Introduction to the project

Financial statements are records that provide an indication of the organizations financial status.
It quantitatively describes the financial health of the company. It helps in the evaluation of
companys prospects and risks for the purpose of making business decisions. The objective of
financial statements is to provide information about the financial position, performance and
changes in financial position of an enterprise that is useful to a wide range of users in making
economic decisions. Financial statements should be understandable, relevant, reliable and
comparable. They give an accurate picture of a companys condition and operating results in a
condensed form. Reported assets, liabilities and equity are directly related to an organization's
financial position whereas reported income and expenses are directly related to an organization's
financial performance. Analysis and interpretation of financial statements helps in determining
the liquidity position, long term solvency, financial viability, profitability and soundness of a
firm. There are four basic types of financial statements: balance sheet, income statements, cash
flow statements, and statements of retained earnings.

The manufacturing sector is part of the goods-producing industries supersector group.
The manufacturing sector comprises establishments engaed in the mechanical , physical, or
chemical transformation of materials, substances, or components in to new products.
Establishment in the manufacturing sector are often described as plants, factories, or mills and
characteristically use power driven machines and materials handling equipment. However,
establishments that transform materials or substances into new products by hand ot in the
workers home and those engaged in selling to the general public products made on the same
premises from which they are sold, such as bakeries, candy stores, and custom tailors, may also
be included in this sector. Manufacturing Establishment may process materials or many contract
with other establishments to their materials for them. Both types of establishments are included
in manufacturing

Indias manufacturing sector could reach US$ 1 trillion by 2025, as per a study by global
management consulting firm McKinsey and Company. This could be achieved on the back of the
continually growing demand in the country and the inclination of multinational corporations to
establish low-cost plants in India. Up to 90 million domestic jobs could be created by 2025, with
the manufacturing sector contributing to about 2530 per cent of Indias gross domestic product
(GDP).
Indias expanding economy offers domestic entrepreneurs and international players alike,
opportunities to invest. The Government of India knowing the importance of the sector to the
countrys industrial development has taken a number of steps to further encourage investment
and improve the economy.

Indias manufacturing sector presently contributes about 16 % to its GDP.





OBJECTIVES of study

To understand, analyze and interpret the basic concepts of financial statements of Alpha
dies & pattern (India) Pvt. Ltd.
Interpretation of financial ratios and their significance.



INTRODUCTION TO FINANCIAL ANALYSIS
Management should be particularly interested in knowing financial strengths of the firm to make
their best use to be able to spot out financial weaknesses of the firm to take suitable corrective
actions. The future plans of the firm should be laid down in view of the firms financial strengths
and weaknesses. Thus, financial analysis is the starting point for making plans, before using any
sophisticated forecasting and planning procedures. Understanding the past is a prerequisite for
anticipating the future.
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;

Financial Analysis is the process of identifying the financial strengths and weaknesses 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 the firm, or by parties
outside the firm, viz.owners, creditors, investors and others. The nature of analysis will differ;
depending on the purpose of the analyst.
Trade Creditors are interested in firms ability to meet their claims over a very short period of
time. Their analysis will confine to the firmss liquidity position.
Suppliers of long term debt, on the other hand, are concerned with the firms long term solvency
and survival.They analyse the firms profitability over time, its ability to generate cash to be able
to pay interest and repay principal and the relationship between various resources of funds. long
term creditors do analyse the historical financial statements, but they place more emphasis on the
firms projected, or proforma, financial statements to make analysis about its future solvency and
profitability.
I nvestors, who have invested their money in the firms shares, are most concerned about the
firms earnings.They restore more confidence in those firms that show steady growth in the
earnings. As such , they concentrate on the analysis of the firms present and future profitability.
They are also interested in the firms financial structure to the extent it influences the forms
earnings ability and risk.
Financial analysts often assess the following elements of a firm:
1. Profitability - its ability to earn income and sustain growth in both the short- and long-term.
A company's degree of profitability is usually based on the income statement, which reports on
the company's results of operations;
2. Solvency - its ability to pay its obligation to creditors and other third parties in the long-term;
3. Liquidity - its ability to maintain positive cash flow, while satisfying immediate obligations;
4. Stability - the firm's ability to remain in business in the long run, without having to sustain
significant losses in the conduct of its business. Assessing a company's stability requires the use
of both the income statement and the balance sheet, as well as other financial and non-financial
indicators. etc.

