User talk:Avinandan11

BALANCESHEET            Rs (in lakhs) Of BCCL PATICULARS		2006-07	 2007-08	2008-09	 2009-10	2010-11 SOURSES OF FUNDS: SHAREHOLDERS FUND: SHARE CAPITAL		211800	211800	211800	211800	211800.00 RESERVES AND SURPLUS SUB TOTAL		211800	211800	211800	211800	211800.00 LOAN FUNDS: SECURED 		30784.23	20843.16	11826.7	33946.16	3259.7 UNSECURED		157620.1	108330	108330	108329.98	108330 SUB TOTAL		188404.4	129173.1	120156.7	142276.14	111589.7 TOTAL		400204.4	340973.1	331956.7	354076.14	323389.56 APPLICATION OF FUNDS: FIXED ASSETS: GROSS BLOCK		372797.5	385584.4	391474.6	408879.58	436019.96 LESS: DEPRICIATION		260545.9	273094	278134	286242.37	300377.81 NET BLOCK		112251.6	112490.4	113340.6	122637.21	135642.15 CAPITAL WORK IN PROGRESS		8399.24	5407.66	9138.47	8304.24	8345.70 SUB TOTAL		120650.9	117898.1	122479	130941.45	143987.85 INVESTMENT		12470.4	11084.8	9699.2	8313.6	6928.00 INVENTORIES		52189.14	57352.91	70725.53	93890.02	111236.22 SUNDRY DEBTORS		8617.47	5144.03	18682.5	39380.24	61813.50 CASH AND BANK BALANCES 		96097.25	77289.22	91088.72	92302.76	130683.59 LOANS $ ADVANCES		16329.25	17978.53	22070.92	31950.62	29736.02 SUB TOTAL		173233.1	157764.7	202567.7	257523.64	333469.33 LESS: CURRENT LIABILITY&PR		585327.3	639235	834296.4	794790.34	803714.85 NET CURRENT ASSETS		-412094	-481470.3	-631729	-537266.7	-470245.52 MISC. EXPT PROFIT AND LOSS A/CS		679177.3	693460.5	831507.2	752087.79	642719.23 TOTAL		400204.4	340973.1	331956.7	354076.14	323389.56

Profit and Loss account          Rs (lakhs) Particulars	2006-07	2007-08	2008-09	2009-10	2010-11 INCOME: Sales of coal, coke, etc. 287919.8	295478	339913.2	461933.67	615711.23 Coal issued for other purposes per contra 67775.9	68588.2	75532.07	68355.31	93809.90 Other receipts 	40026.91	27937.6	69167.31	50536.63	30755.98 Accretion in stock	554.77	4962.42	11857.14	26809.03	17389.26 Total 	396277.4	396966	496469.72	607634.64	757666.37 EXPENDITURE: Decretion in stock	---	---	-	-	- Purchase/transfer of coal/coke etc.	---	---			- Internal consumption of coal per contra	65319.64	66071.3	73232.72	66193079	93317.74

Employees remuneration & benefits 	175151.5	188518	276118.98	264274.59	302312.58

Impact of arrear wages under NCWA VII	---	---	---		-- Impact of arrear adhoc/IR exe. & non-exe. 32346.1 Consumption of stores & spare parts 	32064.86	23346.1	83895.16	39124.98 43796.58

Power & fuel	23270.86	33015.8	37548.98	30600.21 21781.36

Differential tariff	---	23346.6	23414.38 Repairs (Purchased) 	4945.45	---	5623.64	7071.88	7926.54

Contractual expenditure	16845.28	4944.75	29475.38	37818.66	64335.17 Social overheads (Includes free issue of coal to employees)	24480.5	25688.7	30550.41	34071.91	34304.63 Interest 	7885.74	9347.2	7842.76	6659058	4201.68 Depreciation 	14267.22	17550	16005.93	17103.50	17245.59 Impairment of assets	2053.98	330.53	296.24	-3535.72	823.40 Provision	229.58	170.25	273.7	779.57	127.88 Other expenditure	27576.91	28747.1	43322.43	38679.74	54884.36 Total expenditure 	393892	453759	627600.71	538842.69	646832.11 Add/less: OBR adj:	1781.97	-3321.77	5214.94	-10963.49	2056.53 Net total expenditure 	395673.5	450437	632815.65	527879.20	648888.64

Profit/loss(-) for the year	603.89	-53470.7	-136345.93	79755.44	1087S77.73 Fringe benefit tax	-272.82	-1043.64	-347.83		26.30 Prior period adj.	4626.93	13885.6	-1352.95	-362.32	590.83 Waiver of apex interest 	---	49290.2	- Total profit	4958.4	8681.35	-138046.71 Balance loss(-) brought forward from last year’s accounts 	-684136	-679177	-693460.5	-831507.21 -752087.79 Transitional prov. As per rev. AS 15	---	-22944.6 Loss(-)carried forward to balance sheet	-679177	-693461	-831507.21	-752087.79	-642719.23

Line graph showing Profit and Loss of BCCL From 2006-2011

The Company has earned a profit of Rs.1087.78 crore in 2010-2011 against a profit of Rs.794.19 crore for the previous year.

