A STUDY ON INVENTORY MANAGEMENT IN SUNGWOO GESTAMP HITECH PVT LIMITED- CHENNAI

PROJECT REPORT Submitted by

M. ELAKKIYA Reg. No: 108001619012

In partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

IN DEPARTMENT OF MANAGEMENT STUDIES

VIVEKANANDHA COLLEGE OF ENGINEERING FOR WOMEN

TIRUCHENGODE-637205 JUNE-2012

VIVEKANADHA COLLEGE OF ENGINEERING FOR WOMEN

(Affiliated to Anna University of Technology, Coimbatore) Elayampalayam, Tiruchengode DEPARTMENT OF MBA
PROJECT WORK JUNE -2012

This is to certify that the project entitled

A STUDY ON INVENTORY MANAGEMENT IN SUNGWOO GESTAMP HITECH PVT LIMITED-CHENNAI

Is the bonafide record of project work done by

M. ELAKKIYA Register No. 108001619012 Of M.B.A during the year 2010-2012. -------------------------------------------------------------

Project Guide Department

Submitted for the project Viva-Voce examination held on

Head of the

__________________

-----------------------------------Internal Examiner

----------------------------External Examiner

DECLARATION

I affirm that the project work title A Study on inventory management in sungwoo gestamp hitech pvt limited chennai. Being submitted in partial fulfillment for the award of MBA is the original work carried out by me. It has not formed the part of any other project work submitted for award of any degree, either in this or any other university.

(Signature of the candidate) ELAKKKIYA.M Reg.No: 108001619012 I certify that the declaration made above by the candidate is true

Signature of the Guide,

Mrs.E.DEEPA, Assist Prof, MBA., M.Phil.,

ACKNOWLEDGEMENT

I express my sincere thanks and gratitude to Vidhya Rathna RashtriaRatta, Hind Rattan, Pen KalviSathanaiyalar Prof. Dr. M. Karunanidhi, B.Pharm., M.S., Ph.D., D.Lit., Chairman & Secretary, Vivekanandha Educational Institutions, for his support in all our endevours. I extent my heartfelt thanks to the principal, Dr. R. K. Gnanmoorthy, ME., Ph.D., for the constant support given in all our activities. I wish to express my sincere thanks to Dr. M. Latha Natarajan, MBA., Ph.D., Head of the Department of Business Management for the help and kind support rendered by her. I express my profound thanks to Mrs.E.Deepa Assist Prof, MBA., M.Phil., Departement of management studies, Faculty guide for the encouragement, supervision and guidance throughout the project. I also thank Mr.sathish kumar, project guide, Sungwoo gestamp hitech pvt limited,Chennai for granting me permission to undergo this project in their organization. I would like to express my sincere thanks for my parents and friends for their unbounded support to make this project a reality. I also express my heartfelt thanks to all the respondents who have provided information required for the study.

CONTENTS

Chapter No

Title
ABSTRACT LIST OF TABLES LIST OF CHARTS

Page No
I Ii Iii

I
1.1 About the study

INTRODUCTION

1.2 About the Industry 1.3 About the company

5

II

MAIN THEME OF THE PROJECT 2.1 Objectives of the Study 2.2 Scope of the Study 2.3 Limitations of the Study 2.4 Review of Literature 2.5 Research Methodology 2.6 Data Analysis And Interpretation
10 11 12 13 15 17

III

FINDINGS, SUGGESTIONS AND CONCLUSION 3.1 Findings 3.2 Suggestions 3.3 Conclusion
58 59 60 61

IV

SCOPE WORK FOR FUTURE

4.1. Appendix
4.2.Bibliography

63

ABSTRACT

The project report is the result of A STUDY ON INVENTORY MANAGEMENT IN SUNGWOO GESTAMP HI-TECH (CHENNAI) PVT LIMITED. Inventory management is the process of determining the significant management of stock. The research has to use facts for information already viably and analyze these to make a critical evaluation of the material. The study is based on the secondary data provided by the company. The desired information has been derived from the inventory section. Inventory in a wider sense is defined as any idle resource of an enterprise. However it is commonly used to indicate materials raw, in process, finished. Packing, spares and othersstocked in order to meet an expected demand or distribution in future even though inventory of materials is an idle resource in the sense it is not meant for the most immediate use, it is almost a necessity to maintain some inventories for the smooth functioning of an organization inventories are a sort the supply-production-distribution system that protects it for excessive friction. The period which is taken for the study, is five year. The objective of the company is to find out how the company is managing their stock in an efficient manner. The range of tools used in this project is ABC analysis, ratio analysis, trend analysis, correlation and linear regression analysis. The finding that reveal that the store is managed properly with modern business like SAP.

LIST OF TABLES TABLE NO RATIOS: 2.6.1.1 2.6.1.2 2.6.1.3 2.6.1.4 2.6.1.5 2.6.1.6 2.6.1.7 Current ratio Quick ratio Net working capital ratio Total debt ratio Proprietary ratio Current assets turnover ratio Total assets turnover ratio STATISTICAL ANALYSIS 2.6.2.1 Correlation between inventories & current liabilities 2.6.2.2 Correlation between inventories & fixed deposits 2.6.2.3 Correlation between inventories & loan & advance 2.6.2.4 Correlation between inventories & sundry debtors 2.6.2.5 Correlation between inventories & reserves TREND ANALYSIS 2.6.3.1 2.6.3.2 Trend analysis of future years for total assets Trend analysis of future years for inventories LINEAR REGRESSION ANALYSIS 2.6.4.1 Linear regression analysis for expected value ABC ANALYSIS 2.6.5.1 2.6.5.2 2.6.5.3 2.6.5.4 2.6.5.5 ABC analysis for the year 2007 ABC analysis for the year 2008 ABC analysis for the year 2009 ABC analysis for the year 2010 ABC analysis for the year 2011 56 58 60 62 64 54 48 51 47 46 45 44 43 29 31 33 35 37 39 41 TITLE PAGE NO

LIST OF CHART

CHART NO 2.6.1.1 2.6.1.2 2.6.1.3 2.6.1.4 2.6.1.5 2.6.1.6 2.6.1.7 2.6.3.1 CURRENT RATIO QUICK RATIO

TITLE

PAGE NO 30 32 34 36 38 40 42 50

NET WORKING CAPITAL RATIO TOTAL DEBT RATIO PROPRIETARY RATIO CURRENT ASSETS TURNOVER RATIO TOTAL ASSETS TURNOVER RATIO TREND ANALYSIS FOR FUTURE YEARS TOTAL ASSETS

