TABLE OF CONTENT

S.NO TITLE PAGE

NO

1 INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION 1

1.2 OBJECTIVE OF THE STUDY 5

1.3 NEEDS OF THE STUDY 5

1.4 STATEMENT OF PROBLEMS 5

1.5 SCOPE OF THE STUDY 5

1.6 RESEARCH METHOLOGY 6

1.7 RESEARCH DESIGN 6

1.8 METHOD OF DATA COLLECTION 6

1.9 LIMITATION OF RATIO ANALYSIS 6

2 REVIEW LITERATURE 8

3 COMPANY PROFILE 11

4 ANALYSIS AND INTERPRETATION 23

5 FINDINGS, SUGGESTIONS AND CONCLUSION 68

FINDINGS 69

SUGGESTONS 69

CONCLUSION
70

APPENDIX 71

BIBLIOGRAPHY 72

1
 LIST OF TABLES

S.NO TABLES PAGE NO

4.1 CURRENT RATIO 25

4.2 CASH POSITION RATIO 28

4.3 FIXED ASSETS RATIO 30

4.4 CAPITAL TURNOVER RAIO 32

4.5 WORKING CAPITAL RATIO 34

4.6 STOCK TURNOVER PERIOD 36

4.7 NET PROFIT RATIO 38

4.8 EXPENSION RATIO 40

4.9 GROSS PROFIT RATIO 42

4.10 STOCK TURNOVER RATIO 44

4.11 QUICK RATIO 45

4.12 TURNOVER RATIO OR ACTIVITY RATIO 47

4.13 DEBITORS TURNOVER RATIO 49

4.14 ASSET TURNOVER RATIO 51

4.15 CURRENT ASSET TURNOVER RATIO 53

4.16 PROFITABLITY RATIOS 55

4.17 DIVIDEND PAY-OUT RATIO 57

4.18 TOTAL DEBIT EQUILTY RATIO 59

4.19 ACTIVITY RATIO 61

2
 ACKNOWLDGEMENT

It is our earnest and sincere desire and ambition to acquire profound knowledge in the
study of Commerce. We are grateful to god, the almighty who has blessed us to complete this
work . It is my pleasure to acknowledge the help and guidance we had received from
different persons and to thank them individually.

I express my hearty gratitude to my internal guide Mr.V.S.VINAYAGAMOORTHY,

M.Com.,MBA., C.S(Executive) for the consent and guidance throughout my project.

I am grateful to all the Professors of the Master of Business Administration for their
suggestions and encouragement throughtout the design and development of the project.

I express my sincere thanks to parents for constantly giving us works of courage and
motivation to complete this project successfully. I would also like to thank our friends for
their guidance and assistance in the completion of the project.

Signature of the Student

(Mr. HEAMKUMAR)

Place :

Date :

3
 CHAPTER – 1
INTRODUCTION AND
DESIGN OF THE STUDY

1
 CHAPTER – 1

1.1 INTRODUCTION AND DESIGN OF THE STUDY

RATIO ANAYLSIS

DENFINITION

Ratio analysis involves the process of computing determining and presenting the
relationship of items or groups of items of financial statements.
Ratio analysis was pioneered by Alexander wall who presented a system pf ratio
analysis in the year 1909. Alexander’s contention was that interpretation of financial
statements can be made earlier by easier by establishing quantitative relationships between
various items of financial statements.

Meaning of ratio:
A ‘Ratio’ is a mathematical relationship between two items expressed in a
quantitative form.
Ratios can be defined as “Relationships expressed in quantitative terms, between
figures which have cause and effect relationship
s or which are connected with each other in some, manner or the other”.

2
STEPS IN RATIO ANALYSIS

1. Selection of relevant information: The first step in ratio analyses is to select relevant
information from financial statements and calculate appropriate ratios required for
decision under consideration.

2. Comparison of calculated ratios: In order to assess the relative meaning the ratios
calculated are compared with the past ratios and industry ratios.

3. Interpretation and reporting: The third step in ratio analysis is to interpret the
significance of various ratios. Draw inferences and to write a report. The report may
recommend specific action in the matter of the decision situation or may present
alternatives with comparative merits or it may just state the facts and interpretation.

3
ADVANTAGES OF RATIO ANALYSIS:
The information shown in financial statements does not signify
anything individually because the facts shown are inter related.
1. Forecasting: Ratios reveal the trends in cost, sales, profits and other inter-related facts,
which will be helpful in forecasting future events.
2. Managerial control: Ratios can be used as ‘instrument of control’ regarding sales, costs
and profit.
3. Facilitates communication: Ratios facilitate the communication function of management
as ratios convey the information relation to the present and future quickly, forcefully and
clearly.
4. Measuring efficiency: Ratios help to know operational efficiency by comparison of
present ratios with those the past working and also with those of other firms in the industry
5. Facilitating investment decisions: Ratios are helpful in computing return on investment.
This helps the management in exercising effective decisions regarding profitable avenues of
investment.

4
1.2. OBJECTIES OF THE STUDY

PRIMARY OBJECTIVES:
 To study the working capital management practices and to find the financial ratios
and working capital ratios.
 To compare the financial ratio with the working capital ratios.

SECONDARY OBJECTIVES
 To analyze the reasons for the variation in the ratios from 2018 - 2020.
 To study the efficiency and effective utilization of working capital in Stigmata
Techno Solutions LLP by using ratios.
 To monitor the overall trends of the ratios.
 To analyze the day- to -day financial activities

1.3 NEED OF THE STUDY

The study covers all the components of current assets and current liabilities which
play an important role in the company’s profitability.
Thus the study reveals as to how effectively the working capital used in the organization. And
where the company is standing in the market by comparing the financial ratio and financial
position of the company with the competitors in the market.

1.4 STATEMENT OF PROBLEM:

 To understand the financial performance of the organization.
 To understand the utilization of resources.
 To understand the fund management of the organization.
 vcccccTo understand the various ratios & implementation within the organization.

1.5 SCOPE OF THE STUDY

 The study covers all the components of current assets and current liabilities
for the year 2018-2020.
 The study also deals with the various ratios imparted in the organization.
 The working capital is one of the dynamic and vital aspects of the business
operation.

5
1.6 RESEARCH METHODOLOGY
Research is commonly referred as search for knowledge. It is defined as a “scientific
and systematic search for pertinent information on a specific topic”. Research is also defined
as a “systematized efforts to gain new knowledge”.
Research methodology is a way of systematically solving the research problem. It may
be understood as a science of studying how research is done scientifically. It gives the steps
that are generally adopted by a researcher in studying his research problem along with the
logic behind them.

