TABLE OF CONTENT

CHAPTER PARTICULAR PAGE NO

LIST OF TABLES
LIST OF CHARTS
ABSTRACT
I 1.1 INTRODUCTION
1.2 SCOPE OF THE STUDY
1.3 OBJECTIVE OF THE STUDY
1.4 NEED OF THE STUDY
II 2.1 COMPANY PROFILE
2.2 INDUSTRIAL PROFILE
III REVIEW OF LITERTATURE
IV 4.1 RESEARCH METHODOLOGY
4.2 RESEARCH DESIGN
4.3 DATA COLECTION
4.4 SAMPLING
V DATA ANALYSIS INTERPRETATION
AND REFERENCE
VI 6.1 FINDINGS
6.2 SUGGESTION
6.3 CONCLUSION
BIBLIOGRAPHY AND REFERENCE
ANNEXURE
 LIST OF TABLES

S.NO PARTICULARS PAGE NO

5.1 CURRENT RATIO

5.2 ABSOLUTE LIQUIDITY RATIO

5.3 QUICK RATIO

5.4 LEVERAGE RATIO

5.5 LONG TERM DEBT TO SHAREHOLDER NETWORTH

5.6 FIXED ASSET RATIO

5.7 FIXED ASSET TO NETWORTH

5.8 ACTIVITY RATIO

5.9 FIXED ASSET TURNOVER RATIO

5.10 CURRENT ASSET TURNOVER RATIO

S.NO PARTICULARS PAGE NO

5.1 CURRENT RATIO

5.2 ABSOLUTE LIQUIDITY RATIO

5.3 QUICK RATIO

5.4 LEVERAGE RATIO

5.5 LONG TERM DEBT TO SHAREHOLDER NETWORTH

5.6 FIXED ASSET RATIO

5.7 FIXED ASSET TO NETWORTH

5.8 ACTIVITY RATIO

5.9 FIXED ASSET TURNOVER RATIO

5.10 CURRENT ASSET TURNOVER RATIO

ABSTRACT
The study entitled the financial performance analysis an Company. The objective of this
study is to compare the current financial performance with last three years and to study the
existing financial position of Company. The data used in this study is secondary data through
annual report. The data that used in this study, comparative balance sheet, common size
balance sheet, comparative balance sheet analysis ,that the current liabilities is higher than the
current asset in every year and it is to be suggest that the company can concentrate on their
increasing the level of the current asset. So the company improves as net present value (NPV)
and internal rate this financial position. The study of financial performance on The Company
has revealed the great deal of their various financial aspects for three years. The comparative
analysis unlocks the overall performance methodology. One of the most common ways to
analyze financial data is to calculate ratios from the data to compare against those of other
companies or against the company's own historical performance. The return on assets (ROA)
is a common ratio used to determine how efficient a company is at using its assets and as a
measure of profitability. This ratio could be calculated for several similar companies and
compared as part of a larger analysis.
Financial analysis can be conducted in both corporate finance and investment finance
settings. In corporate finance, the analysis is conducted internally, using such rf return (IRR)
to find projects worth executing. A key area of corporate financial analysis involves
extrapolating a company’s past performance, such as gross revenue or profit margin, into an
estimate of the company’s future performance. This allows the business to forecast budgets
and make decisions based on past trends, such as inventory levels.
A top-down approach first looks for macroeconomic opportunities, such as high-performing
sectors, and then drills down to find the best companies within that sector. A bottom-up
approach, on the other hand, looks at a specific company and conducts similar ratio analysis
to corporate financial analysis, looking at past performance and expected future performance.
 CHAPTER I

CHAPTER-1
 1.1 INTRODUCTION

The project which is entitled as “A STUDY OF FINANCIAL PERFORMANCE

ANALYSIS OF ROTORK PRIVATE LIMITED”. The project is undertaken with the aim
of getting a clear picture about the company and the industry so as to study the financial
performance of the company. Financial Performance in broader sense refers to the degree to
which financial objectives being or has been accomplished and is an important aspect of
Financial Risk Management. The purpose of financial analysis in the present study helps to
diagnose the information contained in financial statements. It also helps to judge the
profitability and financial soundness of the firm. Typically, financial analysis is used to
analyse whether an entity is stable, solvent, liquid or profitable enough to be invested in.
when looking at a specific company, the financial analyst will often focus on the income
statement, balance sheet and cash flow statement. In addition, one key area of financial
analysis involves extrapolating the company’s past performance into an estimate of the
company’s future performance. Finance is defined as the administrative function in an
organization which relate with the arrangement of cash and credit to the organization to carry
out its objectives as satisfactory as possible. Financial analysis refers to an assessment of the
of the viability, stability and profitability of a business, sub-business or project.

The purpose of financial analysis in the present study helps to diagnose the information
contained in financial statements. It also helps to judge the profitability and financial
soundness of the firm. Financial analysis can be conducted in both corporate finance and
investment finance settings. In corporate finance, the analysis is conducted internally, using
such ratios as net present value (NPV) and internal rate of return (IRR) to find projects worth
executing.

A key area of corporate financial analysis involves extrapolating a company’s past

performance, such as gross revenue or profit margin, into an estimate of the company’s
future performance. This allows the business to forecast budgets and make decisions based on
past trends, such as inventory levels. A top-down approach first looks for macroeconomic
opportunities, such as high-performing sectors, and then drills down to find the best
companies within that sector. A bottom-up approach, on the other hand, looks at a specific
company and conducts similar ratio analysis to corporate financial analysis, looking at past
performance and expected future performance as investment indicator.The focus of financial
analysis is on key figures in the financial statement and the significant relationship that exist
between them. The analysis of financial analysis is a process of evaluating relationship
between component parts of financial statement to obtain a better understanding of the
firm’s position and performance.

