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Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page i
Financial Analysis of Cooperative Society
(Special Reff. to Valsad and Dang District in Gujarat)
By
Patel Dilipkumar
M.Com, B.Ed
Research Scholar
Pacific Academy of Higher Education and Research University,
Udaipur (Rajasthan), India
ISBN-13: 978-1511654388
ISBN-10: 1511654384
Published and Printed by
EduPedia Publications Pvt. Ltd
New Delhi, India
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page ii
Books Specifications
Book Title Financial Analysis of Cooperative Society
Author’s Name Patel Dilipkumar
Genre Non-Fiction, Finance and Investment
ISBN No. 978-1511654388
Language English
Publication Year 2015
Edition First Edition
No. of Pages 101
Page Size A4
Publisher EduPedia Publications Pvt. Ltd., New Delhi, India
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
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Author’s Introduction
PATEL DILIPKUMAR
M.COM, B.ED
RESEARCH SCHOLAR
PACIFIC ACADEMY OF HIGHER EDUCATION
AND RESEARCH UNIVERSITY, UDAIPUR
(RAJASTHAN)
Email: [email protected]
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ACKNOWLEDGEMENT
I am extremely thankful to Provide me Cooperative societies, Annual Report And all
confusion financial analysis regarding support Mr. Dhirubhai Kuvar, & Chintubhai
Manager of Selected Cooperative society., ( Guj.) and And Dhruva- Bife Under
Managed all Cooperative societies Financial Data provide me Officer’s Name Mr.
Jigneshbhai Patel And Shailesh Patel, Anandbhai, Maheshbhai, Devchanbhai in
Dhruva Bife : of Taluka Kaprada Office in Gujarat.
I am Very thankful to my PhD Guide Dr. Hetal Tandel, GIDC Rajju Shrof Rofel
Institute of Management Studies. To give me Valuable Advise for this Research
work.
I am Thankful to Prof. Alkaben Patel ,Arts and Commerce College, Motapondha to
Give Advice regarding this research work .
I am thankful to my Friends any time support to my this work so, heartily thanks
to Mr. Virendra Patel ,Sandip and Dharmesh Patel, Chandrakant Patel etc.
I am thankful to all my beloved family members for encouraging me and providing
all the necessary requirements; from financial support and motivation.
I express warm thanks to all who all have helped me a lot for my research work.
Author :
Patel Dilip kumar
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
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ABSTRACT
The present study of the research entitled “ Financial Analysis of Cooperative Society
”. The study was based on secondary data from records, and profile of the Cooperative
Societies. The Ratio analysis is the process of Observation the financial soundness and
cost effectiveness of the firm by establishing relationship between the items of balance
sheet and profit and loss a/c. The present study has thrown major concentration in ratio
analysis, from the 6 years balance sheet and profit and loss a/c. An objective of the
study includes the profitability Ratio, Structural ratios, Liquidity ratios, and Activity
ratio of Cooperative Societies in Dharampur, and Ahva taluk in south Gujarat in
India. Overall financial performance of the Cooperative Societies is discussed. Short
term-long term position is good in study period of the Selected Cooperatives. Suitable
suggestion was given by the researcher for a better soundness and cost effectiveness
& Test Hypothesis ‘T’ test has been applied.
Key word :
Ratio analysis, Profitability, Liquidity, Solvency, Activity, Financial health-
performance,
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PARTICULAR Page No.
Acknowledgement…………………………………………………………………. iv
Abstract………………………………………………………….…………………..v
CHAPTER : 1 Overview of Co-operative Societies…………….…………………..1
CHAPTER : 2 Literature review of co-operative societies…………………………25
CHAPTER : 3 Research Methodology………………………………………………31
CHAPTER : 4 Data Analysis of Selected Cooperative societies…………………….36
CHAPTER : 5 Findings & Suggestion……………………………………………….81
Bibliography………………………………………………………………………….89
About the Author…………………………………………………………………….92
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LIST OF TABLE
1 Debt Equity Ratio
2 Capital Gearing Ratio
3 Properatory Ratio
4 Fixed Capital- Assets Ratio
5 hypothesis test table Capital Structure Ratios
6 Current Ratio
7 Liquidity Ratio
8 hypothesis test table Liquidity Ratios
9 Gross profit Ratio
10 Net Profit Ratio
11 Operating Ratio
12 Return on Total Sale
13 Return On Capital Employed
14 hypothesis test table Profitability Ratios
15 Stock Turnover
16 Fixed Assets Turnover
17 Total Asset Turnover
18 Debtors Ratio
19 Current Assets Turnover
20 Working Capital Turnover
21 Hypothesis test table Activity Ratios
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LIST OF GRAPH
1 Debt Equity Ratio
2 Capital Gearing Ratio
3 Properatory Ratio
4 Fixed Capital- Assets Ratio
5 Current Ratio
6 Liquidity Ratio
7 Gross profit Ratio
8 Net Profit Ratio
9 Operating Ratio
10 Return on Total Sale
11 Return on Capital Employed
12 Stock Turnover
13 Fixed Assets Turnover
14 Total Asset Turnover
15 Debtors Ratio
16 Current Assets Turnover
17 Working Capital Turnover
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Chapter : 1 ( A)
(A.1) Overview of Cooperative society
(A.2) History of Cooperative society
(A.3) Types of Cooperative Society
(A.4) Advantage of Cooperative society
(A.5) Disadvantage of Cooperative society
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(A.1) COOPERATIVE SOCIETY
A co-operative society is a voluntary association started with the aim of service
of its members. It is a form of business where individuals belonging to the same class
join their hands for the promotion of their common goals. These are generally formed
by the poor people or weaker section people in the society. It reflects the desire of the
poor people to stand on their own legs or own merit. The philosophy of the formation
of co-operative society is "all for each and each for all".
DEFINITION
1. According to Herrik,
"Cooperation is an action of persons voluntarily united for utilizing reciprocally their
own forces, resources or both under mutual management for their common profit or
loss."
2. According to Mr. Plunket,
"The cooperation is self help made effective by organization."
(A.2) History of Cooperative Society India
The cooperative movement in India owes its origin to agriculture and allied
sectors. Towards the end of the 19th century, the problems of rural indebtedness and
the consequent conditions of farmers created an environment for the chit funds and
cooperative societies. The farmers generally found the cooperative movement an
attractive mechanism for pooling their meagre resources for solving common
problems relating to credit, supplies of inputs and marketing of agricultural produce.
The experience gained in the working of cooperatives led to the enactment of
Cooperative Credit Societies Act, 1904. Subsequently, a more comprehensive
legislation called the Cooperative Societies Act was enacted. This Act, inter alia,
provided for the creation of the post of registrar of cooperative societies and
registration of cooperative societies for various purposes and audit. Under the
Montague-Chelmsford Reforms of 1919, cooperation became a provincial subject and
the provinces were authorized to make their own cooperative laws. Under the
Government of India Act, 1935, cooperatives were treated as a provincial subject. The
item "Cooperative Societies" is a State Subject under entry No.32 of the State List of
the Constitution of India.
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After India attained Independence in August, 1947, cooperatives assumed a great
significance in poverty removal and faster socio-economic growth. With the advent of
the planning process, cooperatives became an integral part of the Five Year Plans. As
a result, they emerged as a distinct segment in our national economy. In the First Five
Year Plan, it was specifically stated that the success of the Plan would be judged,
among other things, by the extent it was implemented through cooperative
organizations.
(A.3) Types of The co-operative Societies in India
Cooperative societies may be classified into different categories fundamental
on the objectives, and purpose for which they are formed and nature of activities they
are reforming. When few cooperatives are formed to achieve to specific economic
objectives, others are came up with an objectives of social and economical status of its
members. Based on that the following are the forms of co operative societies which
have developed in India.
(1) Producers Cooperative society
These types of cooperatives are formed to assist the manufactures units in setting up,
production and marketing their products. It procures plants and machineries, raw
materials and other necessary items for facilitate the member in production of goods
and services. It also, at times, takes the responsibility of marketing the products
produced by the manufactures. Small producers are mainly benefited out of this
process. They are concentrating more and more on production and other are duly taken
care by the cooperatives.
(2) Consumer Cooperative society
Consumer’s cooperatives are formed with the objective of fulfilling need and
requirement of its member consumer by supplying goods and services at cheaper rate
by eliminating the middlemen. They develop relationship directly with the
manufactures, purchase the goods at wholesale price and sell them to members at
comparatively less than market price. The profit margin which the wholesalers and
retailers are supposed to enjoy are pass on to the members by the society, hence
charges less price from the members without compromising the quality.
(3) Marketing Cooperative society
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It is an established fact that many a small producers are not successful in their projects
because they lack marketing skill and network. Quality production and cheap rate do
not come to their rescue in marketing. It is the marketing cooperative whose business
is the purchase all the goods produced by the small manufacturer and market them
when market is favorable or at different places where there is demand for the same.
The producer benefited by selling and society by earning commission from such sales.
(4) Housing Cooperative society
Affording to the basic need of a house or to have a land to construct a house is a
stupendous task on the part of a common man due to want of requisite fund, proper
facility, managerial ability and others. Housing cooperative society are those voluntary
association of members which engaged in acquiring land from general public, develop
the same, construct houses as per the requirement of members and transfer the
ownership in their favour. The members pays the price on easy installment basis, or
simple term loan basis some society also sells plots to their members.
(5) Credit Cooperative society
The very objective behind formation of a cooperative society is to make free the
people of down trodden society from the clutch of village money lender. In the name
of financial support, they have exploited the poor and needy people in many a ways,
thus poorer were not given opportunity to improve their socio-economic stand. Credit
cooperative come in their way. They have been assisting the poor farmers and needy
people of the society with the provision of soft loans, easy loans at comparatively
lower rate of interest and easy terms and conditions. In this process atheist,
exploitation of money lenders has been checked to a great extent.
Credit cooperatives are of two types namely:
i) Agricultural credit cooperatives, and
ii) Non-Agricultural credit cooperatives.
(6) Cooperative Farming society:
This society is formed by the farmers of a particular locality. Instead of going
for individual farming, they go for mass farming to get higher rate of return from
economies of scale. Combined they contribute land, labour, and capital in the field of
agriculture and share of benefits in a desired proportion among the members. This
process is more benefited because of (i) Mass production (ii) Maximum output, (iii)
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Application of advanced technologies, fertilizers, seeds and others, (iv) pooled
resources fund, land and labour etc. (v) no financial crunch.
(A.4) Advantages of Cooperative Society
Following points indicate Advantage of Cooperative society
1. Mutual Cooperation :-
Cooperative society is very useful for creating the spirit of lovable Friendship and brotherhood
among the members of the society, which is the basic need of human beings.
2. Elimination of Middle economic person
The co-operative society eliminates the profit of the middleman. Because society purchases
goods directly from the producers and provides it on wholesale price to its members.
3. Financial Assistance :-
The cooperative societies also provide financial assistance to its members. For example in case
of house building for the purchase of inputs these provide loans.
4. Saving in Expenditure :-
A society is generally carried on by the members, so there is no heavy expenditure on
management. It reduces the coal of production.
5. Increase in Employment :-
The cooperative societies are providing job facility to thousands people in every country. So
these have reduced the rate of unemployment.
6. Equal Rights :-
All the members of the society have an equal rights and each member has one vote.
7. Equal Distribution of Wealth :-
Due to cooperative society the profit of capitalists reduces. The profit of middleman is also
distributed among the workers. So these societies remove the unequal distribution of wealth.
8. Tax Concession :-
It is an advantage that Govt. provides various concessions like super tax, income tax to the co-
operative societies.
9. Advantage for Farmer :-
The farmers can obtain their inputs like seeds fertilizers on low prices. They can also sell their
product at higher price through the co-operative society.
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(A.5) Disadvantage of Cooperative Society
1. Lack of capital:
The co-operatives are launched by economically weaker sections of society. The shares are
generally persons may associate it these societies. The resources of co-operatives are limited to
the extent of capital contributed by the members and fund raising capacity from stated
cooperative banks.
2. Lack of efficient management:
The co-operative societies, because of their limited resources, are unable to secure the services
of efficient managers. They manage the society by its members who lacks managerial or
professional skills. In efficient management may not bring greater success over a period of time.
3. Lack of unity among member:
The members are drawn from different sections of the society. There may be lack of harmony
among them. The members do not understand the working of the societies, so they start
doubting each other. Some members lack interest in the affairs of the society and leave
everything to the paid officials.
4. Lack of motivation:
Co-operation brings an end to the feeling of individual self-interest. But men are selfish by
nature. Therefore, generally the members lack motivation to work more. Most of the time
‘everybody’ responsibility becomes no bodies’ responsibility.
5. Political interference:
The societies are normally under the regulations of the government. As co operative societies
stand in India, government even nominates members to the Managing Committees. Every
government tries to send their own party members to these societies. The societies are governed
on political consideration rather than on business lines. Political interference has badly affected
co-operative movement in India.
6. Difficult to maintain business secrecy:
The affairs of the co-operatives are very often no such exposed to the members that it becomes
difficult for them to maintain business secrecy. But secrecy is very important for success of any
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Chapter : 1 ( C )
Introduction to financial analysis, understanding of income and
revenue, balance sheet, advantages of financial analysis, limitation,
and understanding of ratio analysis as a tool for evaluating financial
position.
(C.1) Meaning of Financial Statement :
Definition: Financial statements are a collection of reports about an organization's financial
results, condition, and cash flows. They are useful for the following reasons:
To determine the ability of a business to generate cash, and the sources and uses of that
cash.
To determine whether a business has the capability to pay back its debts.
To track financial results on a trend line to spot any looming profitability issues.
To derive financial ratios from the statements that can indicate the condition of the
business.
To investigate the details of certain business transactions, as outlined in the disclosures
that accompany the statements.
The standard contents of a set of financial statements are:
Balance sheet. Shows the entity's assets, liabilities, and stockholders' equity as of the
report date.
Income statement. Shows the results of the entity's operations and financial activities for
the reporting period.
