A

PROJECT REPORT

ON

“STUDY OF RATIO ANALYSIS OF

SIESTA LOGISTICS CORPORATION LIMITED”

Submitted to

Savitribai Phule Pune University, Pune

In Partial Fulfilment for the Degree of

BACHLOR OF BUSINESS ADMINISTRATION

Submitted by
Students Name Ayush Rajesh Agale
Roll No: BB21002

Student of TYBBA (Sem. VI)

Under the Guidance of Prof. Sonali Bhor

(Academic Year 2023-24)

Sri. Balaji Society’s

BALAJI COLLEGE OF ARTS, COMMERCE & SCIENCE, PUNE
Affiliated to the Savitribai Phule University, Pune & Approved by Govt. of Maharashtra
S. No. 55/2-7, Tathawade, Near Dange Chowk, Aundh-Ravet Road, Pune-412033
www.bcacspune.edu.in
 DECLARATION

I, the undersigned Ayush Rajesh Agale, declare that the Project Report titled as, "A
Study of Ratio Analysis" submitted by me for partial fulfilment of Bachelor of
Business Administration (BBA) is the original record of the project work carried out by
me during the period from May 2024, under the guidance of Prof. Bhor Sonali internal
guide and the same has not formed the basis for the award of any degree, diploma,
association, fellowship, titles in or for any other Statutory University or Autonomous
Institutions functioning in India or abroad imparting higher education in Management.

Date: Ayush Rajesh Agale

Place:
 ACKNOWLEDGEMENT

I would like to express my profound gratitude to our Principal, Dr. O. M.

Ashtankar for his support and guidance in completing our project on the topic

“Ratio Analysis of Siesta Logistics Corporation Limited”. It was a great learning

experience.

I would like to express my special thanks to our mentor Prof. Bhor Sonali for her

time and efforts she provided throughout the semester. Your useful advice and

suggestions were really helpful to me during the project’s completion. In this

aspect, I am eternally grateful to you.

I would like to acknowledge that this project was completed entirely by me and not

by someone else.

Ayush Rajesh Agale

 CONTENTS

Sl. No Title Page No.

Chapter - 1 Introduction 5-23

Theoretical background

1.1 Limitations

1.2 Classifications of ratios

Chapter - 2 Research Methodology 24-27

2.1 Introduction

2.2 Need for the study

2.3Liquidity And Profitability

2.4 Scope of the study

2.5 Statement of the problem

2.6 Data sources

2.7 Limitations

Chapter –3 Company Profile 28-33

Chapter –4 Analysis and Interpretation 34-57

Chapter –5 Findings, Recommendations and Conclusion 59-61

Bibliography 62

Annexure 66
 CHAPTER - 1

INTRODUCTION

INTRODUCTION:

FINANCIAL ANALYSIS:

Financial analysis is the process of identifying the financial strengths and

weaknesses of the firm and establishing relationship between the items of the
balance sheet and profit & loss account. Financial ratio analysis is the calculation
and comparison of ratios, which are derived from the information in a company’s
financial statements. The level and historical trends of these ratios can be used to
make inferences about a company’s financial condition, its operations and
attractiveness as an investment. The information in the statements is used by-
• Trade creditors, to identify the firm’s ability to meet their claims i.e.
liquidity position of the company.
• Investors, to know about the present and future profitability of the company
and its financial structure.
• Management, in every aspect of the financial analysis. It is the responsibility
of the management to maintain sound financial condition in the company.

5
RATIO ANALYSIS:

Ratio analysis is such a significant technique for financial analysis. It indicates

relation of two mathematical expressions and the relationship between two or more
things. Financial ratio is a ratio of selected values on an enterprise's financial
statement.

There are many standard ratios used to evaluate the overall financial condition of a
corporation or other organization. Financial ratios are used by managers within a
firm, by current and potential stockholders of a firm, and by a firm„s creditor.

Financial analysts use financial ratios to compare the strengths and weaknesses in
various companies.

MEANING OF RATIO:

A ratio is simple arithmetical expression of the relationship of one number to

another. It may be defined as the indicated quotient of two mathematical
expressions.

According to Accountant‟s Handbook by Wixom, Kill and Bedford, “a ratio is an

expression of the quantitative relationship between two numbers”.

MEANING OF RATIO ANALYSIS:

Ratio analysis is a very important tool of financial analysis. It is the process of

establishing the significant relationship between the items of financial statement to
provide a meaningful understanding of the performance and financial position of a

6
firm. Ratio when calculated on the basis of accounting information are called
„Accounting Ratio‟.

DEFINITIONS OF RATIO ANALYSIS:

Kennedy and Mc Mulla. “The relationship of one to another, expressed in simple

term of mathematical is known as ratio”

According to Accountant‟s Handbook by Wixom, Kell and Bedford, a ratio “is an

expression of the quantitative relationship between two numbers”.

NATURE OF RATIO ANALYSIS:

Ratio analysis is a technique of analysis and interpretation of financial statements.

It is the process of establishing and interpreting various ratios for helping in
making certain decisions. However, ratio analysis is not an end in itself. It is only a
means of better understanding of financial strengths and weakness of a firm. There
are a number of ratios which can be calculated from the given information given in
the financial statements, but the analyst as to select the appropriate data and
calculate only a few appropriate ratios from the same keeping in mind the
objectives of analysis. The following are the four steps involved in the ratio
analysis:

• Selection of relevant data from the financial statements depending upon the
objective of the analysis.
• Calculation of appropriate from the above data.
• Comparison of the calculated ratios with the ratios of the same firm in the
past, or the ratios developed from the projected financial statements.

7
 • Interpretation of the ratios.

GUIDELINES OR PRECAUTIONS FOR RATIO ANALYSIS

The calculation of ratios may not be a difficult task but their use is not easy.
Following guidelines or factors may be kept in mind while interpreting various
ratios are-

• Accuracy of financial statements

• Objective or purpose of analysis
• Selection of ratios
• Use of standards
• Caliber of the analysis

1. THEORETICAL BACKGROUND:

1.1 LIMITATIONS:

1. Lack of proper standards.

2. Comparison not possible if different firms adopt different accounting
policies.
3. Ratio analysis becomes less effective due to price level changes.
4. Ratio may be misleading in the absence of absolute data.
5. Limited use of a single data.
6. False accounting data gives false ratio.

