Journal of Interdisciplinary Cycle Research ISSN NO: 0022-1945

A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF

ALANGULAM PRIMARY AGRICULTURE CO-OPERATIVE CREDIT
SOCIETY, ALANGULAM, TIRUNELVELI DISTRICT
-----------------------------------------------------------------------------------------------------------
Mr. R. RAMACHANDRAN, MBA., M.Phil., M.Sc (Psychology).,
Ph.D., Research Scholar,
Department of Management Studies,
Madurai Kamaraj University, Madurai – 625021.
E-mail: [email protected] Mobile: 9566531892

Mr. P. KANDHAKUMAR, MBA., M.Phil.,

Assistant Professor,
Department of Business Administration,
St. Xavier's College (Autonomous), Palayamkottai – 627002
E-mail: [email protected] Mobile: 9159594670

Dr. P. KANNADAS, MBA., M.Phil., PhD.,

Associate Professor,
Department of Management Studies,
Madurai Kamaraj University, Madurai – 625021.
E-mail: [email protected] Mobile: 9443030073

ABSTRACT:
The present study deals with the “Financial Performance Evaluation of Alangulam
Primary Agriculture Co-Operative Credit Society”. In this present era of Liberalization,
Privatization and Globalization the Market has become globally competitive; hence the survival
of an enterprise depends upon the efficiency and accuracy. Hence, it is necessary to evaluate the
financial performance to know whether the companies stand in the market and how they can
improve further in the future by knowing their shortcomings. In the present study, the
Researcher has discussed the Liquidity, Profitability, Efficiency and Leverage of both the
companies to arrive at any conclusion.

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This research is undertaken A study on Financial Performance Analysis of Alangulam

Primary Agriculture Cooperative Credit Society (PACCS).The importance is based on the
objectives of financial performance. The study of analysis is on financial performance of PACCS
was under taken on the bases of last 5 years annual report data.The scope of the study consists of
secondary data from the PACCS that is the balance sheet from 2014-2019 for five years. The
research methodology consists of design, data collections and tools for analyzing the past and
future performance of PACCS, Financial analysis. The various tools used for a ratio analysis,
regression analysis, comparative balance sheet, common size balance sheet, time series analysis.
Through the analysis of the study, it finds out the increase and decrease position in particular
field of the PACCS.

Keywords: Profitability, Efficiency, Leverage, Liberalization, Privatization and Globalization

MEANING OF FINANCE PERFORMANCE ANALYSIS:

Financial performance analysis is the process of identifying the financial strengths and
weaknesses of the firm by properly establishing the relationship between the items of balance
sheet and profit and loss account. It also helps in short-term and long-term forecasting and
growth can be identified with the help of financial performance analysis.
The dictionary meaning of „analysis‟ is to resolve or separate a thing in to its element or
components parts for tracing their relation to the things as whole and to each other.

FINANCIAL PERFORMANCE:
Information about financial performance of an enterprise during the financial period is
primarily provided in an income statement or profit and loss account. This shows income,
expenditure and finally net profit.

FEATURES OF FINANCIAL STATEMENTS

The following are the features of financial statements:
 Financial statements are always expressed in monetary terms. They ignore qualitative
aspects. In other words, the non-monetary events do not come under the scope of
financial statements.

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Journal of Interdisciplinary Cycle Research ISSN NO: 0022-1945

 Financial statements are always prepared for a certain period of time. They generally
cover the period of one year.
 Financial statements are historical in nature since they always present the past
performance. Hence, they do not carry the futuristic approach.

