Shivaji University, Kolhapur.

INTRODUCTION OF THE STUDY AND METHODOLOGY:-

Introduction of the Study

As earlier mentioned in the introduction of the study, Financial Position Analysis
is the ultimate priority of every company to know the actual financial position of the
company & how to improve it. The common size statement and ratio analysis is used to
measure the financial position of the company.

Objective of the Study

To understand the concepts of common size statement & ratio analysis.

To study the various aspects of financial management.
To study the overall financial performance of the company.
To know the profit position of the company.
To suggest the meaningful & constructive measures based on data analysis &
interpretation.

Importance of the Study

The focus of financial analysis is on key figures in the financial statements & the
significant relationship that exists between them.
The analysis of financial statements is a process of evaluating the relationship
between component parts of financial statements to obtain a better understanding
of the firms position & performance.
The ratio analysis helps in building the economic viability of factory in all
departments.
In brief, financial analysis is the process of selection, relation &
evaluation.

Scope of the Study

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The scope of present study is limited to financial analysis of Shri. Datta Sahakari Shetkari
Sakhar Karkhana Limited, Shirol. The data collected & presented covering three years
information that is 2010-2011, 2011-2012, 2012-2013.

Limitation of the Study

Study is limited to the information provided regarding the finance statement of 3

years.
Reliability & accuracy of calculation depends very much on the information
found in the balance sheet & its reliability.
The study is entirely based on the secondary data that is the financial statement or

industry annual report published by industry.

The study is limited only to Shri. Datta Shetkari Sahakari Sakhar Karkhana Ltd,
Shiorl.

Research Methodology
Collection of data: Data collected through two sources i.e. Primary data and
Secondary Data.
a Primary data:
The primary data are those which are collected afresh and for first time, thus happen to
be original in character. The primary data is collected through:
Questionnaire
Observation

b) Secondary Data:
The secondary data, on the other hand, are those which have already been collected by
someone else and which have already been passed through the statistical process. The
secondary data is collected through:
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Records
Organization website.
For this project, the sources of secondary data used are factory annual report
Balance Sheet & Profit & Loss A/c to calculate overall calculations.

Sample Size:
The data collected & presented covering three years information that is 20102011, 2011-2012, 2012-2013s profit & loss a/c & balance sheet, which show the
whole information of the companys financial position.

Methods & technique of Interpretation & Analysis Data:

For analysis and interpretation of data used statistical techniques are:
Tabulation
Percentage
Graph

THEORITICAL BACKGROUND:-

Introduction of the Financial Position Analysis

Financial analysis is the art of recording, classifying & summarizing in a significant
manner in term of money transaction.
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The balance sheet & income statement or profit & loss a/c are the traditional basic
financial statement of a business enterprise. A balance sheet shows the financial position
of the firm as at the last day of the accounting period. Revenues recorded in income
statement do not reflect cash inflows as the debtors may pay later. Likewise, some of the
expenses shown in income statement may be non cash expenses (depreciation) &some
may not be paid in full (goods purchased on credit, salaries payable etc.) Thus the periods
profit &loss dose not evidently provide information about the investing & financing
activities of the firm during the accounting period.
Balance sheet & profit &loss provide some extremely useful information to the
extent that the balance sheet mirrors the financial position on a particular date in terms of
the structure of assets, liabilities & owners equity, & so on & the profit &loss a/c shows
the results of operation during the year. Thus the financial statements provide a
summarized view of the financial position & operations of the firm.
Other useful way of analyzing financial statements is to convert them into percentages.
When this method is pursued, the income statement exhibits each expense item or group
of expense items as a percentage of net sales are taken at 100%. Similarly, each
individual asset & liability classification is shown as a percentage of total assets &
liabilities respectively. Statements prepared in this way are referred to as common size
statement.

Meaning of financial analysis

One of the most common ways of analyzing financial data is to calculate ratios from the
data to compare against those of other companies or against the company's own historical
performance. For example, return on assets is a common ratio used to determine how
efficient a company is at using its assets and as a measure of profitability. This ratio could
be calculated for several similar companies and compared as part of a larger analysis.

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Definition of financial analysis

Financial analysis is used to analyze whether an entity is stable, solvent, liquid, or
profitable enough to be invested in. When looking at a specific company, the financial
analyst will often focus on the income statement, balance sheet, and cash flow statement.
To the study of financial position analysis using the Common Size Statement &
Ratio Analysis there is discussed below:

Financial Position Analysis

Common Size Statement
Ratio Analysis

Common size statement

Nature of common size statement
The common-size statement is a financial document that is often utilized as a quick and
easy reference for the finances of a business. Unlike balance sheets and other financial
statements, the common-size statement does not reflect exact figures for each line item.
Instead, the structure of the common size statement uses a common base figure, and
assigns a percentage of that figure to each line item or category reflected on the
document.
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The use of a common-size statement can make it possible to quickly identify areas that
may be utilizing more of the operating capital than is practical at the time, and allow
budgetary changes to be implemented to correct the situation.
The common size statement can also be a helpful tool in comparing the financial
structures and operation strategies of two different companies. The use of percentages in
the common size statements removes the issue of which company generates more
revenue, and brings the focus on how the revenue is utilized within each of the two
businesses. Often, the use of a common-size statement in this manner can help to identify
areas where each company is utilizing resources efficiently, as well as areas where there
is room for improvement.

Introduction of common size statement

Financial statements are mainly prepared for decision making purpose. But the
information as is provided in the financial statements is not adequately helpful in drawing
a meaningful conclusion. Thus, an effective analysis and interpretation of financial
statements is required. Analysis means establishing a meaningful relationship between
various items of the two financial statements with each other in such a way that a
conclusion is drawn. By financial statements we mean two statements:

Profit
Balance sheet or position statement

These are prepared at the end of the given period of time. They are the indicators of
profitability & financial soundness of the business concern. The term financial analysis is
also known as analysis & interpretation of financial statements. It refers to the
establishing meaningful relationship between various items of the two statements that is
income statement &position statement. It determines financial strength & weaknesses of
the firm. Analysis of financial statement is an attempt to assess the efficiency &
performance of an enterprise. Thus the analysis & interpretation of financial statements is

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very essentials to measure the efficiency, profitability, financial soundness & future
prospects of the business units. Types of financial statement are

Comparative statement
Common size statement
Trend analysis

The main objective of a business is to earn a satisfactory return on the funds invested in
it. Financial analysis helps in ascertaining whether adequate profits are being.

Definition of common size statement

A company financial statement that displays all items as percentages of a common base
figure. This type of financial statement allows for easy analysis between companies or
between time periods of a company.

Uses of common size statement

The values on the common size statement are expressed as percentages of a statement
component such as revenue. While most firms don't report their statements in common
size, it is beneficial to compute if you want to analyze two or more companies of
differing size against each other.

A common-size financial statement is simply one that is created to display line items on a
statement as a percentage of one selected or common figure. Creating common-size
financial statements makes it easier to analyze a company over time and compare it with
peers. Using common-size financial statements helps investors spot trends that a raw
financial statement may not uncover.

Advantages of common size statement

(1) It reveals Sources and Application of Funds in a nutshell which help in taking
decision.
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(2) If common size statements of 2 or more years are compared it indicate the
changing proportion of various components of Assets, Liabilities, Cost, Net Sale
& Profit.
(3) When Inter Firm Comparison is made with the help of Common size statement it
helps in doing corporate evaluation and Ranking.

