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A STUDY ON FINANCIAL PERFORMANCE OF RAIDCO

CHAPTER-1

INTRODUCTION


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INTRODUCTION TO STUDY

FINANCIAL STATEMENT ANALYSIS

Financial statement analysis is defined as the process of identifying financial

strengths and weaknesses 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 that are used in analyzing financial

statements, such as comparative statements, schedule of changes in working capital,

common size percentages, funds analysis, trend analysis, and ratios analysis.

Financial statements are prepared to meet external reporting obligations and also for

decision making purposes. They play a dominant role in setting the framework 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 in

making decisions through analysis and interpretation of financial statements.

OBJECTIVES OF FINANCIAL ANALYSIS

Financial analysis is helpful in assessing the financial position and profitability of the

concern. This is done through comparison by ratios for the same concern over a period of

years; or for one concern against another; or for one concern against the industry as a

whole (inter-firm comparison); or for one concern against predetermined a standards; or

for one department of a concern against other departments of the same concern (intra-

firm comparison). Accounting ratios calculated for a number of years show the trend of

the change of position, i.e. whether the trend is upward or downward or static.

The main objectives of the analysis of financial statements are to assess:

o The present and future earning capacity or profitability of the concern,


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o The operational efficiency of the concern as a whole and of its various parts or

departments,

o The short term and long term solvency of the concern for the benefit of the

debenture holders and trade creditors,

o The comparative study in regard to one firm with another firm or one department

with another department,

o The possibility of developments in the future by making forecast and preparing

budgets,\

o The financial stability of a business concern,

o The real meaning and significance of the financial data, and

o The long term liquidity of its funds.

In addition to the analysis, interpretation also requires comparison to draw

meaningful results. Mere examination of the various components of financial statements

like current assets, current liabilities, long term liabilities, share holders’ fund, working

capital, gross profit, operating profit, cost of goods sold etc. will not lead to definite

conclusion in regard to the financial status of a business. Comparison of related

components like current assets with current liabilities, long term liabilities with

shareholders fund, gross profit with sales etc. is requires to draw meaning full

conclusions about the position of a company. Therefore, to interpret the position of a

company, it is necessary not only to separate the totals given in its financial statements in

to various components of like nature but also to make comparison of related components.

In addition to this comparison of various components with that of previous year analysis

should be made to know the changes that have taken place in the business over several

years.


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Techniques or Tools of Analysis and Interpretation

The following techniques can be used in connection with the analysis and interpretation

of financial statements:

� Comparative Financial Statements

� Common Measurement Statements

� Trend Percentage Analysis.

� Net working Capital Analysis

� Ratio Analysis

Comparative Financial Statements:

These statements are prepared in a way so as to provide time prospective to the

consideration of various elements of financial position embodied in such statements. This

is done to make the financial data more meaningful. The statement of two or more years

are prepared to show absolute data of two or more years, increases or decreases in

absolute data in value and in terms of percentages. Comparative statement can be

prepared for income statement as well as position statement or balance sheet.

Common Measurement Statements:

Common size financial statements are those in which figures reported are converted to

some common base. Vertical analysis is requires for an interpretation of underlying

causes of changes over a period of time. For this, items in the financial statements are

presented as percentages or ratios to total of the items and a common base for comparison

is provided. Hence vertical analysis becomes possible. Each percentage shows the

relation of the individual item to its respective total. Common size statements may be

used for Balance sheet as well as income statement.


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Trend Percentage Analysis:

This analysis is an important tool of horizontal financial analysis. This analysis

enables to know the changes in the financial function and operating efficiency between

the time period chosen. By studying the trend of each item, one can know the direction of

changes and based upon the direction of changes, the opinions can be formed. This

method is immensely helpful in making a comparative study of financial statements in

several years.

Net working Capital Analysis:

This statement is prepared to know the net changes in working capital of the

business between two specified dates. It is prepared from current assets and current

liabilities of the said dates to show the net increase or decrease in working capital.

Ratio Analysis:

It is done to develop meaningful relationship between individual items or group of

items usually shown in the periodical financial statements published by the concern. An

accounting ratio is the relationship between two inter-related accounting figures as gross

profit to sales, current assets to current liabilities etc.

Profitability Ratios:

Profitability ratios measure the results of business operations or overall performance and

effectiveness of the firm. Some of the most popular profitability ratios are as under:

• Gross profit ratio

• Net profit ratio

• Operating ratio

• Expense ratio

• Return on shareholders investment or net worth

• Return on equity capital

• Return on capital employed (ROCE) Ratio

• Dividend yield ratio

• Dividend payout ratio

• Earnings Per Share Ratio


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• Price earning ratio

Liquidity Ratios:

Liquidity ratios measure the short term solvency of financial position of a firm. These

ratios are calculated to comment upon the short term paying capacity of a concern or the

firm's ability to meet its current obligations. Following are the most important liquidity

ratios.

• Current ratio

• Liquid / Acid test / Quick ratio

Activity Ratios:

Activity ratios are calculated to measure the efficiency with which the resources of a firm

have been employed. These ratios are also called turnover ratios because they indicate the

speed with which assets are being turned over into sales. Following are the most

important activity ratios:

• Inventory / Stock turnover ratio

• Debtors / Receivables turnover ratio

• Average collection period

• Creditors / Payable turnover ratio

• Working capital turnover ratio

• Fixed assets turnover ratio

• Over and under trading

Long Term Solvency or Leverage Ratios:

Long term solvency or leverage ratios convey a firm's ability to meet the interest costs

and payment schedules of its long term obligations. Following are some of the most

important long term solvency or leverage ratios.

• Debt-to-equity ratio


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• Proprietary or Equity ratio

• Ratio of fixed assets to shareholders funds

• Ratio of current assets to shareholders funds

• Interest coverage ratio


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SCOPE OF STUDY:

The study intends to measure the over all performance especially financial

performance of RAIDCO. The study was conducted by using the primary and secondary

data of the company.

PERIOD OF THE STUDY

The analysis is made on the basis of secondary data furnished by ‘RAIDCO’,

for the period of five year from 2004-2009.


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OBJECTIVE OF THE STUDY:

The main objective of the study was to judge the financial position of the

enterprise through analysis of financial Statement.

Secondary objectives:

o To study the liquidity position of the organization

o To study about the long term solvency of the firm.

o To study the profitability of the concern

o To study the earning capacity of the firm

o To have an idea about the overall financial performance of the firm.


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LIMITATION OF THE STUDY

o The tool for the study that is ratio analysis, trend analysis has its own

limitations which in turns effect the accurate evaluation of financial

performance of the firm.

o The analysis was made on the basis of data derived from the secondary

sources and hence the suggestions derived may not be 100 percent reliable.

o The period of study was very limited.

o This study mainly covers the financial aspects and hence the factors which are

non-financial and important for working of the company were not taken into

accounts.


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CHAPTER-2

COMPANY PROFILE


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AN OVERVIEW TO THE COMPANY

Name of the company RAIDCO CURRY POWDER FACTORY

Established : 2000

Address RAIDCO CURRY POWDER FACTORY

,(po)moonuperia , mavilayi, kannur

Business manufacturer, exporter

Primary competitive

it ensures clean and hygiene price quality and

advantage quantity

No of production time four production lines

Export countries gulf countries

(UAE, SAUDI ARABIA, QATAR, etc)

Membership spices board

Awards ISO 9001- 2000

Product range

quality products, spices, spices mix, mineral water,

curry powder, pickles, jam squash etc.


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INDUSTRY PROFILE

India is one of the world second largest producer of food next to china and as

the potential of being the biggest with the food and agricultural sector with India’s food

production to double in the next decade, there is an opportunity for large in investment in

food and food technologies, skills and equipments, especially in areas of canning diary

and food processing, packing. Frozen food and refrigerators and thermo processing, fruits

and vegetables fisheries, milk and milk products meat and poultry. Packaged and

convenience foods, alcoholic beverages and soft drinks sectors of the food processing

industry. Health food and health food supplement are other rapidly segments of their

industry which gaining vast popularity among the health conscious.

The transition from an area of food scarcity to surplus to surplus serve as a witness to

tremendous progress made in the industry being one of the best and most dynamic

markets.

In India, food has seen rapid growth in most of its segments. Increased per capita income

and high cooperate interest in the organized retail market creates a platform for the Indian

food industry. To leap forward all participants in this sector. Especially looking at market

entry and investment in India, will benefit from this briefing include a political industry

profile, growth drivers and growth opportunities.

