term paper of accounts

8/8/2019 TERM PAPER of Accounts

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TERM PAPER

MGT515

ONIDA

COMPANY

SUBMITTED TO: SUBMITTED BY:

Mrs. Manu Kalia Manpreet Kaur Hundal

Lovely School of 11003503

Management S1003A06

MBA I SEM


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ACKNOWLEDGEMENT

First of all I would like to thank the Lovely Professional University to give me this opportunityto do this project as a part of the M.B.A.

Many people have influenced the shape and content of this project, and many supported methrough it. I express my sincere thanks to Prof. Manu Kalia for assigning me a project on

ANALYSIS OF FINANCIAL STATEMENTS OF ONIDA COMPANY. She has been aninspirational and role model for this topic. Her guidance and support has made it possible to

complete the assignment.

I would like to thank the Almighty for always helping me.

Manpreet Kaur Hundal


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CONTENTS

1 Introduction of company

2 Companys History

3 Companys profile

4 Board of Directors

5 Various Innovations which also includes various products

6 Objectives of the study

7 Comparative statements

8 Common size statements

9 Trend Analysis

10 Ratio Analysis

11 Fund flow statements

12 Cash flow statements

13Cost analysis


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INTRODUCTION OF COMPANY

Onida was started by G.L. Mirchandani and Vijay Mansukhani in 1981 in Mumbai. In 1982,

Onida started assembling television sets at their factory in Andheri, Mumbai. Since then, Onidahas evolved into a multi-product company in the consumer durables and appliances sector. Onida

achieved a 100% growth in ACs and microwave ovens and a 40% growth in washing machineslast year. ONIDA came out with the famous caption "Neighbour's envy, Owner's Pride", another

popular theme of the ads was a devil complete with horns and tail. The devil was replaced by amarried couple- Siddharth and Ritu.

Onida Today

Onida is a popular electronics brand in India. Onida has a network of 33 branch offices, 208

Customer Relation Centers and 41 depots spread across India. As on 31 March 2005, Onida hada market capitalization of Rs.301.46 crore.

Mirc Electronics won an Award for Excellence in Electronics in 1999, from the Ministry ofInformation Technology, Government of India.

[7]

Onida with its Sales & Marketing office in Dubai reported a 215 per cent export growth in two

years, setting the base for an increased robust international presence.

The shipments to the Gulf contribute almost 65 per cent of Onida's export revenue, whileshipments to the fast growing East African market (Uganda, Tanzania, Kenya and Ethiopia) andthe SAARC countries accounted for 16 per cent of export revenues.

Home Theatres and DVD players have been introduced in these markets to strengthen the Onida

brand presence. These products have customized models with local language user interfaces inline with its geographies of focus. Onida models are now available with Arabic, Persian and

Russian OSD (menu).

In addition to the Gulf countries ONIDA has now a sizeable presence in Russia, Ukraine andneighboring CIS countries. ONIDA has already crossed 100000 mark in CTV exports to Russia

in a span of just 2 years and plans to grow in these markets at a much faster pace.

Apart from Television Exports to Russia, Onida also exports DVD Players and High end LCD

Televisions.


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Network

Onida has a network of 33 branch offices, 208 Customer Relation Centers and 41 depots spread

across India. MIRC Electronics shares are listed on the National and Mumbai Stock Exchanges.

The company enjoyed a market capitalization of Rs.301.46 Cr. as on 31st March 2005.

The transition of Onida from a family-owned business to a professionally managed company has

largely been made possible by the vision of the Chairman & Managing Director,

Mr.G.L.Mirchandani.

Company History

To think of the future, you need to think of your past

It all began with just a vision. In the year of 1981, Mr. GL Mirchandani and Mr. VijayMansukhani started a company called Onida with just a goal of manufacturing television sets and

going beyond convention. By the end of that year, we started assembling television sets at ourfactory in Andheri, Mumbai. With the passage of time, superior products and the combination of

a distinctive voice, a cutting-edge advertising strategy, and purposeful marketing ensured thatOnida became a household name.

It wasnt about consumer electronics. It was always about the consumer.

What really sets Onida distinct from others are that we have always tried to pave our own roadand create a niche by understanding what exactly does the consumer need.

Company Profile of Onida Ltd.

CHIEF EXECUTIVE

Chief Executive Name Mr. Sonu L Mirchandani

Secretary Name Mr. Avneesh Chopra

Face Value 10

Market Lot 1

Business Group Name Onida Group

Incorporation Date 26/02/1987

Industry Name Consumer Goods Electronic

Registrar of Company Not Available


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Board of Directors

Name Designation

Mr. Sonu L Mirchandani Managing Director

Mr. Sunil K Sharma Director

Mr. Nalinikant Mohanty DirectorMr. Manmohan Agarwal Director

Key Executives

Name Designation

Mr. S R Pereira V P [F and As]

Mr. Avneesh Chopra Company Secretary

Mr. R K Nayyar Vice President [Operations]

Board of Directors of ONIDA Company

Mr. G. L. Mirchandani

Mr. Vijay Mansukhani

Mr. Manoj Maheshwari

Mr. Vimal Bhandari

Mr Ranjan Kapur


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Some of the innovations that surprised the world.

