`CHAPTER 1

INTRODUCTION ABOUT THE ORGANISATION AND

INDUSTRY

INTRODUCTION
The manufacturing industry is a vital sector that involves the production of goods through
various processes, such as raw material conversion, assembly, and fabrication, to create
finished products. It encompasses a broad range of sectors, including automotive, electronics,
textiles, pharmaceuticals, and more. Manufacturing plays a crucial role in the global economy
by contributing to innovation, employment, and economic growth while utilizing technology
and skilled labor to transform raw materials into products used in everyday life.

The manufacturing industry encompasses a wide array of sectors involved in the production
of goods, ranging from automobiles and electronics to food and pharmaceuticals. It involves
converting raw materials or components into finished products through various processes like
assembly, fabrication, and machining. This sector significantly impacts the economy by
contributing to employment, innovation, and trade while relying on advancements in
technology and skilled labor to enhance productivity and create high-quality products for
consumers worldwide. The manufacturing industry is a cornerstone of economies worldwide,
encompassing diverse sectors that produce goods for consumption. It involves transforming
raw materials or components into finished products through various processes like casting,
molding, machining, and assembly. This sector heavily relies on innovation, automation, and
skilled labor to enhance efficiency, quality, and output. Manufacturing significantly
contributes to economic development, job creation, technological advancements, and global
trade, playing a pivotal role in shaping societies and meeting the demands of consumers
across different markets.

The manufacturing industry has long been reliant on lean manufacturing models to achieve
profitability. What began with just-in-time manufacturing concepts progressed to continuous
improvement, quality initiatives, and now supply-chain collaboration. By 2017, supply-chain
collaboration software is projected to be a $3.4 billion market. Driving this growth projection
is the manufacturer’s need to increase and refine operating efficiencies. The Internet is

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providing the platform for manufacturers and their supply chains to act as a seamlessly
integrated manufacturing entity. Via the Internet, the supply chain can be managed more cost-
effectively than ever before. Prior to the web, this could only be accomplished with expensive
closed systems such as EDI. In addition, business has embraced outsourced production as
cost and time-to-market pressures have increased. The opportunity for Web Wired is to
replace cumbersome EDI and other closed systems with web technologies to facilitate supply
change management.

Web Wired will therefore capture significant market share by delivering an open web-based
product that provides change execution assurance both internally to global manufacturers and
as throughout their supply chains.

The manufacturing industries are forced to sustain with increased demand of competition and
customized services that are adding value to the products. Embedded systems designers have
adapted the web browser as a standard user interface technology for network-attached
devices. This ubiquity has made possible a revolution in module management, improving the
time to market and cost of sophisticated network interfaces for devices. In increment, they are
innovative to be fast and preferred than the earlier ones. A unified framework for discrete
time efficiency of continuous nonlinear systems, based on neural network model, has not
been built for the purpose of product development process. Therefore, it is necessary to build
a tool system for adaptive integration in product development. A complex systems concept
envelops unity and integration. This organizes otherwise the mystifying properties of diverse
complex systems through the use of dynamic simulations.

Obviously, the product development with tools and skills is a complex system, which needs
adaptive interpretations. This is, due to nonlinear activities. Therefore, the complex system is
further re-engineered as modules. It is rather modeled to fit the man-machine interfaces. This
is done through a black box approach. This black box is able to handle the dynamic feedbacks
from the complex system trajectory. This, in turn, enhances the agent-network and identifies
the goal for achievement. In 1995, manufacturing industry accounted for 41% (131 exajoules
[EJ], where EJ=1018 J) of global energy use. Between 1971 and 1995, industrial energy use
grew at a rate of 1.7% per year, slightly less than the world total energy demand growth of
2.1% per year. This growth rate has slowed during recent years and was virtually flat between
1990 and 1995, primarily because of declines in industrial output in the transitional
economies in Eastern Europe and the former Soviet Union. Energy use in the industrial sector

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is dominated by the industrialized countries, which accounted for 43% of world industrial
energy use in 1995. Industrial energy consumption in these countries increased at an average
rate of 0.6% per year between 1971 and 1990, from 49 to 54 EJ. The share of industrial sector
energy consumption within the industrialized countries declined from 40% in 1971 to 33% in
1995. The decline partly reflects the transition toward a less energy–intensive manufacturing
base, a shift toward a more service-oriented economy, and the continued growth in
transportation demand resulting in large part from the rising importance of personal mobility
in passenger transport use.

The industrial sector dominates in the economies in transition, accounting for more than 50%
of total primary energy demand, the result of the emphasis on materials production, a long-
term policy promoted under years of central planning. Average annual growth in industrial
energy use in this region was 2.0% between 1971 and 1990 (from 26 to 38 EJ) but dropped
by an average of 7.3% per year between 1990 and 1995. Even so, in 1995 industry accounted
for 51% of primary energy use in these countries. In the Asian developing countries,
industrial energy use grew rapidly between 1971 and 1995, with an annual average growth
rate of 5.9%, jumping from 9 to 35 EJ. It also accounted for the greatest share of primary
energy consumption (i.e., 58% in 1995). The fastest growth in this sector was seen in China
and in other rapidly developing Asian countries. Growth in other developing countries was
slightly lower.

The nature and evolution of the industrial sector varies considerably among developing
countries. Some economies that are experiencing continued expansion in energy–intensive
industry, such as those in China and India, show relatively unchanging shares of industrial
energy use. In other countries, such as Thailand and Mexico, the share and/or growth of the
transportation sector dominate. Many smaller countries have remained primarily agrarian
societies with modest manufacturing infrastructures. Future trends in industrial energy use
will be affected by many different challenges. Globalizing trade patterns will affect industrial
competition as well as technology transfer. Global environmental challenges such as climate
change will lead to an increased focus on energy efficiency and changing energy
consumption patterns and fuel choice. Regional and local environmental problems will also
drive changes in industrial energy use in both industrialized and developing countries.
Beginning in the 1970s, manufacturing industries set up factories in the rural zones of many
developing nations, especially in Asia and Latin America, as well as the poorer nations of
Europe. Many of the production workers are women, working in canning or the assembly of

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garments, electronics, and products related to local crafts. Sometimes work is done at home
with payment by the piece. While rural women have always worked in the home and on
family farms, these industries represent the first opportunity for women to work for a wage
without migrating to cities. Rural women have been a source of cheap, flexible, and relatively
powerless labor for industry. The employers take advantage of, and also reinforce, traditional
patriarchal relations. Through the ‘social construction of difference,’ employers devalue
women's work and justify paying it less than ‘men's work.’ Male family members seek to
maintain gendered notions that women have a moral obligation to do domestic work, to obey
male authority, and to contribute any earnings to the family. However, women's employment
may gradually empower women in the family. Organized through international
nongovernmental organizations (NGOs), women are also beginning to contest their wages
and working conditions. The e-business leaders in the manufacturing industries will not be
the companies that launch the attractive website or deploy the most sophisticated Internet-
enabled manufacturing technology. The companies that align their people, plants and internal
business processes can gain the maximum leverage from Internet technology and tap into the
vast potential of e-business. The future of e-business in the process industries is coming into
focus and information is created and distributed in real time. The gap between customers and
suppliers effectively shrinks and expectations rise. The main characteristic, which sets the
process industries apart from other industries, is their asset-intensiveness that is huge and
costly. Due to the continuous nature of most processes, product changeovers are more
complex and less frequent than in discrete manufacturing facilities. Therefore product
customization and improved customer service is less likely to come from make-to-order
production than it is from improved business processes, a better and more accurate
understanding of the plant's capabilities, and more accurate production planning via
collaborative forecasting. This will all help process manufacturers in meeting their customers’
rising expectations and serve their individual needs. It requires consistent and interoperable
business processes and software and web-based services to support those improved internal
business processes. Leading manufacturers will answer their customers’ demands for
improved customer service by providing portals into their operations, which will help
integrate shared business processes such as improved production planning and collaborative
forecasting. Finally, Internet-based exchanges will streamline pricing and distribution.
Commodity products will move more quickly and efficiently through the distribution network
while specialized, value-added products command premium prices and become increasingly
customized to end-user needs. In most industries, e-business entails a transfer of power from

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vendors to their customers. Vendors who understand and embrace this shift stand to reap
significant benefits.

