A study of financial statements through ratio anaysis in ks &dl

PROJECT REPORT ON
“FINANCIAL STATEMENTS THROUGH RATIO ANALYSIS’’
Project Submitted in partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Of
BANGALORE UNIVERSITY
Submitted By
MADHU N
Reg. No: 19AUCMD018
Under the guidance of
Mr. KISHORE KUMAR
Assistant Professor
DEPARTMENT OF COMMERNCE AND MANAGEMENT
GOVERNMENT FIRST GRADE COLLEGE
Vijayanagar, Bangalore-560104
2020-2021

CERTIFICATE FROM THE GUIDE
This is to certify that Mr. MADHU N bearing University Register No: 19AUCMD018 studying in second
year ‘MASTER OF BUSINESS ADMINISTRATION, Student of our college and he has successfully
carried out the internship entitled “FINANCIAL STATEMENTS THROUGH RATIO ANALYSIS” under
my guidance for the partial fulfilment of the requirements for the award of the degree of “MASTER OF
BUSINESS ADMINISTRATION” from BANGALORE UNIVERSITY, during the academic year 2020 -
2021.
This study is based on original result and has not formed the basis for the award of any degree, diploma,
associate ship, fellowship or any other similar title from any other universities previously.
PLACE: BANGALORE Mr. KISORE KUMAR
DATE: Assistant Professor

CERTIFICATE FROM THE PRINCIPAL
This is to certify. that Mr. MADHU N bearing university Register No. 19AUCMD018
studying in second year ‘MASTER OF BUSINESS ADMINISTRATION’, Student of
our college and he has been successfully carried out of the dissertation entitled
“FINANCIAL STATEMENTS THROUGH RATIO ANALYSIS” under the guidance
of KISHORE KUMAR, Assistant Professor, Department of Management for the partial
fulfilment of the requirements for the award of the degree of ‘MASTER OF
BUSINESS ADMINISTRATION’ from BANGALORE UNIVERSITY, during the
Academic year 2020-2021.
This study is based on original result and has not formed the basis for the award
of any degree, diploma, associateship, fellowship or any other similar title from
any other universities previously.
PLACE: BANGALORE SIGNATURE OF PRINCIPAL
DATE:

CERTIFICATE FROM THE HOD
This is to certify that Mr. MADHU N bearing University Register No. 19AUCMD018 studying
in second year ‘MASTER OF BUSINESS ADMINISTRATION’, Student of our college and he
has been successfully carried out of the dissertation entitled “FINANCIAL STATEMENTS
THROUGH RATIO ANALYSIS” under the guidance of the KISHORE KUMAR, Assistant
Professor, for the partial fulfilment of the requirements for the award of the degree of
‘MASTER OF BUSINESS ADMINISTRATION’ from BANGALORE UNIVERSITY, during the
Academic year 2020-21.
This study is based on original result and has not formed the basis for the award
of any degree, diploma, associate ship, fellowship or any other similar title from
any other universities previously.
PLACE: BANGALORE Mrs. MANJULA R
DATE: (HOD)

DECLARATION BY STUDENT
I do hereby declare that “FINANCIAL STATEMENTS THROUGH RATIO
ANALYSIS” is the result of the dissertation carried out by me under the guidance
of KISHORE KUMAR, Assistant Professor, Department of Management,
Government first Grade College, Vijayanagar,Bangalore. In partial fulfilment of
requirement of 3rd
semester of Master’s degree in business administration by
Bangalore university.
I also declare that this project is the outcome of my own efforts and that it has not
been submitted to any other university or institute for any other degree or diploma
certificate.
PLACE: BANGALORE MADHU N
DATE: (19AUCMD018)

GOVTOF KARNATAKA
DEPARTMENT OF COLLEGIATE EDUCATION
GOVERNMENT FIRST GRADE COLLEGE, VIJAYANAGAR,
BANGALORE - 560104
PG DEPT OF COMMERCE AND MANAGEMENT
CERTIFICATE OF ORIGINALITY
This is to certify that the dissertation titled “FINANCIAL STATEMENTS
THROUGH RATIO ANALYSIS” Is an original work of Mr. MADHU N bearing
University Register No: 19AUCMD018 and is being submitted in partial
fulfilment of regulation of 3rd
semester in the Master’s degree in business
administration by Bangalore University. The dissertation has not been submitted
earlier either to this university / institution for the fulfilment of requirement of a
course of study.
SIGNATURE OF SIGNATURE OF SIGNATURE OF
GUIDE HOD PRINCIPAL

BANGLORE UNIVERSITY
CERTIFICATE OF PLAGIARISM
Name of the student : MADHU N
Register Number : 19AUCMD018
Title of Project : “FINANCIAL STATEMENTS
THROUGH RATIO ANALYSIS”
Name of the Guide : KISHORE KUMAR
Assistant Professor
Similar Content (%) Identification :21% (Acceptable maximum
limit of similarity 25%)
Submission ID Number(s): 1506039277
The dissertation report has been checked using DRILLBIT plagiarism
software
(Attached first page of the originality report as ANNEXURE) and found
within limits as per plagiarism policy and instruction issued by theUNIVESITY
/ CBSMS.
We have verified the contents of the dissertation report, as summarized aboveand
certified that the statements made above are true to the best of our knowledge and belief.
SIGNATURE OF SIGNATURE OF SIGNATURE OF
GUIDE HOD PRINCIPAL

Achievement is not always success, while it is the honest endeavor persistent effort
to do the best possible under any and all circumstances.
In my honest endeavor and effort to do the maximum possible to this dissertation
work in a short period, I own my sincere thanks to many who are directly and indirectly
associated. I record my deep sense of gratitude to my guide KISHORE KUMAR,
Assistant Professor, Dept. of Commerce and Management, Govt. First Grade College,
Vijayanagar, Bangalore for her guidance, encouragement and constant support that has led
to the progress of this project work.
I am sincerely thankful to Dr. B. CHANDRASHEKARA, Principal, and
Mrs. Manjula. R, Mr. Kishore Kumar, Mrs. Pallavi and Mrs. Madhushree, Assistant
Professors, Department of Commerce and Management, Government First Grade College,
Vijayanagar, Bangalore. For their help, support and encouragement in this report.
I would like to express the heartily gratitude to my beloved Mother and Father and my
brother for their divine blessing on me for completing this dissertation work without any
hardship.
I acknowledge my sincere thanks to all respondents who guided me in preparation of this
dissertation. Also, I thankful to all my friends for their great support and encouragement.
PLACE: BANGALORE MADHU N
DATE: REG NO:19AUCMD018

TABLE OF CONTENTS
CHAPTER
NO.
TOPIC PAGE NO.
01 INTRODUCTION 01 - 05
02 DESIGN FOR THE STUDY 06 - 08
03 INDUSTRY AND COMPANY PROFILE 09 - 25
04 DATA ANALYSIS AND INTERPRETATION 26 – 46
05 FINDINGS AND SUGESSIONS 47 – 48
06 ANNEXURE 49 – 52