2.6.3.2

TREND ANALYSIS FOR FUTURE YEARS INVENTORIES

53

2.6.5.1 2.6.5.2 2.6.5.3 2.6.5.4 2.6.5.5

ABC ANALYSIS FOR THE YEAR 2007 ABC ANALYSIS FOR THE YEAR 2008 ABC ANALYSIS FOR THE YEAR 2009 ABC ANALYSIS FOR THE YEAR 2010 ABC ANALYSIS FOR THE YEAR 2011

57 59 61 63 65

CHAPTER 1 INTRODUCTION

INDUSTRY INTRODUCTION AUTO COMPONENTS INDUSTRY IN INDIA: The Indian auto component industry is expected to reach a turnover worth US$ 113 billion by 2020-21 from US$ 43.4 billion in 2011-12, according to Automotive Component Manufactures' Association (ACMA) report titled, 'Auto Component Industry in India: Growing Capabilities & Strengths'. The exports from the industry are expected to grow at a compound annual growth rate (CAGR) of 17 per cent during 2012-21, the ACMA report highlighted. The small and medium enterprise (SME) dominated automotive sector is among the top three sectors attracting heavy online traffic on the site, IndiaMART.com, in terms of the number of buyers who visited from other countries, both developed and developing, as per a report by IndiaMART.com. In addition, among the Indian suppliers registered on IndiaMART.com, the auto component sector features in the top five categories, contributing 11.8 per cent to the whole segment. Product categories such as pumps and pumping equipments took the top position with 8.1 per cent buy leads posted, followed by products such as nuts and bolts, and lights and accessories in second and third position, respectively. "India is a growing market for us and we are pleased to partner with Uno Minda to bring best practices to Indian original equipment manufacturers (OEMs) and to explore and expand the markets within Asia," as per Mr S M Park, President, AMS. Market Structure The tyre production in India is anticipated to reach 191 million units by the end of 2015-16, according to RNCOS research report titled, 'Indian Tyre Industry Forecast to 2015'. Moreover, manufacturers are expected to invest huge amount into the industry over the next few years, with a major proportion of this investment directed towards the radial tyre capacity expansion.

In an analysis of medium to heavy-duty Hybrid and Electric Commercial Vehicle Market in China and India, Frost and Sullivan estimated that the component revenues from India will reach US$ 212 million by 2020, which would account for 11 per cent of the global component market. The vision of Automotive Mission Plan (AMP 2006-16) aims India to emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$ 145 billion accounting for more than 10 per cent of the gross domestic product (GDP) and to provide additional employment to 25 million people by 2016. India: The Global Auto Hub The amount of cumulative foreign direct investment (FDI) inflow into the automobile industry during April 2000 to November 2012 was worth US$ 7,518 million, amounting to 4 per cent of the total FDI inflows (in terms of US$), as per data published by Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce. The Indian automobile and auto components industry can be expected to surpass China's growth path by 2021, according to a research report by Espirito Santo Securities. Supportive government policies, positive business environment, availability of reasonably priced talented workforce and stable outlook for the industry has made India a global hub for the international manufacturers to set up their facilities in the country. The auto components manufacturers are also reaping the benefits.

Auto components manufacturer, Uno Minda of N K Minda Group and AMS Corporation of Korea are entering into a technical licence agreement for design, manufacture and sale of automotive lamps in India

SKF has signed contracts with Audi for the delivery of SKF components. The contracts, estimated at about SEK 1 billion (US$ 150.73 billion), include the delivery of four different versions of wheel bearing units for the wheel ends and a range of bearings for the new double clutch transmission

Sungwoo Gestamp Hitech ( Chennai ) Limited., (SGH) is a Joint Venture between :

SUNGWOO Hi-Tech Co.Ltd,south korea (51%).

GESTAMP automotive

span,(49%).

Gestamp Group : GESTAMP is a Technology and Engineering company. GESTAMP, through its joint ventures with global partners undertakes designing and development of components and systems, to address the needs of Indian Automobile customers as also to meet the needs of global partners and customers. Sungwoo Hi-tech: Established in 1977 in Korea, it is a leading supplier of Stampings and Assemblies for automobile manufacturers of Korea. Sungwoo Hi-tech also designs and manufactures Tools, D Sungwoo Hi-tech: -3. SGH General Status 1) Type of Firm : J/V (SW (50%)+G/tamp(50%) ) 2) Established : July. 1997 3) Address : Tamilnadu. Chennai Ground (sqm) 60,000 4) Investment TOTAL 2,430 Building 290 M/ C 1,350 D/M 790 Remarks Building (sqm) 37,582 Indian Staff 6 165 Worker 1,600

Korean

5) Sales
Discrip Sales 08 Year 4,700 09 Year 4,510 10 Year 4320 Remarks

SGH MILESTONE AND CERTIFICATION:

COMPANY VISION: To become a global solution provider of metal parts to automobile customers. This will be achieved by : Manufacture of quality sheet metal parts (Stampings and Assemblies). Design & Manufacture of technically superior tools and dies

1.3 MODEL SANTRO (EMXI) ACCENT (LCI) VERNA (MCI) GETZ (TBF) i10 (PA) i20 (PB) FLUIDIC VERNA (RBI) EON (HA) PRODUCT PROFILE SUB ASSEMBLIES SUPPLIED 38 35 35 18 32 4

MAIN PRODUCT

MAIN PRODUCTIONS

FACTORY & LINE STATUS

LINE PRODUCT DISPLAY AREA

DEPARTMENT WISE PERFOMANCE DISPLAY

SHOPPING ENTRANCE AREA

WIELD SHOP GANGWAY

SHIFT TIMING SHIFT General shift A Shift B Shift C Shift IN 08.00 am 08.00am 04.30pm 01.00am OUT 06.00pm 04.30pm 01.00am 08.00am

STAFF, WORKMEN & TRAINEES S. no 1 2 3 4 5 6 7 8 Particulars Staff Workmen Diploma apprentices Act. Apprentices Company Trainee On the job trainee Flexi. Contract Contract labour TOTAL PRODUCTION STATUS: No.of.person 161 284 200 140 95 300 190 550 1920

Model Production Item E/MXI TBI LCI MCI PA PB TOTAL

14

13

23

20

12

86

CAPACITY: (IN THOUSANDS)

Description

08 Year

09 Year

10 Year

Capacity

550

600

600

QUALITY STATUS:

Active (09 Year)

Target (10 Year)

30 PPM

20 PPM

DIE MAINTANENCE SHOP: High Pressure Die washing; Die Maintenance is equipped with hot and cold water high pressure jet Die washing machine. Protects the die from unwanted impurities sticking on to the dies. Improved panel quality. As per P.M. schedule the dies are washed periodically.

