Dashrath Gp at Ramdev

IDEA FOUNDATION,

3rd Floor, Kamar Trust Building,Aroma High school Ushmanpura,

Ashram Road,Ahmedabad,Code – 1535

Financial Analysis Of

Ramdev Food Product Pvt. Ltd.By

DASHRATH S.SONI

A Project Report Submitted in Partial Fulfillment of the requirements for Master of Business Administration of Sikkim Manipal University, INDIA

Sikkim-Manipal University of Health, Medical and Technological Sciences

Distance Education wing Syndicate house

Manipal – 576119

1 | P a g e Ramdev Food Products Pvt. Ltd

(student declaration)

I hereby declare that the project report entitled

Financial Analysis of Ramdev Food Product Pvt. Ltd.

Submitted in partial fulfillment of the requirements for the degree of

Masters of Business Administration

To Sikkim-Manipal University, India, is my original work and not submitted for the award of any degree, diploma, fellowship, or any other similar title of prizes

DASHRATH S.SONI

Place – Ahmadabad (Name of Candidate)Date- Reg. No: 520953489


(Examiner’s Certification)

The project report of

DASHRATH S.SONI


Is approved and is acceptable in quality and form

Internal Examiner External Examiners

(Name, Qualification) (Name, Qualification)


(University study centre certificate)

This is to certify that the project report entitled


Submitted in partial fulfillment of the requirements for the degree of Masters of Business Administration of Sikkim-Manipal university of Health, Medical and Technological Sciences

DASHRATH S.SONIHas worked under my supervision and guidance and that no part of this report has been submitted for the award of any other degree, Diploma, Fellowship or other similar titles or prizes and that the work has not been published in any journal or Magazine.

Reg. No- 520953489Certified

(Guide’s Name and Qualification)


PREFACE

A practical study is an important part of M.B.A. programme. It

gives us an opportunity to relate theoretical knowledge with real

corporate situation. It also helps to improve our analytical skills,

communication skill and knowledge. The management programme and

our institute ‘IIMT’ provide real opportunity to apply theoretical

knowledge in practical field.

Industrial training is the main part for the management student. It

gives a practical knowledge to the students who have to overcome the

problems and challenges in future. The training gives an outlook to the

students about the Do’s and Don’ts of the industry. It makes us feel as

we are the part of the industry. I had a great experience.

I had studied the performance and effectiveness along with the

reach of Group V Non-Skid wherein the company is a pioneer in the

market. I have collected primary data from the channel partners and

Influences, and analysis as per my knowledge. I have provided

suggestions based on the current trend, which can make the organisation

more effective and profitable.


Through this report, I summarize that I have strived to present

myself in best possible manner to ethically and systematically. I would

be thankful for the feedback that can improve the project in all possible

ways.

To understand the market of FMCG and get knowledge of this field I

took my training in “RAMDEV FOOD PRODUCT PVT.LTD” and

prepared the project on FINANCIAL ANALYSIS OF RAMDEV

FOOD PRODUCT PVT. LTD.

In this project report I have tried my level best to display genuine

information about the company, which I visited.


DECLARATION

I, Dashrath S. Soni, student of the two-year MBA

programme at “IIMT” hereby declare that the report on grand

project work entitled “Financial analysis of Ramdev Food

Product Pvt. Ltd.” is the result of my own work.

In this project report I have tried my level best to display

genuine information about the company, which I visited.

Place: Ahmedabad DASHRATH S.

SONI

Date.:


ACKNOWLEGEMENT

The best way to have the best thought is to have many thoughts.

We think that whatever betterment I could not be complete without all

means of guide we have with us all time.

I am Specially grateful to Mr. Vijay Dodia Sir, Chief Executive

Officer of “RAMDEV FOOD PRODUCTS PVT.LTD.”, Who gave

me permission for my grand project.

Practical training is one of the crucial parts for the M.B.A.

students. I am really thankful to Mr. Alok Malaviya (H. R. Head) and

Mr. Divyang Padhiya Manager (A/c & Audit) without whose directions

and valuable insights this project would have remained incomplete.

I am thankful to my guide Prof. Amit Acharya who helps me in

all manners for industrial training. My sincere thank to IDEA

INSTITUTE OF MANAGEMENT AND TECHONOLOGY to

provide me all that facilities which a student may wish to be with him in

terms of library material. I am also thankful to director of our college

Mr. Ashish Patel who allowed us to have the privilege of the practical

training in our way of future orientation. As we all know that practical


training is one of the most learnable processes to learn and led to

improve our knowledge about the industrial processes.

Without the kind support and encouragement of my faculty

members, I won’t be able to complete my report. The motivation and the

idea for preparing the project report and the way of presenting my views

had been given by faculty. I want to thank them from the bottom of my

heart.

There are times in such task when the clock beats you time and

again you run out of energy and you just want to finish it once and

forever. My family made me endures such times with their unfailing

humor and blessings.

(DASHRATH S.SONI)


EXECUTIVE SUMMRY

Ramdev Food Products Pvt. Ltd. (RFPPL) has been in the food processing market especially in the processed spices and masala mix, over the last four decades.

The company was established in the year 1969, as a small entity by Shree Rambhai Patel. Initally the company started with producing basic spices like chilly powder, turmeric powder, coriander powder etc. under the brand name ‘Ramdev’. Later in the year 1989, it was converted into a private limited company and Shree Rambhai Patel and his three sons were the first directors.

Today company serves 25 products in 54 product mix to its customer. The company has strong foothold on branded spice market in Gujarat and other states. 750 distributors and 87,000 retailers for catering to the need of consumers in Gujarat.

The company has over the period built large capacities of various products in the food processing industry. Further, the large capacities would help the company to scale up its production as and when needed to meet the increasing demand in the market.


Objective Behind the Project

My objective behind the study of financial analysis. During My

training I wanted to know how to manage financial activity? , how to

handle management staff? And how to make the financial documents? I

found that the growth of the company and all the financial Details.

Financial management is that managerial activity which is

concerned with the planning and controlling of the firm’s financial

resources. It is a decision making process concerned with acquiring

finance and managing assets to achieve the overall goal of a business

organization,

Financial management deals with procurement of funds and their

effective utilization in the business. It is also about managing

expenditure with in a limited budget.

It is about allocating money to the necessary items first. Financial

management means the management of the matter related to and

organizations finance. It balances expenditure and income.


COMPANY PROFILE

HISTORY OF THE COMPANY


http://www.ramdevfood.com/index.html

BRIEF INTRODUCTION OF A COMPANY

India, the Queen of Spices, has always

attracted the world with her exotic masalas.

In fact, the connection goes back many

centuries. To the time when travelers like

Vasco da Gama and Columbus were still

exploring the geography of the Earth.Even

then, the mystique of Indian spices

magnetised them to India and paved the way

for a new chapter to be written in the annals

of time.

'The lure of the unknown', which repeatedly brought visitors to the

Spice Land, was the presence of nature's rich elements in those fresh

and highly aromatic spices. Spelling magic and carrying an enviable

aura, they left people spellbound.


We, at Ramdev, have preserved the same

values in all our products ever since we

started as a small unit in 1965, in

Ahmedabad, India. A small step became a

giant leap in no time. But there was a

binding force, a commitment that

helped us keep our promise of purity and

freshness in our products for all these years.

We are aware of our responsibility towards

creating, maintaining and ensuring a safe

and clean environment. We consciously

comply with relevant laws and regulations

as well as take additional care to preserve

the green cover. We plant invaluable

saplings, develop garden and promote lush

green surroundings at our manufacturing

location to work in harmony with nature.

A stretch of 2.5 km highway beautification project close to our plant has been a

symbol of Green Gujarat.


Our immense belief in the philosophy of

'reaching a customer's heart

through quality' has enabled us to spread

the rich Indian heritage to millions of

homes all over the globe. And that’s our

pride. Indian food. The Indian way.


Company ProfileCompany Name: Ramdev Food Products Pvt. Ltd.

Trade Style (S): Ramdev

Legal Form: Private Limited Company

Incorporated: 6th January 1989

Bankers: HDFC BANK LTD.

AXIS BNAK LTD.

Auditors: V.R. Shah & Associates

601,Hemkoot ,Ashram Road,

Ahmedabad – 380 006

Gujarat - India

Registered Office: Ramdev Food Products Pvt Ltd.“Spice world”Sarkhej – Bawala HighwayChangodar – 382213,Tele : (79) 22121845 Web:www.ramdevfood.com


History

9163: A family owned business was incorporated by Mr.RAMBHAI

PATEL in Ahmadabad as a flourmill.

1972: Then it started selling its own grinded spices on order.

1989: Incorporated as a Private Limited Company with the name

‘RAMDEV and introduced spices in attractive and convenient consumer

packs that set a new trend in Indian spice market .

1991:Company successfully launched instant mixes, asafoetida, blended

spices, and pickles masala thereafter.

1992: Introduced a various range of Garam Masala & Initiated

Exporting

1994: Expanded market out of Gujarat.

1999: Entered in the whole spices business

2001: Incorporated ‘EKTA FOODS’ in U.S.A.


ORGANIZATION STRUCTURE’S

CMD

Joint MD

Directors and CEO

Assistant mangers

Administration Staff

WORKER’S


THE TRAILBLAZERSChairman and Managing Director

Over 26 Years of experience in procuring, manufacturing and marketing pure Indian spices.

In 1989, introduced spices in attractive and convenient consumer packs that set a new trend in Indian spice market.

Successfully launched instant mixes, asafoetida, blended spices, pickles masala thereafter.

Actively involved in production planning, product formulation,

business development, project management, quality control,

distribution and export management


A visionary who initiated the tough task to set a distribution net work on foreign soils instead of exporting containers conventionally

A person who consciously remains active in the socio-

economic life of the state. A member of Rifle Club, Rajpath

Club, Karnavati Club, Sun-n-step Club, Gujarat Cricket Club.

Gujarat Chamber of Commerce and Industry. CFTRI, Mysore

– Research and Development.

Ex. Member – Advisory Committee, Labour Board, Gujarat Government.


Joint Managing Director

A dynamic young commerce

graduate.

Actively involved in production &

quality control.

Helped bringthe honour to become th

-e first spicecompany having ISO

22000:2005 in India.

Ruchir H. Patel

Directors

"Every day starts with expectations, but every day ends with some experience."

Minaxi H. Patel

"Success is the sum of small efforts, repeated day in & day out."

Ripal H. Patel


"Nothing can stop the man with the right mental attitude from achieving his goal."

Pradip N. Patel

"One must forever strive for excellence or even perfection in any task, however small and never be satisfied with the second best."

Gaurang N. Patel

MEMBERSHIP AND ASSOCIATIONS


Gujarat chamber of commerce and industry

Tax Payer protection Council

CFTRI, Mysore – Reserch and Development

Ex. Member – Advisory Committee, Labour Board, Gujarat

Government.

Ex. Secretary – FAG


Infrastructure Ramdev Food Products Pvt. Ltd. has world class

infrastructure to meet high standard requirements of global market.

State-of-the-art technology and the finest Machinery

Spread over a sprawling 37,000 sq. yard plot, the unit has the capacity to match the best manufacturing process and standard in the industry.

Wealth of experience in manufacturing and processing spices and food products

A special technique of Fumigation is being employed to keep the quality of the product intact and increase its shelf life.


Unit has a cleaning and processing

capacity of more than 60,000 kg. per day.

QUALITY CONTROL AND R & D

In-house Research & Development Laboratory, works in line with a standard set of research methodologies adopted by research institutes of repute in India and abroad to carry out analysis of variousproducts.

We have established a Sensory Evaluation Division and a Trained Panel in our Quality Control Lab for consumer acceptance of products


3.6.QUALITY QUANTROL & REDERCH & DEVELOPMENT

We are what we are today, and so are their products, due to just one reason: Quality. The way to reach customer’s heart is quality. This is one philosophy, which it never forgets. Even if it means a little less profit. In the long run, it is the quality that distinguishes the winner from others.

For maintaining a constant demand and for building up good reputation, it is very essential to maintain the quality of the products well above the average quality of the market samples. Even though, quality control is relatively and old concept, it has profound influence in the marketing strategy.

