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PRESENTED BY:MAYANK BHATNAGAR

PGDM FT-2010

SEC A,25

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y The basic objective of studying the ratios of the company isto know the financial position of the company.

y To know the borrowings of the company as well as the

liquidity position of the company.

y To study the current assets and current liabilities so as toknow whether the shareholders could invest in JSL or not.

y To study the profits of the business and net sales of thebusiness .

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y Research Design:

The descriptive form of research method is adopted for

study. The major purpose of descriptive research isdescription of state of affairs of the institution as itexits at present. The nature and characteristics of thefinancial statements of JSL have been described in this

study.

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Nature of data:

The data required for the study has been collectedfrom secondary source .The relevant information weretaken from annual reports, journals and internet.

Methods of data collection:

This study is based on the annual report of JSL.Hencethe information related to, profitability, short termand long term solvency and turnover were very muchrequired for attaining the objectives of the presentstudy.

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y TOOLS APPLIED

Ratio analysis

Common-size statementTrend analysis

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y The current ratio is almost close to 2 in all the four study periodsyears. But in 2008-2009, the current ratio is slightly lower thanthe normal. This shows that the company is enjoying credit

worthiness.y The quick ratio during the first two study periods is less than the

normal (i.e.) 1:1. But in the last two years, the ratio almostcrossed the normal value which indicates the firm is controllingits stock position because there is linear relationship betweencurrent ratio and liquid ratio.

y There is no f luctuation in the cash ratio for all the years whichclearly reflects the JSL has maintained steady cash.

y In all the years the debt equity is more, when compared withborrowings. Hence the company is maintaining its debt position.

y During all the study period years the relationship between salesto total assets is relatively low.

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y The sales are in between 1.5 and 3.5 times more than the proprietor'sfunds. It shows the firms is maintaining the better utilization of ownfunds.

y The Net profit from the year 2008-09 is negative which states thatcompany had made a loss.

y

During 2008-09 the gross profit position is 14.05%. But it wasfluctuating more than the 20%r in all other years of the study period.y The administration and selling expenses during 2007-08 is very high

when compared to previous year's %age as they were in between 13-20%of sales. This may also be one of the reasons to a net loss in that year.

y The sales figure decreased in the initial study period but it showed a

considerable improvement in the next study periods. Sales figures haveincreased year after year Administrative and other expenses werefluctuating. The other income of the company was increased year by

year.

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y The company's profit over the years has been decreasing when compared toprevious years and even it incurred loss in the year 2008-09. The companymust increase the profit in future. The company must take steps to increase theprofit level.

y The Gross Profit ratio can be improved by increasing the gross profit and thefactors decreasing the gross profit ratio should be thoroughly checked timely

whether they are operating factors or any misleading factors.y A Non-operating expense of the company is high. So the management should

take necessary steps to reduce the non-operating expenses. The managementshould take steps to reduce the borrowed capital.

y Net fixed asset of the company has increased and even though they are notutilizing the enhanced technology to increase sales. So the managementshould take initiative steps for the proper utilization of the resources.

y The liquidity position of the company is quite satisfactory. And this must beimproved further for the purpose of proper utilization of the liquid assets ofthe company.

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y The cash ratio position of the company is not satisfactory for the lastfive years. It is fluctuating over the years and there is no standard ratiomaintained. So the management should take steps to improving thecash position of the company.

y Debt equity ratio is satisfactory for all the study years. So the company

has enough scope for the more long-term borrowings from theoutsiders as its current ratio is also good and has a sufficient amount ofcurrent assets..

y The sales of the organization can be further increased by improving thequality through optimum utilization of company's resources (i.e.assets, raw materials, credit system, etc.) and that in turn will increasethe overall profits of the organization.

y The Management must find out the reasons for the decrease in salesand must take appropriate measures.

y The Management must also study the market position and it also findthe demand prevailing in the market for the products and thus this willguide them to enhance their sales volume.

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y On studying the financial performance of JSL for aperiod of four years from 2007-08 to 2010-11, the studyreveals that the financial performance is better. JSL hasbeen able to maintain optimal cost positioning.

Despite price drops in various products, the companyhas been able to maintain and grow its market share tomake strong margins in market, contributing to thestrong financial position of the company. Thecompany was able to meet its entire requirements forcapital expenditures and higher level of workingcapital commitment with higher volume of operationsand from its operating cash flows.

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y RATIO ANALYSIS

y TREND BALANCESHEET

y TREN

DINCOME

ST

ATEMENT

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THANKS