Purposes of the Financial Analysis :
screening proposed investment or mergers,
examining managerial, operating or other problem areas,
evaluating management capability,
predicting future through forecasting methods,
ability to meet obligations when due,
the appropriateness of capital structure, and
cash generating potentials for growth.




FINANCIAL STATEMENTS

Financial statements (or financial reports) are formal records of the financial activities of a
business, person, or other entity. Financial statements provide an overview of a business or
person's financial condition in both short and long term. All the relevant financial information of
a business enterprise, presented in a structured manner and in a form easy to understand is called
the financial statements. There are four basic financial statements:

The four financial statements are,
BALANCE SHEET
It shows assets, liabilities and ownership of a company at a given time or date. It is also known
as Statement of Financial Position or Statement of Financial Conditions. This statement is
primarily of interest to the Commercial Banks who are security oriented. A good financial
position safeguards their existing and/or under consideration loans and advances.
Under the accounting equation, assets are always equal to (and thus in balance with) liabilities
and owner's equity; hence, the term 'balance sheet.'
It is also referred to as statement of financial position or condition, reports on a
company's assets, liabilities, and Ownership equity as of a given point in time.

INCOME STATEMENT
This covers income, costs, expenses and the residual profit. Also referred to P&L or Profit &
Loss Account, this is mainly studied by shareholders who expect dividends out of profit or
possibility of Stock Dividend.
As against Balance Sheet which is at a specified time or date, Income Statement is prepared for a
particular period usually one year
It is also referred to as Profit and Loss statement (or "P&L"), reports on a
company's income, expenses, and profits over a period of time. Profit & Loss account provide
information on the operation of the enterprise. These include sale and the various expenses
incurred during the processing state.

STATEMENT OF RETAINED EARNINGS
It explains the changes in equity resulting from earnings or losses and dividend declared. This is
often combined with the income statement or shown as part of Equity. Its main purpose is to
reconcile the beginning and ending retained earnings for the period, using information such as
net income from the other financial statements. It also known as Equity Statement or a statement
of owner's equity, or statement of shareholders' equity.


STATEMENT OF CASH FLOWS
Shows cash flow activities, particularly operating, investing and financing activities of the
company. It complements balance sheet and income statement and is a mandatory part of a
companys financial report. It enables the users to find out how operating are running, where the
money is coming from and how it is being spent.
It reports on a company's cash flow activities, particularly its operating, investing and financing
activities.


Advantages of financial statement analysis

The different advantages of financial statement analysis are listed below:
The most important benefit if financial statement analysis is that it provides an idea to the
investors about deciding on investing their funds in a particular company.
Another advantage of financial statement analysis is that regulatory authorities like IASB can
ensure the company following the required accounting standards.
Financial statement analysis is helpful to the government agencies in analyzing the taxation
owed to the firm.
Above all, the company is able to analyze its own performance over a specific time period.

Limitations of financial statement analysis

While financial statement analysis is an excellent tool, there are several issues to be aware of that
can interfere with your interpretation of the analysis results. These issues are:
Comparability between periods. The company preparing the financial statements may have
changed the accounts in which it stores financial information, so that results may differ from
period to period. For example, an expense may appear in the cost of goods sold in one period,
and in administrative expenses in another period.
Comparability between companies. An analyst frequently compares the financial ratios of
different companies in order to see how they match up against each other. However, each
company may aggregate financial information differently, so that the results of their ratios are
not really comparable. This can lead an analyst to draw incorrect conclusions about the results of
a company in comparison to its competitors.
Operational information. Financial analysis only reviews a company's financial information,
not its operational information, so you cannot see a variety of key indicators of future
performance, such as the size of the order backlog, or changes in warranty claims. Thus,
financial analysis only presents part of the total picture.
Companies have a choice of accounting methods (for example, inventory LIFO vs FIFO and
depreciation methods). These differences impact ratios and make it difficult to compare
companies using different methods

The framework for financial statement analysis :
State the objective and context: Determine what questions the analysis seeks to answer, the
form in which this information needs to be presented, and what resources and how much time is
available to perform the analysis.
Gather data: Acquire the company's financial statements and other relevant data on its industry
and the economy. Ask questions f the company's management, suppliers, and customers and visit
company sites.
Process the data: Make any appropriate adjustments to the financial statements. Calculate
ratios. Prepare exhibits such as graphs and common-size balance sheets.
Analyze and interpret the data: Use the data to answer the questions stated in the first step.
Decide what conclusions or recommendations the information supports.
Report the conclusions or recommendations: Prepare a report and communicate it to its
intended audience. Be sure the report and its dissemination comply with the Code and Standards
that relate to investment analysis and recommendations.
Update the analysis: Repeat these steps periodically and change the conclusions or
recommendations when necessary.

