CHAPTER 1

INTRODUCTION
1.1 INTRODUCTION:

Leadership is a mutual social power system in which leaders and superiors affect one
another to accomplish corporate objectives. Leadership is a vital leadership function
that requires the potential to inspire a set of people towards a common objective.
Leadership centers onto the growth, expectations and capacity building of followers.
Leadership has a direct cause-effect relationship on organizations and their
performance. Leaders determine values, culture, tolerance for change, and motivation
for employees. A style of leadership is the method that managers use to practice their
leadership role. It is seen as a specific behavior employed by a leader in a company to
empower staff to achieve the organization's set of goals leadership style is the manner
in which a director or boss wants to behave with his or her staff or colleagues and the
manner in which they exercise the leadership role. It indicates that style or conduct of
leadership has an effect on job satisfaction and the willingness and purpose of an
employee to quit an organization or not. It is worth noting that the right leadership
style practiced in a given point in time, regardless of low pay,, could still inspire an
employee to offer his / her best in the company. The global sourcing market in India
continues to grow at a higher pace compared to the IT-BPM industry. India is the
leading sourcing destination across the world, accounting for approximately 55%
market share of the US$ 200-250 billion global services sourcing business in 2019-20.
India's rankings improved four places to 46th position in the 2021 edition of the
Global Innovation Index (GII). The IT industry accounted for 8% of India's GDP in
2020. According to STPI (Software Technology Park of India), software exports by
the IT companies connected to it, stood at Rs. 1.20 lakh crore (US$ 16.29 billion) in
the first quarter of FY22.
The role of leadership in an organization is crucial in terms of creating a vision,
mission, determination and establishment of objectives, designing strategies, policies,
and methods to achieve the organizational objectives effectively and efficiently along
with directing and coordinating the efforts and organizational activities.
Unfortunately, some companies do not take account of the leadership style adopted by
their managers. Based on this premise, our project aims to explore the relationship
between leadership style and organizational performance in Shakal Company.
 1.1 NEEDS OF THIS STUDY:
O The reason behind choosing these leadership styles is the fact that they are the most
practiced leadership styles throughout the globe, and if any new ideology is developed
through the research.
O It can improve these leadership styles further and bring further success to organizations.
O Therefore, the survey was designed to focus on these three leadership styles. only this
research is to determine the impact of autocratic leadership style, democratic
leadership style, and participative leadership style on the organizational performance"

1.2 LITERATURE REVIEW

Leadership can be defined in different ways that it is hard to come up with a single
working definition. Leadership is not just a person or group of people in a high
position, it is a very important factor for any organization or group. Leadership is a
process in which leader is indulged in various activities to achieve any goal.
Leadership is a communication process of leader and individuals. It also for Italian
restaurants refers to the behavior/ attitude of a leader to collect and direct the
individuals towards any goal. So, the success of a company or individual depends
mostly on the extent and quality of leadership.

Leadership has been a topic of study for social scientists for much of the twentieth
century, yet there has been no consensually agreed-upon definition of it (Jyoti &
Bhau, 2015; Sofi & Devanadhen, 2015; Xu & Wang, 2008; Bass, 1990). Many
authors have studied this phenomenon, and some have argued that there is no
conscious definition of what leadership is, no dominant paradigm for studying it, and
little agreement regarding the best strategies for developing and exercising it (Bennis,
2007; Hackman & Wageman, 2007; Vroom & Jago, 2007). However, Ngodo (2008)
views leadership as a form of direction in which a person can give to a group of
people he steers affairs in such a way that will influence the behavior of another
individual, or group. Ngodo (2008) perceives leadership to be a reciprocal process of
social influence, in which leaders and subordinates influence each other in order to
achieve organizational goals. Sun (2002) defines leadership as the process of
influencing people so that they make an effort by their own will and enthusiasm
 towards obtaining the group’s goals.

Leadership is a critical management skill, involving the ability to encourage a group of

people towards a common goal. Leadership focuses on the development of followers,
their needs and building their capacity (Klein et al., 2013). It is imperative for
managers occupying

leadership positions to focus on the development of value system of employees, their

motivational level and moralities with the development of their skills (Uchenwamgbe,
2013; Ismail et al., 2009). This approach will essentially help followers achieve their
goals as they work in the organizational setting. As posited by Khan et al. (2014),
followers will be encouraged to be expressive and adaptive to new and improved
practices and changes in the environment.
Michael (2010)
leadership has a direct cause-effect relationship upon organizations and their success.
Leaders determine values, culture, change tolerance and employee motivation. They
shape institutional strategies including their execution and effectiveness. It should be
stressed that leaders can be found at any level of an institution and are not exclusive to
management. Successful leaders do, however, have one thing in common. They
influence those around them in order to reap maximum benefit from the
organization’s resources, including its most vital and expensive human
resources/capital. This success can only be achieved and probably sustained in
organizations where appropriate leadership style or styles are employed at a given
time. Leadership is also a process which involves the use of non-coercive influence to
shape a group or organizational goals, motivate behaviour towards achieving the goals
as well as define the group’s culture

(Northouse, 2009)
.
Despite the variations in the definitions, there are at least three important implications of
these definitions. Firstly, leadership is a process engaged in by certain individuals
(leaders). It is an ongoing activity in an organization. Secondly, it involves other
people in the form of subordinates or employees who by their willingness are
influenced by the leader. Therefore, the subordinates formalize the leader’s authority
by making leadership process possible. Thirdly, the aim of leadership is the
accomplishment of a goal and objectives. A seemingly endless variety of definitions
 have been developed, and there is a common thread which runs through all the
definitions and that is the concept of influence. Leaders therefore influence others to
help accomplish group and organizational objectives. However, it should be noted that
the use of appropriate leadership style at a given time is a conduit for organizational
success.

Leadership style is the most dominant factors that impact employees’ attitudes and
behaviours including organizational commitment. Leadership can be defined as the
capacity to impact a group of employees’ decision, behaviour, recognition of the
goal, and work with

confidence and zeal (Adair, 2002). Leader is required to develop the future vision, to
motivate the organizational members, and to achieve the visions and to improve the
performance (Adair, 2002). According to Adair (2002) leadership is the ability to
encourage others to seek out and defined objectives enthusiastically. It is the human
factor which binds a group together and to improve their performance and to direct
them towards goals (Koudri,1999). Also it was suggested that leadership is to deal and
cope with change, focus on the long-term and the big picture, not always keep to save
him/herself to take risks, and concentrating on people and their values, not just only
the bottom-line

Since leadership is one of the key issues that organization faces and attributes to its
success and failures, a vast majority of literature , in the past, have focus on
examining the impact of leadership and its effects on employee performance or
organizational performance. The similar significant number of studies also has done
over in Malaysia. The table below shows some of the key researches done on
Malaysian context in examining the impact of leadership and its impact on employee
performance.
Leadership style is viewed as a combination of different characteristics, traits and
behaviors that are used by leaders for interacting with their subordinates.
(Mitonga-Monga & Coetzee, 2012). Mitonga-Monga and Coetzee (2012)
consider leadership as the pattern associated with managerial behavior, which
is designed to integrate the organizational or personal interest and effects for
achieving particular objectives.
Harris et al (2007) also postulated that leadership style can be defined as the kind
of relationship that is used by an individual so as to make people work
 together for a common goal or objective. According to modern leadership
styles, leadership styles can be categorized as follows: (1) transformational
leadership style, (2) transactional leadership style, (3) culture-based
leadership, (4) charismatic leadership, and (5) visionary leadership (Harris, et
al., 2007).
The basic structure of an organization is comprised of petencies different
departments in which the employees work as the basic units with different
capacities. In this structure, the main responsibility of the leadership is to
strengthen the moral values and working capacity of its workforce that
ultimately leads to increase in output graph of the organization (Avolio &
Bass, 2004). The employees, in the presence of inspiring leadership, may not
feel isolated from the central authority which keeps them intact and
resultantly they work with integrity
and utmost commitment. At macroscopic level, leadership is both a research area
and a practical skill (King, Johnson & Vugt, 2009). On the part of the
researchers, the current research highlights different leadership styles in the
different circumstances in various spheres of life. On the part of individual
level, it encompasses the abilities, leading capacity, skills, and experience of a
person or group of persons (Tahir, Abdullah, Ali & Daud, 2014). While
exercising the authority, the leadership seeks the participation of the
employees with all their dedication and sense of ownership through the power
of mobilization, motivation and communication in the organization (Chandra
& Priyono, 2016).

