Professional Documents
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PROJECT REPORT ON
Financial Statement Analysis
At
Submitted to
(Ahmedabad Institute of Technology)
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE
AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ASMINISTRATION
In
Submitted by
(SEJAL CHAVDA)
[Batch: 2015-17, Enrollment No.:157010592005]
(Ahmedabad Institute of Technology)
MBA PROGRAMME
Students Declaration
I, Sejal Jayeshkumar Chavda, hereby declare that the report for Summer Internship
Project entitled Financial Statement Analysis is a result of my own work and my
indebtedness to other work publications, references, if any, have been duly acknowledged.
Place
: Ahmedabad
Date
(Sejal Chavda)
Institutes Certificate
I certified that this Summer Internship Project Report Titled Financial Statement
Analysis is the bonafide work of Ms Sejal Jayeshkumar Chavda (Enrollment
No157010592005), who carried out the research under my supervision. I also certify
further, thattothebestofmyknowledgetheworkreportedhereindoesnotformpartofany other
project report or dissertation on the basis of which a degree or award was conferred on an
earlier occasion on this or any other candidate.
PREFACE
The project report is accompanied with practical experience to add some worthiness to
education. This practical training in MBA program develops core competencies of
corporate world.
Thus, we have a practical outlook of the managerial experts and witness the function of
management in real world.
My work in this project is, therefore, a humble attempt towards this end.
In spite of my best efforts, there may be errors or omissions, which may please be
excused.
ACKNOWLEDGEMENT
To make any project, essential requirement is able guidance and references without
which project is incomplete. I forward my gratitude to Mr Ahok Bothra (CFO),
Mr Ketan Desai (GM Finance), Mr Hemant Rathod and the staff of Nandan
Denim Ltd. for their support.
Secondly, I express my sincere thanks to Prof. Devendra Lodha (H.O.D.) who
guided me throughout the project and gave me valuable suggestions and
encouragement.
Lastly, I am thankful to all people who had helped me directly or indirectly to
prepare the report.
EXECUTIVE SUMMARY
Nandan Exim Limited is housed with one of the most sophisticated weaving plants and
other facilities to manufacture superior quality gray cotton fabrics, khakhis and denims.
The plant manufactures 100% cotton piece dyed fabric, blended cotton fabric and denim
keeping in tune with the fashion and market trends. The range of fabrics include denim,
twills, stretch, bull denim, broken twills. The products manufactured at Nandan Exim
Limited are primarily marketed in International as well as Domestic market.
The Company forayed into manufacturing of textiles by embarking on a project to set up
facilities for weaving of Denim Fabric in FY2004. The Company commenced full scale
commercial production of 20 MMPA capacity of Denim manufacturing facility in
FY2006. In FY2009, the Company installed 3,240 rotors for manufacture of open-end
yarn, 22,464 spindles for manufacture of ring spun yarn and 15 MW Captive Power Plant.
Problem statement based on literature review: To be accurate is a necessity while we
make the Financial Statement. (a) Accountants or financial analysts should not be rushed
in collection, preparation, analysis and interpretation off financial statements.
Horizontal analysis compares financial information over time, typically from past quarters
or years. Horizontal analysis is performed by comparing financial data from a past
statement, such as the income statement. Vertical analysis is a percentage analysis of
financial statements. Each line item listed in the financial statement is listed as the
percentage of another line item
The companys growth is 22.68% in terms of revenue, 29.72% in terms of PBT, 30.83% in
terms of PAT.
From the Financial statement analysis the company can measure its profitability. The
Directors of Nandan Denim are assessing the growth potential of the business. Nandan
Denim Ltd is in competition of Arvind and Arvee Denim. In upcoming year Nandan
Denim has planned 612 Cr project and it may possible that high competition will be there
in Market among these two companies. Nandan Denim has achieved second position
among these five companies with 51.43 cr. Net profit.
TABLE OF CONTENTS
SR.NO
PARTICULARS
PAGE NO
Preface
Acknowledgment
Executive summary
1.
Company Introduction
1.1
Company Profile
1.2
1.3
Growth of Company
1.4
Product Profile
13
1.5
SWOT Analysis
15
1.6
Industry Analysis
20
1.7
22
2.
Literature review
27
3.
Research Methodology
38
4.
41
5.
Synopsis
53
6.
