A STUDY ON TRAINING AND DEVELOPMENT

(FACOR ALLOYS LIMITED.)

A project report submitted to J.N.T. University (K) in fulfilment of the
requirements for the award of the degree of
Master of Business
Administration
Submitted by
MIRIYALA PRAMOD
Regd.No: 22C1E0049
Under the guidance of
CH. Trinadha Rao. MBA, (Ph.D)

MIRACLE SCHOOL OF MANAGEMENT

MIRACLE EDUCATIONAL SOCIETY GROUP OF INSTITUTIONS
(Approved by AICTE & Affiliated to JNTU, Kakinada) BHOGAPURAM,
VIZIANAGARAM
2022-23
 DECLARATION

I hereby declare that this project work entitled “A Study on TRAINING AND
DEVELOPMENT in FACOR ALLOYS LIMITED.
”submitted by me to the J.N.T. University, Kakinada in partial fulfilment for the award of
Degree of MBA is entirely based on my own study is being submitted for the first time and it
has not been submitted to any other university or institution for any degree or diploma.

Place: Bhogapuram Signature of the candidate

Date: MIRIYALA PRAMOD
 MIRACLE EDUCATIONAL SOCIETY GROUP OF
INSTITUTIONS
(Approved by AICTE & Affiliated to JNTU, Kakinada)
BHOGAPURAM, VIZIANAGARAM
MIRACLE SCHOOL OF MANAGEMENT

Mr.CH.Trinadha Rao

CERTIFICATE

This is to certify the project report titled “A Study on Training and

Development in FACOR ALLOYS LIMITED.” is being submitted Miriyala Pramod in
partial fulfillment for the award of the degree of M.B.A has been carried out by his under my
guidance and supervision.

Dr .B. Venkat Rao CH.Trinadha Rao

Head of the department (Project guide)

External Examiner
 ACKNOWLEDGEMENTS

Apart from the efforts of me, the success of this project depends largely on the
encouragement and guidelines of many others. I take this opportunity to express my gratitude
to the concerned that have been instrumental in the successful completion of this project.

I wish to convey my sincere regards to our beloved Principal Dr. A. Arjun Rao garu
for his inspiration, timely help in the official clearances and valuable suggestions throughout
my course.

I wish to convey my sincere regards to our beloved DEAN Sir Dr

.SreenivasBehehara For his inspiration, timely help in the official clearances and valuable
suggestions through out My course.

I am also thankful to our Head of the Department Dr . B. Venkat Rao and all other
faculty members who helped me directly and indirectly for the successful completion of my
project work.

I extended my heartfelt gratitude to my project guide Dr. CH. Trinadha Rao, for his
consistent encouragement, benevolent criticism, inseparable suggestions which were the main
reasons to bring the work to present shape

I wish to express my deep gratitude to the management of FACOR ALLOYS

LIMITED. for giving me the opportunity to do the project on “Training and Development”
for the partial fulfillment of Master of Business Administration.

Finally, I would like to express my deep sense of gratitude to my beloved parents and
my family members for their love and blessings to complete the project successfully.

(Miriyala Pramod)
 INTRODUCTION
Finance is the science of funds management. The field of finance deals with the
concepts of time, money and risk and how they are interrelated. The word “finance” comes
directly from the Latin word finis. Analyzing what Henry Ford once remarked, “Money
is an arm or leg. You either use it or lose it appears simple” but is quite meaningful. It
brings home the significance of money or finance. In any business, the role of money
has hardly altered. A growing concern may need substantial amount of money and
yet it may not be in a position to commence business due to lack of required funds. A
firm’s success and to say the least, its survival depends upon how efficiently it is able to
generate funds, as and when needed.

Finance is defined as the issuance of, distribution of and purchase of liability and equit y
claims issued for the purpose of generating revenue producing assets. These claims are
commonly referred to as financial claims. According to Paul G. Hasings, “finance” is the
management of monetary affairs of a company. It includes determining what has to be
paid for raising the money on the best terms available, and devoting available funds to
the best uses. Financing is the process of organizing the flow of funds so that a business
firm can carry out its objective’s in the most efficient manner and meet its obligations
as they fall due.

Finance holds the key to all activities. The Sanskrit saying “arthahsachivah” which
means, “finance reigns supreme”, speaks volumes for the significance of the finance needed
by an organization. The path of success is greased with money. However, it would not
be proper to pass the entire credit of the success of a business enterprise to finance. It
depends upon how productively money is utilized in the organization. The role of the
financial manager, who is in charge of the organization’s finance, is difficult because
he has to play that role and relate if effectively to the role of the other managers.

An absolute figure does not give any meaning unless it is related with the other relevant
figure. Amount of current liabilities of a company does not tell anything

about solvency position the company. When it is related with current assets amount of the
same company, an opinion about the solvency position of the company can be had. Ratios are
important both in vertically and horizontal analysis. In vertical analysis, ratios help the
analysts to form a judgment whether the performance of the corporation at a point of time is
good, average or poor.

Ratio can be useful to judge financial condition and profitability performance of the
corporation when they are compared. An analysis of ratio gives two types of comparison.
First, a comparison is made between present ratios with past-expected future ratios of the
same firm.

The importance and universally used technique of ratio analysis is not limited merely to the
computation of ratios but to compare the calculated ratios with standard interim and with
other industries i.e., it is a process of determining and interpreting numerically relationship
1
based on financial statements. It is relevant in accessing the performance of a firm. It is
useful for taking the decision by the finance manager. It is helps to access the long-term
financial stability of organization.

Ratio analysis is also useful for knowing the liquidity of the company, operating efficiency
of the firm and overall profitability of the firm. The sickness or weakness of the firm
can be detected through ratio analysis. It is useful for understanding corrective steps for
reducing the weakness.

The present study is undertaken on Ratio analysis with reference to, FACOR ALLOYS Pvt
Ltd, GARIVIDI,SREERAM NAGAR which put the new industrial town of GARIVIDI
SREERAM NAGARsituated near to Vizianagaram, on the east coast of India, become
the first major producer of bulk maizehigh product in the company. It began with a
production capacity of 10000 tonnes per month that met the requirement of the growing
Iron and Ferro industry in India. It was floated in the year 1993 to become the first major
products of the corn product manganese in the country.

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 NEED FOR THE STUDY
 Ratio analysis is a widely used tool of financial analysis. A ratio defined as the
“indicated quotient of two mathematical expression” and relations between two or
more things. A ratio is used as an index or yard sticks for evaluating the financial
position and performance of the firm.
 With the help of relationships conclusions can be drawn regarding the liquidity
position of firm. The liquidity position of a firm would be satisfactory if it is able to
meet its current obligations when they become due.
 Ratio analysis is equally useful for assessing the long term financial viability of a
firm. This aspect of the financial position of borrower of concern to the long term
conditions, security analysts and the present and potential owners of a business.
 Another dimension of the usefulness of the ratio analysis relevant from the view point
of management is that it throws light on the degree of efficiency in the management
and utilization of its assets. The various activity ratios measure this kind of
operational efficiency.
 Unlike the outside parties which are interested in one aspect of financial position of a
firm the management is constantly concerned about the overall profitability of the
enterprise. This is possible if an integrated view is taken and all the ratios are
considered together.Ratio analysis not only throws light on the financial position of a
firm but also serves as a stepping stone to remedial measures. Ratio analysis enables a
firm to take the time dimensions into account. In other words whether the financial
position of a firm is improving or determining over the year.

3
 OBJECTIVES OF THE STUDY

The present study has been undertaken with the following objectives:

 To study the profile of FARRO Industry in India

 To study on the FACOR ALLOYS Pvt.,ltd.,GARIVIDI,SREERAM NAGAR.
 To know the theoretical framework of Ratio analysis
 To study the trends in finance and analyze various elements in financial analysis.

 To calculate and estimate the important financial ratios a part of financial analysis
FACOR ALLOYS Private Limited.
 To give suggestions for better financial performance of the organization.

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 METHODOLOGY
Research methodology is the description, explanation and justification of various methods
of conducting research. It lists out the various steps adopted by the researcher in studying his
research problem along with the logic behind it. Data collection is process of collecting
valuable and reliable information for the purpose of research. The data collected for this
research has been classified in to two categories- Pr imar y dat a and Seco ndar y dat a

Primary data which have been collected through the discussion with the employees,
managers of the organization , and which collected first time and original in character.
Surveys are executed among focus group members through questionnaires, personal
interviews, experiments and observations. Here, the primary data includes discussions with
the personnel of the organization.

Secondary data which have already been collected by someone else and have through
some statistical analysis like journals, magazines, old records, annual reports of the company
and books. The secondary data here includes annual reports of Andhra Ferro Alloys
Corporation Limited, magazines and other reports of the company. The data is collected and
analysed for the years 2017-18 to 2021-22.

5
 LIMITATIONS OF THE STUDY

Though the project is completed successfully a few limitations may be there.

 Since the procedure and polices of the company will not allow to disclose
some confidential financial information, the project has to be completed
with the available data given to us.
 The study is carried basing on the information and documents provided by
the organization and based on the interaction with the various employees of
the respective departments.
 Analysis is limited to the results of organization and not compared to
industry standards.
 Data is limited to the past records of five years period.
 Time is limiting factor
 The scope of gathering data is very less this is due to the
 Time is limit for 2weeks

6
 INDUSTRIAL PROFILE FERRO ALLOYS

Ferro alloys are one of the important inputs in the manufacture of alloys and special steel. They
are used as deoxidizers and alloy additives in the steel manufacturing process. They impart
special properties to steel. The alloys provide increased resistance to corrosion, improve
hardness and tensile strength at high temperature, give wear and abrasion resistance and
increases creep strength, etc. The growth of Ferro-alloys Industry is, thus, linked with the
development of the Iron and Steel Industry, Foundry Industry and to some extent Electrode
Industry. The principal ferro-alloys are chromium, manganese, and silicon. The product series
consists mainly of ferro-manganese, silicomanganese, ferrosilicon and ferro-chrome.