1.7RESEARCH DESIGN
Research design is a plan structure and strategy of investigation conceived so as to
obtain answer to research question and to control variance.
A study on Ratio analysis for Blue Marine Logistics has been made to analyze the present
condition of the company and forecasts its future.

1.8METHOD OF DATA COLLECTION:

The researcher collected both primary and secondary data.

PRIMARY DATA
Personal interview and discussions held with the finance department and employees in
the respective department.

SECONDARY DATA
Since the study mainly focused on Ratio analysis the researchers had given immense
importance to collect secondary data from the company annual reports for the year 2018-
2020. Internal records and the company website is used as a secondary data. From these
sources, the researcher can gather the information and the research can be conducted
successfully.

1.9LIMITATIONS OF RATIO ANALYSIS

Ratios are precious tools in the hands of management but the utility lies
in the proper utilization of ratios.

6
1. Practical knowledge: The analyst should have thorough knowledge and experience about
the firm and industry. Otherwise his analysis and interpretation are of little practical use.

2. Ratios are means: Ratios are not an end in themselves but they are means to achieve a
particular purpose or end.

3. Inter-relationship: Ratios are inter-related and therefore a single ratio cannot convey any
meaning. It has to be interpreted with reference to other related ratios to draw meaningful
conclusions.

4. Non availability of standards or norms: Ratios will be meaningful if they can be

compared with standards or norms. Except for a few financial ratios, other lack standards
which are universally recognized.

5. Accuracy of financial information: The accuracy of a ratio depends on the accuracy of

information derived from financial statements. If the statements are inaccurate, same will be
the result with ratios.

7
CHAPTER - 2
LITERATURE
REVIEW

8
 2. LITERATURE REVIEW

Ratios are highly essential profit tools in financial analysis that help financial analysts
implement plans that improve profitability, liquidity, financial structure, reordering, leverage,
and interest coverage. Although ratios report mostly on past performances, they can be
predictive too, and provide lead indications of potential problem areas.

Ratio analysis is primarily used to compare a company's financial figures over a period of
time, a method sometimes called trend analysis. Through trend analysis, you can identify
trends, good and bad, and adjust your business practices accordingly. You can also see how
your ratios stack up against other businesses, both in and out of your industry.

There are several considerations you must be aware of when comparing ratios from one
financial period to another or when comparing the financial ratios of two or more companies

 If you are making a comparative analysis of a company's financial statements over a

certain period of time, make an appropriate allowance for any changes in accounting
policies that occurred during the same time span.

 When comparing your business with others in your industry, allow for any material
differences in accounting policies between your company and industry norms.

 When comparing ratios from various fiscal periods or companies, inquire about the
types of accounting policies used. Different accounting methods can result in a wide
variety of reported figures.

 Determine whether ratios were calculated before or after adjustments were made to
the balance sheet or income statement, such as non-recurring items and inventory or
pro forma adjustments. In many cases, these adjustments can significantly affect the
ratios.

 Carefully examine any departures from industry norms.

Ratio Analysis is a useful tool in the following aspects:

Evaluation of Liquidity: The ability of a firm to meet its short term payment commitments
is called liquidity. Current Ratio and Quick Ratio help to assets the short-term solvency
(liquidity) of the firm.

9
Evaluation of Profitability: Profitability ratios i.e. Gross Profit Ratio, Operating Profit
Ratio, Net Profit Ratio are basic indicators of the profitability of the firm. In addition, various
profitability indicators like Return on Capital Employed (ROCE), Earnings per share (EPS),
Return on Assets (ROA) etc. are used to assess the financial performance

Evaluation of Operating Efficiency: Ratios throw light on the degree of efficiency in the
management and utilization of assets and resources. These are indicated by activity or
performance or turnover ratios e.g. Stock Turnover Ratio, Debtors Turnover Ratio. These
indicate the ability of the firm to generate revenue (sales) per rupee of investment in its
assets.

Evaluation of Financial Strength: Long-term solvency strength is indicated by Capital

Structure Ratios like Debt-Equity Ratio, Gearing Ratio, Leverage Ratios etc. These ratios
signify the effect of various sources of finance e.g. debt, preference and equity. They also
show whether the firm is exposed to serious financial strain or is justified in the use of debt
fund

Inter-firm and Intra-firm comparison: Comparison of the firm’s ratios with the industry
average will help evaluate the firm’s position vis-à-vis the industry. It will help in analyzing
the firm’s strengths and weaknesses and take corrective action. Trend Analysis of ratios over
a period of years will indicate the direction of the firm’s financial policies.

Budgeting: Ratios are not mere post-modern of operations. They help in depicting future
financial positions. Ratios have predictor value and are helpful in planning and forecasting
the business activities of a firm for future periods, e.g. estimation of working capital
requirements.

10
CHAPTER - 3
COMPANY
PROFILE

11
 CHAPTER – 3

PROFILE
COMPANY PROFILE:

Stigmata Techno Solutions LLP founded in the year 2011 focusing on IT Technical
Solutions, Training & Development, Overseas Consulting, Research & Development and
Outsourcing Services to a range of organizations. We bring value to the world/society by
providing end to end services to educational institutions. This includes seminar, workshops,
value added courses, research projects and placements.

We value having this privilege - and we do not take it lightly. We are aware of our
responsibility and we appreciate the confidence our clients have placed in us to work on their
websites or software applications.

12
Our philosophy is simple: To provide world-class quality service to our customers with
utmost focus on their needs and to ensure that technology supports their business growth.

Stigmata Techno Solutions LLP headquartered at Chennai (India) is a global provider of

information technology, website designing & development, HR placement centre and
Training & Development, started in the year 2011 as “Input Output Solutions” and later
renamed to “Stigmata Techno Solutions LLP”intheyear2012.

Stigmata Techno Solutions LLP always thinks, what value we can bring to the society and
humanity.

Stigmata Techno Solutions LLP vision is to build a product for the society and become one of
the effective competitors in that business vertical.

13
INDUSTRY PROFILE:

The Indian Information Technology industry accounts for a 5.19% of the country's
GDP and export earnings as of 2018, while providing employment to a significant number of
its tertiary sector workforce. More than 2.3 million people are employed in the sector either
directly or indirectly, making it one of the biggest job creators in India and a mainstay of the
national economy. In 2020, annual revenues from outsourcing operations in India amounted
to US$54.33 billion compared to China with $35.76 billion and Philippines with $8.85
billion. India's outsourcing industry is expected to increase to US$225 billion by 2022. The
most prominent IT hub is IT capital Bangalore. The other emerging destinations are Chennai,
Hyderabad, Kolkata, Pune, Mumbai, NCR, Trivandrum and Kochi. Technically proficient
immigrants from India sought jobs in the western world from the 1950s onwards as India's
education system produced more engineers than its industry could absorb. India's growing
stature in the information age enabled it to form close ties with both the United States of
America and the European Union. However, the recent global financial crises has deeply
impacted the Indian IT companies as well as global companies. As a result hiring has dropped
sharply and employees are looking at different sectors like the financial service,
telecommunications, and manufacturing industries, which have been growing phenomenally
over the last few years.

