ASMIT

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INTRODUCTION
Introduction of the Study:
Finance is defined as the provision of money when
it is required. Every enterprise needs to start and carry out its operation. Finance
is the lifeblood of an organization. Therefore, should be managed effectively.
Financial Statements are prepared primarily for decision
making. Financial statement Analysis refers to the process of determining
strength and weakness of the firm by properly establishing strategic relationship
between the items of the balance sheet and profit and loss account. There are
various methods and techniques used in analysing financial statements such as
comparative statements, trend analysis, common size statement schedule of
changes in working capital, funds flow and cash flow analysis, cost volume
profit analysis and ratio analysis and other operative data. The Analysis of
Financial Statement is .used for decision making for various parties.
Financial statements have two major uses in financial
analysis. First, they are used to present a historical recover of the firms
financial development. Second, they are used for a course of action for the firm.
A performance financial statement is prepared for a future
period. It is the financial managers estimate of the firms future performance.
The operation and performance of a business depends on many individuals are
collective decisions that are continually made by its management team. Every
one of these decisions ultimately causes a financial impact, for better or works
on the condition and the periodic results of the business. In essence, the process
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of managing involves a series of economic choices that activates moments of
financial resources connected with the business.
Some of the decisions made by management one will be
the major, such as investment in a new facility, raising large amounts of debts or
adding a new line of products or services. Most other decisions are part of the
day to day process in which every functional area of the business is managed.
The combine of effect of all decisions can be observed periodically when the
performance of the business is judged through various financial statements and
special analysis.
These changes have profoundly affected all our
lives and it is important for corporate managers, shareholders, tenders,
customers and suppliers to investment and the performance of the corporations
on which then relay. All who depend on a corporation for products, services, or
a job must be med about their companys ability to meet their demands time and
in this changing world. The growth and development of the corporate
enterprises is reflected in their financial statement.
The analysis of financial statement is used for decision making
by various parties.
First task is to analyze and select the information which is requiring
taking decision.
Second task is to arrange the information in a way to highlight
significant relationship.
Final task is the interpretation and drawing of inferences and
conclusions.
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SCOPE OF THE STUDY

This is study of financial statement analysis with particular reference to exide
life insurance, a large public sector company. Being a capital intensive
providing insurance policy concern, this particular company is selected for this
project study.
A two year period is covered in the study, which extends from financial year.
The study was restricted to different components of financial statement analysis
like trend analysis, comparative statement, ratio analysis, working capital
management.

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OBJECTIVE OF THE STUDY

Objectives of the Study:
The primary objective of Financial Statement Analysis is to understand and
diagnose the information contained in the financial statement with the view to
judge the profitability financial soundness of the firm and to make forecast
about future prospects of the firm. The purpose of analysis depends upon the
person interested in such analysis and his objective. However, the following
purpose or objective of the financial statement may be stated to bring out
significance of such analysis:
1.
2.
3.
4.

To access the earning capacity or profitability of the firm.

To access the operational efficiency and managerial effectiveness.
To access the short term as well as long term solvency of the firm.
To identify the reasons for change in profitability and financial
position of the firm.

5. To make inter firm comparison.

6. To make forecast about future prospects of a firm.
7. To assess the progress of a firm over a period of time.
8. To help in decision making and control.

RESEARCH METHODOLOGY

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Research Methodology:
The research involved extensive and intensive studies of
Exide life insurance, Bhubaneswar. In this project report a sincere effort has
been made to study the financial statements analysis of the sector. During this
study, I study the financial position and performance of the sector. At last, I
have given interpretation and conclusion of the study.

Purpose of the Study:

There are some questions, which arise from the study of
financial statements. These could be Is Companys profitability adequate? Why is
a profit low in spite of increased sales? Why is there liquidity problem though
profitability is good? Why no reasons for changes in assets, liabilities and equity
between two dates? Why no dividends are paid though there are good profits?
From where have come cash flows and how they are applied? These and many
other questions need answers, which can be possible when the financial statements
are suitably analyzed.
Thus financial statement analysis deals with meaningful
interpretation of financial data available in financial statements to serve specific
purpose of organizations of such data for their decision making .this involves
identifying the purpose and selecting suitable means of analysis. Financial
statement analysis is essentially purposive.

Research objective of the study:

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Followings are the main objectives of the project:
(i)

To analyses the financial position of the EXIDE LIFE INSURANCE.

(ii)

To compare the market position of the EXIDE LIFE INSURANCE

with its competitors.

(iii)

To find out the consolidated position of the EXIDE LIFE

INSURANCE.

(iv)

To find out the future prospective of the company.

The role objective of the project is to help the management of

the organization in decision making regarding the subject matter. Calculation of

Financial statement and ration is only the clerical task whereas the interpretation
of its needs immense skill intelligence and foresightedness.
One of the easiest and most popular way of evaluating
performance of the organization is to compare its present ratio with the past ones
called comparison and through development action plan.
It gives an indication of the direction of change and reflects
whether the organizations financial position and predominance has improved
deteriorated or remained constant over the period of time.

Research Design:
Research is a careful inquiry or examination to discover new
information or relationship and to expand and verify existing knowledge.
Therefore, we used descriptive research in this study because it will ensure the
minimization of bias and maximization of reliability of data collected.

Data collection:
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The whole of my study is based on secondary data of EXIDE

LIFE INSURANCE I have not taken any primary data for my study because
primary data would not have been helpful to my study. During the tenure of my
study I have taken help of the following secondary data.

Annual report of EXIDE LIFE INSURANCE.

Balance sheet of EXIDE LIFE INSURANCE.
Development action plan of EXIDE LIFE INSURANCE.

Profit and Loss account of EXIDE LIFE INSURANCE.

SAMPLING DESIGN:
Population:
One Company from the insurance industry, i.e. EXIDE LIFE INSURANCE.

Sample Size:
2 years financial data of EXIDE LIFE INSURANCE.

Sampling Method:
Convenience Sampling Convenience under non probability sampling is applied
in this project. Convenience sampling is a non-probability sampling technique
where subjects are selected because of their convenient accessibility and
proximity to the researcher.

Methods of Data Collection:

Instruments for data collection:
Basically secondary data was collected in this research.
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Information from the company records, financial documents and balance
sheets
Data collection through internet

Drafting of questionnaire:
The project is based on the secondary data, there is no such questionnaire has
been taken made for this project.

LIMITATIONS:
The study provides an insight into the financial matters every study will
be bound with certain boundaries and this study limited up to financial
matters.
One of the factors of the study was lack of availability of ample
information. Most of the information has been kept confidential and as
such as not assed as art of policy of company.

Time is an important limitation. The whole study was conducted in a

period of 45 days, which is not sufficient to carry out proper
interpretation and analysis.

This study is related to the financial position of the company for the three
financial years only.

TOOLS & TECHNIQUES USED FOR THE STUDY:

There are some of the tools, which are relevant for the study of ratio analysis
and performance of EXIDE LIFE INSURANCE are
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Comparative statements;
Trend Analysis;
Common-size statements;
Funds flow Analysis;
Cash flow Analysis;
Cost volume profit Analysis;
Ratio analysis.

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LIMITATION OF THE STUDY

Limitations of the Study:
It is only based on mathematical interpretation of the figures and
ignores the factors such as management style, motivation of workers,
leadership etc.
It is affected by the price level changes.
It does not give any clue for future.

COMPANY PROFILE

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Exide Life Insurance Company Limited (formerly ING Vysya Life Insurance
Company Limited)

commenced

operations

in

2001-02

and

is

head

quartered in Bengaluru. The company is profitable and serves over 10 lakh

customers across India and manages over INR 8800 crores in assets. The
company is 100% crowned by Exide Industries Limited and is proud to be part
of a 100 year old brand heritage in India.
Exide Life Insurance distributes its products through multi-channels viz.
Agency, Bank assurance, Alliances and Direct Channels. The Agency channel
comprises of over 35,000 advisors who are attached to over 200 company
offices and customer care centers across the country. The Banc assurance and
Alliances business includes distribution relationships with banks, Corporate
Agents, Brokers & Referral Partners.
Exide Life Insurance, one of the leading life insurance companies in South
India, is now growing its franchise in other parts of the country. The company is
focused on providing long term protection and savings solutions and has a
strong traditional product portfolio with a consistent bonus track record.
Exide Life Insurance has the ISO 9001:2008 quality certification for all
Customer Service processes.

GRIEVANCE REDRESSAL POLICY

Exide LIFE INSURANCE COMPANY LTd

Objective:
Exide Life Insurance Company Limited (Exide Life) is committed to set the
highest standards in helping our customers manage their financial future. We are
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also committed to look into and resolve grievances if our prospective or existing
customers have any issues regarding our products and / or services before,
during and / or after the term of their relationship with us. We shall endeavor to
resolve the complaints in a speedy and fair manner.

Complaints Handling Standard Operating Procedures:

This policy prescribes the minimum objectives and standards in relation to
handling Customer grievances. The detailed procedures and guidelines arising
out of this policy would form part of the Complaints Handling standard
operating procedures.

Complaint Management & Redressal Cell:

All complaints received at Exide Life shall be tracked and monitored by the
Complaints Management & Redressal Cell. Complaints Cell shall coordinate to
resolve the complaints within the time frames as mentioned in this policy. Indepth analysis of the complaints received shall be done to identify the root
cause of the complaints and identify issues pertaining to the products, processes
and systems. Trend analysis of the complaints shall be done and inputs provided
to various departments for corrective and preventive actions.

Definition of a Grievance/Complaint:
A Grievance/Complaint is defined as any communication that expresses
dissatisfaction about an action or lack of action, about the standard of
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service/deficiency of service of an insurance company and/or any intermediary
or asks for remedial action.

Grievance Officer/s:
The Chief Operating Officer (COO) of Exide Life shall be the Chief Grievance
Officer and shall be supported by the Principal Compliance Officer of the
organization. The Branch Managers or Location Head shall be the Grievance
Officers for their respective offices.

Categorization of Complaints:
Exide Life shall adopt the classifications prescribed by the Insurance
Regulatory Development Authority (IRDA) from time to time. The detailed
classifications of complaints and the Turnaround times (TATs) shall form part
of Exide Lifes Complaints handling Standard Operating Procedures (SOP) and
shall be revised from time to time as per IRDA directions.

Grievance Redressal Process at Exide Life Insurance:

Registration:
Customers can seek Redressal of their complaints by registering the same
through any of the below mentioned channels. ING Exide Life Call Centre at 1
800 419 8228 (Toll Free) or at +91-9880888228 ING Exide Life Complaints
Cell at complaintscell@inglife.co.in
www.inglife.co.in

ING a complaint through our website

ING a complaint at any of Exide Life branches to the

designated Grievance Officer ING to the Complaints Officer at the below

mentioned address:

Complaints Management and Redressal Cell National

Operations Office, Exide Life Insurance Company Limited Gold Hill Square,
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690, Hosur Main Road, Bangalore 560068

Through other judicial or quasi-

judicial offices such as IRDA, Ombudsman, consumer forums or legal notices.

Acknowledgement:
A unique Complaint ID Number shall be generated upon
registration of the Complaint and intimated to the customer along with the
acknowledgement of the complaint, which shall be sent to the communication
address of the complainant as updated in our records within 3 working days of
receipt of the complaint. The Acknowledgement shall contain the name and
contact details of the Officer from the Complaint Management & Redressal
Team assigned to handle the complaint. In case the complaint is resolved within
3 working days, the resolution details shall also be sent along with the
acknowledgement letter.

Intimation of Grievance Redressal Process:

The Grievance Redressal procedure / process shall be made available on
the company website, intranet (for the reference of employees) and also as part
of the Complaint Acknowledgement.

Resolution of Complaint:
We shall endeavor to resolve all complaints within 2 weeks from the date
of receipt of the complaint. Resolution of the complaint shall be communicated
to the customer through E-mail or through a written letter. The resolution
provided shall be in line with the terms and conditions of the policy.

Closure of Complaint:
A complaint shall be treated as closed, when:
The Company accedes to the request of the complainant fully.
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Where the complainant indicates in writing, acceptance of the
response of the company.
Where the complainant does not respond to the company
within 8 weeks of the companys written response
Where the Grievance Redressal Officer has certified that the
company has discharged its contractual, statutory & regulatory
obligations and therefore closed the complaint.

Complaints Management System:

Exide Life shall implement automated complaint management
systems which shall integrate with the IRDA systems which enable online
registration of complaints, tracking and periodic reporting to authorities. Exide
Life shall also implement systems to receive and deal with calls from prospects
and policy holders including voice / e-mail.