The present study tries to examine to what extent the relationship of the leadership styles
and employees' performance is affected by the transformational and transactional
leadership and which style successfully impacted upon the employees' level of
performance. At the same time, it analyzed the impact of transactional leadership in
relationship with employees' performance. The transactional leader, following his/her
style by implementing rules and regulations, institutes writ of authority, assigns and
focuses upon certain goals and directs the employees to achieve the pre-determined
tasks (Avolio & Bass, 2004). In using the transactional style, the leader focuses on
contingent reward and on management by exception. Research indicates that when
contingent reinforcement is used, followers believe that accomplishing objectives will
result in their receiving desired rewards. Using management by exception, the leader
 does not play any substantial role unless objectives are not being accomplished (Orji
et al.).

Eileen Y. Chou (2013) explains in his paper about the leadership that, there's a
tendency to assume that, leaders to be encouraging, magnanimous, and optimistic. But
in the last decade, across borders and sectors, there have been an increasing number of
leaders better known for a style that more vitriolic, punitive, and negative. The
subsequent research into how positive or negative rhetoric effects of the perception of
someone's leadership shows that although people may think they want our leaders to
be cheerleaders, and instinctively tend to empower naysayers instead.

Dalai Lama (2014) shares his observations in an article on leadership and describes how
our "strong focus on material development and accumulating wealth has led us to
neglect our basic human need for kindness and care". He offers leaders three
recommendations. First, to be mindful: "When we're under the sway of anger or
attachment, we're limited in our ability to take a full and realistic view of the
situation". Also, to be selfless: "Once you have a genuine 39 sense of concern for
others, there's no room for cheating, bullying, or exploitation; instead of being
honest, truthful, and transparent in their conductand utmost commitment. At
macroscopic level, leadership is both a research area and a practical skill (King,
Johnson & Vugt, 2009). On the part of the researchers, the current research highlights
different leadership styles in the different circumstances in various spheres of life. On
the part of individual level, it encompasses the abilities, leading capacity, skills, and
experience of a person or group of persons (Tahir, Abdullah, Ali & Daud, 2014).
While exercising the authority, the leadership seeks the participation of the employees
with all their dedication and sense of ownership through the power of mobilization,
motivation and communication in the organization (Chandra & Priyono, 2016).

The present study tries to examine to what extent the relationship of the leadership styles
and employees' performance is affected by the transformational and transactional
leadership and which style successfully impacted upon the employees' level of
performance. At the same time, it analyzed the impact of transactional leadership in
relationship with employees' performance. The transactional leader, following his/her
style by implementing rules and regulations, institutes writ of authority, assigns and
focuses upon certain goals and directs the employees to achieve the pre-determined
tasks (Avolio & Bass, 2004). In using the transactional style, the leader focuses on
 contingent reward and on management by exception. Research indicates that when
contingent reinforcement is used, followers believe that accomplishing objectives will
result in their receiving desired rewards. Using management by exception, the leader
does not play any substantial role unless objectives are not being accomplished (Orji
et al.).

Eileen Y. Chou (2013) explains in his paper about the leadership that, there's a
tendency to assume that, leaders to be encouraging, magnanimous, and optimistic. But
in the last decade, across borders and sectors, there have been an increasing number of
leaders better known for a style that more vitriolic, punitive, and negative. The
subsequent research into how positive or negative rhetoric effects of the perception of
someone's leadership shows that although people may think they want our leaders to
be cheerleaders, and instinctively tend to empower naysayers instead.
Dalai Lama (2014) shares his observations in an article on leadership and describes how
our "strong focus on material development and accumulating wealth has led us to
neglect our basic human need for kindness and care". He offers leaders three
recommendations. First, to be mindful: "When we're under the sway of anger or
attachment, we're limited in our ability to take a full and realistic view of the
situation". Also, to be selfless: "Once you have a genuine 39 sense of concern for
others, there's no room for cheating, bullying, or exploitation; instead of being
honest, truthful, and transparent in their conductJuliet Bourke, Andrea Espedido
(2015) says in his article that companies increasingly rely on diverse,
multidisciplinary teams that combine the collective capabilities of women and men,
people of different cultural heritage. and younger and older workers. But simply
throwing a mix of people together doesn't guarantee high performance; it requires
inclusive leadership. leadership that assures that all team members feel they are
treated respectfully and fairly, are valued and sense that they belong, and are confident
and inspired. Research involving 3,500 ratings by employees of 450 leaders found that
inclusive leaders share six behaviors and those leaders often overestimates how
inclusive they really are. These are the behaviors: visible commitment, humility,
awareness of bias, curiosity about others, cultural intelligence, and effective
collaboration.

Scott D. Anthony, Bernard C. Kümmerli (2016) depicted about leadership. in his paper
that teams are often misaligned on strategy, even though they don't seem to be on the
 surface. The problem is that in team meetings, people tend to publicly agree with the
company's direction (agreed-upon strategy say digital transformation the seeming
agreement turns into active resistance. Few are willing to spare the needed resources.
One solution is anonymous real- time particularly if the boss is present). But when it
comes time to allocate resources to a new digital polling. By having team
membersvotein real-time, differences of opinion are readily revealed. This then can
lead to focused discussion and consensus building.

Jennifer Porter, (2017) has explored in his article that of Great leaders are great learners.
Their never-ending pursuit of information pushes them to constantly improve and sets
them apart from the rest. Feedback serves acrucial role in this process, but getting and
learning from it isn't always easy .If you want to get the 40 feedback that is necessary
to improve your leadership, there are a few steps you can take. First, build and
maintain apsychologically safe environment. Sharing feedback is often interpersonally
risky. To increase the likelihood of your colleagues taking that risk with you. show
them that their honesty is valued.

Rasmus Hougaard, Jacqueline Carter, Vince Brewerton (2018) explores in his study that,
about human beings, are all driven by basic needs for meaning, happiness, human
connectedness, and a desire to contribute positively to others. And leaders that truly
understand these needs, and lead in a way that enables these 42 intrinsic motivations,
have the keys to enable strong loyalty, engagement, and performance. As leaders, one
must be humans before managers. This includes being personal, or asking oneself a
simple questionbefore making decisions If anyone's child or parent or good friend
worked here, would they appreciate this; being self-aware, so anyone can better able
to understand and empathize with the people you lead; being selfless; and, most of all,
being compassionate

Doris kearnsgoodwin (2018), in her most recent book, Leadership in Turbulent Times,
Goodwin examines the careers of Abraham Lincoln, Theodore Roosevelt, Franklin
Roosevelt, and Lyndon Johnson, illustrating how their skills and strengths enabled
them to lead the United States through periods of great upheaval. In this article she
looks at Lincoln's pivotal decision to issue the Emancipation Proclamation-which
required the support of his cabinet, the army, and the American people. Possessed of a
 powerful emotional intelligence, he was able to mediate among factions and sustain
the spirits of his countrymen. Among the powerful lessons Lincoln's leadership
embodied: Acknowledge when failed policies demand a change in direction.
Anticipate contending viewpoints. Set an example. Refuse to let past resentments
fester. Protect colleagues from blame. Establish trust.

