PROJECT REPORT
ON
FINANCIAL ANALYSIS at WIMCO
To
Khandelwal college of Management, Science & Technology
Submitted In Partial Fulfillment of
M.B.A. Programme
(2008-2009)
Submitted by:
Mr. Dharmendra Singh
MBA (Finance)
Abstract
In this project an attempt has been made to develop a financial position of the company. In this project use have develop a database financial ratio. They’re caused and their remedies with the help of company data. This database can be connected to the Internet use of personal application programming. We have developed financial ratio in this regard. The financial ratio makes use of position of finance in a WIMCO company.
This project would avoid complicated ratio searching on paper and easy access to the detail related to financial ratio.
The main objective of the project is to analysis the financial performance of WIMCO of two-year i.e.2007 & 2008 with the help of the provided financial data Balance Sheet and Profit & Loss account of WIMCO.
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ACKNOWLEDGEMENT
As an important part of our study MBA course. We were required to gob for Vocational training under on job practical training for four weeks in any reputed organization. So for completing the training, I joined the WIMCO unit which is the galaxy in the sky of fertiliser and was established on 3rd Nov. 1967 as a growing plant among as a Fertiliser Industry.
During the period of my training, I feel that I am very lucky because I got the opportunity to study (on the job training) in such a big and reputed organization and I have also guidance of very excellent and experienced Officers and Employees.
I would like to express my great thanks to Mr. Sunil agrawal (Accounts Officer).
Staff of Finance Department specially
Mr. Shyam Sundar Saxena, who provide me required information and relevant data time to time during my training period to complete my project report.
Once again extend my thankfulness to WIMCO.
Dharmendra Singh
MBA
KCMT
BAREILLY
VISION & MISSION OF A COMPANY
VISION 2010
In order to maintain the sustained pace of remarkable growth being achieved under mission-2005 the society is in the process of formulating another growth plan “VISION 2010” which aims at:
1. Attaining an annual turnover of Rs.15000 crore by 2010
2. Installation of Ammonia and Urea plants including acquisition of fertilizers units.
3.Backwards integration to meet feedstock requirements such Phosphoric acid
4. Generation of Power
5.Exploration /Distribution of marketing of Hydrocarbons.
6.Value addition to agro-products and marketing.
7. Manufacturing of Petrochemicals, Banking and Financial services.
8. Information technology and IT enabled services.
9.Production and marketing of micronutrients seeds, biofertilizers, pesticides etc.
MISSION
IFFCO mission is “to enable Indian farmers to prosper through timely supply of reliable, high quality agricultural inputs and services in an environment sustainable manner and to undertake other activities to improve their welfare”
At IFFCO thirst forever improving the service to the farmers and member cooperative is insatiable, commitment to quality is insurmountable harnessing of mother earth’s bounty to drive hunger away from India in an ecologically sustainable manner is the prime mission.
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Dear Colleagues, This ‘bumper’ issue says so much, what more to say! But one tries Let’s begin with business. As soon as the initial feelers of recovery were felt, the partners got into the driver seat. Be it strategizing at the APMM and internal meetings, enhancing visibility through seminars or saying a sincere thank you through our dinners – we were on the move! And this year the APMM ...
All the IFFCO cherishes in exchange is an everlasting smile on the face of Indian Farmers who form the moving spirit behind this mission.
APPROACH
To achieve our mission, IFFCO as a Co-operative Society undertakes several activities covering a broad spectrum of areas to promote welfare of member cooperatives and farmers. The activities envisaged to be covered are exhaustively defined in IFFCO’s Bye- laws.
COMMITMENT
Our thirst for ever improving the services to farmers and member co-operatives is insatiable, commitment to quality is insurmountable and harnessing of mother earth’s bounty to drive hunger away from India in an ecologically sustainable manner is the prime mission.
IFFCO, today is a leading player in India’s fertilizer industry and is making substantial contribution to the efforts of the Indian Government to increase food-grain production in the country.
OBJECTIVES OF IFFCO
The main objectives of the Society are as follows: –
□ IFFCO is a cooperative institution of the farmers by the farmers.
□ Strengthening cooperation distribution system.
