Project entitled “A Project on Financial Performance Analysis at Milma ERCMPU Edappally” is conducted to analyze the financial performance of Milma. It helped in knowing the financial efficiency and weakness of the concern and also to draw inference about the present position of the company. Kerala – Cooperative Milk Marketing Federation (KCMMF), popularly called Milma was established in April 1980 with its head office at Thiruvananthapuram for the successful implementation of the operation flood (a dairy programme launched in 1970 under the aegis of National Dairy Development Board (NDDB)).
The study is done for the period of five financial years starting from 2007 – 1008 to 2011 -2012. For data collection both primary and secondary sources are used. Data which are collected through direct interaction with the finance staff forms primary data and it is analyzed based upon predetermined objectives. The data collected through company broachers and annual reports are the secondary data. The study conducted used descriptive research design and mathematical tool like ratio analysis to analyze the data collected. Bar graphs are used to give the graphical representation of data analyzed.
The ratio analysis of the company shows an increasing trend or a favorable trend during the period of this study. It is showing a trend of growth, both in respect of turnover and profit. From the study it is found that the company is growing year by year in all aspects. But there is no scope for improvement in certain areas.
Financial statements refer to formal original statements prepared by a business concern to disclose its financial information. These are prepared for the purpose of presenting a periodical review or report of the progress made by the concern. It shows the status of the investment in the business and results achieved during the accounting period. Financial statements include mainly two statements which the accountant prepares at the end of the given period. These are Income Statement (Profit and Loss Account) and Position Statement (Balance Sheet). The purpose preparing Profit and Loss Account is to ascertain the net result of trading activities (i.e., Profit or loss) and that of Balance Sheet is to show the financial position of the business as on a particular date. A number of schedules are also usually prepared to supplement data and information contained in the Balance Sheet and Profit and Loss Account. Schedules of fixed assets, schedules of debtors, schedules of creditors, schedules of investment etc. are also attached to the financial statements. A cash flow statement is also added to the above statements. These statements put together are called package of financial statements.
IMPORTANCE OF FINANCIAL STATEMENTS
The financial statements are mirrors which reflect the financial position and operating strength or weakness of the concern. These statements are highly useful to the management, investors, creditors, bankers, workers, government and public image at large. The utility of financial statements to different parties are the following: * Management: The management is able to exercise cost control through financial statements. The efficient and inefficient spots are brought to the notice of the management. The management is able to decide the course of action to be adopted in future. * Creditors: the trade creditors are to be paid in a short span of time. This liability is met out of current assets. The creditors will be interested in the short term solvency of the concern. The current ratio and acid test ratio will enable the creditors to assess the short term solvency position of the concern. * Bankers: the banker is interested to see that the loan amount is secure and the customer is able to pay the interest regularly. The banker will analyze the Balance Sheet and Profit and Loss Account to determine the financial strength and profitability...
Bibliography: * I.M Pandey, Financial management,Vikas Publications, 2010.
* C.R. Kothari, Research Methodology, New age International, 2008.
* S. P.Jain, Financial management, Tata McGraw Hill Education Private Limited, 2011.
* Annual Report of Milma ERCMPU (2008 – 2012).
* Company Brochure, Milma ERCMPU.
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