2. Financial analysis on EICL, TVM 2007-2010
INTRODUCTION
Financial Management is that activity is concerned with the planning and controlling
of the firm‟s financial resources. Though it was a branch of economics till 1890 as a separate
or discipline it is of recent origin. Financial management is concerned with the duties of
finance manager in a business firm. He performs such as budgeting, financial forecasting,
cash management, credit administration, investment analysis and fund procurement. The
recent trend towards globalization of business activity has created new demands and
opportunities in managerial finance. Financial statements are prepared and presented for
external users of accounting information. As these statements are used by investors and
financial analysts to examine the firms performance in order to make investment decisions,
they should prepare very carefully and contain as much information as possible. The financial
statements of the Company include Trading profit and Loss A/c and Balance sheet. The
general purpose is to analyze the statement to understand the financial performance of the
company, management of various assets and liabilities and their relation.
1.1 Overview of Project
The topic of this project is Financial Performance Analysis at English Indian Clays
Limited (E.I.C.L). Financial Performance Analysis constitutes approach to judge the
effectiveness of the financial function of the firm. Finance is needed to promote or establish
the business, acquires fixed assets, make investigations, develop product, meeting day to day
affairs of the company, encourage manager to make progress and create value. The project
work during the period of study equips the youngsters with necessary experience and
enhances the learner with adequate to the real field. It enables the learner to meet the
challenges of a business world.
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1.2 Statement of the Problem.
The financial statements reveal the true and fair view of the financial position of a
concern .A proper analysis and interpretation of these statements enables a person to judge
the profitability and financial strength of the business.
The financial statement are prepared on the basis of recorded facts .The facts are
recorded in monetary terms .The statement are prepared for a particular period and the
transact orders .The financial statements are true and fair view of the financial position of the
concern.
1.3 Significance of the Study.
Finance is the life blood of every business private as well as public. Therefore proper
utilization of finance by the public sector enterprise is found necessary as it is financial by the
government which is the representative of people. The financial performance of public
enterprise has been a matter of wide interest and concern.
The type of relationship to the investigated depend upon the objective and purpose of
evaluation .The purpose of evaluation of financial statement differ among various groups or
creditors, share holders, management, labor union and so on interested in the result and
relationship reported in the financial statement, so ratio analysis is an effect in tool for
analyzing the financial performance of the firm.
1.4 Object of the Study.
Following are the objective of the study:
i. To evaluate the liquidity position of English Indian clays.
ii. To evaluate the long term solvency of the firm.
iii. To evaluate the profitability of English Indian clays.
1.5 Methodology
The project evaluates the financial performance of the company with the help of the
most appropriate tool of financial analysis like ratio analysis and comparative balance sheet .
The data is largely depends on primary and secondary sources. Primary data is the first hand
information that is collected during the period of research. Primary data has been collected
through discussions held with the staffs in the accounts department.
Secondary data studies whole company records and company‟s balance sheet in
which the project work has been done. In addition, a number of reference books, journals
and reports were also used for the study.
1.6 Limitation of the Study.
1. The study was limited up to 5 years, starting from 2004-05 to 2008-09. Hence the
results obtained can be applied for the selected period.
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2. Due to the limitation of time the study converted only financial performance of
the company in terms of solvency, liquidity and profitability.
3. The study could not extend the other important area of operational performance
analysis of the company.
4. The study was conducted within a short period, so it is not possible to study all
aspect in details.
1.7 Period of Study.
The study covers the period of 2004-2005 to 2008-2009 in English Indian Clay
Limited.
1.8 Study Area.
English Indian Clay Limiited,
Veli, Trivandrum-695021
1.9 Chapterisation
The project report consists of five chapters. In this report the following elements are
involved.
The first chapter is introduction. Its consist of the general introduction of the
topic, objective of the study in general and in particular, Statement of the Problem,
Significance of study, Objectives, Methodology, Limitations, Period of Study,
Study Area
Second chapter includes financial statement analysis a theoretical perspective
on financial statement analysis. It includes different tool for analysis and its
limitation.
Third chapter is profile of English Indian Clay Limited. It includes The
Company History, Vision of EICL, Mission of EICL, Quality Policy of EICL,
Company‟s Philosophy, Corporate Objectives and Employee Profile.
Fifth chapter includes data analysis and interpretation. Different methods such
as ratio analysis and a comparative analysis of various years are made.
Sixth chapter deals with Findings, Suggestion, Conclusion.
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2.1 Financial statement
Financial statement are those statements which exhibits true financial position of the
business on a particular period and also produce the profit earning capacity at the end of a
particular period. Financial statements are prepared for the purpose of presenting periodical
review of report on the progress by the management and deal with,
a) Status of investment in the business
b) The result achieved during a period under view.
The statements disposing status of investment is known as Balance sheet and
statement showing the result is known as Profit and Loss Account. So the major financial
statement are „Balance sheet and Income statement‟ (P/L A/c) Therefore financial statement
are affected by three things ie Recorded facts, Accounting convention and personal
Judgment. In short financial statement position, profitability or weakness of the concern.
Thus we can say that financial statement provide a summary of the accounts of a business
enterprise the balance sheet reflecting the assets and liabilities and income statement showing
the results of operation during a certain period.
2.2 Nature of Financial Statements
The following points reflects nature of financial statement of a business
Recorded Facts
Accounting conventions
Personal Judgment.
Recorded Facts
Record is made only those facts which can be expressed in monetary terms. It means
that in financial statements date are taken from the accounting records. Data which has not
been recorded in the financial books are not exhibited in the financial statement. To the
amount of cash position, debtors, cost of fixed assets, creditors etc. are recorded facts. Certain
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factors that affect financial position of a business are not shown in the accounting records.
They are purchase and sales contract claim for refund, guarantee etc appear footnote on
balance sheet.
Accounting Convention :
Management of the concern are tree to choose certain accounting concern are free to
choose certain accounting convention suited to their concern. Important accounting
conventions are valuation stock (Corprice or Market price as well) valuation of fixed asset (at
cost less depreciation) creation of provision made for expected loss etc.
Personal Judgement:
Personal judgement of the accountant plays an important role in preparing financial
un important role in taking decisions regarding method and rate of depreciation adopted for
valuation of inventories, provision for bad or doubtful debts, amortisation etc. Postulates,
various accounting concepts followed by an accountant while making accounting records are
termed as postulates. The important postulates followed by the accountant are going concern
concept, money measurement concept, business entity concept, matching concept etc.
