A STUDY ON FINANCIAL STATEMENT ANALYSIS OF

TAMILNADU NEWSPRINT AND PAPER LIMITED (TNPL)

KARUR DISTRICT.
Dr.P.Ganapathi1, M.Kulandaivelu2, P.Keerthana3
1
Assistant Professor, Department of Management Studies, Muthayammal Engineering College
(Autonomous), Rasipuram, Namakkal.
2,3
Final Year MBA Student, Department of Management Studies, Muthayammal Engineering
College (Autonomous), Rasipuram, Namakkal.

ABSTRACT Keywords: Financial Statement Analysis,

A financial statement analysis that RatioAnalysis, Fundamental Analysis, etc..
distinguishes leverage that arises in financing
activities from leverage that arises in 1. INTRODUCTION:
operations. The analysis yields two The national project database features several
leveraging equations, one for borrowing to different kinds of project reports. For multi-year
finance operations and one for borrowing in grants, one or more annual reports are
the course of operations. These leveraging submitted, followed by a final report. One-year
equations describe how the two types of projects and farmer/rancher projects have only a
leverage affect book rates of return on equity. final report.
An empirical analysis shows that the financial Prior to 2001, annual and final reports were
statement analysis explains cross-sectional condensed by the regional communications
differences in current and future rates of specialist and added to the project database.
return as well as price-to-book ratios, which Beginning in 2001, the SARE program
are based on expected rates of return on implemented an online reporting system. Now
equity. The paper therefore concludes that grant recipients enter their full project reports
balance sheet line items for operating directly into the web database
liabilities are priced differently than those
dealing with financing liabilities. 2. STATEMENT OF THE PROBLEM:
Accordingly, financial statement analysis that A problem statement is a concise
distinguishes the two types of liabilities description of an issue to be addressed or a
informs on future profitability and aids in the condition to be improved upon. It identifies the
evaluation of appropriate price-to-book ratios. gap between the current (problem) state and
desired (goal) state of a process or product.
Ratio analysis is a commonly used analytical Focusing on the facts, the problem statement
tool for verifying the performance of a firm. should be designed to address the 5 W’s – who,
While ratios are easy to compute, which in what, where, when, and why. The first
part explains their wide appeal, their condition of solving a problem is understanding
interpretation is problematic when two or the problem, which can be done by way of a
more ratios provide conflicting signals. problem statement.
Indeed, ratio analysis is often criticized on the Problem statements are widely used by
grounds of subjectivity that is the analysts businesses and organizations to execute process
must pick and choose ratios in order to assess improvement projects. A simple and well-
the overall performance of a firm. defined problem statement will be used by the
project team to understand the problem and
work toward developing a solution. It will also
 
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provide management with specific insights into  NATURE OF DATA:
the problem so that they can make appropriate The number of data used for the
project-approving decisions. As such, it is study in secondary data is
crucial for the problem statement to be clear and collected from the five years
unambiguous. balance sheet for their analysis
3. OBJECTIVES OF THE STUDY: part.
 To analyze the finance performance of  DATA COLLECTION:
the TNPL company. The data necked for the study in
 To indentify the profitability of the being collected from the annual of
business. report of the company and which
 To study on the short term and long term is secondary data.
financial position of the firm.  AREA OF STUDY: The study from
 To make recommendation based on the TNPL.
analysis of financial statement.  DATA USED:
The research relied entirely on
4. SCOPE OF THE STUDY: secondary data for analysis was
collected directly from TNPL.
 Financial statement analysis (or financia
l analysis) is the process of reviewing 6. STATISTICAL TOOLS:
and analyzing a
company's financial statements to make  RATIO ANALYSIS:
better economic decisions.  Profitability ratio.
 These statements include the  Turnover ratio.
income statement, balance  Solvency ratio.
sheet, statement of cash flows, and  Current ratio.
a statement of retained earnings.
7. GROSS PROFIT RATIO
5. METHODOLOGY OF THE STUDY: Gross profit ratio is the ratio of gross profit to
 RESEARCH DESIGN: net sales i.e. sales less sales returns. The ratio
The research design use in the thus reflects the margin of profit that a concern
study is analytical research has to is able to earn on its trading and manufacturing
analysis the balance sheet which activity. It is the most commonly calculated
is historical data derive ratio. It is employed for inter-firm and inter-
conclusion form it. firm comparison of trading results.
Gross profit ratio= gross profit X 100

Net sales

TABLE NO: 1
GROSS PROFIT NET SALES RATIO
YEAR
(RS IN CR) (RS IN CR) (%)
2012 125.11 1522.92 8.22
2013 126.11 1861.26 6.78
2014 202.68 2285.22 8.87
2015 230.13 2135.73 10.78
2016 317.23 2417.54 13.12
2017 513.89 3801.36 13.52

 
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8. NET PROFIT RATIO:

Net profit ratio = Net profit after tax X 100

Net sales

TABLE NO: 2
YEAR NET PROFIT AFTER TAX NET SALES RATIO
2012 109 1522.92 (%)7.16
2013 91 1861.26 4.89
2014 161 2285.22 7.05
2015 167 2135.73 7.82
2016 260 2417.54 10.75
2017 265 3801.36 15.02

9. OPERATING PROFIT RATIO:

Operating profit ratio = Operating Profit X 100
Net sales
TABLE NO: 3
OPERATING RATIO
YEAR NET SALES
PROFIT (%)
2012 335.55 1522.92 22.033
2013 422.06 1861.26 22.68
2014 523.2 2285.22 22.89
2015 522.36 2135.73 24.46
2016 596.07 2417.54 24.65
2017 1017.93 3801.36 26.78
10. EXPENCES RATIO:
Expenses ratio= Specific expenses X100
Net sales
Specific expenses:
Administrative expenses ratio= administrative expenses X 100
Net sales

TABLE NO: 4
ADMINISTRATIVE RATIO
YEAR NT SALES
EXPENSES (%)
2012 58.41 1522.92 3.83
2013 56.32 1861.26 3.03
2014 56.2 2285.22 2.46
2015 79.78 2135.73 3.74
2016 78.71 2417.54 3.26
2017 78.80 3801.36 2.06

TURN OVER RATIO:

11. STOCK TURN OVER RATIO:

Stock turnover ratio= Cost of Goods Sold

Average Stock

Average stock= Opening stock + Closing stock

2
 
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TABLE NO: 5
YEAR COST OF GOODS AVERAGKE RATIO TIMES
SOLFD STOCK
(RS IN CR) (RS IN CR)
2012 1543.21 327.67 4.70
2013 198.82 264.42 7.5
2014 2343.59 285.36 8.21
2015 2188.31 433.37 5.04
2016 2501.54 387.43 6.45
2017 2557.11 485.15 5.3
12. WORKING CAPITAL TURN OVER RATIO:

Working capital turnover ratio = cost of sale X 100

Net working capital

TABLE NO: 6
NET WORKING
COST S SALES
YEAR CAPITRAL) RATIO
(RS IN CR)
(R IN CR)
2012 1543.21 -491.57 --3.14
2013 1984.82 --431.43 --4.6
2014 2343.59 --607.51 --3.86
2015 2188.31 --586.42 --3.73
2016 2501.54 --459.55 --0.55
2017 2943.15 -519.69 --5.7

SOLVENCY RATIO:
13. CURRENT RATIO:
The current ratio is a liquidity ratio that measures whether or not a firm has enough resources to
meet its short-term obligations. It compares a firm's current assets to its current liabilities, and is
expressed as follows
Current ratio= Current Assets
X 100
Current liabilities
TABLE NO: 7
CURRENT CURRENT
YEAR ASSEST (RS IN LIABILITES (RS RATIO
CR) IN CR)
2012 929.73 1889.28 0.67
2013 827.41 1413.83 0.59
2014 914 1521.51 0.6
2015 123.33 1665.76 0.74
2016 1136.98 1628.38 0.7
2017 1239.3 1653.13 0.75

14. LIQUID RATIO:

Liquid ratio= Liquid assets X 100

Current liabilities

 
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TABLE NO: 8
CURRENT
YEAR LIQUID ASSEST RATIO
LIAIBILITES
2012 542.8 1389.28 0.4
2013 394.04 1413.82 0.3
2014 628.64 1521.51 0.4
2015 969.91 1665.76 0.6
2016 809.31 168.26 0.5
2017 957.57 1653.13 0.57

15. FIXED ASEST RATIO:

The fixed asset turnover ratio is an efficiency ratio that measures a companies return on their
investment in property, plant, and equipment by comparing net sales with fixed assets. In other
words, it calculates how efficiently a company is a producing sales with its machines and
equipment.
Fixed assets ratio= Fixed Asset X 100
Long term fund
TABLE NO: 9
LONG TURN
YEAR FIXED ASSEST FUNDS (RS IN RATIO
CR)
2912 4222.1 2409.0R 1.75
2013 3040.83 2188.94 1.39
2014 2528.19 2233.5 1.13
205 2541.01 3046.09 0.83
2016 2495.93 3904.67 0.64
2017 2508.73 4120.99 0.60
16. DEBT EQUITY RATIO:
Debt equity ratio= long term dept X 100
Share holders fund
TABLE NO: 10

EXTERNAL EQUITY INTEREQUITY

YEAR RATIO
(RS IN CR) (RS IN CR)
2012 11434.25 970.69 1.48
2013 1153.14 1035.48 1.11
2014 10087.39 1145.98 0.95
2015 1844.45 1201.64 1.53
2016 2459.12 1445.34 1.7
2017 3073.85 1689.46 1.8
17. PROPRIETARY RATIO:
Proprietary ratio = share holders funds X 100
Total tangible assets

