A PROJECT REPORT ON RATIO ANALYSIS OF VEEBASONS CORRUGATING PVT.LTD
PREPARED BY SARADAVA BHAVIK K . CLASS T.Y.B.B.A SEAT NO
ACADEMIC YEAR 2010-2011 GUIDED BY Lect. ALPA JOSHI SUBMITTED TO SAURASHTRA UNIVERSITY RAJKOT COLLEGE GYANYAGNA COLLEGE OF SCIENCE &
MANAGEMENT
1
DECLARATION Sarada dava va Bhavi Bhavik k K. a stud I, the the unde unders rsig igne ned d Sara studen entt of T.Y.B.B.A. hereby declare that the project work presented in this
report is my own contribution and has been carried out under the Prof. Alpa Alpa Joshi Joshi of Gyanya Gyanyagna gna College College Of superv supervisi ision on of Prof. Science & Management, Rajkot.
This work has not been previously submitted to any other University for any other examination.
Date: Place: - Rajkot. Signature
(Saradava Bhavik K.)
2
PREFACE It is a part of T.Y.B.B. T.Y.B.B.A. A. to accomplish accomplish internship internship with reputed company. Management states that each and every activity is started for the accomplishment of some predetermined goals. In this competitive environmen environment, t, only theoretical theoretical knowledge knowledge is not sufficient sufficient and hence a practical exposure to real life situation of business is perquisite to be a successful manager. The objective of a project work in management pedagogy is to give give an oppo opport rtun unit ity y to appl apply y the the theo theore reti tica call conc concep epts ts int into real real industrial environment thereby to supplement the theoretical study of the management in general. Finance is very vital part for any company. Any mismanagement related to finance results into non fulfillment of main goals of the company. And so it is very important to study all aspects related to financ financee manag manageme ement nt of the the compan company. y. This This projec projectt report report includ includes es study and analysis of major areas of finance namely, capital structure deci decisi sion ons, s,
capi capita tall
budge udgetting ing
deci decisi sion onss
management.
3
and and
work orking
capi capita tall
ACKNOWLEDGEMENT With immense pleasure and gratitude, I would hereby like to thank all the people who helped and guided me for this project.
I would like to thank Prof. alpa joshi who have guided me for this project.
I am thankful to Veebasons Corrugating Pvt. Ltd, who have helped me and provided information for reference.
I would like to thank all my friends and family members for their constant support.
Date: Place: - Rajkot.
Signature
(saradava bhavik )
4
INDEX NO.
PARTICULERS
1
General information
2
Introduction
3
History of the unit
4
Company profile
5
Promoter list
6
Form of organization
7
Organization structure
8
Justification of location
9
The size of unit
10
Time keeping system
11
Product detail
12
Benefits & incentives
13
Total employees & their classification
14
Raw material & requirement
15
List of plant and machinery
16
Manufacturing process
17
Power connection
18
Production capacity & sales turnover
19
FINANCIAL DEPARTMENT •
Introduction
•
Owned & borrowed capital
•
Sources of finance
•
Organization structure
•
Financial planning
•
Capital structure
•
capitalization
•
capital budgeting
•
management of fixed assets
•
management of working capital
•
management of receivables 5
PG NO.
•
20
financial leverage
FINANCIAL ANALYSIS • •
financial details power cost
•
staff & labour details
•
other manufacturing expenses
•
administrative expenses
•
projection of performance
•
profitability
•
source of finance
•
depreciation chart
•
details of cost of project
•
break even ratio
•
cash flow analysis
•
ratio analysis
21
competitors
22
Contribution of the unit to the society
23
Achievement and awards
24
Future plan
25
Conclusion
26
Suggestion
27
bibliography
6
7
INTRODUCTION In India, a small-scale industry is presently defined as “A unit enga engage ged d
in
manuf anufac actu turi ring ng,,
serv servic icin ing, g,
repo report rtin ing, g,
proc proces essi sing ng
and and
preservation of goods having investment in Plant & Machinery at an original cost not exceeding Rs. 30 Lacks.”
Since the economy of our country is based on rural development and more facilities and encouragement are allowed by the government to established industry in rural areas and certain declared backward areas (Industrial Estates). The India government is paying more emphasis from the last 10-15 years in the development development of small-scal small-scalee industrie industriess in such areas.
Another important aspect is that small-scale industry is a labour intensive industry. Manpower is key resource in handling other activities and resources of the organization. Scientific Management ensures higher productivity of laborers, which indirectly affect the productivity of other resources.
Industry means the economic activity which creates from utility. In other words, it creates economics value through the transformation of raw material in to finished goods.
It is not possible to image a man without industry and an industry with withou outt man. man. Man Man con con not not dire direct ct use use any any natu natura rall reso resourc urces es or raw raw material. He has to undertake some or more process on natural resources
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and then he can use the product. Thus, by industry raw material can be made finish product which is useful for mankind.
Veeb Veebas ason onss Corru Corruga gati ting ng Pvt. Pvt. Ltd. Ltd. is one one of the the firm firm whic which h is producing corrugated boxes, having very well brand reputation for its quality and innovated products.
9
HISTORY OF THE UNIT “VEE “VEEBA BASO SONS NS CORR CORRUG UGAT ATING ING PVT. PVT.LT LTD. D.”” is situ situat ated ed at G.I.D.C., Lodhika, Metoda, and Rajkot. It has pioneered it as one of most reputed quality, manufacturing & exporters of corrugated box, corrugated liner, of various capacities with its well-known product.
“VEEBASONS CORRUGATING PVT.LTD.” was established in 2004. 2004. The Compan Company y conver converted ted itsel itselff into into a profes professio sional nally ly manag managed ed private limited company with well-equipped plant of entire modern technolog technologies, ies, manufacturi manufacturing ng faciliti facilities, es, skilled skilled and qualified qualified technical technical work persons, and total land area of 10000 square meter, office area of 3000 square feet and factory area of 15500 square feet which result in to a box capacity of 650 tons per annum for the domestic market.
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COMPANY PROFILE
Name of the Firm
: VEEBASONS CORRUGATING PVT. LTD.
Address of the firm: “VEEBASONS CORRUGATING PVT. LTD.”
G.I.D.C. Lodhika Plot No. 2412, Kranti Gate, Road No. H/11, Kalavad Road, Metoda, Rajkot – 360003. Phone Phone No. No. : 0282 02827-28 7-28727 7274 4 FAX No. No.
: 028 02827-28 7-2872 7275 75
E-mail
:
[email protected] [email protected]..