Types And Methods of financial analysis
There are various types of users like investors, creditors, customers, financial institutions,
employees, potential investors, government and general public analyze the financial reports in
different angles for different purposes. However all kinds of analysis can be classified on the
basis of their users and the method of operations followed in the analysis.
Here is a chart which describes it better.



External Analysis
The name itself suggests that this type of analysis is done by the outsiders who do not have
access to the detailed accounting information of the business firm. For this type of analysis
external users like investors, creditors, credit agencies, general public etc. mostly rely on the
published financial statements.

Internal Analysis
This analysis is performed by the executives and employees of the business firm. They have full
access to all internal accounting records of the business concern. They do all these analysis only
for the management of the business enterprises.On the basis of method of operations followed in
the analysis we can again categorize analysis in to Dynamic or horizontal horizontal analysis
and static or vertical analysis.

DynamicAnalysis

In this analysis the financial data of the company is compared for several years. A base year
which is normally the beginning year is chosen and the financial data of various years are
compared with the standard or the base year. Dynamic analysis helps the management and other
users to find out the trend of items of financial statements that have changed significantly during
the period. Comparison of an item over several periods with the base year may show a trend
developing. Comparative statements and trend percentages are two tools used in dynamic
analysis.

Static Analysis
Static analysis refers to study of relationships of various items in the financial statement of one
financial year only. In static analysis items of financial statement of a year are compared with the
base selected from the same year's statement. Common-size financial statements and financial
ratios are two tools used in static or vertical analysis. As items for one time period are taken for
analysis in static analysis so it is not conducive for proper analysis of financial statements.
However it may be analyzed with dynamic analysis to make it more meaningful and effective.
Number of methods or devices are used for analysis of financial statements are as follows,




1. Comparative Statements

Under comparative statement, financial statements like balance sheet and income statement are
prepared in comparative form for financial analysis. The items of financial statements are shown
in a comparative form to give an idea of financial position of the business at two or more
periods. As the items are shown in a comparative form so the analysts are able to draw useful
conclusion. out of it. For example when sales figure of current period is compared with the
previous periods then the analysts will be able to study the trend of sales over different period of
time.
The two comparative statements are
Comparative balance sheet and
Comparative income statement

In comparative balance sheet items of two or more balance sheets of the same business concern
are shown on different dates. Changes in items between two or more balance sheets make
analysts to draw conclusions about the progress of the concern. Comparative balance sheet helps
to study the aspects such as current financial and liquidity position, long term financial position
and the profitability of the concern.
Current financial position of the concern can be known from the changes in working capital of
the business firm. Working capital is the excess of current assets over current liabilities. An
increase in working capital shows the improvement of current financial position. But if the
Comparative Statements
Trend Analysis
Common-size Statements
Cost-volume-profit Analysis
Funds flow Analysis
Cash flow Analysis
Ratio Analysis
increase of working capital were mainly for the increase of inventory due to accumulation
of stock for want of customers, decrease in demand or inadequate sales promotion then it is not
a good financial position of the business.
Liquid assets like cash, bank, bills receivables, debtors etc. show an increase in the current year
than the previous years then it will improve the liquidity position of the business concern.
The long term financial position of the business can be known from the changes in fixed assets,
long term liabilities and capital. A good financial policy will be to finance the fixed assets by the
issue of either long term securities such as debentures, bonds, loan from financial institutions or
issue of fresh share capital. An increase in fixed assets should be compared to the increase in
long term loan and cap[ital. If increase in fixed assets is more than the increase in long term
loans then part of fixed assets has been financed from working capital. On the other hand if the
increase in long term loan is more than the increase in fixed assets then the fixed assets have not
only been financed from the long term sources but part of working capital has also been financed
from long term sources. A wise policy will be to finance fixed assets by raising long term funds.
The profitability of the business concern can be studied from the comparative balance sheet. An
increase in the balance of profit and loss account and other resources created from profit will
mean an increase in profitability of the concern. The decrease in such accounts represents
deterioration in profitability of the concern.

