ALL INDIA SENIOR SECONDARY SCHOOL EXAMINATIONS
CLASS- ……………
ACCOUNTANCY
PROJECT WORK
2022 - 2023
Name : ………………………………………
Class : ………………………………………
Reg.No. : ………………………………………
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Acknowledgement
I would like to express my special
thanks of gratitude to my Accountancy
Teacher Miss.Sheeba Mam for their
able guidance and support in
completing my project.
I would also like to extend my gratitude
to Principal Miss.Bessy Thomas and
Vice Principal Miss, Susan Chacko for
providing me with all facility which was
required.
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Si.No Particulars Date Page.No Initial of
Teacher
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Financial Statement
Analysis
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FINANCIAL STATEMENT
ANALYSIS
MEANING
The term ‘financial statement analysis’, also known as analysis
and interpretation of financial statements, refers to the process
of determining financial strengths and weakness of the firm by
establishing strategic relationship between the items of the
balance sheet, profit and loss account and other operative data.
According to Richard Metcalf and Pierre Titard, ‘Analysing
financial statement is a process of evaluating the relationship
between component parts of a financial statement to obtain a
better understanding of a firm’s position and performance.
FEATURES OF FINANCIAL STATEMENT ANALYSIS
➢ To assess the earning capacity or profitability of the firm.
➢ To assess the operational efficiency and managerial effectiveness.
➢ To assess the short term as well as long term solvency position of the
firm.
➢ To identify the reasons for change in profitability and financial position
of the firm.
➢ To make inter-firm comparison.
➢ To make forecasts about future prospects of the firm.
LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS
➢ It is only a study of interim reports.
➢ Financial analysis is based upon only monetary information and non-
monetary factors are ignored.
➢ It does not consider changes in price levels.
➢ As the financial statements are prepared on the basis of a going
concern, it does not give exact position. Thus accounting concepts
and conventions cause a serious limitation to financial analysis.
➢ Changes in accounting procedure by a firm may often make financial
analysing misleading.
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Segment
Analysis
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Tata Group
The Tata Group is an
Indian multinational conglomerate headquartered
in Mumbai. Established in 1868, it is India's largest
conglomerate, with products and services in over
150 countries, and operations in 100 countries
across six continents. Acknowledged as the
founder of the Tata Group, Jamsetji Tata is
sometimes referred to as the "Father of Indian
Industry".
The group gained international recognition after
acquiring several global companies. Each Tata
company operates independently under the
guidance and supervision of its own board of
directors and shareholders. Philanthropic trusts
control over 66% of the Tata holding
company Tata Sons, while the Tata family is a
very small shareholder. The main segments in
Tata Groups are Information Technology, Steel
& Automotive
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THREE SEGMENTS
• Tata Communications Limited:- is an
Indian telecommunications company previously known as Videsh
Sanchar Nigam Limited (VSNL). It was previously a government-
owned-telecommunications service provider and under
the ownership of Department of Telecommunications, Ministry of
Communications, Government of India.
• Tata Motors Limited:- A
Indian multinational automotive manufacturing company,
headquartered in Mumbai, India, which is part of the Tata Group. The
company produces passenger cars, trucks, vans, coaches, buses.
• Tata Steel Limited:- Tata Iron and Steel Company Limited (TISCO),
Tata Steel is among the top steel producing companies in the world
with an annual crude steel capacity of 34 million tonnes.
