FYP Ratio Analysis Krishak Bharat ASH

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A
PROJ
ECT
REPO
RT
O
N
RATI
O
ANA
LYSI
S
UND
ERT
AKE
N AT
KRISHAK
BHARATI COOPERATIVE
LIMITED
S
U
R
A
T
MASTER OF BUSINESS
ADMINISTRATION
(FINANCE)
SUBMITTED
IN PARTIAL
FULFILLMEN
T OF THE
REQUIREMEN
TS FOR
AWARD OF
MASTER OF
BUSINESS
ADMINISTRAT
ION OF TILAK
MAHARASHT
RA
UNIVERSITY,
PUNE.
SUB
MITT
ED
BY
HUZAIF
AA
SOPARI
WALA
PRN:
07208
01349
8
O
F
PAI INTERNATIONAL
CENTER FOR
MANAGEMENT
EX
EC
EL
LE
NC
E
TILAK
MAHARASHT
RA
UNIVERSITY
GULTEK
DI,
PUNE
411037.
1
P
R
E
F
A
C
E
have
really
enjoyed
working on this project. In the

starting phase, I found this
work difficult, but with ample
guidance of all staff members of
Krishak
the
Bharati
Cooperative Limited, Patna. I

was able to complete my work
successfully.
It is the responsibility of
the
Management
organization
newly
remove
joined
his
to
of
guide
each
individual
anxiety
an
in
to
an
organizational environment and

help him in settling down.
In this project I
have covered the aspect relating
to
training
followed
management
by
the
of
an
organization. Under this study I

have put in my best efforts to
make this project successful.
While working on
this project I got exposure to
the training practice use by
the organization.
ACKN
OWLE
DGEM
ENT
Mans
quest
for
knowledge never ends. Theory

and practice are essential and
complementary to each other I
am thankful for the assistance
received
from
individuals
in
various
making
this
project successfull. I find no

words to express my gratitude
towards
those
constantly
involved
who
with
are
us
throughout my project in L.N.

MISHRA
INSTITUTE
OF
ECONOMIC DEVELOPMENT &

SOCIAL CHANGE.
I would like to give

my special thanks and
regards to
Mr.T.S.Thomas
Manager,
Surat
(General
who
has
helped me to carry out this

project as my project in charge
under
his
guidance
and
blessing I was able to fulfill the

requirements of my university.
would
also
like
to
Mr.A.M.S.Belim,
thanks
Mr.M.A,Patwa
(F&A
Department),
for
their
most
precious contribution and their

help in my project. I am very
much thankful to other staff
members of Kribhco, Patna.
Without their help I am not
able to finish this project.
I am highly obliged to
the
management
L.N.MISHRA
INSTITUTE
of
OF
ECONOMIC DEVELOPMENT &

SOCIAL
CHANGE
For
allocating me a very interesting

and challenging project. I am
sincerely thankful to my project
guide Dr. Shweta Rai and our
Director
Mishra
Dr.
for
Kameshwar
providing
the
resources for the project. Their

guidance and support was a
constant source of inspiration
for me.
EXECUT
IVE
SUMMA
RY
This summer project
report is prepared at
KRISHAK BHARATI
COOPERATIVE
LIMITED.
at
PATNA on RATIO ANALYSIS

as a part of curriculum of the
BBA program.
I have selected this topic
to
measures
the
financial
position of the company and

firm profit ability as well as its
credit policy with the help of
ratio analysis. Ratio analysis is
a
widely
used
of
financial
analysis. It is defined as the

systematic
interpret
use
of
the
ratio
to
financial
statements so that strengths

and weakness of a firm as well
as its historical performance
and current financial condition
can be determined.
The main Objectives are:
To know the financial

condition of the company.
To know the strength and
weakness
of
the
company
To know that company
has
enough
asset
compare to its liabilities
To
study
management.
inventory
To
study
companys
ability to earn
profit
compare to its sales
To analyze the liquidity

position of the company.
To
study
receivable
management
and
companys credit policy.
To achieve these
objectives, I have studied
fifteen ratio analysis
which are as below
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Ratio analysis :
o
Current Ratio
Quick Ratio
Inventory Ratio
o
I
n
v
e
n
t
o
r
y
t
u
r
n
o
v
e
r
R
a
t
i
o
o
D
e
b
t
o
r
t
u
r
n
o
v
e
r
r
a
t
i
o
o Debtors
conversion period
o
C
u
r
r
e
n
t
a
s
s
e
t
s
t
u
r
n
o
v
e
r
r
a
t
i
o
o
C
a
s
h
R
a
t
i
o
o
Debt-equity ratio
o Net-profit ability
ratio
o Gross-profit ability
ratio
o
R
e
t
u
r
n
o
n
c
a
p
i
t
a
l
e
m
p
l
o
y
e
d
o
I
n
v
e
n
t
o
r
y
c
o
n
v
e
r
s
i
o
n
p
e
r
i
o
d
o Raw material
conversion period
o
W
o
r
k
i
n
p
r
o
g
r
e
s
s
c
o
n
v
e
r
s
i
o
n
p
e
r
i
o
d
o
F
i
n
i
s
h
e
d
g
o
o
d
c
o
n
v
e
r
s
i
o
n
p
e
r
i
o
d
Methodology:
Descriptive research
design has been used and data
are collected through
secondary data collection
method.
I have use Microsoft Excel for
the data analysis.
TABLE
OF
CONT
ENTS
CHAPTER
TOPIC
NO.
PAGE
NO.
1.
Industry profile
2.
Company profile
13
3.
Theory of Ratio Analysis
19
4.
Literature Review
24
5.
Research Methodology
26
6.
Data analysis & inference
30
7.
Conclusion & Recommendation
66
8.
Suggestions & Limitation
68
9.
Bibliography
70
INDUSTRY PROFILE
INTRODUCTION OF
FERTILIZER INDUSTRY
Before
introduci
ng
organizati
on
K
R
I
B
H
C
O
(a
Fe
rti
liz
er
pr
od
uc
in
g
un
it)
. I
fe
el
ne
ce
ss
ar
y
to
gi
ve
an
ov
er
vi
e
w
of
th
e
In
di
an
Fe
rti
liz
er
In
du
str
ie
s.
In
di
a
li
ve
s
in
vi
ll
ag
es
,
sa
id
M
ah
at
m
a
G
an
dh
i
de
ca
de
s
ag
o.
It
is
tr
ue
ev
en
to
da
y.
Li
ke
ev
er
y
de
ve
lo
pi
ng
ec
on
o
m
y,
th
e
ec
on
o
m
y
of
India is also agro-based. Agriculture
accounts for nearly 1/4
th
of India's
GDP and more importantly, about

