Final Project of Ratio

CHAPTER-I

INTRODUCTION

M.I.M-KALAMB-WALCHANDNAGAR 2010-2012Page 1

1.1 INTRODUCTION

MEANING OF RATIO:

A relationship be HI-TECH en various accounting figures, which are connected with each

other, expressed in mathematical terms, is called accounting ratios.

DEFINITION:

1)According to Kennedy and Macmillan, "The relationship of one item to another

expressed in simple mathematical form is known as ratio."

2)Robert Anthony defines a ratio as – "simply one number expressed in terms of

another."

Accounting ratios are very useful as they briefly summaries the result of

detailed and complicated computations. Absolute figures are useful but they do not

convey much meaning. In terms of accounting ratios, comparison of these related figures

makes them meaningful. For example, profit shown by two-business concern is Rs.

50,000 and Rs. 1, 00,000. It is difficult to say which business concern is more efficient

unless figures of capital investment or sales are also available.

Analysis and interpretation of various accounting ratio gives a better understanding of the

financial condition and performance of a business concern.

A ratio is simple arithmetical expression of the relationship of one number to another. It

may be defined as the indicated quotient of two mathematical expressions.

According to Accountant’s Handbook by Wixon, Kell and Bedford,

“A ratio is an expression of the quantitative relationship bet HI-TECH en two

number.”


MEANING OF FINANCIAL RATIO ANALYSIS:

Financial Ratio Analysis:-

Ratio analysis is the process of determining and presenting the relationship of items and

group of items in the statements.

According to Batty J. Management Accounting:

“Ratio can assist management in its basic functions of forecasting, planning

coordination, control and communication”.

It is helpful to know about the liquidity, solvency, capital structure and profitability

of an organization. It is helpful tool to aid in applying judgments, otherwise complex

situations.

. Ratio analysis is one of the techniques of financial analysis to evaluate the financial

condition and performance of a business concern. Simply, ratio means the comparison of

one figure to other relevant figure or figures.

According to Myers, “Ratio analysis of financial statements is a study of relationship

among various financial factors in a business as disclosed by a single set of statements

and a study of trend of these factors as shown in a series of statements."

Ratio analysis is the method or process by which the relationship of items or group

of items in the financial statement are computed, determined and presented.


1.2 NEED OF THE STUDY

Horizhantal analysis- the a analysis is to long a year to year comparison of a

firm ratios

Vertical analysis- the comparison of balance sheet accounts either using ratios

or not to get use full information and draw use full consultation

Cross-selection analysis- ratio are used and compared between several firms

of the same industry in other to draw conclusion about and entity’s profitability

and financial performance

Inter firm analysis- can be categorized under cross sectional as the analysis is

done by using some basic ratios of the industry in which the firm under analysis

belongs to ( and specifically the average of all the firm of the industry ) as bench

mark or basis for our firms overall performance evaluations

1.3COMPANY PROFILE


INTRODUCTION

HI-TECH Engineering Corporation India Private limited is a well known name

in field of Turnkey sugar plant, Boilers with co generation and turnkey switchyards.

With a team of more than 125 skillful qualified and experienced professionals and 350

skilled labor force; HI-TECH ensures to deliver the highest quality and optimum

satisfaction of client.

HI-TECH designs, manufactures and executes the turnkey sugar plants including

cane mills, boilers with cogeneration and turnkey switchyards. Now HI-TECH are also

exporting sugar plant equipments to Africa.

HI-TECH are committed to provide quality product to client and ISO 9001-2008

certification ensures the quality and integrity in every equipment HI-TECH manufacture

at our workshop. With the constant focus on design, QC and R&D, HI-TECH make sure

that our clients get the best value and quality products.

VISSION

Considering the demand of manufacturing sector, wants to fulfill

present and future market potential by providing quality Sugar and

cogeneration plants on turnkey basis.

MISSION


Our Mission is to provide our customer cost effective quality product with the latest

technology, thus satisfying every criteria.

VALUES

The values that define our culture are:

Innovation across the whole company.

Be committed, reliable & credible.

Create value products for our customers.

Create value for all our stakeholders & customers.

PRODUCT RANGE

Turnkey Sugar Plant

HI-TECH provide turnkey Sugar Plants with Co-Generation. Presently, HI-TECH are

designing and setting up a Sugar Plant with a capacity of 7500 TCD with 35 MW co-

generation along with four more project.

Boiler & Cogeneration

HI-TECH are executing boilers up to 180 TPH steam generating capacity at

87Kg/Sq.Cm, pressure 520 C Temperatures. HI-TECH can manufacture water tube & fire

tube boilers, waste heat recovery boiler and fluidized bed combustion boilers.

Turnkey Switch yards for Co-generation

HI-TECH are turnkey supplier of Co-generation units and is executing 18 MW & 35 MW

Co-generation unit. All electrical equipments and system required for the plant are

developed in-house.

Cane Mills

HI-TECH can design, Manufacture, Supply and Erection & Commission various sizes of

milling of High performance along with Pressure Feeders from 22” X 44” Mills to 45”X

90” Mills.

Coal & Baggage handling System

HI-TECH have separate department for baggage, Coal & Ash handling in cogeneration


projects.

Authorized dealers of Sugar Cane harvester

QUALITY POLICY HI-TECH at Engineering Corporation India Pvt. Ltd. as

an Organization and as individuals, commit ourselves to supply Cost effective Quality

Machineries with fairness & Honesty in Sugar Industries on Turn Key basis, Steam

Generators and Cogeneration Plants, according to customer needs and provide services to

their expectations through our experienced team, skills, and innovative technology.

Quality and its implementation is an integral Part of HI-TECH. The Management is

committed to ensure that everybody in the organization understands & implements the

quality policy & contributes in continual improvement of the Quality Management

System.

Quality Objectives

Customer Satisfaction index up to min 80%.

Resolution of Customer Problems within 48 business hours.

On time Project Execution.

Zero accident at works centre.

COLLABORATION “Our Focused approach on latest technology with best

technical know – how and expertise ensures the quality product delivery and optimum

satisfaction of clients”

BMA, Germany (Order to order basis)

DINAMIC OIL, Italy

DESMET Distillery Plants


HI-TECH are the developers of the world famous Fire CAD – Boiler Design

Software. Fire CAD suite of software was developed by its technical director Mr.

Narasimha Patrudu.

Sr. No.

NAME OF CLIENT YEAR DETAILS

1 Baramati Agro Limited 2007 10tph Fire Tube Boiler

2 Baramati Agro Limited 2008 120tph Boiler for Sugar Plant

3 Saikrupa Sugars Limited 2008 180tph Boiler for Sugar Plant

4 Samrudhi Sugars Limited 2008 60tph Boiler for Sugar Plant

5 Jakraya Sugars Limited 2009 70tph Boiler for Sugar Plant

6 Shivsagar Sugars Limited 2009 110tph Boiler for Sugar Plant

7 Oasis Alcohol Ltd 2010 20tph Boiler for Distillery 100%Coal Fired


8Maharashtra Shetkari Sugars Ltd

2010 50tph Boiler for Sugar Plant

EXPORT PROJECT

Sr.