2.3 Characteristics or Features of Financial statement
An ideal financial statement mainly exhibits a true picture about the profit earning
capacity and financial position of the concern. A postmortem of financial statement helps a
person to identify the profitability and financial position of the concern. It should have the
following characteristics,
Financial statement depicts a true and fair view of the profitability and financial position of
the concern.
It should be presented in a simple manner so as to make them understandable even to a
layman.
It should be prepared in such a way as to attract the reader. So financial statement should be
attractive.
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It should be comparable, so financial statement should be presented in such a way that it can
be compared with previous years statements.
Financial statement will be helpful in analysis and interpretation of data.
Its easy preparation enable saving much time in preparing the statement.
It should be presented in brief.
Finally financial statement should be prepared and presented promptly
2.4 Importance of Financial statements
The financial statements are very important in the modern business field. These
statements are highly useful to the following authorities.
Management.
Owners.
Creditors.
Investors.
Employees.
Government.
Consumer.
Research scholars.
Stock exchanges.
Professional Authorities.
2.5 Analysis and Interpretation of Financial Statement
Financial analysis is the process of determining the significant operating and financial
characteristics of a firm from accounting data. The analysis of financial statement is an
attempt to determine the significance and meaning of the financial statement data do that the
forecast may be made of the future prospects for earnings ability to pay interest and debt
maturities (both current and long term) and profitability.
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2.6 Objective of Financial Analysis
To estimate the earning capacity of the firm.
To judge the financial position and financial performance of the firm.
To determine the long-term liquidity of the funds.
To judge the Solvency of the firm.
To determine the debt capacity of the firm.
To decide about the future prospects of the firm.
To know the progress of the firm.
To measure the efficiency of operations.
2.7 Type of Financial Analysis
However, we can classify various types of financial analysis into different categories
depending upon (i) the material used, and (ii) the method of operation followed in the
analysis or the modus operandi of analysis (iii) objective of analysis
Types of Financial Analysis
According to material According to modus According to objectives of
used operandi analysis
External Internal Horizontal Vertical Long term Short term
analysis analysis analysis analysis analysis analysis
According to Material used:
On this basis the analysis are of two types
External Analysis:
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External analysis of financial statement is made by those who do not have access to
be detailed accounting recording of the company ie, bank, creditors, general public.
Internal Analysis
Internal analysis is made by the finance and accounting department to help the top
management. These people have direct approach to the relevant financial records. Such
analysis emphasizes on the performance appraisal and assessing the profitability of different
activates.
According to Modus operandi:
On this basis analysis can be done as
Horizontal analysis
When the financial statements for a number of years are reviewed and
analysed the analysis is called “horzontal analysis” The preparation of common size
statement is an example of horizontal analysis. As it is based on data from year to year, rather
than on one data or period or time as a whole this is known as „dynamic Analysis‟
Vertical analysis:
Vertical analysis is also known as “static Analysis”. When ratios are calculated from
the balance sheet of one year, it is called vertical analysis. It is not very useful for long term
planning as it does not include the trend study for future.
According to objectives of analysis:
Long term analysis:
In the long-term the company must earn a minimum amount sufficient to
maintain a suitable rate of return on the investment to provide for the necessary growth and
development of the company and meet the cost of capital. Thus in the long term analysis the
stress is no the stability and earning potentiality of the concern. In long term analysis the
fixed assets, long term debt structure and the ownership interest is analysed.
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Short –term analysis:
The short-term analysis of financial statement is mainly concerned with the working
capital analysis. In the short-term a company must have ample funds leading available to
meet its current needs and sufficient borrowing capacity to meet the contingencies. Hence in
short term analysis the current assets and the current liabilities are analysed and cash position
of the concern is determined. For short term analysis the ratio analysis to useful.
2.8 Tools or Methods of Financial Analysis
In the process of Financial Statement analysis various tools or method are used by the
financial analysis
1. Comparative Financial and Operating Statements
It is an important device of financial analysis. In these statements figures of two or more
period are placed side by side to facilitate comparison. These statements lender comparison
between two period of time and depict financial position and operating result of the firm, with
the help of comparative financial statement interfirm comparison is possible. In short
statement prepared in a form that reflects financial data for two or more periods are known as
comparative statements.
2. Common Size Statements
In balance sheet items each assets are converted into percentages to total assets and each item
of liabilities is connected into percentage of total liabilities. Thus the whole balance sheet is
converted into percentage form such converted balance sheet is known as percentage
statement. It is useful in vertical financial analysis and comparison of two business enterprise
at a certain data.
3. Trend Analysis (Detailed Analysis)
It is an important tool of horizontal financial analysis. Trend analysis involves the
arithmetical relationship with each item of several years to the same item of base year. Thus
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out if many years one particular year is taken as base. Each item of base year is taken as 100
and on that base the percentages of each of the items of each of the years are calculated.
4. Average Analysis:
It is an improvement over trend analysis method when trend ratio have been
determined for the concern these figures are compared with industry averages. Both these
trends can be presented on the graph paper. These presentations of facts in the image of
pictures make the analysis and comparison.
5. Statement of changes in Working Capital
Working capital is the excess of current assets over current liabilities. A statement
which is prepared to find out changes in working capital position of a concern is termed as
statement of changes in working capital changes in working capital may be either increase in
working capital or decrease in working capital.
6. Fund Flow analysis:
Fund Flow Analysis has become and important tool in the analytical kit of financial
analysts, credit granting institutions and financial managers. Fund flow analysis reveals the
changes in working capital position. It tells about the sources from which the working capital
was obtained and the purpose for which it was used.
7. Ratio Analysis (In Depth)
The most important tool of financial statement analysis is ratio analysis. It is
commonly used for quantitative decision making functions. Ratio is simply one number
expressed in terms of one another. So it is the arithmetical selection between two figures or
two assets. Ratio highlights the arithmetical relationship between various figures in financial
statement.
Importance
It is useful to check the efficiency of the firm.
It expresses the relationship between various items in financial statement.
It is useful for interfirm comparisons.
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It is useful for measuring the performance of the firm.
It is useful for cost control.
More over it indicates the profitability solvency liquidity and operational efficiency of the
firm.
