SRI SAI POULTRIES nizamabad

1. INTRODUCTION
Analysis refers to the process of critical examination of the financial
information contained in the financial statement in order to understand and make decisions
regarding the operations of the firm. The analysis is basically study of the relationship
among various financial facts and figure as given in a set of financial statements.
Complex figures as given in this statements are dissectedbroken up into simple
and variable elements and significant relationship are established between the elements
of the same statements are different financial statements.
This process of dissection, establishing and identifying the financial weaknesses
and strengths of the firm. It is indicative of two aspects of a firm i.e. The profitability and
the financial position and it are what are known as the objectives of the analysis.
Types of Financial Analysis
on the basis on the basis
of material of modus
used operandi
I.On the basis of material used:-According to material used,
Financial analysis can be of two types:
1. External analysis:-
This analysis is done by outsiders who do not have access to the detailed internal accounting
records of the business firm. These outsiders include investors, potential investors, creditors,
potential creditors, government agencies, credit agencies and the general public.
2. Internal Analysis:-
The analysis conducted by persons who have access to the internal accounting records of a
business firm is known as internal analysis. Such an analysis can, therefore, be performed by
executives and employees of the organization as well as government agencies which have
statutory powers vested in them.
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2. II. On the basis of modus operandi:-
According to the method of operation followed in the analysis, financial analysis can also be
of
1. Horizontal analysis:-
Horizontal analysis refers to the comparison of financial data of a company for several
years. The figures for this types of analysis are presented horizontally over a number of
columns. The figures of the various year are compared with standard or base year. This
type of analysis is also ‘Dynamic analysis’ as it is based on the data from year to year
rather than on
2. Vertical Analysis:-
Vertical analysis refers to the study of relationship of the various items in the financial
statements of one accounting period. In the types of analysis is the figures from financial
statement of a year are compared with a base selected from the same year’s statement. It
is also known as ‘Static analyses.
Procedure of Financial Statements Analysis
Broadly speaking there are three steps involved in the analysis of financial
statements. There are:
I. Selection,
II. Classification,
III. Interpretation.
The first step involves selection of information (data). The second step involved is
the methodical classification of the data and the third step includes drawing of internees and
conclusions.
The following procedure is adopted for the analysis and
Interpretation of financial statements:
1. The analyst should acquaint himself with the principles and postulates of accounting.
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3. 2. The extent of analysis should be determined so that the sphere of work may be
decided.
3. The financial data given in the statements should be re-organized and re-arranged.
4. A relationship is established among financial statements with the help of tools and
techniques of analysis such as ratios, trends, common size, funds flow etc.,
5. The information is interpreted in a simple and understandable way. The significance
and utility of financial data is explained for helping decision-taking.
6. The conclusions drawn from interpretation are presented to the management in the
form of reports.
Definitions :
“Financial statement essentially or intern reports presented annually and reflect a
division of life of the enterprise into more or less accounting period. Non frequently a year”
 Anthony
“Financial statements are the products of financial accouring prepared by the
accountant the result of activities and analysis of what has been with earning”
 Smith
SCOPE OF THE STUDY
Analysis of financial statement can be undertaken by different persons and for
different purposes, therefore, the scope of the AFS may be varying from one
situation to another.
However, the following are some the techniques of the AFS:
a) Comparative financial statements.
b) Common-size financial statements.
c) Trend percentage analysis.
d) Statement of changes in financial position.
e) Cost-volume-profit relations, and
f) Ratio analysis and others.
The last technique i.e. The ratio analysis is the most common, comprehensive and
powerful tool of the AFS. The importance of ratio analysis lies in the fact that
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4. it presents facts on a comparative basis. As such, this study focuses only on this (ratio)
analysis.
NEED FOR STUDY
 Need of financial management study to diagnose the information contain in financial
statement. So as to judge the profitability and financial position of the firm.
 Financial analyst analyses the financial statements with various tools of analysis
before commanding upon the financial health of the firm.
 Essential to bring out the history.
 Significance and meaning of the financial statements.
BENEFITS OF THE STUDY :
 It provides an idea to the investors on investing their funds in the particular company
 Regulatory authorities can ensure company follows the required accounting standards
 Helpfully to the govt agencies analyzing the taxation over the firm
 Company is able to analyze the own performance over a specific time period
 It reveals sources and applications of funds in a nutshell which help in taking
decisions
LIMITATIONS OF THE STUDY
 The accuracy of financial into information largly depends on how accurately financial
statements are prepared
 The information derived from such statements may not be effective in co-operate
planning
 It fails to only quantitative into above the companies financial affairs
 Therefore comparative analysis of financial statements of different years cant be done.
 Analysis without adequate knowledge of subject matter lead to declaration.
OBJECTIVES AND METHODOLOGY
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5. OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS
The financial management is generally concerned with procurement, allocation and control of
financial resources of a concern. The objectives can be-
1. To ensure regular and adequate supply of funds to the concern in Sri Sai Poultries.
2. To ensure adequate returns to the shareholders this will depend upon the earning
capacity, market price of the share, expectations of the shareholders in Sri Sai
Poultries.
3. To ensure optimum funds utilization. Once the funds are procured, they should be
utilized in maximum possible way at least cost.
4. To ensure safety on investment, i.e, funds should be invested in safe ventures so that
adequate rate of return can be achieved.
5. To plan a sound capital structure-There should be sound and fair composition of
capital so that a balance is maintained between debt and equity capital.
6. Interpret financial reports
7. Including income statements, Profits and Loss or P&L, cash flow statements and
balance sheet statements.
8. Improve the allocation of working capital within business operations.
9. Review and fine tune financial budgeting, and revenue and cost forecasting.
RESEARCH DESIGN
This is a systematic way to solve the research problem and it is important component
for the study without which researches may not be able to obtain the format. A research
design is the arrangement of conditions for collection and analysis of data in a manager that
aims to combine for collection and analysis of data relevance to the research purpose with
economy in procedure.
MEANING OF RESEARCH DESIGN
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6. The formidable problem that follows the task of defining the research problem is the
preparation of design of the research project, popularly known as the research design,
decision regarding what, where, when, how much, by what means concerning an inquiry of a
research study constitute a research design. A research design is the arrangement of
conditions for collection and analysis of data in a manager that aims to combine for collection
and analysis of data relevance to the research purpose with economy in procedure.
SOURCES OF DATA
Data we collected based on two sources.
 Primary data.
 Secondary data.
Primary data
The Primary data are those information’s, which are collected afresh and for the first
time, and thus happen to be original in character.
Secondary Data:
The Secondary data are those which have already been collected by some other
agency and which have already been processed. The sources of Secondary data are Annual
Reports, browsing Internet, through magazines.
1. It includes data gathered from the annual reports of Sri Sai Poultries.
2. Articles are collected from official website of Sri Sai Poultries.
HYPOTHESIS:
• H1 accept. The financial position of a company is increasing
• H0 accept. The financial position of a company is detraining
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7. METHODOLOGY USED:
1. TYPES OF FINANCIAL STATEMENTS ADOPTED:
Following two types of financial statements are adopted in analyzing the firm
financial position
a. BALANCE SHEET.
b. Profit and Loss statements.
2. TOOLS OF FINANCIAL STATEMENT ANALYSIS USED
The following financial analysis tools are used in order to interpret the
financial position of the firm.
LIMITATIONS OF FINANCIAL STATEMENT:
1. ONLY INTERIM REPORTS:
Only interim statements don’t give a final picture of the concern. The data given in
these statements is only approximate. The actual position can only be determined when the
business is sold or liquidated.
2. DON’T GIVE EXTRA POSITION:
The financial statements are expressed in monetary values, so they appear to give
final and accurate position. The values of fixed assets in the balance sheet neither represent
the value for which fixed assets can be sold nor the amount which will be required to replace
these assets.
3. HISTORICAL COSTS:
The financial statements are prepared on the basis of historical costs or original costs.
The value of assets decreases with the passage of time current price changes are not taken
into account. The statements are not prepared keeping in view the present economic
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8. conditions. The balance sheet loses the significance of being an index of current economic
realities.
4. ACT OF NON MONITORY FACTORS IGNORED:
There are certain factors which have a bearing on the financial position and operating
results of the business but they don’t become a part of these statements because they can’t be
measured in monetary terms. Such factors may include in the reputation of the management.
NO PRECISION:
The precision of financial statement data is not possible because the statements deal
with matters which can’t be precisely stated. The data are recorded by conventional
procedures followed over the years. Various conventions, postulates, personal judgments etc.
CONCEPT OF FINANCIAL STATEMENT ANALYSIS:
The concept of financial statement analysis is based on mainly two aspects.
CURRENT ASSETS CURRENT LIABILITIES
 Cash in hand / at bank
 Bills receivable
 Sundry debtors
 Short term loans
 Temporary investment
 Accrued incomes
 Bills payable
 Sundry creditor
 Outstanding expenses
 Bank over draft
 Accrued expenses
METHODS OF FINANIAL STATEMENT ANALYSIS :
The analysis an interpretation of financial statements is used to determine the
financial position and results of operation as well.
The following methods nof analysis are generally used:-
1. Comparative statement
2. Common size statement
3. Trend analysis
4. Ratio analysis
5. Funds flow analysis
6. Cash flow analysis
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9. COMPARATIVE STATEMENT :
Comparative financial statements are 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 this statement figures of two or more periods are
placed side by side to facilitate comparison .
But the income statement and balance sheet can be prepared in form of comparative
financial statement.
COMPARATIVE INCOME STATEMENT
A comparative income statement shows the absolute figures for two or more periods
and the absolute change from one period to another period. The income statement discloses
net profit or net los an account of operations. Since the figures are shown side by side the
reader can quickly ascertain that sales have increased or decreased. It is calculated as
COMPARATIVE BALANCE SHEET
Comparative balance sheet shows as one or two or more 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 in a 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.
GUIDELINES FOR INTERPRETATION OF COMPARATIVE BALANCE SHEET .
While interpretation comparative balance sheet the interpreter is on expected to study
the following aspects
1. Current financial position and liquidity position
2. Long term financial position
3. Profitability of the concern
It is calculated as
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10. COMPARATIVE FINANCIAL STATEMENT – ADVANTAGES
The comparative financial statements are useful for analysis of the following
1. Comparative statement indicates trend in sales. Cost of production , profits etc… and
help the analyst to evaluate the performance of company
2. Comparative statements can also be used to compare the performance of the firm with
the average performance of the industry or inter firm comparison
WEAKNESS :
The comparative financial statements suffer with following weaknesses
1. Inter firm comparison can be misleading if the firms are not identical in size
2. It can also mislead, if the period has witnessed changed in accounting policies.
3. There can also be problem with different accounting procedures with regard to
depreciation inventory valuation etc..
COMMON SIZE STATEMENT :
The common size statements balance and income statements are shown in analytical
percentage. The figures are shown as percentage of total assets liabilities and total sales. The
total assets are taken as hundred and different assets are expressed as a percentage of the
total. Similarly various liabilities are taken as a part of total liabilities. These statements are
also known as component percentage of hundred percent statements because every individual
item is stated as a percentage of total hundred.
COMMON SIZE INCOME STATEMENT :
In common size income statement, the sales figure is taken as hundred and all other
figures of cost and expenses are expressed as percentage to sale when other cost and expenses
are reduced from sale figure of hundred. The balance figures is taken as net profit this reveals
the efficiency of the firm in generating revenue which leads to profitability and we can make
analysis of different components.
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11. COMMON SIZE BALANCE SHEET
In common size balance sheet, the total of assets side or liabilities is taken as hundred
and all figures of assets and liabilities, capital reserve are expressed as a proportion of the
total that is hundred. It reveals the proportion of fixed assets to current assets composition of
fixed assets and current assets and composition of current liabilities.
TREND ANALYSIS :
The financial statements may be analyzed by computing trends of series of
information. This method determines upwards or downwards and involve the computation of
the percentage relationship that each statement item leaves to same item in base year. The
information for number of years are taken up and one generally the first year is taken as the
base year.
FUNDS FLOW ANALYSIS :
This statement is prepared in order to know clearly the various sources where from
the funds are procured to finance the activities of a business concern during the accounting
period and also bring to highlight the uses of these funds.
CASH FLOW ANALYSIS
This statement is prepared to known clearly the various items of inflow and out flow
of cash. It is an essential tool for the short term financial analysis and is very helpful in the
evaluation of current liquidity of business concern.
RATIO ANALYSIS :
It is done to develop meaningful relationship between individual items or groups of
items usually shown in periodical financial statements published by the concern an
accounting ration shows the relationship between the two interrelated accounting figures as
gross profit to sale current asset to current liabilities loaned capital to own capital etc. ratio
should not be calculated between the unrelated figures as sales and discount on issue of
shares operating costs & equity capital etc..
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12. COST VOLUME PROFIT ANALYSIS :
According to the terminology of cost accounting of the institute of cost and
management accountants, marginal cost represents the amount of any given volume of out
put is increased by one unit . in this context a unit may be single article a batch of articles and
order a stage of production capacity, a man noun a process or a department.
SIGNIFICANCE OF FINANCIAL STATEMENT ANALYSIS :
Financial statement analysis is a significance business activity because a corporations
financial statement provides useful information on its economic standing profit levels. These
statements also help an investor, a regulator or a company top management understanding
operating data, evaluate cash receipts and payments during a period and a price owners
investment in the company.
Figure:1
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13. FACTORS ASSOCIATED WITH FINANCIAL CAPABILITY :
Every financial capability is effected by some of the factors in the organization some
of them or categorized here.
Figure:2
Insufficient income was regarded as major component to develop financial capability.
It is an effect on a self esteem and self belief.
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14. DETERMINANTS OF FINANCIAL ANALYSIS:
The determinants of financial statement analysis of firm is the form of measures of
individual relationship in models linking various hypothesized casual wearable’s to various
performance measures. The casual variables usually describe some combination of elements
of environment.
FINANCIAL STATEMENTS IN TERMS OF 5 COMPONENTS:
