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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
LIST OF TABLESTABLE No: TABLE NAME PAGE No:
TABLE NO .1 GROSS PROFIT RATIO 40
TABLE NO .2 NET PROFIT RATIO 42
TABLE NO .3 OPERATING RATIO 44
TABLE NO .4 RETURN ON TOTAL ASSETS 46
TABLE NO .5 RETURN ON CAPITAL EMPLOYED 48
TABLE NO .6 EARNINGS PER SHARE 50
TABLE NO .7 RETURN ON EQUITY 52
TABLE NO .8 DIVIDENT PAY-OUT RATIO 54
TABLE NO .9 RETURN ON INVESTMENT 55
TABLE NO .10 CURRENT RATIO 57
TABLE NO .11 QUICK RATIO 59
TABLE NO .12 DEBT- EQUITY RATIO 62
TABLE NO .13PROPRIETARY RATIO 63
TABLE NO .14WORKING CAPITAL TURNOVER RATIO 66
TABLE NO .15 FIXED CAPITAL TURNOVER RATIO 67
TABLE NO .16 INVENTORY TURNOVER RATIO 70
TABLE NO .17 DEBTORS TURNOVER RATIO 71
TABLE NO .18 TREND ANALYSIS OF INVENTORY 73
TABLE NO .19 TREND ANALYSIS OF DEBTORS 74
TABLE NO .20 TREND ANALYSIS OF CREDITORS 75
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
LIST OF FIGURESFIGURE No: FIGURE NAME PAGE No:
FIGURE NO .1 GROSS PROFIT RATIO 41
FIGURE NO .2 NET PROFIT RATIO 43
FIGURE NO .3 OPERATING RATIO 45
FIGURE NO .4 RETURN ON TOTAL ASSETS 47
FIGURE NO .5 RETURN ON CAPITAL EMPLOYED 49
FIGURE NO .6 EARNINGS PER SHARE 51
FIGURE NO .7 RETURN ON EQUITY 53
FIGURE NO .8 DIVIDENT PAY-OUT RATIO 54
FIGURE NO .9 RETURN ON INVESTMENT 56
FIGURE NO .10 CURRENT RATIO 58
FIGURE NO .11 QUICK RATIO 60
FIGURE NO .12 DEBT- EQUITY RATIO 62
FIGURE NO .13PROPRIETARY RATIO 64
FIGURE NO .14WORKING CAPITAL TURNOVER RATIO 66
FIGURE NO .15 FIXED CAPITAL TURNOVER RATIO 68
FIGURE NO .16 INVENTORY TURNOVER RATIO 70
FIGURE NO .17 DEBTORS TURNOVER RATIO 72
FIGURE NO .18 TREND ANALYSIS OF INVENTORY 73
FIGURE NO .19 TREND ANALYSIS OF DEBTORS 74
FIGURE NO .20 TREND ANALYSIS OF CREDITORS 75
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
EXECUTIVE SUMMARY
The study was conducted at Travancore Cochin Chemicals
Ltd (TCC) Udyogamandal. The Travancore Cochin Chemicals
Ltd (TCC) is a state public sector company undertaking owned by
the Government of Kerala an ISO 9001:2000 certified company.
The study was aimed is to analyze the financial performance with
reference to Travancore Cochin Chemicals Ltd. This was done
through exploratory research method using analysis of annual
reports of the company.
Through this study the researcher was able is to analyze the
financial performance in Travancore Cochin Chemicals Ltd. and
can able to suggest remedial measures to be taken by
management to improve the financial performance in TCC.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER - 1
INTRODUCTION
Financial statements are prepared primarily for decision making. They
play a dominant role in setting the frame work of managerial decisions. But the
information provided in the financial statements is not an end in itself as no
meaningful conclusions can be drawn from these statements alone. However the
information provided in the financial statements is of immense use of making
decisions through analysis and interpretation of financial statements. Financial
analysis is “the process of identifying the financial strengths and weakness of the
firm by properly establishing relationship between the items of the balance sheet and
the profit and loss account. There are various methods or techniques used in
analyzing financial statements, such as comparative statements, trend analysis, and
common size statements, schedule of changes in working capital, fund flow and cash
flow analysis, cost-volume-profit analysis and ratio analysis.
The term financial analysis also known as analysis and interpretation of
financial statements, refers to the process of determining financial strengths and
weakness of the firm by establishing strategic relationship between the items of the
balance sheet, profit and loss account and other operative data. The purpose of
financial analysis is to diagnose the information contained in financial statements so
as to judge the profitability and financial soundness of the firm.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
The analysis and interpretation of financial statements is essential to bring out
the mystery behind the figures in financial statements. Financial statements analysis
is an attempt to determine the significance and meaning of the financial statement
data so that forecast may be made of the future earnings, ability to pay interest and
debt maturities (both current and long-term) and profitability of a sound dividend
policy.
STATEMENT OF THE PROBLEM
The chemical industry occupies a very important in the country. This
industry has a vital role to play in the supply of essential commodity for the entre
population. It’s progress and development is of grate concern to every one. The
Travancore Cochin Chemicals Ltd is also one of the biggest firms in the chemical
producing industry. Hence an attempt of financial statement analysis of The
Travancore Cochin Chemicals Ltd has been undertaken in a view of that it may pave
way of prosperity.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
1.2 OBJECTIVE OF THE STUDY:
1. PRIMARY OBJECTIVE:
The primary objective of the study is to analyze the financial performance
with reference to Travancore Cochin Chemicals Ltd.
2. SECONDARY OBJECTIVES:
To estimate the earning capacity of the firm
To analyze the financial statements of the company by using financial tools.
To evaluate the financial position of the company in terms of solvency,
profitability, activity, and earning ratios.
To analyze the working capital changes over a period of five years i.e., 2002-
03 to 2006-07
To determine the debt capacity of the firm
To know the progress of the firm
To measure the efficiency of operations.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
1.3 RESEARCH METHODOLOGY
RESEARCH DESIGN
The research is exploratory in nature.
TYPES OF DATA
The methodology used in the study involves the collection of primary data as
well as secondary data. Majority of the data was collected with the help of the
annual reports provided by the company.
SOURCE OF DATA
Secondary data: Secondary data were obtained from the internal records of
the company i.e., from the published annual reports, website of the company,
journals and magazines and also other books related to the analysis of
financial performance.
PERIOD OF STUDY
A five year period from 2004 to 2008 has been taken for the study.
TIME OF STUDY
Two Months, from 25/04/2009 to 25/06/2009
TOOLS OF DATA ANALYSIS
Ratio analysis Trend analysis
REPRESENTATION:
Tables, figures and chart are used for the representation of the data.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
1.4 LIMITATIONS OF THE STUDY:
Data availed were insufficient to make an in depth study
Due to security reasons all the enquires were not get answered
The study does not disclose reasons for changes.
The basic nature of financial statement is historic.
Due to time limitations, detailed study could not be conducted.
The reliability and accuracy of calculations and interpretation depends very
much on the information supplied in the form of annual reports and other
records,
Authorities were reluctant to reveal full information about the working of
the company.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER - 2
INDUSTRY PROFILE
WORLD SCENARIO
Now the world is full of competition. The Chlor-alkali industries are growing
faster in the world. The chemical industries are also growing faster in the world. The
chemical industry plays a vital role in the production of many manufactured goods.
The industry provides a tremendous variety of materials to other manufacturers. It
also produces chemical products that benefits people directly. Major products of the
industry include detergents, drugs, fertilizers, food preservatives flavoring and paper
products etc.
Most major chemicals are basic chemicals used in many countries. It is
used to produce fertilizer and other chemical. Other basic chemicals include
chlorine, alkali like lime and sodium hydroxide and these chemicals are used in
plastics.
Production of chemicals has become increasingly concentrated in
Multinational Corporations, which have plants and offices in a number of countries.
To reduce costs, most of the multinational companies locate their factories in
countries where raw materials and cheap skilled labour are readily available. So
many basic chemicals are produced in developing countries by units of multinational
firms. But chemicals requiring advanced production methods are made in
industrialized countries.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Chlor-Alkali Industry in the world
During the 1970’s Caustic Soda used to be manufactured by utilizing the
mercury cell technology. It was produced by amalgam process. But this technology
consumes a lot of energy and power. There was also the problem of mercury
population.
The Mina Mata tragedy (resulting from mercury pollution), forced the
Japanese Government issued a direction to all caustic soda plants to change over to
other process under a time bound-programme. This paved the way for the
development of Ion Exchange Membrane Cell (IEMC) technology. This process
apart from totally avoiding mercury, consumed 30% less power compared to the
conventional process.
Increased production of paper, aluminium, soap, and detergents at the
international level naturally led to increased requirement of caustic soda. But the
Green Peace movement is seeking the phasing out of chlorine usage, especially the
CFC compounds have resulted in closing down of some of the chlor-alkali industries
in Europe and restricted production in other European and North American Plants.