STORES Die Maintenance is equipped with separate stores to cater its needs. Optimum stock level and inventory control is totally computerized. Direct import of Die Maintenance Spare

DIE MAINTANENCE SHOP:

Kihueng KMB U7 Universal Milling Machine DRO controlled Working table Max Perm Load Long travel Cross travel No. of speeds 2700 x 750 4 tons 2000 mm 1000 mm 18

Radial Drilling BR 624 Batliboi Heavy Duty :60 mm Electro Hydraulic Camping: In solid steel Working Table : 1570 x 980 Maximum Spindle Stroke: 400 mm Spindle Speed : 50 1600 rpm

Sungwoo Offers: World Class Facility for sheet metal stampings and assemblies with Korean knowhow Proven track record with Hyundai Motors India and others A company with values driven by the TATA group Participation in new programmes for sheet metal assemblies Engineering and programme management skills and experience Strategic partnership with dedicated capacities

S ales US D Million
70.00 60.00 50.00 40.00 30.00 20.00 10.00 S ales US D Million

99

00

01

02

03

04

05

06

19

20

20

20

20

20

20

20

20

07

1.4 ABOUT THE TOPIC Inventory management is the active control program which allows the management of sales, purchases and payments. Inventory management software helps create invoices, purchase orders, receiving lists, payment receipts and can print bar coded labels. An inventory management software system configured to your warehouse, retail or product line will help to create revenue for your company. The Inventory Management will control operating costs and provide better understanding. We are your source for inventory management information, inventory management software and tools. A complete Inventory Management Control system contains the following components:

Inventory Management Definition Inventory Management Terms Inventory Management Purposes Definition and Objectives for Inventory Management Organizational Hierarchy of Inventory Management Inventory Management Planning Inventory Management Controls for Inventory Determining Inventory Management Stock Levels

Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory. This process usually involves controlling the transfer in of units in order to prevent the inventory from becoming too high, or dwindling to levels that could put the operation of the company into jeopardy. Competent inventory management also seeks to control the costs associated with the inventory, both from the perspective of the total value of the goods included and the tax burden generated by the cumulative value of the inventory. Inventory management is not limited to documenting the delivery of raw materials and the movement of those materials into operational process. The movement of those materials as they go through the various stages of the operation is also important.

Typically known as a goods or work in progress inventory, tracking materials as they are used to create finished goods also helps to identify the need to adjust ordering amounts before the raw materials inventory gets dangerously low or is inflated to an unfavorable level. Finally, inventory management has to do with keeping accurate records of finished goods that are ready for shipment. This often means posting the production of newly completed goods to the inventory totals as well as subtracting the most recent shipments of finished goods to buyers. When the company has a return policy in place, there is usually a subcategory contained in the finished goods inventory to account for any returned goods that are reclassified as refurbished or second grade quality. Accurately maintaining figures on the finished goods inventory makes it possible to quickly convey information to sales personnel as to what is available and ready for shipment at any given time. Inventory Managment must tie together the following objectives ,to ensure that there is continuity between functions : Companys Strategic Goals Sales Forecasting Sales & Operations Planning Production & Materials Requirement Planning. Inventory is defined as the blocked Working Capital of an organization in the form of materials. As this is the blocked Working Capital of organization, ideally it should be zero. But we are maintaining Inventory. This Inventory is maintained to take care of fluctuations in demand and lead time. In some cases it is maintained to take care of increasing price tendency of commodities or rebate in bulk buying.

1.5 REVIEW OF LITERATURE Brent D. Williams, (Department of Marketing and Logistics, Sam M. Walton College of Business, University of Arkansas, Fayetteville, Arkansas, USA), (2008) "A review of inventory management research in major logistics journals: Themes and future directions", International Journal of Logistics Management, The, Volume. 19 Iss: 2, page number.212 232. Keyword: Inventory management, Research, Supply chain management. Emerald Group Publishing Limited, The purpose of this paper is to provide a review of inventory management articles published in major logistics outlets, identify themes from the literature and provide future direction for inventory management research to be published in logistics journals. Travis Tokar, (The Ohio State University, Fisher College of Business, Marketing and Logistics, Columbus, Ohio, USA).A review of inventory management research in major logistics journals: Themes and future directions. The Volume. 19, page.212 232. First, logistics researchers have focused considerable attention on integrating traditional logistics decisions, such as transportation and warehousing, with inventory management decisions, using traditional inventory control models. Second, logistics researchers have more recently focused on examining inventory management through collaborative models. Vollman, berry and whybark (1997) noted that a key management issue is determining the inventory control system performance while addressing the utility of manufacturing inventory systems. They also indicated that in manufacturing industry performance is measured by such factors as inventory carrying costs and inventory turnover. Geoff relph and gail bradbear (2003) stated about on the measure of inventory in terms of annual usage and average inventory. As the part of analysis the inventory turnover ratio and ABC (Stock classification) are used for planning and controlling the inventory and basic steps for managing the inventory are discussed in order to achieve the objectives of cost control. Mr. wolfe bagby explain inventory as managing inventory to meet profit goals, shortening the cash cycle, avoiding inventory shortage, avoid excessive carrying costs for unused inventory, improving, improving profitability by decreasing cash conversion.

1.6 NEED FOR THE STUDY The question of managing inventory arises only when the company holds inventory. Maintaining inventories involves tying up of the companys fund and incurrence of storage and handling cost. It is expensive to maintain inventories In the context of inventory management the firm is faced with the problem of Meeting two conflicting needs To maintain a large size of inventories of raw material and work in progress for efficient and smooth production and of finished goods for uninterrupted sales operation. To maintain a minimum investment in inventories to maximize profitability

1.7 SCOPE OF THE STUDY The main aim of inventory management is better understanding of firms position and performance. The financial analysis refers to the process of determining financial strength and weakness of the firm by establishing strategic relationship the terms of the balance sheet and profit and loss account. The financial statement provides the basis data for financial analysis of ratio analysis. This study helps the management to know about the real reasons of profit or loss and the suggestion given will be useful for the management for the future growth of the origination.

To give plan to the company what to order, when to order and how much to order. It is useful for deciding operating policy & volume of inventory. It helps to develop the policies for the executives in inventory. It helps the company what items goods are categorized.

CHAPTER 2 RESEARCH OBJECTIVES

PRIMARY OBJECTIVES:

To analysis the financial performance on Sungwoo Gestamp hi-tech (Chennai) pvt limited.

SECONDARY OBJECTIVES:

To analysis the investment made in inventories.

To measure the ABC analysis of the Sungwoo Gestamp Hi-tech (Chennai) Pvt. Limited.

To identify the stock level for various components.

To examine the impact of stock out situation with the user department.

To study the supply of raw materials for the purpose of production.

To make the suggestion and recommendation on the basis of the study to improve the inventory management of the company.