No.NAME OF CLIENT YEAR DETAILS

1 Wonji Sugar Plant, Ethiopia 2009 45tph Boiler for Sugar Plant

2 Shoa Sugar Plant, Ethiopia 2009 45tph Boiler for Sugar Plant

Turkey sugar plant

HI-TECH manufactures Turnkey Sugar Plant with Cogeneration. Now HI-TECH are

manufacturing Sugar Plant having capacity of 7500 TCD with 35 MW Cogeneration.

Currently HI-TECH are exporting sugar plants to Ethiopia.

HI-TECH ADVANTAGE – BOILING HOUSE & GENERAL

PARAMETERS ADVANTAGE HI-TECH REASON

MANPOHI-TECHR

REQUIREMENT

152 FOR A 1500 TO 4200 TCD

PLANT AUTOMATION

RETURN ON

INVESTMENT

BREAK EVEN WITHIN 3 YEARS

OF OPERATION

REFERENCE: 1500 TCD

PLANT IS IN

OPERATION AT 3500

TCD


STEAM

CONSUMPTION 38% ON CANE CRUSHED

USED FLASH VESSELS,

OSV & OTHER STEAM

SAVING DEVICES

POHI-TECHR

CONSUMPTION

22 KW PER TON OF CANE

CRUSHED REFERENCE :

ACHIEVED 3400 TCD CRUSHING

WITH 3 MW TURBINE

GENERATOR SET

100 % INLINE

PLANETORY GEAR

BOXES, SCREW PUMPS

& VFDS

LIFE OF PLANT LONG LASTING

ROBUST DESIGN & BEST QUALITY MATERIAL AND WORKMANSHIP

OUR ACHIEVEMENT IN 1st SUGAR PLANT HI-TECH entered the industry by

modifying existing Sugar Plant by making significant changes to the Milling plant of

the existing sugar plant.

HI-TECH have totally changed total mill drive system with unique Inline

planetary gear box, Rope Coupling and ACVFD drive; Our planetary drive is

highly energy efficient compact as HI-TECH ll as with very low maintenance

operation of drive system with very less noise. This system is used first time in

India.

Adding over HI-TECH used all inline planetary gearbox (Dynamic Oil Italy

Make) for all carriers as HI-TECH ll as for feeder table and getting advantage of

HI-TECH saving.

All pumps for magma, molasses and mesquite are screw pumps which are highly

energy efficient as compared to Rota pump.

HI-TECH have used OSV (Overflow Surplus Valve) by that HI-TECH saved lot

of steam consumption.

HI-TECH have done centralized Grease lubrication system


BAL has achieved 3000Tonne crushing on cane in one day and 3MW HI-TECH

when the plant equipped with all electrical drives; itself is record to crush more

than 3000Tonnes using 3MW HI-TECH.

Entire Plant was completed in record time of 7 months.

Boiling house is operating at 38%of steam.

CANE MILLS

HI-TECH are capable to supply milling Plant from 500TCD to 12000 TCD.

HI-TECH have already commissioned mill size 33X66 & 42X84.

36X78 & 45X90 is under execution

COMPARISN PARAMETERS

HI-TECH MILLING PLANT

CONVENTIONAL MILL WITH

HELICAL PLANETORY

CIVIL COST

VERY LESS COMPARED TO

CONVENTIONAL AS HI-TECHLL AS

TANDOM WITH INDIAN

PLANETARY

VERY HIGH HIGH

HI-TECHIGHT OF MILL DRIVE

SYSTEM AROUND 13 TON 30 TO 40 TON AROUND 25 TON

EFFICIENCY 95% AROUND 70 % AROUND 80 %

SPACE REQUIREMENT

COMPACT DESIGN RESULTS IN VERY

LESS SPACE

HUGE SPACE REQUIREMENT

HIGH SPACE REQUIREMENT

DUE TO BIG GEAR BOX AND

FORCED


LUBRICATION SYSTEM

LUBRICATION REQUIRED

400 LITRES VERY HIGH 1200 LITRES

SPARE PARTS INVENTORY

VERY LESS AS MOVING PARTS ARE VERY LESS

AND WITH BETTER

METALLURGY

MANY SPARE PARTS REQUIRED

MANY SPARE PARTS

REQUIRED DUE TO POOR

METALLURGY OF MOVING

PARTS

NOISE CREATED COMPARED TO

PIN DROP SILENCE VERY HIGH HIGH

RELIABILITY

100 % RELIABLE AS EACH PART IS

TAKEN CARE COMPLETELY

WHILE INSTALLATION

RELIABLE VERY LESS

POHI-TECHR CONSUMPTION

LEAST VERY HIGH HIGH

INSTALLATION TIME

QUICK INSTALLATION IS

POSSIBLE LONGEST LONG

MAINTENANCE & OPERATION

USER FRIENDLY TEDIOUS PROCESS

TIME CONSUMING


Inline Planetary GEAR BOX in Our Sugar Mills

HI-TECH are Pioneers in India to Launch the Inline Planetary Gear Box instead of

conventional Mill Gearing System for Mill Drive which saves the HI-TECH loss in

transmission. Also it reduces the overall Cost of foundation for mills.

HI-TECH ADVANTAGE – MILLING PLANT

Sr. No.

NAME OF CLIENTYEA

RDETAILS

1 Baramati Agro Ltd. 2007 Sugar Plant 1500 TCD (Commissioned)

2 Baramati Agro Ltd. 2008Sugar Plant 4200 TCD with 18 MW Cogeneration (Commissioned)

3 Samruddhi Sugar Ltd. 2008Sugar plant 2500 TCD with 8 MW Cogeneration (Under Commissioned)

4 Sai Krupa S. K. Ltd. 2008Sugar Plant 7500 TCD with 35 MW Cogeneration (Under Execution)

5Dadra Nagar HI-TECH Sahakari Khand Udhyog

2007 Sugar Plant 1250 TCD (Under Commissioned)

6Shree Shivsagar Sugar & Agro Products Ltd.

2009 Sugar Plant 2500 TCD (Under Execution)

7 Jakaraya Sugars Ltd. 2009Sugar Plant 2500TCD With 12 MW Cogeneration (Under Execution)

8Shreenath Mastoba S.K. Ltd., Pateshan

2003 (Commissioned)

9 Maharashtra Shetkari Sugars Ltd.

2010 Sugar Plant 3500TCD with 20 MW Cogeneration


EXPORT PROJECT

Sr. No.


1Wonji Sugar Ltd (Ethiopia)

2009 Rehabilitation

2Shoa Sugar Ltd (Ethiopia)

2009 Rehabilitation


Research & Development

Our R & D Department is staffed with well qualified and skilful

experienced person. They are engaged in various R & D activities like problem

identification, problem recognition, and thinking of various alternatives for the

solution and carry out design exercise to improve the product. Defect investigation and

defect rectification are also part of R & D Department.

