A STUDY ON FINANCIAL PERFORMANCE OF

AREVA T&D INDIA LTD

In partial fulfillment of the requirements for the award of the degree of

Master of Business Administration

Submitted by
N. Shanmugapriya
0211370035

Under the guidance of

Prof. Kannusamy S
Professor, PULC Twinning programme

Directorate Of Distance Education

Pondicherry University

Pondicherry – 605 014

(2011-2013)
 CERTIFICATE OF THE GUIDE

This is to certify that the project work titled “A study of financial performance of AREVA
T&D INDIA LTD”

is a bonafied work carried out by Ms. Shanmugapriya. N

Enrolment no: 0211370035 carried out in partial fulfillment for the award of degree of
MBA Finance of Pondicherry University under my guidance. This project work is original
and not submitted earlier for the award of any Degree/ Diploma or associate ship of any
other University / Institution.

Signature of the Guide

Prof. S. Kannusamy M.Com., M. Phil., MBA.,

PGDFM., ICWAI Inter

Lecturer (Part Time),

PU-LC, Twinning Programme,

Loyola College,

Chennai - 600034
Place:

Date:
 DECALARATION

I,Ms. Shanmugapriya. N hereby declare that the project work titled “A study of financial
performance of AREVA T&D INDIA LTD” is the original work done by me and submitted to
the Pondicherry University in partial fulfillment of the requirements for the award of master of
Business Administration in finance is a record of the original work done by me under the
supervision of Prof. S. Kannuswamy.

Enrollment No: 0211370035

Date: 9.5.2010

Shanmugapriya. N
 ACKNOWLEDGEMENTS

I adore and honor the Holy Trinity for strengthening me, being with me to guide and help me

complete this research work successfully.

I am greatly indebted to my supervisor and guide Prof. S.Kannuswamy, Faculty, PULC

Twinning Program for his invaluable guidance, support and encouragement throughout the
tenure of this work. I greatly appreciate his flexibility towards my independent approach of this
project. I thank him once again for his invaluable suggestions.

I would also like to express my sincere thanks to my Program coordinator Prof. S. Xavier
Mahimairaj, MCom, M.Ed, M.Phil., MBA., PULC Twinning Program for his invaluable support
for the completion of the program.

I would also like to express my profound gratitude to Dr. Arokiyaswami Director PULC
Twinning Program and Rev. Fr. Albert Muthumalai, S.J., Principal, Loyola College, for
providing me with an opportunity to carry out this study successfully.

My deepest and loving gratitude goes to my beloved parents for their moral and prayerful
support.

My sincere thanks are due to all those who shared their invaluable time to provide the
required information for this research.

I profusely thank my friends who generously shared their valuable time for me to complete the
research success

Shanmugapriya. N

Enrollment No: 0211370035

 CHAPTER I

INTRODUTION
INTRODUTION

Finance is the life-blood of business. It is rightly termed as the science of money. Finance is very
essential for the smooth running of the business. Finance controls the policies, activities and
decision of every business.

“Finance is that business activity which is concerned with the organization and conversation of
capital funds in meeting financial needs and overall objectives of a business enterprise.”-
Wheeler

Financial management is that managerial activity which is concerned with the planning and
controlling of a firm financial reserve. Financial management as an academic discipline has
undergone fundamental changes as regards its scope and coverage. In the early years of its
evolution it was treated synonymously with the raising of funds. In the current literature
pertaining to this growing academic discipline, a broader scope so as to include in addition to
procurement of funds, efficient use of resources is universally recognized. Financial analysis can
be defined as a study of relationship between many factors as disclosed by the statement and the
study of the trend of these factors. The objective of financial analysis is the pinpointing of
strength and weakness of a business undertaking by regrouping and analyzing of figures obtained
from financial statement and balance sheet by the tools and techniques of management
accounting. Financial analysis is as the final step of accounting that result in the presentation of
final and the exact data that helps the business managers, creditors and investors.

Financial performance is an important aspect which influences the long term stability,
profitability and liquidity of an organization. The Evaluation of financial performance using
Comparative Balance Sheet Analysis, Common Size Balance Sheet Analysis, Trend Analysis
and Ratio Analysis had been taken up for the study with “AREVA T&D INDIA LTD” as the
project. Analysis of Financial performance is of greater assistance in locating the weak spots at
the AREVA T&D INDIA LTD even though the overall performance may be satisfactory.

Financial statement analysis is a study of relationship between the various financial factors in a
business as disclosed by a single set of statement and statements. It is a process of evaluating the
relationship between component parts of a financial statement to obtain a better understanding of a
firm’s position and performance.

Financial statements analysis is an attempt to determine the significance and meaning of the
financial statement data so that forecast may be made of the future earnings, ability to pay interest
and debt maturities a(both current and long term) and profitability of a sound policy.

A number of methods or devices are used for the analysis the balance sheet and income statements
of the AREVA T&D INDIA LTD . The analysis was done by using various
financial tools, statistical tools. The graphs were used accordingly to support the analysis.

COMPANY PROFILE

AREVA T&D is one of the top three global players in Transmission and Distribution of energy.
As a world leader in T&D, AREVA provides a complete range of innovative Products, Systems
and Services across whole energy value chain. AREVA's global presence is spread across 160
countries with 30000 customers. AREVA T&D India is a subsidiary of AREVA T&D, France.
AREVA T&D has a strong presence in India, with a diverse range of products that include
Transformers and Circuit Breakers, Switchgears, Relays and Substations. Control Panels,
Vacuum Interrupters, Power Relays. It also provides turnkey solutions like Transmission
Projects, HVDC, e-BOP projects, FACTS, SCADA and Power Line Carrier Communication
(PLCCs). The Company’s automation solutions manage approximately 70% of the load flow in
the country. AREVA T&D India is one of the largest French employers in India, with more than
4,200 employees across its various locations

CORPORATE PROFILE

AREVA T&D is one of the few companies in the world with a fully comprehensive range of
equipment and services covering all aspects from the electrical grid to the 3rd rail/overhead line.
Products and systems encompass electrical services for the entire railway electrical infrastructure
– we have solutions for all electrical traction forms of transport.

EXPERIENCE THAT COUNTS AREVA T&D has over 100 years’ experience of bringing
power to people worldwide, blending and optimizing the best elements from different
disciplines, T&D businesses and third-party suppliers. However complex your requirements, we
have the technological knowhow to add value to your business.

