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A
SUMMER TRAINING PROJECT REPORT
Analysis the Financial Performance through
Ratio Analysis
TO BE SUBMITTED TO SUBMITTED TO DR. APJ ABDULKALAM TECHNICAL UNIVERSITY, LUCKNOW
IN THE PARTIAL FULFILLMENT OF THE REQUIREMENTFOR THE DEGREE
OF
MASTER OF BUSINESS ADMINISTRATIONBatch 2014-16
External Supervision of : Internal Supervision of :Mr. Hariom Gautam
(Accountant, Bajaj Allianz Dairy)
Mr. TUSHAR KUMAR(Facult! MBA D"#tt.$
MOHSIN KHANMBA-III SEM
ROLL NO.1431170026
DE%AN &S. INSTITUTE OF EN'INEERIN'
TE)HNO*O'+M""rut! B-#a,, Ra! /arta#ur! M""rut.
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STUDENT DECLARATION
I am MOSHIN KHAN student MBA- III SM !ere "y declared t!at t!e
researc! re#ort entitled ANALYSS !H" FNAN#AL
P"RF$RMAN#" !HR$%GH RA!$ ANALYSS& is com#leted and
su"mitted under t!e $uidance o% Mr. !ushar 'umar Faculty of
Management( )*S!( Meerut is my ori$inal &or'
!e im#erial %indin$ in t!is re#ort is "ased on t!e data collected "y me I
!a*e not su"mitted t!is Summer rainin$ re#ort to su"mitted to )R. AP+
A,)%L 'ALAM !"#HN#AL %N*"RS!Y( L%#'N$-or not any
ot!er +ni*ersity %or t!e #ur#ose o% com#liance o% any reuirement o% any
eamination or de$ree
M$HSN 'HAN
M,A S"M
R$LL N$./01//23345
./A01
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A#'N$-L")G"M"N!
Be!ind e*ery study t!eir stands a myriad o% #eo#le &!ose !el# and
contri"ution ma'e it success%ul Since suc! a list &ill "e a
#ro!i"iti*ely lon$, I may "e ecused %or im#ortant omissions
!e $uidance, !el# and co-o#eration o% my su#er*isor
Mr. Hariom Gautam(Accountant, Bajaj Allianz Dairy), is $rate%ully
ac'no&led$ed &it! #ro%ound $ratitude
I !a*e "een "ene%ited %rom discussion &it! Mr. !ushar 'umar
Faculty of Management( )*S!( Meerut I am also t!an'%ul to all
ot!ers in 2inance De#artment, Bajaj Allianz, &!o #ro*ided me &it!
all t!e reuired in%ormation %or my #roject
M$HSN 'HAN
M,A S"M
R$LL N$./01//23345
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PR"FA#"
!is #roject !as "een underta'en in t!e #artial %ul%illment o% our summer
trainin$ reuirement durin$ t!e #ursuance o% M,A 6finance7 %rom
)"-AN *S. NS!!%!" $F "NGN""RNG 8 !"#HN$L$GY
.ractical trainin$ is an essential #art o% e*ery #ro%essional #ro$ram It is *ery
!el#%ul in #ro*in$ 'no&led$e %or t!e #ractical as#ects o% academic studies It
is also !el#%ul to $o t!rou$! t!e actual #rocedures at t!e &or' #lace
In t!e #roject, title Analysis the Financial Performance through Ratio
Analysis&( t!e area co*ered includes tools and tec!niues %or analysis and
inter#retation o% %inancial statements li'e common size statements,
com#arati*e analysis and ratio analysis
It !as "een my endea*or to "rin$ out t!e #rocedure re$ardin$ e%%icient
collection o% in%ormation, its #resentation and also t!e decision ma'in$
#rocess arisin$ t!ey3re %rom
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#$N!"N!S
4uidelines %or ta"les and $ra#!s 5
Introduction 6-7 0om#any #ro%ile 89-:;
ools o% analysis :
?esearc! met!odolo$y 7>-7=
Data analysis 7;-8877;-887 /imitation 8:9
Su$$estion 8:8
0onclusion 8::
Bi"lio$ra#!y 8:>
G%)"LN"S F$R !A,L" AN) GRAPHS
/. 2ocused 4rou# Net&or's
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4. Data Analysis
(i) 0urrent ?atio
(ii) @uic' ?atio
(iii) or'in$ 0a#ital ?atio
(i*) otal 0a#ital urno*er
(*) or'in$ 0a#ital urno*er
(*i) 2ied Assets urno*er
(*ii) De"tors urno*er
(*iii) 4ross .ro%it ?atio
(i) 0reditors urno*er
() Net .ro%it ?atio
(i) /a"our 0ost ?atio
(ii) Administration #enses ?atio
(iii) 2actory #enses ?atio
(i*) O#eratin$ ?atio
(*) Sellin$ Distri"utin$ ?atio
(*i) ?eturn In*estment
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N!R$)%#!$N
As my #roject in Bajaj Allianz, I &or'ed on t!e analysis o% t!e %inancial
#osition o% t!e com#any 2or t!is t!e main tool, &!ic! is used, is ?atio
Analysis 2inancial analysis is t!e #rocess o% identi%yin$ t!e %inancial
stren$t!s and &ea'nesses o% t!e %irm "y #ro#erly esta"lis!in$ relations!i#
"et&een t!e items o% t!e "alance s!eet and #ro%it and loss account
C!e science o% %inancial analysis Says Na*in 0!andra Eos!i Cis
assumin$ art increasin$ly im#ortant role %or a##raisin$ t!e real &ort! o% a
$oin$ concern
An analysis o% se*eral %inancial tools #ro*ides all-im#ortant "asis %or
*aluin$ securities and a##raisin$ mana$erial #ro$rams 2inancial analysis
is a *ital a##aratus %or t!e inter#retation o% %inancial statement
2inancial statements o% a com#any include radin$ and .ro%it and /oss
account, #ro%it and /oss A##ro#riation and Balance s!eet
!ese statements may "e %ruit%ully used i% t!ey (statements) are analyzed
and inter#reted to !a*e an insi$!t into t!e stren$t!s and &ea'ness o% t!e
%irm
%!L!Y $F FNAN#AL ANALYSS9
2inancial analysis see's to s#otli$!t t!e si$ni%icant %acts and relations!i#s
concernin$ mana$erial #er%ormance, cor#orate e%%iciency, %inancial
stren$t!s and &ea'ness and credit &ort!iness o% t!e com#any
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2inancial analysis can "e underta'en "y mana$ement o% t!e %irm, or "y
#arties outside t!e %irm, *iz o&ners, creditors, in*estors and ot!ers to %orm
%irm In ot!er &ord it can "e said t!at %inancial statements are o% muc!
interest to a num"er o% di%%erent $rou#s li'e1
/. $-N"RS
O&ners can e*aluate t!e e%%iciency o% t!e %irm to 'no& a"out !o& e%%icient
"usiness is $oin$ on And 'no&in$ t!e liuidity and %inancial #osition o%
t!e %irm
4. SHAR"H$L)"RS
S!are!olders can e*aluate t!e e%%iciency o% t!e mana$ement and determine
&!et!er to "uy, sell or !old t!e s!ares
1. #R")!$RS
0reditors can %ind out t!e %inancial stren$t! and ca#acity o% a "orro&er, t!e
*alue o% a %loatin$ s!are on t!e assets !eld as security and t!e *alue o%
unuoted s!ares
= MANAG"M"N!