2. Trend Analysis:

From the name of the analysis it is clear that here financial statements are analyzed on the basis
of trends of figures in the statements. In trend analysis percentage of each item of statement is
calculated in relation to the same item in the base year. Here the information for number of years
is taken and generally the beginning year is taken as the base year. The base year should be a
normal year. The figure of the base year is taken as 100 and trend percentages for other years are
calculated on the basis of base year. Down or upward trends of figures of items are seen in this
analysis.
For example, if current assets figure for the year 2005 to 2010 to be studied then current assets
of 2005 is taken as 100 and percentage of current assets for other years will be calculated in
relation to the base year.
The interpretation of trend analysis should be done properly. The mere increase or decrease in
trend percentages may provides misleading information if studied in isolation. An increase of
current assets by 25% may be good for the concern but if at the same time current liabilities also
increases by 25% then this increase will not be favorable. Similarly the increase of sales may not
improve the profitability if the cost of production also increases equivalently.
3. Common-size Statement:

In common-size statements, balance sheet and income statement the figures are shown in
percentages. The figures of these statements are expressed as percentages of total assets, total
liabilities and total sales. Total assets are taken as 100 and different assets are shown as
percentage of total assets. Similarly total liabilities are taken as 100 and different liabilities are
expressed as a percentage of of total liabilities. Here every item of the statements is expressed as
a percentage of the total 100.
Common-size Balance Sheet- In common-size balance sheet the total assets and liabilities are
taken as 100 and each asset and liability is expressed as a percentage of the total 100. Common-
size balance sheet can be used to compare companies of different sizes.
Common-size Income Statement- In common-size income statement the items in the income
statement are shown in relation to sales. Each item in the statement is expressed as a percentage
of sales. An increase or decrease in sales will directly affect the selling expenses not the
administrative and financial expenses. But if the sales volume increases considerably then it may
increase the administrative and financial expenses to certain extent. So a relationship is set
between sales and other items to evaluate the operational activities of the business concern.

4. Fund flow statement :
The term fund means bcash and the fund flow statement depicts the cash receipts and cash disbursements
payments. It highlights the changes in the cash receipts and payments as a cash flow statement in addition
to the cash balances i.e., opening cash balance and closing cash balance. Contrary to the earlier, the fund
means working capital i.e., the differences between the current assets and current liabilities. The term
flow denotes the change. Flow of funds means the change in funds or in working capital. The change on
the working capital leads to the net changes taken place on the working capital i.e., especially due to
either increase or decrease in the working capital . the change in the volume of the working capital due to
numerous transactions. Some of the transactions may lead to increase or decrease the volume of working
capital. Some other transactions neother registers an nor decrease in the volume of working capital
According to Foulke a statement of bsources and applications of funds is a technical device designed to
analyse the changes to the financial conditions of a business enterpris in between two dates
Various Facets of Fund flow statement are as follows:
Statement of sources and application of funds
Statement changes in financial position
Analysis of working capital changes and
Movement of funds statement
Objectives of fund flow statement analysis:
It pinpoints the mobilization of resources and the further utilization of resources
It highlights the financing of the general expansion of the business firms
It exemplifies the utilization of debt finance in the structure of financing

5. Cash flow:

The cash flow statement shows how much cash comes in and goes out of the company over
the quarter or the year.
Three Sections of the Cash Flow Statement
Companies produce and consume cash in different ways, so the cash flow statement is divided
into three sections: cash flows from operations, financing and investing. Basically, the sections
on operations and financing show how the company gets its cash, while the investing section
shows how the company spends its cash.
Cash Flows from Operating Activities
This section shows how much cash comes from sales of the company's goods and services, less
the amount of cash needed to make and sell those goods and services. Investors tend to prefer
companies that produce a net positive cash flow from operating activities.
Cash Flows from Investing Activities
This section largely reflects the amount of cash the company has spent on capital expenditures,
such as new equipment or anything else that needed to keep the business going. It also includes
acquisitions of other businesses and monetary investments such as money market funds.