Year of Establishment : 1990
Form of Organization
: Private Limited Company
Scale of Unit
: Mediuml Scale Industries
Sister Companies
: Vimal Industries Mfr. of Supporting Tools Vimal Engineers Manufacturer of Auto Parts Mihir Industries Manufacturer of Auto Parts Mihir Engineers Manufacturer of Auto Parts
Product
: Corrugated Boxes Corrugated Liners Corrugated Sheets Corrugated Rolls 11
State to which products are exported:
Gujarat, Mahrashtra & Madhya
Banks
: The Co-Operative Bank of Rajkot Ltd. Oriental Bank of Commerce
No. of Workers
: 55
Accounting Year
: 1st April to 31 st Marc
Accounting System
: Double Entry
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PROMOTER LIST
VEEBA VEEBASON SONS S CORRU CORRUGTI GTING NG PVT. PVT. LTD. LTD. was was establ establish ished ed in 2004 though self design skills, dedication and dare to do something. It was started with an initial investment of Rs. 1000000/-
VEEB VEEBAS ASO ONS COR CORRUGA RUGATI TING NG PVT PVT.
LTD LTD.
Prod Produc uces es the the
Corrug Corrugate ated d box, box, Corrug Corrugate ated d Sheet, Sheet, Corrug Corrugate ated d Liner Liner and Corrug Corrugate ated d Roll in different qualities. The Production Capacity of the Company is 650 tons per annum. The Company exports their products in Gujarat & Maharashtra. The objective of the company is to increase the turnover.
13
FORM OF ORGANISATION Industries owned, managed & controlled by individual or group of person without state participation is known as private sector units. These firms firms are owned owned by privat privatee entrep entreprene reneur ur Indust Industrie riess under under the privat privatee sector are setup with an aim of earning profit. The entire Investment is made by the owner profits or losses are also enjoyed by the owners. Private Sector units have to follows rules of the Government. Generally this this units units are manag managed ed by profes profession sional al person person who who makes makes contin continues ues efforts to increase the all efficiently of the firm.
VEEBA VEEBASON SONS S CORRU CORRUGAT GATING ING PVT. PVT. LTD. LTD. is regist registered ered as a private ltd. firm. It is a small scale Industry in the private sector. VEEBASONS CORRUGATING PVT. LTD. has under the category of “PRIVATE LIMITED COMPANY”. COMPANY”.
14
ORGANIZATION STRUCTURE
DIRECTOR
Industrial Relation Manager
General Manager
Administrative Manager
Assistant Manager
Typist / Clerk
Office Assistant
Workers
Workers
Workers
15
JUSTIFICATION OF LOCATION The Project is being set-up at Shaper Ta: Kotda Sangani, Dis. Rajkot.
Shaper is small village situated on national highway No. 8 B. It is only only 15 Kms. Kms. Away Away from from Rajk Rajkot ot and and 15 Kms. From From Gondal, which is Taluka head quarter. There are so many large, medium and small-scale industries established in Shaper.
Shap Shaper er is near nearer er to Rajkot jkot,, which ich is the most ost easi easily ly accessible city in Saurashtra and centrally located in the Saurashtra region and it is only 15 Kms. Away from Verval, which is also direct head quarter.
The Road Communication is very easily and conveniently available. There are regular an constant frequency of bus service is ever every y half half and and hour hour.. Thus, hus, the the road road,, comm commun unic icat atio ion n has has no problem at all as Shaper is situated on national highway, due to all these convenient and frequent facilities the question does not arise for the transportation and there by not coming and problem.
Raw Raw Mater Material ial or finishe finished d goods goods can be trans transpor ported ted from from thes thesee cent center er to anyw anywhe here re in Indi Indiaa very very easi easily ly cont conten entl tly y and and reasonable rates of the transportation.
16
The The idea ideall Loca Locati tion on is that that which hich perm permit itss the the low lowest est cost cost in production and distribution of a product or a service.
Therefore, Veebasons Corrugating Pvt. Ltd. had chosen a good location and that is Metoda GIDC where they may got raw material and infrastructural facilities like electricity, water , easily transportation etc.
1. Availab Availability ility of Raw Raw Mater Material ial
Raw Raw mate materi rial al is the the basi basiss prod produc uces es any any prod produc uctt so raw raw mate materi rial alss are are most most noti notice ceab able le fact factor or for for loca locati tion on.. VEEBA EEBASO SONS NS CORRUGA CORRUGATING TING PVT. LTD. LTD. gets gets its raw material material from nearly nearly areas of Jamnagar District. So VEEBASONS CORRUGATING PVT. LTD. gets its raw material easily, fast and with large quantity.
2. Avail Availab abili ility ty of Labo Labour ur
The The labo labour ur fact factor or is so much much impo import rtan antt for for loca locati tion on.. VEEBASONS CORRUGATING PVT. LTD. gets sufficient, educated, skilled,
and
unskilled
labours
because
of
VEEBASONS
CORR CORRUG UGAT ATIN ING G PVT. PVT. LTD LTD. loca locate ted d at near near of Jam Jamnaga nagarr city city so VEEB VEEBAS ASO ONS CORR CORRUG UGAT ATIN ING G PVT PVT. LTD LTD. has has neve neverr face face any any difficulty for the labours.
3. Trans Transpor portat tation ion Facilit Facility y
17
To carry goods from one region to another transport facility must be needed. VEEBASONS CORRUGATING PVT. LTD.’s location is suitable because roadways of the Gujarat and by water ways of about from from Jamnag Jamnagar ar port. port. So VEEBA VEEBASON SONS S CORR CORRUGA UGATING TING PVT. PVT. LTD. LTD. has has not not face face any any prob proble lem m of VEEB VEEBAS ASON ONS S CORR CORRUG UGAT ATIN ING G PVT. PVT. LTD.
4. Availab Availability ility of Electric Electricity ity
Any
business
unit
not
runs
without
electricity.
VEEBASONS CORRUGATING PVT. LTD. purchases electricity from GEB and company has also his DG set (Diesel Generator) so electricity is not problem of VEEBASONS CORRUGATING CORRUGATING PVT. LTD.
5. Gove Governm rnment ent Sup Suppo port rt
The government policy of Gujarat is good and favorable. Gove Governm rnmen entt prov provid ides es sche scheme mess for for deve develo lopm pmen entt and and prom promot otin ing g the the industries. Situated in Gujarat state Government also provides short term, long term financial loans.
18
SIZE OF THE UNIT In the consideration of the size of the unit there are three tools
1.
Large scale industry
2.
Medium sc scale in industry
3.
Small scale industry
At the birth the firm is medium scale industry. The industry which is having share capital between 1 crore to Rs. 5 crore is the medium scale industry. The 55 persons work in this factor
19
TIME KEEPING SYSTEM
Work Workin ing g Cond Condit itio ion n like like work workin ing g hours hours are are very very good good of the the Veebasons Corrugating Pvt. Ltd... There is no Pressure on the employees or workers. They have arranged their time as under
For Workers
For Office Staff
Off Day
:
:
:
08:00 am
to
12:30 pm
12:30 pm
to
01:30 pm (Lunch)
01:30 pm
to
05:00 pm
08:30 am
to
12:30 pm
12:30 pm
to
01:30 pm (Lunch)
01:30 pm
to
08:00 pm
Tuesday
20
PRODUCT DETAILS
Product: Corrugated Box.