KARNATAKA SOAP AND DETERGENT LTD.
1
GOVT FIRST GRADE COLLEGE, VIJAYANAGAR
CHAPTER-1
INTRODUCTION
Financial management is that managerial activity which is concerned with the planning and
control of the firm financial resources. It was a branch of economics till 1890, and as a separate
discipline, it is of recent origin. Still, it has no unique body of knowledge of its own, and draws heavily
on its theoretical concept’s economics for even today.
The subject of financial management is of immense interest to both academicians and practicing
managers. It is of great interest to academicians because the subjects is still developing, and there are still
certain areas where controversies exist for which no unanimous solutions have been reached as yet. Practicing
managers are interested in this subject because among the most crucial decisions of the firm are those which
relate to finance, and an understanding of the theory of financial management provides them with conceptual
and analytical insights to make those decisions skilfully.s
Monetary administration is a monetary perspective, which manages all the monetary exchanges done in
association. According to the administration definition we can say that monetary administration implies
arranging and controlling of assets in an association. Similarly as course of platelets fundamental in the human
body to look after life, money is extremely vital for the business association for smooth running of the
business.
DEFINITION
⇒ “Financial management may be considered to be the management of the finance function.”
_Raymond chambers
⇒ “Business finance can broadly be defined as the activity concerned with planning, raising, controlling
and administrating of funds used in the business.”
_ Guttmann and Doug Hal
⇒ “Financing consists with the rising, providing and managing of all the money, capital funds of any kind
to be used in connection with the business.”
_ Bonneville and Dewey
NATURE OF FINANCIAL MANAGEMENT
Financial management is that managerial activity which is concerned with the planning and
controlling of the firm’s financial resources. As a separate activity of discipline, it is recent origin. It was
a branch of economics till 1980. Still today, it has no unique body of knowledge of its own, and it draws
heavily on economics for its theoretical concepts.
OBJECTIVES OF FINANCIAL MANAGEMENT
The firm investment and financing decisions are unavoidable and continuous. In order to make them
rationally, the firm must have a goal. It is generally agreed in theory that the financial goal of the firm should
be the maximization of owner’s economic welfare could be maximized be maximizing the shareholder’s wealth
maximization is theoretically logical and operationally feasible normative goal for guiding the financial
decision making.
A. Profit maximization
B. Wealth maximization

2
IMPORTANCE OF FINANCIAL MANAGEMENT
The important of financial management cannot be over emphasized. In every organizational fund are
involved, sound financial management is necessary.
Sound financial management is essential in both profit and non-profit organization. The financial
management helps in monitoring the effective deployment of funds in fixed assets and in working capital.
The financial manager estimates the total requirement of funds, both in the short period and long period.
Financial management also helps in
Rehearsing directors are keen regarding this matter in light of the fact that among the most critical
choices of the firm are those which identify with money, and a comprehension of the hypothesis of monetary
administration gives them calculated and logical bits of knowledge to settle on those choices skilfully.
Introduction to Ratio analysis
Meaning of Ratio Analysis
Now, we have previously learned what ratios are. They are a comparison of two numbers with respect to each
other. Similarly, in finance, ratios are a correlation between two numbers, or rather two accounts. So, two
numbers derived from the financial statement are compared to give us a moreclear understanding of them. This is
an accounting ratio.
One factor to be kept in mind is that ratio analysis is used only to compare numbers that make sense and give us a
better understanding of the financial statement. Comparing random financial accounts should be avoided.
Objectives of Ratio Analysis
Interpreting the financial statements and other financial data is essential for all stakeholders of an entity. Ratio
Analysis hence becomes a vital tool for financial analysis and financial management. Let us take a look at some
objectives that ratio analysis fulfils.
1] Measure of Profitability
Benefit is a definitive point of each association. So on the off chance that I say that ABC firm procured a
benefit of 5 lakhs a year ago, how might you decide whether that is a fortunate or unfortunate figure? Setting
is needed to gauge benefit, which is given by proportion investigation. Net Profit Ratios, Net Profit Ratio,
Expense proportion and so forth give a proportion of the benefit of a firm. The administration can utilize such
proportions to discover pain points and develop them.
2] Evaluation of Operational Efficiency
Certain ratios highlight the degree of efficiency of a company in the management of its assets and other resources.
It is important that assets and financial resources be allocated and used efficiently to avoid unnecessary
expenses. Turnover Ratios and Efficiency Ratios will point out any mismanagement of assets.
3] Ensure Suitable Liquidity
Every firm has to ensure that some of its assets are liquid, in case it requires cash immediately. So the liquidity of
a firm is measured by ratios such as Current ratio and Quick Ratio. These help a firm maintain the required level
of short-term solvency.

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4] Overall Financial Strength
There are some ratios that help determine the firm’s long-term solvency. They help determine if there is a
strain on the assets of a firm or if the firm is over-leveraged. The management will need to quickly rectify the
situation to avoid liquidation in the future. Examples of such ratios are Debt-Equity Ratio, Leverage ratios
etc.5] Comparison
The organizations’ ratios must be compared to the industry standards to get a better understanding of its financial
health and fiscal position. The management can take corrective action if the standards of the market are not met
by the company. The ratios can also be compared to the previous years’ ratios to see the progress of the company.
This is known as trend analysis.
Advantages of Ratio Analysis
When employed correctly, ratio analysis throws light on many problems of the firm and also highlights some
positives. Ratios are essentially whistle-blowers, they draw the management’s attention towards issues needing
attention. Let us take a look at some advantages of ratio analysis.
• Ratio analysis will help validate the financing, investment and operating decisions of the firm.
They summarize the financial statement into comparative figures, thus helping the management to
compare and evaluate the financial position of the firm and the results of their decisions.
• It simplifies complex accounting statements and financial data into simple ratios of operating
efficiency, financial efficiency, solvency, long-term positions etc.
• Ratio analysis help identify problem areas and bring the attention of the management to such areas.
Some of the information is lost in the complex accounting statements, and ratios will help pinpoint
such problems.
• Allows the company to conduct comparisons with other firms, industry standards, intra-firm
comparisons etc. This will help the association better comprehend its monetary situation in the
economy.
Limitations of Ratio Analysis
While ratios are very important tools of financial analysis, they have some limitations, such as
• • The firm can make some year-end changes to their budget summaries, to improve their
proportions. At that point the proportions wind up being only window dressing.
• Ratios ignore the price level changes due to inflation. Many ratios are calculated using historical
costs, and they overlook the changes in price level between the periods. This does not reflect the
correct financial situation.
• Accounting ratios completely ignore the qualitative aspects of the firm. They only take into
consideration the monetary aspects (quantitative)
• There are no standard definitions of the ratios. So, firms may be using different formulas for the
ratios. One such example is Current Ratio, where some firms take into consideration all current
liabilities but others ignore bank overdrafts from current liabilities while calculating current ratio
• And finally, accounting ratios do not resolve any financial problems of the company. They are a
means to the end, not the actual solution.