58
Bibliography
CHAPTER 1
COMPANY INTRODUCTION
1|Page
endangering the environment. We also believe that both, the manufacturers and the
consumers alike must be concerned about the environment and that the preservation of the
environment is not a one-time job, but a never-ending process.
Vision Statement:
A position that we sustain by producing high quality denim that is ahead of the fusion curve
and is the choice of discerning customers across the spectrum of brands all over the world.
Contact us
Survey No. 198/1 & 203/2,
Saijpur-Gopalpur, Pirana road,
Piplej,
Ahmedabad - 382 405.
Gujarat, INDIA.
Contact +91 - 98258 00199 / 98792 00199
Fax +91 - 79 - 2573 1188
nandan@chiripalgroup.com
3|Page
4|Page
The details of present total no. of employees as on 31.12.15 are listed below:
Sr No
Particulars
No of employees
301
729
5|Page
Shared Values
Passion leading to excellence It is the driving force that prods us towards greater heights in
whatever we do Agility to stay ahead and to innovate We are self-motivated towards being
a step ahead of the competition and pioneering changes that revolutionize the industry
Aggression for Growth of all stakeholders Growth for us means collective progress for all
our stakeholders our customers, employees, investors and the community at large
Ethical Behaviour that underlines all our practices We try to be absolutely fair and
transparent in all our dealings with internal and external bodies
Respect for diverse views We value opinions and beliefs of individuals and communities
without any bias that allows us to have a well-rounded approach
Care for the environment and the community We make sure that our processes and products
do not harm the environment or the communities we come in contact with and constantly
work towards a more sustainable future for all
Collaborative and Relationship Driven - We value relationships with our employees as well
as the communities that we come in contact with and strive relentlessly to empower them
Customer Orientation - We believe that our greatest strength lies in knowing our customers
and anticipating their needs in advance and doing our best to meet them in time
6|Page
Shareholding Pattern
The authorized share capital of the company is Rs. 100Crore divided into 10Crore equity
shares of Rs 10/- each. The issued, subscribed and paid up capital is Rs. 45,54,90,560 as on
March 31, 2015.
The shareholding pattern of the company as on 31st Dec 2015 is as under:
Sr No
Particulars
Promoter
Shares in no.s
and 27758720
%
60.94%
Promoter Group
2
Public Shareholding
Institutions ( FI / 1560099
3.43%
Govt/ FII)
B
Bodies Corporate
3425168
7.52%
Individuals
9874338
21.71%
Non Residents
2915279
6.40%
Sub Total 2
17774784
39.06%
Total
45533504
100.00%
7|Page
Board of Directors
Promoters belong to Chiripal Family of Ahmedabad, Gujarat and are fully involved in the
textile business. The Promoters have over 30 years of experience in the field of
manufacturing, trading and export of various textile products.
The Board comprises of: No
Director Name
Designation
ShriVedprakash D Chiripal
Director
ShriBrijmohan D Chiripal
Managing director
Shri T. S. Bhattacharya
Professional Director
Professional Director
Professional Director
Professional Director
Professional Director
8|Page
9|Page
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Social Responsibility
Corporate Social Responsibility is a form of corporate self-regulation integrated into a
business model. CSR is about capacity building for sustainable livelihoods. With the same
objectives, Chiripal Group gave birth to Chiripal Charitable Trust. The CSR activities of the
Group are guided by the vision and philosophy of the Chairman, Mr. Vedprakash D. Chiripal,
who got this inspiration from his parents. He enunciated the value of trusteeship in business
and laid strong foundation for its ethical and value-based functioning. As a responsible
"Corporate Citizen", the Group is engaged in various social welfare activities. Through its
social commitment, it intends to promote initiatives, for educational and health awareness
amongst the weaker sections of the society.
Education
FNandan Denim plans to develop education facilities in villages around its plants to provide
high quality education to village children at affordable cost.
Sanitation
Nandan Denims CSR plan also includes development of sanitation facilities in villages
around its plants.
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Denim
Khaki
Shirting
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The Denim Fabrics of company is regarded for its premium quality. The composition of
these fabrics consists of 100% cotton, cotton spandex, cotton poly, cotton poly spandex,
cotton modal, cotton tencel etc. The Stretch Denim Fabric of our company is very popular for
the comfort that one gets while wearing it. With stunning colors, these cotton fabrics are
popular among the people of all ages. We stand top among the Stretch Denim Fabric
Manufacturers in India. We are also among the major Suppliers of Denim Fabrics.