MEETING YOUR NEEDS AREVA’s customized solutions are adapted to international and
local technical standards, as well as to the needs of the project. Our expertise has been proven
time and again, as evidenced by our wide range of customers throughout the world: Egypt NAT,
Morocco ONCF, Tunisia TGM, South Africa SPOORNET, USA AMTRAK, NYCTA,
Venezuela CMAC, Brazil REDE and FEPASA, Australia SRA, China KCRC, MTRC, South
Korea KNR, France SNCF, RFF, RATP, TCL, Spain RENFE, GIF, FGV, Germany DB, S-
BAHN, UK NR, CTRL

PROVIDING THE COMPLETE PACKAGE

AREVA T&D’s products, systems and solutions are complemented by a wide range of services
including support, staff training and rapid intervention by locally based staff. Each project has a
project manager as the interface between AREVA and the customer, streamlining
communications and providing a single point of responsibility and ownership. The full package
includes system design, project management, and engineering co-ordination, installation of new
equipment and modification of existing facilities. Whatever service, product or system you need,
AREVA T&D can provide the right solution tailored to your needs

Their fields of expertise

 Compact pre-designed HV & MV substations, GIS or AIS

 MV and LV AC distribution switchboards

 FACTS (Flexible AC Transmission Systems) such as SVC or HV boosters

  Power and distribution transformers, dry and oil-imme

 Protection relays, control and SCADA systems

 LV, MV and HV lightning arrestors

 Energy optimization study and software

 Electrical network consulting equipment expertise & diagnosis

 AC and DC systems engineering

 Turnkey project management

 Cost-effective standardized solutions

 Complete range of services including refurbishment, spare parts, training and

maintenance

ELECTRICAL SECURITY

Security of supply is a major consideration in all projects, ensuring reliability, quality and safety
of electrical distribution. AREVA T&D's energy management, control and protection systems,
including SCADA, ensure constant system surveillance and respond quickly to avoid
disturbance. AREVA T&D also offers several ways of protecting overhead lines, with equipment
such as pre-fabricated substations, circuit breakers and switchgear with high performance
components. For underground applications, our dry-type transformers prevent risk of fire, while
our compact switchgear provides a high level of protection. Each solution is backed by AREVA
T&D’s expert engineering, project management and service capabilities.

CONTINUITY, RELIABILITY AND QUALITY AREVA T&D engineers can analyze your
conditions of use, looking at factors such as electric power requirements and traffic parameters,
to design a secure, reliable solution. All equipment is subjected to extensive tests specifically for
railway applications, using a blend of high-quality manufacturing and leading-edge technologies
to combine optimum efficiency with minimum energy losses.
OPTIMIZING EQUIPMENT LIFE CYCLES We can offer solutions based on power electronic
systems, such as SVC (FACTS), to reduce substation and energy costs, using a fast reacting
system to limit the VAR consumption of the network, while also compensating unbalanced
power supplies.

MINIMIZING ENVIRONMENTAL IMPACT Environmental issues are addressed in a number

of ways, including the use of compact equipment and substations to minimize visual impact, with
designs that blend with the local architecture or landscape. All equipment is designed to reduce
EMC emissions and all products and components are recyclable at end of life.

PALLAVARAM

O Automation - Pallavaram Site certified for Integrated Management System (ISO 9001, ISO
14001 and OHSAS 18001).

O Implementation of Eco-friendly design in packing of panels, leading to reduction of wood

content by 95% in packing boxes.

O All product lines transformed to Lean lines and all conventional relay lines relocated in
existing two blocks, resulting in space optimization and reduction in energy consumption.

O The unit crossed 2.35 Million Man-hours without Loss Time Accidents
(LTA) and Automation (Noida) unit crossed 1.23 Million Man-hours without LTA.

AREVA T&D INDIA LTD. - BUSINESS

Areva T&D India divides its business in verticals like, Systems, Products, Automation, and
Services.

 Products

Company’s Products segment comprises of Power Transformers, Instrument Transformers,

Circuit breakers and Medium Voltage Switch Gears. The company is present in products of up to
765 KV. Areva T&D mainly focuses on Medium Voltage (MV) to Extra High Voltage (EHV)
products.
EHV Products: 132 KV and above
HV Products: 66 KV and Above
MV Products: 33 KV and Below
LV Products: 11 KV and Below (Not present)

 Systems

Under this segment the company undertakes turnkey projects like building substations and
switchyards. The company is also present in high-end areas like 765 KV substations, HVDC
Substations and Gas Insulated Substations.

 Automation

Automation segment comprises of hardware and software for managing energy flows from Load
Dispatch Centre’s. It includes Supervisory Control and Data Acquisition (SCADA) used for
managing smooth energy flows from a centralized location.

 Services

This segment comprises services for network planning and after sales services for products and
systems business.

AREVA T&D INDIA LTD

AREVA T&D India Ltd, is a subsidiary of AREVA T&D SAS (subsidiary of ALSTOM Sextant
5), and a leading player in T&D business, globally.

Areva T&D India Ltd is among the top three transmissions & distribution (T&D) players in
India. The company is engaged in providing products and systems to transmit and distribute
electricity, manage smooth energy flows and operate efficient networks through information
management. Its product offerings include power & distribution transformers, switchgear and
circuit breakers and products in the area of energy automation.

The company offers high-end T&D solutions such as 765 KV and HVDC transmission projects
and Gas Insulated Substations. Company caters to both, private and the public sector clients.

AREVA T&D currently employs over 4200 people in India. AREVA T&D India Ltd. has 8
manufacturing units & 22 sales offices and has been a trend - setter in the field of High-Voltage
Switchgear.

AREVA T&D India was the first to build the 765 kV Sub-station in India with
National Thermal Power Limited (NTPC) at SIPAT, Chhattisgarh. Around 70% of load flow in
India is managed by AREVA T&D's Automation solutions. Your Company has to its credit a
complete range of T&D Products, Systems, Services & Automation solutions.

Formerly Alstom Ltd., the Company was taken over by AREVA T&D in 2005 as AREVA took
control of Alstom’s world-wide T&D business. In 2009 AREVA decided to exit its T&D
business and consequent to the decision, the AREVA Executive Board had begun negotiations
with the Alstom-Schneider Consortium. A Public Announcement (PA) was made by DSP
Merryll Lynch (DSP) - Manager to the Open Offer (on behalf of the acquirers Alstom-
Schneider), to acquire up to 20% of issued share capital of AREVA T&D India at Rs. 295.34 per
share. The Open offer opened on 6th November, 2010 and closes on 25th November, 2010. The
expected date for closure of the Open offer process is 10th December, 2010.

AREVA T&D's leading position in today's energy market and growing worldwide presence is
the result of 125 years of pioneering innovation, technological expertise and an unwavering
commitment to quality and customer service.

COMMITTED TO SUSTAINABLE DEVELOPMENT, EVERY STEP OF THE WAY

Their policy is implemented around ten commitments and is managed by specific criteria that
enable us to assess our performance and define improvement plans that are consistent with
overall objective these ten commitments are:
 Governance:

Carry out responsible management of activities in line with the group’s values and assess
and accurately report on performance to shareholders and all stakeholders.

 Financial performance:

Ensure the group’s longevity via long-term profitable growth. Current initiatives include
lean manufacturing and supply chain optimization programs and the implementation of
our declaration of sustainability, which we ask suppliers to adhere to.

 Customer Satisfaction:

Be attentive to customer expectations, anticipate their needs, accompany their

development, and help to measurably increase their satisfaction. AREVA T&D deploys
these ambitions through a strategy of increased customer intimacy to engage all
employees in improving customer loyalty.

