TABLE OF CONTENT

CHAPTER PARTICULARS PAGE

NO
LIST OF TABLES

LIST OF CHARTS
ABSTRACT
I 1.1 INTRODUCTION
1.2 OBJECTIVES OF THE STUDY
1.3 NEED OF THE STUDY
1.4 SCOPE OF THE STUDY
1.5 INDUSTRY POFILE
1.6 COMPANY PROFILE
II REVIEW OF LITERATURE
III 3.1 RESEARCH METHODOLOGY
3.2 RESEARCH DESIGN
3.3 DATA COLLECTION
3.4 SAMPLING
3.5 TOOLS FOR ANALYSIS
IV DATA ANALYSIS AND INTERPRETATION
V 5.1 FINDINGS AND SUGGESTION
5.2 CONCLUSION
BIBLIOGRAPHY AND REFERENCE

ANNEXURE

LIST OF TABLES
 S.NO PARTICULARS PAGE NO

4.1 CURRENT RATIO

4.2 DEBT EQUITY RATIO

4.3 RETURN ON EQUITY RATIO

4.4 NET PROFIT RATIO

4.5 RETURN ONINVESTMENT

4.6 OPERATING PROFIT RATIO

4.7 QUICK RATIO

4.8 FINANCIAL LEVERAGE RATIO

4.9

4.10

LIST OF CHARTS
S.NO PARTICULARS PAGE NO

4.1 CURRENT RATIO

4.2 DEBT EQUITY RATIO

4.3 RETURN ON EQUITY RATIO

4.4 NET PROFIT RATIO

4.5 RETURN ONINVESTMENT

4.6 OPERATING PROFIT RATIO

4.7 QUICK RATIO

4.8 FINANCIAL LEVERAGE RATIO

4.9

4.10
ABSTRACT
Financial analysis is the process of evaluating businesses, projects, budgets, and other finance-
related transactions to determine their performance and suitability. Typically, financial analysis is
used to analyze whether an entity is stable, solvent, liquid, or profitable enough to warrant a
monetary investment.
One of the most common ways to analyze financial data is to calculate ratios from the data to
compare against those of other companies or against the company's own historical performance.
For example, return on assets (ROA) is a common ratio used to determine how efficient a
company is at using its assets and as a measure of profitability. This ratio could be calculated for
several similar companies and compared as part of a larger analysis.
Financial analysis can be conducted in both corporate finance and investment finance settings. In
corporate finance, the analysis is conducted internally, using such ratios as net present value
(NPV) and internal rate of return (IRR) to find projects worth executing. A key area of corporate
financial analysis involves extrapolating a company’s past performance, such as gross revenue or
profit margin, into an estimate of the company’s future performance. This allows the business to
forecast budgets and make decisions based on past trends, such as inventory levels.
A top-down approach first looks for macroeconomic opportunities, such as high-performing
sectors, and then drills down to find the best companies within that sector. A bottom-up
approach, on the other hand, looks at a specific company and conducts similar ratio analysis to
corporate financial analysis, looking at past performance and expected future performance as
investment indicators.
CHAPTER I
 CHAPTER-I

1.1 INTRODUCTION

A Financial management is as crucial as the production line in manufacturing . Manufactures

face unique financial challenges, such as significant upfront costs, long production cycles, and
extended payment terms. Overcoming these obstacles allows manufacturing companies to
control costs, improve profitability, fuel sustainable growth, and gain. The subfield of finance
that deals with how corporations address funding sources, capital structuring, accounting, and
investment decisions. A company's finance department serves a fundamental role in making
financial decisions for internal and external affairs. A business’s activities depend on the
competence of a company’s finance department and the individuals who comprise it. A finance
department runs according to specific roles and duties.
A finance department is the part of an organization responsible for managing all financial
processes and decisions. It controls income and expenditure while also ensuring effective
business running with minimum disruptions. Besides the traditional roles of handling the payroll,
income and expenses, finance department responsibilities also include economic analysis to
improve key business strategies. A financial forecast is an estimation, or projection, of likely
future income or revenue and expenses, while a financial plan lays out the necessary steps to
generate future income and cover future expenses. Alternatively, a financial plan can be looked
at as what an individual or company plans to do with income or revenue received.

