A PROJECT REPORT ON ANALYSIS OF FINANCIAL STATEMENT OF LIBERTY SHOES LIMITED

Submitted in partial fulfillment of the requirement for the award of Masters of usiness Administration !M A"

Submitted by: ################# M A $ %rd SEMESTER

Under t e !uid"n#e $%: ####################

BHARATI &IDYA'EETH INSTITUTE OF MANA(EMENT ) RESEARCH* NE+ DELHI

An &SO '(()*+((, Certified &nstitute NAAC A--redited .rade /A0 1ni2ersit3 Ran4ed in Top 5( $ s-hools in &ndia b3 usiness &ndia CR&S&6 .radin7 M A Pro7ramme

A 8 9 National 6e2el: A 88 9 State le2el Re-ipient of $ s-hool leadership award from star news

AC,NO+LED(EMENT
This pro;e-t would not be -ompleted toda3 if it was not for the help and support that & re-ei2ed throu7hout its de2elopment and -ompletion< =irst and foremost: & would li4e to e>press m3 deepest appre-iation and 7ratitude to m3 mentor in the -ompan3 ############# for her 7ood will: time: de2otion: 7uidan-e and help durin7 the reali?ation of this pro;e-t< Than4 3ou< These times were e>-eptional to me and & ha2e learned a 7reat deal< Spe-ial Than4s to m3 parents who tau7ht me to wor4 hard in life@ it made me what & am toda3< =inall3: & would li4e to e>press 7ratitude all those who ha2e -ontributed to the a-hie2ement of this wor4< Than4 3ou

'REFACE
6& ERTA shoes 6td< &s the onl3 &ndian -ompan3 that is amon7 the top fi2e manufa-turers of leather footwear in the world with a turno2er e>-eedin7 1S B)(( million< This report is all about stud3 of &n2entor3 Mana7ement of 6ibert3 shoes 6td< &n this: & studied annual reports of different 3ears of 6ibert3 shoes 6td< M3 ob;e-ti2e is to stud3 =inan-ial Anal3sis of 6ibert3 shoes 6td< Cith the help of Ratio Anal3sis< =or this report: resear-h desi7n used is e>plorator3 resear-h desi7n< E>plorator3 resear-h desi7n main purpose is to formulate a problem for more pre-ise in2esti7ation< &n this: & define -learl3 what & want to measure and emplo3 adequate method for measurin7 it< Data is -olle-ted from annual reports of different 3ears of 6ibert3 shoes 6td<: manual: websites and boo4s< The stud3 -ontains -ertain limitations be-ause enou7h data was not a2ailable but all the efforts ha2e been made to -olle-t the rele2ant information throu7h the sour-e a2ailable< The Compan3 is hi7hl3 dependent on e>ternal debt: whi-h brin7 in infle>ibilit3 in -ompan3s operation< ut still the -ompan3 is in stron7er position be-ause the profits ha2e in-reased with sales<

TABLE OF CONTENT

'"rti#u-"r. A-4nowled7ement Prefa-e INTRODUCTION RESEARCH METHODOLO(Y CONCE'TUAL DISCUSSION DATA ANALYSIS =indin7s E Re-ommendations Con-lusion iblio7raph3 Fuestionnaire

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CHA'TER01 INTRODUCTION

LIBERTY SYMBOL

INTRODUCTION TO FOOT+EAR INDUSTRY

=ootwear is a man made outer -o2erin7 of foot< &t is 7eniall3 made out of leather but the same -an be made with s3ntheti- material< Chen the human bein7 -ame into e>isten-e: the3 were needed to prote-t themsel2es from heat: -old dampness: dust and rou7hness of 7round while wal4in7: standin7: or e2en runnin7< So the3 inno2ate shoes for the prote-tion of their feet<

The importan-e of footwear is hi7hl3 re-o7ni?ed in western and other ad2an-ed -ountries: so the footwear industr3 7rew in full swin7 that ori7inated bi7 -ompanies li4e Ni4e: Reebo4: .u--i: and Addidas et-< ut the s-enario in &ndia is somewhat different and re7retfull3 as the industr3 -ould not de2elop itself despite the fa-t that &ndia bein7 se-ond lar7est populated -ountr3 in the world: surplus manpower and resour-e of raw material: whate2er the reason bein7< Till the mid of +(th -entur3: the bul4 of shoe industr3 was in -otta7e se-tor< Professional -obblers were responsible for produ-tion of e2er3 t3pe of shoes< ut in the past one de-ade the situation has -ompletel3 -han7ed be-ause new 7eneration of professionals did not adopt this line as shoema4er and preferred to ;oin white9-ollar ;obs< &t resulted in the di2ersifi-ation from s-hedule -aste to other -lass of people as industrial wor4ers< 1p to ei7hties: ata was the main sour-e of suppl3 of footwear to the -ites and towns with hi7her standard of li2in7< ut ta4in7 into -onsideration the 7rowin7 standard of li2in7 and demand: man3 new footwear -ompanies -ame into li7ht li4e 6ibert3:Corona: A-tion: 6a4hani et-< Produ-tion of footwear at this mo2ement is mainl3 at A7ra: Harnal: =aridabad: Delhi: Hol4atta: Hanpur: Mumbai: Madras: and an7lore et-<

=ootwear industr3 in &ndia -an ne2er be a hea23 industr3 in 7eneral and small entrepreneurs with small in2estments in ma-hiner3 and -apital -ould remain for all purposes the ba-4bone of industr3< &t is the ideal industr3 for entrepreneurs without mu-h of in2estment in the industr3 assurin7 7rowin7 demand and profits< A2ailabilit3 of raw material and manpower is not a problem< So the small se-tor has to pla3 a 2ital role in industr3 de2elopment< Dependin7 upon the st3les: t3pe and purpose: the footwear -an be broadl3 -lassified into three 7roups* Chappal or open t3pe footwear< Sandal or strap atta-hed footwear< oot E shoe or -losed t3pe footwear -o2erin7 most part of the feet<

COM'ANY INFORMATION

B$"rd $% Dire#t$r.
Adesh 7upta CEO E E>e-uti2e Dire-tor Shammi bansal E>e-uti2e Dire-tor Adarsh .upta E>e-uti2e Dire-tor Karish Humar 7oel Dire-tor!6aw E Ta>ation" Sunil bansal Dire-tor Amitabh Tane;a &ndependent Dire-tor Prem Chand .ar7 &ndependent Dire-tor Ra7hu .oel &ndependent Dire-tor Siddharth San7hi &ndependent Dire-tor Surendra Humar Ar3a &ndependent Dire-tor Li2e4 ansal &ndependent Dire-tor

Audit #$mmittee
Sunil ansal Prem Chand .ar7 Ra7hu Da3al Li2e4 ansal

S "re tr"n.%er #$mmittee

Adarsh .upta Sunil ansal Prem Chand .ar7

Remuner"ti$n2Se-e#ti$n C$mmittee
Ra7hu Da3al Prem Chand .ar7

Member. i3 ) #erti%i#"te
,

Confederation of &ndia industr3 !C&&" =ederation of &ndia -hambers of -ommer-e E industr3 !=&CC&" PKD -hamber of -ommer-e and industr3 !PKDCC&" The asso-iated -hambers of -ommer-e and industr3 of &ndia

!ASSOCKAM" =ederation of &ndian e>port or7ani?ation !=&EO" Coun-il for leather e>port !C6E" &SO '(()

C$m3"ny .e#ret"ry ) &i#e 're.ident

Munish 4a4ra

'

(ROU' DATA AT A (LANCE

Ye"r $% E.t"b-i. ment Em3-$yment Bu.ine.. In4e.tment St"tu. $% Bu.ine.. )'5G More than 5((( emplo3ees 1S B )(( Million =la7ship -ompan3 of the .roup: 6ibert3 Shoes 6td<: a publilimited -ompan3 listed in all ma;or sto-4 e>-han7es of &ndia< 're.ent A#ti4itie. Se-ond lar7est footwear manufa-turer in the -ountr3 ha2in7 full3 inte7rated plants to manufa-ture 2arious 4ind of footwear with Annual Produ-tion of o2er )( million pairs< Annu"- Turn$4er Br"nd E5uity O2er 1SB )+5 Million Mother rand LIBERTY is ran4ed amon7 Top )(( brands in the -ountr3< Other )( Su--essful National brands: 4nown for its respe-ti2e se7ment of footwear In%r".tru#ture Larious plants spread o2er +(( a-res of land in and around Harnal: 6ibert3puram: .haraunda in Kar3ana: Dehradun E Roor4ee in 1ttara4hand: Pounta Sahib in Kima-hal Pradesh supported b3 stron7 Mar4etin7 Networ4 ha2in7 E63$rt M"r7et. )G ran-h offi-es (+ O2erseas offi-es %(( 6ibert3 E>-lusi2e Distributors %5( 6ibert3 E>-lusi2e Retail Stores +( O2erseas showrooms

All o2er the world: mainl3 with Europe in .erman3 1nited Hin7dom =ran-e Spain

Te# n$-$!y

Kun7ar3 6ibert3s patented te-hnolo73 /K1MANTECK0 is a

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-ombination of human -raftsmanship and te-hnolo7i-al e>-ellen-e with followin7 te-hnolo7ies a2ailable in the world for =ootwear &ndustr3< Cemented Constru-tion Dire-t PLC &n;e-tion Dire-t P1 &n;e-tion Dire-t ELA &n;e-tion Dire-t TP1 &n;e-tion

INTRODUCTION
6ibert3 .roup: -ome a lon7 wa3 sin-e it be7an its operations a little o2er 5( 3ears a7o in the -it3of Harnal: Kar3ana< The emphasis sin-e the 2er3 be7innin7 has been to offer /7reat produ-ts at 2alue for mone3 M affordable pri-es0< This led to the de2elopment of 6ibert3 Patented HUMANTECH approa-h whi-h s3ner7ise traditional wor4manship with state of the art te-hnolo73 to pro2ide the best qualit3 at the most -ompetiti2e pri-e< 6ibert3 7roup -ompanies: set 2arious ben-hmar4s in =ootwear Manufa-turin7 within the .roups Produ-tion fa-ilities and also to &ndustr3<

