A STUDY ON FINANCIAL PERFORMANCE ANALYSIS IN

PRIMARY AGRICULTURAL CO-OPERATIVE CREDIT

SOCIETY LIMITED AT PUDUCHERRY

PROJECT REPORT SUBMITTED TO PONDICHERRY UNIVERSITY

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION

Submitted by
JANANI SRI .N
22810018

Under the Guidance of

Mrs. D.PRIYANKA. B. Tech , MBA.
Assistant Professor

Department of Management Studies

RAJIV GANDHI COLLEGE OF ENGINEERING AND TECHNOLOGY

KIRUMAMPAKKAM
PUDUCHERRY-607402

PROJECT REPORT
(OCTOBER&2023)
 RAJIV GANDHI COLLEGE OF ENGINEERING AND TECHNOLOGY
PUDUCHERRY
DEPARTMENT OF MANAGEMENT STUDIES
MASTER OF BUSINESS ADMINISTRATION

BONAFIDE CERTIFICATE

This is to certify that the project work titled" A STUDY ON FINANCIAL

PERFORMANCE ANALYSIS IN PRIMARY AGRICULTURAL CO-
OPERATIVE CREDIT SOCIETY LIMITED AT PUDUCHERRY " is a
bonafide record work done by JANANI SRI .N (Reg.No:22810018) in partial
fulfillment of requirement for the award of the degree "MASTER OF BUSINESS
ADMINISTRATION" in RAJIV GANDHI COLLEGE OF ENGINEERING
AND TECHNOLOGY during the academic year 2023-2024.

Certified further that this work reported here-in does not form part of any other

project report or dissertation on basis which a degree or award was conferred on an

earlier date to this or any other candidate.

EXTERNAL GUIDE INTERNAL GUIDE

Head of the Department

Submitted to the university examination held on ______________________

EXTERNAL EXAMINER
 DECLARATION

I hereby declare that the project report entitled “A STUDY ON FINANCIAL

PERFORMANCE ANALYSIS IN PRIMARY AGRICULUTRAL CO-

OPERATIVE CREDIT SOCIETY LIMITED AT PONDICHERRY ”submitted

for the Degree of Master of Business Administration is my original work and the

report has not formed the basis for the award of any degree, diploma, associate ship,

fellowship or similar other titles. It has not been submitted to any other University or

Institution for the award of any degree or diploma.

Place: Puducherry Signature of the Student

Date: JANANI SRI .N

22810018
 CERTIFICATE OF THE GUIDE

Certified that the report " A STUDY ON FINANCIAL PERFORMANCE

ANALYSIS IN PRIMARY AGRICULUTRAL CO-OPERATIVE CREDIT

SOCIETY LIMITED AT PONDICHERRY " is a record of project work done by

JANANISRI . N (Reg.No:22810018) under my guidance, and that the report has not

previously formed the basis for the award of any degree, diploma, associate ship,

fellowship or similar other titles and that it is an independent work done by her.

Place: Puducherry Signature of the Guide

Date:
 ACKNOWLEDGEMENT

It is true that success of any task would be accomplished with the support and
encouragement from various people who made these tasks a grand success. To
express my gratitude, I extend a word of thanks to the colossal brain behind this. I
formerly thank the almighty for extending his blessing on me and who was all through
the way during the course of our project.

I bestow my cordial gratitude and it is also my privilege to thank our Principal Dr.
E.VIJAYAKRISHNA RAPAKA M. Tech., Ph. D and Vice Principal Prof. Dr. K.
AYYAPAN, M. Tech., Ph.D.

I am grateful to express my sincere gratitude to the Professor & Head of the

Department Dr. JUNO JASMINE MBA, M.phil, Ph.D, who helped to carry out
this project with his instructions, guidance and moral support.

I put forth my endless gratitude to my Internal Guide and Assistant Professor Mrs.
D.PRIYANKA, B.Tech., MBA for her constant source of inspiration for being a
pillar of support during the course of the project.

I also owe a vote of thanks to all faculties of the DEPARTMENT OF

MANAGEMENT STUDIES, for their constructive ideas and to be supportive to
finish this project. I specially thank my PARENTS and FRIENDS for their unfailing
support and encouragement throughout my project work.

JANANI SRI .N
(Reg. no 22810018)
S.NO LIST OF CONTENTS PAGE NO

1-7

1 INTRODUCTION

8-10

2 COMPANY PROFILE

11

3 NEED FOR THE STUDY

11

4 OBJECTIVES OF THE STUDY

11

5 LIMITATION OF THE STUDY

12-21

6 REVIEW OF LITERATURE

22-26

7 RESEARCH METHODOLOGY

27-42

8 ANALYSIS AND INTERPRETATION

43

9 FINDINGS

44

10 SUGGESTION

45

11 CONCLUSION

46

12 BIBLIOGRAPHY
S.NO LIST OF TABLES PAGE NO

7 27

1 CURRENT RATIO

28

2 PROPRIETORY RATIO

29

3 NET PROFIT RATIO

30

4 FIXED ASSET TURNOVER RATIO

31

5 WORKING CAPITAL TURNOVER RATIO

32

6 DEBTORS TURNOVER RATIO

33

7 CAPITAL TURNOVER RATIO

34

8 RETURN ON INVESTMENT RATIO

S.NO LIST OF FIGURES PAGE NO

27

1 CURRENT RATIO

28

2 PROPRIETORY RATIO

29

3 NET PROFIT RATIO

30

4 FIXED ASSET TURNOVER RATIO

31

5 WORKING CAPITAL TURNOVER RATIO

32

6 DEBTORS TURNOVER RATIO

33

7 CAPITAL TURNOVER RATIO

34

8 RETURN ON INVESTMENT RATIO

 EXECUTIVE SUMMARY

The purpose of the study on a study on financial performance analysis in primary

agricultural co-operative credit society limited at pondicherry . The study was conducted
over a period of 8 weeks in the month of October 2023. Secondary data were used for
the study. Secondary data was collected from books, journals, and company records. The
gathered information was critically analyzed by using various statistical tools like ratio
analysis
 CHAPTER 1
1.1 INTRODUCTION
Every business concern wants to know the various financial aspects for effective
decision making. The main aim of preparing a financial statement is to achieve the
objectives of the firm as a whole. The term financial statement refers to an organized
collection of data on the basis of accounting principles and conventions to disclose its
financial information.
Financial performance is a subjective measure of how well a firm can use assets
from its primary mode of business and generate revenues. The term is also used as a
general measure of a firm's overall financial health over a given period. Analysts and
investors use financial performance to compare similar firms across the same industry or
to compare industries or sectors in aggregate.
1. Statement used in evaluating overall financial performance include the
balance sheet, the income statement, and the statement of cash flows.
2. Financial performance indicators are quantifiable metrics used to measure
how well a company is doing.
3. No single measure should be used to define the financial performance of a
firm.
4. Financial performance tells investors about the general well-being of a firm.
It's a snapshot of its economic health and the job its management is doing.
5. A key document in reporting corporate financial performance is Form 10-K,
which all public companies are required to publish annually.
6. There are many stakeholders in a company, including trade creditors,
bondholders, investors, employees, and management. Each group has its own
interest in tracking the financial performance of a company.

IMPORTANCE OF FINANCIAL PERFORMANCE

Financial Statements are very important as it accurately reflects business
performance and financial position of the company. Additionally, it helps all stakeholders
including management, investors, financial analyst etc to evaluate and take suitable
economic decisions by comparing past and current performance and therefore predict
future performance and growth of the company.
1. BALANCE SHEET

The balance sheet shows the financial position of the company and provides detailed
investments of the company’s asset investments. The balance sheet also contains the
company’s debt and equity levels. This capital mix helps investors and creditors
understand the position and the company’s performance. There are differences in which
various items are reported in IFRS and US GAAP. For example, long-lived assets,
inventory, intangible assets, leases, impairment of longed lived assets as well as taxes.
2. INCOME STATEMENT

The balance sheet is a snapshot of the company’s assets, liabilities, equity, and debt. It
does not show what actually happened in the period that caused the company to get to the
position where it is now. Therefore, profit figures on the income statement are important
to the investors. Income statement format contains sales, expenses, losses, and profit.
Using these statements can help investors evaluate the companies past performance and
determine the future cash flows. IFRS and US GAAP also have a difference in the
classification of certain expenses like restructuring charges, shipping costs, and handling
costs. The necessary expense of depreciation and discontinues operations are also treated
very differently.
3. FLOW STATEMEN

Cash flow statement shows the inflow and the outflow of the cash flow in and out of
business during the financial period. This gives the investors an idea if the company has
enough funds to pay for its expenses and purchases. The cash flow statement has all three
main headings, ie Operating, Investing, and Financing. This gives the business an
overview of all the entire business. Under the US GAAP interest received and paid will
be a part of operating activities while under IFRS interest received will be a part of
operating or investing activities. Interest paid will be a part of operating or financing
activities. Similarly, under US GAAP dividends received will be a part of operating
activities while dividends paid will be a part 5 of financing activities and under IFRS,
dividends received will be a part of operating activities while dividends paid will be a
part of the financing
4. STATEMENT OF EQUITY