Ramdev product pass through strict quality control checks before they are allowed to reach you. The company has a team of dedicated food technologists under whose watchful eyes the product are manufactured. In fact Ramdev is reaching out across the world to strength a bond of affection and trust, with its winning range of products. Bringing the rich India tastes to satisfy your need.

It has full – fledge R & D quality control Lab, full equipped with modern, imported and indigenous sophisticated instrument. The laboratory undertaken the analysis of the as per National & International standards as per buyers specific requirement, moreover, our quality satisfies the most demanding standards laid down by the regulatorities.

It is highly conscious of its leadership status. And it take pride in maintaining leadership in quality. It’s our assurance to you that as along as we are there, quality is what you will always get. Purity is their signature.


BRAND PROMOTION

company product its brand through press, TV, Radio, pop and

through various schemes.

Mundra and Identity are advertising agency. As per its budgets and

strategy it plans the brand promotion activities. Currently it is more

shifted to TV and press ads.

In the past company’s advertisement campaign was done through

hording and press ads. But now it is more focused on TV and press ads.

One its most successful and campaign was of press advertisement

campaign of Mangalsutra scheme, which was operated during 1993 to

1996.

Celebrities which have worked in its advertisement campaign are

Archana Joglakar, Natasha (Kavyaanjali fame) and Gayatri Joshi

(Swades fame).


MARKET ACHIEVEMENT

First to introduce polypacks for spices in India. All the brands followed

suit polypacks become the benchmark and the trend in the spice market.

Ramdev was the first company to launch price packet Rs.2/- and Rs.5/-

packs in year 2000. to increase penetration of Ramdev product down to

the lower strata and to make packaged foods available price were

introduced. In the very first year over 68 Lac units of Chilli, Turmeric

and garam masala price packets were sold. Another trend was set.

Competition also introduced price packets.

Ramdev launched Instant mix in the year of1991.

it launched Asafoetida with agmark seal of guarantee for the time in

India in the year of 1992.

It launched super Hing low price Asafoetida in year 2001 to cater to

the needs of the market.

Open new marketers outside Gujarat. i.e. Maharstra, Chhatisgarh,

Orrisa, Rajasthan,Delhi, Madhya Pradesh, Punjab, J&K, haziabad, and

Uttaranchal. Outside Gujarat Ramdev is present in North, East and West

India. Ramdev is catering market through 11 C&F’s, 645 distributor,

78680 calls, 16 ststes and 167 sales team persons.

Ramdev has also initiated the concept of consignee sales in the states

of Assam, Biharand Jharkhand.


Currently Ramdev is at driving position in pure spices category all over

India. Ramdev caters to US,UK and other countries through distribution

channels.

Total turnover of Ramdev Food Products Pvt, Ltd. Is Rs.55 crores for

the year of 2004-05.

Ramdev has launched its premium range of spices in the month of

March, 05. The response of premium spices can be drawn from the fact

that with 15 days of the launched most of competitors launched the

premium range.

Ramdev has also launch Vedam brand incense sticks . Customer

response of Vedan is very good. Vedan is the only brand in incense stick

category according to company politics.

One of the great strength Ramdev has is its teamwork. Through its

motivated team Ramdev can solve any kind of problems with success.


BRAND

• Belief that Ramdev is a brand not just a product and all marketing efforts are to build the brand, uncompromisingly where sales just their by-product.• Ramdev is the trendsetter in deciding the prices and schemes.• Knowing the pules of the market, consumer needs and tastes have personally developed reciles of Pickle masala and taste have been very well accepted in the market.• Sales of pickle masala have jumped by 350% over last year (2002-03) touch a record high of 145 tons.• Have launched Methi Gota, Handvo instant mixes the receipt of which has been made personally like the other instant so as to get acclaim even Abroad,in the export markets.


COMPANY’S VISION AND FUTURE PLAN

• Company’s vision is to be Rs.225 crore turnover company by 2010-11.

• Vision of the company is to make available the Ramdev brand at every

counter at every centre through increase distribution networks.

• Ramdev will be concentrating on new product development.

Launching of newer product will be prime focus.

• A part from launching new products Ramdev has also initiated the

packaging development process. The packing of Instant Mix, Garam

Masala and Vedam incense sticks has already been change to attracting

and hygienic packs.

MISSION STATEMENT

‛‛A promise of Purity and Freshness’’

Mission of Ramdev is to deliver spices to customers with quality, purity

and freshness. They also try to make spices in such a way that it can

satisfy all consumers need like test, color, good for health etc. also they

wants to give spices to customer at reasonable price and it must be

available in the size that suits customer demand.


BASIC SPICES ( IN POWDER FORM) Chilli Powder / Mirch Powder

Description:

- Botanical Name : Capsicum Annum

- Chilli / Mirch is a member of the capsicum family, Chilli helps

digestion and is often consumed as a tonic

- It is the most popular culinary spice in the world

- Little aroma but their taste varies from mild to fiery hot

- India, the largest producer of chilli, is a major exporter, catering to

worldwide needs

- Chilli is rich in Vitamin C

Packaging:-

Available in consumer pack sizes--15g, 35g, 50g, 100g, 200g,

500g, 1 kg.


Coriander Powder/ Dhania Powder

Description :

Botanical Name : Coriandrum Sativum

Among one of the first spices used by mankind, Coriander seeds, is

the seed of Coriandrum sativum, which belongs to the parsley family

The name coriander comes from the Greek word koris, meaning bug

Coriander has a slightly fragrant odour and a pleasant aromatic taste

It is widely used as a condiment in foods, beverages, marinades,

desserts and pastriesand American cigarettes. It is also valued for its

medicinal properties

The distilling industry (especially for gin) is the largest user of

coriander seeds

Packaging :

Available in consumer pack sizes--50g, 100g, 200g, 500g.


Coriander Cumin Powder/ Dhania-Jeera Powder

Description : Botanical Name : Cumin - Cuminum Cyminum Coriander - Coriandrum Sativum The Cumin seeds are the seeds of Cuminum cyminum, which belongs to the parsley family The powdered mix of coriander and cumin, it combines the character attributes of both spices thereby enhancing the overall effect on taste and aroma A remedy for flatulence, indigestion and diarrhoea, the oil of cumin is also used in perfumes for its strong odour and in alcoholic beverages As a veterinary medicine it is particularly used to cure several diseases.

Packaging :- Available in consumer pack sizes-- 50g, 100g, 200g, 500g


Turmeric Powder / Haldi Powder

Botanical Name : Curcuma Domestica

A member of the ginger family, turmeric comes from the roots of

Curcuma longa, a perennial plant that grows to a height of 1 meter

Turmeric tastes bitter and is widely used in flavoring dishes

The turmeric powder is also used as natural colouring agent in

curries

Turmeric finds wide application in medicine

A powerful coloring agent, turmeric is a traditional textile dye in China and

India

Packaging:

Turmeric Powder is available in consumer pack sizes--15g, 35g, 50g,

100g, 200g, 500g, 1 kg


http://www.turmeric.co.in/%00%E5%A1%B9%EF%92%81%E1%B4%BB%E4%A1%BF%E2%B2%AF%E5%B6%82%E8%97%84%E6%8C%A7%00%00%EA%AE%A5

PRODUCTS

Basic Spices – Powder1. Chilli Powder (Mirch)

2. Turmeric Powder (Haldi)

3. Coriander Powder (dhania)

4. Coriander – Cumin Powder (Dhania – Jeera)

Packaging: Available in consumer pack sizes of 100g, 200g, 400g,

1kg,2lbs, 4lbs, and 55lbs.

Compounded Asafoetida & Blended Spices1. Compounded Asafoetida

2. Super Garam Masala

3. Premium Garam Masala

4. Super Tea Masala

5. Premium Tea Masala

6. Premium Pav Bhaji Masala

7. Premium Chhole Masala

8. Premium Panipuri Masala

9. Premium Sambhar Masala

10.Achar Masala

11.Premium Chat Masala

Packaging: Compounded Asafoetida is available in consumer pack sizes of

25g, 50g,100g in plastic Containers. Blended Spices (Garam Masala) are

available in 100g, 200g, 400g, 1lbs and 2lbs, 4lbs, 55lbs.


Whole Spices

1. Cumin (jeera)

2. Mustard (Rai)

3. Fenugreek (methi)

4. Ajowan (Ajwain)

5. Sesame (Till)

Packaging: Available in consumer pack sizes – 100g, 200, 400, 1 kg,2lbs, & 55lbs.

Herbal Products

1. Anardana

2. Aritha Whole

3. Aritha Powder

4. Black Cumin Seeds (Kala Jeera)

5. Dill Seeds (plain)

6. Dill Seeds (salted Yellow)

7. Harde Whole

8. Himaz Whole

9. Amla powder

10.Kantu Powder

11.Lemon Peel Powder

12.Lindi Pepper Whole

13.Shikakai Beans

14.Vavding Whole

Packaging: Available in consumer pack sizes of 100g,200g,400g,500g,1lbs.


General Spices1. Bay Leaves (Whole & Powder)

2. cardamom (black)

3. Cardamom ( Green)

4. Cinnamon Stick (Round)

5. Cardamom (White)

6. Cloves Whole

7. Dagar Phool Whole

8. Fennel Seeds

9. Fennel Seeds Lucknowi

10. Fenugreek Powder

11. Fenugerrk Crushed (Methi Kuria)

12. Ganthoda

13. Garlic (Powder)

14. Anistar

15. Ginger

16. Kasuri Methi (whole)

17. Kokam black

18. Kokam wet

19. mace

20. Mint Leaves

21. Mustard Crushed (Rai Kuria)

22. Nutmeg

23. Panch Puran

24. Poppy Seeds

25. Shah jiru

26. Garlic (Powder)Packaging: Grocery Items are available in consumer pack sizes of

100g, 200, 400g, 1kg, 1lbs, 2lbs and 4lbs.


Instant Mixes and Flour1. Dalwada

2. Dhokla

3. Dhosa

4. Gota

5. Gulab Jamun

6. Gujarati Dal

7. Dahiwada

8. Idli

9. Khaman

10. Menduwada

11. Rava Dhosa

12. Rava Idli

13. Sambhar

14. Handvo

Packaging: Instant Mix except Gulab Jamun Instant mix are available in consumer

pack sizes of 200g, Gulab jamun Instant Mix is available in consumer pack sizes

100gm Only.

Papad

1. Single mari Papad

2. Double Mari Papad

3. Garlic Papad

4. Plain Papad

5. Red Chilli Papad

6. Jeera Papad

7. Green Chilli Papad

8. Punjabi Papad

Packaging: Sizes 200g and 400g.


MANUFACTURING PROCESS AND PRODUCTS

The facilities has provision to manage manufacturing different types of spices . They introduced different varieties of spices like in garam masala, chillies, turmeric powder, Astofodia etc. They offer different varieties each of as unique and tasty as the reputed products.

MANUFACURING PRODUCTS :-- Garam masala

- Chilli Powder

- Turmeric Powder

- Pav Bhaji Masala

- Sambhar Masala

- Khichdi Masala

- Biryani Masala

- Chicken Masala

- Etc.etc.


International Market for Products

Following are the product company sells in all markets outside

India.

Basic Spices

Compounded Asafoetida & Blinded Spices

Instant mixes

Whole Spices

General Spices

Pulse

Food Grains

Herbal Porduct

Grocery – 1

Grocery – 2 (Branded /Unbranded)

Herbal Product (Other Brands ) Branded Product

International Market

Australia

South Africa sub – Continent

EEC Nation

UK

USA

South – East Asia


INDIAN MARKET

Bihar (Patana)

Panjab (Chandigadh)

Delhi

Haryana (Ambala)

Himachal (Parwanoo)

Madhya Pradesh (Indore, Raipur)

Maharashtra (Mumbai, Nagpur, Pune)

Orissa (Bhuvneshwar)

Rajasthan (Jaipur)

Uttar Pradesh (Kanpur, Gaziabad)

West Bengal ( Calcutta)


DISTRIBUTION CHANNEL

Distribution channel of out of Gujarat


C. & F. Agent

Distributor

Retailer

Consumer

Company

Distribution Channel of Gujarat


Company

Distributor

Retailer

Consumer

Compititor’s of the Ramdev

Swad

Wonder

Jalaram,

M.D.H.