Limitations of common size statement

The interpretation of common size statement is subject to many of the limitations to the
accounting data used to construct them.
For example

Different accounting policies may be used by different firms or within same firm at
different points in time. Adjustments should be made for such differences.
Different firms may use different accounting calendars, so the accounting periods may
not be directly comparable.

Ratio analysis
Nature of Ratio Analysis
It is a technique of analysis and interpretation of financial statements. Ratio analysis
helps in making decisions as it helps establishing relationship between various ratios and
interpret thereon. Ratio analysis helps analysts to make quantitative judgment about the
financial position and performance of the firm.
Ratio analysis involves following steps:
1. Relevant data selection from the financial statements related to the objectives of the
analysis.
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2. Calculation of required ratios from the data and presenting them either in pure ratio
form or in percentage.
3. Comparison of derived different ratios with:
i. The ratio of the same concern over a period of years to know upward or downward
trend or static position to help in estimating the future, or
ii. The ratios of another firm in same line, or
iii. The ratios of projected financial statements, or
iv. The ratios of industry average, or
v. The predetermined standards, or
vi. The ratios between the departments of the same concern assessing either the financial
position or the profitability or both.
4. Interpretation of the ratio
Ratio analysis uses financial report and data and summarizes the key relationship in order
to appraise financial performance. The effectiveness will be greatly improved when
trends are identified, comparative ratios are available and inter-related ratios are prepared

Introduction of ratio analysis

Financial ratio analysis is a useful technique to measure, compare, and evaluate the
financial condition and performance of a firm. Ratio analysis enables a credit manager to
spot trends in a firm's financial performance, and to compare its performance and
financial condition with the average performance of similar businesses in the same
industry. Financial ratio analysis is used by credit professionals to answer these questions
about firms:
Is the business profitable?
Can the business pay its bills on time?
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How is the business financed?
How does the company financial performance this year compare to last year?
How does the customer's performance compare with its competitors?
How does the customer's performance compare to the industry norms?
Financial ratio analysis is a useful tool for determining a customer's overall financial
condition. Industry-wide financial ratios are published by a variety of sources, including
Dun & Bradstreet. Financial ratios are useful for making quick comparisons. Banks and
trade creditors use financial ratio analysis to help them decide whether a business is a
good credit risk or not.
Ratio analysis is a tool to help evaluate the overall financial condition of a customer's
business. Ratios are useful for making comparisons between a customer and other
businesses in an industry. A financial ratio is a simple mathematical comparison of two or
more entries from a company's financial statements. Creditors use ratios to chart a
company's progress, uncover trends and point to potential problem areas.

Meaning of ratio analysis

Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic
use of ratio to interpret the financial statements so that the strength and weaknesses of a
firm as well as its historical performance and current financial condition can be
determined. The term ratio refers to the numerical or quantitative relationship between
two variables.

Definition of ratio analysis

1) In general, a ratio is a way of concisely showing the relationship between two
quantities of something. The most formal way of stating a ratio is by separating the two
quantities with a colon (:) although sometimes a division sign (/) is used in place of the
colon. Thus, where there is a ratio of 5:2 between apples and oranges, for each five
apples, there are two oranges.For a ratio to have meaning, both numbers must be nonzero.
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2) In mathematics, a ratio is a quotient used to compare quantities of the same units of
measure.

Uses of ratio analysis

Ratio analysis is a technique of analyzing the financial statements by calculating ratios.
Here is the list of uses of ratio analysis
1. It is useful for inter firm comparison which implies that company compares its
performance with that of its industry peers.
2. It is useful in intra firm comparison which means that company will compare the
performance of various departments of the company so as to judge the best department
within the company.
3. It is useful in simplifying the accounting figures to make them understandable to a
layman, because it is easier to understand ratios then plain figures.
4. It is also useful in forecasting and planning for the future, also it helps in control by
comparing the actual performance with that of forecasted performance and looking for
reason for it.
5. It is also used for analysis of financial statements by various interested parties like
bankers, creditors, supplier etc. for taking future decision about the company.

Importance of ratio analysis:

Ratio analysis is relevant in assessing the performance of a firm in respect of the
following aspects:
Liquidity Position
With the help of ratio analysis conclusions can be drawn regarding the liquidity position
of a firm. The liquidity position of a firm would be satisfactory if it is able to meet its
current obligations when they become due. A firm can say to have the ability to meet its
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short-term liabilities if it has sufficient liquid funds to pay the interest on its short
maturing debt usually within a year as well as to repay the principal. This ability is
reflected in the liquidity ratios of a firm. The liquidity ratios are particularly useful in
credit analysis by banks & other suppliers of short-term loans.
Long-term Solvency
Ratio analysis is equally useful for assessing the long-term financial viability of a firm.
This aspect of the financial position of a borrower is of concern to the long term
creditors, security analysts & the present & potential owners of a business. The long-term
solvency is measured by the leverage/capital structure & profitability ratios which focus
on earning power & operating efficiency.

Operating Efficiency
Another dimension of the usefulness of the ratio analysis, relevant from the viewpoint of
management is that it throws light on the degree of efficiency in the management &
utilization of its assets. The various activity ratios measure this kind of operational
efficiency. In fact, the solvency of a firm is, in the ultimate analysis, dependent upon the
sales revenues generated by the use of its assets-total as well as its components.
Overall Profitability
Unlike the outside parties which are interested in one aspect of the financial position of a
firm, the management is constantly concern about the overall profitability of the
enterprise. That is, they are concern about the ability of the firm to meet its short-term as
well as long-term obligations to its creditors, to ensure a reasonable return to its owners
& secure optimum utilization of the assets of the firm.

Limitations of accounting ratios

Difficulty in comparison
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One serious limitation of ratio analysis arises out of the difficulty associated with their
comparability. One technique that is employed is inter-firm comparison. But such
comparisons are vitiated by deferent procedures adopted by various firms. The
differences may relate to:
Differences in the basis of inventory valuation ( for example last in first out, first in first
out, average cost & cost);
Different depreciation methods (straight line vs. written down basis); estimated working
life of assets, particularly of plant & equipment;
Amortization of intangible assets like goodwill, patents etc;
Amortization of deferred revenue expenditure such as preliminary expenditure &
discount on issue of shares; Capitalization of lease & so on.
Impact of inflation
The second measure limitation of the ratio analysis as a tool of financial analysis is
associated with price level changes. This, in fact, is a weakness of the traditional financial
statements which are based on historical costs. An implication of this feature of the
financial statement as regards ratio analysis is that assets acquired at different periods are,
in effect, shown at different prices in the balance sheet, as they are not adjusted for
changes in the price level. As a result, ratio analysis will not yield strictly comparable
and, therefore, dependable results.
Conceptual Diversity
Yet another factor which influences the usefulness of ratios is that there is difference of
opinion regarding the various concept used to compute the ratios. There is always room
for diversity of opinion as to what constitutes shareholders equity, debt, assets, profit&
so on.

