CHAPTER-II: RESEARCH METHODOLOGY

A. Need of the study

The following are the needs for the study: 1. The ability of the department to meets its current obligations. 2. The extent to which the organization has used its long-term solvency by borrowing funds. 3. The efficiency with the department is utilizing its financial resources accurately. 4. The overall operating efficiency and performance of the department.

B. Objectives of the study

Study of the financial analysis is important because unless the financial resources are managed effectively, monitored efficiently planed properly and reviewed periodically at regular intervals to remove bottlenecks if any the organization cannot earn good financial position and increase its surpluses. With this primary objective of the study, the following further objectives are framed for a depth analysis: 1. To calculate the important financial ratios of the department as a part of the ratio analysis thereby to understand the changes and treads in the financial position of the department. 2. To access the performance of the department on the basis of earnings and also to evaluate the solvency position of the department. 3. To identify the financial strengths and weaknesses of the department. 4. To give the appropriate suggestions to the department officials. To help them to make more informed decisions.

C. Methodology of the study

1. Introduction Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying now research is done systematically. In that various steps, those are generally adopted by a researcher in studying his problem along with the logic behind them. Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. The word research has been derived from French word Researcher means to search. Francies Rummer has defined Research: It is a careful inquiry or examination to discover new information or relationship and to expand or verify existing knowledge. Research is the solution of the problem, whether created or already generated. When research is done, some new outcome, so that the problem (created or generated) to be solved.

It is important for research to know not only the research method but also know methodology. The procedures by which researcher go about their work of describing, explaining and predicting phenomenon are called methodology. Methods comprise the procedures used for generating, collecting and evaluating data. All this means that it is necessary for the researcher to design his methodology for his problem as the same may differ from problem to problem. Data collection is important step in any project and success of any project will be largely depend upon now much accurate you will be able to collect and how much time, money and effort will be required to collect that necessary data, this is also important step. Data collection plays an important role in research work. Without proper data available for analysis you cannot do the research work accurately. 2. Research Design: Research Design is the conceptual structure within which research is conducted. It constitutes the blueprint for collection, measurement and analysis of data. The design used for carrying out this research is Descriptive. 3. Types of Data Collection: There are two types of data collection methods available. 1. Primary Data Collection 2. Secondary Data Collection 1) Primary Data Collection: The primary data is that data which is collected fresh or first hand, and for first time which is original in nature. Primary data can collect through personal interview, questionnaire etc. to support the secondary data. The information collected directly without any reference is primary data. In the study it is mainly through conservation without concerned officers or staff member either individually or collectively. The data includes: a) Conducting personal interview with officers of the department. b) Individual observation and inferences. c) From the people who are directly involved with the transaction of the department. 2) Secondary Data Collection: The secondary data are those which have already collected and stored. Secondary data easily get those secondary data from records, journals, annual reports of the organization etc. It will save the time, money and efforts to collect the data. Secondary data also made available through trade magazines, balance sheets, books etc. Study has been taken from secondary sources i.e. published annual report of the department. Editing, classifying and tabulation of the financial data for this purpose performance data of the Department of Higher Education for the year 2007-2008 to

20011-2012 have been used. The help of various data sources like websites, journals, books etc. has been taken to simplify the study. 4. Analysis and Interpretation: Data collection through primary and secondary sources resulted in availability of the desired information but these were useless until there were analyzed. Various steps required for this purpose were editing, coding and tabulating. Tabulating refers to bringing together similar data and compiling them in an accurate and meaningful manner. The data collected was analyzed, interpreted with the help of table, bar chart and pie chart and various tools of financial analysis.

D. Scope of the study

The scope of the study is identified after and during the study is conducted. The study of financial analysis is based on tools like Trend Analysis, Ratio Analysis, Comparative Analysis, Cash Flow Statement, Funds Flow Statement etc. Further, the study is based on last 5 years Annual Reports of the Department of Higher Education, Himachal Pradesh.

E. Significance of the study

The study has great significance and provides benefits to various parties who directly or indirectly interact with the department. 1. It is beneficial to the top management of the department by providing crystal clear picture regarding to the important financial aspects of the Department of Higher Education, Himachal Pradesh. 2. The study is beneficial to Employees and offer motivation by shoeing how actively they are contributing for the departmental growth. 3. The study is very helpful to the researchers and students. They can use this study as a reference and secondary source of data.

F. Limitations of the study

This project has completed with annual reports; it just constitutes one part of data collection i.e. secondary. There were limitations for primary data collection because of confidentiality. Further, this project is based on five year annual reports. Conclusions and recommendations are based on such limited data. The trend of last five year may or may not reflect the real financial position of the department. As most of the data is from secondary sources, hence the accuracy is limited. The information used is primarily from historical reports available to the public and the same doesnt indicate the current situation of the firm. Detailed analysis could not be carried for the project work because of limited time span. Since financial matters are sensitive in nature the same could not be acquired easily.