A

SUMMER INTERNSHIP PROJECT REPORT

ON
“AN ANALYTICAL STUDY OF FINANCIAL STATEMENT”
FOR
Talent Serve Private Limited
SUBMITTED TO:

IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT

OF
MASTER OF BUSINESS ADMINISTRATION (M.B.A.)
UNDER THE GUIDANCE OF
Prof Dr. Sachin Lad

-SUBMITTED BY-
Rahul Satish Dashwant

PRN NO. MITU22MBAF0050

SUBMITTED TO:

MIT COLLEGE OF MANAGEMENT, PUNE

 ACKNOWLEDGEMENT

My Summer Internship Project entitled.

“AN ANALYTICAL STUDY OF FINANCIAL STATEMENT”

Has been a fruit of hard work and support of many individuals. It is indeed a great
pleasure to express our gratitude to all who have been instrumental in making our
training a rich experience.

I would thank our institution.

MIT College of Management (MITCOM),

MIT ADT University, Pune,

My Dean Management and Director ICT,

Prof Dr Sunita Karad

For giving me a platform to work under Talent serve (India) Pvt.Ltd.

My sincere thanks to

Mrs. Megha Worah

Sincere gratitude to my mentor

Prof Dr. Sachin Lad

For their constant support and guidance.

My association with this company over past two months has been an

extremely rewarding experience and I feel proud and privilege to be a part of

this organization.

Signature of student
COMPANY CERTIFICATE
 DECLARATION

I undersigned hereby declares that the project titled “An Analytical Study
of Financial Statement” is executed as per the course requirement of two-
year full-time MBA program of MIT-ADT University, Pune. This report has
not submitted by me or any other person to any other University or
Institution fora degree or diploma course. This is my own and original work.

Rahul Satish Dashwant

Master of Business Administration in Finance Technology

MITU22MBAF0050
MBA-2022-2024
 TABLE OF CONTENTS
Chapter.
Title Of Content Page no
no
i Acknowledgement i
ii College Certificate ii
iii Company Certificate iii
iv Students Declaration iv
1 Executive Summary 1-2
2 Introduction 3-4
3 Industry Profile 5-9
4 Company Profile 10-22
5 Theoretical Background 23-29
6 Literature Review 30-34
7 Research Methodology 35-39
8 Data Analysis and Discussion 40-62
9 Conclusions 63-65
10 Recommendation 66-67
Major Learnings and Contributions
11 68-69
to the host organisation
12 Bibliography 70-71
 CHAPTER 1

EXECUTIVE SUMMARY

1
 Executive Summary

During my internship at Talent Serve Private Limited, a prominent Ed-tech and E-learning
company based in Mumbai, I had the opportunity to immerse myself in a dynamic
corporate environment. This experience provided me with invaluable practical insights and
a firsthand understanding of the company's operations.

Talent Serve is renowned for its commitment to delivering high-quality services and
maintaining effective management practices. The company stands out in the Ed-tech
industry, emphasizing business expansion and growth in promising sectors. One notable
aspect of Talent Serve's approach is its proactive adaptation to market needs and evolving
business trends. This agility allows the company to stay ahead in a competitive landscape.

Despite its remarkable growth, Talent Serve remains dedicated to its core mission –
ensuring customer satisfaction and contributing meaningfully to the local corporate culture
and the overall development of the country. The company's vision extends beyond mere
expansion; it reflects a commitment to creating a positive impact on the community and
actively participating in the progress of the nation.

The study aims to holistically evaluate the company's financial performance by employing
ratios as a tool. The focus is on liquidity, profitability, and efficiency, with a keen interest
in making informed comparisons across different periods to derive valuable insights into
the company's financial health and trajectory.

In simpler terms, my internship at Talent Serve was not just a professional exposure but a
journey into the ethos of a company that values customer satisfaction as a cornerstone of
its success. The experience illuminated the significance of adaptability in a dynamic
business environment and highlighted how a corporate entity can play a role in shaping the
broader socio-economic landscape. Overall, my time at Talent Serve was a valuable
introduction to the corporate world, where dedication to customers and a broader societal
vision are integral to success.

2
 CHAPTER 2

OBJECTIVE OF THE STUDY

3
 Objective Of Study

2.1 To evaluate the performance of the company by using Ratios as a yardstick to

measure the efficiency of the company.

2.2 To understand the liquidity, profitability and efficiency positions of the company
during the study period.

2.3 To evaluate and analyse various facts of the financial performance of the company.

2.4 To make comparisons between the ratios during different periods.

4
 CHAPTER 3
INDUSTRY PROFILE

5
 Industry Profile

3.1 E-Learning Industry; -

3.1.1 Introduction: -

The global e-learning market is on the rise, poised to expand by a substantial USD 147.7
billion between 2021 and 2025, reflecting a remarkable compound annual growth rate
(CAGR) of 16 percent. This growth is underpinned by several key factors, including the
increasing significance of online learning in corporate training and development, as well
as notable advancements in academic learning methods.

The adoption of e-learning extends across various sectors, including government and
academic programs, and is driven by the accessibility of e-learning technology. It offers
numerous advantages, such as cost savings through centralized content, effective time
management, flexibility, convenience, and consistent content delivery. Consequently, the
e-learning market is anticipated to experience a growth rate several times that of traditional
classroom learning.

3 . 1 . 2 T he c ha r a c te r is t ic s of t he E le a r ni ng i nd us tr y ; -

 Focused and Simplified Content

 Clear Learning Objectives

 Interactive Elements with Opportunities for Practice

 Availability Features

3.1.3 Economic aspects

Online education has clear advantages for students, but how does it impact the economy?
The growth of online courses is transforming traditional education and creating new
opportunities. It's not just about students; it's about jobs, employability, and economic
growth.
Here's what it means for the economy in simple terms:

 Job Creation: More online courses mean more jobs. Online teachers, web
developers, and administrators are in demand, creating employment opportunities.