This is primarily important to the equity shareholders because it shows the changes in
the components like retained earnings during the period. The difference between equity
and debt shows the company’s net worth. A company with a steady increase in retained
earnings is sustainable as opposed to increasing shareholder base.
5. MANAGEMENT

The complexities and the size of the business make it necessary for the management to
have up to date, accurate and detailed information of the business and the financial
position. The financial position helps the management in understanding the performance
of the company in comparison to the other businesses and the sector. Providing
management with accurate information enables them to form proper policies for the
companies and take correct decisions. The performance of management is ranked by
these statement, the performance of these statements will help management justify their
work to all the parties involved in the business.
6. SHAREHOLDERS

Shareholders are the owners of the business but do not take part in making decisions
and day to day activities. However, these results are shared with the shareholders at the
AGM held annually. These statements enable the shareholders to understand how the
company has been performing. It also allows them to judge the present and future
performance. Financial statements are the most important source of information for
current and prospective customers. They also need it to understand the dividend pay-out
ratio and forecast the future dividends.
7. CREDITORS AND LENDORS

Factors like liquidity, debt, profitability are all judged by the essential metrics in the
financial statements. Creditors and Lenders are most concerned about the company’s debt
position. If the debt level is higher than the other companies in the same industry, it
means that the company is over-leveraged. Analysing these statements will help them
decide if they want to continue and determine the future course of action.
8. EMPLOYEES

There are companies that present a different financial statement for its employees.
Employees need business information for mainly two reasons their current wage and
future salary appraisals. They will be interested in knowing the current condition as well
as the future earnings.
9. COMPANY
1. DEBT MANAGEMENT
Debt can cripple the progress of any company no matter which sector the
company belongs to. Ratios like debt to equity, interest coverage ratio,
debt service charge, etc. help the management take important decision
related to debt.
2. TREND ANALYSIS
Trend analysis of the future metrics and identify the trend of both past and
present. This will help the business understand the current weakness and
overall health of the company.
3. TRACKING
By getting accurate and regular information, decisions can be made
quickly and swiftly. This helps in avoiding roadblocks and maintaining
financial liquidity at the same time.

10. LIABILITY MANAGEMENT

If the company wishes to borrow any money, then it can have a look at the current
liabilities by using the financial statements. Business loans, credit cards are the types of
liabilities that the company must consider before applying for further loans.
11. COMPLIANCE
It is mandatory for all public companies to publish financial statements quarterly or
annually. Hence to also be compliant with the government norms it is necessary to
publish these statements. There are also differences in the layout of the balance sheet and
income statement. There is no specific requirement for balance sheet and income
statement; however, public companies must follow the particular guidelines as per the
regulation by the SEC.
CONSTITUENTS OF ANNUAL FINANCIAL STATEMENT
The annual financial statements consist of the following five statements:
1. Balance sheet
2. Statement of profit and loss
3. Cash flow statement
4. Statement of changes in equity
5. Notes of financial statement

Balance sheet: The balance sheet presents the financial position of an entity at a
specific point in time. IAS 1 “Presentation of Financial Statements,” require
presentation of the following items on the face of the balance sheet as a minimum
requirement.
Assets: Including Non-Current Assets such as property, plant and equipment,
intangible assets, financial assets, assets held for sale, deferred tax asset, and current
assets such as inventory, receivables, cash, and cash equivalents.
Liabilities: Including financial liabilities, and current liabilities such as trade
payables and provisions. Equity: Including share capital, retained earnings, and
minority interest.
Statement of profit and loss: The income statement is prepared for reporting the
financial performance of the entity during the year. The accounting could be the
calendar year or fiscal year, depending upon the accounting policy followed by the
entity. The minimum items to be presented on the face of the income statement as
per “Presentation of Financial Statements,” Cash flow statement: All entities that
prepare their annual financial statements in line with IFRS or IAS are required to
present the cash flow statement as part of annual financial statements.
Statement of changes in equity: The amount of profit and loss attributable to the
shareholders. Transactions made with equity shareholders such as the issue of new
shares, the amount of dividend paid, and balance of the reserves and surplus. The
corrections made concerning errors made in the past. In the case of any changes
made in accounting policies, the disclosure about the effect of the change on
financial statements.
 Cash flow statement: All entities that prepare their annual financial statements in
line with IFRS or IAS are required to present the cash flow statement as part of
annual financial statements. The cash flow statement reports the changes in cash and
cash equivalents during the year due to operational, financing, and investing
activities.
Statement of changes in equity: The amount of profit and loss attributable to the
shareholders. Transactions made with equity shareholders such as the issue of new
shares, the amount of dividend paid, and balance of the reserves and surplus. The
corrections made concerning errors made in the past. In the case of any changes
made in accounting policies, the disclosure about the effect of the change on
financial statements.
Notes of financial statement: Notes to the financial statements are an integral part
of financial statements and include:
Specific policies used as per GAAP/IFRS.
Accounting estimates details of all the amounts disclosed on the face of the balance
sheet and income statement.

FINANCIAL STATEMENT:
A financial statement is an organized collection of data according to logical and
constant accounting procedures. Its purpose is to convey an understanding of financial
aspects of a business firm. It may show a position at a moment of time as in the case of a
balance sheet, or may reveal an activity over a period of time. As in of an income
statement.
Thus, the term financial statement generally refers to the basis statements:
1. The income statements
2. The balance sheets
3. A statement of retained earnings
4. A statement of changes in financial position in addition to the above two statements.
DEFINITION:
According to John N. Myer (1985), “the financial statements provide a summary
of the accounts of a business enterprise, the balance sheet reflecting the assets, liabilities
and capital as on a certain date and the income statement showing the results of
operations during a certain period”.
FINANCIAL STATEMENT ANALYSIS:
It is the process of identifying the financial strength and weakness of a firm from
the available accounting data and financial statement. The analysis is done by properly
establishing the relationship between the items of balance sheet and profit and loss of the
first take of financial analysis s to determine the information relevant to the decision
under consideration from the total information contained in the financial statement. The
second step is to arrange information in a way to highlight significant relationship. The
final step is interpretation and drawing of inference and conclusion.

RATIO ANALYSIS:
Ratio analysis is widely used tool of financial analysis. The term ratio is referring
to the relationship expressed in mathematical terms between two individual figures or
group of figures connected with each other in some logical manner and are selected form
of financial statements of the concern. It helps to express the relationship between
accounting figures in such a way that users can draw conclusions about the performance,
strengths and weakness of a firm.
 COMPANY PROFILE

PRIMARY AGRICULUTRAL CO-OPERATIVE CREDIT SOCIETY LIMITED

IN MURUGAPAKKAM PUDUCHERRY

Primary agricultural credit societies (PACS) occupy the predominant position in the
cooperative credit structure and forms its base. PACS is organized at the grass roots level
of a villages or a group of small villages.

It is the basic unit which deals directly with the rural (agricultural) borrowers, given
those loans and repayments of loans given. Its serves as the final link between the
ultimate borrowers on the one hand and the higher financing agencies, namely the CSBS
and the RBI/ NABARD on the other hand.

At the end of June 1989 there were 87,000 PACS. These societies covered about 60%
of 5.8 lakh villages. Their membership of crores covered about 65% of total estimate
population of about 14 crores of rural households.

HISTORY OF COOPERATIVE BANK IN INDIA:

The historical roots of the cooperative cast in the world days hack to days of misery and
distress in Europe faced by common people who had little or as to credit to find their
basic needs, in uncertain times. The idea special when the continent was faced with
economic turmoil which lod large population to live at subsistence level without any
economic security.

People were forced to poverty and deprivation. It was the idea of Hermann Schule (1808
83) and Friedrich Wilhelm Raiffeisen (1818-88) which took shape as cooperative banks
of today across the world. They started to promote the idea of easy availability of credit
to small businesses and for the poor segment of society.

It was similar to the many microfinance institution which have became highly popular in
developing economies of today. Although this helped spread cooperative movement in
many parts of Europe, in British Isles it is came from the revivalist Christian movement
and found high acceptance with working class and lower middle class segments of
society.

