TRAINING PROJECT REPORT

On

(A Study on financial Performance Analysis of

Towards partial fulfilment of

Submitted To:
(Dr. Shweta Srivastava)

Submitted by
(Amulya Yadav)
Roll No- 1150675007
9th Sem

Session 2019-2020
School of Management

Babu Banarasi Das University

ii
 DECLARATION
I, Amulya Yadav (Roll No. 1150675007) hereby declare that this project

titled “A Study on financial Performance Analysis of Accor Group” is an original

work carried out by me, under the guidance of Mrs. Shweta Srivastava. The report

by me is a bonafide work carried by me of my own efforts and it has not been

submitted to any other university or published any time before.

Date:
Place:
Amulya Yadav

iii
 ACKNOWLEDGEMENT
Before I get into the thick of the things I would like to add a few heartfelt words for

the people who were part of this research report in numerous ways and people who

gave unending support right from the stage the project was started, appreciated and

encouraged when being depressed.

In this context I would like to express my gratitude towards my parents and family

members who have constantly supported and played a pivotal role in shaping my

career.

I owe my sincere gratitude towards faculty guide Dr. Shweta Srivastava of BBDU,

LUCKNOW for extending the support towards the completion of the Report.

And finally I would like to thank my friends for their unending support.

Amulya Yadav

iv
 PREFACE
Summer Training is an important part of the Management studies. It bears immense

important in the field of Business Management. It offers the student to explore the

valuable treasure of experience and an exposure to real work culture followed by the

industries and thereby helping the students to bridge gap between the theories

explained in the book and their practical implementations.

Summer Training plays an important role in future building of an individual so that

we can understand the real world in which he has to work in future. The theories

greatly enhance our knowledge and provide opportunities to blend theoretical with the

practical knowledge where researcher gets familiar with certain aspect of research. I

feel proud to get myself to do research at topic “A Study on financial Performance

Analysis of Accor Group”.

v
 TABLE OF CONTENT

Certificate

Declaration

Acknowledgement

Preface

1. Introduction

2. Company Profile

3. Objectives of the study

4. Research Methodology

5. Limitations of the study

6. Data Analysis & Interpretation

7. Findings

8. Recommendations

9. Conclusion

10. Bibliography

vi
INTRODUCTION

1
 INTRODUCTION TO THE TOPIC

Finance:-

Financial management is that managerial activity which is concerned with the

planning and control of firm’s financial resources. As a separate activity or discipline

it is of recent origin. It was a branch of economics till 1890 still today it has no

unique body of knowledge of its own and draws heavily on economics for its

theoretical concepts. The subject of financial management is of immense interest to

both academicians and practicing managers. It is of great interest to academicians,

because the subject is still developing and are still certain areas where controversies

exist for which no enormous solution have been reached as yet. The most crucial

decision of the firm are those which relate to finance and an understanding of the

theory of financial management provides than with conceptual and analytical insights

to make those decisions skilfully.

Meaning of Finance:-

Finance is rightly been termed as ‘master key’ providing accretes to are sources

required for running business activities. Finance is the management of monetary

affairs of a company.

Definition of Finance:-

Ray G Jones and Dean Dudely observe that the word finance come indirectly from

Latin word “Finis”.

2
In simple words “Finance is economics and Accounting”. Economics is proper

utilization of scare resources and accounting Economics is proper utilization of scarce

resources and Accounting is keeping a record or tract of things.

Kenneth Ridgeley and Ronald Bums Accent, “Financing is the process of organizing

the flow of funds so that a business can carry out its objectives in the most efficient

manner of meeting its obligation as they are due”

Scope Of Finance:-

What is finance? What are firm’s financial activities? How are they related to firm’s

other activities?

There exists an inseparable relation between finance on one hand and on the other.

Almost all kinds of business activities directly or indirectly involved the acquisition

and use of funds. E.g.: recruitment and promotion of employees, buying of machines,

advertising, sales promotion activities requires outlay of cash and therefore affect

financial resources. Finance functions or decision includes investment decision,

finance decision, dividend decision, and liquidity decision.

A firm performs functions simultaneously and continuously in the normal course of

business. They do not necessarily occur in a sequence. Finance functions call for

skillful planning control and execution of firm’s attitudes.

Functions Of Finance:-

There are three major functions of finance:

a) Investment decision

b) Financing decision

c) Dividend decision.

3
 a) Investment decision:

Investment decision relates to selection of asset in which funds will be inverted by a

firm. The assets that can be acquired by a firm may be long term asset and short term

assets.

b) Financing decision:

Financing decision is concerned with financing mix or capital structure the mix of

department and equity is known as capital structure. Determination of the proportion

of equity and debt is the main issue in financing to share holders and also financial

risk.

c) Dividend decision:

A firm may distribute its profits or retain the balance with it the decision depends

upon the preference of the shareholders and investment opportunities available to the

firm. Dividend decision has a strong influence on the market price of share.

Therefore, the dividend policy is too determined in terms of its impact on

shareholders’ value. The optimum dividend policy is one. Which maximize the value

of shares and wealth of shareholders the financial manager should determine the

optimum payout ratio that is the proportion of net profit to be paid out to

shareholders? The financial manager should also consider those factors. This

determines the dividend policy in practice.

Financial Management:-

Financial management is a part of managerial activity, which is mainly concerned

with the planning, and controlling of financial resources of a firm. Prof Solomon

defines “Financial management is concerned with efficient use of an important

economic resource is capital funds.

4
Importance of Financial Management:-

Financial management is that managerial activity which is concerned with the

planning and control of firm’s financial resources. As a separate activity or discipline

it is of recent origin. It was a branch of economics till 1890 still today it has no

unique body of knowledge of its own and draws heavily on economics for its

theoretical concepts. The subject of financial management is of immense interest to

both academicians and practicing managers. It is of great interest to academicians,

because the subject is still developing and are still certain areas where controversies

exist for which no enormous solution have been reached as yet. The most crucial

decision of the firm are those which relate to finance and an understanding of the

theory of financial management provides than with conceptual and analytical insights

to make those decisions skilfully.

Objectives of Financial Management:-

The term objective reforms to a goal or decision criterion for taking financial

decisions. There are two objectives:

a) Profit maximization

b) Wealth maximization

a) PROFIT MAXIMIZATION:

The term profit maximization is deep rooted in the economic theory. It is needed that

when pursue the policy of maximizing profits society’s resources are efficiently

utilized. The firms should undertake those actions that would pursue profits and drop

those actions that would decrease profits. The financial decisions should be oriented

to the maximization of profits.

5
Profits provides yardstick for measuring the economic performance of firms. It

makes allocation of resources to profitable and desirable areas. It also ensures

maximum social welfare. On these grounds profit maximization serves as criteria for

financial decision.

b) WEALTH MAXIMISATION:

Wealth maximization or value maximization or net present Value maximization

provides an appropriate and operationally feasible decision criterion for financial

management decisions. It provides an unambiguous measure of what financial

management should seek to maximize in making investment and financing decisions.

It satisfies the three requirements of a suitable criterion namely precise, time value of

money and quality of benefits.

In wealth maximization criterion the benefits associated with assets are measured in

terms of cash flows rather than accounting profits. The cash flows are a precise

concept with definite meaning. It overcomes the deficiencies associated with

accounting profits.

6
Financial Analysis:

Financial analysis is the analysis of financial statement of a Company to assess its

financial health and soundness of its management. ‘Financial Statement Analysis’

involves a study of the financial statements of a company to ascertain its prevailing

state of affairs and the reasons thereof. Such a study would enable the public and the

investors to ascertain whether one company is more profitable than the other and also

to state the causes and factors that are probably responsible.

Ratio Analysis:-

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as “the

indicated quotient of two mathematical expressions as relationship between two or

more things”. In financial analysis, a ratio is used as a bench mark for evaluating the

financial position and performance of a firm. The absolute accounting figures

reported in the financial statement do not provide a meaningful understanding of the

performance and financial position of a firm. An accounting figure conveys

meaningful message when it is related to some other relevant information. For

example Rs 5 corer net profit may look impressive but the firm’s performance can be

said to be good or bad only when the net profit figure is related to firm’s investments.

The relationship between two accounting figures expressed mathematically is known

as financial ratio. A ratio quantitative relationship, which can be in turn used to make

a qualitative judgment.

7
Classification of Ratios:-

Ratios may be classified in a number of ways keeping in view the particular

purpose. Ratios indicating profitability are calculated on the basis of the profit and

loss account; those indicating financial position are computed on the basis of balance

sheet. This classification is rather crude and unsuitable to determine the profitability

and financial position of business. To achieve these purpose ratios may be classified

as

1. Liquidity Ratios

2. Return On Investments Ratios

3. Solvency Ratios

4. Efficiency or Turnover Ratios

5. Profitability Ratios

6. Capital Market Ratios

Liquidity Ratios:-

i. Current Ratio

ii. Quick or Acid Test Ratio

iii. Debtors Ratio

iv. Debtors Turnover Ratio

v. Creditors Ratio

vi. Creditors Turnover Ratio

vii. Inventory Holding Period

viii. Inventory Turnover Ratio

8
LITERATURE
REVIEW

9
 LITERATURE REVIEW

Kaura, M. N and Bala Subramanian (2014) analyzed ten cement units during the

period of study 2007 to 2012 shows that the financial performance of the selected

cement companies evidenced by Profitability, Liquidity and capital structure ratios

has declined. The non availability of funds has affected the modernization of plants

and periodic rehabilitation of the kilns. Besides, the bottlenecks in supply of raw

materials and power and non remunerative prices have reduced the capacity

utilization, profits and cash flows. The profitability and liquidity position in many

cement companies have been affected adversely because of the problems in supply of

raw materials , transport and power.

Nagarajrao B.S and Chandar K (2012) analyzed the financial efficiency of cement

companies for the selected period of the study 2010 -11 to 2012-13. It can be analyzed

profitability of selected cement companies has been found downward trend from

1970-71 to 1974-75 because the reason of inflation, rising of manufacturing cost,

continuous fall in capacity utilization due to many reasons.

Kumar B. Das (2013) has made an analysis of the financial performance of the

cement industry. it can be analyzed that the net fixed assets as a percentage of total

assets decreased for the period 2009-10 to 2012-13 that was 553.5% to 44.04 %

respectively. Current liabilities have increased than the current assets. Liquidity

performance of the cement industry is not healthy during period of the study. The

Debt Asset ratio has downward During the period of the study and Debt Equity ratio

has slightly increased while net worth ratio has decreased over the years.

