O Lakshmi Prasanna: With Reference To

-A
STUDY ON
Financial statement analysis
With reference to
TGV Group of company's
Project submitted in partial fulfillment for the award of the Degree

of
MASTER OF BUSINESS ADMINISTRATION
By
O Lakshmi Prasanna
Reg no : 18jj1e0040
Under the esteemed guidance of

J SREEDHER, MBA(P H D)
Associate Professor
Department of Management Studies

Dr. K.V. Subba Reddy School of Business Management,
(Approved by AICTE & Affiliated to JNTUA, Anantapur)
Opp. Dupadu (R.S), KURNOOL-518218(A.P)
2018 – 2020
Dr. K. V. Subba Reddy School of Business Management
(Approved by AICTE & Affiliated to JNTUA, Anantapur)
OPP- DUPADU (R.S), KURNOOL-518218
Dept. of Management Studies
CERTIFICATE
This is to certify that the Project Report titled “financial stament
Analysis ”with reference to “TGV Group of company's ”was carried out by O

Lakshmi Prasanna Regd. No.18JJ1E0040, This project is submitted in partial fulfilment for
the award of the Degree of Master of Business Administration to Jawaharlal Nehru
Technological University, Anantapur during the academic year 2018 – 2020.
Signature of the Supervisor Signature of the HOD
Signature of External Examiner

STUDENTS DECLARATION
I hereby declare that this Project Report titled “financial statement
analysis ”with reference to TGV Group of companys” submitted by me to
theDepartment of Management Studies, Dr. K. V. Subba Reddy School of
Business Management is a bonafide work undertaken by me and it is not
submitted to any other University or Institution for the award of any degree
certificate or published any time before.
O Lakshmi Prasanna
Regd.no.18JJ1E0040
ACKNOWLEDGEMENT
I would like to express my thanks to all those who helped me directly or indirectly to
complete this project.
First, I take this opportunity to express my sincere thanks to our principal Dr. O. Ravi
Shankar and the college management for providing an opportunity and facility in successful
completion of my project.
I also thank my project guide j SREEDHER , Associate ProfessorDr. K.V. Subba

Reddy School of Business Management for his constant guidance and valuable advice.
I would like to thanks the finace Manager, TGV GROUP of company ,

KURNOOLAll the members who have guided me to complete this project work General
Manager costing, remitting to me to undertake this project.
I am also thankful to my parents, friends for their moral support in carrying out this
research work.
Any attempt to acknowledge by name, the help received by me during completing the
research work runs the risk of omitting someone. Therefore, they must be preceded by sincere
thanks to all who rendered their valuable assistance and guidelines to me.
O Lakshmi Prasanna
Regd. No: 18JJ1E0040

Contents
CHAPTERS Financial stamens analysis PAGE NO
1. INTRODUCTION
➢ About the Topic

➢ Need & Important of capital structure
➢ Scope of the study 1-13
➢ Objective of the study
➢ Research Methodology
❖ Data Collection
a. Primary Data
b. Secondary Data
➢ Limitations of the study
2. PROFILES
➢ Industry profile 14-25

➢ Company profile
3. THEORETICAL FRAMEWORK 26-39
4. DATA ANALYSIS & INTERPRETATION 40-60
5. PFINDING, SUGGESTIONS & CONCLUSION 61-66
6. ANNEXURE 67
Bibliography
FINANCIAL STATEMENT ANALYSIS
CHAPTER-I
INTRODUCTION
Dr KV Subba Reddy School of Business Management Page 1

CHAPTER-I
INTRODUCTION
Financial Analysis is the process of identifying the financial strengths and weakness of
the firm by property establishing relationship between the items of the Balance sheet and
the profit and loss account. There are various methods or techniques used in analyzing
financial statements, schedule of change in working capital, flow and analysis,cost
volume profit analysis and ratio analysis.
MEANING & CONCEPT OF FINANCIAL ANALYSIS :

The term “FINANCIAL ANALYSIS” is also known as analysis refers to the
process of determining according to Metcalf and tutored is a process of evaluating the
relationship between components parts of a financial statement to obtain a better
understanding of a firm‟s position and performance. In the words of Mayer‟s “Financial
Statements analysis is a largely a study of relationship among the various financial factors
in a business as disclosed by a single set of statements and a study of the trend of these
factors as shown
in a series of statements”.
The purpose of Financial Analysis is to diagnose the information contained in

financial statements so as to judge the profitability and financial soundness of the firm. The
analysis and interpretation of 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 comings, ability to pay interest and debts moralities (both current and long term)
and probability of a sound dividend policy.
The Important stages are involved in the Accounting work are:
1. Analysis of each and every transaction to ascertain the amounts involved and also the
Accounts to be debited and credited.
2. Journalisation, posting to Ledger Accounts and the preparation of Trial Balance.

3. Preparation of Financial Statements (viz…, Balance Sheet, and Profit and Loss
Account or Income Statement) ; and
4. Analysis and Interpretation of Financial Statements.
Analysis and Interpretation of Financial Concepts are essential ideas which permit
the identification and classification of phenomena of other ideas. Financial Statements are
interpreted as those statements which show both the performance and the financial position.
These Financial Statements which are also called Published Reports or Annual Reports.
These Financial Statements include balance sheet, income statement, funds statement, or
any supporting statement or other presentation of financial data derived from accounting
records.
Income Statement or Profit and Loss Account is a statement which shows, in

summary form, the revenues and expenses of a business entity for an accounting year. It
shows the sales revenue, cost of sales, gross profit, operating expenses, operating profit,
non-trading income and expenses, net income or loss, appropriations, tax liability, etc. In
brief, the Profit and Loss Account presents information about the result or outcome of
business operations during an accounting year by matching expenses incurred during an
accounting year against the revenue earned in that year.
NATURE OF THE FINANCIAL STATEMENT:

Financial Statements reflect a combination of recorded facts, accounting
conventions, and personal judgments, and the judgments and conventions applied affect
(and their contents) are influenced by these factors.
1. Recorded Facts: It may be remembered here that the preparation of Financial statement
is made on the basis of Trial Balance which in turn is prepared on the basis of balances in
various Ledger Accounts. As is known, Ledger Accounts are prepared by posting Journal
Entries. Recorded facts here denote the figures recorded in Journal books, Ledger Accounts
and Trial Balance. The Financial Statements are prepared on the basis of entries in these
books of accounts. Any figured which does not find place in the books of accounts is
usually not taken to the Financial Statements.
2. Generally Accepted Accounting Principles (GAAPs) : GAAPs are in the form of
guidelines and/or rules which are to be used as standards for recording business
transactions in the books of accounts and their fair presentation in the Financial Statements.
Because, the Financial Statements have to be prepared in conformity with the GAAPs.
These (i.e., GAAPs) include Principles, Concepts, Conventions and assumptions or
Postulates. Consequently, the figures in the Financial Statements are influenced by the
GAAPs.
3. Personal Judgments: For a few number of important accounting problems, Accounts

find a number of alternative solutions, each being considered by the competent authorities
as based on sound principles. For instance, a number of methods are available for
computing the annual depreciation. The amount of depreciation (and therefore, the cost,
profit, written-down value of asset, etc..,)
OBJECTIVES OF FINANCIAL STATEMENTS:

The following are the important objectives of Financial Statements:
1. To provide adequate information about the financial performance and the assets-
Liabilities position of the entity;
2.To provide useful information which can gainfully be utilized to predict, compare and
Evaluate the entity‟s earning capability;
3. To provide sufficient information which can be utilized by both the internal and the
External parties to predict compare and evaluate the financial soundness of the entity.
They should also enable the parties to predict, compare and evaluate the potential
Funds in terms of amount, time and associated uncertainty:
4. To provide required information to enable the users of Financial Statements to evaluate
the ability or performance of managerial personnel to utilize the company‟s resources
for the purpose of accomplishing the primary corporate objectives.

5. To provide information primarily to those who have limited authority or resources to
Obtain the required information. That means, to provide information to those who
Depend only on the Financial Statements for information.
TYPES OF FINANCIAL ANALYSIS:
We can classify various types of financial analysis into different categories

depending upon. The Material used the methods of preparation followed in the analysis or
the modus operand of analysis.
ON THE BASIS OF MATERIAL USED:
According to Material user, financial analysis can be of types.
1.External Analysis
2. Internal Analysis
1. External Analysis:
This analysis is done by outsiders who do not have access to the detailed internal
accounting records of the business firm. These outsiders include investors, potential
investors, creditors, government agencies credit agencies and the general public.
2. Internal Analysis:
The analysis conducted by persons who have access to the internal accounting records of
a business firms is known as internal Analysis.
On The Basis Of Modus Operand:
Accounting to the method of operation following in the analysis financial analysis can also
be of two types.
1. Horizontal Analysis.
2. Vertical Analysis.

