project report on bsl
TRANSCRIPT
A
PROJECT REPORT
ON
COST OF CAPITAL AND RATIO ANALYSIS
45 days summer training project with
Banswara syntax ltd.
SUBMITTED BY:
MANSOOR AHMED
MBA IInd SEM
POORNIMA SCHOOL OF MANAGEMENT
ISI-2, RIICO INSTITUTIONAL AREA, GONER ROAD, SITAPURA, JAIPUR
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POORNIMA SCHOOL OF MANAGEMENT
(ISI-2, GONER ROAD,SITAPURA, JAIPUR)
CERTIFICATE OF
SUMMER PROJECT/TRAINING DURING JUNE –JULY,2010
Certified that Mr, mansoor ahmed, student of master of business administration/ IIIrd
semester has submitted his report on ‘cost of capital and ratio analysis’ after
successfully completing the summer practical training at “Banswara syntax ltd.
Banswara” from june 17th to august 1st 2010, towards fulfilment of the syllabus
requirement prescribed by Rajasthan technical university, kota for MBA IIIrd
semester paper.
Vandana Sharma
Director, PSOM
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ACKNOWLEDGEMENT
A large number of individual has contributed to this project. I am thankful to all of
them for their help and encouragement. Like other reports, this report is also drawn
from the work of large number of researchers and author in the field of finance.
I shall like to thanks Bsl’S finance department for their able guidance, support,
supervision and care during the whole training program and to whom words can
never express my feeling of gratitude and reverence.
I would like to give my sincere thanks to officers, managers and employees of
BANSWARA SYNTEX LTD, BANSWARA (RAJ) for providing valuable information,
reports and data that were require for the study.
Last but not least, I would like to express my deep sense of gratitude to my
parents and friends for their unflinching moral support. Their towering presence
instilled in me the carving to the work harder and completes this daunting task timely
with a sufficient degree of in depth study.
I have tried to give credit to all sources form where I have drawn material in
this project, still I felt obliged if they are brought to my notice.
MANSOOR AHMED
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TABLE OF CONTENTS
PREFACE
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S.NO. PARTICULARS
1. Preface
2. Executive summery
3. Industry profile
4. Company profile
5. Objectives
6. Research methodology
7. Cost of capital
8. Concept of cost of capital
9. Significance of cost of capital
10. Classification of cost of capital
11. Merits and demerits of cost of capital
12. Ratio analysis
13. Types of ratio
14. Recommendation
Limitation
15. Bibliography
Webliography
About three decade ago, the scope of financial management was confined to the
raising of funds, whenever needed and little significance used to be attached to
financial decision-making and problem solving. As a consequence, the traditional
finance texts were structured around this theme and contained description of the
instruments and institutions of raising funds and of the major events, such as
promotion, reorganization, readjustment, merger, consolidation etc.
In the mid fifties, the emphasis shifted to the judicious utilization of funds. The
modern thinking in financial management accords a far greater importance to
management decision-making and policy. Today, financial management does not
perform the passive role of scorekeepers of financial data and information, and
arranging funds, whenever directed to do so. Rather, they occupy the key position in
top management areas and play a dynamic role in solving complex management
problems. They are now responsible for the fortune of the enterprises and are
involved in the most vital management decision of allocation of capital. It is their duty
to insure the funds are raised most economically and used in the most efficient and
effective manner. Because of this change in emphasis, the descriptive treatment of
the subject of financial management is being replaced by growing analytical content
and sound theoretical underpinnings.
EXECUTIVE SUMMERY
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Banswara Syntex Limited was incorporated in the year 1976. While incorporation it
was a joint sector company with RIICO Ltd. (A Govt. of Rajasthan Undertaking) and
Mr. R.L.Toshniwal. In 1982 Mr.Toshniwal purchased the shares from RIICO.
Presently it is a Public Limited Company, the promoters holding is 59.44% of Equity
Share Capital.
Banswara Syntex Limited (BSL) is a vertically integrated textile mill manufacturing
man-made synthetic blended Yarn, wool and wool mixed yarn, all type of Fabrics, Jacquard Furnishing Fabrics, besides production of Readymade Garments and
Made-up's.
The Summer Training being undertaking for the purpose of “cost of capital and ratio analysis” where I come to realize various financial aspects such as
performance reviews, financial growth and impact, annual report and matter related
to corporate governance. The study involved analysis of the financial impact of the
company internally as well as externally
INDUSTRY PROFILE
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The Indian textile industry has a significant presence in the economy as well as in
the international textile economy. Its contribution to the Indian economy is
manifested in terms of its contribution to the industrial production, employment
generation and foreign exchange earnings. It contributes 20 percent of industrial
production, 9 percent to the countrys total export earning and 4 percent to the Gross
Domestic product.
India has been well known for her textile goods since very ancient times. The
traditional textile industry of India was virtually decayed during the colonial regime.
However, the modern textile industry took birth in India in the early nineteenth
century when the first textile mill in the country was established at fort gloster near
Calcutta in 1818. The cotton textile industry, however, made its real beginning in
Bombay, in 1850s. The first cotton textile mill of Bombay was established in 1854 by
a Parsi cotton merchant then engaged in overseas and internal trade. Indeed, the
vast majority of the early mills were the handiwork of Parsi merchants engaged in
yarn and cloth trade at home and Chinese and African markets.
The first cotton mill in Ahmedabad, which was eventually to emerge as a rival centre
to Bombay, was established in 1861. The spread of the textile industry to
Ahmedabad was largely due to the Gujarati trading class.
The cotton textile industry made rapid progress in the second half of the nineteenth
century and by the end of the century there were 178 cotton textile mills; but during
the year 1900 the cotton textile industry was in bad state due to the great famine and
a number of mills of Bombay and Ahmedabad were to be closed down for long
periods.
CURRENT POSITION OF TEXTILE INDUSTRIE IN INDIA
Textile constitutes the single largest industry in India. The segment of the industry 7
during the year 2000-01 has been positive. The production of cotton declined from
156 lakh bales in 1999-2000 to 1.40 lakh bales during 2000-01. Production of man-
made fibre increased from 835 million kgs in 1999-2000 to 904 million kgs during the
year 2000-01 registering a growth of 8.26%. The production of spun yarn increased
to 3160 million kgs during 2000-01 from 3046 million kgs during 1999-2000
registering a growth of 3.7%. The production of man-made filament yarn registered a
growth of 2.91% during the year 1999-2000 increasing from 894 million kgs to 920
million kgs. The production of fabric registered a growth of 2.7% during the year
1999-2000 increasing from 39,208 million sq mtrs to 40,256 million sq mtrs. The
production of mill sector declined by 2.6% while production of handloom, powerloom
and hosiery sector increased by 2%, 2.7% and 5.1% respectively. The exports of
textiles and garments increased from Rs. 455048 million to Rs. 552424 million,
registering a growth of 21%. Growth in the textile industry in the year 2003-2004 was
Rs. 1609 billion. And during 2004-05 production of fabrics touched a peak of 45,378
million squre meters. In the year 2005-06 up to November, production of fabrics
registered a further growth of 9 percent over the corresponding period of the
previous year.