The R&D Department is also responsible to develop new equipments to meet specific

need of user. The R&D Department uses the world class technology while caring our new

technology.

Our R & D Dept. is developing product to solve agriculture problems and also

developing product for defense purpose.


CURRENT PROJECTS IN HAND

Sr. No.


1Baramati Agro Ltd. (1st Phased)

2007 Sugar Plant 1500 TCD (Commissioned)

2Baramati Agro Ltd. (2nd Phased)

2008Sugar Plant 4200 TCD with 18 MW Cogeneration (Commissioned)

3 Samruddhi Sugar Ltd. 2008Sugar plant 2500 TCD with 7 MW Cogeneration (Under Commissioning)

4 Sai Krupa S. K. Ltd. 2008Sugar plant 7500 TCD with 35 MW Cogeneration (Under Execution)

5Dadra Nagar HI-TECH Sahakari Khand Udhyog

2007Sugar Plant 1250 TCD (Under Commissioning)

6Shree Shivsagar Sugar & Agro Products Ltd.

2009 Sugar Plant 2500 TCD (Under Execution)

7 Jakaraya Sugars Ltd. 2009Sugar Plant 2500TCD With 12 MW Cogeneration (Under Execution)

8Shreenath Mastoba S.K. Ltd., Pateshan

2003 (Commissioned)

9 Oasis Alcohol Ltd 201020TPH steam generation at 45Kg/Sq.Cm pressure and 4400C temp. For Distillery Unit.

10Maharashtra Shetkari Sugars Ltd.

2010Sugar Plant 3500TCD with 20 MW Cogeneration


EXPORT PROJECT

Sr. No.


1 Wonji Sugar Ltd (Ethiopia) 2009 Rehabilitation

2 Shoa Sugar Ltd (Ethiopia) 2009 Rehabilitation

OUR ACHIEVEMENT IN 1st SUGAR PLANT

HI-TECH entered the industry by modifying existing Sugar Plant by Making

significant changes to the Milling plant of the existing sugar plant.

HI-TECH have totally changed total mill drive system

with unique Inline planetary gear box, Rope Coupling and

ACVFD drive; Our planetary drive is highly energy efficient

compact as HI-TECH ll as with very low maintenance

operation of drive system with very less noise. This system is

used first time in India.

Adding over HI-TECH used all inline planetary gearbox (Dynamic Oil Italy

Make) for all carriers as HI-TECH ll as for feeder table and getting advantage of HI-

TECH saving.

All pumps for magma, molasses and mesquite are screw pumps which are highly

energy efficient as compared to Rota pump.

HI-TECH have used OSV (Overflow Surplus Valve) by that HI-TECH saved lot

of steam consumption.

HI-TECH have done centralized Grease lubrication system

BAL has achieved 3000Tonne crushing on cane in one day and 3MW HI-TECH when

the plant equipped with all electrical drives; itself is record to crush more than

3000Tonnes using 3MW HI-TECH.


CHAIRMAN(Sanjay Awate)

SANJAY AWATE

SHRIKANT DESHMUKH

(DIRECTOR)

General Manager (Finance) kishor sir

(kisM.G.GODBOLE

Account Purchase Store (R.M & Central

Design

Sr. ManagerKISHOR SHINDE

ManagerSANTOSH PANCHWAGH

JAYANT INGOWLE (DIRECTOR)

Officers

OfficersOfficers

N.PATHRUDN (DIRECTOR)

Marketing

RAJENDRA INGOWLE(DIRECTOR)

BOARD OF DIRECTOR


CHAPTER-II

LITERATURE REVIEW


REVIEW OF LITERATURE

2.1 INTRODUCTION

Ratio Analysis can be defined as the study and interpretation of relationships bet HI-

TECH en various financial variables, by investors or lenders. It is a quantitative

investment technique used for comparing a company's financial performance to the

market in general. A change in these ratios helps to bring about a change in the way a

company works. It helps to identify areas where the management needs to change.

2.2 CLASSIFICATION OF RATIO:

CLASSIFICATION OF RATIO

BASED ON FINANCIAL BASED ON FUNCTION BASED ON USER

STATEMENT

1] BALANCE SHEET 1] LIQUIDITY RATIO 1] RATIOS FOR

RATIO 2] LEVERAGE RATIO SHORT TERM

2] REVENUE 3] ACTIVITY RATIO CREDITORS

STATEMENT 4] PROFITABILITY 2] RATIO FOR

RATIO RATIO SHAREHOLDER

3] COMPOSITE 5] COVERAGE 3] RATIOS FOR

RATIO RATIO LONG TERM

CREDITORS


2.3 BASED ON FINANCIAL STATEMENT:

Accounting ratios express the relationship between figures taken from financial

statements. Figures may be taken from Balance Sheet, P& P A/C, or both. One-way of

classification of ratios is based upon the sources from which are taken.

1] Balance sheet ratio:

If the ratios are based on the figures of balance sheet, they are called Balance

Sheet Ratios. E.g. ratio of current assets to current liabilities or ratio of debt to equity..

2] Revenue ratio:

Ratio based on the figures from the revenue statement is called revenue statement

ratios.

3] Composite ratio:

These ratios indicate the relationship between two items, of which one is found in

the balance sheet & other in revenue statement.

2.4 BASED ON FUNCTION:

Accounting ratios can also be classified according to their functions in to liquidity

ratios, leverage ratios, activity ratios, profitability ratios & turnover ratios.

1] Liquidity ratios:

It shows the relationship between the current assets & current liabilities of the

concern e.g. liquid ratios & current ratios.

2] Leverage ratios:

It shows the relationship between proprietors funds & debts used in financing the

assets of the concern e.g. capital gearing ratios, debt equity ratios, & Proprietary ratios.

3] Activity ratios:

It shows relationship between the sales & the assets. It is also known as Turnover

ratios & productivity ratios e.g. stock turnover ratios, debtor’s turnover ratios.

4] Profitability ratios:

It shows the relationship between profits & sales e.g. operating ratios, gross profit

ratios, operating net profit ratios, expenses ratios

5] Coverage ratios: It shows the relationship between the profit on the one hand & the

claims of the outsiders to be paid out of such profit e.g. dividend payout ratios & debt


service ratios.

2.5 BASED ON USER:

1] Ratios for short-term creditors:

Current ratios, liquid ratios, stock working capital ratios

2] Ratios for the shareholders:

Return on proprietors fund, return on equity capital

3] Ratios for management:

Return on capital employed, turnover ratios, operating ratios, expenses ratios

4] Ratios for long-term creditors:

Debt equity ratios, return on capital employed, proprietor ratios.

