workingCapital

                                              INTRODUCTION

A Project is pre planned under taking of related activities to attain an objective. This project was undertaken at Porus Technologies, Chennai has been Providing Products and service related to software industry .it offers a wide range of software services to customers in domestic and overseas

The efficiency of the organization has to be determined every year so that the organization would be in the position to improve their efforts in the next year, this study would help the organization to take corrective efforts in the right way at the right time .If the operations of a company are to run smoothly, a proper relationship between fixed capital and current capital has to be maintained. Sufficiently liquidity is important and must be achieved and maintained to provide that funds to pay off obligation as they arise of mature, the adequacy of cash and other current assets to gather with their efficient handling, virtually determine the survival or demise of the company.a.Businessman should be able to judge the accurate requirement of working capital and should be quick enough to raise the required funds to finance the working capital needs.

All organization has to carry working capital in one form or the other. the efficient management of working capital is important from the point of view of both liquidity and profitability. poor management of working capital means that funds are un necessarily tied up in idle assets hence reducing liquidity and also reducing the ability to invest in productive assets such as plant and machinery, so affecting the profitability

It is worth mentoring that a firm should have neither excess nor inadequate of working capital as both the phenomena of over capitalization and under capitalization of working capital generate adverse effects on the profitability and liquidity of the concerned firm. The effective working capital necessitates careful handling of current assets to ensure short term liquidity and solvency of the business.

This Project mainly deals with the financial Performance of the firm as well as working capital analysis. The Statistical tools also have been used in this project, the details Procedures of which have been explained of which have been explained in the consecutive section of this Project

Company Profile

About us

Porus Technologies is a software solution provider with a vision to develop Enterprise Information Systems (EIS) with a specific approach on the customer focus and need. Started with a professional approach to problem identification, analysis and solving, the team has also widened the scope of activities from Web based projects to Smart card solutions for enterprises.

Porus Technologies has the means and aspirations to become a leader in the IT Industry. It is presently into development, and also as services provider. Porus Technologies has its own sourcing unit and placement cells.

Be part of a global organization where you can serve some of the biggest and most prestigious brands in the market. Work with world-class teams to tackle new challenges every day. Take your career to where you want it to go. We are the centre of excellence for the business as we support existing technologies, pioneer new leading edge technologies and provide business services to make the Porus Technologies experience better, simpler and cheaper.

This unique IT + Business Services model provides a diverse growth opportunity and a variety of assignments across management, leading IT areas and customer service to its growing team of professionals.

Services

Porus Technologies’ Business Risk Services can show you how leading companies effectively manage risk to protect the value they have built-because we help them do it. Porus Technologies' Business Risk Services offers a suite of strategic, outsourcing, and industry-focused operational services that help companies around the world evaluate and enhance their internal process and risk management functions.

No matter where in the world you are located, there are two things you can count on from the services you receive from Porus Technologies’ high professional standards and the ability to deliver quality services..

Mission

While the reason for our existence is articulated by our Mission, reflects an aspiration to continually improve, to excel and be the best. Our values characterize us as an organization and guide our every action. The values which includes: Integrity and honesty, Ownership, accountability and result orientation, Customer centricity, Cost and profit consciousness, Transparency, Flexibility, Teamwork, Enthusiasm, Fostering innovation/change, Social consciousness. To help customers achieve their business objectives by providing innovative, best-in-class consulting.

Consultancy:

Porus Technologies offers expert consulting and mentoring to supplement and help guide your team. We specialize in hard-to-find object technology, web development and process skills, and we can provide a range of professionals, from seasoned developers to critical senior resources with years of real-world experience and accomplishments.

Our innovative staffing solutions are tailored to enable organizations meet the challenges of today's fast changing business environment. We work closely with clients to identify, engage, train and retain successful people that organizations would  need to create success stories. Our consultants are highly skilled and well versed in particular industry sectors and job categories enabling them to have a profound understanding of the assignments.

At Porus Technologies, people are our business. We have a talent pool, which is ready to take up assignments as per client requirements. Our ability to precisely understand the client requirements and the speed at which we deliver committed results along with our high ethical standards of work have contributed to the building of our reputation as the most trusted HR Services Company in India today

Information Technology Consulting

Porus Technologies specializes in providing technology experts to fill key roles that make a difference on your critical software projects. Porus Technologies’ consultants specialize in advanced technologies in the areas of Unified Process and Unified Modeling Language, Usability, Strategy and Management, Process, Requirements, Architecture, Programming, Quality Assurance and Tools.

Porus Technologies consultants are Highest quality, with skills and expertise equivalent the best and brightest in the industry Lower cost than consultants provided through higher-overhead operations.

financial analysis

     CONTENTS

                                                                                  Page.No.

