A

PROJECT REPORT
ON

AN ANALYTICAL STUDY ON FINANCIAL

STATEMENT OF BATA COMPANY LTD.

Submitted to
RASTRASANT TUKDOJI MAHARAJ NAGPUR UNIVERSITY, NAGPUR
BACHELOR OF BUSINESS ADMINISTRATION (BBA)

Submitted By
MS. TRUPTI DILIP NAGDEVTE
ENROLLMENT NUMBER- 20201011908548
BBA SEM-6
(FINANCE MANAGEMENT)

Under the Guidance of

DR. ANUP SUCHAK

Central Institute of Business Management, Research &

Development
Pawanbhoomi, Airport Road, Nagpur
2022-23

1
 CERTIFICATE

This is to certify that this project entitled

AN ANALYTICAL STUDY ON FINANCIAL

STATEMENT OF BATA COMPANY LTD.
Embodied the result of bonafied work carried out by TRUPTI DILIP
NAGDEVTE during the academic session 2022-23.

This work is found to be comprehensive and have desired standards so at

its presentation for the examination. It is further certified that the work has
been carried out under my guidance and is not a repetition of any other
project work submitted earlier to Rashtrasant Tukodoji Maharaj Nagpur
University, Nagpur.

Signature of Director Signature of Guide

(Dr. Amishi Arora) (DR. ANUP SUCHAK)

Signature of External

2
 DECLARATION

I, TRUPTI DILIP NAGDEVTE, a student of BBA SEM VI of Central

Institute of Business Management Research & Development, Nagpur
hereby declare that the project entitled AN ANALYTICAL STUDY ON
FINANCIAL STATEMENT OF BATA COMPANY LTD. in or part thereof has
not been previously submitted by me for any other degree or diploma of
any university or scientific organization
The project is the result of my bonafied work and the sources of
literature used and all assistance received during the course of
investigation has been duly acknowledged.

Date :- Signature of student

Place:- Nagpur (TRUPTI DILIP NAGDEVTE)

3
 ACKNOWLEDGEMENT

It was an enriching and learning experience for me to do this project.

I would like to acknowledge all those people who have continuously guided
me throughout and helped me in completion AN ANALYTICAL STUDY ON
FINANCIAL STATEMENT OF BATA COMPANY LTD. I am obliged to the
faculty Dr. Anup Suchak for being extremely patient, for guiding me right
from the inception till the full completion of the project. I sincerely
acknowledge him for extending the valuable guidance, support for
literature, critical reviews of project and the report and above all the moral
support he has provided to me with all stages of this project.
I would like to thank all the bank employees who helped me directly
or indirectly in successful completion of this study for their help and
cooperation throughout the project.
Last but not the least, I am honestly thankful to all faculties and non
teaching members of CIBMRD, who gave us a platform for the development.
And also to find out my own abilities and generated a sense of confidence
me to take out new challenges and face the outside world with zeal and
enthusiasm.

(TRUPTI DILIP NAGDEVTE)

4
 CONTENTS
Chapters Content Page No
Chapter 1 Introduction 6

Chapter 2 Company profile 10

Chapter 3 Literature Review 16

Chapter 4 Research Methodology 21

Chapter 5 Data Analysis & Interpretation 24

Chapter 6 Findings, Conclusion And Suggestions 41

Bibliography 46

5
 CHAPTER 1
INTRODUCTION

6
 CHAPTER 1

INTRODUCTION

Any financial information provided by the company is always in the form of other
analysis, now a day’s main job of financial person is analyze the financial position of the
company through various procedures such as fundamental analysis and also company
analysis.
The financial statement analysis of a business involves analyzing its financial statement and
health, its management and competitive advantages, and its competitors and markets. The
analysis is performed on historical and present data, but with the goal to make financial
projections. It involves the study of current as well as past market condition. Study of current
markets involves study of economy, industry and particular company and its stock price
valuation.
Financial statement analysis refers to the concept where the investor examines the
current and future overall health of the company as a whole. Attempt to determine the short,
medium and long term direction and level of interest rates. An understanding of the industry
sector involved, including the maturity of sector and cyclical effects that the overall economy
has on it, is also taken into account.
The entire step given above gives a qualitative overview of the firm’s position within
its sector and the economy as the whole.

IMPORTANCE AND SIGNIFICANCE OF THE STUDY

In today’s word the economy is growing and along with it need of information is also
growing. The information required can be in the different forms either it con in the form,
which is related to marketing strategies of two or more competitors company in the same
field, or it can be any financial information required by investor, stockbroker and
manufacturer itself of that company. Lots of business decision are based in such type of
information, the corporate level person and top authorities are relaying on such type of
information to take their decision about different factors such as production, pricing,
investment and also whether to continue with the same product or to make any advances in
the existing product, whether and when to launch the new product or not.

