muthuselvan project

7/26/2019 Muthuselvan Project

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EXECUTIVE SUMMARY


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The accuracy of ratio su$ject to the validity of information provided throu%h

alance sheet, !rofit and #oss &/c and interactions with ana%ement.

&s this an academic efforts, it is limited $y time, cost ( covera%e.

This study covers only a part of V.+..

The presents report covers only the 0 consecutive recent year-s data.


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INDUSTRY PROFILE

INTRODUCTION


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India has the hi%hest livestock population in the world with 012 of the

$uffaloes and 312 of the world-s cattle population, most of which are milk of cows

and $uffaloes. +airy development in India has $een acknowled%ed the world over as

one of modern India-s most successful developmental pro%ramme. Today, India is thelar%est milk producin% country in the world.

#ate +'.Ver%hese4urien, the man who $rou%ht milk revolution in the country,

was a renowned Indian social entrepreneur and also known as 5Father of the 6hite

'evolution5, for his 7illion8#itre Idea7 the world7s $i%%est a%ricultural development

pro%ramme.

#ate +'. Ver%hese4urien was instrumental in layin% the foundation of

democratic enterprises at the remote villa%es and far flun% hamlets which ensured

economic justice. The operation took India from $ein% a milk8deficient nation, to the

lar%est milk producer in the world. One of the %reatest proponents of the cooperative

movement in the world, his work has alleviated millions out of poverty not only in

India $ut also outside. 9ailed as the 5ilkman of India5

+airy Cooperatives account for the major share of processed liuid milk

marketed in the India. ilk is processed and marketed $y :;1 ilk !roducers-

Cooperative "nions, which federate into :0 )tate Cooperative ilk arketin%

Federations. Over the years, several $rands have $een created $y cooperatives like

&mul ,Vijaya


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Amul

&mul is an Indiandairy cooperative, $ased at &nandin the state of ?ujarat,

India.The word &mulis derived from the )anskritword &mulya, meanin% invalua$le.

Vijaya dairy mil was formed in :AB, which is a $rand mana%ed $y a cooperative

$ody, the ?ujarat Co8operative ilk arketin% Federation #td. Today &mul is the

#ar%est I#4 !'O+"CD' in the 6orld.

+rVer%hese4urien, founder8chairman of the ?ujarat Co8operative ilk

arketin% Federation #td. credited with the success of &mul. The idea $ehind the

6hite 'evolution which led to the $irth of &"# Evijaya dairy milk wasGthe power

in the idea of co8operatin% all milk producers and poolin% their resources to $uild a

$etter life and achievin% what they could never achieve aloneH.

&mul is located in the town Vijaya which is in tirchy and it has setup itself a

model for development in the rural areas. &mul has around 3.A million producer

mem$ers coverin% :0,@33 villa%e societies and the total capacity of handlin% milk is

around :@.1; million liters every day. The $rand capacity of milk dryin% is aroundB; ts each day and its capacity for cattle field manufacturin% is a$out @;B1 ts

each day.
http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Anandhttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Sanskrithttp://en.wikipedia.org/wiki/Cooperativehttp://en.wikipedia.org/wiki/Cooperativehttp://en.wikipedia.org/wiki/Dr_Verghese_Kurienhttp://en.wikipedia.org/wiki/Anandhttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Sanskrithttp://en.wikipedia.org/wiki/Cooperativehttp://en.wikipedia.org/wiki/Cooperativehttp://en.wikipedia.org/wiki/Dr_Verghese_Kurienhttp://en.wikipedia.org/wiki/India


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T!" mai# $u#%&i'#( '$ &!" Amul ar")

Collection of surplus milk from the milk producers of the villa%e, and payment

$ased on uality and uantity,

!rovidin% support services to the mem$ers like veterinary first aid, artificial

insemination services, cattle8feed sales, mineral mi*ture sales, fodder and fodder

seed sales, conductin% trainin% on animal hus$andry and dairyin%.

)ellin% liuid milk for local consumers of the villa%e,

)upplyin% milk to the +istrict ilk "nion.

The Amul brand

The lar%est distri$ution network for any FC? company. It has nearly 01 sales

offices spread all over the country, more than 0111 wholesale dealers and more than

;11111 retailers.