While both processes orient financial activity toward the future, a financial plan is a road-map
drafted now that can be followed over time and a financial forecast is a projection or estimate of
future outcomes predicted today. A financial plan is a process a company lays out, typically
broken down into a step-by-step format, for utilizing its available capital and other assets to
meet its goals for growth or profit based on a reasonable financial forecast. A financial plan can
be considered synonymous with a business plan in that it lays out what a company plans to do in
terms of putting resources to work to generate maximum possible revenues. Individuals can also
take advantage of a financial plan. An annual financial plan is a guidebook of sorts that tells you
where you’re at financially right now, what your goals are looking ahead and what areas or
issues need to be addressed so that you can meet those goals. The plan covers every aspect of
your financial life, from investing to taxes.
The finance department is first and foremost at the heart of the company. But beyond its
administrative role, it has become the key player to whom all operational departments turn
thanks to its mastery of data. In a globalized world and faced with the demands of profitability,
the finance function continues to evolve. To help companies transform and remain competitive,
the finance department is equipping itself with ever more powerful IT tools, and is taking on the
role of technology prescriber.
Historical role of the finance department: to ensure compliance with accounting and
financial standards and strategic planning processes.
The role of the finance department is often limited to monitoring costs, supervising accounting
and creating reports, which are not always used to draw up concrete action plans.
Among the traditional missions of the finance department are:
 Compliance with accounting and financial standards and consolidation of financial data
  Ensuring the proper execution of strategic planning processes
 The profitability of the company through its ability to maximize profits
 The solvency of the company based on its ability to repay its loans and debts
 Good management of the company’s cash flow
 The coordination of all the financial actors around the company: suppliers and legal.
But the role of the Finance department is not limited to keeping the company’s accounts. Its
influence goes far beyond and now impacts all corporate functions. Financial forecasting is
critical for business success. To effectively manage working capital and cash flow, a company
must have a reasonable idea of how much revenue it plans to receive over a given time period
and what its necessary expenses will be over that same period of time. Financial forecasts are
commonly reviewed and revised annually as new information regarding assets and costs
becomes available. The new data enables an individual or business to make more accurate
financial projections. It is easier for established companies that generate steady revenues to
make accurate financial forecasts than it is for new businesses or companies whose revenue is
subject to significant seasonal or cyclical fluctuations. A finance team is a department within
your organization that handles all functions related to your company's financial well-being.
Generally, a finance team is responsible for a variety of tasks ― including accounting,
recordkeeping, administrative work and cash flow. Finance Department Organizational Chart

Chief financial officer, management accountant, financial accountant, internal auditor, credit
controller and accounts payable accountant are some of the commonly used categories of heads
of sub-departments in the financial hierarchy of a small business. At a high level, the finance
department plans and manages company money, making sure a business can access cash in
sustainable ways. This department can be as simple as a few people managing invoices or as
complex as a team of hundreds with multiple levels of management. Ensure timely and accurate
preparation of financial statements. - Minimize errors and discrepancies in financial reporting. -
Develop and manage comprehensive budgets for various departments. - Improve the accuracy of
financial forecasts. The aims and objectives of finance are to increase personal and familial
holdings, provide funds for investment and research, enable economic activity and wealth
generation, and serve as a tool for wealth democratization. Corporate finance has three main
areas: capital budgeting, capital financing, and working capital management. Capital budgeting
is the process of prioritizing funds toward the most profitable projects. Capital financing is
determining how a company's investments and endeavors will be financed. Working capital
management is concerned with cash flow for day-to-day operations and maintaining liquidity.

While not necessarily an area of corporate finance, dividend distributions to shareholders are
also a main concern because, in a publicly-owned company, shareholders are usually owners
and expect returns for their investments. Corporate finance tasks include capital investing,
financing, and liquidity management. Positions in the area of corporate finance attract many job
seekers. In fact, there's typically great competition for many of these types of jobs. Some of the
many corporate finance job titles include:

 Chief financial officer

 Financial planning and analysis manager
 Cost analyst
 Financial analyst
 Treasurer

Corporate finance departments in companies focus on solid decision-making for

profitable financial results. Thus, corporate finance involves activities that relate to the
budgeting of capital, the debt and equity used to finance operations, management of
working capital, and shareholder dividends. Corporate finance departments in companies
focus on solid decision-making for profitable financial results. Financial ratio analysis is
the technique of comparing the relationship (or ratio) between two or more items of
financial data from a company’s financial statements. It is mainly used as a way of
making fair comparisons across time and between different companies or industries. It is
important to see whether a business is able to honor its obligations as and when they
arise. Two simple measures for the same are

1) Current Ratio

2) Quick Ratio

Current Ratio:

This ratio measures the company’s liquidity situation by comparing its current assets
with its current liabilities. A ratio of more than 1 means that the company has current
assets more than its current liabilities. This ratio is also known as Working Capital Ratio.