With the drop in international production, the international price of caustic
soda rose steadily.. The caustic soda which was selling for $50/tonne has grown up
to $300/tone now.
The international markets operates in the context of demand and supply conditions
prevailing from time to time, So price of caustic soda became highly volatile.
Predator pricing has become common and drop in import duty often led to steep
drop in price of the chemical.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALSThough demand for chlorine is growing fast the demand for caustic soda is not so
promising. Hence the units in the gulf and western countries are selling caustic soda
at a cheaper price.
Major Countries Producing Caustic Soda
1. U.S.A 5. France
2. China 6. Russia
3. Japan 7. Canada
4. Germany 8. India
INDIAN SCENARIO
The Indian chemical industry is an integral part of the Indian economy,
contributing around 6.7% to the Indian GDP. It touches our lives in many different
ways. Whether it is thermoplastic furniture we use, or a synthetic garment we wear,
or drug we consume. The industry is a vital part of the agricultural and industrial
development in India has key linkages with several other downstream industries
such as automotive, consumer durables, engineering, food processing, etc.
The chemical industry in India has the potential to grow around USD 100
billion by 2010 (according to KPMG’s analysis based on a survey of the industry).
This would imply an annual growth rate of 15.5%. For the industry to achieve this
size, specialty and knowledge chemical segments would need to grow 16.4 %
( current growth rate is 7.9%) and 27 %( current growth rate is 12.3%) respectively.
The basic chemicals segment would need to sustain its current growth rate of 7.7%
to match the profile of the chemical industry in global markets.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALSAt the industry level, the Indian Chemical industry is characterised by:
High domestic demand potential, as Indian markets develop and per capita
consumption level increase
High degree of fragmentation and small scale operations
Limited emphasis on exports due to domestic market focus and smaller
scale of operation.
Low competitiveness as compared to other countries due to higher cost of
power, import duties, taxes and cost of capital.
Low focus on R&D despite initiatives to innovate processes to synthesis
products cost effectively.
In spite of the disadvantages, a few proactive Indian companies have
created sizeable international operations to become significant players in the
global market place. The ability of chemical companies in India to perform better
than global companies has already been reflected by a comparatively better
performance of the Indian operations of some global companies. Operating profit
margins of these Indian subsidiaries range from 8 % to 13 % as compared to the
global operating margins range less than 1 % to 6%.
Several chemical industries in medium and small scale sectors have been
forced to suspend operations due to their inability to adhere to the environmental
standards in view of their technological and investment constraints. While the
country has lost production capacity and economic opportunity to some extent
due to such closures, it appears that the country, by and large has not regretted
about the closure of such units.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS The chemical industries have now realized and have made environmental
issues as an essential part of activity in project design and they provide as much
importance to environmental factors as they do to marketing and financial
aspects. It is necessary that the social activists should recognize this positive
mindset amongst the management of chemical industries and refrain from
launching negative and hate campaign.
Indian chemical industries have now have a great opportunity in the field of
research and development, in view of its large manpower of reasonably good
talent and R&D facilities already created and operating. With the WTO regime in
force, Indian industries should be able to protect their newly developed
technologies and emerge competitive in the global market.
Major South Indian Chlor-Alkali Units
Chempalst, Tamil Nadu
Chern Fab Alkalies Ltd., Pondicherry
Kothari Petrochemmicals Ltd., Chennai
Sree Rayalaseema Alkalies & Allied Chemicals Ltd, Andhra Pradesh
Andhra Sugars, Andhra Pradesh
Southern Petrochemical Industries Corporation Ltd., Chennai
The Travancore-Cochin Chemicals Limited, Eloor; Kerala.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
STATE SCENARIO
Caustic Soda is one of the basic inorganic chemicals manufactured from
common salt. There are four processes used in the manufacturing of caustic soda,
chlorine and Hydrochloric acid which are the bye products obtained through these
processes.
In the state, only TCC is engaged in the production of caustic soda, chlorine
and hydrochloric acid. TCC has an installed capacity to produce 175 TPD caustic
soda and it is used in manufacturing of soaps, textiles, plastics etc. There are many
small scale industries in the state which consumes caustic soda for the production of
soaps, plastics, textiles.
Though the average demand, at an average rate of 4% the capacity has been
increased by nearly 7% in view of the high transportation cost and hazardous nature
of chemicals transported. Also because of the high transportation cost, it is not
possible to export caustic soda in large volume from the state.
The chlorine industrial units are working properly. Chlorine is a basic
material required for water purification and without chlorine; the government water
works will not be able to supply drinking water to the public.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER - 3
COMPANY PROFILE
The Travancore Cochin Chemicals Ltd (TCC) is a state public sector
undertaking owned by the government of Kerala. It is situated at Udyogamandal in
Cochin Industrial area, about 10 kms from Aluva. Incorporated in 1951, TCC is now
one of the oldest chlor- alkali units in India. Today it has a production capacity of
about 57750 MT caustic soda per annum. The other products are chlorine,
Hydrochloric acid, Sodium Hypochlorite, and C.S flakes. The company supports a
large number of industrial units of strategic importance by supplying basic
chemicals with continuous effort for up gradation of technology and professional
management. A wide range of industries like mineral processing, paper, textiles,
petrochemicals, oil refining, pesticides, water treatment, etc uses the products. The
market is spread over southern and western India.
COMPANY PROFILE
The company was formed as a partnership between FACT (Fertilizers and
Chemicals Travancore Ltd) and MCIC (Mettur Chemicals and Industrial
Corporation). The partnership concern floated in the name and style as Travancore
Mettur Chemicals. When commissioned it was the first mercury cell plant for
manufacturing caustic soda in the country and it was the first producer of rayon
grade caustic soda. When the company faced financial difficulties, the Govt. of
Travancore Cochin stepped in with massive financial assistance and the company
was renamed as TCC in 1951.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
. MISSION
The mission statement of the company is as follows:
TCC is committed to supply quality chemicals at competitive prices to
customers. Customer satisfaction, concern for environment and safety are our
priorities.
We intend to achieve:
1. Utmost level of conservation of all resources including energy.
2. Cost effectiveness in all our operation.
3. Regular up gradation of technologies used in processing.
4. Compliance with law and statutory regulations.
CORPORATE OBJECTIVE
The company states in its objective the following:
1. To produce and market chemicals such as Caustic Soda, Liquid Chlorine,
Hydrochloric acid and soda bleach economically and in an environmentally
sound manner.
2. To maintain optimum level of efficiency and productivity so as to secure
optimum returns on investment.
3. To maximize profits from projects taken up.
4. To continuously improve the plant and operational safety and to confirm
statutory pollution control standards.
5. To continuously upgrade the quality of human resources of the company and
to promote organizational development. .
6. To ensure corporate growth by expansion and diversification.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS7. Concerned about the protection of environment.
INITIAL INVESTMENT RECEIVED BY THE COMPANY:
Table No. 2.1
Investment Rs. In crores
Govt. of Kerala 24.80
FACT 2.53
KSIDC 1.5
Sanmar properties & investment 1.17
Total 30.00
QUALITY POLICY OF TCC:
“We are committed to enhance customer satisfaction by providing products
and related services complying with a continually improving quality improving
management system.”
TCC AT PRESENT:
TCC is the only chlorine- Alkali unit in Kerala. In India there are
approximately 38 chlor-alkali units as competitors. The company has helped in
attracting user industries to Kerala in the past, due to assurance in availability of raw
materials. Some of the industries which came up include Indian Rare Earth Ltd,
Hindustan Insecticides Ltd, Hindustan News print Ltd, Kerala Minerals and Metals
Ltd, Kerala chemicals and Proteins Ltd etc.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
DIFFERENT PHASE OF DEVELOPMENT FROM INCEPTION TO
PRESENT:
1 1956- A Continuous Caustic Fusion plant with a capacity to upgrade 20
tonnes of caustic soda per day was added.
2 1958- A Chlorine Liquefaction Plant was added mainly to meet demand
from the new DDT plant of Hindustan Insecticides Ltd, Udyogamandal.
3 1963- The caustic soda capacity was raised to a new level of 40 tonnes per
day. The company established a new unit for the manufacture of Sodium
hydro sulphite with rated capacity of 3 tonnes per day.
4 1967- The third stage of expansion of capacity was raised to 60 tonnes
per day.
5 1970- A 60 tones per day caustic soda concentration plant was set up.
6 1975- 1980 - Exported commercial HCL to gulf countries.
7 1983- Installed an indigenously developed plant to recover mercury from
effluents.
8 1987- Installed Hydrogen firing system in Continuous Caustic Fusion
plant.
9 1988- Replacement of Graphite anodes by Titanium anode.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
101990- Brine Dechlorination unit commissioned.
11 1992- A Research & Development section was set up.
12 1994- The Company in collaboration with Regional Research Laboratory
commissioned a pilot plant on synthetic retiles.
