Summer Training Report

At

“FINANCIAL PERFORMANCE ANALYSIS WITH

RATIO ANALYSIS WITH REFERENCE TO SOUTH
EASTERN COAL FIELDS LIMITED”
BILASPUR (C.G.)
Submitted for the
Partial fulfillment of the requirement for the award of Degree of
Master of Business Administration (MBA)

Submitted By:
ARCHANA PATEL

Roll Number:
18605008
2019-20

Department of Management Studies

GURU GHASIDAS VISHWAVIDYALAYA, BILASPUR (C. G.) 495009
(A Central University established by the Central Universities Act, 2009)

1
 DECLARATION

I, ARCHANA PATEL a student of MBA III semester in the year 2019-20 having
Roll. No. 18605008 herebydeclare that, I have undergone training at “SOUTH
EASTERN COALFIELDS LIMITED”, BILASPUR (C.G). This
report is an original work carried out by me and the report has not been submitted
to any other University for
the award of any degree or diploma.

Date: ARCHANA PATEL

Place: BILASPUR (C.G) MBA III Semester

2
 ACKNOWLEDGEMENT

Our efforts are never really individual they are the results of the collective inputs
of several people who have inspired, supported and empowered us in many ways. I
would like to thank all the people who have, directly or indirectly contributed to
this project.
Who I am, is a result of all the people who have nurtured my intellect and have
taught me to think and to rethink, to question inquire and to challenge! I am
indebted to my parents, who have always taught me to excel. My teachers –too
because they touched my life and left me richer in learning.
My special thanks to Mr. P.C. Saini, Dy Manager (F) S.E.C.L. Bilaspur for their
valuable guidance during the whole project. They always motivated me go get
more then expectation and taught me, how to analyze the financial statements and
how the investments are being made by the company. I have special regard to him
for sharing his most valuable time with me.

3
 INDEX
Sr. No. Topic Pg. No.
1 Introduction 4
2 Company 8
profile
3 Ratio analysis 12
4 Research 18
methodology
5 Data 20
interpretation
6 Conclusion 31

4
 INTRODUCTION
1.1 FINANCE

Finance is a field that is concerned with the allocation (investment) of assets and liabilities over
space and time, often under conditions of risk or uncertainty. Finance can also be defined as the
art of money management.Participants in the market aim to price assets based on their risk level,
fundamental value and their expected rate of return. Finance can be split into three sub-
categories: public finance, corporate finance and personalfinance.
Financial Management is a vital activity in any organization. It is the process of planning,
organizing, controlling and monitoring financial resources with a view to achieve organizational
goals and objectives. It is an ideal practice for controlling the financial activities of an
organization such as procurement of funds, utilization of funds, accounting, payments, risk
assessment and every other thing related money.

1.2 FINANCIAL MANAGEMENT

Financial Management means planning,organizing, directing and controlling the financial

activities such as procurement and utilization of funds of the enterprise. It means applying
general management principles to financial resources of the enterprise.
1 “financial management is concerned with the efficient use of an important economic resource,
namely, capital funds” Solomon

5
2rst“ financial management is concerned with the managerial decision that result in the
acquisition and financing of short –term and long- term credit for the firm”
Finance function is the most importance function of a business. Finance is, closely connected
with production, marketing and other activities. In absence of finance, all these activities come to
halt. In fact, only with finance, a business activity can be commenced, continued and expanded.
Finance exists everywhere, be it production, marketing human recourses development or
undertaking research activity, in modern business, in all activities as no activity can exist without
funds. Financial decisions or finance function are closely inter-connected. All decisions mostly
involve finance. When a decision involvefinance, it is a financial decision in a business firm. in
all the following financial areas of decision-making, the role of finance manager is vital.
We can classify the finance function or financial decision into four major groups.

