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VOLTAS LIMITED
For the subject Of Accounting for managers Submitted
In the partial fulfillment of MBA programmer 2010-12
Submitted to Mrs. Disha bhagat (assistant professior) K.P Patel school OF mgt & computer studies
Submitted by
SANDIP. A. BHAVSAR
Roll no. 39
As a student of business administration have prepared the following project report in the practical fulfillment of the course requirement on practical studies. This report include analysis of balance sheet, profit and loss A/c, trends analysis as well as types of ration are calculated in this report, it shows the clear picture of the companys liquidity and current position. The objective of preparing this report to know about its financial statement and accounting policies. It creates difficulties and challenges for the management student in the business world. It is golden opportunity for me to present and prepare this report.
In the MBA first semester, I have to prepare project report on VOLTAS LIMITED the project report is shows whole financial picture of the company. Behind this project report same person give me the ideas, guidance, inspiration for the preparing this project report. I take opportunity to thank to my respected director sir, Mr. M.S.TRIVEDI SIR, me to prepare this project report I m also thankful to PROF. DISHA MADAM for her best help in suggestions, ideas and inspiration for completing this project report.
No.
Particular
Page no.
1. 2. 3. 4. 5. 6. 7.
Company profile Ratio analysis Table of ratio Horizontal profit & loss A/c. Vertical balance sheet Trends analysis Conclusion
5 9 32 33 34 36 38
Name of the company:VOLTAS LIMITED COMPANY Address of the company:Voltas house A Dr Baba sahib ambedkar road Chinohpkli Mumbai 400033 Board of director:Chairmen ishant hessian Managing director A son Directors Nasser manger NJ jhavari SD khulkarni Ravikant N.D. khurody N.N. Tata
Bankers name:State bank of India Bank of India Punjab national bank Citibank N.A BNP Paribas Export import bank of India ABN- ammo bank N.V Company secretarys name:V.P military
Auditors name:-
Products name:-
Electro mechanical projects & services Engineering products & services unitary Cooling products for compared and commercial use.
Metro polis FZE. VIL oversees Enterprises B.V Voice Antilles N.V Weathermalar limited Auto Akron limited Universal comfort products pvt ltd
Human resources capabilities are key sources to the company competition advantage. The company strengthened its producers of the talent acquisition development and retention in to gram itself to for expansions Voltas achievements have been match possible because of the employ addiction and commitment.
Meaning:A ratio is a define as an inculcated quitrent of two mechanical expressation and us the relationship between two or make valuable it can be measured in terms of percentage (%) proportion (:) or in times. The important and use of ratio has increase and become popular. During last few years only of prospects insulates creditor and earn mgt if relationship between various are related with items in this financial statement an established. They can provide useful to judge accurately the financial health and ability of business of make profit this relationship between two items of financial statement is known as a ration.
Utility:-
1. Profitability:The gross profit ratio, net profit ratio and ratio of return on investment give a good idea of the profitability of the business on the basis of the ratio ingested get an idea about the overall of effeminacy of the business.
2. Liquidity:The current ratio, liquid ratio, acid test ratio or quick ratio will tell whether the business will about to meet its current liabilities and when they mature.
3. Efficiency:-
The turnover ratio are excellent guides to because the efficiency of the managers. The stock turn over will indicates the efficiency collection department and asset turnover those the efficiency with which the asset are use in the business.
4. Inter firm comparison:This is inter firm comparison which shows the strength and weakness of the firm s compare to the other firm and will 9indicates corrective measures.
5. Useful for budgetary control:Regular budgetary reports are prepared in a business were the system of budgetary is in use if various ratios are presented in this report it will give a fairly good idea about various aspect of financial position.
A. Gross profit ratio:The ratio measured the gross earning of the company as compared to its net sales if the ratio is less it show the inefficiency of companies management.
Formula:-
Gross profit =
*100
2010
2009
2008
*100
253.68 3044.54
*100
8.33%
Interpretation:The gross profit ratio of Voltas at the end of 31-3-2009 is 6.58%. This shows when the sales are 100 against which gross earning is 6.58. it also shows that the sales is 100 against which gross earning is 6.58.it also shows that the margin of 6.58 rupees is available for a sale of every Rs 100 from which operating exp of business are to be recoververed. The gross profit ratio of Voltas of the end of 31-3-2010 is 8.74% this shows that when the sales are 100 gross profit is 8.74 Rupees. This means thats there is increase in gross profit ratio of current year as compared to previous year.
