CHAPTER 1

INTRODUCTION

INTRODUCTION:

Financial Analysis is the collective name for the tool and techniques that are
intended to provide relevant information to decision maker. Financial analysis is a
process of assessing relationship between components of financial statement to get a
better understanding of the firm’s position and performance. The concept ‘position
‘indicate the financial position of the firm and performance.

The concept of analysis means methodological classification of the data given in the
financial statement. The Financial statement analysis is a powerful tool or mechanism
to determine strengths and weakness of an enterprise which depends on the data of
financial statement.

The Financial statement analysis will also help the business owners and other
interested peoples to analyze the data in financial statements to provide them with
better information about such key factors for decision making and ultimate
business survival.

NEEDS OF THE STUDY:

 The study has been conducted for gain knowledge about financial statement of
KMF, Mysore.
 To know the financial strength of the organization.
 To know the productivity of the organization.

SCOPE OF THE STUDY:

The study is to find out different managerial efforts to manage the total working capital as
well as the individual current assets.it is confined to the limits of MYMUL only.it covers
various financial statements such as profit and loss a/c,and balance sheet of preceding 5

years. The study is directed towards understanding the functions of different departments
especially in finance department.The study has been done to ascertain the final status of the
company, the study is made to analyze the financial performance with references of financial
statement like profit and loss a/balance sheet.
 OBJECTIVES OF STUDY:

1. To compare the previous five years and present year performance of the company.

2. To know the present financial system of mymul

3. To assess the short term as well as long term profitability position.

4. To evaluate the performance of the company by using ratios and its help to
measure the efficiency of the company.

5. To give suggestion and recommendation based on the study.

.

RESEARCH METHODOLOGY:

Research is an intensive and purpose search for knowledge and understanding

of social and physical phenomena.

SECONDARY DATA:

Secondary data are those data that have been compiled already before
conducting the research. It may be internal as well as external factor.

The sources of secondary data are;

 Annual report
 Mymul website
 Journals

Financial statement Analysis is a tool for business analysis. Business analysis is the
evaluation of the company prospects and risk for the purpose of making business
decisions. Different stakeholders Analyze business for different purpose. An Investor
an analyst analyze a business for valuation of equity and debt

TOOLS AND TECHNIQUE OF FINANCIAL ANALYSIS ARE:

 Comparative Financial statement
Common size financial statement
Trend Analysis
Ratio Analysis

COMPARITIVE FINANCIAL STATEMENT

Analyst review consecutive balance sheet, Income statement or statements of cash
flows from period to period, usually from year to year, comparative financial
statement analysis reveals Trend. An analysis of financial statement over several
years reveals the direction, speed and extent of the trend, comparison of statement
over a long period is sometimes unmanageable and is difficult to understand,
compare financial statement over a short period of 2 to 3 years.

 COMMON SIZE FINANCIAL STATEMENT :

Common size financial statement analysis helps understanding what proportion of
a group are sub group is made up of a particular account, In analyzing balance
sheet it is
 common to express invested capital of Total asset as 100 percent. Then each line
item within This group is expressed as a percentage of the Total of invested
capital or total asset. Invested capital is the amount of total asset minus intrest free
credit. It is also known as vertical Analysis.

 TREND ANALYSIS:
Trend percentage is very much helpful in making a comparative study of the
financial statement for several years. The way of calculating trend percentages
involves the calculation of percentage relationship that each item bears to the
same item for the base year. Each item for the base year is considered as 100 and
a basis the percentage for each of the items of base year is taken is calculated.

 RATIO ANALYSIS:

Ratio analysis is a powerful tool of financial analysis used by financial analyst.

It is the process of creating and understanding different ratios showing quantitative
relationship between figures and groups of figures. Ratio is useful for assessment of
business performance, evaluation of financial condition of an enterprise and making
decision in the business.

A ratio is a simple arithmetical expression of the relationship of one number to

another. It may be defined as’’ The quotient of two mathematical expressions’’. A
ratio can be expressed as a proportion, some analyst express ratio as a rate of time.

Ratio analysis is technique of analysis and interpretation of financial statement. The

process of establishing and interpreting various ratios for helping in making certain
financial decision.

TYPES:

Static Analysis: It is a type of analysis which involves only one year financial statement.

Trend analysis: It involves the study of financial statements of two or more years.
1. LIQUIDITY RATIOS:

Liquidity refers to the ability of a firm to meet its obligations in the short run,
usually one year. An enterprise should have enough cash and other current assets
which can be converted into cash so that it can pay its suppliers and lenders on
time.

a) Current Ratio:

Current ratio may be defined as the relationship between current assets and
current liabilities. It is a widely used indicator of the company’s ability to pay
its debts in the short-term.

Formula: current ratio = Current assets

Current liabilities

Current assets include loans and advances, bills receivables, sundry debtors and
inventories, work in progress these assets are easily converted into cash within a
short period of time generally one year.

Current liabilities are those obligation which are payable within a shorter period
of time generally one year. It includes bills payable, sundry creditors, accrued
expenses, short term advances, dividend payable etc.

b) Quick Ratio or Acid Test Ratio:

The quick ratio or acid test ratio is calculated by deducting inventories from
the current assets and then dividing the numerator by current liabilities.
Inventories are the least liquid of firm’s current asset: hence losses are most
likely to be occurred on these assets in bankruptcy. Therefore measure of the
firm’s ability to pay off short term obligations without relying on the sale of
inventories is important.
 2. Solvency Ratios:
It refers to the ability of the firm to pay both short term and long term
liability. It is the ratio which expresses the relationship between total assets
and total outsider liabilities of an organization.

a) Debt equity Ratio:

Debt equity ratio shows the relationship between long-term debts and
shareholders funds’. It measures the relationship of the capital provided by the
creditors to the amount provided by the shareholders.

b)Interest coverage Ratio:

The interest coverage ratio is a measure the number of times a company could
make the interest payments on its debt is also known as EBIT.The lower interest
coverage ratio, higher the company’s debt problem and the greater the possibility of
bankruptcy or default.

c) Proprietary or Equity Ratio:

The proprietary ratio is the proportion of shareholder’s equity assets, and it

provides uneven estimate of the amount of capitalization currently used to support a
business. High ratio indicates that a company has a sufficient amount of equity to
support the functions of the business .A low ratio indicates that the business may be
making use of too much debt or trade payables rather than equity, to support those
operations.

Proprietary or equity ratio: shareholder Fund

Total Assets

DuPont Analysis:

A type of Analysis that examines company return on equity by breaking it into three
major components, Turnover margin, asset revenue and leverage factor. By breaking
up the ROE
into distinct parts. Investor can be examined how effectively a company is using
equities, since it has poorly performing components will drag down the overall
figure.

To calculate firms ROE through DuPont Analysis multiple the profit

margin, Asset turnover, leverage factor Together.

Activity Ratio:
Activity ratio is also referred to as Turnover Ratio or Asset management
Ratio, measure how efficiency the assets are engaged by a firm. The ratios are
based on relationship between the levels of the activity, characterized by sales
or cost of goods sold, and the levels of several assets.

a) Inventory Turnover Ratio:

Inventory turnover Ratio or stock turnover ratio measure how fast the
inventory is moving through the firm and generating sales. It has defined
 Formula: Inventory Turnover Ratio = Cost of goods sold
Average stock

b) Debtors Turnover Ratio;

This Ratio depicts that the number of periods sundry debtors turn over during
the year.

Fixed Assets Turnover Ratio:

This Ratio measures sales per rupee of investment in the fixed assets. It can
be defined as

Formula:

NET SALES/AVERAGE FXED ASSETS

a) Working capital Turnover Ratio:

Working capital turnover ratio indicates whether working capital is effectively
utilized in making trades. It measures the efficiency in working capital
management.

The objective of computing this is to determine how efficiently the working capital is
utilized in making sales.

3) Profitability Ratio:
The main aspect of an enterprise is to earn profit which is necessary for the survival and
growth of the business enterprise it is earned with the help of invested in business. It is
required to know how much profit has been earned with the help of amount invested in
industry. It is possible through profitability ratio.
hese ratios examine the current operating performance and efficiency of the business
concern. These Ratios are very much helpful for management to take remedial measures if
there is a declining trend.
  Gross Profit Margin Ratio:
Gross profit measures the relationship of gross profit to net sales and is
usually represented as a percentage.

 Net profit Margin Ratio:

, The net profit margin is not very good at comparing companies in the
different industries. It is good, at however, the comparing companies in the
same industry if you want to look at the bottom line.
It is a good time series analysis measure by business owners can look at data
for their own company across different time periods to see how the net profit
margin will be Trending. Financial ratios are only useful when the
comparative analysis is used.