Product Usage: The Corrugated Boxes mainly we in packing of the finish good. Its also a one type of carton or box which use in every product like packing of Television, Wafers Packing, etc. etc. Most of the cons consum umer er good goodss are pack packin ing g in the Corrugated Box.
Brand Name: Packers.
21
BENEFITS AND INCENTIVES Due to anno announ unce ceme ment nt of the the stat statee gove govern rnme ment nt Shap Shaper er declared backward area, which is situated in Kotda Sangani Taluka of Rajkot Dis., the unit, would be insisted to avail special benefits and incentives such areas under:
1.
No sales tax on sales.
2.
Exemption from lavvy of sales tax on purchase of raw materials.
3.
Scene Raw Materials are made available from the government on priority basis.
4.
Priority treatment in all respect for power allotment of building, materials such as cement, cement, iron etc.
22
TOTAL EMPLOYEES & THEIR CLASSIFICATION
The Number of employees shows that how much the company is huge or large. The Veebasons Corrugating Pvt. Ltd. has many workers.
“Veebasons Corrugating Pvt. Ltd. “has 55 Number of Workers working working in it. There are 15 Workers Workers Skilled & 40 Workers are unskilled in the staff. All the activities related to personnel department such as recrui recruitme tment, nt, secti section, on, promo promotio tion, n, transf transfer. er. Manage Managerr Prepar Preparee a Report Reportss working at its department.
23
RAW MATERIAL REQUIREMENTS
In every industry smooth supply of raw material is important factor. The main raw material required for Corrugated Project is: (1)
Kraft Paper.
(2)
Stitching Wire.
(3)
Gum.
Above all raw materials are easily available in open market.
Total requirement of raw material will be as under:
No. Items
Raw
material Raw
Requirement [For 1.
Kraft
1
Material Rate
Requirement
At
Total Cost
M.T. 100% Production
Production] Paper 1030 Kg.
593
10500
62.27
(including 3%
process
2.
wastage). Stitching
4.50 Kg.
2.59
27000
0.70
3.
wire. Gum.
25.00 Kg.
14.40 TOTAL
12000
1.73 64.70
Year Wise Raw-Material will be as under: Year 1. 2.
Capability Utilization 50 % 60 %
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Cost (In Lac) 32.35 38.82
LIST OF PLANT & MACHINERY No. 1
Name of Machine Qty. Rate Oblique hype single face paper 1 3,15,125 Corru orrug gated ated Heavy
machi achine ne
duty
size size
with
Total/ Amt. 3,15,125
62” stand
accessioned with motor starter and 2
one flute Rolls. Road cutter’s size 62” × 62” with
3
motor & starter. Sheet pasting
2
24,125
48,250
with 1
41,560
41,560
46,520
46,520
1,20,080
1,20,080
1,24,130
1,24,130
7
75”. Flat wi wire as a stiching ma machine si s ize 1
31,080
31,080
8 9
48” with motor. Do but dolole head. 1 Die pu punching ma machine he heavy du duty 1
45,525 2,95,000
45,525 2,95,000
1,45,000
1,45,000
machine
Adjustment motorized with starter 4
for gum size 72”. Sheet pasting machine
with 1
adjustment motorized with starter 5
size 72?” (For heavy). Bar Rotary cutting and causing 1 machine size 75” with 4 sets of cutting
and
creasing
dies
&
creating dies with motorized with 6
starter. Eccentric stutter with 3 slotting 1 dies dies 1 corn corner er die die moto motori rize zed d size size
with with magn magnet etic ic clut clutch ch and and time timer r 10
with electrical size 32” × 42”. Cylinder machine hand fad with 1 Electrical Electrical and stand. stand. Accessorie Accessoriess 25
11
size 24” × 36”. Partition slotter with 4 partition 1
46,075
46,075
slote, motorized size 42”. TOTAL Add: 10% 10% for for tran transp spor orta tati tion on
12,58,345 1,25,835
Electrification and Installation. TOTAL
13,84,180
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MANUFACTURING PROCESS
Two rolls of Craft papers are put on Corrugating Machine. Craft paper from first roll pass through flute rolls which converts it in to liners. This is than fixed with the paper coming from other roll with the help of adhesive. After fixing it pass through heaters. The Corrugated Paper is then cut in to desired sizes. There after oper operat atio ions ns like like crea creasi sing ng,, cutt cuttin ing g slot slotti ting ng and and stit stitch chin ing g are are performed to convert in to the shape of boxes. And these after as per requirement boxes are printed.
Fina Finall lly y the the Corru Corruga gate ted d Boxe Boxess are are read ready y for for disp dispat atch ch in market for sale.
27
POWER CONNECTION
The The uni unit will ill requ requir ired ed appr approx oxim imat atel ely y 40 H.P. H.P. Powe Power r connec connectio tion n the promot promoters ers have have approa approache ched, d, Gujar Gujarat at Elect Electrici ricity ty Board Authorities and they have been assured that power will be made available available as and when required. The promoters promoters have made a formal formal request request to the the Gujar Gujarat at Elect Electrici ricity ty Board Board Author Authority ity.. The The promoter will not face any power problem. The supply is quite satisfactory.
By the the time time the the buil buildi ding ng will ill be cons constr truc ucte ted d and and the the mach machin iner erie iess are are erec erecte ted d and and inst instal alle led d the the powe powerr will will be made made available. So, there is not going to be any delayed, or bottle necked due to shortage or non-availability of power. This industry is not high high powe powerr inte intens nsiv ivee and and does does not not need need any any spec specia iall or extr extraa ordinary facilities, so for as the power is concerned erection and installation of the machine and cable laying and power connection will pass no problem.
28
PRODUCTION CAPACITY & SALES TURNOVER Taki Taking ng in cons consid idera erati tion on the the work workin ing g effi effici cien ency cy of each each machine is one shift daily production will be of 2 M.T.
Annual production capacity will be as under:
No. of days working in a year × production per day 288 × 2. M.T. = 576 M.T.
It is estimated that in first year 50% of plant capacity will be utilized. So, first year production will be 288 M.T.
The sales price of Corrugated Boxes will be Rs. 15,000 per M.T. years wise sales will be as under:
Year 1 2
Utilization of Capacity 50 % 60 %
Production in M.T. 288.00 345.00
29
Sales (in Lac) 43.20 51.84
INTRODUCTION
30
Financial management can be defined as:
The management of the finance of a business/ organization is in order to achieve financial objectives.
Taking a commercial business as the most common organi organizat zation ional al struc structure ture,, the key object objective ivess of financ financial ial manag manageme ement nt would be to: Create wealth for the business Generate cash Provide an adequate return on investment bearing in mind the risks that the business is taking and the resources invested.
There are three key elements to the process of financial management:
Financial Planning
Management needs to ensure that funding is available at the right time to meet the needs of business. In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sales made on credit. In the medium and long term, funding may be required for significant additions to the productive capacity of the business or to make acquisitions.
