Govind Project

A STUDY ON FINANCIAL PERFORAMANCE
OF HDFC STANDARD LIFE INSURANCE CO.LTD

PROJECT REPORT
Submitted By
T.GOVINDARASU
Register No: 0!00"!"#0""
In partial fulfillment for the award of the degree
Of
MASTER OF $USINESS ADMINISTRATION %M$A&
Submitted to the
SCHOOL OF MANAGEMENT STUDIES
VSA GROUP OF INSTITUTION'
UTHAMASOLAPURAM'
SALEM ( )*) 0"0.
JUNE +0""
VSA GROUP OF INSTITUTIONS'
UTHAMASOLAPURAM' SALEM( )*) 0"0.
DEPARTMENT OF MANAGEMENT STUDIES
PROJECT ,OR-
JUNE +0""
This is to certify that the project work entitled
A STUDY ON FINANCIAL PERFORAMANCE
OF HDFC STANDARD LIFE INSURANCE CO.LTD
Is the bonafide record of project work done by
T.GOVINDARASU
Of Master of Business Administration during the year 200!20.

PROJECT GUIDE HEAD OF THE DEPARTMENT
"ubmitted for the #ice!#oce e$amination held on
%I.ter./0 E1/2i.er& %E1ter./0 E1/2i.er&
2%
th
May 20
CERTIFICATE
This is to certify that Mr. GOVINDARASU. T %REG: 0!00"!"#0""& II &ear Master
of Business Administration students of '"A ()O*+ O, I-"TIT*TIO-".
*thamasolapuram +ost. "alem ! 0/ 0as done final year project on FINANCIAL
PERFORMANCE in our organi1ation as a part of his curriculum for the period from
2%203220 to 2%204220/
5uring this period his conduct and character were GOOD. 6e wish him future/
Thanking &ou.

/
HDFC STANDARD LIFE INSURANCE COMPANY LIMITED
$r/.34 O55si3e:
st
,loor. +olimer Building. 7% A. Brinda#an )oad. -ew ,airlands. "alem!838
08/
Po0i36 Ser7i3i.g He08 Li.e: %00!22%!22% 9Toll ,ree : MT-;2B"-;< %00!20=!>>>> 9Toll ,ree :
Any +hone< or 8000>>>> 9;ocal ?all : -on B"-;2MT-;<
Reg9. O55i3er: )amon 0ouse.
0/T@ +arekh 2marg. 8=. Backbay
)eclamation. ?hurchgate.
Mumbai : 700 020. India
DECLARATION
I affirm that the project work titled A STUDY ON FINANCIAL PERFORAMANCE
OF HDFC STANDARD LIFE INSURANCE CO.LTD.' AT SALEM is being
submitted in partial fulfillment for the award of 5epartment of Management "tudies
9MBA< is the original work carried out by me/ It has not formed the part of any other
project work submitted for award of any degree or diploma. either in this or any other
*ni#ersity/
9"ignature of the ?andidate<
T.GOVINDARASU
I certify that the declaration made abo#e by the candidate is true
"ignature of the (uide.
MI"" +/I"6A)&A. MBA.
;ecturer in Management "tudies
AC-NO,LEDGEMENT
I would like to e$press my gratitude to Mr. A.RAJENDHIRAN' CHAIRMAN' VSA
GROUP OF INSTITUTIONS' SALEM for gi#ing me and opportunity and facilitate to
complete the project/
I wish to place my deep sense of gratitude to +rof/ Mr. G.MAHES,ARAN' M.E P4D'
PRINCIPAL VSA GROUP INSTITUTIONS' SALEM for gi#ing all the
encouragement recei#ed during the MBA ?ourse/

I would like to e$press my sincere gratitude to +rof/ Mr/ A.ASHO- -UMAR
$E.'M$A.'M.PHIL.'M.SC%PSY&.'PGDMM.'PH.D.'HOD.' department of M$A .for
gi#ing this opportunity to acAuire real corporate e$perience/
I am greatly pri#ileged to e$press my faculty guide MISS P.IS,ARYA' M$A' VSA
SCHOOL OF MANAGEMENT' SALEM/ ,or her encouragement and guidance for
completion of this project/

I wish to e$press my deepest gratitude to Mr. A.M NI:AR' CD ( MANAGER %F;A&'
for pro#iding me an opportunity to do my project in their esteemed organi1ation and his
#aluable guidance in doing this project/

I would like to thank all members of the faculty. of the department of management
studies. VSA SCHOOL OF MANAGEMENT who in one way or the other took
interest in my project and ga#e my guidance/

I e$press my sincere thanks to all the respondents who ga#e their honest response to my
schedule/ I e$press my profound gratitude to my ,amily Members B ,riends for their
support and encouragement