&mul $ecame the world7s lar%est ve%etarian cheese and the lar%est pouched8milk

$rand.

&"# is also the lar%est e*porter of dairy products in the country. V+ is

availa$le today in over B1 countries of the world. Vijaya dairy milk is e*portin% a

wide variety of products which include whole and skimmed milk powder, cotta%e

cheese


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R"*ula&'ry E#+ir'#m"#& i# &!" Dairy Pr'%"((i#*S"%&'r i# I#dia

The Indian processed dairy industry has %rown anddiversified enormously in

the last few years. To ensure theproper development and %rowth of this industrial

sector,the ?overnment of India has instituted various laws andre%ulations. The

various re%ulations that %overn the dairyprocessin% industry can $roadly $e classified

into

C'm,ul('ry L"*i(la&i'#Pr"+"#&i'# '$ F''d Adul&"ra&i'# A%&- ./01

This &ct is the $asic statute that is intended to protect thecommon consumer

a%ainst the supply of adulterated food.This specifies different standards for various

food articles.The standards are in terms of minimum uality levelsintended for

ensurin% safety in the consumption of thesefood items and for safe%uardin% a%ainst

harmful impuritiesand adulteration. The Central Committee for Food)tandards, under

the +irectorate ?eneral of 9ealth )ervices,inistry of 9ealth and Family 6elfare, is

responsi$le forthe operation of this &ct. The provisions of the &ct aremandatory and

contravention of the rules can lead to $othfines and imprisonment.

Mil a#d Mil Pr'du%& Ord"r 2MMPO3 .//4

The ilk and ilk !roduct Order


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The Certificate also specifies the milk shed area, which,under the order is

defined as a %eo%raphical areademarcated $y the 'e%isterin% &uthority for

thecollection of milk $y the re%istered unit.

aintenance of specified hy%ienic conditions in thepremises where milk and

milk products are handledprocessed, manufactured or stored.The collection,

transportation and processin% of milknormally centres around the operations of

a processin% plant.

The re%ion from which the marketa$le surplus of milkproduction finds its way

to a processin% plant is called aLmilkshed-. The concept of milkshed areas is

pivotal to the!O. For an orderly development of the dairy industry,

aproper assi%nment/allocation of milkshed is critical.

S&a#dard( '# 6"i*!&( a#d M"a(ur"(2Pa%a*"d C'mm'di&i"(3 Rul"(- ./77

These 'ules lay down certain o$li%atory conditions for allcommodities that are

packed form, with respect todeclarations on uantities contained. These 'ules

areoperated $y the +irectorate of 6ei%hts and easures, underthe inistry of Food

and Civil )upplies.

a3 V'lu#&ary S&a#dard(

There are two or%anizations that deal with voluntarystandardization and certification

systems in the foodsector. The ureau of Indian )tandards looks afterstandardization

of processed foods andstandardization of raw a%ricultural produce is underthe

purview of the +irectorate of arketin% andInspection.

83 Bur"au '$ I#dia# S&a#dard( 2BIS3

The activities of I) are twofold, the formulation ofIndian standards in the processed

foods sector andthe implementation of standards throu%h promotionand throu%h


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voluntary and third party certificationsystems. I) has on record, standards for most

ofprocessed foods. In %eneral, these standards cover rawmaterials permitted and their

uality parameters,hy%ienic conditions under which products aremanufactured and

packa%in% and la$elin% reuirements. anufacturers complyin% withstandards laiddown $y the I) can o$tain and GI)IHmark that can $e e*hi$ited on product

packa%es. I)has identified certain items like food colors/additives,vanaspati,

containers for packin%, milk powder andcondensed milk, for compulsory

certification.

%3 Dir"%&'ra&" '$ Mar"&i#* a#d I#(,"%&i'# 2DMI3

The +I enforces the &%ricultural !roducts


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cleared on case to case $asis.?overnment may allow 0:2 without enforcin% theold

limit of B12 applica$le under Forei%n D*chan%e'e%ulations &ct at its discretion.