10
Nair N.K. (1991) has focused the productivity aspect of Indian Cement Industry. This

study emphasised that cement, being a construction material, occupied a strategic

place in the Indian economy. This study has revealed that, in 1990-91, the industry

had an installed capacity of 60 million tonnes with a production of 48 million tonnes.

In this study, the cement industry was forecasted to have a capacity growth of about

100 million tonnes by the year 2000. This study has also analyzed the productivity

and financial performance ratios of the cement industry with a view to identifying the

major problem areas and the prospects for solving them.

Dr. Dinesh A. Patel (1992) have analyzed Financial Analysis - A Study of Cement

Industry of India for the period of 2014-80 to 1988-89. He can analyzed the

profitability of the cement industry, to examine the short term financial strength of the

cement industry through the analysis of working capital management and to analyzed

the long term financial strength through the analysis of capital structure.

Subir Cokavn and Rejendra Vaidha (1993) have analyzed to evaluate the

performance of cement industry after decontrol. They found that the performance of

the cement industry after decontrol was characterized by outcomes that were

generally competitive and welfare enhancing. This study has revealed that the

structure of the industry changed significantly with large magnitude of relative

technologically and superior capacity being created by many new entrants into the

industry. It was also noticed in this study that there were significant real price increase

and an associated increase in profitability. The performance of firms across the

strategic group was different with firms operating relatively new and large plants

11
appeared to have an advantage. Further, the study has dealt with the nature and effect

of inter-firm heterogeneities in the cement industry.

Chandrasekaran N (1993) has made an attempt to examine determinants of

profitability in cement industry. He identified that profitability was determined by

structural, as well as, behavioural variables. He also identified that the other variables

17 which influenced profitability were growth of the firm, capital turnover ratio,

management of working capital, inventory turnover ratio etc. Some of the main

changes in the cement industry environment during 1980's identified in this study

were: from complete control to decontrol, number of new entrants and substantial

additions of capacity, changing technology from inefficient wet process to efficient

dry process and from conditions of scarcity of cement to near gloat in the market.

Chandrasckaran N (1994) has studied about the market structure of the Indian

Cement industry like demand and supply. It was analyzed in that study that the

demand and supply gap has been considerably reduced and supply of cement during

the period of study has increased due to creation of additional capacity and capacity

utilization.

Srinivasa Rao.G and Indrasena Reddy.P (1995), in their study, analyzed the

financial strength of paper industry had been improving from year to year. The

company's performance in relation to generating internal funds in the form of reserves

and surplus was excellent and also the company was doing well in mobilizing

outsiders' funds. The liquidity position of the company was sound as revealed by

current ratio and quick ratio which were above the standard. The solvency ratio

12
showed that the company had been following the policy of low capital gearing from

the 1990-91 as these ratios had been decreasing from this year. The performance of

the company in relation to its profitability was not up to the expected level. The

company's ability to utilize assets for generation of sales had not been improved much

during the period of study period as revealed by its turnover ratios.

13
COMPANY
PROFILE

14
 COMPANY PROFILE

Accor S.A.

Type Société Anonyme

Traded as Euronext: AC, LSE: 0H59

Industry Hospitality

Founded August 1967; 51 years ago

Headquarters Paris, France

Number of locations 4,300 (2017)

Area served Worldwide

Key people Sébastien Bazin (Chairman and CEO)

Products Hotels and resorts

Revenue €1.93 billion (2017)

Operating income €413 million (2017)

Net income €481 million (2017)

Number of employees 250,000 (2017)

Website www.accorhotels.group

15
Accor Hotel Group : at a glance

Accor hotel group has a portfolio of strong brands name in the industry of travel,

tourism and hospitality sector. For more than forty years, Accor has constantly

reinvented its business to keep pace with the world around it, with the goal of

providing innovative, high quality products to hotel customers and partners. Accor

main aims to target the every segmentation of market from the luxury to economics

class on all over the five continents in the world. Accor hotel group or brands

promises to meet the needs of business and leisure travellers looking for comforts,

accommodation, attentive staff and a full range of quality services. Accor is the

world’s leading hotel operator and market leader over the Europe, is serve in 92

countries with more than 4,400 hotels and 530,000 rooms. Also with more than

180,000 employees working Accor brand hotels world widely. By considering to the

need of travel customer Accor has got different categories or with several brand name

which provides the differentiate quality of service according to their brands name. To

make an affordable and convenient to the each customer throughout the world, Accor

brand hotel splits its brand according to the International brands and regional brands.

Accor brands includes Sofitel Luxury Hotel, Sofetel Legend, So Sfitel, Pullman Hotel

and Resorts, MGallery, Novotel Hotel, Suite Novotel, Mercure, Adagio aparthotel,

Ibis Hotel, Ibis Styles Hotel, Ibis Budget Hotel, Adagio access aparthotel, Grand

Mercure ASIA, The Sebel ASIA-PACIFIC and Hotel F1 France. To make it more

specific the following diagrams illustrate the Accor Brands in more details, which is

as follows:

16
 1. Ethics Perspective ACCOR Hotel Group

2.1 Key ethical consideration of ACCOR as management Perspective:

Basically Ethic is regarding the values what a particular company hold in business

aspects. Ethic and code of conduct has to be maintained well in company. In the

recent year competition level is very high in market place. To be a well establish

company in business, company need to take ethical practice as a major task.

Although it may argued that these instruments have not been established from a

theoretical foundation, they have provided a significant degree of industry guidance.

“Codes of ethics are said to be different from codes of conduct and codes of practices,

17
based on the belief that the former are more philosophical and value-based, while the

latter are more applicable and specific to actual practice in the local situation.” (Scace

et al., 1992). By allowing business ethics and code of conduct of it makes a

relationship between employers and employees very communicative and effective. It

gives a boundary to compile the rules and regulation of company according the

national laws.

So in this work The ACCOR brand hotel represents the ethical practice in hospitality

industry in proper framework. In general ACCOR family believe that corporate

compliance with and respect for the laws of the jurisdictions in which they conduct

operations are an enabler of business development and sustainable growth. These laws

within business ethics promote the fair, stimulating, transparent approach to

management and a constant focus on the safety and integrity of the personnel.

As the main ethical slogan presents by ACCOR is a “that ACCOR operations in all

host countries must be guided by that which is in the best interest of people who have

put their trust on ACCOR services and in its qualities as an employer”.

This strong ethical commitment by ACCOR is serves as the foundation of ACCOR

policy. The purpose of the ACCOR management ethics as a brand is transparently and

powerfully remind to the universe of the fact.

ACCOR hotel core values are:

1. Innovation: the trademark

2. The spirit of conquest: growth engine

3. Performance: the key way to continue success

4. Respect: the basis of relationships: ACCOR believes the dignity of people and

diversity of respect throughout the world.

5. Trust: the foundation of management.

18
As the ethical practice for the hospitality business it is very vital list that ethical

practices needed by the ACCOR group. The mentioned below aspect are the major

ethical consideration for a good hospitality business, which need to apply in their

business practices:

i) The foundations of ACCOR integrity policy

ii) Respecting business ethics

iii) Protecting company assets

iv) Ensuring the safety dignity and interest of people

The above points are considerably very essential for each business point of view. As

all the mentioned points declare how ACCOR brand hotel group applying the ethical

management concept with different categories as per each points strongly represent

the important being in business. So the details of each aspect are as follow:

i) The foundations of ACCOR integrity policy: The fundamental

regarding this point refer to the all planning and procedure for

globalization of business. Internationalization is very important aspect at

the age of globalization. Thus the all regulation and chances of freedom

and strength is very important. As to tackle the further useable situation,

the controlling regulation and laws plays a major role for any kind of

business. As ACCOR applies following major actions in operations:

# Always referring to the legal framework that applies to ACCOR actions.

# Complying with regulatory standards.

# Integrating ACCOR compliance into a broader ethical agenda.

ii) Respecting business ethics: In general a good relationship is built up on

respect and trust, though it applies in both personal life and business point

of view which is very crucial in success of business. The excellent

19
 cooperation in not only essential with the business clients, its more with

the people who strongly plays a role in a success of business. Basically as

a whole hospitality sector the aspects of the ethics are respect, excellence,

honesty, fairness, kindness, sincerity, generosity, loyalty, enthusiasm and

eagerness, tenacity, endurance, integrity and trustworthiness which are

always comes into mind and words if someone explain about the ethical

code of conduct of business. So it is very important to understand the

business ethics.

Similarly ACCOR considered its business ethics as a major department which is

monitoring very importantly in operations. Certain laws governing business practices

are specifically designed to protect consumers, private citizens and other economic

players.

 Prohibit anti-competitive practices of all forms.

 Impose criminal and civil sanctions to bribery of public officials whether

national or foreign.

 Impose criminal and civil sanctions to bribery of private individuals and

enable the defrauded company to seek damages.

 Prohibit not only money laundering but also encourage or require economic

players to be very attentive to suspicious funds flows.

As the course title is more about ethic, in this phase the more break down of business

ethics is very important to discuss as ACCOR strongly allows ethical code of conduct

practice in business.

# Competition laws: Anti- competitive practices restrict competition in the market in

two ways:

20
 - When one or more competitors decide to fix prices or divide market among

themselves.

- When a company uses its dominant position to create obstacles to free, active

competition.

At European level

- The treaty of Rome applies rules to companies to ensure that competition in

the common market is not distorted.

- Measures to combat anti- competitive practices and promote international

cooperation are constantly strengthened.

Obviously required investigation, integrations and searches may be conducted in a

country at the request of foreign or transactional authorities.

# Bribery in the private sector: There are two type of bribery involving private

personal:

- Active bribery consists of promising or giving a person an inducement to act

in violation of his personal obligation.

- Passive bribery describes a case where a person has solicited or accepted an

inducement to act or not to act as the case may be in violation of his personal

obligations.

In this area ACCOR has developed policies applicable to all employees about gifts

that can or cannot be accepted.

# Money laundering and complicity in money laundering: Money laundering is a

crime that consists of holding or using funds that come from illegal activities such as

drug trafficking or bribery.

The action been taken to prevent this case of money laundering are led by:

21
 - The United Nations convection against transactional organized crime which

creates an international framework for combating money laundering.

- The financial action task force, an intergovernmental body that promotes

international cooperation, to which France belongs. All member states are

required to set up a financial information department to support the fight

against money laundering.