Financial Control
31
Financial control is a critically important activity to help the business ensure that the business is meeting its objectives. objectives.
Financial decision making
A key financing decision is whether profits earned by the business should be retained rather than distributed to shareholders via dividends. If dividends are too high, the business may be starved of funding to reinvest in growing revenues and profits further.
32
OWNED & BORROWED CAPITAL Capital is an important feature of finance department. It refers to total amount of capital employed in organization. The capital structure displays the total investment of the company. The organization is said to be under the capitalization when earning is more more than investment.
Veebasons corrugating Pvt. Ltd. is Pvt. Ltd. Company therefore there is share capital of Rs. 1 Lac.
SOURCE OF FINANCE The Firm gets finance from the different factors. These factors are as follows: Banks Unsecured loans Reserves & surplus Bonds & debentures Borrowings from banks Share capital
The Main Sources of Finance of Veebasons Corrugating Pvt. Ltd. is Banks, Unsecured Loans & They are using CC from the bank. The whole finance provided by the bank against their Assets like Land, Labors & Machineries. They are doing all the transaction by the bank.
33
ORGANIZATION STRUCTURE Veebasons Corrugating Pvt. Ltd. has adopted a clear and detail division for function. Vice president is responsible for overall result of finance activities of department in the company. The company is having LINE type of organization in the finance department.
SS Senior Vice President
Manager
Dy. Manager
Accounts Officer
Chief Accounts Officer
Dy. Manager
Share Accounts Officer
Accounts Officer Assistance Accounts Officer
Officer
Assistants Assistants
Assistants
34
FINANCE PLANNING
Financial planning is one of the most important aspects of the finance mana manage gers’ rs’ job. job. Fina Financ ncia iall mana manage geme ment nt has has to make make plan plan for for capi capita tall inve invest stm ment ent and and also also for for worki orking ng capi capita tall for for the the ensu ensuri ring ng year year.. In VEEB VEEBAS ASON ONS S CORR CORRUG UGAT ATIN ING G PVT. PVT. LTD. LTD. the the task task of fina financ ncia iall planning is divided into 3 parts: parts:
TOP LEVEL
This level prepares planes pertaining to the long-term requirement of the form of capital expenditure, permanent and short term needs, inflows and outflows.
MIDDLE LEVEL
This is constituted by the eventually routine finance plan. This level is generally concerned with listing and calculation of outflow.
LOWER MIDDLE LEVEL
In this this leve levell gene general rally ly conc concern erned ed with with the the list listin ing g and and calc calcula ulati tion on of outflo outflows. ws. In VEEBAS VEEBASON ONS S CORRU CORRUGAT GATING ING PVT. PVT. LTD. LTD. financ financing ing decisions are very crucial and Head Office at Mumbai plan for new project of the company.
35
CAPITAL STRACTURE Capital structure may be defined as the combination of debt and equity that leads to the maximum value of the firm.
“Capital structure refers to the mix of long- term sources of funds such as debenture long- term debt, preference share capital and and eq equi uity ty shar sharee capi capita tall incl includ udin ing g re rese serv rves es and and surp surplu lus. s. Th Thee company should plan an optimum capital structure”.
Share capital capital of the company company will will increase, increase, as same secured loans will also increase by the company.
CAPITALIZATION Capita Capitaliz lizati ation on means means the total total amoun amountt of compan companies ies’’ capita capitall or value of its capital stock. The total amount of company’s capital should be enough to meet its present and future needs.
For the company the Book value and Real value of share are two main components for assessment of company’s financial position.
36
CAPITAL BUDGETING
Capital Budgeting decision is a firm’s decision to invest its current funds most effectively in long term activities in anticipation of an expected flow of ever of future benefits over a series of years.
With a reference to VEEBASONS CORRUGATING PVT. LTD., company has been making a capital budgeting at every year by taking services of experts and financial department. \
This company always aims to increase and expand the installed capacity of Rayon Rayon yarn yarn prod produc ucti tion on.. It cons consta tant ntly ly trie triess for for it and and succ succes ess. s. At present the installed capacity of the plant plant is 50 tones/day.
There are various methods of capital budgeting like:
Internal Rate of Return
Profitability
Pay Back Period method Accounting Rate of Return method
At present the main objectives of capital budgeting in VEEBASONS CORRUGATING PVT. LTD. are mainly replacement and modernization of mach machin inee and and fixe fixed d asse assets ts and and busi busine ness ss expa expansi nsion on by addi adding ng new new machinery technology and fixed assets this type of decision is taken by main head office Mumbai and experts of finance department.
37
Generally, company uses the techniques of Average Rate of Return for the purpose of capital budgeting. In this method company fixes average rate of return required in advance.
The average rate of return is calculated as:
Average Annual Income A.R.R. = Average Investment
Many times company also use the other techniques of capital budgeting. After calculating which may select or not.
VEEBASONS CORRUGATING PVT. LTD. has huge investment so it would be a capitalized company.
38
MANAGEMENT OF FIXED ASSETS Fixed ixed asse assets ts are are those hose,, which hich are are fixe fixed d and and list listed ed by a busi busine ness ss management of fixed assets is very important task which mg’t has to face because fixed assets have relatively higher cost.
To mana anage the fixe ixed asset sets is most important task task fac facing management today because of risk and investment factors. The fixed assets are that kind of assets in which of risk are for long period of time.
Fixed
asse ssets
crea reate
problems
of
replacement.
VEEBASONS
CORRUGATING PVT. LTD maintains the plant register in which each detail of every fixed assets are entered moreover it has also appointed C. A. and Instrument experts. At least once in a year they check all the asse assets ts of the the comp compan any y and and cert certif ify y then then as per per thei theirr cond condit itio ion n the the deprec depreciat iation ion of fixed fixed assets assets compan company y are calcul calculate ated d by Dimi Diminish nishing ing Balance method.
39
MANAGEMENT OF WORKING CAPITAL Working capital is that capital which is required maintaining the daily expenses of the business management of working capital refers to the fine investment in current assets. Current assets are assets, which are converted into cash with operating cycle. Current assets includ includee cash, cash, short short term, term, securi securitie ties, s, deb debtor tor’s ’s bills bills rec receiv eivable able and stock.
Manag anagem emen entt of work orking capi capita tall is an integ ntegra rall part part of financ nancee management and it has earning on the objective of the objective of the owners wealth. Work Workin ing g capi capita tall is esse essent ntia iall to oper operat atee the the fixe fixed d asse assets ts in the the sale saless activities. There are 2 concepts – Gross working capital, Net working capital.
GROSS WORKING CAPITAL: -
Means total current assets while. NET WORKING CAPITAL: CAPITAL: Means between the current assets & current liabilities difference.
Cash
Work in progress
Semi Finished Goods
40
Debtor
Sales
Finished goods
MANAGEMENT OF RECEIVABLES
The management of receivables is basically concerned with retaining the old customer and mining t5he new once by collecting a regulating the cost. cost. Manag Manageme ement nt of receiv receivabl ablee is also also known known as trade trade receiv receivabl ablee or customer or debtor receivable.