CURRENT RATIO

It is also known as “working capital ratio” .It is a measures of short-term financial strength of the business and shows whether the business will be able to meet it’ s current liabilities as when they mature. Current Assets including assets which can be converted in to cash easily and itself like market securities debtors, inventory, prepaid expenses etc. Current Liabilities included creditors, bills payable, accrual expenses, short term bank loan, income tax liabilities and long term debt maturity  in current year. In short it can be said as all obligation within a year are included in current liabilities. Current ratio is a measure of the firm’s short term solvency. It indicate the availability of current assets in rupee of current liabilities. As a conventional rule, a current ratio should be or slightly more. It focuses the strong of weak position of the company.

Currentratio= Currentassests/Currentliabilities

For the year:

2010-2011        =    33346933000/80371485000  =     0.41

2009-2010        =    (257523,64,000)/(794790,34,000)  =     0.32

2008-2009        =    (202567,67,000)/(834296,43,000)  =     0.24

Year	Current Ratio 2010-2011	0.41 2009-2010	0.32 2008-2009	0.24

Interpretation:-It is generally believed that 2:1 ratio shows a comfortable working capital position. The ten don committee appointed by RBI had wide recommended a current ratio of 2:1.Company doesn’t maintain this ration but trying to increase it year by year. A current ratio is 0.41 in the 2010-2011. But in the previous year the ratio is nearer to 0.32:1 so we can say that the company doesn’t having comfortable working capital position previous year but the company is trying to increase its current ratio. ACID-TEST RETIO

The measure of absolute liquidity may be obtained only cash and bank balance as well as only ready marketable security with liquid liabilities. This is every existing standard of liquidity and it is satisfaction if the ratio is 1.50:1

Acid-TestRatio= (C.A-Inventory)/(C.L)

For the year 2010-2011        =  ( 33346933000 – 11123622000 )/80371485000   =     0.276

2009-2010        =  ( 257523,64,000 – 93890,02,000 )/(794790,34,000)   =     0.205

2008-2009       =  (202567,67,000 – 70725,53,000  )/(834296,43,000)     =     0.158

YEARS	ACID-TEST RATIO 2010-2011	0.276 2009-2010	0.205 2008-2009	0.158

Interpretation:-Acid-test ratio is near to one in current year that is 0.276 as compare to 0.205 in the previous year. Over all the acid-test ratio of last year & this year is not very satisfactory so we can conclude that the absolute liquidity of the Bharat Coking coal ltd. is in favor.

DEBTORS TURNOVER RATIO This ratio shows the proportion of sales to average receivables. It shows the efficiency of the collection policy of the firm. The higher the ratio, the less satisfactory position of the firm. Higher ratio indicates weak collection policy of the firm.

DebtorsTurnoverRatio = CreditSales/AccountReceivable

For the year 2010-2011              =      61571123000/(  5059687000) 		=   12.168 days

2009-2010              =      46193367000/(  2903137000) 		=   15.911 days

2009-2010              =      (36,46,72,78394)/(   5,13,47,00000)	 =   7.102 days

YEARS	DEBTORS TURNOVER RATIO 2010-2011	12.168 Days 2009-2010	15.911 Days 2008-2009	7.102 Days

Interpretation:-We know that the higher Debtor’s turnover ratio is not good for the firm. The lesser the period of the collection the better policy of collection of the company. In the year 2010-11 it is 12.168 days to collect the debts. So we can say that the collection policy of the company is excellent that they recover their debts near to half  of month. But we also consider that in previous year this is 15.911 days so we can say that the company have to maintain this ratio.

INVENTORY TURNOVER RATIO

This ratio is also known as” stock turnover ratio”. The number of times the average stock is turnover during the year is known as stock turnover. It is computed by deciding the sales by the inventory. The ratio is important in joining the ability of management which it can move the stock.

InvertoryTurnoverratio= Netsales/AverageInventory

For the year 2010-2011        =        61571123000/10256312000      =     6.00times

2009-2010        =        (461933.67)/(82307.775)           =     5.61 times

2008-2009        =        (37,13,28,70000)/(7,07,25,53000)      =      5.25  times YEARS	INVENTORY TURNOVER RATIO 2010-2011	6.00 times 2009-2010	4.80 times 2008-2009	5.25 times

Interpretation:- Higher the ratio more profitability the business would be. The ratio is joining the ability of management with which it can move the stock. Inventory turnover ratio is highest in the year 2010-11 is 6.00  as compare to current year it is 5.61 which is little bit lower than previous year but it is obvious that in heavy industries like Bharat Coking coal ltd. it is not a huge difference.

