A STUDY ON FINANCIAL ANALYSIS OF BALAJI BUILDERS

CHAPTER 1

1.1INTRODUCTION

Finance is the language of any business. Among the expertise necessary for
understanding and handling a business is proficiency in the language of finance, i.e. the
capacity to be able to read and comprehend financial information and also to be able to
display data through financial reports. The ability to be able to comprehend financial
information is critical for any business manager. The goals and aims of all businesses are
established in financial terms with their results also being gauged in financial terms.

FINANCIAL ANALYSIS
Financial analysis or financial statement analysis or accounting analysis or
Analysis of finance refers to an assessment of the viability, stability and profitability of a
business, sub-business or project. It is performed by professionals who prepare reports using
ratios that make use of information taken from financial statements and other reports.
These reports are usually presented to top management as one of their bases in making
business decisions.

 Continue or discontinue its main operation or part of its business;

 Make or purchase certain materials in the manufacture of its product;

 Acquire or rent/lease certain machineries and equipment in the production of its goods;
 Issue stocks or negotiate for a bank loan to increase its working capital;

 Make decisions regarding investing or lending capital;

 Other decisions that allow management to make an informed selection on various

alternatives in the conduct of its business.

1
1.2OBJECTIVES OF THE STUDY

 To know the organizational structure of the company.

 To gain practical knowledge about the company.

 To study about operations of the different departments in the concern.

 To know how they tackle day to day problems concerned with production process.

 To gain knowledge about accounting and other concerned departments.

1.3STATEMENT OF PROBLEM

 Comparability between periods. The company preparing the financial statements

may have changed the accounts in which it stores financial information, so that
results may differ from period to period. ...
 Comparability between companies. ...
 Operational information

1.4RESEARCH METHODOLOGY:

Research is a systematic search for pertinent information on a specific topic. The

purpose of the research is to discover answers to questions through the application of
scientific procedure. The procedure or method through which research is conducted is called
research methodology.

1.5TOOLS OF FINANCIAL ANALYSIS

a) Ratio analysis.

b) Liquidity ratios

c)Solvency ratios

2
d)Profitability

ratios

e) Comparative Balance sheet.

3
RATION ANALYSIS:

Ratio analysis is a quantitative method of gaining insight into a company's liquidity,

operational efficiency, and profitability by studying its financial statements such as the
balance sheet and income statement. Ratio analysis is a cornerstone of fundamental equity
analysis.

LIQUIDITY RATIOS:

Liquidity ratios measure a company's ability to pay off its short-term debts as they
become due, using the company's current or quick assets. Liquidity ratios include the current
ratio, quick ratio, and working capital ratio.

SOLVENCY RATIOS:

Also called financial leverage ratios, solvency ratios compare a company's debt levels
with its assets, equity, and earnings, to evaluate the likelihood of a company staying afloat
over the long haul, by paying off its long-term debt as well as the interest on its debt.
Examples of solvency ratios include: debt- equity ratios, debt-assets ratios, and interest
coverage ratios.

PROFITABILITY RATIOS:

These ratios convey how well a company can generate profits from its operations.
Profit margin, return on assets, return on equity, return on capital employed, and gross
margin ratios are all examples of profitability ratios.

COMPARATIVE BALANCE SHEET:

4
Comparative Balance Sheet Meaning

The comparative balance sheet is a balance sheet which provides financial figures of
Assets, Liability and equity for the “two or more period of the same company” or “two or
more than two company

5
of same industry” or “two or more subsidiaries of same company” at the same page format
so that this can be easily understandable and easy to analysis.

The comparative balance sheet has two-column of amount against each balance sheet
items; one column shows the current year financial position, whereas another column will
show the previous year’s financial position so that investors or other stakeholders can easily
understand and analyze the company’s financial performance against last year.

1.6 SCOPE OF STUDY:

The scope of a study explains the extent to which the research area will be explored in
the work and specifies the parameters within the study will be operating. ... Generally, the
scope of a research paper is followed by its limitations. As a researcher, you have to be
careful when you define your scope or area of focus.