Manufacturing sector is considered the backbone of development in general and economic

development in particular mainly because–

• Manufacturing industries not only help in modernizing agriculture, which forms the
backbone of our economy, they also reduce the heavy dependence of people on agricultural
income by providing them jobs in secondary and tertiary sectors.

• Industrial development is a precondition for eradication of unemployment and poverty from

our country. This was the main philosophy behind public sector industries and joint sector
ventures in India. It was also aimed at bringing down regional disparities by establishing
industries in tribal and backward areas.

• Export of manufactured goods expands trade and commerce, and brings in much needed
foreign exchange.

• Countries that transform their raw materials into a wide variety of finished goods of higher
value are prosperous. India’s prosperity lies in increasing and diversifying its manufacturing
industries as quickly as possible.

Contribution of Manufacturing Industry to National Economy

Over the last two decades, the share of manufacturing sector has stagnated at 17 percent of
GDP – out of a total of 27 per cent for the industry which includes 10 per cent for mining,
quarrying, electricity and gas. This is much lower in comparison to some East Asian
economies, where it is 25 to 35 per cent. The trend of growth rate in manufacturing over the
last decade has been around 7 per cent per annum. The desired growth rate over the next
decade is 12 percent. Since 2003, manufacturing is once again growing at the rate of 9 to 10
percent per annum. With appropriate policy interventions by the government and renewed
efforts by the industry to improve productivity, economists predict that manufacturing can
achieve its target over the next decade. The National Manufacturing Competitiveness Council
(NMCC) has been set up with this objective.

Importance of manufacturing industries

1. Modeling Agriculture
2. Provide jobs in secondary tertiary sector

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 3. Bring down regional disparities
4. Eradication of Unemployment

Factors of Industrial Location

Availability of raw materials: In determining the location of an industry, nearness to

sources of raw material is of vital importance. Nearness to the sources of raw materials would
reduce the cost of production of the industry. For most of the major industries, the cost of raw
materials forms the bulk of the total cost. Therefore, most of the agro based and forest-based
industries are located in the vicinity of the sources of raw material supply.

Availability of Labor: Adequate supply of cheap and skilled labor is necessary for the
industry. The attraction of industry towards labor centers depends on the ratio of labor cost to
the total cost of production which Weber calls Labor cost of Index. The availability of skilled
workers in the interior parts of the Bombay region was one of the factors responsible for the
initial concentration of the cotton textile industry in the region.

Proximity to Markets: Access to markets is one of the important factors affecting

location of industries that the entrepreneur must take into consideration. Industries producing
perishable or bulky commodities which cannot be transported over long distances are
generally located in close proximity to markets.

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Industries located near the markets could be able to reduce the costs of transport in
distributing the finished product as in the case of bread and bakery, ice, tins, cans
manufacturing, etc. Accessibility of markets is more important in the case of industries
manufacturing consumer goods rather than producer goods.

Transport Facilities: Transport facilities, generally, influence the location of industry.

Transportation with its three modes, i.e., water, road, and rail collectively play an important
role. So the junction points of waterways, roadways, and railways become humming centers
of industrial activity.

Further, the modes and rates of transport and transport policy of the Government
considerably affect the location of industrial units. The heavy concentration of the cotton
textile industry in Bombay has been due to the cheap and excellent transportation network
both in regard to raw materials and markets.

Miscellaneous Factors: Historical incidents also play a dominating role in determining

the location of industries in certain cases. The development of the cotton textile industry in
Lancashire provides an interesting example of this. Further, the size of an industrial unit
would also have much influence in choosing a location.

This is because the size of industrial units depends upon the radius of the circle within which
they can profitably distribute their goods and upon the density of the population living within
the circle.

The manufacturing industry remains a cornerstone of economic development, driving

innovation, employment, and technological advancements worldwide. Its adaptability to
evolving technologies and market demands continually reshapes production methodologies,
fostering growth, efficiency, and sustainable practices while meeting the needs of diverse
consumer markets. As manufacturing continues to evolve, its significance in shaping global
economies and improving quality of life remains indispensable.

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 Chapter – 2

Organization Profile

2. ORGANISATIONAL PROFILE

i. Back ground

Bhavani industries, Bengaluru was established way back in 1987, by Shri. AJ Hegde. Mr.
Hegde has vast experience in machining and manufacturing technology. A wide range of
Precision Machined components are manufactured and supplied to different industries and are
used on a variety of products and sub-assemblies.

His rich experience working in HMT Ltd and CMTI Bengaluru in the areas of machining and
production engineering has helped the company to grow faster.

Mr. Chethan J Hegde joined his father in 1997 after completion of his technical and
management education. His dedication and passion for High-tech manufacturing had lead
Bhavani Industries to rapid growth from the year 2001.

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Bhavani Industries has more than 120 CNC Machines, host of Conventional machines,
Special equipment’s and well equipped inspection facilities with IATF 16949:2016
certification. The two plants are located in the outskirts of Bengaluru city. Bhavani Industries
manufactures precision machined components used in Automobile, Medical, Electronics,
Communication and General Engineering Industries. The Bhavani team is over 200 efficient
manpower that includes Managers, Engineers & Technicians. Experienced, Qualified
Engineers are Bhavani Industries constantly involved with customer’s right from their
product development stage. Our active support and expertise in development of complex
machined parts has helped our customers to drastically reduce time for the development of
their new products.

ii. MANAGEMENT TEAM

Mr. A J Hegde, CEO

Mr. A J Hegde is CEO & Promoter of the company. A

Mechanical Engineering graduate with MBA in Marketing. He
has worked in reputed organizations like HMT & CMTI
Bangalore for 25 years. Total experience in manufacturing is 45
years. The state-of-the-art hi-tech manufacturing facilities are
setup by him. With his vast experience he has developed many
challenging products.

Mr. Chethan J Hegde, MD

Mr. Chethan J Hegde is the Managing Director of the company.

A Mechanical Engineering graduate with MBA in Marketing.
He is responsible for development of new products and
technology up-gradation. Total experience in the company is 18
years.

The components exported are used in Electronics, Telecommunication, Medical Equipment’s,

Hydraulics & General Engineering Industries. Our consistent Quality, On-time delivery and
competitive pricing are the factors influencing the growth of export sales for the last 10 years.