A$STRACT
,inancial statement is final result of accounting work done during the
accounting period/ ,inancial statements normally include Trading. +rofit and ;oss
Account and Balance "heet/ The user of accounting information may not be able to
get direct reply to certain Auestions from the abo#e statements/ 0owe#er. by
e$pressing the items in the financial statement. in relation to each other we can get
meaningful information/
Analysis of financial statement has been defined as Ca process of e#aluating
the relationship between the component parts of the financial statement to obtain a
better understanding of a firmDs position and financial performance/
,inancial statement analysis is an important part of the o#erall financial
assessment/ The different userDs looks at the business concern from their respecti#e
#iew point and are interested in knowing about its profitability and financial
condition/ A detailed cause and effect study of the study of the profitability and
financial condition is the o#erall objecti#e of financial statement analysis/
There are different ways by which financial statement analysis can be
understand and one among them is C)atio Analysis C/
)atio analysis is the process of determining and interpreting the
relationship between two numerical figures in a financial statement/ It is used as a
benchmark to assess the financial position and performance of the firm/ )atio
analysis will be of much use as it helps to summari1e large Auantities of financial
data and make Aualitati#e judgment about the financial position and performance
of a firm/
S.No. C4/8ter P/ge No
;ist of tables
;ist of charts
I
II
Introduction
Induction about the industry
Industry profile
?ompany profile
0
8
2 Main theme of study
Introduction of the study
Objecti#es of the study
The need of the study
20
2
22
3 )esearch methodology
"cope of the study
;imitation of study
)e#iew of literature
Methods of data analysis
27
24
28
2=
7 )esults. finds and suggestions
,indings
suggestions
conclusion
%4
%8
%>
4 Bibliography
LIST OF TA$LES
Table/ -o -ame Of The Table +age -o
Table showing current ratio 33
2 Table showing liAuid ratio 34
3 Table showing cash position ratio 3>
7 Table showing debt eAuity ratio 3=
4 Table showing proprietors funds 7
8 Table showing fi$ed assets to net worth ratio 73
> Table showing stock turno#er ratio 74
% Table showing debtors turno#er ratio 7>
= Table showing fi$ed assets turno#er ratio 7=
0 Table showing capital turno#er ratio 4
Table showing Auick assets turno#er ratio 43
2 Table showing total assets turno#er ratio 44
3 Table showing cash total assets ratio 4>
7 Table showing capital earing ratio 4=
4 Table showing net profit ratio 8
8 Table showing gross profit ratio 83
> Table showing operating ratio 84
% Table showing return on shareholder funds
ratio
8>
= Table showing common si1e balance sheet as
200=! 203 05,? ";I?/
8=
20 Table showing common!si1e balance sheet as on
3
st
march 20 and 202
>0
2 Table showing ?omparati#e Income statement as
on 200=!200 to 200!20
>
22 Table showing Income statement as on 200!20
to 20!202
>2
23 Table showing ?omparati#e Income statement as
on 20!202to 202!203
>3
27 Table showing ?omparati#e Income statement for
year ended 05,? ";I? 200=!203
>7
24 Table showing ?ommon si1e Balance "heet as on
3
st
March 200% and 200=
>4
28 Table showing ?ommon si1e Balance "heet as on
3
st
March 200= and 200
>>
2> Table showing ?ommon si1e Balance "heet as on
3
st
March 200 and 20
>=
2% Table showing ?ommon si1e Balance "heet as on
3
st
March 20 and 202
%
2= Table showing ?ommon si1e Balance "heet as on
3
st
March 202 and 203
%3
LIST OF CHARTS
C4/rt. No N/2e O5 T4e C4/rt P/ge No
?hart "howing ?urrent )atio 37
2 ?hart "howing liAuid ratio 38
3 ?hart "howing cash position ratio 3%
7 ?hart "howing debt eAuity ratio 70
4 ?hart "howing proprietors funds 72
8 ?hart "howing fi$ed assets to net worth ratio 77
> ?hart "howing stock turno#er ratio 78
% ?hart "howing debtors turno#er ratio 7%
= ?hart "howing fi$ed assets turno#er ratio 40
0 ?hart "howing capital turno#er ratio 42
?hart "howing Auick assets turno#er ratio 47
2 ?hart "howing total assets turno#er ratio 48
3 ?hart "howing cash total assets ratio 4%
7 ?hart "howing capital earing ratio 80
4 ?hart "howing net profit ratio 82
8 ?hart "howing gross profit ratio 87
> ?hart "howing operating ratio 88
CHAPTER ( I
GENERAL INTRODUCTION
/ I-T)O5*?TIO-
,inance is one of the primary reAuisites of a business and modern management
ob#iously depends largely on the efficient management of the finance/
,inance statement are prepared primarily for decision making that play a dominate role
in setting the frame work of managerial decision/ This right Auality of money for
liAuidity consideration of right Auality. whether owned or borrowed funds/
The right time to preser#e sol#ency from the right sources and the cost of
capital /financial statements are reliable financial information about economic resources
and obligations /it pro#ides financial information that assist in estimating the earning
potential of business to disclose. to the e$tent possible. other information related to the
financial statement that is rele#ant to the needs of the statement/
MEANING OF FINANCIAL PERFORMANCE
The term financial analyses also known as analysis and interpretation of financial
statements refers to the process of determining financial strengths and weakness of the
firm by establishing strategic relationship between the items of the balance sheet. profit
and loss account and #arious financial factors in a business as disclosed by a single set of
statements. and a study of the trend of these analyses/
Indian ,inancial )eforms with )eference to Banking "ector/
! A ?ritical E#aluation
Analysis of Indian ,inancial "ector re#eals that it is at present going through a
phase of stable growth rate which is e$periencing a upward swing/ The rise can be
maintained o#er a long period by keeping the inflation down/
The financial sector in India has e$perienced a growth rate of %/4F per annum/
The rise in the growth rate suggests the growth of the economy/ The financial policies
and the monetary policies are able to sustain a stable growth rate/
The reforms pertaining to the monetary policies and the macro economic
policies o#er the last few years ha#e influenced the Indian economy to the core/ The
major step towards opening up of the financial market further was the nullification of the
regulations restricting the growth in the financial sector/ To maintain such a growth for a
long term the inflation has to come down further/ The analysis of Indian financial sector
shows the growth of the sector was the result of the indi#idual de#elopment of the
di#isions under the sector/ Analysis of the Indian ?apital market/The ratio of the
transaction was increased with the share ratio and deposit system/The remo#al of the
pliable but ill!used forward trading mechanism/The introduction of InfoTech systems in
the -ational "tock E$change 9-"E< in order to cater to the #arious in#estors in different
locations/
+ri#ati1ation of stock e$changes/
Analysis of the Indian 'enture ?apital market/
The #enture capital sector in India is one of the most acti#e in the financial sector in
spite of the hindrances by the e$ternal set up/
+resently in India there are around 37 national and 2 international "EBI registered
#enture capital funds Analysis of the Indian Banking sector/
The banking system in India is the most e$tensi#e/ The total asset #alue of the entire
banking sector in India is nearly *"G 2>0 billion/
The total deposit is nearly *"G 220 billion/ Banking sector in India has been transformed
completely/
+resently the latest inclusions such as Internet banking and ?ore banking ha#e made
banking operations more users friendly and easy/
A./06sis o5 t4e I.9i/. I.s<r/.3e se3tor:
6ith the opening of the market. foreign and pri#ate Indian players are keen to
con#ert untapped market potential into opportunities by pro#iding tailor!made productsH
The insurance market is filled up with new players which has led to the introduction of
se#eral inno#ati#e insurance based products. #alue add!ons. and ser#ices/
Many foreign companies ha#e also entered the arena such as Tokio Marine. A#i#a.
Allian1. ;ombard (eneral. AM+. -ew &ork ;ife. "tandard ;ife. AI(. and "un ;ife/The
competition among the companies has led to aggressi#e marketing. and distribution
techniAues/The acti#e part of the Insurance )egulatory and 5e#elopment Authority
9I)5A< as a regulatory body has pro#ided to the de#elopment of the sector In#estment in
India ! ,inancial "ector B )eform Bank norms liberali1ed and banks gi#en the freedom
to decide le#els of holding of indi#idual items of in#entories and recei#ables/ ?eiling on
term loans raised to )s/ 0.000 million for projects in#ol#ing e$pansion2moderni1ation
of power generation capacities/ Banks allowed setting their own interest rate on post!
shipment e$port credit 9in )upees< for o#er =0 days/ 5eregulation of interest rates on
loans o#er )s/ 200.000 against term deposits and on domestic deposits with maturity
periods o#er two years/ Banks freed to fi$ their own foreign e$change open position
limit subject to )BI appro#al/(uidelines issued to banks to ensure Aualitati#e
impro#ement in their customer ser#ice/ ;oan system introduced for deli#ery of bank
credit/ Banks reAuired to bifurcate the ma$imum permissible bank finance of )s/ 200
million and abo#e into loan component of 70F 9short term working capital loan< and
cash credit component of 80F/The last decade witnessed the maturity of IndiaIs financial
markets/ "ince ==. e#ery go#ernments of India took major steps in reforming the
financial sector of the country/ The important achie#ements in the following fields is
discussed under serparate headsH
,inancial markets
)egulators
The banking system
-on!banking finance companies
The capital market
Mutual funds
O#erall approach to reforms
5eregulation of banking system
?apital market de#elopments
?onsolidation imperati#e
-ow let us discuss each segment separately/
,inancial Markets
In the last decade. +ri#ate "ector Institutions played an important role/ They grew
rapidly in commercial banking and asset management business/ 6ith the openings in the
insurance sector for these institutions. they started making debt in the
market/?ompetition among financial intermediaries gradually helped the interest rates to
decline/ 5eregulation added to it/ The real interest rate was maintained/ The borrowers
did not pay high price while depositors had incenti#es to sa#e/ It was something between
the nominal rate of interest and the e$pected rate of inflation/
Reg<0/tors:
The ,inance Ministry continuously formulated major policies in the field of financial
sector of the country/ The (o#ernment accepted the important role of regulators/ The
)eser#e Bank of India 9)BI< has become more independant/ "ecurities and E$change
Board of India 9"EBI< and the Insurance )egulatory and 5e#elopment Authority 9I)5A<
became important institutions/ Opinions are also there that there should be a super!
regulator for the financial ser#ices sector instead of multiplicity of regulators/
T4e =/.>i.g s6ste2:
Almost %0F of the business are still controlled by +ublic "ector Banks 9+"Bs</
+"Bs are still dominating the commercial banking system/ "hares of the leading +"Bs
are already listed on the stock e$changes/The )BI has gi#en licences to new pri#ate
sector banks as part of the liberalisation process/ The )BI has also been granting licences
to industrial houses/ Many banks are successfully running in the retail and consumer
segments but are yet to deli#er ser#ices to industrial finance. retail trade. small business
and agricultural finance/The +"Bs will play an important role in the industry due to its
number of branches and foreign banks facing the constrait of limited number of
branches/ 0ence. in order to achie#e an efficient banking system. the onus is on the
(o#ernment to encourage the +"Bs to be run on professional lines/
De7e0o82e.t 5i./.3e i.stit<tio.s:
,IsIs access to ";) funds reduced/ -ow they ha#e to approach the capital market
for debt and eAuity funds/ ?on#ertibility clause no longer obligatory for assistance to
corporates sanctioned by term!lending institutions/ ?apital adeAuacy norms e$tended to
financial institutions/
5,Is such as I5BI and I?I?I ha#e entered other segments of financial ser#ices
such as commercial banking. asset management and insurance through separate #entures/
The mo#e to uni#ersal banking has started/
No.(=/.>i.g 5i./.3e 3o28/.ies:
In the case of new -B,?s seeking registration with the )BI. the reAuirement of
minimum net owned funds. has been raised to )s/2 crores/
*ntil recently. the money market in India was narrow and circumscribed by tight
regulations o#er interest rates and participants/ The secondary market was
underde#eloped and lacked liAuidity/
"e#eral measures ha#e been initiated and include new money market instruments.
strengthening of e$isting instruments and setting up of the 5iscount and ,inance 0ouse
of India 95,0I</
The )BI conducts its sales of dated securities and treasury bills through its open market
operations 9OMO< window/ +rimary dealers bid for these securities and also trade in
them/ The 5,0I is the principal agency for de#eloping a secondary market for money
market instruments and (o#ernment of India treasury bills/ The )BI has introduced a
liAuidity adjustment facility 9;A,< in which liAuidity is injected through re#erse repo
auctions and liAuidity is sucked out through repo auctions/
On account of the substantial issue of go#ernment debt. the gilt! edged market occupies
an important position in the financial set! up/ The "ecurities Trading ?orporation of
India 9"T?I<. which started operations in June ==7 has a mandate to de#elop the
secondary market in go#ernment securities/
;ong!term debt marketH The de#elopment of a long!term debt market is crucial to the
financing of infrastructure/ After bringing some order to the eAuity market. the "EBI has
now decided to concentrate on the de#elopment of the debt market/ "tamp duty is being
withdrawn at the time of dematerialisation of debt instruments in order to encourage
paperless trading/
T4e 3/8it/0 2/r>et:
The number of shareholders in India is estimated at 24 million/ 0owe#er. only an
estimated two lakh persons acti#ely trade in stocks/ There has been a dramatic
impro#ement in the countryIs stock market trading infrastructure during the last few
years/ E$pectations are that India will be an attracti#e emerging market with tremendous
potential/ *nfortunately. during recent times the stock markets ha#e been constrained by
some unsa#oury de#elopments. which has led to retail in#estors deserting the stock
markets/
M<t</0 5<.9s:
The mutual funds industry is now regulated under the "EBI 9Mutual ,unds<
)egulations. ==8 and amendments thereto/ 6ith the issuance of "EBI guidelines. the
industry had a framework for the establishment of many more players. both Indian and
foreign players/
The *nit Trust of India remains easily the biggest mutual fund controlling a corpus of
nearly )s/>0.000 crores. but its share is going down/ The biggest shock to the mutual
fund industry during recent times was the insecurity generated in the minds of in#estors
regarding the *" 87 scheme/ 6ith the growth in the securities markets and ta$
ad#antages granted for in#estment in mutual fund units. mutual funds started becoming
popular/
The foreign owned AM?s are the ones which are now setting the pace for the industry/
They are introducing new products. setting new standards of customer ser#ice.
impro#ing disclosure standards and e$perimenting with new types of distribution/
The insurance industry is the latest to be thrown open to competition from the pri#ate
sector including foreign players/ ,oreign companies can only enter joint #entures with
Indian companies. with participation restricted to 28 per cent of eAuity/ It is too early to
conclude whether the erstwhile public sector monopolies will successfully be able to
face up to the competition posed by the new players. but it can be e$pected that the
customer will gain from impro#ed ser#ice/
The new players will need to bring in inno#ati#e products as well as fresh ideas on
marketing and distribution. in order to impro#e the low per capita insurance co#erage/
(ood regulation will. of course. be essential/
O7er/00 /88ro/34 to re5or2s:
The last ten years ha#e seen major impro#ements in the working of #arious
financial market participants/ The go#ernment and the regulatory authorities ha#e
followed a step!by!step approach. not a big bang one/ The entry of foreign players has
assisted in the introduction of international practices and systems/
Technology de#elopments ha#e impro#ed customer ser#ice/ "ome gaps howe#er remain
9for e$ampleH lack of an inter!bank interest rate benchmark. an acti#e corporate debt
market and a de#eloped deri#ati#es market</
On the whole. the cumulati#e effect of the de#elopments since == has been Auite
encouraging/ An indication of the strength of the reformed Indian financial system can
be seen from the way India was not affected by the "outheast Asian crisis/ 0owe#er.
financial liberalisation alone will not ensure stable economic growth/ "ome tough
decisions still need to be taken/ 6ithout fiscal control. financial stability cannot be
ensured/ The fate of the ,iscal )esponsibility Bill remains unknown and high fiscal
deficits continue/ In the case of financial institutions. the political and legal structures
h#e to ensure that borrowers repay on time the loans they ha#e taken/ The phenomenon
of rich industrialists and bankrupt companies continues/ ,urther. frauds cannot be totally
pre#ented. e#en with the best of regulation/ 0owe#er. punishment has to follow crime.
which is often not the case in India/
Dereg<0/tio. o5 =/.>i.g s6ste2:
+rudential norms were introduced for income recognition. asset classification.
pro#isioning for delinAuent loans and for capital adeAuacy/ In order to reach the
stipulated capital adeAuacy norms. substantial capital were pro#ided by the (o#ernment
to +"Bs/
(o#ernment pre!emption of banksI resources through statutory liAuidity ratio 9";)< and
cash reser#e ratio 9?))< brought down in steps/ Interest rates on the deposits and
lending sides almost entirely were deregulated/
-ew pri#ate sector banks allowed to promote and encourage competition/ +"Bs were
encouraged to approach the public for raising resources/ )eco#ery of debts due to banks
and the ,inancial Institutions Act. ==3 was passed. and special reco#ery tribunals set up
to facilitate Auicker reco#ery of loan arrears/
Bank lending norms liberalised and a loan system to ensure better control o#er credit
introduced/ Banks asked to set up asset liability management 9A;M< systems/ )BI
guidelines issued for risk management systems in banks encompassing credit. market
and operational risks/
C/8it/0 2/r>et 9e7e0o82e.ts:
The ?apital Issues 9?ontrol< Act. =7>. repealed. office of the ?ontroller of
?apital Issues were abolished and the initial share pricing were decontrolled/ "EBI. the
capital market regulator was established in ==2/
,oreign institutional in#estors 9,IIs< were allowed to in#est in Indian capital markets
after registration with the "EBI/ Indian companies were permitted to access international
capital markets through euro issues/
The -ational "tock E$change 9-"E<. with nationwide stock trading and electronic
display. clearing and settlement facilities was established/ "e#eral local stock e$changes
changed o#er from floor based trading to screen based trading/
Pri7/te 2<t</0 5<.9s 8er2itte9:
The 5epositories Act had gi#en a legal framework for the establishment of
depositories to record ownership deals in book entry form/ 5ematerialisation of stocks
encouraged paperless trading/ ?ompanies were reAuired to disclose all material facts and
specific risk factors associated with their projects while making public issues/
To reduce the cost of issue. underwriting by the issuer were made optional. subject to
conditions/ The practice of making preferential allotment of shares at prices unrelated to
the pre#ailing market prices stopped and fresh guidelines were issued by "EBI/
"EBI reconstituted go#erning boards of the stock e$changes. introduced capital
adeAuacy norms for brokers. and made rules for making client or broker relationship
more transparent which included separation of client and broker accounts/
Buy back of shares allowed
The "EBI started insisting on greater corporate disclosures/ "teps were taken to
impro#e corporate go#ernance based on the report of a committee/ "EBI issued detailed
employee stock option scheme and employee stock purchase scheme for listed
companies/ "tandard denomination for eAuity shares of )s/ 0 and )s/ 00 were
abolished/ ?ompanies gi#en the freedom to issue demateriali1ed shares in any
denomination/
A system of rolling settlements introduced/ "EBI empowered to register and regulate
#enture capital funds/ The "EBI 9?redit )ating Agencies< )egulations. === issued for
regulating new credit rating agencies as well as introducing a code of conduct for all
credit rating agencies operating in India/
Co.so0i9/tio. i28er/ti7e:
Another aspect of the financial sector reforms in India is the consolidation of
e$isting institutions which is especially applicable to the commercial banks/ In India the
banks are in huge Auantity/ ,irst. there is no need for 2> +"Bs with branches all o#er
India/ A number of them can be merged/ The merger of +unjab -ational Bank and -ew
Bank of India was a difficult one. but the situation is different now/ -o one e$pected so
many employees to take #oluntary retirement from +"Bs. which at one time were much
sought after jobs/ +ri#ate sector banks will be self consolidated while co!operati#e and
rural banks will be encouraged for consolidation. and anyway play only a niche role/
In the case of insurance. the ;ife Insurance ?orporation of India is a behemoth. while the
four public sector general insurance companies will probably mo#e towards
consolidation with a bit of nudging/ The *TI is yet again a big institution. e#en though
facing difficult times. and most other public sector players are already e$iting the mutual
fund business/ There are a number of small mutual fund players in the pri#ate sector. but
the business being comparati#ely new for the pri#ate players. it will take some time/ 6e
finally come to con#ergence in the financial sector. the new bu11word internationally/
0i!tech and the need to meet increasing consumer needs is encouraging con#ergence.
e#en though it has not always been a success till date/ In India organisations such as
I5BI. I?I?I. 05,? and "BI are already trying to offer #arious ser#ices to the customer
under one umbrella/ This phenomenon is e$pected to grow rapidly in the coming years/
6here mergers may not be possible. alliances between organisations may be
effecti#e/'arious forms of bancassurance are being introduced. with the )BI ha#ing
already come out with detailed guidelines for entry of banks into insurance/ The ;I? has
bought into ?orporation Bank in order to spread its insurance distribution network/
".+ INDUSTRY PROFILE IN INDIA:
Banks ha#e been accorded greater discretion in sourcing and utili1ation of
resources. albeit in an increasingly competiti#e en#ironment/ The outreach of the Indian
banking system has increased in terms of e$pansion of branches2ATMs/
In the post!reform period. assets2liabilities of banks ha#e grown consistently at a high
rate/ The financial performance of banks also impro#ed as reflected in their increased
profitability/ -et profit to assets ratio impro#ed from 0/7= per cent in 2000!0 to /3 per
cent in 2003!07/ Although it subseAuently declined to 0/%% per cent in 2004!08. it was
still significantly higher than that in the early ==0s/ Banks ha#e been successful in
weathering the impact of upturn in interest rate cycle through increasing di#ersification
of their income/
Though banks had to incur huge e$penditures on up gradation of information technology.
the restructuring of the workforce in public sector banks helped them cut down the staff
cost and increase in business per employee/ Another welcome de#elopment has been the
sharp reduction in non!performing loans 9-+;s</ Both gross and net -+;s started to
decline in absolute terms since 2002!03/ (ross -+;s as percentage of gross ad#ances.
which were abo#e 4 per cent in the early ==0s. are now less than 3 per cent/ This
distinct impro#ement in asset Auality may be attributed to the impro#ed reco#ery climate
underpinned by strong macroeconomic performance as well as se#eral institutional
measures initiated by the )eser#e Bank2(o#ernment such as debt reco#ery tribunals.
;ok Adalats. scheme of corporate debt restructuring in 200. the "A),AE"I Act in
2002/ "ince ==4!=8. the banking sector. on the whole. has been consistently
maintaining ?)A) well abo#e the minimum stipulated norm/ The o#erall ?)A) for
scheduled commercial banks increased from %/> per cent at end!March ==8 to 2/3 per
cent at end!March 2008/
The number of banks not complying with the minimum ?)A) also declined from at
end!March ==8 to just two by end!March 2008/ Impro#ed capital position stemmed
largely from the impro#ement in profitability and rising of capital from the market.
though in the initial stages the (o#ernment had to pro#ide funds to recapitali1e weak
public sector banks/ E#en though public sector banks continue to dominate the Indian
banking system. accounting for nearly three!fourths of total assets and income. the
increasing competition in the banking system has led to a falling share of public sector
banks. and increasing share of the new pri#ate sector banks. which were set up around
mid!==0s/ It is clear that we are at the beginning of this new phase in the Indian
banking with competiti#e pressure. both domestic and e$ternal. catching up and the need
for banks to continuously reassess and reposition themsel#es in their business plans/ The
financial system in India. through a measured. gradual. cautious. and steady process. has
undergone substantial transformation/ It has been transformed into a reasonably
sophisticated. di#erse and resilient system through well!seAuenced and coordinated
policy measures aimed at making the Indian financial sector more competiti#e. efficient.
and stable/ ?oncomitantly. effecti#e monetary management has enabled price stability
while ensuring a#ailability of credit to support in#estment demand and growth in the
economy/ ,inally. the multi!pronged approach towards managing capital account in
conjunction with prudential and cautious approach to financial liberali1ation has ensured
financial stability in contrast to the e$perience of many de#eloping and emerging
economies/ This is despite the fact that we faced a large number of shocks. both global
and domestic/ Monetary policy and financial sector reforms in India had to be fine tuned
to meet the challenges emanating from all these shocks/ 'iewed in this light. the success
in maintaining price and financial stability is all the more creditworthy/
INDUSTRY PROFILE IN ,ORLD :
The 6orld BankIs support for the financial sector has e$hibited similarly
contrasting patterns/ On the one hand. many of the financial sector loans made in the late
=%0s and ==0s ha#e played a key role in restoring growth with eAuity/ At the same
time. howe#er. the a#erage outcome of Bank support for the financial sector has sharply
deteriorated from being one of the best performing sectors before globali1ation to
currently being on e of the weakest/ In addition. the composition and le#el of Bank
support for the financial sector has changed in basic ways. focusing more on adjustment
lending and less on financial intermediary lending. particularly following the BankIs
==2 establishment of a new framework go#erning financial sector operations!!known as
Operational 5irecti#e 9O5< %/30/ ,inally. in the past year the Bank has committed to a
renewed emphasis on supporting the financial sector. and in ==> it announced a new
financial sector strategy/
This study e$amines the BankIs performance in the financial sector in this e#ol#ing
en#ironment/ It e$amines the results on the ground of the BankIs performance o#er this
period of change and turbulence/ It analy1es financial sector operations through the
prism of the ==2 financial operational directi#e. and traces the effects that these
operations had on country economic performance/ These results. in turn. pro#ide insights
into whether countries assisted by the Bank impro#e o#erall economic performance
when they follow the financial policies recommended by the Bank/ In effect. these
results pro#ide support for the metaphor. often used by +resident 6olfensohn. that the
finance sector is. in many respects. the lifeblood of the economy and financial sector
reform is akin to heart surgery/
This study. for the first time. brings together an analysis of the outcomes of financial
sector adjustment lending and in particular. the BankIs treatment of financial crises/ The
Auestion addressed is whether the Bank ga#e adeAuate attention in these operations. to
the fragility of financial systems. and. indeed. whether financial sector fragility is
measurable in ways that can help a#oid future problemsK ,inally. the study e$amines
how firmly grounded the BankIs new financial sector strategy is in the BankIs
e$perience!!does the new strategy build on the lessons learned by the BankK for
e$ample. does this e$perience support the argument that a longer!term perspecti#e on the
financial sector is necessary!!that financial reform is best seen as a process rather than a
projectK "imilarly. has policy ad#ice and sector work had an appreciable effect on
financial sector lendingK In short. how well ha#e financial sector operations emphasi1ed
creating incenti#es for prudent banking practicesK
The studyIs main finding is that the new financial sector strategy si indeed informed by
the BankIs comple$ and turbulent e$perience in the financial sector/ Its new strategy is
based on the lessons learned during one of the most #olatile financial periods in history/
But. the BankIs learning process has been a #ery slow one. and serious concerns remain/
Indeed. these concerns ha#e intensified/ ,inancial sector issues are at the core of the
recent crises in East Asia and the international machinery to forsee. pre#ent and manage
such crises is under stress/ The discussion of a potential financial sector role for the
Bank. beyond its current country focus. lies outside the scope of this report/"etting aside