!e to# mana$ement can measure t!e success or ot!er&ise o% a
com#any3s o#erations, determine t!e relati*e e%%iciency o% *arious
de#artments, #rocesses and #roducts a##raise t!e indi*idual
#er%ormance and e*aluate t!e system o% internal control
:. LA,$%R %N$N
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!e la"or union assesses &!et!er t!e com#any #resently
a%%ords a &a$e increase
5. "#$N$MS!S
!e economists analyze t!e %inancial statement &it! a *ie& to
studyin$ t!e #re*ailin$ "usiness and economic condition
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#$MPANY
PR$FL"
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#$MPANY PR$FL"
Bajaj Allianz /i%e Insurance 0om#any /imited
Bajaj Allianz /i%e Insurance 0o /td is a joint *enture "et&een t&o leadin$
con$lomerates- , Bajaj Auto, one o% t!e "i$$est : and > &!eeler
manu%acturers in t!e &orld and Allianz A4, one o% t!e &orldFs lar$est
insurance com#anies
Bajaj Allianz /i%e Insurance
Is t!e %astest $ro&in$ #ri*ate li%e insurance com#any in India
0urrently !as o*er =,=9,999 satis%ied customers
e !a*e a #resence in more t!an ;;9 locations &it! ) on May :nd,
:998 to conduct 4eneral Insurance "usiness (includin$ Healt! Insurance
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"usiness) in India !e 0om#any !as an aut!orized and #aid u# ca#ital o% ?s
889 crores Bajaj Auto !olds 6=G and t!e remainin$ :99 0rores Bajaj Allianz also "ecame one o% t!e %e&
com#anies to ma'e a #ro%it in its %irst %ull year o% o#erations Bajaj Allianz
made a #ro%it a%ter ta o% ?s7< crores
Bajaj Allianz today !as a net&or' o% =: o%%ices s#read across t!e len$t! and
"readt! o% t!e country 2rom Surat to Sili$uri and Eammu to
!iru*anant!a#uram, all t!e o%%ices are interconnected &it! t!e Head O%%ice
at Pune.
In t!e %irst !al% o% t!e current %inancial year, :99=-9;, Bajaj Allianz $arnered
a #remium income o% ?s =9; crores, ac!ie*in$ a $ro&t! o% 5=G and
re$istered a ;:G $ro&t! in Net #ro%its o% ?s:9 0rores o*er t!e last year %or
t!e same #eriod In t!e %inancial year :99>-9=, t!e #remium earned &as
?s=59 0rores, &!ic! is a jum# o%
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o "e t!e #re%erred em#loyer %or sta%% in t!e insurance industry
o "e t!e num"er one insurer %or creatin$ s!are!older *alue
Mission
As a res#onsi"le, customer %ocused mar'et leader, &e &ill stri*e to
understand t!e insurance needs o% t!e consumers and translate it into
a%%orda"le #roducts t!at deli*er *alue %or money
Allian; Grou5 0r in :99:-9>
It !as joined !ands &it! Allianz to #ro*ide t!e Indian consumers &it! a
distinct o#tion in terms o% li%e insurance #roducts
As a #romoter o% Bajaj Allianz /i%e Insurance 0o /td, Bajaj Auto !as
t!e %ollo&in$ to o%%er -
2inancial stren$t! and sta"ility to su##ort t!e Insurance Business
A stron$ "rand-euity
A $ood mar'et re#utation as a &orld class or$anization
An etensi*e distri"ution net&or'
Adeuate e#erience o% runnin$ a lar$e or$anization
Bajaj Allianz /i%e Insurance 0om#any !as de*elo#ed insurance solutions
t!at cater to e*ery se$ment and a$e-income #ro%iles 2or com#anies it
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#ro*ides com#re!ensi*e Fm#loyee Bene%it SolutionsF (4rou# erm /i%e,
D/I, 4ratuity, Su#erannuation, Keyman Insurance and more) %or t!e
indi*idual In*est 4ain (a uniue li%e insurance #lan &!ere sustenance o%
income is com"ined in t!e same #lan t!at also #ays a lum# sum), 0as! 4ain
(Money Bac'), 0!ild 4ain (0!ildrenFs #lan), ?is' 0are (.ure erm),
/i%etime 0are (&!ole li%e), erm 0are (term &it! return o% #remium),
S&arna Lis!ranti (?etirement .lan), .rotector (Mort$a$e term insurance
#lan), +nit 4ain (+nit /in'ed .lan), +nit 4ain Sin$le .remium, +nit 4ain
.lus, +nit 4ain .lus S., /i%elon$ 4ain .lan, +nit 4ain Sin$le .ension
+nit 4ain asy .ension .lans
/I0 loses $ri# on mar'et, s!are do&n to 68G
!e state-o&ned li%e insurance "e!emot! /i%e Insurance 0or#oration
(/I0) des#ite !a*in$ a record "rea'in$ #er%ormance in :99;-9< !as lost
o*er se*en #er cent o% its mar'et s!are in :99;-97 cr in t!e ne&
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"usiness !e com#any !as $ro&n "y :8< G %or t!e 2 9;- 9
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crore &!ile SBI /i%e !as $ro&n "y ?s 5:5 crore durin$ t!e year A*i*a
/i%e !as increased its #remium "y ?s =96 crore &!ile Birla Sunli%e !as
$ro&n its #remium "y ?s Allian; )ifference
Business strate$y ali$ned to clientsF needs and trends in Indian and $lo"al
economy industry
Internationally e#erienced core team, majority &it! local "ac'$round
2ast, decentralized decision ma'in$
/on$-term commitment to mar'et and clients
rust
At Bajaj Allianz, &e realize t!at you see' an insurer &!om you can trust Bajaj
Auto /imited is trusted name %or o*er ;; years in t!e Indian mar'et and Allianz
A4 !as o*er 889 years o% $lo"al e#erience in %inancial ser*ices
