Financial Statements National Mineral Development Corporation Hyderabad

FINANCIAL STATEMENTS
CHAPTER-I
INTRODUCTION
 Company Profile
 Industry Profile
S.D.G.S COLLEGE, HINDUPUR Page 1

INDUSTRY PROFILE
NATIONAL MINERAL DEVELOPMENT CORPORATION

LIMITED
HISTORY OF NMDC:
Incorporated in 1958 as a Government of India fully owned public
enterprise. NMDC is under the administrative control of the Ministry of Steel,
Government of India.
Since inception involved in the exploration of wide range of minerals
including iron ore, copper, rock phosphate, lime stone, dolomite, gypsum,
betonies, magnetite, diamond, tin, tungsten, graphite, beach sands etc.
India’s single largest iron ore producer and exporter, presently producing
20.74 million tons of iron ore from 3 fully mechanized mines viz., Bilabial
Deposit-14/11C, Bilabial Deposit-5,10/11A (Chhattisgarh State) and Donimalai
Iron Ore Mines (Karnataka State) which are awarded ISO 9001-2000
certification.
Operating the only mechanized diamond mine in the country producing
around 80,000 carats at Panda (Madhya Pradesh State).
Strong back up of an ISO 9001 certified R&D centre, which has been
declared as the "Centre of Excellence" in the field of mineral processing by the
Expert Group of UNIDO.
Consistent profit making and dividend paying company.
2012-2013 (April 2012 to March 2013) results:
Iron Ore Production (L+F) 20.74 million tons
Iron Ore Dispatch (L+F) 23.14 million tons
Diamonds production 78,068 carats
Sales Income Rs.21500 million
Profit before tax Rs. 11,900 million
No. of Employees : 5671

NMDC has made valuable and substantial contribution to the national

efforts in the mineral sector during the last four decades and has been recently
been accorded the status of schedule-A Public Sector Company .The Company has
been categorized by the Department of Public Enterprises as "Mini Ratna-I" Public
Sector enterprise.

INTRODUCTION ABOUT NMDC:
The story of NMDC is woven around the dreamy hills and the deep jungle
land of Bastar in Madhya Pradesh, known as Dandakaranya from the epic periods.
The Bailadila iron ore range – "The hump of an ox" – in the local dialect, was
remote, inaccessible and replete with wild life. The range contains 1200 million
tones of high grade iron ore distributed in 14 deposits. The entire area was brought
to the mainstream of civilization by the spectacular effort of NMDC by opening-
up of mines. Today, Bailadila is a name to reckon with in the world iron ore
market because of its super high grade iron ore. Bailadila complex possesses the
world’s best grade of hard lumpy ore having +66% iron content, free from sulphur
and other deleterious material and the best physical properties needed for steel
making.
In the past, NMDC had developed many mines like Kiriburu, Meghataburu
iron ore mines in Bihar, Khetri Copper deposit in Rajasthan, Kudremukh Iron Ore
Mine in Karnataka, Phosphate deposit in Mussorie, some of which were later
handed over to other companies in public sector and others became independent
companies.
NMDC is presently producing about 15.75 million tons of iron ore from its
Bailadila sector mines and 5.02 million tons from Donimalai sector mine and
about 80,000 carats of diamonds from Panna project.
Because of its excellent chemical and metallurgical properties, the

calibrated ore from Bailadila deposits has substituted the iron ore pellets in sponge
iron making and hence became an important raw material for three major gas-
based sponge iron steel producers like Essar Steel, Ispat Industries and Vikram
Ispat. In addition to these three, the entire requirement of the Visakhapatnam Steel
Plant is also being met from Bailadila.

The demand for steel will continue to grow in the years to come and this in
turn would call for increased demand for iron ore. NMDC is gearing itself to meet
the expected increase in demand by opening up new mines – Deposit-10&11A in
Bailadila sector and Kumaraswamy in Donimalai sector and this would add in
allowing the production capability to reach around 23 million tonnes per year.
NMDC is also diversifying into other raw materials for steel industry like
Low Silica Lime Stone. Production of Dead Burnt Magnesite and further value
addition is under study through it's subsidiary J K Mineral Development
Corporation Limited.
NMDC has taken over a Silica Sand Mining and beneficiaton project from
Uttar Pradesh State Mineral Development Corporation Ltd., The plant has been
designed to produce high purity beneficiated silica sand of around 300,000 tonnes
per year which is a raw material for production of float/sheet glass.
With a view to capture the opportunities now available following the Mini
Ratna recognition and its expertise in the field of mineral exploration and mining,
NMDC is venturing into development of high value minerals like gold,

diamond etc., as joint ventures in some of the African countries.
A memorandum of understanding has been signed between NMDC, Indian

Rare Earths Ltd., (IRE) and Andhra Pradesh Mineral Development Corporation to
establish a joint venture for the development of Bheemunipatnam Beach Sand.
The project envisages
Mining of beach sands, setting up of mineral separation plant for Ilmenite

concentrate and a downstream value addition plant for conversion of Ilmenite into
Synthetic Retile/TiO2 slag/TiO2 pigment with Pig iron as by- product.