1. Cash & Equivalents : A good cash budgeting and forecasting systems provides
answers to key questions such as it is the cash level adequate to meet current expenses
as they come due? When & how much bank borrowing will be needed to meet any
cash shortfalls? When will be repayment expected ?
2. Amortization: Repayment of loan principal and interest a loan can be amortized in
several ways in including (a) in equal installments of amortization, where the interest
component of the payment reduces as the principal is paid down. (b) in regular
payment of varying amounts, often called “commercial Amortization which results
from paying of a constant principal each installment plus interest on the amount of
principal owd”.
3. Assets: An item of current or future economic benefit to an organization. Examples
cash, short terms investments, accounts receivable, grants receivable, inventories,
prepaid expenses, buildings, furniture’s and long term investments.
4. Audit: A financial statement as of a certain date, usually covering a 12 month period,
prepared by certified public accountant (CPA), that includes an opinion letter ,a
statement of financial position(Balance sheet), a statement of activities (Income
statements). A auditor can have an unqualified opinion, stating that the organization
appears to have followed all accounting rules.
5. Depreciation: A non cash expense associated with reducing a fixed asset book value
due to general wear and tear over its defined accounting or useful life. Depreciation is
only an approximation of the amount needed to replace fixed assets.
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15. LITERATURE REVIEW
Financial statement analysis (or financial analysis) the process of understanding the
risk and profitability of a firm (business, sub-business or project) through analysis of reported
financial information, particularly annual and quarterly reports.
Financial statement analysis consists of 1) reformulating reported financial statements, 2)
analysis and adjustments of measurement errors, and 3) financial ratio analysis on the basis of
reformulated and adjusted financial statements. The two first steps are often dropped in
practice, meaning that financial ratios are just calculated on the basis of the reported numbers,
perhaps with some adjustments. Financial statement analysis is the foundation for evaluating
and pricing credit risk and for doing fundamental company valuation.
1. Financial statement analysis typically starts with reformulating the reported financial
information. In relation to the income statement, one common reformulation is to
divide reported items into recurring or normal items and non-recurring or special
items. In this way, earnings could be separated in to normal or core earnings and
transitory earnings. The idea is that normal earnings are more permanent and hence
more relevant for prediction and valuation. Normal earnings are also separated into
net operational profit after taxes (NOPAT) and net financial costs. The balance sheet
is grouped, for example, in net operating assets (NOA), net financial debt and equity.
2. Analysis and adjustment of measurement errors question the quality of the reported
accounting numbers. The reported numbers can for example be a bad or noisy
representation of invested capital, for example in terms of NOA, which means that the
return on net operating assets (RNOA) will be a noisy measure of the underlying
profitability (the internal rate of return, IRR). Expensing of R&D is an example when
such investment expenditures are expected to yield future economic benefits,
suggesting that R&D creates assets which should have been capitalized in the balance
sheet. An example of an adjustment for measurement errors is when the analyst
removes the R&D expenses from the income statement and put them in the balance
sheet. The R&D expenditures are then replaced by amortization of the R&D capital in
the balance sheet. Another example is to adjust the reported numbers when the analyst
suspects earnings management.
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16. 3. Financial ratio analysis should be based on regrouped and adjusted financial
statements. Two types of ratio analysis are performed: 3.1) Analysis of risk and 3.2)
analysis of profitability:3.1) Analysis of risk typically aims at detecting the underlying
credit risk of the firm. Risk analysis consists of liquidity and solvency analysis.
Liquidity analysis aims at analyzing whether the firm has enough liquidity to meet its
obligations when they should be paid. A usual technique to analyze illiquidity risk is
to focus on ratios such as the current ratio and interest coverage. Cash flow analysis is
also useful. Solvency analysis aims at analyzing whether the firm is financed so that it
is able to recover from a loss or a period of losses. A usual technique to analyze
insolvency risk is to focus on ratios such as the equity in percentage of total capital
and other ratios of capital structure. Based on the risk analysis the analyzed firm could
be rated, i.e. given a grade on the riskiness, a process called synthetic rating.Ratios of
risk such as the current ratio, the interest coverage and the equity percentage have no
theoretical benchmarks. It is therefore common to compare them with the industry
average over time. If a firm has a higher equity ratio than the industry, this is
considered less risky than if it is above the average. Similarly, if the equity ratio
increases over time, it is a good sign in relation to insolvency risk.3.2) Analysis of
profitability refers to the analysis of return on capital, for example return on equity,
ROE, defined as earnings divided by average equity. Return on equity, ROE, could be
decomposed: ROE = RNOA + (RNOA - NFIR) * NFD/E, where RNOA is return on
net operating assets, NFIR is the net financial interest rate, NFD is net financial debt
and E is equity. In this way, the sources of ROE could be clarified.
Unlike other ratios, return on capital has a theoretical benchmark, the cost of
capital - also called the required return on capital. For example, the return on equity,
ROE, could be compared with the required return on equity, kE, as estimated, for
example, by the capital asset pricing model. If ROE < kE (or RNOA > WACC, where
WACC is the weighted average cost of capital), then the firm is economically
profitable at any given time over the period of ratio analysis. The firm creates values
for its owners.
Insights from financial statement analysis could be used to make forecasts and
to evaluate credit risk and value the firm's equity. For example, if financial statement
analysis detects increasing superior performance ROE - kE > 0 over the period of
financial statement analysis, then this trend could be extrapolated into the future. But
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17. as economic theory suggests, sooner or later the competitive forces will work - and
ROE will be driven toward kE.
A financial statement (or financial report) is a formal record of the financial activities of a
business, person, or other entity. In British English—including United Kingdom company
law—a financial statement is often referred to as an account, although the term financial
statement is also used, particularly by accountants.
For a business enterprise, all the relevant financial information, presented in a
structured manner and in a form easy to understand, are called the financial statements. They
typically include four basic financial statements, accompanied by a management discussion
and analysis:
1. Statement of Financial Position: also referred to as a balance sheet, reports on a
company's assets, liabilities, and ownership equity at a given point in time.
2. Statement of Comprehensive Income: also referred to as Profit and Loss statement
(or a "P&L"), reports on a company's income, expenses, and profits over a period of
time. A Profit & Loss statement provides information on the operation of the
enterprise. These include sale and the various expenses incurred during the processing
state.
3. Statement of Changes in Equity: explains the changes of the company's equity
throughout the reporting period
4. Statement of cash flows: reports on a company's cash flow activities, particularly its
operating, investing and financing activities.
For large corporations, these statements are often complex and may include an
extensive set of notes to the financial statements and explanation of financial policies and
management discussion and analysis. The notes typically describe each item on the balance
sheet, income statement and cash flow statement in further detail. Notes to financial
statements are considered an integral part of the financial statements.
Purpose of financial statements by business entities
"The objective of financial statements is to provide information about the financial
position, performance and changes in financial position of an enterprise that is useful to a
wide range of users in making economic decisions." Financial statements should be
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18. understandable, relevant, reliable and comparable. Reported assets, liabilities, equity, income
and expenses are directly related to an organization's financial position.
Financial statements are intended to be understandable by readers who have "a
reasonable knowledge of business and economic activities and accounting and who are
willing to study the information diligently." Financial statements may be used by users for
different purposes:
• Owners and managers require financial statements to make important business
decisions that affect its continued operations. Financial analysis is then performed on
these statements to provide management with a more detailed understanding of the
figures. These statements are also used as part of management's annual report to the
stockholders.
• Employees also need these reports in making collective bargaining agreements (CBA)
with the management, in the case of labor unions or for individuals in discussing their
compensation, promotion and rankings.
• Prospective investors make use of financial statements to assess the viability of
investing in a business. Financial analyses are often used by investors and are
prepared by professionals (financial analysts), thus providing them with the basis for
making investment decisions.
• Financial institutions (banks and other lending companies) use them to decide
whether to grant a company with fresh working capital or extend debt securities (such
as a long-term bank loan or debentures) to finance expansion and other significant
expenditures.
• Government entities (tax authorities) need financial statements to ascertain the
propriety and accuracy of taxes and other duties declared and paid by a company.
• Vendors who extend credit to a business require financial statements to assess the
creditworthiness of the business.
• Media and the general public are also interested in financial statements for a variety of
reasons.
Government financial statements
The rules for the recording, measurement and presentation of government financial
statements may be different from those required for business and even for non-profit
organizations. They may use either of two accounting methods: accrual accounting, or cash
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19. accounting, or a combination of the two (OCBOA). A complete set of chart of accounts is
also used that is substantially different from the chart of a profit-oriented business
Financial statements of not-for-profit organizations
The financial statements that not-for-profit organizations such as charitable
organizations and large voluntary associations publish, tend to be simpler than those of for-
profit corporations. Often they consist of just a balance sheet and a "statement of activities"
(listing income and expenses) similar to the "Profit and Loss statement" of a for-profit.
Charitable organizations in the United States are required to show their income and net assets
(equity) in three categories: Unrestricted (available for general use), Temporarily Restricted
(to be released after the donor's time or purpose restrictions have been met), and Permanently
Restricted (to be held perpetually, e.g., in an Endowment).
Personal financial statements
Personal financial statements may be required from persons applying for a personal
loan or financial aid. Typically, a personal financial statement consists of a single form for
reporting personally held assets and liabilities (debts), or personal sources of income and
expenses, or both. The form to be filled out is determined by the organization supplying the
loan or aid.
Audit and legal implications
Although laws differ from country to country, an audit of the financial statements of a
public company is usually required for investment, financing, and tax purposes. These are
usually performed by independent accountants or auditing firms. Results of the audit are
summarized in an audit report that either provide an unqualified opinion on the financial
statements or qualifications as to its fairness and accuracy. The audit opinion on the financial
statements is usually included in the annual report.
There has been much legal debate over who an auditor is liable to. Since audit reports
tend to be addressed to the current shareholders, it is commonly thought that they owe a legal
duty of care to them. But this may not be the case as determined by common law precedent.
In Canada, auditors are liable only to investors using a prospectus to buy shares in the
primary market. In the United Kingdom, they have been held liable to potential investors
when the auditor was aware of the potential investor and how they would use the information
in the financial statements. Nowadays auditors tend to include in their report liability
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20. restricting language, discouraging anyone other than the addressees of their report from
relying on it. Liability is an important issue: in the UK, for example, auditors have unlimited
liability.
In the United States, especially in the post-Enron era there has been substantial concern about
the accuracy of financial statements. Corporate officers (the chief executive officer (CEO)
and chief financial officer (CFO)) are personally liable for attesting that financial statements
"do not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by th[e] report."
Making or certifying misleading financial statements exposes the people involved to
substantial civil and criminal liability. For example Bernie Ebbers (former CEO of
WorldCom) was sentenced to 25 years in federal prison for allowing WorldCom's revenues to
be overstated by billion over five years.
Standards and regulations
Different countries have developed their own accounting principles over time, making
international comparisons of companies difficult. To ensure uniformity and comparability
between financial statements prepared by different companies, a set of guidelines and rules
are used. Commonly referred to as Generally Accepted Accounting Principles (GAAP), these
set of guidelines provide the basis in the preparation of financial statements, although many
companies voluntarily disclose information beyond the scope of such requirements.
Recently there has been a push towards standardizing accounting rules made by the
International Accounting Standards Board ("IASB"). IASB develops International Financial
Reporting Standards that have been adopted by Australia, Canada and the European Union
(for publicly quoted companies only), are under consideration in South Africa and other
countries. The United States Financial Accounting Standards Board has made a commitment
to converge the U.S. GAAP and IFRS over time.
Inclusion in annual reports
To entice new investors, most public companies assemble their financial statements
on fine paper with pleasing graphics and photos in an annual report to shareholders,
attempting to capture the excitement and culture of the organization in a "marketing
brochure" of sorts. Usually the company's chief executive will write a letter to shareholders,
describing management's performance and the company's financial highlights.
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21. In the United States, prior to the advent of the internet, the annual report was considered the
most effective way for corporations to communicate with individual shareholders. Blue chip
companies went to great expense to produce and mail out attractive annual reports to every
shareholder. The annual report was often prepared in the style of a coffee table book.
Moving to electronic financial statements
Financial statements have been created on paper for hundreds of years. The growth of
the Web has seen more and more financial statements created in an electronic form which is
exchangeable over the Web. Common forms of electronic financial statements are PDF and
HTML. These types of electronic financial statements have their drawbacks in that it still
takes a human to read the information in order to reuse the information contained in a
financial statement.
More recently a market driven global standard, XBRL (Extensible Business Reporting
Language), which can be used for creating financial statements in a structured and computer
readable format, has become more popular as a format for creating financial statements.
Many regulators around the world such as the U.S. Securities and Exchange Commission
have mandated XBRL for the submission of financial information.
The UN/CEFACT created, with respect to Generally Accepted Accounting Principles,
(GAAP), internal or external financial reporting XML messages to be used between
enterprises and their partners, such as private interested parties (e.g. bank) and public
collecting bodies (e.g. taxation authorities). Many regulators use such messages to collect
financial and economic information.
In financial accounting, a balance sheet or statement of financial position is a
summary of the financial balances of a sole proprietorship, a business partnership, a
corporation or other business organization, such as an LLC or an LLP. Assets, liabilities and
ownership equity are listed as of a specific date, such as the end of its financial year. A
balance sheet is often described as a "snapshot of a company's financial condition". Of the
four basic financial statements, the balance sheet is the only statement which applies to a
single point in time of a business' calendar year.
21