Policy Holder Protection Committee:

Exide Life shall have a Policy Holder Protection Committee for
protection of Policyholder interests by the adoption of sound and healthy market
conduct practices by Exide Life and to enable IRDA to assess the governance
and market conduct issues with respect to Exide Life. The Committee shall
overlook into the implementation of various customer service guidelines as
mandated by various regulatory authorities and also carry out analysis and
monitoring activities.

BOARD OF DIRECTORS AND MANAGEMENT TEAM

Kshitij Jain

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Managing Director & Chief Executive Officer
Kshitij Jain is the Managing Director & CEO at Exide Life Insurance Company Limited (Formerly
ING Vysya Life Insurance Company Limited). He joined the Company as a founding team
member in Dec '2000 and was initially responsible for leading sales and distribution. He was
promoted as the MD & CEO of the Company in June 2006 and has been responsible for the
many firsts that Exide Life Insurance has brought to the Indian Life Insurance Market. Under
his leadership, Exide Life Insurance has become an established and profitable company serving over 10 lakh
customers in over 200 cities in India.

Rahul Agarwal
Chief Distribution Officer
Rahul joined Exide Life Insurance in March 2001 as the Regional Head based in Delhi and was responsible for
setting up and running the Sales Organization in North and East parts of the country. In 2004, he moved to the
Head Office as part of the Operations Team, which he led in his previous assignment. Rahul took over as the
Chief Distribution Officer for Exide Life Insurance in 2009.

Ashwin B
Chief Operating Officer
Ashwin B joined Exide Life Insurance in August 2008 as the Chief Operating Officer. He is
responsible for managing the entire Operations and Customer Services, IT and Corporate
Services functions at Exide Life Insurance.

Rangarajan BN
Appointed Actuary & Chief Risk Officer
Rangarajan is a Chief Risk Officer and Appointed Actuary of Exide Life Insurance. He is a
Fellow Member of Institute of Actuaries of India and also possesses a Master's degree in
Statistics from the University of

Mysore.

AWARDS AND ACHEIVEMENTS

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Development HR Showcase 2015

Year - 2015

Exide Life Insurance was declared the winner at the most coveted HR Showcase at the
4th National Human Resources Development organized by the NHRD Bangalore Chapter
for our Employee Value Proposition Space to Perform, Opportunity to Grow.
We take great pride to share that we have won this prestigious award for the second
consecutive year!
Our practice in line with the Employer Value Proposition was showcased amongst over
100 HR practices of other companies. The finalists were evaluated basis the business
impact

of

HR

practices,

quality

of

conceptual

framework,

creativity,

rigor

of

implementation, and quality of application and presentation

Winner of the National Human Resource Development HR Showcase

2015
Year - 2015

Exide Life Insurance was declared the winner at the most coveted HR Showcase at the
4th National Human Resources Development organized by the NHRD Bangalore Chapter
for our Employee Value Proposition Space to Perform, Opportunity to Grow. We take
great pride to share that we have won this prestigious award for the second consecutive
year!
Our practice in line with the Employer Value Proposition was showcased amongst over
100 HR practices of other companies. The finalists were evaluated basis the business
impact

of

HR

practices,

quality

of

conceptual

framework,

implementation, and quality of application and presentation.

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creativity,

rigor

of

ASMIT
Winner of DMA Asia Echo Awards 2015
Year - 2015

Our Pension Pass Book Program, a response based program has helped our Retirement
Policy holders strengthen their retirement funds by way of regular top-ups. Executed in
10 Indian languages, the program has resulted in overwhelming response from our
customers over the last two years. We are proud to share
for

this

program

at

DMA

Asia

ECHO

that we have won a Bronze

Awards

(Insurance

Effectiveness Category) and are the only Indian life insurance company to receive an
award on this prestigious Pan Asian platform in 2015.

Top 10 Most Trusted Life Insurance brands in India by ETBrand Equity 2014
Year - 2014

Exide Life Insurance is ranked amongst the Top 10 Most Trusted Life Insurance brands in
India according to the recent survey by Economic Times - Brand Equity and Nielsen. The
Most Trusted Brands Survey is one of the most coveted surveys and largest surveys with
a design sample of 7200 respondents distributed across socio-economic classifications,
age, income and geography. The ranking in this survey reflects the trust and patronage
that the brand enjoys amongst its audience.

Winner of the National Human Resource Development HR Showcase

2014

Year - 2014

Exide Life Insurance was declared the winner at 3rd NRHD (National Human Resources
Development) Showcase organized by the NHRD Bangalore Chapter for STRETCH an
initiative aimed at transformation within the organization
STRETCH was showcased among 50+ participating companies who submitted over 100
HR practices. The finalists were evaluated on the basis of business impact of the HR

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practice, quality of conceptual framework, creativity, rigor of implementation and quality
of application and presentation.

Exide Life Insurance bags LOMAs Excellence in Education Award

2014

Year 2014

In recognition of outstanding performance and commitment to professional development

through LOMAs education programs, Exide Life Insurance has received the Excellence in
Education award

Telerik Sitefinity 2013 Website of the Year

Exide Life Insurance Website Wins Telerik Sitefinity 2013 Website of the
Year Award for Best

Website in Financial Category.

Year - 2013

Winner at Direct Marketing Award

Category - "Synergy - For a need based cross sell campaign targeting existing customers
using our flagship offering ING Star Life."
Year 2013

Winner at the coveted 6th Loyalty Awards

Category - "Financials - Non Banking Financial Services Sector
Year - 2013"

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Gold Winner at RMAI Corporate Awards

Category - Best use of Direct marketing in Door to Door and One on One' for its
campaign 'Say No To Plastic' from RMAI
Year - 2013

ING Life Insurance recertified to ISO 9001:2008

Year - 2012

ING Life Insurance Customer Services has been recertified to ISO 9001:2008 by India's
premier certification body, Bureau VERITAS Certification (India) Pvt. Ltd. The certification
is accredited by United Kingdom Accreditation Service (UKAS) for a period of three years,
and covers the entire Field Operations and Centralized processing ranging from Policy
acceptance and Issuance, Customer Services, Contact Centre, Maturity and Claims
Processing.
ING Life Insurance embarked on the quality journey way back in 2007 and was the
second life insurance company in India to be certified on ISO 9001:2008, which is a
reinforcement of ING Life's continuous endeavor towards providing best in class services
to its policy holders.

Winner at the DMAI SYNERGY AWARDS

About ISO 9001:2008:

ISO 9001:2008 is an internationally recognized standard for Quality Management

Systems (QMS), which sets checks and processes for businesses to ensure that the needs
and expectations of customers are met. It also certifies the company's products and
services as the best in the world.

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Bureau Veritas Certification has been certifying businesses in India since 1990 and has an
industry experience of specific processes and requirements of each. As a trusted partner,
Bureau Veritas offers innovative solutions that go beyond simple compliance with
regulations and standards, reducing risk, improving performance and promoting
sustainable development. Bureau VERITAS is recognized and accredited by major
national and international organizations

VISION:

Providing credible value addition to customers, employees

and shareholders, while simultaneously being recognized by society as a
responsible corporate citizen. In addition, achieving operational excellence
while addressing and taking steps towards environmental protection.

MISSION:
Strive to carefully balance the interest of all stakeholders; to
fulfill aspiration of the employees and to passionately pursue excellence without
deviating from our core values.

CORE VALUES:
Fundamental axioms that the organisation believes in and
which the people respect and work towards.
Customer Orientation
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Personal Integrity & Commitment

Teamwork and Mutual Support
Employee Development and Involvement
Striving for Excellence
Management by Processes and Facts
Responsible Corporate Citizenship

PROGRESS THROUGH PEOPLE POTENTIAL:

We are building a culture that celebrates and rewards

superlative performance. We empower our people through motivation and
training to ensure success of our business strategies and create a robust talent
pool for the future.

ENSURING SAFETY AT WORKPLACE:

We are sensitive to the health and safety of our people.
Therefore, our constant focus is to enhance the level of automation in our
operations and reduce manual intervention. No serious accidents were reported
last year in our plants, thanks to our emphasis on continuous training and
maintenance of our plants.
Since our product contains lead, we conduct thorough vigilance on the threshold
limit on lead exposure. We conduct health check-ups on an ongoing basis
because our people come first for us.

TRAINING AND DEVELOPMENT:

At Exide, we believe in nurturing talent and building leaders,
driven by the leaders build leaders philosophy. This mindset ensures that
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leadership gets ingrained in all people across the Company, rather than placing
it as the responsibility of a department or a few individuals.

3 focus areas last year

Enhancing skills in sales and service cluster
Training at XLRI on building awareness on cost optimization
Emphasized on leadership development at all levels to nurture our
talent and make them responsible

EMPLOYEE ENGAGEMENT:
At Exide, employee is the most valuable resource of our
organisation. With our vast spread of network and employee presence in over
206 locations across India, it is an immense challenge to connect and
communicate to all employees.
To ensure a continual connect and as part of employee engagement activities at
Exide, we have various forums for creating a sense of belonging to our
organisation. It is also an opportunity, to meet and interact with employees from
diverse backgrounds and culture. We have undertaken a host of programmes,
which thrive on transparency and a culture of engaging with the people.

Tea-Time with HR:

This is an annual event where personnel from corporate
HR meet employees across the Company at their locations with a prime purpose
of establishing a connect with employees across the organisation. This also
becomes a forum for the employees to share their issues / queries directly with
the HR. The forum is also used to communicate the Companys objectives, apart
from enabling the HR to understand the business needs. It also provides an
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opportunity for HR to understand employee service related issues and generic
people issues. This enables the corporate HR to review/clarify the people
policies of the Company.

HR Sampark:
While Tea-Time with HR is an annual event, HR Sampark is
a service for employees to get their queries addressed in real-time basis.
Through this service, employees contact the corporate HR though phone/e-mail
and obtain clarity on policies, procedures.

HR Connect:
This is our intranet site which has a plethora of information
about the Company, its policies, vision, among others for ease of employees.
There are also FAQs on policies/practices.

HR by YOU:
This is a forum for employees to suggest the HR policies
that they would like to see in our organisation. HR by You is a concept where
employees have experienced/heard an HR practice which they would like Exide
to emulate. These are suggested by the employees to the Corporate HR, which
in turn evaluates the idea for its implementation.

Birthday Cards:
A small but a significant way in which we connect with our
employees and their families on their birthdays. These customized birthday
cards are exclusively designed by the children of our employees through a
competition.

BUSINESS REVIEW:
Automotive:
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Automotive segment primarily includes sale to major vehicle
manufacturers and aftermarket sales. We primarily sell automotive batteries in
the domestic market under brand names like Exide, SF and Sonic, among many
others. We concentrate on Dynex, Index and Sonic brands for the export
segment. Our Company has a significant market share of automotive OEM and
organised retail. We also manufacture submarine batteries.

OUTLOOK
We have clear cut goals and our competition is growing day by day in terms of
organised sector. The unorganised sector is steadily losing market share. Our
strategies are to ensure that we enhance our market share. Our strategies revolve
around products, pricing, placement and promotion.

Industrial:
Our industrial segment includes sales to power backup
equipment (UPS and inverters), traction equipment (forklifts, golf carts, and
electric vehicles), infrastructure sector (railway, telecom, solar, power
generation and utilities) and exports (traction and standby). We market our
industrial batteries to the domestic market, under Exide, SF and CEIL brands.
Internationally, our major brands are CEIL, Chloride and Index.

OUTLOOK
Going forward, we will reinforce our position, with substantial gain in market
share. The new government with proactive initiatives like Make in India, Smart
Cities and Swachh Bharat Abhiyan, among others will drive the industrial
momentum. This positive drive will create significant demand for batteries.

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Submarine:
At Exide, we manufacture high-end submarine batteries
conforming to the most stringent technical specifications and quality control
standards. We are the countrys only company to maintain a dedicated
manpower to manufacture such specialised batteries.
We are one of the few battery manufacturers who are capable of manufacturing
submarine batteries for a wide range of submarine designs, such as Russian
(Foxtrot/ Romeo/ Kilo/ 636/ Amur class), German (209 class), French
(Scorpene class) and Indigenous (Nuclear powered) design submarines.
Currently, we are manufacturing two sets to export to Algeria and two are in the
pipeline to export to Russia (Admiralty shipyard). Our batteries for Russian
submarines are certified by Russian design agency Rubin, as compliant to
norms. Our manufacturing facility has ISO 9001:2008, ISO 14001:2004 and
OHSAS 18001:2007 certifications.

COMMUNITY INITIATIVES:
We believe any business enterprise has to take the
community along, in its journey forward. Our business agenda can be truly
successful if our initiatives benefit the community. We are deeply committed to
contribute towards social wellbeing, through our consistent efforts.