With the overwhelming the green and white revolution, India is now frequently

poised for the food revolution that will ensure agricultural diversification and large

investments is food processing. The entries of multinationals, aggressive rise of

commodity branding and low cost of technology are changing the economics of the

Indian food industry .the rise aggressive regional, players making forays in

CURRY POWDER IN INDIA

Curry powder, also known as masala powder, is a spice concoction of

extensively varying composition developed by the British during the Raj as a means of

approximating the flavor of Indian cuisine at home. Curry powder is thus an English

invention, where it is still popular. Masala refers to spices, and this is the name given to


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the thick pasty liquid sauce of combined spices and ghee (clarified butter), butter, palm

oil or coconut milk. Curry powder typically includes coriander, turmeric, cumin, and

fenugreek in their blends. Masala is a term used in Indian cuisine to describe a mixture of

many spices. Depending on the recipe, additional ingredients such as ginger, garlic,

fennel seed, clove, mustard seed, green cardamom, black cardamom, nutmeg, red pepper,

cinnamon and black pepper may also be added. It is also the name given to a different

mixture of spices that include curry leaves, which is used in South and Eastern Indian

cuisine. The word curry is a derivative of the south Indian word curriel, which was used

in the local language (Tamil) for a fish stew that had tamarind and curry. This was then

picked up and transformed into the present "curry" by the British. The word "curry", in its

English sense, has no direct translation into any to India's fifteen languages, and Indians

do not use the term even when speaking English. Curry powder is in fact a blend of

spices, varying according to regional preferences or traditions. As a result, there are

literally thousands of "curry powders", each of which was uniquely suited for the produce

and tastes of the region it developed in. Garam Masala is a Northern Indian style sweet

curry blend useful for many vegetarian Indian dishes. Indians tend to use garam masala

of which there are also many incantations. In the south another mixture called "sambhar

powder" is used which is quite different from garam masala. Curry powder, blend of

many spices comes in almost endless varieties. Each curry powder can have different

component spices, in differing amounts--making each curry blend


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ORGANISATIONAL CHART OF RAIDCO

Board of Directors

Chairman

Managing Director

Finance Manager Marketing Manager Purchase Manager

Assistant Manager Regional Manager Asst. Purchase

Manager

Sales Outlets

Factory Manager

Pump set

manufacturi

ng unit

Agricultur

al and

Roller

manufactu

ring unit

Fruit

Canning

unit

Curry

powder

unit

Steel

furniture

manufactu

ring unit


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COMPANY PROFILE

Introduction

The regional agro industrial development cooperative Kerala limited (RAIDCO

KERALA limited)a well organized group in Kerala of co. operative sector under

government of Kerala established in the year 1972 . This is the first federal type of

registered co. operative society in Kerala engaged in manufacturing and marketing

agricultural equipments and implements of improved quality. Its registered office at

Kannur. Right now this co. operative society has four production unit, three service

centers and 43sales outlets throughout the state. This canters the needs of the farmers in

every nook and corner of Kerala.

The RAIDCO has been functioning state for 37yeras and rendering services

to the farmers, general public and workers with an intention to give quality product in the

field of consumer and commercial product at minimum cost. its also rendering services to

farmers by distributing pump set ,power tillers, sprayers and other agricultural

implements of improved qualities manufacturing used by almost all reputed firms in

India. The co. operative which is the first of its kind in the state and had confined its area

of operation to 8 northern revenue districts start from KASARKODE to ERNAKULAM.

The authorize share capital of co. operative is 30 crore. The major

shareholders of the co. operative are the primary society bank functioning in the area of

operation. However membership is open to individual residing in area of operation and

also to state government.

Besides being dealer of all important pump set manufacturers in India the co.

operative also deals in the purchase and supply of industrial machines required for in

small scale industries and rural artisans.

The co. operative has succecceded in making tremendous increase in in sales and the sales

Proceeded also indicates dramatic raise from 6.82 lakhs in 1972-1973 to RS. 76 crores

in 2008-2009.


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The major advantage in the service of this co. operative are that in ensures the

supply of high quality pump set and other agricultural implements considerably low rate

and also provides timely after sales service for the machinery supplied it ,agricultural

workshop cum- service centers . for undertaking all kind of repairs to all types of pump

set, sprayers , tillers , and tractors etc has been set up at kannoth , chalod in Kannur

district.

The co. operative has entered in the manufacturing field also. According a unit for

manufacturer of irrigation pump sets has been set up at kanjikode in palakkad district

with the technical collaboration of M/s kerloskar brothers ltd. And also with the financial

assistant of national co operative development corporation, New Delhi and government

of Kerala. Besides this co operative has also run a fruit canning unit at mattanur, a rubber

roller manufacturing unit at kanothe meethal, A every powder manufacturing unit at

mavilayi in Kannur district with the financial assistant of NCDC and state government

The pump set manufacturing unit and every powder unit ISO-9001:2000

certificate now this sector entered export also.

‘


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OBJECTIVES OF THE COMPANY(bye –laws)

The main objectives to persuade by the co. operative are.

1. To purchase or manufacture or hire agricultural machineries and implements

inclusive of power ploughs, power tillers. Thrashers, tractors, pump set, pvc pipesetc to

sell or supply hire purchase basis or on hire.

2. To purchase or manufacture industrial machineries either to sell or supply or hire

purchase basis to cottage /small/ medium/large scale industries.

3. To promote establish, maintain and manage the business relating to the manufacture

, purchase and sale of any type of products based on any type of fruits and vegetables.

4. To act as an agent on behalf of the central and state government co. operation ,

organizational institution or concern for distribution of agricultural machinery and other

allied articles.

5. To arrange for procurement or manufacturing and distribution of organic and

chemical fertilizers, seeds with pesticides etc.

6. To undertake rural electrification, lift irrigation programs , small hydropower projects

undertake such works.


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Export Raidco curry powder unit got exporting license in 2006 June. Now the company

exports their products into gulf co. operative council countries. They are mainly

exporting all type of curry powder, masalas, payasam mix and all packed biriyani rice to

these countries. The ramzan trading establishment based marketing Company markets the

RAIDCO FAMILY CURRY POWDER following gulf co. operative council countries.

• UAE

• BAHARAIN

• SAUDIA ARABIA

• OMAN

• QUTAR


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ORGANISATION CHART OF RAIDCO

Board of Directors

chairman

Managing Director

Finance Manager

Marketing

Dept,

Producti

on Dept.

Store

Dept.

Quality

control

Dept.

Finance

Dept.

Purchase

Dept.

Sales

officer

Plant

supervis

or

Clerk Quality

controlle

r

Account

ant

purchase

r

Sales

representa

tive

Technici

an

Lab

Asst.

Clerk Manager

Typist &

Attender

Clerk


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MANAGEMENT OF RAIDCO

� The administration department and management of this cooperative shall

Vest in the board of directors consisting of fifteen members as shown here

Under:.

1. Eleven directors to be selected from A class members from any revenue District

and time, not exceeding three

2. Two directors are selected from B class members

3. One EX – OFFICIO DIRECTOR namely president Kannur district co. operative

Bank, Kannur.

4. Managing director

1. The chairman may be paid a honanararium of Rs. 2500 per month subject to

the approval of registration of co. operative society.

2. The services of directors shall be graduations they may be however be paid

setting fee and traveling allowances for journey performed in connection with

the of the co. operative for attending the board meeting or any sub committee

their after of at the rates fixed by the board of directors to the maximum rates

fixed by registrar

3. The terms of officio of the board of directors shall be five years from the date

of their assumption of officio casual vagrancies arising in the board may be

filled up as provided in the co. operative society.

4. Any elected directors may any time resign from office by sending a letter of

Registration to the chairman of the co. operative.

5. No persons shall be eligible for being elected appointed a member of board of the

6. Co .operative. If he is disqualified under the Kerala co. operative society act

and rules

7. Members of board of directors shall cease to hold office if he invites any of the

disqualification mentioned in the act and rules.


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8. Members of board of directors shall elect from among themselves a chairman and

Vice chairman

MEMBERSHIP

There shall be three class of membership as under:

o A class membership is open to state, district and primary level co. operative

institution, local bodies and co. operative bodies functioning in the area of the

operation of the cooperative.

o B class membership is open to any individual who possess the qualifications

prescribed under the Kerala co. operative society and are residing in the area

of operations of the co. operative.

o C class membership is open to central and state government

CAPITAL STRUCTURE 2008-2009

The authorized share capital of the co. operative structure of the present is Rs. 7

crore.

20000 A class shares of Rs. 100 /each = Rs .10000000

20000B Class share of Rs .100/each = Rs. 2000000

580000 C class shares of Rs. 1000/each = Rs. 58000000

Total = Rs, .70000000


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POLICIES OF RAIDCO CURRY POWDER FACTORY

• Maximum utilization of available resources and capacity

• Reducing time

• Controlling the cost

• Utilization of modern machinery and materials

• Maintaining the improving the quality throughout of manufacturing process

• Low complaints from customers and consumers

SERVICES OF RAIDCO

• Financial assistances to farmers for selecting farm machineries.

• Purchasing and distributing only best quality pump set and other farm

machineries.

• assume best quality of products ISI products

• state government provides subsidies for purchasing raidco pump sets .

• provide one year guarantee and after sale service from RAIDCO PUMPSET.

• products of reasonable price

• provide mobile workshop

• RAIDCO family curry powder unit supply goods to shabarimala devasswam

board for making aravana payasam.

• it supplies goods to P.T .USHA school of sports koyilandi under government

service

• it also supplies essential goods to panchayat owned school as service of

government

• Raidco provides original spare parts


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RAIDCO PRODUCTS

• Chilly powder

• Turmeric powder

• Meat masala

• Coriander powder

• Sambar powder

• Rasam powder

• Pickle powder

• Rasam powder

• Chicken masala

• Aval

• Fish masala

• Whole wheet atta

• Regular atta

• Puttu podi

• Appam podi


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REGISTRED OFFICE AND HEAD OFFICE

Registered office and head quarters of this co. operative are situated at Kannur in

the state of Kerala.

Area of operation

RAIDCO has branches all over Kerala from Kasarkode to

Thiruvananthapuram district. however for conduct of sales and marketing the product

manufactured or dealt in by the co. operative and to develop the infrastructure their if

establishing , opening and running of branches , god owns , showrooms , service centers ,

work shop etc. and appointment of distributors , stockiest and carry forwarding agents

their shall be restriction with regard area of operation.

COMPANY MOTTO

Motto of RAICO KERALA LIMITED is “an intimate friend to farmer”

MANUFACTURING UNITS

a. RAIDCO pump set manufacturing unit

b. RAIDCO Rubber roller manufacturing unit

c. RAIDCO Fruit canning manufacturing unit

d.. RAIDCO CURRY POWDER MANUFACTURING UNIT

BRANCHES AND UNITS

Raidco Kerala limited has 38 branches in all over Kerala. 2 show rooms, 4

manufacturing units and 4 work shop cum service centers.