8
 7. Ratios alone are not adequate for proper conclusions.
8. Effect of personal ability and bias of the analyst.

1.2 CLASSIFICATIONS OF RATIOS:

Several ratios, calculated from the accounting data can be grouped into various
classes according to financial activity or function to be evaluated. 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 requirement of the various users of ratios; ratios are classified into following
four important categories:

A. LIQUIDITY RATIO:

a) Current Ratio
b) Quick Ratio or Acid Test Ratio
B. LEVERAGE OR CAPITAL STRUCTURE RATIO:

a) Debt Equity Ratio

b) Proprietary Ratio
C. ACTIVITY RATIO OR TURNOVERRATIO:

a) Stock Turnover Ratio

b) Fixed Assets Turnover Ratio
c) Working Capital Turnover Ratio

9
D. PROFIT ABILITY RATIO:

Profitability Ratio based on Sales :

i. Gross Profit Ratio

ii. Net Profit Ratio

iii. Operating Ratio

Profitability Ratio Based on Investment:

i. Return on Shareholder’s Funds

iii. Earnings Per Share

A. LIQUIDITY RATIO:

It is extremely essential for a firm to be able to meet the obligations as they

become due. Liquidity ratios measure the ability of the firm to meet its current
obligations (liabilities). The liquidity ratios reflect the short-term financial strength
and solvency of a firm. In fact, analysis of liquidity needs the preparation of cash
budgets and cash and funds flow statements; but liquidity ratios, by establishing a
relationship between cash and other current assets to current obligations, provide 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 credit worthiness, loss of credit worthiness, loss of creditors‟ confidence, or
even in legal tangles resulting in the closure of the company.

10
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 are lack of it, are:

a. Current ratio
b. Quick ratio.
a. Current ratio:

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

Current Ratio = Current Assets

Current Liabilities

Current assets include cash and other assets that can be converted into cash within
in a year, such as marketable securities, debtors and inventories. Prepaid expenses
are also included in the current assets as they represent the payments that will not
be made by the firm in the future.

All obligations maturing within a year are included in the current liabilities.
Current liabilities include creditors, bills payable, accrued expenses, short-term
bank loan, income tax, liability and long-term debt maturing in the current year.

11
The current ratio is a measure of firm’s short-term solvency. It indicates the
availability of current assets in rupees for every one rupee of current liability. A
ratio of greater than one means that the firm has more current assets than current
claims against them Current liabilities.

b. Quick Ratio: Quick ratio also called Acid-test ratio, establishes a

relationship between quick, or liquid, assets and current liabilities. An asset is a
liquid if it can be converted into cash immediately or reasonably soon without a
loss of value. Cash is the most liquid asset. Other assets that are considered to be
relatively liquid and included in quick assets are debtors and bills receivables and
marketable securities (temporary quoted investments). Inventories are considered
to be less liquid. Inventories normally require some time for realizing into cash;
their value also has a tendency to fluctuate. The quick ratio is found out by
dividing quick assets by current liabilities.

The Formula for calculating Quick Ratio is as follows:-

(Quick Assets=Current Assets-Inventories)

Quick Assets
Quick Ratio= ……………………………
Current Liabilities

12
 B. LEVERAGE OR CAPITAL STRUCTURE RATIO:

The short-term creditors, like bankers and suppliers of raw materials, are more
concerned with the firm’s current debt-paying ability. On other hand, ling-term
creditors like debenture holders, financial institutions etc. are more concerned with
the firm’s long-term financial strength. In fact a firm should have a strong short as
well as long-term financial strength. In fact a firm should have a 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 appropriate mix of debt and owners‟ equity in financing the firm’s
assets.

Leverage ratios may be calculated from the balance sheet items 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 firms has relied on debt
in financing assets. Leverage ratios are also computed form the profit and loss
items by determining the extent to which operating profits are sufficient to cover
the fixed charges.

a. Debt Equity Ratio: This ratio can be expressed in two ways:

First Approach: According to this approach, this ratio expresses the relationship
between long term debts and shareholder’s fund.

Formula:

Total Liabilities

13
 Debt Equity Ratio = _______________________________
Shareholder’s Funds or Net Worth

Long Term Loans: These refer to long term liabilities which mature after one year.
These include Debentures, Mortgage Loan, Bank Loan, and Loan from Financial
institutions and Public Deposits etc.

Shareholder’s Funds: These include Equity Share Capital, Preference Share

Capital, Share Premium, General Reserve, Capital Reserve, Other Reserve and
Credit Balance of Profit & Loss Account.

Second Approach: According to this approach the ratio is calculated as follows:

Formula:

External Equities
Debt Equity Ratio =
Internal Equities

Debt equity ratio is calculated for using second approach.

Significance: This Ratio is calculated to assess the ability of the firm to meet its
long term liabilities. Generally, debt equity ratio of is considered safe.

If the debt equity ratio is more than that, it shows a rather risky financial position
from the long-term point of view, as it indicates that more and more funds invested
in the business are provided by long-term lenders.

14
The lower this ratio, the better it is for long-term lenders because they are more
secure in that case. Lower than 2:1 debt equity ratio provides sufficient protection
to long-term lenders

b. Proprietary Ratio: This ratio indicates the proportion of total funds provide by
owners or shareholders.

Formula for the calculation of Proprietary Ratio:

Shareholder’s Funds

Proprietary Ratio = + Long term Loans

Shareholder’s funds

This ratio should be 33% or more than that. In other words, the proportion of
shareholders‟ funds to total funds should be 33% or more. If the ratio is low it
indicates that long-term loans are less secured and they face the risk of losing their
money.

C. ACTIVITY RATIO OR TURN OVER RATIO:

These ratios are calculated on the bases of „cost of sales‟ or sales, therefore, these
ratios are also called as „Turnover Ratio‟. Turnover indicates the speed or number
of times the capital employed has been rotated in the process of doing business.
Higher turnover ratio indicates the better use of capital or resources and in turn

15
leads to higher profitability.

