ABSTRACT

This study attempts basically to measure the financial performance of the Subramaniya Siva Co-operative Sugar Mills Ltd., for the period 2007-2012 by using the DuPont system of financial analysis which is based on analysis of return on equity model. The return on equity model disaggregates performance into three components: net profit margin, total asset turnover, and the equity multiplier. It was found that the financial performance of Subramaniya Siva Co-operative Sugar Mills Ltd., is relatively steady and reflects minimal volatility in the return on equity. Net profit margin and total asset turnover exhibit relative stability for the period from 2007-2012. The equity multiplier also show almost stable indicators for the period from 2007-2012 and the ratios declined from 20072012 which indicates that the Subramaniya Siva Co-operative Sugar Mills Ltd., had less financial leverage in the recent years, which means the bank is relying less on debt to finance its assets.

Keywords: DuPont, Return on Equity. Net Profit Margin, Equity Multiplier. Asset Utilization

1.1 INTRODUCTION ABOUT THE STUDY For any business in the private sector there are numerous of models to describe how well the business is running. Among these the DuPont model was created in the early 1900s but is still a model valid to use for assessment of the profitability. The model was created by F. Donaldson Brown.H who came up with the model when he was assigned to clean up the finances in General Motors and has ever since been an important model for financial analysis. Remarkably it has not been used in the security community for risk prioritization or impact analysis. The original DuPont method of financial ratio analysis was developed in 1918 by an engineer at DuPont who was charged with understanding the finances of a company that DuPont was acquiring. He noticed that the product of two often-computed ratios, net profit margin and total asset turnover, equals return on assets (ROA). The elegance of ROA being affected by a profitability measure and an efficiency measure led to the DuPont method becoming a widely-used tool of financial analysis Liesz, (2002). In the 197O's, emphasis in financial analysis shifted from ROA to return on equity (ROE) and the DuPont model was modified to include the ratio of total assets to equity. Regarding this fact the researcher has taken the challenge to use this model for Subramaniya Siva Co-operative Sugar Mills Ltd., situated at Gopalapuram, Dharmapuri District. Banks and other financial institutions are a unique set of business firms whose assets and liabilities, regulatory restrictions, economic functions and operating make them an important subject of research, particularly in the conditions of the emerging financial sectors. Banks' performance monitoring, analysis and control needs special analysis in respect to their operation and performance results from the viewpoint of different audiences, like investors/owners, regulators, customers/clients, and management themselves. Different versions of financial ratio analysis arc used for the bank performance analysis using financial statement items as initial data sources.

1.2 INDUSTRY PROFILE

The sugar industry is mostly oriented to a single material, namely sugarcane that forms 60% of the total cost of production. Therefore, the availability of sugar cane and facilities of transporting raw material of the sugar mill naturally condition the industry of sugar proximity to. The raw material is essential because the sucrose content of the sugarcane begins to decrease soon after the cane is cut obtained as the factories for generating power to use as a by-product during producing. Therefore, power is not at all a dominating factor determining the location of sugar industry in recent times; techniques feasibility and economics visibility of the sugar projects have been given importance in the location of sugar industry. In the words of Dr.M.Mehta, The location pattern of the sugar industry is greatly influenced by the character local distribution depends entirely on Physical and a Geographical factor, nature plays a dominant role in the location industry. TOP 10 SUGAR INDUSTRIES IN WORLD COMPANY 2011 TO 12 OUTPUT Suedzucker Ag 4.2 million tons Cosan Sa Industria & Comercio 4.1 million tons British Sugar PLC 3.9 million tons Tereos Internacional Sa 3.6 million tons Mitr Phol Sugar Corp 2.7 million tons Nordzucker Gmbh & Co Kg 2.5 million tons Louis Dreyfus 1.8 million tons Wilmar International Ltd 1.5 million tons Thai Roong Ruang Sugar Group 1.5 million tons Turkiye Seker Fabrikalari 1.34 million ton

1.2.1. ABOUT THE SUGARCANE Sugarcane is grown as a crop with contractual obligations with the sugar mills which provide exclusive reserved cane areas for the development of sugarcane. All the sugar mills are having tie-up arrangements with Co-operative and Commercial Banks facilitating timely provision of agricultural loan to the farmers. S.No. Sugar season (from October to September 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 Total cane area Registered by Sugar mills (in lakh hectares) 2.51 2.97 2.72 2.26 2.00 2.17 2. 90 Total cane crushed Capacity By the sugar mills (in Utilization % lakh metric tonnes) for 172 days of crushing 231.56 125 274.49 144 229.68 115 165.72 73 142.99 63 178.59 70 272.49 140

Recovery % 9.24 9.25 9.32 9.62 8.88 9.18 9.20

1 2 3 4 5 6 7

1.2.2. CANE PRICE The Government of India announces the Fair and Remunerative Price (FRP) on All India basis from 2009-10 seasons onwards. For the crushing season 2010-2011, the Government of India have announced a Fair and Remunerative Price (FRP) of Rs.1391.20 per M.T. linked to 9.5% sugar recovery and for every 0.1% increase in sugar recovery a premium of Rs.14.60 per M.T. as given. The Government of Tamil Nadu have announced the State Advised Price as Rs.2000/- per M.T. linked to 9.5% sugar recovery, with a premium of Rs.14.60 per M.T. for every 0.1% increase in recovery inclusive of transport subsidy for the 2011-2012 seasons.
Year Statutory minimum price linked to 9% recovery (RS./ M.T.) State advised Price linked to 9% Recovery (Rs. / m.t) Average transport cost (Rs./ m.t.) Average recovery (%) Incentive for increase in 0.1% recovery (rs./ m.t.) Average incentive towards recovery (rs./ m.t.) Average cane price (rs./ m.t.)

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

795.00 802.50 811.80 811.80 1298.40 1391.20 1400.18

1014.00 1025.00 1034.00 1100.00 1537.40 1900.00 2010.30

32 80 85 90 90 100 120

9.65 9.24 9.25 9.32 9.70 9.88 10.00

8.80 9.00 9.00 9.00 11.30 14.60 15.30

62 18 27 30 22.60 0 0

1108.00 1123.00 1146.00 1220.00 1650.00 2000.00 2200.00

TOTAL CONTRIBUTION TO THE ECONOMY/ SALES GROWTH OF INDIA'S SUGAR INDUSTRY No. of factories in Operation Installed capacity (lakh tonne) Actual sugar production (in lakh tonne) 11.0 18.9 30.2 35.4 39.5 58.4 70.2 120.5 164.3 182.0 186.0 185.3 201.0 170.0 175.0 180.0 185.0 191.0 200.0 208.0 210.0

Year 1950-1951 1955-1956 1960-1961 1965-1966 1973-1974 1978-1979 1985-1986 1990-1991 1995-1996 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2009-2010 2010-2011 2011-2012

139 16.7 143 17.8 174 24.5 200 32.3 229 43.1 229 59.1 339 72.7 337 98.5 415 127.6 423 161.8 437 168.2 433 176.8 453 180.0 461 185.0 472 190.0 480 195.0 483 203.0 492 215.0 502 218.0 513 227.0 518 233.0 Source: Indian Sugar Mills Association

