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ABOUT ISS GROUP WORLDWIDE
Founded in 1901 with more than 200,000 business-to-business customers worldwide, ISS is one
of the world's largest commercial providers of Facility Services. The company has operationsin 53 countries in Europe, Asia, North America, South America and Australia and employs
more than 550,000 people.
In 2008 the ISS Group's annual revenues exceeded DKK 69 billion. ISS's head office is located
in Copenhagen, Denmark.
ABOUT ISS in INDIA
Operating as ISS Integrated Facility Services, since 2005.
Since then has grown inorganically by acquiring close to twelve companies in India. The recentacquisitions being Godrej Hi Care the second largest Pest Management Company In India
and SDB Cisco the second largest security Company in India. With these acquisitions the totalemployee count in India is 45000+
The ISS code of conduct articulates group-wide standards in the areas of:
y Personal conduct of employees
y Anti-corruption and bribery
y
Compliance with competition lawsy Business partner relations
y Workplace standards
y Corporate responsibility
Personal Conduct of Employees
y Employees must comply with the law
y ISS expects its employees to live by the corporate values: honesty, quality, entrepreneurship and
responsibility
y Where no legislation or rules govern personal conduct, each employee must exercise sound
judgement and due careWhenever in doubt, employees should raise their questions with a
superior or another responsible staff member
y Customers, colleagues and other business partners must be treated with respect and fairness
y Harassment, including sexual harassment, is unacceptable at ISS
y ISS demands that employees perform their work without the influence of alcohol or drugs
Anti-Corruption and Bribery
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y ISS is against any form of corruption and bribery and committed to combating such practices
y ISS competes for business on fair terms and solely on the merits of its services
y Regardless of local practice, any personal payments, kick-backs or bribes between ISS and
customers, suppliers or public servants are strictly prohibited
y It is unacceptable to receive gifts or other gratuities from business partners unless customary in
the environment and of a modest value
Compliance with Competition Laws
y Compliance with all applicable competition rules and regulations lies at the heart of ISS business
practice
y ISS does not arrange with competitors to fix prices, allocate services, sales quotas or divide
markets
y ISS does not engage in bid rigging or exchange information on tenders with competitors
y ISS does not discuss competitive issues (such as pricing, discounts, bonuses, sales terms etc.)
with competitors
Business Partner Relations
y ISS will inform its suppliers and customers through appropriate channels about the ISS Code of
Conduct and ask them to take the principles into account in all relevant circumstances
y The ISS service delivery will meet agreed standards for quality, health and safety at customer
sites
y Customer privacy is respected and applicable data protected
y Complaints are addressed effectively, and they are considered a valuable contribution to
constantly ensuring high levels of service
y ISS evaluates its procurement of products and services against the following criteria: Quality,
Efficiency, Environment and Employees (Q3E)
Workplace Standards
y ISS ensures proper working conditions for its employees, including appropriate health and safety
standards
y ISS tolerates no form of discrimination against employees; all employees are entitled to fair and
equal treatment
y ISS respects the freedom of association and the right to collective bargaining; all employees have
the right to join and form trade unions
y ISS uses no forced or compulsory labour
y In accordance with international conventions, ISS avoids employing children
y ISS offers adequate wages, that - as a minimum - comply with local agreements and regulations
y ISS supports the introduction and upholding of minimum wages
y Employees are offered training opportunities relevant to the function they performISS respects
employee privacy and protects applicable data accordingly
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Corporate Responsibility
y ISS respects the United Nations Declaration of Human Rights
y ISS operates according to principles of good corporate governance
y ISS is committed to continuously reducing adverse environmental effects of its operations
y ISS is a member of the United Nations Global Compact and complies with the ten principles of
the compact
y ISS acts as a good corporate citizen in all societies where it operates
y The social, environmental and ethical commitments of ISS must be reflected in all dealings with
customers, employees, suppliers and other stakeholders
y
y In 2005, ISS announced the new strategy, Route 101. Route 101 is a destination plan that
describes ISS in terms of service offerings, organisation, geography, etc. The destination
described in Route 101 is a Facility Services company with revenue of DKK 101 billion.