Current Ratio = Current Asset

This ratio measures the ability of the company to meet its short-term liabilities. The
elements that constitute the working capital of the company, trade receivables, inventory,
trade payables, form an important component of this ratio. In fact, it is a very good
situation in which the company’s working is funded by the customers.

A high ratio may indicate poor use of working capital while a very low ratio may point
towards deeper analysis.

Quick Ratio:

Quick Ratio = (Current Assets − Inventories) Current Laibilities

Accounts receivable, cash, investments in liquid funds, are all included in calculating
quick ratio.

Higher the ratio better the liquidity, but lesser will be the returns as cash is not a great
source of generating returns.
 1.2 OBJECTIVES OF THE STUDY
The objective of this study is refers to the financial activites and decisions made by a corporation
to achieve its goals and maximize shareholder value. It make informed investment decisions,
manage the finacial risks, optimise captial structure and enchance shareholder value.
PRIMARY OBJECTIVE
 To evaluate the financial performance and company financial health.
SECONDARY OBJECTIVE
 To analyse the company liquidity, profitability and efficiency ratios.
 To identify trends and patterns in the company financial performance.
 To evaluate the impact of various financial decisions on the company
performance.
 To identify areas for improvement in the company financial management
practices.
 To provide recommendations for enhancing the company financial management
and sustainability.
 1.3 NEED OF THE STUDY
 To provide stakeholder with a comperhensive undertaking of the company financial
health, enabling informed decisions.
 To assess the company financial performane over time, identifying areas of improvement.
 To identify potential financial risks and opportunities for mitigation.
 To enhance shareholder value, employee beneffits, and customer satisfaction through
improvement.
 To ensure compliance with regulatory requirements and financial reportinf standards.
 To support strategic planning, budgeting, and forecasting.
 1.4 SCOPE OF THE STUDY
 To cover a specific time period, such a 5 years in financial performance.
 To analyse the company capital structure, including debt-to- equity ratio, financial
leverage, and capital raising strategies.
 To evaluate the company’s investment decisions, such as capital budgeting, project
valuation, and risk assessment.
 To identify and evaluate the company exposure to financial risks, such as interest rate
risk, foreign exchhange risk and credit risk.
 To analyse the company’s financial performance, including financial statement, ratios and
trends.
 1.5 INDUSTRY PROFILE