After having established a reputation for being an intelligent and pioneering innovator in theapplication of technologies: we were the first to launch the Web cruiser TV, the worlds first

built-in Internet TV which offers the benefits of a personal computer and a TV, and that too,

equipped with a a modem, printer port and a cordless keyboard with it; the first to launch theultimate in Flat TV technology with Onida Black with a high picture clarity with DVMC whichensures uniform scanning at the centre and corners of the TV screen.

Again, the Onida Twister was the first TV that turned to face the viewer; we were the first tointroduce SRS technology for surround sound in Audioport. In 1999, we were the first to

introduce the pure flat TV in the country. The Candy was the first instance of any brandproviding a multi-coloured cabinet option to its customers.

The common perception was that we were a focused TV manufacturer. But then with a knack for

spotting a gap in the market, we realized that there were undiscovered needs and wants in other

categories of consumer durables as well. So we recognized latent synergies which enabled us toprovide customers with a wider range of products under the ONIDA brand.

Washing Machines:

In 2003-04 we launched the washing machine with Hydrofall technology which addressed theneed of having a more powerful cleaning system. Then we realized that people still used their

hands for cleaning so we launched the Triomatic technology which gives the perfect hand wash.Then we realized that people still keep bending to wash clothes so we launched a washing

machine with a higher and wider vent so you dont have to bend.

Air conditioners:

With the soaring summer heat, we saw a need for an AC with powerful cooling. And in additiondue to the raising electricity consumption, the need for energy efficiency as well. Hence, the

thought of an ultra slim powerful AC with unique APM cooling technology that cools even at48oc and is the most energy efficient in the country which constantly keeps your electricity bills

in check.

DVDs:

With todays technology boom, theres a need for a single multimedia interface as most people

now download movies, music and click pictures through mobiles. Hence the need for USB andcard reader. We also saw that most DVDs are rented hence are scratched. Which is why, wedeveloped a DVD player with USB and Card Reader which also play scratched discs effortlessly.


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Microwave Ovens:

We saw that people used Microwave primarily to heat food and not to cook. We also noticed that

its difficult to cook food in a microwave. Especially Indian food. So to make cooking simplerwe introduced 123 Indian auto cook menus. So all you need to make Indian dishes is a finger.

We later gave it a sleek, black look with a mirror finish so that it looks stunning too.

LCDs:

What began as a TV became the window to the future. With the advent of televisionsincreasing popularity, there were many players with a wide foray of our models. To make

matters interesting, there were several foreign players with technology that seemed futuristic andwith a sleek look. However we mainly focused on picture clarity. So instead of just aping what

the offering was, we asked ourselves, Why not give a complete audio / video experience athome as well? And the result was obvious: Our CTV had up to 3500 Watts of sound. This was

our first milestone which others followed. However, this held true twenty years later as well.

LCD technology came in, in a bigger way. Onida once again took the onus to remind everyone,that sound is equally important to complete the viewing experience. So we made our Xaria withmore than twice the sound output of other LCDs in the market.

Then later on, we got onto its drawing board a pseudo home theatre with a 5.1 amplifier system

and 1000-watt PMPO speakers, thereby putting a theatres soul inside a TVs body.

We took the future by its horns and went on to make Indias first fully developed indigenizedXaria LCD with more than twice the sound output of other LCDs in the market.

Mobiles:

With the cell phone market already heavily penetrated, there was a need for a mobile that could

stand apart. So what we sought to do was make every single Onida Mobile do so much morethan what an ordinary cell phone does. So the moment you turn it on, you would realize that its

fully-loaded. So many features. So many things. And so easy. But all these features are there in itfor a reason. All of them to help you do better, enjoy better, listen better, work better or simply

talk better.


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Products

Onida brand has following range of products.

1. LCD TVs2. Plasma TVs3. Televisions4. DVD and Home Theater Systems5. Air Conditioners6. Washing machines7. Microwave Ovens8. Presentation Products9. Inverters10.Mobile Phones

OBJECTIVES OF STUDY

1 To analyze the financial position of the company.

2 To compare the financial reports of the company.

3 To know the goodwill of the company.

4 To solve common size of the years.

5 To know the cost used in the manufacturing product.

6 To analyze the fund and cash inflow and outflow.

7 Ratios of the company helps in knowing the strengths and weaknesses of the company

8 Trend analyses also helps in knowing the position of the company.


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An effort has been made to check the overall financial position of the company by using thefollowing financial instruments:

1. Ratio analysis

2. Comparative statements

3. Common size statements

4. Trend analysis

5. Cost analysis

6. Cash flow analysis

7. Fund flow analysis

An explanation to these financial instruments is as below:

1. RATIO ANALYSISRatio analysis is a tool used by individuals to conduct a quantitative analysis of information in a

company's financial statements. Ratios are calculated from current year numbers and are then

compared to previous years, other companies, the industry, or even the economy to judge the

performance of the company.

2. COMPARATIVE STATEMENTStatement on which balance sheets, income statements, or statements of changes in

financial position are assembled side by side for review purposes. In this type of

statement changes that have occurred in individual categories from year to year and over

the years are easily noted.