SIGNIFICANCE OF FINANCIAL PERFORMANCE ANALYSIS:

Interest of various related groups is affected by the financial performance of a firm.
Therefore, these groups analyze the financial performance of the firm.
The type of analysis varies according to the specific interest of the party involved.
Trade creditors:
Interested in the liquidity of the firm (appraisal of firm‟s liquidity)
Bond holders:
Interested in the cash-flow ability of the firm (appraisal of firm‟s capital structure, the
major sources and uses of funds, profitability over time, and projection of future profitability)
Investors:
Interested in present and expected future earnings as well as stability of these earnings
(appraisal of firm‟s profitability and financial condition)
Management:
Interested in internal control, better financial condition and better performance (appraisal
of firm‟s present financial condition, evaluation of opportunities in relation to this current
position, return on investment provided by various assets of the company, etc)
ABOUT THE ALANGULAM PRIMARY AGRICULTURAL COOPERATIVE CREDIT
SOCIETY LTD:
Alangulam Primary Agricultural Cooperative Credit society on 03.12.1958, 358
members were registered on 30.10.1958 with the Rs .6150 / - to start his career with the 4463
stock 'A' Class members, 25060 'B' Class members and above along with Rs .77.33 lakh stock
Alangulam, Nallur, Kuruvankottai, Kurippankulam one of the new branch is located within the
Nallur village panchayats affairs launched, has fared better. Society building with a modern
facade, the profitability is implemented in the following 29 years: Rs.38.80 core as working
capital, for 6 people, with excellent staff service is not on time.

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Short-term loans to farmers, the members of the Rs.491.05 lakh, 23 members to build a
new house for Rs .55.36 lakh, home and property, as mortgage loans Rs.345.06 lakh to 134
members, Rs.2296.61 lakh to 8413 members are about to grant a loan of jewellery. Also on
deposits of over Rs .130.61 lakh credit, consumer credit has provided a loan of Rs .10.70 lakh.
Besides these 39 self-help groups has provided a loan of Rs .51.69 lakh. Members and non-
members, who have received the deposit of Rs .2689.98 lakh, So that it is the best bank in
district.To find its own source of funding with the Bank of Central Cooperative Bank for low-
interest loans for crop loans, debts and has been getting money and jewellery. As well as its
capital and the remaining Rs.4.95 core as loans to members of the Central Bank has led to the
liquid asset.

PACCS ALANGULAM – DEVELOPMENT VIEW:

Year Own Deposit Member Working Borrowings Investments
fund Loan Capital

2014-2015 54.86 133.2 1186.64 1379.60 291.46 314.62

2015-2016 98.25 1890.62 2867.30 2713.17 724.32 156.49

2016-2017 120.56 2060.30 3193.14 2990.74 810.55 182.39

2017-2018 131.94 2434.70 3493.33 3664.82 1138.63 697.09

2018-2019 180.23 2689.98 3626.04 3880.15 1071.43 754.44

Year No of Member Member of Govt. share Total share

share Loan

2014-2015 6069 51.08 0.33 51.41

2015-2016 6055 49.89 -- 51.58

2016-2017 6612 53.17 -- 53.17

2017-2018 4375 59.98 -- 59.98

2018-2019 4462 77.09 -- 77.09

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OBJECTIVES OF THE STUDY:

* To study the financial performance analysis of Co-operative Credit Society, Alangulam.
* To know the profitability, liquidity and solvency position of Co-operative Credit Society,
Alangulam.
* To compare and interpret financial statements of the Co-operative Credit Society,
Alangulam with comparative and common-size statement analysis.
* To forecast the annual growth rate of income of the Co-operative Credit Society,
Alangulam with the help of regression analysis.

LIMITATION OF THE STUDY:

* The study is mainly carried out based on the secondary data provided in the financial
statement.
* The study based on the past five year financial statement

LITERATURE REVIEW:
 Kennedy and Muller (2012), has explained that “The analysis and interpretation of
financial statements are an attempt to determine the significance and meaning of financial
statements data so that the forecast may be made of the prospects for future earnings,
ability to pay interest and debt maturines (both current and long term) and profitability
and sound dividend policy.”
 Peeler J. Patsula (2013), he define that a sound business analysis tells others a lot about
good sense and understanding of the difficulties that a company will face. We have to
make sure that people know exactly how we arrived to the final financial positions. We
have to show the calculation but we have to avoid anything that is too mathematical. A
business performance analysis indicates the further growth and the expansion. It gives a
physiological advantage to the employees and also a planning advantage.
 Chidambaram Rameshkumar & Dr. N. Anbumani (2013), he argue that Ratio
Analysis enables the business owner/manager to spot trends in a business and to compare
its performance and condition with the average performance of similar
businesses in the same industry.

