DATA ANALYSIS AND INTERPRETATION

4.1 PROJECT ANALYSIS

Annual report of GNA Duraparts for two year used to analyze the project and schedules, graphs are

used for interpret the result.

The various tools are used for presentation and analysis that are:

Tables

Bar graphs

Schedule of changes in working capital

In this procedure firstly we can calculate the or estimate the working capital

requirements in the year 2008 to 2010...

1.) ESTIMATION OF WORKING CAPITAL REQUIREMENTS IN YEAR

2008 to 2010

GNA DURAPARTS PVT LTD.

Statement of Working Capital requirements as on 31.03.2010

Current Assets:

Cash and bank balances

Cash in hand of Mehtiana

Cash in hand of branch

Cash at banks

In current a/c and others

Sundry debtors

Advances to vendors

inventories

loan and advances

securities deposits

advance income tax

expenses pre-paid

employee accounts

excise duty

rent advances

interest accrued

4421602.51

32276.13

4866912.86

208221954.88

4756880.16

515568532.81

3686921.60

26222027.55

1265513.96

1659165.74

8480359.92

267000.00

20313.36

excise duty (pending claim)

income tax refund

group gratuity

Amount recoverable

D.E.P.B recoverable

Fringe benefit taxes

Service tax cenvat

Commission receivable

Excise duty recoverable

Deposits with GNA UDYOG

Advances against land

Vat recoverable

Insurance recoverable

Freight clearing

Advances against fixed assets

Insurance claim employee

Customer clearing

Total of current Assets : (CA)

Less current liabilities:

Sundry creditors

Advance received from customer

Sundry payable

Sundry expenses payables

Income tax debt. At recourses

I.T.C.S on scrap

Bonus payable

Leave with wages payables

Share application money

Service tax payable

Total of current liabilities: ( CL)

4643713.71

53566.00

88496.00

6000.00

804749.00

2994474.00

1148012.10

353440.00

8701.00

_

70000.00

1137470.16

31407.00

_

483024.75

3543.00

475717.10

_______________

791771775.30

237321451.79

2536793.08

20080039.14

1629975.00

12095.00

3497655.00

20816.00

343.52

4483.00

_______________

265103651.53

Net working capital required ( CA-CL )

_______________

526668123.77

Statement of Working Capital requirements as on 31.03.2009

Current Assets:

Cash and bank balances

Cash in hand of Mehtiana

Cash in hand of branch

Cash at banks

In current a/c and others

Sundry debtors

Advances to vendors

inventories

loan and advances

securities deposits

advance income tax

expenses pre-paid

employee accounts

excise duty

2409340.47

21051.63

7943463.65

211378426.43

6109885.23

400060868

3798721.10

42851469.55

1106850.16

1603772.27

2712528.98

rent advances

interest accrued

excise duty (pending claim)

income tax refund

group gratuity

Amount recoverable

D.E.P.B recoverable

Fringe benefit taxes

Service tax cenvat

Commission receivable

Excise duty recoverable

Deposits with GNA UDYOG

Advances against land

Vat recoverable

Insurance recoverable

Freight clearing

Advances against fixed assets

Insurance claim employee

Customer clearing

Total of current Assets : (CA)

Less current liabilities:

Sundry creditors

Advance received from customer

Sundry payable

Sundry expenses payables

Income tax debt. At recourses

I.T.C.S on scrap

Bonus payable

Leave with wages payables

Share application money

Service tax payable

267000.00

20313.36

5212500.00

578171.00

23557.84

_

967305.00

2994474.00

1345842.81

_

41249.00

5480000.00

70000.00

4527817.29

29803.00

29320.46

_

_

_

_______________

701583830.44

_______________

177513567.84

10790539.95

20104843.00

1814654.78

4449.11

3190708.00

26236.00

343.52

80729.00

Total of current liabilities: ( CL)

Net working capital required ( CA-CL )

_______________

232894071.24

468689759.24

_______________

2.) MEASURE THE CHANGES IN THE AMOUNT OF WORKING CAPITAL OF

TWO BALANCE SHEET DATES

IN this statement we can calculate and measure the changes in the working capital of the two year and find

out where the working capital increased and where it decreased so we can prepare the following

statement….

Statement Showing Changes in Working Capital

Particulars

Previous

Year

2009 (in Rs)

Current

Year

2010(in Rs)

Increase

In

Working

Capital (In Rs.)

Decrease

In

Working

Capital (In Rs.)

Current Assets:

Cash and bank balances

Cash in hand of Mehtiana

Cash in hand of branch

Cash at banks

In current a/c and others

Sundry debtors

Advances to vendors

inventories

loan and advances

securities deposits

advance income tax

expenses pre-paid

employee accounts

excise duty

rent advances

interest accrued

excise duty (pending claim)

income tax refund

group gratuity

Amount recoverable

D.E.P.B recoverable

Fringe benefit taxes

Service tax cenvat

Commission receivable

Excise duty recoverable

2409340.47

21051.63

7943463.65

211378426.43

6109885.23

400060868

3798721.10

42851469.55

1106850.16

1603772.27

2712528.98

267000.00

20313.36

5212500.00

578171.00

23557.84

_

967305.00

2994474.00

1345842.81

_

41249.00

4421602.51

32276.13

4866912.86

208221954.88

4756880.16

515568532.81

3686921.60

26222027.55

1265513.96

1659165.74

8480359.92

267000.00

20313.36

4643713.71

53566.00

88496.00

6000.00

804749.00

2994474.00

1148012.10

353440.00

8701.00

2012262.04

11224.5

115507664.81

158663.8

55393.47

5767830.94

__

__

64938.16

6000.00

__

353440.00

3076550.79

3156471.55

13530050.07

111799.5

16629442.00

568786.29

524605.00

162556.00

197830.71

32548.00

Deposits with GNA UDYOG

Advances against land

Vat recoverable

Insurance recoverable

Freight clearing

Advances against fixed assets

Insurance claim employee

Customer clearing

Total of current Assets : (CA)