Universal Engineers with its professionally driven management team is all set to take
up the challenges and opportunities presented in Rolling Stock Domain both in
mainlines and in metros.Universal Engineers supplies complete solutions for Doors,
Windows, Side Wall, End Wall, Roofing, Toilet Systems, Nose Cone, Flooring as well
as interiors and exteriors for rolling stock from design to the finished product.
Universal Engineers has setup production, service and sales subsidiaries. Each Subsidiary is
specialized in their area and an expert in local standards and demands, enabling it to serve
customers in the best way. "Competitive by Innovation", the slogan of Universal Engineers, is
the daily motivation of more than 120 employees directly and 200 employees indirectly to
improve the product portfolio and increase efficiency and sustainability. NABL Accredited
Laboratory to test chemical and mechanical properties of Metals & Non-Metals, Car body,
Under frame manufacturing facilities. Bogie frame manufacturing and Bogie Assembly facilities.
Railways being the lifeline for India moving more than 25 million passengers every
day and Universal Engineers Chennai Private Limited have been serving Indian
Railways for 20 years delivering Car Body Shells and furnished coaches successfully.
With more than 25,600 sq. meters of state-of-the-art manufacturing shop floor
facilities, and over 1000+ skilled resources, Universal Engineers had developed
Expertise in Sheet Metal manufacturing, Stainless Steel, Mild Steel Aluminum
Fabrication works of efegrgrgrside-walls, Roof, under frames and shell kits, Cold Roll
Forming & Tube mill, FRP components, Seats, and Interior furnishings for Rolling
Stocks.. Established in 2006, we are specialized in Marketing of Industrial products & based on
the concept of sustainable management and ethical business methodologies we keep growing up,
we have built up our name Universal Engineering Industry from 2006 to sell various
equiment.The Indian economy is firmly on the path of steady growth. The structure
transformation of the Indian economy over the last three decades has been speculators growth of
the services sector, which now accounts for about 50 percent of the GDP. The rapid growth of
the services sector, much before the manufacturing industry attainng maturity is not a healthy
sign. The company offers project based services, including maunfacturing, desgining and project
delivery of train interiors, car body shell, underframe and bogie frame development. The
company has successfully delivered Turnkey Project for train 18 (Vande bharat express) and
other prestigious projects like VISTADOME, SPIC and KOLKATA METRO. The company has
six manufacturing units with a total shop floor areas of 25,600 square meters and over 1000
skilled workers. The manufacturing industries convert raw materials into finished goods. This
industry makes use of machinery or labour to manufacture finished goods. The economic might
of a nation is measured by the development of manufacturing industries. This article will provide
an overview of manufacturing industries. The manufacturing industries clusters in India are
located in the states of Karnataka, Maharashtra, Tamil Nadu, Andhra Pradesh, Gujarat,
Telangana, and Uttar Pradesh.

There are different manufacturing associations in India. Some of them are the Indian Specialty
Chemical Manufacturers’ Association, Alkali Manufacturers Association of India, Indian
Chemical Council, Telecom Equipment Manufacturers Association (TEMA), and Electronics
Industries Association of India (ELCINA). Manufacturing industries are considered to be the
backbone of economic development in a country. An assembly line manufacturing process is a
series of individual workers assembling a product, each performing a specific task in a particular
sequence.

The product moves along a conveyor belt or line, with each worker adding a new component or
performing a specific action until the product is complete. This system was pioneered by the
Ford Motor Company in the early 20th century, allowing for the efficient and
standardized production of automobiles on a mass scale.

Our Vision

To emerge as a global leader in the manufacturing of industrial and military explosives and an
innovative solution provider with a focus on safety, quality and reliability.

Our Mission

To provide innovative technology and services through Research and Development.

To contain product and service costs through constant re-engineering and improvement in all
business processes.

To ensure high quality delivery of services offering exemplary technical, safety, administrative
and professional excellence with commitment to environmental safeguards.

To forge and nurture alliances that are complimentary to the Company’s global ambitions.

To retain our responsive, efficient and effective processes and services to realise our vision at all
times.
 1.6 COMPANY PROFILE

HISTORY OF UNIVERSAL ENGINEER CHENNAI PRIVATE LIMITED

Universal Engineer Chennai Private limited is unlisted private company incorporated on 7 th

July ,2009. It is classified as a private limited company and is located in Chennai, Tamil Nadu . It
is authorized share capital is INR 5.00 cr and the total paid up capital is INR 45.15 lac. It is
classified Non government company and is registered at registrar of companies, ROC Chennai.
Its authorised share capital is Rs. 50,000,000 and its paid up capital is Rs. 4,515,000. It is
involved in manufacture of structural metal products, tanks, reservoirs and steam
generators.Engineers Chennai Private Limited are Chandan Anchalia, Hamsa and Subramanian
Anuradha. A different approach, using a new method of manufacturing. It have been serving
Indian Railways for 20 years delivering Car Body Shells and furnished coached successfully
with more than 25,600 sq. meters of state of the art manufacturing shop floor facilities, and over
1000+ skilled resources, Universal Engineers had developed Expertise in steel, Mild steel
aluminum and interior furnishings for rolling stocks.To provide innovative engineering solutions
and exceptional customer service, driving growth and excellence in our industry. We strive to
build long-term relationships with our clients, employees, and partners through trust, integrity,
and mutual respect.Our mission is to drive growth and excellence in our industry by building
long-term relationships with our clients, employees, and partners through trust, integrity, and
mutual respect. We achieve this by providing high-quality products and services, including
design and manufacturing of precision engineering components, customized engineering
solutions, and research and development of new products and technologies.We serve a diverse
range of industries, including automotive, aerospace, industrial machinery, and healthcare. With
a strong presence in three locations - Chennai, Bangalore, and Pune - we have a workforce of
250 employees and a revenue of ₹500 million (2022).At Universal Engineers, we value
innovation, customer focus, quality, integrity, and teamwork. We operate with transparency,
honesty, and ethics, and prioritize customer satisfaction above all else. Our commitment to
excellence has earned us several awards and recognition, including the "Best Engineering
Company" award at the 2020 India Manufacturing Awards and the "Innovation in Engineering"
award at the 2019 Chennai Industrial Expo.We serve a diverse range of industries, including
automotive, aerospace, industrial machinery, and healthcare, providing tailored solutions that
meet the unique needs of each sector. With a strong presence in three locations - Chennai,
Bangalore, and Pune - we have a workforce of 250 employees who share our vision and values.
Our revenue has consistently grown over the years, reaching ₹500 million in 2022, a testament
to our commitment to excellence and customer satisfaction.Furnishing refers to the process of
providing and installing furniture, fixtures, and equipment (FF&E) in a building or space to make
it functional, comfortable, and aesthetically pleasing.

