08-10-2012, 11:19 AM
AN ANALYSIS & COMPARATIVE STUDY OF FINANCIAL STATEMENTS
AN ANALYSIS & COMPARATIVE.pdf (Size: 383.31 KB / Downloads: 58)
EXECUTIVE SUMMARY
This project named An Analysis and Comparative Study of Financial Statements was
carried out at Kalyani Steels Ltd to analyze and understand financial feasibility of the
company in terms of liquidity, turnover, solvency, profitability etc. by using Ratio
Analysis technique.
I chose to do this project at Kalyani Steels Ltd because it is a leading manufacturer of
Carbon and Alloy steels and an important constituent of the over $ 1.2 billion Pune
based Kalyani group. The company was established way back in 1973 mainly to cater
to in-house requirements of forging quality steels. Over the years the Kalyani Steels
Ltd is upgrading its technology and infrastructure to justify its mission statement,
Better Steel Through Better Technology .
The Ratio Analysis technique is the process of identifying the financial strength and
weakness of the firm by properly establishing relationship between the items of the
balance-sheet and the profit and loss account because the figures recorded in the
financial statements are absolutely incapable of revealing the soundness or otherwise of
a Company s financial position or performance. Thus the technique of Ratio Analysis
has been used which is supposed to be powerful tool for financial statements.
COMPANY PROFILE
Kalyani Group
The Kalyani Group is one of the leading Industrial Houses in India, having core
businesses in Steel and Steel based products, Forgings and Automotive Components.
The Group s Annual Turnover is over USD 1.5 billion and has joint ventures with some
of the world leaders such as Meritor, USA, Carpenter Technology Corporation, USA,
Hayes Lemmerz, Germany, Faw Corporation, China etc.
Bharat Forge Limited, the flagship company of the group is the 2nd largest forging
company in the world and the largest domestic player with a share of 80% in axle
components and engine components.
Bharat Forge Ltd., the flagship company of the US $ 1.5 billion Kalyani Group, is a
'Full Service Supplier' of engine & chassis components. It is the largest exporter of
auto components from India and leading chassis component manufacturer in the world.
With manufacturing facilities spread over 9 locations and 6 countries - two in India,
three in Germany, one in Sweden, one in Scotland, one in North America and one in
China, the company manufactures a wide range of safety and critical components for
passenger cars, commercial vehicles and diesel engines. The company also
manufactures specialized components for the railway, construction equipment, oil &
gas and other industries. It is capable of producing large volume parts in both steel and
aluminium.
Bharat Forge has built up a strong capability in design and engineering, including a full
fledged product testing and validation facility, which gives Bharat Forge a Full Service
Supply Capability - from product conceptualization to designing to manufacturing and
product testing & validation
THEORITICAL BACKGROUND
MEANING OF RATIO: -
A ratio is a simple arithmetical expression of the relationship of one number to
another. According to Accountants Handbook by Wixon Kell and Bedford, a ratio is
an expression of the quantitative relationship between two numbers . In short it can be
defined as the indicated quotient of two mathematical expressions. The ratios can be
expressed in 1) Percentages 2) fraction and 3) Proportion of numbers.
MEANING OF RATIO ANALYSIS: -
Ratio Analysis is a technique of analysis and interpretation of financial statements.
it is defined as the systematic use of ratios to interpret the financial statements so that
the strengths and weaknesses of a firm as well as its historical performances and current
financial condition can be determined. There are a number of ratios which can be
calculated from the information given in the financial statements, but the analysts has to
select the appropriate date and calculate only a few appropriate ratios from the same
keeping in mind the objectives of analysis.