4
CHAPTER-2
DESIGN OF THE STUDY
NEED AND IMPORTANCE OF STUDY
Financial statements are prepared for the purpose of presenting a periodical review of report by the
management in business and result achieved during the period under review. It reflects a combination of facts
accounting conventions and personal judgments. recorded
The main need of the study is to study the financial performance of the company and methods to evaluate
the financial performance of the company.
Finance is the life blood of any organization. The future of any organization depends on the ability of the
organization to make use of its resources in the best way. The information relating to the financial position of
the company is of great interest to management, creditors, investors and other to have a judgment about the
operating performance and financial position of the stakeholders.
SCOPE OF THE STUDY
The scope of the study covers the previous five years financial reports of the company.
An extensive study is done on the financial performance of KARNATAKA SOAPS AND DETERDENTS
Ltd.
The study concentrates on the profitability position of the firm and the brief study.
The study covers all the financial information of the firm.
The scope of the study is defined below in terms of concepts adopted and period under focus. First the
study of the Ratio analysis is confined to the KARNATAKA SOAPS AND DETERGENTS Ltd.
Second the study is based on the annual reports of the company for a period of 5 years from 2005-2006
to 2009-2010 the reason for restricting the study to this period is due to time constraints.
OBJECTIVES OF THE STUDY
• To study the financial performance of the company.
• To assess the profitability position of the firm.
• To assess the operating efficiency by finding the operating profit and operating ratio.
• To know the collection efficiency. To evaluate how effectively short terms sources like
creditors are used for working capital requirements.
LIMITATIONS OF STUDY
Confidentiality was a constraint for data collection.
Time is a major constraint as the project was done only for a period of two month
Window dressing (false results may be possible on incorrect account of data).

5
RESEARCH METHODOLOGY
In view of the objective of the study listed above, an exploratory research design has been
adopted. Exploratory research is one which is already interpreted and already available
information and it lays particular emphasis on analysis and interpretation of the existing and
available information. It makes use of secondary data.
DATA COLLECTION
The study depends up on primary and secondary data from various sources.
SOURCES OF DATA
The data collected related to the study was divided into two parts.
1. Primary data
2. Secondary data
PRIMARY DATA
Direct data was gathered from specialists of account division, based on which current situation of the
organization is recognized.
SECONDARY DATA The secondary data is collected from the annual reports, schedules, budgets and
other statements of the company, company websites etc., Which is provided by the finance department of
“KARNATAKA SOAP AND DETERGENT LTD.”

6
CHAPTER-3
INDUSTRY PROFILE
Soap is one of the commodities, which have become an indispensable part of the life of modern world.
Since it is non-durable consumer goods, there is a large market for it. The whole soap industry is
experiencing changes due to innumerable reasons such as government relations, environment and energy
problems increase in cost of raw material etc.
The changing innovation and in any event, existing longing by the people and the associations to create a
superior item at a simple efficient rate has likewise gone about as impetus for the powerful interaction of
progress. Increasingly more Soap fabricates are attempting to catch an ordering piece of the overall industry
by presenting and keeping up satisfactory items. The cleanser business in India faces a relentless rivalry
while global organizations overwhelm the market.
Following swadeshi movement in 1905, few factories were set up and they were:
1. Mysore Government Soap factory at Bangalore.
2. Godrej Soaps at Bombay.
THE INDIAN SOAP INDUSTRY SCENARIO :-
The Indian soap industry has been dominated by handful of companies such as
1. Hindustan Lever Limited.
2. Tata Oil Mills (Taken over by HLL)
3. Godrej Soaps Private Limited.
4. Recent entrants include – Colgate Palmolive Ltd.,
_ Proctor & Gamble Ltd.,
_ Nirma Soap Works,
_ Wipro Ltd.,
The Indian soaps industry continued to flourish very well until 1967-68, but began to stagnate. Soon it started
to recover and experienced a short upswing in1974. This increase in demand can be attributed to:-
1. Growth of population.
2. Income and consumption increase.
3. Increase in urbanization.
4. Growth in degree of personal hygiene.
Soap manufactures are classified as, Organized and unorganized sector. KSDL is under organized sector.
HISTORY OF THE SOAP:
Customarily, cleanser has been fabricated from antacid (lye) and creature fats (fat), albeit vegetable
items, for example, palm oil and coconut oil can be fill in for fat. American settlers had both significant
elements of cleanser in plenitude, thus cleanser making started in America durin2g the soonest pilgrim days.
Fat came as a result of butchering creatures for meat, or from whaling. Ranchers created soluble base as a
result of clearing their territory; until the nineteenth century wood cinders filled in as the significant wellspring
of lye. The cleanser fabricating measure was straightforward, and most ranchers could along these lines make
their own cleanser at home.

7
The major uses for soap were in the household, for washing clothes and for toilet soap, and in textile
manufacturing, particularly for filling, cleansing, and scouring woolen stuffs. Because colonial America was
rural, soap making remained widely dispersed, and no large producers emerged. By the eve of the American
Revolution, however, the colonies had developed a minor export market; in 1770 they sent more than 86,000
pounds of soap worth £2,165 to the West Indies. The Revolution interrupted this trade, and it never recovered.
The development of urban communities and the material business in the mid nineteenth century expanded
cleanser utilization and animated the ascent of cleanser making firms. By 1840, Cincinnati, at that point the
biggest meatpacking place in the United States, had become the main cleanser making city also. The city
bragged in any event seventeen cleanser processing plants, including Procter and Gamble (set up 1837),
which was bound to turn into the country's predominant firm. A significant change in cleanser making
happened during the 1840s when producers started to supplant lye produced using wood cinders with soft
drink debris, lye made through a substance interaction. Practically all cleanser creators additionally
delivered fat candles, which for some was their significant business. The organizations made cleanser in
tremendous pieces, and these were offered to food merchants, who cut the item like cheddar for singular
purchasers. There were no brands, no publicizing was aimed at purchasers, and most cleanser plants stayed
little before the Civil War
GROWTH OF INDIAN SOAP INDUSTRY:
The time frame between the finish of the Civil War and 1900 carried significant changes to the cleanser
business. The market for candles reduced strongly, and cleanser creators suspended that business.
Simultaneously, rivalry rose. Many cleanser creators started to mark their items and to present new
assortments of latrine cleanser made with such fascinating fixings as palm oil and coconut oil. Publicizing,
from the outset unassuming however continually expanding, turned into the significant advancement. In 1893
Procter and Gamble burned through $125,000 to advance Ivory cleanser, and by 1905 the business financial
plan for that item alone surpassed $400,000. Publicizing demonstrated incredibly powerful. In 1900 cleanser
creators packed their promoting in papers yet in addition publicized in trolleys and trains. Fast to perceive the
interchanges upheaval, the cleanser business spearheaded in radio promoting, especially by creating daytime
sequential dramatizations. Procter and Gamble began Ma Perkins, one of the soonest, best, and most extensive
of the class that came to be known as Soap Operas, to promote its Oxydol cleanser in 1933. By 1962 significant
cleanser firms spent roughly $250 million every year for promoting, of which 90% was TV publicizing. In
1966, three out of the main five TV promoters were cleanser producers, and Procter and Gamble was TV's
greatest support, burning through $161 million.
Advertising put large soap makers at a competitive advantage, and by the late 1920s three firms had come to
dominate the industry: (1) ColgatePalmolive-Peet, incorporated as such in 1928 in.
New York State, although originally founded by William Colgate in 1807; (2) Lever Brothers, an English
company that developed a full line of heavily advertised soaps in the nineteenth century and in 1897 and 1899
purchased factories in Boston and Philadelphia; and (3) Procter and Gamble.
A cleanser producer at the Procter and Gamble Company had no clue another advancement was going to
surface when he went to lunch one day in 1879. He neglected to kill the cleanser blender, and more than the
typical measure of air was dispatched into the bunch of unadulterated white cleanser that the organization
sold under the name The White Soap. Dreading he would fall into difficulty, the cleanser creator stayed
quiet about the slip-up and bundled and transported the air-filled cleanser to clients around the country.
Before long clients were requesting more "cleanser that drifts." When organization authorities discovered
what occurred, they transformed it into one of the organization's best items, Ivory Soap.

