Chapter 1.new

A study on financial performance of ACC ltd
CHAPTER I INTRODUCTION
1.1 Introduction
Finance is regarded as the life blood of a business enterprise. This is because in the modern money-oriented economy, without adequate finance, no enterprises can possible accomplishes its objectives, as finance is one of the basic foundations of all kinds of economic activity, it is the master key which provides access to all the sources, being employed in manufacturing and merchandising activities. Finance is stated as the process of raising, providing and administrating of all funds to be used in a business enterprises. It has rightly been said that business needs money to make more money. However, it is also true that money begets more money, only when it is properly managed. Hence, efficient management of every business enterprise is closely linked with efficient management of its finances.
1.2 Meaning and definition of finance

In general, finance may be defined as the provision of money at the time it is wanted. Different authors have interpreted the word finance differently. And to sum up their views, the following three main approaches to finance can be considered. The first approach confines to the raising of funds and to them study of financial institution and instruments can be procured. The second approach relates to cash The third approach views finance as being concerned with rising of funds and their effective utilization.
Some of the authoritative definitions are as follows:

Business finance is that business activity which is concerned with the acquisition and conservation of capital funds in meeting financial needs and overall objectives of a business enterprise. By Wheeler, Business-An Introductory Analysis.
A study on financial performance of ACC ltd Business finance can broadly be defined as the activity concerned with planning, raising, controlling and administering of the funds used in the business. By Guthman & Dougall, Corporate financial Policy. All the details relating to the business transactions can be obtained from the financial statements. A financial statement is an organised collection of data according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. It may show a position at a moment of time, or may reveal a series of activities over a given period of time.
1.3 Importance of finance

The importance of finance has arisen because of the fact that present day business activities are predominantly carried on by company or corporate from of organisation. The advent of corporate enterprise has resulted into: The increase in size and influence of a business enterprise, Wide distribution of corporate ownership and Separation of ownership and management.
The above three factors have further increase the important of finance. Thus every business whether small, medium or big cannot be started with out adequate amount of finance. Even an existing concern my required finance cannot be over emphasized and the subject of finance has become utmost in the present say business activity.
1.4 Ratio analysis

Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various rations for helping in making certain decisions. However, ratio analysis is not an end in itself. It is only a means of better understanding of financial strengths and weaknesses of a firm.
A study on financial performance of ACC ltd The following are the four steps involved in the ratio analysis: 1. 2. 3. Selection of relevant data from the financial statements depending upon the objective of the analysis. Calculation of appropriate ratios from the above data. Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statement or the ratios of some other firms or the comparison with ratios of the industry to which the firm belongs. 4. Interpretation of the ratios.
1.5 Interpretation of the study

The interpretation of ratio is an important factor, through calculation of ratios are also important but is only a clerical task where as interpretation needs skill, intelligence and foresightedness. The inherent limitations of ratio analysis should be kept in mind while interpreting them. The impact of factors such as price level changes, change in accounting policies, windows dressing etc.., should also kept in mind when attempting to interpret ratios. A single ratio in itself does not convey much of the sense. To make ratios useful, they have to be furthers interpreted. For example: say the current ratio of 3:1 does not convey any sense unless it is interpreted and conclusions drawn from it regarding the financial condition of the firm as to whether it is very strong, good, questionable or poor.
1.6 Use and significance of ratio analysis

The ratio analysis is one of the most powerful tools of analysis. It is used to device to financial health of enterprise. A. Managerial use of ratio analysis 1. Helps in decision making 2. Helps in financial forecasting and planning 3. Helps in communicating 4. Helps in co-ordination 5. Helps in control 6. other uses 3
A study on financial performance of ACC ltd B. Utility to shareholders/investors C. Utility to creditors D. Utility to employees E. Utility to government
1.7 Limitations of ratio analysis

1. Limited use of a single ratio. 2. Lack of adequate standards. 3. Inherent limitations of accounting. 4. Change of accounting procedure. 5. Window dressing. 6. Personal bias. 7. Uncomparable. 8. Absolute figures distortive. 9. Price level changes. 10. Ratios no substitutes.
1.8 Comparative statement

1.8.1 Comparative Balance Sheet The competitive balance sheet analysis is the study of the trend of same item or groups of items and computed item in two or more balance sheet of the same business enterprise on different dates. The changes can be observed by comparison of the balance sheet at the end of the period. 1.8.2 Comparative Income Statement The income statement gives the result of the operation of a business. The comparative income statement gives an idea of the progress of a business over a period of time, the changes in absolute data or money values and percentage can be determined to analyse the functioning of the business.
1.9 Common size statement

1.9.1 Common Size Balance Sheet A statement in which balance sheet items are expressed as the ratio of each asset to total assets and expressed as a ratio of total assets and the ratio of each liability is expressed as a ratio of total liability is called common size balance sheet. 1.9.2 Common Size Income Statement The issue in income statement can be shown as percentage of sale to show the relation of each period to sales. A significant relationship can be established between items of measure statement and volume of sales. The increase in sales will certainly increase pulling expense and not administrative or financial expenses. This relationship is helpful in evaluating operational activities of the enterprise.
1.10 Company profile

The Associated Cement Companies Limited was started during the year 1936 with merger of few companies. The ACC LTD is one of the largest cement producer among developing economies and the largest integrated companies in the world. Its annual production in the beginning was 10.205 million tons, which was gradually increased and expected to increase over the coming years. ACC is the largest cement producing company in India and is rated as third largest cement company in the world, with an annual turnover of 11.076 million tones, including traded cement during the financial year ended 31st March 2002. ACC head office is situated at Mumbai. The companys operations are spread throughout the country with 11 cement factories, two refractory plants, 11 regional marketing offices, and several area offices.
1.10.1 Madukkarai cement works

It was the first cement company to convert one of its well processed plants at Madukkarai to semi-dry process plant with this know-how in the world. This factory is situated on NH47 with its two captive Limestone Mines, one at Madukkarai and the other at walayar. Before coming into fold of ACC in the year 1936 this plant (Madukkarai works) was called as Coimbatore Cement Company LTD.
A study on financial performance of ACC ltd ACC has excelled and it remains as a pioneer in the cement industry in Tamil Nadu.
1.10.2 Company objective

ACC is respected in the industry for its professional style of management and best business practices. Its core values are based on integrity, emphasis on product quality and transparency in its dealings with all stakeholders. ACC believes that good governance generates goodwill among business partners, customers and investors, earns respect from society, brings about a consistent sustainable growth for the company and generates competitive returns for the investors. The company is committed to the principles of good governance. Towards this objective, it has endowed a chair for Business Ethics at the Management Centre of Human Values, Indian Institute of Management, Kolkata. To strive continuously and maintain the leadership of the cement industry, through selective acquisition, modernization expansion and establishment of a wide and efficient marketing network. To achieve a fair and reasonable return on capital employed, by promoting productivity throughout the company. To ensure a steady growth of business by strengthening the companies position in its core business of cement. To maintain the high quality of the companys products and services and ensure its supplying at fair prices. To promote and maintain, fair and harmonious industrial relation and environment for the effective involvement, welfare and development of staff at all levels.
1.10.3 History or background

The incorporation of The Associated Cement Companies Limited was done on August 1, 1936. The First Board Meeting of ACC was held at Esplanade House, Mumbai on November 10, 1936. ACCs first community development venture was near Bombay. In 1947 Indias first entirely indigenous cement plant was established at Chaibasa in Bihar. The Village Welfare Scheme was launched in 1952. In 1957 Technical training institute was established at Kymore, Madhya Pradesh. Blast furnace slag from TISCO was used at the Chaibasa Unit to manufacture Portland Slag Cement for the first time in India in 1961. In 1965 ACCs Central Research Station (CRS) was established at Thane. In the year 1968 Advent of computers was included in ACC for data processing and designing management information and control systems. In 1977 ACC received ASSOCHAM first national award for the year 1976 instituted for outstanding performance in promoting rural and agricultural development activities. Introduction of the energy efficient precalcinator technology for the first time in India. Full scale commercial production based on MFC technology at Wadi in 1979. In the year 1984 ACC achieved a breakthrough in import substitution by developing and supplying a special G type of oil well cement to ONGC. In the year 2004 ACC named as a Consumer Superbrand by the Superbrands Council of India, becoming the only cement company to get this status. GreenTech Safety Gold and Silver Awards awarded to Madukkarai Cement Works and Katni Refractory Works by Greentech Foundation for outstanding performance in Safety Management System. ACC received the CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar Certificate of Merit 2004 from Council for Fair Business Practices.
1.10.4 Administration
1.10.4.1 Board of Directors Chairman Mr.Tarun Das Managing Director Mr.N.L.Narula
A study on financial performance of ACC ltd Deputy Manager Mr.N.S.Sekhsari Nominee Director of Unit Trust of India Mr.N.A.Soonawala Mr.Amitabh Ghosh Whole time Director Mr.O.P.Dubey Mr.A.L.Kapur Mr.S.M.Palia Mr.Cyril.S.Shroff Mr.Naresh Chandra Mr.R.K.Vashishtha Mr.P.K.Sinor Company Secretary Mr.A.K.Jain 1.10.4.2 Bankers State Bank of India Bank of Baroda Bank of India Central Bank of India Canara Bank State Bank of Hyderabad State Bank of Bikaner & Jaipur Standard Chartered Bank Bank of America Citibank, N.A The Hong Kong and Shanghai Banking Corporation Limited
A study on financial performance of ACC ltd 1.10.4.3 Companys Auditors Messrs.A.F.Ferguson & Co Messrs.K.S.Aiyar &Co 1.10.4.4 Solicitors Messrs Gagrat & Co 1.10.4.5 Registered office Cement House 121, Maharshi Karve Road Mumbai 400 020 Website: www.acclimited.com
1.10.5 Ready mix concrete plants

ACC setup Indias first commercial ready mixed concrete plant in Mumbai in 1994. Today the company is the largest manufacture of RMX in India with 10 Mordent plants in Mumbai, Bangalore, Kolkata, Chennai and Delhi. Goa is the latest on the map for ACC RMX. ACC pioneering efforts in introducing RMX coupled with the promotion of bulk cement handling facilities have been responsible for redefining the pace and quality of construction activity in metropolitan cities and in mega infrastructure projects.
1.10.6 Research & development

ACC is the only cement producer in India with its own in-house research and development facility. This unit, recognized by the Department of Scientific & Industrial Research (DSIR) in the Ministry of Science and Technology, is engaged in research and development activities related to cement and concrete areas. The R & D programme addresses a spectrum of activities that cover technical services for quality and technology up-gradation and development of products and processes in the companys core business. Given the inherent variability in the mineral resources used in cement manufacture, considerable attention has been devoted to continuously optimizing process conditions including raw materials proportioning to ensure the highest quality.
A study on financial performance of ACC ltd ACC has a unique track record of innovative research and specialized technological services. Some special products born out of this own in-house research, include a range of unique products of immense value to the concrete and construction sectors such as High Performance Concretes, Acconex a non-explosive demolition agent and ACCMarg a novel technology for flexible pavements suitable for resurfacing and strengthening roads and highways.. ACCs concrete expertise has been sought in the restoration of several heritage buildings in India including the famed CST terminus (formerly called Victoria Terminus) at Mumbai, churches and royal palaces. ACC has also facilitated the restoration of numerous buildings and structures valuable to rural communities in our neighbourhood.
1.10.7 Environment protection

ACC is among the first companies in India to include commitment to environmental protection as one of its corporate objectives, long before pollution control norms and regulatory act came into existence. The company inducted the use of pollution control equipment and high efficiency sophisticated electrostatic precipitators for cement kilns, raw mills, coal mills, power plants and coolers as far back as 1966.
1.10.8 Sustainable development

Sustainable development is recognized by ACC as a process of development that "meets the needs of the present without compromising the ability of future generations to meet their own needs". ACC believe this constitutes balancing the Triple Bottom Line - defined as the achievement of three interdependent and mutually reinforcing goals of economic development, social development, and environmental protection. ACCs Vision declares the companys commitment to sustainable development. The Vision statement narrates these areas as: Delivering enduring value to investors and other stakeholders Welfare of community around us Developmental work in the areas of health, hygiene, education and infrastructure
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A study on financial performance of ACC ltd Being a socially responsible organization fulfilling its obligation to the community, society and nation Assisting the community members in developing opportunities for self employment Commitment to Environment Protection Adopting latest technologies to protect and upgrade the environment around our units Surpass international norms in controlling all types of pollution Conservation and protection of all natural resources that we utilise. Commitment towards nation building
1.10.9 Corporate social responsibility