□ Educating and guiding the farmers.
□ Promoting nations growth through modern farming techniques.
□ Improving agriculture productivity, through balance fertilizer applications.
□ To promote the activity for enriching the life of rural.
□ To achieve self reliant and self generated economy.
INVESTMENTS
Godavari Fertilizers & Chemicals Limited.(GFCL)
The society has invested Rs. 8.25 crore in Godavari Fertilizers & Chemicals Limited. Which accounts for 25% of the paid up share capital of Rs. 32 crore of the Company.
Indian Potash Limited (IPL)
IFFCO holds an investment of Rs. 2.68 crore in ICL with the shareholding of 34% in the paid up share capital of Rs. 9.53 crore of Indian Potash Limited.
Industries Chiniques Du Senegal (ICS)
IFFCO had entered into an agreement during the year 1982 with ICS Senegal for setting up a project for manufacturing Phosphoric Acid wit the production capacity of 3.13 MT. The Government of Senegal was amongst the other Co-promoters of ICS along with IFFCO. IFFCO had invested equity of US $ 10 million till 2006.
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IFFCO – TOKIO GENERAL INSURANCE COMPANY LIMITED. (ITGI)
IFFCO – TOKIO GENERAL INSURANCE COMPANY LIMITED was established as a joint venture company in the year 2000 for undertaking general insurance business in India.
Total paid up share capital of ITGI of Rs. 100 crore in which 51% share is held by IFFCO by investing Rs. 51 crore.
OMAN India Fertilizer Company
IFFCO along with the other joint venture partners completed the OMAN India Fertilizer Company IFFCO had 25% Shareholding amounted US $ 80 Million.
Kisan International Trading Dubai
IFFCO has set up a special purpose vehicle (SPV) VIZ Kisan International Trading as A fully owned subsidiary on April 16 2005 with equity of UAE Dirhans 1 Million.
Acquisition of Paradeep Unit
IFFCO acquired the phosphoric unit at Paradeep in Sep. 2005 The plant has started complex fertilizer production in April 2006.
IFFCO also received several major awards during the year, namely:
➢ National safety award by IFFCO Aonla as runner up during the year 2004 based on longest accident free year.
➢ Golden peacock environment management award-2005 by IFFCO Aonla (certificate of commendation)
➢ National award foe excellence in angry management-2005 by IFFCO Phulphur by Confederation of Indian industry (CII)
➢ National Energy conservation Award-2005 by IFFCO Phulphur (Certificate of Merit in the Fertilizer Sector)
➢ National award for excellence in water management –2005 and innovative project award to IFFCO Phulpur by Confederation of Indian Industry
➢ Certificate of honor” for working more than one million man-hours accident free and lowest disabling injury index for IFFCO Kalol and for working more than 3 million man-hours (accident-free) during 2004 from Gujrat safety council for Kandla.
➢ First position for the ‘Best Horticulture maintained Plant” by IFFCO Kalol from Gujrat Horticulture Association.
➢ FAI’s Best Overall Production Performance Award for 2004-2005 for Complex Fertilizer Plant to Kandla 2004.
➢ First prize for Corporate Film from Public Relation Society of India.
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HIERARCHY OF WIMCO
Rating assigned by different Rating Agencies to the Society
Rating assigned by CRISIL
1. Rating for Governance and Value Creation (GVC) Practices of IFFCO:
CRISIL has assigned a “GVC Level 2” rating to IFFCO. This rating indicates that the capability of the Society with respect to wealth creation for all its stakeholders, while adopting sound corporate governance practices, is High.
2. Rating for the Rs. 100 crore Commercial Paper Program of IFFCO.
CRISIL has assigned a “P1+” (“P One Plus”) rating to IFFCO’s Rs. 100 crore Commercial Paper Program. This rating indicates that the degree of the safety with regard to timely payment of interest and the principal on the instrument is very strong.
3. Rating for the Rs. 400crore Bonds Program of IFFCO.
CRISIL has assigned the rating on the IFFCI’S Long Term Borrowing Program to AA/ Stable. The rating indicates high degree of safety with regard to timely payment of interest and principal on the instrument.