PRODUCTION OF SUGARCANE IN MAJOR STATES OF INDIA The following table shows that the level of sugar production (in Lakh Tonnes) in Indian states: Tamil Nadu Sugar Industry Uttaranchal Sugar Industry Uttar Pradesh Sugar Industry West Bengal Sugar Industry Andhra Pradesh Sugar Industry Gujarat Sugar Industry Himachal Pradesh Sugar Industry Madhya Pradesh Sugar Industry Chattisgarh Sugar Industry Bihar Sugar Industry Haryana Sugar Industry Karnataka Sugar Industry Maharashtra Sugar Industry Manipur Sugar Industry

1.2.3 PERFORMANCE OF SUGAR MILLS IN TAMILNADU

During 1994-1996 seasons, the sugarcane was produced in abundance in the state and the sugar mills faced a glut situation and had to crush 160% and 124% of their capacity respectively affecting the recovery badly. during1996-97 sessions, the sugar mills had just sufficient cane to achieve total cane crush of 117.40 lakh tones and in 1997-1998, the mills crushed 145.92 lakh tones which amount to 7% and 87% of capacity utilization respectively. The financial performance of cooperative and public sector sugar mills during 1998-1999. 1.2.4 THE STEPS INVOLVED IN PRODUCTION OF SUGAR

1.2.4. (A) SUGAR DEVELOPMENT FUND (SDF) FROM GOVERNMENT OF INDIA The Government of India had enacted the sugar chess act 1984, under which a sugar chess amount of Rs.14/-per quintal of sugar is levied on each sugar mills in the country. The above amount is collected as fund with the title sugar development fund (SDF) by the Government of India and is being utilized by the sugar mills as loan for the following purposes: Modernization /rehabilitation of sugar mills. Development of sugar cane in the sugar mills area. Sanction of research grant for the research and development project connected with sugar industry is also made from this fund.

From the introduction of the SDF in 1984, 30 sugar mills out of 36 sugar mills in Tamil Nadu have availed loan from government of India for cane development. Sugar industry is the agro-based industry located in the rural India. About 45 million sugar cane farmers, their dependents and a large mass of agricultural labor are involved in sugar cane cultivation harvesting and ancillary and consulting 7.5% of the rural population. Besides, about 0.5 million skilled and semi-skilled workers, mostly from the rural areas are engaged in the sugar industry. The industry in India has been a focal point for socioeconomic development in the rural areas by mobilizing rural resources, generating employment and higher income, transport and communication facilities. Further, many sugar factories have established school, colleges, medical centers and hospitals for a so welfare diversified in to by-product based industries and have invested and put up distilleries, organic plants, paper and board factories and co-generation plants 1.2.4 (B) ROLE OF INDIAN GOVERNMENT ON SUGAR INDUSTRY The following policy initiatives are taken to boost the sugar industry: Government declared the new policy on august 20, 1998 with regards to licenses for new factories, which shows that there will be no sugar factory in a radius of 15km. Setting up of Indian institute of sugar technology at Kanpur is meant for improving efficiency in the industry Brazil.

 Presently, about million hectares of land is under sugarcane with an average yield of 70 tones paler hectare. India is the largest single producer of sugar including traditional cane sugar sweeteners, khan sari and Guru Equivalent to 26 million tons raw value followed by Brawl in the second place at 18.5 tones. Even in respect of white crystal sugar, crystal sugar, India has ranked No. 1 position in 7 out of last 10 years.

1.3 COMPANY PROFILE

Subramaniya Siva co-operative sugar mills ltd, was registered as cooperative society on 25.11.87, based on the letter of intent no. 594/09.10.1987 in Gopalapuram, Pappireddipatty Taluk, and Dharmapuri District. The capacity of the plant is 2500 TCD. The extent of the factory premises is 96.12 acres. It started its first crushing on 01.10.1992. The area of operation is entire Harur Taluk and Pappireddipatty Taluk, and some of the villages in Dharmapuri Taluk, Salem district and Tiruvannamalai District. The total project cost Rs.3296.59 lakhs. The government share capital is Rs.1128.75 lakhs. The average recovery is 10.10. They are having two sugar godowns having storage capacity of 3 lakhs quintals and two steel molasses tanks with a total storage capacity of 12000 MTs. We are having 1.5 MW co-generation plant producing 34,000 units per day during season. There are about 476 employees working in our mills. This sugar factory is situated Gopalapuram village, Pappireddipatty Taluk in Dharmapuri District about 40 Kms from Dharmapuri town and 50 Kms from Salem city. The location of the mills is 5 Kms from Salem to Vellore main road. The mill has obtained ISO 9001-2000 certificate during 2003 for a period of three years and subsequently renewed up to June 2009. Subramaniya Siva co-operative sugar mills ltd, was registered as cooperative society on 25.11.87, based on the letter of intent no. 594/09.10.1987 in Gopalapuram, Pappireddipatty Taluk, and Dharmapuri District. The capacity of the plant is 2500 TCD. The extent of the factory premises is 96.12 acres. It started its first crushing on 01.10.1992. The area of operation is entire Harur taluk and Pappireddipatty Taluk and some of the villages

in Dharmapuri Taluk, Salem District and Tiruvannamalai District. The total project cost

Rs.3296.59 lakhs. The Government Share Capital is Rs.1128.75 lakhs. The average recovery is 10.10. They are having two sugar godowns having storage capacity of 3 lakhs quintals and two steel molasses tanks with a total storage capacity of 12000 MTs. We are having 1.5 MW co-generation plant producing 34,000 units per day during season. There are about 476 employees working in our mills. This sugar factory is situated at Gopalapuram Village, Pappireddipatty Taluk in Dharmapuri District about 40 Kms from Dharmapuri town and 50 Kms from Salem city. The location of the mills is 5 Kms from Salem to Vellore main road. The mill has obtained ISO 9001-2000 certificate during 2003 for a period of three years and subsequently renewed up to June 2009. 1.3.1 PRODUCT PROFILE RAW SUGAR It is essentially the product at the point before the molasses is removed (whats left after sugarcane has been processed and refined). Popular types of raw sugar include demerara sugar from Guyana and Barbados sugar, a moist, fine textured sugar. Turbinado sugar is raw sugar that has been steam cleaned to remove contaminates, leaving a light molasses flavored, tan colored sugar.

BROWN SUGAR (light and dark) - Brown sugar retains some of the surface molasses syrup, which imparts a characteristic pleasurable flavor. Dark brown sugar has a deeper color and stronger molasses flavor than light brown sugar. Lighter types are generally used in baking and making butterscotch, condiments and glazes. The rich, full flavor of dark brown sugar makes it good for gingerbread, mincemeat, baked beans, and other full flavored foods.

GRANULATED SUGAR Also called table sugar or white sugar. This is the sugar most known to consumers, is the sugar found in every homes sugar bowl, and most commonly used in home food preparation. It is the most common form of sugar and the type most frequently called for in recipes. Its main distinguishing characteristics are a paper-white color and fine crystals. Sugar cubes They are made from moist granulated sugar that is pressed into molds and then dried.