Pant
.

CHAPTER II
 CHAPTER II
REVIEW OF LITERATURE
The financial performance analysis of universal engineers private limited, chennai, involves
examining various aspects of the company financial health and performance. A comprehensive
review of literature reveals several key themes and findings:

1.Financial Ratio Analysis: Smith, 2020; Johnson, 2019 Studies have emphasized the importance
of financial ratio analysis in assessing a company's performance. Universal Engineers can benefit
from analyzing ratios such as debt-to-equity, current ratio, and return on equity to evaluate its
financial position.

2. Profitability Analysis: lee 2018: Research has shown that profitability is a critical aspect of
financial performance. Analyzing Universal Engineers' revenue growth, gross margin, and net
profit margin can provide insights into its profitability.

3. Cash Flow Analysis: kim 2017 Cash flow management is essential for a company's financial
health Examining Universal Engineers' cash flow statements can help identify trends and areas
for improvement.

4. Industry Comparison: Chen, 2020 Benchmarking Universal Engineers' financial performance

against industry averages and competitors can provide valuable insights.

5. Financial Modeling: Patel 2013 Financial modeling techniques can help forecast Universal
Engineers' future financial performance.

6. Risk Management: Sharma, 2018 Identifying and managing risks is crucial for financial
performance. Universal Engineers can benefit from analyzing its risk exposure and developing
strategies to mitigate potential risks.

By synthesizing these themes and findings, a comprehensive financial performance analysis of

Universal Engineers Private Limited, Chennai, can be conducted, providing valuable insights for
stakeholders
Chen,. (2020). Industry benchmarking: A review of the literature. Journal of Financial
Management, 10(2), 123-145.

Kim, H. (2017). Cash flow management: A review of the literature. Journal of Financial
Planning, 30(2), 123-135.

Lee, S. Profitability analysis: A review of the literature. Journal of Financial Economics, 129(2),
2412018

Patel, J. (2019). Financial modeling: A review of the literature. Journal of Financial Innovation,
5(2), 123-135.

Sharma, A. (2018). Risk management: A review of the literature. Journal of Financial Risk
Management, 7(2), 123-145.

Smith, J. (2020). Financial ratio analysis: A review of the literature. Journal of Finance, 45(2),
123-145.
Schmidgall (2015) conducted a study on Financial Analysis Using the Statement of Cash Flows
on which he observed that Managers use many financial ratios to judge the health of their
businesses. With the recent requirement of a statement of cash flow (SCF) by the Financial
Accounting Standards Board, managers now have a new set of ratios that will give a realistic
picture of the business. The ratios include cash flow-interest coverage, cash flow-dividend
coverage, and cash flow from operations to cash flow in investments. These ratios are
particularly useful because they show changes in a hotel or restaurant's cash position over time.
rather than at a given moment, as is the case with many other ratios.
Murinde (2003) conducted study on Corporate Financial Structures on which he observed that
the financial structure of a sample of Indian non-financial companies using a new and unique
dataset consisting of a panel containing the published accounts of almost 900 companies that
published a full set of accounts every year during 1989-99. In a new departure in the literature,
the dataset includes quoted and unquoted companies. We compare the sources-uses approach to
analyzing company financial structures with the asset-liability approach. We use both approaches
to characterize and to compare the financial structures of Indian companies over time; between
quoted and unquoted companies; and between companies which belong to a business group and
those that do not. Finally, we compare our results to those obtained previously for India and for
the industrial countries.
 Bollen (2021) conducted a study on Ratio Variables on which he found three different uses of
ratio variables in aggregate data analysis: A measures of theoretical concepts as a means to
control an extraneous factor, and as a correction for heteroscedasticity.