7
Financial ratios are the most common and widespread tools used to analyze a business’
financial standing. Ratios are easy to understand and simple to compute. They can also be
used to compare different companies in different industries. Since a ratio is simply a
mathematically comparison based on proportions, big and small companies can be use ratios
to compare their financial information. In a sense, financial ratios don’t take into
consideration the size of a company or the industry. Ratios are just a raw computation of
financial position and performance.
Ratios allow us to compare companies across industries, big and small, to identify their
strengths and weaknesses. Financial ratios are often divided up into seven main categories:
liquidity, solvency, efficiency, profitability, market prospect, investment leverage, and
coverage.
So such studies are having significance for studying the financial statement analysis will help
to get out financial position of the company

RATIONALE OF THE STUDY

On the similar way the parties of the company mainly bank and investor of the
company required financial information about the company on the larger basis. Because their
decision regarding the investment in particular company are too much important and also the
future prospect of the company are based on such kind of information’s. So it much that the
information should be real and authenticated and also being in normalized as well as user
friendly. So it is important to give the real information through the ratio analysis.
Now a day’s lots of organization is running whose main objectives is to provide the
information to the companies as well as to the industries to help them and also the outside
factors, which directly or indirectly affect company future. Those using accounting
information whether they are management security analyst, lender or investing public have
placed some reliance on the financial ratio as indicator of profitability, liquidity and solvency
of the firm.
So I had decided to carry out financial statement analysis at the selected firm i.e. Bata
India.
In particularly, the ratio analysis can be of immense help in the credit analysis of the
firm. On the basis of technical and qualitative judgment, directly help the investor or lender
to make decision on finance.

8
SCOPE OF THE STUDY
The scope of project is to analyze the data which would help in future.
The scope of project is limited to one firm only but it will get the scope for the number of
firms.
The scope of project will be for all type of financial health calculations in the firm.
The scope of the project is for the comparison of different year’s financial information.

LIMITATION OF THE STUDY

The limitations of the study are as follows.
1. The project is limited to one firm only.
2. It is limited to few ratios analysis for study of financial statement
3. It is limited to five years data.
4. It is only for study purpose.

9
 CHAPTER 2
COMPANY PROFILE

10
 CHAPTER 2

COMPANY PROFILE

Bata - India’s favorite footwear brand

Bata India is the largest retailer and leading manufacturer of footwear in India and is a part of
the Bata Shoe Organization.
Incorporated as Bata Shoe Company Private Limited in 1931, the company was set up
initially as a small operation in Konnagar (near Calcutta) in 1932. In January 1934, the
foundation stone for the first building of Bata’s operation - now called the Bata. In the years
that followed, the overall site was doubled in area. This township is popularly known as
Batanagar. It was also the first manufacturing facility in the Indian shoe industry to receive
the ISO: 9001 certification.
The Company went public in 1973 when it changed its name to Bata India Limited. Today,
Bata India has established itself as India’s largest footwear retailer. Its retail network of over
1375 stores gives it a reach / coverage that no other footwear company can match. The stores
are present in good locations and can be found in all the metros, mini-metros and towns.
Bata’s smart looking new stores supported by a range of better quality products are aimed at
offering a superior shopping experience to its customers.
The Company also operates a large non retail distribution network through its urban
wholesale division and caters to millions of customers through over 30,000 dealers.
Bata Ltd. is a privately owned global shoe manufacturer and retailer headquartered in
Ontario, Canada. The company is led by a third generation of the Bata family. With
operations in 68 countries, Bata is organized into four business units. Bata Canada, based in
Toronto, serves the Canadian market with 250 stores. Based in Paris, Bata Europe serves the
European market with 500 stores. With supervision located in Singapore, Bata International
boasts 3,000 stores to serve markets in Africa, the Pacific, and Asia, Finally, Bata Latin
America, operating out of Mexico City, sells footwear throughout Latin America. All told,
Bata owns more than 4,700 retail stores and 46 production facilities. Total employment for
the company exceeds 50,000.
Company Founded in 1894
The Bata family's ties to shoemaking span more than two dozen generations and purportedly
date as far back as 1580 to the small Czech village of Zlin. However, it was not until 1894

11
that the family began to make the transition from cobblers to industrialists. In that year,
Tomas G. Bata, Sr., along with his brother Antonin and sister Anna, took 800 florins, some
$350, inherited from their mother and launched a shoemaking business. They rented a pair of
rooms, acquired two sewing machines on an installment plan, and paid for their leather and
other materials with promissory notes. They produced stitched, coarse-woolen footwear.
Within a year, the business was successful enough to enable the Batas to employ ten people
in their factory, such as it was, as well as another forty who worked out of their own homes.
In the same year, 1895, Antonin was drafted into the military and Anna quit the business to
get married, forcing Tomas to assume complete control of the venture. He was just 19 years
old.
In 1900, Bata moved the operation to a new building located close to Zlin's railway station
and took the first major step in industrialization, installing steam-driven machines. The
company enjoyed success producing light, linen footwear that appealed to a large portion of
the population, who could not afford better-made leather shoes. Nevertheless, Bata came
close to bankruptcy on more than one occasion and concluded that in order for his business to
survive he needed to find more efficient ways to manufacture and distribute shoes. In 1904,
he and three employees took a trip to the United States to learn firsthand the ways of mass
production. Bata spent six months working as a laborer on a shoe assembly line in New
England. On his way back to Zlin, he also took time to visit English and German factories.
Upon his return home, Bata began to transform the family shoe business, not only by
applying the latest production techniques--which would one day earned him the moniker, "the
Henry Ford of the shoe industry"--but also by finding a way to preserve the role of workers,
which all too often changed dramatically during the transition from an artisan to an industrial
approach to commerce.
The Bata shoe business began to experience steady growth, so that by 1912 it was employing
600 full-time workers plus another few hundred who worked out of their homes in
neighboring villages. Tomas Bata now began to exhibit another side to his personality, the
social idealist. Because there was a shortage of housing in Zlin for his new workers, he
constructed new homes, which he rented at cost. He also offered inexpensive meals in factory
cafeterias and free medical care. He even built a new hospital to care for his workers.
However, as soon as they began to earn higher incomes, area merchants raised prices. In
answer, Tomas Bata opened his own less-expensive company stores to ensure that his
employees were able to enjoy the fruits of their success. He also took steps to identify