Classification of ratio analysis

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Ratios may be classified in a number of ways keeping in a vie the particular purpose.
Ratios indicating profitability are calculated on the basis of the profit & loss account:
those indicating financial position are computed on the basis of the balance sheet & those
which show operating efficiency or productivity or effective use of resources are
calculated on the basis of figures in the profit & loss account & the balance sheet. This
classification is rather crude & unsuitable to determine the profitability & financial
position of the business. To achieve this purpose effectively, ratios may be classified as:
Liquidity Ratios
Leverage Ratios
Profitability Ratios
Activity Ratios
These are discussed one by one as follows:
Liquidity Ratios
These ratios are calculated to judge the financial position of the concern from short term
solvency point of view. These ratios as follows:
Current Ratios
This ratio indicated the extent of the soundness of the current financial position of an
undertaking & the degree of safety provided to the creditors. The higher the current ratio
the larger amount of rupee available per rupee of current liability, the more the firms
ability to net current obligations & the greater safety of the funds of short term creditors.
A current ratio of 2:1indicates a highly solvent position. A current ratio of 1.33:1 is
considered banks are minimum acceptable level for providing working capital finance.
Current Ratio =Current Assets / current Liabilities
Quick Ratio

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Quick Ratio is a more refined tool to measure the liquidity of an organization. It is a
better test of financial strength than the current ratio, because it excludes very slow
moving inventories & the items of current assets which cannot be converted into cash
easily. A quick ratio of 1:1 usually considered satisfactory through it is again a rule of
thumb only.
Quick Ratio = Current Assets, Loans & Advances Inventory / Current Liabilities &
Provisions
Leverage ratio
The long term lenders/creditors would judge the soundness of a firm on the basis of the
long term financial strength measured in terms of its ability to pay the interest regularly
as well as repay the installment of the principal on due dates or in one lump sum at the
time of maturity. The long term solvency of the firm can be examined by using leverage
or capital structure ratios.

Debt-Equity Ratio
The relation between borrowed funds & owners capital is a popular measure of the long
term financial solvency of a firm. This relationship is shown by the debt equity ratios.
This ratio reflects the relative claims of creditors & shareholders against the assets of the
firm. Alternatively, this ratio indicates the relative proportions of debt & equity in
financing the assets of a firm. The relationship between outsiders claims & owners
capital can be shown in different ways &, accordingly, these are many variants of the
Debt-Equity Ratio.
One approach is to express the D/E Ratio in terms of the relative proportion of long-term
debt & shareholders equity.
D/E Ratio = Long term Debt/Shareholders Equity
Coverage Ratio
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These ratios are computed from information available in the profit & loss account. The
obligations of a firm are normally met out of the earnings or opening profits. The
coverage ratios measure the relationship between what is normally available from
operations of the firms & the claims of the outsiders. The important coverage ratios are as
follows:

Interest coverage ratio

Interest coverage ratio is also known as time interestearned ratio. This ratio

measures the debt servicing capacity of a firm insofar as fixed interest on long-term loan
is concerned. It is determined by dividing the operating profits or earnings before interest
& taxes (EBIT) by the fixed interest charges on loans. Thus,
Interest Coverage = EBIT/Interest

Dividend Coverage Ratio

It measures the ability of a firm to pay dividend on preference shares which carry

a stated rate of return. This ratio is the ratio (expressed as X number of times) of net
profits after taxes (EAT) & the amount of preference dividend. Thus,
Dividend Coverage = EAT/Preference Dividend
Profitability Ratio
Profitability reflects the final results of business operations. There are two types of
profitability ratios: profit margin ratios & rate of return ratios. Profit margin ratios show
the relationship between profit & sales. Since profit can be measured at different stages,
there are several measures of profit margin. The most popular profit margin ratios are:
gross profit margin, operating profit margin, & net profit margin. Rate of return ratios
reflect the relationship between profit & investment. The Important rate of return
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measures are: return on assets, earning power, return on capital employed, & return on
equity.
Gross Profit Ratio
The gross profit margin ratio is defined as:
Gross Profit Ratio = Gross Profit /Net Sales*100

The ratio shows the margin left after meeting manufacturing costs. It measures the
efficiency of production as well as pricing. To analyze the factors underlying the variation
in gross profit margin the proportion of various elements of cost (labor, materials &
manufacturing overheads).

Net Profit Ratio

This ratio shows the earnings left for shareholders (both equity & preference) as a
percentage of net sales. It measures the overall efficiency of production, administration,
selling, financing, pricing, & tax management. Jointly considered, the gross & net profit
margin ratios provide a valuable understanding of the cost & profit structure of the firm
& enable the analyst to identify the sources of business efficiency / inefficiency.
Net Profit Ratio = Net Profit after Tax/Net Sales *100
Return on total Assets
This ratio is calculated to measure the profit after tax against the amount invested in total
assets to ascertain whether assets are being utilized properly or not. It is calculated as
under:
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Return on Total Assets = Net profit after Tax/Total Assets
Activity Ratio
Funds of creditors & owners are invested in various assets & generate sales & profits.
Activity ratios are employed to evaluate the efficiency with which the firm manages &
utilities its assets. These ratios are also called Turnover ratios. Examining the liquidity is
to determine how quickly certain current assets are converted into cash. The ratios to
measure these are referred to as turnover ratios.
Inventory Turnover Ratio
It is computed by dividing the cost of goods sold by the average inventory. Thus,
Inventory turnover ratio = cost of goods sold/average inventory
The cost of goods sold means sales minus gross profit. The average inventory refers to
the simple average of the opening & closing inventory. The ratio indicates how fast
inventory is sold. A high ratio is good from the viewpoint of liquidity & vice versa.

Debtors turnover ratio

It is determined by dividing the net credit sales by average debtors outstanding during the
year. Thus,
Debtors turnover ratio = net credit sales/Average debtors
Debtors turnover indicates the number of times debtors turnover each year. Generally, the
higher the value of debtors turnover, the more efficient is the management of credit.
To outside analyst, information about credit sales & opening & closing balances
of debtors may not be available. Therefore, debtors turnover can be calculated by
dividing total sales by the year-end balance of debtors:
Debtors Turnover = Sales/Debtors
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Debtors collection period (in days)
Debtors Collection Period, which measures how long it takes to collect amounts from
debtors. The actual collection period can be compared with the stated credit term of the
company. It is longer than those terms, & then this indicates some insufficiency in the
procedures for collecting debts.
Debtors Collection Period = Sundry Debtors/Sales*365
Current Assets Turnover Ratio
This ratio indicates the efficiency with which current assets turn into sales. A higher ratio
implies by & large a more efficient use of funds. This high turnover rate indicates
reduced lock-up o funds in current assets. An analysis of this ratio over a period of time
reflects working capital management of a firm.
Current assets turnover ratio = Sales/Current Assets

THE RATIOS USED FOR THE STUDY:-

Current Ratio= Current Assets/Current Liabilities

Quick Ratio = Quick Assets/Quick Liabilities
Net Profit Ratio = Net Profit/Net Sales*100
Return on Total Assets Ratio = Sales/Total Assets
Debtors Turnover Ratio = Credit Sale/ Average Account Receivable
Debtors Collection Period = 12 month/Debtors Turnover Ratio
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Current Assets Turnover Ratio = Sales/Current Assets

INTRODUCTION OF THE ORGANIZATION:Company Profile

SHRI DATTA SHETKARI SAHAKARI SAKHAR KARKHANA LTD.,SHIROL.
Name of the company

Shri. Datta Shetkari Sahakari Sakhar Karkhana

Address of the company

Limited, Shirol.
Post: Dattanagar 416 120, Taluka Shirol,

Registration No.