India's IT Services industry was born in Mumbai in 1967 with the establishment of Tata
Group in partnership with Burroughs. The first software export zone SEEPZ was set up here
way back in 1973, the old avatar of the modern day IT park. More than 80 percent of the
country's software exports happened out of SEEPZ, Mumbai in 80s.

MOBILE APPLICATION:

We are a mobile application development company having an expertise team strictly

dedicated to conceptualize, deliver, and support mobile media solutions for start-ups and
leading organizations.

WEB APPLICATION:

Stigmata Techno Solutions is a one of the leading development services. We are catering for
performance and cost-effective solutions for our customers. We understand that the
development is the trademark of every online business.

14
SECURITY PROJECTS:

We doing security research’s on topics of botnet, web application security, network security,
Google hacking, social engineering attack, brute force etc, we are doing security testing
(penetration testing), web application pen-testing, network testing.

TRAINING:

Stigmata Techno Solutions LLP technically skills around 700+ students in a semester. We
believe the future of our nation is in the hands of youngsters. So we take the responsibility in
producing skilled graduates for the corporates.

RESEARCH AND DEVELOPMENT:

Stigmata Techno Solutions LLP is an authorized R&D consultant for 12 engineering

colleges, Chennai contributing funded projects, industrial collaboration, accreditation works.

PLACEMENT SERVICES:

If you're looking for a job, then you are looking at the right place; yes we can help you get
one! We understand that looking for your first job, moving to a new employer or returning to
work after a career break is a big step and we aim to provide a supportive, friendly and
professional service to all job seekers.

CLIENTS:

15
OFFICIAL TRAINING & RECRUITMENT PARTNER OF

Successfully Organized two off-campus drives for 2014, 2015, 2016 engineering
graduates in Tagore engineering college and Anand Institute of Technology and rolled our
700+ offers in the year 2017.

TECHNICAL PUBLICATIONS:

Annexure 2: http://oaji.net/articles/2015/464-1444663773.pdf

Journal: http://ipasj.org/IIJEC/Volume2Issue1/IIJEC-2014-01-22-007.pdf

Annexure 2: http://ijarece.org/wp-content/uploads/2014/02/IJARECE-VOL-3-ISSUE-2-235-
239.pdf

16
Annexure 2: http://maxwellsci.com/msproof.php?doi=rjaset.9.1420

Journal: http://www.ijettcs.org/Volume2Issue3/IJETTCS-2013-06-25-138.pdf

Scopus: Indian Journal of Science and Technology, Vol 9(23), DOI:

10.17485/ijst/2016/v9i23/88322, June 2016

OUR CENTER OF EXCELLENCE LAB (COE):

17
Cyber Security Lab:

This lab involves training students on cyber security and cloud attacks. Now a days there is a
big scope for security texting / penetration testing and security auditing. Also students can
take it to real cloud attacks and how to develop a secure software.

18
Internet of Things Lab (IoT):

In this students would be trained on data collection from sensors using microcontroller and
data sharing to cloud environment. Also data analytics using R programming would be
explored.

ACHIEVMENTS:

• Our trained student batch of 2011-2012 in networking domain (title-Advanced

networking) was awarded the best project in “Dhanish Ahmed College of
Engineering”.

• Our trained student batch of 2012- 2013 in embedded domain (title-Water quality
monitoring) secured the best project in St.Joseph’s college of engineering, Chennai.

• Our trained student batch of 2012- 2013 in embedded & matlab domain (title-PPG
analysis of human using Bluetooth) secured the best project in Sri Andal Alagar
College, Chennai .

• Our trained student batch of 2013-2014 in Matlab domain (Brain tumor location and
size identification using k-means clustering) secured best U.G innovative project in
MNM College of engineering, Chennai .

• Our trained student batch of 2013-2014 in embedded domain (MEMS based wheel
chair movement) secured best P.G innovative project in MNM College of
engineering, Chennai.

• Our trained student batch of 2013-2014 in Software domain (Semantic based

advanced web search) secured best project in Valliammai college of engineering,
Chennai.

• Our trained student batch of 2013-2014 in Software domain (Semantic based

advanced web search) secured best project in Valliammai college of engineering,
Chennai.

• Our trained student batch of 2015-2016 secured “The best innovative project” in
Embedded Domain (LI-FI) in Velammal Engineering College, Chennai.

19
 • Our trained student batch of 2015-2016 secured “Third best innovative project” in
Human intelligence system (Virtual Reality) in Valliammai College of engineering,
Chennai.

• Our trained student batch of 2015-2016 secured “First prize for best innovative
project” in software domain (Dual Sentimental Analysis) in Valliammai College of
engineering, Chennai.

• Our trained student batch of 2016-2017 secured “First prize for best innovative
project” in software domain-Android application development (Online Voting
System) in Valliammai College of engineering, Chennai.

• Our trained student batch of 2016-2017 secured “Third best innovative project” in
NFC & Fingerprint based accident monitoring system (Embedded & IoT) in
Valliammai College of engineering, Chennai.

RECENT TRAINING ACTIVITIES:

• Stigmata Techno Solutions LLP have placed 480+ candidates in various industries
like IT, BPO, KPO and pharmacy plant till now.

• Stigmata Techno Solutions LLP have conducted On-campus drive (per-placement talk
& recruitment) for our client company (Arvind Remedies) in C.L.Baid College of
pharmacy, Chennai (06/15/2012).

• Stigmata Techno Solutions LLP actively joined hands with Avancer and Zodiac HR
services in organizing an Off-Campus on 07/28/2012 in Mohamed Sathak College
of arts & science.

• Stigmata Techno Solutions LLP have presented a Seminar in Surya College of

engineering, Vikravandi on “Enhancing employability for engineers” on 07/26/2012.

• Stigmata Techno Solutions LLP has successfully conducted one day workshop in the
topic “Basics & Overview of Embedded Systems and its applications” in
“Dhanalakshmi Srinivasan College of Engineering and Technology” on
09/27/2012.

20
• Stigmata Techno Solutions LLP has successfully conducted one day technical
workshop on the topics “Information Security” and “Basics of Android” in Arupadai
vedu Institute of Technology on 08/08/2013.

• Stigmata Techno Solutions LLP has successfully conducted 7 days value added
course in Android for 19 students in “St.Joseph’s Institute of Technology, Chennai”
on 02/22/2014.