6
  Employer Confidence: Employers are increasingly willing to hire graduates with
online education. This means a stronger and more skilled workforce, which is good
for the economy.

 Economic Growth: As e-learning replaces traditional education, more students are

educated online. This can lead to economic growth as a well-educated workforce is
essential for a thriving economy.

 Flexibility and Cost Savings: Online education offers flexibility and is often more
affordable. This attracts more students, and when people have access to affordable
education, it can lead to better economic prospects.

3.2 – Growth and Evaluation of Industry in India; -

The E-Learning Market is expected to grow a lot. It's like a fast train that will go up by
20% every year from 2022 to 2028, reaching a huge $315
Billion in 2021. This growth is happening because more and more people around the world
are getting on the internet.

Thanks to better internet and more connections, millions of people can now learn online.
In 2021, almost 5 billion people can use the internet, up from 4.1 billion in 2019. That
means more folks can use e-learning to take courses and get degrees.

The COVID-19 pandemic made e-learning even more popular. Many companies had to
switch to remote work to keep employees safe. But this created challenges in training and
communication. It also made companies want to improve their employees' skills, so they
needed e-learning platforms.

Many companies are now making personalized learning solutions to meet the growing
demand. For example, LinkedIn plans to have a website where businesses can teach their
employees with videos and resources on things like management and machine learning.

In a nutshell, the e-learning market is booming because of better internet and the need for
online learning caused by the COVID-19 pandemic. It's like a fast-growing industry that's
here to stay.

3.3 E-learning Industry Analysis – Michael Porters Five Force

Model1.3.1 Introduction

Porter's Five Forces is like a strategy tool that helps us understand how strong or weak an
industry is by looking at five important things. It's widely used by businesses to figure out
how to compete better.

7
1. Bargaining Power of Buyers - Moderately Strong:

Buyers, like businesses looking for eLearning solutions, are careful when choosing a
provider because it's a big decision. Big buyers have more say in the decision. This puts
some pressure on eLearning providers. There aren't many big eLearning providers, so the
buyers have some power.

2. Bargaining Power of Suppliers - Weak:

Suppliers for eLearning, like skilled professionals and tech equipment, don't have much
power. These things are easy to find, so eLearning companies have plenty of options.

3. Substitutes for eLearning - Moderately Weak:

Other ways of learning, like traditional university programs or CD content, can be

alternatives to eLearning. But they aren't seen as big threats to eLearning companies
because eLearning is essential for some needs.

4. Rivalry Among eLearning Providers - Moderately Strong:

Competition among eLearning companies is fierce, with new companies entering the
market easily. Standing out can be tough, and companies need to provide top-notch
solutions to succeed.

5. Barriers to Entry - Moderately Strong:

Starting an eLearning business is hard because it needs money and skills. However, big
companies like Microsoft are showing interest, making it more likely for new players to
enter the market.

8
3.3 Conclusion; -

In conclusion, the most potent force shaping the Learning business is intense rivalry. This
competition is fuelled by low entry barriers and the influence of buyers, making it a fiercely
competitive market that is likely to become even more so. As a result, profit margins for
competitors in this industry could be under pressure. On the other hand, the forces of
substitutes and supplier power have less impact and are relatively weak in this context.

9
 CHAPTER 4
COMPANY PROFILE

10
 Company Profile

4.1 Introduction: -

 Establishment Date: Talent Serve India Private Limited was founded on the
16th of July, 2019, as a privately-owned company.

1. Type of Organization: Private Limited Company, not publicly listed.

2. Headquarters: The Company is headquartered in Mumbai City, Maharashtra.

3. Capital: The entire paid-up capital and authorized share capital of Talent serve
India Private Limited is INR 1,000,000.

4. Revenue Projection: The Company is projected to generate operating revenue

of less than 1 core for the fiscal year ending on March 31, 2021.

5. Financial Performance: In the previous fiscal year, the company's EBITDA

declined by 37.07 percent, and its book net worth decreased by 28.41 percent.

6. Status: Talent serve India Private Limited is currently in an "Active" status,

indicating that it is actively conducting its business operations.

7. Annual General Meeting (AGM): The most recent AGM took place on
September 30, 2022, as per available records.

8. Financial Statements: The most recent balance statement available is for the
period ending on March 31, 2022.

9. Directors: Dilip and Megha Worah are the company's directors.

10. Corporate Identification Number (CIN): The Company’s CIN is

U74999MH2019PTC328130, assigned at the time of its establishment.

11
 11. Registered Office: The registered office of Talent serve India Private Limited
is located at Plot 9, A-702, Charkop Hemavathi CHSL, Charkop, Section 7, RDP-
7, Kandivali (West), Mumbai, Mumbai City, Maharashtra.

This profile provides an overview of Talent serve India Private Limited, a privately held
organization operating in Mumbai, Maharashtra.

4.1 VISION; -

Our mission is to enhance the quality of education and job prospects for students, job
seekers, and working professionals by providing them with a comprehensive one-stop
solution for all their educational and corporate requirements.

4.2 MISSION; -

We aim for ending all your corporate requirements in just one convenient visit here. All
you need to do is focus on your goals. We share with you our best services to align our
efforts by achieving your trust and create a social impact.

4.3 GOAL; -

1. Increase Market Reach: This goal is all about reaching more customers. It's driven
by what customers want. The aim is to make their products more visible to the
people they're trying to sell to, essentially expanding the overall market for
investors.

2. Provide the Best Service: When it comes to how their company interacts with the
outside world, offering the very best customer service means ensuring that
customers are happy with the overall experience of their product or service. It's
about making sure customers are well taken care of.