1.7LIMITATIONS OF THE STUDY

 The study is based on the accounting information. Therefore it is subject to change

based on the market to demand conditions.

 The study is basically based on the secondary information that is annual reports of the
company. Hence it is difficult to state that the study is flawless when most of the
study is based on the secondary data

 The figures used in reports are taken from annual reports are taken from the annual
reports and has it does not have any impact on the current transactions.

6
1.8 CHAPTER SCHEME

 The project consists of five chapters as described below:

 Chapter 1: Chapter 1 deals with introduction, objectives of the study, statement of
problem, research methodology, tools to be used, limitations of the study, chapter
scheme.
 Chapter 2: Chapter 2 deals with review of literature.
 Chapter 3: Chapter 3 includes the industry profile and the company profile.
 Chapter 4: Chapter 4 includes the data analysis and interpretation of the study.
 Chapter 5: Chapter 5 deals with the summary of findings, suggestions and conclusion
of the study.

7
 CHAPTER – 2

REVIEW OF LITERATURE

2 .1 INTRODUCTION

The research literature review is a system a arctic, explicit and reproducible method
for identifying, evaluating and synthesizing the existing body of completed and recorded
work produced by researchers, scholars and practitioner s. ^7 The purpose of review of the
literature is to assess the research completed in the related areas. It provided to plan
implement the proposed research studies in the light of the conclusions drawn from the
previous work. It also checks the unnecessary repetition. Thus, the review of the literature
provided a base upon which the future research is yet to be extended. 49 The discipline of
Textile Industry has been a fascinating field of research for scholars. There have been quite a
good number of research studies, invariably dealing with deferent aspects of Industry like
Agencies, brokerage ,etc. The earlier studies are mostly historical and descriptive. The
present review of the literature is an attempt to analysis the secondary data relating to
Builders with special reference to power industry

2. 2 REVIEW OF LITERATURE

In 1949M.M. Mahta studied the trends in size of Raw materials and production units
at different clusters like Bombay (Mumbai), Ahmadabad, Madras (Chennai) and other
important clusters of the country for the period of 1905 to 1944. He emphasized on the size
of the industrial units. In his study he concluded that there have been important changes in
the size of industrial units during different periods. A comparative study about the industrial
units in Bombay (Mumbai) and Ahmadabad w as exposed in the study. He attempted to
measure the relationship between size of units and their efficiency,

After the fifties the empirical studies on Builders industry tended to more analytical
than historical or descriptive. The division of Statistics of the Department of Research and
Statistics of the Reserve Bank of India published two reports in RBI Bulletin in 1958 and
8
 1959 related to the profits of the size of companies in Building industry.
Sardeesh Babu (1999) in her study “A Study on Financial Performance of Fertilizers
and Chemicals Travancore Limited”. The cost on various overheads can be brought down by
carefully scrutinizing each item and applying cost cutting techniques. The profitability of the
company can be improved by reducing the expenses that do not contribute any productive use.
The current assets can be managed efficiently by examining the material holding and stock
holding procedure and pattern. If the company increase its turnover and reduces its cost, the
profit will increase leading to an increase in the growth rate of sales, profit before tax and profit
after tax.

Karthikeyan (2000) “Financial performance of selected automobile companies, an

analytical Study” tried to identify the relationship between the financial performance variables
and to develop simple financial forecasting performance variables are analyzed to forecast the
financial performance a simple cross-section regression analysis was made. The financial
analysis variables considered were net sales, total assets, Gross profit, Profit before tax,
Dividend, retained earnings, Cash flows and Net worth. He concluded that the sales have been
consistent in all the four year of study. Total asset has also been consistent in four years under
the study.

Anshan Lakshmi (2003) made “A Study of The Financial Performance with Reference
to Steel Industries Kerala Ltd”. This study covered from 1977- 1998 to 2001-2002, the objectives
of the study was to analyze and evaluate the working capital management, to analyze the
liquidity position of the company, to evaluate the receivables, payables and cash management
and to suggest ways and means to improve the present date of working capital. The major tools
used for the analysis say that the working capital management was every author suggested that
the inventory management have to be corrected.