• Stigmata Techno Solutions LLP has effectively conducted guest lecture on “Ethical
hacking and information security” in “St.Joseph’s Institute of Technology,
Chennai” on 07/22/2014.

• Stigmata Techno Solutions LLP has successfully conducted 1 day workshop on

“Software project management and professional ethics” in “KCG college of
Engineering, Chennai” on 08/09/2014.

• Stigmata Techno Solutions LLP has successfully conducted 1 month of value added
course in Core Java, J2EE and Android app development for 240+ students in
“St.Joseph’s Institute of Technology and St.Joseph’s college of engineering,
Chennai” on 02/01/2015.

• Stigmata Techno Solutions LLP has conducted core java customized training for
Virtusa Private Limited in KCG college of Technology, Chennai on 19/10/2015.

• Stigmata Techno Solutions LLP has conducted 7 days of Java training for 98 students
in TJS College of engineering, Chennai on 26/11/2015.

• Stigmata Techno Solutions LLP has conducted 21 days of training for 240+ students
of St.Joseph’s College of engineering, Chennai on 7/3/2106.

• Stigmata Techno Solutions LLP has conducted 6 days training program for 120
students of Ramachandra College of Engineering, Eluru on 22/7/2016.

• Stigmata Techno Solutions LLP has conducted a 45 day training program on

“Communications and Soft skills Development for 150 students of Ramachandra
College of Engineering, Eluru

• Stigmata Techno Solutions LLP has conducted 6 days technical training program for
22 M.E students of St.Joseph’s College of Engineering, Chennai on 26/09/2016.

21
• Stigmata Techno Solutions LLP successfully organised 1 day Ethical Hacking
workshop in K.S.Rangasamy College of Technology, Tiruchengode on 21/02/2017.

• Stigmata Techno Solutions LLP conducted 3 days technical training program on

Ethical Hacking, Android application development and Internet of Things (IoT) for
160 students of St.Joseph’s College of Engineering, Chennai on 08/03/2017.

• Stigmata Techno Solutions LLP conducted 3 days customised training program for
LG recruiter on C and Data structure for 23 students of Sree Venkateswara College
of Engineering, Nellore on 29/4/2017.

• Stigmata Techno Solutions LLP conducted 12 days technical training program on

Ethical Hacking, Internet of Things (IoT), Bigdata and CCNA for 220 students of
St.Joseph’s College of Engineering, Chennai on 19/06/2017 to 3/7/2017.

• Stigmata Techno Solutions LLP conducted 1 day technical training program on Web
development using Java for 70 students of K.C.S Arts & Science College, Chennai
on 18/8/2017 & 19/8/2017.

• We conducted Python training for MCA students of St. Joseph’s college of

Engineering, Chennai on 28/11/2017 to 30/11/2017.

• We with honour, trained international corporates of Sudan Country collaborating

with SRM university on Advanced Java, Oracle database and ITIL courses.

• Stigmata Techno Solutions LLP conducted 4 days technical training program on Web
development using Java and J2EE for 70 students of Sri Kanyaka Parameswari
Arts and Science College for Women, Chennai on 09/07/2018 to 12/07/2018.

• Stigmata Techno Solutions LLP conducted 3 days technical training program on

Ethical Hacking, Internet of Things (IoT), Bigdata analytics using R programming
and Raspberry Pi using IoT for 220 students of St.Joseph’s College of Engineering,
Chennai on 27/06/2018 to 04/07/2018.

• Stigmata Techno Solutions LLP conducted 15 days technical training program on IoT
+ Cloud + Data analytics for 75 students of Valliammai Engineering College,
Chennai on 10/09/2018 to 26/09/2018.

22
TECHNICAL EXPERTISE:

 Big Data Analytics

 CCNA Networking

 Ethical Hacking – CEH Certification

 Internet of Things (IoT)

 R Programming

 Advance Java Frameworks

 Cloud Computing : SaaS model

 Python

 Progressive Web Apps

 Microcontrollers

 Embedded C

 Blockchain

23
 CHAPTER - 4
ANALYSIS AND
INTERPRETATION

24
 CHAPTER - 4

ANALYSIS AND INTERPRETATION

1. CURRENT RATIO:

Current ratio is defined as the relationship between current asset and current
liabilities. This is most widely used ratio. The standard nor is 2:1; the current asset is twice
than the current liabilities. If the ratio is less than 2 then difficulty may be experienced in
payment of current liability and day-to-day operations of the business may suffer. If the ratio
is higher than 2, it is very comfortable for creditors but for the concern, the funds would be
locked up in this, which may be unproductive or idle.

FORMULA:-

Current Assets

Current Ratio =

Current Liabilities

Table no.4.1

CURREN CURRENT CURRENT RATIO

ASSET (In LIABILITY (In
S.NO YEAR
Lakhs) Lakhs)

1 2016 2231.65 1254.58 1.77

2 2017 2864.47 1640.31 1.74

3 2018 6753.42 3980.3 1.69

4 2019 12,756.41 8855.76 1.44

5 2020 14,041.50 9558.65 1.47

25
TREND ANALYSIS:

2021 2020 2019 2018 2017 2016

2.556 1.47 1.44 1.69 1.74 1.77

Chart no. 4.1

Chart Title
Series1Series2

2013 2012 2011 2010 2009 2008

2.556 1.47 1.44 1.69 1.74 1.77

1 2 3 4 5 6

26
INTERPRETATIONS:

 The ideal current ratio is 2:1.here the current ratio declining over a period of time
according to time series analysis. Since the healthy current ratio is 2:1 Stigmata
Techno Solutions LLP reaches the healthy ratio in the year 2008 & 2009 .after
that it started declining. Higher the current ratio, higher the short term liquidity.
So proper care should be taken to bring the company at healthy position,
otherwise it will create the problem in the payment of current liabilities.

2. CASH POSITION RATIO:

This ratio is also called ‘absolute liquidity ratio’ or ‘super quick ratio’. This is a
variation of quick ratio. This ratio is calculated when liquidity is highly restricted in terms of
cash

and cash equivalents. This ratio measures liquidity in terms of cash and near cash items and
short – term current liabilities. Cash position ratio is calculated with the help of the following
formula.