I] LIQUIDITY RATIO:

The liquidity ratio measures the firm’s liquidity and its ability to meet its maturing short

term obligations. It is defined as the ability to realize value in money, the most liquid of

assets. It refers to the ability to pay in cash, the obligations that are due. The quantitative

aspects includes the quantum, structure and Utilizations of liquid assets and in the

qualitative aspect, it is the ability to meet all present and potential demands on cash from

any source in a manner that minimizes cost and maximizes the value of the firm.


. These ratios are discussed below

1) Current ratio:

Meaning:

This ratio compares the current assets with the current liabilities. It is also known as

‘working capital ratio’ or ‘solvency ratio’. It is expressed in the form of pure ratio.

The current ratio 2:1 shows highly solvent position.

Current ratio = Current assets

Current liabilities

2) Liquid / Quick / Acid test ratio:

Liquid ratio is also known as acid test ratio or quick ratio. Liquid ratio compares the

quick assets with the quick liabilities. It is expressed in the form of pure ratio. E.g. 1:1

Generally, a quick ratio of 1:1 is considered good.

Liquid ratio = Liquid current assets

Liquid liabilities

3) Cash ratio:

Meaning:

This is also called as super quick ratio. This ratio considers only the absolute liquidity

available with the firm. The cash & bank balance are the most liquid assets. The ideal

cash ratio is taken as 1:2. It is calculated as follows

Cash + Bank + Marketable securities

Cash ratio =

Total current liabilities


II] LEVERAGE RATIOS:

Leverage ratios lay emphasis on long term financial prospects. In order to assess the long

term financial soundness it is necessary to find out whether the organization is able to

maintain or increase the market value of its shares. The long term financial stability of the

firm may be considered as dependent upon its ability to meet all its liabilities, including

those not currently payable.

1) Debt equity ratio:

This ratio is calculated to measure the comparative proportions of outsiders’ funds and

shareholders’ funds invested in the company. It indicates how many rupees have come

from borrowing from every rupee of shareholders funds.

Debt equity ratio = Long term debts

Equity

2) Shareholders equity ratio:It is assumed that larger the proportion of the shareholders equity, the stronger is the

financial position of the firm. This ratio will supplement the debt equity ratio. In this ratio

the relationship is established between shareholders funds and the total assets.

Shareholders equity ratio = Shareholders equity

Total assets


3) Interest coverage ratio:

This ratio compares the net profit before interest and tax with the interest payments and

long-term liabilities. This ratio indicates whether adequate coverage of net profit is

available for the payments of interest or not.

Interest coverage ratio = Net profit before interest and tax

Interest

4 ) Proprietary ratio:

It is the ratio between proprietor’s fund and total assets. It indicates the strength of the

funding of the company. A high ratio will definitely indicate high financial strength but a

very high ratio will indicate inadequate utilization of external equities.

Proprietary ratio = Proprietor’s funds

Total assets

III] TURNOVER RATIOS:

Assets management ratio measures how efficiently the firm employs its resources. These

ratios are also called activity or turnover ratios which involve comparison between the

level of sales and investment in various accounts. They are used to measure speed with

which various accounts are converted into sales or cash.


1) Inventory turnover ratio:

It establishes relationship between cost of goods sold during a given period and the

average amount of inventory held during that period. It indicates the number of times

finished stock is turned over during a given accounting period. High ratio shows rapid

turnover & low ratio shows slow moving stock.

Inventory turnover ratio = Cost of goods sold OR sales

Average inventory

2) Debtor’s turnover ratio:

This ratio indicates the credit policy follow by a business firm. The higher the ratio is the

collection period while low ratio indicates higher collection period. An average collection

period, which is shorter, needs to be analyzed carefully.

Debtors turnover ratio = Credit sales

Average debtors

3) Creditors turnover ratio:

This ratio indicated the credit period allow by the creditors. A high turnover ratio

indicates that payment to creditors is quite prompt but it also implies the full advantage of

credit allow by creditors is not taken. A low ratio indicates that payment to creditors is

not quite prompt and it needs to be improved.

Creditor’s turnover ratio = Credit purchases

Average creditors

4) Fixed assets turnover ratio:This ratio indicates the number of times fixed assets are being turned over during a

particular period. It is one of the indications of efficiency of using fixed assets in the

business. A high ratio indicates that fixed assets are contributing quite substantially in

making sales, while low ratio indicates that fixed assets are not being used efficiently.

Fixed assets turnover ratio = Net sales

Fixed assets


5) Total asset turnover ratio:

This ratio indicates the number of times total assets are being turned in a year. The higher

the ratio indicates overtrading of total assets while a low ratio indicates idle capacity.

Total assets turnover ratio = Sales

Total assets

6) Working capital turnover ratio:

This ratio compares the net sales with net working capital. The indication given by this

ratio is the number of times working capital is turned around in a particular period. The

higher the ratio the better the utilization of working capital and HI-TECH is the

investment in working capital. However, a very high working capital turnover ratio is a

sign of overtrading and a firm may face shortage of working capital.

Working capital turnover ratio = Net sales

Working capital

7) Capital employed turnover ratio:

This ratio shows efficiency of capital employed in the business by computing how many

times capital employed is turned over in a given period.

Capital turnover ratio = Net Sales

Capital employed


IV] PROFITABILITY RATIOS:

With a very few exceptions the entire corporate sector aims at maximizing the amount of

profits. Some of the public sector undertakings are also aiming at earning reasonable

amount and rate of profits. Even a few services oriented organizations are working on a

‘no-profit, no-loss’ basis. Profit maximization is therefore one of the primary objectives

of business enterprise. Profit should not be confused with profitability because profit is

one of the determinants of profitability.

1) Gross profit ratio:

This ratio shows the margin left after meeting the manufacturing costs. It measures the

efficiency of production as well as pricing. A high gross profit ratio means high margin

for covering other expenses, other than the costs of goods sold.

Gross profit ratio = Gross profit x 100

Net sales

2) Net profit ratio:

This ratio indicates the earnings left for shareholders (equity & preference) as a


percentage of net sales. It measures the overall efficiency of all the functions of a

business firm like production, administration, selling, financing, pricing, tax management

etc.

Net profit ratio = Net profit before interest & tax x 100

Sales

3) Return on total assets

This ratio is also known as profit to assets ratio and it establishes the relationship between

net profit and assets.

Return on total assets = Net profit after tax x 100

Total assets

4) Return on Shareholders fund or return on net worth:

It shows the percentage of net profit available for equity shareholders to equity

shareholders funds. This ratio indicates the productivity of the ownership capital

employed in the firm.

RONW = Net profit after interest and tax x 100

Net worth

5) Return on capital employed:

This ratio indicates the percentage of net profits before interest and tax to total capital

employed. Capital employed refers to long-term funds supplied by the lenders and

owners of the firm.