+nder&ritin$ .!iloso#!y
Our under&ritin$ #!iloso#!y %ocuses on 1
+nderstandin$ t!e customerFs needs
+nder&ritin$ &!at &e understand
Meetin$ t!e customerFs reuirements
nsurin$ o#timal co*era$e at lo&est cost
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#laims Philoso
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o%%ices and intermediaries
+sin$ t!e e", #olicies can "e issued %rom any o%%ice across t!e country %or retail
#roducts
+niue, user %riendly so%t&are de*elo#ed to ma'e t!e #rocess o% issue o% #olicies
and claims settlement sim#ler (e$ online insurance o% marine #olicy certi%icate)
+niue 2orms o% ?is' 0o*er
S#ecial .A co*er %or Amarant! atris
2ilm insurance
*ent mana$ement co*er
S#orts ntertainment Insurance .ac'a$e
Ris? Management $ur "@
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2ocused $rou# net&or'
21
Bajaj Allianz Life Insurance
Agency ChannelBancassurance
r!u" an# Al$erna$e Channel
Branches
%a$elli$e %a$elli$e
%a$elli$e
%$an#ar# Char$ere#Ban&
%yn#ica$e Ban&
Cen$uri!n Ban&
C!s'!s Ban&
(an&alyan %aha&ari Ban&
(ija'a$a %aha&ariC!)!" Ban&
r!u" *'"l!yeeBenefi$
C!r"!ra$e Agency
+ranchisee
Br!&ers
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Allian; Grou< Gloal ,anc assurance "@
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!$$LS $F ANALYSS
radin$ and #ro%it and loss account, "alance s!eet and *arious sc!edules
#re#ared at t!e end o% t!e year do not al&ays con*ey to t!e reader t!e real
si$ni%icance o% o#eratin$ results %inancial !ealt! o% t!e "usiness And
rarely can satis%actory dia$nosis "e reac!ed on t!e "asis o% suc!
in%ormation alone
!e analysis o% t!e %acts and related data &as considered to "e im#ortant
and a num"er o% tec!niues &ere de*elo#ed and t!e most im#ortant
tec!niues are $i*en "elo&1
I7 RA!$ ANALYSS9
An analysiso% %inancialstatements on t!e "asis o% ratio is 'no&n as ratio
analysis A ratio is a mat!ematical relations!i# "et&een t&o or more
related items ta'en %rom %inancial statements ?atio analysis is *ery
!el#%ul to outsiders as &ell as to t!e mana$ement
II) F%N)S FL$- ANALYSS9
2und 2lo& statement is a statement, &!ic! de#icts t!e source %rom &!ic!
%unds are o"tained and tile, uses %or &!ic! t!ey are "ein$ #ut !is
statement is al&ays accom#anied "y a sc!edule o% &or'in$ ca#ital
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c!an$es !is statement as tool o% %inancial analysis #ro*ides o%
e#lanations re$ardin$ t!e %inancial condition o% t!e "usiness concern
III) #ASH FL$- ANALYSS9
!is analysis "ased on a statement de#ictin$ in%lo& and out %lo& o% cas!
0as! %lo& statement is dei$ned to !i$!li$!t u#on t!e causes, &!ic! "rin$
c!an$es in cas! #osition "et&een "alance s!eet dates A "usiness unit
s!ould al&ays try to 'ee# su%%icient cas!, neit!er more nor less
*. #$MPARA!*" S!A!"M"N!9
!ese statement are t!ose &!ic! summaries and #resent related accountin$
data %or a num"er o% years incor#oratin$ t!erein t!e c!an$es in indi*idual
items o% %inancial statements 0om#arati*e statements can "e #re#ared %or
income statement &ell as #osition statement or "alance s!eet
L !R"N) ANALYSS9
rend analysis is carried out "y calculatin$ trend ratio (#ercenta$es) and
or "y #lottin$ t!e accountin$ data on t!e $ra#! #a#er or c!art rend
analysis o% "usiness %acts is *ery si$ni%icant %rom t!e #oint o% *ie& o%
%orecastin$ or "ud$etin$ It discloses t!e c!an$es in t!e %inancial and
o#eratin$ data "et&een s#eci%ic #eriods
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RA!$ ANALYSS
An analysis o% t!e %inancial statements &it! t!e !el# o% ratio may "e
termed as C?atio Analysis It in*ol*es t!e #rocess o% com#utin$,
determine and #resentin$ t!e relations!i# o% items o% %inancial
statements and com#arison and inter#retation o% t!ese ratios and uses
t!em %or %uture #rojections
M"ANNG $F RA!$9
A ratio is a mat!ematical relation s!i# "et&een t&o related items
e#ressed in uantitati*e %irm !is uantitati*e relations!i# may "e
e#ressed in eit!er o% t!e %ollo&in$ &ays1
a) In #ro#ortion1 In t!is %orm t!e amounts i% t&o items are "ein$
e#ressed in a common denomination
") In rate or times or co-e%%icient1 &!en ratio is e#ressed in t!is
c) 2orm, it is called as turn o*er and is &ritten in times
d) In #ercenta$e1 a s#ecial ty#e o% rate, &!ic! e#ressed t!e relation
in !undredt!
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$,+"#!*"9
!e o"jecti*e o% ratio analysis is to !el# mana$ement in analyzin$
and inter#retin$ t!e %inancial statement, to $et adeuate in%ormation
use%ul %or t!e #er%ormance o% *arious %unction li'e #lannin$
coordination, control, communication and %orecastin$ etc Some
$eneral utility o% ratio analysis is $i*en "elo&1
a) rends in cost, sales, #ro%it and ot!er %acts are related "y t!e #ast
ratios and t!e %uture e*ents can "e %orecasted on t!e "asis o% suc!
