A PROJECT REPORT ON

FINANCIAL ANALYSIS OF CO-OPERATIVE SOCIETY

PROJECT SUBMITTED TO THE SIKSHA O ANUSANDHAN UNIVERSITY

IN PARTIAL

FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE

MASTER OF BUSINESS ADMINISTRATION

By

Swatilagna Mishra

(Registration Number: 1661301050)

Under the Guidance of

External Guide: Internal Guide:

Mr. Bairagi charan sahoo Dr. Saroj Kanta Biswal
Dr. Prafula Kumar Swain
Name of the Organization: Name of the Organization:
Jamdhar primary agriculture Institute of Business & Computer Studies,
Corporative Society, Bhubaneswar
Jamdhar,Kendrapara

Institute of Business & Computer Studies

(Faculty of Management Sciences)
Siksha ‘O’ Anusandhan University, Bhubaneswar
Ghatikia, Kalinga Nagar, SUM Hospital Road
Bhubaneswar-3
Certificate
This is to certify that Swatilagna Mishra bearing Regd No. 1661301050 has done this project
work on “A PROJECT REPORT ON FINANCIAL ANALYSIS OF COOPERATIVE
SOCIETY”and submitted the report in partial fulfillment for the degree of Master of Business
Administration to IBCS, SOA University, Bhubaneswar under my supervision and guidance.
This report is the record of original work done by her. To the best of my knowledge, no part of
the content of this report has been submitted for any degree by her or anybody else to any other
University or Institution.

Date: - / / 2017

Place: - Bhubaneswar (Dr. Saroj Kanta Biswal)

ACKNOWLEDGEMENT

I takethisopportunitytoexpressmydeepestgratitudetoallthosepeople,without those
spontaneous support, guidance, encouragement and understanding this project would never
hadreached completion.
Itwas my privilegetoworkwithJamdhar Co-operative society,Kendrapara. I am
indebtedto Dr.Saroj Kanta Biswal and Prafulla Kumar Swain who actedas philosopher and
guide through all the stages of completion ofthe project.Merewords of gratitude will never
sufficetotheir valuable guidance, patience and faithshowninmy work.
Iwould also like to avail this opportunity to express my sincere thanks and
profoundgratitudetomyexternal projectguide Mr.Bairagi charan sahoo (chairman), cooperative
society , whose valuableknowledge and guidance helped me to complete thisproject
successfully.
I acknowledge the timely help extended by all my colleagues and all the
unmentioned names from the concerned field.

Date: Swatilagna Mishra

Place: Bhubaneswar REG.NO:- 1661301050
 CHAPTER – 1
AN OVERVIEW OF COOPERATIVE SOCIETIES

1.1 INTRODUCTION TO THE COOPERATIVE

SOCIETY
1.1.1 HISTORICAL DEVELOPMENT IN INDIA
1.2 ADVANTAGE AND DISADVANTAGE OF
COOPERATIVE SOCIETIES.
1.3 POSITION OF COOPERATIVE SOCIETY
INTERNATIONAL:
1.4 COOPERATIVE SOCIETY AT NATIONAL
LEVEL
1.5 COOPERATIVE SOCIETY IN ODISHA

1.5.1 HISTORY
1.5.2 MISSION
1.5.3 VISION
1.5.4 OBJECTIVES
1.5.5 ACT AND RULES
1.5.6 THE REGULAYTORY FRAMEWORK AND
THE ROLL OF REGISTER OF CO-OPERATIVE
SOCIETY-THE ODISHA STATE
1.5.7 DIGRAMMATICAL PRESENTATION OF THE
REGISTRATION OF NEW COOPERATIVE
SOCIETY
1.6JAMDHAR PRIMARY COOPERATIVE
SOCIETY, KENDRAPARA
1.1 INTRODUCTION TO THE CO-OPERATIVE SOCIETY:

In India the co-operative movement was started at the beginning of the present century. It
was the resultof the economic distress caused to the peasants during this period. Although the
idea of forming cooperativesocieties was first suggested by Frederik Nicholson to solve the
problem of rural indebtedness,a real beginning of the co-operative movement was made when
the Co-operative Societies Act waspassed in 1904. This was done with a view to encouraging
thrift, self-help and co-operation amongstagriculturists, artisans and persons of limited means.
Societies formed under the Act were given legalstatus and were authorized to raise funds and
carry on business in a corporate capacity. They wereclassified as rural and urban; rural societies
were bound to accept the principle of unlimited liability. This Act however, was deficient in
many respects.

The Act of 1912 was therefore, passed to make good these deficiencies. It has
regularizedsome certain practicesof doubtful legal validity and made provision for further
expansion under proper safeguards. Thedistinction between rural and urban societies was
removed and a more scientific classification based onlimited or unlimited liability was adopted.
Co-operative societies other than credit were allowed to beformed. Registration of unions and
federal bodies like central banks was expressly legalized and a numberof minor improvements
were introduced. The simplicity and elasticity of the old Act were at the sametime retained and a
wide rule-making power was left to provinces to develop on their own lines.

A co-operative society is an autonomous association of persons united voluntarily to meet

theircommon economic, social and cultural needs and aspirations through a jointly-owned
anddemocratically-controlled enterprise. A co-operative society is another means for forming a
legal entity to conduct business besides forminga company. It pools together human resources in
the spirit of self and mutual help with the object of providing services and support to members.

1.1.1 HISTORICAL DEVLOPMENT OF INDIA:

The history of co-operative movement in India is broadly divided into two phases. That means
cooperative movement has passed into two phases. They are-
1) Co –operative movement in pre-independence era.
2) Co-operative movement in post–independence era.
These two phases are briefly discussed below:

1) Co-operative Movement in pre-independence era:

The pages of Indian history cite many evidences of co-operative activities from earliest
times.However, the first recorded activity began in 1904 when this movement was officially set
up by the British Government. Before that in the year 1892, Derrick Nicholson, tried to find out
ways and means to establish institutions so as to help the agricultural sector. He gave the
suggestions for setting of cooperative societies. Within that decade, India faced a terrible famine
in 1899.
The Government appointed the Second Famine Commission 1901 to suggest measures for the
victims. The commission recommended for a number of development activities and setting up of
new institution. The most important among them was the strong recommendation for
organization of cooperative societies. The Government had accepted many of the
recommendations and in 1904 “cooperative societies Act” were passed. The aim was to help the
rural farmers and artisans by providing short term and long term loans.

These credit societies were organized on the basis of two models, one for rural area and other for
urban area. For the former these were organized on Reinfusion Model while for the latter it was
Schulze Delitzsch Bank Model. Due to this Act a number of Co-operative Societies grew up in
rural area, but they could not function effectively. The major defects were.
i. There was no provision for setting up of Noncredit Co-operative Societies in rural
area.
ii. No special Central agency was created for financing and supervising the activities of
these societies.
iii. The division of the Credit Co-operative Societies into two types rural and urban stood
as a barrier; since no specific arrangements could be done for either due to the
overlapping nature of such classification.

The year 1928 saw a worldwide economic depression. The prices of agricultural commodities
Fell down to a great extent and unemployment along with other economic crisis grew up. The
creditors had no way to repay the loan. This brought many co-operative societies in to a standstill
position.

In year 1933, the Reserve Bank of India was set up. The bank took some initiative to recognize
the co-operative movement. It had a separate department for a co-operative credit. It helped to
keep the movement alive which was gradually decaying.

In 1937, the popular Congress Government came to power in several states. The popular leaders
took much more initiative in organising and extending this movement. But much progress could
not do due to outbreak of Second World War. During this time, the ministry resigned. It was left
in the hands of British Government again. But the war itself gave a boost to co-operative
societies. The war brought a sudden increase in the prices of agricultural products and other food
grains.

The rural farmer got extra economic gains. Non credit societies grew up. The working capital of
co-operative societies also increased. The number of different credit and non credit co-operatives
increased rapidly. The co-operative movement gathered momentum. The all India Co-operative
planning Committee in 1945 also worked al lot in this direction.
 2) Co-operative movement in Post-Independence Era:
After independence for the first 3 years i.e. upto no significant development could be made.
It was mainly due to the problem created by partition and absence of concrete program for
national reorganization.However, the leaders of free India could the importance of co-operative
movementfor asuccessful democracy importance was given to strengthen co-operative structure
of country and various provisions were made through different Five Year Plan.

The co-operative movement completed its 50 years dump the first plan. The Golden Jubilee was
celebrated throughout the country with much excitement. This made the people feel the
importance of such a movement. Attention was given to utilize the credit in productive activities.

- The First Plan also recommended for training of personnel's and setting up of Co-
operative Marketing Societies.
- The Second Plan laid down proposals for extending cooperative activity into various
fields. It gave special emphasis on the warehousing cooperatives at the State and Central
level.
- The Third Plan brought still new areas under Cooperative societies. The cooperative
society for sugarcane, cotton, spinning, milk supply was proposed. Some concrete steps
were taken to train the personnel's. The cooperative training College at Pune and many
regional centers were established to train the workers.
- The Fourth Plan emphasized for consolidation of cooperative system. The new
programme for high yielding crops was started. Different credit societies were organized
to serve these programs.
- The Fifth Plan made special provisions for improvement of Central Banks and no viable
primary agricultural societies, re organizing marketing as well as consumer societies. It
also recommended for establishment of Farmer’s Service Societies.
- The Sixth Plan laid down a point programme for co-operative societies. It aimed at
transforming the primary village societies to multipurpose societies.

i) To reconstruct the policies and of co-operative so that it can bring about economic
development of people.

ii) To extend co-operative activities to the fields of food processing, poultry farming, dairy
farming, fishery and many other related fields.

iii) To give necessary training and guidance for developing skilled the efficient personnel's.
The Seventh Plan has also given more importance on the growth and expansion of cooperative
societies to ensure public participation to achieve its main objective i.e. the movement towards
social justice has to be faster and there must be a sharper focus on employment and poverty
alleviation.
(A.2) ADVANTAGES & DIS-ADVANTAGES OF COOPERATIVE SOCIETY:

ADVANTAGES:

1. Easy to form:
It is very easy to form a co-operative society unlike the formation of some other types of
business organizations like companies and partnerships which can be very complicated to form.
With cooperative societies, the formation procedure is very simple. Any group of ten people or
more can come together and pool their resources together to form a co-operative. All they need
to do is register it. The legalities involved in registering and starting a co-operative society is like
a walk in the park.