With the growing awareness in the industry of its strengths and weakness and the
need for exploiting the opportunities and averting threats, the government has
initiated many policy measures as follows.
The Technology Upgradation Fund Scheme (TUFS) was launched in April 99 to
provide easy access to capital for technological upgradation by various segments of
the Industry.
The Technology Mission on Cotton (TMC) was launched in February 2000 to
address issues relating to the core fibre of Cotton like low productivity,
contamination, obsolete ginning and pressing factories, lack of storage facilities and
marketing infrastructure.
A New Long Term Textiles and Garments Export Entitlement (Quota) Policies 2000-
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2004 was announced for a period of five years with effect from 1.1.2000 to
31.12.2004 covering the remaining period of the quota regime.
FUTURE PROSPECTS:
The future outlook for the industry looks promising, rising income levels in both
urban and rural markets will ensure a rising market for the cotton fabrics considered
a basic need in the realm of new economic reforms (NER) proper attention has been
given to the development of the textiles industry in the Tenth plan. Total outlay on
the development of textile industry as envisaged in the tenth plan is fixed at Rs.1980
crore. The production targets envisaged in the terminal year of the Tenth plan are
45,500 million sq metres of cloth 4,150 million kg of spun yarn and 1,450 million kg
of man made filament yarn. The per capita availability of cloth would be 28.00 sq
meters by 2006-2007 as compared to 23.19 sq meters in 2000-01 showing a growth
of 3.19 percent. The export target of textiles and apparel is placed at $32 billion by
2006-2007 and $50 billion by 2010.
COMPANY PROFILE
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Banswara Syntex Limited (BSL) is a vertically integrated textile mill manufacturing
man-made synthetic blended Yarn, wool and wool mixed yarn, all type of Fabrics, Jacquard Furnishing Fabrics, besides production of Readymade Garments and
Made-up's.
Banswara Syntex Limited was incorporated in the year 1976. While incorporation it
was a joint sector company with RIICO Ltd. (A Govt. of Rajasthan Undertaking) and
Mr. R.L.Toshniwal. In 1982 Mr.Toshniwal purchased the shares from RIICO.
Presently it is a Public Limited Company, the promoters holding is 59.44% of Equity
Share Capital.
Initially it was a spinning mill with 12500 spindles. As the journey continued the
Company completed expansion, diversification and modernization plans. Over the
last 3 decades, Company besides increasing the Spinning capacity to 119188
spindles started production of Fabric from 1993, Readymade Garments from 2004,
Made-up's and Worsted Spinning from 2008. The Company also entered into Joint
Venture with French Company Carreman in 2006.
The present installed capacity is 133588 Ring Spindles including 14400 Spindles for
Worsted Yarn Spinning, 576 Air Jet Spindles, 194 Shuttles-less Looms, 12-Air Jet
Jacquard Looms, 6 Stenters with processing capacity of 4 million meters per month, 10
besides ready-made garment production capacity for trousers 2.25 lac pieces and
10000 pieces Jackets per month at Daman and Surat.
The company has a track record of expanding, modernizing and diversifying its
activities from time to time keeping in view the increasing demands, quality
expectation of the customers, changing market requirements etc.
The company embarked on cloth weaving activity in the year 1993 by setting up a
state-of-art weaving plant to manufacture quality fabrics in the brand name of
BANTEX mainly for domestic market. The company manufacturing fabrics with
Lycra purchased from international brand, Dupont. Banswara Syntex Limited
exports its products to more than 50 countries including US, UK, Canada, Spain,
Germany, Italy, France, Philippines, Turkey and GCC countries.
BSL again diversified its activities into Cotton spinning and Readymade Garment
manufacturing in the year 2004. For Readymade Garments, a separate unit was set
up at Daman (U.T.) to manufacture trousers in the brand name of INTEGRATION.
Second Garmenting Unit was set up in SEZ at Surat.
In the year 2005, Banswara Textile Mills Ltd., an associate firm engaged in fabric
finishing activity, amalgamated with the company. The Company is also introducing
technical fabric and has setup coating unit for the same.
The company is a Government recognized Two Star Export House having IS/ISO
9001:2000 certification by the Bureau of Indian Standards.
BSL, backed by a fashion-savvy team with a motto of producing wide range of textile
products with utmost quality consciousness, is exporting its products and has won
several awards for its best export performance. It has continuously won highest
Export Award from SRTEPC for last 8 years in a row.
Manufacturing unit
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Upon incorporation the company had a single unit at Industrial Area, Banswara for
manufacturing synthetic yarns. Over the years the company has expanded, modernized and
diversified its activities in a phased manner. In this process, the company set up more units at
Banswara for Wool Spinning, Weaving, Fabric Processing, Made-up's and Power Plant. The
company established its new units at Daman and Surat for Readymade Garments. The installed
capacity of the company at all the units as on 30th Sept, 2009 was as under:-
Spinning
(No. of
spdls)
Weaving
(No. of
looms)
Fabric
Finishing
(No. of
Stenters)
Garmenting
(Pcs./month)
Unit-I 69964 (Ring) 124 -
Unit-II
(BFL)
49224 (Ring)
576 (Airjet) - - -
Unit-Worsted 14400
Unit BJF 82*
Unit BTM 6
Unit-Made-up's 12,500
Garment Unit
(Daman)-Trousers 125,000
Garment Unit 10,000
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(Daman)-Jackets
Garment Unit Surat
(SEZ)- - - 100,000
Products
Yarn:
company specialize in producing blends of viscose staple fibre, polyester staple
fibre, acrylic staple fibre, lycra, cotton, linen and wool. company have a total
production capacity of 30,000 tones of yarn per annum. It includes 28,000 tones
polyester blended dyed yarns and 2000 tones wool mix yarn per annum. The
Company also specializes in producing various type of fancy spun yarns. 90% of
our production consists of fibre-dyed yarns only. Company is one of the largest
single mill setup producing spun fibre-dyed yarns in Asia.