Types of Ratios (Detailed Analysis)
1. Liquidity Ratios
a) Current Ratio
b) Quick Ratio /Liquid Ratio
c) Absolute Liquid Ratio/Cash position Ratio
2. Solvency Ratio/ Leverage Ratio
a) Debt-equity Ratio.
b) Proprietory Ratio.
c) Fixed Asset to Net worth Ratio.
Debt-assets Ratio
3. Turnover Ratios/ Activity Ratio
a) Inventory Turnover Ratio/Stock Turnover Ratio.
b) Fixed asset turnover Ratio.
c) Working capital turnover Ratio.
d) Total asset Turnover Ratio.
e) Current Asset Turnover Ratio.
f) Debtors Turnover Ratio.
g) Capital turnover Ratio.
4. Profitability Ratio
a) Operating Ratio.
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b) Cost of goods sold Ratio.
c) Administrative expense Ratio
Limitations of Ratio Analysis.
Ratio analysis gives only a good basis for quantitative analysis of financial problems. But it
suffers from qualitative aspects.
Ratios are computed from historical accounting records. So they also process those
limitations of financial accounting.
It is not possible to calculated exact and well accepted absolute standard for comparison.
In ratio analysis arithmetical window dressing is possible and firms may be successful in
concealing the real position.
Ratios are only means of financial analysis, but not an end in them. They can be affected with
the personal ability and bias of the analyst.
Liquidity Ratios:
Liquidity is the ability of a firm to meet its current liabilities. The deficiency of
performance of day to day operations is ascertained by way of liquidity ratios. The ratios
which indicate the liquidity of a firm are:
Net working capital.
Current ratios.
Acid test/quick ratios.
Super quick ratios.
Turnover ratios.
Defensive interval ratios
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Solvency / Leverage / Capital Structure Ratio
Solvency ratios are used to measure long term solvency of the firm. The long-term
efficiency of the firm to set off its long term debt. The leverage or capital structure ratios may
be defined as financial ratios which throw light on the long-term solvency of a firm as
reflected in its ability to assure the long-term creditors with regard to:
a) Periodic payment of interest during the period of the loan.
b) Repayment of principal on maturity or in pre-determined installments at due dates.
The Solvency ratios include:
a. Debt-equity ratio.
b. Debt-assets ratio.
c. Proprietary ratio etc.
Turnover ratios / Activity Ratios
Activity ratios are concerned with measuring the efficiency in asset management.
These ratios are also called efficiency ratios or asset utilization ratios. These ratios express
the operational efficiency of a concern. The operational efficiency means the speed with
which assets are being converted into sales. Turnover ratios are expressed in times. Thus
turnover ratio can be defined as the test of the relationship between sales (more appropriately
cost of sales) and ratios assets of firm.
Profitability Ratios:
The management of the firm is naturally eager to measure its operating efficiency.
The owners invert their funds in the expectation of reasonable return. The operating
efficiency of a firm and its ability to ensure adequate ratio to its shareholders depends
ultimately on the profit earned by it.
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The study is to analyze the ratios for understanding the financial performance and a
comparative statement analysis
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Chapter-3
COMPANY PROFILE
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3.1 THE COMPANY HISTORY
English Indian Clays Limited (EICL) has two key business segments viz Clay
Business and Starch Business with strong R&D set-up at all its three manufacturing locations.
English Indian Clays Limited was incorporated on 18th November 1963, in technical
and financial collaboration with English China Clays Limited, UK (now known as ECC
Group plc, UK). The collaboration with ECC ceased in the year 1992. EICL has since been
actively engaged in the manufacture and processing of China Clay of different grades for use
as a coating agent and filling agent. The Company has its clay manufacturing units at Veli,
Thonnakkal and Kollam located in Thiruvananthapuram, Kerala. The installed capacity of the
plants was 36,000 MT per annum initially and it has since been increased to 2, 13,600 MT
per annum as of date.
The Starch business has two manufacturing divisions at Yamunanagar in Haryana and
Puducherry. The Starch division at Yamunanagar can trace its origins back to 1937 when
Late Lala Karam Chand Thapar promoted a Company by the name of Indian Starch &
Chemicals Limited. The name of this Company was later changed to Bharat Starch Industries
limited. The Starch Division at Puducherry was set up in 1994-95 to manufacture modified
starches for industrial uses. The Divisions have the distinction of being the only Starch
Company in India to have acquired ISO-9002 certification and DSIR recognised R & D
centre. Current starch producing capacity of the Company is 1,01,040 MT per annum.
The Company acquired the starch business of erstwhile Bharat Starch Industries
Limited (BSIL) with effect from April 1, 2001.
Clay Division:
The Company manufactures varieties of superior grade China Clay for diversified
applications such as pigments, extender, filler and as raw material in different industries.
Superior Coating Grade Kaolin is produced under the trade marks „Super coat‟, „Higloss‟,
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„Hibrite‟ and „BCK‟ in the form of lumps, powder, and pre-dispersed Spray Dried Powder,
Filler and Coating Grade Clay under trade mark „KCG‟ as lumps, powder, and pre-dispersed
Spray Dried Powder. Calcined Clay, used as a substitute for Titanium Dioxide in Paints,
Paper, Detergents, and other grades, is also manufactured by EICL to cater to niche markets.
As pigment and extender, China Clay it is used extensively in the paper and paints
industry. As filler, it is used in the manufacture of plastics, detergents, rubber goods and
paper; as raw material, it is used by glass and ceramic industries for making fiberglass and
porcelain respectively. As additive, it is used by the soap industry and it is also used by the
paper industry for specialty coating purposes as well in order to impart strength and shine and
water repellent characteristics to the paper.
3.2 VISION OF EICL
“To be a leader in processed china clay market in Asia and to be an employer of
choice, fostering a culture that values dedication, respect, and continuous improvement.”
3.3 MISSION OF EICL
“To provide consistently high quality product and materials to our customers in a
safe, timely and efficient manner, at the lowest possible cost and to grow with them and
ensure the growth and development of employees of the company in order to achieve the
objective of the organization and the career goal of the employees.”
3.4 QUALITY POLICY OF EICL
EICL is committed to processing and supply of value added hydrous and calcined clay, meet
customer requirements of quality, delivery and application support through continual
improvement of the effectiveness of its quality management system.