District Kolhapur (MS) India.

KPR/PRG/ (A)-1.

& Date
Constitution
E-mail ID
Website

Dated 9th June, 1969

Co-Operative Limited
K/[email protected]
www.dattasuger.org

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7000 TCD (capacity of crushing)

Origin:
Shri. Datta Shetkari Sahakari Sakhar Karkhana Ltd., Shirol.
A pioneering effort of starting an Agro Industrial project in the co-operative field for
achieving social upliftment through rural development was made for the first time in
Ahmedanagar District in the year 1950 by Pravara Sahakari Sakhar Karkhana Ltd., under
the guidance of distinguished co-operative leaders like Sarvashri Dr. Dhananjayrao
Gadgil, Shri Vaikunthbhai Mehta & Shri. Vitthalrao Vikhe-Patil & it proved to be very
successful venture mainly on account of efforts of the rural co-operative leaders. This has
ushered in an era of Sugar Co-Operative in Maharashtra which has resulted in
transforming Rural Economy in the vicinity of Sugar Factories by ensuring stability &
better return to the cultivators.
Shirol Taluka of Kolhapur District is gifted by the presence of natural irrigation potential
on account of five rivers viz: Krishna, Panchganga, Warana, Doodhganga & Vedganga &
very fertile land of alluvial type soil. The agriculturists in this area were very eager to
have a Sugar Factory so as to ensure all-round development & economic prosperity to the
higher to poor & marginal farmers. A preliminary meeting was, therefore, held at
Kurundwad in Shirol Taluka on 31st December 1960 for organizing a Sugar Factory. After
collecting requisite amount of share capital, an application for Industrial License was
forwarded to the Government of India. During initial phase Late Shri. Dattajirao Baburao
Kadam, Late shri. Dinkarrao Bhausaheb Yadav, Late Shri.Vishwasrao Santajirao
Ghorpade Dattawadkar& Dr. Appasaheb alias S. R. Patil put their joint efforts to get the
License from Government of India.
These main promoters put very hard efforts to establish the Sugar Factory in
adverse condition. The persistent efforts put forth by the promoters of the proposed Shree
Datta Shetkari Sahakari Sakhar Karkhana Ltd., Shirol, ultimately proved to be successful
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& the government of India issued a Letter of Intent in the month of May, 1969, in
accordance with its enlightened Agro-Industrial Policy. Shree Datta Shetkari Sakhar
Karkhana Ltd., Shirol, was registered as a Co-Operative Society under the Maharashtra
Co-Operative Societies Act, 1960 on 9th June 1969 vide registration no. KPR/PRG/(A)-1.
An Industrial License for establishing a Sugar Factory on Co-Operative basis with initial
crushing capacity of 1250 M. Tones per day was issued.

Organizations Motto
Our aim is to give maximum return to cane growers by producing quality
products with minimum expenses.
Adoption of advanced technologies.
We are committed to improve the environment.
We will strive to improve our performance on continuous basis through effective
implementation of quality Management System.

Area of Operation
Sr. No.
1
2
3
4
5
6

Name of Taluka
Shirol
Hatkanangle
Karveer
Kagal
Chikodi
Athani

Name of District
Kolhapur
Kolhapur
Kolhapur
Kolhapur
Belgaum
Belgaum

Name of the state

Maharashtra
Maharashtra
Maharashtra
Maharashtra
Karnataka
Karnataka
Total

No. of Villages
50
32
2
3
21
7
115

Financial Performance of the company (Rupees in lacks)

SR.No.
1
2
3
4
5
6

Particulars
Total Fixed Assets
Investments
Term Loan
Deposits
Share Capital
Reserves

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2010-2011
14432.62
20.93
1050.66
64.94
2437.57
535.80
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2011-2012
15073.18
20.93
787.46
53.93
3372.84
1254.06

2012-2013
16871.91
20.93
524.27
10.10
4167.96
1297.12

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7

Net worth

3088.99

4796.71

5835.04

Some features of Organization

Environment Department
The factory management has established a separate Environmental cell to look after all
the related issues of Pollution control. It has a task to look after the effluent treatment of
sugar factory and distillery.
Due to the efforts of Department effluent quantity has reduced to meager 300 M3/Day for
crushing of 7500 TCD. The effluent was treated in the full-fledged ETP anaerobic filter
followed by activated sludge process. The results are found to be one of the best. The
treated effluent is used for irrigation of about 40Ha of land.
The Distillery effluent spent wash is one of the most polluted wastes. The factory
management has adopted composting technique for the treatment & disposal of spent
wash. Press mud, Bagasse and ash are mixed in definite proportion with the spent wash
and aerated for about 21 days to get good quality of compost. The ready compost is
distributed to the member farmers at a rate of 275/- per ton. The compost is good in
Humes content & bacterial content. The application of compost has helped to improve
the yield of crop along with soil quality.
Water Management
Shree Datta Shetkari Sahakari Sakhar Karkhana Ltd., Shirol has a average crushing
capacity of 7500TCD. The water consumption of the factory during 2001-02 was 3000
cum/d. looking to this water consumption the authority decided to reduce the
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

consumption. It established the separate cell to look into the matter. The cell undertook
the scientific study to monitor the water consumption &various ways to reduce the
consumption. The authority took various measures to reduce the water consumption by
way of recycling the excess condensate. Reusing the water, which do not contaminate?
The excess condensate is collected separately and cooled with the help of Two Stage
Cooling Tower and subsequently filtered through MGF (Multi Grade Sand Filter) and
ACF (Activated Carbon Filter). This filtered condensate water has better quality than
river water. This water is recycled back to the process.
Medical Center
Factory has established a Medical Center in the premises of the Karkhana with modern
building and equipped with all instruments and facilities to render the medical needs to
people. The Medical Center has four well-qualified doctors. Moreover, the medical center
have two ambulances, Medical center has X-ray machine, Physiotherapy Section, wellequipped operation theater. Medical center is totally implemented by financial support by
factory cane growers. The total investment for the said Medical Center is Rs. 263.92
lacks.
Industrial Training Center (ITC)
Considering the fast growth of small and large scale industries in the nearby towns, the
Factory Management has started Government recognized Industrial Training Center,
incorporating six trades viz: 1) Fitter, 2) Mechanic Motor Vehicle [MMV], 3)Electrician,
4)Mechanic Agriculture Machinery, 5)Information Technology & Electronic System
Maintenance &6) computer operating &programming Assistance, which will facilitate the
participant trainees the job surety as also they can have individual workshop of the
subject matter.
Datta Polytechnic College
Factory Management has started Polytechnic College from academic year 2010-2011.
The Polytechnic is recognized by AICTE, New Delhi and Director of Technical
Education Govt. of Maharashtra. It has five faculties viz. 1) Mechanical Engineering, 2)
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

Civil Engineering, 3) Electrical Engineering, 4) Electronic& Telecommunication, 5)
Computer Engineering.
Dattajirao Kadam Kamgar Kalyan Mandal & Labor welfare
Management of the Karkhana is always trying to give the job to the people in the area of
operation. Relations between employees and management are very harmonious due to the
harmonious relations development of Industrial Complex is achieved. Late Dattajirao
Kadam Kamgar Kalyan Mandal Dattanagar implements various schemes for workers
families. Workers & family members can receive up to Rs. 10000 Medical Aid, if major
operation has taken place. Mandal has Gymnasium, Akhada, Library and Balwadi. Also
Recreation Hall is constructed for various functions.
Beside this facilities, Karkhana provides 50% Medical Expenditure for the employees
suffering from Heart Diseases, Paralysis, TB, Cancer & Leprosy & a paid leave up to 6
months.

