Akhila.p - Financial Statement Analysis - Zuari Cememt

A
SYNOPSIS REPORT
FINANCIAL STATEMENT ANALYSIS
AT
ZUARI CEMENT LIMITED
PROJECT SYNOPSIS SUBMITTED FOR
MASTER OF BUSINESS ADMINISTRATION
Department of Business Administration

Submitted
By
AKHILA.P
H.T.NO: 1415-21-672-087
PENDEKANTI INSTITUTE OF MANAGEMENT

IBRAHIMBAGH
(Affiliated to Osmania University-2021-2023).

Introduction to Financial Statement Analysis
Financial statement analysis can be referred as a process of understanding the risk and
profitability of a company by analyzing reported financial info, especially annual and quarterly
reports. Putting another way, financial statement analysis is a study about accounting ratios among
various items included in the balance sheet. These ratios include asset utilization ratios, profitability
ratios, leverage ratios, liquidity ratios, and valuation ratios. Moreover, financial statement analysis is a
quantifying method for determining the past, current, and prospective performance of a company.
Advantages of financial statement analysis
The different advantages of financial statement analysis are listed below:
 The most important benefit if financial statement analysis is that it provides an idea to the
investors about deciding on investing their funds in a particular company.
 Another advantage of financial statement analysis is that regulatory authorities like IASB can
ensure the company following the required accounting standards.
 Financial statement analysis is helpful to the government agencies in analyzing the taxation
owed to the firm.
 Above all, the company is able to analyze its own performance over a specific time period.
Financial statements are prepared primarily for decision making. They play a dominant role in
setting the framework of managerial decisions. But the information provided in the financial
statements is not an end in itself as no meaningful conclusions can be drawn from these statements
alone. However, the information provided in the financial statements is of immense use in making
decisions through analysis and interpretation of financial statements. Financial analysis ‘the process
of identifying the financial strengths and weaknesses of the firm by properly establishing relationship
between the items of the balance sheet and the profit and loss account’. There are various methods or
techniques used in analyzing financial statements, financial statements are an important source of
information for evaluating the performance and prospects of firm, if properly analyzed and interpreted
these statements can provide valuable insights into firm’s performance. Analysis of financial
statements is if interest to lenders, investors, security analyst, manager and others.
Financial statements analysis may be done for a variety of purposes, which may range
from simple analysis of short term liquidity position of the form to a comprehensive
assessment of the strengths and weakness of the firm in various areas, it is helpful in assessing
corporate excellence , judging credit worthiness forecasting bond rating, evaluating intrinsic value of
equity shares predicting bankruptcy and assessing market risk.
Financial statements:
Managers, shareholders, creditors and other interested groups seek answer to the following
question about firm:
 What is the financial position of the firm at a given point of time?
 How has the firm performed financially over a given period of time?
 What have been the sources and uses of cash over a given period?
To answer these questions, accountant prepares two principle statements, the
Balance sheet and the profit and loss account, ancillary statement, the Cash Flow statement.
Analysis of financial statement
Analysis refers to the process of critical examination of the financial information
contained in the financial statement in order to understand and make decisions regarding the
operations of the firm. The analysis is basically study of the relationship among various financial
facts and figure as given in a set of financial statements. Complex figures as given in
this statements are dissected\broken up into simple and variable elements and significant
relationship are established between the elements of the same statements are different financial
statements.
This process of dissection, establishing and identifying the financial weaknesses and
strengths of the firm. It is indicative of two aspects of a firm i.e. The profitability and the financial
position and it are what are known as the objectives of the analysis.
Types of Financial Analysis
On the basis of material used on the basis of modus operandi

On the basis of material used:-According to material used,
Financial analysis can be of two types:
1. External analysis:-
This analysis is done by outsiders who do not have access to the detailed internal accounting
records of the business firm. These outsiders include investors, potential investors, creditors,
potential creditors, government agencies, credit agencies and the general public.
2. Internal Analysis:-
The analysis conducted by persons who have access to the internal accounting records of a
business firm is known as internal analysis. Such an analysis can, therefore, be performed by
executives and employees of the organization as well as government agencies which have statutory
powers vested in them.
On the basis of modus operandi:-
According to the method of operation followed in the analysis, financial analysis can also be
of
1. Horizontal analysis:-
Horizontal analysis refers to the comparison of financial data of a company for several years.
The figures for this types of analysis are presented horizontally over a number of columns. The
figures of the various year are compared with standard or base year. This type of analysis is also
‘Dynamic analysis’ as it is based on the data from year to year rather than on
2. Vertical Analysis:-
Vertical analysis refers to the study of relationship of the various items in the financial
statements of one accounting period. In the types of analysis is the figures from financial statement of
a year are compared with a base selected from the same year’s statement. It is also known as ‘Static
analyses.
Procedure of Financial Statements Analysis
Broadly speaking there are three steps involved in the analysis of financial statements. There
are:
i) Selection,
ii) Classification,
iii) Interpretation.
The first step involves selection of information (data). The second step involved is the
methodical classification of the data and the third step includes drawing of internees and conclusions.
The following procedure is adopted for the analysis and
Interpretation of financial statements:
1) The analyst should acquaint himself with the principles and postulates of accounting.
2) The extent of analysis should be determined so that the sphere of work may be decided.
3) The financial data given in the statements should be re-organized and re-arranged.
4) A relationship is established among financial statements with the help of tools and techniques
of analysis such as ratios, trends, common size, funds flow etc.,
5) The information is interpreted in a simple and understandable way. The significance and
utility of financial data is explained for helping decision-taking.
6) The conclusions drawn from interpretation are presented to the management in the form of
reports.
NEED OF THE STUDY
 Need of financial statement analysis study to diagnose the information contain in