- Financial organizations which are subject to strict requirements with regard to

the identification and reporting of funds flows that correspond to money

laundering operations.

iii) Protecting company assets: A number of laws covering procedures have

been specifically adopted to protect who put their trust in the company, in

particular shareholders and employees, whom certain concerns and

interests mainly focused as a important matters.

iv) Ensuring the safety dignity and interest of people: It is about the laws

like many laws have been adopted to protect people in contact with the

company including customers, employees, suppliers and other who have

only indirect contact.

2.2 Key ethical consideration of ACCOR as marketing perspectives:

Basically all the large company have their own written code of ethic to guide or help

for the business or marketing activities of the business. Ethical marketing is a process

through which companies generate customer interest in product or services, build

strong customer interest and relationship. It also creates value for all stakeholders by

incorporating socially and environmental consideration in products and promotions.

All aspects of marketing are considered from sales techniques to business

22
communication and business development. ACCOR is operating their business

globally with the different brand portfolio. When the business terms comes globally

obviously the marketing and marketing mix activities involve on it in order to deliver

excellent services to fulfil the customer demand. ACCOR believes in implementing

the ethical marketing concept and communication through their strategies.

Communication, analytical skills and creativity are required to promote the group, its

brands and its hotels. Ethical concept is marketing perspective is very essentials

because the marketing is a major weapon to reach up to customer and try to sale the

product and service. Mostly in development countries the ethical part of the business

idea or marketing ethic has to be concerned as a major task. While doing marketing

about any short of product of a particular company, it should not be effect to the

emotion of people feeling and personal life, otherwise it will be unethical.

As we know ACCOR is operating very successfully in all over the Europe with

different hotel brand name. While thinking of expanding business or product through

a particular hotel, then ACCOR has to think the countries code of conduct and ethical

marketing scenario. The purchasing, marketing and sales functions are monetary

functions and any time money is involved and there will be high opportunities for

unethical behaviour. Only as a company ACCOR seems a very strong and considered

where the times comes for marketing activities because the particular companies

marketing activities should not be effect to the ethical perspective of the marketing.

Subliminal advertisement is one of the most highlighted and ethical issues in

marketing and advertising are relating subliminal advertisements. By putting

subliminal messages in an advertisement is very misleading action which causes

unethical behaviour.

23
 2. Corporate Social Responsibilities Perspective ACCOR Hotel Group

3.1 CSR: The concept:

The concept of corporate social responsibilities is very broad and every company has

to follow up or update their responsiveness towards community. By taking concerns

of the clients view about the sustainable development, it compile to every company

with the necessary moves regarding corporate social responsibilities. In tourism and

hospitality industry, every business cannot be escape without thinking their

responsibilities towards community and environment where they grow their business

ideas. ACCOR has got own planning and procedure regarding the concept of CSR.

CSR gives an in-depth and creative approach to tackle with the age of

competitiveness because as we all know that travellers are very well known about the

going concerns regarding ecotourism, environmental concerns. So by following the

suitable CSR concept wish demonstrate that in which way business can contribute

their responsibilities in operationally and strategically way. Such kind of operation

and strategic decision gives strength to the triple bottom line of business aspect which

indicates (financial, environmental and social sustainability). The ACCOR Group

believes that their business should contribute to the social and economic growth of the

countries, regions and cities where they work, and enhance the value of their wealth,

heritage and culture. In 2006 the Accor started with the social and environmental

project known as the 'Earth Guest Program' to prevent the environment form the

environment from the major health hazards that threaten the world. (Matten; D. et, al

2008)

While doing a business strategy the main four part which definition explains that

business should focus on four strategic areas, which are economic, legal, ethical and

24
philanthropic approach. To be ethically responsible, the business must do more than

what the law dictates. The last philanthropic activities provide the business a way to

give back to the society that supports them for the running a business in smooth way.

(Carroll Archie. B, 1979).

So the corporate social responsibility means:

 Responding positively to emerging societal priorities and expectations.

 A willingness to act ahead of regulatory confrontation

 Conducting business in an ethical way and in the interest of the wider

community.

 Balancing shareholder interests against the interests of the wider community

The CSR development process is not an easy task as it takes long time to formulate it.

Because it need to strongly cover the territory of broaden society which is not only the

domestically but internationally. CSR is a trend which is focused on the change from

short-term tasks to long-term tasks. It contributes to tenable and acceptable growth

and generally helps to improve the overall situation of society. CSR integrates the

attitudes practices and procedures into the company strategy at the highest level of

management. It request a change from the profit of the business only which level to

the wider levels: People, Planet and Profit. The triple-bottom-line means that the

company is focused on economic growth, environmental and social aspects of its

activities. As is universal truth that the business is a part of society where they

operates and society influence to the business.

So the general fundamental principle of CSR is also very important to understand

before developing a CSR strategy for business. CSR is based on three fundamental

principles. They are economic, social and environmental. Each part of CSR contains a

25
lot of different activities depending on the type of enterprise and the requirements of

stakeholders.

Economic area:

Transparent enterprise is expected from the company. A positive relationship with

investors, customer’s suppliers and other business partners is also concerns. The

impacts of the company on the economy at local, national and global levels are

monitored. The important of stakeholders and their interest and concerns value a most

to the business. So the SCR activities in economic area are also depends on.

Social area:

In the social area, behavior is focused on the attitude to employees and on supporting

the local community. The company influences the standard of living, health, safety,

education and cultural development of citizens.

Environmental area:

The company is aware of its impact on the living and inanimate nature in the

environment. This includes the ecosystem, land, air and water. There is an assumption

that the company will protect nature and natural resources.

Thus the CSR concept has to be clearly defined and apply in practical operation of a

business. So the main features of the CSR are as follows:

Feature of CSR:

 Triple-bottom-line: economic, social and environmental.

 Voluntary: all activities are done voluntarily.

 Stakeholder dialogue: integration of all participants.

 Long term period: all activities are done over a long term period.

 Credibility: increasing company credibility.

26
Advantages of CSR:

 Innovation: by bringing the new concept and idea which embrace the benefit

for company and society in both ways.

 Cost saving: by the concept of recycling and protecting environment by

consuming natural resources in good manner rather than artificial will helps to

save the cost for business.

 Brand differentiation: this is the most advantage way for business to create the

brand loyalty in a competitive environment. As customers are more concern

about the green planet and saving the environment. If a business applies the

ways of environment protection through different schemes then obviously it

helps to create a brand image.

 Long-term thinking

 Customer involvement

 Employee involvement

So after the clear concept of corporate social responsibility of a company, the

ACCOR hotel also applies the concept of CSR in practical business environment in

the following way:

As the ACCOR group enters a new phase of sustained expansion, it is reaffirming its

approach to responsible development, which generates value shared by everyone.

The new PLANET 21 program accelerates and intensifies Accor’s sustainable

development commitment, transforming it into a decisive competitive advantage for

the group, its brands and its partners. The program is structured around 21

commitments backed by quantifiable objectives that all hotels are expected to

meet by 2015. With PLANET 21, ACCOR is making sustainable hospitality the

focus of its strategic vision as well as its development and innovation process.

27
ACCOR has made with the PLANET 21 commitment in a favour of sustainable

development through its various brand hotel groups. Taking into the consideration of

responsibilities towards society, community and environment the ACCOR hotel group

begin its CSR concept of PLANET 21 program been launched in a year of 2012, 21 of

April which has been doing very well in the age of competitive advantages and

following an excellent practice across the globe in business point. The PLANET 21

program is basically for the program for the sustainable development. The name

PLANET 21 refers to the 21 agenda the action plan been adopted by 173 Heads of

State at the 1992 Earth Summit in Rio de Janeiro. It also focus to the urgent need to

put efforts in the 21st century to change the production and consumption patterns with

the goal of protecting the earth planet, its people and the environment.

The 21 commitment of ACCOR hotel group has categories into the main seven pillars

according to the major sector where it covers the whole sustainable development. In

ACCOR PLANET 21 program it has clearly mentioned about the responsible area of

hospitality industry mostly the hotel group of ACCOR where it covers the society,

people, employee, environment, health and many more. The following seven pillars,

21 commitment of ACCOR group makes clear the concept of CSR:

PLANET 21 Program: Sustainable development:

Health 1. Ensure healthy interiors

2. Promote responsible eating

3. Prevent diseases

Nature 4. Reduce the water use

5. Expand water recycling

6. Protect biodiversity

Carbon 7. Reduce the energy use

28
 8. Reduce carbon dioxide emissions

9. Increase the use of renewal energy

Innovation 10. Encourage Eco-design

11. Promote sustainable building

12. Introduce sustainable offers and technologies

Local 13. Protect children from abuse

14. Support responsible purchasing practise

15. Protect Eco-system

Employment 16. Support employee growth and skills

17. Make diversity an asset

18. Improve quality of work life

Dialogue 19. Conduct the business openly and transparently

20. Engage the franchised and managed hotels

21. Share the commitment with suppliers

Health:

Providing guest and its employees the healthy options in terms of food, and interior

building is very important because the structure of architecture building also effects to

the customer in terms of living standard. To encourage guest to be healthier and to

prevent diseases ACCOR is giving healthy choose option in their hotels menu with

different organic food and product. By giving different offers and schemes to join the

fitness program within the hotel is also encouraging people to be healthier.

Nature:

By introducing the ways and system of protecting the environment by reducing water

consumption and recycling waste is a major concept to save the natural resources. The

main theme of the ACCOR is to protect the environment and its natural beauty.

29
Recently the environment is changing rapidly which compile to the global warming

and natural disaster very frequently. So the businesses like hospitality industry they

have to be sure to protect nature while doing business on the environment. The

hospitality business is also produce in major number of wastages which will dump to

the near site of ocean so if the business protect the biodiversity and use some

systematic way of consumption then it will help to protect the nature.

Carbon:

Use the effective ways of reducing carbon footprint and emission. The main idea on it

is to execute energy saving measures and make use of renewable energy sources. To

reduce the emission of carbon the environmental friendly equipments and tools can be

implement into the business. By using the environmental friendly technology will

help to consume the electricity and gas.

Innovation:

Innovation is major way to sustain the business for the longer period. The

development of new business model encouraging to established the eco-design and

sustainable building. By the advance environmental friendly technology and

innovation in the guest rooms reducing the cost for business and beside of it helping

to encourage guest as well to be eco-friendly.