2/3
rd
of the country's population is
dependent on agriculture and allied

activities for their livelihood. As per
statistics nearly 175 lakhs MT of
fertilizer nutrients are required every
year in this country. The demand of
fertilizers was so high that India had to
import almost 30% of its requirement
from other countries. Therefore, to
achieve
the
economic
growth,
agriculture base of the country must be

strengthened. To attain this objective,
agriculture
practices
have
to
be
improved from their traditional pattern

to
higher
technological
track
involving better irrigation and use of

better
quality
seeds,
fertilizers,
insecticides & pesticides. Therefore,

chemical fertilizers are key player in
this process and fertilizer industries
plays quite a major role in increasing
food production in the country and
also helps to modernize the out look of
the common farmers and make them
innovative and respective to the new
technology change.
India is basically an agricultural

country which economy depends
largely upon its agrarian produce.
Agricultural sphere contributes
about 25% to the country's GDP. As
a result, Indian fertilizer industry has
tremendous scope in and outside the
country as it is one of the allied parts
of agriculture.
Today, Indian Fertilizer Industry is
developing in terms of technology.
Indian manufacturers are adopting
advanced manufacturing processes to
prepare innovative new products for
Indian agriculture.
Growth of Fertilizer
Industry
One
of
the
most
achievement
of
Independence
period
significant
the
post
of
our
Country has been the ability to

achieve self-sufficiency in food
grain
production.
This
achievement is due to the rapid

growth
and
improvement
of
Fertilizer industry. The Fertilizer

industry is growing at the rate of
4% for the last 10 years and has
been contributing a significant part
of G.D.P.
The growth and importance of
Fertilizer industry in India can be
divided in to three distinct phases,
these are given below.
1. Pro Green Revolution
Period:
This period is described in 19521953 era where increased growth
of food grains took place however
this increased production in food
grains took place due to increased
irrigation methods. In this phase
the land under agriculture was
made more, during this period
about
80%
of
the
country's
population
was
Agriculture
either
involved
in
directly
or
indirectly. During this period the

fertilizer's
manufactured
which
were
were
Super
Phosphate & Ammonium Sulphate.

Irrigation was thought to be heart
of Agriculture.
2. Green Revolution Period:
During this phase Government
stated the programmed aimed at
making our country self sufficient
in Food Products. This was the
period between the years 19591960. This plan laid the emphasis
on production of High Yielding
Varieties. To make this plan a
success there was a high need to
make soil fertile by providing it
with nutrients like Phosphorus,
Nitrogen and Potassium.
During this phase Fertilizer
industry tried to play a vital role,
became one of the most important,
and inherits part of our economy.
3. The Post Green

Revolution Period:
The world's population along with
Indian population has kept on
growing at an alarming rate; the
fertilizer companies all over India
are trying to expand their scale of
operations in order to increase the
production rate. The demand for
fertilizers per year is increasing.
The current demand of fertilizers
in India is 18 million tones.
Accordin
g to
Fertilizer
Associati
on of
India.
Fertilizer Industry
Scenario in India
In India, First of all in 1906, A
Single Super Phosphate (SSP)
manufacturing unit was set up at
Ranipat near Chennai (Madras)
with annual capacity of 6000 tones
per annum.
1. Public Sector
10
The
Fertilizer
And
Chemicals Travancore Ltd.
(FACT)
Hindustan Fertilizer
Ltd. (HFC)
Corporation
Madras Fertilizer Ltd. (MFL)

Hindustan Copper Ltd. (HCL)
Naively Lignite Corporation Ltd.
(NLC)
Pyrites, Phosphates And Chemicals
Ltd. (PPCL)
Pradeep Phosphates Ltd. (PPL)
Rashtriya Chemicals And Fertilizers
Ltd. (RCFL)
National Fertilizer Ltd. (NFL)
2. Co-operative Sector
There are only two fertilizer
manufacturing societies in Co-operative
sector.
3.
Indian Farmers Fertilizers CoOperative Ltd. (IFFCO)

Krishak Bharati
(KRIBHCO)
Co-Operative
Ltd.
Private Sector
There are 17 companies in private
sector, which are producing fertilizer.
Gujarat
Narmada
Valley
Fertilizer Co. Ltd. (GNFC)
Hindustan Lever Ltd. (HLL)
Hari Fertilizer
ICI India Ltd.
Indo Gulf Fertilizers
Corporation Ltd.
&
Chemicals
Mangalore Chemicals & Fertilizers Ltd.

(MCFL)
Southern Petro Chemicals Industries
Corporations Ltd.
Nagarjuna Fertilizer & Chemical Ltd.
(NFCL)
Shri Ram Fertilizer & Chemicals Ltd.
Tuticorian Alkali Chemicals & Fertilizer
Ltd.
Zuari Agro Chemicals Ltd.
Bindali Agro Chemicals Ltd.
Chambal Fertilizer & Petrochemical
Corporations Ltd. (DEPCL)
E.D.I. PASSY (I) LTD.
Gujarat State Fertilizer Company (GSFC
11
COMPANY PROFILE
12
KRISHAK BHARTI
CO-OPERATIVE LTD
Introduction:Name: -
Krishak Bharati Co-operative Ltd.
Joint Sector: -
Government, IFFCO and NCDC.

th
Foundation stone laid by smt.Indira Gandhi: - 5 February1982

TH
Trial production of Urea: -
26
Start of commercial Production: -
1 March 1986
Year of Business: -
25 years
Legal Status: No. of Employees: -
November , 1985
st
Multi state co-operative society

2567
Manufacturing and Marketing: -
Urea, Ammonia and Bio-fertilizer.
Urea Ammonia Plant Location: -
Distance from Surat, Hazira Guj.
13
KRIBHCO Network: A. Head office
Fertilizer plant, Noida, Delhi
B. (i) Plant
Surat (Gujarat)
(ii) Bio fertilizer plant
Surat (Gujarat)
(iii) Seed processing plant
Andhra Pradesh, Gujarat,
Harya
M.P, Punjab, Rajasthan,

C. Zonal offices
Bhopal, Bangalore, Lucknow and

Chndigarh
D. State marketing offices
Jaipur,
Mumbai,
Ahmedabad,
Banglore,
Patna,
Chandigarh, Bhopal, Hyderabad,