8
PROBLEMS AND PROSPECTS OF SOAP INDUSTRY:
The changing technology and even existing desire by the individuals and the organization to produce
a better product at a mere economical rate has also acted as Catalyst for the dynamic process of change. More
and more Soap manufactures are trying to capture a commanding market share by introducing and maintaining
acceptable products. Soap industry faces some problems in case of raw materials. The major ingredients are
soap ash, linear alkyl, benzene& sodium. Tripoli phosphate poses number of serious problems in terms of
availability. The demand supply gap for vegetable oil is 1.5 to 2 lakhs tons & is met through imports. In recent
times, caustic soda and soap ashes in the cheaper varieties of soaps are quite high. The soap industry in India
faces a cut throat Competition, while multinational companies dominate the market.
PRESENTSTATUSMARKETSCERIO
India is the ideal market for cleansing products. The countries per capita consumption of detergent
powders and bars stands at 1.6kg and soaps at 543gms. Hindustan Lever, which heralds over the cleaning
business, sells in all over the cleaning business. The 7.4lakhs tons per annum soap market in India in crawling
along at 4%. The hope lies in raising Rupee worth, the potential for which is high because the Indian soap
market is pseudo in nature & it is amazingly complex being segmented not only on the basis of price benefits,
but even a range of emotions within that outlining framework.
COMPANY PROFILE
India is a rich place that is known for timberland; ivory, silk, shoe; valuable diamonds are enchanted
charms of hundreds of years. The most charming fragrances of the world got their colorful spell with a bit of
shoe. The world's most extravagant sandalwood asset is structure one secluded stretch of timberlands land in
South India that is Karnataka.
The source of sandalwood and its oil in Karnataka, which is utilized in making of Mysore shoe
cleansers is notable as Fragrant Ambassador of India and Sandalwood oil is infact known as "Fluid Gold".
By the motivation of his Highness Maharaja of Mysore late Jayachamarajendra Wodeyar, the
exchanging of sandalwood logs began which was sent out to Europe and New objections, however with
initiation of First world war India confronted extreme emergency on the matter of sandalwood.
The present circumstance offered ascend to beginning of an industry, which produces esteem added
items i.e., of sandalwood oil. His Excellency Maharaja of Mysore caused the present circumstance as a chance
by planting the seed of the Government Sandalwood Oil Factory, which is the present KS&DL. The venture
was formed with the designing abilities and aptitude of the high level. Late Sir M.Visvesvaraya, the
incomparable Engineer who was the man behind the task.
Today’s famous Mysore sandal soaps credit goes to late Sri Sosale Garalapuri Shastri who
incorporated the process of soap making using sandalwood oil. He was an eminent scientist in the field
working at the Tata Institute, Bangalore. He was sent to England to master the fine aspects of soap
manufacturing.
The Maharaja of Mysore & Diwan Sir, M.Visvesvaraya established the Government Soap factory
during the year 1918. The factory was started as a very small unit near K.R.Circle, Bangalore with the capacity
of 100 tons P.A. in November 1918 the Mysore sandal soap was put into the market after sincere effort and
experiments were undertaken to evolve a soap perfume blend using sandalwood oil as the main base to
manufacture toilet soap.
The processing plant moved its activity to Rajajinagar modern territory, Bangalore in july 1957, where
the current plant is found. The plant involves a zone of 39 sections of land (covering Soaps, cleansers and

9
unsaturated fat division), on the Bangalore-Pune Highway, effectively open by transport administration and
correspondence. Another sandalwood oil division was set up during the year 1944 at Shimoga, which halted
its tasks in the year 2000 for need of Natural Sandalwood.
This factory started at moderate scale in year 1916. The first product was washing soap in addition to
the toilet soap in addition to the toilet soap in the year 1918. The toilet soap of the company was made up of
sandalwood oil.
The business has 2 additional divisions one at Shimoga and another at Mysore where sandalwood oil is
separated. The Mysore division began working from 1917 and just during 1984 assembling of perfumed and
debut quality Agarbathis at was begun. Directly from the principal log of sandalwood that folded into the
engine compartment 1916, the organization has been determined quest for greatness. The task came to
fruition with the designing abilities and aptitude of high level group under the pioneer boat of Sir. M.
Visvesvaraya, Prof. Watson and Dr. Sudbrough. Like this cleanser industrial facility was begun as a little
unit and now it has grown up to a monster size.
RENAMING:
On 1st
October 1980, the Government Soap Factory was renamed as “Karnataka Soaps and Detergent Limited”
The Company was registered as a public limited company. Today Company produces varieties of products
in the toilet soaps, detergent, Agarbathies and Cosmetics.
VISION STATEMENT:
Keeping pace with globalization, global trends and the state’s policy for using technology in every
aspect of governance. Secure all assistance and prime status from Government of India, all technology
alliances. Making available technology product and services at the most affordable price to the people at
large, in keeping with the policy of a welfare state.
MISSION STATEMENT :-
To serve the National economy and to attain self-relianceTo promote purity & quality products and to
maintain the brand loyalty of its customers.
OBJECTIVES OF KSDL:
• To serve the national economy
• To promote purity and quality products and thus enhance age old – charm of Sandalwood Oil
• To build upon the reputation of Mysore Sandal soap based on pure sandal oil
• To maintain the brand loyalty of its customer and to supply the products mentioned
above at most reasonable and competitive.
POLICY OF KS&DL: -
• Seek purchase of goods and services from environment responsible suppliers.