trends
") Ideal ratios may "e constructed and t!e relation %ound "et&een
strate$ic ratios may "e used %or ac!ie*in$ Qdesired coordination3
c) ?atios may "e used as instrument o% mana$ement control
#articularly in t!e areas o% sales and costs
d) ?atios are also %acilitatin$ t!e %unction o% communication
e) ?atios also may "e used as a measure o% e%%iciency
%) It !el#s to ma'e #ro%ita"le in*estments
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N"")S F$R RA!$ ANALYSS9
!e need or si$ni%icance o% ratio analysis arises due to t!e %ollo&in$
%acts1
a) Business %acts s!o&n in %inancial statement do carry any
im#ortance indi*idually !eir im#ortance lies in t!e %act t!at
t!ey are interrelated and any correct or accurate conclusion is to
"e dra&n "y t!eir uses
") ?atio analysis as a tool %or t!eir inter#retation o% %inancial
statements is also si$ni%icant "ecause ratios !el# t!e analysis to
!a*e a dee# #ee# into t!e data $i*en in statements ?atios #ro*ide
#o&er to s#ea'
!e uses o% ratio analysis !a*e increased considera"ly It is no&
"ein$ used as a de*ice to dia$nose t!e %inancial !ealt! o% a concern
?atio analysis may !i$!li$!t u#on t!e %e& #!ases o% t!e "usiness
o#eration in &!ic! t!e outsiders are most interested In %inancial
analysis, a ratio is used as a "enc!mar' %or e*aluatin$ t!e %inancial
#osition and #er%ormance o% t!e %irm
!us ratio analysis is a #o&er%ul tool %or "ot! eternal and internal
analysis
S!AG"S F$R RA!$ ANALYSS9
!e %ollo&in$ #rocedure is $enerally %ollo&ed, &!ile analyzin$ t!e
%inancial statements t!rou$! ratio analysis1
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S. I1 Selection o% t!e rele*ant data %rom t!e %inancial statements
de#endin$ u#on t!e o"jecti*e o% t!e analysis
S. II1 0alculation o% a##ro#riate ratios %rom t!e a"o*e data
S. III1 0om#arison o% t!e calculated ratio &it! t!e ratios o% t!e
same %rom in t!e #ast, or t!e ratios de*elo#ed %rom #rojected
%inancial statements or t!e ?atio3s o% some ot!er, %irm or t!e
com#arison &it! t!e ratio o% t!e industry to &!ic! t!e %irm "elon$s
S. IL1 Inter#retation o% ratios
a) Balance s!eet ratio1 ie, ratios calculated on t!e "asis o% tile
%i$ures o% t!e "alance s!eet only
") .ro%it and loss account ratios1 ie, ratios calculated on t!e "asis o%
t!e %i$ures o% #ro%it and loss account only
c) 0om"ined ratio1 ie, ratios "ased on %i$ure o% #ro%it and loss
account as &ell as "alance s!eet
S!AN)AR) $F #$MPARS$N9
!e ratio in*ol*ed com#arison %or a use%ul inter#retation o% t!e
%inancial statements A sin$le ratio in itsel% does not indicate
%a*ora"le or un%a*ora"le condition It s!ould "e com#ared &it!
some standard Standards o% com#arison ma consists o%1
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a) .ast ratios, ie, ratios calculated %rom t!e #ast %inancial statement
o% t!e same %irm
") 0om#etitors ratios, ie, ratios o% some selected %irms, es#ecially
t!e most #ro$ressi*e and success%ul com#etitor , at t!e same
#oint in time
c) Industry ratios , ie, ratio o% t!e industry to &!ic! t!e %irm
"elon$s
And
d) .rojected ratios, ie, ratios de*elo#ed usin$ t!e #rojected, or
.er%orma, %inancial statements o% t!e same %irm
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A)*AN!AG"S $F RA!$ ANALYSS
a) !e detailed ideas o% !e &or'in$ o% a concern are %ound out
") !e e%%iciency o% a concern "ecomes e*ident &!en analysis is
"ased on accountin$ ratios
c) 0om#arison can "e made on t!e "asis o% t!e ratio o*er a num"er
o% years to measure #ro%ita"ility
d) Accountin$ ratios re*eal t!e %inancial #osition o% a com#any t!at
in turn ma'e lendin$ and in*estment decision easier
e) I% t!e accountin$ ratios are #re#ared %or a num"er o% years, t!en a
trend is esta"lis!ed &!ic! !el#s in #re#aration o% #lans %or t!e %uture
%) ea'ness in %inancial structure on account o% incorrect #olicies in
t!e #ast or #resent is re*ealed t!rou$! t!ese accountin$ ratios
$) 0om#arison can also "e made "et&een one de#artment o% a %irm
and anot!er de#artment o% t!e same %irm to %ind out t!e #er%ormance
o t!e *arious de#artments in t!e %irm
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LM!A!$NS $F RA!$ ANALYSS9
a) False results9
?atios are "ased u#on t!e %inancial statements In case %inancial
statements are com"ined or t!e data u#on &!ic! t!e ratios are
"ased is in com"ined, ratios calculated &ill "e also "e %alse and
de%ecti*e
") LimiteB #om
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*ery %irm !as to &or' in di%%erent situations and circumstances1
so a #articular ratio can "e not "een su##osed to "e standard %or
e*ery one
g7 Ratios may e Eor?eB out for insignificant anB unrelateB
figures9
Accountin$ ratios may "e &or'ed out %or any t&o %i$ures e*en i%
t!ey are not si$ni%icantly related
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#AR" N %S" $F RA!$S9
?atio analysis is use%ul %or %inancial analysis "ut to $et "etter result
ratio analysis is reuired to done &it! care as se*eral %actors a%%ect
t!e e%%iciency o% ratios !ese %actors are discussed "elo&1
a) y#e o% "usiness under consideration a%%ects t!e ratios and
conclusions dra&n %rom t!em
") Seasonal c!aracter o% t!e "usiness a%%ects t!e ratio %or a #articular
ty#e o% industry or "usiness enter#rise
c) @uality o% assets also a%%ects t!e ratio analysis and $i*es di%%erent