LIMITATIONS OF THE STUDY:

 The study duration in short period

 Non availability of the data as per the requirement
 Time was been constraint
 The study is limited only Mysore Milk Union Dairy
 To understand the concept of financial statement analysis techniques
 CHAPTER 2

REVIEW OF LITERATURE

1. Pavithra et al (2017),
in this article entitled “A study on the analysis of financial performance” have tried to analyze the financial
strengths and weakness of the firm by establishing relationship between profit and loss and balance sheet.
they have used cost volume Profit Analysis, ratio analysis and changes in working capital in order to study
the financial of the company that means The current ratio reveals a fluctuating over these years; that means
the company’s ability to convert the assets into cash is fluctuated.

2. Kostolansky et al (2010),

in this article entitled “A study on the A Financial Statement” have tried to analyze the financial owners
need to attract outside investors Although there is no fraud or intentional wrongdoing, the inexperience of
the owners and their bookkeeper has resulted in improper financial reporting. They have used financial ratio
analysis to develop the new business and whether each item has been properly classified in the financial
statements.

3. Calota Traian-Ovidiu (2013),

in this article entitled to “Analysis of Financial Statements” have tried to analyze the company
strength and weakness Any financial analysis may suffer from a kind of slight deviation from
reality” if it does not remain strongly linked to real facts. The role of anchor fixed into reality
within the economic and financial analysis is attributable to SWOT, and the company to develop
should maintain various activities to analyze the performance of the company.

4. Idhayajothi et al,(2014),
in this article entitled to “Financial Performance” have tried to analyze the financial strengths
and weakness of the firm by establishing relationship between profit and loss and balance sheet.
There is a fluctuation in the absolute Ratio It was 0.16 in the year 2008-09. In 2009-10 it is 0.17
and 2010-11 it was 0.40. It was 0.32 in 2011-12 and it increases to 0.50 in the year 2012-13. The
study reveals that the financial performance is fair. It has been maintaining good financial
performance and further it can improve if the company concentrates on its operating,
Administrative and selling expenses and by reducing expenses.

5. Ramya et al,(2017),
 in this article entitled to “Financial Analysis” have tried to analyze Every business organization,
whether manufacturing oriented or service oriented, needs finance, i.e., money for carrying on
its activities. The study is much important to the management from the point of decision-making
purpose, to identify the strength, weakness areas of the company and finally helps to maximize
the intrinsic value of the company.

6. Kavitha (2016)
The interest of the various groups related to a firm is affected by the financial performance of
the firm. So it is much of significance for these groups to analyze the financial performance of
the firm they are interested in. The study focus on overall financial position of particular
Mahindra and Mahindra Company during the specific period based on the selected variables,
which may interest not only for the respective companies in the industry but also brings a
process of development operational aspects of the entire industry.

7. Kumar et,al. (2016),

test the size and profitability relationship in the Indian automobile industry. To analyze the
relationship linear regression model as well as cross-sectional has been employed for the year
1998to 2014. For profitability analysis two different measures have been used (i) ratio of net
profit to total sales turnover (ii) ratio of net income to net assets plus working capital and for
form size two indicators used namely, total sales turn over and net assets. The time series
analysis showed the positive relationship between firm size and profitability but cross-
sectional shows no relationship between firm size and profitability.

8. Ravichandran et,al (2016),

The main idea behind this study is to assessment of viability, stability and profitability of Force
motors limited. Operating position of the company can be measured by using various financial
tools such as profitability ratio, solvency ratio, comparative statement & graphs etc. This study
finds that company has got enough funds to meet its debts & liabilities. Company can further
improve financial performance by reducing the administrative, selling & operating expenses.

9. Amit(2016),

companies in capital line database to discuss the standard current ratio of Cement Manufacturer
is matched with standard norms. The study concludes that current and liquidity ratio of Cement
Manufacturer is matched with the improve the repaying capacity to strengthen the financial
aspects.
10. Gajera (2015)

in his research article an financial performance evaluation of private and public sector banks
found that there in significance difference in the financial performance of these banks and
private sector banks are performed better than public sector banks in respect of capital
adequacy ratio and financial performance,

1 1 . Srivastava(2014),

Data analysis has been done using the top down approach, i.e. Economic analysis, industry
analysis, company and technical analysis to find relationship between automobile sector index
with market index. Mahindra and Mahindra have a great position on the stock market and will
attract investor and this could lead to expansion and growth. Thus Tata motors and Maruti
Suzuki need to take care of their stock and expansion.

12. Anita (2014),

It is very important for the customer to spend some of their time in banks to avail all services.
Relationship marketing should be emphasized on the co-operate staff members and special
training should be provided also private banks are ahead of public banks in the strategic intent.
Also in order to keep the customer satisfied the infrastructure of the banks decor sitting facility
are adequate also overall improvement of the banks is necessary by making the customers
available with the latest technology and services. Naloni studied the service quality model for
customers in PSB's she stated that the entry of new private sector banks has led to improve
customer service and products.

13. Gordon et,al (2014),

The economic development of any country depends on the existence of a well-organized

financial system. It includes financial markets and financial institutions which support the
system. Financial system provides the intermediation between savings and investment and
promoters faster economic development.

14. Zafar, (2012),

the study explored that ratios are calculated from financial statements which are prepared as
desired policies adopted on depreciation and stock valuation by the management. Ratio is
simple comparison of numerator and a denominator that cannot produce complete and
 authentic picture of business. Results are manipulated and also may not highlight other factors
which affect performance of firm by promoters.

15. Nutan et,al (2012),

The study related that the private sector bank the percentage of other income in the total
income is higher than public sector bank. Public sector bank depend on intent income for their
efficiency and performance. The operational efficiency of private sector banks is better than
public sector banks. Private sector bank use their assets quality better than public sector banks.

16. Amit et,al(2012)

performance refers to the accomplishment of a given task measured against preset standards of
accuracy, completeness, cost and speed. Performance is used to indicate the firm’s success,
conditions, and complains. The goal of financial performance analysis is to determine the
efficiency and performance of the firm’s management, as reflected in the financial records and
reports.
 CHAPTER-3
COMPANY PROFILE

1. INDUSTRY PROFILE

General information of milk and milk industry

The progress of mankind and civilization has, since history began, been
closely alike with his diet. Even today the leading nation and nations capable of
becoming strong are those, which can obtain food in abundance for their people.

It has been said that cow is a machine that converts raw materials (plants) in
food in a surprisingly efficient manner. The method by which cattle are managed in
order to produce milk can be accomplished in many ways. In order to be most
successful, dairymen or those contemplating entering the business should carefully
survey to produce under local conditions.

Milk may be defined as the whole, fresh, clean, lacteal secretion obtained by
the complete milking of one or more healthy milk (milk giving) animals. It is an
almost an Ideal food. Although milk is commonly thought as a beverage, it is
nature’s most nearly prefect food and contains more actual solids than many so
called solid food, especially vegetables. Milk is the only food, which is designed by
the nature solely as food. It serves as the foundation of as adequate diet. It supplies
bodybuilding protein, bone forming minerals and health giving vitamins and
furnishes energy giving lactose and milk fat. All these properties make milk
important for pregnant mothers, growing children, adolescents, adult’s invalids,
convalescents and proteins alike. An adequate consumption of milk can correct
dieting deficiencies for most people to have strong and healthy bodies. It is a
delicious and
appetizing food for all ages as well as being healthful. The Table 1.1 shows
constituents of milk and its percentages

Table 1.1: Constituents of Milk and its Percentages

Constituents of milk Percentage (%)

Water 87.0
Butter fat 4.0
Casein 2.8
Albumin 0.5
Lactose (milk sugar) 5.0
Minerals 0.7

Milk constituent is divided water and solids. The constituents other than
water are called the total solids (TS). The total solids minus the butterfat termed as
the solids - non-fat (SNF). All the constituents except the butterfat are known as the
milk serum. The casein and albumin make up most of the protein of the milk.
Actually about 0.055 globulin is also present.

The major constituents of milk are water, butterfat, protein, lactose and
minerals. The minor constituents are vitamins, pigments such as carotene, fat-soluble
pigment lacto Flavin, and water-soluble pigment lacto Flavin, and cholesterol,
phospholipids (lecithin), and sterols, enzymes such as lipase, galactose, diastase etc.,
gases such as carbon-dioxide, oxygen and nitrogen and nitrogenous substances such
as uric, urea's nitrogen and traces of amino acids. That true constituents are milk
obese, casein and lactose.
 Milk is completely essential for the development of the human race, the cow
has been rightly called “the foster mother of the human race” and she is found in
most of the civilized of the world.

ORIGIN OF THE INDUSTRY

The term “market milk” refers to fluid whole milk that is sold to individual
usually for direct consumptions, as a major enterprise, the market milk industry is of
comparatively recent origin even in developed diary countries such as USA though
ancient written record report milk as an important food, it's processing and
distribution as a separate commercial business did not develop in those countries until
the concentration of population in the cities reached a high level in the middle of the
19th century.

In India, dairying has been practiced as a rural cottage industry since the
remote past. Semi commercial dairying started with establishment of military dairy
farms and co-operative milk unions throughout the country towards the end of the
19th century, however, market milk technology may be considered to have
commenced in 1965, with the functioning of the central dairy of Aarey milk colony
and milk product in 1956 with the establishment of AMUL.

