Chapter 1

1.INTRODUCTION


1 . 1 COMPANY
 PROFILE
Bharat Aluminum Co . Ltd . ( BALCO ) was incorporated in the
year 1965 as a Public Sector Undertaking (PSU). BALCO has several
“firsts” to its credit. It is the first public sector enterprise
in the country which started producing aluminum in 1975. In 1987-
88, a captive power plant of 270 MW was added to cater to the
power requirement of the unit. BALCO has been the first in the
Indian Aluminum Industry to produce the Alloy Rods, which is a
Feedstock for all Aluminum Alloy Conductors, needed for today’s
power transmission lines. Till 2001, BALCO was a public sector
enterprise owned 100% by Government of India (GoI). In the year
2001, GoI divested 51% equity and management control in favour
of Sterlite Industries (I) Limited.
In the last 41 years, BALCO has built up a production capacity of
200,000 tonnes per annum of alumina production capacity, 350,000
tonnes per annum of smelting capacity and expanded its
fabrication facility to include three Properzi Rod Mills, three
pig casting machines, integrated hot and cold rolling mills, and
captive power plants of 810MW capacity.
VISION


 “To achieve global standards of excellence in

productivity and customer satisfaction”
 The Bharat Aluminium Co. Ltd. (BALCO) culture finds
expression in its five core values:
 Commitment to excellence
 Commitment and competence of the people
 Customer satisfaction
 Globally one of the lowest cost producers
 Team work
 At BALCO, there is a constant effort to improve in all areas of
operations.
Plans are afoot to modernize the existing infrastructure to
bring it on par with the best in the world.
Mission:
DEPARTMENT-
*To achieve the financial execellency
*To build the image of the company as an commercial & efficient run organization.

OBJECTIVE-
*To check the income drainage through tax saving measures.
*improvement in customer’s service.
*To keep alive the goodwill & confidence created amongst suppliers, customers & other govt.
agencies.

STRATEGY-
*To divest the equity progressively & enter the capital market
 *To strengthen the collection
 *Usage of surplus funds in building strategy alliances & for establishing export oriented
units/diversification
 *Maximisation of profit through value added products
 *Integration of computerization of all sections of finance & accounts department


 CRITICAL SUCCESS FACTOR-
 *Improvement of collection of dues
 *complete computerization of accounts & accounts related functions of other department
 *Dynamic financial policy & technology improvement
PER CAPITA ALUMINIUM CONSUMPTION(Kg) :

INDIA - 0.5
CHINA - 3.1
UK - 19
USA - 33.4
 CONSUMPTION PATTERN

ELECTRICAL 37
TRANSPORTATION 19
CONSUMER DURABLES 12
PACKAGING 7
BUILDING CONSTRUCTION 6
MACHINERY 4
OTHERS 15
EUROPE 30.8 21.9
USA 29 22.9
CANADA 3.4 14.4
LATIN AMERICA 5.1 13.2
JAPAN 13.3 0.2
REST 19.4 27.4
HIGHLIGHT
 Capacity of 200,000 tpa of calcined alumina, 345,000 tpa of
aluminium metal and 810MW power plants.
 Produced 219,485 tonnes of calcined alumina and 173,743
tonnes of hot metal in FY 2005-06 and sold 171,206
tonnes of aluminium.
 Fully computerized Cold Rolling mill installed, which has
precise temperature controls.
 Hot Rolling Mill, widest 4 high hot rolling facility.
 Received ISO 9001:2000 for manufacture and supply of
calcined alumina, aluminium ingots/billets, aluminium rods
and aluminium rolled products.

 ASSETS & LOCATION
B h a ra t A lu m in iu m C o . Ltd . ( B A LC O ) is a p a rtia lly in te g ra te d
A lu m in iu m co m p a n y w ith C a p tive B a u xite M in e s, C a p tive Po w e r
Pla n ts, R e fin e rie s a n d S m e lte rs.
Vedanta Resources Corporate Social Responsibility

UTKARSH Scholarship Scheme

Inviting Talented Youth From Chhattisgarh

Bharat Aluminium Co. Ltd. (BALCO) is complying with applicable
Environmental and Occupational Health and Safety Assessment
(OHSAS) certification rules and regulations, and seeks to provide
a safe and environment friendly work atmosphere.