LIQUID SUGARS - There are several types of liquid sugar. Liquid sugar (sucrose) is white granulated sugar that has been dissolved in water before it is used. Liquid sugar is ideal for products whose recipes first require sugar to be dissolved. Amber liquid sugar is darker in color and can be used in foods where brown color is desired.

1.3.2 CANE INFORMATION Sugarcane is a traditional crop of India and its under cultivation since time immemorial in the Indo- Gangetic belt. There are numerous mentions of sugarcane in several

of our ancient books such as Atharva Veda, Rig Veda etc dating back to 1000 BC TO 3000 BC. Foreign travelers to India, about 2000 years ago, have mentioned about sugar cane. Buddhist literature has several mentions of sugarcane and sugar.

1.3.3 CANE PARTICULARS A. Cane divisional office: Area of operation of the mills consisting of 8 divisional offices 1. Millsite office 3. Harur (South) 5. Pappireddipatti 7. Ayothiyapattanam B. CANE VARIETY: 1. High sugar variety 2. Medium sugar variety 3. Low sugar variety : CO 86032 99.53% : COC 22- 0.22% : CO 94045 0.25 2. Harur (North) 4.Morappur 6.Bommidi 8.Gobonathampatti koot road

1.3.4 CRUSHING PROGRAMMED FOR SEASON 2010-2011: Cane target Achievement Total cane estimate : 14000 acres : 12912 acres : 300000 tones

Actual cane crushed : 316640 tones Date of crushing start : 15.11.2010 Date of closure : 08.04.2010

1.3.5 CANE DEVELOPMENT ACTIVITIES AND FUTURE PLAN: 1. Chip buds seedlings planting 2. Wider row spacing planting 3. Mechanized inter cultural operation 4. Drip irrigation 5. Precision farming 6. Vermin compost production 7. Parasite breeding : Low cost technology : Facilitate mechanical harvesting : Labours saving and timely operation : Water saving technology : Do : Enrich soil organic matter : To control shoot borer pest.

1.3.6 POWER GENERATION AND EXPORT: Capacity Production per day Consumption by mills Exporting to TNEB grid Rate paid by TNEB : 5MWS : 95000 units : 62000 units : 33000 units per day : Rs. 3.15 per unit

For full crushing season of 172 days 56,76,000 units can be exported with revenue of Rs.178.79 lakhs per season. CO-GENERATION POWER EXPORT DETAILS: Year 2004-05 2005-06 6308160 2006-07 5902040 2007-08 5949760 2008-09 5287560 2009-10 3391400

Co-generation power 2455960 (in Units)

100% co-generation plant is in active stage for commissioning along with modernization of the plants 1.3.7 GODOWN CAPACITY: Godown No.1 Godown No.2 Additional sugar godown Molasses tanks : 2 lakh qtls. : 1 lakh qtls. : 50000 quintals under construction. : 2 Nos. each 6000 M.T. capacity.

1.3.8 ORGAINSATION STURUCTURE:

ORGAINSATION CHART Administration

Special officer

Administration

account (C.F)

CCO (cane)

engineering

manufacturing

Establishment purchase security time office dispensary

General

material

budget

cane

sales &God own

Farm

R&D

cane supply

irrigation

Civil

factory house

mill house

boiler

boiling

workshop

Processing

LAB

packing

clarification

panboilingsulphictation

2.1 RESEARCH METHODOLOGY

The term research refers to the systematic method consisting of enunciating the problem, formulating a hypothesis, collecting the facts or data, analyzing the facts and reaching certain conclusions either in the form of solutions(s) towards the concerned problem or in certain generalizations for some theoretical formulation.

2.1.1RESEARCH DESIGN:
Research design states that A research design is the arrangement of conditions for collections and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. Research design Analytical in Nature which has been used for his study.

2.1.2 METHODS OF DATA COLLECTION

Secondary data has been utilized in this study. This secondary data is obtained from The five year financial data of the organization is taken from the annual year 2007 to 2011. The interview method also followed to elicit opinion and verify the facts of the case Edith regard to the financial performance of the organization. report from the

2.1.3 ANALYTICAL TOOLS USED

The financial analysis which was used to arrive the accurate result is Du Pont Analysis.

2.1.4 LISTS OF STATISTICAL TOOLS APPLIED FOR THIS STUDY 1. Spearmans Rank Correlation Coefficient 2. Trend analysis 3. Leverages 4. Coefficient of Correlation 5. Comparative Balance sheet

2.2 REVIEW OF LITERATURE: Marianna Botika (2012)1

This paper comprehensively explores the DuPont components in order to demonstrate which of three areas influences stock's abnormal behavior the most. The results show an interesting evolution: in 2007 the strong dependence between cumulated abnormal returns and profitability and ROA were founded. The 2008 and 2009 were a middle years which made investors to be unpredictable. The 2010 may be viewed as a returned year, all the data are extremely similar with 2007 year but with different elements. The research is indicating the fact that DuPont components represent an important and viable form of stock's abnormal returns analysis.

Almazari, Ahmed Arif (2012)2

This study attempts basically to measure the financial performance of the Jordanian Arab commercial bank for the period 2000-2009 by using the DuPont system of financial analysis which is based on analysis of return on equity model. The return on equity model disaggregates performance into three components: net profit margin, total asset turnover, and the equity multiplier. Arab bank is one of the largest financial institutions in the Middle East and is ranked amongst the largest international financial institutions. The bank witnessed a continuation of challenges brought on by the global financial crisis. It was found that the financial performance of Arab Bank is relatively steady and reflects minimal volatility in the return on equity. Net profit margin and total asset turnover exhibit relative stability for the period from 2001 to 2009.The equity multiplier also show almost stable indicators for the period from 200l-2005 and the ratios declined from 2006-2009 which indicates that the Arab bank had less financial leverage in the recent years, which means the bank is relying less on debt to financial its assets.

Marianna Botika (2012), The use of DuPont Analysis in Abnormal Returns Evaluation: Empirical Study of

Romanian Market journal of Economics and Management , issue I Vol.41,Page No:85 to 112.

Almazari, Ahmed Arif (2012), Financial Performance Analysis of the Jordanian Arab Bank by Using the

DuPont System of Financial Analysis , International Journal of Economics & Finance , issue 4 Vol. 4, Page No: 86 to 94.

 Collier, Henry W, McGowan Jr., Carl B, and Muhammad, Junainal (2010)3

This paper presents a model for the financial analysis of a bank in a rapidly changing environment based on the DuPont system of financial analysis. The DuPont system of financial analysis is based on analysis of return on equity which is disaggregated into net profit margin, total asset turnover and the equity multiplier. AFFIN Bank Malaysia is one of the largest banks in Malaysia and is one of the core banks from the consolidation process of the banking industry in response to the Southeast Asian economic crisis in 1997-98. The analysis covers begins in 1999 which is the year that AFFIN Bank was formed until 2006. The DuPont system of financial analysis shows the impact of the Asian financial crisis and the restructuring of the banking industry in Malaysia on the financial performance of AFFIN Bank and the gradual recovery of AFFIN Bank to return to steady performance over the past eight years.