Ferro alloys are classified into two main categories, viz, bulk ferro-alloys and noble
ferroalloys. Owing to high cost of power, Ferro-alloys Industry has not been operating to its
full capacity in India. Ferro-alloys Industry spends 40 to 70% production cost on power
consumption. The power consumption per ton of ferro-alloys production in the country varied
from 3,000 to 12,000 kWh. At present, major portion of the ferro-alloys produced is exported.
Ferromanganese, silicomanganese, ferro-silicon, high carbon ferro-chrome and charge-chrome
are exported after meeting the domestic requirements

Industry, Production, Development and Consumption

As per Indian Ferro-Alloys Producers' Association (IFAPA), the total installed capacity of bulk
ferro-alloys Industry in India is estimated at 5.10 million tons per annum and for noble
ferroalloys it is 50,000 tone’s per annum. The Ferro-alloys Industry was established as an
ancillary industry to cater to the growing needs of the domestic Steel Industry and is spread all
over the country. Most of the ferro-alloys units have been set up in Andhra Pradesh,
Chhattisgarh, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha and West Bengal
because of availability of the raw material as well as uninterrupted electricity supply. Recently,
the Industry has further spread to the North-Eastern Region of India. In Meghalaya, a number
of small units producing ferro-silicon and ferro-silico manganese have come up. The ferro-
alloy units have incorporated the latest technology in order to use non metallurgical grade ores,
both lumps and fines, after necessary beneficiation and agglomeration. The units have also
incorporated an effective pollution control measures in the form of gas cleaning, deoxidizing
and waste heat recovery. BULK FERRO-ALLOYS Bulk ferro-alloys consist of principal

7
alloys, viz, ferro-manganese, silico-manganese, ferro-chrome, charge-chrome and ferro-silicon.
The production of different kinds of ferro-alloys was not received from IFAPA as well as from
other sources. However, the data received from JPC for some of the ferro-alloys as well as
partial coverage from ferro-alloys have been published in IBM's Monthly Statistics of Mineral
Production (MSMP) - March, 2017 & 2018 which is being reproduced in Table-2. It may be
noted that the data coverage in Table-2 is partial and does not reflect the actual production of
ferro-alloys.

Ferro-manganese/Silico-manganese

Ferromanganese is produced as high carbon ferro-manganese with 72-82% Mn, 6-8% C and
1.5% Si, medium carbon ferro-manganese with 74-82% Mn, 1-3% C and 1.5% Si and low
carbon ferromanganese with 80-85% Mn, 0.1-0.7% C and 1-2% Si. Silicomanganese in
combination of 60-70% Mn, 10-20% Silica and about 20% carbon. Manganese in the form of
ferro-manganese is added for hardening and desulphurization of steel. Nav Bharat Ferro Alloys
Ltd, Paloncha, Andhra Pradesh; Chhattisgarh Electricity Co. Ltd, Raipur, Chhattisgarh; Indsil
Energy & Electro Chemicals Ltd, Raipur, Chhattisgarh; IspatGodawari Power &Ispat Ltd.
(GPIL), Chhattisgarh; Monet Ispat Ltd, Raipur, Chhattisgarh; Union Ferro, Raigarh,
Chhattisgarh; Prakash Industries, Raigarh, Chhattisgarh; Tirumala Balaji Alloys Pvt. Ltd,
Raigarh, Chhattisgarh; Vandana Global Ltd, Raipur, Chhattisgarh; SAL Steels Ltd,
Gandhidham, Gujarat; Anjaneya Ferro Alloys Ltd, Mihijam, Jharkhand; Gautam Ferro Alloys
Ltd, Ramgarh, Jharkhand; Shivam Iron & Steel Co. Pvt. Ltd, Giridih, Jharkhand; Sandur
Manganese & Iron Ores Ltd, Sandur, Karnataka; Indusialelectros melt Ltd, Palakkad, Kerala;
Chandrapur Ferro Alloys Plant (formerly Maharashtra Electros melt Ltd), Chandrapur,
Maharashtra; Nagpur Power Ind. Ltd, Kanhan, Maharashtra; Natural Sugar & Allied Ind. Ltd,
Osmanabad, Maharashtra; Adhunik Meghalaya Steels Pvt. Ltd, Bymihat, Meghalaya;
Meghalaya Sova Ispat Ltd, Meghalaya; Shyam Century Ltd, Meghalaya; Tata Steel Ltd, Joda,
Odisha; Bhaskar Shrachi Alloys Ltd, Durgapur, West Bengal; Cosmic Ferro Alloys Pvt. Ltd,
Bankura, West Bengal; Dayal Ferro Alloys Ltd, Ramgarh, West Bengal; Haldia Steels Ltd,
Burdwan, West Bengal; Impex Ferro Tech Ltd, Burdwan, West Bengal; MaithanAlloys Ltd,
Burdwan, West Bengal; Modern India Con-Cast Ltd, Birhampur, West Bengal; Sharp Ferro
Alloys Ltd, Durgapur, West Bengal; Shri Gayatri Minerals Ltd, Bishnupur, West Bengal;
Shyam Ferro Alloys Ltd, Burdwan, West Bengal; and Sova Ispat Ltd, Durgapur, West Bengal
are the major producers of ferro-manganese/silico-manganese.

8
Silico-manganese, a combination of 60-70%manganese, 16-28% silicon and 1.5 to 2.5%
carbon is used as a more effective deoxidizing agent than high carbon ferromanganese in the
production of various types of steels. It is also used as feedstock to produce refined alloys like
medium and low carbon ferromanganese. It consumes around 4,750 to 5,250 kWh power per
ton of silico-manganese produced. Silico-manganese has emerged as a more important alloy
than ferro-manganese. The country, thus, has emerged as a leading producer of silico-
manganese. Silico-manganese was also produced by a number of small-scale ferro-alloy
producers. The total production of ferro-manganese in 2016-17 was about 5,18,000 tone’s
which remained same in 2017-18. Estimated Consumption of ferromanganese was 50,800
tones in 2017-18. The production of silico-manganese (including medium carbon & low carbon
silico manganese) which was about 3,00,625 tone’s in 2016-17 increased to 3,11,326 tone’s in
2017-18. In 2017-18, the total consumption of silico-manganese by all industries has been
estimated at 1,22,600 tone’s in 2017-18.

Ferro-chrome/Charge-chrome

Ferro-chrome when added to steel imparts hardness, strength and augments its stainless
characteristics. Carbon content classifies the ferrochrome alloy into high carbon (6-8%),
medium carbon (3-4%) and low carbon (1.5-3%), although chromium content in all the three
grades is around 60-70%. Around 2.5 tonnes chrome ore with an estimated power consumption
of 4,500 kWh is required to produce one tonne of ferro-chrome. Ferro-chrome is produced by
electric carbothermic reduction of chromite. FACOR Alloys Ltd, Garividi, Andhra Pradesh;
Jindal Steel & Power Ltd, Raigarh, Chhattisgarh; Standard Chrome Ltd, Raigarh, Chhattisgarh;
SAL Steel, Kachchh-Bhuj, Gujarat; Balasore Alloys Ltd, Balasore, Odisha; IDCOL Ferro
Chrome Plant, Jaipur Road, Odisha; Indian Metals & Ferro Alloys Ltd, Therubali, Odisha;
Jindal Stainless Ltd, Duburi, Odisha; Nava Bharat Ferro Alloys Ltd, Dhenkanal, Odisha; Utkal
Manufacturing Services Ltd, Choudhwar, Odisha; Rawat Ferro Alloys, Cuttack, Odisha; Rohit
Ferro Tech. P. Ltd, Bishnupur, West Bengal and Sri Vasavi Ind. Ltd, Bishnupur, West Bengal
are the major ferro-chrome producers. A sizeable quantity is also produced by units in the
small-scale sector. The total production of ferro-chrome/charge chrome in 2016-17 was about
9,44,000 tone’s which remained same in 2017-18. The consumption of ferro-chrome was
estimated at 14,600 tone’s in 2017-18.

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Ferro-silicon

Ferro-silicon contains about 75-90% silicon and minor amounts of iron, carbon, etc. It is
produced by using quartzite, iron ore, coke and electrode paste. Around 1.75 to 2 tone’s
quartzite is required to produce one tone of ferro-silicon. A very high consumption of power,
i.e., 9,000 to 10,000 kWh is required to produce one tone ferro-silicon. It is a powerful
deoxidizing agent and its major applications are in electrical steel used for transformers and
dynamos, alloy steel for tools & automobile valves and in iron casting and mineral dressing.
Ferro silicon is used by the military to quickly produce hydrogen for balloons. For this,
chemical reaction of sodium hydroxide, ferro-silicon and water is utilized. Bharat Alloys &
Energy Ltd, Kurnool, Andhra Pradesh; VBC Ferro Alloys, Medak, Andhra Pradesh; SMS
Smelters Ltd, Lekhi, Arunachal Pradesh; Visvesvaraya Iron & Steel Plant, Bhadravati,
Karnataka; Silical Metallurgic Pvt. Ltd, Palakkad, Kerala; Jayantia Alloys, Meghalaya and
Indian Metals & Ferro Alloys Ltd, Therubali, Odisha are the major producers of ferro-silicon.
Small-scale producers of ferro-silicon are also in operation in Kerala and Tamil Nadu. In
Meghalaya, three units have sprung up that produce ferro-silicon.