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Distribution of Equity Share holding
Category No. of shares of Rs.10/- each Percentage
Promoters 3760768 84.16
Indian Institutional Investors __ __
Other Bodies Corporate 82333 1.84
Foreign Institutional Investors 508998 11.39
NRIs/OCBs 3337 0.07
Mutual Funds __ __
General Public 84143 1.88
Directors & Relatives 29400 0.66
Total 4468979 100
3.5 COMPANY’S PHILOSOPHY
The company‟s philosophy on corporate governance is to promote and raise the
standards or system and practices of corporate conduct to attain high levels of accountability,
transparency and responsibility in its operation and enhancement of overall long term value
of its share holders, customers, lenders and employees.
Chairman : Mr. Karan Thapar
Directors : Mr. S.N. Dua
Mr.S.K. toshniwal
Mr. S. Padmakumar
Mr. J.K. Jain (ICICI Nominee)
Mr. Vijay Rai
Managing Director : Mr.D. Kohli
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Vice president corporate
Finance accounts &
Administration : Mr S.K. Jain
Company secretary &
Head corporate legal : Mr. P.S. Saini
Auditors : M/S Price Waterhouse
Bankers : Axis Bank Ltd
Oriental Bank of Commerce
State Bank of India
State Bank of Indore
Registered office : TC-79/4, Veli
TVM-695 021, Kerala.
Corporate office : Global Business Park, 801-803,
Tower-B, 8th floor,
Mehrauli-Gurgaon Road
Gurgaon- 122 001, Haryana
Works : TVM (Kerala)
Yamunanagar (Haryana)
Puducherry (U.T)
Shares listed at : Bombay Stock Exchange.
3.6 CORPORATE OBJECTIVES
Company‟s corporate objectives are;
To procure material of required quality or quantity at most competitive prices for
uninterrupted production and maintenance of plant with least possible tie ups in
inventories.
To develop services and retain customers for the range of products manufactured by the
company and to meet customer needs in terms of new products or services.
To promote and raise the standard of system and practices of corporate conduct to attain
high levels of accountability.
To adopt transparency and responsibility in its operation and enhancement of overall long
term value of its shareholders, customers, lenders, and employees.
To ensure maximum utilisation of available human resources.
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3.7 EMPLOYEE PROFILE
EICL has 291 employees of which 61 are officers, 34 administrative staff, 179
workers and 13 mine workers.
Employee Profile.
Category Number
Officers 61
Administrative staff 34
Workers 179
-at SPD 46
Mine workers 13
Total 291
Employee Profile
200
3. workers
180
160
No of employees
140
120
100
80 1.Officers
60 2. Administrative
staff 4. workers at
40
mines
20
0
category
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Working pattern of the company
EICL is a 24 hour working company. The working time is divided into three shifts. General shift is
from 9 a.m to 5 p.m. For plant officers and staff the time is from 8 am to 5 pm.
Working Pattern of the Company
A shift 6 a.m to 2 p.m
B shift 2 a.m to 10 p.m
C shift 10 p.m to 6 a.m
2.9 PRODUCT PROFILE
The company makes hydrous and calcined clays for application in paper, paint,
rubber, fiberglass and other industries. EICL‟s products have been in use in the below
mentioned industries in India, Africa, and the Far East. Its products include hydrous and
calcined clay. The product range is as given below
Product Range & Industry
Type Industry
Very Fine Coating Clays Paper
Fine Coating Clays Paper
Normal Coating/paint Grade Paint/ Paper/Printer Inks
Clays
Coating/Filler Grades Paper/Rubber
Rubber Grades Rubber
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Fiberglass Grades Fiber glass
Very Fine Calcined Clays Fiberglass/Paper
Coating/Paint/Printer Inks
Fine Calcined Clays Fiber glass/Rubber/Soap
Normal Coating/paint Grade Paper Coating/Paint/Printer Inks
Calcined Clays
Coarse Calcined Clay Paint/ Ready Mix Concrete/PVC
Compounding
Cement grade Calcined Clay Ready Mix Concrete
Cement/Ultramarine
Industry-wise Market Break-up
INDUSTRY PERCENTAGE OF SALES
Paint 35
Paper 30
Rubber 20
Fibre Glass 10
Others 5
2.10 EICL EXPORTS
Over the last 10 years, EICL products have established themselves in the international
market. With hydrous and calcined clays of quality comparable with the best grades available
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in the world. EICL products offer distinct techno-commercial advantage in Africa, South East
Asia, and Far East and Middle-East markets due to its geographical location.
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Chapter-4
DATA ANALYSIS
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DATA ANALYSIS AND INTERPRETATION
Ratio Analysis
Ratio Analysis is a powerful tool of Financial Analysis. The relationship between two
accounting figures, expressed mathematically is known as Financial Ratio. A ratio is used as
an index or yardstick for evaluating the financial position and performance o a firm. Ratio
Analysis highlights the liquidity, solvency, profitability, capital gearing etc. The technique
serves as a tool for assessing the current and long term financial soundness of a business. It is
also used to analyze various aspects of operating efficiency and level of profitability. Ratio
was used for the time in 1919 by a German Scholar.
Definition :-
“Ratio is simply a means of highlighting in arithmetical terms of relationship
between figures drawn from financial statements”.
4.1 RATIO ANALYSIS
A. LIQUIDITY RATIOS
1. Current ratio
Current ratio is the most common ratio for measuring liquidity. It represents the ratio of
current asset to current liabilities. The ratio measures the ability of company to discharge its
current liabilities. It is also called working capital ratio. It is calculated by dividing current
assets by current liabilities. Current ratio of the firm measures its short term solvency, i.e. the
ability to meet short term obligations. The current ratio of firm measures its short- term
solvency, i.e. ,its ability to meet short- term obligations. Ina sound business a current of 2:1
is considered an ideal one.
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Current Ratio = Current Assets / Current liabilities
Table No: 4.1
Current Ratio
Current Asset Current
Year Current Ratio
(in crores) Liability(crores)
2004-05 55.29 29.30 1.88
2005-06 84.34 33.13 2.55
2006-07 79.55 47.80 1.66
2007-08 86.05 52.49 1.64
2008-09 79.14 48.92 1.61
Graph No: 4.1 -Current Ratio
2.50
Current Ratio
2.30
2.10
1.90
1.70
1.50
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Year
INTERPRETATION: -
The current ratio of English Indian clays is near the standard ratio of 2:1 in
almost all the years. The highest ratio is 2.55 which were in the year 2005-06 and the lowest
ratio is 1.61 which was in the year 2008-09.
