Usha Martin Ltd,Ranchi

[Type the company name]

2 DECLARATION

We hereby declare that this project is entitled “ ANALYSIS OF FINANCIAL STATEMENTS” is an original piece of research work carried out by us.We state that no portion of this project report is published or submitted to any other organization. This study is the work of our own, for the fulfillment of our Summer Training Program. We hereby acknowledge that the information is genuine to the best of our knowledge.

3

Certificate of Guide

This is to certify that Avik Sarkar and Arunabha Sarkar students of USHA MARTIN ACADEMY, KOLKATA.They have successfully carried out their summer project titled, “ANALYSIS OF FINANCIAL STATEMENTS” at Usha Martin Ltd. Tatisilwai, Ranchi in the partial fulfillment of MBA course of University of PTU.Under my guidance and supervision.

Under the Finance Coordination Department of USHA MARTIN LIMITED.

During their association with the project We found them to be sincere, hardworking and loyal.

We wish them a successful professional career.

Mr. Rajeev Singh FINANCE DEPARTMENT

4

ACKNOWLEDGEMENT

There are times when one feels a sense of accomplishment combined with a sense of gratitude. Writing the acknowledgement page in this project is one among them. This project would have been a distant dream without the grace of almighty. So, first and foremost, we, profusely thank god for his blessings and grace, without which my project would not have seen the light of the day.

We would like thank HRD Manager, Mr. Arvind Kumar who provided us a golden chance for training and our especial thanks to Mr. Rajeev Singh for his guidance and appreciative support in spite of busy schedule at Usha Martin Limited.

We wish to express our sincere thanks to our Prof. Partho Sarathi Roy for providing us valuable guidance and inputes which helped us to complete this project in true sense.

We also extend to all the staff of finance department of Usha Martin Ltd. for their support, which helped us a lot in completing the project.

5

PREFACE

Summer Training is essential to get the practical orientation of theoretical knowledge and analysis of the business realities at the corporate level. This 8 weeks training procedure made us understand the working culture of the business organization.

The summer training in this reputed Company had been a challenging and exciting experience which brought us closer to the business organization.

Our Project topic is “ ANALYSIS OF FINANCIAL STATEMENTS” (Wire Ropes and Speciality Product Division) in Finance department of USHA MARTIN LIMITED,TATISILWAI,RANCHI (JHARKHAND).

6

CONTENTS

EXECUTIVE SUMMARY 07

OBJECTIVE & SCOPE OF THE INTERNSHIP STUDY 08

COMPANY PROFILE 09

RESEARCH METHODOLOGY 14

THEORETICAL BACKGROUND 15

FINANCIAL OVERVIEW OF USHA MARTIN LTD. 24

DATA ANALYSIS & INTERPRETATION 27

COMPERATIVE BALANCE SHEET 50

COMPERATIVE INCOME STATEMENT 60

TREND ANALYSIS 70

FINDINGS 71

CONCLUSION 72

SUGGESTIONS 73

LIMITATIONS OF THE STUDY 74

BIBLIOGRAPHY 75

7

EXECUTIVE SUMMARY

This project named “ANALYSIS OF FINANCIAL STATEMENTS” was carried out at Usha Martin Ltd. to analyze and understand financial feasibility of the company in terms of liquidity, turnover, solvency, profitability etc. by using Ratio Analysis Technique.

We chose to do this project at Usha Martin Ltd because it is a leading manufacturer of steel wires, wire ropes and other related product.The company formed in India in the early 1960s with the establishment of Usha Martin Industries Ltd.

The Ratio Analysis Technique is the process of identifying the financial strength and weakness of the firm by properly establishing relationship between the items of the balance sheet and the profit & loss account because the figures recorded in the financial statements are absolutely incapable of revealing the soundness or otherwise of a company’s financial position or performance.Thus the technique of Ratio Analysis has been used which is supposed to be powerful tool for financial statements.

In Ratio Analysis Technique a ratio is used as a benchmark for evaluating the financial position and the performance of the firm.

8

Objective of internship study

The internship study conducted at UML was a small effort to have the much needed corporate exposure and to know the real applications of management principles.

The following are the main objectives of the internship study:

To gain firsthand experience from the industry To integrate theoretical concepts with practical experience To make assessment of the organization in the industry To do a microscopic study in the finance department To analyze the firm’s financial position To make comparative study of financial statements of different years To find out the reasons for unsatisfactory results

Scope of the internship study

This study confines itself to the analysis of Usha Martin Ltd. On the basis of comparative, common size and ratio analysis and the analysis covered a period of six years from 2005-06 to 2010-2011.

The data used in this analysis has been obtained from the annual reports i.e., Balance sheets and profit & loss Account.

9

COMPANY PROFILE

BACKGROUND AND INCEPTION OF THE COMPANY

Usha Martin Limited was started in 1961 in Ranchi (Jharkhand) as a wire rope manufacturing company. Today the Usha Martin Group is a Rs.3000 core conglomerate with a global presence. The products are, wire rods, bright bars, steel wires, specialty wires, wire ropes, strand, conveyor cord, wire drawing and cable machinery.

Incorporated in 1960 Mr. B.K. Jhawar, the present chairman, pioneered it. It was promoted to manufacture steel and wires ropes in a collaboration with Martin Black of Scotland as a joint Indo-British venture. From 1st October 1997, this company has been merged with Usha Beltron Ltd which has been renamed as wire and wire ropes division, within which six companies are included.

Board of directorChairman Mr. Prashant JhawarDirector Mr.Brij K JhawarDirector Mr. N. J. JhaveriDirector Mr. U.V. RaoDirector Mr. A. K. ChaudhuriDirector Mr. Suresh NeotiaDirector Mr. Ashok BasuDirector Mr. Salil SinghalManaging Director Mr. Rajeev JhawarJt. Managing Director Dr. P. Bhattacharya

10 NATURE OF THE BUSINESS CARRIED

The business carried on by Usha Martin Company is oligopolistic in nature as there are few producers of wire and wire rope and the price is not a major concern. The industry of wire rope manufacturing has few major players which compete with the limited number of competitors.

VISION, MISSION AND QUALITY POLICY

Vision:-

To be a respected, world class & leadership in business, in quality, productivity,

profitability & customer satisfaction.

Mission:-

To be a customer and share holder observed factory.

To enhance value to share holders and services to all stake holders.

To develop highly motive team with a sense of satisfaction.

To create the value in case of quality.

Quality policy:- Providing product & services that meet customer expectation .

Continual improvement to our quality management system and process.

Fostering the professional development of our employee.

Our suppliers and customers are our partner in progress.

11 product and service profile

Wire and Wire Rope Bright bar Telecom cable Conveyor cord

Competitor’s information

Tisco, Jamshedpur Musco, Mumbai Rinl, Vizag Facor, Nagpur

INFRASTRUCTURAL FACILITIES

Accommodation for employees at lower rates Officers and Workers association Medical, Fooding & Transportation facility etc. One guest house

FUTURE GROWTH AND PROSPECTUS

Realization of synergy gain with Usha Martin to ensure better market position

Strengthening of exports with an emphasis on consolidating Usha Martin presence in existing market while tapping new regions for export of value added products.

Cost control efforts including better logistics, higher operating efficiencies and improved working capital management.

12

Swot analysis of uml

Any organization will be having its own strengths and weakness due to various

internal factors, along with this it will have opportunities and threats that are the results of external environment and which are not in the hands of the organization.

13The following is the SWOT Analysis of UML.

STRENGTH:1.Satisfied and loyal customers2.Brand name3.Strong technology4.Research & development wing

WEAKNESS:1.High overheads and fixed cost2.Adverse age mix of workers and high average wage3.Being a private sector, emphasis is more on welfare measures rather than productivity

OPPORTUNITY:1.Growing in iron and steel market2.Cost advantage with the adoption of sophisticated technology

THREATS:1.Competition 2.Upgraded technology used by other manufacturer helps in supplying the rates which could it the market share

RESEARCH METHODOLOGY

Data Collection Methods

Sources of data can be classified into two types they are:-

Primary data

Secondary data

Primary data:

Primary data may be described as those data that has been observed by the

researchers for the first time. The primary data was obtained through personal

interaction with company officials during the internship period.

Secondary data:

14Secondary data are those data that have been complied already before

conducting the research. Secondary data may be internal data as well as external

data. Internal data are collected from the company’s records. External data are

collected from outside the company.

The various sources of secondary data are,

Annual reports and financial statements of the company like (balance

sheet and profit and loss account)

Company websites

Sampling Size

Sample size used in this project study relates to the financial figures, covering

the period from 2005-06 to 2010-11. Each data was already checked and

verified by the charted accountant; hence the data is straightaway taken for

analysis. The data is collected from the final account statements. Comparatively

covers the study purpose, no samples are required for the study as it is

concerned with the true financial data of the company.

Theoretical background

Analysis of Financial Statement:

Financial statements analysis is “A process of evaluating financial and

profitable position of an organization by comparing two or more homogeneous

figures and interpreting thereof”.

According to this definition, analysis of financial statement is a process by

which management will make an effort to draw conclusion on financial and

profit position of an organization. In order to do this process, one has to make

15comparison of homogeneous figures provides certain information with which

inference or conclusion can be drawn.

Objective of Analysis of Financial Statement:

To estimate the earning capacity and to decide the future prospective of

the firm

To determine the debt capacity of the firm and the long terms liquidity of

the funds as well as solvency

To gouge the financial position and financial performance of the firm

Basic of Financial Statements:

Balance Sheet

Income Statement

Cash Flow Statement

Tools or Methods of Financial Analysis:

Comparative financial statement analysis Common size financial statement analysis Comparative trend percentage Ratio analysis Fund flow analysis Cash flow analysis

Types of Financial Analysis:

16

Financial Analysis

On the basis of concerned parties On the basis of time period of study

I

Internal Analysis External Analysis Horizontal Analysis Vertical Analysis

17 Ratio analysis

A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years.