COMMON SIZE STATEMENT
SHOWING PERCENTAGE OF
SEGMENT’S REVENUE
% of revenue = (Revenue of Tata Motors/Total Revenue)*100 =
(43,188.34 crs/100,533.53 crs)*100 = 42.96%
% of revenue = (Revenue of Tata Communications/Total Revenue)*100
= (14,644.19 crs/100,533.53 crs)*100 = 14.57%
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% of revenue = (Revenue of Tata Steel /Total Revenue)*100 = (42,701
crs/100,533.53 crs)*100 = 42.47%
Segments % of Segments
Revenue
Tata Motors 42.96%
Tata Communications 14.57%
Tata Steel 42.47%
COMMON SIZE STATEMENT
SHOWING DEGREE OF
STATEMENT’S REVENUE
° of revenue = (Revenue of Tata Motors/Total Revenue)*360 =
(43,188.34 crs/100,533.53 crs)*360 = 154.65°
° of revenue = (Revenue of Grasim)/Total Revenue)*360 = (14,644.19
crs/100,533.53 crs)*360 = 52.44°
° of revenue = (Revenue of Hindalco)/Total Revenue)*360 = (42,701
crs/100,533.53 crs)*360 = 152.91°
Segments Degree of segments of
revenue
Tata Motors 154.65°
Tata Communications 52.44°
Tata Steel 152.91°
PIE DIAGRAM SHOWING
SEGMENTS REVENUE
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Revenue
42% 42%
16%
Tata Motors Tata Communications Tata Steels
COMMON SIZE STATEMENT
SHOWING PERCENTAGE OF
SEGMENT’S PROFIT
% of profit = (Profit of Tata Motors/Total Profit)*100 = (5342.07
crs/7240.07 crs)*100 = 73.79%
% of profit = (Profit of Tata Communications/Total Profit)*100 = (905
crs/7240.07 crs)*100 = 12.50%
% of profit = (Profit of Tata Steel/Total Profit)*100 = (993 crs/7240.07
crs)*100 = 13.71%
Segments % of Segments Profit
Tata Motors 73.79%
Tata Communications 12.50%
Tata Steels 13.71%
COMMON SIZE STATEMENT
SHOWING DEGREE OF
SEGMENT’S PROFIT
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° of profit = (Profit of Tata Motors/Total Profit)*360 = (5342.07 crs/7240.07
crs)*360 = 265.64°
° of profit = (Profit of Tata Communications/Total Profit)*360 = (905
crs/7240.07 crs)*360 = 45°
° of profit = (Profit of Tata Steels/Total Profit)*360 = (993 crs/7240.07
crs)*360 = 49.36°
Segments % of Segments Profit
Tata Motors 265.64°
Tata Communications 45°
Tata Steels 49.36°
PIE CHART SHOWING INTER
SEGMENT COMPARISON OF
PROFIT
Profit
14%
14%
72%
Tata Motors Tata Communications Tata Steels
COMMON SIZE STATEMENT
SHOWING INTER-SEGMENT
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COMPARISON OF CAPITAL
EMPLOYED
Tata Motors:-
% of C.E = (C.E of Tata Motors/Total C.E)*100 = (79,625.49
crs/166,706.87 crs)*100 = 47.7%
° of C.E = (C.E of Tata Motors/Total C.E)*360 = (79,625.49
crs/166,706.87 crs)*360 = 171.94
Tata Communications:-
% of C.E = (C.E of Tata Communications /Total C.E)*100 = (41,009.38
crs/166,706.87 crs)*100 = 24.56%
° of C.E = (C.E of Tata Communications /Total C.E)*360 = (41,009.38
crs/166,706.87 crs)*360 = 88.56°
Tata Steels:-
% of C.E = (C.E of Tata Steels/Total C.E)*100 = (46,072 crs/166,706.87
crs)*100 = 27.74%
° of C.E = (C.E of Tata Steels/Total C.E)*360 = (46,072 crs/166,706.87
crs)*360 = 99.5 °
Segme Tata Tata Tata Total
nt Motor Communicatio Steel
s ns s
Capital 79,625.4 41,009.38 46,072 166,706.8
Employed 9 7
% of 47.70% 24.56% 27.74 100%
Capital %
Employed
Degree for 171.94o 88.56o 99.50o 360o
Pie Chart
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PIE CHART SHOWING INTER
SEGMENT COMPARISON OF
CAPITAL EMPLOYED
Sales
28%
48%
24%
Tata Motors Tata Communications Tata Steels
CALCULATION ON RETURN ON
INVESTMENT (ROI)
Tata Motors:-
ROI % = (Profit before interest and tax/Capital employed)*100=
(9,155.15 crs/79,625.49 crs)*100
=11.49%
Tata Communications:-
ROI % = (Profit before interest and tax/Capital employed)*100= (1314.28
crs/41,009.38 crs)*100
= 3.20%
Tata Steels:-
ROI % = (Profit before interest and tax/Capital employed)*100= (3,057
crs/46,072 crs)*100
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= 6.63%
COMMON SIZE STATEMENT
SHOWING INTER-SEGMENT
COMPARISON OF RETURN ON
INVESTMENT(ROI)
For the Year ended 31st March 2021 (all figures in crores)
Segment Tata Tata Tata Total
Motors Communications Steels
PBIT 9,155.15 1,314.28 3,057 13,526.43
Capital 79,625.49 41,009.38 46,072 166,706.87
Employed
R.O.I% 11.49% 3.20% 6.63% 21.32%
BAR GRAPH SHOWING INTER-
SEGMENT COMPARISON OF
RETURN ON INVESTMENT(ROI)