CHAPTER 3 RESEARCH METHODOLOGY MEANING Research is an academic activity and such the term should be used in a technical sense According to Clifford woody research comprises defining and redefining problems. Formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions; and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. RESEARCH DESIGN A research design is the arrangement of conditions for collection analysis of data in a manner that aims to combine relevance to research purpose with economy in procedure. It constitutes the blueprint for the collection, measurement and analysis of data. This research study is mainly based on analytical in nature 3.2 ANALYTICAL RESEARCH The research design carried out is analytical research design. This research will mainly deal on facts or information already available, and analyze them to make a critical evaluation of the material and finding a solution to the problem. It makes use of the data that is already available and analyses these to evaluate and make discoveries. Analytical research takes information that has been gathered and looks at what it shows such as trends. The analytical research is mainly done based on the secondary data which is already in the balance sheet of Sungwoo. 3.3 SOURCES OF DATA The data is collected from the available source like ANNUALREPORT of the company including the BALANCESHEET/ and company website (www.sgh.co.in.)

3.4 METHOD OF DATA COLLECTION The research is confirmed to the information available based on the secondary data only.

SECONDARY DATA The data is collected from the available source like ANNUALREPORT of the company including the BALANCESHEET/ and company website (www.sgh.co.in.)

STATISTICAL TOOL TO BE USED: RATIO ANALYSIS CORRELATION TREND ANALYSIS ABC ANALYSIS LINEAR REGRESSION ANALYSIS

CHAPTER 4 LIMITATIONS OF THE STUDY

The report is based only on the financial statement published by Sungwoo Gestamp Hi-tech (Chennai) Pvt limited.

The report is specified to SGH and is not to the automobile company as a whole.

The differentiation of certain concept is not possible

CHAPTER 5 DATA ANALYSIS AND INTREPRETATION 2.6.1 RATIO ANALYSIS: Ratio analysis is widely used tool of financial analysis. Ratios are expressed in mathematical terms between figures which are connected manner. It is defined as the systematic use of ratios to interpret the financial statements so that the strengths and weaknesses of a firm as well as its historical performance and current financial condition can be determined. This relationship can be expressed as Percentages, Fractions and proportion of numbers. MEANING OF RATIOS: Ratios are relationship expressed in mathematical terms between figures, which are connected with each other in some manner. Obviously, no purpose will be served by comparing two sets of figures, which are not at all connected with each other. Moreover, absolute figures are also unfit for comparison. The following ratios are calculated: 1. Current ratio 2. Quick ratio / Liquid ratio 3. Net working capital ratio 4. Total debt ratio 5. Proprietary ratio 6. Current assets turnover ratio 7. Total assets turnover ratio relationships

with each in some

2.6.2 STATISTICAL ANALYSIS

CORRELATION Karl Pearsons coefficient of correlation is the most widely used method of measuring the degree of relationship between two variables. Karl Pearsons coefficient of correlation formula comes below XY (X) 2 ( Y) 2 The correlation analysis studies the joint variation of two or more variables for determining the amount of correlation between two or more variables. Karl Pearsons coefficient of correlation ( or simple correlation) is the most widely used method of measuring the degree of relationship between two variables. This coefficient assumes the following. That there is linear relationship between two variables. That the variables are casually related which means that one of the variables is independent and the other one is dependent; and A large number of independent causes are operating in both variables so as to produce a normal distribution. Karl Pearsons coefficient of correlation is also known as the product moment correlation. The value of r lies between +1. Positive values of r indicate positive correlation between the two variables (i.e., changes in both variables take place in the statement direction), whereas negative values of r indicates negative correlation i.e., changes in the two variables taking place in the opposite directions. A zero value of r indicates that there is no association between the two variables. When r = (+) 1, it indicates perfect positive correlation and when it is (-)1, it indicates perfect negative correlation, meaning thereby that variations in independent variable (X) explain 100% of the variations in the dependent (Y). We can also say that for a unit change in independent variable, if there happens to be a constant change in the dependent variable in the same direction, then correlation will be termed as perfect positive. But if such change occurs in the opposite direction, the correlation will be termed as perfect negative. The value of r nearer to +1 to -1 indicates high degree of correlation between the two variables.

2.6.3 TREND ANALYSIS

trend analysis determines the direction upwards or downloads and involves the computation of the percentage relationship that each statement item bears to the same item in the base year. Return values alone a linear trend and fits a straight line and predicts the future values. The line of the trend analysis equation is Y= a + b x Where A = y ----------N Where B = y ______ X2

2.6.4 LINEAR REGRESSION ANALYSIS METHOD

Regression means dependence and involves estimating the values of a dependent variable Y, from independent variables X. Y=a+bx

Where

ybx;

Sxy n xy B = _____________ Sx2 nx2

2.6.5 ABC ANALYSIS Selective inventory control indicates that there are variations in the method of inventory for different items and this difference should be on a selective basis. ABC analysis is an effective inventory control system should classify inventories according to their value so that the most valuable items may be paid greater attention regarding their safety and care as compared to others. Hence it is desirable to classify the production and supply items, both

purchased and manufactured, depending upon their importance, ABC analysis is also known as Always Better Control CONTROL POLICY FOR A CLASS ITEMS: Since these items account for 70% of the value, they should be ordered more frequently to reduce the capital locked up at a time in inventories. There should be many A items for which the consumption varies considerably from time to time during the year. For such, items the expected future consumption should be estimated in advance and that should be procured on a planned basis. So that the required qualities arrive a little before they are required for consumption. Of course, small extra stock could be carried throughout to meet any eventualities. Annual or 6 monthly contracts with scheduled deliveries are welcome for A items. Since these items are to be stocked as less as possible purchasing department should make maximum efforts to expedite the delivery of these items. CONTROL POLICY FOR B CLASS ITEMS: Order quantities, recorder points and safety stocks should be fixed for B items and revisions once a year is adequate. Annual or 6 monthly contracts with scheduled deliveries can be used to advantage for B items. Stock and issues record are necessary to be maintained. These items should be frequency. CONTROL POLICY FOR C CLASS ITEMS: Liberal quantities can be kept in stock since in case if C items it does not involve much capital tie-up. Annual or 6 monthly orders should be placed to reduce paper work in the purchasing department and also to take advantage of quantity discount for bulk purchases. For ordering C items a combination of review period system and two-bin system is suggested.

CURRENT RATIO Current ratio is a widely used indicator of companys ability to pay its debts in the short-term. It is the relationships between current assets and current liabilities. Current assets are those assets which can be easily converted into cash within a short period of time or within an operating cycle generally one year. Current liabilities are those which are payable within a short period of time generally one year. Current assets Current ratio = ___________________ Current liabilities TABLE NO: 2.6.1.1 Table showing the current ratio for the year 2007-2011 YEAR CURRENT ASSET 2007 2008 2009 2010 2011 Source: secondary data 1681.75 1644.30 2374.91 2849.22 3573.64 CURRENT LIABILITIES 1865.97 2196.49 2207.29 3002.68 3505.26 CURRENT RATIO 0.90127 0.74860 1.07887 0.94889 1.01950

INTERPRETATION The above table shows that the current ratios of SGH gradually increase and decreased during period of 2007-2011. For the next years the current ratio of SGH was decreased. So it is inferred that after 2007,the current ratio of SGH has been decreased.

