HELLY GP

CHAPTER:-1 RESEARCH METHODOLOGY

SCOPE OF THE STUDY

The scope of the study is wide and it includes the analysis of annual results, Profit & loss account and balance sheet of the company for the last 3 years.

OBJECTIVE OF THE STUDY

To understand the information contained in financial statements with a view to know the strength or weaknesses of the firm with regards to other 3 competitors and thereby enabling the financial analyst to take different investment decisions regarding the company. The objective of the study gives direction to go through the research problem.

1. To study the financial statements of JINDAL LTD, AARVEE DENIMS, K.G. DENIM, ARVIND MILLS in the textile industry.

2. Comparative study of financial position of these companies.

3. To understand the relationship maintained with the trade creditors and the debtors of the firm.

4. To check the profitability of companies.

5. To check solvency of the companies.

RESEARCH DESIGN

Page 1 K.S.SCHOOL OF BUSINESS MANAGEMENT

The study used a descriptive research design for the purpose of getting an insight over the issue. It is to provide an accurate picture of some aspects of company environment.

Descriptive research is used when the objective is to provide a systematic description that is as factual and accurate as possible.

SOURCES OF DATA

Secondary data has been taken into consideration to solve the research problem.

The following data are used:-

1. Annual reports of Jindal Ltd, Aarvee denims, K.G.. denim, Arvind mills

2. Some other websites are used for the purpose of getting some financial information to fulfill the objective of the study.

METHODS OF ANALYSIS

The data collected were edited, classified and tabulated for analysis. The analytical tools used in this study are:

. Ratio Analysis.

TIME BUDGET

4 months



CHAPTER: 2 INTRODUCTION TO TEXTILE INDUSTRY

Indian Textile industry is highly fragmented industry; at the same time it is an independent and self-reliant industry that has shown sustainable growth over the years.

Indian textile Industry is valued at US$ 36 Billion with exports of US$ 17 Billion in 2005-2006.

The Indian Textile Industry plays vital role in economic development and contributes 14% to industrial production in the country.

Textile Industry contributes around 4% of GDP, 9% of excise collections, 18% of employment in industrial sector, and has 16% share in country’s export.

Industry contributes around 25% share in the world trade of cotton yarn.

India is the largest producer of the Jute, the 2nd largest producer of Silk, the 3rd largest producer of Cotton and Cellulosic Fiber/Yarn and 5th largest producer of Synthetic Fibers/Yarn.

India contributes for 12% of the world’s production of textile fibers and yarn.

Indian textile industry is second largest after China, and has share of 23% of the world’s spindle capacity.

Including textiles and garments, 30% of India’s export comes from this sector.

Indian Textile Industry is one of the largest industries that provide high exports and foreign revenue.


2.1 HISTORY OF TEXTILES INDUSTRY

The textile industry occupies a unique place in our country.

The commercial development of man-made fiber began late in the 19th century, experienced much growth during the 1940’s,

expanded rapidly after World War-II and in the 1970’s was still the subject of extensive Research and Development.

The spinning and weaving both are very common and attached with each other in all parts of the world.

However, the modern textile industry took birth in India in the early nineteenth century when the first textile mill in the country was established at fort gloster near Calcutta in 1818.

The cotton textile industry, however, made its real beginning in Bombay, in 1850s.

The first cotton textile mill of Bombay was established in 1854 by a Parsi cotton merchant then engaged in overseas and internal trade.

The cotton textile industry made rapid progress in the second half of the 19 th and by the end of the century


there were178 cotton textile mills; but during the year1900 the cotton textile industry was in bad state due to the great famine and a number of mills of Bombay and Ahmedabad were to be closed down for long periods.

1The two world wars and the Swadeshi movement provided great stimulus to the Indian cotton textile industry.

However, during the period 1922 t0 1937 the industry was in doldrums and during this period a number of the Bombay mills changed hands.

The Second World War, during which textile import from Japan completely stopped, however, brought about an unprecedented growth of this industry.

The number of mills increased from 178 with 4.05 lakh looms in 1901 to 249 mills with 13.35 lakh looms in 1921 and further to 396 mills with over 20 lakh looms in 1921 and further to 396 mills with over 20 lakh looms in 1941.

The commercial development of man-made fiber began late in the 19th century, experienced much growth during the 1940’s,

expanded rapidly after World War-II and in the 1970’s was still the subject of extensive Research and Development.


2.2 CURRENT SCENARIO OF TEXTILE INDUSTRY

The Indian textile industry is one of the major sectors of Indian economy largely contributing towards the growth of the country's industrial sector.

Textiles sector contributes to 14 per cent of industrial production, 4 per cent of National GDP and 10.63 per cent of country's export earnings.

Textile sector in India provides direct employment to over 35 million people and holds the second position after the agriculture sector in providing employment to the masses.

Growing at a rapid pace, the Indian Market is being flocked by foreign investors exploring investment purposes and with an increasing trend in the demand for the textile products in the country, a number of new companies and joint ventures are


being set up in the country to capture new opportunities in the market.

2.3 MAJOR PLAYERS IN THE TEXTILE INDUSTRY

ALOK INDUSTRIES LTD.

ARVIND MILLS LTD.

JINDAL WORLDWIDE LTD.

AARVEE DENIM LTD.

BOMBAY DYEING & MANUFACTURING CO. LTD.

CENTURY TEXTILES & INDUSTRY

WELSPUN INDIA LTD.

K.G.DENIM LTD.

BOMBAY RAYON FASHIONS LTD

NANDAN EXIM LTD.



CHAPTER: 3 COMPANIES SELECTED FOR TEXTILE INDUSTRY EVALUATION

JINDAL WORLDWIDE LIMITED

ARVIND MILLS LIMITED

AARVEE DENIM LIMITED

K.G.DENIM LIMITED


3.1 CORPORATE OVERVIEW OF JINDAL LTD.


Jindal Worldwide is one of the most successful companies in the indian textile industries. Company is based in Ahmedabad which is considered as textile capital of India.

JINDAL WORLDWIDE LIMITED incorporated under The Companies Act, 1956 and started its journey in the textile market in the year 1986 by Fabric trading and steadily expanded in to weaving, processing denim manufacturing and home textile. Company is based in Ahmedabad which is considered as textile capital of India.

Jindal group of industries has its foothold in the domestic as well as Export markets for denim as well as home textile with annual turnover in excess of Rs. 500 crore of approximately.

The company is exporting Denim and Bed linen to its valued clientele across Canada, USA, countries of European Union, Srilanka and Bangladesh. Its excellence has been recognized and honored at various levels by government and other institutions. It is recipient of a number of special awards for its excellence in exports from “Texprocil” and “President of India” ever since 1994.

Company started with the manufacturing of Denim in the year 2005-2006 and in just with the span of 5 years it is in the league of the top denim manufacturers in India.


OBJECTIVE OF THE COMPANY

The main objective of the company is establishing them

as a market leader in the field of Home Textile and

achieving higher satisfaction ratio with our clients.

To meet the Global standards of cost, quality and pricing.

To ensure Total Customer satisfaction.

To achieve the leadership in all facets of operations.

To meet the Global standards of cost, quality and pricing.

To maximize profit and shareholders’ wealth.


VISION OF THE COMPANY

Jindal has a vision of long-

term productivity with how

the Textile can be made and

distributed with a unique

touch of Design and

Innovation based upon the

people lifestyle and taste.

Each new product is made a

revolution by Jindal Team and the Channel Partners.

The integrated production, Designing, weaving and processing

house made capable to compete and complete the Global

demand of Textile Needs. Jindal team prepared for next

generation high range of products and improving quality

standards to ensure the highest Customer Satisfaction and to

Attain Leadership in all facets of Operations. Jindal’s vision is

designed for meeting the Global Standards of Cost, Quality

and Pricing and maximizing profit and shareholders wealth.


ORGANIZATIONAL STRUCTURE


Chairman

BOD

MD

Director (Marketing)

Mumbai

office

Marketing team

Account and

Administration

team

Delhi office

Marketing team

Account and

Administration

team

Director (Finance)

Finance Manager

Finance Excutive

s

Account Manager

Accounts officer

Accountants and

Assistants

Production Manager

Production Supervisor

skilled workers

BUSINESS MESSAGE

“The results have to be achieved and the means have to be right.” The company remains dedicated towards providing high quality products and services to the valued clients and to create an organization on the principle of atmost integrity.