12
4.4 Objectives; -

1. Deliver Higher-Quality Products to Clients: Qualit y is of paramount

importance to Talent Serve because it builds trust wit h their clients.
They achieve this by implement ing a robust qualit y management system,
devising a product strategy, staying attent ive to their compet itors, and,
most important ly, listening to their clients. This focus on qualit y enables
their cont inuous development and growth.

2. Fair Pricing for Clients: Talent Serve is committed to offering fair and reasonable
prices for their products and services. The pricing is determined by factors like
contract terms, quality, and delivery timeliness.

3. Community Support: Talent Serve actively contributes to the community by

meeting its needs. This not only garners customer support but also builds goodwill
in the community, ensuring future advocacy and growth.

4. Brand Reputation Enhancement: Talent Serve recognizes the importance of a

strong online brand reputation. It leads to customer loyalty, increased profit
margins, and trust. They employ strategies to manage their brand's online image.

5. Personal Growth and Development: Talent Serve provides opportunities for

personal growth and development to their employees. This helps in attracting talent
and keeping the current workforce motivated, productive, and confident.

13
ORGANIZATIONAL STRUCTURE

14
4.6 Service Offered: -

1. Saarthii; -
T he y i n v it e bu s i n e s s e s a n d c o l l e g e s t o h e l p t h e m f i n d a s u it a b l e i nt e r n
o r jo b opportunity.

15
 2. Dishaa; -

Talent Serve provides a platform where you can decide what path you want
totakefo r yo u r fu t u r e b y a t t e nd i n g o u r w e b i n a r s o n t h e l a t e s t t e c h no lo
g i e s a nd m a n a g e m e nt courses. Dishaa provides knowledge to knowledge seekers.

16
 3. Chanakya; -

C ha n a k ya a s s i s t s s t u d e nt s i n ho n i n g t h e ir s k i l l s b y e nr o l l i n g i n lo n g
- t e r mcourses wit h cert ificat ion, which allows you to build a strong portfolio
and resume, which aids in job placement.

17
 4. Drishyam; -
Drishyam assists students in developing and improving hands-on skills, which
aids in developing a strong mind-set for the future and advancing in their careers.

18
 5. Aatmanirbhar; -

A a t m a n i r b h a r a s s i s t s p e o p l e w ho w a nt t o w o r k i nd e p e n d e nt l y a s a n
H R professional.
They would be trained and supported in the comfort of their ownhomes. Talent Serve’s
assistance in developing themselves for the future.

19
 SWOT ANALYSIS OF TALENTSERVE

4.2 Strengths: -

 Large customer base: - When a business has a wide customer base, it benefits
from things like being recognised for excellent customer service, getting
more referrals, and fostering loyalt y, all of which help the business grow.

 Over 300+ industry experts: - Experts help us be more productive, provide

stability, insight, expand our network, attract talent, expand our clientele, can
accompany us on the entire trip, and offer flexibility.

4.3 Weaknesses: -

 Lack of communication: - Low productivit y occurs when people lack

the informat ion or k no w l e d g e , t h e y be l i e v e t he y n e e d .

 Lack of awareness: - Self-awareness in talent serve tends to be oblivious of how

their actions and decisions affect the individuals they work with. Because of
inconsistent behaviour, there has been a lack of self-awareness.

 Not Enough Coordination: - Especially when there is improper funct ionalit y,

the increasing importance of communicat ion in organisat ions hashed a
significant negative influence on the company's ability to attract and retain
personnel.

4.4 Opportunities: -

 Utilize social media; - marketing and advertising to increase traffic as LinkedIn

and Instagram popular among the target audience, which is job seekers.

 To increase market reach; - form strategic partnerships with other colleges and
experts: When current, brand-loyal customers buy more of a company's
service, higher market share can aid in improving sales.

 Increasing brand recognition: -If a corporation invests in branding for their

enterprise, they can increase leads & business growth. One can enhance market

20
 share and sales by raising brand awareness. It promotes
repeat purchases, increases market share, and generates more sales.

4.5 Threats: -

 Higher expectations form consumer:

 Superior service from other providers
 Digital difficulties for both students and professionals.

21
 CHAPTER 5
THEORETICAL BACKGROUND

22
 THEORETICAL BACKGROUND

FINANCIAL STATEMENT ANALYSIS

5.1 What is Financial Statement?

According to Meigs and Meigs (2003), financial statement are a structured representation
of the financial position and financial performance of an entity. The objective of financial
statements is to provide information about the financial position, financial performance and
cash flows of an entity that is useful to a wide range of users in making economic decisions.

5.2 ON THE BASIS OF MATERIAL USED; -

External Analysis: This assessment is conducted by external parties, often referred to as

"outsiders." These parties can include investors, government agencies, credit institutions,
and other creditors who do not have access to the company's internal data. The purpose of
this analysis is to increase regulatory oversight of companies, and government regulations
require companies to disclose information in their financial reports.

Internal Analysis: This evaluation is carried out by individuals who have access to the
company's financial records and other internal data. The analysis is performed with specific
objectives in mind, depending on the goals intended to be achieved through this
examination.

5.3 ON THE BASIS OF STYLES; -

Horizontal Analysis: This type of analysis involves comparing financial statements for
multiple years. The figures for the current year are compared with those of the base year
or an average. This analysis provides management with valuable insights into areas of
strength and weakness over time.

23
Vertical Analysis: In this analysis, a comparison is made of the proportional relationships
among different items in the financial statement for a specific period. This analysis is
helpful for comparing the performance of several companies in the same industry or
different departments within the same organization. However, because it relies on data for
a single period, it is not suitable for a comprehensive examination of the company's
financial position.