CHART NO: 2.6.1.1 CURRENT RATIO 2007-2011

1.2

0.8

0.6 1.07887 0.90127 0.4 0.7486 0.94889 1.0195

0.2

0 2007 2008 2009 2010 2011

QUICK RATIO (OR) ACID TEST RATIO This ratio is also termed as Acid Test Ratios and Liquidity Ratio. This ratio is ascertained by comparing the liquid assets to current liabilities. Prepaid expenses and stock are not taken as quick assets. Bank overdraft is not taken as quick liability. Quick Ratio = Current Assets inventories Current Liabilities TABLE NO: 2.6.1.2 Table showing the quick ratio for the year 2007-2011 YEAR QUICK ASSET 2007 2008 2009 2010 2011 Source: secondary data INTERPRETATION From the above table shows that quick ratio of SGH 0.3276 in 2007. In 2008, 0.1913 of quick ratio of has been decreased. In 2009, the quick or acid test ratio has been increased. In 2010, the quick ratio 0.4032 has been decreased. In 2011, the quick ratio 0.3893 has been decreased. The quick ratio of the SGH has been decreased 611.43 420.39 1044.9 1210.9 1364.7 CURRENT LIABILITIES 1865.97 2196.49 2207.29 3002.68 3505.26 QUICK RATIO 0.3276 0.1913 0.4733 0.4032 0.3893

CHART NO: 2.6.1.2 Chart showing the Quick ratio 2007-2011

0.5 0.4733 0.45 0.4 0.35 0.3 0.25 0.1913 0.2 0.15 0.1 0.05 0 2007 2008 2009 2010 2011 0.3276 0.4032 0.3893

QUICK RATIO

NET WORKING CAPITAL RATIO Net Working Capital = Net Working Capital Net Assets TABLE NO: 2.6.1.3 Table showing the Net working capital ratio 2007-2011 YEAR NET WORKING CAPITAL 1894.58 2148.98 3473.89 3656.30 3962.96 NET ASSET NET WORKING CAPITAL RATIO 3.2965 9.8730 4.8227 4.9666 10.850

2007 2008 2009 2010 2011 Source: secondary data INTERPRETATION

574.72 217.66 720.32 736.17 365.22

From the above table shows that net working capital of SGH 3.2965 IN 2007. In 2008, 9.8730 of net working capital has been increased. In 2009, 4.8227 the net working capital has been decreased. In 2010, 4.9666 the net working capital has been increased. In 2011, 10.850 the net working capital has been increased. The net working capital ratio of the SGH has been increased.

CHART NO: 2.6.1.3 CHART SHOWING THE NET WORKING CAPITAL RATIO 2007-2011

NET WORKING CAPITAL RATIO

2007 10% 2011 32%

2008 29%

2010 15%

2009 14%

TOTAL DEBT RATIO The total debt-equity ratio is establish a relationship between the long-term funds raised from outsiders and total long-term funds available in the business. It is calculated as; Total debt Total debt ratio = _______________ Total assets TABLE NO: 2.6.1.4 Table showing the total debt ratio for the year 2007-2011 YEAR 2007 2008 2009 2010 2011 Source: secondary data INTERPRETATION The above table shows that the total debt ratio was decreased during the period of 2007,and 2008. After 2009 the total assets ratio has been increased for every year (2010, 2011). The total debt ratio of the SGH has been increased. TOTAL DEBT 640.4 887.5 1961.98 2280.45 2658.19 TOTAL ASSETS 2534.97 3036.48 5435.87 5936.76 6621.14 TOTAL DEBT RATIO 0.2526 0.2922 0.3609 0.3841 0.4014

CHART NO: 2.6.1.4 Chart showing the total debt ratio 2007-2010

TOTAL DEBT RATIO

0.4014 2011

2010

0.3841

2009

0.3609

2008

0.2922

2007 0 0.05 0.1 0.15 0.2 0.25

0.2526 0.3 0.35 0.4 0.45

PROPRIETARY RATIO
Proprietary ratio shows the relationship between shareholders fund to total assets of the concern. The shareholders funds are equity share capital, preference share capital, undistributed profits reserves and surpluses. If it is calculated as; Share holders equity Proprietary ratio = _____________________ Total assets TABLE NO: 2.6.1.5 The table showing the proprietary ratio for the year 2007-2011 YEAR SHARE HOLDERS EQUITY 2007 2008 2009 2010 2011 Source: secondary data INTERPRETATION The above table shows that the proprietary ratio has been increased in the year of 2007 and 2008. For the next year 2009 has been decreased. In 2011 has been very poor performance in the every year of proprietary ratio. The proprietary ratio of the SGH has been much decreased. 132.39 133.03 133.03 133.03 133.03 2534.97 3036.48 5435.87 5936.76 6621.14 TOTAL ASSETS PROPRIETARY RATIO 0.0522 0.0438 0.0244 0.0224 0.0200

CHART NO: 2.6.1.5 Chart showing the proprietary ratio 2007-2011

PROPRIETARY RATIO

2011 12% 2010 14%

2007 32%

2009 15% 2008 27%

CURRENT ASSETS TURNOVER RATIO:

The current assets turnover ratio is a relationship between the sales and current assets. It is calculated as; Sales Current assets turnover = _______________________ Current assets TABLE NO: 2.6.1.6 The table showing the current assets turnover ratio for the year 2007-2011 YEAR SALES CURRENT ASSETS CURRENT ASSETS TURNOVER RATIO 2007 2008 2009 2010 2011 7358.88 7972.52 6168.99 7436.18 11407.15 1681.75 1644.30 2374.91 2849.22 3573.64 4.3757 4.8485 2.5975 2.6099 3.1920

Source: secondary data INTERPRETATION The above table shows that the current assets turnover ratio has been increased in the year of 2007 and 2008. For the next year 2009 and 2010 has been decreased. In 2011 has been increased in the every year of current assets turnover ratio. The current assets turnover ratio of the SGH has been much increased.