ROCP= Net profit before interest and tax x 100

Capital employed


V] MARKET BASED RATIOS:

The market based ratios relates the firm’s stock price to its earnings and book value per

share. These ratios give management an indication of what investors think of the

company’s past performance and future prospects. If firm’s profitability, solvency and

turnover ratios are good, then the market based ratios will be high and its share price is

also expected to be high.

1) Earnings per share:

This ratio indicates the amount of net profit available per equity share of a business firm.

EPS is one of the criteria of measuring the performance of a company. If EPS increases,

the possibility of a higher dividend payable by the company increases.

EPS = Net profit after interest, tax and preference dividend

Number of equity shares

2) Cash earnings per share:

Cash earnings per share are more reliable yardstick for measurement of performance of

companies, especially for highly capital intensive industries where provision for

depreciation is substantial.

CEPS = Net profit after tax + depreciation

No. of equity shares

3) Dividend payout ratio:

This ratio indicates the percentage of profit distributed as dividends to the shareholders. A

higher ratio indicates that the company follows a liberal dividend policy while a HI-

TECH ratio implies a conservative dividend policy.

Dividend payout ratio = Dividend per share x 100

Earning per share


2.6 IMPORTANCE OF RATIO ANALYSIS:

As a tool of financial management, ratios are of crucial significance. The

importance of ratio analysis lies in the fact that it presents facts on a comparative basis &

enables the drawing of interference regarding the performance of a firm. Ratio analysis is

relevant in assessing the performance of a firm in respect of the following aspects:

1] LIQUIDITY POSITION: -

With the help of Ratio analysis conclusion can be

drawn regarding the liquidity position of a firm.

2] LONG TERM SOLVENCY: -

Ratio analysis is equally useful for assessing the long-term financial viability of a

firm.

3] OPERATING EFFICIENCY:

Yet another dimension of the useful of the ratio analysis, relevant from the

viewpoint of management, is that it throws light on the degree of efficiency in

management & utilization of its assets.

4] OVERALL PROFITABILITY:

Unlike the outsides parties, which are interested in one aspect of the financial

position of a firm, the management is constantly concerned about overall profitability of

the enterprise.

5] INTER – FIRM COMPARISON:

Ratio analysis not only throws light on the financial position of firm but also

serves as a stepping-stone to remedial measures.

6] TREND ANALYSIS:

Finally, ratio analysis enables a firm to take the time dimension into account.


2.7 ADVANTAGES OF RATIO ANALYSIS:

Financial ratios are essentially concerned with the identification of significant

accounting data relationships, which give the decision-maker insights into the financial

performance of a company. The advantages of ratio analysis can be summarized as

follows:

1. Helpful in analysis of Financial Statements.

2. Helpful in comparative study.

3. Helpful in locating the weak spots of the business.

4. Helpful in Forecasting.

5. Estimate about the trend of the business.

6. Fixation of ideal Standards.

7. Effective Control.

8. To workout the profitability: Accounting ratio help to measure the profitability of the

business by calculating the various profitability ratios.

9. To workout the solvency: With the help of solvency ratios, solvency of the company

can be measured. These ratios show the relationship between the liabilities and assets.

10. To simplify the accounting information: Accounting ratios are very useful as they

briefly summaries the result of detailed and complicated computations.

11. To workout the operating efficiency: Ratio analysis helps to work out the operating

efficiency of the company with the help of various turnover ratios.

12. To workout short-term financial position: Ratio analysis helps to work out the short-

term financial position of the company with the help of liquidity ratio.


2.8 PURPOSE OF RATIO ANLYSIS:

1] To identify aspects of a business’s performance to aid decision making.

2] Quantitative process – may need to be supplemented by qualitative

Factors to get a complete picture.

3] 5 main areas:-

Liquidity – the ability of the firm to pay its way.

Investment/shareholders – information to enable decisions to be made on the

extent of the risk and the earning potential of a business investment.

Gearing – information on the relationship between the exposure of the business

to loans as opposed to share capital.

Profitability – how effective the firm is at generating profits given sales and or its

capital assets.

Financial – the rate at which the company sells its stock and the efficiency with

which it uses its assets.


2.9. ROLE OF RATIO ANALYSIS:

It is true that the technique of ratio analysis is not a creative technique in the sense

that it uses the same figure & information, which is already appearing in the financial

statement. At the same time, it is true that what can be achieved by the technique of ratio

analysis cannot be achieved by the mere preparation of financial statement.

Ratio analysis helps to appraise the firm in terms of their profitability & efficiency

of performance, either individually or in relation to those of other firms in the same

industry. The process of this appraisal is not complete until the ratio so computed can be

compared with something, as the ratio all by them do not mean anything. This

comparison may be in the form of intra firm comparison, inter firm comparison or

comparison with standard ratios.

Ratio analysis is one of the best possible techniques available to the management

to impart the basic functions like planning & control. As the future is closely related to

the immediate past, ratio calculated on the basis of historical financial statements may be

of good assistance to predict the future.


CHAPTER-III

RESEARCH METHODOLOGY


3.1 TITLE OF PROJECT:

“A Study of Financial Ratio Analysis.”

Financial ratio analysis is the calculation and comparison of main indicatives ors

ratios which are derived from the information given in a company’ financial statements

which must be similar points in time and prefer by audited financial statements and

developed in the same manner. It involves methods of calculating and interpreting

financial ratios in order to asses. A firm’s performance and status. This analysis is

primarily designed to meet informational need, of investors creditors and management.

The objective of ratio analysis is the comparative measurement of financial data to

facilitate wise investment, credit and managerial decision.


3.2 OBJECTIVE OF RATIO ANALYSIS:

Ratio is work out to analyze the following aspects of business organization-

1) Solvency-

Long term

Short term

Immediate

2) Stability.

3) Profitability.

4) Operational efficiency.

5) Credit standing.

6) Structural analysis.

7) Effective utilization of resources.

8) Leverage or external financing.


3.3 RESEARCH METHODOLOOGY

Research is an organized and systematic way of finding answers to questions.

Organized in the sense, that there is a structure or method in going about doing research.

It is planned procedure, not a spontaneous one. It is focused & limited to a specific scope.

Systematic because there is a definite set of procedures and steps which you will follow.

There are certain things in the research process, which are always done in order to get the

most accurate results.

Finding answer is the end of all research. Whether it is the answer to a hypothesis

or even a simple question, research is successful when we find answers. Sometimes, the

answer is no, but it is still an answer.

Questions are central to research. If there is no question, then the answer is off

no use. Research is focused on relevant, useful and important questions. Without a

question, research has no focus, drive or purpose.

Area of the Research: Finance

A research design was prepared as under:

The analysis is done on the subject Interpretation of the financial statement by

using ratio analysis technique.

The analysis is done in the firm HI-TECH..

The analysis is done with the help for primary and secondary data.

The purpose of the project is to study the various financial ratios.


Primary Source of Data:

The primary source of data has been collected from the finance departments

through formal discussions with Accountants of HI-TECH and other officials of

the company.