HISTORY:
6ibert3 .roup started operation in )'5G and toda3 -omprises of fi2e firms: namel3 6ibert3 =ootwear Compan3: 6ibert3 Enterprises: 6ibert3 6eathers: 6ibert3 .roup mar4etin7 Di2ision and 6ibert3 Shoes 6imited< The 7roup has an annual turno2er of Rs<5(( Crores appro>imatel3< 6ibert3 has its own studio for desi7n and de2elopment of footwear< &t manufa-tures footwear both for e>port and domesti- mar4ets< The -ompan3 has -ar2ed a name for itself in the international mar4et and is &ndias lar7est e>porter of footwear to .erman3< 6ibert3 Shoes 6imited: the publi- -ompan3 of the 7roup started -ommer-ial produ-tion in )''% and is the -ountr3s leadin7 footwear manufa-tures toda3< The ))

-ompan3 has state of the art produ-tion fa-ilities at 6ibert3puram to manufa-turer hi7h qualit3 footwear and its -ontribution in 6ibert3 .roups total sale is o2er %(N and its risin7 steadil3<

COR'ORATE 'HILOS'HY:

Steeped in a philosoph3 that has at its -ore inno2ation: te-hnolo73 and ad2an-ement: we: at 6ibert3: pride oursel2es o2er and abo2e e2er3thin7 else on our health3 and heart9felt respe-t for the human ethos< That whi-h pro;e-ts itself in the e>pe-tan-3 and e>-itement with whi-h one 7reets the arri2al of the new -ombined with a sin-ere and deep re7ard for the old< That whi-h is appre-iati2e of and adopts at e2er3 sta7e the unique balan-e between moderni?ation and tradition<0 6ibert3 as a brand is -onstantl3 e2ol2in7 to 4eep pa-e with the -han7in7 trends: st3les: beliefs and aspirations of people while maintainin7 the san-tit3 of -ertain traditions li4e wor4manship and 7ood 2alue< COR'ORATE SA(A: Cith people as its leitmotif: 6ibert3 has for o2er 5( 3ears alwa3s sta3ed in tou-h with the aspirations of e2er3 su--essi2e 7eneration e2en as it de2eloped the lar7est ran7e in the industr3 -aterin7 to e2er3 in-ome bra-4et and a7e se7ment< 1sin7 the patented OKumante-hO approa-h that -ombines the best of talent with the latest in te-hnolo73< =rom the pri-e9-ons-ious: 2alue for mone3 see4in7 bu3er to the trend3: 7lobal: pri-e9indifferent -ustomer: from the with it all attitude teena7er to the -onser2ati2e seen it all adult ;ust about e2er3bod3 toda3 finds a 7ood reason for bein7 in 6ibert3< 6ibert3 is toda3 -onsolidatin7 and e>pandin7 its followin7 whi-h e>tends from the fashion alle3s to the sidewal4s with st3les that -ompliment the newest most happenin7 trends and also b3 turnin7 footwear sellin7 into a b3word for personali?ed ser2i-e in an ambien-e and shoe stations in &ndia and abroad<

THE CREDO:

)+

To ensure that the method we use is the latest te-hnolo73 world9o2er< To follow the hi7hest standard of honest wor4manship in whate2er we ma4e< To wal4 that e>tra miles to ensure -ustomer satisfa-tion worldwide< To remain a true -osmopolitan to the spirit< To remain a 7reat -orporation to asso-iate with: to wor4 for: to 4now that* /Ce Are About People0<

LIBERTY RAN(E:
The famil3 brand st3le personified with somethin7 for e2er3 need< e it formal or -asual: at offi-e or at the bea-h: a -onferen-e or a soiree 9 6ibert3 fits in effortlessl3<

MANUFACTURIN(:

Chat 7i2es 6ibert3 the ed7e is 2erti-all3 inte7rated manufa-turin7 infrastru-ture on te-hnolo73 basis with -ompletel3 in9house state of the art produ-tion fa-ilities whi-h in-ludes , DESMA ma-hines for P1 Dire-t &n;e-tion: )5 Ma-hines for PLC Dire-t &n;e-tion: % Ma-hines for ELA &n;e-tion: % P1 &n;e-tion units for unit sole: si> lines for -ement lasted in;e-tion and one ma-hine for the latest TP1 &n;e-tion< Abo2e produ-tion fa-ilities are maintained with fo-us on en2ironment -leanliness &SES +((( norms: pro2ides a -omplete ran7e of famil3 footwear of all seasons and o--asions: -o2ers the entire domain of industrial safet3 and health footwear requirements< 6ibert3 also has the &SO* '(()9+((( -ertifi-ation for its Fualit3: Mana7ement S3stem: a testimon3 to all the s3stem and pro-edures in pla-e< 6ibert3 is a te-hnolo73 dri2en -ompan3 8HUMANTECH9 $ 6ibert3s patented te-hnolo73 is -ombination of human -raftsmanship and te-hnolo7i-al e>-ellen-e<

Liberty ". 3r$du#ti$n %"#i-itie. "t t e %$--$:in! -$#"ti$n.:

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.haraunda: Kar3ana: !Appro><'5 H<M< from Delhi" 6ibert3puram: Kar3ana !Appro><)(+ H<M< from Delhi" Harnal: Kar3ana: !Appro><)+G from Delhi" Satiwala: Pounta Sahib: Kima-hal Pradesh !Appro> ++5 H<M< from Delhi" atamandi: Paunta Sahib: Kima-hal Pradesh !Appro> ++' H<M< from Delhi" Dehradun: 1ttran-hal !Appro>< %(( H<M< from Delhi" Roor4ee: 1ttran-hal !Appro>< )5( H<M< from Delhi"

(ROU' COM'ANIES: Liberty Ret"i- Re4$-uti$n. Limited

6ibert3 Retail Re2olutions 6imited: the -ompan3 behind the Re2olutions store is a )((N subsidiar3 of 6ibert3 Shoes 6imited The -ompan3 is produ-in7 more than 5(:((( pairs of footwear a da3 -o2erin7 2irtuall3 e2er3 a7e 7roup and in-ome -ate7or3< Produ-ts are mar4eted a-ross the 7lobe throu7h )5( distributors: %5( e>-lusi2e showrooms and o2er I((( multi9 brand outlets: and sold in thousands e2er3 da3 in more than +5 -ountries in-ludin7 fashion9dri2en: qualit39obsessed nations li4e =ran-e : &tal3 : and .erman3<

Settin7 new ben-hmar4s in the retail business in &ndia 6ibert3 Retail Re2olutions -aters to the aspirations of the st3le9dri2en in &ndia with an e>-lusi2e -hain of upmar4et showrooms: Re2olutions Con-ept Stores: at fashion -entres a-ross &ndia< &ts a -on-ept that has opened new frontiers in retail sellin7 9 ne2er seen before fashion hubs: -aterin7 to indi2idual st3les and loo4s: in an ambien-e as ma7i-al and e>-itin7 as the produ-ts lined up $ a world -lass ran7e in footwear fashion and a--essories<

)G

Liberty + ite:"re Limited

The newest member of the 6ibert3 .roup introdu-ed a ran7e of -erami- sanitar3 ware and a--essories of European desi7n thats inspired b3 a lifest3le of sheer ele7an-e< Chere beaut3 and fun-tionalit3 a-hie2e perfe-t harmon3< =orm -ompliments finesse< And tradition blends seamlessl3 into inno2ation< Produ-ed at a Rs<5( -rore state9of9the9art plant at Neemrana &ndustrial Area of Ra;asthan the ea-h ran7e of fine bathroom produ-ts and a--essories in-ludin7 CCs: bidets: washbasins: and shower tra3s: -omprisin7 fi2e distin-ti2e -olle-tions ea-h with its own definiti2e -hara-ter and st3le< BRANDS This famil3 brand is st3le personified with somethin7 for e2er3 need< e it formal or -asual: at offi-e or at the bea-h: a -onferen-e or a soiree 6ibert3 fits in effortlessl3< COOLERS The3re -ool and the3re hot< The3re hap and the3re happenin7< Perfe-t for those hot summer da3s< Chen the sun blisters and the heat stro4es: the3 4eep the feet -ool and -omfortable< ut wh3 limit the pleasure to summersPQ Keres one brand of sandals that sta3s -os3 and -omf3 all 3ear round< FOOTFUN Somethin7 for those little feet as the3 learn to wal4< Air3: li7ht and -omfortable with l3-ra uppers and no la-es< &n fair39tale -olors and desi7ns< FORCE01; The flair: the st3le and ease that for-es the world to ta4e noti-e< A happenin7 ran7e of sports

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shoes in far out -olors that pro2ides the perfe-t footnote to a head9turnin7 presen-e<

FORTUNE .enuine leather uppers and e>tra li7ht pol3 soles help -omplete the power dressin7 in men with Rlan and pana-he<

(LIDERS Cool and -omfortable: trend3 and with it< A ran7e of stunnin7 bro7ues and smart la-e ups that will be noti-ed and tal4ed about e2er3 step of the wa3< 1nmista4abl3 a part of .eneration Aou< SENORITA Cal4 tall: wal4 li7ht and wal4 with ama?in7 st3le< Redis-o2er the little 7irl that lur4s not far behind in e2er3 woman: lau7hin7 and lo2in7 e2er3 moment of life< TI'TO'' &ts what Mrs< June;as of the world lo2e to be seen in< Strapp3 st3les and -omfortable heels< And -olors that be-ome the en23 of all and sundr3< Perfe-t for -onquerin7 the nei7hbourhood in desi7ns that are the latest ra7e the world o2er< +ARRIOR Smart: st3lish professional 7ear -rafted from leather uppers and dire-t in;e-tion P<1< soles with steel toe -aps and offerin7 the widest ran7e of st3les in safet3 shoes< To master the art of bein7 -onfident and sure9 footed on slipper3 7rounds and dan7er ones< )I

+INDSOR The premium is on li7htness: st3le and -omfort whi-h ma4es it ideal for men who ta4e e2er3 -hallen7e effortlessl3 in their stride<

FREEDOM A new introdu-tion in the safet3 footwear se7ment in Nitrile PLC material: offerin7 -ustomers with waterproof: fire retardant and sho-4 free produ-t in e-onomi- ran7e< A safet3 footwear for industrial use<