13 1997- The Company commissioned a 100 TPD caustic soda plant in
technical collaboration with ASAHI GLASS Company of Japan using
Membrane cell Technology. The advantage of this process is that the
mercury pollution can be avoided and power consumption can be reduced
by 30%.
14 2000 - The Company setup a Brine purification plant.
15 2001-2002- The Company commissioned a new continuous caustic fusion
plant (CCF).
16 2002-2003 - The Company increased its production capacity of membrane
cell plant to 125 tonnes per day.
17 2004-2005-125 MT per day capacity addition year of import
18 2005-A 25 TPD caustic soda plant employing membrane cell technology
from Uhde, Germany, was commissioned
19 2006- A 25 TPD caustic soda plant employing membrane cell technology
from Uhde, Germany, was commissioned
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
ACHIEVEMENTS
TCC always are the foremost to adopt and incorporate the latest technology
in the plants. Several innovative and modernization schemes were implemented to
achieve higher production and productivity, energy conservation, environmental
control, and economy in inputs.
The company has been dynamic to be pro-active to market and thus to come
out as a profitable public sector undertaking. TCC was bestowed with various
awards for excellent performance with regard to production, which is considered as
an award for commitment, rather than for efficiency.
a. 1981 - Best performance for safety in the state from directorate of
factories and boilers, Govt. of Kerala.
b. 1988-89 Best pollution award under group “Heavy Inorganic
Industries” in Kerala from Kerala state pollution control board.
c. 1987 - Award for best performance in safety in India under “chemical
industries” group from national safety council.
d. 1988-90 Prize for productivity from Kerala state productivity Council.
e. 1993 Best performance award for energy conservation in the state of
Kerala under group “Chemical and Fertilizers” above 3000KV A from
govt. of Kerala.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
f. 1993-95 Best performance award for the productivity in the state of
Kerala under group “Large Industries” from Kerala state productivity
Council.
g. 1995-96 Best -performance award for the productivity in the state of
Kerala under group “Large Industries” from Kerala state productivity
Council.
h. 1997- Best performance award for energy conservation in the state of
Kerala under group “Major Industries” from energy management
center, Govt. of Kerala.
i. 1998 - Performance award for energy conservation under the group
“ChlorAlkali section” from the Minister of Power from Govt. of India.
J 2003 Kerala State Energy conservation award.
k 2005- National Energy Conservation Award "Chlor-alkali
Sector
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
PRODUCTS OF TCC
Caustic Soda:
Caustic soda is a basic alkali (NaOH) used in the manufacture of products like
soap, paper, textiles etc. It also serves the industries like fertilizers, drugs,
engineering and pharmaceuticals, petrochemicals etc. Caustic soda production
increased in the later half of 19th century with the development of electrolysis for
the manufacture of Caustic soda. Caustic soda lye obtained from Membrane cell is a
clear colorless odorless and soapy liquid.
Chlorine (Cl2):
Chlorine, a co-product obtained in the process of manufacture of caustic soda is
an equally important basic chemical, inevitable for the manufacture of paper textiles,
insectides, drugs and pharmaceuticals etc. It also serves the industries such as
mineral processing, sugar, fine chemicals, and rubber etc. It is also renowned water
purification chemical. It is a greenish yellow gas.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS Hydrochloric acid (HCl):
TCC also produces high purity HCl, used for ossein, fertilizers etc. HCl finds
its application in number of chemical industries such as mineral processing, gelatin,
Food industry, water treatment, etc. It also serves the industries like engineering,
starch, and plastics. It is a yellowish green color liquid.
Sodium Hypochlorite:
Another by product, Sodium hypochlorite finds its use in bleaching and
disinfectant applications and also for extraction of rare earth materials. It is a pale
yellowish green clear liquid.
PRODUCT AND PRODUCTION CAPACITIES
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Products Quantity per annum in
M.T
1. Caustic soda 57750
2. Liquid chlorine 23760
3. Hydrochloric acid 127742
4. Sodium
hypochloride
15,000
5. C.S Flakes 30,000
Financial performance analysis THE TRAVANCORE COCHIN CHEMICALSINDUSTRIES SERVED BY TCC’S PRODUCT
Caustic Soda Soap, Paper, Textile, Fertilizers,
Drugs and Pharmaceuticals,
Vanaspathi, Petroleum,
Chemicals.
Chlorine Paper, Textile, Water Purification,
Drugs and Pharmaceuticals,
Mineral processing Sugar, Fine
Chemicals, Rubber etc.
Commercial HCI Acid Fertilizers, Engineering, Mineral
processing, Starch, Ossein,
Plastics etc.
FUTURE PLANS
TCC is in process of setting up a power project on its own. Electricity is one of the
raw materials for the company. It contributes to about 60% of the production cost.
The company would like to go for cheaper sources of power and insulate itself from
the future tariff hikes of the electric supply utility. A hydel power project is under
consideration at present. The problem faced by TCC with respect to this is the
shortage of funds. As expansion in the 1990s and subsequent adverse conditions
has caused TCC to drain its entire reserves and surpluses. It is also difficult to raise
debt funds under this situation. This has forced the company to think about newer
methods of project implementation like the BOT.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS In 1992, the R&D of the company started working on a project to
manufacture synthetic rutile. The company along with The Regional Research
Laboratories set up a pilot plant to manufacture synthetic rutile. It succeeded in
developing the technology. The process uses the products of the company in
manufacturing synthetic rutile. The technology is now ready for commercialization.
MAJOR COMPETITORS OF T.C.C.
T.C.C. is the only chloro - alkali unit in the public sector in India. Some of
Major competitors.
1. Atul Ltd., Ahmadabad
2. Bilt Chemicals Ltd., New Delhi
3. Century Rayon, New Delhi
4. Chern Fab Alkalies Ltd., Pondicherry
5. Champlast Sanmat Ltd:, Mumbai
6. D.C.W. Ltd., Mumbai
7. Grassim Industries Ltd., Nagda (M.P)
8. Gujarat Alkalies & Chemicals Ltd., Gujarat
9. Gujarat Heavy chemicals Ltd., Ahmadabad
10. Hukumchand Jute and Industries, Calcutta
11. Indian Petrochemicals Corporation Ltd., Gujarat
12. India Rayon and Industries Ltd., Mumbai
13. Jayashree Chemicals Ltd., Orissa
14. Kothari Petrochemmicals Ltd., Chennai
15. Saurashtra Chemicals ltd., Gujarat
16. Southern Petrochemical Industries Corporation Ltd., Chennai
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
FINANCE DEPARTMENT
Travancore Cochin chemicals Ltd has an efficient finance department headed
by a finance manager and he is assisted by the deputy manager, finance. Finance
manager is responsible for shaping the fortunes of the company, preparing budgets,
raising funds, keeping different accounts etc. TCC is having a management
information system to assist the finance department. The finance department is
dividing into different sections like general accounts, costing bills, establishment
and provident fund accounts section, each having its own functions.
DEPUTY FINANCE MANAGER
DFM controls the costing process. Various costs such as material costs and
production cost are assessed. Fixed capital and working capital are also planned by
this department. A comparative study on budgeting control is made. The various
areas coming under DFM are as follows;
AOGA: The main area coming under this section is finalization of accounts
and preparation of profit and loss account and balance sheet. Different vouchers,
journals and ledgers are also maintained under this area. Bank, cash, payroll etc also
come under this department. Based on the above data, ratio analysis is done.
AOEDP: This area mainly deals with hardware and software programs of the
computers. Any problems with computers are mainly analyzed by this department.
AO Bills: Under this area, first a quotation is collected from various
companies. If it is accepted, make purchase orders, contains the specifications, date,
place etc. Receiving repots are given. Income, Sales tax and VAT are verified in
this area.
Senior Accounts Officer: The SAO deals with sales accounting. He also
maintains the account of sundry debtors, sales tax, VAT, etc.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALSFinance Manager: The function of finance manager is to have an overall control of
the above departments.
The various sections coming under finance department are explained below;
GENARAL ACCOUNTS SECTION
In this section, a large number of general accounts are kept. These include;
general journal in which the transaction are entered first. Standard journal in which
all recurring items are entered (salary, wages, excise duty), Cash book in which all
cash receipts and payments are recorded, Sundry debtors and Sundry creditors
ledger, Bank book in which all bank payments and receipts are entered, Subsidiary
ledger, which include individual accounts maintained by each department. A trial
balance is prepared every 4 months. Balance sheet is prepared annually for the
financial year coming from April 1st extending to the period till March 31st.
BILL SECTION
In this section, all payments for purchase are recorded. This includes bills
payable to suppliers and contractors. In case supplier demand advance, it is paid and
properly accounted. Sundry creditors ledger and supplier account are kept in this
section. At the end of the year, the accounts are ratified and send to the general
accounts section. In this section, separate cost records are kept and maintained, and
cost audit is conducted every year, both internally as well as by Government
nominees.