CHART NO: 2.6.1.6 Chart showing the current assets turnover ratio 2007-2011

Current Assets Turnover Ratio

2011 18%

2007 25%

2010 15%

2009 15%

2008 27%

TOTAL ASSETS TURNOVER RATIO:

The total asset turnover ratio is refers to the relationship between the sales and total assets. If it is calculated as; Sales Total assets turnover = ________________________ Total assets

TABLE NO: 2.6.1.7 Chart showing the total assets turnover ratio 2007-2011 YEAR 2007 2008 2009 2010 2011 SALES 7358.88 7972.52 6168.99 7436.18 11407.15 TOTAL ASSETS 574.72 217.66 720.32 736.17 365.22 TOTAL ASSETS TURNOVER RATIO 12.80 36.62 8.56 10.10 31.23

Source: secondary data

INTERPRETATION: The above table shows that the total assets turnover ratio was increased during the period of 2007 and and 2008. After 2009 the total assets ratio has been decreased, And increased the total assets turnover ratio for every year (2010, 2011). The total assets turnover ratio of the SGH has been increased.

CHART NO: 2.6.1.7 CHART SHOWING THE TOTAL ASSETS TURNOVER RATIO 2007-2011

Total Assets Turnover Ratio

2008 23% 2009 10% Other 9% 2010 9%

2007 58%

CORRELATION BETWEEN INVENTORIES AND CURRENT LIABILITIES

The following table below shows the relationship between inventories and current liabilities. It is used as a measure to determine how much of the company is related inventories to current liabilities. For a good position the company inventories and Cost level should be good. TABLE NO: 2.6.2.1 Correlation between inventories & current liabilities Current YEAR 2007 2008 2009 2010 2011 Inventory X 1070.32 1223.91 1330.01 1638.24 2208.90 liabilities Y 1865.97 2196.49 2207.29 3002.68 3505.26 XY 19971.8 26883 29357.1 49191.1 77427.6
XY=2028.3

(X)2 11455.8 14979.5 17689.2 26838.3 48792.3

(X)2=1197.5

(Y)2 34818.4 48245.6 48721.2 90160.8 122868.4

(Y)2=3448.1

Source: Secondary Data r= XY (X) 2 ( Y) 2 r= 2028.3 (1197.5)2(3448.1)2

r= 0.998

The above table depicts that the correlation between total inventories and

current liabilities is high i.e., r = 0.998. Therefore r is said to be positive (+ve correlation is good for the company).

CORRELATION BETWEEN INVENTORIES AND FIXED DEPOSITS

The following table below shows the relationship between inventories and fixed deposits It is used as a measure to determine how much of the company is related inventories to current liabilities. For a good position the company inventories and fixed deposits should be good. TABLE NO: 2.6.2.2 Correlation between Inventories & Fixed deposits YEAR 2007 2008 2009 2010 2011 Inventory X 1070.32 1223.91 1330.01 1638.24 2208.90 Fixed deposits Y 346.39 406.82 115 330.01 0 XY 3707.48 4979.11 1529.51 5406.35 0
XY=15622.4

(X)2 11455.8 14979.5 17689.2 26838.3 48792.3

(X)2=1197.5

(Y)2 1199.8 1655.0 13225 1089.0 0

(Y)2=17168.8

Source: Comparative Balance Sheet and Annual Cost Report r= XY (X) 2 ( Y) 2 r= 15622.4 (1197.5)2(17168.8)2

r= 0.718 The above table depicts that the correlation between total inventories and fixed deposits is high i.e., r = 0.718. Therefore r is said to be positive (positive correlation is the good for the company(SGH)).

CORRELATION BETWEEN INVENTORIES AND LOANS & ADVANCES

The following table below shows the relationship between inventories and loans & advance It is used as a measure to determine how much of the company is related inventories to loans & advance. For a good position the company inventories and loans & advance should be good. TABLE NO: 2.6.2.3 Correlation between Inventories & Loans & Advance YEAR 2007 2008 2009 2010 2011 Inventory (X) 1070.32 1223.91 1330.01 1638.24 2208.90 Loans & advance (Y) 2544.92 2759.38 3195.69 4107.54 4360.81 XY 27238.7 33772.3 42502.9 67291.3 96325.9
XY=2671.3

(X)2 11455.8 14979.5 17689.2 26838.3 48792.3

(X)2=1197.5

(Y)2 64766.1 76141.7 102124.3 168718.8 190166.6

(Y)2= 6019.1

Source: Secondary Data r= XY (X) 2 ( Y) 2 r= 2671.3 (1197.5)2(6019.1)2

r= 0.037 The above table depicts that the correlation between total inventories and loans & advance is high i.e., r = 0.037. Therefore r is said to be positive (positive correlation is the good for the company).

CORRELATION BETWEEN INVENTORIES AND SUNDRY DEBTORS

The following table below shows the relationship between inventories and sundry debtors. It is used as a measure to determine how much of the company is related inventories to sundry debtors. For a good position the company inventories and sundry debtors should be good. TABLE NO: 2.6.2.4 Correlation between Inventories & Sundry Debtors YEAR 2007 2008 2009 Inventory (X) 1070.32 1223.91 1330.01 Sundry debtors (Y) 522.88 375.84 957.97 XY 5596.4 4599.9 12741.0 (X)2 11455.8 14979.5 17689.2 (Y)2 2734.0 1412.5 9177.0

2010 2011

1638.24 2208.90

1022.06 1185.21

16743.7 26180.1
XY=658.61

26838.3 48792.3
(X)2=1197.5

10446.0 14047.2
(Y)2= 378.16

Source: Secondary Data

r=

XY (X) 2 ( Y) 2

r=

658.61 (1197.5)2(378.16)2

r= 0.9787 The above table depicts that the correlation between total inventories and sundry debtors is high i.e., r = 0.9787. Therefore r is said to be positive (positive correlation is the good for the company).

CORRELATION BETWEEN INVENTORIES AND RESERVES

The following table below shows the relationship between inventories and reserves. It is used as a measure to determine how much of the company is related inventories to reserves. For a good position the company inventories and reserves should be good.

TABLE NO: 2.6.2.5 Correlation between Inventories & Reserves YEAR 2007 2008 2009 2010 2011 Inventory (X) 1070.32 1223.91 1330.01 1638.24 2208.90 Reserves (Y) 1739.23 1993.57 1976.00 2190.10 2523.65 XY 18615.3 24399.5 26280.9 35879.0 55744.9
XY=1609.1

(X)2 11455.8 14979.5 17689.2 26838.3 48792.3

(X)2=1197.5

(Y)2 30249.2 39743.2 39045.7 47965.3 63688.0

(Y)2=2206.9

Source: Secondary Data r= XY (X) 2 ( Y) 2 r= 1609.1 (1197.5)2(2206.9)2

r= 0.9898 The above table depicts that the correlation between total inventories and reserves is high i.e., r = 0.9898. Therefore r is said to be positive (positive correlation is the good for the company).