Everest

Annpurna Masala

Badshah Masala

Rajhansh


SWOT ANALYSIS

Strength: Brand name “ RAMDEV” is the main strength for Ramdev

Basic spices.

As Ramdev known for High Quality Product, it became

core strength for Ramdev Basic spices.

Wide Area Network of distribution in whole India and as

well as outside India helps Ramdev to increase it’s sells of

Basic spices.

Ramdev is the first food company in India who has ISO

22000:2005 certificate.

Ramdev is at first place in selling of branded spices in

Gujarat.

Weakness:

High price of Ramdev Basic spices compare to its

Competitors is the main weakness.

In some areas of Ahmedabad city Ramdev basic spices Is not

available on consumer stores.


Ramdev is not spending in much on Marketing and

Advertisement of Basic spices.

Ramdev is give less commission to its retailer on comparison

to other brands.

Opportunities:

As the leading player of Basic spice is Home made basic

spices, Ramdev can capture its share by marketing.

There is no other big competitior in market who can serve

whole Indian market like Ramdev.

Ramdev can increase its share of Basic spices by marketing

it’s ‘High Quality Product’

By improving distribution networked to all villages and all

small areas of city Ramdev can increase its market share.

Threats:

As world is becoming more an more competitive, the main

threat for Ramdev is competition.

S.K, Adani, Hathi, Paustik and some local vendors can

increase its share by decrease their price of Basic spices.


HUMAN RESOURCE ASPECT

Number of the employees

There are 500+ employees work in the Ramdev food.

Recruitment and selection

The recruitment of the employees is needed if there is and retirement of the old employees in the company.

Selection procedure is concerned with securing relevant Information about an applicant. The objective of selection process is to determine whether an applicant meets the qualification for a specific job and choose the applicant who is most likely to perform well that job.

Promotion

The make their own advertisement for their product in which they take super models or same creative picture. They also use media for advertisement such as newspaper, different T.V. channel etc.

They provide different sells promotion activities such a festival offer, reasonable prices etc. The promotion of sell is generally been done by the magazine ,television, newspaper etc.

Training.


The employee have qualification ranging from S.S.C. to M.B.A.so, there levels of training are different. Generally employee training time is two years. Ramdev food called some great personality for the purpose of motivation of their employee. Ramdev food gives the chance to some good person to complete their training in well known institute.

Public Relation

As per marketing part, public relations are good and co-ordinal high post holders like managers have smoothly relations with workers. They provide necessary guidance and information during work process. Employee must have relation to reach a goal.

Wage Policy

The wage policy of the company is so simple. company pay minimum wage to their employee according to the act of the company rules and also offers some bonus for the employees and gives books and other education activities to the children of the employee. Company also declares Diwali bonus and other festival bonus.


OTHER ASPECT

Social Responsibility

For the environmental aspects Ramdev is honest.

It does not create any type of pollution surrounding the

area. Two scholarships are given every year to

outstanding children of the members of the union staff

for professional Courses. Vehicle service provides to

their employees at the door.

Ramdev food is India’s 1st Food Safety “ISO

22000-2005” certified spice company.


INTRODUCTION TO FMCG SECTOR

Fast Moving Consumer Goods (FMCG) goods are popularly

named as consumer packaged goods. Items in this category include all

consumables (other than groceries/pulses) people buy at regular

intervals. The most common in the list are toilet soaps, detergents,

shampoos, toothpaste, shaving products, shoe polish, packaged

foodstuff, household accessories and extends to certain electronic goods.

These items are meant for daily of frequent consumption.

A major portion of the monthly budget of each household is

reserved for FMCG products. The volume of money circulated in the

economy against FMCG products is very high.

FMCG companies maintain intense distribution network.

Companies spend a large portion of their budget on maintaining

distribution networks. New entrants who wish to bring their products in

the national level need to invest huge sums of money on promoting

brands. Manufacturing can be outsourced. A recent phenomenon in the

sector was entry of multinationals and cheaper imports. Also the market

is more pressurized with presence of local players in rural areas and state


brands. Broadly, FMCG industry can be divided in to following

categories.

House hold product:1. Household care

2. Health care

3. Personal care products

Tobacco products1. Tobacco/pan product2. Cigarette

Branded food1. Health beverage2. Soft drink3. Bottled water4. Edible oils

Agro product1. Dairy2. Poultry3. Sugar4. Tea5. Spicy food

The Indian FMCG sector is the fourth largest sector in the

economy with a total market size in excess of US$ 13.1 billion. It has a

strong MNC presence and is characterized by a well established

distribution network, intense competition between the organized and


unorganized segments and low operational cost. Availability of key raw

materials, cheaper labour costs and presence across the entire value

chain gives India a competitive advantage.

The FMCG market is set to treble from US$ 11.6 billion in

2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita

consumption in most product categories like jams, toothpaste, skin care,

hair wash etc in India is low indicating the untapped market potential.

Burgeoning Indian population, particularly the middle class and the rural

segments, presents an opportunity to makers of branded products to

convert consumers to branded products.

Growth is also likely to come from consumer 'upgrading' in the

matured product categories. With 200 million people expected to shift to

processed and packaged food by 2010, India needs around US$ 28

billion of investment in the food-processing industry.

Automatic investment approval (including foreign technology

agreements within specified norms), up to 100 per cent foreign equity or

100 per cent for NRI and Overseas Corporate Bodies (OCBs)

investment, is allowed for most of the food processing sector.

S ectorOutlook :-

FMCG is the fourth largest sector in the Indian Economy

with a total market size of Rs. 60,000 crores. FMCG sector generates 5%


http://www.naukrihub.com/india/fmcg/scope/sector-outlook/

of total factory employment in the country and is creating employment

for three million people, especially in small towns and rural India.

Analysis of FMCG Sector.

Recent Developments in Fast Moving Consumer Goods (FMCG)

Sector

FMCG sector is no doubt registering an up trend in growth.

According to CNBC, FMCG sector growth story will continue because

of the positive budget. Nevertheless, there are some barriers to the

growth of the sector. Indirect taxes constitute no less than 35% of the

total cost of consumer products - the highest in Asia. Last year, Finance

Minister proposed to introduce an integrated Goods and Service Tax by

April 2010.This is an exceptionally good move because the growth of

consumption, production, and employment is directly proportionate to

reduction in indirect taxes.

Budget 2010-2011 for FMCG Sector

Reduction of duty on edible oil will have a positive impact on

Marico.

Full exemption of excise duty on biscuits priced at 50 rupees or

less per kg is positive for ITC, Britannia, and Parle.

Reduction of custom duty on food processing machinery and their

parts from 7.5% to 5%.


Reduction of excise duty on food mixes from 16% or 8% to nil is

positive for ITC.

Development of rural infrastructure is in focus, which is beneficial

for FMCG companies because it is a big market for FMCGs. Better

infrastructure will improve the supply chain.

Exemption of free samples and displays from the purview of FBT will

be beneficial for FMCG companies because they spend huge amount of

money on advertising and brand building. HLL, Dabur, ITC, and Marico

will be amongst the most benefited companies.


General Introduction of the Spice Industry

India the queen of spices, has always attracted the world with her exotic

masala. In fact, the connection goes back many centuries. To the time

when travelers like Vasco da Gama and Columbus where still exploring

the geogrephy of the earth.

Since past India was also known as ‘‘An Island of Spices”. Different

countries like Arabian countries including Iran, Iraq, Kuwait, European

countries like England, France, Holland, Denmark were used to buy

spices Garam masala’s like Chilli, Coriander, Cumin, Black-pepper,

Turmeric, Garlic, Mustard etc.

It is also proved science that smell & taste of spices influence our hunger

& it also helps in digestion. In earlier times our grand mother were used

to makw all these spices at home by grinding it at home. But now on the

age of working women at the time of interest, modern & fast era they

buy it directly from market.


INDIAN SPICES: AROMINA OF SUCCESS

Indian spices are famous for their captive flavour and aroma

lending the Indian food its exquisite taste. These spices are used widely

in the areas of pharmaceuticals, neutraceuticals, perfumery, toiletry and

cosmetics. The important spices product in India are black pepper,

cardamom, ginger, turmeric, Chilli, Cumin, fennel, Fenugreek, celery,

curry, leaf, saffron.

India is a major supplier of pepper in international marke. Its

share in the world market is around 30 percent. Spices export in general

and pepper in particular have shown remarkable growth against heavy

odds. The recent example is of July 1987, when USFDA black listed

Indian black pepper on account of the presence of filth in 20 out of 60

shipment to USA sampled during December, 1986 to May 1987.

The decision of USFDA came as a severe setback to the

pepper export to USA. Pepper being the foremost item in spice export

and USA being the major importer of spices including pepper, it became

necessary for India to find ways and means to spices including pepper, It

became necessary an for India to find ways and mean to remedy the

situation. Immediately agreement struck with USFDA by introduction

compulsory pre-shipment inspection in quality control of pepper. Export


Inspection Agency of the Government of India was given the task and

quality control and Spices Board took up the scientific post harvest

handling of pepper for avoiding contamination.On the basis of assurance

given, USA lifted the ban imposed on import of pepper from India.


MONITORING QUALITY This incident gave an impetus for the Board to consider

quality as the factor for improving exports. Subsequently, the Board set

up a Quality Evaluation and up gradation Laboratory and introducing

and exporting levels. Instead, it brought out manufacturing and

exporters. These including felicitating processors/ manufacturers who

adopt modern manufacturing practice in their operation.

The Board has also started awarding Indian Spice Logo to

promote quality of Indian spices and spices production consumer packs

in oversease markets. Popularization Indian ness and quality is the

object of this logo. Apart from ensuring facilities for hygienic handling

of spices its continurance is ensured by periodical inspections. The

Board has launched another programmer to benefit processors and

manufacturers of spices for acquiring internationally accepted ISO 9000

quality certification . It also extends assistance in getting the

environment management system ISO 14000 series and establishing

HACCP system in processing units. The technical and financial

assistance in the multi tiered quality improvement programmer helped a

large number of units to acquire either one or all the system of quality

Improvement. The hygienic system adopted and practiced are based on


the quality standard prescribed by various importing countries like USA

and Europe.

The Quality Evaluation and Up gradation Laboratory is

in constant touch with various Importer so Association and Government

of importing countries to arrive a feasible and practical level of standard

without compromising on the health concern of the importing countries.

It helps to instill confidence in the mind of importers and make them

aware of the capabilities acquired by India in the field of quality

improvement and quality assurance. To evolve universally acceptable

quality standard for black pepper drawal of its samples and methods of

analysis the board is also closely interacting with various committees of

the Codex Alimentarius Commission.


Growth in Exports

The Indian spice Industry is adopting newer ways to be able to respond

swiftly to the change in the international arena. Concerted efforts on the

quality front have started paying rich dividends. India is now considered

as the best source for quality spices. This is one reason in the ports of

call have drastically come down. This it is a proof of the quality

capabilities of India, enforcing the credibility further.

The capabilities of the Indian spices exporters to contain the quality

problem in a very short span of time have made major international

spice trade association like American Spice Trade Association(ASTA),

European Spice Association (ESA) and All Nippon Spice

Association(ANSA) to invite representatives from Indian spice industry

not only in their annual convention but also in their decision making

committees where strategic decisions are taken on quality for

preservation of spices and spice products. This is a major step forward as

it elevates the status of the industry and the country and it is the first

time the views of the country are considered by the importing countries

for formulating lawn on sensitive issues like food hygiene and public

health.


Technological Advancement

To give sufficient back up to the efforts in the field of quality

improvement, the Board has also made forays into the field of

technology up gradation. Though this is complimentary to a greater

extent for quality assurance, it has opened vistas for newer products,

efficiency in production and increase in productivity. Technological

advancement has contributed to the hygienic production through

mechanization of many of the operation hitherto done manually.

Application of computer has facilitated wider production combination

result in new product especially in curry power segment. Some of the

frontier technology adopted by the industry are carbon dioxide fluid

extraction, encapsulation of spice oils, powder and cry grinding.