The production of ferro-silicon in 2016-17 was about 90,000 tone’s which remained same in
2017-18. The domestic consumption of ferro-silicon in the organized sector was estimated at
23,400 tone’s in 2017-18.

NOBLE FERRO-ALLOYS

Noble ferro-alloys are one of the vital additive inputs required especially in production of alloy
and special steel. Noble ferro-alloys also refer to alloys used in small quantities and are
relatively expensive compared to bulk ferro-alloys. These are used in the production of steel as
deoxidant and alloying agents.

These high temperature alloys impart strength, resistance and stability within a temperature
range from 260 to 1200 oC. These alloys are used generally in turbine engines, power plants,
furnaces, and all pollution control equipment. Noble ferro-alloys include ferro-vanadium, ferro-
titanium, ferronickel, ferro-molybdenum, ferro-tungsten, and ferro-niobium. In India, noble
ferro-alloys are mostly manufactured through aluminon-thermic process.

10
Ferro-nickel

Theconsumption and Production of ferronickel were not reported in the organized sector.

Ferro-molybdenum

There were five important units, namely, Mehra Ferro-alloys, Electro Ferro-alloys Pvt. Ltd,
India Thermit Corporation, Dandeli Steel & Ferro-alloys Ltd and Eastern Metals & Ferro-
alloys Ltd. The all-India production which was 1,459 tone’s in 2015-16 increased to 1,603
tone’s in 2016-17.

Ferro-tungsten

The consumption and Production of ferrotungsten in 2016-17 were not reported in the
organized sector.

Ferro-vanadium

Production of ferro-vanadium in 2016-17 was 1329 tone’s which increased to 1,331 tone’s in
2017-18.

Others

Mishra Dhatu Nigam Ltd (MIDHANI) (A Govt. of India Enterprise), Hyderabad, produced
chiefly cobalt, molybdenum, titanium, and tungsten-based super-alloys.

ENVIRONMENTAL ASPECTS AND FUTURE SCOPE

Studies reveal that depending on the ferro-alloy manufactured, waste generation per day in 35
tpd and 50 tpd ferro-silicon and ferro-chrome plants may be in the following range: Silica
fines: 7 to 8 tones/day Fe-Cr slag (fined boulder): 40 tones/day Charcoal & coke fines: 7 to 8
tones/day To utilize the waste from ferro-alloys industries, a typical Fe-Si or Fe-Cr
manufacturing unit can provide material for 10 small-scale units for manufacturing bricks and
each unit can produce 2,400 bricks per day. Other units which can be set up are board-and-
briquette-making units. The utilization of waste materials for converting them into building
materials will result in bringing down the building material cost, and therefore, lead to
conservation of natural resources like clay and sand.

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Domestic vanadium sludge is used for producing ferro-vanadium by Easel Mining & Industries
Ltd, Gujarat

The implementation of the Kyoto Protocol by the European Union provides significant
opportunities for ferro-alloys industry in India to implement CO2 reduction technologies,
which could be traded in terms of carbon credits. Installation of an electricity generation
facility driven by CO-rich furnace gas is an obvious means by which CO2 saving could be
achieved.

WORLD REVIEW

The major ferro-alloys producing countries were China, South Africa, India, Russia, and Kazakhstan.
Estimated world production of bulk ferro-alloys of chromium, manganese and silicon was about 39.30
million tones produced in 2014. The markets for the bulk alloys like high carbon ferro-manganese,
silico-manganese, ferro-silicon and high carbon ferro-chrome showed varied responses to the
fluctuations in steel and stainless steel production which seem to have influence as per the different
circumstances that prevailed in different markets.

FOREIGN TRADE

Exports

In 2017-18, exports of ferro-alloys increased to 19,55,757 tonnes valued at ` 14,328 crore

from 15,41,794 tonnes valued at ` 10,128 crore in the previous year. In terms of quantity,
exports of ferrosilico-manganese were (42%) followed by ferrochrome (40%), ferro-
manganese (16%), ferro-silicon (1%). The other ferro-alloys together accounted for remaining
(1%) which is negligible of exports in 2017- 18. Exports were mainly to China (13%), Korea
Rep. of, Chinese Taipei/Taiwan & Japan (11% each), UAE (9%), Italy (5%), Iran & Indonesia
(4% each) and Thailand (3%) (Tables-6 to 25).

Imports

Imports of ferro-alloys increased by 16% to 5,44,266 tonnes in 2017-18 from 4,68,245

tonnes in the previous year. In terms of value, the ferro-alloys imports increased to ` 6,616
crore in 2017-18 from ` 5,101 crore in 2016- 17. In terms of quantity, imports of ferrosilicon
accounted for about 35% followed by ferro-nickel (29%), ferro-manganese (23%), ferro-
chrome (7%), charge-chrome (3%), Other ferro-alloys together accounted for remaining 4% of

12
imports in 2017-18. Imports were mainly from Bhutan & Malaysia (17% each), followed by
Indonesia (10% ), China & South Africa (8% each), Russia (5%), Brazil, Japan & Macedonia
(4% each) and Korea,Rep. of (3%)

FUTURE OUTLOOK

Depending on the process of steel making and the type of steel being manufactured, the
requirement of different ferro alloys varies widely.

Indian Ferro-alloys Industry has immense potential and capability to compete in the
international market. On the positive side, India produces some of the finest ferro alloys in the
world. Therefore, Indian ferro alloys are preferred in Europe. Thus, India has very good
opportunity for exports. There is a need to encourage the Indian Ferro-alloys Industry for
setting up captive power plants and also allocate coal linkages for the same. The prospects for
the Ferro-alloys industry are bright provided innovations are made in the process technology &
plant equipment design, and new costeffective product mix is frequented at. India is expected
to show strong growth in usage of steel in the coming years because of its robust economy,
massive infrastructure needs and expansion of industrial production. India is expected to
become one of the leading steel consuming nations in the next decade. In this scenario, the
Ferroalloys Industry estimates that the consumption of Ferro-alloys will increase domestically
and internationally in the coming years. Some of the Ferro Alloy Producers have already gone
for expansion and some new units are coming up As per The National Steel Policy, 2017,
Ferroalloy is a power intensive industry. Hence, captive power generation in the ferro-alloys
plants will be extensively supported. Since the demand for ferroalloys is likely to grow along
with steel production in the country, the industry may be encouraged to set up larger units to
achieve adequate economies of scale. Efforts will be made to provide necessary raw materials
linkages and stable supply of power to grow Ferro-alloys units on priority.

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 PROFILE OF FACOR ALLOYS PRIVATE LIMITED

GARIVIDI, SHREERAMNAGAR

FACOR incorporated in 1955, is one of the India's largest producers and exporters of Ferro
Alloys, an essential ingredient for manufacture of Steel and Stainless Steel. It exports to several
countries like Korea, Japan, Italy, Netherlands, USA, Turkey, China and Taiwan. Today,
FACOR stands synonymous to a name, which employs experience, resources and technical
know-how, not only in technology but in quality as well. Along with strengthening its
industrial activities, which include marketing, production and technology development,
FACOR continuously strives towards creating new products of high technology. Known for its
positive as well as courteous approach, every FACOR venture is a milestone in itself.

Shri Durga prasad ji Saraf our founder, took the initiative and pioneered in manganese ore
mining and thereafter commissioned three submerged electric arc furnaces of 7.5MVA each
in Garividi, Vizianagaram District, 85 KM north of Visakhapatnam in Andhra Pradesh.

Subsequently, Facor commissioned the fourth submerged arc furnace of 12MVA, for
production of HC Ferro Chrome and an open arc slag furnace of 8MVA for production of LC
Ferro Chrome.

Facor indigenously developed its own technology and commissioned the 16MVA submerged
arc furnace for the production of HC Ferro Chrome in 1981.

The Facor has currently an installed production capacity of 72,000 tons per year and
successfully able to operate at beyond 100% capacity utilization, for several years.

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PLANT AND MANUFACTURING FACILITIES AT
SHREERAMNAGAR(A.P):
The plant & office buildings are laid out on a land of approx 90 Acres. The company has
supporting facilities such as 132/11 KV main receiving sub-station and has a sanctioned load
connection of 40 MVA from APEPDCL, Vizianagaram.

The Company has full-fledged facilities for Raw Material Handling, Metal & Slag casting,
Crushing, Sizing and other ancillaries. The furnaces are equipped with individual Bag Filter
type Pollution Control systems in order to maintain a clean environment in and around the
Industry. Continuous monitoring is ensured to control the pollution levels within the limits
prescribed by the Pollution Control Board.

Additionally, required facilities for beneficiation and agglomeration of Chrome Ores, a

mechanized briquetting plant as well as a Metal Recovery Plant to extract the valuable
metallic from slag-metal mixers have also been set up.

Work force at Shreeramnagar (A.P.):

The work force consists of about 99 supervisors and 232 regular employees apart from 303
contractor’s workmen. The movements of employees to the factory are governed
computerized attendance recording system, monitored by Personnel Department. An
emergency control center is maintained at security main gate monitored by security
department to meet all emergencies. The company has been compliant of ISO 9000 series
standards since 1994 and is currently certified as per ISO 9001:2015 standards with effect
from 01/04/2018.

15
PRODUCTS:
A Stringent quality control for raw materials and products is ensured as per the standards,
supported by a full-fledged Inspection and quality control department.

FACOR’s pioneering spirit and vision continued and the Company’s research and
development efforts have brought many laurels to its credit.

FACOR developed various new ferro alloys, Ferro Silicon Magnesium for the first time in
the Country which had a wide acceptance in the foundry industry, thus saving valuable
foreign exchange for the country.