National mineral development corporation limited (NMDC) was formed in

the public sector pursuant to the industrial policy resolution of 1956 for
exploration and exploitation of mineral resources. its share were disinvested in
1992-93 and have since been listed on the six major stock exchanges, viz .
Hyderabad, Mumbai, Delhi, kolkata, Bangalore and Chennai. In 1996-97, its share
was in favors of its employees too. A profit earning company, NMDC has been
paying dividends for the last 15 years. For the financial year ended 31 March
2012, it has paid a dividend of 114.5%.
NMDC ACTIVITIES:
Mining:
NMDC is operating three iron ore mines bailadila (chattisgarh) , two in the
bellary-hospet range (Karnataka), a diamond mine in panna (Madhya Pradesh) and
a silica sand mine at lalapur (uttar Pradesh) . Its mines a bailadila and donimalai
have been fully mechanized and accredited with ISO 9001-2000 certification.
It has established itself as an ‘eco-friendly mining company’. It has

obtained ISO 14001 accreditation for its major production units. Its efforts have
been commended by various authorities in the government and non-government
circles.
R&D centre
NMDC’s R&D centre, an ISO 9001-2000 certified unit, undertaken in-

house research work for development of new products, value addition, etc, and
collaborative works with government and non-government agencies. it has
developed technologies for production of value added products from mine waste
for commercialization.

Environment management
In NMDC, environment management is embedded in every activity and it is not

seen in isolation. In order to ensure pollution-free environment, it has built the
following programmes into the day to day working of the mines:
 Strategic planning prior to and during mining operations.
 regular physical monitoring for all environmental parameters, like micro-

meteorology, ambient air quality, water quality, flow measurements, work
zone and ambient noise levels, soil quality, detailed ecological and socio-
economic studies duly supported by processed satellite data.
 Environment predation works, like massive a forestation and reclamation of

mine dump spoils and mined out areas.
Corporate governance
NMDC believes in corporate governance by giving equal importance to all its

stakeholders especially employees, customers, environment, community and
shareholders.
Global compact
NMDC has become a member of the global compact (GC), an initiative of the
united nation to secure justice to all concerned in the context of business. As a
member, on human rights, collective bargaining, elimination of discrimination in
employment, taking care of environment and anti-corruption. The GC expects
their member to communicate their progress along with the principles laid down.
NMDC’s communication on progress has been hosted on the company’s.

Community development
The development of the company’s mines has been brought fruits of

civilization to these remote and once-inaccessible areas. Some of the important
developmental works carried out by NMDC for the local population are:
 Construction of schools, ashrams, colleges and skill development for the
local children and youth.
 Advanced medical facilities, ambulance services and free medicines for the
local population and advices at project hospitals.
 Shopping center / community centers, rural electrification, drinking water
facilities though hard pumps and wells.
 Communication facilities-rail and road connections, approach road, bridges
and culverts and facilities for post offices, banks, telecommunication, etc.
 Social awareness of the local population through campaign, cinema, TV,
etc.
NMDC has the following range of products and services to offer
PRODUCTS & SERVICES:
PRODUCTS:
a. Bailadila R O M (size : 10mm-150mm)

b. Balia lump (size: 6.3mm-40mm)
c. D R C LO (size: 10mm-40mm)
d. Donimali lump (size: 6mm-30mm)
f. Donimalai fines (size: 10mm)
g. Panna – rough diamonds
h. Silica sand of every high purity
(Silica content plus 99.5%; fe2 o3< 0.07%)

Hi-tech items:
a. ultra pure ferric oxide

b. reduced sponge iron powder
c. pigment grade ferric oxide
d. ferrite powders
SERVICES:
Consultancy services-
Mineral exploration, core drilling, preparation of feasibility reports.

Planning, development and commissioning of projects, preparation of DPR.
Physical/chemical testing of ores.
Ore beneficiation and flow sheet preparation.
De-bottlenecking of existing mining operations.
NMDC‘s full-fledged multi-disciplinary investigation division can undertake:
 Identification of potential mineral deposits of interest.

 Topographic survey.
 Survey of infrastructural facilities.
 Exploratory drilling.
 Initial exploration of identified deposits.
 Collaborative works in foreign countries.
Research & development:
The R&D centre has capabilities for mineralogy, batch ore dressing,
mineral beneficiation pilot plant agglomeration, pyre and hydro metallurgy, bulk
solids flow ability, analytical chemistry data processing and development of new
products.

Exploration is a continuous activity of NMDC. It undertakes exploration in

India and abroad. It has been improving its performance year after and will spare
no effort to scale greater heights in the years to come.
CHAPTER-II
CONCEPTUAL
FRAME WROK

INTRODUCTION
INTRODUCTION TO FINANCE
In our present day economy, “finance” is defined as the provision of
money at the time when it is required. Every enterprise, whether big, medium
of small, needs finance to carry on its operations and to achieve its targets. In
fact, finance is so indispensable today that it is rightly said that it is the
lifeblood of an enterprise. Without adequate finance, no enterprise can possibly
accomplish its objectives.
“Finance” is the life blood and nerve system of any business
organization. Just as circulation of blood, is necessary in the human body to
maintain life. Finance is necessary in the business org. for smooth running of
the business.
Financial management involves managerial activities concerned with
the procurement and utilization of funds for business purpose the finance
function does with procurement of money taking in to consideration of today’s
as well as future need and its effective utilization. Since finance is required to
purchase of machinery and raw materials, to pay salaries and wages also for
day-to-day expenses.
CLASSIFICATION OF FINANCE
1. Public finance
Public finance deals with the requirements, receipts and
disbursements of funds in the
(a). Government Institutions