The Bottom Weight Fabrics our company are well-marked for their superior standard of
quality. The Bottom Weight Garments manufactured form these fabrics are very much in
demand in all over India. The latest sophisticated technology is used in the manufacturing
process so as to maintain a higher standard of quality. These are extremely comfortable to put
on. Beside a reliable manufacturer, we are among the prominent Bottom Weight Cotton
Fabrics Suppliers in India whose products are supplied to all over India.
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The Indian Textile industry adds 14% to the industrial production and 8% to the GDP of
India. It provides employment to 38 million people and thus, is the second largest
employment provider after agriculture. The Indian Apparel & Textile Industry is one of the
largest sources of foreign exchange flow into the country with the apparel exports accounting
for almost 21% of the total exports of the country. A systematic SWOT analysis of the textile
and apparel industry indicates the following: STRENGTH
1. Raw material base
India has high self sufficiency for raw material particularly natural fibres. Indias
cotton crop is the third largest in the world. Indian textile Industry produces and
handles all types of fibres.
2. Labour
Cheap labour and strong entrepreneurial skills have always been the backbone of the
Indian Apparel and textile Industry.
3. Flexibility
The small size of manufacturing which is predominant in the apparel industry allows
for greater flexibility to service smaller and specialized orders.
4. Rich Heritage
The cultural diversity and rich heritage of the country offers good inspiration base for
designers.
5. Domestic market
Natural demand drivers including rising income levels, increasing urbanisation and
growth of the purchasing population drive domestic demand.
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WEAKNESS
1. More dependence on cotton
Due to over specialization in cotton, the bulk of the international market is missed
out, synthetic products in India are expensive and fabric required for items like
swimsuit, sky-wear and industrial apparel is relatively unavailable.
2. Spinning Sector
Spinning sector lacks modernization and there is a need of introducing new
technology.
3. Weaving Sector
India has relatively less number of shuttle-less loom.
4. Fabric Processing
Processing is the weakest link in the Indian textile value chain, adversely affecting its
ability to compete in exports.
5. Poor Infrastructure
High power costs and long export lead times are eroding Indias export
competitiveness across the textile chain.
6. Low Labour Productivity
Productivity levels for manufacturing various apparel items are far lower in India in
comparison with its competitors.
OTHER WEAKNESSSES
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OPPORTUNITIES
1. Growing Industry
World textile trade would continue to grow at a rate of 3-4% to reach $200-210 billon
by 2010.
2. Market access through bilateral negotiation
The trade is growing between regional trade blocs due to bilateral agreements
between participating countries.
3. Integration of Information technology
Supply Chain Management and Information Technology has a crucial role in
apparel manufacturing. Availability of EDI (Electronic Data Interchange), makes
communication fast, easy, transparent and reduces duplication.
4. Opportunity in High Value Items
India has the opportunity to increase its UVRs (Unit Value Realization) through
moving up the value chain by producing value added products and by producing
more and more technologically superior products.
THREATS
1. Decreasing Fashion Cycle
There has been an increase in seasons per year which has resulted in shortening of the
fashion cycle.
2. Formation of Trading Blocks
Formation of trading blocs like NAFTA, SAPTA, etc; has resulted in a change in the
world trade scenario. Existence of bilateral agreements would result in significant
disadvantage for Indian exports.
3. Phasing out of Quotas
India will have to open its protected domestic market for foreign players thus
domestic market will suffer.
17 | P a g e
This project is promoted by the Chiripal Group. The Chiripal Group has been active
in textile business since 1972 and has promoted several successful ventures in textile
sector.
The proposed factory site is near Ahmedabad city which is very well connected by
road, rail, sea and air to major cities of India and rest of the world.
The machinery and the technology chosen for the manufacture of cotton yarn are
latest and proven.
This project is being implemented along with the ongoing project. Following are the
some of the facilities which will be common for ongoing and proposed spinning unit:
Land
Technical staff
Air Compressor
All these facilities will help NDL to keep the project cost comparatively on lower
level to make the project more profitable and viable.
Similarly for the processing NDL do not have to incur capital expenditure towards
land.
Required skilled and un-skilled labour is easily available in the local and nearby area.
Weaknesses
The company has control over the entire value chain i.e. from spinning to marketing
and distribution except raw material i.e. cotton production
The management will take appropriate & timely measures to address the problem by
passing the incremental cost to customers by adjusting the selling price accordingly.