2. No obstruction for membership:

Unless and otherwise specifically debarred, the membership of cooperative society is open to
everybody. Nobody is obstructed to join on the basis of religion, caste, creed, sex and color etc.
A person can become a member of a society at any time he likes and can leave the society when
he does not like to continue as; member.

3. Limited liability:
In most cases, the liabilities of the members of the society are limited to the extent of capital
contributed by them. Hence, they are relieved from the fear of attachment of their private
property, in case of the society suffers financial losses.

4. Service motive:
In Cooperative society members are provided with better good and services at reasonable prices.
The society also provides financial help to its members < the concessional rates. It assists in
setting up production units and marketing of produces c small business houses so also small
farmers for their agricultural products.

5. Democratic management:
The cooperative society is managed by the elected members from and among themselves. Every
member has equal rights through its single vote but can take active part in' the formulation of the
policies of the society. Thus all members are equally important for the society.
DISADVANTAGES:

Despite many advantages, the cooperative society suffers from certain limitations c drawbacks.
Some of these limitations, which a cooperative form of business has, are as follows:

1. Limited resources:
Cooperative society’s financial strength depends on the cap contributed by its members and loan
raising capacity from state cooperative banks. The membership fee is limited for which they are
unable to raise large amount of resources as their members belong to the lower and middle class.
Thus, cooperative are not suitable for the large scale business which require huge capital.

2. Inefficient management:
A cooperative society is managed by the members only. They do not possess any managerial and
special skills. This is considered as major drawback of this sector. Inefficiency of management
may not bring success to the societies.

3. Lack of secrecy:
The cooperative society does not maintain any secrecy in business because the affairs of the
society are openly discussed in the meetings. But secrecy is very important for the success of a
business organization. This paved the way for competitors to compete in better manner.

4. Cash trading:
The cooperative societies sell their products to outsiders only in cash. But, they are usually from
the poor sections. These persons require availing credit facilities which are not possible in the
case of cooperatives. Hence, marketing is a shortcoming for the cooperatives.

5. Excessive Government interference:

Government put their nominee in the Board of management of cooperative society. They
influence the decision of the Board which may or may not be favorable for the interest of the
society. Excessive state regulation, interference with the flexibility of its operation affects
adversely the efficiency of the management of the society.

6. Absence of motivation:
The members may not feel enthusiastic because the law governing the cooperatives put some
restriction on the rate of return. Absence of relationship between work and reward discourage the
members to put their maximum effort in the society.

7. Disputes and differences:

The management of the society constitutes the various types of personnel from different social,
economic and academic background. Many a times they strongly differs from each other on
many important issues. This becomes detrimental to the interest of the society. The different
opinions and disputes may paralyses the effectiveness of the management.
A.3POSITION OF COOPERATIVE SOCIETYINTERNATIONAL LEVEL:
The earliest record of a co-operative comes from Fenwick, Scotland where, in March 14,
1761, in a barely furnished cottage local weavers manhandled a sack of oatmeal into John
Walker's whitewashed front room and began selling the contents at a discount, forming the
Fenwick Weavers' Society. There are a plethora of records of co-operatives started out as small
grassroots organizations in Western Europe, North America and Japan in the middle of the
nineteenth century; however, it is the Rockdale Pioneers that are generally regarded as the
prototype of the modern co-operative society and the founders of the Co-operative Movement in
1844.In 1862 Friedrich Wilhelm Raiffeisen founded the first credit union and his work inspired
the growth of financial co-operatives across the world.

The co-operative movement today

The principles that underpinned their way of doing business are still accepted today as the
foundations upon which all co-operatives operate. These principles have been revised and
updated, but remain essentially the same as those practiced by the Pioneers in 1844.

Today the sector is estimated to have around 1 billion members and account for more than 100
million jobs around the world.

The International Co-operative Alliance represents close to one billion individual members.
These statistics are calculated from the subscription formula on ICA's 272 members from 94
countries (as of 20 October 2013). On this basis, the global representative body for co-operatives
is one of the largest nongovernmental organizations in the world today by the number of people
it represents, according to available figures.

The country with the largest number of individual members indirectly represented by the ICA is
theUnited States with 256 million members. There are nearly 30,000 co-operatives in the US.

The next countries are in Asia, with India following next behind the US with 93.7 million
individual members. And then Japan with 77 million individual members.

The fourth largest number of members is in Iran with 36.9 million individual members.
All in all, five of the top ten countries, by membership, that the ICA represents - are in Asia.
Italy is the first European country with 22.5 million individual co-operative members,
representedthrough their organizations by the ICA.
1.4 COOPERATIVE SOCIETY AT NATIONAL LEVEL:
India is a developing country facing number of problems, such as the population
explosion, low productivity, inequalities, low living standards, inflation and so on. India
consisting of 16% of the world’s population sustains only on 2.4% of land resource. Agriculture
sector is the only livelihood to the two-third of its population which gives employment to the
57% of work force and is a source of row material to large number of industries. After 60 years
of independence taking into concern these problems, the growth of the Indian economy is rather
slow. For the solution and for rapid economic development, it was necessary to accept a mixed
economy as an economic system for the balanced growth of public and private sector together
with a major role for co-operative societies to contribute their nit in the process of economic
development. In the context of globalization of rural development perspectives, the developing
countries like India, needs to devote greater attention towards rural development. The country’s
economic structure is undergoing fundamental changes as a result of the policy of liberalization
and de-regulation. The objectives of the new economic policy are to impart a new element of
dynamism to agriculture, trade and industry, to encourage foreign investment and technologies
for making Indian products competitive in the international market to improve the performance
of public undertaking and to influence co-operatives, since co-operatives work as an essential
part of the country’s economic structure.
Co-operative movement in India is one of the largest movements in the world.
Cooperative movement has made tremendous progress in every aspects of the Indian economy.
Co-operative activities occupy a major place in the sphere of the Indian economy.Initially, the
co-operative movement was started with a limited scope of activities of rural credit but now it
has entered in all fields of economic activity with social essence. Now the movement which has
covered 100 per cent villages and 75 per cent rural households and functioning over 545
thousand Co-operatives of various levels with membership coverage of 236 million and working
capital of 34,00,555 million 114 inclusive of credit and noncredit co-operative societies. It has
been playing a significant role in disbursing agricultural credit, distribution of agricultural inputs,
providing market support, processing, etc. Cooperative movement has been recognized as an
effective instrument for the economic development of the rural masses and for improvement in
the socio-economic condition of the poor. The co-operative movement in India had its origin
elsewhere and was introduced to this region by foreign rule. But even after independence, the
movement continued in the planned economy. In India co-operation had become a part of
national policy and hence the Indian co-operative movement is sometimes ironically described
not as a movement but only as a product of government policy. It spread and diversified with the
encouragement and support of the government. The co-operative movement in India was
basically organized against the moneylenders to rescue farmers from the clutches of the poverty
and indebtedness. The need for agricultural credit through co-operatives felt because of rural
indebtedness. The Indian co-operative movement was initiated by the government; it spread and
diversified with the encouragement and support of the government. In this connection,
observation made by NABARD in its Annual Report, 2001-2002 is; “Co-operatives have
contributed significantly to the growth of institutional infrastructure in the rural areas, private
capital formation in the agriculture sector and distribution of farm inputs like fertilizers, seeds
etc.”. The determination of Government interest in co-operatives and the importance attached to
them was reflected in the appointment of various committees regarding to review their
development and functioning.

Table: 1 following detail show cooperative society positions in India.

Number of Co-operative Societies (all level) 5,28,249

No. of Members 22.88 Crore

Share Capital Rs. Rs. 16,649.51 Crore

Working Capital Rs. Rs 2,85,643.35 Crore

Reserves Rs. Rs. 22,796.28 Crore

Deposits Rs. Rs. 1,44,179.50 Crore

Coverage of Rural Household 67%

Villages covered by the Co-operatives 100%

(Source: Govt.of India StatisticsDepartment)

1.5 COOPERATIVE SOCIETY IN ODISHA

Most of population of the country habits in the villages. Agriculture is prime occupation in
the villages. In the 19th century, money lenders of the villages were giving loan to the needy person at
a high rate of interest with the intention to exploit them. It was the only solution of the financial
problem of the farmers if they avail required money on the cheap interest conveniently, for that
object the lend empowerment Act 1883 and the loans for the farmers Act, 1884 were framed.

1.5.1 History
Utkal Gaurav Madhusudan Das organized first consumer co-operative store at Cuttack in
1898.Inspired by the initiative of Utkal Gourav, Raibahadur Bidyadhar Panda, the Head Master
of Saharanpur Middle Vernacular School, Banki, organized village credit co-operative society in
1903. Subsequently inspired by Sri Bala Mukunda Kanungo, the then Deputy Collector of
Banki,Rai Bahadur Bidyadhar Panda travelled from village to village and organized 50
Cooperative Credit Societies which later federated to establish Banki-Dompora Central
Cooperative Union in 1910. Later The Banki Dompara Central Cooperative Union became
renamed as Banki Central Cooperative Bank. In 1906 the first Primary Urban Cooperative Bank
was organized at Berhampur. Till the formation of a separate state of Orissa in 1936 the Coop.
Societies were regulated by Bihar-Orissa Cooperative Act. After Independence "The Orissa
Cooperative Societies Act" 1951 was enacted which was substituted by OCS Act 1962 with
major amendments in 1991 and 1996. The Orissa Self-Help Cooperative Act 2001 has been
enacted in 2002 to foster Cooperative Societies as self-help and democratically managed
business enterprises.