Investment decision or long-term assets mix decision

Finance decision or capital mix decision

Liquidity decisions or short-term assets mix decision

Dividend decision or profit allocation decision

1.3 FINANCIAL ANALYSIS

Financial analysis is the process of identifying the financial strength and weaknesses of the firm
and establishing relationship between the items of the balance sheet and profit & loss account.
Financial ratio analysis is the calculation and comparison of ratios, which are derived from the
information in a company’s financial statements. The level and historical trends of these ratios
can be used to make inferences about company’s financial condition, its operations and
attractiveness as an investment. The information in the statements is used by

Trade creditors’, to identify the firm’s ability to meet their claims eliquidity position of the
company

6
 Investors to know about the present and future profitability of the company and its financial
structure.

Management, in every aspects of the financial analysis. It is the responsibility of the

management to maintain sound financial condition in the company.

TOOLS FOR FINANCIAL ANALYSIS

Comparative statements

Common size statement

Ratios

Trend analysis

Fund flow statement, etc

This project focuses on the trends analysis, comparative, common size statement and ratio
analysis as tool for assessment and evaluation of finance performance

1.5 OBJECTIVES

The main objectives of the study are as follow

1) To evaluate the financial performance of the company- SECL by using ratio as a yardstick to
measure the efficiency of the company

2) To understand the liquidity and profitability position of the company during the study period.

3) To determine the operational efficiency by calculating the operating and activity ratios.

7
 COMPANY PROFILE

Commercial exploitation began in 1774, John Sumner and Suetonius Grant Heatly of the East
India Company setting up operations in the Raniganj Coalfield along the Western bank of river
Damodar. Due to a lack of demand growth was sluggish until 1853, with the introduction of
steam locomotives to the fast-expanding rail system.
As late as 1895, India imported large quantities of coal from Britain, but as domestic production
increased and was found to be suitable for locomotives and ships, demand for coal imports
declined dramatically.
After India became independent, the new government stressed the rapid growth of heavy
industry. The National Coal Development Corporation was founded in 1956 (as a Government of
India undertaking). The founding of this body was major step in the development of an
indigenous Indian coal sector. Especially important was the development of the vast Dhanbad
coal-mining complex with such major operations as Tata Steel, BCCL, ECL and IISCO (Indian
Iron And Steel Company), as well as the Indian School of Mines to train engineers, geologists
and managers.

8
Coal India Limited (CIL) as an organized state owned coal mining corporate came into being in
November 1975 with the government taking over private coal mines. With a modest production
of 79 Million Tonnes (MTs) at the year of its inception CIL today is the single largest coal
producer in the world. Operating through 81 mining areas CIL is an apex body with 7 wholly
owned coal producing subsidiaries and 1 mine planning and consultancy company spread over 8
provincial states of India. CIL also fully owns a mining company in Mozambique christened as
'Coal India Africana Limitada'. CIL also manages 200 other establishments like workshops,
hospitals etc. Further, it also owns 26 technical & management training institutes and 102
Vocational Training Institutes Centres. Indian Institute of Coal Management (IICM) as a state-
of-the-art Management Training 'Centre of Excellence' - the largest Corporate Training Institute
in India - operates under CIL and conducts multi disciplinary management development
programmes. CIL having fulfilled the financial and other prerequisites was granted the
Maharatnarecognition in April 2011. It is a privileged status conferred by Government of India
to select state owned enterprises in order to empower them to expand their operations and
emerge as global giants. So far, the select club has only five members out of 217 Central Public
Sector Enterprises in the country.

9
South Eastern Coalfields Limited is the largest coal producing company in the country. The
coal reserves of South Eastern Coalfields Limited are spread over two States, namely,
Chhattisgarh and Madhya Pradesh and the Company is operating 89 mines with 35 Mines in the
State of Madhya Pradesh and 54 Mines in the State of Chhattisgarh besides a Coal Carbonization
Plant namely Dankuni Coal Complex (DCC) at Dankuni in West Bengal on lease basis from
Coal India Limited.
VISION
The vision of South Eastern Coalfields Limited is to be the leading energy supplier in the
country, by adopting the best practices and leading technology from mine to technology.
MISSION
The mission of South Eastern Coalfields Limited is to produce and market the planned quantity
of coal and coal products efficiently and economically with due regard to safety, conservation
and quality.