The company values its responsibility towards Society and contributes to persue its efforts and initiative with same vigor that the company adopts to run their business.


PRODUCT PROFILE

DENIM BOTTOM WEIGHT FABRIC

SHIRTING FABRIC

YARN DYED FABRIC BED SHEETS


MAJOR EXPORT DESTINATION

77%

14% 9%

EUROPEU.S.A.OTHERS


QUALITY ASSURANCE

Jindal maintains the high quality standards across all its division from the raw material stage to the finishing stage, the entire Product Life Cycle is Managed and monitored Quality Control export team.

We have done a massive investment in ISO 9001 compliant world-class testing lab to reflect the Jindal’s Commitment towards maintaining global standards.

We believe in proving ourselves best at our commitment to our customers and providing them efficient Services and Qualities. We have strong track record of On-Time Deliveries and high customer satisfaction ratio which has helped us to become the market leader in Textile Domain.

Jindal adheres to International quality standards and inspection procedures - a fact underscored by the repeat orders the company has been receiving for decades now from its worldwide clientele.As a mark of Quality assurance & its commitment to total customer satisfaction, the company has achieved the ISO 9001: 2000 certification & since then company has been strictly following the guidelines in order to implement Total Quality Management.


3.2: PROFILE OF ARVIND MILLS LIMITED

1930- Swadesi Movement

The aim was to indigenously produce fine and superfine cotton fabric as well as traditional material for vast potential Indian market. At this juncture, The Arvind Mills was set up with the pioneering effort of three brothers Kastuarbhai, Narrotambhai and Chimanbhai.

During the 1980s several mills in Ahmadabad closed down As a result of competition from cheaper cloth produced by small power loom enterprises. Militancy spurred by textile labor unions prevented the shutdown of several loss-making mills, and in the mid 1980s Ahmadabad was a city of industrial strife. Arvind Mills has risen like a phoenix from the ashes of Ahmadabad textile mills. In just eight years it has successfully implemented a turnaround strategy.

Established in 1930, an Arvind Mills Limited is the Flagship Company of $ 498 million. Lalbhai Group has now focused its attention on few selected core products groups. Such a focus seemed pertinent to prepare the company for playing a dominant role in the global market.


Arvind today a one-stop shop for all cotton fabric requirements, where products range spans the entire gamut of cotton fabric. It is also a rapidly expanding manufacturer of garments such as jeans and shirts. With the best technology and business acumen Arvind Mills became the true multinational producing the finest fabric available in the country that rivaled imported fabric. Since then, there has been no looking back.

Having established itself as India’s largest denim manufacturer and third largest denim producer in the world, Arvind Mills is confident that in the near future it will become the first largest denim producer in the world.

JOURNEY OF ARVIND MILLS

1931 The inception of Arvind Mills Limited at the hands of three brothers - Kasturbhai, Narottambhai and Chimanbhai Lalbhai.

1934 Arvind establishes itself amongst the foremost textile units in the country.

1980 Arvind records highest levels of profitability. The new strategy – ‘Reno vision’, points at changing the business focus from local to global, towards a high-quality premium niche market.

1987-88

Arvind enters the export market for Denims with a dual focus - Denim for leisure and Denim for fashion wear.

1991 Arvind emerges as the third largest manufacturer of denim in the world.

1997 India’s largest state-of-the-art facility for shirting, gabardine and knits is set up at Santej.


2005 Arvind creates a unique one-stop shop service on a global scale, offering garment packages to reputed national and international customers.

2007 Arvind expands its presence in the brands and retail segment by establishing MegaMart – One of India’s largest value retail chains.

2010 Arvind launches The Arvind Store, a concept putting the company’s best fabrics, brands and bespoke styling and tailoring solutions under one roof. Arvind launches its first major Real Estate projects. Arvind becomes one of India’s largest producers of fire protection fabrics.

PRODUCTS OF ARVIND MILLSPRODUCTS OF ARVIND MILLS

Portfolio

Denim

Shirting

Garment

Brand/Retail

Others


3.3: PROFILE OF AARVEE DENIM

Aarvee Denims and Exports Ltd is a leading global player in the textile industry. Being backed by experienced promoters, the company is spreading its wings all over the globe at a very fast pace. Established in 1988 by Arora & VB Group, which has been involved in textile trade for over 50 years, are the forces behind this dynamic organization.

Amtex India Private Limited was incorporated on 28th March 1988 and the commercial production of Denim fabric was started in 1989.

The company was converted into a Public Limited company and the name was changed to Amtex India


Limited vide special resolution passed u/s 21,31,44 (2)(b) at the Companies Act, 1956 on 2.4.1992 and the company obtained a fresh certificate of incorporation consequent to the change of name to Aarvee Denims & Exports Limited on 7.4.1994.

More than five decades of experience, well qualified human resources and state of the art production units have made “ADEL” today World’s one of the largest Vertically Integrated Denim Mill.

PRODUCTS OF AARVEE DENIM

DENIM FABRIC

GARMENT


3.4: PROFILE OF K.G.DENIM

K G Denim Ltd. (KGDL) was incorporated on June 25, 1992 under the Companies Act, 1956. KGDL has its registered office at Then Thirumalai, Mettupalayam, Coimbatore District, Tamil Nadu. The company was promoted by K. Govindaswamy Naidu and his sons including KG Baalakrishnan and went public in the year 1993.

KGDL is a premier denim and apparel fabric manufacturer, whose products are supplied to leading jeans wear makers, fashion brands and retailers


worldwide. It sells its products under the trade mark Indigo Fabrics with various lines like Strength, Pride, Ecstasy, Fortune and Passion and Trigger for readymade jeans.

KGDL has recently entered the home textiles market to provide innovative and specialized products for beds, blankets, pillow cases and duvet/ comforter covers.

The company has two wholly owned subsidiaries (a) Trigger Apparels Limited (b) K G Denim (USA) Inc. K G Denim (USA) Inc is yet to commence commercial operations. Trigger Apparels Limited markets Trigger branded garments in the domestic market. It commenced operations in the domestic marketing during 2005-06.The products are well sought after by leading Jeanswear makers, fashion brands and Retailers worldwide.

KG Denim sells its products under the trade mark Indigo Fabrics, with various lines like Strength, Pride, Ecstasy, Fortune and Passion.

KG Denim now has entered the home textiles market to provide innovative and specialized products for Beds, Blankets, pillow cases and Duvet/comforter covers.

KG Denim is part of textile group having annual turnover of $150 million and the company currently manufactures

24 million meters of denim fabrics

12 million meters of cotton fabrics

2 million equivalent sheet sets of made-ups

3 million jeans & trousers.

KG Denim has spinning equipments from Trutzchler & Lakshmi Rieter to produce some of the most demanding yarns required to weave fashion fabric for various applications.


PRODUCTS OF K.G. DENIM


DenimHome textile

• Bed sheets

• Denim sheets -

• Yarn dyed sheets

• back cushions

• Pillow covers

• Yarn dyed blankets

Bath range• Towels

• Piece dyed (single colour towels)

• Yarn dyed (multi-coloured towels with single colour in a strip)

• Blanket range

• Shower curtains

Kitchen• Napkins & table linens• Hospitality products


CHAPTER:4 FINANCIAL EVALUATION OF JINDAL LIMITED


4.1 OVERVIEW OF BALANCE SHEETS

The company has not issued new equity shares in the past 3 years.

There is remarkable increase in the Reserves & surpluses in the past 3 years as the net profit is increased and profit is reinvested and net profit is not distributed as dividends.

The company has paid most of long term debts which results into decrease in Secured loans & unsecured loans.

The company has made investment of Rs.449.43 lacs in equity shares & preference shares.

There is an increase in amount of debtors as the company has an increase in sales.

There is decrease in loans & advances (current assets) as the company has got the receipts of outstanding loans & advances and it results increase in Cash balance.


4.2 OVERVIEW OF PROFIT & LOSS ACCOUNT

There is noticeable increase in Sales as the company has increased debtors collection period which results decrease in stocks.

