Ratio Analysis

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Project report
(Submitted for the degree of b.com. honours in accounting & finance under the University of Calcutta)

A STUDY ON FINANCIAL PERFORMANCE USING
RATIO ANALYSIS AT EMAMI LTD

Submitted by
Name of the candidate: Sujay Kanungoe
Registration no. 043-1121-0014-10
Roll no.
Name of the College: Heramba Chandra College

Supervised by
Name of the Supervisor: R. P. Roy.
Name of the college: Heramba Chandra College

Acknowledgement

I would like to acknowledge Prof. R. P. Roy for this supervision and valuable guidance. During the preparation of this report I have collected much important information from various books and articles and also form internet. I would also like to acknowledge those authors.

Table of content

Financial Management is that managerial activity which is concerned with the planning and controlling of the firm’s financial resources. Though it was a branch of economics till 1890 as a separate or discipline it is of recent origin.

Financial Management is concerned with the duties of the finance manager in a business firm. He performs such varied tasks as budgeting, financial forecasting, cash management, credit administration, investment analysis and funds procurement. The recent trend towards globalization of business activity has created new demands and opportunities in managerial finance.

Financial statements are prepared and presented for the external users of accounting information. As these statements are used by investors and financial analysts to examine the firm’s performance in order to make investment decisions, they should be prepared very carefully and contain as much investment decisions; they should be prepared very carefully and contain as much information as possible. Preparation of the financial statement is the responsibility of top management. The financial statements are generally prepared from the accounting records maintained by the firm.

Financial performance is an important aspect which influences the long term stability, profitability and liquidity of an organization. Usually, financial ratios are said to be the parameters of the financial performance. The Evaluation of financial performance had been taken up for the study with “EMAMI LIMITED” as the project.

Analysis of Financial performances is of greater assistance in locating the weak spots at the Emami limited even though the overall performance may be satisfactory. This further helps in

* Financial forecasting and planning
* Communicate the strength and financial standing of the Emami limited * For effective control of business.

Review of literature

Financial statements Analysis:
The financial statements provide some extremely useful information to the extent that the balance sheet mirrors the financial position on a particular date in terms of the structure of assets, liabilities and owners’ equity, and so on and the profit an loss account shows the results of operations during a certain period of time in terms of the revenues obtained and the cost incurred during the year. Thus, the financial statements provide a summarized view of the financial position and operations of a firm. Therefore, much an be learnt about a firm from a careful examination of its financial statements as invaluable documents performance reports. The analysis of financial statements is thus, an important aid to financial analysis.

The focus of financial analysis is on key figures in the financial statements and the significant relationship that exists between them. The analysis of financial statements is a process of evaluating the relationship between component parts of financial statements to obtain a better understanding of the firm’s position and performance. The first task of the financial analyst is to select the information relevant to the decision under consideration from the total information contained in the financial statements. The second...
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