Advantages of ratio analysis:

It simplifies the comprehension of financial statements.Ratios tell the whole story of changes in the financial condition of the business.

It provides data for inter-firm comparison. It helps in planning and forecasting.Ratios can assist management, in its

basic functions of forecasting, planning, control and communication. Proper ratio analysis can give signal of corporate sickness in advance.

Limitations of Ratio analysis:

Ratios are generally computed from past financial statements and are not true indicators of the future.

Ratios are only meanse of financial analysis and not an end in itself.Ratios have to interpret and different people may interpret the same ratio in different way.

The ratios of other organization may not be readily available. Ratio analysis often gives misleading picture.

Interpretation of ratios:

Interpretation of ratios can be made in following ways

Intra firm comparison: Here the ratios of one organization may be compared with the ratios of the same organization for the various years either the previous years or the future years.

Iner firm comparison: The ratios of one organization may be compared with the ratios of other organization in the same industry and such comparison will be meaningful as the various organization, in the same industry may be facing similar kinds of financial problems.

The ratios of an organization may be compared with some standards, which may be supposed to be the thum-rule for the evaluation of the perpormance.

18Classification of ratios

Liquidity Ratio Leverage Ratio / Solvency Ratio Profitability Ratio Efficiency Ratio / Turnover Ratio

Liquidity Ratio:

Liquidity ratio measures the firms ability to meet itscurrentobligations i.e. ability to pay its obligations and when they become due. Commonly used ratios are:

Current Ratio:

Current ratio is the ratio, which express relationship between current asset and current liabilities. Current asset are those which can be convertedinto cash within a short period of time, normally not exceeding one year. Thecurrent

liabilities which are short- term maturing to be met. It is calculated by following formula-

Current Ratio = Current Assets / Current Liabilities

Acid Test Ratio / Quick Ratio:

The acid test ratio is a measure of liquidity esigned to overcome the Defect of current ratio. It is often referred to as quick ratio because it is a measurement of firm’s ability to convert its current assets quicklyinto cash in order to meet its current liabilities. It is calculated by following formula-

Acid Test Ratio= Liquid Assets / Current Liabilities

19Leverage or Solvency ratio:

Leverage or solvency ratios are the ratios, which indicate the relative interest of the owners and the creditors in an enterprise. These ratios indicate the funds provided by the long-term creditors and owners. To judge the long term financial position of the firm following ratios are applied.

Debt – Equity Ratio:

Debt-equity ratio which expresses the relationship between debt andequityThis ratio explains how far owned funds are sufficient to pay outside liabilities. It is calculated by following formula-

Debt- Equity Ratio= Debt / Equity OR Long Term Loans / Shareholder’s Fund

Total Assets to Debt Ratio:

This ratio is a variation of the debt-equity ratio and gives the same indication as the debt-equity ratio. In this ratio, total assets are expressed in relation to long term debts . It is calculated by following formula-

Total Assets to Debt Ratio= Total Assets/Debt or Long Term Loans

Proprietary Ratio:

This ratio indicates the proportion of total assets funded by owners or shareholders. It is calculated by following formula-

Proprietary Ratio= Equity(Shareholder’s Fund) / Total Assets

20Reserve to Capital Ratio:

This ratio indicates the relationship between reserves and capital. More reserve shows financial soundness of the firm, because it will be able to meet future losses, if any out of reserves. It is calculated by following formula-

Reserve to capital ratio = Reserve/Capital

Efficiency ratio or turnover ratio:

Debtors Turnover Ratio:

Ratio of net credit sales to average trade debtors is called debtors turnover ratio. It is also known as receivables turnover ratio. This ratio is expressed in times. It is calculated by following formula-

Debtors Turnover Ratio = Net credit sales/Average debtors

Average debtors = (opening debtor + closing debtor)/2

Working Capital Turnover Ratio:

This ratio measures the relationship between working capital sales. This ratio shows the number of times the working capital result in sales. It is calculated by following formula-

Working Capital = Current assets – Current Liabilities

Working Capital Turnover Ratio = Net Sales/ Working Capital

21Inventory Turnover Ratio or Stock Turnover Ratio:

Inventory turnover ratio or Stock turnover ratio indicates the velocity with which stock of finished goods is sold i.e. replaced. Generally it is expressed as number of times the average stock has been "turned over" or rotate of during the year. It is calculated by following formula-

Inventory Turnover ratio= Net Sales/Average Stock or Cost of Goods Sold/ Average Stock

Average Stock = Opening Stock + Closing Stock/2

Average Collection Period:

The average collection period ratio represents the average number of days for which a firm has to wait before its debtors are converted into cash. It is calculated by following formula-

Average collection period = (average debtors/credit sales)×365

Fixed Assets Turnover Ratio:

Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit earning capacity of the concern.Higher the ratio, greater is the intensive utilization of fixed assets. Lower ratio means under-utilization of fixed assets. It is calculated by following formula-

Fixed Assets Turnover Ratio=Cost of Goods or Net Sales/Net Fixed Assets

22Current Assets Turnover Ratio:

It indicates the capability of the organization to achieve maximum sales with the maximum investment in current assets. It indicates that the current assets are turned over the form of sales more number of times. It is calculated by following formula-

Current Assets Turnover Ratio= net sales/current assets

Payable Turnover Ratio/Creditors Turnover Ratio:

It is a ratio of net credit purchases to average trade creditors. Creditors turnover ratio is also known as payables turnover ratio. It is calculated by following formula-

Payable Turnover Ratio= Net Credit Annual Shift/ Average trade Creditors

Profitability Ratio:

Gross Profit Ratio:

This is the ratio of gross profit to net sales and is expressed if percentage. It is calculated by following formula-

Gross profit Ratio = (gross profit/net sales)*100

Net Profit Ratio:

This is the ratio of net profit to sales and is usually expressed in percentage. It is calculated by following formula-

Net profit ratio = Net profit/Net sales × 100

Operating Profit Ratio:

This is the ratio of operating profit to sales and is expressed in percentage. It is calculated by following formula-

Operating Profit Ratio= Operating Profit /Net Sale * 100

23Return On Investment(ROI):

Return on shareholder’s investment, popularly known as ROI or return on share holder/proprietors’ funds is the relationship between net profit(after interest & tax) and the proprietors ‘funds. It is calculated by following formula-

Return On Investment = Profit Before Tax & Interest/Shareholder’s Fund*100

Return on Equity Capital(ROE):

The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. It is calculated by following formula-

ROE= Net Profit After Tax, Interest & Preference Dividend/Equity Share Capital*100

Earning Per Share:

E.P.S is a small variation of return on equity capital and is calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares. It is calculated by following formula-

Earning Per Share= Net profit after tax preference dividend/no of share equity.

Dividend Per Share:

Net profit after taxes belongs to shareholders out of which dividend is declared. The dividend per share is the earnings distribution to equity shareholders dividend by the number of equity shares. It is calculated by following formula-

Dividend Per Share= dividend paid equity shareholders/number of equity share

24 FINANCIAL OVERVIEW OF USHA MARTIN LTD.

BALANCE SHEET

(Rs. in thousand)

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

SOURCES OF FUNDSShareholders’ FundsCapital 221,9

20240,0

45250,9

20250,9

20305,4

20305,4

20Equity Warrants

88,740

33,278

334,950

- - -

Reserves & Surplus

5,605,048

5,915,708

6,936,730

7,210,053

8,404,090

8,989,960

9,911,836

10,162,756

14,691,498

14,996,918

15,265,132

15,570,552

Loan FundsSecured Loans

6,717,748

7,441,398

8,670,608

14,661,503

- 8,401,184

- 16,092,062

Unsecured Loans

158,367

6,876,115

52,340

7,493,738

761,414

9,432,022

__________

14,661,503

- - - -

Net Deferred Tax Liability

1,335,064

1,434,331

1,467,708

1,221,053

1,691,017

2,148,748

14,126,887

16,138,122

19,889,690

26,045,312

25,089,119

33,811,362

APPLICATION OF FUNDSFixed AssetsGross Block

14,914,639

15,739,283

16,807,170

19,383,467

31,707,230

38,442,328

Less: Dep.

5,879,443

6,551,753

7,209,382

8,018,284

9,074,962

10,826,337

Impairment Loss

188,024

187,451

140,835

140,835

140,835

140,835

Net Block

8,847,172

9,000,079

9,456,953

11,224,348

22,491,433

27,475,156

Capital WIP

695,615

9,542,787

1,970,586

10,970,665

5,033,888

14,490,841

12,086,352

23,310,700

6,083,947

28,575,380

3,824,809

31,299,965

Investments

1,525,755

1,600,805

1,658,014

1,863,513

1,869,513

1,869,513

Currents Assets, Loans & Adv.

25Inventories

2,621,667

3,390,551

5,324,181

4,037,100

6,721,045

9,626,573

Sundry Debtors

1,982,492

2,269,104

2,563,505

3,228,548

1,764,942

2,834,779

Cash & Bank Balances

517,489

370,805

463,607

764,682

102,974

1,130,084

Other Current Assets

225,640

260,942

340,486

239,621

338,620

371,296

Loans & Advances

1,648,665

2,119,931

4,024,216

2,780,155

2,505,980

2,537,283

6,995,953

8,411,333

12,715,995

11,050,106

11,343,561

16,500,015

Less:Current Liabilities & Prov.Liabilities

3,769,487

4,612,543

8,609,576

9,812,920

16,257,550

15,445,859

Provisions

210,109

262,565

381,723

373,392

441,785

412,272

3,979,596

4,875,108

8,991,299

10,186,312

16,699,335

15,858,131

Net Current Assets

3,016,357

3,536,225

3,724,696

863,794

-5,355,

774

641,884

Miscellaneous ExpenditureDeferred Revenue Exp.