Dehurdun, Kolkata.
14
OBJECTIVES OF KRIBHCO
MAIN:1. To increase the urea
installed capacity,
maintaining
its
market share.
2. To ensure optimum
utilization
of
existing plant and
machinery, through
proper
maintenance.
3. To diversify into
other core sector
like power, LPG
terminal/port,
chemicals etc.
OTHERS:1. To enlarge product

mix
through
product
development
2. To continue and
intensify
efforts
towards
rural
development
and
Co-operative
movements.
MISSION
1. To contribute to
agriculture & rural
development in the
regions.
2. Services
to
members
of
cooperatives society
by
selecting
financing.
Managing society
desirable and
commercial
profitable
investment
opportunity
preferable at
multiple locations.
15
VISION
We want to be a world class
organization that represents the
farmer community and maximizes
returns
to
them
through
specialization in agricultural inputs

and products and other diversified
businesses
that
maximize
stakeholder value.
MILESTONES /
RECORDS:KRIBHCO has achieved a
milestone in handling of
OMIFCO urea:
-
Total quantity received

up to 12.08.2006 1001133.890 MT
Total
quantity
dispatched
up
to
08.09.2006
1002323.700 MT
First,
achieve
record
capacity utilization in the
first year of commercial
production - 93.5% and
97.4% for Ammonia and
Urea plants.
First, achieve highest net
profit of Rs. 126.80 Crore
in the year 1987- 88 by
any fertilizer organization.
16
First, to achieve 10 and 20

million tones of Urea
production
milestone
within a short period of 6.4
years and 12.6 years from
commencement
of
production.
First, the country to
achieve 10 million tones of
Ammonia
production
milestone within a period
of
10.7
years
from
commencement
of
production.
AWARDS:-
KRIBHCO receives Gold star

award of Excellence from
Institute of Economic Studies
for its overall excellent
performance.
KRIBHCO receives the
Rajbhasha Award from
Honb'le Minister of
Chemical and Fertilizers for
2002-03, 2003-04, 2004-05.
KRIBHCO was awarded
First prize for Production,
Promotion, and marketting
of Bio-fertilizers for the year
2004-05 on 1st of December
'05 by FAI.
IIIE - ENTERPRISE
EXCELLENCE Award for the
year 2003-04
KRIBHCO has won INDIRA
GANDHI RAJBHASHA
PURUSKAR (2nd) for 200304.
KRIBHCO -Hazira - Pot Plants
exhibition received the 2nd
prize in the first National
Horticulture exhibition and
flower show for the year 2002.
FAI Best Video Film Award
1987, 1990, 1991, 1992, 1993, 1994,

1995, 1996 and 1998
FAI Technical Innovation

Award: 2001-02 to two
KRIBHCO Officers.
SHIELD & CERTIFICATE
awarded by Rajbhasha Vibhag,
Home Ministry, GOI for
PROMOTION OF HINDI AS
AN OFFICIAL LANGUAGE for
the year 1993-94.
"RAJBHASHA SHIELD" for
OUTSTANDING WORK IN
OFFICIAL LANGUAGE for the
year 1994-95 by Official
Language Implementation
Committee, Surat.
'Best House Keeping'

Award to
KRIBHCOs Hazira
Complex from
Baroda Productivity
Council Awarded 5
times from 1988-89 to
1991-92.
17
RATIO ANALYSIS
18
1. RATIO ANALYSIS
Ratio analysis is a widely used of

financial analysis. It is defined as the
systematic use of ratio to interpret the
financial statements so that strengths
and weakness of a firm as well as its
historical performance and current
financial condition can be determined.
The term ratio refers to the numerical
or quantitative relationship between
two items variables.
The alternative, methods of expressing

items, which are related to each other ,
are for purposes of financial analysis,
referred to as ratio analysis. It should
be noted that computing the ratio does
not add any information not already
inherent in the above figures of profits
and sales. What ratios do is that they
reveal the relationship in a more
meaningful way so as to enable us to
draw conclusions from them.
The rational of ratio analysis lies in the

fact that it makes related information
comparable. A single figure by itself
has no meaning but when expressed in
terms of a related figure, it yields
significant inferences. For instance,
the fact that net profits of a firm
amount to say, Rs. 10 lacks throws no
light on its adequacy or otherwise.

Figure of net profit has to be
considered
in
relation
to
other
variables. How does it stand relation to

sales? What does it represent by way
of return on total assets used or total
capital employed? If therefore net
profits are shown in terms of their
relationship with items such as sales,
assets, capital employed equity capital
and so on; meaningful conclusions can
be drawn regarding their adequacy.
Ratio is very useful to for grasping the

message of the financial statement and
understanding them. It helps to enlarge
and understand the financial health
and travel of the business, it past
performance makes it possible to
forecast about future state of the
business. The ratio use to measure the
effectiveness of the employment of
resources is termed as Activity Ratio
or Turnover Ratio.
19
These ratios are important

measures of ratio analysis.
Ratio
Formulae
Result Interpretation
On average, you turn over the value of your e
stock every x days. You may need to break thi

Stock
Turnover
(in days)
Average
down into product groups for effective
Stock * 365/ =
Cost
of days
Goods Sold
x management.
Obsolete stock, slow moving lines will e
overall stock turnover days. Faster product

fewer product lines, just in time ordering
reduce average days.
It takes you on average x days to collect moni

Receivables Debtors
Ratio
365/
(in days)
Sales
due to you. If youre official credit terms are 4

=
days
x day
and
it
takes you
65 days...
One or more large or slow debts can drag out
average days. Effective debtor management w

minimize the days.
On average, you pay your suppliers every x d

Creditors
Payables
365/
Ratio
Cost of Sales
(in days)
(or
Purchases)
If you negotiate better credit
increase. If you pay earlier, say, to get a disco

=
days
x this will decline. If you simply defer paying y

suppliers (without
agreement) this will
increase - but your reputation, the quali
service and any flexibility provided by yo

suppliers may suffer.
20
terms this
Current Assets are assets that you can readily t
in to cash or will do so within 12 months in the
course of business. Current Liabilities are amo
you are due to pay within the coming 12 month
Total
For example, 1.5 times means that you should
Current
Current
Ratio
able to lay your hands on $1.50 for every $1.00
=
x you owe. Less than 1 time e.g. 0.75 means that
times
you could have liquidity problems and be unde
Assets/
Total
Current
pressure to generate sufficient cash to meet
Liabilities
oncoming demands.
(Total
Current
Assets
Quick Ratio Inventory)/

Total
=
times
Similar to the Current Ratio but takes account
the fact that it may take time to convert invento

into cash.
Current
Liabilities
Working
Capital
Ratio
21
(Inventory +
Receivables As
- Payables)/ Sales
Sales
%A high percentage means that working cap

needs are high relative to your sales.
Bad debts expressed as a

percentage of sales.
Cost of bank loans, lines of
credit, invoice discounting etc.
Debtor concentration - degree
of dependency on a limited
number of customers.
Once ratios have been established for
your business, it is important to track
them over time and to compare them
with ratios for other comparable
businesses or industry sectors.
When planning the development of a
business, it is critical that the impact of
working capital be fully assessed when
making cash flow forecasts. Our
financial planning software packages Ex-Plan and Cash flow Plan - can
facilitate this task as they provide for
the setting of targets for receivables,
payables and inventory.
ADVANTAGES OF RATIO
ANALYSIS:
With the help of the ratio you

can predict financial position
of the company.
After showing the ratio its easy for bank

to work with a company
We can compare two firm after seen there
ratio
22
Its help to forecasting and make future

plan of the company
With the help of the ratio we can locate
the weak spot or problem of the company
Its also help in cost control in the firm
With the help of the ratio

employee can know about the
company and its helping in
their job.
LITRERATURE REVIEW
23
Review of previous study