1.5.2 Mission
An Independent, self-reliant, Spontaneous, Strong and Vibrant Cooperative Movement
concerned for the community in general and the weak in particular.

Inspiring Mutual help and Cooperative values with honesty, dignity, proactively,
responsiveness, commitment and professionalization for regularization of sustained and planned
economic growth and socio-cultural up-liftment of the people of Orissa.

1.5.3 Vision
To usher in a vibrant cooperative movement in the state with all financially strong, self-reliant,
democratic, autonomous & member driven so as to fulfill the basic objective of promotion of
social & economic interest of the individual in accordance with cooperative principles.

1.5.4 Objectives
To implement the policies and programmers of the Central and State Government for the
benefit of farmers and other economically weaker sections through cooperatives and for
strengthening the cooperative movement.

To faster Socio –Economic development of the state through Cooperative initiatives.

1.5.5 Act, Rules

The Odisha Cooperative Societies Act – 1962

The Odisha cooperative Societies Rules 1965

The Odisha Self Help Cooperative Act – 2001

Every Cooperative society registered under the Odisha Cooperation Societies Act -1962 has a
bye law of its own consistent with the provision of the OCS Act – 1962. Similarly Cooperative
registered under the Odisha Self-Help Cooperative Act – 2001 has its own Articles of
Association consistent with the OSHC Act-2001
1.5.6 The regulatory framework and the roll of register of co-
operative society - Odisha state:
Under the Directorate of the Registrar of Cooperative Societies, there are 19 Cooperative
Divisions - one each at the headquarters of the 13erstwhile undivided Revenue Districts headed
by a Deputy Registrar of Cooperative Societies and 58 Cooperative Circles, each headed by an
Assistant Registrar of Cooperative Societies. This Directorate is entrusted with the
responsibility of implementation of policies and programs of the Central and State
Governments for the benefit of farmers and other economically weaker sections through
cooperatives and for strengthening the cooperative movement. To achieve these objectives, the
Directorate looks after administration, supervision, monitoring and regulation of the
cooperative societies functioning in the State in various sectors such as handloom, fisheries,
dairy etc. and the co-operative credit societies.

Registrar of Cooperative Societies (RCS) came into existence in the year 1937 for providing
leadership, wisdom and guidance to the Cooperatives as well as the functionaries at the
grassroots level and to the Cooperative Movement in right direction.This Directorate comes
under the administrative control of Department of Cooperation.

Definitions and Acronyms

DESCRIPTION
ACRONYM/TECHNICAL TERM
RCS(O) Registrar of Cooperative Societies , Odisha
ICT Information and Communication Technique
MIS Management Information System
PACS Primary Agricultural Cooperative Society
DCCBs District Central Cooperative Banks
 Statutory responsibilities of the RCS(O)

The Odisha Cooperative Societies Act 1962 entrusts the enormous responsibilities with the
RCS.Important responsibilities of the RCS (O) of the RCS is to register, administer, inspect and
supervise the cooperative societies. The important sector on which administrative the RCS
exercise his power are under the Odisha Cooperative Societies Act 1962 and newly organized
cooperative under the Odisha Self Help Act 2001 Agriculture Credit Cooperatives, Non
Agriculture Credit Cooperatives, Marketing Cooperatives, Consumer Cooperatives, Housing
Cooperatives and other Miscellaneous Cooperatives. The RCS (O) is the Chief Electoral
Officer for ensuring election to all kind of societies in the State .He commands the power of
superintendence over the cooperatives. The newly enacted legislation the Odisha Self Help
Cooperative Act 2001 also entrust the power of registration of Self Help Co-operate with the
RCS(O).
The foremost activities of RCS are:

 Registration- Registration of a new formed cooperative society under the Odisha Cooperative
Societies Act 1962 and newly organized cooperative under the Odisha Self Help Act 2001
 Administration - Bringing in rules, regulations issuing circulars and prescribing HR politics
for the cooperative societies.

 Inspection - Ensuring inspection of all the cooperative societies at least once in a year.

 Supervision - RCS ensures closes supervision and monitoring over functioning of supervise all
the cooperative societies registered under it.

 Target Settings - Apart from all these activities, the RCS set targets for OSCB, who sets target
for 17 CCBs under them and 17 CCBs set targets for 2714 PACS, for various plans and
programs for disbursement of crop loan, Agriculture Term Loan, Mobilization of deposit ,issue
of KCC, Formation and Credit linkage of SHGS , TLGS etc. Target for other sector like
marketing, consumer, Housing and Training and Education are also set by the RCS (O)
1.5.7 Diagrammatical Presentation of the Registration of New Cooperative
Societies
RCS:

1.6 JAMDHAR PRIMARY COOPERATIVE SOCIETY,

KENDRAPARA
The primary agriculture cooperative society has been established in 1957 with 51
members including one as government representative. Though it was established in the year 1957
the registration is done on 19/3/1959 bearing registration number 97(1) on 19/3/1959 by the
register0 co-operative society. Subsequently it was seen that the members of the society were
being exploited by the local money lenders and commercial banks in extending loans with high
rate of interest. Keeping in view for extending loan facilities to its members of a cheaper rate of
interest co-operative banking has been introduced on 21/8/1998.To attract more local people to
get benefit of co-operative movement, the society fixed the entry fee only Rs. 20/- and members
fee Rs. 100/-. At present the total members of the society is 4187 which is highest in Kendrapara
district in comparison to other co-operative societies in the district. The total number of board of
directors in 17 including two nominated by government of Odisha. Chief executive officer and
local U L W are nominated directors. The name of the other Board of Directors in as follows-
Mr.Gajendra Samal President
Mr.Bairagi Charan Sahoo Secretary
Smt.Gitanjali Behera Vice president
Smt. Urmila Sethi Director
Mr.Dhirendranath Swain Director
Mr. Hemanta Kumar Swain Director
Mr. Abhimanyu Mohanty Director
Mr.Biswanath Mohanty Director
Mr. Jitendra Kumar Mohanty Director
Mr.Abhay Kumar Malik Director
Mr. Arun Kumr Rout Director
Mr. Keshav Chandra Parida Director
Mr.Dipti Ranjan Nayak Director

Jamdhar Primary Credit Cooperative Society consists of four gram panchayats and
seventeen villages. At present Sri Gajendra Samal has been elected as the president of the society
and Smt Gitanjali behera as vice president. Sri Bairagi charan sahoo is secretary of society since
30/09/2003. The total deposit of the mini bank of society is Rs 1285.44lac.The society extending
loan to its members for agriculture (Kharif and Rabi), purchase of cows and goats small
business, agricultural instruments like tractor power tiler etc. Apart from these 124 numbers of
S.H.Gs which have been constituted to the help of the N.A.B.A.R.D open their account in the
mini bank of the society. In future the society is trying to intend its credit facilities to more
number of S.H.Gs. So that the members of the S.H.G groups can improve their income to
maintain their livelihood. The society has constructed a go down having stock capacity of
300metric turns with help of national agriculture development scheme of government of India.
The society trying to get the dealership for supply of fertilizer to the farmers of the entire
Kendrapara district this society has issue kissan credit card to 3072 members so that they can get
their loan from mini bank of society without any difficulty.

CHAPTER -2

LITERATURE REVIEW
Prof. Vijay S.Patel *; Prof..Chandresh B. Mehta ( 2012) in the article “A Financial
Ratio Analysisof KrishakBharti Cooperative Ltd ”The Financial Statements are generally
prepared for the measurement of financial position of a particular company for a particular
period of time. The financial statements i.e. (i) Profit and loss account and (ii) Balance sheet
provide useful information regarding financial situation of company. The information has its
own value, but if someone wants to have better judgment of the concern, he has to analyse them.
This paper provides the guidelines about analysis of profitability ratio of KrishakBharati Co-
operative Ltd. located at Kawas-Hazira in Surat District.

TejaniRachana (2011) in the research project “ Financial Inclusion and

Performance ofRural Co-operative Banks in Gujarat ”In an Index of Financial Inclusion,
India has been ranked 50out of 100 countries. Only 34% of the India’s population has access to
basic banking services. TheObjective of the paper is to study financial inclusion in rural areas,
reasons for low inclusion, satisfaction level of the rural people toward banking services and to
assess the performance of the banks which are working in the rural areas which mainly include
the co operative banks and regional rural banks. Structured questionnaire designed on the basis
of literature review was used to collect data from 200people residing in Ambasan, Jotana and
Khadalpur villages of Gujarat. The paper first describes in detail the financial inclusion status in
India and Gujarat followed with a review of scenario at the global level.

Dr. Baldev M .Patel ( 2013)in the article “ Social Services Provided by Selected
Credit Co-Operative Societies of North Gujarat ”Various social services are rendered for the
welfare of theMembers by credit co-operative societies. These services include death benefit,
support on acute Illness, facilities for the panel of the doctors, ambulance van, medical camp etc.
The activities related to education include education loans, educational training, different
competitions, awards and prizes. Thus they help in social development. Besides imparting
educational trainings, awards etc, vocational training is provided to equip the beneficiaries for
employment. Computer training, training classes for tailoring is also run. It also fulfills the social
responsibilities related to marriage incentives; social upliftment, accident, natural calamity etc
are considered vital. There are so many provisions for the members such as mediclaim, accident
insurance, group insurance and member insurance policies. This research paper brings into light
the various services rendered by the credit co-op societies.

Dr. Ruchira Prasad And Dr. Ruchira Prasad ( 2013 ) in the article “A Case Study
of AmulCooperative in Indian in Relation to Organizational design And Operational
Efficiency ”Organizational Structure can improve the working condition of an organization and
a poor structure can ruin all the possibilities of openness, dynamism and decision-making.
Organizational effectiveness on the other hand, is the extent to which an organization, given
certain resources and means, achieves its objectives without placing undue strain on its members.
Another important role is played by the technology. More an organization is able to adapt itself
to the changing technology the better will be its efficiencies. In the present research paper a
relationship between the designs of an organization with its operational efficiency indicators has
been examined in the context of Amul. The factors were studied in context to a cooperative form
of organization and while comparing with the corporate form, it was found that the design of the
basic structure is somewhat different as it believes in the federal form of structure each unit is
independent of each other. It is a popular belief that co-operatives are a failure, but Amul with
Co-operative Structure is a grand success. Amul has an appropriate blend of policy makers,
technology and a support system to the milk producers without disturbing their agro-economic
system and plugging back the profits, by prudent use of men, materials and machines.