41,988

30,427

16,139

7,302 ___________

__________

14,126,887

16,138,122

19,889,690

26,045,312

25,089,119

33,811,362

26 PROFIT & LOSS ACCOUNT

(Rs. in thousand)

1-4-2005 to 31-3-2006

1-4-2006 to 31-3-2007

1-4-2007 to 31-3-2008

1-4-2008 to 31-3-2009

1-4-2009 to 31-3-2010

1-4-2010 to 31-3-2011

INCOMETurnover (Gross) 13,771,836 15,737,419 18,527,701 23,072,056 19,600,263 27,422,354Less: Excise Duty 1,453,958 1,651,372 1,968,714 1,799,803 1,096,408 2,155,334Turnover (Net) 12,317,878 14,086,047 16,558,987 21,272,253 18,503,855 25,267,020Other Income 94,846 143,261 156,401 135,315 201,639 272,785

12,412,724 14,229,308 16,715,388 21,407,568 18,705,494 25,539,805

EXPENDITUREPurchase Of General Merchandise

9,616 15,302 19,899 35,489 59,486 37,559

Raw Materials Consumed

5,250,697 5,816,061 7,478,097 9,336,337 8,204,052 10,681,517

(Increase)/Decrease in stock in trade

-155,097 -238,579 -295,476 -208,849 -809,038 -1,356,533

Manufacturing, Selling & Adm. Exp.

4,850,660 5,801,012 6,036,422 8,150,137 7,820,703 11,247,331

Depreciation 760,996 762,804 759,209 850,402 1,072,517 1,764,869Interest 730,603 713,016 803,752 1,233,483 1,130,336 1,742,339Adjustment for Items Capitalized &Departmental Orders for Own Consumption -42,136 -24,268 -93,642 -129,843 -164,597 -30,271

11,405,339 12,845,348 14,708,261 19,267,156 17,313,459 24,086,811

PROFIT BEFORE TAXATION

1,007,385 1,383,960 2,007,127 2,140,412 1,392,035 1,452,994

Provision for Taxation

- - - - 469,964 457,731

Current Tax 85,000 258,600 510,300 910,000 - -Fringe Benefit Tax 12,200 11,333 11,800 11,500 - -Deferred Tax 260,544 99,267 36,700 -246,655 ________________ _______________PROFIT AFTER TAXATION

649,641 1,014,760 1,448,327 1,465,567 922,071 995,263

Debenture Redemption ReserveWritten Back - - 806,050 - - -Profit brought forward from previous year 403,112 414,004 209,186 420,792 343,588 411,209PROFIT AVAILABLE FORAPPROPRIATIONS 1,052,753 1,428,764 2,463,563 1,886,359 1,265,659 1,406,472APPROPRIATIONSTransfer to General Reserve

500,000 1,000,000 1,750,000 1,250,000 500,000 500,000

Proposed Div. on Equity Shares

121,683 187,681 250,242 250,242 304,742 304,742

Prov. For Div. Tax 17,066 31,897 42,529 42,529 49,708 47,319Balance Carried to Balance Sheet

414,004 209,186 420,792 343,588 411,209 554,411

1,052,753 1,428,764 2,463,563 1,886,359 1,265,659 1,406,472

27 data analysis & interpretation

Graphically representation of each types of ratio

Liquidity Ratio:

Current Ratio:

Current Ratio = Current Assets / Current Liabilities

Format 1 ( Rs. In Thousand)

PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Current Assets

Inventories 26,21,667 33,90,551 53,24,181 40,37,100 6,721,045 9,626,573

Sundry debtors 19,82,492 22,69,104 25,63,505 32,28,548 1,764,942 2,834,779

Cash and bank 5,17,489 3,70,805 4,63,607 7,64,682 102,974 1,130,084

Other current assets 2,25,640 2,60,942 3,40,486 2,39,621 338,620 371,296

Loan and advances 16,48,665 21,19,931 40,24,216 27,80,155 2,505,980 2,537,283

Total current assets(A) 69,95,953 84,11,333 1,27,15,995 1,10,50,106 11,343,561 16,500,015

Current Liabilities

Liabilities 37,69,487 46,12,543 86,09,576 98,12,920 16,257,550 15,445,859

Provision 2,10,109 2,62,565 3,81,723 3,73,392 441,785 412,272

Total current liability(B) 39,79,596 48,75,108 89,91,299 1,01,86,312 16,699,335 15,858,131

Ratio = A/B 1.76:1 1.73:1 1.41:1 1.08:1 0.68:1 1.04:1

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.20.40.60.8

11.21.41.61.8

1.76 1.73

1.41

1.08

0.68

1.04

Ratio

Ratio

28Comments:

The current ratio of UML is 1.76:1, 1.73:1, 1.41:1, 1.08:1, 0.68:1, 1.04:1 in the financial year 2005-2006, 2006-2007, 2007-2008, 2008-2009, 2009-2010, 2010-2011.We know that the standard current ratio applicable to the Indian Industry is 1.33:1.Here the current ratio of UML is very satisfactory in 2005-2006, 2006-2007 and 2007-2008.The current assets are on an increased in this three years and firm has got sufficient assets to pay short term liabilities. But in the year 2008-2009, 2009-2010 and 2010-2011 the current assets has been declined to 1.08:1, 0.68:1 and 1.04:1 because of decrease in current assets and increase in current liabilities. The current assets has been declined because the major fluctuate components of current assets i.e. Inventories decreased to 40,37,100 in the year 2008-2009, Cash & Bank decreased to 1,02,974 in the year 2009-2010 and loan & advance has also decreased to 25,37,283 in the year 2010-2011.

Acid Test Ratio / Quick Ratio:

Acid Test Ratio= Liquid Assets / Current Liabilities


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Current assets 6995953 84,11,333 1,27,15,995 1,10,50,106 11,343,561 16,500,015

Less:-stock 2621667 33,90,551 53,24,181 40,37,100 6,721,045 9,626,573

Liquid assets(A) 4374286 50,20,782 73,91,814 70,13,006 46,22,516 68,73,442

Current liabilities(B) 3979596 48,75,108 89,91,299 1,01,86,312 16,699,335 15,858,131

Ratio = A/B 1.10:1 1.03:1 0.82:1 0.69:1 0.28:1 0.43:1

29

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.2

0.4

0.6

0.8

1

1.2

1.1 1.030.820000000000

001 0.690000000000001

0.280.43

Ratio

Ratio

Comments:

The quick ratio of 1:1 is considered to be ideal and standared.Here above table and format shows that the quick ratio of UML is very satisfactory in 2005-06 & 2006-07 because it is more than 1:1.As UML has shown the quick ratio of 1.10:1 & 1.03:1 in the year 2005-2006 & 2006-2007 it is indicating the availability of sufficient quick assets to manage the current liabilities. But in 2007-08,2008-09,2009-2010 & 2010-2011 it has been declined to 0.82:1,0.69:1,0.28:1 & 0.43:1 respectively, because of increase in current liabilities.

30Leverage or Solvency ratio:

Debt- Equity Ratio:

Debt- Equity Ratio= Debt / Equity OR Long Term Loans / Shareholder’s Fund


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Debt

Secured Loan 67,17,748 74,41,398 86,70,608 1,46,61,503 8,401,184 16,092,062

Unsecured Loan 1,58,367 52340 7,61,414 -

Deferred Tax Liability 13,35,064 14,34,331 14,67,708 12,21,053 1,691,017 2,148,748

Total Debt(A) 82,11,179 89,28,069 1,08,99,730 1,58,82,556 10,092,201 18,240,810

Equity Share Capital 2,21,920 2,40,045 2,50,920 2,50,920 305,420 305,420

Reserve & Surplus 56,05,048 69,36,730 84,04,090 99,11,836 14,691,498 15,265,132

Total Equity (B) 58,26,968 71,76,775 86,55,010 1,01,62,756 14,996,918 15,570,552

Ratio = A/B 1.41:1 1.24:1 1.26:1 1.56:1 0.67:1 1.17:1

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.20.40.60.8

11.21.41.6 1.41

1.24 1.26

1.56

0.67000000000001

1.17

Ratio

Ratio

Comments:

The above table and format shows that the debt equity ratio of UML is 1.41:1 in year 2005-06 which has been declined to 1.24:1 in year 2006-07. In 2007-08 & 2008-09 it has increased to 1.26:1 & 1.56:1. The reasons being continuous increase in secured loans and reserves & surplus and decrease in unsecured loans. But in the year 2009-2010 & 2010-2011 again it has been declined to 0.67 & 1.17 respectively. Because in 2009-2010 secured loans has decreased and 2010-2011 deferred tax liability has decreased.

31Total Assets to Debt Ratio:

Total Assets to Debt Ratio= Total Assets/Debt or Long Term Loans


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Assets

Current Assets 69,95,953 84,11,333 1,27,15,995

1,10,50,106

11,343,561 16,500,015

Fixed Assets 95,42,787 1,09,70,665

1,44,90,841

2,33,10,700

28,575,380 31,299,965

Total Assets(A) 1,65,38,740 1,93,81,998

2,72,06,836

3,43,60,806

3,99,18,941

4,77,99,980

Debt

Secured Loan 67,17,748 74,41,398 86,70,608 1,46,61,503

8,401,184 16,092,062

Unsecured Loan 1,58,367 52340 7,61,414 -

Deferred Tax Liability 13,35,064 14,34,331 14,67,708 12,21,053 1,691,017 2,148,748

Total Debt(B) 82,11,179 89,28,069 1,08,99,730

1,58,82,556

10,092,201 18,240,810

Ratio = A/B 2.01:1 2.17:1 2.50:1 2.16:1 3.96:1 2.62:1

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

1

2

3

4

5

2.01 2.17 2.5 2.16

3.96

2.62

Ratio

Ratio

Comments:

The above table and format shows that the total assets to debt ratio is increasing from 2.01:1 to 2.50:1 in the year 2005-06 to 2007-08 & Once again increased to 3.96:1 in the year 2009-2010.Because the fixed assets are on an increasing trend throughout the six years. But decreased to 2.16:1 & 2.62:1 in the year 2008-09 & 2010-2011.Because the current assets decreased in 2008-2009 and deferred tax liability decreased in 2010-2011.Secured loans are on an

32

increasing trend and unsecured loans are on an decreasing trend throughout the six years.