Ratio-analysis is a
concept or technique which is
as old as accounting concept.
Financial analysis is a
scientific tool. It has assumed
important role as a tool for
appraising the real worth of an
enterprise, its performance
during a period of time and its
pit falls. Financial analysis is a
vital apparatus for the
interpretation of financial
statements. It also helps to find
out any cross-sectional and
time series linkages between
various ratios.
Unlike in the past

when security was
considered to be sufficient
consideration for banks and
financial institutions to
grant loans and advances,
nowadays the entire
lending is need-based and
the emphasis is on the
financial viability of a
proposal and not only on
security alone. Further all
business decision contains
an element of risk. The risk
is more in the case of
decisions relating to
credits. Ratio analysis and
other quantitative
techniques facilitate
assessment of this risk.
Trend ratio involve a

comparison of the ratio of a firm over
time, that is present ratio are
compared with past ratio for the same
firm. The comparison of the
profitability of a firm, say year 1
though 5 is an illustration of a trend
ratio. Trend ratio indicate the direction
of change in the performanceimprovement, deterioration or
constancy-over the years.
24
RESEARCH
METHODOLOGY
25
Problem Statement:
How to measure the financial

position of the company with
the help of ratio
analysis?
Objective of Study:
To know the financial

condition of the company.
Interpret the financial

statement so that the
strength and weakness of a
firm
Historical
performance
and
current
financial
condition
can
be
determined.
To analyze the liquidity

position of the company.
Throw light on a long term

solvency of a firm.
Research Design:
A research design is the specification
of method and procedure for accruing
the information needed. It is overall
operational pattern of frame work of
project
that
stipulates
what
information is to be collected for
source by that procedures

Descriptive Research design is
appropriate for this study.
Descriptive study is used to

study the situation. This study
helps to describe the situation.
A
detail
descriptive
about
present and past situation can

be found out by the descriptive
study. In this involves the
analysis of the situation using
the secondary data.
26
Data Collection:
This research study is
based on secondary data,
means data that are already
available i.e. the data which
have been already collected
and analyzed by some one else.
Secondary
data
are
used for the study of Ratio

analysis of this company. To
collect the data I have refer
Company annual report, annual
magazine, last 5 year balance
sheet,
and
cash
flow
statements.
Seco
ndar
y
Data
Sour
ces
Internal
Sources
External
Sources
Procedure
Manuals
ERP
Reports
Other
Reports
Another source of secondary

data was in the form of
reference books and Literature
Review published by third
parties but available to the
public. The World Wide Web
(Internet)
important
information
was
also
source
related
inventory management.
27
an
of
to
Reference
Books
World
Wide W
Method of Analysis:
Ratio analysis :
o
Current Ratio
Quick Ratio
Inventory Ratio
o Inventory turnover Ratio

o Debtor turnover ratio
o Current assets turn over ratio
o Cash Ratio
o
Debt equity ratio
o Debtors conversion period

o Net profit ability ratio
o
Gross profit ability ratio
o Return on capital employed

o Inventory conversion period
o
Raw material conversion period
o Work in progress conversion period

o Finished goods conversion period
28
DATA ANALYSIS
AND
INTERPRETATION
29
1) Ratio Calculations
{1.1} Current Ratio
Current Assets
Current Ratio =
Current
Liabilities
Current Assets
For year 04-05 = 171,204.66
05-06 = 142,100.26
06-07 = 157,699.67
07-08 = 185,178.30
Current Liabilities
For year 04-05 = 29,982.54
05-06 = 29,724.31
06-07 = 34,234.82
07-08 = 49,858.31
Current Ratio
For year 04 - 05 =
05 - 06 =
06 - 07 =
07 - 08 =
30
171,204.66
29,982.54
142,100.26
29,724.31
157,699.67
34,234.82
185,178.30
49,858.31
= 5.71 : 1
= 4.78 : 1
= 4.61: 1
= 3.71: 1
Current Ratio
5.71
4.78
4.61
3.71
Value
4
3
2
1
0
2004-05
2005-06
2006-07
Year
Interpretation:
The ideal level of current ratio is
2:1.we shown too much higher ratio its
good for the company. Higher the
current ratio, the larger is the amount
of rupees available per rupees of
current liabilities, the more is the
firms
ability
to
meet
current
obligation and greater is safety of fund

of short term creditors.
Companys current ratio is far
better than its ideal level. So kribhco
may take some liabilities like bank
overdraft, its not necessary but if
management want. Overall higher the
better for company prestige
2007-08
31
{1.2} Quick Ratio

Quick Assets
Quick Ratio =
Curre
nt
Liabili
tiesBank
OD
Quick Assets = Current asset

Inventories
For year 04 - 05 = 171,204.66
14,670.07 = 156,534.59
05 - 06 = 142,100.26
15,289.98 = 126,810.28
06 - 07 = 157,699.67
25,090.64 = 132,609.03
07 - 08 = 185,178.30
21,404.82 = 163,773.48
Quick Ratio
For year 04 05 =
05 - 06 =
06 07 =
07 08 =
156,534.59
29,982.54
126,810.28
29,724.31
132,609.03
34,234.82
= 5.22 : 1
= 4.27 : 1
= 3.87 : 1
163,773.48
49,858.31
= 3.28 : 1
32
Quick Ratio
6
5.22
4.27
3.87
Value
3.28
Ratio
2
1
0
2004-05
2005-06
2006-07
Year
Interpretation:
Ideal level of this ratio is
1:1.compare to current ratio stock is
deducted from current assets because
we cant convert stock into cash in
short period of time. we can predict
the position more accurately compare
to current ratio, Higher the ratio higher
the company liquidity position.
We can see that Quick ratio of the year

2008 is 3.28:1 which is lesser then all
previous years indicate companys
bad liquidity position.
2007-08
33
{1.3} Debt equity Ratio

Long term debt
Debt equity ratio
Share holders
equity
Long term debt=total liabilitiescurrent liabilities

For years 04-05= 2095.42
05-06=2204.01
06-07=2312.54
07-08=2603.26
Share holders
equity=equity/preference share
capital+ discount on share
For year 04 - 05 = 2,691.57 + 5,519.91 / 2 =
05 - 06 = 5,519.91 + 6,376.20/ 2
06 - 07 = 6,376.20 + 14,696.98/ 2 =
4,105.74
= 5,948.05
10,536.59
07 - 08 = 14,696.98 + 11,020.20/ 2 = 12,858.59