Value Addition

Though initiated in the last decade, value addition in the spice sector has

achived commendable position in areas of exports. More than one third

of the total exports are in the form of value added product. More than

150 value added product are now available for art technologies are

development in this sector which gives a unique position to India in the

global spice oils and oleoresins are form India.

A strong R & D support available in this sector enables the industry to

innovate in newer areas while developing new product for new uses.

Enrichment of Chilli colour, elimination of Chemical solvents to a near

zero level in the final product after extraction and crystallization of

curcumin are some of the achievement of the in-house R & D of the

spice industry.


OBJECTIVE

• Company’s vision is to be Rs.225 crore turnover company by 2010.

• Vision of the company is to make available the Ramdev brand at every

counter at every centre through increase distribution networks.

• Ramdev will be concentrating on new product development.

Launching of newer product will be prime focus.

• A part from launching new products Ramdev has also initiated the

packaging development process. The packing of Instant Mix, Garam

Masala and Vedam incense sticks has already been change to attracting

and hygienic packs.

‛‛A promise of Purity and Freshness’’

Mission of Ramdev is to deliver spices to customers with quality, purity

and freshness. They also try to make spices in such a way that it can

satisfy all consumers need like test, color, good for health etc. also they

wants to give spices to customer at reasonable price and it must be

available in the size that suits customer demand.


COMPARATIVE ANALYSIS

The comparison of the product and price of the Ramdev is done with other company and it is as follows:

Basic Spices

Product Weight Prices Ramdev Everest Chilli 500gm Rs. 60/- Rs. 70/- Turmeric 500gm Rs. 46/- Rs. 55/-

we can see that the prices of the Ramdev is comparatively less than Everest prices.


Instant Mix

Product Weight Prices Ramdev Gits Khaman 500gm Rs. 38/- Rs. 46/-Dalwada 500gm Rs. 45/- Rs. 42/-Dokhla 500gm Rs. 30/- Rs. 46/-Dhosa 500gm Rs. 40/- Rs. 42/-Handvo 500gm Rs. 40/- Rs. 54/-

Here we can see that there is very little variation in the price of Gits and Ramdev in Dalwada, Dhosa. There is much variation in the prices of the Handvo, Dhokla and Khaman.


METHODOLOGY

Financial management is that managerial activity which is concerned

with the planning and controlling of the firms financial resources. It is a

decision making process concerned with acquiring financing and

managing assets to achieve the overall goal of a business organization,

Financial management deals with procurement of funds and their

effective utilization in the business. It is also about managing

expenditure with in a limited budget.

It is about allocating money to the necessary items first. Financial

management means the management of the matter related to and

organizations finance. It balances expenditure and income.

RESEARCH METHODOLOGY

The study has been done in one of the leading private limited companies To maintain anonymity, the name of the company is not mentioned, and is further referred to as ‘the company’. This study is based on secondary data,which have been obtained from company financial report and and published sources and company website,Annual report for the period of two years The collected data has been analysed with the help of ratio analysis, and working capital and also through the application of statistical tools such as t test,correlation, Mean,and standard deviation


PART – II

INTRODUCTION TO REPORT

CHAPTER-2


2.1: INTRODUCTION OF FINANCIAL STATEMENT

A Financial statement is an organized collection of data according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. A firm communicates financial information to the user through financial statements and reports. Two basic financial statements prepared for the purpose of external reporting to owners, investors and creditors are:

(1) Balance sheet

(2) Profit and loss account.

For the internal management purpose that is planning and controlling, much more information is needed than contained in the published financial statement is needed. The basic objective of financial statement is decision making. Much can be learnt about a firm from careful examination of its financial statements as invaluable documents. Thus, it is an important aid to financial analysis.

2.2: INTRODUCTION OF THE RATIO ANALYSIS

Ratio analysis is a powerful tool of financial analysis, where ratios are used as a yardstick for evaluating the financial condition and performance of a firm. Analysis and interpretation of various accounting ratios give a skilled and experienced analysts a better understanding of the financial condition and performance of the firm that what he could have obtained only through a persuade of the financial statements. The term ratio refers to the numerical or quantitive relationship between two items or variables. It can be expressed as (1) percentages (2) fractions and (3) proportion of numbers.

These alternative methods of expressing items which are related to each other are, for purpose of financial analysis referred to as ratio analysis. It should be noted that computing the ratios does not add any information that already inherited in the figures of profits and sales. What the ratios do is a more meaningful way so as to enable us to draw conclusions from them. The systematic use of ratio to


interpret the financial statements for knowing the strength and weakness of a firm as well as its historical performance and current financial condition.

The ratio analysis as a quantitive tool enables analysists to draw quantitive information about net profits adequate, efficient uses of assets, firm’s currents obligations etc.

2.3: DEFINITION OF RATIO:

“The relationship between two accounting figures expressed mathematically, is known as ratio or financial ratio.”

“The alternative methods of expressing items which are related to each other are, for purpose of financial analysis, referred to as ratio analysis.”

2.4: STANDARD OF COMPARISION:

The ratio analysis involves comparison for a useful interpretation of the financial statements a single ratio in itself does not indicates favorable or unfavorable condition. Some standards of comparison are useful here, which may consist of:

Ratio calculated from the past financial statements of the same firm.

Ratio developed using the projected or pro forma, financial statement of the same year.

Ratios of some selected firms, especially the most progressive and successful. At the same point of time, and

Ratios of the industry to which the firm belongs.

The easiest way to evaluate the performance of a firm is to compare its current ratios with the past ratios. It gives an indication of the direction of change and reflects whether the firm’s financial performance has improved, deteriorated or remained constant over time. The change may be affected by changes in the firm’s performance.


Sometimes future ratios are used as the standards of comparison of past ratios with future ratios show the firms relative strengths and weaknesses in the past and the future. If the future ratio indicates the weak financial position, corrective actions should be initiated.

In the other way, we can compare ratios of one firm with some selected firms in the same industry at the same point in time. It is more useful to compare the firms’ ratios with ratio of a few carefully selected competitors, who have similar operations. It indicates the relative financial position of the firm.

For determining the financial condition and performance of a firm, this ratio may be compared with average ratios of the industry of which the firm is a member. It helps to ascertain the financial standing and capability of the firm in the industry to which it belongs. Industry ratios are important standards in view of the fact that each has its own characteristics which influence the financial and operating relationships.

2.5: NATURE OF RATIO ANALYSIS :

Ratio analysis is a powerful tool of financial analysis. A ratio is a indication quotient of two mathematical expressions, which is used as an index or yardstick for evaluating the financial position and performance of a firm. The absolute accounting figures do not provide a meaning understanding of the performance and financial position of the firm.

An accounting figure conveys meaning when it is related to some other relevant information. Ratios help to summarize the large quantities of financial data and to make qualitative judgment about the firm’s performance. The greater the ratio, the greater the firms liquidity and the vice-versa. The point to note is that a ratio indicates a quantitive relationship, which can be used to make a quantitive judgment. Such is the nature of all the financial ratios.


2.6: IMPORTANCE OF RATIO ANALYSIS:

The importance of ratio analysis lies in the fact that it represents facts on a comparative basic and enables the drawings of a inferences regarding the performance of a firm. In respect of the following aspects, ratio analysis is relevant.

LIQUIDITY POSITION.

LONG TERM SOLVANCY.

OPERATING EFFICIENCY.

OVER ALL PROFITABILITY.

INTER FIRM COMPARISON.

TREND ANALYSIS.

2.7: LIMITATIONS OF RATIO ANALYSIS :

There are several limitations of ratio analysis.

COMPARATIVE STUDY REQUIRED

LIMITATION OF THE FINANCIAL STATEMENT.

RATIOS ALOME ARE NOT ADQUATE.

WINDOW DRESSING.

PROBLEMS OF PRICE LEVEL CHANGES.

NO FIXED STATEMENTS

RATIOS ARE A COMPOSITE OF MANY FIGURES.


2.8: VARIOUS TYPES OF RATIOS:

There are mainly five kinds of Ratios:

LIQUIDITY RATIO. PROFITABILITY RATIO. ASSETS TURNOVER RATIO. FINANCE / LEVERAGE / CAPITAL RATIO. VALUATION RATIO.

1. LIQUIDITY RATIO:

CURRENT RATIO: LIQUIDITY RATIO/ QUICK RATIO QUICK RATIO NET WORKING CAPITAL CASH GENERATED PER RUPPES OF SALES: BANK FINANCE GAP RATIO: CAPITAL GEARING RATIO:

2. PROFITABILITY RATIO.

OPERATING PROFIT RATIO: GROSS PROFIT RATIO: NET PROFIT RATIO RATE OF RETURN ON INVESTMENT: RATE OF RETURN ON EQUITY: RETURN ON ASSETS:


3. ASSETS TURNOVER RATIO.

INVENTORY / STOCK TURNOVER RATIO: AVERAGE AGE OF INVENTORIES: TOTAL ASSETS TURNOVER: NET FIXED ASSETS TURNOVER NET WORKING CAPITAL TURNOVER: DEBTORS TURNOVER: CREDITORS TURNOVER RATIO:

4. FINANCE / LEVERAGE / CAPITAL RATIO.

PROPRIETORY RATIO: EQUITY RATIO: DEBT RATIO DEBT EQUITY RATIO: DEBT TO TOTAL ASSETS RATIO FIXED ASSETS TO NET WORTH RATIO: INTEREST COVERAGE RATIO: DEBT SERVICE COVERAGE RATIO:

5. VALUATION RATIO.

EARNING PER SHARE (EPS) PRICE EARNING RATIO:


.PART –III

FINANCIAL ANALYSIS

CHAPTER-3


RATIO ANALYSIS

3.1: LIQUIDITY RATIO.

It is extremely essential for a firm to be able to meet its obligation as they become due. Liquidity ratio measures the ability of the firm to meet its current obligations. Liquidity ratios by establishing a relationship between cash and other current assets to current obligations provide a quick measure of liquidity. The failure of a company to meet its obligations due to lack of sufficient liquidity, will result in bad credit image or even in law suits resulting in the closure of the company. Proper balance between liquidity and profitability is required for efficient management.

The liquidity ratio measures the ability of the firm to meet its short term obligation and reflect the short term financial strength/ solvency of a firm. The main ratio which indicates the liquidity of a firm is:

Current Ratio Liquidity Ratio / Quick Ratio Acid Test Ratio Net working capital Cash generated per rupee of sales Bank finance gap ratio Capital Gearing Ratio


CURRENT RATIO:

Current ratio is the most widely used ratio which shows the proportion of current assets to current liability. It is a measure that working capital is available on time or not.

Current ratio: - current assets / Current liability

SIGNIFICANCE:

The current ratio is not only a measure of solvency but it is an index of the working capital available to the margin of safety. It means, it is a crude and quick measure of the firm’s liquidity.

(Rs. In lakhs)

TABLE 3.1

YEAR 2010-2011 2009-2010 2008-2009

CURRENT ASSETS 127624.31 129491.10 68903.99

CURRENT LIABILITY 147998.06 163948.59 126655.3RATIO (C.A/C.L) 0.862 0.789 0.544


INTERPRETATION:

Composition of current ratio is very important at the time of interpretation. Current ratio indicates the sound short term finance from the creditor’s point of view. But on the other hand the higher ratio indicates blocking of funds in current assets. As a conventional rule, current ratio of 2:1 or more is considered satisfactory. To through more light on the quality of current assets the percentage of the current assets is to be calculated.

However current ratio is continuously decreasing over the period because increasing in current liabilities and also huge decreasing in cash and bank balance.

In the year 2010-11 the ratio in high which is good but thereafter ratio is decreasing.

2. LIQUIDITY RATIO/ QUICK RATIO

A variant of current ratio is the liquid ratio or quick ratio which is designed to show the amount of cash available to meet immediate payments. It is obtained by dividing the liquid assets to liquid liabilities.


Liquid assets are obtained by deducting stock -in trade from current assets. Liquid liabilities are obtained by deducting bank overdraft from current liability.

It is also called liquid ratio.