However, UK and Irish credit unions in 20h century were inspired by US credit unions
which in turn owe their emergence to Canadian adaptations of the German cooperative
banking concept. These movements were supported by governments of respective
countries. This success was achieved due to failure of the commercial banks to fund and
support the need of small business owners and ordinary people who were outside the
formal banking net
ABOUT THE BANK:

STRUCTURE OF CO-OPERATIVE BANK:

1. PRIMARY CO-OPERATIVE CREDIT SOCIETY:

The primary co-operative credit society is an association of borrowers and nonhomolens

residing in a particular locality. The funds of the society are derived from the share
capital and deposits of members and loans from the central os-operative tanksThe
borrowing powers of the members as well as of the city are fired. The loans are given to
members for the purchase of cattle, fodder, fertilizers, pesticides, etc

2. CENTRAL COOPERATIVE BANK

These are the federation of primary credit societies in a district and are of two types as
well as individuals. The funds of the bank consist of share market, deposits, loans and
overdraft from the state co-operative banks and joint stocks. These hanks provide finance
10 member societies within the limits of borrowing capacity of societies. They also
conduct all the business of the joint stock bank

3. STATE CO-OPERATIVE BANK:

The state co-operative bank is a foderation of central co-operative bank and acts as a
watchdog of co-operative banking structure in the state.Their funds are obtained from
share capital, deposits, loans and overdrafts from Reserve Bank of India. The state co-
operative bank lends money to central co-operative banks and primary societies and not
directly to the farmers

4.URBAN CO-OPERATIVE BANK:

The term Urban Co-operative banks (UCBs), though not formally defined, refers to
primary co-operative banks located in urban and semi-urban areas. These banks, till
1996, were allowed to lend money only for non-agricultural purpose. This distinction
does not hold . These banks were traditionally centered on communities, localities, wirk
place These essentially lend to small borrowers and businesses. Today, their scope of
operations has widened considerably
 PROBLEMS OF CO-OPERATIVE BANK: DUALITY OF CONTROL SYSTEM
OF CO-OPERATIVE BANKS;

However, concerns regarding the profesionalism of urban co-operative banks gave rise to
the view that they should be better regulated. Large co-operative banks with paid up
share capital and reserve of Rs.1 Lakh were brought under the purview of Banking
Regulation Act 1949 with the effects from 1st march, 1966 and within the ambit of the
Reserve Bank's supervision

This marked the beginning of an era of the duality of control over these banks Banking
related functions (viz, licensing, area of operations, interest rates etc.) were to be
governed by RBI and registration, management, audit and liquidation, etc, governed by
State Governments as per the provisions of respective State Acts. In 1968, UCB's were
extended the benefits of deposit insurance

Towards the late 1960s there was debate regarding the promotion of the small
scaleindustries. UCB's came to be seen as important players in this contest. The working
group on industrial financing through co-operative banks attempted to broaden the scope
of activities of urban co-operative bark by recommending their bank should finance the
small and cottage industries. This was rewarded by the banking commission in 1969.

The Madhavas Committee (1979) evaluated the role played by urban co-operative banks
in greater details and drew the road map for their future role recommending support from
HBI and government in establishment of such banks in backward areas and prescribing
viability standards.

PRIMARY AGRICULTURAL CREDIT SOCIETIES IN INDIA;

Primary agricultural credit societies (PACS) occupy the prolominant position in the
cooperativ credit structure and forms its base. A PACS is organized at the grass roots
level of a village or a group of small villages. It is the basic unit which seals directly with
the rural (agricultural) borrowers, gives those loans and repayments of loans given. It
serves as the final link between the ultimate borrowers on the one hand and the higher
financing agencies, namely the CSBS and the RBI NABARD on the other hand.

As such, the health and strength of the co-operative credit movement depends crucially
upon the
health and strength of these societies. But, despite much official effort and support, and
numerical expansion of the PACS in membership, working capital, loans given and other
activities, their health and working leave much to be desired. At the end of June 1989
there were 87,000 PACS. These societies covered about 60% of 5.8 Lakh villages. Their
membership of 9 Crores covered about 65% of total estimated population of about 14
Crores of rural households. More than half of the members of PACS are persons of small
means-small fanners, agricultural laborers and rural artisans and about 25% of them
belong to scheduled castes and tribes.
All these are very strong features of the co-operative credit organization, sub-continental
size, covering the large bulk of Indian villages. And yet the organization in not fulfilling
its roll adequately due to several weaknesses.
1.2NEED FOR THE STUDY:
1. The financial statement analysis helps to measure the financial performance of
the company
2. Evaluate the company’s profitability, liquidity and solvency.
3. It helps to forecast the short term and long-term growth.

1.5OBJECTIVES OF THE STUDY:

1. To find the Financial Performance of Special Sealing Systems.
2. To find the profitability and liquidity position of the company.

1.6 LIMITATIONS OF THE STUDY:

1. As the study is based on secondary data, the inherent limitation of the
secondary data would have affected the study
2. This study needs to be interrupted carefully. They can provide clues to the
company’s performance or financial situation.
3. But on they own, they cannot show the performance is good or bad. It required
some quantitative information for an informed analysis to be made.
 CHAPTER II

