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1. INTRODUCTION TO PRECISE ENGINEERS PVT. LTD.
We are supplying components for direct export to many exporters and export houses and O.E’s for
exports to Germany, Italy, Syria, U.K etc items manufactured are hoed!spline rolled, shafts, and pins,
center pins and top lin" assy. #omponents le$eling rod assy. #omponents flanges, gear lan"s, ushes,
cast pulleys machined S.G iron castings, con rods and axles etc
1.1. ABOUT PEPL:
Suppliers and manufacturers of tractor spare parts li"e cross shaft, hoo", for", arm, pull rod.
1.2. PEPL specializes:
%E%& speciali'es in precision machining of casting, forgings ( ar stoc" from a $ariety of metal type.
We pro$ide engineered solutions for our customers, minimi'ing set)up time, reducing cycle time (
scrap and pro$iding synchronous material flo*.
1.3. Services o PEPL:
%E%& pro$ide tailor made solutions to end users, y designing and manufacturing of +etallic and on)
+etallic -ello*s, Expansion oints, /ampers, 0lange 1daptors, /ismantling oints etc through our
ethical philosophy to maintain solid ond *ith them y commitment in the 2uality, timely deli$ery of
our products at most competiti$e price and rendering after sale ser$ices at all the time
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1.!. Co"pa#$ Proile:
-usiness type 4 +anufacturers!Suppliers
5ear estalished 4 3678
+emers affiliates4 +ohali industries association 9+I1:
Standard certification4 ISO 6;;34 industrial area, phase)=. S.1.S agar +ohali ) 38;;?6 %un@a, India.
#ontact person 4 +r. +.% /ogra 9+anaging /irector '
1.(. PEPL serves &)e ollo*i#+ c,s&o"ers:
Govt. and defense/ railways
Tractors and combines Automotives
LCV’s and heavy truck
Medicare
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1.7. -is&or$ o precise e#+i#eers Pv&. L&.
Estalished in 3678, *ith years of exclusi$e experience, %recise Engineers %$t. &td 9%E%&: speciali'es
in precise machining of castings, forgings ar, stoc" itemsA for customers in tractors, automoti$es, hea$y
truc"s, B’s, defense and rail*ays.
Che company is ISO 6;;34
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1.. issio# visio# o Precise E#+i#eers Pv&. L&:
Co ecome our customer’s preferred supply partners.
Co achie$e rea"through performance and continuous impro$ement in meeting customers o@ecti$es. Co achie$e gloal competiti$eness on 2uality, ser$ice, deli$ery, and $alue.
Co form an alliance *ith professionally managed inno$ati$e product manufacturers, engineering
consultants, contractors and indenting agents and importers!distriutors for their sourcing and
mar"eting needs.
D
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1.10. Board of directors:
Set-up reduction team:
Members:
M. !o"ra #$n"ineerin" mana"er/ com%any director &team leader'(
Man)itsin"h #$n"ineerin"/system co*ordinator/ %ro"rammer(
Tilak ra) kondal #General %lant foreman(
SO !001:"000 #ua$it% s%stem audit team:
Members:
M. !o"ra #$n"ineerin" mana"er/com%any director &team leader'(
+alwinder ,in"h #$n"ineer- M./system co*ordinator(
Gautam ,harma #$n"ineer- .C- section inchar"e(
&s factor% or'ani(ation team:
Members:
+.% /ogra Engineering manager!company director 9Ceam leader:F
-al*indersingh Engineer, +.r!system co)ordinatorF -idhichand Engineer, 2uality controlF
."@oshi +anager accountsF
2. RESE4RC- ET-ODOLOD5:
?
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It can e define as a systematic and orderly procedure or process for attaining some o@ecti$e.Chese processes constitute a generic frame*or". Chey may e ro"en do*n in su)processes, they
may e comined or their se2uence may change. Ho*e$er any tas" exercise must carry out these
processes in one form or another. It may e description of process or may e expanded to include a
philosophically collection of theories, concept or ideas as they related to a particular discipline or field of in2uiry.
2.1. O67ECTIVE O8 STUD5:
Co study the origin and gro*th of %recise Engineers %$t. &td.
Co study the financial %osition and sol$ency position of precise engineers %$t. &td.
Co study the progress of the firm o$er a period of time.
9Ti"e perio o s&,$ &)ree $ears 2;1;
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information to "eep on record, to ma"e decisions aout important issues, to pass information ontoothers.
/ata collection is the act of assemling and gathering the needed information in the context of a
specified research. Chere are many techni2ues of data collection ut the *ay used in the present
research is the est suitale. Che data re2uired for analysis may e primary or secondary.