 
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TABLE NO: 11
TOTAL
SHAREHOLDERS
YEAR TANGIBLE RATIO
FUNDS (RS IN CR)
ASSES(RS IN CR)
2012 970.69 3554.9 0.27
2013 1035.48 3481.02 0.29
2014 1145.95 3712.65 0.31
2015 1201.64 4697.5 0.26
2016 1445.55 5488.18 0.26
2017 1510.34 5562.06 0.27

FINDINGS:  The fixed assets turnover ratio of the

Gross profit and net profits are decreased during firm has in 2014-15 the ratio is 0.85 and
the period of study, which indicates that firms it increase in the next 3years
in efficient management in manufacturing and continuously and it again decrease in
trading operations. 2016-17.
 The study of comparative,  The current assets turnover ratio is
trend and common-size increasing during the period of 2014-16
analysis is also very good and again it decrease in the period of
a n d profitability position in the paper 2016-17. And again increase in next two
mill. At during the year of 2012 to 2017. year slithightlliy.
 The value of current ratio of paper  Direct Material cost ratio of the firm is
mill is irregular Year after year and the r has less material cost during the period
atio is more than the ideal value for the of 2014-15 &2017-18 and it raised in
five years i.e., the value greater than 2. the year of 2015-16 and 2016-17.
 The liquidity position of paper mill  The cost of direct labour of the firm in
is satisfactory. the year of 2014-15 is 4.94%and it
 The net profit ratio shows that paper increasing slithightlliy up to 2016-17
mill is in a favorable position. and it decrease in the next year.
 The fixed asset to net worth ratio shows  The cost of manufacturing overhead of
that the owner’s funds are more than the the firm in the year of 2014-15 is 5.22%
total fixed assets. where it compare to the next 3year it
increase rapidly.
 Gross profit and net profits are
decreased during the period of study, SUGGESTIONS:
which indicates that firm’s inefficient The profit Of the Company Is not in a good
management in manufacturing and Position For That company has to Take
trading operations. Alternative Actions such As
 Gross profit and net profits are increased Increasing in Procurement in paper wood.
during the period of 2014-15 which Production, and Control in Expenses Like,
indicates that firm’s efficient Administrative, selling Etc.
management in manufacturing and The firms have low current ratio so it should
trading operations. increase its current ratio where it can meet its
 Liquidity ratio of the firm is not better short term obligation smoothly.
liquidity position in over the five Liquidity ratio of the firm is not better
years. It shows that the firm had not liquidity position in over the five years. So I
sufficient liquid assets. suggested that the firm maintain proper liquid
 The inventory of the firm in the first funds like cash and bank balance.
year has been sold very slow. And there
is an increase in the movement of the CONCLUSION:
inventories but it slightly decreased in  This Project has been very useful to me
the last year. This may be a sign not because I learned how to prepare cash
good to the firm.
 
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INTERNATIONAL JOURNAL OF CURRENT ENGINEERING AND SCIENTIFIC RESEARCH (IJCESR)
flow statements and ratio analysis. This  Chapter in Edited Book, Several
has improved my knowledge Volumes.
on financial statements which is very Adams, J.S. (1965). Inequity in social
useful in business and commerce ever exchange. In L. Berkowitz (Ed.),
day. The work I did in this project has Advances in experimental social
helped me to understand the techniques, psychology (Vol. 2, 267-299). New
applications and usefulness York: Academic Press.
of financial statements to understand the
performance of a particular company or
enterprise without much difficulty and
also understand how to prepare them in
future.
 This project of Ratio analysis in the
production concern is not merely a work
of the project. But a brief knowledge
and experience of that how to analyze
the financial performance of the firm.
The study undertaken has brought in to
the light of the following conclusions.
According to this project I came to
know that from the analysis of financial
statements it is clear that TNPL
Ltd. Have been incurring loss during
the period of study. So the firm should
focus on getting of profits in the coming
years by taking care internal as well as
external factors. And with regard to
resources, the firm is take utilization of
the assets properly. And also the firm
has a maintained low inventory.

REFERENCES:
 Human resource and financial practice
in http://www.tnpl.com
 Human resource and marketing practice
in http:// www. Dhanalxshmi
papermill.com
 Book - Single Author. Adler, N.J.
(1991). International dimensions of
organizational behavior. Boston: PWS-
Kent Publishing Company.
 Book - Multiple Authors, Second or
Subsequent Editions.
Aron, A., & Aron, E.N. (1999).
Statistics for psychology. (2nd ed.). New
Jersey: Prentice-Hall International, Inc.
 Chapter in Edited Book.
Hartmann, L.C. (1998). The impact of
trends in labour-force participation in
Australia. In M. Patrickson& L.
Hartmann (Eds.), Managing an ageing
workforce (3-25). Warriewood,
Australia: Woodslane Pty Limited.

 
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