22. A standard company balance sheet has three parts: assets, liabilities and ownership
equity. The main categories of assets are usually listed first, and typically in order of
liquidity. Assets are followed by the liabilities. The difference between the assets and the
liabilities is known as equity or the net assets or the net worth or capital of the company and
according to the accounting equation, net worth must equal assets minus liabilities.
Another way to look at the same equation is that assets equals liabilities plus owner's
equity. Looking at the equation in this way shows how assets were financed: either by
borrowing money (liability) or by using the owner's money (owner's equity). Balance sheets
are usually presented with assets in one section and liabilities and net worth in the other
section with the two sections "balancing."
A business operating entirely in cash can measure its profits by withdrawing the entire
bank balance at the end of the period, plus any cash in hand. However, many businesses are
not paid immediately; they build up inventories of goods and they acquire buildings and
equipment. In other words: businesses have assets and so they cannot, even if they want to,
immediately turn these into cash at the end of each period. Often, these businesses owe
money to suppliers and to tax authorities, and the proprietors do not withdraw all their
original capital and profits at the end of each period. In other words businesses also have
liabilities.
Types
A balance sheet summarizes an organization or individual's assets, equity and
liabilities at a specific point in time. We have two forms of balance sheet. They are the report
form and the account form. Individuals and small businesses tend to have simple balance
sheets. Larger businesses tend to have more complex balance sheets, and these are presented
in the organization's annual report. Large businesses also may prepare balance sheets for
segments of their businesses. A balance sheet is often presented alongside one for a different
point in time (typically the previous year) for comparison.
Personal balance sheet
A personal balance sheet lists current assets such as cash in checking accounts and
savings accounts, long-term assets such as common stock and real estate, current liabilities
such as loan debt and mortgage debt due, or overdue, long-term liabilities such as mortgage
22