Rating assigned by FITCH
1. Rating for the Rs. 100 crore Commercial Paper Program of IFFCO
FITCH Ratings has assigned a National Short Term Rating of “F1+” (F One Plus) to IFFCO ‘s Rs. 100 crore Commercial Paper Program.
2. Rating for Long Term Borrowing Program of IFFCO.
FITCH Ratings assigned National Long Term Rating of “AA+” (Double A Plus) to the Long Term Debt Program of IFFCO. The out look on the Long Term Rating is “Stable”
ABOUT AONLA UNIT
The flagship of IFFCO, Aonla Unit is located in the Gangetic Plains of Uttar Pradesh in Bareilly district about 28 Km. Southwest on Bareilly-Aonla Road.
Aonla unit, an Ammonia-Urea complex, is comprised of two phases; Aonla- I and Aonla-II. The total capacity of Aonla unit including both phases is 8,91,000 MTPA for Ammonia and 14,52,000 MTPA for Urea having two streams of Ammonia and Four streams of Urea. The natural gas from HBJ pipeline being supplied from Bombay High is the feedstock for the plants. Aonla-I was commissioned in May 1988 and Aonla-II in December 1996. Both Aonla-I & II units are achieving average annual capacity utilization of 116%.
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IFFCO Aonla unit is one of the most efficient and quality-wise as well as environment oriented unit so that M/s KPMG Peat Marwich, a quality registrar has certified it as ISO: 9002 unit and M/s BVQL London has accredited as ISO: 14001 unit.
At present 1150 Employees are enrolled in the pay roll of the unit
PLANTS OF AONLA UNIT
There are mainly four plants in the unit namely:
1. Ammonia Plant
2. Urea plant
3. Product Handling Plant
4. Steam and Power Generation Plant
1. AMMONIA PLANT
There are two streams of Ammonia plants having the capacity to produce 2×1520 MTDP of liquid ammonia. The technology is based on Haldor Topsoe, Denmark process with Natural Gas and Naphtha as main raw material
2. UREA PLANT
There are four streams of Urea Plant having the capacity to produce 4×1310 MTPD OF Urea Fertilizer. The technology is based on Snamprogetti, Italy on Ammonia stripping process.
3. PRODUCT HANDLING PLANT
Product handling plant is composed of Urea storage known as Silo and packing and transport activities. Two silos of 45,000and 30,000 MT capacity have been provided to Urea product to ensure continuous urea production even if it is not taken off due to non- availability of rail wagons or seasonal demand fluctuations.
4. STEAM AND POWER GENERATION PLANT
To meet the continuous power supply needs of the main plants, captive power plant and stem generation facilities have been provided. In this plant, two gas turbines each having the capacity of 18MW alongwith heat recovery steam generation unit has been provided to cater to the plant needs of power and steam. Additionally, HRU unit of Ammonia –II add to the steam supply of the complex.
COMMISSIONING
AONLA – I Ammonia Plant May 15, 1988
Urea Plant May 18, 1988
AONLA – II Ammonia Plant Nov. 16, 1996
Urea Plant Nov. 16, 1996
INVESTMENT
AONLA – I Rs. 651.6 Crore
AONLA – II Rs. 954.7 Crore
COMMERCIAL PRODUCTION
AONLA – I July 16, 1988
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AONLA – II July 25, 1996
PRODUCT CAPACITY
AMMONIA 891000 Tones per Annum
UREA 1452000 Tones per Annum
TECHNOLOGY
AMMONIA PLANT Haldor Topsoe, Denmark
UREA PLANT Snamprogetti, Italy
LOCATION
State Uttar Pradesh
State Capital Lucknow
Distance from Lucknow 280 Km.
Distance from New Delhi 260 Km.
Nearest Airport New Delhi
Railway Station Aonla (10 Km. From the Plant)
Road Plant is In Bareilly – Aonla Bareilly highway.
Area under Plant 260 Hectares
Area under Township 220 Hectares
ORGANISATION CHART AT AONLA UNIT
FINANCE AND ACCOUNTS DEPARTMENT
Money or capital being a scare as well as crucial resource in the working of any organization, needs to be given prime importance. The financial resources have been planned and controlled in a proper and continuous manner. As among the most crucial decisions of a firm are those that relate to finance. Finance & accounts from an integral part of any organization. Proper and smooth functioning of this section is very vital for the organization to survive and grow.