➤ Eric garton (2019) depicts in his survey that less than half of respondents say they
agree or strongly agree that their leaders are inspiring. Even fewer feel that their
leaders foster engagement or commitment and model the culture and values of the
corporation. But real breakthroughs in performance. come from employees who feel
inspired by their leaders and their organizations. A new study to uncover what makes
a leader inspirational reveals some surprising results: there are many different
attributes, 33 in all, that inspire people, but you need only one of these to double your
chance of being an inspirational leader; inspirational leaders have behavioral "spikes"
that are relevant to how the company creates value; and leaders who both inspire
people and generate results disrupt established behaviors in their organizations.

Scott D. Anthony, Evan I. Schwartz (2020) study reveals that companies that claim to be
transforming seem to be everywhere. But stories of successful change efforts are
exceptionally rare. A study of S&P 500 and Global 500 firms reveals that those
leading the most successful transformations creating new offerings and business
models to push into new-growth markets share five common characteristics and
strategies: Transformational CEOs tend to be "insider outsiders;".

Rasmushougaard, Jacqueline carter (2021) paper explains that to truly engage other
human beings and create meaningful connections, people need to silence our inner
voices and be

fully present and being more mindful can help. This requires discipline to stay on task not
letting them is affected by nagging challenges or distracted by mental chatter. And it
requires skill to have the mental ability to stay laser focused and present.

1.2 OBJECTIVES
The major objective of this study was to determine the impact of leadership style
 in organization performance, the study was undertaken:
1. To find out if effective leadership will lead to the attainment of the organizational goal.
2. Determine how leadership style will motivate employee.
3. To analyse the impact of leadership on organization growth and development .
4. To ascertain how leader are improving work place effectiveness.
5. To determine why most leaders are incompetent in their skills.

1.3 RESEARCH METHODOLOGY

This study employs a mixed –methods approach, utilizing both primary and secondary
data to achieve a comprehensive understanding of the research topic
DATA COLLECTION:
o PRIMARY DATA: primary data was collected through structured
questionnaires administered during physical visit to respondents working in
the relevant industry. The questionnaire was designed to gather quantitative
data on demographic, job roles, and perceptions related to the industry.
Respondents were approached in their workplace setting to enhance
participation and ensure clarity in responses. A total of 60 completed
questionnaires were collected, providing insight into the demographics and
engagement levels of the workforce

o SECONDARY DATA: secondary data was gathered from annual reports of

the industry. These reports provided essential background information,
including industry trends, financial performance, and key challenges faced
by organization. This data
was analyzed to contextualize the finding from the primary research and to
compare them with established benchmarks and historical trends within the
industry.
o SAMPLE SIZE: 60
1.4 LIMITATION OF STUDY
The following limitation are inherited in the study
 The sample of 60 respondents may not represent the entire workforce.
 Selection bias may arise from choosing respondents during physical visits.
 Response bias could occur, leading to socially desirable answers.
 Reliance on self-reported data may introduce inaccuracies.
CONCLUSION:
Hey all seem to stress that success demand that a leader adopts the style of leadership
appropriate to the organization at a given situation. A style that will suits the situation
and welcome by most of the members of the organization is assumed to be the best.

Finally, it has been recognized in the world that "leadership" supplement the machines of
organizational set up; it provides the variable software for puling entire establishment
along.
CLASSIFICATION OF FINANCIAL RATIO:

S. Type of
Significance
No. Ratio
These are measures of the short-term ability of the
Liquidity
1 company to pay its debts when they come due and
Ratios
to meet unexpected needs for cash
Profitability These indicate the company's operating success i.e.
2
Ratios profitability
These indicate how well the company’s assets are
3 Activity Ratios
managed
Leverage These indicate how much of debt has been used to
4
Ratios finance various investment in different assets
(Table No.1.1)

Features of ratios:-
1) Liquidity ratios concerned with the short term solvency of the concern or
its ability to meet financial obligation on their due dates.
2) Profitability ratios concerned with the profitability of the concern.
3) Activity ratios concerning efficiency of management of various assets by
the concern.
4) Leverage ratios concerning stake of the owners in the business in relation
to outside borrowings or long term solvency.
 1) Funds Flow analysis:
Funds flow analysis has become an important tool in the analytical kit of financial
analysis, credit granting institutions and financial managers. This is because the
balance sheet of the business reveals its financial status at a particular point of time. It
reveals the changes in working capital position. It tells about the sources from which
the working capital was obtained and the purpose for which it was used. It brings out
the changes, which have taken place behind the balance sheet. The information it
contains in the selection, reclassification and summarization of the data contained in
profit and loss account and balance sheet, it is no way replacement of either these
statements. To provide a comparative view of movement of funds by the statement of
changes in financial position is prepared for the period covered by the profit and loss
account as well as the corresponding previous period.
The funds flow statement is a statement in which shows on one hand the sources from
where the funds have been generated and where they have been applied on the other
hand. If these statements are analyzed over a period of time, they clearly show the
sources from where the past activities were financed and also highlight the uses of the
funds. The objectives of a funds flow statement can be summarized as follows:

(i) To help to understand the changes in asset as well as asset sources which are not
revealed by the income statement or balance sheet.

(ii) To find out the uses of loans raised by the business.

(iii) To indicate the financial strength and weakness of the business.

Basically when university considered purpose and future accomplishment of project
(Research) study, the completion of project doesn’t matter, purpose is to analysis and
obtain real working and intellectual knowledge.
Individually the purpose of my project report is to analysis the co-operative
sugar industry in India by the way of financial analysis. Since the co-operative sugar
and other industries focus only, “Progress through self help” but some time they not
achieve this. My study is to analysis a particular co-operative sugar industry and
makes suggestions and future financial goals.
 Since initiation and currently the co-operative industry in India is based upon
co-operative approach. This traditional approach is unable to generate the desired
benefits and results, hence mostly co-operative institution are in a state of loss and
dependent on the donor agencies and governmental bodies to run their state of affairs
project (Research) study goes for finding reasons and make suggestion for this
particular co-op. sugar factory.

Every financial manager is involved in financial decision making and financial

planning in order to take right decision at right time, he should be equipped with
sufficient past and present information about the firm and its operations and how it is
changing overtime. Much of this information that is used by financial manager to take
various decisions and to plan for the future is derived from the financial statements.
The project, “financial Statement Analysis and interpretation of A.S.S.K.Ltd.
using the Ratio Analysis” focuses to analyze the financial statements and to study
different ratios over the period of 3 years to determine the financial position of
A.S.S.K.Ltd.Ashoknagar. Financial analysis involves the use of various financial
statements. These statements do several things. First, the balance sheet summarizes
the assets, liabilities and owners equity of a business at moment in time, usually the
end of a year or a quarter. Next the income statement summarizes the revenues and
expenses of the firm over a period of time while balance sheet represents a snapshot
of the firm s financial position at a moment in time.
Financial management is planning and controlling of financial resources of a
firm with a specific objective. Since, financial management as a separate discipline is
of recent origin, it is still in a decline stage. It is very important for an organization to
manage its funds effectively and efficiently.
Financial management has assumed greater importance today as the financial
strategies required to survive in the competitive environment have become very
important. In the financial markets also new instruments and concepts are coming and
one must say that a finance manager of today is operating in a more complex
environment. A study of theories and concepts of financial management has therefore
become a part of paramount importance for academics as well as for practitioners but
there are many concepts and theories about which controversies exist as no
unanimous opinion is reached as yet.
 The project,” Financial Statement Analysis and interpretation of A.S.S.K.Ltd.
using the Ratio Analysis Tool and fund flow analysis” further aims at discussing and
understanding the concepts of financial management of A.S.S.K.Ltd; the functions
expect to be performed by the financial management as well as the objectives of
financial managements.