(b). States
(c). Local self Governments
(d). Central Governments
2. Private finance
Private finance is concerned with requirements, receipts and
disbursements of funds in the case of
(a). Personal finance
(b). Business finance
i. Sole-proprietary finance
ii. Partnership firms finance
iii. Company of corporation finance
(c). Finance of Non-profit organizations.
Definitions of financial statement:
According to the American institute of certified public
accountants:-
“Financial statement reflect a comparison of facts, accounting conventions and
personnel judgments and conventions applied affects the materially”
“The financial statements provide a summary of the accounts of a

business enterprise, the balance sheet reflecting the assets, liabilities and
capital as on a certain date and the income statement showing the results of
operations during a certain period”.
_____ John N. Myer.
A financial statement is an organized collection of data according to
logical consistent accounting procedure. The financial statement contains the
summarized information of the firms financial affairs, organized
systematically. They are the means to present the firms financial situation to
owner’s creditors, and the general public. The top management is responsible
for the preparation of the financial statement.
Investors and financial analysts in order to examine the firm’s
performance use these statements in order to make resource allocation
decisions.
Financial statements are the outcome of summarizing process of
accounting. In the words of John N.Myer, “the financial statements provide a
summary of the accounts of a business enterprise, the balance sheet reflecting
the assets, liabilities and capital as on a certain date and the income statement
showing the result of operations during a certain period”.
TYPES OF FINANCIAL STATEMENTS
The term financial statement generally refers to two basic statements

that is Income statement, Balance sheet. The business may also refer to other
statements:
1. The statement of retained earnings.
2 .Statement of changes in financial position.
INCOME STATEMENT
It is also referred to as profit and loss account. It is the

financial statement, which presents the revenue and expenditure of a company
during an accounting period and shows the excess of revenue over expenses
and vice versa. It is generally considered to be the most useful of all financial
statements.
BALANCE SHEET
Balance sheet may be defined as “A statement of financial position of an
enterprise to a given date, which exhibits its assets, liabilities, capital reserves and
other account balances at their respective book value”. So the balance sheet

represents all assets owned by the business at a particular moment of time and the
claims of the owners and the outsiders against those assets at that time.
STATEMENT OF RETAINED EARNINGS OR PROPRIATION
ACCOUNT
This is a connecting link between profit and loss account and balance sheet.
This statement is prepared to show how the profits earned by a company during
a Year have been utilized as dividends on shares transfer to general reserve,
sinking fund or any other reserve, and how much profits are retained as surplus
profits.
STATEMENT OF SOURCES USED OF WORKING CAPITAL
A statement of sources and uses of working capital is a statement of which
reveals, the changes in working capital during the Year or stated period of
time. It is prepared for a better understanding of the affairs of a business
between two balance sheet dates.
CONCEPTUAL USES OF FINANCIAL STATEMENT
Shareholders:
The shareholders of a company are interested in the financial statements of
the company with a view to ascertaining the profitability and the financial
strength of the company. Its prospects for future growth, and also the
usefulness of the management to the company.
Management:
Managers of an enterprise are interested in the financial statements to
evaluate their role/performance in the management of the concern and to know
the progress, present position and future prospects of the concern for taking
decisions for the future.
Creditors:

Creditors are interested in the financial statements of the purchasing

concern to ascertaining its short-term liquidity.
Prospective investors:
Prospective investors are interested in the financial statement of a concern to
ascertain its financial strength and prospects.
Employers and trade unions:

The employers and trade unions are interested in the financial statement of
concern to certain its profitability and the ability to pay higher wages and
bonus etc.
LIMITATIONS OF FINANCIAL STATEMENT:
1. ONLY INTERIM REPORTS:
These statements don’t give a final picture of the concern. The data given in
these statements is only approximate. The actual position can only be determined
when the business is sold or liquidated.
2. DON’T GIVE EXTRA POSITION:
The financial statements are expressed in monetary values, so they appear to

give final and accurate position. The values of fixed assets in the balance sheet
neither represents the value for which fixed assets can be sold nor the amount which
will be required to replace these assets.
3.HISTORICAL COSTS:
The financial statements are prepared on the basis of historical costs or
original costs. The value of assets decreases with the passage of time current price

changes are not taken into account. The statements are not prepared keeping in
view the present economic conditions. The balance sheet loses the significance of
being an index of current economic realities.
4. ACT OF NON MONITARY FACTORS IGNORED:
There are certain factors which have a bearing on the financial position and
operating results of the business but they don’t become a part of these statements
because they cannot be measured in monetary terms. Such factors will reflect to the
reputation of the management.
NO PRECISION:
The precision of financial statement data is not possible because the
statements deal with matters which cannot be precisely stated. The data are recorded
by conventional procedures followed over the years. Various conventions,
postulates, personal judgments etc,.
FINANCIAL STATEMENT ANALYSIS:
Financial statements are prepared primarily for decision-making. They play

a dominant role in setting the framework of managerial decisions. The information
provided in the financial statement is of immense use in making decisions through
analysis and interpretation of financial statements.
Financial analysis is “the process of identifying the financial strengths and

weakness of the firm by properly establishing relationship between the items of
the balance sheet and the profit and loss account”. Balance sheet and profit and
loss account are considered as financial statements.
The term “financial statement analysis” includes both analysis, and

interpretation. The term analysis is used to mean the simplification of financial
data by methodical classification of the data given in the financial statements. The
term interpretation means ‘explaining the meaning and significance of the data so
simplified’. Thus it covers both analysis and interpretation of financial statements.
DEFINITIONS OF FINANCIAL STATEMENTS:
“Analyzing financial statements is a process of evaluating the relationship

between component parts of financial statement to obtain a better understanding of
a firm’s position and performance”
______“Metcalf and “Titard”
“Financial statement analysis is largely a study of relation among the

various financial factors in a business a disclosed by a single –of statements, and
study of the trend of these factors as shown in series of statements”.
______“Myers”
IMPORTANCE OF FINANCIAL STATEMENT ANALYSIS:
The analysis and interpretation of financial statements is an important

accounting activity. The end-users of business financial statements are interested
these statements primarily as an aid to determine the financial position and the
results of the operations.
The purpose of financial analysis is to diagnose the information contained in
financial statements so as to judge the profitability and financial soundness of the
firm.
1. Financial analyst analyses the financial statements with various tools of
analysis before commanding upon the financial health of the firm.
2. Need of financial statements diagnose the information contained in

financial statement. So as to judge the profitability and financial position of
the firm.
TYPES OF FINANCIAL STATEMENTS ANALYSIS:
ACCORDING TO MATERIAL USED:
1.External analysis: External analysis of financial statements is made by

those who do not have access to the detailed accounting records of the company
i.e. banks, creditors and general public those people depend almost entirely on
published financial statements. The main objective of such analysis varies from
party to party.
2.Internal analysis: Such analysis is made by the finance and accounting
department to help the management. These people have direct approach to the
relevant financial records so they can peep behind the two basis financial
statements and narrate the inside story. Such analysis emphasizes on the
performance appraisal and assessing the profitability of different activities.