2.!. SECOND4R5 D4T4:
Secondary data is the data that ha$e een already collected y and readily a$ailale from the other
sources. Such data are cheaper and more 2uic"ly otainale than the primary data and also may e
a$ailale *hen primary data cannot e otained at all.
".&.4DV4NT4GES O8 SECOND4R5 D4T4:
3. It Is Economical
. It is time sa$ing.D. It helps to impro$e the understanding of the prolem.
?. It pro$ides a asis for comparison for the data that is collected y researcher .
2.(. DIS4DV4NT4GES O8 SECOND4R5 D4T4
3. Secondary data is something that seldom fits in the frame*or" of the mar"eting research factors.
easons for its on) fitting are, Unit of secondary data collection suppose you *ant information
on disposale income, ut the data is a$ailale on gross income. Che information may not e same
as *e re2uire.
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• Un)official /ata -an"s
2./. SOURCES USED IN T-E STUD5.• -alance sheets
• 1nnual reports
• ournals
• -oo"s
• esearch eports
2.. ST4TISTIC4L TOOLS USED IN T-E STUD5:Che Statistical tools used in the study are 1ccounting atio’s, -ar /iagrams, %ie #harts, &ine
charts etc.
2.1;. LIIT4TION O8 T-E STUD5:
It is important to state the limitation to "no* the extent of reliaility of the study. Che main
limitations are as4
• /ue to shortage of time it *as difficult to collect data.
• Che study is ased on secondary data, thus there are a fe* limits ecause of this.
/. T)O,U*TO O STATEMET A*AL AALSS:
0inancial Statement 1nalysis is the classification of data in simple form gi$en in financial statements
and compare the data *ith each other to find out the strong points and *ea"ness of the usiness and tota"e decisions for future. 0or instance, if all items relating to current assets are placed in one group *hile
all items relating to current liailities are placed in another group, the comparison et*een the t*o
groups *ill pro$ide useful information. 1ctually the figures gi$en in financial statements do not spea" anything themsel$es. Che analysis of these figures helps the interested reader y gi$ing tongue to these
mute heaps of figures.
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3.1. 8i#a#cial 4#al$sis "a$ also 0e e>plai#e as:• Che assessment of the effecti$eness *ith *hich funds *hich are employed in a firm,
• Efficiency and profitaility of its operations,
• Che $alue and safety of detorsJ claims against the firmJs assets.
It employs techni2ues such as Jfunds flo* analysisJ and financial ratios to understand the
prolems and opportunities inherent in an in$estment or financing decision.
I# &)e *ors o 8i##e$ a# iller
“Financial analysis consists in separating facts according to some definite plan,
arranging them in groups according to certain circumstances and then presenting them
in a convenient and easily read and understandable form.”
I# &)e *ors o 7o)# N. $res
“Financial statement analysis is largely a study of relationships among the various
financial factors in a business, as disclosed by a single set of statements and a study of
the trends of these factors as shown in a series of statements.”
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!.1. Proi& Loss 4cco,#& o Precise e#+i#eers Pv&. L&. 2;1;,?>D,?;D.;; 3D,3?6,?D8.;3 3=,3= pe#se:
3. current tax
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!.2. 6ala#ce s)ee& o Precise E#+i#eers Pv&. L&. 2;1; B 2;13'
Che tale elo* sho*s the consolidated -alance Sheets of precise engineers %$t. &td. for four consecuti$e
years i.e.
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9a: In$entories >;,3;?,?>>.;; >?,>36,6?8.;; >=,D>D,?=.=89: Crade recei$ales ?,?33,;>D.?D 7,6
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&.".
3>
Par&ic,lars 2;11 2;12 40sol,&e
c)a#+e
c)a#+e
E,i&$ a# lia0ili&ies
S)are)olers ,#s
Share capital
eser$es and surplus
8,;;8 9>>8D6=6.>8: 9>D.=:
No#>8,>6>.?D 3=,8?7,6 9=,7,8=
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(. Tre# a#al$sis:
Che financial statements may e analy'ed y computing trends of series of information. Chis methoddetermines the direction up*ards or do*n*ards and in$ol$es the computation of the percentage relationship
that each statement item ears to the same item in the same
5ear.