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Bhavani Industries believes in a customer relationship that is strong and deep-rooted. The
company’s dedication to its clients is a continuing commitment. As partners in their progress,
we believe in growing with them & have consistently supported them in developing new
products which in turn has resulted in our business growth.

iii. VISION AND MISSION

We at Bhavani group are visualizing a future with technological excellence. Keeping in space
with changing concepts. Global innovations and technological excellence. We wish to
sharpen our focus in areas to be leading player embracing technological innovation and
developments to leave footprints as pioneers of upcoming technologies.

We aspire to have most modern products facilities keeping in space with rapidly changing
industrial environment to ensure satisfaction of the customer base with global presence in
high technology areas. Our man force should be highly competent with unfettered vision,
driven to excellence, dedicated, loyal and motivated to absolute performance to build our
core team.

Energy, conservation, clean environment and pollution free world shall be our contributory
endeavor for a healthy global environment.

iv. PRODUCTS

Brakes and clutches

Brakes And Clutches Wheel cylinder Plungers for Drum Brake

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Turbo charges

Flinger sleeve for turbo charges Central housing cover for turbo charges

Fuel injection system

Milk Analyser part Parts for Power Tool Application

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Holders for Tools used in Electronic Industry Parts for Cabin Tilting system

v. OUR STRENGTH

Our domestic customers are mostly from Automotive sector and they are the leaders in that
product group. We manufacture large variety of critical parts of Automotive brakes, Fuel
Injection system, Turbo Chargers & Automotive instruments. In Non-Automotive sector, our

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customers from Medical Equipment’s, Process Automation and General Engineering
Industries.

vi. INFRASTRUCTURE

Major manufacturing processes constitute of forging of raw material to net/ near net shape
through cold, warm or hot forging. For forging plant is equipped with mechanical presses,
hammers and inhouse die shop with CNC machines to manufacture the die of at most
precision for machining various precious turning, milling and gear cutting techniques and
processes are used to bring the part to the final shape. Parts are thereafter heat treated in
sophisticated furnaces to achieve metallurgical requirements and are finally ground to make
them ready to assemble and dispatch.

The plant is currently producing around 2 million parts per month of various shapes and sizes
for various applications, out of these 4 lakh parts are gears for the transmission segment.

vii. WORK FLOW MODEL

A workflow is an end-to-end process that helps teams meet their goals by

connecting the right people to the right data at the right time. Workflows move
data (tasks) through a series of steps from initiation to completion. Once it’s set
up, a workflow helps you organize information in a way that is not only
understandable but also repeatable.

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viii. RECRUITMENT PROCESS

Recruitment is the process of finding and hiring qualified employees to fill open
positions in a company. Recruiters, human resources managers, hiring managers
or talent acquisition specialists generally conduct recruiting activities. Large
companies usually have recruiting departments whose primary role is
developing job postings and reaching candidates. In smaller companies,
department managers may be directly responsible for recruiting their own new
staff members, or the owner may oversee recruitment.

The recruitment process includes every stage of obtaining new employees, from
planning what to include in a job posting to the interview process. Research and
outreach are important to recruiting efforts, as recruitment can involve
proactively targeting passive candidates who suit company needs or evaluating
submitted applications to find the most qualified candidates.

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 recruitment

sourcing

screening

interview

background
verification

onboarding

• RECRUITMENT

The process of attracting potential job applicants from available labour force.
Every organization must be able to attract enough of the job candidates who
have the abilities and aptitudes needed to help the organization to achieve its
objectives

• SOURCING

Sourcing is a strategy that falls under the talent acquisition umbrella. It involves
recruiters proactive Finding, engaging, and ultimately hiring candidates that
they think would fit the company and the role.

• SCREENING

The screening process is the most time-intensive facet of the hiring process.
Candidate screening is a process of determining whether a candidate is qualified

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for the role based on their education, experience, and information based on their
resume.

• INTERVIEW

Interview is a purposeful exchange of ideas, the answering of questions and

communication between two or more persons. Generally, an interview is a
process of private meeting conversation between people, where questions are
asked and answered, for obtaining information about qualities, attitudes.

• BACKGROUND VERIFICATION

The employee background verification process broadly involves looking back at

the candidate’s history in terms of work, study, and legal records, and address.

• ONBOARDING

Onboarding is the term for the process by which new hires at a company are
brought on board with company objectives and culture. Also called
organizational socialization, orientation, or new hire

training and orientation, the onboarding process folds new employees into the
company and attempts to make them effective managers or contributing
members of a team.

FUTURE GROWTH AND PROSPECTS

Here are some of the aspects which they wanted to focus on the future growth,
some of them are;

 Providing good training to the employees to work effectively

 To maximize the production capacity of the company.
 To maintain the positive culture working environment.


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ix. AWARDS AND ACCREDITATIONS

Year
Awards for Issued by

2018 Quality excellence Meritor Europe truck

2017 Exemplary project Daimler India commercial

management vehicles

2016 Supplier quality excellence General motors

award

2016 Supplier of the year Meritor group

2015 Delivery excellence Meritor group

2014 Special recognition award Tata motors - Sanand

for quality and delivery

2014 Outstanding performance Divgi warner Pvt ltd –

Pune

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 CHAPTER – 3

McKinsey’s 7S FRAMEWORK AND PORTERS 5 FORCE

MODEL

3.1 McKinsey’s 7S framework

The McKinsey 7S framework is a valuable tool used by organizations to ensure their
company is operating optimally under a variety of circumstances. Developed by the
McKinsey consulting company in the 1980s, the tool sought to promote an alignment of
seven key parameters as a means for maximizing the likelihood of company success. These
parameters, dubbed the “7 S’s”, are all interconnected within the framework, with each “S”
being as important as the next. This interconnectedness also outlines a key component of the
framework – a change in one parameter necessitates a change in all of the others in order to
maintain alignment and ensure company success. The model is particularly useful when re-
evaluating a company’s organizational structure and strategy after a large change (ex: a
merger, change in management, rapid expansion etc.). Such changes will likely cause a large
shift in at least one of the 7 “S” components. It is therefore useful to use the McKinsey 7S
model to re-evaluate whether all 7 S components remain aligned and make the necessary
changes to maintain this synergy if misalignment has occurred.

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The McKinsey 7S Framework is a management model that examines seven key elements
within an organization to ensure they are aligned for effectiveness. These elements are:

Strategy: The strategy company following is that maintaining the good relationship with
the material supplier to get the material for low prices and so they’ll get the orders from the
clients regularly. They maintaining good product portfolio and providing good client service
and having effective linkage between the suppliers. Focus on crafting a strategy that aligns
with the market demand for various tools, innovation in product development, and strategic
alliances for sourcing materials and distribution.

 Marketing strategy
 Selling strategy and network

a) Factory company Depot Distributor Dealer Consumer

b) Factory Distributor Dealer Consumer

 Differential strategy
 Focus strategy

Structure: Design an organizational structure that supports efficient manufacturing

processes, including divisions for research and development, production, quality control, and
distribution.

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Systems: The daily activities and procedure that staff members engage in to get
the job done. Systems are routine process and procedures followed within an
organization to implement the strategy and to run day to differs. These
processes are mainly designed to achieve maximum effectiveness.