financial statement. So as to judge the profitability and financial position of the firm
ZUARI CEMENT LTD
 Financial analyst analyses the financial statements with various tools of analysis before
commanding upon the financial health of the firm.
 Essential to bring out the history of ZUARI CEMENT LTD
 Significance and meaning of the financial statements.
SCOPE OF THE STUDY
Analysis of financial statement can be undertaken by different persons and for different
purposes, therefore, the scope of the AFS may be varying from one situation to another.
However, the following are some the techniques of the AFS:
a) Comparative financial statements.
b) Common-size financial statements.
c) Trend percentage analysis.
d) Statement of changes in financial position.
e) Cost-volume-profit relations, and
f) Ratio analysis and others.
The last technique i.e., The ratio analysis is the most common, comprehensive and
powerful tool of the AFS. The importance of ratio analysis lies in the fact that it
presents facts on a comparative basis. As such, this study focuses only on this (ratio) analysis.
BJECTIVES OF THE STUDY
The main objective of the project is to analyze the financial statements of the company using
the financial statements comparative and ratio analysis for this purpose of analysis. It has been
utilized the secondary data of the company ZUARI CEMENT LTD i.e., annual reports from 2016 to
2021 this will help in evaluating the company’s liquidity conditions profitability long term solving
and operational efficiency.
The following are main objectives of the study.
 To determine the financial statements and weakness of the firm.
 To determine the short –term solving of the firm
 To diagnose the information contained to financial statements so as to judge the profitability
and fondness of the firm.
 To establish relationship between various figures or the income statement and balance sheet.
RESEARCH METHODOLOGY
RESEARCH DESIGN
This is a systematic way to solve the research problem and it is important component for the
study without which researches may not be able to obtain the format. A research design is the
arrangement of conditions for collection and analysis of data in a manager that aims to combine for
collection and analysis of data relevance to the research purpose with economy in procedure.
MEANING OF RESEARCH DESIGN
The formidable problem that follows the task of defining the research problem is the
preparation of design of the research project, popularly known as the research design, decision
regarding what, where, when, how much, by what means concerning an inquiry of a research study
constitute a research design. A research design is the arrangement of conditions for collection and
analysis of data in a manager that aims to combine for collection and analysis of data relevance to the
research purpose with economy in procedure.
SOURCES OF DATA
Data we collected based on two sources.
 Primary data.
 Secondary data.
Primary data
The Primary data are those information’s, which are collected afresh and for the first time,
and thus happen to be original in character.
Secondary Data:
The secondary data collected from the different sites, broachers, newspapers, company offer
document, different books and through suggestions from the project guide and from faculty members
of our college.
Company Name : ZUARI CEMENT LTD
Source of Data : Secondary Data
Duration of the study : 45 Days
Period of the Study : 2021-2022
The source of Secondary data are Annual Reports, browsing Internet, through magazines.
 It includes data gathered from the annual reports of ZUARI CEMENT LTD
 Articles are collected from official website of ZUARI CEMENT LTD.
LIMITATIONS OF THE STUDY
 It is only a study of interim reports.
 Financial analysis is based upon only monetary information and non- monetary factors are
ignored.
 Different people may interpret the same analysis in different ways.
 It does not consider the changes in prices level.
 Changes in accounting procedure by firm may often make financial analysis misleading.
BIBLIOGRAPHY
BOOKS:-
 Khan, M Y and P K Jain, Financial Management, Tata McGraw-Hill Publishing Co., New Delhi,
2008.
 I M Pandey, Essentials of Financial Management, Vikas Publishing House Pvt Ltd, New Delhi,
2009.
 Ramesh, S and A Gupta, Venture Capital and the Indian Financial Sector, Oxford university
press, New Delhi, 2017.
JOURNALS:-
 Lianzan xu, International Journal of Commerce and Management (Vol.13, Issue 1), 2003.
 Sassikala, Journal of Business & Financial Affairs 07 (02),

DOI:- 10.4172/2167-0234.1000337, January, 2019.
 Mark E. Haskins, Darden Business Publishing cases. ISSN: 2474-7890,

20th January, 2018.
 Sukamal Datta, Working Capital Management through Financial Statements Analysis of

Paper Industries in West Bangal Management Accountant,
Vol.30 No.11, PP 826-832, 2013.
NEWS-PAPERS:-
 The Times of India

 Business Line
 The Hindu
WEBSITES:-
 www.googlefinance.com
 www.heritagefoods.com
 www.icicibank.com
 www.autoindia.com

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A

FINANCIAL STATEMENT ANALYSIS

ZUARI CEMENT LIMITED

PROJECT SYNOPSIS SUBMITTED FOR

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

PENDEKANTI INSTITUTE OF MANAGEMENT

(Affiliated to Osmania University-2021-2023).

On the basis of material used on the basis of modus operandi

 Need of financial statement analysis study to diagnose the information contain in

 Sassikala, Journal of Business & Financial Affairs 07 (02),

 Mark E. Haskins, Darden Business Publishing cases. ISSN: 2474-7890,

 Sukamal Datta, Working Capital Management through Financial Statements Analysis of

 The Times of India

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