Local:

Giving priority to local food, suppliers and employee is also a part of responsibilities

while doing business in locally. By this way it helps to the local people to get

employment. The local level supplier are getting market to sale their product locally

and endangered sea animals are being protecting by not using them in hotel restaurant.

So for this reason ACCOR is strongly believes in doing business locally by giving

priority to local things.

30
Employment:

Responsibility towards the internal employee’s satisfaction is also the major part to

think about while doing business. The growth, promotion, supporting them, personal

development and good working condition are the major responsibilities to fulfil.

Employees play a major role while handling or delivering service to customer so the

different training and motivation is necessary.

Dialogue:

Business has to involve in sustainable development program with different partners

whose interest and concerns are related to the development of business CSR. The

mutual understanding and helping hand together helps to achieve the goal in future as

a whole.

To make success of the PLANET 21 program within the 7 pillar ACCOR is doing

different activities for the sustainable development. The activities include:

Earth Guest:

The ACCOR’s group environmental footprint:

The ACCOR hotel brand has started working on sustainable development for over 15

years. It opened the environment office in 1994 and it got high objectives in order to

meet the standard of sustainable development where it operates. The program is called

the Earth Guest and it focus basically in two centres:

- People: local development, balance food and protection against abuses.

- The environment: energy, water, waste and biodiversity.

The program working methods allowed ACCOR hotels to come with advance way in

terms of achieving objectives. Activities and achievement include:

Water consumption per rented room dropped 12% from 2006 to 2010.

31
Energy consumption per available room dropped 5.5% over the year period. Currently

over the Europe 85% of hotels have water flow regulators and 82% have compact

fluorescent lamps.

90% of the ACCOR hotels use energy saving bulbs for the 24 hour lighting.

94% of the hotels monitor and analyse their energy consumption every month.

169 of the ACCOR hotels use renewable energy sources and 134 of those hotels have

thermal plant.

ACCOR proudly announces the success of the PLANET 21 program, because of the

achievement in last one year it doing lots of additional activities to sustain the

environment and ecosystem.

In health sector of the program 68% of the ACCOR hotels offer eco labelled product

in to the hotels environment which is like cleaning products, decoration of hotel or

floor covering.

To encourage guest to be healthy and fitness 62% of the hotels restaurants promote

balanced dishes in the menu items.

Also to keep staff up to date about the handling health and safety procedure into the

hotel ACCOR 77% hotels are giving refreshing training to their staff members.

To preserve the natural resources the 88% of the ACCOR hotels fit the hotels showers

faucets with flow regulators.

By keeping in mind to the diversity the 64% of the hotels recycle waste using in-

house recycling methods and technologies.

In over the 90 countries among all hotels 1340 ACCOR brand hotels are taking part in

the Plant for the Planet reforestation project to protect the environment.

32
Plant for the Planet:

The world is being smaller day by day through the globalisation and usage of

technologies. To be socialise and taking social responsibilities towards the society

very business has to show the responsibilities to other part of world too. The Plant for

the Planet is basically focused on consumption of environmental resources. ACCOR

supports the planting of 19,200 cherry trees in memory of the 19,200 victims of the

Japan Tsunami. ACCOR has taken part in the Jakko no-mori project in 24 October

2012 to contribute its responsibilities toward the international societies. Also close to

the 1200 hotels involved and 1.7 million trees financed. At the project’s mid time

point, ACCOR has exceeded its forecasts. ACCOR continually involve against the

forestation of the plant and take an action against the reforestation of planet. Forest is

the major resources to balance the planet.

Evaluation of the risk as per the aspect of ACCOR hotel group and necessarily

recommendations by using the theory and the way of mitigate the risk for ACCOR

hotel Group:

While doing business in market place or in a global aspect of business, the risk is

always there. Risk can be threat for business or in other term risk can be taken as

opportunities, and then business will look for the ways to betterment and ways of

improvement to minimize the risk. Hence the study of business risk management is

very essential for business in the tourism and hospitality sector as well.

Risk applies to any management decision that could have a good or bad outcome. It

follows most management project and decision contains risk. Most of risks are not

catastrophic but some can cause loss of life and great damage. Better risk

management could have forestalled some of these crises. Risk is also future event that

33
result from action taken now. That is why managers should considered different

option for any problem and evaluates the consequences (Kit Sadgrove 2005).

It is easy to focus on obvious risk like normal work place accident and incidents but it

is difficult to understand the uncertain risk like natural disaster and ongoing

emergency situation. Similarly like other sector of business the tourism and

hospitality sector also cannot be escape with the uncertain risk like mentioned above.

For that reason the safety and advance planning to cover those kind risk is very

essential at the level of decision making of business.

ACCOR hotel group is operating its business in all over the Europe, obviously the

more business expand in international market the risk is higher too. As the concept

says higher the risk higher the gain so risk is positive things too for business it gives

learning opportunities for business to tackle with situation. Risk in business can be in

any department. The prior decision and appropriate strategy to minimize the risk for

future is important in an aspect of risk management. General aspect of risk in tourism

and hospitality business implies to the ACCOR internal risk as well. So the following

risk can be evaluate as a major risk and necessarily recommendations can be given to

mitigate the risk for ACCOR hotel group:

1. Political risk:

Political risk in aspect of that the ACCOR operating its business in over the

Europe and because of European Union decision and strategy of doing

business internationally makes a differences in the decision making level of

the ACCOR hotel group because the responsiveness of the society and nation

rules and regulation ACCOR has to make decision as the country political

situation and their legislation.

34
 Mitigate: By making the strategy and vision as per the recent political situation

of country will help to minimize risk of political aspect.

2. Risk of property damage:

In order to protect property, assets, balance sheet, or the physical outlet of

each of ACCOR brand hotel building it has to be secure or insured by the

company who can look after at the time of any particular damage. In a sense it

is important to prevent the risk of property damage and losses of business

because of unsure future where it is not guaranteed long run property without

repair or refurbishment.

Mitigate: To prevent such kind of risk of property damage the ACCOR has to

take a professional advice or support to make sure that all the ACCOR

branded hotels, employees and none other then the customer and their personal

belonging are secure when they are in contact with the ACCOR group.

3. Terrorism threat :

The other important threat or risk for any business which cannot be neglected

is a threat of terrorism activities. So it need to be highly likely considered as a

major task and need to follow the mitigation way to prevent it.

Mitigate: ACCOR can insure the standalone terrorism policy insures the

property (real and personal) against physical loss or damage by an act or series

of acts of terrorism or sabotage.

35
4. Health and safety risk:

Health and safety risk in hotel can be food positioning because of the faulty in

supply chain management and by not following the instruction by the food and

safety legislation of the countries department is a major risk for the business

point of view. Another issue can be fire, and structure of building and location

of fire assembly and preventive material and regular checking is a major point

to look. This kind of health and safety risk can lead to the major issue for the

business which will implies business with serious penalties.

Mitigate: Regular base checking on the whole hotel group system of operation

and trained employees on the regular basis and strong requirement and criteria

for the supply chain management can be implement properly in business.

5. Database security risk:

Tourism and hospitality business operation is hugely based on the uses of

modern technology. Each department of hospitality sector uses the database

information system. For example yield management, operating software,

reservation sector, online information, and email internet system along with

the keeping data of the customer for the purpose of future use. So the database

security is more prior to any business in the world. As every organization

ACCOR also taking this database security risk as a major task which has to

prevent in a proper manner as it concerns with the customer. ACCOR puts

customer data security first with encryption system roll out.

36
 Mitigate: ACCOR hotels is rolling out a multi-million pound encryption

system as part of a program to safeguard customer’s personal information,

including credit card details from the risk of identity theft.

Customer data security 2007, Accessed on 30th of may 2013,

6. Crises management risk(potential communication lack):

Crises management in the terms of internal communication within the

ACCOR hotel group and their brand is very important. Risk communication

aims to changing the acceptance of risk. For this the initiation of risk dialogue

between the organization and the public is recommended. The aim of this

communication process is an increase in risk acceptance and reduction of

conflict potential (Drik Glaesser 2013)

Mitigate: By doing the campaign and marketing activities to reach up to the

public and through their demand and ideas putting them in the suggestion for

improvement of ACCOR business can be done to minimize the crises of

communication with the ACCOR hotel group.

37
OBJECTIVES OF
THE STUDY

38
 OBJECTIVES OF THE STUDY

 To study the financial analysis of Accor Group

 To ascertain the overall profitability of the company.

 To analyze trends on the basis of ratios for consecutive 4 years.

 To gain insight as to how a financial statement can be use to predict future.

 To analyze working capital funds with the help of ratios.

39
 RESEARCH
METHODOLOGY

40
 RESEARCH METHODOLOGY

PROBLEM STATEMENT

In every step of life resources are always scarce. In the same way, Business

organizations are also facing such type of problems. In this respect every organization

wishes to use available resources in an optimum manner. This study is basically

emphasizing on the financial analysis of Accor Group ltd and tries to find out ways of

optimum utilization of financial resources.

The topics are dealt with in a general manner. There would be details, which could

vary from company to company.

RESEARCH DESIGN:

A research design is the arrangement of conditions for collection and analysis

of data in a manner that aims to combine relevance to the research purpose with

economy in procedure .A research design is purely and simply the framework of

plan for a study that guides the collection and analysis of data. It is a blue print

that is followed in completing a study. Keeping in view the objectives of the

project

Research design used in the report is Descriptive. Type of research conducted is

analytical in nature.

Descriptive Research:

This is kind of research structure which is concerned with describing the

characteristics of the problem. In this way the main purpose of such a

research design is to present a descriptive picture about the marketing problem

41
on the basis of actual facts. For this it is important to obtain the complete and

actual information about the subjects.

TYPE OF DATA AND DATA COLLECTION

Secondary data:

Secondary data are those which have already been collected by someone else and

have already been passed through the statistical process.

The Annual reports of Accor Group was the main source of data in the study, annual

reports from 2014 to 2018 were collected and referred.

All the data has been collected from internal source that includes:-

 Books

 Websites

 Official Files

 Company’s Manual related to Working Capital

Techniques of Analysis:-
 The data are analyzed through ratio analysis common size balance sheet,
comparative balance sheet and fund flow analysis.

42
LIMITATIONS
OF THE STUDY

43
 LIMITATIONS OF THE STUDY
1. The study is limited to Accor Group and the finding need not apply in similar

sense to other firms.