Finance functions are of two types:
❖ Managerial finance function
❖ Routine finance function
Managerial finance functions require skilful planning, control and execution of financial activities.
Routine finance functions on the other hand, do not require a great managerial ability to carry them out. They are chiefly and incidental to the effective handling of the material finance functions.
Finance & Accounts Deptt. At A Glance
The Finance & Accounts Department. of IFFCO, Aonla is divided into 3 sections, to facilitate smooth and easy functioning and control.
Organization Structure
Line Of Control in Finance &Account Department
The various area covering under the preview of 3 subsections are as follows:
BOOKS SECTION
This section basically deals with accounting function, maintenance and keeping of records.
The various functions include :
❖ Books : Preparing and Maintaining balance sheets.
❖ IFCC (Fertiliser Industries Coordination committee)
⇨ Costing & Pricing Cells
⇨ Reporting
PAY ROLL SECTION
Aonla Unit undertakes processing of salary and other staff related payments of all employees through Human Resource Management System (HRMS).
It is an integrated package based on Oracle DBMS. The System integrates Personnel & Administration Department and Finance & Accounts Department.
Simultaneously, Financial Accounting System (FAS) which is also based on Oracle DBMS has been launched in F&A DEPARTMENT through which General Ledger Sub Ledger of Employees are maintained and Trial Balance and Financial Accounts are generated. There is also inter- relation of HRMS and FAS so that cash payment/receipt vouchers, Bank Payment Vouchers and Journal Vouchers generated in HRMS are automatically posted online to Payroll Section of Finance & Accounts Department.
Taxation Section
As per the status and operations of the society, It deals with the following Taxes:-
➢ Central Excise Duty
➢ Income Tax
➢ Service Tax
➢ Sales Tax
Central Excise Duty
As we know that this duty is charged by Central Government on the goods manufactured. IIFCO mainly produce ammonia and urea at Aonla plant. So duty on ammonia is charged. In this relation monthly production report is prepared and all documents and accounts are prepared by the Finance & Accounts Department. The duty is deposited in the Government bank account on the 5th day of the month.
EXCISE Duty is not charged on production of Urea.
ROLE OF THE FINANCIAL MANAGEMENT
Finance is life blood of business that’s why the finance function assumes more significance because it plays important role in successful performance of all operational & managerial function though there are other basic function also like production, marketing etc.
The Industrial development of the last 60 years or so has made finance and financial management an indispensable part of business management.
“A firm’s success &even survival, its ability and willingness to
Maintain production and to invest in fixed or working capital are to a very considerable extent determined by its financial policies, both past and present.” In fact the financial manager is now being placed at central focal point of modern corporate organization due to organizational changes &revolutionary changes in financial management .In addition to Ezra Soloman
“Financial Management is properly viewed as an integral part of overall management rather than as a staff specialty concerned with fund raising operations. In addition to raising funds financial mgt. Is directly concerned with production, marketing & other functions with in an enterprise whenever decisions are made about the acquisition or distribution of asset,”
It is often said that now a days, financial mgt. Watches &cases various development activities liquidity & profitability of the firm.
Few activities to be cased for:-
• High cost of financing the risky investment due to capital intensive environment.
• Diversification by the firm of various business, markets & products.
• A high rate of inflation affecting firms forecast and planning.
• Technological changes at high speed & need for more expenditure on R& D.
• Flow of information at rapid speed causing the use of high speed computers.
Last but not the least, the sound financial decision not only affect the production and distribution but also affect the organization’s profitability and liquidity.
FINANCIAL STATEMENT ANALYSIS
Financial statement provides a view of the financial position and operation of a firm. The focus of financial analysis is on key figures in the financial statement and the significant relationship that exist between them.
The analysis of financial statement is a process of evaluating the relationship between component parts of financial statement to obtain a better understanding of the firm’s position & performance
.
Steps in financial analysis:.
