PROJECT REPORT ON FINANCIAL STATEMENT ANALYSIS OF C.C.

UNDER GUIDANCE MR. SANDEEP BANSAL

SUBMITTED BY RICHA KUMARI ROLL NOS-1172994 MBA 3RD SEM

INTRODUCTION OF COAL INDIA

Coal India limited is navratana company. It is the third largest coal producing company in the world. It produced 520 million tones coal in 2011-12. It is holding company with it headquarter in Kolkata and has its eight subsidiary companies. 74%of total coal production of C.I.L caters to 72 thermal power station, generating 64,285 mw.

OBJECTIVE OF STUDY.

To know about financial position of firm. To know about solvency position of firm.

To know about future financial position of firm.

RESEARCH METHODOLOGY
Data source; Secondary Data The information was collected from various sources which are listed below:-

From the official documents & website.

From a close observation of the functioning of various departments of the organisation.

TOOLS FOR FINANCIAL ANALYSIS

Ratio analysis. Trend analysis. Common size statement.

FINDINGS & INTERPRETATION

4 3.5 3 2.5 2 1.5 1 0.5 0 current ratio 3.15 2011 2010 2009 2008 2007

CURRENT RATIO= CURRENTASSETS/ CURRENT LIABILITES

2011 2010 2009 2008 2007 Current ratio:3.15 3.08 3.45 2.98 3.61 Conclusion- In 2007 it has highest ratio of 1.11:1,which indicate that firm is able to meet its current liabilities with its current assets. This is a good sign for creditors as they can entrust the company that there advances will be recovered.

FIXED ASSETS TURNOVER RATIO:SALES/NET FIXED ASSETS

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 fixed assets turnover ratio

2011 2010 2009 2008 2007

Fixed assets turnover ratio:CONCLUSION:The fixed asset turnover ratio of CCL is growing consistently for last five years except some depression in 2008. This shows that the company is efficiently using its fixed assets in producing sales. Also as we saw that company is relying more on fixed asset for generating profits than current assets.

2011 1.18

2010 2009 2008 2007 1.01 0.93 0.90 1.48

INVENTORY TURNOVER RATIO-COGS/AVERAGE INVENTORY

7 6 5 2011 4 3 2 1 0 inventory turn over ratio 2010 2009 2008 2007

2011 2010 2009 2008 2007 Inventory turnover ratio:- 5.21 4.73 6.15 5.13 5.69 Conclusion:The inventory turnover reflects the efficiency of inventory management. The higher the ratio more efficient the management of inventories is and viceversa. But over the year we have seen that the company trend shows that the ratio was declining but there is an improvement in the last year which indicates that the company is paying more attention in converting its inventory into sale. However it fluctuates yearly.

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GROSS PROFIT MARGIN= GROSS PROFIT/SALES

20

15

2011 2010 2009

10

2008 2007

0 gross profit margin

2011 2010 2009 2008 2007 Gross profit margin:- 13.96 15.53 13.69 13.05 19.92 Conclusion: The company is not able to effectively control its cost of goods sold(higher) during year 2008 and 2009. however it manage it in 2010 i.e. it increase from 13.69% to 15.53% 2011 it decreases to 13.96%.its may be due to inability to purchase raw material at favorable term.

NET PROFIT MARGIN= PROFIT AFTER TAX/SALES

20 18 16 14 12 10 8 6 4 2 0 net profit margin 2011 2010 2009 2008 2007

2011 2010 2009 2008 2007 Net profit margin:- 7.74 9.53 7.13 14.33 17.29 It is decreased in 2011 7.74% due to increase in remuneration of employee Over the year other income of the company and sales is also improving but the expenditure of the company is too much high as compared to revenue.

RECOMMENDATIONS:CCL should stop issuing coal for colliery consumption as this is a major source of expense but the company is getting nothing in return for it.

Company should launch a performance based payment system to control the remuneration expenses.

The company should have a single labor union to take care of the issues of employment and other decisions.

CONT

There should be centralized recruitment of all the officers as well as blue collar employees.

There should be mechanization of the company, this would help in extraction of coal with higher efficiency and reduced cost.

CONTD..

The company should launch new training programs for its employee to improve their skill as well as increase their motivation

The company should be allowed to make investments as it is holding a lot of idle funds which can be used to earn more profits

LIMITATIONS OF STUDY
Based

on financial statement.

Affected

by window dressing.

Company

only provide secondary data so certain type of biasness in study.