9
 Sudarsana Reddy (2003) under took a study on ‘‘Financial Performance of Paper
Industry in Andhra Pradesh’’ for the period from 1989-90 to 1998-99. The Primary objective of
the study was to analyse the investment pattern and utilization of fixed assets, ascertaining the
working capital condition, reviewing the profitability performance and suggesting measures to
improve the profitability. He concluded that the introduction of additional funds along with
restructuring of finances and modernization of technology were needed for better operating
performance.

Tyler Yu & et al. (2009) examine “Comparative analysis of financial performance of

companies with female CEOs and companies without female CEOs”, the financial performance
of companies with executive-level women, those who are sitting in boardrooms, and compare
them with those without female executives. This study conducted the hypothesis tests to examine
differences in financial performance between companies with female CEOs and those without.

Praveen Kumar Jain (2013) conducted a study on welding company to “Analyse the
Financial Statements”. The study revealed that the current ratio in public sector undertakings
during the study period was found to be highly erratic while the same in private sector
undertakings registered continuous decrease. As far as the inventory was concerned, the study
revealed that it was highly unplanned in public sector undertaking units when compared to
private sector units. The study contributed much in terms of realizing the importance of effective
management of working capital.

Gangadhar (2018) has made an attempt on “Financial Analysis of Companies in Criteria: A

Profitability and efficiency focus” one of the objectives of the study is to analyse the liquidity
position of the companies and to point out the factors responsible for such a position. It is
concluded that the liquidity position was quite alarming since these are facing chronic liquidity
problems. Their proportion current assets in relation to the current liabilities are very low.

2.2 REFERENCES
10
1. Praveen Kumar Jain (2013) Analyse the Financial Statements, Indian Journal of
marketing: Volume –XVI, No-4, December 1985, Pp.9-12.
2. Gangadhar (2018) Analyse the Financial Analysis of Companies in Criteria:
3. Sudarsana Reddy (2003) under took a study on “Financial Performance of Paper
Industry in Andhra Pradesh”
4. Vasanthamani (1982) in her study “The Financial Performance of Lakshmi Machine
Works Limited”.
5. Rajeswary (1990) in her study entitled “Financial Performance of Precot Limited.
6. Parvathi (1990) in her “Financial Performance Analysis Hindustan Photos Films Ooty”
7. Sankar.T. L & [Link] (1995) in their study entitled, “Financial Performance of State
Level Public Enterprises”
8. Gnanavelu.N (1996) in his study entitled “Case Study of Financial Performance of
Sakthi building Limited”

11
 CHAPTER – 3

COMPANY PROFILE

3.1 INTRODUCTION

Builders, material used for binding substance that sets and hardens the
material together. It is a fine powder usually grey in color. Builders are used for
constructional purposes and are the binding agent in concrete, which is a
combination of builders, mineral aggregates and water. Their types can be
characterized on the basis of their ability to set in the presence of water.
The most common raw material used for builder’s production are limestone, iron
ore and clay. The major component of raw material is usually extracted from a quarry
and mines. Limestone provides required calcium oxide and some of other oxide, while
clay and other materials provides most of silicon, aluminum, and iron oxide for
manufacturing of Portland builders.

3.2 Mining and quarrying

The raw material for builders production is limestone which is extracted from the
mines near the builders factory. The limestone (CaCO3) provides the ingredients requires for
builders production. The other material necessary for builders production are iron ore, clay, and
gypsum are also extracted from their ores. Balaji builders have its own mines located at
Coimbatore

3.3 SERVICES PROVIDED BY THE COMPANY

The raw limestone is feed into primary crusher in which their size will be
reduced around range of 80-100 mm. The crusher is made up of jaw plate in which one
plate is fixed and another plate is movable. A powerful motor drives the movable jaw of
crusher and breaks it to minimum size. After then the material is fed into cone crusher
in which raw material is converted to size of 20 mm and below according to the
specification given by the raw mill. The materials from the cone crusher is supplied to
vibrating screen in which strong exciting force separates the standard material while
throwing back the other materials towards the cone crusher. The vibrating screen only
separated the crushed lime stone of size 20mm and below. The process layout of
crushing is as follows.