Recently, we have covered all the employees under VIDYA SHREE (F) Medical scheme
of KLE Hospital Belgaum.
Late Dattajirao Kadam Kamgar Kalyan Mandal Dattanagar started its activities through
Gymnasium, Akhada & athletics. It is proud to mention here that; some of our players of
our Mandal are rating of the top of District, State & National Level. Besides this they
always get Championship of Kamgar Kalyan Mandal, Mumbai.

Computerization
Karkhana started computerization activity from 1987 with PC/XT hardware. It was used
for processing the salary of the employees. After those other applications are covered
step. Recently Karkhana has installed latest computer hardware & software. Fiber Optic
Cabling connects various departments to a Central Server. The application software is
developed under Oracle RDBMS.The system developed is on-line type. The transactions
are recorded in to the computer system at the source point as & when they occur. All
these transactions come to the Central Server. As soon as the Accountants authorize the
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Shivaji University, Kolhapur.

transactions, the balances of the concerned accounts get updated.
Sugarcane development activities
Shree Datta SSSK Ltd., Shirol has set up a separate wing of cane development activities
within the area of operation. For the said work we have appointed one agri. Assistant for
every 200 acres cane area. The Agri. Assistant gives advice to the concerned cane
growers from land preparation for cane planting up to harvesting.

Members of All Departments

SR.NO
1
2
3
4
5
6

NAME
SHRI. M. V. PATIL
SHRI. B.B. SHINDE
SHRI, B. G. PATIL
SHRI. S. S. HEGANA
SHRI. Y. R. MANE
SHRI. M. B. RAUT

7
8
9
10
11
12

SHRI. M. R. PATIL
SHRI. V. SHINDE
SHRI. V. T. MALI
SHRI. DAYANIDHI JESWALL
& RESHMA SHAH
SHRI. J. B. DESAI
SHRI. S. H. SANADI

13
14
15

SHRI. B. G. GAVADE
SHRI. B. B. PATIL
SHRI. S. K. YADAV

A.G.I.M.S.,Sangli.

Page 26

DESIGNATION
MANAGING DIRECTOR
SECRETARY
FINANCE MANAGER
CHIEF AGRICULTURE OFFICER
CIVIL MANAGER
GUEST HOUSE & VEHICLE
INCHARGE
WORKS MANAGER
PRODUCTION MANAGER
STORES SUPERINTENDENT
DOCTOR
ASSISTANT WELFARE OFFICER
INCHARGE SECURITY
OFFICER
SANITATION SUPERVISOR
GARDEN SUPERVISOR
DISTILLERY CHEMIST

Shivaji University, Kolhapur.

ORGANIZATIONS CHART
Chairman

Vice-Chairman

Managing Director

Secretary

Distillery
Manager

Work
Manager

Production
Manager

Assist.
Engineer

Dy. Chief
Chemist

Chemist

Assist.
Engineer

Manufacturin
g Chemist

Worker

Jr. Engineer

Lab Chemist

A.G.I.M.S.,Sangli.

Labor Welfare
Office

Staf

Store
Superintend
ent

Staf

Finance

Dy. Chief
Assist.

Staf

Page 27

Shivaji University, Kolhapur.

Worker

Worker

COMMON SIZE STATEMENT

OF 2011
Liabilities

2010-11(Amt.)

Assets

2010-11(Amt.)

Paid up share capital

243756890.26

6.55

Cash in hand & with

2305293.27

0.062

bank
Reserve Fund & Other

949188669.4

25.5

Investment

2092890

0.056

Fund
Secured loans

1158867437.74

31.13

Advances &

206291353.20

5.54

Unsecured Loan

105065928.00

2.82

Receivables
Shri. Datta SSSK

40857043.69

1.1

Deposits

6493561.9

0.17

Ltd. Char. Trust

Current Assets

159357100.53

4.28

33.44

Closing stock Sugar

1864154677

50.08

1443261742

38.77

1935905.86

0.05

Pre paid Expenses

1958045.5

0.05

Total

3722214051

100

Current Liabilities &

Provisions

1244535918.14

Profit & loss Account

14305646.05

& By product
0.38

Fixed Assets
Horticulture &
Garden

Total

3722214051

A.G.I.M.S.,Sangli.

100

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Shivaji University, Kolhapur.

Assets of 2010-11
Cash in hand & with bank = 2305293.27/3722214051 = 0.062
Investment = 2092890/3722214051 = 0.056
Advances & Receivables = 206291353.20/3722214051 = 5.54
Shri. Datta SSSK Ltd. Char. Trust = 40857043.69/3722214051 = 1.1
Current Assets = 159357100.53/3722214051 = 4.28
Closing stock Sugar & By product = 1864154677/3722214051 = 50.08
Fixed Assets = 1443261742/3722214051 = 38.77
Horticulture & Garden = 1935905.86/3722214051 = 0.05
Pre paid Expenses = 1958045.5/3722214051 = 0.05

Liabilities of 2010-11
Paid up share capital = 243756890.26/3722214051 = 6.55
Reserve fund & other fund = 949188669.4/3722214051 = 25.5
Secured loans = 1158867437.74/3722214051 = 31.13
Unsecured Loan = 105065928.00/3722214051 = 2.82
Deposits = 6493561.9/3722214051 = 0.17
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

Current Liabilities & Provisions = 1244535918.14/3722214051 = 33.44
Profit & loss Account = 14305646.05/3722214051 = 0.38

COMMON SIZE STATEMENT

OF 2012
Liabilities

2011-

Assets

2011-

Paid up share capital

12(Amt.)
337284312

7.88

Cash in hand &

12(Amt.)
13317322

0.31

Reserve Fund &

1099297125

25.69

with bank
Investment

2092890

0.049

Other Fund
Secured loans

1093000914

25.55

Advances &

331320849

7.74

122853386

2.87

163023951

3.81

2133515010

49.87

1507001960

35.22

1974876

0.046

Pre paid Expenses 2900559

0.068

Work in Process

315502

0.007

Total

4278316305

100

Unsecured Loan

78746382

1.84

Receivables
Shri. Datta SSSK

Deposits

5393002

0.13

Ltd. Char. Trust

Current Assets

Current Liabilities &

1644853367

38.45

Closing stock

Provisions

Sugar & By product

Fixed Assets
Horticulture &
Garden

Profit & loss

19741203

0.46

4278316305

100

Account
Total

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

Assets of 2011-12
Cash in hand & with bank = 13317322/4278316305 = 0.31
Investment =2092890/4278316305 = 0.049
Advances & Receivables = 331320849/4278316305 = 7.74
Shri.Datta SSSK Ltd. Char. Trust = 122853386/4278316305 = 2.87
Current Assets = 163023951/4278316305 = 3.81
Closing stock Sugar & By product = 2133515010/4278316305 = 49.87
Fixed Assets = 1507001960/4278316305 = 35.22
Horticulture & Garden = 1974876/4278316305 = 0.046
Pre paid Expenses = 2900559/4278316305 = 0.068
Work in Process = 315502/4278316305 = 0.007

Liabilities of 2011-12
Paid up share capital = 337284312/4278316305 = 7.88
Reserve fund & other fund = 1099297125/4278316305 = 25.69
Secured loans = 1093000914/4278316305 = 25.55
Unsecured Loan = 78746382/4278316305 = 1.84
Deposits = 5393002/4278316305 = 0.13
Current Liabilities & Provisions = 1644853367/4278316305 = 38.45
Profit & loss Account = 19741203/4278316305 = 0.46
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

COMMON SIZE STATEMENT

OF 2013
Liabilities

2012-13(Amt.)