ACC defines Corporate Social Responsibility as the way a company balances its economic, social and environmental objectives while addressing stakeholder expectations and enhancing shareholder value. But ACC has undertaken social volunteering practices almost from its inception, long before the term corporate social responsibility was coined. The companys earliest initiatives in community development date back to the 1940's in a village on the outskirts of Mumbai while the first formal Village Welfare Scheme was launched in 1952. The community living around many of our factories comprises the weakest sections of rural and tribal India with no access to basic amenities. ACCs Corporate Social Responsibility Policy The Company shall continue to have among its objectives the promotion and growth of the national economy through increased productivity, effective utilization of material and manpower resources and continued application of modern scientific and managerial techniques, in keeping with the national aspiration; and the Company shall continue to be mindful of its social and moral responsibilities to consumers, employees, shareholders, society and the local community.
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1.10.10 Community & rural welfare

ACCs community development activities revolve around the under-privileged community that lives in the immediate vicinity of our cement plants and is thus more dependent on us. The range of activities begins with extending educational and medical facilities and goes on to cover vocational guidance and supporting employment-oriented and income-generation projects like agriculture, animal husbandry, cottage industries by developing local skills, using local raw materials and helping create marketing outlets. At all cement factories ACC shares their amenities and facilities with members of the local community. This includes sharing education and medical facilities, sports and recreation. Wherever possible they share access to Bore Wells, drinking water and the usage of colony roads.
1.10.11 Education
Education is imparted not only to children of ACC employees but also more importantly to children from rural areas who do not have access to any medium of information or education. ACC schools maintain high standards and are open to other children of the vicinity. Often these schools are the most preferred centers of learning in the district and adjoining areas. Wherever possible, ACC provides funds and infrastructure to help set up local schools, colleges and centers for learning and education.
1.10.12 Healthcare
ACC takes pride in providing various forms of medical assistance to the families of our employees and also to all those living in surrounding villages. Each factory has a medical centre with full-fledged doctors and the latest of basic equipment. Mobile medical services are provided in the vicinity and regular medical camps are held to eradicate diseases, offer medical help, treatment and preventive care. ACC has come out to provide support to state and national health initiatives such as the eradication of malaria, dengue fever and the dreaded HIV.
1.10.13 Central procurement

ACC has a countrywide spread of 14 modern cement plants and a string of 13 Ready mix concrete plants. This large network of manufacturing units consumes a 12
A study on financial performance of ACC ltd wide spectrum of inputs about 60,000 different items ranging from Coal, Gypsum, Slag, Packaging material (bags), Refractories, Steel, Grinding Media, Electrodes, Cables, Bearings, Conveyor Belts, Spares of various mechanical, electrical and instrumentation equipment, Mining Equipment and their spares and explosives. ACC has a vendor base of more than 6000 suppliers spread across the country.A team of 144 professionals at Corporate, Region and Plant Level manages the procurement function at ACC. The function is organized so as to derive maximum value for the company through economies of scale from central pooling and procurement of some inputs at the corporate level while meeting individual operational requirements at plant level.
1.10.14 Occupational health & safety

Occupational Health & Safety (OHS) is a vital part of ACCs journey towards Sustainable development. Safety Audits are being carried out in ACC since 1995 by National Safety Council based on the 5 Star Auditing System of British Safety Council. There is a continuous effort to measure and improve Safety Management Systems to avoid accidents. The following are some OH & S initiatives at ACC: OH & S brochures, signages, posters and mailers used extensively Monthly Safety Gate Meetings held at all our plants. Safety Audit and TPM Audits carried out annually Safety Professionals meets twice a year to discuss and share knowledge on Safety Statistics and implementation of safety measures at each unit. Safety Observation Tours (SOT) conducted weekly by all line managers Behavioural Safety Training programmes for workers at all plants Incident investigations for all incidents including near misses (with potential for injuries). The findings and recommendation are company shared across the
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1.10.15 Five cardinal rules for safety

Do not override or interfere with any safety provision nor allow anyone else to override or interfere with them. Personal Protection Equipment (PPE) rules, applicable to a given task, must be adhered to at all times. Isolation and Lock Out procedures must always be followed. No person may work if under the influence of alcohol or drugs. All the injuries and incidents must be reported.
1.10.16 Products - consultancy services

Project Engineering ACC is the pioneer of the Indian cement industry with over 66 years of rich experience in prospecting for raw materials, setting up and managing cement plants of different sizes, technologies and processes. This experience is shared by the team of talented Scientists, Engineers and Technocrats in meeting the needs of the cement industry in India and in many other countries. ACC has a successful track record in modernizing old technology based cement plants to improve their operational economy and also in the design & engineering of new technology based cement plants. Our project engineering consultancy and project management expertise has been tested against the best in the world. Services under one roof Raw material evaluations and optimization Feasibility Studies Engineering Consultancy Services for green field / brown field cement plants Upgradation & capacity enhancement of existing cement plants Management and operation of cement plants Technical training & skills development 1.10.17 Products - customer services
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A study on financial performance of ACC ltd ACCs Regional Offices have Customer Services Cells are manned by qualified Civil Engineers. These engineers interact with consumers and customers to assess their requirements and complaints and provide pre-sales, after-sales services and techno-promotion services including educating them on usage of cement and concrete and correct construction practices. They also provide expert advice on getting the best value from cement and offer assistance on related issues in civil construction projects. Some specific customer-focused initiatives year include the following: ACC Help Centers at several locations to help home builders Mobile touring vans to visit construction sites to educate users and masons at site and provide certain specialized services like supervision during slab casting on demand. Ask ACC a Website for home-builders and small customers Customer friendly booklets on all aspects of construction and home-building Films and educational literature designed for masons and students Besides this, technical books/booklets on cement, concrete and building construction and maintenance are regularly made available for the benefit of our customers.
1.10.18 Milestones
1936 - Incorporation of the Associated Cement Companies Limited on August 1, 1936. 1936 - First Board Meeting of the Associated Cement Companies Limited held at Esplanade House, Mumbai on November 10, 1936. 1937 - With the transfer of the 10th company to ACC, viz. Dewarkhand Cement Company, the formation of ACC is complete on October 23, 1937. 1944 - ACCs first community development venture near Bombay 1947 - Indias first entirely indigenous cement plant established at Chaibasa in Bihar 1952 - Village Welfare Scheme launched 1955 - Sindri cement works used the waste product calcium carbonate sludge fertilizer factory at Sindri. from
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A study on financial performance of ACC ltd 1956 - Bulk Cement Depot established at Okhla, Delhi 1957 - Technical training institute established at Kymore, Madhya Pradesh. 1957 - Katni Refractories 1961 - Blast furnace slag from TISCO used at the Chaibasa Unit to manufacture Portland Slag Cement for the first time in India. 1961 - Manufacture of Accocid Cement, which resists the corrosive action of acids and chemicals. 1961 - Oilwell Cement manufactured at ACC Shahabad Cement Works in Karnataka for cementation of oilwells upto a depth of 6,000 feet. 1961 - Manufacture of Hydrophobic (waterproof) cement at ACC Khalari Cement Works in Bihar. 1962 - Manufacture of Accoproof, a waterproofing additive. 1965 - ACCs Central Research Station (CRS) established at Thane 1965 - Manufacture of Portland Pozzolana Cement. 1965 - Manufacture of Calundum, a High Alumina Binder; Firecrete, Low Density Alumina Castables and High Alumina Refractory Cement. 1968 - Advent of computers in ACC for data processing and designing management information and control systems. 1968 - ACC supplied and commissioned one-million-tonne iron ore pelletising plant ordered by TISCO 1971 - Manufacture of Whytheat Castables A, K, C and Cal-Al-75 1973 - Take-over of the Cement Marketing Company of India (CMI) 1977 - ACC receives ASSOCHAM first national award for the year 1976 instituted for outstanding performance in promoting rural and agricultural development activities. 1978 - Introduction of the energy efficient precalcinator technology for the first time in India. Full scale commercial production based on MFC technology at Wadi in 1979. 1979 - ACC wins international contract for operation and management of a new one million tonne cement plant at Yanbu-Ras Biridi in Saudi Arabia. 1982 - Commissioning of the first 1 MTPA plant in the country at Wadi, Karnataka. 1984 - ACC achieves a breakthrough in import substitution by developing and Supplying a special G type of oil well cement to ONGC. 16
A study on financial performance of ACC ltd 1987 - ACC develops a new binder for use at sub-zero temperatures, which is Successfully used in the Indian expedition to Antarctica. 1992 - Incorporation of Bulk Cement Corporation of India, a joint venture with the Government of India. 1993 - ACC starts the commercial manufacture of Ready Mixed Concrete at Mumbai. 1998 - Commissioning of the 0.6 MTPA cement grinding unit at Tikaria, Uttar Pradesh. 1999 - Commissioning of captive power plants at the Jamul and Kymore plants in Madhya Pradesh. 1999 - Tata group sells 7.2% of its stake in ACC to Ambuja Cement Holdings Ltd, a subsidiary of Gujarat Ambuja Cements Ltd. (GACL) 2000 - Tata Group sells their remaining stake in ACC to the GACL group, who with 14.45% now emerge as the single largest shareholder of ACC. 2001 - Commissioning of the new plant of 2.6 MTPA capacity at Wadi, Karnataka plant, the largest in the country, and among the largest sized kilns in the world. 2002 - ACC wins PHDCCI Good Corporate Citizen Award 2003 - IDCOL Cement Ltd becomes a subsidiary of ACC 2004 - IDCOL Cement Limited is renamed as Bargarh Cement Limited (BCL). 2004 - ACC raises US $ 100 million abroad through Foreign Currency Convertible Bonds (FCCBs) for US$ 60 million and Global Depository Shares (GDSs) for US $ 40 million. Both offerings are listed on the London Stock Exchange. 2004 - ACC named as a Consumer Superbrand by the Superbrands Council of India, becoming the only cement company to get this status. 2004 - GreenTech Safety Gold and Silver Awards awarded to Madukkarai Cement Works and Katni Refractory Works by Greentech Foundation for outstanding performance in Safety Management System. 2005 - ACC receives the CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar Certificate of Merit 2004 from Council for Fair Business Practices. 2005 - Holcim group of Switzerland enters strategic alliance with Ambuja Group by acquiring a majority stake in Ambuja Cements India Ltd. (ACIL) which at the time held 13.8 % of the total equity shares in ACC. Holcim simultaneously makes an open offer to ACC shareholders, through Holdcem Cement Pvt. Limited and ACIL, to acquire a majority shareholding in ACC. Pursuant to the
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A study on financial performance of ACC ltd open offer, ACILs shareholding in ACC increases to 34.69 % of the Equity share capital of ACC. 2005 - Commissioning of Modernisation and Expansion project at Chaibasa in Jharkhand, replacing old wet process technology with a new 1.2 MTPA clinkering unit, together with a captive power plant of 15 MW. 2005 - Financial accounting year of the company changed to calendar year JanuaryDecember 2006 - Subsidiary companies Damodhar Cement & Slag Limited, Bargarh Cement Limited and Tarmac (India) Limited merged with ACC 2006 - ACC announces new Workplace policy for HIV/AIDS 2006 - Change of name to ACC Limited with effect from September 1, 2006 from The Associated Cement Companies Limited. 2006 - ACC receives Good Corporate Citizen Award 2005-06 from Bombay Chamber of Commerce and Industry 2006 - New corporate brand identity and logo adopted from October 15, 2006 2006 - ACC establishes Anti Retroviral Treatment Centre for HIV/AIDS patients at Wadi in Karnataka the first ever such project by a private sector company in India. 2007 - ACC partners with Christian Medical College for treatment of HIV/AIDS in Tamil Nadu 2007 - Sumant Moolgaokar Technical Institute completes 50 years and reopens with new curriculum 2007 - ACC commissions Wind energy farm in Tamilnadu.
1.10.19 Awards & accolades