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2. Quick ratio
Quick ratio, is also known as acid test ratio, establish the relation between liquid assets and
current liabilities. An asset is liquid if it can be converted into cash immediately without loss
of value. Inventory normally requires some time for realizing into cash and their value may
fluctuate. An Acid Test Ratio of 1:1 is considered satisfactory
Quick ratio = Quick assets / Current liabilities
Liquid Asset =Current Asset–Stock & Prepaid Expense
Table No: 4.2
Liquid Ratio
Year Quick Asset (crores) Current Liabilit(crores) Quick Ratio
2004-05 33.20 29.30 1.13
2005-06 60.19 33.13 1.82
2006-07 44.52 47.80 0.93
2007-08 51.20 52.49 0.98
2008-09 51.39 48.92 1.05
Graph No: 4.2: - Liquid Ratio
1.90
1.70
Liquid ratio
1.50
1.30
1.10
0.90
2004-05 2005-6 2006-07 2007-08 2008-09
Year
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30. Financial analysis on EICL, TVM 2007-2010
INTERPRETATION: -
The quick ratio of English Indian clays shows satisfactory level because it is
more than the standard level (accepted level) of 1:1. The ratio had increased in the year 2005-
06 with a ratio of 1.82 and the lowest ratio was in the year 2006-07 with a ratio of 0.93.
From the above information it is concluded that the trend is increasing except
in the year 2006-07and2007-08.
3. Absolute liquidity ratio
Absolute Liquidity Ratio is obtained by dividing cash and marketable securities
by current liabilities. It is also known as position ratio. A ratio of 0.75:1 is recommended to
ensure liquidity. This test is more vigorous measure of a firm's liquidity position.
Absolute Liquidity Ratio
/
= (Cash + Marketable securities) Current liabilities
Table No: 4.3
Absolute Liquid Ratio
Absolute Quick Asset Current Absolute Liquid
Year
(crores) Liability(crores) Ratio
2004-05 5.10 29.30 0.17
2005-06 14.23 33.13 0.42
2006-07 5.79 47.80 0.12
2007-08 6.93 52.49 0.13
2008-09 5.17 48.92 0.10
2008-09 5.17 48.92 0.10
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31. Financial analysis on EICL, TVM 2007-2010
Graph No: 4.3- Absolute Liquid Ratio
0.50
Absolute Liquid Ratio
0.40
0.30
0.20
0.10
0.00
2004-05 2005-06 206-07 2007-08 2008-09
Year
INTERPRETATION: -
Absolute Liquid Ratio was highest in the year 2005-06 having a ratio of 0.42
and lowest in the year 2008-09. The Absolute Liquid Ratio of English Indian clays are not
near to the standard ratio which is 0.75:1.
The above given graph shows a decreasing trend except in the year 2005-06 in which
the ratio has been slightly increased.
B. LEVERAGE RATIOS
1. Debt-Equity Ratio
Debt equity ratio can be computed by dividing total debt by net worth. This ratio
indicates the relative proposition of debt and equity in financing assets of a firm. This ratio is
computed by dividing the total debt of the firm by its net worth. The term debt refers to the
total outside liabilities. It includes all current liabilities and other outside liabilities like loan
and debentures. The term equity refers to net worth or shareholders fund.
Debt Equity Ratio = Debt / Equity
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32. Financial analysis on EICL, TVM 2007-2010
Table No: 4.4
Debt Equity Ratio
Year Debt (crores) Equity (crores) Debt Equity Ratio
2004-05 98.72 86.69 1.14
2005-06 135.40 98.12 1.38
2006-07 141.18 127.58 1.11
2007-08 168.56 90.57 1.86
2008-09 175.83 102.42 1.71
Graph No: 4.4- Debt Equity Ratio
2.00
1.90
1.80
Debt Equity Ratio
1.70
1.60
1.50
1.40
1.30
1.20
1.10
2004-05 $2005-06 2006-07 2007-08 2008-09
Year
INTERPRETATION: -
The Debt Equity Ratio of the company has been fluctuating and showing a
decreasing trend over the last five year period. The ratio has declined from 0.37 in the year
2001-02 to 0.10 in the year 2004-05. This means owner‟s fund are more employed than
creditor‟s fund. Thus, in times of distress owners will suffer more than the creditors.
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33. Financial analysis on EICL, TVM 2007-2010
2. Proprietary ratio
Proprietary ratio relates to the shareholders funds to total assets. This ratio shows the
long term solvency of the business. It is calculated by dividing shareholders fund by the total
assets. The acceptable norm of this ratio 1:3. A high proprietary ratio will indicate a relatively
little danger to the creditors etc, in the event of forced reorganisation or winding up of the
company. A low proprietary ratio indicates greater risk to the creditors as shown in the above
table.
Proprietary Ratio =Shareholders Fund / Total Assets
Table No: 4.5
Proprietary Ratio
Year Shareholders Funds (croress) Total Assets (crores) Proprietary Ratio
2004-05 86.69 224.46 0.39
2005-06 98.12 286.62 0.34
2006-07 127.58 231.19 0.55
2007-08 90.57 247.19 0.37
2008-09 102.42 281.62 0.36
Graph No: 4.5- Proprietary Ratio
0.60
0.55
Proprietary Ratio
0.50
0.45
0.40
0.35
0.30
2004-05 2005-06 2006-07 2007-08 2008-09
Year
MTCST, Ayur Page 33
34. Financial analysis on EICL, TVM 2007-2010
INTERPRETATION: -
The above table shows that the Proprietary Ratio varies from 0.36 to 0.55.
During the period under study the Proprietary Ratio is found high in the year 2006-07 with
the ratio of 0.55 and lowest in the year 2005-06 with a ratio of 0.34.
The above given table shows the decreasing trend of English Indian clays except
in the case of 2006-07 in which Proprietary Ratio had come up slightly.
3. Fixed Asset to Net worth
The fixed assets ratio help in asserting the long-term solvency of a firm which depends
basically on whether the firm has adequate resources to meet its long term funds requirement.
The fixed assets ratio explains the firm has raised adequate long-tem funds to meet its fixed
assets requirements.