Return On Investment (ROI)
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0
Category 1
Tata Motors Tata Communications Tata Steels
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COMBINED COMPARATIVE
STATEMENT
For the year Ended 31st March 2021 (all figures in Crores)
Segment Tata Motors Tata Tata Steels Total
Communications
% of Total 42.96% 14.57% 42.47% 100.00%
Revenue
% of Total 73.79% 12.50% 13.71% 100.00%
Profit
% of C.E 47.70% 24.56% 27.74% 100.00%
R.O.I% 11.49% 3.20% 6.63% 21.32%
CONCLUSION
• Tata Motors. Has the highest ROI with 11.49% with capital
employed 47.40% and with revenue share of 42.96% of the
total revenue.
• Tata Motors Ltd. Generated PBIT of 73.79% of Total Profit.
Tata Motors Ltd. has a good ROI of 11.49%.
• Therefore, Tata Motors Ltd. Is the best performing segments
as compared to other segments.
BIBLIOGRAPHY
• https://www.tatamotors.com/
• https://www.tatacommunications.com/
• https://www.tatasteel.com/
• https://www.wikipedia.org/
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CASH FLOW
STATEMENT
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CASH FLOW STATEMENT
A cash flow statement is a financial statement that provides aggregate data
regarding all cash inflows a company receives from its ongoing operations and
external investment sources. It also includes all cash outflows that pay for
business activities and investments during a given period.
A company's financial statements offer investors and analysts a portrait of all
the transactions that go through the business, where every transaction
contributes to its success.
The cash flow statement is believed to be the most intuitive of all the financial
statements because it follows the cash made by the business in three main
ways—through operations, investment, and financing. The sum of these three
segments is called net cash flow.
OBJECTIVES
The main objective of preparing cash flow statements for a particular
accounting period is to present information regarding the inflow and outflow of
cash.
Besides, It presents the investment and financial activities of a concern for a
particular period. It also fulfils the following objectives;
• Ensuring future positive cash flow of particular concern.
• Ensuring the capacity of an organization to pay a dividend.
• Identifying non-cash items ensures cash income and expenses of concern.
• Comparing various items of the current year with those of last year.
Knowing cash and cash equivalent and outsourcing inflow of a concern for a
particular period.
BENEFITS
• Cash Flow Statement helps in knowing the exact figure of cash inflows and
outflows from various operations of the business. It helps in comparing the
cash budgets of past assessments with the present to assess the future
requirements of the cash. It gives the accurate information about the cash-
based transactions in the business.
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• Cash flow statement majorly used in preparing the cash budget for future
needs and helps in knowing the periodical requirement of cash in the
business.
• It reveals the key changes required for the financial positioning of the
business and prioritizes important activities to the management.
LIMITATIONS
• Cash flow statement only confined to money made transaction leaving the
other fund transactions and long-term assets and liabilities.
• Even though it plays an important role in the business it has limited use when
compared with the profit and loss account.
• These statements don’t disclose the net income from the various operations
executed during the course of the business.
CLASSIFICATIONS
1.CASH FROM OPERATING ACTIVITY:- Cash from operating activities is the
aggregate amount of cash flow reported in the operating activities section of
the statement of cash flows of a business. This statement is part of the
organization’s financial statements. Operating activities refer to the primary
revenue-generating activities of an entity, such as cash received from the sale
of goods or services, royalties on the use of company-owned intellectual
property, commissions for sales on behalf of other entities, and cash paid to
suppliers.