• To select the information relevant to the decision under consideration from the total information contained in the financial statement.
• To arrange the information in a way to highlight significant relationship.
• To interpret & draw inferences & conclusion.
In brief, financial analysis is a process of selection, retention and evaluation
RATIO ANALYSIS
Ratio analysis is a widely used tool of financial analysis. It may be defined as the systematic use of ratio to interpret the financial statement so that the strengths & weaknesses of a firm as well as its historical performance and current financial condition can be determined. Here, the term ratio refers to the numerical or quantitative relationship between two items/variables which are connected with each other in some manner. Ratio analysis makes the related information comparable.
Ratio may be expressed in either of the following ways:-
• In proportion: – In this form, the amounts of the two items are being expressed in a common denominator.
E.g.- current ratio as 2:1
Quick ratio as 1;1
• In times of coefficient:- In this form, a quotient obtained
by dividing one item by another item.
E.g.- 6times is the ratio between sales & stock.
• In percentage: – In this form, a quotient obtained by dividing one item by another is multiplied by 100 & becomes the percentage form of expression.
E.g.- Relationship between gross profit & sales may be expressed as 25%.
Financial Analysis Of IFFCO
1) Return on Capital Employed- It is also called “Return on Investment” or Rate of Return. It indicates the percentage of return on the total capital employed in the business. It measures the profit which a firm earns on investing a unit of capital. The Return on Capital expresses all efficiencies or inefficiencies of a business.
Return on Capital Employed: PBIT *100
Capital Employed
Particulars 2005-06 2004-05 2003-04
Profit before interest & tax 48,189.00 47,091.86 51,269.72
Capital employed 9,04,917.00 4,36,949.73 4,52,894.84
Return on capital Employed 5.32% 10.78 % 11.32 %
Capital Employed = Total Assets – Current Liability
Particulars 2005-06 2004-05 2003-04
Total Assets 10,41,076 5,47,433.95 5,43,138.61
(-)Current Liability 1,36,159 1,10,484.22 90,243.77 Capital Employed 9,04,917 4,36,949.73 4,52,894.84
2) Return on total resources – Return on total resources expresses the relationship between profit before tax and total resources of the company. Here total resources of the company means total assets excluding fictitious and nominal assets. This ratio is calculated with the point of view of investors who wants to know how their money has been invested in different type of assets of the company.
Return on total resources: PBT*100
Sales
Particular 2005-06 2004-05 2003-04
Profit before Tax 48,189.00 47,091.86 51,269.72
Total Assets 10,41,076.00 5,47,433.95 5,43,138.61
Return on total
Resources 4.64% 8.60 % 9.43 %
3) Expenses Ratio- Expenses Ratio is making over expenditure in respect of different items of expenses.
Administrative Expenses is Related to sales and expressed as percentage to sales.
Administration and Distribution Expenses- Adm.*100
Sales
Particular 2005-06 2004-05 2003-04
Adm. Exp. 68,666.72 63,356.47
Sales 9,94,293.00 7,22,403.00 5,91,957.00
Administrative Exp. 9.50 % 10.70 %
4) Inventory Turnover- This is ratio also called as stock turnover ratio or stock velocity. This ratio is calculated to consider the adequacy of the quantum of capital and its justification for investing in stock or Inventory. Inventory turnover is used to measure the efficiency of sales. Inventory turnover is the number of times obtained by dividing cost of sales by inventory.
Inventory Turnover ratio- sales
Inventory
Particular 2005-06 2004-05 2003-04
Sales 9,94,293 7,22,403.00 5,91,957.00
Inventory 1,51,964 93,150.65 1,02,056.05
Inventory Turn. Ratio 6.54 times 7.75 times 5.80 times
5) Debtor’s Turnover Ratio- It is also known as ‘debtor’s velocity’. Debtors constitute an important constituent of current assets and therefore the quality of debtors to a great extent determines a firm’s liquidity. This ratio is used by financial analysis to judge the liquidity of a firm. This ratio indicates the efficiency of the staff entrusted with the collection of book debts. The higher the ratio, the better it is, since it would indicate that debts are being collected more promptly.