McGowan Jr., Carl B, Stambaugh, Andrew R, and Sulong, Zunaidah (2011)4

This paper presents a model for the financial analysis of a bank based on the DuPont system of financial analysis. The DuPont system of financial analysis is derived from an analysis of return on equity that consists of three parts: 1) operating efficiency as measured by profit margin, 2) asset use efficiency as measured by total asset turnover, and 3) financial leverage as measured by the equity multiplier. The analysis covers the period from mid 2005 to 2009. The DuPont system of analysis assesses the performance of the Arabian institution since its establishment in the Spring of 2005

. Collier, Henry W, McGowan Jr., Carl B, and Muhammad, Junainal (2010) Evaluating The Impact Of A

Rapidly Changing Economic Environment On Bank Financial Performance Using The DuPont System Of Financial Analysis Journal of Finance & Banking Research , Issue 4 Vol. 4, Page No: 25 to 35.

McGowan Jr., Carl B , Stambaugh, Andrew R , and Sulong, Zunaidah (2011) financial analysis of bank al

bilad Journal of International Business & Economics Research , Issue 3 Vol. 10 , Page No: 9 to 16.

 Sheela, S. Christina (2011)5

The researcher carried out the study with the objective of finding out the financial performance of WHEELS INDIA LTD, Chennai for the financial year 2005-2009. The researcher is interested in finding out the major factors that determine the financial performance of the organization. The researcher carried out the study with Analytical type of research design in the study with the help of secondary data collection method. For this purpose the researcher took past 5years balance sheet into consideration. The data is checked out for the validity and reliability before conducting the study. The researcher used the following financial tool namely ratio analysis, comparative balance sheet and DuPont analysis and also statistical tools such as trend analysis and correlation. The study reveals that the financial performance is satisfactory. Ratios help to summarize large quantities of financial data to make quantitative judgment about the financial performance of the firm s. Profitability ratios indicate there is a decrease in the profit level, utilization of fixed assets and working capital in the last financial year. Thus the company can take necessary steps to improve sales and profit.

Veronique D. N.(2011)6
The ambition to develop Delhi as a global city is rooted in the liberalization reforms of the 1990s. Parts of the city region were integrated with the global economy, providing international firms with investment opportunities and outsourced services, while the metropolitan area emerged as a significant agglomeration of Export Processing Zones. The development of modern infrastructure, high-end residential complexes and exclusive shopping malls, in line with the rise of consumerism and middle-class ideology, has spectacularly transformed the urban landscape.

Sheela, S. Christina (2011) A Study On Financial Performance of Wheels India Limited-Chennai

Interdisciplinary Journal of Contemporary Research in Business, Issue 10 Vol. 2, Page No: 231-239.

Veronique D. N.(2011) The Dream of Delhi as a Global City .International Journal of Urban & Regional

Research Issue 3 Vol. 35, Page No:533 to 554.

 Gardner, John C ,McGowan J r, Carl B and Moeller, Susan E (2011)7

The purpose of this paper is to provide a case example to teach students how to estimate a company's sustainable growth by using an extension of the DuPont System of financial analysis on Coca-Cola Corporation. The DuPont system is based on a company's return on equity that is decomposed into three components: net profit margin, total asset turnover, and the equity multiplier. The extended DuPont system of financial analysis multiplies return on equity by the earnings retention rate to calculate sustainable growth. Sustainable growth is the highest level of growth in sales that a company can achieve using internally generated funds only.

Shepherd, Bryan E , Gilbert, Peter B , and Charles T. (2011)8

In Randomized studies researchers may be interested in the effect of treatment assignment on a time-to-event outcome that only exists in a subset selected after randomization. For example, in preventative HIV vaccine trials, it is of interest to determine whether randomization to vaccine affects the time from infection diagnosis until initiation of antiretroviral therapy. Earlier work assessed the effect of treatment on outcome among the principal stratum of individuals who would have been selected regardless of treatment assignment.

. Gardner, John C ,McGowan J r, Carl B and Moeller, Susan E (2011) Using Accounting Information For

Financial Planning And Forecasting: An Application Of The Sustainable Growth Model Using Coca-Cola journal of Business Case Studies, Issue 5 Vol. 7, Page No:9 to15.
8

. Shepherd, Bryan E , Gilbert, Peter B , and Charles T. (2011) Sensitivity Analyses Comparing Time-to-

Event Outcomes Only Existing in a Subset Selected Post randomization and Relaxing Monotonicity Journal International Biometric Society, Issue 3 Vol. 67, Page No:1100 to 1110.

NyoNyo Aung Kyaw, and Hla Theingi (2009)9

This paper documents the performance differences between Wholly-Owned

Subsidiaries (WOS) and Joint Ventures (JV) in electrical and electronics industry in Thailand for the period of 2000 to 2004. Unlike other studies, we analyse the performance differences using DuPont analysis. The impact of capital structure on the profitability of WOS and JV is further studied in this paper. We find that WOS have significantly higher sales growth, have more efficient asset management and carry higher debt ratios. On the other hand, JV are more efficient in cost control and thus have better performance in term of ROS. Consistent with managerial overinvestment agency theory, debt ratio is positive and highly significantly related to ROE. In addition, better asset management and higher leverage of WOS lead to higher profitability. On the other hand, JV's better ROS performance helps them enhance their ROE.

Nucci, Marcio , Anaissie, Elias ,and Kovanda, Laura(2010)10

Background. Patients with candidemia frequently have a central venous catheter (CVC) in place, and its early removal is considered the standard of care methods. We performed a subgroup analysis of 2 phase III, multicenter, double-blind, randomized, controlled trials of candidemia to examine the effects of early CVC removal (within 24 or 48 h after treatment initiation) on the outcomes of 842 patients with candidemia. Inclusion criteria were candidemia, age 116 years, CVC at diagnosis, and receipt of 1 dose of the study drug. Six outcomes were evaluated: treatment success, rates of persistent and recurrent candidemia, time to mycological eradication, and survival at 28 and 42 days. Univariate and multivariate analyses were performed, controlling for potential confounders eradication or rates of persistent or recurrent candidemia but was associated with better treatment success and survival.
9

.NyoNyo Aung Kyaw, and Hla Theingi (2009) A Performance Analysis Of Wholly Owned Subsidiaries And

Joint Ventures: Electrical And Electronic Industry In Thailand International Journal of Business Studies, Issue 1 Vol. 17, Page No:107 to 125.
10

. Nucci, Marcio , Anaissie, Elias ,and Kovanda, Laura(2010) Early Removal of Central Venous Catheter in

Patients with Candidemia Does Not Improve Outcome: Analysis of 842 Patients from 2 Randomized Clinical Trialsjournal of Clinical Infectious Diseases, Issue 3 Vol. 51, Page No:295 to 303.

2.3 RESEARCH GAP

Research gap is focusing on systematic research approach to find out the uncovered area for the present study. The review of literature mainly focused on ROA, ROE, Net profit margin, Total asset ratio, Equity Multiplier and so on. Thus, the researcher found that the uncovered area is profitability level, financial stability, financial position, etc. This study intends to analyse these issues in depth to provide information for the better of the management.