The company has taken steps towards conservation of raw

materials, water and energy and wherever possible, recycles water
and reduces waste. BALCO is committed to environment
protection and minimizing health hazards.
BALCO has a gas cleaning and cryolite regeneration plant to
minimize emission of gases since inception. It has mud ponds for
disposal of red mud generated from Bauxite. Electrostatic
precipitator is provided to check emission of solid particles into the
atmospheres.
BALCO believes in operating with a Social Conscience. As a responsible
Corporate Citizen, BALCO has undertaken some key initiatives to achieve its
social objectives: Effluent discharge has been brought down from 6000cum to 2500


2003-04 and the goal is to achieve zero-discharge by Jan 2006.

On-line opacity meters are installed for on-line monitoring of SPM

in all the stacks.

BALCO has obtained ISO 14001 and OHSAS 18001 certification

its mines, refineries and smelters except for its Bodai Daldali mine
will obtain shortly.

Two Brick Manufacturing plants have been promoted for fly-ash utilization.
At Kartala, a predominantly tribal block of Korba district, a , which is connected to at Bilaspur and Chennai,

set up.
Four villages, which are in the vicinity of the manufacturing facilities, have been adopted for a number of co

development programmes involving provision of drinking water, education, health, sports & games, roads etc
OPERATION OVERVIEW
BALCO is a partially integrated operation with its own Captive Bauxite Mines,
Refinery and Smelters, producing primary aluminum and also has 810 MW
captive power plants.
BALCO operations can be categorized into four major activities:
•Mining
•Smelting
•Refining
•Fabrication
•
MINING
Mining Process

Bharat Aluminium Co. Ltd. (BALCO) has Captive Bauxite Mines. The
method of mining is open cast semi-mechanized. Overburden, which is in the
form of soil & laterite, is first excavated by a combination of shovel /
excavator and dumper in order to expose ore-zone. Then the ore zone is
drilled and blasted. The blasted ore is subject to sorting in order to upgrade
the “Run of Grade” to “Plant Feed Grade” i.e. 46.7% oxide for Bodai Daldali
and 47% for Mainpat. Sorting is carried out at the mine-face and the rejects
associated in the ore zone are back-filled concurrently. The area is then
leveled and afforested. The sorted ore is then trucked to the Korba complex
for further processing.
Mines
Mainpat is the primary operative mine. It produced 565,301 tpa of Bauxite in
2005 -06.
Mainpat has approximately 5.3 million tonnes of reserves while Bodai-Daldali
has approximately 6.3 million tonnes of Bauxite reserves.

SMELTING
Smelting Process

Bharat Aluminium Co. Ltd. (BALCO) uses VSS (Vertical Stud Soderberg)
technology to produce Aluminium from Alumina. Alumina is dissolved in an
electrolytic bath of molten cryolite (Sodium Aluminium Fluoride) within a large
carbon or graphite lined steel container known as a "pot".
An electric current is passed through the electrolyte at low voltage, but very
high current. The electric current flows between a carbon anode (positive),
made of petroleum coke and pitch, and a cathode (negative), formed by the
thick carbon or graphite lining of the pot. Molten Aluminium is deposited at the
bottom of the pot and is siphoned off periodically. It is then taken to a holding
furnace, cleaned and then cast.
In the GAMI pre-baked process; alumina is converted into primary aluminum
through a smelting process using electrolytic reduction. The reduction process
takes place in a reduction cell, referred to as the pot, where alumina is reduced
to molten aluminium. From the pot-line, the molten aluminium is sent to the
fabrication facility.
REFINING

Refining Process

The aluminum industry relies on the Bayer process to produce

Alumina from Bauxite. Bauxite is crushed, ground and digested in
caustic soda at high pressure and temperature. The resulting liquor
contains a solution of sodium aluminates and un-dissolved Bauxite
residues containing iron, silicon, and titanium. These residues,
known as “red mud”, settle gradually to the bottom of the settling
tank and are filtered and removed.
The clear sodium aluminates solution, which is called aluminates
liquor, is pumped into a series of huge tanks called precipitators.
Fine particles of alumina are added to seed the precipitation of pure
Alumina particles as the liquor cools.
Concentration of the solid particles increases, which are then
removed, filtered and washed, and passed through a rotary or
fluidized calciner at 1100°C to drive off the chemically combined
water. The result is a white powder, pure Alumina.
FABRICATION
Introduction

For the past 30 years Bharat Aluminium Company has been dedicated to developing
World Class Quality aluminium plates and sheets of the various alloys. To stay ahead of
the competition it has adopted state of the art technology and has firmly established itself
as a front-runner among the producers of aluminium sheets and plates.