National Award for outstanding performance in promoting rural and agricultural development by ASSOCHAM Sword of Honour - by British Safety Council, United Kingdom for excellence in safety performance. Indira Priyadarshini Vrikshamitra Award --- by The Ministry of Environment and Forests for "extraordinary work" carried out in the area of afforestation. FICCI Award --- for innovative measures for control of pollution, waste management & conservation of mineral resources in mines and plant.
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A study on financial performance of ACC ltd Subh Karan Sarawagi Environment Award - by The Federation of Indian Mineral Industries for environment protection measures. Drona Trophy - By Indian Bureau of Mines for extra ordinary efforts in protection of Environment and mineral conservation in the large mechanized mines sector. Indo German Greentech Environment Excellence Award Golden Peacock Environment Management Special Award - for outstanding efforts in Environment Management in the large manufacturing sector. Indira Gandhi Memorial National Award - for excellent performance in prevention of pollution and ecological development Excellence in Management of Health, Safety and Environment : Certificate of Merit by Indian Chemical Manufacturers Association Vishwakarma Rashtriya Puraskar trophy for outstanding performance in safety and mine working Good Corporate Citizen Award - by PHD Chamber of Commerce and Industry Jamnalal Bajaj Uchit Vyavahar Puraskar - Certificate of Merit by Council for Fair Business Practices Greentech Safety Gold and Silver Awards - for outstanding performance in Safety management systems by Greentech Foundation FIMI National Award - for valuable contribution in Mining activities from the Federation of Indian Mineral Industry under the Ministry of Coal. Rajya Sthariya Paryavaran Puraskar - for outstanding work in Environmental Protection and Environment Performance by the Madhya Pradesh Pollution. Control Board. National Award for Fly Ash Utilisation - by Ministry of Power, Ministry of Environment & Forests and Dept of Science & Technology, Govt of India for manufacture of Portland Pozzolana Cement. Good Corporate Citizen Award - by Bombay Chamber of Commerce and Industry for working towards an environmentally sustainable industry while pursuing the objective of creation of a better society. National Award for Excellence in Water Management - by the Confederation of Indian Industry (CII)
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CHAPTER II RESEARCH METHODOLOGY

2.1 Introduction
Finance is the life blood of the business and profit is the engine that drives the business. Therefore I have selected my project in finance field and analysing the financial performance of the particular period (i.e.) 5 years.
The entrepreneurial capability and investment decisions, of course, determine the destiny of large business to a great extent but there are a good member of external as well as uncontrollable factors that expert a great degree of influence upon their functioning these days.
2.2 Objective of the study

To analyse and to evaluate the financial performance of ACC Ltd. To determine the liquidity position of the company. To study the impact of financial performance on profitability of the company. To comment from the finding and to suggest some improvement measure to overcome the present status of the company.
2.3 Methodology of the study

This project work is totally based on the audited annual report of the ACC limited. Apart from the annual reports other informations been collected from the records and book of ACC limited. Thus the entire study is carried out with the help of secondary data collected. Hence a descriptive research is undertaken by the researcher. 20
Period of the study The study of financial performance in ACC limited is confined to a period of five years audited reports, which commerces from the year 2005 2009. Area of the study The study has been carried out at ACC limited in madukkarai. Tools and techniques The entire study undertaken used the ratio analysis, comparative balance sheet and common-size balance sheet to analyse the data. Ratio analysis is further supported by graphical representation. This gives a pictorial presentation of the companys entire performance. Tools used includes, 1. Ratio analysis 2. Comparative balance sheet 3. Common-size balance sheet
2.4 Scope of the study

This study will help the ACC Ltd to compare the percentage changes in the expenditure and income over the five years period for making appropriate decisions regarding increasing/ decreasing expenditure. They could also compare the calculate ratios with the ideal ratios and decide on the changes to be made. It also represents a clear picture to bank to decide on making changes such as lowering the rate of interest etc.
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2.5 Limitation
The period of study is limited to five years with which the firms financial performance cannot be fully analysed. The entire study is based on the secondary data like audited annual report, records and other books of ACC limited, hence may not be applicable to another firm. The study mainly involved the quantitative data whose analysis is done without considering the time value of money. The ACC ltd has many other factors affecting performance, which are not taken into consideration for analysis.
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CHAPTER III REVIEW OF LITERATURE