23. and other loan debt. Securities and real estate values are listed at market value rather than at
historical cost or cost basis. Personal net worth is the difference between an individual's total
assets and total liabilities.
A small business bump that balance sheet lists current assets such as cash, accounts
receivable, and inventory, fixed assets such as land, buildings, and equipment, intangible
assets such as patents, and liabilities such as accounts payable, accrued expenses, and long-
term debt. Contingent liabilities such as warranties are noted in the footnotes to the balance
sheet. The small business's equity is the difference between total assets and total liabilities.
Public Business Entities balance sheet structure
Guidelines for balance sheets of public business entities are given by the International
Accounting Standards Board and numerous country-specific organizations/companys.
Balance sheet account names and usage depend on the organization's country and the
type of organization. Government organizations do not generally follow standards established
for individuals or businesses.
If applicable to the business, summary values for the following items should be
included in the balance sheet: Assets are all the things the business owns, this will include
property, tools, cars, etc.
Assets
Current assets
1. Cash and cash equivalents
2. Accounts receivable
3. Inventories
4. Prepaid expenses for future services that will be used within a year
Non-current assets (Fixed assets)
1. Property, plant and equipment
2. Investment property, such as real estate held for investment purposes
3. Intangible assets
4. Financial assets (excluding investments accounted for using the equity method,
accounts receivables, and cash and cash equivalents)
5. Investments accounted for using the equity method
23

24. 6. Biological assets, which are living plants or animals. Bearer biological assets are
plants or animals which bear agricultural produce for harvest, such as apple trees
grown to produce apples and sheep raised to produce wool.
Liabilities
See Liability (accounting)
1. Accounts payable
2. Provisions for warranties or court decisions
3. Financial liabilities (excluding provisions and accounts payable), such as promissory
notes and corporate bonds
4. Liabilities and assets for current tax
5. Deferred tax liabilities and deferred tax assets
6. Unearned revenue for services paid for by customers but not yet provided
Equity
The net assets shown by the balance sheet equals the third part of the balance sheet, which is
known as the shareholders' equity. It comprises:
1. Issued capital and reserves attributable to equity holders of the parent company
(controlling interest)
2. Non-controlling interest in equity
Formally, shareholders' equity is part of the company's liabilities: they are funds "owing" to
shareholders (after payment of all other liabilities); usually, however, "liabilities" is used in
the more restrictive sense of liabilities excluding shareholders' equity. The balance of assets
and liabilities (including shareholders' equity) is not a coincidence. Records of the values of
each account in the balance sheet are maintained using a system of accounting known as
double-entry bookkeeping. In this sense, shareholders' equity by construction must equal
assets minus liabilities, and are a residual.
Regarding the items in equity section, the following disclosures are required:
1. Numbers of shares authorized, issued and fully paid, and issued but not fully paid
2. Par value of shares
3. Reconciliation of shares outstanding at the beginning and the end of the period
4. Description of rights, preferences, and restrictions of shares
5. Treasury shares, including shares held by subsidiaries and associates
24

25. 6. Shares reserved for issuance under options and contracts
7. A description of the nature and purpose of each reserve within owners' equity
Income statement (also referred to as profit and loss statement (P&L), revenue
statement, statement of financial performance, earnings statement, operating statement or
statement of operations) is a company's financial statement that indicates how the revenue
(money received from the sale of products and services before expenses are taken out, also
known as the "top line") is transformed into the net income (the result after all revenues and
expenses have been accounted for, also known as Net Profit or the "bottom line"). It displays
the revenues recognized for a specific period, and the cost and expenses charged against these
revenues, including write-offs (e.g., depreciation and amortization of various assets) and
taxes. The purpose of the income statement is to show managers and investors whether the
company made or lost money during the period being reported.
The important thing to remember about an income statement is that it represents a
period of time. This contrasts with the balance sheet, which represents a single moment in
time.
Charitable organizations that are required to publish financial statements do not
produce an income statement. Instead, they produce a similar statement that reflects funding
sources compared against program expenses, administrative costs, and other operating
commitments. This statement is commonly referred to as the statement of activities.
Revenues and expenses are further categorized in the statement of activities by the donor
restrictions on the funds received and expended.
The income statement can be prepared in one of two methods. The Single Step
income statement takes a simpler approach, totaling revenues and subtracting expenses to
find the bottom line. The more complex Multi-Step income statement (as the name implies)
takes several steps to find the bottom line, starting with the gross profit. It then calculates
operating expenses and, when deducted from the gross profit, yields income from operations.
Adding to income from operations is the difference of other revenues and other expenses.
When combined with income from operations, this yields income before taxes. The final step
is to deduct taxes, which finally produces the net income for the period measured.
25

26. Usefulness and limitations of income statement
Income statements should help investors and creditors determine the past financial
performance of the enterprise, predict future performance, and assess the capability of
generating future cash flows through report of the income and expenses.
However, information of an income statement has several limitations:
• Items that might be relevant but cannot be reliably measured are not reported (e.g.
brand recognition and loyalty).
• Some numbers depend on accounting methods used (e.g. using FIFO or LIFO
accounting to measure inventory level).
• Some numbers depend on judgments and estimates (e.g. depreciation expense
depends on estimated useful life and salvage value).
Guidelines for statements of comprehensive income and income statements of business
entities are formulated by the International Accounting Standards Board and numerous
country-specific organizations, for example the FASB in the U.S..
Names and usage of different accounts in the income statement depend on the type of
organization, industry practices and the requirements of different jurisdictions.
If applicable to the business, summary values for the following items should be included in
the income statement:
Operating section
• Revenue - Cash inflows or other enhancements of assets of an entity during a period
from delivering or producing goods, rendering services, or other activities that
constitute the entity's ongoing major operations. It is usually presented as sales minus
sales discounts, returns, and allowances.Every time a business sells a product or
performs a service, it obtains revenue. This often is referred to as gross revenue or
sales revenue.
• Expenses - Cash outflows or other using-up of assets or incurrence of liabilities
during a period from delivering or producing goods, rendering services, or carrying
out other activities that constitute the entity's ongoing major operations.
o Cost of Goods Sold (COGS) / Cost of Sales - represents the direct costs
attributable to goods produced and sold by a business (manufacturing or
merchandizing). It includes material costs, direct labour, and overhead costs
26

27. (as in absorption costing), and excludes operating costs (period costs) such as
selling, administrative, advertising or R&D, etc.
o Selling, General and Administrative expenses (SG&A or SGA) - consist of
the combined payroll costs. SGA is usually understood as a major portion of
non-production related costs, in contrast to production costs such as direct
labour.
 Selling expenses - represent expenses needed to sell products (e.g.
salaries of sales people, commissions and travel expenses, advertising,
freight, shipping, depreciation of sales store buildings and equipment,
etc.).
 General and Administrative (G&A) expenses - represent expenses to
manage the business (salaries of officers / executives, legal and
professional fees, utilities, insurance, depreciation of office building
and equipment, office rents, office supplies, etc.).
o Depreciation / Amortization - the charge with respect to fixed assets /
intangible assets that have been capitalised on the balance sheet for a specific
(accounting) period. It is a systematic and rational allocation of cost rather
than the recognition of market value decrement.
o Research & Development (R&D) expenses - represent expenses included in
research and development.
Expenses recognised in the income statement should be analysed either by nature
(raw materials, transport costs, staffing costs, depreciation, employee benefit etc.) or by
function (cost of sales, selling, administrative, etc.). (IAS 1.99) If an entity categorises by
function, then additional information on the nature of expenses, at least, – depreciation,
amortisation and employee benefits expense – must be disclosed. (IAS 1.104) The major
exclusive of costs of goods sold, are classified as operating expenses. These represent the
resources expended, except for inventory purchases, in generating the revenue for the period.
Expenses often are divided into two broad sub classicifications selling expenses and
administrative expenses.
27

28. Non-operating section
• Other revenues or gains - revenues and gains from other than primary business
activities (e.g. rent, income from patents). It also includes unusual gains that are either
unusual or infrequent, but not both (e.g. gain from sale of securities or gain from
disposal of fixed assets)
• Other expenses or losses - expenses or losses not related to primary business
operations, (e.g. foreign exchange loss).
• Finance costs - costs of borrowing from various creditors (e.g. interest expenses,
bank charges).
• Income tax expense - sum of the amount of tax payable to tax authorities in the
current reporting period (current tax liabilities/ tax payable) and the amount of
deferred tax liabilities (or assets).
Irregular items
They are reported separately because this way users can better predict future cash flows -
irregular items most likely will not recur. These are reported net of taxes.
• Discontinued operations is the most common type of irregular items. Shifting
business location(s), stopping production temporarily, or changes due to technological
improvement do not qualify as discontinued operations. Discontinued operations
must be shown separately.
Cumulative effect of changes in accounting policies (principles) is the difference between
the book value of the affected assets (or liabilities) under the old policy (principle) and what
the book value would have been if the new principle had been applied in the prior periods.
For example, valuation of inventories using LIFO instead of weighted average method. The
changes should be applied retrospectively and shown as adjustments to the beginning
balance of affected components in Equity. All comparative financial statements should be
restated. (IAS 8)
However, changes in estimates (e.g. estimated useful life of a fixed asset) only requires
prospective changes.
No items may be presented in the income statement as extraordinary items under
IFRS regulations, but are permissible under US GAAP. Extraordinary items are both unusual
28