6. CVP analysis:
CVP analysis expands the use of information provided by break-even analysis. A critical part of
CVP analysis is the point where total revenues equal total costs (both fixed and variable costs).
At this break-even point, a company will experience no income or loss. This break-even point
can be an initial examination that precedes more detailed CVP analysis.
CVP analysis employs the same basic assumptions as in breakeven analysis. The assumptions
underlying CVP analysis are
The behavior of both costs and revenues is linear throughout the relevant range of
activity. Costs can be classified accurately as either fixed or variable.
Changes in activity are the only factors that affect costs.
All units produced are sold
When a company sells more than one type of product, the sales mix will remain constant.
The components of CVP analysis are:
Level or volume of activity
Unit selling prices
Variable cost per unit
Total fixed costs
7. Ratio Analysis
Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication
of a firm's financial performance in several key areas. The ratios are categorized as Short-term
Solvency Ratios, Debt Management Ratios, Asset Management Ratios, Profitability Ratios, and
Market Value Ratios.
Ratio Analysis as a tool possesses several important features. The data, which are provided by
financial statements, are readily available. The computation of ratios facilitates the comparison
of firms which differ in size. Ratios can be used to compare a firm's financial performance with
industry averages. In addition, ratios can be used in a form of trend analysis to identify areas
where performance has improved or deteriorated over time.
Because Ratio Analysis is based upon Accounting information, its effectiveness is limited by the
distortions which arise in financial statements due to such things as Historical Cost Accounting
and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis,
to obtain a quick indication of a firm's performance and to identify areas which need to be
investigated further.
Its a tool which enables the banker or lender to arrive at the following factors :
Liquidity position
Profitability
Solvency
Financial Stability
Quality of the Management
Safety & Security of the loans & advances to be or already been provided
Before looking at the ratios there are a number of cautionary points concerning their use that
need to be identified :
a. The dates and duration of the financial statements being compared should be the same. If
not, the effects of seasonality may cause erroneous conclusions to be drawn.
b. The accounts to be compared should have been prepared on the same bases. Different
treatment of stocks or depreciations or asset valuations will distort the results.
In order to judge the overall performance of the firm a group of ratios, as opposed to just one or
two should be used. In order to identify trends at least three years of ratios are normally required
Ways to express financial ratio
Single absolute Ratio
Group ratio
Historical comparison
Inter firm comparision
Projected ratios
Ways to express financial ratio
As Percentage - such as 25% or 50% . For example if net profit is Rs.25,000/- and the
sales is Rs.1,00,000/- then the net profit can be said to be 25% of the sales.
As Proportion - The above figures may be expressed in terms of the relationship
between net profit to sales as 1 : 4.
As Pure Number /Times - The same can also be expressed in an alternatively way such
as the sale is 4 times of the net profit or profit is 1/4
th
of the sales.
Ratios can be divided into four major categories:

Profitability Sustainability
Operational Efficiency
Liquidity
Leverage (Funding Debt, Equity, Grants)

The ratios presented below represent some of the standard ratios used in business practice.

Profitability Sustainability Ratios
It shows , How well is business performing over a specific period, and will enterprise have the
financial resources to continue serving its constituents tomorrow as well as today?

Ratio What does it tell ?
Sales Growth =

Current Period
Previous Period Sales
Previous Period Sales
Percentage increase (decrease) in sales between two time periods.

If overall costs and inflation are increasing, then you should see a
corresponding increase in sales. If not, then may need to adjust pricing policy
to keep up with costs.
Operating Self-
Sufficiency =

Business Revenue
Total Expenses
Measures the degree to which the organizations expenses are covered by its
core business and is able to function independent of grant support.

For the purpose of this calculation, business revenue should exclude any non-
operating revenues or contributions. Total expenses should include all
expenses (operating and non-operating) including social costs.

A ratio of 1 means you do not depend on grant revenue or other funding.
Gross Profit Margin
=

Gross Profit Total
Sales
Total Sales
How much profit is earned on your products without considering indirect costs.

Is your gross profit margin improving? Small changes in gross margin can
significantly affect profitability. Is there enough gross profit to cover your
indirect costs. Is there a positive gross margin on all products?
Net Profit Margin =

Net Profit
Sales
How much money are you making per every $ of sales. This ratio measures
your ability to cover all operating costs including indirect costs
Return on Assets =

Net Profit Average
Total Assets
Measures your ability to turn assets into profit. This is a very useful measure of
comparison within an industry.

A low ratio compared to industry may mean that your competitors have found
a way to operate more efficiently. After tax interest expense can be added back
to numerator since ROA measures profitability on all assets whether or not
they are financed by equity or debt
Return on Equity =

Rate of return on investment by shareholders.