Fabrics:
company produce Hi-Quality Hi- Performance Textile wear finished fabric for both
domestic and Exports. company have high qualified, skilled and dedicated
Technical team where we produce textile fabrics from fibre stage to yarn,
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weaving, finishing and Garmenting .
Specialty in textile include:
» Stretch fabrics. WE ARE “LYCRA ASSURED and Accredited”
» Specialty finishes for touch (Stain, Wrinkle, Moisture Management etc.)
» Fire Retardant Fabric.
» Fabric Design and Development innovations.
» Continuous innovation in plants and machineries
Motivation, Training & Development of staff at all required level.
Continuous up gradation of technology
At present, we manufacture the following fabrics for men's & women's wear and
home textile furnishing fabrics in various blends such as:
Mono, Bi-stretch and Rigid fabrics in the following blends:
A : Worsted Spun Polyester/Wool
B : 100% Wool Specialties
C : 100% Viscose
D : Polyester / Viscose
E : Polyester/Modal
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F : Polyester/Viscose/Lycra
G : Polyester/Viscose/Cotton
H : Polyester/Wool
I : Polyester/Wool/Lycra
J : Upholstery and Technical Fabric
Readymade garments and home textile:
Banswara Garments is located in Daman and SEZ Surat. The garment units are a
specialized in Trousers and Jackets production. It makes the offering of Banswara
complete textile vertical. Our team will take you right from conceiving an idea for
fabric to the final product ready to wear in the least possible lead-time.
Fire retardant fabric:
Company is pleased to introduce itself as leading manufacturer of Permanent
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Inherent Fire Retardant Fabric. The fabrics can be fabricated as Curtains,
Upholstery, Drapes, Wall Paneling, Cushion Covers, Sheets and as Lining for
Tents.
These fabrics are used for furnishing of Auditoriums, Multiplexes, Cinema Halls,
Hotels, Railway Coaches, Airlines, Ships & Cruise and Luxury Buses & Coaches.
Permanent Inherent Fire Retardant Fabrics doesn't allow the fire to spread and
thus minimize the risk of fire and its hazards. The Inherent property makes the fire
retardancy permanent in the fabric i.e. the property doesn't diminish with usage
and washes
FOCUS OF THE PROJECT
The project is structured for the purpose of getting good insight of Ratio Analysis,
Capital Structure and Cost of Capital, theory and its implication. The Project
focuses on different Ratios and its analysis, Cost of Different Component of
Capital and Optimal Capital Structure for Minimizing the Cost and Risk. It also
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discusses the different sources of funds, different approaches of cost of capital.
The project is being made as a part of summer training and gives good
insight of the topic covered under it.
OBJECTIVE OF THE STUDY
1. To get a good insight of the textile industry.
2. To understand the theory of capital and its implication in business
structure.
3. To know about the various sources of funds in the company.
4. To find out the cost of various components of capital and how to minimize
it.
RESEARCH METHODOLOGY
The research methodology was subdivided and performed in the following
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method-
analyzing relevant figures and date for the last financial years.
Analyzing the future outlook of the companies and its expansion
plan.
Study of the complete process of the uses of Cost of Capital using
literature and discussing with the organizational guide.
Connection of the data regarding the use of Cost of Capital and
financial policies for banswara syntax ltd..
On the basis of the data collected, necessary suggestions regarding
the financial structure are given.
DATA SOURCNG
While performing this project both Secondary Data sources were use.
1 Secondary Data:-
Major source of data for the project were the pass years’ financial statement
It included information provided by the company workers. I adopted a
holistic approach and toiled to collect the information about the company other
than banswara syntax through secondary sources such as internet, newspaper,
magazines, papers , online data basis ect..
Cost of capital
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The main objective of a business firm is to maximize the wealth of its
shareholders in the long-run, the Management Should only invest in those
projects which give a return in excess of cost of fund invested in the project of the
business. The difficulty will arise in determination of cost of funds, if is raised from
different sources and different quantum. The various sources of funds to the
company are in the form of equity and debt. The cost of capital is the rate of
return the company has to pay to various suppliers of fund in the company. There
are main two sources of capital for a company – shareholder and lender. The cost
of equity and cost of debt are the rate of return that need to be offered to those
two groups of suppliers of the capital in order to attract funds from them.
The primary function of every financial manager is to arrange
adequate capital for the firm. A business firm can raise capital from various
sources such as equity and or preference shares, debentures, retain earning etc.
This capital is invested in different projects of the firm for generating revenue. On
the other hand, it is necessary for the firm to pay a minimum return to each
source of capital. Therefore, each project must earn so much of the income that a
minimum return can be paid to these sources or supplier of capital. What should
be this minimum return? The concept used to determine this minimum return is
called Cost of Capital. On the basis of it the management evaluates alternative
sources of finance and selects the optimal one. In this chapter, concepts and
implications of firms cast of capital, determination of cast of difference sources of
capital and overall cost of capital are being discussed
Concept of cost of capital
Cost of capital is the measurement of the sacrifice made by
investors in order to invest with a view to get a fair return in future on his
investments as a reward for the postponement of his present needs. On the other
hand form the point of view of the firm using the capital, cast of capital is the price
paid to the investor for the use of capital provided by him. Thus, cost of capital is
reward for the use of capital. Author Lutz has called it “BORROWING AND
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LANDING RATES”. The borrowing rates means the rate of interest which must be
paid to obtained and use the capital. Similarly, landing rate is the rate at which the
firm discounts its profits. It may also the opportunity cost of the funds to the firm
i.e. what the firm would earn by investing these funds elsewhere. In practice the
borrowing rates used indicate the cost of capital in preference to landing rates.
Technically and Operationally, the cost of capital define as the minimum
rate of return a firm must earn on its investment in order to satisfy investors and to
maintain its market value. I.e. it is the investors required rate of return. Cost of
capital also refers to the discount rate which is used while determining the present
value of estimated future cash flows. In the other word of John J. Hampton, “The cost of capital is the rate of return in the firm requires from investment in order to increase the value of firm in the market place”. For example if a firm
borrows Rs. 5 crore at an interest of 11% P.A., then the cost of capital is 11%.
Hear it’s the essential for the firm to invest these Rs. 5 Crore in such a way that it
earn at least Rs. 55 lacks i.e. rate of return at 11%. If the return less than this,
then the rate of dividend which the share holder are receiving till now will go down
resulting in a decline in its market value thus the cost of capital is the reward for
the use capital. Solomon Ezra, has called “It the minimum required rate of return
or the cut of rate for capital expenditure.”