inter#retation to di%%erent "usiness enter#rises
d) Adeuacy o% data is anot!er considers ratio %or com#arison o%
#articular %actors &it! eac! ot!er
e) Modi%ication o% ratios re%lects only t!e #ast #er%ormance and
must "e modi%ied "y %uture trends o% "usiness
%) Inter#retation o% ratios s!ould not "e relied u#on in isolated and
s!ould "e considered &it! accountin$ document %or
inter#retation
$) Non %inancial data ratios "ased on %inancial data o% %irm s!ould
"e considered &it! non- %inancial data to su##lement t!e
%inancial ratios and $i*e "etter inter#retation
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!YP"S $F RA!$S
?atio can "e classi%ied %or t!e #ur#ose o% e#osition into %our "road
$rou#s1
LiuiBity ratio
LeCerage ratio
Profitaility ratio
ActiCity ratio
LD%)!YRA!$9
/iuidity ratio s measures t!e s!ort term sol*ency or t!e s!ort
term %inancial soundness o% t!e "usiness It is etremely essential %or
a %irm to "e a"le to meet its o"li$ations t!ey "ecome due
/iuidity ?atio3s measure t!e ratio a"ility o% t!e %irm to meet !is
current o"li$ation, t!is ratio is also an e%%ecti*e source to ascertain
&!et!er t!e &or'in$ ca#ital !as "een e%%ecti*ely utilizes
/iuidity in t!e ratio means a"ility to re#ays loans In %act analysis o%
liuidity needs t!e #re#aration o% cas! "ud$et and cas! and %und
%lo& statements "ut /iuidity ratio "y esta"lis!in$ a relation s!i#
"et&een cas! and ot!er current assets to current o"li$ation, #ro*ide a
uic' measure o% liuidity
!e %ailure o% com#any to meet its o"li$ation, due to lac' su%%icient
liuidity, &ill result in "ad credit ima$e loss o% creditor3s
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con%idence, or e*en in la&suits resultin$ in t!e closure o% t!e
com#any
A *ery !i$! de$ree o% liuidity is also "ad Idle assets earn not!in$
!e %irm3s %unds &ill "e unnecessarily tied u# in current assets
!ere%ore, it is necessary to stri'e a #ro#er "alance "et&een liuidity
and lac' o% liuidity
!e ratios calculated %or ,a>a> allian; &!o indicates t!e etent o%
liuidity are1
#%RR"N! RA!$
D%#' RA!$
#ASH RA!$
N"! -$R'NG #AP!AL RA!$
L"*"RAG" RA!$S
A %irm s!ould !a*e a s!ort-term as &ell as lon$ term %inancial
#osition o jud$e t!e lon$ term %inancial le*era$e or ca#ital
structure In ot!er &ord, it can "e said t!at t!is %inancial ratio3s
t!rou$! li$!t on t!e lon$-term sol*ency o% a %irm as re%lected in its
a"ility to assure t!e lon$-term creditors &it! re$ard to1
(a) .eriodic #ayment o% interest durin$ t!e #eriod o% t!e loan
(") ?e#ayment o% #rinci#al on maturity
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As a $eneral rule t!ere s!ould "e an a##ro#riate mi o% de"t and
o&ner3s euity in %inancin$ t!e %irm3s assets, t!e manner in &!ic!
assets are %inanced !as t!e num"er o% im#lications
!e #rocess o% ma$ni%yin$ t!e s!are!older3s return t!rou$! t!e
em#loyment o% de"t is called C%inancial le*era$e or Ctradin$ on
euity
I% t!e cost o% de"t is !i$!er t!an t!e %irms o*erall rate o% return, t!e
earnin$ o% s!are!older3s &ill "e reduced an addition t!ere is a t!reat
o% insol*ency o% t!e %irm is actually liuidated %or non-#ayment o%
de"t !older3s dues t!e &orst su%%erers &ill "e s!are!olders t!e
residual o&ners
$,+"#!*"S $F LD%)!Y RA!$S9
Sol*ency re%er to t!e %inancial ca#a"ility o% t!e enter#rises in
!onorin$ t!eir lon$ term commitments (o"li$ations) t!ese ratios
ser*e our %ollo&in$ #ur#oses1
(a) Ascertainin$ ca#a"ility to !onor lon$ term o"li$ation, suc! as
re#ayment o% loan and interest t!ere on
(") nsurin$ lon$-term %inancial sta"ility o% t!e "usiness
(c) Measurin$ relations!i# "et&een internal and eternal euity
" (d) /e*era$e ratios may "e calculated to determine t!e #ro#ortion o%
de"t in total %inancin$
!ose calculated %or t!ese studies are1
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)",! "D%!Y RA!$
!$!AL )",! RA!$
N!"R"S! #$*"RAG" RA!$
F") ASS"!S RA!$
)",! !$ !$!AL F%N)S
R"S"R*" !$ #AP!AL RA!$
#AP!AL G"ARNG RA!$
PR$PR"!$RY RA!$
!%RN$*"R RA!$S9
urno*er means Csales , so turno*er ratio is related to sales It is an
acce#ted %act t!at sales !a*e direct relations!i# &it! t!e #er%ormance
o% t!e "usiness Hi$!er sales means "etter #er%ormance &!ic! really
means o% t!e "usiness 2und are in*ested in *arious assets in
"usiness to ma'e sales and to earn #ro%it t!e e%%iciency &it! &!ic!
assets are mana$ed directly e%%ects t!e *olume o% sales
!e "etter t!e mana$ement o% assets, t!e lar$er is t!e amount o%
sales and #ro%its
!is ratio indicates t!e s#eed &it! &!ic! assets are con*erted or
turned o*er into sales
De#endin$ u#on t!e #ur#ose, a num"er o% turno*er ratios can "e
calculated
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Acti*ity ratios in*ol*e a relations!i# "et&een sales and assets A
#ro#er "alance "et&een sales and assets $enerally re%lects t!at assets
are mana$ed &ell Se*eral acti*ity ratios can "e calculated to jud$e
t!e e%%ecti*eness o% assets utilization
!ose calculations %or t!is study are1
!$!AL #AP!AL !%RN$*"R RA!$
-$R'NG #AP!AL !%RN$*"R RA!$
F") ASS"!S !%RN$*"R RA!$
)",!$RIS !%RN$*"R RA!$
#R")!$RIS !%RN$*"R RA!$
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PR$F!A,L!Y RA!$S9
It is %act t!at su%%icient #ro%it must "e earned to sustain t!e o#erations