Debtor’s Turnover Ratio- Sales
Debtors
Particular 2005-06 2004-05 2003-04
Sales 9,94,293.00 7,22,403.00 5,91,957.00
Debtors 47,440.38 32,459.94 46,946.10
Debtors’ turnover 20.96 times 22.25 times 12.60 times
6) Working Capital turnover-Net Current Assets also know as working capital instead of total current assets is being compared with the sales. This ratio indicates whether or not working capital has been effectively utilized in making sales. This ratio is calculated as follows-
Working Capital Turnover- Sales
Working Capital
Particular 2005-06 2004-05 2003-04
Sales 9,94,293 7,22,403 5,91,957
Working Capital 2,44,298 1,49,914 1,66,158
Working Capital Turnover 4.07 times 4.82 times 3.56 times
7) Fixed Assets Turnover- This ratio indicates the extent to which the investment in fixed assets contributes towards sales. It’s calculated by establishing the relationship between sales and fixed assets (net).
An increase in this ratio is an indicator of efficient work performance and decrease in the ratio speaks of improper investment in fixed assets.
Fixed Assets Turnover- Sales (net)
Fixed Assets (net)
Particular 2005-06 2004-05 2003-04
Sales 9,94,293.00 7,22,403.00 5,91,957.00
Fixed Assets 4,57,066.00 2,02,439.00 2,13,101.20
Fixed Assets Turnover 2.17 times 3.57 times 2.78 times
8) Current Assets Turnover-Current Assets Turnover attempts to measures the utilization and effectiveness of the uses of current assets or state over investment or under investment in current assets. It may be pointed out that over and under investment in current assets may indirectly affect the solvency of the concern. It’s the ratio between cost of sales and current assets.
Current assets turnover- Sales
Current assets
Particular 2005-06 2004-05 2003-04
Sales 9,94,293.00 7,22,103.00 5,91,957.00
Current Assets 4,74,898.10 2,60,398.54 2,56,402.05
Current Assets
Turnover 2.09 times 2.77 times 2.30 times
9) Total Assets Turnover- This ratio shows the relationship between Total assets and Sales of the concern. This ratio is calculated to know the utilization of total assets in working of the concern. Total assets are taken at the value shown at the end of the year as a whole. This ratio is used to judge the effectiveness of the use of the assets and to study the trend of over investment in assets or otherwise.
Total Assets turnover – Sales (net)
Total assets
Particular 2005-06 2004-05 2003-04
Sales 9,94,293.00 7,22,403.00 5,91,957.00
Total Assets 10,41,076.00 5,47,433.95 5,43,138.61
Assets Turnover 0.95 times 1.32 times 1.08 times
10) Capital Turnover- Sometimes the efficiency and effectiveness of the operation is judged by comparing the sales with the amount of capital invested in the business. Capital Employed is either equal to Shareholders Fund plus Long Term Loans or equal to Total Assets minus Current Liabilities. This is calculated by establishing the relationship between sales and capital employed.
Capital Turnover- Sales
Capital Employed
Particular 2005-06 2004-05 2003-04
Sales 994293.00 7,22,403.00 5,91,957.00
Capital Employed 904917.00 4,36,949.73 4,52,894.84
Capital Turnover 1.09 times 1.65 times 1.31 times
11) Current Ratio- The ratio of current assets to current liability is called current ratio. This ratio is an indicator of the firm’s commitment to meet its short-term liabilities. Current assets include cash and other assets convertible into cash during the operating cycle of the business. Current liabilities mean liabilities payable within a year’s time. An idle current ratio is 2:1.The ratio of 2 is considered as a safe margin of solvency. A very high current ratio would indicate the less efficient use of funds while a poor current ratio is a danger signal to the management.
Current Ratio- Current Assets
Current Liability
Particular 2005-06 2004-05 2003-04
Current Assets 474898.00 2,60,398.00 2,56,402.00
Current Liability 136159.00 1,10,484.00 90,244.00
Current Ratio 3.49:1 2.36:1 2.84:1
12) Quick Ratio- This ratio is also as ‘acid test ratio’ or ‘liquidity ratio’. This ratio is ascertained by comparing the liquid assets to current liability. The idle ratio is 1.This ratio is also an indicator of short-term solvency of the company. A comparison of current ratio to quick ratio will indicate the inventory hold-ups. For example, if two units have same current ratio but different liquidity ratio, it indicates over stocking by the concern having low liquidity ratio as compared to the concern, which has a higher liquidity ratio.