Features of cost of capital
It is not a cost in reality the cost of capital is not a cost as such, but its rate of
return which it requires on the projects.
Minimum rate of return
Cost of capital is the minimum rate of return a firm is required in order to maintain
the market value of its equity shares
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Rewards for risk
Cost of capital is the reward for the business and financial risk. Business risks is
the measurement of variability in profits due to changes in sales, while financial
risks depends on the capital structure i.e. that equity mix of the firm.
Significance of concept of cost of capital
The cost of capital is very important concept in the financial decision making. The
progressive management always likes to consider the cost of capital while taking
financial decisions as it’s very relevant in the following spheres...
1. Designing the capital structure: the cost of capital is the significant factor in
designing a balanced an optimal capital structure of a firm. While designing
it, the management has to consider the objective of maximizing the value
of the firm and minimizing cost of capita. I comparing the various specific
costs of different sources of capital, the financial manager can select the
best and the most economical source of finance and can designed a sound
and balanced capital structure.
2. Capital budgeting decisions: the cost of capital sources as a very useful
tool in the process of making capital budgeting decisions. Acceptance or
rejection of any investment proposal depends upon the cost of capital. A
proposal shall not be accepted till its rate of return is greater than the cost
of capital. In various methods of discounted cash flows of capital
budgeting, cost of capital measured the financial performance and
determines acceptability of all investment proposals by discounting the
cash flows.
3. Comparative study of sources of financing: there are various sources of
financing a project. Out of these, which source should be used at a
particular point of time is to be decided by comparing cost of different
sources of financing. The source which bears the minimum cost of capital
would be selected. Although cost of capital is an important factor in such
decisions, but equally important are the considerations of retaining control
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and of avoiding risks.
4. Evaluations of financial performance of top management: cost of capital
can be used to evaluate the financial performance of the top executives.
Such as evaluations can be done by comparing actual profitability of the
project undertaken with the actual cost of capital of funds raise o finance
the project. If the actual profitability of the project is more than the actual
cost of capital, the performance can be evaluated as satisfactory.
5. Knowledge of firms expected income and inherent risks: investors can
know the firms expected income and risks inherent there in by cost of
capital. If a firms cost of capital is high, it means the firms present rate of
earnings is less, risk is more and capital structure is imbalanced, in such
situations, investors expect higher rate of return.
6. Financing and Dividend Decisions: the concept of capital can be
conveniently employed as a tool in making other important financial
decisions. On the basis, decisions can be taken regarding dividend policy,
capitalization of profits and selections of sources of working capital.
Classification of cost of capital
1. Historical Cost and future CostHistorical Cost represents the cost which has already been incurred for financing
a project. It is calculated on the basis of the past data. Future cost refers to the
expected cost of funds to be raised for financing a project. Historical costs help in
predicting the future costs and provide an evaluation of the past performance
when compared with standard costs. In financial decisions future costs are more
relevant than historical costs.
2. Specific Costs and Composite CostSpecific costs refer to the cost of a specific source of capital such as equity share.
Preference share, debenture, retain earnings etc. Composite cost of capital refers
to the combined cost of various sources of finance. In other words, it is a
weighted average cost of capita. It is also termed as ‘overall costs of capital’.
While evaluating a capital expenditure proposal, the composite cost of capital
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should be as an acceptance/ rejection criterion. When capital from more than one
source is employed in the business, it is the composite cost which should be
considered for decision-making and not the specific cost. But where capital from
only one source is employed in the business, the specific cost of those sources of
capital alone must be considered.
3. Average Cost and Marginal Cost
Average cost of capital refers to the weighted average cost of capital calculated
on the basis of cost of each source of capital and weights are assigned to the
ratio of their share to total capital funds. Marginal cost of capital may be defined
as the ‘Cost of obtaining another rupee of new capital.’ When a firm raises
additional capital from only one sources (not different sources), than marginal
cost is the specific or explicit cost. Marginal cost is considered more important in
capital budgeting and financing decisions. Marginal cost tends to increase
proportionately as the amount of debt increase.
4.Explicit Cost and Implicit Cost
Explicit cost refers to the discount rate which equates the present value of cash
outflows or value of investment. Thus, the explicit cost of capital is the internal
rate of return which a firm pays for procuring the finances. If a firm takes interest
free loan, its explicit cost will be zero percent as no cash outflow in the form of
interest are involved. On the other hand, the implicit cost represents the rate of
return which can be earned by investing the funds in the alternative investments.
In other words, the opportunity cost of the funds is the implicit cost. Port field has
defined the implicit cost as “the rate of return with the best investment opportunity
for the firm and its shareholders that will be forgone if the project presently under
consideration by the firm were accepted.” Thus implicit cost arises only when
funds are invested somewhere, otherwise not. For example, the implicit cost of
retained earnings is the rate of return which the shareholder could have earn by
investing these funds, if the company would have distributed these earning to
them as dividends. Therefore, explicit cost will arise only when funds are raised
whereas implicit cost arises when they are used.
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Assumption of Cost of Capital
While computing the cost of capital, the following assumptions are made:
The cost can be either explicit or implicit.
The financial and business risks are not affected by investing in new
investment proposals.
The firm’s capital structure remains unchanged.
Cost of each source of capital is determined on an after tax basis.
Costs of previously obtained capital are not relevant for computing the cost
of capital to be raised from specific source.
Computation of specific cost
A firm can raise funds from different sources such as loan, equity shares,
preference shares, retained earnings etc. All these sources are called
components of capital. The cost of capital of these different sources is called
specific cost of capital. Computation of specific cost of capital helps in
determining the overall cost of capital for the firm and in evaluating the decision to
raise funds from a particular source. The computation procedure of specific costs
is explained in the pages that follow
COST OF DEBT CAPITAL
Cost of Debt is the effective rate that a company pays on its current debt. This
can be measured in either before- or after-tax returns; however, because interest
expense is deductible, the after-tax cost is seen most often. This is one part of the
company's capital structure, which also includes the cost of equity.