PRODUCTS SPECIFICATION:
STANDARD OF SPECIFICATION OF
HC FeCr SI MN FE MN
Cr 58-62% - -
MN - 60% 75%
SI 4% max 14/15% 1%
C 8.5% max 2% to 2.5% 8%
S 0.05% max 0.05% max 0.05% max
P 0.04% max 0.04% max 0.04% max

CRS ACTIVITIES:
VISION & MISSION:
 Facor is about building, transforming, and giving back to society. Every act of
ours is centered about building something new or bettering something that
already exists. We think beyond just business or our customers.

 We strive to positively impact the lives of our business associates, our customers,
our employees, the communities that we serve and the nations that we operate in.

16
FACOR supported constitution of the following independent societies
under which various welfare & development activities are being made for
the benefit of society:

 Shreeram Vidyapeth

 SmtGodavaridevi Saraf Educational Society

 Woman & Child Welfare Centre

 Lions club of Shreeramnagar Charitable Trust, registered as Trust by Lions Club

of Shreeramnagar

 Shreeram Charitable & Religious Society

 Shreeram Officers’ Welfare society

Facor CSR Activites:

Facor has initiated various welfare activities in Garividi township such as Lions Club of
Shreeramnagar, School for Deaf, Dumb, blind, and mentally challenged children, Woman &
Child Welfare Centre, OEU Lions Eye Hospital, SDS Degree College and SGS High School
and has received awards at various levels in the state for the services rendered.

The commitment to society is evinced in various welfare activities being rendered

periodically either by the company directly, or through its welfare projects or through the
district administration.

FACOR works closely with local mandal and Panchayat and Dist. collectorate in all its
service activities. The welfare schemes such as Family Planning, adult education, blood
donations besides multi-specialty medical camps etc. initiated by the government are always
patronized and supported by the company.

Adequate measures for safe and congenial work environment in the factory have been
provided. Health and Hygiene measures have been taken in terms of drinking water supply,
good canteen facilities, sanitation, well laid out road/drainage facilities etc. Medical care
measures have been taken. Cultural and sports clubs are organized for employees and their
families.

17
The focus areas in terms of CSR initiatives are health, welfare, education, communal
harmony and recreation of the employees and their family members, besides sharing with
outside public in the surrounding area.

ORGANIZIATION STRUCTURE OF FACOR ALLOYS

CHAIRMAN & MANAGING

JOINT MANAGING DIRECTOR

DIRECTOR TECHNICAL

CHIEF EXECUTIVE

GENERAL MANAGER

COMMERICAL DGMP DGMP DGMP

Raw material& products AGMP AGMP General AD MN
JM-SD MI 5
Stores & purchase Production Maintenances Administration
SM:JM , SDM:M M/S M:1
JM-SDM:2
Finance Operation Mechanical Personnel
M/S M:1 FMP M/SM:1 M/S M:1 M/SM:1
JM-SDM:12 JM-SDM:13 JM-SDM:15 JM-SDM:3
E DP Operation-FCP Electrical Security
JM-SDM:2 JM-SDM:14 JM-SDM:11 JM-SDM:4
- Inspection Civil Welfare
M/SM:1 JM-SDM:2 JM-SDM:2
JM-SDM:3
- - - Safety & training
QMS
JM-SDM:2

LEGEND

DCM = Deputy General Manger

18
AGM = Assistant General Manger

SM = Senior Manager

M = Manger

SDM = Sr. Deputy Manager

DM = Deputy Manager

SAM = Sr. Assistant Manager

AM = Assistant Manager

JM = Jr. Manager

WORK FORCE DETAILS:

Commercial Production Maintenance Administration TOTAL

Supervisors 28 32 28 22 110
Retainers 2 1 1 2 6
Workers 21 243 178 21 463
Clerks 24 7 2 10 43
Contract 397 354 109 53 913
Workers
TOTAL 472 637 318 108 1535

19
CONCEPTUAL FRAME WORK OF RATIO ANALYSIS

The traditional financial statements comprising the balance sheet and the profit and
loss account are providing that information related to the financial operations of the
firm. They provide some extremely Users of financial statements can get further
insight about financial strengths and weakness of the firm if they properly analyze
information reported in these statements. Management should be particularly
interested in knowing financial weaknesses of the firm to take suitable corrective
actions. The future plans of the firm should be laid down in view of the firm’s
financial strengths and weaknesses. Thus financial analysis is the starting point for
making plans before using any sophisticated forecasting the past is a pre-requisite for
anticipating the future.
useful information that mirrors the financial position on a particular date in terms of
the structure of assets and liabilities and owner’s equity and so on. The profit and loss
account shows the results of operations during a certain period of time in terms of the
revenues obtained and the costs incurred during the year. Therefore much can be
learnt about a firm from a careful examination of its financial statements.
Ratio analysis is a widely used took of financial analysis. It is used to interpret the
financial statements so that the strengths and weaknesses of the firm as well as its
historical performance and current financial conditions can be determined.
A ratio defined as the “indicated quotient of two mathematical expression and
relations between two or more things” it is a bench mark for evaluation of the
financial position and performance of a firm. The term refers to the numerical or
quantitative relationship between two items, variables. This relationship can be
expresses as:
Percentage, say, net profits are 25% of sales (assuming net profit of Rs.25,000 and
sales of Rs.1,00,000)
Fraction (net profit is 1/4th of sales)
Proportion of numbers (the relationship between profits and sales is)
These alternative methods of expressing items, which are related to each other, are,
for purpose of financial analysis referred to as ratio analysis. It should be noted that

20
computing the relations does not add any information already inherent in the above
figures of profits and sales.
What the ratios do is they reveal the relationship in a more meaningful way so as to
enable us to draw conclusions from them. The rationale of ratio analysis lies in the
fact that it makes related information comparable. A single figure by itself has no
meaning but when expressed in terms of related figure, it yields significant inferences.
For instance, the fact that the net profit of a firm amount to say Rs.10,00,000 throw no
light on its adequacy or otherwise the figure of net profit has to be considered in
relation to other variables. How does it stand in relation to sales? Therefore, net profit
is shown in terms of their relationship with items such as sales, assets, capita
employed, equity capital and so on, meaningful conclusions can be drawn regarding
their adequacy.
To carry the above example further, assuming the capital employed to be
Rs.50,00,000 and Rs.100,00,000 the net profit are 20% and 10% each respectively.
Ratio analysis thus as a quantitative tool, enables analysts to draw quantitative
answers to questions such as; are the net profits adequate? Are the assets being used
efficiently? Is the firm solvent? Can the firm meet its current obligations and so on?

Importance of Ratio Analysis:

As a tool of financial management, ratios are of crucial significance. The importance
of ratio analysis lies in the fact presents facts on a comparative basis and enables the
drawing inference regarding the performance of a firm. Ratio analysis is relevant in
assessing the performance of a firm in respect to the following aspects:

 Liquidity position
 Long term solvency
 Operational efficiency
 Overall profitability
 Inter firm comparisons and Trend analysis

21
Liquidity position:

With the help of ratio analysis conclusions can be drawn regarding the liquidity
position of a firm. The liquidity position of a firm would be satisfactory if it is able to
meet its current obligations when they become due a firm can be said to have the
ability to meet its short term liabilities if it had sufficient liquid funds to pay the
interest on its short maturing debt usually within a year as well as to repay the
principal. This ability is reflected in the liquidity ratio of a firm. The liquidity ratios
are particularly useful in credit analysis by banks and other supplies of short term
loans. Common liquidity ratios include the current ratio, quick ratio and the operating
cash flow ratio.
Long Term Solvency:
Ratio analysis is equally useful for assessing the long term financial viability of a
firm. This aspect of financial position of a borrower is of concern to the long term
creditors, security analysts and the present and potential owners of a business. The
long term solvency is measured by the leverage, capital structure and profitability
ratios, which focus on earning and operating efficiency. Ratio analysis reveals the
strengths and weaknesses of a firm in this respect. The leverage ratios, for instance,
will indicate whether a firm has a reasonable proportion of various sources of finances
of finance or if it is heavily loaded with debt in which case its solvency is expressed
to serious strain. Similarly the various profitability ratios would reveal whether or not
the firm is able to offer adequate return to its consistent with the risk involved. It
includes debt equity ratio, cash coverage ratio, the times interest earned ratio, etc.

Operating Efficiency:
Another dimension of the usefulness of the ratio analysis relevant from the view point
of management is that it throws light on the degree of efficiency in the management
and utilization of its assets. The various activity measures this kind of operational
efficiency.

22
 Overall Profitability:
Unlike the outside parties, which are interested in one aspect of financial position of a
firm, the management is constantly concerned about the overall profitability of the
enterprise. This is they are concerned about the ability of the firm to meet its short
term as well as long term obligations to its creditors, to ensure a responsible return to
its owners and secure optimum utilization of the assets of the firm. This is possible if
an integrated view is taken and all the ratios are considered together.

Inter Firm Comparisons:

Ratio analysis is not only throws light on the financial position of a firm but also
service as the stepping to remedial measures. This is made possible due to inter firm
comparison and comparison with industry averages. A single figure of a particular
ratio is meaningless unless it is related to some standard or norm. One of the popular
techniques is to compare the ratios of a firm with the industry average. A inter firm
comparison would demonstrate the firm’s position vis-à-vis its competitors.