(.1. E>pe#ses:
1232 1233 1231 1234
2.22
32-222-222.22
12-222-222.22
42-222-222.22
52-222-222.22
62-222-222.22
72-222-222.22
82-222-222.22
92-222-222.22
:2-222-222.22
322-222-222.22
75-:94-887.:6 76-545-16:.:9
97-8:7-:86.95 :2-325-699.28
E4penses
$;%enses
Par&ic,lars 2;1; 2;11 2;12 2;13
E>pe#ses (!@/3@==(.% (%@!3!@2%./ /(@=(@=%./! ;@1;!@%//.;=
I#&erpre&a&io#:
Che ao$e figure represents the total expenses in precise engineers p$t. &td. for the period of four yearsi.e.
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(.2. Reve#,e:
1232 1233 1231 1234
2.22
32-222-222.22
12-222-222.22
42-222-222.22
52-222-222.22
62-222-222.22
72-222-222.22
82-222-222.22
92-222-222.22
:2-222-222.22
322-222-222.22
75-:94-888 76-43:-946
97-8::-147 :2-352-:16
re5enue
revenue
Par&ic,lars 2;1; 2;11 2;12 2;13
Reve#,e (!@/3@==(.
%
(%@31@/3%.32 /(@=@23%./( ;@1!;@2%.!2
I#&erpre&a&io#:
Che ao$e figure represents the total re$enue of precise engineers %$t. &td. for the period of four yearsi.e.
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(.3. I#ve#&or$:
1232 1233 1231 12342.22
6-222-222.22
32-222-222.22
36-222-222.22
12-222-222.22
16-222-222.22
42-222-222.22
46-222-222.2252-222-222.22
56-222-222.22
42-326-644.22
46-43:-:67.2249-545-611.94
51-645-:49.97
in5entor%
inventory
Par&ic,lars 2;1; 2;11 2;12 2;13
I#ve#&ories 3;@1;%@%33.;; 3%@31@%(.;; 3/@!3!@%22./3 !2@%3!@3/./(
I#&erpre&a&io#: Che ao$e figure represents the in$entories of precise engineers p$t. &td. for the period of three yearsi.e.
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(.!. C,rre#& asse&s:
1232 1233 1231 12342.22
32-222-222.22
12-222-222.22
42-222-222.22
52-222-222.22
62-222-222.22
72-222-222.22
82-222-222.22
48-693-21:.78
57-:81-249.44
65-946-994.9:
73-232-998.14
current assets
current assets
Par&ic,lars 2;1; 2;11 2;12 2;13
C,rre#&
asse&s
3=@%/1@;2.(
=
!(@=2@;3/.33 %!@/3%@//3./ (1@;1;@//=.23
I#&erpre&a&io#:
Che ao$e figure represents the current assets of precise engineers %$t. &td. for the period of three yearsi.e.
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(.%. C,rre#& lia0ili&ies:
1232 1233 1231 1234
2.22
32-222-222.22
12-222-222.22
42-222-222.22
52-222-222.22
62-222-222.22
72-222-222.22
41-484-3:5.:7
53-268-492.8356-336-7:4.96
64-::4-6:9.2:
current $iabi$ities
current liabilities
Par&ic,lars 2;1; 2;11 2;12 2;13
C,rre#&
lia0ili&ies
32@3=3@1!.
(
!1@;%=@3/;.=1 !%@11%@(3./% %3@3@%/.;
I#&erpre&a&io#:
Che ao$e figure represents the current liailities of precise engineers %$t. &td. for the period of three
years i.e.
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=.1. ea#i#+ o ra&io:
1 ratio is simple arithmetical expression of the relationship of one numer to another. It may e defined as theindicated 2uotient of t*o mathematical expressions.
4ccori#+ &o FOTLER - “ A ratio is the relationship of one amount to another.” For e.g. We take two variables ‘a ! ‘b. When they are e"pressed as ratio of a to b# a$b or as a simple
fraction of percentage it is termed as a ratio.
=.2. Ra&io a#al$sis:
atio analysis is the techni2ue of analysis and interpretation of financial statement. In other *ords it is the process of identifying the financial strength and *ea"nesses of the firm y properly estalishing, relationships
et*een the items of alance sheet and profit ( loss account. It is the process of estalishing and interpreting
$arious ratios for helping in ma"ing certain decisions. Ho*e$er ratio analysis is not an end in itself. It is only ameans of etter understanding of financial strength and *ea"nesses of the firm. #alculations of mere ratios do
not ser$e any purpose, unless se$eral appropriate ratios are analy'ed and interpreted.
4ccori#+ &o 6a&&$ 7 “%atio can assist management in its basic functions of forecasting, planningcoordination, control and communication”.
=.3. Nee i"por&a#ce o ra&io a#al$sis:atio analysis is one of the most common and important techni2ue to analy'e the financial position of the firm.