Much theoretical work characterizes the choice between debt and equity, in a
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trade-off context: Firms choose their optimal debt ratio by balancing the benefits
and costs. Traditionally, tax savings that occur because interest is deductible
while equity payout is not have been modeled as a primary benefit of debt. Large
firms with tangible assets and few growth options tend to use a relatively large
amount of debt. Firms with high corporate tax rates also tend to have higher debt
ratios and use more debt incrementally. A company will use various bonds, loans
and other forms of debt, so this measure is useful for giving an idea as to the
overall rate being paid by the company to use debt financing. The measure can
also give investors an idea as to the riskiness of the company compared to
others, because riskier companies generally have a higher cost of debt.
Example-: If a company issues 12% debentures worth Rs. 5 lacs of Rs. 100 each
at par, then it must be earn at least Rs.60000(12% of Rs. 5 lacs) per year on this
investment to maintain the income available to the shareholders unchanged. If the
company earnings were less than this interest rate (12%) than the income
available to the shareholders will be reduced and the market value of the share
will go down. Therefore, the cost of debt capital is the contractual interest rate
adjusted further for the tax liability of the firm. But, to know the real cost of debt,
the relation of the interest rate is to be established with the actual amount realized
or net proceeds from the issue of debentures.
To get the after-tax rate, you simply multiply the before-tax rate by one minus the
marginal tax rate.
Cost of Debt = (before-tax rate x (1-marginal tax))
The before tax rate of interest can be calculated as below:
Interest Expense of the company = ---------------------------------------- * 100
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Total Debt
Net Proceeds:
1. At par = Par value – Floatation cost
2. At premium = Par value + Premium – Floatation cost
3. At Discount = Par value – Discount – Floatation cost
COST OF PREFERENCE SHARE CAPITAL
Preference share is another source of Capital for a company. Preference Shares
are the shares that have a preferential right over the dividends of the company
over the common shares. A preference shareholder enjoys priority in terms of
repayment vis-à-vis equity shares in case a company goes into liquidation.
Preference shareholders, however, do not have ownership rights in the company.
In the companies under observation only India Cement has preference shares
issued.
Cost of Preference Capital = Preference Dividend/Market Value of Preference
COST OF EQUITY SHARE CAPITAL
The computation of cost of equity share capital is relatively difficult because
neither the rate of dividend is predetermined nor the payment of dividend is
legally binding, therefore, some financial experts hold the opinion the p.s capital
does not carry any cost but this is not true. When additional equity shares are
issued, the new equity share holders get propionate share in future dividend and
undistributed profits of the company. If reduces the earning per shares of existing
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share holders resulting in a fall in marker price of shares. Therefore, at the time of
issue of new equity shares, it is the duty of the management to see that the
company must earn at least so much income that the market price of its existing
share remains unchanged. This expected minimum rate of return is the cast o
equity share capital. Thus, cost of equity share capital may be define as the
minimum rate of return that a firm must earn on the equity financed portion of a
investment- project in order to leave unchanged the market price of its shares.
The cost of equity can be computed by any of the following method:
1.Dividend yield method:
Ke = DPS\mP*100
Ke= cost of equity capital
Dps= current cash dividend per share
Mp=current market price per share
2.Earning yield method:
Ke= EPS\mp*100
Eps= earnings per share
1. Dividend yield plus growth in dividend method :
While computing cost of capital under dividend yield (d\p ratio) method, it had
been assumed that present rate of dividend will remain the same in future also.
But, if the management estimates that company’s present dividend will increased
continuously for the year to come, then adjustment for this increase is essential to
compute the cost of capital.
The growth rate in dividend is assumed to be equal to the growth rate in earning
per share. For example if the EPS increase at the rate of 10% per year, the DPS
27
and market price per share would show an increase at the rate of 10%. Therefore,
under this method, cost of equity capital is computed by adjusting the present rate
of dividend on the basis of expected future increase in company’s earning.
Ke= DPS\MP*100+G
G= Growth rate in dividend.
2. Realized yield method :
In case where future dividend and market price are uncertain, it is very difficult to
estimate the rate of return on investment. In order to overcome this difficulty, the
average rate of return actually realizes in the past few years by the investors is
used to determine the cost of capital. Under this method, the realized yield is
discounted at the present value factor, and then compare with value of investment
this method is based on these assumptions.
The company’s risk does not change i.e. dividend and growth rate are stable.
The alternative investment opportunities, elsewhere for the investor, yield the
return which is equal to realized yield in the company, and the market of equity
share of the company does not fluctuate widely.
Cost of newly issued equity shares
when new equity share are issued by a company, it is not possible to realise the
market price per share, because the company has to incur some expenses on
new issue, including underwriting commission, brokerage etc. so, the amount of
net proceeds is calculated by deducting the issue expenses form the expected
market value or issue price. To ascertain the cost of capital, dividend per share or
EPS is divided by the amount of net proceeds. Any of the following formulae may
be used for this purpose:
28
Ke= DPS\NP*100
Or
Ke= EPS\NP*100
Or
Ke=DPS\NP*100+G
COST OF RETAIN EARNINGS OR INTERNAL EQUITY
Generally, companies do not distribute the entire profits by way of dividend
among their share holders. A part of such profit is retained for future expansion
and development. Thus year by year, companies create sufficient fund for the
financing through internal sources. But, neither the company pays any cost nor
incurs any expenditure for such funds. Therefore, it is assumed to cost free
capital that is not true. Though retain earnings like retained earnings like equity
funds have no explicit cost but do have opportunity cost. The opportunity cost of
retained earnings is the income forgone by the share holders. It is equal to the
income what a share holders could have earns otherwise by investing the same in
an alternative investment, If the company would have distributed the earnings by
way of dividend instead of retaining in the business. Therefore, every share
holders expects from the company that much of income on retained earnings for
which he is deprived of the income arising o its alternative investment. Thus,
income forgone or sacrificed is the cost of retain earnings which the share holders
expects from the company.
WEIGHTED AVERAGE COST OF CAPITAL
Once the specific cost of capital of the long-term sources i.e. the debt, the
preference share capital, the equity share capital and the retained earnings have
been ascertained, the next step is to calculate the overall cost of capital of the
firm. The capital raised from various sources is invested in different projects. The
29
profitability of these projects is evaluated by comparing the expected rate of
return with overall cost of capital of the firm. The overall cost of capital is the
weighted average of the costs of the various sources of the funds, weights being
the proportion of each sources of funds in the total capital structure. Thus,
weighted average as the name implies, is an average of the cost of specific sources of capital employed in the business properly weighted by the proportion they held in firm’s capital structure. It is also termed as ‘Composite
Cost of Capital’ or ‘Overall Cost of Capital’ or ‘Average Cost of Capital’.
WEIGHTED AVERAGE, How to calculate?