Fixed Asset Net worth = Fixed Asset / Long term funds or Net Worth
TABLE 4.6
Fixed Asset to Net worth Ratio
Fixed Asset Net worth
Year Ratio
(crores) (crores)
2004-05 135.97 86.69 1.57
2005-06 142.09 92.12 1.45
2006-07 151.64 127.58 1.19
2007-08 161.06 90.57 1.78
2008-09 202.47 102.42 1.97
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35. Financial analysis on EICL, TVM 2007-2010
Graph No: 4.6-Fixed Asset to Net worth Ratio
2.00
Fixed Asset to Net worth
1.90
1.80
1.70
1.60
Ratio
1.50
1.40
1.30
1.20
1.10
2004-05 2005-06 2006-07 2007-08 2008-09
Year
INTERPRETATION: -
The standard ratio is 50%. In all the year the ratio is more than
50%. This means that the position of English Indian clays is satisfactory. The above given
table shows the mixed trend English Indian clays of due to flexibility in the ratio.
C. ACTIVITY RATIOS / TURN OVER RATIOS
1. Working Capital Turn Over Ratio
The working capital turnover ratio is calculated by comparing sales with Net working
capital. Net working capital is the excess of current assets over current liabilities. The net
working capital obtained shows a positive sign because of increase in the current asset of the
company. The ratio shows how efficiently the utilization of assets is made. The high turnover
ratio implies this efficient utilization resource. A low ratio shows the capacity is not fully
utilizing. It is true in regard to this company.
Working Capital Turnover Ratio = Sales / Net Working Capital
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36. Financial analysis on EICL, TVM 2007-2010
Table No: 4.7
Working Capital Turnover
Net Working Capital Working Capital
Year Sales(crores)
(crores) Turnover Ratio
2004-05 171.69 25.91 6.57
2005-06 206.38 51.21 4.05
2006-07 243.61 31.75 7.56
2007-08 271.08 33.56 7.99
2008-09 285.35 30.23 9.43
Graph No: 4.7 Working Capital Turnover
10.00
Working Capital Turnover
9.00
8.00
7.00
6.00
5.00
4.00
2004-05 2005-06 2006-07 2007-08 2008-09
Year
INTERPRETATION: -
Working Capital Turnover Ratio stood at its maximum in the year 2008-09 with
a ratio of 9.43 and minimum in the year 2005-06 with a ratio of 4.05. The above given table
shows the mixed trend of English Indian clays due to flexibility in the ratio.
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37. Financial analysis on EICL, TVM 2007-2010
2. Fixed Asset Turnover Ratio
Fixed Asset Turnover Ratio indicates the extent to which the investments in fixed assets
contribute towards sales. This ratio shows the firm‟s ability in generating sales from all
financial resources committed to fixed assets.
Fixed Asset Turnover Ratio = Net Sales/ Fixed Assets
Table No: 4.8
Fixed Assets Turnover Ratio
Year Sales (crores) Total Asset (crores) Ratio
2004-05 171.69 237.31 0.72
2005-06 206.38 246.66 0.83
2006-07 243.61 282.21 0.86
2007-08 271.89 273.05 0.99
2008-09 285.35 293.04 0.97
Graph No: 4.8- Fixed Assets Turnover Ratio
1.00
Fixed Assets Turnover Ratio
0.95
0.90
0.85
0.80
0.75
0.70
0.65
0.60
2004-05 2005-06 2006-07 2007-08 2008-09
Year
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38. Financial analysis on EICL, TVM 2007-2010
INTERPRETATION: -
The turnover ratio is highest in the year 2007-08 with the ratio of 0.99 and
lowest in the year 2004-05 with the ratio of 0.72.The above given table shows the mixed
trend of English Indian clays due to flexibility in the ratio.
D. PROFITABILITY RATIOS
1. Gross Profit Ratio
The gross profit ratio plays an important role in two management areas. In the area of
financial management, the ratio serves as a valuable indicator of the firms ability to utilize the
effectively outside source of fund. Secondly, this ratio serves as important tool in shaping the
pricing policy.
Gross Profit Ratio = Gross Profit * 100 / Sales
(Gross Profit = Sales – Cost Of Goods Sold)
Table No: 4.9
Gross Profit Ratio
Year Gross Profit (crores) Net Sales (crores) Gross Profit Ratio
2004-05 25.49 171.69 15.82
2005-06 31.99 206.38 16.32
2006-07 35.92 243.61 14.97
2007-08 39.79 271.08 14.93
2008-09 39.28 285.35 13.76
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39. Financial analysis on EICL, TVM 2007-2010
Graph No: 4.9- Gross Profit Ratio
16.00
Gross Profit Ratio
15.00
14.00
13.00
2004-05 2005-06 2006-07 2007-08 2008-09
Year
INTERPRETATION: -
English Indian clays has reasonable gross margin to cover all operating expenses
and building up of results. From the analysis it is clear that, Gross Profit Ratio is highest in
the year 2005-06 with a ratio of 16.32 and lowest in the year 2008-09 with a ratio of 13.76.
The above given graph shows an decreasing trend from 2006-07 to 2008-09,
but the ratio considerably decreased in the year 2008-09.
2. Net Profit Ratio
This ratio is also called as the Net Profit to Sales or Net Profit
to Margin Ratio. This ratio is used to measure the overall profitability and hence it is very
useful to firms. It is an index of efficiency and profitability of the business, higher the ratio is
better the operation efficiency of the concern.
Formula: -
Net Profit Ratio = Net Profit * 100 / Sales
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40. Financial analysis on EICL, TVM 2007-2010
Table No: 4.10
Net Profit Ratio
Year Net Profit (crores) Net Sales (crores) Net Profit Ratio
2004-05 15.02 171.69 8.43
2005-06 17.66 206.38 8.63
2006-07 18.12 243.61 7.58
2007-08 19.39 271.08 7.40
2008-09 19.01 285.35 6.66
Graph No: 4.10- Net Profit Ratio
9.00
8.50
8.00
7.50
7.00
6.50
6.00
2004-05 2005-06 2006-07 2007-08 2008-09
INTERPRETATION: -
Net Profit is calculated after deducting non-operating expenses from operating
profit and adding non-operating income to such profit. Higher the ratio, the better it is,
because it gives efficiency to the concern. Net Profit is at its highest in the year 2005-06 with
a ratio of 8.36 and lowest in the year 2008-09 with a ratio of 6.6.
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41. Financial analysis on EICL, TVM 2007-2010
The above figure shows an increasing trend from 2004-05 to 2005-06, but
after that there is a decreasing trend from 2006-07 to 2008-09.
3. Return on Total Assets
Profitability can be measured in terms of relationship between
Net Profit and Total Assets. This ratio is also known as Gross Capital Employed. It measures
the profitability investments.