2.3.1 PRODUCTS OF THE COMPANY

 Coking coal
 Semi coking coal
 Non-coking coal

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  LTC coal
 Coal fine/coke fine
 Tar/ heavy oil/ light oil/ soft pitch

2.3.2 DIVERSIFIED ACTIVITIES OF SECL

 Mining and agglomeration of hard coal ( including mining of anthracite and bituminous)
 Cleaning, sizing and pulverizing to improve quality
 Operations to recover hard coal from culm banks

 Manufacture of briquettes

2.3.3 SUBSIDIARIES OF SECL

 Chhattisgarh east railway limited (CERL)

 Chhattisgarh east-west railway limited (CEWRL)

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 RATIO ANALYSIS
An analysis of financial statements on the basis of ratios is known as ratio analysis. A ratio is
mathematical relationship between two or more related items taken from the financial statement.
In fact, ratio analysis involves the process of computing, determining and presenting the relation
of items and group of items of the financial statement. It also embraces the comparison and
interpretation of these ratios and use of them for future projection.

Ratio analysis is the process of determining and interpreting numerical relationships based on
financial statements. A ratio is a statistical yardstick that provides a measure of the relationship
between two variables or figures.
This relationship can be expressed as a percent or as a quotient. Ratios are simple to calculate
and easy to understand. The persons interested in the analysis of financial statements can be
grouped under three heads,
I) owners or investors
ii) creditors and
iii) financial executives.
Although all these three groups are interested in the financial conditions and operating results, of
an enterprise, the primary information that each seeks to obtain from these statements differs
materially, reflecting the purpose that the statement is to serve.
Investors desire primarily a basis for estimating earning capacity. Creditors are concerned
primarily with liquidity and ability to pay interest and redeem loan

12
within a specified period. Management is interested in evolving analytical tools that will measure
costs, efficiency, liquidity and profitability with a view to make intelligent decisions.

TYPES OF RATIOS:

1 – Profitability Ratios
This type of ratio analysis suggests the Returns that are generated from the Business with the
Capital Invested.

Gross Profit Ratio

It represents the operating profit of the company after adjusting the cost of the goods that are
been sold. Higher the gross profit ratio, lower the cost of goods sold and greater satisfaction for
the management.

Gross Profit Ratio Formula = Gross Profit/Net Sales*100.

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Net Profit Ratio

It represents the overall profitability of the company after deducting all the cash & no cash
expenses. Higher the net profit ratio, higher the net worth and stronger the balance sheet.

Net profit ratio formula= net profit/net sales *100

Operating Profit Ratio

It represents the soundness of the company and the ability to pay off its debt obligations.
Operating Profit Ratio Formula = Ebit/Net sales*100

Return on Capital Employed

ROCE represents the profitability of the company with the capital invested in the business.

Return on Capital Employed Formula = Ebit/Capital Employed

2 – Solvency Ratios
These ratio analysis types suggest whether the company is solvent & is able to pay off the debts
of the lenders or not.

Debt-Equity Ratio

This ratio represents the leverage of the company. A low d/e ratio means that the company has a
lesser amount of debt on its books and is more equity diluted. A 2:1 is an ideal debt-equity ratio

to be maintained by any company.

Debt Equity Ratio Formula = Total Debt/Shareholders Fund
Where, total debt = long term + short term + other fixed payments shareholder funds = equity
share capital + reserves + preference share capital – fictitious assets.

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Interest Coverage Ratio

It represents how many times the company’s profits are capable of covering its interest expense.
It also signifies the solvency of the company in the near future since higher the ratio more
comfort to the shareholders & lenders regarding servicing of the debt obligations and smooth
functioning of the business operations of the company.
Interest Coverage Ratio Formula = Ebit/Interest Expense

3 – Liquidity Ratios

These ratios represent whether the company has enough liquidity to meet its short term
obligations or not. Higher liquidity ratios more cash-rich the company.

Current Ratio

It represents the liquidity of the company in order to meet its obligations in the next 12 months.
Higher the current ratio, stronger the company to pay its current liabilities. However, a very high
current ratio signifies that a lot of money is been stuck in receivables that might not realize in the
future.