 Determine the sequence and interaction of these processes.

 Evaluate these processes and implement any changes needed to ensure
that these processes achieve their intended results.
 Assign the responsibilities and authorities for these processes.
 Address the risks and opportunities as determine in accordance with the
sequins The organizational shall demonstrate leadership style of the
organization with respect to.

Implement robust systems for supply chain management, inventory control, production
processes, quality assurance, and technological integration (such as automation or digital
tools) to enhance productivity and efficiency in tool manufacturing.

 Stitching work and ironing

 Packing and dispatching
 Recording daily report

Shared Values: Foster a culture that values precision, quality, safety, and continuous
improvement in manufacturing operations. Emphasize a commitment to innovation and
customer satisfaction.

 INTEGRITY: We must conduct our business fairly, with honesty and transparency
Everything we do must stand the test of public scrutiny.
 UNDERSTANDING: We must be caring, show respect, compassion and
humanity for our colleagues and customers around the world, and always work for the
definite of the communities we serve.
 EXCELLENCE: We must constantly strive to achieve the highest possible
standards in our day-to-daywork and in the quality of the goods and services we
provide.

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  RESPONSIBILITY: We must continue to be responsible, sensitive to the
countries, communities and environments in which we work, always ensuring that
what comes from the people goes back to the people many times over.

Style: Style is all about leadership and management styles. Typical behavior patterns of key
groups as managers, other professionals. Quick response from the middle level to lower-level
employees to engage and involve them decision making processes and managerial decisions.
Cultivate leadership styles that encourage innovation, collaboration, and empowerment
among teams, promoting a culture of problem-solving and efficiency improvement.

 Ensuring that the quality policy and quality objectives are established for the
management system and compatible with the context and strategic direction of the
directions
 Supporting other relevant management roles to demonstrate their leadership as it
applies to their areas of responsibility
 Promoting improvement
 communicating the importance of effective quality management and of conforming to
the executing quality management system requirements

Staff: These concern both the skills of the organization and those of the employees. The
organization's Core competencies and distinctive capabilities.

• Strong Administrative skill

• Strong Human skill

Invest in training programs to enhance technical skills, encourage cross-functional expertise,

and create a workforce capable of adapting to evolving manufacturing technologies and
techniques.

Skills: Focus on developing specialized skills crucial for tool manufacturing, such as
machining, metallurgy, engineering, and design, to ensure competitiveness and quality.

The implementation process involves assessing each of these elements within the context of
the tools manufacturing industry, identifying areas for improvement, and aligning strategies,
structures, systems, and skills to achieve organizational coherence and effectiveness in
producing high-quality tools. Regular monitoring and adaptation are vital for sustained
success in this dynamic industry.

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3.2 PORTERS 5 FORCE MODEL

Since its introduction in 1979, Michael Porter’s Five Forces has become the de facto
framework for industry analysis. The five forces measure the competitiveness of the market
deriving its attractiveness. The analyst uses conclusions derived from the analysis to
determine the company’s risk from in its industry (current or potential). Porter's Five Forces
is a framework used to analyze the competitive forces within an industry. When applied to the
tools manufacturing industry, it helps identify the dynamics influencing competitiveness and
profitability.

Threat of New Entrants:

The tools manufacturing industry might face moderate barriers to entry due to the need for
specialized knowledge, significant capital investment in technology and equipment, and
established brand loyalty of existing companies. However, if there are low-cost
manufacturing methods or innovative technologies, new entrants might pose a threat.

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There will be no barrier for the entry of garments, because there is always demand for cloths,
so even after the entrants of the competitors, it will sustain in the field. The investment is the
first barrier for the new entry.

Bargaining Power of Suppliers:

Suppliers of raw materials, metals, and components for tools manufacturing can exert varying
levels of power. If there are limited suppliers or few alternatives for crucial materials, they
might have higher bargaining power, impacting manufacturing costs. When assessing the
bargaining power of suppliers, the focus is on the relationship between the supplier and the
buyer. As in any partnership, some conflicts of interest need to be balanced for a trade to be
beneficial to both parties

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 The suppliers who producing good quality fabrics are demanding high costs. Hence the
suppliers’ power is relatively small.
Bargaining Power of Buyers:

Buyers in the tools industry, which could include retailers, wholesalers, or end-users, might
possess moderate to high bargaining power. Large buyers or those with options for multiple
suppliers may exert pressure on pricing, quality, or delivery terms. As compared to the
organizations who is buying in bulk, who might be the main clients in other organizations.
And they may have alternative location to shop for fabrics and garments, giving them plenty
of indirect bargaining power

Threat of Substitutes:

The clients had other substitute, where they can buy readymade garments from outside but
for the Higher price. There are wide number of garments company who provide at low cost.
So, there will be competition from low cost producing organizations, there are wide number
of organizations who producing for the low cost. Substitutes for tools, such as innovative
technologies, multi-functional tools, or alternative materials, can influence the industry's
competitiveness. If substitutes offer comparable functionalities at lower costs or with added
benefits, they pose a threat.

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Rivalry Among Existing Competitors:

Intense competition exists within the tools manufacturing industry, characterized by a

significant number of players vying for market share. Factors such as product differentiation,
pricing strategies, technological innovation, and marketing efforts contribute to rivalry among
competitors. In the field of garments industry, there will be competitors for sure. Each
garment exporter has, their regular clients, so that the rivalry is less in this garments field. But
there plenty of producers who the similar products, but the quality makes them to sustain in
the field

Conclusion

Understanding these forces enables companies in the tools manufacturing industry to develop
strategies to mitigate threats and leverage opportunities, such as focusing on innovation,
establishing strong supplier relationships, differentiating products, and enhancing customer
value propositions to stay competitive and sustain profitability.

Michael E. Porter’s 5 Forces Analysis has long become the leading standard for
understanding an industry’s competitive landscape.

The clear structure helps start-ups and multinationals alike to identify the current and future
threats in their markets.

However, when analyzing the results, decision-makers must not forget that the analysis is
only a snapshot of the industry under consideration. By the time the analysis is completed,
the market situation may have already changed.

Therefore, especially companies operating in industries with short product life cycles need to
put mechanisms in place that continuously monitor the discussed threats in their industry.

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 CHAPTER 4

SWOT ANALYSIS

SWOT analysis is a vital strategic planning tool that can be used by Indian Oil managers to
do a situational analysis of the firm. It is a handy technique to evaluate the present Strengths
(S), Weakness (W), Opportunities (O) & Threats (T) Indian Oil is facing in its current
business environment. SWOT analysis is an analytical technique used to ascertain and
describe the several characteristics: Strengths, weaknesses, Opportunities and Strengths. In
the process of conducting the SWOT both the internal and external factors of the company
which has the potential to impact the success of the company. SWOT helps in building a
strong business strategy by considering all the factors that it faces in the market place.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT
Analysis is a technique for assessing these four aspects of your business.

You can use SWOT Analysis to make the most of what you've got, to your organization's best
advantage. And you can reduce the chances of failure, by understanding what you're lacking,
and eliminating hazards that would otherwise catch you unawares. Better still, you can start

26
to craft a strategy that distinguishes you from your competitors, and so compete successfully
in your market.