Nature of financial statement Analysis:

Financial Statement Analysis consist of the application of analytical tools and

techniques to the data in financial statements in order to derive from them
measurements and relationships that are significant and useful for decision making.
The process of financial analysis can be described in various ways, depending on the
objectives to be obtained. Financial analysis can be used as a preliminary screening
tool in the selection of stocks in the secondary market. It can be used as a forecasting
tool for future financial conditions and results. It may be used as a process of
evaluation and diagnosis of managerial, operating or other problem areas. Above all,
financial analysis reduces reliance on intuition, guesses and thus narrows the areas of
uncertainty that is present in all decision making processes. Financial analysis does
not lesson the need for judgment but rather establishes a sound and systematic basis
for its rational application.

SELECTION OF TOPIC FOR STUDY

Topic selection is of the most or one of the important aspects of our project.
As it decide the course of action, to be followed. The topic selected should be such
that it helps in understanding the ratio concepts clearly, as was given the topic by the
organization itself.
The topic given by my project guide was “RATIO ANALYSIS” this covers all the things
related to the ratio analysis provided by the organization
RESEARCH METHODOLOGY

“Research is the plan, structure and strategy of investigation conceived so as to obtain

answer to research question and control variance,
It acts as base for the collection, measurement and analysis of data.”

2.1) TYPE OF RESEARCH

I have use the qualitative research method for my project work.

Qualitative Research

In the qualitative research often uses projective technique designed attitudes,

opinions, feeling & experiences. Among these techniques are word or picture
associations, sentence, completion. Participant preparation and actual qualitative
session themselves often include various creativity session and exercise.
Qualitative Research is collection, analyzing, and interpreting data by
observing what people do and say. Whereas, quantitative research refers to count and
measures of the meanings, concepts, definition, characteristics, metaphors, symbols,
and descriptions of things.

2.2) METHOD OF DATA COLLECTION

There are mainly two methods used for data collection

1) Primary data
2) Secondary data

PRIMARY DATA COLLECTION METHOD

Data that is collected that for the specific purpose at hand is called primary
Data. Following methods are used to do this project.

. SECONDARY DATA COLLECTION METHOD

Secondary data highlights the contextual familiarities for primary data collection. It
provides rich insight into the research process.
Secondary data is collected through following sources.

INTERNET:
The data containing information regarding ratio analysis,formulae,figures,charts
diagrams,etc.is been picked up from the internet, through Google search engine.

Publish Source:
  The secondary data is collected with help of documents available with the
company. i.e Balance sheet (Asset and Liability)
 It include Annual report of the company, Accounting and Financial
Records, Records from Finance Manager etc. Most of the information was
collected through the secondary data.
.
Data Processing and Analysis-

This is the next step in study where the collected data was arranged in sequential and
appropriate manner. Here, data was first edited followed by data classification and
tabulation.
In interpretation of data ,inferences were drawn from data analyzed.
CONCEPTUAL BACKGROUND
The term used for financial statement analysis and interpretation as follows.
1) Financial statement:-
Financial statement includes the profit & loss account or income and
expenditure account and balance sheet. These statements are prepared to show the
results of operations during a period through the profit and loss account and the
financial position as at the end of that period through the balance sheet. The financial
statement is summarized account of the transactions of the organization for and at the
end of particular period.

2) Financial statement analysis:-

Analysis of financial statement means a systematic and specialized
treatment of the information found in financial statements so as to drive e useful
conclusion on the profitability and solvency of the business entity concerned.
Financial statement analysis is largely a study of relationship among
the various financial factors in a business as disclosed by era single set of statement
and study of the trends of these factors as shown in a series of statement

Importance of the Financial Analysis:

1) It helps in diagnosis of financial health of the firm for the management,
creditors, lending institutions and finally the investors.
2) It helps in evaluation of the financial performance of the company of past,
present and anticipated future.
3) It tries to identify the firm's financial strengths and weaknesses and provides
the essential foundation for financial decision making and planning.
4) Investors are guided in their decisions on the basis of analysis which helps
them to know the earnings potential of the company and the safety of their
investments.
 5) Lending organization is more interested in knowing whether the company
would be able to honor its financial commitments. Thus creditworthiness can
be easily judged through financial analysis .It helps in judging the liquidity
position and the solvency of the business enterprise.
The Principal Tools of Analysis:

In the analysis of financial statements, the analyst can have a variety of tools on hand
from which he can choose the best suited to his specific purpose. The following are
the important tools of analysis.

THE PRINCIPLE TOOLS/ TECHNIQUES

OF FINANCIAL ANALYSIS

RATIO FUNDS FLOW CASH FLOW TREND

ANALYSIS ANALYSIS ANALYSIS ANALYSIS
 CANE

PREPARATION (KNIVES AND FIBRIZOR)

MILLING

RAW JUICE

HEAT (70oC)

SULPHITATION (SO2 & MILK OF LIME ADITION PH=7.0)

HEAT (102OC)

CLARIFIER (SETTLER)

EVAPORATION (CONCERNTRATION)

SYRUP

SULPHITATION (SO2 GAS ADDITION PH=5.0)

VACCUM PANS (GRYSTALLISATION)

MASSECUITE

CRYSTALLISERS

CENTRIFUGALS

SUGAR

GRADING

BAGGING
 CHAPTER- II

COMPANY PROFILE
2.1 OVERVIEW OF SHREE RENUKA SUGARS LIMITED

Shree Renuka Sugars Limited is a leading Indian

agribusiness and renewable energy company with a
diverse portfolio focused on the sugar, ethanol, and
power sectors. Headquartered in Mumbai, the
company is a major player in the country's sugar
industry, with a significant presence across the
value chain from sugarcane farming and
procurement to sugar manufacturing and refining.
Established in 1995, Shree Renuka Sugars has grown to become one of the largest
sugar producers in India, with a strong reputation for innovation, efficiency, and
sustainability. The company operates modern, state-of-the-art manufacturing facilities
across several states, leveraging advanced technologies and processes to ensure a
consistent supply of high-quality sugar and other products to its customers. Its
manufacturing facility of the Company is in Munoli, Athani&Havalgah, Karnataka
and operate three leased facilities at Ajara&Arag in Maharashtra and at Aland in
Karnataka. It has largest sugar refining capacity in India of 4000 Tons per Day (TPD).

The Company is principally engaged in manufacturing and refining of sugar, ethyl

alcohol, ethanol, generation and sale of power. An 11.2 MW cogeneration plant of the
company was commissioned in the year 2000 for producing electricity from the
Bagasse. SRSL had installed a distillery in the year 2002 with a capacity of 60 KL at
our Munoli unit for manufacture and production of Ethanol.
During the year 2003, the company added an additional turbine and boiler, increased
its co- generation capacity of power from 11.2 MW to 20.5 MW. Also SRSL had
installed a sugar refinery in the identical year of 2003 at Munoli unit with a capacity
of 250 TPD.
The Company incorporated and registered Renuka Commodities DMCC as a
subsidiary Maharashtra company during the year 2004 in the Free Trade Zone in
Dubai, United Arab Emirates to carry on the business of wholesale trading of sugar in
the International market.

2.2 VISION AND MISSION

 Munavalli, Tq: Saundatti,Dist: Belagaum.

VISION: To emerge as a globally renowned leader in the sugar industry by

leveraging innovation, sustainable practices, and operational excellence. They aim to
consistently deliver superior value to their stake holders , including customers,
employees, shareholders, and the communities they serve. Their vision encompasses
setting industry benchmarks through technological advancements, fostering a culture
of continuous improvement, and adhering to the highest standards of ethics and
corporate governance. Through these efforts, they strive to contribute positively to the
environment, society, and economy, thereby reinforcing their position as a trusted and
responsible global player in the sugar sector.