Less current liabilities:

Sundry creditors

Advance received from customer

Sundry payable

Sundry expenses payables

Income tax debt. At recourses

I.T.C.S on scrap

Bonus payable

Leave with wages payables

Share application money

Service tax payable

Total of current liabilities(CL)

Net working capital required

(CA-CL)

5480000.00

70000.00

4527817.29

29803.00

29320.46

_

_

_

____________

701583830.44

____________

177513567.84

10790539.95

20104843.00

1814654.78

4449.11

3190708.00

26236.00

343.52

80729.00

____________

232894071.24

468689759.24_

_

70000.00

1137470.16

31407.00

_

483024.75

3543.00

475717.10

_____________

791771775.30

237321451.79

2536793.08

20080039.14

1629975.00

12095.00

3497655.00

20816.00

343.52

4483.00

_____________

265103651.53_

526668123.77

__

__

__

1604.00

__

483024.75

3543.00

475717.10

--

8253746.87

24804.00

184679.78

--

--

5420.00

--

76246.00

5480000.00

__

3390347.13

__

29320.46

__

__

__

59807883.95

--

--

--

7645.89

306947.00

--

--

--

Interpretation:

This Schedule shows the changes in the amount of Working Capital in year 2009 and 2010. In

year 2010 the working capital is 468689759.24 and in year 2010 it increases i.e. 468689759.24 it

means the Net Working Capital increases by 57978364.53 in year 2010...

So its shows the company have average working capital to carry out its working expenses..

3.) TO ANALYSE SHORT TERM FINANCIAL POSITION OF GNA

DURAPARTS THROUGH RAITOS ANALYSIS…

RATIO ANALYSIS:

Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process

of establishing and interpreting various ratios for helping in making decisions. The main emphasis

has been on calculating the ratios related to a working capital management.

MAINLY TWO TYPES OF RATIOS ARE CALCULATED TO KNOW THE SHORT TERM

FINANCIAL POSITION OF THE COMPANY

1. Liquidity Ratios

2. Current Assets Movement or Efficiency/Activity Ratios

The diagram of the different types of ratio is given below

ANALYSIS OF SHORT TERM FINANCIAL POSITION

Current Assets Movement or

Efficiency/Activity Ratios

Liquidity Ratios

1. Current Ratio2. Quick or Acid Test or

Liquid Ratio 1. Stock Turnover Ratio2. Debtors/Receivables Turnover Ratio3. Creditors/Payables Turnover Ratio4. Working Capital Turnover Ratio

(A) LIQUIDITY RATIOS

Liquidity ratios measure the ability of the unit to meet its short-term or current (generally one year)

obligations as and when these become due. The short term obligations are met by realizing amounts

from current assets.

If current assets can pay off current liabilities, then liquidity position will be satisfactory.

If current liabilities may not be easily met out of current assets then liquidity position will

be bad.

To measure the liquidity of a firm, the following ratios can be calculated:

I. CURRENT RATIO :

It may be defined as the relationship between current assets and current liabilities. This ratio is also known

as working capital ratio and measures the ability of the firm to meet current liabilities.

High current ratio indicates firm is liquid and has the ability to pay its current obligations

in time as and when they become due.

RULE OF THUMB IS 2:1

It means the current assets should be two times more than current liabilities. A ratio equal or near

to the rule of thumb of 2:1 i.e. current assets double the current liabilities is considered to be

satisfactory.

Current Ratio = Current Assets

Current Liabilities

Year Details Current Ratio

2009 701583830.44

232894071.20

3.012

2010 791771775.30

265103651.53

2.987

2009 20102.97

2.975

2.98

2.985

2.99

2.995

3

3.005

3.01

3.015 3.012

2.987Current Ratio

Interpretation: The current ratio of GNA DURAPART in 2009 is 3.012 and it is decreased in

2010 and that is 2.987 and current ratios in both years satisfied rule of thumb. This shows current

ratio of GNA DURAPART quite satisfactory…

II. LIQUID RATIO:

This ratio is also known as quick ratio or acid test ratio. It is a more important test of liquidity

than the current ratio. The ratio indicates that how much the concern has liquid assets as compare

to the current liabilities.

A high quick ratio is the indication that the firm is liquid and has the ability to meet its

current liabilities in time.

Low ratio represents liquidity position is not good.

Liquid or Quick Assets = Current Assets – Inventory – Prepaid Expenses

RULE OF THUMB: Rule of thumb for acid test ratio is1:1 i.e. It is better to have current assets

equal to current liabilities however the little lower is also acceptable depending on certain factors.

Quick/Liquid or Acid Test Ratio = Liquid Assets

Current liabilities