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SUMMER TRAINING REPORT ON A FINANCIAL ANALYSIS OF EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED Submitted to Kumaun University Nainital FOR

PARTIAL FULLFILMENT OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA)

DEPARTMENT OF MANAGEMENT STUDIES, Kumaun University, Nainital Uttarakhand` Submitted By: GOVIND SINGH MBA 2-YEAR (IIIrd Semester)

2013

STUDENT DECLARATION

I Govind Singh hereby declare that the summer training project report entitled Performance Appraisal System with special reference to EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED being submitted to Department of Management Studies, Bhimtal & Kumaun University, Nainital is my own piece of work and it has not been submitted to any other institute or published at any time before.

GOVIND SINGH

Words are inadequate to express deep sense of gratitude towards the management of EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED I am thankful to all members of this co. who supported and provided information about this organization and gave guidance needed in the completion of the project. I would like to express my deep gratitude to my Supervisor, whose guidance and inputs were indispensable in the completion of this project. This project has been made possible though the direct and indirect motivation of all my family members, company employees and last but not least; I thank my institute DEPARTMENT OF MANAGEMENT STUDIES for providing me with the experience of performing my project at a reputed company like EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED

GOVIND SINGH MBA IIIrd Semester

TABLE OF CONTENTS (i) EXECUTIVE SUMMARY

(ii)

INTRODUCTION

(iii)

REVIEW OF LITERATURE

(iv)

OBJECTIVES AND RESEARCH METHODOLOGY

(v)

THEORTICAL REVIEW

(vi)

ANALYSIS AND INTERPREATION

(vii)

CONCLUSION AND RECOMMENDATIONS

(viii)

BIBLOGRAPHY

EXECUTIVE SUMMARY
Despite the continuing caution exercised by many organizations amid ongoing economic uncertainty, a substantial proportion of employers around the globe identify a lack of available skilled talent as a continuing drag on business performance. This project basically focuses on financial analysis and its operating procedure of EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED performance in past years. From their balance sheet and through ratio analysis method we try to identify the major changes in trends, and relationships and the investigation of the reasons underlying those changes. Probably the most widely used financial analysis technique is adopted and conclusion is being drawn that the company is.

INTRODUCTION Financial analysis is the process of identifying the financial strengths and weakness of the firm by properly establishing relationships between the items of the balance sheet and the profit and loss account. Financial analysis can be undertaken by management of firms, or by the parties outside the firm, viz. Owners, creditors, investors and others. The nature of analysis will differ depending on the purpose of the analyst. For example, trade creditors are interested in the firms ability to meet their claim over a very short period of time. Their suppliers of long term debt, on the other hand, are concerned with firms long term solvency and survival. They analyze the firms profitability over a period of time, its ability to generate cash to be able to pay interest and repay principal and relationship between various sources of fund (capital structure relationships). Long term creditors do analyze the historical financial statement, but they place more emphasis on the firms projected, or pro forma, financial statement on make analysis about its future solvency and profitability. Similarly, investors, who have invested their money in firms shares, are most concerned about the firms earnings. They restore more confidence on those firms that show steady growth in earnings. As such, they concentrate on the analysis of the firms present and future profitability. They are also interested in firms financial structure to the extent it influences the firms earning ability and risk. Finally, management of the fi rm would be interested in every aspect of financial analysis. It is their overall responsibility to see that the firms resources are used most efficiently and effectively, and that the firms financial condition is sound. Financial analysis Financial analysis (also referred to as financial statement analysis or accounting analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions.

Continue or discontinue its main operation or part of its business; Make or purchase certain materials in the manufacture of its product; Acquire or rent/lease certain machineries and equipment in the production of its goods; Issue stocks or negotiate for a bank loan to increase its working capital; Make decisions regarding investing or lending capital; Other decisions that allow management to make an informed selection on various alternatives in the conduct of its business.

Definition of 'Financial Analysis' The process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment. Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a

specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In addition, one key area of financial analysis involves extrapolating the company's past performance into an estimate of the company's future performance.