Statement of cash flows. Shows changes in the entity's cash flows during the reporting
period
(C.2) Balance sheet
The balance sheet captures the financial position of a company at a particular point in time.
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The balance sheet lists a company's assets, liabilities, and stockholders' equity (including dollar
amounts) at a specific moment in time.
There are two types of balance sheets, classified and unclassified.
A balance sheet is used externally and internally.
liabilities An amount of money in a company that is owed to someone and has to be paid in the
future, such as tax, debt, interest, and mortgage payments. asset Items of ownership convertible
into cash; total resources of a person or business, as cash, notes and accounts receivable;
securities and accounts receivable, securities, inventories, goodwill, fixtures, machinery, or real
estate (as opposed to liabilities).
(C.3) Profit and Loss Account
A profit and loss account is a record of the income and expenditure that a business has
generated over a specific period and either shows a profit (income exceeding expenses) or a loss
(where expenses exceed income).
"Usually you would only include the income and expenses relevant to the business activity. If
you were compiling a profit and loss account for your household, for example, you would
probably include things like council tax, utilities and water rates, but would not include the cost
of a takeaway."
Depreciation is also often shown in accounts. This is the cost of any large items of equipment,
machinery or vehicles that have been bought to last several years. The cost of these items is
spread over a number of years, a proportion showing in the accounts each year.
A simple profit and loss account would typically show income or turnover at the top and list
expenses and costs below.
Subramaniam says: "Making a detailed note of every transaction is time-consuming but can be
rewarding if there is an unexpected result.
"Depending on the purpose of the accounts, the level of detail will vary, with typically the date
being recorded along with the type of expenditure and of course the value itself."
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Subramaniam adds: "I would suggest that good books and records are kept from the outset
which should be updated on a regular basis. Avoid lumping large costs into the same headings
as this can be misleading.
"Choose the headings and selection of items going into these headings carefully as you need to
be able to identify what is in here. Don't be afraid of having lots of headings if you need to
analyse where your main costs are."
How often do accounts need to be compiled, and who needs to see them?
"Businesses usually have to produce them at least once a year for the year in question to comply
with the relevant tax legislation," says Subramaniam.
(C.4) Importance of Financial statements
The importance of financial statements in a business is great. There are several
difference reasons for a business to need financial statements. Yet first, financial statements
need to be explained in order to know how they are used.
Financial statements usually present the picture of the financial health of a given entity. It
is also critical that a business comes up with accurate financial statements, not only for their
record keeping for the purpose of satisfying external reporting expectations. In many ways,
financial statements offer an essential glimpse into the financial health of the business, but they
are only good for that specific period that they are used in (month, quarter, and year). These
statements are not only used by the company to see how the flow of business is going, but they
are also used by external users.
Financial Institutions- these are a group of banks and other lenders that use financial statements
to decide whether to help the company with working capital or to issue debt security to it.
Government- Financial statements are used by the government to analyze whether the tax paid
them is accurate and is in line with their financial strength.
Vendors- this group of people extend credit to a business and use statements to determined if
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they business is credit worthy
These statements need to be accurate in order to help investors decide if they want to
invest in a business venture. They will also come up with detailed evaluations of the viability
and financial stability along with strength of the company before making the decision to invest
or not
(C.5) Limitations of Financial Statement Analysis
Although analysis of financial statement is essential to obtain relevant information for making
several decisions and formulating corporate plans and policies, it should be carefully performed
as it suffers from a number of the following limitations.
1. Mislead the user
The accuracy of financial information largely depends on how accurately financial statements
are prepared. If their preparation is wrong, the information obtained from their analysis will also
be wrong which may mislead the user in making decisions.
2. Not useful for planning
Since financial statements are prepared by using historical financial data, therefore, the
information derived from such statements may not be effective in corporate planning, if the
previous situation does not prevail.
3. Qualitative aspects
Then financial statement analysis provides only quantitative information about the company's
financial affairs. However, it fails to provide qualitative information such as management labour
relation, customer's satisfaction, and management’s skills and so on which are also equally
important for decision making.
4. Comparison not possible
The financial statements are based on historical data. Therefore comparative analysis of
financial statements of different years cannot be done as inflation distorts the view presented by
the statements of different years.
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5. Wrong judgment
The skills used in the analysis without adequate knowledge of the subject matter may lead to
negative direction . Similarly, biased attitude of the analyst may also lead to wrong judgment
and conclusion.
The limitations mentioned above about financial statement analysis make it clear that the
analysis is a means to an end and not an end to itself. The users and analysts must understand
the limitations before analyzing the financial statements of the company.
(C.6) Financial ratio Analysis
There are several general categories of ratios, each designed to examine a different aspect of a
company's performance. The general groups of ratios are:
Structural ratios. This is the most fundamentally important set of ratios, because they measure
the ability of a company to remain in business. Click the following links for a thorough review
of each ratio.
o Cash coverage ratio. Shows the amount of cash available to pay interest.
o Current ratio. Measures the amount of liquidity available to pay for current liabilities.
o Quick ratio. The same as the current ratio, but does not include inventory.
o Liquidity index. Measures the amount of time required to convert assets into cash.
Activity ratios. These ratios are a strong indicator of the quality of management, since
they reveal how well management is utilizing company resources. Click the following links for
a thorough review of each ratio.
o Accounts payable turnover ratio. Measures the speed with which a company pays its
suppliers.
o Accounts receivable turnover ratio. Measures a company's ability to collect accounts
receivable.
o Fixed asset turnover ratio. Measures a company's ability to generate sales from a
certain base of fixed assets.
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o Inventory turnover ratio. Measures the amount of inventory needed to support a given
level of sales.
Leverage ratios. These ratios reveal the extent to which a company is relying upon debt
to fund its operations, and its ability to pay back the debt. Click the following links for a
thorough review of each ratio.
o Debt to equity ratio. Shows the extent to which management is willing to fund operations
with debt, rather than equity.
o Debt service coverage ratio. Reveals the ability of a company to pay its debt obligations.
o Fixed charge coverage. Shows the ability of a company to pay for its fixed costs.
Profitability ratios. These ratios measure how well a company performs in generating a
profit. Click the following links for a thorough review of each ratio.
o Breakeven point. Reveals the sales level at which a company breaks even.
o Contribution margin ratio. Shows the profits left after variable costs are subtracted from
sales.
o Gross profit ratio. Shows revenues minus the cost of goods sold, as a proportion of sales.
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Chapter : 1 ( D)
(D.1) Introduction of Selected Cooperative society Area Valsad district in
Gujarat and Management structure
(D.2) Introduction of Selected Cooperative society Area Dang district in
Gujarat and Management structure
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(D.1) Shree Dhamni Vibhag Bagayati Sahkari Mandali Ltd
Taluk Dharampur and Dist Valsad
Valsad District Information :
Historical background we shall not forget entry of parses at Sanjan port for the first
time in India. Parsee community spread throughout India from Sanjan with their
famous religious place "Fire temple" at Udavada in Pardi taluka of Valsad district.
There is an ancient Jain pilgrim place at Bagwada on National Highway No.8 near
Udavada, where there is constant rush of pilgrims.
"Khed Satyagrah" and grass agitation launched by late Ishwarbhai Desai in
pardi taluka put it before the country and world. There is a largest industrial
estate at Vapi in Pardi taluka.
Valsad district was discussed at national and international level as it was
birth place of the Great person shri morarji desai, Bharat Ratna and Ex.prime minister
of India. A part from this valsad district is famous for valsadi aafus mangoes, world
famous chemical factories at Atul, largest industrial estate at Vapi, famous valsadi
teak-wood. Valsad district is situated on south of Gujarat. There is a Arabeen sea
in west. There are series of Sahyadri Mountains in the east. Valsad district has
population of 14,10,and 680 and has area of 2,947.49 sq.kms area. It has good
facilities and life style is good. It is a head quarters of Railway Defense Force and has
training centre. Railway administration at Valsad has important divisions like loco
sheds, dispensary, area manager office and vast railway colonies there is a vast
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M.P.M.C. market for sales of agricultural production manages and chikoos.
Tithal village situated at a distance of 5 kms from valsad is being developed as
tourist place as well as pilgrim place. There are "Saibaba" temple in a splendid
complex, sadhana centre of Jain munis "Bandhu Triputi", "Shantiniketan Complex",
"Swaminarayan temple" of Akshar purushottam Bochasanvasi, etc, which neutrally
attract tourists of various fields. The reason is, Tithal has a pleasing sea-shore.
Dharampur taluka:
Different education level of five talukas of dist Valsad of Gujarat can be seen
.Base on the education level of the people, a variety can be seen in their languages, culture,
living standard etc has undergone a huge changes in last two decades to go. One cannot ignore
the opportunity in term of trade, religion, heritage, and industry in these areas under study. Even
today one can see the presence of traditional as well as modernization touch in the business of
these local areas. The areas are surrounded by lust green natural beauty covering the areas by
hill. Even till date, many areas are under developed. Due to bad economic condition, many
people are still living below poverty line. We find good presence to traditional system of
“HAAT” bazaar catching the heart of local peoples. People prefer to visit such bazaar for buying
their basic requirement .The political benefits has not reached this areas and that is also
responsible for underdevelopment of this areas. Considering all the above mention factors.
The Selected Cooperative Societies And Its Management :
Introduction and Background
Selected Dhamni Vibhag Bagayati Sahkari Mandali, at Dhamni village is an established on
30.11.2001. Past time this Cooperative Society Management has more challenge taken, because
this area because this area is highly rural area. But now Management Cooperative Society’s
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Employee Very Honestly and Good working So, Every year this Cooperative Society Net
Profit Achievement. So this Cooperative society taken good Idea and Strong planning policy
has very well. This Cooperative society’s goal is tribal areas development and farmer’s welfare
activity. This cooperative society sales and Financial support by Dhruva Bife at Vansada taluka
in Lachhakadi.
Selected Cooperative society Management Committee :
Shree Tuljibhai Bhimjibhai Devaliya Precident
Shree Shivrambhai Somabhai Patara Member
Shree Maheshbhai K.Patel Member
Shree Tulshirambhai Kakadbhai daghav Member
Shree Ratnbhai Pangalbhai Dahwad Member
Shree Hirabhai Jatarbhai Raut Member
Shree Rajiram Soniyabhai Mokasi Member
Shree Maganbhai Somabhai Gound Member
Shree Barkebhai Bapjibhai Birari Member
Shree Chanubhai Gangaram Sindha Member
Shree Dhaylubhai Dhakalbhai Mahla Member
Shree Ratanbhai Chetabhai Vaghal Member
Shree Bapjibhai Lakhmabhai Gavli Member
Shree Dhirubhai Devjibhai Kuvar Member
Employee of Horticulture Cooperative Society
Shree Dhirubhai D.Kuvar Manager
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(D.2) Shree Ambika Bagayat Utpadak Sahkari
Mandali Ltd,Jamlapada Taluka : Ahwa dist Dang
Dang District Information :
The Dang district is located in the southern part of the Gujarat state. To the north and
west of Dang lies Surat and Navsari districts of Gujarat whereas to its east and south are the
districts of the Maharastra state. The district of Dang lies between 20.39 degree to 21.5 degree
North latitudes and 72.29 degree to 73.51 degree East longitudes. The Dang is comprised of 311
Villages and has an area of 1764 sq. km. The land of the district is fertile and rocky. The colour
of the soil is either red or black. Maize, Rice, Groundnuts, Nagli (raggi), Euphorbia,etc. are the
major cultivation of this land. Wheat, Black Gram, Udad, etc are also grown in this soil.
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History
There may be very few districts having their very own historical heritage. Dangs was
known as “Dakaranya or Dandak” during the period of Ramayana, and this is why its
folksongs are filled with stories of Ram and Sita. And Even today, the people of Dangs
greet each other saying “Ram-Ram”. However stranger a person may be, a greeting
with “Ram-Ram” would come naturally to its people.
Pandavas are also believed to have roamed and stayed in the Dangs. Even today one
can find a cave in Pandava village near Dangs. The kings of Maurya dynasty, King
San Praas, King Satya Vahan, and the kings of Kahatra and Abhir dynasties have ruled
this district. Its neighbours, the kings of Chanakya dynasty have also ruled it.
In the 14th century, the kings of Dangs got separated from the Mughals and
established their independent rule and this was the place where Shivaji established its
military base when he attacked Surat in 1664 AD. Even today, Shivaji’s military
establishment is known as “Lashkari Amba”. During the era of British rule, with the
help of the Marathas, the British convinced the rulers of Dangs to give them the
protection in the forests in return for a good administration in their state. In this way,
the rulers of the Dangs were deceitfully made the puppets in the hands of the British.
The Dangs District Population 2011
In 2011, The Dangs had population of 228,291 of which male and female were
113,821 and 114,470 respectively. In 2001 census, The Dangs had a population of
186,729 of which males were 93,974 and remaining 92,755 were females. The Dangs
District population constituted 0.38 percent of total Maharashtra population. In 2001
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census, this figure for The Dangs District was at 0.37 percent of Maharashtra
population.
The Dangs Literacy Rate 2011
Average literacy rate of The Dangs in 2011 were 75.16 compared to 59.65 of
2001. If things are looked out at gender wise, male and female literacy were 83.06 and
67.38 respectively. For 2001 census, same figures stood at 70.68 and 48.51 in The
Dangs District. Total literate in The Dangs District were 140,968 of which male and
female were 77,314 and 63,654 respectively. In 2001, The Dangs District had 89,586
in its district.