1. HORIZONTAL ANALYSIS:
Horizontal analysis refers to the comparison of financial data of a company for

several years. The figures for this type of analysis are presented horizontally over a
number of columns. The figures of the various years are compared with standard or base
year. This type of analysis is also called as “Dynamic Analysis “ comparative Statements
and trend percentages are 2 tools employed in horizontal analysis.
2. VERTICAL ANALYSIS:
Vertical analysis refers to the study of the various items in the financial statement of one
accounting period. It is also known as “Static Analysis” common size financial statements
and financial ratios are two tools employed in vertical analysis.
COMPARATIVE STATEMENTS:
The comparing statements are statements of the financial position of different periods of
the time. The elements of financial position similarly comparative figures with indicate the
trend and direction of financial position and operating results. The 2 comparative
statements are:
1. Balance sheet
2.Income Sheet
The analysis should be within the principles and postulates of accounting. The person
preparing the statements should know the plans and policies of the management so that he
may be also find out whether these plans are properly executed or not..
The extent of analysis should be determined so that the sphere of work may be decided.
The financial data given in the statement should be recognized and rearranged.
A relationship is established among financial statements with the help of tools and
techniques of analysis such as ratios, trends, common size, funds flow etc., the information
is interpreted in a simple and understandable way. The conclusions drawn from
interpretation are presented to the management in the form of reports.
1. COMPARATIVE BALANCE SHEET:

The comparative Balance sheet analysis is the study of the trend of the same
items, group of items and computed items in 2 or more balance sheets of the same
business enterprises on different dates. The changes in periodic balance sheet items
reflected the conduct of the business. The changes can be observed by the comparison of
the balance sheet at the beginning and at the end of a period and these changes can be of
some help in informing on opinion about progress of an enterprise. The comparative
balance sheets 2 columns for the data of original balance sheet. A third column is used to
show increase and decrease in figures. The fourth column may be added for giving
percentages of increases or decreases.
2. COMPARATIVE INCOME STATEMENT:

The income statement gives the results of the operations of a Business.
Comparative income statement gives an idea of the progress of a business over a period of
time. The changes in absolute data in money values and percentages can be determined to
analyze the profitability of the business. The comparing income statement has 4 columns,
first 2 columns give figures at various items for 2 years, third and fourth columns are used
to show increase or decrease in figure in absolute amounts and percentages respectively.
Recasting financial statements

Investors typically are attempting to understand how much cash the company will generate
in the future and its rate of profit growth, relative to the amount of capital deployed.
Analysts may modify ("recast") the financial statements by adjusting the underlying
assumptions to aid in this computation. For example, operating leases (treated like a rental
transaction) may be recast as capital leases (indicating ownership), adding assets and
liabilities to the balance sheet. This affects the financial statement ratios.
Recasting financial statements requires a solid understanding of accounting theory. Once

the cash flow in future years is projected, a discount rate or interest rate will be applied to
measure the value of the company and its stock or debt.

NEED FOR THE STUDY:
1. Financial analysis is scientific tool. It has assumed an increasingly important rune

as tool for appraising the real worth of an enterprise. Financial analysis helps in
drawing out the complications of what data contained in financial statements.
2. The annual reports statement explains the various sources from which case are
raised and uses to which are put out the balance sheet provides only a stick view of
the business. The operational result provided by the profit & loss A/C is largely
Influenced by the availability of funds needs when required.
3. An analysis annual reports statement helps us in answering questions such as what
the amount of cash is generated from the operation however the fixed asset of an
organization is to know the liquidity of the organization is increased.
Funds flow statement is designed to fill financial blind spots of the operating statement.

OBJECTIVES OF THE STUDY
• To analyze the sources and uses of funds of SREE RAYALASEEMA
HI-STRENGH HYPO LIMITED LTD.
• To analyze the operating efficiency of SRHH L LTD.
• To analyze the present & past performance of SRHH L LTD.
• To suggest the company the suitable measures if any situation.

SCOPE OF THE STUDY
The scope and period of study is restricted to the following:
1. The scope is limited to the operations of only one organization
2. The information obtained from the primary and secondary sources were
Limited to SRHH L LTD
3. To key performance indicators were taken from 2014_2015 to 2018_2019
4. The profit and loss act, the balance sheet was of last five years
5. Comparison analysis was done in comparison of its sister units.

LIMITATIONS OF THE STUDY
1. The information provided in the company annual report is only the data source
available.
2. The information available in Balance Sheet, Profit and Loss Account has taken
from published annual reports so it has its only limitations.
3. The data is taken from accounting reports. Hence all the limitations applicable to
accountancy does apply to this project.
4. The data collected of 5 years only.
5. The data used in the study have been taken from published Annual reports only.
6. The study is conducted for a limited period .during this the study may not be
full-fledged & utilization in all aspects.
7. A single ratio usually does not convey much information to make better
interpretation.

RESEARCH METHODOLOGY:
SOURCES OF THE DATA:
To data collected from the following sources:
1. Primary data
2. Secondary data
Primary data collection:
The information collected directly without any reference is primary data. In the study
it is through conversation with concerned offers or staff members either individually or
collectively.
The data includes:
1. Conducting personal interviews with the offers of the company
2. Individual observation and reference.
3. From the people who are directly involved with the business transactions of the
firm.
Secondary data collection:
The data of SRHHL LTD from the year 2012-13 to 2016-17 used in this study
have been taken from secondary source e.g. published annual reports of the company.
Editing classification and tabulation of the financial data, which are collected from the
above mentioned sources, have been as per the recruitment of the study.
DESIGN OF THE STUDY:

Working capital management is of vital importance to an organization like
SRHHL LTD deals with its customers like state electricity boards, private industry and
public sectors. Even though its internal resources for diversification and for expansion

projects supports most of its working capital requirements they have designed working
capital management by keeping the nature of the industry and its product lifecycle.
The design of study is as follows :
1. Streamlining of cash inputs.
2. Forecasting of material requirements
3. Keeping the tracks of systems of centralize cash collections.
4. Computerized bill passing system and customer payment schedule.
5. Existing inventory procurement system for both indigenous nature and import
Consignment.

CHAPTER-II
INDUSTRY PROFILE
&
COMPANY PROFILE

CHAPTER-II
INDUSTRY PROFILE&COMPANY PROFILE:
Caustic soda and Chlorine are the two basic products widely used in the chemical
Industry in India. Either as raw material of as auxiliary chemical caustic soda is mainly
used in the manufacture of pulp & paper, news print, viscose, yarn, staple fire, aluminum,
cotton, textile, toilet and laundry soaps, detergents, dyestuffs, drugs and pharmaceuticals,
vanaspathi, petroleum refining etc., chlorine is used in the manufacture of Poly Venyl
Chloride (PVC), pulp and paper bleaching powder, textiles and host of other Inorganic and
organic chlorinated compounds like metallic chlorides, refrigerants, and chlorinated,
solvents etc. large quantities are used for water purification.
Commercial production of caustic soda in the country started in 1941 with the
commissioning of 25 per day plants, one near Calcutta and the other at Metture Dam in
Tamil Nadu. Process in new capacity installation was rather slow in early years, and till the
early sixities, the requirements were being mostly met through imports, ranging in the
region of 60,000 to 90,000 TPA. Installed capacity increased form 1.40 lak tones in 1990
to 3.9 lakh tones in 2003. Nothing cleans like chlorine From laundry bleach to furniture
polish to antibacterial products, chlorine is a trusted partner in keeping the home clean and
germfree.
Indigenous production also rose sharply: with the result that dependence of imports
was completely avoided since 1970. Today there are 40 caustic soda manufacturing units
in the country. With the total annual installed capacity of 22.72 lakh tones.Which is almost
double the capacity of decade back.
The industry has also been constantly striving to words improved energy utilization
and better environmental protection that is simply proved by the fact energy efficient and
pollution free membrane process technology forms about 66% of total installed capacity in
India today.

Bleaching Powder, white or nearly white powder that is usually a mixture of calcium
chloride hypo chlorite, CaCl (OCI); calcium hypo chlorite, CA(OCI)2; and calcium
chloride, caCl2. Sometimes called chloride of lime, it can be prepared by reaching calcium
hydroxide or slaked lime, Ca(OH)2, with chlorine gas Cl2. It is used as a strong bleaching
agent, as a disinfectant, and in making Javelle water. Bleaching powder was first produced
in 1799 by Charles Tennant in Glasgow, Scotland bleaching powder.
A white powder that decomposes on contact with water and has the characteristic odor of
gaseous chlorine: regarded when dry, as a mixed calcium hypo chlorite chloride, used as
commercial bleach for wood pulp, textiles, oils and soaps, and in laundering as a a
decolorizer and disinfectant.Also called chloride of lime, chlorinated lime, calcium
oxychloride.
The major task facing the caustic chlorine industry now is to increase the gainful utilization
of chlorine in value added products.International levels. The industry growth rate is 5%. A
mess, chlorine-bleached products such as paper towels and napkins often come to the
rescue. Chlorine, which wipes out a board array of micro organisms, bacteria and viruses.