It includes the following:

a. Stock Turnover Ratio: This ratio indicates the relationship between the cost
of goods during the year and average stock kept during that year. Formula:

Cost of Goods Sold

Stock Turnover Ratio =
Average Stock

Here, Cost of goods sold = Net Sales – Gross Profit

Average Stock = Opening Stock + Closing Stock/2

Significance: This ratio indicates whether stock has been used or not. It shows the
speed with which the stock is rotated into sales or the number of times the stock is
turned into sales during the year.

The higher the ratio, the better it is, since it indicates that stock is selling quickly.
In a business where stock turnover ratio is high, goods can be sold at a low margin
of profit and even than the profitability may be quite high.

16
b. Fixed Assets Turnover Ratio: This ratio reveals how efficiently the fixed
assets are being utilized.

Formula:

Cost of Goods Sold

Fixed Assets Turnover Ratio=
Net Fixed Assets

Here, Net Fixed Assets = Fixed Assets – Depreciation

Significance: This ratio is particular importance in manufacturing concerns where
the investment in fixes asset is quite high. Compared with the previous year, if
there is increase in this ratio, it will indicate that there is better utilization of fixed
assets. If there is a fall in this ratio, it will show that fixed assets have not been
used as efficiently as they had been used in the previous year.

c. Working Capital Turnover Ratio: This ratio reveals how efficiently

working capital has been utilized in making sales.

Formula is:

Cost of Goods Sold

Working Capital Turnover Ratio =
Working Capital

17
Here, Cost of Goods Sold = Opening Stock + Purchases + Carriage + Wages +
Other Direct Expenses – Closing Stock

Working Capital = Current Assets – Current Liabilities

Significance: This ratio is of Particular importance in non-manufacturing concerns

where current assets play a major role in generating sales. It shows the number of
times working capital has been rotated in producing sales.

A high working capital turnover shows efficient use of working capital and quick
turnover of current assets like stock and debtors. A low working capital turnover
ratio indicates under-utilization of working capital.

D. PROFIT ABILITY RATIO:

The main object of every business concern is to earn profits. A business must be
able to earn adequate profits in relation to the risk and capital invested in it. The
efficiency and the success of a business can be measured with the help of
profitability ratio.

a. Profitability Ratio Based on Sales:

i. Gross Profit Ratio: This ratio shows the relationship between gross
profit & sales. Formula:

Gross Profit
Gross Profit Ratio = X 100
Net Sales

18
Here, Net sales = Sales – Sales Return

Significance: This ratio measures the margin of profit available on sales. The
higher the gross profit ratio, the better it is. No ideal standard is fixed for this ratio,
but the gross profit ratio should be adequate enough not only to cover the operating
expenses but also to provide for depreciation, Interest on loans, dividends and
creation of reserves.

ii. Net Profit Ratio: This ratio shows the relationship between net profit
and sales.

It may be calculated by two methods.

Method -1

Net Profit
Net Profit Ratio = X 100
Net Sales

Method -2

Operating Net Profit

Operating Net Profit = X 100
Net Sales

Significance: This ratio measures the rate of net profit earned on sale. It helps in
determining the overall efficiency of the business operations. An increase in the

19
ratio over the previous year shows improvement in the overall efficiency and
profitability of the business.

iii. Operating Ratio: This ratio measures the proportion of an enterprise

cost of sales and operating expenses in comparison to its sales.

Formula:
Cost of Goods Sold + Operating Expenses

Operating Ratio = X 100

Net Sales

Significance: Operating Ratio is a measurement of the efficiency and profitability

of the business enterprises. The ratio indicates the extent of sales that is absorbed
by the cost of goods sold and operating expenses. Lower the Operating ratio is
better, because it will leave higher margin of profit on sales.

E. PROFITABILITY RATIO BASED ON INVESTMENT:

These ratios reflect the true capacity of the resources employed in the enterprises.
Sometimes the profitability ratio based on sales is high whereas profitability ratio
based on investment is low. Since the capital is employed to earn profit, these are
the real measures of the success of the business and managerial efficiency.

20
i. Return on Capital Employed: This ratio reflects the overall profitability of the
business. It is calculated by comparing the profit earned and the capital employed
to earn it. This ratio is usually in percentage and is also known as „Rate of Return‟
or Yield on Capital‟.

Formula for calculation of Return on Capital employed is:

Profit Before Interest, Tax and Dividends

Return on Capital Employed = X100
Capital Employed

Advantages of ‘Return on Capital Employed:

• Since profit is the overall objective of a business enterprise, this ratio is a

barometer of the overall performance of the enterprise. It measures how
efficiently the capital employed in the business is being used.
• Even the performance of two dissimilar firms may be compared with the
help of this ratio.
• The ratio can be used to judge the borrowing policy of the enterprise
• This ratio helps in affecting the necessary changes in the financial policies of
the firm.
• Return on Shareholder’s Fund: Return on Capital Employed shows the
overall profitability of the funds supplied by long term lenders and
shareholders taken together. Whereas, return on shareholder’s funds
measures only the profitability of the funds invested by shareholders.

21
These are several measures to calculate the return on shareholder’s funds:
• Return on Total Shareholder’s Funds: For calculating this ratio „Net
Profit after Interest and Tax‟ is divided by total.
•

Net Profit After Interest and Tax

Return on Total Shareholder’s Fund =

Total Shareholder’s Funds

Where, Total Shareholder’s Funds = Equity Share Capital + Preferences

Share Capital + All Reserved +P&L Account Balance – Fictitious Assets

Significance: This ratio reveals how profitably the proprietor‟s funds have been
utilized by the firm. A comparison of this ratio with that of similar firms will throw
light on the relative profitability and strength of the firm.

Return on Equity Shareholder’s Funds: Equity Shareholders of a company are

more interested in knowing the earning capacity of their funds in the business. As
such, this ratio measures the profitability of the funds belonging to the equity
shareholder’s.

Formula:

22
 Net Profit (after interest, tax &
preferences dividend)
Return on Equity Shareholder’s Funds = X 100
Equity Shareholder’s Funds

Equity Shareholder’s Funds = Equity Share Capital + All Reserves + P&L

Account.