RESEARCH ) DE&ELO'MENT:
Our +9wa3 -hannel partners di7 their feed ba-4 deep and -onstantl3< Kammerin7 Strin7 of -reati2e wor4man at the manufa-turin7 -enter to produ-e not ;ust fa-eless shows dan-in7 down -on2e3or belts but shoes with -hara-ter< So the -enters ha2e poled 5% 3ears of the resear-h and -ontinuous flow of emotions to redefine the R E D -enter at 6ibert3puram< =usin7 te-hnolo73 with the sweat of sa7a-it3< Some -all it Resear-h E De2elopment Cin7 some put a pri-e to in2estments in the Em$ti$n"- Te# n$-$!y that it -omes out as< Ce -all the pro-ess HUMANTECH and it pri-eless< 6ibert3 also 2er3 a-ti2e in the area of Resear-h E De2elopment and has a number of /firsts0 to its -redit li4e* )< 6ibert3 pioneered the P1 !Pol3urethane" te-hnolo73 in &ndia in footwear industr3 in )',+ and toda3 is the lar7est produ-ers of footwear with this te-hnolo73 in Asia< +< 6ibert3 has de2eloped new material TPE !Thermo9Plasti-9Elastomer" for hi7h qualit3 formal footwear<

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%< 6ibert3 has de2eloped a hi7h qualit3 E2a Compound for bea-h footwear< G< 6ibert3 was the first -ompan3 -ommissionin7 a latest CADM CAM S3stem< 5< Die 6ess 6eather -uttin7 ma-hine whi-h is dire-tl3 atta-hed with its Desi7n E De2elopment Se-tion for speed3 pro-ess of de2elopment of new models of footwear< I< 6ibert3 is the onl3 fa-tor3 in &ndia ha2in7 water proofin7 te-hnolo73 appro2ed b3 SAMPATES: a name 4nown for water proofin7 te-hnolo73 worldwide< J< 6ibert3 Mana7ement is 2er3 thin in si?e -omparin7 with a hu7e wor4 for-e in front line operation<

DESI(N ) DE&ELO'MENT:
6ibert3 has well established state of the art desi7n -enters whi-h are -onstantl3 en7a7ed in desi7nin7 and de2elopin7 latest trend settin7 footwear for the 3oun7 fashions -ons-ious &ndian -onsumers< On an a2era7e G((( new st3les are de2eloped e2er3 3ear out of whi-h rou7hl3 )+(( st3les are sele-ted and introdu-ed in the mar4et in two seasons i<e< sprin7 M summer and fall: winter<

FINANCIAL
&f 3ou thin4 a -ompan3 that has helped 5( million people thin4 on their feet in st3le is bi7 stuff: 3ou ha2e seen 2er3 little 3et< =or us the future plans are not somethin7 that -an be termed as -r3stal 7a?in7 but neatl3 en-losed ideas idea and deli2erables in -ontinuum< Ce are fast buildin7 new brands and produ-ts: impro2in7 the all times fa2orites and e>pendin7 our mar4etin7 infrastru-ture and honin7 to our s4ills to further the deli7ht of the -onsumer< Cith an o2er all +5N boom planned ea-h 3ear for the ne>t 5 3ear 3ou -ould sa3s that &ndia is onl3 true blue footwear manufa-turin7 multinational is ;ust pea4in7 o2er the ed7e<

),

DISTRIBUTION NET+OR,:
Ce ha2e distribution networ4 ri2als the human arterial s3stem< An reti-ulate networ4 of retailer showrooms: and e>-lusi2e outlets with a rea-h li4e blue $ 7reen marine o-topus a stru-tured +9wa3 feeder9feed ba-4 s3stem that both 7i2es and re-ei2es an or7ani?ation of our si?e would ha2e 7one out9of9orbit without a firm support s3stem< Than4s to the 2ision and dri2e of our -orporate thin4 tan4: we now ha2e a sales networ4 that brin7s the breath9ta4in7 world of super footwear ri7ht at 3our feet within se-onds< A 2irtual room ser2i-e at ?ero -ost: if 3ou will< A mar4etin7 s3stem that we ha2e -on-ei2ed and -reated: it is understandabl3: the en23 of -ompetition<

MORE STORES FROM LIBERTY:

6ibert3 7roup is e>pe-tin7 to add Rs<J( -rores from its footwear retail business< The -ompan3 will in2est Rs<J Crores towards e>pendin7 /Re2olution0 9 its e>-lusi2e footwear showroom< This 3ear -ompan3 will add )( more stores to ta4e it to +5< The -ompan3 has also entered the manufa-turin7 of white ware se7ment of sanitar3 and bathroom produ-ts< 6ibert3 is loo4in7 at introdu-in7 new desi7n this season too< The -ompan3 has e>pended its retail presen-e in o2er )(( stores a-ross small and bi7 -ities<

LIBERTY 'LANS TO E<'ANDS (LOBAL 'RESENCE

6ibert3 7roup has also establish manufa-turin7 plant in 1ttra4hand state and openin7 +5 e>-lusi2e outlets a-ross the -ountr3 as well as in J o2erseas -enters< Ea-h outlet is estimated to see an in2estment of Rs<J<5 million< Cith a turno2er of Rs<5(( -rores the -ompan3 is emer7in7 as an multinational brands with about %5( E>-lusi2e distributors all o2er the world< /as opposed to the earlier model of e>pendin7 retail outlets we plan to brin7 down the number of retailer from 5((( to G(((< Ce do not want retail presen-e for name sha4e@ the

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ideas to ha2e real brand presen-e0: 6ibert3 plans to open super premium at Sin7apore: Hualampur: Dha4a: Columbo and Dubai < The -urrentl3 e>ports about +5N of footwear produ-tion to .erman3: &tal3: =ran-e: 1nited States and the Middle East<

STREN(TH:
At 6ibert3 we up7rade and re9en7ineer our desi7n e2er3 I months so that 3ou ha2e somethin7 new: with it and futuristi- e2er3 time 3ou 2isit us< Our shoes are mu-h more than ;ust <E< Cit-hin7 leather wor4< Ce understand that a shoe for 3ou is an e>tension of 3our personalit3< And for one who 4eeps mo2in7 onto to stables of desire loaded with e>-itin7 world fashions trends we -raft the dreams with the help of Capital =ashion Te-hnolo7ists shut awa3 not in dream bars but with their heart minds on the pules of future fashion<

LIBERTY SHOES LIMITED AN INNER &IE+ LOCATION:

The -ompan3 has entered into a lease a7reement for G)( -annals and )J marlas !+G,5((sq< 3ards" of land on national hi7hwa3 no<) main .<T< road in 6ibert3puram: Hutail: distri-t Harnal< The site is around ))5 HM from Delhi on national hi7hwa3 between Chandi7arh and Delhi< The site is )5HM from Harnal and is well -onne-ted with ma;or -ities and has all basis infrastru-ture fa-ilities<

BUILDIN(:
&t mainl3 -onsists of ei7ht hu7e halls meant for manufa-turin7 operation fa-ilit3: raw material and finished 7oods stora7e: -uttin7 se-tions: PLC Sole Se-tion: P1 Sole Se-tion: Administrati2e amon7 the best< The total area of the buildin7 is )J( la-4s sq<feet !appro>" and total -ost of buildin7 is around 55( la-4s< The buildin7 is of RC framed stru-ture< lo-4 et-< the desi7n and finishin7 of buildin7 is

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MACHINARY:
=i2e !new te-hnolo73" in;e-tion9mouldin7 ma-hines are bein7 used b3 the -ompan3 for produ-tion purpose< All the ma-hines are imported from &tal3 and .erman3< Produ-tion of shoes as well as qualit3 of shoes has been in-reased and problems of pastin7: sole -ra-4in7 ha2e been redu-ed substantiall3 b3 this te-hnolo73< Re-entl3 one new -omputeri?ed ma-hine has been pur-hased for -uttin7 leather< &t has also been imported from &tal3

INNO&ATI&E A''ROACHES:
Entire produ-tion units of 6ibert3 are interlin4ed b3 SAP: a unique ERP Solution implemented for the first time in &ndia in a =ootwear &ndustr3 with all modules related with =inan-e: 6o7isti-s E suppl3 -hain< &t is rare to see su-h -lean: state of the art produ-tion fa-ilit3 in &ndia with followin7 mana7ement s3stems and tools< )< HA&TEN is implemented sin-e +((( and in pra-ti-e throu7hout the or7ani?ation< +< 5 S Con-ept is introdu-ed and in pra-ti-e sin-e +(() and presentl3 in matured sta7e< The impa-t of 5 S implementation is 2isible in all dept< and shop floors of the or7ani?ation< Ce ma3 e2en -onsider these units are the model units for an3 =ootwear &ndustr3 %< 6EAN awareness is e>istin7 in all produ-tion floors of the or7anisation< Lalue streams are standardi?ed for most of the re7ularl3 produ-ed arti-les< Now the .roup is in the pro-ess of inte7ratin7 6ean Con-ept with PP Module of SAP for -ontrollin7 the flow< G< &SO '(()*+((( CERT&=&CAT&ON is awarded to FMS of one of its units and .roup is in the pro-ess of 7ettin7 for other units< .roup is ha2in7 an appointed MR e>-lusi2el3 for monitorin7 the Fualit3 S3stem< DNL is the Certif3in7 a7en-3 and auditors of the FMS

+)

5< CASTE MANA.EMENT SASTEM is established in one of their unit and it is a pilot pro;e-t< Casta7e &dentifi-ation: handlin7 and disposal are do-umented and monitored b3 frequent internal audits< I< CATER MANA.EMENT SASTEM is e>istin7 in the 7roup< Cater wasta7e is almost $nil9 and water is re9-3-led in most of their operations< ,< &SES9+((( norms are followed to ensure the best So-ial: Kealth and En2ironmental Standards< This standard is monitored b3 &ndo .erman E>port Promotion Coun-il of &ndia< '< 6ibert3 is the Committee member for settin7 the standard for Safet3 Shoes< The re-entl3 released &S* )5+',*+((( for Safet3 shoes is followed b3 6ibert3 and it is the first in Shoe &ndustr3 ha2e applied for Certifi-ation to use &S& Mar4< =/ EN.ER.A MANA.EMENT SASTEM of 6ibert3 is unique in =ootwear &ndustr3< 6ibert3 1nits ha2e 7ot lot of in-enti2es M dis-ounts from Kar3ana State Ele-tri-it3 oard for maintainin7 ma>imum Power =a-tor<