It is mandatory to review the literature available with respect to the area of the search study. Measuring the performance of the corporate sector has always been an area of controversies from the point of view of the government, shareholders, prospective investors, creditors, employees and any other stake holder. Several studies have been undertaken to analyse profitability in the corporate sector. This chapter presents some of the excerpts of various studies conducted by financial analyst in the past. Charles Merwin (1942)1 has found out that the ratios are successful predictors of failure, five years prior to discontinuance. The ratios namely net working capital to total assets current ratio and networth to total debt were found to be extremely sensitive and the most significant predictors among them. Bain (1956)2 in Barriers to New Competition examined whether profitability is determined by elements of Industry structure which affects into the industry. He studied this with respect to 3 types of barriers in 20 U.S manufacturing industries for the period 1936 1940 and 1947 1951. He analysed industries according to qualitative classification HIGH, SUBSTANTIAL and MODERATE TO LOW. Barriers to entry were found to be the main determinant of returns. High barriers to entry lead to high profit rates, though the differences between SUBSTANTIAL and MODERATE TO LOW was not so clear. Seller concentration was not a good predictor of profitability. Bain identified product diversification and advertising as the main causes of high barriers. ODonnell and Goldberg (1964)3 have identified that the survival or demise of an enterprise is determined by the adequacy of cash and other assets along with their efficient handling. They also have revealed that business failure takes place due to the lack of working capital. Kamerschen (1968)4, obtained data for 200 largest non financing corporations, primarily in manufacturing, moving, merchandising, transportation, electric gas and pipe line utilities for the year 1963 to determine whether the extent of
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A study on financial performance of ACC ltd management control exerted an important influence on the rates of return in these firms. In addition, the variables that were important in explaining inter firm profit rates had demonstrated that empirically profits were not affected by the control type. Smaller forms were more likely to grow faster only up to a certain critical size level. After that critical level he larger firms were having less difficulty enjoying higher profit rates. Beyond that level, the relationship between profit rates and size was found to be positive. The other determinants of rates of return were total assets, barriers to entry, sales revenue and the industry growth rate. Samuels and Smith (1968)5 in their study on profits, variability of profits and firm size have studied the relationship between profitability (profit after tax on net assets) and size of the firm (net assets) and have found that they were inversely related to each other for the years 1954-63. Subramaniyam and Papola (1971)6 in Profitability and Growth of Firms: The Case of Indian Chemical Industries, expressed that there are a number of determinants of profitability in India. He studied the relationship between profitability and growth of firms in the Indian chemical industry during the period 1962 1969 with data of 27 companies quoted in the stock exchange. They found that most of the firms want to grow in an expanding market with differing intensities and that those who have ability aided by profit continued to grow faster. Hurdle (1974)7 in Leverage, Risk, Market Structure and Profitability, developed a theoretical model relating to leverage, market structure, risk and profitability and tested the model using cross sectional data on 220 U.S. manufacturing firms and 85 industries covering the 1960s .He used the three simultaneous equations to test the hypothesis of his study. He found that while firms with market - power firms. The higher profit firms earned this because of market structure and not through capital structure. Smith (1974)8 has made a study to identify the dual goals of working capital management namely profitability and liquidity. He has suggested that the role of financial managers lies in achieving a trade off between the two. He has used rate of return on equity investment as a measure of profitability and net working capital and current ratio as measures of liquidity for his study. Based on a set of simulation 24
A study on financial performance of ACC ltd equations his study has indicated the future financial statement of firm. H has used the model in which current assets and current liability are directly related to the sales of the firm. Barthwal (1976)9 in his study on The Determinants of Profitability in Indian Textile Industry has identified the factors which cause variation in the profitability. The explanatory variables used by him are past profitability, size of the firm, age of the firm, past growth, capital-output ratio and changes in average cost of production. Among them, past profitability and changes in the average cost of production over the previous years had been found to be significant determinants of profitability for the firms in the industry in different regions of the country. The other factors like capitaloutput ratio, size and age of the firm and past growth had explained less than 25% of the variation in the profitability and were considered as insignificant. Ramamoorthy (1978)10 has found profitability and solvency as the twin goals of working capital management. According to him, a firms survival and growth depend on its ability to achieve these goals. If liquid assets can pay off current liabilities, financial strength can be created and the firm can sustain its reputation. Agarwal (1978)11 in his study entitled Size, Profitability and Growth of Some Manufacturing Industries highlighted relationship between profitability measured as profit/net worth and profit/net assets and size expressed as total sales of 7 Indian manufacturing industries viz cotton, spinning and weaving, cotton ginning, jute textiles, paper and pulp, sugar and aluminium for the period 1962-1972. The relationship between size and profitability was observed in cotton spinning industry, jute textile industry, sugar and brewing industry and aluminium industry, while in case of cement and cotton spinning and ginning industry no such relationship was observed. Neumann, Bobel and Haid (1979)12 in their study entitled Profitability, Risk and Market Structure in West German Industries explained mean rates of return of the period from 1965 to 1973 of 334 West German joint stock companies by risk and market structure. The results suggested that investors were risk averters and that risk bearing was accordingly compensated by a higher rate of return. Degree of concentration and product differentiation were positively related to profitability, while 25
A study on financial performance of ACC ltd export and import ratio exerted an adverse impact on profitability. As regards size and profitability, smaller firms tended to be more flexible, tended to take chances of growth more easily that the bigger ones. So there was an inverse relationship between growth and profitability. Singh (1981)13 has found out that the size of the units has a significant role in the capital structure of the cement industry. His study has revealed that the returns and profitability can be increased by increasing the size from small to big. Asha Jain (1981)14 in Price Cost Margin in Indian Manufacturing Industries: An Econometric Analysis analysed the price cost margin over time in the 2 digit Indian Industries Price - Cost margin was used as a measure of profitability. Cost factors emerged as significant determinants of profitability while the structural variables like concentration ratio, capacity utilization, growth and capital intensity showed mixed patterns. Results varied among industries. Harley and Watt (1981)15 in their Article entitled Profits Regulation and The U.K. Aerospace Industry, tried to explain the influence of industry and government procurement policy on profitability in the U.K. aerospace industry, which is a government regulated industry. The aerospace industry consisted of air firms, engine electronics and equipment, development and production of military and civil aircraft, helicopters and missiles. Under private ownership government affected profitability directly through the profit rule for pricing, state contracts and individually through the profit rule for pricing, state contracts and individually through the positive influence on market demand. As monopolists UK government used procurement policy to determine projects and hence technical progress as well as the size and structure of the industry, entry and exist, together with prices and profits, technical efficiency and total export performance. Average profit rates in aerospace were lower than in the rest of British industry-variation in profitability also existed between specialist and diversified companies. Bothwell Cooley and Hall (1982)16 in their research A New View of Market Structure Performance Debate used a sample of 156 large U.S manufacturing firms over a period 1960 67 for determining the relationship between profit rate and other 26
A study on financial performance of ACC ltd variables like seller concentration, advertising intensity, economics of scale, absolute capital requirements, leverage, profit variability, firm growth, firm size and market share etc. Positive correlation between seller concentration, market stock, and growth of demand, business risk, advertisement expenses and profit rate was found profit rates were negatively related with the extent of economics and capital requirements. Dr.D.Banerjee (1982)17 in his study on the corporate liquidity and profitability in India related to the period 1970-71 to 1977-78 has analysed the trend of liquidity position and its relationship with the profitability in the medium and large public limited companies in the corporate sector in India. The study concludes that in India there are some industries/ industry groups where a risk in liquidity will lead to rise in profitability and vice-versa, there are others where increase in liquidity will be associated with a decline in profitability. Gangadhar (1982)18 in Cement Industry Some Aspects of Profitability examined and made comment on the profitability of large public limited cement companies in India in order to bring out fluctuations if any, and to offer possible causes for such fluctuations. Secondly to study the profitability of cement industry vis a vis the profitability of chemical and engineering industries with a view to pointing out lower/higher rate of profitability in the former and to analyse the reasons for such rate. Thirdly to discuss the cost structure of cement industry that aim to notify the major/minor expenditure component as well as the impact of cost on profitability. The study revealed the following that the profitability in cement industry has fluctuated very widely with low rate during the period under review. The profit margin in the cement industry has shown declining trend whereas the asset turnover showed an increasing trend. The profit margin accounted to a great extent for lower rate of ROI in the industry as compared to asset turnover. Sharma and Reddy (1985)19 have identified the factor influencing liquidity, by conducting a study on the liquidity position of Nigam Sagar Fertilizers Ltd., during the period 1974-75 to 1981-82. They have concluded that government policy with respect to input and output has significantly affected the liquidity.
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A study on financial performance of ACC ltd Kumar (1985)20 in his study on Corporate growth and profitability in the large Indian companies has examined the relationship between profitability and growth in 83 large companies in Indias corporate sector during 1969-79. The study reveals a significant inter-industry difference in the growth process of firms under study. The very low value of R in all the cases shows that only a small fraction of the growth of firms in Indian Corporate sector has been explained by profitability. Agarwal (1987)21 in Corporate Investment and Finance Behaviour in Automobile industry notices the behaviour and determinants of profit in particular to examine the impact of price control on the profitability of firms in the Automobile sector. The study was based on the data for the period 1959 1960 to 1978 1979. He found that profits in the car sector depended on sales, capacity utilization, product prices and factor prices. Market share and the lagged investment appeared to be significant at the firm level but not at the sector level. However, both market share and lagged investment were significant for the non-car sector. He also concluded that price control had adversely affected profit in the car sector. Chandrasekaran (1989)22 has made a study on the performance of cement companies measuring the profitability efficiency and growth. He has also identified that the cash flow and external funds are the key determining factors of investment in cement industry. Sinha (1993)23 conducted a study to investigate debt equity ratio in the private sector in India. His study showed that there was a negative correlation between debt-equity ratio and profitability only in the case of public limited companies, the margin on sales had a negative correlation with debt equity ratio. Chandrasekaran (1993)24 in Determinants of Profitability in Cement Industry has studied the determinants of profitability in cement industry. The objective of this study was to examine determinants of profitability in cement industry. The study aims at drawing inference on impact of policy measures which led to change in price and distribution policies relevant for cement industry. Determinants of profitability are analysed using the technique of ordinary least squares. Based on existing theories and relevant econometric empirical works, variables are selected to find out whether the profitability function has shifted after the introduction of partial de-control, dummy 28
A study on financial performance of ACC ltd variable is introduced for estimating the function and the chow test is also done to ascertain the inference. The study concluded that efficiency in inventory management and efficient management of current assets was important to improve profitability. Cleveland and Frederick (1993)25 in their study Profitability, Uncertainty and Firm Size examines the connections between variations in profit and loss rates among firms in small firm and large firm size classes as reflections of uncertainty. They found that within industries such variations are particularly great for firms in small firm size classes, leading to operating policies for small firms best characterized as entrepreneurial large firms in contrast faced with less uncertainty in earning profit appear to adopt policies that manifest an emphasis on strategic planning. Dhanalakshmi (1994)26 A study on the Productive Profitability of Cement Industry in India in her study focused to analyse the financial structure of cement industry in India and also to see the productivity of cement industry during the study period and to find out profitability of cement industry. It was found that current ratio of cement industry was confirming to the standard ratio 1:1. The cement companies were found to be financially sound. It was found that net sale to interest ratio was declining during the period of study. Hence the capital productivity was high in the cement industry. Profit distributed was low and profit returned was more than 70% of net profit. Sukamal Datta (1995)27 in his study on working capital of paper industry in West Bengal, has analysed the size and causes of changes in working capital. He has also found out that the concerns which run with high profits had adequate working capital and those concerns with low profit found then working capital position to be inadequate. Viajayakumar (1996)28 in his study on Determinants of Profitability has examined the determinants of profitability in sugar industry of Tamil Nadu for the period 1982-1994. He has identified that growth rate of sales, vertical integration, leverage, current ratio and operating expenses to sales are the important variables which determine the profitability of firms in the industry. He has revealed that
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A study on financial performance of ACC ltd efficiency in inventory management and current assets are important to improve profitability. The study developed by Prater, Marvin Eugene (1997)29 formulated predictive models of long term profitability for grain dependent short line rail road in Mid Western States. The purpose of these models is to aid state policymakers in allocating financial assistance among potential short line rail roads. Key factors influencing profitability are identified by empirical estimation and a quantitative profile is developed of a grain dependent short line rail road that is likely to be profitable in the long term. Key factors influencing profitability of short line rail roads are lagged density, lagged real other expenses per mile, gross miles of main line truck, lagged percentage of the total traffic which is grain. This analysis indicates that the profitability of short line rail roads in the sample is not very high. The study also indicates that the profitability of short line rail roads in the sample is not very high. This study also indicates that about 25 percent of the sample short lines have high profitability of requiring governmental financial assistance in order to continue operating. Das (1998)30 in the paper entitled Determinants of Return on Equity of Indian Public Sector Banks: Some Empirical Results based on Cross sectional Data attempted to estimate the influences of various factors, indigenous to banks, on ROE of the Indian public sector banks for which, the return on equity has emerged as a significant performance indicator in the post-reform era. The paper uses posted data for this purpose, and divides the 26 public sector banks into two groups, viz., larger banks and smaller banks on the basis of their assets. The empirical results through interesting findings of the dichotomy in the financials of the larger and smaller banks underline the need for differential policy measures for the two sets of banks, instead of the usual strait jacket approach. Vijayakumar (1998)31 has in his Determinants of corporate size, growth and profitability identified that growth is significantly associated with profitability, returns on networth has been used as a measure of profitability, annual average growth rate has been taken for measuring the growth. The period covered by the study is 1980-81 to 1995-96. The statistical technique like average, correlation and linear 30
A study on financial performance of ACC ltd and multiple regression analysis have been used. His study has revealed that profitability has explained a considerable part of the growth of the firms in the Indian public sector industry. Hyun-Han Shin and Luc Soenen (1998)32 in their study on Efficiency of working capital management and corporate profitability, 985 firm years covering the period of 1975-1994 on a compustal sample have identified that there is a strong negative relationship between the length of the firms Net trade cycle (NTC) and its profitability. In addition shorter Net-Trade Cycles are associated with higher risk adjusted stock returns. They also have found that the NTC is measuring liquidity differently from the more conventional current ratio which is positively related to profitability. Govinda Rao and Mohana Rao (1999)33 in impact of working capital on profitability in cement industry- A correlation analysis analyse the impact of profitability on working capital in cement industrial unit in India. Ten variables on working capital ratios have a close interaction with profitability measures viz., current ratio, debt-equity ratio, cash position ratio, working capital turnover ratio, inventory turnover ratio and average collection period are selected for analysis. The interrelationship are to be studied with the help of Karl Pearsons co-efficient of correlation technique by arranging the correlation of one variable with each other variable in the form of matrices which are a triangular and symmetric about the principal diagonal. On overall basis out of 10 variables with PBDIT 3 variables showed significant co-efficient and 7 exhibited negative relationships. Out of the 10, 5 showed negative association while the others showed positive relationships. Rameezabanu (1999)34 in her study focused to study the market position of ACC cement and to analyse of the ACC cement and to analyse the financial performance of ACC. The study revealed that there was a fluctuation in the sales during the period of the study. It was stated that the solvency position of the company which has been seen with the help of the current ratio and test ratio and the debt-equity ratio. The current ratio is said to be an ideal if it is 2. The current ratio of the company did not reach the required ideal ratio in the study period which means
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A study on financial performance of ACC ltd that the company had inadequate short term funds. The increase in the current assets indicates the availability of adequate short term funds. Sahu (2000)35 in his study Analysis of Corporate Profitability A Multivariate Approach has made an empirical study based on the secondary data from a sample of 100 non-financial non government public limited companies in eastern India for a period of 10 years from 1984-85 to 1993-94. He has chosen profitability ratios and interest coverage ratio for the analysis. Cross sectional Spearmans rank correlation of the companies have been calculated and applied for selecting the ratio for analysis. He has arrived at a single index to measure the composite profitability of a firm and ranked the companies based on the overall score. Prasad (2001)36 conducted a research study on the working capital management in paper industry. His sample consisted of 21 paper mills from large, medium and small scale for a period of 10 years. He reported that the chief executives properly recognized the role of efficient use of working capital in liquidity and profitability, but in practice they could not achieve it. The study also revealed that fifty percent of the executives followed budgetary method in planning working capital and working capital management was inefficient due to sub-optimum utilisation of working capital. Ganesan (2001)37 has selected State Bank Group (8 units) and 19 nationalised banks as sample to identify the determinants of profits and profitability. The empirical examination of profit function shows that interest cost, interest income, other income, deposits per branch, credit to total assts, proportion of priority sector advances and interest income loss are the significant determinants of profits and profitability of Indian public sector bank. The study has also identified the fact that banking sector reforms and individual banks policies towards directed investments and direct credit programmes have played a significant role in improving the profits and profitability of banking sector. Vijaykumar (2002)38 in Determinants of profitability A Firm level study of the sugar industry of Tamil Nadu defined into the various determinants of profitability viz, growth rate of sales, vertical integration and leverage. Apart from 32
A study on financial performance of ACC ltd these three variables he has selected current ratio, operating expenses to sales ratio and inventory turnover ratio. Econometric models were used to test the various hypotheses relating profitability with other variables. The researcher noted in his conclusion that efficiency in inventory management and current assets are important to improve profitability. Padmaja Manoharan (2002)39 through her study on Profitability of Cement industry in India has revealed that the profitability of firms depend on age, size and region. She has identified that quality of earnings depends on cost management, asset management and leverage management. Further she has also proved that the liquidity influences the profitability and quality of earnings.
REFERENCES
1. Merwin, C.L., Financing Small Corporation in Five Manufacturing Industries 1926 1936, New York: National Bureau of Economic Research, 1942. 2. Bain, J.S., Barriers to New Competition, Cambridge Mass: Harvard University Press (1956). 3. ODonnell and Goldberg ., op.cit ., P. 55, 1964. 4. Kamerschen, D.R. The Influence of Ownership and Control on Profit Rates, American Economic Review, Vol.58, Pp.432 447. 5. Samuels, J. and Smith, D., Profits, Variability of Profits and Firm Size, Economica, Vol. 35, Pp.127-139, 1968. 6. Subramaniyam, K.K and Papola, T.S., Profitability and Growth of Firms : The Case of Indian Chemical Industries, Anvesak. 1971. 7. Hurdle, G.J., Leverage, Risk. Market Structure and Profitability, Review of Economics and Statistics, P.56 8. Smith, K.V., An Overview of Working Capital Management, Management of Working Capital: A Reader, New York: West Publishing Company, Pp. 3-20, 1974. 9. Barthwal, R.R., The Determinants of Profitability in Indian Textile Industry, Economica, Vol.43, Pp. 267-274, 1976. 10. Ramamoorthy, V.E., Working Capital Management, Institute of Financial Management Research, Madras, 1978.
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A study on financial performance of ACC ltd 11. Agarwal, V.K., Size, Profitability and Growth of Some Manufacturing Industries, unpublished thesis, IIM Ahemadabad, 1978. 12. Neumann, Bobel and Haid, Profitability, Risk and Market Structure in West German Industries, The Journal of Industrial Economics, Vol.27, Pp. 227 242. 13. Singh, K.P., Capital Structure and Returns, the Management Accountant, Pp.375-376, August, 1981. 14. Asha Jain, Price Cost Margin in Indian Manufacturing Industries: An Econometric Analysis Ph.D thesis, IIT, Kanpur. 1981. 15. Hartley Keith and Pater.A.Watt., Profits Regulation and The U.K. Aerospace Industry, Journal of Industrial of Industrial Economics , Vol.29, Pp.413 - 449. 16. Bothwell, J.L et al., A New View of Market Structure Performance Debate, the Journal of Industrial Economics and Statistics, Vol.64, Pp. 635 645. 1982. 17. Banerjee, B., Corporate Liquidity and Profitability in India, Research Bulletin, Institute of Cost and Works Accountants of India, July 1982, Pp. 225-234. 18. Gangadhar, V., Cement Industry Some Aspects of Profitability, The Management Accountant, P. 477. Oct, 1982, 19. Sharma, S.N. and Reddy,A.V., Corporate Liqudity A Case Study. The Management Accountant, Pp. 415-419, August, 1985. 20. Kumar, P., Corporate Growth and Profitability in the Large Indian Companies, Margin, Vol.17, No.4, July, 1985. 21. Agarwal, R.N., Corporate Investment and Finance Behaviour in Automobile Industry, Common Wealth Publishing, Delhi, 1987. 22. Chandrasekaran, N., Market Structure and Financial Performance. Unpublished doctoral dissertation, University of Madras, 1989. 23. Sinha Sidharth., Inter Industry Variations in Capital Structure, Economic and Political Weekly, August 1993. 24. Chandrasekaran, N., Determinants of Profitability in Cement Industry, Decision, Vol.20, No.4, Pp 235-244, Oct-Dec., 1993. 25. Cleveland and Frederick, W., Profitability, Uncertainty and Firm Size, Small Business Economics, Vol.5, Pp.87-100, Oct, 1982. 26. Dhanalakshmi.R., A Study on the Productivity Profitability of Cement Industry in India. 1994.
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A study on financial performance of ACC ltd 27. Dr.Sukamal Datta., Working Capital Management through Financial Statements: Analysis of Paper Industry in west Bengal, The Management Accountant, Pp. 826 832 & 849, Nov.1995. 28. Vijayakumar, A., Determinants of Profitability. Finance India, Vol. 32, No.4, Dec. Pp.925-932, 1996. 29. Prater, Marvin Eugene., Long Term Profitability for Grain Dependent Short Line Railroads in the MidWest, DAI A 58/06, P.23, Dec 1997. 30. Das, M.R., Determinants of Return on Equity of Indian Public Sector Banks: Some Empirical Results Based on Cross-sectional Data, Vinimaya, Vol.19, Pp.5-12, April-June, 1998. 31. Dr.A.Vijayakumar., Determinants of Corporate Size, Growth and Profitability The Indian Experience, The Management Accountant, Vol.33, No.5, Pp.327-329, May 1998. 32. Hyun-Han Shin and Luc Soenen., Efficiency of Working Capital Management and Coroporate Profitability, Financial Practice and Education, fall, winter 1998, Pp.68-79, 1998. 33. Govindan Rao, D. and Mohana Rao, P., Imapct of Working Capital on Profitability in Cement Industry A Correlation Analysis, New Delhi: Deep and Deep Publishers, 1999. 34. Rameezabanu A Study on the Financial Performance of ACC Ltd., with special reference to ACC Ltd Madukkarai, 1999. 35. Dr.R.K.Sahu, Analysis of Corporate Profitability A Multivariate Approach, The Management Accountant, Pp.571-577, August, 2000. 36. Prasad, R.5., Working Capital Management in Paper Industry, Finance India, Vol.15, No.1, Pp.185 188. March 2001 37. P.Ganesan, Ph.D., Determinants of Profits and Profitability of Public Sector Banks in India: A Profit Function Approach, Journal of Financial Management and Analysis, 14(1): Jan-Jun, 2001, Pp.27-37, 2001. 38. Vijayakumar.A., Determinants of Profitability A Firm Level Study of the Sugar Industry of Tamil Nadu. Research Studies in Commerce and Management, Delhi: Classical Publishing Company, Pp. 66-74, 2002. 39. Padmaja Manoharan., An Analytical Study on Profitability of Cement Industry in India, 2002.
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CHAPTER IV ASPECTS OF FINANCIAL PERFORMANCES