Proprietary Ratio:

Proprietary Ratio= Equity(Shareholder’s Fund) / Total Assets


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Shareholders Funds

Capital 2,21,920 2,40,045 2,50,920 2,50,920 305,420 305,420

Equity warrants 88740 33278 3,34,950 -

Reserve and Surplus 56,05,048 69,36,730 84,04,090 99,11,836 14,691,498 15,265,132

Total(A) 59,15,708 72,10,053 89,89,960 1,01,62,756 14,996,918 15,570,552

Current Assets 69,95,953 84,11,333 1,27,15,995

1,10,50,106 11,343,561 16,500,015

Fixed Assets 95,42,787 1,09,70,665 1,44,90,841

2,33,10,700 28,575,380 31,299,965

Total Assets(B) 1,65,38,740 1,93,81,998 2,72,06,836

3,43,60,806 39,918,941 47,799,980

Ratio = A/B 0.36:1 0.37:1 0.33:1 0.30:1 0.38:1 0.33:1

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4

0.36

0.37

0.330000000000004

0.3

0.380000000000004

0.330000000000004

Ratio

Ratio

Comments:

The above table and format shows that the proprietary ratio of UML increased from 0.36:1 to 0.37:1 from year 2005-06 to 2006-07 and once again increase 0.38:1 in 2009-2010 & decrease to 0.33:1, 0.30:1 & 0.33:1 in 2007-08, 2008-09

33& 2010-2011.The share capital increased in first three years then it was stable again it was increased in 2009-2010 then it was stable. The reserve increased in all six years. The current assets increased in five years except it decreased in

2008-2009. The fixed asset shows an increasing trend from 2005-06 to 2010-11.

Reserve to Capital Ratio:

Reserve to capital ratio = Reserve/Capital


PARTICULARS

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Reserve(A) 56,05,048 69,36,730 84,04,090 99,11,836 14,691,498 15,265,132

Capital(B) 2,21,920 2,40,045 2,50,920 2,50,920 305,420 305,420

Ratio = A/B 25.26:1 28.90:1 33.49:1 39.50:1 48.1:1 49.98:1

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

0 5 10 15 20 25 30 35 40 45 50

25.26

28.9

33.49

39.5

48.1

49.98

Ratio

Ratio

Comments:

The above table and format shows that the reverse to capital ratio of UML increased from 25.26:1 to 49.98:1 from the year 2005-2006 to 2010-2011.It is showing increasing trend in the reserve to capital ratio.

34

35Efficiency ratio or turnover ratio:

Debtors Turnover Ratio:

Debtors Turnover Ratio = Net credit sales/Average debtors


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Credit sales(A) 1,23,17,878 1,40,86,047 1,65,58,987 2,12,72,253

18,503,855 25,267,020

Opening debtor 25,13,970 19,82,492 22,69,104 25,63,505 3,228,548 1,674,942

Add:-closing debtor 19,82,492 22,69,104 25,63,505 32,28,548 1,674,942 2,834,779

Total debtor(B) 44,96,462 42,51,596 48,32,609 57,92,053 4,903,490 4,509,721

Average debtor(C)= B/2 22,48,231 21,25,798 24,16,305 2896027 2,451,745 2,254,860.50

Ratio = A/C 5.48 times 6.63 times 6.85 times 7.35 times 7.55 times 11.2 times

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

2

4

6

8

10

12

5.486.63 6.85 7.35 7.55

11.2

Ratio

Ratio

Comments:

The above table and format shows the increasing trend of debtors turnover ratio of UML. Debtors turnover ratio which measures whether the company has been efficient in converting debtors into cash. Higher the ratio, better the position. This shows that money is being quickly recovered from the debtors. The ratio in case of UML is very high i.e. the company is in very good position and it has resulted from efficient credit management system.

36Working Capital Turnover Ratio:

Working Capital Turnover Ratio = Net Sales/ Working Capital


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Gross sales 1,37,71,836 1,57,37,419 1,85,27,701 2,30,72,056 19,600,263 27,422,354

Less:-Excise duty 14,53,958 16,51,372 19,68,714 17,99,803 1,096,408 2,155,334

Net sales(A) 1,23,17,878 1,40,86,047 1,65,58,987 2,12,72,253 18,503,855 25,267,020

Current Assets 69,95,953 84,11,333 1,27,15,995 1,10,50,106 11,343,561 16,500,015

Less:-Current liabilities 39,79,596 48,75,108 89,91,299 1,01,86,312 16,699,335 15,858,131

Working Capital(B) 30,16,357 35,36,225 37,24,696 8,63,794 (53,55,774) 6,41,884

Ratio = A/B 4.08 times 3.98 times 4.45 times 24.63 times (3.45 times) 39.4 times

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011-505

10152025303540

4.08 3.98 4.45

24.63

-3.45

39.4

Ratio

Ratio

Comments:

The above table and format shows that the working capital turnover ratio is 4.08 times in the year 2005-06 which has been decreased to 3.98 times in the year 2006-07. The ratio increased to 4.45 times & 24.63 times in the year 2007-08 & 2008-09 respectively.But in 2009-2010 it has been decreased to (3.45) times and then in 2010-2011 it has been increased to 39.4 times.The financial year 2005-2006,2007-2008,2008-2010 & 2010-2011 show excellent ratio as the company was abale to achive maximum sales with less investment in working capital which shows better working management policy.But the financial year 2006-2007 &2009-2010 failed to maitain the past records due to increased in current liabilities and fall in sales respectively.

37Inventory Turnover Ratio or Stock Turnover Ratio:

Inventory Turnover ratio= Net Sales/Average Stock or Cost of Goods Sold/ Average Stock


PARTICULARS

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Net sales(A) 1,23,17,878 1,40,86,047 1,65,58,987 2,12,72,253 18,503,855 25,267,020

Opening Stock

28,40,534 26,21,667 33,90,551 53,24,181 6,721,045 67,21,045

Closing Stock 26,21,667 33,90,551 53,24,181 40,37,100 4,037,100 96,26,573

Total Stock(B)

54,62,201 60,12,218 87,14,732 93,61,281 10,758,145 16,347,618

Avg stock= B/2

27,31,101 30,06,109 43,57,366 46,80,641 5,379,073 81,73,809

Ratio = A/C 4.51 times 4.69 times 3.80 times 4.54 times 3.44 times 3.09 times

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5 4.51 4.69

3.8

4.54

3.443.09

Ratio

Ratio

38Comments:

The above table and format shows that the inventory turnover ratio is 4.51 times in the year 2005-06 which has been increased to 4.69 times in the year 2006-07. In the year 2007-08 inventory turnover ratio decreased to 3.80 times and which has been increased to 4.54 times in the year 2008-09.Again in the year 2009-2010 & 2010-2011 which has been decreased to 3.44 times & 3.09 times respectively. This ratio indicates how fast the inventory is converted into sales. Here high ratio implies good inventory management. In the year 2005-06, 2006-07 & 2008-2009 the inventory management is good. But it decreased in the year 2007-08, 2009-2010 & 2010-2011 it the sign of inefficient inventory management.

Average Collection Period:

Average collection period = (average debtors/credit sales)×365


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Opening debtor 25,13,970 19,82,492 22,69,104 25,63,505 1,674,942 16,74,942

Add:-closing debtor 19,82,492 22,69,104 25,63,505 32,28,548 3,228,548 28,34,779

Total debtor(A) 44,96,462 42,51,596 48,32,609 57,92,053 49,03,490 45,09,721

Average debtor(B)= A/2

22,48,231 21,25,798 24,16,305 2896027 24,51,745 22,54,860.5

Credit sales(C) 1,23,17,878 1,40,86,047

1,65,58,987 2,12,72,253 18,503,855 25,267,020

ACP = (B/C)×365 66 days 55 days 55 days 51 days 49.00 days 33.00 days

39

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

0 10 20 30 40 50 60 70

66

55

55

51

49

33

Ratio

Ratio

Comments:

As a standard, debtor collection period is not more than 90 days. Debtor collection period of UML is satisfactory during the study period because efficient collection work from credit control managers. It fluctuates widely due to change in economic condition. The overall the average period during the study period is below 90 days which shows consistent position.

40Fixed Assets Turnover Ratio:

Fixed Assets Turnover Ratio=Cost of Goods or Net Sales/Net Fixed Assets


PARTICULARS 2005- 2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Net Sales 12317878 14229308 16558987 21272253 18,503,855 25,267,020

Fixed Assets

Gross Block 14914639 15739283 16807170 19383467 31,707,230 38,442,328

(-)Depreciation 5879443 6551753 7209382 8018284 9,074,962 10,826,337

(-)Impairment 188024 187451 140835 140835 140,835 140,835

Net Block 8847172 9000079 9456953 11224348 22,491,433 27,475,156

Capital Work in Progress 695615 1970586 5033888 12086352 6,083,947 3,824,809

Total(B) 95442787 10970665 14490841 23310700 28,575,380 31,299,965

Ratio(A/B) 1.29 1.29 1.14 0.91 0.65 0.81

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.2

0.4

0.6

0.8

1

1.2

1.41.29 1.29 1.1399999999

9999

0.910.6500000000

000080.81

Ratio

Ratio

Comments:

The fixed assets turnover ratio from the year 2005-2006 to 2010-2011 have decreased from 1.29 to 0.81 which is not good for the company but we hope that in future company will overcome this situation.