Significance: This ratio measures how efficiently the equity shareholder’s funds
are being used in the business. It is a true measure of the efficiency of the
management since it shows what the earning capacity of the equity shareholders‟
funds. If the ratio is high, it is better, because in such a case equity shareholders
may be given a higher dividend.

iii. Earnings per Share (E.P.S): This ratio measures the profit available to the
equity shareholders on a per share basis. All profit left after payment of tax and
preference dividends are available to equity shareholders.

Formula:
Net Profit – Dividend on Preference
Shares
Earnings Per Share =
No. of Equity Shares

23
Significance: This ratio helpful in the determining of the market price of the equity
share of the company. The ratio is also helpful in estimating the capacity of the
company to declare dividends on equity shares.

CHAPTER – 2

2.1 RESEACH METHODOLOGY:

INTRODUCTION:

Financial statements have two major uses in financial analysis. First, they are used
to present a historical recover of the firm’s financial development. Second, they are
used for a course of action for the firm.

A performance financial statement is prepared for a future period. It is the financial

manager’s estimate of the firm’s future performance.

The operation and performance of a business depends on many individuals are

collective decisions that are continually made by its management team. Every one
of these decisions ultimately causes a financial impact, for better or works on the
condition and the periodic results of the business. In essence, the process of
managing involves a series of economic choices that activates moments of
financial resources connected with the business.

Some of the decisions made by management one will be the major, such as
investment in a new facility, raising large amounts of debts or adding a new line of

24
products or services. Most other decisions are part of the day-to-day process in
which every functional area of the business is managed. The combine of effect of
all decisions can be observed periodically when the performance of the business is
judged through various financial statements and special analysis.

These changes have profoundly affected all our lives and it is important for
corporate managers, shareholders, tenders, customers and suppliers to investment
and the performance of the corporations on which then relay. All who depend on a
corporation for products, services, or a job must be med about their company’s
ability to meet their demands time and in this changing world. The growth and
development of the corporate enterprises is reflected in their financial statement.

2.2 NEED FOR THE STUDY:

• The study has great significance and provides benefits to various parties
whom directly or indirectly interact with the company.
• It is beneficial to management of the company by providing crystal clear
picture regarding important aspects like liquidity, leverage, activity and
profitability.
• The study is also beneficial to employees and offers motivation by showing
how actively they are contributing for company's growth.
• The investors who are interested in investing in the company’s shares will
also get benefited by going through the study and can easily take a decision
whether to invest or not to invest in the company’s shares.

25
2.3 LIQUIDITY AND PROFITABILITY:

Liquidity and profitability are two important demanders in determining the

soundness of an enterprise.

Liquidity means ability of a firm to meet its current obligations when they become
due for payment. It has two aspects – quantitative and qualitative. Qualitative
aspect implies the quantum of current assets a firm possesses irrespective of
making any difference b/w various types of current assets such as inventories, cash
and so on. Qualitative aspect reforms the quality of current in terms of their
realization in to cash considering time dimension involved in maturing different
components of current assets.

Profitability is the capacity of earning profits and due most important measure of
performance of affirms. It is generally assumed that there is negative relationship
b/w liquidity and profitability i.e. higher liquidity results in lower profitability and
vice-versa.

2.4 SCOPE OFTHE STUDY:

The scope of the study is limited to collecting financial data published in the
annual reports of the company every year. The analysis is done to suggest the
possible solutions. The study is carried out for 5 years (2009-13).

2.5 OBJECTIVESOFTHE STUDY:

• To examine the financial performance of the Siesta Logistics Corporation

Ltd. for the period of 2010 to 2013.

26
 • To analyses interpret and to suggest the operational efficiency of the Siesta
Logistics Corporation Ltd by comparing the balance sheet& profit & loss A\
c
• To critically analyses the financial performance of the Siesta Logistics
Corporation Ltd. With Help of the ratios.
• To offer appropriate suggestions for the better performance of the
organization.

2.6 DATA SOURCES:

The study is based on secondary data. However, the primary data is also collected
to fill the gap in the information.

• Primary data will be through regular interaction with the officials of Siesta
Logistics Corporation Ltd.
• Secondary data collected from annual reports and also existing manuals and
like company records balance sheet and necessary records.

2.87 LIMITATIONS:

• The study is based on only secondary data.

• The period of study was 2010-13 financial years only.
• One of the factors of the study was lack of availability of ample information.
Most of the information has been kept confidential and as such as not assed
as art of policy of company.

27
 • Time is an important limitation. The whole study was conducted in a period
of 60 days, which is not sufficient to carry out proper interpretation and
analysis.

CHAPTER – 3

COMPANY PROFILE

COMPANY PROFILE

SIESTA LOGISTICS CORPORATION LIMITED BANGALORE, INDIA

Siesta Logistics Corporation Limited is India’s only truly Integrated Logistics

Service Provider. The company was promoted by Mr. Ashok Chattaraj a first-
generation entrepreneur and its present Chairman & Managing Director. The
company was founded in 2007 and is based in Bangalore, India with an additional
office in Hong Kong. Siesta Logistics Corporation Limited operates as a subsidiary
of The Siesta Group of Companies. It has the capability to serve the clients with a
portfolio of customized solutions in the areas of transportation, freight forwarding,

28
rail, port and cargo services, 3PL services, Odd Dimension Cargo and Project
Cargo. Headquartered in Bangalore, the company has a vast network, covering
over 15 key business centres including major cities like Delhi, Kolkata, Ghaziabad,
Hyderabad, Bangalore, Chennai, Goa, Pune and Visakhapatnam among others.

SLCL helps clients redesign their supply chains, optimize their routes, negotiate
better vendor terms and ensure that their raw materials reach them on time, thereby
constantly delivering value to clients that comprise large multinationals and Indian
corporations.

COMPANY FACTS:
Business Type : Service Providers

Year of Est. : 2007

Company Turnover : Rs. 50 to 100 Crore Approx.

No. of Employee : 150 to 200

Ownership : Corporation/Limited Liability Company

Business Markets : Africa, China, South Central America, CIS,

Europe

VISION AND MISSION OF SLCL:

Our Vision:

29
To offer "Best Value for Money" solutions to our customers and stakeholders
through constant product innovation, process optimization and adaptive services by
being a learning organization.