DeepaliKapoorSuri and ShilpiSinghal( 2013) in the article “ Comparative Analysis

ofFinancial Performance of Indian Farmers Fertilizers Cooperative Ltd (IFFCO)”In
todayGlobalized economy competition is found all over the world. To remain competitive and
grow profitably, it is essential that every business entity achieve its financial goals. Financial
analysis is mainly done to compare the growth, profitability and financial soundness of the
respective company by diagnosing the information contained in the financial statement. The
study is an attempt being made to identify the financial performance and how the performance is
going on for the last five years, of Indian Farmers Fertilizer Co-operative Limited, popularly
known as IFFCO, on the basis of establishing relationship between the items of balance sheet
and profit &loss account. For establishing the relationship various types of ratios such as
solvency, liquidity, activity and profitability are used. The period of study is taken from the year
2007-08 to 2011-12. It can be concluded from the study of 5 financial periods of IFFCO that the
maximum Financial Indicators of IFFCO are not at a very good position. From the analysis of
main Financial Indicators it is clear that Operating Profit to Turnover Ratio, Fixed Assets
Turnover Ratio, Debt Equity Ratio, Current Ratio, Liquidity Ratio, etc are at a desirable position.
However, company’s Return on Capital Employed, Profit before tax to Turnover, etc were
undesirable as compared to Previous Years.

Anil Kumar Soni and Dr. Harjinder Pal Singh Saluja( 2012) in the article “ Role of
Cooperative Bank in Agricultural Credit: As Study Based on Chhattisgarh ” The
cooperativeBanking sector is one of the main partners of Indian banking structure; the
cooperative banks have more reach to the rural India, through their huge network of credit
societies in the institutional credit structure. The cooperative sector has played a key role in the
economy of the country and always recognized as an integral part of our national economy.
Cooperatives have ideological base, economic objects with social outlook and approach. The
cooperative covers almost all cent percent villages in India. The cooperative form of organization
is the Ideal Organization for economically weaker sections in the country. According to recent
study by World Bank and National Council for Applied Economic Research, the Primary
Agriculture Credit Societies (PACS) amount for about 30 percent of micro credit in India. This
paper attempts to analyze the role of co-operative bank in agricultural credit.

Dr. M. S. Ramananda And Dr. M. Jayaprakash (2012) in the article “ Impact on

VydhanaCommittee Recommendations Of WangapllyPrimary Agricultural Cooperative
CreditSociety ” Cooperatives as an institution in India are more than a century old. With more
than lakh grassroots level cooperatives, their presence is formidable. Notwithstanding,
impressive gains made by cooperatives in terms of their rural outreach and coverage of small and
marginal farmers, their financial health has been a matter of concern. The study is an attempt
made into the factors which impact financial health of cooperatives reflected through their
recovery performance. The major findings of this study government should allow the
cooperatives to evolve in a natural manner rather than through initial official encouragement and
subsequent intervention. Government’s contribution to share capital of cooperatives should be
stopped. There is also a need to revisit the issue of appropriate member size for a base level
cooperative so that cooperative principles are internalized amongst members.

ZafarUllah Malik and Athar Iqbal (May-2013) “ Working Capital Managementon

Firms Profitability in Sugar Industry of Pakistan ” Management of working capital performs
a very vital part in the performance of firms in sugar industry. This thesis tests the impact of
working capital management on firm’s profitability in sugar industry of Pakistan for years 1999
to 2009. To analyze this, data of 19 sugar mills which are listed at Karachi Stock Exchange is
used. The result shows that the Sales Growth, Current Ratio, No of Days Inventory and No of
Days Accounts Payables are significantly affecting the profitability of the firms while Sales,
Gearing Ratio and No of Days Account Receivables are insignificant in the research. Pearson
Correlation and Multiple Linear Regression are used in this research to study the relationship
between variables. Sugar sector which is the second biggest sector in manufacturing sector of
Pakistan contributes to the economy significantly. To carry out the research data from 19 sugar
mills which are currently listed at Karachi Stock Exchange is analyzed. The results shows that
profitability of sugar mills are significantly affected by the efficient management of working
capital and working capital management play a vital role in creating a value for the shareholders.

Boris Nenide& Robert W. Pricer and S. Michael Camp (2014), in the Article “The
use ofFinancial Ratios for Research: Problems Associated with and Recommendations for
Using Large Databases”. A review of published research in the field of accounting and finance
reveals that the use of ratio calculations with multivariate analysis for predicting the performance
of business firms is common. However, much of this research uses large database information
without determining if sample assumptions needed can be met for reliable conclusions to be
drawn by the researchers. This paper presents recommended adjustment techniques for
researchers using large databases for ratio calculation to allow for confidence that the results of
analysis will be meaningful and that inferences may be drawn from the data. Using a sample
from the Kauffman Center for Entrepreneurial Leadership Financial Statement Database,
Balance Sheet and Income Statement data of 250 firms is used to illustrate and explain
techniques for data error identification, handling the problem of denominators being negative or
approaching zero when calculating ratios, and effective techniques for transforming the data to
achieve approximation of normal distributions. The application of these recommendations will
allow researchers to use financial statement data samples that will meet required characteristics
for the use of valid multivariate statistical analysis.
CHAPTER- 3

RESEARCH METHODOLOGY

(3.1) NAME OF STUDY

(3.2) RESEARCH AREA OF ORGANIZATION

(3.3) SIGNIFICANCE OF THE STUDY

(3.4) SCOPE OF THE STUDY

(3.5) OBJECTIVES OF PROPOSED STUDY

(3.6)TOOLS OF DATA ANALYSIS & SOURCE

Of INFORMATION

(3.7) LIMITATION OF THE STUDY

(3.1) Title of the Study:
Financial Performance of Co- operative Societies – A Comparative Study (With Special Reference to
Kendrapara District of Odisha)

(3.2) Area:
a) Organization :
Jamdhar Primary Agriculture Credit Cooperative Society LTD, Kendrapara.
b) Details of the Selected Areas:
Brief of the area selected for the Study considered as a backward area falls
underKendrapara district of Odisha State of India.

(3.3)Significance of the Study:

Today’s world is very competitive. In each field thousands of competitors have entered the
market. In the changing market scenario equipped with science and technology, they are
struggling to survive in the market, whether it is a field of knowledge, business or any other
Profession. Even the Indian economy is not free from the air of liberalization, privatization and
globalization. The public sector has to become more active and should also take necessary
measures to fit them in the changing economic scenario. With this objective in mind the research
on “Jamdhar Primary Agriculture Cooperative Society” is undertaken. Where the financial
performance will be conducted keeping the current situation on the top. A study on the problem
faced and its relevant solution, so that the people of these areas get good service from this co-
operative society.

(3.4) Scope of the Study:

The present study will focus only on financial analysis of the co-operative society and problem faced
by the cooperative society in recovery of loans.

(3.5) Objectives of the proposed study

 To understand the working of Co-operative Society in Jamdhar
 To study the financial performance of selected Co-operative Society.
 To make comparative study of the financial transaction of different years.

(3.6) Source of Information:

 Personal talk with the secretary of the Jamdhar co-operative society.
 Personal talk with the accountant of the Jamdhar co-operative society.
 Members of the co-operative society
  Other documents related to the study as follows:
1. Newspaper
2. Annual report of the society
3. Books/literature/research papers/articles etc.
4. Internet

 Tool of data analysis and methodology:

Ratio Analysis
A. Balance sheet ratios:
- Liquidity ratio
- Current ratio
- Proprietary ratio

B. Profit & loss a/c ratio:

- Gross profit ratio
- Net profit ratio
- Operating ratio

C. Inter-statement ratios/composite/mixed ratios

- Return on capital employed
- Return of shareholders’ funds
- Debtors turnover ratio

 Classification by users
Ratios for management
- Operating ratio
- Stock turnover
- Return on capital

Ratios for creditors

- Fixed asset ratio
- Creditor’s turnover

 Classification by purpose/function
- Liquidity
- Solvency/stability
- Activity/performance
- Profitability

(3.7) Limitation of the study:

1. The study has been conducted over a limited period.
2. The study is mainly based on secondary data.
3. The study is limited to a Selected Cooperative society only.
CHAPTER – 4

DATA ANALYSIS AND

INTERPRETATION

OF COOPERATIVE

SOCITIES
RATIO ANALYSIS

4.1 Introduction:

Ratios are used to evaluate a financial organization- Its Financial Strength, Management
effectiveness,Efficiency and profitability. Ratios look at the fundamental financial aspects of the
financial organization. It gives you an idea about –
 The current financial position of the organization.
 Overall, it helps to decide if a particular organization is worth getting involved with.
Since, ratios look at organizations from the fundamental level; ratio analysis is also called
fundamental analysis. Many investors use fundamental analysis alone or in combination with
other tools to evaluate stocks for investment purposes. The ultimate goal is to determine the
current worth and, more importantly, how the market values the stock.

4.2 Structural analysis: orsolvency analysis:

The solvency ratio is only one of the metrics used to determine whether an organization
can stay solvent. Other solvency ratios include debt to equity, total debt to total assets, and
interest coverage ratios.However, the solvency ratio is a comprehensive measure of solvency, as
it measures cash flow – rather than net income – by including depreciation to assess an
organization’s capacity to stay afloat. It measures this cash flow capacity in relation to all
liabilities, rather than only debt. Apart from debt and borrowings, other liabilities include short-
term ones such as accounts payable and long-term ones such as capital lease and pension plan
obligations.Measuring cash flow rather than net income is a better determinant of solvency,
especially for companies that incur large amounts of depreciation for their assets but have low
levels of actual profitability. Similarly, assessing a company’s ability to meet all its obligations –
rather than debt alone – provides a more accurate picture of solvency.