29. (abnormal) and infrequent, for example, unexpected natural disaster, expropriation,
prohibitions under new regulations. [Note: natural disaster might not qualify depending on
location (e.g. frost damage would not qualify in Canada but would in the tropics).]
Additional items may be needed to fairly present the entity's results of operations.
Disclosures
Certain items must be disclosed separately in the notes (or the statement of comprehensive
income), if material, including:
• Write-downs of inventories to net realisable value or of property, plant and equipment
to recoverable amount, as well as reversals of such write-downs
• Restructurings of the activities of an entity and reversals of any provisions for the
costs of restructuring
• Disposals of items of property, plant and equipment
• Disposals of investments
• Discontinued operations
• Litigation settlements
• Other reversals of provisions
Earnings per share
Because of its importance, earnings per share (EPS) are required to be disclosed on the face
of the income statement. A company which reports any of the irregular items must also report
EPS for these items either in the statement or in the notes.
There are two forms of EPS reported:
• Basic: in this case "weighted average of shares outstanding" includes only actual
stocks outstanding.
• Diluted: in this case "weighted average of shares outstanding" is calculated as if all
stock options, warrants, convertible bonds, and other securities that could be
transformed into shares are transformed. This increases the number of shares and so
EPS decreases. Diluted EPS is considered to be a more reliable way to measure
EPS.
29

30. Sample income statement
The following income statement is a very brief example prepared in accordance with
IFRS. It does not show all possible kinds of items appeared a firm, but it shows the most
usual ones. Please note the difference between IFRS and US GAAP when interpreting the
following sample income statements.
Bottom line
"Bottom line" is the net income that is calculated after subtracting the expenses from
revenue. Since this forms the last line of the income statement, it is informally called "bottom
line." It is important to investors as it represents the profit for the year attributable to the
shareholders.
After revision to IAS 1 in 2003, the Standard is now using profit or loss for the year
rather than net profit or loss or net income as the descriptive term for the bottom line of the
income statement.
Requirements of IFRS the International Accounting Standards Board issued a revised IAS
1: Presentation of Financial Statements, which is effective for annual periods beginning.
A business entity adopting IFRS must include:
• a Statement of Comprehensive Income or two separate statements comprising:
1. an Income Statement displaying components of profit or loss and
2. a Statement of Comprehensive Income that begins with profit or loss (bottom
line of the income statement) and displays the items of other comprehensive
income for the reporting period.
All non-owner changes in equity (i.e. comprehensive income ) shall be presented in either in
the statement of comprehensive income (or in a separate income statement and a statement of
comprehensive income). Components of comprehensive income may not be presented in the
statement of changes in equity.
Comprehensive income for a period includes profit or loss (net income) for that period and
other comprehensive income recognised in that period.
All items of income and expense recognised in a period must be included in profit or loss
unless a Standard or an Interpretation requires otherwise. Some IFRSs require or permit that
30

31. some components to be excluded from profit or loss and instead to be included in other
comprehensive income.
Items and disclosures
The statement of comprehensive income should include:
1. Revenue
2. Finance costs (including interest expenses)
3. Share of the profit or loss of associates and joint ventures accounted for using the
equity method
4. Tax expense
5. A single amount comprising the total of (1) the post-tax profit or loss of discontinued
operations and (2) the post-tax gain or loss recognised on the disposal of the assets or
disposal group(s) constituting the discontinued operation
6. Profit or loss
7. Each component of other comprehensive income classified by nature
8. Share of the other comprehensive income of associates and joint ventures accounted
for using the equity method
9. Total comprehensive income
The following items must also be disclosed in the statement of comprehensive income as
allocations for the period:
• Profit or loss for the period attributable to non-controlling interests and owners of the
parent
• Total comprehensive income attributable to non-controlling interests and owners of
the parent
No items may be presented in the statement of comprehensive income (or in the income
statement, if separately presented) or in the notes as extraordinary items.
Financial statement analysis is, of course, the underlying purpose of preparing
financial statements. Everyone who looks at your financial statements will be automatically
performing some form of analysis. Your banker will quickly analyze them to determine your
capability of paying back a loan.
31

32. Your investor(s) will always perform a financial statement analysis to determine if
you have been performing according to plan, and/or whether your business is a good
investment.
Your suppliers will analyze your financial statements to determine your credit worthiness—
and so on.
The important thing to remember is: everyone who looks at your financial statements
will conduct a financial statement analysis, in one form or another. That is why your
statements need to be as accurate and truthful as possible.
You, as well as your business, will be judged according to your financial statements.
But the most important aspect of financial statement analysis is the analysis you perform
yourself.
There are three major analyses you need to make. There are many others as well, but we’ll
stick to the three major ones here, as follows:
1. Actual vs. Planned Performance
You did considerable business planning before you started your business (and
you likely updated it for the banks, investors, or suppliers), complete with pro
forma financial statements (no matter how crude).
So, after your business is operating, you will need to compare your actual performance (from
your financial statements) against your planned performance (from your pro forma financial
statements).
This financial statement analysis should be performed line item by line item. If you had fewer
sales than planned … you should know or find out why. If any costs were greater than
planned … again, you should know or find out why.
Ever dollar received, and every dollar spent shows up on your financial statements, and every
dollar that is different than you planned should be analyzed. This could be a good thing as
you may need to change your planning.
This is where it becomes important to have an advisory group where you can bounce
information, and ideas, around.
2. Trend Analysis
By comparing current financial statements to previous financial statements you
can see which areas of your business have changed, and by how much.
Then you need to determine why the change occurred, whether positive or negative:
32

33. • Are sales trending up?
• Are costs trending down (which ones aren’t)?
• Are profits trending up
These are the types of things you will want to look at in your financial statement analysis.
Like the performance analysis, you need to analyze your financial statements line item by
line item to determine trends … and don't be afraid to change your planning if you see a new
trend emerging.
3. Industry Comparisons
4. This analysis is not only a comparison or your business’s performance to
others in your industry, but also to standards set by your banker, your
investor(s), your advisory group, or even yourself.
These comparisons are usually made in the form of financial “ratios.”
Here are a few of the more common financial ratio analyses:
• Balance Sheet Ratios.
Balance Sheet ratios typically measure the strength of your business, using the
following formulas:
o Current Ratio — This is one of the most widely used tests of financial
strength, and is calculated by dividing Current Assets by Current Liabilities.
This ratio is used to determine if your business is likely to be able to pay its
bills.
Obviously, a minimum acceptable ratio would be 1:1; otherwise your company would not be
expected to pay its bills on time. A ratio of 2:1 is much more acceptable, and the higher, the
better.
o Quick Ratio — This is sometimes called the “acid test” ratio because it
concentrates on only the more liquid assets of your business. It is calculated by
dividing the sum of Cash and Receivables by Current Liabilities.
It excludes inventories or any other current asset that might have questionable liquidity.
Depending on your history for collecting receivables, a satisfactory ratio is 1:1.
33

34. o Working Capital — Bankers especially, watch this calculation very closely
as it deals more with cash flow than just a simple ratio. Working Capital
equals Current Assets minus Current Liabilities.
Quite often your banker will tie your loan approval amount to a minimum Working Capital
requirement.
o Inventory Turnover Ratio — Not every business has an inventory that needs
to be of concern, and if that is your situation you can ignore this ratio.
This ratio tells you if your inventory is turning over fast enough, and is calculated by dividing
Net Sales by your average Inventory (at cost).
If you are concerned about your inventory, then you definitely should watch this ratio
carefully when comparing it to industry guidelines.
o Leverage Ratio — This is another of the analyses used by bankers to
determine if your business is credit worthy. It basically shows the extent your
business relies on debt to keep operating. This ratio is calculated by dividing
Total Liabilities by Net Worth (total assets minus total liabilities).
Obviously, the higher the ratio is, the more risky it becomes to extend credit to your business.
This is often the calculation a supplier to your business will make before extending credit to
you.
• P&L Ratios
Profit and Loss (P&L) financial statements also have some important ratio
calculations for your financial statement analysis:
o Gross Profit Ratio — This is the most common calculation on your P&L—it
is simply your Gross Profit divided by Net Sales. Often, different industries
will have standard guidelines that you can compare your business’s numbers
to.
It is also desirable to watch your trends and not let this number move too far from your target.
o Net Profit Ratio — This calculation is simply Net Pre-tax Profit divided by
Net Sales. Other than wanting this number to be as large as possible, I usually
don’t pay too much attention to it because it includes too many non-operating
34

35. costs (depreciation, amortization, etc.) to be of any real analysis value. (Your
banker may be interested however.)
o Management Ratios.
There are a couple of other ratios that interested outside parties will want to analyze:
o Return on Assets — This is calculated by dividing Net Pre-tax Profit by Total
Assets. The ratio is supposed to indicate how efficiently you are utilizing your
assets.
To me, this is a useless analysis for helping you run your business. However, bankers and
investors will always calculate this ratio if you don’t.
o Return on Investment (ROI) — To a bank or investor this is the most
important ratio of all. It is supposed to tell you—the business owner—if you
are investing your time, and money, properly, or should you just liquidate your
business and put the money into a savings account.
This, of course, is pure bull … concocted by non-entrepreneurs and academics who have no
idea what it means to be an entrepreneur.
Having said that, I do realize it can be of some value to a banker or investor—they
likely want to know if they could make a better return on their money by investing or loaning
it to someone other than you. So, for that purpose, it can be valuable … to them.
To calculate your Return on Investment, divide your Net Pre-tax Profit by your Net Worth
(total assets minus total liabilities).
35