9ujara& C'',"ra&i+" Mil Mar"&i#* F"d"ra&i'#

In :A;@, +r. Vijaya set up to market the products produced $y the dairies which

was jointly owned $y @.1@ million milk producers in ?ujarat. &fter the key invention

of milk powder from $uffalo milk there was no stoppin% to the %rowth in dairy sector

$ecause in India most of the milk came from $uffalo unlike other countries which

primarily depended on milk. It focused on low pricin% strate%y with superior uality

in order to attract consumers $y %uaranteein% the value for their money.

National Dairy Development Board

The Na&i'#al Dairy D"+"l',m"#& B'ardis an institution of national

importance set up $y an &ct of !arliamentof India. The >ational +airy +evelopment

oard ++= was created in :A0 $y #&TD +r. Ver%hese4urien to fulfill the

desire of the then !rime inister of India 8 the late #alahadur)hastri8 to e*tend the

success of the 4aira Cooperative ilk !roducers7 "nion ++ has now inte%rated

A,111 dairy co8operatives in what it calls the A#a#d Pa&&"r#, linkin% the villa%e

society to the state federations in a three8tier structure.>++ launched its

!erspective !lan 31:1 with four thrust areas Muality &ssurance, !roductivity

Dnhancement, Institution uildin% and >ational Information >etwork.

AMUL PATTRN !N D!""RNT #TAT# O" !ND!A
http://en.wikipedia.org/wiki/Indian_Parliamenthttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Verghese_Kurienhttp://en.wikipedia.org/wiki/Lal_Bahadur_Shastrihttp://en.wikipedia.org/wiki/Amulhttp://en.wikipedia.org/wiki/Indian_Parliamenthttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Verghese_Kurienhttp://en.wikipedia.org/wiki/Lal_Bahadur_Shastrihttp://en.wikipedia.org/wiki/Amul


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system. oreover at that time milk was $ein% sold in $ottles and for the first time in

India he introduced milk in N liter sachets. 9e had a prototype machine for

packa%in% milk in sachets installed in Thiruvananthapuram. From :AK: onwards

under the advice of +r. V. 4urien, $y formin% cooperative societies!rayar?opalakrishnan and others were a$le to introduce I#& to the whole of

4erala.

V"ra 2P"ram8alur3

The !unja$ )tate Cooperative ilk !roducers Federation #imited popularly

known as I#4FD+ !unja$ with $rand name Verka came into e*istence in :A;@

with a twin o$jective of providin% remunerative milk market to the ilk !roducers in

the )tate $y value addition and marketin% of produce on one hand and to provide

technical inputs to the milk producers for enhancement of milk production on the

other hand.!unja$ is the second lar%est milk producin% state in India, producin%

around :12 of the country-s ilk !roduction i.e. K million tons annually.


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COMPANY PROFILE

VIJAYA MIL: UNION

VijayaCo8operative milk producers "nion #td.


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;To Dnhance ilk !roduction &nd !rocurment &nd a*imizereturns To ilk

!roducers yFindin% #ucrative arket For ilk &nd There$y Towards Via$ility Of

ilk "nion.H

Vi(i'

To march forward with a missionary zeal which will make VF a trail$lazer of

e*emplary performance and achievements $eckonin% other ilk Federations in

the country in pursuit of total emulation of its %ood deedsP

To ensure prosperity of the rural ilk producers who are ultimate owners of the

Federation. To promote producer oriented via$le cooperative society to impart an impetus to

the rural income, dairy productivity and rural employment.

To $rid%e the %ap $etween price of milk procurement and sale price.

To develop $usiness acumen in marketin% and tradin% disciplines so as to serve

consumers with uality milk, %ive a fillip to the income of milk producers.

OBJECTIVES

To provide remunerative market for the milk produced $y the farmers.

To provide %ood ( $est uality to its customers.

To $rid%e the %ap $etween masses of rural producers ( millions of consumers.

To achieve socio8economic of the revolution hinterland of the state.

To ensure ma*imum returns to the milk producers.

To provide milk at reasona$le rates to the consumers.


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HISTORY

& %roup of e*perience officers, appointed $y the 4arnataka ilk Federationsurveyed the whole of Vijaya+istricts. Further they found out there is need for a milk

dairy. They surveyed the surroundin% villa%es educated. The villa%es a$out milk and

milk products and the $enefits they would %et from the milk dairy.