Quick Ratio- Quick Assets
Current Liability
Particular 2005-06 2004-05 2003-04
Quick Assets 3,22,933.68 1,67,247.35 1,54,345.95
Current Liability 1361559.00 1,10,484.00 90,244.00
Quick Ratio 2.37:1 1.51:1 1.71:1
Quick Assets- Current Assets- Inventory- Prepaid exp.
Particular 2005-06 2004-05 2003-04
Current Assets 4,74,898.00 2,60,398.00 2,56,402.00
Inventory 1,51,964.00 93,150.65 1,02,056.95
Quick Assets 3,22,933.68 1,67,247.35 1,54,345.95
13) Stock to Current Assets Ratio- This ratio expressed the relationship between Stock and Current Assets.
Stock to Current Assets- Stock
Current Assets
Particular 2005-06 2004-05 2003-04
Stock 1,51,964.32 93,150.65 1,02,056.05
Current Assets 4,74,898.00 2,60,398.00 2,56,402.00
Stock to Current
Assets 0.32 times 0.357 times 0.398 times
14) Net Worth to Total Assets Ratio- This ratio is also called ‘proprietary ratio’, because net worth is also known as proprietary fund. It indicates the strength of financial foundation of the concern and serves as measure of ultimate or long term solvency. This ratio is also used in the study of capitalization of a business concern.
Net Worth to Total Assets Ratio – Net Worth
Total Assets
Particular 2005-06 2004-05 2003-04
Net Worth 355539.00 3,30,115.25 3,10,958.64
Total Assets 1041076.00 5,47,433.95 5,43,138.61
Net Worth to
Total Assets 0.34 0.60 0.57
15) Debt Equity Ratio- The debt-equity ratio is determined to ascertain the soundness of long term financial policies of the company. It is also known as “External- Internal” equity ratio. This ratio establishes the relationship between the internal equities and external equities. If this ratio is 1:1, the long-term financial position of any business concern is considered satisfactory. If this ratio is lower than 1:1, it means that outside liabilities are lower than shareholder’s fund and in this case financial position will be considered more good and satisfactory.
Debt- Equity Ratio- Total outside Liability
Owner’s Equity
Particular 2005-06 2004-05 2003-04
Loan Fund 503539.00 64,709.10 99,392.84
Net Worth 355539.00 3,30,115.25 3,10,958.64
Debt Equity Ratio 1.42:1 0.20:1 0.32:1
16) Cash Ratio- This ratio measures the relationship between cash in hand and current assets. A very high cash ratio indicates major items of current assets & may be a poor indicator of profitability because cash by itself does not earn any profit. Ideally the proportion should be kept as low as possible. But some amount of cash for daily requirements of the firm should be kept.
Cash Ratio – Cash in Hand
Current Assets
Particular 2005-06 2004-05 2003-04
Cash in Hand 9,822.93 19,910.28 51,269.72
Current Assets 4,74,898.00 2,60,398.00 2,56,402.00
Cash Ratio 0.199:1 0.076:1 0.02:1
17) Solvency Ratio- This ratio highlights upon the long-term solvency of the concern and this ratio shows the relationship between the total assets and total liabilities of the concern. This ratio is obtained by dividing total assets by total liabilities. Total assets include fixed assets and current assets. Total liabilities include both long term and short-term liabilities.
Solvency Ratio- Total Assets
Total Liabilities
Particular 2005-06 2004-05 2003-04
Total Assets 10,41,076.00 5,47,433.75 5,43,138.61
Total Liability 1,36,159.00 1,10,484.22 90,243.77
Solvency Ratio 7.65:1 4.95:1 6.01:1
18) Profit before Tax to Sales- The ratio expressed the relationship between Profit before Tax and Sales.