Current Ratio Formula = Current Assets/Current Liabilities

Quick Ratio

It represents how cash rich is the company to pay off its immediate liabilities in the short term.

Quick Ratio Formula = Cash & Cash Equivalents+MarketableSecurities+Accounts

Receivables/Current Liabilities

4 – Turnover Ratios
Theses ratios signifies how efficiently the assets and liabilities of the company are been used to
generate revenue.

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Fixed Assets Turnover Ratio

Fixed asset turnover represents the efficiency of the company to generate revenue from its assets.
In simple terms, it is a return on the investment in fixed assets. Net Sales = Gross Sales –
Returns. Net Fixed Assets = Gross Fixed Assets –Accumulated Depreciation.
Average Net Fixed Assets = (Opening Balance of Net Fixed Assets + Closing Balance of Net
Fixed Assets)/2.

Fixed Assets Turnover Ratio Formula = Net Sales / Average Fixed Assets

Receivable Turnover Ratio

Receivables Turnover Ratio reflects the efficiency of the company to collect its receivables. It
signifies how many times the receivables are been converted to cash. A higher
receivable turnover the ratio also indicates that the company is collecting money in cash.

Receivables Turnover Ratio Formula = Net Credit Sales/Average Receivables

5 – Earning Ratios
This ratio analysis type speaks about the returns that the company generates for its shareholders
or investors.

Return on Net Worth

It represents how much profit the company generated with the invested capital from equity
& preference shareholders both.

Return on Net Worth Formula = Net Profit/Equity Shareholder Funds. Equity Funds =
Equity+Preference+Reserves -Fictitious Assets.

Standards for comparison:

For making a proper use of ratios, it is essential to have fixed standards for comparison. A ratio
by itself has very little meaning unless it is compared to some appropriate standard. Selection of
proper standards of comparison is a most important element in ratio analysis. The four most
common standards used in ratio analysis are; absolute, historical, horizontal and budgeted.

16
Absolute standards are those which become generally recognised as being desirable regardless of
the company, the time, the stage of business cycle, or the objectives of the analyst. Historical
standards involve comparing a company’s own’ past performance as a standard for the present or
future.
In Horizontal standards, one company is compared with another or with the average of other
companies of the same nature.
The budgeted standards are arrived at after preparing the budget for a period Ratios developed
from actual performance are compared to the planned ratios in the budget in order to examine the
degree of accomplishment of the anticipated targets of the firm.

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 RESEARCH METHODOLOGY

3.1 RESEARCH FRAMEWORK

This study is based on the data about S.E.C.L for detailed study of its financial statements,
documents and system ratios to recognize and determined the position of the company.

3.2 RESEARCH DESIGN

A research design constitutes of decisions regarding what, where, when, how much, by what
means this research have been completed. The research design includes an outline of what the
researchers do from writing of hypothesis and its operational implication to final analysis of data.
Fundamental to the success of any formal research report is sound research design. It is a
conceptual structure in which research is conducted. It includes the blue print for collection,
measurement and analysis of data.
The research design for this research gives the complete detail about how the data has been
collected and it’s juggling for critical and close analysis about S.E.C.L.

3.3 SOURCES OF DATA

Sources of data can be of two types first the primary data which, for this project was collected
personally and used for study and reach the objectives mentioned earlier.
The primary data includes interviews, observations and questionnaire.

18
While collecting the primary data I had a chance to ask questions personally from head of the
finance department and other officials of the company itself and the data I collected gave me
details about:-
The beginning and history of S.E.C.L.

The mission and vision of the company.

Number of staffs working for different departments.

Areas of operation.

Other company related information.

Second the secondary data which was already prepared so these data was pre compiled and was
used directly for study and reach the objectives of this project. These data were collected from
the annual reports of the company.
These data were collected through the study of the financial statements already existed in the
company in the form of printed or digital files reserved for future references. I selected these
files because of their reliability and suitability and I was sure about their accuracy.
These files included:-
1. Financial statements.