Capital investment decisions comprise the long term choices about which projects receive investments, whether to finance that investment with equity or debt, and when or whether to pay dividends to shareholders. Short term corporate finance decisions are called working capital management and deal with balance of current assets and current liabilities by managing cash, inventories, and short term borrowings and lending (e.g., the credit terms extended to customers). Corporate finance is closely related to managerial finance, which is slight broader in scope, describing the financial technique available to all forms of business enterprise, corporate or not. ROLE OF FINANCIAL MANAGEMENT What is Financial Management? Nature of work Working conditions Employment Training, Other qualifications and Advancement. Job outlook Earnings Related occupations The Goal of the Firm Corporate Governance Organization of the Financial Management Function Financial Management Let us discuss each of this in detailed manner.

1. NATURE OF WORK Almost every firm, government agency and organization has one or more financial manager who oversees the preparations of financial reports, direct investment activities, and implement cash management strategies. As computers are used to record and organize data, many financial managers are spending more time developing strategies and implementing the long-term goals of their organizations. The duties of financial manger vary with their specific titles, which are controller, treasurer or finance officer, credit manager, cash manager, and risk and insurance manager. Controllers direct the preparation of financial report that summarize and forecast the organizations financial position, such as income statement, balance sheets, and analysis of future earnings and expenses. Regulatory authorities also in charge of preparing special reports require controllers. Often, controllers oversee accounting, audit, and budget departments. Treasurers and finance officers direct

the organizations financial goals, objectives, and budgets. They oversee the investments of funds and manage associated risks, supervise cash management activities, execute capital raising strategies to support a firms expansion, anddeal with mergers and acquisitions. Credit managers oversee the firms issuance of credit. They establish credit rating criteria, determine credit ceilings, and monitor past-due accounts. Managers specializing in international finance develop financial and accounting systems for the banking transactions of multinational organizations. Cash managers monitor and control the flow of cash receipts and disbursements to meet the business and investments needs of the firm. For example, cash flow projections are needed to determine whether loans must be obtained to meet cash requirements or whether surplus cash should be invested in interest-bearing instruments. Risk and insurance managers oversee programs to minimize risks and losses that might arise from financial transactions and business operations undertaken by the institution. They also manage the organizations insurance budget. Financial institutions, such as commercial banks, savings and loan associations, credit unions, and mortgage and finance companies, employ additional financial manager who oversee various functions, such as lending, trusting, mortgages, and investment, or programs, including sales, operations, or electronic financial services. These managers may be required to solicit business, authorize loans, and direct the investment of funds, always adhering to State laws and regulations. Branch managers of financial institutions administer and manage all of the functions of a branch office, which may include hiring personnel, approving loans and lines of credit, establishing a rapport with the community to attract business, and assisting customers with account problems. Financial managers who work for financial insitutions must keep abreast of the rapidly growing array of financial services and products. In addition to general duties described above, all financial managers perform tasks unique to their organization or industry. For example, government financial managers must be experts on the government appropriations and budgeting processes, whereas healthcare financial managers must be knowledgeable about issues surrounding healthcare financing. Moreover, financial managers must be aware of special tax laws and regulation that affect their industry. Financial manager play an increasingly important role in mergers and consolidations and in global expansion and related financing. These areas require extensive, specialized knowledge on the part of it, the financial manager to reduce risk and maximize profit. Financial managers increasingly hired on temporary basis to advice senior manager on these and other matters. In fact, some small firms contract out all accounting and financial functions to companies that provide these services. The role of financial manager, particularly in business, is changing in response to technological advances that have significantly reduced the amount of time it takes to produce financial reports. Financial managers now perform more data analysis and use it to offer senior managers ideas on how to maximize profits. They often work in teams,

acting as business advisors to top management. Financial managers need to keep abreast of latest computer technology in order to increase the efficiency of their firms financial operations Financial Management Concerns the acquisition, financing, and management of assets with some overall goal in mind. Investment Decisions Most important of the three decisions. What is the optimal firm size What specific assets should be acquired What assets (if any) should be reduced or eliminated

COMPANY PROFILE

EGDE MANAGEMENT PRIVATE LIMITED GENERAL PARTICULARS

NAME OF THE COMPANY EDGE Management Consultants Private Limited CONSTITION Private Limited Company