Our Mission:

Offer end to end integrated solutions in India and worldwide across multiple
industry verticals, reaching desired product to its destination in desired time frame
with highest level of customer service at optimal cost

OURSERVICES:

1. ODC & Transportation.

2. Freight Forwarding.
3. Warehousing Management & 3PL services.
4. Customs House Agent (CHA):

ODC & Transportation: Whatever the size, we carry it. We specialize in ODC
movements. The dedicated team has expertise in the following areas –

• Sourcing and Engaging Trailers.

• Handling and Lading
• Route Planning and en route Facilitation.

30
Primary Movement and Secondary distribution on pan India basis is looked after
by a team specially assembled for their Knowledge and execution capabilities.

• Pan India Network

• Own and Leased Fleet
• Regional Presence
• Freight Buying Team to ensure Best Rates
• Intra – city Distribution

Freight Forwarding: We undertake Freight Forwarding globally. With our

presence in all the airports and sea ports In India, we service imports into and
exports from India. In Hong Kong, we have our own company, which caters to
worldwide exports of Chinese goods manufactured in south and east China as well
as imports into Hong Kong and China. We are in the process of setting up our
offices in South Africa, Europe, Singapore, Indonesia and Middle East.

We have MPO registration. ICD and CFS facilities are also available through our
strategic tie ups.

Warehouse Management and 3PL Services: Bespoke warehousing solutions are

designed and implemented based on the customer’s specific requirements to
optimize costs, ensure accurate inventory, timely movements and throughput. We

31
have in-house software packages to control the warehouse. We also possess
knowledge of several popular WMS packages, which are available if the need
arises for any of our customers.

Dedicated, Multi-user as well as Multi _model warehousing is available on

demand.

Customs House Agent (CHA): Our CHA Team is highly knowledge and
experienced in the regulations covering all imports and exports in India. They are
specialized in the process of imports in India.

We have a rule 8/9 Qualified execution team, with our own CHA License.

• Advances Licensing (EPCG, DEPB, DEEC, DFRC)  Bonding and De-

Bonding of premises and goods.
• In Bond Transportation
• Samples
• Alcoholic Beverages Imports.

MANAGEMENT TEAM OF SLCL:

• Ashok Chattaraj

The founder Chairman & Managing Director of SLCL

• R. S. Unaware

Director

32
 • Kumar. S

Country Head - Projects & Contract Logistics

• Kasi R. M

Executive Vice President – Finance

• Pradeep Narsaria

Finance Controller – Operations

• Malik Sharif

SBU Head – Power Projects

OUR CLIENTS:

33
 CHAPTER – 4

ANALYSIS AND INTERPRETATION

LIQUIDITY RATIOS:

Current Ratio:

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

Current Ratio = Current Assets

Current Liabilities

TABLE

Current Ratio
Year Current Assets Current Liability Current Ratio
2009 9,611,759.00 3,999,555.00 2.4
2010 138,260,548.00 26,511,765.00 5.22
2011 478,357,785.00 33,420,740.00 14.31
2012 597,917,087.00 207,403,273.00 2.88
2013 259,513,175.00 85,966,257.00 3.02

34
(Source: Annual Reports)

Graphical Representation of Current Ratio

INTERPRETATION:
The above table and diagram showed the current ratio of five years (2009-13). The
Current Ratio of Siesta Logistics Corporation Limited varied from 2.4 to 3.02 with
an average of 25.41 the solvency position of Siesta Logistics Corporation Limited.
In terms of current ratio was above the standard norm volume of 2:1 for the entire
period. The Current ratio in the year 2011 is 14.31 which came down to 2.88 in the
year 2012. This shows utilization of idle funds in the company.

Quick Ratio:

35
The Formula for calculating Quick Ratio is as follows:

(Quick Assets=Current Assets=Inventories)

Quick Assets
Quick Ratio=
Current Liabilities

TABLE

Quick Ratio:
Current
Year Quick Assets Current Liability Ratio
2009 9,073,408.00 3,893,759.00 2.33
2010 105,696,012.00 24,774,036.00 4.27
2011 391,035,508.00 29,684,351.00 13.17
2012 477,061,275.00 207,403,273.00 2.3
2013 206,356,413.00 85,966,257.00 2.4

(Source: Annual Reports)

36
Graphical Representation of Quick Ratio

INTERPRETATION:
The above table and diagram shows the Quick Ratio of five years (2009-2013). As
per the annual reports the ideal Ratio is not 1:1 in any financial year. The high
Quick Ratio indicates that the firm has the ability to meet its current liabilities. It
confirms that the liquidity position of Siesta Logistics Corporation Ltd. In terms of
quick ratio were more than the above standards.

LEVERAGE OR CAPITAL STRUCTURE RATIO:

37
Debt Equity Ratio:
The Formula for calculating RE is as follows:

Total Liabilities
Debt Equity Ratio = _______________________________
Shareholder’s Funds or Net Worth

Shareholders‟ Fund includes Share Capital, Reserves and P & L A/c

TABLE
Debt Equity Ratio

Shareholders'
Year Total Liability Fund Debt Equity Ratio
2009 3,999,555.00 621,067.00 6.44
2010 26,511,765.00 3,831,775.00 6.92
2011 33,420,740.00 407,431,187.00 0.08
2012 207,403,273.00 424,727,372.00 0.49
2013 85,966,257.00 179,156,303.00 0.48
(Source: Annual Reports)

38
Graphical Representation of Debt Equity Ratio

INTERPRETATION:
This Ratio is calculated to assess the ability of the firm to meet its long term
liabilities. Generally, debt equity ratio of is considered safe. The standard norm for
the ratio is 2:1. The actual debt-equity ratio in the above table shows, the first two
years less than the standard ratio after the ratio has decreased from 6.44 in 2009 to
0.08 in 2011 and again raises to 0.49 and 0.48 in the 2012 and 2013 respectively.
This indicates from the study that the firm tries to reduce the debt and reducing
financial risk of the firm when both ratios of the year 2009 and 2013 are compared.