10
• Communicate its environment policy and best practices to all its employees implications.
• Strive to design and develop products, which have friendly environmental impact during manufacturing.
• Reuse and recycle materials wherever possible and minimize energy consumption & waste.
SWOT ANALYSIS OF KS&DL STRENGTHS:
1. Only soap in India that contains pure sandal and almond oil.
2. certified by ISO
3. World’s largest production of sandalwood oil.
4. Brand name from decades from soap market.
5. It has very good dealership network in south which ensures that the products reach
every customer.
6. Diversified product range helps the company to maintain stability.
WEAKNESS:
1. Distribution network was weak in north and east.
2. Poor television advertisement.
3. Neglecting freshness aspect.
4. High oriented cost due to excessive labour force.
5. Low turnover resulting in low profits.
OPPORTUNITIES :
1. Traditional benefits that sandal is good for skin.
2. Skin care is gaining importance among consumers.
3. Government supports and large production capacity.
4. Advantages of being in the industry for a long time.
5. Existence of vast market and huge demand.
THREATS:
• Other contender's items, for example, Rexona, Moti, Santoor and so
• forthThere is a need for renovation of plant and machinery.
• Government policy may reduce growth potential.
• Many alterntive sandal soaps in the market.
CLASSIFICATION OF EMPLOYEE AT KS&DL
• Permanent Employee: One who has been engaged for work on a permanent basis.
• Temporary Employee: One who has been engaged for work which is essentially of temporary nature and
likely to be finished within a limited period.
• Probationary Employee: One who is provisionally employed to fill a permanent vacancy.

11
• Casual Workmen: One who is engaged on day-to-day basis for casual or non-recurring work.
• Trainee: Trainee is a learner who may or may not be paid stipend during the period of training.:
ORGANIZATION STRUCTURE :
Association structure is a fundamental system inside which the administrators dynamic conduct happens.
The design gives a set up example of relationship among the different segments or parts of an association.
It is a crucial device for giving data about association connections.
ORGANISATION CHART:
HUMAN RESOURCE DEPARTMENT
1 M.D Managing Director
2 E.D Executive Director
3 GEN. MGR (R&D/P&M) General Manager (R & D / Prodn.& Maintenance)
4 GEN. MGR (F) General Manager (Finance)
5 DY. GEN MGR (FTD) Deputy General Manager (Foreign Trade)
6 DY. GEN MGR (MTLS & Strs) Deputy General Manager (Materials & Stores)
7 AGM (R & D) Assistant General Manager (R & D)
8 AGM (HRD) Assistant General Manager (HRD)
9 MGR (MD's Office) Manager (MD's Office)
10 MGR (MIS) Manager (Management Information System)
COMPETITORS OF KS&DL PRODUCTS AND SERVICES:-
KS&DL is facing cutthroat competition in national and international market. Some of its main competitors
are: -
1. M/S. Hindustan Uni Lever Ltd.,
• M/S. Godrej Soaps Private Ltd.,
• M/S. Proctor& Gamble
• M/S. Wipro
• M/S. Nirma Soaps Private Ltd.,
• M/S. Jyothi Laboratories

12
TRADEMARK OF KS & DL
The “SHARABHA” The carving on the cover is the sharabha, the trademark of KS & DL
The sharabha is a fanciful creation from the "puranas" which has a body of a lion and head of elephant, which
typifies the joined ideals of astuteness and strength. It is embraced as an authority insignia of KS& DL to
represent the way of thinking of the organization.
The sharabha thus symbolized a power that removes imperfections and impurities. The maharaja of Mysore
as his official emblem adopted it. And soon took its pride of place as the symbol of the Government Soap
Factory of quality that reflects a standard of excellence of Karnataka Soaps and Detergent Limited.
PRODUCT RANGE FROM THE HOUSE OF MYSORE SANDAL SOAP
MYSORE SANDAL SOAP
MYSORE SANDAL BATH TABLET
(150gms)

13
MYSORE SANDAL BABY SOAP
(75gms)
THREE IN ONE GIFT PACK –(SJR) 3 TABS
(150gms each)
MYSORE SANDAL GOLD SOAP
(75gms, 125gms)

14
MYSORE ROSE SOAP (100gms, 125gms)
MYSORE SANDAL GOLD SIXER 6 TABS
(125gms each)
MYSORE HERBALCARE
(15hms, 75gms, 100gms)
MYSORE WAVE LIME

15
MYSORE SANDAL WAVE (TURMERIC)
MYSORE SANDAL MILLENIUM (150gms)
MYSORE DETERGENT CAKE

16
MYSORE DETERGENT POWDER
SLOGAN: - “Natural products with exotic fragrances”
KS & DL has a long tradition of maintaining the highest quality standard, right from the selection of raw
materials to processing and packing of the end product.
The reasons why its products are much in demand globally and are exported regularly to UAE, Bahrain, Saudi-
Arabia, Kuwait, Qatar, South America. The entire toilet soaps of KS & DL are made from raw materials of
vegetable origin and are totally free from animal fats.
BACKGROUND OF KS&DL:-
1918 – Government Soap Factory was started by Maharaja of Mysore and the Mysore Sandal Soap was
introduced into the market for the first time.
1950 - The factory output rose to 500 Metric Tons with the following modifications.
1. Renovating the whole premises.
2. Installing new boiler soap building plant and drying chamber.
1954 – Received license from Government to manufacture 1500 tons of soap and 75 tons of glycerin per year.
1984 – Manufacturing of premium quality of Agarbathies at Mysore division.
1985 – Production capacity was raised to 26,000 M.Tons Per Annum. A large variety of toilet soaps at
attractive shapes, colors and fragrances introduced to meet the varieties & tastes of consumers.
1992 – The company was registered with the Board for Industries and Financial Reconstruction (BIFR), New
Delhi in December for rehabilitation, as the company suffered losses continuously since 1980 at its net worth
fully eroded.
1996 – The BIFR approved the rehabilitation scheme in September & the Company stated making Profits.
2003 – The entire carried forward loss of Rs.98 Crores wiped out and in May BIFR, declared the company to
be out of its Purview. The Company is making profit continuously; it is only State Public Sector unit that has
come out of BIFR