2.1 REVIEW OF LITERATURE

The review of literature guides the researcher for getter better understanding of
methodology used, limitations of various available estimation procedures, data bases,
lucid interpretation and reconciliation of the conflicting results. Besides this, the reviews
earlier studies explore the avenues for present and future research related to the subject
matter. A number of research studies have been carried out on different aspects of
performance appraisal by the researchers, economists and academicians in the area of
fiancé in India and Abroad. A review of this analysis is important in order to develop an
approach that can be employed in the context of the present study. Therefore, in this part
a review of earlier studies related to financial performance has been made and rationale
for the present study is stated below.
Manish Mittal and ArunnaDhademade (2005) they found that higher
profitability is the only major parameter for evaluating banking sector performance from
the shareholders point of view. It is for the banks to strike a balance between commercial
and social objectives. They found that public sector banks are less profitable than private
sector banks. Foreign banks top the list in terms of net profitability. Private sector banks
earn higher non-interest income than public sector banks, because these banks offer more
and more fee-based services to business houses or corporate sector. Thus, there is urgent
need for public sector banks to provide such services to stand in competition with private
sector banks
I.M. Pandey (2005): An efficient allocation of capital is the most important
financial function in modern times. It involves decision to commit the firm's funds to the
long-term assets. The firm’s value will increase if investments are profitable and add to
the shareholders wealth. Financial decisions are important to influence the firm’s growth
and to involve commitment of large amount of funds. The types of investment decisions
are expansion of existing business, expansion of new business and replacement and
modernization. The capital budgeting decisions of a firm has to decide the way in which
the capital project will be financed. The financing or capital structure decision. The assets
of a company can be financed either by increasing the owners claims on the creditors’
claims. The various means of financing represent the financial structure of an enterprise.
Medhat Tarawneh (2006) financial performance is a dependent variable and
measured by Return on Assets (ROA) and the intent income size. The independent
variables are the size of banks as measured by total assets of banks; assets management
measured by asset utilization ratio (Operating income divided by total assets) operational
efficiency measured by the operating efficiency ratio (total operating expenses divided by
net income)
Vasant desai (2007): The Reserve Bank of India plays a very vital role. It is
known as the banker’s bank. The Reserve Bank of India is the head of all banks. All the
money formulations of commercial banks are done under the Reserve Bank of India. The
RBI performs all the typical functions of a good central bank as it is involved in planning
the economy of the country. The main function is that the RBI should control their credit.
It is mandatory for the Bank to maintain the external value of the rupee. Major function is
that it should also control the currency.
K. C. Sharma (2007) Banking has entered the electronic era. This has been due
to reforms introduced under the WTO compliances. Private sector banks have been
permitted to open their shops in the country. These banks are either foreign or domestic
banks with foreign partnerships. Some of them have been set up by Development
Financial Institutions in order to embrace concept of universal banking, as practiced in
advanced countries. The private sector on the other hand have began their high tech
operations from the initial stage and made the elite of the country to taste the best
banking practices that happens in the western countries. They have foreseen the digital
world and have seen the emerging electronic market, which has encouraged them to have
a better customer service strategy that would be able to deliver the things as per
customer’s requirement.
DR.S. Gurusamy (2009): One of the key elements of importance for shaping the
financial system of a country is the pension fund. The fund contributes to the
development of social security systems of a country is the pension fund. The fund
contributes to the development of social security system of a country. A fund is
established by private employers, governments, or unions for the payment of retirement
benefits. Pension funds are designed to provide for poverty relief, consumption
smoothing etc. Pension funds not only provide compensation for the loyal service
rendered in the past, but in a broader significance. Works as a measure of socio-
economic justice. Pension system refers to the framework of arrangement under which
individuals gain specified entitlements to a regular income in retirement called pension.
Dangwal and kapoor (2010) also undertook the study on financial performance
of nationalized banks in India and assessed the growth index value of various parameters
through overall profitability indices. They found that out of 19 banks, four banks had
excellent performance, five banks had good performance and six banks had poor
performance. Thus, the performance of nationalized banks differs widely
Prasana Chandra (2010): Fundamental of financial management covers all the
aspects of the subject from the basics overview of the financial environment to the
financial analysis and financial planning. The basic consists of forms of business
organization which gives detailed information about the financial management of the
organization. After the analysis part budgeting of capital and fundamental valuation of
concept is in detail. It provides an introduction to the financial management and to the
financial environment. The fundamental of financial management provides a good
coverage of the basic concepts relating to the financial environment.
NeeruMundrai, Kamni Tandon, Nidhi Malhotra (2011)excels books found
that there is significant impact on the SBI’s performance due to entry of new private
sector banks as the new banks are profit oriented institutions while traditional banks are
operating with the shackles of social responsibility towards the society. The other reasons
that can be attributed are slow technological up gradation, poor staffing and employment
practices which affect long term profitability of public sector banks. The study revealed
that profitability of SBI is lower than that of private sector banks even predicting of
private sector banks (business per employee) is higher than state banks.
Fernando Ferreng (2012) it is generally agreed that recent economic crisis
intensified worldwide competition among financial institution. This competition has
direct impact on how bank deal with their customer and achieve its objectives
performance evaluation of banks is the key function for improving banks performance.
Banks profitability and success to a large extent depends on bank branch financial
performance
RamchandanAzhagasahi and SandanvnGejalakshmi (2012): In their study
found the impact of assets management operational efficiency and bank size on the
financial performance of the public sector and private sector bank. The research revealed
that bank with higher total capital deposits and total assets do not always mean that they
have better financial performance. The overall banking sector is strongly influenced by
assets utilization, Operational efficiency and interest income.
NutanTroke and P K Pachorkar (2012): The study related that the private
sector bank. The percentage of other income in the total income is higher than public
sector bank. Public sector bank depends on intent income for their efficiency and
performance. The operational efficiency of private sector banks is better than public
sector banks. Private sector bank uses their assets quality better than public sector banks.
Dr.Dhanabhakyam&M.kavitha (2012) in their research used some important
ratio to analyses the financial performance of selected public sector banks such as ratio of
advances to assets, ratio of capital to deposit, ratio of capital to working fund, ratio of
demand deposit to total deposit, credit deposit ratio, return on average net worth ratio,
ratio of liquid assets to working fund etc. The ratio of advances to assets shows an
increasing trend for most of the public sector bank. It shows aggressiveness of bank in
lending which ultimately result in high profitability. The ratio of capital to deposit also
indicates an increasing trend in the capital of banks. This ratio enables the bank to meet
the contingencies of repayment of deposit.
The ratio of capital to deposit in decline. The ratio capitals to working fund also
indicate that the overall efficiency of the selected public sector banks are good. On the
other hand, the ratios of demand depart to total deposit is declining. This indicates better
liquidity position of bank. The credit deposit ratio of most of the bank shows an
increasing trend. It shows that the profitability of the banks in government. The return on
average net worth also shown an increasing trend.
Debashish Sur (2012) a financial statement is a collection of data organized
interims of some laid down accounting procedures. Financial statements are blue print of
the working or performance of any organization. The users of financial statements are
direct users and indirect users
Ravinder Kaur (May 2012): A comparative study of SBI and ICICI Bank, the
author has written an International Multidisciplinary Research Journal. Due to
globalization, banking sector has developed a lot. The banking sector in India has very
large network. One of the popular banks is the State Bank of India. The SBI has over
16,000 branches over a wide range of banking. The main objective of study is to examine
the financial performance of SBI and ICICI Bank. SBI is a public sector bank and ICICI
bank is a private sector bank. Ratio analysis was applied to analyse and to compare the
trends in banking business and financial performance.
Dr. Anurag B Singh and Ms.Priyanka Tandon (2012): The researcher has
mentioned the importance of the banking sector in the economic development of the
country. In India banking system is featured by large network of Bank branches, serving
many kinds of financial services of the people. The research Methodology used by there
is a comparative analysis of both the banks based on the mean and compound growth rate
(CGR). The study is based on secondary data collected from magazines, journals & other
published documents. Which was a limitation since it’s difficult to prove the geniuses of
the data.
PawankumarAvdhanam and SriniwasKolluru, RamkrishneFonnd, (2013) in
their study that state bank group other than SBI home finance has performed better
throughout the period of study. Though there was a decline in PAT for the year 2000-01
but then there was continuous rise in PAT. Most public sector banks have performed
better over year.
Vasant Desai, (2013): The performance of a bank can be assessed in their broad
dimension viz. business development, customer service and housekeeping. The resources
that a branch has are manpower, premises, planning, system procedure, organizational
structure and general administration. The efficiency of a branch would be measured by
the extent which it has balanced between three parameters William George
A J and Dr. Manoj P K (2013): This research paper is a study of the modern
management philosophy of customer relationship management (CRM) which deals with
the maintenance of a sound relationship with the customers. The study is carried out in
the Kerala based commercial banks. Also, this study compares the CRM between the
public and private sector banks of the same region. Kerala has been very conducive and
of great benefit for the development of banking sector. The Indian banking sector is
undergoing many changes and the banks are facing many challenges. Customers switch
banks and go to other banks where they find better services and thus the find it difficult to
retain their old customers.
MS. Foiza (2013): The development of electronic commerce is growing at a fast
pace because of advancing global infrastructure. To meet these demands businesses, need
innovative ways to create value such as different IT infrastructure, different enterprise
architectures and different ways of thinking about doing business. By adopting
technology in banks, it has established the use of different technology tools in banking.
Which enables bank to reduce transaction cost, saving money and also saving time’s E-
Banking refers to deploying banking services over electronic and communication
networks directly to customers. Internet banking provides benefits such as cost saving
reaches new segment of population, efficiency, enhancement of the bank’s reputation and
better customer service.
Cheenu Goel, Chitwan BhutaniRekhi, (2013) The commercial banking system
provides a large portion of the medium of exchange of a given country and is the primary
instruments through which monetary policy is implemented. Commercial banks make the
productive utilization of idle finds and thus assist the society to produce wealth.
Berry, Kehoe and Lindgreen’s study (1980) revealed that the most frustrating
aspects of bank marketing were lack of management support, lack of interdepartmental
co-operation, crisis management and government intrusion. It shows that during the
earlier period there was not much focus on marketing of financial services. There was
hardly any marketing done by banks but after 1991 there are tremendous changes in the
banking sector in India competition among banks emerged due to entry of private sector
banks and foreign banks.
Kennedy and Muller (1999), has explained that “The analysis and interpretation
of financial statements are an attempt to determine the significance and meaning of
financial statements data so that the forecast may be made of the prospects for future
earnings, ability to pay interest and debt maturine (both current and long term) and
profitability and sound dividend policy.”

