17-05-2013, 02:49 PM
RATIO ANALYSIS AT INDIAN RAYON (A UNIT OF ADITYABIRLA NUVO LTD) VERAVAL(GUJARAT)
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INTRODUCTION
After preparation of the financial statements, one may be interested in knowing the position of an enterprise from different points of view. This can be done by analyzing the financial statement with the help of different tools of analysis such as ratio analysis, funds flow analysis, cash flow analysis, comparative statement analysis, etc. Here I have done financial analysis by ratios. In this process, a meaningful relationship is established between two or more accounting figures for comparison.
Financial ratios are widely used for modeling purposes both by practitioners and researchers. The firm involves many interested parties, like the owners, management, personnel, customers, suppliers, competitors, regulatory agencies, and academics, each having their views in applying financial statement analysis in their evaluations. Practitioners use financial ratios, for instance, to forecast the future success of companies, while the researchers' main interest has been to develop models exploiting these ratios. Many distinct areas of research involving financial ratios can be discerned. Historically one can observe several major themes in the financial analysis literature. There is overlapping in the observable themes, and they do not necessarily coincide with what theoretically might be the best founded areas.
COMPANY PROFILE
ADITYA BIRLA GROUP- An overview
The Aditya Birla group is one of the India‘s largest business houses, operating in 15 countries. it has 16 manufacturing unit in India as well as overseas (Thailand, Indonesia, Malaysia, Philippians, Egypt, and Canada) and international trading operation spanning Singapore, ,united kingdom, united states, south Africa ,Tanzania ,Myanmar ,and Russia.
With all united accredited with ISO 9002 certificate and nine of them ISO 14001 certified, the group is committed to being a global benchmark group.
The group reaches out to the core sector in India like cement, textile, aluminum, fertilizer, power, telecommunication, industrial chemical, insulators and financial services.
ADITYA BIRLA NUVO LTD- An overview
Aditya Birla Nuvo Ltd, a diverse conglomerate with a dozen businesses in its fold, is part of the US $29.2 billion Aditya Birla Group. Be it revenue, profitability, market capitalisation or corporate social responsibility, the Aditya Birla Group has a strong corporate track record of success, enterprise, values and sustainability practices. The Group is in the league of Fortune 500 and is all poised to ride on the global surge of newer business opportunities through acquisitions and expansions.
Aditya Birla Nuvo, propelled by an intellectual capital of over 37,000 people, provides dynamic career opportunities in a growth-oriented environment through continuous learning and cross-functional exposure in various streams. The company has an interesting mix of businesses under its fold ranging from textiles, carbon black, and insulators to IT, BPO, telecom, retail, asset management and financial services.
RATIO ANALYSIS
Ratio Analysis enables the business owner/manager to spot trends in a business and to compare its performance and condition with the average performance of similar businesses in the same industry. To do this compare your ratios with the average of businesses similar to yours and compare your own ratios for several successive years, watching especially for any unfavorable trends that may be starting. Ratio analysis may provide the all-important early warning indications that allow you to solve your business problems before your business is destroyed by them.
The Balance Sheet and the Statement of Income are essential, but they are only the starting point for successful financial management. Apply Ratio Analysis to Financial Statements to analyze the success, failure, and progress of your business.
Importance of financial statement analysis in an organization.
In our money-oriented economy, Finance may be defined as provision of money at the time it is needed. To everyone responsible for provision of funds, it is problem of securing importance to so adjust his resources as to provide for a regular outflow of expenditure in face of an irregular inflow of income.