Past Successes:
Since 1980 BALCO has been catering to the needs of Defence and Space Research. The
following sophisticated alloys have been developed and supplied for defence and space
applications:
90% of the aluminium alloys used in the ‘Agni’, ‘Prithvi’ and ‘Akaash’ missiles, which have
been test fired successfully, were supplied by BALCO.
State of the art technology available with BALCO

S.NO. Alloy Applications

1 AFNOR 7020 Rocket fuel storage tank for ISRO

2 AA 2219 Cryogenic applications for VSSC,

Trivandram.

3 DTD 5124 Ammunition hardware for O.F., Ambajhari.

4 DTD 5024 Weldable secondary structural Components

for O.F., Ambajhari
CAST HOUSE:
1.Properzi continuous rod casters
2.Twin Roll Continuous Caster along with SNIF degasser (Maximum coil weight 10 tons, width
1750mm maximum)
3.Hydraulically driven semi – continuous ingot Casting machine.
SHEET ROLLING SHOP:
This is the only 4 - High Hot Rolling Mill in India.The HRM
of BALCO has the capacity to roll the widest slab (up to 1560 mm) plates
among all the HRM installed in .
The HRM contains a vertical rolling stand for edge rolling of

the plates, which minimize edge cracking.

Old Cold Rolling Mill BALCO has a 4 - High reversible rolling mill which neither
Hindalco nor Indal has. The 4 - High mill helps to
minimize shape variation in sheets.

New Cold Rolling Mill The salient features of the new Cold Rolling Mill installed are given
below:
Hydraulic automatic gauge control.

Shapes and flatness control.

Quick roll changing system.

Computerised controls with process sequence controls.

QUALITY ASSURANCE LABORATORY AND R & D CENTRE :
The Quality Assurance Laboratory and R&D Centre are equipped with the most
sophisticated equipments such as:

1.XRF & XRD

2.Pot flux analyzer.
3. Atomic absorption spectrometer
4.Scanning Electron Miscroscope
5.Polarizing microscope.
6.Erichsen sheet metal tester.
7.Instron 5569
8.Apart from the above the R&D Centre also has a melting furnace, miniature rolling
mill, wire drawing equipment, forging press and heat treatment furnaces for developing
special alloys.

PRODUCTS GALLORE :
The alloys produced for catering to the needs of various sectors are as given below:

1.Redraw rods- EC Grade, AA 6201, High strength grades and commercial grade.
2.Hot rolled coils- alloy 1xxx, 2xxx, 3xxx, 5xxx, 6xxx, 7xxx & 8xxx.
3.Hot rolled plates- alloy 1xxx, 2xxx, 3xxx, 5xxx, 6xxx, 7xxx & 8xxx.
4.Cold rolled coils- ….do……….
5.Cold rolled sheets- …..do………
6.Five bar pattern chequered sheets-1xxx, 3xxx, 5xxx, and 6xxx.
7.Diamond pattern chequered sheets-1xxx, 3xxx, 5xxx, and 6xxx.
8.Corrugated sheets and Industrial (troughed) sheets – 1xxx,3xxx,5xxx, and 6xxx
9.Foil Stock
10.PP Cap stock
 PROJECT

Bharat Aluminium Co . Ltd . (BALCO) has never been a company to rest

on its laurels.
BALCO recently completed expansion projects comprising the
commissioning of a 250,000 tpa aluminium smelter and an associated
540 MW captive power plant at a total cost of $550 million.
PRODUCTS OVERVIEW