T.S.Reddy and Y. Hari Prasad Reddy Without subjecting these to data analysis,
many fallacious conclusions might be drawn concerning the financial condition of the
enterprise. Financial statement analysis is undertaken by creditors, investors and other
financial statement users in order to determine the credit worthiness and earning potential
of an entity. Susan Ward (2008), emphasis that financial analysis using ratios between
key values help investors cope with the massive number of numbers in company financial
statements. For example, they can compute the percentage of net profit a company is
generating on the funds it has deployed. All other things remaining the same, a company
that earns a higher percentage of profit compared to other companies is a better
investment option.
M Y Khan & P K Jain (2011), have explained that the financial statements
provide a summarized view of the financial position and operations of a firm. Therefore,
much can be learnt about a firm from a careful examination of its financial statements as
in valuable documents / performance reports. The analysis of financial statements is,
thus, an important aid to financial analysis.
Bernheim & Garrett (1996) Traditionally, workplace financial education
focused on investment and retirement information. Although workplace financial
education covers different topics, it is often limited to topics relevant to retirement
planning and investment, such as basic investment terminology, asset allocation
principles, risk tolerance and risk-return trade off, effects of inflation, estimation of
retirement income needs and retirement income sources, retirement 17 strategies, and the
impact of pre-retirement withdrawals on retirement income Bernheim& Garrett, 1996
Garman (1997) Workplace financial education more broadly defined refers to
any information, education, and/or services provided by an employer to help its
employees make informed financial decisions on 1) retirement plans, 2) employee
benefits, 3) credit and money management, and 4) consumer rights.
Williams (1997) made a distinction between financial counselling and financial
education. Education focuses on the processes of delivery whereas financial counselling
focuses on changing behaviour. Likewise, education is different from communication.
Communication disseminates information to an audience regardless of what the audience
does with the information. Education delivers information with the intent to initiate some
action or change on the part of a specific audience (Brennan, 1998)
Pomeroy (1997) observed that employee financial education can a) provide
ERISA 404(c) protection, b) increase employee productivity, c) save money for the
employer, d) help employees have a greater appreciation for employer-provided benefits,
e) create increased loyalty to employer, f) encourage financial readiness to retire, and g)
reduce employee theft. Rationale for employee personal finance education include: a)
financial education for employees is right thing to do, b) many workers are not
participating in employer-sponsored retirement plans, c) highly compensated employees
participate in retirement plans, d) employees who are educated about the benefits of
retirement plans choose to participate, e) Department of Labour regulations encourage
financial education, f) employers fear lawsuits from former employees claiming
negligence, and g) employees who experience difficulties with their personal finances
often carry those problems to the workplace with negative results for the employer
(Garman, 1998b)
Grable &Joo (1999) Employees indicate a desire for more workplace financial
education. Grable &Joo indicated that there is a demand from workers for workplace
financial education, especially on retirement and investment planning as well as debt
management, budgeting, and general benefits
Prasanta Paul (2011) stated on the Financial Performance Evaluation – Some of
the selected NBFCs are taken for the comparative study. In the study, five of the listed
NBFCs are considered for the analyzation of comparative financial performance.
Different type of statistical tools like standard deviation, arithmetic mean, correlation etc.
are used extensively.
Sheela Christina (2011) reported on Financial Performance of Wheels India Ltd.
Secondary data collection method is used for the analytical type of research design.
Before conducting the study, validity and reliability is checked for the past five years
where the researcher used this for the purpose of study.
 RiedEdwardj and Srinivasan Suraj (2010) made an investigation to check
whether the special items presented by the managers in the financial statements reflected
in the economic performance or opportunism.
Gaur Jighyasu (2010) focuses on the measurement of financial performance of
business group companies of non-metallic mineral products industries of India. This
study uses the 57 business group companies’ financial data of non-metallic mineral
products industries of India such as glass, cement, jewellery and gems, ceramic tiles,
refractories etc.
AmalenduBhunia (2010) took the analysis of pharmaceutical company’s
financial performance to understand how the management of finance playing a crucial
role in the growth. For a period of twelve years the study has undertaken from 1997-98 to
2008-09.
Ghosh Santanu Kumar and Mondal Amitava (2009) study on the relationship
of intellectual capital and finance performances for a period of 10 years from 1999 to
2008 of 70 Indian banks. The measurement of financial performance used in this analysis
were return on equity, return on assets and assets turnover ratio of Indian Banks.
Burange and Shruti Yamini (2008) analysed the performance of Indian Cement
Industry – The competitive landscape. The experience of the boom on the account of
overall growth of Indian Economy by the cement industry is because of the expanding of
investment and industrial activity in the cement sector. Noel Capon et al (1994) published
a meta-analysis on the impact of the strategic planning on financial performance which
has omitted a major study on corporate planning in the fortune five hundred
manufacturing firms. Finally, the conclusions were that there is a small but positive
relationship between the strategic planning and the performance existed.
Robert O.Edmister (2009) An Empirical Test of Financial Ratio analysis for
Small Business Failure. This study developed and empirically tested a number of
methods for analysing financial ratios to predict the failure of small business.
Edward I. Altman (1968) Financial ratios, discriminant analysis and the
prediction of corporate bankruptcy. This study used to analyse the performance of the
business enterprise by using ratio analysis as the analytical technique.
 R.J.Taffler (1982) Forecasting company failure in the UK using discriminant
analysis and financial ratio data. This paper reported on the discriminant model of
operational for the purpose of identification of the british companies which was under the
risk of failure and discussed the results from their application since from their
development.
M Kumbirai, R Webb (2010) A financial ratio analysis of commercial bank
performance in South Africa. This paper investigated the South Africa’s performance of
commercial banking sector period for 2005-2009.this financial ratio is used to measure
the liquidity, profitability and credit quality performance of large five commercial banks
of South Africa.
Query-Jen Yeh (1996) The application of Data Envelopment analysis in
conjunction with financial ratios for bank performance evaluation. This paper
demonstrated the application of DEA in respect to the conjunction with financial ratios to
help the bank regulators in Taiwan to gain the insight of various financial dimensions
which is link to the financial operational decisions of banks.
Thomas L Zeller et al (1997) A new perspective on hospital financial ratio
analysis. The financial factor analysis is used to define the concise set of measurements
of critical financial describing the characteristics of hospitals major financial instruments.
James A.Largay et al (1980) Cash flows, Ratio analysis and the W.T. grant
company bankruptcy. The W.T Grant company problems such as bankruptcy, liquidation
was not raised at overnight. The traditional analysis which is the ratio analysis only
cannot reveal the company problems whereas cash flow analysis reveals most of the
problems of the company.
Frederick D.S. Choi et al (1983) Analysing foreign financial statements: The use
and misuse of international ratio analysis. The foreign companies are often misused the
measurement of financial risk and return. This paper used to explain the differences in the
international accounting principles.
 Toshiyuki Sueyoshi (2005) Financial ratio analysis of the electric power
industry. This approach compares 147 nondefault firms with 24 default firms of US
power/energy market in terms of the financial performance and this is a type of non-
parametric discriminant analysis which provides the weights of linear discriminant
function.
Zhu Wuxiang and Song Yong (2001) Equity structure and firm value: An
empirical analysis of listed companies of household electric appliances industry. Based
on the sample of 20 number of listed companies in the household electric appliances the
relationship between firm value and equity structure is examined.
G.E. Halkos (2004) Efficiency measurement of the Greek commercial banks with
the use of financial ratios: a data envelopment analysis approach. This paper studied
about the application of the non-parametric analytic technique in respect of the DEA
(Data Envelopment Analysis) to measure the performance of Greek banking sector.
Yunus, N.M., Malik, S.A. (2012) states that the use of financial model is to
predict the performance of a company. The theoretical analysis in the development of
model is done using the matrix solution of the Matlab software. The model is then
validated with the actual company's business performance to determine the predicting
accuracy.
 CHAPTER
-III
RESEARCH AND METHODOLOGY

3.1 RESEARCH-MEANING:
Research is an art of scientific investigation. Redmen and Mory defines research as a
“systematic effort to gain knowledge”. Research methodology is way to systematically
solve the research problem. It is a plan of action for a research project and explains in
detail how data are collected and analyzed.
According to Clifford woody research comprises defining and redefining problems,
formulating hypothesis or suggested solution, collecting, organizing and evaluating
data: making deduction and reaching conclusion; and at last carefully testing the
conclusion to determine whether they fit the formulating hypothesis.

3.2 RESEARCH DESIGN:

Research design is the specification of the method and procedure for
acquiring the information needed to solve the problem. The search design followed
for this research study is descriptive research design. The problem of the study is to
analyses the “Financial Performance” the descriptive research is used to depict the
present state of affairs, of the business condition.

3.3 COLLECTION OF DATA:

SECONDARY DATA:
Secondary data which already was collected by someone else and which have
already been passed through the statistical process. The data is collected from the
company and some detail from the website of the company. The required data for this
study was annual report of the company of previous 5 years balance sheet and profit and
loss account statement
3.3 TYPES OF RESEARCH:

ANALYTICAL RESEARCH:
Analytical research is a specific type of research that involves critical
thinking skills and the evaluation of facts and information relative to the research being
conducted. A variety of people including students, doctors and psychologists use
analytical research during studies to find the most relevant information.

ANALYTICAL TOOLS FOR THE STUDY:

During the course of research the researcher analyzed the data by applying
Ratio analysis

3.4 TOOLS OF FINANCIAL ANALYSIS:

A financial analyst can adopt the following tools for analysis of the financial
statements. These are also termed as methods of financial analysis.

IMPORTANCES OF FINANCIAL STATEMENT:

The financial statements are mirrors which reflect the financial position and
operating strength or weakness of the concern. These statements are highly useful to
the management, investors, creditors, bankers, government, and public at large.

3.5 RATIO ANALYSIS:

This is the most important tool available to financial analysts for their work. An
accounting ratio shows the relationship in mathematical terms between two interrelated
accounting figures. These figures have to be interrelated because no useful purpose
will be served if ratios are calculated between two figures which are not at all related
to each other.
 CURRENT RATIO

Current ratio is the relationship between current assets and current liabilities.

𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭𝐬
Current ratio =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
A current ratio of 2:1 is considered ideal. That is, for every one of current liability there
must be current assets of Rs.2. If the amount less than two, it may be difficult for a firm to
pay current liabilities. If the ratio is more than two, it is an indicator of idle.

PROPRIETORY RATIO:

This ratio shows the proportion of total assets of a company which are
financed by proprietor’s funds. The proprietary ratio is also known as equity ratio. It
helps to determine the financial strength of a company &is useful for creditors to
assess the ration of shareholder’s fund employed out of total assets of the company.

𝐒𝐇𝐀𝐑𝐄𝐇𝐎𝐋𝐃𝐄𝐑 𝐅𝐔𝐍𝐃
Proprietary Ratio =
𝐓𝐎𝐓𝐀𝐋 𝐓𝐀𝐍𝐆𝐈𝐁𝐋𝐄 𝐀𝐒𝐒𝐒𝐄𝐓

FIXED ASSETS TURNOVER RATIO:

This ratio indicates the extent to which the investments in fixed assets
contribute towards sales. If compared with a previous period, it indicates whether
investment in fixed assets has been judicious or not. This ratio is calculated as follow

𝐒𝐀𝐋𝐄𝐒
𝐅𝐈𝐗𝐄𝐃 𝐀𝐒𝐒𝐄𝐓 𝐓𝐔𝐑𝐍𝐎𝐕𝐄𝐑 𝐑𝐀𝐓𝐈𝐎 =
𝐅𝐈𝐗𝐄𝐃 𝐀𝐒𝐒𝐄𝐓
WORKING CAPITAL TURNOVER RATIO:
Working capital turnover is a ratio that measures how efficiently a company is
using its working capital to support sales and growth. Also known as net sales to
working capital, working capital turnover measures the relationship between the funds
used to finance a company's operations and the revenues a company generates to
continue operations and turn a profit.