ACCORDING TO OBJECTIVES OF ANALYSIS:
1. Long –term analysis: In the long-term the company must earn a

minimum amount sufficient to maintain a suitable rate of return on investment to
provide for the necessary growth and development of the company and to meet the
cost of capital. Financial planning is also necessary for the continued success of
the concern. Thus, in the long run analysis stress is on the stability and earning
potentiality of the concern. In the long-term analysis the fixed assets, long-term
debt structure and the ownership interest is analyzed.
2. Short-term analysis: The short-term analysis of financial statement is

mainly concerned with the working capital analysis. In short run a company must
have ample funds readily available to meet its current needs and sufficient
borrowing capacity to meet the contingencies. Hence, in short-term analysis the
current assets and the current liabilities are analyzed and cash position of the
concern is determined. For short-term analysis the ratio analysis is very useful.
VARIOUS TOOLS OF FINANCIAL ANALYSIS STATEMENTS:
The analysis of financial statements consists of study of the relationships

between one or more financial variables and trends to determine whether or not the
financial position of the concern and its operating efficiency have been
satisfactory. In the process of this analysis the financial analysts use various tools
or methods or devices. The analytical tools generally available to an analyst for
purposes are as follows:

1. Comparative financial statements:

The preparations of comparative financial statements are important devices
of horizontal financial analysis. Financial data becomes more meaningful when
compared with similar data for a previous period of prior periods. Statements
prepare form that reflects financial data for two or more periods are known as
comparative Statements. Annual data can be compared with similar data for prior
years. Such statements are very helpful in measuring the effects of the conduct of a
business during the period under consideration. Comparative statements can be
prepared for both types of financial statement balance sheet as well as profit and
loss account. The comparative profit and loss accounts will present a review of
operating activities of the business. The comparative balance sheet shows the
operations on the assets and liabilities i.e. change in the financial position during
the period under consideration.
2. Common size Financial Statements:
Common size shows the relation of each component to the whole. It is useful
in vertical financial analysis and comparison of two business enterprises at a
certain date. Common size financial statements are those in which figures reported
are converted into percentages to some common base. Common size statements
can be preferred for both types of financial statement balance sheet as well as
profit and loss account.

Trend Analysis:
Trend analysis is also an important tool of horizontal financial analysis
under this technique of analysis, the ratios of different items for various periods
are calculated and then a comparison is made. An analysis of the ratios over the
past few years may well suggested the trend or direction in which the concern is
going upward and downward.
Ratio Analysis:
Ratio analysis is an important and widely used tool of analysis of financial
statements. It is essentially an attempt to develop meaningful relationship between
individual item in the balance sheet or profit and loss account. The objective and
utility of ratio analysis as a technique of financial analysis is confined not only to
the internal parties but to the credit suppliers, banks and money lending
institutions also. The ratio analysis highlights the liquidity, solvency, profitability
and capital gearing etc,.
Funds Flow Analysis:
Funds flow analysis has become an important tool in the analytical kit of
financial analyst; credit granting institutions and financial managers. The financial
analyst must know the purpose for which the loan was utilized and the source from
which it was obtained. This will help him in making a better estimate about the
company’s financial position and policies. This analysis reveals the change in
working capital position. It tells about the sources from which the working capital
was obtained and the purpose for which it was used. It brings out the changes,
which have taken behind the balance sheet.
Cash flow Analysis:
Cash flow analysis is another important of analyzing financial
statements. It shows the sources and uses of cash prepared from the historical data.
It reveals the inflow and outflow of cash during the previous period. Its main
function is to explain the causes in cash balance of the firm of two different dates.

CVP Analysis:
Cost-volume-profit analysis is an important tool of profit planning. It studies
the relationship between cost and volume of production, sales and profit. It is an
important tool for the management for decision-making since both cost and
financial records provide the data. It tells the volume of sales at which the will
break-even, the effect on profit on account of variation in output, selling price and
cost, and finally, the quantity to be produced and sold to reach the target profit
level.
PROCEDURE OF ANALYSIS:
1. Deciding upon the extent of analysis:

First of all the depth objective and extent of analysis will be determined by
the analyst. The determination of there basic facts determines the scope of
analysis, tool of analysis and the amount and quality of financial data to be
required.
2. Going through the financial statements:
Before analyzing and preparing any statements it is necessary for the
analyst to go through the various financial statements of the subject firm.
3. Collection of necessary information:
The analyst should collect other useful information from the
management useful for analysis.
4. Rearranging of financial data:
Before making actual analysis and interpretation the analyst must rearrange the
data provided by these statements in useful manner. The approximation of figures,
re-classification of consolidation of items, ect; is done in this step.
5. Interpretation and presentation:
After analyzing the statements the interpretation is made and the inferences drawn
from the analysis are presented to the management.