Fruit processing unit

Pineapple processing unit is started at Mattanur at Kannur district in 1997, with the

financial of Kerala khadi and village industry board. This unit produced various kinds of

pickles, jams, squashes, at large scale and marketed. Now raidco is marketing 10

products from the unit including pineapple products, pickle, jams, squashes and syrups.


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Agricultural workshop cum rubber roller products

Raidco started an agricultural workshop cum service centers in kannothumachal at

Kannur district by the financial assistance of the state government and NCDC. The

objective of the workshop is top repair and service the agricultural like pump set, power

tiller etc at reasonable rates.

Pump set manufacturing unit

Raidco has started a pump set manufacturing unit with the technical assistance for

kriloskar brothers in kanjikode at palakkad district in 1986. Now raidco is providing jet

and mono blocked pump set starting from 0.5 to 1.5hp. Apart from this raidco has

producing thrasher, rubber roller and power etc from this unit.

CURRY POWDER UNIT

Raidco has started a curry powder unit at mavilayi in Kannur district. Raidco curry

powder factory has been set up in assistances with NCDC and state government.


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DEPARTMENTS OF RAIDCO FAMILY CURRY POWDER

� Finance department

� Marketing department

� Production department

� Store department

� Dispatch department

� Human resource department

� Purchase department

� Administration department


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PRODUCTION DEPARTMENT

Among the all the functional area management, production considered to be

crucial in any industrial organization. Production is the process by which, raw materials

and other inputs are converted into finished goods. Efficient production department help

the organization to move according to demand. The factory is the place where production

takes place so the best lay out of the factory must be selected in order to avoid bottle

necks and distribution of production process.

Therefore the production marginal concerned with planning, organizing,

directing , and controlling the production system. So as to produce goods of desired

quality at minimum cost and at the right time. It involves decision making concerned

with production process in order to produce goods or services according to the

specialization of the quality at minimum cost and as per demand schedule.

PRODUCTION MANAGEMENT

Production management refers to the application of management principles to

the application of planning, organizing, directing, and controlling to the production

process. The application to the management to the field of production has been result of

at least three development. First it is the development of factory of production. Until the

emergency of the concept of manufacturing, there was no such thing as management we

know it. It is true that people operated business and did not regard themselves as

managers well. The second essentially stems from the first, namely the development of

the third largest person. Stems from the work of many of the pioneers of scientific

management. Who where able to demonstrate the value from a Performance and profit

Point of view of some of the technique they were developing.

FUNCTIONAL LEVEL OBJECTIVE OF DEPARTMENT ARE

FOLLOWING

• Assuring product as per specification

• Assuring the stock of finished goods as stock level

• Minimizing the wastage of packing material during production


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• Minimizing breakdown time

• Minimizing production loss

• Keep the plant and pemiser clean

FUCTIONING

Production area includes various stages of dispatching largely based on production

capacity of the firm. The company has set as well defined product department under a

plant supervisor. As a food industry the production area must be clean and hygienic as

per HAZRD ANALYSIS OF CRITICAL POINT (HACCP) and ISO requirements. the

operation in the production area is carried out as per the production plan . the plant

supervisors do the allocation of work and he will ensure that the materials will be

allocated to machine for achieving production plan .


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STRUCTURE OF PRODUCTION DEPARTMENT

Board of Directors

Factory Manager

Production Manager

Production Plant Supervisor Technicians

Skilled Workers Unskilled Workers


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PRODUCTION PROCEDURE OR RAIDCO CURRY POWDER

UNIT

DRYING (OPIONAL FOR CORIANDER, CHILLY AND RICE );

Drying is helps to reduce the content of moisture. the drying is carried out in

the sunlight or in the drier at a temrrature about 65-70 degree Celsius

PRE-CLENING (CORIANDER ONLY)

For coriander cleaning is carried out in the pre-cleaner and for rice cleaning is

done manually.

ROASTING (OPTIONAL FOR MASALA AND RICE)

The powder are put into roaster machine and roast it for few minutes .it is the

process of roasting all ingredients up to its characterized smell.

GRINDING:

Grinding is also carried out in grinding mills in two or three stages of powdering.

BLENDING (FOR MASALAS ONLY)

Blending is the process of mixing of different items as per the ratio 30 minutes

using horizontal mixture.

SIEVING

Sift each item with its particular sieves in the sifter.

PACKING:

Finished goods are either packed manually or machine .100g, 250g, 500g are packed

by using FFS MACHINE. Packing of items in polythene \polyester pouches.

WEIGHT CHECKING:

Checking are weight of pouches as per the sampling plan .

PACKING IN HDDLE SACKS

PRODUCTION PLAN

The production department plans monthly production activities. These

production plan based on the report of marketing department. Based on this report the


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production target will be decided and the production target is based on the production

plan. Operator log sheets are prepare or for the verification of the worker will complete.

Their work is according to the target is prepare by production department workers will

submit the log sheet. This will evaluating working performananace .they should maintain

daily shift report, daily production report, weekly production report and monthly

production report.

THE MAIN TYPE OF MATERIAL USED

o Coriander

o Turmeric

o Wheat

o Spices

o Chilly

COMPETITORS ANALYSIS

Now there are very strong competitors in Raidco curry powder market. Many

new competitors are come into the market. The RAIDCO family curry powder has 8.5

market shares in market. But the Raidco products are high quality products. The major

competitors of Raidco curry powder are as eastern Nirapara, Saras, etc. the market survey

revealed that the eastern curry powder is the leading manufacturing of curry powder in

Kerala. They cover more than 50% share in market.

CHIEF COMPETITORS OF RAIDCO

� Eastern curry powder

� Melam curry powder

� Mangala curry powder

� Palat curry powder

� Saras curry powder

� Dinesh curry powder


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� Priyum curry powder

� Rani curry powder

� Amina curry powder

� Mohanlal taste buds

� Nirapara curry powder

COMPETITORS MARKET SHARE

COMPETITORS MARKET SHARE

Eastern curry powder 50%

Melam 12%

Saras curry powder 9%

Rani curry powder 10%

Raidco curry powder 8.5%

Nirapara 8%

Mangala curry powder 7%

Amiina wonder spice 7%

Mohanlal taste buds 5%

Amma curry powder 5%

Shakti masala 5%


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SALES TURN OVER RAIDCO AND MONTHLY COMPETITORS

CURRY POWDER TOTAL SALES TURN OVER (MONTHLY)

Easten curry powder 680

Melam masala 500

Saras curry powder 460

Rani curry powder 400

RAIDCO family curry powder 350

Amina wonder spice 320

Shakti masala 310

Among this market survey reveals that the eastern curry powder leading

manufacturing of curry powder in Kerala. They cover more than 50s% share in the

market. saras cover more than 50% of the production stage but now it is only 9% market

share .

FEATURES / CHARACTERSTICTS OF COMPETITORS IN RAIDCO

1. Competitors are modern equipment, but Raidco still hang over to traditional method

2. Competitors undertakes more advertisement and promotional strategies

3. The competitors products are available the consumer who it is needed

4. More of the competitors are in existence before the establishment of RAIDCO


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5. Competitors occupy large portion of market share , but RAIDCO only 8% of market

share

6. Low cost and high quality

7 . Hygienically made product in modern factory

8. Timely delivery

9. quick responsibility of consumers queries

10. Transparency in business adherence in cooperative ethics

PURCHASE DEPARTMENT

The purchase of required raw materials of right quality is the responsibility of

the purchase department .the department , which is under the control of RAIDCO curry

powder , is purchase officer .purchase department is responsible for all thepurchase

related to the factor which includes raw material, machine parts and new machines .the

purchase system starts from the intend in t ne prescribed format given by the respective

department in order according to their requirement . as per the ISO norms the suppliers

of raw materials should be authorized supplier . the management committee in the

management review meeting gives the authorization . purchase department should be

responsible for the timely supply of all items required in the factory . it should also find

new suppliers, raw materials, peak seasons for each items , comparative study of quality

price and present market scenario

PURCHASE PROCEDURE

All raw materials are classified into two categories A and B

MAJOR ITEMS

MINOR ITEMS

a. MAJOR raw material is chilly, coriander, turmeric, raw rice and wheat. Purchase

order are placed with approved vendors for major items . the list of post suppliers

has been maintained B aged of the annual production in bulk quantity during the

crop season and stored.


- - 36 -

b. MINOR items include spices, pulses, and salt. These items need small quantities

for the production of masalas purchases from local market. This is approved by

factory manager, after quantity wise comparative analysis in lab by quality control

officer.

PLACE OF PURCHASE

Chilly – Karnataka and Andhra Pradesh

Coriander - Rajasthan and Tamilnadu

Turmeric - Salem (Tamil nadu)

Wheat - Punjab

Spices - purchase from local market

MODE OF PAYMENT

Minimum one month credit period is available by RAIDCO curry powder to make

the necessary payment to its supplier

HUMAN RESOURCE DEPARTMENT

Human resource management relatively a new term emerged during 1970s many

people continued to use , traditional titles like personal management to this new

discipline. At present the term is used in this industry including circle as HRM.

A well managed human resource is working under RAIDCO CURRY POWDER.

Here the human resource department known in the name of administration department.

Which is under the control of administrating manager or administrating officer? This

department looks after the welfare of human resource in RAIDCO labor are the only

living factors of production process. They are pillars of organization the quality of

production, the earning and good will of the company depends upon human resource in

the organization. The company treats the labours fairly and considerably and given fare

wages. Personal department under takes, recruitment, selection, training etc.