𝐒𝐀𝐋𝐄𝐒
𝐖𝐎𝐑𝐊𝐈𝐍𝐆 𝐂𝐀𝐏𝐈𝐓𝐀𝐋 𝐓𝐔𝐑𝐍𝐎𝐕𝐄𝐑 𝐑𝐀𝐓𝐈𝐎 =
𝐖𝐎𝐑𝐊𝐈𝐍𝐆 𝐂𝐀𝐏𝐈𝐓𝐀𝐋

DEBTORS’ TURNOVER RATIO:

This ratio shows, on an average number of times debtors are turned over during a year.
Average ratio indicates efficiency in asset management and vice versa.

𝐒𝐀𝐋𝐄𝐒
𝐃𝐄𝐁𝐓𝐎𝐑 𝐓𝐔𝐑𝐍𝐎𝐕𝐄𝐑 𝐑𝐀𝐓𝐈𝐎 = 𝐃𝐄𝐁𝐓𝐎𝐑

CAPITAL TURNOVER RATIO:

Capital turnover is the measure that indicates an organization's efficiency about
the utilization of capital employed in the business, and it is calculated as a ratio of total
annual turnover divided by the total amount of stockholder's equity (also known as net
worth)

𝐂𝐎𝐒𝐓 𝐎𝐅 𝐆𝐎𝐎𝐃𝐒 𝐒𝐎𝐋𝐃

𝐂𝐀𝐏𝐈𝐓𝐀𝐋 𝐓𝐔𝐑𝐍𝐎𝐕𝐄𝐑 𝐑𝐀𝐓𝐈𝐎 =
𝐂𝐀𝐏𝐈𝐓𝐀𝐋 𝐄𝐌𝐏𝐋𝐎𝐘𝐄𝐃
RETURN ON INVESTMENT RATIO:

Return on investment or ROI is a profitability ratio that calculates the profits

of an investment as a percentage of the original cost. It measures how much money
was made on the investment as a percentage of the purchase price. It shows investors
how efficiently each dollar invested in a project is at producing a profit.
𝐎𝐏𝐄𝐑𝐀𝐓𝐈𝐍𝐆 𝐏𝐑𝐎𝐅𝐈𝐓 𝐗 𝟏𝟎𝟎
𝐑𝐄𝐓𝐔𝐑𝐍 𝐎𝐍 𝐈𝐍𝐕𝐄𝐒𝐓𝐌𝐄𝐍𝐓 =
𝐂𝐀𝐏𝐈𝐓𝐀𝐋 𝐄𝐌𝐏𝐋𝐎𝐘𝐄𝐃

NET PROFIT RATIO:

This ratio measures the relationship between profit and net sales It indicates the
efficiency of the overall operations of the firm. It flows what percentage of sales is left to
the owners after meeting all ratios. An increase in net profit ratio year after year is an
indication improving working conditions and vice versa.

𝐍𝐄𝐓 𝐏𝐑𝐎𝐅𝐈𝐓 𝐗 𝟏𝟎𝟎

𝐍𝐄𝐓 𝐏𝐑𝐎𝐅𝐈𝐓 𝐑𝐀𝐓𝐈𝐎 =
𝐒𝐀𝐋𝐄𝐒
 CHAPTER - IV

DATA ANALYSIS AND

INTERPRETATION

4.1 CURRENT RATIO

year Current asset Current liabilities Current ratio

2020- 2021 1.7532 6.025 29.11
2021-2022 0.3340 30.55 0.01094
2022-2023 43.71 6.32 6.91

50

45

40

35

30
Current asset
25
Current liabilities
20
Current ratio
15

10

0
2020- 2021 2021-2022 2022-2023

SOURCE: ANNUAL REPORT

INFERENCE

In 2020-2021, the company had a very high current ratio of 29.11, indicating that it
had a substantial amount of current assets relative to its current liabilities. This suggests a
strong liquidity position. In 2021-2022, there was a significant decrease in the current
ratio to 0.01094. This is a cause for concern, as it suggests that the company's current
liabilities far exceeded its current assets during that year, potentially indicating liquidity
problems. In 2022-2023, the current ratio improved substantially to 6.91, which indicates
a much healthier liquidity position. The company's current assets are significantly higher
than its current liabilities
4.2 PROPRIETORY RATIO

year Shareholders’ equity Total assets Proprietory ratio

2020- 2021 2.788 2811.90 9.95
2021-2022 2.9189 30.79 0.0947
2022-2023 7.49 34.64 0.00216

12
9.95
10

2
0.0947 0.00216
0
2020- 2021 2021-2022 2022-2023

Proprietory ratio
SOURCE: ANNUAL REPORT

INFERENCE:
The company experienced steady growth in Shareholders' Equity and Total Assets
over the three-year period, with a significant jump in both categories in the last year. The
change in the Proprietary Ratio is notable. It shifted from a high equity-based funding in
2020-2021 to a much lower ratio in 2022-2023, suggesting a shift towards debt financing
or other forms of capital. The sharp decrease in the Proprietary Ratio in 2022-2023 may
indicate a change in the company's financial strategy, possibly involving increased
borrowing or other factors affecting equity.

4.3 DEBTOR TURNOVER RATIO

year Total Average Average Debtors Debtors turnover

ratio

2020- 2021 2.7967 0.9931 2.82

2021-2022 1.11 1.25 0.892
2022-2023 31.788 1.439 2.2084

3 2.82

2.5
2.2084

1.5

1 0.892

0.5

0
2020- 2021 2021-2022 2022-2023

SOURCES: ANNUAL REPORT

INFERENCE:
 The Debtors Turnover Ratio is a measure of how efficiently a company is managing
its accounts receivable. A higher ratio generally indicates better management. In 2020-
2021, the debtors turnover ratio was 2.82, which then decreased to 0.892 in 2021-2022
but rebounded to 2.2084 in 2022-2023. The sharp drop in 2021-2022 might indicate that
the company was not managing its accounts receivable efficiently during that period, but
the significant increase in 2022-2023 suggests an improvement in managing its debtors.

4.4 FIXED ASSET TURNOVER RATIO

YEAR TOTAL REVENUE NET FIXED FIXED ASSET

ASSET TURNOVER RATIO
2020- 2021 2.7967 0.2923 9.57
2021-2022 1.11 0.235 4.73
2022-2023 31.788 0.2953 10.75

12 10.75
9.57
10

6 4.73
4

2
0
0
year 2020-2021 2021-2022 2022-2023
SOURCES: ANNUAL REPORT

INFERENCE:
The fixed asset turnover ratio for this year was 9.57, indicating that the company
generated 9.57 times its net fixed assets in revenue during that period. Total revenue
dropped to 1.11 units, and net fixed assets decreased to 0.235 units. Consequently, the
fixed asset turnover ratio also declined to 4.73. However, in the most recent year, 2022-
2023, there was a substantial increase in total revenue, reaching 31.788 units, while net
fixed assets also increased to 0.2953 units. This resulted in a fixed asset turnover ratio of
10.75, revenue from its fixed assets compared to the previous year.

4.5 WORKING CAPITAL TURNOVER RATIO:

YEAR NET REVENUE WORKING WORKING

FROM CAPITAL CAPITAL
OPERATION TURNOVER
RATIO
2020- 2021 2.7967 1.693 1.65
2021-2022 1.11 2.43 45.74
2022-2023 31.788 37.39 0.085

25.00% 21.72%
20.00%

15.00% 13.13% 12.62%

10.00%

5.00%

0.00%
2020- 2021 2021-2022 2022-2023

NET PROFIT RATIO

SOURCE: ANNUAL REPORT

INFERENCE:
In 2020-2021, the company recorded revenue of 2.7967 units, with a working
capital of 1.693 units, resulting in a working capital turnover ratio of 1.65. In the
subsequent year, 2021-2022, the company's revenue significantly dropped to 1.11 units,
but its working capital increased substantially to 2.43 units, leading to a remarkably high
working capital turnover ratio of 45.74, indicating efficient utilization of its working
capital. However, in the most recent year, 2022-2023, the company experienced a
substantial resurgence in revenue, reaching 31.788 units. its working capital to 37.39
units, resulting in a much lower working capital turnover 0.085.
4.6 CAPITAL TURNOVER RATIO

year TOTAL TOTAL CAPITAL

REVENUE SHAREHOLDERS TURNOVER
EQUITY RATIO
2020- 2021 2.7967 2.8282 0.99
2021-2022 1.11 2.85 0.390
2022-2023 31.788 7.49 42.41

45 42.41
40
35
30
25
20
15
10
5 0.99 0.39
0
2020- 2021 2021-2022 2022-2023

CAPITAL TURNOVER RATIO

SOURCES: ANNUAL REPORT
INFERENCE:
The total revenue for the company experienced a significant increase from 2.7967 in
2020-2021 to 31.788 in 2022-2023, indicating substantial revenue growth. Concurrently,
the total shareholder equity also increased from 2.8282 to 7.49 during the same period,
suggesting an increase in the company's net assets and potentially improved financial
stability. It decreased from 0.99 in 2020-2021 to 0.39 in 2021-2022, indicating less
efficient utilization of equity for generating revenue, but then spiked to 42.41 in 2022-
2023.
4.7 NET PROFIT RATIO

year NET PROFIT TOTAL REVENUE NET PROFIT

RATIO
2020- 2021 0.3672 2.7967 13.13%
2021-2022 0.241 1.11 21.72%.
2022-2023 0.4014 31.788 12.62%

0.25
21.72%

0.2

0.15 13.13% 12.62%

0.1

0.05

0
0
YEAR 2020- 2021 2021-2022 2022-2023

Series1 Series2

SOURCES: ANNUAL REPORT

INFERENCE:
 In 2020-2021, the company generated a net profit of 0.3672 units of
currency, which represented 13.13% of its total revenue of 2.7967 units. In
the following year, 2021-2022, the company's net profit decreased to 0.241
units, but its net profit ratio increased significantly to 21.72%, indicating a
higher level of profitability relative to revenue. However, in the most recent
year, 2022-2023, the Company with a net profit of 0.4014 units, total
revenue increased to 31.788 units.