Financial analysis is the process of evaluating businesses, projects, budgets and other finance-
related entities to determine their performance and suitability. Typically, financial analysis is
used to analyze whether an entity is stable, solvent, liquid or profitable enough to warrant a
monetary investment. When looking at a specific company, a financial analyst conducts
analysis by focusing on the income statement, balance sheet and cash flow statement.
Financial analysis is used to evaluate economic trends, set financial policy, build long-term
plans for business activity, and identify projects or companies for investment. This is done
through the synthesis of financial numbers and data.
One of the most common ways to analyze financial data is to calculate ratios from the data to
compare against those of other companies or against the company's own historical
performance. For example, return on assets (ROA) is a common ratio used to determine how
efficient a company is at using its assets and as a measure of profitability. This ratio could be
calculated for several similar companies and compared as part of a larger analysis. Financial
statements are formal record of the financial activities of a business, person or other entity
and provide an overview of a business or person’s financial condition in both short and long
term. They give an accurate picture of a company’s condition and operating results in a
condensed form. Financial statements are used as a management tool primarily by company
executive and investor’s in assessing the overall position and operating results of the
company

Financial statements are formal record of the financial activities of a business, person or
other entity and provide an overview of a business or person’s financial condition in both
short and long term. They give an accurate picture of a company’s condition and operating
results in a condensed form. Financial statements are used as a management tool primarily
by company executive and investor’s in assessing the overall position and operating results
of the company

Financial performance analysis describes the methods that those examining the affairs of a
business use to evaluate and assess its financial activity.Financial performance refers to the
overall financial health of the business. All businesses take financial assets, which come in
many forms, and use them to support business activity, which generates revenue and
ultimately, profits.
 1.2 SCOPE OF THE STUDY:

Financial analysis can help evaluate a company’s profitability by assessing key metrics such
as gross profit margin, operating profit margin, and net profit margin.

 It analyses revenue, expenses, and profitability ratios to understand the company’s

ability to generate profits from its operation.

 Major scope of this study is to find out the financial strength and weakness of the
firm from analyzing the financial statements.

 Evaluating a company’s financial ratios to assess profitability, solvency, working

capital management, liquidity, and operating effectiveness.

 Compare current performance with historical conditions using trend analysis.

 1.3 OBJECTIVE OF THE STUDY:

Primary objective:
 To evaluate the financial performance and company financial health.

Secondary objective:

 To evaluate financial position of the company in terms of solvency, profitability,

liquidity and efficiency.

 To understand, analyses and to suggest methods of improving profitability

management.

 To identify the key factors affecting the profitability.

+++++To identify the financial strength and weakness of the company.

 To analyses the future earnings of the company, based on these give the various
suggestion

 The financial statement analysis are to assess financial performance, evaluate the
financial position, identify trends and patterns, measure liquidity and solvency, and
make informed decisions based on the analysis of financial statements.
 1.4NEED OF THE STUDY:

 To evaluate business, project, budgets and other finance related transactions to

determine their performance and suitability

 The financial analysis is done to analyse whether an entity is stable, solvent, liquid.

 Financial statements provide a snapshot of a corporation’s financial health, giving

insight into its performance, operations, and cash flow.

 Financial statement provide information about a company’s revenue, expense,

profitability.
CHAPTER II

CHAPTER-II
 2.1 COMPANY PROFILE

ROTORK CONTROLS (INDIA) LTD-CHENNAI

About Rotork
Rotork Specialises in the provision of actuators and flow control equipment that has been
carefully developed based on more than 60 years of experience serving the water industry and
in-depth knowledge of the unique challenge it faces. The Rotork group consists of four
specialist actuation and flow control divisions, as well as the global rotork site service unit
that carries out a wide variety of scheduled and emergency support procedures such as
retrofitting, inspections, overhauls and preventative maintenance operations. More extensive,
large-scale projects can be also be conducted when required in accordance with customers
individual needs. Rotork Controls (India) Private Limited is an unlisted private company
incorporated on 16 July, 1979. It is classified as a private limited company and is located in
Chennai, Tamil Nadu. It's authorized share capital is INR 1.50 cr and the total paid-up capital
is INR 1.00 cr.Rotork Controls (India)'s operating revenues range is INR 100 cr - 500 cr
for the financial year ending on 31 March, 2023. It's EBITDA has increased by 28.91 %
over the previous year. At the same time, it's book networth has decreased by -10.59 %. The
last reported AGM (Annual General Meeting) of Rotork Controls (India) Private Limited, per
our records, was held on 21 September, 2023.

Rotork Controls (India) Private Limited has three directors - Jonathan Mark Davis, Senthil
Kumar Ramanathan, and others. The Corporate Identification Number (CIN) of Rotork
Controls (India) Private Limited is U28990TN1979PTC007891. The registered office of
Rotork Controls (India) Private Limited is at 28B, Ambattur Industrial Estate (North),
Chennai, Chennai, Tamil Nadu. He current status of Rotork Controls (India) Private Limited
is - Active
Description:

The company is a manufacturer of electric actuators, fluid power actuators & power actuators

Products & Services:

Electric actuators, fluid power actuators

Category:

Manufacturer

DEPARTMENT:
 Finance
 Human Resource
 Quality
 Production
 Engineering
 Purchase
 Site service team

Rotork Purpose, Vision and Value:

Purpose
Our purpose’ keeping the world flowing for future Generation’, is the reason we exist and
helps guide both our culture and our values. It is a powerful motivation, encouraging us to
make a positive difference to people’s lives not just today, but also in the future.