It is helpful to "no* aout the li2uidity, sol$ency, capital structure and profitaility of an organi'ation. It is
helpful tool to aid in applying @udgment, other*ise complex situations.
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1. 4#al$zi#+ i#a#cial s&a&e"e#&s:
atio analysis is an important techni2ue of financial statement analysis. 1ccounting ratios are useful for
understanding the financial position of the company. /ifferent users such as in$estors, management, an"ers
and creditors use the ratio to analy'e the financial situation of the company for their decision ma"ing purpose.
2. 7,+i#+ eicie#c$:
1ccounting ratios are important for @udging the companyJs efficiency in terms of its operations and
management. Chey help @udge ho* *ell the company has een ale to utili'e its assets and earn profits.
3. Loca&i#+ *ea#ess:
1ccounting ratios can also e used in locating *ea"ness of the companyJs operations e$en though its o$erall
performance may e 2uite good. +anagement can then pay attention to the *ea"ness and ta"e remedialmeasures to o$ercome them.
!. 8or",la&i#+ pla#s:1lthough accounting ratios are used to analy'e the companyJs past financial performance, they can also e used
to estalish future trends of its financial performance. 1s a result, they help formulate the companyJs future plans.
%. Co"pari#+ peror"a#ce:
It is essential for a company to "no* ho* *ell it is performing o$er the years and as compared to the other
firms of the similar nature. -esides, it is also important to "no* ho* *ell its different di$isions are performingamong themsel$es in different years. atio analysis facilitates such comparison.
=.!. Li"i&a&io#s o ra&io a#al$sis:
atios are simple to calculate and easy to understand, they suffer from serious limitations4
1. Li"i&e ,se o si#+le ra&io: 1 single ratio usually does not con$ey much of a sense. Co ma"e a etter interpretation a numer of
ratios ha$e to e calculated, *hich is li"ely to confuse the analyst then help him in ma"ing meaningful
conclusion.
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2. Lac o ae,a&e s&a#ar: Chere are no rule accepted standards on rules of thum for all ratios *hich can e accepted as norms.It renders interpretation of the ratios difficult.
3. I#)ere#& li"i&a&io# o acco,#&i#+: &i"e financial statements ratios also suffer from the inherent *ea"ness of accounting records such as
their historical nature. atios of the past are not necessarily true indications of the future.
!. C)a#+e o acco,#&i#+ proce,re:#hange in accounting procedure y a firm often ma"es ratio analysis misleading e.g. a change in the
$aluation of methods of in$entories from 0I0O to &I0O increases the cost of sales and reduces
consideraly the $alue of closing stoc" *hich ma"es stoc" turno$er ratio to e lucrati$e and an
unfa$orale gross profit ratio.
%. Hi#o* ressi#+:0inancial statements can easily e *indo* dressed to pre$ent a etter picture outside. Hence one has to
e $ery careful in ma"ing a decision from ratios calculated from such financial statements. -ut it may
e $ery difficult for an outsider to "no* aout the *indo* dressing made y a firm.
(. Perso#al 0ias:atios are only means of financial analysis and not an end in itself. atios ha$e to e interpreted and
different people may interpret the same ratio in different *ays.
=. I#co"para0le: ot only industries differ in their nature ut also the firms of the similar usiness *idely differ in their
si'e and accounting procedures. It ma"es comparison of ratios difficult and misleading. +oreo$er
comparisons are made difficult due to differences in definition of $arious financial terms used in ratio
analysis.
/. 40sol,&e i+,res is&or&e:atio de$oid of asolute figures may pro$e distort as ratio analysis is primarily 2uantitati$e analysis
and not a 2ualitati$e analysis.
!. Price $e5e$ c6an'es:While ma"ing ratio analysis no consideration is made to the changes in price le$els and this ma"es the
interpretation of ratios in$alid.
1;.Ra&ios #o s,0s&i&,&es:
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atio analysis is merely a tool of financial statement. Hence, ratios ecome useless *hen separated
from the statements from *hich they are computed.