Description 2011 2001
Actual Population 228,291 186,729
Male 113,821 93,974
Female 114,470 92,755
Population Growth 22.26% 29.59%
Area Sq. Km 1,766 1,766
Density/km2 129 106
Proportion to Gujarat Population 0.38% 0.37%
Sex Ratio (Per 1000) 1006 987
Child Sex Ratio (0-6 Age) 964 974
Average Literacy 75.16 59.65
Male Literacy 83.06 70.68
Female Literacy 67.38 48.51
Total Child Population (0-6 Age) 40,743 36,547
Male Population (0-6 Age) 20,743 18,510
Female Population (0-6 Age) 20,000 18,037
Literates 140,968 89,586
Male Literates 77,314 53,339
Female Literates 63,654 36,247
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Child Proportion (0-6 Age) 17.85% 19.57%
Boys Proportion (0-6 Age) 18.22% 19.70%
Girls Proportion (0-6 Age) 17.47% 19.45%
The Selected Cooperative Societies And Its Management :
Introduction and Background
Selected Ambika Bagayat Sahkari Mandali,at Jamplapada village in Dang district is an
established on 23.03.2007. this area is highly rural area. But now Management Cooperative
Society’s Employee Very Honestly and Good working So, Every year this Cooperative
Society Net Profit Achhivement.So this Cooperative society taken good Idea and Strong
planning policy has very good. this Cooperative society’s goal is tribal areas development and
farmer’s welfer activity.this cooperative society sales and Financial support by Dhruva Bife
At Vansada taluka in Lachhakadi.
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Selected Cooperative society Management Committee :
Shree Chinubhai Laxmanbhai Bhoye Precident
Shree Shantilal Lallubhai Birari Member
Shree Kolgabhai Devubhai Pawar Member
Shree Madhavrawbhai Ramabhai Palve Member
Shree Mansubhai Kalubhai Wagh Member
Shree Haribhai Jamsubhai Tumda Member
Shree Chhaganbhai R.Kahdole Member
Shree Niteshbhai Manubhai Dhoom Member
Shree Maganbhai Mahdubhai Kanat Member
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Shree Hastirambhai Manubhai Bagul Member
Shree Devrambhai Mahdubhai Bhoye Member
Shree Manjulaben Maganbhai Chaudhri Member
Shree Bapjibhai Lakhmabhai Gavli Member
Shree Dhirubhai Devjibhai Kuvar Member
Employee of Credit Cooperative Society
Shree Chintubhai A Gavit Manager
The Selected Cooperative Societies And Its Management By
Dhruva Bife
Introduction and Background
Organizational Structure
VASUNDHARA was promoted by BAIF in 1995 as an independent organization to take
up marketing of the produce from the wadis. The set of organizations through which
procurement, processing and marketing of the produce from the wadis is managed
include:
BAIF/Dhruva, the promoting organization
The individual production units, the wadis or orchards owned by each tribal family,
SHGs for women which take up vermi-composting inputs for the wadi, as well
as marketing
The Ayojan Samitis, the informal village organizations which manage the processing
Their federations, the tribal co-operatives. VASUNDHARA, the mango and cashew
marketing co-operative is one of them. The marketing co-operative has processing
agencies for cashew and mango, for e.g. Kaprada for cashew and Vansda for mango
pulping and pickling.
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Production Process
The production process involves the following steps:
1. Wadi Production*
2. Collection by Ayojan Samiti
3. Decentralized primary processing centers
4. Finishing unit in the co-operative – Vasundhara, Kaprada
5. Federated marketing team.
The produce of the wadis in the form of mango and cashew is procured by
the Ayojan Samitis. The quantities of mango are notified wadi wise to the Ayojan
Samiti, which fixes a particular date and time for the produce to be brought for
processing at the primary processing centers. This ensures that the fruit does not
perish due to lack of facilities in the temporary premises, the village schools in
this case, for processing of mango. On receipt of the semi-processed product the
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marketing co-operative routes the payment to the individual wadi owners, with an
additional commission of one rupee per kilo to the Ayojan Samiti.
The Wadi IdeaWastelend Devlopment Activities
Tribals were migrating to work in nearby mango orchards, but the reality was, the
tribal farmers aspired to own the orchard that they worked in. The farmers each
typically owned 3-5 acres of wasteland. While some paddy was grown during the
monsoon, water was a scarce resource in the non-monsoon months because of the
undulating nature of the land. There was ample rain and the farmers had skill and
experience in growing mango, but the challenge was to supply a working model
that would transform the land of each farmer into a mango orchard
Dhruva coupled the skill of farmers with the agro-climatic suitability of the land to
come up with the wadi idea. Dhruva had to raise the capital for supporting the
activity of each wadi, as well as for fertilizers and pesticides for four years.
Starting with the tried and tested soil and water conservation methods, Dhruva
compensated farmers who took up soil conservation and pit digging activities on
their own land. Before planting mango, Dhruva experimented with various
different combinations of trees for maximizing returns and reducing risks. Mango
varieties were chosen with the market in view, but grafted saplings were used to
increase sturdiness and adaptability to the local terrain. An agricultural expert
from KFW, Germany, did a survey and recommended that cashew should be
included. Understanding the need for fodder in the cattle rearing area, fodder
plants were planted around the border. Eventually the farmer moved into the
orchard, and grew a kitchen garden for his family’s consumption.
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11 tribal cooperatives have been established in DHRUVA’s operational area. Each
Cooperative covers around 10-15 villages. The members, both women and men are
participants of the Comprehensive Tribal Development Programme. The cooperatives
are involved in commercial and promotional activities needed for wadi produce such as
procurement, processing and marketing of agricultural produce of members mainly
mango and cashew, operation of Agro Service Centres, mango graft trading, roof tiles
trading, etc. Cashew processing remains the major activity of these cooperatives.
Selected Cooperative Society Under Covered
Villages
Dang District : Valsad District
Villages Name Village Name
1. Jamlapada 1. Dhamni
2. Barkhandhya 2. Mengha
3. Degadpada 3. Pengha
4. Khirmani 4. Tamchhadi
5. Bhadarpada 5. Hedari
6. Chikar. 6. Dhakval
7. Chichod 7. Makadbandh
8. Sadadmal 8. Veribhawada
9. Dhangadi
10. Uga-Chichpada 11. Kunda
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Chapter – 2
Literature Review
Literature review of co-operative societies operating at international level, in India and
Gujarat.
Dr. Ruchira Prasad And Dr. Ruchira Prasad ( 2013 ) 1 in the article “A Case Study of
Amul Cooperative in Indian in Relation to Organizational design And Operational
Efficiency ” This research paper a relationship between the designs of an organization with its
operational efficiency indicators has been examined in the context of Amul.. The factors were
studied in context to a cooperative form of organization and while comparing with the corporate
form, it was found that the design of the basic structure is somewhat different as it believes in
the federal form of structure each unit is independent of each other. It is a popular belief that co-
operatives are a failure, but Amul with Co-operative Structure is a grand success. Amul has an
appropriate blend of policy makers, technology and a support system to the milk producers
without disturbing their agro-economic system and ploughing back the profits, by prudent use of
men, materials and machines.
Deepali Kapoor Suri* and Shilpi Singhal ( 2013)2 in the article “ Comparative Analysis of
Financial Perfomance of Indian Farmers Feertilizers Cooperative Ltd (IFFCO) ” The
study is an attempt being made to identify the financial performance and how the performance is
going on for the last five years, of Indian Farmers Fertiliser Co-operative Limited, popularly
known as IFFCO, on the basis of establishing relationship between the items of balance sheet
and profit &loss account. For establishing the relationship various types of ratios such as
solvency, liquidity, activity and profitability are used. The period of study is taken from the year
2007-08 to 2011-12.t can be concluded from the study of 5 financial periods of IFFCO that the
maximum Financial Indicators of IFFCO are not at a very good position. From the analysis of
main Financial Indicators it is clear that Operating Profit to Turnover Ratio, Fixed Assets
Turnover Ratio, Debt Equity Ratio, Current Ratio, Liquidity Ratio, etc are at a desirable
position. However, company’s Return on Capital Employed, Profit before tax to Turnover, etc
were undesirable as compared to Previous Years.
Anil Kumar Soni and Dr. Harjinder Pal Singh Saluja ( 2012)3 in the article “ Role of
Cooperative Bank in Agricultural Credit : As Study Based on Cahhattisgarh ” The
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cooperative banking sector is one of the main partners of Indian banking structure, the
cooperative banks have more reach to the rural India, through their huge network of credit
societies in the institutional credit structure. The cooperative sector has played a key role in the
economy of the country and always recognized as an integral part of our national economy.
Cooperatives have ideological base, economic objects with social outlook and approach. The
cooperative covers almost all cent percent villages in India. The cooperative form of
organization is the Ideal Organization for economically weaker sections in the country.
According to recent study by World Bank and National Council for Applied Economic
Research, the Primary Agriculture Credit Societies (PACS) amount for about 30 percent of
micro credit in India. This paper attempts to analyze the role of co-operative bank in agricultural
credit.
Dr. M. S. Ramananda And Dr. M. Jayaprakash ( 2012) 4 in the article “ Impact on
Vydhanadhan Committee Recomadations Of Wangaplly Primar Agricultural Cooperative
Credit Society ” This study was an attempt to decipher the factors, which contribute to the
financial health of the PACS, which form the base of the short-term cooperative credit structure
prevalent in India. The study considered recovery performance of the PACS as the most suitable
indicator of their performance. The results indicate that as the PACS have drifted from some of
the core principles of cooperation, their recovery performance has suffered. As membership size
has grown over the years in case of the PACS, their recovery has taken a beating because peer
pressure, which ensures recovery, has gradually weakened. Thus there is a need to relook into
the issue of optimal member size of the cooperatives in the interest of their viability. In
conformity with popular perception, government‟s contribution to the share capital is found to
be detrimental for the recovery performance of the PACS. Government‟s contribution in share
capital not only gives it a hand to meddle with the affairs of the PACS; it might also be inducing
indulgence amongst members because of the comfort of government bail out in case of
difficulty. The latest amendment in the Vaidyanthan Committee‟s recommendation that
Government can retain 25 per cent of equity capital in case of PCAS needs to seriously given a
second thought. The attempt should be either to completely dislodge government equity in the
PACS or not to consider the PACS as cooperatives but to accept them as quasi government
ventures for which the parameters of performance needs to be revisited. The study also found
that as deposits grow in proportion to borrowings, the recovery performance is adversely
affected.
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Dr.Murali Vallapureddy (2013)5 in the article “People of rural India face a lot of hardships
to earn livelihood. This study on “Performance of Women Cooperative Dairy – A Study on
Mulkanoor Women Cooperative Diary in Andhra Pradesh”, the MWCD (Swakrushi) is a
promising community enterprise in enhancing livelihoods of large numbers of rural producers. It
began its operations in Aug’ 2002 and in Mar’12, it has been providing services to its 20,118
members. The aim of the study is an attempt to identify the various factors/dimensions that have
contributed to the growth of this rural women initiative. The focus on analysis of the growth
path is particularly important as the development sector is trying more and more to discover the
process of enhancing large number of livelihoods for rural poor Today the Mulkanoor
cooperative society is having 20,118 members, 109 societies, 68 employees (in the economic
year 2011-12 annual report). Thus, Mulkanoor cooperative society is the role model in the
country and there is need of sincere efforts to strengthen the cooperative societies in India on the
same line, if we are concern to meet the demand of food, cloth, shelter and employment to our
increasing population.
Dr. M.S. Ramananda ( 2012)6 in the article “ Ratio Analysis of Hydrabad Agricultural
Cooperative Association Operational Functions ” This study is based on secondary sources
only. The secondary data were collected from HACA office, HACA Bhavan, published,
unpublished and Internet. The study period was during the year 2004 to 2009. The HACA
operational aspects as per the data analysis it was not uniformly distributed among the years.
During the reference period the HACA data analysis showed negative ratios could be observed.
The shareholder's capital has risen quite a bit if you compare the balance sheet numbers versus
the previous year. Again this could mean a number of things, there are a couple reasons that this
could have happened. Perhaps they've made acquisitions which were partially paid for through
the issue of stock, or maybe they took on additional share capital from another firm. Another
possible reason is that they had to issue more shares because they were strapped for cash. For
the most part a rise in share capital is better than a rise in debt, but too much of a rise could be
cause for alarm.
Narayana Gowd Talla , Anand Bethapudi and Reddeppa Reddy G.( 2011) 7 in the project
“ An Analytical Study on Financial Perfomace of Dharmavaram Cooperative Bank,Ap,
India ” The concept of “Financial Inclusion” is inbuilt in the structure of Urban Co-operative
Bank. As Urban Co-operative Banks are mostly working in the rural and semi-urban areas .They
are the back bone of banking system and contribute for growth of the nation .The researcher
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aims to investigate the financial performance of Dharmavaram Urban Cooperative bank. The
study employs exploratory research design which relies on secondary data. The analyzed data
reveals that there was significant growth in the deposits mobilization, membership, loans and
advances, working capital, reserves, owned funds, Total income, Total expenditure and over
dues with reference to DUCB. There is no significant growth in share capital per member with
CGR of 4.50.There was no significant increase in the total cash with the bank which is growing
at CGR of 2.54.There was no significant growth in CDR with a CGR of 11.02.There was
significant difference in the growth and composition of income. The total expenses were
increasing significantly with CGR of 9.68. Even though there was increasing trend in the Total
income earned during the study period except in the year 2006-07 it was statistically significant
with CGR of 7.13 but the EPS of DUCB was not enhanced which is statistically in significant
during the study. Therefore the performance of DUCB was moderately satisfactory. For
improving its performance, it has to concentrate on recovery performance, controlling expenses,
robust risk management practices and diversifying their operations.
Ramesh Chander ( 2010) 8 in the research “ Financial Viability And Perfomace Evaluation
of Coperative Credit Institutions In Hariyana ( India ) ” Co-operative Banks are organized
and managed on the principals of co-operation, self-help, and mutual help. These have been
playing imperative role in Indian financial system with broad network in both urban and rural
areas. Around three hundred and seventy two District Central Co-operative Banks (DCCBs)
with large number of branches and extension counters cater to the needs of nearly one lakh
societies in rural India. In Haryana nineteen DCCBs with more than two hundred branches have
been facilitating self-sufficiency in food grain production, creation of better employment
opportunities and organizational strength to the rural people through banking services. Recently,
the scams in co-operative sector, failure and closure of unviable branches, imposition of penalty
by the regulators and payment of heavy money claims due to bankruptcy of co-operative banks
etc. are few significant reasons which persuade to inquire into the financial affairs of these
institutions. Many co-operative banks became insolvent and others are on the brink of mergers
or acquisition. The present study was conceptualized to examine the financial viability,
efficiency and performance of four DCCBs operating in Gurgaon division in Haryana (India),
viz. Gurgaon, Faridabad, Mahendergarh and Rewari for a period of twelve years (1997-98 to
2008-09) by financial analysis and z-score analysis. The financial parameters here taken are
profitability, liquidity, efficiency, solvency, risk and bankruptcy.