But there is also an increase in cost of material & direct expenses as the production has also increased.

There is significant increase in financial charges due to interest on delay payment of income tax & interest on TDS .

Depreciation has is also increased as the fixed assets are also increased.

The profit is increasing as the sales has also increased and there is decrease in administration expenses & selling & distribution expenses.



4.3 CONCEPT OF RATIO ANALYSIS

Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry.

To do this compare your ratios with the average of businesses similar to yours and compare your own ratios for several successive years, watching especially for any unfavorable trends that may be starting.

Ratio analysis may provide the all-important early warning indications that allow you to solve your business problems before your business is destroyed by them.

The Balance Sheet and the Statement of Income are essential, but they are only the starting point for successful financial management. Apply Ratio Analysis to Financial Statements to analyze the success, failure, and progress of your business.

Importance of financial statement analysis in an organization.

In our money-oriented economy, Finance may be defined as provision of money at the time it is needed. To everyone responsible for provision of funds, it is problem of securing importance to so adjust his resources as to provide for a regular outflow of expenditure in face of an irregular inflow of income.

1. The profit and loss account (Income Statement).2. The balance sheet

In companies, these are the two statements that have been prescribed and their contents have been also been laid down by law in most countries including India.


There has been increasing emphasis on(a) Giving information to the shareholder in such a manner

as to enable them to grasp it easily.(b) Giving much more information e.g. funds flow

statement, again with a view to facilitating easy understanding and to place a year results in perspective through comparison with post year results.

(c) The directors report being quite comprehensive to cover the factors that have been operating and are likely to operate in the near future as regards to the various functions of production, marketing, finance, labour, government policies, environment in general.

Financial statements are being made use of increasingly by parties like Bank, Governments, Institutions, and Financial Analysis etc. The statement should be sufficiently informative so as to serve as wide a curia as possible.

The financial statement is prepared by accounts based on the activities that take place in production and non-production wings in a factory. The accounts convert activities in monetary terms to the help know the position.

Uses of Financial Statement Analysis

The main uses of accounting statements for:-

Executives: - To formulate policies.

Bankers: - To establish basis for Granting Loans.

Institutions \ Auditors: - To extend Credit facility to business.

Investors : - To assess the prospects of the business and to know

whether they can get a good return on their investment.

Accountants: - To study the statement for comparative purposes.


Government Agencies: - To study from an angle of tax collection duty levee etc.

OBJECTIVES

Analysis of financial statements is an attempt to assess the efficiency and performance of an enterprise. For that there are some objectives which are described as under.

1. EARNING CAPACITY OR PROFITABILITY

The overall objective of a business is to earn a satisfactory return on the funds invested in it. Financial analysis helps in ascertaining whether adequate profits are being earned on the capital invested in the business or not. It also helps in knowing the capacity to pay the interest and dividend.

2. COMPARATIVE POSITION IN RELATION TO OTHER FIRMS

The purpose of financial statements analysis is to help the management to make a comparative study of the profitability of various firms engaged in similar business. Such comparison also helps the management to study the position of their firm in respect of sales expenses, profitability and using capital.etc.

3. EFFICIENCY OF MANAGEMENT

The purpose of financial statement analysis is to know that the financial policies adopted by the management are efficient or not. Analysis also helps the management in preparing budgets by forecasting next year‘s profit on the basis of past earnings. It also helps the management to


find out shortcomings of the business so that remedial measures can be taken to remove these shortcomings.

4. FINANCIAL STRENGTH

The purpose of financial analysis is to assess the financial potential of business. Analysis also helps in taking decisions; I. Whether funds required for the purchase of new

machinery and equipments are provided from internal resources of business or not.

II. How much funds have been raised from external sources.

5. SOLVECNY OF THE FIRM The different tools of analysis tell us whether the firm has sufficient funds to meet its short-term and long-term liabilities or not.


IMPORTANCE

Ratio analysis is an important technique of financial analysis. It is a means for judging the financial health of a business enterprise. It determines and interprets the liquidity, solvency, profitability, etc. of a business enterprise.

It becomes simple to understand various figures in the financial statements through the use of different ratios. Financial ratios simplify, summarize, and systemize the accounting figures presented in financial statements.

With the help of ratio analysis, comparison of profitability and financial soundness can be made between one industry and another. Similarly comparison of current year figures can also be made with those of previous years with the help of ratio analysis and if some weak points are located, remedial measures are taken to correct them.

If accounting ratios are calculated for a number of years, they will reveal the trend of costs, sales, profits and other important facts. Such trends are useful for planning.


Financial ratios, based on a desired level of activities, can be set as standards for judging actual performance of a business.

Ratio analysis discloses the position of business with different viewpoint. It discloses the position of business with liquidity viewpoint, solvency view point, profitability viewpoint, etc. with the help of such a study; we can draw conclusion regarding the financial health of business enterprise.

ADVANTAGES

Ratio analysis is an important and age-old technique of financial analysis. The following are some of the advantages of ratio analysis:

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

2. Facilitates inter-firm comparison: It provides data for inter-firm comparison. Ratios highlight the factors associated with successful and unsuccessful firm. They also reveal strong firms and weak firms, overvalued and undervalued firms.

3. Helps in planning: It helps in planning and forecasting. Ratios can assist management, in its basic functions of forecasting. Planning, co-ordination, control and communications.


4. Makes inter-firm comparison possible: Ratios analysis also makes possible comparison of the performance of different divisions of the firm. The ratios are helpful in deciding about their efficiency or otherwise in the past and likely performance in the future.

5. Help in investment decisions: It helps in investment decisions in the case of investors and lending decisions in the case of bankers etc.

LIMITATIONS

The ratios analysis is one of the most powerful tools of financial management. Though ratios are simple to calculate and easy to understand, they suffer from serious limitations.

1. Limitations of financial statements: Ratios are based only on the information which has been recorded in the financial statements. Financial statements themselves are subject to several limitations. Thus ratios derived, there from, are also subject to those limitations.

2. Comparative study required: Ratios are useful in judging the efficiency of the business only when they are compared with past results of the business. However, such a comparison only provide glimpse of the past performance and forecasts for future may not prove correct since several other factors like market conditions, management policies, etc. may affect the future operations.

3. Problems of price level changes: A change in price level can affect the validity of ratios calculated for different time periods. In such a case the ratio analysis may not clearly indicate the trend in solvency and profitability of the company. The financial statements, therefore, be adjusted keeping in view the price level changes if a meaningful comparison is to be made through accounting ratios.


4. Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There are no well accepted standards or rule of thumb for all ratios which can be accepted as norm. It renders interpretation of the ratios difficult.

5. Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To make a better interpretation, a number of ratios have to be calculated which is likely to confuse the analyst than help him in making any good decision.

6. Personal bias: Ratios are only means of financial analysis and not an end in itself. Ratios have to interpret and different people may interpret the same ratio in different way.

7. Incomparable: Not only industries differ in their nature, but also the firms of the similar business widely differ in their size and accounting procedures etc. It makes comparison of ratios difficult and misleading.

TYPES OF RATIOS

1. Liquidity ratios

2. Turnover Ratios

3. Leverage Ratios

4. Profitability Ratios


5. Solvency Ratios

1.LIQUIDITY RATIOS:-

Liquidity refers of the ability of a firm to meet its obligation in the short run, usually one year or when they become duration for payment.

A proper balance between liquidly and profitability is required for efficient Financial Management.


Liquidity ratios are based on the relationship between current assets the sources for meeting short-term obligation and current liabilities.

The ratios, which indicate the liquidity of a firm, are: -

A. Current Ratio. B. Acid test Ratio.

(Amount in lacs only)

CURRENT RATIO

Current Assets/Current Liability

JINDAL LTD.