In developed daring countries such as the USA, the year 1850 is seen as the
dividing between form and factory-scale product .various factors contribute to this
change in these countries. Viz, concentration of population incites where jobs were
plentiful, rapid industrialization, improvement in transportation facilities,
development of machines etc.
Whereas the rural areas were identified for milk production, the urban centers were
selected for the location of milk processing plants and products manufacturing
factories. Gradually formers within easy driving distance begin delivering milk over
regular routes in the cities.
Prior of the 1850's most milk was necessarily produced within a short distance of
the lace of consumption because of lakh of suitable means of transport and
refrigeration.

GROWTH AND DEVELOPMENT OF THE INDUSTRY

Until the 1940, there was very little published information on the method of
preparation and use of these products. The credit for the first publication on the
subject goes to Dr. W.B. Davis, the first director of the industry research, Indian dairy
research institutes (now national), Bangalore. Within the span of these four decades
since his book appeared, considerable research has been places in indigenous dairy
products.

PRESENT STATUS OF THE INDUSTRY

The Indian dairy industry is heading towards new century with an accelerated
and positive momentum. With unprecedented growth in milk production by over two
and a half time in the also two decades to about 58.8 million tons in 1992, India has
emerged as the largest milk producer in the world with an annual milk production of
76million tones. Food processing industry ranks as the 5th largest industry in the
country. Through the milk and milk products have 85% business in unrecognized
sector; it is having only 7% growth per year.

The establishment of a co-operative structure as a ready and regular buyer or

milk produced gave a new turn to the rural economy. Today, over 275 dairy plants
and 83 milk products factories in the co-operative, public and private sectors handle
an estimated 12-15% of the total milk produced. In most of the countries in the world,
the proportion of milk delivered to the dairies is over 90%. The trends are now
changing fast in India too it is expected that the processing of milk on organized scale
will increase sharply in developed countries. This will consequently increase the
opportunities for value addition. While the value of the output of the dairy products in
the countries food sector has increased from 5-7% during the same period. Now, the
days of milk scarcity and imports are behind us, the organized sector can seize the
opportunity of tapping the market of value added dairy products like butter, cheese,
lactose, khova, paneer, etc.
 It is beyond doubt to mention that the organized dairy industry has done a
splendid job by transformation itself from an import-dependent enterprise to self-
sufficient industry and the embarking on export of various products. And, now it is
poised for another wave of expansion by undertaking large-scale production of
milk in the organized sector.

CHANGING PATTERN OF THE INDUSTRY

The demand for milk and milk products in the country is on the rise. The
increase in purchasing power and pace of urbanization is leading to a change to a
change in the lifestyle and consumption habits of the households .the current trends
indicates that 44% of the total population would be urban. This will definitely lead
to an increase in consumption of dairy products.

The domestic market for butter and ghee is growing at a healthy rate of over 10% per
annum but the same may not be true in case of an international market. The
production and export of butter has witnessed a major decline in some of the
developed countries. The situation is now alarming to the industries which are having
international markets for this product. These companies definitely have to think about
other potential products that are gaining steady growth all over the world.

The production of dried milk and related products has become an incurring important
segment of dairy industry. The concept was started to utilize the surplus milk
manufacture of products having good shelf life at room temperature in the flush
season. Today, a number of industries are involved in the manufacturing of variety of
dried products comparable to their western counterparts. A range of products is
widely accepted for direct consumption or they're their different applications in
various products.

Ice cream, a modern frozen dairy product, is relatively new addition in India. At
present, the market reach of an ice cream may not be very large. But, the potential
market is more than the ten times. That might be one of the reasons that a company
like unlived group has
delivered into this segment to build their brands and capitalize its production in
Indian market. Today, ice cream is treated as one occasional treat but the dairy is not
for off when it transfers itself into a dairy delight of the masses. It is expected that ice
cream will constitute a sizeable part of the dairy.

Cheese, which is considered a main delicacy in the breakfast in so many

countries, hasn’t been given its due status so far. About 2% of the total milk
production goes into cheese preparation. The demand in India is mainly confined to
urban centers and armed forces.
However as the awareness towards cheese is spreading, the demand is gathering
momentum. The export potential of cheese has generated interested in the private
sector in setting up larger units.

A major quantity of milk output is converted into varieties of traditional dairy

products catering to regional tastes. These products are produced in large
quantities but on a small caused by the organized sector, by using the old process
that is empirical in nature.

There are so many popular products but still those are being prepared in households.
Hardly, efforts have been made to capture and capitalize in this area.

Strategies to boost Indian dairy products globally

 Improve the quality of the products.
 Value addition into widely accepted products.
 Improving productivity and reducing the cost of production.
 Building brands.
 Public relations and strict measures to avoid misinformation, viz., and
superiority of buffalo milk synthetic milk.
 To lead in milk production.
 Research and development.
 Energy conservation.
 Utilization of desirable constituents from the waste rather than draining.
KARNATAKA COOPERATIVE MILK PRODUCERS
FEDERATION LIMITED (KMF)

KMF is the Apex body Karnataka representing dairy farmer’s co-operatives. It

is the third largest the dairy cooperatives in the country. In south India it stands first
in terms of procurement as well as sales. One of core functions of the federation is
marketing of milk and milk products. The brand ‘NANDINI’ is the household name
for pure and fresh milk and milk products.

KMF has 13 milk unions throughout the state, which procure milk form
primary dairy cooperative societies (DCS) and distribute milk to the consumers in
various towns/cities/rural markets in Karnataka.

The first ever world bank funded dairy development program in the country
started in Karnataka with the organization of village level dairy co-operatives in
1974.the AMUL pattern of dairy co-operatives started functioning in Karnataka from
1974-75 with the financial assistance form world bank, operation flood II & III. The
dairy co-operatives were established under the ANAND pattern in a three tier
structure with the village level dairy co- operatives forming the base level, the district
level milk unions at the middle level to take care for procurement, processing and
marketing of milk and the Karnataka milk federation as the apex body to co-ordinate
the growth of the sector at the state level.
 Coordination of the activities among the unions and developing market for
milk and milk products is the responsibility of KMF. The respective milk unions
organize marketing milk in the respective jurisdiction. The federation monitors
surplus/deficit of liquid milk among the member milk unions. While and outside the
state, all the milk and milk products are sold under a common brand name NANDINI.

BACKGROUND AND INCEPTION OF THE COMPANY

Mysore milk union was registered in the year 1987. The product dairy was
then managed by Mysore dairy. In the year 1988, the product dairy, Gejjalagere was
handed over to Mysore milk union.

MYMUL with its headquarters at Mysore has got milk plant of 2.0-lakh
litter’s capacity. It has three chilling centers at Ch-nagara, Hunasuru and Kollegala.
The dairy as a spread of 10 acres of land at Mysore.

MYMUL was a part of Mysore milk union till 1987. In 1988 started union
marketing about 5000 lts per day which gradually extended to about 15000lts. There
come a boom through the at advent of milk marketing in Bangalore city from 1993. as
an today the milk sales is about 1.59lakhs litters per day (1.24lts in sachet and 0.35
lakhs it’s in bulk) with annual turnover of Rs65 crores alone on this account out of the
total RS 100 crores turnover through the sales including milk products, butter, gee,
burfi, lassies, curd etc.. it has steady and continuous profits from 1994-95.

The philosophy of union is to eliminate middlemen and organize institution to

be owned and managed by the milk producers themselves, employing professionals
and to achieve economies of scale to ensure maximum returns to the milk

producers.

2.3 NATURE OF THE BUSINESS CARRIED

The MYMUL is stand for Mysore milk producers co-operative union limited.
the name implies union is found for the purpose of the milk producers who were un-
organized in
nature in earlier days before foundation of the unions. The nature of the the organized
milk union formed for the protecting the interest milk producers who were un-
organized in the nature of olden days. But In previous days milk producers were, who
situated in villages are use to keep cows, buffalo’s, goats, sheep’s etc. in that time
what milk they produced is has no any organized market and they were not getting
reasonable price for produced milk. They provide milk producers status in that time
how they un-organized in nature. These are the basis for the foundation of these dairy
union

The mainly union stands for accumulating the milk from the milk producers
who located in the villages bulk numbers. From village level co-operative societies
milk transported through trucks to district milk union. These Union supplies that milk
to the milk- buying customers who located in the urban areas. They use to fix the
reasonable price to both buyers and milk producers.

VISION, MISSION AND

QUALITY Vision

To grow in to model cooperative milk union in the country by accomplishing

the mission of assuring rural prosperity in the lives of member milk producers in
Mysore dist.

As a part of long-term growth oriented development strategy, the union is

expanding rapidly by implementing several infrastructure projects and schemes.
Union can play an important role in assuring rural prosperity in the lives of the milk
producers.