Child In Need Institute (CINI):

We partnered with Child In Need Institute (formerly CINIAsha), a reputed NGO to improve lives of the urban marginalised population,
through education, health and social mobilisation. We are working with CINI
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for the last seven years to run a project called Lighting up Young Lives
Improving Child Health Outcomes through Community Participation.
This projects primary objective is to ensure proper growth and development of
slum children up to six years of age through various need-based initiatives.
A trained adolescent girl is responsible to impart stimulation to 12 children
within her community. This ensures their proper physical, cognitive, language
and socio-emotional development. Adolescents engaged with this programme
were not only empowered with life skills training, but the incentive provided to
them helped them complete their higher education.

Community Development:
Our factories are located in relatively remote areas,
where the available social infrastructure for the locals is inadequate. We are
viewed by the local community as a major stakeholder in their day-to-day lives.
Communities in the immediate vicinity of our factories form our very important
stakeholder group. Thus, we try to discharge our duties as a responsible
corporate citizen in a committed manner.
Our factory level CSR activities are therefore
geographically restricted to the immediate vicinity of the factory. The activities
differ from factory to factory, depending on the local communitys
requirements.
However, our CSR activities are divided into three
categories health of the community, educational needs of the community and
environmental protection of the community.
In the area of health related activities, we typically run
health camps in local villages from time-to-time. In case of any natural calamity
in any nearby area we are always one of the first to reach the local community
with help.
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The medical facilities available in the factories are
principally for the factory personnel. However, locals are also given health
advice from here. Some factories even run mobile health clinics in the nearby
villages.
We often support local village schools in the form of
providing educational infrastructure, such as building classrooms or providing
basic furniture for school children. These activities are undertaken after a
thorough discussion with school authorities and village elders. Once the need of
the community is understood, we extend our resources to help them.
Environmental protection of the vicinity around our
factories is seen as a principal responsibility of the local factory management.
Regular afforestation projects are also undertaken in villages around our
factories. Such initiatives are carried out in collaboration with the government
and local people.

LITERATURE REVIEW
Introduction of Financial Statement:
Finance is defined as the provision of money when it is
required. Every enterprise needs finance to start and carry out its operation.
Finance is the lifeblood of an organization. So, finance should be managed
effectively.
Financial statements are prepared primarily for decision
making. Financial Statement Analysis refers to the process of determining
financial strength and weakness of the firm by properly establishing strategic
relationship between the items of the balance sheet and profit and loss account.
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There are various methods and techniques used in analyzing financial
statements, such as comparative statements, trend analysis, common size
statements, schedule of changes in working capital, funds flow and cash flow
analysis, cost volume profit analysis and ratio analysis and other operative data.
The analysis of financial statement is used for decision making by various
parties.

MEANING AND CONCEPT OF FINANCIAL ANALYSIS:

The term financial analysis , 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
opposite data.Analysing financial statements, according to Metcalf and Titard,
is a process of evaluating the relationship between component parts of a
financial statements to obtain a better understanding of a firms position and
performance. In the words of Myers, Financial statement analysis is largely a
study of relationship among the various financial factors in a business as
disclosed by a single set-of statement, and a study of the trend of these factors
as shown in a series of statements.
The purpose of financial analysis is to diagnose the
information contained in financial statements so as to judge the profitability and
financial soundness of the firm. Just like a doctor examines his patient by
recording his body temperature, blood pressure, etc. before making his
conclusion regarding the illness and before giving his treatment, a financial
analyst analysis the financial statements with various tools of analysis before
commenting upon the financial health or weaknesses of an enterprise. The
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analysis and interpretation of financial statements is essential to bring out the
mystery behind the figures in financial statements. Financial statements analysis
is an attempt to determine the significance and meaning of the financial
statement data so that forecast may be made of the future earnings, ability to
pay interest and debt maturities (both current and long-term) and profitability of
a sound dividend policy.
The term financial statement analysis includes both
analysis, and interpretation. A distinction should, therefore, be made between
the two terms. While the term analysis is used to mean the simplification of
financial data by methodical classification of the data given in the financial
statements, interpretation means, explaining the meaning and significance of
the data so simplified. However, both analysis and interpretation are
interlinked and complimentary to each other Analysis is useless without
interpretation and interpretation without analysis is difficult or even impossible.
Most of the authors have used the term analysis only to cover the meaning
both analysis and interpretation as the objective of analysis is to study the
relationship between various items of financial statements by interpretation. We
have also used the terms Financial statement Analysis or simply Financial
Analysis to cover the meaning of both analysis and interpretation.

Objective and Importance of Financial Statements Analysis:

The primary objective of financial statements analysis
is to understand and diagnose the information contained in financial statement
with a view to judge the profitability financial soundness of the firm, and to
make forecast about future prospects of the firm. The purpose of analysis
depends upon the person Interested in such analysis and his object. However,
the following purposes or objectives of financial statements analysis may be
stated to bring out significance of such analysis:
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1. To assess the earning capacity or profitability of the firm.

2.

To assess the operational efficiency and managerial

effectiveness.
3. To assess the short term as well as long term solvency of
the firm.
4. To identify the reasons for change in profitability and
financial position of the firm.
5. To make inter-firm comparisons.
6. To make forecasts about future prospects of the firm.
7. To assess the progress of the firm over a period of time.
8. To help in decision making and control.
9. To guide or determine the dividend action.
10.

To provide important information for granting credit.

Types of Financial Analysis:

We can classify various types of financial analysis into different categories
depending upon:
1. On the basis of material used.
2. On the basis of modus operandi.

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3. On the basis of entities used.
4. On the basis of time horizon.

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On the basis of Material Used:

According to material used, financial analysis can be two types
EXTERNAL ANALYSIS
INTERNAL ANALYSIS

EXTERNAL ANALYSIS:
This analysis is done by outsiders who do not
have access to the detailed internal accounting records of the business firm.
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These outsiders include investors, potential investors, creditors, potential
creditors, credit agencies, government agencies and general public. For
financial analysis, thus serves only a limited purpose. However, the recent
changes in the government regulations requiring business firms to make
available more detailed information to the public through audited published
accounts have considerably improved the position of the external analysis.

INTERNAL ANALYSIS:
This analysis is done by persons who have access who
have access to the detailed internal accounting records of the business firm is
known as internal analysis. Such an analysis can, therefore, be performed by
executives and employees of the employees of the organization as well as
government agencies which have statutory powers vested in them. Financial
analysis for managerial purposes is the internal type of analysis that can be
effected depending upon the purpose to be achieved.

On the basis of Modus Operandi:

According to the method of operation followed in the analysis can be
two types
Horizontal Analysis
Vertical Analysis

Horizontal Analysis:
It refers to the comparison of financial data of a
company for several years. The figures of this type of analysis are presented
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horizontally over a number of columns. The figures of the various years are
compared with standard or base year. A base year is a year chosen as beginning
point. It is also called Dynamic Analysis. This analysis makes it possible to
focus attention on items that have changed significantly during the period under
review. Comparative statements and trend percentages are two tools employed
in horizontal analysis.

Vertical Analysis:
It refers to the study of relationship of the various
items in the financial statements of one accounting period. In this type of
analysis the figures from financial statements of a year are compared with a
base year selected from the same years statement. . It is also called Static
Analysis. Common size financial statements and financial ratios are the two
tools employed in vertical analysis. Since vertical analysis considers data for
one time period only, it is not vary conducive to a proper analysis financial
statements. However, it may be used along with horizontal analysis to make it
more effective and meaningful.

On the basis of entities involved:

According to the method of operation followed in the analysis can be two
types
Inter-firm or Cross Sectional Analysis
Intra-firm or Time Series Analysis

Inter-firm or Cross Sectional Analysis:

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Cross sectional analysis involves
comparison of financial data of a firm with other firms (competitors) or industry
averages for the same time period.

Intra-firm or Time Series Analysis:

Time series analysis involves the study of
performance of the same firm over a period of time.

On the basis of time horizon:

According to the method of operation followed in the analysis can be two
types
Short term Analysis
Long term Analysis

Short term Analysis:

Short term analysis measures the liquidity position of a
firm, i.e. short term paying capacity of a firm or the firms ability to meet the
current obligations.

Long term Analysis:

Long term analysis involves the of the firms ability to
meet the interest costs and repayment schedules of its long term obligations.
The solvency, stability and profitability are measured under this type of
analysis.

Procedure of Financial Statements Analysis:

Broadly speaking there are three steps involved in the
analysis of financial statements. These are

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Selection
Classification
Interpretation
The first step involves selection of information (data) relevant to the purpose
of analysis of financial statements. The second step involved is the methodical
classification of the data and the third step includes drawing of inferences and
conclusions.
The following procedure is adopted for the analysis and
interpretation of financial statements.
1. The analyst should acquaint himself with principles and postulates of
accounting. He should know the plans and policies of the management so
that he may be able to find out whether these plans are properly executed
or not.
2. The extent of analysis should be determined so that the sphere of work
may be decided. If the aim is to find out the earning capacity of the
enterprise then analysis of income statement will be undertaken. On the
other hand, if the financial position is to be studied then balance sheet
analysis will be necessary.
3. The financial data given in the statements should be re-organized and rearranged. It will involve the grouping of similar data under same heads,
breaking down of individual components of statements according to
nature. The data is reduced to a standard form.

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4. A relationship is established among financial statements with the help of
tools and techniques of analysis such as ratios, trends, common size,
funds flow etc.
5. The information is interpreted in a simple and understandable way. The
significance and utility of financial data is explained for helping decisiontaking.
6.

The conclusions drawn from interpretation are presented to the

management in the form of reports.

Methods and Devices of Financial Analysis:

A Number of methods or devices are used to study the relationship
between different statements. The following methods of analysis are generally
used:
i.

Comparative statements

ii.

Trend analysis

iii.

Common size statements

iv.

Funds flow analysis

v.

Cash flow analysis

vi.

Ratio analysis

vii.

Cost-volume-profit analysis
In this project the Comparative Statement and Ratio Analysis is used to

study the financial statement of EXIDE LIFE INSURANCE.

Comparative statements:
The comparative financial statements are statements of the financial position
at different periods of time. The elements of financial position are shown in a
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comparative form so as to give an idea of financial position at two or more
periods. Any statement prepared in a comparative form will be covered in
comparative statements. From practical point of view generally, two financial
statements;
1. Balance Sheet
2. Income Statement

Comparative balance sheet:

The comparative balance sheet analysis is the study of the trend of the
same items, group of items and computed items, group of items and computed
items in two or more balance sheets of the same business enterprise on different
dates. The changes in periodic balance sheet items reflect the conduct of a
business. The 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 this increase in figures. The fourth column may be added for giving
percentage of increases and decreases.

Guidelines for Interpretation of Comparative Balance Sheet:

While interpreting comparative balance sheet the interpreter is expected to
study the following aspects1. Current Financial Position and Liquidity Position
2. Long term Financial Position
3. Profitability of the Concern
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For studying the Financial Position and short term
Financial Position of a concern, one sees the working capital in both the years.
The excess of current assets over current liabilities will give the figure of
working capital. The increase in working capital means improvement in the
current financial position of the business. An increase in current assets
accompanied by the increase in current liabilities of the same amount will not
show any improvement in short term financial position. One should study the
increase or decrease in current assets and current liabilities and this will enable
him to analyse the current financial position.
The second aspect which should be studied in current financial
position is the liquidity position of the concern. If liquid assets like cash in
hand, cash at bank, bills receivable, debtors, etc. show an increase in the second
year over the first year, this will improve the liquidity position of the concern.
The increase in inventory can be on account of accumulation of stocks for want
of customers, decrease in demand or inadequate sales promotion efforts. An
increase in inventory may increase working capital of the business but it will
not be good for business.
The long term financial position of the concern can be
analysed by studying the changes in fixed assets, long term liabilities and
capital. The proper financial policy of concern will be to finance fixed assets by
the issue of either long-term securities such as debentures, bonds, loans from
financial institutions or issue of fresh share capital. An increase in fixed assets
should be compared to the increase in long term loans and capital. If the
increase in fixed assets is more than the long term securities then parts of fixed
assets have not only been financed from long term sources. A wise policy will
be to finance fixed assets by raising long term funds.

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The new aspects to be studied in a comparative balance
sheet questions is the profitability of the concern. The study of increase or
decrease in retained earnings, various resources and surpluses, etc. will enable
the interpreter to see whether the profitability has improved or not. An increase
in the balance of profit and loss account and the other resources created from
profits will mean an increase in profitability to the concern. The decrease in
such accounts may mean issue dividend, issue of bonus share or deterioration in
profitability of the concern.
After studying various assets and liabilities an opinion
should be formed about the financial position of the concern. One cannot say if
short term financial position is good then long term financial position will also
be good or vice versa. A concluding word about the overall financial position
must be given at the end.