Proprietary Ratio:

39
The Formula for calculating Proprietary Ratio is as follows:

Shareholder’s Funds
Proprietary Ratio =
Total Assets

Shareholders' Fund = Preference Share Capital + Equity Share Capital

+ All Reserves and Surplus

Total Assets = Tangible Assets + Non-Tangible Assets + Current Assets (or) All
Assets including Goodwill

TABLE
Proprietary Ratio

Shareholders' Proprietary
Year Fund Total Assets Ratio
2009 621,067.00 10,556,873.00 0.06
2010 3,831,775.00 150,725,802.00 0.03
2011 407,431,187.00 492,987,127.00 0.83
2012 424,727,372.00 638,489,824.00 0.67
2013 179,156,303.00 304,920,525.00 0.59

40
(Source: Annual Reports)

Graphical Representation of Proprietary Ratio

INTERPRETATION:
The above table shows the Proprietary Ratio of five years that is from 2009-2013
of Siesta Logistics Corporation Ltd. This ratio used to determine the financial
stability of the concern in general. Proprietary Ratio indicates the share of owners
in the total assets of the company. In the first two years the ratio is low i.e., 0.06
and 0.03 in 2009 and 2010 respectively this indicates that long-term loans are less
secured and they face the risk of losing their money. It is increased in the year 2011
that means a firm is less dependent on external sources of finance.

41
ACTIVITY RATIO OR TURNOVER RATIO

Fixed Assets Turnover Ratio:

The Formula for calculating Fixed Assets Turnover Ratio is as follows Formula is:

Cost of Goods Sold

Fixed Assets Turnover Ratio=
Net Fixed Assets

Here, Net Fixed Assets = Fixed Assets – Depreciation

TABLE

Fixed Assets Turnover Ratio

Cost of Goods Net Fixed Assets Fixed Assets Turnover

Year Sold Ratio

2009 (17,635.00) 1,07,337.00 -0.16

2010 1,41,53,984.00 10,80,322.00 13.10

2011 7,19,33,592.00 35,45,677.00 20.29

2012 84,15,71,444.00 4,45,86,237.00 18.88

2013 44,17,34,481.00 4,94,20,850.00 8.94

42
(Source: Annual Reports)

Graphical Representation of Fixed Assets Turnover Ratio

The above table and diagram shows the relationship between costs of goods sold
and Net Fixed Assets. In the year 2009 - 0.16 the company has not utilized the
fixed assets. In the year 2010 the ratio has been increased to 13.10 and in the year
2011 the sales has been increased a lot. It shows that a sale is 4 times more than
fixed assets. 20.29 again decrease to 18.88 and 8.94 in the year 2012 and 2013.

Working Capital Turnover Ratio:

The Formula for calculating Working Capital Turnover Ratio is as follows Formula
is:

43
 Cost of Goods Sold
Working Capital Turnover Ratio =
Working Capital

Here, Cost of Goods Sold = Opening Stock + Purchases + Carriage + Wages

+ Other Direct Expenses – Closing Stock
Working Capital = Current Assets – Current Liabilities

TABLE

Working Capital Turnover Ratio

Cost of Goods Working Working Capital Turnover
Year Sold Capital Ratio
2009 (17,635.00) 51,79,649.00 0.00
2010 1,41,53,984.00 8,09,21,976.00 0.17
2011 7,19,33,592.00 36,13,51,157.00 0.20
2012 84,15,71,444.00 26,96,58,002.00 3.12
2013 44,17,34,481.00 12,03,90,156.00 3.67
(Source: Annual Reports)

Graphical Representation of Working Capital Turnover Ratio

44
In the above Table and Chart the velocity of the utilization of Working Capital ratio
have been observed that in the year 2009 it is showing the negative percentage that
is 0.00 and from the year 2010 the ratio is been increased to 0.17, and constantly
increasing until 2013 which means that the working capital turnover ratio has been
used efficiently in the business.

Capital Turnover Ratio:

The Formula for calculating Capital Turnover Ratio is as follows Formula is:

Sales

45
 Capital Turnover Ratio=

Capital Employed

TABLE
Capital Turnover Ratio

Capital Capital Turnover

Year Sales Employed Ratio
2009 35,796.00 67,10,028.00 0.01

2010 1,90,20,980.00 6,52,66,174.00 0.29

2011 7,57,98,964.00 44,59,17,212.00 0.17

2012 1,15,76,726.00 42,47,27,372.00 0.03

2013 91,94,583.00 17,91,56,303.00 0.05

(Source: Annual Reports)

Graphical Representation of Capital Turnover Ratio

46
INTERPRETATION:
The above table and diagram shows the relationship between sales and capital
employed. In the year 2009 it was 0.01 and it increases to 0.29 in the year 2010
then it decreases to 0.17 in the year 2011 again decreases to 0.03 in the year 2012
and the year 2013 it increases to 0.05 .It shows that picture of capital turnover ratio
indicating that the company is striving to make a profit and sales out of the capital
which it is employing.

47
PROFITABILITY RATIO

PROFITABILITY RATIO BASED ON SALES

Gross Profit Ratio:

The Formula for calculating Gross Profit Ratio is as follows Formula is:

Gross Profit
Gross Profit Ratio = X 100
Net Sales

Here, Net sales = Sales – Sales Return

TABLE

Gross Profit Ratio

Year Gross Profit Net Sales Gross Profit Ratio
2009 53,431.00 1,20,77,275.00 0.44
2010 48,66,996.00 22,66,55,598.00 2.15
2011 38,65,372.00 65,60,80,452.00 0.59
2012 2,60,03,003.00 1,04,39,71,057.00 2.49
2013 24,60,84,766.00 65,14,37,853.00 37.78

(Source: Annual Reports)

48
Graphical Representation of Gross Profit Ratio

INTERPRETATION:

The above table and diagram shows the profit earned by the company before tax
and interest payable. This ratio measures the margin of profit available on sales.
The higher the gross profit ratio, the better it is. In the year 2009 the profit ratio
was very less 0.44 and its been increased to 2.15 in the year 2010 again decreases
to 0.59 in 2011 but in the year 2013 it was highly increased to 37.78.