these basic Aualifications. the main message is positi#e/ ,irst. the study shows that the
BankIs e$perience is consistent with the growing con#entional wisdom that an effecti#e
financial sector policy is at the heart of the processes which generate and nurture growth/
As a result. the study implies that well!designed financial policies can be e$pected to
contribute to greater growth/ "econd. the study indicates that the BankIs new financial
sector strategy. its increased emphasis on the need for a higher set of indicators to judge
performance. and finally. its new lending instruments. such as Adaptable ;ending. are
firmly rooted in the BankIs e$perience/ ?onseAuently. assuming that the generic
weaknesses of the global system are addressed. the new strategy should impro#e the
BankIs impact/ /
/
DEFINITION
According to "olomon. financial management is concerned with the efficient use of
an important economic resource. namely. capital funds/ According to +hilippauts.
C,inancial Management is concerned with the management decisions the result in the
acAuisitions and financing of long term and short term credits for the firm/ As such it
deals with the situations that reAuire selection of a specific asset as well as the problem
of si1e and growth of an enterprise/ The analysis of this decision is based on the e$pected
inflows and outflows of funds and their effects upon managerial objecti#es/
FINANCE FUNCTION ? IMPORTANCE
In general. the term CfinanceL is understood as pro#ision of funds of funds and when
needed/ ,inance is the essential reAuirement : sine Aua non! of e#ery organi1ation/
Re@<ire9 e7er6A4ere:
All acti#ities. be it production. marketing. human resources de#elopment. purchases and
e#en research and de#elopment. depend on the adeAuate and timely a#ailability of
finance both for commencement and their smooth continuation to completion/
E55i3ie.t <ti0iB/tio. 2ore i28ort/.t
,inance function is the most important function of all business acti#ities/
The efficient management of business enterprise is closely linked with the
efficient management of its finances/
The need of finance starts with the setting up of business/ Its growth and
e$pansion reAuire more funds/ The funds ha#e to be raised from #arious
sources/
The implication. in particular. risk attached/ The raising of money. alone.
is not important/ Terms and conditions while raising money are more
important/ ?ost of funds is an important element/ Its utili1ation is rather
more important/
If funds are utili1ed properly. repayment would be possible and easier.
too/ ?are has to be e$ercised to match the inflow and outflow of funds/
FUNCTIONS OF FINANCE
,inance function is the most important function of a business/ ,inance is. closely.
connected with production. marketing and other acti#ities/ In the absence of finance. all
these acti#ities come to a halt/ In fact. only with finance. a business acti#ity can be
commenced. continued and e$panded/ ,inance e$ists e#erywhere. be it production.
marketing. human resource de#elopment or undertaking research acti#ity/
*nderstanding the uni#ersality and importance of finance. finance manager is associated.
in modern business. in all acti#ities as no acti#ity can e$ist without funds/
,inancial decisions or finance function are closely inter!connected/ All decisions mostly
in#ol#ed finance/ 6hen a decision in#ol#es finance. it is a financial decision in a
business firm/
In all the following financial areas of decision!making. the role of financial 6e can
classify the finance function or financial decisions into four major groupsH
9A< In#estment decision or long!term asset mi$ decision
9B< ,inance decision or capital mi$ decision
9?< ;iAuidity decision or short!term asset mi$ decision
95< 5i#idend decision or profit allocation decision/
%A& I.7est2e.t 9e3isio.
In#estment. decision relate to selection of assets in which funds are to be in#estment
by the firm/ In#estment alternati#e are numerous/ )esources are scarce and limited/
They ha#e to be rationed and discretely used/ In#estment decision allocate and ration
the resource among the competing in#estment alternati#es or opportunities/ The
effort is to find out the projects. which are acceptable/ In#estment decisions relate to
the total amount of assets to be held and their composition in the form of fi$ed and
current assets/ Both the factors influence the risk the organi1ation is e$posed to/ The
more important aspect is how the in#estors percei#e the risk/
%$&Fi./.3e 9e3isio.
Once in#estment decision is made. the ne$t step is how to raise finance for the concerned
in#estment/ ,inance decision is concerned with the mi$ or composition of the sources of
raising to funds reAuired by the firm/ In other words. it is related to the pattern of
financing/
%C&Li@<i9it6 9e3isio.
;iAuidity decision is concerned with the management of current assets/ Basically. this is
working capital management/ 6orking capital management is concerned with the
management of current assets/ It is concerned with short!term sur#i#al/ "hort term!
sur#i#al is a prereAuisite for long!term sur#i#al/
6hen more funds are tied up in current assets. the firm would enjoy greater liAuidity/ In
conseAuence. the firm would not e$perience any difficulty in making payment of debts.
as and when they fall due/
6ith e$cess liAuidity. there would be no default in payments/ "o. there would be no
threat of insol#ency for failure of payments/ 0owe#er. funds ha#e economic cost/ Idle
current assets do not anything/ 0igher liAuidity is at the cost of profitability/
%D&Di7i9e.9 9e3isio.
5i#idend decision is concerned with the amount of profits to be distributed and
retained in the firm/
Di7i9e.9:
The term Mdi#idendD relates to the portion of profit. which is distributed to
shareholder of the company/ It is a reward or compensation to them for their
in#estment made in the firm/ The di#idend can be declared from the current profits or
accumulated profits/
".*COMPANY PROFILE
05,? and "tandard ;ife ,irst came together for a possible joint #enture. to enter the
;ife Insurance market. in January ==4/ It was clear from the outset the both companies
shared similar #alues and beliefs and a strong relationship Auickly formed/ In October
==4 the companies signed a 3 year joint #enture agreement/
The company was incorporated on 7th August 2000 under the naeme of 05,?
"tandard ;ife Insurance ?ompany ;imited/
The ambition from as far back as October ==4 was to be the first pri#at
company to re enter the life insurance market in India/ On the 23rd of October 2000.
this ambition was reali1ed when 05,? standard ;ife was the only life company to be
granted a certificate or registration/
05,? are the main share holders in 05,? "tandard ;ife. with %/7F while
"tandard ;ife owns %/8F/ (i#en "tandard ;ifeIs e$isting in#estment in the 05,?
(roup. this is the ma$imum in#estment allowed under current regulations/ 05,? and
"tandard ;ife ha#e a long and close relationship built upon shared #alues and trust/
The ambition of 05,? "tandard ;ife is to Mirror the success of the parent companies
and be the yardstick by which all other insurance companyDs in India are measured/ The
companyIs fast mo#ing plans are childrenDs plan and unit linked plans/ ?hildrenIs plan
was launched in ,eb/I03 and unit linked plans were launched in -o#/07/
The four functional areas identified in the company areH!
Marketing function
0uman )esource function
,inance function
Operations functions
M/r>eti.g ,i.g:
The marketing team of 05,? ";I? " is di#ided for two major purposes. +romotion B
Ad#ertising di#ision and "ales 5i#ision/
Pro2otio. ; A97ertisi.g Di7isio.:
The di#ision deals with all acti#ities like designing of ad#ertisements for print
and tele#ision media. designing of "ales brochures. +romotional ?ampaign design etc/.
This di#ision is being operated from the corporate office of 05,? ";I?/
S/0es Di7isio.:
This di#ision e$clusi#ely deals with the sale of policies/ The sales force uses the
promotional acti#ities and material to generate sales/
There are two sales channels
< )etail "ales
2< ?orporate "ales
Ret/i0s S/0es:
It has total strength of 0000 employees working in 07 branches of the company/
These retail sales agents are called as N,inancial ?onsultants 9,?<N/ -early 20000 ,?s
are now working for generating business all o#er India/ In -ell ore Branch alone there
are =4 ,?s/
Cor8or/te S/0es:
It has total strength of 7000 employees working in four banks in #arious parts of India/
The total business generated by corporate agents in more. e#en though the sales force is
less when compared to )etail "ales ,orces/ The four banks working for 05,? ";I? are
05,? Bank. *nion Bank of India. Indian Bank of India of and "araswathi Bank/ These
banks are known as ?orporate Agents/
H<2/. reso<r3e Ai.g:
Re3r<it2e.t
The company prefers for Internal )ecruitment as far as possible/ In case of e$ternal
recruitment. they adopt referrals as first option and then adopt +ersonal Inter#iew for
)ecruitment of top and middle le#el management/
Tr/i.i.g
Training is the integral part of any business strategy/ Almost all the employees ha#e
undergone training to enhance their technical skills/
And the soft beha#ioral skills to be able to deli#er the ser#ice standards that the
company has set for itself/
Besides the mandatory training for the financial consultants for being licensed the
company has de#eloped training modules like 5I"0A co#ering #arious aspects including
selling skills. objection handling skills and so on and product training sessions imparting
product knowledge/
Fi./.3i/0 Ai.g:
This function deals with the accounting and portfolio management/ But the most
important function of this wing is in#estment management and ?ost reduction/
O8er/tio.s ,i.g:
This wing deals with the processing of applications and forwarding all types of
communications/ A part from these functions. an additional function is there. it is !
U.9erAriters /.9 /3t</ri/.s Ai.g:
*nderwriters this wing function deals with the decision making process. whether to issue
the policy or notO based on #arious criteria/
A3t</ri/.s:
This wing function is where the mathematicians and e$perts decide #arious figures like
annual premiums and discretionary benefits/
So3i/0 Se3tor O=0ig/tio.s:
*nder I)5A regulations. an insurer is reAuired to meet the prescribed obligations
pertaining to meet the rural sectors/ The company has co#ered 07=0 li#es in the social
sector and written polices aggregating to 2/3F in the rural sector/
The company has intensified its efforts to penetrate the rural and social markets in the
country through a multi!pronged approach/ Besides appointing financial consultants to
ser#ice specific/
(eographical areas in the country. the company continues to work with non
go#ernmental organi1ations in pro#iding life insurance protection too economically to
weaker sections in the society/ The rural product. N05,? Bima Bachat &ojanaN also
contributed to this effort/
IT has been backbone of the companyDs growth and will continue to be
Te34.o0og6:
so in years to come/ )eal time data access to all the offices in the country is one
of the tremendous achie#ements for the company and also one of the factors pro#iding
efficient ser#ices to the employees as well as customers/
Po0i3ies /.9 Pro3e9<res:
Open 5oor +olicy
+articipati#e Management
Middle of the )oad ;eadership
+eriodic +erformance Appraisal
Annual 6age ! +ackage )e#iews
CHAPTER(II
M/i. t4e2e o5 st<96
+."I.tro9<3tio. o5 t4e St<96
,inance is the life blood of business/ ,or the human body there is an automatic
regulation of Auality of blood reAuired/ -o such automation is a#ailable in the case of
business firm hence. there is the necessity to manage finance so that the firm may ha#e
adeAuate funds of #arious natures at its disposal and at the same time a#oid idleness of
funds/ The general meaning of finance is the pro#ision of money at the time it is wanted/
It is the life blood of business acti#ity. which for the production as well as distribution of
goods and ser#ices/ The efficiency of production and marketing operations directly
influenced by the manner in which the finance functions of the enterprise is performed
by the finance di#ision/
+.+ O$JECTIVES OF THE STUDY
"tudy on financial performance of 05,? ";I? "alem/
+)IMA)&H
To analy1e the financial +erformance of 05,? ";I?. "alem/
"E?O-5A)&H
To study the profile of the company/
To e$amine the short term sol#ency position of the company/
To study the financial +erformance of the company/
To e#aluate the profitability position of the company/
To compare the financial statement during the period of 2004 : 2008 to 200= !
200/
To analysis the factors affecting ,inancial and Operating +erformance of the
?ompany/
+.*T4e .ee9 o5 t4e st<96
,inancial analysis play an important role to predict about the future needs of the
funds and planning reAuirements for the organi1ation as whole with out knowing
about the future needs E#ery organi1ation at sometime at other should be aware of its
e$istent financial strength/
,or conducting the study the researcher has gi#en the freedom to meet all the persons
working in this organi1ation where e#er essential and this showed the encouraging
attitude of the management for a study of this kind/ It is worth mentioning that there
were no hesitations from the management of this management organi1ation accepting
the recommendation as identified the researcher without any alternations/
CHAPTER(III
*. Rese/r34 2et4o9o0og6
)esearch methodology is the primary and basic aspect of any kind of project report/ In
this part we ha#e to consider the methods of data collection tools and techniAues which
are going to be applied in analysis and interpretation and major limitation associated
with this project work etc/
PERIOD OF THE STUDY
The study co#ers a period of fi#e year starting from 2002! 2003 t0 2008!
200>/Accountingyear ends on 3
st
march/ The present study was conducted at 05,?
";I? ltd/ This study depends mainly on the secondary/
DATA COLLECTION METHOD
5ata may be classification into two types/ There are primary data and secondary data/
/ +rimary data means the data collected for first hand/
2/ "econdary data means the data which are already collected for the same
or other uses/
Annual reports. financial statement. prospects of the company. and information collected
from journals. maga1ine and articles comes under secondary data/ ,or this study my
project is used for secondary data/
*.". SCOPE OF THE STUDY
This in#estigation was to study the operational efficiency of the past years and its future
course of action for success with relate to area of financial administration/
In this study. an attempt has made to bring out the companyDs financial aspects/
The study is mainly concentrated to gi#e a clear picture of liAuidity. acti#ity and
profitability of efficiency le#el/
A study has future scopeH
To find the reason for the further de#elopment of the company
,urther an attempt can be made to understand the efficiency of the company in
other aspects of financial management/
It can be carried out for more than 4 years in similar aspect/
*.+.Li2it/tio. o5 t4e st<96
Though this project work has been planned carefully and e$ecuted properly. these are
certain limitations. which could be a#oided/ These limitation are of inheritance than
those committed during the course/
;ack of adeAuate internal information as the outsiders. cannot probe in to the internal
confidential matters of a company/
/ The study has been made only for 4 years/
2/ The study is confined to this organi1ation only and the results do not
necessarily reflect the performance of the company as a whole /
3/ Time and cost are also limiting factors secondary data are use
7/ The data gi#es only the past prices/ -o attempt has been made to con#ert
the data into current prices/
4/ This study does not co#er other areas of financial management such as
A / ?apital budgeting/
B / 5ue : point analysis/
*.*Re7ieA o5 0iter/t<re
In this chapter some of the earlier work on ratio Analysis considered as a part of this
research work / brief re#iews of all those works are gi#en below i/e/. research name. his
name of uni#ersity / his objecti#es and methodology and his major finding and
suggestions are referred /
+/' #asudee#an. in the researchDs main objecti#es is to analyses the financial
performance of the company. to study the funds the flow patterns. to judge the sol#ency
of the company/ And to study the trends in working capital management of the
company / the research adopted financial statement analysis funds flow and cash flow
analysis. ration analysis and working capital analysis/
The company need to reduce the funds locked up in in#entory 9application funds</ The
source for such funds awaited from the funds is constituted by working capital facilities
a#ailed from commercial banks/
The funds area costlier because of the interest rates charged on them/ The company
should therefore try to make optimum use of unsecured loans. such as fi$ed deposits
accepted form the public which costs less since the company has to pay less rates of
interest of interest on them/
The role of faster cash accuracy in the efficient management of working capital has been
illustrated by the performance during =%8!%8 crushing reasons/ 6hen deposits a higher
le#els of in#entory. the has still been as appreciable reduction in the interest cost/
P/"rini#as the researcherDs main objecti#e are to critically e$amine and high lights the
financial performance of the company for the period =%!%2 to =%4!%8 to study the
liAuidity and profitability of the company and to study/
To the e$pected le#el/ It needs to be impro#ed by effecti#e utili1ation and control of
current assets/
5r/ sukumal it was found trident is the highest profit earning concern/ it has sufficient
working capital all the year. their decrease in refer and surplus is mainly due to issue of
bonus shared/
This abo#e the study was prepared 5r/ "ukumal the management account I/?/6A/I in
9-o#ember ==4< 'ol. 30. number . page %28/
5r/ 5ebasish Banerjee and Manish Pumar from =%4 : %8 to =%= : =0/ It was obser#ed
that the company has taken funds for financing working capital in all the years/
These are no consistent relation between the growth of sales and working capital/ The
capital is efficient in working capital management/
Another study 5r/ 5ebasish banerjee. working capital management of (rasim industries
;td/ The management the cost #olume profit analysis/
The researcher adopted financial statement analysis. break e#en analysis. trend analysis.
common si1e balance sheet analysis. comparati#e balance sheet analysis/
6orking capital gap re#eals that there is erratic fluctuation in working capital/
,or better earnings. the occupancy ration must be increased by rationali1ation of routes
re#ision of time and efficient fleet utili1ation/
5r/ +/ Indrasana reddy and P/ "omaswar ratio/ This study was based on the data and
information obtained from the annual report of the 0industan company ;td =%=! =0 to
==3 : =7/ This study re#eals that the liAuidity position of 05,? ";I? is satisfactory as
if current ration that the Auick ratio remained abo#e the standard norms throughout
period of study/ The proportion of in#entory to current assets/ Increased and to after
reser#e trends is obser#ed/ The working capital management is not up accounts of
institute of cost and works accounts of India may ==>. #ol 2>. number 4. page 338/
Mr/ +/M/ ?hakra#arthy and A/P 5as this information is collected from jouranal on
accounting and financial research de#elopment association/ It has been found that E?;
operate on a negati#e working capital and that the management should be careful to
careful to keep on the positi#e trends otherwise it may slip down again in to trap to
negati#e working capital. which may referred the further progress of the company/
Mr/ 6asswa 0annington on of the main objecti#es of this of this project study. to
conduct risk return analysis or working capital position. to assess the financial liAuidity
position of the company. to determine the structure and utili1ation of working capital and
its #arious components/ And to assess the implementation of the landon committee
norms with regard to working capital and also by doing analysis I working/
?apital and cash management schedules of charges in working capital include funds
flow statements and funds flow cycle/ And working capital finance like trade credit
working capital ad#ances by commercial bank. short : term financial institutions/
Accounting to sec/ 4% 9a< of the companies act =48 a company can accept public
deposits amounting to 24 percent of it net worth which is the case of #antage leather
9India< ;td/. amount to )s/ crore / so it is strongly recommended that the company
e$plore this type of financing as it s does not reAuest attaching any of the assets of the
company as security/
"ince o#er =0 percent of the companyDs are shipped to one single buyer in (ermany. the
company can consider the option of making these major client and eAuity holders in the
company so that the problem of lack of funds can be made lights/
'antage being e$ports with a good international record. it can consider borrowing from
foreign commercial banks/ Also instead of borrowing from banks with in India only/
Mr/ suresh the researchDs main objecti#es of his project study is to determine the amount
of working capital employed by the company and analysis the working capital
management by the company for specified period of 7 years 9=%4 : %8< to assess the
implementation of tendon committee norms in regard to working capital management by
the company/
*.CMETHODS OF DATA ANALYSIS
The data collected were edited. classified and tabulated for analysis/ The analytical tools
used in this study are.
Fi./.3i/0 too0 /880ie9.
The following analytical tool are.
)atio analysis/
?omparati#e statement
?ommon : si1e statement
RATIO ANALYSIS
I. S4ort ter2s so07e.36 r/tio:
/. C<rre.t r/tio:
?urrent ratio may be defined as the relationship between current assets an current
liabilities/ This ratio also kwon as working capital ratio is a measure of general liAuidity
and is most widely used to make the analysis of short : term financial position or
liAuidity of a firm/ It is calculated by di#iding by the total of current assets by total of the
current liabilities/
=. Li@<i9 r/tio:
Quick ratio. also known as acid test or liAuid then the current ratio. term MliAuidityD
refers to the ability of a firm to pay its short : term obligations as and when they
become due/ Two determines of current ratio as. a measure of liAuidity. are current assets
and current liabilities/
3. C/s4 r/tio:
Although recei#able . debtors and bills recei#able are generally more liAuid than
in#entories. yet there may be doubts regarding their reali1ation to cash immediately
some authorities are the opinion that the absolute liAuid ratio should also be calculated to
gather with current ratio/
Lo.g ter2 so07e.36 r/tio:
De=t ? e@<it6 r/tio:
5ebt : eAuity ratio. also known as e$ternal : internal eAuity ratio is calculated to
measure the relati#e claimRs of outsider and the owners 9i/e/O< shareholders against the
firmDs assets/ this ratio indicates the relationship between the e$ternal eAuities or the out
siders funds and the internal eAuities or the shareholders funds/
Pro8riet/r6 r/tio:
A #ariant to the debt : eAuity ratio is the proprietary ratio which is also known as eAuity
ratio or share holders to total eAuities ratio or net worth to total assets ratio/ The ratio of
proprietors funds9proprietary share holders funds<to total assets is an important ratio for
determining long :term sol#ency of a firm/
R/tio o5 3<rre.t /ssets to 8ro8rietorDs 5<.9s:
The ratio indicates the e$tent to which proprietorDs funds are in#ested in current assets/
There is no rule of thumb for this ratio and depending upon the nature of the business
there may be
5ifferent ratio for different firm/
". Fi1e9 /ssets to .et Aort4 r/tio.
The ratio establishes the relationship between fi$ed assets and share holders funds/ie/
"hare capital plus referees surpluses and retained earnings/ )efers. the firm is side to be
highly geared/
A3ti7it6 Or T<r. O7er R/tio.
Sto3> t<r.o7er r/tio:
E#ery firm has to maintain a certain le#el of finished goods so as to be able to meet the
reAuirements of the business/ But the le#el of in#entory should nether be too low/ It is
harmful to hold more in#entories for the following reasons
De=tors t<r.o7er r/tio:
5ebtorDs turno#er ratio indicates the #elocity of debt collection of firm/ In simple words
if indicates the of times usages debtors 9recei#able< are turned o#er during a year/
Fi1e9 /ssets t<r.o7er r/tioH
This ratio measures sale per rupee of is fi$ed assed/ This ratio is supported to measure
the efficiency with fi$ed are employed a high ratio indicates a high degree of efficiency
in asset utili1ation and low ratio efficient use of assets/
C/8it/0 t<r.o7er r/tio:
?apital turno#er is the relationship between cost of goods sold 9or sales when
information about cost of goods sold is not a#ailable from the financial statements< and
the capital employed/ This ratio is calculated to measure the efficiency or the capital
employed/ As capital is in#ested in a business to make sales and earn profit. this a good
indicator of o#erall profitability/
"& Quick assets turno#er ratio/
+& ?urrent assets to net worth ratio/
*& Total assets turno#er ratio/
C& ?ash to total assets ratio/
#& ,i$ed assets ratio/
The ratio should not be more than /if it is less than /if shows that a part a part of
the working capital has been financed through long :term funds/ This desirable to some
e$tent because part of working capital termed as. Mcare working capitalD is more or less
of a fi$ed nature the ideal ratio is 8>/
PROFITA$ILITY RATIO:
-et profit ratio
-et profit ratio established a relationship between net profit 9after ta$es < and sales. and
indicates the efficiency of the management in manufacturing. selling administrati#e and
other acti#ities of the firm/
(ross profit ratioH
(ross profit ratio measures the relationship of gross to net sales is usually represented as
a percentage/
< Operating profit ratio /
2< Operating ratioH
Operating ratio establishers the relationship between cost of goods sold and other
operating e$penses on the on hand the sales on the other/ In other words it measures the
operations per rupee of sales/
3< )eturn capital employed H
)eturn on capital employed establishes. the relationship between profits and the capital
employed/ It is the primary ratio and is most widely used to measure the o#erall
profitability and efficiency of a business/ The term Mcapital employedD M refers to the total
of in#estment made in a business and can be defined in a number of ways/
7< )eturn of share holders funds ratio/
4< "ecured loan to tangible assets ratio/
TA$LE ( "
CURRENT RATIO:
CURRENT ASSETS ECURRENT LIA$LITY
&ear ?*))E-TA""ET"
9)s/ in laksh <
?*))E-T ;IABI;ITE"
9)s in laksh<
)ATIO
200%!0= >.%8>/40 %.=27/7 0/%%
200=!0 2.002/=2 2.0>/77 0/==
200! 20.=%8/%8 %.%8%/4% /
20!2 22.40/84 2.77=/%4 /%
202!3 2787>/>3 30.>3/22 0/%0
I.ter8ret/tio.:
The table shows the current assets position of the C05,?L/ The current ratio was not
fluctuating trend during the study period/ The current ratios in all years satisfy the
standard norm of 2H/ 0ence the position indicates that the current ratio not satisfactory
during the study from 200%to 203/
CHART ( "
CURRENT RATIO:
TA$LE ( +
LIFUID RATIO GLIFUID ASSETS ECURRENT LIA$ILITIES
&ears ;IQ*I5 A""ET"
9)s/in lakhs<
?*))E-T IABI;ITIE"
9)s/ in /lakhs<
)ATIO
200%!0= 7.823/88 %.=27/7 0/42
200=!0 4.=3%/3% 2.0>/77 0/7=
200! 2.347/04 %.%8%/4% 0/84
20!2 3.%0%/% 2.77=/%4 /
202!3 2787>/>3 30>3/22 0/%0
I.ter8ret/tio.:
The liAuid ratio does not satisfy the standard norm of H/ "o the short term financial
position not satisfactory during the period 200% ! 200= to 200 ! 20/ It is stands at
/ in the year 20 ! 202 and decreases in the ne$t years/
CHART ( +
LIFUID RATIO
TA$LE ( *
CASH POSITION RATIO
CASH $ALANCE E LIFUID LIA$ILITIES
&EA) ?A"0 B BA-P
BA;A-?E"
;IQ*I5
;IABI;ITIE"
)ATIO
200%!0= .824/=0 %.=27/7 0/%
200=!0 3.440/=8 2.0>/77 0/2=
200! 2.77=/0= %.%8%/4% 0/28
20!2 2.77=/0= 2.77=/%4 0/20
202!3 7/27/03 30>3/22 0/3
I.ter8ret/tio.:
The highest cash ratio is recorded as 0/2= in the year 200= : 200/ And the cash ratio of
the company is #ery less in the other years/
CHART ( *
CASH POSITION RATIO
TA$LE ( C
DE$T EFUITY RATIO G EHTERNAL EFUITY EINTERNAL EFUITY
&EA) ESTE)-A;EQ*IT&
9)s/ in /lakhs<
I-TE)-A;EQ*IT&
9)s / in/ lakhs<
)ATIO
200%!0= %3.7=/23 23.87>/2 3/42
200=!0 =7.2>/=% 23.37>/2 3/=%
200! =3.88>/=7 23.87>/2 3/=8
20!2 08.48/>4 77.44%/3> 2/3=
202!3 2787>/>3 3370/00 0/>3
I.ter8ret/tio.:
The abo#e table indentifies the dept : eAuity ratio of siscol was fluctuating during the
study period is lowest in the year 202 :to 203 0f 0/>3 and the highest in the year 200=
to 200 of 3/=% in least two years the company dept :eAuity ratio was not to the standard
norms of the 2H/
CHART ( *
DE$T EFUITY RATIO
TA$LE ( #
PROPRIETORS FUNDS G SHARE HOLDER FUND E TOTAL TANGE$LE
ASSETS
&EA) ?*))E-TA""ET"
9)s / in /laksh<
+)O+)IETO) ,*-5
9)s/in / laksh<
)ATIO
200%!0= >.%8>/40 23.87>/2 0/33
200=!0 2.002/=2 23.87>/2 0/4
200! 20.=%8/%8 23.87>/2 0/%=
20!2 22.40/84 77.44%/3> 0/40
202!3 2>8=/4> =383/4> 0/4
I.ter8ret/tio.:
The abo#e table indicates proprietors ratio of the study period was at fluctuating ratio/
But in the last year it was decreasing to the e$tend of /4 F percentage so. the profit
ratio is unsatisfactory during the study period/
CHART ( #
PROPRIETORS FUNDS
TA$LE ( )
FIHED ASSETS TO NET,ORTH RATIO G FIHED ASSET E NET
,ORTH
&EA) ,ISE5 A""ET
9)s/ in/lakhs<
-ET 6O)T0
9)s/in lakhs<
)ATIO
200%!0= %>.2>0/2= 23.87>/2 3/8=
200=!0 %.=48/7 23.87>/2 3/78
200! >=.4=4/28 23.87>/2 3/38
20!2 >8.74>/=3 77.44%/3> />2
202!3 >20>>/27 77730/>4 /82
I.ter8ret/tio.:
The abo#e table show the fi$ed assets to net worth ratio during the study period the ratio
is decline from 200% : 200= of 3/8= to 200= : 200 of 3/78 the ratio is unsatisfactory/
CHART ( )
FIHED ASSETS TO NET,ORTH RATIO
TA$LE ? I
STOC- TURNOVER RATIO
G COST OF GOODS SOLD EAVERAGE STOC-
&EA) ?O"T O, (OO5 A'E)A(E "TO?P )A5IO
"O;5 9)s/in/lakhs< 9)s/ in/ lakhs<
200%!0= 23.4%8/>3 3.0=>/38 0/=
200=!0 %.%27/77 7.847/= 0/7
200! %.82/4> >.37%/8% 0/3
20!2 33.270/3 %.882/%2 0/7
202!3 3272/3 >7>3/0> 0/7
I.ter8ret/tio. :
The abo#e table is indicates the stock turno#er ratio of the company the
normal ratio is0/ 7 during the year 202 : 203 and the highest ratio is 0/7 during the
year 200% : 200= and 200= : 2000/
CHART ( I
STOC- TURNOVER RATIO