o% t!e "usiness to "e a"le to o"tain %unds %rom in*estor3s %or
e#ansion and $ro&t! and to contri"ute to&ards t!e social o*er!eads
%or t!e &el%are o% t!e society
.ro%it is t!e di%%erence "et&een re*enue and e#enses o*er a #eriod
o% times
.ro%it is t!e ultimate out#ut o% t!e com#any it &ill !a*e no, %uture i%
it %ails to ma'e su%%icient #ro%it
!ere%ore t!e #ro%it a"ility ratios are calculated to measure t!e
o#eratin$ e%%iciency o% t!e com#any
4enerally, t!e major ty#es o% #ro%ita"ility ratios are1
Profitaility in relation to sales
Profitaility in relation to inCestment
A com#any s!ould "e a"le to #roduce adeuate #ro%it on eac! ru#ee
o% sales !e #ro%ita"ility o% t!e com#any s!ould also "e e*aluated in
term o% %irm3s in*estment in assets and in term o% ca#ital contri"ution
" creditor3s and o&ners
I% t!e com#any #ro%it !as to "e eamined %rom t!e #oint o% *ie& o%
all in*estors He a##ro#riate measure o% #ro%it is o#eratin$ #ro%it
O#eratin$ #ro%it is eui*alent o% earnin$ "e%ore interest and ta
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!en t!e %irm does not !a*e non-o#eratin$ in com#any !is
measure o% #ro%it s!o&s earnin$ arisin$ directly %rom t!e
commercial o#eration o% t!e "usiness &it!out t!e e%%ect o% %inancin$
!ose calculations %or t!is study are1
GR$SS PR$F! RA!$
N"! PR$F! RA!$
"P"NS" RA!$9
/. S"LNG AN) )S!R,%!$N "P"NS"S RA!$
4. $FF#" "P"N"S RA!$
1. RA!$ $F MA!"RAL #$NS%M")
0. RA!$ $F )R"#! LA,$%R
:. RA!$ $F FA#!$RY "P"NS"S
$P"RA!NG "P"N"S RA!$
R"!%RN $N N*"S!M"N! RA!$
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LD%)!Y RA!$S
#%RR"N! RA!$9
0urrent ratio may "e de%ined as t!e relations!i# "et&een current
assets and current lia"ilities
!e ratio indicates t!e s!ort-term %inancial soundness o% t!e
com#any It jud$e &!et!er t!e current assets are su%%icient to meet
t!e current o"li$ation out o% t!e current assets
!is ratio 'no&n as &or'in$ ca#ital ratio, is a measure o% $eneral
liuidity and is most &idely used ma'e t!e analysis o% s!ort term
%inancial #osition or liuidity o% a %irm It is calculated "y di*idin$
t!e total o% current assets "y t!e total o% current lia"ilities
0urrent assets are t!ose assets, &!ic! are con*erted into cas! &it! in
one year, and current lia"ilities are t!ose lia"ilities, &!ic! are to "e
#aid &it!in a year
$>ectiCe anB significance9
!is ratio is an indicator o% t!e %irm3s a"ility to #rom#tly meet its
s!ort-term lia"ility It is used to assets t!e s!ort-term %inancial
#osition
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!is ratio is calculated as %ollo&1
#%RR"N! RA!$ J #%RR"N! ASS"!S
#%RR"N!LA,L!"S
-here(
Year 43/1 43/0 43/:
(lacs) (lacs) (lacs)
A7 #urrent assets9
nCentories 10K.K5 42:.1K 42./3
SunBry )etorIs 12.00 154.0 15.43
#ash in hanB anB
,an? /4./ K.54 /:5.02
AccrueB nterest 3.00 3.:0 3.05
Loans 8 ABCances 5:.1 :.3 5:.25
!otal 6A7 0/.14 25./4 KKK.
,7 #urrent Liailities9
SunBry #reBitorIs 442.31 40.53 1//.KK
$ther Liailities :4.KK 45.:5 1/./3
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Pro. for LeaCe
"ncashment 21.11 K0.45 1.00
!otal 6,7 1:1.40 153.04 015.04
!en t!e ?atio is9 2.66 2.21 2.03
Remar?s9
A relati*ely !i$! current ratio is an indication t!at t!e %irm is liuid and !as
t!e a"ility to
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#%RR"N! LA,L!"S
-here(
Year 43/1 43/0 43/:
(lacs) (lacs) (lacs)A7 #urrent assets9
nCentories 10K.K5 42:.1K 42./3
SunBry )etorIs 12.00 154.0 15.43
#ash in hanB anB
,an? /4./ K.54 /:5.02
AccrueB nterest 3.00 3.:0 3.05
Loans 8 ABCances 5:.1 :.3 5:.25
!otal 6A7 0/.14 25./4 KKK.
,7 #urrent Liailities9
SunBry #reBitorIs 442.31 40.53 1//.KK
$ther Liailities :4.KK 45.:5 1/./3
Pro. for LeaCe
"ncashment 21.11 K0.45 1.00
!otal 6,7 1:1.40 153.04 015.04
!en ratio is1 1.68 1.44 1.36
Remar?s9
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+sually !i$! uic' ratio is an indication t!at t!e %irm is liuid and !as t!e
a"ility to meet its current lia"ilities in time As a rule o% t!um" or as a
con*ention uic' ratio o% one to onei.e.( /9 /is considered satis%actory
#ASH RA!$9
Since cas! is t!e most liuid assets "e eamined cas! ratio and its eui*alent
to current lia"ilities
rade in*estment or mar'eta"le securities are eui*alent o% cas! t!ere%ore,
t!ey may "e included in t!e com#utation o% cas! ratio
#ASH RA!$ J #ASH MAR'"!A,L"
S"#%R!"S
#%RR"N! LA,L!"S
Year 43/1 43/0 43/:
6lacs7 6lacs7 6lacs7
N"! -$R'NG #AP!AL RA!$9
!e di%%erence "et&een current assets and lia"ilities is called Net or'in$
0a#ital ?atio
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Net or'in$ 0a#ital used as a measure o% a %irm3s liuidity It is considered
as t!at3 "et&een t&o %irm3s t!e one !a*in$ t!e lar$er Net or'in$ 0a#ital
!as t!e $reater a"ility to meet its current o"li$ation
Net or'in$ 0a#ital measures t!e %irm3s #otential reser*eror o% %unds It can
"e related to net assets or ca#ital em#loyed
N"! -$R'NG #AP!ALJ N"! -$R'NG#AP!AL
N"! ASS"!S
Net -or?ing #a
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Year 43/1 43/0 43/:
6lacs7 6lacs7 6lacs7
F") ASS"!S
6L"SS )"PR#A!$N7 //0.4: //:.:1 //1.31
A))9 N"! #%RR"N!
ASS"!S 6#A#L7 :KK.3K 01:.23 0:4.:2
234.11 ::/.41 :5:.53
!en t!e ratio is9 3.K3 3.2 3.K3
Remar?s9
Hi$!er t!e ratio !i$!er t!e liuidity
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!ale /7
LD%)!Y RA!$IS
A?