An organization may have a low debt amount, but if its cash management practices are
poor and accounts payable is surging as a result, its solvency position may not be as solid as
would be indicated by measures that include only debt. An organization’s solvency ratio should
also be compared with its competitors in the same industry rather than viewed in isolation. For
example, organizations in debt-heavy industries like utilities and pipelines may have lower
solvency ratios than those in sectors such as technology. To make an apples-to-apples
comparison, the solvency ratio should be compared for all utility companies, for example, to get
a true picture of relative solvency.

4.2.1. PROPRIETARY RATIO:

The proprietary ratio is the inverse of debt ratio. It is a part to whole comparison. The
proprietary ratio measures the amount of funds that investors have contributed towards the
capital of a firm in relation to the total capital that is required by the firm to conduct operations.

Formula: Proprietary Ratio = NetWorth/Total Debt

The ideal value of the proprietary ratio of the organization depends on the risk appetite of
the investors. If the investors agree to take a large amount of risk, then a lower proprietary ratio
is preferred. This is because, more debt means more leverage means profits and losses both will
be magnified. The result will be highly uncertain payoffs for the investors.
On the other hand, if investors are from the old school of thought, they would prefer to
keep the proprietary ratio high. This ensures less leverage and more stable returns to the
shareholders.

Table: 1following table: Proprietary Ratio

Year Net worth (In Lakh) Total debt (In Lakh) Ratio (In Lakh)
(A) (B) C = A/B
2010-11 9.92 2.45 4.05
2011-12 3.07 3.12 0.98
2012-13 18.36 3.72 4.93
2013-14 22.61 3.97 5.69
2014-15 24.65 4.60 5.35
2015-16 22.6 8.37 2.70

YEAR-WISE NETWORTH & TOTAL DEBT

30 22.61 24.65 22.6
18.36
20
9.92 8.37
10 2.45 3.07 3.12 3.72 3.97 4.6
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Net worth (In Lakh) Total Debt (In Lakh)

 PROPRIETARY RATIO
5.68 5.34
4.93
4.05
2.69
0.98

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION
Above Table No. 1and graphs, indicates that Proprietary ratio of Jamdhar -Primary
Agriculture Cooperative society is 4.05 in the year 2010-11 in subsequent years it is 0.98, 4.93,
5.68, 5.34 and 2.69 in 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16. The analysis clearly
shows that the ratio is high in the period of 2011-12 and after the lowest ratio is in the period of
2011-12.
From the above analysis, it can be concluded that Jamdhar Primary Agriculture
Cooperative Society is in Good Position;but during the study period, Ratio fluctuation is there
year on year, and for the last year i.e. 2015-16 is very low than the previous three years.We can
conclude that, there is stability of proprietary ratio. So no need to take loan or trade on equity.

4.2.2. FIXED CAPITAL-ASSETS RATIO:

As its name suggests, the fixed-asset-to-equity-capital ratio is made up of two parts: fixed
assets and equity capital. A business's fixed assets are any type of physical assets that have an
expected lifetime of at least one year. Buildings, vehicles, furniture and heavy equipment are all
examples of fixed assets. Equity capital is the money that investors have put into a company. As
a reward for these funds, investors receive part ownership of a business. These investors then
hope that the business thrives and that the value of their shares in an organization increases.
Formula: Fixed Capital Assets Ratio = Fixed Capital / Fixed Assets

Table: 2 Following table: Fixed Capital to Assets Ratio

Year Fixed capital (In Lakh) Fixed asset (In Lakh) Ratio
(A) (B) C = A/B
2010-11 9.99 1.01 9.89
2011-12 3.08 1.11 2.77
2012-13 18.36 1.45 12.66
2013-14 22.61 14.63 1.55
2014-15 24.65 15.57 1.58
2015-16 22.60 15.30 1.48
 YEAR ON YEAR FIXED CAPITAL & FIXED ASSET
40 24.65
18.36 22.61 22.6
14.63 15.57 15.3
20 9.99
1.01 3.08 1.11 1.45
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Fixed Capital (In Lakh) Fixed Asset (in Lakh)

FIXED CAPITAL - ASSET RATIO

20 12.66
9.89
10 2.77 1.55 1.58 1.48
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION
Above Table No.2and graphs indicates that Fixed capital-Assets ratio of Jamdhar Primary
Agriculture Cooperative society is 9.89 in the year 2010-11 in subsequent years it is 2.77, 12.66,
1.55 & 1.58, 1.48 in the years of 2011-12,2012-13, 2013-14, 2014-15 and 2015-16 respectively.
The analysis clearly shows that the ratio is high in 2012-13 and after lowest ratio in 2015-16.

4.3 LIQUIDITY ANALYSIS:

Liquidity ratios are the ratios that measure the ability of a company to meet its short term
debt obligations. These ratios measure the ability of a company to pay off its short-term
liabilities when they fall due.

The liquidity ratios are a result of dividing cash and other liquid assets by the short term
borrowingsand current liabilities. They show the number of times the short term debt obligations
are covered by the cash and liquid assets. If the value is greater than 1, it means the short term
obligations are fully covered.

Generally, the higher the liquidity ratios are, the higher the margin of safety that the
company possessto meet its current liabilities. Liquidity ratios greater than 1 indicate that the
company is in good financial health and it is less likely fall into financial difficulties. Most
common examples of liquidity ratios include current ratio, acid test ratio (also known as quick
ratio), cash ratio and working capital ratio. Different assets are considered to be relevant by
different analysts. Some analysts consider only the cash and cash equivalents as relevant assets
because they are most likely to be used to meet short term liabilities in an emergency. Some
analysts consider the debtors and trade receivables as relevant assets in addition to cash and cash
equivalents. The value of inventory is also considered relevant asset for calculations of liquidity
ratios by some analysts.
 The concept of cash cycle is also important for better understanding of liquidity ratios.
The cash continuously cycles through the operations of a company. A company’s cash is usually
tied up in the finished goods, the raw materials, and trade debtors. It is not until the inventory is
sold, sales invoices raised, and the debtors’ make payments that the company receives cash. The
cash tied up in the cash cycle is known as working capital, and liquidity ratios try to measure the
balance between current assets and current liabilities. A company must possess the ability to
release cash from cash cycle to meet its financial obligations when the creditors seek payment. In
other words, a company should possess the ability to translate its short term assets into cash. The
liquidity ratios attempt to measure this ability of a company.

4.3.1. CURRENT RATIO:

The current ratio is balance-sheet financial performance measure of company liquidity.

The current ratio indicates a company's ability to meet short-term debt obligations. The current
ratio measures whether or not a firm has enough resources to pay its debts over the next 12
months. Potential creditors use this ratio in determining whether or not to make short-term loans.
The current ratio can also give a sense of the efficiency of a company's operating cycle or its
ability to turn its product into cash. The current ratio is also known as the working capital ratio.
Formula =Current Assets/Current Liabilities

Table: 3 following table: Current Ratio

YEAR CURRENT ASSET (In Lakh) CURRENT LIABILITIES (In Lakh) RATIO
(A) (B) C = A-B
2010-11 13.5 2.45 5.51
2011-12 15.29 3.08 4.97
2012-13 20.52 3.72 5.51
2013-14 11.37 3.98 2.86
2014-15 13.73 4.17 3.29
2015-16 9.54 3.33 2.87
 YEARWISE CURRENT ASSET & CURRENT LIABILITIES
30
20.52
20 13.5 15.29 13.73
11.37 9.54
10 3.72 3.98 4.17 3.33
2.45 3.08
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

CURRENT ASSET (In Lakh) CURRENT LIABILITIES (In Lakh)

CURRENT RATIO
5.51 5.51
6 4.96

4 2.86 3.29 2.86

0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:
Above Table No .3& graphs indicate that the Current Ratio is 5.51 in the year 2010-11 in
subsequent years it is 4.96 in 2011-12, 5.51 in 2012-13, 2.86 in 2013-14,3.29 in 2014-15and 2.86
in 2015-16. The analysis clearly shows that the highest ratio is for the period of 2012-13 and
2010-11 and after that it has been decreased, which indicates company’s liquidity is going down,
but as per the common standard it is in good position.
4.3.2. QUICK RATIO:
The quick ratio is a measure of a organization's ability to meet its short-term obligations
using its most liquid assets (near cash or quick assets). Quick assets include those current assets
that presumably can be quickly converted to cash at close to their book values. Quick ratio is
viewed as a sign of anorganization's financial strength or weakness; it gives information about an
organization’s short term liquidity. The ratio tells creditors how much of the company's short
term debt can be met by selling all the company's liquid assets at very short notice.
Formula for Quick Ratio = (Current Assets - Inventories) / Current Liabilities
Calculating liquid assets inventories are deducted as less liquid from all current assets
(inventories are often difficult to convert to cash). All of those variables are shown on the
balance sheet (statement of financial position).
Quick Ratio = (Cash & Cash equivalents + Marketable Securities + Accounts Receivable) /
Current Liabilities
The formula's numerator consists of the most liquid assets (cash and cash equivalents)
and high liquid assets (liquid securities and current receivables).

Table 4:Following table: Quick Ratio

YEAR QUICK ASSET (In Lakh) QUICK LIABILITY (In Lakh) RATIO
(A) (B) C = A/B
2010-11 6.61 2.45 2.7
2011-12 13.55 3.08 4.4
2012-13 20.5 3.72 5.51
2013-14 11.32 3.98 2.84
2014-15 12.34 4.17 2.96
2015-16 6.41 3.33 1.92

YEARWISE QUICK ASSET & QUICK LIABILITIES

50
13.55 20.5
6.61 2.45 11.32 3.98 12.34 6.41
3.08 3.72 4.17 3.33
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

QUICK ASSET (In Lakh) QUICK LIABILITY (In Lakh)

YEAR WISE QUICK RATIO

10 4.4 5.51
2.7 2.84 2.96 1.92
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION
Table No.4& graphs showing that the Quick Ratio of Cooperative Society is 2.7 in 2010-11, in
subsequent years it is 4.4, 5.51, 2.84, 2.96, 1.92 in 2011-12, 2012-13, 2013-14,2014-15& 2015-
16. The analysis clearly shows that the ratio is high in 2012-13 and after lowest in 2015-16.