Profit Before Tax to Sales- Profit Before Tax *100
Sales
Particular 2005-06 2004-05 2003-04
Profit Before Tax 48,189.00 47,092.00 51,270.00
Sales 9,94,293.00 7,22,403.00 5,91,957.00
P.B.T. to Sales 4.85% 6.52% 8.66%
19) Profit Before Tax to Net Worth- it’s calculated by establishing the relationship between Profit before Tax and Net Worth as a shareholder fund.
Profit Before Tax to Net Worth- Profit Before Tax *100
Net Worth
Particular 2005-06 2004-05 2003-04
Profit Before Tax 48,189.00 47,092.00 51,270.00
Net Worth 3,55,539.00 3,30,115.00 3,10,958.00
P.B.T. to Net Worth 13.55% 14.27% 16.49%
20) Profit after Tax to Net Worth- This ratio shows the relationship between Profit after Tax and Shareholder Fund.
Profit After Tax to Net Worth- Profit After Tax *100
Net Worth
Particular 2005-06 2004-05 2003-04
Profit After Tax 34,135.00 31,964.00 32,967.00
Net Worth 3,55,539.00 3,30,115.00 3,10,958.00
P.A.T. to Net Worth 9.60% 9.68% 10.60%
Line Of Control in Finance & Account Department
ACCOUNT OFFICERS
JUNIOR ACCOUNT OFFICERS
SENIOR ACCOUNTANT
JUNIOR ACCOUNTANT
BOOKS SECTION
This section basically deals with accounting function, maintenance and keeping of records.
The various functions include:
❖ Books: Preparing and maintaining balance sheets.
❖ IFCC (Fertilizer Industries Coordination committee)
⇨ Costing & Pricing Cells
⇨ Reporting
PAY ROLL SECTION
This section deals with the payments of salary and wages to the employees and intending various other benefits areas covering under to preview are –
❖ Salary
❖ Leave Travel Concession (LTC)
❖ Medical Allowance
❖ Conveyance
❖ Advances
❖ Loans to employees
———————–
CHAIRMAN
BOARD OF DIRECTORS
GENERAL
MANAGER
Kalol
GENERAL
MANAGER
Kalol
TRANSPORT ADVISOR
EXECUTIVE DIRECTOR
(PROJECT)
FINANCE DIRECTOR
MARKETING DIRECTOR
EXECUTIVE DIRECTOR
(GENERALMANAGER) M)
MANAGING DIRECTOR
GENERAL
MANAGER
Kalol
GENERAL
MANAGER
Kalol
Sr. General Manager
JGM/CM
Technical
JGM/CM
Utility
JGM/CM
Comm.
JGM/CM
F &A
Mechanical
Process
Power Plant
Purchase
F & A
Design &
Drawing
Offsite
Store
Library &
Docu.
Civil
Laboratory
Traffic
Training & Devp.
General Manager Aonla- II
General Manager Aonla-I
JGM/CM
Maint
JGM/CM
Production
JGM/CM
P & A
JGM/CM
System
Ammonia
Plant
Personnel
System
Electrical
Admin istration
Urea Plant
Instrumental
Product
Handling
Fire&Safety
& Env.
General
Engg.
Payroll & Taxation Section
Bill Section
Financial Concurrence Section/ Budget
Book Section
PSL Section
Work
Order
Sec.
Note Sheet Payment. Sec
Supply
Section
Work Contract
Indigenous
Supply
Finance and Account Deptt.
Service Contract
Imported
Supply
Senior Manager (F&A)
H.O.D.
Chief Manager (F & A)
Junior Accounts
Senior Accounts
Junior Account Officers
Account Officers
Senior Account Officers
Deputy Account Manager
Deputy Account Manager
Deputy Account Manager
Deputy Account Manager
Manager Account
Manager Account
Manager Account
Manager Account
Senior Manager (F&A)
HOD
C.M. (F & A)
SENIOR
MANAGE (F & A)
SENIOR
MANAGE (F & A)
MANAGER
(Account)
MANAGER
(Account)
MANAGER
(Account)
MANAGER
(Account)
Deputy
Account
Manager
Deputy
Account
Manager
Deputy
Account
Manager
Deputy
Account
Manager
Senior A/C Officers