Comparative Income Statement:

The income statement gives the results of the
operation of a business. The comparative income statement gives an idea of the
progress of a business over a period of time. The changes in absolute data in
money values and percentages can be determined to analyse the profitability of
the business. Like comparative balance sheet income statement also has four
columns. First two columns give figures of various items for two years. Third
and fourth columns are used to show increase or decrease in figures in absolute
amounts and percentages respectively.

Guidelines for Interpretation of Comparative Income Statement:

The analysis and interpretation of income statement
will involve the following steps:

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1. The increase or decrease in sales should be compared with the increase or
decrease in costs of goods sold. An increase in sales will not always mean
an increase in profit. The profitability will improve if increase in sales is
more than increase in costs of goods sold. The amount of gross profit
should be studied in the first step.
2.

The second step of analysis should be the operational profits. The

operating expenses such as office and administrative expenses, selling
and distribution expenses should be deducted from gross profit to find out
operating profits. An increase in operating profit will result from the
increase in sales position and control of operating expenses. A decrease in
operating profit may be due to an increase in operating expenses or
decrease in sales. The change in individual expenses should also be
studied. Some expenses may increase due to the expansion of business
activities while others may go up due to managerial inefficiency.

3. The increase or decrease in net profit will give an idea about the overall
profitability of the concern. Non operating expenses such as interest paid,
losses from sales of assets, writing off deferred expenses, payment of tax,
etc. decrease the figure of operating profit. When all non-operating
expenses are deducted from operational profit, we get a figure of net
profit. Some non operating incomes may also be there which will increase
net profit.
4. An increase in net profit will gave us an idea about the progress of the
concern.

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5. An opinion should be formed about profitability of the concern and it
should be given at the end. It should be mentioned whether the overall
profitability of the concern is good or not.

Focus of Financial Statement Analysis:

Financial statement analysis involves evaluating
different aspects of a business enterprise, which are of great importance to
different users such as management, investors, creditors, bankers, analyst,
investment advisers, etc. generally, the following analyses are made while
making Financial Statement Analysis.
1. Liquidity or short term solvency analysis
2. Profitability analysis
3. Capital structure or gearing analysis
4. Market strength or investor analysis
5. Growth and stability analysis

Application of Financial Analysis:

Following are the application of financial analysis:
1. Assessing Corporate Excellence
2. Judging credit worthiness
3. Forecasting bankruptcy
4. Valuing equity shares
5. Predicting bonds ratings
6. Estimating market risk

Limitations of Financial Statement Analysis:

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Financial analysis is a powerful mechanism of
determining financial strengths and weakness of a firm. But, the analysis is
based on the information available in the financial statements. Thus, the
financial analysis suffers from serious inherent limitations of financial
statements. The financial analyst has also be careful about the impact of price
level changes, windows dressing of financial statements, changes in the
accounting policies of a firm, accounting concepts and conventions, and
personal judgment, etc. The readers are advised to relate the limitations of
financial statements as given in the previous chapter and also the limitations of
ratios as a tool of financial analysis as discussed in Ratio Analysis. Some of the
important limitations of financial analysis are, however, summed up as below
i.

It is only a study of interim reports.

ii.

Financial analysis is based upon only monetary information and nonmonetary factors are ignored.

iii.

It does not consider changes in price levels.

iv.

As the financial statements are prepared on the basis of a going

concern, it does not give exact position. Thus accounting concepts and
conventions cause a serious limitation to financial analysis.

v.

Changes in accounting procedure by a firm may often make financial

analysis misleading.

vi.

Analysis is only a means and not an end in itself. The analyst has to
make interpretation and draw his own conclusions. Different people
may interpret the same analysis in different ways.

Overview of Ratio Analysis:

Introduction:
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Ratio analysis is one of the techniques used to analyse the financial
statements. It is one of the most powerful tools of financial analysis. It is the
process of establishing and interpreting various ratios (quantitative relationship
between figures and group of figures). Through ratio analysis financial
statement can analyse more clearly and decision made from such analysis.
According to Accountants Handbook by Wixon Kell and Bedford, a ratio is
an expression, of the quantitative relationship between the numbers.

Nature of Ratio Analysis:

Ratio analysis is a technique of analysis and interpretation of
financial statements. It is the process of establishing and interpreting various
ratios for helping in making certain decision. However, ratio analysis is not an
end in itself. It is only a means of better understanding of financial strength and
weaknesses of affirm. Calculation of mere ratios does not serve any purpose,
unless several appropriate ratios are analysed and interpreted. There are a
number of ratios which can be calculated from the information given in the
financial statements, but the analyst select the appropriate data and calculate
only a few appropriate ratios from the same keeping in mind the objective of
analysis. The ratios may be used as a symptom like blood pressure, the pulse
rate or the body temperature and their interpretation depends upon the caliber
and competence of the analyst. The following are the four steps involved in the
ratio analysis;
i.

Selection of relevant data from the financial statements depending upon

the objective of the analysis.

ii.

Calculation of appropriate ratios from the above data.

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iii.

Comparison of the calculated ratios with the ratios of the same firm in
the past, or the ratios developed from projected financial statements or
the ratio of some other firms or the comparison with ratios of the
industry to which the firm belongs.

iv.

Interpretation of the ratios.

Use and Significance of Ratio Analysis:

Helpful in decision making.

Helpful in financial forecasting and planning.
Helpful in communication.
Helpful in co-ordination.
Helpful in Control.
Helpful in efficiency appraisal.
Helpful in evaluation of financial position.
Helpful to investors, financial institution, employee.

Limitations of Ratio Analysis:

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

1. Limited Use of Single Ratio.

A single ratio, usually, does not convey much of a
sense. To make a better interpretation a number of ratios have to be
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calculated which is likely to confuse the analyst than help him ion making
any meaningful conclusion.

2. Lack of Adequate Standards.

There are no well adapted standards or rules of thumb
for all ratios which can be accepted as norms. It renders interpretation of
the ratios difficult.
3. Inherent Limitations of Accounting.
Like financial statements, ratios also suffer from
the inherent weakness of accounting records such as their historical nature.
Ratios of the past are not necessarily true indicators of the future.

4. Change of Accounting Procedure.

Change in accounting procedure by a firm often
makes ratio analysis misleading. E.g. - a change in the valuation of
methods of inventories, from FIFO to LIFO increases the cost of sales and
reduces considerably the value of closing stocks which makes stock
turnover ratio to be lucrative and an unfavorable gross profit ratio.

5. Window Dressing.
Financial statements can easily be window dressed
to present a better picture of its financial and profitability position to
outsiders. Hence, one has to be very careful in making a decision from
ratios calculated from such financial statements. But it may be very
difficult for an outsider to know about the window dressing made by a
firm.
6. Personal Bias.
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Ratios are only means of financial analysis and not an end
in itself. Ratios have to be interpreted and different people may interpret
the same ratio in different ways.

7. Incomparable.
Not only industries differ in their nature but also the firms
of the similar business widely differ in their size and accounting
procedures, etc. It makes comparison of difficult and misleading.
Moreover comparisons are made difficult due to differences in definitions
of various financial terms used in the ratio analysis.

8. Absolute Figures Distortive.

Ratios devoid of absolute figures may prove distortive as
ratio analysis is primarily a quantitative analysis and not a qualitative
analysis.

9. Ratios no Substitutes.
Ratio analysis is merely a tool of financial statements. Hence, ratios become
useless if separated from the statements from which they are computed.

10. Claues not Conclusions.

Ratios provide only clues to analysts and not final
conclusions. These ratios have to be interpreted by these experts and there
are no standard rules for interpretation.

Classification of Ratios:
The use of ratio analysis is not confined to financial manager only. There
are different parties interested in the ratio analysis for knowing the financial
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position of a firm for different purposes. In view of various users of ratios, there
are many types of ratios which can be calculated from the information given in
the financial

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Functional Classification in View of Financial Management or

Classification According to Tests:
Liquidity Ratios:
(A)
1. Current Ratio
2. Liquid Ratio
3. Cash Ratio
4. Interval Measure
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(B)
1. Debtors Turnover Ratio
2. Creditors Turnover Ratio
3. Inventory Turnover Ratio

Long-term solvency and Leverage Ratios:

1. Debt/Equity Ratio
2. Debt to total capital Ratio
3. Invest Coverage
4. Cash Flow/Debt
5. Capital Gearing
Activity Ratios or Asset Management Ratios:
1. Inventory Turnover Ratio
2. Debtors Turnover
3. Fixed Assets Turnover Ratio
4. Total Assets Turnover Ratio
5. Working Capital Turnover Ratio
6. Payables Turnover Ratio
7. Capital Employed Turnover
Profitability Ratio:
(A)

In relation to Sales

1. Gross Profit Ratio

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2. Operating Ratio
3. Operating Profit Ratio
4. Net Profit Ratio
5. Expense Ratio
(B)

In relation to investments

1. Return on investments
2. Return on capital
3. Return on Equity Capital
4. Return on Total Resources
5. Earnings per share
6. Price-Earnings Ratio

Details of Ratio and Calculation Methods:

Analysis of the data on Ratio - Ratio analysis is one
of the techniques of financial analysis to evaluate the financial condition and
performance of a business concern. Simply, ratio means the comparison of one
figure to other relevant figure or figures. According to Myers Ratio analysis of
financial statements is a study of relationship among various financial factors in
a business as disclosed by a single set of statements and a study of trend of these
factors as shown in a series of statements."

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Advantages and Uses of Ratio Analysis:
There are various groups of people who are interested
in analysis of financial position of a company. They use the ratio analysis to
work out a particular financial characteristic of the company in which they are
interested. Ratio analysis helps the various groups in the following manner:
To work out the profitability:
Accounting ratio help to measure the profitability of the
business by calculating the various profitability ratios. It helps

The management to know about the earning capacity of the

business concern:
In this way profitability ratios show the actual performance
of the business. There is no big increase in profitability ratios Exide life
insurance. On other side existing established Insurance Company the profit
margin and returns are good.
To work out the solvency:
With the help of solvency ratios, solvency of the company
can be measured. These ratios show the relationship between the liabilities and
assets. In case external liabilities are more than that of the assets of the
company, it shows the unsound position of the business. In this case the
business has to make it possible to repay its loans.

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The Importance of Liquidity Ratios:
Liquidity ratios are probably the most
commonly used of all the business ratios. Creditors may often be particularly
interested in these because they show the ability of a business to quickly
generate the cash needed to pay outstanding debt. This information should also
be highly interesting since the inability to meet short-term debts would be a
problem that deserves your immediate attention. Liquidity ratios are sometimes
called working capital ratios because that, in essence, is what they measure.
The liquidity ratios are: the current ratio and the quick ratio. Often liquidity
ratios are commonly examined by banks when they are evaluating a loan
application. Once you get the loan, your lender may also require that you
continue to maintain a certain minimum ratio, as part of the loan agreement. An
indicator of a companys short-term liquidity position. The quick ratio measures
a companys ability to meet its short-term obligations with its most liquid assets.
The higher the quick ratio, the better the position of the company. The quick
ratio is calculated as: Also known as
Quick Ratio = Current Assets Inventories / Current Liabilities

Significance of quick Ratio:

The quick ratio/acid test ratio is very useful in measuring
the liquidity position of a firm. It measures the firms capacity to pay off current
obligations immediately and is more rigorous test of liquidity than the current
ratio. It is used as a complementary ratio to the current ratio. Liquid ratio is
more rigorous test of liquidity than the current ratio because it eliminates
inventories and prepaid expenses as a part of current assets. Usually a high
liquid ratios an indication that the firm is liquid and has the ability to meet its
current or liquid liabilities in time and on the other hand a low liquidity ratio
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represents that the firms liquidity position is not good. As a convention,
generally, a quick ratio of "one to one" (1:1) is considered to be satisfactory.
Although liquidity ratio is more rigorous test of liquidity
than the current ratio, yet it should be used cautiously and 1:1 standard should
not be used blindly. A liquid ratio of 1:1 does not necessarily mean satisfactory
liquidity position of the firm if all the debtors cannot be realized and cash is
needed immediately to meet the current obligations. In the same manner, a low
liquid ratio does not necessarily mean a bad liquidity position as inventories are
not absolutely non-liquid. Hence, a firm having a high liquidity ratio may not
have a satisfactory liquidity position if it has slow-paying debtors. On the other
hand, A firm having a low liquid ratio may have a good liquidity position if it
has a fast moving inventories

Significance of current ratio:

This ratio is a general and quick measure of liquidity of
a firm. It represents the margin of safety or cushion available to the creditors. It
is an index of the firms financial stability. It is also an index of technical
solvency and an index of the strength of working capital.
A relatively high current ratio is an indication that
the firm is liquid and has the ability to pay its current obligations in time and
when they become due. On the other hand, a relatively low current ratio
represents that the liquidity position of the firm is not good and the firm shall
not be able to pay its current liabilities in time without facing difficulties. An
increase in the current ratio represents improvement in the liquidity position of
the firm while a decrease in the current ratio represents that there has been
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deterioration in the liquidity position of the firm. A ratio equal to or near 2 : 1 is
considered as a standard or normal or satisfactory. The idea of having double
the current assets as compared to current liabilities is to provide for the delays
and losses in the realization of current assets. However, the rule of 2 :1 should
not be blindly used while making interpretation of the ratio. Firms having less
than 2 : 1 ratio may be having a better liquidity than even firms having more
than 2 : 1 ratio. This is because of the reason that current ratio measures the
quantity of the current assets and not the quality of the current assets. If a firms
current assets include debtors which are not recoverable or stocks which are
slow-moving or obsolete, the current ratio may be high but it does not represent
a good liquidity position.