- - 37 -

NUMBER OF EMPLOYEES

RAIDCO curry powder factory has 53 casual workers and 16 permanent

employees .among 16 permanent staff , 10 members are office staff and 6 are production

staff . 53 casual workers includes 22 gents and 31 ladies

Time office

There is a time office work in the factory. It is maintained in the factory gate. The

time officer and one securities are work in these department. The major function of

these department is maintain and regulate the attendance of workers visitors and vehicle

movements in the factory. The time of entry and exit properly enter in the register. The

time office or time keeper will coming with attendance register for verification. Last date

of every month. It is verified by the administrative officer.

Working time

There is only one shift presently in the factory. The working time shifting1st shift -

9.00 am to 4.30pm

Function of Human Resource Department

1. Recruitment

Recruitment means generating a pool of qualified employees for job. Announcing

job opportunities to public in such a way that number of suitable people will apply for

them. In RAIDCO done only at the initial stage. At that time the placement of employees

is done by haed office, for recruitment .the Company gives advertisement in newspaper

.after that applicant will have written test. According to the mark obtained in the written

test the applicant will have to be call for an interview. Through this interview the

applicants are selected for the company. Recruitment also made from the educational

institution and training institution

The head office situated at Kannur undertakes placement. Recruitment is done

through

Advertisement – written test – interview and selection


- - 38 -

Probation period up to one year

2. Selection

Selection means choosing right profile from that number, those applicant whom

are most likely to succeed in the job. After getting the list of candidates, an interview

conducted at the unit level. Final selection is made after test their skill and technical

ability by putting them on the job.

Training and development

Training and development is also done in the RAIDCO. After recruitment and

selection the new hands are given on the job. Training at the unit level. months to one

year. Later the absorbed as permanent workers considering their performance

3. Promotion :

Promotion is the transfer of an employee to new position which comments high

pay. Privilege status both at work and in the community out side more pay and fringe

benefits perhaps the grater. Jobs security and more senior position from which a person

render better service to his company. His duties, responsibilities status and pay also

increased. Company given keen attention with regard to promotion. In AT1 seniority

based and merit based promotion are there.

is at 4.75 % of total employments (growth)

WAGES AND SALARY;

The salary given to the employee according to the Kerala state co. operative rules .in LD

clerk grade employees are given to pay scale RS.3295/- in probabation period after one

year that will get RS. 80/-additional and 38% DA. Apprentice trainee will given a stipend

RS.1090/-. The wages given to the casual workers according to the factory wages act .the

men RS. 100/-day and women RS .90/-day .the driver will get 125/-day .

BONUS:

The company will given bonus at the rate 8.33% .the rate of bonus will give up to 20% in

the profitable year.


- - 39 -

PROVIDENT FUND:

Provident fund deduction from the salary at the rate of 12%.another deduction from

the salary rat the rate of 12% pension benefit .from this 8.33% will be pension fund.

ALLOWANCES:

Medical allowance of RS.1000/-for employee. The production workers will get

RS.300/-as uniform allowances and RS.20/- washing allowances .

RETIREMENT:

The retirement is in the age of 58yearas. At the time of retirement the employee will be

given PF and pension fund deducted from his salary .

TRANSFER:

Punishment

Request transfer

General transfer

Normally transfer performing in the month of APRIL TO MAY

Leave and Holidays

a ) Privilege leave

All permanent employees are allowed privilege leave at the rate of day for

every twenty day of worth in a year .This leave provides only the workers who worth

minimum 240 day in a year .They ean avail of leave in five times in a year subject to

certain restriction to account the production prospects the factory

b) Causal leave

The allowed to a meet the casual needs. There are 15 casual leaves in a year

Holidays

Total 13 days are allowed for the employees including 4 national holidays

belongs any trade union decide about the holidays

Compliance of Factory Act


- - 40 -

WELFARE TO WORKERS

1. First Aid Appliances

Under the factory Act ,It is strictly instructed that a manufacturing concern should

keep necessary first aid faculties .this is done in case of when the workers are Injured

during the worth .If the injury or accident more serious employee can sent to near ESI

center for further treatment

2. Canteen

A good canteen is available rate to all employees in this canteen provide tea in the

right time at two shift to employees to at free cost

3. Rest room

A rest mean is provided to employees to relax at the concerned time

4. Facilities for Relaxing

The company also provides sitting facility for the workers when they are getting

interval or lunch breach

5. Trade union

The factory is in under co. operative society. There are mainly two trade unions

KCEU- Kerala co. operative employees trade union (CITU)

KCEF –Kerala co. operative employee front (INTUC)

Health

One of the important things is that the employees’ general health, both physical

and mental should be cared. The factors, which influence the general health of the

worker, can be divided into two broad groups.

1) Those which are associated with his working environment.

2) Those which he shares with the rest of the community.


- - 41 -

Disposal of waste and effluents

Effective arrangements shall be made for the disposal of waste and for making

them innocuous. It does not harm any local people in any way.

. Dust and fires

Effective management shall be taken pre view the inhalation and accumulation of dust

and fires or other impurities in parities at work place

Lighting

The state government may prescribe standards of are proper artificial nature lighting

facilities are included

Drinking Water

There shall be effective arrangements for whole some drinking water for workers for

worker at convenient points

Laundries and urinals

There shall be sufficient number of laundries and a urinals clean well ventilated situated

and built according to prescribed standard separately for male and female and workers.

QUALITY CONTROL DEPARTMENT

The quality is the performance of product as per the committed made by the

producer to the consumer. The quality control department is responsible for analyzing the

quality of the products of the products through various tests. The head of the quality

control department is quality control officer

The department tests samples of raw material from the suppliers , raw materials

purchased samples from production area and also random checking finished goods . the

quality control department should draft the specialization for raw materials as per ISO

norms . Raw materials are inspected initially by visual inspection and then by physical

analysis. Granulations as well as chemical analysis are tested and weights of the finished


- - 42 -

pouches are also checked. This test is carried out for each batch in the case of chilly ,

coriander, turmeric, and curry powders.

QUALITY POLICIES AND OBJECTIVES OF RAIDCO

a. RAIDCO deliver products that meet according to the customer taste and

satisfaction. They deliver the best value for money to the customers.

b. RAIDCO continuously invest in their people and technology to deliver quality

products

c. They assuring the products as per specification, maintains and improving the

quality through good manufacturing practices. To stimulate an aggressive quality

consciousness among all company employees.

DISPATCH DEPARTMENT

Dispatch department of the factory is responsible for the dispatch of

finished goods of various dealers. . Stretch across Kerala as per the direction from

marketing department. The dispatch department should deliver the required items at

the previously decided destinations without any delay. They should collect

acknowledgement for the receipt of items in good condition from the dealers. They

should control the companies own vehicle and its staff is constitution with factory

manager. They should also make decision on the preference of goods and also the

way of the vehicle through which it should travel. They also arrange parcel service

for the delivery of the goods.

The department is responsible to keeping packing details, bill details of various

parties. it hold assure the vehicle contain the packing slip, bill copies ,sales tax

declaration for check posts. They should issue gate passes requirement for any

vehicles as the any case. As in any cases the department should contact dealers and

parcel service and report day to day affairs .RAIDCO‘s 90% shares are government

shares. But it is working as co. operative sector. Company is targeting 6 crores in

coming years to recover the present condition.


- - 43 -

STORES DEPARTMENT

Store department releases required item for representative department s

whenever it is demands, always keeping the minimum stock levels for all raw

materials. Store department repots to the purchase department whenever the stock

level reaches to the minimum level . Purchase department transfers the purchase

items to the store.

Production and maintenance department repots their ‘Good Requisition Note ‘to

the store department. After getting this note, the store department issues with, Good

Issue Note. It also releases finished goods to the dispatch department whenever

supply order comes from the dealer . the important function of store department is

checking and cleaning the raw materials coming into their go down on purchase

order . After receiving the materials the store department prepares goods received

note .

ITEMS INCLUDE STORES:

• Raw materials are chilly, turmeric, spices and coriander

• Raw materials

• Consumer stores

• Consumer spares

WAREHOUSE

There are four different warehouses in the factory. They are

• large raw materials

• Temperature and humidity controlled ware houses for minor spices and food

products.

• Two packing materials warehousing located in various areas

• All the warehouses are kept in accordance with food materials storage

standards and HACCP regulation.


- - 44 -

MARKETINGDEPARTMENT

The term marketing means social and managerial process by which

individual and group obtain what they need and want through creating and exchanging

product and value with others. In the words of Philip Kotler “marketing is a societal of

process by which individuals and group obtain what they need and want through creating,

offering and freely exchanging product and services of value with each other”.

RAIDCO family curry powder unit has a good marketing and sales department.

They are doing marketing allover the Kerala in a systematic way and also marketing their

products into gulf countries also . the main duties of the marketing department in an

organisation are to analyse the market , find the opportunities , design the products ,

format marketing strategies , develop scientific method and action purpose a budget and

establish a set of control . Now a days there is a number of alternative products, so that

customer has a number of choices . So the success of product depends upon their

marketing departments and something different from its competitor’s production in terms

of quality, quantity, packing design etc will effect the consumers design. In short modern

marketing begins with the consumer and ends with the consumer’s satisfaction and social

well being. Under the market driven economy consumer is the king.

SCOPE OF MARKETING:

The scope marketing is very wide because marketing performs multi - various

functions. These functions includes warehousing, packing, branding , selling ,

transportation , advertising , public relation , marketing research , product planning etc .