TA$LE ( !
DE$TORS TURNOVER RATIOG CREDIT SALES EACCOUNT
RECEIVALE
&EA) ?)E5IT "A;E"
9)s/in lakhs<
5EBTO)"
9 )s/in/lakhs<
)ATIO
200%!0= 28.%77/73 .000/= 28/%3
200=!0 37.77/48 88=/2= 4/0
200! 3.%72/77 4.22/%3 8/2
20!2 7=.8=3/44 3.8=%/0% 3/73
202!3 8%.%7/00 7.743/08 4/74
I.ter8ret/tio.:
The abo#e table shows the debtors the turno#er ratio shows at the
fluctuating trend/ It shows the highest growth 28/%3 in 200% !0= and the lowest in
8/2 in 200 : 20/
CHART ( !
DE$TORS TURNOVER RATIO
TA$LE (
FIHED ASSETS TURNOVER RATIO G NET SALES EFIHED ASSETS
&EA) "A;E"
9)s/ in /lakhs<
,ISE5 A""ET"
9)s/ in lakhs<
)ATIO
200%!0= 28.%77/73 %>.2>0/2= 0/3
200=!0 37.77/48 %.=48/7 0/7
200! 3.%72/77 >=.4=4/28 0/70
20!2 7=.8=3/44 >8.74>/=3 0/84
202!3 8%%7/00 >20>>/27 0/=4
I.ter8ret/tio.:
The table shows the fi$ed assets turno#er ratio at the increasing trend starting from 0/3
in 200%! 200= to 202 !203/
CHART (
FIHED ASSETS TURNOVER RATIO
TA$LE ( "0
CAPITAL TURNOVER RATIO G SALES E EMPLOYED
&EA) ";AE" ?A+ITA; EM+;O&E5 )ATIO
9)s / in lakhs< 9)s/ in lakhs<
200%!0= 28.%77/73 %8.23/88 0/3
200=!0 37.77/48 %.=7/=0 0/72
200! 3.%72/77 %4.2>2/3= 0/3>
20!2 7=.8=3/44 23.7%/8 0/70
202!3 8%%7/00 77730/>4 /44
I.ter8ret/tio.:
The following table shows the capital turno#er ratio of The highest #alue is /44 during
the year 202 !203 and lowest 0/3 in year 200% !200=/
CHART ( "0
CAPITAL TURNOVER RATIO
TA$LE ( ""
FUIC- ASSETS TURNOVER RATIO G SALES E FUIC- ASSETS
&EA) "A;E" 9)s /in lakhs< Q*I?P A""ET"
9)s/ in lakhs<
)ATIO
200%!0= 28.%77/73 7.823/88 4/%0
200=!0 37.77/48 4.=3%/3% 4/>7
200! 3.%72/77 2.347/04 2/4>
20!2 7=.8=3/44 3.%0%/% 3/80
202!3 8%%7/00 >7>3/0> =/2
I.ter8ret/tio.:
The abo#e the tables shows that the acti#ity ratio satisfactory le#el/ 200!
20. 2/4> ratio two years normal le#el/ 200% !200=. 200=!200. 200 !20 .4/%0.
4/>7. 3/80.202!203 high le#el ratio. last year compares =/2company Auick
turno#er good position of the company/
CHART ( ""
FUIC- ASSETS TURNOVER RATIO
TA$LE ( "+
TOTAL ASSETS TURNOVE RATIO G SALES E TOTAL ASSETS
&EA) "A;E" 9)s/in lakhs< TOTA; A""ET" )ATIO
9)s/ in lakhs<
200%!0= 28.%77/73 =4.3>/%0 0/2%
200=!0 37.77/48 =3.=4=/37 0/38
200! 3.%72/77 07.70/=> 0/3
20!2 7=.8=3/44 34.4=%/78 0/3>
202!3 8%%7/00 =383/%= 0/38
I.ter8ret/tio.:
The abo#e table shows that acti#ity ratio of the company/ Total assets turno#er of the
ratio 200% !08 normal increasing 0/2% ratios. 200 ! increasing ratio 0/3. 200= !0 .
0/38 compared increasing in the year/ 20!2. 0/3> compare normal increase so the
company takes steps to impro#e financial position in a better way/
CHART ( "+
TOTAL ASSETS TURNOVER RATIO
TA$LE ( "*
CASH TOTAL ASSETS RATIO GCASH ; $AN- $ALNACE E TOTAL ASSETS
&EA) ?A"0 BBA-P TOTA; A""ET" )ATIO
BA;A-?E
9)s/ in lakhs<
9)s/ in lakhs<
200%!0= 824/=0 =4.3>/%0 0/0
200=!0 3440/=8 =3.=4=/37 0/07
200! 7=28/22 07.70/=> 0/04
20!2 277=/0= 34.4=%/78 0/02
202!3 727/03 =383/%= 0/02
I.ter8ret/tio.:
This ratio re#eals the absolute liAuidity position of a concern the minimum cash balance
indicated that the source of funds are mostly in fi$ed and other current assets/ All the
cash B bank balance hea#y low le#el/ "o take some necessary step impro#e our
company/
CHART ( "*
CASH TOTAL ASSETS RATIO
TA$LE ( "C
CAPITAL EARING RATIO
NET ,ORTH E FIHED INTEREST CHARGIN SECURITES
&EA) -ET 6O)T0
9)s /in lakhs<
,ISE5 I-TE)E"T
?0A)(I-( "E?*)ITIE"
9)s/in lakhs<
)ATIO
200%!0= 3087/73 %37=/23 0/03
200=!0 22>8 /08 =72>/=% 0/3
200! %3=4/44 =388>/=7 0/0=
20!2 883/%8 0848/>4 0/8
202!3 8>3=/% =383/%= 0/0>
I.ter8ret/tio.:
The ratio managerial efficiency also calculated by establishing the relationship between
cost of with the amount of capital the business 200% !200= ratio 0/03 -ormal le#el/
CHART ( "C
CAPITAL EARING RATIO
TA$LE ( "#
NET PROFIT RATIO G NET PROFIT E NET SALES 1 "00
&EA) -ET +)O,IT
9)s/in lakes<
-ET "A;E"
9)s/ in lakhs<
)ATIO
200%!0= 774>0/7> 28%77/73 /88
200=!0 44370/7= 3777/48 /82
200! 3=07/82 3%72/77 0/2
20!2 728/>7 7=8=3/44 0/%3
202!3 43=/%3 8%%7/00 0/>7
I.ter8ret/tio.:
,rom the abo#e table shows that net profit of the company the ratio has been fluctuating
during the study the highest ratio is /88 in the year 200%!200= the lowest ratio in 0/2
in the year 200!20/
CHART ( "#
NET PROFIT RATIO