Strengths:

 Reduced labor costs: The cost of labor is the sum of all wages paid to
employees, as well as the cost of employee benefits and payroll taxes
paid by an employer.
 Domestic market: A domestic market, also referred to as an internal
market or domestic trading, is the supply and demand of goods, services,
and securities with a single country
 High profitability and revenue: Profitability is the ability to earn a
profit. A profit is what is left of the revenue a business generates after it
pays all expenses directly related to the generation of the revenue such as
producing a product related to the conduct of the business activities.
 Existing distribution and sales networks: A distribution network is an
interrelated game of people, storage facilities and transportation systems
that moves goods and services from producers’ consumers.
 Skilled workforce: Skilled labor is segment of the work force with a
high skill level that creates significant economic value through the work
performed (human capital) Skilled labor is generally characterized by
high education or expertise levels and high wages.
 Barriers of market entry: barriers to entry are the existence of the start-
up costs of her obstacles that prevent new competitors from easily
entering an industry or area of business
 Experienced business units: A logical element or segment of a company
(such as accounting. Production and marketing) representing a business
should be having experience.

27
Weaknesses:

 High Initial Investment: Setting up manufacturing facilities requires significant

capital, making entry barriers high.
 Dependence on Raw Materials: Fluctuations in the prices of raw materials can
impact production costs.
 Environmental Impact: Manufacturing can be associated with environmental
concerns, leading to regulatory challenges.
 Rigidity: Slow adaptation to market changes or new technologies can hinder
competitiveness.
 Political intervention.
 Lack knowledge about the work environment.
 Lot of time when hire new labor.
 Difficult to maintain same environment in each department.
 Future profitability: profitability is the ability of a company to use its resources
to generate even in excess of its expenses. Profitability is one of four building blocks
for analyzing financial statements and company performance

Opportunities:

Global Expansion: Exploring international markets can open up new opportunities for
growth.

Technological Advancements: Embracing Industry 4.0 technologies can enhance efficiency

and productivity.

Diversification: Exploring new product lines or industries can mitigate risks associated with a
single product.

Sustainability: Meeting the growing demand for sustainable products can open up new
markets.

Threats:

28
  Global Competition: Intense global competition can impact market share and
pricing.
 Supply Chain Disruptions: Disruptions in the supply chain, such as natural
disasters or geopolitical issues, can impact production.
 Regulatory Changes: Evolving regulations related to environmental standards or
trade policies can affect manufacturing operations. the information and polices when
labor leaves
 New player, new brands, Leak competitors.
 Company benefits based on company, (payments of company)
 Increasing rates of interest: interest rate is the amount charged, expressed as a
percentage of principal.by a lender to a borrower for the use of assets. That rate of
interest should be increasing also a threat.
 Tax changes: tax cuts are changes that reduce the amount paid under the law to
government revenue The taxes cut are on income profits, sales, or assets: Tox cuts
occur in many different forms. They are one-time rebate, a reduction in the overall rat,
or a tax credit
 Technological Disruption: Rapid technological advancements may render
existing manufacturing processes obsolete if not adapted quickly. The SWOT analysis
highlights the manufacturing industry's strengths such as technological advancements
and established infrastructure. Opportunities lie in innovation and global market
expansion. However, challenges include increasing competition and potential threats
from economic downturns. Overall, a strategic approach to capitalize on strengths
while addressing weaknesses will be crucial for sustained success in the dynamic
manufacturing landscape.

To sum up the SWOT analysis for the manufacturing industry, it's evident that leveraging
technological advancements, optimizing supply chains, and capitalizing on global market
opportunities are key strengths. Addressing challenges like rising competition and potential
economic fluctuations is essential. A strategic focus on innovation and efficiency will
position the industry to navigate uncertainties and sustain long-term growth.

29
 CHAPTER- 5

ANALYSIS OF FINANCIAL STATEMENTS

Financial statements (or financial reports) are formal records of the financial activities and
position of a business, person, or other entity.

Relevant financial information is presented in a structured manner and in a form which is

easy to understand. They typically include four basic financial statements accompanied by a
management discussion and analysis

A balance sheet or statement of financial position, reports on a company's assets, liabilities,

and owners equity at a given point in time.

An income statement or profit and loss report or statement of comprehensive income, or

statement of revenue & expense—reports on a company's income, expenses, and profits over
a stated period. A profit and loss statement provides information on the operation of the
enterprise. These include sales and the various expenses incurred during the stated period.

30
5.1 Balance sheet of Bhavani Industries Private Limited
Particular 2023 2022 2021
Equity and liabilities

Equity share capital 290.15 253.3 200.05

Total share capital 290.15 253.3 200.05
Reserves and surplus 3180.36 2650.3 1269.1
Total reserves and surplus 3180.36 2650.3 1269.1

Non-current liabilities

other non-current liabilities 0 0

0
Long term liabilities 5.81 5.05 2.1
Total non-current liabilities 5.81 5.05 2.1
Current liabilities

Trade payables 13.48 11.23 2.48

Other current liabilities 8.76 7.62 3.64
Short term provisions 38.46 32.05 1.24
Total current liabilities 58.5 50.9 7.36

TOTAL LIABILTIES 3244.67 2959.55 1478.61

ASSETS

Non-current assets

Capital work-in- progress

Non-current investment 18.18 13.14 2.74

Fixed assets 2997.7 2798.6 1346.3
Deferred tax assets(Net) 0 0 0
Long term loan and advances 108.58 84.45 119
Other non-current assets 0 0.01 0
Total non- current assets 3124.46 2896.2 1468.1
Current assets

Current investments 98.72 51.96 6.63

31
 Inventories 0 0 0
Trade receivables 0 0 0
Cash and cash equivalents 17.92 9.69 0.84
Other current assets 3.52 1.77 3.1
Total current assets 120.14 63.42 10.57
TOTAL ASSETS 3244.67 2959.55 1478.61

Interpretation: By obtaining both equity and borrowings to meet its capital needs, the
company is pursuing a balanced strategy. The recoverability needs to be improved to prevent
a short-term cash shortage. The increase in current investments raises the possibility that the
company used its surplus funds to make current investments.

4.2 Profit & Loss Account of Bhavani Industries Private Limited

Particulars 31- 03- 2023 31-03-2022 31-03-2021
Revenue from Operations 74,813,335 31,497,001 8,074,850
Other Income 81,704
Total revenue 74,895,039 31,497,001 8,074,850
Expenses
Cost of Materials Consumed 28,875,331 11,535,679 1,051,783
Changes In Inventories -1,500,000 -1000000
Cost of Labour 12,141,632 4,589,303 229,465
Employee Benefit Expenses 5,680,076 2,839,101 141,955
Financial Costs 5,069 4,991 2490
Depreciation and Amortization 7,000,000 3,500,000 2,000,000
Expenses
Other Expenses 3,596,322 1,143,344 57,167
TOTAL EXPENSES 55,798,430 22,612,418 3,482,860
Profit before exceptional and 19,096,609 8,884,583 4,591,990
extraordinary items and tax

Exceptional Items - - -
Profit before extraordinary items - - -
and tax

32
 Extraordinary Items - - -
Profit before Tax 19,096,609 8,884,583 4,591,990
Tax Expense - - -
(i) Current Tax - - -
(ii) Deferred Tax - - -
Profit/(Loss) for the period from 19,096,609 8,884,583 4,591,990
continuing operations

Profit/(Loss) from discontinuing - - -

operations

Tax expense of discounting - - -

operations
Profit/(Loss) from discontinuing - - -
operations (after tax)

Profit/(Loss) for the period 19,096,609 8,884,583 4,591,990

Interpretation: The company's success can be attributed to its ability to maximise

resource utilisation while maintaining a consistent rise in operating revenue. The company's
growing commercial operations caused a more than 100% increase in labour and material
costs between 2022 and 2023.