36. Industry Profile & Company Profile
Industry Profile:
Poultry is the domestication and rearing of birds like chicken, turkeys, geese, swans,
and emu etc for providing food.
In poultry sector there exists a large scope to enhance food production through both
layer and broiler farming.
It has been observed that agriculture hardly provides employment ranging from 120 to
150 days in a year. It has been calculated that a backyard poultry unit of 25 to 50 can generate
employment for 40 to 50 man days.
In a similar manner a dairy unit consisting of 2 crossbred cows can help in creating
employment for 120 to 150 man days and a small ruminant (Goats & Sheep) of 20 head size
generate 100 to 120 man days in a year, mostly in the woman work force. In addition to this,
commercial activities under this sector will also encourage unemployed educated youths in a
great manner to set up their own units. These activities will create sustainable means of
livelihood in the rural areas along with bridging the gap in demand and production in egg,
meat and milk.
36

37. Figure:3
Layer:
Large, medium and small scale layer farming can be taken up by the prospective
entrepreneurs/farmers with either own finance or by bank credit. New-a-Jays competent
technical and professional guidance are available to the farmers through Govt. and private
institutions. The poultry management practices have improved many folds, diseases and
mortality incidences have reduced greatly. Now, layer farming has been given considerable
importance in State policy and has a better scope in future.
Broiler:
In broiler segment the State is now self sufficient in chicken meat production in
respect to demand. Still there is enormous scope within this sector if marketing side is taken
care of.
Many reputed entrepreneurs have started interest in broiler sector which further
encourage our farmers to take up broiler farming.
Backyard Poultry:
37

38. Besides, the above two segments, another segment of poultry is opened for our rural
poor. They can take up this segment as their subsidiary occupation. Now days newly
developed low input technology birds are available in poultry which thrive well under semi
intensive system of management. These birds are phenotypic ally similar to desi birds instead
produce more of eggs and also grow in a much faster rate than desi birds.
These types of breeds and their availability are as follows:
Backyard Poultry
Investment Opportunities:
As poultry has been classified as agriculture now, it has been treated as priority sector
of lending from financing institutions. So entrepreneurs/farmers should approach the
Commercial Banks/Co-operative Banks/RRB of their areas to avail credit to establish poultry
units.
Government is also seriously trying to bring outside investors to invest in State
poultry sector to make easy availability of required poultry inputs at a reasonable rate. So that
farmers can be encouraged to take up layer and broiler farming.
Government Schemes:
 An ambitious programme has been taken up by Govt. to produce 100 lakh eggs/day
within 5 years of time.
 Strengthening of farms with low input technology birds for backyard farming in the
State
 Self Help Groups are given opportunity to start poultry farming.
38

39.  Promotion of large and medium scale poultry farming through Agricultural
entrepreneurs schemes.
 Promotion of cluster farming.
Govt’s support for poultry development:
1. Poultry has been declared as agriculture.
2. Poultry farming has been treated as priority sector of lending by the financing
institutions.
3. A clear cut guideline formulated by Pollution Control Board to ease poultry farming.
4. Exemption of VAT on egg, meat & poultry feed and feed supplements.
5. Lease for Govt. land for poultry farming.
6. Poultry insurance premium has been reduced.
7. 20% capital investment subsidy to a maximum of 20 lakhs is provided for promotion
of poultry farming.
8. Action Plan to increase the maize production has been prepared for feed supply.
Future Issues:
1. Reduction of electricity tariff rate for poultry farming.
2. Exemption of poultry industry from labour act.
3. Exemption of VAT on maize and broken rice.
4. Exemption of entry tax on egg and poultry meat.
5. Planning to increase the storage capacity of maize crop in the State.
Production performance of different breeds:
Layer breeds:
BV 300: 320 eggs / bird
Broiler breeds:
(1) Cobb 100: 1.4 kg in 35 days (2) Cobb 400: 1.8 kg in 40 days (3) Ross: 2.0 kg in 42 days
Dual purpose breeds:
39

40. (1) Vanaraj: 150 eggs / bird (2) Carigold: 220 eggs / bird
Housing Specifications:
Floor space:
Deep litter system – (l) Breeder: 3.75 sft (2) Layer: 2.0 sft (3) Broiler: 1.25 sft Cage system -
(a) Breeder: 3.0 sft -Layer: 0.8 sft
Water space- Deep litter system (a) Breeder: 2.5 inch -Layer: 2.0 inch – Broiler: 2.0 inch
Cage system- (a) Breeder: Nipple drinking system —Layer: same with light management.
Disease Control:
Several Viral (Ranikhet disease, Marck’s disease, Bird flu, Fowl pox etc)., Bacterial
(Fowl cholera, Salmonellosis, Typhoid, paratyphoid etc.) Fungal (Mycosis Aspergillosis
etc.), Parasitic (external-lice, mites, fleas, etc. Internal – Rickets, Perosis, Avitaminosis etc.)
should be dealt effectively
So in poultry management, emphasis must be given for selection of disease free and
suitable breeds, proper, safe and hygienic farm condition, and use of modern scientific
methods for transportation and storage, to make it more productive.
Government has been laying thrust in providing gainful employment for the rest
period of the year for the work force with this suitable alternative.
Company Profile
A common mistake in evaluating the condition of a farm is to focus strictly on the
production side of the operation. Success tends to be measured in terms of bushels/acre,
pounds of feed/pound of gain, and other production measures. After all, that?s what the
manager actually produces and sells; that?s the hands-on part of the business ? growing
things! While managers need to be proficient in the production aspect of the farm, they must
also be proficient in the business side of the operation, which includes financial management,
40

41. marketing, labor management, and risk management. Let's take a quick look at the basics of
financial analysis of a farm business.
Financial analysis is a powerful management tool. I use the basics of financial
analysis to identify the main strengths and weaknesses of a farm operation. The ratios and
measures I like to use help me uncover potential problems with the operation, whether it is
cost control, debt management, marketing issues, or even production management problems.
Once I have identified potential problems, I can dig a little bit deeper to try to identify the
underlying problem(s). I have used these methods in several consulting cases for farms across
the U.S. These cases have involved a wide variety of operations ? beef, dairy, hog, poultry,
row-crop, equine, and on-farm marketing. I?ll be the first to admit that I am not an expert in
the production management of any of these operations. BUT I don't have to be a production
expert to help a manager improve the operation. All I need are good financial information, a
few financial ratios, and common sense!
What can you actually learn about a farm operation through financial analysis? The
answer is, "Plenty!" It can provide valuable insight about an operation:
Agricultural loan officers commonly use these areas to analyze loan applications. By
looking at all these ratios together, you can get a sound, comprehensive overview of the
entire operation.
But that's not all the good information managers can get from financial analysis. A
manager can use financial records to determine the most profitable level of input to use
(marginal analysis). For example, a manager can look at the question, "Should I apply 80
pounds of fertilizer or 100 pounds of fertilizer per acre?" A manager can also estimate the
breakeven analysis. Breakeven analysis tells the manager the minimum yield per acre or the
minimum price per unit needed to cover the costs of production ? a very powerful
management tool!
From a farm planning viewpoint, a manager can use financial records to develop a
long term operating plan for the farm, including enterprise analysis and whole farm planning.
Enterprise analysis helps a manager determine the profitability of each enterprise, as well as
potential methods for improving the profitability. Enterprise analysis also lets a manager
41

42. compare different production systems. For example, managers can look at the profitability of
conventional till corn versus no-till corn; enterprise budgets for each production system will
allow them to examine the inputs needed, the expected output (yield), and other aspects of the
enterprise. Whole farm planning is a method of determining the most profitable enterprise
mix, given the resources for the operation. Whole farm planning can be as simple as
constructing a whole farm budget (from a series of enterprise budgets), or it can involve more
complex methods such as linear programming or simulation analysis.
And finally, financial analysis provides a manager with powerful aids in decision
making. Two of my favorite decision making aids are partial budgets and cash flow
statements. A partial budget is a quick, simple method for analyzing small changes in an
operation. A cash flow statement is a monthly (or quarterly) listing of all the cash inflows and
outflows, showing the expected cash surplus or deficit each period. In my opinion, the cash
flow statement is the most powerful and most useful financial statement in the day-to-day
operations of a farm or business.
What do you need to complete a financial analysis of an operation? In a nutshell,
managers need a good, accurate record keeping system. More specifically, their record
keeping system should allow you to generate the following financial statements:
balance sheet
income statement (or a Schedule F tax form)
cash flow statement
In addition, managers can do a more complete analysis if you have enterprise budgets
for each of the main enterprises on the farm, production records, and a whole farm budget.
This information allows them to calculate all of the financial ratios and measures mentioned
above. It will also enable marginal analysis and breakeven analysis and partial budgeting.
This has been a brief overview of financial analysis for a farm operation. Future
articles will explore the above-mentioned topics in more detail to help managers analyze a
farm situation from a financial point of view. Also coming in the future -- look for a web site
42