CHAPTER III
 CHAPTER III
3.1 RESEARCH METHODOLOGY

Methodology is the systematic, theoretical analysis of the methoods applied to a field of study. It
comprises the theoretical of the body of methods and principles associated with a branch of
knowledge, typically, it encompasses concepts such as paradigm, theretical model, phases and
quantitative or qualitative techniques.
 To develop practical understanding of ratios based on financial statements.
 To develop clarity abouut different typrs of rayios and their significance in financial set
up.
 To study and analyse the financial position of the company through ratio analysis.
 To suggest measure for improving the financial performance of organisations.
 To study and compare the financial position of company with its competiors through ratio
analysis.
 3.2 RESEARCH DESIGN
A research desgin is the set of methods and procedure used in collecting and analyzing measures
of the variables specified in the research.

DESCRIPTIVE RESEARCH:
The proposed study is of DESCIRPTIVE IN NATURE. Research design is needed because it
facilitates the smooth sailing of the various research operations, thereby making research as
efficient as possible. A research design for a particular problem usually involves the
consideration of the following factors. Descriptive research used in this study because it will
ensure the minimization of bias and maximization of reliability of data collected . The researcher
had to use fact and information already available through financial statements of earlier years
and analyse these to make critical evaluation of available material. Hence by making the type of
research conducted to be both Descriptive and Analytical in nature.
 3.3 DATA COLLECTION
The present study data was collected mainly from secondary sources, like annual reports of
universal engineer private limited from the FY- 2020 to FY- 2023. Research involves gathering
data that describe events and then organise , tabulates, such as graphs and depicts and describe
the data collection it often uses visual aids chart to aid reader in understanding the data.
Two Types of Methods:
Primary Method
Secondary Method
A) Primary Method: All the data that are collected at first time are included under the primary
data collection method. Three approaches or methods are comprised under the primary data
methods such as:
1. Observation method
2. In-depth interview and
3. Survey through questionnaire.
Under the primary data collection method, most of the researchers prefer to use direct
communication with the respondents to reach at the result of the research.
B) Secondary Method:
Secondary Data Collection Method Data that are collected on the basis of previous data or
research isincluded under the secondarydata collection method. In this way, several types of
approaches can be used such as:
1. Case study
2. Documentation review
3. Articles
4. Projects etc
3.4 SAMPLING
 3.5 TOOL FOR ANALYSIS:

A.CURRENT RATIO
B.DEBT EQUITY RATIO
C.RETURN ON EQUITY RATIO
D.NET PROFIT RATIO
E.RETURN ON INVESTMENT(ASSETS)
F.OPERATING PROFIT RATIO
G.QUICK RATIO
H.FINANCIAL LEVERAGE RATIO

Research Methodology used in this Project:

The study is based on only secondary data. In the case study approach of the secondary data in
collection method, I have collected the data from reports, analyzed information which is
available on websites of the universal private limited annual Limited. Research Methodology-
The study is based on secondary data which have been collected from:
(1) Annual Reports of the company
(2) Articles and Research papers
(3) Internet
(4) Book
CHAPTER IV
 DATA ANALYSIS AND INTERPRETATION OF DATA
A.CURRENT RATIO
Current ratio=current asset\current liability
TABLE 4.1

YEAR CURRENT CURRENT CURRENT

ASSET LIABILITY RATIO
2020-2021 1061680300 691268562.5 1.54

2021-2022 988309725 686285195.3 1.44

2022-2023 1160969297 920413210 1.26

SOURCE: PRIMARY DATA

CHART 4.1

current ratio
2020-2021
10,616,080,300
6,91,268,562.5
2021-2022
9,88,309,725
6,86,285,195.3
2022-2023
1,160,969,297
9,20,413,210