This data is generated specifically for the purpose of working out the project. This

data means the first hand information, which is collected through various sources

e.g. Questionnaires.

Schedules and Formal / Informal Information:

1] Information relating to the project was collected during formal & informal

discussions with the HOD (Finance).

2] Quires arising in due course of the project brought into the notice of concerned

authority & necessary explanation & solutions are adapted.

2] Secondary Source of Data:

Secondary data means that the data is already analyzed by someone else. It is also

called as indirect data.

The secondary source of data includes the information collected from the annual

reports of the company for relevant periods.

All the financial data of HI-TECH has been taken from the various statements of

the company such as Balance Sheet, Profit and Loss account.

Thus this report is based on the information provided by the concerned authorities

& by referring books named financial management.


1] Annual Report

Majority of information gathered from data exhibited in the annual

reports of the company. These include annual reports of the year 2006-07, 2007-08 &

2009-10.

2] Reference Books:

Theory relating to the subject matter and various concepts taken up from various

financial reference books.

3] HI-TECH sites:

The information relating to ratio analysis taken up from HI-TECH sites.

Research Design:

It includes following steps:

1] Calculations of Ratios.

2] Analyzing & Interpreting the Ratios.

3] Research Findings.

4] Recommendations.

5] Conclusion.


CHAPTER-IV

DATA ANALYSIS AND CONCLUSION


4.1DATA ANALYSIS AND INTERPRETATION:

4.1.1 Introduction:

The present chapter is concerned with analysis and interpretation of collected

data. This is essential for scientific study and for ensuring that the researcher has

all relevant data for making contemplated comparison and analysis.

4.1.2 Data Analysis:

For the purpose of analysis of data, researcher had used various statistical as HI-

TECH as analytical tools like tabulation and percentage.

After collection of data, the next and more important step is analysis of data. This is

essential for scientific study. Analysis of data in general way involves a number of

closely related operations, which are performed with the purpose of summarizing the

collected data and organizing these in such a manner.


4.2.1. CURRENT RATIO:

Current ratio =Current Assets / Current Liabilities

Particulars 2007-08 2008-09 2009-10 2010-11

Current asset 202,733,393 124,410,256 95,254,930 179,383,350

Current

liabilities

27,989,998 40,258,807 26,633,631 183,712,046

Ratio (in times) 7.24 3.09 3.5 .98

2007-08 2008-09 2009-10 2010-110

1

2

3

4

5

6

7

8

CURRENT RATIO

YEAR

RATI

O

INTERPRETATION:

A higher current ratio has better liquidity. A standard norm of current ratio is 2:1. Since

last 3 years company’s current assets are more than its current liabilities. So that the

company is assuring to pay its current maturing debt as and when it becomes due. Ratio

is satisfactory to the company according to its characteristics. It is good sign that

company is keeping sufficient margin of safety.

2. QUICK/ ACID TEST RATIO:


Quick Ratio= Quick Assets /Quick Labilités

Particulars 2007-08 2008-09 2009-10 2010-11

Liquid Assets 86,565,960 60,877,549 64,306,449 75,550,914

Liquid Liabilities 27,989,998 40,258,807 26,633,631 183,712,046

Ratio ( in times )

3.09 1.51 2.41 .41

2007-08 2008-09 2009-10 2010-110

0.5

1

1.5

2

2.5

3

3.5

QUICK ACID TEST RATIO

QUICK ACID TEST RATIO

YEAR

RATI

O

INTERPRETATION:

It is widely accepted as the best available test of the liquidity position of the firm.

Generally speaking, a liquid ratio 1:1 is considered satisfactory as a firm can easily meets

all current claims. The ratio of 2006-07 is 3.09 and in 2007-08 and 2008-09 the ratio is

near to ideal. The ratio of 2009-10 is .41 is very low because of excess current liability

3. FIXED ASSET TURNOVER RATIO:

SalesFixed Assets Turnover Ratio =


Fixed Assets

Particulars 2007-08 2008-09 2009-10 2010-11

Sales 645,057,254 600,889,091 422,137,997 552,839,754Fixed asset 602,037,387 580,445,311 515,250,916 460,195,562Ratio (in times) 1.07 1.03 .81 1.20

2007-08 2008-09 2009-10 2010-110

0.2

0.4

0.6

0.8

1

1.2

1.4

FIXED ASSET TURNOVER RATIO

FIXED ASSET TURNOVER RATIO

YEAR

RATI

O

INTERPRETATION:

A high ratio indicates efficient utilization of fixed assets in generating sales. And low

ratio indicates low sales per rupee of fixed asset.

4 .CURRENT ASSET TURNOVER RATIO:

Current asset turnover ratio= sales


Current asset

Particulars 2007-08 2008-09 2009-10 2010-11

Sales 645,057,254 600,889,091 422,137,997 552,839,754Current asset 202,733,393 124,410,256 95,254,930 179,383,350Ratio(in times) 3.18 4.82 4.43 3.08

2007-08 2008-09 2009-10 2010-110

1

2

3

4

5

6

CURRENT ASSET TURNOVER RATIO

CURRENT ASSET TURNOVER RATIO

YEAR

RATI

O

INTERPREATATION:-

The graph shows that Hi-Tec industries Ltd Baramati is increasing current assets

turnover ratio year 2006-07&2007-08.In year 2008-09&&2009-10 the CATR is

decreasing . It means that they achieve maximum sales by investing minimum current

assets .

5. WORKING CAPITAL TURNOVER RATIO:

Working capital turnover ratio = Net sales


Working capital

Particulars 2007-08 2008-09 2009-10

Net Sales

645,057,254 600,889,091 422,137,997

Working capital 174,743,395 84,151,449 68,621,299

Ratio(in times) 3.69 7.14 6.15

2007-08 2008-09 2009-100

1

2

3

4

5

6

7

8

WORKING CAPITAL TURNOVER RATIO

WORKING CAPITAL TURNOVER RATIO

YEAR

RATI

O

INTERPRETATION:

This ratio compares the net sales with net working capital of company. The indication

given by this ratio is the number of times working capital is turned around in a particular

period. The higher this ratio, the better is the utilization of working capital and also

indication of low working capital.

6. INVENTORY TURNOVER RATIO:

Net sales


Inventory Turnover Ratio =

Average Inventory

Particulars 2007-08 2008-09 2009-10 2010-11

Net Sales 645,057,254 600,889,091 422,137,997 552,839,754

Average Inv. 18,010,981 47,249,491 18,933,771 19,503,787.5

Ratio(in times) 35.53 12.71 22.29 28.34

2007-08 2008-09 2009-10 2010-110

10

20

30

40

INVENTORY TURNOVER RATIO

INVENTORY TURNOVER RATIO

YEAR

RATI

O

INTERPRETATION:

It measures how quickly inventory sold. A high inventory turnover ratio is better than a

low ratio. A high ratio implies good inventory management. Yet, a very high ratio calls

for a careful analysis. Very low level of inventory has serious implications.