Limitations of Current Ratio:

This ratio is measure of liquidity and should be used very
carefully because it suffers from many limitations. It is, therefore, suggested
that it should not be used as the sole index of short term solvency.
1. It is crude ratio because it measures only the quantity and not the quality of
the current assets.
2. Even if the ratio is favorable, the firm may be in financial trouble, because of
more stock and work in process which is not easily convertible into cash, and,
therefore firm may have less cash to pay off current liabilities.
3. Valuation of current assets and window dressing is another problem. This
ratio can be very easily manipulated by overvaluing the current assets. An equal
increase in both current assets and current liabilities would decrease the ratio

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and similarly equal decrease in current assets and current liabilities would
increase current ratio.

Liquidity Ratio:
It is extremely essential for a firm to be able to meet its
obligation as they become due. Liquidity ratios measures the ability of the firm
to meet its current obligations .A firm should ensure that it does not suffer from
lack of liquidity and also that it does not have excess liquidity. The failure of the
company to meet its obligations due to lack of sufficient liquidity, will result in
a poor creditworthiness, loss of creditors confidence etc. A very high degree of
liquidity is also bad; idle assets earn nothing. Therefore it is necessary to strike a
proper balance between high liquidity and lack liquidity. The most common
ratios which indicate the balance of liquidity are
(a)Current ratio
(b) Quick ratio
(c) Cash ratio
(d) Interval measure
(e) Net working capital ratio.

Current Ratio:
Current ratio is the relationship between current asset and current
liability. This ratio is also known as working capital ratio which measures the
other general liquidity and is most widely used to make the analysis of short
term financial position of a firm. It is calculated by dividing the total current
asset by total current liability.

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Current Ratio=Current Assets/current Liabilities
A relatively high current ratio is an indication that the firm is
liquid and has the ability to pay its current obligation in time as and when they
become due. The rule of thumb is 2:1 i.e. current asset as double the current
liability is consider being satisfactory.

Working Capital Turnover Ratio:

Definition:
Working capital turnover ratio indicates the velocity of the utilization of
net working capital. This ratio represents the number of times the working
capital is turned over in the course of year and is calculated as follows:

Working Capital Turnover Ratio = Cost of Sales / Net Working Capital

The two components of the ratio are cost of sales
and the net working capital. If the information about cost of sales is not
available the figure of sales may be taken as the numerator. Net working capital
is found by deduction from the total of the current assets the total of the current
liabilities.

Significance:
The working capital turnover ratio measures the efficiency with
which the working capital is being used by a firm. A high ratio indicates
efficient utilization of working capital and a low ratio indicates otherwise. But a
very high working capital turnover ratio may also mean lack of sufficient
working capital which is not a good situation.
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Inventory Turnover Ratio or Stock Turnover Ratio (ITR):
Every firm has to maintain a certain level of
inventory of finished goods so as to be able to meet the requirements of the
business. But the level of inventory should neither be too high nor too low.
A too high inventory means higher carrying costs and
higher risk of stocks becoming obsolete whereas too low inventory may mean
the loss of business opportunities. It is very essential to keep sufficient stock in
business.

Definition:
Stock turnover ratio and inventory turnover ratio are the same. This
ratio is a relationship between the cost of goods sold during a particular period
of time and the cost of average inventory during a particular period. It is
expressed in number of times. Stock turnover ratio/Inventory turnover ratio
indicates the number of time the stock has been turn over during the period and
evaluates the efficiency with which a firm is able to manage its inventory. This
ratio indicates whether investment in stock is within proper limit or not.

Components of the Ratio:

Average inventory and cost of goods sold are the two elements
of this ratio. Average inventory is calculated by adding the stock in the
beginning and at the end of the period and dividing it by two. In case of
monthly balances of stock, all the monthly balances are added and the total is
divided by the number of months for which the average is calculated.
The ratio is calculated by dividing the cost of goods sold by the amount of
average stock at cost.
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(a) [Inventory Turnover Ratio = Cost of goods sold / Average inventory at

cost]

Generally, the cost of goods sold may not be

known from the published financial statements. In such circumstances, the
inventory turnover ratio may be calculated by dividing net sales by average
inventory at cost. If average inventory at cost is not known then inventory at
selling price may be taken as the denominator and where the opening in
inventory is also not known the closing inventory figure may be taken as the
average inventory.
(b) [Inventory Turnover Ratio = Net Sales / Average Inventory at Cost]
(c) [Inventory Turnover Ratio = Net Sales / Average inventory at Selling
Price]
(d) [Inventory Turnover Ratio = Net Sales / Inventory]

Significance of ITR:
Inventory turnover ratio measures the velocity of conversion of
stock into sales. Usually a high inventory turnover/stock velocity indicates
efficient management of inventory because more frequently the stocks are sold;
the lesser amount of money is required to finance the inventory. A low inventory
turnover ratio indicates an inefficient management of inventory. A low inventory
turnover implies over-investment in inventories, dull business, poor quality of
goods, stock accumulation, accumulation of obsolete and slow moving goods
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and low profits as compared to total investment. The inventory turnover ratio is
also an index of profitability, where a high ratio signifies more profit; a low
ratio signifies low profit. Sometimes, a high inventory turnover ratio may not be
accompanied by relatively high profits. Similarly a high turnover ratio may be
due to under-investment in inventories.
It may also be mentioned here that there are no rule of thumb or standard for
interpreting the inventory turnover ratio. The norms may be different for
different firms depending up on the nature of industry and business conditions.
However the study of the comparative or trend analysis of inventory turnover is
still useful for financial analysis.

Average Collection Period Ratio:

Definition:
The Debtors/Receivable Turnover ratio when calculated in terms of
days is known as Average Collection Period or Debtors Collection Period Ratio.
The average collection period ratio represents the average number of days for
which a firm has to wait before its debtors are converted into cash.
Formula of Average Collection Period:
Following formula is used to calculate average collection period:

(Trade Debtors No. of Working Days) / Net Credit Sales

Significance of the Ratio:

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This ratio measures the quality of debtors. A short collection
period implies prompt payment by debtors. It reduces the chances of bad debts.
Similarly, a longer collection period implies too liberal and inefficient credit
collection performance. It is difficult to provide a standard collection period of
debtors.

Debtors Turnover Ratio / Accounts Receivable Turnover Ratio:

A concern may sell goods on cash as well as on
credit. Credit is one of the important elements of sales promotion. The volume
of sales can be increased by following a liberal credit policy.
The effect of a liberal credit policy may result in tying up substantial funds of a
firm in the form of trade debtors (or receivables). Trade debtors are expected to
be converted into cash within a short period of time and are included in current
assets. Hence, the liquidity position of concern to pay its short term obligations
in time depends upon the quality of its trade debtors.

Definition:
Debtors turnover ratio or accounts receivable turnover ratio indicates
the velocity of debt collection of a firm. In simple words it indicates the number
of times average debtors (receivable) are turned over during a year.

Debtors Turnover Ratio = Net Credit Sales / Average Trade

Debtors

The two basic components of accounts receivable turnover ratio are net credit
annual sales and average trade debtors. The trade debtors for the purpose of this
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ratio include the amount of Trade Debtors & Bills Receivables. The average
receivables are found by adding the opening receivables and closing balance of
receivables and dividing the total by two. It should be noted that provision for
bad and doubtful debts should not be deducted since this may give an
impression that some amount of receivables has been collected. But when the
information about opening and closing balances of trade debtors and credit sales
is not available, then the debtors turnover ratio can be calculated by dividing
the total sales by the balance of debtors (inclusive of bills receivables) given.
And formula can be written as follows.

Debtors Turnover Ratio = Total Sales / Debtors

Significance of the Ratio:
Accounts receivable turnover ratio or debtors turnover
ratio indicates the number of times the debtors are turned over a year. The
higher the value of debtors turnover the more efficient is the management of
debtors or more liquid the debtors are. Similarly, low debtors turnover ratio
implies inefficient management of debtors or less liquid debtors. It is the
reliable measure of the time of cash flow from credit sales. There is no rule of
thumb which may be used as a norm to interpret the ratio as it may be different
from firm to firm.

DATA ANALYSIS AND INTERPRETATION

Introduction of Financial Statement Analysis:
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The analysis of financial statement consists of

study of relationship and trends to determine whether or not the financial
position and result of operations as well as the financial progress of the
company are satisfactory or unsatisfactory. The analytical methods or devices,
listed below are used to ascertain or measure the relationships among the
financial statements items of a single set of statements and the changes that
have taken place in these items as reflected in successive financial statement.
The fundamental objective of any analytical method is to simplify or to reduce
the data under review to more understandable terms.

Analytical methods and devices used in analysing financial

statements are as follows
1 Comparative Statement
2 Common Size statements
3 Trend Ratios
4 Ratio Analysis

Comparative Statement:
These financial statements are so designed as to provide
time perspective to the various elements of financial position contained therein.
These statements gives data for all the periods stated so as shows
(a) Absolute money values of each of the period stated.
(b) Increase and decrease in absolute data in terms of money values.
(c) Increase and decrease in terms of percentage.
(d) Comparison expressed in ratios
(e) Percentages of total.
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The Comparative Financial Statements Analysis is statements
of the financial position at different period of time. The elements of financial
position are shown in a comparative form will be covered in comparative
statement from practical point of view generally two financial statements
1

Balance Sheet

2 Income Statements

Comparative Balance Sheet:

The Comparative Balance Sheet analysis the study of the
trend of the same items, group of items, group of items and computed items in
two or more balance sheet of the same business enterprise on different dates.
The change in periodic balance sheet reflects the conduct of a business. The
change can be observed by comparison of the balance sheet at the beginning
and at end of period and these changes can help in formation opinion about the
progress of an enterprise. The comparative balance sheet has two columns for
the data of original balance sheet. A third column is used to show the increase
in the figures and the fourth column may be used to show percentage increase
and decrease.

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Comparative Balance Sheet of EXIDE LIFE INSURANCE
(for the year ending on 31st march, 2014 and 31st march, 2015)

Particulars

31.3.2014

31.4.2015

Increase/

Decrease

Sources of Funds
Share Capital
7,995,649
Reserves and surplus
Credit / (Debit) Fair value change 969

7,996,736
-

+ 1087
- 969

0.0136

account
Sub-Total (A)

7,996,736

+ 118

0.0015

Credit / (Debit) Fair value change (1,635)

111,017

+ 112,652

account
Policy liabilities
Provision for linked liabilities

14,158,884
16,358,452

+ 4983724
- 351242

54.31
(-)2.10

227,345

+ 120573

112.92

7,996,618

(-) 100

Policy Holders Fund

9,175,160
16,709,694

Funds for discontinued policies

(i) Discontinued on account of non- 106,772
payment of premium
(ii) Others

Sub Total (B)

25,989,991

30,755,698

+ 4,765,707

18.33

33,986,609

38,752,434

+ 4,765,825

14.02

2,237,647
9,710,071
16,816,466
136,987
28,901,17

2,843,320
14,465,072
16,585,797
104,222
33,998,411

+ 605,673
+ 4,755,001
- 230,669
- 32765
5,097,240

27.06
48.96
(-)1.37

926,324

- 72,963

(-)7.30

Application of Fund
Total

C= (A+B)

Investments
Shareholders
Policyholders
Assets held to cover linked liabilities
Fixed assets
Sub-Total (D)

(-)23.91

17.63

1
Current Assets
Cash and bank balances

999,287
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Advances and other assets

1,637,296

1,994,617

+ 357,321

21.82

Sub-Total (E)

2,636,583

2,920,941

+ 284,358

10.78

Current liabilities
Provisions
Sub-Total (F)

1,747,056
35,205
1,782,261

1,565,694
31,162
1,596,856

- 181,362
- 4,043
- 185,405

(-)10.38
(-)11.4
(-)10.40

1,324,085

+ 469,763

54.98

Debit balance in Profit & Loss Account 4231116

3,429,938

- 801178

(-)18.93

(Shareholders' account)
Sub-Total (H)

4231116

3,429,938

- 801178

(-)18.93

TOTAL (I) = (D) + (G) + (H)

33,986,60

38,752,434

+ 4,765,825

14.02

Net Current Assets/(Liabilities) (G) = 854,322

(E) (F)

Table No 4. 1 (Comparative Balance Sheet of EXIDE LIFE INSURANCE)

An Analysis and interpretation of the above balance sheet reveals:

(1) Working Capital is increased from 5154.73 to 5670.21, which is a
positive signal for the firm because increase in Working Capital leads to a
better financial position and company have more funds to do business
activities.