Liquid ratio: - Liquid Assets / Liquid liability

(Rs.In lakhs) TABLE 3.2

YEAR 2010-2011 2009-2010 2008-2009LIQUID ASSETS 89104.88 96659.73 38232.86

LIQUID LIABILITIES 147998.06 163948.59 126655.30

RATIO (L.A/L.L) 0.602 0.589 0.301

INTERPRETATION:


The ideal liquid ratio is 1:1. The firm has more liquid position and it is good for the company because the firm should have some cash on hand to meet daily expense.

The liquidity ratio in the year 2010-2011in little more but in the year 2009-2010 the ratio is more decrease because there is huge decrease in cash and bank balance.

4. NET WORKING CAPITAL

This ratio represent that part of long term funds represented by net worth and long term debt which are permanently blocked in the current assets. Certain minimum level of safety stock, permanent customers, unpaid bills compensatory minimum bank balance and minimum cash balance are the example of the permanent working capital

NET WORKING CAPITAL:

TOTAL CURRENT ASSETS – TOTAL CURRENT LIABILITIES

(RS. In lakhs)

TABLE 3.3

YEAR 2010-2011 2009-2010 2008-2009CURRENT ASSETS 127624.31 129491.10 68903.99CURRENT LIABILITIES 147998.06 163948.59 126655.30

NET WORKING CAPITAL (20373.75) (34457.49) (57751.31)


5. CASH GENERATED PER RUPPES OF SALES:

This ratio shows that percentage of sales which is available in cash form.

C.G.P.R.O.S.: =

P.A.T + DEPRECIATION+NON CASH EXPENSES / SALES * 100

(Rs. In lakhs)TABLE 3.4

YEAR 2010-2011 2009-2010 2008-2009P.A.T 21466.06 5887.44 1243.83DEPRICIATION 4126.70 5472.11 3521.30SALES 1014818.74 1327469.71 1514742.01RATIO (%) 2.52 0.86 0.32


INTERPRETATION:

In the year 2010-2011 the ratio that is percentage was high that is 2.52% compare to 2009-2010 and 2008-2009 which shows that that much percentage of sales which is available in the cash form. While in the year 2009-2010 and 2008-2009 the ratio are decreased 0.86 and 0.32 respectively.

3.2: PROFITABILITY RATIO:Profitability is an indication of the efficiency with which the operations of

the business are carried on. Poor operational performance may indicate poor sales and poor profit. A Lower profitability may arise due to lack of control over the expenses. Bankers, financial institutions and other creditors look at the profitability ratios as an indicator whether or not the firm earns substantially more than it pays interest for the use of borrowed funds whether the ultimate repayment of their debts appear reasonably certain. Owners are interested to know the profitability as it indicates the return which they can get on their investments.


(1)GROSS PROFIT RATIO:

The ideal ratio is 25% for the trading concern while 15% for the manufacturing concern. This ratio shows the margin left after meeting manufacturing costs. It measures the efficiency of production as well as pricing.

Gross profit ratio= Gross profit / Sales *100

(Rs. In lakhs)

TABLE 3.5

YEAR 2010-2011 2009-2010 2008-2009GROSS PROFIT 33266.71 8303.02 3651.4SALES 1014818.74 1327469.71 1514742.01RATIO (%) 3.27 0.63 0.24

INTERPRETATION:

Gross profit margin ratio is good in the year 2010-2011 that is 3.27% compare to other year.


In the year 2009-2010 the ratio goes down by 0.63% which is not good sign of company the ratio goes down because of huge increase in the cost of purchase, and same in the year 2008-2009 the ratio goes down by 0.24%.

(2)NET PROFIT RATIO:

The ratio helps in determining the efficiency with which affairs of the business are being managed. It also indicates the firm’s capacity to withstand adverse economic condition.

NET PROFIT RATIO: EARNING AFTER TAX / SALES*100

(Rs. In lakhs)

TABLE 3.6

YEAR 2010-2011 2009-2010 2008-2009EARNING AFTER TAX 21466.06 5887.44 4243.83

NET SALES 1014818.74 1327469.71 1514742.01RATIO (%) 1.62 0.44 0.28


INTERPRETATION:

The ratio is an effective measure to check the profitability of business. However, constant increase in the net profit ratio year after year is a definite indication of improving condition of the business. If the net margin is inadequate, the firm will fail to achieve satisfactory return on owners’ equity.

But not in this case the ratio is decreasing year by year the ratio of 2010-2011 was 1.62% which goes down by 0.44% and 0.28% in the year 2009-2010 and 2008-2009 respectively because the company is making the profit only by help of government subsidy.

(3)OPERATING PROFIT RATIO:

Operating profit ratio can be found out after excluding all non-operating expenses like interest and taxes that means earning before interest and tax.

OPERATING PROFIT RATIO = OPERATING PROFIT / SALES *100

(Rs. In lakhs)

TABLE 3.7

YEAR 2010-2011 2009-2010 2008-2009OPERATING PROFIT 34450.42 41867.26 53381.99

SALES 1014818.74 1327469.71 1514742.01RATIO (%) 3.39 3.15 3.52


INTERPRETATION:

The ratio is decrease year by year because the cogs is increasing year by year the main reason behind increasing cogs is cost of purchase of raw material is increase in every year.

The ratio in the year 2010-2011is 3.39% and thereafter the ratio is in negative manner 3.15 and 3.52 in the year 2009-2010 and

2008-2009respectively.

(4)RATE OF RETURN ON INVESTMENT:

It is also known as return on capital employed or return on assets. It measures how efficiently the capital is employed.

R.O.R.O.I = EBIT / TOTAL ASSETS *100

This ratio is spitted into following two parts by inserting “sales” in the above formula.


The below split is popularly known as DU PONT split.

ROI = EBIT *100 X SALES

SALES TOTAL ASSETS

PROFIT MARGIN (%) TOTAL ASSETS TURNOVER

(Rs. In lakhs)

TABLE 3.8

YEAR 2010-2011 2009-2010 2008-2009EBIT 33266.71 28303.02 27651.4

SALES 1014818.74 1327469.71 1514742.01

TOTAL ASSETS 69898.67 74923.24 101889.40PROFIT MARGIN (%) 3.27 0.63 0.24

TOTAL ASSETS TURNOVER 14.52 17.71 14.86

R.O.R.O.I 47.5 37.78 27.14


INTERPRETATION:

The rate of return on investment in the year 2010-2011was the highest compare to other year because profit margin 3.27% and the assets turnover was 14.52 times so the rate of return on investment was about 47.5% this is good sign of company but thereafter the ratio goes down.

In the year 2009-2010 it decreased to 17.71% due decrease in the profit margin that is 0.63 %.

In the year 2008-2009the ratio goes down because EBIT is decreasing every year and so the ratio is only 3.58%.

(5) RATE OF RETURN ON EQUITY:

It measures the profitability of equity funds invested in the firm.

Here the profits for the equity will be considered after deducting preference dividend.

If no preference share capital exists in the balance sheets then net profit will be taken in the numerator. The formula of rate of return is as follows:

RATE OF RETURN =

NET PROFIT FOR THE EQUITY / NET WORTH * 100

Table no 3.9 (Rs. In lakhs)

YEAR 2010-2011 2009-2010 2008-2009

NET PROFIT FOR EQUITY 6.80 7.80 3.55

NET WORTH 40.22 49.63 45.76

RATIO (%) 16.89 15.72 7.75


INTERPRETATON:

Return on equity of the company has been decreasing year by year that is from 2010-2011 16.89% to 15.72% in the year 2009-2010.

That mean the equity funds invested in the company/ firm is not good because the profit for the equity decreasing every by 4 times every year.

3.3 : TURN OVER / ACTIVITY RATIO: Turnover or activity Ratios are employed to evaluate the efficiency with

which the firm manages and utilizes its assets. Funds of creditors and owners are invested in various assets to generate sales and profit. So, these ratios are helpful in knowing the speed with which assets are being compared or turned into sales. It shows relationship between sales and assets.

(1) A. INVENTORY / STOCK TURNOVER RATIO:

Inventory turnover is a valuable measure of selling efficiency and inventory quality. It expresses the frequency with which average level of inventory investment is turned over through operations. It signifies the liquidity of the inventory.


This ratio indicates how many times in a year the stock is turnover. Higher the ratio better it is.

STOCK TURNOVER RATIO =

COST OF GOOD SOLD / AVERAGE STOCK

WHERE AVERAGE STOCK =

OPENING STOCK + CLOSING STOCK / 2

(Rs. In lakhs)

YEAR 2010-2011 2009-2010 2008-2009

COGS 782.22 980.54 1461.93AVERAGE STOCK 75 105.06 182.33

RATIO (In times) 10.4289 9.3327 8.0179


INTERPRETATION:

Inventory turnover ratio indicates the relationship between the cost of good sold and the inventory level. Higher the inventory ratio, larger the amount of sales, the smaller the amount of the capital tied up in inventory and the more current the merchandise stock.

The ratio in the year 2010-2011is 29.65% which is increase in the year 2009-2010to 39.54% and in the year 2008-2009 the ratio is 50.16% which is good sign of company.


(1) B. AVERAGE AGE OF INVENTORIES:

This ratio indicates the waiting period of the investments in the inventories and is measured in days, week or months. Inventory turnover and average age of the inventories are inversely related. High inventory turnover ratio is goods but longer age of the inventory is bad as it indicates idle blocking of money in the inventories.

(Rs. In lakhs)

TABLE 3.11

YEAR 2010-2011 2009-2010 2008-2009DAYS 360 360 360INVENTORY TURNOVER 29.65 39.54 50.16

AVERAGE AGE OF INVENTORIES (IN DAYS)

12.14 9.10 7.17

INTERPRETATION: In the year 2008-2009 it was the lowest that is 7 days and it was

increasing year by year to 9 days 12 days respectively which shows or


indicates that idle blocking of money in the inventories year by year which is not good for the company or firm.

(2) TOTAL ASSETS TURNOVER:

The amount invested in business is invested in all assets for earning profit.

CAUTION:

If the assets are old and more depreciation has been deducted than the turnover will seen more which in fact does not show efficiency.

TOTAL ASSETS TURNOVER= SALES / TOTAL ASSETS

(Rs. In lakhs) TABLE 3.12

YEAR 2010-2011 2009-2010 2008-2009SALES 1014818.74 1327469.71 1514742.01TOTAL ASSETS 69898.67 74923.24 101889.40TOTAL ASSETS TURNOVER

14.52 17.71 14.86


INTERPRETATION:

Following points should be kept in mind while interpreting

Type of assets whether new or old & by which method depreciation is provided.

The investment in fixed assets changes in the type of business for example steel business investment in the fixed assets is very high.

Sales depend upon overall efficiency in the part of management & not only on the use of fixed assets.

It is not always the case that more the sales more the profit, for this purpose difference between selling price and cost of sales should be taken into account.

The method of valuation of assets and in particular method of valuation of stock must be examined.

(3)NET FIXED ASSETS TURNOVER

This ratio measures sales per rupees of investment in fixed assets. This ratio supposed to measure the efficacy with which fixed assets are employed. A high ratio indicates a high degree of efficacy in assets utilization and vice-versa.

FIXED ASSETS TURNOVER = NET SALES / NET FIXED ASSET


YEAR 2010-2011 2009-2010 2008-2009NET SALES 1014818.74 1327469.71 1514742.01NET FIXED ASSETS 81167.39 98765.87 110703.29

RATIO (IN TIMES) 12.5 13.44 13.68


INTERPRETATION:

A fixed assets turnover ratio has increased reflects the efficient use of fixed asset.

But in the graph it shows in the year 2010-2011it was 12.5 times and it increased to 13.44 and 13.68 times in the year 2009-2010 and 2008-2009 respectively

It is due to increase in the net sales so assets turn over ratio is increased year by year.


(4) NET WORKING CAPITAL TURNOVER:

This ratio measures sales per rupees of investment in the working capital. This ratio supposed to measure the efficacy with which working capital is employed. A high ratio indicates a high degree of efficacy in working capital utilization and vice-versa.

NET WORKING CAPITAL TURNOVER = SALES

NET WORKING ASSETS


YEAR 2010-2011 2009-2010 2008-2009NET SALES 1014818.74 1327469.71 1514742.01NET WORKING ASSETS (20373.75) (34457.49) (57751.31)

N.W.C.T (49.81) (38.52) (26.23)


INTERPRETATION:

The ratio is in negative manner because the net working capital is in negative manner because the current liabilities are more than assets .