41Current Assets Turnover Ratio:

Current Assets Turnover Ratio= net sales/current assets


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Net Sales(A) 12317878 14086047 16558987 21272253 18,503,855 25,267,020

Current Assets (B) 6995953 8411333 12715995 11050106 11,343,561 16,500,015

Ratio (A/B) 1.76 1.67 1.3 1.92 1.63 1.53

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2 1.761.67

1.3

1.92

1.631.53

Ratio

Ratio

Comments:

The current assets turnover ratio from 2005-2006 to 2010-2011 the ratio is to 1.76 to 1.53 due to the increase and decrease in the net sales or turnover of UML because of market condition and usha martin policies.

42Payable Turnover Ratio/Creditors Turnover Ratio:

Payable Turnover Ratio= Net Credit Annual Shift/ Average trade Creditors


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Net credit purchase(A)

Pur. of gen. Merchandise 9616 15302 19899 35489 59,486 37,559

(+)purchase 5146539 6175534 8996556 8085302 9.503,249 11,484,667

Total(A) 5156155 6190836 9016455 8120791 9562735 11522226

Amount Payable:-

Opening:-

Acceptance 2741690 1862142 1940128 5175146 7129404 12390552

Sundry Creditors 1431326 1701248 2449171 3177594 2346930 3034791

Opening Balance(B) 4173016 3563390 44389299 8352740 9476334 15425343

Closing:-

Acceptance 1862142 1940128 5175146 6733086 12390552 11972865

Sundry Creditors 1701248 2449171 3177594 2743248 3034791 2701510

Closing Balance(C) 3563390 4389299 8352740 9476334 15425343 14674375

Avg.Amount Payable 3868203 3976344.5 6371019.5 8914537

D=(B+C)/2 12450838 15049859

Ratio = A/B 1.33 times 1.56 times 1.42 times 0.91 times 0.76 times 0.78 times

Comments:

The creditors turnover ratio of UML is 1.33 times,1.56 times, 1.42 times ,0.91 times,0.76 times & 0.78 times in financial year 2005-06,2006-07,2007-08,2008-09,2009-2010 & 2010-2011 respectively. The analysis for creditors turnover is basically the same as of debtors turnover ratio expect that in place of average daily sales.

Profitability Ratio:

Gross Profit Ratio:


43PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Gross Profit (A)

Net Profit 649641 1014760 1448327 1465567 922071 995263

(+)selling & Distribution exps. 4850660 5801012 6036422 8150137 7820703 11247331

(+)Interest 730603 713016 803752 1233483 1130336 1742339

(-)Income 94846 143261 156401 135315 201639 272785

Total (A) 6136058 7385527 8132100 10713872 9671471 13712148

NET sales(B) 12317878 14086047 16558987 21272253 18503855 25267020

Ratio (A/B) (in%) 49.81 52.43 49.11 50.36 52.3 54.3

49.81

52.43

49.1150.36

52.3

54.3

Ratio

2005-20062006-20072007-20082008-20092009-20102010-2011

Comments:

G/P ratio is one of the very important ratio for measuring profitability of a firm low gross profit ratio ,generally indicates high cost of goods sold due to lesser sales, lower selling prices, excessive competition, over- investment in plant and machinery. Here G/P ratio of UML increasing order in the year 2005-2006,

442006-2007,2008-2009,2009-2010 & 2010-2011 but decreased in 2007-2008 due to increased in expenditure.

Net Profit Ratio:

Net profit ratio = Net profit/Net sales × 100


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Net profit(A) 6,49,641 10,14,760 14,48,327 14,65,567 922,071 9,95,263

Net sales(B) 1,23,17,878 1,40,86,047 1,65,58,987 2,12,72,253 18,503,855 25,267,020

Ratio = A/B×100 5% 7% 9% 7% 5% 4%

Comments:

The above table and format shows that the net profit ratio is in the increasing order in the year 2005-06, 2006-07 & 2007-08. But it decreased to 7%,5% & 4% in the year 2008-09,2009-2010 & 2010-2011 due to the increase in the expenditure.

Operating Profit Ratio:

Operating Profit Ratio= Operating Profit /Net Sale * 100


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Operating Profit (A)

Gross Profit 6136058 7385527 8132100 10713872 13712148 9671471

(-) selling & Distribution exps. 4850660 5801012 6036422 8150137 7820703 11247331

451285398 1584515 2095678 2563735 1850768 2464817

Net Sales (B) 12317878 14086047 16558987 21272253 18503855 25267020

Operating Profit Ratio=A/B*100 10.44 11.25 12.66 12.05 10 9.8

10.44

11.25

12.6612.05

10

9.8

Ratio

2005-20062006-20072007-20082008-20092009-20102010-2011

Comments:

The above table and format shows that the operating profit ratio of UML is showing increasing trend from 2005-2006 to 2008-2009.But in 2009-2010 & 2010-2011 which has been decreased to 10 & 9.8 respectively due to in 2009-

462010 net sales has been decreased and 2010-2011 gross profit has been decreased.

Return On Investment(ROI):

Return On Investment = Profit Before Tax & Interest/Shareholder’s Fund*100


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

PBT 1007385 1383960 2007127 2140412 1392035 1452994

(+) Interest 730630 713016 803752 1233483 1130336 1742339

PBIT(A) 1737988 2096976 2810897 3373895 2522371 3195333

Shareholders fund(B)

Capital 221920 240045 250920 3373895 305420 305420

Equity Warrent 88740 33278 334950 250920 - -

Reserve and surplus 5605048 6936730 8404090 9911836 14691498 15265132

Total(B) 5915708 7210053 8989960 10162756 14996918 15570552

Ratio(A/B)*100 29.38 29.08 31.26 33.2 16.8 20.5

Comments:

As we know that ROI is one of the most important ratios to measures the overall efficiency of a firm. The above table and format shows that the ROI of UML is showing increasing trend from 2005-2006 to 2008-2009.But in 2009-2010 & 2010-2011 which has been decreased to 16.8 & 20.5 respectively due to PBIT & Capital has been decreased.

Return on Equity Capital(ROE):

ROE= Net Profit After Tax, Interest & Preference Dividend/Equity Share Capital*100


47PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Net Profit After Tax(A)

649,641 1,014,760 1,448,327 1,465,567 922,071 995,263

Net Worth(B)

Capital 2,21,920 2,40,045 2,50,920 2,50,920 305,420 305,420

Reserve & Surplus 56,05,048 69,36,730 84,04,090 99,11,836 14,691,498 15,265,132

Total(B) 58,26,968 71,76,775 86,55,010 1,01,62,756 14,996,918 15,570,552

Ratio=A/B*100 11.1 14.1 16.7 14.4 6.1 6.4

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-201102468

1012141618

11.1

14.1

16.7

14.4

6.1 6.4

Ratio

Ratio

Comments:

This ratio indicates what percentage of profit earned by the equity shareholders.ROE helps to determine the market price of equity shares of the company while comparing with the ratios of other companies. The above table and format shows that the ROE of UML is showing increasing trend from 2005-2006 to 2007-2008. But in 2008-2009, 2009-2010 & 2010-2011 which has been decreased due to net profit after tax has been decreased and in 2008-2009 capital was stable and again capital has increased in 2009-2010 and then once again it was stable in 2010-2011.

48Earning Per Share:

Earning Per Share= Net profit after tax preference dividend/no of share equity.


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Net Profit After Tax(A) 649641 1014760 1448327 1465567 922071 995263

Number of equity shares(B) 47873356 47873356 250241780 250241780 304741780 304741780

Ratio = (A/B)*100

(in times) 1.36 2.12 0.58 0.59 0.3 0.33

49

2005-2006

2006-2007

2007-2008

2008-2009

2009-2010

2010-2011

0 0.5 1 1.5 2 2.5

1.36

2.12

0.58

0.59

0.3

0.330000000000003

Ratio

Ratio

Comments:

E.P.S play a vital role to know about the net earning power of the company. If the E.P.S of the company increased, net earning power of the company also increased. From the above calculation we can says that during 2005-2006 E.P.S was 1.36 but in 2006-2007 E.P.S was 2.12.So compare to 2005-2006 and 2006-2007,it can be seen that net earning power of the company has increased in 2006-2007.Again in 2007-2008, E.P.S was decrease up to 0.58 and in the year 2008-09 it again increase to 0.59.Again in 2009-2010, E.P.S was decreased up to 0.3 & in the year 2010-2011 it again increased to 0.33.By seeing the past record we can say that after the year 2006-2007 E.P.S of UML is not good.

50Dividend Per Share:

Dividend Per Share= dividend paid equity shareholders/number of equity share


PARTICULARS 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Dividend paid to

equity shareholders(A) 121683 187681 250242 250242 304742 304742

Number of equity shares(B) 47873356 47873356 250241780 250241780

304741780 304741780

Ratio = (A/B)*100

(in times) 2.54 3.92 1 1 1 1

2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

0.5

1

1.5

2

2.5

3

3.5

4

2.54

3.92

1 1 1 1

Ratio

Ratio

Comments:

In the year 2005-2006 the DPS was 2.54 and in year 2006-2007 it was 3.92, but in the years 2007-2008,2008-2009,2009-2010 & 2010-2011 it decreased to Re.1 .The reason behind this is Usha Martin issuing its shares at Rs. 5/share. But from 2007-08 Usha Martin issuing its share into Re.1/share.