COMPANY PROFILE
Sree Rayalaseema Hi-Strength Hypo Ltd, the torchbearer of the TGV Group is the only
Indian manufacturer of Calcium Hypochlorite. Sree Rayalaseema Hi-Strength Hypo is one
of the very few in the world.
Profile of the company:
The industry by name by the TGV groups were started from 1988 onwards the „TGV‟
groups are having various companies that means this TGV group company are producing
various types of chemical and other type of products.
Vision:
The empower ourselves with excellence and to thus, grow and reach the pinnacle of
market leadership.
Mission:
The provide products and services of international standards through pioneering
innovations, while keeping in sight, our responsibility towards the society we dwell in.
The universal liberalization, privatization and globalization process an initiated by

government of India i.e., 11 years ago has ensured emerges as a strong economic force in

the years to comes India products are finding ready acceptances in the world markets and
the opening up of the economy has made international brands make their presence in India,
this creating are idealistic world without boundaries.
ABOUT INDUSTRIAL
• Sree Rayalaseema Hi-Strength Hypo Ltd. the torchbearer of the conglomerate, and
one of the very few in the world.
• A state-of-the-art technology developed through in-house R&D efforts helps the
company in manufacturing the Sodium Dichloroisocyanurate – SDIC.
• The Certificate of Merit awarded by CHEMEXCIL for outstanding export
performance reinforces its status as a recognized export house.
• Sree Rayalaseema Hi-Strength Hypo Ltd. has a distinctive edge in the manufacture
of this product, thanks to the twin advantages of indigenous raw materials
availability and supply of some specialized chemicals by Sree Rayalaseema
Alkalies and Allied Chemicals Ltd.
• The company is also a front-ranking producer of Monochloro Acetic Acid.
Manufactured by the scientific crystallizer technology, the product meets
international quality standards. Monochloro Acetic Acid is used by all leading
manufacturers of Non-Steroid Anti-Inflammatory Drugs, other pharmaceuticals,
pesticides, organic chemicals etc.

SRAACL was incorporated on 24 June 1981 as public limited Company and
obtained its certificate of commencing of business and 8 July 1981. initially the company
has mooted to set up caustic soda plant with a Capacity of 22440 TPA and started
productions is August‟ 1998. The company is pioneer in INDIA to set up a caustic soda
plant with Bipolar Membrance cell Technology and Increased the install capacity form
22440 TPA to present 69500 TPA of caustic soda Production capacity phased manner.
Later the company ahs diversified into other segments. And now has presence in chemicals.
(Caustic, chlorine, caustic, potash etc), Caster oil Derivatives, Fatty acids consumer
product power generations. The manufacturing facilities. Are located at Gondiparla
Village, Kurnool District. Andhra Pradesh, India along with a Capative power plant
consists of 4 D.G. sets of 6.2 MW each plant of each.
An independent power plant 37.8 MW is situated at Belay District, Karnataka and

India.Sree Rayalaseema Alkalies and Allied Chemicals ltd produces castor oil derivatives,
chloro alkali products and fatty acids. Our product line comprises of ricinoleic acid, stearic
acid, hydrogenated castor oil, potassium carbonate & soap noodles.
Our castic soda is used by aluminium, paper & pulp, pharmacy, soap, textile& rayon
industries.Our liquid chlorine helps in water treatment & paperand is also used by paper
manufacturers. We are accredited with ISO 9002&14001 certification.
A leading producer of chloro alkali products, SRAACL is the flagship company of the
conglomerate. The company also manufactures castor derivative and fatty acid.
It is the unique distinction of being the pioneer of thebi-polar membranes cell technology
from denora ,spain,Italy in India.The company uses state-of –art equipment and upto the
minute technologies including Costruzioni Meccaniche Bernardini (CMB)technology from
ilaly for its fatty acids division. A captive power supply to the manufacturing plant
consistent overseas demands for its products have made the company a recognized export
house today.

PRODUCT RANGE AND APPLICATIONS:
CHLOR –ALKALI PRODUCTS
PRODUCT APPLICATIONS
1.Caustic Soda Aluminium, Paper, Pulp,Pharmacy, Soaps,

Textiles and Rayon Industries
2.Caustis Potash Flakes Dyes, Pharmaceuticals, Food,Liquid
Fertilizersand Potassium Compounds

3.Liquid Chlorine Water treatment and paper
INNOVATION&TECHNOLOGY
• Sree Rayalaseema Hi-Strength Hypo Ltd has involved itself for decades on

research and developments in water treatment and purification.

PRODUCT RANGE AND APPLICATIONS:
CHLOR –ALKALI PRODUCTS
PRODUCT APPLICATIONS
1.Caustic Soda Aluminium, Paper, Pulp,Pharmacy, Soaps,

Textiles and Rayon Industries
2.Caustis Potash Flakes Dyes, Pharmaceuticals, Food,Liquid
Fertilizersand Potassium Compounds

3.Liquid Chlorine Water treatment and paper
INNOVATION&TECHNOLOGY
• Sree Rayalaseema Hi-Strength Hypo Ltd has involved itself for decades on
research and developments in water treatment and purification.

ANALYSIS
• It has constantly raised its standards and today, it serves as the global benchmark
in water purification.
• A state-of-the-art technology developed through in-house R&D efforts helps the

company in manufacturing the Sodium Dichloroisocyanurate – SDIC.
• Sree Rayalaseema Hi-Strength Hypo Ltd. has provided capacitors and also uses
steam for refrigeration to conserve energy.
• The company is also a front-ranking producer of Monochloro Acetic Acid.

Manufactured by the scientific crystallizer technology, the product meets
international quality standards.
PROMOTERS AND MANAGEMENT:
SRAACL was promoted by Sri. T.G.Venkatesh a commerce graduate, who hails from an
industrial family.He is bestowed with rich experience in the art of industrial management.
Since its inception, he bestowed all the devotion and hard work, and Ensured that the
company worked at optimum capacity and post a stellar performance, both in financial and
technical areas.
The management of SRAACL is vested with the Board of directors consisting of

eminent industrial, Bankers and Professionals. The Board is headed by T.G.Venkatesh,
who is charming and managing directors of the company.
2. STRENGTHS OF THE COMPANY:
• Employment of members cell Technology which is cost efficient and Environment

friendly,
• Capital Power supply (including arrangement with A.P. Gas Power Corporation.
Ltd.,).
• Well defined backward integration-assuring supply of raw materials, industrial

salt to an extent of 40% of needs of the company.

ANALYSIS
• Similar forward integration for finished goods. Development of down stream
Industries for better chlorine utilization. Value addition through forward
integration For surplus Hydrogen, steam by setting up castor oil derivatives and
Fatty acids Products manufacturing facilities.
• Export capabilities
• Recipient of ISO 9002 ISO154001, IS – 2888 AND OHSAS 18001 systems

Certification.
BOARD OF DIRECTORS:
The constitution of the Board of Directors of the company consists of the following
persons.
• Sri T.G.Venkatesh - Chairman and Managing director
• Sri M.P.Murti - Director
• Sri D.S.PRASAD - (nominee of IDBI) Director
• Sri R.K.Chavali - Director
• Sri S.K.Ganguli - (nominee of IFCI) Director
• Sri P.N.Vedanarayanan - Director
• Sri G. Krishna Murthy - Director
• Sri O.D.Reddy - Director
• Sri V.Radhakrishna Murthy - Sr.G.M & Company Secretary
THE GROUP PROFILE OVERVIEW:
The companies head the TGV GROUP companies with an asset base of Rs.750 crores.

ANALYSIS
SREE RAYALASEEMA ALKALIES & ALLIED CHEMICALS LTD:
SRAACL was incorporated on 24 Jan 1981 in the state of A.P. & Certificate of
commencement of business was obtained on 8 July 1981. SRAACL was pioneering
venture with bipolar membranes cell technology in tan Indian Alkali Industry. SRAACL,
which is engaged in manufacture of caustic soda, chlorine & hydrochloric acid, is an
existing profit marking & dividend paying Company.
SREE RAYALASEEMA HI-STRENGTH HYP LTD:

SRHHL formerly known as Hitachi. HI-strength Hypo Ltd was incorporated on 24
Oct. 1993 in the state of A.P. and certificate of commencement of business was obtained
on 30 Oct. 1986. The name change has taken place in the year 1993 and bits members at
their annual general meeting on 30th Dec. 1993 have approved the same. SRHHL is
engaged with bleaching powder, sulphuric acid etc.
SREE MARUTHI MARINE INDUSTRIES LTD:

SMMIL formerly as maruthi crystal salt company Ltd was incorporated in 1973 in
the state of Tamilnadu. SMMIL is a joint venture project with TIDCO Chennai Stock
exchange. It was a loss making company. Which was taken over TGV in May 1990. And
it was turned successful profits.
TGV PROJECTS AND INVESTMENTS LTD :

VVPIL formerly had known as VV Tran investments Ltd was incorporated on 12
May 1986 in the state of A.P. VVPIL is engaged in the manufacture of Chlorinated paraffin
& hydrochlorie acid. VVPIL is also engaged in the hire purchase and investments. A 3-Star
Hotel with a commercial complex of 200 shops located in the hear of the Kurnool is a unit
of the company.
BRILLIANT INDUSTRIES LTD:
Brilliant industries formerly known as brilliant investments Ltd was incorporated
on 1st Feb 1998 in the state of A.P. BIL is also engaged in the investments in bottling and
sale of hydrogen gas. BIL is engaged in investments, hire purchase, leasing etc. BIL is
category merchant banker with branch offices at Bangalore, Mumbai, Chennai and Delhi.
The bulk drug project of the company is under implementation.