Formula:

Cash and bank balance + marketable securities

Cash position ratio =

Current Liabilities

27
 Table no. 4.2

CASH AND BANK CURRENT CASH POSITION

BALANCE+SECURITI(RS LIABILITIES(RS RATIO
S.NO YEAR
IN Lakhs) IN Lakhs)

1 2016 444.52 1254.58 0.35

2 2017 727.12 1640.31 0.44

3 2018 1024.3 3980.3 0.25

4 2019 1771.53 8855.76 0.20

5 2020 5608.77 9558.65 0.58

TREND ANALYSIS:

2021 2020 2019 2018 2017 2016

0.619636364 0.58 0.2 0.25 0.44 0.35

28
 Chart no: 4.2

Chart Title

2016

2017

2018

2019

2020

2021

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7

INTERPRETATION:

Since the cash position ratio shows that the organization’s financial position is at the
moderate stage. The result that I got is the type of oscillating manner which implies that the
company should more concentrate on its cash position

3. FIXED ASSETS RATIO:

This ratio establishes the relationship between fixed assets and long term funds. The objective
of calculating this ratio is to ascertain the proportion of long term funds invested in fixed
assets. The ratio is calculated as given below.

FORMULA:

FIXED ASSET RATIO = FIXED ASSET

-----------------------------

LONG TERM FUND

29
 Table no .4.3

Sl. No. Year Fixed assets Long term Fixed assets

funds ratio

1 2016 31.13 732.55 0.04

2 2017 16.58 773.32 0.02

3 2018 18.75 1420 0.01

4 2019 16.84 1436 0.01

5 2020 47.88 1083.59 0.04

TREND ANALYSIS:

2021 2020 2019 2018 2017 2016

0.038181818 0.04 0.01 0.01 0.02 0.04

30
 Chart no : 4.3

FIXED ASSETS RATIO

2016

2017

2018

2019

2020

2021

0 0.005 0.01 0.015 0.02 0.025 0.03 0.035 0.04 0.045

INTERPRETATION:

The study clears that the concern has started employing leverages for better profitability.

4. CAPITAL TURNOVER RATIO:

Managerial efficiency is also calculated by establishing the relationship between cost of sales
or sales with the amount of capital invested in the business. Capital turnover ratio is
calculated with the help of the following formula.

31
FORMULA:

COST OF SALES

CAPITAL TURNOVER RATIO = ------------------------------

CAPITAL EMPLOYED

Table no. 4.4

COST OF CAPITAL CAPITAL

SALES (RS EMPLOYED (RS TURNOVER RATIO
S.NO YEAR
IN IN Lakhs) CS/CE
Lakhs)
1 2016 14,781.31 977.07 15.12

2 2017 18,962.06 7224.16 15.48

3 2018 39,014.45 2773.12 14.06

4 2019 65,463.06 3900.65 16.78

5 2020 39,617.94 4482.85 8.83

TREND ANALSYSIS:

2021 2020 2019 2018 2017 2016

21.76690909 8.83 16.78 14.06 15.48 15.12

32
 Chart no : 4.4

CAPITAL TURNOVER RATIO

2016

2017

2018

2019

2020

2021

0 5 10 15 20 25

INTERPRETATION:

Since the cost of sales has increased the company is on the safe position.

5. WORKING CAPITAL TURNOVER RATIO:

Working capital ratio measures the effective utilization of working Capital .It also measures
the smooth running of business .The ratio establishes relationship between sales/cost of sales
and working capital.

33
FORMULA

Sales

Working capital turnover ratio = ------------------------------

Net working capital

Table no.4.5

NET WORKING WORKING CAPITAL

CAPITAL TURNOVER
S.NO YEAR SALES (RS/Lakhs) RATIO(RS/Lakhs)

1 2016 14,781.31 977.07 15.12

2 2017 18,962.06 1224.16 15.48

3 2018 39,014.45 2773.12 14,06

4 2019 65,463.06 3900.65 16.78

5 2020 39,617.94 4482.85 8.83

TREND ANALSYSIS:

2021 2020 2019 2018 2017 2016

21.76690909 8.83 16.78 14.06 15.48 15.12

34
 Chart no.4.5

WORKING CAPITAL TURNOVER RATIO

2016

2017

2018

2019

2020

2021

0 5 10 15 20 25

INTERPRETATION

The working capital turnover ratio shows that the company is at the safer zone.

6. STOCK TURNOVER PERIOD:

Inventory turnover ratio or stock ratio can be related to ‘Time’ the ratio can be expressed in
terms of days or months.

FORMULA:

DAYS OR MONTHS IN YEAR

INVENTORY TURN OVER PERIOD = ------------------------------------------

INVENTORY TURNOVER RATIO

35
 Table no.4.6

DAYS IN INVENTORY INENTORY TURN

THE YEAR TURN OVER OVER RATIO
S.NO YEAR RATIO(RS/IN
Lakhs) DAY/ITP

1 MAR’16 73 DAYS 796.32 0.09

2 MAR’17 73 DAYS 788.19 0.09

3 MAR’18 73DAYS 1983.18 0.03

4 MAR’19 73DAYS 4814.00 0.01

5 MAR’20 73DAYS 6341.18 0.01

TREND ANALYSIS:

2021 2020 2019 2018 2017 2016

0.049090909 0.01 0.01 0.03 0.09 0.09

36
 Chart no.4.6

STOCK TURNOVER PERIOD

2016

2017

2018

2019

2020

2021

0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.1

INTERPRETATION

 The inventory level of the company is maintained in the average of 0.09.

Throughout the period of time series analysis. The inventory management is
properly maintained.

7. NET PROFIT RATIO:

This ratio is called net profit to sales ratio. It is a measure of Managements efficiency in
operating the business successfully from the Owner point of view. In indicates the return on
shareholders investments.

37
FORMULA

NET PROFIT AFTER TAX

* 100

NET PROFIT RATIO = NET SALES

Table no.4.7

NET PROFIT NET SALES*100 NET PROFIT RATIO

AFTER TAX
S.NO YEAR (RS /Lakhs) (RS/Lakhs) =NPAT/NS

1 2016 110.73 14781.31 0.74

2 2017 149.33 18962.06 0.78

3 2018 436.54 39014.45 1.11

4 2019 719.74 65463.06 1.09

5 2020 397.19 39617.94 1.00

TREND ANALYSIS:

2021 2020 2019 2018 2017 2016

1.635272727 1 1.09 1.11 0.78 0.74

38
 Chart no.4.7

NET PROFIT RATIO

2016

2017

2018

2019

2020

2021

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8

INTERPRETATION:

This chart shows that the management’s efficiency had been increased.

8. EXPENSES RATIO

This ratio is also known as supporting ratios to Operating ratio. They indicate the efficiency

with which business as a Whole functions. It is better for the concern to know how it is able

to save or waste over expenditure in respect of different items of expenses.