It means when firm make ordinary sales on credit and payment has not been received yet, such management of receivable.
Veebasons Corrugating Pvt. Ltd. grants the credit term to its customer for 15 days. However in exceptional cases, it is increased to certain certain extent. The purchasing purchasing sends bank drafts on expiry expiry of credit period.
The receivable arises out of three characteristics:
It invo involv lves es an elem elemen entt of risk risk,, whic which h shoul should d be care carefu full lly y analyzed.
It is based on economic value.
It implies future management of receivable.
Management of receivable concerned with retaining the old customers and winni winning ng new by contro controlli lling ng and regulat regulating ing the costs costs Veeba Veebason sonss Corrugating Pvt. Ltd. grants the credit from its customers for 15 days however in exceptional cases.
41
Debtors Turnover Ratio
Debtors Average daily credit sales
FINANCIAL LEVERAGE
Financial leverage is also called on trading on equity. A company can finance its investment by verity of sources such as preference shares capital including reserves and surplus. Financial leverage is defined as the activity of firm used financial leverag leverages es to magnif magnify y the effects effects of firms firms earnin earning g per shares shares.. The financial leverage is controllable and also completely avoidable leverage. The degree of fund collected by the firm from outside is called financial m leverage.
42
FINANCIAL DETAILS
SR. NO.
PARTICULARS
COST (Rs. In Lac)
1 2 3 4 5 6 7 8 9
Land. Land Development. Building. Plant and Machinery. Misc. Fixed Assets. Preliminary & Pre Operative Exp. Provisions of Contingency. Margin for Working Capital. Total Cost of Production
8.10 0.75 8.77 13.84 0.10 0.70 1.13 8.86 34.65
POWER COST The unit will require 40 H. P. Connection at 100% capacity cost will be as under:
H.P.
×
HOUR
×
DAYS
×
UNIT
×
RATE
40
×
8
×
288
×
0.75
×
1.50
= 1,03,680 At 50% utilization it wills Rs. 51,840:
Year
Capacity Utilization
Expenses (Rs. In Lac)
1 2
50 60
0.52 0.62
STAFF & LABOUR DETAILS The requirement of labour & Staff & Cost of wages will be as under:
43
No. Designation
No
1 2 3 4
person 1 1 4 40
Production Manager. Machine Operator. Skilled Workers. Unskilled Workers. TOTAL Add: 20% Benefits TOTAL
of Salary P.M. Total Rs. 2000 1500 700 500
P.A.
Rs. 24,000 18,000 33,600 20,000 95,600 19,120 1,14,720
OTHER MANUFACTURING EXPENSES It is estimated that other manufacturing expenses will be Rs. 24,000 in first year and thereafter it will be increased by Rs. 6,000 per year.
Year wise cost will be as under:
Year
Cost (Rs. In Lac)
1 2
0.24 0.36
ADMINISTRATIVE EXPENSES It is estimated that in first year administrative expenses will be as under:
(A) (A)
Admin dminis isttrati rativ ve Sal Salaary: ry: -
Manager. Clerk / Cum / Typist. Accountant. Peon.
1× 1× 1× 2×
36,000 12,000 12,000 12,000
3000 1000 1000 500 44
Total
72,000 14,400 86,400
Total A. (B) (B)
Admin dminis isttrati rativ ve Ex Expen penses: ses: -
Traveling an and Co Conveyance Post, Te Telephone, Te Telegram Stationary and Printing Legal and Professional Exp. Bank Charges. Misc. Office Exp. Total A + B
15,000 6,000 7,000 5,000 3,000 15,000
51,000 1,37,400
It is estimated that it will be increase by 5% every year: Year wise cost will be as under: Year 1 2
Cost (Rs. In Lac) 1.37 1.44
PROJECTION OF PERFORMANCE PROFITABILITY Particularly
1st Year
2ndYear
43.20
51.84
43.20
51.84
A. SALES: 1. Sales Sales and Misc. Misc. Receip Receipts ts 2. Less Less:: Exis xise 3. Net sa sales les.
45
B. Cost of Production 1. RawRaw-Ma Mater teria iall Consu Consume med. d.
32.35
38.82
2. Powe Powerr and and Fuel. uel.
00.52
00.63
3. Dire Direct ct Wa Wage ges. s.
1.05
1.16
4. Cons Consum umab able le Sto Store res. s.
00.24
00.24
5. Repai Repairr and and Maint Maintena enanc nce. e.
00.24
00.24
6. Othe Otherr MF MFG.
00.24
00.30
7. Depr Deprec ecia iati tion on..
05.03
03.91
8. Prel Prelim imin inar ary y Exp. Exp.
00.07
00.07
Total cost of Production
39.74
45.36
C. Cost of Sale
39.74
45.36
D. Gross Profit.
03.46
06.48
1. On Term Loans.
3.03
2.40
F. Selling Genereal 2 Admn. Exp.
1.37
1.44
G. Profit before Taxation (D-E+F))
-0.94
1.70 (2.64-0.94)
H. Provision for Taxation.
-
0.68
I. Net Profit (G-H)
0.94
1.02
J. Depreciation added back & Preliminary and 5.10
3.91
E. Interest:
pre-operative pre-operative Expenses. K. Net Cash Accruals (I+J)
4.16 (rs. In lac)
SOURCES OF FINANCE Sources of Finance
(Rs. In Lac)
Promoters contribution.
16.65
Deposit.
3.00
Term Loan.
15.00
46
4.93
Total
34.65
Promoter’s contribution 48.05%
Year Quarter Opening Equated
Principal Interest Yearly
Closing
Balance
Monthly
O/S
Installment
15,00,000
1,05,883
59,008
46,875
14,40,992
2nd Qtr.
14,40,992
1,05,883
60,852
45,031
13,80,140
3rd Qtr.
13,80,140
1,05,883
62,754
43,129
13,17,140
4th Qtr.
13,17,386
1,05,883
64,715
41,168
2006- 1st Qtr.
12,52,672
1,05,883
66737
39,168
12,52,672
2nd Qtr.
11,85,935
1,05,883
68,823
37,060
11,85,935
3rd Qtr.
11,17,112
1,05,883
70,973
34,910
11,17,112
4th Qtr.
10,46,139
1,05,883
73,191
32,692
9,72,948
1,05,883
75,478
30,405
2005- 1st Qtr.
Interest Balance O/S
06
1,76,204
13,17,386
07
2007- 1st Qtr. 08
47
1,43,808
10,46,139 9,72,948
2nd Qtr.
8,97,469
1,05,883
77,837
28,046
8,97,469
3rd Qtr.
8,19,469
1,05,883
80,269
25,614
8,19,632
4th Qtr.
7,39,363
1,05,883
82,778
23,105
2008- 1st Qtr.
6,56,585
1,05,883
85,365
20,518
65,585
2nd Qtr.
