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PROJECT REPORT ON

“ANALYSIS OF FINANCIAL STATEMENTS”

SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT, CHIKODI.

WITH SPECIAL REFERENCE TO

Unit- 1 EXECUTIVE SUMMARY
 Importance Of Financial Statement Analysis  Need For The Study  Objectives Of The Study  Methodology Of The Report  Scope Of The Study  Limitations Of The Study  Review Of Literature  Statement Of The Problem  Hypothesis

2 COMPANY PROFILE World Sugar Industry Scenario Indian Industry Profile Company Profile Product Profile .Unit.

Unit 3 THEORETICAL FRAMEWORK ON FINANCIAL STATEMENT ANALYSIS.          Definition Of Financial Statement Nature Of Financial Statements Conventions Uses And Importance Of Financial Statements Limitations Of Financial Statements Parties Interested In Financial Statements Analysis And Interpretation Of Financial Statements Types Of Financial Statements Tools Of Financial Analysis Used In The Study -.-Comparative Financial Statements – -Common-Size Financial Statements – -Trend Analysis – -Ratio Analysis .

.Unit -4 DATA ANALYSIS AND INTERPRATION     Calculation Calculation Calculation Calculation of Comparative financial statements. of Trend analysis. Of Trends of Financial Statements. of Common-size statements.

Suggestions & Recommendations And Conclusion  ANNEXTURE  BIBLIOGRPHY .Unit -5 Findings.

S.N. consistent and comparable. .K. complete. creditors.Importance of Financial statement Analysis – Financial statement analysis is very helpful in knowing the sugar factories internal operations and its relations with the outside world. The debenture holders. employees and government can also use the financial statements for different purposes. – The accuracy of the financial statement can be identified from the report of the auditors. An attempt has been made to analysis the financial statement of D. – The present project seeks to discuss the framework for invest ment & financing decision and also helps to expound several analytical methods which are in practice.K. The investors relay on the financial statement and judge the factory and ensure that these statements are correct. sugar factory. The financial statement analysis can be used by investors for deciding about their investments.S.

S. Secondary Method The methodology followed in conducting the study is to collect data regarding Sugar production in Shree Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit.METHODOLOGY OF THE REPORT COLLECTION OF DATA  There are two methods of collection of data which are as follows:1. Primary Method 2.N. The secondary data is obtained from the following.  Collection of required data from annual records. Primary Method The primary data was not a part of my study. internal Published book or profile of D. monthly records. .K. Chikodi. my every interpretation and analysis is fully based in secondary data. 2.S.Chikodi.K. -Use of Internet. -Other books and Journals and magazines -Annual Reports of the company. Secondary Method 1.

NEED FOR THE STUDY  To calculate the important financial terms of the organisation as a part of the financial analysis thereby to understand the changes the needs and trends in the firm’s financial position.  To give the appropriate suggestions to the investors. To help them to make more informed decisions.  To identify the financial strengths and weaknesses of the organization.K.S.  To assess the performance of D.K on the basis of earnings and also to evaluate the solvency position of the company.S. .

 Analyze the performance of a company using trend analysis. .OBJECTIVES OF THE STUDY  To understand an item wise study of the company financial performance of the company. comparing.  To provide factual and interpretative information about transaction and other events which are useful for prediction.  To provide information about the financial position. common-size financial statements and ratio analysis.  Locate and use sources of information about company performance. and evaluating enterprise’s earning power. performance and changes in financial position of an enterprise that are useful to wide range of users in making economic decision.

S.N.K.  .K.S.N Chikodi.       Scope of the study is limited up to the availability of official records and Information provided by the employees.K.K. so as to find the effect of each component on decisionmaking.S.S. Thus a good deal of ground is covered in the study.N in the Indian Market & State Market in Particular. The industry and competitors analysis were not considered while preparing the project. The Study also highlights the present scenario of the Sugar Industry in the global market as a whole and the contribution of D. including the trends of various components of financial statements.SCOPE OF THE STUDY  The present study is undertaken with an intention that it would be helpful in assessing the financial position in the organization and to make recommendations for the improvement of requirements of D.K. The scope of the study is identified after and during the study is conducted.S. That is from accounting period from 2008 to 2012.S.K. Common-Size Financial Statements and Trend Analysis Further the study is based on last 5 years Annual Reports of D. The study of financial statement analysis is based on tools like Comparative Financial Statements.