APPLICATIONS OF FINANCIAL STATEMENT ANALYSIS:
1. To the Financial Executives:
The first party in the financial statement analysis is the financial

department of the business concern itself. To the financial manager such analysis
provides a deep in night into the financial condition of the enterprise, and a view
of the past performance, which helps in future decision-making. The financial
statements give vital information concerning the position of the enterprise as well
as the results of the operations.
2. To the Top Management:
The top management of the concern is also in creased in the analysis of these
statement because it help them in reaching conclusion regarding.
a. Performance appraisal of over-all business activities,

b. Inquiry about the current financial position,
c. Questions concerning the relationship of earnings to
investment.
3. To the creditors:
The analysis of these statements is very useful to the creditors also. Some of
the aspects of an enterprise’s operations which are of interest to the Creditors in
this regard the liquidity of funds, soundness of the financial structure, profitability
of the operations, effectiveness of working capital management, ect. The bankers
and creditors of a business enterprise are interested in its cash generation and
creditworthiness relating to repayments of principal amount advanced as well
interest payments due as per agreed schedules. They get this all information from
the analysis of balance sheet and income statement of the company.
4. To the Investors and others:
Investors’ presents as well as prospective are also interested in the

measurement of earning capacity of the securities. Investors have been
increasingly concerned with the cash generation capability of an enterprise in
terms of flexibility available to such enterprises to acquire other business and new
assets on an advantageous basis. For this purpose, cash flow and funds flow
analysis have provided to be very useful.
LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS:
Financial analysis is a powerful mechanism, which helps in ascertaining the

strengths and weakness in the operations and financial position of an enterprise.
How ever, this analysis subject to certain limitations. Most these limitations are as
follows:
1. FINANCIAL ANALYSIS IS ONLY A MEANS:
Financial analysis is means to an end and not the end itself. The analysis
should be used as a starting point and the conclusion should be drawn not in
isolation, but keeping in view the overall picture and the prevailing economies and
political situation.
2. IGNORES PRICE LEVEL CHANGES:
Financial statements are normally prepared on the concepts of historical cost.
They do not reflect values in terms of current costs.
Thus financial analysis based on such financial statements would not portray the
effects of price level changes over the period.

FINANCIAL STATEMENTS ARE ESSENTIALLY INTERIM REPORTS:

The profit shown by P&L a/c and the financial position depicted by the
balance sheet is not exact. The exact position can be known only when the
business is closed down. Again the existence of contingent liabilities and deferred
revenue expenditure make them more imprecise.
ACCOUNTING CONCEPTS AND CONVENTIONS:

Financial statements are prepared on the basis of certain accounting
concepts and conventions. On account of this reason the financial position as
disclosed by these statements may not disclose true income of the business since
probable losses are considered while probable incomes are ignored.
INFUENCE OF PESONAL JUDGENENT:

Many items are left to the personal judgment of the accountant. For example,
the methods of depreciation, mode of amortization of fixed assets, treatments
deferred revenue expenditure-all depends up his competence and integrity.
However, the convention consistency acts as controlling factor on making
indiscreet personal judgments.
DISCLOSE ONLY MONETARY FACTS:

Financial statements do not depict those facts, which cannot be
expressed in terms money. For example, development of term of loyal and
efficient workers, enlightened management, the reputation and prestige of
management with the public, are matters which are considerable importance for
the business, but they are no where depicted by financial statements.

CHAPTER-III
DESIGN
OF THE
STUDY

NEED FOR STUDY
 Financial analyst analyses the financial statements with various tools of

analysis before commanding upon the financial health of the firm.
 Essential to bring out the history.
 Significance and meaning of the financial statements.
OBJECTIVES OF THE FINANCIAL STATEMENT ANALYSIS:
To estimate the earnings capacity of the firm.
To gauge the financial position and financial performance of

the firm.
To determine the long-term liquidity of the funds as well as solvency.
To decide about the future capacity of the firm.
To decide about the future prospects of the firm.
Significance and meaning of the financial statements.

DESIGN OF THE STUDY:
a. Depict True Financial Position:

The information contained in the financial statements should be
such that a true and correct idea is taken about the financial position of the
concern. No material information should be with held while preparing these
statements.
b. Effective Presentation:
The financial statements should be presented in a simple and
lucid way so as to make them easily understandable.
c. Relevance:
Financial statements should be relevant to the objectives of the
enterprise. This will be possible when the person preparing these statements is able
to properly utilize the accounting information.
d. Attractive:
The financial statements should be prepared in such a way that
important information is underlined so that it attracts the eye of the reader.
e. Easiness:
Financial statements should be easily prepared. The balances of
different ledger accounts should be easily taken to these statements. The
calculation work should be minimum possible while preparing these statements.

RESEARCH DESIGN
This is a systematic way to solve the research problem and it is

important component for the study without which researches may not be able to
obtain the format.
MEANING OF RESEARCH DESIGN
The formidable problem that follows the task of defining the

research problem is the preparation of design of the research project, popularly
known as the research design, decision regarding what, where, when, how much,
by what means concerning an inquiry of a research study constitute a research
design. A research design is the arrangement of conditions for collection and
analysis of data in a manager that aims to combine for collection and analysis of
data relevance to the research purpose with economy in procedure.
SOURCES OF DATA
Data was collected based on two sources.

 Primary data.
 Secondary data.
Primary data:
The Primary data are those information’s, which are collected afresh and
for the first time, and thus happen to be original in character. Primary
collected from Nestle India Ltd.

Secondary data:
The Secondary data are those which have already been collected by some
other agency and which have already been processed. The sources of Secondary
data are Annual Reports, browsing Internet, through magazines.
1. It includes data gathered from the annual reports of NMDC.