 Commitment to employees:

Increase the professional satisfaction of our employees and monitoring the quality of their
working conditions. This is put in practice, through programs such as employee
satisfaction surveys.

 Risk management and prevention:

Ensure and manage the highest level of safety and security in all activities in order to
preserve staff health as well as that of local populations, in addition to protecting the
environment. AREVA T&D endeavors to provide the safest working conditions and
strictly monitors accident frequency rates.

 Respect for the environment:

Limit our impact on the environment by reducing our consumption of natural resources,
dealing with our waste and optimizing waste management. At AREVA T&D this means
reducing direct emissions of greenhouse gases linked to SF6 release, broadly deploying
 environmental management, occupational safety systems and carbon footprint reduction
projects as well as enforcing international standards on site quality, such as ISO 14001.

 Innovation:

Develop and manage the most advanced technologies in order to anticipate customers’
needs and increase our competitiveness by meeting requirements in terms of security,
safety and environmental protection.
At AREVA T&D we are developing eco-design approaches to optimize the
environmental efficiency of products throughout their life cycle. We can offer solutions
to connect renewable energy sources to the grid and increase electricity generated by
them.

 Community involvement:

Engage in the social and economic development of the places in which AREVA
T&D operates. Local initiatives have taken place across AREVA T&D’s sites worldwide,
from environmental initiatives involving families in France to humanitarian and public
health projects in international sites.

 Dialogue and consensus-building:

Establish relationships of trust through structured and thereby improved communication

between our sites and our residential and industrial neighbors, local administrators,
associations, elected officials and the media. This approach helps identify priorities based
on stakeholders’ expectations and perceptions of a site.

 Continuous improvement:

Implement a continuous improvement approach based on practices shared, such as the

Six Sigma methodology program.
HUMAN RESOURCES DEPARTMENT

Training and Development

In the year under review, the focus of training was on Competency Building across various
levels. Some of the key programmers for 2009 were Strategic Leadership for Senior
Management Team, Fast Track Business Management with MM Bangalore for High Potential
Managers, Finance for Non-Finance with Faculty from IIM Bangalore. A unique Program called
Celemi Decision Base was also undertaken for building overall business perspectives into the
Managers. During the year, AREVA University conducted Cycle 3 program in India. Another
new initiative undertaken was towards building the leadership pipeline. With the help of Unit
Managers, people with leadership potential were identified and have also completed succession
planning. For senior managers, a 360 degree feedback program was also launched. An average of
4 man days of training for all employees was maintained.

In May 2009, training of the second batch for AREVA T&D Finance Institute Module 1 was
conducted at The Indian School of Business (ISB, Hyderabad) - India’s leading business school,
as training ground for its global finance executives. This training program has been
conceptualized by AREVA T&D finance department, implemented with the support of AREVA

University, and supported by ISB, Hyderabad and its professors in collaboration with AREVA
T&D managers and CEOs of leading Indian companies.

The second batch of AREVA Continuing Education Program for Diploma Engineers was
initiated in November, 2009 through a tie up with NT, Chennai at their campus. 29 Engineers
were enrolled for this program.

RECRUITMENT AND RETENTION OF TALENT

AREVA T&D India has a policy of bringing young talent into the organization and nurturing
them for its future growth. 167 Graduate Engineers and 33 Diploma Engineers joined the
organization in 2009. They have been put through intensive training prior to placement at various
units. Over the last four years, your Company has achieved high retention percentage of
Graduate Engineers and Managers. The attrition rate amongst Managers and Professionals was
around 4%. Relocation program for employees in all three Greenfield sites ensured its successful
start up and smooth talent transition. The Company’s current employees continue to support the
efforts to attract talent through the Employee Referral Scheme, which contributes nearly 29% to
the lateral recruitments.
 CHAPTER II

OBJECTIVES AND RESEARCH

DESIGN
NEED OF THE STUDY

The financial statements are mirror which reflects the financial position and strengths or weakness
of the concern. The analysis of financial statements are useful to:
Management
Investors
Creditors
Bankers
Financial institution etc…

SCOPE OF THE STUDY

The study is based on the accounting information of the AREVA T&D INDIA LTD. The study
covers the period of 2006-2009 for analyzing the financial statement such as income statements and
balance sheet.

Considering the availability of time, information and sources of study is confined the Performance
of the AREVA T&D INDIA LTD. This study aims at analyzing the overall financial
performance of the company by using various financial tools.
OBJECTIVES

PRIMARY DATA OBJECTIVES

 To analyze the financial statements to find out the present and past company’s financial
position

 To make comparative study of financial statements in different years using various

financial tools

 To identifying the financial strength and weakness of the company

SECONDARY DATA COLLECTION METHOD

 To suggest measure for improvement in financial performance

 To have an insight into the management of profit in an organization

LIMITATIONS OF THE STUDY

 No primary data is used for the study.

 Figures for the analysis are taken from the Profit & Loss A/c and Balance sheet of the
company.
 The major part of the work is concerned with financial data; adequate data was not able
to pool because of the secrecy maintained by the company.
 The study covers the period of 4 years 2006-2009.
RESEARCH DESIGN

Research design stands for the framework of research. The research design utilized in this study is

descriptive. The following are major tools used in analysis and interpretation.

 Comparative balance sheet.

 Comparative income statement
 Common size balance sheet
 Common size income statement
 Ratio analysis

RESEARCH METHODOLOGY

 As the nature of the study relates to finance performance the main part used
was secondary data. It includes profit and loss account, balance sheet etc.
 Thus the study is based on the published accounts and annual reports of
AREVA T&D INDIA LTD.

Types of research design:

Exploratory research
Descriptive research
Explanatory research

Exploratory research
The research that travels through an unfamiliar area to learn more, inquire in to or discuss in detail
about it. A new option or possibility to evaluate , examine by this is known as exploratory research.

Descriptive research
The research that serves seek to describe, otherwise called for describing or classifying without
pressing the judgments. This is known as descriptive research.
Explanatory research
The research that serves to explain something from the information gathered from the study or the
casual relationship between variables. This is known as explanatory research
 CHAPTER III

REVIEW OF LITERATURE
REVIEW OF LITERATURE

Gopinathan Thachappilly (2009), in this articles he discuss about the Financial Ratio Analysis
for Performance evaluation. It analysis is typically done to make sense of the massive amount of
numbers presented in company financial statements. It helps evaluate the performance of a
company, so that investors can decide whether to invest in that company. Here we are looking at
the different ratio categories in separate articles on different aspects of performance such as
profitability ratios, liquidity ratios, debt ratios, performance ratios, investment evaluation ratios.