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RESEARCH METHODOLOGY:
ANALYTICAL RESEARCH
In this type of research has to use facts or information already available, and analyze
these to make a critical evaluation of the material. The researcher depends on existing data for
his research work. The analysis revolves round the material collected or available.

SOURCE OF DATA
 SECONDARY DATA - Secondary Data refers to the information or facts already
collected such data are collected with the objectives of understanding the past status of
any variable or the data collected and reported by some source is accessed and used for
the objective of a study. Normally in research, the scholars collect published data,
journals, annual reports and websites.

TOOLS USED FOR ANALYSIS

 Ratio Analysis
 Comparative Statement Analysis
 Time series analysis

DATA ANALYSIS & INTERPRETATION:

RETURN ON EQUITY FOR THE YEAR 2014-15 TO 2018-19
Return on equity = (Net profit After interest and tax/shareholder‟s funds)*100
Year Net profit after interest Shareholder’s Ratio
And tax funds
2014-2015 16,73,940 52,11,401 32.12
2015-2016 19,71,461 50,93,668 38.70
2016-2017 22,34,952 55,31,885 40.40
2017-2018 2,646,840.16 5,998,429 44.12
2018-2019 3,093,866.71 7,733,169 40.00
The above the table shows that the return on equity from the year 2014-2015, to
2018-2019 the return on equity for the year 2017-2018, is 44.12. For the year 2016-2017, is
40.40. The for the year 2017-2018, is 44.12 for the year 2015-2016, is 38.70 and for the year
2014-2015,is 32.12.

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DEBT EQUITY RATIO FOR THE YEAR 2014-15 TO 2018-19

Debt equity ratio = (loan-term debt /shareholders fund)
Year Long-term debt shareholders’ funds Ratio
2014-2015 55,950,446 5,21,1460 10.7
2015-2016 55,950,446 5,093,668 14.21
2016-2017 86,576,679 5,531,885 15.6
2017-2018 112,589,569 5,998,429 18.9
2018-2019 107,1434,27 7,733,169 13.85
The above the table shows that the return on debt equity from the year 2014-2015, to
2018-2019 the return on debt equity for the year, 2017-2018, is 18.9. For the year 2016-2017,
is 15.6. For the year 2015-2016, is 14.21. For the year 2018-2019, is 13.85.and for the year
2014-2015, is 10.7.

TIME SERIES ANALYSIS PREDICTED VALUES FOR SHARE HOLDER FUNDS:

YEAR ACTUAL (RS) LCL (RS) UCL (RS)
2014 5,211,401.00 2,804,724.83 6,642,851.81
2015 5,093,668.00 3,399,695.48 7,237,822.45
2016 5,531,885.00 3,994,666.12 7,832,793.10
2017 5,99,8429.00 4,589,636.77 8,427,763.75
2018 7,733,169.00 5,184,607.42 9,022,734.39
2019 7,698,641.55 5,779,578.06 9,617,705.04
2020 8,293,612.20 6,374,548.71 10,212,,675.69
2021 8,888,582.84 6,969,519.36 10,807,646.33
2022 9,483,553.49 7,564,490.00 11,402,616.98
It is inferred that, share holder funds it is predicted that, it will have shareholder funds
Rs. 7,698,641.55 in the year 2019, Rs. 8,293,612.20 in the year 2020, 8,888,582.84 Rs. in the year
2021 and 9,483,553.49 in the year 2022. It has the lower confident limit of Rs, 5,779,578.06 in the
year 2019, Rs. 6,374,548.71 in the year 2020, Rs, 6,969,519.36 in the year 2021 and
Rs. 7,564,490.00 in the year 2022. It has the Upper confident limit of Rs 9,617,705.04 in the year
2019, Rs. 10,212,675.69 in the year 2020, Rs, 10,807,646.33 in the year 2021 and Rs, 11,402,616.98
in the year 2022.