Net Profit
Average Shareholder
Equity
This is one of the most important ratios to investors. Are you making enough
profit to compensate for the risk of being in business?

How does this return compare to less risky investments like bonds?


Operational Efficiency Ratios
How efficiently are you utilizing your assets and managing liabilities? These ratios are used to
compare performance over multiple periods.

Ratio What does it tell you?
Inventory Turnover =

Cost of Sales
Average Inventory

Days in Inventory =

Average Inventory
Cost of Sales x 365
The number of times turn inventory over into sales during the year or
how many days it takes to sell inventory.

This is a good indication of production and purchasing efficiency. A
high ratio indicates inventory is selling quickly and that little unused
inventory is being stored (or could also mean inventory shortage). If the
ratio is low, it suggests overstocking, obsolete inventory or selling
issues.
Total Asset Turnover =

Revenue
Average Total Assets

Fixed Asset Turnover =

Revenue
Average Fixed Assets
How efficiently your business generates sales on each dollar of assets.

An increasing ratio indicates you are using your assets more
productively.


Liquidity Ratios
Does your enterprise have enough cash on an ongoing basis to meet its operational obligations?
This is an important indication of financial health.

Ratio What does it tell you?
Current Ratio =

Current Assets
Current Liabilities
Measures your ability to meet short term obligations with short term
assets., a useful indicator of cash flow in the near future.

A social enterprise needs to ensure that it can pay its salaries, bills and

(also known as Working
Capital Ratio)
expenses on time. Failure to pay loans on time may limit your future
access to credit and therefore your ability to leverage operations and
growth.

A ratio less that 1 may indicate liquidity issues. A very high current ratio
may mean there is excess cash that should possibly be invested
elsewhere in the business or that there is too much inventory. Most
believe that a ratio between 1.2 and 2.0 is sufficient.

The one problem with the current ratio is that it does not take into
account the timing of cash flows. For example, you may have to pay
most of your short term obligations in the next week though inventory
on hand will not be sold for another three weeks or account receivable
collections are slow.
Quick Ratio =

Cash +AR + Marketable
Securities
Current Liabilities
A more stringent liquidity test that indicates if a firm has enough short-
term assets (without selling inventory) to cover its immediate liabilities.

This is often referred to as the acid test because it only looks at the
companys most liquid assets only (excludes inventory) that can be
quickly converted to cash).

A ratio of 1:1 means that a social enterprise can pay its bills without
having to sell inventory.
Working Capital =

Current Assets Current
Liabilities
WC is a measure of cash flow and should always be a positive number.
It measures the amount of capital invested in resources that are subject
to quick turnover. Lenders often use this number to evaluate your ability
to weather hard times. Many lenders will require that a certain level of
WC be maintained.



Leverage Ratios
To what degree does an enterprise utilize borrowed money and what is its level of risk?
Lenders often use this information to determine a businesss ability to repay debt.

Ratio What does it tell you?
Debt to Equity =

Short Term Debt + Long
Term Debt
Total Equity (including
Compares capital invested by owners/funders (including grants) and
funds provided by lenders.

Lenders have priority over equity investors on an enterprises assets.
Lenders want to see that there is some cushion to draw upon in case of
financial difificulty. The more equity there is, the more likely a lender
grants) will be repaid. Most lenders impose limits on the debt/equity ratio,
commonly 2:1 for small business loans.

Too much debt can put business at risk, but too little debt may limit your
potential. Owners want to get some leverage on their investment to boost
profits. This has to be balanced with the ability to service debt.
Interest Coverage =

EBITDA Interest
Expense
Measures your ability to meet interest payment obligations with business
income. Ratios close to 1 indicates company having difficulty generating
enough cash flow to pay interest on its debt. Ideally, a ratio should be
over 1.5

In short,
To summarize, financial statement analysis is concerned with analyzing the balance sheet and the
income statement of a business to interpret the business and financial ratios of a business for
financial representations, business evaluation, in addition to financial forecasting.