51 COMPARATIVE BALANCE SHEET AS ON 2009-2010 & 2010-2011

(Rs. in thousand)Particulars 31-03-2011 31-03-2010 ABSOLUTE

CHANGESCHANGESIn %

SOURCE OF FUNDSShareholders’ Funds Capital 305,420 305,420 - -Equity warrants - - - -Reserve and Surplus 15,265,132 14,691,498 5,73,634 3.90

Loan Funds:Secured Loans 16,092,062 8,401,184 7,690,878 91.55

Unsecured Loans - - - -Net Deferred Tax Liabilities

2,148,748 1,691,017 4,57,731 27.07

Total 33,811,362 25,089,119 87,22,243 34.77APPLICATION OF FUNDSFixed Assets:Gross Block 38,442,328 31,707,230 67,35,098 21.24Less: Depreciation 10,826,337 9,074,962 17,513,75 19.30Impairment Loss 140,835 140,835 - -Net block 27,475,156 22,491,433 49,83,723 22.16Capital Work In Progress 3,824,809 6,083,947 -22,59,138 -37.13Investment 1,869,513 1,869,513 - -Current assets, Loans and advances:Inventories 9,626,573 6,721,045 29,05,528 43.23Sundry Debtors 2,834,779 1,674,942 11,59,837 69.25Cash and Bank Balance 1,130,084 102,974 10,27,110 997.45Other Current Assets 371,296 338,620 32,676 9.65Loans and Advances 2,537,283 2,505,980 31,303 1.25Total current assets 16,500,015 11,343,561 51,56,454 45.46Less: Current Liabilities and provisions

15,858,131 16,699,335 -8,41,204 -5.04

Net Current Assets 641,884 (5,355,774) 59,97,658 -111.98Miscellaneous Expenditure:

- -

Deferred Revenue Expenditure

- -

Total 33,811,362 25,089,119 87,22,243 34.77

52 INTERPRETATION

I Sources of funds

There is no change in share capital. Equity warrants has been decreased by 100% in the year 2011 compared to year2010. And the reserve & surplus has been increased by 3.90% in the year 2011 when compared to year 2010.

There has been increased by 91.55% in secured loans and decreased by 100% in unsecured loans and deferred tax liabilities has been also increased by 27.07% in the year 2011 when compared to the year 2010.

II application of fund

The fixed asset has been increased by 22.16% in the year 2011 when compared to the last year.

Capital work in progress has been also decreased by 37.13% in the year 2011 when compared to the year 2010.

There is no change in Investment in the year 2011 when compared to the year 2010.

The net current asset has been decreased by 111.98% in the year 2011 when compared to the year 2010.

There is no change in Deferred revenue expenditure in the year 2011 when compared to the year 2010.

53COMPARATIVE BALANCE SHEET AS ON 2008-09 &2009-

10 (Rs. in thousand)

Particulars 31-03-2010 31-03-2009 ABSOLUTE CHANGES

CHANGESIn %

SOURCE OF FUNDSShareholders’ Funds Capital 305,420 2,50,920 54,500 21.72Equity warrants - -Reserve and Surplus 14,691,498 99,11,836 4779662 48.22

Loan Funds:Secured Loans 8,401,184 1,46,61,503 -6260319 -42.70

Unsecured Loans - -Net Deferred Tax Liabilities

1,691,017 12,21,053 469964 38.49

Total 25,089,119 2,60,45,312 -956193 -3.67APPLICATION OF FUNDSFixed Assets:Gross Block 31,707,230 1,93,83,467 12323763 63.58Less: Depreciation 9,074,962 80,18,284 1056678 13.18Impairment Loss 140,835 1,40,835 - -Net block 22,491,433 1,12,24,348 11267085 100.38Capital Work In Progress 6,083,947 1,20,86,352 -6002405 -49.66Investment 1,869,513 18,63,513 6000 0.32Current assets, Loans and advances:Inventories 6,721,045 40,37,100 2683945 66.48Sundry Debtors 1,674,942 32,28,548 -1553606 -48.12Cash and Bank Balance 102,974 7,64,682 -661708 -86.53Other Current Assets 338,620 2,39,621 98999 41.31Loans and Advances 2,505,980 27,80,155 -274175 -9.86Total current assets 11,343,561 1,10,50,106 293455 2.66Less: Current Liabilities and provisions

16,699,335 1,01,86,312 6513023 63.94

Net Current Assets (5,355,774) 8,63,794 -6219568 -720.03Miscellaneous Expenditure:

-


- 7,305 -7,305 -100

Total 25,089,119 2,60,45,312 -956193 -3.67

54 INTERPRETATION

I Sources of funds

There has been increased by 21.72 in share capital. Equity warrants has been decreased by 100% in the year 2010 compared to year2009. And the reserve & surplus has been increased by 48.22% in the year 2010 when compared to year 2009.

There has been decreased by 42.70% in secured loans and decreased by 100% in unsecured loans and deferred tax liabilities has been also increased by 38.49% in the year 2010 when compared to the year 2009.



Capital work in progress has been also decreased by 49.66% in the year 2010 when compared to the year 2009.

The Investment has been increased by 0.32% in the year 2010 when compared to the year 2009.


The deferred revenue expenditure has been decreased by 100% in the year 2010 when compared to the year 2009.




CHANGESIn %

SOURCE OF FUNDSShareholders’ Funds Capital 2,50,920 2,50,920 - -Equity warrants - 3,34,950 -3,34,950 -100Reserve and Surplus 99,11,836 84,04,090 15,07,746 17.94

Loan Funds:Secured Loans 1,46,61,503 86,70,608 59,90,895 69.09Unsecured Loans - 7,61,414 -7,61,414 -100Net Deferred Tax Liabilities

12,21,053 14,67,708 -2,46,655 -16.81

Total 2,60,45,312 1,98,89,690 61,55,622 30.95APPLICATION OF FUNDSFixed Assets:Gross Block 1,93,83,467 1,68,07,170 25,76,297 15.33Less: Depreciation 80,18,284 72,09,382 8,08,902 11.22Impairment Loss 1,40,835 1,40,835 - -Net block 1,12,24,348 94,56,953 17,67,395 18.68Capital Work In Progress 1,20,86,352 50,33,888 70,52,464 140.09Investment 18,63,513 16,58,014 2,05,499 12.39Current assets, Loans and advances:Inventories 40,37,100 53,24,181 -12,87,081 -24.17Sundry Debtors 32,28,548 25,63,505 6,65,043 25.94Cash and Bank Balance 7,64,682 4,63,607 2,71,075 58.47Other Current Assets 2,39,621 3,40,486 -1,00,865 -29.62Loans and Advances 27,80,155 40,24,216 -12,44,061 -30.91Total current assets 1,10,50,106 1,27,15,995 -16,65,889 -13.10Less: Current Liabilities and provisions

1,01,86,312 89,91,299 11,95,013 13.29

Net Current Assets 8,63,794 37,24,696 -28,60,902 -76.81Miscellaneous Expenditure:Deferred Revenue Expenditure

7,305 16,139 -8,834 -54.74

Total 2,60,45,312 1,98,89,690 61,55,622 30.95

56 INTERPRETATION

I Sources of funds

There is no change in share capital. Equity warrants has been decreased by 100% in the year 2009 compared to year2008. And the reserve & surplus has been increased by 17.94% in the year 2009 when compared to year 2008

There has been increased by 69.09% in secured loans and decreased by 100% in unsecured loans and deferred tax liabilities has been also decreased by 16.81% in the year 2009 when compared to the year 2008.



Capital work in progress has been also increased by 140.09% in the year 2009 when compared to the year 2008.

Investment has been increased by 12.39% in the year 2009 when compared to the year 2008.


Deferred revenue expenditure has also been decreased by 54.74% in the year 2009 when compared to the year 2008.




CHANGESIn %

SOURCE OF FUNDSShareholders’ Funds Capital 2,50,920 2,40,045 10,875 4.53Equity warrants 3,34,950 33,278 3,01,672 906.52Reserve and Surplus 84,04,090 69,36,730 14,67,360 21.15

Loan Funds:Secured Loans 86,70,608 74,41,398 12,29,210 16.52Unsecured Loans 7,61,414 52,340 7,09,074 1,354.75Net Deferred Tax Liabilities

14,67,708 14,34,331 33,377 2.33

Total 1,98,89,690 1,61,38,122 37,51,568 23.25APPLICATION OF FUNDSFixed Assets:Gross Block 1,68,07,170 1,57,39,283 10,67,887 6.78Less: Depreciation 72,09,382 65,51,753 6,57,629 10.04Impairment Loss 1,40,835 1,87,451 -46,616 -24.86Net block 94,56,953 90,00,079 4,56,874 5.07Capital Work In Progress 50,33,888 19,70,586 30,63,302 155.45Investment 16,58,014 16,00,805 57,209 3.57Current assets, Loans and advances:Inventories 53,24,181 33,90,551 19,33,630 57.03Sundry Debtors 25,63,505 22,69,104 2,94,401 12.97Cash and Bank Balance 4,63,607 3,70,805 92,802 25.02Other Current Assets 3,40,486 2,60,942 79,544 30.48Loans and Advances 40,24,216 21,19,931 19,04,285 89.83Total current assets 1,27,15,995 84,11,333 43,04,662 51.17Less: Current Liabilities and provisions

89,91,299 48,75,108 41,16,191 84.43

Net Current Assets 37,24,696 35,36,225 1,88,471 5.33Miscellaneous Expenditure:Deferred Revenue Expenditure

16,139 30,427 -14,288 -46.95

Total 1,98,89,690 1,61,38,122 3751568 23.25

58

INTERPRETATION

I Sources of funds

Share capital has been increased by 4.53% in the year2008 compare to 2007. Equity warrants has been increased by 906.52% in the year 2008 compared to year2007. And the reserve & surplus has been increased by 21.15% in the year 2008 when compared to year 2007

There has been increased by 16.52% in secured loans and also increased in unsecured loans by 1354.75% and Net deferred tax liabilities has been increased by 2.33% in the year 2008 when compared to the year 2007.


The fixed assets have been increased by 5.07% in the year 2008 when compared to the last year.



The net current asset has been increased by 5.33% in the year 2008 when compared to the year 2007.

Deferred revenue expenditure has been decreased by 46.95% in the year 2008 when compared to the year 2007.