NET WORKING CAPITAL TURNOVER RATIO

Net working capital turnover ratio is obtained by net working capital joining to sales. The excess of current assets over current liabilities is called working capital. It is found for measuring firm liquidity. It also measures the firm potential reserve of funds.

NetWorkingCapitalTurnoverratio= Sales/NetWorkingCapital

For the year

2010-2011     =        61571123000/(-47024552000)		=     -1.30 times

2009-2010    =        46193367000/(-53,72,6670000)		=     -0.85 times

2008-2009     =         (37,13,28,70000)/(-63,17,28,76000)		=     -0.58 times

YEARS	NET WORKING CAPITALRATIO 2010-2011	-1.30 times 2009-2010	-0.85 times 2008-2009	-0.58 times

Interpretation:-As per the balance sheet data of the creditor, the working capital turnover ratio is different for the different years. The ratio is -1.30 in 2010-11 and -0.85 in 2009-10. So it means that higher the ratio better the working capital condition of the company. BCCL having a negative ratio in both year so it doesn’t shows the sound position of the company.

DEBT COLLECTION PERIOD

The Debt Collection shows the number of days taken to collect the debts of credit sales. It shows the efficiency and collection policy of the company. The ratio is computed by dividing the Debtor’s turnover ratio in to 365 days.

DebtCollectionPeriod= ( 365 days)/(Debtor^' sTurnoverRatio)

For the year 2010-2011= (365 days)/(12.168) =     29.99 days

2009-2010= (365 days)/(15.911) =     22.94 days

2008-2009= (365 days)/(7.10) =     51.40 days YEARS	DEBT COLLECTION PERIOD

2010-2011	29.99 days 2009-2010	22.94 days 2008-2009	51.40 days

Interpretation:-The collection period is highest in 2008-09 is 51.40 days as compare to low in the year 2010-11 is 29.99 days only. This shows the improvement in collection policy of the Bharat Coking Coal Limited. So it is very important for any company to collect the debs which this company do very well.

STATEMENT OF RATIO ANALYSIS

RATIOS	2008-2009	2009-2010	2010-2011 Current ratio	0.24	0.32	0.41 Acid-test ratio	0.158	0.205	0.276 Debtor’s turnover ratio	7.102Days	15.911Days	12.168 Days Inventory turnover ratio	5.25 Times	4.80 Times	6.00 Times Net-working capital turnover ratio	-0.58 Times	-0.85 Times	-1.30 Times Debt collection period	51.40 Days	 22.94 Days	29.99 Days

FINDINGSS

The study involves practical and conceptual over view of decisions concerning current assets like cash and bank balance, inventories ( like raw materials ,W-I-P, finished goods ), sundry debtors, loans and advances, other current assets and current liabilities like sundry creditors, securities and other deposits, other current liabilities and provisions of BCCL was with the objective of maximizing the overall net profit of the bank. And complete synchronization and coordination among the working capital components which shall contribute to optimum level of operations. Mismanagement of each or any of these components shall be detrimental to the objectives of efficient operation, profitability and maximization of overall value of the bank. The working capital limits would be considered only after the project nearing completion and after ensuring control over the inventory. The inventory is a great concern for BCCL and it need proper procurement and management. Eligible working capital limits would be assessed by cash Budget method And Projected production method depending the market condition, scale of operation, nature of activity/enterprise and duration/length of operating cycle etc.	Working capital of the company was negative and showing negative working capital per year. It shows good liquidity position. Company’s current assets were always more than requirement it affect on profitability of the company. Current assets components shows sundry debtors were the major part in current assets it shows that the inefficient receivables collection management. Inventory was supporting to sales, thus inventory turnover ratio was increasing, but company increased the raw material holding period. .	It was observed that most of the employee expressed their unhappiness salary. RECOMMENDATION & SUGGESTION

The recommendation & suggestion for effective management of working capital at BHARAT COKING COAL LTD. are given bellow:

For inventory, in order to improve the position, BCCL can reduce the level of stocks by resorting to phased production i.e. producing according to requirement and disposing off or recycling the unserviceable inventories. However, the low turnover of stock may also be due to problems with generation of sales Inventory management is a great concern for BCCL especially stores and spares. The purchase manager should take proper steps for procurement of inventories. The plant should maintain inventory at an optimum level rather than a very optimistic level. The procurement for materials requisition processing should be reduced so as to minimize the lead time. Company should raise funds through short term sources for short term requirement of funds, which comparatively economical as compare to long term  funds. Company should take control on debtor’s collection period which is major part of current assets. Company has to take control on cash balance because cash is non-earning assets and increasing cost of funds. Company should reduce the inventory holding period with use of zero inventory concepts.