Bharat Aluminium Co. Ltd. (BALCO) manufactures a wide range of products under
the brand name of ‘BHARATAL’. The products can be classified as under
:
•Aluminium Metal and it’s Semis
•Process Products
•
Aluminium Metal and it’s Semis Cast Aluminium - Products under this category are
not subjected to any fabrication operation other than casting into ingots/pigs, slabs, etc.
The product mix in this category comprises of:

•Bharatal Ingot
•Bharatal Casting Alloy Ingots
•
Wrought Aluminium – Products in this category are produced essentially by
mechanical operation and comprise of the following:

•Bharatal Properzi Rods

•Bharatal Rolled Products
Process Products

BALCO’s intermediate products, co-products, by-products and waste products

are covered under this category. These can be classified as under:
•By-products such as Vanadium Sludge
•
INGOTS

Bharatal Ingots

Types Available: EC Grade Ingots (EC) / Commercial Grade Ingots (CG)

Size: 115mm(thick) x 150mm(width) x 800mm(length)
Weight: 20kg each on an average

Bharatal Casting Alloy Ingots or Pigs

Types Available:

Alloy Ingots
Master Alloy (Hardeners)
Size: 120mm(thick) x 150mm(width) x 800mm(length)
Weight: 20kg each on an average
Weight can be reduced as required by the customer.
RODS
Bharatal Properzi Rods

Types Available: AlloyRods/HSRod

EC Grade Rods (EC) / Commercial Grade Rods (CG) /
Size: 9.50mm, 7.6mm, 12.0mm diameter rods

ROLLED PRODUCTS

Bharatal Rolled Products

Bharatal Rolled Products are produced in the following categories:

•Hot Rolled Coils

•Hot Rolled Plates
•Cold Rolled Coils/ Strips
•Cold Rolled Sheets
•Corrugated Sheets
•Chequered Sheets
•New CRM Products
Hot Rolled Coils :

Width (Untrimmed): In as rolled condition

Standard: 890mm, 965mm, 1270mm, 1540mm (approx.)

Non-standard: 800mm - 1540mm

Tolerance: Not applicable

Thickness: 4.50mm – 12mm for normal alloys (i.e. alloys of Al, Al-Mn, Al-Si, etc.)
4.50mm – 8mm for hard alloys (i.e. alloys of Al-Mg, Al-Mg-Si, Al-Cu-Mg,
etc.)

Arbour Diameter: 750mm without spool

Coil Density: 2.25kgs/mm width (approx.)

Coil Weight: 1000 – 4000 kgs

Temper: M, O

Finish: Mill Finish

Hot Rolled Plates

Width (Untrimmed): In as rolled condition

Standard: 865mm, 965mm, 1015mm, 1100mm,

1270mm, 1540mm (approx.)

Width (Trimmed): Standard: 915mm, 1220mm, 1500mm (approx.)

Non-standard: 800mm - 1498mm

Thickness (Untrimmed): 4mm – 200mm

Thickness (Trimmed): 6.5mm – 12mm for normal alloys (i.e. alloys of Al-Mn)
6.5mm – 80mm for hard alloys (i.e. alloys of Al-Mg, Al-
Mg-Si, Al-Cu-Mg, etc)

Weight: Depends on dimensions

Temper: F / M, O, H1,

Finish Mill Finish

Cold Rolled Coils/ Strips
Width (Untrimmed): In as rolled condition
Standard: 965mm, 1270mm, 1540mm (approx.)

Non-standard: 800mm - 1540mm

Width (Trimmed): Available for thickness range of only 0.4mm – 2.0mm

Standard: 915mm, 1220mm, 1500mm (approx.)
Non-standard: 25mm - 1500mm

Thickness: 0.4mm – 8.0mm for heat-treatable alloys (i.e. alloys of Al-Mg-Si, Al-Cu-Mg-Si, Al-
Zn-Mg-Si, etc)
0.4mm – 4.0mm for non-heat treatable alloys (i.e. alloys of Al, Al-Mn, Al-Si, Al-Mg,
etc)

Arbour Diameter: Untrimmed: 750mm with full weight coils



Trimmed: 200mm – 500mm with increase of multiple of 50mm for coils with width


range 100mm – 630mm, & 500mm for coils with width range 630mm – 1500mm

Coil Density: 1.0 – 1.5kg/mm width (approx.)