ANALYSIS
SREE RAYALASEEMA DUTCH KASENBOW LTD:
SRDKL formerly known as sree bleaching chemicals Ltd was incorporated on 3
Sep 1990 in the state of A.P. SRDKL is engaged in the 29 Manufacture of stable leaching
Powder at its plant located sat Gondiparla, Kurnool.
SREE RAYALASEEMA GALAXY PROJECTS LTD:
SRGPL is a SSI-Exporter engaged in the manufacture of industrial grade non- ferric
alum, commonly known as aluminum sulphate. SRGPL is in its purest form and comes in
fine white powder, and crystalline forms. The company‟s manufacturing capacity
stands at an impressive of 12000 TPA.
SREE RAYALASEEMA AGRO-CHEMICALS LTD:
The company helps as farmers to get better fields by manufacturing agro
Chemicals of proven quality. It is efficiency and the central tobacco research institute by
the Gujarat Agricultural University has certified potency.
THE MOURYA-INN:
The conglomerate has made a successful floral into the hospitality sector, with a
centrally air-conditioned 3-star Hotel. The moray-Inn at Kurnool with 8 grand suites 92
well appointed rooms and conference hall and banquet hall.
TGV INFOSYSTEM LTD:
TGV info system Ltd the division of the illustrated of TGV conglomerate is a
reflection of the change embracing attitude. TGV info systems Ltd has a clear objective of
providing exhaustive and comprehensive software solutions and service.
BRILLIANT SECURITIES LTD:

BSL is a member of NSE and Bangalore stock exchange has made a public issue of Rs.250
Lakhs in March 1996. BFL l is engaged in corporate investments and other financial
services.

ANALYSIS
AWARDS

ANALYSIS
CHAPTER-III
THEORITICAL FRAME WORK
LITERATURE REVIEW

ANALYSIS
CHAPTER-III THEORITICAL FRAME
WORK
FINANCE:
“Finance is the provision of money of money when it is required.”
“Finance is the process of accumulated funds to productive funds to productive use.”
“Finance has aptly been called the science of money.”
“Finance may be defined as that administrative area or set of administrative functions in

an organization which relate with the arrangement of cash and credit, so that the
organization may have the means to carry out its objective as satisfactory as possible.”
Smith and Ashbume define „Financial Statements‟ as the end product of Financial
Accounting in a set of Financial Statements prepared by the Accountant of a business
enterprise that purport to reveal the financial position of the enterprise, the result of its
recent activities and an analysis of what has been done with earnings.
Financial Statements, according to John N.Myer, provide a summary of the accounts of a

business enterprise, the Balance Sheet reflecting the assets, liabilities and capital as on a
certain date and the Income Statement showing the results of operations during a certain
period.
FINANCE FUNCTION:
“Finance function is the procurement of funds and their effective utilization for usiness”.
CLASSIFICATION AND DESCRIPTION OF FINANCE FUNCTION:
1. Establishing Asset Management Policies.
2. Determining the allocation of net profit.
3. Establishing and controlling cash flows and requirements.
4. Deciding upon needs and sources of new outside financing.

ANALYSIS
5. Checking upon financial performance.
FINANCIAL ANALYSIS:
“Financial analysis is the process of evaluating the relationship between component parts
of financial statements to obtain a better understanding of the firm‟s position and

performance.”
“Financial analysis is the process of identifying strength and weakness of the firm by
properly establishing relationship between the items of Balance Sheet and the Profit and
Loss Account.”
FINANCIAL STATEMENT:
“A financial statement is an organized collection of data according to logical and

consistent accounting procedures. Its purpose is to convey an understanding of some
financial aspects of a business firm. It may show a position at a movement of time as in the
case of a balance sheet, or may reveal a series of activity over a given period of times, as
in the case of an income statement.”
TYPES OF FINANCIAL STATEMENT:
1. Income statement (also termed as Profit & Loss Account)

It explains what has happened to a business as a result of operations between two balance
sheet dates.
2. Balance sheet
It is a statement of financial position of a business at a specified movement of time.
Statement of retained earnings.
The term retained earnings means the accumulated excess of earnings over losses and
dividend.

ANALYSIS
Statement of change in financial position:
• Changes in the firm‟s working capital
• Changes in the firm‟s cash position
• Changes in the firm‟s total financial position
TECHNOLOGIES OF FINANCIAL STATEMENT ANALYSIS:
• Ratio Analysis
• Comparative Statement Analysis
• Comparative Balance Sheet
• Comparative Income Statement
• Common Size Statement
• Common Size Balance Sheet
• Common Size Income Statement
TYPES OF ANALYSIS AND INTERPRETATION:
Methods, Techniques or Tools of Analysis and Interpretation:
In order to analyze and interpret the data in the Financial Statements, the analysts may
use any one or more of the following five methods or tools.
1. Comparative Financial Statements
2. Common-size Statements
3. Trend Analysis
4. Ratio Analysis
5. Cash Flow and Funs Flow Statements.

ANALYSIS
1. TREND ANALYSIS:
The financial statements may be analyzed by computing trend of services of

information. This method determines the direction upwards or downwards and involves
the computation of the percentage relationship that each statement item bears to the same
item in base year. The information for a number of years is taken up and one year generally
the first year is taken as a base year. The figures of the base years taken as 100 and trend
ratios for other years are calculated on the basis of base year.
2. COMMON-SIZE STATEMENT:
The common size statement can be used to compare companies of different size. The
comparison of figures in different periods is not useful because total figures may be
affected by a number of factors. The common size statements, balance sheet and income
statement are shown in analytical percentages.
The common size statements are of 2 types, they are
1) Common Size Balance Sheet.
2) Common Size Income Statement.
3. RATIO ANALYSIS:
The Ratio Analysis is one of the most powerful tools of financial analysis. It is the
process of establishing and interpreting various ratio. It is with the help of ratio that the
financial statements can be analyzed more clearly and decision made from such analysis.
A ratio is a simple arithmetical expression of the relationship of one number to another. It
may be defined as the indicated quotient of 2 mathematical – expression. According to
accountant‟s hand book Wixonkell and Bedford a ratio “is an-expression of the
quantitative relationship between two numbers”. According to cholera a ratio is “the
relation of the amount a to amount a to amount b”. And it is expressed as a to b (a:b), or as
a simple fraction, integer, decimal, fraction, percentage. It is only a means of affirm.

ANALYSIS
4. FUND FLOW ANALYSIS:
The funds flow statement is a statement which shows the movement of funds and
a report of the financial operations of the business undertaking, it indicate various means
by which funds were obtained during a particular period and the way in which these funds
were employed. In simple words, it is a statement of sources and applications of funds. The
term flow means movement and includes both inflow and outflow. The term Flow of
Funds” means transfer of economic values from one asset f equity to another. The “Flow
of Funds” occurs when a transaction changes on the one hand on current account and on
the other a current account and
DEFINATION:
C.W.A in Glossary of Management According terms defines funds flow statement as a
“Statement prospective or retrospective, setting out the sources and application of the
funds of an enterprise.
5. CASH FLOW ANALYSIS:
Cash flow statement which describe the inflow (sources) and and each equivalents in an
enterprise during a specified period of tie. Such statements enumerate net effects of the
various business transactions on each cash and its equivalents and takes into account
receipts and disbursement of cash.
WORKING CAPITAL MANAGEMENT:

Working capital represents finance needed by industrial units for their day-to-day expenses.
It stands of investment in raw materials, work-in-progress, finishing goods and receivables,
which are termed as chargeable current assets. Working capital comes into business
operation when actual operation taken place.
Generally, the requirements of quantum of working capital is determined by the level of

production. Which depends upon the management‟s attitude towards „risk‟ and the
factors that influence the amount of cash, inventories, receivables and other current assets
required to supports a given volume of production, risk is understood in the sense of the

ANALYSIS
probability of bearing unfavorable results on accounts of not maintaining sufficient current
assets to meet all the financial obligations as they mature and to support the proper level
of sales.
With regards to working capital management, Finance manager has to take three decisions,
namely:
1. The level of current assets.
2. The structure/composition of current assets.
3. The financing of current assets.
Working capital management is concerned with the problems that arise in attempting to
manage the current assets and current liabilities and inter-relationship between them.
Current assets are those which can be converted into cash within a period of time without
undergoing any charge in its value or without affecting the operations of any firm. Current
liabilities are those liabilities, which are intended to be paid within a year out of the current
assets or the firm earnings.
The main aims of working capital management are to manage the current assets
and current liabilities in such a that a satisfactory level of working capital is maintained.
This is due to the fact that of working capital management of the firm is in efficient; it is
likely to become insolvent or even may be forced to bankruptcy. The current assets
should be large enough to cover its current liabilities to ensure a reasonable margin of
safety.
Working capital is probably the most often used financial management concept verbally
and misused practically. Literally, no organization can exist with out the existence of
working capital. Independent of nature of an organization is constitution and activity
requires working capitl.