DATE OF INCORPORATION INDUSTRY

22th April 1992 Developer & Service Provide

REGISTERED OFFOCE

B-19, Gulmohar Park, New Delhi 110049, B-19, Gulmohar Park, New Delhi 110049

CORPORATE OFFICE

DIRECTORS

Mr. Naresh Bhatt (Managing Director) Mr. Subhash Chander Batra

A Brief note on EGDE Management Consultants Private Ltd. EGDE management Consultants Private Ltd. a corporate organization established in 1992 was the culmination of the common-man dream, dream to provide an ultimate solution in housing. With over 18 years of experience and the professional approach of the organization, EGDE Management Consultants company has a turnover of approx. Rs. 75 lakhs. The company has provide loan of other company and provide tool of machine. The liability of the Members is limited. The Authorized share capital of the Company is Rs. 1,00,000/- (Rupees one lack) divided into 10,000 (Ten thousand) Equity share of Rs. 10/- (Rupees Ten) each. Proposed Project at Gulmohar Park B-19 Road Distance between Anand Vihar to Green Park to Gulmohar distance between 21Kms and 14miles. Metor station to Green Park to Gulmohar Park B-19 New Delhi 500miter. National Highway distance between 35Kms and 22miles. City Railway Station distance between 26Kms and 16miles.

Domestic Airport distance between 12Kms 7miles.

Proposed project at Gulmohar Park B-19 Location/land mark Distance from Side Nizamudin railway Station 8.600Kms. Indira Gandhi International Airport 11.800Kms.

The Name of the Company is EDGE MANAGEMENT CONSULTANTS PRIVATE Ltd. The Registered Office of the Company is situated in Union in Territory of Delhi. The Company on its Incorporation are to carry on Business of providing professional and Marketing services in the field of computer software, Cement, foodstuff, foodgrain, import, export, technical Collobaration within the outside India, Plastic papers. To carry on Business, Profession or vacation of acting as consultants and Advisors for all matters and problems arising out of or relating to or touching upon the field of finance, Accounts, Local or International investment, real estate, Foreign exchange, Taxation, law, import export, administration organization management staff selection techno-economics costing commencement and expansion of trade commerce and industries and provide multi-dimensional consultancy and advisory services in the field of innovation in financial inter-mediation, improved quality ofexisting financial and accounting services help to provide survey of foreign markets for increase in Indian export to procure technical know how and import of high technology for industrial market in country. Assets investigation on behalf of any company corporation body corporate industries firms association or any person and collect information of data and submit reports on feasibility of new project. A acquire by purchase lease exchange or otherwise any movable or immovable property and any rights or any arrangement for sharing profits union of interest joint venture. To compensate for loss off office of any Managing Director or Director or such other officer of the Company within the limitations prescribed under the Companies Act, 1956 or such other statutes or rules having the force of law and to make payments to any person whose officer of the employment or duties may be determined by virtue of any transaction in which the Company is engaged in.

Company Objective:The objective for which the Company is established are:VISION

1. To carry on business of providing professional and marketing services in the field of Computer software, Cement, foodstuff, food grain, import, export, technical collaboration within or out side India, Plastic papers. 2. To carry on business, profession or vacation of acting as Consultants and Advisors for all matters and problems arising out of or relating to or touching upon the field of finance, Accounts, local or international investment, real estate, foreign exchange, taxation, law, import export, administration, organization, management, staff selection, technoeconomics, costing, commencement and expansion of trade, commerce and industries, purchasing techniques, production, storages, purchases, Sales marketing distribution advisory services to individuals, firms, bodies corporate, institutions concerns and association. 3. To provide multi-dimensional consultancy and advisory services in the field of innovation in financial inter-mediation, improve the quality of existing financial and accounting service, help to provide survey of foreign market for increase in Indian Export, to procure technical know how and import of high technology for industrial markets in the country. 4. To assist in investigation on behalf of any Company, Corporation, body corporate, industries, firms, association or any person and collect information and data and submit reports on feasibility of new project and/or improvement to and or expansion of existing project and diagonise operational difficulties and weakness and suggest remedial measures to improve and modernize existing unites. MISSION 1. To acquire by purchase, lease, exchange or otherwise any movable or immovable property and rights or privileges which may deem necessary convenient for the main business of the Company. 2. To enter into partnership or any arrangement for the share profits, union interest, joint venture, reciprocal concession or co-operation with persons or companies carrying on or engaged in the main business of the Company. 3. To import, buy, exchange alter, improve and manipulate, in all kinds of plant, machinery, apparatus, tool, and things, necessary for carrying on the main business of the Company. 4. To vest any movable or immovable property, rights or interests acquired by or received or belonging to the Company in any person or for the benefit of the Company with or without any declared trust in favors of the Company. 5. To purchase or otherwise acquire, construct, carry out, equip, maintain, alter, improve, develop, manage, work, control and superintend any factories plants, ware houses, workshops, sheds, dwellings, offices, shops, stores, buildings, telephones, electric and gas works, machinery, apparatus, labour lines and houses, warehouses, and such other works and conveniences necessary for carrying on the main business of the Company.