Formula: -
Return on Total Assets = Net Profit * 100 / Total Assets
Note: - Here, Net Profit Stands For Net Profit before Interest, Tax & Dividend.
Table No: 4.11
Return on Total Assets
Year Net Profit (crores) Net assets(crores) Ratio
2004-05 15.02 237.31 6.32
2005-06 17.66 246.66 7.16
2006-07 18.12 282.21 6.42
2007-08 19.39 273.05 7.10
2008-09 19.01 293.04 6.48
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42. Financial analysis on EICL, TVM 2007-2010
Graph No: 4.11- Return on Total Assets
10.00
Return on Total Assets
9.50
9.00
8.50
8.00
7.50
7.00
6.50
6.00
5.50
5.00
2004-05 2005-06 2006-07 2007-08 2008-09
Year
INTERPRETATION: -
The above table shows the Total Assets of the past five year. Total Assets
includes both Fixed Assets and Current Assets. From the above information it is easily
understand that the assets are properly utilized English Indian clays. The ratio is at the best in
the year 2005-06 with a ratio of 7.16 and lowest in the year 2004-05 having a ratio of 6.32
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43. Financial analysis on EICL, TVM 2007-2010
COMPARATIIVE INCOME STATEMENT
Table No: 4.12
Comparative Income Statement 2008-2009
2008 2009 Increase / Increase /
decrease decrease IN
%
Net sales 271.89 285.35 13.46 4.95
Expenditure
Manufacturing expense 176.09 185.06 8.97 5.09
Gross profit 95.08 100.29 5.21 5.47
Payment to &provision 22.63 26.03 3.4 15.02
to employees
Administration &other 10.94 11.27 0.33 3.01
Selling and distribution 9.69 8.65 (1.04) 10.73
R&D 1.02 1.10 .08 7.84
TOTAL 220.40 232.13 11.73 5.32
Profit Before Interest, 51.49 53.22 1.73 3.35
Depreciation And Tax
Interest 11.70 13.94 2.04 17.43
PBDT 39.79 39.27 (0.052) 0.13
Depreciation 8.95 10.25 1.3 14.52
PBT 30.83 29.02 (1.81) 5.87
TAX expense 11.44 10.00 (1.44) 12.58
PAT 19.39 19.01 (0.38) 1.95
Balance As Per Last 7.32 10.37 3.05 41.66
Year
Available For 26.71 36.38 9.67 36.20
Appropriation
C/F TO Balance sheet 17.37 18.32 0.95 5.46
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46. Financial analysis on EICL, TVM 2007-2010
COMPARATIVE INCOME STATEMENT
Table No: 4.14
Comparative Income Statement 2006-2007
2006 2007 Increase / Increase /
decrease decrease IN
%
Net sales 206.39 243.62 37.23 18.03
Expenditure
Manufacturing expense 125.75 155.27 29.52 23.47
Gross profit 80.64 88.35 7.71 9.56
Payment to &provision 16.34 20.14 3.8 23.26
to employees
Administration &other 10.88 10.78 (0.10) 0.9
Selling and distribution 10.81 11.00 0.19 1.75
R&D 0.79 0.84 .08 10.12
TOTAL 164.57 198.02 33.45 20.32
Profit Before Interest, 41.82 45.60 3.78 9.03
Depreciation And Tax
Interest 9.83 9.68 (0.15) 1.53
PBDT 32.00 35.93 3.93 12.28
Depreciation 7.50 7.83 0.33 4.4
PBT 24.49 28.09 3.6 14.7
TAX expense 6.82 9.96 3.14 46.04
PAT 17.66 18.12 0.46 2.60
Balance As Per Last 4.04 5.47 1.43 35.39
Year
Available For 21.70 23.60 1.9 8.75
Appropriation
C/F TO Balance sheet 5.47 7.36 1.89 34.55
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47. Financial analysis on EICL, TVM 2007-2010
COMPARATIVE BALANCE SHEET
Table No: 4.15 Comparative Balance Sheet 2006-2007
Assets 31/03/2006 31/03/2007 INCREASE INCREASE
/DECREASE /DECREASE
IN %
Net fixed assets 142.09 151.64 41.41 25.71
Capital W.I.P 2.38 5.62 (14.49) 55.85
Investments _ _ - -
Total 26.92 14.40
Inventories 24.15 35.02 (7.1) 20.37
Debtors 19.87 27.10 1.05 3.40
Cash & bank 14.23 5.79 (1.76) 25.40
balances
Other current 0.47 .92 0.03 30
assets
Loans and 25.60 11.38 1.57 11.75
advances
Total 86.05 79.14 (6.91) 8.03
(-)current (21.54) (31.40) 0.29 0.87
liabilities
()provisions (11.59) (15.69) (3.86) 20.10
Total (52.49) (48.92) (3.57) 6.80
Misc - -
expenditure
TOTAL 213.60 234.56 23.58 10.69
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48. Financial analysis on EICL, TVM 2007-2010
Liabilities 31/03/2006 31/03/2007 Increase / Increase /
decrease decrease IN %
Share 14.47 34.47 20 138.22
capital
Reserves& 83.65 93.1 9.45 11.30
Surplus
98.11 127.58 29.47 30.03
differed 0.81 0.06 (0.75) 92.59
Govt grants
Secured 90.22 83.32 (6.9) 7.64
loan
Unsecured 12.04 10.62 (1.42) 11.79
loan
102.27 93.94 (8.33) 8.15
Differed tax 13.13 13.52 0.39 2.97
liability
TOTAL 213.59 234.56 20.97 9.82
INTERPRETATION ON COMPARITIVE INCOME STATEMENT
1) The sales volume and manufacturing expense have increased by 4.95 and 5.09
respectively during the year ending 31st march 2009 as compared to the last year ending
31st march 2008.
2) Gross profit; have increased marginally from 95.08 in 2007-08 to 100.29in 2008-09, but
net profit show a decreasing trend as compared with the previous year 2008.
MTCST, Ayur Page 48
49. Financial analysis on EICL, TVM 2007-2010
From the above analysis it is evident that percentage increase in cost was more as
compared to the percentage increase in sales.net profit have decreased in spite of increase in
administrative and payment made to the employees. it is all because of the appreciable
increase in the cost of goods sold. Increase in the cost of goods sold may be because of
increase in price of materials use or goods purchased and increase in labour rates or other
manufacturing expenses. Management cannot reduce the cost if it is due to the over all
increase in the cost is as a result of in efficiency of input.