• Understanding customers needs and wants

• Consumers satisfaction

• Study of buyers behaviour

• Product planning and development

• Pricing policy

• Demand strategy


- - 45 -

• Distribution

• Promotion

MARKETING DEPARTMENT OF RAIDCO FAMILY CURRY POWDER

The main responsibilities of the marketing department are to ensure the receipt

of good quality materials to the consumers as and when required. The marketing

department is headed by the marketing manager and sales officer. They have five area

representatives as their subordinates.

RAIDCO is having good marketing channel in northern part of Kerala . The main

aim of the marketing department is to supply good quality products according to the

needs of the customers and at reasonable price. RAIDCO family curry powder has

good marketing and sales department. They are marketing their products in gulf

countries like (Qatar, Oman, Bahrain, and Saudi Arabia) also. Marketing department

is working in RAIDCO in systematic way. RAIDCO covers marketing all over the

Kerala through dealer network Company and has district wise representative under

this; they have Taluk wise distribution.

OBJECTIVES OF MARKETING DEPARTMENT:

The primary objective of RAIDCO is to give maximum satisfaction to the

customers by giving quality products.

a. Creation of goodwill by selling quality products

b. Reducing cost

c. Increasing the consumption of goods

d. Increasing the profit through consumer satisfaction

e. Ensure the growth and development the organization

f. Taste and preference of the consumer


- - 46 -

MARKETING CHANNEL OF RAIDCO FAMILY CURRY POWDER

UNIT

FACTORY

REGIONAL

GODOWN Palakkad

Kottayam

Trivandrum

Malappuram

DIRECT

MARKETING Only in the Kasargod

district

DISTRIBUTORS Kannur

Kasargod

Calicut

DISTRIBUTORS

RETAILERS

CONSUMERS

CONSUMERS


- - 47 -

ORGANISATIONAL CHARTS OF MARKETING DEPARTMENT

Board of Directors

Chairman

Managing Director

Factory Manager

Marketing Department

Marketing Manager

Sales Officer

Sales Representative


- - 48 -

MARKETING PROCESS:

. The process of marketing is the soul of marketing mechanism. Marketing is

concerned with the flow or movement of goods from the point of production to the point

of consumption in this flow goods passes through certain essential flow

There are three main process of marketing:

• Concentration

• Dispersion

• Equalization

Concentration:

Concentration is the process of concentrating raw materials an finished goods at a

central place called market. The concentration function is performed by producers,

wholesalers and their agents.

Dispersion

The concentration is where completed the dispersion starts. It means the distribution

of raw material and finished goods to producers and consumers. Raw materials are

distributed to manufacture and furnished goods to whole salers, retailers, and consumers.

Equalization:

Equalization lies in between concentration and dispersion. It consists of adjustment

of supply demand on the basis of time quality. It means adjustment of supply to demand

through storage and transportation.

MARKETING MIX:

Marketing mix is the combination of various elements . marketing mix is the process

by which set of marketing variable which the firm produces response at once is the target

marketing . the marketing mix are as follows

A. Product mix

B Promotion mix


- - 49 -

C. price mix

D. Place mix

Product mix:

Product mix is the total list of product which offers to its its buyers . it is the

complete list of all products offered for sales by a firm . Product mix is also called

product portfolio or product range.

PRODUCT BRANDING

The product branding is the identification of product one seller or group of seller

differentiates from their competitors. The product branding is mainly using the term sign,

symbol, design or a combination. The products from RAIDCO curry powder are known

and familiar among the costumers under the brand name of “FAMILY”.

Brand ambassador – P.T.USHA

OBJECTIVES OF BRANDING:

Its helps in product identification

It makes the product attractive and popular

It helps in advertising and sales promotion

It develop brand loyalty

PACKING

The importance of packing has increased these days because of severe competition in

the market and rise in the standard of living of the people. Well designed packages can

create convenience and promotional value .in RAIDCO curry powder factory finished

goods are packed either manually or machine. 100gms, 250gms, 500gms, are packed

using FFS machine .1kg, 2kg, are manually filled into 25kgs bags for dispatch. For

special bulk order packing is done 25kgs. For packing Polythene pouches and polyester

pouches are used which are purchased from SIVAKASI. The main objectives of packing

are promotion, safety, identification etc.


- - 50 -

LABELING:

Labeling is the integral part of packing. It gives verbal information of the product. it

serves to identify brand , product type and size , batch number and date of manufacture

and price of the product.

PRICE MIX:

RAIDCO curry powder factory unit follows cost plus pricing which means

cost plus ascertain amount of profit. In this unit pricing policies are related to only a

certain period of time, because necessary changes must be made in the pricing decision

according to the need of time and circumstances such as cost object of the company

marketing mix, demanded, consumption, and economic condition etc . Pricing of the firm

also decides the rate of return and profit of the firm. Advertisement and sales promotion

measures are also affected by pricing decisions. The price of the product is based on the

costs of the products and a change to the price of raw materials affects the price of the

final products. The raw material like chilly, turmeric, etc varies and its affects the market

fluctuations. It means the price of raw materials changes in every day and it affected the

price of the final products.

PLACE MIX (DISTRIBUTION CHANNEL):

The channel of distribution means the set of marketing intermediates through which

the goods flow from the producer to consumer. In short, it is outlet to let out the goods to

final consumer.

Most producers do not sell their goods directly to ultimate users. there may be

intermediaries ,these intermediaries constitute a marketing channel also called trade

channel . There are several channels through which it is possible to have these curry

powder factories products to be marketed.

1. Raidco curry powder unit produces are marketed through dealer network .The

Company has district wise area representatives. Distributors supply the products

to the retailers. The company have five area sales officers located in Kannur,

calicut, Kottayam and Trivandrum . the company has very good marketing

system through its dealer which comes around 14 in members in Kannur and


- - 51 -

Kasarkode district ., clearing and forwarding agents for marketing . The company

adopts DIRECT RETAILER system in Wayanad district on experimental basis.

The sales representative is responsible to submit monthly sales reports to

marketing department. the levels , which exists between the manufacturers and

end users can broadly divided into four :

1. producer -consumer (direct marketing)

2. producer –retailer – consumer (one level channel)

3. producer-distributor-retailer-consumer (two level channel)

4. producer –distributor –wholesaler-retailer – consumer (three level channel)

SELECTION OF CHANNEL:

• Financial capacity

• Previous experience

• Target market ability

• Godown facility

PRAMOTION:

Promotion is the one of the major elements in the marketing mix. Promotion

is a form of communication with an additional element of persuasion to accept ideas,

products and services and hence persuasive communication becomes the heart of

promotion. People must know that products at the right price are available at the right

place. it is said that in competitive market , without promotion nothing can be sold .

The main sales promotion activity adopted by the RAIDCO FAMILY CURRY

POWDER unit is advertising .covering Medias like magazines; railway stations plat

form, wall paint banners, stickers etc.


- - 52 -

Sales promotion method includes complimentary items to dealers .dealers may give

cash discount up to 4% to 10% for ready payments. The company is also adopts

another attractive schemes in festival seasons.

OBJECTIVES OF PRAMOTION BY RAIDCO

To communicate

To convince

To motivate

To differentiate

To stabilize sales

ADMINISTRATION DEPARTMENT:

The responsible of administration department is mainly to keep the records of

attendance of staff and workers .it also includes records of various levels taken by the

employee and management staff, calculation of the salaries, provident fund, bonus o f

employees and record of their entry into service, issue of memos, service rules related

matters

TAX PAYMENT:

The administration department will be liable to pay tax in OCTOBER and professional

tax in every six months to concern authority. The department is also responsible for the

renewal in factory license in OCTOBER. the administration department is responsible to

submit half year return report and annual report to factory inspector office ,KANNUR.

Other major responsibility of the administration department is dealing with letter. the

administration department keeps record of letter inward register and letter outward of

dispatch register

FINANCE DEPARTMENT:

Finance department maintain a systematic record and control income anf\d

expenditure of the factory. Account officer is the head of this department followed by


- - 53 -

financial account department and he is assisted by an assistant account. All financial

decision are taken by the finance department

SOURCES OF FINANCE:

• Share capital

• Deposit from dealer

• Deposit from staff

• NCDC loan

• State government loan

• Cash credit

ACCOUNTING POLICIES:

1. fixed assets are valued at cost of acquisition ,less depreciation

2. depreciation and fixed assets are calculated and provided on straight line method

(10%depreciation is charging )

3. investment are valued at cost

4. valuation of inventories of finished goods is at cost

ACCOUNTING PROCEDURE:

RAIDCO curry powder factory follows double entry system in accounting records

day to day transaction of cash receipt and payment voucher. The accounting department

will make necessary entry in cash book , bank book , or journal accounting to the nature

of transaction, personnel registers of distributors suppliers and staffs ,general ledger, sales

register, purchase register ,register of all assets are prepared by the accounting

departments .

Their jobs including recording of all the payments given to suppliers and payment

received from the dealers .this includes the payment for all the purchase related to the

factory and distribution of salaries,wages to its staffs monthly receipt and distribution

statement and balance sheet should be defeated consultation which head officers and

submit them to the finance manager of RAIDCO .


- - 54 -

After preparing receipt and distribution statement the company will prepare

manufacturing accounts to know the cost of goods manufactured . The items in

manufacturing accounts are raw materials ,purchase, direct expense, direct wages,

opening and closing of raw material

Accounting department is also responsible for the function of day to day works of the

factory .they should also keep detailed individual report for different suppliers

,dealers and personnel .separate accounting heads are been maintained for different

categories of finance .it keep bill related to responsible files for later references .it

should also report present financial status of the company to higher authorities and

calculated cost required for different product. And report to its concern. Debtors

earned outstanding in payment cash if any should be reported the earliest. They

should also conduct concern parties for the same .