OBJECTIVE 1. To carry on the business as trades, importers and exporters of and dealers in aluminum utensils, and all other such types of utensils and kitchen requisites of all types. 2. To act as business consultants, give advice, to engage in dissemination of information in all aspects of business organization and industry and advise upon the means and methods for expending and developing systems or processes relating to production, storage, distribution, marketing and securing of orders for sale of goods in India and abroad and/or relating to the rending of services. 3. To carry on the business of running motor lorries, motor taxis, mini buses and conveyances of all kinds and to transport passengers and goods and to do the business of common carriers. 4. To carry on the business of wholesale or retail, or otherwise as interior decorators, and furnishers, upholsterers, and dealers in and hirers, repairers, cleaners, stores and warehouses of furniture, carpets, linoleums, furnishing fabrics and such other floor coverings of all types household utensils, china and glass goods, fittings, curtains and such other household requisites of all types. 5. To carry on business as brewers, distillers, bottlers, canners, preservers, coopers, dehydrators, masters of and dealers in fruits herbs, vegetables, plants and liquors of every description such as Indian made foreign liquors, country liquors and by products therefore, whether intoxicating or not tonics vitamin beverages, flavored drinks, nector, punch, aerated waters and drinks whether soft or otherwise.

NEED FOR THE STUDY 1. The study has great significance and provides benefits to various parties who, directly or indirectly interact with the company. 2. It is beneficial to management of the company by providing crystal clear picture regarding important aspects like liquidity, leverage, activity and profitability. 3. The study is also beneficial to employees and offer motivation by showing how actively they are contributing for companys growth.

4. The investors who are interested in investing in companys share will also get benefited by going through the study and easily take a decision whether to invest or not to invest in companys shares. 5. It will help us in understanding the organizations working and how it will help us in working in a reputed organization.

OBJECTIVES AND RESEARCH METHODOLOGY OBJECTIVES The objectives of the study are as follows: 1. To evaluate the performance of the company by using financial analysis as a yard stick to measure the efficiency of the company. 2. To study the present financial system of EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED. 3. To study the operating procedure of EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED. 4. To offer appropriate suggestions for the better performance of the organization. RESEARCH METHODOLOGY

RESEARCH DESIGN: Research methodology must be classified on the basis of the major purpose of investigation. In this project description study has been used.

DATA COLLECTION: The information is collected through secondary sources during the project. The study is restricted to Egde Management Private Limited only and the financial statement of the company has been referred to and various interne sites and blogs have been used to collect information about the company. The information is collected through the secondary sources during the project. That information was utilized for calculating performance evaluation based on that, interpretations were made.

Secondary Data: It is the information, which has been already collected for other purposes and is readily available in some form. Its advantage is that it is readily available and cheap while its disadvantage is that data may be irrelevant. Sources of collecting Secondary data: 1. Internal sources: The Companys profit and loss statement, balance sheets, sales figure, credit policies, investment statement and annual reports. 2. Financial books from various libraries providing information on financial analysis. 3. Information technology tools like Internet. 4. Useful trade and general business magazines like Business India, Business Today etc. 5. Newspaper like Economic times, Financial Express etc. providing various article on the financial review (liquidity position) of various companies. THEORITICAL REVIEW

THE SCOPE AND PURPOSE OF FINANACIAL ANALYSIS Financial analysis is an evaluation of both a firms past financial performance and its prospects for the future. Typically, it involves an analysis of the firms financial statements and its cash flows. Financial statement analysis involves the calculation of various ratios. It is used by such interested parties as creditors, investors and managers to determine the firms financial position relative to that of others. The way in which an entitys financial position and operating results are viewed by investors and creditors will have an impact on the firms reputation, price/earnings ratio, and effective interest rate. Cash flow analysis is an evaluation of the firms statements of cash flows in order to determine the impact that its sources and uses of cash have on the firms operation and financial condition. It is used in decisions that involve corporate investments, operations and financing. FINANCIAL STATEMENT ANALYSIS