The overwhelmin% response received and untapped resources and the hu%e

market. The federation decided to set up the milk union in :AKB, known as the

Vijayadistrict.

Further in :AKK, the 'aipur diary and chillin% center setup in :AK, also came

under the union. In :AKA the trainin% center which was controlled $y 4arnataka ilk

Federation came underVijayailk "nion. Vijayailk "nion was 's. ; crores of the

projects of which ?overnment has 's. 3 croreso f share capital and authorized capital

of +" is 's. 0 crores.

Vijayailk "nion formed 00: ilk !roducers Co8operative societies in

Vijaya, production capacity of Vijayailk "nion is 3 lakhs liters ilk per day and

also has the capacity to produce :3 tons of ilk !owder, :1 tones of $utter, tones of

?hee per day. F" collectin% K18K0 thousand liters of milk per day from its societies

and sells a$ove 0 thousand liters per day and the remainin% milk is used for produce milk

products.

VMU 8uild( a#d ru#( u#d"r &!" %'


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MIL: CHILLIN9 CENTER AND CAPACITY

?ada% 31111 #!+.

9averi 31111 #!+.

9irekerur 31111 #!+.

>ara%unda K111#!+.

'on :1111 #!+.

)irsi 31111 #!+.

DEPARTMENTS IN DMU)

&dministrative +epartment

Finance ( &ccounts +epartment

!rocurement ( Input +epartment

Muality Control +epartment

!roduction +epartment

Dn%ineerin% ( Civil +epartment

arketin% +epartment

Finished ?oods +epartment

!urchase +epartment

)tore +epartment )ecurity +epartment

Canteen +epartment

Time Office +epartment

COMPETITORS

The >andini milk is facin% lot of competition in the milk market. The

primeCompetitors are private players like,

:.harat


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3.)iddhi Vinayak

@.ayour

B.?opal

0.&ditya

.+atta

6ELFARE FACILITIES

I= S&a&u&'ry Fa%ili&i"(

Canteen facility

!ayment to provident fund contri$ution.

'estroom sittin%s

#eave facilities.

I. Casual #eave :0days

II. )ick #eaves :1days.

III. Darned #eaves @1days

"niforms are provided.

!rovision of wash $asins. edical $enefits

II=N'# S&a&u&'ry Fa%ili&i"(=

Factory arran%es cultural pro%rams at the time of ?anesh Chaturthi, workers day and

+eepavali.

Factory often conducts demonstration throu%h social workers in respect of family

plannin%, &I+)awareness, etc.

)taff mem$er-s children will $e provided with %ift for scorin% in ))#C, !"C.

ilk su$sidy for i. :1 months Q ltr free


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III= Fi#a#%ial S%!"m"

Dmployee %ratuity scheme.

Dmployee-s %roup savin%s linked insurance scheme.

Dmployee-s death cum %ratuity scheme.

Dmployees provided fund and pension scheme

S6OT ANALYSIS

STREN9TH

any products are marked.

ajor market share ;12(arket leader in milk products. Competitive price.

The $est uality products.

D*cellent $rand ima%e( distri$ution channels.

Consistency in demand for product thou%ht out the year.

6ide distri$ution network leads re%ular and timely supply.

'educe the transportation cost.

6EA:NESS

ore manpower.

&ll the products are perisha$le products.

!oor retail servin% and consumer %rievance handlin%.

'ecurrin% uality pro$lem

#owest payin% $rand i.e. commission %iven $y the company is less compare to other

$rands

Inadeuate sales promotional activity. +ue to $ad smell that persists low sale

OPPORTUNITIES)

&vaila$ility of $uffalo milk improves market milk uality

!redominant of loose milk se%ment R divide appropriate strate%ies

!henomenal scope for innovation in product development packa%in% and presentation.

)tep should $e taken to introduce value added products like srikhands, ice8cream


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THREATS

>o entry $arriers for private players.

#ow level of consumer awareness.

!ersuade $enefits of competin% $rand.

Increase in ta* and service rate. Increase of competitors.