Opportunities
The Company is planning to export majority of its product range. The proposed IndiaEU FTA and the initiative like Make in India can provide significant growth
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Threats
Price of the raw cotton and the final yarn which is beyond the control of individual
unit - has been volatile in the recent past. It depends more on the ability of The
Company to handle such a situation in future. Profitability of the Company would be
adversely affected in the event of price volatility, availability of this raw material and
the demand for the yarn being produced.
Any adverse change in government regulations may affect the industry and
consequently the operations of the Company.
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60 billion over the next three years, with the help of government support, said Dr A
Sakthivel, Chairman, Apparel Export Promotion Council (AEPC). The textiles sector has
witnessed a spurt in investment during the last five years. The industry (including dyed and
printed) attracted foreign direct investment (FDI) worth Rs 6,710.94crore (US$ 1.11 billion)
during April 2000 to February 2014.
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KG Denim
It is a premier denim and apparel fabric manufacturer, catering to leading fashion
brands and retailers worldwide. During their 70 year journey, they have remained
committed to a simple mantra, believe in enabling fashion. And a mere look at
their journey so far bears testimony to this fact. Their diverse and value integrated
approach has seen them go from strength to strength. From being the reigning
kings of denim, today, they are poised on the threshold of success in the home
textile arena. The journey ahead seems as exciting.
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Aarvee Denim
Aarvee Denims and Exports Ltd is a leading global player in the textile industry.
Being backed by experienced promoters, the company is spreading its wings all
over the globe at a very fast pace. Established in 1988 by Arora& VB Group,
which has been involved in textile trade for over 50 years, are the forces behind
this dynamic organization. More than five decades of experience, well qualified
human resources and state of the art production units have made ADEL today
Worlds one of the largest Vertically Integrated Denim Mill.
The Company has its integrated productions of:
Yarn (Open End, Ring & PTY): Capacities of 39,000 metric (tons/annum)
Denim Fabric: 85 million meters/annum
Non-Denim Bottom Wear Fabric: 18 million meters/annum
Apparels: 3.5 million pcs/annum
Company is also into Green energy generation with Installations of 20.5 MW
Wind Power.
R&B Denims
R&B Denims is being promoted by the RawatKhedia and the Borana groups,
undoubtedly two of the most influential textile houses in the polyester hub that
Surat is. Rawat Khedia group is currently under the leadership of Mr. Anand
Dalmia, whereas the Borana group is being headed by Mr. Mangilal Borana, both
of whom are supported by their sons.
Both of these companies have a long lineage of more than 30 years each, in the
textile industry, and are very well known in their areas of expertise. The Borana
group, today, is capable of weaving output value of more than 1.5 million meters
of polyester Grey fabrics a month, whereas the Rawat Khedia group has a
processing output of more than 5 million meters of premium quality synthetic
fabrics per month. The stats and figures are very much the proof of the enormity
of these companies, which couldnt have been achieved ever, if they had not stuck
to the international standards in terms of quality and services policies that the
company adheres by.
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Name
Sales Turnover
Net Profit
Total Assets
Cap.
(Rs. cr.)
Arvind
Nandan
Denim
307.10
7,930.64
5,407.26
318.85
5,671.77
132.90
638.57
1,156.73
63.32
681.76
70.15
164.57
841.23
7.03
583.99
Aarvee
Denim
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Five Forces Analysis assumes that there are five important forces that determine
competitive power in a business situation. These are:
1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This
is driven by the number of suppliers of each key input, the uniqueness of their product
or service, their strength and control over you, the cost of switching from one to
another, and so on. The fewer the supplier choices you have, and the more you need
suppliers' help, the more powerful your suppliers are.
2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down.
Again, this is driven by the number of buyers, the importance of each individual buyer
to your business, the cost to them of switching from your products and services to
those of someone else, and so on. If you deal with few, powerful buyers, then they are
often able to dictate terms to you.
3. Competitive Rivalry: What is important here is the number and capability of your
competitors. If you have many competitors, and they offer equally attractive products
and services, then you'll most likely have little power in the situation, because
suppliers and buyers will go elsewhere if they don't get a good deal from you. On the
other hand, if no-one else can do what you do, then you can often have tremendous
strength.