The financial statements of an enterprise present the summarized data of its assets, liabilities and equities in the balance sheet and its revenue and expenses in the income statement. If not analyzed, such data may lead one draw erroneous conclusions about the firms financial condition. Various measuring instruments may be used to evaluate the financial health of a business, including horizontal, vertical, and ratio analysis. A financial analyst uses the ratio to make two types of comparisons: 1. Industry comparison. The ratios of a firm are compared with those of similar firms or with industry averages or norms to determine how the company is faring relative to its competitors. Industry average ratios are available from a number of sources, including: a. Risk Management Association (RMA). RMA (formerly known as Robert Morris Association) has been compiling statistical data on financial statements for more than 75 years. The RMA Annual Statement Studies provide statistical data from more than 150,000 actual companies on many key financial ratios, such as gross margin, operating margins, and return on equity and assets. If you are looking to put real authority into the industry average numbers that your company is beating, the Statement Studies are the way to go. They are organized by SIC codes, and you can buy the financial statement studies for your industry in report form or over the Internet (www.rmahq.org). b. Dun and Bradstreet. Dun and Bradstreet publishes Industry Norms and Key Business Ratios, which cover over 1 million firms in over 800 lines of business. c. Value Line. Value Line Investment Service provides financial data and rate stocks of over 1,700 firms. d. The Department of Commerce. The Department of Commerce Financial Report provides financial statement data and includes a variety of ratios and industry wide common-size vertical financial statements. e. Others. Standard and poors, Moodys Investment Service, and various broke rate compile industry studies. 2. Trend analysis. A firms present ratio is compared with its past and expected future ratios to determine whether the companys financial condition is improving or deteriorating over time. After completing the financial statement analysis the firms financial statement analyst will consult with management to discuss their plans and prospects, any problem areas identified in the analysis, and possible solutions. RATIO ANALYSIS The term Ratio refers to the numerical and quantitative relationship between two items or variables. This relationship can be exposed as Percentages Fractions Proportion of numbers Ratio analysis is defined as the systematic use of the ratio to interpret the financial statements. So that the strengths and weaknesses of a firm, as well as its historical performance and current

financial condition can be determined. Ratio reflects a quantitative relationship helps to form a quantitative judgment. STEPS IN RATIO ANALYSIS The first task of the financial analysis is to select the information relevant to the decision under consideration from the statements and calculate appropriate ratios. To compare the calculated ratios with the ratios of the same firm relating to the past or with the industry ratios. It facilitates in assessing success or failure of the firm. Third step is of interpretation, drawing of inferences and report writing and conclusions are drawn after comparison in the shape of report or recommended courses of action.

BASIS OF STANDARDS OF COMPARISON Ratios are relative figures reflecting the relation between variables. They enable analyst to draw conclusions regarding financial operations. The use of ratios as a tool of financial analysis involves the comparison with related facts. This is the basis of ratio analysis. The basis of ratio analysis is of four types. Past ratios, calculated from past financial statements of the firm. Competitors ratio, of the some most progressive and successful competitor firm at the same point of time. Industry ratio, the ratio of industry to which the firm belongs to. Projected ratios, ratios of the future developed from the projected or pro forma financial statements.

NATURE OF RATIO ANALYSIS Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain decisions. It is only a means of understanding of financial strengths and weaknesses of a firm. There are a number of ratios which can be calculated from the information given in the financial statements, but the analyst has to select the appropriate data and calculate only a few appropriate ratios. The following are the four steps involved in the ratio analysis. Selection of relevant data from the financial statements depending upon the objective of analysis. Calculation of appropriate ratios from the above data. Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statements or the ratios of some other firm or the comparison with the ratios of the industry to which the firm belongs.

EDGE MANAGEMENT CONSULANTS PRIVATE LIMITED Detals of Balance sheet as at 31 March, 2012

LIABILITIES Notes As at 31 March 2012

Amount in ` As at 31 March 2011

EQUITY AND LIABILITIES Shareholders' funds Share capital Reserves and surplus

2.1 100,000 2.2 621,561 721,561 522,976 622,976 100,000

Current liabilities Other current liabilities TOTAL

2.3 421,990 1,143,551 1,211,078 1,834,054

ASSETS Current assets Trade Receivable Cash and cash equivalents Short-term loans and advances TOTAL

2.4 2.5 640,556 2.6 502,995 1,143,551 EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED B-19, GULMOHAR PARK, NEW DELHI-110049 Trial Balance as on 31st March 2012 BALANCE AS on 31.3.2012 Dr Cr NonNonCurrent Current Current Current 945,541 1,834,054 547,557 340,956

