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Financial statements are formal records of the financial activities of a business, person, or other entity and provide an overview of a business or person's financial condition in both short and long term. They give an accurate picture of a companys condition and operating results in a condensed form. Financial statements are used as a management tool primarily by company executives and investors in assessing the overall position and operating results of the company. Analysis and interpretation of financial statements help in determining the financial viability and profitability of a firm. Ratio analysis shows whether the company is improving or deteriorating in past years. Moreover, Comparison of different aspects of all the firms can be done effectively with this. It helps the clients to decide in which firm the risk is less or in which one they should invest so that maximum benefit can be earned. Electronic industries are capital intensive; hence a lot of money is invested in it. So before investing in such companies one has to carefully study its financial condition and worthiness. Unfortunately very limited work has been done on analysis and interpretation of financial statements of Kirloskar Electrical co Ltd . An attempt has been carried out in this project to analyze and interpret the financial statements
The study starts with an introduction to inventory management, Companys profile, it s Vision & Mission, Achievements and also the need for study, review of literature and objectives are set out for the study. Research methodology, Data analysis & Interpretation, Findings and Suggestions of the study follow.
One of the main areas of the project is the analysis part, where the data are analyzed & interpreted, to find out how the inventories were managed. Some of the tools used in inventory are regarding to:
ABC Analysis
The main objective of inventory control is to achieve maximum efficiency in production & sales with minimum investment in inventory. Inventory control is a planned approach of determining what to order, when to order and how much to order and how much to stock, so that costs associated with buying and storing are optimal without interrupting production and sales.
Fixed asset management is of vital important to any organization. The decisions relating to fixed assets involve huge funds for long period of time and are generally of irreversible nature affecting the long profitability of the business. Fixed asset management is also important to have fair measure of profit or loss and financial position of the concern. Fixed assets are meant for use for many years. The value of these assets decreases with their use or with time or many other reasons. A portion of fixed assets are reduced by usage are converted into cash through charging depreciation. For correct measurement of income, proper measurement of depreciation is essential, as depreciation constitutes a Part of total cost of production. As fixed assets play an important role in companys objectives. These fixed are not convertible or not liquid able over a period of time. The owners funds and long term liabilities are invested in fixed assets. Since, fixed assets play dominant role in the business and the firm has utilization of fixed assets. . If firms fixed assets are idle and not utilized properly it affects the long-term sustainability of the firm, which may affect liquidity and solvency and profitability positions of the company. By this study we came to know the amount of capital expenditure made by the company during study period, amount of finance made by long-term liabilities and owners funds towards fixed assets and to evaluate fixed assets performance, turnover, depreciation and method of depreciation adopted by Fine Fab, and to evaluate whether to fixed assets are giving adequate returns to the company, that if fixed assets are liquidated, what proportion of it will contribute for the payment of owners fund and long-term liability