4. Threat of Substitution: This is affected by the ability of your customers to find a
different way of doing what you do for example, if you supply a unique software
product that automates an important process, people may substitute by doing the
process manually or by outsourcing it. If substitution is easy and substitution is viable,
then this weakens your power.
5. Threat of New Entry: Power is also affected by the ability of people to enter your
market. If it costs little in time or money to enter your market and compete
effectively, if there are few economies of scale in place, or if you have little protection
for your key technologies, then new competitors can quickly enter your market and
weaken your position. If you have strong and durable barriers to entry, then you can
preserve a favourable position and take fair advantage of it.
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CHAPTER 2
LITERATURE REVIEW
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share during the reference period .However, declining return on average net worth on
year on year basis is a cause of concern for TSL. Besides, this it was also found that
debt policy of the company is very conservative as it uses lower degree of risk to
avoid financial risk and insolvency risk. Though, TSL is performing well at least in
terms of book value measures as highlighted above, markets dont seem to be
favouring the stock of TSL as it is offering lower premium on its share in terms of
low P/E Ratio which also offers an opportunity to conduct further research
KEYWORDS Ratio, Return, net worth, equity, earnings.
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stocks which may not be optimal. We derived the value measure based on observed
correlations with one-year-ahead earnings and ignored earnings for years further in the
future. The model estimated to predict these earnings did not exploit all aspects of the
data. It was based on a dichotomous specification of future earnings rather than on actual
dollar amounts and was not re-estimated every year in the sample period. Further, it was
based on a pooling of all firms and one suspects that industry-specific or firm-specific
models would produce improvements, provided enough data were available to estimate
coefficients with precision.
8. Anaja Blessing & Emmanuel E. Onoja
This study analyzes the role of financial statements on investment decision making: a
case of United Bank for Africa Plc. in Nigeria. Financial Reporting Standards and
Practices have in the recent past come under great criticisms, demanding that accountants
take further steps in ensuring that the true and fair view of the actual worth of business
are also incorporated in the financial statements published by them. The general objective
is to ascertain the role of financial statement on investment decision making in United
Bank for Africa Plc. of Nigeria .This study used the secondary data from ten years
financial statements of the bank. Ordinary least squares (OLS) regression method of
analysis, was adopted to test the hypotheses. The parameter estimates of the regression
equation obtained revealed that, the transparency of financial statements of the bank has
significant influence on the investment decision making of the users of financial
statements
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9. Howard E. Johnson
Financial statement analysis is fundamental to a corporate acquirers assessment of an
acquisition or merger candidate. As part of its due diligence investigation, a corporate
acquirer typically analyzes the current and prospective financial statements of a target
company. This analysis is used in estimating the value of the shares or net assets of the
target company, and in determining the price and terms of a transaction the acquirer is
prepared to offer and accept. This paper will address the practical applications of financial
statement analysis typically performed by corporate acquirers in open market valuation
and pricing exercises. This paper is not intended to be an all-inclusive discussion, and
some of the items discussed may not be applicable in a given situation. Every open
market transaction is unique, and judgment is required to determine the appropriate nature
and level of financial statement analysis that should be undertaken in each case.
10. Hayden Wimmer, Roy Rada
Determining which attributes may be employed for predicting the market capitalization of
a business firm is a challenging task which may benefit from research intersecting
principles of accounting and finance with information technology. In our approach,
information technology in the form of decision trees and genetic algorithms is applied to
fundamental financial statement data in order to support the decision making process for
predicting the direction of the value of a company with value defined as the market
capitalization. The decision process differs from year to year; however, the amount of
variation is crucial to a successful decision making process. The research question posed
is how much variation occurs between years? We hypothesize the amount of variation
is smaller than half the number of financial statement attributes that may be employed in
the decision making process. We develop a system which tests the amount of variation
between years measured as the amount of generations required to reach a target level of
fitness. The hypothesis is tested using data filtered from Computers global database. The
results support the research hypothesis and advance us toward answering the research
question. The implications of this research are the possibility to improve the decision
process when employing financial statement analysis as applied to the market
capitalization and financial valuation of business firms.
35 | P a g e
Book Reviews:
1. Financial Statement Analysis Gokulsharma
Simply speaking, financial statements mean the statements showing the financial affairs of a
person, an enterprise, or an accounting unit. They need to be interpreted and analyzed from
various angles to get the true picture. This book, now in its Second Edition, explains the
objectives of financial statement analysis and provides with examples the major tools and
techniques used for such an analysis. In this edition, the new format for income statement
prescribed in Part II of Schedule VI of the Companies Act, 1956 has been incorporated.