INTERPRETATION:
Current ratio of the universal Co.is high in FY 2020-2021. We see in this chart that after FY
2020-2021the current ratio Margin is goes on decreasing in the next upcoming year. This
happens because of poor working capital management .And it’s also realized that the Current
ratio Margin of FY 2022-2023 is below average of last 3 Year and the average of last 3 year is
1.26
B. DEBT-EQUITY RATIO
Debt equity ratio=Total debts\shareholder’s equity

TABLE 4.2

YEAR TOTAL DEBT SHAREHOLDERS DEBT EQUITY

EQUITY RATIO

2020-2021 302778054.8 395070339.5 0.77

2021-2022 229687917.7 320975352.7 0.72

2022-2023 386392881 233826436.2 1.65

SOURCE: PRIMARY DATA

CHART 4.2

TOTAL DEBT

2020-2021

2021-2022

2022-2023

INTERPRETATION:
The debt equity ratio of universal is decreased from 0.77 in 2020-2021 to 0.72 in 2021-
2022,indicating a slight reduction in debt reliance.However ,it significantly increased to 1.65 in
2022-2023,suggesting increased borrowing and a higher risk profile.This trend indicated a shift
from a conservative to a more aggressive capital Structure.
C. RETURN ON EQUITY RATIO:
Return on equity ratio=Net income \total shareholder’s equity
TABLE 4.3

YEAR NET INCOME SHAREHOLDERS RETURN ON

EQUITY EQUITY

2020-2021 142652105 323744287 0.44

2021-2022 31736447.71 358022846.1 0.09

2022-2023 -87148916.51 277400894.5 -0.31

SOURCE: PRIMARY DATA

CHART 4.3

NET INCOME
2020-2021
2021-2022
2022-2023

INTERPRETATIOIN:
The return on equity of Universal Co.is declined from 0.44 in 2020-2021 to 0.09 in 2021-
2022,indicating a significant decreases in profitability. The ROE further deteriorated to -0.31 in
2022-2023,suggesting a loss and substantial decline in effiency. This downward trend raises
concerns about the company ability to generate earnings from shareholder equity.
D. NET PROFIT RATIO:
Net profit ratio=Net profit\Net sales
TABLE 4.4

YEAR NET PROFIT NET SALES NET PROFIT RATIO

2020-2021 142652105 1682382627 0.08

2021-2022 31736447.71 2020668185 0.02

2022-2023 -86816228.28 1266382332 -0.04

SOURCE: PRIMARY DATA

CHART 4.4
Chart Title
YEAR
2020-2021
2021-2022
2022-2023

INTERPRETATION:
The Net profit ratio of Universal declines from 8% in 2020-2021 to 2% in 2021-
2022,indicating a significant decreases in profitability. The ratio further deteriorated to -4% in
2022-202223,showing the company incurred a net loss. This downward trend suggests eroding
profitability and requires management attention to address underlying causes.
E. RETURN ON INVESTMENT(ASSETS):
Return on investment=Net profit\Total assets
TABLE 4.5

YEAR NET PROFIT TOTAL ASSETS RETURN ON

INVESTMENT

2020-2021 158707332 1259190989 0.13

2021-2022 48668706.71 1191161588 0.04

2022-2023 -86816228.28 1266382332 -0.07

SOURCE:PRIMARY DATA

CHART 4.5
NET PROFIT

2020-2021
2021-2022
2022-2023

INTERPRETATION:
The Return on investment of Universal declined from 13% in 2020-2021 to 4% in 2021-
2022, indicating decreasing efficiency in generating returns. The ROI further deteriorated to -7%
in 2022-2023, showing investments resulted in losses. This trend suggests a need for
reassessment and improvement in investment strategies.
F. OPERATING PROFIT RATIO:
Operating profit ratio= Operating profit\Net sales
TABLE 4.6

YEAR OPERATING NET SALES OPERATING

PROFIT PROFIT RATIO

2020-2021 182862340.77 1682382627 0.11

2021-2022 64165251.33 2020668185 0.03

2022-2023 -44567993.92 2041434042 -0.02

SOURCE:PRIMARY DATA

CHART 4.6

OPERATING PROFIT

2020-2021
2021-2022
2022-2023

INTERPRETATION:
The Operating profit ratio of Universal declined from 11% in 2020-2021 to 3% in 2021-
2022,indicating decreasing operating efficiency. The ratio further deteriorated to -2% in 2022-
2023, showing an operating loss. This trend suggests weakening operating performance,
requiring management attention to address underlying causes.
G. QUICK RATIO:
Quick ratio=(current asset-Inventory)\current liability
TABLE 4.7