ISS will continue to work towards this goal following the vision: Lead Facility Services
globally.
y To further operationalise this vision, ISS in the spring of 2007 introduced the ISS
Strategy Plan 2007-2009.
y ISS strategy plan 2007-2009
The ISS Strategy Plan 2007-2009 is not a new direction for the Group. The strategy of
transforming ISS into the leading global Facility Services company remains the same.
The ISS Strategy Plan 2007-2009 further details the initiatives needed to fulfil the vision.
y - Facility Services
ISS continues the process of transforming itself into a Facility Services company. In
response to customer demand, ISS has established operations in security services through
acquisitions in several geographies. To further strengthen its strategic focus on
developing these services, Security, including access control and guarding services, hasbeen added as a fifth pillar in ISSs IFS house as illustrated above. This means that ISS
wants to offer a wide range of services supported by the five pillars of the IFS House:
y > Cleaning
> Office Support
> Property Services
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> Catering
> Security
y Service solutions are offered to the customer as single services, multi services or
Integrated Facility Services (IFS).
y In a single service outsourcing the customer buys one service solution from ISS, e.g.
outsourcing of cleaning or property services. The customer thereby enjoys the benefits ofoutsourcing to ISS and can capitalise on service know-how and best practices, labour
management and handling of all HR issues, procurement benefits, reduced financial
administration of the outsourced service area, increased operational fiexibility, etc.
y In a multi service outsourcing the customer achieves the same benefits as single service
outsourcing only for each outsourced service area as well as benefits of service
integration where possible.
y In an Integrated Facility Services solution ISS takes over all or most of the service
functions at the customers premises, provided the services are within the pillars of the
IFS house. The customer thereby receives the full potential of single service outsourcing
and benefits from an ISS on-site management solution that exploits the synergy potential,and as a result provides the customer with an integrated and cost effective solution.
y Through the acquisitions of broadranged service companies in Germany, Switzerland and
the United Kingdom, ISS is able to provide management of Facility Services. The
acquired capabilities have provided an approach to clients where ISS is able to offer
management of services, delivered either through subcontracting or through own service
provisions depending on the preference of the client.
y An IFS implementation team was established in 2006 with the primary focus of
accelerating the IFS implementation in selected countries. The team consists of four
experienced specialists with an overlying mission of providing operational support in
winning, bidding, transitioning and operating the first IFS contract within a country. Theprioritised countries in 2006 were Spain, Belgium and Switzerland. In 2007, the
prioritised countries are Germany, the Netherlands and Australia.
y - Single service excellence
The foundation for being the leading Facility Services company is a continuous focus on
delivering service excellence in every service area. Going forward, ISS will continue to
focus heavily on developing single service excellence and spreading it throughout the
organisation.
y - Operational efficiency
ISS will seek to maintain and enhance operational efficiency by retaining its focus on
three well-established and prioritised operational objectives for its local managers: (i)cash flow; (ii) operating margin; and (iii) profitable organic growth. In addition, ISS will
focus on reducing the financial leverage on a multiple basis.
y Cash cow
ISSs first objective is to continue to maintain a relatively high rate of cash conversion
primarily by operating in a manner that optimises working capital. Through this
approach, ISS expects to continue to generate a positive free cash flow.
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y Operating margin
ISSs second objective is to maintain or improve its operating margin, which increased
from 5.1% in 2000 to 5.8% in 2006. ISS will seek to generate operational efficiencies by
increasing its local market positions and operational densities, as well as through the
implementation of company-wide best practices.
y Profitable organic growthISSs third objective is to continue to leverage its international market position and
service offering in order to increase its local market positions and drive organic growth.