Paid up share

416804913.81

Assets

2012-

8.38

Cash in hand & with

13(Amt.)
4009229.67

0.081

2092890.00

0.042

capital
Reserve Fund &

1272171908.45

25.57

bank
Investment

Other Fund
Secured loans

1365268884.02

27.44

Advances &

521195708.33

10.47

Unsecured Loan

52426836.00

1.05

Receivables
Shri. Datta SSSK Ltd.

165174514.13

3.32

165768423.04

3.33

Deposits

1010269.90

0.020

Char. Trust
Current Assets

Current Liabilities

1846462752.98

37.11

Closing stock Sugar

2493122385.5

& By product

7
1620141970.5

& Provisions

Fixed Assets

Profit & loss

22003985.46

4976149550.62

Horticulture & Garden

2033915.86

0.041

Pre paid Expenses

2610513.50

0.052

100

Total

Assets of 2012-13
Cash in hand & with bank = 4009229.67/4976149550.62 = 0.081
A.G.I.M.S.,Sangli.

32.56

0.44

Account

Total

50.10

Page 32

4976149550.6
2

100

Shivaji University, Kolhapur.

Investment = 2092890.00/4976149550.62 = 0.042
Advances & Receivables = 521195708.33/4976149550.62 = 10.47
Shri. Datta SSSK Ltd. Char. Trust = 165174514.13/4976149550.62 = 3.32
Current Assets = 165768423.04/4976149550.62 = 3.33
Closing stock Sugar & By product = 2493122385.57/4976149550.62 = 50.10
Fixed Assets = 1620141970.52/4976149550.62 = 32.56
Horticulture & Garden = 2033915.86/4976149550.62 = 0.041
Pre paid Expenses = 2610513.50/4976149550.62 = 0.052

Liabilities of 2012-13
Paid up share capital = 416804913.81/4976149550.62 = 8.38
Reserve fund & other fund = 1272171908.45/4976149550.62 = 25.57
Secured loans = 1365268884.02/4976149550.62 = 27.44
Unsecured Loan = 52426836.00/4976149550.62 = 1.05
Deposits = 1010269.90/4976149550.62 = 0.020
Current Liabilities & Provisions = 1846462752.98/4976149550.62 = 37.11
Profit & loss Account = 22003985.46/4976149550.62 = 0.44

Cash in hand & with bank

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

0.35
0.3
0.25
0.2

Column2

0.15
0.1
0.05
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph shows that, the cash in hand & with bank percentage, in year 2010-11 at 0.062
& percentage is going up in the year 2011-12 at 0.31 but in the year 2012-13 is has
decreased again.
Investment

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

0.06
0.05
0.04
Column2

0.03
0.02
0.01
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph shows that, the percentage of investment in the year 2010-11 (0.056%), & in
the year 2011-12 (0.049) & in the year 2012-13 (0.042) has decreased. It shows a
decreasing trend.
Advances & Receivables

12
10
8
Column2

6
4
2
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph clearly show that, the Advances & Receivables for the year 2010-11, 2011-12
& 2012-13 are also increase at 5.54%, 7.74% & 10.47% respectively.
Charitable Trust, Dattanagar

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

3.5
3
2.5
2

Column2

1.5
1
0.5
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph clearly indicates that, the contribution of charitable trust, for the year 2010-11
is at 1.10% & it is less than the following two years that are, in the year 2011-12
percentage is 2.87% & in the year 2012-13 percentage is 3.32% respectively.
Current Assets

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0

Column2

2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
In the financial year 2010-11, the current assets was 4.28% which has decreased to 3.81%
in the year 2011-12 has further decreased to 3.33 in the year 2012-13.
Closing stock Sugar & By-product
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Shivaji University, Kolhapur.

50.1
50.05
50
49.95

Column2

49.9
49.85
49.8
49.75
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph shows that, the closing stock decreased from the year 2010-11 (50.08%) to
2011-12 (49.87%), but in the year 2012-13 the closing stock, again increased to (50.10%)

Fixed Assets

40
38
36
Column2

34
32
30
28
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
From the above graph it can inferred that the fixed assets has successively decreased from
the year 2010-11, 2011-12 & 2012-13 with 38.77%, 35.22% & 32.56% respectively.
The graph shows a downward trend in the amount of fixed assets.
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

Horticulture & Garden

0.05
0.04
0.03

Column2

0.02
0.01
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
From graph, it can be concluded that, the factory had been spending less and less
percentage on total assets viz. for the year 2010-11, 2011-12 & 2012-13, were 0.05%,
0.046% & 0,041% of the total assets respectively.
Prepaid expenses

0.07
0.06
0.05
0.04

Column2

0.03
0.02
0.01
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
In the financial year 2010-11, the prepaid expenses were 0.05% which increased to
0.068% in the year 2011-12 while it further decreased to 0.052% in the 2012-13 year of
the total assets.
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

Paid up Share Capital

9
8
7
6
5
4
3
2
1
0

Column2

2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
From graph of paid up share capital, it is to be concluded that it has been constantly
increasing in the years that is in 2010-11, 2011-12 & 2012-13. Paid up share capital were
6.55%, 7.88% & 8.38% in respect of total liabilities.
Reserve fund & other fund

25.7
25.65
25.6
Column2

25.55
25.5
25.45
25.4
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph of reserve fund & other fund indicates that, the reserve fund & other fund in
the year 2010-11 were 25.5% of the total liabilities which increased in year 2011-12 with

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

25.69% of the total liabilities which further again decreased in year 2012-2013 with
25.57% of the total liabilities.
Secured Loans

35
30
25
20

Column2

15
10
5
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph shows, the secured loan in the year 2010-11 with 31.13% decrease to 25.54%
in the year 2011-12, & again increase in year 2012-13 with percentage at 27.44%.
Unsecured loan

3
2.5
2
Column2

1.5
1
0.5
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation

A.G.I.M.S.,Sangli.

Page 40

Shivaji University, Kolhapur.