39
FORMULA:

ADMINISTRATION EXPENSES *100

EXPENSES RATIO =

NET SALES

Table no . 4.8

ADMINISTRATION NET SALES*100 EXPENSES RATIO

EXPENSES(RS
S.NO YEAR (RS / Lakhs) = AE/NS
/Lakhs)

1 MAR’16 177.50 15093.20 0.01

2 MAR’17 212.84 19344.96 0.01

3 MAR’18 396.94 39903.60 9.94

4 MAR’19 624.41 67002.47 9.31

5 MAR’20 498.83 40512.59 0.01

40
 Chart no . 4.8

EXPENSES RATIO
12

10

0
MAR’16 MAR’17 MAR’18 MAR’19 MAR’20

INTERPRETATION

It shows that it is better for the concern to know how it is able to save or waste over
expenditure in respect of different items of expenses.

9. GROSS PROFIT RATIO

This ratio is also known as Gross margin or Trading Margin ratio. Gross profit ratio indicates
the difference between sales and Direct costs. Gross profit ratio explains the relationship
between gross Profit and net sales.

41
FORMULA:

GROSS PROFIT RATIO = GROSS PROFIT * 100

NET SALES

Table no. 4.9

GROSS NET GROSS PROFIT

PROFIT(RS/Lakhs) SALES*100 RATIO
S.NO YEAR
(RS/Lakhs)
RS/Lakhs)

1 MAR’16 272.02 15093.20 1.80

2 MAR’17 288.08 19344.96 1.48

3 MAR’18 376.61 39903.60 0.94

4 MAR’19 532.85 67002.47 0.79

5 MAR’20 589.05 40512.59 1.45

42
 Chart no :4.9

GROSS PROFIT RATIO

2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

MAR’16 MAR’17 MAR’18 MAR’19 MAR’20

INTERPRETATION

The gross profit ratio chart shows that the organization’s at stable position in the market.

10. STOCK TURNOVER RATIO

This ratio is also called stock velocity ratio. It is calculated to ascertain the Efficiency
inventory managements in terms of capital Investment. It shows the relationship between the
cost of goods sold and the amount of Average inventory.

FORMULA

COST OF GOODS SOLD

STOCK TURNOVER RATIO = ---------------------------------------

AVERAGE INVENTORY

43
 Table no . 4.10

COST OF AVERAGE STOCK TURN OVER

GOODS INVENTORY(RS/Lakhs) RATIO =CGS/AI
S.NO YEAR
SOLD
(RS/Lakhs)

1 MAR’16 14781.31 796.32 18.56

2 MAR’17 18962.06 788.19 24.05

3 MAR’18 39014.45 1983.18 19.67

4 MAR’19 65463.06 4814.00 13.59

5 MAR’20 39617.94 6341.18 6.24

Chart no . 4.10

STOCK TURNOVER RATIO

30

25

20

15

10

0
MAR’16 MAR’17 MAR’18 MAR’19 MAR’20

44
INTERPRETATION

It is transparent that the company’s stock rate has reduced over the years.

11. QUICK RATIO

Quick ratio also called acid test ratio, establishes a relationship between quick or liquid assets
and current liabilities. An assets is liquid it can be converted into cash immediately or
reasonably soon without a loss of value. Cash is the most liquid assets.

The quick ratio is found out by dividing quick assets by current liability

Quick ratio = Liquid Assets

Current Liabilities

Table no .4.11

Year Liquid Assets Current Liabilities Ratio

2017-2018 11805.45 8713.99 1.35

2018-2019 7193.15 4551.23 1.58

2019-2020 9840.21 6060.41 1.62

45
 Chart no. 4.11

QUICK RATIO
1.65

1.6

1.55

1.5

1.45

1.4

1.35

1.3

1.25

1.2
2017-2018 2018-2019 2019-2020

Interpretation

In FY 2018 the quick ratio of the company was 1.35, and in 2019 it increases to 1.58 &
after that it again increases to 1.62 in FY 21. The quick ratio is high in both consecutive
years 2020 & 2019, so it proves that company’s financial position is sound and have able
to pay its short term liabilities, show idle cash & debtor’s balance.

Positive Working Capital is also one of reason of High Quick Ratio.

12. TURNOVER RATIOS OR ACTIVITY RATIO

The Ratios computed under this group indicates the efficiency of the organization to use
the various kinds of assets by converting them in the form of sales. As the assets can be

46
basically categorized as fixed assets and current assets and as the current assets may
further be classified according to the individual components of current assets viz.
Inventory and receivables (debtors) or as net current assets i.e., current assets less current
liabilities viz. working capital, under this group of classification of ratios, following ratios
may be computed:-

Inventory Turnover Ratio

Inventory turnover indicates the efficiency of the firm in producing and selling its
products. It calculates by dividing the cost of goods sold by the average inventory.

Inventory turnover ratio = Cost of goods sold/Sales

Average inventory

Cost of goods sold is calculated as follows:

Cost of good sold = opening stock + purchase + direct expenses –Closing stock

Table no.4.12

Year Cost of goods sold Avg. Inventory Ratio (Times)

2017-2018 10505.03 482.315 21.78

2018-2019 12505.13 567.95 22.02

47
 2019-2020 13499.73 561.26 24.05

Chart no.4.12

TURNOVER RATIOS OR ACTIVITY RATIO

24.5

24

23.5

23

22.5

22

21.5

21

20.5

2017-2018 2018-2019 2019-2020

INTERPRETATION

It is transparent that the company’s inventory turnover ratio is increasing in the periodic
years.

13. DEBTORS TURNOVER RATIO

48
This ratio establishes relationship between net credit sales and average debtors of the year.
Debtor’s turnover indicates the number of times debtor’s turnover each year.

This ratio helps to measures time leg between credit sales and cash collection.

This ratio is calculated as follows:

Debtors turnover ratio = Net Credit Sales

Average Debtors

A net sale has been taken in place of net credit sales.

Average debtors are calculated by dividing the sum of debtors in the beginning and at the
end by to out side analyst, information about credit sales and opening and closing balance
of debtor may not available. Therefore, debtor turnover can be calculated by dividing
total sales by the year-end balance of debtor

Opening Debtors + Closing Debtors / 2

Debtors include Bills receivables also.

Table no. 4.13

Year Credit Sales/ Average Ratio

Sales Debtors

2017-2018 14459.41 788.165 18.34

49
 2018-2019 16047.18 772.09 20.77

2019-2020 18008.20 932.16 19.32

Chart no. 4.13

DEBTORS TURNOVER RATIO

21

20.5

20

19.5

19

18.5

18

17.5

17
2017-2018 2018-2019 2019-2020

Interpretation:

The debtor’s turnover ratio of company since 2018 was 18.34 Times and its collection

50
 period was 19.63 days, In 2019 it significantly increased by 20.77 Times & its collection
period was 17.33 days whereas in 2020 ratio was 19.32 Times and collection period was
18.63 days.