The researcher has now chosen scrupulously for this studies the following aspects of the financial performance of ACC Ltd.., 1. Short-term financial position 2. Long-term financial position 3. Profitability 4. Trend analysis 5. Comparative statement 6. Common size statement
4.1 Analysis of short-term financial position

A business house can meet is short-term obligation only when it has adequate liquid assets: its reputation will be injured if it fails to meet such obligations due to lack of good liquidity position. Even a high degree of liquidity is not fair for a firm because such a situation may excessive funds being locked up in its current assets. The following two heads of ratios may indicate the short-term financial position of a business. 1. Liquidity Ratios and 2. Activity Ratios Liquidity Ratios Liquidity refers to the ability if a concern to meet its current obligation as and when they became due. The sufficiency of current assets should be assessed by comparing them with short-term current liabilities. To measure the liquidity of a firm the following ratios can be calculated.
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These include the following elements: 1. Current ratio 2. Liquid ratio 3. Absolute liquid ratio 1. Current Ratio Current ratio may be defined as the relationship between current assets and current liabilities. The acceptable norms or rules or thump is 2:1 this ratio is also knows as working capital ratio and it is calculated by dividing the total of the current assets by total of the current liabilities. Current assets Current ratio = --------------------------Current liabilities The general standard for this ratio is 2 but it very from firm to firm depending on the business. The ratio measures only the quantity of the current assets and their quality. 2. Liquid Ratio Quick ratio is knows as acid test ratio, it is a more rigorous test of that the current ratio. Quick ratio may also be defined as relation between quick liquidity assets and current liquid liabilities. The quick liquidity can be calculated by dividing the total of the quick assets by the current liquid liabilities the acceptable norms of rules of thump is 1:1. Quick or liquid assets Quick ratio = ---------------------------------Current liabilities The general standard for this ratio is but it may also vary from business to business depending on the nature, type, size etc of the firm. 37
3. Absolute Liquid Ratio The absoluate liquidity ratio can be calculated using the formula. Absolute liquid assets include cash in hand, cash at bank, short-term investment and marketable securities or temporary investments. The acceptable norm or rules of thumb is 0.5:1. Absolute liquid assets Absolute liquid ratio = ---------------------------------Current liabilities Activity ratios Activity ratio measures the efficiency or effectiveness with which the company manager its resources or assets. These ratios are also called as turnover ratio because they indicate the speed with which the assets are converted or turned over into sales. It is important to calculate the following turnover ratio of efficiency ratio to command upon the liquidity or efficiency with the company is using the liquid resources. The following are the prominent under this heads. 1. Inventory turnover 2. Debtors turnover 3. Creditors turnover 4. working capital turnover 1. Inventory Turnover This ratio indicates whether the investment has been efficiently used or not. It shows the speed with which the stock is converted into sales. Its purpose is to find out whether only the required minimum funds have been locked up in the inventory The inventory/stock turnover ratio indicates the number of times stock has been turned over during the period and evaluates the efficiency with which the 38
A study on financial performance of ACC ltd company is able to manage its inventor. Inventory/ stock turnover ratio is also known as stock velocity is normally calculated. Net sales Inventory/stock turnover ratio = -----------------Inventory There is no general standard for this ratio as the norms may be different for different firms depending on the nature of industry and business conditions. 2. Debtors Turnover Debtors turnover ratio indicates the velocity of debt collection of the company. If indicates the numbers of times debtors are turnover during the year. Total sales Debtors turnover ratio = -----------------Debtors There is no general standard for this ratio. A high ratio represents efficient management of debtors by the firm. 3. Creditors turnover This indicates the velocity with which the creditors are turned over in relation to purchases. The following is the formula for computing it. Total purchases Creditor turnover ratio = -------------------------Creditor A high ratio denotes fast settlement of dues to the creditors by thr firm, and also ratio, the firms enjoyments of a longer credit repayment period. 4. Working capital turnover This ratio expresses the efficiency with which the working capital is being used by a firm. It is derived by the following formula. 39
Net sales Working capital turnover = ---------------------Working capital There is no general standard for this ratio. A high stands for efficient utilization of the working capital but too high a ratio is not favourable too.
Analysis of long-term financial position

Solvency refers to the ability of a business to meet its long-term obligations. The firm should be able to pay regularly the interest on long-term borrowing repay the principle amount at the maturity ant thus, ensure their creditors security of their loans to the firm. The following are the significant ratios measuring the long-term financial position of a business. 1. Debt-equity ratios 2. Proprietary ratios 3. fixed assets to net worth ratios 4. 1. Ratio of current assets of proprietors funds.
Debt-equity Ratios This is also known as the external internal equity ratio. It measures the relative claims of outsiders and the owners against the assets the assets of the business. It is found out as under. Long-term debt Debt-equity ratio = ----------------------------Shareholders funds The general standard is 2/3 or 0.67 for this ratio. From the shareholders view-point, a high ratio indicates that the firm has been able to use the low-cost outsiders funds to magnet their earnings.
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A study on financial performance of ACC ltd 2. Proprietary Ratios This ratio is also known in the following shares. It is derived as below Shareholders funds Proprietary ratio = --------------------------------Total tangible assets This ratio indicates the extent to which the assets of the firm can be cost with out affecting the interest of the creditors. A high ratio represents a lower risk on the past of the creditors. A high ratio represents a lower risk on the past of the creditors and vice-versa.
3.
Fixed Assets to Net Worth Ratio This ratio establishes the relationship between the fixed assets and the share holders funds and it is computed as follows. Net fixed assets Fixed assets net worth ratio = -------------------------Shareholders funds It indicates the extent to which the shareholders funs are fund into the
fixed assets with, of the firm; the general idea is that the fixed assets should be financed more by the shareholders funds. 4. Ratio of Current Assets to Proprietors Funds This ratio indicates the extent to which the proprietors funds are invested in the current assets. It is calculates as under.
Current assets Current assets to Proprietors funds = -------------------------Shareholders funds
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Analysis of profitability
Profit making is the main objective of any business. Every business needs profits not only its existences but also for expansion diversification. It can discharge its social responsibilities only with its profits. The following are the main ratios that the profitability of a business. 1. Gross profit ratio 2. Net profit ratio and 3. Expenses ratio 1. Gross profit Ratio Gross profit ratio measures the relationship of gross ratio to net sales and is usually represented as a percentage. Thus it is calculated by dividing the gross profit by sales. Gross profit Gross profit ratio = -------------------- x 100 Net sales Though there is no general standard for ratio get the gross profit should be adequate to cover the direct and indirect expenses. 2. Net Profit Ratio Net profit ratio indicates the efficiency of the management in manufacturing, administrative selling and other activities of the company. This ratio is the over measures of the companies profitability and is calculated by, Net Profit Net profit ratio = --------------------- x 100 Net sales
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3.
Expenses Ratio The operating ratio reveals the average tool variations in expenses but some expenses may keep on increasing while some others, decreasing. So expenses ratios are calculated by dividing each items of expenses (or) group of expenses with the net sales to analysis the cause of variations of the operating ratio. Manufacturing expenses Ratio Manufacturing Expenses Particular Expenses = -------------------------------------- x 100 Net sales
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CHAPTER V DATA ANALYSIS AND INTERPRETATION

Have determined the parameters of the financial analysis had been analysed to measure the financial performance of the company. RATIO ANALYSIS This section analyses the following aspects of the company. 1. Short-term financial position 2. Long-term financial position 3. Profitability
5.1 ANALYSIS OF SHORT-TREM FINANCIAL POSITION

Short-term financial position of ACC Ltd.., can be analysed through Current Ratio, Liquid ratio, Inventory Turnover Ratio Etc.,
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1. Current Ratio It is the ratio of current assets to liability for the company for the year (2005 2009) TABLE 5.1 TABLE SHOWING CURRENT RATIO OF THE COMPANY FOR THE YEAR (2005 2009) Year 2005 2006 2007 2008 2009 Current assets 890.87 1040.12 1213.71 1921.24 2203.04 Current liabilities 715.63 851.17 974.80 1527.01 2058.50 Ratio 1.24 1.22 1.25 1.26 1.07
Interpretation During the year 2005, the current ratio was 1.24 which was then decreased to 1.22 and then it slightly increased to 1.25 in the year 2007 and then increased in the year 2008 was 1.26 and finally the current ratio was 1.07 and the current assets has constantly raised in the 5 years, the current liabilities has also shown a constant increase corresponding to the current assets. The company has maintained the favourable ratio through the year.
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CHART 4.1 CURRENT RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Current Ratio
1.3 1.25 1.2
ratio
1.15 1.1 1.05 1 0.95 2005 2006 2007 years 2008 2009
Ratio
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2. Quick Ratio Quick Ratio of the chosen company for the period of study.
TABLE 5.2 TABLE SHOWING LIQUID RATIO OF COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Liquid assets 545.48 662.11 671.33 1297.11 1472.18
Current liabilities 715.63 851.17 974.80 1527.01 2058.50
Ratio 0.762 0.777 0.688 0.849 0.715
Interpretation Quick ratio of ACC during 2005, was 0.762 and during 2006. The quick ratio was 0.777 and it was decreased to 0.688. During the year 2007 and again it increased slightly in the next year to 0.849 and then it decreased slightly to 0.715.
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CHART 5.2 QUICK RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Quick Ratio
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2005 2006 2007 years 2008 2009
ratio
48
Absolute liquid Ratio The absolute ratio of the chosen company for the period of study.
TABLE 5.3 TABLE SHOWING ABSOLUATE LIQUID RATIO OF THE COMPANY FOR THE YEARS (2005 2009) Absolute Liquid Assets 34.82 64.97 57.32 620.17 743.48 Current Liabilities 715.63 851.17 974.80 1527.01 2058.50
Year 2005 2006 2007 2008 2009
Ratio 0.048 0.076 0.058 0.406 0.361
Interpretation Absolute liquid ratio include receivables, debtors and bills receivable. The acceptable norm was 0.5:1. The absolute liquid ratio for the year 2005 was 0.048 and gradually increased to 0.076 and finally the ratio has been reduced in the year 2009 as 0.361.
49
CHART 5.3 ABSOLUTE LIQUID RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Absolute liquid Ratio