This ratio is useful to measure the overall profitability performance of the business and shows the efficiency of the company to earn amount of make profit earned on its net sales. Higher the ratio better is for the company.
Formula:-
Interpretation:-
The net profit ratio of Voltas the end of 31-3-10 is 7.57%. This means when the sales are 100 the net profit is Rs.7.57. The net profit ratio of Voltas tells that the ratio tells that ratio of sales revenue left to proprietors is manually 100 compared to previous years. This ratio therefore suggests that a particular share of selling price is absorbed by cost of sales and other operating expenses and the remainder is deft for the owners of the business..
C. current ratio:it is also known as working capital asset which is the mesure of capability if the company to pay of the liability , which are dui within 12 months period as compare to its current assets. Idle ration is 2:1 Chore commission ratio is 1.33:1
Formula:-
Current ratio =
1.24 times
1.21 times
0.12 times
Interpretation:The companys current ratio is 1.24 for the year ended 2008-2009-2009 1.21,0.12 respectively this indicates that for every Rs 1 of current liability available rs 1.24,1.21,0.12 current assets. This means the better liquid position of the company and suggesting a very comfortable one which shows increase as compared that previous year.
D.
return on net worth:the ratio measured the net profit earn the equity share holders funds it is the measured overall profitability of the company after discharging cost of borrowed capital and income tax payable to the government . it is also known as return on equity ratio.
Formula:-
2010
2009
2008
291.42 995.22
*100
195.13 728.99
*100
180.87 538.32
*100
29.28 %
26.76 %
33.59 %
Interpretation:-
In the year 2009 the equity share holders return is 26.76% and in the year 2010 is29.28 % it shows the higher ratio indicates that higher dividend more internal accruals means here 2009 is 26.76 % and in the year 2010 is 29.28 % it shows increase in the ratio so it indicates batter growth prospects.
E. Debt equity ratio:It measures the portion of debt taken by the company as compare to the owners funds. Formula:-
Debt Equity
0.57 times
3.88 times
1.44 times
Interpretation:Debt equity ratio of Voltas at the end of 31st march 2008 is 1.44 times this means when owners have invested rs 1 in the business against that 1.44 is the borrowed from the out sliders creditors. Debt equity ratio of Voltas at the end of 31st march 2009 is 3.88 this means that when share holder invested rs1 in the company that 3.88 borrowed from the out sides creditors. Debt equity ratio of the current year is increase in previous year. Debt equity ratio of Voltas at the end of 31st march 2010 is 0.58 that means when owner have invested rs 1 in the business against that 0.58 borrowed from out sides creditors, debt equity ratio of the current year decrease in the previous year. That means long term liability has increase to same extent.
F. Return on share holders funds:It measures the return (that is a net profit after tax) that the share holders get as compare to their investment. Formula:-
Return on share holders funds = net profit after tax Share holders fund
2010
2009
2008
344.22 3307
*100
252.59 3307
*100
208.37 3307
*100
10.40 %
7.63 %
6.30 %
Interpretation:For every rs.100 of the equity share funds the net profit after tax earn by the compared in the year 2008-09 and 2009-10 are 7.63% & 10.40 % respectively. This situation is representing that 2008-09 year company maintain it return on share holders trying to the minimize the companies funds.
G. Stock turnover ratio:The number of times the average stock is turned over during the years is known as the stock turnover. It is computed by dividing the cost of goods sold by the average stock of the year average stock is the average of the opening and closing stock of the year. The ratio is the very important to judging ability of the management with which it can move the stock. The higher the turnover ratio, the more profitable the business would be.
Formula:-
2010
2009
2008
4144.81 4541.79
3767 4033.29
2790.86 3044.54
0.91 times
0.93 times
0.91 times
Interpretation: Stock turnover of the volts at the end of the 31st march 2009 is 0.93 the stock is turn over during the year the sock turnover of the Voltas at the end of 31st march 2010 is 0.91. it means 0.91 times the stock is the turn over during the year as the ratio decrease it indicates accumulation of slow moving absolute and low quality goods which is the danger signal to the management.
Formula:-
2010
2009
2008
Interpretation: Fixed asset turnover of the Voltas at the end of 31st march2009 is 13.72 the fixed asset is turn over during the year the fixed asset turnover of Voltas at the end of the 31st march 2010 is 14.82times it means 14.82 times the fixed asset is turn over during the year , as the ratio increase it indicates accumulation of the fast moving absolute and high quality assets.