:98> :98= :98;
0+??N?AIO
:
@+I0K ?AIO
8< 9:6 9>G
!ic! indicate t!e "etter #er%ormance o% t!e com#any
So, o*er all #ro%ita"ility #osition o% t!e com#any is $ood ece#t t!e
increasin$ #ercenta$es in t!e o#eratin$ e#ense and e#enses ratio
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R"S"AR#H M"!H$)$L$GY
CMar'etin$ ?esearc! is a 'ey to e*aluation o% success%ul mar'etin$ strate$y
and #ro$rammes It is an im#ortant tool to study "uyer "e!a*ior, c!an$es in
consumer li%e style and consum#tion #atterns "rand loyalty and analysis t!e
com#etitors #roducts #ositionin$ M? is also use%ul to !el# create and
en!ance euity
R"S"AR#H $,+"#!*"
!at to researc!er &ant to ac!ie*e is o"jecti*e
O"jecti*es o% researc! are -
o analyze t!e %inancial #er%ormance t!rou$! ratio analysis
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R"S"AR#H )"SGN
A s#eci%ic %rame &or' used %or data collection o% scienti%ically< conducted
#roject is 'no&n researc! desi$n !ere are t!ree ty#es o% researc! desi$n
A #loratory
B Descri#ti*e
0 0ausati*e
P./O?AO? ?SA?0H 1
#loratory researc! is done to 'no& &!y !o& certain #!enomenon
occurs, !o& consumer e*aluate uality, tan$i"le %eatures, re#lacement #olicy
&arranty
DS0?I.IL ?SA?0H 1
Descri#ti*e researc! is carried out to descri"e a mar'et c!aracteristics #
o understand t!e consumer "uyer "e!a*ior
0A+SAIL 1
0ausati*e researc! is done to esta"lis! cause and e%%ect relations!i# #
!e in%luence o% income and li%e style on #urc!ase decision
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S$%R#"S $F )A!A
+sually, t!e in%ormation needed to sol*e t!e #ro"lem can not "e %ound in
internal o% #u"lis!ed eternal records !e researc! must "e de#end on
#rimary data !ic! are collected scienti%ically %or t!e study
)ata are mainly ty
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S"#$N)ARY )A!A
Secondary data means data t!at are already a*aila"le ie, t!ey re%er t!e data,
&!ic! !a*e already "een collected and analyzed "y someone else !en t!e
researc!er utilizes secondary data, t!en !e !as to loo' into *arious sources
%rom &!ere !e can o"tain t!em, IN t!is case !e is certainly not con%ronted
&it! t!e #ro"lems t!at are usually associated &it! t!e collection o% ori$inal
data Secondary data may eit!er "e #u"lis!ed data or un#u"lis!ed data
+sually #u"lis!ed data are a*aila"le in1
1 Larious #u"lications o% t!e central, state and local $o*ernments
2 Larious #u"lications o% %orei$n $o*ernment or o% international "odies and
t!eir su"sidiary or$anization
3 ec!nical and trade journals1
4 Boo's, ma$azines and ne&s#a#ers
?e#orts and #u"lications o% *arious associations connected &it! "usiness
and industry, "an's, stoc', ec!an$es etc
?e#orts #re#ared "y researc! sc!olars, uni*ersities, economists etc In
di%%erent %ields, and
.u"lic records and statistics, !istorical documents, and ot!er sources o%
#u"lis!ed in%ormation !e sources o% un#u"lis!ed data are many t!ey
May "e %ound in diaries, letters, un#u"lis!ed "io$ra#!ies and
auto"io$ra#!ies and also may "e a*aila"le &it! sc!olars and researc!
&or'ers, trade associations, la"or "ureaus and ot!er #u"lic#ri*ate
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indi*iduals and or$anizations
$,+"#!*"S
o assess t!e si$ni%icance o% t!e %inancial ratios By selectin$ a %e&
#arameters suc! as liuidity, turno*er and #ro%ita"ility
o ma'e t!e ratio as sim#le as %or t!e e*ery #art o% t!e as#ect and
%ind out t!ose %acts &!ic! are directly used
o study t!e %inancial #osition %or t!e BAEAE A//IANR,
.A?A.+?, M?+
4i*e su$$estion to&ards t!e com#any %actors to increase t!e
e%%iciency3s
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S-$! ANALYSS
S!R"NG!HS
Bi$$est sourcin$ "ase %or insurance and insurance #roducts in India
India3s "est-'no&n local Brand across all cate$ories
:6G mar'et s!are in t!e national Insurance mar'et
.resence o% a &ell-esta"lis!ed distri"ution and deli*ery net&or' %or
dairy #roducts
.enetration #ricin$ strate$y Bajaj allianz is t!e #rice &arrior in t!e
Insurance mar'et and currently !as a *ery &ide ran$e to o%%er %or all #rice
#oints
Normally consumers in India #re%er Dairy Insurance rat!er t!an
%rozen desserts and Bajaj allianz !as a &ide #ort%olio in t!e dairy Insurance
se$ment
Bajaj allianz3s main ri*al, !as 5G mar'et s!are, t!e second lar$est
s!are in t!e or$anized sector no& is tryin$ to etend it3s cold c!ain in many
cities and to&ns !ereas Bajaj allianz !as #resence in almost all to&ns
"ecause o% it3s already eistin$ "utter lines
0ustomer is most com%orta"le "uyin$ Insurance in t!e Lalue %or
Money se$ment and Bajaj allianz is &ell #resent in t!is se$ment
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Bajaj allianz !as "uilt u# a %ormida"le ima$e as a "rand in &!ic!
$enerations o% consumers !a*e #laced t!eir trust !is can "e used to its
ad*anta$e &!ile introduction o% Insurances
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-"A'N"SS
Bajaj allianz3s Ad*ertisin$ !as lo& #ro%ile Mot!er dairy and amul on
t!e ot!er !and is into !ea*y ad*ertisin$ and conseuently, is $oin$ to "e
#o#ular
A major entry "arrier &it! Bajaj allianz are t!eir some non %lei"le
#olicies I% "ajaj allianz ma'es t!eir #olicies "it %lei"le t!an t!is &ill "e
"ene%icial %or t!em
?etailers &ant a credi"le ?e#lacement #olicy o% t!e Insurance !ey
&ould "e &illin$ to ma'e %urt!er in*estments only %or t!at "rand &!ic!
o%%ers re#lacement %acilities Bajaj allianz !as no re#lacement #olicy
?etailers no& demand %reezers &it!out !a*in$ to #ay any de#osit
!is is es#ecially true o% t!ose retailers &!o already stoc' one or t!e ot!er
Insurance "rands But "ajaj allianz $i*es t!e dee# %reezer at lum# sum
amount
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$PP$R!%N!"S
Del!i mar'et is not restricted to mono#oly outlets !ere are a
si$ni%icant num"er o% retailers &!o are currently stoc'in$ more t!an t&o
"rands !is is in Bajaj allianz3s %a*our, as earlier it !ad to o*ercome t!is
#ro"lem in t!e Mum"ai mar'et
!ere is am#le sco#e in t!e lo& #riced se$ment as also in ot!er
cate$ories &!ere consumers #resently are dissatis%ied &it! t!e uantity "ein$
#ro*ided *is a *is t!e #rice "ein$ c!ar$ed
Bajaj allianz !as t!e o##ortunity to ca#ture t!e more e*ol*ed youn$
adults and c!ildren &!o are o#en to ne& #roducts #ro*ided t!ey meet t!eir
e#ectations
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!HR"A!S
Bajaj allianz mi$!t %ace t!reat %rom t!e local manu%acturers in t!e lo&
end o% t!e mar'et li'e in t!e meerut
Insurance #roduct di%%erentiation strate$y !as "een *ery &ell recei*ed
"y t!e consumers and Mot!er Dairy is also #us!in$ u# its ad*ertisin$ #itc!