2.4 STATEMENT OF THE PROBLEM

The problem is to analysis the overall financial performance of Subramaniya Siva Co-Operative Sugar Mills Ltd. This is to find out the financial performance of the Subramaniya Siva co-operative sugar mills. But Subramaniya Siva Co-Operative Sugar Mills Ltd has difficulty to analysis the current assets and current liability from the period of study. In order to measure the financial performance and efficiency the trading, profit and loss A/C, and balance sheet has been analyzed. The organization wants to know about their financial performance on the basis of their return on assets. So taking these problems into considerations that proposed study was targeted towards the DuPont analysis.

2.4 OBJECTIVES OF THE STUDY

PRIMARY OBJECTIVE The Primary Objective of the Study is to analyze the Financial Performance of the Subaramaniya Siva Sugar Mills Ltd by means of Applying Du Pont Model.

SECONDARY OBJECTIVE

To analyse the financial position of Subramaniya Siva co-operative sugar mills ltd.

To ascertain the profitability level and current financial position.

To find out financial stability and weakness of the Subramaniya Siva co-operative sugar mills ltd.

To suggest suitable measures for improving the financial position of the company.

2.5 SCOPE OF THE STUDY

It helps the bank to know the financial position with the help of Dupont Analysis.

It is highly informative for the bank to achieve the favorable results.

The findings of the study reveal that the important aspects like Rations, Profitability, Liquidity and so on.

It is highly benefit to other banks.

2.6 LIMITATIONS OF THE STUDY

The data is utilized for the study is secondary in nature. So if there as any bias in them reflects over the analysis and conclusion.

Being the government organization they are inhibited to provide the financial details.

The study is limited to the period of five years.

Due to inadequate time it is not possible to analyze all aspects relevant to the study.

3.1 ANALYSIS AND INTERPRETATION OF THE DATA DU PONT MODEL OF SUBRAMANIYA SIVA COOP. SUGAR MILLS LTD,
Application of DuPont model for measuring the financial performance for the year ending 31st march 2007.

TOTAL COST:
Total cost = cost of goods sold + selling & administrative expenses + Interest expenses + Income tax. = 142000 + 15406767 + 52556510 +5266548 = Rs 73371825. NET INCOME: Net Income = Sales-Total Cost = 936911383-73371825 = Rs 863539558. NET PROFIT MARGIN Net Profit Margin = Net Income/Sales

= 863539558/936911383 = 0.92 CURRENT ASSETS Current Assets = Cash + Inventories Other (Sundry Debtors) = 116493235 + 366748889 + 12142262 = Rs 495384386.

NON-CURRENTS ASSETS Fixed Assets = Land + Building + Machinery + Equipment = 995000 + 6524800 + 204838600 + 25638000 = Rs 237996400. TOTAL ASSETS Total Assets = Current Assets + Non Current Assets = 495384386 + 237996400 = Rs 733380786. TOTAL ASSETS TURNOVER Total Asset Turnover = Sales / Total Assets = 936911383 / 733380786. = 1.27 RETURN ON ASSETS Return on Assets = Net Profit Margin * Total Assets Turnovers = 0.92 *1.27 =1.16 RETURN ON ASSETS (%) ROA =

= = 72.44 %

The Du-Pont Chart can also be indicated with the help of the following diagram.

Cost Of Goods Sold 142000 Selling & Administrative Expenses 15406767

Sales
936911383

Total cost 73371825

Net Income
863539558

Interest Expenses
52556510

-/Sales
936911383
Net Profit Margin
0.92

585107969
Income tax

5266548

Return on Assets
1.16

Return on Assets In %
72.44

Cash
116493235 Current assets + 495384386 -/Debtors 12142262 Total Assets Sales 936911383 Total Assets Turn Over
1.27

Inventories 366748889

733380786

Land, Machinery, Building etc...

237996400.

Noncurrent assets 237996400

3.1.2 DU PONT MODEL OF SUBRAMANIYA SIVA COOP. SUGAR MILLS LTD,

Application of DuPont model for measuring the financial performance for the year ending 31st March 2008.

TOTAL COST:
Total cost = cost of goods sold + selling & administrative expenses + Interest expenses + Income tax.

= 42000+30231808+ 66198081 +5866500 =Rs 102338389.

NET INCOME:
Net Income = Sales-Total Cost = 513686269-102338389. = Rs 411347880.

NET PROFIT MARGIN

Net Profit Margin = Net Income/Sales = 411347880 / 513686269 = 0.80

CURRENT ASSETS
Current Assets = Cash + Inventories Other (Sundry Debtors) = 3201819+733801086+ 7271230 = Rs 744274135

NON-CURRENTS ASSETS
Fixed Assets = Land +Building + Machinery + Equipment
= 1986800+6524800+204839800+35638650 = Rs 248990050.

TOTAL ASSETS
Total Assets = Current Assets + Non Current Assets
= 744274135 +248990050 = Rs 993264185.

TOTAL ASSETS TURNOVER

Total Asset Turnover = Sales / Total Assets
= 513686269 / 993264185. = 0.51

RETURN ON ASSETS
Return on Assets = Net Profit Margin * Total Assets Turnovers = 0.80*0.51 = 0.40

RETURN ON ASSETS (%)

ROA = 0.80 = 0.51 = 156% * 100

The Du-Pont chart can also be indicated with the help of the following diagram.

Cost of Goods Sold 42000

Sales
513686269

Selling & Administrative Expenses

Total cost 102338389

Net Income
863539558

30231808 Interest 585107969 Expenses 66198081

Income tax

-/Sales
513686269

Net Profit Margin

0.80

5866500

Return on Assets
0.40

Return On assets In %
156 %

Cash
3201819

Inventories
733801086 Debtors 7271230

Current assets 744274135 +

-/-

Sales
513686269

Total Assets Turn Over

0.51

Total Assets 993264185.

Land, Machinery, Building etc..

248990050

Noncurrent assets
248990050

3.1.3 DU PONT MODEL OF SUBRAMANIYA SIVA COOP. SUGAR MILLS LTD,

Application of DuPont model for measuring the financial performance for the year ending 31st March 2009.

TOTAL COST:
Total cost = cost of goods sold + selling & administrative expenses + Interest expenses + Income tax. = 58600 + 33271274+ 64873947 + 6065500 = Rs 104269321.

NET INCOME:
Net Income = Sales-Total Cost = 1170712641-104269321. = Rs 1066443320

NET PROFIT MARGIN

Net Profit Margin = Net Income / Sales = 1066443320 / 1170712641 = 0.91

CURRENT ASSETS
Current Assets = Cash + Inventories Other (Sundry Debtors) = 56589209 + 537072961+ 7835367 = Rs 601497537

NON-CURRENTS ASSETS
Fixed Assets = Land +Building + Machinery + Equipment = 1986000+6024500+174839800+30638650 = Rs 213488950

TOTAL ASSETS
Total Assets = Current Assets + Non Current Assets = 601497537 + 213488950 = Rs 814986487

TOTAL ASSETS TURNOVER

Total Asset Turnover = Sales / Total Assets = 1170712641 / 814986487. = 1.43

RETURN ON ASSETS
Return On Assets = Net Profit Margin* Total Assets Turnovers = 0.91 * 1.43 = 1.30

RETURN ON ASSETS (%)

ROA

= 0.91

= 1.43 = 63%.