12
management talent among the ranks of his workers and instituted a training program that was
ahead of its time.
World War I Boot Contract a Turning Point
Bata received a major boost in 1914, following the outbreak of World War I, when the
company received a contract to produce boots for the Austro-Hungarian army. From the
waste of these items, the company produced the uppers to a wooden shoe that it sold to the
lower classes. Tomas Bata then invested the profits in new machinery, as well as in the
opening of new retail shops, so that the business was well positioned to take advantage of the
economic boom of the 1920s. Before the company could enjoy this strong period of growth,
however, Tomas Bata and his employees were forced to take a major gamble together. In the
years immediately following the end of World War I in 1918, an economic slump prevailed
across the globe, leading to significant unemployment. Czechoslovakia, formed as part of the
peace settlement of World War I, attempted to fight inflation, which had already devastated
Germany, by adopting tight monetary controls. As a result, the country's currency lost three-
quarters of its value, which in turn led to a drop in demand for products, a cutback in
production, more unemployment, and even less consumer demand--developments that
together threatened national economic devastation. In August 1922, a group of industrialists
met to discuss their plight. Unlike the others, Tomas Bata did not simply throw up his hands
and blame the government. Instead, he called on the industrialists to take decisive steps to
stimulate market demand, and he shocked everyone by announcing that he was going to cut
the price of Bata shoes in half. Once the surprise of the moment wore off, Bata's audience
simply laughed at him.
Bata was able, however, to convince his workers that he had a plan, albeit a radical one, that
would work. He believed that the company had to cut costs to the bone and work at peak
efficiency in order to halve the price of Bata shoes. Workers, ignoring their union leadership,
accepted a 40 percent reduction in wages across the board. Tomas Bata, in turn, provided
food, clothing, and other necessities at half-price to mitigate the loss of wages. In addition, he
introduced measures that were pioneering, including the creation of individual profit centers
and incentive payments to both management and workers to spur productivity. With his
operations lean and efficient, he then launched a national advertising campaign. The response
from consumers was swift and dramatic, as Bata stores, which had been virtually empty for
months, were now swamped with customers looking for inexpensive shoes. Bata was forced
to increase production, and not only did the company maintain full employment, it began to

13
hire. The decision to cut prices proved to be a turning point in the history of the company,
which now grew at a tremendous pace.

Our Values
We follow the values of our Parent Company, Bata Shoe Organization, which are:
SERVE WITH PASSION
We are passionate about delighting our customers. Serving their individual needs defines
everything we do. It is this passion for what we do that sets us apart from our competitors.
We are proud and energized by being part of a family company with deeply held values. We
have all invested something of ourselves in the company and act as if the company was our
own. We like to win but not at all costs. We take responsibility for how we impact the many
and diverse communities in which we operate.

BE BOLD
We are pioneers. We value individuals with the courage to change, and to be prepared to fail
sometimes. We have a healthy dissatisfaction for the status quo. We encourage creativity. We
recognize curiosity and original thought. Innovation is the foundation stone of our company.
We embrace the future but take time to learn from the past. We do what we say we will do
and do not rest on our laurels. We celebrate success and value everyone’s unique contribution
towards achieving the goal.
COUNT ON ME
We lead by example and follow when called. We value those who take accountability for
their successes and failures. We take responsibility for our own performance and the
performance of those around us. We encourage and support others to do their best. We place
great importance on developing ourselves and those around us and we believe that feedback
is the breakfast of champions. We share openly with others and we act with integrity in all
that we do.
EXCEED CUSTOMER EXPECTATIONS
Whether it is products, processes, or people, we are uncompromising when it comes to
quality. We strive to create products that are easy to buy, exciting to wear, and exceptional
value. We strive to be the most responsible and efficient in all that we do it order to deliver
the best value to our customers. We operate where design, comfort and value meet.
Delighting the diverse needs and preferences of our customers is our lifelong mission.

14
IMPROVING LIVES
Making people’s lives better has been at the core of the company’s philosophy for over 120
years. We do this by displaying respect for our customers, suppliers, employees and the
communities we touch. We believe that we can make a difference in the lives of everyone we
touch through openness and tolerance to race, religion or cultural differences. We offer an
inclusive and supportive work environment to our employees where individuality is valued,
where people can ‘be themselves’, and where everyone is encouraged to grow.
About Hushpuppies
Our Story
Since 1958, we’ve been leading the casual lifestyle revolution — helping people embrace
everyday comfort. Our soft, breathable and comfortable footwear invited young families to
break the rules, kick back and enjoy a comfortable, casual way of living. With over 17
million pairs of shoes sold every year in more than 165 countries around the world, Hush
Puppies is a global brand, a household name and a cultural icon that embodies the light-
hearted spirit of its beloved basset hound.
Our Promise.
Hush Puppies is the go-to footwear, accessory and apparel brand that delivers the right mix of
timeless style, dependable comfort and quality.
Inspire happiness from the shoes up.
We provide the world’s most comfortable and stylish shoes, accessories and apparel to help
consumers look and feel their best. We know we’ve done our job when we see people smile
—the purest expression of comfort and style.
Q3FY23 Results:
Bata continued to register a subdued performance in Q3FY23 with sales growing at a mere
3% CAGR over pre-Covid levels Bata reported single digit revenue growth of 7% YoY to |
900.0 crore, which was below our estimate of | 930.5 crore (consensus estimate: | 960 crore)
Gross margins improved 210 bps YoY to 54.8% (I-direct estimate: 56.5%). It continues to
be well below Q3FY20 levels (~60%). EBITDA margins were at 22.9%, up 285 bps YoY (I-
direct estimate: 24.8%, Q3FY20: 31.6%). Absolute EBITDA came in at | 206.0 crore (I-direct
estimate: | 230.8 crore), which is just 78% of pre-Covid levels PAT grew 15% YoY to | 83.1
crore (I-direct estimate: | 100 crore). However, on a three-year CAGR basis, the company
witnessed de-growth of 11%