Mission
Assuring the rural property in the lives of member milk producers in Mysore district
and to provide good quality of milk and milk products to the people of urban People

The Quality Policy and Objective

1. To encourage rural farmers to engage in dairy forming and producing more
milk and good quality of milk at least cost.
2. To provide assured and remunerative market for the milk produced by the
farmer members.
 3. To provide good quality of milk and milk products to the people of urban area
by scientifically processing the milk obtained from rural area.
4. To build village level institution co-operative sector to manage the dairy activities.
5. To provide good quality milk and milk products at competitive price to urban
and rural consumers.

In order to fulfil the objective of union is constantly engaged in working towards

improvements of the business as well as the welfare of the producer members. This
has resulted in greater performance on commercial as well institutional fronts.

Product and service profile.

The product profile, which refers to the study of the products information of the
company. The various milk and milk products manufactured at MYMUL are shown
in the below table. The Table 2.1 shows types of milk and milk product

MYMUL has manufactured the following products:

Products of mymul

Type of product Product Image Quantity Available in

Nandini Toned Milk 520 ml, 1 litre

 Type of product Product Image Quantity Available in

Nandini Homogenized Toned Milk 270 ml, 500 ml

Nandini Homogenized Cow Milk 515 ml

Nandini Curd 215 grams, 515 grams

Nandini spiced Buttermilk 200 ml

NandiniShubam Milk 515 ml

Nandini Sweet Lassi 200 ml

 Type of product Product Image Quantity Available in

200 ml, 500 ml, 1 litre, 15

Nandini Ghee
kg

NandiniPeda 100 grams, 250 grams

25 grams, 100 grams, 250

Mysore Pak
grams

Products:

1. NANDINI FULL CREAM MILK: full milk: contain 6.1% far and 9% solid
not fat. Rich creamier and tasted milk. Ideal for preparing homemade sweets
and savouries.available in 500 ml
2. NANDINI HOMOGENIZED TONED MILK: nandini homogenized toned
milk is pure milk, which is homogenized and pasteurized, consistent right
through. Available in 500ml packs.it gives you more cup of tea and coffee and
is easily digestible.
3. NANDINI GHEE : a taste of purity, nandini ghee made from pure butter it is
fresh and pure with a delicious flavor, hygienically manufactured and packed
in a special pack to remain the goodness of pure ghee. Shelf life of six months
ambient temperatures. Available in 200ml, 500ml, 100ml, sachets and 15kgs
tins.
4. NANDINI CURD: nandini curd made by pure milk,and it is thick and
delicious. Give you all the goodness of homemade curds. Available in 200gms
and 500gms sachet. And 1 ltr packs.
5. NANDINI STANDARDISED MILK: this milk contains 4.6% fat and 8.5%
solid not fat. Available at 500ml pack.
6. NANDINI PEDA: no matter what you are celebrating nandini peda from
delicious treat for the family made by pure milk, stored at room temperature
approximately seven days. Available in 50 grams for pack containing 10
pieces of each.
7. NANDINI MYSORE PAK: fresh and delicious, nandini Mysore pak is made
from high quality Bengal gram, nandini ghee and sugarcane. Available at
250grams and 500grams.
8. SWEET LASSIE: sterilized flavored milk, nutritious and healthy milk and an
all season wholes home drink available at different flavours.
9. MASALA MAJJIGE: it is one of the drink available from dairy.it should be
prepared with masala ingredients.
10. NANDINI BUTTER: It is rich, smooth and delightful. Nandini butter is made
from fresh pasteurized cream. Available at 100gms, 200gms.and 500gms
packs.
11. NANDINI SHUBHAM MILK: pure milk contains 6%fat and 9%SNF.a rich,
creamer and tastier milk which is ideal for preparing homemade sweets and
savories. Available at 500ml and 1 litre packs.
12. NANDINI MILK POWDER: nandini milk powder gives purity and taste as
similar as liquid milk.it can be stored for longer time than liquid milk at room
temperature.avalible in 100 Gms, 200 Gms, 500 gms and 1 kg packets.

Following is the general information of MYMUL plant in

Mysore: Area of the dairy: 10 acres
Handling capacity 2, 74,000
LPD. Estimated cost of
building: 2.89 crores Number
of employees 380
 SERVICE PROFILE:

The service profile of the MYMUL is characterized by motive of providing service without
expectation. The service provided by the union is completely for service purpose rather than commercial
purposes they are render service to their customers in the sense of the serve the milk producers who
supplying the milk to the union. We can call this union’s service motive as “maximum service with
minimum expectancy”. The analysis of the service profile of MYMUL as follows.

1. Step program: This program is developed for the purpose of creating the
employment opportunities for women’s in this sector.
2. Training and development programs: In order to achieve the objective of
development of milk producer’s dairy activities and dairy milk co-operative
societies status, the union is conducting a training and development programs
for staff members of dairy co-operative societies and milk producers.

3. Dairy food development: This is an important service provided by the union of

its milk producers. The union is providing developed green food growing and
healthy cattle feed to healthy development of dairy animals. To achieve this
are providing cattle feed, which produced by the union to sell for the rural
milk producers, through its dairy co-operative societies.
4. Providing assistance in organizational development to dairy co-operative societies.
5. Conducting dairy animal’s health awareness and milk production
improvement programs.
6. Storage services and technical assistance to dairy co-operative societies.

AREA OF OPERATION
As a district milk union of KMF, the union has no opportunities to expand their
operation. This because the MYMUL is structured under KMF as a district milk
union of Mysore district. The union itself acts as a branch of KMF but the union has
opportunities by way of marketing its milk products out of its limited market borders
means of its district market borders.
 The district milk unions are managed by the KMF, which acts as a mother of
organization to all other district unions in Karnataka. The union received all types
demand orders from in and outside company. Especially milk powder is more demand
from foreign countries the union will produce other milk product according to their
demand rate.

MILK PROCUREMENT

Co-operative societies of dairy function : 895

Societies registered in dairy : 936

Outcome routes : 71

Distribution centers : 4

Capacities covered : 2

: Cities covered : more than 2000

MILK DISTRIBUTION

Basis routes : 35

States covered : 2

Promoting agents : 60

Export agents in urban : 374

Trade agents in rural : 235

Milk plants : 48
OWNERSHIP PATTERN OF MYMUL

The ownership pattern in the MYMUL is characterized by the members share capital
investment. The members of the unions are dairy co-operative societies (DCS), which
parented by district milk union. The unit, acts as representative member of district
milk union by located in villages, is called as dairy co-operative societies of
respective village.

The capital structure of union is a accumulation of member share investment

which invested by every member of dairy co-operative societies in village to get the
membership as milk supplier to the district milk union

Member of share capital structure of the union is as here Accumulated members

of share capital in the union is share capital; this share capital is deposited in
MYMUL bank account in the name of respective member dairy co-operative
societies.

INFRASTUCTURAL FACILITIES IN MYMUL

a. Production Infrastructure Facilities

Good nature and flexibility to fulfill the production demands characterize the
infrastructure facilities in MYMUL. The union has good milk processing plant, which
supported by new advanced technology. MYMUL was a part of Mysore, tumkur milk
unions till 1987. In1988 it started marketing about 5000 liters a day, which gradually
extended about 15,000 liters.

MYMUL has got liquid milk plant two-lakh liters capacity and powder plant of
ten M T capacities per day through the assistance of national dairy development board
(NDDB). It has chilling centers at Nagamangala, Malavalli and K.R. Pet. The dairy
was spread of 47 acres of land at Gejjalagere and 3 acres of each at K.R.Pet,
Nagamangala and . The union has it own trucks for transporting the milk from dairy
co-operative societies to its manufacture units, with good milk earning networks
a. Canteen facilities for employee and workers: As a Section 46 of factories
act, at 1948 imposes statutory obligation to employees to provide canteens in
premises employing more than 300 workers, in MYMUL a big canteen is situated
beside the working complex to provide canteen facilities.

b. Accommodated buildings for operations of the union: The union has

good building infrastructure facilities to smooth functioning of different department’s
day-to-day operations in organization.

ACHIEVEMENT/AWARDS EARNED BY MYMUL

On 26-03-2005 the union is recognized as “ONE OF THE HONEST INCOME
TAX PAYER” by the commercial taxes department. The Other achievements of
union can be revealed in following milestones of the union.
1. Establishment of 18 co-operative societies in district, which fully administered by
women members.
2. In 1993-94 the union has increased its milk production plant capacity to 2.0-lakh ltr.
3. In the year of 2002-03 the union has got the international license. The
MYMUL is the first south milk union in getting this license.
4. In the year 2003-04 the union has developed consolidated price list for cow’s
milk and buffaloes milk, which is first in its types in all over Karnataka. In the
same period union released double toned milk.