The quality of our products and services help our customers around the world to improve
efficiency, assure safety and reduce environmental impact while providing vital resources to
those who needs them.

Our purpose is core to our strategy and with committed leadership and investment, we are
driving sustained profitable growth.

vision
To be the leader in intelligent flow control.
Our vision helps define where we are going. Our success flows from our commitment to
engineering excellence.

Values
Our values guide how we work together to support our customers and partners on a daily
basis. They define our behaviours and help us to deliver a high performing culture.
They describe what is important to us to ensure our culture is consistent wherever we
operate in the world. They represent how we should behave in order for Rotork to be
successful.

 Stronger Together
 Always Innovating
 Trusted Partner

Our values demonstrate what’s important to us to help achieve our Growth+ strategy and
our vision by working together as one global team.

Product and services:

 Electric actuators
 Pneumatic & Hydraulic Actuators
 Process control Actuators
 Gearboxes & Accessories
 Instrumentation & control
 Pneumatic Valves & Manifolds
 Services & Support
PRODUCT AND SERVICES
 2.2 INDUSTRY PROFILE

Rotork creates value in the industrial equipment and transportation industries provide value
for the end user through the safe and accurate operation of our flow control solutions. Our
specialist knowledge for isolation, control and flow regulation of liquids and gases provide an
essential element in the operation and protection of equipment and machinery. In heavy
industries such a shipbuilding, especially for transportation vessels such as liquefied natural
gas (LNG) carriers, chemical tankers and very large crude carriers (VLCC), Rotork’s position
as an industry leader in the oil and gas sector provides a recognised name to end users for
critical flow control and safety.

In both transportation of goods and people by rail or commercial vehicles, Rotork products
are trusted to operate continuously in critical safe applications. For large stationary rotating
machinery such as engines, turbines, pumps and compressors, that are used in the oil and gas,
power and water industries Rotork products are chosen for their suitability to operate reliably
and accurately in high vibration and high temperature environments. Rotork’s solutions and
products are used in a variety of applications across the industrial sector ranging from
Industrial and factory equipment, to transportation and machinery.

2.1 HISTORY OF THE COMPANY:

The 2020s

On 1st January 2020 Rotork moved to a new market structure. We had previously worked in
line with four divisions; Rotork Controls, Rotork Instruments, Rotork Gears and Rotork Fluid
Systems. The move to the new structure of Oil & Gas, Water & Power, and Chemical,
Process & Industrial (CPI) allowed a focus on strategic relationships with customers, directly
meeting their needs. Rotork’s service structure underwent a significant change with the
launch of Lifetime Management, the suite of services within Rotork Site Services which help
customers manage the risk associated with ageing assets and to support a reliable operation
that is always available and up to date. In 2021, Intelligent Asset Management, a cloud-based
asset management system to reduce unplanned downtime, was launched. In early 2022,
Rotork extended backwards compatibility of the IQ3 actuator to the 1960s with the launch of
IQ3 SET. This manages obsolescence concerns by replacing legacy actuators with the latest
intelligent actuator platform.

At the beginning of 2023, Rotork launched its Reliability Services programme, a new three-
tiered approach to managing maintenance. In May 2023, Rotork introduced a compact and
robust quarter-turn design to its Skilmatic SI range of self-contained electro-hydraulic
actuators. In August, Rotork launched the new IQ3 Pro and Rotork App, which allows the
actuator to be configured and commissioned using the app. In the same month, Rotork
acquired Hanbay, a manufacturer of miniature electric actuators for small valves and
instrument valves. At the beginning of 2024, we added new features to our IQ3 Pro range,
which included increased speeds for the IQT3F Pro, independent open/close speeds for part-
turn models and closed-loop control for multi-turn and part-turn actuators.

The 2010s

Six new acquisitions were made in 2011 alone, allowing expansion into instrumentation and
control solutions. The new ideas and innovation continue. In 2012, Rotork launched the IQ3,
which is the most robust actuator in the industry, capable of providing exceptional reliability.
In 2015, the CK range of stockable modular electric valve actuators was launched. In 2019,
the Rotork Master Station was launched; it can operate up to 240 actuators in a single loop
from an intelligent control centre with a simple to use interface.

Rotork continued to evolve and expand. We are always innovating to drive progress and
support our customers, providing pioneering, high quality and dependable solutions for
managing the flow of liquids, gases and solids across a wide range of industries and markets.
The 2000s

The new millennium began with an office in Shanghai and the launch of the IQ Mk2 - a non-
intrusive, intelligent multi-turn actuator. In 2002, the Rotork Malaysia manufacturing
company was established, following the sales company that had been established in that
region seven years earlier. New offices were opened in China, Germany, Japan, Brazil and
the Middle East.

A large number of acquisitions during this time helped fuel the expansion of Rotork’s flow
control products and services into new markets. Among these acquisitions were Skilmatic in
the UK (to develop innovative electro-hydraulic fail-safe actuators), Omag in Italy (to gain
entrance to the strategic valve making industry in Italy) and Remote Control in Sweden (to
extend Rotork’s product offering of pneumatic actuators and control systems).