15
 CHAPTER 3
REVIEW OF LITERATURE

16
 CHAPTER 3

REVIEW OF LITERATURE
Prasanta Paul (2011) stated on the Financial Performance Evaluation – Some of the selected
NBFCs are taken for the comparative study. In the study, five of the listed NBFCs are
considered for the analyzation of comparative financial performance. Different type of
statistical tools like standard deviation, arithmetic mean, correlation etc. are used extensively.
Sheela Christina (2011) reported on Financial Performance of Wheels India Ltd. Secondary
data collection method is used for the analytical type of research design. Before conducting
the study, validity and reliability is checked for the past five years where the researcher used
this for the purpose of study.
Ried Edwardj and Srinivasan Suraj (2020) made an investigation to check whether the
special items presented by the managers’ in the financial statements reflected in the economic
performance or opportunism.
Gaur Jighyasu (2020) focuses on the measurement of financial performance of business
group companies of nonmetallic mineral products industries of India. This study uses the 57
business group companies’ financial data of nonmetallic mineral products industries of India
such as glass, cement, jewellery and gems, ceramic tiles, refractories etc.
Amalendu Bhunia (2020) took the analysis of pharmaceutical company’s financial
performance to understand how the management of finance playing a crucial role in the
growth. For a period of twelve years the study has undertaken from 1997-98 to 2018-09.
Ghosh Santanu Kumar and Mondal Amitava (2019) study on the relationship of
intellectual capital and finance performances for a period of 10 years from 1999 to 2018 of 70
Indian banks. The measurement of financial performance used in this analysis were return on
equity, return on assets and assets turnover ratio of Indian Banks.
Burange and Shruti Yamini (2018) analyzed the performance of Indian Cement Industry –
The competitive landscape. The experience of the boom on the account of overall growth of
Indian Economy by the cement industry is because of the expanding of investment and
industrial activity in the cement sector.
Noel Capon et al (1994) published a meta-analysis on the impact of the strategic planning on
financial performance which has omitted a major study on corporate planning in the fortune
five hundred manufacturing firms. Finally, the conclusions were that there is a small but
positive relationship between the strategic planning and the performance existed.

17
Robert O.Edmister (2019) An Empirical Test of Financial Ratio analysis for Small Business
Failure. This study developed and empirically tested a number of methods for analyzing
financial ratios to predict the failure of small business.
The roots of capital structure theory refers to more than fifty decades since the seminal work
which presented by Modigliani and Miller 1958(thereafter MM) .They proved, under
restrictive assumptions (no taxes and transactions costs) that cost of capital does not affect on
capital structure ,particularly debt then not effect on firm value where this theory called
irrelevancy preposition. In other words, the value of levered firm equals the value of
unlevered firm.
Latterly , Modigliani and Miller(1963) presented new proof that cost of capital affect on
capital structure, and therefore affect on value of the firm with relaxing unrealistic
assumptions that there are existing taxes, which indicate that borrowing give tax advantage,
where the interest deducted from the tax and it will result tax shields ,which in turn reduce the
cost of borrowing and then maximize the firm performance(Miller,1977) and this require
from the firm to make trade off between the cost of debt from side and the benefits of using
debt from another side.
In sequence, the researchers studied the relationship between capital structure and the value
of the firm through appearing new theory called the agency theory which indicates to
potential conflict between shareholders and managers from on the one hand and the potential
conflict between shareholders and debtors form on the other hand. Potential conflict between
shareholders and managers arises when the shareholders choose the manager as an agent of
their selves to manage the firm in order to maximize their wealth's, but the mangers
concentrate on the high profitable and risky projects to achieve their interests at first that
represented incentives and rewards, and after that concerning of shareholders benefits, all of
these lead to maximize the firm value(Jensen and Meckling (1976),Harri and Raviv(1991),
and Myer(2001)).
Many studies proved that growth opportunities play important role in determining the capital
structure and therefore effect on firm performance. Myer(1977) discussed that the role of
growth opportunity in effect of the nature and the composition of capital structure that high
growth opportunities firms most likely will suffer from appearing the debt problem and this
will lead to arise risks accompanying with debt of which the firm gives up the profitable
investment opportunities. In addition, the firm will be relying on the equity sources more than