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Paul Trupo (1997)9 in the article “ Agricultural Cooperation and Horticultural Produce
Marketing in Southwest Virginia ” This study methodology used in this research include
surveying and interviewing marketing specialists, co-op managers, growers, extension agents,
horticulturists, and other experts involved with both successful and failed cooperative efforts.
The data gathered from these interviews has been used to identify key factors that have
contributed to the success or failure of the other cooperative efforts. Based on the key factors
identified from the research, a specific cooperative structure has been developed for the
Southwest Virginia growers. This organizational structure incorporates into its legal
documentation (bylaws, business plan, and marketing agreement) the critical factors that must
be carried out by members, management, extension, and marketers in order to increase the
probability for the cooperative’s long-term survival and profitability.
Kareem, R.O, Arigbabu, Y.D, Akintaro, J.A & Badmus, M.A(2012)10 in the research “ The
Impact of Co-Operative Society on Capital Formation (A Case Study of Temidere Co –
Operative and Thrift- Society, Ijebu- Ode, Ogun State, Nigeria)This study is on the impact
of co-operative societies on capital formation using a casestudy of Temidere-co-operative and
Thrift-society, Ijebu-ode, Ogun state. The objectives are to: identify the socio-economic
characteristics of the cooperators in the study area; identify the uses of funds of co-operative
societies; determine to what extent co-operatives have benefited members in financing their
investments; identify problems militating against the effectiveness of co-operative societies; and
offer suggestions and recommendations on how to improve the cooperative societies towards
enhancing the capital formation of members. The study adopted a non parametric method of
analysis which involved Chi-Square method, descriptive statistics and correlation analysis to
achieve the stated objectives.
Dr. Kaneez Fatima Sadriwala and Dr. Ayoob.C.P. ( 2004) 11 in research “ Efficiency
Structure of Co-operative Agricultural Marketing Societies - A Case Study of Coconut
Marketing Societies of Kerala State” One of the peculiar features of the Kerala's coconut
sector is that it is cultivated in homestead land and most of the growers are tiny or marginal
farmers. Coconut marketing here is unorganized. It is cultivated in an area of 9.36 lakh ha,
which is about 50 per cent of the total area under coconut cultivation in India. The annual
production of coconut in the State is 5,496 million nuts, which is 44.00 per cent of the total
production in the country. Lack of irrigation is one of the major reasons attributed to the low
level of productivity of coconut in Kerala State. Scarcity of irrigation water is also considered as
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one of the major constraints in resource use management in coconut farming in Kerala. This
paper attempts to examine the efficiency structure of co-operative marketing societies which are
involved in the coconut marketing in Kerala. In cooperative organizations efficiency structure
contains a combination of different factors such as financial performance of the societies,
membership strength and their attitude towards the society, procurement and marketing of
agricultural produce, Input supply, infrastructure supply, Link with apex body etc,. From the
analysis of the efficiency structure of coconut co-operative marketing societies in Kerala, it can
be inferred that (1) in general, the efficiency level of the coconut marketing societies in the state
is above medium (2) when comparing the efficiency level of the societies among the different
affiliations, it shows that; (a) there is significant differences in the level of efficiency of the
coconut co-operative marketing societies affiliated to single apex societies (Kerafed or
Marketfed) ;and both the apex bodies.
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Chapter – 3
Research Methodology
(3.1) Title Name of Study
(3.2) Research area of Organization
(3.3) Importance of the Study
(3.4) Scope of the study
(3.5) Research Gap
(3.6) Object of Proposed Study
(3.7) Testing of hypothesis
(3.8) Source of Information
(3.9) Tools of Data Analysis
(3.10) Limitation of the study
(3.11) Chapterization
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(3.1) Title of the Study :
Financial Analysis of Cooperative Society
( Special Reff. to Valsad And Dang District in Gujarat )
(3.2) Area :
a) Organisation :
Shree Dhamni Vibhag Bagyati Sahkari Mandali Ltd,Dhamni
Village .,Valsad District
Shree Ambika Bagayat Sahkari Mandali Ltd,Jamlapada village,
Dang District
b) Details of the Selected Areas:
Brief of the area selected for the Study considered as a backward area
falls under Selected Valsad. And Dang district of Gujarat State of India.
(3.3) Significance of the Study :
Today’s world had become very competitive. In each field thousand’s of
competitors has entered the market. In the changing market scenario equipped with
science and technology, they are struggling to survive in the market, whether it is a field
of knowledge, business or any other Profession. Even the Indian economy is not free
from the air of liberalization, privatization and globalization. The public sector has to
become more active and should also take necessary measures to fit them in the changing
economic scenario. With this objectives in mind the research on “Shree Dhamni Vibhag
Bagayti sahkari Mandali Ltd And Shree Ambika Bagayat sahkari Mandali. is
undertaken. Where the financial performance of the same will be conducted keeping the
current situation on the top. A study on the problem faced and its relevant solution, so
that the people of these areas get good service from this co-operative society. This co-
operative society can act as a role model to be followed by other society of the South
Gujarat. Of Gujarat state’s Other co-operative society can follow the management
system for improving the financial position of the society.
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(3.4) Scope of the Study:
A part from the selected co-operative societies, a similar study can be conducted
for other co-operative societies of taluka of Dharampur ( Valsad) and Ahva taluka (
Dang) They are as follow :
Various service co-operative Society
Credit Cooperative society
Handicraft Industry
Consumer Cooperative Society
Processing Cooperative Society
Milk Cooperative society.
For the study purpose, researcher have selected One this area most successful
working Co-operative Society of Valsad District & Dang District of Gujarat state
.There are lot of scope for any researched to conduct the study for above mentioned
society The present study will focus only on financial analysis of the co-operative
society; one can also conduct the study on same co-operative society, but from different
angle like, marketing of the product falls under the preview of the society. Other
opportunities can also be explore for the product. Identifying the problems face by the
society or comparison between one or more co-operative society can be undertaken.
Even comparison between one taluka co-operative society of same category can be done
with similar type in some another taluka of same district or can also opportunities for
some another district or state.
(3.5) Research Gap:
After reviewing the literature related to co-operative society published in
various newspaper, journal, magazine and periodic etc, researcher has conducted the
study based on financial data, where various financial tools for analysis the financial
position of the co-operative society will be used. The study is limited to one Credit co-
operative society. The data relevant and useful for the study will be collected from
financial data prepared by the co-operative society. If required, from time to time a
personal visit to the selected co-operative society will also be done, so as to gather
more information related to its activity and function.
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(3.6) Objectives of the proposed study
To understand the working of Co-operative Societies Dang and Valsad district.
To study the financial performance of selected Co-operative Societies.
To make comparative study of the selected Co-operative Societies.
To make suggestions for the betterment of the Co-operative Societies in general and
selected co-operative societies in particular.
(3.7) Hypothesis Test of The Study :
Ho There is no significance difference in the various financial ratios of
Dhamni and Jamlapada Cooperative societies.
H1 There is significance difference in The various financial ratios of Dhamni
and Jamlapada Cooperative societies.
(3.8) Source of Information:
Personal talk with the chairman of the selected co-operative society.
Personal talk and Discussion with Mr. Dhirubhai D.Kuvar And Chintubhai Gavit
( Manager)
Personal talk with the accountant of the selected co-operative society.
Visit to the district Information department center of Selected district.
Members of the co-operative society.
Other documents related to the study will be used:
Newspaper
Monthly Magazine
Gram Swaraj Magazine
Radio Programme related to the farmer
Books/literature/research papers/articles etc
Internet
Research conducted by other state co-operative society
(3.9) Tool of data analysis and methodology :
Ratio Analysis & Trend Analysis
Hypothesis ‘ T ’ test Applied
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 35
(3.10) Limitation of the Study
1. The study has been conducted over a limited period of ( 6) Six years only.
2. The study is mainly based on secondary data.
3. The study is limited to a two Selected Cooperative society only.
4. The study is based on consolidated financial statement, which may lead to some
errors and assumptions.
(3.11) Chapterization :
The research is conducted in the district Valsad And Dang of Gujarat
State and for the same the study is divided into six (06) chapters as under:
Chapter 1 : Overview of Co-operative Society.
(A) Introduction to the co-operative society ,meaning of cooperative society, history
background of cooperative society ,different type of cooperative society,
Advantages of co-operative society to the people,dis-advantages,
(B) Introduction to financial analysis, understanding of income and revenue, balance
sheet, advantages of financial analysis, limitation, and understanding of ratio
analysis as a tool for evaluating financial position.
(C) Understanding of the selected co-operative society, information related to Selected
taluka,working and function of the selected co-operative society and its
management.
Chapter 2 : Literature review of co-operative society operating at
international level, in India and Gujarat.
Chapter 3 : Research Methodology
Research area, Importance of the study, its objectives and
hypothesis, Source of data collection, research gap , Scope of the
Study, types of study, chapterisation, data collection and
limitation of the study.
Chapter 4 : Data Analysis of last 06 years of the selected
Co- operative Society
Chapter 5 : Findings and Suggestions.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 36
Chapter – 4
Data Analysis
Financial Ratio Analysis of Selected Cooperative Society :
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 37
Introduction of Financial Ratios :
Financial ratios are used to evaluate a company- Its Financial Strength, Management
effectiveness, Efficiency and Profitability.
Ratios look at the fundamental financial aspects of the company. It gives you an idea
about –
The current financial position of the company
where the company ranks among its peers and if it is properly priced by the
market as reflected in its stock’s price
Overall, it helps you to decide if a particular company is worth getting involved
with.
(A) SOLVENCY RATIO :
The solvency ratio is only one of the metrics used to determine whether a company can
stay solvent. Other solvency ratios include debt to equity, total debt to total assets, and interest
coverage ratios. However, the solvency ratio is a comprehensive measure of solvency, as it
measures cash flow – rather than net income – by including depreciation to assess a company’s
capacity to stay afloat. It measures this cash flow capacity in relation to all liabilities, rather than
only debt. Apart from debt and borrowings, other liabilities include short-term ones such as
accounts payable and long-term ones such as capital lease and pension plan obligations.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 38
1. DEBT EQUITY RATIO :
The debt-to-equity ratio is a financial ratio indicating the relative proportion of entity's
equity and debt used to finance an entity's assets. This ratio is also known as financial
leverage.Debt-to-equity ratio is the key financial ratio and is used as a standard for judging a
company's financial standing. It is also a measure of a company's ability to repay its obligations.
When examining the health of a company, it is critical to pay attention to the debt/equity ratio.
Table : 1 Debt Equiety Ratio of Dhamni And Jamlapada Cooperative Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR TOTAL
DEBT
NET
WORTH
RATIO IN TOTAL
DEBT
NET
WORTH
RATIO IN
PERCENTA
GE
PERCENTA
GE
2008-09 878165 1073321 0.82 292355 250092 1.17
2009-10 240879 1498177 0.16 262559 459572 0.57
2010-11 387437 2237290 0.17 177074 928252 0.19
2011-12 390330 3095043 0.13 107389 1339638 0.08
2012-13 373334 2745043 0.14 106791 1667833 0.06
2013-14 379434 2745043 0.14 15788 1761290 0.01
Source : Compiled Calculated Data
Interpretation
The table 1 reveals that the Debt Equity ratio of Dhamni Cooperative Societies was
Highest ratio from 0.82 in the year 2008-09. It was at 0.13 ratio in 2011-12, lowest among Six
years. But the ratio in case of Jamlapada Cooperative Societies has discreased over the six
years. It was at its lowest in 2013-14 ( 0.01), after that it has shown almost low increment
every year in Debt equity ratios. from the above it can be concluded that Debt equity position of
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 39
dhamni Cooperative society is better than Jamlapada Cooperative Society.because Jamlapada
Co.society not maintain ratio every year.
Graph : 1 Debt Equity Ratio
0.00
0.50
1.00
1.50
2.00
2.50
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
Jamplapada RATIO INPERCENTAGE
Dhamni RATIO IN PERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 40
2. GEARING RATIO :
The gearing ratio is the proportion of a company's debt to its equity. A high gearing ratio
represents a high proportion of debt to equity, and a low gearing ratio represents a low
proportion of debt to equity. This ratio is similar to the debt to equity ratio, except that there are
a number of variations on the gearing ratio formula that can yield slightly different results.
Table : 2 Gearing Ratio of Dhamni And Jamlapada Cooperative Society
Source : Compiled Calculated Data
Interpretation
The table 2 reveals that the Gearing ratio of Dhamni Cooperative Societies was
Highest from 7.77 in the year 2008-09. It was at 1.58 ratio in 2009-10, lowest among
Six years. But the Gearing ratio in same case of Jamlapada Cooperative Societies has
highest ratio was 4.53 in 2013-14 & 2008-09. It was at its lowest in 2012-13 (1.49 ),
after that it has shown almost average every year in Gearing ratios. from the above it
can be concluded that Jamlapada horticulture Cooperative society position of
Average because no Maintain every year ratio. And Dhamni is maintain average..
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR Short +
Long
te.Debt
Share Equity RATIO IN Short +
Long
te.Debt
Share Equity RATIO IN
PERCENTAGE PERCENTAGE
2008-09 1183613 152300 7.77 292355 64600 4.53
2009-10 240879 152300 1.58 262559 65100 4.03
2010-11 387434 152300 2.54 177074 65300 2.71
2011-12 390330 152300 2.56 107389 71450 1.50
2012-13 373334 152300 2.45 106791 71450 1.49
2013-14 379434 152300 2.49 292355 64600 4.53
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 41
Graph : 2 Gearing Ratio
3. PROPERATORY RATIO :
The proprietary ratio is the inverse of debt ratio. It is a part to whole comparison. The
proprietary ratio measures the amount of funds that investors have contributed towards the
capital of a firm in relation to the total capital that is required by the firm to conduct operations.