3. COMMON SIZE STATEMENT


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It is the companys financial statement that displays all items as percentages of a common

base figure. This type of financial statement allows for easy analysis between

companies or between time periods of a company.

4. TREND ANALYSISThe term "trend analysis" refers to the concept of collecting information and attempting

to spot a pattern, or trend, in the information. It usually gives an idea of companys

upward or downward growth.

5. COST ANALYSISThis analysis is based on knowing the cost element of the company. To compare the

actual cost with that of the estimated one, the analysis is of great help.

6. CASH FLOW ANALYSISIt is a financial statement that shows how changes in balance sheet accounts and income

affect cash and cash equivalents, and divides the analysis into operating, investing, and

financing activities. Essentially, the cash flow statement is concerned with the flow of

cash in and cash out of the business.

7. FUND FLOW ANALYSISThe term flow means inflow and outflow. The term flow of funds means transfer of

economic values from one asset of equity to another. Flow of fund occurs when a

transaction changes on the one hand with movement of inflow and on the other hand

outflows of funds.

For interpreting the fund flow statement of the company the two things which are studied

are:

1. Sources of funds2. Application of funds


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RESEARCH METHODOLOGY

The secondary data is used in the research which comprises of:

1. Balance sheet of ONIDA limited.2. Income statement of the company.

PERIOD OF STUDY

Data of two years that is year ending 31st

December 2008 and 31st

December 2009 has

been taken into consideration for making out the financial comparisons related to the

study.

Comparative financial statement or analysis: -

It is an important horizontal Technique in which financial data of two or more period (year) are

presented in a comparative from.

a) A comparative income statement show the comparison of various items of cost ,expensesand final the result in form of net profit and net loss.

Percent change =absolute change /figure of the previous year *100

b) A comparative balance sheet reveals the position of assets and liabilities on two or moredifferent data along with changes in these items.


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Common size statement or analysis:-

Common size financial statement facilities both of analysis i.e.; horizontal as well as vertical.

This statement indicates the relationship of various items in terms of percentage with somecommon or basis items .it expressed the net sale in term of percentage.

Trend analysis:-

This analysis is an important tool of horizontal financial analysis .under this method ratio are

calculated for selected items of the financial statement taking the figure of the base year as 100

and for this purpose the following formula may be used

Trend ratio =current year amount /base year amount *100

Ratio analysis:-

Ratio analysis is also an important method of analysis of financial statement .it is adopted to

establish meaningful mathematical relation between two items or two group of items show in

financial statement.

Fund flow statement:-

Financial statement can also be analyzed by preparing fund flow statement and in that case it is

known as fund flow analysis .This statement is prepared in order to reveal the source from which

funds are obtained the uses to which they are being put. Here fund stand for working capital.

Cash flow statement:-

This technique is very useful in the management of cash and analysis of short term liquidity

.under this method a statement is prepared to show the inflow and outflow of cash related to

various activities in the concern during a specific period.


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BALANCE SHEET FOR THE YR.2008-09 AND 2009-10