The 1990s

The 1990s saw increased international growth. In 1991, Rotork was established in The
Netherlands and this was soon followed by Rotork Hong Kong and Venezuela in 1993,
Rotork Beijing in 1995, the Rotork Malaysia sales company and Rotork Thailand in 1997,
Rotork Moscow in 1998 and Rotork Japan in 1999. Following these expansions, Rotork had
subsidiaries in 18 countries worldwide. In 1999 Rotork acquired Italian company Fluid
Systems Srl, which opened the doors to the fluid power actuator industry. Further investment
in the Rotork Gears Division began in 1993 with the completion of the purchase of Exeeco, a
gearbox company. In 1992, significant innovation saw the release of the IQ range. The IQ
Range electric actuator enabled commissioning without removing any electrical covers,
allowing for commissioning in wet or hazardous areas.

The 1980s

The expansion into new territories continued into the 1980s. New offices opened in Canada,
Spain, Singapore, Korea and Australia, making Rotork one of the biggest companies in the
industrial flow control arena. In 1983, the A Range 1600 Series was launched; it was the first
Syncropak actuator with electronic control circuitry. This was followed by the AQ Range in
1985, a quarter-turn actuator compatible with the A Range 1600 Series. In 1986 the first
dedicated bus control system for actuators, Pak scan, was released.

The 1970s

A significant development for Rotork in the 1970s was the development of double O-ring
sealing. This was an innovative and revolutionary idea which prevented the ingress of water
into an actuator. The idea came from Rotork founder Jeremy Fry’s trip to the Middle East; he
noticed that moisture formed inside actuators because temperatures were very hot during the
day and cold during the night. This design inspired by this added an extra layer of sealing
which protected the circuitry inside in a way that single layers of sealing could not. It is still
used to this day. 1971 saw the establishment of Rotork Italy, further solidifying our presence
in the European market. There were new opportunities born out of a joint venture with Best
& Crompton of India. By the end of the decade, there were additional Rotork offices in
Germany and India, while the acquisition of the US company Evans helped to further expand
the Rotork brand across North America.

The 1960s

The 1960s began with the establishment of Rotork France and the launch of the A Range
Syncropak; a multi-turn actuator with standard control circuitry. A contract with the French
Atomic Energy Authority helped to cement Rotork as a major force with European and
American contractors and valve makers.

1961 saw the construction of the Brass mill Lane manufacturing plant in Bath, UK. This
remains the headquarters for Rotork today. Developments continued in the latter half of the
decade, including; Rotork Inc. established in Babylon, USA in 1967; license agreements with
Shimadzu; changing from a private to public limited company in 1968; the acquisition of
Electro Power Gears in 1969. Rotork was launched on the London Stock Exchange as Rotork
Controls Ltd in 1968.

The 1950s

In 1957 Rotork Engineering Company Ltd first began trading with the launch of our first
actuator; the 100A. In 1959 the 100A Mk2 was released, which enhanced the design and
worked electrically to open valves which would otherwise have been operated by hand.
During those formative years Rotork began receiving orders from the Kuwait Oil Company,
which led to contracts with some of Esso’s refineries and substantial orders from Shell.
CHAPTER-III
 CHAPTER – III
REVIEW OF LITERATURE

INTRODUCTION

Review of Literature refers to the collection of the results of the various researches relating to
the present study. It takes into consideration the research of the previous researchers which
are related to the present research in any way. Here are the reviews of the previous researches
related with the present study.

AN OVERVIEW OF EARLIER STUDIES

Bollen (2021)

conducted a study on Ratio Variables on which he found three different uses of ratio
variables in aggregate data analysis: (1) as measures of theoretical concepts, (2) as a means to
control an extraneous factor, and (3) as a correction for heteroscedasticity. In the use of ratios
as indices of concepts, a problem can arise if it is regressed on other indices or variables that
contain a common component. For example, the relationship between two per capita
measures may be confounded with the common population component in each variable.
Regarding the second use of ratios, only under exceptional conditions will ratio variables be a
suitable means of controlling an extraneous factor. Finally, the use of ratios to correct for
heteroscedasticity is also often misused. Only under special conditions will the common form
forgers soon with ratio variables correct for heteroscedasticity . Alternatives to ratios for each
of these cases are discussed and evaluated

Cooper (2015)

Conducted a study on Financial Intermediation on which he observed that the quantitative

behavior of business-cycle models in which the intermediation process acts either as a source
of fluctuations or as a propagator of real shocks. In neither case do we find convincing
evidence that the intermediation process is an important element of aggregate fluctuations.
For an economy driven by intermediation shocks, consumption is not smoother than output,
investment is negatively correlated with output, variations in the capital stock are quite large,
and interest rates are procyclical. The model economy thus fails to match unconditional
moments for the U.S. economy. We also structurally estimate parameters of a model
economy in which intermediation and productivity shocks are present, allowing for the
intermediation process to propagate the real shock. The unconditional correlations are closer
to those observed only when the intermediation shock is relatively unimportant.
Gerrard (2013)

conducted a study on The Financial Performance on which he found that Using ratio analysis
the financial performance of a sample of independent single-plant engineering firms in Leeds
is examined with regard to structural and locational differences in establishments. A number
of determinants of performance are derived and tested against the constructed data base.
Inner- city engineering firms perform relatively less well on all indicators of performance
compared with outer-city firms. The study illustrates the importance of using different
measures of performance since this affects the magnitude and significance of the results.
Financial support is necessary to sustain engineering in the inner city in the long run.