43. with in-depth discussion and examples of each of these topics, as well as links to spreadsheet-
based decision making aids.
About Organization:
Company Name : Sri Sai Poultries
Established Year : 1990
Class : Private Company
Activity Type : Production of Eggs
Registrar : Nizamabad
Nature : Company Limited
Sub Category : Indian Non Govt Company
Sri sai poultry started in the year of 1990, with birds of 5000 near
Mubharaknagar, Nizamabad. The chairman of the company is Sri. Gaddi Pati
Suresh Babu Garu & Managing Director is Sri Gaddipati Vivek Garu. Presently
we are with 60000 birds with two branches.
First branch is at Manikbhandar and second branch is at Munipally.
Recently we launched a technique FARMER TO CUSTOMER. It is nothing but
production is done directly to customers with out the middle person/ retailer
Collection of Eggs
43

44. Food Machine Setup for the Birds
Birds in the Poultry Farm
Medicine for the Birds
44

45. Our Mission :
Our mission is to create healthy individuals with strong and just leaves
for them selves for together to build the country.
Our Vision:
To be with the top 5 Egg production poultry in the state of Telangana and
achieve leadership in major states reputed through excellence and service to our
customers.
Our Values:
 Quality : We can be relied on by our client to provide the quality of
product and service they demand constantly focus on customer
satisfaction.
 Pro Active: We encourage people to see things and do things differently
we call it as “Out of the Box thinking” .
 Energy: A positive attitude is at centre of our “Any thing can be Done”
culture growth is way of life.
 Success : We value and reward every success.
 Integrity , loyalty & Commitment : We value and reward the success
earned by our people. Ethical and responsible conduct. We believe in
earning keeping the trust of our client and employees
Achievements:
 Awarded as best former award in the year of 2008 by madhu yashki goud.
 Selected as best poultry for continuously three years in 2010,2011,2012.
 Highest egg producers in the Nizamabad Town We supply eggs to the all
Anganwadi Kendra’s through out the Nizamabad Dist.
45

46. Future Plans
 To Startup a farm with one lakh birds
 To manufacture food for the birds and house pets
 Launching of new technique FTC is FARMER TO CUSTOMER
46
Hen
Feed
Processing
Farm
Distributer
Retail
Soya bean Meal
Pre mix
Corn
Genetic & Medicine
Farm Control

47. DATA ANALYSIS & INTERPRETATION
Statement of Changes in Working Capital 2010-11
Particulars 2010 2011
Changes in working capital
Increase Decrease
Current Assets
Inventories
Sundry Debtors
Other Current Assets
Loans and Advances
Total (A)
Current Liabilities
Current Liabilities
Provision
Total(B)
Working Capital (A-B)
Increase in Net Working Capital
150000
125000
252500
200000
727500
198500
201520
400020
327480
277410
250000
142000
270300
300000
965000
201920
158190
360110
604890
0
10,0000
017000
020500
100000
043330
003420
277410
Total 604890 604890 280830 280830
47

48. INTERPRETATION:
 Net working capital is increased according to previous year 2010-2011
 Current assets are increased during year 2011
 Current liabilities increase in year 2011 from 2010
 Current assets are increase and it defects current liabilities
48

49. Statement of Changes in working capital 2011-12
Particulars 2011 2012
Changes in working capital
Increase Decrease
Current Assets
Inventories
Sundry Debtors
Other Current Assets
Loans and Advances
Total (A)
Current Liabilities
Current Liabilities
Provision
Total(B)
Working Capital (A-B)
Increase in Net Working Capital
250000
142000
273000
300000
965000
201920
158190
360110
604890
0
323840
292100
302130
292810
1215380
329150
286920
616070
599310
-5580
78340
150100
29130
5580
7190
127230
128730
Total 604890 604890 263150 263150
49

50. INTERPRETATIONS:
 Networking capital decreased during the year 2011-12
 Current assets increased and current liabilities decreased
 Provisions has been increased in the year 2012
50

51. Statement of Changes in working capital 2012-13
Particulars 2012 2013
Changes in working capital
Increase Decrease
Current Assets
Inventories
Sundry Debtors
Other Current Assets
Loans and Advances
Total (A)
Current Liabilities
Current Liabilities
Provision
Total(B)
Working Capital (A-B)
Increase in Net Working Capital
328340
292100
292810
302130
1215380
329150
286920
616070
599310
035410
318520
286200
324900
331830
1261450
302610
324120
626730
634720
0
032090
029700
026540
009820
005900
037200
035410
Total 634730 634730 88330 88330
51

52. INTERPRETATIONS:
 Networking capital increased according to previous year 2012-2013
 Current assets defects current liabilities
 Provisions has been increased during year 2013
52

53. Statement of Changes in working capital 2013-14
Particulars 2013 2014
Changes in working capital
Increase Decrease
Current Assets
Inventories
Sundry Debtors
Other Current Assets
Loans and Advances
Total (A)
Current Liabilities
Current Liabilities
Provision
Total(B)
Working Capital (A-B)
Increase in Net Working Capital
318520
286200
331830
324900
1261450
302610
324120
626730
634720
038910
352810
312190
342100
312010
1319110
312980
332500
645480
673630
673630
034290
025990
010270
012890
010370
008380
038910
Total 673630 673630 70550 70550
53

54. INTERPRETATIONS:
 Net working capital increased in 2014
 Sundry debtors has been increased from 2013 to 2014
 Loans have been decreased in 2014 which is profitable to company.
54

55. Statement of Changes in working capital 2014-15
Particulars 2014 2015
Changes in working capital
Increase Decrease
Current Assets
Inventories
Sundry Debtors
Other Current Assets
Loans and Advances
Total (A)
Current Liabilities
Current Liabilities
Provision
Total(B)
Working Capital (A-B)
Increase in Net Working Capital
352810
312190
312010
342100
1319110
312980
332500
645480
673630
000220
378150
400000
300000
398000
1476150
421050
381250
802300
673850
0
025340
087810
055910
012010
108070
048750
000220
Total 673850 673850 169050 169050
55

56. INTERPRETATIONS:
 Net working capital increased in 2015
 Sundry debtors has been increased from 2014 to 2015
 Loans have been decreased in 2015 which is profitable to company.
 Provision has been increased during year 2015
56

57. Comparative Balance Sheet of 2010-2011
Particulars 2010 2011
Absolute of
Change
% Of Change
1. Fixed assets
2. Investments
3. Current Assets
Inventories
Sundry Debtors
Other Current Assets
Total Current Assets
4. Total Assets (1+2+3)
5. Current Liabilities
Other Liabilities
Provision
Total Current Liabilities
6. Long Term Liabilities
Secured Loans
Unsecured Loans
Total
7. Capital Reserves
Ordinary Share Capital
Reserve & Surplus
Total Reserves
Total Liabilities (5+6+7)
382500
500000
150000
125000
252500
527500
1410000
198500
201520
400020
400000
300000
700000
204420
105560
309980
1410000
400000
650000
250000
142000
273000
665000
1715000
201920
158190
360110
490000
250000
740000
204420
410470
614890
1715000
017500
150000
100000
017000
02500
137500
305000
-3420
43330
46750
-90000
50000
40000
-
304910
304910
305000
4.575
30.0
66.66
13.6
8.11
26.06
21.63
1.75
21.5
9.97
22.5
16.66
5.71
-
288.8
98.36
21.63
57

58. INTERPRETATIONS:
 Fixed Assets increased by 17500 with 4.5%
 Total assets increased 305000 with 21.63%
 Current liabilities decreased 46750 with 9.9%
 Total reserves are increased in 2011 by 304910
The overall financial position of SRI SAI POULTRIES During the period of study is
satisfactory .
58

59. Comparative Balance Sheet of 2011- 2012
Particulars 2011 2012
Absolute of
Change
% Of
Change
1. Fixed assets
2. Investments
3. Current Assets
Inventories
Sundry Debtors
Other Current Assets
Total Current Assets
4. Total Assets (1+2+3)
5. Current Liabilities
Other Liabilities
Provision
Total Current Liabilities
6. Long Term Liabilities
Secured Loans
Unsecured Loans
Total
7. Capital Reserves
Ordinary Share Capital
Reserve & Surplus
Total Reserves
Total Liabilities (5+6+7)
400000
650000
250000
142000
273000
665000
1715000
201920
158190
360110
490000
250000
740000
204420
410470
614890
1715000
450000
500000
328340
292100
302130
922570
1872570
329150
286920
616070
395000
204300
599300
204420
452780
657200
1872570
50000
150000
- 78340
- 150100
-29130
257570
157570
-27230
-128730
- 255960
95000
45700
140700
-
-42310
42310
157570
12.5
23.0
31.33
105.7
10.6
38.73
9.18
63.0
81.37
71.07
19.38
18.28
19.01
-
10.30
6.88
9.18
59

60. INTERPRETATIONS:
 Fixed Assets increased by 50000 with 12.5%
 Total assets decreased by 157570 with 9.18%
 Current liabilities decreased with 71.07%
 Total liabilities and assets are equal by 9.18%
The overall financial position of SRI SAI POULTRIES During the period of study is
satisfactory .
60