5.4 TOOLS AND TECHNIQUES OF FINANCIAL STATEMENT; -

 Ratio Analysis

5.5 RATIO ANALYSIS; -

Financial analysis is the process of identifying the financial strengths and weaknesses of
the firm and establishing relationship between the items of the balance sheet and profit &
loss account.

Financial ratio analysis is the calculation and comparison of ratios, which are derived from
the information in a company’s financial statements. The level and historical trends of these
ratios can be used to make inferences about a company’s financial condition, its

Operations and attractiveness as an investment. The information in the statements is used

by; -

1. Trade creditors, to identify the firm’s ability to meet their claims i.e. liquidity
position of the company.

2. Investors, to know about the present and future profitability of the company and its
financial structure.

3. Management, in every aspect of the financial analysis. It is the responsibility of the

management to maintain sound financial condition in the company.

4. The term “Ratio” refers to the numerical and quantitative relationship between two
items or variables. This relationship can be exposed as

24
 1. Percentages
2. Fractions
3. Proportion of numbers

Ratio analysis is defined as the systematic use of the ratio to interpret the financial
statements. So that the strengths and weaknesses of a firm, as well as its historical
performance and current financial condition can be determined. Ratio reflects a
quantitative relationship helps to form a quantitative judgment.

5.6 STEPS IN RATIO ANALYSIS

 The first task of the financial analysis is to select the information relevant to the
decision under consideration from the statements and calculates appropriate ratios.

 To compare the calculated ratios with the ratios of the same firm relating to the past
or with the industry ratios. It facilitates in assessing success or failure of the firm.

 Third step is to interpretation, drawing of inferences and report writing conclusions

are drawn after comparison in the shape of report or recommended courses of
action.

5.7 BASIS OR STANDARDS OF COMPARISON

Ratios are relative figures reflecting the relation between variables. They enable analyst
to draw conclusions regarding financial operations. They use of ratios as a tool of
financial analysis involves the comparison with related facts. This is the basis of ratio
analysis. The basis of ratio analysis is of four types.

 Past ratios calculated from past financial statements of the firm.

 Competitor’s ratio, of the some most progressive and successful competitor firm at
the same point of time.

 Projected ratios, ratios of the future developed from the projected or pro forma
financial statements.

25
 5.8 NATURE OF RATIO ANALYSIS

The following are the four steps involved in the ratio analysis: -
1. Selection of relevant data from the financial statements depending upon the
objective of the analysis.

2. Calculation of appropriate ratios from the above data.

3. Comparison of the calculated ratios with the ratios of the same firm in the past, or
the ratios developed from projected financial statements or the ratios of some other
firms or the comparison with ratios of the industry to which the firm belongs.

5.9 COMMON SIZE STATEMENT: -

 The basic size articulations are known as segment rate proclamations or know
as part rate proclamations or vertical explanations. In this method, the
aggregate Resources or liabilities and the figure or net deals are taken
equivalent to one hundred and the rates at individual things are determined
lines.

5.10 COMPARATIVE STATEMENT ANALYSIS; -

 Examination at budget summaries for at least two years is another's methods

utilized in breaking down information similar fiscal summaries are
explanations at money related position at a business.

1. Entire data (rupee amount or money values)

2. Rise or decline in absolute data in terms at percentages.

3. Rise or decline in absolute values data in terms at money values.

26
 CHAPTER; - 6
LITREATURE REVIEW

27
 LITREATURE REVIEW

6.1 Kennedy and Muller (1999), has explained that “The analysis and interpretation of
financial statements are an attempt to determine the significance and meaning of
financial statements data so that the forecast may be made of the prospects for future
earnings, ability to pay interest and debt matureness (both current and long term) and
profitability and sound dividend policy.”

6.2 T.S.Reddy and Y. Hari Prasad Reddywithout subjecting these to data analysis,
many fallacious conclusions might be drawn concerning the financial condition of the
enterprise. Financial statement analysis is undertaken by creditors, investors and other
financial statement users in order to determine the credit worthiness and earning potential of
an entity.

6.3 According to Pandey, I.M. (2005 Financial management) profitability is the

ability of an entity to earn income. It can be assessed by computing various relevant
measures including the ratio of net sales to assets, the rate earned on total assets etc.

6.4 According to Meigns et al. (2001), Financial Statement simply means a declaration
of what is believed to be true and which, communicated in terms of monetary unit.
It describes certain attributes of a company that is considered to fairly represent its
financial activities.

6.5 Meigs and Meigs (2003) stated that the rate of return on investment (ROI) is a test
of management’s efficiency in using available resources. This review is organized
under the following sub-heads for ease of comprehension.

6.7 MY Khan & P K Jain (2011), have explained that the financial statements provide
summarized view of the financial position and operations of a firm.

6.8 Rachchh Minaxi (2012): "Execution he has pointed and guided that the fiscal
report examination incorporates breaking down the budget summaries to remove
information that can help basic leadership". Pg. no.3-88. This investigation depicts
the way toward assessing the connection between area parts of the budget reports
to get a comprehension of an element's position and execution.

6.9 Pratheepkanth (2011): "impact among capital structure and organization's

execution or position". Worldwide Journal of Financial Studies 6.1: 13. The
examination dependent on optional information was found from the budget report
printed by business. He utilized different factual instruments like proportion,
connection, relapse examination ANOVA. He decided his examination that the
business organizations for the most part rely upon the obligation capital. In this
way, they need to pay more intrigue costs.

28
7.10 Neumann and Roberts (2008): “financial occasions are indicated more esteem",
This investigation portrays money related measures are given additional incentive
over no budgetary measures and ROI is the single execution gauge to which
directors give more weightage.