Schmidgall (2015)

conducted a study on Financial Analysis Using the Statement of Cash Flows on which he
observed that Managers use many financial ratios to judge the health of their businesses.
With the recent requirement of a statement of cash flow (SCF) by the Financial Accounting
Standards Board, managers now have a new set of ratios that will give a realistic picture of
the business. The ratios include cash flow-interest coverage, cash flow-dividend coverage,
and cash flow from operations to cash flow in investments. These ratios are particularly
useful because they show changes in a hotel or restaurant's cash position over time. rather
than at a given moment, as is the case with many other ratios.

Murinde (2003)

conducted study on Corporate Financial Structures on which he observed that the financial
structure of a sample of Indian non-financial companies using a new and unique dataset
consisting of a panel containing the published accounts of almost 900 companies that
published a full set of accounts every year during 1989-99. In a new departure in the
literature, the dataset includes quoted and unquoted companies. We compare the sources-uses
approach to analyzing company financial structures with the asset-liability approach. We use
both approaches to characterize and to compare the financial structures of Indian companies
over time; between quoted and unquoted companies; and between companies which belong to
a business group and those that do not. Finally, we compare our results to those obtained
previously for India and for the industrial countries

.
Taylor, R k (2006)

In his study mentions that financial statements as the aid towards financial analysis. He
indicates that the financial statements help the business organization in having some
extremely useful information in the form of balance sheet which mirrors the financial
position on a particular date in terms of the structure of assets, liabilities and owner's equity
and the profit and loss account which shows the result of operations during a certain period of
time, in terms of therevenue obtained and the cost incurred during the year. Thus the financial
statements provide a summarized view of the financial position and operations of a firm.

Collis and Jarvis (2002)

states that this may indicate that small companies experience problems in gaining access to
appropriate benchmarks, but could also be the results of competitors filing abbreviated
accounts which reduces the amount of information available for calculating ratio and making
comparison. In addition, as many small companies operate in the service sector, they occupy
niche markets and may be less concerned with competition than those in other markets.

JhaSuvita, Hui Xiaofeng (2012)

mentions that to analyze the financial performance of different ownership structured

commercial banks in Nepal based on their financial characteristics and identify the
determinants of performance of the banks with help of financial ratios. The performance
evaluation of banks is important for all parties including depositors, investors, bank managers
and regulators. The evolution of a firm's performance usually employs the financial ratio
method, because it provides a simple description about the firm's financial performance in
comparison with previous periods and helps to improve its performance of management.

Pai, Vadivel & Kamala (1995)

studied about the diversified companies and financial performance. Main purpose of research
was to found out the relationship between the diversified firms and their financial
performance. For the purpose of research, they have selected seven large firms and analyzed
those firm which different products-both related and otherwise-in their portfolio and
operating in diverse industry. In this study, a set of performance measures / ratios 49 was
employed to determine the level of financial performance and variation in performance from
one firm to another has been observed and statistically established. They revealed that the
diversified firms studied have been healthy financial performance.
Lina Warrad and Dr. Raina AI Omari (2015)

Studies about the impact of the activity ratios on the financial performance analysis. He tells
that most professional analysts and investors tend to focus on Return on Asset (ROA) as their
primary measure of firm performance. He also indicates that ROA is a better metric of
financial performance than income statement profitability measures like return on
sales(ROS). Return on asset explicitly takes into account the assets used to support business
activities. It determines whether the company is able to generate an adequate profit on its
assets rather than simply showing return on sales(ROS).

Curtis C. Versoor

Mention that financial performance and an emphasis on ethical as an aspect of corporate

governance report that, this is the first study to demonstrate a link between overall
performance and emphasis on ethics as an aspect of corporate governance. It identifies the
26.8% of the 500 large US public corporation in their annual reports to shareholders, commit
to ethical behavior towards their stakeholders or emphasis compliance with their code of
conduct.
CHAPTER IV
 CHAPTER-IV
4.1 RESEARCH METHODOLOGY

METHODLOGY OF THE STUDY:

Research is essentially a logical and an organized enquiry seeking facts through objective
verifiable methods in order to discover the relationship among them and to refer from the
board principles or laws. It is really a method of critical thinking. Research may be defined as
a systematic and objective analysis and recording of controlled observation that may land to
the development of generalization of principles and theories resulting in prediction and
possibly ultimate control of events. Methodology is often used in a narrow sense to refer to
methods, technology or tools employed for the collection of data as well as its processing.
This is also used sometimes to designate data collected to been done. It provides answers to
some of the major questions while search like what must be done, how it will be done, what
data will be needed, what data gathering devices will be employed, how sources of data will
be analyzed at the conclusion.