HYPOTHESIS: Three important hypotheses can be formulated from the interpretation of data.  The application of the analysis and interpretation can spark towards the success or improper implementation may hinder it.  Proper judgement with financial analysis would make it easy to management with correct decision making. the following findings were made:  Proper analysis of financial statements may enhance the profitability and solvency position of the industry. .STATEMENT OF THE PROBLEM: The statement of problem is pertained to “THE STUDY OF FINANCIAL STATEMENT ANALYSIS” AT “SHREE DOODHAGANGA KRISHNA SAHAKARI SAKKARE KARKHANE NIYAMIT CHIKODI” is directed towards evaluation of FINANCIAL STATEMENT ANALYSIS to ensure higher profitability. liquidity and sound structural health of organization.

K. deliberately. . Moreover. the study was limited to five years only with a view to getting fuller and correct information of the D. The selection of the years is conditioned by mere convenience of the research study.K.S.S.N Chikodi.PERIOD OF REFERENCE The study is conducted with reference to the cooperative years 2008 to 2012.

 The study will be only a provisional one based on the data collected from the report and accounts during the period and it is subject to refinement.S.  The economic and government policies etc.  The project is based on five year annual reports of the company. may affect the industry after the study which is not taken into consideration.  The information is confined only with D.K.e. .  Non-availability of confidential financial data. There were limitations for the primary date.K.LIMITATIONS OF THE STUDY  The project has completed with annual report i.S... secondary data. Hence it cannot be generalized to the entire sugar industry. It is difficult to collect the data regarding competitor and their financial information.

The slope of the trend equation is also positive  There is polite increase in the current assets and fixed assets every year in the 5 years of the project undertaken indicating that the slope of the trend is positive analysis for the factories future. This is acceptable and shows the positive trend as the costs rises year to year. Net profit has increased fairly and consistently during these 5 years. .Findings  Profit is the main motto of any undertakings.  There is an increasing trend in the cash & bank balances.  The liability named other banks over draft payables have been fully cleared during 2010 which shows factory is processing and running smoothly and flawlessly.  The inventory has varied year to year. The increase in cash and bank is essential to meet the increased costs of overhead. There is healthy trend analysis analysed during the conduct of this project. This is proportional to the demand in the market for the products of that company.

 During the year 2008 the company’s financial statements showed a loss of nearly 3.Findings Cont.  There has been slowly but effectively increase in the investments in the later half of these 5years of project study. assets and liabilities are also increasing year by year.  Total capital and amount of income statements..28 crore with heavy tax adding to the amount of loss and after the hiccup the stood tall and was dealing in heavy profits in the next 4 years till the date.e. working capital loan which has increased nearly 2 folds from the beginning of 2008 till 2012 which is quite important and vital analysis..58% from 3334726 in 2010 to 32966491 in 2011. Reserves and Surplus has been continuously increasing in a trend without any fall in all the 5 years..  The life blood of a factory i.  Repair and maintenance expenses have been continuously increasing from 2008 to 2012 where management has to play an active role.  Miscellaneous expenses have been the highlight in the year 2011 interpretation which has been considerably increased by 888. The additional working capital has been bought from outside as a Working capital loan. .

. Whereas in 2008 there has been a huge loss.17.  Quick ratio of the company is not so consistent to meet its short term debt obligations  Except in the year 2009 and 2010 factory has generated a good amount of revenue with a decent utilization of its capital. And in the year 2011-12 again there is increment in the ratio by 0.Findings Cont..  The Gross Profit ratio is showing continuously a mixed trend which shows that a company is losing its productivity in maintaining its gross profit margin.74. This simply indicates that the liquidity position of the company is weak. In 2011 it has decreased by 5.  The Net profit ratios calculated indicate the net margin of company decreasing for last 4 years.  The inventory turnover of the company over the period of five years has remained stable more or less.  A standard current ratio is 2:1 which company does not stand to the task of being in the standard ratio. It is because of increase in indirect expenses..