18
debt sources to face that’s risks and to finance expected growth opportunities, thus it will
reflect positively on firm performance (Hovakimian, Opler and Titman,2001).
Another viewpoint related with agency costs that the firm will expect to achieve new growth
opportunity in the future. High growth firms will borrow loans and issuing new bonds
comparing with low growth firms. If the firm wants to issue debt in the future, the firm will
expose of bankruptcy risk by reason of increasing the debt costs ,leading to reduce the firm
performance (Ross(1977), Majumdar and Chhibber(1997)).
It can be look to bankruptcy risks from another viewpoint, which provide for that bankruptcy
considers high cost for the managers, it may refer to their fears from losing control benefits of
the firm and their reputation .Then , the debt creates for the managers an incentive to work
hardly and actively in spite of the decrease the increments that may can make it, but this will
encourage them to utilize the best invested opportunities and this will lead to reduce of
bankruptcy(Grossman and Hart(1982) and therefore it will reduce debt cost and thus
enhancing the firm performance.
Wippern (1966) investigated the relationship between financial leverage and firm value on
some industries which marked on high degree in difference characteristics from where
growth, cost and demand. The study used debt to equity ratio as financial leverage indicator
and earnings to market value of common stock as performance indicator. Results revealed
that leverage effect positively on firm value and this traditional evidence which said that
shareholders wealth can enhance by using outside financing.
In this manner, Holz(2002) found that capital structure (debt ratio) related positively with the
firm performance , the result ascribes to the willing of firms managers to finance their
projects by borrowing and then use theses money optimally to maximize the performance.
Accordingly to this result, if the banks want to lend money, it shall study the feasibility of
projects that want to finance its accurately before offer loans until that the firms can achieve
required returns to meet their obligations.
On the same manner , Dessi and Robertson (2003) found that financial leverage affect
positively on the expected performance, where they explained this result to that low growth
firms attempt to depend on the borrowing for utilizing the expected growth opportunities and
investing borrowing money at the profitable projects , therefore it will increase the firm
performance.
Margrates and Psillaki (2010) proved also that financial leverage (debt ratio) correlated
positively and significantly with firm performance(added value, labor and capital).

19
In the contrast to the above, most studies had proved that capital structure related negatively
with firm performance.
Majumdar and Chhibber (1997) and Ghosh(2007) reached that level debt(capital structure)
associated inversely with firms performance. The result refers to the creditors who are using
loans as disciplinary tool on the firm. This tool bases on the restrictions that impose by
creditors on the firm as prevention the firm from distribute the earnings on the shareholders
or impose restrictive conditions on the loans by increasing the interest rates or impose
sufficient collaterals on loans, thus, these restrictions will lead firm to focus on how pay the
debt burden without concerning in achieving earnings and reflect adversely on firm
performance.
Abor (2005) noted that various capital structure measure which represented short term debt,
long term debt and total debt associated negatively and statistically with firm
performance .The conclusion refers to that firms rely on borrowing extremely, it will not
achieve tax shields and then it lead to increase borrowing cost of which the firm exposes to
the bankruptcy risks and reduce the return.

20
 CHAPTER 4
RESEARCH METHODOLOGY

21
 CHAPTER 4

RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

The objectives of the study are as follows.
1. To compare the financial statement of past five years of Bata India.
2. To calculate the various ratios based on the financial statements
3. To Study the efficiency of operation by comparing the ratios.
4. To know the profitability of the company by comparing the different ratios of Bata
India.

HYPOTHESES
Hypothesis 1
Null Hypothesis: There is no significant difference between the current ratio of Bata India
over the last five years.
Alternate Hypothesis: There is significant difference between the current ratio of Bata India
over the last five years.

Hypothesis 2
Null Hypothesis: There is no significant difference between the gross profit ratio of Bata
India over the last five years.
Alternate Hypothesis: There is significant difference between the gross profit ratio of Bata
India over the last five years.

RESEARCH METHODOLOGY
The methodology followed for conducting the study includes the specification of research
design, sample design, questionnaire design, data collection and statistical tools used for
analyzing the collected data.

Research Design
The research design to be used for this study is of the exploratory type.

22
REASEARCH SAMPLING
Sampling Unit:
BATA INDIA LTD.
Period of Study: The researcher had chosen the purposive 5 years study i.e 2017-18 to 2021-
22

Data Collection Method

 Primary Method:
 Interview: In order to collect relevant information pertaining to
various financial data, an interview technique administered for
Managers of select firm.
 Secondary Method: The financial data for the five years taken from
the financial statements of the company.
Also, the other related data collected through journals, books, bank
reports, magazines, articles, etc.

23
 CHAPTER 5
DATA ANALYSIS AND
INTERPRETATION

24
 CHAPTER 5

DATA ANALYSIS AND INTERPRETATION

In Cr.

Equities & Liabilities Mar 2022 Mar 2021 Mar 2020 Mar 2019 Mar 2018

Share Capital 64 64 64 64 64

Reserves & Surplus 1,750 1,693 1,829 1,677 1,410

Current Liabilities 817 712 800 629 560

Other Liabilities 893 861 1,037 102 105

Total Liabilities 3,525 3,332 3,732 2,474 2,141

Assets

Fixed Assets 1,231 1,153 1,389 333 308

Current Assets 2,000 1,857 2,003 1,840 1,554

Other Assets 294 321 339 299 277

Total Assets 3,525 3,332 3,732 2,474 2,141

Other Info

Contingent
88 54 66 73 77
Liabilities

25
LIQUIDITY RATIO:-
Liquidity means ability of the business to pay its short-term liabilities. Inability to pay-off
shot term liabilities affects its creditability. These ratio are also termed as ‘Working capital
‘or ‘short-term solvency Ratio’. An enterprise must have adequate Working Capital to run its
day-to-day operation. The liquidity ratio provides a quick measure of liquidity of the firm by
establishing a relationship between current assets and current liabilities.
On the basis of Liquidity Ratio, the firm ensures a proper balance between high liquidity and
lack of liquidity.
The most common ratios which indicates the extent of liquidity are
1 Current Ratio
2 Quick Ratio
3 Cash Ratio