CHAPTER – I

1.   Introduction to the Report

2.   Scope of the Study

3.   Objectives of the Study

4.   Limitations

5.   Research Methodology

CHAPTER – II

1.   Company Profile

CHAPTER – III

1.   Data Analysis and Interpretation

CHAPTER – IV

1.   Findings

2.   Suggestions

BIBLIOGRAPHY

INTRODUCTION TO THE STUDY

            Finance is regarded as the lifeblood of a business enterprise. Finance is one of the basic foundations of all kinds of economic activities. Finance function may be defined as the procurement of funds and their effective utilization. The funds should be managed properly and it is considered as the important function for a finance manager. This leads to effective managerial decisions and these decisions are analysed based ion expected inflows and outflows of funds and their effects upon managerial objectives. The main finance functions are investment decision, financing decision, dividend decision and liquidity decision.

            Business finance is that business activity which is concerned with the acquisition and conservation of capital funds in meeting financial needs and overall objectives of business enterprise.

FINANCIAL STATEMENT ANALYSIS

                A financial statement is an organized collection of data according to logical and consistent accounting procedures. These statements are prepared for presenting a periodical review or report on the progress by the management and deal with status of investments in the business and results achieved during the period under review.

                Financial analysis helps to pinpoint the strong points and weaknesses of the enterprise. According to Kennedy and Muller, “Analysis and interpretation of financial statements are an attempt to determine the significance and meaning of financial statement data so that forecast may be made of the prospects for future earnings, ability to pay interest and debt maturities and probability of a sound dividend policy.

Financial analysis helps in ascertaining whether adequate profits are being earned on the capital invested in the business and  to know whether the business is in a position to pay its short term and long-term liabilities in time. It also helps the management to make a comparative study of the profitability of various firms engaged in same trade and  in accessing whether the firm will have sufficient profits to pay the amount of interest in time and the capacity to pay the dividend in future at a higher rate.

SCOPE OF THE STUDY

            This study helps to know the financial position and future prospects of the company. Effective utilization of capital employed, efficient use of assets and improvement in financial position, inflows and outflows of cash, changes in working capital position can be understood from the financial statements.

financial ratio analysis case study

INTRODUCTION

Financial ratio analysis is an important topic and is covered in all mainstream corporate finance textbooks. It is also a popular agenda item in investment club meetings. It is widely used to summarize the information in a company's financial statements in assessing its financial health. In today's information technology world, real time financial data are readily available via the Internet. Performing financial ratio analysis using publications, such as Robert Morris Associates’ Annual Statement Studies, Dun & Bradstreet’s Key Business Ratios, Moody’s Manuals, Standard & Poor’s Corporation Records, Value Line Investment Survey, etc., is no longer efficient. Since students and investors now have easy access to on-line databases, the assignments on financial ratio analysis can be modified accordingly to enhance learning. Based upon my experience as a finance professor and as a member of a local investment club, I have prepared this  teaching note to help students and investors in performing financial ratio analysis via an on-line database, Dow Jones Interactive. This database is a Web based, enterprise wide business news and research solution supported by Dow Jones & Company, the parent company of The Wall Street Journal.  The class assignment presented herein is designed to demonstrate how to assess a company's overall operations over time and its current financial standing in the industry.

THE FINANCIAL RATIO ANALYSIS ASSIGNMENT

Students will work on the assignment collaboratively in groups of three or four students. Each group will select an industry of interest to the group, and each student will select a company within that industry. Students will download the relevant financial data from the Internet and perform ratio analysis for the selected companies. Since successful financial ratio analysis is as much an art as it is a science, students must use common sense and sound judgment throughout the analysis. The purpose of this assignment is to provide students with the opportunity to:

• retrieve real time financial data via the Web;
• analyze the financial performance of selected companies;
• practice communication skills, both in writing (through word processing) and in speaking (through giving a Power Point presentation);
• enhance teamwork skills.

TREND ANALYSIS

To evaluate how the selected company is performing over time, more than one year's financial ratios are required. Students are instructed to follow the path shown below to retrieve the financial profile for the selected company via Dow Jones Interactive. (The initial steps may differ depending on how your library's site is organized.)

• Go to the University Library home page
• Click on Research Resources
• Click on Dow Jones Interactive (DJI)
• On DJI page, click on Company and Industry Center
• Click on Financial Profile
• Select Region: Worldwide
• Enter Company Symbol: ____________
• Display as: Formatted report
• Click on Get Report
• Download the report including Key Financial Ratios, Balance Sheets, Income Statements and Key Competitors (see APPENDIX 1 for an excerpt Financial Profile of Intel)

Trend analysis provides signals as to whether the company's financial health is likely to improve or deteriorate. Each student will perform the trend analysis based upon the following financial ratios:

• Leverage Ratios: to measure the extent to which the company's assets are financed with debt;
• Liquidity Ratios: to measure the company's ability to pay its bills;
• Profitability Ratios: to measure the company's ability to generate earnings;
• Efficiency Ratios: to measure the company's ability to utilize its assets;
• Market Value Ratios: to measure the market perception about the company's future prospects.