Amul is also #lannin$ to dou"le t!e num"er o% #us! carts in Meerut
84
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)A!A ANALYSS
#%RR"N! RA!$
nference9
!e a"o*e dia$ram s!o&s t!at in t!e year :99
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nference9
!e a"o*e data s!o&s t!e uic' ratio o% t!e com#any in year
:99
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nference9
In t!e a"o*e data it s!o&s t!at t!e cas! ratio o% com#any is in :99< res#ect%ully It is "elo& t!e standard
and it is not $ood %or com#any
87
(ORKIN) CA*ITALRATIO
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nference9
In t!e a"o*e data it s!o&s t!at t!e or'in$ ca#ital ratio o% com#any
is in :99
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e &or'in$ ca#ital turno*er o%
com#any is in :99:
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e 2ied Assets turno*er o%
com#any is in :99
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e De"tors urno*er o% com#any is
in :99
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nterfaces9
In t!e a"o*e $ra#! it s!o&s t!at t!e 4ross .ro%it ratio o% com#any is
in :997G and 6:G res#ect%ully It s!o&s $ood
si$n, &!ic! is 6:G !is indicates t!e e%%iciency in stoc' control and an
adeuacy o% t!e sellin$ #rice
92
)ROSS *RO,IT RATIO
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e 4ross .ro%it ratio o% com#any is
in :99:9 and >
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e 4ross .ro%it ratio o% com#any is
in :99G, >G and ;G res#ect%ully It is t!e increasin$
in trend t!e o#eration e#enses, is in desired #arameters
94
NET *RO,IT RATIO
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e 4ross .ro%it ratio o% com#any is
in :99G, >G and ;G res#ect%ully It is t!e increasin$
in trend, &!ic! is not $ood %or t!e com#any %uture
95
LABOUR COST RATIO
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e administration e#enses ratio o%
com#any is in :99
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e 4ross .ro%it ratio o% com#any is
in :99
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e o#eratin$ e#enses ratio o%
com#any is in :99
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e sellin$ and distri"ution e#enses
o% com#any is in :99G res#ect%ully
It s!o&s t!e decreasin$ in trend, ratio indicates in under controlled
99
SELLIN) ANDDISTRIBUTION RATIO
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nferences9
In t!e a"o*e $ra#! it s!o&s t!at t!e ?eturn on in*estment o%
com#any is in :99
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%I'ITATIO(
!e study is limited to t!ree years only
.rice le*el c!an$es are not considered
ime is s!ort %or dee# researc!
Se#arate records o% t!e all units are not a*aila"le
No com#arison made &it! ot!er %irm3s ratio &!ile durin$ t!e study #eriod and
ma'in$ conclusion time
!e readjusted and re$rou# %i$ure sli$!tly a%%ects t!e ratio %i$ures
Study is limited &it! t!e one unit o% Bajaj allianz
!e data is used in t!e #roject !a*e "een ta'en %rom annual re#ort only Hence,
$rou#in$ and su" $rou#in$ and annuliasation o% data may sli$!tly a%%ect t!e results
101
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)*++,)TIO(
Alt!ou$! BAEAE A//IANR, .A?A.+?, M?+ !as satis%ied t!e ratios !e
%ollo&in$ are t!e su$$estion "ein$ made out "y me as o"ser*ed durin$ study o% t!e
#er%ormance t!rou$! ratio analysis1
0om#any s!ould increase its sales o% all t!e #roduction units &it! increase in t!e sales
o% t!e com#any t!at can "e a"le to increase its %inancial #osition
0om#any s!ould decrease t!e o#eratin$ e#enses to increase its o#eratin$ #ro%it
Maimize t!e #roduction ca#acity
Maintain t!e amount o% current sales le*el and try to increase it
Maimize t!e utilization o% %ied assets and &or'in$ ca#ital
All ot!er mana$ement, #ersonal and administrati*e su$$estion to "e incor#orated
o %ollo& t!e strict credit collection #olicy
?educe t!e current assets and uic' assets ratio to maintain t!e standard ratio
0as! ratio #er%ormance is #oor So ma'e #olicies to im#ro*e it
?eturn on in*estment is in satis%actory #osition and t!ey try to maintain it in %uture
ry to start t!ose com#anies, &!ic! are closed due to non-a*aila"ility o% %unds
ry to "est utilization o% t!e a*aila"le resources
ry to maintain t!e standard ratio in t!e %inancial ratios
102
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CO(C%*)IO(
I% t!ese ratios are #ro#erly %ollo&ed t!e ca#ital in*estment in t!e current assets is a"o*e
t!e standard ratio and t!e cas! #osition o% t!e com#any &ould su"stantially im#ro*e
!e urno*er ?atio $i*e $ood si$n o% t!e success "ut in t!e de"tor3s turno*er ratio
s!o&s t!at com#any #ro*ided more credit #eriod o% #ayment to its customer, &!ic! is
not "ene%icial %or it
!e .ro%ita"ility ?atio all indicates $ood si$n "ut increase in t!e o#eratin$ and %inancial
e#enses o% t!e com#any, &!ic! is not $ood si$n %or t!e com#any %uture
?eturn on In*estment ratio is satis%actory, it indicate t!e o*erall #er%ormance o% t!e
com#any is $ood and t!ey enjoy a $ood #osition o% #ro%ita"ility
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-I-%O+RA/Y
MKHAN AND .K EAIN 2INAN0IA/ MANA4MN
(ata Mc4ra&- Hill .u"lis!in$ 0om#any /imited, N D/HI)
/K NA?AN4 AND S. EAIN 2INAN0IA/ MANA4MN
(KA/ANI .+B/ISH?S,N D/HI),:999
0? Kot!ari, ?esearc! met!odlo$y
e" sites1
&&&Bajajallianzcom
&&&$oo$lecom
http://www.bajajallianz.com/http://www.google.com/http://www.bajajallianz.com/http://www.google.com/