ANALYSIS
DEFINITION OF WORKING CAPITAL:
Working capital refers to amount of capital which is readily available in the

organization. It stands for that part of capital, which is required for financing the current
needs of the company. Working capital difference between resources in cash or readily
convertible into cash i.e. current assets and organizational commitment for which cash will
soon be required i.e. current liabilities.
Working capital = current assts – current liabilities
URRENT ASSETS:
Current assets are those assets which in the ordinary course of business cab are converted
Into cash within one year without undergoing a diminution in value and without disrrupting
the operations of the firm.
The major current assets are:
1. Liquid assets (cash and bank deposits)
2. Inventory (Raw materials, work in progress, and finished goods)
3. Marketable securities
4. Accounts receivables
5. Debtors
URRENT LIABILITIES:
Current liabilities are those liabilities which are to be paid with in a year i.e in the ordinary
course of business.
The major current liabilities are:
1. Bank over draft
2. Out standing expenses
3. Bills and accounts payable
4. Creditors
ANALYSIS
5. Other short term liabilities
CONCEPTS/DEFINITIONS OF WORKING CAPITAL:
There are two concepts of working capital, namely:
1. Gross working capital
2. Net working capital
The term, Gross working capital is synonymous with working capital management,
Which means the total current assets.
The term, Net working capital can be defined into two ways:
• The most common definition is the difference between current assets and current
liabilities.
• Net working capital can also be defined as that portion of firm‟s current assets,
Which is financed with long term funds.
Effective financial management is the outcome, among many other things, of

proper, management of investment of funds in business funds can be invested for
permanent or long-term purpose, such as acquisition of fixed assets, diversification and
expansion of business, renovation or modernization of plants and machinery and research
& development.
Funds are also needed for short-term purpose, i.e., for current operations of the
business, For example, in a manufacturing concern, procurement for raw material, payment
of wages, general expenses. All the goods so manufacturing in a given time period, may
not be sold in that time frame itself.
Hence, some goods remain in stock, like raw materials, semi-finished goods,
finished marketable goods, etc. Funds are thus blocked in various types of inventory.

ANALYSIS
Every after, sales, may not be necessarily be cash sales, even credit sales may be present.
It again constitute to blockage of funds.
Working capital refers to a firm‟s investment in short-term assets, viz cash,

short-term securities, debtrs, etc. It can also regarded as that portion if the firm‟s total
capital which is employed in short-term operations. It refers to all aspects of current assets
and current liabilities. In simple terms working capital is the investment needed or day-to-
day operations.
It is concerned with management of current assets and current liabilities and the
interrelationship that existed between current assets and current liabilities. Its objective is
to maintain satisfactory level of working capital.

ANALYSIS

ANALYSIS
LITERATURE SURVEY
B.Nimalathasan & Valeriu Brabete 7 have pointed out capital structure and its impact
on profitability by a study of listed manufacturing companies in Sri Lanka. The analysis of
listed manufacturing companies shows that dept-equity ratio is positively and strongly
associated to all profitability ratios (Gross Profit, Operating Profit & Net Profit Ratios).
The proportion of the debt-equity in the capital structure is also fairly esponsible to design
the financial structure of the firms to a greater extent.
Anand Pandey 8 tested the efficiency level of the three popular stock Indices of Indian
Stock Market using the Runs Test and the Autocorrelation Function of ACF. It is found
from the Autocorrelation and Runs Test that the time series of stock indices in the Indian
Stock Market were biased random time series. It is the attitude that is well addressed
amongst the financial researchers to set a new horizon on the investment pattern, that
redefine the company financial pattern.
Kin-Yip Ho and Albert K C Tsui 9 probed the applicability of volatility behavior of

aggregate indices to the sectoral indices. The study doubted the leverage effects of equity
returns and also it‟s bearing on the strategy of portfolio diversification among various
sectors. This also raised a possible question mark on the impact of capital structure on the
financial framework in the long-run as because the growth factor is always subject to
forecast with uncertainity.
Tasneem Alam and Muhammad Waheed 10 investigated the monetary transmission

mechanism in Pakistan at the sectoral level. The study assessed whether the reform process
achieved notable impact on the monetary transmission mechanism or not. The study found
that there was significant change in the transmission of monetary stock to real sector of the
economy during the post-reform period.
Mufeed Rawashdeh and Jay Squalli 11 tested market efficiency across the four sectors,
namely, Banking, Industrial, Insurances and Services in the Amman Stock Exchange
(ASE). The study found that the random walk and weak form efficiency hypotheses were
rejected for all sample sectors. Besides, the returns of mean values were highly volatile

ANALYSIS
and over inflated stock prices and frequent market corrections formed a bubble effect. It
indicates that investment in all sectors of the ASE may be very risky in the short run.
Chin Wen Cheog 12 investigated the weak form market efficiency by using daily return of
nine sectoral indices in Malaysian Stock Market. These empirical results were in sharp
contrast with the traditional unit root test which ignored the economic crisis and currency
control. The study found that the sectoral indices of Malaysian Stock Markets were
inefficient weak-form (except the property index).
Financial performance analysis is vital for the triumph of an enterprise. Financial

performance analysis is an appraisal of the feasibility, solidity and fertility of a business,
sub-business or mission. A rich literature has tackled the issue of how the mix between
internal and external funds is linked with firm real performance.
Almeida H Campello and M. & M. Weisbach 14 have observed that the availability of
internal liquidity is a key parameter of firms‟ ability to invest and accomplish the desired
expansion plans. Companies need not to seek the assistance of external financing source
as it always has a higher cot to the capital, thereby adversely affecting the profit and
profitability of the firm. In continuance and contrary to the above literature, Jenson 15 has
rightly pointed out that external debt can be considered as an effective way to reduce the
agency cost problems that may lead to the under-performance of firms. So, confusions
emerge in between internal and external source of financing to reach at a judicious
managerial decision.
In the views of Flkender and Petesen 16 the dependence of investment on cash or debt
largely depends on whether the firm is facing an income shortage or, conversely, a high
income state. The authors highlight that there is interplay between firms‟ cash and debt
policies as cash holdings have a significant effect on financing capacity and investment
spending in low cash-flow states, while debt reductions are a particularly effective way of
boosting investment in high cash-flow states.

ANALYSIS
Ralf Elsas and David Florysiak 17 write this paper with the aim of evaluating and
summarizing capital structure in German firms and indicate that even with the passing
of 50 years from primary study of Lara and Mesquita yet choosing optimal and ideal
capital structure isn‟t possible and is the main challenge of researchers. In this study
equity is as a positive and effective factor on capital structure and long term debt shows
the reverse position as compared to that.
Vishnu and Nageswara 18 clearly show that according to empirical evidence there is
a relationship between industrial pricing and type of industry with capital structure
and firm‟s performance is in relation to debt ratios of firm. Comparing method of
evaluating firm performance was equal with industry average in which firms was active
and results of this paper also support of reducing avoidable hypothesis cost at emergency
time.
Zeitun and Tian 19 fairly review the relationship between capital structure and firm‟s
performance with the information of 167 Jordan's firm in 1985-2003 and found that there
is a significant relationship between short-run debt ratio to total assets, total debt to total
equity with return of assets. But, the study is silent on the influencing parameter that largely
decides the asset holdings.