It should also give monthly sales statement to the finance department of

RAIDCO.day to day affairs in finance matter export to the factory and also to the

finance department given by the factory manager


- - 55 -

CHAPTER-3

RESEARCH METHODOLOGY


- - 56 -

METHODOLOGY

Research Methodology is the systematic way of solving the research problem. It

may be understood as a science of studying how research is done scientifically. So while

we discussing about the research methodology we discuss not only the research methods

but also we consider the logic behind the method that we used in the context of our

research study and explanation why we are not using other so that research results are

being capable of evaluating the researcher himself or by others.

Source of data:

Primary Data:

The information relating to the companies functions, its operations etc are collected

by direct observation and by interviewing concerned personnel.

Secondary Data:

The data related to the financial statements are the essential elements of this

study. These financial data are collected from the financial records of the firm like Profit

and Loss account and Balance sheet.

Tools used:

Data analysis tools:

� Ratio Analysis: Current ratio or working capital ratio:

It is the ratio of the current assets to current liabilities. It shows a firms’ ability to

cover its current liabilities with its current assets. Generally 2:1 is considered ideal for a

concern.

Current Assets

Current ratio= -----------------------


- - 57 -

Current Liabilities

Liquid or Quick ratio:

This is the ratio of the liquid assets to current (liquid) liabilities. It shows a firms’

ability to meet current liabilities with its most liquid (quick) assets. 1:1 ratio is considered

ideal ratio for a concern. Liquid assets include cash balances, bill receivable, sundry

debtors and short term investment. Liquid liabilities include all items of current liabilities

except bank overdraft. It is calculated as under:

Liquid Assets

Liquid ratio=------------------------

Current liabilities

Absolute Liquidity ratio:

Though receivables are generally more liquid than inventories, there may be

debts having doubt regarding their real stability in time. So to get idea about the absolute

liquidity of a concern, both receivables and inventories are excluded from current assets

and only absolute liquid assets, such as cash in hand, cash at bank and readily realizable

securities are taken into consideration. The desirable norm for this ratio is 1:2. it is

calculated as follows:

Cash in hand and at bank+ short term marketable securities

Absolute Liquidity ratio=------------------------------------------------------------------------

Current Liabilities

Ratio to Inventory to Working capital:

In order to ascertain that there is no over stocking, the ratio of inventory to

working capital should be calculated. Working capital is the excess of current assets over

current liabilities. Increase in volume of sales requires increase in size of inventory, but

from a sound financial point of view, inventory should not exceed amount of working

capital. The desirable ratio is 1:1. It is worked out as follows:


- - 58 -

Inventory

Ratio to Inventory to Working capital=---------------------

Working capital

Fixed Assets ratio:

This ratio explains whether the firm has raised adequate long term funds to meet its

fixed assets requirements. This ratio gives an idea as to what part of the capital employed

has been used in purchasing the fixed assets for the concern. If the ratio is less than one it

is good for the concern. The ideal ratio is .67. It is calculated as under:

Fixed Assets

Fixed Assets ratio=------------------------

Capital employed

. Ratio of Current Assets to Fixed Assets:

This is the ratio of the Current Assets to Fixed Assets. This ratio is worked out as:

Current Assets

Ratio of Current Assets to Fixed Assets=------------------------

Fixed Assets

Debt Equity ratio

It measures the extent of the equity covering the debt. This ratio is calculated to

measure the relative proportions of outsiders’ funds and shareholders’ funds invested in

the company. This ratio is determined to ascertain the soundness of the long term

financial policies of the company and is also known as external- internal equity ratio. It is

calculated as follows:

Long Term Debts

Debt Equity ratio=-------------------------------

Shareholders’ Funds


- - 59 -

. Proprietary ratio:

A variant of debt to equity ratio is the proprietary ratio which shows the

relationship between shareholders’ fund and total tangible assets. This ratio should be

1:3. it is worked out as follows:

Shareholders’ Funds

Proprietary ratio=-----------------------------

Total Tangible Assets

Net Profit ratio:

This ratio explains per rupee profit generating capacity of sales. If the cost of

sales is lower, then the net profit will be higher and then divide it with the net sales, the

result is sales efficiency. If lower is the net profit per rupee of sales, lower will be sales

efficiency. This is very useful to the proprietors and prospective investors because it

reveals the over all profitability of the concern. It is calculated as follows:

Net Profit after Tax

Net Profit ratio=-----------------------------

Net sales

Return on Shareholders Funds:

The ratio of net profit to shareholder fund shows the extent to which profitability

objective is being achieved. .When this desired to work out the profitability of the

company from the shareholders point of view, then this ratio is calculated by the

following formula:

Net Profit after Interest and Taxes

Return on Shareholders Funds=--------------------------------------------

Shareholders’ Fund


- - 60 -

. Capital Turnover ratio:

This ratio shows the efficiency of the of capital employed in the business by

computing how many times capital employed is turned-over in a stated period. The

higher the ratio, the greater are the profit. A low capital turnover ratio should be taken to

mean that sufficient sales are not being made and profits are lower.

Sales

Capital Turnover ratio=--------------------------

Capital Employed

. Fixed Assets Turnover ratio:

This ratio measures the efficiency of the assets use. The efficient use of assets will

generate greater sales per rupee invested in all the assets of a concern. The inefficient use

of the asset will result in low sales volume coupled with higher overhead charges and

under utilization of the available capacity. Hence the management must strive for using

total resources at optimum level, to achieve higher ROI. It is calculated as under:

Sales

Fixed Assets Turnover ratio=-----------------------------

Net Fixed Assets

Working Capital Turnover ratio:

This ratio shows the number of times working capital is turned over in a stated

period. The higher is the ratio, the lower is the investment in working capital and greater

are the profits. It is calculated as follows:

Sales

Working Capital Turnover ratio= --------------------------------

Net Working Capital


- - 61 -

Total Assets Turnover ratio:

This ratio is calculated by dividing the net sales by the value of total assets. An

higher ratio is an indicator of over trading of total assets while a low ratio reveals idle

capacity

Net Sales

Total Assets Turnover ratio=----------------------

Total Assets

. Inventory turnover ratio:

This ratio measures the number of times, on average; the inventory is sold during

the period. Its purpose is to measure the liquidity of the inventory. This ratio is calculated

as follows:

Cost of goods sold

Inventory turnover ratio=---------------------------

Average inventory

. Receivable Turnover ratio:

This ratio measures the number of times, on average; receivables are collected

during the period. The higher the value of ratio, the more is the efficient management of

debtors. It is calculated as follows:

Net Credit Sales

Receivable Turnover ratio=-----------------------------

Average Receivables

Creditors Turnover ratio:

A short-term liquidity measure used to quantify the rate at which a company pays

off its suppliers. Accounts payable turnover ratio is calculated by taking the total

purchases made from suppliers and dividing it by the average accounts payable amount


- - 62 -

during the same period.

Solvency ratio:

This ratio expresses the relationship between total assets and total liabilities of a

business. It measures the solvency of the business. It is calculated as follows:

Total Assets

Solvency ratio=-----------------------

Total Debts

Cash ratio:

This is the ratio of a company's total cash and cash equivalents to its current

liabilities. The cash ratio is most commonly used as a measure of company liquidity. It

can therefore determine if, and how quickly, the company can repay its short-term debt.

A strong cash ratio is useful to creditors when deciding how much debt, if any, they

would be willing to extend to the asking party.

Cash and cash equivalents

Cash ratio=-------------------------------------

current liabilities

Cash Turnover ratio:

This ratio indicates a firm's efficiency in its use of cash for generation of sales

revenue. It is the inverse of cash-to-sales ratio.

Sales

Cash Turnover ratio=------------------------------


- - 63 -

Average Cash Balances

Cash to Working Capital Ratio:

Cash To Working Capital Ratio is useful for determining the proportion of

working capital that is made up of cash or investments that can be readily converted into

cash. If the ratio is low, it may be an indication that a company will have trouble meeting

its short-term commitments because of a lack of cash. If this were the case, the next

formula to calculate would be the number of expense coverage days to determine exactly

how many days of operations can be covered by existing cash levels.

Cash + short term marketable securities

Cash to Working capital ratio=-------------------------------------------------

Net Working Capital

. Average Collection Period:

It indicates on an average for how many days sales are pending uncollected by the

concern. This also reflects the credit policy and terms of the concern.

Days in a year

Average Collection Period=-------------------------------------

Debtor Turnover ratio

. Average payment period:

The average payment period (APP) is defined as the number of days a company

takes to pay off credit purchases. It is calculated as accounts payable / (total annual

purchases / 360). As the average payment period increases, cash should increase as well,

but working capital remains the same. Most companies try to decrease the average

payment period to keep their larger suppliers happy and possibly take advantage of trade

discounts.

Days in a year

Average payment period=---------------------------------

Creditors Turnover ratio


- - 64 -

� Comparative Statement

� Common Size statement

� Schedule of changes in Working Capital

Data Processing Tools:

� Tables

� Bar charts


- - 65 -

CHAPTER-4

ANALYSIS AND INTREPRETATION


- - 66 -

CURRENT RATIO

CURRENT RATIO FROM THE YEAR 2005-2009

YEAR CURRENT ASSETS CURRENT LIABILITY RATIO

2005 16044478 9197848 1.744373

2006 11000342 14673592 0.749669

2007 17920383 18617992 0.96253

2008 20221795 16286604 1.241621

2009 22377147 11066114 2.022132

CURRENT RATIO

0

0.5

1

1.5

2

2.5

2005 2006 2007 2008 2009

YEAR

RA

TIO

RATIO

INTERPRETATION:

The above table shows the current ratio of the firm during the period (2005-2009)

of the study has been increasing. In the year 2005 the ratio was 1.71 and increasing at the

rate 2.022 in the year 2009.It shows the rate in the year 2009 above the standard norm

2:1.Therefore the current ratio of the firm indicates ability to meet its short term debts.