7.11 Jonas Elmerraji (2003): “Inspect money related items quickly with proportions”.
This examination characterizes the different direct Speculators would prefer to
leave their choices to destiny than attempt to manage the terrorizing of monetary
proportions. Truly proportions aren't that scary, even on the off chance that you
don't have a degree in business or cash. Utilizing proportions to settle on educated
choices in regard to a speculation bodes well, when you realize how make use them.

7.12 Kakani et al. (2001): “determinants of firm execution”. Diaries of independent

company the executives, 45(1), 5-22. This studey analysed the determinants of firm
execution for 566Indian firms. They apparatus ROA, ROCE, income proportion,
Sales to resource, net 20 overall revenue, net revenue, return on Net worth and so
forth.,

7.13 Zopounidis (2000): “money related proportion investigations for assessing little
and medium size undertakings execution”.

7.14 Hitchings (1999): “ratio checked is a complex and valued tool”. journal of the
operative Research Society 1-17. In this study realized that ratio examination is a
complex and valued tool in credit assessment which is to estimate the capability of
a mortgagor to meet its debt obligations.

7.15 Bollen (1999): “Ratio Variables in info analysis”. This study describes the ratios as
indices of concepts; a problem can arise if it is retreated on other indices or variables
that hold a common component.

7.16 Kennedy and Muller (1998): "budget summaries are a push to oversee the
significance and importance of fiscal reports actualities.

7.17 Atkinson et al. (1997): "The Impact of Budgets". S. Imprint, Management

Accounting. This examination comprehends and survey the esteem got from
providers and workers, the esteem given by the partners and the proficiency of
procedures connected in the financial element and its vital properties. Along these
lines, we can say that executi

29
 CHAPTER; - 7
RESEARCH METHODOLOGY

30
 RESEARCH METHODOLOGY

7.1 STATEMENT OF THE PROBLEM

A proper financial analysis is incredibly important for any modern business. In today's
inflationary environment, it's even more critical than managing profits. It demands the
utmost attention and effort from financial managers. Financial analysis should be carefully
done because its various aspects require different approaches. It highlights the need for
skill, judgment, and awareness of economic trends. Due to the urgency and complexity,
financial analysis is fundamentally important.

In simpler terms, financial analysis is vital for businesses, especially in times of inflation.
It's not just about making profits but also about managing finances effectively. Financial
managers need to pay close attention, use their skills and judgment, and stay informed
about economic trends. This analysis is crucial due to the urgency and complexity of
financial matters.

7.2 NEED FOR THE STUDY

Financial statement analysis is like positive work for a company's money. It's about finding
patterns and connections between the items on financial reports. People inside and outside
the company, like inspectors, lenders, government officials, and auditors, use it to figure
out how well a company is doing in terms of making money, having enough cash, and
being financially stable.

To do this, they use common methods like pattern analysis, common size statements (which
make things easy to compare), and ratio analysis (using math to compare different
numbers). These methods help them see if the company is doing well compared to others
in the same business.

In simple terms, financial statement analysis helps everyone understand if a company is

making money, staying afloat, and managing its finances well. It's like solving a financial
puzzle to see how healthy the company is.

31
 7.3 OBJECTIVES OF THE STUDY

I. To analyse the earning capability or profitability of the company.

II. To analyses and compare the financial position of the company for every
two years.

III. To measure the short term as well as long term creditworthiness position
of the firm.

IV. To determine the liquidity position of the company based on the

turnover.

7.4 SCOPE OF STUDY; -

The goal is to make good use of investment for practical purposes. This research is
all about figuring out how well the company manages its finances and goals. We
want to find the best way to help the company make more profit.

This study helps the company manage both high-value and low-value items. It also
tells us how the company can work better and more efficiently in financial analysis.

In simple words, the research aims to help the company use its money wisely and
make better financial decisions. It looks at valuable and less valuable items and
gives tips on how to do financial analysis effectively.

7.5 RESEARCH METHODOLOGY

In the context of my SIP topic, "An Analytical Study of Financial Statements" for Talent
Serve India Pvt. Ltd., the methodology can be adapted as follows:

Methodology

32
The primary objective of this study is to evaluate and understand the financial performance
of Talent Serve India Pvt. Ltd. In this regard, research is conducted. Research in this
context is a structured effort aimed at investigating the financial aspects of the company to
identify areas for improvement and offer recommendations.

Research Design

Considering the specific goals of this study, an exploratory research design has been
chosen. Exploratory research is characterized by its focus on interpreting and analysing
existing data and information. It emphasizes the comprehensive examination and
interpretation of financial data that is readily available.

7.6 LIMITATIONS

I. Not a Substitute of Judgement; - An examination of fiscal report can't occur of

quality choice. It is just a way to achieve ends/results.

II. Based on Historical Data: - Just past data of bookkeeping data is combined into the
finance reports, which are dissected.

III. Problem in Comparability; -The measure of business concern is changing as per the
volume of exchanges. Hence, the figures of various budget reports lose the normal for
similarity.

IV. Reliability of Figures; - Some of the time, the segments of the fiscal summaries are
changed by window dressing. Provided that this is true, the examination of budget
summaries results in false or inane.