Debt equity Ratio
For year
04 05 =
05 06 =
06 07 =
07 08 =
2095.42
4105.74
2204.01
5,948.05
2312.54
10,536.59
2603.26
12,858.59
= 0.51
= 0.37
= 0.22
= 0.20
34
0.6
0.5
0.4
0.3
0.2
0.1
rati
o
0
debt equity ratio
Interpretation:
The D/E ratio is an important tool of
financial analysis to appraise the
financial structure of a firm. It has
important implication from the view
point of the creditors, owners, and the
firm itself. The ratio reflect the relative
contribution of creditors and owners of
business in its financing. A high ratio
shows a large share of financing by the
creditors of the firm, a low ratio
implies a small claim of creditors.
We can see that in above ratio
that in 2004 ratio is 0.51 it implies that
every rupee of outside liabilities, the
firm has two rupees owners capital. in
year
2005 ratio decrease to 0.37 after every

year its decreasing 0.22 and 0.20
respectively.
35
{1.4} Inventory Ratio

Inventory
Inventory Ratio =
Current Assets
Inventory Ratio
14,670.07
For year 04 - 05 =
171,204.66
15,289.98
05 - 06 =
142,100.26
25,090,64
06 - 07 =
157,699.67
21,404.82
07 - 08 =
185,178.30
=0.09:1
=0.11:1
=0.16:1
=0.12:1
Value
Inventory Ratio
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
0.16
0.12
0.11
0.09
Ratio
2004-05
2005-06
2006-07
Year
36
2007-08
Interpretation:
This ratio shows a relation between
sales and inventory. It shows the no
of time an inventory is converted in
to sales over a year. Altogether the
inventory turnover ratio means
lesser the stock as compare to sales
where as lesser the inventory
turnover
ratio
means
more
inventory in stock.
As we can see that in the year

2006-07 ratio is 16 % that is higher
than 2004-05 & 2005-06 that is 11 %
and 9 % respectively and also 2007-08
is 12 %. That means investment in
inventory is increase over the last 2
years, which gives bad indication and
in 2007-08 is good indication because
investment is increase from 2004 to
2006 year.The position of year shows
a downward trend, which means that
the enterprise is investing more in its
inventories as compare to its sale.
Taking 1998 -99 has shown a 7.63 %
of down fall whereas the investment in
inventory for the same year has shown
a mere 4.19 % of downfall. This
means there is proportionately more
fall in sales in inventory. A similar
position follows in the year 1999 - 00
and 2000 - 01. In 1999 -00 the
decrease in sale 11.45 % where the
inventory is increase with 23.17 %. In

2000 - 01 the pies is decrease with
0.85 % and inventory is increase with
39.52
%.
This
shows
that
the
enterprise is fail to control the

inventory which is not good for
enterprise.
Here
the
inventory
ratio
decreases during the year here the

inventory turnover ratio decrease from
8.86 times to 6.31 times. This is not a
good sign for the enterprise. The
number of days the inventory is held is
increase. Presently it is about 57 days
Where as it was about its days in 1997
-'98 so we can say that the enterprise is
suffering for its position. The ratio is
not -satisfactory.
37
{1.5} Current Asset Turnover
Ratio
Total Sales
Current Asset Turnover Ratio =
Current Asset
Current Assets
For year 04-05 =
171,204.66
05-06
= 142,100.26
06-07
= 157,699.67
07-08
= 185,178.30
Total Sales
For year 04 -05 =
92,421.96
05 - 06 =
125,729.74
06 - 07 =
134,397.10
07 - 08 =
138,488.33
Current Asset Turnover Ratio

For year 04 05 =
05 06 =
06 07 =
07 08 =
38
92,421.96
171,204.66
125,729.74
142,100.26
134,397.10
157,699.67
138,488.33
185,178.30
= 0.54 : 1
= 0.88: 1
= 0.85 : 1
= 0.75 : 1
Value
Current assets Turn over Ratio

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0.88
0.85
0.75
0.54
Ratio
2004-05
2005-06
2006-07
Year
Interpretation: This ratio indicates

the efficiency with which current asset
turn into sales. A higher ratio implies
by and large more efficient use of
fund. Thus a high turnover ratio
indicates reduced lock-up of fund in
current assets. An analysis of this ratio
over a period of time reflects working
capital management of a firm.
Current assets turn over ratio is good
for the years of 2005-06, 2006-07,
2007-08 that is
0.88:1, 0.85:1 and 0.75:1 respectively.
For the year 2004-05 it was decrease
because
companys current assets are higher
2007-08
than its liability.

But we can say that the companys
position is better then the last few
years that is 2005-06 and 2006-07.
39
{1.6} Cash Ratio

Cash
in
Han
d+
Cash
at
bank
+
Curr
ent
inves
tmen
t
Cash Ratio =
Liquid
Assets
Cash in Hand + Cash at bank +

Current investment
For year 04 - 05 =
124,761.99+14,670.07 = 139,432.06
05 - 06 = 93,558.64
+15,289.98 = 108,848.62
06 - 07 = 80,241.37
+25,090.64 = 105,332.01
07 - 08 = 90,504.27
+21,404.82 = 111,909.09
Liquid Assets = Current Liabilities
Proposed Dividend Tax on
Dividend
For year 04 - 05 = 29,982.547,450.02 = 22,532.52
05 - 06 = 29,724.317,846.69 = 21,877.62
06 - 07 = 34,234.827,891.44 = 26,343.38
07 - 08 = 49,858.317,920.50 = 41,937.81
Cash Ratio
For year 04 05 =
139,432.06
22,532.52
= 6.18:1
05 06 =
06 07 =
07 08 =
40
108,848.62
21,877.62
105,332.01
26,343.38
111,909.09
41,937.81
= 4.98:1
= 3.99(8):1
=2.67:1
Cash Ratio
7
6.18
4.98
Value
3.99
2.67
3
2
1
0
2004-05
2005-06
2006-07
Year
Interpretation:
The cash ratio is perhaps the most

stringent measure of liquidity indeed.
One can argue that it is overly
stringent lack of immediate can may
not matter it. The firm can starch its
payment or borrow many of short
notice cash and bank balance and short
term marketable security and liable
assets of firm financial analysis looks
at cash ratio which is define.
Management has to maintain a
level of cash ratio so that cash is
required urgently they can get it. Too
high level of cash loss the opportunity
to earn interest on that capital.
2007-08
Ratio
We can see that Cash ratio is initially

high in the year of 2004-05 that is
6.18.
But its start decreasing from next
year. it was 4.98. and next years also
decrease. In current year is 2.67:1
thought its cash and bank balance is
high. This level is well and good for
the company.
41
{1.7} Debtors Turnover Ratio

Credit Sales
Debtors Turnover Ratio =
Ave. Debtors
Credit Sales= Credit sale are 75% 0f

Total sale.
For year 04 - 05 = 55,453.18
05 - 06 = 75,443.84
06 - 07 = 80,638.26
07 - 08 = 83,093
Ave. Debtors = (Opening of debtors
+ Closing of Debtors) / 2
For year 04 - 05 = 20,719.65 + 7,723.20 / 2 =
14,221.43
05 - 06 = 7,723.20 + 14,079.60 / 2 = 10,901.40

06 - 07 = 14,079.60 + 35,736.84 / 2 = 24,908.22
07 - 08 = 35,736.84 + 61,285.98 / 2 = 20,961.41
Debtors Turnover Ratio

For year 04 05 =
05 06 =
06 07 =
07 08 =
55,453.18
14,221.43
75,443.84
10,901.40
80,638.26
24,908.22
83,093
20,961.41
=3
=6
= 3.2
= 3.9
42
Value
Debtor Turn over Ratio