INTERNATIONAL E<'ERIENCE:
)< 6ibert3 has more than +5 3ears of e>perien-e in E>port usiness and en;o3in7 Status Kolder status as /Re-o7ni?ed E>port Kouse0 of &ndia< &n ,(s when So2iet Mar4et was in2aded b3 &ndian E>porters: 6ibert3 was the Mar4et 6eader in 1SSR< +< 6ibert3 is ha2in7 its own offi-e in Russia and Kun7ar3 for more than + de-ades< %< 6ibert3s ma;or operations are mainl3 with Europe: Middle East: East Afri-an: South Afri-an -ountries and 1SA< G< Ma;or brands of Europe: SA6AMANDER: JE6A: DE&CKMANN: ROM&HA and 1SA brands li4e TODDCE6SK are sellin7 onl3 6ibert3 Shoes under their brand umbrella<

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CONTRIBUTION TO INDUSTRY:
)< 6ibert3 has pioneered in brin7in7 P1 Te-hnolo73 to &ndia< 6ibert3 has 7i2en a presentation on =ootwear foot prints for the future in Asia Pa-ifi- Customer Conferen-e +((( or7ani?ed b3 Kuntsman Pol3urethane at Sin7apore on this te-hnolo73< +< SAMPATES is a patented te-hnolo73 on Cater Proofin7 re-o7ni?ed world wide< 6ibert3 is the onl3 -ompan3 in &ndia ha2in7 re-o7nitionMappro2al of SAMPATES on Caterproofin7< %< Safet3 Shoes are brou7ht to &ndian Mar4et for the first time and an e>-lusi2e brand CARR&OR was laun-hed b3 6ibert3 in &ndustrial Se7ment shoes< Our safet3 shoes are meetin7 all D&N M EN standards in respe-ti2e se7ments< G< P1 te-hnolo73 was introdu-ed to .o2ernment Se-tor: 6ibert3 has set the standard as member of the &S Committee< &S Standard &S* )5+',* +(((: appli-able for Safet3 shoes is the Standard on whi-h 6ibert3 is produ-in7 Safet3 shoes for more than one de-ade< 5< 6ibert3 Enterprises is the model unit for abo2e Standard and -omplete testin7 fa-ilit3 is a2ailable onl3 with 6ibert3 in &ndia after =DD&< I< 6ibert3 is the =irst =ootwear Manufa-turin7 fa-ilit3 in &ndia awarded with the latest &SO '(()*+((( Certifi-ation< J The first and onl3 footwear &ndustr3 in &ndia: ha2in7 SAP ERP with all modules related to &nwardMOutward suppl3 -hain: Materials: =inan-e and Costin7 ,< 6ibert3 has pioneered blend of N&TR&6E Rubber with PLC in )''I to ma4e it more 2ersatile for -old -ountries usa7e< '< 6ibert3 has de2eloped new material TPE !Thermo Plasti- Elastomer" for hi7h qualit3 formal footwear< This material has better properties than PLC or TPR -on2entionall3 used for formal< )(< 6ibert3 is e>pandin7 its operation b3 manufa-turin7 non wo2en ha7s whi-h are en2ironment -lean<

+%

SOCIAL CONTRIBUTION:
)< 6ibert3 =ootwear Trainin7 &nstitute formed b3 our Dire-tors is de2elopin7 the lo-al publi- as te-hni-ians of =ootwear &ndustr3< +< Mana7ement of 6ibert3 Sponsors the -hildren of 6ibert3 Emplo3ees for hi7her studies: 7i2es trainin7 and emplo3ment after 7raduation in =DD&< %< So-ial and En2ironmental Standard &SES9+((( is in pra-ti-e with 6ibert3< This standard is bein7 monitored b3 &ndo .erman E>port Promotion Pro;e-t in &ndia< G< The produ-ts bein7 used b3 6ibert3 are E-o9friendl3 and pro2idin7 latest te-hnolo73 to &ndustr3 when &ndian Mar4ets related with En2ironment E Safet3 are not e2en aware about the new standards and te-hnolo73<

NATIONAL AND INTERNATIONAL A+ARDS

6eather E>port Promotion Merit Award !)'J5": till )',+< Kar3ana .o2ernment E>port Award !)'J,9J'"< &nternational Asian Award: Ja4arta !)',+"< European Awards: Paris !)',J"< National Award for best E>port of 6eather .arments !)',J9,,"< &nternational Award for .ood Fualit3: russels: el7ium !)',,"< 6eather E>port Award for .o2ernment of &ndia !)'')9'+"< National Produ-ti2it3 Award from president !)''J"< Coun-il of 6eather E>port !C6E": &ndias ape> bod3 of leather produ-ts e>porters: durin7 the international leather fair held at Chennai: -onferred is hi7hest award the /DOAEN O= &ND1STRA0 upon Mr<P<D<.upta on 5th =eb<: ',< Corldwide Presti7e Award !CPA"9+(()<

COR'ORATE (OALS
6ibert3 wants to de2elop a spirit of -ooperation between indi2iduals E 7roup within the -ompan3<

+G

6ibert3 wants to attain E maintain 7ood relations between its union E mana7ement< 6ibert3 will endea2or to 4eep hi7hl3 qualified emplo3ees b3 appropriate trainin7 and thus raise their morale E -ompeten-e< 6ibert3 will tr3 to pra-ti-e mana7ement of hi7hest standard of -ompeten-e E professionalism< 6ibert3 will stri2e to remain or be-ome the te-hnolo7i-al as well as mar4et leaders in footwear industr3 and leather produ-t industr3< 6ibert3 wants to be 4nown for the qualit3 for its produ-ts E ser2i-es<

+5

CHA'TER0> RESEARCH METHODOLO(Y

+I

RESEARCH METHODOLO(Y

Resear-h is an important pre9requisite for a d3nami- or7ani?ation to be prR-ised< Resear-h is more s3stemati- a-ti2it3 dire-ted towards the dis-o2er3 and de2elopment of or7ani?ed bod3 of 4nowled7e< Some of the -hara-teristi-s of resear-h methodolo73 are as follows* )< Resear-h is dire-ted towards a solution of problem< &t ma3 attempt to answer a question or determine the relation between two or more 2ariables< +< Resear-h in2ol2es 7atherin7 new data for primar3 of first hand sour-es or usin7 e>istin7 data for new purposes< %< Resear-h is based on obser2able e>perien-e or empiri-al e2iden-e< G< Resear-h stri2es to be ob;e-ti2e and lo7i-al appl3in7 e2er3 possible test to 2alidate the pro-eed are emplo3ed the data -olle-tion and -on-lusion resear-h< 'rim"ry D"t" &nformation -olle-ted for the spe-ifi- purpose at hand or spe-ifi-all3 for the -urrentl3 underta4en< Se#$nd"ry D"t" &nformation that alread3 e>ists somewhere: ha2e been -olle-ted for another purpose< & used se-ondar3 data for this pro;e-t< & refer some boo4s and also some websites for the pro;e-t< These boo4s and websites are mentioned in the biblio7raph3<

+J

OB?ECTI&E OF THE STUDY M"in Ob@e#ti4e The pro;e-t is desi7ned to 7i2e an o2er2iew of &n2entor3 Mana7ement< Sub Ob@e#ti4e The stud3 on &n2entor3 is 2er3 important for a firm< The ob;e-ti2es of this stud3 are as follows* To determine the -han7es in the &n2entor3 position of the -ompan3< To determine the in-rease or de-rease in &n2entor3 le2el< To determine the 2arious ratios for anal3?in7 the &n2entor3 le2el of the -ompan3< To spot out stren7ths E wea4ness of business< To determine the absolute fi7ures for the last two 3ears

SCO'E OF THE STUDY This report -o2ers* 1) Credit Administration at 6& ERTA SKOES 2) Larious t3pes of an4 =inan-e 3) Term 6oans =inan-in7 4) Cor4in7 Capital =inan-in7 5) Appraisal Pro-ess of Term 6oans and Cor4in7 Capital 6) Post San-tion Pro-esses 7) Case Stud3 des-ribin7 a-tual appraisal of a Term 6oan proposal and a Cor4in7 Capital =inan-in7 Proposal<

D"t" C$--e#ti$n
This report is based on primar3 as well se-ondar3 data: howe2er primar3 data -olle-tion was 7i2en more importan-e sin-e it is o2erhearin7 fa-tor in attitude studies< One of the most important users of resear-h methodolo73 is that it helps in identif3in7 the problem: -olle-tin7: anal3?in7 the required information data and pro2idin7 an alternati2e solution to the problem <&t also helps in -olle-tin7 the 2ital information that is required b3 the top

+,

mana7ement to assist them for the better de-ision ma4in7 both da3 to da3 de-ision and -riti-al ones<

1/

DATA SOURCES:

AAB 'rim"ry D"t" Primar3 data are those: whi-h were -olle-ted afresh E for the first time and thus happen to be ori7inal in -hara-ter< Kowe2er: there are man3 methods of -olle-tin7 the primar3 data< All ha2e not been used for the purpose of this pro;e-t< The ones that ha2e been used are* =a-e to fa-e !&nter2iewin7" Obser2ation

ABB Se#$nd"ry D"t" Chen an in2esti7ator uses the data that has been alread3 -olle-ted b3 others is -alled se-ondar3 data< The se-ondar3 data -ould be -olle-ted from the ;ournals: reports and 2arious publi-ations< The ad2anta7e of the se-ondar3 data -an be e-onomi-al: both in the terms of mone3 and time spent< &n this report se-ondar3 data was -olle-ted throu7h* Compan3 balan-e sheets Reports and re-ords =low -harts and tables Cebsites

'rim"ry d"t" :". #$--e#ted t r$u! 5ue.ti$nn"ire. Sample si?e Sample area Sample method Dur"ti$n $% Study: * * * +( New Delhi Random samplin7 method

+'

The stud3 was -arried out for a period of two months: from I TK OCT +()) to %( No2 +())<

%(

S"m3-in!: AAB S"m3-in! 3r$#edure: The sample was sele-ted of them who are the -ustomersM2isitors of &nfos3s &t was also -olle-ted throu7h personal 2isits to persons: b3 formal and informal tal4s and throu7h fillin7 up the questionnaire prepared< The data has been anal3?ed b3 usin7 mathemati-alMStatisti-al tool< Se#$nd"ry .$ur#e $% d"t" )< Reports from the -lients +< Old data of e>istin7 -lients