2. The inferences that have been framed only on the basis of financial statement.

3. Based on the limited information it is not possible to arrive at a proper

conclusion.

4. Limitations of Financial analysis.

44
DATA ANALYSIS
&
INTERPRETATION

45
 DATA ANALYSIS & INTERPRETATION

Current Ratio (Working Capital Ratio)

= Current Assets

Current Liabilities

Current Ratio (2014 to 2018) (Rs in CRS.)

YEAR CURRENT CURRENT RATIO

ASSETS LIABILITIES

2013-14 8439.39 14362.33 0.59

2014-15 10466.63 14466.89 0.73

2015-16 10021.39 13638.30 0.73

2016-17 13730.10 16732.40 0.82

2017-18 23957.90 17842.70 1.34

Interpretation: From the above table we can indicate that the current assets are

very less compared to current liability of the company. The company doesn’t have

enough current assets in meeting their liabilities. So, the company can’t meet

immediate emergencies.

The company needs to increase current assets in order to meet its short-term

obligation. We can conclude that the ratio isn’t favorable as the current asset is less

than the current liabilities.

46
Quick (Acid Test or Liquid) Ratio:

= Quick Assets

Current Liabilities

Table:2 Quick Ratio (2014 to 2018) (Rs in CRS.)

YEAR QUICK CURRENT RATIO

ASSETS LIABILITIES

2013-14 8382.53 14362.33 0.58

2014-15 10404.48 14466.89 0.72

2015-16 9994.15 13638.30 0.73

2016-17 13695.70 16732.40 0.82

2017-18 22866.90 17842.70 1.28

Interpretation: As per as quick ratio is concern whether a firm has enough short-

term assets to cover its immediate liabilities without selling inventory. Here, Accor

Group review that in 2014-15 increase their assets and then after very small

percentage increase. That point of Time it has not enough asset to cover its liabilities.

Company ideal ratio is 1.5 so is below the ratio. This is not good for company should

be improving that point.

47
Debtors Turnover Ratio

= Credit Sales

Avg. Debtors

Table:3 Debtors Turnover Ratio (2014 to 2018) (Rs in CRS.)

YEAR CREDIT SALES AVG. DEBTORS RATIO DAYs

2013-14 25761.11 2097.49 12.28 30

2014-15 34048.32 1515.76 22.46 16

2015-16 35609.54 2327.52 15.30 24

2016-17 38015.80 2240.39 16.97 23

2017-18 41,603.80 2134.50 18.45 18

Interpretation: Higher turnover signifies speedy and effective collection. Lower

turnover indicates sluggish and inefficient collection leading to the doubts that

receivables might contain significant doubtful debts. Receivables collection period is

expressed in number of days. Here the company in 1st year 1month to collection &

after decline then after increase. Company does not maintain lower collection period.

48
Return On Investments Ratios:-

i. Return On Net Worth

ii. Earnings Per Share (EPS)

iii. Cash Earnings Per Share (CEPS)

iv. Return On Capital Employed

Return on Net Worth

PAT – Preference Dividend x 100

Net Worth

Table:4 Return On Net Worth (2014 to 2018) (RS IN CRS.)

YEAR PAT – PREFERENCE NET WORTH RATIO

DIVIDEND

2013-14 6244.19 20241.49 30.85

2014-15 7743.84 27643.97 28.01

2015-16 9426.15 36737.18 25.66

2016-17 7716.90 44111.60 17.49

2017-18 5266.00 49429.60 10.65

Interpretation: As per as net worth ratio states the return that shareholders could

receive on their investment in a company. Here the company continuous declines year

by year this not well for company. But actually is right because bank rate is low like

12 % is good for investors.

49
 Earnings Per Share PAT

No. Equity Shares

Table:5 (2014 to 2018) (RS IN CRS.)

YEAR PAT NO. OF EQUITY RATIO

SHARES

2013-14 6244.19 189.79 32.90

2014-15 7743.84 189.82 40.79

2015-16 9426.15 379.75 24.82

2016-17 7716.90 379.75 20.32

2017-18 5266.00 379.75 13.87

Interpretation: As per as EPS ratio is concern the portion of a company's profit

allocated to each outstanding share of common stock. Earnings per share serve as an

indicator of a company’s profitability. Here the company shows high profitability so it

is good for company as well as investor.

50
4.6 Return on Capital Employed

PBIT

Capital Employed

Table:6 (RS IN CRS.)

YEAR PBIT CAPITAL EMPLOYED RATIO

2013-14 9450.20 56009.10 16.87

2014-15 11194.72 41776.10 26.80

2015-16 8747.65 35357.53 24.74

2016-17 7599.87 26811.63 28.35

2017-18 7514.80 11565.07 0.64

Interpretation: It is expressed as a percentage and can be very revealing about the

industry a company operates in, the skills of the management and occasionally the

general business climate. Here, the company continuous increases efficiency. It is

good for the company.

51
Solvency Ratios:-

i. Net Asset Value (NAV)

ii. Debt Equity Ratio

iii. Int. Coverage Ratio

iv. Debt Service Coverage Ratio

v. Proprietary Ratio

vi. Total Assets to Debt Ratio

vii. Liabilities to Equity Ratio

Net Asset Value

Net Worth

No. Equity Share

Table:7 Net Asset Value (2014 to 2018) (RS IN CRS.)

YEAR NET WORTH NO. OF EQUITY RATIO

SHARES

2013-14 20241.49 189.79 106.65

2014-15 27643.97 189.82 145.63

2015-16 36737.18 379.75 96.74

2016-17 44111.60 379.75 116.16

2017-18 49429.60 379.75 130.16

Interpretation: The net asset value in companies is the book value deducting

liabilities and intangible assets from the total assets. For companies, the net asset

value is always used in market book ratio or price book ratio to compare the net asset

value of the company with its market value. Here condition of company is good due

to high profitability.

52
Debt Equity Ratio

Long Term Debt

Share Holder Fund

Table:8 Debt Equity Ratio (2014 to 2018) (RS IN CRS.)

YEAR LONG TERM DEBT SHARE RATIO

HOLDER FUND

2013-14 6570.43 20241.49 0.32

2014-15 7713.65 27643.97 0.29

2015-16 5038.92 36737.18 0.14

2016-17 11897.50 44111.60 0.27

2017-18 14129.40 49429.60 0.28

Interpretation: A measure of a company's financial leverage calculated by

dividing its total liabilities by stockholders' equity. It indicates what proportion of

equity and debt the company is using to finance its assets. Here the company ratio so

good in the current situation as to the previous years. This is good for the company.

53
Proprietary Ratio

Proprietary Fund

Total Asset

Table:9 Proprietary Ratio (2014 to 2018) (RS IN CRS.)

YEAR PROPRIETARY TOTAL ASSET RATIO

FUND

2013-14 20241.49 26811.84 0.75

2014-15 27643.97 35357.62 0.78

2015-16 36737.18 41776.12 0.88

2016-17 44111.60 56009.10 0.79

2017-18 49429.60 63559.00 0.78

Interpretation: Proprietary Ratio refers to a ratio which helps the creditors of the

company in seeing that their capital or loans which the creditors have given to the

company are safe. Ideal ratio is <1 so Here company has all year is <1 so it is good

for company.

54
Total Asset to Debt Ratio

Total Asset

Long Term Debt

Table:10 Total Asset to Debt Ratio (2014 to 2018) (RS IN CRS.)

YEAR TOTAL ASSET LONG TERM RATIO

DEBT

2013-14 26811.84 6570.43 4.08

2014-15 35357.62 7713.65 4.58

2015-16 41776.12 5038.92 8.29

2016-17 56009.10 11897.50 4.71

2017-18 63559.00 14129.40 4.50

Interpretation: As per as the total asset to debt ratio to debt ratio is concern ratio

between asset & long term debt. In the ratio total asset more than long term debt. So

here company total asset is high in 2015-16 but company can’t maintain that so

improve that point is actually it is good.

55
Liabilities to Equity Ratio

Total Liabilities

Share Holders Equity

Table:11 Liabilities to Equity Ratio (2014 to 2018) (RS IN CRS.)

YEAR TOTAL SHARE HOLDERS RATIO

LIABILITIES EQUITY

2013-14 26811.84 20241.49 1.32

2014-15 35357.62 27643.97 1.28

2015-16 41776.12 36737.18 1.14

2016-17 56009.10 44111.60 1.27

2017-18 63559.00 49429.60 1.28

Interpretation: The liability to equity ratio is the relationship between the capital

contributed by creditors and the capital contributed by shareholders. It also shows the

extent to which shareholders' equity can fulfill a company's obligations to creditors in

the event of liquidation. Here the company increases their equity year by year. Ideal

ratio is 1 here company is work on more than 1 so it is good for the company.

56
Efficiency Ratios or Turnover Ratios:-

i. Fixed Assets Turnover Ratio

ii. Net Worth Turnover Ratio

iii. Working Capital Turnover Ratio

Fixed Assets Turnover Ratio

Net Sales

Net Block of Fixed Asset

Table:12 Fixed Assets Turnover Ratio (2014 to 2018) (RS IN CRS.)

YEAR NET SALES NET BLOCK OF RATIO

FIXED ASSET

2013-14 25761.11 19030.65 1.35

2014-15 34048.32 25013.36 1.36

2015-16 35609.54 28024.97 1.27

2016-17 38015.80 40700.80 0.93

2017-18 41603.80 43984.30 0.94

Interpretation: Ratio measures a company's ability to generate net sales from

fixed-asset investments - specifically property, plant and equipment (PP&E) - net of

depreciation. A higher fixed-asset turnover ratio shows that the company has been

more effective in using the investment in fixed assets to generate revenues. Here the

company’s decline the use of the asset continues decline. This is not good for the

company.

57
Net Worth Turnover Ratio

Net Sales

Net Worth

Table:13 Net Worth Turnover Ratio (2014 to 2018) (RS IN CRS.)

YEAR NET SALES NET WORTH RATIO

2013-14 25761.11 20241.49 1.27

2014-15 34048.32 27643.97 1.23

2015-16 35609.54 36737.18 0.97

2016-17 38015.80 44111.60 0.86

2017-18 41603.80 49429.60 0.84

Interpretation: As per as Net worth Turnover Ratio is concern it show the

relationship between the net worth & net sales. Ideal ratio is 1.5 but company is not

performance better in this case ratio is continues decline. It is not good for the

company.