COSTING SECTION
Budgeting and budgetary control is the main function of the costing section
where both revenue and capital expenditure budget are prepared. Capital
expenditure is prepared based on the total asset incurred for all the items in all
debts. Revenue budget is prepared on the basis of estimates for production, sales
and expenditure. The balance sheet with total assets and liabilities is prepared and
total cash flow is found.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER - 4
LITERATURE REVIEW
FINANCIAL PERFORMANCE ANALYSIS:
Financial performance analysis is the process of identifying the financial
strengths and weaknesses of the firm by properly establishing the relationship
between the items of balance sheet and profit and loss account. It also helps in short
term and long term forecasting and growth can be identified with the help of
financial performance analysis. The dictionary meaning of “analysis” is to resolve or
separate a thing into its elements or components parts for tracing their relation to the
things as a whole and to each other.
FINANCIAL STATEMENTS:
The financial statements provide rich information about the operational
results of a business unit and much can be learn from a careful examination of these
statements. Financial statements are prepared primarily for decision-making. The
statements are not an end in them, but are useful in decision-making. Financial
analysis is the process of determining the significant operating and financial
characteristic of a firm from accounting data. The Profit and Loss Account and
Balance Sheet are indicators of two significant factors – profitability and financial
soundness. Analysis of financial statement means such a treatment of the
information contained in the two statements as to afford a full diagnosis of the
profitability and financial position of the firm concerned.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
DEFINITIONS:
Metcalf and Titard: “Analysis of financial statement is a process of evaluating
the relationship between component part of a financial statement to obtain a better
understanding of a firm’s operation and performance.”
Myers: Financial statement analysis is largely a study of relationship among the
various financial factors in a business as disclosed by a single set of statements, and
a study of the trend of these factors as shown in a series of statements.”
STATEMENTS FOR ANALYSIS:
The two main statements used in the analysis are
- Balance Sheet
- Profit and Loss account
Balance sheet:
The American Institute of Certified Public Accountants defines Balance sheet
as, “A tabular statement of summary of balances carried forward after an actual and
constructive closing of books of account and kept according to principles of
accounting.” The Balance sheet is one of the important financial statements
depicting the financial strength of the concern. It shows on the one hand the
properties that it utilizes and on the other hand the sources of these properties. The
Balance sheet shows all the assets owned by the concern and all the liabilities and
claims it owes to owners and outsiders. The Balance sheet is prepared as on a
particular date.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Profit and loss account:
Income statement is prepared to determine the operational position of the
concern. It is a statement of revenues earned and the expenses incurred for earning
that revenue. The difference is either profit or loss. The income statement is
prepared for a particular period.
OBJECTIVES OF FINANCIAL ANALYSIS:
The following are the main objectives of the analysis of financial statements:
1. To estimate the earning capacity of the firm
2. To gauge the financial position and financial performance of the firm
3. To determine the long-term liquidity of the funds
4. To judge the solvency of the firm
5. To determine the debt capacity of the firm
6. To decide about the future prospects of the firm
7. To know the progress of the firm
8. To measure the efficiency of operations.
PROCEDURE OF ANALYSIS:
1. The first step involves the re-organization of the entire financial data
contained in the financial statements. Therefore, the financial statements are
broke down into individual components and re-grouped into few principle
elements according to their resemblances and affinities. Thus, the balance
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
sheet and profit and loss account are completely re-casted and presented in the
condensed form entirely different from their original shape.
2. The second step is the establishment of significant relationships between the
individual components of balance sheet and profit and loss account. This is
done through the application tools of financial analysis like Ratio analysis,
Trend analysis, Fund flow analysis, Common size balance sheet and
Comparative Balance sheet.
3. Finally, the result obtained by means of application of financial tools is
evaluated.
TYPES OF FINANCIAL ANALYSIS:
Distinction between the different types of financial analysis can be made either on
the basis of material used for the same or according to the modus operandi of the
analysis or the object of the analysis
1. External Analysis:
Those who do not have access to the detailed accounting records of the company,
i.e., banks, creditors and public, make external analysis of financial statement. These
people depend almost entirely on published financial statements. The main objective
of such analysis varies from party to party.
2. Internal Analysis:
Such analysis is made by the finance and accounting department to help the top
management. These people have direct approach to the relevant financial records. So
they can peep behind the two basic financial statements and narrate the inside story.
Such analysis emphasis on the performance appraisal and assessing the profitability
of different activities.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS3. Horizontal Analysis:
When the financial statements for a number of years are reviewed and analyzed, the
analysis is called “horizontal analysis”. The preparation of comparative statements is
an example of horizontal analysis. As it is based on data from year to year, rather
than on one date or period or time as a whole, this is also known as “dynamic
analysis.”
4. Vertical Analysis:
It is also known as “static analysis”. When ratios are calculated from the balance
sheet of one year, it is called vertical analysis. It is not very useful for long term
planning, as it does not include the trend study for future.
5. Long-term analysis:
In the long term, the company must earn a minimum amount sufficient to maintain a
suitable rate of return on the investment to provide for the necessary growth and
development of the company and to meet the cost of capital. Thus, in the long run
analysis the stress is on the stability and earning potentiality of the concern. In the
long-term analysis the fixed assets, long-term debt structure and the ownership
interest is analyzed.
6. Short –term Analysis:
The short-term analysis of financial statement is mainly concerned with the working
capital analysis. In the short run, a company must have ample funds readily available
to meet its current needs and sufficient borrowing capacity to meet the
contingencies. Hence, in short –term analysis, the current assets and the current
liabilities are analyzed and cash position of the concern is determined. For short-
term analysis, the ratio analysis is very useful.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALSTOOLS OF FINANCIAL ANALYSIS:
The analysis of financial statements consists of a study of relationships and trends to
determine whether the financial position of the concern and its operating efficiency
have been satisfactory. In the process of this analysis, the financial analyst uses
various tools or methods. The analytical tools generally available to an analyst for
this purpose are as follows:
1. Comparative financial and operating statements
2. Common-size statements
3. Trend ratios
4. Statement of changes in working capital
5. Ratio analysis
1. Comparative Financial and Operating statements:
The preparation of comparative financial and operating statements is an important
device of horizontal financial analysis. Financial data become more meaningful
when compared with similar data for a previous period or a number of prior periods.
Statements prepared in a form that reflect financial data for two or more periods are
known as comparative statements. Annual data can be compared with similar data
for prior years. Such statements are very helpful in measuring the effects of the
conduct of a business during the period under consideration. Comparative statements
can be of two types: (i) Comparative balance sheet and (ii) comparative income
statement.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS(i)Comparative Balance sheet: The comparative balance sheet analysis is the study
of the trend of the same items, group of items and computed items in two or more
balance sheets of the same enterprise on different dates. The changes in periodic
balance sheet items reflect the conduct of the business. The changes can be observed
by comparison of the balance sheet at the beginning and at the end of the period and
these changes can help in forming an opinion about the progress of an enterprise.
The comparative balance sheet has to columns for the data for original balance sheet.
A third column is used to show increase in figures, the fourth column may be added
for giving percentage of increase or decreases.
(ii)Comparative income statement: The comparative income statement gives an
idea of the progress of a business over a period. The changes in absolute data in
money values and percentages can be determined to analyze the profitability of a
business. Like comparative balance sheet, income statement has four columns. First
two columns give figures of various items for two years. Third and fourth columns
are used to show increase or decrease in figures, in absolute amounts and
percentages respectively.
2. Common Size Statements:
Comparative statements that give only the vertical percentage ratio for financial data
without giving rupee values are known as common size statements. They are also
known as 100% statements. For example, if the balance sheet items are expressed as
the ratio of each asset to total assets and the ratio of each liability to total liabilities,
it will be called a common size balance sheet. Thus, a common size statement shows
the relation of each component to the whole. It is useful in vertical financial analysis
and comparison of two business enterprises at a certain date. Common size
statements include (i) common size balance sheet (ii) common size income
statement.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
(i)Common size balance sheet: A statement in which balance sheet items are
expressed as percentage of each asset to total assets and percentage of each liability
to total liabilities is called common size balance sheet. This statement establishes the
relationship between each asset and total value of assets and each liability against
total of liabilities.
(ii)Common size income statement: A common size income statement is a
statement in which each item of expense is shown as a percentage of net sales. A
significant relationship can be established between items of income statement and
volume of sales.
3. Trend Ratios:
Trend ratios are also an important tool of horizontal financial analysis. Under this
technique of financial analysis, the ratios of different items for various periods are
calculated and then a comparison is made. An analysis of the ratios over the past few
years may well suggest the trend or direction in which the concern is going upward
or downward. The method of trend percentages is a useful analytical device for the
management since by substituting percentages for large amounts; the brevity and
readability are achieved.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS4. Statement of Changes in working Capital:
Statement of changes in working capital is also very useful to identify the increase or
decrease in working capital over a period. The main objective of this statement
preparation is to derive an accurate summary of the events that affected the amount
of working capital. The amount of net working capital is determined by deducting
the total of current liabilities from the total of current assets. Hence, it is a rough
statement, which may be prepared by using balance sheet data only. However, it
does not explain the detailed reasons for the changes in working capital and methods
of financing additional requirements of working capital. Hence, the preparation of
funds flow statements becomes necessary.