4.4 PROFIABILITY ANALYSIS:

Profitability ratios measure an organization’s ability to generate earnings relative to

sales, assets and equity. These ratios assess the ability of a company to generate earnings, profits
and cash flows relative to relative to some metric, often the amount of money invested. They
highlight how effectively the profitability of an organization is being managed.

Common examples of profitability ratios include return on sales, return on investment,

return on equity, return on capital employed (ROCE), cash return on capital invested(CROCI),
gross profit margin and net profit margin. All of these ratios indicate how well a company is
performing at generating profits or revenues relative to a certain metric.

Different profitability ratios provide different useful insights into the financial health and
performance of an organization. For example, gross profit and net profit ratios tell how well the
organization is managing its expenses. Return on capital employed (ROCE) tells how well the
organization is using capital employed to generate returns. Return on investment tells whether
the organization` is generating enough profits for its shareholders.

For most of these ratios, a higher value is desirable. A higher value means that the
organization is doing well and it is good at generating profits, revenues and cash flows.
Profitability ratios are of little value in isolation. They give meaningful information only when
they are analyzed in comparison to competitors or compared to the ratios in previous periods.
Therefore, trend analysis and industry analysis is required to draw meaningful conclusions about
the profitability of an organization.

Some background knowledge of the nature of business of a organization is necessary

when analyzing profitability ratios. For example sales of some businesses are seasonal and they
experience seasonality in their operations. The retail industry is example of such businesses. The
revenues of retail industry are usually very high in the fourth quarter due to Christmas.
Therefore, it will not be useful to compare the profitability ratios of this quarter with the
profitability ratios of earlier quarters. For meaningful conclusions, the profitability ratios of this
quarter should be compared to the profitability ratios of similar quarters in the previous years.

4.4.1 GROSS PROFIT RATIO:

Gross profit margin (gross margin) is the ratio of gross profit (gross sales less cost of
sales) to sales revenue. It is the percentage by which gross profits exceed production costs. Gross
margins reveal how much an organization earns taking into consideration the costs that it incurs
for producing its products or services.. It is usually expressed as a percentage, and indicates the
profitability of a business before overhead costs; it is a measure of how well a company controls
its costs.
Gross margin measures a company's manufacturing and distribution efficiency during the
production process. The higher the percentage, the more the organization retains on each Rs of
sales to service its other costs and obligations, the better the organization is thought to control
costs. Investors use the gross profit margin to compare organization in the same industry and also
in different industries to determine what are the most profitable. An organization that boasts a
higher gross margin than its competitors and industry is more efficient.
Formula:Gross profit margin = Gross profit / Sales

Table: 5 following table: Gross Profit Ratio

YEAR GROSS PROFIT (In Lakh) SALES (In Lakh) RATIO
(A) (B) C = A/B
2010-11 3.95 16.39 0.24
2011-12 3.09 18.56 0.17
2012-13 4.67 20.04 0.23
2013-14 5.3 15.85 0.33
2014-15 1.04 12.17 0.09
2015-16 0.58 30.28 0.02

YEARWISE SALES & GROSS PROFIT

40 30.28
16.39 18.56 20.04
15.85 12.17
20
3.95 3.09 4.67 5.3
1.04 0.58
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

SALES (In Lakh) GROSS PROFIT (In Lakh)

GROSS PROFIT MARGIN RATIO

0.5 0.33
0.24 0.23
0.17
0.09
0.02
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:
Table no.5& Graphs shows, Gross Profit ratio of Cooperative society is 24.12 in the year of
2010-11, in subsequent years it is 16.39,18.56, 20.04, 15.85, 12.17, 30.28 in 2011-12, 2012-
13,2013-14, 2014-15,2015-16 respectively. The analysis clearly showsthat the ratio is 2010-11
year. This analysis shows that the Gross Profit Ratio is on down-streamswhich impacting the
liquidity position of the Firm.
4.4.2 NET PROFIT RATIO:

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been deducted
from sales, and income taxes recognized. As such, it is one of the best measures of the overall
results of a firm, especially when combined with an evaluation of how well it is using its
working capital. The measure is commonly reported on a trend line, to judge performance over
time. It is also used to compare the results of a business with its competitors.Net profit is not an
indicator of cash flows, since net profit incorporates a number of non-cash expenses, such as
accrued expenses, amortization, and depreciation.
Formula: Net Profit Ratio = (Net profit / Net sales) * 100
The measure could be modified for use by a nonprofit entity, if the change in net assets were to
be used in the formula instead of net profit.

Table: 6 following table: Net Profit Ratio

YEAR NET PROFIT (In Lakh) SALES (In Lakh) RATIO
 (A) (B) C = (A/B)*100
2010-11 16.39 2.56 15.6
2011-12 18.56 0.73 3.93
2012-13 20.04 2.12 10.58
2013-14 15.86 -2.77 -17.47
2014-15 12.17 -0.88 -7.2
2015-16 30.48 -2.93 -9.61

YEARWISE SALES & NET PROFIT

40 30.48
16.39 18.56 20.04 15.86
20 12.17
2.56 0.73 2.12 -0.88
-2.77 -2.93
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
-20

SALES (In Lakh) NET PROFIT (In Lakh)

YEARWISE NET-PROFIT RATIO

20 15.6
10.58
10 3.93
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
-10
-20 -7.2 -9.61
-17.47
INTERPRETATION
Table no.6& Graph indicatesthat the Net Profit ratio of Cooperative society is 15.6 in the year of
2010-11 but in subsequent years it is 3.93, 10.58, -17.47, -7.2, -9.61 in 2011-12, 2012-13,2013-
14,2014-15,2015-16 respectively. The analysis clearly shows that organization’s net profit is
going down year on year.

4.4.3 OPERATING RATIO:

The operating ratio is the ratio of production and administrative expenses to net sales.
The measure excludes financing costs, non-operating expenses, and taxes. Essentially, it is the
cost per sales dollar of operating a business. A lower operating ratio is a good indicator of
operational efficiency, especially when the ratio is low in comparison to the same ratio for
competitors and benchmark firms.The operating ratio is only useful for seeing if the core
business is able to generate a profit. Sinceseveral potentially significant expenses are not
included, it is not a good indicator of the overallperformance of a business, and so can be
misleading when used without any other performance metrics.
To calculate the operating ratio, add together all production costs (i.e., the cost of goods
sold) and administrative expenses (which includes general, administrative, and selling expenses)
and divide by net sales (which is gross sales, less sales discounts, returns, and allowances).

Table: 7 Following table: Operating Ratio

 YEAR C.O.G.S OPERATING EXPENSES NET SALES OPERATING
(In Lakh) A (In Lakh) B (In Lakh) C RATIO
D=(A+B) / C
2010-11 12.43 2.38 16.39 0.9
2011-12 15.47 2.6 18.56 0.97
2012-13 15.38 3.7 20.04 0.95
2013-14 15.33 4.8 15.86 1.27
2014-15 11.12 3.5 12.17 1.21
2015-16 29.9 3.8 30.48 1.11

YEARWISE PRODUCTION COST & NET SALES

50 33.7 30.48
14.8116.39 18.07 18.56 19.08 20.04 20.13 15.86 14.62 12.17

0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

TOTAL PRODUCTION COST (In Lakh) NET SALES (In Lakh)

YEARWISE OPERATING RATIO

2
1.27 1.21 1.11
0.9 0.97 0.95
1

0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION
Table no.7& graphsshows, Operating Ratio of Cooperative Society is 0.9 in the year of 2010-11
but in subsequent years it is 0.97, 0.95, 1.27, 1.21 & 1.11 respectively for 2011-12, 2012-13,
2013-14, 2014-15 and 2015-16.
We can conclude that financial position of cooperative society is going down while
comparing 1st 3 years with last 3 years.
4.4.4 RETURN ON TOTAL ASSETS:
Return on Assets (ROA) is an indicator of how profitable company's assets are in generating
profit. Return on Assets shows how many Amount of earnings result from each Amount of assets
the company controls. Return on Assets ratio gives an idea of how efficient management is at
using its assets to generate profit.
Formula: Net Profit after tax + Interest) / Total Asset

Table: 8 Following table: Return on total Assets

YEAR NET PROFIT AFTER BANK INTEREST TOTAL ASSET ROA RATIO
TAX (In Lakh) A (In Lakh) B (In Lakh) C D = (A+B) / C
2010-11 2010-11 2.56 0.17 15.01
2011-12 2011-12 0.73 0.14 16.41
2012-13 2012-13 2.12 0.25 22.1
2013-14 2013-14 -2.77 0.45 1.57
2014-15 2014-15 -0.88 0.47 30.14
2015-16 2015-16 -2.93 0.41 33.9

ROA RATIO
0.18 0.05 0.11
0.2 -0.01 -0.07
0
-0.2 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
-0.4
-0.6
-0.8
-1
-1.2
-1.4
-1.6 -1.48

INTERPRETATION:
Above Table no.8and graph implies that Return on total assets ratio of Cooperative society is
0.18 in the year of 2010-11 and in subsequent years it is 0.05, 0.11, -1.48, -0.01 & -0.07
respectively for the year of 2011-12, 2012-13,2013-14, 2014-15 & 2015-16.
The analysis clearly shows that the ratio in 2013-14 yearhigh which has impacted the
business and the financial position is the Up-Streams and has been decreased to -0.07 in the last
year. From this it can be concluded that the financial Return on total assets ratio position ofthe
Cooperative society is good because efficient management is at using its assets to generateprofit.