17
PRESENT STATUS OF THE COMPANY
The organization is chiefly subject to southern market. The item accessibility in retail outlets especially for
Mysore shoe cleanser is practically tantamount to some other comparable enterprises items in the top notch
fragment in the south. Though in different parts like Eastern and Northern business sectors entrance of KSDL
item is generally poor, which relies upon the organization's conveyance structure, stockiest and field work
force strength.
With increased trust on distribution, the company does not foresee any problems to achieve the projected sales
through the redistribution package.
Further, the policy of Indian Government also sees the public sector enterprise enter the industry in a large
way there by making the products available to the consumers at reasonable prices.
Being located in the center in the southern part of Indian the Government Soap Factory claims preferential
treatment for expansion programme in view of availability of exotic natural Sandalwood oil.
AN ISO-9002 COMPANY: -
KS & DL with a tradition of excellence of over eight decades is committed to customer delight, through total
quality management and continuous improvement through the involvement of all employees. KS&DL has
got ISO 9002 certificate.
To improve the quality management system and to facilitate TQM in the process of soap and detergent, the
management took decision to obtain ISO9002 by end of March 1999. Accordingly action plan was drawn
and a committee was set up for the purpose during October 1998 with a mission statement.
The company gives initial training including conducting employee’s awareness programme, document quality
manual and quality system procurement.
Toward this path organization got the direction from Consultancies, Bangalore and Bureau of Indian
Standards, Bangalore. Likewise, organization guidelines enrolled for ISO 9002 before the finish of March to
the Bureau of Indian Standards. Acquired the authentication before the finish of March 1999 itself.
This id to project in the national and international market and also to improve the quality of products offered
to the consumers with the assurance of quality in the message. The company got itself upgraded to ISO-
90012004, Quality systems in the year 2004-05.
ISO-14001:-
The company is located in the heart of the Bangalore city. The management of the company took a decision
to get the ISO-14001 and become model to other public sector for the techniques used and also to other
Government units to spread the message of maintenance of environment.
ISO-14001 and ISO-9001 will facilitate to improve the corporate brands in the global market and it will help
the company to improve the profits, year after year on long-term basis.
The environment management system adopted in the company through this motive as follows:
• Conservation of energy
• Conservation of Surrounding
• Conservation of resources
Equipped with latest technology and backed by full-fledged quality control and R&D support, KS&DL is marching
confidentially ahead in the new millennium. The Company is developing new products to meet the changing preferences
of its customers.

18
REVIEW OF LITERATURE:
To understand the financial performance and condition of a firm, its stockholders look at three
financial statements viz. the balance sheet, the profit and loss statement and the sources and uses of funds
statements. The balance sheet shows the financial position of the firm at a given point of time. The profit
and loss statement reflects the financial performance of the firm over a period of time typically it is drawn
up for a period of one year. The sources and uses of fund statement portray the flow of funds through the
business during a given accounting period.
Budget report examination might be accomplished for an assortment of purposes, which may go from
a basic investigation of the transient liquidity position of the firm to an exhaustive evaluation of the qualities
and shortcoming of the firm in different territories. It is useful in evaluating the corporate greatness passing
judgment using a credit card value, determining security appraisals, foreseeing liquidation and surveying
market hazard.
Ratio analysis is a powerful tool to financial analysis. The ratio analysis involves comparison for a
useful interpretation of the financial statements. A single ratio in itself does not indicate favorable or
unfavourable condition. It should be compared with some standard. Standards of comparison may consist of
part ratios, projected ratios, competition ratios and industry ratios.
A few proportions determined from the bookkeeping information can be gathered into different classes as per monetary
action or capacity to be assessed as the short and long haul loan bosses proprietors and the board are keen on monetary
investigation. In the account writing a great deal of significance has been connected to monetary proportions for
evaluating the monetary wellbeing of a firm. The monetary organizations and business banks are intrigued to know
whether a specific organization will be in a situation to reimburse its obligation.

19
CHAPTER-4
DATA ANALYSIS
LIQUIDITY RATIOS
CURRENT RATIO :
Current ratio may be defined as the relationship between current assets and current
liabilities. This ratio, also known as working capital ratio, is a measure of general liquidity
and is also most widely used to make the analysis of a short-term financial position (or)
liquidity of a firm
Current Ratio = Current Assets/Current Liabilities
A relatively high current ratio is an indication that the firm is liquid and has the
ability to pay its current obligations in time as and when they become due. On the other
hand a relatively low current ratio represents that the liquidity position of a firm is not good
and the firm shall not able to pay its current liabilities in time. “Two to one ratio” is referred
to as a banker’s rule of thumb (or) arbitrary standard of liquidity for a firm.
YEAR Current assets Current
liabilities
Current
Rations
2016-17 340.05 96.87 3.51
2017-18 453.62 145.53 3.11
2018-19 633.33 222.74 2.84

20
GRAPH:
INTERPRETATION:
The current ratios are 3.51,3.11 & 2.84 for the study period. The standard ratio of 2:1 was
observed during all the study period. So, it shows the efficient management of current assets
and current liabilities. Compare to among three years of study period 2016-17 years ratio is
good at 3.51.
2. QUICK RATIO
Quick ratio is known as basic analysis or liquid ratio is a more thorough trial of liquidity then
the current proportion. At that point term liquidity raffs to the capacity of a firm to pay its
momentary commitments as and when they become due. The two determinants of current
proportion is as a proportion of liabilities.
Quick ratio may be current or liquid liabilities. Inventories cannot be termed to be
liquid assets because they cannot be converted into cash immediately without a sufficient loss
of value. The quick ratio can be calculated by dividing the total of the quick assets by total
current liabilities. As a rule of thumb (or) as a convention quick ratio of 1 is considered
satisfactory.
0
100
200
300
400
500
600
700
2016-17 2017-18 2018-19
CURRENT ASSETS CURRENT LIABILITIES

21
Quick Ratio = Quick Assets/ Current Liabilities
YEAR LIQUID ASSETS CURRENT LIABILITY RATIOS
2016-17 158.44 96.87 1.63
2017-18 299.17 145.53 2.05
2018-19 415.28 222.74 1.86
GRAPH:
INFERENCE
The Quick ratio show a variation during the study period. The values are respectively. It
was observed that the standard ratio of 1:1 was maintained in the study period. The high quick
ratio is an indicates that the firm is liquid and has the ability meets its current liabilities.3.
0
50
100
150
200
250
300
350
400
450
2016-17 2017-18 2018-19
LIQUID ASSETS CURRENT LIABILITY

22
CASH RATIO
Cash is the most liquid asset a financial analyst may examine cash ratio and its
equivalent to current liabilities. Trade investments or marketable securities are equivalent of
cash therefore they may be included in the computation of cash ratio. Absolutely liquid assets
include cash in hand and at bank and marketable securities; or temporary investment. The
acceptable norm for this ratio is 50% (or) 0.5. It can be calculated as follows
CashRatio=(cash+marketable securities)/Current Liabilities
This ratio is also called Absolute Liquidity Ratio or Super Quick ratio.
YEAR ABSOLUTE
LIQUIDITY
RATIO
CURRENT
LIABILITY
RATIO
2016-17 134.23 96.87 1.38
2017-18 270.43 145.53 1.85
20118-19 363.06 222.74 1.62

23
GRAPH:
INFERENCE:
This Ratio indicates the proportion of Cash and Bank balance. i.e. it shows the ability of a firm to pay its
current liabilities by using most liquid assets, Cash and Bank balance.
The Cash Ratios of KARNATAKA SOAPS & DETERGENTS LTD for the period study from 2016-2019
are 1.38, 1.85 and 1.62 respectively. It is high in 2018-19.
0
50
100
150
200
250
300
350
400
2016-17 2017-18 2018-19
ABSOLUTE LIQUIDITY RATIO CURRENT LIABILITY

