6.

1 FINDINGS
The company does not have the ability to meet its short-term obligations as the current
ratio is <1.5 in 2014. In the year 2015, the current ratio of the company deteriorates further to
1.14 which is an alarming situation to pay off its liabilities. In the year 2016, the company
somehow manages to meet its obligations and matches with its counterpart to maintain a balance.
The company needs to have an efficient utilization of its assets to fulfil its obligations in order to
maintain its financial health and periodic operating cycle.
In 2014, the companys acid-test ratio is 0.67 which is a caution that it is running out of
liquid assets. The company has a further decrease in its acid-test ratio in subsequent years which
shows inability to fulfil its immediate liabilities with its short term assets.
In the year 2014, the company has an unsatisfactory inventory turnover ratio which
implies weak sales. In the year 2015, the company shows an improvement in reducing its
inventories which is good but in the year 2016, it could not sell its inventories and generate sales
with its drastic dropping of ITR. This shows that the company has low ROI due to non-
generation of sales.
In the year 2014, The Company can pay their interest expenses on debt. It gets reduced in
year 2015 and gets increased in the year 2016.
The fixed asset coverage ratio of the year 2014 is 0.19 as compared to other two year is
0.16 in 2015 and 0.22 in 2016.
The company has an account receivable turnover ratio is 20 times in 2014, 12 times in
2015and 7 times in 2016.
It shows how effectively inventory is managed by comparing cost of goods sold with
average inventory for a period in year 2014, 2015, 2016.
The average credit period is 57 days in 2014, 68 days in 2015 and 80 days in 2016.
In the year 2014, the companys operating profit ratio is 6.81, i.e. it saves after meeting its
variable cost of production. In the year 2015, the company reduces its operating profit depicting
a fall in its earning power. In the year 2016, the operating margin further reduces to 4.3 which is
a great concern.
In the year 2014, the companys Net profit ratio is 3.40, the company is having sufficient
amount of Profitability. In the year 2015, the companys Net profit ratio is 2.09, the companys
profitability gets reduced and is not sufficient enough as compared to 2014.In the year 2016, the
companys Net profit is 2.19, the companys Profitability gets increased.
In the year 2014, the companys ROI is 5.96 which means the company is providing
maximum benefit to their investors as compared to other two years i.e 2015 and 2016.
In the year 2014, The Company is earning more on less investment as compared to year
2015 and 2016. The company return on assets gets reduced from 2014 to 2016 which is a
concern.
In the year 2014, the retention ratio is that it is retained to grow the business, rather than being paid
out as dividends. It is consistent to all other 2 years i.e. 2015 and 2016.
The net sale of the year 2014 is 1.15 as compared to 2015 is 1.31 and it gets depreciated in 2016
by 0.02.
The D/E ratio indicates how much debt a company is using to finance its assets relative to the
amount of value represented in shareholders' equity. It means company financial leverage is not
satisfactory in the year 2014, 2015 and 2016.
 EXECUTIVE SUMMAEY

The analysis of financial statement is a process of evaluating the relationship between

component parts of financial statement to obtain a better understanding of firm financial position.
Analysis is a process of critically examining the accounting information given in financial
statements. For the purpose of analysis, individual items are studied; their interrelationship with
other related figures is established. Thus analysis of financial statement refer to treatment of
information contain in financial statement in a way so as to afford a full diagnosis of the
profitably and financial position of the firm concern.
The objectives of the study is to calculate and analyze the liquidity ratio, profitability ratio
in terms of understanding the financial health of the company and to analyze the financial health
of the company based on different ratios computed. This project work has been conducted during
25th May to 25th August of 2017. Throughout doing this project I got to know that the company
needs to have an efficient utilization of its assets to fulfil its obligations in order to maintain its
financial health and periodic operating cycle. Year 2014 and year 2016 has somehow same
results because of the weak sales. The company is unable to fulfil its immediate liabilities with
its short term assets. The company return on assets gets reduced from year 2014 to year 2016
which is a concern. Year 2014 had sufficient amount of profitability in comparison of year 2016.
The valuable informations I learnt in the guidance of Mrs Pragya Paramita Sarangi and Mr.
Mahendra Sarangi.