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INTRODUCTION

Bicycle was seen in India in the year 1890. Import of cycles, however, started in 1905 and continued for more than 50 years. The Government in July 1953 announced complete ban on imports, but cycle kept on simmering in the country till 1961. In 1890, selling price of an imported bicycle was around Rs. 45/-; in 1917, during the First World War the price jumped to Rs. 500/- but dropped considerably, month by month and came down to Rs. 35/- or so (U.K. makes) and Rs. 15/- or so (Japanese models). It would be interesting to mention that in 1919, five persons in Punjab imported cycles and used them on The Mall, Simla. These included one Bishop, Two military men and two contractors including S. Pala Singh Bhogal (Grand Father of Mr. M.S. Bhogal of Ludhiana). Under special permission of the Governor, they were allowed to use cycles on The Mall only for one hour in a day. They imported B.S.A. Cross bar Cycle from U.K. and it used to be a kind of Mela at that particular hour on the Mall in Simla, the scene watched by hundreds of people everyday. Later, a firm was formed under the name of Singh & Co. with shops on Railway Road, Jalandhar and Bazaar Vakillan, Hoshiarpur, which imported bicycles in the year 1930 onwards.

THE HERO GROUP The Hero Group has done business differently right from the inception and that is what has helped us to achieve break-through in whatever product category we have ventured. The Groups low key, but focused, style of management has earned the plaudits amidst investors, employees, vendors and dealers, as also worldwide recognition. The growth of the Group through the years has been influenced by the number of factor: The Hero Group through the Hero Cycles Division was the first to introduce the concept of just-in-time inventory. The Group boasts of superb operational efficiencies. Every assembly line worker operates two machines simultaneously to save time and improve productivity. The fact that most of the machines are either developed or fabricated in-house has resulted in low inventory levels. In Hero cycles Limited, the just-in-time inventory principle has been working since the beginning of production in the limit in the unit and is functional even till date. The vendors bring in the raw material and by the end of the day the finished product is rolled out of the factory. This is the Japanese style of production and in India; Hero is the first company to have mastered the art of the just-in-time inventory principle

VISION AND MISSION

The Vision We, at the Hero Group are continuously striving for synergy between technology, systems and human resources to provide products and services that meet the quality, performance, and price aspirations of the customers. While doing so, we maintain the highest standards of ethics and societal responsibilities, constantly innovate products and processes, and develop teams that keep the momentum going to take the group to excellence in everything we do.

The Mission Statement Its our mission to strive for synergy between te chnology, systems and human resources, to produce products and services that meet the quality, performance and price aspirations of our customers. While doing so, we maintain the highest standards of ethics and societal responsibilities. This mission is what drives us to new heights in excellence and helps us forge a unique and mutually beneficial relationship with all our stakeholders. We are committed to move ahead resolutely on this path, shown to us by visionaries like Mr. Satyanand Munjal, Mr. Om Prakash Munjal, the late Mr. Dayanand Munjal and late Mr. Raman Kant Munjal. Mr. Brijmohan Lall Munjal, Chairman & MD THE HERO GROUP.

MEANING OF FINANCIAL ANALYSIS


The term financial analysis also known as analysis and interpretation of financial statements refers to the process of determining financial strength and weaknesses of the firm by establishing strategic relationship between the items the balance sheet, profit and loss account and other operative data. Acc. To Myers- Financial statement analysis is largely a study of relationship among the various financial factors in a business is disclosed by a single set of statements, and a study of the trend of these factors as shown in a series of statement.

Purpose of financial statement analysis: The purpose of financial statement analysis depends upon the need of person who is analyzing these statements. These varying needs may be: To know the earning capacity or profitability of the firm. To know the solvency position of firm. To know the financial strength of the business. To make comparative study with other firms. To know the capability of payment of interest and dividend. To know the trend of the business. To know the efficiency of the management. To provide useful information to the management.