4.4.5 RETURN ON CAPITAL EMPLOYED:

Return on capital employed or ROCE is a profitability ratio that measures how efficiently
an organization can generate profits from its capital employed by comparing net operating profit
to capital employed.In other words, return on capital employed shows investors how many
Rupees in profits each rupees of capital employed generates. R.O.C.E is a long-term profitability
ratio because it shows how effectively assets are performing while taking into consideration
long-term financing. This is why ROCE is a more useful ratio than return on equity to evaluate
the longevity of an organization.
This ratio is based on two important calculations: operating profit and capital employed.
Net operating profit is often called EBIT or earnings before interest and taxes. EBIT is often
reported on the income statement because it shows the company profits generated from
operations. EBIT can be calculated by adding interest and taxes back into net income if need be.
Capital employed is a fairly convoluted term because it can be used to refer to many
different financial ratios. Most often capital employed refers to the total assets of an organization
less all current liabilities. This could also be looked at as stockholders' equity less long-term
liabilities. Both equal the same figure.
Return on Capital Employed: (Net Operating Profit / Employed Capital) * 100

Table: 9 Following table: Return on Capital employed

YEAR BEFORE TAX NET INVESTED R.O.C.E RATIO
PROFIT (In Lakh) CAPITAL (In Lakh) C = (A / B) * 100
A B
2010-11 2.56 9.99 25.63
2011-12 0.73 3.08 23.7
2012-13 2.13 18.37 11.6
2013-14 -2.78 22.62 -12.3
2014-15 -0.88 24.66 -3.57
2015-16 -2.93 22.6 -12.96

R.O.C.E RATIO
25.63 23.7
30
20 11.6
10
0
-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
-3.57
-20 -12.3 -12.96

INTERPRETATION:
Above Table no.9and graph implies that Return on total assets ratio of Cooperative society is
25.63 in the year of 2010-11 and in subsequent years it is 23.7, 11.6, -12.3, -3.57 & -12.96
respectively for the year of 2011-12, 2012-13,2013-14, 2014-15 & 2015-16.
From the above analysis it can be concluded that there is no uniformity in R.O.C.E of
Cooperative Society, which indicates Assets are not performing effectively.

4.5ACTIVITY & EFFICIENCY ANALYSIS

Efficiency ratios show how efficiently the business is using its resources. Shareholders in
particular will want to know how well the firm is using their money! It is advisable for the
business to get as much turnover from its assets as possible and at the same time it is not a good
idea for it to have too many assets in the form of stock or debtors.
Financial efficiency can be examined by using the following ratios:
 Stock turnover
 Debtor days
 Fixed assets turnover ratio
What do we mean by the term financial efficiency? A business uses capital - shareholders
capital or that borrowed from the banks - to run its business. These stakeholders are entitled to
know how well this capital is being used. In other words, is the company financially efficient?
Are they growing the firm fast enough?
 The last section showed how the acid test ratio could give an indication of financial
performance.It only looked at the capital structure, though, and attempted to measure risk in
some way. Other ratios are perhaps better at assessing performance, or use of money.

4.5.1 STOCK TURNOVER RATIO:

Inventory Turnover Ratio is one of the efficiency ratios and measures the number of
times, on average, the inventory is sold and replaced during the fiscal year.
Inventory Turnover Ratio formula isCost of Goods Sold / Average Inventory
A low inventory turnover ratio is a signal of inefficiency, since inventory usually has a
rate of return of zero. It also implies either poor sales or excess inventory. A low turnover rate
can indicate poor liquidity, possible overstocking, and obsolescence, but it may also reflect a
planned inventorybuildup in the case of material shortages or in anticipation of rapidly rising
prices.
A high inventory turnover ratio implies either strong sales or ineffective buying (the
organization buys too often in small quantities, therefore the buying price is higher).A high
inventory turnover ratio can indicate better liquidity, but it can also indicate a shortage or
inadequate inventory levels, which may lead to a loss in business.

Table: 10 following table: Stock Turnover ratio

COST OF GOODS AVERAGE STOCK STOCK TURNOVER
YEAR SOLD (In Lakh) (In Lakh) RATIO
2010-11 12.43 4.24 2.93
2011-12 15.46 3.43 4.50
2012-13 15.36 1.02 15.08
2013-14 15.32 0.47 3.26
2014-15 11.12 0.71 15.54
2015-16 29.9 2.26 13.20
INTERPRETATION
Above Table no. 10 Show, Stock Turnover Ratio of Cooperative society 2.93 in the year
2010-11 in subsequent years it is 4.50 in 2011-12, 15.08 in 2012-13, 3.26 in 2013-14, 15.54 in
2014-15, 13.20 in 2015-16. The analysis clearly shows that the ratio is 2014-15 year highly ratio
And Very low ratio in 2010-11. No regular maintain ratio in study period. First two year stock
turn over low, after last two year high ratio show last two year management sales policy is good.

4.5.2 FIXED ASSETS TURNOVER RATIO:

The fixed asset turnover ratio is the ratio of net sales to net fixed assets (also known as
property, plant, and equipment). A high ratio indicates that a business is:
 Doing an effective job of generating sales with a relatively small amount of fixed assets
 Outsourcing work to avoid investing in fixed assets
 Selling off excess fixed asset capacity
The concept of the fixed asset turnover ratio is most useful to an outside observer, who wants
to knowhow well a business is employing its assets to generate sales.
The formula for the ratio is to subtract accumulated depreciation from gross fixed assets, and
divide into net annual sales. It may be necessary to obtain an average fixed asset figure, if the
amount varies significantly over time. Do not include intangible assets in the denominator, since
it can skew the results.
Fixed Asset Turnover Ratio formula: Net Annual Sales / Gross Fixed Asset
Table: 11 Following table: Fixed assets Turnover ratio
NET SALE (In Lakh) NET FIXED ASSETS (In Lakh) F.A TURNOVER
YEAR A B RATIO (C = A / B)
2010-11 16.39 1.01 16.18
2011-12 18.56 1.11 16.66
2012-13 20.04 1.46 13.74
2013-14 15.87 14.64 1.08
2014-15 12.17 15.58 0.78
2015-16 30.48 15.3 1.99

FIXED ASSET TURNOVER RATIO

20 16.72
16.23
13.73
15

10

5 1.99
1.08 0.78
0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:
Above Table No.11and graph shows that theFixed Assets Turnover Ratio of Cooperative
society is 16.23 in the year 2010-11and in subsequent years it is 16.72 in 2011-12, 13.73 in
2012-13, 1.08 in 2013-14, 0.78 in 2014-15, 1.99 in 2015-16. The analysis clearly shows that the
ratio in 2011-12 year is having high ratio &in 2014-15 it is vice-versa, which shows that the
society has not done wellenough because it has been increased a little bit in 2011-12 but after
that continuously decreased.

4.5.3 CURRENT ASSETS TURNOVER RATIO

Current assets turnover is an efficiency measurement accountants apply to an
organization’s financial statements. Both the income statements and balance sheets have the
requisite information for computing this ratio. The result from this formula is a metric that
indicates how well an organization generates sales revenue from the current assets it owns. A
higher number is generally preferable as the organization uses its assets in the most efficient
manner possible. Accountants can compute the current assets turnover ratio on a monthly basis.
An organization’s current assets are those items that last less than 12 months in the
business.The most common current assets include cash, cash equivalents, inventory, and other
general current assets listed on a balance sheet. In most cases, the organization reports these
items at the very top of the balance sheet’s asset section. Accountants report these figures at their
historical cost, which is the amount the organization paid at the time of purchase. In some cases,
a company may choose to leave out inventory if these items do not sell frequently.
 The current assets turnover ratio is fairly basic; the most common formula divides sales
by average current assets. Sales are the top figure reported on a organization’s income statement.
Average current assets take an extra step to compute. Accountants add together the beginning
monthly balance for current assets and the ending monthly balance for current assets and then
divide this figure by two. The result is the denominator for the current assets turnover ratio.

Formula:Total Sale / Current Assets

Table: 12 Following Table: Current assets turnover ratio

YEAR TOTAL SALE CURRENT ASSET C.A TURNOVER RATIO
(In Lakh) A (In Lakh) B C=A/B
2010-11 16.38 13.5 1.21
2011-12 18.56 15.29 1.21
2012-13 20.04 20.52 0.98
2013-14 15.86 11.37 1.39
2014-15 12.16 13.73 0.89
2015-16 30.48 9.55 3.19

CURRENT ASSET TURNOVER RATIO

4 3.19

2 1.21 1.21 0.98 1.39

0.89

0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:
Above Table no. 12& graph shows, Current Assets Turnover Ratio of Cooperative
society is 1.21 in the year of 2010-11 and in subsequent years it is 1.21 in 2011-12, 0.98 in 2012-
13, 1.39 in 2013-14, 0.89 in 2014-15, 3.19 in 2015-16. The analysis clearly shows that the ratio
is 2015-16 year high & very low in 2010-11. There is no good position in 2012-13 and 2014-15.