5. Ratio Analysis:
Ratio analysis is an important and widely used tool of analysis of financial
statements. It is essentially an attempt to develop meaningful relationship between
individual items or group of items in the balance sheet or profit and loss account.
The object and utility of ratio analysis as a technique of financial analysis is
confined not only to the internal parties but to the trade creditors, banks and lending
institutions also. It functions as a sort of health test. In the nutshell, ratio analysis
gives the answer to the problems such as: whether the enterprise’s financial position
is basically sound, whether the capital structure of the business is in proper order,
whether the profitability of the enterprise is satisfactory, whether the credit policy in
relation to sales and purchases is sound, Whether the company is credit-worthy.
Thus, ratio analysis highlights the liquidity, solvency, profitability, capital gearing,
etc.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALSLIMITATIONS OF FINANCIAL STATEMENT ANALYSIS:
The analysis of financial statement has certain limitations also. Hence, any person
using this technique must keep in mind those limitations. Main limitations are as
follows:
1. The analysis of financial statements is only a means to reach conclusions and
not conclusion in itself. Therefore, it cannot work as a substitute for sound
judgement. The judgement, ultimately, will depend upon the intelligence and
skill of the analyst.
2. The figures drawn from statement of just one year have limited use and value.
Therefore, it will be dangerous to depend upon them only.
3. The basic nature of financial statements is historic. Past can never be hundred
percent representative of the future. Hence, future course of business events
should be forecasted and interpreted in the context.
4. The results of the analysis of financial statements should not be taken as an
indication of good or bad management. The ratios or other figures explain
only probable state of events.
5. Any change in the method or procedure of accounting mars the utility of such
analysis. The figures of different financial statements lose the characteristic of
comparability.
6. An analyst should also be cautious from window dressing in the accounts.
7. The rapid changes in the value of money also reduce the validity of such
analysis and no useful conclusions can be drawn from a comparative study of
the financial statements of different years.
8. It does not disclose reasons for changes.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER - 5
ANALYSIS AND INTERPRETATION
RATIO ANALYSIS
Profitability ratio
1. Gross profit ratio 2. Net profit ratio
2 Operating ratio 4. Return on total asset
5 Return on capital employed 6. Earnings per share
Liquidity ratios
1. Current ratio
2. Quick ratio
Activity ratios
1. Fixed asset turn over ratio
2. Inventory turn over ratio
3. Debtors turn over ratio
Leverage ratios
1. Debt equity ratios
2. Proprietary ratio
RATIO ANALYSIS
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Ratio analysis is an important and age-old technique. It is a powerful tool of
financial analysis. It is defined as “the indicated quotient of two mathematical
expression” and as “the relationship between two or more things”. Systematic use of
ratio is to interpret the financial statement so that the strength and weakness of a
firm as well as its historical performance and current financial condition can be
determined.
A ratio is only comparison of the numerator with the denominator. The term
ratio refers to the numerical or quantitative relationship between two figures. Thus,
ratio is the relationship between two figures, and obtained by dividing the former by
the latter. Ratios are designed show how one number is related to another.
The data given in the financial statements are in absolute form, are dump, and are
unable to communicate anything. Ratios are relative form of financial data and very
useful technique to check upon the efficiency of a firm. Some ratios indicate the
trend, progress, or downfall of the firm.
In the view of the requirements of the various users of ratio, it has divided into the
following important categories:
A. Profitability Ratio
B. Liquidity Ratio
C. Activity Ratio
D. Leverage Ratio
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
I. PROFITABILITY RATIOS:
A business firm is a profit earning organization. The income statement of
the firm shows the profit earned by the firm during the account period. Profitability
is an indication of the efficiency with which the operations of business are carried
on. Poor operational performance may indicate poor sales and hence poor profits.
The profit figure has , however, different meanings to different parties interested in
financial analysis. The following are the important profitability ratios.
1. GROSS PROFIT RATIO:
The gross profit ratio plays an important role in two management areas. In
the area of financial management, the ratio serves as a valuable indicator of the firms
ability to utilize effectively outside sources of fund. Secondly, this ratio also serves
as important tool in shaping the pricing policy of the firm. This ratio expresses the
relationship between gross profit and sales. This ratio is calculated by dividing gross
profit by net sales.
Gross profit ratio = Gross profit x 100
Net sales
Table showing the Gross profit ratio of TCC:
Table No: 1 (Rs in lakhs)YEAR GROSS PROFIT
(Rs in lakhs)SALES (Rs in lakhs)
G/P RATIO
2004 90.16 9123.33 0.9882362005 -829.24 8868.57 -9.350322006 581.08 10877.3 5.3421352007 61.87 12313.8 0.5024442008 43.69 9384.56 0.465552
Source: Annual Reports of TCC
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS Graph showing the Gross profit ratio of TCC:
Graph No: 1
Interpretation:
Gross profit ratio indicates the degree to which selling price per unit may decline
without resulting in losses from operations to the firm. An increase in the gross
profit ratio may be due to an increase in the selling price without a corresponding
increase in the cost of goods sold or due to a decrease in the cost of goods sold
without a corresponding decrease in the selling price of goods. Similarly, a decrease
in the gross profit ratio may be due to a decrease in the selling price without a
corresponding decrease in cost of goods sold or due to an increase in the cost of
goods without a corresponding increase in the selling price of the goods sold.
Here in the case of TCC the gross profit ratio shows an increasing trend from the
year 2002-2004, but during the year 2005-2007 it shows a decreasing trend.
Therefore, it means that company’s performance in terms of trade is not satisfactory.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
2. NET PROFIT RATIO:
This ratio is also called as the net profit to sales or net profit margin ratio. It is
determined by dividing the net income after tax to the net sales for the period and
measures the profit per rupee of sales.
Net profit ratio = Net profit x 100
Sales
This ratio is used to measure the overall profitability and hence it is very useful
to proprietors. It is an index of efficiency and profitability of the business. Higher
the ratio better is the operational efficiency of the concern.
Table showing the Net profit ratio of TCC:
Table No: 2 (Rs in lakhs)YEAR NET PROFIT (Rs
in lakhs)SALES (Rs in lakhs) N/P RATIO
2004 83.23 9123.33 0.912277
2005 -829.24 8868.57 -9.35032
2006 523.01 10877.3 4.80827
2007 48.52 12313.8 0.394029
2008 27.67 9384.56 0.294846
Source: Annual Reports of TCC
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph No: 2
Graph showing the Net profit ratio of TCC:
Interpretation:
Net profit ratio is used to measure the overall profitability of the organization. It is
an index of efficiency and profitability of the business. Here the company is running
at a loss except 2003-2004, 2005-2006 and 2006-2007. In the year, 2004-2005 the
company is incurred a loss of Rs.829.24 lakh. This is reported mainly due to the
unabsorbed depreciation of Rs.472.86 lakh, written of advance amounting to Rs.
237.91 lakh. The cost of raw material is increasing day by day and the company
could not increase the selling price corresponding with the increase in cost. As
compared to the loss in 1999-2000, the company is in a better position now.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS3. OPERATING RATIO:
Operating ratio is an indicative of the proportion that the cost of sales bears
to sales. Cost of sales includes direct cost of goods sold as well as other operating
expenses. An important ratio is used to discuss the general profitability of the
concern. It is calculated by dividing the total operating cost by sales. Total operating
expenses include all costs like administration, selling and distribution expenses, etc.
but do not include financing cost and income tax.
Operating Ratio = (Cost of goods sold + Operating expenses) 100
Net sales
Lower the ratio; the more profitable are the operations indicating an efficient control
over costs and an appropriate selling price. Reverse is the position when the ratio is
higher. It is one of the most important efficiency ratios.
Table showing the Operating ratio of TCC:
Table no: 3 (Rs in lakhs)
YEAR COST OF
GOODS
SOLD
ADMINISTRATIVE
AND SELLING EXP.
SALES RATIO
2004 6443.99 58.04 9123.33 0.712682
2005 5776.66 58.6 8868.57 0.657971
2006 7256.2 74.95 10877.3 0.673986
2007 8150.57 77.48 12313.8 0.668197
2008 6932.29 70.92 9384.56 0.746248
Source: Annual Reports of TCCGraph no: 3
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph showing he Operating ratio of TCC:
Interpretation: Operating ratio is an indicative of the proportion that the cost of sales bears to
sales. It is also used to measure the general profitability of the concern. Here in the
case of TCC almost all the ratios are near or above 100. The situation is satisfactory
in 2003-2004 periods, because during that period the company earned a profit of Rs.