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 Stacker is the device use to make pile of crushed limestone. The purpose of stacker is to
make raw material homogeneous so that fixed quantity of raw material. The other purpose
of these devices is also for storing raw crushed limestone homogeneously so that in the case
of the maintenance or shut down of crusher the production process do not stop .Reclaimer is
used to transport the pile limestone to the hopper through conveyor belt. It is a computer
controlled automatic device consist of large number of buckets which transfers raw material
in controlled and fixed quantity by giving to and for motion in the pile of limestone.

Hopper is the storage container used to collect granular material designed to easily
dispense these material through the use of gravity. There are four types of hopper
used for production of builders in Balaji builders factory. Each hopper serves as a
storage container and the combination of these hopper are used to feed raw material
in required proportion to maintain quality of builders. The four types of hopper used
are here enlisted below.
• High grade Limestone feed hopper
• Low grade limestone hopper
• Clay feed hopper
• Iron ore hopper
All of these hopper are constructed by RCC.
The weigh feeder is a device that supplies controlled quantity of raw material for the next
grinding operation. The uncontrolled supply of raw material decreases the quality of clinker and
hence the builders. The quality control department gives the information about the quantity to be
feed into the ball mill to CCR and they maintain the required quantity of raw material through weigh
feeder and supplies that quantity of raw material.
Raw mill

These are the rotatory devices use to grind the material into fine dust particle. The
material used are the mixture of high grade limestone, clay, and iron ore. There
are two chamber in the raw mill one of which is the drying chamber and other is
the grinding chamber. The raw mill is filled with the grinding media made up of
high chromium steel. The raw mill impart the tumbling and cascading action to
the balls which enables to conversion of raw feed into fine dust. The raw mill also
called ball mill works on the principle of centrifugal action, center of gravity and
principle of impact force. The product of raw mill is fine dust particle also called
raw meal. The fine dust are now supplied to cyclonic dust separator in which fine
dust of specified size are separated while other rejected material are again fed into
the inlet of raw mill.

13
14
Cyclones are the conical body having no moving parts on it. Preheater cyclones are
used to heat the raw meal so that it is heated up to some temperature which makes
easy reaction of kiln. These cyclones are supplied by heated air through kiln due to
which the temperature of the raw meal is already reached to certain high temperature
about 6000c. This increase in temperature results in less time to stay of material in
kiln.
Raw mill is introduced at the inlet gas duct to the stage I (top) cyclones. It is subsequently
preheated by hot, countercurrent gas flow as it is continuously collected and passed down the
other cyclone stages in the Preheater to calciner. Fuel is burned into the calciner to achieve
92-95% of the total material calcinations before collection in the bottom of the cyclone and
entrance into kiln. Combustion air for the calciner is taken from the kiln via the riser duct and
through a separate tertiary air duct from cooler.

15
Kiln

It is a rotating devices used for pyro processing of raw meal. The builders kiln are the heart of
the production process and their capacity usually defines the capacity of plant. The feed is
heated to temperature about 14000c and the result is formation of solid called clinker. During
the formation of clinker the residue materials are evaporated. The builders kiln is responsible
for the emission of greenhouse gases. The formation of clinker completes into six stage of
heating cycle.
Inlet zone
Safety zone
Upper transition zone
Sintering zone
Lower transition zone Outlet
zone

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3.4 ACTIVITIES - LUCKY INDIAN GARMENTS

● Producer

● Distributor

● Service provider

TOLLS
Work wear and work wear accessories Tools, jigs and fixtures for woodworking
machinery Cutters, woodcarving machine Pipe, tube and hose accessories, metalHose
spoilers, metal Cutting, cutting-off and sawing tools Wire cutters Cutters, metal pipe
Cutters, plastic pipe

PURCHASE DEPARTMENT
A purchase department, also called procurement department or purchasing
department, supports operations by serving as the primary buyer of goods and services in a
private sector company, government agency, educational institution or another type of
organization.