(5) DEBTORS TURNOVER:

The analysis of the debtor’s turnover ratio supplements the information regarding the liquidation of one item of current assets of the firm. It measures how rapidly debts are collected. It is a measure of assessing the ability of the company to promote sales with minimum investments in uncollected debtors. It indicates timely quick collection or pre-matured collections through cash discounting incentives, bill discounting or factoring the book-debts.

DEBTORS TURNOVER = CREDIT SALES / AVERAGE DEBTOR



YEAR 2010-2011 2009-2010 2008-2009NET SALES 1014818.74 1327469.71 1514742.01AVERAGE DEBTORS 9569.75 7452.96 18660.65DEBTOR TURNOVER (IN TIMES ) 3.4 2.2 4.44DAYS 360 360 360DEBT COLLECTION PERIOD 106 178 81

INTERPRETATION:


(a) DEBTORS TURNOVER RATIO:

Debtors turn over ratio fluctuation in the year 2010-2011the ratio is 3.4 times and 2.2 and 4.40 in the year 2009-2010, 2008-2009 respectively.

It is because in the year 2009-2010 the debtors decreased and in the year 2008-2009 he debtors increased to 18660.65 it mean that the credit sales has increased in this year.

3.4: CAPITAL/ LEVERAGE / FINANCE STRUCTURE RATIOS

To judge the long term financial position of the firm, financial leverage or capital structure ratio is calculated. It indicates mix of the funds provided by the owners and the lenders. Long-term creditors, like debentures holders, financial institutions strength. In fact, the firm should have a strong short term as well as long term financial position.

Leverage can work in opposite direction also. If the cost of debt is higher than the firm’s overall rate of return, the earnings of shareholders will be reduced. If the firm is actually liquidated for non-payment of debt-holders’ dues, the worse suffers will be share holders.

(1) PROPRIETORY RATIO:

The ratio indicates the proportion of total assets financed by owners. It is a variant of debt equity ratio. It established relationship between the proprietor’s funds and the total assets. This ratio focuses the attention on the general financial strength of the business enterprise. Higher the ratio stronger the position of enterprises. It indicates that proprietor have provided more fund to purchase the assets. If it is 100% that is business does not used any outside fund that is not using its reputation & bringing cash from outside, bringing more assets & multiplying business. This opportunity is lost by the conservative approach.

PROPRITEOR RATIO: PROPRIETORS FUND / TOTAL ASSETS *100


(Rs. In lakhs)

TABLE 3.16

YEAR 2010-2011 2009-2010 2008-2009PROPRIETORS FUND 62009.28 65956.46 66692.36TOTAL ASSETS 62009.34 65956.46 99630.41RATIO (%) 0.99 1 0.67

INTERPRETATION

It is a variant of debt equity ratio. The ratio is of particular importance to the creditors who can find out the proportion of share holders funds in the total assets employed in the business.

A high ratio will indicate a relatively little danger to the creditors, etc in the event of forced reorganization or winding up of the company. A low ratio indicates greater risk to the creditors since in the events of losses a part of their money may be lost besides loss to the proprietors of the business.


In the year 2010-2011 the ratio is 0.99 and in the year 2009-2010the ratio is 1 and 2008-2009 in the year it goes down to 0.67 which is not good sign of company.

(3) DEBT RATIO:

This ratio can be found out by dividing long term debt to total capital employed .This ratios are calculated to measure the financial risk.

DEBT RATIO = LONG TERM DEBT / TOTAL CAPITAL EMPLOYED

(Rs. In lakhs)

TABLE 3.17

YEAR 2010-2011 2009-2010 2008-2009LONG TERM DEBTS 0.06 ---------- 32938.05

TOTAL CAPITAL EMPLOYED 62009.34 ------ 99630.41

RATIO 0.01 ------ 0.33

(4) DEBT EQUITY RATIO:

Leverage ratios are calculated to measure the financial risk and the firm’s ability of using the debt for the benefit of the share holders. It determining the extent to which operating profits are sufficient to cover the fixed charges.

DEBT EQUITY RATIO: LONG TERM DEBTS / NET WORTH

(Rs. In lakhs)

TABLE 3.18

YEAR 2010-2011 2009-2010 2008-2009


LONG TERM DEBTS 0.06 32938.05

NET WORTH 62009.28 66692.36RATIO 0.01 0.4

INTERPRETATION:

The DEBT EQUITY RATIO has important from the creditors and owners point of view and also for the firm itself. The ratio can be taken as ideal if it is 1:1 there cannot be a rigid rule, it will depend upon the circumstances. High ratio shows a larger share of financing by the creditors in relation to the customers and low ratio implies a smaller claim of creditors.

In the year 2010-2011the ratio is 0.01 which is not good the creditors must take care before investing the money. In the year 2008-2009the ratio is some what increased to 0.4%.

(6) FIXED ASSETS TO NET WORTH RATIO:

It shows the relationship between the capital held by equity capital, reserves and the net fixed assets. It means how much equity we needed against the fixed assets.

FIXED ASSETS TO NET WORTH RATIO =

NET FIXED ASSET / NET WORTH

(Rs. In lakhs)

TABLE 3.19

YEAR 2010-2011 2009-2010 2008-2009NET FIXED ASSETS 69898.67 74923.24 101889.40NET WORTH 62009.28 65956.46 66692.36RATIO 1.12 1.14 1.53


INTERPRETATION

The ratio should not be more than 1. If it less than 1, it shows that a part of the working capital, which is more or less of a fixed nature. The ideal ratio is 0.67. In other words, the more the shareholders’ contribution is tied up in fixed assets the less is the amount available for the investment in current assets, it means that creditors have contributed towards large proportion of the net fixed assets.

The higher the ratio the less the proportion for creditors, where net fixed assets exceeds net worth. It may be a signal for many industrial concerns which should plan for an additional equity capital.

In all the year it is more than the ideal ratio that is 0.67, it means that funds were blocked in the fixed assets that means the liquidity position of a firm worse but in the year 2009-2010which is showing the ratio of 1.14 is more compare to previous year.


3.5: VALUATION RATIOS:

Valuation ratios are the results of the management of above four categories of the functional ratios. Valuation ratios are generally presented on a per share basis and thus are more useful to the equity investors.

(1) EARNING PER SHARE (EPS)

This is the measurement of calculating the profitability of the common share holders. As a profitability index, it is a valuable and widely used ratio. Adjustments for bonus or rights issues should be made while comparing earning per share over a period of time.

EARNING PER SHARE: PROFIT AFTER TAX

NUMBER OF EQUITY SHARE

(Rs. In lakhs)

TABLE 3.20YEAR 2010-2011 2009-2010 2008-2009

P.A.T 21466.06 5887.44 1243.83

NO. OF EQ. SHARE 9950 9950 9950RATIO 2.16 0.59 0.13


INTERPRETATION:

This ratio shows the profitability of the firm on a per share basis. It helps in deciding that the equity share capital is being used effectively or not.

The earning per share during the year 2002-2003 was the lowest that is 3.28 but in the in the 2010-2011 & 2009-2010 it increased to 5.19 & 5.58 because of more profits. It was good for the shareholder’s point of view.


3.6: COMPARISIONS OF THE RATIO OF RAMDEV FOOD PRODUCT PVT.LTD.FOR THE THREE YEAR

TABLE 3.22SR. NO

PARTICULARS (RATIO) 2010-2011 2009-2010 2008-2009

1. CURRENT RATIO 0.862 0.789 0.544

2. LIQUIDITY RATIO /QUICK RATIO 0.602 0.589 0.301

3. NET WORKING CAPITAL (20373.75) (34457.49) (57751.31)

4. CASH GENERATED PER RUPPES OF SALES

3.68 1.04 0.47

5. OPERATING PROFIT RATIO 3.39 (0.14) (0.352)

6. GROSS PROFIT RATIO 6.43 2.21 (1.57)

7. NET PROFIT RATIO 1.62 0.44 0.082

8. RATE OF RETURN ON INVESTMENT

47.5 11.1 3.58

9. RETURN ON ASSETS 14.52 17.71 14.86

10. NET FIXED ASSETS TURN OVER 12.5 13.44 13.68

11. INVENTORY TURNOVER RATIO 29.65 39.54 50.16

12. AVERAGE AGE OF INVENTORIES 12.14 9.10 7.17

13. NET WORKING CAPITAL TURNOVER

(49.81) (38.52) (26.23)

14. DEBTORS TURNOVER 3.40 2.20 4.44

15. DEBT COLLECTION PERIOD 106 178 81

16. EQUITY RATIO 0.99 1 0.67

17. DEBT RATIO 0.01 0.33

18. DEBT EQUITY RATIO 0.01 0.4

19. EARNING PER SHARE (EPS) 2.16 0.59 0.13


DU PONT CHARTCHAPTER 4

Financial statements are the comprehensive statements which integrate various components of accounting and financial information into a single trunk of a tree that is the RATE OF RETURN ON THE INVESTMENTS. It gives additional information without distorting the mathematical relationships of the relevant data. Profit Margin and the return on the assets that is the assets turnover ratio are the two driver it. The Do Pont system of financial analysis clearly brings out the effect of these two drivers on the rate of return on the investments.

It is defined as the product of the Net Profit Margin and the Total Assets Turnover Ratio.

Rate of Return on Investment = (Net Profit Margin) X (TATO)

N. P /Total Assets N.P / Net Sales Net Sales / T.A

Such decomposition helps in understanding how the Rate of Return on the Investments is influenced by the Net Profit Margin and Total Assets Turnover Ratio.

IMPORTANCE OF DUPONT ANALYSIS:

Any decision affecting the product prices, per unit’s costs, volume or efficiency has an impact on the Profit Margin or Turnover Ratios. Similarly any decision affecting the amount and the ratio of debt or equity used will affect the financial structure and the overall cost of the capital of a company. Therefore, these financial concepts are very important to evaluate as every business is competing for limited capital resources. Understanding the interrelationships among the various ratio such as turnover ratios, Leverage and Profitability ratios helps companies to put their money areas where the risk adjusted return is the maximum


Return On Investment (In %)47.5%

EBIT (In Rs.)

33266.71

Net Sales (In Rs.)

1014818.74

Sales + / (-) Non Operating Income

(Expenses) 1014818.79

Operating Expense

+Interest+Tax 981552.08

PM (Profit Margin in %) 3.27

TATO (Total Asset Turnover in Times 14.52

Net Fixed Asset

(In Rs.) 88647.84

Net Sales (In Rs.)

1014818.74

Total Assets (In Rs.)

69898.67

NetWorking Capital (In Rs.)(20373.75)

Invest-ments

(In Rs.)1624.58

4.1:

DU PONT CHART APPLIED TO

RAMDEV FOOD PRODUCT PVT. LTD.

For the Year Ended 2010-2011


Return On Investment (In %)11.1

EBIT (In Rs.)

8303.02

Net Sales (In Rs.)

1327469.71


(Expenses) 1327469.71

Operating Expense


PM (Profit Margin in %) 0.63 %


Net Fixed Asset

(In Rs.) 107689.28

Net Sales (In Rs.)

1327469.71


74923.24

Net Working Capital (In Rs.)

(34457.49)

Invest-ments

(In Rs.)1691.45



Return On Investment (In %)

EBIT (In Rs.)

3651.40

Net Sales (In Rs.)

1514743.01


(Expenses) 1514742.01

Operating Expense


PM (Profit Margin in %) 0.24


Net Fixed Asset

(In Rs.) 111030.01

Net Sales (In Rs )

1514742.01


101889.4

Net Working Capital (In Rs.)

(57751.31)

Invest-ments

(In Rs.)48610.71



HORIZONTAL ANALISIS

CHAPTER 5

Horizontal analysis is also one f the techniques of the financial statement analysis. Financial statement present comparative information for the current year and the previous year. A simple approach to financial statement analysis, known as horizontal analysis, is to calculate amount changes and percentage changes from the previous years to the current year.