PARTICULARS

2008-

09

2009-

10

Sources of funds

Equity sharecapital 6.7 14.19

Share capital suspense a/c 26.4 30.14

Reserves and Surplus 239.47 241.5

Net worth 272.57 255.69

Unsecured loans 130.33 76.38

secured loans 74.89 57.27

Total loans 205.22 133.65Deferred tax liability 15.51 15.53

Total liabilities 493.3 404.87

Application of funds

Gross block 354.93 405.93

Depreciation 171.42 191.15

Net block 183.51 214.78

Capital WIP 25.55 0.29

Net block+CWIP 209.06 215.07

Investment 26.78 40.14

Deferred tax liability

Current assets

Inventories 210.41 249

Debtors 106.81 87.76

cash and bank balance 9.3 27.64Loans and

advances 95.84 112.67Total current

assets 422.36 477.07

Current liabilities

Liabilities 155.14 309.47

Provisions 9.76 17.94

Total current liabilities 164.9 327.41

net current assets 257.46 149.66

Total assets 493.3 404.87


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PROFIT AND LOSS ACCOUNT

Particulars

2008-

09

2009-

10

Sales 1517.72 1568.35

Excise 87.29 66.37

Net sales 1430.43 1501.98

Service income

other income 4.18 3.02

Total income 1434.61 1505

material consumed 553.83 535.99

Cost of traded goods sold 561.96 619.81

Personnel expenses 67.15 75.41

Freight and forwardedexpense 53.3 51.26

Advertising expenses 51.86 74.35

Other expenses 89.32 88.41

total cost 1377.42 1445.23

PBDIT 57.19 59.77

Interest 28.49 17.35

PBDT 28.7 42.42


PBT 10.15 22.65Tax 1.2 4.28

PAT 8.95 18.37

Equity Divident 5.68 13.46

Preference Divident 0.67 0.51

Yr. end prices 8.98 16.35

Net capital 127.52 231.76

EPS 0.58 1.25


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COMPARATIVE

BALANCE

SHEET

PARTICULARS

2008-

09 2009-10 CHANGE %

Sources of funds

Equity share capital 6.7 14.19 7.49 111.79

Share capital suspense a/c 26.4 30.14 3.74 14.16

Reserves and Surplus 239.47 241.5 2.03 0.84

Net worth 272.57 255.69 -16.88 -6.19

Unsecured loans 130.33 76.38 -17.62 -23.52

secured loans 74.89 57.27 -53.95 -41.39

Total loans 205.22 133.65 -71.57 -34.87

Deferred tax liability 15.51 15.53 0.02 0.128

Total liabilities 493.3 404.87 -88.43 -7.92


Gross block 354.93 405.93 51 14.36

Depreciation 171.42 191.15 19.73 11.5

Net block 183.51 214.78 31.27 17.03

Capital WIP 25.55 0.29 -25.26 -98.8

Net block+CWIP 209.06 215.07 6.01 2.87

Investment 26.78 40.14 13.36 49.88


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Current assets

Inventories 210.41 249 38.59 18.34

Debtors 106.81 87.76 -19.05 -17.8

cash and bank balance 9.3 27.64 18.34 197.2

Loans and advances 95.84 112.67 16.83 17.56

Total current assets 422.36 477.07 54.71 12.95

Current liabilities

Liabilities 155.14 309.47 154.33 99.47

Provisions 9.76 17.94 8.18 83.8

Total current liabilities 164.9 327.41 162.51 98.55

net current assets 257.46 149.66 -107.8 -41.8

Total assets 493.3 404.87 -88.43 -17.9

INTERPRETATION:

ONIDA company comparative balance sheet statement shows that there is a much change in

equity share capital which is by 111.79% and equity share suspense account is also increasing

by14.19% reducing, reserves and surplus has increased only by few percent that is just .89%. Net

worth, secured and unsecured loans has decreased. These all are the sources of the company but

when these sources decrease, it affects the total income or earning of the company. There are

many applications of funds; it means the company has to pay these amounts. Net block of Onida

Company has increased by 17.03% and capital work in progress has decreased. Investments has

increased by49.88%. Current assets and current liabilities also show the financial position of the

company.


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COMPARATIVE INCOME

STATEMENT FOR THE

YEAR 2009 AND 2010

Particulars 2008-09 2009-10 Change %

Sales 1517.72 50.63 3.33

Excise 87.29 66.37 -20.92 -23.96

Net sales 1430.43 1501.98 71.55

Service income

other income 4.18 3.02 -1.16 -27.75

Total income 1434.61 1505 70.39 4.9

material consumed 553.83 535.99 -17.84 -3.22

Cost of traded goods sold 561.96 619.81 57.85 10.29

Personnel expenses 67.15 75.41 8.26 12.3

Freight and forwarded expense 53.3 51.26 -2.04 -3.82

Advertising expenses 51.86 74.35 22.49 43.36

Other expenses 89.32 88.41 -0.91 -1.01

total cost 1377.42 1445.23 67.81 4.92

PBDIT 57.19 59.77 2.58 4.51

Interest 28.49 17.35 -11.14 -39.1

PBDT 28.7 42.42 13.72 47.8

Depreciation 18.55 19.77 1.22 6.5

PBT 10.15 22.65 12.5 123.15

Tax 1.2 4.28 3.08 256.67

PAT 8.95 18.37 9.42 105.25

Equity Divident 5.68 13.46 7.78 136.97

Preference Divident 0.67 0.51 -0.16 23.88

Yr. end prices 8.98 16.35 7.37 82.07

Net capital 127.52 231.76 104.24 81

EPS 0.58 1.25 0.67 115.5

INTERPRETATION: ONIDA company income statement shows that there is only a few

change in sales which is by 3.33% and excise tax is reducing which is a benefit to the company,total income has increased which helps in increasing the assets of the company by 4.9%,

material consumed has decreased and cost of traded goods sold has increased as it helps inincreasing the sales and to generate more revenue. Personnel expenses and advertising expenses

has increased which creates a liability for the company, freight and forwarded expenses and


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other expenses has decreased as it automatically helps to reduce the liability. Net capital of thecompany has increased and helps to increase the assets of the company.

COMMON SIZE PROFIT AND LOSS ACCOUNT

Particulars

2008-

09 %

Sales 1517.72 100

Excise 87.29 5.75

Net sales 1430.43 94.24

Service income

other income 4.18 0.27

Total income 1434.61 94.52



Personnel expenses 67.15 4.42Freight and forwarded

expense 53.3 3.51



total cost 1377.42 90.75

PBDIT 57.19 3.768

Interest 28.49 1.87

PBDT 28.7 1.89

Depreciation 18.55 1.22PBT 10.15 0.668

Tax 1.2 0.079

PAT 8.95 0.589





EPS 0.58 0.038

INTERPRETATION: ONIDA company common size statement shows that the companys

sales is 100% and the net sales is 94.24% and total income is 94.52%, these helps to create more

revenue. Advertising and other expenses are just 3.42% and 5.88% are helping to reduce theliability of the company.Depreciation is also very less, it is 1.22% as it means that the assets of

the company are very much beneficial to the company.