TA$LE ( ")
GROSS PROFIT RATIO G GROSS PROFIT E SALES 1 "00
&EA) ()O"" +)O,IT -ET "A;E" )ATIO
200%!0= 3.24>/>0 28.%77/73 0/2
200=!0 4.320/2 37.7/48 0/77
200! 3.220/%> 3.%72/77 0/7
20!2 8.743/27 7=.8=3/44 0/33
202!3 %8=2/%7 2%.%7/00 0/32
I.ter8ret/tio.:
,rom the abo#e shows the gross profit of the company the highest ratio 0/77 during the
year 200= to 200 and the lowest ratio is 0/2 during the year 200% to 200=/
CHART ( ")
GORSS PROFIT RATIO
TA$LE ( "I
OPERATING RATIO GOPENING COST E NET SALES
&EA) O+E)ATI-( ?O"T -ET"A;E" )ATIO
9)s/in /lakhs< 9)s/in lakhs<
200%!0= 2%.%38/32 28.%77/73 /0>
200=!0 37.>22/4% 37.77/48 /02
200! 23.282/07 3.%72/77 0/>3
20!2 3=.284/> 7=.8=3/44 0/>=
202!3 72.0%3/>% 8%.%7/00 0/8
I.ter8ret/tio.:
,rom the abo#e table re#eals the operating ratio siscol/ The highest ratio is /0> in the
year 200%!0= the lowest ratio 0/>3 during the year 200 !20 so operating position is
satisfactory/
CHART ("I
OPERATING RATIO
TA$LE ( "!
RETURN ON SHAREHOLDER FUNDS RATIOG NET PROFIT AFTER TAH E
SHARE HOLDER FUNDS H "00
&EA) -ET +)O,IT
A,TE) TAS
9)s / in lakhs<
"0A)E 0O;5E)
,*-5
9)s/ in/lakhs<
)ATIO
200%!0= 474>0/7> 23.87>/2 2/30
200=!0 7470/7= 23.87>/2 />4
200! 3=047/82 23.87>/2 /84
20!2 728%/>7 77.44%/3> 0/=2
202!3 44087/>> 7.730/>4 3/%
I.ter8ret/tio.:
The abo#e table shows that profitability of the company/ The ratio return on
shareholdersD in#estment. popularly and shareholder relationship between net profit/
200% !200= . 200=!200. 474>0/7>. 7470/7= two year not growth of the company/ 'ery
low of third year and 20!2 ratio 0/=2 higher return of company/ 200=!200. 202!
203. compare with last year high le#el ratio/
CHART ( "!
RETURN ON SHAREHOLDER FUNS RATIO
TA$LE ( "
?OMMO- "ITE BA;A-?E "0EET A" 200=! 203 05,? ";I?/
+articulars 200=!0 200! years 20! 2years 202!3 years
years
,i$ed assets
In#estment
?urrent assets
In#entories
"undry debtors
?ash and bank
;oan and ad#ances
%>/23
U/
8/78
0/>
3/>%
/%2
>8/=%
2/>3
%/34
7/=4
7/>8
2/23
>7/23
8/8=
%/77
3/4=
2/3%
7/8>
8=/3
8/==
>/%
7/2%
7/08
%/%
Total 00/0
0
00/00 00/00 00/00
?urrent liabilities
+ro#isions
==/84
0/34
==/>>
0/23
=8/7=
3/4
=%/43
/7>
Total 00/0
0
00/00 00/00 00/00
I.ter8ret/tio.:
The percentage contribution of fi$ed assets has decreasing/ The in#estment was nil in
200=!0 then it increased in 200! and remained constant till 20!2/ The
contribution of the in#entories to the current assets has been increasing it went down in
202!3/ The contribution of sundry deports and cash bank balance to current assets is
fluctuating/ The percentage of loans and ad#ances lent has been increased/ The current
liabilities S pro#isions contribution to liabilities normal trend/
TA$LE ? "."
COMPARATIVE INCOME STATEMENT AS ON +00! (+00 TO +00 (+0"0
HDFC SLIC
+articulars 200%!200= 200=!200 Increasing2
5ecreasing
Increasing2
5ecreasing
Amound
)s/
persedtage
-et sales 28%77/73 2>34/8> 7>/27 7/>
9!<cost of goods
sold
222>>/28 4073/27 >237/02 >/23
(ross profit 74>0/7> 22>%/73 >>0/=8 >/>0
9!<operating e$p 77>>/7> >2%/%% >24/7 >/24
Operating profit =8/8= 473/44 740/44 7/40
9R<other income 4%4/73 38%/2 2>/22 2/>
EBIT 8>%/73 =/>8 233/33 2/33
9!<interest 377/>4 %47/2= 428/47 40/2
2>38/32 >82=/43 7%=3/2 4/0=
9!<depreciation %37/%7 784>/2 2%22/38 2/%2
Total 74>0/7> 22>2/7 >>8/7 >/>
I.ter8ret/tio.:
Abo#e the table showing on the sales increasing on year on 200=!200on 7>/27 .
increasing rate gross profit also increase on >>0/=8 operating profit on 740/44
increasing on 200% !200= as 7/40 F /
TA$LE ? ".*
COMPARATIVE INCOME STATEMENT AS ON +00(+0"0 TO +0"0(""
HDFC SLIC.
P/rti3<0/r +00(+0"0 +0"0( +0"" Increasing2
5ecreasing
Amound )s
Increasing2
5ecreasing
persedtage
-et sales 2>34/8> 72748/4% 470/= /4
9!< ?ost of goods
sold
4073/27 700%/78 24=84/22 2/4=
(ross profit 22>2/73 77%/2 !0%27/3 /0%
9!< Operating e$p >2%/%% 7>23/%4 !>004/03 0/>0
Operating
profit
473/44 !32>4/>3 2>32/% 2/>3
9R< Other income 38%/2 8>>/33 30=/2 0/30
EBIT =/>8 !24=%/7 8%8/87 /8%
9!< interest %47/2= 783/77 !>0>>/%4 0/>0
>82=/43 708/%7 !348>/8= 0/34
9!< 5epreciation 784>/2 ! ! !
22%8/>3 708/% !%227/%= 0/%2
9!< Ta$ ! 20/37 ! !
2/2%8/>3 70%2/% !
%207/44
0/%2
Abo#e the table showing on net sales increasing on 200!20 on 470!= crone as
/4gross profit decreasing in 200! on 0%27/22 as /0% operating profit increasing
rate on 200 ! on 402/84F gross profit decreasing on 200! on %207/44 crore on
/0% F/
TA$LE ? ".C
COMPARATIVE INCOME STATEMENT AS ON +0"0( +0"" TO +0""(+0"+
HDFC SLIC.
+articulars 200!20 20!202 Increasing2
5ecreasing
Increasing2
5ecreasing
Amound )s persedtage
-et sales 72/748/4% 7=8=3/44 >238/=> >/07
9!<cost of goods
sold
700%/78 7=832/48 %827/ 2/03
(ross profit 77%/2 80/== !3%>/3 =3/2
9!<operating e$p 7>23/%4 7>%7/=0 8/04 /2=
Operating profit !32>4/>3 7>23/= 77%/% 77/20
9R<other income 8>>/33 782/%= !27/77 3/84
EBIT !24=%/7 !728/02 882/82 83/=%
Interest 783/77 23=/=8 !223/7% 4/2>
708/%7 !4400/=% 73=/7 34/73
9!< Ta$ 20/37 80/== 70/84 ==/%4
70%2/% 448/=> 7>=/>= 38/27
Abo#e the table showing on 20! 202 net sales on increasing rate on >238/7>
crore as >/07 F gross profit decreasing rate on !3%>/7 crore as =3/2F operating
profit increasing on 20!202 on 77%/% crore as 77/20F net profit also increasing
rate on 7>=/>= as on 38/27 F on 05,? ";I?/
TA$LE ? ".#
COMPARATIVE INCOME STATEMENT AS ON +0"" (+0"+ TO +0"+ (+0"*
HDFC SLIC
+articulars 20!202 202 !203 Increasing2
5ecreasing
Amound )s
Increasing2
5ecreasing
persedtage
-et sales 7=8=3/44 8%%7/00 =7>/74 3%/43
9!<cost of goods
sold
7=832/4 83>0/8> 708=/ 2%/37
(ross profit 80/== 43=/33 40>%/37 %/32
9!<operating e$p 7>%7/=0 7%88/0= %/= /8=
Operating profit 7>23/= 2>3/27 !7740/8> =7/2
9R<other income 782/%= 30==/% 2838/2= 48=/42
EBIT !728/02 33>2/72 !%%%/8 20/%4
Interest 23=/=8 4283/>7 7023/>% 327/40
!4400/=% %=/32 !380=/88 84/8
9!< Ta$ 80/== 43=/33 40>%/37 %/32
448/=> 327%/0 !233/=8 7/80
Abo#e the table showing on 202! 203 in net sales on increasing =7>/74
crore as 3%/43F gross profit also increasing 202!203 40>%/37 crore as %/32F
operating profit decreasing rate 7740/8> crore net profit decreasing on 202!203
233/=8 crore as 7/80F/
TA$LE ? ".)
COMMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED HDFC
SLIC +00(+0"*
+articulars 200%!200= 200=!200 200!20 20!202 202!203
-et sales 00 00 00 00 00
9!<costof goods %2/=% 44/0> =8/4% ==/%> =2/43
(ross profit >/02 77/=2 3/7 0/2 >/78
9!<operating e$p 8/8= 72/=3 /28 =/82 >/08
Operating profit 0/37 /=% >/> =/40 0/3=
9R<other income 2/% /37 /4= 0/=3 7/40
EBIT 2/42 3/33 8/2 %/4> 7/%=
9!< Interest 2/>2 3/2 3/77 2/7= >/87
+B5T 0/= 2>/= =/48 /08 2/>7
9!<5epreciation 8/%3 >/0 ! ! !
Ta$ >/02 77/=2 =/48 /08 2/>7
! ! 0/07 0/2 >/78
+rofit after Ta$ >/02 77/=2 =/8 /= 7/>
Abo#e the table showing on net sales taken on 00F for all year/ (ross profit increasing
and decreasing rate net profit increasing and decreasing rate in highest rate of profit
200=!200 77/=2F decreasing rate on 7/>F /
TA$LE ? ".I
COMMON(SI:E $ALANCE SHEET AS ON *"
ST
MARCH +00! AND +00
R<8ees i. L/>4s
PARTICULARS +00! +00
Rs. J Rs. J
CAPITAL AND RESERVES