COMPANY PROFILE:

INTRODUCTION:
Alpha Dies and Pattern (I) Pvt. Ltd. engaged in manufacturing of Gravitydies , Moulds, Pattern Eqpt.Press
Tools, Fixtures, by using CAD CAM Technology. The Company is established in the Year of----
---- at a space area of 18,000 Sq. Feet. Currently we have A Total team of 120 persons consisting of
Qualified Engineers. Pattern & Die Makers, Trained CNC & Conventional M/c operators, Tool room
fitters.
The organization is having back up of its two sister concern namely Victory Precisions Pvt. Ltd.
engaged in Manufacturing of Various Precision Components with Raw Material Base of Aluminum,
SGI, GI and Alpha Reverse Engineering and Design Solutions Pvt. Ltd.. engaged in
designing of various projects with ultra modern software's like CATIA, PRO E, CAD-CAM.

Vision-
Achieve sustainable growth and complete customer satisfaction by Quality People , Processes,
Performance & Product

Mission
We want to be a preferred global supplier for critical components , value added parts and processes

Company infrastructure:
1) CNC Vertical Machining Centers :
A} MAZAK VERTICAL HIGH SPEED MACHININING CENTRE :
B) TAKUMI VERTICAL HIGH SPEED MACHININING CENTRE
C) MAKINO DOUBLE COLUMN VERTICAL MACHINING CENTER
D} BFW VERTICAL MACHININING CENTRE
E} HARTFORT MAKE VERTICAL MACHINING CENTRE
F) HAAS MAKE VERTICAL MACHINING CENTRE --- 4 axis
G} VISION WIDE MAKE VERTICAL MACHINING CENTRE
I} CMM MACHINE FARO DIGITAL ARM


2) CAD CAM Facility
CIMATRON (Solid & Surface modeling) 4 Seats
I DEAS VERSION 8M1 -- 2 Seats
Unigraphics 2 seats, TEBIS --- 2 seats
Delcam ---6 seats

3) GRANITE SURFACE PLATES
4) SPARK EROSION MACHINE----------Electronica Make
5) SURFACE GRINDER 1100 * 550 * 500
6) HMT make FN3V AND FN3H milling Machine-2 nos
7) Comet make Horizontals Boring M/c 1500X1500X1100
8) Lathe Machine 3 nos
9) SIP make jig boring m/c 1200X800X1000
10) SIP make jig boring m/c 650X450X450
11) Plano Milling Machine 3000 * 2000 * 1500

Company Core Competence

Certification: ISO 9001-2000 BY CERMET, Italy
Modeling Fifteen engineers for full fledged modeling activity working on Unigraphics and
Ideas software, These engineers are having experience in pattern making , gravity die casting
and Press Tools & fixturing projects.
Tool path generation 8 engineers working on 3 seats of Cimatron & 2 seats of Tebis and 3 of
Delcam. These persons are having experience on CNC machines and assembling work.
CNC Machining 3 engineers working as shift supervisors along with 35 CNC operators having
knowledge of CNC machines and tooling.
Assembling & Finishing 25 Pattern & die makers, Fitters having experience in foundry
industry, Big assemblies and experience in gravity die casting and molding industry.
Conventional Machining 3 Supervisors and 12 operators to work on conventional machines
such as lathe, milling and drilling m/cs and Jig boring Machine. Surface grinders etc.
In addition to the above, there are continuous training programs arranged on various subjects for
the Company employees for up gradation in knowledge and continuous Improvement.


ESTEEMED CUSTOMER

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M/s PUNJAB TRACTORS LTD
M/s. HANSEN DRIVES
M/s PHILIPS INDIA LTD.
M/s. CATTERPILLAR INDIA LTD
M/s TAL MFG SOLUTIONS
M/s. KIRLOSKAR BROTHERS- Kirloskarwadi
M/S LARSEN & TUBRO
M/s. ATLAS AUTOMOTIVE COMPONENTS. LTD
M/s ATLAS COPCO PUNE/NASIK
M/s. MAHINDRA & MAHINDRA LTD.
M/s HINDUSTAN MOTORS -Hosur
M/s. NEW HOLLAND TRACTORS
M/s EICHER MOTORS LTD.
M/s. ENNORE FOUNDRY CHENNAI
M/s TVS AUTOLEC CHENNAI
25 M/s HINDUSTAN AERONAUTICS LTD
26 M/s SUNDARAM CLAYTON LTD
27. M/s PEFCO ( KORES ) FOUNDRY
28 M/s AMTEK AUTO - BHIVADI

Organisational structure:

PRODUCT:
Product Gallery :
FUTURE PLANS:
ACHIEVEMENT: