AS PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE IN

MASTERS OF BUSINESS ADMINISTRATION

FROM

DR. APJ ABDUL KALAM TECHNICAL

UNIVERSITY, LUCKNOW, UTTAR PRADESH
A SUMMER INTERNSHIP REPORT ON THE TOPIC-
A STUDY ON FINANCIAL MANAGEMENT AT VINDHYA
TELELINKS PVT. LTD

MBA 2nd YEAR 3rd SEMESTER

SUBMITTED TO
DEPARTMENT OF MANAGEMENT STUDIES

BANSAL INSTITUTE OF ENGINEERING &

TECHNOLOGY,
LUCKNOW, UTTAR PRADESH
SUBMITTED BY-

MUSKAN TIWARI

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 ROLL NUMBER: - 2204220700034

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KMBN308 SUMMER TRAINING PROJECT REPORT/MUSKAN TIWARI/2204220700034Page 3
 ACKNOWLEDGEMENT

I would like to express my gratitude to the mentors and industry professionals who
generously
shared their knowledge and expertise during the development of this business plan.
Their
insights and guidance have been invaluable in shaping our strategies and ensuring the
feasibility
of our project.
I would also like to thank my friends, and batch mates for their support and
collaborative spirit.

MUSKAN TIWARI

ROLL NUMBER :- 2204220700034

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 TABLE OF CONTENTS

SNO PARTICULARS

1 CHAPTER-1
 INTRODUCTION
2 CHAPTER-2
 COMPANY PROFILE
 VISION/MISSION
 FUNCTIONAL DEPARTMENT
 SWOT ANALYSIS
3 CHAPTER-3
 FINANCIAL ANALYSIS
 OBJECTIVES OF THE STUDY

4 CHAPTER-4
 RESEARCH METHODOLOGY
 DATA ANALYSIS AND INCOME STATEMENT ANALYSIS

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 5 CHAPTER-5
 FINANCIAL RATIO ANALYSIS AND THEIR
INTERPRETATION
 BIBLIOGRAPHY

Abstract

The focus of the current study is to conduct a financial analysis of Vindhya Telelinks Ltd.
To determine the company’s financial viability and offer helpful recommendations to the
owners. A premier manufacturer, Vindhya Telelinks Limited offers its clients
Polyethylene Insulated Jelly Filled Telephone Cables (JFTC) of the highest calibre. The
company holds an IS/ISO 9001:2000 certification for its quality management system.
This study’s data come from both Primary and secondary sources and is descriptive in
nature. The cash flow statement, balance Sheet statement, and profit and loss account
were examined as part of the financial analysis. To evaluate the company’s financial
situation, financial ratios were also computed.

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CHAPTER-1
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 INTRODUCTION

Financial Management

Financial Management means planning, organizing, directing and controlling the

financial activities such as procurement and utilization of funds of the enterprise.
It means applying general management principles to financial resources of the
enterprise.

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 Importance of Financial Management

Solid financial management provides the foundation for three pillars of

sound fiscal governance:

1) Strategizing
Identifying what needs to happen financially for the company to achieve its
short- and long-term goals. Leaders need insights into current performance
for scenario planning, for example.

2) Decision-making
Helping business leaders decide the best way to execute on plans by
providing up-to-date financial reports and data on relevant KPIs.

3) Controlling
Ensuring each department is contributing to the vision and operating
within budget and in alignment with strategy.

With effective financial management, all employees know where the company is
headed, and they have visibility into progress.

Scope/Elements of Financial
Management

Investment decisions includes investment in fixed assets (called as

capital budgeting). Investment in current assets are also a part of

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 investment decisions called as working capital decisions.

1) Financial decisions- They relate to the raising of finance

from various resources which will depend upon decision on
type of source, period of financing, cost of financing and the
returns thereby.

2) Dividend decision- The finance manager has to take decision

with regards to the net profit distribution. Net profits are
generally divided into two:

 Dividend for shareholders- Dividend and the rate of it

has to be decided.

 Retained profits- Amount of retained profits has to be

finalized which will depend upon expansion and
diversification plans of the enterprise.

Objectives of Financial
Management

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The financial management is generally concerned with procurement,
allocation and control of financial resources of a concern. The objectives
can be-

1. To ensure regular and adequate supply of funds to the concern.

2. To ensure adequate returns to the shareholders which will depend

upon the earning capacity, market price of the share, expectations of
the shareholders.

3. To ensure optimum funds utilization. Once the funds are procured,

they should be utilized in maximum possible way at least cost.

4. To ensure safety on investment, i.e., funds should be invested in safe

ventures so that adequate rate of return can be achieved.

5. To plan a sound capital structure-There should be sound and fair

composition of capital so that a balance is maintained between debt
and equity capital.

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 Functions of Financial Management

1) Estimation of capital requirements:

A finance manager has to make estimation with regards to capital requirements
of the company. This will depend upon expected costs and profits and future
programmes and policies Estimations have to be made in an adequate manner
which increases earning capacity of enterprise of a concern.

2) Determination of capital composition:

Once the estimation have been made, the capital structure have to be decided.
This involves short-term and long-term debt equity analysis. This will depend
upon the proportion of equity capital a company is possessing and additional
funds which have to be raised from outside parties.

3) Choice of sources of funds:

For additional funds to be procured, a company has many choices like-

 Issue of shares and debentures

 Loans to be taken from banks and financial institutions

 Public deposits to be drawn like in form of bonds.

Choice of factor will depend on relative merits and demerits of each source and

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 period of financing.

4) Investment of funds:

The finance manager has to decide to allocate funds into profitable

ventures so that there is safety on investment and regular returns is
possible.

5) Disposal of surplus: The net profits decisions have to be made by

the finance manager. This can be done in two ways:

 Dividend declaration – It includes identifying the rate of

dividends and other benefits like bonus.

 Retained profits – The volume has to be decided which

will depend upon expansional, innovational, diversification plans
of the company.

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 6) Management of cash:

Finance manager has to make decisions with regards to cash management.

Cash is required for many purposes like payment of wages and salaries,
payment of electricity and water bills, payment to creditors, meeting
current liabilities, maintainance of enough stock, purchase of raw
materials, etc.

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CHAPTER- 2

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 Introduction

The M.P. Birla Group’s Universal Cables Limited, Satna, and the MP State IDCL joined
Together to form “Vindhya Telelinks Limited” to carry out a project to produce JFTC.
Commercial production at the Rewa plant in Madhya Pradesh started in 1986. The
business Provides optimised facilities for the production of optical fibre cables (OFC),
with the most Recent innovation covering the whole range of such links and a cap of
more than 34,272 Cable KM annually. The company also includes a top-notch operation
for fabricating optical fibre Ribbons, with a yearly capacity of over one million ribbon
kilometres. It can supply Approximately 5783 kilometres of optical fibre ribbon cable
with various fibre checks. The Company has established itself as the top supplier of jelly
-filled telecommunication cables to BSNL, MTNL, and other top user organisations
including Bharti, Huges, Reliance Info COMM, Tata Tele Services, Spice Telecom, NTPC,
SAIL, Railways, Defense organizations, Different coal fields & mining companies, oil &
refining companies, Department of Atomic Energy, Nuclear Power Corporation, etc. The
customer segment of the company includes Basic & cellular services, Indian Railways,
Information technology, Refineries, Coal fields, Defence, Gas, Power Utilities, Cable T.V.
Operators, Internet & Other Value-added Service Providers. The primary pillars of the
company’s success are customer contentment, consistency in product Quality, timely
delivery, and an ongoing effort to improve quality and customer pleasure.

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 Company Profile

“Vindhya Telelinks Limited” was established in joint sector between Universal Cables
Limited, Satna, belonging to M.P. Birla Group and Madhya Pradesh State Industrial
Development Corporation Limited to implement a project for manufacturing of
Polyethylene Insulated Jelly Filled Telephone Cables (JFTC). The plant which is located
at Rewa (M.P.) started commercial production in 1986. VTL is an IS/ISO 9001:2000 and
IS/ISO-14001:2004 certified company.

The plant and machinery Installed in the organization is from world famous cable,
machinery manufacturers like Maillefer S.A. – Switzerland, Pourtier-France, Kabmatik-
Sweden, Rosendahl-Austria, Dussek Campbell-U.K. and Medek Schorner-Austria.

Initial capacity set up to manufacture 6.25 Lacs Core Kilometers of JFTC has been
increased over the period to 74.8 LCKM ranging upto 2400 Pair with all the facilities to

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manufacture the best cables meeting customer requirements to ensure Total Customer
Satisfaction.

Company is having state-of-the-art facilities for manufacture of Optical Fibre Cables

(OFC) with latest technology covering full range of such cables with a capacity of more
than 34,272 Cable KM per annum. The company is also having world class Optic Fibre
Ribbon manufacturing facility with annual capacity to produce about 1.0 lacs Ribbon Km.
It can produce about 5783 Km of Optical Fibre Ribbon Cable of different fibre count.

The company is managed by a qualified and experienced team of managers and

engineers with skilled workers, fully trained for carrying out their tasks.

The company has become the leading supplier of Jelly Filled Telecommunication
cables to Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited
(MTNL) and other leading user organizations like Bharti, Huges, Reliance Infocom, Tata
Tele Services, Spice Telecom, NTPC, SAIL, Railways, Defence organizations, Different
Coal Fields & Mining Companies, Oil & Refining companies, Department of Atomic
Energy, Nuclear Power Corporation etc.

The major foundation stones for the success of the company are satisfaction to the
customer, consistency in quality of product, timely delivery and endeavor to
continuously improve the quality and customer satisfaction

Vindhya Telelinks Limited is the outcome of a Public-Private joint venture between

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Universal Cables Limited and the Madhya Pradesh State Industrial Development
Corporation Limited. At the time of its conception, Vindhya Telelink’s primary mandate
was to manufacture Jelly Filled Telephone Cables (JFTC). With the completion of its
manufacturing plant at Rewa (M.P.) Vindhya Telelinks commenced commercial
production in 1986.

POLICY ON MATERIALITY OF DEALING WITH

RELATED PARTY TRANSACTIONS

TITLE

This Policy shall be called ‘Policy on materiality of Related Party

Transactions and dealing with Related Party Transactions’.

COMMENCEMENT

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The Policy shall come into effect from 16th May, 2019.

OBJECTIVE

The Companies Act, 2013 and Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, as
amended from Time to time (“Listing Regulations”) require the companies
to have enhanced Transparency and due process for approval of the
Related Party Transactions.

Pursuant to Regulation 23(1) of Listing Regulations, the listed company

shall Formulate a policy on materiality of related party transactions and on
dealing With related party transactions including clear threshold limits duly
approved by The board of directors and such policy shall be reviewed by
the board of directors At least once every three years and updated
accordingly. This policy is intended to ensure the proper approval and
reporting of Transactions between the Company and any of “Related Party”
as defined below.

DEFINITIONS:-

“Arm’s length transaction” means a transaction between two Related

Parties that Is conducted as if they were unrelated, so that there is no
conflict of interest.

“Audit Committee” means the audit committee constituted by the Board of

Directors of the Company in accordance with section 177(1) of Companies
Act, 2013 and Regulation 18(1) of Listing Regulations.

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“Board” means the Board of Directors of Vindhya Telelinks Limited.

“Company” means Vindhya Telelinks Limited.

“Material Related Party Transaction” means a transaction with a Related

Party Where the transaction/transactions to be entered into individually or
taken Together with previous transactions during a financial year, exceeds
ten present Of the annual consolidated turnover of the Company as per the
last audited Financial statements of the Company. Provided further that
notwithstanding the Above, a transaction involving payments made to a
related party with respect to Brand usage or royalty shall be considered
material if the transaction(s) to be Entered into individually or taken
together with previous transactions during a Financial year, exceed two
percent of the annual consolidated turnover of the Company as per the last
audited financial statements of the Company.

“Office or place of profit” means any office or place –

(a)Where such office or place is held by a director, if the director holding

it Receives from the company anything by way of remuneration over
and Above the remuneration to which he/she is entitled as director,
by way of Salary, fee, commission, perquisites, any rent-free
accommodation, or Otherwise;

(b)Where such office or place is held by an individual other than a

director or By any firm, private company or other body corporate, if
such person Receives from the company anything by way of
remuneration,

(c)salary, fee, Commission, perquisites, any rent-free accommodation,

or otherwise.

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 “Policy” means this Policy, as amended from time to time.”

Related Party” in relation to the Company means a party related with

the Company in any of the ways as are laid down in section 2(76) of
the Companies Act, 2013 and Regulation 2(1)(zb) of the Listing
Regulations”

Related Party Transaction” in relation to the Company means a transaction

with Related Party under the relevant provisions of the Companies Act,
2013 or Regulation 2(1) (zc) of Listing Regulations.

APPROVAL OF RELATED PARTIES TRANSACTIONS

Prior approval of the Audit Committee of the Company will be required for:

(a)All related party transaction and subsequent material

modifications;

(b)A related party transaction to which the subsidiary of a

Company is a party But the Company is not a party, if:

 The value of transaction either individually or taken together with the

Previous transactions during a financial year exceeds 10% of the
annual Consolidated turnover of the Company;

 The value of transaction either individually or taken together with the

Previous transactions during a financial year exceeds 10% of the
annual Standalone turnover of the subsidiary. [Applicable from 01st
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 April, 2023].

Only those members of the audit committee, who are independent

directors, shall
Approve related party transactions.

However, the Audit Committee may grant omnibus approval for Related
Party Transactions proposed to be entered into by the Company, where The
transaction/transactions to be entered into individually or taken together
With previous transactions during a financial year, does not exceeds ten
percent Of the annual consolidated turnover of the Company as per the last
audited Financial statements of the Company.

The omnibus approval shall be subject to the following

conditions:

(a)The audit committee shall lay down the criteria for granting the
omnibus Approval in line with the policy on related party transactions
of the Company and such approval shall be applicable in respect of
transactions Which are repetitive in nature;

(b)The audit committee shall satisfy itself regarding the need for such
Omnibus approval and that such approval is in the interest of the
Company;

 The omnibus approval shall specify:

(i) The name(s) of the related party, nature of transaction, period of

Transaction, maximum amount of transactions that shall be
Entered into,

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 (ii) The indicative base price / current contracted price and the
formula For variation in the price if any; and

(iii) Such other conditions as the audit committee may deem fit:
Provided that where the need for related party transaction cannot
be Foreseen and aforesaid details are not available, audit
committee may Grant omnibus approval for such transactions
subject to their value not Exceeding rupees one crore per
transaction.

(c)The audit committee shall review, at least on a quarterly basis, the

details Of related party transactions entered into by the listed entity
pursuant to Each of the omnibus approvals given.
Such omnibus approvals shall be valid for a period not exceeding one year
and shall require fresh approvals after the expiry of one year.

Where any director is interested in any Related Party Transaction, such

director will not participate during discussion and voting on the subject
matter of the Resolution relating to such Transaction in the meeting.

All Material Related Party Transactions shall require approval of

shareholders of The Company through resolution and no Related Party
shall vote to approve Such resolutions whether the entity is a related party
to the particular Transaction or not.

No such prior approval of the audit committee and / or the

Shareholders shall be required in following cases:

(a)Transactions entered into between the company and its wholly

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 owned Subsidiary whose accounts are consolidated with the
company and placed before the shareholders at the general meeting
for approval.

(b)Transaction(s) entered into between two wholly owned subsidiaries

of the Company, whose accounts are consolidated with the company
and placed Before the shareholders at the general meeting for
approval
All Related Party Transactions (other than Material Related Party
Transactions) Pursuant to section 188 of the Companies Act, 2013 which
are not in the Ordinary course of business or are not Arms’ length
transactions and cross the Threshold limits prescribed under Companies
Act, 2013 shall also require the Prior approval of shareholders of the
Company and no member of the company Shall vote on such resolution(s),
to approve any contract or arrangement which May be entered into by the
Company, if such member is a related party. The Related Party for the
purpose shall be construed with reference to/in the context of the contract
or arrangement for which the resolution(s) is being passed. The approval
mechanism for Related Party Transactions shall be as stipulated in The
Listing Regulations and/or Companies Act, 2013 as amended from time to
Time.

AMENDMENTS:-

The Board shall have the power to amend any of the provisions of this
Policy, Substitute any of the provisions with a new provision or replace this
Policy Entirely with a new Policy.

INTERPRETATION:-

Any words used in this policy but not defined herein shall have the same
Meaning ascribed to it in the Listing Regulations, Companies Act, 2013 or

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Rules Made thereunder, SEBI Act or Rules and Regulations made
thereunder, Accounting Standards or any other relevant legislation / law
applicable to the Company.

In case of any dispute or difference upon the meaning/interpretation of any

word or provision in this Policy, the same shall be referred to the Audit
Committee and The decision of the Audit Committee in such a case shall
be final. In interpreting Such term /provision, the Audit Committee may
seek the help of any of the Officers of the Company or an outside expert as
it deems.

MISSION:-

To deliver the very best to its customers, shareholders and employees

bearing in mind its commitment to the welfare of society at large.

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VISION:-

To be first choice for delivery of successful projects and solutions

which exceed the expectations of our customers.

PRODUCTS

Today, Vindhya Telelinks has emerged a leading manufacturer & supplier of

Jelly Filled Telecommunication Cables, as well as of Optical Fiber
Telecommunication [Link] modest initial manufacturing capacity of
JFTC has increased manifold and is offered in a wide range of offerings
from 5 Pair to 2400 Pair. Optical Fiber Cables employing the most current

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technology are also manufactured at a robust capacity annually. Vindhya
Telelinks undertakes all manufacturing & production under the stringent
parameters of the ISO 9001 & ISO 14001 Certifications.

QUALITY

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All of the company’s systems & processes are geared to comply fully with ISO
guidelines, are subject to ongoing scrutiny under the certification, are constantly
improved to meet the ISO requisites; and ultimately yield a very high level of Customer
Satisfaction. Vindhya Telelink’s reputation as a dependable & high quality manufacturer
now precedes itself. We have been consistently awarded the highest Delivery Rating
amongst Telephone Cable manufacturers. Our unblemished history & superior quality
enabled us to work under the coveted Approved Inspection Scheme (AIS), a rare
privilege for a company.

Our regular clients include top telecom companies such as BSNL, MTNL, NTPC, &
Reliance Infocom and we are now also the proud Preferred Vendors to Bharti & Tata for
Copper Telephone Cables & Optical Fiber Cables. Additionally, Vindhya Telelinks is
proud to provide its product range to the Railways, Defence, Coalfields, SAIL and Atomic
Energy among others. In a bid to forge ahead strongly into the future; Vindhya Telelinks
is undertaking several new initiatives. Our Optic Fiber Goa Limited, along with Universal
Cables & Birla Ericsson Optical Limited, has been set up to manufacture Optic Fiber in
Goa. We have also put in place our EPC Division that provides complete turn-key
solutions including trenching, laying, jointing, & installation of Telecom Cables.

Functional Department
The primary purpose of functional areas of business is to guarantee efficiency in all
organizational activities. Companies organize by functional units to dedicate specific
resources and personnel towards accomplishing a given function, project, or objective.

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For example, the human resource department is a functional area solely dedicated to
recruiting, training, assigning roles, and developing employees.

Functional areas allow a clear description and distinction of duties and responsibilities.
Each division clearly understands its specific obligations, which increases
accountability across the organization. Although each unit operates distinctively with its
specialized manager and staff, all functional areas must cooperate in pursuing
organizational goals and objectives.

Functional Departments of an Organization

Businesses have different functional departments depending on the size of the
organization and the nature of the market. Nonetheless, typical functional areas
included.

Marketing Functional Area:-

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The marketing functional area works closely with the sales department to create
demand for the company’s products and services. Employees within this organizational
unit are responsible for identifying and addressing customer needs. In other words, the
marketing department conducts research to determine what consumers want and
design products that meet these needs. Marketing functions also include:

 Promoting the company’s products and services

 Delivering products to the final consumer
 Developing pricing strategies
 Creating and implementing strategies that strengthen the business’s competitive
advantage
 Building and maintaining an online presence, an important business strategy in
this digital marketing era

Finance and Accounting Functional Area:-

The finance functional area definition alludes to the management of company funds. In
business, finance and accounting departments are responsible for planning, procuring,
and managing finances. This department analyses the company’s capital needs to
determine how to acquire and allocate funds. Finance managers oversee all financial
decisions, including whether to borrow or sell stocks to raise money.

The finance and accounting division deals with all functions pertaining to capital,
budgeting, assets, and costs. This department informs the allocation of financial
resources. Accounting professionals analyze and represent financial transactions to key
stakeholders such as investors and the government. Accountants also prepare financial
statements, painting a clear picture of the organization’s financial position.

SWOT Analysis

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SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used
to evaluate a company’s competitive position and to develop strategic planning. SWOT
analysis assesses internal and external factors, as well as current and future potential.

A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the

strengths and weaknesses of an organization, initiatives, or within its industry. The
organization needs to keep the analysis accurate by avoiding pre-conceived beliefs or
gray areas and instead focusing on real-life contexts. Companies should use it as a
guide and not necessarily as a prescription.

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Strengths:-

Strengths are the qualities that enable us to accomplish the organization’s mission.
These are the basis on which continued success can be made and continued/sustained.
Strengths can be either tangible or intangible. These are what you are well-versed in or
what you have expertise in, the traits and qualities your employees possess (individually
and as a team) and the distinct features that give your organization its consistency.

Strengths are the beneficial aspects of the organization or the capabilities of an

organization, which includes human competencies, process capabilities, financial
resources, products and services, customer goodwill and brand loyalty.

Examples of organizational strengths are huge financial resources, broad product line,
no debt, committed employees, etc.

Weaknesses :-

Weaknesses are the qualities that prevent us from accomplishing our mission and
achieving our full potential. These weaknesses deteriorate influences on the
organizational success and growth. Weaknesses are the factors which do not meet the
standards we feel they should meet.
Weaknesses in an organization may be depreciating machinery, insufficient research
and development facilities, narrow product range, poor decision-making, etc.
Weaknesses are controllable. They must be minimized and eliminated.

For instance – to overcome obsolete machinery, new machinery can be purchased.

Other examples of organizational weaknesses are huge debts, high employee turnover,
complex decision making process, narrow product range, large wastage of raw
materials, etc.

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Opportunities :-

Opportunities are presented by the environment within which our organization operates.
These arise when an organization can take benefit of conditions in its environment to
plan and execute strategies that enable it to become more profitable. Organizations can
gain competitive advantage by making use of opportunities.
Organization should be careful and recognize the opportunities and grasp them
whenever they arise. Selecting the targets that will best serve the clients while getting
desired results is a difficult task.

Opportunities may arise from market, competition, industry/government and technology.

Increasing demand for telecommunications accompanied by deregulation is a great
opportunity for new firms to enter telecom sector and compete with existing firms for
revenue.

Threats:-

Threats arise when conditions in external environment jeopardize the reliability and
profitability of the organization’s business. They compound the vulnerability when they
relate to the weaknesses.
Threats are uncontrollable. When a threat comes, the stability and survival can be at
stake. Examples of threats are – unrest among employees; ever changing technology;
increasing competition leading to excess capacity, price wars and reducing industry
profits; etc.

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 CHAPTER 3

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 Financial Analysis

In this study, financial analysis was carried out to examine the company’s financial
statements. This analysis will be helpful for making important decisions, such as
investments and plans for Projects and financing activities. Financial data is used to
evaluate a company’s performance, and the results are presented to the senior
management with suggestions for future Improvement. The way toward evaluating the
association between fragment pieces of financial Reports in order to gain a prevailing
awareness of the resolute positions and execution is through the assessment of
spending reports. The focus of financial analysis is on crucial numbers in monetary
rundowns and the substantial association that exists between them. The primary goal
of the cash related analyst is to select the facts pertinent to the decision from the whole
Information contained in the spending rundowns. To summarise, financial assessment
is a Process of assurance, association, and evaluation. The resulting provided a metric
that can be used to evaluate investment opportunities.

Objectives of the Study

The purpose of the study was to investigate and analyse the company’s current
financial Position as well as the cash transactions that are related to the business.
Additionally, the study Aimed to provide useful information regarding a variety of
financial ratios and their connections To cash management. The following is an
enumeration of the primary goals that were pursued:

• To ascertain the company’s current level of profitability as well as its future potential.
• To investigate how the firm handles its cash requirements.
• To figure out which method of cash budgeting is applicable to the organisation.

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 CHAPTER-4

Research Methodology

This is a descriptive study which uses data from both primary and secondary sources.
Financial Analysis was conducted by analyzing the final accounts, fund flow statement,
cash flow statement and annual reports of the company. Financial ratios were also
calculated to assess The financial position of the company.

Primary data was collected through non-structured interview method. The questions
were Asked from the plant’s regular staff members from finance department. The
purpose of the Survey was to gather information on the perspectives of those working
at Vindhya Telelinks Ltd. On matters pertaining to Financial and Ratio Analysis.
Secondary data was collected from BSP circulars, manuals, and brochures that have
been distributed by the organisation, Magazines, and gazettes report on personnel

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policy and on the work of programmers, etc.

Data analysis and Findings

A. Income Statement Analysis:-

The data given below is extracted from the Annual Report of Vindhya
Telelinks Limited Fiscal Year 2017-18. It shows the data of two financial
years, i.e., 2017-18 and 2016-17.

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From the above data, Gross Profit Ratio, Operating Profit Ratio, Net Profit
Ratio, Tax Ratio and Interest coverage ratio have been calculated for both
the financial years with the help of Following formulae:

Results from calculation of Ratios:-

Interpretation – The gross profit ratio has decreased from 57.07%

in 2017 to 38.34% in 2018, which shows decreased profits of the company.

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 CHAPTER- 5

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 Financial Ratio Analysis

The following financial ratios were calculated to assess the position of the
company:

 Current Ratio – The current ratio is the proportion that is

utilized the majority of the Time in order to quantify the organization’s
liquidity. This is because the current ratio is a quick, natural, and
simple measure that allows one to comprehend the connection
between an organization’s current resources and current liabilities. In
essence, it Provides an answer to the question of how many of the
organization’s present resources Are required in order to cover the

organization’s current obligations

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Interpretation – A proportion that is either exactly 2:1 or very close to
that rule of thumb. It indicates that current assets should be at least twice
as large as current liabilities in order to be regarded as adequate. If a
company’s current ratio is more than one, it indicates that the Company is
in healthy shape. Here the Current ratio for both the financial year is above
1, which Indicates the healthiness of the company, but the ratio has
decreased from financial year 2017 To financial year 2018, which is an
alarming signal for the company.

 Acid Test Ratio/ Quick Ratio – There are times when

current assets might include Massive amounts of inventory, prepaid
expenses, and other things along these lines. This has the potential
to change our understanding of the present assets, which are not
Very flexible.

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Interpretation – This ratio is sometimes referred to as the Quick Ratio
or the Acid Test. A Score of 1.0 is considered to be a reliable
recommendation for a healthy basic analysis file. A quick ratio of one-to-
one is generally seen as being sufficient and may be thought of as either a
rule of thumb or a convention. If not all of the debtors can be realized and

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cash is required Right away to satisfy the present obligation, a fast ratio of
1:1 does not always indicate that the Company has an acceptable liquidity
situation.

 Cash Ratio – In the event that the company has a higher cash
ratio, it will undoubtedly be in a position to be able to pay off its short-
term obligations.

Interpretation – When trying to get a complete view of the company’s

liquidity status, it is Important to look at all the above ratios related to cash.
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The Cash Ratio is the gold standard for measuring liquidity. If this figure is
very high, then it is reasonable to assume that the company has sufficient
liquid assets in its bank accounts to meet all of its short-term financial
Obligations.

 Growth rate ratio – It shows the comparative growth rate of

the company with Reference to previous financial year.

Interpretation- If a portfolio grows by 4.87% one year and 30.36% the

next, the average Growth rate would be 25.49% per year. So, the changes in
the arrival rate of the speculation between the beginning of the primary
year and the end of the year are not included in the Estimates.

 Inventory turnover ratio – It is a measure of how well

inventory is managed. It compares the value of products sold over a
period to the average number of products in Stock. This shows how
many times the average amount of inventory is “turned,” or sold,

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 During a given time. In other words, it shows what percentage of the
total average dollar Amount of a company’s stock was sold during
the year.

Interpretation – It is essential to have a high inventory turnover since

this may be used as a Measurement of how well a company is able to
regulate the products it sells. This demonstrates that the company does
not waste resources by keeping goods that cannot be sold and do not
Overpay by purchasing an excessive quantity of inventory. It also
demonstrates that the Corporation is capable of properly selling the stuff
that it acquires. This statistic also reveals to Investors the degree to which
a company’s inventory is liquid. A retailer’s inventory is one of the most
essential assets it must declare on its financial statements. If this

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inventory is unable to be sold, then it has no value to the corporation. This
metric illustrates how quickly and readily a company may convert its
inventory into cash.

 Accounts receivables turnover ratio – A proficiency

percentage or action proportion, Accounts receivable turnover
estimates the frequency with which a company may convert its
accounts receivable into cash within a certain time period. At the end
of the Day, the accounts receivable turnover percentage provides a
quantitative estimate of the Frequency with which an organisation
may collect its typical accounts receivable during the course of the
year. The efficiency with which a business collects its credit sales
from customers is represented by this percentage. Some businesses
are able to collect their receivables from customers in as little as
three months, while others may take up To six months or even a
whole year to do so. It’s possible that the receivables turnover Ratio
may also be interpreted as a measure of the company’s liquidity in
some way or another. When companies are able to convert their
accounts receivable into cash in a shorter amount of time, their
liquidity improves.

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Interpretation – Higher ratio is considered good, but it seen that it has
decreased from Financial year 2017 to financial year 2018.

 Capital turnover ratio – When we talk about capital

turnover, we are referring to the ratio of a company’s annual sales to
the total value of its investor base. It is anticipated that a
Determination will be made about the volume of profit that a firm is
able to generate with the use of a certain measure of worth.
Additionally, it is a general percentage of the degree Of financial risk-
taking that is necessary in a certain sector in order to generate
business Transactions.

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Interpretation – The capital turnover ratio is a measure of how well an
organisation is putting its available capital to work for it. A high capital
turnover percentage indicates that the Organisation is capable of achieving
the highest number of transactions with the least amount of capital that is
being employed. The higher the share of capital turnover, the more
favourable the circumstances will be.

 Working capital turnover ratio -It is a percentage that

evaluates how effectively a Corporation is employing its working
money to assist a /particular level of transactions. It Measures how
much money an organisation has available to work with at any one
time. Work capital turnover is another term for net deals to working
capital, and it illustrates the Relationship between the assets that are
utilised to support an organization’s activities and the earnings that
the company generates as a result of those activities.

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 Interpretation – When there is a high turnover rate, it indicates
that management is often quite effective in making use of a
company’s immediate resources and liabilities to boost sales. On The
other hand, a low percentage indicates that a company is investing
resources into a significant number of records receivable and stock
advantages for the purpose of assisting its Business.

 Return on capital employed/ investment – ROCE,

also known as profit for capital Used, is a benefit percentage that
compares an organization’s net-working benefit with the Amount of
capital that it has used. This comparison determines how well an
organisation can produce benefits from the capital it has used. ROCE
is percentage that indicates the extent to which resources are
working effectively while also taking into consideration long-term
Funding. This makes ROCE a drawn-out benefit proportion. For this
reason, return on capital employed (ROCE) is considered a more
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 important percentage than return on value when Determining the
longevity of a firm.

Interpretation – The arrival on capital utilised ratio indicates how

much of an increase in Benefit is produced by one dollar’s worth of capital

that is put to use. A higher ratio is obviously Preferable since it indicates
that a greater amount of dollars’ worth of benefits are created for Every
dollar’s worth of capital that is put into use.

 Earning before interest tax depreciation and amortisation

ratio – The earnings before interest, taxes, depreciation, and
amortisation (EBITDA) edge is a financial ratio that converts the
fundamental profit formula into a measure that can be applied to
evaluate all different types of companies in any industry.

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Profit after tax margin ratio – An after-charge overall
revenue is a money related Execution percentage that is figured out by
dividing net gain by net deals. This process Produces an after-charge
overall revenue. The entire income of an organisation after taking into
account all fees is very important since it reveals how well the business
manages its costs. The total income after taking into account all fees is the
same as the Net revenue.

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Interpretation – In most cases, a greater margin indicates that an
organisation is operating well; nevertheless, low after-charge net revenue
does not always indicate that the business is not effectively managing
expenditures. For a more accurate depiction of the situation, the ratio
should be considered in conjunction with other monetary measurements.

Conclusion:-

Vindhya Telelinks Limited’s ratio analysis, when studied, provides insight

into the company’s Performance in relation to many facets of its finances.
It has been determined that there has Been a rise in sales and net profit
during the 2017-18 fiscal year, as well as an increase in the Cash balance
for the aforementioned year. In addition to this, it has been noticed that the
present Ratio does not meet expectations. The ratio of net working capital
to total capital is also growing For the year in question. The
aforementioned aspects of the recommendation have the potential To
bring about improvements in both the performance and the efficiency of
the firm. In the Aftermath of examining and dissecting the conclusion, it
has been found that Vindhya Telelinks Limited has a brisk expansion of
harmony. Having successfully operated throughout the course of the past
seventy-five years while making steady improvement. Financial ratio
analysis is Generally important for any organization because it provides the
capacity for correlation of Various proportions and a couple of previous
years’ profit, return on capital, costs, and other Productivity proportions,
which enables the executives to make quick financial decision.

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 Recommendations

1) Talk to your clients:-

I know many promising accounting professionals who work hard and play
by the book. However they fail to make it in the long-run, because they don’t
recognize the importance of this one tip.
Your firm exists because of your clients. Pay attention to them. Add this as
a Reminder to the top of your daily to-do list. Consistently reaching out to
your potential, and current, clients is a game-changer. Talk to them.
Discover where your potential high value clients hang out. Pay attention to
their language. What concerns do they talk about and how do they express
those concerns?

Follow this advanced move to quickly get their attention. Drop your industry
lingo and talk their talk. For example, many of my clients don’t like selling.
Instead of saying they don’t like selling, they tell me they don’t like to be
salesy. Replace your industry terms with their phrases. This helps potential

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clients engage with your brand and products.

Discovering what works best takes time and effort. Do you know which
social media sites your ideal client prefers? Social media is a great way to
test your messaging. By doing that, you learn which messages get the best
response. This is important because you’ll get a better response when you
figure out how to communicate what’s valuable to them.

So I challenge you to reach out to your clients and talk to them this week.
Don’t view this as an inconvenience or worry you are bothering them.
They’ll happily answer your questions and be pleased you asked for their
input.

2. Showcase your expertise:-

Improve your expertise. This is one of the best ways to increase your
income. Unfortunately, many accounting professionals forget about this
business growth option.

Bookkeepers, tax advisors and CPA’s who are passionate about their work
run the risk of giving away too much for free. This is a red flag that you’re
under-pricing your services, undervaluing your time and struggling with low
business confidence. You’re basically telling yourself, and your clients, that
your service is not worth being paid for.

While having freebies and sharing your knowledge with potential clients is a
fantastic way for them to learn how you can help them, you’ll want to set
some limits. Start to ask yourself how you can specialize. This allows you
to do more of what you do best. Although it seems counter-intuitive, by

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narrowing your niche your firm becomes more profitable. Explore where
you can free your time by outsourcing some of your workload which
doesn’t need to be done by you.

Be brutally honest about your special skills. My clients call their special
skills their super power, since these are the things they perform best. It’s
easier to educate others about your super powers when you recognize its
value. Educating others is a sure way to become more trusted in your niche,
gain authority, and attract more opportunities.

Define your brand

Do you already earn enough money to live a fulfilling lifestyle? Everything’s

working fine and you don’t feel like growing. New potential clients
consistently reach out to you from various referral sources. This is
evidence that what you are doing is working.

Got it. As a price and profit coach for accounting professionals, I

encourage you to consider the big picture and you’re branding. A well
branded firm strategically helps you to rise above others in a crowded
market place.

Change is constant. Maybe you’re doing well now. Do you possess a solid
plan to ensure you’ll remain busy in a year from now? A solid brand keeps
you, and your
Accounting firm, top of mind.

Overall, your brand aligns with your core values. This influences your
messaging and virtual presence. Review your site so every page
KMBN308 SUMMER TRAINING PROJECT REPORT/MUSKAN TIWARI/2204220700034Page 58
consistently reflects your brand.

Tell your story and be authentic.

Your brand extends to your social media presence. Professional pictures

are a powerful way to represent you and your firm. The details you share
about yourself and your firm also establish your brand. How would your
personality and your
Values influence your brand?

4. Give people what they want:-

Consider current trends – are you a follower or a rule breaker? Instead of

following trends, determine what best serves your high value clients. It’s
okay to be contrary to what’s currently popular.

To offer services your clients want (and thus making sure they come back
to you and tell others about you), talk with your clients about their current
needs. Know your high value client. You’ll want to dedicate some time and

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resources. Market research, tracking behaviour and surveys are common
resources. They’re designed to identify the needs and Wants of your high
value clients.

Once you gather this information, now what? You’ll want to analyze the
results, fine tune the description of your high value client, and then use that
information To communicate your value.

Don’t reinvent the wheel

Growth minded accounting professionals possess a strong vision about
their firm’s success. Maybe you want to influence your industry standards
or elevate the client experience. Well, what’s your strategy to achieve those
results?
Raising the bar to challenge current standards involves risk. Especially
since there’s no guarantee how your new approach will be received, or how
long it will stay on top. So one popular strategy has you offer something
which is already accepted. Then improve your offer so it’s better than the
rest.

This might mean adding advisory services, educating about an easy

solution to an already common problem or combining two seemingly
impossible ideas to create something of high value. Consider what already
exists and how you can improve that service or experience.

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