Particulars

Equity Share capital 100,000

Reserve & surplus -General reserve -Reserve u/s 45IC of RBI -(Deficit)/ surplus 01 - CAPITAL FUND

522975.80

522,976

100,000

Andhra Bank Cash in hand 06 - CASH AND BANK Sundry debtors : Ajay Krishan Mehrotra Shipra Hotels Limited Income tax refundabale- A.Y. 2010-11 Income tax refundabale- A.Y. 2011-12 Income tax refundabale- A.Y. 2012-13 Cenvat credit available for utilization Cenvat credit receivable 06 - CURRENT ASSETS Advance to staff 08 - ADVANCES

638952.41 1604.00

640,556

0.00

352995.00

150000.00

352,995

150,000

Provission for income tax Service tax payable 10% Service tax payable 12%

TDS payable Audit fees payable Professional charges payable 10 -CURRENT LIABILITIES & PROVISIONS Consultancy fee Interest on income tax refund 11 - INCOME

5056.00 416934.00 421,990 3600000.00 39646.00 3,639,646 -

Audit fees Salalry Staff welfare Printing & stationery Postage Conveyance Travelling charges Professional charges Telephone Electricity charges Misc. expenses Bank charges Rent Filling charges Newspaper books & periodicals Office expenses Internet charges Provision for income tax Director remuneration 12 - EXPENSES Grand Total 5056.00 1025800.00 19868.00 19553.00 18574.00 18241.00 19554.00 1920000.00 15213.39 19000.00 21434.00 746.00 66000.00 400.00 6238.00 5324.00 13960.00 44085.00 302014.00 3,541,060 4,331,617 352,995 4,684,612 4,584,612 -

100,000 4,684,612 -

EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED B-19, GULMOHAR PARK, NEW DELHI-110049 Trial Balance as on 31st March 2011 BALANCE AS on 31.3.2011 Particulars Dr Cr NonNonCurrent Current Current Current Equity Share capital 100,000

Reserve & surplus -General reserve -Reserve u/s 45IC of RBI -(Deficit)/ surplus 01 - CAPITAL FUND

384371.92

384,372

100,000

Andhra Bank Cash in hand 06 - CASH AND BANK Sundry debtors : Ajay Krishan Mehrotra Shipra Hotels Limited Income tax refundabale- A.Y. 2010-11 Income tax refundabale- A.Y. 2011-12 Income tax refundabale- A.Y. 2012-13 Cenvat credit available for utilization Cenvat credit receivable 06 - CURRENT ASSETS Advance to staff 08 - ADVANCES

440589.80 106967.00

0.00 -

547,557

43146.00 297810.00 377227.00 340337.00 21076.00 106901.00 1,058,520 100000.00 127,977

100,000

Provission for income tax Service tax payable 10% Service tax payable 12% TDS payable Audit fees payable Professional charges payable 10 -CURRENT LIABILITIES & PROVISIONS Consultancy fee Interest on income tax refund 11 - INCOME -

0.00 30900.00 4746.00 25698.00 4964.00 1144770.00 1,211,078 3723500.00 68143.00 3,791,643 -

Audit fees Salalry Staff welfare Printing & stationery Postage Conveyance Travelling charges Professional charges Telephone Electricity charges Misc. expenses Bank charges Rent Filling charges Newspaper books & periodicals Office expenses Internet charges Provision for income tax Director remuneration 12 - EXPENSES Grand Total

4964.00 1014600.00 16697.00 4593.00 6305.00 34843.00 40545.00 2040000.00 32118.12 36030.00 3750.00 359.00 65500.00 400.00 3031.00 6456.00 9566.00 61982.00 271300.00 3,653,039 5,359,116

127,977 5,487,093

5,387,093

100,000 5,487,093

EDGE MANAGEMENT CONSULTANTS PRIVATE LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 Amount in ` PREVIOUS YEAR 2011

CURRENT YEAR 2012 Cash flows from operating activities Profit before extraordinary items and tax Add : Non-cash adjustment Operating profit before working capital changes Add: (Increase)/Decrease Trade Recievable (Increase)/Decrease in Loans & Advances (Decrease)/ Increase in other current liabilities Cash used in operations Less: Taxes paid Cash flow/(used) from operating activities before extraordinary items Net Cash flow from operating activities after extraordinary item (A) Cash flows from investing activities Net cash flow from investing activities (B) Cash flows from financing activities Net cash flow from financing activities (C) Net (decrease)/increase in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of the period 142,671 142,671