33
 CHAPTER; - 8
DATA ANALYSIS AND DISCUSSION

34
COMPARATIVE INCOME STATEMENT AS ON
31-3-2021 & 31-3-2022

35
TABLE STATING COMPARATIVE BALANCE SHEET AS ON 31-3-2021 & 31-3-
2022.

36
37
8.1 LIQUIDITY RATIO; -

8.1.2 TABLE STATING CURRENT RATIO; -

YEAR CURRENT ASSETS CURRENT LIABILITIES RATIO

2021 234.33 133.08 1.8

2022 201.47 199.7 1

8.1.3 GRAPH STATING CURRENT RATIO; -

CURRENT RATIO
250

200

150

100

50

0
2021 2022

CURRENT ASSETS CURRENT LIABILITIES RATIO

38
INTERPRETATION: -

The current ratio is a measure of a company's ability to cover its short-term liabilities with
its short-term assets. A ratio above 1 indicates that the company has more current assets
than current liabilities, which is generally considered healthy.
In 2021, the company had a relatively healthy current ratio of 1.8, suggesting a comfortable
position to cover its short-term obligations. In 2022, the current ratio dropped to 1.1. This
decrease could be a cause for concern, as it indicates a potential weakening of the
company's ability to meet its short-term obligations with its current assets. A ratio below 1
may imply that the company might struggle to cover its short-term liabilities.

39
8.1.4 TABLE STATING LIQUID RATIO; -

YEAR LIQUID ASSETS CURRENT LIABILITIES RATIO

2021 218.81 133.08 1.7

2022 180.78 199.7 1

8.1.5 GRAPH STATING LIQUIID RATIO; -

LIQUID ASSETS

RATIO

CURRENT LIABILITIES

LIQUID ASSETS

0 50 100 150 200 250

2022 2021

40
INTERPRETATION; -

The liquidity ratio is another measure of a company's ability to cover its short-term
liabilities with its most liquid assets. Like the current ratio, a ratio above 1 indicates a
potentially healthy liquidity position.

In 2021, the company had a liquidity ratio of 1.7, suggesting a comfortable position to
cover its short-term obligations with its liquid assets in 2022, the liquidity ratio decreased
to 1. This decrease could be a cause for concern, as it indicates a potential weakening of
the company's ability to meet its short-term obligations with its liquid assets. A liquidity
ratio below 1 may imply that the company might struggle to cover its short-term liabilities
using only its most liquid assets.

41
8.1.6 TABLE STATING CASH RATIO; -

YEAR CASH EQUIVALENTS CURRENT LIABILITIES RATIO

2021 98.4 133.08 0.74

2022 19.03 199.7 0.1

8.1.5 GRAPH STATING CASH RATIO; -

CASH RATIO

200

180

160

140

120

100

80

60

40

20

0
2021 2022

CASH EQUIVALENTS CURRENT LIABILITIES RATIO

42
INTERPRETATION; -

In 2021, the company had a liquidity ratio of 0.74, indicating that it had $0.74 in cash
equivalents for every dollar of current liabilities.

In 2022, the liquidity ratio decreased to 0.1, suggesting a substantial decline in the
company's ability to cover its short-term obligations with cash equivalents. This may raise
concerns about the company's liquidity position.

43
8.2 LEVERAGE RATIO; -

8.2.3 TABLE STATING DEBT EQUITY RATIO; -

YEAR LONG PERIOD DEBT SHAREHOLDERS FUNDS RATIO

2021 416.66 1918.28 0.22

2022 677.66 403.22 1.68

8.2.4 GRAPH STATING DEBT EQUITY RATIO; -

DEBT EQUITY RATIO

2500

2000

1500

1000

500

0
LONG PERIOD DEBT SHAREHOLDERS FUNDS RATIO

2021 2022

44
INTERPRETATION; -

The debt-to-equity ratio is a measure of a company's financial leverage, indicating the

proportion of debt used to finance its assets relative to shareholders' equity.

In 2021, the company had a relatively low debt-to-equity ratio of 0.22, suggesting that a
smaller proportion of its financing came from long-term debt compared to shareholders'
equity in 2022, the debt-to-equity ratio increased significantly to 1.68. This suggests a
substantial shift in the company's capital structure, with a higher reliance on long-term debt
compared to shareholders' equity. A higher debt-to-equity ratio can indicate higher
financial risk and may be a cause for concern, as it implies that the company has taken on
more debt relative to its equity.

45
8.2.5 TABLE STATING INTEREST COVERAGE RATIO; -

YEAR PBIT INTEREST EXPENSE RATIO

2021 -169.72 135.03 -1.26

2022 -312.48 228.33 -1.37

8.2.6 GRAPH STATING INTEREST COVERAGE RATIO; -

INTEREST COVERAGE RATIO

300

200

100

0
PBIT INTEREST EXPENSE RATIO
-100

-200

-300

-400

2021 2022

46
INTERPRETATION; -

The company incurred losses before interest and taxes (PBIT), and the interest expense
exceeded the operating profit. The negative ratios (-1.26 in 2021 and -1.37 in 2022) indicate
that the losses were more significant than the available operating profit to cover interest
expenses. This situation raises concerns about the company's ability to meet its interest
obligations from its operational earnings.

47
8.3 TURNOVER RATIO; -

8.3.3 TABLE STATING ASSET TURNOVERRATIO; -

YEAR NET SALES AVG TOTAL ASSETS RATIO

2021 184.35 3020.52 6.25

2022 371.33 3224.67 11.76

8.3.2 GRAPH STATING ASSET TURNOVER RATIO.

ASSET TURNOVER RATIO

3500

3000

2500

2000

1500

1000

500

2021
2022

NET SALES AVG TOTAL ASSETS RATIO

48
INTERPRETATION; -

The asset turnover ratio measures how efficiently a company utilizes its assets to generate
sales. A higher ratio generally indicates better asset utilization.

In 2021, the company had an asset turnover ratio of 6.25, suggesting that, on average, each
dollar of assets generated $6.25 in sales during the year.

In 2022, the asset turnover ratio increased significantly to 11.76. This indicates a substantial
improvement in the company's efficiency in generating sales from its assets. The higher
ratio suggests that the company has become more effective in using its assets to generate a
higher volume of sales.