Though, the concept of weighted average cost of capital is very simple. Yet there
are many problems in its calculation. Its computation requires:
1.Assignment of Weights :
First of all, weights have to be assigned to each source of capital for calculating
the weighted average cost of capital. Weight can be either ‘book value weight’ or
‘market value weight’. Book value weights are the relative proportion of various
sources of capital to the total capital structure of a firm. The book value weight
can be easily calculated by taking the relevant information from the capital
structure as given in the balance sheet of the firm. Market value weights may be
calculated on the basic on the market value of different sources of capital i.e. the
proportion of each source at its market value. In order to calculate the market
value weights, the firm has to find out the current market price of each security in
each category. Theoretically, the use of market value weights for calculating the
weighted average cost of capital is more appealing due to the following reasons:
The market values of securities are closely approximate to the actual
amount to be received from the proceeds of such securities.
The cost of each specific source of finance is calculated according to the
prevailing market price.
But, the assignment of the weight on the basic of market value is operationally
30
inconvenient as the market value of securities may frequently fluctuate. Moreover,
sometimes, no market value is available for the particular type of security,
especially in case of retained earnings can indirectly be estimated by Gitman’s method. According to him, retained earnings are treated as equity capital for
calculating cost of specific sources of funds. The market value of equity share
may be considered as the combined market value of both equity shares and
retained earnings or individual market value (equity shares and retained earnings)
may also be determined by allocating each of percentage share of the total
market value to their respective percentage share of the total values.
2.Computation of Specific Cost of Each Source :After assigning the weight; specific costs of each source of capital, as explained
earlier, are to be calculated. In financial decisions, all costs are ‘after tax’ costs.
Therefore, if any source has ‘before tax’ cost, it has to be converted in to ‘after
tax’ cost.
3.Computation of Weighted Cost of Capital :
After ascertaining the weights and cost of each source of capital, the weighted
average cost is calculated by multiplying the cost of each source by its
appropriate weights and weighted cost of all the sources is added. This total of
weighted costs is the weighted average cost of capital. The following formula may
be used for this purpose:
Kw = ∑XW/∑W
Here; Kw = Weighted average cost of capital
X = after tax cost of different sources of capital
W = Weights assigned to a particular source of capital
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MERITS OF WEIGHTED AVERAGE COST OF CAPITAL
The WACC is widely used approach in determining the required return on a firm’s
investments. It offers a number of advantages including the followings-
1. Straight forward and logical: It is the straightforward and logical
approach to a difficult problem. It depicts the overall cost of capital as the
some of the cost of the individual components of the capital structure. It
employs a direct and reasonable methodology and is easily calculated and
understood.
2. Responsiveness to Changing Condition: Since, it is based upon
individual debt and equity components; the weighted average cost of
capital reflects each element in the capital structure. Small changes in the
capital structure of the firm will be noted by small changes in overall cost of
capital of the firm.
3. Accurate when Profits are Normal: During the period of normal profits,
the weighted average cost of capital is more accurate as a cut-off rate in
selecting the capital budgeting proposals. It is because the weighted
average cost recognizes the relatively low debt cost and the need to
continue to achieve the higher return on the equity financed assets.
4. Ideal Creation for Capital Expenditure Proposals: With the help of
weighted average cost of capital, the finance manager decides the cut-off
rate for taking decisions relating to capital expenditure proposals. This cut-
off rate determines the minimum limit for accepting an investment
proposal. If an investment proposal is accepted below this limit, the firm
incur a loss. Therefore, this cut-off rate is always decided above the
weighted average cost of capital.
LIMITATION OF WEIGHTED AVERAGE COST OF CAPITAL
The weighted Average cost approach also has some weaknesses, important
among them are as follows:
1. Unsuitable in case of Excessive Low-cost Debts: Short term loan can
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represent important sources of fund for firm experiencing financial
difficulties. When a firm relies on Zero cost (in the form of payables) or low
cost short term debt, the inclusion of such debts in the calculation of cost of
capital will result in a low WACC. If the firm accepts low-return projects on
the basic of this low WACC, the firm will be in a high financing risk.
2. Unsuitable in Case of Low Profits : If a firm is experiencing a period of
low profits, not earning profit as compared to other firms in the industry,
WACC will be inaccurate and of limited value.
3. Difficulty in Assigning Weights: The main difficulty in calculating the
WACC is to assign weight to different components of capital structure.
Normally, there are two type of weights- (i) book value weights and (ii)
market value weight. These two type of weights give different results.
Hence, the problem is which type of weight should be assigned. Though,
market value is more appropriate than book value, but the market value of
each component of capital of a company is not readily available. When the
securities of the company are unlisted, the problem becomes more
intricate.
4. Selection of Capital Structure: The selection of capital structure to be
used for determining the WACC is also not easy job. Three types of capital
structure are there i.e. current capital structure, marginal capital structure
and optimal capital structure. Which of these capital structures is selected?
Generally, current capital structure is regarded as the optimal structure, but
it is not always correct.
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Ratio Analysis
Ratio Analysis is widely used tool of financial analysis. It can be used to compare
the risk and return relationship of firm of different sizes. It is defined as the
systematic use of ratio to interpret the financial statements so that the strengths
and the weaknesses of a firm as well as its historical performance and current
financial condition can be determined. The term ratio refers to the numerical and
quantitative relationship between two variables. The relationship can be
expressed as (a) percentage, (b) fraction, (c) proportion of numbers. These
alternative methods of expressing items which are related to each other are, for
purpose of financial analysis, referred to as Ratio Analysis. It should be noted that
computing the ratio does not add any information, what the ratio do is that they
reveal the relationship in a more meaningful way so as to enable equity investors,
management and lenders make better investment and credit decisions.
The rationale of ratio analysis of lies in the fact that it makes related information
comparable. A single figure by itself has no meaning but when expressed in terms
of a related figure, it yields significant interferences.
Types of Ratios-
Accounting Ratio may be classified in a number of ways keeping in view the
purpose of study. However, for the sake of convenience and simplicity ratios may
be classified as follow:
1. Profitability Ratio- Gross Profit Ratio, Net profit Ratio, Operating Ratio,
Return on shareholders’ investment
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2. Turnover or activity Ratio-Stock Turnover Ratio, Debtors turnover Ratio,
Creditors Turnover Ratio, Working Capital Turnover Ratio.