4.8 RETURN ON INVESTMENT

YEAR NET PROFIT TOTAL RETURN ON

SHAREHLDERS INVESTMENT
EQUITY RATIO
2020- 2021 0.3672 2.8282 13.00%
2021-2022 2.241 2.85 0.783%
2022-2023 0.4014 7.49 535.77%

600.00%
535.77%

500.00%

400.00%

300.00%

200.00%

100.00%
13.00% 0.78%
0.00%
2020-2021 2021-2022 2022-2023

RETURN ON INVESTMENT RATIO

SOURCES: ANNUAL REPORT
INFERENCE:
In 2020-2021, the company recorded a net profit of 0.3672, representing a 13.00% return
on investment (ROI) based on the total shareholder equity of 2.8282. However, in the
subsequent year, 2021-2022, the net profit significantly increased to 2.241, resulting in a
considerably lower ROI of 0.783% due to a slight increase in total shareholder equity to
2.85. The most notable change occurred in 2022-2023, where the net profit decreased to
0.4014, but the ROI skyrocketed to 535.77% due to a substantial increase in total
shareholder equity to 7.49.
BALANCE SHEET AS ON 2020 -2021
LIABILITIES
S.NO AS ON 31.03.2021 AS ON 31.03.2020
1 SHARE CAPITAL:
(a) members share capital A - class 168880 168880
(b) members share capital C -class 232650 222925
(c government share capital 330000 330000
2 GOVERNMENT SUBSIDY:
(a) godown building 457626.5 457626.5
(b) furniture 568332 568332
(c M.F.A.L 1933.33 1933.33
3 STAFF:
(a) staff sercurity deposit 40000 40000
(b) Appraiser sercurity deposit 15000 15000
(c staff EPF aaccount 7160541 6582171
4 DUES
(a) interest due 7022399 6371056
(b) provision for staff bonus 193640 186080
(c audit fees due 14000 14000
(d) sales tax 380.15 380.15
(e) provision for Estt.& cont 312597 329888
pondy co-op union due 500
5 ADJUSTING HEADS:
due by 585649.4 646076.4
6 MEMBERS DEPOSITS:
(a) saving bank account 48276594 42905813
(b) recurring deposit 1738400 1545200
cash certificate 10000 20000
(c fixed deposit 183150310 167884872
(d) matured deposit - (fixed dep) 109681 109681
(e) matured deposit - (cash certif.) 7118 7118
7 GENERAL RESERVES 3641289.6 3442130.6
8 PREVIOUS YEAR PROFITS:
(a) reserves fund 1207547.45 1207547.45
(b) dividend 38846.55 38846.55
(c dividend equalisation fund 1016997.87 1016997.87
(d) agricultural stabilisation fund 348528.24 348528.24
(e) common good fund 346819.16 346819.16
 bad debts reserves 57 57
bonus 20 20
audit fund 19.57 19.57
10 ADVANCE REPAYABLE A/C 8798 8798
BRANCH
TOTAL LIABILITIES 277518339.8 252657966.3
Net diff. between assets & liabilities 3672025.24 2673015.51
281190365 255330981.8
S.NO ASSETS As.on 31.03.2021 As.on 31.03.2020
1 cash on hand 1426620 2121856
2 PSC BANK ACCOUNT:
(a) SB A/c H.O Br no. 212024272 10885712.94 4245974.76
(b) SB A/c staff EPF - H.O - 5235965 4551228
703885702

(e) reserves fund P.S.C bank 1207547.45 1207547.45

(f) agrl. Stabilisation fund - PSCB 16960 16960
(g) risk fund 7777 7777
(h) spl. Bad debt reserve 1256 1256
3 SHARE CAPITAL INVESTED:
(a) pondy co-op whole sale stores 400 400
(b) P.S.C bank 93600 93600
(c PIC press 2000 2000
(d) P.C.C.S and M.S 5000 5000
(e) P.C sugar mills 1000 1000
(f) spinco 1500 1500
(g) confed 7000 7000
4 GOVERNMENT DEPOSIT:
(a) Telephone deposit 800 800
(b) post office deposit - D.C.S 1700 1700
(c post office savings A/c 1000 1000
5 MEMBER LOAN OUTSTANDING:
O.D
(a) S.T.S.E. LOAN 17240 17240
(b) S.T Jewel loan 266000 1393000
(c M.T consumer loan 15755080 848005
N.O.D
(a) S.T jewel loan 199838000 167688100
(b) M.T consumer loan 1559000 21914605
6 SHARE CAPITAL LOAN 4020 4020
7 MEMBER DEPOSIT LOAN
(a) fixed deposit 1559000 2213000
8 INTEREST ACCRUED:
(a) over due interest 629215 622571
(b) non - over due interest 9212522 7463078
(c investment interest 879388 1064439
9 ADJUSTING HEADS:
DUE TO 511065.95 519165.95
10 INVESTMENT (F.D. in CO-OP)
P.W.D CO-OP society 1000000 8500000
bharathi nagar co-op store 1278763 1278763
PSC bank main branch 34000000 29850000
JIMPER co op society 2000000
Amudham co op society 400000
11 FIXED ASSETS:
(a) furniture account 1768889.65 1768889.65
(b) buliding account 1154490 1154490
 12 EXCESS RISK FUND DUE FROM 130 130
GOVT.
13 ADVANCE RECOVERABLE PSCB 2280 2280
14 STAFF
(a) staff E.P.F advance 215900 317550
15 OTHER ITEMS:
(a) deficit stock 2357.08 2357.08
(b) condemned stock 92 - 93 1521.15 1521.15
TOTAL ASSETS 281190365 255330981.8

BALANCE SHEET AS ON 2021 – 2022

BALANCE SHEET OF 2021-2022
S.NO LIABILITIES AS ON AS ON 31.03.2021
31.03.2022
1 SHARE CAPITAL:
(a) members share capital A - class 168880 168880
(b) members share capital C -class 243770 232650
(c government share capital 330000 330000
2 GOVERNMENT SUBSIDY:
(a) godown building 457626.5 457626.5
(b) furniture 568332 568332
(c M.F.A.L 1933.33 1933.33
3 STAFF:
(a) staff sercurity deposit 36000 40000
(b) Appraiser sercurity deposit 15000 15000
(c staff EPF aaccount 5896286 7160541
4 DUES
(a) interest due 7215140 7022399
(b) provision for staff bonus 180000 193640
(c audit fees due 14000 14000
(d) sales tax 380.15 380.15
(e) provision for Estt.& cont 671513 312597
5 ADJUSTING HEADS:
due by 1160494.4 585649.4
6 MEMBERS DEPOSITS:
(a) saving bank account 60237499 48276594
(b) recurring deposit 1154400 1738400
cash certificate 10000
(c fixed deposit 196234620 183150310
(d) matured deposit - (fixed dep) 109681 109681
(e) matured deposit - (cash certif.) 7118 7118
7 GENERAL RESERVES 3891520.6 3641289.6
8 PREVIOUS YEAR PROFITS:
(a) reserves fund 1207547.45 1207547.45
(b) dividend 38943.12 38943.12
(c dividend equalisation fund 1016997.87 1016997.87
(d) agricultural stabilisation fund 348528.24 348528.24
(e) common good fund 346819.16 346819.16
bad debts reserves 57
bonus 20
audit fund 19.57
 9 UNDISBURSED PROFIT 23950798.22 20513684.98
10 ADVANCE REPAYABLE A/C 8798 8798
BRANCH
Net diff. between assets & liabilities 2407597.18 3672025.24
TOTAL LIABILITIES 307920323.2 281190365
S.NO ASSETS As.on As.on 31.03.2021
31.03.2022
1 cash on hand 3340463 1426620

