CHAPTER-V

5.1 FINDINGS

 On analyzing the Z -Score, it has to be calculate the four components (x1, x2, x3, x4) for
non-manufacturing companies.
 The X1 component ratio shows an huge decline in 2017 from 0.56 to 0.18.
 The X2 component value is zero because there is no retained earnings for the past five
years.
 The X3 component ratio indicates the poor financial performance in the year 2017 with
the value of 0.02.
 The X4 component value is fluctuating every year. And it declines over the study period
from 0.47 to 0.42 in 2017.
 On analyzing the Z-Score for the past five years, there is an occurrence of healthy and
grey zone with the value of 2.39, 2.33, 3.47, 4.24, and 1.70. And there is a scope for the
further improvement.
 The growth rate calculation for the revenue has the value of -8.65%. It shows that there is
decline for the past 5 years.
 The growth rate calculation for profit before tax has the value of -78.86%. There is a
huge decline in the net profit.
 The growth rate calculation for earnings per equity share has the value of -7.78%.
 The growth rate value of z-score is –8.18% it seems that there is no growth for the past
five years.
 An attempt was made to find the trend percentage for the revenue, the base value for the
tear 20112-13 is fixed as 100 and the value is 69.98, 89.30, 62.03, and 69.51 for the year
2013-14 to 2016-17 respectively.
 An attempt was made to find the trend percentage for the profit before tax, the base value
for the tear 20112-13 is fixed as 100 and the value is 65.21, 47.24, 77.15, and 20.16 for
the year 2013-14 to 2016-17 respectively.
 An attempt was made to find the trend percentage for the earnings per equity share, the
base value for the tear 20112-13 is fixed as 100 and the value is 708.69, 26.08, 78.26, and
0 for the year 2013-14 to 2016-17 respectively.
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 An attempt was made to find the trend percentage for the Z-Score, the base value for the
tear 20112-13 is fixed as 100 and the value is 97.48, 145.18, 177.40, and 71.12 for the
year 2013-14 to 2016-17 respectively.
 An attempt was made to find the time series regression for the revenue, profit before tax,
earnings per equity share and z-score.
 The time series regression was calculated for the next four years(2018, 2019, 2020, 2021)
respectively. The time series is used to predict the upcomingyear’s growth and value is
projected to be 2.98, 3.04, 3.09 and 3.14.
 The highly occurred expenses are employee benefit expenses and other expenses. In
employee benefit expenses, the salaries and incentiveshad the higher percentage for the
past five years and the value is projected to be 87.51, 86.71, 90.28, 90.40, 90.46
 The highly occurred other expenses are professional and consultancy charges,
commission paid, rent and telephone expenses.
 The professional and consultancy charges percentage for the past five years (2012-13 to
2016-17) are 21.31, 20.40, 31.75, 25.98, and 26.48.
 The commissions paid percentage for the past five years (2012-13 to 2016-17) are 13.13,
9.16, 12.24, 4.38 and 10.50.
 The rent expense percentage for the past five years (2012-13 to 2016-17) is 25.83, 29.29,
23.94, 29.69 and 24.60.
 The telephone expenses percentage for the past five years (2012-13 to 2016-17) are 6.79,
7.41, 5.83, 6.81 and 4.69.
 In a Segmental Reporting, the Brokerage segment earns a lower value 0.017, 0.145,
0.207, 0.144 and 0.144 for the year 2012-2013 to 2016-2017 respectively.

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5.2 SUGGESTION

 They should reduce their incentives expenses.

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5.3CONCLUSIONS

The Z-Score is a valuable management tool to proactively assess the financial condition
of the company’s balance sheet, uncover factors that are stressing the balance sheet and initiate
actions to improve the financial wellness and credit worthiness of the firm. All business
decisions and actions are ultimately revealed in the company’s balance sheet. The Z-Score
measures the effectiveness of business decisions. It empowers managers to anticipate changes
occurring in credit worthiness and proactively manage changes in financial condition.

Armed with a tool to calculate future financial positions managers have the latitude to
better manage outstanding receivables, improve liquidity and lower their cost of capital. Calls for
capital, negotiations for funding or decisions in setting credit policy can now be made from a
knowledgeable position with a set of supporting facts. The Z Score gives business managers an
important negotiating tool to defend their credit rating during capital raises when excess leverage
or deficient levels of working capital and equity are present.
To be a profitable business, a company must have total expenses lower than the gross
profit. So the company should reduce their expenses and to perform well to prevent the
Bankruptcy.

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