LIMITATIONS
Althou7h e2er3 effort ha2e been made to -olle-t the rele2ant information throu7h the sour-e a2ailable: still some rele2ant information -ould not be 7athered< )< The time duration -ould not pro2ide ample opportunit3 to stud3 e2er3 detail of mana7ement in the -ompan3< +< There are restri-tions not to 2isit some spe-ifi- areas< %< The -on-ered e>e-uti2es were ha2in7 2er3 bus3 s-hedule< G< The -ompan3 on a--ount of -onfidential reports has not dis-losed some fi7ures 5< Estimates are based upon predi-tions<

%)

CHA'TER0C CONCE'TUAL DISCUSSION

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CONCETUAL DISCUSSION
Liter"ture Re4ie:
=inan-ial statements refer to su-h statements whi-h -ontains finan-ial information about an enterprise< The3 report profitabilit3 and the finan-ial position of the business at the end of a--ountin7 period< The team finan-ial statement in-ludes at least two statements whi-h the a--ountant prepares at the end of an a--ountin7 period< The two statements are* 9 The alan-e Sheet Profit And 6oss A--ount

The3 pro2ide some e>tremel3 useful information to the e>tent that balan-e Sheet mirrors the finan-ial position on a parti-ular date in terms of the stru-ture of assets: liabilities and owners equit3: and so on and the Profit and 6oss a--ount shows the results of operations durin7 a -ertain period of time in terms of the re2enues obtained and the -ost in-urred durin7 the 3ear< Thus the finan-ial statement pro2ides a summari?ed 2iew of finan-ial position and operations of a firm Me"nin! $% Fin"n#i"- An"-y.i. The first tas4 of finan-ial anal3sis is to sele-t the information rele2ant to the de-ision under -onsideration to the total information -ontained in the finan-ial statement< The se-ond step is to arran7e the information in a wa3 to hi7hli7ht si7nifi-ant relationship< The final step is interpretation and drawin7 of inferen-e and -on-lusions< =inan-ial statement is the pro-ess of sele-tion: relation and e2aluation< Fe"ture. $% Fin"n#i"- An"-y.i. To present a -omple> data -ontained in the finan-ial statement in simple and understandable form< To -lassif3 the items -ontained in the finan-ial statement in-on2enient and rational 7roups<

%%

To ma4e -omparison between 2arious 7roups to draw 2arious -on-lusions<

'ur3$.e $% An"-y.i. $% %in"n#i"- .t"tement. To 4now the earnin7 -apa-it3 or profitabilit3< To 4now the sol2en-3< To 4now the finan-ial stren7ths< To 4now the -apabilit3 of pa3ment of interest E di2idends< To ma4e -omparati2e stud3 with other firms< To 4now the trend of business< To 4now the effi-ien-3 of m7t< To pro2ide useful information to m7t

'r$#edure $% Fin"n#i"- St"tement An"-y.i. The followin7 pro-edure is adopted for the anal3sis and interpretation of finan-ial statements*9 The anal3st should a-quaint himself with prin-iples and postulated of a--ountin7< Ke should 4now the plans and poli-ies of the mana7ements that he ma3 be able to find out whether these plans are properl3 e>e-uted or not< The e>tent of anal3sis should be determined so that the sphere of wor4 ma3 be de-ided< &f the aim is find out< Earnin7 -apa-it3 of the enterprise then anal3sis of in-ome statement will be underta4en< On the other hand: if finan-ial position is to be studied then balan-e sheet anal3sis will be ne-essar3< The finan-ial data be 7i2en in statement should be re-o7ni?ed and rearran7ed< &t will in2ol2e the 7roupin7 similar data under same heads< rea4in7 down of indi2idual -omponents of statement a--ordin7 to nature< The data is redu-ed to a standard form< A relationship is established amon7 finan-ial statements with the help of tools E te-hniques of anal3sis su-h as ratios: trends: -ommon si?e: fund flow et-< The information is interpreted in a simple and understandable wa3< The si7nifi-an-e and utilit3 of finan-ial data is e>plained for help inde-ision ma4in7<

%G

The -on-lusions drawn from interpretation are presented to the mana7ement in the form of reports<

Anal3?in7 finan-ial statements in2ol2es e2aluatin7 three -hara-teristi-s of a -ompan3* its liquidit3: its profitabilit3: and its insol2en-3< A short9term -reditor: su-h as a ban4: is primaril3 interested in the abilit3 of the borrower to pa3 obli7ations when the3 -ome due< The liquidit3 of the borrower is e>tremel3 important in e2aluatin7 the safet3 of a loan< A lon79term -reditor: su-h as a bondholder: howe2er: loo4s to profitabilit3 and sol2en-3 measures that indi-ate the -ompan3s abilit3 to sur2i2e o2er a lon7 period of time< 6on79term -reditors -onsider su-h measures as the amount of debt in the -ompan3s -apital stru-ture and its abilit3 to meet interest pa3ments< Similarl3: sto-4holders are interested in the profitabilit3 and sol2en-3 of the -ompan3< The3 want to assess the li4elihood of di2idends and the 7rowth potential of the sto-4/ Comparison -an be made on a number of different bases< =ollowin7 are the three illustrations*

%5

R"ti$ An"-y.i.:
Me"nin! $% R"ti$ An"-y.i.: Ratio anal3sis is the method or pro-ess b3 whi-h the relationship of items or 7roup of items in the finan-ial statement are -omputed: determined and presented< Ratio anal3sis is an attempt to deri2e quantitati2e measure or 7uides -on-ernin7 the finan-ial health and profitabilit3 of business enterprises< Ratio anal3sis -an be used both in trend and stati- anal3sis< There are se2eral ratios at the disposal of an anal3st but their 7roup of ratio he would prefer depends on the purpose and the ob;e-ti2e of anal3sis< Chile a detailed e>planation of ratio anal3sis is be3ond the s-ope of this se-tion: we will fo-us on a te-hnique: whi-h is eas3 to use< &t -an pro2ide 3ou with a 2aluable in2estment anal3sis tool< This te-hnique is -alled #r$..0.e#ti$n"- "n"-y.i.< Cross9se-tional anal3sis -ompares finan-ial ratios of se2eral -ompanies from the same industr3< Ratio anal3sis -an pro2ide 2aluable information about a -ompan3Os finan-ial health< A finan-ial ratio measures a -ompan3Os performan-e in a spe-ifi- area< =or e>ample: 3ou -ould use a ratio of a -ompan3Os debt to its equit3 to measure a -ompan3Os le2era7e< 3 -omparin7 the le2era7e ratios of two -ompanies: 3ou -an determine whi-h -ompan3 uses 7reater debt in the -ondu-t of its business< A -ompan3 whose le2era7e ratio is hi7her than a -ompetitorOs has more debt per equit3< Aou -an use this information to ma4e a ;ud7ment as to whi-h -ompan3 is a better in2estment ris4< Kowe2er: 3ou must be -areful not to pla-e too mu-h importan-e on one ratio< Aou obtain a better indi-ation of the dire-tion in whi-h a -ompan3 is mo2in7 when se2eral ratios are ta4en as a 7roup<

%I

Ob@e#ti4e $% R"ti$.: Ratios are wor4ed out to anal3?e the followin7 aspe-ts of business or7ani?ation9 A" Sol2en-39 6on7 term Short term &mmediate

" Stabilit3 C" Profitabilit3 D" Operational effi-ien-3 E" Credit standin7 =" Stru-tural anal3sis ." Effe-ti2e utili?ation of resour-es K" 6e2era7e or e>ternal finan-in7 F$rm. $% R"ti$: Sin-e a ratio is a mathemati-al relationship between two or more 2ariables M a--ountin7 fi7ures: su-h relationship -an be e>pressed in different wa3s as follows $ AB A. " 3ure r"ti$: =or e>ample the equit3 share -apital of a -ompan3 is Rs< +(: ((:((( E the preferen-e share -apital is Rs< 5: ((:(((: the ratio of equit3 share -apital to preferen-e share -apital is >;* ;;*;;;: D* ;;*;;; E F:1< BB A. " r"te $% time.: &n the abo2e -ase the equit3 share -apital ma3 also be des-ribed as G times that of preferen-e share -apital< Similarl3: the -ash sales of a firm are Rs< )+:((:((( E -redit sales are Rs< %(:((:(((< So the ratio of -redit sales to -ash sales -an be des-ribed as >/D AC;* ;;*;;;21>* ;;*;;;B E >/D time. "re t e #redit ."-e. t "t $% #". ."-e./

%J

CB A. " 3er#ent"!e: &n su-h a -ase: one item ma3 be e>pressed as a per-enta7e of some other items< =or e>ample: net sales of the firm are Rs<5(: ((:((( E the amount of the 7ross profit is Rs< )(: ((:(((: then the 7ross profit ma3 be des-ribed as >;G $% ."-e. A1;* ;;*;;;2D;* ;;*;;;B Ste3. in R"ti$ An"-y.i. The ratio anal3sis requires two steps as follows* )" Cal-ulation of ratio +" Comparin7 the ratio with some predetermined standards< The standard ratio ma3 be the past ratio of the same firm or industr3s a2era7e ratio or a pro;e-ted ratio or the ratio of the most su--essful firm in the industr3< &n interpretin7 the ratio of a parti-ular firm: the anal3st -annot rea-h an3 fruitful -on-lusion unless the -al-ulated ratio is -ompared with some predetermined standard< The importan-e of a -orre-t standard is obli2ious as the -on-lusion is 7oin7 to be based on the standard itself< 1B Li5uidity r"ti$.: &t shows the relationship between the -urrent assets E -urrent liabilities of the -on-ern e<7< liquid ratios E -urrent ratios< >B Le4er"!e r"ti$.: &t shows the relationship between proprietors funds E debts used in finan-in7 the assets of the -on-ern e<7< -apital 7earin7 ratios: debt equit3 ratios: E Proprietar3 ratios< CB A#ti4ity r"ti$.: &t shows relationship between the sales E the assets< &t is also 4nown as Turno2er ratios E produ-ti2it3 ratios e<7< sto-4 turno2er ratios: debtors turno2er ratios< FB 'r$%it"bi-ity r"ti$.: &t shows the relationship between profits E sales e<7< operatin7 ratios: 7ross profit ratios: operatin7 net profit ratios: e>penses ratios