Tools of financial Analysis: The analysis and interpretation of financial statement is used to determine the financial position and results of operations as well. A number of methods or devices are used to study the relationship between different statements. A financial analyst may use following methods: Comparative statements Ratio analysis Fund Flow analysis Common size statement

FUND FLOW ANALYSIS


Definition of Fund A question arises as to the definition of FUND. It means: Funds may mean change in cash only; Funds may mean change in working capital (the difference between current assets and current liabilities) only. A more comprehensive definition of funds may be given as follows: Funds may mean change in financial resources, arising from changes in working capital items and from financing and investing activities of the enterprise, which may involve only non-current items. The funds flow statement analyses only the causes of changes in the firms working capital position. The cash flow statement is prepared to analyze changes in the flow of cash only. These statements fail to consider the changes in the firms total financial resources. They do not reveal some significant items that do not affect the firms cash or working capital position, but considerably influence the financing position and asset mix of the firm. The statement of changes in financial position is an extension of the funds flow statement or the cash flow statement. Therefore, to get better insights, a firm may prepare a comprehensive, all inclusive, statement of changes in financial position incorporating changes in the firms cash and working capital positions involving: Changes in the firms working capital position, Changes in the firms cash position, and Changes in the firms total financial resources.

OBJECTIVES
1. 2. 3. 4. To analyze the liquidity position of the firm. To analyze the solvency position of the firm. To study and analyze the overall profitability of the firm. To study and analyze the changes in working capital and fund flow position. 5. 6. To relate the various items of profit and loss account with sales. To compare the assets and liabilities of the current year and previous year. 7. 8. To study the and analyze the capital structure of the firm. To determine the efficiency with which the current assets are managed.

RESEARCH METHODOLOGY
Basically project study is usually based on a research, which gives a concrete answer to a problem. This research may be Problem Solving or Problem Oriented. Both types of research are usually known as Applied Research. Marketing is a form of Applied research which proceeds with a certain problem, specifies alternative solutions and the possible outcomes of each alternative. It may be further named as Decisional Research. The Marketing Research methodology involves a number of interrelated activities, which overlap and do not rigidly follow a particular sequence. A marketing research involves the following major steps.

FORMULATING RESEARCH PROBLEM The first step in research is formulating research problem. It is the most important stage in Applied Research as it rightly said A problem well defined is half solved. In this Project Report I have studied the concept of FINANCIAL ANALYSIS have carried the analysis of the same in HERO CYCLES LIMITED.

STATISTICAL TOOLS & TECHNIQUES The statistical techniques like comparative balance sheet, common size balance sheet, fund flow statement and Ratios have been in the study. These have been very useful in doing the interpretation and analysis of the data collected through secondary sources.

SUGGESTIONS

1. The Company is enjoying a good current position. It should take steps to further improve its position by repositioning the composition of current assets as large amount has been block in debtors and inventories. 2. Large amounts of funds are blocked in debtors. Company should reduce its debtors so that the blocked amount is properly utilized. 3. Inventory control is not proper. The Company has not defined the minimum and the maximum stock level scientifically. Therefore there is blockage of funds. Moreover, the safety stock level is also not defined. So the company should apply the proper Inventory Control System so that there is no wastage of funds.

LIMITATION Financial analysis is a powerful mechanism of determining financial strength and weakness of a firm. But the analysis is based on the information available in the financial statements. Thus the financial analysis suffers from some serious

inherent limitation of financial statements, which are as follows :1. It is only a study of interim reports. 2. Financial analysis is based only upon monetary information & nonmonetary factors are ignored. 3. It does not consider changes in price level. 4. As financial statement are prepared on the basis of a going concern; it does not give exact position. 5. Analysis is only a mean not an end in itself. The analyst has to make interpretation and draw his own conclusion.

DATA REPRESENTATION The result have presented with the help of pie-charts and bar diagrams which clearly represents that the research conducted is a Formal Research and the Research Design is a sound one.

DETERMINING THE SOURCE OF DATA The next step is to determine the source of data to be used. The marketing research may be based on primary or secondary data or on both. In this report I have used the information gathered through secondary data which include mainly the Annual Reports of HERO CYCLES LIMITED.

SYNOPSIS ON FINANCIAL ANALYSIS OF HERO CYCLE


In partial fulfillment requirement for the degree of

BACHELOR OF BUSINESS ADMINISTRATION

SUBMITTED TO:

SUBMITTED BY:

GGNIMT, LUDHIANA
AFFILIATED TO

PUNJAB TECHNICAL UNIVERSITY, JALANDHAR (SESSION: 2010-13)

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