59Particulars 31-03-2007 31-03-2006 ABSOLUTE

CHANGESCHANGESIn %

SOURCE OF FUNDSShareholders’ Funds Capital 2,40,045 2,21,920 18,125 8.17Equity warrants 33,278 88,740 -55,462 -62.50Reserve and Surplus 69,36,730 56,05,048 13,31,682 23.76

Loan Funds:Secured Loans 74,41,398 67,17,748 7,23,650 10.77Unsecured Loans 52,340 1,58,367 1,06,027 66.95Net Deferred Tax Liabilities

14,34,331 13,35,064 99,267 74.35

Total 1,61,38,122 1,41,26,887 20,11,235 14.24APPLICATION OF FUNDSFixed Assets:Gross Block 1,57,39,283 1,49,14,639 8,24,644 5.53Less: Depreciation 65,51,753 58,79,443 6,72,310 11.43Impairment Loss 1,87,451 1,88,024 -573 -0.3Net block 90,00,079 88,47,172 1,52,907 1.73Capital Work In Progress 19,70,586 6,95,615 12,74,971 183.29Investment 16,00,805 15,25,755 75,050 4.92Current assets, Loans and advances:Inventories 33,90,551 26,21,667 7,68,884 29.33Sundry Debtors 22,69,104 19,82,492 2,86,610 14.45Cash and Bank Balance 3,70,805 5,17,489 -1,46,684 -28.34Other Current Assets 2,60,942 2,25,640 35,302 15.64Loans and Advances 21,19,931 16,48,665 4,71,266 28.58Total current assets 84,11,333 69,95,953 14,15,380 20.23Less: Current Liabilities and provisions

48,75,108 39,79,596 8,95,512 22.50

Net Current Assets 35,36,225 30,16,357 5,19,868 17.23Miscellaneous Expenditure:Deferred Revenue Expenditure

30,427 41,988 -11,561 -27.53

Total 1,61,38,122 1,41,26,887 20,11,235 14.24



61 INTERPRETATION

I Sources of funds

Share capital has been increased by 8.17% in the year2007 compare to 2006. Equity warrants has been decreased by 62.50% in the year 2007 compared to year2006. And the reserve & surplus has been increased by 23.76% in the year 2007 when compared to year 2006

There has been increased by 10.77% in secured loans and also increased in unsecured loans by 66.95% and Net deferred tax liabilities has been increased by 74.35% in the year 2007 when compared to the year 2006.


The fixed assets have been increased by 1.73% in the year 2007 when compared to the last year.



The net current assets have been increased by 17.23% in the year 2007 when compared to the year 2006.

Deferred revenue expenditure has been decreased by 27.53% in the year 2007 when compared to the year 2006.

62COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31 st March 2009-2010 & 2010-2011 (Rs. in thousand)

Particulars 31-03-2011 31-03-2010 Increase/Decrease

CHANGESIn %

INCOMETurnover(Gross) 27,422,354 19,600,263 78,22,091 39.91Less: Excise Duty 2,155,334 1,096,408 10,58,926 56.58Turnover(Net) 25,267,020 18,503,855 67,63,165 36.55Other Income 272,785 201,639 71,146 35.28Total 25,539,805 18,705,494 68,34,311 36.54EXENDITUREPurchase of General Merchandise

37,559 59,486 -21,927 -36.86

Raw Material Consumed 10,681,517 8,204,052 24,77,465 30.20(increase)/ Decrease in Stock-in-Trade

-1,356,533 -809,038 -5,47,495 67.67

Manufacturing, Selling and Administrative Exp.

11,247,331 7,820,703 34,26,628 43.81

Depreciation 1,764,869 1,072,517 6,92,352 64.55Interest 1,742,339 1,130,336 6,12,003 54.14Adjustment for items Capitalized and Departmental orders for own Consumption

-30,271 -164,597 -1,34,326 81.61

Total 24,086,811 17,313,459 67,73,352 39.12


1,452,994 1,392,035 60,959 4.38

Provision for Taxation 457,731 469,964 12,233 -2.60Current Tax - - -Fringe benefit tax - - -Deferred Tax - - -

PROFIT AFTER TAX 995,263 922,071 73,192 7.94Debenture redemption reserve written back

- - -

Profit brought forward from previous year

411,209 343,588 67,621 19.68

PROFIT AVAILABLE FOR APPROPRIATION

1,406,472 1,265,659 1,40,813 11.13

APPROPRIATIONTransfer to General Reserve 500,000 500,000 - -Proposed Dividend on Equity Shares

304,742 304,742 - -

Provision for Dividend Tax 47,319 49,708 -2,389 -4.81Balance carried to Balance 554,411 411,209 1,43,202 34.83

63

Sheet

INTERPRETATIONI Income

The income of the company has been increased by 36.54% in the year 2011 compared to the year 2010. It shows that the raise in income.

II Expenditure

The expenditure of the company has been increased by 39.12% in the year 2011 compared to the year 2010. It shows that the company increase more expenditure cost in the year 2011 when compared to 2010.

III Profit after tax

The profit after tax has been increased by 7.94% in the year 2011 when compared to 2010. It shows that the company earns good profit by using all the resources optimally.

64COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED 31 st March 2008-09 & 2009-10

(Rs. in thousand)


CHANGESIn %

INCOMETurnover(Gross) 19,600,263 2,30,72,056 (3471793) (15.05)Less: Excise Duty 1,096,408 17,99,803 (703395) (39.08)Turnover(Net) 18,503,855 2,12,72,253 (2768398) (13.01)Other Income 201,639 1,35,315 66324 49.01Total 18,705,494 2,14,07,568 (2702074) (12.62)EXENDITUREPurchase of General Merchandise

59,486 35,489 23997 67.62

Raw Material Consumed 8,204,052 93,36,337 (1132285) (12.13)(increase)/ Decrease in Stock-in-Trade

-809,038 (2,08,849) (1010887) 487.38


7,820,703 81,50,137 (329434) (4.04)

Depreciation 1,072,517 8,50,402 222115 26.12Interest 1,130,336 12,33,483 (103147) (8.36)Adjustment for items Capitalized and Departmental orders for own Consumption

-164,597 (1,29,843) (294440) 226.77

Total 17,313,459 1,92,67,156 (1953697) (10.14)


1,392,035 21,40,412 (748377) (34.96)

Current Tax 469,964 9,10,000 (440036) (48.36)Fringe benefit tax - 11,500 -11,500 -100Deferred Tax - (2,46,655) 2,46,655 100

PROFIT AFTER TAX 922,071 14,65,567 -543,496 -37.80Debenture redemption reserve written back

- - - -

,Profit brought forward from previous year

- 4,20,792 -4,2O,792 -100


343,588 18,86,359 (1542771) (81.79)

1,265,659 - - -APPROPRIATIONTransfer to General Reserve 12,50,000 - -Proposed Dividend on Equity Shares

500,000 2,50,242 249758 99.81

Provision for Dividend Tax 304,742 42,529 262213 616.55Balance carried to Balance Sheet

49,708 3,43,588 (293880) (85.53)

65 INTERPRETATION

I Income

The income of the company has been decreased by 12.62% in the year 2010 compared to the year 2009. It shows that the decreased in income.

II Expenditure

The expenditure of the company has been decreased by 10.14% in the year 2010 compared to the year 2009. It shows that the company decrease expenditure cost in the year 2010 when compared to 2009.


The profit after tax has been decreased by 37.80% in the year 2010 when compared to 2009. It shows that the company did not earn good profit by using all the resources optimally.


(Rs. in thousand)


CHANGESIn %

INCOMETurnover(Gross) 2,30,72,056 1,85,27,701 45,44,355 24.53Less: Excise Duty 17,99,803 19,68,714 -1,68,911 -8.58Turnover(Net) 2,12,72,253 1,65,58,987 47,13,266 28.46Other Income 1,35,315 1,56,401 -21,086 -13.48Total 2,14,07,568 1,67,15,388 46,92,180 28.07EXENDITUREPurchase of General Merchandise

35,489 19,899 15,590 78.34


(2,08,849) (2,95,476) -86,627 -29.32


81,50,137 60,36,422 21,13,715 35.02

Depreciation 8,50,402 7,59,209 91,193 12.01Interest 12,33,483 8,03,752 4,29,731 53.46Adjustment for items Capitalized and Departmental orders for own Consumption

(1,29,843) (93,642) 36,201 38.66

Total 1,92,67,156 1,47,08,261 45,58,895 30.99


21,40,412 20,07,127 1,33,285 6.64

Current Tax 9,10,000 5,10,300 3,99,700 78.33Fringe benefit tax 11,500 11,800 -300 -2.54Deferred Tax (2,46,655) 36,700 -2,83,355 -772.08

PROFIT AFTER TAX 14,65,567 14,48,327 17,240 1.19Debenture redemption reserve written back

- 8,06,050 -806050 -100


4,20,792 2,09,186 2,11,606 101.16


18,86,359 24,63,563 -5,77,204 -23.43

APPROPRIATIONTransfer to General Reserve 12,50,000 17,50,000 -5,00,000 -28.57Proposed Dividend on Equity Shares

2,50,242 2,50,242 - -

Provision for Dividend Tax 42,529 42,529 - -Balance carried to Balance Sheet

3,43,588 4,20,792 -77,204 -18.35

67 INTERPRETATION

I Income


II Expenditure





(Rs. in thousand)


CHANGESIn %

INCOMETurnover(Gross) 1,85,27,701 1,57,37,419 27,90,282 17.73Less: Excise Duty 19,68,714 16,51,372 3,17,342 19.22Turnover(Net) 1,65,58,987 1,40,86,047 24,72,940 17.56Other Income 1,56,401 1,43,261 13,140 9.17Total 1,67,15,388 1,42,29,308 24,86,080 17.47EXENDITUREPurchase of General Merchandise

19,899 15,302 4,597 30.04


(2,95,476) (2,38,579) 56,897 23.85


60,36,422 58,01,012 2,35,410 4.06

Depreciation 7,59,209 7,62,804 -3,595 -0.47Interest 8,03,752 7,13,016 90,736 12.72Adjustment for items Capitalized and Departmental orders for own Consumption