To do this, ISS established a Sales Excellence Centre in 2006 to create sales systems and
to promote benchmarking and the sharing of best practices between countries. ISS
continues to work with a wide range of initiatives to: (i) attract new customers; (ii)
increase customer retention rates, including through the establishment of dedicated key
account teams; and (iii) cross-sell related services, such as pest control and washroom
services, to existing customers. Additionally, ISS has established a market presence and
operating platforms in selected high-growth economies, particularly in Latin America and
Asia.y Reduce financial leverage
Following the acquisition of ISS A/S by FS Funding A/S, ISS is determined also to seek
to reduce, on a multiple basis, the financial leverage of the FS Funding Group, which
increased as a result of the acquisition. This is expected to be achieved primarily through
growth in ISSs operating profit through a continued focus on cash flow, operating
margin, organic growth and acquisitions. However, as a result of this growth strategy,
ISS expects to incur additional debt in the future. The extent and timing of the FS
Funding Groups deleveraging on a multiple basis will, however, depend upon, among
other things, ISSs cash flow generation and the scale and timing of payments related to
its future acquisition activities, which may temporarily increase its leverage on a multiplebasis in terms of net debt to pro forma adjusted EBITDA.
y - Growth
A wide range of initiatives will underpin organic growth spanning from further
investment in the growth economies of the world via an enhanced sales force and training
to new customer retention initiatives.
y ISS expects to continue to make acquisitions to facilitate its strategy of increasing local
scale and broadening its local service offerings. Since the beginning of 2000, ISS has
acquired and integrated more than 500 businesses, more than 450 of which were
acquisitions of relatively small businesses with annual revenues of less than DKK 100
million (EUR 13.4 million). The two largest acquisitions to date have been Abilis inFrance in 1999 and Tempo in Australia in 2006 which on the date of the respective
acquisitions had estimated annual revenue of approximately DKK 5.2 billion and
approximately DKK 2.9 billion. Apart from Tempo, the two largest acquisitions in 2006
were Edelweiss in Switzerland (estimated annual revenue of DKK 0.7 billion) and
DEBEOS in Germany (estimated annual revenue of DKK 0.5 billion). ISS expects to
continue focusing primarily on smaller acquisitions, which it believes will reduce the
risks relating to individual acquisitions and enable it to leverage the experience of local
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management teams throughout its countries of operation. ISS cannot provide any
assurance, however, that it will not pursue larger acquisitions in the future.
y It is important to emphasize that acquisition driven revenue growth will vary widely from
year to year, among other things depending on opportunities, organisational capability,
financial resources, etc. and thus acquisition speed could deviate significantly from the
range mentioned above.y - Geography
ISS intends to increasingly focus on the BRIC-countries (Brazil, Russia, India and China)
as well as other growth markets, particularly located in Eastern Europe, Latin America
and Asia.
y In 2006, ISS established country operations in Mexico and the Philippines and in January
2007, ISS set up operations in Taiwan. Furthermore, the presence in Turkey was
significantly expanded in 2006 through an acquisition. ISS is currently analysing the US
market in preparation for a possible US entry.
y - Organisation
As a foundation for the strategy plan, ISS is transforming its organisation to allow it tofocus on accelerating the service development. Head office resources focusing
specifically on China and India have been appointed. Organisational resources have also
been added for Eastern Europe, Russia, Australia and Latin America in order to support
the development of these geographies.
y Training and education is key to the strategy plan. ISS will invest even more in these
areas in order to continue to accelerate its transformation towards Integrated Facility
Services.
y - Branding
As a part of the transformation to a global Facility Services company, ISS will invest
further in strengthening the ISS brand across the world.y - Systems and methodologies
ISS will invest further in systems and methodologies. A Corporate Solution, i.e. a
standardised IT-business solution, has been further developed and implemented in a
number of countries. Shared initiatives in a number of areas such as planning tools,
facility service management systems, etc. have been developed and will be implemented
going forward.