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COMMON SIZE PROFIT AND LOSS ACCOUNT FOR THE YR 2009-10

Particulars

2009-

10 %

Sales 1568.35 100

Excise 66.37 4.23

Net sales 1501.98 95.76

Service income

other income 3.02 0.19Total income 1505 95.96



Personnel expenses 75.41 4.8




total cost 1445.23 92.14

PBDIT 59.77 3.81Interest 17.35 1.1

PBDT 42.42 2.7


PBT 22.65 1.44

Tax 4.28 0.27

PAT 18.37 1.17





EPS 1.25 0.079

INTERPRETATION: ONIDA company common size statement of the year 2009-10 showsthat the companys sales is 100% and the net sales is 94.76% and is more than the previous year

which is 94.24% and total income is 95.96% and is more than previous year which is 94.52%,these helps to create or generate more revenue. Advertising and other expenses are just


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4.74%and 5.63% are helping to reduce the liability of the company.Depreciation is also veryless, it is 1.26% but it is little more than the previous year which is 1.22% but that the assets of

the company are very much beneficial to the company.

COMMON SIZE BALANCE SHEET

2008-09

PARTICULARS 2008-09 %

Sources of funds

Equity share capital 6.7 1.017928

Share capital suspensea/c 26.4 10.25402


Net worth 272.57 159.0071



Total loans 205.22 98.16321

Deferred tax liability 15.51 57.91636

Total liabilities 493.3


Gross block 354.93Depreciation 171.42 81.46951

Net block 183.51 171.8098

Capital WIP 25.55 274.7312



Current assets

Inventories 210.41 0.309508

Debtors 106.81 0.216521

cash and bank balance 9.3 0.059946

Loans and advances 95.84 9.819672

Total current assets 422.36 2.56131

Current liabilities 0





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Total assets 493.3 0.725633

INTERPRETATION: ONIDA companys common size balance sheet shows that there is very

low equity share capital but the share capital suspence account is very much more than equityshare capital but these both are our assets. Reserves and surplus are 28.23% and net worth is159.007% , secured loans are 293.115%, deferred tax liability is 57.91% , these all are

companys sources and is having a greater % of common size statement. These all are thesources of funds because the company earn from these.Investment, capital work in progress , net

block all are the applications of companys and helps to increase the assets of the company.Current assets and liabilities also shows the position of the company.


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COMMON SIZE

STATEMENT OF

BALANCE SHEET

PARTICULARS 2009-10 %

Sources of fundsEquity share capital 14.19 0.019378Share capital suspense

a/c 30.14 0.20139


Net worth 255.69 1.337641



Total loans 133.65 0.621426

Deferred tax liability 15.53 0.386896

Total liabilities 404.87 0.55289


Gross block 405.93 0.460269


Net block 214.78 0.694025

Capital WIP 0.29 0.016165




Current assets

Inventories 249 0.282332Debtors 87.76 0.140028

cash and bank balance 27.64 0.089314

Loans and advances 112.67 6.280379

Total current assets 477.07 1.457103

Current liabilities





Total assets 404.87 0.459068

INTERPRETATION: ONIDA companys common size balance sheet shows that there is very

low equity share capital and the share capital suspence account is also very much low than equityshare capital but these both are our sources. Reserves and surplus are .2975% and net worth is

1.337% , secured loans are 197.48%, deferred tax liability is .38% , these all are companyssources and is having a less % of common size statement. These all are the sources of funds, the


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company earn from these. but the companys current year liabilities are low than the previousyear so it is beneficial to the company that it has less liabilities. Investment, capital work in

progress , net block all are the applications of company and helps to increase the assets of thecompany. Current assets and liabilities also shows the position of the company


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TREND ANALYSIS OF PROFIT AND LOSS

ACCOUNT

Particulars 2008-09

2009-

10 %

Sales 1517.72 1568.35 103.3359Excise 87.29 66.37 76.03391

Net sales 1430.43 1501.98 105.002

Service income

other income 4.18 3.02 72.2488

Total income 1434.61 1505 104.9066

material consumed 553.83 535.99 96.77879

Cost of traded goods sold 561.96 619.81 110.2943

Personnel expenses 67.15 75.41 112.3008

Freight and forwardedexpense 53.3 51.26 96.17261

Advertising expenses 51.86 74.35 143.3668

Other expenses 89.32 88.41 98.98119

total cost 1377.42 1445.23 104.923

PBDIT 57.19 59.77 104.5113

Interest 28.49 17.35 60.89856

PBDT 28.7 42.42 147.8049

Depreciation 18.55 19.77 106.5768

PBT 10.15 22.65 223.1527

Tax 1.2 4.28 356.6667

PAT 8.95 18.37 205.2514

Equity Divident 5.68 13.46 236.9718Preference Divident 0.67 0.51 76.1194

Yr. end prices 8.98 16.35 182.0713

Net capital 127.52 231.76 181.744

EPS 0.58 1.25 215.5172

INTERPRETATION: ONIDA company trend analysis of income statement shows that the

companys sales has increased by 103.33% and excise reduces to 76.03%, the other income hasalso reduced to 72.24%, total income has increased to 104.9%. Material consumed has decreased

but cost of traded goods has increased which increases the liability of the company. Personneland advertising expenses has increased by 112.3% and 143.3% and freight and forwarded

expenses has reduced to some extent.Total cost has increased by104.92%, tax is also a liabilityfor the company because the company has to pay the tax, the tax has increased by 356.67%.

Earning per share has increased which creates an assets for the company. Preference divident hasalso reduced, it means that the company has to pay less interest to the debentureholders.