MISSION:Shree Renuka Sugars Limited is to uphold leadership in the sugar industry

through a commitment to operational excellence, customer satisfaction, innovation,
sustainability, ethical conduct, employee development, and stakeholder value creation.
They aim to achieve and maintain the highest standards of efficiency, productivity,
and quality in sugar manufacturing while exceeding customer expectations with
superior products and service. Innovation drives our continuous improvement in
technology and processes, ensuring we remain at the forefront of the industry.
Sustainability is core to our business, guiding our efforts to minimize environmental
impact and benefit communities. They conduct all operations with integrity,
transparency, and respect for ethical standards. Their employees are central to our
success, and we prioritize their development, safety, and well-being. Ultimately, they
aim to generate sustainable value for our shareholders and stakeholders, contributing
positively to society and reinforcing our position as a trusted global leader in the
sugars ector.
2.1 HISTORY
o Humble Beginning (1995)
Shree Renuka Sugars Limited was founded in 1995 by visionary entrepreneur
NarendraMurkumbi. Starting with a single sugar mill in Belgaum, Karnataka, the
company quickly established itself as a rising force in India's sugar industry. Driven
by a commitment to innovation and operational excellence, Shree Renuka Sugars
steadily expanded its footprint, acquiring additional mills and diversifying into related
sectors like ethanol production and power generation.
o Rapid Expansion (1995 - 2010)
In the following decade, Shree Renuka Sugars underwent a rapid transformation,
becoming one of the largest sugar producers in India. Through a series of strategic
acquisitions and greenfield projects, the company grew its manufacturing capacity and
integrated operations across the value chain. This period saw the company establish a
strong presence in major sugarcane-producing states like Maharashtra, Karnataka,
Uttar Pradesh, and Gujarat.
o Global Ambitions (2010 - Present)
Building on its domestic success, Shree Renuka Sugars embarked on an ambitious
global expansion strategy in the late 2000s. The company acquired sugar mills and
refineries in Brazil, strengthening its position in the world's largest sugar-producing
region. This international foray allowed Shree Renuka Sugars to leverage economies
of scale, diversify its revenue streams, and contribute to its status as a leading player
in the global sugar and ethanol markets.

.
 SHREE RENUKA SUGARS LIMITED BOARD OF DIRECTORS

Mr.ATUL CHATURVEDI Mr. VIJENDRA SINGH Mr. RAVI GUPTA

EXECUTIVE CHAIRMAN EXECUTIVE DIRECTOR EXECUTIVE DIRECTOR
& DEPUTY CEO

Mr. KUOK KHOON HANG

NON-EXECUTIVE DIRECTOR
Mr. NARENDRA M
VICE CHAIRMAN Mrs. PRIYANKA MALIK
INDEPENDENT
DIRECTOR
BUSINESS SEGMENT:
Shree Renuka Sugars Limited operates a diversified business model, leveraging its expertise
across the sugar value chain and related sectors. The company's core business

Segments include:
1. Sugar Manufacturing and Refining

As one of the largest sugar producers in India, Shree Renuka Sugars operates state-of-the-art
sugar mills and refineries across several key sugarcane growing states. The company utilizes
advanced technologies and efficient processes to manufacture a wide range of high-quality
sugar products, catering to a diverse customer base that includes industrial, commercial, and
retail consumers.
2. Ethanol Production

Recognizing the importance of renewable energy, Shree Renuka Sugars has invested
significantly in establishing ethanol production facilities. These facilities leverage the
company's sugarcane resources to produce ethanol, a clean-burning biofuel that is blended
with gasoline to reduce dependence on fossil fuels and promote environmental sustainability.
 3.Power Generation

The company's sugar mills are equipped with cogeneration plants that utilize bagasse, a
byproduct of the sugar manufacturing process, to generate clean, renewable power. This
power is not only used to meet the company's own energy needs but is also sold to the state
electricity grids, contributing to India's overall energy mix and supporting the nation's
transition towards a more sustainable energy future.

MANUFACTURING FACILITIES

Shree Renuka Sugars Limited operates a network of state-of-the-art manufacturing facilities

across several key sugarcane-producing states in India. These modern, integrated facilities
leverage advanced technologies and efficient processes to ensure the consistent production of
high-quality sugar, ethanol, and power.
The company's manufacturing footprint includes over 10 sugar mills and refineries, equipped
with the latest machinery and equipment to optimize yield, enhance productivity, and
maintain stringent quality standards. Each facility is designed to handle the entire sugar
production lifecycle, from sugarcane crushing and juice extraction to sugar crystallization,
drying, and packaging.
In addition to the core sugar manufacturing operations, Shree Renuka Sugars' facilities house
integrated ethanol distilleries that convert molasses, a by product of the sugar process, into
clean-burning biofuel. These on-site ethanol plants not only contribute to the company's
diversified revenue streams but also support India's broader efforts to promote sustainable
energy solutions.
SUGARCANE FARMING AND PROCURMENT

At the heart of Shree Renuka Sugars' operations lies its deep-rooted connection to the
agricultural community. As a leading player in India's sugar industry, the company
places great emphasis on fostering strong relationships with local sugarcane farmers
and ensuring a reliable, high-quality supply of this essential raw material.
Shree Renuka Sugars' comprehensive sugarcane farming and procurement practices
have been instrumental in the company's success and its ability to maintain a
consistent supply of sugar to its customers.
The company works closely with thousands of smallholder sugarcane farmers across
its operational regions, providing them with extensive support and resources. Shree
Renuka Sugars' dedicated agricultural extension services offer farmers access to
cutting-edge agronomic practices, advanced farming techniques, and innovative
technologies to enhance crop yields and improve overall productivity. This includes
the distribution of high-yielding sugarcane varieties, the implementation of precision
farming methods, and the promotion of sustainable water management practices to
ensure the long-term viability of the sugarcane ecosystem.
In addition to technical assistance, Shree Renuka Sugars also plays a vital role in
ensuring fair and timely payments to its farmer partners. This commitment to fair and
equitable practices has fostered a deep sense of trust and loyalty among the farming
community, who view Shree Renuka Sugars as a reliable and supportive partner in
their agricultural endeavour. This seamless integration of farming, logistics, and
production allows Shree Renuka Sugars to maintain a consistent supply of high
quality sugarcane, ensuring the uninterrupted operation of its mills and the consistent
production of its range of sugar and related products.
 RESEARCH AND DEVELOPMENT

PIONEERING ENHANCING DIVERSIFYING

INNOVATION PRODUCTIVITY PRODUCT PORTFOLIO

At the heart of Shree Renuka Shree Renuka Sugars' R&D In addition to operational
Sugars' sustained success lies efforts are primarily focused improvements, Shree Renuka
its unwavering commitment on enhancing the productivity Sugars' R&D team is also
to research and development. and sustainability of its dedicated to diversifying the
The company has established operations. company's product portfolio.
a state-of-the-art R&D center Through extensive field By leveraging its
that brings together a trials, process optimizations, deep understanding of the
talented team of scientists, and the adoption of Industry sugar and related industries,
engineers, and agronomists, 4.0 technologies, the the team is exploring
dedicated to developing company's researchers are the development of
cutting-edge technologies working to maximize the value added products, such
and processes that drive yield and extraction rates of as specialty sugars, high
innovation across the sugar, sugar, ethanol, and power purity ethanol for
ethanol, and power sectors. from the sugarcane pharmaceutical applications,
From pioneering new feedstock. and bio based chemicals
sugarcane varieties to This includes developing derived from sugarcane
optimizing production advanced process control waste streams.
efficiency and exploring systems, implementing This diversification strategy
renewable energy solutions, precision farming techniques, not only enhances the
the R&D team is constantly and exploring innovative company's revenue streams
pushing the boundaries of cogeneration technologies to but also positions Shree
what is possible in the optimize energy efficiency Renuka Sugars as a leader in
industry. and reduce the company's the growing bio economy.
environmental footprint
SUSTAINABILITY INITIATIVES