COMPETITORS INFORMATION

MYMUL largest milk industry in Mysore and chamarajanagar. Both the districts are
having more villages or rural areas. Therefore tough competition from milk vendors
and other milk industries. The competing Brands are: -

 MUKUNDA
 FRISH MILK
 AROKYA
 JERSY
 DODLA MILK
 SWSTIK MILK
 THIRUMALA
 NANDA
 HERITAGE MILK

Many Individual Customers and small Dairy for Street Milk Tanker, Parallel Milk
Storage Tanks and Milk Treatment Equipment’s from Maharashtra, Andhra Pradesh,
Karnataka, Tamil Nadu, Gujarat etc. are GRB, Sri Krishna, Revati, Joy, MTR, etc.
WORK FLOW MODEL OF THE MYMUL

Production process has the following workflow model.

DCS

Fresh Liquid Milk

Chilling Sample Testing Fat and SNF

Storing

Homogenization

Separation

Pasteurization

Storing

Packing

Dispatching
 PRODUCTION PROCESS

The main objective of this department is to follow up production schedule as per the
plan and to maintain close and co-ordinate relationship with other departments and ensure to
upgrade the technical efficiency of production. Milk, as is a highly perishable product, has to
be processed immediately to avoid spoilage with respect to the flavor, quality and taste.

Production department is well equipped and has various types of highly sophisticated
machines imported from Sweden and Denmark. Once the milk is received from P&I
department, it is first weighted with the help of weighting bowl. Later, it is poured in tip tank.
Sample testing made through lactometer reading and other tests. The fat and SNF content of
each sample of milk is accessed.

Later, the raw milk is passed through plate chiller of capacity where it is cooled up to
0
4-5 Celsius. This cooled raw milk is further stored in a storage tower of 30,000 liters
capacity.

 DISTRICT CO-OPERATIVE SOCITIES (D.C.S):

 Milk reception collects the milk from the co-operatives. The raw milk comes in vans
which enter the input dock. The cans go one by one through a machinery track,
workers check the cans, and write the number of liters of milk contained in the cans.

FRESH LIQUID MILK (SAMPLE TESTING):

 Quality control mainly concerns with the quality checkup of milk collected from co-
operative societies. The quality control department takes the sample of milk and
analyses the fat content and divides it, like fat and SNF (solid not fat).
  CHILLING & STORING:

The collected raw milk is chilled in the system at 50C for bringing down the temperature of
atmospheric temperature. After chilling, the milk is transferred to the silos (container) and
milk is standardized. After milk standardization, the milk is drawn from silos for
pasteurization. In pasteurization process, the milk is heated to 750C and cooled to 50C, and
then it is stored in silos again.

o The pasteurized milk is transferred to cream separation tank. Here, the cream
is separated and stored in cream storage tank. The cream separated milk is
passed to further processes.

 HOMOGENIZATION, SEPERATION & PASTRURIZATION:

o In separator, fat percent is removed from milk (raw milk contains 4.3 % of
fat and dairy milk packet contains mainly 3 % of fat). The separator separates
milk on the basis of fat like Toned milk 3 % fat and 8.5 % SNF.
o The required quantity of standardized and pasteurized milk is transferred for
further production of milk products like Butter, Ghee, Milk Powder, Peda
etc.,

 PACKING & DISPATCHING:

o After the above-mentioned process is completed the milk and milk products
goes to packing section. They are packed and dispatched according to the
shifts.
SWOT ANALYSIS
STRENGTHS:

 Nandini is a strong brand value.

 Highest market share among the organized brands in the packed milk market segment.
 Strong distribution of networks (cold chain distribution for quality milk supply).
 Price leader in the organized market (less price compared to competitors).
 Geographical location in order to quick supply of milk in the market.
 Local milk processing and parking facilities.
 brand
WEAKNESS:

 advertisement
 Channel members not loyal to Nandini.
 Consumer not getting milk at MRP.
 Research and development facilities.

OPPORTUNITIES:

 New product innovation

 To export its products to other states
 Growing institutional demand for homogenized milk.
 Vast rural market potential.
 Scope for milk variants and milk products.
 Market expansion
 Servicing the below poverty of low income people with new schemes
THREATS

 Competition with local dealers

 Many private firms have entering.
 Rapid growth in technology.
 Lakh of consumer awareness
 FUTURE GROWTH AND PROSPECTS

 The union intends to establish total of 100 DCS by the end of 2010.
 Planed to establish artificial insemination centers and chilling centers across
the district.
For this they are expected expenses of Rs 16800 for single AIl centers, and Rs

201600 For cluster centers.

 The milk procurement is expected to increase to 44850-kgs.per day.

 The local sales are expected to 108610 LPD and bulk sales are 51610 LPD.
 Cattle food sales will also be increased to 106 metric ton.
 FINANCIAL

STATEMENT
Particulars 2010 2011 2012 2013 2014
BALANCE SHEET
Liabilities
Capital Account 285606827 385646834 457119133 550156983 738815315

Loans 70278651 152028450 96072688 149795197 230469477

Current Liability 96235854 218582463 167280898 288419747 599923413

Profit and Loss 86958441 114305798 102693946 84223271 107338209

Account

Total 539079773 870563546 823466665 1072595199 1676546414

Assets
Fixed Assets 250159222 260587644 277297008 348163007 489648885

Investments 19619212 126371278 60048369 24607384 77053491

Current Assets 269301339 493604624 485821288 699824808 1109844039

Total 539079773 870563546 823166685 1072595199 1676546414

3. MC-KINSEY’S 7-S FRAMEWORK

McKenzie’s 7s frame work with special reference to organization under
study. Mc Kinsey’s 7S frame work was developed in the late 70’s Mc Kinsey
Company, a reputed management consultancy firm in the United States.

McKenzie’s 7s frame work with special reference to organization under study.

The structure rest on proposition that effective organizational change is best

understood in terms of complex relationship between Strategies.

1. strategy
2. Structure
3. Systems
4. Style
5. Skills
6. Staff
7. Shared values (or super-ordinates goals)
1) Strategy:
Strategy refers to those actions that a company plans in response to or
in anticipation of changes in its external environment, its customers and its
competitors. It is a plan or course of action leading to the allocations of an
organization’s finite resources to reach identified goals.
Push Strategy- In this type of marketing strategy the activities are incentives, gifts
etc. are given to dealers to introduce them to enhance the sale of milk to end users.
The marketing activity is not implied upon end users in this case, the idea is to push
the product through the help of the dealers and other intermediates.
Pull Strategy – Here the marketing activities are focused on the end users by
providing them with gifts, incentives; mason meet engineers meet, etc. so that
demand is created in the market and is sold to dealers in lieu of demand created in the
market by end users.
ORGANIZATION STRUCTURE

President

Director Director
Director Director Director
(Govt) (Govt)
(DCS) (NDDB) (Society)

MANAGING DIRECTOR

Finance
Dept.

Procurement Product Marketing Admn

Dept. process Dept. Dept.
Dept.

Quality FGS & Account &

Transport Control Stores MIS Purchase
3. System:

Rules, regulations and procedures constitute ‘system’s in the 7-S frame work,
which complement the organizational structure. The ‘System’, may be called the
‘infrastructure’ and include sub-systems relating to production planning and control,
cost accounting procedures, capital budgeting, recruitment, training and development,
planning and budgeting, performance evaluation of organization in the KMF Unit, of
Mysore dairy.

4) Staff:

It refers to the way organization initiate young recruits into the main stream of
activities and manner in which they manage their careers as the new entrants develop
into managers.

5) Skills:

‘Skills’ refers to the ‘distinctive’ competence, which reflects the dominant

skills of an organization.

Closely related to staff are the distinctive abilities and talents that a company
possesses. Skills may range from ability of a staff to speak Spanish to an
understanding of Statistics to computer literacy etc.

6) Style:

‘Style’ is another variable, which may determine the effectiveness of

organizational change effort; style determines the culture of the organization

The culture of the organization, consist of two components:

 ORGANIZATION CULTURE: the leading value and beliefs, and norms,

which develop over time and become relatively enduring features of
organizational file.
 MANAGEMENT STYLE: more a matter of what managers do that what
they say; how do a company’s managers spend their time? What are they
focusing attention
Symbolism – the creation and maintenance (or sometime deconstruction) of
meaning is a fundamental responsibility of managers.
7) Shared values:
Shared values in the Mc-Kinsey’s model refer to the set of values and
aspirations that go beyond the formal statement of corporate objective.
 CHAPTER-4

DATA INTERPRETATION AND ANALYSIS

Comparative statement;

Analysts like comparative statements because they show the effect business decisions
have on a company' lowest line. Analysts identify trends and to evaluate the
performance of managers, and for new lines of business and new products on one
statement instead of having to flip through individual financial statements from
different periods of time. When compare the different concerns, a comparative
statement shows how business react to market conditions affecting an entire industry.
Comparative balance sheet of 2011-12 to 2012-13