TABLE NO: 2.6.3.1 TABLE SHOWING THE TREND ANALYSIS OF TOTAL ASSETS FOR FUTURE YEARS YEAR 2007 2008 2009 2010 2011 TOTAL TOTAL ASSETS 2534.97 3036.48 5435.87 5936.76 6621.14 23565.22 -2 -1 0 1 2 0 4 1 0 1 4 10 -5069.94 -3036.48 0 5936.76 13242.2 11072.54 (X) (x2) XY

Source: Secondary Data The line of equation of trend analysis is Y= a + b x In the year of 2012 is = 4713.04 + 1104.2 (3) = 8025.64 In the year of 2013 is = 4713.04 + 1104.2 (4) = 9129.84

= 11338.24

In the year of 2014 is = 4713.04 + 1104.2 (5) = 10234.04 In the year of 2015 is = 4713.04 + 1104.2 (6)

In the year of 2016 is = 4713.04 + 1104.2 (7) = 12442.44

INTER PRETATION: It is clear from the above table that the trend analysis is calculated for cost of Sungwoo gestamp hi- tech (chennai) pvt ltd. The trend analysis is predicted for the 2012-2016 in which the cost is expected to increase from 8025.64 to 12442.44. Past year amount 6621.14 and expected amount from this analysis is 8025.64

CHART NO: 2.6.3.1

TABLE SHOWING THE TREND ANALYSIS OF TOTAL ASSETS FOR FUTURE YEARS

2016 24%

2012 16%

2013 18%

2015 22% 2014 20%

TABLE NO.2.6.3.2 TABLE SHOWING THE TREND ANALYSIS OF INVENTORIES FOR FUTURE YEARS YEAR 2007 2008 2009 2010 2011 TOTAL INVENTORIES 1070.32 1223.91 1330.01 1638.24 2208.90 7471.38 (X) -2 -1 0 1 2 0 (x2) 4 1 0 1 4 10 XY -2140.64 -1223.91 0 1638.24 4417.8 2691.49

Source: Secondary Data The line of equation of trend analysis is Y= a + b x In the year of 2012 is = 1494.2 + 747.13 (3) = 3735.59 In the year of 2013 is = 1494.2 + 747.13(4) = 4482.72 In the year of 2014 is = 1494.2 + 747.13(5) = 5229.85

In the year of 2015 is = 1494.2 + 747.13(6) = 5976.98

In the year of 2016 is

= 1494.2 + 747.13(7) = 6724.11

INTER PRETATION: It is clear from the above table that the trend analysis is calculated for cost of Sungwoo gestamp hi- tech (chennai) pvt ltd. The trend analysis is predicted for the 2012-2016 in which the cost is expected to increase from 3735.59 to 6724.11. Past year amount 2208.90 and expected amount from this analysis is 3735.59.

CHART NO: 2.6.3.2

CHART SHOWING THE TREND ANALYSIS OF INVENTORIES FOR FUTURE YEARS

Inventories

2016

6724.11

2015

5976.98

2014

5229.85

2013

4482.72

3735.59 2012

1000

2000

3000

4000

5000

6000

7000

TABLE NO: 2.6.4.1 LINEAR REGRESSION ANALYSIS Year Inventories ( Y) 2007 2008 2009 2010 2011 TOTAL(S) 1070.32 1223.91 1330.01 1638.24 2208.90 7471.38 X X=x-2009 -2 -1 0 1 2 0 4 1 0 1 4 10 -2140.64 -1223.91 0 1638.24 4417.8 2691.49 X2 XY

Source: Secondary Data X=Sx/n X=0/5 Y=Sy/n Y = 7471.38 / 5 = 1494.27 =0

b = sxy n x y / Sx2 nx2 b = 2691.49 5 * 0 * 7471.38 / 10 5 * 0 = 269.149

a =ybx = 1494.27 269.149 * 0 = 1494.27

The forecast of inventory for the year 2012 is computed by substituting x = 2012 in the above equation.

Y=a+bx

= 1494.27 + 269.149 x = 1494.27 + 269.149 (x 2009) = 1494.27 + 269.149 (2012 2009) = 1494.27 + 269.149 (3) = 1494.27 + 807.447 = 2301.71

Therefore inventory year 2012 will be approximately Rs. 2301.71

TABLE 2.6.5.1 ABC ANALYSIS OF CONSUMPTION REPORT FOR THE YEAR 2007 Annual Part no J050 Part name Dash complete J000 RR FLR complete 20102.02 9000 156239040 337157220 19529.88 8000 Price/unit Unit/year consumption Rs/year 180918180 Cumulative value of annual consumption(Rs.) 180918180 A Class

J200

RR FLR complete

19652.13

4000

108874845

446032065

J200

QTR compl, LH

19852.25

440

80362255

526394320 B

J000

QTR compl,RH

20120.07

2000

78608520

605002840

J001

RR FLR complete

19100.85

5700

51189516

656192356

X000 X050

HOOD Sun roof reinf

19452.43 18959.08

1600 2700

40240140 30779104

696432496 727211600 C

X000 X000

Roof FR Fuel filler

19236.94 19600.55

1600 4100

31123888 8734990

758335488 767070748

Source: Secondary Data

INTERPRETATION: The classification of ABC analysis is shown as follows: A class items- Dash complete and RR FLR complete. B class items- RR complete.QTR compl, KH and QTR compl, LH C class items- RR FLR complete, HOOD, Sun Roof Reinf, ROOF FR, Fuel filler

CHART NO 2.6. 5.1 GRAPH SHOWING ABC ANALYSIS REPORT FO SGH FOR THE YEAR 2007-2011

ABC Analysis
20400 20200 A class 20000 19800 19600 19400 19200 C class 19000 18800 18600 18400 18200 Dash RR FLR 5 RR FLR 3 QTR LH QTR RH RR FLR HOOD Sun roof ROOF FR Fuel filler C class B class A class C class C class B class C class B class

TABLE 2.6.5.2 ABC ANALYSIS OF CONSUMPTION REPORT FOR THE YEAR 2008 Annual Part no J050 Part name Dash complete J000 RR FLR complete J200 RR FLR complete J200 QTR compl, LH J000 QTR compl,RH J001 RR FLR complete X000 X050 HOOD Sun roof reinf X000 X000 Roof FR Fuel filler 20852.41 20992.37 4000 5000 3990454 10006110 323155516 333161626 19952.27 20042.32 200 1000 7914100 6037536 313127526 319165062 20015.22 500 13903736 305213426 C 20125.12 300 20042320 291309690 19785.25 400 20100450 271267370 19862.48 700 62795430 251166920 B 20100.45 1000 83409640 188371490 20931.81 3000 Price/unit Unit/year consumption Rs/year 104961850 Cumulative value of annual consumption(Rs.) 104961850 A Class

Source: Secondary Data INTERPRETATION:

The classification of ABC analysis is shown as follows: A class items- Dash complete and RR FLR complete. B class items- RR complete, C class items- QTR compl, LH and QTR compl, RH RR FLR complete, HOOD, Sun Roof Reinf, ROOF FR, Fuel filler