Circular Economy
Shree Renuka Sugars is committed to implementing a circular economy approach
across its operations. The company works to minimize waste by repurposing and
recycling by products from the sugar manufacturing process, such as bagasse and
molasses, to generate renewable energy and develop value-added products like
ethanol and high purity chemicals.
Water Stewardship
Recognizing the critical importance of water resources, Shree Renuka Sugars has
implemented robust water management strategies at its facilities. This includes
advanced water treatment and recycling systems, precision irrigation techniques for
sugarcane cultivation, and the adoption of cutting-edge technologies to minimize
freshwater withdrawal and enhance water use efficiency.
Renewable Energy
Shree Renuka Sugars is at the forefront of the renewable energy transition in India,
with a strong focus on leveraging its sugar production by products to generate clean,
sustainable power. The company's state of-the-art cogeneration plants utilize bagasse,
a fibrous residue from the sugarcane crushing process, to produce electricity that is
fed into the regional power grids, contributing to the nation's renewable energy mix.
Carbon Mitigation
Shree Renuka Sugars has implemented comprehensive carbon management strategies
to reduce its environmental impact and contribute to the global fight against climate
change. This includes investments in energy-efficient technologies, the adoption of
sustainable agricultural practices, and the exploration of innovative carbon capture
and sequestration solutions to minimize the company's overall carbon footprint.
FINANCIAL PERFORMANCE
Social Responsibility
Shree Renuka Sugars Ltd. is committed to giving back to the communities where it
operates. The company has various social responsibility initiatives that focus on
education, healthcare, and the environment. The organization’s social responsibility
efforts have a positive impact on the communities it serves and enhance employee
engagement and pride in the organization.
Health and Wellness Programs
Shree Renuka Sugars Ltd. places a high value on the health and wellness of its
employees. The company offers various wellness programs, such as yoga and
meditation classes, health check-ups, and fitness programs.
Employee Assistance Program (EAP):Their EAP provides confidential counseling and
support services to our employees and their families to help them deal with personal and work-
related issues. Wellness Program:
Their wellness program focuses on promoting healthy lifestyles and preventing illnesses.
They offer regular health check-ups, fitness activities, and nutrition counseling to
our employees. The organization also promotes a healthy work-life balance, encouraging
employees to take time off to recharge and spend time with their families.
 CHAPTER – IV

DATA ANALYSIS AND

INTERPRETATION
 1) PROFITABILITY RATIO:-
1.1) Gross Profit:-

Gross Profit ratio is the ratio that is calculated as the difference between
Net sale and cost of goods sold. This ratio shows the margin left after meeting the
Purchase and manufacturing costs. It measures the efficiency of production as well as
Prizing. A high gross profit ratio means a high margin for covering other expenses
like Administrative, selling and distribution expenses, i.e. other than the cost of goods
sold. There fore, higher the ratio, the better it is. It is also important for a business to
maintain This ratio on a higher side, otherwise it will be difficult to cover other
expenses. Intra-firm comparison can also be done with the help of Gross Profit ratio.

Formula:-

GROSS PROFIT
GROSS PROFIT RATIO =-------------------------- * 100
SALES

YEAR GROSS PROFIT NET SALES GROSS PROFIT

RATIO
2020-21 55.64 543.26 10.24

2021-22 113.07 6125.94 1.845

2022-23 135.73 8578.14 1.582

2023-24 559.51 10832.73 5.164

2024-25 255.80 10279.40 2.488

 GROSS PROFIT RATIO
12

10

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

Interpretation:-

As the companies gross profit ratio is increasing in the financial years. It

means the company has success to maintain the margin of covering the
administrative, selling and distribution expenses. The company shows the higher
gross profit ratio hence it shows that its financial position is good.
NET PROFIT :

This ratio shows the earnings left for shareholders as a percentage of net
sales. It measures overall efficiency of all the functions of a business firm like
production, administration, selling, financing, pricing, tax management etc This ratio
is very useful for prospective investors because it reveals the overall profitability of
the firm. Higher the ratio, the better it because it gives an idea of overall efficiency of
the firm

Formula: -

NET PROFIT
NET PROFIT =---------------------------*100
RATIO SALES

YEAR NET PROFIT NET SALES NET PROFIT

RATIO
2020-21 0.26 543.36 0.47

2021-22 0.53 6125.94 0.85

2022-23 0.64 8578.14 0.47

2023-24 2.63 10832.73 0.24

2024-25 1.20 10279 0.16

 NET PROFIT RATIO
0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

Interpretation:-
As the higher Net profit ratio indicates the good performance & efficiency of the
company. The main reason of increasing performance is inflation in price of sugar.

1.2 Return on Equity:

This ratio also known as return on shareholder’s fund or return on proprietor’s
funds or return on net worth indicates the percentage of net profit available for
equity shareholders to equity shareholder’s fund. In other words, this ratio
measures the return only on equity shareholders fund & not on total capital
employed like ratio number (v).

Formula: -
NET PROFIT(AFTER TAX & DIVIDEND
RETURN ON EQUITY=--------------------------------------------------------* 100
EQUITY SHAREHOLDERS FUND
 Note: - Equity shareholders fund = Equity capital + Reserves & surplus

This ratio indicates the productivity of the owned funds employed in the firm.
However, in judging the profitability of a firm, This ratio indicate whether the amount
of capital employed is properly utilized or not. Higher the ratio, more efficient use of
capital employed, the better will be the managerial efficiency and profitability of
business.
YEAR NET PROFIT EQUITY RETURN ON
SHARHOLDERS EQUITY
FUND
2020-21 0.26 212.85 0.12
2021-22 0.53 212.85 0.24
2022-23 0.64 212.85 0.30
2023-24 2.63 212.85 1.23
2024-25 1.20 212.80 0.53
 RETURN ON EQUITY
0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

Interpretation: -
As we can see in the above chart in financial year 2021-22, the
company had very good returns as compare to 2020-21.so the graph shows the higher
percentage in 2021-22.The reason behind it is increasing performance is inflation in
price of sugar.
 RETURN ON TOTAL ASSETS:

Return on total assets relates net profit to total tangible asset. It measures how profitably the firm
has used its assets. It suggests contribution of fixed assets in the overall profitability of the
business.

FORMULA:

NET PROFIT ( AFTER TAX )

RETURN ON TOTAL ASSET= *100
TOTAL ASSET

YEAR NET TOTAL ASSETS RETURN ON

PROFIT(AFTER TOTAL ASSET
TAX)
2020-21 0.26 7040.21 0.36
2021-22 0.53 7076.92 0.74
2022-23 0.64 7494.40 0.85
2023-24 2.63 9948.74 0.26
2024-25 1.20 8660.20 0.13
 RETURN ON TOTAL ASSETS
0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

Interpretation: -
The Return on total asset means the ratio of Net profit after tax
to total asset. The higher the ratio good for the company. In the above figure
the ratio is increasing figure. i.e. graph shows upward position hence it shows
satisfactory position of company.

2) FINANCIAL RATIOS:-

2.1) Current Ratio:-

This ratio indicates the company’s ability to meet current
liabilities. All current asset cannot be converted immediately into cash for a number
of reasons so for maintain goodwill of firm, in respect payment of liabilities, some
provision had to be made. Therefore the amount of current assets must be higher than
the amount of current liabilities.
Formula: -

CURRENT ASSET
CURRENT RATIO = -----------------------------------------
CURRENT LIABILITIES

Current ratio indicates the availability of current Assets against current

liabilities Higher the ratio the better the coverage. Traditionally, it is also called 2:1
ratio i.e. 2 is the standard for current assets for each unit of current liabilities.
Generally, the level of current ratio very from differs from the industry ratio because
of its policy.