a< "hareholders funds 3007/=2 >8/3> 342%/77 %0/77
b< ;oan funds 342/07 20/82 2>38/>2 8/2%
c< 5eferred ta$ 43/>> 3/0 44/> 3/2=
TOTAL "I0*0.I* "00 ")!").!I "00
2
LIA$ILITIES
a< Bank o#erdraft 3===/= %2/20 73>3/4> %4/7%
b< creditors 28/%= 0/>7 >=/3= /0>
c< +ro#isions for ta$ ! ! ! !
TOTAL 7%7%/0> ! 448/>7 !
3
ASSETS 2%%4/8> ! 3>>=/= !
Net 3<rre.t /ssets =82/7 /42 3>8/%7 %/=
e< Miscellaneous e$penses =7/43 4/42 %%>/0> 4/2%
TOTAL "I0*0.I* "00 ")!").!I "00
Co28<te9 5ro2 t4e A..</0 re8orts o5 t4e 3o28/.6
The abo#e table indicates that during 200>!0% the shareholders fund is >8/3> percent. the
total loan and fund is 20/82 percent. the fi$ed assets and current assets are %2/20 percent
and 2%/78 percent respecti#ely/ In#estments are 0/>0 percent and current liabilities are
22/7> percent of total funds employed/
5uring 200%!0= the shareholders fund is %0/77 percent. the total loan and fund was 8/2%
percent and current liabilities are %4/7% percent and %/% percent respecti#ely/
In#estments are /0> percent and current assets are 8/8> percent of total funds employed/
TA$LE ? ".!
ST
MARCH +00 AND +0"0
R<8ees i. 0/>4s
PARTICULARS +00 +0"0
Rs. J Rs. J