The downloaded four years' balance sheets and income statements are to be used to calculate the financial ratios not reported in the DJI. For example, four leverage ratios (Debt/Equity, LT Debt/ Cap, LT Debt/Tot Debt, and LT Debt/Tot Assets) are reported, but the interest coverage ratio (= earnings available for interest/interest expenses) is missing in the DJI. Students are required to obtain the earnings and interest expenses information from the income statements and calculate this ratio to measure the company's ability to service the debt. In the area of liquidity, current ratio (= current assets/current liabilities) and quick ratio (= quick assets/ current liabilities) are reported, but the interval measure (= quick assets/daily operating expenditures) is not. Students are required to obtain quick assets (= cash & equivalent + receivables) from the balance sheets and operating expenditures from the income statements, and calculate this ratio to measure how long the company can keep up with its bills using only existing quick assets. As the financial ratios in each of the five performance areas are compiled, they are analyzed across time. A sample trend analysis for Intel is presented (below) in Table 1. 

BANKING SERVICES IN INDIA

BANKING SERVICES IN INDIA

I.   HISTORY OF BANKING IN INDIA

There are three different phases in the history of banking in India.

1)         Pre-Nationalization Era.

2)         Nationalization Stage.

3)         Post Liberalization Era.

1)  Pre-Nationalization Era:

                        In India the business of banking and credit was practices even in very early times. The remittance of money through Hundies, an indigenous credit instrument, was very popular. The hundies were issued by bankers known as Shroffs, Sahukars, Shahus or Mahajans in different parts of the country.

                        The modern type of banking, however, was developed by the Agency Houses of Calcutta and Bombay after the establishment of Rule by the East India Company in 18^th and 19^th centuries.

                        During the early part of the 19^th Century, ht volume of foreign trade was relatively small. Later on as the trade expanded, the need for banks of the European type was felt and the government of the East India Company took interest in having its own bank. The government of Bengal took the initiative and the first presidency bank, the Bank of Calcutta (Bank of  Bengal) was established in 180. In 1840, the Bank of Bombay and IN 1843, the Bank of Madras was also set up.

                                                                               BANKING SERVICES IN INDIA

These three banks also known as “Presidency Bank”. The Presidency Banks had their branches in important trading centers but mostly lacked in uniformity in their operational policies. In 1899, the Government proposed to amalgamate these three banks in to one so that it could also function as a Central Bank, but the Presidency Banks did not favor the idea. However, the conditions obtaining during world war period (1914-1918) emphasized the need for a unified banking institution, as a result of which the Imperial Bank was set up in1921. The Imperial Bank of India acted like a Central bank and as a banker for other banks.

                        The RBI (Reserve Bank of India) was established in 1935 as the Central Bank of the Country. In 1949, the Banking Regulation act was passed and the RBI was nationalized and acquired extensive regulatory powers over the commercial banks.

                        In 1950, the Indian Banking system comprised of the RBI, the Imperial Bank of India, Cooperative banks, Exchange banks and Indian Joint Stock banks.

2)  Nationalization Stages:

                        After Independence, in 1951, the All India Rural Credit survey, committee of Direction with Shri. A. D. Gorwala as Chairman recommended amalgamation of the Imperial Bank of India and ten others banks into a newly established bank called the State Bank of India (SBI). The Government of India accepted the recommendations of the committee and introduced the State Bank of India bill in the Lok Sabha on 16^th April 1955 and it was passed by Parliament and got the president’s assent on 8^th May 1955. The Act came into force on 1^st July 1955, and the Imperial Bank of India was nationalized in 1955 as the State Bank of India.

                       

BANKING SERVICES IN INDIA

The main objective of establishing SBI by nationalizing the Imperial Bank of India was “to extend banking facilities on a large scale more particularly in the rural and semi-urban areas and to diverse other public purposes.”

                        In 1959, the SBI (Subsidiary Bank) act was proposed and the following eight state-associated banks were taken over by the SBI as its subsidiaries.

   Name of the Bank                                      Subsidiary with effect from

1.  State Bank of Hyderabad                                      1^st October 1959

2.  State Bank of Bikaner                                           1^st January 1960

3.  State Bank of Jaipur                                              1^st January 1960

4.  State Bank of Saurashtra                                       1^st May 1960

5.  State Bank of Patiala                                             1^st April 1960

6.  State Bank of Mysore                                            1^st March 1960

7.  State Bank of Indore                                             1^st January 1968

8^.  State Bank of Travancore                                       1^st January 1960

                        With effect from 1st January 1963, the State Bank of Bikaner and State Bank of Jaipur with head office located at Jaipur. Thus, seven subsidiary banks State Bank of India formed the SBI Group.

                        The SBI Group under statutory obligations was required to open new offices in rural and semi-urban areas and modern banking was taken to these unbanked remote areas.