8
7
6
5
4
3
2
1
0
6.92
3.9
3.24
2004-05
2005-06
2006-07
Year
Interpretation:
The analysis of the debtors turnover
ratio supplements the information
regarding the liquidity of one item of
current asset of the firm. The ratio
measure
how
rapidly
debts
are
collected. A higher ratio is indicator of

shorter time lag between credit sales
and cash sales.
As we can see in the year 2007-08
debtors turnover ratio is highest. But
for the year
2006-07 this ratio is 16.49: 1 which is
also higher then the 2005-06 & 200405. So we can say that company might
face some problem in collecting the
money in the year of 2005-06. But the
result is quit well.
3.96
2007-08
Ratio
43
(1.8) Debtors conversion

Period:
Debtors Conversion Period =
Debtors
Credit Sales
x 360
Debtors
For year 04 05 = 7,723.20
05 06 = 15,252.95
06 07 = 35,736.84
07 08 = 61,285.98
Credit Sales = 60% 0f Total sale
For year 04 05 = 55,453.18
05 06 = 75,443.84
06 07 = 80,638.26
07 08 = 83,093
Debtors Conversion Period
For year 04 - 05 =
05 - 06 =
06 - 07 =
7723.20
55,453.18
15252.95
75,443.84
35736.84
80,638.26
x 360
= 50.14
x 360
= 72.78
x 360
= 159.54
x 360
= 265.52
61285.98
07 08 =
83,093
44
Debtor's conversion period
Days
180
160
140
120
100
80
60
40
20
0
159
96
Days
44
30
2004-05
2005-06
2006-07
Years
Interpretation:
It measures how long it takes to collect

amounts from debtors. The actual
collection period can be compared
with the stated credit terms of the
company. If it is longer than those
terms,
then
this
indicates
some
insufficiency in the procedures for

collection debts.
This ratio indicates the speed
with
which
debtors/accounts
receivable are being collected. The

higher the turnover ratio and the
shorter the average collection period,
the
better
is
the
trade
credit
management and the better is the

liquidity of debtors. On the other hand,
low turnover ratio and long collection
period reflect delayed payment by
debtors. In general, therefore, short
collection period (high turnover ratio)
2007-08
is preferable.
Here we can see that for

the year 2007-08 debtors conversion
period is 266 days, which is higher
compare to others. But here we can see
that for the last three years company
receive the money within their decided
well specified period. Here for the
year
2004-05
Debtors
conversion
period is less. But for the year 2005-06

debtors conversion period increase by
23 days and than increase year by year.
Company need to control receivable
management.
45
{1.9} Inventory Turnover

Ratio
Cost of Goods Sold
Inventory Turnover Ratio =
Ave. Inventory
Cost of Goods Sold = Total Sales

Gross Profit
For year 04 -05 = 92,421.96 20,551.76
= 71,870.20
05 - 06 = 125,729.74 29,730.20 = 95,999.54

06 - 07 = 134,397.10 24,916.88 = 1,09,480.22
07 - 08 = 138,488.33 29,492.74 = 1,08,995.59
Ave. Inventories = (Opening stock of
inventory + Closing stock of
Inventory)/ 2
For year 04 - 05 = 2,691.57 + 5,519.91 / 2 =
05 - 06 = 5,519.91 + 6,376.20/ 2
06 - 07 = 6,376.20 + 14,696.98/ 2 =
4,105.74
= 5,948.05
10,536.59
07 - 08 = 14,696.98 + 11,020.20/ 2 = 12,858.59

Inventory Turnover Ratio
For year
04 05 =
05 06 =
06 07 =
07 08 =
71,870.20
4,105.74
95,999.54
5,948.05
1,09,480.22
10,536.59
1,08,995.59
12,858.59
= 17.50
= 16.14
= 10.39
= 8.48 :
46
Value
Inventory Turn over Ratio

20
18
16
14
12
10
8
6
4
2
0
17.5
16.14
10.39
2004-05
2005-06
2006-07
Year
Interpretation:
Inventory
stock
turnover
ratio
measure how quickly inventory is

sold. It is a test of efficient inventory
management. To judge whether the
ratio of a firm is satisfactory or not,
higher ratio shows efficient use of
inventory.
As we can see from the graph that in

the year 2004-05 ratio is 17.50: 1
which higher then all the previous
years, so we can say that inventory is
converted into finished goods highest
in this year which indicate the highest
efficient use of the inventory. But in
case of Kribhco the Ratio is decreased
year by year.
8.48
2007-08
Ratio
47
{1.10} Net profit ability Ratio

Net profit
Net Profit Ability Ratio
Total sales
Net profit for the year 04-05= 140.59

05-06=192.45
06-07=193.24
07-08=209.24
Sales for the year
04-05=924.22
05-06=1257.30
06-07=1343.97
07-08=1384.88
04-05
05-06
06-07
07-08
48
140.59
924.22
192.45
1257.30
193.24
1343.97
209.20
1384.88
15.21
15.30
14.38
15.10
18
16
14
12
ratio ratio
10
ratio ratio
ratio year
6
4
2
0
net profit
Interpretation:
The net profit margin is
indicate of managments ability to
operate the business with sufficient
success not only to recover from
revenues of the period, the cost of
merchandise or services, the expenses
of operating the business and the cost
of the borrowed funds, but also to
leave
margin
compensation
to
of
the
reasonable
owners
for
providing their capital at risk. The

ratio of net profit to sales essential
expresses the cost price effectiveness
of the operation.
In 2004 companys profit is
15% and after 4 also they maintain this
profit margin.so company has stable

profit margin in this 4 years.
49
{1.11} Gross profit ability

Ratio
Gross profit
Gross Profit Ability Ratio
Total sales
Gross profit for the year 04-05=

272.14
05-06=231.53
06-07=280.20
07-08=185.83
Sales for the year
04-05=924.22
05-06=1257.30
06-07=1343.97
07-08=1384.88
04-05
05-06
06-07
07-08
272.14
924.22
231.53
1257.30
280.20
1343.97
185.83
1384.88
29%
18%
21%
13%
50
35
30
25
20
Series3
15
Series2
Series1
10
5
0
1
Interpretation:
Gross profit is the result of the
relationship
between
prices,
sales
volume and costs. A change in the

gross margin can be brought about by
changes in any of these factors. The
gross margin represent the limit
beyond which fall in sales prices are
outside the tolerance limit.
In this company in 2004-05
gross profit margin is 29%,its good for
the every company, but after one year
its was fallen down to 18%. In 200708 margin was very low compare to
previous year.
51
(1.12)Return on capital
employed
net profit
Return on capital employed
Share capital
Net profit for the year 04-05= 140.59