y - Acquisitions
ISS considers acquisitions an integral part of the business model. Acquisitions are the
Groups primary means of investing in the business, to develop and refine the business
concept and to continuously improve its competitive strength in an unconsolidatedindustry structure.
y The acquisition process is aimed at creating value for shareholders. The acquisition
process is anchored with local management teams enabling them to take advantage of and
leverage the local presence. The local management team screens the market for potential
targets and builds a pipeline of qualified opportunities. The management teams stay
involved throughout the acquisition process from the very beginning of target
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identification to the final step of the integration in order to make sure that responsibility
and focus on the execution is maintained.
y ISSs mergers and acquisitions department manages the acquisition process, primarily
with respect to valuation of the acquisition and negotiation of the material acquisition
agreements, to the extent that its centralised resources add value. This centralised
department is responsible for quality assurance with respect to all acquisitions and is adriving force with respect to centralised pipeline management in the country
organisations. The centralised pipeline management ensures that each subsidiary
continues to explore acquisition opportunities which would contribute to the achievement
of ISSs objectives. ISSs mergers and acquisitions department is more heavily involved
in all larger acquisitions, and all acquisitions are approved by the Executive Group
Management of ISS A/S. In addition, the approval of the Board of Directors is required
for large or strategic acquisitions. The most important element of Group involvement is
in the assessment of country readiness for acquisitions as well as strategic screening and
valuation of acquisitions. On a discounted cash flow basis a total value of the target is
estimated by assigning value to six independent components.
y
y 1.Stand alone value of the target
2.Value of expected contract losses
3.Value of expected margin improvements
4.Value of expected financial synergies
5.Value of expected cost synergies
6.Value of expected future organic growth
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y The Group operates with three key valuation indicators. First, Return on Investment
(ROI) and price multiples are assessed and measured up against appropriate
benchmarks varied according to size, industry segment, geography, etc. Second, the time
structure of the MVA and the EVA break-even horizon is assessed. In addition to the
mentioned valuation parameters a range of other criteria are employed on a discretionary
basis.y
ACHIEVEMENT:
y ISS India operation is ISO 9001:2000 certified and have over 47000 employees. A
Service to meet all your Business Needs & a complete End to End Solution
y ISS is into Five major businesses globally Facility Services, Property Services,Catering Services, Security Services and Support Services. International Association
of Outsourcing professionals (IAOP) ranked ISS 6th in 2010 for its demonstrated
competencies
THEORITICAL BACKGROUND
MEANING OF RATIO: -
A ratio is a simple arithmetical expression of the relationship of one number to
another. According to Accountants Handbook by Wixon Kell and Bedford, a ratio is
an expression of the quantitative relationship between two numbers . In short it can be
defined as the indicated quotient of two mathematical expressions. The ratios can be
expressed in 1) Percentages 2) fraction and 3) Proportion of numbers.MEANING OF RATIO ANALYSIS: -
Ratio Analysis is a technique of analysis and interpretation of financial statements.
it is defined as the systematic use of ratios to interpret the financial statements so that
the strengths and weaknesses of a firm as well as its historical performances and current
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financial condition can be determined. There are a number of ratios which can be
calculated from the information given in the financial statements, but the analysts has to
select the appropriate date and calculate only a few appropriate ratios from the same
keeping in mind the objectives of analysis.
The following four steps involved in the ratio analysis: -
1. Selection of relevant data from financial statements depending upon financial
analysis.
2. Calculation of appropriate ratios.
3. Comparison of the calculated ratios of the same firm in the past or the ratios
developed from projected financial statements to the ratios of some other firms
or the comparison with ratios of the industry to which firm belonged.
4. Interpretation of ratios.
INTERPRETATION OF RATIOS: -
The interpretation of ratios is an important factor. Though calculation of ratios is
also important but it is only a clerical task whereas interpretation needs skill,
intelligence and foresightedness. The impacts of factors such as price level changes,
change in accounting policies, window dressing etc should be kept in mind when
attempting to interpret ratios. The interpretation of ratios can be made in followingways: -
1. 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.