INTERPRETATION OF COMPARITIVE BALNCESHEET
Interpretation of comparative balance sheet shows that long that long term fund like
share capital and debentures have been raised for acquiring more fixed assets for expanding
business. Fixed assets have increased by 25.71% as compared to the last year. This has been
made possible by decrease in inventories. It is a step in right direction because expansion of
business is possible with increase in fixed assets. Debt equity ratio in lower side so there is a
scope for arranging long-term loan for further expansion.
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50. Financial analysis on EICL, TVM 2007-2010
CASH FLOW STATEMENT
Table No: 4.16 Cash Flow Statement
Particulars Years
2005 2006 2007 2008 2009
Cash flow from
operating activities
Net profit before tax 18.82 24.49 28.09 30.83 29.02
Operating profit 29.02 35.48 43.64 52.29 49.07
before working
capital changes
Cash generated from 30.19 30.14 34.16 51.90 53.89
operations
Net Cash from 26.46 29.36 23.8 39.98 43.72
operating activities
Cash flow from
investment
Net cash used in (108.07) (37.15) (18.07) (42.69) (30.80)
investing activities
Cash flow from
financing activities :
Net cash used in (17.31) (21.93) (5.51) 3.49 (15.18)
financing activities
Net 1.25 .83 .17 .77 (2.26)
Increase/(Decrease)
in Cash & Cash
Equivalents
Cash and Cash 1.88 3.13 3.95 4.12 4.90
equivalents at the
beginning of the year
Cash and Cash 3.12 3.95 4.12 4.90 2.63
equivalents at the
end.
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51. Financial analysis on EICL, TVM 2007-2010
WORKING CAPITAL ANALYSIS
Working Capital is the excess of current assets over current liabilities. This ratio is
calculated to study the efficiency with which the working capital is utilized in the business
Working capital= current assets- current liability
Table No: 5.18
Working Capital Analysis
Particulars 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Current 55.29 84.33 79.55 86.05 79.14
assets
Current 29.38 33.13 47.80 52.50 48.92
liability
Net working 25.91 51.21 31.80 33.56 30.22
capital
Graph No: 5.12- Working Capital Analysis
60.00
Working Capital Analysis
55.00
50.00
45.00
40.00
35.00
30.00
25.00
20.00
2004-05 2005-2006 2006-07 2007-08 2008-09
Year
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52. Financial analysis on EICL, TVM 2007-2010
INTERPRETATION
Working capital of the company showing a downward trend from the year 2005-
06. Working capital is come down from 51.21 in 2005-06 to 30.22 in 2008-09.
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54. Financial analysis on EICL, TVM 2007-2010
FINDINGS
The current ratio of the firm though not an ideal one (2:1), because the company the
attained the satisfactory ratio only in the year 2005-2006.the current ratio shows a
satisfactory position in meeting short term obligation.
Quick ratio is highly satisfactory; English Indian Clays can attain the satisfactory level of
1:1 almost all the years. quick ratio is very high during the year 2004-05
The super quick ratio shows that the firm has not in a position to borrow from the market.
The favorable super quick ratio is 0.75:1.but the company can only attain a high ratio of
0.39 during the year 2004-05, which is not a satisfactory performance of the company.
The proprietary ratio is very low which shows relatively high risk to creditors. The
company‟s financial position is very bad.
Fixed asset to net worth ratio is satisfactory to the whole period, the favorable position is
50% but the company can attain more than 50% in entire five years.
In Gross-profit ratio higher the ratio, the better it is. The company can achieve a high ratio
of 15.82 during the year 2004-05.but we can see that the ratio is come down in the entire
period after that.
Net profit ratio explains per rupee profit generating capacity of sales. The amount of net
profit and volume of sales increased by year by year but the ratio shown a downward
trend.
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55. Financial analysis on EICL, TVM 2007-2010
Working capital turns over ratio, the higher the ratios, the lower is the investment in
working capital and the greater are the profits. During the period of 2008-09 the company
can attain a high ratio of 9.43.
Fixed Asset turn Ratio shows a fluctuating trend sometimes nearing to the ideal one. Any
way the company is in a position to meet the long-term requirement.
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56. Financial analysis on EICL, TVM 2007-2010
SUGGESTIONS
The company should concentrate on the long-term solvency of the business. Company
should make effective measures to reduce the total debt.
The market condition should be properly analyzed before procurement of material.
Liquid and long term solvency is satisfactory and the company should try to keep more
liquid assets.
Low rate of gross profit is due to the increase in the operating expense.
The proprietary ratio is not in a satisfactory level. So the company should give more focus
on general financial strength.
The company should pay more attention towards the gross profit ratio and net profit ratio
because both of these are showing a downward trend.
Working capital turn over ratio is satisfactory. The company should give more attention
to attain a higher ratio that will increase the profitability.
Fixed asset turn over ratio shows a mixed trend so the company should take the necessary
steps to meet the higher ratio.
Working capital ratio should be improved because low working capital ratio indicates a
lower profit.
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57. Financial analysis on EICL, TVM 2007-2010
CONCLUSION
EICL is an epitome of industrial success in the customer state of Kerala. From a very
modest beginning the company has reached its present status of glory. As a clay mining,
manufacturing, and processing unit, the company‟s ability to sustain a steady and time bound
supply schedule coupled with its constant striving for excellence has given it that extra edge
over all its competitors in the field. The combined effort of the management and workers has
ensured that the company never lost its course. Today the firm is well known for its
consistent performance and the quality of its products and work force. In a state that is
notorious for its militant trade unionism EICL has succeeded in maintaining a peaceful
industrial climate.
The company‟s working capital position shows a positive trend which shows good or
satisfactory existences in current period. But we can see that the amount of sales is increasing
at a healthy rate, but the amount of net profit after depreciation and tax going in a decreasing
trend. This is mainly due to the increase in the cost of goods sold and increase in the
manufacturing and labour cost. We can also see that an increase in the amount of share
capital from 14.47 in 2004-07 to 33.47 in 2007-08, this will help to make more and more
fund flowing towards the fixed assts and other manufacturing facilities.
The project work entitled “Analysis of Financial Statement in English Indian Clays
Ltd is the study of the proportion of financial resources in the company and how much it is
effective. Such a study will give practical awareness regarding internal functioning of an
organisation for this reason the study is relevant for students specialising finance.
MTCST, Ayur Page 57