4.2 RESEARCH DESIGN:

The success of a study depends largely on the methodology used. The appropriate
methodology will improve the validity of the findings. For the purpose of getting data both
primary and secondary sources are used. The present study is mainly based on secondary
data. Primary data also used where the secondary data need more explanation. Secondary
data was collected from the documents, which were in printed forms like annual reports,
books of accounts, records of the company, broachers, magazines, references books based on
financial management and websites. The research approach is a plan and procedure that
consist of the steps of broad assumptions to detailed method of data collection, analysis, and
interpretation. It is therefore, based on the nature of the research problem being addressed.
The two basic research approaches are quantitative and qualitative research. Both types have
different purposes. Quantitative research is statistics based. It involves questions that can best
be answered in numbers. Qualitative research is descriptive in nature, because it generally
deals with non-numerical and unquantifiable things. Quantitative research is much more
numbers-driven. The emphasis is on the collection of numerical data. The conclusion then
makes inferences based on that data. The research design refers to the overall strategy that
you choose to integrate the different components of the study in a coherent and logical way,
thereby, ensuring you will effectively address the research problem; it constitutes the
blueprint for the collection, measurement, and analysis of data. It is the set of methods and
procedures used in collecting and analyzing measures of the variables specified in the
problem research.

DATA ANALYSIS TOOL:

The main analysis used here are:

 Liquidity ratio
 Leverage ratio
 Proprietary ratio
 Long term debt to shareholder net worth
 Fixed assets etc

4.3 DATA COLLECTION:

Main data for our project are the annual financial reports. When we measurement the ratio
analysis for any company, we must be used in annual financial report. We have also used
four main financial statements for ratio analysis of selected private commercial banks such as
balance sheets, an income statement, cash flow statement, statement of shareholder’s equity.

DIFFERENT TYPE OF RESEARCH METHODS:

Success of conducting research depends over the result that is gained by the researcher at the
end of the research. These obtained results are affected by the used methods to conduct
research. In this way, there are Two Types of Methods

A) Primary Method

B) Secondary Method

A) Primary Method:

All the data that are collected at first time are included under the primary data collection
method. Three approaches or methods are comprised under the primary data methods such as:

1. Observation method

2. In-depth interview and

3. Survey through questionnaire.

B) Secondary Method:

Secondary Data Collection Method Data that are collected on the basis of previous data or
research is included under the secondary data collection method. In this way, several types of
approaches can be used such as:

1. Case study

2. Documentation review

3. Articles4. Projects etc

Research Methodology used in this Project:

The study is based on only secondary data. In the case study approach of the secondary data
collection method, I have collected the data from annual reports, analyzed information which
is available on web sites of Rotork controls India pvt. Ltd.

Research Methodology-

The study is based on secondary data which have been collected from:

(1) Annual Reports of the company

(2) Articles and Research papers

(3) Internet

(4) Books.

4.4 SAMPLING
Sampling design is a mathematical function that gives you the probability of any given
sample being drawn. Since sampling is the foundation of nearly every research project, the
study of sampling design is a crucial part of statistics, and is often a one or two semester
course. The main types of probability sampling methods are simple random sampling,
stratified sampling, cluster sampling, multistage sampling, and systematic random sampling.
The key benefit of probability sampling method is that they guarantee that the sample chosen
is representative of the population. A sample design is the framework, or road map, that
serves as the basis for the selection of a survey sample and affects many other important
aspects of a survey as well. ... the sample design provides the basic plan and methodology for
selecting the sample. A sample design can be simple or complex

Sample size

Total population of the project is 100. The sample size of my project is 50 persons.
CHAPTER V

CHAPTER-5
 DATA ANALYSIS, INTERPRETATION AND REFERENCE

A. LIQUIDITY RATIO

CURRENT RATIO

+ CURRENT RATIO = CURRENT ASSET

CURRENT LIABILITY

TABLE NO:5.1
Year Current assets Current liability Current ratio

2019-2020 3216438322 2425494833 1.32

2020-2021 3590324287 4074616672 0.88

2021-2022 3458249026 3989799577 0.87

2022-2023 3377137661 3929060792 0.85

SOURCE: PRIMARY DATA

CHART NO: 5.1

0.85 1.32

0.87 0.88 2019-2020

2020-2021
2021-2022
2022-2023

INTERPERTATION:
From the above table its clear the quick ratio with value 1.32 in the year 2020 is higher and
the rest of year it is near standard value one. The quick ratio is highest for the year 2020
because of decrease in current liability. That is advanced due by value for the year 2020 is
less as compared to other years.

B. LIQUIDITY RATIO:
ABSOLUTE LIQUIDITY RATIO= ABSOLUTE LIQUIDITY RATIO
CURRENT LIABILITY

YEAR ABSOLUTE LIQUIDITY CURRENT ABSOLUTE

ASSET LIABILITIES LIQUIDITY
RATIO

2019-2020 2483323789 2425494833 0.10

2020-2021 19496394 4074616672 0.04
2021-2022 267884055 3989799577 0.06
2022-2023 216829305 3229060792 0.05

SOURCE: PRIMARY DATA

CHART NO: 5.2

ABSOLUTE LIQUIDITY ASSET

0.05
0.06 2019-2020
0.04
2020-2021
2021-2022
2022-2023

0.10

INTERPERTATION:
The acceptable norm of this ratio is 0.75: 1. Hence the absolute ratio is high during 2020 with
0.1 and lowest during the year 2021 with value 0.04. Here also the current liabilities are very
much less as compared to other year. The absolute ratio would be highest in 2020 because of
decreased current liability.

C. QUICK RATIO:
QUICK RATIO = QUICK ASSETS
CURRENT LIABILITIES

TABLE NO:5.3
YEAR QUICK ASSET CURRENT QUICK RATIO
LIABILITIES
2019-2020 3521429890 2425494833 1.45
2020-2021 3119713852 4074561667 0.75
2021-2022 3325670194 3989799577 0.83
2022-2023 3279103752 3831458142 0.80

SOURCE: PRIMARY DATA

CHART NO: 5.3

TOTAL DEBT

0.8 1.45 2019-2020

2020-2021
2021-2022
2022-2023
0.83 0.75

INTERPERTATION:
From the above table, it is clear that the quick ratio with value 1.45 in the year 2020 is higher
and in the rest of the year it is near to standard value one. The quick ratio is highest for the
year 2020 because of decrease in current liability. That is advance due by value for the year
2023 is less as compared to other years.