3. Liquidity Ratio-Current Ratio, Liquid Ratio
4. Long term Solvency Ratio
Type of Ratio Analysis:
1. Inter Firm Ratio Analysis
2. Intra Firm Ratio Analysis
Inter firm Ratio Analysis:
Current Ratio:
Ideal Ratio: - 2:1
Formula: - Current Assets/Current Liabilities
This ratio shows the ability of a business firm to meet its’ Current obligations as
and when they become due.
A relatively high current ratio is an indication that the firm is liquid and has the
ability to pay its current obligations in time and when they become due. On the
other hand, a relatively low current ratio represents that the liquidity position of the
firm is not good and the firm shall not be able to pay its current liabilities in time
without facing difficulties.
Return on shareholders’ investment:
Formula: - Net Profit after interest and taxes * 100/Share holders’ fund
This ratio is also called as ’Return on net worth’ Ratio. Return on equity reveals
how much profit a company earned in comparison to the total amount of
shareholder equity found on the balance sheet. A business that has a high return
35
on equity is more likely to be one that is capable of generating cash internally.
Return on equity (ROE) is one of the most important indicators of a firm’s
profitability and potential growth. Companies that boast a high return on equity
with little or no debt are able to grow without large capital expenditures, allowing
the owners of the business to withdrawal cash and reinvest it elsewhere. Many
investors fail to realize, however, that two companies can have the same return
on equity, yet one can be a much better business.
Debt-Equity Ratio-
Formula: -Outsides Funds/Shareholders’ fund
This ratio is concerned with establishing the relationship between external and
internal long-term financing. The use of long-term debt in the capital structure has
both advantages and disadvantages. Main advantage of debt is that it provides an
opportunity for greater returns to shareholders. On the other hand use of debt is a
risky mode because it leads to the following problems (1) a growing risk of
bankruptcy; (2) lack of access to the capital markets during times of tight credit.
A high debt/equity ratio generally means that a company has been aggressive in
financing its growth with debt. This can result in volatile earnings as a result of the
additional interest expense. The debt/equity ratio also depends on the industry in
which the company operates. For example, capital-intensive industries such as
auto manufacturing tend to have a debt/equity ratio above 2, while personal
computer companies have a debt/equity of under 0.5.
Basic Earnings per Share-
Formula: -Net profit-pref. share dividend/No. of shares issued
Basic Earnings per share (Basic EPS) tells an investor how much of the
company's profit belongs to each share of stock. It measures the profit available
to the equity shareholders on a per share basis that is the amount that they can
get on every share held.
36
An important aspect of EPS that's often ignored is the capital that is required to
generate the earnings (net income) in the calculation. Two companies could
generate the same EPS number, but one could do so with less equity
(investment) - that company would be more efficient at using its capital to
generate income and, all other things being equal would be a "better" company.
Net Profit Ratio:
Formula: - Net Profit after interest and taxes * 100/Net sales
NP ratio is used to measure the overall profitability and hence it is very useful to
proprietors. The ratio is very useful as if the net profit is not sufficient, the firm
shall not be able to achieve a satisfactory return on its investment.
Higher the ratio the better is the profitability. But while interpreting the ratio it
should be kept in minds that the performance of profits also is seen in relation to
investments or capital of the firm and not only in relation to sales.
Quick Ratio:
Formula: - Liquid Assets/Current Liabilities
Liquid Assets - Current Assets-(Inventory + Prepaid expenses)
This ratio is very useful in measuring the liquidity position of a firm. It is used as a
complementary ratio to the current ratio. Liquid ratio is more rigorous test of
liquidity than the current ratio because it eliminates inventories and prepaid
expenses as a part of current assets.
A high liquid ratio is an indication that the firm is liquid and has the ability to meet
its current or liquid liabilities in time and on the other hand a low liquidity ratio
represents that the firm's liquidity position is not good.
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Inventory Turnover (Days):
Formula:-365 * Inventory/Net sales
By Inventory Turnover days we can estimate how many days worth of inventory is
on hand. The lower inventory turnover days are beneficial for the organization.
Debtors Turnover (Days):
Formula:-365 * Debtors/Net sales
Debtor’s turnover days are also known as average collection period. The average
collection period ratio represents the average number of days for which a firm has
to wait before its debtors are converted into cash.
This ratio measures the quality of debtors. A short collection period implies
Consistent payment by debtors. It reduces the chances of bad debts. Similarly, a
longer collection period implies too liberal and inefficient credit collection
performance. It is difficult to provide a standard collection period of debtors.
Working Capital Turnover Ratio:
Formula: - Sales/Working Capital
This ratio indicates the number of times working capital is rotated in the course of
a year. The working capital turnover ratio measures the efficiency with which the
working capital is being used by a firm. A high ratio indicates efficient utilization of
working capital and a low ratio indicates inefficiency. The firm must strategically
plan for a targeted range of current assets and plan for their financing
Operating Ratio:
38
Formula: - operating cost * 100/Net sales
Operating ratio shows the operational efficiency of the business. Lower operating
ratio shows higher operating profit and vice versa. An operating ratio ranging
between 75% and 80% is generally considered as standard for manufacturing co.
Intra firm Ratio analysis:
Net Profit Ratio:
Formula: - Net Profit after interest and taxes * 100/Net sales
NP ratio is used to measure the overall profitability and hence it is very useful to
proprietors. The ratio is very useful as if the net profit is not sufficient, the firm
shall not be able to achieve a satisfactory return on its investment.
Operating Ratio:
Formula: - operating cost * 100/Net sales
Operating ratio shows the operational efficiency of the business. Lower operating
ratio shows higher operating profit and vice versa. An operating ratio ranging
between 75% and 80% is generally considered as standard for manufacturing
concerns.
Operating profit Margin Ratio
Formula: - Gross Profit * 100/Net sales
The operating profit margin shows the adequacy of selling price & efficiency of
trading activities. Operating profit margin ratio may be indicated to what extent the
selling prices of goods per unit may be reduced without incurring losses on
operations. It reflects efficiency with which a firm produces its products. As the
operating Profit is found by deducting cost of goods sold from net sales, higher
the operating profit margin better it is
39
Return on shareholders’ investment:
Formula: - Net Profit after interest and taxes * 100/Share holders’ fund
This ratio is also called as ’Return on net worth’ Ratio. Return on equity reveals
how much profit a company earned in comparison to the total amount of
shareholder equity found on the balance sheet. A business that has a high return
on equity is more likely to be one that is capable of generating cash internally.
