!an" of ICICIPr&2entia! an2 it"Co#petitor"

.31 ICICI PRUDENTIALJfferin! insurance plans with fle>ibility and ta>benefits' The arious options for thecustomers toinest in U8-P'

-.-.- Pru 8ife )ta!e 0P ; Jffers a wide ran!e opf benefits topolicyholders ,many of them are still not market say

-.-.- Pru 8ifesta!e Assure; Jffers a clear adanta!e by proidin! !uaranteed returns3maturity additions5 on the 1styear premiums'

-.-.- Pru 8ife8ink )uper; )in!le premium unit linkedinestment cum -nsurance plan'

-.-.- Pru 8ifeTime 9old ;0e!ular premium unit linkedplan O offers attractie additionalallocation units at re!ularinterals

-.-.- Pru Premier8ife 9old;Jffers short term premiumpayment terms and proidespolicyholder with fle>ibleinestment options'.3$ ULIPS OF (A)A) ALLIAN*

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Market linked insurance plans inest the premium in to theequity, debt and cashmarkets by the way of allocatin! units,which like any other mutual fund hae a CA een if youdon@t hae consistent income'


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Mar6et P!&" 1; This is a unit linked pension plan wherein the pensionis payable after aspecified period' Thou!h primarily

a pension product, the plan has many attractiefeaturesand options which make it an ideal retirementsolution for the future'

Pro;t P!&"

Fort&ne P!&"

Money P!&".3ULIPSOF RELIANCE LIFE INSURANCEThe plan allows you to e>perience the joys of life and proidefor your family@s needs'


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data is collected throu!h the primary source, whichinclude questionnairespe rsonalinteriew and telephonic interiew' )econdary data

has been collected frominternet web pa!e, ma!aFines,insurance related books, journals newspapers etc'


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Other Soft8are U"e2 For Ana!y=in5 theDataMicrosoft Eord , Microsoft 6>cel for showin! the !raphs and

pie charts for the purpose of analyFin! the data'Chapter >DATA PRESENTATION? ANALYSISANDINTERPRETATIONcomparative analysis of ULIPs of ICICIPrudentialUNITLIN7 PRODUCTS

>@a Ta%!e "ho8in5 the Unit Lin6 Pro2&'t" ofICICI Pr&2entia! Life In"&ran'e an2itB"'o#pari"on 8ith it" 'o#petitor".

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Documents

A.gayathridevi 11 a Study on Financial Performance Using Ratio Analysis at Emami Ltd