2. Articles are collected from official website of NMDC.
METHODOLOGY USED:
1. TYPES OF FINANCIAL STATEMENTS ADOPTED
Following two types of financial statements are adopted in

analyzing the firm financial position.
1. BALANCE SHEET.
2. INCOME STATEMENTS
2. TOOLS OF FINANCIAL STATEMENT ANALYSIS USED
The following financial analysis tools are used in order to

interpret the financial position of the firm.
1. COMPARATIVE STATEMENTS.

CHAPTER-IV
DATA ANALYSIS
AND
PRESENTATION

FINANACIAL STATEMENTS
COMPARATIVE FINANCIAL STATEMENTS:
The comparative statements are important tools of horizontal financial
analysis. Financial data become more meaningful when compared with similar
data for a previous period or number of previous periods. Such analysis help us in
forming an opinion regarding the progress of the enterprise.
“Comparative financial statements are statements of the financial position of a
business so Designed as to provide time perspective to the consideration of various
element of financial position embodied in such statements”
FOULKE.
In any comparative statement columns for than one years position or
working can be drawn and figures may be provided. The annual data can
compared with similar data for previous years. The comparative analysis can be
done in financial statements such as balance sheet and income statements. In such
statements the figures can be shown at the fool wing values:
1. Absolute money values of each item separately for each of the periods
stated.
2. Increase and decrease in term of percentages.
3. Increase and decrease in absolute data in term of money values.
4. Percentage of totals.
IMPORTANCE:
1. Comparative statement is very useful in measuring the effects of the
conduct of a business enterprise over the period under consideration.

2. Financial data becomes more meaningful when compared with similar

data for a previous period or number of prior periods.
3. Annual data can be compared with similar data for prior years. Such
statements are very helpful in measuring the effects of the conduct of a
business during the period under consideration.
4. Comparative statements can be prepared for both types of financial
statement balance sheet as well as profit and loss account. The
comparative and loss accounts will present a review of operating activities
of the business. The comparative balance sheet shows the effect of
operations on the assets and liabilities, i.e; change in the position during
the period under consideration.
Comparative statements can be prepared for both types of financial
statement balance sheet as well as profit and loss account
1. COMPARATIVE BALANCE SHEET:
The comparative balance sheet analysis is the study of the trend of the same
items, group of items and computed items in two or more balance business
enterprise on different dates. The change in period balance sheet items reflect the
conduct of a business. The changes in periodic balance sheet items reflect the
conduct of a business. The changes can be observed by comparison of the balance
sheet at the beginning and at the end of period and these changes can help in
forming an opinion about the progress of an enterprise.
The comparative balance sheet has two columns for data of original balance
sheets. The third column is used to show increase in figures. The fourth column
may be added for going percentages of increase or decreases.
2. COMPARATIVE INCOME STATEMENT:
The income statement gives the results of the operations of business. The
comparative income statement gives an idea of the progress of a business over a
period of time.

The changes in absolute money values and percentages can be determined up

analyze the profitability of the business.
The comparative income statement has two columns for the data of original
income statements. The third column is used to show increase in figures. The
fourth column may be added for giving percentages of increases or decreases.
Comparative balance sheet as on March 2013-2014.

(Rs. In Crore)
Particulars 2013 Rs. 2014 Rs. Increase/ Percentage of
decrease incr/decre
Capital & liabilities 132.16 132.16 Nil Nil

Share capital
Reserves & surplus 1893.20 2471.36 + 578.16 + 30.53
Grants-in-aid 1.95 0.17 - 1.78 - 91.28

Differed tax liability 0.00 12.13 + 12.13 + 12.13
Current liabilities & 675.68 866.64 + 190.96 + 28.26

provisions
Total liabilities 2702.99 3482.46 + 779.47 + 28.83
Net Block 574.27 537.44 - 36.83 - 6.41

Work-in-progress 66.24 31.47 - 34.77 - 52.49
Investments 74.02 74.02 ------- -------

Differed tax assets 6.87 0.00 - 6.87 - 100.00
Current assets, Loans & 1923.10 2804.78 + 881.68 + 45.84

Advances
Miscellaneous Expenditure 58.49 34.75 - 23.74 + 40.58
Total assets 2702.99 3482.46 779.47 28.83

INTERPRETATION
The comparative balance sheet of the company reveals that during 2013-14
information about financial position.
1. There have been increase in Reserves & Surplus of 578.16 Crore

30.53%.
2. The current liabilities have been increased 190.96 Crore 28.26%.
3. The Current assets, Loans & Advances have been increased 881.68
Crore 45.84%.
4. The Net Block have been decreased 36.83 Crore -6.48%.
5. In the year 2013-14 the Investments are no decrease and no increase.
6. The overall financial position of the company is satisfactory.

(Rs. In Crore)
decrease incr/decre
Capital & liabilities 132.16 132.16 -------- --------

Share capital
Grants-in-aid 2.04 1.95 - 0.09 - 4.41

Differed tax liability 0.00 0.00 -------- --------

provisions
Total liabilities 2219.15 2702.99 483.84 21.80
Net Block 285.16 574.27 + 289.11 + 101.38

Work-in-progress 374.34 66.24 - 308.10 - 82.30
Investments 34.88 74.02 + 39.14 + 112.21

Differed tax assets 13.64 6.87 - 6.77 - 49.63

Advances
Miscellaneous Expenditure 53.17 58.47 + 5.32 + 10.00
Total assets 2219.15 2702.99 483.84 21.80

INTERPRETATION

25.15%.
2. The current liabilities and provisions have been increased 103.48 Crore
18.08%.
3. The Current assets, Loans & Advances have been increased 465.14 Crore
31.90%.
4. The Net Block have been increased 289.11 Crore 101.38%.
5. In the year 2012-13 the Investments have been increase 39.14 Crore
112.21%.