200,586 200,586

340,956 442,546 (789,088) 137,085 (44,085) 93,000 93,000

49,533 572,682 (220,497) 602,304 (87,353) 514,951 514,951

93,000 547,557 640,556

514,951 32,606 547,557

EDGE MANAGEMENT CONSULANTS PRIVATE LIMITED Statement of profit and loss for the year ended 31 March 2012

Particular Notes

For the year ended 31 March 2012

Amount in ` For the year ended 31 March 2011

Income Revenue from operation Other income Total Revenue

2.7 3,600,000 2.8 39,646 3,639,646 68,143 3,791,643 3,723,500

Expenses Employee benefit expense Other expenses Total expenses

2.9 1,347,682 2.10 2,149,293 3,496,975 2,288,460 3,591,057 1,302,597

Profit/(loss) before tax Current tax Profit/(loss) for the year

142,671 44,085 98,586

200,586 61,982 138,604

Ration Analysis: Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial statement. Financial ratios are usually expressed in percentage or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a company's operations and fall into the following categories: liquidity ratios measure a firm's ability to meet its current obligations. o Working Capital

Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. A high working capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-term solvency of a business and in determining if a firm can pay its current liabilities when due.

Working Capital = Current Assets - Current Liabilities Working Capital 2012 = 11,43,551 4,21,990 Working Capital 2012 = 7,21,561 Rs. Working Capital 2011 = 18,34,054 12,11,078 Working Capital 2011 = 6,22,976 Rs.

o Acid Test or Quick Ratio

A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities. The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio will be lower than its current ratio. It is a stringent test of liquidity.

Acid Test or Quick Ratio = Cash + Marketable Securities + Accounts Receivable Current Liabilities

Acid Test or Quick Ratio 2012 =

6,40,556 4,21,990

Acid Test or Quick Ratio 2012 = 1.52:1 Acid Test or Quick Ratio 2011 = 8,88,573 12,11,078

Acid Test or Quick Ratio 2011 = 0.73 :1 o Current Ratio

Provides an indication of the liquidity of the business by comparing the amount of current assets to current liabilities. A business's current assets generally consist of cash, marketable securities, accounts receivable, and inventories. Current liabilities include accounts payable, current maturities of long-term debt, accrued income taxes, and other accrued expenses that are due within one year. In general, businesses prefer to have at least one dollar of current assets for every dollar of current liabilities. However, the normal current ratio fluctuates from industry to industry. A current ratio significantly higher than the industry average could indicate the existence of redundant assets. Conversely, a current ratio significantly lower than the industry average could indicate a lack of liquidity. Current Ratio = Current Assets Current Liabilities 11,43,551 4,21,990 2.71:1 18,34,054 12,11,078

Current Ratio 2012 =

Current Ratio 2012 = Current Ratio 2011 =

Current Ratio 2011= 1.51:1

o Cash Ratio

Indicates a conservative view of liquidity such as when a company has pledged its receivables and its inventory, or the analyst suspects severe liquidity problems with inventory and receivables. Cash Ratio = Cash Equivalents + Marketable Securities Current Liabilities Cash Ratio 2012 = 6,40,554 4,21,990 Cash Ratio 2012 = 1.51:1 Cash Ratio 2011 = 547557 12,11,078 Cash Ratio 2011 = 0.45:1 o Return on Investment or Return on Capital Employee o Return on Total Resources Return on Total Resources = Profit Before Tax*100 Total Assets Return on Total Resources 2012 = 1,42,671*100 1143551 Return on Total Resources 2012 = 12.48% Return on Total Resources 2011 = 2,00,586 *100 18,34,054 Return on Total Resources 2011 = 10.94% o Return on Capital Employee Return on Capital Employee = Profit Before Tax*100 Capital Employee

Return on Capital Employee 2012 = 1,42,671*100 7,21,561 Return on Capital Employee 2012 = 19.77

Return on Capital Employee 2011 =

200586*100 6,22,976

Return on Capital Employee 2011 = 32.19 o Return on Shareholder Fund Return on Shareholder Fund = Profit After Tax*100 Capital Employee Return on Shareholder Fund 2012 = 98,586*100 1,00,000