ANALYSIS
CHAPTER-IV
DATA ANALYSIS
&
INTERPRETATIONS

CHAPTER-IV
DATA ANALYSIS&INTERPRETATIONS
TABLE-1
Statement showing the in working capital (2014-2015)

RS in Lakhs
2014 2015 Effective on working capital
Particulars (Amount in (Amount in
RS) RS)
Increase Decrease
Current Assets(A)
Inventories 2310.65 2901.89 591.24
Sundry Debtors 3580.70 3609.10 28.4
Cash and Bank 986.46 757.84 276.28
Loans and Advances 2558.36 2913.07 402.36
Total 9436.17 10181.90
Current Liabilities(B)
Sundry Creditors 4248.39 6142.23 1893.84
Provision for Tax 27.37 115.68 88.31
Total 4275.76 6257.91
Working Capital(A-B) 5160.42 3923.99
Net Decrease in WC 1236.43 1236.43
Total 5160.42 5160.42 2258.43 2258.43

Calculation of operating profit for the period (2014-2015)
Particulars Amount Amount

Net Profit 1116.69 --
(+) Depreciation 2475.10
Gross funds generated 359.1.79
(-) Taxation for the year 115.36

Funds from operation 3476.43
Statement of sources & Application of funds for the yea (2014-2015):
Sources RS in lakhs Application RS in lakhs

Increased in 145.91 Secured loans paid 1794.99
unsecured loans (29900.93-
(980.99 – 838.08) 3476.43 31695.92)
Fund form operation Net working capital

2212.32
Decreased in working
capital of
Interpretation:
Funds from operation is increased from the table funds flow during the period 2014-
2015 amount lakhs 3476.43. In the total funds 59.60% wasreceived from operations.
Regarding the applications of funds 30.76% used for repayment of secured loans & funds
used for working capital purposed constitute 69.23% respectively.

TABLE-2
Statement showing the in working capital 2015-2016

RS in Lakhs
Particulars (Amount (Amount
in RS) in RS)
Increase Decrease
Current Assets(A)
Inventories 2901.89 5269.02 23.67.13
Sundry Debtors 3609.10 4916.20 1307.1
Cash and Bank 757.84 1214.58 456.74
Total 10181.90 14191.99
Total 6257.91 9033.20

Net Increase in WC 1234.48 1234.48
Total 5158.79 5158.79 4130.97 4130.97


Net Profit 2424.31
2715.74
(+)Depreciation
Gross fund generated 262.65 5140.05
(-) Taxation for the year

Net funds generated 4877.4
Statement of sources & Applications of funds for the period (2015-2016)
Increased loans 1066.1 Secured loans paid 1868.69
Funds from
4877.4 Net working captial
operation
5426.88
Decreased in Gross
1352.07
Block
7295.57 7295.57
Interpretation:
It is increased from the table funds flow during the period of 2015-2016 amounts
lakhs (4877.4) in the total funds 66.85% was received from funds operation. Regarding
the applications of funds 25.361% used for repayment of secured loans & funds used for
working capital purpose constitute 74.38% respectively.

TABLE-3

RS in Lakhs
Particulars (Amount in (Amount in
RS) RS)
Increase Decrease
Current Assets(A)
Inventories 5269.02 5648.79 379.77
Sundry Debtors 4916.20 5413.74 497.54
Cash and Bank 1214.58 2656.68 1442.1
Total 14191.99 17480.35
Total 9033.20 12308.84 134.31
Working Capital(A-B) 5158.79 5171.51 84.98
Net increase in WC 12.72 12.72
Total 5171.51 5171.51 3288.36 3288.36


Net Profit 1229.76

Gross fund generated 4162.62
(-) taxation for the year 466.32

3696.3
Net Funds generated
Statement of sources & application of funds for the period (2016-2017):
Funds from 1066.1 Net working capital 5524.58

operation
Secured loans paid
Unsecured loans 412.53 1696.01
(increased)
3111.76
Decreased in gross
block
7220.59 7220.59
Interpretation:
It is decreased from the table funds flow during the period of 2016-2017 amounts lakhs
(3696.3) in the total funds 51.19% was received from fund operation.
Regarding the applications of funds 23.48% used for repayment of secured loans % funds
used for working capital purpose constitute 76.52% respectively.

TABLE-4

RS in Lakhs
in RS) in RS)
Increase Decrease
Current Assets(A)
Inventories 5648.79 7177.31 1528.52
Sundry Debtors 5413.74 5421.19 7.45
Cash and Bank 2656.68 1905.91 750.77
Total 17480.35 18798.07
Total 12308.84 13163.62
Total 5634.45 5634.45 2068.49 2068.49


Net Profit 2460.33

Gross fund generated 5707.61
(-) taxation for the year 2462.47

3255.14
Net Funds generated
Statement of sources & application of funds for the period (2017-2018):

Unsecured loans 328.03 2632.94
Secured loans paid
(increased)
Funds from
3255.14
Operation Net working capital 6254.57
Decreased in gross
block
8887.51 8887.57
Interpretation:
Compared to the previous year‟s net funds generated in the year 2017-2018 is still
Decreased to 3255.14. in the total funds 36.62 was received from the funds operation.
Regarding the applications of funds 29.62% used for repayment of secured loans
% funds used for working capital purpose constitute 70.38% respectively.

TABLE-5

RS in Lakhs
in RS) in RS)
Increase Decrease
Current Assets(A)
Inventories 7177.31 4899.94 2277.37
Sundry Debtors 5421.19 5683.70 262.51
Cash and Bank 1905.91 1622.84 283.07
Total 18798.07 20037.9
Total 13163.62 13342.94
Total 6694.96 6694.96 3912.49 3912.49

Changes in funds from operation:
YEARS RS.IN LAKHS
2014-2015 3476.43
2015-2016 4877.40
2016-2017 3696.30
2017-2018 3255.14
2018-2019 4573.08

6000
5000
4000
3000
2000
1000

Comparative income statement of SRHHL Ltd for the year 2014-2015
Particulars RS in lakhs2014 RS in lakhs2015 Amount incre/decr

Net sales 29600.43 29444.58 +155.55
(-)gross profit 8022.81 10302.63 +2279.82

Cost of goods sold 21577.62 19141.95 (-2435.67)
Other total income 229.35 534.15 (-304.80)
Operating Expenses 1384.32 8982.05 (-75977)
:
Emp. Remuneration
& benefits
Other 2581.64 2516.51 (-65.13)

manufacturer,
administrative &
selling expenses
2606.22 2511.73 (-94.49)
Interest / finance
charges
6572.18 14010.29 +275.62
Profit Before Dep. 3227.12 4593.53 +1366.41
Less Depreciation 2985.63 3657.38 +671.75

243.21 936.15 +694.66
(-) profit before tax 19.39 115.36 95.97
223.82 820.15 596.97
(+)profit after tax 447.08 295.91 -151.18
Surplus from p.y

670.90 1116.69 748.15
Less: extra ordinary 375.00 --- ---

expenses
Net profit 295.90 1116.69 748.15

Interpretation: 2014-2015:
Net sales in the year 2014 amount lakhs (2944.58) has decreased to 0.52% compared with
previous year i.e., 2013. But gross profit has increased to 10302.63 lakhs i.e., 28.41% has
increased.
Operating expenses also decreased to 4.19% which gradually increased total
income level to 132.8%
Respectively net profit decreased to 252.83%.
Comparative Balance sheet as at 31st March 2015
Particulars RS in RS in Amount Incre % of

lakhs2014 lakhs2015 / decr increased/
decrease
Source of
funds : Share
holders funds:
Share capital 8155.09 8641.84 +486.75 +5.96

eqity
8242.30 8438.16 +195.86 +2.37
Reserves &
surplus
31695.92 29900.93 (-1794.99) -5.66
Loans funds :
Secured loans
Unsecured 835.08 980.99 +145.91 +17.47
loans
48928.39 47961.92 -966.47 31.46

Application of
Funds
Fixed assets 372.12.01 37731.50 +519.49 +1.39
Investments 232.86 233.06 (-0.20) +0.08
Current assets 5160.42 3923.99 -1236.43 -23.95
Miscellaneous 6323.10 6073.37 -249.73 -3.94

exp.
48928.39 47961.92 -966.47 29.36

Interpretation- (2014-2015):
The sources of funds i.e., share capital and reserves & surplus increased to 5.96 and 2.37
respectively and secured loans decreased to 5.66
Whereas regarding to the application of funds fixed assets increased to 1.39%
investments 0.08% but the current assets decreased to 23.95%.
Comparative income statement of SRHHL Ltd for the year 2015-2016

Particulars RS in lakhs2015 RS in lakhs2016 Amount incre/decr
Net sales 29444.58 37316.74 +7872.16
(-)gross profit 10302.63 13433.70 +3131.07

Cost of goods sold 19141.95 23883.04 +4741.09
Other total income 534.15 77.96 (-456.19)
Operating Expenses 8932.05 1593.62 -7388.43
:
Emp. Remuneration 2516.51 3346.08
& benefits
Other manufacturer, +829.57

administrative & 2511.73 3059.87 +548.14
selling expenses
Interest / finance
charges
Total expenses 14010.29 8077.53 -5932.76
Profit Before Dep. 4593.53 5991.63 +1398.10
Less Depreciation 3657.38 3921.36 +263.98