Net Profit Ratio:

The Formula for calculating Net Profit Ratio is as follows Formula is:

49
 Net Profit

Net Profit Ratio = X100

Net Sales

TABLE

Net Profit Ratio

Year Net Profit Net Sales Net Profit Ratio
2009 1,21,067.37 1,20,77,275.00 1.00
2010 33,31,775.00 22,66,55,598.00 1.47
2011 55,98,545.00 65,60,80,452.00 0.85
2012 1,72,96,185.00 1,04,39,71,057.00 1.66
2013 24,55,71,070.00 65,14,37,853.00 37.70

(Source: Annual Reports)

Graphical Representation of Net Profit Ratio

50
 Net Profit Ratio

40.00 37.70

35.00

30.00
R
a 25.00
t
20.00
i
o 15.00
s
10.00

5.00
1.00 1.47 0.85 1.66
0.00
2009 2010 2011 2012 2013
Years Net Profit Ratio

INTERPRETATION:

The above table and diagram shows the relationship between net profit and sales.
Net profit ratio was 1.00, 1.47, 0.85, 1.66, and 37.70 in respective year of 2009,
2010, 2011, 2012 and 2012 so the company achieved maximum Net profit ratio in
the year 2013 ratio is 37.70 .

Operating Ratio:

51
The Formula for calculating Operating Ratio is as follows Formula is:

Cost of Goods Sold + Operating Expenses

Operating Ratio = X 100

Net Sales

TABLE

Operating Ratio

Cost of Goods
Sold+ Operating Operating
Year Expenses Net Sales Ratio
2009 1,19,53,384.00 1,20,77,275.00 98.97
2010 25,18,99,397.00 22,66,55,598.00 111.14
2011 79,01,99,840.00 65,60,80,452.00 120.44
2012 1,48,85,95,462.00 1,04,39,71,057.00 142.59
2013 58,07,51,452.00 65,14,37,853.00 89.15

(Source: Annual Reports)

Graphical Representation of Operating Ratio

52
 Operating Ratio

160.00
142.59
140.00
120.44
120.00 111.14
R
98.97
a 100.00 89.15
t
80.00
i
o 60.00
s 40.00

20.00

0.00
2009 2010 2011 2012 2013
Years Operating Ratio

INTERPRETATION:

The above table and diagram shows the higher ratio which indicates that the
company is not able to maintain their operational efficiency but in the year 2013 it
shows that the firm is slowly moving towards the level of operational efficiency
which is a sign for the company.

PROFITABILITY RATIO BASED ON INVESTMENT

Return on Total Shareholder’s Funds:

53
The Formula for calculating Return on Total Shareholder’s Funds is as follows
Formula is:

Net Profit After Interest and Tax

Return on Total Shareholder’s Fund =

Total Shareholder’s Funds

Where, Total Shareholder’s Funds = Equity Share Capital + Preferences

Share Capital + All Reserved +P&L Account Balance – Fictitious Assets

TABLE
Return on Total Shareholder’s Fund

Total
Net Profit After Shareholder’s Return on Total
Year Interest and Tax Funds Shareholder’s Fund
2009 1,21,067.37 6,21,067.00 0.19
2010 33,31,775.00 38,31,775.00 0.87
2011 55,98,545.00 40,74,31,187.00 0.01
2012 1,72,96,185.00 42,47,27,372.00 0.04
2013 24,55,71,070.00 17,91,56,303.00 1.37
(Source: Annual Reports)

Graphical Representation of Return on Total Shareholder’s Fund

54
INTERPRETATION:

The above table and diagram shows relationship between net profits earned and
Total Shareholder’s Funds. This ratio reveals how profitability the proprietor‟s
funds have been utilized by the firm. A comparison of this with that of similar
firms will throw light on the relative profitability and strength of the firm. In the
year 2010 and 2013 the shareholders fund have been utilized very efficiently in the
business when compared to the remaining years.

Earnings Per Share (E.P.S):

The Formula for calculating Earnings Per Share is as follows Formula is:

55
 Net Profit – Dividend on Preference
Shares
Earnings Per Share =

No. of Equity Shares

TABLE

Earnings Per Share

Net Profit – Dividend Per

on No. of Equity Earnings
Year Preference Shares Shares Share
2009 1,21,067.37 5,00,000.00 0.24

2010 33,31,775.00 5,00,000.00 6.66

2011 55,98,545.00 45,81,710.00 1.22

2012 1,72,96,185.00 45,81,710.00 3.78

2013 24,55,71,070.00 45,81,710.00 53.60

(Source: Annual Reports)

Graphical Representation of Earnings Per Share

56
INTERPRETATION:

Earnings per share ratio was 0.24, 6.66, 1.22, 3.78 and 53.60 in respective year of
2009, 2010, 2011, 2012, and 2013 . The share capital is constant in the year 2009
and 2010 again constant from the year 2011 to 2013. In the year 2009 the net profit
is less so the earnings per share are 0.24. Due to the huge increase in net profit the
earnings per share is greatly increased in 2013.

CHAPTER - 5 Findings, Recommendations and Conclusion

FINDINGS

57
• The current ratio is fluctuating every year that is 2.4, 5.22, 14.31, 2.88 and
3.02 during 2011 which indicates a continuous increase in both current
assets and current liabilities.
• The quick ratio is also fluctuating throughout the period 2009 – 2013
resulting as 2.33, 4.27, 13.17, 2.3 and 2.4. It confirms that the liquidity
position of Siesta Logistics Corporation Limited. In terms of quick ratio
were more than the above standards.
• Proprietary Ratio is increased in the year 2011 that means a firm is less
dependent on external sources of finance.
• In the year 2009 the stock turnover ratio shows negative balance but from
the year 2010 the stock ratio is showing increasing balance still 2012 which
indicate that the stock has not been used efficiently in sales and again in the
year 2013.
• The fixed assets turnover ratio is increasing from the year 2010 to 2013 that
is 13.10, 20.29, 18.88 and 8.94. It indicates that the company is efficiently
utilizing the fixed assets.
• In the year 2009 it is showing the negative percentage that is 0.00 and from
the year 2010 the ratio is been increased to 0.17, and constantly increasing
until 2013 which means that the working capital turnover ratio has been used
efficiently in the business.