!'O+"CT)


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CONCEPTUAL FRAME 6OR:

+espite of tou%h competition from various manufacturers of milk and milk

products, Vijayailk "nion still stand to $e one of the most reputed companies in

4arnataka. The Vijayailk "nion aims at providin% health and toned milk to its

customers at a $etter and reasona$le price. Dvery company has to maintain %ood

mana%ement for smooth runnin% of its activities. This study is undertaken to o$serve

the V"performance throu%h ratio analysis techniue $ecause ratio analysis is the

important tool used to o$tain a uick indication of a firm7s financial performance in

several key areas.

RATIO ANALYSIS

It refers to the systematic use of ratios to interpret the financial statements in

terms of the operatin% performance and financial position of a firm. It involves

comparison for a meanin%ful interpretation of the financial statements.


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In view of the needs of various uses of ratios the ratios, which can $e

calculated from the accountin% data are classified into the followin% $road cate%ories

et another factor which influences the usefulness of ratios is that there is

difference of opinion re%ardin% the various concepts used to compute the ratios.

There is always room for diversity of opinion as to what constitutes shareholders

euity, de$t, assets, and profit and so on. +ifferent firms may use these terms in

different senses or the same firm may use them to mean different thin%s at different

times.

'eliance on a sin%le ratio, for a particular purpose may not $e a conclusive

indicator. For instance, the current ratio alone is not asaadeuate measure of short

term financial stren%thS it should $e supplemented $y the acid test ratio, de$tors

turnover ratio and inventory turnover ratio to have real insi%ht into the liuidity

aspect.


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Finally, ratios are only a post mortem analysis of what has happened $etween

two $alance sheet dates. For one thin%, the position in the interim period us $it reveal

ed $y ratioanalysis. oreover, they %ive no clue a$out the future.

In $rief, ratio analysis suffers from some serious limitations. The analyst

should not $e carried away $y its oversimplified nature, easy computation with a hi%h

de%ree of precision. The relia$ility and si%nificance attached to ratios will lar%ely

depend upon the uality of data on which they are $ased. They are as %ood as the data

itself. >evertheless, they are an important tool of financial analysis.


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DATA ANALYSIS AND INTERPRETATION

LI>UIDITY RATIOS

.= Curr"#& Ra&i'

The current ratio measures the short8term solvency of the firm i.e. a$ility to meet

short term o$li%ations.It esta$lishes the relationship $etween current assets and

current lia$ilities.


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Curr"#& Ra&i' Current &sset

Current #ia$ilities

Ta8l" N'=. T!" Ta8l" S!'5i#* Curr"#& Ra&i'(=

Y"ar Curr"#& a(("&( Curr"#&

lia8ili&i"(

Curr"#& a(("& ra&i'

311A831:1 ;0,@A,K1 0K,1;A,@33 :.3A

31::831:3 AK,0@A,1A3 ;0,00,3@ :.@1

31:3831:@ :;3,BB,33B :0@,@1;,BK :.:@

31:@831:B :01,3@1,;K :B3,K@,0@K :.10

31:@831:B :A3,@0@,;1 :A:,K1A,K3; :.1131:B831:0 33:,@B0,KAK :A:,@KA,AK; :.:

9ra,! N') < .=


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0

0.2

0.4

0.6

0.8

1

1.2

1.4 1.29 1.3

1.131.05

1

1.16

$urrent asset ratio

Current asset ratio

I#&"r,r"&a&i'#


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&s per industry norm a Current 'atio of 3: is considered satisfactory. In the

311A8::firm has fair ratio of :.3A: ( :.@:. ut in further years ratios are diluted

sli%htly i.e. :.:@, :.10, :. It indicates firm delays in payments of operatin% e*penses.

4= >ui% Ra&i'

It has $een an important indicator of the firm-s liuidity position and is used as

acomplementary ratio to the current ratio. It esta$lishes the relationship $etween

uick assets and current lia$ilities.

A%id T"(& Ra&i' Muick &ssets

Current lia$ilities

>ui% A(("&( Current &ssets R )tock.