YEAR CURRENT CURRENT CURRENT

ASSETS LIABILITY RATIO
2020-21 3034.39 4202.36 0.72
2021-22 2612.59 3578.18 0.73
2022-23 2857.35 3806.80 0.75
2023-24 5016.07 6501.94 0.77
2024-25 3866.90 5639.30 0.68
 CURRENT RATIO
0.78

0.76

0.74

0.72

0.7

0.68

0.66

0.64

0.62
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

INTERPRETATION:

In financial year 2023-24 current ratio is 1.93 means it very close to

standard, but in 2021-22 it reduce up to 1.54 it shows poor position of company & in
year 2022-23 it increase up to 1.7 .
Hence it means that liability of company is increase mover than increase
the assets of the company .Hence it shows that the position of company in terms of
current ratio is getting weaken.
1.1) Liquid / Quick / Acid Ratio: -

This ratio is a better tool to measure the ability to honor day-to-day

commitments. It is ratio between the liquid Asset & liquid liabilities. From the
Balance sheet, deducting inventories & prepaid expenses from current asset calculate
liquid asset. Liquid liabilities are current liabilities less bank overdraft.

Formula: -

LIQUID ASSET
LIQUID ASSET =-------------------------------------
LIQUID LIABILITIES
LIQUID
ASSET= Current asset – Inventory – Prepaid expenses

LIQUID LIABILITIES= Current liabilities - Bank overdrafts

The ideal liquid ratio is considered to be 1:1, which means that liquid current
assets should be equal to the liquid liabilities. This ratio indicates whether the firm has
the ability to pay its short-term liabilities or not.

YEAR LIQUID ASSET LIQUID LIABILITY LIQUID RATIO

2020-21 21.23 1933 0.10

2021-22 22.23 2637 0.84

2022-23 22.23 5199 0.42

2023-24 167.03 7988 0.20

2024-25 37.87 7079 0.53

 LIQUID RATIO
180

160

140

120

100

80

60

40

20

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

Interpretation: -

The quick ratio means the ratio between liquid Assets to liquid
Liabilities. The ideal ratio is 1: 1 that is the liquid Asset should equal to liquid
liabilities. But in the above figure it is quite more. the liquid assets one mover than it
is needed. Hence there is the excess investment in liquid Asset.
 PROPRIETARY RATIO:

It is primarily the ratio between the proprietors funds and total asset. This is a
variant of the debt-to-equity ratio. It is also known as equity ratio or net worth to
total assets ratio. This ratio relates the shareholder's funds to total assets.
Proprietary / Equity ratio indicates the long-term or future solvency position of the
business. A higher percentage denotes the stronger the financial position of the
enterprise.,

Formula:-

PROPRIETORS FUND
PROPRIETORY RATIO=------------------------------------
TOTAL ASSET

YEAR PROPRIETARY TOTAL ASSETS PROPRIETART

FUND RATIO
2020-21 213 7040.21 0.30

2021-22 213 7076.92 0.30

2022-23 213 7494.40 0.28

2023-24 213 9948.74 0.21

2024-25 213 8660.20 0.24

 PROPRIETORY RATIO
0.35

0.3

0.25

0.2

0.15

0.1

0.05

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

INTERPRETATION:

This ratio indicates the proportion of proprietors fund used for financing the total ratio. It is
decrease that ratio is less in 2023-24.but in next two years it is increased from 0.30 & 0.27
respectively. it is good sign for company. But company have to concentrate to improve there
propriety ratio.

Debt equity ratio:-

This ratio is calculated to measure the comparative proportion of
borrowed funds & shareholders’ funds invested in the firm. A firm raises funds
through owned funds, which are also called as shareholders’ funds or proprietors’
funds as well as borrowed funds. The normal standard norm for such ratio is 2:1.

Formula:-

LONG TERM DEBT

DEBT EQUITY RATIO =--------------------------------
SHAREHOLDERS FUND
 YEAR LONG TERM SHAREHOLDERS DEBT EQUITY
DEBT FUND RATIO
2020-21 2565.9 215.61 11.90

2021-22 2755.6 546.98 5.03

2022-23 3057.9 412.65 7.41

2023-24 3231.0 145.68 22.17

2024-25 3128.6 390.50 8.01

DEBT EQUITY RATIO

25

20

15

10

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

Interpretation:-
Debt to total equity ratio of Shree Renuka Sugar LTD is decreasing year by
year. in 2021-22 i.e.0.85,0.70&0.50 respectively. This is good indicator for
business. Our evaluations of the debt to total equity ratio suggest that ASSSK
Ltd debt to total equity is currently lower than the previous year.
 1.1) Current asset to fixed asset:-

This ratio shows the proportion of current assets to fixed assets. As

described in current ratio, current assets are held for converting them into cash in
a short period of time while fixed assets re held for long term purposes,

Formula:-
CURRENT ASET
CURRENT ASSET TO FIXED ASSET RATIO=- ------------------------
FIXED ASSET

YEAR CURRENT FIXED ASSETS CURRENT

ASSETS ASSETS TO
FIXED ASSETS
RATIO
2020-21 3034.39 3614.24 0.83

2021-22 2612.59 4061.76 0.64

2022-23 2857.35 4276.15 0.66

2023-24 5016.07 4201.34 0.19

2024-25 3866.90 4097.00 0.94
 CURRENT ASSETS TO FIXED ASSET
1.4

1.2

0.8

0.6

0.4

0.2

0
2020-21 2021-22 2022-23 2023-24 2024-25

Series 1 Series 2 Series 3

Interpretation:
Current asset to fixed asset ratio in 2021-22 is 1.45,in 2020-21 it get
down up to 1.42 but in 2023-24 it goes on up to 2.02 .It means company start
utilized its fixed assets properly.
 CHAPTER 4
FINDINGS

FINDINGS:
 . Following are the Finding I observed during this Project / Study.

RATIO ANALISIS

1) PROFITABILITY RATIO :

 The ratio of Gross Profit to Sales has reduced in 2017-18 due to decrease in
sales price, but in the year 2018-19 & 2019-20 gross profit ratio shows
increasing trend because of increase in sales price of sugar & other products.

 Net profit ratio during financial year 2017-18 was 0.33 % But in year 2018-
2019 it is 2.67% and in year 2019-2020 it is rising up to 10.53% it is well &
good for the company
 Return on equity Ratio has shown poor result in the year 2017-18.but in
2018-19 there was some improvement up to 6.50%.and in year 2019-2020
ratio increased up to 35% because of increase in profit margin.

 Return on total asset ratio was increased by 1.44% in 2018-19 as compare to

2017-18 & in 2019-20 it goes to 7.44% means it increased by 5.87% as
compare to 2018-19 it shows the efficiency of Management. But for such a big
organization 7.44% is not a good profit ratio for maintain there daily exp’ &
long term exp’.