7.77
1.582.54 2.56 2.45 2.49
4.53
4.032.71
1.50 1.49
4.53
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
JAMLAPADA RATIO IN PERCENTAGE
DHAMNI RATIO IN PERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 42
Table : 3 Properatory Ratio of Dhamni And Jamlapada Cooperative Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR NET
WORTH
TOTAL RATI
O NET
WORTH
TOTAL RATI
O
RESPONSIBILIT
Y
RESPONSIBILIT
Y
2008-09 1073321 1183613 90.7 292355 295000 99
2009-10 1498177 240879 622.0 459572 262559 175
2010-11 2237290 387434 577.5 928252 177074 524
2011-12 3095043 390330 792.9 1339638 107389 1247
2012-13 2745043 373334 735.3 1667833 106791 1562
2013-14 2745043 379434 723.5 1761290 15788 11156
Source : Compiled Calculated Data
Interpretation
The table 3 reveals that the Properatory Ratio of Dhamni Cooperative Societies was
Highest from 792.9 in the year 2011-12. It was at 90 ratio in 2008-9, lowest among six years.
But the Jamlapada Society Properatory ratio in highest of 2013-14. And lowest ratio in the
year 2008-9 .so concluded that Both Cooperative society management trying to Investors funds
use in Capital both cooperative society. so we can say that Management should create policy
and better use of shareholders capital.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 43
Graph : 3 Properatory ratio
4. FIXED CAPITAL –ASSETS RATIO :
As its name suggests, the fixed-asset-to-equity-capital ratio is made up of two parts:
fixed assets and equity capital. A business's fixed assets are any type of physical assets that have
an expected lifetime of at least one year. Buildings, vehicles, furniture and heavy equipment are
all examples of fixed assets. Equity capital is the money that investors have put into a company.
As a reward for these funds, investors receive part ownership of a business. These investors then
hope that the business thrives and that the value of their shares in a company increases.
0.0 2000.0 4000.0 6000.0 8000.0 10000.0 12000.0
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
RATIO JAMLAPADA
RATIO DHAMNI
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 44
Table : 4 Fixed Capital – Assets Ratio of Dhamni And Jamlapada Cooperative Society
Source : Compiled Calculated Data
Interpretation
The table 4 reveals that the Fixed Capital Assets ratio of Dhamni
Cooperative Societies was Highest from 2.34 in the year 2008-9. It was at 1.69 ratio in 2013-14
lowest among six years. But the Fixed Capital -Assets ratio in case of Jamlapada Cooperative
Societies has highest ratio 19.85 in 2008-09. It was at its lowest in 2010-11 (3.53 ), the above it
can be concluded that Jamlapada Cooperative society position of Better to Dhamni
Cooperative society. Because there ratio. Compare to Dhamni cooperatives more variation to
Jamlapada cooperative society.
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR FIXED
CAPITAL
FIXED RATIO IN FIXED
CAPITAL
FIXED RATIO IN
ASSETS PERCENTAGE ASSETS PERCENTAGE
2008-09 1073321 459319 2.34 250092 12600 19.85
2009-10 1498177 669828 2.24 262559 34747 7.56
2010-11 2237290 1159122 1.93 928252 64637 14.36
2011-12 3095043 1931212 1.60 1339638 379656 3.53
2012-13 2745043 1778735 1.54 1667833 429106 3.89
2013-14 2745043 1622262 1.69 1761290 472540 3.73
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 45
Graph : 4 Fixed Capital – Assets Ratio
Hypothesis Test of Capital Structure Ratio :
‘ T ’ Test Analysis :
Null Hypothesis
Ho : There is no significance difference in the Capital Structure ratios of
Dhamni and Jamlapada Cooperative society
Alternative Hypothesis
H1 : There is significance difference in The Capital Structure ratios of Dhamni
and Jamlapada Cooperative society.
0.00
5.00
10.00
15.00
20.00
25.00
2.34 2.24 1.93 1.60 1.54 1.69
19.85
7.56
14.36
3.53 3.89 3.73
JAMLAPADA RATIO INPERCENTAGE
DHAMNI RATIO IN PERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 46
Table : 5 Hypothesis Test on ‘ T ’ Test Used On Capital Structure Ratio
Interpretation
The calculated P value on Debt Equity Ratio of Dhamni and Jamlapada horticulture
Cooperative society was 0.69 which is More than 0.05 level Hence null hypothesis
accepted and alternative hypothesis is rejected. It can be Canculated that No significance
difference between Dhamni and Jamlapada Cooperative society.
The Gearing Ratio of Dhamni and Jamlapada Cooperative society P Value was 0.45 it is
more than 0.05 level, so null hypothesis accepted.
Properatory ratio of selected cooperative society p value was 0.33 which is More than 0.05
level null hypothesis accepted .it can be concluded that Insignificance of dhamni and
Jamlapada Cooperative society
Fixed Assets Capital ratio p value 0.08 and this value was more than 0.05 level so null
hypothesis accepted. Concluded that there is Insignificance of selected cooperative society.
No. Ratio Mean S.D. Result
Particulars Dhamni Jamlapada Dhamni Jamlapada ‘ P ’
VALUE
Hypothesis
Test
01 Debt Equity
Ratio
0.25 0.34 0.27 0.45 0.69 H0
Accepted
02 Gearing Ratio 2.32 2.85 2.25 1.42 0.45 H0
Accepted
03 Properatory
Ratio
690.21 2932.87 257.135 4299.70 0.33 H0
Accepted
04 Fixed Capital-
Assets Ratio
1.80 6.61 0.33 6.81 0.08 H0
Accepted
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 47
(B) LIQUIDITY RATIOS :
Liquidity ratios are the ratios that measure the ability of a company to meet its short term
debt obligations. These ratios measure the ability of a company to pay off its short-term
liabilities when they fall due.
The liquidity ratios are a result of dividing cash and other liquid assets by the short term
borrowings and current liabilities. They show the number of times the short term debt
obligations are covered by the cash and liquid assets. If the value is greater than 1, it means
the short term obligations are fully covered.
1. CURRENT RATIO :
The current ratio is balance-sheet financial performance measure of company liquidity.
The current ratio indicates a company's ability to meet short-term debt obligations. The
current ratio measures whether or not a firm has enough resources to pay its debts over the
next 12 months. Potential creditors use this ratio in determining whether or not to make
short-term loans. The current ratio can also give a sense of the efficiency of a company's
operating cycle or its ability to turn its product into cash.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 48
Table : 6 Current Ratio of Dhamni And Jamlapada Cooperative Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
CURRENT CURRENT RATIO IN CURRENT CURRENT RATIO IN
ASSETS LIABILITY PERCENTAGE ASSETS LIABILITY PERCENTAGE
2008-09 1847515 305448 6.05 468482 292355 1.60
2009-10 1069227 240879 4.44 597284 263459 2.27
2010-11 1476602 387434 3.81 1040690 177074 5.88
2011-12 1122661 390330 2.88 969272 107389 9.03
2012-13 811511 373334 2.17 1255518 106791 11.76
2013-14 796856 379434 2.10 1195676 15788 75.73
Source : Compiled Calculated Data
Interpretation
The table 5 reveals that the Current ratio of Dhamni Cooperative Societies was varied
from 2.10 to 6.05 . It was at 2.10 ratio in 2013-14, lowest among six years.13. But the Current
ratio in case of Jamlapada Cooperative Societies has increased over the six years. It was at its
lowest in2008-09 (1.60 ), after that it has shown almost increment in Current ratios. from the
above it can be concluded that Financial position of Jamlapada Cooperative society is better
than Dhamni Cooperative Society. because Dhamni Co.society not maintain ratio every year.
So we can say Jamlapada cooperative society financial efficiency has good. Dhamni
Cooperative society management should planning to better improvement of current ratio.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 49
Graph : 5 Current Ratio
2. QUICK RATIO :
The quick ratio is a measure of a company's ability to meet its short-term obligations using its
most liquid assets (near cash or quick assets). Quick assets include those current assets that
presumably can be quickly converted to cash at close to their book values. Quick ratio is viewed
as a sign of a company's financial strength or weakness; it gives information about a company’s
short term liquidity. The ratio tells creditors how much of the company's short term debt can be
met by selling all the company's liquid assets at very short notice.
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
JAMLAPADA RATIO INPERCENTAGE
DHAMNI RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 50
Table : 7 Following table : Quick Ratio of Dhamni And Jamlapada Cooperative Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
QUICK QUICK RATIO IN QUICK QUICK RATIO IN
ASSETS LIABILIT
Y
PERCENTAG
E
ASSET
S
LIABILIT
Y
PERCENTAG
E
2008-
09 389654 305448 1.28 455170 292355 1.56
2009-
10 771244 240879 3.20 524327 263459 1.99
2010-
11 1454155 387434 3.75 900965 177074 5.09
2011-
12 1066251 390330 2.73 947940 107389 8.83
2012-
13 760785 373334 2.04 979486 106791 9.17
2013-
14 796856 379434 2.10 613447 15788 38.86
Source : Compiled Calculated Data
Interpretation
The table 6 reveals that the Quick ratio of Dhamni Cooperative Societies was varied
from 1.28 to 3.75 . It was at 1.28 ratio in 2008-09, lowest among six years again it increased
to 3.20 in 2009-10 and discrease in 2.10 year 2013-14, But the Quick ratio in case of
Jamlapada Cooperative Societies has increased over the six years. It was at its lowest in 2008-
09 ( 1.56 ), after that it has shown almost increment in every year Quick ratios. from the above it
can be concluded that Financial position of Jamlapada Cooperative society financial strenght is
better than Dhamni Cooperative Society. because Dhamni Co.society ratio has low compatre to
Jamlapada cooperative societies every year. So we can say Jamlapada cooperative society
financial Strenght has good.and management decision policy good working
.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 51
Graph : 6 Quick Ratio
Hypothesis Test of Liquidity Ratio :
‘ T ’ Test Analysis :
Null Hypothesis
Ho : There is no significance difference in the Liquidity ratios of Dhamni and
Jamlapada Cooperative societies.
Alternative Hypothesis
H1 : There is significance difference in the Liquidity ratios of Dhamni and
Jamlapada Cooperative societies.
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
DHAMNI RATIO INPERCENTAGE
JAMLAPADA RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 52
Table : 8 Hypothesis Test on ‘ T ’ Test Used On Liquidity Ratio
Interpretation
Above table The calculated P value on Current Ratio of Dhamni and Jamlapada horticulture
Cooperative society was 0.26 which is More than 0.05 level Hence null hypothesis accepted and
alternative hypothesis is rejected.indicate the Current Assets more than compare to current debt.so. It
can be Canculated that No significance difference between Dhamni and Jamlapada Cooperative
society.
The Liquidity Ratio of Dhamni and Jamlapada Cooperative society P Value was 0.20 it is more than
0.05 level, so null hypothesis accepted and alternative hypothesis rejected. so indicate the selected
Cooperative Societies have quick Assets stability has good and Satisfied.
No. Ratio Mean S.D. Result
Particulars Dhamni Jamlapada Dhamni Jamlapada ‘ P ’
Value
Hypothesis
Test
01 Current Ratio 3.08 20.93 1.51 28.68 0.26 H0
Accepted
02 Quick Ratio 2.76 12.78 0.89 14.06 0.20 H0
Accepted
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 53
(C) PROFIABILITY RATIOS :
Profitability ratios measure a company’s ability to generate earnings relative to sales,
assets and equity. These ratios assess the ability of a company to generate earnings, profits and
cash flows relative to relative to some metric, often the amount of money invested. They
highlight how effectively the profitability of a company is being managed.
Common examples of profitability ratios include return on sales, return on investment, return on
equity, return on capital employed (ROCE), cash return on capital invested (CROCI), gross
profit margin and net profit margin. All of these ratios indicate how well a company is
performing at generating profits or revenues relative to a certain metric.
1. GROSS PROFIT RATIO :
Gross profit margin (gross margin) is the ratio of gross profit (gross sales less cost
of sales) to sales revenue. It is the percentage by which gross profits exceed production
costs. Gross margins reveal how much a company earns taking into consideration the
costs that it incurs for producing its products or services. Gross margin is a good
indication of how profitable a company is at the most fundamental level, how
efficiently a company uses its resources, materials, and labour. It is usually expressed
as a percentage, and indicates the profitability of a business before overhead costs; it is
a measure of how well a company controls its costs. Gross margin measures a
company's manufacturing and distribution efficiency during the production process.
The higher the percentage, the more the company retains on each Rs of sales to service
its other costs and obligations, the better the company is thought to control costs.
Investors use the gross profit margin to compare companies in the same industry and
also in different industries to determine what are the most profitable. A company that
boasts a higher gross margin than its competitors and industry is more efficient.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 54
Table : 9 Gross Profit Ratio of Dhamni And Jamlapada Cooperative Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
GROSS
SALES
RATIO IN GROSS
SALES
RATIO IN
PROFIT PERCENTAGE PROFIT PERCENTAGE
2008-09 437387 1951365 22.41 209006 1039558 20.11
2009-10 465184 3026474 15.37 396443 2685151 14.76
2010-11 906062 3590618 25.23 741988 2041684 36.34
2011-12 5270 2317733 0.23 640988 4141532 15.48
2012-13 66815 854164 7.82 429199 3633188 11.81
2013-14 9690 2631675 0.37 622181 2640915 23.56
Source : Compiled Calculated Data
Interpretation
The table 7 reveals that the Gross Profit ratio of Dhamni horticulture Cooperative
Societies was 22.41 ratio in 2008-09, highest among six years.it discreased to 15.37 in 2009-
10 and Increase in 25.23 year 2010-11, and all next year ratio was low and last year was lowest
ratio, But the Gross Profit ratio in case of Jamlapada horticulture Cooperative Societies highest
in 36.34 in 2010-11. And lowest ratio was 11.81 in 2012-13. It can be concluded that
Jamlapada Cooperative society has good gross profit ratio every year maintain. Dhamni
cooperative society only two year good ratio and all year low ratio. And last study year 2013-14
was very low is not satisfied. It can show is Jamlapada Coperative society Cost of good sale
and Goods Sale policy has good and Satisfied. And Dhamni Cooperatives Management should
take several step and improve the sale policy.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 55
Graph : 7 Gross Profit Ratio
2. NET PROFIT RATIO :
The net profit percentage is the ratio of after-tax profits to net sales. It reveals the remaining
profit after all costs of production, administration, and financing have been deducted from sales,
and income taxes recognized. As such, it is one of the best measures of the overall results of a
firm, especially when combined with an evaluation of how well it is using its working capital.