83.23 lakhs. For the last five years, company’s position in cost of sales to sales is
better as compared with the beginning period, because during the beginning periods
the cost of sales to sales was far above the sales.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS4. RETURN ON TOTAL ASSETS:
Profitability can be measured in terms of relationship between net profit and
total asset. This ratio is also known as return on gross capital employed. It measures
the profitability of investment. The overall profitability can be known by applying
this ratio.
Return on total assets = Net profit x 100
Total assets
The term “net profit” stands for “net profit before interest, tax and dividend.”
Table showing the Return on total assets of TCC:
Table: 4(Rs in lakhs)
YEAR COST OF GOODS
SOLD
AVERAGE T.A. RATIO
2004 6443.99 11149.78 0.57794773
2005 5776.66 10158.38 0.56865957
2006 7256.2 10281.11 0.70577982
2007 8150.57 12349.02 0.66001756
2008 6932.29 12569.55 0.55151457
Source: Annual Reports of TCC
Graph showing the Return on total assets of TCC:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph: 4
Interpretation:
Return on total assets is an important ratio to measure the profitability of
investment. It is a useful measure of financial resources invested in firm’s assets.
The most efficiently the asset used, more profitable would be the business. Here the
highest ratio for return on total assets was during the year 2005-2006 and the lowest
was in 2004-2005 periods. Therefore the company should try to utilize the total
assets more efficiently as a result company can earn better profit.
5. RETURN ON CAPITAL EMPLOYED:
Magnus School Of Business Page 47
Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS This ratio is also known as return on investment. The primary objective of
making investment in any business is to obtain satisfactory return on capital
invested. It indicates the return on capital employed in the business and it can be
used to show the efficiency of the business as a whole. The higher the ratio, the more
efficient use of capital employed.
Return on capital employed = (Net profit before interest, tax and dividend)
x100
Net capital employed
The term net capital employed refers to long-term funds supplied by the creditors
and owners of the firm. Alternately, it is equivalent to net working capital plus fixed
assets.
Table showing Return on capital employed of TCC:Table no: 5(Rs in lakhs)
YEAR NET PROFIT CAPITAL EMPLOYED RCE
2004 83.23 11328.81 0.73467557
2005 -829.24 8987.94 -9.2261408
2006 523.01 11574.27 4.51872991
2007 48.52 13123.76 0.36971112
2008 27.67 12015.33 0.23028914
Source: Annual Reports of TCC
Graph showing the Return on capital employed of TCC:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph: no 5
Interpretation:
Return on net capital employed indicates the return on capital employed in
the business and it can be used to show the efficiency of the business as a whole.
The higher the ratio, the more efficient use of the capital employed.
Here in the case of TCC, it reveals that the ratio does not have a constant nature. In
the financial year 2004-2005, there is no return. In the financial year 2005-2006, the
financial data shows a higher profitability position. This backdrop was happened
because of decline in the operating profit.
6. EARNINGS PER SHARE:
Magnus School Of Business Page 49
Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS This ratio helps in the assessment of the profitability of a firm from the
standpoint of equity shareholders. This measures the profit available to the equity
shareholders per share. It is calculated by dividing the profit available to the equity
shareholders by the number of shares issued. The profits available to the equity
shareholders are represented by the net profits after interest, tax and preference
dividend.
Earnings per share (EPS) = Net profit available to the equity shareholders
Number of equity shares issued
The earnings per share help in determining the market price of the equity shares
of the company. A comparison of E.P.S. of the company with another will also help
in deciding whether the equity share capital is being effectively used or not. It also
helps in estimating the company’s capacity to pay dividend on its equity
shareholders.
Table showing the Earnings per share of TCC:
Table: 6(Rs in lakhs)
YEAR EPS
2004 0.39
2005 -3.89
2006 2.45
2007 0.23
2008 0.13
Source: Annual Reports of TCC
Graph showing the Earnings per share of TCC:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph: 6
Interpretation:
It helps in determining the market price of the equity shares of the company. Here
TCC’s earning per share is not satisfactory. The earning per share in 2002-2003 and
2004-2005 is negative. The highest earning per share is Rs.2.45 in 2005-2006 and
the lowest earning per share is -3.89 in 2004-2005. It means company is running at a
loss and the shareholders will not get any dividend. However, in the year 2005-2006
the company’s earning per share were increases to Rs.2.45 and during the year 2006-
2007 the earnings per share declines to Rs.0.23.
7. RETURN ON EQUITY SHAREHOLDERS FUNDS
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
The profit considered from computing the ratio is taken after payment of
preference dividend.
Return on equity shareholder funds= Net profit after interest, tax,&
Pref. dividend
………......................................
Equity shareholders fund
Equity Shareholder funds= Share capital + Reserves + profits -
Accumulated losses
Table no: 7
(Rs in lakhs)
YEAR NET PROFIT EQUITY SHARE
CAPITAL
ROE
2004 83.23 2131.19 3.90532989
2005 -829.24 2131.19 -38.909717
2006 523.01 2131.19 24.5407495
2007 48.52 2131.19 2.27666233
2008 27.67 2131.19 1.29833567
Source: Annual Reports of TCC
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph no: 7
Interpretation:
Return on shareholders’ fund reveals the overall efficiency of the business. It shows
the relationship between residual profit and shareholders’ funds. Here in the case of
TCC, the Return on shareholders’ fund founds to be fluctuating. The highest ratio
was 41.19 during the year 2005-2006 and the lowest ratio was -46.3 in 2002-2003.
8. DIVIDEND PAYOUT RATIO
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS It indicates the proportion of earning available to equity shareholders. This
ratio is also indirectly throws light on the financial policy of the management in
plugging back.
Table no: 8(Rs in lakhs)
Year Dividend per
equity shares
Earning per
equity share
Payout ratio
2004 8.21 0.39 21.03
2005 8.21 -3.89 -2.11
2006 8.21 2.45 3.35
2007 8.21 0.23 36.07
2008 8.21 0.23 36.07
Source: Annual Reports of TCC
Graph no: 8
9. RETURN ON INVESTMENT
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
The overall profitability is measured by the return on investment, which is the
product of net profit ratio and investment turnover. it is a central measure of the
earning power or operating efficiency of a company.
Return on Investment = EAT sales EAT
………* ……. (Or) ……….
Sales Total assets Total Assests
Table No: 9(Rs in lakhs)YEAR NET PRO(Rs in
lakhs)FIT SHAREHOLDER'S FUNDS
(Rs in lakhs)PERCENTAGE
2004 83.23 2131.19 3.90533
2005 -829.24 2131.19 -38.9097
2006 523.01 2131.19 24.54075
2007 48.52 2131.19 2.276662
2008 27.67 2131.19 1.298336
Source: Annual Reports of TCC
Graph No: 9
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
INTERPRETATION AND INFERENCE:
Return on investments is one of the most important ratio used for measuring
the overall efficiency of the firm. It reveals, how well the resources of a firm are
being used, higher the ratio, better are the results. In 2004-2005, company shows
negative (-38%) return of investment. Butter later company recovers, the very next
year company shows higher ratio (24.54%) in 2005-2006. But later it shows a
declining trend. In last year, company has 1.30% return on investment.
II. LIQUIDITY RATIOS:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Liquidity is the ability of the firm to meet its current liabilities as they fall due.
Since liquidity is basic to continuous operations of the firm, it is necessary to
determine the degree of liquidity of the firm. Important liquidity ratios analysed are
as follows:
10. CURRENT RATIO:
Current Ratio is the most common ratio for measuring liquidity. It represents
the ratio of current assets to current liabilities. It is also called working capital ratio.
In a sound business, a current ratio of 2:1 is considered as an ideal one. The current
ratio of a firm measures its short –term solvency, i.e., its ability to meet short-term
obligations. It is calculated by dividing current assets by current liabilities.
Current Ratio = Current Assets
Current liabilities
Current assets are those, the amount of which can be realized within a period
of one year. It includes cash in hand, cash at bank, bill receivable, sundry debtors,
stock, prepaid expenses, short-term investments, etc.Current liabilities are those
amounts which are payable within a period of one year. Current liabilities are
creditors, bills payable, bank overdraft, outstanding expense, income tax payable,
proposed dividend, etc.
Table showing Current Ratio for the last five years:
Table No: 10(Rs in lakhs)YEAR CA (Rs in
lakhs)CL (Rs in
lakhs)CURRENT
RATIO2004 4267.84 4889.1 0.872005 2588.75 5063.93 0.512006 3576.06 5859.42 0.612007 3717.33 5583.33 0.672008 3457.23 5473.83 0.63
Graph No: 10
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Interpretation:
The current ratio of firm measures its short-term solvency, i.e, its ability to
meet short-term obligations. In a sound business, a current ratio of 2:1 is considered
as an ideal one. It provides a margin of safety to the creditors. It is an index of the
firm’s financial stability. The current ratio must not only be equal to current
liabilities but should leave a comfortable margin of working capital after paying of
the current liabilities. A high ratio indicates sound solvency position and a low ratio
indicates inadequate working capital.