%,

&t shows the relationship between profit E in2estment e<7< return on in2estment: return on equit3 -apital<

DB C$4er"!e r"ti$.: &t shows the relationship between the profit on the one hand E the -laims of the outsiders to be paid out of su-h profit e<7< di2idend pa3out ratios E debt ser2i-e ratios< B".ed $n U.er 1B R"ti$. %$r . $rt0term #redit$r.: Current ratios: liquid ratios: sto-4 wor4in7 -apital ratios >B R"ti$. %$r t e . "re $-der.: Return on proprietors fund: return on equit3 -apital CB R"ti$. %$r m"n"!ement: Return on -apital emplo3ed: turno2er ratios: operatin7 ratios: e>penses ratios FB R"ti$. %$r -$n!0term #redit$r.: Debt equit3 ratios: return on -apital emplo3ed: proprietor ratios<

%'

Im3$rt"n#e $% R"ti$ An"-y.i.:

As a tool of finan-ial mana7ement: ratios are of -ru-ial si7nifi-an-e< The importan-e of ratio anal3sis lies in the fa-t that it presents fa-ts on a -omparati2e basis E enables the drawin7 of interferen-e re7ardin7 the performan-e of a firm< Ratio anal3sis is rele2ant in assessin7 the performan-e of a firm in respe-t of the followin7 aspe-ts* )" 6iquidit3 position +" 6on79term sol2en-3 %" Operatin7 effi-ien-3 G" O2erall profitabilit3 5" &nter firm -omparison I" Trend anal3sis 1B Li5uidity 3$.iti$n Cith the help of Ratio anal3sis -on-lusion -an be drawn re7ardin7 the liquidit3 position of a firm< The liquidit3 position of a firm would be satisfa-tor3 if it is able to meet its -urrent obli7ation when the3 be-ome due< A firm -an be said to ha2e the abilit3 to meet its short9term liabilities if it has suffi-ient liquid funds to pa3 the interest on its short maturin7 debt usuall3 within a 3ear as well as to repa3 the prin-ipal< This abilit3 is refle-ted in the liquidit3 ratio of a firm< The liquidit3 ratio is parti-ularl3 useful in -redit anal3sis b3 ban4 E other suppliers of short term loans< >B L$n!0term .$-4en#y Ratio anal3sis is equall3 useful for assessin7 the lon79term finan-ial 2iabilit3 of a firm< This respe-t of the finan-ial position of a borrower is of -on-ern to the lon79 term -reditors: se-urit3 anal3st E the present E potential owners of a business< The lon79term sol2en-3 is measured b3 the le2era7eM -apital stru-ture E profitabilit3 ratio anal3sis s that fo-us on earnin7 power E operatin7 effi-ien-3< Ratio anal3sis re2eals the stren7th E wea4nesses of a firm in this respe-t< The le2era7e ratios: for instan-e: will indi-ate whether a firm has a reasonable proportion of 2arious sour-es of finan-e or if it is hea2il3 loaded with debt in

G(

whi-h -ase its sol2en-3 is e>posed to serious strain< Similarl3 the 2arious profitabilit3 ratios would re2eal whether or not the firm is able to offer adequate return to its owners -onsistent with the ris4 in2ol2ed< CB O3er"tin! e%%i#ien#y Aet another dimension of the useful of the ratio anal3sis: rele2ant from the 2iewpoint of mana7ement: is that it throws li7ht on the de7ree of effi-ien-3 in mana7ement E utili?ation of its assets< The 2arious a-ti2it3 ratios measure this 4ind of operational effi-ien-3< &n fa-t: the sol2en-3 of a firm is: in the ultimate anal3sis: dependent upon the sales re2enues 7enerated b3 the use of its assets9 total as well as its -omponents< FB O4er"-- 3r$%it"bi-ity 1nli4e the outsides parties: whi-h are interested in one aspe-t of the finan-ial position of a firm: the mana7ement is -onstantl3 -on-erned about o2erall profitabilit3 of the enterprise< That is: the3 are -on-erned about the abilit3 of the firm to meets its short term as well as lon7 term obli7ations to its -reditors: to ensure a reasonable return to its owners E se-ure optimum utili?ation of the assets of the firm< This is possible if an inte7rated 2iew is ta4en E all the ratios are -onsidered to7ether< DB Inter %irm #$m3"ri.$n Ratio anal3sis not onl3 throws li7ht on the finan-ial position of firm but also ser2es as a steppin79stone to remedial measures< This is made possible due to inter firm -omparison E -omparison with the industr3 a2era7es< A sin7le fi7ure of a parti-ular ratio is meanin7less unless it is related to some standard or norm< One of the popular te-hniques is to -ompare the ratios of a firm with the industr3 a2era7e< &t should be reasonabl3 e>pe-ted that the performan-e of a firm should be in broad -onformit3 with that of the industr3 to whi-h it belon7s< An inter firm -omparison would demonstrate the firms position 2i-e92ersa its -ompetitors< &f the results are at 2arian-e either with the industr3 a2era7e or with those of the -ompetitors: the firm -an see4 to identif3 the probable reasons E in li7ht: ta4e remedial measures<

G)

BALANCE SHEET Sour-es of funds O:nerH. %und Equit3 share -apital Share appli-ation mone3 Preferen-e share -apital Reser2es E surplus 6oan funds Se-ured loans 1nse-ured loans T$t"1ses of funds Fi6ed "..et. .ross blo-4 6ess * re2aluation reser2e 6ess * a--umulated depre-iation Net blo-4

M"r H 1>

M"r H 11

M"r H 1;

M"r H ;=

M"r H ;I

)J<(G 9 9 )%+<+)

)J<(G 9 9 )+G<5'

)J<(G 9 9 ))G<5(

)J<(G 9 9 )(5<%(

)J<(G 9 9 'J<J,

'(<(+ )<I) >F;/II

'5<5I G<G5 >F1/JC

J5<(G )(<(( >1J/D=

,+<I5 )I<GG >>1/FF

)(%<%+ )5<(I >CC/1=

)5%<%) 9

)G5<'5 9

)%I<5% 9

)%)<J% 9

)+I<(I 9

II<G) ,I<'(

5'<GJ ,I<G,

5%<+5 ,%<+,

GJ<(, ,G<IG

G(<I) ,5<GI

G+

BALANCE SHEET Capital wor49in9pro7ress &n2estments Net -urrent assets Current assets: loans E ad2an-es 6ess * -urrent liabilities E pro2isions Total net -urrent assets Mis-ellaneous e>penses not written T$t"Notes* oo4 2alue of unquoted in2estments Mar4et 2alue of quoted in2estments Contin7ent liabilities Number of equit3 sharesoutstandin7 !6a-s"

M"r H 1> (<(5 )I<++

M"r H 11 )<(5 )J<'G

M"r H 1; 9 )J<5(

M"r H ;= (<)% +(<%G

M"r H ;I )<55 +(<%G

+%(<(,

)'J<JG

)J)<''

)J)<(+

),(<5'

'+<%, )%J<J(

I)<5, )%I<)I

5I<)' ))5<,(

5G<J( ))I<%+

5G<J5 )+5<,G

9 >F;/II

9 >F1/JC

9 >1J/D=

9 >>1/FF

9 >CC/1=

)I<++

)J<'G

)J<5(

+(<%G

+(<%G

9 ))<G%

9 +J<%5

9 ),<J(

9 '<5,

9 '<J)

)J(<G(

)J(<G(

)J(<G(

)J(<G(

)J(<G(

G%

'ROFIT LOSS ACCOUNT M"r H 1> In#$me Operatin7 in-ome E63en.e. Material -onsumed Manufa-turin7 e>penses Personnel e>penses Sellin7 e>penses Adminstrati2e e>penses E>penses -apitalised Cost of sales Operatin7 profit Other re-urrin7 in-ome Ad;usted P D&T =inan-ial e>penses Depre-iation Other write offs Ad;usted P T Ta> -har7es Ad;usted PAT Non re-urrin7 items Other non -ash ad;ustments Reported net profit ),G<(J +5<+% %I<J' 9 5J<)) 9 %(%<+( +'<%G (<+5 +'<5, ))<J% J<%' 9 )(<GJ 9(<%5 )(<,+ 9%<+G (<(5 J<I% %%+<5G

M"r H 11

M"r H 1;

M"r H ;=

M"r ;I

+'J<%+

+I(<J)

+G)<I'

+G,<J'

)I5<JI %+<,G %5<I, )I<GJ ++<++ 9 +J+<'J +G<%5 (<IG +G<'' ,<++ I<,) 9 '<'I 9(<+) )(<)J (<)+ 9(<+) )(<(,

)GI<), +,<+, +J<(% )5<JI ),<)5 9 +%5<G( +5<%) (<G' +5<,( '<(( I<J' 9 )(<() 9(<%5 )(<%I 9(<I, 9(<GJ '<+(

)%5<,( +5<'+ +(<'+ )I<J' )I<+' 9 +)5<J+ +5<'J )<(G +J<() )+<5' I<5' 9 J<,% 9(<+I ,<(' 9(<5G 9(<(+ J<5+

)%%<)' +J<(( ++<I) ),<+5 )I<+) 9 +)J<+I %)<5G (<5' %+<)% )%<G) I<%, 9 )+<%G (<)+ )+<+% %<,+ 9(<(' )5<'I

GG

'ROFIT LOSS ACCOUNT M"r H 1> Earni7s before appropriation Equit3 di2idend Preferen-e di2idend Di2idend ta> Retained earnin7s G'<%( 9 9 9 G'<%(

M"r H 11 GJ<IJ 9 9 9 GJ<IJ

M"r H 1; G%<5' 9 9 9 G%<5'

M"r H ;= G(<%' 9 9 9 G(<%'

M"r ;I %,<,J 9 9 9 %,<,J

CASH FLO+ Profit before ta> Net -ash flow9operatin7 a-ti2it3 Net -ash used in in2estin7 a-ti2it3 Net-ash used in fin< a-ti2it3 Net in-Mde- in -ash and equi2lnt Cash and equi2alnt be7in of 3ear Cash and equi2alnt end of 3ear

M"r H 1> ),<G(

M"r H 11 )J<I'