14. ASSET TURNOVER RATIO

It shows relationship between sales and fixed assets. It can be calculated as follows:-

Fixed assets turnover ratios: - Sales/ Fixed assets

Net sales include sales after return, if any, both cash as well as credit.

Fixed assets include net fixed assets i.e. fixed assets after providing for depreciation.

Table no. 4.14

Year Sales Fixed assets Ratio

2017-2018 14459.41 8171.55 1.77

2018-2019 16047.18 9391.31 1.71

2019-2020 18008.20 9749.95 1.84

51
 Chart no.4.14

ASSET TURNOVER RATIO

1.85

1.8

1.75

1.7

1.65

1.6
2017-2018 2018-2019 2019-2020

Interpretation:-

In all three years there are no major differences between turnover ratios because of all
these ratios may not differ in short term like 2 or 3 years. And there is optimum utilization
of plant and machinery in generating sales.

15. CURRNT ASSET TURNOVER RATIO

This Turnover Ratios shows sales generating by better utilization of current assets in the
organization. It has calculated as follows:-

52
 Current Assets Turnover Ratio = Sales / Current Assets

Net sales include sales after return, if any, both cash as well as credit.

Current assets include the assets like inventories, sundry debtors, B/R, Cash etc.

Table no.4.15

Year Sales Current assets Ratio

2017-2018 14459.41 12288.64 1.18

2018-2019 16047.18 7745.47 2.07

2019-2020 18008.20 10410.02 1.73

53
 Chart no.4.15

CURRNT ASSET TURNOVER RATIO

2.5

1.5

0.5

0
2017-2018 2018-2019 2019-2020

Interpretation

As we see in table that in the FY year 2017-18 the current ratios is 1.18 Times that has
increased by 2.07 Times in year 2018-19 and in next year 2018-20 it decreased by 1.73
Times, it can be said that company has less current assets in 2017 from 2018 and in 2019
company has increases in sales and current assets both, but current assets has increased in
more proportion as compared to sales, so I find a decrease in current assets turnover ratio
in 2019.

16. PROFITABILITY RATIOS

A) Net profit ratio

A ratio of net profit to sales is called net profit ratio. Generally, this ratio is taken in
percentage. Deducting operating expenses, finance charges and making adjustment for
non- operating expenses and income from gross profit derive net profit. The ratio can be

54
calculated by the formula

Lower net profit ratio combined with higher operating. Ratio means either the
company has big amount of non operating expenses or lower amount of non operating
income.

Net profit ratio = NET PROFIT x 100

SALES

Net Profit = Operating Profit + non-operating profit – non Operating Expenses

Year Net Profit Net sales Ratio

2017-2018 2310.07 14459.41 15.98

2018-2019 2386.67 16047.18 14.87

2019-2020 2601.46 18008.20 14.45

Table no.4.16

55
 Chart no.4.16

PROFITABILITY RATIOS
16.5

16

15.5

15

14.5

14

13.5
2017-2018 2018-2019 2019-2020

Interpretation

In the current year 2019-20 net profit ratio was 14.45% that slightly less in comparison to
previous years 2019-18 & 2018-17 i.e. 14.87% and 15.98%. In 2017-18 and 2018-19 each
year the profit and sales was increased while the net profit in percent has declined. The
reason behind this is increases in Administration, Selling & Distribution expenses, and
increase in capacity utilization.

17. DIVIDEND PAY-OUT RATIO

This ratio refers to how much percent of profit (after tax & distribution of Preference
Dividend) has distributed among its shareholders.

56
 Dividend Pay-Out Ratio = Equity Dividend x 100

Profit available for Equity Share Holders

Equity Dividend = Interim Div. + Final Div. + Corp. Div. Tax

Table no.4.17

Year Equity Dividend Profit For Equity Holders Ratio (%)

2017-2018 964.25 2310.07 41.74

2018-2019 969.27 2386.67 40.61

2019-2020 989.37 2601.46 38.03

57
 Chart no.4.17

DIVIDEND PAY-OUT RATIO

43

42

41

40

39

38

37

36

2017-2018 2018-2019 2019-2020

Interpretation

In the year 2017-18 the dividend pay-out ratio was declined from its preceding year. And
again in the year 2018-19 it declined. The company is more concerned to increase its
amount of reserve & surplus. Overall I can say that it is a good strategy for future
contingencies, growth & arrange finance for its ongoing projects from its internal sources

18. TOTAL DEBT EQUITY RATIO

Total Debt Equity Ratio = Total Debt

Equity

58
 Table no.4.18

Year Total Debt Equity Ratio

2017-2018 1916.56 9973.30 0.19

2018-2019 1337.85 11392.91 0.117

2019-2020 1265.87 13004.88 0.097

59
 Chart no.4.18

TOTAL DEBT EQUITY RATIO

0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0

2017-2018 2018-2019 2019-2020

Interpretation

In the year 2017-18 company has paid its long term liabilities of Rs.578.71 crore and
increased the amount in its reserve & surplus of Rs. 1419.61 crore, in 2019-19 long term
liabilities has paid by the company of Rs. 71.98 crore and increased the amount in its
reserve & surplus of Rs. 1611.97 crore.

19. ACTIVITY RATIO

The Ratios computed under this group indicates the efficiency of the organization to use
the various kinds of assets by converting them in the form of sales. As the assets can be
basically categorized as fixed assets and current assets and as the current assets may further
be classified according to the individual components of current assets viz. Inventory and
receivables (debtors) or as net current assets i.e., current assets less current liabilities viz.
working capital, under this group of classification of ratios, following ratios may be
computed

60
Activity ratio:

Inventory turnover indicates the efficiency of the firm in producing and selling its products. It
calculates by dividing the cost of goods sold by the average inventory.

Activity ratio = Cost of goods sold/Sales

Average inventory

Cost of goods sold is calculated as follows:

Cost of good sold = opening stock + purchase + direct expenses –Closing stock

Table no.4.19

Year Cost of goods sold Avg. Inventory Ratio (Times)

2017-2018 10505.03 482.315 21.78

2018-2019 12505.13 567.95 22.02

2019-2020 13499.73 561.26 24.05

61
 Chart no.4.19

ACTIVITY RATIO
24.5

24

23.5

23

22.5

22

21.5

21

20.5
2017-2018 2018-2019 2019-2020

Interpretation

The inventory turnover ratio shows a rising trend of the company under study for the year
from 2017-18 to 2019- 20.