5.3 Common size balance sheet of Bhavani Industries Private Limited

Particulars 2023 % 2022 %
Equity and liabilities

Equity share capital 290.15 8.942 253.3 8.558

Total share capital 290.15 8.942 253.3 8.558
Reserves and surplus 3180.36 98.017 2650.3 89.550
Total reserves and surplus 3180.36 98.017 2650.3 89.550
Non-current liabilities

other non-current liabilities 0 0 0 0

Long term liabilities 5.81 0.179 5.05 0.170
Total non-current liabilities 5.81 0.179 5.05 0.170
Current liabilities

33
Trade payables 13.48 0.415 11.23 0.379
Other current liabilities 8.76 0.269 7.62 0.257
Short term provisions 38.46 1.185 32.05 1.082
Total current liabilities 58.5 1.803 50.9 1.719
Total Liabilities 3244.67 100 2959.55 100
ASSETS

Non-current assets

Capital work-in- progress

Noncurrent investment 18.18 0.560 13.14 0.443

Fixed assets 2997.7 92.388 2798.6 94.561
Deferred tax assets(Net) 0 0 0 0
Long term loan and 108.58 3.346 84.45 2.853
advances

Other non-current assets 0 0 0.01 0

Total non-current assets 3124.46 96.295 2896.2 97.859
Current assets
Current investments 98.72 3.042 51.96 1.755
Inventories 0 0 0 0
Trade receivables 0 0 0 0
Cash and cash equivalents 17.92 0.552 9.69 0.327
Other current assets 3.52 0.108 1.77 0.059
Total current assets 120.14 3.702 63.42 2.142
TOTAL ASSETS 3244.67 100 2959.55 100

Interpretation: The company's financial structure reveals a sizable reserve and surplus
together with a solid equity foundation. A steady financial situation is shown by the
comparatively low levels of current and non-current obligations. Significant investments in
current and fixed assets are shown by the asset composition, which adds to the balance
sheet's overall balance. The firm appears to be well-positioned overall, with a good balance
of assets and equity.

5.3.1 Common Size Balance Sheet of Bhavani Industries Private Limited

34
Particular 2022 % 2021 %
Equity and liabilities
Equity share capital 253.3 8.558 200.05 13.529
Total share capital 253.3 8.558 200.05 13.529
Reserves and surplus 2650.3 89.550 1269.1 85.830
Total reserves and surplus 2650.3 89.550 1269.1 85.830
Non-current liabilities
other non-current liabilities 0 0 0 0
Long term liabilities 5.05 0.170 2.1 0.142
Total non-current liabilities 5.05 0.170 2.1 0.142
Current liabilities
Trade payables 11.23 0.379 2.48 0.167
Other current liabilities 7.62 0.257 3.64 0.246
Short term provisions 32.05 1.082 1.24 0.083
Total current liabilities 50.9 1.719 7.36 0.497
Total Liabilities 2959.55 100 1478.61 100
ASSETS

Non-current assets

Capital work-in- progress

Noncurrent investment 13.14 0.443 2.74 0.185

Fixed assets 2798.6 94.561 1346.3 91.051
Deferred tax assets(Net) 0 0 0 0
Long term loan and 84.45 2.853 119 8.048
advances

Other non-current assets 0.01 0 0 0

Total non-current assets 2896.2 97.859 1468.1 99.289
Current assets
Current investments 51.96 1.755 6.63 0.448
Inventories 0 0 0 0
Trade receivables 0 0 0 0
Cash and cash equivalents 9.69 0.327 0.84 0.056
Other current assets 1.77 0.059 3.1 0.209

35
 Total current assets 63.42 2.142 10.57 0.714
TOTAL ASSETS 2959.55 100 1478.61 100

Interpretation: The equity and liabilities structure of the corporation in 2022 shows a
larger percentage of equity share capital and reserves, adding up to a total capital of 2650.3
and 253.3, respectively. While trade payables, other current liabilities, and short-term
reserves make up the majority of current liabilities (50.9), non-current liabilities are very
low at 5.05. With substantial non-current assets (2896.2) and current assets (63.42), the
balance sheet shows a robust asset base with a total asset value of 2959.55.

5.4 Comparative P/L statement of Bhavani Industries Private Limited

Particulars 31-03-2023 31-03-2022 Absolute %
change

Revenue from Operations 74,813,335 31,497,001 4,33,16,334 137.5253

Other Income 81,704 0 0
Total revenue 74,895,039 31,497,001 4,33,98,038 137.7847
Expenses
Cost of Materials 28875331 11,535,679 1,73,39,652 150.3132
Consumed
Changes In Inventories -1500000 -1000000 -5,00,000 50
Cost of Labour 12,141,632 4,589,303 75,52,329 164.5637
Employee Benefit Expenses 56,80,076 28,39,101 28,40,975 100.066
Financial Costs 5069 4991 78 1.562813
Depreciation and 70,00,000 35,00,000 35,00,000 100
Amortization Expenses
Other Expenses 35,96,322 11,43,344 24,52,978 214.5442
TOTAL EXPENSES 55798430 22612418 3,31,86,012 146.7601
Profit before exceptional 19096609 8884583 1,02,12,026 114.941
and extraordinary items and
tax

Exceptional Items
Profit before extraordinary
items and tax

36
Extraordinary Items
Profit before Tax 19096609 8884583 1,02,12,026 114.941
Tax Expense
(i) Current Tax
(ii) Deferred Tax
Profit/(Loss) for the period 19096609 8884583 1,02,12,026 114.941
from continuing operations

Profit/(Loss) from
discontinuing operations
Tax expense of discounting
operations

Profit/(Loss) from
discontinuing operations
(after tax)
Profit/(Loss) for the period 1,90,96,609 88,84,583 1,02,12,026 144.941

Interpretation: According to the comparative income statement above, in the year

2022-2023 the revenue and total income have increased, while total expenses have
increased significantly and a profit was made for the year.