Trend Analysis:
Ratio analysis enables a firm to take the time dimension into account in other words
whether the financial position of a firm is improving on deteriorating over the years.
This is made possible by the use of trend analysis. The significance of trend analysis
of ratios lies in the fact that the analysis can know the direction of movement that
whether the moment is favorable or unfavorable. For example the ratio may be low as
compared to the norm but the trend may be upward. On the other hand through the
present level may be satisfactory but the trend may be declined one.
Limitations of Ratio Analysis:
Ratio analysis is widely used tool of financial analysis. Yet, it suffers from various
limitations. The operational implications of this are that while using ratios. The
conclusions should not be taken on their face value. Some of the limitations which
characterize ratio analysis are:
 Difficulty in comparison
 Impact of inflation and
 Conceptual diversity

23
Difficulty in Comparison:
One service limitation of ratio analysis arises out of the difficulty associated with their
comparability. One technique that is employed is inter firm comparison, but such
comparison vitiated by different procedures adopted by various firms
Difference in basis of inventory valuation (e.g. last in first out, average cost and cost)
Different depreciation methods (e.g. straight line vs. written basis)
Estimated working life of assets particularly plant and equipment
Amortization of deferred revenue expenditure such as preliminary expenditure and
discount on issue of shares.
Capitalization of lease
Treatment of extraordinary items of income and expenditure and so on
Secondly apart from different accounting procedures compliances may have different
accounting procedures. Implying differences in the composition of assets particularly
current assets. For these reasons, the ratios of two firms may not be strictly
comparable.

Impact of Inflation:
The second major limitation of the ratio analysis is associated with price level
changes. This is a weakness of traditional financial statements which are based on
historical cost. An implication of this feature of the financial statements as regards
ratio analysis is that assets acquired at different periods are in effect. Shown at
different prices in the balance sheet, as they are not adjusted for changes in the price
level, as a result ratio analysis will not be strictly comparable.

Conceptual Diversity:
The factor that influences the usefulness of ratios is that there is difference of opinion
regarding the various concepts used to compute the ratios. There is always room for
diversity of opinion as to what constitute share holder’s equity, debt, assets, profit and
so on. Finally, ratios are only a proportion analysis of what has happened between two
balance sheet dates. For one thing the position in the interim period is not revealed by
ratio analysis moreover they give no clue about the future. In brief, ratio analysis
suffers from some serious limitations. The analysis should not be carried away by it’s
over

24
simplified nature, easy computation with high degree of precision. The reliability and
significance attached to ratios will largely depend upon the quality of data on which
they are based. They are as good as the data itself nevertheless they are on important
tool of financial analysis.

Guidelines to use Ratio Analysis:

 The calculation of ratios may not be a difficult task but their use is not
easy. The information on which these are caliber of the analysts, etc
are important factors, which influence the use of ratios.
 Following guidelines/factors may be kept in mind in interpreting
various ratios:
 The reliability of ratio is linked to the accuracy of information in
financial statements. Before calculating ratios one should see whether
proper concepts and conventions are used for preparing financial
statements or not
 The purpose of the user is also important for the analysis of ratios. A
creditors banker, an investor, a shareholder, all has different objectives
for studying ratios. The purpose or which ratios are required to be
studied should always be kept in mind for studying various ratios.
Different objects require the study of different ratios.
 Another precaution in ratio analysis is the proper selection of
appropriate ratios. The ratios should match the purpose for which
they are required.

Limitations of Ratio Analysis:

 Calculating a large number of ratios without determining their need in the
present context may confuse the things instead of solving them. Only those
ratios should be selected which can follow proper light on matter to be
discussed.

25
  Unless otherwise the ratios calculated are compared with creation standards
one will not be reach at conclusions. These standards may be a rule of thumb
as in current ratio (2:1) may be industry standards, may be projected ratios etc.
the comparison of calculated ratios with the standards will have the analysts in
forming his opinion about financial situation of the concern.
 The ratios are only tools of analysis but their interpretation will depend upon
the caliber and competence of the analyst. He should be familiar with various
financial statements and the significance of changes etc.
 A wrong interpretation may create havoc for the concern since wrong
conclusions may lead to wrong decisions. The utility of ratios is linked with
experience of the analyst.
 The ratios are only guidelines for the analyst he should not base his decisions
entirely on them. He should study every other relevant information, situation
in the concern, general economic environment etc before reaching final
conclusion.
The study of ratio in isolation may not always prove useful. The interpretation should
use the ratios as guide and try to solicit any other relevant information which helps in
reaching a correct decision.

Types of Ratio Analysis:

Several ratios, calculated from the accounting data, can be grouped into various
classes according to financial activity or function to be evaluated. As stated earlier,
the parties interested in financial analysis are short-term and long-term creditors,
owners and management. Short-term creditors` main interest is in the liquidity
position or the short-term solvency of the firm. Long-term creditors`, on the other
hand, are more interested in the long-term solvency and profitability of the firm.
Similarly, owners concentrate on the firm’s profitability and financial condition.
Management is interested in evaluating every aspect of the firm’s performance. They
have to protect the interests of all parties and see that the firm grows profitably. In
view of the requirements of the various users of ratios, we may classify them into the
following four important categories:

 LIQUIDITY RATIOS
 LEVERAGE RATIOS
 ACTIVITY RATIOS
 PROFITABILITY RATIOS

26
1. LIQUIDITY RATIOS:
It is extremely essential for a firm to be able to meet its obligations as they become
due. Liquidity ratios measure the firm’s ability to meet current obligations. In fact, analysis
of liquidity needs the preparation of cash budgets and cash and Fund Flow statements; but
liquidity ratios, by establishing a relationship between cash and other current assets to current
obligations provided a quick measure of liquidity. A firm should ensure that it does not suffer
from lack of liquidity, and also that it does not have excess liquidity. The failure of a
company to meet its obligations due to lack of sufficient liquidity, will result in a poor
creditworthiness, loss of creditors` confidence, or even in legal tangles resulting in the
closure of the company. A very high degree of liquidity is also bad; idle assets earn nothing.
The firm’s funds will be unnecessarily tied up in current assets. Therefore, it is necessary to
strike a proper balance between high liquidity and lack of liquidity. The most common
ratios, which indicate the extent of liquidity or lack of it, are:

 CURRENT RATIO

 QUICK RATIO

 CASH RATIO

 NET WORKING CAPITAL RATIO

CURRENT RATIO:

Current assets include cash and those assets, which can be converted into cash within
a year, such as Marketable Securities, Debtors and Inventories. Prepaid expenses are
also including in current assets as they represent the payments that will not be made
by the firm in future. Current Liabilities include Creditors, Bill payable, Accrued
expenses, Short-term bank loan, and Income Tax Liability and Long-term debt
maturing in the current year.

The current ratio is calculated by dividing current assets by current liabilities.

Current Ratio =

The current ratio is a measure of the firms` short-term solvency. The higher the current
ratio, the larger is the amount of rupees available per Rupee of current liability, the more is
the firms` ability to meet current obligations and the greater is the safety of funds of short-
term creditors.

27
QUICK RATIO:

Quick assets or Liquid assets mean those assets which are immediately convertible into
cash without much loss. All current assets except prepaid expenses and inventories are
categorized in liquid assets. Quick liabilities means those liabilities, which are payable
within a short period. Normally, Bank overdraft and Cash credit facility, if they become
permanent mode of financing are in quick liabilities.

The Quick ratio is calculated by dividing quick assets by quick liabilities

Quick Ratio =

As this ratio concentrates on cash, marketable securities and receivables in relation to

current obligation, it provides a more penetrating measure of liquidity than current ratio.

CASH RATIO:
The cash ratio is calculated by dividing cash + marketable securities by current
liabilities.

Cash Ratio =

Since cash is most liquid asset, a financial analyst may examine cash ratio and its
equivalent to current liabilities. Trade investment or marketable securities are
equivalent of cash; therefore, they may be included in the computation of cash ratio.

2. LEVERAGE RATIOS:

The short-term creditors like bankers and suppliers of raw material are more
concerned with the firms` current debt-paying ability. On the other hand, long-term creditors
like debenture holders, financial institutions etc., are more concerned with the firms` long-
term financial strength. In fact, a firm should have strong short-as well as long-term financial
position. To judge the long-term financial position of the firm, financial leverage, or Capital
structure, ratios are calculated. These ratios indicate mix of funds provided by owners and
lenders. As a general rule, there should be an approximate mix of debt and owner’s equity in
financing the firms` assets.

The manner in which assets are financed has a number of implications. First,
between debt and equity, debt is more risky from the firms` point of view. The firm has a

28
legal obligation to pay interest on debt holders, irrespective of the profits made or losses
incurred by the firm. If the firm fails to debt holders in time, they can take legal action
against it to get payment and in extreme cases, can force the firm into liquidation. Secondly,
use of debt is advantageous for shareholders in two ways:

Their earnings will be magnified, when the firm earns a rate of return on the total
capital employed higher than the interest rate on the borrowing funds. The process of
magnifying the shareholders return through the use of debt is called “financial leverage” or
“financial gearing” or “trading on equity”.

Leverage ratios may be calculated from the balance sheet to determine the
proportion of debt in total financing. Many variations of these ratios exist; but all these ratios
indicate the same thing-the extent to which the firm has relied on debt in financing assets.
Leverage ratios are also computed

 DEBT – EQUITY RATIO

 PROPRIETARY RATIO
 INTEREST COVERAGE RATIO
 FIXED ASSETS TO NET WORTH RATIO:

DEBT – EQUIT
The relationship describing the lender contribution for each rupee of the owner’s
contribution is called DEBT-EQUITY RATIO. DEBT – EQUITY RATIO is directly computed by the
following formula.

Debt Equity Ratio =

PROPRIETARY RATIO:
This ratio states relationship between share capital and total assets. Proprietors’ equity
represents equity share capital, preference share capital and reserves and surplus. The
latter ratio is also called capital employed to total assets.