Coil Weight: 1000 – 3000kgs (untrimmed coil), 250kg (trimmed coil)

Temper: M, O, H1, H2, H3, H4 (for coils of thickness 0.4mm – 2.0mm in trimmed condition
with coil density of 1-2kg/mm width, & O, M with untrimmed edges in heat-treatable
alloys

Finish:
Mill Finish
Cold Rolled Sheets

Width Standard: 915mm, 1220mm

Non-standard: 400mm – 1200mm (for thickness of

0.7mm and above)

500mm – 915mm (for thickness of 0.7mm and below)

Length Standard: 1830mm, 2440mm, 2745mm, 3050mm

Non-standard: 1000mm – 4350mm

Thickness: 0.56mm – 5.00mm (length & width for sheets having

thickness of over 4.00mm is subject to confirmation)

Temper: F / M, O, H1, H2, H3, H4 O, H1, H2 (for sheets in

thickness over 3.25mm & in width over 915mm –
1200mm)

Alloys: Al, Al-Mn, Al-Si, Almg etc.

Finish: Mill Finish

New CRM Products

To ensure world-class quality, our fully computerized New Cold Rolling

Mill has the following advantages:

•Melting furnace with precision temperature controls

•On-line SNIF degassing which removes hydrogen and other impurities
•Ceramic foam filter which removes suspended impurities
•15-degree tilted super caster ensuring high-quality coils of international
standards
•Automatic gauge and flatness control
•Nitrogen controlled atmosphere in annealing furnaces that offer stain-
free & brighter surface
•Computerized roll grinding machines that maintain stringent tolerances
of profiles for the rolls
•Widest and strongest 4 high hot rolling facility (only one in India)
 PRODUCT RANGE
Product Alloy (AA) Thickness (mm) Width (mm) End-use

Standard Sheet 1100, 8011, 3003, 5XXX, 0.30 – 4.50 * 800 – 1540, Commercial Applications,
2XXX, 6XXX 800 - 1500 Defence/Marines

Standard Coils 1100, 8011, 3XXX, 5XXX 0.30 – 4.00 * 800 – 1480 Insulation, Ducting

Foil Stock 1100, 8011, 8006 0.30 – 0.60 500 – 1480 Re-rolling

Closure Stock 8011, 3105 0.17 – 0.23 550 – 1200 PP Caps, Seals

Lamp Cap Stock 3004, 8011, 5251, L8S 0.25 – 0.30 95 – 105 Electrical Bulbs

Fin Stock 1100, 8011 0.12 – 0.20 95 – 1220 Heat Exchangers,

Refrigeration
1.2.1 ORGANISATION CHART
PRESIDENT

C F O PLANT - 1 PLANT - 2 POWER

GM ALUMINA AVP POWER PROJECT GM CPP - 1

AVP ADMIN. GM COMM. GM SMELTER GM SMELTER PROJECT GM CPP - 2

AVP FAB. GM HR AGM HR

AGM HR GM COMM. AGM FINANCE

AGM FINANCE AGM COMM.

AGM COMM.
 1.2.2 BOARD COMPOSITION
S.No Name Designation Category No. of other Membership of
Directorsships other
committees

1 Mr.Anil Non-Executive Nominee of Sterlite 11 Nil

Agarwal Chairman Industries Ltd.

2 Mr.Navin Non-Executive Nominee of Sterlite 15 4

Agarwal Vice Chairman Industries Ltd.

3 Mr.Tarun Jain Non Executive Nominee of Sterlite 8 6

Director Industries Ltd.

4 Ms.Ajita Bajpai Non-Executive Nominee of the 3 Nil

Pande Director Government of India

5 Mr.Sanjiv Non-Executive Nominee of the 4 Nil

Kumar Mittal Director Government of India

6 Mr.Pramod CEO & Whole- Nominee of Sterlite Nil Nil

Suri time Director Industries Ltd.