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2015

5670.21

2014

4800

5154.21

4900

5000

5100

5200

5300

5400

5500

5600

5700

5800

Graph no. 4.1 Net Asset of EXIDE LIFE INSURANCE

(2) There has been a drastic fall in cash balance (72,963). This reflects an

adverse cash position.

(3) Fixed Assets has been decreased by 32765 and even the Share Capital has
been increased by 1087 this show even after arranging the new funds by share
capital company unable to increase the Fixed Capital.
(4) Current Assets have been increased by 284,358 this shows that company
used the funds of share capital to invest in current assets and want to make its
liquidity situation better

Comparative Income Statement:

Comparative profit and loss account or income
statement shows the operating results for a number of accounting periods and

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changes in data significantly in absolute periods and changes in the data
significantly in absolute money terms as well as in relative percentage.
Comparative Profit and Loss of EXIDE LIFE INSURANCE
(for the year ending on 31st march, 2014 and 31st march, 2015)
Particulars

31.03.2014

31.03.2015

Increase

/Decreas
Amounts transferred from the Policyholders' 816,086

960,742

e
144,656

17.7

194924
4264
(692)

18239
(13427)
4730

10.32
75.89
87.23

83173

12055

0.16

A/c (Technical Account)* (see note 1)

Income from investments
(a) Interest, dividends & rent gross
176,685
(b) Profit on sale/redemption of investments - 17,691
(c) (Loss on sale/ redemption of investments) (5,422)
(d) (Amortisation of premium) / discount on 71,118
investments (net)
Other Income
(a) Miscellaneous Income

452

667

215

47.56

Total (A)

1,076,610

1243078

166468

15.46

Expense other than those directly related to 17240

17507

267

1.54

the insurance business

Bad Debts Written Off
Amount transferred to the Policyholders' 966,841

425,047

(541794)

56.03

Account (Technical Account)

Provision for tax - Fringe Benefits Tax / 97

11

86

88.65

Wealth tax
Provisions (other than taxation)

a) For diminution in the value of investments

b) Provision for doubtful debts c) Other

Total (B)
Profit/(Loss) before tax = (A) - (B)

984,178
92,432

441900
801,178

(542278)
708,746

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ASMIT
Provision for taxation - Income Tax
Profit/(Loss) after tax

92,432

801,178

708746

Appropriations
(A) Balance at the beginning of the year
(b) Interim dividends paid during the year
(c) Proposed final dividend
(d) Dividend distribution
e) Transfer to reserves/other accounts

(4,323,548)
-

(4231116)
-

92432
-

Profit / (Loss) carried to the Balance Sheet (4,231,116)

Earnings per share (Face Value of Rs.10/- 0.12

(3429938)
1

801178

19%

each) - Basic and Diluted (in Rs.)

Table 4.2 (Comparative Profit and Loss of EXIDE LIFE INSURANCE)

*Note no 1 Policy holder account means the account made by the insurance
company in form of revenue accounts under the format of FORM L-1-A-RA
according to the regulations of IRDA. In which it records the total premium
receipt. It is similar to sale in case of manufacturing companies like
manufacturing companies record its produced item sale and insurance company
records its product sale.
Apart from this to take a clear snapshot of an insurance
companys sale we can consider the total premium receipt during the year and
the premium receipt during the years are as follows
Year

Amount (in 000)

2014

8,046,834

2015

8,262,468

% increase
2.67%

Table No. 4.3 ( Premium received by the Company)

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An Analysis and interpretation of the above Income Statement

reveals:

(1) Premium received are increased by 2.67%, which is positive signal for
the company that business of the company is increasing.

Premium Received
9000000
8000000
7000000

8,262,468

8,046,834

6000000
Premium Received

5000000
4000000
3000000
2000000
1000000
0

2013

2014

year

Graph No 4.2 Premium received by the Company

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(2) Since EXIDE life insurance got certificate of incorporation from ROC in
year 2008 and it takes certain time to become a break-even company and
company is suffering losses, However losses has been decreased by 19%
from year 2014 to 2015. This is a positive signal for the company.

4500000
4000000
3500000
3000000
2500000
Column1

2000000
1500000
1000000
500000
0
2014

2015

Graph No. 4.3 Profit/Loss of Company

(3) Loss on sale of investment has been decrease by 87.23% which is
showing that the investment decisions are taken by the senior person of
the company in an accurate direction.
(4) EPS has been increased from 0.12 to 1, which is good for investors.

Common Size Statements:

In the comparative statements it is difficult to
comprehend the changes over the years in relations to the total asset and
liabilities and capital or total net sales. This limitation of comparative
statements make comparison between two or more firms of industry impossible
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because there is no common base of comparison for absolute figures. Gain for
an interpretation for underlying causes of changes over the time period a
vertical analysis is required and this is not possible with comparative
statements.
Common Size Statements are those in which figures reported are converted in to
percentages to some common base for this financial statement are presented as
percentage or ratio to total of the items and a common base for comparison is
provided. Each percentage shows the relation of the individual item to its
respective total.

Common Size Balance Sheet:

In a common size Balance Sheet total assets or
liability taken as 100 and all the figures are expressed as percentage of the total.
Comparative common size balance sheet for different periods helps to highlight
the trends in different items. If it is prepared for different firms in an industry, it
facilitates to judge the relative soundness and helps in understanding their
financial strategy.
Common Size Balance Sheet of EXIDE LIFE INSURANCE
(for the year ending on 31st march, 2014 and 31st march, 2015)

Particulars

31.3.2014

31.4.2015

of total

%
of total

Sources of Funds
Share Capital
7,995,649
Reserves and surplus
Credit / (Debit) Fair value change 969
account
Page 72

23.52%

7,996,736
-

20.64%

ASMIT
Sub-Total (A)

7,996,618

23.52%

7,996,736

20.64%

111,017

0.29%

27%
49.17%

14,158,884
16,358,452

36.54%
42.21%

0.31%

227,345

0.54%

30,755,698

79.36%

100%

38,752,434

100%

2,237,647
9,710,071
linked 16,816,466

6.58%
28.57%
49.48%

2,843,320
14,465,072
16,585,797

7.34%
37.33%
42.80%

136,987
28,901,171

0.4%
85.03%

104,222
33,998,411

0.27%
87.73%

Cash and bank balances

Advances and other assets

999,287
1,637,296

2.94%
4.82%

926,324
1,994,617

2.39%
5.15%

Sub-Total (E)

2,636,583

7.76%

2,920,941

7.54%

Current liabilities
Provisions
Sub-Total (F)

1,747,056
35,205
1,782,261

5.14%
0.10%
5.24%

1,565,694
31,162
1,596,856

4.04%
0.08%
4.12%

2.51%

1,324,085

3.42%

12.45%

3,429,938

8.85%

Policy Holders Fund

Credit / (Debit) Fair value change (1,635)
account
Policy liabilities
Provision for linked liabilities

9,175,160
16,709,694

Funds for discontinued policies

(i) Discontinued on account of 106,772
non-payment of premium
(ii) Others

Sub Total (B)

25,989,991

Application of Fund
Total

33,986,609

C= (A+B)

Investments
Shareholders
Policyholders
Assets held

to

cover

liabilities
Fixed assets
Sub-Total (D)
Current Assets

Net Current Assets/(Liabilities) 854,322

(G) = (E) (F)
Debit balance in Profit & Loss 4231116
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ASMIT
Account (Shareholders' account)
Sub-Total (H)

4231116
33,986,609

100%

3,429,938
38,752,434

100%

Table No. 4.4 (Common Size Balance Sheet of EXIDE LIFE INSURANCE)

Common Size Income Statement:

In a Common size income statement the sales figure
is assumed to be equal to 100 and all other figures of cost or expenses are
expressed as percentage of sales. A comparative income statement for different
periods helps to reveal the efficiency or otherwise of incurring any cost or
expenses. If it is being prepared for two firms, it shows the relative efficiency of
each cost item for the two firms.

Common Size Income Statement of EXIDE LIFE INSURANCE

(for the year ending on 31st march, 2014 and 31st march, 2015)

Particulars
Amounts transferred

from

Policyholders'

(Technical

A/c

31.03.2014
the 816,086

100%

31.03.2015
960,742

Account)
Income from investments
(a) Interest, dividends & rent gross 176,685
(b) Profit on sale/redemption of 17,691

194924
4264

investments (c) (Loss on sale/ redemption of (5,422)

(692)

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ASMIT
investments) (d) (Amortisation of premium) / 71,118

83173

discount on investments (net)

Other Income
(a) Miscellaneous Income

452

Total (A)

1,076,610

667
131.92

1243078

129.39%

Expense other than those directly 17240

2.11%

17507

1.82%

related to the insurance business

Bad Debts Written Off
Amount
transferred
to
the 966,841

118.47%

425047

44.24%

0.01%

11

0.001%

Policyholders' Account (Technical

Account)
Provision for tax - Fringe Benefits 97
Tax / Wealth tax
Provisions (other than taxation)

a) For diminution in the value of -

investments
b) Provision for doubtful debts c) Other

Total (B)
Profit/(Loss) before tax = (A) - (B)
Provision for taxation - Income Tax
Profit/(Loss) after tax

984,178
92,432

120.60%
11.32%

441900
801,178

46%
83.39%

92,432

11.32%

801178

83.39%

Appropriations
(A) Balance at the beginning of the (4,323,548)

(4231116)

year
(b) Interim dividends paid during the -

year
(c) Proposed final dividend
(d) Dividend distribution
e) Transfer to reserves/other -

accounts
Profit / (Loss) carried to the (4,231,116)
Balance Sheet
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ASMIT
Earnings per share (Face Value of 0.12

Rs.10/- each) - Basic and Diluted

(in Rs.)

Table No4.5(Common Size Income Statement of EXIDE LIFE

INSURANCE)

TREND RATIOS / ANALYSIS:

Trend ratio can be defined as index number of
the movement of the various financial items in the financial statement for the
number of periods. It is a statistical device applied in the analysis of the
financial statement to reveal the trend of the items with the passage of time.
Trend ratio shows the nature and rate of movements in various financial factors
they provide a horizontal analysis of comparative statements and reflect the
behavior of various items with the passage of time. Time ratio can be
graphically presented for a better understanding by the management. That is
very useful in predicting the behavior of the various financial factors in the
future. However it should be noted that conclusions is arrived at. Since trends
are sometimes significantly affected by externalities.

Year

Asset

under

Management

Premium Received Operating

in Crores

(in crore)

2011-12

2010

Net Profit

Expense Ratio
(with respect to Sales)

811

27%

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ASMIT
2012-13

2529

737

27%

-70

2013-14

2964

805

24%

2014-15

3509

826

23%

80

Table No 4.6 (Trend Ratios)

Asset Under management in crore

4000
3509

3500
2964

3000

2529

2500
2000

Asset Under management

in crore

2010

1500
1000
500
0
2011-2012 2012-2013 2013-2014 2014-2015

Graph No 4.4 Assets under Management of Company

Graph No 4.5 Premiums Received

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ASMIT
840
820

811

826
805

800
780
760

737

740
720
700
680
2011-2012

2012-2013

2013-2014

2014-2015

Premium received in crores

Graph No 4.6 Operating Expense Ratio

23

27
2011-2012
2012-2013
2013-2014
2014-2015

24
27

Graph No 4.7 Net Profit of the EXIDE LIFE INSURANCE

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ASMIT
100
80
50

0
2011-2012

2012-2013

2013-2014

2014-2015

Net Profit

-50

-70

-100
-122
-150

Conclusion of the above Trend Ratio / Analysis:

Asset under the companies hand are continuously increasing
and the premium received by the company is increased in year 2011-12 but after
that it is declining but trying to improve the position and increasing in year
2013-14 and 2014-15
Operating expenses of the company are decreasing
i.e. 27% to 23%. Since the company is just incorporated in 2008 so having
losses in the beginning but company manage the loss in year 2014-15 and now
having profit of 80crores

Ratio Analysis:
Ratio analysis is a powerful tool of financial analysis. A ratio is
defined as the indicated quotient of two mathematical expressions and
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the relationship between two or more things. In financial analysis, a ratio
is used as a benchmark for evaluation the financial position and performance of
a firm. The absolute accounting figures reported in the financial statements do
not provide a meaningful understanding of the performance and financial
position of a firm. An accounting figure conveys meaning when it is related to
some other relevant information. For example, an Rs.5 core net profit may look
impressive, but the firms performance can be said to be good or bad only when
the net profit figure is related to the firms Investment.
The relationship between two accounting
figures expressed mathematically, is known as a financial ratio (or simply as a
ratio). Ratios help to summarize large quantities of financial data and to make
qualitative judgment about the firms financial performance.