2 PSC BANK ACCOUNT:

(a) SB A/c H.O Br no. 212024272 10885712.94 4245974.76
(b) SB A/c staff EPF - H.O - 703885702 5235965 4551228
(d) TDS account 680381
(e) reserves fund P.S.C bank 1207547.45 1207547.45
(f) agrl. Stabilisation fund - PSCB 1207547.45 1207547.45
(g) risk fund 1207547.45 1207547.45
(h) spl. Bad debt reserve 1207547.45 1207547.45
3 SHARE CAPITAL INVESTED:
(a) pondy co-op whole sale stores 400 400
(b) P.S.C bank 93600 93600
(c PIC press 2000 2000
(d) P.C.C.S and M.S 5000 5000
(e) P.C sugar mills 1000 1000
(f) spinco 1500 1500
(g) confed 7000 7000
4 GOVERNMENT DEPOSIT:
(a) Telephone deposit 800 800
(b) post office deposit - D.C.S 1700 1700
(c post office savings A/c 1000 1000
5 MEMBER LOAN OUTSTANDING:
O.D
(a) S.T.S.E. LOAN 17240 17240
(b) S.T Jewel loan 1622500 266000
(c M.T consumer loan 1669080 1523140
N.O.D
(a) S.T jewel loan 214819800 199838000
(b) M.T consumer loan 9393190 15755080
6 SHARE CAPITAL LOAN 4020 4020
7 MEMBER DEPOSIT LOAN
(a) fixed deposit 2677000 1559000
8 INTEREST ACCRUED:
(a) over due interest 474023 629215
(b) non - over due interest 8961476 9212522
(c investment interest 2396859 879388
9 ADJUSTING HEADS:
DUE TO 262053.95 511065.95
10 INVESTMENT (F.D. in CO-OP)
P.W.D CO-OP society 1000000
bharathi nagar co-op store 1278763 1278763
PSC bank main branch 39324188 34000000
11 FIXED ASSETS:
(a) furniture account 1768889.65 1768889.65
(b) buliding account 1154490 1154490
12 EXCESS RISK FUND DUE FROM 130 130
 GOVT.
13 ADVANCE RECOVERABLE PSCB 2280 2280
14 STAFF
(a) staff E.P.F advance 600400 215900
15 OTHER ITEMS:
(a) deficit stock 2357.08 2357.08
(b) condemned stock 92 - 93 1521.15 1521.15
TOTAL ASSETS 307920323.2 281190365

BALANCE SHEET AS ON 2022-2023

BALANCE SHEET OF 2022-2023
S.NO LIABILITIES AS ON 31.03.2023 AS ON 31.03.2022
1 (a) members share capital A - class 168480 168880
(b) members share capital C -class 250825 243770
(c government share capital 330000 330000
2 GOVERNMENT SUBSIDY:
(a) godown building 457626.5 45626.5
(b) furniture 568332 568332
(c M.F.A.L 1933.33 1933.33
3 STAFF:
(a) staff sercurity deposit 42000 36000
(b) Appraiser sercurity deposit 15000 15000
(c staff EPF account 63059333 5896286
4 DUES
(a) interest due 8616711 7215140
(b) provision for staff bonus 97958 180000
(c audit fees due 14000 14000
(d) sales tax 380.15 380.15
(e) provision for Estt.& cont 10529 671613
(f) group gratutity 180968
5 ADJUSTING HEADS:
due by 95757 1160494.4
6 MEMBERS DEPOSITS:
(a) saving bank account 69439758 60237499
(b) recurring deposit 1966500 1154400
(c fixed deposit 219348661 196234620
(d) matured deposit - (fixed dep) 109681
(e) matured deposit - (cash certif.) 7118
7 GENERAL RESERVES 4146803.2 38915220.6
8 PREVIOUS YEAR PROFITS:
(a) reserves fund 1207547.45 1207547.45
 (b) dividend 38943.12 38943.12
(c dividend equalisation fund 1016997.87 1016997.87
(d) agricultural stabilisation fund 348528.24 348528.24
(e) common good fund 346819.16 346819.16
9 UNDISBURSED PROFIT 25712246.4 23950798.22
10 ADVANCE REPAYABLE A/C 8798 8798
BRANCH
342367035.4 305512726
Net diff. between assets & liabilities 4014261.74 2407597.18
TOTAL LIABILITIES 346381297.2 307920323.2
S.NO ASSETS As.on 31.03.2023 As on 31.03.2022
1 cash on hand 2702474 3340463
2 PSC BANK ACCOUNT:
(a) SB A/c H.O Br no. 212024272 8363436.49 10885712.94
(b) SB A/c staff EPF - H.O - 5466819 5235965
703885702
(c Punjab bank 5085
(d) TDS account 567396 680381
(e) reserves fund P.S.C bank 1207547.45 1207547.45
(f) agrl. Stabilisation fund - PSCB 16960 16960
(g) risk fund 7777 7777
(h) spl. Bad debt reserve 1256 1256
3 SHARE CAPITAL INVESTED:
(a) pondy co-op whole sale stores 400 400
(b) P.S.C bank 93600 93600
(c PIC press 2000 2000
(d) P.C.C.S and M.S 5000 5000
(e) P.C sugar mills 1000 1000
(f) spinco 1500 1500
(g) confed 7000 7000
4 GOVERNMENT DEPOSIT:
(a) elephone deposit 800 800
(b) post office deposit - D.C.S 1700 1700
(c post office savings A/c 1000 1000
5 MEMBER LOAN OUTSTANDING:
O.D
(a) S.T.S.E. LOAN 17240 17240
(b) S.T Jewel loan 380000 1622500
(c M.T consumer loan 1451895 1669080
N.O.D
(a) S.T jewel loan 226335200 214819800
(b) M.T consumer loan 4820190 9393190
6 SHARE CAPITAL LOAN 4020 4020
7 MEMBER DEPOSIT LOAN
(a) fixed deposit 3663000 2677000
8 INTEREST ACCRUED:
(a) over due interest 318123 474023
(b) non – over due interest 9755703 8961476
(c investment interest 2134093.34 2396859
 9 ADJUSTING HEADS:
DUE TO 241054 262053.95
10 INVESTMENT (F.D. in CO-OP) 262053.95
(a) fixed deposit in PSCB main 50000000 39324188
branch
(b) pondicherry co-op buliding 4000000
centre
(c bharathi nagar co-op store 127863 127863
(d) P.H.E.C SOCIETY 15000000
(e) public servants
11 FIXED ASSETS:
(a) furniture account 1796886.65 1768889.65
(b) buliding account 1154490 1154490
12 EXCESS RISK FUND DUE FROM 130 130
GOVT.
13 ADVANCE RECOVERABLE PSCB 2280 2280
14 STAFF
(a) staff E.P.F advance 571600 600400
15 OTHER ITEMS:
(a) deficit stock 2357.08 2357.08
(b) condemned stock 92 - 93 1521.15 1521.15
TOTAL ASSETS 346381297.2 307920323.2
 CHAPTER -V

FINDINGS, SUGGESTION AND CONCLUSION

FINDING
1. The current ratio has decreased significantly over the years, indicating a
potential liquidity issue. In 2020-2021, the current ratio was 29.11, which
dropped to 0.01094
2. The proprietary ratio has been decreasing over the years, indicating a
decreasing proportion of shareholders' equity in total assets.
3. The debtors turnover ratio improved significantly from 2.82 in 2020-2021
to 2.2084 in 2022-2023, suggesting better management of accounts
receivable.
4. The fixed asset turnover ratio has increased over the years, indicating
better utilization of fixed assets to generate revenue.
5. In 2022-2023, the ratio is 10.75, which is a positive sign for asset
efficiency
6. The net profit ratio fluctuated over the years, with the highest being
21.72% in 2021-2022.
7. In 2022-2023, the net profit ratio was 12.62%, which is still a healthy
profit margin.
8. The capital turnover ratio has increased significantly, indicating that the
company is generating more revenue per unit of total shareholder equity.
9. In 2022-2023, the ratio is 42.41, suggesting efficient utilization of equity
capital.
10. In 2022-2023, the ROI is 535.77%, which is exceptionally high and
might be due to specific factors or changes in the business .
SUGGESTION:
1. Address the low current ratio in 2021-2022 to avoid liquidity crises in the
future. This may involve better cash management or reducing short-term
liabilities.
2. Focus on increasing the proprietary ratio to reduce dependence on
external financing sources.
3. Continue to improve debtors turnover and fixed asset turnover ratios to
ensure efficient use of assets and collection of receivables.
4. Analyze the reasons for the significant fluctuation in the working capital
turnover ratio and take appropriate actions to optimize working capital
5. Although the net profit ratio decreased in 2022-2023, aim to maintain
healthy profit margins through cost control and revenue growth.
6. Continue to improve the capital turnover ratio to make better use of
shareholder equity for revenue generation.
7. Investigate the reasons for the drastic increase in ROI in 2022-2023 to
ensure it is sustainable and not due to one-time events or accounting
adjustments.
8. Implement regular financial monitoring and analysis to identify trends and
take timely corrective actions.
CONCLUSION:
The company faced a liquidity crisis in 2021-2022, but managed to recover
and improve its financial health in 2022-2023. However, there are concerns
about the heavy reliance on debt financing, which needs to be addressed.
The fluctuations in profitability and efficiency ratios suggest a need for
better financial management and stability. Despite these challenges, the
significant increase in the return on investment ratio in 2022-2023 indicates
a potential turnaround, but sustained efforts are required to ensure long-term
financial stability and growth.
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