Implications of these changes on the analysis and interpretation of the statement have also
been discussed. The book is meant for the undergraduate and postgraduate students of
Management and Commerce.
2. Fundamentals of Financial Management
It covers all aspects of the subject, from the basics, to financial analysis, budgeting, planning,
management of working capital, and long term financing. The book begins with an Overview
section. This provides an introduction to Financial Management and to the Financial
Environment. The next part covers Financial Planning and Analysis. This section explains
concepts like taxes, cash flow, financial statements, and analysis of funds flow and
statements. It also discusses financial planning and forecasting.
The third part covers the Fundamental Valuation Concepts. This section looks at risk and
return, and Securities valuation. The next two parts focus on capital structure, budgeting and
dividends. These sections discuss cost of capital, capital structure, planning the capital
structure, share valuation and dividend policy. The chapter on Capital budgeting also includes
techniques of capital budgeting and analyzing risks in capital budgeting. Part seven goes into
Long Term Financing. It covers securities market and sources of long term finance.
The next part discusses Working Capital Management. It covers topics like working capital
policy and financing, inventory management, and cash and credit management. The last part
looks at some special topics like acquisitions, restructuring and mergers. It also discusses
international finance management, and project finance, leasing and hire purchase.
Fundamentals of Financial Management provide a good coverage of the basic concepts
relating to the financial environment. The topics explained include tax systems, financial
36 | P a g e
institutions, banking arrangements and the regulatory framework. All the concepts are
explained using numerous examples and illustrations. Besides the illustrations given within
the chapter, additional concepts, tools and techniques with illustrations are provided at the
end of chapter sections. The book takes an analytical approach, and explains the various
analytical methods in context.
37 | P a g e
CHAPTER 3
RESEARCH METHODOLOGY
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Main Objective: To study the profitability and overall strength of Nandan Denim Ltd
through Financial Analysis
Financial analysis serves the following purposes:
1. To Measure the profitability
2. To Indicate the trend of Achievements
3. To Assess the growth potential of the business
4. To Compare position in relation to other firms
5. To Assess solvency of the firm
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CHAPTER 4
DATA ANALYSIS AND
INTERPRETATION
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Horizontal analysis
Financial statements of Nandan Denim ltd
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Sources of Fund
450
400
350
Amt in Cr
300
250
200
150
Mar '15
Mar '14
Mar '13
Mar '12
100
Mar '11
50
0
Interpretation
From the above graph it can be seen that the companys Total share capital and equity share
capital is same in all the 5 years.
The total debt of company has increased from March 2011 to March 2015.
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500
Amt in Cr
400
300
200
100
0
Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
Year
Interpretation
The total current assets of the company have increased in past five years, while the current
liability is also increasing.
Working capital of the company has increased from 66.16 cr. to 183.06 cr.
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60,1
60
50
40
26,07
30
19,93
20
15,5
6,92
10
0
Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
Interpretation
In the past five years there has been a major shift in Cash and bank balance from 6.92 Crores
to 60.1 Crores. It clearly denotes that the sales of the company are increasing.
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Investments
8
Amt in CR
7
6
5
4
3
2
1
0
Investments
Mar '15
7,35
Mar '14
4,16
Mar '13
0,37
Mar '12
0,28
Mar '11
3,41
Interpretation
From the above chart it can be seen that in the year 2012 and 2013 the companys
investment is very less. While in 2015 the companys investment is very high. The
company has invested 100 lakhs in Bonds, 600.47 lakhs in equity shares, 25 lakhs in
mutual funds and 4.50 lakhs in Partnership firm.
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Contingent Liabilities
250
Amt in Cr
200
150
100
Contingent Liabilities
50
0
Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
Year
Interpretation
Contingent liabilities are kept for uncertain circumstances. The company has increased it
contingent liability from 42.73 crores to 208.9 crores.
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Inventories
160
140
120
100
80
Inventories
60
40
20
0
Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
Interpretation
By tacking business inventories alongside sales, Investors can interpret the direction of
production demand going forward.
Here inventory growth (16.16%) is less than sales growth (116%), so production demand will
increase. Thus it is creating economic growth.