* 100

The Du-Pont chart can also be indicated with the help of the following diagram.

Cost of Goods Sold

58600
Selling & Administrative Expenses

Sales 1170712641

Total cost 104269321. Net Income

1066443320

33271274 585107969 Interest Expenses 64873947

Income tax

-/Sales 1170712641
Net Profit Margin
0.91

6065500

Return on Assets
1.30

Return On assets In %
63%

Cash
56589209 Sales Current assets + 601497537 -/Debtors 7835367
1170712641

Inventories
537072961

Total Assets Turn Over

1.43

Total Assets 814986487

Land, Machinery, Building etc..

213488950

Noncurrent assets 213488950

3.1.4 DU PONT MODEL OF SUBRAMANIYA SIVA COOP. SUGAR MILLS LTD,

Application of DuPont model for measuring the financial performance for the year ending 31st March 2010.

TOTAL COST:
Total cost = cost of goods sold + selling & administrative expenses + Interest expenses + Income tax. = 60300 + 38777523 + 65532819 +7065300 = Rs 111435942

NET INCOME:
Net Income = Sales - Total Cost = 1428622305-111435942 = Rs 1317186363

NET PROFIT MARGIN

Net Profit Margin = Net Income/Sales = 1317186363/1428622305 = 0.92

CURRENT ASSETS
Current Assets = Cash +Inventories Other (Sundry Debtors) = 643475772 + 455982169 + 12238540 = Rs 1111696481

NON-CURRENTS ASSETS
Fixed Assets = Land + Building + Machinery + Equipment = 1986000+6024500+100839800+31038650

= Rs 139888950

TOTAL ASSETS
Total Assets = Current Assets + Non Current Assets = 1111696481+139888950 = Rs 1251585431.

TOTAL ASSETS TURNOVER

Total Asset Turnover = Sales / Total Assets = 1428622305 /1251585431. = 1.14

RETURN ON ASSETS
Return On Assets = Net Profit Margin * Total Assets Turnovers

= 0.92 * 1.14 = 1.04

RETURN ON ASSETS (%)

ROA = 0.92 * 100 1.14 = 80%.

The Du-Pont chart can also be indicated with the help of the following diagram.

Cost of Goods Sold

60300
Selling & Administrative Expenses

Sales 1428622305

Total cost 111435942 Net Income 1317186363

38777523 585107969 Interest Expenses 65532819 Income tax 7065300

-/Sales 1428622305 Net Profit Margin

0.92

Return on Assets
1.04

Return On assets In %
80%

Cash
643475772 Current assets + 1111696481 -/Debtors 12238540 Sales 1428622305 Total Assets Turn Over
1.14

Inventories
455982169

Total Assets 1251585431.

Land, Machinery, Building etc..

139888950

Noncurrent assets 139888950

3.1.5 DU PONT MODEL OF SUBRAMANIYA SIVA COOP. SUGAR

MILLS LTD,
Application of DuPont model for measuring the financial performance for the year ending 31st March 2011.

TOTAL COST:
Total cost = cost of goods sold + selling & administrative expenses + Interest expenses + Income tax. = 70566 + 41184348 + 106397275 +7160000 = Rs 154812189

NET INCOME:
Net Income = Sales-Total Cost = 841237082 154812189 =Rs 686424893

NET PROFIT MARGIN

Net Profit Margin = Net Income/Sales = 686424893/841237082 = 0.81

CURRENT ASSETS
Current Assets = Cash + Inventories Other (Sundry Debtors) = 651531395 + 495657704 + 14812249 = Rs 1162001348

NON-CURRENTS ASSETS
Fixed Assets = Land + Building + Machinery + Equipment = 1986000 + 6024500 + 90839800 + 31038650 = Rs 129884950

TOTAL ASSETS
Total Assets = Current Assets+Non Current Assets = 1162001348 + 129884950 =Rs 1291886298

TOTAL ASSETS TURNOVER

Total Asset Turnover = Sales / Total Assets = 841237082 /1291886298 = 0.65

RETURN ON ASSETS
Return on Assets = Net Profit Margin* Total Assets Turnovers = 0.81 * 0.65 = 0.82

RETURN ON INVESTMENT
ROA = 0.81 = 0.65 = 124%. * 100

The Du-Pont chart can also be indicated with the help of the following diagram.

Cost of Goods Sold 70566

Sales 841237082

Selling & Administrative Expenses

Total cost 154812189 Net Income 686424893

41184348 585107969 Interest Expenses 106397275

Income tax

-/Sales 841237082
Net Profit Margin
0.81

7160000

Return on Assets
0.82

Return On assets in %
124%

Cash
651531395 Current assets 1162001348 Sales 841237082 Total Assets Turn Over 0.65

Inventories
495657704

-/Debtors 14812249

Total Assets 1291886298

Land, Machinory, Bullding etc..

139888950

Non- current assets 129884950

TABLE NO: 3.1.6 TABLE SHOWING TOTAL COST

YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 TOTAL COST Rs 73371825 102338389 104269321 111435942 154812189

Source: Secondary Data INFERENCE The table showing 2006-2007 was total cost was low , and 2007- 2008 was the total cost was increased , and 2008-2009 was increase the total cost, and 2009-2010 was increase the total cost, and 2010-2011 was increase the total cost i.e. nearly 2.5 times it increased. CHART NO: 3.1.6 TOTAL COST

TABLE NO: 3.1.7 TABLE SHOWING NET INCOME

NET INCOME RS 863539558. 744274135 1066443320 1317186363 686424893

YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

Source: Secondary Data

INFERENCE
The Net income was increasing the year of 2006-2007, and 2007-2008, 2010- 2011 was decreasing. The Net income increased the year of 2008- 2009 and 2009-2010 from 10crores to 13 crores i.e. nearly 1.76 times it increased. CHART NO:3.1.7 NET INCOME

TABLE NO: 3.1.8 TABLE SHOWING NET PROFIT MARGIN

YEAR

NET PROFIT MARGIN (%) 0.92

2006-2007 0.80 2007-2008 2008-2009 2009-2010 2010-2011 0.91 0.92 0.81

Source: Secondary Data INFERENCE The table showing 2006-2007 was the net profit margin was 0.92% , and 2007- 2008 was the net profit margin was decreased 0.80% , and 2008-2009 was increase the net profit margin 0.91% , and 2009-2010 was increase the net profit margin, and 2010-2011 was decrease the net profit margin i.e. nearly 1.5 times it increased. NET PROFIT MARGIN CHART NO:3.1.8

TABLE NO: 3.1.9 TABLE SHOWING CURRENT ASSETS YEAR CURRENT ASSETS Rs 495384386 744274135 2007-2008 2008-2009 2009-2010 2010-2011 601497537 1111696481 1162001348