M"r H 1; )J<,5

M"r H ;= )'<5(

M"r H ;I +'<(5

)(<J,

)(<%I

)5<G)

+J<)%

++<,)

9I<'G 9))<'5

9))<G( 9(<%5

9+<I+ 9)%<5G

9G<() 9+)<JI

9'<)J 9)%<%(

9J<',

9)<%G

9)<()

)<%I

(<%G

)J<5G

G<)%

5<)5

%<J'

G<)5

'<5I

+<J'

G<)%

5<)5

G<G'

RATIOS 'er . "re r"ti$. Ad;usted EPS !Rs"

M"r H 1>

M"r H 11

M"r 1;

M"r ;=

M"r ;I

I<%5

5<'J

I<(,

G<J5

J<),

G5

RATIOS Ad;usted -ash EPS !Rs" Reported EPS !Rs" Reported -ash EPS !Rs" Di2idend per share Operatin7 profit per share !Rs" oo4 2alue !e>-l re2 res" per share !Rs" oo4 2alue !in-l re2 res" per share !Rs<" Net operatin7 in-ome per share !Rs" =ree reser2es per share !Rs" 'r$%it"bi-ity r"ti$. Operatin7 mar7in !N" .ross profit mar7in !N" Net profit mar7in !N" Ad;usted -ash mar7in !N" Ad;usted return on net worth !N"

M"r H 1> )(<I, G<G, ,<,) 9

M"r H 11 '<'I I<(G )(<(% 9

M"r 1; )(<(I 5<G( '<%' 9

M"r ;= ,<I+ G<G) ,<+, 9

M"r ;I )(<'+ '<G+ )%<)I 9

)J<++

)G<+'

)G<,5

)5<+G

),<5)

,J<5'

,%<))

JJ<+(

J)<,(

IJ<%,

,J<5'

,%<))

JJ<+(

J)<,(

IJ<%,

)'5<)5 9

)JG<G, J%<('

)5%<(( IJ<)J

)G)<,G I)<JJ

)GI<(( 5J<%I

,<,+ I<I( +<+' 5<GJ

,<)' 5<'( %<G5 5<I'

'<J( J<)( %<5+ I<5I

)(<JG ,<() %<(' I<(G

)+<IJ )(<)) I<G% J<GI

J<+G

J<),

J<,J

I<I(

)(<IG

GI

RATIOS Reported return on net worth !N" Return on lon7 term funds !N" Le4er"!e r"ti$. 6on7 term debt M Equit3 Total debtMequit3 Owners fund as N of total sour-e =i>ed assets turno2er ratio Li5uidity r"ti$. Current ratio Current ratio !in-< st loans" Fui-4 ratio &n2entor3 turno2er ratio '"y$ut r"ti$. Di2idend pa3out ratio !net profit" Di2idend pa3out ratio !-ash profit"

M"r H 1>

M"r H 11

M"r 1;

M"r ;=

M"r ;I

5<)(

J<+I

I<''

I<)G

)%<'J

'<+)

)+<(+

)G<+(

)5<J5

)'<JG

(<I) (<I)

(<(I (<J(

(<() (<IG

(<(5 (<,)

(<)% )<(%

I)<'I )<%,

5,<I) +<(G

I(<J% )<')

55<+G )<,%

G'<+% )<'J

+<G' +<G' )<5' G<)'

%<+) (<,% )<,' %<'%

%<(I (<,) )<,+ %<',

%<)% (<JJ )<'( %<,G

%<%( (<J% )<') %<5+

GJ

RATIOS Earnin7 retention ratio Cash earnin7s retention ratio C$4er"!e r"ti$. Ad;usted -ash flow time total debt =inan-ial -har7es -o2era7e ratio =in< -har7es -o2<ratio !post ta>" C$m3$nent r"ti$. Material -ost -omponent !N earnin7s" Sellin7 -ost Component E>ports as per-ent of total sales &mport -omp< in raw mat< -onsumed 6on7 term assets M total Assets onus -omponent in equit3 -apital !N"

M"r H 1> )((<(( )((<((

M"r H 11 )((<(( )((<((

M"r 1; )((<(( )((<((

M"r ;= )((<(( )((<((

M"r ;I )((<(( )((<((

5<(%

5<,'

G<'I

I<J5

I<%I

+<5+

%<(G

+<,J

+<)5

+<G(

+<+,

%<(,

+<J,

+<)+

+<IJ

5G<5J 9

5I<'+ 5<5G

5I<I, I<(G

5)<%( I<'G

5I<%G J<%%

)G<+G

)G<G5

)G<))

)5<I%

)J<''

,<%(

J<,G

5<5(

5<(,

I<,G

(<%(

(<%G

(<%I

(<%,

(<%J

5(<((

5(<((

5(<((

5(<((

5(<((

G,

CHA'TER0F DATA ANALYSIS

G'

ANALYSIS AND INTER'RETATION 1/ LIKUIDITY RATIOS 1/1 CURRENT RATIO E CURRENT ASSETS2CURRENT LIABILTIES YEAR Current A..et. Current Li"bi-itie. Current R"ti$
2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2009-2010 2010-2011 2011-2012

>;;=0>;1; ):%G:'G:J5:,GJ J5:IJ:5,:G%, 1/LI

>;1;0>;11 ):,):+(:%,:)5+ ):%J:',:)':)5G 1/C1

>;110>;1> ):,(:5':%G:)'% ):%+:J,:'+:J,, 1/CJ

Current Assets Current Liabilities Current Ratio

INTER'RETATION )< &DEA6 C1RRENT RAT&O &S +*)< +< The -urrent ratio has in-reased from )<GJ to )<J, between the 3ear +((G9 +((5 and+(('9+()(< Then it de-reased to )<%) in the 3ear +()(9+()) and then in-reased )<%I in the 3ear +())9+()+< %< This shows that the short term liquidit3 of the -ompan3 is not 7ood<

1/> KUIC, RATIO E KUIC, ASSETS2CURRENT LIABILITIES

5(

YEAR Kui#7 A..et. Current Li"bi-itie. Kui#7 R"ti$

1.2 1 0.8 0.6 0.4 0.2 0

>;;=0>;1; ,):+':J':,)+ J5:IJ:5,:G%, 1/;L

>;1;0>;11 ):(5:(+:'':,%J ):%J:',:)':)5G ;/LJ

>;110>;1> ):(G:G(:I):(,5 ):%+:J,:'+:J,, ;/L=

Quick Assets Current Liabilities Quick Ratio

2009-10

2010-11

2011-12

INTER'RETATION )< TKE &DEA6 F1&CH RAT&O &S )*) +< The qui-4 ratio of the -ompan3 has in-reased from (<'G to)<(J between the 3ear +((G9+((5 and+(('9+()(< Then de-reased to (<JI and(<J' in the 3ear +()(9+()) and +())9+()+< %< This means that the -ompan3 -annot meet its short term obli7ations<

1/C CASH RATIO E CASH AND BAN,2CURRENT LIABILITIES YEAR C". Current >;;=0>;1; +:'G:G5:5I) J5:IJ:5,:G%, 5) >;1;0>;11 G:I+:G(:G,% ):%J:',:)':)5G >;110>;1> G:G':+I:JJJ ):%+:J,:'+:J,,

Li"bi-itie. C". R"ti$

;/;C=

;/;CC

;/;CF

0.039 0.038 0.037 0.036 0.035 0.034 0.033 0.032 0.031 0.03 Cas Current Liabilities Cas Ratio

2009-10

2010-11

2011-12

INTER'RETATION )< The -ash ratio has first in-reased from (<(%+ to (<(%' between the 3ear +((G9+((5 and+(('9+()( and then de-reased in the 3ear +()(9+()) and then in-reased b3 (<(() in +())9+()+< +< This re2eals that the -ash position of the -ompan3 is not sound<

>/ ACTI&ITY RATIOS >/1 IN&ENTORY TURNO&ER RATIO E NET SALES 2 IN&ENTORY YEAR Net S"-e. In4ent$ry In4ent$ry Turn$4er R"ti$ 5+ >;;=0>;1; +:+):)):'J:''% 5%:IG:'I:(%5 F/1> >;1;0>;11 +:%J:5G:G,:+I' JI:)J:%,:%)5 C/1> >;110>;1> +:5J:,':%G:'(J JI:),:J%:)(, C/CI

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

!et "ales #n$entor% #n$entor% &urno$er Ratio 2009-10 2010-11 2011-12

INTER'RETATION )< This shows that the -ompan3 is somehow effi-ient in 7eneratin7 the in2entor3 into sales< +< The in2entor3 turno2er ratio has de-reased from G<J5 to %<)+ between the 3ears +((G9+((5 and +()(9+())and in-reased to %<%, in +())9+()+<

+<) DEBTORS TURNO&ER RATIO E SALES2DEBTORS YEAR S"-e. Debt$r. Debt$r. Turn$4er R"ti$ >;;=0>;1; +:+):)):'J:''% G,:%%:,5:,)J F/DL >;1;0>;11 +:%J:5G:G,:+I' J+:(,:'G:GJG C/>= >;110>;1> +:5J:,':%G:'(J J+:G):GJ:',% C/DJ

5%

5 4 "ales 3 2 1 0 2009-10 2010-11 2011-12 'ebtors 'ebtors &urno$er Ratio

INTER'RETATION )< The debtor turno2er ratio has first in-reased from G<)+ to G<5J between the 3ear +((G9+((5 and+(('9+()( and then de-reased in the 3ear +()(9+()) and then in-reased in +())9+()+< +< This shows that the debtor mana7ement s3stem is tr3 to maintain their position<

A&ERA(E COLLECTION 'ERIOD E NUMBER OF +OR,IN( DAYS 2 DEBTORS TURNO&ER RATIO YEAR Number $% +$r7in! D"y. Debt$r. Turn$4er R"ti$ A4er"!e C$--e#ti$n 'eri$d >;;=0>;1; %I5 G<5J I; d"y. >;1;0>;11 %I5 %<+' 11; d"y. >;110>;1> %I5 %<5I 1;> d"y.