2. Annual reports of the company.

3. Financial reports.

4. Other relevant reports by finance department.

The objective of this study is to examine the effect of accounting information of earning per
share by using various ratios. To measure the impact of financial ratios on earning per share
multiple regression method and step wise regression models are used by taking profitability,
liquidity, debt to equity and other important ratios derived from firm’s financial statements. The
result shows that profitability ratio, market ratio, cash flow from operations and leverage ratios
have significant impact over the earning per share.

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HYPOTHESIS

A hypothesis (plural hypotheses) is a proposed explanation for a phenomenon. For a hypothesis

to be a scientific hypothesis, the scientific method requires that one can test it. Scientists generally
base scientific hypotheses on previous observations that cannot satisfactorily be explained with the
available scientific theories. Even though the words "hypothesis" and "theory" are often used
synonymously, a scientific hypothesis is not the same as a scientific theory. A working hypothesis is
a provisionally accepted hypothesis proposed for further research,[1] in a process beginning with an
educated guess or thought.[2]
A hypothesis is a speculation or theory based on insufficient evidence that lends itself to further
testing and experimentation. With further testing, a hypothesis can usually be proven true or false.
Let's look at an example. Little Susie speculates, or hypothesizes, that the flowers she waters with
club soda will grow faster than flowers she waters with plain water. She waters each plant daily for a
month (experiment) and proves her hypothesis true!
Null hypothesis
A null hypothesis is a hypothesis that says there is no statistical significance between the two
variables in the hypothesis. It is the hypothesis that the researcher is trying to disprove. In the
example, Susie's null hypothesis would be something like this: There is no statistically significant
relationship between the type of water I feed the flowers and growth of the flowers. A researcher is
challenged by the null hypothesis and usually wants to disprove it, to demonstrate that there is a
statistically-significant relationship between the two variables in the hypothesis.
Alternate hypothesis
An alternative hypothesis simply is the inverse, or opposite, of the null hypothesis. So, if we
continue with the above example, the alternative hypothesis would be that there IS indeed a
statistically-significant relationship between what type of water the flower plant is fed and growth.
More specifically, here would be the null and alternative hypotheses for Susie's study:
Null: If one plant is fed club soda for one month and another plant is fed plain water, there will be no
difference in growth between the two plants.
Alternative: If one plant is fed club soda for one month and another plant is fed plain water, the
plant that is fed club soda will grow better than the plant that is fed plain water.
f- test
An “F Test” is a catch-all term for any test that uses the F-distribution. In most cases, when people talk
about the F-Test, what they are actually talking about is The F-Test to Compare Two
Variances. However, the f-statistic is used in a variety of tests including regression analysis, the Chow
test and the Scheffe Test (a post-hoc ANOVA test).

General Steps for an F Test

If you’re running an F Test, you should use Excel, SPSS, Minitab or some other kind of technology to run
the test. Why? Calculating the F test by hand, including variances, is tedious and time-consuming.
Therefore you’ll probably make some errors along the way.
If you’re running an F Test using technology (for example, an F Test two sample for variances in Excel), the
only steps you really need to do are Step 1 and 4 (dealing with the null hypothesis). Technology will
calculate Steps 2 and 3 for you.
1. State the null hypothesis and the alternate hypothesis.
2. Calculate the F value. The F Value is calculated using the formula F = (SSE 1 – SSE2 / m) / SSE2 / n-k, where
SSE = residual sum of squares, m = number of restrictions and k = number of independent variables.

20
 3. Find the F Statistic (the critical value for this test). The F statistic formula is:
F Statistic = variance of the group means / mean of the within group variances.
You can find the F Statistic in the F-Table.
4. Support or Reject the Null Hypothesis.

F Test to Compare Two Variances

A Statistical F Test uses an F Statistic to compare two variances, s1 and s2, by dividing them. The result is
always a positive number (because variances are always positive). The equation for comparing two
variances with the f-test is:
F = s21 / s22
If the variances are equal, the ratio of the variances will equal 1.

F Test to compare two variances by hand: Steps

Warning: F tests can get really tedious to calculate by hand, especially if you have to calculate the
variances. You’re much better off using technology (like Excel — see below).
These are the general steps to follow. Scroll down for a specific example (watch the video underneath the
steps).