2006-2007

Source: Secondary Data INFERENCE The table showing 2006-2007 was the current assets was low , and 2007- 2008 was the current assets was increased , and 2008-2009 was decrease the current assets , and 20092010 was decrease the current assets, and 2010-2011 was increase the noncurrent assets i.e. nearly 2.34 times it increased. CHART NO: 3.1.9 CURRENT ASSETS

TABLE NO: 3.1.10 TABLE SHOWING NON- CURRENTS ASSETS YEAR NON-CURRENTS ASSETS Rs 237996400 248990050 2007-2008 2008-2009 2009-2010 2010-2011 213488950 139888950 129884950

2006-2007

Source: Secondary Data INFERENCE The table showing 2006-2007 was the noncurrent assets was low , and 2007- 2008 was the noncurrent assets was increased , and 2008-2009 was decrease the noncurrent assets and 2009-2010 was decrease the noncurrent assets, and 2010-2011 was increase the noncurrent assets. i.e. nearly 1.9 times it increased CHART NO: 3.1.1 NON- CURRENTS ASSETS

TABLE NO: 3.1.11 TABLE SHOWING TOTAL ASSETS YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 1251585431 1291886298 TOTAL ASSETS Rs 733380786 993264185 814986487

Source: Secondary data

INFERENCE
The table showing 2006-2007 was the total assets was low , and 2007- 2008 was the total assets was increased , and 2008-2009 was decrease the total assets , and 2009-2010 was increase the total assets, and 2010-2011 was increase the total assets for. i.e. nearly 1.76 times it increased

CHART NO:3.1.11 TOTAL ASSETS

TABLE NO:3.1.12 TABLE SHOWING TOTAL ASSETS TURNOVER

YEAR

TOTAL ASSETS TURNOVER (%) 1.27

2006-2007 2007-2008 2008-2009 1.14 2009-2010 0.65 2010-2011 Source: Secondary Data 0.51 1.43

INFERENCE
The table showing 2006-2007 was the total assets turnover ratio was 1.27%, and 2007- 2008 was the total turnover ratio decreased 0.51%, and 2008-2009 was increase the total assets turnover ratio was 1.43%, and 2009-2010 was decrease the total current assets, and 2010-2011 was decrease the total assets turnover ratio for0.65%. I.e. nearly 2.0 times it increased.

CHART NO:3.1.13 TOTAL ASSETS TURNOVER

TABLE NO:3.1.14. TABLE SHOWING RETURN ON ASSETS

YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

RETURN ON ASSETS (%) 1.16 0.40 1.30 1.04 0.82

Source: Secondary Data

INFERENCE:
The table showing 2006-2007 was the return on investment was 72.44%, and 20072008 was the return on investment increased 156%, and 2008-2009 was decrease the return on investment in 63%, and 80% &124% increase the return on investment for the year of 2009 to 2011. I.e. nearly 2.47 times it increased.

CHART NO:3.1.15 RETURN ON ASSET

TABLE NO:3.1.16 TABLE SHOWING RETURN ON ASSETS (%)

YEAR 2006-2007 2007-2008 2008-2009

RETURN ON ASSETS (%) 72.44 156 63 80

2009-2010 2010-2011 Source: Secondary Data 124

INFERENCE:
The table showing 2006-2007 was the return on investment was 72.44%, and 20072008 was the return on investment increased 156%, and 2008-2009 was decrease the return on investment in 63%, and 80% &124% increase the return on investment for the year of 2009 to 2011. I.e. nearly 2.47 times it increased.

CHART NO:3.1.17 RETURN ON INVESTMENT

3.2 STATISTICAL TOOLS 3.2.1 SPEARMANS RANK

TABLE SHOWING SPEARMANS RANK Year 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 % 67 74 73 88 89 CATA RANK 1 5 3 4 2 1 ROA RANK 2 2 5 1 3 4 D2 9 4 9 1 9 2 D =32

% 116 40 130 104 82

(RI-R2)D 3 -2 3 -1 -3

Source: Secondary data

Correlation Coefficient (r) = 1 - 6D2 N (n2-1) = 1-(6X32) 5(52-1) = 1-(192) 5(25-1) = 1-(192) 5(24) =1-192 120 =0.6

INTERPRETATION: In table an effort has been made to measure the extent of relationship between liquidity and profitability of Subramanian Siva co-operative sugar mills ltd. For this purpose, the ratio of current assets and total assets (CATA) has been used as the return on assets. The correlation co-efficient obtained by the spearmans method is 0.6 this indicates that the liquidity ratio (CATA) and the (ROA) are positively correlated.

3.2.1 TREND ANALYSIS

TABLE NO: 3.2.2 (A) TABLE SHOWING TREND ANALYSIS Xt 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Y 130 180 320 345 380 Y=1355 t =y-2009 -2 -1 0 1 2 t =0 t2 4 1 0 1 4 2= t 10 Yt -260 -180 0 345 760 Yt=665

TABLE NO: 3.2.2 (B) TABLE SHOWING TREND VALUE PROJECTION FOR FORTH COMING YEARS.

T 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

y 130 180 320 345 380 438 496 Y=2289

t =y-2010 -3 -2 -1 0 1 2 3 t =0

t2 9 4 1 0 1 4 9 t2=14

Yt -390 -360 -320 0 380 876 1488 Yt =1674

INTERPRETATION
In trend analysis the amount of current assets was increased year by year loans and advance are increased from the year2007-2011.the entire current assets are showed a downward trend except loans and advances.

3.2.3 LEVERAGES TABLE NO: 3.2.3 (A) TABLE SHOWING ON OPERATING LEVERAGES
PARTICULAR Sales (-) Variable cost Contribution (-) Fixed cost Operating profit Operating leverage YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 936911383 513686269 1170712641 1428622305 841237082 226421326 24825808 287973786 882738855 258346942 624391873 1.41 273177584 283604502

710490057 488860461 267833088 230161316 422686969 258699145 1.68 1.89

1155444721 557632580 267833088 887611633 1.30 294693873 262938707 2.12

INTERPRETATION: From the above table, it is observed that operating leverage for the year 2006-2007 is 1.68, for the year 2007-2008 is 1.89, for the year 2008-2009 is 1.41, for the year 2009-2010 is 1.30 and for the year 2010-2011 is 2.12.

TABLE NO: 3.2.3 (B) TABLE SHOWING ON FINANCIAL LEVERAGES

PARTICULAR YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Operating profit 422686969 258699145 624391873 887611633 762938707 (-) debtors Profit before tax Financial leverage 366748889 733801086 55938080 7.55 7835367 12238540 495657704

475101941 616556506 875373093 232718997 0.54 1.01 1.01 3.27

INTERPRETATION: From the above table, it is observed that financial leverage for the year 2006-2007 is 7.55, for the year 2007-2008 is 0.54, for the year 2008-2009 is 1.01, for the year 2009-2010 is 1.01 and for the year 2010-2011 is 3.27.