Return on Shareholder Fund 2012 = 98.58

Return on Shareholder Fund 2011 =

1,38,604*100 100,000

Return on Shareholder Fund 2011 = 138.60

ANALYSIS AND INTERPRETATION OF EDGE MANAGEMENT CONSULANTS PRIVATE LIMITED

FINANCIAL ANALYSIS Analysis Ratio PARTICULAR Working Capital Acid Test or Quick Ratio Current Ratio Cash Ratio Return on Total Resources Return on Capital Employee Return in Shareholder Fund YEAR 2012 7,21,561 Rs. 1.52 2.71 1.51 12.48% 19.77% 98.58 YEAR 2011 6,22,976 Rs. 0.73 1.51 0.45 10.94% 32.19% 138.60

Edge Management Consultants Private Limited Working Capital for the past two year has been as follows:

Year 2012 2011

Working Capital (in lakhs) 7.22 6.23

Working Capital (in lakhs)


7.4 7.2 7 6.8 6.6 6.4 6.2 6 5.8 5.6 2012 2011 Working Capital (in lakhs)

Year

Working Capital in lakhs there are more capital than next year. 2012 working capital will be 7.22 Lakhs. 2011 working capital will be 6.23 lakhs. It will be good position of company. It is more than 1Lakhs working capital.

Acid Test or Quick Ratio Edge Management Consultants Private Limited Acid Test or Quick Ratio for the past two year has been as follows: The acid test ratio is a measure of liquidity designed to overcome this defect of the current ratio. It is often referred to as quick ratio because it is a measurement of firms ability to convert its current assets quickly into cash in order to meet its current liabilities. The acid test ratio is calculated by dividing the quick assets by the current liabilities. The term quick assets include cash and bank balances, short term marketable securities and debtors/receivables. The usefulness of the ratio lies in the fact that it is widely accepted as the

best available test of liquidity position of the firm. An acid test ratio of 1:1 is considered satisfactory. Years 2012 2011 Quick Ratio 1.52 0.73

Quick Ratio
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0

2012

22011

Edge Management Consultants Private Limited acid test ratio shows a fluctuating trend over past two years though it is more than 1:1. Thus we can say that Edge Management Consultants Private Limited does not face any problems in liquidity front. It has sufficient assets to discharge its short-term obligations as an when they become due. Thus, it can be concluded that Mescots liquidity ratios like current ratio, liquid ratio are satisfactory and it can be inferred from them that the firm will be able to meet its short-term obligations as when they become due. Another ratio that is important is current assets as a proportion to total assets. This ratio tells how much funds of the company are employed in current assets as compared to total amount of funds invested in total assets. 2012 is a satisfactory it will more than 1.52:1.

Edge Management Consultants Private Limited current ratio for the past two years has been as follows:

Years 2011 2012

Current Ratio 1.51 2.71

Current Ratio
3 2.5 2 1.5 1 0.5 0 Years 2011 2012

Its current ratio has been more than 1.51:1 for 2011 and 2.71:1 2012 which indicates that it had no problems in discharging its short-term obligations in the past. It seems that more amounts are invested in current assets than is desirable. Also its quite possible that it has not made full utilization of its current borrowing capacity. But in year 2012, Edge Management Consultants Private Limited current ratio went will be increase and current assets increase by the year.

Cash Ration: Indicates a conservative view of liquidity such as when a company has pledged its receivables and its inventory, or the analyst suspects severe liquidity problems with inventory and receivables.

Years

Cash ratio

2011 2012

0.45 1.51

Cash Ratio
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Years 2011 2012

Cash ratio for Edge Management Consultants Private Limited over the past few years shows a declining trend indicating that over the years less amount is being held in form of cash and bank balance and marketable securities and more is being invested in other current assets such as debtors or inventories. Ideally cash ratio should be fifty percent of current assets or 1.51:1. But for Edge Management Consultants Private Limited it is less than even 1:1 for all the years. Years Return on Total Resources 2011 10.94% 2012 12.48%

Return on Tatal Resources

0 Years 0

10.94% 2011 10.94%

12.48% 2012 12.48%

Year 2011 2012

Return on Capital Employee 32.19% 19.77%

Return on Capital Employee

32.19%

19.77%

0 Year 2011 2012

Years 2011 2012

Return in Shareholder Fund 138.60 98.58

Return in shareholder fund


160 140 120 100 80 60 40 20 0 Years 2011 2012