58
Working Capital Turnover Ratio

Net Sales

Working Capital

Table:14 Working capital Turnover Ratio (2014 to 2018) (RS IN CRS.)

YEAR NET SALES WORKING RATIO

CAPITAL

2013-14 25761.11 (-)5922.94 (-)4.35

2014-15 34048.32 (-)4000.26 (-)8.51

2015-16 35609.54 (-)3616.91 (-)9.85

2016-17 38015.80 (-)3002.30 (-)12.66

2017-18 41603.80 6115.20 6.80

Interpretation: The working capital turnover ratio concern to increasing ratio

indicates that working capital is more active; it is supporting, comparatively, higher

level of production and sales; it is being used more intensively. Here company is not

performing well due to negative working capital. This is not good for company.

59
Profitability Ratios:-

i. Gross Profit Ratio

ii. Profit Before Depreciation, Interest & Tax Ratio (PBDIT)

iii. Profit Before Interest & Tax Ratio (PBIT) or Operating Profit Ratio

iv. Profit Before Tax Ratio (PBT)

v. Net Profit or Profit After Tax Ratio (PAT)

vi. Defective Tax Rate

vii. Operating Ratio

PBDIT Ratio

PBDIT x 100

Net Sales

Table:14 PBDIT Ratio (2014 to 2018) (RS IN CRS.)

YEAR PBDIT NET SALES RATIO

2013-14 10766.45 25761.11 41.79%

2014-15 11953.93 34048.32 35.11%

2015-16 15084.80 35609.54 42.36%

2016-17 13643.90 38015.80 35.89%

2017-18 13430.80 41603.80 32.28%

Interpretation: Financial metric used to assess a company's profitability by

comparing its revenue with earnings. More specifically, since PBDIT is derived from

revenue, this metric would indicate the percentage of a company is remaining after

operating expenses. Here high ratio indicate good position in market this is good for

company.

60
PBIT or Operating Profit Ratio

PBIT x 100

Net Sales

Table:15 PBIT Ratio (2014 to 2018) (RS IN CRS.)

YEAR PBIT NET SALES RATIO

2013-14 7333.80 25761.11 28.47%

2014-15 8568.83 34048.32 25.17%

2015-16 10986.88 35609.54 30.85%

2016-17 9032.30 38015.80 23.76%

2017-18 7514.80 41603.80 18.06%

Interpretation: As per as ratio is concern a higher operating margin means that the

company has less financial risk. Here company has average high ratio so the company

is a good position.

61
PBT Ratio

PBT x 100

Net Sales

Table:16 PBT Ratio (2014 to 2018) (RS IN CRS.)

YEAR PBT NET SALES RATIO

2013-14 6879.70 25761.11 26.71%

2014-15 8088.52 34048.32 23.75%

2015-16 10652.75 35609.54 29.92%

2016-17 8747.40 38015.80 23.00%

2017-18 6989.70 41603.80 16.80%

Interpretation: As per as ratio is concern a higher interest margin means that the

company has less financial risk. Here company has average high ratio so the company

is a good position.

62
Net Profit Ratio

Net Profit x 100

Net Sales

Table:17 Net Profit Ratio (2014 to 2018) (RS IN CRS.)

YEAR NET PROFIT NET SALES RATIO

2013-14 6244.19 25761.11 24.24%

2014-15 7743.84 34048.32 22.74%

2015-16 9426.15 35609.54 26.47%

2016-17 7716.90 38015.80 20.30%

2017-18 5266.00 41603.80 12.66%

Interpretation: This ratio is a measure of the overall profitability net profit is

arrived at after taking into accounts both the operating and non-operating items of

incomes and expenses. The ratio indicates what portion of the net sales is left for the

owners after all expenses have been met. Here the company high profit in year 2015-

16 then decline. This is not good for company. Company should be maintaining the

NP ratio.

63
Capital Market Ratios:-

i. Price Earnings Ratio (PE Ratio)

ii. Market Price to NAV Ratio

iii. Market Capitalization Ratio

iv. Yield to Investor

v. Price to Book Ratio

Price Earnings Ratio

Market Price of a Share

Earnings per Share

Table:18 Price Earnings Ratio (2014 to 2018) (RS IN CRS.)

YEAR MARKET PRICE EARNINGS PER RATIO

OF A SHARE SHARE

2013-14 420.00 32.90 12.77

2014-15 508.30 40.79 12.46

2015-16 174.60 24.82 7.03

2016-17 270.70 20.32 13.32

2017-18 273.30 15.09 18.11

Interpretation: The P/E looks at the relationship between the stock price and the

company’s earnings. Here the company has a high P/E ratio in last year it suggests

that stock is undervalued and investor can earn from it.

64
Market Price to NAV Ratio

Market Price of a Share

NAV

Table:19 Market Price to NAV Ratio (2014 to 2018) (RS IN CRS.)

YEAR MARKET PRICE NAV RATIO

OF A SHARE

2013-14 420.00 106.65 3.94

2014-15 508.30 145.63 3.49

2015-16 174.60 96.74 1.80

2016-17 270.70 116.16 2.33

2017-18 273.30 130.16 2.10

Interpretation: As per as this ratio is concern the investment potential of a share.

It also offers opportunity to the company to buy back its own shares from the market.

Hear the company has higher ratio represent the ability to buy own shares in the

market. Ideal ratio is 2 so all year is above the 2.

65
Market Capitalization Ratio

Market Price of a Share x Total No. of Shares

Table: 20 Market Capitalization Ratio (2014 to 2018) (RS IN CRS.)

YEAR MARKET PRICE TOTAL NO. OF RATIO

OF A SHARE SHARES

2013-14 420.00 189.97 79787.40

2014-15 508.30 189.82 96485.15

2015-16 174.60 379.75 66304.35

2016-17 270.70 379.75 102798.33

2017-18 273.30 379.75 103785.67

Interpretation: The ratio provides a base for total valuation of a company based

on the market price of its equity. It immensely helpful in negotiating mergers,

takeover, acquisition act. Hear the company perfume well in market but decline way

so company should be improve & take expansion strategy.

66
Multi Step Profit & Loss Account (RS IN CRS.)

C.Y. P.Y.
Particulars
(2017-18) (2016-17)

Gross Sales 41603.80 38015.80

Less: Excise duty - -

Net Sales 41603.80 38015.80

-Administrative, Selling and Other Expenses 27843.50 24590.10

+ other income (operating) 329.50 218.20

Profit Before Depreciation Interest and Tax - PBDIT 13430.80 13643.90

Profit Before Depreciation Interest and Tax - PBDIT 13430.80 13643.90

-Depreciation 5916.00 4193.70

-Amortisation - 417.90

-Impairment - -

Operating Profit – PBIT 7514.80 9032.30

Operating Profit – PBIT 7514.80 9032.30

-Interest & Finance Charges 1199.30 296.70

+Other Income (Non-Operating) - -

Profit Before Tax & Extra Ordinary Items - PBTEOT 6315.50 8735.60

Profit Before Tax & Extra Ordinary Items - PBTEOT 6315.50 8735.60

+/ - extra ordinary items 17.50 11.8

Profit Before Tax for the year – PBT-Y 6333.00 8747.40

67
+/ - Prior year adjustments - -

Profit Before Tax 6333.00 8747.40

Profit Before Tax 6333.00 8747.40

Provision for tax:

Current income tax 1226.20 1007.60

+/ - deferred income tax liability - -

+ fringe benefit tax - -

+/ - tax adjustments for previous year - -

Total Income Tax 1067.00 1030.50

Profit After Tax – NP/PAT 5266.00 7716.90

Analysis and Interpretation:

It equally, and probably, more to study analysis the profitability of the company at

different step or at intermediate levels, of business activities, in relation to net sales. It

may be observed that in case of Accor Group profit has decline at every intermediate

stage. However, since absolute figures are not amenable to further analysis.

68
Horizontal Analysis:-

Horizontal Profit & Loss Acc of Accor Group for the year 2016-17 &

2017-18: (RS IN CRS.)

2017-18 2016-17 Increase/ Increase/

Particular (C. Y.) (P. Y.) Decrease Decrease

(%)

Sales 41603.80 38015.80 3588.00 9.44

(-) Administrative, Selling

and Other Expenses 27843.50 24590.10 3253.40 13.23

PBDIT 13760.30 13425.70 334.60 2.50

(-) Depreciation & 5916.00 4611.60 1304.40 28.28

Amortization 7844.30 8814.10 (-)969.80 (-)11.00

PBIT 545.90 308.50 237.40 76.95

(-) Interest Expenses 7298.40 8505.60 (-)1207.20 (-)14.19

PBT 1067.00 1030.50 (-)196.10 (-)15.99

(-) Income Tax 6231.40 7475.10 (-)1243.70 (-)16.64

PAT

69
Horizontal Balance Sheet of Accor Group for the year 2016-17 & 2017-18:

(RS IN CRS.)

2017-18 2016-17 Increase/ Increase/

Particular (C. Y.) (P. Y.) Decrease Decrease

(%)

Sources of Funds:-

Owned Funds:

Share Capital 1898.80 1898.80 0.00 0.00

Reserves & Surplus 47530.80 42212.80 5318.00 21.17

49429.60 44111.60 5318.00 12.05

Loan Funds:

Secured Loans 2.90 17.10 (-)14.20 (-)83.04

Unsecured Loans 14126.40 11880.40 2246.00 18.90

14129.30 11897.50 2231.80 18.76

Total 63558.90 56009.10 7549.80 13.48

Application of Funds:-

1.)Fixed Assets

 Gross Block 70450.30 61437.50 9012.80 14.67

 Less: depreciation (-)26466.0 (-)20736.7 5729.30 27.62

 Net Block 43984.30 40700.80 3283.50 8.07

 Capital work in progress 1072.50 6497.60 (-)5425.10 (-)83.45

2.)Investments 12337.80 11813.00 524.80 4.44

3.)Current Assets, Loans &

Advances

 Inventories 32.10 34.40 (-)2.3 26.28

70
  Sundry Debtors 2134.50 2375.80 (-)270.82 (-)6.69

 Cash & Bank Balance 159.20 126.60 32.60 25.75

 Fixed Deposit 322.60 7.20 315.4 43.80

 Loans & Advances 23957.90 11186.10 12771.80 114.17

Less: Current Liabilities (-)17145.2 (-)16104.8 1040.4 6.46

Provisions (-)697.50 (-)627.60 69.90 11.13

Net Current Assets: 6115.20 (-)3002.30 614.61 (-)303.68

4.) Miscellaneous Exp. - -

Profit & Loss Account - -

Total 63559.00 56009.10 7549.90 13.48

Analysis and Interpretation of Accor Group:-

Profit & loss account

1. Net sales growth by 9.44%

2. Increase in expenses like Administrative, Selling and Other Expenses by

13.23% this is very high to camper to sales growth so it is not good for the

company.