7. CREDITOR’S TURNOVER RATIO:


Creditor’s turnover ratio = credit purchase

Sundry creditors

Particulars 2007-08 2008-09 2009-102010-11

Credit purchase

361,959,352.11 390,845,451.34 326,808,448 462,020,245.68

Sundry creditors

21,749,963 32,178,140 21,364,846 175,035,859

Ratio (in times)

16.64 12.14 15.29 2.63

2007-08 2008-09 2009-10 2010-1102468

1012141618

CREDITORS TURN OVER RATIO

CREDITORS TURN OVER RATIO

YEAR

RATI

O

INTERPRETATION:

The creditor’s turnover ratio graph shows that in year 2006-07 Soma Textile and

Industries Ltd, Baramati. is very high ratio it means delay in payment to suppliers. But

2009-10 it is very low it means creditors are paid promptly. In year 2007-08 and 2008-09

the ratio is good.

8.CAPITAL TURNOVER RATIO:


Sales

Capital Turnover Ratio = Capital Employed

(Capital employed=fixed asset + current asset-current liabilities)

Particulars 2007-08 2008-09 2009-10 2010-11

Sales 645,057,254 600,889,091 422,137,997 552,839,754

Capital Employed

776,780,782 664,596,760 583,872,216 455,866,866

Ratio(In times) .83 .90 .72 1.21

2007-08 2008-09 2009-10 2010-110

0.2

0.4

0.6

0.8

1

1.2

1.4

CAPITAL TURN OVER RATIO

CAPITAL TURN OVER RATIO

YEAR

RATI

O

INTERPRETATION: In case of Soma Textile & Industries Ltd,Baramati.ratio has increased in year 2006-07, 2007-08 & 2009-10.But except in 2008-09.

High ratio indicates efficiency of the organization with which the capital is being utilized.

9. TOTAL ASSET TURNOVER RATIO:

Sales


Total Assets Turnover Ratio = Total Assets

Particulars 2007-08 2008-09 2009-10 2010-11

Sales 645,057,254 600,889,091 422,137,997 552,839,754

Total asset 804,770,780 704,855,567 610,505,847 639,578,912

Ratio(in times) .80 .85 .69 .86

2007-08 2008-09 2009-10 2010-110

0.10.20.30.40.50.60.70.80.9

1 TOTAL ASSET TURN OVER RATIO

TOTAL ASSET TURN OVER RATIO

YEAR

RATI

O

INTERPRETATION:

The total asset’s utilization is satisfactory, because high ratio indicates efficient

utilization of total assets in generating sales.

10. DEBTOR’S TURNOVER RATIO:

Total Sales / Credit Sales


Debtors Turnover Ratio =

Average A/Cs Receivable

Particulars 2007-08 2008-09 2009-10 2010-11

Credit Sales 645,057,254 600,889,091 422,137,997 552,839,754

A/c receivable 34,413,938 14,165,050 21,064,406 13,415,725

Ratio(in times) 18.74 42.42 20.04 41.20

INTERPRETATION:

A higher turnover ratio and shorter collection period, a better is the trade credit

management and better is the liquidity of debtors, as short collection period and high

turnover ratio imply prompt payment on the part of debtors. In short, high turnover is

preferable.

11. GROSS PROFIT RATIO:


2007-08 2008-09 2009-10 2010-1105

1015202530354045

DEBTOR TURNOVER RATIO

DEBTOR TURNOVER RATIO

YEAR

RATI

O

Gross Profit Ratio = Gross Profit / Sales*100

Particulars 2007-08 2008-09 2009-10 2010-11

Gross Profit 240,188,494.34 158,393,158.36 67,007,428.54 53,736,776.77Sales 645,057,254 600,889,091 422,137,997 552,839,754Ratio (%) 37.23 26.35 15.87 9.72

INTERPRETATION:

The gross profit ratio is decreasing every year. so Soma Textile & Industries Ltd,

Baramati .have to maintain it properly. But, the Average Industry ratio is 20% to 40%. So,

ratios are satisfactory.

12. NET PROFIT RATIO:


2007-08 2008-09 2009-10 2010-110

5

10

15

20

25

30

35

40

GROSS PROFIT RATIO

GROSS PROFIT RATIO

YEAR

RATI

O

Net Profit Ratio = Net Profit / Sales*100

Particulars 2007-08 2008-09 2009-10 2010-11

Net profit 15,168,889 45,195,592 119,119,749 50,854,022

Sales 645,057,254 600,889,091 422,137,997 552,839,754

Ratio (%) 2.35 7.52 28.21 9.19

INTERPRETATION:

This ratio measures overall efficiency of all the functions of a business firm like

production, administration, selling, financing, pricing, tax management etc. The higher

ratio indicates better it is because it gives an idea of overall efficiency of the firm.

13.CASH PROFIT RATIO:


2007-08 2008-09 2009-10 2010-110

5

10

15

20

25

30

NET PROFIT RATIO

NET PROFIT RATIO

YEAR

RATI

O

Cash profit

Cash profit ratio = *100

Sales

Cash profit ratio = (Net profit+ non cash expenses/depreciation)

Particulars 2007-08 2008-09 2009-102010-11

(Net profit+ depreciation)

73,088,711 103,857,607 176,710,700 108,184,838

Sales 645,057,254 600,889,091 422,137,997 552,839,754

Ratio (%) 11.33 17.28 41.86 19.56

INTERPRETATION:

The cash profit ratio is increasing first three years i.e. 2006-07, 2007-08 & 2008-09.But

then decreasing in year 2009-10.

14. FIXED ASSET TO CAPITAL EMPLOYED:


2007-08 2008-09 2009-10 2010-1105

1015202530354045

CASH PROFIT RATIO

CASH PROFIT RATIO

YEAR

RATI

O

Fixed asset to capital employed = Fixed asset/capital employed *100

Particulars 2007-08 2008-09 2009-10 2010-11

Fixed asset 602,037,387 580,445,311 515,250,916 460,195,562Capital Employed

776,780,782 664,596,760 583,872,216 455,866,866

Ratio (%) 77.50 87.33 88.24 101

INTERPRETATION:

The above graph shows that fixed asset turnover ratio is increasing every year. So this

ratio is good for Soma Textile & Industries Ltd, Baramati. Capital employed indicates the

long term fund supplied by creditors and owners of the firm.

4.2 FINDINGS:-


2007-08 2008-09 2009-10 2010-110

20

40

60

80

100

120

FIXED ASSET TO CAPITAL EMPLOYED

FIXED ASSET TO CAPITAL EMPLOYED

YEAR

RATI

O

ACTIVITY RATIOS:

Ratios are increasing which shows that efficient utilization of long term funds.

Inventory Turnover ratio of the company is Decreasing year-by-year. It means Company

is not efficiently managing investment in Inventories.

Collection period is less than the payment period. This shows the efficiency of the

management.