(Rs. In Crore)
decrease incr/decre
Capital & liabilities 132.16 132.16 ------ --------

Share capital
Grants-in-aid 1.94 2.04 + 0.10 + 5.15

Differed tax liability 0.00 0.00 0.00 0.00

provisions
Net Block 272.63 285.16 + 12.53 + 4.60

Work-in-progress 340.85 374.34 + 33.49 + 9.82
Investments 16.53 34.88 + 18.35 + 111.01

Differed tax assets 9.94 13.64 + 3.73 + 37.63

Advances
Total assets 1833.77 2219.15 385.39 21.01

INTERPRETATION

21.47%.
2. The current liabilities and provisions have been increased 117.81 Crore
25.92%.
3.The Current assets, Loans & Advances have been increased 309.40 Crore
26.93%.
5. In the year 2011-12 the Investments have been increase 18.35 Crore
111.01%.

(Rs. In Crore)
decrease incr/decre
Capital & liabilities 132.16 132.16 ------- --------

Share capital
Grants-in-aid 1.94 1.94 0.00 0.00

Differed tax liability 0.00 0.00 0.00 0.00
Current liabilities & 496.37 454.40 - 41.97 - 8.45

provisions
Net Block 293.73 272.63 - 21.10 - 7.18

Work-in-progress 306.22 340.85 + 34.63 - 11.30
Investments 35.81 16.53 - 19.28 - 53.84

Differed tax assets 0.00 9.94 + 9.94 + 994

Advances
Total assets 1647.47 1833.77 186.3 11.30

INTERPRETATION

22.43%.
2. The current liabilities and provisions have been decreased 41.97 Crore
8.45%.
3. The Current assets, Loans & Advances have been increased 162.16
Crore 16.43%.
4. The Net Block have been decreased 21.10 Crore -7.18%.
5. In the year 2010-11 the Investments have been decrease 19.28 Crore
53.84%.

(Rs. In Crore)
decrease incr/decre
Capital & liabilities 132.16 132.16 ------- ---------

Share capital
Grants-in-aid 1.94 1.94 ------- --------

Differed tax liability 0.00 0.00 -------- ---------
Current liabilities & 522.67 496.37 - 26.30 - 5.03

provisions
Net Block 274.75 293.73 + 19.98 6.90

Work-in-progress 272.34 306.22 + 33.88 12.44
Investments 43.59 35.81 - 7.78 17.84

Differed tax assets 0.00 0.00 ------- --------
Current assets, Loans & 863.02 986.40 + 123.38 14.30

Advances
Miscellaneous Expenditure 21.69 25.31 + 3.62 16.69
Total assets 1475.39 1647.47 172.10 11.66

INTERPRETATION

24.25%.
2. The current liabilities and provisions have been decreased 26.30 Crore -
5.03%.
3.The Current assets, Loans & Advances have been increased 123.38 Crore
14.30%.
5. In the year 2009-10 the Investments have been decrease -7.78 Crore
17.84%.

Particulars Rs 2013 Rs. Rs 2014 % of incr/decre

Rs.
INCOME
Sales 1448.85 2226.55 777.7 53.67705
Income from services 4.84 3.44 -1.4 -28.9256
Other Income 77.07 105.28 28.21 36.60309
Accretion(Decretion) to stock 1.94 -3.75 -5.69 -293.299
TOTAL 1.532.70 2.331.52 798.82
EXPENDITURE
Raising & Transportation charges 10.63 12.69 2.06 19.37912
Consumption of Raw Material , Stores & Spares 114.75 127.78 13.03 11.35512
Power 41.86 42.99 1.13 2.699474
Payments & Benefits to employees 190.59 190.96 0.37 0.194134
Repairs & Maintenance 13.44 18.38 4.94 36.75595
Royalty 38.97 51.05 12.08 30.9982
Selling Expenses-Freight Outwards 292.38 340.7
-Others 112.85 107.47
405.23 448.17 42.94 10.59645
Interest 0 0 0
other expenses 52.52 148.48 95.96 182.7113
Depreciation 53.98 63.84 9.86 18.26602
Miscellaneous/Promotional/Deferred 2.95 3.8 0.85 28.81356
Revenue Expenditure written off 0
0
Gross Expenditure 924.92 1108.14 183.22 19.8092 8
Less:Transfer to Capital Accounts 8.63 0.71 -7.92 -91.7729
Net Expenditure 916.29 1107.43 191.14 20.86021
Profit before prior Year items 616.41 1224.09 607.68 98.58373
Add/(Less) prior Year items 0.39 -0.44 -0.05 -212.821
Profit before taxes 616.02 1223.65 607.63 98.63803
Less:Provision -Taxation-Current Year 172.5 467.5 0
-Earlier Years(Net) 2.35 -14.88 0
-Interest on Income 1.77 -3.41 0
176.62 449.21 272.59 154.337
Tax
COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED ON MARCH 2013-14
Add: Deferred Tax adjustment for the year -6.77 -19.11 -12.34 182.2747
Profit after taxes 432.63 755.44 322.81 74.61572

Profit brought forward from previous Year 0.08 0.53 0.45 562.5
Profit available for Appropriations 432.71 755.97 323.26 74.70592
Less: Appropriations: 0
Proposed Dividend 46.25 151.32
Tax on Proposed Dividend 5.93 20.74
General Reserve 380.01 583.38
432.18 755.44 323.26 74.79754
Balance carried over to Balance Sheet 0.53 0.53 0 0
INTERPRETATION
The comparative income statement given above reveals that during 2013-14
information about profit or loss
1. The Sales have been increased 777.7 Crore 53.67%.
2. The Net Expenditure have been increased 191.14 Crore 20.86%.
3. In the company, the Net profit Before tax is increased by 607.63 Crore
98.63%.
4. Net profit After tax is increased by 322.81 Crore 74.61.
6. It may be concluded that there is a sufficient progress in the company

and the overall profitability is good.