The operating activities category does not include investing activities, which
are comprised of cash inflows from the liquidation of investments, or cash
outflows for the purchase of new investment instruments. The operating
activities category also does not include financing activities, which relate to
cash flows from the issuance or repurchase of a company's own shares, the
issuance of its own debt instruments, or the pay-out of dividends. Items
included in cash flows from operations are:
• Cash receipts from sales
• Cash received from earnings on investments
• Payments to suppliers and employees
• Payments for interest and taxes
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• Increases or decreases in accounts receivable, inventory and prepaid
expenses
• Increases or decreases in accounts payable
2.CASH FROM INVESTING ACTIVITY:- Cash flow from investing activities
refers to cash inflow and outflow of cash from investing in assets (including
intangibles), purchasing of assets like property, plant and equipment, shares,
debt and from sale proceeds of assets or disposal of shares/debt or
redemption of investments like collection from loans advanced or debt issued.
It provides information on cash inflow and outflow related to purchases and
sales of assets (Property, Plant & Equipment, etc.), loans made to suppliers or
the ones received from the customer, and any payments related to merger &
acquisitions. These items are found in the non-current portion of the balance
sheet
• Purchase of property, plant, and equipment (cash outflow)
• Sales of property, plant, and equipment (cash inflow)
• Investment in joint ventures and affiliates (cash outflow)
• Payments for business acquired (cash outflow)
• Proceeds from sales of assets (cash inflow)
• Investments in marketable securities (cash outflow)
3.CASH FROM FINANCING ACTIVITY:- Cash flows from financing activities
is a line item in the statement of cash flows. This statement is one of the
documents comprising a company's financial statements. The line item
contains the sum total of the changes that a company experienced during a
designated reporting period that were caused by transactions with owners or
lenders to either:
• Provide long-term funds to the company; or
• Return those funds to the owners or lenders. Items that may be included in
the financing activities line item are:
• Sale of stock (positive cash flow)
• Repurchase of company stock (negative cash flow)
• Issuance of debt, such as bonds (positive cash flow)
• Repayment of debt (negative cash flow)
• Payment of dividends (negative cash flow) • Donor contributions restricted to
long-term use (positive cash flow)
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CASH FLOW
STATEMENT(Reliance ltd.)
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GRAPHICAL REPRESENTATION
Operating Activites Investing Activities Financing Activities
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CONCLUSION
According to Prof. WH Kipatric ‘A project is a wholehearted, purposeful activity
proceeding in a social environment.
A project, from the point of view of students, can be purposeful learning
activity involving practical problems, planned and carried out in a real life
manner to achieve specific goals. In other words project work refers to a
successful completion of a study.
This project work has been helpful in understanding the meaning techniques
and objectives of a financial statements in a better manner.
Analysis of financial statement is the process of understanding the risk and
profitability of a firm through analysis of reported financial information.
The project had been helpful in understanding the objectives of financial
analysis which are as follows:
1)Judging the earning capacity or profitability : On the basis of financial
analysis, the earning capacity of the business concern maybe computed
2)Judging the managerial efficiency : The financial statement analysis helps to
pinpoint the areas where in the managers have shown efficiency and areas of
inefficiency
3)Judging the short-term and Long term Solvency of the Enterprise : On the
basis of financial analysis, long term as well as short term solvency of the
concern maybe judged.
4)Intra-firm comparison: Intra-firm comparison becomes easy with the help of
financial analysis. It helps in assessing own performance as well as that of
others, if mergers and acquisitions are to be considered.
5)Making forecasts and preparing budgets: Past financial statement analysis
helps a great deal in assessing developments in the future, specially the next
year
6)Understandable: Financial analysis helps the users of financial statements
to understand the complicated matter in simplified manner. Data can be made
more attractive by charts, diagrams, which can be understood easily.
The project work also enabled me to understand about the parties interested
in financial statements analysis; they are as follows:
1)Shareholders or investors or owners
2)Management
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3)Employees and trade unions
4)Suppliers or creditors
5)Bankers and Lenders
6)Government and Agencies
7)Researchers
Thus this project was of immense benefit for me.
BIBLIOGRAPHY
• https://www.ril.com/ar2020-
21/pdf/Consolidated%20Cash%20Flow%20Statement.pdf
• https://www.reliancedigital.in/
• Teachers
• Parents
THANK YOU
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