5.4.1 Comparative P/L statement of Bhavani Industries Private Limited

Particular 31-03-2022 31-03-2021 Absolute %
change

Revenue from Operations 3,14,97,001 80,74,850 2,34,22,151 290.063

Other Income - - - -
Total revenue 3,14,97,001 80,74,850 2,34,22,151 290.063
Expenses
Cost of Materials 1,15,35,679 10,51,783 1,04,83,896 996.7737
Consumed
Changes In Inventories -10,00,000 -10,00,000
Cost of Labour 45,89,303 2,29,465 43,59,838 1900.001
Employee Benefit 28,39,101 1,41,955 26,97,146 1900.001
Expenses

37
Financial Costs 4,991 2,490 2,501 100.4418
Depreciation and 35,00,000 20,00,000 15,00,000 75
Amortization Expenses
Other Expenses 11,43,344 57,167 10,86,177 1900.007
TOTAL EXPENSES 2,26,12,418 34,82,860 1,91,29,558 549.2485
Profit before exceptional 88,84,583 45,91,990 42,92,593 93.48002
and extraordinary items and
tax

Exceptional Items
Profit before extraordinary
items and tax

Extraordinary Items
Profit before Tax 88,84,583 45,91,990 42,92,593 93.48002
Tax Expense

(i) Current Tax

(ii) Deferred Tax

Profit/(Loss) for the period 88,84,583 45,91,990 42,92,593 93.48002

from continuing operations

Profit/(Loss) from
discontinuing operations
Tax expense of counting
operations

Profit/(Loss) from
discontinuing operations
(after tax)

Profit/(Loss) for the 88,84,583 45,91,990 42,92,593 93.48002

period

Interpretation: According to the comparative income statement above, in the year 2021–
2022 the revenue and total income have increased, while total expenses have increased
significantly and a profit was made for the year.

38
5.5 Comparative Balance Sheet of Bhavani Industries Private Limited
Particulars 2023 2022 Absolute %
change

Equity and liabilities

Equity share capital 290.15 253.3 36.85 14.548

Total share capital 290.15 253.3 36.85 14.548
Reserves and surplus 3180.36 2650.3 530.06 20
Total reserves and 3180.36 2650.3 530.06 20
surplus
Non-current
liabilities
other non-current 0 0 0 0
liabilities

Long term liabilities 5.81 5.05 0.76 15.049

Total non- current 5.81 5.05 0.76 15.049
liabilities

Current liabilities
Trade payables 13.48 11.23 2.25 20.035
Other current liabilities 8.76 7.62 1.14 14.960
Short term provisions 38.46 32.05 6.41 20
Total current liabilities 58.5 50.9 7.6 14.931
TOTAL 3244.67 2959.55 285.12 9.634
LIABILTIES
ASSETS

Non-current assets

Capital work-in-
progress
Non-current 18.18 13.14 5.04 38.356
investment

Fixed assets 2997.7 2798.6 199.1 7.114

Deferred tax 0 0 0 0
assets(Net)

39
 Long term loan and 108.58 84.45 24.13 28.573
advances

Other non-current 0 0 0 0
assets
Total non- current 3124.46 2896.2 228.26 7.881
assets
Current assets

Current investments 98.72 51.96 46.76 89.992

Inventories 0 0 0 0
Trade receivables 0 0 0 0
Cash and cash 17.92 9.69 8.23 84.932
equivalents
Other current assets 3.52 1.77 1.75 998.870
Total current assets 120.14 63.42 56.72 89.435
TOTAL ASSETS 3244.67 2959.55 285.12 9.633

Interpretation: The company's reserves and surplus expanded by 20% in 2023, along
with a 14.55% increase in equity share capital, for a total equity growth of 14.93%.
Additionally, there was a 15.05% and 14.93% growth in non-current and current liabilities,
respectively. The notable expansion in current investments and other current assets
propelled the 9.63% increase in total assets.

5.5.1 Comparative Balance Sheet of Bhavani Industries Private Limited

Particulars 31-03-2022 31-03-2021 Absolute %
change

Equity and liabilities

Equity share capital 253.3 200.05 53.25 26.6183

Total share capital 253.3 200.05 53.25 26.6183
Reserves and surplus 2650.3 1269.1 1381.2 108.833
Total reserves and surplus 2650.3 1269.1 1381.2 108.833
Non-current liabilities
other non-current liabilities 0 0 0 0
Long term liabilities 5.05 2.1 2.95 140.476

40
Total non- current liabilities 5.05 2.1 2.95 140.476
Current liabilities
Trade payables 11.23 2.48 8.75 352.823

Other current liabilities 7.62 3.64 3.98 109.341

Short term provisions 32.05 1.24 30.81 2484.68
Total current liabilities 50.9 7.3613.14 43.54 591.576
TOTAL LIABILTIES 2959.55 1478.61 1480.94 100.158
ASSETS

Non-current assets

Capital work-in- progress

Non-current investment 13.14 2.74 10.4 379.562

Fixed assets 2798.6 1346.3 1452.3 107.873
Deferred tax assets (Net) 0 0 0 0
Long term loan and 84.45 119 -34.55 -290336
advances
Other non-current assets 0.01 0 0.01 0
Total non- current assets 2896.2 1468.1 1428.1 97.2754
Current assets
Current investments 51.96 6.63 45.33 683.71
Inventories 0 0 0 0
Trade receivables 0 0 0 0
Cash and cash equivalents 9.69 0.84 8.85 1053.57
Other current assets 1.77 3.1 -1.33 -42.9032
Total current assets 63.42 10.57 52.85 500
TOTAL ASSETS 2959.55 1478.61 1480.94 100.158

Interpretation: Share capital and reserves, which indicate the company's equity, are
253.3 and 2650.3, respectively. With current liabilities at 50.9 and non-current obligations
at 5.05, the total liabilities come to 2959.55. The asset composition maintains a balanced
financial structure with non-current assets of 2896.2 and current assets of 63.42 making up
total assets of 2959.55.

41
Ratio Analysis

Ratio analysis is referred to as the study or analysis of the line items present in the financial
statements of the company Ratio analysis is a quantitative method of gaining insight into a
company's liquidity, operational efficiency, and profitability by studying its financial
statements such as the balance sheet and income statement.

KEY TAKEAWAYS

 Ratio analysis compares line-item data from a company's financial statements to

reveal insights regarding profitability, liquidity, operational efficiency, and solvency.
 Ratio analysis can mark how a company is performing over time, while comparing a
company to another within the same industry or sector.
 Ratio analysis may also be required by external parties that set benchmarks often tied
to risk.
 While ratios offer useful insight into a company, they should be paired with other
metrics, to obtain a broader picture of a company's financial health.
 Examples of ratio analysis include current ratio, gross profit margin ratio, inventory
turnover ratio.
 5.6.1 Current ratio

The current ratio measures a company's ability to pay current, or short-term, liabilities (debts
and payables) with its current, or short-term, assets, such as cash, inventory, and receivables.

Current assets
Current ratio=
Current liablities

Table No: 5.6.1 Current ratio of Bhavani Industries Private Limited

Years Current Assets Current Liabilities Current Ratio

2023 120.14 58.5 2.053

2022 63.42 50.9 1.245

2021 10.57 7.36 1.436

42
 Graph No: 5.6.1 Current ratio of Bhavani Industries Private Limited

2.053
2.25

1.75 1.436
1.245
1.25
ratio

0.75

0.25 0 0 0 0

2023 2022 2021

Current Ratio 2.053 NaN NaN 0 1.245 0 0 1.436 0

year

Interpretation: The financial information provided shows that the company's liquidity has
been increasing over time. A gauge of short-term solvency, the current ratio, rose from
1.245 in 2022 to 2.053 in 2023. This implies that the company's capacity to meet its short-
term liabilities using current assets has improved. While the moderate growth in current
liabilities from 50.9 to 58.5 further supports this favourable financial trajectory, the notable
increase in current assets from 63.42 to 120.14 may indicate enhanced financial stability

5.6.2 Quick ratio

The quick ratio is a financial metric that measures a company's ability to pay off its short-
term liabilities with its most liquid assets. It's also known as the acid-test ratio or liquidity
ratio.