2. Inter firm comparison: - The ratios of one organization may be compared with
the ratios of the 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.
3. The ratios of an organization may be compared with some standards, which
may be supposed to be the thumb-rule for the evaluation of the performance.
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CLASIFICATION OF RATIOS: -
The ratios may be classified under various ways, which may use various criterions
to do the same. However for the convenience purpose, the ratios are classified under
following groups.
1. Liquidity group
2. Turnover group
3. Profitability group
4. Solvency group and
5. Miscellaneous group
LIQUIDITY GROUP:
The ratios computed under this group indicate the short-term position of the
organization and also indicate the efficiency with which the working capital is being
used. Commercial banks and short-term creditors may be basically interested in the
ratios falling under this group. Two most important ratios may be calculated under this
group.
1) Current Assets: -
It is calculate as, Current Assets/Current Liabilities
Current ratio indicates the backing available to current liabilities in the form of
current assets. In other words, higher current ratio indicates that there are sufficient
assets available with the organization, which can be converted in the form of cash. A
current ratio of 2:1 is supposed to be standard and ideal
.
2) Liquid Ratio or Acid Test Ratio: -
It is calculated as, Liquid Assets/Liquid Liabilities
Here liquid assets include all assets except inventory and p/p exps and liquid
liabilities except overdraft or cash credit or o/s exps.
Liquid ratio indicates the backing available to liquid liabilities in the form of
liquid assets. The term liquid assets indicate the assets, which can be converted in the
form of cash without any reduction in the value. Almost immediately whereas the term
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liquid liabilities which are required to be paid almost immediately. In other words, a
higher liquid ratio indicates that there are sufficient assets available with the
organization, which can be converted in the form of cash almost immediately to pay off
those liabilities, which are to be paid off almost immediately. As such higher the liquid
ratio better will be the situation. A liquid ratio of 1:1 is supposed to be standard and
ideal.
TURNOVER GROUP:
Ratios computed under this group indicate the efficiency of the organization to
use the various kinds of assets by converting them in the form of sales. Under this
group the following classification of ratios are made.
1) Fixed Assets Turnover Ratio: -
It is calculated as, Net Sales/Fixed Assets
A high fixed assets turnover ratio indicates the capability of the organization to
achieve maximum sales with the minimum investment in fixed assets. It indicates that
the fixed assets are turned over in the form of sales more number of times.
2) Current Assets Turnover Ratio: -
It is calculated as, Net Sales/Current Assets
A high current assets turnover ratio 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 in the form of sales more number of times.
3) Working Capital Turnover Ratio: -
It is calculated as, Net Sales/Working Capital
A high working capital turnover ratio indicates the capability of the
organization to achieve maximum sales with the minimum investment in the working
capital. It indicates that working capital is turned over in the form of sales more number
of times.
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4) Inventory or Stock Turnover Ratio: -
It is calculated as, Cost of Goods Sold/Avg. Inventory
A high inventory turnover ratio indicates that maximum sales turnover is
achieved with the minimum investment in inventory. As such as a general rule, high
inventory turnover ratio is desirable.
5) Debtors Turnover Ratio: -
It is calculated as, Net Credit Sales/Closing Sundry Debtor
This ratio indicates the speed at which the sundry debtors are converted in
the form of cash. However the intention is not correctly achieved by making the
calculation in this way. As such this ratio is normally supported by the calculation
period, which is calculated as below.
a) Calculation of Daily Sales: -
It is calculated as, Net Credit Sales/No of Working Days
b) Calculation of Collection Period: -
It is calculated as, Closing Sundry Debtors/Daily Sales
The average collection period as computed above should be compared with
the normal credit period extended to the customers. If the average collection period is
more than the normal credit period allowed to the customers, it may indicate over
investment in debtors which may be the result of over extension of credit period,
liberalization of credit term, ineffective collection procedure and so on.