The measure is commonly reported on a trend line, to judge performance over time. It is also
used to compare the results of a business with its competitors.
Net profit is not an indicator of cash flows, since net profit incorporates a number of non-cash
expenses, such as accrued expenses, amortization, and depreciation.
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
DHAMNI RATIO IN PERCENTAGE
JAMLAPADA RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 56
Table : 10 Net Profit Ratio of Dhamni And Jamlapada Cooperative Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
NET
SALES
RATIO IN NET
SALES
RATIO IN
PROFIT PERCENTAGE PROFIT PERCENTAGE
2008-09 103930 1951365 5.33 184200 1039558 17.72
2009-10 94943 3026474 3.14 209771 2685151 7.81
2010-11 643628 3590618 17.93 407999 2041684 19.98
2011-12 -431499 2317733 -18.62 142791 4141532 3.45
2012-13 -96831 854164 -11.34 195078 3633188 5.37
2013-14 -476727 2631675 -18.11 -28304 2640915 -1.07
Source: Compiled Calculated Dat
Interpretation
The table 8 reveals that the Net Profit ratio of Dhamni horticulture Cooperative
Societies was varied from 17.93 to -18.62. It was highest ratio at 17.93 ratio in 2010-11,
lowest among six years highest ratio was -18.62 year 2011-12. But the Net Profit ratio in case
of Jamlapada Cooperative Societies highest in 19.98 in 2010-11. And lowest ratio was 2013-
14 in -1.07 , It can be concluded that Dhamni Cooperative society has three study period has net
loss. And Jamlapda cooperative society has only one time has net loss. So I can say Jamlapada
cooperative society Financial efficiency and Financial Expenses control policy has very good to
compare with dhamni Cooperative society.So Dhamni Coooperative Society should Financial
Expense contoliing make better policy.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 57
Graph : 8 Net Profit Ratio
3. OPERATING RATIO :
The operating ratio is the ratio of production and administrative expenses to net sales. The
measure excludes financing costs, non-operating expenses, and taxes. Essentially, it is the cost
per sales dollar of operating a business. A lower operating ratio is a good indicator of
operational efficiency, especially when the ratio is low in comparison to the same ratio for
competitors and benchmark firms.
The operating ratio is only useful for seeing if the core business is able to generate a profit.
Since several potentially significant expenses are not included, it is not a good indicator of the
overall performance of a business, and so can be misleading when used without any other
performance metrics. For example, a company may be highly leveraged and must therefore
make massive interest payments that are not considered part of the operating ratio.
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
50.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
JAMLAPADA RATIO INPERCENTAGE
DHAMNI RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 58
To calculate the operating ratio, add together all production costs (i.e., the cost of goods sold)
and administrative expenses (which includes general, administrative, and selling expenses) and
divide by net sales (which is gross sales, less sales discounts, returns, and allowances).
Table : 11 Operating Ratio of Dhamni And Jamlapada Cooperative Society
Source: Compiled Calculated Data
Interpretation
The table 9 reveals that the Operating ratio of Dhamni Cooperative Society was varied
from Highest 138.68 in 2012-13 It was at 85.21 ratio in 2010-11 lowest among six years, But
the Operating ratio in same case of Jamlapada Cooperative Societies highest in 112.19 in
2013-14. It can be concluded that the dhamni and jamlapada Cooperative society has only three
year less to 100 % in study period and Dhamni cooperative society last three years very high
compare to Jamlapada very high ratio indicate operating cost was high in this year .It Can be
Concluded that low percentage show better expence and good management policy. So we can
say that Jamlapada Cooperative management use good Expense operate policy compare with
dhamni cooperative society.
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
SALE
GOODS SALE
RATIO IN SALE
GOODS SALE RATIO IN
OF COST PERCENTA
GE OF COST
PERCENT
AGE
2008-09 1542067 1951365 96.40 830552 1039552 81.70
2009-10 2561290 3026474 97.04 2288708 2685151 92.39
2010-11 2684556 3590618 85.21 1299696 2041684 79.15
2011-12 2312463 2317733 128.49 3500544 4141532 96.68
2012-13 787349 854164 138.68 3203989 3633188 101.79
2013-14 2621985 2631675.00 118.56 2198984 2640915 112.19
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 59
Graph : 9 Operating Ratio
4. Return on total Assets
Return on Assets (ROA) is an indicator of how profitable company's assets are in
generating profit. Return on Assets shows how many Amount of earnings result from
each Amount of assets the company controls. Return on Assets ratio gives an idea of
how efficient management is at using its assets to generate profit.
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
DHAMNI RATIO INPERCENTAGE
JAMLAPADA RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 60
Table : 12 Return on total Assets of Dhamni And Jamlapada Cooperative Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
AFTER TAX TOTAL RATIO IN AFTER TAX TOTAL RATIO IN
NET PROFIT ASSETS PERCENTAGE NET PROFIT ASSETS PERCENTAGE
2008-09 103930 2306834 4.51 184536 542448 34.02
2009-10 94943 1739052 5.46 211759 633032 33.45
2010-11 633999 2624723 24.15 411136 1105326 37.20
2011-12 -431499 3053874 -14.13 151098 1558031 9.70
2012-13 -96831 2590047 -3.74 211197 1774624 11.90
2013-14 -474444 2119120 -22.39 -61186 1668222 -3.67
Source: Compiled Calculated Data
Interpretation
The table 10 reveals that the Return on total assets ratio of Dhamni
Cooperative Societies was varied from Highest 24.15 in 2010-11 It was at –22.39
ratio in 2013-14. lowest among six years, But the Return on total assets ratio in case
of Jamlapada Cooperative Societies highest in 37.20 in 2010-11.and lowest rario was
-3.67 in 2013-14. It can be concluded that dhamni Cooperative society has three year
very low ratio in study period and Jamlapada Cooperative society has good maintain
ratio in all study period. But Only one year net loss and better management working to
purchase assets.So we can say return on total assts ratio has Jamlapada cooperative
good working. To compare with Dhamni Cooperative societies.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 61
Graph : 10 Return on total Assets
5. Return On Capital Employed :
Return on capital employed or ROCE is a profitability ratio that measures how
efficiently a company can generate profits from its capital employed by comparing net operating
profit to capital employed. In other words, return on capital employed shows investors how
many Rupees in profits each rupees of capital employed generates.
DHAMNI RATIO IN PERCENTAGEJAMLAPADA RATIO IN PERCENTAGE
-30.00
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 62
Table : 13 Return on Capital employed of Dhamni And Jamalapada Cooperative
Society.
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
BEFORE
TAX
INVESTE
D RATIO IN
BEFORE
TAX
INVESTE
D RATIO IN
NET
PROFIT CAPITAL
PERCENTAG
E NET PROFIT CAPITAL
PERCENTAG
E
2008-09 199474 1073321 18.58 184200 295000 62.44
2009-10 100661 1498177 6.72 210272 459572 45.75
2010-11 643628 2237290 28.77 468480 928252 50.47
2011-12 -431499 3095043 -13.94 263522 1339638 19.67
2012-13 -96831 2745043 -3.53 195078 1667833 11.70
2013-14 -476727 2745043 -17.37 -108856 1761290 -6.18
Source: Compiled Calculated Data
Interpretation
The table 11 reveals that the Return on Capital Employed of Dhamni
Cooperative Societies was varied from Highest 28.77 in 2010-11 It was at -17.37 ratio
in 2013-14. lowest among six years, But the Return on Capital Employed ratio in
case of Jamlapada Cooperative Societies highest in 50.47 in 2010-11.and lowest rario
was -6.18 in 2013-14. It can be concluded that Dhamni Cooperative society has three
year very low ratio in study period and Jamlapada Cooperative society has good
maintain ratio in all study period but last year ratio has no Satisfied.So we can say
return on Capital employed has Jamlapada cooperative Society good working. And
Dhamni Cooperatives Society should some step take and improve the ratio.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 63
Graph : 11 Return on Capital Employed
-20.00
-10.00
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
DHAMNI RATIO IN PERCENTAGE
JAMLAPADA RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 64
Hypothesis Test of Profitability Ratio :
‘ T ’ Test Analysis :
Null Hypothesis
Ho : There is no significance difference in the Profitability ratios of Dhamni
and Jamlapada Cooperative society.
Alternative Hypothesis
H1 : There is significance difference in the Profitability ratios of Dhamni and
Jamlapada Cooperative society.
Table : 14 Hypothesis Test on ‘ T ’ Test Used On Profitability Ratio
Interpretation
The calculated P value on Gross profit Ratio of Dhamni and Jamlapada horticulture Cooperative
society was 0.14 which is More than 0.05 level Hence null hypothesis accepted and alternative
No. Ratio Mean S.D. Result
Particulars Dhamni Jamlapada Dhamni Jamlapada
‘ P ’
Value
Hypothesis
Test
01 Gross profit Ratio 9.80 20.39 10.82 8.87 0.14
H0
Accepted
02 Net Profit Ratio -5.40 7.10 14.72 8.28 0.16 H0
Accepted
03 Operating Ratio 113.596 96.44 20.98 12.43 0.17
H0
Accepted
04 Return on Total
Assets -2.12 17.71 16.38 16.75 0.11
H0
Accepted
05 Return On Capital
Employed 0.13 24.28 18.24 26.33 0.11
H0
Accepted
06 Return On Share
Holders Equity 0.05 21.78 17.04 28.93 0.13
H0
Accepted
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 65
hypothesis is rejected. It can be Canculated that No significance difference between Dhamni and
Jamlapada Cooperative society.
The Net Profit Ratio of Dhamni and Jamlapada Cooperative society P Value was 0.16 it is more than
0.05 level, so null hypothesis accepted.
Operating ratio of selected cooperative society p value was 0.17 which is More than 0.05 level null
hypothesis accepted .it can be concluded that Insignificance of dhamni and Jamlapada Cooperative
society.
Return on Total assets Ratio of Dhamni and Jamlapada Cooperative society p value was 0.11 this
value more than 0.05 level so, null hypothesis accepted and alternative hypothesis rejected.concluded
that return on total assets ratio there is no significance difference between selected firm.
Return on Capital Employed ratio p value 0.11 and this value was more than 0.05 level so null
hypothesis accepted. Concluded that there is Insignificance of selected cooperative society.
Return on Shareholders Equity ratio of Dhamni and Jamlapada Cooperative society p value is 0.13
which is 0.05 level , So,Null hypothesis accepted and alternative hypothesis rejected.concluded that
selected firm no significantly differ.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 66
(D) ACTIVITY RATIOS
Efficiency ratios show how efficiently the business is using its resources.
Shareholders in particular will want to know how well the firm is using their money!
It is advisable for the business to get as much turnover from its assets as possible and
at the same time it is not a good idea for it to have too many assets in the form of
stock or debtors.
Financial efficiency can be examined by using the following ratios:
Stock turnover
Debtor days
Fixed assets turnover ratio
Total Assets turnover ratio
Working Capital turnover
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 67
(1 ) STOCK TURNOVER RATIO :
A low inventory turnover ratio is a signal of inefficiency, since inventory usually has a
rate of return of zero. It also implies either poor sales or excess inventory. A low turnover
rate can indicate poor liquidity, possible overstocking, and obsolescence, but it may also
reflect a planned inventory buildup in the case of material shortages or in anticipation of
rapidly rising prices.
Table : 15 Stock Turnover ratio of Dhamni And Jamlapada Cooperative Societies
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR
SALE OF AVERAGE
STOCK
RATIO
IN SALE OF
AVERAGE
STOCK
RATIO
IN
COST
GOODS TIME
COST
GOODS TIME
2008-09 1542067 760356 2.03 830552 37339 22.24
2009-10 2561290 877922 2.92 2288708 69678 32.85
2010-11 2684556 160215 16.76 1299696 106341 12.22
2011-12 2317463 38929 59.53 3500544 185080 18.91
2012-13 787349 53568 14.70 3203989 253233 12.65
2013-14 2621985 25363 103.38 2198984 310005 7.09
Source: Compiled Calculated Data
Interpretation
Above Table 12 , Stock Turnover ratio of Dhamni Cooperative society in Ratio was
2.03 in the year 2008-09 in subsequent years it is 2.92 in 2009-10, 16.76 in 2010-11, 59.53
in 2011-12, and 14.70 in 2012-13. And 103.38 in 2013-14.The analysis clearly shows that
ratio was 32.85 2009-10 year Highest ratio And lowest ratio in 2.03 in year 2008-09. Same
case of Stock Turnover ratio of Jamlapada Cooperative society Ratio The analysis clearly
shows that ratio is 32.85 in year 2009-10 Highest ratio And lowest ratio in 2013-14 in 7.09.
It can be Concluded that Jamalapada cooperative society every year ratio compare to Mandava
cooperatives to high ratio. And maintmain satisfied ratio high ratio showing good sale efficieny
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 68
but very high is danger. we can say that Jamlapada cooperative society has good working policy
and satisfied turnover ratio.