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COMPARATIVE BALANCE SHEET OF PRIMARY AGRICULTURE

CO-OPERATIVE CREDIT SOCITY ALANGULAM FOR THE YEAR ENDED 2018-19

Amount Amount Percentage

Particulars 2018 2019 Increase decrease 2014- Increase /
(Rs.) (Rs.) 2014-2015 2015 Decrease
(Rs.) (Rs.) during 2014-
2015 (In %)
Assets:

Current Assets 23,713,23.79 36,354,261.8 33,982,938.01 ----- 6.97

Loans & Advance 341,905,807 354,130,599 12,224,792 ------ 2796.6
Investment 69,575,622.71 75,310,569.71 5,734,947 ----- 1,213
Fixed Asset 3,345,270.01 11,955,192.13 8,609,922.12 ----- 2.79

Total Asset 417,198,023.5 477,750,622.0 60,552,599.13 ------ 209.05

Liabilities and
Capital:
83,202,808.07 19,390,547.76 66,810,260.31 ------- 124.5
Current Liability
83,202,808.07 19,390,547.76 66,810,260. 31 ------- 124.5
Total Liabilities
(A)

Capital and
Reserve:
5,386,985 7,733,169 2,346,184 ------- 229.6
Share Capital
Reserve & funds 14,585,958.81 56,887,348.82 42,301,390.01 ------- 145.3

Total
Shareholders’
Funds (B) 19,972,943.81 64,620,517.82 44,647,574.01 ----- 374.9

374.9
103,175,751.9 84,011,065.58 11,457,834.3 ------
Total Liabilities ==========
and Capital ========== ========== ============ ==========
(A+B)

In the year of 2018 -2019 Secured loans shows uptrend by Rs.354, 130,599 over the previous
year of Rs.341, 905,807 and increase in percentage of 2796.6%

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MAJOR FINDINGS:
 The return on equity ratio for the study period in the decreasing trend and the year 2017
- 2018 show the maximum value of 44.12.
 The debt equity ratio for the study period in the decrecreasing trend and the year 2017-
2018 show the maximum value of 18.9
 In the year of 2018 -2019 Secured loans shows uptrend by Rs.354, 130,599 over the
previous year of Rs.341, 905,807 and increase in percentage of 2796.6%
 The predicted value for share holder the study period is in the increasing trend and the
year 2022 show the maximum value of Rs.9, 483,553.49

SUGGESTION RECOMMENDED:
 The PACCS Alangulam has maintained the current ratio, debt equity, equity, debt total
fund and fixed assets will affect the PACCS position.
 The PACCS Alangulam must be increasing the standard assts, but to control the doubtful
assets.
 It working member only 6 so that will be affected in the time period.

CONCLUSION:
In order to improve their financial performance, PAACS – Alangulam must advised to do
the following based on the analysis:
 The PAACS Alangulam should motivate and impart right knowledge about
banking to their staff and also should bring new products/services based on the
aspirations of customers.
 They have to fundamentally reorient its business models by moving from product
centric silos to customer centric strategies.
 It must become more clients centric by leveraging sophisticated insights to
improve risk management pricing, channel performance and client satisfaction.

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REFERENCES:
WEBSITES REFERRED

 Co-operative society industry profile (n.d), retrieved on 28 January 2016, from

http://www.industryprofile/co-operativesociety/co.in
 Review of literature on financial performances (n.d), retrieved on 3 march 2016, from
http://ww.ijaecsms.com/docs/paper/volume2/issue1/v2il-032.pdf
http://shodhganga.inflibnet.ac.in
https://shodhganga.inflibnet.ac.in/bitstream/10603/19915/10/chapter_6.pdf
BOOKS REFERRED
 G.Sudarsana Reddy, financial management, Himalaya publishing house, Mumbai.
 I M pandey, Financial management, vikas publishing house pvt.ltd, New Delhi

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