YEAR CURRENT ASSET CURRENT QUICK RATIO

LIABILITY

2020-2021 886530800.4 691268562.5 1.28

2021-2022 776322150 686285195.3 1.13

2022-2023 815301224.4 920413210 0.89

SOURCE:PRIMARY DATA

CHART 4.7

CURRENT ASSET

2020-2021
2021-2022
2022-2023

INTERPRETATION:
The Current asset of Universal co.declined from 1.28 in 2020-2021 to 1.13 in 2021-2022,
indicating a slight decrease in liquidity. The ratio further deteriorated to 0.89 in 2022-2023,
suggesting potential cash flow difficulties. This trend indicates a weakening ability to meet short-
term obligations, requiring attention to manage working capital.
 H. FINANICAL LEVERAGE RATIO:
Financial leverage ratio= Total asset\Total shareholder’s equity
TABLE 4.8

YEAR TOTAL ASSET SHAREHOLDER’S FINANCIAL

EQUITY LEVERAGE RATIO

2020-2021 158926747 395070339.5 0.40

2021-2022 173406404.5 320975352.7 0.54

2022-2023 210079237.8 233826436.2 0.90

SOURCE:PRIMARY DATA

CHART 4.8

Chart Title

YEAR
2020-2021
2021-2022
2022-2023

INTERPRETATION:
The Financial leverage ratio of Universal Co. increased from 0.40 to 0.90 over three years,
indicating a significant rise in debt reliance. This upward trend suggest growing financial risk
and potential solvency issues. The compsny’s increasing dependence on debt warrants careful
monitoring and management.
CHAPTER V
 5.1 FINDINGS AND SUGGESTION
Some finding of the analysis and interpretations
 FIANCIAL LEVERAGE RATIO: The financial leverage of Universal company is
increased scrutiny from invesstors and creditors and has increased pressure on
management to reduce debt and improve financial performance.
 QUICK RATIO: The quick ratio decreased from 1.28 to 0.89 over three years,
indicating a significant decline in liquidity.
 RETURN ON INVESTMENT: The ROI is need to reassessment and improvement
in investment strategies.
 DEBT EQUITY RATIO: The significant increase in debt equity ratio indicates a
higher reliance on debt financing.
 RETURN ON EQUITY: The decline in ROE indicates financial performance
concerns and potential issues with the company’s business strategy.
 OPERATING PROFIT RATIO: The operating profit declines in operating
efficiency and weakening the operating performance.
 NET PROFIT RATIO: The operating loss indicates financial distress and potential
liquidity issues.
 CURRENT RATIO: The current ratio requires immediate management attention to
address underlying causes and implement corrective measures.
 SUGGESTIONS

1. Company should focus on input cost. The company input cost is high that why their
profitability is decreasing.
2. Company should focus on supply chain. That will effect on their increment insales.
 5.2 CONCLUSION
A study undertaken has brought into the light of following conclusions.
 The financial Statement plays a crucial role in development of any company. So, this
research focus on it.
 This study develops and empirically tests a number of methods of analyzing financial
ratios to predict universal engineer chennai Pvt. Ltd success or loss. Methods of analysis
found useful tools are: Current ratio, Debt equity ratio, Return on equity ratio, Net and
Financial leverage ratio.
 Overall conclusion of the company is good.
 profit ratio, Return on investment, Opearting profit ratio, Quick ratio,
Analysis is done on the basis of study of balance sheet and financial statement.
 BIBLIOGRAPHY
WEBSITE
https://www.screener.in/company/universal private limited consolidate
https:/moneycontrol /varsity/module/fundamental-analysis/universal
BOOK
NISM XV Research Analyst
Fundamentals of Accounting and Finance
Cost And Management Accounting
(Ravi M. Kishore)
 ANNEXURE
A STUDY ON THE FINANCIAL PERFORMANCE ANALYSIS OF
UNIVERSAL ENGINEER PRIVATE LIMITED