Graph : 12 Stock Turnover ratio
( 2) Fixed turnover Ratio :
0.00 20.00 40.00 60.00 80.00 100.00 120.00
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Jamlapada RATIO IN TIME
Dhamni RATIO IN TIME
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 69
The fixed asset turnover ratio is the ratio of net sales to net fixed assets (also known as
property, plant, and equipment). A high ratio indicates that a business is:
Doing an effective job of generating sales with a relatively small amount of fixed assets
Outsourcing work to avoid investing in fixed assets
Selling off excess fixed asset capacity
Table : 16 Fixed assets Turnover ratio of Dhamni And Jamlapada Cooperative
Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR SALE
NET
FIXED RATIO IN
SALE
NET
FIXED RATIO IN
ASSETS PERCENTAG
E ASSETS
PERCENTA
GE
2008-09 1951365 459319 4.25 1039558 12600 82.50
2009-10 3026474 669828 4.52 2685155 34747 77.28
2010-11 3590618 1159122 3.10 2041684 64637 31.59
2011-12 2317733 1931212 1.20 4141532 379656 10.91
2012-13 854164 1778735 0.48 3633188 429106 8.47
2013-14 2745043 1622262 1.69 2640915 472540 5.59
Source: Compiled Calculated Data
Interpretation
The table 13 reveals that the Fixed assets turnover ratio of Dhamni Cooperative Societies was
varied from Highest 4.52 in 2009-10. It was at 0.48 ratio in 2012-13. lowest among six years,
But the Fixed assets turnover ratio in case of Jamlapada Cooperative Societies highest in 82.50
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 70
in 2008-9.and lowest rario was 5.59 in 2013-14. It can be concluded that Jamlapada
Cooperative society was ratio satisfied and Dhamni society has low ratio compare with
jamlapada cooperative ratio.so I can say Jamlapada Cooperative society was satisfied financial
analysis.
Graph : 13 Fixed assets turnover ratio
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
JAMLAPADA RATIO INPERCENTAGE
DHAMNI RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 71
( 3) Total Assets Turnover Ratio :
The amount of sales or revenues generated per dollar of assets. The Asset Turnover ratio
is an indicator of the efficiency with which a company is deploying its assets.
Table : 17 Total assets Turnoveer ratio of Dhamni And Jamlapada Cooperative
Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR SALE
TOTAL RATIO IN
SALE
TOTAL RATIO IN
ASSETS PERCENTAGE ASSETS PERCENTAGE
2008-09 1951365 2306834 0.85 1039558 542448 1.92
2009-10 3026474 1739052 1.74 2685155 633031 4.24
2010-11 3590618 2624723 1.37 2041684 1105327 1.85
2011-12 2317733 3053874 0.76 4141532 1558031 2.66
2012-13 854164 2590047 0.33 3633188 1774625 2.05
2013-14 2745043 2119120 1.30 2640915 1668222 1.58
Source: Compiled Calculated Data
Interpretation
The table 14 reveals that the Total assets turnover ratio of Dhamni Cooperative
Societies was varied from Highest 1.74 in 2009-10. It was at 0.33 ratio in 2012-13. lowest
among six years, But the Fixed Total turnover ratio in case of Jamlapada Cooperative
Societies highest in 2.66 in 2011-12. and lowest rario was 1.58 in 2013-14. It can be
concluded that Jamlapada Cooperative society’s ratio better to compare with dhamni
Cooperative society.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 72
Graph : 14 Total assets turnover ratio
(4) Debtors turnover ratio
The receivable turnover ratio (debtors turnover ratio, accounts receivable turnover ratio)
indicates the velocity of a company's debt collection, the number of times average receivables
are turned over during a year. This ratio determines how quickly a company collects outstanding
cash balances from its customers during an accounting period. It is an important indicator of a
company's financial and operational performance and can be used to determine if a company is
having difficulties collecting sales made on credit. Receivable turnover ratio indicates how
many times, on average, account receivables are collected during a year A popular variant of the
receivables turnover ratio is to convert it into an Average collection period in terms of days. The
average collection period (also called Days Sales Outstanding is the number of days, on average,
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
DHAMNI RATIO IN PERCENTAGE
JAMLAPADA RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 73
that it takes a company to collect its accounts receivables, i.e. the average number of days
required to convert receivables into cash.
Table : 18 Debtors Turnoveer ratio of Dhamni And Jamlapada Cooperative Society
Source: Compiled Calculated Data
Interpretation :
The table 15 Show that the Debtors Turnover ratio of Dhamni Cooperative Societies
was varied from Highest 86 days in 2012-13. It was at 14 days in 2010-11. lowest among six
years, But the Debtors ratio in same case of Jamlapada Cooperative Societies highest in 66
days in 2008-09 and lowest rario was 13 day in 2011-12. It can be concluded that Jamlapada
Cooperative society’s collection policy has good. And Dhamni Cooperatives has long
collection period. I can say that Dhamni Cooperative Society Management take several step and
improve debtors collection policy.
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR DEBTORS CREDIT RATIO IN
DEBTORS CREDIT RATIO IN
SALES DAY SALES DAY
2008-09 162327 1951365 30 186003 1039558 64
2009-10 570897 3026474 68 154079 2685155 21
2010-11 136471 3590618 14 77884 2041684 14
2011-12 261726 2317733 41 144218 4141532 13
2012-13 204751 854164 86 144591 3633188 14
2013-14 134813 2745043 18 178375 2640915 24
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 74
Graph : 15 Debtors Turnover ratio
(5) Current Assets turnover ratio :
Current assets turnover is an efficiency measurement accountants apply to a
company’s financial statements. Both the income statements and balance sheets have the
requisite information for computing this ratio. The result from this formula is a metric
that indicates how well a company generates sales revenue from the current assets it
owns. A higher number is generally preferable as the company uses its assets in the most
efficient manner possible. Accountants can compute the current assets turnover ratio on a
monthly basis.
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
100.00
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
DHAMNI RATIO IN DAY
JAMLAPADA RATIO IN DAY
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 75
Table : 19 Current assets turnoveer ratio of Dhamni And Jamlapada Cooperative
Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR TOTAL
SALE
CURREN
T RATIO IN
TOTAL
SALE
CURREN
T RATIO IN
ASSETS PERCENTAG
E ASSETS
PERCENTAG
E
2008-09 1951365 1847515 1.06 1039558 468482 2.22
2009-10 3026474 1069227 2.83 2685155 597284 4.50
2010-11 3590618 1476602 2.43 2041684 1040690 1.96
2011-12 2317733 1122661 2.06 4141532 969272 4.27
2012-13 854164 811511 1.05 3633188 1255518 2.89
2013-14 2745043 796856 3.44 2640915 1195676 2.21
Source: Compiled Calculated Data
Interpretation :
The table 16 Show that the Current Assets Turnover ratio of Dhamni Cooperative
Societies was varied from Highest 2.83 in 2009-10. It was at 1.05 in 2012-13. lowest among
six years, But the Current Assets turnover ratio in case of Jamlapada Cooperative Societies
highest in 4.50 in 2009-10 and lowest rario was 1.96 in 2010-11. It can be concluded that
Dhmni Cooperative society’s and Jamlapada both society was working Satisfied because every
year maintain good ratio Inventry,and other Current assets turnover Management has satisfied.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 76
Graph : 16 Current Assets Turnover ratio
(6.) Working Capital Turnover Ratio :
The working capital turnover ratio measures how well a company is utilizing its working
capital to support a given level of sales. Working capital is current assets minus current
liabilities. A high turnover ratio indicates that management is being extremely efficient in using
a firm's short-term assets and liabilities to support sales. Conversely, a low ratio indicates that a
business is investing in too many accounts receivable and inventory assets to support its sales,
which could eventually lead to an excessive amount of bad debts and obsolete inventory.
0.00 1.00 2.00 3.00 4.00 5.00
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
JAMLAPADA RATIO INPERCENTAGE
DHAMNI RATIO IN PERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 77
Table : 20 Working Ccapital Turnoveer ratio of Dhamni And Jamlapada Cooperative
Society
Dhamni Cooperative Society Jamlapada Cooperative Society
YEAR TOTAL
SALE
WORKIN
G RATIO IN
TOTAL
SALE
WORKIN
G RATIO IN
CAPITAL PERCENTA
GE CAPITAL
PERCENTA
GE
2008-09 1951365 1542067 1.27 1039558 176127 5.90
2009-10 3026474 828348 3.65 2685155 333825 8.04
2010-11 3590618 1089168 3.30 2041684 863616 2.36
2011-12 2317733 732331 3.16 4141532 861883 4.81
2012-13 854164 438177 1.95 3633188 1148727 3.16
2013-14 2745043 417422 6.58 2640915 1179888 2.24
Source: Compiled Calculated Data
Interpretation :
The table 17 Show that the Working Capital Turnover ratio of Dhamni Cooperative
Societies was varied from Highest 6.58 in 2013-14. It was at 1.27 in 2008-09. lowest among
six years, But the Working Capital ratio in case of Jamlapada Cooperative Societies highest
in 8.04 in 2009-10 and lowest rario was 2.24 in 2013-14. It can be concluded that Dhamni
Cooperative society’s Working Capital has Low ratio with compare to Jamlapada Coperatives.
So We can say that Dhamni Cooperatives high ratio show that management is being extremely
efficient in using a firm's short-term assets and liabilities to support sales.
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 78
Graph : 17 Working Capital Turnover Ratio
Hypothesis Test of Activity Ratio :
‘ T ’ Test Analysis :
T test is based on T Distribution and is considering an appropriate test for judging
the significance of the coefficient of simple and partial correlations
The relevant test statstics is Calculated from the sample data and then Compared
with its problems value based on T Distribution at specified level of significance for
concerning degree of freedom for accepting or rejecting the Null hypothesis.
Null Hypothesis
Ho : There is no significance difference in the Activity ratios of Dhamni and
Jamlapada Cooperative society.
Alternative Hypothesis
H1 : There is significance difference in the Activity ratios of Dhamni and
Jamlapada Cooperative society.
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
1.27
3.653.30
3.16
1.95
6.58
5.90
8.04
2.36
4.81
3.16
2.24
DHAMNI RATIO IN PERCENTAGE
JAMLAPADA RATIO INPERCENTAGE
Financial Analysis of Cooperative Society
Patel Dilipkumar
E d u P e d i a P u b l i c a t i o n s
Page 79
Table : 21 Hypothesis Test on ‘ T ’ Test Used On Activity Ratio
Interpretation
Above ‘ t ’ test at 5 % significant level showed significance in Activity Ratios
The calculated P value on Stock turnover Ratio of Dhamni and Jamlapada horticulture
Cooperative society was 0.30 which is More than 0.05 level Hence null hypothesis
accepted and alternative hypothesis is rejected. It can be Canculated that No significance
difference between Dhamni and Jamlapada Cooperative society.
The Fixed Assets Turnover Ratio of Dhamni and Jamlapada Cooperative society P Value
was 0.14 it is more than 0.05 level, so null hypothesis accepted. It can be concluded that there
is no significance difference between selected Cooperative Societies.
The total assets turnover ratio of selected cooperative society p value was 0.04 which is less
than 0.05 level so ,alternative hypothesis accepted and null hypothesis accepted,it can be
concluded that Significance difference between dhamni and Jamlapada Cooperative society.
No. Ratio Mean S.D. Result
Particulars Dhamni Jamlapada Dhamni Jamlapada
‘ P ’
Value
Hypothesis
Test
01 Stock Turnover 39.45 16.74 40.29 9.15 0.30 H0
Accepted
02 Fixed Assets
Turnover
2.19 26.76 1.66 35.20 0.14 H0
Accepted
03 Total Asset
Turnover
1.09 2.47 0.50 0.97 0.04 H1
Accepted
04 Debtors Ratio 45.24 17.11 28.88 19.84 0.12 H0
Accepted
05 Current Assets
Turnover
2.36 3.16 0.96 1.11 0.26 H0
Accepted
06 Working Capital
Turnover
3.72 4.12 1.83 2.28 0.77 H0
Accepted
Financial Analysis of Cooperative Society
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Debtors Ratio of Dhamni and Jamlapada Cooperative society p value was 0.12 this value more than
0.05 level so, null hypothesis accepted and alternative hypothesis rejected.concluded that debtors ratio
there is no significance difference between selected firm.
Current assets turnover ratio p value 0.26 and this value was more than 0.05 level so null hypothesis
accepted. Concluded that there is no significance difference of selected cooperative society.
The working capital turnover ratio of Dhamni and Jamlapada Cooperative society p value is 0.77 which
is 0.05 level , So,Null hypothesis accepted and alternative hypothesis rejected.concluded that selected
firm no significantly differ.
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Chapter : 5
Findings and Suggestion
Findings :
Following findings of the research studt by researcher.
Debt Equity ratio of Dhamni Cooperative Societies was Highest ratio from 0.82 in the
year 2008-09. It was at 0.13 ratio in 2011-12, lowest among six years. But the ratio in
case of Jamlapada Cooperative Societies has discreased over the five years. It was at
its lowest in 2013-14 ( 0.01), after that it has shown almost low increment every year
in Debt equity ratios. it can be findings that Debt equity position of dhamni
Cooperative society is better than Jamlapada Cooperative Society.because Jamlapada
Co.society not maintain ratio every year.
The calculated P value on Debt Equity Ratio of Dhamni and Jamlapada
horticulture Cooperative society was 0.69 which is More than 0.05 level
Hence null hypothesis accepted and alternative hypothesis is rejected. It can be
Canculated that No significance difference between Dhamni and Jamlapada
Cooperative society.
The Gearing ratio of Dhamni Cooperative Societies was Highest from 7.77 in
the year 2008-09. It was at 1.58 ratio in 2009-10, lowest among six years. But
the Gearing ratio in same case of Jamlapada Cooperative Societies has highest
ratio was 4.53 in 2013-14 & 2008-09. It was at its lowest in 2012-13 (1.49 ),
after that it has shown almost average every year in Gearing ratios. from the
can be findings that Jamlapada horticulture Cooperative society position of
Average because no Maintain every year ratio. And Dhamni is maintain
average..
The Gearing Ratio of Dhamni and Jamlapada Cooperative society P Value
was 0.45 it is more than 0.05 level, so null hypothesis accepted.