James Clausen (2009), He state that the Profitability Ratio Analysis of Income Statement and
Balance Sheet Ratio analysis of the income statement and balance sheet are used to measure
company profit performance. He said the learn ratio analyses of the income statement and
balance sheet. The income statement and balance sheet are two important reports that show the
profit and net worth of the company. It analyses shows how the well the company is doing in
terms of profits compared to sales. He also shows how well the assets are performing in terms of
generating revenue. He defines the income statement shows the net profit of the company by
subtracting expenses from gross profit (sales – cost of goods sold). Furthermore, the balance
sheet lists the value of the assets, as well as liabilities. In simple terms, the main function of the
balance sheet is to show the company’s net worth by subtracting liabilities from assets. He said
that the balance sheet does not report profits, there’s an important relationship between assets
and profit. The business owner normally has a lot of investment in the company’s assets.

Gopinathan Thachappilly (2009), He discuss about the Profitability Ratios Measure Margins and
Returns such as gross, Operating, Pretax and Net Profits, ROA ratio, ROE ratio, ROCE ratio.
However, he determines the Gross profit is the surplus generated by sales over cost of goods
sold. He discussion about the Gross Profit Margin = Gross Profit/Net Sales or Revenue.
Moreover, Operating profits are arrived at by deducting marketing, administration and
depreciation and R&D costs from the gross margin. Nonetheless, He explains about the
operating profit margin. Operating Profit Margin = Operating Profit/Net Sales or Revenue.
Nevertheless, pretax profits are computed by deducting non-operational expenses from operating
profits and by adding non-operational revenues to it. Pretax Profit Margin = Pretax Profit/Net
Sales or Revenue. Nonetheless, he also analysis about the net profit margin.Net Profit Margin =
Net Profit/Net Sales or Revenue. He also explains that the returns on resources used dividend
into three categories such as ROA, ROE, and ROCE: At first the Return on Assets = Net Profit/
(Total Assets at beginning of the period + Total Assets at the close of the period)/2) - The
denominator is the average total assets employed during the year. Return on Equity = Net Profit/
(Shareholders' Equity at the beginning of the year + Shareholders' Equity at the close of the
year)/2). ROCE ratio: Return on Capital Employed = Net Profit/ (Average Shareholders' Equity
+ Average Debt Liabilities) - Debt Liabilities.

Maria Zain (2008), in this articles he discuss about the return on assets is an important
percentage that shows the company’s ability to use its assets to generate income. He said that a
high percentage indicates that company’s is doing a good utilizing the company’s assets to
generate income. He notices that the following formula is one method of calculating the return
on assets percentage. Return on Assets = Net Profit/Total Assets. The net profit figure that
should be used is the amount of income after all expenses, including taxes. He enounce that the
low percentage could mean that the company may have difficulties meeting its debt obligations.
He also short explains about the profit margin ratio – Operating Performance .He pronounces
that the profit margin ratio is expressed as a percentage that shows the relationship between sales
and profits. It is sometimes called the operating performance ratio because it’s a good indication
of operating efficiencies. The following is the formula for calculating the profit margin. Profit
Margin = Net Profit/Net Sales.

James Clausen (2009), in this article he barfly express about the liquidity ratio. He Pronounce
that it is analysis of the financial statements is used to measure company performance. It also
analyses of the income statement and balance sheet. Investors and lending institutions will often
use ratio analyses of the financial statements to determine a company’s profitability and
liquidity. If the ratios indicate poor performance, investors may be reluctant to invest. Therefore,
the current ratio or working capital ratio, measures current assets against current liabilities. The
current ratio measures the company’s ability to pay back its short-term debt obligations with its
current assets. He thinks a higher ratio indicates the company is better equipped to pay off short-
term debt with current assets. Wherefore, the acid test ratio or quick ratio, measures quick assets
against current liabilities. Quick assets are considered assets that can be quickly converted into
cash. Generally they are current assets less inventory.
Gopinathan Thachappilly(2009),he also state that the Liquidity Ratios help Good Financial .He
know that a business has high profitability, it can face short-term financial problems and its
funds are locked up in inventories and receivables not realizable for months. Any failure to meet
these can damage its reputation and creditworthiness and in extreme cases even lead to
bankruptcy. In addition to, liquidity ratios are work with cash and near-cash assets of a business
on one side, and the immediate payment obligations (current liabilities) on the other side. The
near-cash assets mainly include receivables from customers and inventories of finished goods
and raw materials. Coupled with, current ratio works with all the items that go into a business'
working capital, and give a quick look at its short-term financial position. Current assets include
Cash, Cash equivalents, Marketable securities, Receivables and Inventories. Current liabilities
include Payables, Notes payable, accrued expenses and taxes, and Accrued installments of term
debt). Current Ratio = Current Assets / Current Liabilities. Similarly, Quick ratio excludes the
illiquid items from current assets and gives a better view of the business' ability to meet its
maturing liabilities. Quick Ratio = Current Assets minus (Inventories + Prepaid expenses +
Deferred income taxes + other illiquid items) / Current Liabilities. In the final ratio under this
article is cash ratio .Cash ratio excludes even receivables that can take a long time to be
converted into cash. Cash Ratio = (Cash + Cash equivalents + Marketable Securities) / Current
Liabilities.

Jo Nelgadde (2010), in this article he briefly about the asset management ratio. It divided into
different types of categories. He state that about the used to analyze accounts receivable and
other working capital figures to identify significant changes in the company’s operations and
financial accounts. He said that there are two categories about this ratio such as account
receivable turnover and average age of account receive. He measurement the ratio as, Accounts
receivable turnover = Sales / Average Accounts receivable. Average age of accounts receivable/
collection period = 365 days / Accounts receivable Turnover.

Jo Nelgadde (2009), He said that learn how to perform inventory analysis and inventory turnover
analysis to better understand a business as well as to identify effective inventory management.
He analyzing a company’s financial performance definitely includes performing inventory
analysis. He know that there are three types of business inventory: Raw Materials (RM),Work-
In-Progress (WIP),Finished Goods (FG).He give idea two types formula of ratio such as
Inventory Turnover = Cost of Goods Sold / Average Inventory, Average age of Inventory = 360
days / Inventory Turnover.

James Clausen (2009), He denotes that about the total asset ratio. The calculation uses two
factors, total revenue and average assets to determine the turnover ratio. When calculating for a
particular year, the total revenue for that year is used. Instead of using the year ending asset total
from the balance sheet, a more accurate picture would be to use the total average assets for the
year. Once the average assets are determined for the same time period that revenue is compared,
the formula for calculating the asset turnover ratio is. Total Revenue / Average Assets = Asset
Turnover Ratio.

Munya Mtetwa (2010), in this article he short propose that about the fixed asset. He define that
fixed assets are assets that are used in production or supply of goods or services and they are to
be used within the business for more than one financial year. Consequently, fixed assets
represent the company's long term income generating assets and they can either be tangible or
non tangible. It includes land and buildings, plant and equipment, golf courses, casinos, football
players, machinery and hotels depending on the nature of the business under consideration. Fixed
asset turnover = Sales / Net fixed asset.