Step 1: If you are given standard deviations, go to Step 2. If you are given variances to compare, go to Step 3.
Step 2: Square both standard deviations to get the variances. For example, if σ1 = 9.6 and σ2 = 10.9, then the
variances (s1 and s2) would be 9.62 = 92.16 and 10.92 = 118.81.
Step 3: Take the largest variance, and divide it by the smallest variance to get the f-value. For example, if your
two variances were s1 = 2.5 and s2 = 9.4, divide 9.4 / 2.5 = 3.76.
Why? Placing the largest variance on top will force the F-test into a right tailed test, which is much easier to
calculate than a left-tailed test.
Step 4: Find your degrees of freedom. Degrees of freedom is your sample size minus 1. As you have two
samples (variance 1 and variance 2), you’ll have two degrees of freedom: one for the numerator and one
for the denominator.
Step 5: Look at the f-value you calculated in Step 3 in the f-table. Note that there are several tables, so you’ll
need to locate the right table for your alpha level. Unsure how to read an f-table? Read What is an f-table?.
Step 6: Compare your calculated value (Step 3) with the table f-value in Step 5. If the f-table value is
smaller than the calculated value, you can reject the null hypothesis.

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DATA INTEPRETATION AND ANALYSIS OF BALANCE
SHEET 2017-18

PROFITABILITY RATIO

1. Gross profit ratio:-

Gross profit\ net sales*100
Gross profit= sales- (purchase + direct expense)
Sales = 19324.03
Purchase= closing stock- opening stock
128.57-627.75= 499.18
Direct expenses= 17078.38
GP = 19324.03-(499.18+17078.38)
= 1746.47
GP RATIO= 1746.47/19324.03*100
=9.03%
Gross profit ratio of 2016-17 = 17.93%
300.00%

250.00%

200.00%

150.00% Column
2
100.00%

50.00%

0.00%
2016-17 2017-18

22
2. Net profit ratio:-
Net profit/net sales*100
=2370.25/19324.03*100
=12.2%
Net profit ratio for 2016-17 = 11.02%
12.20%

12.00%

11.80%

11.60%

11.40% NP RATIO
Column1
11.20%
Column2
11.00%

10.80%

10.60%

10.40%
2016-17 2017-18

3. Operating profit ratio:-

EBIT/net sales *100
EBIT= net profit + tax + interest
=2370.25+1450.72+(nil)
=3820.97
OPR= 3820.97/19324.03*100
=19.7%
Operating profit ratio of 2016-17 = 17.23%

23
 19.50%

19.00%

18.50%

Column2
18.00%
Column1
17.50% OP RATIO

17.00%

16.50%

16.00%
2016-17 2017-18

4. Return on capital employed:-

EBIT/capital employed
Capital employed= total assets – current liabilities
=25753.59-11089.34
=14664.25
ROCE= 3820.97/14664.25
=0.360
Return on capital employed of 2016-17 = 0.234

24
 100%
90%
80%
70%
60% Column2

50% Column1

40% ROCE

30%
20%
10%
0%
2016-17 2017-18

SOLVENCY RATIO

1. Debt- equity ratio:-

Total debt/shareholder’s fund
Total debt= long term borrowing + long term provision
=(nil) + 10672.01
DER= 10672.01/3238.56
=3.395
Debt equity ratio of 2016-17 = 2.851

25
 3.5

3.4

3.3

3.2

3.1
Column2
3
Column1
2.9 DER
2.8

2.7

2.6

2.5
2016-17 2017-18

2. Interest coverage ratio:-

EBIT/interest expenses
EBIT= 3820.97
Interest expense= not mentioned in balance sheet

LIQUIDITY RATIO

1. Current ratio:-
Current assets/current liabilities
=14967.35/11089.34
=1.349
Current ratio of 2016-17 = 1.432

26
 1.44

1.42

1.4

1.38 Column2
Column1
1.36
CR

1.34

1.32

1.3
2016-17 2017-18

2. Quick ratio:-
Quick assets/current liabilities
Quick assets= current assets – stock – prepaid expense
=14967.35-627.75
=14339.6
QR= 14339.6/11089.34
=1.293
Quick ratio of 2016-17 = 1.248