58
 • Current assets turnover ratio was 1.26, 0.14, 0.16, 1.45and 2.65 in respective
years of 2009, 2010, 2011, 2012 and 2013 so the company achieved
maximum Current assets turnover ratio in the year 2013 is 2.65.
• Gross profit ratio is been fluctuating every year which tells us that the
company’s profit is not remaining constant.
• Net profit ratio was 1.00, 1.47, 0.85, 1.66, and 37.70 in respective year of
2009, 2010, 2011, 2012 and 2012 so the company achieved maximum Net
profit ratio in the year 2013 ratio is 37.70. .
• The share capital is constant in the year 2009 and 2010 again constant from
the year 2011 to 2013. In the year 2009 the net profit is less so the earnings
per share are 0.24. Due to the huge increase in net profit the earnings per
share is greatly increased in 2013.

RECOMMENDATIONS

• Siesta Logistics Corporation Limited is enjoying liberal credit facilities from

its suppliers. It should continue to take advantage of high creditor‟s
payment.
• The ERP system already established in the division should be strictly
monitored. One committee is required to be setup with the representative of
all departments and the committee should review the function of the system
regularly.

59
 There is a gradual increase in the value of slow moving and non-moving
items. Hence efforts should be made to reduce the size of inventory by
analyzing the slow &nonmoving items and disposing them periodically.
• The company should make an effort to increase the return on investment.
• The overall performance of the organization is on an average and quite
satisfactory.
• Siesta Logistics Corporation Limited should focus its attention on efficient
inventory management. It should evolve such a system that there is efficient
and timely use of inventory.
• It is recommended that the company should aim at achieving higher returns
on investment, by better utilization and allocation of funds employed in the
business which in return helps the company to meet its long-term objectives.
• The operating income and expenses are fluctuating every year. Efficient
monitoring has to be done so that income and expenses standards can be
maintained.

CONCLUSION

The project of Ratio analysis in the service industry is not merely a work of the
project. But a brief knowledge and experience that how to analyze the financial
performance of the firm. The study undertaken has brought in to the light of the
following conclusions. According to this project I came to know that from the
analysis of financial statements it is clear that Siesta Logistics Corporation Limited
the company have been incurring profit during the period of study. So the firm
should focus on getting of huge profits in the coming year by taking care internal
as well as external factors. Gross profit and net profit of the Siesta Logistics

60
Corporation Limited is fluctuating over the past five years. On an average the
Siesta Logistics Corporation Limited overall performance is quite satisfactory.

61
 BIBLOGRAPHY

REFERENCES:

Reports:

• Annual Report of Siesta Logistics Corporation Limited (5 years)

WEBSITES:

• www.siestalogistics.com
• www.wikepidea.com
• www.studyindia.org
• www.ratioanalysis.net
• http://www.investopedia.com
• www.indiainfoline.com
• www.moneycontrol.com
• www.secuties.com

62
 ANNEXURE

BALANCE SHEET AS AT 31ST MARCH, 2009 TO 31ST MARCH, 2011

SCHEDULE 31-Mar-09 31-Mar-10 31-Mar-11
No. (Rs.) (Rs.) (Rs.)
SOURCES OF
FUND

1. Shareholders'
Fund

a Share Capital 1 500,000.00 500,000.00 4,581,710.00

b Reserves and 2 121,067.00 3,331,775.00 402,849,477.0
Surplus

2. Loan Funds

Secured
a. Loans 3 61,434,399.00 38,486,025.00
b. Unsecured 6,088,961. 58,572,411.00 25,563,212.00
. Loans 4 0

Deferred Tax 107,930.00 549,218.00 1,282,820.00

Liability 6,817,958. 124,387,803.0 472,763,244.0

0 0 0
TOTAL
0
APPLICATION OF
FUNDS

1. Fixed Assets 5

63
 Gross Block

Depreciation 1,052,451.
0 13,545,576.00 18,175,019.00
0
Net Block 107,337.00 1,080,322.00 3,545,677.00
945,114.00 12,465,254.00 14,629,342.00
6
2. Investments 6 - 13,196,857.00

3. Current Assets, Loans and

Advances

Cash and Bank 407,457.00 3,690,318.00 138,788,265.0

Balances 7 0
Sundry Debtors 8 8,665,951. 102,005,694.0 252,247,243.0
0

Loan & 538,351.00 32,564,536.00 87,322,277.00

Advances 9
9,611,759. 138,260,548.0 478,357,785.0
0

64
BALANCE SHEET AS AT 31ST MARCH, 2012 & 31ST MARCH, 2013
NOTE No.

Equity And Liabilities

1. Shareholders' Fund

a. Share Capital 2.1 4,581,710.00 4,581,710.00

b. Reserves and Surplus 2.2 420,145,662.00 174,574,593.00
Money received against
c. Share warrants

2. Non-Current Liabilities

a. Long-term Borrowings 2.3 27,321,811.00 201,478,612.00

Differed Tax Liabilities
2.4
b. (Net) 2,289,638.00 1,775,942.00
Other Long Term
c. Liabilities - -
d. Long-term Provisions 2.5 1,203,020.00 1,238,011.00

3. Current Liabilities

a. Short-term Borrowing 2.6 126,836,915.00 -

b. Trade Payables 2.7 58,800,887.00 67,216,976.00
c. Other Current Liabilities 2.8 13,180,037.00 2,596,000.00
d. Short-term Provisions 2.9 16,153,281.00
8,585,434.00

TOTAL 662,945,114.00 469,615,125.00

65
Assets

1. Non-Current Assets
Fixed Assets 40,572,737.00
Tangible Assets 2.10 45,407,350.00
Intangible Assets - -
Capital Work-in-progress 4,013,500.00 4,013,500.00

Non-Current Investments 2.11 13,224,971.00 13,224,971.00

Long Term Loans and

Advances 2.12
7,216,819.00 147,456,129.00

2. Current Assets
Trade Receivables 2.13 378,360,320.00 199,898,640.00
Cash and Cash Equivalents 2.14 98,700,955.00 6,457,773.00
Loans and Advances 2.15 120,855,812.00 53,156,762.00
Other Current Assets

TOTAL 662,945,114.00 469,615,125.00

66