Ta8l" N'=4 T!" Ta8l" S!'5i#* >ui% Ra&i'=

Y"ar >ui% A(("&( Curr"#& lia8ili&i"( >ui% Ra&i'(311A831:1 BK,1KB,;@; 0K,1;A,@33 1.K@

31:1831:: ;;,@B0,@B1 ;0,00,3@ :.13

31::831:3 A@,@;@,A: :0@,@1;,BK 1.:

31:3831:@ K;,B:,K3 :B3,K@,0@K 1.:

31:@831:B KK,130,1;3 :A:,K1A,K3; 1.B

31:B831:0 A:,131,3:3 :K;,;KA,@0 1.BK


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9ra,! N')


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I#&"r,r"&a&i'#

?enerally, a Muick 'atio of :: is considered to represent a satisfactory current

financial condition. From the a$ove company has low ratio in year 311;81K

compared to 311A8:1 i.e. 1.K@: ( :.13:. Firm has satisfactory financial

conditiononly in the year 311A8:1.ut in the year 31:18::,31::8:3firm has constant

ratio


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31:3831:@ :01,3@1,;K :B3,K@,0@K ;,0B;,3BK

31:@831:B :A3,@0@,;1 :A:,K1A,K3; 0B@,KB3

31:B831:0 33:,33@,@B0 :A@,@BB,@@3 3;,K;A,1:@

9ra,! N')


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0

5!000!000

10!000!000

15!000!000

20!000!000

25!000!000

30!000!000

1"!290!538

22!883!469

19!336!"56

"!54"!248

543!842

2"!8"9!013

Net(or'ing &apital

#et$orkin% ca&ital

I#&"r,r"&a&i'#

From the a$ove analysis the >et workin% Capital was fluctuatin% from year

311A8:: to 31::8:@. )o here current asset is more than current lia$ilities. Firm had

a$ility to meet its o$li%ation. In 31:38:0amount of workin% capital has decreased

drastically comparin% to previous years. It indicates that firm stru%%les to meets it

current o$li%ation.


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ACTIVITY @ TURNOVER RATIOS

1= I#+"#&'ry Tur#'+"r Ra&i'

This ratio indicates the num$er of times the inventory has $een

converted into sales durin% the period.

Cost of %oods sold


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9ra,! N')


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0= A(("&( Tur#'+"r Ra&i'

&sset turnover ratios, also called efficiency ratios.The relationship $etween

assets and sales is known as assets turnover ratio. This ratio shows the firm-s

a$ility to %enerate sales from all financial resources committed to total assets.

Total asset turnover Total )ales@Total &ssets

Ta8l" N'=0 T!" Ta8l" S!'5i#* A(("& Tur#'+"r Ra&i'(

Y"ar Sal"( A(("&( Ra&i'(

311A831:1 1;,A3,@K0 :;A,@KK,;AB @.@A

31:1831:: ;@;,AA,K31 :A,;@;,B;; @.;0

31::831:3 AK,:B,AK3 3KA,:AB,3A: @.@031:3831:@ :,3@1,3;K,1A3 3;,:33,K0@ 1.B

31:@831:B :,B@K,:01,K1 @33,KAA,0;@ B.B0

31:B831:0 :,@B0,@B3,K0A 3KA,ABB,;00 B.@


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9ra,! N')


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= D"8&'r( Tur#'+"r Ra&i'

This indicates the num$er of times avera%e de$tors have $een converted intocash

durin% a year.

+e$tor Turnover 'atio >et Credit )ales/ &vera%e 'eceiva$le. >et Credit

)ales ?ross Credit )ales 8 )ales 'eturn.

&vera%e 'eceiva$les


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0

10

20

30

40

50

60

"0

80

30.93

55.91

48.5

"2.09

60.08

4".55

De)tors turnover Ratios

*ebtors turno(er

atios

I#&"r,r"&a&i'#

From a$ove it portrays that in year 311A8:1firm was collectin% its de$ts

slowly compared to311A8::


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7= A+"ra*" C'll"%&i'# P"ri'd

It is a period reuired to collect the outstandin% amount from the

customers.

&vera%e Collection !eriod


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9ra,! N')


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= Cr"di&'r( Tur#'+"r Ra&i'=

& creditor7s turnover ratiois a reflection of how uickly a company pays

its creditors. This is also known as a paya$le turnover ratio. It is calculated to jud%e

the reuirements of cash for payin% sundry creditors.