Particulars 2011-2012 2012-2013 Increase/decrease Increase/decrease

(amount) %

Source Of Fund
Capital Account 45,71,19,133 55,01,56,983 9,30,37,850 20.35
Loans 9,60,72,688 14,97,95,197 5,37,22,509 55.91
Current Liability 16,72,80,898 28,84,19,747 12,11,38,849 72.41
Profit and loss 10,26,93,946 8,42,23,271 1,84,70,675 17.98
A/C

Total 82,31,66,665 1,07,25,95,199 24,94,28,533 30.30

Application of
fund
Fixed assets 27,72,97,008 34,81,63,007 7,08,65,999 25.55
Investment 6,00,48,369 2,46,07,384 3,54,40,985 59.02
Current asset 48,58,21,288 69,98,24,808 21,40,03,520 44.04
Total 82,31,66,665 1,07,25,95,199 24,94,28,534 30.30

TABLE 4.1
 Increase/decrease Increase/decrease
Particulars 2012-2013 2013-2014
(amount) %
Source of fund
Capital Account 55,01,56,983 73,88,15,315 18,86,58,332 34.29
Loans 14,97,95,197 23,04,69,477 8,06,74,280 53.85
Current Liability
Profit and loss
28,84,19,747 59,99,23,413 31,15,03,666 108
A/C
8,42,23,271 10,73,38,209 2,31,14,938 27.44

Total 1,07,25,95,199 1,67,65,46,414 60,39,51,216 56.3

Application of
fund
Fixed assets
Investment 34,81,63,007 48,96,48,885 14,14,85,878 40.63
Current asset 2,46,07,384 7,70,53,491 5,24,46,107 213.13
69,98,24,808 1,10,98,44,039 41,00,19,231 58.58

Total 1,07,25,95,199 1,67,65,46,414 60,39,51,216 56.3

Current assets

The investments in the current Assets are very high. The current assets has been
increased by 44.04% in the year 2012-2013 from 2011-2012

In the year.2012-2013 TO 2013-2014 it has been majorly increased to 58.58%

where this says the company has made a huge investment on current asset
compared to the previous years.

NET FIXED ASSTES

The investments in the fixed assets are very high. The fixed assets has been
increased by 25.55 in the year 2011-2012 TO 2012-2013

In the year.2012-2013 TO 2013-2014 it has majorly increased to 40.63% where this

says the company has made a huge investment on fixed assets compared to the
previous years
 INVESTMENT

The investments has been decreased by 59.02 in the year 2011-2012 TO 2012-2013

In the year.2012-2013 TO 2013-2014 it has majorly increased to 213.13% where this

says the company has made a huge increase in investment compared to the previous
years.

Current liability

Current Liabilities includes current liability and provisions. Current liabilities are
increase to 72.41% in 2012-13 when compared to 2011-12. In the year 2013-14
current liabilities increased by 108% when compared to 2012-13.

INCOME STATEMENT

The income statement includes three major financial statements. The other two are
statements balance sheet and statement of cash flows. The income statement is
differentiated into two parts: the operating and non-operating sections.

The portion of the income statement that deals with operating items is interesting to
investors and analysts alike because this section discloses information about revenues
and expenses that are a direct result of the regular business processes. For example, if
business created athletic equipment, then the operative items section would speak
about the revenues and expenses involved with the production of sports equipment
TABLE: 4

Table showing Comparative income statement of 2011-12 to 2012-13

TABLE SHOWING COMPARITIVE INCOME STATEMENT IN
THE YEAR 2013-14
particulars 2012-2013 2013-2014 Increase/decrea Increase/decre
(Rupees) (Rupees) se ase
(Rupees) %
Sales account 5,12,09,55,505 6,26,71,72,709 1,14,62,17,204 22.38

Cost of sales
Opening stock 11,65,03,229 27,71,31,219 16,06,27,990 137.87
Add: purchase
A/c 4,51,85,12,694 5,16,23,72,104 64,38,59,410 14.24

Less; Closing 27,71,31,219 13,63,54,787 14,07,76,432 50.79

stock

Direct Expenses 51,23,80,766 49,67,24,075 1,56,56,691 3.05

Gross profit 25,06,90,035 46,73,00,098 21,66,10,063 86.40

Income
Statement
Add: Indirect 1,89,83,244 2,39,56,726 49,73,482 26.19
income

Less: Indirect
Expenses 20,00,66,910 40,28,24,984 20,27,58,074 101.34

Profit before Tax 6,96,06,368 8,84,31,840 1,88,25,472 27.04

Less: Income Tax 2,32,00,000 2,75,00,000 43,00,000 18.53

Net Profit 4,64,06,368 6,09,31,840 1,45,25,472 31.30

TABLE: 4.4
Interpretation

On the basis of Comparative income statement it can be said that gross profit for the
year 2011-12 has increased by 24.55% over the profit 2012-13. In the year 2012-13
the profit is decreased by 24.55%. The net sales during the same period have
increased by 35.02% in 2011-12. In the year 2012-1 the net sales has increased by
20.88% and direct expenses has increased by 29.17% in 2011-12 over the profit 2010-
11. In the year 2012-13 direct expenses increased 140.39%. Indirect incomes is
increased by 51.54% in 2011-12 in the year 2012-13 the indirect incomes decreased
by 47.74%. The profit before tax of both the year has been gradually decreasing from
the year 2010 to 2013. But the net profit of the year 2012-13 has been increased by
2.63%.

TREND ANALYSIS

Emphasize on change in financial and operational data from the year to year with the
help of trend analysis. It is possible to identify the areas in which the organization has
achieved improvement over the year.

Trend Percentage

Trend percentage is very much helpful in making a comparative study of the financial
statement for several years. The way calculating trend percentage involves the
relationship that each item bears to the same item in the base year. Each item the base
year is will be taken as 100 and a basis the percentage for each of the items of base
year is calculated.
Trend analysis amount in (lakhs) TABLE: 4.5

Particulars 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Net sales 2269 3133 4236 5120 6267
Gross profit 2943 3402 3322 2506 4673
Profit before 8219 8078 6600 6960 8843
tax
Net profit 5613 5516 4521 4640 6093
Current assets 2693 4936 4858 6998 11098
Current 9623 21858 16728 28841 59992
liabilities
Fixed assets 2501 2605 2772 3481 4896

1. Net Sales

Chart showing net annual sales

Years Net
Sales(Amount
in Lakh)
2009-2010 2269
2010-2011 3133
2011-2012 4236
2012-2013 5120
2013-2014 6267

TABLE: 4.6
 Figures showing Net Sales (TABLE: 4.6)

Net Sales(Rs in Lakhs)

7000
6000
Net Sales(Rs in Lakhs)

6267
5000
5120
4000
4236
3000
3133 Net Sales(Rs in Lack)
2000
2269
1000
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year

Interpretation

Net sales of MYMUL have been increased in 2013-14 Rs 6267 lakh this is the highest
sales in a company compared to the previous year Net sales in the year 2009-2010 is
Rs 2269 lakhs, 2010-11 is Rs 3133 lakh, 2011-12 is Rs 4236lakh and 2012-13 is Rs
5120 lakh

2. Gross profit
 Diagram shows gross profit

Years Gross profit

2009-2010 2943
2010-2011 3402
2011-2012 3322
2012-2013 2506
2013-2014 4673
TABLE: 4.7

Chart showing gross profit

Gross profit
5000
4500 4673
4000
3500 3402 3322
Gross profit

3000 2943
2500 2506
2000 Gross profit
1500
1000
500
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year

Interpretation

The gross profit of the MYMUL in 2009-10Rs 2943 lakh, 2010-11 Rs 3402 lakh,
2011-12 Rs 3322 is decreased.andIn 2012-13 the gross profit has been reduced at the
rate Rs 2506 lakhs and in the year 2013-14 is increased by Rs 4673 lakhs.
 3. Profit before tax

Table showing profit before tax

Profit before tax

Years
(Rs in Lakh)
2009-2010 8219
2010-2011 8078
2011-2012 6600
2012-2013 6960
2013-2014 8843

TABLE: 4.8

Images show profit before tax.

PBT(Rs in Lakhs)
10000
9000 8843
8000 8219 8078
7000 6960
6600
6000
5000
4000 PBT
3000
2000
1000
PBT

0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year
TABLE: 4.8

Interpretation

The profit before tax of the MYMUL in 2009-10 Rs 8219 lakh, 2010-11 Rs 8078
lakh, 2011- 12 Rs 6600 is decreased. In 2012-13 the profit before tax is increased to
Rs 6960 lakh and 2013-14 is increased to Rs 8843 lakh.