Standard current ratio of a sound business is two and TCC’s current ratio is
below one for the last five years. The highest ratio was 0.87 in 2003-2004, and the
lowest was in 2004-2005 i.e, 0.51. Therefore, we can interpret that the company is
suffering from inadequate working capital. That is they cannot meet their short-term
obligations in time. The main reason for the decrease in current ratio is that, in all
the five years the current liabilities of the company are more than the current assets.
The company should try to increase their current asset, so that they can easily meet
their short -term obligations.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS11. QUICK RATIO:
This ratio is some times known as “Acid Test Ratio” or “Liquidity ratio”. It is the
relation between quick assets to current liabilities. It is determined by dividing
“quick assets” by current liabilities.
Quick Ratio = Quick or Liquid Assets
Current Liabilities
The term ‘quick assets’ refers to current assets which can be converted into cash
immediately. It comprises all current assets except stock and prepaid expenses.1:1 is
considered as an ideal Acid Test Ratio. Quick ratio is the true test of business
solvency. A highest ratio indicates sound financial position and vice-versa.
Table showing Quick Ratio for the last five years:
Table No: 11(Rs in lakhs)YEAR QA (Rs in
lakhs)CL (Rs in
lakhs)QUICK RATIO
2004 2887.77 4889.1 0.59
2005 1921.74 5063.93 0.38
2006 2568.69 5859.42 0.44
2007 2644.85 5583.33 0.47
2008 2414.75 5473.83 0.44
Source: Annual Reports of TCC
Graph showing Quick Ratio of TCC for the last five years:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph No: 11
Interpretation:
An Acid Test Ratio of 1:1 is considered satisfactory as a firm can easily meet all
its current liabilities. If the ratio is less than 1:1, then the financial position of the
concern shall be deemed unsound. On the other hand, if the ratio is more than 1:1,
then the financial position of the concern is sound and good. Quick ratio is the true
test of business solvency. A higher ratio indicates sound financial position and vice-
versa.
Here in the case of TCC the Acid Test Ratio for the five years are below one
therefore the financial position of TCC shall be deemed unsound. In most cases, the
quick ratio of TCC could not achieve the standard quick ratio of 1:1. The highest
Quick Ratio was 0.59 in 2003-2004 and the lowest is -0.015 in 2006-2007.The
greater amount of current liability is the main reason for the low Quick Ratio of the
company.
III. LEVERAGE RATIOS:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Many financial analysts are interested in the relative use of debt and equity in
the firm. These ratios measure the long- term solvency position of the firm.
Following are the important leverage ratios:
12. DEBT-EQUITY RATIO
The relationship between borrowed funds and owners’ capital is a popular
measure of the long-term financial solvency of a firm. This relationship is shown by
the debt-equity ratio. This ratio indicates the relative proportion of debt and equity in
financing the assets
of a firm. An acceptable norm for this ratio is considered 2:1. This ratio is computed
by
dividing the total debt of the firm by its net worth.
Debt-equity ratio = Debt
Equity
Or
Debt-equity ratio = Outsiders’ fund
Shareholders’ fund
The term ‘debt’ refers to the total outside liabilities. It includes all current
liabilities and other outside liabilities like loan, debentures, etc. The term equity
refers to net worth or shareholders’ fund.
Equity or shareholders’ fund = Share capital + Reserves and surplus – Fictitious
assets
Table no: 12(Rs in lakhs)
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
year debt equity ratio
2004 7020.50 2131.19 3.29
2005 7224.00 2131.19 3.39
2006 7518.66 2131.19 3.53
2007 8356.89 2131.19 3.92
2008 7339.7 2131.19 3.44
Graph no: 12 Source: Annual Reports of TCC
Interpretation:
An acceptable norm for this ratio is considered 2:1. A high ratio shows that
the claims of creditors are greater than those of owners. A very high ratio is
unfavorable from the point of view of the firm. A high debt company is able to
borrow funds on very restrictive term and conditions. A low debt-equity ratio
implies a greater claim of owners than creditors. From the point of view of creditors,
it represents a satisfactory capital structure of the business. In debt-equity ratio; also,
the company is not coming to the satisfactory level. The entire debt-equity ratio is
higher than the standard level of 2. There by we can interpret that the claim of
creditors of TCC are much above than of owners. The highest debt-equity ratio was
13.6 in2 004-2005 and the lowest was 6.20 in 2003-2004.
13. PROPRIETARY RATIO:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Proprietary Ratio relates to the shareholders fund to total assets. This ratio shows the
long-term solvency of the business. It is calculated by dividing shareholders’ funds
by the total assets.
Proprietary Ratio = Shareholders funds
Total assets
Shareholders fund = Equity share capital + Preference share capital +
Reserves and surplus – Fictitious assets
Total assets include all assets including goodwill (excluding fictitious assets). The
acceptable norm of the ratio is 1:3(i.e., 0.33)
Table showing the Proprietary Ratio of TCC:
Table no: 13(Rs in lakhs)
YEAR DEBT EQUITY RATIO
2004 7020.50 2131.19 3.29
2005 7224.00 2131.19 3.39
2006 7518.66 2131.19 3.53
2007 8356.89 2131.19 3.92
2008 7339.7 2131.19 3.44
Source: Annual Reports of TCC
Graph showing the Proprietary Ratio of TCC:
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph no: 13
Interpretation:
Proprietary ratio shows the financial strength of the company. It helps the
creditors to find out the proportion of shareholders fund in the total assets. Higher
ratio indicates a secured position to creditors and a low ratio indicates greater risk to
creditors. It indicates the long-term solvency of the firm.
Here the proprietary ratio of TCC never touches the acceptable ratio of 0.33;
therefore, we can assume that the creditors are in great risk. The highest proprietary
ratio was 0.13 in 2002-2003 and 2003-2004. Moreover, the lowest ratio was 0.068 in
2004-2005. The main reason for the unsatisfactory level of proprietary ratio is the
high value of total assets of the company and the low value of shareholders fund.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
IV. ACTIVITY RATIOS:
The published accounts of a firm also provide a useful data for the
measurement of the company’s level of activities. These ratios are also called as
“Turnover ratios.” This ratio highlights upon the activity and operational efficiency
of the business concern. Activity ratios measure how efficiently the firm employs
the assets. These ratios indicate the speed with which assets are being converted into
sales. These ratios are also called as efficiency ratios. Some of the important activity
ratios are as follows:
14. WORKING CAPITAL TURNOVER RATIO:
This ratio reflects the turnover of the firm’s net working capital in the course
of the year. It is a good measure of over-trading and under-trading. The ratio is
calculated as follows:
Working capital turnover ratio = Net sales
Net working capital
Net working capital refers to the difference between current assets and current
liabilities. Current liabilities are those claims of outsiders, which are expected to
mature for payment within an accounting year and include creditors, bills payable
and outstanding expenses. Current assets are those, the amount of which can be
realized within a period of one year. It includes cash in hand, cash at bank, bill
receivable, sundry debtors, stock, prepaid expenses, short-term investments, etc.
Net working capital can be positive or negative. A positive net working capital will
arise when current assets exceed current liabilities. A negative net working capital
occurs when current liabilities are in excess of current assets.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Table No: 14(Rs in lakhs)
YEAR SALES (Rs in lakhs)
NET WORKING CAPITAL
RATIO
2004 9123.33 -621.26 -14.6852
2005 8868.57 -2475.18 -3.583
2006 10877.3 -2283.36 -4.76373
2007 12313.8 -1866 -6.59904
2008 9384.56 -2016.6 -4.65365
Source: Annual Reports of TCC
Graph No: 14
Graph showing the working capital turnover ratio of TCC:
Interpretation:
Here all the working capital turnover ratio of TCC is found to be negative,
because of the negative working capital. In all years the current liabilities exceeds
the current assets. If we ignore the negatives all ratios are found satisfactory. From
this, we can understand that the working capital turn over ratio is fluctuating. That is
in the beginning period it shows an increasing trend then declines and again
increases and then shows a decreasing trend.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS15. FIXED ASSETS TURNOVER RATIO:
This ratio indicates the extent to which the investments in fixed assets
contribute towards sales. If compared with a previous year, it indicates whether the
investment in fixed assets has been judicious or not. The ratio is calculated as
follows:
Fixed assets turnover ratio = Net sales
Fixed assets
Table showing fixed assets turnover ratio of TCC:
Table no: 15(Rs in lakhs)
YEAR COST OF GOODS
SOLD
AVERAGE F.A. RATIO
2004 6443.99 7353.57 0.8763077
2005 5776.66 6730.08 0.85833452
2006 7256.2 7198.7 1.00798755
2007 8150.57 8702.32 0.93659737
2008 6932.29 8982.27 0.77177484
Source: Annual Reports of TCC
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS Graph showing fixed assets turnover ratio of TCC:
Graph: 15
Interpretation:
Here all fixed assets to turnover ratio are near and above one. That means sales
are almost equal to the fixed assets. The highest ratio was 1.38 in the year 2004-
2005 and the lowest was 0.97 in 2002-2003.there was an increasing trend for the
past years because of increase in sales and decrease in fixed assets. We can see that
increase or decrease in fixed assets does not results to increase or decrease in the
sales.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
16. INVENTORY TURNOVER RATIO:
This ratio indicates whether investment in inventory is efficiently used or not.