Diane White (2008), He refer that the accounts receivable is an important analytical tool for
measuring the efficiency of receivables operations is the accounts receivable turnover ratio.
Many companies sell goods or services on account. This means that a customer purchases goods
or services from a company but does not pay for them at the time of purchase. Payment is
usually due within a short period of time, ranging from a few days to a year. These transactions
appear on the balance sheet as accounts receivable.

Lucia Jenkins (2009), Understanding the use of various financial ratios and techniques can help
in gaining a more complete picture of a company's financial outlook. He thinks the most
important thing is fixed cost and variable cost. Fixed costs are those costs that are always
present, regardless of how much or how little is sold. Some examples of fixed costs include rent,
insurance and salaries. Variable costs are the costs that increase or decrease in ratios proportion
to sales.
Gopinathan Thachappilly (2009), in this articles he express about debt management. He mention
that the Ratio of Debt to Equity has Implications for return on equity debt ratios check the
financial structure of the business by comparing debt against total capital, against total assets and
against owners' funds. The ratios help check how "leveraged" a company is, and also the
financial maneuverability of the company in difficult times. The concepts of leverage and other
issues are examined below. The Debt Ratios formula is that Debt Ratio = Total Liabilities / Total
Assets (Total liabilities include even non-interest-bearing operational liabilities) and Debt to
Equity Ratio (Debt Capital Ratio) = Total Liabilities / Shareholders' Equity. Capitalization (Term
Debt Ratio) = Long-term Debt / (Long-Term Debt + Shareholders' Equity).Interest Coverage
Ratio = Profit before Interest and Taxes (PBIT) / Interest Expense. Simultaneously, debt ratios
and the related interest coverage ratio checks the soundness of a company's financing policies.
One the one hand, use of debt funds can enhance returns to owners. On the other hand, high debt
can mean that the company will find it difficult to raise funds during lean periods of business.

James Hutchinson (2010), He realizes that about the long term debt to equity ratio of a Business.
The ratio of these numbers tells a lot about the business. It is calculated by taking the debt owed
by the company and divided by the owner’s equity, also known as capital. The debt number may
include all liabilities, or just long term debt.

Jo Nelgadde (2010), debt collection and debt recovery tools a company guide to using debt
solution tools for effective debt collection: credit insurance, a solicitor or debt attorney or a debt
collection agency. Moreover, collection of accounts receivable, debt collection or debt recovery
is an important source of a company’s cash flow and business finance. As such, learning about
credit management and debt recovery can prove vital for entrepreneurs.

Gopinathan Thachappilly (2009), he shows that the EPS is computed by dividing the company's
earnings for the period by the average number of shares outstanding during the period. He
discuss that Stock analysts regularly estimate future EPS for listed companies and this estimate is
one major factor that determines the share's price. Price/Earnings (PE) Ratio = Stock Price per
Share / Earnings per Share (EPS).Hence, many investors prefer the Price/Sales ratio because the
sales value is less prone to manipulation. Price/Sales (PS) Ratio = Stock Price per Share / Net
Sales per Share. The Dividend Yield, The dividend yield ratio annualizes the latest quarterly
dividend declared by the company Dividend Yield = Annualized Dividend per Share / Stock
Price per Share.

Gopinathan Thachappilly (2009), he shows that the EPS is computed by dividing the company's
earnings for the period by the average number of shares outstanding during the period. He
discuss that Stock analysts regularly estimate future EPS for listed companies and this estimate is
one major factor that determines the share's price. Price/Earnings (PE) Ratio = Stock Price per
Share / Earnings per Share (EPS).Hence, many investors prefer the Price/Sales ratio because the
sales value is less prone to manipulation. Price/Sales (PS) Ratio = Stock Price per Share / Net
Sales per Share. The Dividend Yield, The dividend yield ratio annualizes the latest quarterly
dividend declared by the company Dividend Yield = Annualized Dividend per Share / Stock
Price per Share.
 CHAPTER IV

DATA ANALYSIS

AND

INTERPRETATIONS
DATA COLLECTION METHOD

Data refers to information or facts. It is not only refers numerical figures but also includes descriptive

facts. While deciding about the method of data collection to be used for the study, the researcher

should keep in mind about two types of data, such as primary data and secondary data.

PRIMARY DATA COLLECTION METHOD

Primary data is the data that is used for the first time by the researcher. The primary data are
collected with specific set of objectives to assess the current status of any variable studied.
Primary data is useful only for the particular period. The following are the data collecting ways;

Questionnaire
Schedule
Interview
Observation

SECONDARY DATA COLLECTION METHOD

Secondary data means data that are already available in the organization. The researcher has to
look into sources for the data from where he can obtain data. The secondary data may either be
published or unpublished.

Published data will be available in

 Magazines
 Journals, books
 Reports by management, scholars, economist etc..
 Public records, surveys, etc.
As this study involves use of secondary data, the balance sheet and income statements are the
data for the study. The study is analytical nature study
THEORITICAL FRAMEWORK
FINANCIAL STATEMENTS

COMPARATIVE FINANCIAL STATEMENT

Comparative financial statements are those statements, which have been designed in a \way so as
to provide time perspective to their consideration of various elements of financial position
embodied in such statements. In these statements figures for two or more period are place side by
side of facilities comparison. Both the income statement and balance sheet can be prepared in the
form of comparative financial statements.

COMPARATIVE BALANCE SHEET

Comparative balance sheet as on two or more different dates can be used for comparing assets
and liabilities and findings out any increase or decrease in the items. Thus while in single
balance sheet the emphasis is on present position, it is on change in the comparative balance
sheet.

RATIO ANALYSIS

A ratio is a mathematical relationship between two items expressed in a quantitative form.

Ratio can be defined as “Relationship expressed kin quantitative terms between figures which
have cause and effect relationship which are connected with each other in some manner or the
other. Ratio analysis involves the process of computing determining and presenting the
relationship of items or groups of items of financial statements
Ratio analysis is an important tool for analyzing the company's financial performance. The
following are the important advantages of the accounting ratios.

1. Analyzing Financial Statements

Ratio analysis is an important technique of financial statement analysis. Accounting ratios are
useful for understanding the financial position of the company. Different users such as
investors, management, bankers and creditors use the ratio to analyze the financial situation of
the company for their decision making purpose.
2. Judging Efficiency
Accounting ratios are important for judging the company's efficiency in terms of its operations
and management. They help judge how well the company has been able to utilize its assets and
earn profits.
3. Locating Weakness
Accounting ratios can also be used in locating weakness of the company's operations even
though its overall performance may be quite good. Management can then pay attention to the
weakness and take remedial measures to overcome them.
4. Formulating Plans
Although accounting ratios are used to analyze the company's past financial performance, they
can also be used to establish future trends of its financial performance. As a result, they help
formulate the company's future plans.
5. Comparing Performance
It is essential for a company to know how well it is performing over the years and as compared
to the other firms of the similar nature. Besides, it is also important to know how well its
different divisions are performing among themselves in different years. Ratio
analysis facilitates such comparison
CURRENT RATIO

The ratio of current assets to current liabilities is called current ratio. In order to measure the
short-term liquidity or solvency of a concern, comparison of current assets and current
liabilities is inevitable. Current ratio indicates the ability of a concern to meet its current
obligations as and when they are due for payment.