0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2005 2006 2007 years 2008 2009
ratio
50
Activity ratios The companys efficiency or activeness is measured through the following ratios. 1. Inventory turnover 2. Debtors turnover 3. Creditors turnover 4. Working capital turnover Inventory turnover It is an activity ratio which measure company activeness or efficiency. It is the ratio of involve to net sales.
TABLE 5.4 TABLE SHOWING INVENTORY / STOCK TURNOVER RATIO FOR THE YEARS (2005 2009) Year 2005 2006 2007 2008 2009 Interpretation From the above table it can be inferred that the company had a gradual increase inventory turnover ratio from the year 2005. In 2006, it increased to 10.289 and then a decrease to 8.369 in 2007 and in 2009 the ratio remained at 10.327. Net sales 3489.89 3889.65 4539.35 6453.07 7548.32 Inventory 345.39 378.01 542.38 624.13 730.86 Ratio 10.104 10.289 8.369 10.339 10.327
51
CHART 5.4 INVENTORY TURNOVER RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Inventory turnover Ratio

12 10
ratio
8 6 4 2 0 2005 2006 2007 years 2008 2009
52
Net working capital ratio Net working capital ratio of the chosen company for the period of study.
TABLE 5.5 TABLE SHOWING NET WORKING CAPITAL RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Net working capital 175.24 188.95 238.91 394.23 810.81
Net asset 2810.64 3071.63 3402.21 4379.62 4953.26
Ratio 0.06 0.06 0.07 0.09 0.16
Interpretation Net working capital generally is not a ratio. The company shows constant during first two years then it increased and finally it has been increased during the year 2009.
53
CHART 5.5 NET WORKING CAPITAL RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Net working capital Ratio

0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 2005 2006 2007 years 2008 2009
ratio
54
Debtor turnover ratio It is activity ratio which shows how many times accounts receivable turnover firm the year.
TABLE 5.6 TABLE SHOWING DEBTORS TURNOVER RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Debtors 182.09 182.37 190.54 213.96 289.29
Total sales 3489.89 3284.48 3902.06 5803.48 7007.17
Ratio 5.21 5.55 4.88 3.68 4.12
Interpretation The company has a gradual increase of debtors turnover ratio from the year. Shows a high in 2005 and 2006, then slight decrease in ratio in recoded in the year 2007 at 4.88. The table shows unsatisfactory position due to the decreasing trend in the ratio.
55
CHART 5.6 DEBTOR TURNOVER RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Debtor turnover Ratio

6 5
ratio
4 3 2 1 0 2005 2006 2007 years 2008 2009
56
Capital turnover ratio It is ratio which compares the sales turnover with the capital turnover of the firm in analysis for the firm in analysis for the period of study.
TABLE 5.7 TABLE SHOWING CAPITAL TURNOVER RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Net sales 3489.89 3889.65 4539.35 6453.07 7548.32
Capital Employed 3010.92 3036.38 3606.89 4378.68 4953.26
Ratio 1.159 1.281 1.258 1.473 1.523
Interpretation Capital turnover ratio has shown a increasing trend in the 5 years compared. The ratio reveals that the firm has good turnover and shows the high profit 1.523 in the year 2009.
57
CHART 5.7 CAPITAL TURNOVER RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Capital turnover Ratio

1.6 1.4 1.2
ratio
0.8 0.6 0.4 0.2 0 2005 2006 2007 years 2008 2009
58
5.2 Analysis of long-term financial position

The long-term financial position of the company under examination is analyzed through the following ratios. 1. Debt-equity ratio 2. Proprietary ratio 3. Fixed assets to net worth ratio 4. ratio of current assets to proprietary fund Debt-equity ratio Debt-equity ratio of ACC Ltd for the period of study.
TABLE 5.8 TABLE SHOWING DEBT-EQUITY OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009 Interpretation
Shareholder funds 1024.2 1318.4 1577 3141.98 4152.71
Total assets 2810.64 3071.68 3402.21 4379.62 4953.26
Ratio 0.364 0.429 0.463 0.717 0.838
During the year 2005, the ratio was 0.364 and the ratio has been gradually increased to the year. The debt equity ratio reveals the good signal to the company.
59
CHART 5.8 DEBT-EQUITY RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Debt-Equity Ratio
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2005 2006 2007 years 2008 2009
ratio
60
Proprietary ratio Table 5.9 throws light on the proprietary ratio of the firm in analysis for period of study. It is a ratio of shareholder find to Total assets.
TABLE 5.9 TABLE SHOWING PROPRIETARY RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Shareholders funds 1024.2 1318.4 1577 3141.98 4152.71
Total assets 3346.35 3512.19 4085.46 5402.15 6166.95
Ratio 0.306 0.375 0.386 0.581 0.673
Interpretation The above ratio shows that the firm faces high proprietary ratio in the year 2009 i.e. 0.673. The ratio was 0.306 in the year 2005 and there after increased gradually over the years which indicate that the proportion of total assets of the company showed a decrease in relation to shareholders funds.
61
CHART 5.9 PROPRIETARY RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Proprietary Ratio
0.8 0.7 0.6
ratio
0.5 0.4 0.3 0.2 0.1 0 2005 2006 2007 years 2008 2009
62
Fixed assets ratio Explains the fixed assets ratio of ACC Ltd for the period of study
TABLE 5.10 TABLE SHOWING FIXED ASSETS RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Shareholders fund 1024.2 1318.4 1577 3141.98 4152.71
Fixed assets 2455.48 2472.07 2871.75 3480.91 3963.91
Ratio 0.417 0.533 0.549 0.902 1.047
Interpretation The above ratio shows that the firm had a low fixed ratio in the year 2005 i.e. 0.417 and the fixed ratio continuously started to increase finally in the year 2009 the fixed ratio is 1.047. It indicates that the proportion of fixed assets increased in comparison with decrease in shareholders funds.
63
CHART 5.10 FIXED ASSETS RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Fixed Assets Ratio

1.2 1
ratio
0.8 0.6 0.4 0.2 0 2005 2006 2007 years 2008 2009
64
Fixed assets to net worth ratio Explains the fixed to net worth ratio of ACC Ltd for the period of study.
TABLE 5.11 TABLE SHOWING FIXED ASSETS TO NET WORTH RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Fixed asset 2455.48 2472.07 2871.75 3480.91 3963.91
Shareholder funds 1024.2 1318.4 1577 3141.98 4152.71
Ratio 2.397 1.875 1.821 1.107 0.955
Interpretation During the year 2005, the ratio was 2.397 and the ratio has been slightly decreased to 1.875 in the 2006 and finally the fixed asset to net worth ratio was suddenly decreased to 0.955 in the year 2009. This ratio is to shareholders fund to purchase the fixed assets. Sufficient fund to purchase the assets.
65
CHART 5.11 FIXED ASSETS TO NET WORTH RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Fixed Assets to net worth Ratio

3 2.5
ratio
1.5 1 0.5 0 2005 2006 2007 years 2008 2009
66
Fixed asset turnover ratio Fixed Assets turnover ratio of the ACC Ltd for the period of study.
TABLE 5.12 TABLE SHOWING FIXED ASSET TURNOVER RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Sales 3489.89 3889.65 4539.35 6453.07 7548.32
Fixed Assets 2455.48 2472.07 2871.75 3480.91 3963.91
Ratio 1.42 1.52 1.58 1.85 1.90
Interpretation During 2005 the fixed asset turnover over ratio was 1.42 which was increased to 1.57 in the year 2006 and finally increased to 1.904 in the year 2009. This verifying trend was due to the variance in fixed assets of the company.
67
CHART 5.12 FIXED ASSETS TURNOVER RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Fixed Assets turnover Ratio

2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2005 2006 2007 years 2008 2009
ratio
68
Return on assets Return on assets of the ACC Ltd for the period of the study. TABLE 5.13 TABLE SHOWING RETURN ON ASSETS RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Net profit 118.18 264.16 444.62 1458.59 1717.18
Total Asset 2810.64 3071.63 3402.21 4379.62 4953.26
Ratio 4.20 8.59 13.07 33.30 34.66
Interpretation The return on assets during the year 2005 was 4.20% which has increased to 34.66 % in the year 2009. This indicates the overall profitability of the firm had shown the increasing trend.
69
CHART 5.13 RETURN ON ASSETS OF THE COMPANY FOR THE YEARS (2005 2009)
Return on Assets Ratio

40 35 30
ratio
25 20 15 10 5 0 2005 2006 2007 years 2008 2009
70
Return on investment Return on investment of the company for the period of study. TABLE 5.14 TABLE SHOWING RETURN ON INVESTMENT OF THE COMPANY FOR THE YEARS (2005 2009) Year 2005 2006 2007 2008 2009 Net Profit 118.18 264.16 444.62 1458.59 1717.18 Shareholders 1024.2 1318.4 1577 3141.98 4152.71 Ratio 11.54 20.04 28.19 46.42 41.35
Interpretation The return on investment of ACC Ltd constant increase except in the year 2005. It shows the huge increase in return on investment in all the 3 years due to increase in capital employed.
71
CHART 5.14 RETURN ON INVESTMENT OF THE COMPANY FOR THE YEARS (2005 2009)
Return on Investment Ratio

50 45 40 35 30 25 20 15 10 5 0 2005 2006 2007 years 2008 2009
ratio
72
Fixed assets to current assets ratio Table 5.14 depends the ratio of fixed to current assets of the organization under examination for the period of study.
TABLE 5.15 TABLE SHOWING FIXED ASSET TO CURRENT ASSET RATIO OF COMPANY FOR THE YEARS (2005 2009) Year 2005 2006 2007 2008 2009 Fixed Asset 2455.48 2472.07 2871.75 3480.91 3963.91 Current Asset 890.87 1040.12 1213.71 1921.24 2203.04 Ratio 2.756 2.376 2.366 1.81 1.79
Interpretation During 2005 the fixed asset to current asset ratio was 2.756 which were then decreased to 1.79 in the year 2009. There was slightly decreased in the year 2009. A decline in this ratio indicates that the debtors and stocks are increased too much and the fixed assets are more intensively used.
73
CHART 5.15 FIXED TO CURRENT ASSETS RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Fixed to Current Assets Ratio