I. Earnings per share(EPS):It measure the earning available to the equity share holder as compare to their investment done per share, higher the earning per share better for the company and as well as the shareholders because the many investors always looking better financial position of the company.
Formula:-
Earnings per share = P.A.T pref share dividend No. Of equity share
2010
2009
2008
Interpretation:-
Earning per share means earning on the invested each rupees here the companies share is 2008-09 &2009-10 was 5.90 & 8.81 similarly which increase from the previous year it indicates we can conclude that companies capital productivity has increase and it is batter for the company.
J. Debt service coverage ratio:It measures the companys capacity to meet the installment and interest of the liability. Higher is the ratio found well for the company.
Formula:-
2010
2009
2008
Interpretation:-
Interest coverage ratio of the Voltas at the end of 31st march2009 is 1.84 and in the end of 31st march 2010 is 1.93 times it indicates that current year ratio is increase in the previous year that means greater the ability of the company to service interest and less financial risk.
SUMARRY OF RATIO
NO.
RATIO
200 8
8.33
200 9
6.58
201 0
8.74
1.
2.
6.84
6.26
7.57
3. 4. 5. 6. 7. 8. 9. 10.
Current ratio Return on net worth Debt equity Stock turnover ratio Fixed asset turnover ratio Earnings per share Debt service coverage ratio Return on share holders fund
HORIZONTAL PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2010
FOR THE YEAR ENDING 31ST MARCH 2010 Sales and services Loss-excise duty Net sales and services Other income Cost of sales, services EBIT Financial items Depreciation on the fixed asset EBT Provision for tax
2008 Rs. _ _
2009 RS.
2010
_ _
_ _
_ _
_ _
_ _
4541.79 100
4033.29 100
3044.54 100
396.98 4144.81
8.74 91.25
265.62 3767.66
6.58
253.68
8.33 91.66
93.41 2790.86
449.25 157.42
9.89 3.46
311.22 116.08
7.71 2.87
280.04 99.17
9.19 3.25
EAT
291.42
6.41
195.13
4.83
180.87
5.94
Particulars
`marc h 2008
Incdec 200809
Incdec 200910
Sources of fund Eq share capital Reserve & surplus Loans & funds Secured loans Total Uses of funds Fix assets Gross block 12.46 4.24 306.39 293.93 263.02 30.71 11.48 19.08 128.44 47.67 80.77 169.4 (109.3 85.14 4 6) 33.07 33.07 33.07 -
Accumulated 139.31 130.53 122.28 dep Net block Capital work in progress Investment Net C.A 7.61 9.65 9.75
8.25
6.75
339.97 235.30 267.93 (32.1 11.99 104.17 44.18 3) 0.59 54.39 2.17
Current 2.569.5 2515.0 1580.1 934.8 asset,loan&a 0 4 5 9 dv --C.L Total net C.A Total Notes Bookvalue of 343.49 239.32 268.44 (29.1 inv. 2) Market value of inv. Contingent liability 115.60
2069.8 2066.4 1421.5 644.8 45.36 4 5 9 6 499.66 448.59 158.56 290.0 182.9 3 2
3.39 51.07
0.16 11.38
1014.3 857.44 585.99 271.4 46.33 156.87 18.30 1 5 1085 104.57 45.53 82.13 54.74 245.3 9 21.15
PARTICULA RS
Equity share capital Index Reserve and surplus Index Secured loan
2008
2009
2010
33.07 1 695.92 1.38 128.44 6.37 293.93 1.12 130.53 1.07 163.39 1.16 9.65 0.51 255.80 0.95 2515.04
33.07 1 962.15 1.90 47.67 2.50 306.39 1.16 139.31 1.14 167.07 1.90 7.67 0.41 339.97 1.97 2569.50
Gross block Index Depreciation accumulated Index Net block Index Capital W i P Index Investments Index Current assets Loan & advances Index Current liabilities & provision`
1 1421.54
1.59 2066.45
1.63 2069.84
1 158.56
1.45 448.54
1.46 499.66
9.14
3.15
Due to the prepare this report I learn so many thing and points from this report.
I get a detail knowledge about the company ratio analysis horizontal and the profit and loss accounts and vertical balance sheet etc and I study company level knowledge and environment.
The company Voltas limited is the kindly famous in the market and has earned good name. Company
Providing the batter quality products, and services. Most of all the ratio of company good like profitability, financial etc.
Company should try to the maintain this situation and improve in the future and stay in the market for longer time period.
BILIGRAPHY
I collect all information to prepare this project report for company web site www.voltas.com References books of accounts ambries gupta.