D. LEVERAGE RATIO:
TOTAL DEBT EQUITY RATIO

TOTAL DEBT EQUITY RATIO = TOTAL DEBT

EQUITY

TABLE NO:5.4
YEAR TOTAL DEBT EQUITY TOTAL DEBT
EQUITY RATIO
2019-2020 4211328650 650000000 6.47
2020-2021 4462991934 387348411 11.52
2021-2022 4378090865 387264437 11.30
2022-2023 4318582954 388495311 10.21

SOURCE: PRIMARY DATA

CHART NO: 5.4

TOTAL DEBT

10.21 6.47 2019-2020

2020-2021
2021-2022
2022-2023
11.3 11.52

INTERPERTATION
:

The total debt equity ratio measures the relative proportion of debt and equity in financing the
assets of a firm. The ideal debt equity ratio is 1:1 that the funds provided by outsiders and
shareholders must be equal. Debt equity ratio indicates the degree of protection the creditors
have. A high ratio indicates higher proportion of debt content in the capital structure. Here
the ratios are very high in all the year. The total debt equity ratio for the year 2017 is highest
with the value 11.52 and less value in the year 2020
 E. LONG TERM DEBT TO SHAREHOLDERS NET WORTH:

LONG TERM DEBT TO SHAREHOLDERS NET WORTH = LONG TERM DEBT

SHAREHOLDERS
FUND

TABLE NO:5.5
YEAR LONG TERM LONG TERM NET WORTH
DEBT DEBT FUND RATIO

2019-2020 1785833817 650000000 0.27

2020-2021 388375262 387348411 1
2021-2022 388291288 387264437 1
2022-2023 389522162 388495311 1

SOURCE: PRIMARY DATA

CHART NO: 5.5

LONG TERM DEBT

1
2019-2020
1
2020-2021
2021-2022
0.27 2022-2023
1

INTERPERTATION:
The long term debt to shareholder’s net worth ratio is constant for four years (2021-2023) and
less for the year 2017. This ratio is lower because of higher value of long term debt in the
year 2021. That is in 2021 the shareholders’ value is too much higher as compared to other
years The average ratio of these five year is 0.854. so all the year they performed good.
 F.FIXED ASSET RATIO

FIXED ASSET RATIO = FIXED ASSET

CAPITAL EMPLOYED

TABLE NO:5.6
YEAR FIXED ASSET CAPITAL FIXED ASSET
EMPLOYED RATIO

2019-2020 71698266 71698266 0.04

2020-2021 80231449 388375262 0.20
2021-2022 86857590 388291288 0.22
2022-2023 111311550 389522132 0.33

SOURCE: PRIMARY DATA

CHART NO: 5.6

FIXED ASSET

0.04 2019-2020
0.23
2020-2021
2021-2022
2022-2023
0.2

0.22

INTERPERTATION:
From above table see that the fixed asset ratio for the year 2023 is higher than other all
values. This is because of fixed asset value for the year 2023 is higher as compared to other
years because of increased value of investments. So we can understand that the ratio indicates
a better financial position. And decreased value of fixed asset ratio in the year 2019 is due to
increased value of capital employed.
 G. FIXED ASSET TO NET WORTH RATIO

FIXED ASSET TO NET WORTH RATIO = FIXED ASSET

SHAREHOLDERS FUND

TABLE NO:5.7

YEAR FIXED ASSE SHAREHOLDERS NET WORTH

FUND RATIO

2019-2020 71698266 650000000 0.11

2020-2021 80231449 387348411 0.20
2021-2022 86857590 387264437 0.22
2022-2023 111311550 388495311 0.29

SOURCE: PRIMARY DATA

CHART NO: 5.7

FIXED ASSET

0.11
0.29 2019-2020
2020-2021
2021-2022
2022-2023
0.2

0.22

INTERPERTATION:

From above table, we can see a considerable increasing in ratios in all the year. The fixed
asset to net worth ratio is higher for the year 2023. This is because of fixed asset value for the
year 2023 is higher as compared to other year because of increased value of investments.
 H. ACTIVITY RATIO:

INVENTORY TURNOVER RATIO= COST OF GOODS

SOLD AVERAGE INVENTORY

TABLE NO:5.8

YEAR COST OF GOODS AVERAGE INVENTORY

SOLD INVENTORY TURNOVER
RATIO

2019-2020 528726379 218887736 2.41

2020-2021 508509161 324505518 1.57
2021-2022 949150283 190708322 4.98
2022-2023 1114383652 105355424 10.57

SOURCE: PRIMARY DATA

CHART NO: 5.8

COST OF GOODS SOLD

2.41
2019-2020
4.98
2020-2021
10.57 2021-2022
2022-2023

1.57

INTERPERTATION:

From the above table the inventory turnover ratio is highest for the year 2023 and lowest ratio
in the year 2021. An inventory turnover ratio would be highest in 2023 because of cost of
goods sold. That is, it has higher value for opening stock and closing stock. The highest ratio
10.57 during the year 2023 that means inventory is sold quickly but now decreased the sale of
inventory slightly.
 I. FIXED ASSET TURNOVER RATIO:

FIXED ASSET TURNOVER RATIO = NET SALES

FIXED ASSET

TABLE NO:5.9

YEAR NET SALES FIXED ASSET FIXED ASSET

TURNOVER
RATIO

2019-2020 587730794 71698266 8.19

2020-2021 691093873 80231449 8.61
2021-2022 1108582669 86857590 12.8
2022-2023 1255089422 111311550 11.27

SOURCE: PRIMARY DATA

CHART NO: 5.9

NET SALES

8.19
11.27 2019-2020
2020-2021
8.61 2021-2022
2022-2023

12.8

INTERPERTATION:

The above table shows that fixed asset turnover ratio is highest for the year 2022 because of
increased value of net sales and lowest for the year 2019 because of decreased value of net
sales in the year 2019 as compared to others. The average of these ratio is 10. So we can
conclude that in all the year it shows a better utilization of fixed asset in generating sales and
perform well.

J. CURRENT ASSET TURNOVER RATIO:

CURRENT ASSET TURNOVER RATIO = NET SALES

CURRENT ASSET

TABLE NO:5.10

YEAR NET SALES CURRENT ASSET CURRENT ASSET

TURNOVER
RATIO

2019-2020 587730794 3216438322 0.18

2020-2021 691093873 3590324287 0.19
2021-2022 1108582669 3458249026 0.32
2022-2023 1255089422 3377137651 0.37

SOURCE: PRIMARY DATA

CHART NO: 5.10

NET SALES

0.18
0.37 2019-2020
2020-2021
0.19 2021-2022
2022-2023

0.32

INTERPERTATION:

The above table it is observed that the current asset ratio is fluctuating continuously. The
current asset turnover ratio is higher for the year 2023 with value 0.38 and lower for the year
2019 with value 0.18. In 2019, net sales are less as compared to other years. That’s why
current asset turnover ratio is less in 2019

CHAPTER VI
 6.1 FINDINGS AND SUGGESTION

 It is found that the current ratio, quick ratio and absolute ratio under liquidity ratio
from the four year 2019 to 2023 were below the standard norms. The current
liabilities remain higher than current assets in all the four years, which means that the
firm is not in a position to meet the short term liabilities.

 For leverage ratios, the total debt equity ratio shows the proportions of equity and
debt a company is financing its assets. Here shows a higher debt equity ratio indicates
that the company is getting more of its financing by borrowing money, which subjects
the company to potential risks if debt levels are too high.

 Activity ratios assess how effectively a company is able to generate revenue in the
form of cash and sales based on its asset, liability and capital share. Here shows a
lower ratio indicates that too much capital is tied up in assets and that assets are not
being efficiently in generating sale

 The fixed assets turnover ratio reveals efficient a company is at generating sales from
its existing fixed assets. So the generate in all the year it shows a better utilization of
fixed asset in generating sales and perform well.

 A positive quick ratio can indicate the company’s ability to survive emergencies or
other events that create temporary cash flow problems.
 6.2 SUGGESTION:

 Company need to be more forced on there employees for better result in recent times.

 They have to more aware about their competitors.

 Company’s borrowing are pretty much high which needs to be reduced as soon as
possible.

 The overall financial performance is decent & should continue to maintain those
records.

 The company can improve the net profit by reducing interest and financial changes.
 6.3 CONCLUSION:

Efficient and effective financial performance is very important for all organizations to survive
and to have better profitability. Financial performance analysis is very important to check the
profitability and to find the future threats of the company. For financial performance analysis,
I have conducted my study at COIRFED, Alappuzha. The main objective of the study was to
analyze the financial performance and to secure practical knowledge regarding different
aspects of the company. It helped me to familiarize with a real world organization system and
to understand the various levels in the organization. Data were collected from the balance
sheet, annual report. The various tools used for the analysis are ratio analysis, trend analysis,
correlation analysis, regression analysis comparative balance sheet analysis and DuPont
analysis. During the period of study, the functioning of the company and all activities was
studied in brief. The study was aimed in getting insight to the day to day operations of typical
industry. This helps us to gain practical knowledge about management and function by way
of comparison between practical and theoretical knowledge. This study comes to the
conclusion that; the company has to increase efficiency in maximum utilization of its
resources effectively
 BIBLIOGRAPHY

WEBSITES

https://www.rotork.com>subsidiary private limited

https://www.linked.com/company/rotrok/ private limited linked

BOOK

Maheshwari S N,
Financial Management,
Eleventh Edition,
Sultan Chand and Sons,
Educational Publishers, New Delhi

REFERNCE:

 Pandey I M, Financial Management 9th Edition Vikas Publications House Pvt Ltd.

 Chandra, P. “Financial Management”, Tata Me Graw-Hill Publishing Company Ltd.,

New Delhi,2014

 Jain and Narang. “Financial Accounting”, Kalyani Publishers, 2005

 Khan M Y, Jain P K, Management Accounting, 3rd Edition Tata McGraw- Hill

Publishing Co Ltd

 Kothari C R, Research methodology, 12 editions, Vikas Publishing House, new Delhi

 Sharma R.K Shashi K Gupta, Management Accounting, Kalayani Publishers, 6th

Edition, New Delhi, 1992
 ANNEXURE

A STUDY OF THE FINACIAL PERFORMANCE ANALYSIS OF ROTORK PRIVATE

LIMITED