Current assets−inventories
Quick ratio=
Current liablities

Table No: 5.6.2 Quick ratio of Bhavani Industries Private Limited

Years Current Assets Current Liabilities Quick Ratio

2023 120.14 58.5 2.053

2022 63.42 50.9 1.245

43
 2021 10.57 7.36 1.436

Graph No: 5.6.2 Quick ratio of Bhavani Industries Private Limited

2.053
2.25

1.75 1.436
1.245
1.25
Ratio

0.75

0.25 0 0 0 0

2023 2022 2021

Quick Ratio 2.053 0 1.245 0 0 1.436 0

Year

Interpretation: The company's liquidity situation has significantly improved throughout

the three years between 2021 and 2023, as demonstrated by the fast ratio, which gauges its
capacity to pay short-term commitments using liquid assets. From 10.57 in 2021 to 120.14
in 2023, the current assets more than doubled and outpaced the rise in the current liabilities.

5.6.3 Proprietary ratio

A proprietary ratio is a type of solvency ratio that is useful for determining the amount or
contribution of shareholders or proprietors towards the total assets of the business. It is also
known as equity ratio shareholder equity ratio or net worth ratio.

Share holders fund

Properietary ratio=
Total assets

Table No: 5.6.3 Proprietary ratio of Bhavani Industries Private Limited

YEAR Shareholder fund Total Assets Proprietary ratio

290.15 3244.67 0.089

2022-23

253.3 2959.55 0.085

2021-22

200.05 1478.61 0.135

2020-21

44
Graph No: 5.6.3 Proprietary ratio of Bhavani Industries Private Limited

0.15 0.135
0.13
0.11 0.089 0.085
0.09
0.07
Ratio
0.05
0.03
0.01 0 0 0
2022-23 2021-22 2020-21

Proprietary ratio 0.089 0 0.085 0 0.135 0

Year

Interpretation: In the three years between 2020–21 and 2022–23, the company's
shareholder fund increased from 200.05 to 290.15, indicating a favourable trend. The firm
has grown, as seen by the continuous increase in total assets from 1478.61 to 3244.67
during the same time period. At 0.135, 0.085, and 0.089 for the corresponding years, the
proprietary ratio—which shows the percentage of shareholder money to total assets—
showed some variation but overall consistency, indicating a steady state of financial
stability.

5.6.4 Absolute liquid ratio

The absolute liquidity ratio pits marketable securities, cash, and equivalents against current
liabilities.

Cash∧cash equivalent+ marketable security

Absolute lituid ratio=
Current liablities

Table No: 5.6.4 Absolute liquid ratio of Bhavani Industries Private Limited

ABSOLUTE
Cash and cash CURRENT
YEAR
equivalent LIABILITIES LIQUID RATIO

17.92 0.306
2022-23 58.5

9.69 0.190
2021-22 50.9

2020-21 0.84 0.114

7.36

45
Graph No: 5.6.4 Absolute liquid ratio of Bhavani Industries Private Limited

0.35
0.306
0.3

0.25

0.2 0.19
Axis Title

0.15
0.114
0.1

0.05
0 0 0
0
2022-23 2021-22
Axis Title 2020-21

Interpretation: For 2020–21, 2021–22, and 2022–23, the corresponding absolute liquid
ratios are 0.114, 0.190, and 0.306. The firm has more cash and cash equivalents to meet its
current liabilities in the most recent financial year compared to prior years, indicating
stronger short-term liquidity as indicated by the growing trend.

5.6.5 Cash ratio

The cash ratio is a measure of the liquidity of a firm, namely the ratio of the total assets and
cash equivalents of a firm to its current liabilities.

Cash∧cash equivalents
Cash ratio=
Current liabilities

Table No: 5.6.5 Cash ratio of Bhavani Industries Private Limited

CASH AND CASH CURRENT CASH RATIO

YEAR
EQUIVALENTS LIABILITIES
17.92 0.306
2022-23 58.5

9.69 0.190
2021-22 50.9

0.84 0.114
2020-21 7.36

46
Graph No: 5.6.5 Cash ratio of Bhavani Industries Private Limited

0.35
0.306
0.3
0.25
0.2 0.19
Ratio

0.15 0.114
0.1 CASH RATIO
0.05
0 0 0
0
2022- 2021- 2020-
23 22 21
Year

Interpretation: For 2020–21, 2021–22, and 2022–23, the cash ratios are, respectively,
0.114, 0.190, and 0.306. This suggests that the company's capacity to pay down its short-
term debt using cash and cash equivalents has improved. The upward trend over the course
of three years points to a better liquidity position, indicating good financial health in terms
of short-term solvency.

CHAPTER- 6

LEARNING EXPERIENCE

LEARNING EXPERIENCE

I am very happy to the practical exposure at BHAVANI INDUSTRIES PVT LTD, before
going to share my practical feeling regarding the project work, I would heartly thank THE
OXFORD COLLEGE OF ENGINEERING AND MANAGEMENT, Bangalore and VTU for
giving me opportunity to learn a knowledge in practical environment. I would also like to
thank to my External guide Dr. Sahana and Internal guide who has guided me in this
internship project.

I had under gone a 30 days of internship BHAVANI INDUSTRIES PVT LTD from
19/10/2023 to 21/11/2023 and in this period I had to learn and get introduced to working of
the company. From this I came to know various working aspects, manufacturing process and

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machineries used for it and labor utilization for the work. During my internship I learnt lot of
things about Organization Structure, the organization helped in knowing the interrelation
between the various department and their role in helping the organization to attain its goals.
From this project I came to know that how business is carried in a systematic way and this
internship has made me to understand about the working environment of the company, the
process of the supply chain starting from procurement till the dispatch of the goods. It has
given me great opportunity to learn and explore new things. I got to know how employees are
recruited and made able to handle the work individually and in groups to achieve the target.
The employees were recruited directly from the other companies, as the company needed
only educated and experienced employees. And I learned about the material processes, supply
chains, quality aspects, production, merchandising, planning, etc. I got to know how
decisions are carried out from top to bottom to make things run more smoothly. If any
problem arises in the production department, the employee can directly meet the director and
get a solution.

The organizational study at BHAVANI INDUSTRIES PVT LTD has helped me to get the
deep insight of all the functional department and their unique role in fulling the
organizational goals. It also helped me in experiencing the practicality of the theoretical
knowledge that is a part of our curriculum. I thank the company for extending me an
opportunity to conduct the study and extending me their full support during my course at
BHAVANI INDUTRIES PVT LTD, Bangalore.

BIBILOGRAPHY

BOOKS:

1. S.P Robbins, Organizational Behavior, Pearson, 2001

ARTICLES:

1. R S Kalpana, Strategy & Leadership, 2005, emeraldinsight.com

2. A N Berger, G F Udell – The Economic Journal, 2002- Wiley Online Library

WEBILOGRAPHY

1. https://www.iocl.com/
2. http://www.capitalmarket.com/

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3. https://www.moneycontrol.com/

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