2) FINANCIAL POSITION
 Current Ratio is not constant and decrease all year. The current Ratio for
year 2017-18,2018-19,2019-20 is 1.93,1.51,1.70 respectively. It indicates
decrease in the current assets.
 Quick Ratio is used to the company’s ability to meet its current obligation. It
had decreased by 0.36 in 2018-19 as compare to 2017-18. In year 2019-20
some it improved by 0.22.but it is not satisfactory level.
 Proprietary ratio of the company is increasing proportion in all years. But it
is not as per standard.
 Debt equity ratio is showing slight decreasing proportion year to year of the
company .the ratio of the company for year 2017-2018 was 0.85, for year
2018-19 was 0.70 & for year 2019-2020 it is 0.50 It shows unsatisfactory
result.
 Current Asset to fixed asset ratio is increasing in year to year . Ratio has
shown decrease in year 2018-2019 from 1.45 to 1.42 as compares to year
2017-2018 in year 2019-2020 it is 2.02.
 CHAPTER 5

CONCLUSION

CONCLUSION
From this project & findings I reached some conclusion on the following points. I
have concluded that:

 From the overall study of company, gross profit ratio & Net Profit ratio are
constantly increasing in the financial years showing the good performance of
the company.
 It shows that company has success to maintain the margin of covering the
administrative, selling and distribution expenses.
 It seems that the position of the company’s current ratio is getting good.
 I can conclude that company’s financial position is a stable one and needs to
be improved continuously.
 The standard set by the company are benchmarking with the other company
but it having not that much potential to reaches the standards.
 The actual performance are not very much effective, it decreases the
companies performance

 The company itself responsible to complete the standard minimum

 CHAPTER 6
RECOMMANDATION

SUGGESTIONS AND RECOMMANDATION

 After the study of financial statement analysis in A.S.S.K. Ltd. following
suggestion and recommendations are made based on the data analysis and
interpretation of SHREE RENUKA SUGAR LTD.
 Company can cover its expenses like administrative by increasing its gross
profit ratio.

 Return on equity ratio shows satisfactory ratio in 2019-20.

 The net profit margins suggest that ASSK’s net income were earned for
each percentage of sales is lower than the industry average. So they should
increase their net profit volume.

 The current ratio of Shree Renuka Sugar LTD. is reducing because their
liability is more than asset so they can increase it by decreasing current
liability.

 Company has excess investment in liquid asset than needed so they have to
decrease their high investment in liquid asset. The ideal ratio is 1:1 that is the
liquid asset to liquid liabilities.

 Company has high reserve and Surplus they can use it for repayment of loan
to decrease interest burden which will have positive effect on Net Profit.
BIBILOGRAPHY
 BIBILOGRAPHY

 I.M.Pandey, Financial Management, Vikas publishing house (p)

ltd. Mumbai 2009.

 Prasanna Chandra ,Financial Management, Mc-Grew hill

Publishing company ltd,2008

 Sujit Sikider , H.C.Gautam, Financial Statement analysis, New

center book Agency (P) Ltd. Jan2006.
ANNEXURE
 ASHOK SAHAKARI SAKHAR

KARKHANA: BALANCE SHEET AS ON 31ST

MARCH 2017

(Fig in lacs)
CAPITAL AND SCH ASSET AND SCH
LIABILITIES NO. 31/0 PROPERTIES NO. 31/03/18
3/17
1)Authorized share 1) Cash and bank
capital 1 1025 balance
.00
a) Paid up capital 490. a) cash in hand 0.74
73
Reserve & surplus 2 263 b) cash at bank 10 342.
7.48 21
3)secured loan 3 2) Investment 11 148.
65
3)Advances & other
a) Capital(term)loan 233 Receivable
6.44
b)Working capital 475 a) Advances 12 2.03
loans 1.58
4)Unsecured loans 4 b)security Deposits 13 62.3
7
by product division 317. c)Other receivable
43
5)Deposits 5 931. i) sugar division 14 1606..76
71
6)Current liabilities &
provisions ii) By product 143.40
division
A) Govt. liabilities 6 91.7 4) Current asset
2
B) Recovery from
cane bills & others 7 319. a) store stock 15 385.53
20
C) Other liabilities b) sugar & by 16 5383.43
product
a)sugar division 8 169 5) fixed asset 17 3975.87
3.71
6) Preliminary capital
b)By product &other expenses
division
i) current dues 143. a) Ashok Bandhare 123.72
40
ii) Against b) Wage
Bills 5.06 board difference
Payable
D) provisions 9 393. 7)Profit & loss Account
18
E) provisions for
excise duty & sales Accumulated loss 2369.45
tax
i) sugar 331. Add: Current year's loss 00.00
93
Less: Current
ii) molasses 00.00 00.00
 year's Profit
iii) spirit & ethanol 6.24
iv) sales tax 1.98
7)Provisions for
interest payable 92.3
7

TOTAL 1454 TOTAL 14544.16

4.16

ASHOK SAHAKARI SAKHAR KARKHANA

 BALANCE SHEET ASA ON 31ST MARCH 2018

(Fig in lacs)
CAPITAL AND SCH ASSET AND SCH
LIABILITIES NO. 31/03/18 PROPERTIES NO. 31/03/19
1)Authorized share 1) Cash and bank
capital 1 1025.00 balance
a) Paid up capital 503.92 a) cash in hand 1.23
Reserve & surplus 2 2883.02 b) cash at bank 10 173.31
3)secured loan 3 2) Investment 11 156.70
3)Advances & other
a) Capital(term)loan 2133.4 Receivable
0
b)Working capital loans 3421.03 a) Advances 12 1.87
4)Unsecured loans 4 b)security Deposits 13 56.82
by product division 239.17 c)Other receivable
5)Deposits 5 877.70 i) sugar division 14 1045.92
6)Current liabilities &
provisions ii) By product 324.51
division
A) Govt. liabilities 6 175.18 4) Current asset
B) Recovery from cane
bills & others 7 93.67 a) store stock 15 282.15
56
C) Other liabilities b) sugar & by product 16 01.73
a)sugar division 8 2589.3 5) fixed asset 17 4121.12
9
6) Preliminary capital
b)By product division &other expenses
i) current dues 324.51 a) Ashok Bandhare 123.72
ii) Against b) Wage
Bills 5.01 board
Payable difference
D) provisions 9 413.50 7)Profit & loss Account
E) provisions for
excise duty & sales tax Accumulated loss 2369.46
i) sugar 258.47 Add: Current year's loss
ii) molasses Less: Current year's 220.61 2148.85
Profit
iii) spirit & ethanol 21.67
iv) sales tax 4.90
7)Provisions for interest
payable 93.39

TOTAL 14037.93 TOTAL 14037.93

 ASHOK SAHAKARI SAKHAR KARKHANA
BALANCE SHEET ASA ON 31ST MARCH 2019
 (Fig in lacs)
CAPITAL AND SCH ASSET AND SCH
LIABILITIES NO. 31/03/19 PROPERTIES NO. 31/03/20
1)Authorized share 1) Cash and bank
capital 1 2050.00 balance
a) Paid up capital 761.22 a) cash in hand 00.37
Reserve & surplus 2 3077.31 b) cash at bank 10 1218.6
5
3)secured loan 3 2) Investment 11 563.21
3)Advances & other
a) Capital(term)loan 1702.05 Receivable
b)Working capital loans 5960.00 a) Advances 12 1.93
4)Unsecured loans 4 b)security Deposits 13 49.18
by product division 198.00 c)Other receivable
5)Deposits 5 866.46 i) sugar division 14 1283.8
3
6)Current liabilities &
provisions ii) By product 433.89
division
A) Govt. liabilities 6 133.55 4) Current asset
B) Recovery from
cane bills & others 7 268.66 a) store stock 15 432.85
C) Other liabilities b) sugar & by 16 8717.66
product
a)sugar division 8 3991.28 5) fixed asset 17 4529.12
6) Preliminary capital
b)By product division 433.89 &other expenses
i) current dues a) Ashok Bandhare
ii) Against b) Wage
Bills 5.56 board difference
Payable
D) provisions 9 198.53 7)Profit & loss Account
E) provisions for
excise duty & sales tax Accumulated loss 2148.85
i) sugar 304.51 Add: Current year's loss
ii) molasses 00.00 Less: Current year's 1342.6 806.23
Profit 2
iii) spirit & ethanol 34.82
iv) sales tax 4.80
7)Provisions for interest
payable 96.28

TOTAL 18036.92 TOTAL 18036.92