/. Classiica&io#@ a#al$sis i#&erpre&a&io# o ra&ios:
/.1. 8,#c&io#al classiica&io# o ra&ios:
Li,ii&$
ra&ios
Solve#c$Alevera+e
ra&ios
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3. #urrent
atio
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8i#a#cial
$ears
2;;
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8i#a#cial
$ears
2;;
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De0&
e,i&$
ra&io
!.;! %.;3( !.;32 %.!3
E>&er#al
e,i&$
32@3=3@1!.( !1@;%=@3/;.=1 !%@11%@(3./% (1@;1;@//=.23
I#&er#al
e,i&$
/@;;=@;2;.;; /@1%1@!!;.=! 1@11/@/(;2.=( 11@22!@!;.11
122:*32 1232*33 1233*31 1231*34
2.22<
3.22<
1.22<
4.22<
5.22<
6.22<
7.22<
5.25<
6.25<
5.24<
6.54<
debt e#uit% ratio
debt e=uity ratio
I#&erpre&a&io#:/et)e2uity ratio of the firm is highest in *hich indicates that amount from detors are collected
more 2uic"ly. It sho*s less ris" of ad dets, lesser expenses of collection and more li2uidity.
ii3 Proprie&ar$ ra&io:Chis ratio indicates the proportion of the total assets *hich are financed y o*ners. It is calculated y
di$iding proprietor’s funds y total assets.
Proprie&ar$ e,i&$' ra&io J s)are)oler ,#sA&o&al asse&s
8i#a#ci<
al $ears
2;;
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S)are
)oler
,#s
/@;;=@;2;.;; /1@%1@!!;.=! 11@1//@(;2.=( 11@22!@!;.11
To&al
asse&s
(!@==@(%%.23 =%@212@2;!.3% /=@!@1;.1/ ;@313@/=;.%2
122:*32 1232*33 1233*31 1231*34
2.22<
2.21<
2.25<
2.27<
2.29<
2.32<
2.31<
2.35<2.31<
2.32<
2.34< 2.31<
proprietar% ratio
%ro%rietary ratio
I#&erpre&a&io#:
Chis ratio sho*s the extent to *hich shareholders o*n the usiness. %roprietary ratio of 343 is
considered as an ideal ratio.
iii3 Solve#c$ ra&io: Chis ratio is a small $ariant of e2uity ratio and can e simply calculated. Chis ratio indicates the
relationship et*een the total liailities to outsiders to total assets of the firm
Solve#c$ ra&io J &o&al lia0ili&ies &o o,&siersA &o&al asse&s
8i#a#cial
$ears
2;;
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To&al
lia0ili&ies
!=@%=@!!(.= %(@=3@1%/.2% (3@==3@(1/.;( (@%/@%=;.;%
To&al
asse&s
(!@==@(%%.3 =%@212@2;!.3% /=@!@1;.1/ ;@313@/=;.%2
122:*32 1232*33 1233*31 1231*34
2.7:<
2.82<
2.83<2.81<
2.84<
2.85<
2.86<
2.87<
2.88<
2.89<
so$5enc% ratio
solvency ratio
I#&erpre&a&io#:Chis ratio helps to ascertain the aility of the firm to pay its long)term liailities in time. Generally, lo*er the
ratio, more satisfactory or stale is the long)term sol$ency position of a firm. Here sol$ency ratio of the firm hasremained more or less constant o$er the period of analysis *hich indicates a stale sol$ency position of the firm
in the long term.
S,++es&io#s:
Che profit Of the #ompany Is not in a good %osition 0or Chat company has to Ca"e 1lternati$e 1ctions such
as4
i. %roduction, and control in expenses li"e, administrati$e, selling etc.
ii. Che firms ha$e lo* current ratio so it should increase its current ratio *here it can meet its short
term oligation smoothly.
iii. . &i2uidity ratio of the firm is not etter li2uidity position in o$er the three years. So i suggested
that the firm maintain proper li2uid funds li"e cash and an" alance.
i$. It should enhance its employee’s efficiency, more training needed to its employees in order to
increase its production capacity and minimi'e mista"es *hile performing the tas"s, also more safety
precaution need to implement to the employees *ho directly *or"ing on sugar production process.
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$. Che firm is ha$ing high in$entory so i suggested that the firm must reduce the stoc" y increase
sales.
$i. Che direct material cost of the firm is $ery high so it’s my ad$ice to the firm that to decrease the
direct material cost y purchasing ra* material from the other suppliers.
$ii. Che firms should ha$e proper chec" on the manufacturing process of the plant.
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Co#cl,sio# :<
Chis pro@ect of financial statement analysis in the production concern is not merely a *or" of the pro@ect. -ut a
rief "no*ledge and experience of that ho* to analy'e the financial performance of the firm. Che studyunderta"en has rought in to the light of the follo*ing conclusions. 1ccording to this pro@ect I came to "no*
that from the analysis of financial statements it is clear that precise engineer &td. Ha$e een incurringloss during the period of study. So the firm should focus on getting of profits in the coming years y ta"ing care
internal as *ell as external factors