26
Calculation of Ratios:
Current Ratio: -
Current Ratio measure short term debt paying ability. It indicates the availability of current
assets in rupee of current liability. A ratio greater then one means that the firm has more
current assets and current claims against them. A generally acceptable current ratio is 2 to 1.
But whether or not a specific Ratio is satisfactory depends on the nature of the business and
the characteristic of its current assets and liabilities.
Current Ratio = Current Assets / Current liabilities

Financial year Current Assets Current Liabilities Current Ratio

2017-2018 1,554 560 2.76
2018-2019 1,840 629 2.92
2019-2020 2,003 800 2.50
2020-2021 1,857 712 2.61
2021-2022 2,000 817 2.44

Current Ratio

2.92

2.76

2.61

2.5
2.44

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation
It is observed that the current ratio of the organization have always been above the standards
required. In year 2018-2019 the ratio was high and in year 2021-2022 it is low.

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Quick Ratio: -
A Quick ration is a more penetrating test of liquidity. It is a refined measure of the short-term
debt paying ability by measuring short term liquidity. By excluding inventories it
concentrates on the really liquid assets, with value that is fairly certain. Quick Ratio tests the
ability of the business to meet its current obligation even when the sales revenue disappears.
A Ratio of 1:1 is considered to represent a satisfactory current financial condition; however it
does not necessarily imply sound liquidity position
Quick Ratio = Current Assets - Stocks / Current liabilities

Financial year Current Assets – Stock Current Liabilities Quick Ratio

2017-2018 784 560 1.40
2018-2019 1000.11 629 1.59
2019-2020 1128 800 1.41
2020-2021 1246 712 1.75
2021-2022 1127.46 817 1.38

Quick Ratio

1.75
1.59
1.4 1.41 1.38

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation
It is observed that the Quick ratio of the organization have always been above the standards
required. In year 2020-2021 the ratio was high and in year 2021-2022 it is low.

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Cash Ratio: -
It measures the absolute liquidity of the business. This Ratio considers only the absolute
liquidity available with the firm. The absolute liquidity ratio eliminates any unknown
surrounding receivables, it only test short-term liquidity in term of cash and marketable
securities.
Cash Ratio = Cash & Marketable Securities / Current Liabilities

Financial year Cash & Marketable Current Liabilities Cash Ratio

Securities
2017-2018 240.8 560 0.43
2018-2019 471.75 629 0.75
2019-2020 456 800 0.57
2020-2021 462.8 712 0.65
2021-2022 661.77 817 0.81

Cash Ratio

0.81
0.75
0.65
0.57

0.43

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation & Analysis:-

It is observed that the liquidity ratio of the organization have always been above the standards
required. But in year 2021-2022 the ratio was to high which means the current assets where
to high as compare to current liabilities which that the assets where kept ideal and not brought
in use. Through the ratio we can state that the financial health of a company s very strong.

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TURN OVER RATIO:-
These ratios are concerned with measuring the efficiency in assets management. The turnover
with which assets are managed/ used is reflected in the speed and rapidity with which they
are converted into sales. Thus, the turnover ratio are the taste of relationship between
sales/cost of goods sold and assets.
The most common ratio which indicates the efficiency of the business are as follows.
1) Inventory turnover ratio.
2) Working capital turnover ratio
3) Total assets turnover ratio

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Inventory Turn Over Ratio:-
This ratio finds out the number of times inventory is turned over on an average in a year. This
ratio is calculated for findings at what extent the inventory has been utilized efficiently and
what proportion of working Capital has been locked up in inventory.
Inventory Turn Over Ratio = Cost of Goods Sold / Avg. Inventory

Financial year Inventory Turn Over Ratio

2017-2018 3.45
2018-2019 3.49
2019-2020 3.49
2020-2021 2.81
2021-2022 0.34

Inventory Turn Over Ratio

3.45 3.49 3.49

2.81

0.34

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation & Analysis:-

According the ratios it is observed that the ratio is increased in the years 2018-2020 and it is
decreased in 2021-2022.

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Working Capital Turnover Ratio:-
This ratio measures the number of times the working capital is turned over during the year. In
a way this ratio also throws light on operating cycle (conversion of current assets into cash)
of the company. A low ratio indicates slow moving operating cycle where as a high level
implies that the company’s current assets are utilized efficiently.