17
SALES DEPARTMENT
A sales department is the direct link between a company's product or service and its
customers. ...
Your sales staff builds relationships with your customers. Further, a quality salesperson
helps identify a customer's unique needs and makes sure that those needs are met.

OBJECTIVES

 Getting and staying profitability

 Productivity of people and resources
 Excellent customer service
 Employee Attraction and retention
 Mission-driven core values
 Sustainable Growth
 Maintaining a heath cash flow
 Reaching the right customers

VISION OF THE COMPANY

 To ensure Ultimate satisfaction to customers

 To establish the branches of the company at more places

18
MISSION OF THE COMPANY

 improves the quality of products

 Reduces the damage in products and deal the damages

3.5 STRUCTURE OF BALAJI BUILDERS

19
GROWTH OF BALAJI BUILDERS:

India has already completed more than 50 years of its independence. The analysis of
the growth pattern of different segment of the industry during the last five decades of post
independence era reveals that the growth of the industry during the first two decades after
the independence had been gradual, though lower and growth had been considerably slower
during the third decade. The growth thereafter picked up significantly during the fourth
decade in each and every segment of the industry. The peak level of its growth has however
been reached during the fifth decade i.e., the last ten years and more particularly in the 90s.
The Building Policy of 1985 and Economic Policy of 1991 focusing in the direction of
liberalization of economy and trade had in fact accelerated the growth in 1990s. The
spinning spearheaded the growth during this period and man-made fiber industry in the
organized sector and decentralized weaving sector.

20
BUILDING PRODUCTION PROCESS:

ulture.
Limestone from mines are extracted
Limest from quarrying
one
Limestone are crushed into fine
particles
Crusher• jaw crusher, cone crusher
etc. Aggregates are converted into
Grin fine dust particles
der Ball mill are used to grind the
crushed material size of material from mills to
It is the standard
Raw be feed into kiln
Meal It is the mixture of limestone and additives
It is the heart
required of the
to make constraction plant
clinker
Kil Used to for pyro-processing
n Material heated at very high temperature about 14500c to bring about
chemical and physical change
It is the product after
Clin pyro-processing
ker Stored in CSP
Clinker is mixed with gypsum in
Grin required proportion
der Mixture is grinded to make final
OPC cement
The product is ready for packing
Cem and dispatching
ent

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 3.6 PROFILE OF THE COMPANY:

Name of Company : Balaji Builders

Company CEO : Subramanian Ratnam

Total number of Employee : 150 people

Year of establishment: 1994

Current status : active

Address : 132A,Tvr-towers,Thadagam

Road ,GCT post,Coimbatore-641013

Statutory profiles

GST. NO : 33AZWPK1133F1ZH

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 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

4.1 DATA ANALYSIS:

The process of evaluating data using analytical and logical reasoning to examine each
component of the data provided. Data from various sources is gathered, reviewed, and then
analyzed form some sort of finding or conclusion. It is the process of evaluating data using
analytical and logical reasoning to examine the data. Interpretation means the act of
identifying the data and merging the data. Data analysis and interpretation is the process of
assigning meaning to the collected information and determining the conclusions,
significance and implications of the findings. The following are various tools used in this
analysis.

4.2 RATIO ANALYSIS:

The relationship between two accounting figures is known as ratio. Ratio analysis is
the process of comparison of one figure with another, which helps to make proper analysis
about the strengths and weakness of the firms operations. Ratio analysis is a quantitative
method of gaining insight into a company's liquidity, operational efficiency, and profitability
by studying its financial statements such as the balance sheet and income statement. Ratio
analysis is a cornerstone of fundamental equity analysis. Ratio analysis is a quantitative
method of gaining insight into a company's liquidity, operational efficiency, and profitability
by studying its financial statements such as the balance sheet and income statement. Ratio
analysis is a cornerstone of fundamental equity analysis.

23
4.3 NET PROFIT RATIO:

Net profit is also referred as the bottom line, net income or net earnings is a Measure
of the profitability of a venture after accounting for all costs and taxes. It is the actual profit,
and includes the operating expenses that are excluded from gross profit.

