Analysis of financial Statements
- 1. P SE AT RE NT ION ON “ANAL YSIS OF F INANCIAL ST E E ” AT M NT AT B ANGAL ORE M T E ROP IT OL AN T RANSP ORT CORP ORAT ION, B T 2012-13 M C, BY, SYEDA ASFA TABASSUM 11ACCMA076 M.B.A A.I.M.S
- 2. Daily (31.03.2013) •We own 6427 buses •We operate 6189 bus schedules • We perform 12.98 lakh service kms • We make 80825 bus trips • We earn Rs 4.19 crore • We carry 48.00 lakh passengers Infrastructure Bus Depots – 39 Bus stations – 50 Man power deployment: 33918 Bus staff ratio: 5.3
- 3. INTRODUCTION ABOUT THE TOPIC Financial statement analysis is largely a study of relationship among the various financial factors in a business as disclosed by a single set of statements and statements. It is a process of evaluating the relationship between component parts of a financial statement to obtain a better understanding of a firm's position and performance. Financial statements analysis is an attempt to determine the significance and meaning of the financial statement data so that forecast may be made of the future earnings, Ability to pay interest and debt maturities (both current and long term) and profitability of a sound policy.
- 4. REVIEW OF LITERATURE In the words of myers, “financial statement analysis is largely a study of relationship among the various financial factors in a business as disclosed by a single set of statements, and a study of the trend of these factors as shown in a series of statements”. In the words of mettcalf and titard, “ analyzing financial statements is a process of evaluating the relationship between component parts of financial statement to obtain a better understanding of a firm’s position and performance”. The techniques or methods of financial statements analysis adopted for the purposes of study at b.m.t.c are as follows i. Comparative Financial Statement Analysis. ii. Common Size Financial Statement Analysis. iii. Trend Percentages Or Trend Ratios.
- 5. OBJECTIVES OF THE STUDY The study has the following objectives. They are: To analyze the financial statements to find out the firm's financial position. To study the overall financial performance of the firm. To find out the operating strengths and weakness of the firm. To know the earnings capacity of the firm.
- 6. METHODOLOGY OF THE STUDY The study is based on the various data provided by the company and data collected from the internet and reports, which could be studied and interpreted. Primary data:This data was generated in the investigation according to the needs of the problem in hand i.e., personal interview method. Secondary data:Secondary data means data that are already available in the organization. Published data will be available in Magazines, journals, books and reports by management, public records.
- 7. SAMPLING The entire unit is considered as a sample bearing no connection with other units of the industries. Further emphasis has been given only to assessment of working capital and ratios connected with it in finance department. This sampling enabled the researcher to concentrate her attention upon a relatively small number of people and hence, to devote more energy to ensure that the information collected from them is accurate. The researcher used a Non-probability sampling method, where no particular method for selecting the units of the sample is adopted. The basis of selection was simply opportunity, convenience and purpose.
- 8. LIMITATIONS OF THE STUDY: The study would be subjected to the following limitations. The study would be based on the annual reports of the company. The study concentrates only with the financial analysis. The project period is short due to lack of time. There are some facts and figures which are considered to be confidential and hence complete data is not available. The study would be based on information given by company officials.
- 9. Summary of Analysis Analysis of financial statements means splitting up or regrouping of the figures found in the financial statements into the desired homogeneous and comparable component parts. From the study at B.M.T.C, the following analysis has been done Comparative financial statement analysis. Common size financial statements analysis. Trend percentages or trend ratios.
- 10. Findings It is revealed from balance sheet that the capital internal resources had decreased in 2012. Fixed assets were decreasing. Reserves were decreased. Liabilities were also decreased in 2012. Improved cash and balance in the company. Inventories were decreased. Net profit was decreased in current year.
- 11. Suggestions A good plan to work Debtors Recovery has to be maintained to reduce the Bad Debt of the firm, which is 5 lakhs in the year 2009-10. Firm should have made a plan for the effective utilization of borrowed loan in the year 2010. Net profit has to improve by reducing operating cost. The company should maintain constant reserves as it is fluctuating year by year
- 12. Learning The Corporation has recorded significant improvement on the financial front. The analysis of the studies indicated that B.M.T.C is in good position in maintaining the total assets. There was decrease in the net profit in 2012 as there was decrease in non-operating incomes. Increase in the cost of spare parts, tyres, other consumables etc., on account of escalation in prices. During the year under report it has realised Traffic Revenue of Rs. 121123.53 lakh as against Rs. 101229.09 lakh realised during 2009-10 showing 19.6% growth. Added to this, the Corporation has realised Rs.11810.98 lakh by way of revenue from other sources during the year under report as against Rs. 11803.57 lakh realised during previous year.