Working Capital Turnover Ratio = Net Sales / Working Capital

Financial year Working Capital Turnover Ratio

2017-2018 16.39
2018-2019 13.40
2019-2020 10.67
2020-2021 10.87
2021-2022 14.60

Working Capital Turnover Ratio

16.39
14.6
13.4

10.67 10.87

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation & Analysis:-

According the ratios it is observed that the operation cycle is small. It is also observed no
major of current assets is blocked in inventories as the inventory ratios are to high. According

32
to working capital ratio it can be said that the current assets used for increasing the sales
gives the high return.
Total Assets Turnover Ratio:-
Measure the activity of the assets and the ability of the business to generate sales through the
use of the assets. It revels the efficiency in managing an utilizing the total assets

Total Assets Turnover Ratio = Net Sales / Total Assets

Financial year Total Assets Turnover Ratio

2017-2018 122.58
2018-2019 118.14
2019-2020 81.75
2020-2021 51.20
2021-2022 0.70

Total Assets Turnover Ratio

122.58
118.14

81.75

51.2

0.7
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation & Analysis:-

It there is a remarkable rise in sales but the fixed assets have not increased in the same
proportion but at the same time total assets had decreased in the year 2018-2019to 2020-2021
and had a fall in the year 2018-2019. The ratio is less at 21-22

33
PROFITABILITY RATIO:-
Profitability reflects the final result of business operations. Profitability ratios are calculated t
measure the operating efficiency of the company. Beside management of the organization,
creditors and owners are also interested in the profitability of the firm.
Various profitability Ratios are,

1) Gross Profit
2) Net Profit Ratio
3) Return on Assets
4) Return on Equity
5) Return on capital Employed

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Gross Profit Ratio:-
This ratio reflects with which management produce each unit of product. Gross profit ratio
show profit relative to sales after the deduction of production cost. A high gross profit margin
relative to industry average implies that the firm is able to produce at relatively lower cost.
Where as a low gross profit margin may reflect higher cost of goods sold. Due to the firms
inability to purchase raw materials at favorable terms, inefficient utilization of plant and
machinery, or over investment in plant and machinery, resulting in higher cost of production.
This Ratio will also be low due to the fall in prices in the market or mark reduction in selling
price.
Gross Profit Ratio = Gross Profit x 100 / Sales

Financial year Gross Profit Ratio

2017-2018 12.93
2018-2019 16.33
2019-2020 15.88
2020-2021 -6.89
2021-2022 5.73

Gross Profit Ratio

16.33 15.88
12.93

5.73

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

-6.89

INTREPRETATION

35
Initially the gross profit ratio showed a continues increase up to 2019-2020, but it has shown
it is gone to negative in 20-21. In year 2021-22 it has gain to 5.73
Net Profit Ratio:-
This ratio is the overall measure of the firm’s ability to turn each rupee sales into Net profit.
If the net margin is inadequate, the firm will fail to achieve satisfactory return on share holder
funds. This ratio also indicates the firm’s capacity to with stand adverse economic conditions.
A firm with a higher net margin ratio would be in an advantage position to survive in the face
of falling selling price, rising cost of production or decline demand for the product of net
profit
Net Profit Ratio = Net Profit x 100 / Sales

Financial year Net Profit Ratio

2017-2018 8.50
2018-2019 11.25
2019-2020 10.70
2020-2021 -5.28
2021-2022 4.22

Net Profit Ratio

11.25 10.7
8.5

4.22

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

-5.28

Interpretation & Analysis: -

36
Initially the Net profit ratio showed a continues increase up to 2019-2020, but it has shown it
is gone to negative in 20-21. As net profit ratio is also showing almost the continues
increased in the year 2021-2022.

Return on Assets:-
The profitability of the firm is measured by establishing relation of net profit with the Total
Assets of the organization. This ratio indicates the efficiency of utilization of assets in
generating revenue.
Return On Assets = PAT x 100 / Total Assets

Financial year Return On Assets

2017-2018 10.42
2018-2019 13.30
2019-2020 8.75
2020-2021 -2.70
2021-2022 2.86

Return On Assets

13.3

10.42
8.75

2.86

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

-2.7

Interpretation & Analysis: -

It is observed that the PAT has shown an growth in the year i.e.2018-2019as compared to
early years and also the total asset have increased in last year 2021-2022. The profit earned

37
by the company on its total assets is increased which implies that the assets of the company
are used more proficiently at the last year.

Return on Capital Employed:-

This is a percentage of profit to capital employed. It is the only measure, which can be said to
show the overall satisfactory performance of an under taking from the stand point of
profitability. It enables the management to show whether the funds entrusted to it have been
properly used or not. Higher the ratios better the result.
Return on Capital Employed = PAT x 100 / Capital Employed

Financial year ROCE Ratio

2017-2018 14.05
2018-2019 26.05
2019-2020 20.54
2020-2021 -0.36
2021-2022 8.48

ROCE Ratio

26.05

20.54

14.05

8.48

2017-2018 2018-2019 2019-2020 2020-2021

-0.36 2021-2022

Interpretation & Analysis: -

38
The return on Equity and return on capital employed shareholders increased every year since
2017-2018 to 2019-20 and is maximum in the year 2018-2019.
The efficient utilization of capital employed is observed and is increasing year by year but
lower in the 2020-20121, but well maintained in 2021-2022

HYPOTHESIS TESTING
Hypothesis 1
Null Hypothesis: There is no significant difference between the current ratio of Bata India
over the last five years.
Alternate Hypothesis: There is significant difference between the current ratio of Bata India
over the last five years.

Current ratio
Financial year Current Assets Current Liabilities Current Ratio
2017-2018 1,554 560 2.76
2018-2019 1,840 629 2.92
2019-2020 2,003 800 2.50
2020-2021 1,857 712 2.61
2021-2022 2,000 817 2.44

Particular
Mean 2.646
Variance 0.03828
Observation 5
Df 4
T stat -2.73915
P(T<=t) two-tail 0.011976
T Critical two-tail ±2.0738

Interpretation
T value (-2.7391) is higher than T critical value (±2.0738) indicate that there is significant
difference between the current ratio of Bata India over the last five years.