FORMULA:

NET PROFIT RATIO = NET PROFIT /NET SALES*100

NET PROFIT RATIO OF BALAJI BUILDERS:

PARTICULAR 2016 – 2017- 2018

S 2017
Net profit 3,95,848.7 5,93,639.39
8
Net sales 48,92,195. 27,28,252.00
00
Net profit ratio 8.09 21.75

SOURCE: SECONDARY DATA

INTERPRETATION:

The above table reveals that the net profit was increased in the year 2017-2018 which is

21.75 by the difference from the year 2016-2017 which is 8.09

24
 CHART NO: 4.3

NET PROFIT RATIO

25

21.75

20

15

10

8.09

0
Net profit ratio

2017- 2018

25
4.4 GROSS PROFIT RATIO:

The gross profit is the ratio of gross income or profit of sales. The difference between
net sales and cost of goods sold is known as gross profit. Gross profit ratio as follows:

FORMULA:

GROSS PROFIT RATIO = GROSS PROFIT/NET SALES*100

TABLE SHOWING THE GROSS PROFIT RATIO OF THE FIRM

PARTICULAR 2016-2017 2017-2018

S
Gross profit 3000.46 53,478.85
Net sales 3,95,848.7 5,93,639.39
8
Gross profit 0.75 9.0
ratio

Source: Secondary data

INTERPRETATION:
From the above reveals that the gross profit ratio was increased in the year 2017-2018
which is 9.0 by the difference from the year 2016-2017
which is 0.7
26
 CHART NO: 4.4

GROSS PROFIT RATIO

10

9
9

1 0.75

0
Gross profit ratio

2016-20172017-2018

27
4.5 FIXED ASSET RATIO:

Fixed Assets ratio is a type of solvency ratio which is found by dividing total
fixed assets of a company with its long-term funds. It shows the amount of fixed
assets being financed by each unit of long-term funds.

FORMULA:

FIXEDASSET RATION = NET FIXED ASSET/LONG-TERM FUNDS

TABLE SHOWING THE FIXED ASSETS RATIO OF THE FIRM

PARTICULARS 2016-2017 2017-2018

Fixed assets 15353.00 13050.00
Long term funds 40258.22 35993.5
Fixed assets ratio 0.38 0.36

Source: Secondary data

INTERPRETATION:

28
The above table revels the fixed asset ratio is decreased in 2017-2018 which

is 0.36 by the Difference from the year 2016-2017 which is 0.38

29
 CHART NO: 4.5

FIXED ASSETS RATIO

0.385

0.38
0.38

0.375

0.37

0.365

0.36

0.355 0.36

0.35
Fixed assets ratio

2016-2017 2017-2018

30
4.6 RETURN ON EQUITY RATIO
Return on equity (ROE) is a measure of financial performance calculated by dividing
net income by shareholders' equity. Because shareholders' equity is equal to a company's
assets minus its debt, ROE is considered the return on net assets.

FORMULA:

RETURN OF EQUITY = NET INCOME/ AVERAGE TOTAL EQUITY

TABLE SHOWING THE RETURN ON EQUITY RATIO OF THE FIRM

PARTICULARS 2016-2017 2017-2018

Net income 3,95,850 4,96,340
Average total equity 4,00,000.00 4,00,000.00
Return on equity ratio 0.98 1.24

Source: Secondary data

INTERPRETATION:

The ROE for the company declined at 1.24 during financial year 2017 2018 from 0.98

during financial year 2016-2017. The ROE measures the profit its shareholders
31
capital in the company.