05-06=192.45
06-07=193.24
07-08=209.20
Share capital=equity/ preference
share capital+ discount on share
For the year 0405=
2691.57+5519.9
1/2=4105.74
0506=
5519
.91+
6376
.20/
2=5
948.
05
0607=
6376
.20+
1469
8.98
/2=1
0536
.59
0708=
1469
6.98
+11
020.
20/2
=12
858.
59
04-05
05-06
06-07
07-08
52
140.59
4105.74
192.45
5948.05
193.24
10536.59
209.20
12858.59
3.4
3.2
1.8
1.6
4
3.5
3
2.5
2
ratio
1.5
year
1
0.5
0
capital employed
Interpretation:
Here the profit related to the
total capital employed. The term
capital employed refers to long term
funds supplied by the creditors and
owners of the firm. It can be computed
in two ways. First, It is equal to noncurrent liabilities plus owners of the
firm. The Higher the ratio, the more
efficient
is
the
use
of
capital
employed.
in 2004-05 ratio of capital
employed is 3.4% its better than
other year. In 2007-08 ratio was
decrease to 1.6%. its was half
compare to 2004-05.
53
(1.14) Inventory Conversion

Period
Ave. Inventory
Inventory Conversion Period =
x 360
Cost of Good Sold
Ave. Inventories = (Opening stock of inventory + Closing stock of Inventory) / 2

For year 04 - 05 = (2691.57 + 5519.91 ) / 2
= 4105.74
05 06 = (5519.91 + 6376.20 ) / 2
= 5948.05
06 07 = (6376.20 + 14696.98 ) / 2 = 10536.59

07 08 = (14696.98 + 11020.20 ) / 2 = 12858.59
Cost of Sales = Total Sales Gross Profit
For year 04 05 = 92421.96 20551.76 = 71870.20
05 06 = 125729.74 29730.20 = 95999.54
06 07 = 134397.10 24916.88 = 109480.22
07 08 = 138488.33 29492.74 = 108995.59
Inventory Conversion Period
For year
04 - 05 =
05 - 06 =
06 - 07 =
07 - 08 =
54
4105.74
71870.20
5948.05
95999.54
10536.59
109480.22
12858.59
108995.59
x 360
= 42.4
x 360
= 34.6
x 360
= 22.3
x 360
= 20.5
45
40
35
30
25
20
Series1
15
10
Series2
5
0
Year
2004-05
2005-06
2006-07
Inventory Conversion period
Interpretation:
Inventory conversion period means,

time taken to convert raw material in
to finished goods to goods sold. It
indicates
how
effectively
and
efficiently an inventory is controlled.

Lesser the inventory conversion period
more efficient and effective use of
inventory.
Here we can see that for the year

2004-05 inventory conversion periods
is 21 days which is less then the rest of
year. As we can see from the graph for
the year 2007-08 inventory conversion
period is 42 days which is highest
among the collected data. But as year
passing it increases. And we can find
that it was maximum for the year
2007-08. So we can say that they are
able to substantially increase the
2007-08
inventory holding period from 21 days

to 42 days. It may happen because the
average inventory holding period has
been increase and also the cost of
goods sold decrease.
55
(1.14) Raw material

conversion period
Raw Material Conversion Period =
Raw Material consumption

Raw material Inventory
360
Raw Material Inventories

For year 04 - 05 = 5,519.91
05 - 06 = 6,376.20
06 - 07 = 14,696.98
07 - 08 = 11,020.20
Raw Material Consumption
For year 04 - 05 = 39,150.61
05 - 06 = 47,231.80
06 - 07 = 47,310.96
07 - 08 = 65,404.97
Raw Material Conversion Period
56
For year 04 - 05 =
5,519.91
05 - 06 =
6,376.20
06 - 07 =
14,696.98
07 - 08 =
11,020.20
39,150.61
360
47,231.80
360
47,310.96
360
65,404.97
360
= 50
= 48
= 80
= 60
Days
Raw Material Conversion Period

111.83
120
100
80
60
40
50.75
60.65
48.6
Days
20
0
2004-05
2005-06
2006-07
Year
2007-08
57
(1.15) work in process

conversion period
Work in process
Work in Process Conversion Period =
Inventory
Work in Process Inventories

For year 04 - 05 = 36.96
05 - 06 =40.94
06 - 07 =46.13
07 - 08 =61.77
Cost of Production
For year 04 - 05 = 61,732.20
05 - 06 =1,03,463.13
06 - 07 =1,28,279.30
07 - 08 =1,48,885.75
Work in Process Conversion Period
For year 04 - 05 =
36.96
05 - 06 =
40.94
06 - 07 =
46.13
61,732.20
360
1,03,463.13
360
1,28,279.30
360
07 - 08 =
61.77
1,48,885.75
360
58
Days
Work in Process Conversion Period
0.25
0.22
0.2
0.14
0.15
0.13
0.15
Days
0.1
0.05
0
2004-05
2005-06
2006-07
Year
Interpretation:
It indicates the work-in-process
inventory (can say semi-finished good)
converted in to finished goods. Its also
contain the production cost holding by
it.
Here we can say that for the year
2004-05 due to high work in process
inventory. Work in process conversion
period is low even though the cost of
production is too high compare to
others. For next years it was decreased
by day to day because, work in process
inventory is high compare to all
previous
year.
Work
in
process
conversion period can be controlled by

keeping work in process inventory
low.
But in case of Kribhco the Work-inprocess conversion periods are not a
single day r say it is minor because in
Kribhco the duration in convert Semi
finished goods to finished goods is
very less
2007-08
59
(1.16 )finished good

conversion period
Finished Goods Conversion Period =
Finished Goods Inventory
Finished Goods Inventories

For year 04 - 05 = 5,548.10
05- 06 = 6,399.69
06- 07 = 14,650.85
07- 08 = 10,958.76
Cost of Goods Sold
For year 04 - 05 = 58,870.52
05- 06 = 1,02,611.14
06- 07 = 1,02,028.14
07- 08 = 1,52,577.84
Finished Goods Conversion Period
For year
04 - 05 =
5,548.10
05 - 06 =
6,399.69
06 - 07 =
14,650.85
07 - 08 =
10,958.76
58,870.52
360
1,02,611.14
360
1,02,028.14
360
1,52,577.84
360
60
Inventory Conversion =
Raw
material
Conversi
on
period
+ Work
in
progre
ss
conver
sion
period
+ Finish
goods
conver
sion
period
For year 04 - 05
50.75 + 0.22 + 33.93 = 84.90 Days
05 - 06
48.60 + 0.14 + 22.45 = 71.19 Days
06 07
80.83 + 0.13 + 43.94 = 124.90 Days
07- 08
60.65 + 0.15 + 25.85 = 86.65 Days
61
Debtors Conversion Period

For year 04 - 05 =
05 - 06 =
06 - 07 =
07 - 08 =
7,723.20
55,453.18
15,252.84
75,443.84
35,736.84
80,638.26
61,285.98
83,093
x 360
=50.14 Days
x 360
= 72.78 Days
x 360
=159.54 Days
x 360
=265.52 Days
Gross Operating Cycle Period = Inventory Conversion Period +

Debtors conversion period
62
For year 04 - 05
351.65+ 50.14 = 106.4 Days
05 - 06
283.90+ 72.78 = 74.95 Days
06 - 07
144.19+ 159.54 = 57.22 Days
07 - 08
134.90+ 265.52 = 74.30 Days
Conclusion
And
Recommendations
63
Conclusion
From the study of ratio

analysis, I have found that it is
a very difficult task to maintain
ideal ratios in such a big
organization. There are various
factors
affecting while managing ratio
analysis
inventory
like credit policy,

management
system , production cycle etc.