 Inventory should be perfectly managed so as to process of the factory should not be obstacled by scarce of raw materials needed at the time and place in the quantity needed. in keeping in view of the availability of the funds for day-to-day operations to get more returns.  The capital employed or investment should be properly utilised by the DKSSK to increase its return on investment and total assets. It should not depend on long-term funds as they involve higher interest payments. But the company highly followed conservative approach.  Generally an ideal company will try to maintain an average working capital policy rather too conservative or too aggressive.SUGGESTIONS AND RECOMMENDATIONS:  To ensure higher profitability.  The company should try to set orders from other customers other than permanent Customers so that company could get economy of scale and reduce cost of Production to maximize its profit. . liquidity and sound structural health of organization it is essential to use the sources of funds and cash effectively.  The company should finance some parts of its currents assets with shortterm funds. It can be suggested that the company should develop an optimum working capital policy.

 Current ratio is fair below the standard ratio of 2:1 so company should initiate urgent steps to improve current ratio by reducing current liabilities. .  Assets turnover ratio is very weak indicating poor performance of assets which may be seriously viewed and necessary actions should be taken.  Quick liquid position of the firm is not up to the mark.  The investment in loans and advances should be minimized to possible extent..SUGGESTIONS AND RECOMMENDATIONS contd. short term liquidity position and rate of return on capital employed. The firm should take necessary steps immediately to improve long term solvency. the company has to concentrate on short term obligation to improve their liquidity position of the firm..  The company has to find out new source of funds for introducing new investment opportunities. The liquid liabilities surpasses liquid assets.

775 in 2008 i.462 less than what was in 2008 decreasing by 6.058. 2012 remain healthy with total income of Rs 359. This data also reflects that employee have their job as well pay satisfaction during these years. it was amounting 44. This growth was driven primarily by increase in sales.14%. Sale of power by Co-generation unit.699 for the year 2008 and surprisingly with the decent amount of profit generated from it. a significant increase of 40. Financial statements provide an account of a company’s past performance. The financial performance during the year ended 31st March. sale by distillery unit and the main product of DKSSKN through sale of tones together of sugar by sugar unit.23% over the period of just four years which is quite notable and appreciable.974 against 256.CONCLUSION  Understanding financial statements is key to fundamental stock analysis and overall investment research.  On the basis of analysis of financial statements of DKSSKN Chikodi we may conclude that overall working stability .e. . wages and bonus.. a picture of its current financial strength and a glimpse into the future potential of a firm.531.807. operating expenses mainly consists of salary.382.  Operating expenses has been managed optimally which is an highlight of my study undertaken operating expenses have never been out of hands as throughout all the 5 years it has hardly moved out of the charts.soundness have improved over the years. expenses have never increased to a notable point as in 2012 statements showed operating expenses amounting 42. It’s clear the management has played an active and participative role in its operations.

In these times DKSSKN has stood tall in such a cut throat competition with several other factories surrounding it. . Chikodi this factory has been producing sweet in life’s of many people through its qualitative sugar for nearly 44 years established in 1969. Factory has a bright future in coming times. As rightly said “Customers are kings of markets” the undertakings vision is concerned towards “Total customer’s satisfaction” which shows its intent towards society and its real assets that is human assets.CONCLUSION  Shree Doodhaganga Krishna Sahakari Sakkare Karkhane Niyamit.  With the analysis of DKSSKN financial statements lastly it can be concluded that factory has a great potential and capacity with all the needed resources.

com/ (Indian sugar mills association.org http:// www.slideshare.scribd.com/commodity/Sugar http://www. 5.) http://www.oecd. 4.com Book References:     1.investopedia. Pandey Financial Management by M Y Khan and P K Jain Annual Report of the company.investopedia. Volume V Issue No. 2. 54 February 2013 .com http:// WWW. Magazines:  Magnum connect magazine Feb 2013 – for industrial profile.agriculturesnetwork. Financial Management by I.indiansugar. Financial Management by Dr.com http:// www.com http://www.com http://www.BIBLIOGRAPHY Internet Url References:          http://www.investorwords.M.wikinvest.Ravindra Diwan.org http://www.