32
 CHART NO: 4.6

RETURN ON EQUITY RATIO

1.4
1.24
1.2

0.98
1

0.8

0.6

0.4

0.2

0
Return on equity ratio

2016-2017 2017-2018

33
4.7 RETURN ON ASSET RATIO
Return on assets is a profitability ratio that provides how much profit a company is
able to generate from its assets. In other words, return on assets ratio

FORMULA:

SRETURN ON AVERAGE ASSET= NET INCOME/AVERAGE TOTAL INCOME

TABLE SHOWING THE RETURN ON ASSET RATIO OF THE FIRM

PARTICULARS 2016-2017 2017-2018

Net income 3,95,850 4,96,340
Total assets 12,44,622.9 17,17,970.96
2
Return on asset ratio 0.31 0.28

Source: Secondary data

INTERPRETATION:

This ratio indicator of the company profitability. it shows how efficiently the

management has used the assets of the company. ROA was 0.31at 2016-2017 against

0.28 at 2017-2018. YEAR Net Income Total Assets Return on asset

34
 CHART NO: 4.7

RETURN ON ASSET RATIO

0.315
0.31
0.31

0.305

0.3

0.295

0.29

0.285

0.28

0.275

0.27 0.28
0.265

Return on asset ratio

2016-2017 2017-2018

35
4.8 PROPRIETARY RATIO

PROPRITARY RATIO = PROPRITAY FUND/TOTAL FUND

OR

PROPRITARY RATIO = SHAREHOLDER FUND/FIXED ASSET +

CURRENT LIABILITIES

PROPRIETARY RATIO OF BALAJI BUILDERS TABLE

SHOWING THE PROPRIETARY RATIO OF THE FIRM

PARTICULAR 2016-2017 2017-2018

S
Shareholdersfu 3,88,849 5,86,082
nd
Total assets 12,44,622. 17,17,970.96
92
Proprietary 0.31 0.34
ratio

Source: Secondary data

INTERPRETATION:

0.31 at 2016-2017 and 0.34 in 2017- 2018. It’s showing a fluctuating trend
over the period. Its total assets are more than long term debt it shows
solvency is good over the period

36
 CHART NO: 4.8

PROPRIETARY RATIO

0.345
0.34
0.34

0.335

0.33

0.325

0.32

0.315

0.31

0.305

0.3

0.295 0.31

Proprietary ratio

2016-20172017-2018

37
4.9 COMPARATIVE BALANCE SHEET:

The comparative balance sheet analysis is the study of the trend of the same items,
group of items and computed items in two or more balance sheet of the same business
enterprise on different dates. The changes in periodic balance sheet items reflect the
conduct of a business.

changes can be observed by comparison of the balance sheet at the beginning and at
the end of a period and these changes can help in forming an opinion about the progress of
an enterprise. The comparative balance sheet has two columns for the data of original
balance sheets. A third column is used to show increases in figures. The fourth column
may be added for giving Percentages of increases or decreases.

38
 COMPARATIVE BALANCE SHEET OF BALAJI
BUILDERS

PARTICULARS 31-Mar- 31-Mar- INCREAS %

16 17 E
I. EQUITY AND LIABILITIES
1. Shareholder's Fund
a. Share capital 591110.1 1186958. 595848.78 50.1
4 92

2. Noncurrent liabilities
Secured loan 1030473. .. 1030473.9 100.0
92 2
Provision for expenses 5000 .. 5000 100.0

3. Current liabilities
Creditors 21079 57664 36585 63.44
TOTAL EQUITY & 1647663. 1244622. - -24.46
LIABILITES 06 92 403040.14

II. ASSETS
1. Noncurrent assets 18062 15353 -2709 -17.64
Fixed assets 100000 100000 0 0.00
Deposits & advances

2. Current assets
Cash in hand 14444.58 9686.52 -4758.06 -49.1
Closing stock 453600 149850 -303750 -66.96
Cash at bank .. 111733.4 111733.4
Sundry debtors 1061556. 858000 - -23.72
4 203556.48
8
TOTAL ASSETS 1647663. 1244622. - -24.46
0 9 403040.14
6 2

39
 PARTICULARS 31- 31-Mar18 INCREA %
Mar17 E
I. EQUITY AND
LIABILITIES
1. Shareholder's Fund
a. Share capital 1186958. 400000 - -66.30
9 786958.92
2

2. Noncurrent liabilities
Secured loan .. 1237153. 0
0
6
Provision for expenses .. .. ..

3. Current liabilities
Creditors 57664 80817 23153 28.64
TOTAL 1244622. 1717970. 473347.14 38.03
EQUITY & 9 0
LIABILITES 2 6