3 2.5
ratio
1.5 1 0.5 0 2005 2006 2007 years 2008 2009
74
Interest coverage ratio Interest coverage ratio of the company for the period of study.
TABLE 5.16 TABLE SHOWING INTEREST COVERAGE RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
EBIT 403.6 533.9 720 175.611 204.612
Interest 103.91 92.91 88.19 52.03 23.94
Ratio 3.88 5.746 8.16 3.37 8.54
Interpretation During the year 2005, the interest coverage ratio was 3.88 which were then slightly increased to 5.746 and then it decreased to 3.3 in the year 2008 and finally the ratio was increased to 8.5. This interest coverage ratio has shown an increasing trend in all the five year compared. Increasing trend shows the changes of signal of the firm using excessive debt.
75
CHART 5.16 INTEREST COVERAGE RATIO OF THE COMPANY FOR THE YEARS (2005 2009) Interest Coverage Ratio
9 8 7 6 5 4 3 2 1 0 2005 2006 2007 years 2008 2009
ratio
76
Return on capital employed Return on capital employed of the company for the period of study. TABLE 5.17 TABLE SHOWING RETURN ON CAPITAL EMPLOYED RATIO OF THE COMPANY FOR THE (2005 2009) Year 2005 2006 2007 2008 2009 Net profit 3354.75 3168.85 3558.56 1458.59 1717.18 Capital employed 3010.92 3036.38 3606.89 4378.68 4953.26 Ratio 111.41 104.36 98.66 33.349 34.667
Interpretation During the year 2005, the return on capital employed ratio was 111.41 and then finally it was decreased to 34.66 in the year 2009. return on capital employed is the relationship between net profit and shareholders funds. The profit has been finally decreased to 34.667.
77
CHART 5.17 RETURN ON CAPITAL EMPLOYED OF THE COMPANY FOR THE YEARS (2005 2009)
Return on Capital Employed Ratio

120 100
ratio
80 60 40 20 0 2005 2006 2007 years 2008 2009
78
5.3 Analysis of profitability

The following ratios have been employed to test the profitability of ACC Ltd for the period of study. 1. Gross profit ratio 2. Net profit ratio and 3. Expenses ratio Gross profit ratio Table 5.17 bring to light the gross profit of the company for the period of study. TABLE 5.18 TABLE SHOWING GROSS PROFIT RATIO OF THE COMPANY FOR THE YEARS (2005 2009) Year 2005 2006 2007 2008 2009 Gross profit 3465 4038 3815 6594.72 7977.12 Net sales 3489.89 3889.65 4539.35 6453.07 7548.26 Ratio 99.28 103.81 84.04 102.19 105.68
Interpretation The gross profit of ACC, during 2005 was 99.28% then it has been gradually increased during the years and finally the gross profit has increased in the years. This shows the profitability of the firm.
79
CHART 5.18 GROSS PROFIT RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Gross Profit Ratio

120 100
ratio
80 60 40 20 0 2005 2006 2007 years 2008 2009
80
Net profit ratio Table exhibits the net profit ratio of the selected company for the period of study.
TABLE 5.19 TABLE SHOWING NET PROFIT RATIO OF THE ACC COMPANY FOR THE YEARS (2005 2009)
Year 2005 2006 2007 2008 2009
Net profit 118.18 264.16 444.62 1458.59 1717.18
Net sales 3489.89 3889.65 4539.35 6453.07 7548.32
Ratio 3.39 6.79 9.79 22.60 22.75
Interpretation The net profit ratio of ACC was about 3.39% in the year 2005. It has been increased during the year 2009. The company has faced a high increase in the net profit ratio as of increase in net profit.
81
CHART 5.19 NET PROFIT RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Net Profit Ratio

25 20
ratio
15 10 5 0 2005 2006 2007 years 2008 2009
82
Cash profit ratio Table exhibits the net profit ratio of the selected company for the period of study.
TABLE 5.20 TABLE SHOWING CASH PROFIT RATIO OF THE COMPANY FOR THE YEARS (2005 2009) Year 2005 2006 2007 2008 2009 Cash profit 283.18 442.11 633.44 1712.84 2022.25 Net sales 3489.89 3889.65 4539.35 6453.07 7548.32 Ratio 8.11 11.36 13.95 26.54 26.79
Interpretation This ratio measures the relationship between cash generated from operations and net sales during first 2 years then it increased during the year 2009.
83
CHART 5.20 CASH PROFIT RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Cash Profit Ratio

30 25
ratio
20 15 10 5 0 2005 2006 2007 years 2008 2009
84
Manufacturing and other expenses ratio Table 5.20 exhibits the manufacturing and other expenses ratio of the ACC Ltd.., for the period of study.
TABLE 5.21 TABLE SHOWING MANUFACTURING AND OTHER EXPENSES OF THE COMPANY FOR THE YEARS (2005 2009) Manufacturing exp. 2874 3301 3704 4512 5578
Year 2005 2006 2007 2008 2009
Net sales 3489.89 3889.65 4539.35 6453.07 7548.32
Ratio 82.35 84.86 81.59 69.92 73.89
Interpretation During the year 2005, the ratio was 82.35 and then slightly decreased to 73.89 in the year 2009. The expenses ratio to other expenses reveals the expenses to the cost of goods sold. It has been gradually decline in the expenses.
85
CHART 5.21 MANUFACTURING AND OTHER EXPENSES RATIO OF THE COMPANY FOR THE YEARS (2005 2009)
Manufacturing and Expenses Ratio

90 80 70 60 50 40 30 20 10 0 2005 2006 2007 years 2008 2009
ratio
86
TABLE 1 COMPARATIVE BALANCE SHEET 31ST DEC 2005 & 2006

INCREASE PARTICULARS ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities 598.09 117.54 715.63 1076.74 1404.75 91.45 237.70 2810.64 3526.27 681.06 170.11 851.17 1353.73 1352.70 90.02 275.33 3071.78 3922.95 (82.97) (52.57) 135.54 (276.99) 50.05 1.43 (37.53) 261.14 396.68 (13.87) (44.73) 0.189 (25.72) 3.56 1.56 (15.78) 0.09 11.25 2368.56 86.92 127.77 2583.25 3526.27 2375.61 96.46 375.74 2847.81 3922.86 7.05 9.54 247.97 264.56 396.59 0.29 10.98 194.08 10.24 11.25 345.39 182.09 34.82 3.14 325.43 52.15 943.02 378.01 182.37 64.97 3.45 411.34 34.92 1075.04 32.62 0.28 30.15 0.29 85.91 (17.23) 132.02 9.44 0.15 86.59 9.24 26.39 (30) 13.99 2005 2006 (OR) DECREASE PERCENTAGE
87
Interpretation 1. The comparative balance sheet of the company reveals during the year 2006, there is an increase in fixed assets (264.56) at 10.24% while long term liabilities is to increase 50.05 at 3.56% 2. The current have increase by 13.99% and current liabilities have increase by 135.54 at 0.18% 3. Reserves and surplus decrease by 276.99 at 25.72% 4. The over all financial position of the company is satisfactory.
88
A study on financial performance of ACC ltd TABLE 2 COMPARATIVE BALANCE SHEET 31ST DEC 2006 & 2007
INCREASE PARTICULARS ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities 681.06 170.11 851.17 1353.73 1352.70 90.02 275.33 3071.78 3922.95 773.89 200.91 974.8 1597.68 1407.73 101.34 295.46 3402.21 4377.01 (92.83) (30.8) 123.63 (243.95) (55.03) (11.32) (20.23) 330.53 453.86 (13.63) (18.11) 14.52 (18.02) (4.07) (12.57) 7.35 10.76 11.57 2375.61 96.46 375.74 2847.81 3922.86 2517.47 354.28 279.14 3150.89 4376.71 141.86 257.82 (96.6) 303.08 453.86 5.97 267.28 (25.71) 10.64 11.57 378.01 182.37 64.97 3.45 411.34 34.92 1075.04 542.08 190.54 57.32 4.39 419.08 12.41 1225.82 164.07 8.17 (7.65) 0.96 7.74 (22.51) 150.78 43.40 4.48 (11.77) 27.98 1.88 (64.46) 14.03 2006 2007 (OR) DECREASE PERCENTAGE
89
Interpretation 1. The comparative balance sheet of the company reveals during the year 2006 and 2007, there is a increase in fixed assets (303.08) at 10.64%. 2. The current assets have increase (150.78) at 14.03% 3. The current liabilities have increase (123.63) at 14.52 4. Reserve and surplus decrease (243.95) at 18.02% 5. The over all financial position of the company is satisfactory
90
TABLE 3 COMPARATIVE BALANCE SHEET 31ST DEC 2007 & 2008