4.5.4 WORKING CAPITAL TURNOVER RATIO

The working capital turnover ratio measures how well an organization is utilizing its
working capital to support a given level of sales. Working capital is current assets minus current
liabilities.A high turnover ratio indicates that management is being extremely efficient in using a
firm's short-term assets and liabilities to support sales. Conversely, a low ratio indicates that a
business is investing in too many accounts receivable and inventory assets to support its sales,
which could eventually lead to an excessive amount of bad debts and obsolete inventory.
 To calculate the ratio, divide net sales by working capital (which is current assets minus
current liabilities). The calculation is usually made on an annual or trailing 12-month basis, and
uses the average working capital during that period.
Formula:Net Sales / Net Working Capital

Table: 13 Following Table: Working Capital Turnover ratio

YEAR TOTAL NET SALE (In Lakh) NET WORKING W.C TURNOVER
A CAPITAL (In Lakh) B RATIO ( C = A / B)
2010-11 16.39 11.04 1.48
2011-12 18.56 12.21 1.52
2012-13 20.04 16.8 1.19
2013-14 15.86 7.39 2.14
2014-15 12.19 9.56 1.27
2015-16 30.48 6.22 4.90

WORKING CAPITAL TURNOVER RATIO

4.9
5

3
2.14
2 1.48 1.52
1.19 1.27
1

0
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:
Above Table no.13& graph shows thatthe Working Capital Turnover Ratio of
Cooperative society is 1.48 in the year 2010-11, and in subsequent years it is 1.52 in 2011-12,
1.19 in 2012-13, 2.14 in 2013-14, 1.27 in 2014-15, 4.90 in 2015-16. The analysis clearly shows
that the ratio in 2015-16 year is high and very low in 2012-13.
From the above analysis it can be concluded that the Working Capital Turnover Ratio
position of Cooperative society is good in the terms of Working Capital and it has been
subsequently increased from the period of 2010-11 to 2015-16.
CHAPTER-5

FINDINGS AND MANAGERIAL

IMPLICATION

FINDINGS:
1. Proprietary ratio of Jamdhar Primary Agriculture Cooperative society is 4.05 in the
year 2010-11 in subsequent years it is 0.98, 4.93, 5.68, 5.34 and 2.69 in 2011-12, 2012-
13, 2013-14, 2014-15 and 2015-16. The analysis clearly shows that the ratio is high in the
period of 2011-12 and after the lowest ratio is in the period of 2011-12.From the above
analysis, it can be concluded that Jamdhar Primary Agriculture Cooperative Society is in
Good Position; but during the study period, Ratio fluctuation is there year on year, and
for the last year i.e. 2015-16 is very low than the previous three years. We can conclude
that, there is stability of proprietary ratio. So no need to take loan or trade on equity.
2. Fixed capital-Assets ratio of Jamdhar Primary Agriculture Cooperative society is 9.89
in the year 2010-11 in subsequent years it is 2.77, 12.66, 1.55 & 1.58, 1.48 in the years of
2011-12, 2012-13, 2013-14, 2014-15 and 2015-16 respectively. The analysis clearly
shows that the ratio is high in 2012-13 and after lowest ratio in 2015-16.
3. Current Ratio is 5.51 in the year 2010-11 in subsequent years it is 4.96 in 2011-12, 5.51
in 2012-13, 2.86 in 2013-14, 3.29 in 2014-15 and 2.86 in 2015-16. The analysis clearly
shows that the highest ratio is for the period of 2012-13 and 2010-11 and after that it has
been decreased, which indicates company’s liquidity is going down, but as per the
common standard it is in good position.
4. Quick Ratio of Cooperative Society is 2.7 in 2010-11, in subsequent years it is 4.4, 5.51,
2.84, 2.96, 1.92 in 2011-12, 2012-13, 2013-14, 2014-15 & 2015-16. The analysis clearly
shows that the ratio is high in 2012-13 and after lowest in 2015-16.
5. Gross Profit ratio of Cooperative society is 24.12 in the year of 2010-11, in subsequent
years it is 16.39, 18.56, 20.04, 15.85, 12.17, 30.28 in 2011-12, 2012-13, 2013-14, 2014-
15, 2015-16 respectively. The analysis clearly shows that the ratio is 2010-11 year. This
analysis shows that the Gross Profit Ratio is on down-streams which impacting the
liquidity position of the Firm.
6. Net Profit ratio of Cooperative society is 15.6 in the year of 2010-11 but in subsequent
years it is 3.93, 10.58, -17.47, -7.2, -9.61 in 2011-12, 2012-13, 2013-14, 2014-15, 2015-
16 respectively. The analysis clearly shows that organization’s net profit is going down
year on year.
7. Operating Ratio of Cooperative Society is 0.9 in the year of 2010-11 but in subsequent
years it is 0.97, 0.95, 1.27, 1.21 & 1.11 respectively for 2011-12, 2012-13, 2013-14,
2014-15 and 2015-16.We can conclude that financial position of cooperative society is
going down while comparing 1st 3 years with last 3 years.
8. Return on total assets ratio of Cooperative society is 0.18 in the year of 2010-11 and in
subsequent years it is 0.05, 0.11, -1.48, -0.01 & -0.07 respectively for the year of 2011-
12, 2012-13, 2013-14, 2014-15 & 2015-16.The above analysis clearly shows that the
ratio in 2013-14 year high which has impacted the business and the financial position is
the Up-Streams and has been decreased to -0.07 in the last year. From this it can be
concluded that the financial Return on total assets ratio position of the Cooperative
society is good because efficient management is at using its assets to generate profit.
9. Return on total assets ratio of Cooperative society is 25.63 in the year of 2010-11 and
in subsequent years it is 23.7, 11.6, -12.3, -3.57 & -12.96 respectively for the year of
2011-12, 2012-13, 2013-14, 2014-15 & 2015-16.From the above analysis it can be
concluded that there is no uniformity in R.O.C.E of Cooperative Society, which indicates
Assets are not performing effectively.
10. Stock Turnover Ratio of Cooperative society 2.93 in the year 2010-11 in subsequent
years it is 4.50 in 2011-12, 15.08 in 2012-13, 3.26 in 2013-14, 15.54 in 2014-15, 13.20 in
2015-16. The analysis clearly shows that the ratio is 2014-15 year highly ratio And Very
low ratio in 2010-11. No regular maintain ratio in study period. First two year stock turn
over low, after last two year high ratio show last two year management sales policy is
good.
11. Fixed Assets Turnover Ratio of Cooperative society is 16.23 in the year 2010-11 and in
subsequent years it is 16.72 in 2011-12, 13.73 in 2012-13, 1.08 in 2013-14, 0.78 in 2014-
15, and 1.99 in 2015-16. The analysis clearly shows that the ratio in 2011-12 year is
having high ratio & in 2014-15 it is vice-versa, which shows that the society has not done
well enough because it has been increased a little bit in 2011-12 but after that
continuously decreased.
12. Current Assets Turnover Ratio of Cooperative society is 1.21 in the year of 2010-11
and in subsequent years it is 1.21 in 2011-12, 0.98 in 2012-13, 1.39 in 2013-14, 0.89 in
 2014-15, 3.19 in 2015-16. The analysis clearly shows that the ratio is 2015-16 year high
& very low in 2010-11. There is no good position in 2012-13 and 2014-15.
13. Working Capital Turnover Ratio of Cooperative society is 1.48 in the year 2010-11,
and in subsequent years it is 1.52 in 2011-12, 1.19 in 2012-13, 2.14 in 2013-14, 1.27 in
2014-15, 4.90 in 2015-16. The analysis clearly shows that the ratio in 2015-16 year is
high and very low in 2012-13.From the above analysis it can be concluded that the
Working Capital Turnover Ratio position of Cooperative society is good in the terms of
Working Capital and it has been subsequently increased from the period of 2010-11 to
2015-16.

MANAGERIAL IMPLICATIONS:
In view of the findings and the conclusions of the study, the following recommendations are
suggested to analysis the financial performance of Jamdhar Primary Agricultural Cooperative
society of kendrapara district in Odisha state of India.

In order to improve the financial leverage the management shall build equity capital by
collecting shares from existing and new membership increase; retain profits or converting cash.
Members of the cooperative should increase their own capital to finance fixed assets in order to
reduce leverage ratio, this can be enhanced by selling additional share capital and unproductive
fixed assets.

To improve the liquidity position of the cooperative society, the cooperative society shall
maintain adequate cash reserves from operating activities.

Gross profit margin ratio is low in the cooperative society, this shows it could not cover its fixed
charges, and then the Society management must follow pricing policy which says higher price
for produce and lower price for inputs and commodities.

The management of the cooperative society must pay its liabilities on time to minimize the
financial charge paid to creditors as interest for the amount borrowed.

The cooperative Society shall allocate part of its equity capital for current assets and working
capital in order to run the business operations slowly, attract short term creditors and minimize
risks of long term investment for management.

The Management of cooperative Society should revise its credit policy to speed up collection of
receivables and minimize associated costs.
The management bodies of the cooperative society should design and plan in paying dividend
and raw material Price Different to its members and farmer’s in every year or selected time to
time.

The management of cooperative Society should give attention to decreasing administrative

expenses and improve their working efficiency to gain enough profit and save accumulated profit
for capital growth.

Cooperative Society Management Continuous and sustainable support and supervision by

cooperative Society promotion office should be given to strengthen service offered by the
cooperative society.

To progress the productivity of the cooperative Society, the cooperative has to improvement
qualified professional employees in addition to existing personnel.

CHAPTER-6
Conclusion-

From the above study, it is concluded that the values of liquidity ratios such as quick ratio and
net working capital ratio and financial activity ratios are above the standard. This indicates the
cooperative financial position was good (or sound enough) to meet its current obligations, But
current ratio, absolute liquid ratio and cash ratio of the cooperative are below the Cooperative
Societies average, standard, that shows the financial position of the cooperative is not
satisfactory to meet its short-term obligations.

Finally, still there is a scope and hope for the betterment to maintain the optimum level financial
stability in future, if the cooperative societies operate the activity in efficient manner, try to
maintain the optimum level of financial stability in future, there is no doubt, it is clear Cristal
that it will get the great success among the public, Rural and other cooperatives also, the day is
not for off.
CHAPTER-7
REFERENCES:

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Bharti Cooperatives Ltd ” International Journal of Marketing, Financial Services & Management
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2. Tejani Rachana (2011) “ Financial Inclusion and Performance of Rural Co-operative Banks in
Gujarat ” Research Journal of Finance and Accounting www.iiste.orgISSN 2222-1697 (Paper)
ISSN 2222-2847 (Online) Vol 2, No 6, 2011.

3. Dr. Baldev M .Patel ( 2013)“ Social Services Provided by Selected Credit Co-Operative
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4. Dr. Ruchira Prasad ( 2013 ) “A Case Study of Amul Co operative in India in Relation To
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5. Deepali Kapoor Suri* and Shilpi Singhal ( 2013) “ Comparative Analysis of Financial
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9. Boris Nenide & Robert W. Pricer and S. Michael Camp( 2012) “The use of Financial Ratios
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