II. ASSETS
1. Noncurrent assets
Fixed assets 15353 13050 -2303 -17.64
Deposits & advances 100000 100000 0 0.00

2. Current assets
Cash in hand 9686.52 35992.5 26305.98 73.08
Closing stock 149850 418620 268770 64.2
Cash at bank 111733.4 30632.32 -81101.08 -72.58
Sundry debtors 858000 1119676. 261676.14 23.3
1
4
TOTAL ASSETS 1244622. 1717970. 473348.04 38.03
9 9
2 6

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 BALANCE SHEET OF BALAJI BUILDERS

PARTICULARS 31-Mar-16 31-Mar-17

I. EQUITY AND LIABILITIES

1. Shareholder's Fund
a. Share capital 591110.14 1186958.92

2. Noncurrent liabilities
Secured loan 1030473.92 ..
Provision for expenses 5000 ..

3. Current liabilities
Creditors 21079 57664
TOTAL EQUITY & 1647663.06 1244622.92
LIABILITES

II. ASSETS
1. Noncurrent assets 18062 15353
Fixed assets 100000 100000
Deposits & advances

2. Current assets
Cash in hand 14444.58 9686.52
Closing stock 453600 149850
Cash at bank .. 111733.4
Sundry debtors 1061556.48 858000
TOTAL ASSETS 1647663.06 1244622.92

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 PARTICULARS 31-Mar-17 31-Mar-18

I. EQUITY AND LIABILITIES

1. Shareholder's Fund
a. Share capital 1186958.92 400000

2. Noncurrent liabilities
Secured loan .. 1237153.06
Provision for expenses .. ..

3. Current liabilities
Creditors 57664 80817
TOTAL EQUITY & LIABILITES 1244622.92 1717970.06

II. ASSETS
1. Noncurrent assets
Fixed assets 15353 13050
Deposits & advances 100000 100000

2. Current assets
Cash in hand 9686.52 35992.5
Closing stock 149850 418620
Cash at bank 111733.4 30632.32
Sundry debtors 858000 1119676.14
TOTAL ASSETS 1244622.92 1717970.96

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 CHAPTER - 5

FINDING, SUGGESTION AND CONCLUSION

5.1 FINDINGS:

 The net profit ratio of the company was higher in the year 2017-2018 at
21.75 and was low in the year 2016-2017 at 8.09.
 The gross profit ratio of the company was higher in the year 2017-2018 at 9.0
and was low in the year 2016-2017 at 0.75.
 The fixed asset ratio of the company was higher in the year 2016-2017 at
0.38 and was low in the year 2017-2018 at 0.36.
 The return on equity ratio of the company was higher in the year 2017-
2018 at 1.24 and was low in the year 2016-2017 at 0.98.
 The return on asset ratio of the company was higher in the year 2016-2017 at
0.31 and was low in the year 2017-2018 at 0.28.
 The proprietor ratio of the company was higher in the year 2017-2018 at 0.34
and was low in the year 2016-2017 at 0.31.

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5.2 SUGGESTIONS:
 On the basis of the findings, the following measures are suggested, for improvements
in the financial performance of the company further.
 Gross profit ratio thus reflects the margin of profit that a concern is able to earn on its
 manufacturing and marketing activity. All the selected companies should have to
maintain
 this ratio at high level more over they have to make the plant about inventories or try
to reduce cost of goods sold and there will be an increase the sales.
 As the current ratio is greater than the ideal ratio it should be maintained as the same.
 The firm is maintaining the ideal liquidity position so it is suggested to maintain
cash and bank balances at ideal level.
 The seamark industries India private limited company has been mainly use the ratio
level of long term solvency ratio that will be show the company turn over as much as
higher.
 In this kind of an company has been mainly involve in stock ratio of the company

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5.3 CONCLUSION:

The above study on financial analysis of BALAJI BUILDERS allows the

performance of its total assets and total liabilities has been increased by utilization of
assets into income. The success of the company depends upon the production and sale.
The company has to attain the profit in last year by maintaining the stock level is
positive. The company as to take forward steps for smooth running of company

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