936.15 2070.27 +1134.12
(-) profit before tax 115.36 262.65 +147.29

(+)profit after tax 820.79 1807.62 +986.83
Surplus from p.y 295.90 1116.69 +820.79

Less: extra ordinary 1116.69 2924.31 +1807.62
expenses
--- 500.00 +500.00
Net profit 1116.69 2424.31 +1307.62

Interpretation (2015-2016):
Net sales has increased to 26.73% i.e., amount (37316.74) lakhs.II. Gross profit also
increased to 30.39% other incomes decreased to 85.40%.
Operating expenses decreased to 42.34% respectively net profit increased to
117.09%.
Comparative Balance sheet of SRAAC as at 31st March 2015
RS in RS in Amount % of
Particulars lakhs2015 lakhs2016 Incre/decr increased/
decrease
Sources of funds:
Share holders
Funds: 8641.84 8641.84 0 --
Share capital 8438.16 10245.78 +1807.62 21.4
Reserves & surplus
Loan funds: 29900.93 28032.24 (-1868.69) 6024
Secure loans 980.99 2047.09 +1066.10 108.6
Unsecured loans
Total 47961.92 49966.95 2005.03 136.24

Application
of funds 37731.050 39508.09 +1776.59 4.70
Fixed assets 233.06 198.31 +34.75 14.91
Investments 3923.99 5158.79 +1234.80 81.46
Current assets 6073.38 4101.76 (-1971.61) 32.43
Miscellaneous
exp.
47966.95 49961.92 2005.03 83.53
The sources of funds i.e., share capital had not increased it was same compared to
previous year i.e.(2015-2016) reserves & surplus increased to 21.4% . Whereas regarding
to the application of funds – fixed assets increased to 4.70% investments also increased to
14.91% & the current assets also increased to 31.46% apart from miscellaneous expenses
decreased to 32.44%.

Comparative Income statement of SRHHL Ltd for the year ending 2016-2017
Particulars RS in lakhs2016 RS in lakhs2017 Amount

Incre/decr
Net Sales 37316.74 4454.31 +7226.5
(-) Gross profit 13433.70 14764.93 +1331.2

Cost of goods sold 23883.04 29778.38 +5895.34
Other total income 77.96 503.67 +425.71
Operating
Expenses: 1593.62 1871.83 (-278.2)
Emp. remuneration &

benefits 3346.08 4133.56 +787.4
Other manufacturer,
administrative & 3059.87 2924.98 (-134.8)
selling expenses
Interest / finance
charges
Total expenses 8077.53 38664.24 +6695.14

Profit before Dep. 5991.63 6765.61 +773.9
Less: Depreciation 3921.36 3993.84 +72.48

profit before tax 2070.27 2771.77 +701.50
(-) provision for tax 262.65 466.32 +203.62

profit after tax 1807.62 3305.45 +1497.83
(+)Surplus from p.y 1116.69 2424.31 +1307.62

2924.31 4729.76 +1805.45
(-) Transfer to debent 500.00 3500.00 +3500

& general reserve
2424.31 1229.76 (-1194.5)
Net profit 2424.31 1229.76 (-1194.5)

Net sales has increased to 19.36% i.e., (37316.74) lakhs to 44543.31Lakhs gradually
gross profit increased to 9.90% total expenses increased to20.94%. Profit after tax
increased to 82.86% respectively net profit decreased to 49.2%.
Comparative balance sheet of SRHHL for the year 2017
Particulars RS in RS in Amount % of incre/

lakhs2016 lakhs2017 Incre/dec Decrease
Sources of funds: 8641.84 8641.84 0 --
Share holders funds:
10245.78 6589.30 (-3656.48) 35.6
Share capital
Reserves & surplus 28032.24 26336.23 (-1696.01) 6.05
Loan funds: 2047.09 2459.62 +412.53 20.15

Secured loans
Unsecured loans -- 2983.42 2983.42 --
Differed tax liability
Total 48966.95 47010.41 1956.54 6.18

Application of funds
Fixed assets 39508.09 41640.59 +2132.5 5.39
Investments 198.31 198.31 0 --
Current assets 5158.79 5171.51 +12.72 0.24
Miscellaneous exp. 4101.76 ---- 0 --

48966.95 40710.41 1956.54 5.63
Interpretation – (2016-2017)
Regarding the sources of funds – share capital has not increased it was Same form
the two years i.e., 2014,2015 & 2016. Whereas reserves decreased to 35.6%
unsecured loans increased to 20.15%.
Unsecured loans increased to 5.39% &
Whereas application of funds fixed assets increased to 5.39% & the investments were
same not increased another decreased. But current assets increased to 0.24%.

Comparative balance sheet of SRHHL as at 31st March 2018:
Particulars RS in RS in Amount % of incre/

lakhs2017 lakhs2018 Incre/dec Decrease
Sources of funds:
Share holders
funds: 8641.84 8641.84 -- 0
Share capital 6589.30 6589.30 -- 0
Reserves & surplus
Loan funds: 26336.23 23703.29 (-2632.94) 9.99
Secured loans 2459.62 2131.59 (-328.0) 13.3
Unsecured loans 2983.42 4831.74 +1848.3 61.9
Differed tax liability

Total 47010.41 48628.33 1617.92 85.44
Application of funds
Net Fixed assets 41640.59 42795.57 +1154.9 2.77
Investments 198.31 198.31 0 0
Current assets 5171.51 5634.45 +462.9 8.95
47010.41 48628.33 1617.92 11.72
Interpretation – (2017-2018):
Regarding source of funds share capital & reserves & surplus is same Compared
with the year 2016 & secured loans decreased to 13.3%.
Whereas net fixed assets & current assets was increased to 2.77% to8.95%.
Compared to the previous year‟s not funds generated in the year (2016-2017) is still
decreased to 3255.14.
In the total funds 36.62 was received from the funds operation.
Regarding the applications of funds 29.62% used for repayment of secured Loans &
funds used for working capital purpose constitute 7.38% respectively.

Comparative Income statement of SRHHL Ltd for the year ending 2018-2019
Particulars RS in RS in Amount
lakhs2018 lakhs2019 Incre/Decre
Net sales 67998.50 58435.06 (-)9563.44
(-)Gross profit 19362.89 29255.20. 9892.31

Cost of goods sold 48635.61 58202.11 9556.5
Other total incomes 388.55 2897.30 2509.3
Emp
remuneration&benefits 11723,59 10308.40 (-)1415.19
Other manufacturer 6626.93 4953.11 (-)1673.82
Administrative &
selling Expenses
Interest / 3414.59 3418.85 4.26

financeCharges
Total expenses 217.65.11 22858.22 1093.11
Profit before Dep. 8494.02 6255.18 (-)2238.84
Less; Depriciation 3003.98 3293.79
Profit before tax 5490.04 2961.39 (-)2528.65
(-)provision for tax 2462.47 1560.46 (-)902.01
Profit after tax 2730.57 1400.93 (-)1329.64
1229.76 2460.33 2430.57
3960.33 3861.26 (-)99.07
(-)transfer to 1500.00 1000.00 (-)500.00
debentures & general
reserve
2460.33 2861.26 400.93
(Net profit) 2460.33 2861.26 400.93
Interpretation (2018-2019)
Net sales has been decreased to i.e.., 67998.50 (lakhs) to 58435.06 ultimately
gross profit has also decreased 32.11% no hear as other incomes decresed to 33.21%

Calculation of operating profit for the period (2018-2019):
Particulars Amount
Net profit 2861.26
(+) depriciation 3272.28
Gross funds generated 6133.54
(-)Taxation for the year 1560.46
Net funds generated 4573.08
Interpretation 2017–2018:
Compared to the previous year net funds generated in the year 2015-2016 is still ecreased
to 4573.08
Net sales for the year:
YEARS RS IN LAKHS
2015 29444.58
2016 37316.74
2017 44543.31
2018 67998.50
2019 58435.06
Interpretation:
In the year 2014 sales were 29444.58 and the year 2016. There is decrease 29444.58 and
in the year 2019 decrease 58435.06.