3. Depreciation & Amortization even increase by 28.28% that shows that

company noncash charges increase not well for the company.

4. Interest Expenses is decline by 76.95% this is good for the company.

5. Decline in income tax by 15.99% due to low profit margin. This is not good

for company.

6. Decline in PAT by 16.64% is not good for company.

71
Balance Sheet

1. Total asset / liabilities up by 13.48%

2. Net worth up by 12.05%

3. Lone fund also decreased by 13.48% this shoe the company good will in the

market to give lone.

72
Vertical Analysis:-

Vertical Profit & Loss Acc of Accor Group for the year 2016-17 & 2017-

18:

(RS IN CRS.)

Particulars Sche Current Year Previous Year

dule (2017-18) (2016-17)

Inner Outer Inner Outer

Column Column Column Column

Income

Sales 41603.80 38015.80

Less: return

Other Income 329.50 218.20

41933.30 38234.00

Expenditure

Administrative, Selling and Other 27843.50 24585.50

Expenses

Interest & Finance Charges 1199.30 296.70

Depreciation 5916.00 4193.70

Impairment loss on fixed assets 417.90

Adjustment due to (increase) / (-)2.30 (-)7.20

Decrease in stock of finished goods

& W.I.P

Provision for contingencies

34961.10 29510.20

73
Profit Before Taxation 6989.70 8747.40

Provision for Income Tax 1067.00 1030.50

Profit After Taxation 5730.00 7716.90

74
Vertical Balance Sheet of Accor Group for the year 2016-17 & 2017-18:

(RS IN CRS.)

Schedule Current Year Previous Year

I Sources of funds

1.) Shareholder’s Funds:

a.) Capital 1898.80 1898.80

b.) Reserves & Surplus 47530.80 42212.80

2.) Loan Funds

a.) Secured Loans 2.90 17.10

b.) Unsecured Loans 14126.50 11880.40

Total 63559.00 56009.10

II Application of Funds

1.) Fixed Assets

a.) Gross Block 70450.30 61437.50

b.) less: depreciation (-)26466.00 (-)20736.70

c.) Net Block 43984.30 40700.80

d.) Capital work-in progress 1072.50 6497.60

2.) Investments 12337.80 11813.00

3.) Current Assets, Loans &

Advances:

a.) Inventories 32.10 34.40

b.) Sundry Debtors 2134.50 2375.80

75
 c.) Cash And Bank Balances 159.20 126.60

d.) Fixed Deposit 322.60 7.20

e.) Loans And Advances 23957.90 11186.10

Less:

Current Liabilities and Provisions

a.) Liabilities 17145.20 16104.80

b.) Provisions 697.50 627.60

Net Current Assets: 6115.20 (-)3002.30

4.) a.) Miscellaneous Expenditure - -

b.) Profit and Loss Account - -

Total 63559.00 56009.10

Analysis and Interpretation:

1. Income is increase as camper to previous year due to sales increase.

2. Expenditure more than the previous year this bed for company that’s way

decline in profits margin.

3. Share holders fund is increase as camper to previous year this good for the

company.

4. In application of fund is not proper managed by the company because net

working capital is in negative but we show the some improvement in this. So,

this not good for the company.

5. As all aspect of the vertical analysis part over all company tries to increase his

performance by increases of his efficiency.

76
Vertical Analysis:-

Common size Profit & Loss Acc of Accor Group for the year 2016-17 &

2017-18:

(RS IN CRS.)

Particulars Current Year Previous Year

(2017-18) (2016-17)

Amount % Amount %

Sales 41603.80 100 38015.80 100

(-)Selling, Administrating & Other 27843.50 66.92 24371.90 64.11

Expenses

PDBIT 13760.30 33.07 13643.90 35.89

(-)Depreciation & Amortization 5916.00 14.22 4599.80 12.10

PBIT 7844.30 18.85 9044.10 23.71

(-)Interest 545.90 1.31 296.70 0.78

PBT 7298.40 17.54 8747.40 23.01

(-)Income Tax 1067.00 2.56 1030.50 2.71

PAT 6231.40 14.98 7716.90 20.30

77
Common size Profit & Loss Acc of Accor Group for the year 2016-17 &

2017-18:

(RS IN CRS.)

Current Previous

Particulars Year % Year %

(2017-18) (2016-17)

Sources of funds

1.) Shareholder’s Funds:

a.) Capital 1898.80 2.99 1898.80 3.39

b.) Reserves & Surplus 47530.80 74.78 42212.80 75.37

2.) Loan Funds

a.) Secured Loans 2.90 0.00 17.10 0.03

b.) Unsecured Loans 14126.50 22.22 11880.40 21.21

Total 63559.00 100 56009.10 100

Application of Funds

1.) Fixed Assets

a.) Gross Block 70450.30 110.84 61437.50 109.69

b.) less: depreciation (-)26466.00 (-)41.64 (-)20736.70 (-)37.02

c.) Net Block 43984.30 69.21 40700.80 72.67

d.) Capital work-in progress 1072.50 1.69 6497.60 11.60

2.) Investments 12337.80 19.41 11813.00 21.09

3.) Current Assets, Loans & Advances:

a.) Inventories 32.10 0.05 34.40 0.06

b.) Sundry Debtors 2134.50 3.36 2375.80 4.24

78
 c.) Cash And Bank Balances 159.20 0.25 126.60 0.23

d.) Fixed Deposit 322.60 0.51 7.20 0.01

e.) Loans And Advances 23957.90 37.69 11186.10 19.97

Less:

Current Liabilities and Provisions

a.) Liabilities 17145.20 26.97 16104.80 28.75

b.) Provisions 697.50 1.10 627.60 1.12

Net Current Assets: 6115.20 9.62 (-)3002.30 (-)5.36

4.) a.) Miscellaneous Expenditure - -

b.) Profit and Loss Account - -

Total 63559.00 100 56009.10 100

79
Analysis and Interpretation:

1. As camper to sales to other selling and administrative & other expense cover

64.11% & 66.92% respectively for 2016-17 & 2017-18. cover the large

amount of revenue so that’s not good for the company and mostly affected the

company performance.

2. Hear that profitability of company ‘s performance that sows as per profit

before tax is as camper to sale is 23.01 & 17.54 respectively 2016-17 & 2017-

18.that shows that company profit margin is low than capitalization rate that is

23.77% but is not good for the company as well as investor.

3. According to reserve & surplus is 75.37% & 74.78% respectably to 2016-17 &

2017-18. That’s show hat company is not maximize use of their funds in

implication is not proper meaner.

4. Company fixed asset is very high i.e. 72.67% & 69.21 % respectively 2016-17

& 2017-18. it shows that company bare low fix cost during operation that is

good for the company.

5. As camper the total asset to investment that 21.09 % & 19.41 % respectively

in 2016-17 & 2017-18 hear the company sales there in current year by same

proportion this not good for the company.

6. Overall performance of the company that better could in next year by that

increasing performance by sale and low cost that should be improving that.

80
Trend Analysis:- (RS IN CRS.)

Particulars 2017-18 2016-17 2015-16 2014-15 2013-14

Sales 41603.80 38015.80 35609.54 34048.32 25761.11

Index 1.61 1.48 1.38 1.32 1

PBDIT 13760.30 13643.90 15084.80 11953.93 10766.45

Index 1.28 1.27 1.40 1.11 1

PBIT 7844.30 9032.30 10986.88 8568.83 7333.80

Index 1.07 1.23 1.50 1.17 1

PBT 7298.40 8747.40 10652.75 8088.52 6879.70

Index 1.06 1.27 1.55 1.18 1

PAT 6231.40 7716.90 9426.15 7743.84 6244.19

Index 1.00 1.24 1.51 1.24 1

Share Holders Fund 49429.60 44111.60 36737.18 27643.97 20241.49

Index 2.44 2.18 1.81 1.37 1

Total Debt 14129.40 11897.50 5038.92 7713.65 6570.34

Index 2.14 1.81 0.77 1.17 1

Net Block 43984.30 40700.80 28024.97 25013.36 19030.65

81
Index 2.31 2.14 1.47 1.35 1

Net Current Assets 6115.20 (-)3002.30 (-)3616.91 (-)4000.26 (-)5922.94

Index 1.02 0.50 0.61 0.67 1

Total Assets/Total Liability 63559.00 56009.10 41776.12 35357.62 26811.80

Index 2.37 2.09 1.56 1.32 1

Trend Analysis and Interpretation:

1. In sale continuously increase. This is good performance of the company that is

currently company is market leader in telecom industry.

2. As per as profit after tax is concern high profit sow the high performance of

the company hear the company 2015-16 is very high but company should be

maintain that profitability.

3. Share holders fund continuous up by creating the good image in the market

that’s shows the goodwill of the company.

4. Total debt of the company is in year 2015-16 is very low as camper the base

year of 2013-14 this is good for company but in year 2017-18 is very high so

that not maintain by the company.

5. net current asset of the company is in negative that not good for the company

6. Total asset/ total liability of the company is continues increasing that shows

that turnover year by year that’s good for the company.

82
FINDINGS

83
 FINDINGS

 The current ratio of the company for the year 2013-14 is 0.59, 2014-15 is 0.73,

2015-16 is 0.73, 2016-17 is 0.82 and 2017-18 is 1.34, the current ratio has

increased by 23.73% in the year 2014-15, and in 2015-16 it remains constant.

There was increase positive value is found by 12.33% in year 2016-17 and

increased by 63.41% in the year 2017-18.

 The quick ratio of the company for the year 2013-14 is 0.58, 2014-15 is 0.72,

2015-16 is 0.72, 2016-17 is 0.82, and 2017-18 is 1.28. The quick ratio has

increased by 24.14 % in the year 2014-15 and the year 2015-16 is increased by

1.39% there is increased positive value is found by 12.33% for the year 2016-

17 and increased by 56.10% in the year 2017-18.