Current ratio = Current assets

Current liabilities
QUICK ASSETS RATIO

A measure of company’s liquidity and ability to meet its obligations. Quick ratio, often referred
to as acid-test ratio, is obtained by subtracting inventories from current assets and then dividing
by current liabilities. Quick ratio is viewed as a sign of company’s financial strength or weakness
(higher number means stronger, lower number means weaker).

QUICK ASSETS
CURRENT LIABILITIES

WORKING CAPITAL TURNOVER RATIO

A measure comparing the depletion of working capital to the generation of sales over a given
period. This provides some useful information as to how effectively a company is using its
working capital to generate sales.
SALES/
NET WORKING CAPITAL
STOCK TURNOVER RATIO

This ratio measures the stock in relation to turnover in order to determine how often the stock
turns over ion the business. It indicates the efficiency of the firm in selling its product. It is
calculated by dividing the cost of goods sold by the average inventory.

COST OF GOODS SOLD/

AVERAGE INVENTORY

GROSS PROFIT RATIO

This ratio is also known as gross margin or trading margin ratio. Gross profit ratio includes the
difference between sales and direct costs. Gross profit ratio explains the relationship between
gross profit and net sales.

GROSS PROFIT X100

SALES

NET PROFIT RATIO

This ratio is also called net profit to sales ratio. It is a measure of management efficiency in
0perating the business successfully from the owner’s point of view. It indicates the return on
shareholder’s investment. Higher the ratio better is the operational efficiency of business
concern.

NET PROFIT AFTER TAX X100

SALES
SOLVENCY RATIO

One of many ratios used to measure a company’s ability to meet long-term obligations. The
solvency ratio measures the size of a company’s after -tax income, excluding non-cash
depreciation expenses, as compared to the firm’s total debt obligations. It provides a
measurement of how likely a company will be to continue meeting its debt obligations.

TOTAL LIABILITY TO OUTSIDERS

TOTAL ASSETS

FIXED TURNOVER RATIO

The ratio establishes the relationship between fixed assets and long-term funds. The objective
of calculating this ration is to ascertain the proportion of long-term funds invested in fixed
assets. The ratio is calculated as given below:

NET FIXED ASSETS

TOTAL LONG TERM FUNDS

TREND ANALYSIS

Trend analysis is a form of comparative analysis that is often employed to identify current and
future movements of an investment or group of investments. The process may involve comparing
past and current financial ratios as they related to various institutions in order to project how long
the current trend will continue. This type of information is extremely helpful to investors who
wish to make the most from their investments.

The process of a trend analysis begins with identifying the category of the investments that are
under consideration. For example, if the investor wishes to get an idea on the potential for
making a profit with pork bellies, the focus will be on the performance of pork bellies in a
commodities market. The trend analysis will include more than one supplier for the commodity,
in order to get a more accurate picture of the current status of pork bellies on the market.

Once the focus is established, the investor takes a long at the general performance for the
category over the last couple of years. This helps to identify key factors that led to the current
trend of performance for the investment under consideration. By understanding how a given
investment reached the current level of performance, it is then possible to determine if all or
most of those factors are still exerting an influence.

After identifying past and present factors that are maintaining a current trend in performance, the
investor can analyze each factor and project which factors are likely to continue exerting
influence on the direction of the investment. Assuming that all or most of the factors will
continue to exert an influence for the foreseeable future, the investor can make an informed
decision on whether to buy or sell a given asset.

A trend analysis may be used to identify and project upswings in the performance of a stock or
commodity, or to identify the potential for an upcoming downturn in value. By comparing the
financial ratio of the past with the present and identifying key factors that helped the investment
to arrive at the current point, it is possible to use the process of trend analysis to project future
worth and adjust the components of the financial portfolio accordingly.
RATIO ANALYSIS

1) CURRENT RATIO :

CURRENT ASSET / CURRENT LIABILITIES

Table1

YEAR CURRENT ASSET CURRENT RATIO

LIABILITIES

2006 10194000 7840000 1.3

2007 14591000 11674000 1.24

2008 21601000 20795000 1.03

2009 28759000 28459000 1.01

Chart 1

CURRENT RATIO

1.3 1.24
1.03 1.01

2006 2007 2008 2009

INTERPRETATION

This ratio is calculated for knowing short term solvency of the organization. Here in AREVA
T&D INDIA LTD the current ratio for 2006 is 1.30 and it was decreased to 2007 as 1.24 and it was
simultaneously decreased to 1.01 in 2009.
2) LIQUID RATIO

= LIQUID ASSETS / CURRENT LIABILITIES

Table 2

YEAR LIQUID ASSET CURRENT RATIO

LIABILITIES

2006 7808000 7840000 0.99

2007 11862000 11674000 1.01

2008 17739000 20795000 0.85

2009 24969000 28459000 0.87

Chart 2

LIQUID RATIO

1.01
0.99

0.87
0.85

2006 2007 2008 2009

INTERPRETATION

Here in AREVA T&D INDIA LTD the Liquid ratio for 2006 is 0.99 and it was increased to 2007 as
1.01 and it was decreased to 0.85 in 2008 and it was increased to 0.87 in 2009.
3) ABSOLUTE LIQUID RATIO

= ABSOLUTE LIQUID ASSET / LIQUID LIABILITIES

Table 3

YEAR ABSOLUTE LIQUID LIQUID LIABILITIES RATIO

ASSET

2006 6913000 7840000 0.88

2007 10739000 11674000 0.91

2008 15180000 20795000 0.72

2009 22049000 28459000 0.77

Chart 3

ABSOLUTE LIQUID RATIO

0.88 0.91
0.72 0.77

2006 2007 2008 2009

INTERPRETATION

Here in AREVA T&D INDIA LTD the Absolute liquid ratio for 2006 is 0.88 and it was increased to
2007 as 0.91 and it was decreased to 0.72 in 2008 and it was increased to 0.77 in 2009.
4) GROSS PROFIT RATIO

= GROSS PROFIT / SALES * 100

Table 4

YEAR GROSS PROFIT * 100 SALES RATIO

2006 440000000 31063406 14.16

2007 629900000 74167924 8.49

2008 820500000 78164508 10.49

2009 931800000 88942063 10.47

Chart 4

GROSS PROFIT RATIO

14.16
10.49 10.47
8.49

2006 2007 2008 2009

INTERPRETATION

This ratio indicates the degree to which selling prices of goods per unit may decline without
resulting in losses on operations for the firm. Here in AREVA T&D INDIA LTD in the year 2006
the gross profit ratio is 14.16% and it was decreased to 8.49% in the year 2007, it was increased to
10.49% in 2008 and it was decreased to 10.47% in 2009.
5) NET PROFIT