39
Hypothesis 2
Null Hypothesis: There is no significant difference between the gross profit ratio of Bata
India over the last five years.
Alternate Hypothesis: There is significant difference between the gross profit ratio of Bata
India over the last five years.

Gross profit Ratio

Financial year Gross Profit Ratio
2017-2018 12.93
2018-2019 16.33
2019-2020 15.88
2020-2021 -6.89
2021-2022 5.73

Particular
Mean 8.796
Variance 9.740189
Observation 5
Df 8
T stat 2.128111
P(T<=t) two-tail 0.044774
T Critical two-tail ±2.0738

Interpretation
T value (2.128111) is higher than T critical value (±2.0738) indicate that there is significant
difference between the gross profit ratio of Bata India over the last five years.

40
 CHAPTER 6
FINDINGS, CONCLUSION AND
SUGGESTIONS

41
 CHAPTER 6

FINDINGS, CONCLUSION AND SUGGESTIONS

FINDINGS
Based on the analysis and interpretation, the following findings have been found.

Current Ratio: -
It is observed that the current ratio of the organization have always been above the standards
required. In year 2018-2019 the ratio was high and in year 2021-2022 it is low.
Quick Ratio: -
It is observed that the Quick ratio of the organization have always been above the standards
required. In year 2020-2021 the ratio was high and in year 2021-2022 it is low.
Cash Ratio: -
It is observed that the liquidity ratio of the organization have always been above the standards
required. But in year 2021-2022 the ratio was to high which means the current assets where
to high as compare to current liabilities which that the assets where kept ideal and not brought
in use. Through the ratio we can state that the financial health of a company s very strong.
Inventory Turn Over Ratio:-
According the ratios it is observed that the ratio is increased in the years 2018-2020 and it is
decreased in 2021-2022.
Working Capital Turnover Ratio:-
According the ratios it is observed that the operation cycle is small. It is also observed no
major of current assets is blocked in inventories as the inventory ratios are to high. According
to working capital ratio it can be said that the current assets used for increasing the sales
gives the high return.
Total Assets Turnover Ratio:-
It there is a remarkable rise in sales but the fixed assets have not increased in the same
proportion but at the same time total assets had decreased in the year 2018-2019to 2020-2021
and had a fall in the year 2018-2019. The ratio is less at 21-22
Gross Profit Ratio:-

42
Initially the gross profit ratio showed a continues increase up to 2019-2020, but it has shown
it is gone to negative in 20-21. In year 2021-22 it has gain to 5.73
Net Profit Ratio:-
Initially the Net profit ratio showed a continues increase up to 2019-2020, but it has shown it
is gone to negative in 20-21. As net profit ratio is also showing almost the continues
increased in the year 2021-2022.
Return on Assets:-
It is observed that the PAT has shown an growth in the year i.e.2018-2019as compared to
early years and also the total asset have increased in last year 2021-2022. The profit earned
by the company on its total assets is increased which implies that the assets of the company
are used more proficiently at the last year.
Return on Capital Employed:-
The return on Equity and return on capital employed shareholders increased every year since
2017-2018 to 2019-20 and is maximum in the year 2018-2019.
The efficient utilization of capital employed is observed and is increasing year by year but
lower in the 2020-20121, but well maintained in 2021-2022
HYPOTHESIS TESTING
Hypothesis 1
T value (-2.7391) is higher than T critical value (±2.0738) indicate that there is significant
difference between the current ratio of Bata India over the last five years.
Hypothesis 2
T value (2.128111) is higher than T critical value (±2.0738) indicate that there is significant
difference between the gross profit ratio of Bata India over the last five years.

43
CONCLUSION
The study of financial statement of Bata India Ltd is the good experience while doing
project for the BBA course. Various ratios had been calculated for last five years based on the
balance sheet of Bata India Ltd. On the basis of the ratios that have been calculated and the
interpretation of those ratios, we can arrive at following conclusion:
The financial health of the organization has been found strong According to the cash
ratio it has found that the cash was kept idle and not utilized which give a rise in the ratio
during that year.
The liquidity ratio of the organizations is very good through which we can find out
that the organization can pay out its debts whenever required.
According to inventory ratio it is found the operation cycle of organization is short
and has a huge inventory ratio. The working capital is utilized in proper manner to increase
the sales. It is also found that the assets are perfectly used for increasing sales. The fixed
assets are contributing a healthy for the sales.

44
SUGGESTIONS
1. The Bata organization can have a better utilization of asset, for e.g., by investing excess
cash in liquid assets, it can be utilize as idle cash as well as earn some returns.

2. As we have found that the fixed assets contributed a good support to increase the net sales
but it is also found that there is no proportionate increase of the fixed assets as to the net
sales. Thus the organization can utilized the idle cash with them to increase the fixed assets
for the increase of net sales and gaining high return.

3. The organization should trade in such businesses which have a good return and a healthy
margin.

4. The organization perform multi business processes which are nearly interrelated with each
other belonging to agriculture sector and having similar customer base, of one business
activity for other business activities by providing some attractive schemes due to which the
customer will be bounded to the organization and will have not for one but for multi
facilities.

45
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Ratio Analysis At Kaleeswarar Mills B Unit Of National Textile Corporation Ltd ” IOSR
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6. Financial Management (5th Edition), Prassana Chandra.
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10. www.moneycontrol.com

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