Proprietary Ratio =

INTEREST COVERAGE RATIO:

This ratio indicates the extent to which earnings can decline without resultant financial
hardship to the firm because of its inability to meet annual interest cost. For example,
coverage of 5 times means that a fall in earnings unto (1/5th) level would be tolerable, as

29
earnings to service interest on debt capital would be sufficiently available. This ratio is
measured at follows:

Interest Coverage Ratio =

FIXED ASSETS TO NET WORTH:

This ratio indicates the extent to which Equity capital is invested in the net fixed assets. It is
expressed as follows:

Fixed Assets to Net worth Ratio =

Net Worth is represented by Equity Share Capital plus Reserves and Surpluses. If the fixed
assets are more than the Net Worth, difficulties may arise, as the depreciation will reduce
profit. This also means that creditors have contributed to fixed assets. The higher this ratio,
the less will be the protection to creditors. If this ratio is too high, the firm may find itself
handicapped, as too much capital is tied up in fixed assets but not circulating.

3. ACTIVITY RATIOS:
Funds creditors and owners are invested in various assets to generate sales and profits.
The better the management of assets, the larger the amount of sales .Activity ratios are
employed to evaluate the efficiency with which the firm managers and utilizes its assets.
These ratios are also called Turnover Ratios because they indicate the speed with which
assets are being converted or turned over into sales. Activity ratios, thus, involve a
relationship between sales and assets. A proper balance between sales and assets generally
reflects that assets are managed well. Several activity ratios can be calculated to judge the
effectiveness of asset utilization. Activity ratios are four types.

 INVENTORY TURNOVER RATIO

 DEBTORS TURNOVER RATIO

 FIXED ASSETS TURNOVER RATIO
 WORKING CAPITAL TURNOVER RATIO

INVENTORY TURNOVER RATIO:

Inventory turnover ratio indicates the efficiency of the firm in producing and selling

30
its products. It is calculated by dividing the cost of goods sold by the average
inventory. The average inventory is the average of opening and closing balance of
inventory. In a manufacturing company inventory of finished goods is used to
calculate inventory turnover.

Inventory Turnover Ratio =

DEBTORS TURNOVER RATIO:

A firm sells goods for cash and credit. Credit is used marketing tool by a number of
companies. When the firm extends credits to its customers, debtors (accounts
receivables) are created in the firms` accounts. The debtors are expected to be
converted into cash over a short period and, therefore, are included in current assets.
The liquidity position of the firm depends on the quality of debtors to a greater extent.
Debtors turnover ratio indicates the velocity of debt collection of a firm. In simple
wards it indicates the number of times average debtors are turned over during a year.

Debtors Turnover Ratio =

FIXED ASSETS TURNOVER RATIO:

The fixed assets turnover ratio measures the efficiency with which the firm is
utilizing its investments in fixed assets, such as land, building, plant and machinery,
furniture, etc. It also indicates the adequacy of sales in relation to the investment in
fixed assets. The fixed assets turnover ratio is sales divided by net fixed assets. The
firm assets turnover ratio should be compared with past and future ratios and also with
ratio of similar firms and the industry average. The high fixed assets turnover ratio
indicates efficient utilization of fixed assets in generating sales, while low ratio
indicates inefficient management and utilization of fixed assets.

This ratio indicates the extent to which the debts have been collected in time.

The debt collection period indicates the average debt collection period. This ratio is a
good indicator to the lenders of the firm, because it explains to them whether their
borrower is collecting from its debt in time. An increase in this period indicates
blockage of funds in debtors.

31
 Fixed Assets Turnover Ratio =

WORKING CAPITAL TURNOVER RATIO:

Working capital turnover ratio indicates the velocity of the utilization of net
working capital. This ratio indicates the number of times the working capital is
turned over in the course of a year. This ratio measures the efficiency with which the
working capital is being used by a firm. A higher ratio indicates efficient utilization
of working capital and low ratio indicates otherwise. But a very high working capital
turnover ratio is not a good situation for any firm and hence care must be taken while
interpreting the ratio. Making of comparative and Trend Analysis can at best use this
ratio for different firms in the same industry and for various periods. This can be
calculated as follows:

Working Capital Turnover Ratio =

Net Working Capital = Current Assets - Current Liabilities

(Excluding short-term bank Borrowings)

PROFITABILITY RATIOS:
A company should earn profits to Survive and Grow over a long period of time.
Profits are essential, but it would be wrong to assume that every action initiated by
management of a company should be aimed at maximizing profits, irrespective of
social consequences.

Profit is the difference between revenues and expenses over a period of time (usually
a year). Profit is the ultimate “Output” of a company, and it will have no future if it
fails to make sufficient profits. Therefore, the financial manager should continuously
evaluate to

the efficiency of the company in term of profits. The profitability ratios are calculated
to measure the operating efficiency of the company. Besides management of the
company, creditors and owners are also interested in the profitability of the firm.
Creditors want to get interest and repayment of principle regularly. Owners want to
get a required rate of return on their investment. This is possible only when the
company earns enough profits.Generally two major types of profitability ratios are

32
 calculated.

A. Profitability in relation to sales

B. Profitability in relation to investment

A.PROFITABILITY RATIOS IN RELATION TO SALES

 NET PROFIT RATIO

 OPERATING MARGIN

 GROSS PROFIT RATIO

NET PROFIT MARGIN RATIO:

Net profit is obtained when operation expenses, interest and taxes are subtracted from
the gross profit. If the non-operating income figure is substantial, it may be excluded from
PAT to see profitability arising directly from sales. Net profit margin ratio establishes a
relationship between net profit and sales and indicated management’s efficiency in
manufacturing, administering and selling the products. This ratio is the overall measure of
the firms` ability to turn each rupee sales into net profit. If the net margin is inadequate, the
firm will fail to achieve satisfactory return on shareholders’ funds.

This ratio also indicates the firms` capacity to withstand in adverse economic conditions. A
firm with a high net margin ratio would be in an advantageous position to survive in the case
of falling selling prices, rising costs of production or declining demand for the product. It
would really be difficult for a low net margin firm to withstand these adversities. Similarly, a
firm higher net profit margin can make better use of favorable condition, such as rising
selling prices; fall in costs of production or increasing demand for the product. Such a firm
will be able to

accelerate its profits at a faster rate than a firm with a low net profit margin will.

An analyst will be able to interpret the firm’s profitability more meaningfully if he/she
evaluates both the ratios-gross margin and net margin-jointly. To illustrate, if the gross

33
profit margin has increased over years, but the net profit margin has either remained
constant or declined, or has not increased as fast as the gross margin, this implies that the
operating expenses relative to sales have been increasing. The increasing expenses should
be identified and controlled. Gross profit margin may decline due to fall in sales price or
increase in the cost of production.

Net Profit Margin Ratio =

OPERATING MARGIN RATIO:

Operating margin ratio is also known as Operating Net profit ratio. It is the ratio of operating
profit to sales. This ratio establishes the relationship between the total cost incurred and
sales. Operating profit is the Net profit after depreciation but Before Interests and Taxes.
The purpose of computing this ratio is to find out the overall operational efficiency of the
business concern. It measures the cost of operations per rupee of sales. This ratio is
expressed as operating profit to sales.

OPERATING MARGIN RATIO = x100

GROSS PROFIT RATIO:

Gross profit margin reflects the efficiency with which the management produces each unit
of product. This ratio indicates the average spread between the cost of goods sold and the
sales revenue.

This shows profits relative to sales after the deduction of production costs, and indicates the
relation between Production costs and selling price. A high gross profit margin relative to the
industry average implies that the firm is able to produce at relatively lower cost.

Sales – Cost of goods sold

Gross Profit Margin Ratio =

PROFITABILITY RATIOS IN RELATION TO INVESTMENT:

 RETURN ON INVESTMENT
 RETURN ON EQUITY CAPITAL
 RETURN ON CAPITAL EMPLOYED
 EARNING PER SHARE
 RETURN ON INVESTMENT:

34
 The term investment refers to Total Assets. The funds employed in Net assets are
known as Capital Employed. Net assets equal net fixed assets plus current assets minus
Current liabilities excluding Bank loans. Alternatively, Capital employed in equal to Net
worth plus total debt.

The conventional approach of calculating return on investment (ROI) is to divide PAT by

Investment. Investment represents pool of funds supplied by shareholders and lenders, while
PAT represents residual income of shareholders; therefore, it is conceptually unsound to use
PAT in the calculation of ROI. Also, as discussed earlier, PAT is affected by capital
structure. It is, therefore more appropriate to use one of the following measures of ROI for
comparing the operating efficiency of firms.

( )
ROI (or) ROTA =

( )
ROI (or) RONA =

Where ROTA and RONA respectively Return on Total assets and Return on Net
assets. RONA is equivalent of Return on Capital Employed.

RETURN ON EQUITY CAPITAL:

Return on equity show s the relationship between net profit after tax excluding performance
dividend and equity shareholders fund. It is an indicator of the efficiency with which the
equity is employed in concern.

RETURN ON NET WORTH = x 100

RETURN ON CAPITAL EMPLOYED:

The ROCE is the second type of ROI. The term capital employed refers to long-term
funds supplied by the creditors and owners of the fund. It can be computed in two ways.
First, it is equal to non-current liabilities (long-term liabilities) plus owner’s equity.
Alternatively, it is equivalent to Net Working Capital plus Fixed Assets. Thus, the Capital
Employed provides a basis to test the profitability related to the sources of long-term funds.
A comparison of this ratio with similar firms, with the industry average and overtime would
provide sufficient insight into how efficiency the long-term funds of owners and creditors are
being used.

35
 Capital Employed ROCE = x100

EARNING PER SHARE:

The earnings per share shows the relationship between the profit and after tax (excludes
preference dividend) and number of equity shares. It is an indicator of the per share
profitability.

