02-11-2012, 04:20 PM
A STUDY ON FINANCIAL PERFORMANCE ANALYSIS AT IND-BARATH POWER GENCOM LTD
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INTRODUCTION OF THE STUDY
In this project, titled “A STUDY ON FINANCIAL PERFORMANCE ANALYSIS AT IND-BARATH POWER GENCOM LTD”. This study based on financial statements such as Ratio Analysis, Comparative balance sheet, comparative income statement. By using this tools combined it enables to determine in an effective manner.
The study is made to evaluate the financial position, the operational results as well as financial progress of a business concern. This aim is to analysis the liquidity and profitability position of the company using the financial tools.
The main aim of this report is to find out the financial situation of IND-BARATH POWER GENCOM Ltd.. From this analysis we find out the financial performance and this analysis from the annual report issued by IND-BARATH POWER GENCOM Ltd. from the year 2009 to 2011, which was the main source of information.
Financial statement:
consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. It may show a position at a moment of time as in the case of a balance sheet, or may reveal a series of activities over a given period of time, as in the case of an income statement.
Thus, the term financial statement generally refers to the basis statements;
i) The income statement
ii) The balance sheet
iii) A statement of retained earnings
iv) A statement of charge in financial position in addition to the above two statement.
Financial statement analysis:
It is the process of identifying the financial strength and weakness of a firm from the available accounting data and financial statement. The analysis is done by properly establishing the relationship between the items of balance sheet and profit and loss account the first task of financial analyst is to determine the information relevant to the decision under consideration from the total information contained in the financial statement. The second step is to arrange information in a way to highlight significant relationship. The final step is Inference and drawing of inferences and conclusion. Thus financial analysis is the process of selection relating and evaluation of the accounting data/information.
Comparative financial statement:
Comparative financial statement is those statements which have been designed in a way so as to provide time perspective to the consideration of various elements of financial position embodied in such statements. In these statements, figures for two or more periods are placed side by side to facilitate comparison.
But the income statement and balance sheet can be prepared in the form of comparative financial statement.
Comparative income statement:
The income statement discloses net profit or net loss on account of operations. A comparative income statement will show the absolute figures for two or more periods. The absolute change from one period to another and if desired. The change in terms of percentages. Since, the figures for two or more periods are shown side by side; the reader can quickly ascertain whether sales have increased or decreased, whether cost of sales has increased or decreased etc.
Comparative balance sheet:
Comparative balance sheet as on two or more different dates can be used for comparing assets and liabilities and finding out any increase or decrease in those items. Thus, while in a single balance sheet the emphasis is on present position, it is on change in the comparative balance sheet. Such a balance sheet is very useful in studying the trends in an enterprise.
common-size financial statement:
Common-size financial statement are those in which figures reported are converted into percentages to some common base in the income statement the sales figure is assumed to be 100 and all figures are expressed as a percentage of sales. Similarly, in the balance sheet, the total of assets or liabilities is taken as 100 and all the figures are expressed as a percentage of this total.
Ratio analysis:
Ratio analysis is a widely used tool of financial analysis. The term ratio in it refers to the relationship expressed in mathematical terms between two individual figures or group of figures connected with each other in some logical manner and are selected from financial statements of the concern. The ratio analysis is based on the fact that a single accounting figure by it self may not communicate any meaningful information but when expressed as a relative to some other figure, it may definitely provide some significant information the relationship between two or more accounting figure/groups is called a financial ratio helps to express the relationship between two accounting figures in such a way that users can draw conclusions about the performance, strengths and weakness of a firm.
ACTIVITY RATIOS:
These ratios evaluate the use of the total resources of the business concern along with the use of the components of total assets. They are intended to measure the effectiveness of the assets management the efficiency with which the assts are used would be reflected in the speed and rapidity with which the assets are converted into sales. The greater the rate of turnover, the more efficient the management would be (E.g.) stock turnover ratio, fixed assets turnover ratios etc….
COMPANY PROFILE
Ind- barath power gencom ltd is a subsidiary company of Ind- barath power infra ltd. It commissioned a 126.0 MW power project at Thoothukudi, Tamil Nadu, in February 2010.
About ind-barath power infra ltd
We are an established power generation company with eight operational power projects, which have a combined power generation capacity of 290.6 MW. We currently have five power projects under implementation, which will increase our combined power generation capacity by 1,728.0 MW. We are also planning to develop three thermal power projects at Jharsuguda, Orissa and Thoothukudi and Ramnathpuram, Tamil Nadu, with a combined power generation capacity of 1,337.5 MW. For the fiscal year 2009 and the nine months ended December 31, 2009, our consolidated total income was Rs. 2,506.24 million and Rs. 2,901.28 million, and consolidated net profit, as restated, was Rs. 253.68 million and Rs. 441.46 million, respectively. We presently operate eight power projects in the states of Tamil Nadu, Andhra Pradesh, Maharashtra, Himachal Pradesh and Kerala.