=NET PROFIT /SALES *100

Table 5

YEAR NET PROFIT * 100 SALES RATIO

2006 137000000 31063406 4.41

2007 216300000 74167924 2.91

2008 226300000 78164508 2.89

2009 192000000 88942063 2.15

Chart 5

NET PROFIT RATIO

4.41

2.91 2.89
2.15

2006 2007 2008 2009

INTERPRETATION

This ratio is widely used as a measure of over-all profitability and is very useful to proprietors.
Reading along with the operating ratio gives an idea of the efficiency as well as profitability of
the business to a limited extent. Here in AREVA T&D INDIA LTD in the year 2006 the net profit
ratio is 4.41% and it was decreased to 2.91% in the year 2007, it was simultaneously decreased to
2.89% and 2.15% in the year 2008 and 2009.
6) STOCK TURNOVER RATIO

= COST OF GOODS SOLD/ AVERAGE STOCK

Table 6

YEAR COST OF GOODS AVERAGE STOCK RATIO

SOLD

2006 35463406 5837580.5 6.07

2007 80466924 17167235 4.68

2008 86369508 11325043 7.62

2009 98260063 13033467 7.53

Chart 6

STOCK T/O RATIO

7.62 7.53
6.07
4.68

2006 2007 2008 2009

INTERPRETATION

Here in AREVA T&D INDIA LTD the stock turnover ratio is 6.07 in the year 2006 and it was
decreased to 4.68 in the year 2007, it was increased to 7.62 in the year 2008 and it was decreased to
7.53 in the year 2009.
7) FIXED ASSET TURN OVER

=NET SALES / FIXED ASSET

Table 7

YEAR NET SALES FIXED ASSETS RATIO

2006 31063406 1481000 20.97

2007 74167924 2576000 28.79

2008 78164508 6858000 11.39

2009 88942063 9003000 9.87

Chart 7

FIXED ASSET T/O RATIO

28.79
20.97

11.39 9.87

2006 2007 2008 2009

INTERPRETATION

Here in AREVA T&D INDIA LTD the Fixed asset turnover ratio is 20.97 in the year 2006 and it
was increased to 28.79 in the year 2007, it was simultaneously decreased to 11.39 and 9.87 in the
year 2008 and 2009.
8) WORKING CAPITAL TURNOVER

= NET SALES/WORKING CAPITAL [CA-CL]

Table 8

YEAR NET SALES WORKING CAPITAL RATIO

2006 31063406 2354000 13.19

2007 74167924 2917000 25.42

2008 78164508 806000 96.9

2009 88942063 300000 296.4

Chart 8

WORKING CAPITAL T/O RATIO

296.4

96.9
13.19 25.42
2006 2007 2008 2009

INTERPRETATION

Here in AREVA T&D INDIA LTD the Working capital turnover ratio is 13.19 in the year 2006 and
it was increased to 25.42 in the year 2007, it was simultaneously increased to 96.9 and 296.4 in the
year 2008 and 2009.
9) CURRENT ASSET TURNOVER RATIO = NET SALES / CURRENT ASSETS

Table 9

YEAR NET SALES CURRENT ASSETS RATIO

2006 31063406 10194000 3.04

2007 74167924 14591000 5.08

2008 78164508 21601000 3.61

2009 88942063 28759000 3.09

Chart 9

CURRENT ASSET T/O RATIO

5.08
3.61
3.04 3.09

2006 2007 2008 2009

INTERPRETATION

Here in AREVA T&D INDIA LTD the Current asset turnover ratio is 3.04in the year 2006 and it
was increased to 5.08 in the year 2007, it was simultaneously decreased to 3.61 and 3.09 in the year
2008 and 2009.
TREND ANALYSIS

1) SALES TREND

Table 10

YEAR PERCENTAGE

2006 100%

2007 104.37%

2008 109.99%

2009 125.16%

Chart 10

140

120

100

80
SALES TREND
60

40

20

0
2006 2007 2008 2009

INTERPRETATION

The sales trend in AREVA T&D INDIA LTD we take 2006 as base year 100 and the sales were
increased to 104.37% and 109.99% accordingly in the year 2007 and 2008. It was increased to
125.16%.
 2) WORKING CAPITAL TREND

Table 11

YEAR PERCENTAGE

2006 100%

2007 101.07%

2008 106.76%

2009 111.48%

Chart 11

114
112
110
108
106
104 WORKING CAPITAL
102 TREND

100
98
96
94
2006 2007 2008 2009

INTERPRETATION

The Working capital trend in AREVA T&D INDIA LTD we take 2006 as base year 100 and the
working capital were increased to 101.07% and 106.76% accordingly in the year 2007 and 2008. It
was increased to 111.48%.
COMPARATIVE ANALYSIS:

COMPARATIVE BALANCE SHEET OF AREVA T&D INDIA LTD FOR THE YEAR 2008-2009

PARTICULARS 2008 2009 ABSOLUTE PERCENTAGE

CHANGE CHANGE
ASSETS

CURRENT ASSETS

Sundry Debtors 3 78 02 587 3 98 18 713 20 16 126 5.33%

Advance & Deposits 16 85 32 853 19 94 97 037 3 09 64 184 18.37%
Stock in trade 9 92 76 523 11 72 50 439 1 79 73 916 18.10%
Staff Debit Balance 39 54 284 38 48 313 - 1 05 971 -2.68%
Income Receivable 5 60 000 5 80 000 20 000 3.57%
Cash & Bank Account 20 99 75 238 18 18 62 685 - 2 81 12 554 -13.39%
TOTAL CURRENT ASSETS 52 01 01 485 54 28 57 187 2 27 55 702 4.38%

FIXED ASSET
TOTAL FIXED ASSETS 25 76 00 257 27 09 21 452 1 33 21 195 5.17%
TOTAL ASSETS 77 77 01 742 81 37 78 638 3 60 76 896 4.64%

CAPITAL & LIABILITIES

CURRENT LIABILITIES
Sundry Creditors 8 83 28 753 10 74 67 111 1 91 38 358 21.67%
Staff credit balance 12 48 826 12 46 143 - 2 683 -0.21%
Outstanding Liabilities 5 57 83 486 5 53 99 137 - 3 84 350 -0.69%
TOTAL CURRENT LIABILITIES 14 53 61 065 16 41 12 391 1 87 51 326 12.90%
CAPITAL ACCOUNT 31 14 00 000 31 14 00 000 0 0.00%
CURRENT ACCOUNT 10 34 72 413 11 06 01 030 71 28 617 6.89%
LOAN AND ADVANCES 21 74 68 264 22 76 65 217 1 01 96 953 4.69%

TOTAL LIABILITIES 77 77 01 742 81 37 78 638 3 60 76 896 4.64%

INTERPRETATION
The company's fixed asset has increased to 5.17% and the current asset also increased by 4.38%
Loans and advances increased to 4.69% and the current liabilities increased to 12.90%.
COMMON SIZE ANALYSIS:

COMMON SIZE BALANCE SHEET OF AREVA T&D INDIA LTD FOR THE YEAR 2008 & 2009

PARTICULAR 2008 PERCENTAGE 2009 PERCENTAGE

ASSETS

CURRENT ASSETS

Sundry Debtors 3 78 02 587 4.86% 3 98 18 713 4.89%

Advance & Deposits 16 85 32 853 21.67% 19 94 97 037 24.51%
Stock in trade 9 92 76 523 12.77% 11 72 50 439 14.41%
Staff Debit Balance 39 54 284 0.51% 38 48 313 0.47%
Income Receivable 5 60 000 0.07% 5 80 000 0.07%
Cash & Bank Account 20 99 75 238 27.00% 18 18 62 685 22.35%
TOTAL CURRENT ASSETS 52 01 01 485 66.88% 54 28 57 187 66.71%

FIXED ASSET
TOTAL FIXED ASSETS 25 76 00 257 33.12% 27 09 21 452 33.29%
TOTAL ASSETS 77 77 01 742 100.00% 81 37 78 638 100.00%

CAPITAL & LIABILITIES

CURRENT LIABILITIES
Sundry Creditors 8 83 28 753 11.36% 10 74 67 111 13.21%
Staff credit balance 12 48 826 0.16% 12 46 143 0.15%
Outstanding Liabilities 5 57 83 486 7.17% 5 53 99 137 6.81%
TOTAL CURRENT LIABILITIES 14 53 61 065 18.69% 16 41 12 391 20.17%
CAPITAL ACCOUNT 31 14 00 000 40.04% 31 14 00 000 38.27%
CURRENT ACCOUNT 10 34 72 413 13.30% 11 06 01 030 13.59%
LOAN AND ADVANCES 21 74 68 264 27.96% 22 76 65 217 27.98%

TOTAL LIABILITIES 77 77 01 742 100.00% 81 37 78 638 100.00%

INTERPRETATION
The company's fixed asset has been increased to 33.29% when compared to 2008 and the current asset
has been decreased by 66.71% and the current liabilities increased 20.17%.
 CHAPTER V

FINDINGS
FINDINGS

RATIO ANALYSIS:

CURRENT RATIO

 This ratio is calculated for knowing short term solvency of the organization. Here in
AREVA T&D INDIA LTD the current ratio for 2006 is 1.30 and it was decreased to 2007 as
1.24 and it was simultaneously decreased to 1.01 in 2009.

LIQUID RATIO

 Here in AREVA T&D INDIA LTD the Liquid ratio for 2006 is 0.99 and it was increased to
2007 as 1.01 and it was decreased to 0.85 in 2008 and it was increased to 0.87 in 2009.

ABSOLUTE LIQUID RATIO

 Here in AREVA T&D INDIA LTD the Absolute liquid ratio for 2006 is 0.88 and it was
increased to 2007 as 0.91 and it was decreased to 0.72 in 2008 and it was increased to 0.77 in
2009.

GROSS PROFIT RATIO

 This ratio indicates the degree to which selling prices of goods per unit may decline
without resulting in losses on operations for the firm. Here in AREVA T&D INDIA LTD
in the year 2006 the gross profit ratio is 14.16% and it was decreased to 8.49% in the year
2007, it was increased to 10.49% in 2008 and it was decreased to 10.47% in 2009.

NET PROFIT RATIO

 This ratio is widely used as a measure of over-all profitability and is very useful to
proprietors. Reading along with the operating ratio gives an idea of the efficiency as well
as profitability of the business to a limited extent. Here in AREVA T&D INDIA LTD in
the year 2006 the net profit ratio is 4.41% and it was decreased to 2.91% in the year 2007, it
was simultaneously decreased to 2.89% and 2.15% in the year 2008 and 2009.
STOCK TURNOVER RATIO

 Here in AREVA T&D INDIA LTD the stock turnover ratio is 6.07 in the year 2006 and it
was decreased to 4.68 in the year 2007, it was increased to 7.62 in the year 2008 and it was
decreased to 7.53 in the year 2009.

FIXED ASSET TURNOVER RATIO

 Here in AREVA T&D INDIA LTD the Fixed asset turnover ratio is 20.97 in the year 2006
and it was increased to 28.79 in the year 2007, it was simultaneously decreased to 11.39 and
9.87 in the year 2008 and 2009.

WORKING CAPITAL TURNOVER RATIO

 Here in AREVA T&D INDIA LTD the Working capital turnover ratio is 13.19 in the year
2006 and it was increased to 25.42 in the year 2007, it was simultaneously increased to 96.9
and 296.4 in the year 2008 and 2009.

CURRENT ASSET TURNOVER RATIO

 Here in AREVA T&D INDIA LTD the Current asset turnover ratio is 3.04in the year 2006
and it was increased to 5.08 in the year 2007, it was simultaneously decreased to 3.61 and
3.09 in the year 2008 and 2009.

TREND ANALYSIS

SALES TREND

 The sales trend in AREVA T&D INDIA LTD we take 2006 as base year 100 and the sales
were increased to 104.37% and 109.99% accordingly in the year 2007 and 2008. It was
increased to 125.16%.

WORKING CAPITAL TREND

 The Working capital trend in AREVA T&D INDIA LTD we take 2006 as base year 100
and the working capital were increased to 101.07% and 106.76% accordingly in the year
2007 and 2008. It was increased to 111.48%.
COMPARATIVE ANALYSIS

COMPARATIVE BALANCE SHEET

2006-2007

 The company’s fixed asset has increased to 5.17% and the current asset also increased by
4.38 %. Loans and Advances increased to 4.69% and the current liabilities increased to
12.90%.

2007-2008

 The company’s fixed asset has increased to 10.59% and the current asset also increased
by 6.72%. Loans and Advances increased to 16.69% and the current liabilities increased
to 9.23%.

2008-2009

 The company’s fixed asset has increased to 9.31% and the current asset also increased by
7.06%. Loans and Advances increased to 7.15% and the current liabilities increased to
12.97%
COMMON SIZE ANALYSIS:

COMMON SIZE BALANCE SHEET

2006-2007

 The company’s fixed asset has been increased to 33.29% when compared to 2008 and the
current asset has been decreased by 66.71% and the current liabilities increased 20.17%

2007-2008

 The company’s fixed asset has been increased to 34.09% when compared to 2009 and the
current asset has been decreased by 65.91%, and the current liabilities increased 20.39%.

2008-2009

 The company’s fixed asset has been increased to 34.56% when compared to 2010 and the
current asset has been decreased by 65.44%, and the current liabilities increased 21.37%.
CONCLUSION:

After conducting an in depth analysis of AREVA T&D INDIA LTD for three months training
offered me a good financial exposure of their company, After the analyzation the company we
come to know that the liquidity position of the company was so good when compare to the
previous year financial statements.

The company’s fixed asset has been increased when compare to the previous year’s financial
statements as well as the current liabilities of the company’s also increased when comparing to
the previous year

The project training gave me a practical experience of analyzing the financial statements