- - 67 -

LIQUID ASSET RATIO

LIQUID ASSET RATIO(2005-2009)

YEAR LIQUID ASSETS CURRENT LIABILITY RATIO

2005 5790241 9197848 0.629521

2006 6929493 14673592 0.472242

2007 9789943 18617992 0.525832

2008 12072775 16286604 0.74127

2009 15459717 11066114 1.397032

LIQUID RATIO

0

0.5

1

1.5

2005 2006 2007 2008 2009

YEAR

RA

TIO

RATIO

INTERPREATION

Liquid ratio of the firm during the period (2005-2009) shows a fluctuating trend.

During the period 2005 to 2008 it was below the standard norm 1:1.But in the year 2009

shows an increasing trend. It shows that the firm’s ability to meet its short term obligation

out of its liquid assets.


- - 68 -

ABSOLUTELIQUID RATIO

ABSOLUTELIQUID RATIO FROM THE YEAR 2005-2009

YEAR ABSOLUTE LIQUID ASSET RATIO CURRENT LIABILITY RATIO

2005 66546 9197848 0.007235

2006 52548 14673592 0.003581

2007 388305 18617992 0.020856

2008 388985 16286604 0.023884

2009 230152 11066114 0.020798

ABSOLUTE LIQUID RATIO

0

0.005

0.01

0.015

0.02

0.025

0.03

2005 2006 2007 2008 2009

YEAR

RA

TIO

RATIO

INTERPREATION The absolute liquid ratio of the firm during the period (2005-2009) are below the standard

norm 1:2 .This ratios show that the absolute liquid assets of the firm is very less. The firm

may not have enough cash/bank balance or marketable securities.


- - 69 -

SOLVENCY RATIO

SOLVENCY RATIO FROM THE TEAR 2005-2009

YEAR TOTAL ASSETS TOTAL DEBT RATIO

2005 92,265,728 70718706 1.304686

2006 96,743,566 77099704 1.254785

2007 111,233,769 87475497 1.271599

2008 119,535,896 98504792 1.213503

2009 133,448,746 117638132 1.1344

SOLVENCY RATIO

1

1.05

1.1

1.15

1.2

1.25

1.3

1.35

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTREPRETATION:

A solvency ratio is used to test the solvency of the firm. Solvency means the

ability to meet the outside liabilities out of total assets. Thus this ratio establishes the

relationship between total assets and outside liabilities. Above table indicate the total

assets are more than the total debt .thus, during the period 2005-2009 shows the solvency

ratio of the firm is satisfactory.


- - 70 -

DEBT EQUITY RATIO

DEBT EQUITY RATIO FROM THE YEAR 2005-2009

YEAR DEBT FUND EQUITY RATIO

2005 70718706 12349174 5.726594

2006 77099704 4970270 15.51218

2007 87475497 5140280 17.01765

2008 98504792 4744500 20.76189

2009 117638132 4744500 24.79463

DEBT EQUITY RATIO

0

5

10

15

20

25

30

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTERPREATION Debt equity ratio shows an increasing trend during the period (2005-2009).The year 2005

that 5.7shows almost satisfactory ratio that is near to standard ratio. During the period of

study is above standard. Hence the company is not financially sound during these

periods. And this firm is use more debt fund in these years.


- - 71 -

PROPREITORY RATIO

PROPREITORY RATIO FROM THE YEAR 2005-2009

YEAR SHAREHOLDERS FUND TOTAL ASSETS RATIO

2005 12349174 92,265,728 0.133844

2006 4970270 96,743,566 0.051376

2007 5140280 111,233,769 0.046212

2008 4744500 119,535,896 0.039691

2009 4744500 133,448,746 0.035553

PROPRIETARY RATIO

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTERPREATION

The above table shows that proprietary ratio of the firm during the year 2005 to 2009 is

not a satisfactory level. In during these years proprietary ratio is below 1. So the long

term solvency position of the firm is not satisfactory in these periods.


- - 72 -

CURRENT ASSETS TO FIXED ASSET RATIO

CURRENT ASSETS TO FIXED ASSET RATIO (2005-2009)

YEAR CURRENT ASSETS FIXED ASSETS RATIO

2005 16044478 16387709 0.979056

2006 11000342 14519759 0.757612

2007 17920383 15121341 1.185105

2008 20221795 17543366 1.152675

2009 22377147 17606912 1.27093

CURRENT ASSET TO FIXED RATIO

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTERPREATION

Current assets to fixed assets ratio of the firm during the period of study are

fluctuating. In 2007 and 2008 there is an increase in current assets over fixed assets, so

the current asset is idle in these years.


- - 73 -

FIXED ASSET RATIO

FIXED ASSET RATIO (2005-2009)

YEAR FIXED ASSETS CAPITAL EMPLOYED RATIO

2005 16387709 83,067,880 0.197281

2006 14519759 82,069,974 0.176919

2007 15121341 92,615,777 0.16327

2008 17543366 103,249,292 0.169913

2009 17606912 122,382,632 0.143868

FIXED ASSET RATIO

0

0.05

0.1

0.15

0.2

0.25

2005 2006 2007 2008 2009

YEAR

RA

TIO

RATIO

INTERPREATION

The above table shows that the ratio of the firm is below normal ratio 1:1.The

fixed assets used in firm are not in a good position. But it shows a decreasing trend. In

2005 it is 0.19but in 2009 it decreased to 0.14.This trend is a negative trend for company.


- - 74 -

FIXED ASSET TURN OVER RATIO

FIXED ASSET TURN OVER RATIO (2005-2009)

YEAR SALES AFTER (S/R) FIXED ASSETS RATIO

2005 91,728,364 16387709 5.597388

2006 20,441,236 14519759 1.407822

2007 34,787,928 15121341 2.300585

2008 58,790,047 17543366 3.351127

2009 110,371,284 17606912 6.268634

FIXED ASSET TURN OVER RATIO

0

1

2

3

4

5

6

7

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTERPREATION

The firm fixed assets turnover ratio during the period of study is above standard

norms. So it indicates that the company hast much efficiency in utilizing its fixed assets

in placing sales.


- - 75 -

WORKING CAPITAL TURN OVER RATIO

WORKING CAPITAL TURN OVER RATIO (2005-2009)

YEAR SALES WORKING CAPITAL RATIO

2005 91,728,364 6846630 13.39759

2006 20,441,236 -3673250 -5.56489

2007 34,787,928 -697609 -49.8674

2008 58,790,047 3935191 14.93957

2009 110,371,284 11311033 9.757843

WORKING CAPITAL TURN OVER RATIO

-60

-50

-40

-30

-20

-10

0

10

20

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTERPREATION

The firm fixed assets turnover ratio during the period2005 was13.39 above the

standard norm. But in the year 2006-2007 (-5.56to-49.86) study is below standard norms.

But it was increasing above the standard norm in the year 2008-2009.So it indicates that

the company has much efficiency in utilizing its fixed assets in placing sales.


- - 76 -

CAPITAL TURN OVER RATIO

CAPITAL TURN OVER RATIO (2005-2009)

YEAR SALES CAPITAL EMPLOYED RATIO

2005 91,728,364 83,067,880 1.104258

2006 20,441,236 82,069,974 0.249071

2007 34,787,928 92,615,777 0.375616

2008 58,790,047 103,249,292 0.569399

2009 110,371,284 122,382,632 0.901854

CAPITAL TURN OVERRATIO

0

0.2

0.4

0.6

0.8

1

1.2

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTERPREATION

The capital turn over ratio was less than one in during the period of study. This ratio

indicates the effectiveness with which the firm utilized its resources or capital employed.

Hence the capital employed was not fully utilized by the firms for earning revenue for

these periods.


- - 77 -

DEBTORS TURN OVER RATIO

DEBTORS TURN OVER RATIO (2005-2009)

YEAR SALES AVG.DEBTORS RATIO

2005 91,728,364 9162167.5 10.01164

2006 20,441,236 11577764 1.76556

2007 34,787,928 15243533 2.282143

2008 58,790,047 19298572.5 3.046342

2009 110,371,284 15229565 7.247172

DEBTORS TURN OVER RATIO

0

2

4

6

8

10

12

2005 2006 2007 2008 2009

YEAR

RA

TIO

S

RATIO

INTERPREATION

The above table shows that the firm’s debt collection period during the year 2005 and

2009 are satisfactory level. But in the year 2006, is below 2 times. But 2009 rate (7.24)

indicates efficient debt collection policy during this period.


- - 78 -

NET PROFIT RATIO

NET PROFIT RATIO(2005-2009)

YEAR NET PROFIT SALES RATIO

2005 -10408999 91,728,364 -11.3476

2006 -11663183 20,441,236 -57.0571

2007 -1040074 34,787,928 -2.98976

2008 -4483443 58,790,047 -7.62619

2009 -1040074 110,371,284 -0.94234

NET PROFIT RATIO

-60

-50

-40

-30

-20

-10

0

2005 2006 2007 2008 2009

YEAR

RA

TIO

RATIO

INTERPRETARION:

Net profit ratio indicates managing the elements efficiency in manufacturing,

administering and selling the product. This is measure of overall profitability. It the ratio

indicates the firms capacity to withstand adverse economic condition. High net ratio

indicates higher overall efficiency of the business, but utilization of limited resources and

reasonable return to owners’ .but the above table shows that the ratio is in negative trend.