5G

INTER'RETATION )< The a2era7e -olle-tion period has de-reased from ,' da3s to ,( da3s between the 3ear +((G9+((5 and+(('9+()( and then in-reased in the 3ear +()(9+()) and a7ain de-reased in +())9+()+< +< More the a2era7e -olle-tion period less effi-ient is the debtor mana7ement s3stem<

>/> +OR,IN( CA'ITAL TURNO&ER RATIO E SALES 2 NET +OR,IN( CA'ITAL YEAR S"-e. Net +$r7in! C"3it"+$r7in! C"3it"Turn$4er R"ti$ >;;=0>;1; +:+):)):'J:''% 5':+J:)J:G(' C/LC >;1;0>;11 +:%J:5G:G,:+I' G%:++:),:'', D/D; >;110>;1> +:5J:,':%G:'(J GJ:II:'J:JI5 D/F1

55

6 5 4 3 2 1 0 2009-10 2010-11 2011-12 (orkin) Ca*ital &urno$er Ratio "ales !et (orkin) Ca*ital

INTER'RETATION )< The wor4in7 -apital turno2er ratio has first de-reased from 5<%+ to %<J% between the 3ear +((G9+((5 and+(('9+()( and then in-reased to 5<5( in the 3ear +()(9+()) and then de-reased b3 (<(' in the 3ear +())9+()+<

C/ 'ROFITABILITY RATIOS C/1 O'ERATIN( 'ROFIT RATIO E O'ERATIN( 'ROFIT < 1;; SALES YEAR O3er"tin! 'r$%it S"-e. O3er"tin! 'r$%it R"ti$ >;;=0>;1; %):G,:I+:)I% +:+):)):'J:''% 1F/>F >;1;0>;11 %):+,:'):II+ +:%J:5G:G,:+I' 1C/1L >;110>;1> %+:'':IG:5G' +:5J:,':%G:'(J 1>/L=

5I

14.5 14 13.5 13 12.5 12

2009-10

2010-11

2011-12

INTER'RETATION )< The operatin7 profit first in-reases to )G<+GN in the 3ear+(('9+()( and then de-reases to )%<)JN and )+<J'N in the 3ear +()(9+()) and +())9 +()+< +< This shows that the operatin7 -ost of the -ompan3 has in-reased from +((G9+((5 to +())9+()+<

C/> NET 'ROFIT RATIO E NET 'ROFIT AFTER TA< < 1;; NET SALES YEAR Net 'r$%it A%ter T"6 Net S"-e. Net 'r$%it R"ti$ >;;=0>;1; ),:G':+,:5)G +:+):)):'J:''% I/CJ >;1;0>;11 )J:():'G:555 +:%J:5G:G,:+I' L/1J >;110>;1> )I:(5:)%:I)) +:5J:,':%G:'(J J/>>

5J

10 8 6 4 2 0 2009-10 2010-11 2011-12 !et +ro,it A,ter &a!et "ales !et +ro,it Ratio

INTER'RETATION )< The net profit ratio first in-reases from 5<(% to ,<%I in the 3ear +((G9+((5 and+(('9+()( and then de-reases to J<)I in the 3ear +()(9+()) and too de-reasin7 in +())9+()+< +< This re2eals that the effi-ien-3 in manufa-turin7: administerin7 and sellin7 the produ-ts is de-reasin7<

F/ LON( TERM SOL&ENCY RATIOS F/1 DEBT EKUITY RATIO E OUTSIDER9S FUNDS2SHAREHOLDER9S FUNDS YEAR Out.ider9. %und. G S "re $-der9. %und. Debt E5uity R"ti$ ,):IJ:G(:++5 ;/C> ',:,5:J+:I(5 ;/C= %:'5:'+:J%:%'I ;/>= >;;=0>;1; +5:,(:(I:5+ >;1;0>;11 %,:J(:'I:+I' >;110>;1> ):)G:,):,':+,5

5,

0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2009-10 2010-11 2011-12 .utsi/er0s ,un/s " are ol/er0s ,un/s 'ebt 12uit% Ratio

INTER'RETATION )< The debt equit3 ratio is de-reasin7 whi-h means that the -ompan3s dependen-e on the e>ternal debt is de-reasin7< +< This shows 7reater fle>ibilit3 in the -ompan3s operation<

F/>

INTEREST TA<ES CO&ERA(E RATIO YEAR Net 3r$%it E

NET 'ROFIT BEFORE INTEREST AND FI<ED INTEREST CHAR(ES >;1;0>;11 +I:I5:5J:(5G >;110>;1> +G:GG:+):J5+

>;;D0>;;J +J:G,:I%:I+5

be%$re intere.t "nd t"6e. Intere.t Intere.t C$4er"!e R"ti$ G:JG:),:('% D/I ,:,):I,:,IJ C/;> )%:%G:5I:'G5 1/IC

5'

6 5 4 3 2 1 0 2009-10 2010-11 2011-12

INTER'RETATION )< The interest -o2era7e ratio first in-reases between the 3ear +((G9+((5 and+(('9+()( and then de-reases in the 3ear +()(9+()) and in +())9 +()+< +< A low ratio indi-ates e>-essi2e use of debt<

FINDIN(S AND RECOMMENDATIONS

)< &n &ndia as most of the population is under low9in-ome 7roup: the3 wear unbranded or lo-al brand shoes< So the -ompan3 whi-h -an -apture this in-ome 7roup espe-iall3 li2in7 in 2illa7es and small towns will be the winner< +< As the e>-lusi2e showroom pla3 an important role in ma4in7 and mar4in7 the ima7e of -ompan3< So there should be poli-3 for e>-lusi2e showroom< %< Fualit3 -ontrol operations should be moderni?ed effe-ti2el3 as people are more edu-ated and 7i2e more preferen-e to qualit3<

I(

G< Tele2ision has be-ome the most effe-ti2e mode of ad2ertisin7< New trend of namin7 pro7rams before the a-tual name of pro7rams 7i2e more insertion in the minds of people as there was performan-e on Tee T<L -alled 6& ERTA P1 6&C DEMAND< 5< There should be some spe-ial brands: whi-h should be a2ailable onl3 in e>-lusi2e showrooms to attra-t the -rowd there< I< There should be no bar7ain with the qualit3 of the produ-t< J< Showroom owners tend to hea2il3 tend to hea2il3 depend on the brand ima7e rather than the3re own s4ills and 4nowled7e re7ardin7 produ-t< So the bi7 -ompanies should tr3 to internationali?e their produ-ts and ima7e and should 7i2e a ps3-holo7i-al feelin7 of bein7 a uni2ersal brand< ,< Re7ular meetin7 should be or7ani?ed b3 the -ompanies to edu-ate the showroom owners re7ardin7 new inno2ation: their features as well as new poli-ies<
'<

Claim poli-3 re7ardin7 repla-ement et-< should be -learl3 made b3 the -ompan3 and followed in spirit of the world<

CONCLUSIONS
)< Most of -ustomers felt 6ibert3 as a premium produ-t -ompan3 !whi-h is true to mu-h e>tent": whi-h is out of rea-h of -ommon man< &t is su77ested that an e-onomi-al ran7e of footwear should also be introdu-ed to -apture the low9in-ome 7roup people who a--ount for most of the population in 2illa7es E small towns< +< Companies should -ontrol: re2iew and impro2e their dis-ount poli-3 so as to impro2e -ompan3s ima7e<

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%< New desi7ns and -olours should be introdu-ed in 6adies se-tion: as ladies e2er3 time demand somethin7 new< G< More attention should be paid to -ustomers -omplaints and efforts should be made to remo2e them< 5< The pla-ement of defe-ted pairs should be paid more attention so as to remo2e dissatisfa-tion amon7 the e>-lusi2e showroom owners< I< A Compan3 persons should re7ularl3 2isit e>-lusi2e showrooms and listen to the problems and find solution to them as is done b3 ata Compan3< J< Some spe-ial plannin7 on appointment of dealers should be there to a2oid the -ompli-ations< ,< Trou7h inspe-tion of sto-4 should be done to a2oid mi>in7 of inferior qualit3 sto-4 with fresh sto-4: whi-h is send to dealers< '< The -ompan3 should allow at the most two e>-lusi2e showrooms in one -it3< That too should be atleast +U% H<M apart to attra-t -ustomers from all the lo-alities<

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BIBLIO(RA'HY
BOO,S Pande3: &<M<: /=inan-ial Mana7ement0: Ed< +((J: L&4as Publishin7 Kouse Pri2ate 6td<: New Delhi< .upta: Shashi H<: /Mana7ement A--ountin70: Ed<+((J: Hal3ani Publishers: New Delhi< HOthari: C<R<: /Resear-h Methodolo730: Ed<+((J: New A7e &nternational !P" 6imited: Publishers: New Delhi< MANUAL Annual Reports

+EBSITES www<liber3shoes<-om www<libert3freedom<-om

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KUESTIONNAIRE
Kue.ti$n 1B + "t i. t e -i7in! $% 3e$3-e t$:"rd. LIBERTY SHOESM Answer a" A93es b" n9 no -" -9 -ant sa3 Kue.ti$n >B Re.3$n.e $% 3e$3-e "b$ut LIBERTY SHOESM Answer a" 393es b" n9no -" -9-ant sa3 Kue.ti$n CB Re.3$n.e $% 3e$3-e t "t LIBERTY SHOES :i-- !i4e " e"-t y #$m3etiti$n t$ .m"-- -e"!ue.M Answer a" 39 3es b" n9 no -" -9 -ant sa3 Kue.ti$n FB Re.3$n.e $% 3e$3-e t "t LIBERTY SHOES :i-- brin! " re4$-uti$n in t e indu.tryM Answer a" 393es b" n9no -" -9 -ant sa3 Kue.ti$n DB F"#t$r. : y 3e$3-e -i7e LIBERTY SHOESM Answer a" )9affordabilit3 b" +9shape -" %9desi7n d" G9other desi7n Kue.ti$n JB 'r$3$rti$n $% 3e$3-e : $ :i-- . i%t t$ LIBERTY SHOESM Answer a" A93es b" n9no -" -9-ant sa3 Kue.ti$n LB + y :$u-d 3e$3-e 3re%er LIBERTY SHOESM Answer a" )9-omfort b" +9safet3 -" %9reputation d" G9other reasons IG

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Kue.ti$n 1FB Did "d4erti.ement $% Liberty S $e. "%%e#t .e--M !a" Aes !b" No

Kue.ti$n 1DB + "t .$rt $% $t er. 3r$b-em. y$u "re "4in!M Ans< VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV

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