61. Comparative Balance Sheet of 2012- 2013
Particulars 2012 2013
Absolute of
Change
% Of
Change
1. Fixed assets
2. Investments
3. Current Assets
Inventories
Sundry Debtors
Other Current Assets
Total Current Assets
4. Total Assets (1+2+3)
5. Current Liabilities
Other Liabilities
Provision
Total Current Liabilities
6. Long Term Liabilities
Secured Loans
Unsecured Loans
Total
7. Capital Reserves
Ordinary Share Capital
Reserve & Surplus
Total Reserves
Total Liabilities (5+6+7)
450000
500000
328340
292100
302130
922570
1872570
329150
286920
616070
395000
204300
599300
204420
452780
657200
1872570
525000
670000
492310
426120
381040
1299470
2494470
462810
395290
858100
400000
350000
750000
204420
681950
886370
2494470
75000
170000
163970
134020
78910
376900
621900
133660
108370
242030
5000
145700
150700
-
229170
229170
621900
16.6
34
49.93
45.88
26.11
40.85
33.21
40.60
37.77
39.28
1.26
71.3
25.14
-
250.6
250.6
33.21
61

62. INTERPRETATIONS:
 Fixed Assets increased by 75000 with 16.6%
 Inventories increased by 163970 with 49.93%
 Total assets Increased by 621900 with 33.21%
 Total liabilities and assets are equal by 33.21%
The overall financial position of SRI SAI POULTRIES During the period of study is
satisfactory .
62

63. Comparative Balance Sheet of 2013 - 2014
Particulars 2013 2014
Absolute of
Change
% Of
Change
1. Fixed assets
2. Investments
3. Current Assets
Inventories
Sundry Debtors
Other Current Assets
Total Current Assets
4. Total Assets (1+2+3)
5. Current Liabilities
Other Liabilities
Provision
Total Current Liabilities
6. Long Term Liabilities
Secured Loans
Unsecured Loans
Total
7. Capital Reserves
Ordinary Share Capital
Reserve & Surplus
Total Reserves
Total Liabilities (5+6+7)
525000
670000
492310
426120
381040
1299470
2494470
462810
395290
858100
400000
350000
750000
204420
681950
886370
2494470
660000
700000
500000
495010
452000
1447010
2807010
500000
450000
950000
462000
400000
862000
204420
790590
995010
2807010
135000
30000
7690
68890
70960
147540
312540
37190
54710
91900
62000
50000
112000
108640
108640
312540
25.71
4.47
1.56
16.16
18.62
11.35
12.52
8.03
13.84
10.70
15.5
14.28
14.93
15.93
15.93
12.52
63

64. INTERPRETATIONS:
 Fixed Assets increased by 135000 with 25.71%
 Fixed assets reveals that long term sources of funds are utilized
 Long term liabilities neither decreased nor increased
 Total liabilities and assets are equal by 12.52%
The overall financial position of SRI SAI POULTRIES During the period of study is
satisfactory .
64

65. Comparative Balance Sheet of 2014- 2015
Particulars 2014 2015
Absolute of
Change
% Of
Change
1. Fixed assets
2. Investments
3. Current Assets
Inventories
Sundry Debtors
Other Current Assets
Total Current Assets
4. Total Assets (1+2+3)
5. Current Liabilities
Other Liabilities
Provision
Total Current Liabilities
6. Long Term Liabilities
Secured Loans
Unsecured Loans
Total
7. Capital Reserves
Ordinary Share Capital
Reserve & Surplus
Total Reserves
Total Liabilities (5+6+7)
660000
700000
500000
495010
452000
1447010
2807010
500000
450000
950000
462000
400000
862000
204420
790590
995010
2807010
700000
800000
560000
542900
500000
1602900
3102900
550000
532500
1082500
500000
472000
972000
204420
843980
1048400
3102900
40000
100000
60000
47890
48000
155890
295890
50000
82500
132500
38000
72000
110000
53390
53390
295890
6.06
14.28
12
9.67
10.61
10.77
10.54
10
18.33
13.94
8.225
18
12.76
6.75
5.365
10.54
65

66. INTERPRETATIONS:
 Fixed Assets increased by 40000 with 6.06%
 Fixed assets reveals that long term sources of funds are utilized
 Current liabilities increased by 132500 with 13.94%
 Long term liabilities increased by 110000 with 12.76%
 Total liabilities and assets are equal by 10.54%
The overall financial position of SRI SAI POULTRIES During the period of study is
satisfactory .
66

67. TYPES OF RATIOS
Current Ratio
YEAR CURRENT ASSETS CURRENT LIABILITIES CURRENT RATIO
2011
2012
2013
2014
2015
665000
922570
1299470
1447010
1602900
360110
616070
858100
950000
1082500
1.846
1.497
1.514
1.523
1.480
INTERPRETATION:
 The above table shows calculation of current ratio for 5 years from 2011-2015
 During this period the firm has highest current ratio i.e., 1.846 in the year 2011
 Lowest current ratio is 1.480 in the year 2015
Liquid Ratio
67

68. YEAR CURRENT
ASSETS
INVENTORY /
STOCK
CURRENT
LIABILITIES
LIQUID
RATIO
2011
2012
2013
2014
2015
665000
922570
1299470
1447010
1602900
250000
328340
492340
500000
560000
360110
616070
858100
950000
1082500
1.152
0.964.
0.940
0.996
0.963
INTERPRETATION:
 The above table shows calculation of liquid ratio for 5 years from 2011-2015
 During this period the firm has highest liquid ratio i.e., 1.152 in the year 2011
 Lowest liquid ratio is 0.940 in the year 2013
ABSOLUTE LIQUID RATIO
68

69. YEAR CASH CURRENT
LIABILITIES
ABSOLUTE LIQUID
RATIO
2011
2012
2013
2014
2015
155000
208000
356000
400000
500000
360110
616070
858100
950000
1082500
0.430
0.337
0.414
0.421
0.461
INTERPRETATION:
 The above table shows calculation of liquid ratio for 5 years from 2011-2015
 During this period the firm has highest Absolute liquid ratio i.e., 0.461 in the year
2015
 Lowest Absolute liquid ratio is 0.337 in the year 2012
69

70. FINDINGS
1. I found that every year the sales are increases in increased manner. It shows good sign for
the organization. It fluctuates only one year due to competition and heavy expenditure in
fixed assets.
2. The gross profit was decreased every year. This was happened due to increasing of cost of
goods sold every year
3. On overall ever year cash & bank balance were increased fixed deposits receipts are
decreased inventories on average are in good position.
4. They minimized the exp .of stores maintenance. But other expensed like packing
materials and transportation charges increased rapidly
70

71. SUGGESTIONS
• The company should provide notes to explain items not tallying with the profit and
loss and balance sheet in the Annual report.
• Instead of disclosing the combined flows of debtors and loans advances as decrease/
(increase) in trade and other receivables, their separate disclosure will be more
meaningful.
• Comparison of basic and diluted EPS to be included in Annual report to predict the
EPS sustainable in future.
• Comparability between periods. The company preparing the financial statements may
have changed the accounts in which it stores financial information, so that results may
differ from period to period. For example, an expense may appear in the cost of goods
sold in one period, and in administrative expenses in another period.
• Comparability between companies. An analyst frequently compares the financial
ratios of different companies in order to see how they match up against each other.
However, each company may aggregate financial information differently, so that the
results of their ratios are not really comparable. This can lead an analyst to draw
incorrect conclusions about the results of a company in comparison to its competitors.
• Operational information. Financial analysis only reviews a company's financial
information, not its operational information, so you cannot see a variety of key
indicators of future performance, such as the size of the order backlog, or changes in
warranty claims.
71

72. CONCLUSION
The financial position of Sri Sai Poultry is quite comfortable with a judicious mix of
debt and equity. The overall assessment of financial statement signifies efficient utilization of
the investments, loans and advances. The profitability of the company appears to be
impressive, as judged by increase in reserves and surplus.
The management discussions and analysis by Director’s report and opinions
expressed by Auditor’s report through financial statements is true and fair view in accordance
with the provisions of the companies Acts, and Accounting standards.
The overall financial position of the company appears to be more than satisfactory.
72

73. BIBLIOGRAPHY
Accounting Trends and Techniques. American Institute of Certified Public Accountants, New
York, NY. Latest edition.
GARCIA F.L. How To Analyze A Bank Statement. Bankers Publishing Co., Boston, MA,
1985.
GIBSON, C. H. Financial Statement Analysis, 1986.
O'MALIA, T.J. A Banker's Guide to Financial Statements, 1989.
WOELFEL, C.J. Financial Statement Analysis. Probus Publishing Co. Chigcago, IL, 1988.
SL. No. BOOKS: AUTHOUR NAME
1. Financial Management Kahan & JAIN
2. Financial Management I.M.Pandey
3. Management Accounting R.P.Trivedi
NEWS-PAPERS & JOURNALS:
BUSINESS TODAY
THE ECONOMIC TIMES
WEBSITES & SEARCH ENGINES
www.moneycontrol.com
www.googlefinance.com
73

74. QUESTIONNAIRE
1. Profession [a]
a. Business man
b. private employed
c. Government employed
d. others
2. Marital status [b]
a. married
b. single
3. Income level of the respondents [c]
a. < 10,000Rs
b. 10000-25,000
c. 25,000-50,000
d. above 50,000
4. preferred investment plan [c]
a. Bank FD
b. ULIP
C. Mutual funds
d. Stock market
5. What type of mutual funds you prefer ? [b]
a. Debt funds
b. Equity funds
c. Hybrid funds
6. Risk preference in mutual funds [MF] investment plan [c]
74

75. a. High risk
b. Moderate risk
c. Low risk
7. What type of scheme you prefer much [a]
a. Open – Ended
b. Closed – Ended
8. What is your period of investment [a]
a. Long term
b. Short term
9. In which sector fund do you prefer much in estate funds [b]
a. Financial funds
b. Utility funds
c. Technology funds
d. Healthcare funds
10. Why do u prefer in investing in mutual funds [b]
a. Tax savings
b. Risk cover
c. Others
75