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TREND ANALYSIS OF BALANCE SHEET

PARTICULARS

2008-

09

2009-

10 %Sources of fundsEquity share

capital 6.7 14.19 211.79104

Share capital suspense a/c 26.4 30.14 114.16667

Reserves and Surplus 239.47 241.5 100.84771

Net worth 272.57 255.69 93.807095

Unsecured loans 130.33 76.38 58.605079

secured loans 74.89 57.27 76.472159

Total loans 205.22 133.65 65.125231

Deferred tax liability 15.51 15.53 100.12895

Total liabilities 493.3 404.87 82.073789


Gross block 354.93 405.93 114.36903

Depreciation 171.42 191.15 111.50974

Net block 183.51 214.78 117.03994

Capital WIP 25.55 0.29 1.1350294

Net block+CWIP 209.06 215.07 102.87477

Investment 26.78 40.14 149.88798

Current assetsInventories 210.41 249 118.34038

Debtors 106.81 87.76 82.164591

cash and bank balance 9.3 27.64 297.2043

Loans andadvances 95.84 112.67 117.56052

Total currentassets 422.36 477.07 112.9534

Current liabilities

liabilities 155.14 309.47 199.47789

Provisions 9.76 17.94 183.81148Total current liabilities 164.9 327.41 198.55064

net current assets 257.46 149.66 58.129418

Total assets 493.3 404.87 82.073789


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INTERPRETATION : ONIDA company trend analysis shows that the company is havinghigh % of equity share capital than share capital suspence account. Reserves and surplus have

93.8%and net worth is 58.6%. Secured and unsecured loans is also having a high % of trendanalysis of balance sheet.The company earn from these as these are the sources of the funds as

the company is earning from these.Deferred tax liability is just the same, it has just increased

with certain points.Applications of funds includes investment, capital work in progress, net block,gross block.


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RATIOS

MEANING OF ACCOUNTING RATIO:

A ratio is a mathematical relationship between two related items expressed in quantitative form.

Two numbers are needed to calculate a Ratio. One number is put as a numerator and the other asa denominator. Ratio refers to relationship between two variables expressed in either percentage

or in multiples or in periods. Ratio helps in analyzing the financial performance of firm. The

performance of the firm can be gauged from four angles

1. Profitability2. Liquidity3. Asset Efficiency4. Solvency

The overall performance of firm is a function of these factors and we can say that profitability

depends upon liquidity and liquidity depends upon efficient utilization of asset, which is

managed only through well formulated capital structure.

OBJECTIVES OF RATIO ANALYSIS

1 Helps in identification of significant accounting data relationship

2 Simplifies financial statements

3 Helps in planning and forecasting

4 Helps in simplifying accounting figures

5 Helps in Inter-firm comparison

6 Helps the investor to evaluate their investment

7 Helps the marketing manager to evaluate the sale and return from it

CLASSIFICATION OF RATIOS

The particular purpose of a user is determining the particular ratios that might be used forfinancial analysis. Ratios are generally classifieds are as under:

1 LIQUIDITY RATIOS

Current ratio

Quick ratio


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Absolute liquid ratio

2 PROFITABILITY RATIOS

Gross Profit Ratio

Net Profit Ratio

Operating Ratio

Return on Investment

Return on Equity

Earning per share

3 TURNOVER/ACTIVITY/EFFICIENCY RATIOS

Inventory Turnover Ratio

Debtors Turnover Ratio

Creditors Turnover Ratio

4 SOLVENCY RATIOS

Debt to equity ratio

Interest Coverage Ratio

LIQUIDITY RATIOS: The liquidity refers to the maintenance of cash, bank balance and those

assets which are easily convertible into cash in order to meet the current liabilities as and when

arise.

1 CURRENT RATIO: The current ratio measures short time solvency, i.e., its ability to meet

short term obligations. A current ratio represents short term assets which are just sufficient to

meet short term obligations.


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Current ratio = current assets/current liability

2008-09 2009-10

=422.36/164.90 =477.07/327.41

=2.56 =1.45

INTERPRETATOIN:- The current ratio measure the short term solvency . Current ratio 2:1 is

considered an ideal ratio. Higher ratio in, more than 2:1 indicates sound solvency position. In thisthe company current assets in the year 2008-09 are sufficient to meet its current liability but in

the current year Onida company assets are not able to meet its current liability

2 QUICK RATIO: It is a relationship of liquid assets with current liabilities and is computed to

assets which are either in the form of cash or cash equivalents or can be converted into cash

within a very short period.

Quick ratio = quick assets/current liability

Quick assets =current assts except inventory and prepaid expenses

2008-09 2009-10

=211.95/164.90 =228.07/327.41

=1.28 =.69

INTERPRETATION:- It is true test of business solvency. Higher ratio more than 1:1 indicates

sound financial position. So in year 2010 company does not having sound financial position in

year 2010 in which company had very less quick ratio but in the past year the company has

sufficient quick assets to meet its current liabilities.