But it is very important to
manage it every situation.
Fertilizer is a product whose

price is highly controlled by
Government. of India Where
by it may not be easily possible
to increase the sales. Because
the product
is sold as per Government of
India allocated area. But efforts
can surely be made to reduce
the cost factors. It is suggested
that cost may highly be control
through
effective
budgeting
and continuous analysis there

off.
IFFCO playing a big role in

deciding price factors, so
kribhco cant set its own price
and sale to directly to farmers
Kribhcos current ratio is far

more better than its ideal ratio,
so in the future if kribhco can
borrow some money from the
market, if Its necessary.
Kribhcos net profit is almost
15% every year its very good

for the company whos main
objective is to not earn a profit
64
In Kribhco all financial year

have the double current assets
compare to current liabilities &
all years satisfy sound financial
condition requirement & more
liquidity of company indicate
safe and sound position.
Inventory conversion period

has continuously decreased
from the year 2004-05 to 200708.
KRIBHCO have fix inventory
management system.
Liquidity position of a company

can be ensured by the current ratio,
it can be said that if the ratio is 2: 1
then the companys liquidity
position is sound. In the year
2004-05 only the company
liquidity position is good.
KRIBHCO strongly follows the

credit policy but Receivable period
is more
Compare to Creditors period.
65
Suggestions:
If
KRIBHCO
can
directly
contact to the
farmers and sell
them
without
interfere
of
government or
IFFCO. So it
can increase its
profit margin
In case of KRIBHCO they

need to change their credit
policy, because in this case we
can see that the average
creditors credit period is 30
days in raw materials and
10 days in case of spares.
Where as debtors credit period
(Bills receivable) is for 45
days.
Here
debtors
credit
period is more then creditors

credit period which need to be
modified.
It
is
possible
because
KRIBHCO
is
the
only
company in SAARC countries
who are producing Urea and
also have biggest Ammonia
plant all over India. So we
can
say
they
have
the
monopoly in urea and also they

are the market leader in case of
Ammonia. So either they can
increase
the
period
creditors
credit
period
of
or
decease the debtors credit

period,
they
can
shorten
collection period.
66
KRIBHCO have the 60:40

ratio of credit to cash sales
which also can be modified by
taking advance payment from
the customer and it can be used
to maintain
liquidity for daily cash need
raw
material
conversion
period.
Net operating cycle period was

increase which need to be
maintain as low as possible by
reduce raw material conversion
period, debtors conversion
period ,
finish good conversion period
ect. It helps to keep down the
Net operating cycle
.
Limitations of Study:
During the study of this project some
limitation I have found which are as
below,
This research is based on the

secondary data and during the
study of working capital there
are so many data required from
various department which was
not
disclosed by the respective
department,
for
example
budget of the current financial
year.
Some approx data provided

from the various departments
for the calculation purpose, e.g.
Carrying cost, Ordering cost
ECT, inter firm comparision
which
were not calculated by the
respective departments.
Available information for the
study of ratio analysis is
limited,
67
BIBLIO
GRAPH
Y
Books
1) I.M.PANDEY2000,FINANCIAL
MANAGEMENT,
EIGHT
EDITION
VIKASH PUBLISING
HOUSE
PRIVATE
LTD.
2) R.S.N.PILLAI &
BAGHAVATHI,
DEC.
2005,
MANAGEMENT
ACCOUNTING
THIRD EDITION
S.CHAND
PUBLICATION.
3) DONALD R.
COOPER & PAMELA
S. SCHINDLER
,BUSINESS
RESEARCH
METHODS EIGHT
EDITION , TATA Mc.
GRAW-HILL
EDITION.
4) M Y KHAN, P K JAIN
2008,FINANCIAL
MANAGEMENT FIFTH
EDITION-,TATA
MCGRAW-HILL
PUBLISHING COMPANY
LIMITED.
Reports
Company Annual Report from

2004-05 to 2007-08.
Inventory statues report maintain by
stores
Purchase Order records
Cash flow statements.
Websites
68
www.kribhco.net
www.kribhcoindia.com
www.kribhco.org.
WWW.KRIBHCOSURAT .COM
WWW.WIKIPEDIA.COM
69

FYP Ratio Analysis Krishak Bharat ASH

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FYP Ratio Analysis Krishak Bharat ASH

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www.final-yearproject.com | www.finalyearthesis.

working on this project. In the

Cooperative Limited, Patna. I

organizational environment and

organization. Under this study I

knowledge never ends. Theory

project successfull. I find no

throughout my project in L.N.

ECONOMIC DEVELOPMENT &

I would like to give

helped me to carry out this

blessing I was able to fulfill the

precious contribution and their

ECONOMIC DEVELOPMENT &

allocating me a very interesting

resources for the project. Their

PATNA on RATIO ANALYSIS

position of the company and

analysis. It is defined as the

statements so that strengths

The main Objectives are:

To know the financial

To analyze the liquidity

Theory of Ratio Analysis

Data analysis & inference

Conclusion & Recommendation

Suggestions & Limitation

GDP and more importantly, about

of the country's population is

dependent on agriculture and allied

agriculture base of the country must be

improved from their traditional pattern

involving better irrigation and use of

insecticides & pesticides. Therefore,

India is basically an agricultural

Country has been the ability to

achievement is due to the rapid

Fertilizer industry. The Fertilizer

indirectly. During this period the

Phosphate & Ammonium Sulphate.

3. The Post Green

Madras Fertilizer Ltd. (MFL)

Indian Farmers Fertilizers CoOperative Ltd. (IFFCO)

Mangalore Chemicals & Fertilizers Ltd.

Krishak Bharati Co-operative Ltd.

Government, IFFCO and NCDC.

Foundation stone laid by smt.Indira Gandhi: - 5 February1982

Trial production of Urea: -

Start of commercial Production: -

Legal Status: No. of Employees: -

Multi state co-operative society

Manufacturing and Marketing: -

Urea, Ammonia and Bio-fertilizer.

Urea Ammonia Plant Location: -

Distance from Surat, Hazira Guj.

KRIBHCO Network: A. Head office

Fertilizer plant, Noida, Delhi

(ii) Bio fertilizer plant

(iii) Seed processing plant

Andhra Pradesh, Gujarat,

M.P, Punjab, Rajasthan,

Bhopal, Bangalore, Lucknow and

D. State marketing offices

Chandigarh, Bhopal, Hyderabad,