Year 2009-10 2010-11 2011-12

C.A 12961.33 19708.31 18265.32

C.L 4324.76 7218.39 13328.29

Ratio 2.9970 2.7303 1.3704

AARVEE DENIMS

Year 2009-10 2010-11 2011-12


C.A 17257.78 22756.54 30797.31

C.L 5323.78 9,007.00 34512.01

Ratio 3.2416 2.5265 0.8924

K.G.DENIM

Year 2009-10 2010-11 2011-12

C.A 12135.39 14575.11 15643.14

C.L 7045.49 8,216.05 15086.62

Ratio 1.7224 1.7740 1.0369

ARVIND MILLS

Year 2009-10 2010-11 2011-12

C.A 148,000.00

180,607.00

164,479.00

C.L 44080 63,851.00 183,510.00

Ratio 3.36 2.8286 0.8963


jindal aarvee denim k.g.denim arvind mills0

0.5

1

1.5

2

2.5

3

3.5

4

2009-102010-112011-12

Interpretation:

Current Ratio of the firm measures its short-term solvency, which indicates the rupees of current assets available for each rupee of current liability. The current ratio represents a margin of safety for creditors. Ideal of current ratio is 2:1 in normal condition.

Here in Case of Jindal current ratio of 2009-10 is much high which is around 3 times which indicates unproductive money in business. But in later year it is reduce to 2.73 times due to Current Assets increased more than Current Liability Increase. In year 2011-12 it reduced to 1.37 times due to Current Liability increase more than Current Assets. It is not good for business there may be create problem of shortage of working capital.

While the other companies like Arvee denims, K.G. denims and Arvind mills there are not ideal current ratio in any of the company.

In Arvee denim’s current ratio is constantly reduced, it shows better investment of surplus money. Arvind mill‘s current ratio is highly fluctuated.


LIQUID RATIO

The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best measures of liquidity. It is figured as shown below:

Liquid Assets/Liquid Liability

An acid-test of 1:1 is considered satisfactory unless the majority of your "quick assets" are in accounts receivable, and the pattern of accounts receivable collection lags behind the schedule for paying current liabilities.

JINDAL LTD.

Year 2009-10 2010-11 2011-12

C.A-Inventory

12961.33 19708.31 14450.78

C.L- B.O.D 4324.76 7218.39 13328.29

Ratio 2.9970 2.7303 1.0842

AARVEE DENIMS

Year 2009-10 2010-11 2011-12

C.A-Inventory

10055.22 11721.18 18450.52

C.L- B.O.D 5323.78 9,007.00 34512.01


Ratio 1.8887 1.3013 0.5346

K.G.DENIM:

Year 2009-10 2010-11 2011-12

C.A-Inventory

6387.49 5786.01 5460.7

C.L- B.O.D 7045.49 8,216.05 15086.62

Ratio 0.9066 0.7042 0.3620

ARVIND MILLS

Year 2009-10 2010-11 2011-12

C.A-Inventory

104,800.00 110,691.00 91,637.00

C.L- B.O.D 44,080.00 63,851.00 183,510.00

Ratio 2.3775 1.7336 0.4994


Jindal A.D K.G Arvind0.0000

0.5000

1.0000

1.5000

2.0000

2.5000

3.0000

3.5000

2009-102010-112011-12

Interpretation:

This Rario focus on the availibility of cash to manage the day to day operation of the company. Liquid ratio shows the Amount of cash available to meet immediate payments.

In case of Jindal Liquid Ratio is much more high in year 2009-10 & 2010-11 but it is reduce in 2011-12 due to current liability is increase compare to Current Assets.

While in case of other organizations there is constant decrease in liquid ratio that shows the poor liquidity.

From all the organization Jindal has better Liquidity compare to others in year 2011-12.


2.TURN OVER RATIOS:-

Turnover Ratios are also referred to as Activity ratio or Assets Management ratios. This ratio establishes relationship between the level of activity represented by sales or cost of goods sold and levels of various assets.

DEBTORS TURNOVER RATIO

The debtor s turnover ratio is determined by dividing the net credit sales by average debtors outstanding during the year.

NOTE: - Here there is no specification about net credit purchase and average debtors so, assume that (net credit sales = net sales) (Average debtors = debtors) The main function of this ratio is to measure how rapidly debts are collected. A high ratio is indicative of shorter time lag between credit sales and cash collection. A low ratio indicates that debts are not being collected rapidly.


Net Sales/Debtors

JINDAL

Year 2009-10 2010-11 2011-12

Net Sales 28925.48 36576.2 50210.94

Debtors 2376.87 3424.34 4531.75

Ratio 12.1696 10.6812 11.0798

AARVEE DENIMS:

Year 2009-10 2010-11 2011-12

Net Sales 37477.47 48751.98 66139.3

Debtors 7883.19 9,104.38 13461.55

Ratio 4.7541 5.3548 4.9132

K.G.DENIM:

Year 2009-10 2010-11 2011-12

Net Sales 25850.64 32723.48 40007.44


Debtors 3129.11 2,748.79 2374.94

Ratio 8.2613 11.9047 16.8457

ARVIND MILLS:

Year 2009-10 2010-11 2011-12

Net Sales 225,249.00 260761 329814

Debtors 42,416.00 56,363.00 40,555.00

Ratio 5.3105 4.6265 8.1325

jindal aarvee denim k.g.denim arvind mills0

2

4

6

8

10

12

14

16

18

2009-102010-112011-12

Interpretation:


Higher Debtor turnover Ratio is good because more higher debtors turnover ratio means more fastly, we are collecting money. Lower Debtor turnover ratio is not good because it tells that we have not manage debtors better way. Money from debtors are not collected fastly.

In case of jindal there is decrease in debtors turnover ratio due to sales increase. But debtors ratio is increasing in the current year which shows decrease in debtors collection period. While in the case of Aarvee denim there is fluctuation in debtors turnover ratio because debtors increases higher than sales increases.

While in case of K.G.Denim and Arvind mill, there is constatnt increase in Debtors turnover ratio that shows better management of debtors.

From all the organisations K.G Denims has better way of manage debtors in year 2011-12.

CREDITORS TURN OVER RATIO

Creditor‘s turnover ratio is a rate between net purchase and average amount of creditor Outstanding during the year.

Net Purchase/Creditor

A low turnover ratio reflects liberal terms granted by suppliers, while a high turnover ratio shown that accounts are settled rapidly.

The creditor‘s turnover ratio is an important tool as a firm can reduce its requirement of current assets by relying on suppliers creditors.


The intent to which trade creditors are willing to wait for payment can be approximated by the creditors’ turnover ratio. NOTE: - Here, there is no specification about net credit purchase and average of creditors, So, let assume that, (net credit purchase = Net Purchase)

(Average of creditors = creditors)

JINDAL

Year 2009-10 2010-11 2011-12

Net purchase

19145.92 25037.11 31626.56

Creditors 2515.47 4560.14 3935.99

Ratio 7.6113 5.4904 8.04

AARVEE DENIM

Year 2009-10 2010-11 2011-12

Net purchase

20355.93 29024.34 44421.8

Creditors 3232.11 6,622.49 6548.91

Ratio 6.2980 4.3827 6.7831


K.G.DENIM

Year 2009-10 2010-11 2011-12

Net purchase

25850.64 21362.96 24237.94

Creditors 5738.06 6,838.90 8254.75

Ratio 4.5051 3.1237 2.9362

ARVIND MILLS:

Year 2009-10 2010-11 2011-12

Net purchase

96,873.00 129,015.00 156,879.00

Creditors 34,784.00 42,456.00 50,385.00

Ratio 2.7850 3.0388 3.1136


1 2 3 40

1

2

3

4

5

6

7

8

9

2009-102010-112011-12

Interpretation:

Higher Creditor Turnover Ratio is good because it will decrease the average payment period. From the above ratio new creditors will take the decision whether togive goods on credit or not.

In case of K.G.Denim, there is constant decrease in Creditor turnover ratio. Reason for that is increase in payment period to creditors that also affect the goodwill of both.

In case of Aarvee Denims there is fluctuation in creditors turnover ratio due to no fixed period follow by aarvee for payment to creditors.

In case of jindal ltd. there is an increase in creditors ratio which shows that there is an increase in creditors period.

In case of Arvind mill there is constant increase in ratio that shows decrease in payment period that increase goodwill of company.

Jindal ltd.’s Creditor turnover ratio is better than others because they have lower payment period in year 2011-12 compare to others.


FIXED ASSETS TURNOVER RATIO

The ratio measures the extent of turnover or volume of gross income generated by the fixed assets of a company or in other words the efficiency in their utilization.

Net Sales/Net Assets

JINDAL

Year 2009-10 2010-11 2011-12

Net Sales 28925.48 36576.2 50210.94

Net Assets 8154.84 9034.3 9034.30

Ratio 3.5470 4.0486 5.5781

AARVEE DENIMS:

Year 2009-10 2010-11 2011-12

Net Sales 37477.47 48751.98 66139.3

Net Assets 28735.17 31,605.84 38393.14


Ratio 1.3042 1.5425 1.7227

K.G.DENIM

Year 2009-10 2010-11 2011-12

Net Sales 25850.64 32723.48 40007.44

Net Assets 11210.9 10,025.51 9345.37

Ratio 2.3058 3.2640 4.2810

ARVIND MILLS

Year 2009-10 2010-11 2011-12

Net Sales 225,249.00 260761 329814

Net Assets 191,811.00 200,196.00 226,284.00

Ratio 1.1743 1.3025 1.4575


jindalA.D.

K.G.ARVIND

0

1

2

3

4

5

6

2009-10

2010-11

2011-12

2009-102010-112011-12

Interpretation:

This ratio compares sales revenue to Fixed assets. This ratio tells us how effectively and efficiently a company is using its fixed assets to generate revenues.

All the organisations Fixed assets turnover ratio is increase constantly year to year because sales increase higher rate than fixed assets increase.

From all organisation Jindal is most effective and efficient company in using its Fixed assets to generate revenues.


3.LEVERAGE RATIOS

These ratios refer to the use of debt finance long term solvency of the firm can be examined by using leverage or capital ratios.

The leverage ratio or capital structure ratio can be defined as the financial ratios which throw light on the long term solvency of a firm reflected in its ability to assure the long term creditors with regards to.

Periodic payment of interest during the period of loan.

Repayment of Principe on maturity or in predetermined installments at due dates.

DEBT-EQUITY RATIO

This ratio reflects the relative claims of creditors and share holders against the assets of the firm, debt equity ratios establishment relationship between borrowed funds and owner capital to measure the long term financial solvency of the firm. The ratio indicates the relative proportions of debt and equity in financing the assets of the firm.


Debt/Equity

JINDAL

Year 2009-10 2010-11 2011-12

Debt 9182.81 12448.5 4010.52

Equity 7505.85 8683.15 10036.34

Ratio 1.2234 1.4336 0.3996

AARVEE DENIMS

Year 2009-10 2010-11 2011-12

Debt 23137 25571.1 10160.62

Equity 16395.54 19,865.34 21478.99

Ratio 1.4112 1.2872 0.4730

K.G.DENIM:

Year 2009-10 2010-11 2011-12

Debt 11735.6 11238.11 4436.73

Equity 4268.55 4,718.36 4999.37

Ratio 2.7493 2.3818 0.8875


ARVIND MILLS

Year 2009-10 2010-11 2011-12

Debt 187,058.00 181,212.00 70,735.00

Equity 142,000.00 179,551.00 202,019.00

Ratio 1.3173 1.0093 0.3501


0.5000

1.0000

1.5000

2.0000

2.5000

3.0000

2009-102010-112011-12

Interpretation:

This ratio measures the proportion of equity and debt used to finance a company’s assets. Higher the ratio shows outsider creditors have a larger claim than the owners of the business.

A high ratio typically shows that the company aggressively financed its growth through debt. And the interest paid on debt creates adverse effect on earnings.


In all the organizations there is constant decrease in debt equity ratio because there is constant decrease in debt year to year.

From all the organizations Arvind mill has lower ratio compare to others in year 2011-12 which shows Arvind mills financed its growth through Equity.

PROPRIETARY RATIO

This ratio indicates the capital contributed by the proprietors or owners

Owners Fund/ Total Fund *100

JINDAL

Year 2009-10 2010-11 2011-12

Owner's Fund

7505.85 8683.15 10036.34

Total Fund 17701.31 22311.33 15352.33

Ratio 42.4028 38.9181 65.3734

AARVEE DENIMS


Year 2009-10 2010-11 2011-12

Owner's Fund

16395.54 19,865.34 21478.99

Total Fund 42357.5 48,410.86 60913.34

Ratio 38.7075 41.0349 35.2616

K.G.DENIM

Year 2009-10 2010-11 2011-12

Owner's Fund

4268.55 4,718.36 4999.37

Total Fund 16844.95 17,019.63 26621.88

Ratio 25.3402 27.7230 18.7792

ARVIND MILLS

Year 2009-10 2010-11 2011-12

Owner's Fund

142,000.00 179,551.00 202,019.00

Total Fund 330,340.00 362,045.00 462,497.00

Ratio 42.9860 49.5936 43.6801



10.0000

20.0000

30.0000

40.0000

50.0000

60.0000

70.0000

2009-102010-112011-12

Interpretation:

Proprietory Ratio indicates financial position of the company and therefore this ratio called good if it is high because that shows company has enough capital to repay its debt.

In case of Jindal, Aarvee denims, K.G Denims and Arvind Mills there is fluctuation in Proprietory Ratio due to increase in equity fund is not same as increase in total fund in all 3 years.

From all the organisations Jindal’s Proprietory ratio is better compare to others in year 2011-12 which is around 65% is Equity Fund.


4.RETURN ON INVESTMENT

RETURN ON NET WORTH

(P.A.T- Preference Dividend)/ (Owner's Fund-Misc. Exp. Not Written off)*100

JINDAL

Year 2009-10 2010-11 2011-12

PAT- P.D 732.44 1349.16 1504.72

Net Owner's

Fund

7427.14 8630.07 10008.7

Ratio 9.8617 15.6332 15.0341


AARVEE DENIMS

Year 2009-10 2010-11 2011-12

PAT- P.D 2314.42 3343.88 1403.22

Net Owner's

Fund

16336.83 19801.56 21382.24

Ratio 14.1669 16.8870 6.5625

K.G.DENIM

Year 2009-10 2010-11 2011-12

PAT- P.D 1.694 449.81 737.07

Net Owner's

Fund

4268.55 4,718.36 4999.37

Ratio 0.0396 9.5332 14.7433

ARVIND MILLS

Year 2009-10 2010-11 2011-12

PAT- P.D 5200 13480 43423

Net 142000 179551 202019


Owner's FundRatio 3.6620 7.5076 21.4945

jindal A.D. K.G. ARVIND0

5

10

15

20

25

2009-102010-112011-12

Interpretation:

It shows what percentage of profit is earned on Capital invested by ordinary share holders.

In case of Aarvee denims, there is Fluctuation in Return on Investment because the rate at which return increase is not same as increase in Equity fund in year 2009-10 & 2010-11. In year 2011-12, there is decrease of return while equity used for get return is higher than 2010-11.

In case of Jindal there is minor decrease in return on investment.

In case of K.G. Denim and Arvind mills there is Constant increase in return on investment in Equity year to year.

From all organization Arvind mill has better return on investment compare to other organizations in year 2011-12.


EPS

(P.A.T- Preference Dividend)/ Weighted Average No of Equity Shares

JINDAL

Year 2009-10 2010-11 2011-12

PAT- P.D 732.44 1349.16 1504.72

Weighted Avg No of 200.52 200.52 200.52


SharesRatio

3.6527 6.7283 7.5041

AARVEE DENIMS

Year 2009-10 2010-11 2011-12

PAT- P.D 2314.42 3343.88 1403.22

Weighted Avg No of Shares

350 350 350

Ratio 6.6126 9.5539 4.0092

K.G.DENIM

Year 2009-10 2010-11 2011-12

PAT- P.D 16.94 449.81 773.07

Weighted Avg No of

Shares

310 310.00 310

Ratio 0.0546 1.4510 2.4938


ARVIND MILLS

Year 2009-10 2010-11 2011-12

PAT- P.D 5200 13480 43423

Weighted Avg No of Shares

5650 5650 5650

Ratio 0.9204 2.3858 7.6855


2.0000

4.0000

6.0000

8.0000

10.0000

12.0000

E.P.S

2009-102010-112011-12

Name of the Organization

Ratio

Interpretation:

EPS shows howmuch net profit producing by one share of the company. Higher EPS is better because it will increase the value of share.


In case of Jindal, K.G Denims and Arvind mill, there is constant increase in Earning per share year to year. But in case of Arvind mill the increase rate is higher than Jindal and K.G Denims. While in Aarvee Denim, EPS is fluctuate year to year.

From all the organizations, EPS of Arvind mill is better because it is increased at higher rate. In year 2011-12 EPS is Rs 7.68/share.


CASH EARNING PER SHARE

(P.A.T- Prefrence Dividend + Non Cash Expenses)/ Weighted Average No of Equity Shares

JINDAL

Year 2009-10 2010-11 2011-12

PAT- P.D + Non Cash

Exps. 1168.31 1832.95 2051.11Weighted Avg No of

Shares 200.52 200.52 200.52

Ratio 5.8264 9.1410 10.2290

AARVEE DENIM

Year 2009-10 2010-11 2011-12

PAT- P.D + Non Cash


Shares 350 350 350

Ratio 13.2435 16.2886 11.3499


K.G.DENIM

Year 2009-10 2010-11 2011-12

PAT- P.D + Non Cash


Shares 310 310.00 310

Ratio 4.2174 5.6224 6.7143

ARVIND MILLS

Year 2009-10 2010-11 2011-12

PAT- P.D + Non Cash

Exps. 16580 25096 56474Weighted Avg No of

Shares 5650 5650 5650

Ratio 2.9345 4.4418 9.9954



2.0000

4.0000

6.0000

8.0000

10.0000

12.0000

14.0000

16.0000

18.0000

Cash E.P.S

2009-102010-112011-12


Ratio

Interpretation:

Cash EPS shows cash flow generated by company on a per share basis. The higher the cash EPS, the better it is considered to have performed over the period.

In case of Jindal, K.G Denims and Arvind mill, there is constant increase in Cash Earning per share year to year. But in case of Arvind mill the increase rate is higher than Jindal and K.G Denims. While in Aarvee Denim, Cash EPS is fluctuate year to year.

From all the organizations, Cash EPS of Arvind mill is better because it is increased at higher rate. In year 2011-12 EPS is Rs. 9.9954/share.



5.SOLVENCY RATIO

INTEREST COVERAGE RATIO

EBIT/Interest

JINDAL

Year 2009-10 2010-11 2011-12

EBIT 1876.71 3016.98 3324.59

Interest 792.95 1112.08 1610.12

Ratio 2.3667 2.7129 2.0648

AARVEE DENIMS

Year 2009-10 2010-11 2011-12

EBIT 4303.78 5957.31 5150.19

Interest1265.25 1,651.92 2931.32

Ratio 3.4015 3.6063 1.7570


K.G.DENIM

Year 2009-10 2010-11 2011-12

EBIT 1809.28 2314.11 3091.79

Interest1712.67 1,638.09 1987.35

Ratio 1.0564 1.4127 1.5557

ARVIND MILLS

Year 2009-10 2010-11 2011-12

EBIT 20,299.00 30,492.00 44,814.00

Interest15,099.00 17,012.00 21,185.00

Ratio 1.3444 1.7924 2.1154


JindalA.D

K.GArvind

0.0000

0.5000

1.0000

1.5000

2.0000

2.5000

3.0000

3.5000

4.0000

Interest Coverage Ratio

2009-102010-112011-12


Ratio

Interpretation:

Interest coverage ratio shows how easily a company can pay interest on outstanding debt. The lower the ratio, the more burderned by debt expense. An interest coverage ratio below 1 indicates the company is not generating sufficient revenue to satisfy interest expenses.

In case of Jindal and Aarvee denim, there is fluctuation in interest coverage ratio year to year. In both the organization in year 2011-12 this ratio is decreased compare to previous year. That shows not generating sufficient revenue for payment of interest.

In case of K.G Denim and Arvind mill, there is Constant increase in this ratio but in case of Arvind mill this ratio increase at higher rate compare to K. G denim.

From all the organization, Arvind mill has better interest coverage ratio in year 2011-12 which is 2.11 times.


6.PROFITABILITY RATIO

A class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well.

Some examples of profitability ratios are profit margin, return on assets and return on equity. It is important to note that a little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios.

GROSS PROFIT RATIO

Gross Profit/Sales*100

JINDAL

Year 2009-10 2010-11 2011-12

Gross Profit 3218.24 4912.14 15649.13

Sales 28925.48 36576.2 50210.94

Ratio 11.1260 13.4299 31.1667


AARVEE DENIMS

Year 2009-10 2010-11 2011-12

Gross Profit 10229.97 13177.16 24684.49

Sales 37477.47 48751.98 66139.30

Ratio 27.2963 27.0290 37.3220

K.G.DENIM

Year 2009-10 2010-11 2011-12

Gross Profit 3452 3911 4735

Sales 25850.64 32723.48 40007.44

Ratio 13.3536 11.9517 11.8353

ARVIND MILLS

Year 2009-10 2010-11 2011-12

Gross Profit 131,238.00 150,198.00 201,949.00

Sales 225,249.00 260761 329814

Ratio 58.2635 57.5999 61.2312


jindalA.D.

K.G.ARVIND

0

10

20

30

40

50

60

70

2009-10

2010-11

2011-12

2009-102010-112011-12

Interpretation:

G.P Ratio indicates to what extent the s.p of goods per unit may be reduced without incurring losses in operations.

In case of Aarvee denims and Arvind mill, there is Fluctuation in G.P Ratio but in case of Jindal G.P Ratio is increase constant year to year due to better cost conrol. While in case of K.G Denim there is constant Decrease in G.P Ratio due to Cost of goods Produced is increase yaer to year.

From all the Organisation Arvind mill has better G.P Ratio compare to others in year 2011-12.


NET PROFIT RATIO

Net Profit/Sales*100

JINDAL

Year 2009-10 2010-11 2011-12

Net Profit 732.45 1349.15 1504.72

Sales 28925.48 36576.2 50210.94

Ratio 2.5322 3.6886 2.9967

AARVEE DENIMS

Year 2009-10 2010-11 2011-12

Net Profit 2297 3344 1403

Sales 37477.47 48751.98 66139.3

Ratio 6.1290 6.8592 2.1213


K.G.DENIM

Year 2009-10 2010-11 2011-12

Net Profit 16.94 449.81 737.07

Sales 25850.64 32723.48 40007.44

Ratio 0.0655 1.3746 1.8423

ARVIND MILLS

Year 2009-10 2010-11 2011-12

Net Profit 5,200.00 13,480.00 43,423.00

Sales 225,249.00 260761 329814

Ratio 2.3086 5.1695 13.17


2.0000

4.0000

6.0000

8.0000

10.0000

12.0000

14.0000

2009-102010-112011-12


Interpretation:

N.P.Ratio indicates how efficent the company is and how well it controls its cost.

In case of jindal and Aarvee Denims there is fluctuation in N.P Ratio due tolack of proper management of operating Expenses. While in case of K.G. denims and Arvind mill , there is constant increase in N.P Ratio due to better mangement of operating expenses. In Arvind mill, there is increase N.P Ratio at higher rate compare to K.G. Denims.

From all the organisations, Arvind Mill’s N.P Ratio is better compare to others which is around 13% in year 2011-12.


CHAPTER: 5 FINDINGS

In the year 2011-12, Jindal has the higher current ratio compared to other companies. In other companies they have more current liabilities than the current assets. It shows that Jindal has the power to meet short term obligations. There is decrease in the current ratio from 2.7303 to 1.3704 in Jindal ltd. , which is around 50%. But there is high fluctuation in the current ratio of Aarvee Denim & K.G. Denim and in Arvind mills the ratio has been decreased by 60%.

We can observe that there is decrease in the liquidity by 71% in Arvind mills and 60% in Aarvee Denim where as in K.G. Denim the liquidity has been decreased only by 49%. Though the liquidity ratio of Jindal is 1.0842. By observing the trend of all the companies, we can observe that Jindal has better liquidity than the other companies and other companies are suffering from poor liquidity.

There is constant increase in the ratio of Debtor’s turnover ratio of K.G. Denim. In case of jindal there is decrease in debtors turnover ratio due to sales increase in the past financial year. But debtors ratio is increasing in the current year which shows decrease in debtors collection period. K.G. Denim is managing the debtors in a better way as the collection of money from debtors is fast than the other companies.

In case of jindal ltd. there is an increase in creditors ratio which shows that there is an increase in creditors period. In case of Arvind mill there is constant increase in ratio that shows decrease in payment period that increase goodwill of company. Jindal ltd.’s Creditor turnover ratio


is better than others because they have lower payment period in year 2011-12 compare to others.

By comparing to all the companies Jindal Ltd. is using the fixed assets in most effective and efficient way to generate the revenue. There is an increase of 38% in Fixed asset turnover ratio of Jindal ltd. where as in K.G. Denim there is an increase of 31% in the ratio. And in Arvind Mills the ratio is increasing at very nominal rate.

All the companies have decrease in debt equity ratio gradually, but Arvind mill has the lowest ratio as it has financed its growth through equity. Arvind mill is having the ratio of 0.3501. Where as in Jindal ltd the ratio has been decreased from 1.4336 to 0.3996 which shows decrease in long term debt as the equity has remained same for the 3 years.

Jindal has strong financial position compared to others as it has enough capital to repay its debt as it has higher proprietary ratio.

Return on net worth is the profit earned on capital invested by the share holders. Arvind mill has better return on investment. Which is 21.4945% in the year 2011-12. And in Jindal ltd. it is 15.0341 % which is close to the previous year’s ratio. In Aarvee Denim it has decreased from 14.1669 to 6.5625.

Jindal ltd. has an increase in gross profit of 32% in the current financial year than the previous years as it has achieved cost control. But Arvind mill has the better cost control than all the other companies. As it is already having 61.2312 % ratio in the year 2011-12.


Again Arvind mill has achieved the highest PAT i.e. around 13%. The ratio has been increased from 5.1695 to 13.17%. and in Jindal ltd 2.9967 %.

By comparing all the companies together we can observe that Arvind mill is market leader and Jindal is showing growth in the financial position than all other textile companies.

CHAPTER:6 CONCLUSION

Ratios make the related information comparable. A single figure by itself has no meaning, but when expressed in terms of a related figure, it yields significant interferences. Thus, ratios are relative figures reflecting the relationship between related variables. Their use as tools of financial analysis involves their comparison as single ratios, like absolute figures, are not of much use.

Ratio analysis has a major significance in analyzing the financial performance of a company over a period of time. Decisions affecting product prices, per unit costs, volume or efficiency have an impact on the profit margin or turnover ratios of a company.

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 analysis of financial statements is a process of evaluating the relationship between component parts of financial statements to obtain a better understanding of the firm‘s position and performance.

The first task of financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial


statements. The second step is to arrange the information in a way to highlight significant relationships. The final step is interpretation and drawing of inferences and conclusions. In brief, financial analysis is the process of selection, relation and evaluation.

Ratio analysis in view of its several limitations should be considered only as a tool for analysis rather than as an end in itself. The reliability and significance attached to ratios will largely hinge upon the quality of data on which they are based. They are as good or as bad as the data itself. Nevertheless, they are an important tool of financial analysis.

CHAPTER:7 BIBLIOGRAPHY &WEBOGRAPHY

BIBLIOGRAPHY

Annual reports of Jindal Worldwide LimitedFinancial Accounting for Management and Analytical Perspective

- By Abrish Gupta

WEBOGRAPHY

www.jindalworldwide.com

www.arvindmills.com


http://www.arvindmills.com/

http://www.jindalworldwide.com/

www.aarveedenim.com

www.k.g.denim.com

CHAPTER:8 ANNEXTURE(Amt. in lacs only)

BALANCESHEET OF JINDAL WORLDWIDE LIMITED

ARTICULARS AS ON 31.3.2012

AS ON 31.3.2011

AS ON 31.3.2010

SOURCES OF FUNDSSHARE HOLDERS FUND

Share Capital 2005.20 2005.20 2005.20Reserves & Surplus 8031.14 6677.95 550.65

10036.34 8683.15 7505.85LOANS FUND

Secured Loans 3950.88 11024.50 7813.90Unsecured Loans 59.64 1423.99 1368.91

4010.52 12448.49 9182.81Long term provisions 8.11

DIFFERED TAX LIABILITY

1297.36 1179.38 1012.64

TOTAL 15352.33 22311.03 17701.30APPLICATION OF


http://www.k.g.denim.com/

http://www.aarveedenim.com/

FUNDSFIXED ASSETS 9797.44 9034.30 8154.84

Capital work-in-progress 162.39 - 10.54INVESTMENT 95.01 733.71 820.63

Long term loans 332.82CURRENT ASSETS,

LOANS & ADVANCESCurrent investments 632.93

Inventory 3814.54 4611.62 3512.84Sundry debtors 4531.75 3424.34 2376.87

Cash & Bank balances 2875.73 1896.01 751.34Loans & Advances 6400.64 9776.34 6320.29

Other current assets 9.7318265.32 19708.32 12961.33

LESS: CURRENT LIABILITY & PROVISIONS

13328.29 7218.39 4324.75

NET CURRENT ASSETS 4937.03 12489.92 8636.57MISCELLANEOUS

EXPENSES27.64 53.08 78.71

TOTAL 15352.33 22311.03 17701.30

PROFIT & LOSS OF JINDAL WORLDWIDE LIMITED

PARTICULARS AS ON31.3.2012

AS ON31-3-2011

AS ON31-3-2010

INCOMESALES 50210.94 36576.20 28925.48

EXPORT BENEFITS 44.07 108.96 155.35OTHER INCOME 377.70 546.07 375.4

INCREASE / DECREASE IN STOCK

175.09 502.39 (521.58)

TOTAL INCOME 50807.80 37733.62 28934.65EXPENDITURE

COST OF MATERIAL 35158.67 25037.12 19145.93


DIRECT EXPENSES 10567.65 7784.36 6570.48EMPLOYEE’S

EMOLUMENTS171.14 151.94 175.38

ADMINISTRATION 462.72 766.66 271.23SELLING &

DISTRIBUTION330.26 379.18 370.33

FINANCIAL CHARGES 1856.52 1225.68 881.67DEPRECIATION 546.39 483.79 435.87

TOTAL EXPENDITURE

49093.34 35828.72 27850.90

PBT 1714.46 1904.90 1083.75PROVISION FOR

TAXATION91.76 389 195

PROVISION FOR DIFFERED TAX

LIABILITY

117.97 166.75 156.31

FRINGE BENEFIT TAX - - -PAT 1504.73 1349.16 732.44


(Amt. in lacs only)

BALANCESHEET OF K.G. DENIM LIMITED

PARTICULARS AS ON 31.3.2012

AS ON 31.3.2011

AS ON 31.3.2010



4999.37 4718.36 4268.55LOANS FUND

Secured Loans 4436.73 10774.51 11192.27Unsecured Loans - 463.60 543.33

4436.73 11238.11 11735.60LONG TERM PROVISIONS

188.61

DEFFERED TAX LIABILITY

1298.65 1063.16 840.80

OTHER LONG TERM LIABILITY

611.90



Capital work-in-progress 663.81 103.43 12.47INVESTMENT 573.31 531.63 531.68

Long term loans 396.25CURRENT ASSETS,

LOANS & ADVANCESCurrent investments

Inventory 10182.44 8187.62 6349.38Sundry debtors 2374.94 2748.79 3129.11

Cash & Bank balances 665.26 624.14 638.75Loans & Advances 1512.58 2423.74 1720.63

Other current assets 907.92 590.82 297.5215643.17 14575.11 12135.39

LESS: CURRENT LIABILITY & PROVISIONS

15086.62 8216.05 7045.49


NET CURRENT ASSETS 556.55 6359.06 5089.90MISCELLANEOUS

EXPENSESTOTAL 11535.29 17019.63 16844.95

PROFIT & LOSS OF K.G. DENIM LIMITED

PARTICULARS AS ON31-3-2011

AS ON31-3-2010

INCOMESALES 32723.48 25850.64

JOBWORK RECEIPTS 1578.46 1051.91INCREASE / DECREASE IN STOCK 260.83 (-557.30)

OTHER INCOME 487.50 519.15TOTAL INCOME 35050.27 26864.40EXPENDITURE

COST OF MATERIAL 21362.96 15546.47MANUFACTURING COST 5511.98 4047.47

OTHER OPERATING EXPENSES 4264.22 3817.93

TOTAL EXPENDITURE 31139.16 23411.87GROSS PROFIT 3911.11 3452.53

FINANCIAL CHARGES 1913.82 1964.89LOSS/GAIN ON VARIATION IN

FOREIGN EXCHANGE RATE(NET)3.60 100.58

DEPRECIATION 1293.14 1290.45PROFIT FOR THE YEAR 700.55 96.61

Prior Year Expenses 19.54 2.46Provision for Current Tax 138.29 14.15Provision for Wealth Tax 0.61 0.68

Provision for Deferred Tax 222.36 (-25.40)MAT Credit Entitlement (-135.05) (-14.15)

Prior Year Taxes 4.99 101.93NET PROFIT 449.81 16.94


PROFIT & LOSS OF K.G. DENIM LIMITED

PARTICULARS AMOUNTAS ON

3-3-2012SALES 40007.44

OTHER INCOME 316.89TOTAL INCOME 40324.33

EXPENSESCOST OF MATERIAL 24237.94

PURCHASE OF STOCK IN TRADE

5.37

CHANGES IN INVENTORY

(-1011.19)

MANUFACTURING EXPENSES

8301.30

EMPLOYEE BENEFITS EXPENSES

1891.17

FINANCE COSTS 2322.71DEPRECIATION 2322.71Other Expenses 2164.24

PROFIT BEFORE TAX 1104.44TAX EXPENSE 225.40MAT CREDIT

ENTITLEMENT(93.51)

DEFERRED TAX 235.48PROFIT FOR THE

PERIOD737.07


BALANCE SHEET OF AARVEE DENIM LIMITED

(Amt. in lacs only)

PARTICULARS AS ON 31.3.2012

AS ON 31.3.2011

AS ON 31.3.2010



21478.99 19865.34 16395.54LOANS FUND

Secured Loans 5994.46 15897.88 15022.84Unsecured Loans 4166.16 9673.22 8114.16

10160.62 25571.10 23137.00LONG TERM PROVISIONS

1052.30

DEFFERED TAX LIABILITY

3248.62 2974.42 2824.96

OTHER LONG TERM LIABILITY

56.41



INTANGIBLE ASSETS 13.16Capital work-in-progress 794.45 3054.84 1668.08

INVESTMENT 0.64 20.25Long term loans 510.89

CURRENT ASSETS, LOANS & ADVANCES

Current investmentsInventory 12346.79 11035.36 7202.56

Sundry debtors 13461.55 9104.38 7883.19Cash & Bank balances 3090.91 969.70 431.24


Loans & Advances 835.28 1647.10 1740.79Other current assets 1062.78

30797.31 22756.54 17257.78LESS: CURRENT

LIABILITY & PROVISIONS34512.01 9007 5323.78

NET CURRENT ASSETS (-3714.7) 13749.54 11934MISCELLANEOUS

EXPENSESTOTAL 35996.94 48410.86 42357.50

PROFIT & LOSS OF AARVEE DENIM LIMITED


AS ON31-3-2010

INCOMESALES 48751.98 37477.47


123.67 (-1476.50)

OTHER INCOME 1160.11 1242.96TOTAL INCOME 50035.76 37243.93EXPENDITURE

COST OF MATERIAL 29024.34 20355.93MANUFACTURING COST 7834.26 6658.03

EMPLOYMENT COST 1974.39 1662.68ADMINISTRATION &

SELLING & DISTRIBUTION2611.62 1723.25

FINANCIAL CHARGES 1928.62 1484.71DEPRECIATION 2357.14 2320.80

TOTAL EXPENDITURE 45730.37 34205.40PROFIT BEFORE TAX 4305.39 3038.53

NET PROFIT 3343.88 2297.32


PROFIT & LOSS OF AARVEE DENIM LIMITED


INCOMESALES 66139.3


(2,853.49)

OTHER INCOME 113.50TOTAL INCOME 66,252.80EXPENDITURE

COST OF MATERIAL 44,421.80EMPLOYMENT COST 2,828.13OTHER EXPENSES 13,387.57

FINANCIAL CHARGES 3,680.66DEPRECIATION 2,569.26

TOTAL EXPENDITURE 64,033.93PROFIT BEFORE TAX 2,218.87

TAX EXPENSESCURRENT TAX 438.77MAT CREDIT 122.81

TAX PROVISION (20.14)DEFERRED TAX 274.21

PROFIT FOR THE YEAR 1,403.22


BALANCE SHEET OF ARVIND LTD.

(Amt. in lacs only)

Particulars As On 31.03.12

As on 31.03.11 As on 31.03.10

Share holder fund

Share capital 25804 25440 23955Reserves &

surplus1,76215 154111 118045

Total 202019 179551 1420.00Secured Loans

70477 176323 172873

Unsecured Loans

258 4889 14185

Deferred Tax Liability

1282 1282 1282

Long Term Provisions

4951

TOTAL 278987 362045 330340


Fixed Assets 2,26284 200196 191811Intangible

Assets622

Capital Work in Progress

17910 14228 4686

Long Term Loans and Advances

18921

Other Non-current Assets

570

Investment 33711 30940 30023FOREIGN

CURRENCY MONETARY

ITEM TRANSLATIO

N DIFFERENCE ACCOUNT(16

)

(75) (106)

Current assets, Loan & AdvanceInventories 72842 69916 43200

Land held for Sale

3450 0

Sundry Debtors

40555 56363 42416

Cash & Bank Balance

3937 2909 4314

Other Current Assets

25670 10052 9590

Loan & Advance

21475 37917 48480

Total 164479 180607 148000Less-Current

Liability & Provision


Liabilities 174053 62769 43342Provisions 9457 1082 738

Total 183510 63851 44080Net Working

Capital(-19031) 116756 103920

Miscellaneous Expenditure

(to the extent not written

off)

0.00 0.00 0.00

TOTAL 278987 362045 330340

PROFIT & LOSS ACCOUNT OF ARVIND LTD.

Particular 2010-11 2009-10

Sales & Operating Income

269122 231689

Other Income 3451 1183Total 272573 232872

Raw Materials Consumed

129015 96873

Purchase of Finished Goods

3679 4761

Employee Emoluments 27390 24090Others 77293 73143

Interest & finance cost 19459 15547


Depreciation 11616 11380Exceptional items (net) 0.00 0.00Decrease/(Increase) in

Stocks(9359) 1878

Total 259093 227672

Profit before tax for the year

13480 5200

Less- Current tax 2684 877Less-Deferred Tax 0.00 0.00

Less –Fringe benefit tax

0.00 0.00

Add: MAT Credit Entitlement

(2684) (877)

Profit For the year 13480 5200Less- Prior Period Income/(Expense)

0.00 0.00

Profit before Tax 13480 5200Extra ordinary items

(net)0.00 0.00

Profit after Extra ordinary items

13480 5200

Balance as per last year’s balance sheet

31442 28234

Interim Dividend on Preference Shares

0.00 (76)

Tax on Interim Dividend

0.00 (13)

Proposed dividend on Equity Shares

0.00 0.00

Tax proposed dividend 0.00 0.00Additional dividend on

equity share0.00 0.00

Tax on additional dividend

0.00 0.00

Provision for leave encashment

0.00 0.00

Transferred to capital redemption reserves

0.00 (1980)


Transferred to debenture redemption

reserve

090 120

Balance Carried to Balance Sheet

45012 31442

PROFIT & LOSS A/C OF ARVIND MILLS

PARTICULARS AMOUNT ASON

31-3-2012Sales 3,29814

Other operating revenues 19598Other Income 13581

Total Revenue 362993


ExpensesCost of materials 1,56876

Purchases of Stock in Trade 3740Changes in inventories 428

Employee benefits expense 36051Finance costs 27025Depreciation 13051

Other expenses 1,02193Total Expenses 3,39364

Profit before extraordinary items and tax

23629

Extraordinary Items 25180Profit before Tax 48809

Tax expense:Current Tax 8515

MAT Credit Entitlement (3129)Profit for the year 43423


HELLY GP

Documents

generating sufficient revenue

indian textile industry

current liability

weighted average

home textiles market

creditor turnover ratio

cotton textile industry

interest coverage ratio