5,71,220
1,05,883
88,032
17,851
5,71,220
3rd Qtr.
4,83,188
1,05,883
90,783
1,61,100
4,83,188
4th Qtr.
3,92,404
1,05,883
93,620
12,263
2009- 1st Qtr.
2,98,784
1,05,883
96,546
9,337
2,98,784
2nd Qtr.
2,02,238
1,05,883
99,563
6,320
2,02,238
3rd Qtr.
1,02,675
1,05,883
1,02,675
3,208
15,00,000
5,11,777
1,07,169
7,39,363
09
65,731
3,92,404
10
Total
48
18,865
1,02,675
DEPRECIATION CHART
Year Particular
Building P2M
Other
Total
Assets
1
Opening
9.21
14.53
0.10
23.84
Balance
1.38
03.63
0.12
05.03
WDV
7.83
10.9
0.98
19.71
Depreciation
1.17
2.73
0.11
03.91
Depreciation
2
49
DETAILS OF COST OF PROJECT No.
Assets
Total Rs.
1
2
Land: Consideration
94,620
Stamp
12,120
Registration Fees
1,590
Legal Fee
1,500
Land Development: Estimated
3
15,000
Building: As per Estimate & Engineers
4
8,77,000
Plant & Machinery: As per Annexure
5
1,09,820
13,84,180
Misc. Fixed Assets: Furniture estimated
10,000
50
Cost
6
Preliminary Pre Operative Exp: A. Stam Stamp. p.
1,000
B. Lega Legall Exp. Exp.
20,000
C. Travel Traveling ing & Conveya Conveyance nce..
5,000
D. Interest Interest dining dining the construc construction tion 30,000
7
8
E. Stati Stationa onary ry & Prin Printin ting. g.
2,000
F. Tele Teleph phon onee Exp. Exp.
2,000
G. Misc. Misc. Expens Expenses. es.
10,000
70,000
Provision for contingencies: 5%on Building 3P2M
1,13,000
Margin of Working Capital
8,86,000
Total
34,65,000
51
BREAK EVEN RATIO Particulars
1st Year
Contribution (S-V)
8.8
Fixed Cost
6.71
BEP =
FC × Capacity of Utilization Contribution
=
6.71 × 60 8.8
=
45.75
Return on Investment: -
ROI =
EBIT × 100 Cost of Project
=
3.46 × 100 34.65
=
9.99%
52
Gross profit volume: -
GPV =
GP × 100 Net Sales
=
3.46 × 100 43.2
=
8.009%
profit Volume: Volume: Net profit
NPV =
1.02 × 100 43.2
=
2.36%
53
CASH FLOW ANALYSIS
2009-1 -10 0 2008-0 -09 9 2007-0 -08 8 2006-0 -07 7 2005-0 -06 6
(Rs Lakhs)
A Cas Cash h flow flow from from operat operating ing acti activit vities ies
Net profit before tax and exceptional items
312.51
27 271.75
164.70
161.48
146.73
120.43
111.91
77.84
77.67
67.81
-
-
2.95
3.93
3.93
171.16
55.80
18.73
14.82
21.72
(1.43)
(4.04)
(9.54)
-
-
(2.66)
0.34
(0.36)
0.16
0.65
(2.54)
(0.60)
(1.19)
(1.41)
(16.54) (6.41)
(8.74)
(5.21)
-
-
-
-
256.81
144.93
82.61
86.65
87.49
569.32
420.72
247.31
248.13
234.22
124.9
46.84
(87.18) 21.53
28.00
(118.66) (78.33) (31.49) (21.56)
Add: Adjustments for Depreciation Marke arketi ting ng
and and
tech techni nica call
know-how written-off Interest expenses (net) Voluntary
retirement
scheme (Profit) / loss on fixed
assets sold (Pro (Profi fit) t) / loss oss on sale sale of (6.76) investments Dividend income
(23.73)
(Gain)/ loss on sale of (0.20) Contract Exports Division Opera perati ting ng
profi rofitt
befo before re
working capital changes Add: Adjustments for Decre ecreas asee / (inc (incre reas ase) e) in trade and other receivables Decre ecreas asee / (inc (incre reas ase) e) in inventories Increase /
(decrease)
in (32.71) 54
(275.57) 17.77
24.65
31.66
37.68
trade and other payables
Cash
generated
from
operations Income taxes refund (paid) (net) Net Net cash cash from from oper operat atin ing g activities B
120.19
(347.39) (147.74) 14.69
47.78
689.51
73.33
282.00
(60.66)
(81.00) (48.23) (48.12) 23.21
628.85
(7.67)
51.34
214.70
305.21
8.82
2.19
2.81
2.99
1.80
-
131.40 -
99.57
262.82
Cash flow from investing activities
Proceeds from sale of fixed
assets Proc Procee eeds ds from from tran transfe sferr of insulator business @ Capital subsidy received
-
-
-
0.00
1.16
-
5.40
-
-
-
-
84.87
(48.01) (88.00)
Proc Procee eeds ds from from tran transfe sferr of global
exports
and -
marketing division Proceeds from sale of assets held for disposal Sale / redemption
-
/
(purch (purchase) ase) of invest investmen ments ts (116.08) 257.44 (net) Sale of
investments
subsidiaries ventures Proceeds
and from
13.52
in joint 10.96
-
-
-
-
of 34.50
-
-
-
-
sale
Contract Exports Division Interest received
24.29
13.15
4.34
9.17
22.00
Dividend received
23.73
16.54
6.41
8.74
5.21
-
-
-
(56.28)
Increase
/
decrease
in 55
corporate deposit Purc Purcha hase se of fixe fixed d asse assets ts Investm stment
(302 (302.7 .72) 2) (199 (199.9 .97) 7) (153 (153.6 .66) 6) (105 (105.1 .13) 3) (33. (33.34 34))
in
equity
Joint Ventures Investm stment in
of (1597.89) (661.09) 0.00
equity
of (463.83) (91.40) (44.42) (150.18) (29.70)
subsidiaries @@ Acquisitions
-
Net cash (used in) / from investing activities C
-
-
(8.00)
(12.49)
(42.54) -
(237 (2378. 8.22 22)) (663 (663.1 .14) 4) (94. (94.25 25)) (331 (331..80) 80) (45. (45.88 88))
Cash flow from financing activities
Proc roceeds shar sharee
from rom
capi capita tall
issu ssue
of
(in (includ cludin ing g 9.81
0.01
0.00
0.01
-
0.06
0.04
0.06
-
764.86
88.00
138.31
(163.80)
share premium) Security premium received 759.93 Proceeds from / (repayment of) borrowings (net) Divid Dividend endss paid paid (inclu (includin ding g tax thereon) Interest and finance charges paid Net cash (used in) / from financing activities
Net increase in cash and equivalents Cash Cash and cash cash equiv equivale alent ntss (opening balance)
1272.87
(106.13) (27.31) (27.08) (25.33) (19.76) (184.69) (62.06) (21.92) (23.97) (48.67) 1751.79
675.56
39.05
89.07
2.42
4.75
(3.86)
(28.03) 27.10
20.32
9.41
13.27
41.30
56
(232.23)
14.20
Cash of IGFL and BGFL Cash Cash and cash cash equiv equivale alent ntss (closing balance)
-
6.16
22.74
20.32
9.41
13.27
41.30
RATIO ANALYSIS 1. CURR CURREN ENT T RATI RATIO: O:
= Current Assets / current Liabilities
PARTICULARS
CURRENT
CURRENT ASSETS CURRENT
2009-10 1585687 495694
2008-09 769106 454349
LIABILITIES CURRENT RATIO
3.20
1.69
INTERPRETATION
57
YEAR PRE PREVIOU IOUS
YEAR YEAR
Current ratio indicates how much the company is able to meet its shortly
Matur Maturing ing obliga obligatio tions. ns. The ideal ideal ratio ratio is 2. Durin During g curren currentt year, year, ratio is very high
This is not good situation. Keeping idle current assets invite higher costs to the company.