Return on equity (ROE) is one of the most important indicators of a firm’s
profitability and potential growth. Companies that boast a high return on equity
with little or no debt are able to grow without large capital expenditures, allowing
the owners of the business to withdrawal cash and reinvest it elsewhere. Many
investors fail to realize, however, that two companies can have the same return
on equity, yet one can be a much better business.
Inventory Turnover (Days):
Formula:-365 * Inventory/Net sales
By Inventory Turnover days we can estimate how many days worth of inventory is
on hand. Too much inventory means paying for storage, possible waste or theft,
and the opportunity cost that the time and space used to hold onto inventory that
remains unsold could have been used instead to buy products that would sell.
Having too little inventory, on the other hand, could lead to shortages and
possibly missed sales opportunities.
Debtors Turnover (Days):
Formula:-365 * Debtors/Net sales
Debtor’s turnover days are also known as average collection period. The average
collection period ratio represents the average number of days for which a firm has
40
to wait before its debtors are converted into cash.
Creditors Turnover (Days):
Formula: - Creditors * 365/credit purchase
The average payment period represent the average number of days taken by the
firm to pay its creditors. Generally lower the period the better is the liquidity
position of the firm and higher the period, less liquid position of the firm.
Working Capital Turnover Ratio:
Formula: - Sales/Working Capital
This ratio indicates the number of times working capital is rotated in the course of
a year. The working capital turnover ratio measures the efficiency with which the
working capital is being used by a firm. A high ratio indicates efficient utilization of
working capital and a low ratio indicates inefficiency.
Current Ratio:
Formula: - Current Assets/Current Liabilities
Ideal Ratio: - 2:1
This ratio shows the ability of a business firm to meet its’ Current obligations as
and when they become due.
A relatively high current ratio is an indication that the firm is liquid and has the
ability to pay its current obligations in time and when they become due. On the
other hand, a relatively low current ratio represents that the liquidity position of the
firm is not good and the firm shall not be able to pay its current liabilities in time
without facing difficulties.
41
Quick Ratio:
Formula: - Liquid Assets/Current Liabilities
Liquid Assets - Current Assets-(Inventory + Prepaid expenses)
Ideal ratio: - 1:1
This ratio is very useful in measuring the liquidity position of a firm. It is used as a
complementary ratio to the current ratio. Liquid ratio is more rigorous test of
liquidity than the current ratio because it eliminates inventories and prepaid
expenses as a part of current assets.
A high liquid ratio is an indication that the firm is liquid and has the ability to meet
its current or liquid liabilities in time and on the other hand a low liquidity ratio
represents that the firm's liquidity position is not good
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RECOMMENDATION
1. The liquidity ratio of a company is not ideal so the company has to
increase their liquidity for meeting day to day transaction.
2. Leverage ratio shows that company is more dependent on internal equity
which is not good for a company in a long term so the company is to make
a proper blending of debt & equity.
3. Advertising strategies should be revised. More focus should be given on
publicity and awareness among customer should be there.
4. A price ofBSL’S products is much higher than other competitor’s brands
and this lead to very less margin of profit for retailers. To prevent this type
of problem company should provide more margins of profit & incentives to
defer it.
43
5. The main & lucrative factor may for bsl’s is contracted , relation will create
a smooth flow of sales for shree bsl. So they should make more frequent in
contractor’s meeting.
6. We often see that retailers would like to sale only that product in which he
gains more profit, so we should give a good margin of profit to retailer.
7. In sales promotion activity, we should focus on counter meeting,
contractor’s meeting & retailer meeting, in which we can give some gifts
and refreshments to contractor,dealer and retailers.
8. They should offer some other material and other incentives to push the
confidence in bsl’s dealers and contractor.
9. Literature can be provided to stockiest and retailers. This written material
will also help them to advertise and promote the product.
10.The major problem faced by the retailers is great transparency in prices so
company should make a policy for stability in prices at every stockiest.
11. Company should also provide more technical services, so they can visit
every site & solve the customer’s problem.
44
LIMITATION
1 No direct access to company data.
2 Time constraint
3 Lack of expertise in the required area \
4 The circumstances vary with project to project so methodology
discussed and suggested by me may not be the only to appraise the
project.
5 The forecasting methods are also not completely reliable as the past
trend may not continue
45
BALANCE SHEET
AS AT 31ST MARCH 2010
(Rupees in lacs)
As at As at
Schedule 31st march 2010 31st march 2009
Sources of funds
Shareholder’s funds
Share capital 1 1,481.14 1,481.14
46
Share application money 169.13
Reserves & surplus 2 10,130.84 11,781.11
7,622.37 9,103.51
Deferred tax liability 2,722.61
2,192.93
Loan funds
Secured loans 3 42,424.36
35,405.57
Unsecured loans 4 1,741.91 44 ,166.27 1,451.52 36,857.09
58,669.99
48,153.53
Application of funds
Fixed assets 5
Gross block 51,067.44 46,886.02
Less: depreciation 17,261.60
14,439.87
Net block 33,805.84
32,446.15
Add: capital work in progress 827.69 263.28
Add: advance on capital account 1,621.96 36,255.49
47
380.13 33,089.56
Investments 6 667.13
663.29
Current assets, loans and advances
Inventories 7 17,668.17
12,131.20
Sundry debtors 8 6,154.45
5,585.31
Cash & bank balances 9 506.76
626.30
Other current assets , and 10 2,575.77
2,223.72
Loans & advances 11 1,775.25
1,721.94
28,680.40
22,288.47
Less : current liabilities & provisions
Liabilities 12 5,578.12
6,265.21
Provisions 13 1,355.08
1,622.58
Net current assets 21,747.20
48
14,400.68
58,669.99 48,153.53
49
50
51
BIBLIOGRAPHY
1. Prasanna Chandra (1993) ‘Fundamental of Financial Management’, Tata
McGraw-Hill publishing company Ltd, third edition, pp 18.1-19.13, 21.1-
22.17.
2. Bhalla V. K.(2003) ‘Working Capital Management’, Anmol Publication, fifth
edition, pp. 1-71, 45.
3. Kothari C. R. (2005) ‘RESEARCH METHODOLOGY’ New age international
Ltd, fifth edition pp.1-2, 31, and 95.
4. Journals of banswara syntax ltd.
5. Annual Report of 2003-2008
6 Fundament of Financial management by Brigham & Huston.
7 Analysis Financial Management by Robert C. Higgins
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WEBLIOGRAPHY
http://www.hzlindia.com
http://www.google.com
http://excite.com
http://investopedia.com
http://www.investopedia.com
http://www.moneypore.com
http://www.moneycontrol.com
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