24
3. FIXED ASSETS TURN OVER RATIO
This ratio is calculated by dividing Net Sales into Net fixed assets. This ratio expressed the
number of times fixed assets are being turnover in a stated period. This ratio shows how well the fixed
assets are being used in business. Fixed assets turnover ratio is the ratio between net sales and fixed
assets. It indicates as to what extent the fixed assets have been utilized.
Fixed Assets Turn Over Ratio = Net Sales / Net Fixed Assets
YEAR SALES FIXED ASSETS RATIO
2016-17 405.20 1261.54 0.32
2017-18 488.61 1261.94 0.38
2018-19 568.25 1263.25 0.44
GRAPH:
0
200
400
600
800
1000
1200
1400
2016-17 2017-18 2018-19
SALES FIXED ASSTES

25
Analysis:
The above table stats that the fixed assets turn over ratio are increasing yearly, in the year
2016-17 the fixed assets turn over ratio was 0.32, and in the year 2017-18 the ratio was 0.38,
and in the year 2018-19 the ratio is 0.44.
INTERPRETATION:
As the fixed assets turnover ratios are increasing yearly it sounds good to accompany that the
company how much they have invested they are getting good return to that investment.
4. NET WORKING CAPITAL RATIO
The difference between the current assets and the current liabilities excluding short-
term bank borrowings is called net working capital. It is sometimes used as a measure of a
firm’s liquidity.
It is considered that between two firms, the one having the larger networking capital
has greater ability to meet its current obligations. NWC, however, measures the firm’s
potential reservoir of funds. It can be related to net assets (or capital employed).
Net working capital Ratio = Net sales/ Net assets Net working capital=
current assets- current liabilities

26
YEAR NET SALES NETWORKING
CAPITAL
RATIOS
2016-17 405.20 243.18 1.66
2017-18 488.61 308.01 1.58
2018-19 568.25 410.59 1.38
GRAPH:
0
100
200
300
400
500
600
2016-17 2017-18 2018-19
NET SALES NET WORKING CAPITAL

27
ANALYSIS:
The above table shows that the working capital turnover ratio is decreasing year by year in the
2016-17 the ratio was 1.66 and in the year 2017-18 the working capital ratio was 1.66 in the
year 2017-18 the working capital ratio was 1.58 and in the year 2018-19 the ratio was 1.38
INTERPETITION
If the working capital turn over ratio is in positive trend it indicate the company efficiency and
if the working capital turn over is decreases year by year then the company is under trading.
INVENTORY TURN OVER RATIO
It indicates whether inventory is efficiently used or not the purpose is to be whether only
the required minimum funds have been locked up to the inventory. This ratio implies number
of times stock has been turned over during a period and evaluates efficiency with which a firm
is able to manage its inventory.
Inventory Turnover Ratio = Sales/Average stock
YEAR NET SALES AVERAGE STOCK INVENTARY RATIO
2016-17 405.20 181.56 2023
2017-18 488.61 154.45 3.16
2018-19 568.25 218.05 2.60

28
GRAPH:
ANALYSIS:
The above table states that the stock turn over ratio was less in the year 2016-17 that is 2023, and it has increased
in the year 2017-18 that is 3.61 and again in the year 2018-19 it has got decreased to 2.60.
INTERPRETATION:
From the above graph examined that stock turn over proportion shows fluctuating on the whole the years. It
shows the organization is less limit with offer of its stock.
. NET ASSETS TURN OVER RATIO
Assets are used to generate sales. Therefore a firm should manage its assets efficiently
to maximize sales. The relationship between sales and assets is called Net Assets turnover
ratio.
Net Assets turnover Ratio = Sales / Net Assets
0
100
200
300
400
500
600
2016-17 2017-18 2018-19
NET SALES AVERAGE STOCK

29
YEAR NET SALES TOTAL ASSETS RATIO
2016-17 405.20 1896.58 0.21
2017-18 488.61 1715.56 0.28
2018-19 568.25 1601.59 0.35
GRAPH:
Analysis:
The above table shows that the complete resources turn over proportion builds step by step in the year 2016-17
the resource turn over proportion was 0.21, and in the year 2017-18 the resources turn over proportion was 0.28,
and in the year 2018-19 the proportion was 0.35.
INTERPETATION:
If the asset turnover ratio was increased year it states that company is more efficient at using it assets.
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2016-17 2017-18 2018-19
NET ASSET TOTAL ASSET

30
CREADITORS TURN OVER RATIO
It gives the average credit period enjoyed from creditors
Creditors turn over ratio= net credit purchase/average creditors
Net credit purchase=cogs+ ending inventory-starting inventory
Average trade creditors=opening creditors + closing creditors/2
YEAR NETCREDIT
PURCHASE
AVERAGE
CTREDITORS
RATIO
2016-17 233.6 3.81 61.3
2017-18 256.92 1.795 143.13
2018-19 303.47 2.39 126.9
GRAPH:
ANALYSIS:
The above table shows that credit turnover proportion is fluctuating step by step, in the year 2017 credit turnover
proportion was 61.3, and in the year 2018 it has decreased to 143.13, and in the year 2019 the credit turnover
proportion was expanded to 126.9 .
INTERPETATION:
If the credit turnover ratio is high the company is in good position, as there are paying regularly to creditors
0
50
100
150
200
250
300
350
2016-17 2017-18 20189-19
NET CREDITOR PURCHASE AVERAGE CREDITORS

31
DEBT EQUITY RATIO:
This ratio measures the extent of equity covering the debt. The ratio is calculated to measure the relative
proportion of out sider fund and share holder funds invested in the company.
Debt equity ratio= Total debt/shareholders’ fund
YEAR DEBT SHARE HOLDERS
FUND
RATIO
2016-17 - 1510.56 -
2017-18 - 1408.77 -
2018-19 - 1342.11 -
ANALYSIS:
As the company has no debts we can’t calculate the debt equity ratio, as there are no shareholders in the
company. Its fully owned by government.
HOLDING PERIOD OF INVENTORY:
Through this ratio we can determine the number of stocks hold by the company in the godown before the sales.If
the company hold the stock for longer period the cost of the material will be increased.
Holding period of inventory = no. of days in a year/inventory turnover ratio
YEAR NO OF DAYS IN
YEAR
INVENTORY TURN
OVER RATIO
HOLDIN PERIOD
2016-17 365 2.23 164
2017-18 365 3.16 116
2018-19 365 2.61 140

32
GRAPH:
ANALYSIS:
The above table shows that the holding time of stock is fluctuating in the year 2016-17 the holding period was
164 days, and in the year 2017-18 the holding period diminished the holding period for it was 116 days and in
the year 2018-19 the holding period again expanded the holding period was 140 days
INTERPRETATION:
From the data we can understand that the holding period of inventory was fluctuating the higher holding period
the cost of the storage is high, if the holding period less the cost will be less. The company should concentrate
on effective management of inventory with minimum cost.
363
363.5
364
364.5
365
365.5
366
366.5
367
367.5
368
368.5
2016-17 2017-18 2018-19
NO. DAYS IN A YEAR INVENTORY TURN OVER