Comp Compan any y shou should ld impr improv ovee upon upon inve invent ntor ory y mana manage geme ment nt,, cash cash managemen management, t, credit credit managemen managementt etc and try to reduce reduce this ratio to 2.
2. ACID ACID TEST TEST RAT RATIO IO::
= Current Assets- Inventories- prepaid Expenses / Current Liabilities
PARTICULARS
CURRENT YEAR PREVIOUS 2009-10
YEAR 2008-09
QUICK ASSETS CURRENT
1155349 495696
379546 454349
LIABILITIES ACID TEST RATIO
2.33
0.84
INTERPRETATION
Ideal quick ratio is 1.
58
Company needs to reduce this ratio by utilizing short term funds in better way.
Excess short term funds invite higher costs to company.
3. CASH CASH POS POSITI ITION ON RATI RATIO: O:
= (Cash on Hand & at Bank/Current Liabilities)*100
PARTICULARS
CURRENT
PREVIOUS
YEAR 2009-10
YEAR 2008-09
CASH ON HAND & 898333
166485
BANK CURRENT
495696
454349
LIABILITIES RATIO
181.23 %
36.64 %
INTERPRETATION:
Cash position ratio is very high, that indicates under utilization of short term funds. Company does not require too much funds on hand.
59
Company should utilize idle funds for productive purpose in the company or invest them outside.
4. INVE INVEN NTO TORY RY TO GROSS WORKING ING CAPITAL ITAL RATIO:
= Inventory/ Gross working Capital
PARTICULARS
CURRENT
PREVIOUS
YEAR 2009-10
YEAR 2008-09
INVENTORY 430338 GROSS WORKING 1585687
389560 769106
CAPITAL RATIO
50.65 %
27.14 %
INTERPRETATION:
Desi Desired red situ situat atio ion n is that that aver averag agee inve invent ntory ory in stor storee shou should ld be minimum.
Ratio has improved compare to last year but actually inventory level has increased.
Company Company requir requires es impro improvin ving g invent inventory ory manag manageme ement nt to reduce reduce average inventory in stores and reduce the cost of inventory.
60
5. TOTAL TOTAL ASSETS ASSETS TURNOV TURNOVER ER RATIO: RATIO:
= Sales/ Total Assets
PARTICULARS SALES TOTAL ASSETS RATIO
CURRENT
PREVIOUS
YEAR 2009-10
YEAR 2008-09
3419171 3297981 1.04
2885119 2427981 1.19
INTERPRETATION:
High Higher er is the the rati ratio, o, bett better er is the the util utiliz izat atio ion n of tota totall asse assett to generate more sales.
Current year ratio is not satisfactory.
Company Company should should try to make better utilizatio utilization n of total assets to generate more sales.
61
6. FIXED FIXED ASSETS ASSETS TURNOVE TURNOVER R RATIO: RATIO:
= Sales/ Fixed Assets
PARTICULARS SALES FIXED ASSETS RATIO
CURRENT YEAR PREVIOUS 2009-10
YEAR 2008-09
3419171 1106622 3.09
2885119 973890 2.96
INTERPRETATION:
Higher is the ratio, better is the management of fixed assets to generate sales.
This year ratio has improved compare to last year that indicates good situation.
Better fixed asset management is always desired.
62
7. CURRENT CURRENT ASSET ASSETS S TURNOV TURNOVER ER RATIO: RATIO:
= Sales/ Current Assets
PARTICULARS SALES CURRENT ASSETS RATIO
CURRENT YEAR PREVIOUS 2009-10
YEAR 2008-09
3419171 1585687 2.16
2885119 769106 3.76
INTERPRETATION
This ratio suggests utilization of current assets to generate sales. Higher ratio is always desired.
Current year ratio is not satisfactory compare to last year ratio.
Company should improve current assets management.
63
8. DEBTORS DEBTORS TURNOVER TURNOVER RATIO: RATIO:
= Net Credit Sales/ Average Debtors
PARTICULARS NET CREDIT SALES AVG. DEBTORS RATIO
CURRENT YEAR PREVIOUS 2009-10
YEAR 2008-09
306257 142595 21.48
2540844 78283 32.46
INTERPRETATION:
This ratio suggests suggests how many times in a year, debtors debtors make make payment to the company. Higher Higher ratio is desired.
Current year ratio is not satisfactory compare to last year’s ratio.
Company should improve its credit management and make their debtors to make faster payments.
64
9. DEBTORS DEBTORS COLLEC COLLECTION TION PERIOD: PERIOD:
= 365/Debtors Turnover Ratio
PARTICULARS
CURRENT YEAR PREVIOUS 2009-10
YEAR 2008-09
DAYS IN A YEAR DEBTORS
365 2148
365 3246
TURNOVER RATIO
16.99 DAYS
11.24 DAYS
INTERPRETATION:
This ratio indicates average number of days that customers take to make payment.
Lower the number of days better is the credit/debtors management.
Current year ratio is not satisfactory compare to last year ratio.
Company should improve its credit management and make their debtors to make faster payments.
10. CRED CREDITO ITORS RS TURNOV TURNOVER ER RATIO: RATIO: 65
= Net Credit Purchases/ Average Creditors
PARTICULARS
CURRENT
PREVIOUS
YEAR 2009-10
YEAR 2008-09
CREDIT PURCHASE 500840 AVERAGE 270909
441101 259350
CREDITORS RATIO
1.70
1.85
INTERPRETATION:
This ratio indicates how many times on an average company make payments to its creditors. Lower Lower the ratio is better.
The company should try to negotiate with its suppliers for later payments and try to utilize those extra funds for productive purposes.
11.