7 Mr.Chandra Non Executive Nominee of Sterlite 2 Nil

Prakash Baid Director Industries Ltd.
1.2.3 COMPETETIVE SCENARIO

TOP 10 ALUMINA PRODUCING COUNTRIES:

AUSTRALIA 31 USA 10
CHINA 9 JAMAICA 7
BRAZIL 7 RUSSIA 6
INDIA 6 VENEZUALA 3
UKRAINE 3 CANADA 3
OTHERS 15
ALUMINA- present & future capacities
(INDIAN SCENARIO)
MANUFACTURERS CAPACITIES,LAC MT
  2005-06 2006-07 2007-08
NALCO 15.75 15.75 21

HINDALCO 6.6 6.6 6.6

UTKAL     10

INDAL 4.5 4.5 4.5

BALCO 2 2.3 8.3

MALCO 0.7 0.78 0.84

TOTAL 29.55 31.23 51.24

1.2.4 MARKET SHARE:
BALCO’S SHARE AMONG PRIMARY ALUMINIUM
PRODUCERS OF INDIA:
1.2.5 FINANCIAL DETAILS
Particulars 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02
Praduction in MT 358,671 313,189 160155 100272 97088 95490 70353
Sales 4697.69 4610.54 2050.15 1216.31 1006.4 984.39 677.7
Excise duty 528.14 510.27 276.75 170.99 140.83 132.15 98.62
Other income 111.47 221.03 86.71 28.57 54.44 45.06 53.31
Total income 4281.02 4321.3 1860.11 1073.89 920.01 879.24 632.29
Total expenditure 3432.49 3273.79 1597.64 873.65 779.78 790.17 630.09
Cash profit 1338.82 1525.94 434.54 253.66 187.42 142.78 38.29
EBIDTA 1396.54 1662.96 487.39 249.56 167.98 119.28 19.09
PAT 678.18 906.52 168.5 127.45 67.48 64.49 18.76
Share capital 220.62 220.62 220.62 220.62 220.62 220.62 220.62
Reserves & surplus 2309.45 1661.78 782.89 614.4 486.96 431.93 367.44
Net wroth 2530.07 1882.4 993.41 814.82 677.29 612.16 582.07
EPS 30.74 41.09 7.64 5.78 3.06 2.92 0.85
Book values 114.68 85.32 45.03 36.93 30.7 27.75 26.66
Cross fixed asset 4965.24 4845.04 4199.66 1796.45 1314.2 1172.56 990.23
EBIDTA(%) 29.73 36.07 23.77 20.52 16.69 12.12 2.82
Net profit margin 14.45 19.66 8.22 10.48 6.71 6.55 2.77
No. of employee 5192 5267 5100 4566 4311 5061 6300
RATIO ANALYSIS
A ratio analysis is a mathematical relationship
between two or more items of the financial statements
connected with each other. Ratio analysis serves the
purpose of various parties interested in financial
statements. The ratio analysis is to help management
in analysing and interpreting the financial
statements,to get adequate information useful for the
performance of various function like planning, co-
ordination,control,communication and forecasting.
Utility of ratio analysis
 Trends in costs , sales, profit and other related facts are revealed
by the past ratios and future events can be forecasted on the
basis of such trends.
 “Ideal ratios” may be constructed and the relationship found
between strategic ratios can be used for achieving the desired
co-ordination.
 Ratio may be used as instrument of management control
particularly in the areas of sales and costs.
 Ratio may also be used as a measure of efficiency. Since ratios
bring uniformity in the financial data ,inter-firm comparison is
made possible.
 It helps in investment decisions to make profitable investment.
 Ratios also facilitate the function of communication. It can easily
be conveyed through the ratios as what has happened during
the two intervening periods.
Significance of ratio analysis
 Business facts shown in financial statements do not carry any
importance individually . Their importance lies in the facts
that they are inter related Hence, there is need for
establishing relationship between various but related items ,If
any correct and accurate conclusion is to be drawn by their
use.
 Ratio-analysis as a tool for the interpretation of financial
statements is also significant because ratios help the analyst
to have a deep peep into the data given in statements.
Figures in their absolute forms shown in financial statements
are neither significant nor able to be compared.
 It signifies whether the financial health of the concern is vital,
strong , good or poor and week.
 Ratio-analysis may highlight upon the few phases of the
business operationsin which the outsiders are most interested
by ascertaining the rate and direction of change and future
potentialities.