a< "hareholders funds 342%/77 %0/77 303/3 8=/>2
b< ;oan funds 2>38/>2 8/2% 4038/=> 28/==
c< 5eferred ta$ 44/> 3/2= 82/34 3/2=
TOTAL ")!").!I "00 "!))+.)* "00
2
LIA$ILITIES
a< Bank o#erdraft 73>3/4> %4/7% 4304/>= %2/0
b< creditors >=/3= /0> >=/3= 0/=>
TOTAL 448/>7 ! 48=>/%7 !
3
ASSETS 3>>=/= ! 3%7/24 !
Net 3<rre.t /ssets 3>8/%7 %/= 243/4= 3/7>
e< Miscellaneous e$penses %%>/0> 4/2% 883/%8 3/48
TOTAL ")!").!I "00 "!))+.)* "00
The abo#e table indicates that during 200=!0 the shareholders fund is 8=/>2 percent.
the total loan and fund is 28/== percent and current liabilities are %2/0 percent and3/78
percent In#estments are 0/=> 7/78 percent current assets respecti#ely/
TA$LE ? ".
ST
MARCH +0"0 AND +0""
R<8ees i. 0/>4s
PARTICULARS +0"0 +0""
Rs. J Rs. J

a< "hareholders funds 303/3 8=/>2 270/3 48/8=
b< ;oan funds 4038/=> 28/== =73/2= 73/02
c< 5eferred ta$ 82/34 3/2= 82/% 0/2=
TOTAL "!))+.)* "00 +"!II.+* "00
2
LIA$ILITIES
a< Bank o#erdraft 4304/>= %2/0 8%08/%2 >8/%2
b< creditors >=/3= 0/=> >=/3= 0/%
TOTAL 48=>/%7 ! 88/= !
3
ASSETS 3%7/24 ! =%0/3 !
Net 3<rre.t /ssets 243/4= 3/7> 7%/08 =/
e< Miscellaneous e$penses 883/%8 3/48 >0=/=8 3/27
TOTAL "!))+.)* "00 +"!II.+* "00
The abo#e table indicates that during 200! the shareholders fund is 48/8= percent.
the total loan and fund is 73/02 percent. the fi$ed assets and current assets are >8/%2
percent and =/ percent respecti#ely/ are 0/% percent and current liabilities are 8/3
percent of total creditors funds employed/
TA$LE ( +0
ST
MARCH +0"" AND +0"+
R<8ees i. 0/>4s
PARTICULARS +0"" +0"+
Rs. J Rs. J