CHART NO 2.6.5.2 GRAPH SHOWING ABC ANALYSIS REPORT FO SGH FOR THE YEAR 2007-2011

ABC analysis
21200 21000 20931.81 20800 20600 20400 20200 20100.45 20000 19800 19600 19400 19200 19000 DASH RR FLR 5 RR FLR 3 QTR LH QTR RH RR FLR HOOD Sun roof ROOF Fuel filler 19862.48 19785.25 20125.12 20015.22 19952.27 20042.32 20992.37 20852.41

TABLE 2.6.5.3 ABC ANALYSIS OF CONSUMPTION REPORT FOR THE YEAR 2009 Annual Part no J050 Part name Dash complete J000 RR FLR complete J200 RR FLR complete J200 QTR compl, LH J000 QTR compl,RH J001 RR FLR complete X000 X050 HOOD Sun roof reinf X000 X000 Roof FR Fuel filler 18656.62 19045.89 450 650 11340216 8395479 157467500 165862979 19623.72 19125.12 1300 700 13271846 12379829 133747456 146127284 C 19205.85 1200 13387584 120475610 18900.36 600 17550765 107088016 18959.78 700 19039410 89537261 19500.85 900 2193995 70497851 B 19945.45 1100 23047020 48557856 19039.41 1000 Price/unit Unit/year consumption Rs/year 25510836 Cumulative value of annual consumption(Rs.) 25510836 Class

Source: Secondary Data INTERPRETATION: The classification of ABC analysis is shown as follows: B class items- Dash complete and RR FLR complete. RR complete, QTR compl, LH and QTR compl, RH C class items- RR FLR complete, HOOD, Sun Roof Reinf, ROOF FR, Fuel fill

CHART NO 2.6.5.3 GRAPH SHOWING ABC ANALYSIS REPORT FO SGH FOR THE YEAR 2007-2011

20000 B class 19800 19600 19400 19200 19000 18800 C class 18600 18400 18200 18000 DASH RR FLR 5 RR FLR QTR,LH QTR,RH RR FLR 3 HOOD Sun roof ROOF Fuel filler B class B class B class B class C class

C class

C class

C class

TABLE 2.6.5.4 ABC ANALYSIS OF CONSUMPTION REPORT FOR THE YEAR 2010 Annual Part no J050 Part name Dash complete J000 RR FLR complete J200 RR FLR complete J200 QTR compl, LH J000 QTR compl,RH J001 RR FLR complete X000 X050 HOOD Sun roof reinf X000 Roof FR 23853.65 234 2842389 142884034 22895.81 25080.21 972 351 5581754 1389653 13851992 140041645 24520.45 798.34 8803153 133070238 C 23999.96 1402.29 3618527 124267085 24220.45 1522.07 19354972 120648558 B 24855.15 1238.10 30773161 101293586 25100.25 1441.63 33654903 70520425 A 24759.49 1148.00 Price/unit Unit/year consumption Rs/year 36865522 Cumulative value of annual consumption(Rs.) 36865522 Class

X000

Fuel filler

23959.54

58

2225472

145109506

Source: Secondary Data

INTERPRETATION: The classification of ABC analysis is shown as follows: A class items- Dash complete and RR FLR complete, RR complete. B class items- QTR compl, LH C class items- QTR compl, RH RR FLR complete, HOOD, Sun Roof Reinf, ROOF FR, Fuel filler

CHART NO 2.6.5.4 GRAPH SHOWING ABC ANALYSIS REPORT FO SGH FOR THE YEAR 2007-2011

ABC analysis
25500 B class C class 25000 C class A class B class 24500 A class A class 24000 C class C class

23500 Cclass

23000

22500

22000

21500 DASH RR FLR 5 RR FLR 3 QTR LH QTR RH RR FLR HOOD Sun roof Roof FR Fuel filler

TABLE NO: 2.6.5.5 ABC ANALYSIS OF CONSUMPTION REPORT FOR THE YEAR 2011 Annual Part no J050 Part name Dash complete J000 RR FLR complete J200 RR FLR complete J200 QTR compl, LH J000 QTR compl,RH J001 RR FLR complete X000 X050 HOOD Sun roof reinf X000 X000 Roof FR Fuel filler 34522.95 34252.65 2250 3340 10801617 8462560 806576010 815038570 34290.85 35265.36 315 855 30151882 26325165 769449228 795774393 33850.24 250 51543478 739297346 C 35100.22 750 77676637 687753868 33900.45 6532 79793509 610077231 34500.32 1494 114403851 530383722 B 33495.63 5805 194442132 415879871 34692.83 2300 Price/unit Unit/year consumption Rs/year 221437739 Cumulative value of annual consumption(Rs.) 221437739 A Class

Source: Secondary Data INTERPRETATION: The classification of ABC analysis is shown as follows: A class items- Dash complete and RR FLR complete, RR complete. B class items- QTR compl, LH and QTR compl, RH C class items- RR FLR complete, HOOD, Sun Roof Reinf, ROOF FR, Fuel filler

CHART NO: 2.6.5.5 GRAPH SHOWING ABC ANALYSIS REPORT FO SGH FOR THE YEAR 2007-2011

ABC analysis

Fuel filler C class ROOF C CLASS

DASH A class RR FLR 5 A class

Sun roof C class

RR FLR 3 B class

HOOD C class RR FLR C class QTR,RH B class

QTR,LH B class

CHAPTER 6 FINDINGS The overall performance of the years 2007 is high as compared to the previous year.

Overall the current ratio of SGH has been decreased. Most of the quick ratio of the SGH has been decreased.

The net working capital ratio of the SGH has been increased. The total debt ratio of the SGH has been increased. The proprietary ratio of the SGH has been much decreased. Current assets turnover ration of the company has been increased.
The total assets turnover ratio of the SGH has been increased.

Overall the performance of the inventories positive correlation is good for the
company

Correlation between inventories and fixed deposits is also positive correlation.

So it is good for the company. Inventories and loans & advances are positive correlation. The correlation of the inventories and sundry debtors is also positive correlation. So the inventory and sundry debtors level is good for the company. Inventories and reserves, correlation of the company is positive relation. So it is good for the company. Trend analysis for total assets of the company is past year amount from this year amount will be increased in the future year, it is good for the company. Trend analysis for inventories of the company is past year amount from this year amount will be increased in the future year, it is good for the company. Linear regression analysis for the inventory will be increased.

 A CLASS ITEMS- Dash complete, RR FLR complete, RR FLR complete. B CLASS ITEMS- QTR complete LH, QTR complete RH. C CLASS ITEMS- RR FLR complete, HOOD, SUN Roof REINF, ROOF FUEL filler. Overall the inventory percentage is least during the 2008,2009 because only a small portion of inventory has been invested. The year 2011 has highest investment in inventory.