(93,642) (24,268) 69,374 285.87

Total 1,47,08,261 1,28,45,348 18,62,913 14.50


20,07,127 13,83,960 6,23,167 45.03

Current Tax 5,10,300 2,58,600 2,51,700 97.33Fringe benefit tax 11,800 11,333 467 4.12Deferred Tax 36,700 99,267 -62,567 -63.03PROFIT AFTER TAX 14,48,327 10,14,760 4,33,567 42.73Debenture redemption reserve written back

8,06,050 - 8,06,050 100


2,09,186 4,14,004 -2,04,818 -49.47


24,63,563 14,28,764 10,34,799 72.43

APPROPRIATIONTransfer to General Reserve 17,50,000 10,00,000 7,50,000 75.00Proposed Dividend on Equity Shares

2,50,242 1,87,681 62,561 33.33

Provision for Dividend Tax 42,529 31,897 10,632 33.33Balance carried to Balance Sheet

4,20,792 2,09,186 2,11,606 101.16

69

INTERPRETATION

I Income


II Expenditure





(Rs. in thousand)


CHANGESIn %

INCOMETurnover(Gross) 1,57,37,419 1,37,71,836 19,65,583 14.27Less: Excise Duty 16,51,372 14,53,958 1,97,414 13.58Turnover(Net) 1,40,86,047 1,23,17,878 17,68,169 14.35Other Income 1,43,261 94,846 48,415 51.04Total 1,42,29,308 1,24,12,724 18,16,584 14.63EXENDITUREPurchase of General Merchandise

15,302 9,616 5,686 59.13


(2,38,579) (1,55,097) 83,482 53.82


58,01,012 48,50,660 9,50,352 19.59

Depreciation 7,62,804 7,60,996 1,808 0.24Interest 7,13,016 7,30,603 -17,587 -2.41Adjustment for items Capitalized and Departmental orders for own Consumption

(24,268) (42,136) -17,868 -42.41

Total 1,28,45,348 1,14,05,339 14,40,009 12.63


13,83,960 10,07,385 3,76,575 37.38

Current Tax 2,58,600 85,000 1,73,600 204.23Fringe benefit tax 11,333 12,200 -867 -7.11Deferred Tax 99,267 2,60,544 -1,61,277 -61.90PROFIT AFTER TAX 10,14,760 6,49,641 3,65,119 56.20Debenture redemption reserve written back

- -


4,14,004 4,03,112 10,892 2.70


14,28,764 10,52,753 3,76,011 35.72

APPROPRIATIONTransfer to General Reserve 10,00,000 5,00,000 5,00,000 100Proposed Dividend on Equity Shares

1,87,681 1,21,683 65,998 54.24

Provision for Dividend Tax 31,897 17,066 14,831 86.90Balance carried to Balance Sheet

2,09,186 4,14,004 14,40,009 12.63

71 INTERPRETATION

I Income


II Expenditure




72 Trend analysis

(Rs. in thousand)

Particulars

2010-11

% 2009-10

% 2008-09

% 2007-08

% 2006-07

% 2005-06

%

Shareholders’ FundsCapital 305,42

0137.

63305,4

20137.

632,50,9

20113.

072,50,9

20113.

072,40,0

45108.

172,21,9

2010

0Equity warrants

- - - 3,34,950

377.45

33,278 37.5 88,740

100

Reserve and Surplus

15,265,132

272.35

14,691,498

262.11

99,11,836

176.84

84,04,090

149.94

69,36,730

123.76

56,05,048

100

Loan Funds:Secured Loans

16,092,062

239.55

8,401,184

125.06

1,46,61,503

218.25

86,70,608

129.07

74,41,398

110.77

67,17,748

100

Unsecured Loans

- - - 7,61,414

480.79

52,340 33.05

1,58,367

100

Net Deferred Tax Liabilities

2,148,748

160.95

1,691,017

126.66

12,21,053

91.46

14,67,708

109.94

14,34,331

107.43

13,35,064

100

Total 33,811,362

239.34

25,089,119

177.6

2,60,45,312

184.37

1,98,89,690

140.79

1,61,38,122

114.23

1,41,26,887

100

APPLICATION OF FUNDSFixed Assets:Gross Block

38,442,328

257.75

31,707,230

212.59

1,93,83,467

129.96

1,68,07,170

112.69

1,57,39,283

105.53

1,49,14,639

100

Less: Depreciation

10,826,337

184.13

9,074,962

154.35

80,18,284

136.38

72,09,382

122.62

65,51,753

111.43

58,79,443

100

Impairment Loss

140,835

74.9 140,835

74.9 1,40,835

74.9 1,40,835

74,90

1,87,451

99.69

1,88,024

100

Net block

27,475,156

310.55

22,491,433

254.22

1,12,24,348

126.86

94,56,953

106.89

90,00,079

101.73

88,47,172

100

Capital Work In Progress

3,824,809

549.9

6,083,947

874.7

1,20,86,352

1737.51

50,33,888

723.66

19,70,586

283.29

6,95,615

100

Investment

1,869,513

122.53

1,869,513

122.53

18,63,513

122.14

16,58,014

108.67

16,00,805

104.92

15,25,755

100

Current assets, Loans & adv.:Inventories

9,626,573

367.19

29,05,528

110.83

40,37,100

153.99

53,24,181

203.08

33,90,551

129.33

26,21,667

100

Sundry Debtors

2,834,779

142.99

11,59,837

58.5 32,28,548

162.85

25,63,505

129.31

22,69,104

114.46

19,82,492

100

Cash and Bank Balance

1,130,084

218.38

10,27,110

198.48

7,64,682

147.77

4,63,607

89.59

3,70,805

71.65

5,17,489

100

Other Current Assets

371,296

164.55

32,676

14.48

2,39,621

106.19

3,40,486

150.89

2,60,942

115.65

2,25,640

100

Loans and Advances

2,537,283

153.9

31,303

1.9 27,80,155

168.63

40,24,216

244.09

21,19,931

128.58

16,48,665

100

Total current

16,500,015

235.85

51,56,454

73.71

1,10,50,106

157.95

1,27,15,995

181.76

84,11,333

120.23

69,95,953

100

73assetsLess: Current Liabilities & Prov.

15,858,131

398.49

-8,41,2

04

-21.1

4

1,01,86,312

255.96

89,91,299

225.93

48,75,108

122.5

39,79,596

100

Net Current Assets

641,884

21.28

59,97,658

28.64

8,63,794

28.64

37,24,696

123.48

35,36,225

117.23

30,16,357

100

Miscellaneous Expenditure:

- -


- - 7,305 17.39

16,139 38.44

30,427 72.46

41,988

100

Total 33,811,362

239.34

87,22,243

61.74

2,60,45,312

184.37

1,98,89,690

140.79

1,61,38,122

114.24

1,41,26,887

100

FINDINGS The liquidity ratio i.e. current ratio and quick ratio of UML are quite

healthy. The company is placed comfortable to fulfill its current obligations.

Reserve to capital ratio of UML has increased from 25.26:1 to 49.98:1 from 2005-06 to 2010-11 which ensure that UML has sufficient reserves which it can use at any point of crises in future time period.

The debtor turnover ratio of UML is also very satisfactory as it is said that higher the ratio, the better it is for the company as it insures quick collection of money from the debtors. It was 5.48 times in the year 2005-06 and increased to 11.2 times in the year 2010-11.

The average collection period of the company should not be more than 90 days. The period was 66 days in 2005-06 then it decreased to 33 days in 2010-11 which is healthy sign for a credit sale making company. It insure that UML is able to collect its debt on time.

The working capital turnover ratio of UML was 4.08 in 2005-06 which increased to 39.4 in 2010-11 which is quite highi.This shows UML is utilizing their working capital efficiently which result increase in the net turnover.

The profitability ratio is also satisfactory. The net profit ratio increased in first three years from 5% to 9% and decreased to 7% in 2008-09 the but 2009-10 it has been increased to 4.98% then in 2010-11 it decreased to 3.94% but the company will recover it in the future.

74 From the comparative analysis, it was found that the test of overall

profitability holds good. From the comparative financial statement (balance sheet and profit and

loss account), the increases or decreases in various assets and liabilities.

75 CONCLUSION Usha martin limited is the only leading company in India and the 2nd

largest company in the world which deals in wire and wire ropes.

The overall financial position of the company is quite healthy during the last six years. The credit for this improvement goes to efficient management, Long-term vision of the management, Team spirit among the employees of the company.

UML is very successful in managing its finance, it has managed all its financial resources to the optimum level.

It is expected that UML will gain a lot, its financial ratio will improve further and so the financial strength of the company.

Today UML is the powerful brand in the market and moving towards becoming the market leader.

76 SUGGESTIONS

UML should focus on the advertisement department. UML should develop proper warehouse. UML should increase the number of employees in finance department. The company has to focus on the reducing cost by reducing the

unproductive expenses. UML tools and machines have become old and obsolete.

77 Limitations of the study

Even though so many tools of analysis are available, but this study uses comparative analysis, trend analysis and ratio analysis only.

This report is based upon the data provided by the officers of the company and financial reports of the company.

Since some facts and business secret’s need to be maintained strictly, it is not possible to collect all the information related to the financial matters of the company.

As it is an external study, conclusion and suggestions are not ultimate and are based on our personal judgment.

78 BIBLIOGRAPHY

Books Referred:

Financial Statement Analysis Jayanta Ghosh

Management Accounting Agarwal & Meheta

Financial Management I M Pandey

Annual Reports from 2005-06 to 2010-11 of Usha Martin Ltd.

Websites Referred:

www.ushamartin.com Google search

THANK YOU

http://www.ushamartin.com/

Documents

Usha Martin Ltd,Ranchi