From graph, it can be predicted that, the unsecured loan been decreasing from the year
2010-11, 2011-12 & 2012-13 with the percentage 2.82%, 1.84% & 1.05% respectively.
Deposits

0.18
0.16
0.14
0.12
0.1

Column2

0.08
0.06
0.04
0.02
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph shows that, the deposits successively decreased from the year 2010-11 (0.17),
2011-12 (0.13) & 2012-13 (0.02) of the respective total liabilities.
Current liabilities & provisions

39
38
37
36
35
34
33
32
31
30

Column2

2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

In the financial year 2010-11, the current liabilities was 33.44%, which increased to
38.45% in the year 2011-12 while further decreases to 37.11 in the year 2012-13 of the
total liabilities.
Profit or Loss

0.5
0.4
0.3

Series 3

0.2
0.1
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
In the financial year 2010-11, the profit was 0.38% which increased to 0.46% in the year
2011-12 while further decreased to 0.44 in the year 2012-13. It is advisable to the
company to increase its Profit Ratio to be in a favorable position.
Current Assets
Table No. 1
Particulars
Current Assets
Cash in Hand & Bank
Investment
Stock
Opening Stock
Closing Stock
Other Receivable
Prepaid Expenses
Total

2010-11
159357100.53
2305293.27
2092890.00

2011-12
163023951
13317322
2092890

2012-13
165768423.04
4009229.67
2092890.00

1904091284.29
1813065708.07
65959274.72
1958045.50
3948829596.38

1813065708
2111645308
125440884
2900559
4231486622

2111645307.48
2402743560.13
229567736.53
2610513.50
4918437660.35

Current Liabilities
Table No. 2
Particulars
A.G.I.M.S.,Sangli.

2010-11

2011-12
Page 42

2012-13

Shivaji University, Kolhapur.

Current liabilities
Short Term Loan
Total

1244535918.14
973354815.74
2217890733.88

1644853367
1032267091
2677120458

1846462752.98
1232884715.02
3079347468

2011-12
4231486622
3924711017
306775606

2012-13
4918437660.35
4514388867.61
404048792.35

Quick Assets
Table No. 2
Particulars
Total Current Assets
Less Stock
Quick Assets

2010-11
3948829596.38
3717156992.36
231672604.02

Using the data from Balance sheet & Annexure, the calculation of ratio was
carried out. After calculating the ratios, the interpretation is given.
LIQUIDITY RATIO Current Ratio:Current Ratio = Current Assets / Current Liabilities
Table No. 1
Year
2010-11
2011-12
2012-13

Current Assets
3948829596.38
4231486622
4918437660.35

Current Liabilities
2217890733.88
2677120458.00
3079347468.00

CURRENT RATIO

A.G.I.M.S.,Sangli.

Page 43

Ratio
1.78
1.58
1.60

Shivaji University, Kolhapur.

1.8
1.75
1.7
1.65

Column2

1.6
1.55
1.5
1.45
2010-11

2011-12

2012-13

Interpretation
The ratio indicates the solvency of the company. It shows the proportion of current assets
to current liabilities. Normally, it is expected that current ratio should be 2:1, which
indicates that current assets should be twice as compared to current liabilities. 2010-11
ratios were well but 2011-12 current ratios have decreased but in 2012-13 it have again
slightly increased.

Quick Ratio:Quick Ratio = Quick Assets/Quick Liabilities

Table no. 2
Year
2010-11
2011-12
2012-13

Quick Assets
231672604.02
306775606
404048792.35

Quick Liabilities
1244535918.14
1644853367
1846462752.98

QUICK RATIO
A.G.I.M.S.,Sangli.

Page 44

Ratio
0.19
0.19
0.22

Shivaji University, Kolhapur.

0.22
0.22
0.21
0.21
0.2

Column2

0.2
0.19
0.19
0.18
0.18
2010-11

2011-12

2012-13

Interpretation
This ratio indicates the proportion of quick assets to quick liabilities. The ideal Acid test
ratio should be 1:1 which means that the quick assets should be equal to quick liabilities.
But above ratios are below 1:1 hence, the company increases the ratio within 2012-13 so,
it is advisable to the company to increase its Quick Ratio to be in a favorable position.
PROFITABILITY RATIO Net Profit Ratio:Net Profit Ratio = Net Profit/Net sales*100
Table No. 3
Year
2010-11
2011-12
2012-13

A.G.I.M.S.,Sangli.

Net Profit
14153531.38
5453557
2260782.11

Net Sales
4073817460.4
4265012760
4479938596.62

Page 45

Ratio
0.35
0.13
0.05

Shivaji University, Kolhapur.

NET PROFIT RATIO

0.35
0.3
0.25
0.2

Column2

0.15
0.1
0.05
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
This ratio shows the earnings left for shareholders as percentage of net sales. It measures
the overall efficiency of all the functions of business firm like production, administrative,
selling, financing, pricing, tax management etc. higher the ratio the better it is, because it
gives an idea of overall efficiency of the firm. As we see the trend in this ratio is
successively decreasing in the year 2010-11 with 0.35%, in the year 2011-12 with 0.13%
& in the year 2012-13 with 0.05% respectively.

Return on Total Assets:Return on Total Assets = Net Profit/Total Assets*100

Table No.4
Year
2010-11
2011-12

Net Profit
14153531.38
5453557

Total Assets
3722214051.49
4278316305

Ratio
0.38
0.13

2012-13

2262782.11

4976149550.62

0.045

RETURN ON TOTAL ASSETS

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

0.4
0.35
0.3
0.25
Column2

0.2
0.15
0.1
0.05
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
Return on assets crudely reflects how well the firm uses its assets in total. The higher
ratio means it is favorable to the firm as it indicates the firm is utilizing its assets
profitability. In the above chart the ratio is decreasing which is not favorable for the firm
hence it should be increased.

ACTIVITY RATIO Debtors Turnover Ratio:Debtors Turnover Ratio = Credit Sales/Average Account Receivable
Table No.5
Year
2010-11
2011-12
2012-13

A.G.I.M.S.,Sangli.

Credit Sales

Average Account

Ratio

4073817460.4
4265012760
4479938596.62

Receivable
206291353.20
331320849
521195708.33

19.75
12.87
8.60

Page 47

Shivaji University, Kolhapur.

DEBTORS TURNOVER RATIO

20
15
Column2

10
5
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
This ratio indicates the efficiency of the firm in collecting its receivables from its
customers to whom the firm has sold on credit. In most business situation it is necessary
to grant credit to customers. This could be either because of competition or because of the
customs of trade. A low ratio implies the company should re-assess its credit policies in
order to ensure the timely collection of imparted credit that is not earning interest for the
firm.
Debtors collection period:Debtors collection period = 12 months/Debtors Turnover Ratio
Table No. 6
Year
2010-11
2011-12
2012-13

Months

Debtors Turnover

Debtors Turnover

12
12
12

Ratio
19.75
12.87
8.60

Ratio (in month)

0.61
0.93
1.39

DEBTORS COLLECTION PERIOD

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

1.4
1.2
1
0.8

Column2

0.6
0.4
0.2
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
This ratio indicates the efficiency of the firm in collecting its receivables from its
customers to whom the firm has sold on credit. It also indicates how quickly the debtors
are turned into cash. The higher the ratio lower is the collection period. In the above
charts the debtors turnover ratio should be increased to reduce the collection period.

Current Assets Turnover Ratio:Current Assets Turnover Ratio = Sales/Current Assets

Table No.7
Year
2010-11
2011-12
2012-13

Sales
4073817460.4
4265012760
4479938596.62

Current Assets
3822785572.99
4489590217
5249112431.44

CURRENT ASSETS TURNOVER RATIO

A.G.I.M.S.,Sangli.