Classification of ratios
1.Classification by statements:
b) Balance Sheet Ratios
Ø Liquidity ratio
Ø Current ratio
Ø Stock ratio
Ø Proprietary ratio
Ø Capital gearing ratio


b) Profit & Loss Account Ratios

Ø Gross profit ratio
Ø Expenses ratio
Ø Operating ratio
Ø Net profit ratio
Ø Profit cover of interest and dividend
 c). Balance Sheet and Profit & Loss Account Ratios
Ø Return on capital employed
Ø Return on shareholders fund
Ø Stock turnover
Ø Debtors turnover
Ø Creditors turnover
Ø Working capital turnover
Ø Current asset turnover
Ø Fixed asset turnover
Ø Net sales
2. Classification by

Users
a) Ratio for Management
Ø Operating ratio
Ø Return on capital employed
Ø Stock turnover
Ø Debtors turnover
Ø Solvency ratio
Ø
 b) Ratio for Creditors
Ø Current ratio
Ø Solvency ratio
Ø Creditors turnover
Ø Fixed asset ratio
Ø Asset cover ratio
Ø Interest cover ratio
Ø
c) Ratios for Shareholders
Ø Return on shareholders fund
Ø Capital-gearing ratio
Ø Dividend cover
Ø Yield rate
Ø Proprietary ratio
Ø Dividend rate
Ø Asset cover of share
Ø
Ø
c)
 3.Classification by Relative Importance
a) Primary Ratio
Ø Return on capital employed
Ø Asset turnover
Ø Profit ratio


b)

Secondary Performance Ratio
Ø Working capital turnover
Ø Stock to current asset
Ø Current asset to fixed asset
Ø Stock to fixed asset
Ø Fixed asset to total asset


c) Secondary Credit Ratio

Ø Creditors turnover
Ø Debtors turnover
Ø Liquid ratio
Ø
Ø Current ratio
Ø Average collection period


d) Growth Ratio
Ø Growth rate in sales
Ø Growth rate in net asset
Ø

4.Classification by Accounting Significance
Ø Solvency ratios
Ø Earning ratios
Ø Capitalisation ratios
Ø Credit ratios
Ø Management ratios
Ø
5.Classification by nature
Ø Liquidity, solvency or working capital ratios
Ø Inventory ratios
Ø Debtors and creditors ratios
Ø Sales ratios
Ø Earning and dividend ratios
Ø Cost ratios
Ø
CHAPTER 2
 2. RESEACH METHODOLOGY
Research in common parlance refers to a search for knowledge.
One can also define research as a scientific and systematic
search for pertinent information on a specific topic.
 
Research methodology is a way to systematically solve the
research problem. Research methodology just does not deal
research method but also consider the logic behind the method.
In facilitates the researcher with reason for evaluating the
research problem.
 
It has also defined as ‘a careful investigation or inquiry especially
through search for new fact in any branch of knowledge’.
 
Research comprises defining research problems, formulates the
hypothesis, research design including sample designing, data
collection, analysis of data, interpretation, conclusion on the Basis
of interpretation. Apart from it suggestions and recommendations
are also the part of research.
 
 Flow chart of research can be as follows.

Define Formulates Research Data Data analysis Interpret

research hypthesis design collection (hypothesis and report
problem (execution) testing if any)

Defining research problems: - A research problem, in
general, refers to some difficulty which a researcher experiences
in the context of either a theoretical or practical situation and
wants to obtain a solution for the same .

Formulate hypothesis: - after extensive literature survey,
researcher should state in clear terms the working hypothesis.
Working hypothesis is tentative assumption made in order to
draw out and test its logical or empirical consequences .
 RESEARCH DESIGN
Researchers have to state the conceptual structure within which
research would be conducted. The preparation of such design
facilitates research to be as efficient as possible yielding
maximal information.
A research design is the specification of methods & the selection of

methods & procedures for gathering the data. Data gathering

forms are prepared. Questionnaires are tested samples for
investigations are planned.
  
 Exploratory Research:
 All projects must start with exploratory research. This is
preliminary phase and is absolutely essential in order to
obtain a proper definition of the problem at hand. The
major emphasis is a discovery of ideas and insight.
  
 Descriptive Research:
 The descriptive study is typically concerned with determinig
frequency with which some thing occurs or variable vary
together this study is guided by an initial hypothesis.