3 ABSOLUTE LIQUID RATIO: It is also known as Cash Ratio. The ratio gives the idea of

immediate liquidity

Absolute liquid ratio = absolute liquid asset/current liability


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2008-09 2009-10

=105.14/164.9 =140.31/327.41

=.63 =.428

Interpretation: - When the company has a .5:1 absolute liquid ratio, it means company has

enough liquid assets to meet its all current liability. But from above ratio it is clear that company

does not have enough absolute liquid assets to meet its current liability in the current year.

PROFITABILITY RATIO: The profitability of the firm can be easily measured by

1. GROSS PROFIT RATIO: It is used to test the profitability and management efficiency.

The higher the ratio the better it is.

Gross profit ratio= gross profit/net sales*100

2008-09 2009-10

=225.32/1430.43*100 =257.77/1501.98*100

=15.75% =17%

Interpretation: Higher Gross profit ratio always preferable and the company is having a 17%

profit in the current gross profit ratio. The company is in a very good position from the previous

year.

2. NET PROFIT RATIO: This ratio indicates the net results of the working of the company

during the period and reveals the overall profitability of the concern.

Net profit ratio= net profit/ net sales*100

2008-09 2009-10

=57.19/1430.43*100 =59.77/1501.98*100

=3.99% =3.97%


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Interpretation: It is the ratio which is use to measure overall profitability. The companys net

profit ratio is very less than the previous year, which shows that company is not very much

strong.

3. OPERATING PROFIT RATIO: This ratio establishes the relationship betweenoperating profit and net sales.

Operating profit ratio= operating cost/net sales*100

2008-09 2009-10

=330.48/1430.43*100 =383.38/1501.98*100

=23% =25.5%

Interpretation: It tells us about the relationship between total operating cost and sales. It tells

us about the operational efficiency of the firm. Higher operating ratio indicates that company had

incurred high operating cost.

4. RETURN ON INVESTMENT: This ratio expresses the relationship between net profit and

shareholders fund and multiplied by hundred.

Return on investment =net profit/shareholder fund*100

2008-09 2009-10

=57.19/272.57*100 =59.77/255.69*100

=20.98% =23.37%

Interpretation: High return on shareholders funds means company has enough profit after tax

which is available for distribution as dividends to shareholders. Here the company has just

sufficient returns so, thats why return on shareholders funds is not so much.


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5 RETURN ON EQUITY: The return from the point of view of equity shareholders can be

calculated by comparing by comparing the net profit less preference dividend with the equity

share funds.

Return on equity=net profit-preference dividend/equity share funds*100

2008-09 2009-10

=56.52/272.57*100 =59.26/255.69*100

=20.7% =23.17%

Interpretation: Higher the ratio implies, the efficient use of capital employed. Return on

investment of the company is satisfactory and is more than the previous year .

6 Earning per share: It is calculated as:

Earning per share =net profit-preference dividend/no. of equity shares

2008-09 2009-10

=56.52/33.1 =59.26/44.33

=1.70 =1.336

Interpretation : The earning per share is very less from the previous year.

TURNOVER/ACTIVITY/EFFICIENCY RATIOS: Activity ratios are concerned with how

efficiently the assets of the firm are managed

1 INVENTORY TURNOVER RATIO: This ratio indicates the number of times inventory orstock is replaced during the year.

Inventory turnover ratio=net sales/average stock

2008-09 2009-10

=1430.43/553.83 =1501.98/535.99


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=2.58 times =2.80 times

Inventory conversion period=number of days in a year\inventory turnover ratio

=365/2.58 =365/2.8

=141 days =130 days

Interpretation: Stock turnover ratio measure how quickly inventory is sold. This ratio helps in

measuring profitability. Due to high stock ratio company had enough profit.

2 DEBTORS TURNOVER RATIO: It represents the number of times the cash is collectedfrom debtors.

Debtor turnover ratio=net credit sales/average debtors

2008-09 2009-10

=1430.43/106.81 =1501.98/87.76

=13.39 times =17.1 times

Average collection period=number of days In a year/debtor turnover ratio

2008-09 2009-10

=365/13.39 =365/17.1

=27 days =21 days

Interpretation: Debtors turnover ratio is a benefit for the company, as it an asset for the

company because debtors have to pay to the company.


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3 CREDITORS TURNOVER RATIO: It represents the number of times average dues to

supplier is settled. Higher the turnover ratio, lower the payment period granted by supplier.

Creditor turnover ratio=net credit purchase/average creditors

Interpretation: The Company is in a good position that it does not have any creditors

SOLVENCY RATIOS: It indicates the long term solvency position of the company.

1 DEBT-EQUITY RATIO: This ratio develops relationship between owned funds and

borrowed funds.

Debt quity ratio =debt/equity

2008-09 2009-10

=205.22/272.57 =133.65/255.69

=.75 =.52

Interpretation: High debt equity ratio shows that the debts are higher than those of owners. A

high ratio is unfavorable from company point of view. A low ratio implies claim of owners are

greater than the debts. It shows the good position of the company that the company has more

equity than debts.

2 INTEREST COVERAGE RATIO: This ratio shows how many times interest charges are

covered by net profit before interest and taxes.

Interest coverage ratio=earning before interest and taxes/ interest charges

2008-09 2009-10

=57.19/28.49 =59.77/17.35

=2.00 =3.44


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Interpretation: It refers to the capacity of the business to meet its short term and long term

obligation. If the company is in position to pay its long term liabilities, it is said to possess long

term solvency. If company financial position strong to pay current liability, it is regarded as short

term solvency.