In the year 2019-20 the ratio of inventory turnover was 24.05 Times that shows the company
have efficient inventory management and optimum utilization of resources

62
 COMPARATIVE BALANCE SHEET OF STIGMATA TECHNO SOLUTIONS LLP

PARTICULAR 2020 -19 2019 -18 2018 -17 2017 -16 2016 -15

ASSETS:

FIXED ASSETS

LAND ANDBUILDING 47.88 16.84 18.75 16.58 31.13

GOOD WILL 47.88 16.84 18.75 16.58 31.13

CURRENT ASSETS

DEBTORS 4,922.36 7,795.78 4,040.77 1,421.23 1,229.22

OUTSTANDING
REVENUE 3,510.38 3,647.24 2,619.24 7,238.96 1,066.92

CASH / BANK 5,608.77 1,771.53 1,024.30 727.12 444.52

TOTAL 14,169.22 13,306.83 7,775.39 9,473.76 2,838.74

LIABILITIES
SHARE CAPITAL:

EQUITY 4,482.85 3,900.65 2,773.12 7,224.16 977.07

LONG TERM FUND 1,083.59 1,436.00 1,420.00 773.32 732.55

CURRENT LIABILITY

SECURE LOAN 5,735.19 5,313.46 2,388.18 984.19 752.75

UNSECURE LOAN
1,911.73 1,771.15 796.06 328.06 250.92

OTHER CURRENT
LIABILITY 955.87 885.58 398.03 164.03 125.46

63
 TOTAL 14,169.23 13,306.83 7,775.39 9,473.76 2,838.74

COMPARATIVE INCOME STATEMENT OF STIGMATA TECHNO SOLUTIONS

LLP

PARTICULAR 2020-19 2019-18 2018-17 2017-16 2016-15

REVENUE

REVENUE DURING THE 39,617.94 65,463.06 39,014.45 18,962.06 14,781.31

YEAR (SALE)

REVENUE 7,923.59 13,092.61 7,802.89 3,792.41 2,956.26

47,541.53 78,555.67 46,817.34 22,754.47 17,737.57

Total

EXPENSES

OPERATING EXPENSES 39,617.94 65,463.06 39,014.45 18,962.06 14,781.31

ADMINISTRATION
498.83 624.41 396.94 212.84 110.73
EXPENSES

DEPRECIATION
371.24 623.41 370.30 178.98 142.28

REVENUE OUTSTANDING
3,712.38 6,234.10 3,702.98 1,789.79 1,422.77
DURING THE PREVIOUS YEAR

TAX PROVISION
2,943.95 4,890.95 2,896.14 1,461.48 1,169.76

64
 NET PROFIT 397.19 719.74 436.54 149.33 110.73

TOTAL 47,541.53 78,555.67 46,817.34 22,754.47 17,737.57

WORKING CAPITAL EVALUATION FOR STIGMATA TECHNO SOLUTIONS

LLP

Working capital: current asset – current liability

Current asset:

PARTICULAR 2020-19 2019-18 2018-17 2017-16 2016-15

Current asset 14041.51 13214.55 7684.31 9387.31 2740.66

Current Liability:

PARTICULAR 2020-19 2019-18 2018-17 2017-16 2016-15

Current liability 8602.79 7970.19 3582.27 1476.28 1129.13

TREND ANALYSIS

REVENUE TREND ANALYSIS

65
 70,000.00

60,000.00

50,000.00

40,000.00
Revenue
30,000.00 Outstanding revenue

20,000.00

10,000.00

-
1 2 3 4 5

90,000.00
80,000.00
70,000.00
60,000.00
50,000.00
40,000.00
Tax provision Revenue outstanding Depriciatio
30,000.00
Administration expenses
Operating expenses

20,000.00
10,000.00
-

1 2 3 4 5

EXPENSES TREND ANALYSIS

Working capital: Current asset – Current liability

66
 PARTICULAR 2020-19 2019-18 2018-17 2017-16 2016-15

Working capital 5438.72 5244.36 4102.04 7911.03 1611.53

Working capital
9000
8000
7000
6000
5000
4000
3000 Working capital
2000
1000
0

67
 CHAPTER - 5
FINDINGS,
SUGGESTIONS AND
CONCLUSION

68
 CHAPTER V

FINDINGS,SUGGESTIONS AND CONCLUSION

FINDINGS

Gross profit and net profits are decreased during the period of study, which indicates that

firms inefficient management in manufacturing and trading operations.

Gross profit and net are increased during the period of which indicates that firms efficient

management in manufacturing and trading operations.

Liquidity ratio of the firm is not better liquidity position in over the five years. It shows

that the firm had not sufficient liquid assets.

The inventory of the firm in the first years has been sold very slow. And there is an

increase in the movement of the year. This may be a sign not good to the firm.

Suggestions

The profit of the company is not in a good position for that company has to take

Alternative Actions such as,

1. Increasing procurement its sugarcane

2. Production and control in expenses like, Administrative selling etc.

 The firms have low current ratio so it should increase its current ratio where it

can meet its short term obligation smoothy

 Liquidity ratio of the firm is not better liquidity position in over the five years. So

I suggested that the firm maintain proper liquid funds cash and bank balance.

69
  It should enhance its employee’s efficient more training needed to its employees in

order to increase its production capacity and minimize mistakes while performing the

tasks, also more safety precaution need to implement to the employees .

 The direct material cost of the firm is very high so its my advice to the firm that to

decrease the direct material cost by purchasing raw materials from the other

suppliers.

 The firms should have proper check on the manufacturing process of the plant.

conclusion

Thus the ratio analysis has been done and it had provided lot of insight into the organizational

activities and also in the finance department of the Stigmata Techno Solutions LLP. So the

better utilization of the ratios in the organization has been clearly understood by me. The

findings which I did provided me a better understanding of the financial activities of any

organization.

70
 APPENDIX

REFERENCES

www.moneycontrol.com

www.xansa.com

www.nseindia.com

www.bseindia.com

www.investopedia.com

www.investorwords.com

www.wikipedia.com

www.stock.us.reuters.co.in

71
BIBLIOGRAPHY

(1). Financial management by PRASANNA CHANDRA

(2). Financial management by JBS INDIA

(3). Financial Management by SANJEEV AGARWAL

(4). CHANDRA SEKHAR, financial ratio analysis (45 most useful ratios to evaluate any
business).

(5).RAJ KUMAR SHARMA, ratio analysis.

(6). AXEL TRACY, ratio analysis

fundamentals

(7). LORENZO A. PREVE, working capital management (Financial management

Association survey and syntheses series Oxford university press)

(8). R.K. KUPTA, HIMANSHU GUPTA, Working capital management and

Financial managers

(9). HRISHIKES BHATTACHARYYA, Working capital management (Stratergic

and Techniques.

(10). MANIKA GARG , Working capital management.

72