While an amount change in itself may mean something, converting amount changes to percentages is more useful in appreciating the order of magnitude of the change. Horizontal analysis of the financial statements of RAMDEV FOOD PRODUCT PVT. LTD.is presented below:


5.1:

HORIZOTAL ANALYSIS

RAMDEV FOOD PRODUCT PVT. LTD.Comparative Profit And Loss

For the Year Ended March 31, 2010-2011PARTICULARS 2009-2010 2010-2011 INCREASE/(DECREASE)

AMOUNT PERCENT (%)

INCOMESALES 1327469.71 1014818.74 312650.97 30.80other Income 15303.23 8482.42 6820.81 80.41

TOTAL 1342772.94 1023301.16 319471.78 31.22EXPENDITUREPURCHASE OF PDT 1259464.49 916897.90 342566.59 37.36MANUFACTURING &ADMINISTRATIVE

70273.47 67782.22 2491.25 3.67

DUTIES APPLICABLE ON PDT

(397.67) 726.71 -1124.38 154.72

DEPRICIATION & AMORTISATION

5472.11 4126.7 1345.41 32.6

INTREST PAYMENT 9.56 6.80 2.76 40.59

TOTAL 1334821.96 989540.33 345281.63 34.89PROFIT FOR THE YEAR 7950.98 33760.83 (25809.85) 76.45Net income /expenses 342.48 (500.92) 843.40 168.37

PROFIT BEFORE TAX 8293.46 33259.91 (24966.45) 75.06 Provision For TaxationCurrent Tax 952.92 11057.74 (10104.82) 91.38Deferred tax 1453.10 736.11 716.99 97.4TOTAL 2406.02 11793.85 (9387.85) 79.60

PROFIT AFTER TAXATION

5887.44 21466.06 (15578.62) 72.57


GROWTH IN THE YEAR 2010-2011

TABLE 5.1

PARTICULARS GROWTH IN PERCENTAGE ( % )

Income 31.22Expenditure 34.89Provision For Taxation 79.6Profit(loss) After tax (72.57)

GROWTH IN PERCENTAGE ( % )

-100

-50

0

50

100

Income ProvisionFor

Taxation

PARTICULARS

GR

OW

TH

IN

%

GROWTH INPERCENTAGE ( % )

INTERPETEATION:

In the year 2009-2010sales increased 30.8% over 2010-2011. Expenditure of the Ramdev Food Product Pvt. Ltd. has increased by

34.89% which is more than the income increased that is 31.22% PROFIT AFTER TAX has decreased by. 72.57% .The overall growth in

this year is not satisfactory.


5.2:

HORIZOTAL ANALYSIS

RAMDEV FOOD PRODUCT PVT. LTD.Comparative Profit And Loss

For the Year Ended March 31, 2009-2010PARTICULARS 2008-2009 2009-2010 INCREASE/(DECREASE)

AMOUNT PERCENT (%)

INCOMESALES 1514742.01 1327469.71 187272.3 114.11other Income 60099.63 15303.23 44796.4 3.17

TOTAL 1574841.64 1342772.94 232068.7 17.28EXPENDITUREPURCHASE OF PDT 1504478.82 1259464.49 245014.33 19.45MANUFACTURING &ADMINISTRATIVE

63309.12 70273.47 (6964.35) 9.91

DUTIES APPLICABLE ON PDT DEPRICIATION & AMORTISATION

3421.37 5472.11 (2050.74) 37.48

INTREST PAYMENT 411.13 9.56 401.57 4200.52

TOTAL 1571584.30 1334821.96 236762.34 17.74PROFIT FOR THE YEAR 3257.34 7950.98 (4693.64) 59.03Net income /expenses (17.07) 342.48 (359.55) 104.98

PROFIT BEFORE TAX 3240.27 8293.46 (5053.19) 60.93

Provision For Taxation

Current Tax (516.22) 952.92 (1469.14) 154.17Deferred tax 2512.66 1453.10 1059.56 72.92TOTAL 1996.44 2406.02 (409.58) 17.02PROFIT AFTER TAXATION

1243.83 5887.44 (4643.61) (78.87)


GROWTH IN THE YEAR 2008-2009

TABLE 5.1

PARTICULARS GROWTH IN PERCENTAGE ( % )

Income 17.28Expenditure 17.74Provision For Taxation 17.02Profit(loss) After tax (78.87)

GROWTH IN PERCENTAGE ( % )

-100

-80

-60

-40

-20

0

20

40

Income ProvisionFor

Taxation

GROWTH INPERCENTAGE ( % )

INTERPRETATION:

In 2008-2009the sales is increased by 17.28% but compare to 2009-2010 the sales has decreased.

The expenditure has increased by 17.74% PROFIT AFTER TAX is also decreased by 78.87%. Over all growth in this

year is also not satisfactory. In this year the interest payment also increased up to 4200% so that the PAT

decreased by 78.87%.

5.3


HORIZONTAL ANALYSIS

RAMDEV FOOD PRODUCT PVT. LTD. : Balance SheetFor the Year Ended March 31st March 2009

PARTICULARS AS ON

31-03-2009AS ON31-03-2008

INCREASE(DECREASE)

AMOUNT PERCENT(%)

SOURCE OF FUND1.SHAREHOLDERS FUNDS (a) Share capital 2214.74 2214.74(b) Reserves Surplus 63741.78 60358.77 3383.01 5.60 65956.52 62600.51 3356.01 5.362. LOANS FUNDS Unsecured Loans - 0.06 3 DEFERRED TAX LIABILITY (NET) 9809.27 8356.17 1453.1 17.39TOTAL 75765.79 70956.74 4809.05 6.78 APPLICATION OF FUNDS

1. FIXED ASSETS

a. Gross Block 129512.56 106726.24 22786.32 21.35

b .Less; Depreciation 30746.69 25558.85 5187.84 20.3

NET BLOCK 98765.87 81167.39 17598.48 21.68

c. Dismantled capital 91.44 98.41 (6.97) 7.08

c. Capital work in progress 8923.41 7480.45 1442.96 19.29

107780.72 88746.25 19034.47 21.45

2 .FINANCE LEASE RECEIVABLE

751.11 959.66 (208.55) 21073

3. INVESTMENT 1691.45 1624.58 1066.87 65.67

4. CURRENT ASSETS, LOANS & ADVANCES a. Inventories 32831.37 38519.43 (5688.06) 14.77


b. Sundry Debtors 7452.96 9569.75 (2116.79) 22.12

c. Cash and Bank balances 72776.77 66445.86 6330.91 9.53

d .Other current assets 191.85 135.45 56.4 41.64

e. Loans and Advances 16238.15 12953.82 3284.33 25.35

129491.10 127624.31 1866.79 1.46

5. Less : current liabilities & provisiona). current liabilities 157289.31 135148.57 22140.74 16.38

b) provision 6659.28 12849.49 (6190.21) 48.17

163948.59 147998.06 15950.53 10.78

6.Net current asset (34457.49) (20373.75) 14083.74 69.13

TOTAL 75765.79 70956.74 4809.05 6.78

5.4HORIZONTAL ANALYSIS


RAMDEV FOOD PRODUCT PVT. LTD. : Balance SheetFor the Year Ended March 31st March 2010

PARTICULARS AS ON 31-03-2010

AS ON31-03-2009

INCREASE(DECREASE)

AMOUNT PERCENT(%)

SOURCE OF FUND1.SHAREHOLDERS FUNDS (a) Share capital 2214.74 2214.74(b) Reserves Surplus 64477.68 63741.78 735.9 1.15 66692.42 65956.52 735.9 1.112. LOANS FUNDS - Unsecured Loans 32938.05 - 3 DEFERRED TAX LIABILITY (NET)

1266.60 9809.27 (8542.67) 87.09

TOTAL 111797.07 75765.79 36031.28 47.56 APPLICATION OF FUNDS 1. FIXED ASSETS

a. Gross Block 144709.25 129512.56 15196.69 11.73

b .Less; Depreciation 33945.96 30746.69 3199.27 10.41

NET BLOCK 110763.29 98765.87 11997.42 12.15

c. Dismantled capital 140.93 91.44 49.49 54.12

c. Capital work in progress 9266.72 8923.41

2 .FINANCE LEASE RECEIVABLE 530.06

.751.11 (221.05) 29.43

3. INVESTMENT 48610.70 1691.45 46919.25 2773.9

4. CURRENT ASSETS, LOANS & ADVANCES a. Inventories 30671.13 32831.37 (2160.24) 6.58

b. Sundry Debtors 18660.65 7452.96 11207.69 150.38

c. Cash and Bank balances 7689.41 72776.77 (65087.36) 89.43

d .Other current assets 168.12 191.85 (23.73) 12.37


e. Loans and Advances 11714.68 16238.15 (4523.47) 27.86

68903.99 129491.10 (60587.11) 46.79

5. Less : current liabilities & provisiona). current liabilities 120893.48 157289.31 (36395.83) 23.14

b) provision 5761.82 6659.28

126655.3 163948.59 (37293.29) 22.74

6.Net current asset (57751.31) (34457.49) 23293.82 67.6

TOTAL 111797.07 75765.79 36031.28 47.56

VERTICAL ANASYSIS


CHAPTER 6

Vertical analysis is the proportional expression of each item on a financial statement to the statement total. The results of vertical analysis are presented in the form of common size statements in which all the elements within each statement are expressed in percentages of some common number and always add up to 100 %. The items in the profit and the loss account are usually expressed as percentage of sales, while in the balance sheet items are as percentage of total shareholders funds and liabilities or the total assets.

Vertical analysis helps us in making comparisons of the companies that differ in size since the financial statements expressed in comparable common- size format. Further, a comparison of common-size statements for several years may reveal important changes in the components from one year to the next.

VERTICAL ANALYSIS: PROFIT AND LOSS Account


RAMDEV FOOD PRODUCT PVT. LTD. Common-Size Profit and Loss Account

For the Year Ended March 31PARTICULARS 2010-2011 2009-2010 2008-2009NET SALES 1014818.74 1327469.71 1514742.01LESS: COST OF GOODS SOLD

949542.38 1298202.25 1538589.87

GROSS PROFIT 65276.36 29267.46 23847.86LESS: SELLING & ADMIN. EXPENSES

26699.24 25663.08 26012.73

OPERATING INCOME 38577.12 3604.38 49860.59ADD: OTHER INCOME 6093.24 6427 15207.08EBIT 44670.36 10031.38 34653.51LESS: INTREST 608 9056 411.13PBT 44663.56 10021.82 35064.64LESS: TAX 11793.05 2406.02 1996.44PAT 32869.71 7615.8 137061.08

PARTICULARS 2010-2011 2009-2010 2008-2009NET SALES 100 100 100LESS: COST OF GOODS SOLD

93.58 97.79 101.57

GROSS PROFIT 6.43 2.21 (1.57)LESS: SILLING & ADMIN. EXPENSES

2.63 1.93 (1.78)

OPERATING INCOME 3.8 0.28 3.35ADD: OTHER INCOME 0.6 0.46 -1.00EBIT 4.4 0.76 (2.35)LESS: INTREST 0.00067 0.00072 (0.027)PBT 4.399 0.759 (2.377)LESS: TAX 1.162 0.181 (0.132)PAT 3.237 0.578 2.509

INTERPRETATION:

In the COGS there is continuous increased we can see that 93.58, 97.79, 101.57 in the year 2010-20112009-2010and 2008-2009 respectively.