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FUND FLOW

STATEMENT

1 SCHEDULE OF

CHANGE IN WORKING

CAPITAL

PARTICULARS

2008-

09

2009-

10 INCREASE DECREASE

Current Assets

Inventories 210.41 249 38.59

Debtors 106.81 87.76 19.05

cash and bank balance 9.3 27.64 18.34loans and

advances 95.84 112.67 16.83

Total currentassets 422.36 477.07

Current

liabilities

Liabilities 155.14 309.47 154.33

Provisions 9.76 17.94 8.18

Total of current liabilities

164.9 327.41

WC=CA-CL 257.46 149.66 107.8

107.8

Decrease in WC 257.46 257.46 181.56 181.56

2 Calculation of funds from operations

2009-10

Net profit 59.77

Add depreciation 19.77

Interest 17.35

Tax 4.28

funds fromoperations 101.17


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fund flow statement

sources of funds application of funds

issue of share 7.49 payment of secured loan 17.62

reseves and surplus 2.03payment of unsecuredloans 53.95

Deferred tax liability 0.02 capital WIP 25.26

gross block 51 net worth 16.88

Investment 13.36 funds from operations 101.17dec in

wc 107.8

total 216.71 total 216.71

INTERPRETATION: ONIDA Companysfund flow statement shows that the companys cash

balance, inventories and loans and advances has increased from the previous year, its debtorshas decreased from the previous but the companys total current assets increased it shows the

company is in a good position. The companys current liabilities has increased from the previous.So by solving the companys schedule of change in working capital, the company is having

decrease in working capital which is 107.8. The companys calculation of funds from operationsshows the amount of 101.17 and the company is having various sources and applications of

funds. The total of sources and applications stands equals to 216.71.


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CASH FLOW STATEMENT FOR THE YEAR 2010 AND 2009

31-Mar-10

31-

Mar-09

Cash flow from operating activities

Net profit before tax and extra items 2265.06 1015.57

adjustment for depreciation 1977.15 1855.17unrealised foreign exchange fluctuation -242.8 541.52

(value of investment -29.86 23.92

interest expense 1735.23 2848.88

interest income -172.22 -83.17

divident income 25.32 5.02

loss on sale of fixed asset 0.05 2.97

operating profit before WC changes 5507.29 6199.84

adjustments for:

trade and other receivables 583.07 196.11Inventories -3858.41 8215.59

trade payables 15327.4 9243.95

cash generated from operations 17559.35 4975.37

direct taxes paid/refund received -427.98 -128.29

net cash used in operating activities 17131.37 4847.08

cash from investing activities

payments for purchase of fixed assets -5105.98 -1237.6 purchase of investment -1306.03 101.85

proceeds from sale of fixed assets 1.63 1.81

movements of capital advances 2525.33-2360.75

interest received 172.22 83.17

divident received 25.33 5.02

net cash used in investing activities -3687.51 -3610.2

net cash for financing activities

issue of equity shares 0.02

issue/redemption of preference shares -1891.51 1891.51

amalgamation adjustment -210.4

movements in term loans -8000 2392

movements in short term loans 843.03-1826.51

interest paid -1759.96 -


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2864.56

divident paid -801.26-1634.76

net cash used in financing activities -11609.68

-

2252.72

net inc/dec in cash and cash equivalents 1834.18-1015.84

cash and cash equivalent as1.1.2009 930.21 1946.05

cash and cash equivalent as at 31.3.2010 2764.39 930.21

INTERPRETATION: ONIDA company cash flow statement shows that the companys net

profit has increased from the previous year, interest expense has decreased which is a benefit tothe company as it helps to reduce the liability but the interest income has negatively increased

which automatically increases the liability of the company. Trade and other receivables hasincreased from the previous year as it helps to generate revenue for the company. Net cash used

in operating activities is very much high than the previous year. Payments for purchase of fixedassets and purchase of investment has negatively increased from the previous year. Proceeds

from sale of fixed assets has decreased which reduces the companys revenue from the previousyear.Net cash used in investing activities has negatively incrreased from the previous year. Issue

and redemption of shares has a negative impact on the financial position of the company.Divident and interest paid has negatively increased. Net cash used in financing has negatively

increased from the previous year which affects the financial position of the company.Cash andcash equivalents has positively increased.


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COST SHEET FOR THE YEAR 2009 AND

2010

Particulars 2009 2010


Prime cost 553.83 535.99


Advertising expenses 51.86 74.35Other expenses 89.32 88.41

travelling and conveyance 79.72 79.8

Cost of sales 828.03 829.01

INTERPRETATION: ONIDA company cost sheet for the year 2009 and 2010 shows that the

companys material consumed has decreased from the previous year so its prime cost is also lessthan the previous year.There are no factory and office cost of onida company so its cost of

production is as same the prime cost. Freight and forwarded expenses and other expenses hasdecreased from the previous year which helps to reduce the cost of travelling expenses. The

companys adverttising expenses has increased from the previous year.The total cost of sales ofthe company has increased to some extent only.

term paper of accounts

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