INCREASE PARTICULARS ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities 773.89 200.91 974.8 1597.68 1407.73 101.34 295.46 3402.21 4377.01 1024.73 502.28 1527.01 3142.92 771.16 144.82 320.72 4379.63 5906.63 (250.84) (301.37) 552.21 (1545.24) 636.57 (43.48) (25.26) 977.41 1529.92 32.41 150 56.65 96.72 590.89 42.91 8.55 28.72 34.96 2517.47 354.28 279.14 3150.89 4376.71 2922.49 558.42 503.54 3984.45 5906.45 405.02 204.14 224.4 833.56 1529.92 16.08 57.62 81.26 26.45 34.96 542.08 190.54 57.32 4.39 419.08 12.41 1225.82 624.13 213.96 620.17 16.13 446.85 0.94 1922.18 82.05 23.42 562.85 11.74 27.77 (11.47) 696.36 15.13 12.29 981.94 267.43 6.63 92.43 56.81 2007 2008 (OR) DECREASE PERCENTAGE
91
Interpretation 1. The comparative balance sheet of the company reveals during the years 2007 and 2008, there is a increase in fixed assets of 833.56 at 26.45% 2. The current assets have increase 696.36 at 56.80% 3. The current liabilities have increase by 552.21 at 56.65% 4. Reserves and Surplus decrease 1545.24 at 96.72% 5. The over all financial position of the company is satisfactory
92
A study on financial performance of ACC ltd TABLE 4 COMPARATIVE BALANCE SHEET 31ST DEC 2008 & 2009
INCREASE PARTICULARS ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities 1024.73 502.28 1527.01 3142.92 771.16 144.82 320.72 4379.63 5906.63 1392.23 666.27 2058.5 4152.71 306.41 162.69 331.45 4953.26 7011.74 (367.5) (163.99) 531.49 (1009.79) 464.75 17.89 10.73 573.64 1105.11 (35.86) (32.65) 34.81 32.13 60.27 12.35 3.35 13.09 18.71 2922.49 558.42 503.54 3984.45 5906.45 3314.73 649.17 844.81 4808.7 7011.74 392.23 90.75 341.27 824.25 1105.11 13.42 16.25 67.77 20.69 18.71 624.13 213.96 620.17 16.13 446.85 0.94 1922.18 730.86 289.29 743.48 18.87 420.54 0.0 2203.04 106.73 75.33 123.31 2.74 (26.31) (0.94) 280.86 17.10 35.21 19.88 16.39 (5.89) 100 14.61 2008 2009 (OR) DECREASE PERCENTAGE
Interpretation 93
1. The comparative balance sheet of the company reveals during the years 2008 and 2009, there is a increase in fixed assets of 824.25 at 20.69% 2. The current asset have increase 280.86 at 14.61% 3. The current liabilities have increase 531.49 at 34.81% 4. Reserves and surplus decease 1009.79 at 32.13% 5. The over all financial position of the company is satisfactory.
94
A study on financial performance of ACC ltd TABLE 1 COMMON SIZE BALANCE SHEET 31ST DEC 2005 & 2006 PARTICULARS
ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities 598.09 117.54 715.63 1076.74 1404.75 91.45 237.70 2810.64 3526.27 16.96 3.33 20.29 30.54 39.84 2.59 6.74 79.71 100 681.06 170.11 851.17 1353.73 1352.70 90.02 275.33 3071.78 3922.95 17.36 4.34 21.69 34.51 34.48 2.29 7.01 78.30 100 2368.56 86.92 127.77 2583.25 3526.27 67.17 2.46 3.62 73.31 100 2375.61 96.46 375.74 2847.81 3922.86 60.56 2.46 9.58 72.58 100 345.39 182.09 34.82 3.14 325.43 52.15 943.02 9.79 5.16 0.99 0.09 9.23 1.48 26.69 378.01 182.37 64.97 3.45 411.34 34.92 1075.04 9.64 4.65 1.66 0.09 10.49 0.89 27.42
2005
PERCENTAGE
2006
PERCENTAGE
Interpretation
95
A study on financial performance of ACC ltd 1. The common-size balance sheet of the reveals during the years 2005 and 2006, there is a increase in current assets 27.42%. 2. The fixed assets have decrease 72.58% 3. The current liabilities have increase by 21.69% 4. The Reserves and surplus increase by 34.51% 5. The over all financial position of the company is satisfactory.
TABLE 2 96
A study on financial performance of ACC ltd COMMON SIZE BALANCE SHEET 31ST DEC 2006 & 2007 PARTICULARS
ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities 681.06 170.11 851.17 1353.73 1352.70 90.02 275.33 3071.78 3922.95 17.36 4.34 21.69 34.51 34.48 2.29 7.01 78.30 100 773.89 200.91 974.8 1597.68 1407.73 101.34 295.46 3402.21 4377.01 17.68 4.59 22.27 36.50 32.16 2.32 6.75 77.73 100 2375.61 96.46 375.74 2847.81 3922.86 60.56 2.46 9.58 72.58 100 2517.47 354.28 279.14 3150.89 4376.71 57.52 8.09 6.38 72 100 378.01 182.37 64.97 3.45 411.34 34.92 1075.04 9.64 4.65 1.66 0.09 10.49 0.89 27.42 542.08 190.54 57.32 4.39 419.08 12.41 1225.82 12.39 4.35 1.31 0.36 33.94 0.28 28.00
2006
PERCENTAGE
2007
PERCENTAGE
Interpretation
97
A study on financial performance of ACC ltd 1. The common-size balance sheet of the reveals during 2006 and 2007, there is a increase in current assets 28% 2. The fixed assets have decrease by 72% 3. The current liabilities have increase at 22.27% 4. Reserves and surplus increase at 36.50% 5. The over all financial position of the company is satisfactory.
TABLE 3 98
A study on financial performance of ACC ltd COMMON SIZE BALANCE SHEET 31ST DEC 2007 & 2008 PARTICULARS
ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities 773.89 200.91 974.8 1597.68 1407.73 101.34 295.46 3402.21 4377.01 17.68 4.59 22.27 36.50 32.16 2.32 6.75 77.73 100 1024.73 502.28 1527.01 3142.92 771.16 144.82 320.72 4379.62 5906.63 17.35 8.50 25.85 53.21 13.06 2.45 5.43 74.15 100 2517.47 354.28 279.14 3150.89 4376.71 57.52 8.09 6.38 72 100 2922.49 558.42 503.54 3984.45 5906.63 49.48 9.45 8.52 67.46 100 542.08 190.54 57.32 4.39 419.08 12.41 1225.82 12.39 4.35 1.31 0.36 33.94 0.28 28.00 624.13 213.96 620.17 16.13 446.85 0.94 1922.18 10.57 3.62 10.49 0.27 7.57 0.16 32.54
2007
PERCENTAGE
2008
PERCENTAGE
Interpretation
99
1. The common-size balance sheet of the reveals during the years 2007 and 2008, there is a increase in current assets at 32.54% 2. The fixed assets have decrease at 67.46% 3. The current liabilities have increase at 25.85% 4. Reserves and surplus increase by 53.21% 5. The over all financial position of the company is satisfactory.
TABLE 4 COMMON SIZE BALANCE SHEET 31ST DEC 2008 & 2009
100
PARTICULARS
ASSETS Current assets: Inventories Sundry debtors Cash and bank balance Other current assets Loans & advance Miscellaneous exp. Total current assets Fixed assets: Net block Capital work in progress Investments Total fixed assets Total assets LIABILITIES: Current liabilities: Sundry liabilities Provisions Total current liabilities Shareholder funds Loan funds Stockist deposits Deferred tax liability Total Total liabilities
2008
PERCENTAGE
2009
PERCENTAGE
624.13 213.96 620.17 16.13 446.85 0.94 1922.18 2922.49 558.42 503.54 3984.45 5906.63
10.57 3.62 10.49 0.27 7.57 0.16 32.54 49.48 9.45 8.52 67.46 100
730.86 289.29 743.48 18.87 420.54 0.0 2203.04 3314.73 649.17 844.81 4808.7 7011.74
10.42 4.13 10.60 0.27 5.99 0.0 31.42 47.27 9.26 12.05 68.58 100
1024.73 502.28 1527.01 3142.92 771.16 144.82 320.72 4379.62 5906.63
17.35 8.50 25.85 53.21 13.06 2.45 5.43 74.15 100
1392.23 666.27 2058.5 4152.71 306.41 162.69 331.45 4953.26 7011.74
19.86 9.50 29.36 59.22 4.37 2.32 4.73 70.64 100
Interpretation 1. The common-size balance sheet of the reveals during the years 2008 and 2009, there is a decrease in current assets at 31.42% 101
A study on financial performance of ACC ltd 2. The fixed assets have increase at 68.58% 3. The current liabilities have increase at 29.36% 4. Reserves and surplus increase at 59.22% 5. The over all financial position of the company is satisfactory.
CHAPTER VI FINDINGS, SUGGESTIONS & CONCLUSION
102
A study on financial performance of ACC ltd ACC has made a commendable advancement in the industrial front in recent years. The Indian corporate sector has paved a way for an effective growth of the economy. One industry which holds its high is cement industry. Cement industry in India has developed tremendously since its beginning in the early 20th century. During late 80s the government fully decontrolled the industry and since then it has been on its own. The focus of this study is to analyse the financial performance of ACC ltd during the period 2005 2009.
6.1 Findings
Ratio analysis
1.
The current ratio was 1.24 which was then decreased to 1.22 and then it slightly increased to 1.25 in the year 2007 and then increased in the year 2008 was 1.26 and finally the current ratio was 1.07 and the current assets has constantly raised in the 5 years, the current liabilities has also shown a constant increase corresponding to the current assets. The company has maintained the favourable ratio through the year.
2.
Quick ratio of ACC during 2005, was 0.762 and during 2006. The quick ratio was 0.777 and it was decreased to 0.688. During the year 2007 and again it increased slightly in the next year to 0.849 and then it decreased slightly to 0.715.
3.
Absolute liquid ratio includes receivables, debtors and bills receivable. The acceptable norm was 0.5:1. The absolute liquid ratio for the year 2005 was 0.048 and gradually increased to 0.076 and finally the ratio has been reduced in the year 2009 as 0.361.
4.
The company had a gradual increase inventory turnover ratio from the year 2005. In 2006, it increased to 10.289 and then a decrease to 8.369 in 2007 and in 2009 the ratio remained at 10.327.
103
5.
Net working capital generally is not a ratio. The company shows constant during first two years then it increased and finally it has been increased during the year 2009.
6.
The company has a gradual increase of debtors turnover ratio from the year. Shows a high in 2005 and 2006, then slight decrease in ratio in recoded in the year 2007 at 4.88. The table shows unsatisfactory position due to the decreasing trend in the ratio.
7.
Capital turnover ratio has shown a increasing trend in the 5 years compared. The ratio reveals that the firm has good turnover and shows the high profit 1.523 in the year 2009.
8.
During the year 2005, the ratio was 0.364 and the ratio has been gradually increased to the year. The debt equity ratio reveals the good signal to the company.
9.
The firm faces high proprietary ratio in the year 2009 i.e. 0.673. The ratio was 0.306 in the year 2005 and there after increased gradually over the years which indicate that the proportion of total assets of the company showed a decrease in relation to shareholders funds.
10.
The firm had a low fixed ratio in the year 2005 i.e. 0.417 and the fixed ratio continuously started to increase finally in the year 2009 the fixed ratio is 1.047. it indicates that the proportion of fixed assets increased in comparison with decrease in shareholders funds.
11.
During the year 2005, the ratio was 2.397 and the ratio has been slightly decreased to 1.875 in the 2006 and finally the fixed asset to net worth ratio was suddenly decreased to 0.955 in the year 2009. This ratio is to shareholders fund to purchase the fixed assets. Sufficient fund to purchase the assets.
104
A study on financial performance of ACC ltd 12. During 2005 the fixed asset turnover over ratio was 1.42 which was increased to 1.57 in the year 2006 and finally increased to 1.904 in the year 2009. This verifying trend was due to the variance in fixed assets of the company. 13. The return on assets during the year 2005 was 4.20% which has increased to 34.66 % in the year 2009. This indicates the overall profitability of the firm had shown the increasing trend. 14. The return on investment of ACC Ltd constant increase except in the year 2005. It shows the huge increase in return on investment in all the 3 years due to increase in capital employed. 15. During 2005 the fixed asset to current asset ratio was 2.756 which were then decreased to 1.79 in the year 2009. There was slightly decreased in the year 2009. A decline in this ratio indicates that the debtors and stocks are increased too much and the fixed assets are more intensively used. 16. During the year 2005, the interest coverage ratio was 3.88 which were then slightly increased to 5.746 and then it decreased to 3.3 in the year 2008 and finally the ratio was increased to 8.5. This interest coverage ratio has shown an increasing trend in all the five year compared. Increasing trend shows the changes of signal of the firm using excessive debt. 17. During the year 2005, the return on capital employed ratio was 111.41 and then finally it was decreased to 34.66 in the year 2009. return on capital employed is the relationship between net profit and shareholders funds. The profit has been finally decreased to 34.667. 18. The gross profit of ACC, during 2005 was 99.28% then it has been gradually increased during the years and finally the gross profit has increased in the years. This shows the profitability of the firm.
105
A study on financial performance of ACC ltd 19. The net profit ratio of ACC was about 3.39% in the year 2005. It has been increased during the year 2009. The company has faced a high increase in the net profit ratio as of increase in net profit. 20. Cash profit ratio measures the relationship between cash generated from operations and net sales during first 2 years then it increased during the year 2009. 21. The expenses ratio to other expenses reveals the expenses to the cost of goods sold. It has been gradually decline in the expenses. Comparative financial statement The comparative balance sheet has a slight increase in the profitability position. Common size financial statement The common size balance sheet is satisfactory.
6.2 Suggestions
106
According to my study some ratios show non satisfactory position. Management may concentrate on such areas and act according to the situations. Some alternative techniques may be used to verify such unfavourable situation. It is advisable to the management to keep optimum level of inventory in the company. So that the funds can be trading used their some other purpose. Steps should be taken to improve return on investment position of the company. Steps should taken to reduce the operating and non operating expenses. The company must take possible steps to increase the profit of the company.
107
6.3 Conclusion
Result of the study show that the performance of the ACC Ltd.., madukkarai is satisfactory. The study also reveals that the company should adopt necessary policies in order to increase its profits. This will help the company in stabilizing a good stand in market.
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A study on financial performance of ACC ltd

1.2 Meaning and definition of finance

Some of the authoritative definitions are as follows:

1.3 Importance of finance

1.4 Ratio analysis

1.5 Interpretation of the study

1.6 Use and significance of ratio analysis

1.7 Limitations of ratio analysis

1.8 Comparative statement

A study on financial performance of ACC ltd

1.9 Common size statement

1.10 Company profile

1.10.1 Madukkarai cement works

1.10.2 Company objective

A study on financial performance of ACC ltd

1.10.3 History or background

1.10.5 Ready mix concrete plants

1.10.6 Research & development

1.10.7 Environment protection

1.10.8 Sustainable development

1.10.9 Corporate social responsibility

A study on financial performance of ACC ltd

1.10.10 Community & rural welfare

1.10.13 Central procurement

1.10.14 Occupational health & safety

A study on financial performance of ACC ltd

1.10.15 Five cardinal rules for safety

1.10.16 Products - consultancy services

1.10.19 Awards & accolades

A study on financial performance of ACC ltd

CHAPTER II RESEARCH METHODOLOGY

2.2 Objective of the study

2.3 Methodology of the study

A study on financial performance of ACC ltd

2.4 Scope of the study

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

CHAPTER III REVIEW OF LITERATURE

A study on financial performance of ACC ltd

CHAPTER IV ASPECTS OF FINANCIAL PERFORMANCES

4.1 Analysis of short-term financial position

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

Analysis of long-term financial position

Current assets Current assets to Proprietors funds = -------------------------Shareholders funds

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

CHAPTER V DATA ANALYSIS AND INTERPRETATION

5.1 ANALYSIS OF SHORT-TREM FINANCIAL POSITION

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

Year 2005 2006 2007 2008 2009

Liquid assets 545.48 662.11 671.33 1297.11 1472.18

Current liabilities 715.63 851.17 974.80 1527.01 2058.50

Ratio 0.762 0.777 0.688 0.849 0.715

A study on financial performance of ACC ltd

A study on financial performance of ACC ltd

Year 2005 2006 2007 2008 2009

Ratio 0.048 0.076 0.058 0.406 0.361