6) Capital Turnover Ratio: -
It is calculated as, Sales/Capital Employed
This ratio indicates the efficiency of the organization with which the capital
employed is being utilized. A high capital turnover ratio indicates the capability of the
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organization to achieve maximum sales with minimum amount of capital employed. As
such higher the capital turnover better will be the situation.
SOLVENCY GROUP
Ratios computed under this group indicate the long-term financial prospects
of the company. The shareholders debenture holders and other lenders of long-term
finance/ term loan may be basically under this group. Following ratios may be
computed under this group.
1) Debt-equity Ratio: -
It is calculated as, External Liabilities/.Shareholders Fund
Debt-equity ratio indicates the state of shareholders or owners in the
organization vis--vis that of the creditors. It indicates the cushion available to the
creditors on liquidation of the organization. A high debt-equity ratio may indicate that
financial status of the creditors is more than that of the owners. A very high debt-equity
ratio may make the proportion of investment in the organization a risky one. On the
other hand a very low debt equity rate may mean that the borrowing capacity of the
organization is being underutilized.
2) Proprietary Ratio: -
It is calculated as, Total Assets/Owners Fund
This ratio indicates the extent to which the owner s funds are sunk in
different kinds of assets. If the owner s fund exceeds fixed assets, it indicates that a part
owners fund invested in the current assets also and if owners fund are less than fixed
assets it indicates that the creditors finance a part of fixed assets either by long term or
short term.
3) Capital Employed Ratio: -
It is calculated as, Fixed Assets *100/Capital Employed
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This ratio indicates the percentage of net sales, which is absorbed by the
operating cost. A high operating ratio indicates that only a small margin of sales is
available to meet the expenses in the form of interest, dividend and operating exps. As
such low operating ratio will always be desirable.
OVERALL PROFITABILITY GROUP
1) Return on Assets: -
It is calculated as, Net Profit *100/Assets
Return on assets measures the profitability of the investment in a firm.
As such higher return on assets will always be preferred. However Return on assets
does not indicate the profitability of various sources of funds, which finance total
assets.
2) Return on Capital Employed: -
It is calculated as, Net Profit after taxes+Int on Long Term Loans*100/Capital Employed
Return on capital employed measure4s the profitability of the capital
employed in the business. A high return on capital employed indicates a better and
profitable use of long-term funds of owners and creditors. As such a high return oncapital employed is preferred.
3) Return on Shareholders Funds: -
It is calculated as, Net Profit after Taxes*100/Total Shareholders Funds
This ratio indicates the profitability of a firm in relation to the fund
supplied by the shareholders
MISCELLANEOUS GROUP
1) Capital Gearing Ratio: -
It is calculated as, Fixed income-bearing securities/Equity Capital
A high capital-gearing ratio indicates that in the capital structure, fixed income bearing
securities are more in comparison to the equity capital in that case the Company is said
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to be highly geared. On the other hand, if fixed income-bearing securities are less as
compared to equity capital the company is said to be lowly geared.
2) Earning Per Share: -
It is calculated as, Net Profit after tax and dividend/Number of equity shares o/s
It is widely used ratio to measure the profit available to the equity
shareholders on a per share basis. As such increasing Earning Per Share may
indicate the increasing trend of current profits per equity share.
3) Dividend Payout Ratio: -
It is calculated as, Dividend Per Share *100/Earning Per Share
It measures the relationship between the earnings belonging to the
equity shareholders and the amount finally paid to them by way of dividend. It
indicates the policy of management to pay cash dividend.
ADVANTAGES OF RATIOS
1. Ratios simplify the comprehension of financial statements. They tell the whole
story as a heap of financial data is condensed in them. They indicate thechanges in the financial condition of the business.