49
8.3.3 TABLE STATING INVENTORY TURNOVERRATIO; -

YEAR COGS AVG INVENTORY RATIO

2021 184.35 15 12.18

2022 371.33 20 18

8.3.4 GRAPH STATING INVENTORY TURNOVER RATIO; -

INVENTORY TURNOVER RATIO

RATIO

AVG INVENTORY

COGS

0 50 100 150 200 250 300 350 400

2022 2021

50
INTERPRETATION; -

The inventory turnover ratio measures how many times a company's inventory is sold and
replaced over a specific period. A higher ratio generally indicates more efficient inventory
management.

In 2021, the company had an inventory turnover ratio of 12.18, suggesting that, on average,
the entire inventory was sold and replaced approximately 12.18 times during the year.

In 2022, the inventory turnover ratio increased to 18. This indicates a significant
improvement in inventory management efficiency. The higher ratio suggests that the
company is selling and replenishing its inventory at a faster rate compared to the previous
year.

51
8.3.5 TABLE STATING A/C RECEIVABLE RATIO; -

YEAR CREDIT SALES AVG A/C RECEIVABLES RATIO

2021 246.38 38.75 9.33

2022 401.82 38.75 16.654

8.3.6 GRAPH ACCOUNTS RECEIVABLES RATIO; -

ACCOUNTS RECEIVABLES RATIO

450

400

350

300

250

200

150

100

50

0
2021 2022

CREDIT SALES AVG A/C RECEIVABLES RATIO

52
INTERPRETATION; -

In 2021, the accounts receivable turnover ratio was 9.33, indicating that, on average, the
company collected its outstanding receivables approximately 9.33 times during the year.

In 2022, the accounts receivable turnover ratio increased to 16.654, suggesting a more
efficient collection of receivables. This higher ratio indicates that the company collected
its outstanding receivables nearly 16.654 times during the year.

53
8.3.7 TABLE STATING FIXED ASSET TURNOVER RATIO; -

YEAR NET SALES AVG ASSETS RATIO

2021 246.38 609.1 0.35

2022 410.16 800.2 6.25

8.3.8 GRAPH STATING FIXED ASSET TURNOVER RATIO-

FIXED ASSET TURNOVER

900

800

700

600

500

400

300

200

100

0
2021 2022

NET SALES AVG ASSETS RATIO

54
INTERPRETATION; -

In 2021, the company had an asset turnover ratio of 3, suggesting that, on average, each
dollar of assets generated 3 in sales during the year.

In 2022, the asset turnover ratio increased to 6.25, indicating a significant improvement in
the company's efficiency in generating sales from its assets. The higher ratio suggests that
the company is more effective in using its assets to generate a higher volume of sales
compared to the previous year.

8.4 PROFATIBILITY RATIOS; -

55
8.4.1 TABLE NET PROFIT RATIO; -

YEAR PAT NET SALES RATIO

2021 -169 184 -4.21

2022 46.71 371 1.16

8.4.1 GRAPH NET PROFIT RATIO; -

NET PROFIT RATIO

400

300

200

100

0
2021 2022

-100

-200

PAT NET SALES RATIO

56
INTERPRETATION; -

The profit margin ratio is a measure of a company's profitability, indicating the percentage
of profit generated from each dollar of sales. A positive ratio indicates a profit, while a
negative ratio indicates a loss.

In 2021, the company had a negative profit margin ratio of -4.21%. This suggests that, for
every dollar of sales, the company incurred a loss of approximately 4.21 cents. A negative
ratio implies that the company's expenses exceeded its revenue.

In 2022, the company improved its profitability, achieving a positive profit margin ratio of
1.16%. This indicates that, for every dollar of sales, the company earned a profit of
approximately 1.16 cents.

57
8.5 TABLE NET OPERATING RATIO; -

YEAR OPERATING EXP NET SALES RATIO

2021 64.6 184 4.69

2022 120.3 371 9.41

8.5.1 GRAPH NET OPERATING RATIO; -

NET OPERATING RATIO

400

350

300

250

200

150

100

50

0
2021 2022

OPERATING EXP NET SALES RATIO

58
INTERPRETATION; -

The operating expense ratio is a measure of the proportion of a company's net sales that is
used to cover operating expenses. It indicates the efficiency of a company in managing its
operating costs.
In 2021, the company had an operating expense ratio of 4.69%, indicating that
approximately 4.69 cents of every dollar in net sales were used to cover operating expenses.
In 2022, the operating expense ratio increased to 9.41%, suggesting that a higher proportion
(9.41 cents) of every dollar in net sales was allocated to operating expenses. The increase
in the operating expense ratio could be attributed to various factors, such as increased costs
in production, distribution, or administrative expenses.

59
8.6 TABLE GROSS PROFIT MARGIN RATIO; -

YEAR GROSS PROFIT TOTAL REVENUE RATIO

2021 52 310 16.7

2022 68.7 379.51 18.1

8.6.1 GRAPH GROSS PROFIT MARGIN RATIO; -

GROSS PROFIT MARGIN

400

350

300

250

200

150

100

50

0
GROSS PROFIT TOTAL REVENUE RATIO

2021 2022

60
INTERPRETATION; -

The ratio of gross profit to total revenue increased from 16.7% in 2021 to 18.1% in 2022.
This suggests that the company became more efficient in converting its revenue into gross
profit, reflecting improved cost management or pricing strategies.