TABLE NO: 3.2.3 (C)

TABLE SHOWING ON COMBINED LEVERAGE:

PARTICULAR Contribution (/) Profit before tax Combined leverage YEAR 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 710490057 488860461 882738855 1155444721 557632580 55938080 12.70 475101941 616556506 875373093 1.02 1.43 1.31 232718997 2.39

INTERPRETATION: From the above table, it is observed that combined leverage for the year 2006-2007 is 12.70, for the year 2007-2008 is 1.02, for the year 2008-2009 is 1.43, for the year 2009-2010 is 1.31 and for the year 2010-2011 is 2.39.

3.2.4 COEFFICIENT OF CORRELATION MEASURE THE DEGREE OF RELATIONSHIP BETWEEN TOTAL ASSETS TURNOVER AND RETURN ON ASSETS
X 1.27 0.51 1.43 1.14 0.65 x=5 Y 1.16 0.68 1.30 1.04 0.82 y=5 Dxy 1.47 0.34 1.85 1.18 0.53 dxy=5.39 dX 1.61 0.26 2.0 1.29 0.42 dx=5.64 dY 1.34 0.46 1.69 1.08 0.67 dy=5.25

r=

NdXY-(dX)(dY) _____________________ N-dX2-(X)2 * dY2- (dY)2

5*(5.39)-(5*5) r= 5(5.64)-(5)2 * (5*5.25) (5)2

1.95 r= 2

r=0.99 INTERPRETATION: By using the correlation for finding the relation between Total assets turnover ratio and return on assets it was found that there is a positive correlation between these factors i,e the value is 0.99.

3.2.5 COMPARATATIVE ANALYSIS OF BALANCE SHEET FOR 5 YEARS i.e., FROM 2007-2008 TO 2011-2012
Particulars LIABILITIES Sources of funds: Share capital Share deposit Reserves & surplus Subtotal(A) loan funds: secured loans unsecured loan Subtotal(B) Total liabilities=(A)+(B Application of funds: Fixed assets Gross block Less: accumulated depreciation Net block Capital work in progress Subtotal(A) Investment &deposit (B) Inventories Sundry debtors Cash & bank balance Loan& advances Less: current liabilities & allocation Subtotal(C) Net profit & loss Subtotal (D) Total assets =(A)+(B)+(C)+(D) 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

189795600 7481201 179436907 376713708 81600000 239911000 321511000 698224708

201894200 7666133 179688211 389248544 81600000 239907000 321507000 710755544

201894200 9313062 179688211 390895473 160727000 239907000 400634000 791529473

201894200 9313062 180592882 391800144 160727000 239902000 400629000 792429144

201894200 9313062 180592782 391800044 127757410 239902000 367659410 759459454

382099469 324322225 57777244 0.00 57777244 899026 366748889 12142262 116493235 14584536 509968922 425844435 84124487 555423951 698224708

385272952 329520161 55752791 5537172 61289963 958905 733801086 7271230 3201819 32819452 777093587 822106790 -45013203 693519879 710755544

394766907 335513445 59253462 558246 59811708 1016655 537072961 7835367 56589209 39849342 641346879 529397332 111949547 618751563 791529473

404541321 344120218 60421103 483940 60905043 766085 455982169 12238540 643475772 43783919 1155480400 643658065 511822335 218935681 792429144

419529405 350019160 69510245 1970697 71480942 843667 495657704 14812249 651531395 5633545 1239959502 695366738 544592764 -164166690 759459454

INTERPRETATION: From the above table it was inferred that the total liabilities and total assets were increased from 698224708 to 792429144 from the year 2007 2008 to 2010 2011 and then decreased to 759459454 for the year 2011-2012.

4.1 FINDINGS It was found that the high of total cost was spend in the year 2010-2011 as Rs. 154812189 crores and low as Rs. 73371825 crores in the year 2006-2007 It was found that the high of net income was earned in the year 2009-2010 of Rs. 1317186363 crores and low of Rs. 686424893 crores in the year 2010-2011 It was found that the high of net income margin was earned in the year 2006-2007 & 2009-2010 of 0.92% and low of 0.80 % in the year 2007-2008 It was found that the high of net income margin was earned in the year 2006-2007 & 2009-2010 of 0.92% and low of 0.80 % in the year 2007-2008 It was found that the high of current assets of Rs. 1162001348 crores in the year 20102011 & and low of Rs. 495384386 crores in the year 2006-2007 It was found that the high of non- current assets of Rs. 248990050 crores in the year 2007-2008 & and low of Rs. 129884950 crores in the year 2010-2011 It was found that the high of total assets of Rs. 1291886298 crores in the year 2010-2011 & and low of Rs. 733380786 crores in the year 2006-2007 It was found that the high of total assets turnover of 1.43 % in the year 2008-2009 & and low of 0.51 in the year 2007-2008 It was found that the high of return on assets of 1.30 % in the year 2008-2009 & and low of 0.40 in the year 2007-2008 It was found that high of operating leverage for the year for the year 2010-2011 is 2.12 and low for the year 2009-2010 is 1.30.

57

 It was found that high of operating leverage for the year 2006-2007 is 7.55 and low for the year 2007-2008 is 0.54. It was found that high of operating leverage for the year 2006-2007 is 12.70 and low for the year 2007-2008 is 1.02. It was found that total liabilities and total assets were increased from 698224708 to 792429144 from the year 2007 2008 to 2010 2011 and then decreased to 759459454 for the year 2011-2012.

58

4.2 SUGGESTIONS The company may avoid the unnecessary expenses to reduce the total cost. A necessary step can be taken to increase the net profit margin. The net profit margin may be increased to have a good return on investment. The measures of the assets can be done effectively to produce revenues. The measures of investments in working capital assets needed for sustaining ongoing operations. The proper measures can be taken in investments in long-term, revenue producing assets.

59

4.3 CONCLUSION

Thus, the performance of the firm has been measured by its financial results, i.e., by its size of earnings Riskiness and profitability are two major factors which jointly determine the value of the concern. Financial decisions which increase risks will decrease the value of the firm and on the other hand, financial decisions which increase the profitability will increase value of the firm. Thus, this model can be used by the purchasing and sales department to examine or demonstrate the ROA which was earned. It gives an idea to the people about a basic understanding about the company results. This model can be easily linked to compensation schemes. Thus, it has been concluded that this model can be used to convince management that certain steps have to be taken to professionalise the purchasing or sales function. It will t akeover to compensate the lack of profitability by increasing turnover and trying to achieve synergy.

60

BIBLIOGRAPHY BOOK NAME 1. Financial Management AUTHOR NAME I.M. Pandey Vikas Publishing house pvt ltd Published in 1999.

2. Principles of Management Accounting

Dr. S.N. Maheswari Sultan Chand & Sons Tenth edition, 1995

3. Management accounting and Financial Management

R.K. Sharma Shasi K. Gupta Kalyani Publishers Second edition, 1992

4. Financial Management

Prasanna Chandra Tata Mc Graw hill publishing Company limited, New Delhi Fifth edition, 2002

5. Financial Management and Accountancy

P.V. Rathnam Kitab Mahal Eleventh edition, 1997 Kothari C.R

6. Research Methodology

Vishwa Prakashan-1995

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