2. They act as an index of the efficiency of enterprise. As such they serve as an
instrument of management control. It is an instrument for diagnosis of the
financial health of an enterprise. The efficiency of the various individual units
similarly situated can be judged through inter-firm comparisons.
3. The ratio analysis can be if invaluable aid to management in the discharge of its
basic functions of forecasting, planning, co-ordination, communication and
control. A study of the trend of strategic ratio may help the management in this
respect. Past ratios indicate trends in cost, sales, profit and other relevant facts.
4. The ratio analysis provides data for inter-firm comparison or intra-firm
comparison. Comparison cannot be made with absolute figures. Net profit of
one firm cannot be compared with the net profit of the other firm. But the
percentages of net profits can be compared to evaluate the performance.
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Similarly performance and efficiency of different departments in the same firm
can be compared with the help of ratios.
5. Investment decisions can at times be based on the conditions revealed by certain
ratios.
6. They make it possible to estimate the other figure when one figure is known.
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LIMITITIONS OF RATIO ANALYSIS
Though ratio analysis technique has got number of advantages, it attracts equal
number of disadvantages too. Some of important advantages are as follows:
1) The ratios of the other organization May not be readily available.
2) Different accounting policies may be followed by the constituent organization
in the industry.
3) The constituent organization in the same industry may vary from each other in
terms of age, location, extent of automation, quality of management and so on
4) The technique of ratio analysis may prove to be inadequate in some situation if
there is difference of opinions regarding the interpretation of certain items while
computing certain ratios.
5) As the ratios are computed on the basis of financial statements, the basic
limitation, which is applicable to the financial statements, is equally applicable
in case of the technique of ratio analysis also.Thus the ratio analysis points out the financial condition of business whether
it is very strong, good, questionable or poor and enables the management to take
necessary steps.
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RESEARCH METHODOLOGY
DATA COLLECTION
a) Primary Data: -
Primary data related to the project was collected from the discussion and
interaction with the senior employees and executives in the organization from
Accounts and Finance department.
b) Secondary Data: -
Secondary data was collected from the documents, which were in printed
forms like annual reports, pamphlets, reference books based on Financial
Management and through websites.
METHODOLOGY FOR ANALYSIS
The methodology opted for carrying out project was by way of collection of data
from the company s annual reports for the past three years i.e. from 2003-2004 to
2005-2006, for the calculation of ratios. The theory related to ratios was gathered
from various financial management books, which served the purpose of calculation
and analysis of ratios. Further based on the above statements ratios related to
liquidity, turnover, solvency, profitability and over profitability groups and
miscellaneous groups have been calculated and interpreted in an intra firm
comparison method. Similarly the ratios have been presented in graphical format to
have clear understanding of it during three financial years and changes in it.
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RATIO ANALYSIS
LIQUIDITY GROUP
1) Current Ratio: -
2) Acid Test Ratio: -
TURNOVER GROUP
1) Fixed Assets Turnover Group
2) Working Capital Turnover Ratio: -
3) Current Asset Turnover Ratio
4) Capital Turnover Ratio: -
5) Inventory Turnover Ratio: -
SOLVENCY GROUP
1) Debt-Equity Ratio:
2) Proprietary Ratio: -
3) Capital Employed Ratio:-
PROFITABILITY RATIOS
1) Gross Profit Ratio: -
2) Net Profit Ratio: -
3) OVER PROFITABILITY GROUP
1) Return on Assets:
2) Return on Capital Employed: -
3) Return on Shareholders Fund: -
MISCELLANEOUS GROUP
1) Capital Gearing Ratio: -
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NOTES FORMING PART OF THE PROJECT REPORT1. Debtors for sale of assets has not been considered which has been dulymentioned in the schedules.
2. While considering long term loans for capital gearing ratio interest accrued onloans has not been considered.3. While considering net sales, returns from sales has been deducted from gross
sales.4. Gross profit is calculated by deducting manufacturing expenses from Net Sales.
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