It, therefore, explains whether investments in inventories are within proper limits or
not. It also measures the effectiveness of the firm’s sales efforts. The ratio is
calculated as follows:
Inventory Turnover Ratio = cost of goods sold
Average stock
Where, Cost of goods sold = Sales – Gross profit or
Cost of goods sold = (opening stock +purchases + direct expenses) - closing
stock
Average stock = opening stock + closing stock
2
The inventory turnover ratio signifies the liquidity of the inventory. A high
inventory turnover ratio indicates brisk sales. The ratio is a measure to discover the
possible trouble in the form of over stocking. A low inventory turnover ratio results
in blocking of funds in inventory. There is no standard ratio for the inventory
turnover.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALSTable showing the inventory turnover ratio of TCC:
Table No.16(Rs in lakhs)YEAR NET SALES (Rs in
lakhs)AVERAGE INVENTORY (Rs in lakhs)
RATIO
2004 9123.33 1336.39 6.826847
2005 8868.57 644.19 13.76701
2006 10877.3 967 11.2485
2007 12313.8 1044.91 11.78456
2008 9384.56 1018.27 9.21618
Source: Annual Reports Of TCC
Graph No: 16
Interpretation:
From this chart we can understood that the highest inventory turnover ratio is
11.73 in the period 2006-2007 and the lowest was 6.75 in 2003-2004. In the last year
the inventory turnover ratio is increased, it is a good sign of improvement in sales. If
sales increase, the inventory cost can be reduced.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
17.DEBTORS TURNOVER RATIO:
The purpose of this ratio is to discuss the credit collection power and policy
of the firm. For this ratio, a relationship is established between accounts receivables
and net credit sales of the period. The debtors turnover ratio is calculated as follows:
Debtors turnover ratio = Net credit sales
Average accounts receivable
The term “accounts receivable” includes trade debtors and bill receivables. This ratio
indicates the efficiency of the staff entrusted with collection of book debts. The
higher the ratio, the better it is, since it would indicate that debts are being collected
promptly.
Table showing the Debtors turnover ratio of TCC:
Table No: 17(Rs in lakhs)
YEAR SALES (Rs in lakhs)
DEBTORS(Rs in lakhs)
RATIO
2004 9123.33 1175.4 7.761894
2005 8868.57 954.67 9.289671
2006 10877.3 1098.56 9.901416
2007 12313.8 1424.95 8.641566
2008 9384.56 1229.14 7.635062
Source: Annual Reports of TCC
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
Graph showing the Debtors turnover ratio of TCC:
Graph No: 17
Interpretation:
Debtors turnover ratio indicates the efficiency of the staff entrusted with collection
of book debts. The higher the ratio the better it is. Since it would indicate that debts
are being collected promptly. The ratio is highest during 2005-2006, lowest during
2002-2003. For the last three years the debtors turnover ratio are found to be
increasing but during the year 2006-2007, it declines to 8.64. Therefore we can
interpret that company should improve their debt collection program so that the
company gets more money for use.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
TREND ANALYSIS
1. TREND ANALYSIS OF INVENTORY
Table No: 18(Rs in lakhs)YEAR INVENTORY (Rs
in lakhs)TREND INCREASE OR
DECREASE
2004 1336.39 100 0
2005 644.19 48.20374 -51.7963
2006 967 72.35912 -27.6409
2007 1044.91 78.189 -21.811
2008 1018.27 76.19557 -23.8044Source: Annual Reports of TCC
Graph No: 18
INTERPRETATION AND INFERENCE: The above table and graph shows the trend of inventory in the
study period, it also shows a fluctuating trend. In2004-2005 it shows a
high decline, later it recovers. But compared to 2003-2004, now company
shows a decreasing trend. TCC has high amount of inventory in 2003-
2004.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS2. TREND ANALYSIS OF DEBTORS
Table No: 19(Rs in lakhs)YEAR DEBTORS (Rs in
lakhs)TREND INCREASE OR
DECREASE
2004 1175.4 100 0
2005 954.67 81.22086 -18.7791
2006 1098.56 93.46265 -6.53735
2007 1424.95 121.2311 21.23107
2008 1229.14 104.5721 4.572061
Source: Annual Reports of TCC
Graph No: 19
INTERPRETATION AND INFERENCE:
Trend of debtors of TCC Company shows fluctuating trend. Compared to
2003-2004, company has better debtor position in 2006-07 and 2007-08. But in last
year it shows a decreasing trend from previous year.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS3. TREND ANALYSIS OF CREDITORS
Table No: 20(Rs in lakhs)YEAR CREDITORS (Rs
in lakhs)TREND INCREASE OR
DECREASE
2004 4054.14 100 0
2005 4184.11 103.2059 3.205859
2006 4519.02 111.4668 11.4668
2007 3950.05 97.4325 -2.5675
2008 3577.14 88.23425 -11.7658Source: Annual Reports of TCC
Graph No: 20
INTERPRETATION AND INFERENCE:
Here we analyze that company’s creditors shows a fluctuating trend. In 2004-
05 and 2005-06 company’s creditors have increasing trend but later it shows a
decreasing trend. In 2007-08 company’s creditors have least amount compared to
other years in study period. It is good sign for the company.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER – 6
FINDINGS In the study period current ratio is not satisfactory. It shows high in
2004. It is not satisfy the standard norm of the ratio.
Proprietary ratio showed as decreasing trend which indicates that the long
term solvency position was liquidating against the interest of creditors.
Debt equity ratio showed slightly fluctuating trend and it satisfy the stand
norm 1:1 in all the years.
Fixed asset to share holders fund ratio of the company was satisfactory.
Gross profit ratio of the concern is satisfactory in the study period. A high
profit margin in ratio is a sign of good and efficient management.
The net profit ratio showed the decrease trend.
Operating ratio is an indicator of the growth the business revealed a
fluctuating trend.
Return on total asset ratio accounts are not satisfactory position in the study
period.
Return on capital employed indicates satisfactory position in the study period
even though the negative trend shows.
Earnings per share ratio attains negative trend in the study period. It shows the
share position of the concern is not satisfied in the study period.
Dividend per share ratio shows the good position of the company.
The pay out ratio shows a good position even though it shows negative.
Trend of debtors and trend of creditors of TCC Company shows fluctuating
trend.
The trend of inventory in the study period, it also shows a fluctuating trend.
In2004-2005 it shows a high decline, later it recovers.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER - 7
SUGGESTIONS
The following are the suggestions which have been made to improve the company:
1. The average liquid ratio shows a declining trend when compared with the
standard norm1:1 the company should pay more attention to improve its
liquidity position.
2. Investment in slow moving inventory should be cut down this fund should be
directed towards marketable securities so as to improve the liquidity position
of the company.
3. Proper techniques should be adopted for planning and control of cash order to
regularize and optimize the use of cash balances
4. The negative growth of profitability ratio should be improved by increasing
by owner’s equity.
5. Particular expenses should be controlled to improve the earnings of the
company.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
CHAPTER - 8
CONCLUSION
The present business world is becoming more complex because of it’s
dynamic nature. The chemical industry provides an assured market for manufacture
of pulp, textiles, soaps, and detergents, pesticides, aluminum, petrochemicals,
drugs& pharmaceuticals, oil refining, etc.
The industry had to be rejuvenated and diversified to produce chemicals viz.
caustic soda lye and flakes, liquid chlorine, hydrochloric acid and sodium
hypochlorite. It is unfortunate that there has been no measure spelt by the
government to save the industry.
To conclude the management of the ‘the Travancore-cochin chemicals
should strive to improve the liquidity position by reducing the investment. The
company should adopt necessary and relevant steps for curtailing the cost to improve
the profitability.
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Financial performance analysis THE TRAVANCORE COCHIN CHEMICALS
BIBLIOGRAPHY
Kevin .S, securities and portfolio management, First
edition (2008), Prentice hall India Pvt Limited.
Shashi K. Gupta, Sharma R.K, Management
Accounting, 10th edition (2005), Kalyani Publishers.
Khan M.Y, Jain P.K, Financial Management,
4th edition (2004), Tata McGraw Publishing Company
Limited.
www.tcckerala.com
www.moneycontrol.com
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