Net profits:
YEARS RS IN LAKHS
2015 295.9
2016 1116.69
2017 2424.31
2018 1229.76
2019 2460.33

ANALYSIS
CHAPTER-V
FINDINGS

ANALYSIS
CHAPTER-V
FINDINGS
1. The changes in working capital during the period (2014-2015) 2740.7 lakhs, increased
in 2014-2015 is 3476.043 lakhs, again increased 4877.4 lakhs in the year 2015-2016
.Decresed in the year 2013-14 3696.3 lakhs & it gone decrease still in the year 2017-18
i.e., 3255.14.
2. Increased in funds flow during the period of 2014-2015 is lakhs 2740.7. In the total funds
31.20% was received from funds operation. Regarding the applications of funds 4.7% used
for repayment of secured loans 36.18% used for repayment of unsecured loans and funds
used for working capital purpose constitute 59.07% respectively.
3. Increase in funds flow during the period of 2014-2015 is lakhs 3476.43. In the total funds
59.60%was received from funds operation. Regarding the applications of funds 30.76%
used for repayment of secured loans and funds used for working capital purpose constitute
69.23%respectively.
4. Increase in funds flow during the period of 2015-2016 is lakhs 4877.4. In the total funds
66.85% was received from funds operation. Regarding the applications of funds 25.61%
used for repayment of secured loans and funds used for working capital purpose constitute
74.38%.
5. Increased in funds flow during the period of 2016-2017 is lakhs 3696.3. In the total funds
57.79% laws received from funds operation. Funds used for working capital purpose
constitute 76.52% respectively.6.Regarding the sources equity share increased 99.83% in
the year 2. Reserves was increased to 3.30 but loan was 33.30% total increased assets is
28.87% compared to year 2016.
6. And net sales in the year 27073.43 but increased in the year 2015 i.e., 9.33% & operating
expenses increased 13.13% which leads to decreased in net profit i.e.,33.81%.

ANALYSIS
7. In the year 2014-2015 The sources of funds i.e., share capital not increased it remains
same where as reserves & surplus increased to 21.4% & assets also incrased to 42.34%
which increased surplus (net profit) also.
8. In the year 2016-2017 the sources of fund has not increased i.e., share capital &reserves
also decreased to 35.6% Where as fixed assets increased to 5.39% net sales increased to
19.36%. As the expenses increased to 20.94%. Net profit decreased 49.2%.
9. In the year (2018-2019) there was no increase in the sources of funds. Reserves was
same but loan decresed to 13.3%. Whereas net fixed assets & current assets increased to
2.77 to 8.95%.Sales increased to 52.6% i.e., operating expenses increased to 38.9% & net
profit increased to 100%.

ANALYSIS
SUGGESTIONS
• In order reduce the outside borrowing in the company has to acquire the
• Capital from equity sources. Keeping in view the debt equity is proportion as
normal.
• The liquidity of the company should be improved by maintaining the optimum

urgent assets and liquid assets according to standards norms.
• To improve the financial health of the company and maximizing the time between
the source mobilization and utilization the management must introduced the new
cost saving techniques.

ANALYSIS
CONCLUSION
Up to the present situation SRHHL Ltd., company is in profits from past years to
current year, It shows positive sign. Investors can invest their investment in this company
with confident, but the company must also try for obtaining the additional working capital
from financial institutions to meet its financial requirements.
I really thankful to management of SRHHL Ltd., for doing the project in their
Esteemed Organization where I can gain more knowledge practically.

ANALYSIS
ANNEXURE
Balance Sheet of Sree Rayalaseema Hi
------------------- in Rs. Cr. -------------------
Strength Hyp
Mar
Mar '16 Mar '15 Mar '14 Mar '13
'17
12
12 mths 12 mths 12 mths 12 mths
mths
Sources Of Funds
Total Share Capital 15.49 14.72 14.72 14.72 14.22
Equity Share Capital 15.49 14.72 14.72 14.72 14.22
Share Application Money 4.11 0.00 0.00 0.00 0.67
Reserves 195.44 173.05 156.99 134.58 124.95
Networth 215.04 187.77 171.71 149.30 139.84
Secured Loans 49.67 70.89 66.45 86.11 98.77
Unsecured Loans 1.26 2.16 1.15 1.61 2.19
Total Debt 50.93 73.05 67.60 87.72 100.96
Total Liabilities 265.97 260.82 239.31 237.02 240.80
Mar
Mar '16 Mar '15 Mar '14 Mar '13
'17
12
12 mths 12 mths 12 mths 12 mths
mths
Application Of Funds
Gross Block 314.23 302.16 292.76 275.90 219.51
Less: Accum. Depreciation 132.15 107.50 98.40 75.95 64.13
Net Block 182.08 194.66 194.36 199.95 155.38
Capital Work in Progress 8.48 0.00 5.07 0.00 51.69
Investments 23.56 23.35 23.31 32.07 30.75
Inventories 28.79 22.16 24.80 28.55 21.22
Sundry Debtors 30.52 53.38 35.25 26.37 28.83
Cash and Bank Balance 14.76 5.76 6.11 7.33 5.10
Total Current Assets 74.07 81.30 66.16 62.25 55.15
Loans and Advances 55.85 55.51 69.43 73.06 65.01
Total CA, Loans & Advances 129.92 136.81 135.59 135.31 120.16
Current Liabilities 58.95 66.15 90.21 106.58 89.27
Provisions 19.10 29.69 28.81 23.75 27.91
Total CL & Provisions 78.05 95.84 119.02 130.33 117.18
Net Current Assets 51.87 40.97 16.57 4.98 2.98
Total Assets 265.99 258.98 239.31 237.00 240.80
Contingent Liabilities 2.90 36.81 49.65 61.24 59.83

Book Value (Rs) 136.16 127.59 116.68 101.45 97.84

ANALYSIS
BIBILOGRAPHY
TEXT BOOKS:
I.M.PANDEY, Financial Management, 8th edition Vikas Publishers
KHAN & JAIN , Financial Management, 5th edition (Tata Mc.Graw Hill)
J.MADE GOWDA, Accounting for Managers , 1st edition Himalaya publications.
Prasanna Chandra, Financial Management 5th edition, TMGH publications.
K.Rajeshwara Rao & G. Prasad Accounting & Finance, 9th edition, Jaibarath Publication.
Websites:
www.tgvgroup.com
www.sraacl.com
and Google search.

O Lakshmi Prasanna: With Reference To

Uploaded by

Copyright:

Available Formats

O Lakshmi Prasanna: With Reference To

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

O Lakshmi Prasanna: With Reference To

Uploaded by

Copyright:

Available Formats

-A

TGV Group of company's

Project submitted in partial fulfillment for the award of the Degree

Under the esteemed guidance of

Department of Management Studies

Dept. of Management Studies

This is to certify that the Project Report titled “financial stament

Analysis ”with reference to “TGV Group of company's ”was carried out by O

Signature of the Supervisor Signature of the HOD

Signature of External Examiner

I hereby declare that this Project Report titled “financial statement

analysis ”with reference to TGV Group of companys” submitted by me to

theDepartment of Management Studies, Dr. K. V. Subba Reddy School of

Business Management is a bonafide work undertaken by me and it is not

certificate or published any time before.

I also thank my project guide j SREEDHER , Associate ProfessorDr. K.V. Subba

I would like to thanks the finace Manager, TGV GROUP of company ,

Regd. No: 18JJ1E0040

CHAPTERS Financial stamens analysis PAGE NO

➢ About the Topic

➢ Industry profile 14-25

3. THEORETICAL FRAMEWORK 26-39

4. DATA ANALYSIS & INTERPRETATION 40-60

5. PFINDING, SUGGESTIONS & CONCLUSION 61-66

Dr KV Subba Reddy School of Business Management Page 1

MEANING & CONCEPT OF FINANCIAL ANALYSIS :

The purpose of Financial Analysis is to diagnose the information contained in

The Important stages are involved in the Accounting work are:

Dr KV Subba Reddy School of Business Management Page 2

Income Statement or Profit and Loss Account is a statement which shows, in

NATURE OF THE FINANCIAL STATEMENT:

3. Personal Judgments: For a few number of important accounting problems, Accounts

OBJECTIVES OF FINANCIAL STATEMENTS:

Liabilities position of the entity;

Evaluate the entity‟s earning capability;

Funds in terms of amount, time and associated uncertainty:

4. To provide required information to enable the users of Financial Statements to evaluate

the ability or performance of managerial personnel to utilize the company‟s resources

for the purpose of accomplishing the primary corporate objectives.

Dr KV Subba Reddy School of Business Management Page 4

5. To provide information primarily to those who have limited authority or resources to

Depend only on the Financial Statements for information.

TYPES OF FINANCIAL ANALYSIS:

We can classify various types of financial analysis into different categories

ON THE BASIS OF MATERIAL USED:

According to Material user, financial analysis can be of types.

Dr KV Subba Reddy School of Business Management Page 5

Horizontal analysis refers to the comparison of financial data of a company for

1. COMPARATIVE BALANCE SHEET:

2. COMPARATIVE INCOME STATEMENT:

Recasting financial statements

Recasting financial statements requires a solid understanding of accounting theory. Once

Dr KV Subba Reddy School of Business Management Page 7

NEED FOR THE STUDY:

1. Financial analysis is scientific tool. It has assumed an increasingly important rune

Dr KV Subba Reddy School of Business Management Page 8

OBJECTIVES OF THE STUDY

• To analyze the sources and uses of funds of SREE RAYALASEEMA

HI-STRENGH HYPO LIMITED LTD.