Page 49

Ratio
1.06
0.95
0.85

Shivaji University, Kolhapur.

1.2
1
0.8
Column2

0.6
0.4
0.2
0
2010-11 Year

2011-12 Year

2012-13 Year

Interpretation
The graph shows that the current assets turnover ratio has been goes on decreasing
successively from the year 2010-11, 2011-12 & 2012-13 with 1.06%, 0.95% & 0.85%
respectively.

Findings:

In the year 2011-12 sales were 4265012760 (426 crore), having closing stock
2111645308 (211 crore), but in 2012-13 sales increased by 214925836.62 (214
crore) with closing stock being 2402743560.13 (240 crore). Compared to the
previous year 2011-12 the sales in the year 2012-13 are less in proportion to the
closing stock. Reasons for such a high closing stock need to be investigated, as
sales have not risen in proportion to the stock available.

It can be observed that cash & bank balance, decreased in the year 2010-11 but
increased in the year 2011-12, but in the year 2012-13 the cash & bank balance

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

again decreased which is non-favorable to the factory, while advance expenses
increases in the year 2012-13, is in favor of the factory.

From the graph of profit & loss, it can be seen that, the profit has slightly
increased in the year 2011-12 & again has slightly decreased in 2012-13.

The Quick Ratio in year 2010-11(0.19), 2011-12(0.19) & 2012-13(0.22) is less

than the ideal quick ratio, so the company has unfavorable liquidity position.
Calculated in table no. 2

Net profit ratio is very low in financial year 2010-11, 2011-12, 2012-13 with the
ratio 0.35, 0.13 & 0.05 respectively.

The debtors turnover ratio has decreased in 2010-11 to 2012-13. Increases in this
ratio is beneficial for company because it indicates increase in the speed of
collection of credit sales & decreases debtors collection period, but in this case,
the debtors turnover ratio has decreased &debtors collection period is increased,
so it is unfavorable to the factory.

Suggestions:

The company should further study in depth the future financial position.

The company can carry out on a yearly or two yearly basis, financial ratio
analysis audits.

The company can decide & implement the necessary timely changes, to avoid the
future negative consequences.

A.G.I.M.S.,Sangli.

Page 51

Shivaji University, Kolhapur.

The financial condition of the company can be known with the help of the
estimated ratios & Common Size Statement.

The factory should increase their investments, to increase profit maximization.

It is suggested that factory try to reduce its debt & increase its capital.

It is suggested that factory try to reduce their operating costs, so this will result in
increase their net profit.

Increase the solvency condition of the factory for the sound financial
performance.

Conclusion:
From the finding & suggestions it can be concluded that:

A study of financial position analysis is very essential to understand the financial

performance of the factory.

It gives an insight of the factorys performance & efficiency at which it is carrying

out its business activities.

Here the financial position of the factory is sound which is found from common

A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

size statement & ratio analysis of the factory.

The factory has unfavorable net profit ratio in the year 2012-13 with only 0.05%
net profit.

It indicates the inefficiency in production & administrative cost.

Bibliography:
Books
Financial Management Khan M. Y & Jain P. K., 2007 by Tata McGraw Hill
Publishing Company Limited New Delhi.
Fifth Edition
Financial Management Pandey I. M. 2005 by Vikas Publishing House Pvt. Ltd.
Ninth Edition

Financial Management Chandra Prasanna, 2008 by Prassana Chandra, Tata Mc

McGraw Hill Publishing Company Limited New Delhi.
A.G.I.M.S.,Sangli.

Page 53

Shivaji University, Kolhapur.

Seventh Edition
Research Methodology - Kothari C.R. & Garg Gaurav, 2014 by New Age International
Publishers, Limited New Delhi.
Third Edition
Financial Reports
Financial reports from the year 2011-2013 of Shri Datta Shetkari Sahakari Sakhar
Karkhana Limited Shirol.
Website
www.investopedia.com
www.netMBA.com

Balance sheet
Liabiliti 2010-11
2011-12
2012-13
es
Paid up
share 243756890. 33728431 416804913.
capital
26
2
81

Assets

2010-11

2011-12

2012-13

Cash in
hand & 2305293.2 13317322 4009229.67
with
7
bank
Reserve
Investme
Fund & 949188669. 10992971 1272171908
nt
2092890 2092890 2092890.00
Other
4
25
.45
Fund
Secured
Advances
loans 1158867437 10930009 1365268884
&
206291353 33132084 521195708.
.74
14
.02
Receivab
.20
9
33
les
Unsecur
ShriDatta
ed Loan 105065928. 78746382 52426836.0 SSSK 40857043. 12285338 165174514.
00
0
Ltd.
69
6
13
Char.
Trust
A.G.I.M.S.,Sangli.

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Shivaji University, Kolhapur.

Deposit
s

Current
Assets 159357100 16302395 165768423.
.53
1
04
Current
1
Closing
Liabiliti 1244535918 16448533 846462752. stock
186415467 21335150 2493122385
es &
.14
67
98
Sugar &
7
10
.57
Provisio
By
ns
product
6493561.9

5393002 1010269.90

Fixed
Assets

144326174 15070019 1620141970

2
60
.52

Horticult
ure
1935905.8 1974876 2033915.86
&Garden
6
Profit &
loss
14305646.0 19741203 22003985.4
Account
5
6

Pre
paid
1958045.5 2900559 2610513.50
Expenses
Work in
Process

Total

3722214051 42783163 4976149550

05
.62

Total

315502
372221405 42783163 4976149550
1
05
.62

Profit & Loss Account

Expenditure

2010-11

2011-12

2012-13

Receipts

Cane
purchase & 32418930 39447186 39566663
12.12
17
66.58
related
expenses

Sugar
Production
Value
(including
Duties)
Salary &
By-product
27543783 25998623 26489381 Production
Wages
7.01
7
5.29
value
(including
duties)
Stores &
Co21287970 23266391 22214958 generation
repairs
1.49
4
6.30
Receipts
Production &
Other Income
23596006 24716977 22463513
sales
.72
.06
expenses
Excise Duty
By-product
A.G.I.M.S.,Sangli.

Page 55

2010-11

2011-12

2012-13

3786688 435847 450672

870.95
0012
8123.22

1961030
13.23

205122
348

264308
726.05

4583023 669141
9.50
43

321090
97.90

8184180 151857
7.45
718

913218
71.99

Shivaji University, Kolhapur.

16287164 15510714 15391956
7.92
6
1.23

2363985 102953
6.57
2

613276
8.28

Administrati
Petrol Pump
727338
1222922.
ve expenses 54134776 64242099 76427087
36
Profit
.25
.01
19

134920
1.14

Profit
(Distillery)

63474650
48405111
55243145
.00
.00
Depreciation 50608547 64013897 74761966
.00
.00

Interest

Price
Fluctuation
Fund
Project Fund

15000000 30000000 40000000

.00
.00
21277000 20000000
.00

40000000
.00

Provision for
loan
repayment
Net profit 14153531
Total

5435557 2262782.
.38
11
41353267 4856127589 49019497
09.89
88.58

A.G.I.M.S.,Sangli.

Total

Page 56

4135326 48561275 490194

709.89
9788.58
89