4. NET PROFIT

RATIO Table

showing net profit

Net profit (Rs in

Years
lakh)
2009-2010 5613
2010-2011 5516
2011-2012 4521
2012-2013 4640
2013-2014 6093

TAB

LE: 4.9 GRAPH SHOWS

NET PROFIT
 7000 6093
5613 5516
6000
4521 4640
5000
4000
3000
2000
1000
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Net profit (Rs in lack)

GRAPH: 4.9

Interpretation

The net profit in 2009-10 was Rsss 5613 lakhs. In 2010-11 the net profit is decreased
to Rs 5516 lakh. In 2011-12 the net profit is decreased to Rs 4521 lakh and again in
2012-13 the net profit has increased to Rs 4640 lakh. In 2013-14 the net profit has
increased to Rs 6093 lakh.
5. Current assets

Table showing current assets

Current assets (Rs in

Years
lakh)
2009-2010 2693
2010-2011 4936
2011-2012 4858
2012-2013 6998
2013-2014 11098

TABLE: 4.10

Graph showing current assets

Current assets (Rs in lack)

Current assets (Rs
in lack), 11098
12000
current assets(Rs in lakhs)

10000
8000
6000
4000
2000
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year

Interpretation
The current asset of the year 2009-10 is Rs 2693 lakh. In 2010-11 current asset is
increased to Rs 4936 Lakhs. In 2011-12 the current asset is decreased to Rs 4858
lakhs. And in 2012-13 the current Asset has increased to Rs 6998 Lakhs. And again
2013-14, Current asset has increased to Rs 11098 lakhs.

6. Current liabilities

Chart showing current liabilities

Current liabilities
Years
(Rs in lakh)
2009-2010 9623
2010-2011 21858
2011-2012 16728
2012-2013 28841
2013-2014 59992

TABLE: 4.11

Image shows current liabilities

 Current liabilities (Rs in lack)
59992
60000
50000
40000
30000 21858 28841
20000 9623 16728
10000
current liabilities(Rs in Lacks)

0 Current liabilities (Rs in lack)

year

GRAPH: 4.11

Interpretation

The current liabilities and Provisions of the company stood at RS 9623 lakhs in 2009-
10 and in the year 2010-11 increased to Rs 21858 lakh. In 2011 -12 the current
liabilities and the provisions are decreased to RS 16728 Lakh. In 2012-13 the current
liabilities increased to Rs 28841 lakhs. In 2013-14 the current liabilities and
provisions has highly increased to Rs 59992 lakhs.

7. Fixed assets

Table shows fixed assets

 Fixed assets (Rs in
Years
lakh)
2009-2010 2501
2010-2011 2605
2011-2012 2772
2012-2013 3481
2013-2014 4896

TABLE: 4.12

The Diagram showing fixed assets

Fixed assets (Rs in lack)

6000 Fixed assets (Rs in
Fixed assets

lack), 4896
4000
2000
0
Fixed assets (Rs in lack)

year

GRAPH: 4.12

Interpretation
 The fixed assets needs of the company have increased by Rs2772 lakh to Rs3481 lakh
in the year 2012-13 has compared to 2011-12.In the year 2009-10 and 2010-11 it has
increased by Rs2501lakh to Rs2605 lakh respectively. For the year 2012-13 and
2013-14 it has increased Rs3481 to Rs4896 lakhs. The total fixed assets are arrived
after subtracting depreciation from the gross block and net block will be calculated
current ratio

RATIO

Current Asset Ratio

Formula: Current Assets

Current liabilities

Table Showing Current Asset Ratio of Mymul from the year 2009-10
to 2013-14

Year Current Asset Current Liability Current ratio

2009-2010 26,93,01,339 9,62,35,854 2.79
2010-2011 49,36,04,624 21,85,82,463 2.25
2011-2012 48,58,21,288 16,72,80,898 2.90
2012-2013 69,98,24,808 28,84,19,747 2.42
2013-2014 1109844039 599923413 1.84

Analysis
We can observe from above table the current assets of MYMUL are going from 2009-
10 to 2013-14. This current ratio table is shows the highest current ratio in the year
2011-12 as compared to previous years. But in the year 2013-14 the current ratio is
being reduced compare to 2012-13.

Current ratio
3.5
3
2.5 2.79 2.9
current Ratio

2 2.42
2.25
1.5 1.84
Current ratio
1
0.5
0
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014
year

GRAPH: 4.13

Interpretation

It can be inferred from the above graph the solvency of the firm has been decreased
from the year 2009-10 to 2010-11 is 2.79 to 2.25. In 2011-12 the ratio has increased
to 2.90 again the ratio has decreased to 2.42. In 2013-14 the current ratio has been
reduced to 1.84.this shows the liquidity position of MYMUL is up to the mark.

Total Assets Turnover Ratio

Formula : sales

Total asset

Table No 4.14

Showing Total Assets Turnover Ratio of Mymul from the year

2009-10 to 2013-14

Year Sales Total assets Ratio

2009-2010 2,26,98,21,411 53,90,79,773 4.21

2010-2011 3,13,31,82,030 88,05,63,546 3.55
2011-2012 4,23,61,64,250 82,31,66,665 5.14
2012-2013 5,12,09,55,505 1,07,25,95,199 4.77
2013-2014 6,267,172,709 1,676,546,414 3.74

Analysis:

A higher ratio is an indicator of over trading of total assets while lower ratio reveals
idle capacity. In MYMUL the total assets turnover ratio fluctuates from year to year.
This shows there is an optimal capacity of total assets

Graph No 4. 14
 Showing Total Assets Turnover Ratio of Mymul from the year
2009-10 to 2013-14

Total Assets Turnover Ratio

Total assets Turnover Ratio

6
4.21 5.14
4.77
4 3.55
3.74
2

0
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
year

Interpretation

In Above graph it is clearly shows that the total asset turnover ratio has decreases
from 4.21 to 3.55 in the year 2010-11 again it increases to 5.14 in the year 2011-
12.again In the year 2012-13 the ratio has decreased to 4.77 while low turnover ratios
are indicative of underutilization of Available resources.

Fixed assets turnover ratio

Table showing fixed assets turnover ratio

Formula:Fixed Asset Turnover ratio Net Sales

Net fixed assets

Year Net Sales Fixed assets Ratio
2009-2010 2,26,98,21,411 25,01,59,222 9.07
2010-2011 3,13,31,82,030 26,05,87,644 12.02
2011-2012 4,23,61,64,250 27,72,97,008 15.27
2012-2013 5,12,09,55,505 34,81,63,007 14.70
2013-2014 6,26,71,72,709 48,96,48,885 12.79

TABLE: 4.15

Analysis

This table shows the fixed asset turnover ratio is being increased every year from 9.07
in 2009-2010 to 14.70 in 2012-13.But in the year 2013-14 it has been decreased to
12.79.

Chart showing fixed asset turnover ratio from 2009-10 to 2013-14

20
15.27
15 12.02 14.7
9.07 12.79
10
5
0
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014

Ratio

GRAPH: 4.15

Interpretation:
There is a continuous increase in the Ratio from 2009-10 to 2011-12.but the ratio has
been decrease to 14.7 in the year 2012-13 again it has been decreased to 12.79 in the
year 2013-14.

WORKING CAPITAL TURNOVER RATIO:

Year Net Sales Networking Ratio

capital
2009-2010 2,26,98,21,411 173065485 13.11
2010-2011 3,13,31,82,030 27,50,22,161 11.39
2011-2012 4,23,61,64,250 31,85,40,390 13.29
2012-2013 5,12,09,55,505 41,14,05,061 12.44
2013-2014 6,26,71,72,709 50,99,20,626 12.29
Formula

Working capital turnover Ratio = Sales

Net working capital

Net working capital = Current Assets – Current

Liabilities Analysis

The table shows the relationship between sales and working capital, by analyzing the
above ratio in the year 2009-10 that is 13.11 times and it decreases to 11.39. In 2010-
11 then it has increased to 13.29 in 2011-12. In the year 2012-13 it has been decreases
to 12.44.Again it has been decreased to 12.29 in the year 2013-14.
 Chart showing working capital turnover ratio from 2009-10 to 2013-14

WORKING CAPITAL TURNOVER RATIO

2013-2014, 2009-2010,
12.29 13.11

2012-2013, 2010-2011,
12.44 11.39

2011-2012,
13.29

GRAPH: 4.16

Interpretation:

MYMUL is having decreasing trend in working capital 2009-10 to 2010-11. In 2011-

12 it has increased to 13.29.Again it has been decreased to 12.44 in the year 2012-13.
This act as an indicator of effective utilization working capital. In 2012-14 there is a
slight decrease in working capital turnover ratio.
 TABLE SHOWING GROSS PROFIT OR LOSS RATIO OF

MYMUL TABLE: 4.17

Year Gross profit Net Sales Ratio

2009-2010 29,43,13,858 2,26,98,21,411 12.97
2010-2011 34,02,09,430 3,13,31,82,030 10.85
2011-2012 33,22,84,407 4,23,61,64,250 7.84
2012-2013 25,06,90,035 5,12,09,55,505 4.895
2013-2014 46,73,00,098 6,26,71,72,709 7.456

Gross profit ratio

Formula

Gross profit ratio = Gross Profit X 100

Sales

Analysis

From the above table we find that a trend in change of gross profit of the MYMUL
from the year 2009-10 to 2013-14.in the year 2009-10 is 12.97,for the year 2010-11 is
10.85,for the year 2011-12 it has been decreased to 7.84,in the year 2012-13 again
decreases to 4.89.again it has been increased to 7.45 in the year 2013-14.
Graph Showing Gross Profit or Loss Ratio From 2009-10 to 2013-14

Gross profit Ratio

15 12.97
Gross profit ratio

10.85
10 7.84
7.456
5 4.895

0
Ratio

year

GRAPH: 4.17

Interpretation

From the above graph is show out the gross profit for the MYMUL (2009-10 to 2012-
13) is gradually decreases from year to year. But In the year 2013-14 Gross profit has
highly increased to 7.456.