Earnings per share = x100

36
 DATA ANALYSIS & INTERPRETATION THROUGH RATIO
ANANLYSIS

1. LIQUIDITY RATIOS

 CURRENT RATIO:
The current ratio is a measure of the firms` short-term solvency. The higher the current
ratio, the larger is the amount of rupees available per Rupee of current liability, the more is
the firms` ability to meet current obligations and the greater is the safety of funds of short-
term creditors.

Current Ratio =

Current assets = inventories + sundry debtors + cash and bank balances

Current liabilities = current liabilities and provisions.

Table shows year wise current ratio:

Year Current assets Current liabilities RATIO

2017-2018 6335.55 1186.27 5.34

2018-2019 1779.83 1268.38 1.40
2019-2020 1053.67 1261.38 0.83
2020-2021 802.55 1265.80 0.63
2021-2022 1960.00 1128.05 1.73

37
 RATIO
6

3
RATIO
2

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation : From the above table it is understood that in the year 2017-18 the
current ratio is 5.34. There is a decrease in the ratio is 5.34 in the year 2018-19. By the year
2017-18 current ratio is 1.40. The current ratio is satisfactory. Current ratio indicates the
liquidity position of the company. The ideal current ratio is 2:1.

38
  LIQUID/QUICK RATIO:
This ratio establishes a relationship between quick or liquid assets and current
liabilities. An asset is a liquid it converted into cash liquid asset, other assets, which
are converted in to cash immediately or reasonably soon without loss of value. Cash is
a liquid asset.

Quick Ratio =
Quick assets = current assets – inventory (stock)
Current liabilities = current liabilities and provision
Table showing year wise liquid ratio:

Year Quick assets Current liabilities Ratio

2017-2018 26966.20 14307.01 1.88

2018-2019 8137.35 1.186.27 6.85

2019-2020 5547.24 7964.00 0.69

2020-2021 4396.61 7831.46 0.56

2021-2022 6834.40 5832.34 1.17

39
 Ratio

7
6
5
4
Ratio
3
2
1
0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation :

From the above table it is understood that in the year 2017-18 the quick ratio is 1.88
There is a decrease in the ratio is 6.85 in the year 2018-19. By the year 2019-20 quick ratio is
0.69. The quick ratio is not satisfactory. It is not good sign for any organization. This implies
that quick ratio is to be increased. The ideal quick ratio is 1:1.

40
  Cash ratio:
The absolute liquid ratio shows the relationship between absolute liquid assets and current
liabilities. The components of the ratio are highly liquid assets and current liabilities. An
absolute liquid asset includes cash and near cash assets. It indicates the ability of the firm to
meet the short term obligations without any loss in realization of assets.

Cash ratio =

Table showing year wise cash ratio:

Year Cash in hand+ Cash in Bank Current liabilities Ratio

2017-2018 145.89 1186.27 0.12

2018-2019 1406.31 1268.38 1.10

2019-2020 1098.22 1261.91 0.87

2020-2021 333.78 1265.80 0.26

2021-2022 869.18 1128.05 0.77

41
 Ratio

1.2

0.8

0.6 Ratio
0.4

0.2

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation :

From the above table it is understood that in the year 2017-18 the cash ratio is 0.12.
By the year 2018-19 cash ratio is 1.10 and it is found that the cash position is decreasing
thus the required cash balance is to be maintained to meet expenses of the organization.

42
  NET WORKING CAPITAL:
The difference between the current assets and current liabilities is called net working
capital. Net working capital is used as a measure of a firm liquidity. Net working capital
measures the firm potential reservoir of funds. It can be related to net assets or capital
employed.

Net working capital = current assets – current liabilities

Current assets = inventories + sundry debtors + cash at bank balances

Table showing year wise net working capital ratio

Year Current assets Current liabilities Net working capital

2017-2018 6335.55 1186.27 5149.28

2018-2019 1779.83 1268.38 511.45

2019-2020 1053.67 1261.91 -208.24

2020-2021 802.55 1265.80 -463.25

2021-2022 1960.00 1128.05 831.95

43
 6000
5000 Net working capital
4000
3000
2000
1000
0 Net working capital
-1000

INTERPRETATION:

The above table depicts that in the year 2017-2018 net working capital is Rs.5149.28. The
net working capital is decreased in the 2018-2019 is Rs.511.45. By the year 2019-2020 Rs.-
208.24. In the year net working capital is 2021-22 increased 831.95. So it is good sign for the
company. It is suggested that company maintain like this.

44
2. LEVERAGE RATIO:
 DEBT EQUITY RATIO:
The relationship describing the lender contribution for each rupee of the owner’s
contribution is called DEBT-EQUITY RATIO. DEBT– EQUITY RATIO is directly computed by the
following formula.

Debt-Equity ratio =

Total debt = loan funds (secured + unsecured loans)

Total equity = equity share capital

Table showing year wise debt equity ratio:

Year Total debt Total equity Ratio

2017-2018 166.63 10703.71 0.01

2018-2019 132.58 11816.49 0.01

2019-2020 311.55 12735.23 0.02

2020-2021 22.76 704.64 0.03

2021-2022 12.34 750.23 0.01

45
 Ratio
0.03
0.025
0.02
0.015
0.01 Ratio
0.005
0

Interpretation:

From the above table it was found that in year 2017-18. The debt equity ratio is 0.01 and
actually ideal debt –equity ratio is 2:1. But in the year 2020-21 debt –equity ratio is 0.03. so
the debt is more than equity. It is not good sign for organization.

46
  Total Debt equity Ratio:

The total debt ratio is measure the company debt capacity. The debt ratio is show is
what the debt in the company is, the high debt is te company dangerous and low debt is the
better to company the debt ratio is calculate

The table show year wise debt equity ratio :

Debt Equity Ratio = Total debt÷ total debt + net worth

Year Total Debt Total debt+Networth Ratio

2017-2018 166.63 10870.34 0.01

2018-2019 132.58 11949.07 0.01

2019-2020 311.55 13046.78 0.02

2020-2021 22.76 727.4 0.03
2021-2022 12.34 762.57 0.01

47
 Ratio
0.035
0.03
0.025
0.02
0.015
Ratio
0.01
0.005
0
2017- 2018- 2019- 2020- 2021-
2018 2019 2020 2021 2022

INTERPRETATION:

from the above table it was found that in the year 2017-18. The total debt ratio is 0.01 and
it was found that the total debt ratio was decreased and it is a good sign of the company.
The lowest ratio is 0.01 in the year 2021-22.

48
  PROPRIETARY RATIO:

This ratio states relationship between share capital and total assets. Proprietors’ equity
represents equity share capital, preference share capital and reserves and surplus. The
latter ratio is also called capital employed to total assets

Proprietary Ratio =

Table showing year wise proprietary ratio :

Year Share holder’s funds Total assets Ratio

2017-2018 1955.48 6335.55 0.30

2018-2019 1955.48 1779.83 1.09

2019-2020 1955.48 1053.67 1.85

2020-2021 1955.48 802.55 2.43

2021-2022 1955.48 1960.00 0.99

49
 Ratio

2.5

1.5
Ratio
1

0.5

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

INTERPRETATION:

From the above the table it was understood that in the year 2017-18. The proprietary ratio
is 0.30. The proprietary ratio is increased year by year 2021-22. The ideal proprietary ratio is
0.99. It was suggested that proprietary ratio is to decreased to reach the ideal ratio. In the
year 2020-21 maximum proprietary is 2.43.

50
 Fixed assets to net worth ratio:

Net Worth is represented by Equity Share Capital plus Reserves and Surpluses. If the
fixed assets are more than the Net Worth, difficulties may arise, as the depreciation
will reduce profit. This also means that. If this ratio is too high, the firm may find
itself handicapped, as too much capital is tied up in fixed assets but creditors have
contributed to fixed assets. The higher this ratio, the less will be the protection to
creditors not

Fixed Assets to Net worth Ratio =

Table showing year wise fixed assets to net worth ratio:

Years Fixed assets Net worth/ share holders funds Ratio

2017-2018 416,810,237 6335.55 65.78

2018-2019 478,956,250 1779.83 269.1

2019-2020 502,144,580 1053.67 476.5

2020-2021 529,885,879 802.55 660.2

2021-2022 596,508,090 1960.00 304.3

51
 ratio

700
600
500
400
ratio
300
200
100
0
2017-18 2018-19 2019-2020 2020-2021 2021-2022

INTERPRETATION:

The ideal ratio fixed assets to net worth ratio is 0.75:1. From the above table understood
2017-18 in fixed assets to net worth ratio is 65.78. by the year it was decreasing in the year
2019-20 Fixed assets to net worth ratio is 476.5. so it is not good sign for the company .
increased the fixed assets to net worth ratio. it was suggested that facor as to utilize the
fixed assets in order to improve the performance of the company

52
3.ACTIVITY RATIO:

 TOTAL ASSETS TURNOVER RATIO:

This ratio indicates the extent to which the debits have been called in time the debt
collection period indicates the average debt collection period. This ratio is a good indicator
to the lenders of the firm, because it explains to them whether their borrower is collecting
from its debt in time. An increase in this period indicates blockage of funds in debtors.

Total Asset turnover Ratio =

Table showing year wise total asset turnover ratio:

Year Net sales Fixed Assets Ratio

2017-2018 31319.97 416810.237 0.07

2018-2019 36104.24 478,956,250 0.07

2019-2020 29139.31 502,144,580 0.05

2020-2021 14366.74 529,885,879 0.02

2021-2022 25733.74 596,508,090 0.04

53
 Ratio

0.08
0.06
0.04
0.02
0 Ratio
Ratio

INTERPRETATION:

The fixed asset turnover ratio is a metric that measures how effectively a company general
there’s no ideal ratio that’s considered a bench mark for all industries. The above table
depicts that the year 2017-18. The fixed assets turnover ratio is 0.07. by the year 2020-21 it
is 0.02. it shows there is a increased in the ratio tremendosully. This shows that company is
maintaining its fixed assets in favourable condition.