INVENTORY TURNOVER RATIO:
= Sales/ Average Inventory 66
PARTICULARS
CURRENT
YEAR PRE PREVIOU IOUS
SALES AVERAGE
2009-10 3419171 98959
2008-09 2885119 65396
INVENTORY RATIO
34.55
44.12
YEAR YEAR
INTERPRETATION:
This ratio indicates how many times, the stocks get rotated in a year. Higher ratio indicates better inventory management.
Current year ratio is not satisfactory compare to last year ratio.
Compan pany
should
try
to
maintain
inventory turnover
continuously try to achieve higher inventory turnover.
12.
OPERATING LEVERAGE:
= Contribution/ Earnings before Interest & Tax
PARTICULARS
CURRENT 67
PREVIOUS
and
CONTRIBUTION EBIT RATIO
YEAR 2009-10
YEAR 2008-09
1027173 361352 2.84
959134 358455 2.68
INTERPRETATION:
Higher the operating leverage, the more the company's income is affected by fluctuation in sales volume. It measures the EBIT's percentage change as a result of a change of one percent in the level of output. Higher ratio is always desired.
Ratio Ratio has improv improved ed compar comparee to last last year`s year`s ratio, ratio, that that indic indicate atess better situation.
13.
FINANCIAL LEVERAGE:
= Earnin Earnings gs before before Intere Interest st & Tax/ Tax/ Earnin Earnings gs before before Tax
68
PARTICULARS EBIT EBT RATIO
CURRENT
PREVIOUS
YEAR 2009-10
YEAR 2008-09
361352 251867 1.43
358455 350965 1.021
INTERPRETATION:
This This rati ratio o expl explai ains ns use use of debt debt com compone ponent nt in the the capi capita tall structure to increase shareholders earnings. It also explains risks associated in adopting debt component.
Current year`s ratio has improved compare to last year`s ratio. This indicates a little higher risk due to more debts but it also indicates company`s ability to increase shareholders` earnings by using debt component in its capital capital structure.
Ther Theree is alw always ays a trade radeof offf bet between een risk riskss invo nvolved lved and and shareholders` return.
Comp Compan any y shou should ld try try to maxi maximi mize ze both both by prop proper er bala balanc ncee between them.
14.
COMBINED LEVERAGE
= Contribution/Earnings before Tax
PARTICULARS CONTRIBUTION EBT
CURRENT
PREVIOUS
YEAR 2009-10
YEAR 2008-09
1027173 251867
959134 350965 69
RATIO
4.08
2.73
INTERPRETATION:
Combined leverage measures the percentage change in EPS that results from a change in one percent in sales. It helps in measuring the firm’s total risk. Current year`s risks have increased compare to last year`s risks due to increase in debt component. But this is not a concern of worry because it means better use of financial leverage.
15.
NET PROFIT RATIO:
= Net Profit after Tax/ Net Sales
PARTICULARS
CURRENT
PREVIOUS
YEAR 2009-10
YEAR 2008-09
NET PROFIT AFTER 216645
-140214
TAX NET SALES RATIO
2540844 -5.52 %
306257 7.07 % 70
INTERPRETATION:
Higher net profits are always desired.
Curr Curren entt year year`s `s perf perform orman ance ce of the the comp compan any y is appr apprec ecia iabl blee compare to last year`s.
There is always a scope to improve current situation.
COMPETITORS
Today’s Era of Cut Throught Competition. Every Company has to face face Comp Compet etit itio ion. n. The The worl world d is beco become me a comp compet etit itio ion n worl world. d. The The Veebasons Corrugating Pvt. Ltd. is also face the problem of Competition. Ther Theree are are many many comp compet etit itor orss in the the oppo opposi site te of this this comp compan any y thes thesee competitors are as follows:
71
Supack Industries Pvt. Ltd.
Hari Om Packaging
CONTRIBUTION OF THE UNIT TO THE SOCIETY
Business is the activity done by the man for the man. Here, means the business person does business for the society because without society he cannot achieve his goals. There are various objectives of any business unit unit,, like like maxi maximu mum m prof profit it.. To earn earn maxi maximu mum m prof profit it,, to expa expand nd the the business area, To change the modern era etc. Now a day to fulfill the
72
social responsibility is one of the objectives of the company to survive in the market.
Veebasons Corrugating Pvt. Ltd. Fulfill its responsibilities towards the society.
Towards The Society
:
The Company does not make pollution. The Company is about 15 to 18 Kilometers from the city area. They also provide housing facility to their employees.
ACHIEVEMENT AND AWARDS Every Every Busine Business ss tries tries to earn earn reason reasonabl ablee amount amount of profit profit.. This This Company Company has immense immense pleasure in introducing introducing over selves as the one of the the lead leadin ing g manuf manufac actu turer rer of the the corr corrug ugat ated ed boxe boxes. s. Thei Theirr plan plantt was was established in the year of 2004 their investment corrugating plant is setup with with late latest st soph sophis isttic and and ultr ultraa moder odern n infr infras astr truc uctu ture re,, equi equipm pmen ent, t, instrument, and facility to maintain quality assurance to high precision degree of accuracy required in process. This industry established in 2004 so award has not taken during 5 Years.
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FUTURE PLANS
Future Plan is the predetermined course of action is achieved a special aim or goal. Future planning is very necessary for the success of the business unit.
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Veebasons Corrugating Pvt. Ltd. Want to start automatic 5 ply mach machin ine, e, plan plan for for manuf manufac actu turi ring ng all all kind kindss of boxe boxess in futu future re.. They They constantly upgrade their machines and equipments and to some extant methods of production.
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SUGGESTIONS After giving the conclusion following are the suggestions to the company. This are displayed under. 77
1)
The aim of Veebasons Corrugating Pvt. Ltd. is to increase their turn over, I think, they also try to increase their turnover & profit too, But they have not enough workers to increase turnover so they should appoint new workers to increase turnover.
2)
They Purchase Raw Material form Delhi, Assam etc. It is very costly costly & time consuming consuming process, so I think think they should purchase raw material from local market.
3)
They should also do proper marketing because they are not doing marketing marketing properly properly they they should do more & more more advertiseme advertisement nt for selling their goods.
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CONCLUSION I visi visite ted d Veeb Veebaso asons ns Corru Corruga gati ting ng Pvt. Pvt. Ltd. Ltd. for for the the indu indust stri rial al training. training. It is Small Scale & Private Private Limited Company. Company. It has very good 79
location with the company. I had found that all the staff members and workers are working in a co ordinates manner and in a planned way they are more concentrating about their work and diversifying their efforts towa toward rdss the the desi desire red d targ target et.. It is look lookin ing g the the good good mana manage geme ment nt and and main mainte tena nance nce of qual qualit ity y of thei theirr prod produc ucts ts.. Its Its busi busine ness ss expa expansi nsion on is possible in the future.
So, at the end I wish the “Veebasons Corrugating Pvt. Ltd.” All The Best to get desired success in future.
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BIBLIOGRAPHY 81
Principle of Marketing
B.S. Prakashan
Rana & Savjani
Principle and Practice of Marketing
Sultan Chand & Sons
L.M. Prasad.
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