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The Properatory Ratio of Dhamni Cooperative Societies was Highest from 792.9 in the
year 2011-12. It was at 90 ratio in 2008-9, lowest among six years. But the Jamlapada
Society Properatory ratio in highest of 2013-14. And lowest ratio in the year 2008-9 .it
can be Findings that Both Cooperative society management trying to Investors funds
use in Capital both cooperative society.
Properatory ratio of selected cooperative society p value was 0.33 which is
More than 0.05 level null hypothesis accepted .it can be concluded that
Insignificance of dhamni and Jamlapada Cooperative society
Fixed Capital Assets ratio of Dhamni Cooperative Societies was Highest from 2.34 in
the year 2008-9. It was at 1.69 ratio in 2013-14 lowest among six years. But the Fixed
Capital -Assets ratio in case of Jamlapada Cooperative Societies has highest ratio 19.85
in 2008-09. It was lowest in 2010-11 (3.53 ), it can be find that Jamlapada Cooperative
society position of Better to Dhamni Cooperative society. Because there ratio. Compare
to Dhamni cooperatives more variation to Jamlapada cooperative society.
Fixed Assets Capital ratio p value 0.08 and this value was more than 0.05 level
so null hypothesis accepted. Concluded that there is Insignificance of selected
cooperative society.
Current ratio of Dhamni Cooperative Societies was 2.10 ratio in 2013-14, lowest
among six years.13. But the Current ratio in case of Jamlapada Cooperative Societies
has increased over the five years. It was its lowest in2008-09 (1.60 ), after that it has
shown almost increment in Current ratios. it can be findings that Financial position of
Jamlapada Cooperative society is better than Dhamni Cooperative Society. because
Dhamni Co.society not maintain ratio every year.
The calculated P value on Current Ratio of Dhamni and Jamlapada horticulture
Cooperative society was 0.26 which is More than 0.05 level Hence null hypothesis
accepted and alternative hypothesis is rejected.indicate the Current Assets more than
compare to current debt.so. It can be Canculated that No significance difference
between Dhamni and Jamlapada Cooperative society.
The Quick ratio of Dhamni Cooperative Societies was varied from 1.28 to 3.75 . It
was at 1.28 ratio in 2008-09, lowest among five years again it increased to 3.20 in
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2009-10 and discrease in 2.10 year 2013-14, But the Quick ratio in case of Jamlapada
Cooperative Societies has increased over the five years. It was at its lowest in 2008-09 (
1.56 ), after that it has shown almost increment in every year Quick ratios. from the
above it can be find that Financial position of Jamlapada Cooperative society financial
strenght is better than Dhamni Cooperative Society. because Dhamni Co.society ratio
has low compatre to Jamlapada cooperative societies every year. we can say Jamlapada
cooperative society financial Strenght has good.and management decision policy good
working
The Liquidity Ratio of Dhamni and Jamlapada Cooperative society P Value was 0.20
it is more than 0.05 level, so null hypothesis accepted and alternative hypothesis
rejected.so indicate the selected Cooperative Societies have quick Assets stability has
good and Satisfied.
The Gross Profit ratio of Dhamni horticulture Cooperative Societies was 22.41 ratio in
2008-09, highest among five years.it discreased to 15.37 in 2009-10 and Increase in
25.23 year 2010-11, and all next year ratio was low and last year was lowest ratio, But
the Gross Profit ratio in case of Jamlapada horticulture Cooperative Societies highest in
36.34 in 2010-11. And lowest ratio was 11.81 in 2012-13. It can be founded that
Jamlapada Cooperative society has good gross profit ratio every year maintain. Dhamni
cooperative society only two year good ratio and all year low ratio. And last study year
2013-14 was very low is not satisfied. It can show is Jamlapada Coperative society Cost
of good sale and Goods Sale policy has good and Satisfied.
The calculated P value on Gross profit Ratio of Dhamni and Jamlapada horticulture
Cooperative society was 0.14 which is More than 0.05 level Hence null hypothesis
accepted and alternative hypothesis is rejected. It can be Canculated that No
significance difference between Dhamni and Jamlapada Cooperative society.
The Net Profit ratio of Dhamni horticulture Cooperative Societies was varied from
17.93 to -18.62. It was highest ratio at 17.93 ratio in 2010-11, lowest among five years
highest ratio was -18.62 year 2011-12. But the Net Profit ratio in case of Jamlapada
Cooperative Societies highest in 19.98 in 2010-11. And lowest ratio was 2013-14 in -
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1.07 , It can be concluded that Dhamni Cooperative society has three study period has
net loss. And Jamlapda cooperative society has only one time has net loss. So I can say
Jamlapada cooperative society Financial efficiency and Financial Expenses control
policy has very good to compare with dhamni Cooperative society.So Dhamni
Coooperative Society should Financial Expense contoliing make better policy.
The Net Profit Ratio of Dhamni and Jamlapada Cooperative society P Value was 0.16
it is more than 0.05 level, so null hypothesis accepted.
The Operating ratio of Dhamni Cooperative Society was varied from Highest 138.68 in
2012-13 It was at 85.21 ratio in 2010-11 lowest among six years, But the Operating
ratio in same case of Jamlapada Cooperative Societies highest in 112.19 in 2013-14. It
can be concluded that the dhamni and jamlapada Cooperative society has only three
year less to 100 % in study period and Dhamni cooperative society last three years
very high compare to Jamlapada very high ratio indicate operating cost was high in this
year .It Can be Concluded that low percentage show better expence and good
management policy.
Operating ratio of selected cooperative society p value was 0.17 which is More than
0.05 level null hypothesis accepted .it can be concluded that Insignificance of dhamni
and Jamlapada Cooperative society.
The Return on total assets ratio of Dhamni Cooperative Societies was varied from
Highest 24.15 in 2010-11 It was at –22.39 ratio in 2013-14. lowest among six years,
But the Return on total assets ratio in case of Jamlapada Cooperative Societies highest
in 37.20 in 2010-11.and lowest rario was -3.67 in 2013-14. It can be findings that
dhamni Cooperative society has three year very low ratio in study period and
Jamlapada Cooperative society has good maintain ratio in all study period. But Only one
year net loss and better management working to purchase assets.So we can say return on
total assts ratio has Jamlapada cooperative good working. To compare with Dhamni
Cooperative societies
Return on Total assets Ratio of Dhamni and Jamlapada Cooperative society p value
was 0.11 this value more than 0.05 level so, null hypothesis accepted and alternative
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hypothesis rejected.concluded that return on total assets ratio there is no significance
difference between selected firm.
The Return on Capital Employed of Dhamni Cooperative Societies was varied from
Highest 28.77 in 2010-11 It was at -17.37 ratio in 2013-14. lowest among six years,
But the Return on Capital Employed ratio in case of Jamlapada Cooperative Societies
highest in 50.47 in 2010-11.and lowest rario was -6.18 in 2013-14. It can be findings
that Dhamni Cooperative society has three year very low ratio in study period and
Jamlapada Cooperative society has good maintain ratio in all study period but last year
ratio has no Satisfied. return on Capital employed has Jamlapada cooperative Society
good working.
Return on Capital Employed ratio p value 0.11 and this value was more than 0.05 level
so null hypothesis accepted. Concluded that there is Insignificance of selected
cooperative society.
Return on Shareholders Equity ratio of Dhamni and Jamlapada Cooperative society p
value is 0.13 which is 0.05 level , So,Null hypothesis accepted and alternative hypothesis
rejected.concluded that selected firm no significantly differ.
Stock Turnover ratio of Dhamni Cooperative society the analysis clearly shows that
ratio was 32.85 2009-10 year Highest ratio And lowest ratio in 2.03 in year 2008-09.
Same case of Stock Turnover ratio of Jamlapada Cooperative society Ratio The
analysis clearly shows that ratio is 32.85 in year 2009-10 Highest ratio And lowest
ratio in 2013-14 in 7.09. It can be findings that Jamalapada cooperative society every
year ratio compare to dixal cooperatives to high ratio. And maintmain satisfied ratio
high ratio showing good sale efficieny but very high is danger. we can say that
Jamlapada cooperative society has good working policy and satisfied turnover ratio.
The calculated P value on Stock turnover Ratio of Dhamni and Jamlapada horticulture
Cooperative society was 0.30 which is More than 0.05 level Hence null hypothesis
accepted and alternative hypothesis is rejected. It can be Canculated that No
significance difference between Dhamni and Jamlapada Cooperative society.
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The Fixed assets turnover ratio of Dhamni Cooperative Societies was varied from
Highest 4.52 in 2009-10. It was at 0.48 ratio in 2012-13. lowest among six years, But
the Fixed assets turnover ratio in case of Jamlapada Cooperative Societies highest in
82.50 in 2008-9.and lowest rario was 5.59 in 2013-14. It can be findings that
Jamlapada Cooperative society was ratio satisfied and Dhamni society has low ratio
compare with jamlapada cooperative ratio.
The total assets turnover ratio of selected cooperative society p value was 0.04 which
is less than 0.05 level so ,alternative hypothesis accepted and null hypothesis
accepted,it can be concluded that Significance difference between dhamni and
Jamlapada Cooperative society.
Total assets turnover ratio of Dhamni Cooperative Societies was varied from Highest
1.74 in 2009-10. It was at 0.33 ratio in 2012-13. lowest among six years, But the
Fixed Total turnover ratio in case of Jamlapada Cooperative Societies highest in 2.66
in 2011-12. and lowest rario was 1.58 in 2013-14. Findings that Jamlapada Cooperative
society’s ratio better to compare with dhamni Cooperative society.
Debtors Turnover ratio of Dhamni Cooperative Societies was varied from Highest 86
days in 2012-13. It was at 14 days in 2010-11. lowest among six years, But the
Debtors ratio in same case of Jamlapada Cooperative Societies highest in 66 days in
2008-09 and lowest rario was 13 day in 2011-12. It find that Jamlapada Cooperative
society’s collection policy has good. And Dhamni Cooperatives has long collection
period. I can say that Dhamni Cooperative Society Management take several step and
improve debtors collection policy.
Debtors Ratio of Dhamni and Jamlapada Cooperative society p value was 0.12 this
value more than 0.05 level so, null hypothesis accepted and alternative hypothesis
rejected.concluded that debtors ratio there is no significance difference between selected
firm.
The Current Assets Turnover ratio of Dhamni Cooperative Societies was varied from
Highest 2.83 in 2009-10. It was at 1.05 in 2012-13. lowest among six years, But the
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Current Assets turnover ratio in case of Jamlapada Cooperative Societies highest in
4.50 in 2009-10 and lowest rario was 1.96 in 2010-11. It can be findings that Dhmni
Cooperative society’s and Jamlapada both society was working Satisfied because every
year maintain good ratio Inventry,and other Current assets turnover Management has
satisfied.
Current assets turnover ratio p value 0.26 and this value was more than 0.05 level so
null hypothesis accepted. Concluded that there is no significance difference of selected
cooperative society.
Working Capital Turnover ratio of Dhamni Cooperative Societies was varied from
Highest 6.58 in 2013-14. It was at 1.27 in 2008-09. lowest among six years, But the
Working Capital ratio in case of Jamlapada Cooperative Societies highest in 8.04 in
2009-10 and lowest rario was 2.24 in 2013-14. It can be find that Dhamni Cooperative
society’s Working Capital has Low ratio with compare to Jamlapada Coperatives.
The working capital turnover ratio of Dhamni and Jamlapada Cooperative society p
value is 0.77 which is 0.05 level , So,Null hypothesis accepted and alternative hypothesis
rejected.concluded that selected firm no significantly differ.
Suggestion & Conclusion :
The following recommendations are suggested to analysis the financial
performance of Selected Dhamni And Jamlapada Cooperative Societies in
Ahva and Dharampur taluk in Gujarat state of india.
Cooperative Societies should increase the profitability of the Cooperative
societies, Specially suggested to Dhamni Cooperative Society control the cost
of goods sold and operating expenses.
Selected Cooperative Societies Management should try to adopt cost reduction
techniques in their Units to get over this critical situation.
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Cooperatives Management should improve the financial leverage the
management shall build equity capital by collecting shares from existing and
new membership increase
Dhamni Cooperatives should maintain adequate cash reserves from operating
activities.
Gross profit margin ratio of both selected cooperative society is low in all
cooperative society this shows it could not cover its fixed charges, and then the
Societies management better follow pricing policy which says higher price for
produce and lower price for inputs and commodities.
Cooperative societies Management should try to Increase product sale and
make strong marketing policy.
The Cooperative Societies management of the cooperative societies
must pay its liabilities on time to minimize the financial charge paid to
creditors as interest for the amount borrowed.
The management of cooperative Societies should give attention to
decreasing administrative expenses and improve their working
efficiency to gain enough profit and save accumulated profit for capital
growth.
From the above study, concluded that the Study of Solvency ratios,
liquidity ratios, Profirtability ratios, and Activity ratios. This indicates the
cooperative financial position was good (or sound enough) to meet its current
obligations, But current ratio OF Both study absolute liquid ratio of the
cooperative are below the average, standard, that shows the Dhamni
Cooperatives financial position of not satisfactory to meet its short-term
obligations.
Finally, still there is a scope and hope for the betterment to maintain the
optimum level financial stability in future of Both Cooperative Society, if the
cooperative societies operate the activity in efficient manner, try to maintain the
Average level of financial stability in future, it is clear that it will get the great
success among the public, Rural and other type cooperatives also.
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Financial Analysis of Cooperative Society
Patel Dilipkumar
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About the Author
AUTHERS INTRODUCTION
PATEL DILIPKUMAR
Birth Date : 11/05/1988 .
Graduated from B.com , Arts and Commerce college, Motapondha
in South Gujrat university, Surat, Post Graduated from M.Com With
Specialization of Financial Accountancy from Sir.K.P.College of
Commerce,Surat in South Gujrat University Surat.Bechalar of
Education (B.Ed.) from , College of Education Kharod in South
Gujarat University Surat.
Now. Research Scholar in Pacific University in Udaipur,(Rajasthan)
Research Area Interest : Commerce , Accountancy.