For example,

consider current ratio. It is calculated by dividing current assets by current

liabilities; the ratio indicates a relationship- a quantified relationship between
current assets and current liabilities. This relationship is an index or yardstick,
which permits a quantitative judgment to be formed about the firms liquidity
and vice versa.

The point to note is that a ratio reflecting a quantitative

relationship helps to form a qualitative judgment. Such is the nature of all

financial ratios.

Theoretical background:
Use and significance of ratio analysis:
The ratio is one of the most powerful tools of financial
analysis. It is used as a device to analyze and interpret the financial health of
enterprise. Ratio analysis stands for the process of determining and presenting
the relationship of items and groups of items in the financial statements. It is an
important technique of the financial analysis. It is the way by which financial
stability and health of the concern can be judged. Thus ratios have wide
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applications and are of immense use today. The following are the main points of
importance of ratio analysis:

(A) Managerial uses of ratio analysis:

1. Helps

in decision making:Financial statements are prepared primarily for decision-

making. Ratio analysis helps in making decision from the information provided
in these financial Statements.

2. Helps in financial forecasting and planning:Ratio analysis is of much help in financial forecasting and
planning. Planning is looking ahead and the ratios calculated for a number of
years a work as a guide for the future. Thus, ratio analysis helps in forecasting
and planning.

3. Helps in communicating:The financial strength and weakness of a firm are

communicated in a more easy and understandable manner by the use of ratios.
Thus, ratios help in communication and enhance the value of the financial
statements.

4. Helps in co-ordination:Ratios even help in co-ordination, which is of at most

importance in effective business management. Better communication of
efficiency and weakness of an enterprise result in better co-ordination in the
enterprise

5. Helps in control:Ratio analysis even helps in making effective control of

business. The weaknesses are otherwise, if any, come to the knowledge of the
managerial, which helps, in effective control of the business.

(B) Utility to shareholders/investors:

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An investor in the company will like to assess the financial
position of the concern where he is going to invest. His first interest will be the
security of his investment and then a return in form of dividend or interest.
Ratio analysis will be useful to the investor in making up his mind whether
present financial position of the concern warrants further investment or not.

(C)Utility to creditors:
The creditors or suppliers extent short-term credit to the
concern. They are invested to know whether financial position of the concern
warrants their payments at a specified time or not.

(D) Utility to employees:

The employees are also interested in the financial position of
the concern especially profitability. Their wage increases and amount of fringe
benefits are related to the volume of profits earned by the concern.

(E) Utility to government:

Government is interested to know overall strength of the
industry. Various financial statement published by industrial units are used to
calculate ratios for determining short term, long-term and overall financial
position of the concerns.

(F) Tax audit requirements:

Sec 44AB was inserted in the income tax act by financial
act; 1984.Clause 32 of the income tax act requires that the following accounting
ratios should be given:

Gross profit/turnover:
(1) Net profit/turnover.
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(2) Stock in trade/turnover.
(3) Material consumed/finished goods produced.
Further, it is advisable to compare the accounting ratios
for the year under consideration with the accounting ratios for earlier two years
so that the auditor can make necessary enquiries, if there is any major variation
in the accounting ratios.

Limitations:
Ratio analysis is very important in revealing the financial position
and soundness of the business. But, in spite of its advantages, it has some
limitations which restrict its use. These limitations should be kept in mind while
making use of ratio analysis for interpreting the financial the financial
statements. The following are the main limitations of ratio analysis:

1. False results:Ratios are based upon the financial statement. In case financial
statement are in correct or the data of on which ratios are based is in correct,
ratios calculated will all so false and defective. The accounting system itself
suffers from many inherent weaknesses the ratios based upon it cannot be said
to be always reliable.

2. Limited comparability:The ratio of the one firm cannot always be compare with the
performance of other firm, if uniform accounting policies are not adopted by
them. The difference in the methods of calculation of stock or the methods used
to record the deprecation on assets will not provide identical data, so they
cannot be compared.

3. Absence of standard universally accepted terminology:Different meanings are given to a particular term, e.g. Some firms
take profit before interest and tax; others may take profit after interest and tax. A
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bank overdraft is taken as current liability but some firms may take it as noncurrent liability. The ratios can be comparable only when all the firms adapt
uniform terminology.

4. Price level changes affect ratios:The comparability of ratios suffers, if the prices of the
commodities in two different years are not the same. Change in price effect the
cost of production, sale and also the value of assets. It means that the ratio will
be meaningful for comparison, if the prices do not change.

5. Ignoring qualitative factors:Ratio analysis is the quantitative measurement of the

performance of the business. It ignores qualitative aspect of the firm, how so
ever important it may be. It shoes that ratio is only a one sided approach to
measure the efficiency of the business.

6. Personal bias:Ratios are only means of financial analysis and an end in itself. The
ratio has to be interpreted and different people may interpret the same ratio in
different ways.

7. Window dressing:Financial statements can easily be window dressed to present a

better picture of its financial and profitability position to outsiders. Hence, one
has to be very carefully in making a decision from ratios calculated from such
financial statements.

8. Absolute figures distortive:Ratios devoid of absolute figures may prove distortive, as ratio
analysis is primarily a quantitative analysis and not a qualitative analysis.

Classification of ratios:
Several ratios, calculated from the accounting data can be
grouped into various classes according to financial activity or function to be
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evaluated. Management is interested in evaluating every aspect of the firms
performance. They have to protect the interests of all parties and see that the
firm grows profitably. In view of thee requirement of the various users of ratios,
ratios are classified into following four important categories:
Liquidity ratios

- short-term financial strength

Leverage ratios

- long-term financial strength

Profitability ratios

- long term earning power

Liquidity ratios measure the firms ability to meet current obligations;

Leverage ratios show the proportions of debt and equity in financing the firms
assets;
Profitability ratios measure overall performance and effectiveness of the firm

LIQUIDITY RATIOS:
It is extremely essential for a firm to be able to meet the
obligations as they become due. Liquidity ratios measure the ability of the firm
to meet its current obligations (liabilities). The liquidity ratios reflect the shortterm financial strength and solvency of a firm. In fact, analysis of liquidity
needs the preparation of cash budgets and cash and funds flow statements; but
liquidity ratios, by establishing a relationship between cash and other current
assets to current obligations, provide a quick measure of liquidity. A firm
should ensure that it does not suffer from lack of liquidity, and also that it does
not have excess liquidity. The failure of a company to meet its obligations due
to lack of sufficient liquidity, will result in a poor credit worthiness, loss of
credit worthiness, loss of creditors confidence, or even in legal tangles resulting
in the closure of the company. A very high degree of liquidity is also bad; idle
assets earn nothing. The firms funds will be unnecessarily tied up in current

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assets.

Therefore, it is necessary to strike a proper balance between high

liquidity and lack of liquidity.

The most common ratios which indicate the extent of liquidity are lack of it,
are:

1. Current Ratio:
Current ratio is calculated by dividing current assets by current liabilities.
Current assets
Current Ratio =
Current Liabilities

Year

2011-2012

2012-13

2013-14

2014-15

Current Ratio

1.026

1.25

1.48

1.83

Table No. 4.7 Current Ratio

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2014-2015

1.83

2013-2014

1.48

Current Ratio
2012-2013

1.25

2011-2012

1.03

0.2

0.4

0.6

0.8

1.2

1.4

1.6

1.8

Graph No. 4.8 Current Ratio

Current assets include cash and other assets that can be
converted into cash within in a year, such as marketable securities, debtors and
inventories. Prepaid expenses are also included in the current assets as they
represent the payments that will not be made by the firm in the future. All
obligations maturing within a year are included in the current liabilities.
Current liabilities include creditors, bills payable, accrued expenses, short-term
bank loan, income tax, liability and long-term debt maturing in the current year.
The current ratio is a measure of firms short-term
solvency. It indicates the availability of current assets in rupees for every one
rupee of current liability. A ratio of greater than one means that the firm has
more current assets than current claims against them Current liabilities.
INFERENCE Solvency is increasing from the year 2012-13, which is a good
signal for the company however the company is a newly establish company and

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due to belongingness of insurance indusrty it will take certain year to reach on
ideal level
All the years company is having less than ideal ratio (i.e. 2:1)

2. Quick Ratio:
Quick ratio also called Acid-test ratio, establishes a relationship
between quick, or liquid, assets and current liabilities. An asset is a liquid if it
can be converted into cash immediately or reasonably soon without a loss of
value. Cash is the most liquid asset. Other assets that are considered to be
relatively liquid and included in quick assets are debtors and bills receivables
and marketable securities (temporary quoted investments).
considered to be less liquid.

Inventories are

Inventories normally require some time for

realizing into cash; their value also has a tendency to fluctuate. The quick ratio
is found out by dividing quick assets by current liabilities.
Quick assets
Quick Ratio =
Current Liabilities

Quick Asset = Current Asset Stock prepaid expense

INFERENCE Since the company is belonging to the Service sector and not
having any kind of stock with it. So it will equal to current ratio.

3. Cash Ratio:
Since cash is the most liquid asset, it may be examined cash ratio and its
equivalent to current liabilities. Trade investment or marketable securities are
equivalent of cash; therefore, they may be included in the computation of cash
ratio:
Cash + marketable security
Cash Ratio =
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Current Liabilities

Year

2011-2012

2012-13

2013-14

2014-15

Cash Ratio

2.118

1.7

1.816

2.36

Table No. 4.8(Cash Ratio during Year 2011 2015)

cash ratio
cash ratio
2.36
2.12
1.82

1.7

2011-2012

2012-2013

2013-2014

2014-2015

Graph No. - 4.9 Cash Ratio

INFERENCE: This Cash Ratio indicates that the capacity of the company to
realize current liabilities with its liquidity position. In the above Table the Cash
Position Ratio of Four Years (2011-2015). The Cash Ratio of EXIDE LIFE
INSURANCE has undergone many fluctuations. It started with high ratio at first
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by 2.118 in the year 2012; it was decreased to 1.7 by next year it was slightly
increased in next year to 1.81 again increase to 2.36 in the year 2014-15, So
after one decline company make it good in next years.

4. Net Working Capital Ratio:

The difference between current assets and current
liabilities excluding short term bank borrowings in called net working capital
(NWC) or net current assets (NCA). NWC is sometimes used as a measure of
firms liquidity. It is considered that between two firms the one having larger
NWC as the greater ability to meet its current obligations.

This is not

necessarily so; the measure of liquidity is a relationship, rather than the

difference between current assets and current liabilities.

NWC, however,

measures the firms potential reservoir of funds. It can be related to net assets
(or capital employed).

Net working capital (NWC)

NWC Ratio =

(Net assets (or) Capital Employed)

Year

2011-12
2012-13
2013-14
2014-15

Net

Working

Capital Net

Asset

(i.e. CA-CL)

FA + Working Capital

49750
561436
854322
1324085

220097
734277
991309
1428307

Ratio

0.226
0.765
0.862
0.927

Table no. 4.9 (Net Working Ratio from year 2011-15)

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NWC RATIO
1
0.93

0.9

0.86

0.8

0.77

0.7
0.6
0.5
0.4
0.3
0.2

0.23

0.1
0
2011-2012

2012-2013

2013-2014

2014-2015

NWC RATIO

Graph No. 4.10 Net Working Capital Ratio

INFERENCE: Net working capital has increase from 0.226 in 2011 to 0.927 in
2015, so this clearly shows that the firm has sufficient amount of working
capital.
5. LEVERAGE RATIO:
The short-term creditors, like bankers and suppliers of raw
materials, are more concerned with the firms current debt-paying ability. On
other hand, ling-term creditors like debenture holders, financial institutions etc
are more concerned with the firms long-term financial strength. In fact a firm
should have a strong short as well as long-term financial strength. In fact a firm
should have a strong short-as well as long-term financial position. To judge the
long-term financial position of the firm, financial leverage, or capital
structure ratios are calculated. These ratios indicate mix of funds provided by

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owners and lenders. As a general rule there should be an appropriate mix of
debt and owners equity in financing the firms assets.
Leverage ratios may be calculated from the balance sheet items to determine the
proportion of debt in total financing. Many variations of these ratios exist; but
all these ratios indicate the same thing the extent to which the firms has relied
on debt in financing assets. Leverage ratios are also computed form the profit
and loss items by determining the extent to which operating profits are
sufficient to cover the fixed charges.