27
 1.3

1.29

1.28

1.27
QUICK RATIO
1.26
Column2

1.25 Column3

1.24

1.23

1.22
2016-17 2017-18

TURNOVER RATIO

1. Fixed assets turnover ratio:-

Net sales/average fixed assets
Average fixed assets= opening fixed assets + closing fixed assets /2
=5554.67+4520.35/2
=7814.84
FATOR= 19324.03/7814.84
=2.47
Fixed assets turnover ratio of 2016-17 = 2.09

28
 2.5

2.4

2.3

Series 3
2.2
Column1
FATOR
2.1

1.9
2016-17 2017-18

2. Inventory turnover ratio:-

Cost of goods sold/average inventories
Average inventories= opening inventory + closing inventory/2
=627.75+128.57/2
=378.16
Cost of goods sold= opening inventory + purchase – closing inventory
=627.75+(499.18-128.57)
=998.36
ITOR= 998.36/378.16
=2.640
Inventory turnover ratio of 2016-17 = 0.096

29
 3

2.5

Column2
1.5
Column1
ITOR
1

0.5

0
2016-17 2017-18

3. Receivables turnover ratio:-

Net credit sales/average receivables
Average receivables= opening receivable + closing receivable/2
=1461.20+3664.69/2
=3293.54
RTOR= 19324.03/3293.54
=5.86
Receivable turnover ratio of 2016-17 = 6.88

30
 7

6.8

6.6

6.4

6.2 Column2
Column1
6
RTOR
5.8

5.6

5.4

5.2
2016-17 2017-18

EARNING RATIO

1. Return on net worth:-

Net profit/equity shareholder’s fund
=2370.25/3238.56
=0.731
Return on net worth of 2016-17 = 0.608

31
 0.8

0.7

0.6

0.5
Column2
0.4
Column1

0.3 returm om met worth

0.2

0.1

0
2016-17 2017-18

FINDINGS OF SAMPLE TAKEN AS TWO GROUPS

Null hypothesis = as per the observation the value of
current ratio is decreasing as compared in 2 groups
Alternate hypothesis = as per the observation the current
ratio is not decreasing on comparing group A and group B
We have tested the hypothesis through f-test

32
GROUP A
A (year) x X – x^ (x – x^) sq.
2017-18 1.34 -0.04 0.0016
2016-17 1.43 0.05 0.0025
Total = 2.77 Total=
0.0041

X^= mean
( mean = 2.77/2 = 1.38)

GROUP B
B (year) x x- x^ (x- x^) sq.
2015-16 1.17 -0.04 0.0016
2014-15 0.02 -1.55 2.4025
2013-14 3.52 1.95 3.8025
Total= 4.71 Total =
6.2066
X^ = mean
( mean = 4.71/3 =1.57)

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F VALUE = S1 (sq.) /S2 (sq.)
S (group A) =total (x-x^)sq, / N
=0.0041/2
=0.00205
S (group B) = total (x-x^) sq. / N
= 2.2066/3
= 2.06886
Higher s = S1
Lower s = S2
Therefore, S1 = s (group B) and S2 = s(group A)
V1= N-1, V2= N-1
V1 for S1 and V2 for S2
V1= 3-1= 2, V2 = 2-1=1
F value = S1 (Sq.) / S2 (sq.)
= 4.2801816996/0.0000042025
= 1018484.64
As per the tabulated value @5% value of significance the
value is 5.79
Which implies value of 5% level of significance < f Value.

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Hence our null hypothesis is rejected and alternate
hypothesis is accepted.

CONCLUSION
In the end it can be concluded that the financial performance analysis in the company like
SECL cannot be estimated only on the basis of trend analysis as it represents just a part of
it and not also on the basis fund allocation as there are various dimensions of financial
aspect of a company. It was a pleasure to work in SECL and it helped me to understand
about the practical implication of the actual work field.

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