61
8.7 TABLE RETURN ON ASSETS RATIO; -

YEAR NET PROFIT NET ASSETS RATIO

2021 -169.72 2887.42 5.73

2022 -312.748 3024.97 -9.94

8.7.1 GRAPH GROSS PROFIT MARGIN RATIO; -

RETURN ON ASSETS

RATIO

NET ASSETS

NET PROFIT

-500 0 500 1000 1500 2000 2500 3000 3500

2022 2021

62
INTERPRETATION; -

In 2021 and 2022, the company experienced a net loss. The net profit to net assets ratio was
5.73% in 2021, indicating that the net loss was relatively small compared to the size of the
company's net assets. However, in 2022, the ratio became negative (-9.94%), suggesting a
larger net loss relative to the net assets. This negative ratio may raise concerns as it indicates
that the company's net assets could not cover the extent of the losses incurred in 2022.
Investors and stakeholders may be concerned about the company's financial health and
sustainability given the negative profitability trend relative to its net assets.

63
CHAPTER; - 9
CONCLUSION

64
 CONCLUSIONS

9.1 In 2021, the company exhibited a healthy current ratio of 1.8, indicating a
comfortable position to cover short-term obligations with current assets. The
current ratio dropped to 1.1, raising concerns about the company's ability to meet
short-term liabilities with available current assets.

9.2 The company demonstrated a healthy liquidity ratio of 1.7, indicating a comfortable
position to cover short-term obligations with liquid assets. However, in 2022, the
liquidity ratio decreased to 1, signalling potential concerns about the company's
ability to meet short-term liabilities with liquid assets alone.

9.3 In 2021, the company had a liquidity ratio of 0.74, signifying it had $0.74 in cash
equivalents for every dollar of current liabilities. However, in 2022, the liquidity
ratio declined significantly to 0.1, indicating a substantial decrease in the company's
ability to cover short-term obligations with cash equivalents.

9.4 In 2021, the company had a low debt-to-equity ratio of 0.22, indicating a smaller
reliance on long-term debt compared to shareholders' equity. However, in 2022, the
ratio increased significantly to 1.68, signalling a notable shift towards a higher
reliance on long-term debt.

9.5 The company experienced losses before interest and taxes (PBIT) in both 2021 and
2022, with negative ratios (-1.26 and -1.37, respectively). These figures indicate
that the losses were more substantial than the available operating profit to cover
interest expenses.

9.6 In 2021, the company's asset turnover ratio was 3, meaning each dollar of assets
generated 3 dollars in sales. In 2022, the ratio increased to 6.25, signifying a
substantial improvement in efficiency.

9.7 In 2021, the company had a negative profit margin ratio of -4.21%, reflecting a loss
of about 4.21 cents for every dollar of sales, signalling expenses surpassing
revenue. However, in 2022, there was an improvement with a positive profit margin
ratio of 1.16%, indicating a profit of approximately 1.16 cents per dollar of sales.

9.8 In 2021, the company faced a net loss, but the net profit to net assets ratio of 5.73%
suggests that the loss was relatively small compared to the company's total net
assets. This implies a level of financial resilience and the ability to absorb l

65
 CHAPTER; - 10
RECOMMANDATIONS

66
 RECOMMANDATIONS

1. Address Liquidity Concerns:

The decline in the current ratio from 1.8 to 1.1 and the liquidity ratio from 1.7 to 1, along
with a substantial drop in the liquidity ratio to 0.1, indicate potential challenges in meeting
short-term obligations. The company should focus on improving its liquidity position,
perhaps by managing working capital more efficiently or exploring additional sources of
short-term financing.

2. Debt Management:

The significant increase in the debt-to-equity ratio from 0.22 to 1.68 suggests a notable
shift towards a higher reliance on long-term debt. The company should carefully manage
its debt levels and consider strategies to reduce debt or improve terms to mitigate potential
financial risks associated with increased leverage.

3. Operational Efficiency:

The positive trend in the asset turnover ratio (from 3 to 6.25) suggests improved efficiency
in generating sales from assets. Continue to focus on operational efficiency to maximize
returns on assets, which can contribute to overall financial health.

4. Profitability Improvement:

While there was an improvement in the profit margin ratio from -4.21% to 1.16%, the
company should continue efforts to enhance profitability. Identify cost-saving measures,
revenue growth opportunities, and operational improvements to sustain positive margins.

5. Loss Management and Interest Coverage:

The negative ratios for losses before interest and taxes (-1.26 and -1.37) raise concerns
about the company's ability to cover interest expenses. Implement strategies to manage
losses more effectively and ensure sufficient operating profit to cover interest obligations.
Transparency and Communication:

6. Risk Mitigation:

Implement risk mitigation measures to address the financial risks associated with the
observed trends. This may involve diversifying revenue streams, renegotiating debt terms,
or implementing cost controls.

67
 CHAPTER; - 11
Major Learnings and Contributions to the
host organisation

68
 Major Learnings and Contributions to the host
organisation

Based on the study's findings, we can draw the following important conclusions regarding
the company's financial situation that Increasing Cash Balances the Company’s cash and
bank balances have been consistently increasing. This aligns with the growing need for
working capital as a proportion of these cash and bank balances. Inadequate Liquidity the
Company’s liquidity position is not sufficient. It doesn't have enough readily available
cash. To address this, management needs to take action.

Expense Reduction Necessary the Company should focus on reducing its operating and
indirect expenses. These expenses are increasing operational and financial risks for the
company. Optimal Fund Utilization the Company should strive to make the best use of its
funds.

There has been an increase in reserves and surplus, which can serve as a buffer for future
uncertainties. Unsatisfactory Financial Position The overall financial position of the
company is unsatisfactory. It lacks funds for long-term assets and has invested excessively
in working capital assets.

There are also accumulated losses. Unsatisfactory Financial Performance the Company’s
financial performance is not up to the mark. Uncontrolled indirect and operating expenses
are reducing income percentages and leading to losses.

In summary, the company needs to improve its cash management, control expenses,
optimize fund utilization, and address its financial position and performance. These actions
are vital for a more stable financial outlook.

69
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70