 The debtors turnover ratio of the company for the year 2013-14 is 12.28 times,

2014-15 is 22.46 times, 2015-16 is 15.30 times, 2016-17 is 16.97 times, and

2017-18 is 18.45 times the debtors turnover ratio has increased by 82.90% in

the year 2014-15, and in 2015-16 it decreased by 31.88%. There was increase

positive value is found by 10.92% in year 2016-17 and increased by 8.72% in

the year 2017-18.

 The return on net worth of the company for the year 2013-14 is 30.85, 2014-

15 is 28.01, and 2015-16 is 25.66, 2016-17 is 17.49, and 2017-18 is 10.65.

The return on net worth has decreased by 9.21% in the year 2014-15, and

decreased by 8.39% in the year 2015-16 and again decreased by 31.84% in the

year 2016-17 and again decreased by 39.11% in the year.

 The earnings per share of the company for the year 2013-14 is 32.90, 2014-15

is 40.79, and 2015-16 is 24.82, 2016-17 is 20.32, and 2017-18 is 13.87. The

earnings per share has increased by 23.98% in the year 2014-15, and

84
 decreased by 39.15% in the year 2015-16 and again decreased by 18.13% in

the year 2016-17 and again decreased by 31.74% in the year 2017-18.

 The return on capital employed of the company for the year 2013-14 is 16.87,

2014-15 is 26.80, and 2015-16 is 24.74, 2016-17 is 28.35 and 2017-18 is 0.64.

The return on capital employed has increased by 58.87% in the year 2014-15,

and decreased by 7.69% in the year 2015-16 and increased by 14.59% in the

year 2016-17 and again decreased by 97.74% in the year.

 The return on net asset value of the company for the year 2013-14 is 106.65,

2014-15 is 145.63, and 2015-16 is 96.74, 2016-17 is 116.16, and 2017-18 is

130.16. The net asset value has increased by 36.55% in the year 2014-15, and

decreased by 33.57% in the year 2015-16 and again increased by 20.01% in

the year 2016-17, and again increased by 12.05% in the year 2017-18.

 The debt equity ratio of the company for the year 2013-14 is 0.32, 2014-15 is

0.29, and 2015-16 is 0.14, 2016-17 is 0.27, and 2017-18 is 0.28. The debt

equity ratio has decreased by 9.38% in the year 2014-15, and decreased by

51.72% in the year 2015-16, increased by 92.29% in the year 2016-17 and

again increased by 3.70% in the year 2017-18.

 The proprietary ratio of the company for the year 2013-14 is 0.75, 2014-15 is

0.78, and 2015-16 is 0.88, 2016-17 is 0.79, and 2017-18 is 0.78. The

proprietary ratio has increased by 4.00% in the year 2014-15, and increased by

11.54% in the year 2015-16 and decreased by 10.23% in the year 2016-17 and

again decreased by 1.27% in the year 2017-18.

 The total assets to debt ratio of the company for the year 2013-14 is 4.08,

2014-15 is 4.58, and 2015-16 is 8.29, 2016-17 is 8.71, and 2017-18 is 4.50.

The total asset ratio has increased by 12.25% in the year 2014-15, and

85
 increased by 81.00% in the year 2015-16 and decreased by 43.18% in the year

2016-17 and again decreased by 4.46% in the year 2017-18.

 The liabilities to equity ratio of the company for the year 2013-14 is 4.08,

2014-15 is 4.58, and 2015-16 is 8.29, 2016-17 is 8.71, and 2017-18 is 1.28.

The liabilities to equity ratio has decreased by 3.03% in the year 2014-15, and

decreased by 10.94% in the year 2015-16 and increased by 11.40% in the year

2016-17 and again increased by 0.79% in the year 2017-18.

 The fixed asset turnover ratio of the company for the year 2013-14 is 1.35,

2014-15 is 1.36, and 2015-16 is 1.27, 2016-17 is 0.93, and 2017-18 is 0.94.

The fixed asset turnover ratio has increased by 0.70% in the year 2014-15, and

decreased by 6.62% in the year 2015-16 and again decreased by 26.77% in the

year 2016-17 and increased by 1.07% in the year 2017-18.

 The net worth turnover ratio of the company for the year 2013-14 is 4.08,

2014-15 is 4.58, and 2015-16 is 8.29, 2016-17 is 8.71, and 2017-18 is 0.84.

The net worth turnover ratio has decreased by 3.15% in the year 2014-15, and

decreased by 21.14% in the year 2015-16 and decreased by 11.34% in the year

2016-17 and again decreased by 2.32% in the year 2017-18.

 The working capital turnover ratio of the company for the year 2013-14 is -

4.35, 2014-15 is -8.51, and 2015-16 is -9.85, 2016-17 is -12.66, and 2017-18

is 6.80. The working capital turnover ratio has decreased by 95.63% in the

year 2014-15, and decreased by 15.75% in the year 2015-16 and again

decreased by 28.53% in the year 2016-17 and increased by 153.71% in the

year 2017-18.

 The PBDIT ratio of the company for the year 2013-14 is 41.79%, 2014-15 is

35.11%, and 2015-16 is 42.36%, 2016-17 is 35.89%, and 2017-18 is 32.28%.

86
 The PBDIT ratio has decreased by 15.98% in the year 2014-15, and increased

by 20.65% in the year 2015-16 and decreased by 15.27% in the year 2016-17

and again decreased by 10.05% in the year 2017-18.

 The PBIT ratio of the company for the year 2013-14 is 28.47%, 2014-15 is

25.17%, and 2015-16 is 30.85%, 2016-17 is 23.76%, and 2017-18 is 18.06%.

The PBIT ratio has decreased by 11.59% in the year 2014-15, and increased

by 22.57 in the year 2015-16, decreased by 22.98% in the year 2016-17 and

decreased by 23.98% in the year 2017-18.

 The PBIT ratio of the company for the year 2013-14 is 26.71%, 2014-15 is

23.75%, and 2015-16 is 29.92%, 2016-17 is 23.00% and 2017-18 is 16.80%.

The PBT ratio has decreased by 11.08% in the year 2014-15, and increased by

25.99% in the year 2015-16 and again decreased by 23.12% in the year 2016-

17 and decreased by 26.97% in the year 2017-18

 The net profit ratio of the company for the year 2013-14 is 24.24%, 2014-15 is

22.74%, and 2015-16 is 26.47%, 2016-17 is 20.30% and 2017-18 is 12.66.

The net profit ratio has decreased by 6.19% in the year 2014-15, and

decreased by 16.40% in the year 2015-16 and again decreased by 23.31% in

the year 2016-17 and decreased by 37.63% in the year 2017-18.

 The net profit ratio of the company for the year 2013-14 is 12.77, 2014-15 is

12.46, and 2015-16 is 7.03, 2016-17 is 13.32 and 2017-18 is 18.11. The net

profit ratio has decreased by 2.43% in the year 2014-15, and decreased by

43.57% in the year 2015-16 and increased by 89.47% in the year 2016-17 and

again increased by 35.96%.

 The market price to NAV ratio of the company for the year 2013-14 is 3.94,

2014-15 is 3.49, and 2015-16 is 1.80, 2016-17 is 2.33 and 2017-18 is 2.10.

87
 The market price to NVA ratio has decreased by 11.42% in the year 2014-15,

and decreased by 48.42% in the year 2015-16 and increased by 29.44% in the

year 2016-17 and decreased by 9.87% in the year.

 The market capitalization ratio of the company for the year 2013-14 is

79787.40, 2014-15 is 96485.15, and 2015-16 is 66304.35, 2016-17 is

102798.33 and 2017-18 is 103785.67. The market capitalization ratio has

increased by 20.93% in the year 2014-15, and decreased by 31.28% in the year

2015-16 and increased by 55.04% in the year 2016-17 and increased by 0.96%

in the year 2017-18.

88
SUGGESTIONS

89
 SUGGESTIONS

1. The company should maintain an adequate cash and bank balance in order to

meet the emergency requirements.

2. The current ratio of the company has decreasing year to year. The company must

utilize their current asset accurately.

3. The sales of the company go on increasing better to increase sales for more profit

in future.

4. Net profit of the company has decreased when compare to last year. Better to

decrease the unnecessary expenses of the company to increase the profit.

5. The Net working capital of the company has negative. Shows excess of current

liabilities over current assets. It must positive for future years.

6. Loans of the company increasing in year 2016 compare to previous year, it shows

that the profit was distributed to the interest, better it should not the same for next

year.

7. Better to maintain the same amount of fixed assets in future for full utilize fixed

assets.

8. Allowing debt for long period by company shows it is not strict in its debt

collection. Better it should collect its debt as early.

9. Better to maintain high return on share holder’s investments.

10. Better to curtail the debenture interest to avoid paying interest.

11. For the smooth operation of the company if must make sure that it is made liquid

in the coming year, because right now a lot rests on the operation of the business.

90
CONCLUSION

91
 CONCLUSION

The company has been doing their activity effectively and efficiently. The company

has a sound long term solvency. The company can rise from the financial crush it is

in right now by taking proper steps to increase its sales of production and to minimize

cost by maximize utilization of resources. A already known there is a thin line

between profitability and liquidity and the company lost two years made a profit has

very low and another two making better profit. This shows the company in a good

position and the management of the company has much as better so that does way

maintain the market leadership.

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BIBLIOGRAPHY

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 BIBLIOGRAPHY
 Pandey, I.M. (2001), “Financial Management (Eighth Revised

Edition)”,Vikas Publishing House Pvt. Limited, New Delhi.

 Pandey, I.M. (1987), “Financial Management”, Vikas Publishing House Pvt.

Limited, New Delhi.

 Porterfield (1965), “Investment Decisions and Capital Costs”, Prentice Hall, Engle

Wood Cliffs, N.J.

 Porwal, L.S.(1976), “Capital Budgeting in India”, Sultan Chand and Sons, New

Delhi.

 Khan M.Y. and Jain, P.K. (1992), “Financial Management: Text and Problems”,

Tata

 McGraw-Hill Publishing Company Limited, New Delhi.

 Kothari, C.R. (1991), “Research Methodology: Methods and Techniques”, Willey

Eastern

 Limited.

 Kuchhal, S.C. (1986), “Corporate Finance: Principles and Problems”, Chaitanya

 Annual Reports of Accor Groups 2014-2018.

 Departmental Records.

Websites:

 http://www.moneycontrol.com/financials/muthootfinance/balance-

sheet/MF10

 http://www.muthootfinance.com/investors/annual-reports

 http://www.muthootfinance.com/investors/financial-reports

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