a< "hareholders funds 303/3 48/8= 2>7/4 4>/>2
b< ;oan funds 4038/=> 73/02 %=7/88 72/2%
c< 5eferred ta$ 82/34 0/2= ! !
TOTAL "!))+.)* "00 +"0!."I "00
2
LIA$ILITIES
a< Bank o#erdraft 4304/>= >8/%2 8=43/7 %0/3=
b< creditors >=/3= 0/% >>/44 0/%7
c< +ro#isions for ta$ ! ! 34=/7> />0
TOTAL 48=>/%7 ! 7840/>7 !
3
ASSETS 3%7/24 ! 20%2/84 !
Net 3<rre.t /ssets 243/4= =/ 248%/0= 2/%
e< Miscellaneous e$penses 883/%8 3/27 030/88 7/%=
TOTAL "!))+.)* "00 +"0!."I "00
The abo#e table indicates that during 20!2 the shareholders fund is 4>/>2 percent. the
total loan and fund is 72/2% percent. the fi$ed and current liabilities are %0/3= percent
and 2/% percent respecti#ely/ creditors are 0/%7 percent and current assets are %/==
percent of total funds employed/
TA$LE ? +0."
ST
MARCH +0"+ AND +0"*
R<8ees i. 0/>4s
PARTICULARS +0"+ +0"*
Rs. J Rs. J

a< "hareholders funds 2>7/4 4>/>2 2274/37 48/2=
b< ;oan funds %=7/88 72/2% =4/3 73/>
c< 5eferred ta$ ! ! ! !
TOTAL +"0!."I "00 +"I#).)C "00
2
LIA$ILITIES
a< Bank o#erdraft 8=43/7 %0/3= >782/03 37/2=
b< creditors >>/44 0/%7 >>/44 0/%
c< +ro#isions for ta$ 34=/7> />0 4%%/0= 2/>0
TOTAL 7840/>7 ! 483=/87 !
3
ASSETS 20%2/84 ! 20/8> !
Net 3<rre.t /ssets 248%/0= 2/% 342%/=> 82/=
e< Miscellaneous e$penses 030/88 7/%= ! !
TOTAL +"0!."I "00 +"I#).)C "00
The abo#e table indicates that during 202!3 the shareholders fund is 48/2= percent. the
total loan and fund is 73/> percent and current liabilities are 37/30 percent and 82/=
percent respecti#ely/ In#estments are 0/% percent and current /ssets /32 percent of
total creditors/
CHAPTER IV
FINDINGS AND SUGGESSIONS
C.". FINDINGS
The debtor turno#er ratio is fluctuating/
The fi$ed assets to net work ratio decreased from 38=F to 82F/
The debt eAuity ratio has decreased from 3/42 to 0/>3 it is a good indicate from
sol#ency of the company/
Only in the year 200= !200 the current ratio of the company was /% which /%
closed to the standard and ratio 2/>/
The liAuidity ratio was increasing from 0/7= to / from 200= !200 to 200
!20 to 20 !202 and declined to 0/%0 in 200= !200/
The gross profit ratio decreased from 77/%>F to 2/82F from 200= : 200 to
202 !203/
-et profit was negati#e during the year 200% : 200= as the company suffered loss
then it suddenly become the positi#e and declined 2/28 to >/7>/
The preparatory ratio from is to fluctuated/
The Auick assets turno#er ratio has been increasing to =/2 times from 200=
!200 to 202 !203/
The fi$ed assets turno#er ratio has been increasing from 0/3 to 0/=4 from 200% :
200= to 202 : 203/
C.+.SUGGESTION
The gross profit of the company can be increased by reducing operating
e$penses/
The growth rate in the net profit must be increased by reducing the non :
operating e$penses/
As the liAuidity ratio declined in 202 : 203 the liAuidity assets of the
company is to be increased to impro#e the liAuidity position/
The current le#el of dept eAuity ratio shall be maintained in the future/
"teps must be taken the current ratio of the company to the standard
norms
C.*CONCLUSION
The present studies aim to now the financial performance of the company using ratio
analysis/ The research used secondary data were collected from the company annual
reports/ )atio analysis was processed from the year 202 !203 using the data/ The
research analysed the data by the method of the ratio analysis the pro#ide that the
company position was good/
Therefore the company try to retain the position and also to impro#e it is financial
position further/ The result show that in#entory to current affect le#el and in#entory
turno#er ratio is good/
The firm must take steps to the cash in hand by the #alue of cash in hand at maintained
and the a#oid fluctuation/ Also the management is ad#ised to the increasing the turno#er
ratio to maintaining the financial trend of the company/
.
CHAPTER V
$I$ILIOGRAPHY
T/"/)eddy B &/0ari +rasad )eddy V Management Accounting. Margham
+ublications +ri#ate ;td/. %
th
Edition 200>/
I/M/+A-5E& V ,inancial Management. 'ikas +ublishing 0ouse +ri#ate
;td/. =
th
Edition. 2003/
0an B Jain V Basic ,inancial Management B +ractice. Tata Megraw 0ill
+ublishing ?ompany ;td. 4
th
Edition 200
,E$SITES:
WWW. 05,? ";I?/com
666/finacial performance/inc/in
666/google/co/in

Govind Project

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Govind Project

Uploaded by

Copyright:

Available Formats

A STUDY ON FINANCIAL PERFORAMANCE

OF HDFC STANDARD LIFE INSURANCE CO.LTD

CAPITAL AND RESERVES

CAPITAL AND RESERVES

CAPITAL AND RESERVES

CAPITAL AND RESERVES

CAPITAL AND RESERVES

You might also like