Accounts of the creditors are settled rapidly.

PROFITABILITY RATIOS:

The Gross profit ratio decrease year-by-year due to increase in material & manufacturing

cost.

Operating performance of the company is satisfactory.

Net profit of the company decreased increase in indirect expenses as compared to year

2005-06 & 2006-07.

LIQUIDITY RATIOS:

Company’s current assets are more than its current liabilities. Company is keeping

sufficient margin of safety.

CONCLUSION:-


In this project financial statement of last 3 years has been compared &

through the ratio analysis technique it is concluded that the company is doing

excellent in its field year after year. The study is restricted to only financial

statements. The company’s business has recorded significant increase in sales

& profit.

In this project ratio analysis indicates, the financial position of the

company. Also with the help of ratio analysis and past data management can

taking corrective action regarding growth of business.


CHAPTER-V

SUGGESTIONS

SUGGETIONS:-


In future company should expand their Business for increase in Profit.

Gross profit of the company is low because of increase in raw material cost.

Hence Company should purchase raw material in bulk quantity whenever cost is

low.

Company should make contract with vendors for a long period at fixed prices.

LIMITATIONS OF RATIO ANALYSIS


Ratio analysis has its limitations. These limitations are described below:

1. Ratios are calculated on the basis of past financial statements. They do not indicate

future trends and they Comparison not possible if different firms adopt different

accounting policies.

2. Ratio analysis becomes less effective due to price level changes.

3. Ratio may be misleading in the absence of absolute data.

4. Limited use of a single data.

5. Lack of proper standards.

6. False accounting data gives false ratio.

7. Ratios alone are not adequate for proper conclusions.

8. Effect of personal ability and bias of the analyst.

9. Limited Comparability.

10. Qualitative factors are ignored.

11. Effect of window-dressing.

12. Costly Technique.

BIBLIOGRAPHY


Referred Books:

1. Cost Accounting & Financial management.-(M Y Khan and P K Jain)

4th edition, 200, Tata McGraw – Hill Publishing Co. Ltd.New Delhi

2. Financial Management.- (Dr. Nachiket Inchlekar)

1st edition De. 2008, Nirali Publication Pune.

3. Financial Management.- (Prof. Ravi M. Kishore)

6th edition, 2008, Taxman Allied Service (P) Ltd. New Delhi.

4. Financial Management. - (Satish M.Inamdar)

Everest Publishing House

HI-TECH sites:

Annual Reports of HI-TECH engineering company ltd baramati.

(Year 2006-07, 2007-08, 2008-09 2009-10)

WEBSITE:

1] www,universalteacher4u.com/cbse/xii……………..

2] eg,Wikipedia.org/wiki/financial_ratio

ANNEXURE


HI-TECH ENGINEERING CO. LIMITED

BALANCESHEET AS AT 31St MARCH,2008

Schedule 2008 Rupees 2007 Rupees

SOURCES OF FUNDS

Head office a/c 1 402,372,616 479,385,818

Reserves and surplus

Total 402,372,616 479,385,818

LOAN FUNDS

Secured Loans 2 160,578,780 198,832,517

Unsecured Loans 3 103,430,428 100,000,000

264,009,208 298,832,517

TOTAL 666,381,824 778,218,335

APPLICATION OF FUNDS

FIXED ASSETS 4

Gross Block 1,183,345,110 1,153,408,246

Accumulated Depreciation 602,899,800 551,482,144


Net Block 580,445,311 601,926,102

Capital work-in-progress 111,285

580,445,311 602,037,387CURRENT ASSETS,LOANS AND ADVANCES

Inventories 5 63,532,707 116,167,443

Sundry Debtors 6 14,165,050 34,413,938

Cash & Bank Balances 7 7,146,275 21,512,512Loans,Advances & other current assets 8 39,566,224 30,639,500

124,410,256 207,733,393LESS: CURRENT LIABILITIES AND PROVISIONS

Liabilities 9 40,258,807 27,989,998

Provisions 10 2,723,776 3,257,171

42,982,583 31,247,169

Net Current AssetsMISCELLEANEOUS EXPENDITURE 11 81,427,673 171,486,224

(to the extent not return of or adjusted) 4,508,841 4,694,724

TOTAL 666,381,824 778,218,335

NOTES TO ACCOUNTS 19 0



HI-TECH ENGINEERING CO. LIMITED PRFIT & LOSS ACCOUNT

Schedule 2008(Rs) 2007(Rs)

INCOMESales 600,889,091 645,057,254Interest Received 12 819,827 854,857Other income 13 31,185,373 20,556,217

TOTAL 632,894,291 666,468,328

EXPENDITURE

Manufacturing & Other Expenses 14 599,381,888 572,417,874Interest Paid 12 20,045,980 20,389,333Depreciation 4 58,662,015 57,919,822

TOTAL 678,089,883 650,727,029

PRIOR PERIOD ITEMSPROFIT BEFORE TAX 45,195,592 15,741,299

Fringe Benefit Tax 178,947 196,964(Refer note 25 of Notes On Accounts)

PROFIT/(LOSS) FOR THE YEAR 45,374,539 15,544,335PROFIT/(LOSS) TRANSFERRED TO HEAD OFFICE 45,374,539 15,544,335

NOTES TO ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2008


HI-TECH ENGINEERING CO. LIMITED

BALANCSHEET AS AT 2009-10

Schedule2009-10 Rupees 2008-09 Rupees

SOURCES OF FUNDS

Head office a/c 1 310,166,589 443,639,721Reserves and surplusTotal 310,166,589 443,639,721

LOAN FUNDS 2 139,263,604 137,862,078Secured Loans 3 4,339,760 4,339,759Unsecured Loans

143,603,364 142,201,837

TOTAL 453,769,953 585,841,558

APPLICATION OF FUNDS 4FIXED ASSETSGross Block 1,144,016,467 1,141,741,007Accumulated Depreciation 683,820,905 626,490,091

Net Block 460,195,562 515,250,916Capital work-in-progress

460,195,562 515,250,916CURRENT ASSETS,LOANS AND ADVANCESInventories 5 103,832,436 30,948,481Sundry Debtors 6 13,415,725 21,064,406Cash & Bank Balances 7 13,546,729 4,666,896Loans, Advances & other current assets 8 48,588,461 38,575,148

179,383,350 95,254,931LESS: CURRENT LIABILITIES AND PROVISIONS 9 183,712,046 26,633,631Liabilities 10 2,097,003 2,539,498Provisions 185,809,049 29,173,129

Net Current Assets 11 6,425,699 66,081,802MISCELLEANEOUS 4,508,841


EXPENDITURE(Refer Note no.08 in Notes to accounts)

TOTAL 453,769,863 585,841,55919

NOTES TO ACCOUNTS


Final Project of Ratio

Documents

overflow surplus

maharashtra

keeping sufficient

inline planetary

highly energy

funds head

achieved 3000tonne

existing sugar