This indicates low efficiency and inadequate return to owners


- - 79 -

COMPARATIVE BALANCE SHEET OF RAIDCO FAMILY CURRY POWDER ON 2005AND 2006

particulars 2005 2006

amount of increase or decrease

percentage of increase or decrease

Fixed Assets 16,387,709 14519759 -1,867,950 -11.39848163

investments 163,200 1638231 1,475,031 903.8180147

Current Assets 16,044,478 11000342 -5,044,136 -31.43845502

Less: current Liabilities 9,197,848 14673592 5,475,744 59.53288204

Working Capital 6,846,630 -3,673,250 -10,519,880 -153.6504821

CAPITAL EMPLOYED 23,397,539 12,484,740 -10,912,799 -46.64079842

Less: Loan Fund 70,718,706 77099704 6,380,998 9.023069511

Add: Profit and loss account 59,670,341 69585234 9,914,893 16.61611587

SHARE HOLDERS FUND 12,349,174 4,970,270 -7,378,904 -59.75220691

Represented by;

share Holders Fund 4,400,000 4,400,000 0 0

Reserve & surplus 7,949,174 570270 -7,378,904 -92.82604708

TOTAL 12,349,174 4,970,270 -7,378,904 -59.75220691


- - 80 -

COMPARITIVE BALANCESHEET OF RAIDCO FAMILY CURRY POWDER ON 2006AND 2007




Fixed Assets 14519759 15121341 601,582 4.14319549

investments 1638231 1665025 26,794 1.635544682

Current Assets 11000342 17920383 6,920,041 62.90750778

Less: current Liabilities 14673592 18617992 3,944,400 26.88094367

Working Capital -3,673,250 -697,609 2,975,641 -81.00839856

CAPITAL EMPLOYED 12,484,740 16,088,757 3,604,017 28.86737729

Less: Loan Fund 77099704 87475497 10,375,793 13.45763014

Add: Profit and loss account 69585234 76527020 6,941,786 9.975946909

SHARE HOLDERS FUND 4,970,270 5,140,280 170,010 3.420538522

Represented by;


Reserve & surplus 570270 740280 170,010 29.81219422

TOTAL 4,970,270 5,140,280 170,010 3.420538522


- - 81 -





Fixed Assets 15121341 17543366 2,422,025 16.01726328

investments 1665025 105240 -1,559,785 -93.67937418

Current Assets 17920383 20221795 2,301,412 12.84242641

Less: current Liabilities 18617992 16286604 -2,331,388 -12.52223118

Working Capital -697,609 3,935,191 4,632,800 -664.0969368


Less: Loan Fund 87475497 98504792 11,029,295 12.60843937


SHARE HOLDERS FUND 5,140,280 4,744,500 -395,780 -7.699580568

Represented by;


Reserve & surplus 740280 344500 -395,780 -53.46355433

TOTAL 5,140,280 4,744,500 -395,780 -7.699580568


- - 82 -





Fixed Assets 17543366 17606912 63,546 0.362222392

investments 105240 10563273 10,458,033 9937.31756

Current Assets 20221795 22377147 2,155,352 10.65855924

Less: current Liabilities 16286604 11066114 -5,220,490 -32.0538892

Working Capital 3,935,191 11,311,033 7,375,842 187.4328845


Less: Loan Fund 98504792 117638132 19,133,340 19.4237657


SHARE HOLDERS FUND 4,744,500 4,744,500 0 0

Represented by;


Reserve & surplus 344500 344500 0 0

TOTAL 4,744,500 4,744,500 0 0


- - 83 -

COMMON SIZE BALANCESHEET OF RAIDCO FAMILY CURRY POWDER ON 2005AND 2006

particulars amount percentage of total amount

percentage of total

sources of fund

shareholders fund 4,400,000 4.76883464 4,400,000 4.54810607

reseves and surplus 7,949,174 8.6155219 570270 0.58946556

total shareholders fund 12,349,174 13.3843565 4,970,270 5.13757163

loan fund 70,718,706 76.6467761 77099704 79.6949164

current liability 9,197,848 9.96886731 14673592 15.167512

total liability 92,265,728 100 96,743,566 100

application 0f fund

fixed assets 16,387,709 17.761426 14519759 15.0085009

investment 163,200 0.17688041 1638231 1.69337463

cuurrentassets 16,044,478 17.3894233 11000342 11.3706187

profit and loss account 59,670,341 64.6722703 69585234 71.9275058

total assets 92,265,728 100 96743566 100


- - 84 -


particulars amount percentage of total amount

percentage of total

sources of fund


reseves and surplus 570270 0.58946556 740280 0.66551732


loan fund 77099704 79.6949164 87475497 78.6411337

current liability 14673592 15.167512 18617992 16.7377157

total liability 96,743,566 100 111,233,769 100

application 0f fund

fixed assets 14519759 15.0085009 15121341 13.5942

investment 1638231 1.69337463 1665025 1.49687007

cuurrentassets 11000342 11.3706187 17920383 16.1105599

profit and loss account 69585234 71.9275058 76527020 68.79837

total assets 96743566 100 111233769 100


- - 85 -


amount percentage of total amount

percentage of total

sources of fund


reseves and surplus 740280 1 344500 0.28819795


loan fund 87475497 79 98504792 82.4060348


total liability 111,233,769 100 119,535,896 100

application 0f fund

fixed assets 15121341 13.5942 17543366 14.6762325

investment 1665025 1.49687007 105240 0.0880405

cuurrentassets 17920383 16.1105599 20221795 16.9169226


total assets 111233769 100 119535896 100


- - 86 -


amount percentage of total amount

percentage of total

sources of fund


reseves and surplus 344500 0.28819795 344500 0.25815155


loan fund 98504792 82.4060348 117638132 88.1522948


total liability 119,535,896 100 133,448,746 100

application 0f fund

fixed assets 17543366 14.6762325 17606912 13.1937635

investment 105240 0.0880405 10563273 7.91560304

cuurrentassets 20221795 16.9169226 22377147 16.7683457


total assets 119535896 100 133448746 100


- - 87 -

TREND ANALYSIS

TREND ANALYSIS OF RAIDCO FAMILY CURRY POWDER FROM THE YEAR 2005-2009

CURRENT ASSETS CURRENT LIABILITY

WORKING CAPITAL

YEAR AMOUNT

%OF TREND AMOUNT

% OF TREND AMOUNT

%OF TREND

2005 1604447

8 100 9197848 100 6846630 100

2006 1100034

2 68.561545 14673592 159.532882 -3673250

-53.650482

1

2007 1792038

3 111.69190

4 18617992 202.416826

2 -697609

-10.189085

7

2008 2022179

5 126.03585

5 16286604 177.069723

3 3935191 57.476320

5

2009 2237714

7 139.46946

1 11066114 120.311990

4 11311033 165.20584

6

TREND ANALYSIS OF RAIDCO FAMILY CURRY POWDER FROM THE YEAR 2005-2009

SALES PURCHASE NET PROFIT

YEAR AMOUNT %OF TREND AMOUNT % OF TREND AMOUNT %OF TREND

2005 91,728,364 100 648,399 100 -10408999 100

2006 20,441,236 22.2845313 278,567 42.96228094 -11663183 112.049036

2007 34,787,928 37.9249411 698,308 107.6972667 -1040074 9.99206552

2008 58,790,047 64.0914592 800,087 123.3942372 -4483443 43.0727585

2009 110,371,284 120.324052 1,847,814 284.9810071 -1040074 9.99206552


- - 88 -

CHAPTER 5

FINDINGS, SUGGESTIONS AND

CONCLUSION


- - 89 -

FINDINGS

� The current ratio of the firm indicates ability to meet its short term

debts.

� The firm’s ability to meet its short term obligation out of its liquid

assets.

� The solvency ratio of the firm is satisfactory.

� The company maintains adequate debt funds.

� Company has the efficiency in utilizing its fixed assets.

� Company indicates efficient debt collection policy during the period

2008-2009

� Price fluctuation of raw material is effecting the production

� 80% of cost of production is use to buy raw material

� The capital employed was not fully utilized by the firms for earning

revenue

� The net profit ratio of the company indicates low efficiency and

inadequate return to owners.

� Finally, the over all profitability of the firm is not satisfactory.


- - 90 -

SUGGESTION:

� Company can collect more equity funds rather than debt funds.

� To maintain the long term solvency position.

� To maintain the resources or capital employed effectively.

� High net profit ratio is only indicates efficiency of business and

adequate return to owners.

� To maintain the records and transaction properly.

� Proper training given to the workers.

� Adequate supply of foods product and distribution network is

necessary.

� Use modern technology for production and distribution

� Proper sale promotion technique use to the supply of the product

� The employees must be given information how to do their work in an

effective manner

� The employees should be allowed to participate in the decision making

process

� Company can appoint very efficient agency to supply the product


- - 91 -

CONCLUSION

The RAIDCO family curry powder Limited is a leading organization dealing in curry

powder since 1998. The performance of the factory through out the operational period

has not been at all satisfactory. The factory faced losses for the last few years, because of

high cost, negative working capital, less liquidity of money. In order to avoid these

problems, proper management is essential. And also management of cash, working

capital is essential.


- - 92 -

BIBLIOGRAPHY

“Cost and Management Accounting”, P.K.JAIN & K.L.NARANG

“Management Accounting”, ARORA

“Cost and Management Accounting”, A. VINOD

Annual Report of the Andaman Timber Indusries.

project report fina shabija14[1]inoverin · primary competitive it ensures clean and hygiene price...

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