The sales has decreased in the year 2008-2009to 1.57% . There is continuous decreased in the PAT it is 3.237,0.578,2.509 in the year

2010-2011,2009-2010, 2008-2009respectively. VERTICAL ANALYSIS: BALANCE SHEET


RAMDEV FOOD PRODUCT PVT. LTD.: Common-Size Balance SheetFor the Year Ended March 31


AS ON31-03-2009

AS ON31-03-2008

A.SOURCES OF FUNDS1.SHAREHOLDERS FUNDS(a) Share capital 2214.74 2214.74 2214.74(b) Reserves Surplus 60385.77 63741.78 64477.68

2. LOANS FUNDS(a) Unsecured Loans 0.06 00 32938.05

3 DEFERRED TAX LIABILITY (NET)

8356.17 9809.27 12166.60

TOTAL 70956.74 75765.79 111797.07

B. APPLICATION OF FUNDS 1. FIXED ASSETS

a. Gross Block 106726.24 129512.56 145045.86

b .Less; Depreciation 25558.85 30746.69 34045.89

NET BLOCK 81167.39 98765.87 110999.97

c. Dismantled Capital Store 98.41 91.44 140.93

d. Capital work in progress 7480.45 8923.41 9266.72

TOTAL 88746.25 107780.72 120407.62

2.FINANCE LEASE RECEIVABLE

959.66 751.11 530.06

3. INVESTMENT 1624.58 1691.45 48610.70

4. CURRENT ASSETS, LOANS & ADVANCES

a. Inventories 38519.43 32831.37 30671.13

b. Sundry Debtors 9569.75 7452.96 18660.65


c. Cash and Bank balances 66445.86 72776.77 7689.41

Other current assets 135.45 191.85 168.12

d. Loans and Advances 12953.82 16238.15 11714.68

TOTAL 127624.31 129491.10 68903.99

Less; Current Liabilities & Provisions

147998.06 163948.59 126655.30

Net C.A (20373.75) (34457.49) (57751.31)

TOTAL 70956.74 75765.79 111797.07

6.2:VERTICAL ANALYSIS: BALANCE SHEET


RAMDEV FOOD PRODUCT PVT. LTD. Common-Size Balance SheetFor the Year Ended March 31


AS ON31-03-2009

AS ON31-03-2008

A.SOURCES OF FUNDS

1.SHAREHOLDERS FUNDS (a) Share capital 3.12 2.92 1.98(b) Reserves Surplus 85.10 84.13 57.672. LOANS FUNDS (a) Unsecured Loans 0.00008 00 29.463 DEFERRED TAX LIABILITY (NET)

11.78 12.95 10.89

TOTAL 100 100 100B. APPLICATION OF FUNDS 1. FIXED ASSETS

a. Gross Block 150.41 170.93 129.74

b .Less; Depreciation 36.02 40.58 30.45

NET BLOCK 114.39 130.36 99.29

c. Dismantled Capital Store 0.14 0.13 0.13

d. Capital work in progress 10.54 11.78 8.29

TOTAL 125.07 142.27 107.71

2.FINANCE LEASE RECEIVABLE

1.35 0.99 0.47

3. INVESTMENT 2.29 2.23 43.48

TOTAL 128.71 145.49 151.66

4. CURRENT ASSETS, LOANS & ADVANCES a. Inventories 54.29 43.33 27.43

b. Sundry Debtors 13.49 9.84 16.67

c. Cash and Bank balances 93.64 96.05 6.88

Other current assets 0.19 0.25 0.15

d. Loans and Advances 18.26 21.43 10.48

TOTAL 179.87 170.90 61.63


Less; Current Liabilities & Provisions

208.57 216.39 113.29

Net C.A (28.71) (45.49) (51.66)

TOTAL 100 100 100

INTERPRETATION: Out of total fund the ratio share capital is decreased year by year. In the year

2010-2011 it is 3.12% and ratio 2.92%, 1.98% in the year 2009-2010,2008-2009 respectively because increased in DEFFERED tax liability in the 2010-2011 it is 11.78% and increased to 12.95%. In 2008-2009

the ratio decreased because the loan ratio increased to 29.46%. In net block there is fluctuation because the gross block decreased and

depreciation is increased in 2010-2011 and 2009-2010. As far as the net working capital is concern it goes in negative manner

because cash and bank balance decreased in the year 2008-2009

TREND ANALYSIS


CHAPTER 7

Trend analysis involves calculation of percentage changes in financial statement items for a number of successive years. It is an extension of horizontal analysis to several years. Trend analysis is carried out by first assigning a value of 100 to the financial statements items in a past financial year used as the base year and then expressing financial statements items in the following years as percentages of the base year value.

Trend analysis over longer periods helps in identifying certain basic changes in the nature of the business. Since many large corporations publish a summary of operating results and selected financial indicators for five years or more, it is possible to perform trend analysis using published reports.

The term "trend analysis" refers to the concept of collecting information and attempting to spot a pattern, or trend, in the information. In some fields of study, the term "trend analysis" has more formally-defined meanings.

Although trend analysis is often used to predict future events, it could be used to estimate uncertain events in the past, such as how many ancient kings probably ruled between two dates, based on data such as the average years which other known kings reigned.

Business Trend Analysis The software is what will allow you to practice important methods, such as data

warehousing, in which you sort and store information from a number of relevant sources. Data warehousing makes business trend analysis possible, and it allows the BI specialist to advise the client in how to move forward in the future.

When done correctly, a business intelligence conference brings together some of the most innovative business leaders with some of the most cutting-edge business trend analysis. The conferences are usually touted as a way for businesses to learn, to grow, and to keep up.

Sales Trend Analysis


A shoe industry analysis is an outlook of the market prospects in shoe manufacturing and sales. The analysis covers current market trends and concerns, and offers projections for the future.

Market Trend Analysis

Market conditions certainly weigh into an analyst's market financial analysis, and if there are outside factors affecting stocks, this certainly influences an analyst's assessment. Economists provide another type of market financial analysis. These professionals use economic components, such as gross domestic product, unemployment, and consumer spending, to provide an analysis on economic conditions in a region.

For example, if the investor wishes to get an idea on the potential for making a profit with pork bellies, the focus will be on the performance of pork bellies in a commodities market. The trend analysis will include more than one supplier for the commodity, in order to get a more accurate picture of the current status of pork bellies on the market.

Retail Trend Analysis

They may also introduce new products, or sell off unpopular product lines. Retail industry analysis also provides important information about the state of the global economy.

financial Trend Analysis

This type of information is extremely helpful to investors who wish to make the most from their investments. The process of a trend analysis begins with identifying the category of the investments that are under consideration.

Since one situation is never exactly like another, it always has a margin for error. In addition to historical information, financial industry analysis uses information from important figures and companies within the current financial world.

Ratio Trend Analysis

This type of information is extremely helpful to investors who wish to make the most from their investments. The process of a trend analysis begins with identifying the category of the investments that are under consideration.

This is because the borrower may have too much existing debt. A credit analysis also commonly considers expenditures. Creditors generally assess what debts a potential borrower is responsible for

7.1:TREND ANALYSIS


RAMDEV FOOD PRODUCT PVT. LTD. SELECTED DATA OF PROFIT AND LOSS ACCOUNT

PARTICULARS 2010-2011 2009-2010 2008-2009SALES 1014818.74 1327469.71 1514742.01

SUBSIDY 11554.39 5803.49 42058

EXPENDITURE

PURCHASE OF RAW MATERIAL

916897.90 1259464.49 154478.82

MANUFECTRING EXP. 67782.22 70273.47 63309.22

DEPRICIATION 4126.70 5472.11 3521.30

EARNING BEFORE INT.&TAX

33767.63 7960.54 3668.47

PROFIT AFTER TAX 21466.06 5887.44 1243.83

PARTICULARS 2010-2011 2009-2010 2008-2009SALES 100 130.81 149.26

SUBSIDY 100 50.23 364

EXPENDITURE

PURCHASE OF RAW MATERIAL

100 137.36 164.08

MANUFECTRING EXP. 100 103.67 93.40

DEPRICIATION 100 132.60 85.33

EARNING BEFORE INT.&TAX

100 23.57 10.86

PROFIT AFTER TAX 100 27.42 5.79


INTERPRETATION:

The sales is increasing every year but the expenditure are also increasing every year so the profit is decreasing every year..

Profit after interest and tax down every year in the year 2009-2010the PAT is 27.42 and 5.79 in 2008-2009because the cost of purchase of raw material increase every year.

The trend of the percentage shows that the sales and the expenditure rose in almost same proportion.


7.2:TREND ANALYSIS

RAMDEV FOOD PRODUCT PVT. LTD. SELECTED DATA OF BALANCE SHEET

PARTICULARS 2010-2011 2009-2010 2008-2009Share Capital 2214.74 2214.74 2214.74

Reserves &Surplus 60385.77 63741.78 64477.68

DEFFERED TAX LIABILITY

8356.17 9809.27 12166.60

TOTAL FUNDS 70956.74 75765.79 78859.01

ASSETS

Fixed Assets 81167.39 98765.87 110999.97

Inventories 38519.43 32831.37 30671.13

Sundry Debtors 9569.75 7452.96 18660.65

Cash bal. &bank bal. 66445.86 72776.77 7689.41

Loans & Advances 12953.82 16238.15 11714.68

Other current Assets 135.45 191.85 168.12

TOTAL ASSETS 208791.7 228257 179904

PARTICULARS 2010-2011 2009-2010 2008-2009Share Capital 100 100 100

Reserves &Surplus 100 105.56 106.78

DEFFERED TAX LIABILITY

100 117.39 145.60

TOTAL FUNDS 100 106.78 111.14

ASSETS

Fixed Assets 100 121.68 136.75

Inventories 100 85.23 79.63

Sundry Debtors 100 77.88 194.99

Cash bal. &bank bal. 100 109.53 11.57

Loans & Advances 100 125.35 90.43

Other current Assets 100 141.64 124.12

TOTAL ASSETS 100 109.32 86.16


ANALYSIS

Proper FINANCIAL management is essential to ensure that a

company has sufficient CASH on hand to meet the needs of both its

customers and its operations.

However, an excessive amount of inventory on hand ties up cash

and increases expenses such as insurance costs, property taxes, and

additional storage costs. In addition, excess inventory held too long can

become obsolete and lose value which could significantly reduce

inventory value.

Two measures that are helpful in evaluating the efficiency of

inventory management are inventory turnover and the number of day's

inventory is held.


CONCLUSION

The company has good experienced management having

tremendous marketing capabilities to capture the highest market share in

the line of product it dealt with.

Further , even if existences of competition form unorganized sector

in the domestic market the company achieves year by yearly growth in

terms of total turnover both in quantity and value term.

Further, very important factor is that now a days even if global financial

crisis prevailing in the world the company has very sound financial

condition and highly liquid position in the market. This is because of the

reason that the company is basically in FMCG sector and maintaining its

growth rate with the growth rate of the FMCG industry .i.e. approx. 18

to 20 % The company has good potential of setting of SEZ / AEZ and

food parks for providing added incentives to develop Greenfield

Projects.


The company has very tremendously targeted the level of

Rs.225cr. Of turnovers at the end of the financial year 2010-2011.

I have visited 30 vendors in my study of market analysis for Basic spices of

Ramdev. And from that I have conclude the following things:

Three main reasons behind increase in sales of Ramdev Basic

spices are as under’.

Use High Quality Product

Easily Available

Good distribution channel

Three main reason behind decline in sales of Ramdev Basic spices.

Use of readymade Basic spices

Increase in Competition

Recession period

From the study of the report, it is found that Ramdev is on 1 st position in

Basic Spices in Gujarat And all over India.

From the study of consumer report it is found that most of the users of

Ramdev Basic spices are satisfied by the Quality and Taste of its

product.

Main competitior of Ramdev are Home made, S.K. and Paustik.


FINDINGS

Ramdev is a king of basic spices in market And many Item.

A Ramdev basic spice is easily available in the market.

Most of retailer are selling Ramdev more than other Ramdev

products.

There is no problem in quality of Ramdev basic spices.

The image of RFPPL is more among the other companies.

Most of retailers are selling 100g, 200g, 500g, and 1kg’s packets of

Ramdev basic spices.

Ramdev chilli powder is most popular than the other Ramdev basic

spices.

Some retailers recommend to the customer for purchased of

Ramdev basic spices because its quality is excellent to compare the other

branded basic spices.

Retailers are satisfied with the distribution service of the RFPPL.

The most of retailer are selling minimum 70 packets of Ramdev

basic spices during a month.


RECOMMENDATION

During my research quality and taste are the most important factor consider while

purchased Ramdev basic spices so Ramdev should maintain high quality.

Most of retailers are purchasing only Ramdev basic spices. So company will try to

fascinate the retailer for purchase of other Ramdev products.

Company has required increasing their advertisement by the point of purchase and

poster also then its impact fat on customer and retailer for purchase.

Hoarding on state transport buses and city buses and local travels could be an

effective media.


Dashrath Gp at Ramdev

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