1. Debt-Equity Ratio:
The relationship describing the lenders contribution for each
rupee of the owners contribution is called debt-equity (DE) ratio is directly
computed by dividing total debt by net worth:
Total debt (TD)
Debt equity ratio =
Net worth (NW)

2. Proprietary Ratio:
This ratio indicates that the proportion of total assets funded
by the owner or shareholders. It is calculated as under
Equity
Proprietary ratio =
Total Asset

A higher proprietary ratio indicates high sound

financial position of the company from the long term point of view because it
means that a large proportion of total asset is provided by equity and hence the
firm is less dependent on external sources.

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Year

Equity Share Current Asset

2011-12
2012-13
2013-14
2014-15

Capital
6993473
7994561
7995649
7996736

1937966
2804141
2636583
2920941

Fixed Asset
170347
172841
136987
104222

Total Asset

Proprietary

2108313
2976982
2773570
3025163

Ratio
3.32
2.69
2.88
2.64

Table No. 4.10 (Proprietary Ratio)

3.5
3
2.5
2
3.32
1.5
2.69

Propritary Ratio

2.88
2.64

1
0.5
0
2011-2012

2012-2013

2013-2014

2014-2015

Graph No.- 4.11 (Proprietary Ratio)

INFERENCE: - proprietary ratio is more than 1 every year which indicates that
all the assets are funded by the shareholders funds.

3. PROFITABILITY RATIOS:
A company should earn profits to survive and grow over a
long period of time. Profits are essential, but it would be wrong to assume that
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every action initiated by management of a company should be aimed at
maximizing profits, irrespective of concerns for customers, employees,
suppliers or social consequences. It is unfortunate that the word profit is looked
upon as a term of abuse since some firms always want to maximize profits ate
the cost of employees, customers and society. Except such infrequent cases, it
is a fact that sufficient profits must be able to obtain funds from investors for
expansion and growth and to contribute towards the social overheads for
welfare of the society.
Profit is the difference between revenues and expenses over a
period of time (usually one year). Profit is the ultimate output of a company,
and it will have no future if it fails to make sufficient profits. Therefore, the
financial manager should continuously evaluate the efficiency of the company
in terms of profit.

The profitability ratios are calculated to measure the

operating efficiency of the company. Besides management of the company,

creditors and owners are also interested in the profitability of the firm.
Creditors want to get interest and repayment of principal regularly. Owners
want to get a required rate of return on their investment. This is possible only
when the company earns enough profits.
Generally, two major types of profitability ratios are calculated:
Profitability in relation to sales.
Profitability in relation to investment.

1. Return on Equity (ROE):

Common or ordinary shareholders are entitled to the
residual profits.

The rate of dividend is not fixed; the earnings may be

distributed to shareholders or retained in the business. Nevertheless, the net

profits after taxes represent their return. A return on shareholders equity is
calculated to see the profitability of owners investment. The shareholders
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equity or net worth will include paid-up share capital, share premium, and
reserves and surplus less accumulated losses. Net worth also be found by
subtracting total liabilities from total assets. The return on equity is net profit
after taxes divided by shareholders equity, which is given by net worth:
Profit after taxes
Return on Equity =
Net Worth
ROE indicates how well the firm has used the resources of
owners. In fact, this ratio is one of the most important relationships in financial
analysis. The earning of a satisfactory return is the most desirable objective of
business. The ratio of net profit to owners equity reflects the extent to which
this objective has been accomplished. This ratio is, thus, of great interest to the
present as well as the prospective Shareholders and also of great concern to
management, which has the responsibility of maximizing the owners welfare.
The return on owners equity of the company should be
compared with the ratios of other similar companies and the industry average.
This will reveal the relative performance and strength of the company in
attracting future investments.

Year
2011-12
2012-13
2013-14
2014-15

Profit After Tax

-428090
120235
689493
998430

Equity
6993473
7994561
7995649
7996736

Table No. 4.11 Return on Equity

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ROE
-6.12%
1.50%
8.62%
12.49%

ASMIT
15
12.49

10

8.62

5
ROE

1.5
0
2011-2012

2012-2013

2013-2014

2014-2015

-5
-6.12
-10

Graph No. 4.12 Return on Equity

INFERENCE: Return on equity ratio was -612%, 1.50, 8.62 and 12.49% in
respective year of 2012, 2013, 2014 and 2015 so the company achieved
maximum Return on equity ratio in 2014. It means company earning higher
year by year.

2. Earnings per Share (EPS):

The profitability of the shareholders investments can also be
measured in many other ways. One such measure is to calculate the earnings
per share. The earnings per share (EPS) are calculated by dividing the profit
after taxes by the total number of ordinary shares outstanding.
Profit after taxes
EPS =
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No of Shares

Year

Profit

2011-12
2012-13
2013-14
2014-15

Tax
-428090
120325
659493
998430

After No of Shares
802167
802167
802167
802167

Table No. 4.12 (Earning per Share)

Graph No. 4.13 (Earning per Share)

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EPS
-0.53
0.15
0.82
1.24

ASMIT

EPS
1.5
1.24
1
0.82
0.5

EPS
0.15

0
2011-2012

2012-2013

2013-2014

2014-2015

-0.5 -0.53

-1

3. Net Profit Margins:

Net profit is obtained when operating expenses; interest and
taxes are subtracted from the gross profit margin ratio is measured by dividing
profit after tax by sales:
Net Profit
Net Profit Margin =
Sales*
Note * = Here amount of premium account (technical) is taken as sale because it is
equal to sale in Insurance industry and comes after a calculation as prescribed
by IRDA
Net profit ratio establishes a relationship between
net profit and sales and indicates and managements in manufacturing,
administrating and selling the products. This ratio is the overall measure of the
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firms ability to turn each rupee sales into net profit. If the net margin is
inadequate the firm will fail to achieve satisfactory return on shareholders
funds. This ratio also indicates the firms capacity to withstand adverse
economic conditions. A firm with high net margin ratio would be advantageous
position to survive in the face of falling prices, selling prices and cost of
production.

Year

Net profit

Sales/

technical

Net

Premium Account

Margin

2012-13

120325

286306

0.42

2013-14

659493

816086

0.81

2014-15

998430

960742

1.04

Table No. 4.13 (Net profit Margins)

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Profit

ASMIT
1.2
1.04

1
0.81

0.8

0.6
NPM

0.42
0.4

0.2

0
2012-2013
2013-2014
2014-2015

Graph No. 4.14 (Net profit Margins)

INFERENCE: Net profit ratio was .42, 081, and 1.04 in respective year of 2013,
2014, and 2015 so the company achieved maximum Net profit ratio in 2014-15.

Some other technical Ratios related to the insurance industry:

1. Persistency Ratio:
Percentage of an insurance company's already written policies
remaining in force, without lapsing or being replaced by policies of other
insurers. Since persistency is a critical factor in the viability and success of
insurance companies, they constantly look for ways to increase this percentage

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2. Growth rate of Shareholders Funds:

Year

Growth

Rate

of
2011-12
2012-13
2013-14
2014-15

shareholder

fund
60.84%
9.43%
3%
21%

Table No. 4.14 (Growth rate of Shareholders fund)

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Growth Rate of Shareholder Fund

70

60.84

60
50
40

Growth Rate of
Shareholder Fund

30
21

20
9.43

10

3
0
2011-2012

Graph

No.

2012-2013

4.16

2013-2014

(Growth

2014-2015

rate

of

Shareholders

fund)

FINDINGS
On the overall evaluation at each and every aspect, the following
findings are found:

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(1) Current ratio of the Company is continuously increasing year by year which
is positive indication for the company that company is having ability to meet
short term liabilities, However the current level of Current Ratio is less than the
required level (i.e. 2:1 )
Cash ratio of the company is in green zone because in the year 2013-14
company is having 2.36 level of cash ratio which is very high in number as
compare to the last year 1.816 and the Company belongs to the insurance
industry so the level of cash ratio should be high at every time because at any
time company need to be settle a huge claims.
(2) EXIDE Life Insurance Is a Zero debt Company which means that there is
no Fix burden on the company to pay interest every year, The proprietary ratio
of the company is on declining phase which is not a positive signal for the
company, however it is more than 1 every year it means that the all assets are
arrange from the funds of equity as it is zero debt company so all the assets are
purchase from the funds of equity.
(3) Profitability part of the Company is performing very well. The company was
registered in the March 2008 and the impact of that is showing on return on
equity share holder it was negative in year 2011-12 by 6.12% and after that
company makes a good U turn and now having ROE 12% which is very early
growth for Insurance Company. Same with the EPS it was also negative in the
beginning but after that it started improving and now Rs.1.24 per share.
(4) In the Insurance industry the main problem for the companies are to manage
their NPAs But EXIDE Life Insurance is having Zero NPA till now which is
very positive for the company.

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(5) Fixed Asset of the company are not showing a good numbers because in the
year 2011-12 it was 170347000 but in year it is only 104222000, there is a 38%
decrease in the fixed assets of the company.
(6) The Commission Ratio paid to the shareholder was 8.19% in 2011-12 and
8.68% in 2012-13 and 11.16% in 2013-14 and 8.28% in 2014-15, so the
company performed very well for continuous three year however in the 2014-15
it was declined.

SUGGESTIONS

Company is the situation of the loss, However it a new company so

losses are usual and the Company belongs to the Insurance business in

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which a long period required to come to the profits but still company
should try to minimize the losses.

Ratio analysis is immensely helpful in making a comparative of the

financial statement for several years.
Cash Amount Available in the Balance Sheet of the Company is less than
the required because as the nature of the business, An Insurance Company
should require a higher amount of Cash balance in its Accounts to meet
out the Claim Settlement requirements of the Cash.

Fixed Assets of the Company is decreasing, EXIDE Life Insurance is a

newly established Company and should require increasing the fixed
Assets of the Company for future Growth prospective.

As the deposits are increasing in very low rate as compare to the other
Insurance Sector Companies, Company should require working on the
Marketing of the product.

Company is adopting a good policy to get it in a safe Zone and reach to a

breakeven point in 5 years of Incorporation, Which is very good as
compare to another Insurance Companies.

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Discontinued policies are increasing, Discontinuation of the policies is
considered as a main drawback factor in the Insurance Sector Company
should work on it.

Products available with company are less comparatively less preferred by

the clients, in some area company dont have the product e.g. Health
Insurance, Retirement plan.

Company is Carrying a Loss since incorporation and claiming the set off
of the carry forward losses, Company should try to finish that loss
because this loss is over shadowing the profits earned by the company in
the current year.

CONCLUSION
EXIDE Life Insurance is consistently driving product and service innovations to
cater to the need based priorities of Indian masses and help them enjoy the
goodness of life. Despite challenges, we have expanded our customer reach,
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strengthened our Operations, and developed a range of innovative savings and
protection Solutions to address evolving customer aspirations. As we strengthen
our industry presence, we are inspired to do more. We are driven by our belief
to touch and transform peoples lives and create value for all stakeholders.
EXIDE Life Insurance is a newly started Insurance Company and trying their
best to get in a positive position since it belongs to Insurance business. It takes a
lot of time to recover the cost of starting of business.
However EXIDE Life Insurance achieved Break Even in Year 2014 and on
moving to generate profits. Company is doing good business because the
premium received by the Company is increasing year by year and customer of
the Company is also satisfied with the product of the Company because
Persistency Ration is regularly increasing now it is 78% which is very high than
other insurance companies.
In the Product wise Company is only in Life Insurance and to success in
competitive business Company requires to start more products like in retirement
plan, Health Insurance, Low Cost Accidental Insurance etc.

BIBLIOGRAPHY
Text Books
(1) The Institute of Company Secretaries of India, Company Accounts, Cost
and Management Accounting, July 2010 Edition.
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(2) DK Goyal and Shelly Goyal, Financial Accounting, Fifth Edition, 2011,
Arya Publications.

(3) Financial management, I M Pandey, 10 th edition, Vikas publishing house

Pvt. Ltd

(4) Accounting for management, S N Maheshwari, S K Maheshwari, Vikas

publishing house Pvt. ltd.

Websites
www.exidelife.in
www.investopedia.com
http://en.wikipedia.org/wiki/EXIDE_Life_Insurance

References:

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