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PROFIT & LOSS A/C (2011-2015) (Above digits are Rs. In Cr)
Amount in Cr
1.000,00
800,00
600,00
400,00
200,00
0,00
Total Income
Total Expenses
Mar '15
Mar '14
Mar '13
Mar '12
Mar '11
1.077,58
909,91
742,24
571,6
523,87
909,1
773,25
633,79
484,19
455,7
Interpretation
Above parameters show Total income & Total Expenses against amount.
According to the analysis of the graph in March 2011 the Total Income and Total
Expenses has been represented which gradually increases over the years till March
2015. Total expenses are comparatively decreases to Total Income.
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Cash Flow
250
Amount in Cr
200
150
100
50
0
Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
Interpretation
Above graph perceived that Net profit Before Tax, Net Cash, Operating Cash &
Closing Cash are increasing from the year 2011 to 2015.
It shows as if company will touch the highest profit in upcoming years.
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Above graphs data interprets that the companys Net Sales are increasing
consistently from March, 2012 to March 2016.
It is interpreting that company is successfully doing its Financials.
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CHAPTER 5
SYNOPSIS
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Findings
Findings are the principal outcomes of a research project, what the project suggested,
revealed or indicated. This usually refers to the totality of outcomes, rather than the
conclusions or recommendations drawn from them.
I found from the data analysis and interpretation that the Company is growing day by
day in financial term. From 2012-2016 its sales are increasing from 572.58 Cr to
1156.73 Cr. There is 50% increase in sales in last 5 years.
With the help of financial statement, the company can find out its stand among its
competitors in the market. Moreover, it is the most reliable analysis through which the
growth of the company could be measured.
Objective 1
To study the profitability and overall strength of Nandan Denim Ltd through Financial
Analysis
Financial Performance
1200
Amt in Cr
1000
800
600
2015
400
2014
200
0
Revenue from
operations
Profit before
Tax
Particular
From the above graph of data shows that there is a comparison between the years
2014 and 2015.
We can see in the graph that there is increase in profit and revenue in the company.
The companys growth is 22.68% in terms of revenue, 29.72% in terms of PBT,
30.83% in terms of PAT.
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It is evident from the above graphs that your Nandan Denim has progressed during the
period ended March 31, 2015. It has achieved aggregate sales of Rs. 1096.53 crores
and Profit Before Tax of Rs. 71.23 crores.
From the Financial statement analysis the company can measure its profitability.
The graph is indicating the trend of achievement of Nandan Denim Ltd.
The Directors of Nandan Denim are assessing the growth potential of the business.
Objective 2
Comparative position in relation to other firms
1. Position of the Company
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Net Profit
Net Profit
318,85
51,43
Nandan Denim
Arvind
0,21
KG Denim
0,19
Aarvee Denim
1,39
R&B Denims
(Amt in Cr)
We can see from the above line diagram that Arvind is on summit but it also shows
that Nandan is climbing to reach at summit.
Nandan Denim has achieved second position among these five companies with 51.43
Cr. Net profit.
The diagram can also interpret that company is capable to recover the debt according
to its profitability.
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CHAPTER 6
LIMITATIONS AND CONCLUSION
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Conclusion
Nandan Denim has shown fine statistical growth in their product demand with the
help of marketing strategy which has helped in increasing their customers.
Nandan Denim will be Asias biggest denim fabric maker by June this year when the
company will have completed its Rs 621-crore capacity expansion programme.
Arvind and Nandan Denim are both based in Ahmedabad, Gujarat. While Nandan
Denim was set up in 2004 and is a part of the Chiripal Group established in 1972,
Arvind Ltd was founded in 1931 as part of the Lalbhai Group, whose first
manufacturing unit, Saraspur Manufacturing Company, was set up in 1897 to produce
cotton yarn.
The above statement and analysis of comparative data says that in upcoming year
Nandan Denim will beat the Arvind.
Nandan Denim Ltd (NDL) has a denim production capacity of 71 million meters per
annum, at present.
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Bibliography
http://www.aarvee-denims.com/profile.html, Major players in textile industry, 15th July,
2016
http://www.moneycontrol.com/competition/nandandenim/comparison/NE06,
Balance
References
Books
1. Financial Statement Analysis Gokul Sharma
2. Fundamentals of Financial Management
3. Research Methodology C.R Kothari, New Age International
Publication, second edition page No.55 to 62.
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