NET PROFIT RATIO

Formula

Net profit ratio = Net profit

Net Sales
Table Showing Net Profit or Loss Ratio of

Mymul: TABLE: 4.18

Year Net profit Net Sales Ratio

2009-2010 5,61,36,270 2,26,98,21,411 2.47
2010-2011 5,51,64,866 3,13,31,82,030 1.76
2011-2012 4,52,16,037 4,23,61,64,250 1.07
2012-2013 4,64,06,368 5,12,09,55,505 0.009
2013-2014 6,09,31,840 6,26,71,72,709 0.009

Analysis:

It can be observed from the above table the net profit of MYMUL for the year (2009-
10 to 2013-14) has gradually decreases from year to year. In the year 2009-10 it was
2.47 it decreases to 1.76 in 2010-11. From the year 2010-11 to 2013-14 the net profit
ratio has gradually decreased. The net profit of the year 2012-13 and 2013-14 is 0.

. Graph Showing Net Profit or Loss Ratio of Mymul from 2009-10 to

2013- 14
 Net profit Ratio
2.47
2.5
2 1.76
1.5
1 1.07
0.5
0
0.009
net profit ratio

2009-2010 0.009
2010-2011
2011-2012
2012-2013
2013-2014
year

Ratio

GRAPH: 4.18

Interpretation

From the above graph we can observe that the net profit of MYMUL has decreased
from the year 2010-11 to 2013-14 the net profit ratio has gradually decreased. From
the year 2010-11 to 2013-14. The net profit of the year 2012-13 and 2013-14 is 0.
 CHAPTER-5

FINDINGS AND SUGGESTIONS

FINDINGS

THE following are some of the findings undertaken in MYMUL:

 MYMUL has an effective control over the cost and profit.

 Personnel department will look after all the matter relating to salaries and
wages relating to the employees.
 Cost accounting system in MYMUL performs its function satisfactorily. It
provide information system department which in turn reports to the top
management. It produces reports without the loss of time and value.
 MYMUL is presently pursuing standard costing technique to analyses the
effectiveness of cost and cost control.
 MYMUL has been low profit and safety margins 2012-2013 compared
previous years.
 MYMUL has been producing currently double excess than its available capacity.
 MYMUL is also getting good profit with lower risk and better operating cost.
 MYMUL produce different types of Milk products. As it is a manufacturing
unit it maintains a separate cost accounting and finance department.
CONCULSION:

MILK is one of the important consumable and very essential products for the society
at a large. Mysore dairy is playing a very important role in providing milk and milk
products to the society. The service provided by the union is appreciated by variety of
people throughout the state.
As there is a huge competition in private vendors, MYMUL should reduce its cost. It
is reducing the cost of production from past three years by increasing the efficiency of
workers and replacing old machines. Due to this companies profit is increasing year
by year.

To conclude finance accounting system provides the service to aid the managers in
achievement of the goals and targets laid by the management and its effectiveness
evaluated from time to time. The overall performance of the finance accounting
department of MYMUL is satisfactory.

Members use the information generated under finance accounting system by

management at different layout, thus different set of information could be develop
under finance accounting and supplied to different persons responsible for activities
in the organization. It is used for the purpose of analysis and decision making.
SUGESSTIONS

The following are some of the recommendation to improve the

financial position of the MYMUL:

 MYMUL may expand its business due to it has more market share and
it has shortage of capacity.
 MYMUL get an optimal level of the management union should taken
necessary measures in order to see that all the resources like men,
machine, materials, method and money.
 If MYMUL is increase the share capital is good sing to organization as
it indicates that the organization is going to meet capital expenditure
and it is best sources of finance.
 Increase in sales volume is not profitable to the company so, it should
aim at reducing costs and expenses before thinking of increasing the
sales volume.
 It can adopt just-in-time approach which not only make stores
activities effective, but also eliminate unnecessary activities that
involved in the stores. This will help in control of cost.
 Attempts should be made to reduce production costs with the help of
research and development department.
 The company should increase their sales to acquire increased level of
market share in the domestic market. This may help in achieving goals
of the organization.
 BIBLOGRAPHY/REFERENCES

1. Zafar, (2012), “A Sstudy explored that ratios are calculated from financial statements” which are
prepared as desired policies adopted on depreciation and stock valuation by the management. Vol
no 19, Issue no 7,PP 93-101

2. Amit pandey,(2016), “a study on Analysis of Financial Statements at a Cement Manufacturer”

Journal of Knowledge Management, Economics and Information Technology, Volume 13, Issue no
4. PP 29-37

3. Dr.S.Kavitha This “A Study on Financial Analysis of Mahindra and Mahindra Company” Journal of
IOSR journals organization, Vol no 12, Issue no 8. PP 23-31

4. Amit Kumar,Gayatri Nagi,Vipual Mishra,Sharada Panadey(2012)This “A Study on Financial

performance Analysis of TATA Groups” Journal of business and management Vol no 3, Issue no 5.
PP 17-27

5. Pavithra,K.P.Thooyamani, Kermiki Dkhar,(2017), “A Study On The Analysis Of Financial

Performance with Reference to Jeppiaar Cements Pvt Ltd” International Journal of Pure and Applied
Mathematics, efficiently Vol no 116, issue no 14, pp189-194.

6. W. Kostolansky, B. Stanko, L. Landgraf (2010) , “A study on the A Financial (MIS) Statement Case
to Composite Manufacturing Company”, Journal of Business Case Studies, Vol.no. 6, issue no 5.

7. Calota Traian-Ovidiu(2013) “A Study on Analysis of Financial Statements at a Furniture

Manufacturer” Journal of Knowledge Management, Economics and Information Technology, vol no
3, issue no 9

8. R.Idhayajothi, Dr.O.T.V.Latasri, N.Manjula, A.Meharaj Banu, R. Malini (2014) “A Study on

Financial Performance of Ashok Leyland Limited at Chennai” Journal of Business and Management
(IOSR-JBM), Vol no 16, Issue no 6. PP 83-89

9. A.Ramya, S,Shobha(2017)“A Study on Financial Analysis of Maruthi Suzuki India Limited

Company” IOSR Journal of Business and Management, Vol no 19, Issue no 7, PP 93-101
 Books

 Financial Management- I.M Pandey

 Financial Analysis- Prasanna Chandra
 Company annual reports
 Financial management – khan M. Y. & Jain P.K, 6/e, TMH, 2011
 Fundamentals of Financial management – Brigham & Houston,
10/e, cengage Learning.

Websites

 www.investopidia.com
 www.kmf.com
 www.mymul.com
 Journal Of Business Case Studies
ANNEXURES: PROFIT AND LOSS ACCOUNT

Particulars 2010 2011 2012 2013 2014

Sales Account 2269821411 3133182030 4236164250 5120955505 6267172709
Cost of Sales
Opening Stock 16705638 18205829 51569643 116503229 277131219
Add purchase 1846730761 2627506632 3755673987 4518512694 5162372104
Account

Less closing Stock 18529417 17738184 116503229 277131219 136354787

1844906982 2627974277 3690740401 4357884704 5303148536

Direct expenses 130600571 164998324 213139442 512380766 496724075

1975507553 2792972601 3903879843 4870265470 5799872611

Gross profit 294313858 340209430 332284407 250690035 467300098
Income Statement

Add Indirect 30224699 23953549 36299513 18983244 23956726

incomes

324538557 364162979 368583920 269673279 491256824

Less Indirect 242348346 283382971 302575156 200066910 402824984
Expenses

Profit Before Tax 82190211 80780007 66008764 69606368 88431840

Less Income Tax 26059941 25615141 20792727 23200000 27500000

Net Profit 56130270 55164866 45216037 46406368 60931840

 BALANCE SHEET

Particulars 2010 2011 2012 2013 2014

Liabilities
Capital Account 285606827 385646834 457119133 550156983 738815315

Loans 70278651 152028450 96072688 149795197 230469477

Current Liability 96235854 218582463 167280898 288419747 599923413

Profit and Loss 86958441 114305798 102693946 84223271 107338209

Account

Total 539079773 870563546 823466665 1072595199 1676546414

Assets
Fixed Assets 250159222 260587644 277297008 348163007 489648885

Investments 19619212 126371278 60048369 24607384 77053491

Current Assets 269301339 493604624 485821288 699824808 1109844039

Total 539079773 870563546 823166685 1072595199 1676546414