54
  WORKING CAPITAL TURNOVER RATIO:
Working capital turnover ratio indicates the velocity of the utilization of net working capital.
This ratio indicates the number of times the working capital is turned over in the course of a
year. This ratio measures the efficiency with which the working capital is being used by a
firm. A higher ratio indicates efficient utilization of working capital and low ratio indicates
otherwise. But a very high working capital turnover ratio is not a good situation for any firm
and hence care must be taken while interpreting the ratio. Making of comparative and
Trend Analysis can at best use this ratio for different firms in the same industry and for
various periods. This can be calculated as follows:

Working Capital Turnover Ratio =

Working capital = current assets – current liabilities

Table showing year wise working capital turnover ratio:

Year Net sales Networking capital Ratio

2017-2018 31319.97 5149.28 6.08

2018-2019 36104.24 511.45 70.59

2019-2020 29139.31 208.24 139.9

2020-2021 14366.74 463.25 31.01

2021-2022 25733.74 831.95 30.93

55
 Ratio

140
120
100
80
Ratio
60
40
20
0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

INTERPRETATION:

In this case a higher ratio is indicates efficient with utilization of working capital and low
working capital is indicates otherwise. In 2017-18working capital turnover ratio is 6.08.
Here in the year 2019-20 working capital turnover ratio is 139.9 and as well as year by year
it was decreased so it is not good sign for company . improve your working capital turnover
ratio.

56
  NET PROFIT RATIO:
This ratio also indicates the firms` capacity to withstand in adverse economic conditions. A
firm with a high net margin ratio would be in an advantageous position to survive in the
case of falling selling prices, rising costs of production or declining demand for the product.
It would really be difficult for a low net margin firm to withstand these adversities.
Similarly, a firm higher net profit margin can make better use of favourable condition, such
as rising selling prices; fall in costs of production or increasing demand for the product. Such
a firm will be able to accelerate its profits at a faster rate than a firm with a low net profit
margin will.

= x100

Net profit = profit after tax

Table showing year wise net profit ratio :

Year Net profit Net sales Ratio

2017-2018 302.86 31319.97 0.01

2018-2019 375.30 36104.24 0.01

2019-2020 1201.83 29139.31 0.04

2020-2021 209.03 14366.74 0.01

2021-2022 488.97 25733.74 0.01

57
 Ratio
0.04
0.035
0.03
0.025
0.02
0.015
Ratio
0.01
0.005
0

INTERPRETATION:
From the above table it shows the year 2017-2018 the net profit ratio is 0.01. In the year 2019-20
the net profit ratio is 0.04. It was found that the net profit ratios are fluctuating year to year. The
company must improve the profitability position.

58
  RETURN ON EQUITY CAPITAL:
Return on equity show s the relationship between net profit after tax excluding
performance dividend and equity shareholders fund. It is an indicator of the efficiency with
which the equity is employed in concern.

Return on equity capital = X 100

Table showing year wise return on equity capital.

Year Net profit Share holders’ funds Ratio

2017-2018 302.86 1955.48 0.15

2018-2019 375.30 1955.48 0.19

2019-2020 1201.83 1955.48 0.61

2020-2021 209.03 1955.48 0.10

2021-2022 488.97 1955.48 0.25

59
 Ratio

0.7
0.6
0.5
0.4
Ratio
0.3
0.2
0.1
0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

INTERPRETATION:

From the above table it has understood that in the year 2017-2018, the return on equity is
0.15. By the year 2018-2019, the return on equity is 0.19. It was observed that decrease in
the return on investment and it is not good sign for the organization

60
  RETURN ON INVESTMENT:

It is calculated effective utilization of the assets in the company. The conventional approach
of calculating return on investment (ROI) is to divide PAT by Investment. Investment
represents pool of funds supplied by shareholders and lenders, while PAT represents
residual income of shareholders; therefore, it is conceptually unsound to use PAT in the
calculation of ROI. Also, as discussed earlier, PAT is affected by capital structure. It is,
therefore more appropriate to use one of the following measures of ROI for comparing the
operating efficiency of firms.
( )
ROI (or) ROTA =

ROI (or) RONA =

Table showing year wise ratios return on investment:

Year Net profit Total assets Ratio

2017-2018 99.68 6335.55 0.01

2018-2019 1707.16 1779.83 0.95

2019-2020 559.39 1053.67 0.53

2020-2021 1011.54 802.55 1.26

2021-2022 3019.14 1960.00 1.54

61
 Ratio

2017-2018
2018-2019
2019-2020
2020-2021
2021-2022

INTERPRETATION:
From the above table it is understood that in the year 2017-18 the return on investment is
0.01. By the year 2018-19. The return on investment is 0.95. I t is a observed that there is a
decrease in Return on investment and it is good sign for company. It is suggested that
company has to mainten be like performance to get more return.

62
  RETURN ON CAPITAL EMPLOYED:

The ROCE is the second type of ROI. The term capital employed refers to long term funds
supplied by the creditors and owners of funds. It can be computed in two ways. First, it is
equal to non-current liabilities plus owner’s equity. Alternatively it is equivalent to net
working capital plus fixed assets. Thus, the capital employed provides a basis to test the
profitability related to the sources of long term funds. A comparison of this ratio with similar
firms, with the industry average and overtime would provide sufficient insight into how
efficiency the long term funds of owners and creditors are being used. The higher the ratio
the more efficient is the use of capital employed.

RETURN ON CAPITAL EMPLOYED = x 100

Table showing year wise return on capital employed:

Year Operating profit Capital Employed Ratio

2017-2018 147.26 2022.59 0.07

2018-2019 1489.64 2108.72 0.70

2019-2020 1550.37 1808.04 0.85

2020-2021 811.21 1724.03 0.47

2021-2022 2869.49 1726.90 1.66

63
 Ratio
1.8
1.6
1.4
1.2
1
0.8 Ratio
0.6
0.4
0.2
0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

INTERPRETATION:

From the above table it shows that in the year 2017-18, the return on capital
employed is 0.07. By the year 2018-19 it is 0.70 It was observed that increase in return on
capital it is good for the company.

64
  NET PROFIT MARGIN RATIO:

Net Profit is obtained when operation expences, interest and taxes are substracted from the
gross profit . if the non operating income figure is substantial, if may be excluded from PAT
to see profitability arising directly from sales

The below table is shown the net profit margin ratio for the 2017-2022:

year Profit after Tax Sales ( Revenue) RATIO

2017-2018 302.86 31319.97 0.009

2018-2019 375.30 36104.24 0.01
2019-2020 1201.83 29139.31 0.04
2020-2021 209.03 14366.74 0.01
2021-2022 488.97 25733.74 0.01

65
 RATIO
0.045
0.04
0.035
0.03
0.025
0.02 RATIO
0.015
0.01
0.005
0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation:

From the above the table it show that in the year 2017-18 the interest coverage ratio is
0.004.by the year by year2021-22 0.11. it has observe the interest coverage ratio is
decreasing year by year2018-19. The ratio is 0.04 indicates the extent earnings can decline
without resultant financial hardship to the firm because of its inability to meet annual
interest cost.

66
 SUMMARY
FACOR ALLOYS PRIVATE LIMITED, GARIVIDI,SREERAMNAGAR was the first share based
integrated fertilizers company with new technology, large scale computerization and
automation. The organizational manpower has been rationalised to operate it at
international level of efficiency and to attain international labour productivity. The
production, commercial and financial performance has been improving with the passage of
the years. This company has been currently engaged in production of corn stress maize as
per market demand and is capable of producing various animal items like fish food etc... as
per market demand. The financial analysis FACOR ALLOYS PRIVATE LIMITED,
GARIVIDI,SREERAMNAGAR.

Company by the use of various techniques i.e Ratio analysis show that:

 The position of the company is imperfect.

 The company is high rate of debt more than equity .
 The net worth of the company is not satisfactory.
 It is noted that the inventory level is increasing .
 The profitability ratio of the company is indecline stage.
 Security of shareholders is envised.
 The company profitability is good position.

67
 FINDINGS
 The current ratio of the company is not satisfactory it is decreased from year to year. In
the years of 2017- 2022.
 The quick ratio of the company not good. It is increased year by year.
 Cash ratio was found that the cash balance is to be maintained to meet expenses of the
organisation.
 The debt equity ratio here the debt is more than the equity.
 Total debt equity ratio it was found that the total debt ratio was decreased year by year.
 Fixed asset to net worth ratio :
It was found by year by year was decreaseing . It is not good sign for any
organiasation.
 Working capital turn over ratio is decreased year by year.
 Net profit ratio is fluctuating year by year from 2017-2022.

68
 SUGGESTIONS

 It is suggested to improve the cash position of the company.

 The company should reduce the debt funds.
 In fixed asset net worth ratio is decreasing year by year so suggested to increase our fixed
asset net worth ratio.
 The company has to suggested speed up the sales to get more profits.
 The company has to increase operating expenses so that the company can get less profits.
 The total asset turnover ratio is very significant for manufacturing concerns.
 The company has to try to utilize the resource in effective manner.
 Improve your working capital turnover ratio.
 Increase the fixed asset to net worth ratio.
 The company has to improve the net working capital , it is mandatory for the
organisation.

69
 BIBLOGRAPHY
BOOKS

 Financial management - C. Paramsivam

 Financial management - T.Subramanian
 Financial Management - (Theory and practicle) – Shasi k.Gupta
& R.K.Sharma
 Financial Management - I.M.Pandey
 Financial Management - Khan and Jain
 Financial Management ( theory and practice) – Pasanna and
Chandra

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