Creditor Turnover 'atio >et Credit !urchases

&vera%e !aya$le

>et Credit !urchases ?ross Credit !urchases 8 !urchase 'eturn

&vera%e !aya$les


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9ra,! N')<

0

10

20

30

40

50

6045.38

53.94

42.043".53 3".81 35.6"

$reditors turnover Ratios

Creditors turno(er

atios

I#&"r,r"&a&i'#

The%raph shows ups ( downs in the ratio of Creditors Turnover.The

ratios for years were B0.@K times, [email protected] times, B3.1B times, @;.0@ times, @;.K:

times, and @0.; times. y o$servin% these ratios, it may $e interpreted that company

is takin% lon%er time to repay its creditors.


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/= 6'ri#* Ca,i&al Tur#'+"r Ra&i'

& hi%her ratio is an indicator of $etter utilization of current assets and

workin% capital and vice8versa et )ales

>et 6orkin% Capital

6orkin% Capital Current &ssets 8 Current #ia$ilities.

Ta8l" N'=/ T!" Ta8l" S!'5i#* 6'ri#* Ca,i&al Tur#'+"r Ra&i'

Y"ar N"& Sal"( N"& 6'ri#*

Ca,i&al

Ra&i'(

311A8:1 1;,A3,@KB :;,3A1,0@K @0.:

31:18:: ;@;,AA,K31 33,KK@,BA @3.3@

31::8:3 AK,:B,AK3 :A,@@,;0 01.1A

31:38:@ :,3@1,3;K,1A3 ;,0B;,3BK :@

31:@8:B :,B@K,:01,K10 0B@,KB3 3BB.B3

31:B8:0 :,0B@,@@,KBK 3@B,B0 0A.0B


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9ra,! N')


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FINDIN9SANDSU99ESTIONS

FINDIN9S

The current ratio is $elow the industry norm 3: which discloses that

company-s position is not %ood to meet its short term o$li%ations.

The firm does not maintain the ideal uick ratio ::. Its 1.B: in the year

31:@8:B

&mount of workin% capital has decreased drastically which indicates that firm

stru%%les to meets it current o$li%ation. The inventory turnover ratio is :0 times which is a$ove the industry norm K

times which shows that firm is efficient in mana%in% its inventory.

The de$tor-s turnover ratios are increasin% drastically from year to year which

shows how efficiently a company is collectin% its credit sales.

&vera%e collection period is increased in 31:@8:B which shows that company

is improvin% in collectin% de$t.

The company is takin% lon%er time to repay its creditors which is the result of

poor liuidity.

The study reveals that there is drastic increase in workin% capital turnover ratio

which shows that a company does not have enou%h capital to support its sales

%rowth.

Firm should use its asset efficiently and effectively to %enerate adeuate sales.

SU99ESTIONS


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It is e*amine that company should improve its current ratio in order to meet its

o$li%ation ( increase the ar%in of )afety for creditors.

The firm should %enerate cash in order to repay its creditors as possi$le as

possi$le.

It is su%%est that the firm has to maintain ideal uick ratio ::.

The study reveals that 6orkin% Capital is Over8#evera%ed. )o it advised to

V" to adopt )cientific Inventory ana%ement to improve G6orkin%

Capital.H

V" should appoint skilled la$ours in order to increase the efficiency of firm.

V" should adopt innovative technolo%y in order to increase the productivity.

V" should take precautionary measures to increase its sales.

CONCLUSION


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The study on )hort8term Finance in the +" is satisfactory. The study of 0

years reveals that liuidityposition of the +" is fair.

Firm is facin% financial crisis ( less uantity of milk supply in the previous

years. It shows that firm is facin% difficulties to meet its current o$li%ation. Company

should %enerate cash to meet its current o$li%ations.

V" should improve its financial conditions $y increasin% its workin% capital

to earn more profits.

The activity position of the V" is %ood as the company is efficient in

mana%in% its inventory :0 times which is more than industry norm K times. Firm is

also collectin% its de$t uickly in days.

muthuselvan project

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