33
NET PROFIT RATIO
It establishes a relationship between net profit and sales and, it indicates
management efficiency in manufacturing, administrating and selling products and is expressed
as a percentage. The higher the net profit ratio, higher the greater will be the profitability and
higher return to the share holders as well as enable the firm to withstand adverse economic
conditions. On the other hand, a lower net profit ratio is an indication of poor profitability of
an enterprise.
Net Profit Ratio = Net profit after tax / Net sales
YEAR NET PROFIT AFTER
TAX
NET SALES RATIO
2016-17 54.71 405.20 0.13
2017-18 67.22 488.61 0.14
2018-19 109.023 568.25 0.19
GRAPH:
INTERPRETATION:
The Net profit ratio in the year 2016-17 was 0.13, it was increased gradually to 0.14 in the year
2017-18. The ratios in the years 2016-17,2017-18 and 2018-19 were 0.13,0.14 and 00.19 respectively.
From the above examination, the level of net benefit proportion is expanding quite a long time after year. This
shows that the organization is in a decent monetary position. Yet, in the year 2018-19 the net benefit proportion
is expanded by 0.19.
0
100
200
300
400
500
600
2016-17 2017-18 2018-19
NET PROFIT AFTER TAX NET SALES

34
Debtors average collection period:
It helps to analyse the time period of the company to repay the debt amount from the debtors of the
company. Debtors average collection period = No. of days in a year/Debtors turn over ratio
YEAR NO. OF DAYS IN A
YEAR
DEBTORS
TURNOVER RATIO
AVERAGE
COLLECTION
PERIOD
2016-17 365 16.70 22
2017-18 365 17 21
2018-19 365 10.88 34
GRAPH:
0
2
4
6
8
10
12
14
16
18
2016-17 2017-18 2018-19
DEBTORS TURN OVER RATIO
DEBTORS TURN OVER RATIO

35
ANALYSIS:
From the above examination, the level of net benefit proportion is expanding quite a long time after year. This
shows that the organization is in a decent monetary position. Yet, in the year 2018-19 the net benefit
proportion is expanded by 0.19.
INTERPETATION:
The above chart indicates the debtor’s average collection period was increasing it clearly show that
debtors are taking more no. of days to repay the loan. The company should focus on reducing the no. of
days of debtors.
DEBTORS TURNOVER RATIO:
A debtor is a person one who owns the money to purchase goods on the credit from the
business. Debtors turnover ratio is a ratio which reflects the no. of times the debt are
collected in year.
Debtors turnover ratio= Net annual credit sale/average trade
debtors Average trade debtors = (Opening debtors +closing
debtors)/2
YEAR NET ASSETS DEBTORS RATIO
2016-17 405.20 24.26 16.70
2017-18 405.21 28.74 17
2018-19 405.22 52.22 10.88

36
GRAPH:
ANALYSIS:
From the above chart we came to realize that the obligation divert over proportion has expanded from
the 2017-18 out of 2017 the obligation turnover proportion for 2017 was 16.70, and in the year 2018
it expanded to 17, and in the year 2019 again it came to down that is 10.88.
INTERPRETATION:
When the debtor’s turnover ratio goes up the company purchase of goods on the basis of credit from the
business increase.
OPERATING PROFIT RATIO:
Operating profit is a profit which is derived by only debiting the operating expenses and crediting the
operating incomes in the profit and loss account. The non-operating expenses and non-operating incomes
does not taken to consideration.
OPERATING PROFIT RATIO=OPERATING PROFIT / NET SALE
450
400
350
300
250
200 2016-17 2017-18 2018-19
NET SALES DEBTORS

37
YEAR OPERATING
PROFIT
NET SALES RATIO
2016-17 893.04 405.20 2.20
2017-18 103.63 488.61 0.21
2018-19 163.96 568.25 0.28
GRAPH:
ANALYSIS:
From the above table it come now the working benefit is diminishing step by step in the year 2017 the
working benefit was high 2.20, and in the year 2018 it has diminished to 0.21, and in the year 2019
marginally it has expanded to 0.28.
INTERPRETATION:
The above diagram addresses the working benefit proportions are fluctuating this addresses the
organization working benefit is agreeable.
1000
900
800
700
600
500
2016-17 2017-18 2018-19
OPERATING PROFIT NET SALES

38
CHAPTER – 5
FINDINGS
1. The current ratios are 3.51,3.11and 20.84for the study period. The standard ratio of 2:1 was
observed mostly during the study period. So, it shows the efficient management of current
assets and current liabilities.
2. When the quick ratios of the company is compared to standard ratio i.e. 1:1. It was fluctuating
year by year but it is above the standard ratio this shows good utility of the assets and liabilities.
3. The standard cash ratio was 0.5to 1, were the cash ratio is equal and above the cash ratio is
equal and above the standard ratio this is due to increase in marketable securities or trade
investment and increase in quick ratio.
4. The fixed assets turnover ratio was slightly increases this shows that greater efficiency in
regards to managing fixed assets in the year 2018-19 compared to previous years this is due to
increase in net sales of company.
5. The net working capital shows positive trend due to increase in current ratio i.e. efficient
management of current assets and liabilities.
6. The inventory turnover ratio for the study period 2016-19 was 2.02,3.16 and 2.60 respectively
but the standard industry ratio was 4 to 6.This shows that inventory turnover ratio is not good
due to increase in average stock.
7. A satisfactory asset turnover ratio a company was between 0.25 to 0.5 where the asset turn over
ratio of KS&DL was 0.21,0.28 and 0.35 for three years. This shows satisfactory utility of assets
but in the year 2016-17 the ratio was low because of decrease in sales.
8. A high creditor turnover ratio indicates prompt payment is being made to supplier for purchase
on credit. The ratio in KS&DL shows positive of the company has ability to give the stock on
credit.
9. The debt turnover ratio is nil. This is because of the company was owned by government and
also increase in creditor turnover ratio.
10. The gross profit ratio was increasing in the study period compared with previous year due to
the decrease in the cost of good sold.
11. Operating expenses were decreased in the period because they have some control over the
operating expenses

39
SUGGESTIONS
1. The company is suggested to improve the net profit by increasing the volume of sales s it is
found that sales percentage is fluctuating over the year.
2. Holding period of inventory was more as per data analysis. This is because of decrease in
sales and poor market value. This is suggested to company to improve sales by increase in
advertisements and tv adds.
3. The company was using same ingredients and chemicals as before this shows no
advancements in products. The company was to note down this and want improve the
products.
4. The company did not do any customer survey and market analysis but this was required to
every production company. This is suggested to company to do.
5. Manufacturing expenses are to be controlled to increase the gross profit.
6. The company was poor in advertising their products due to this consumer not able to find
new things in the products. To overcome this the company, need to advertise their products
by giving TV ads, flux or posters etc.

40
ANNEXURE

41

42

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