COMPARATIVE INCOME STATEMENT FOR THE YEAR ENDED ON

MARCH 2012-13
Particulars Rs 2012 Rs. Rs 2013 Rs. Increase/ Percentag
decrease e of
incr/decre
INCOME
Sales 1209.58 1448.85 239.27 19.78125
Income from services 4.65 4.84 0.19 4.086022
Other Income 96.92 77.07 -19.85 -20.4808
Accretion(Decretion) to stock -17.95 1.94 19.89 -110.808
TOTAL 1293.2 1.532.70 239.5 18.51995
EXPENDITURE
Consumption of Raw Material ,
Stores & Spares 99.99 114.75 14.76 14.76148
Power 39.88 41.86 1.98 4.964895
Royalty 35.86 38.97 3.11 8.672616
-Others 117.68 112.85
437.63 405.23 -32.4 -7.40351
Interest 0 0 0
other expenses 44.16 52.52 8.36 18.93116
Depreciation 42.28 53.98 11.7 27.67266
Revenue Expenditure written off
Gross Expenditure 890.36 924.92 34.56 3.881576

Net Expenditure 873.28 916.29 43.01 4.92511
Add/(Less) prior Year items 0.26 0.39 0.13 50
Less:Provision -Taxation-Current
Year 115.51 172.5
-Earlier Years(Net) 6.33 2.35
-Interest on Income 2.52 1.77
111.7 176.62 64.92 58.11996

Tax
Add: Deferred Tax adjustment for
the year 3.73 -6.77 -10.5 -281.501
Profit brought forward from
previous Year 1.6 0.08 -1.52 -95
Less: Appropriations:
General Reserve 269 380.01
313.73 432.18 118.45 37.75539
Balance carried over to Balance
Sheet 0.08 0.53 0.45 562.5
INTERPRETATION
46.60%.



MARCH 2011-12
Particulars Rs 2011 Rs. Rs 2012 Rs. Increase/ Percentag
(In (In decrease e of
crore) crore) incr/decre
e
INCOME
Sales 1127.08 1209.58 82.5 7.3198
Other Income 99.86 96.92 -2.94 -2.94412
Accretion(Decretion) to stock 38.19 -17.95 -56.14 -147.002
TOTAL 1268.1 1293.2 25.1 1.979339
EXPENDITURE
Stores & Spares 100.12 99.99 -0.13 -0.12984
Power 37.41 39.88 2.47 6.602513
Payments & Benefits to employees 174.02 171.82 -2.2 -1.26422
Repairs & Maintenance 11.66 11.46 -0.2 -1.71527
Royalty 35.42 35.86 0.44 1.242236
-Others 103.71 117.68
458.18 437.63 -20.55 -4.48514
0
Interest 5.07 0 -5.07 -100
other expenses 73.69 44.16 -29.53 -40.0733
Depreciation 39.92 42.28 2.36 5.911824
Gross Expenditure 941.74 890.36 -51.38 -5.45586

Net Expenditure 924.53 873.28 -51.25 -5.54336
Add/(Less) prior Year items 0.36 0.26 -0.1 -27.7778
Year 87 115.51
92.63 111.7 19.07 20.58728
Tax

the year 5.24 3.73 -1.51 -28.8168
previous Year 1.1 1.6 0.5 45.45455
Less: Appropriations:
Tax on Proposed Dividend 0 5.08
General Reserve 223 269
256.04 313.73 57.69 22.53164
Sheet 1.6 0.08 -1.52 -95
INTERPRETATION
2. The Net Expenditure have been decreased -51.25 Crore 5.54%.
22.16%.



MARCH 2010-11
Particulars Rs 2010 Rs. Rs 2011 Rs. Increase/ Percentage
(In (In decrease of
crore) crore) incr/decree
INCOME
Sales 1012.1 1127.08 114.98 11.36054
Other Income 59.95 99.86 39.91 66.57214
Accretion(Decretion) to stock 12.86 38.19 25.33 196.9673
TOTAL 1087.86 1268.1 180.24 16.56831
EXPENDITURE
Stores & Spares 90.23 100.12 9.89 10.96088
Power 35.71 37.41 1.7 4.760571
Repairs & Maintenance 12.24 11.66 -0.58 -4.73856
Royalty 33.69 35.42 1.73 5.135055
-Others 33.51 103.71
365.26 458.18 92.92 25.43941
Interest 0 5.07 5.07

other expenses 43.28 73.69 30.41 70.2634
Depreciation 36.1 39.92 3.82 10.58172
Miscellaneous/Promotional/Deferred 0.07 0.07 0 0

Less:Transfer to Capital Accounts 16.25 17.21 0.96 5.907692
Net Expenditure 770.68 924.53 153.85 19.96289
Year 77.71 87
81.05 92.63 11.58 14.28748
Tax

the year 0 5.24 5.24
previous Year 0.51 1.1 0.59 115.6863
Less: Appropriations: 237.6 -237.6 -100
Tax on Proposed Dividend 3.46 0
236.5 256.04 19.54 8.262156
Sheet 1.1 1.6 0.5 45.45455
INTERPRETATION
8.82%.
4. Net profit After tax is increased by 21.56 Crore 9.17%.



MARCH 2009-10
Particulars Rs 2009 Rs 2010 Rs. Increase Percentage
Rs. (In (In / of
crore) crore) decreas incr/decree
e
INCOME
Sales 786.16 1012.1 225.94 28.7397
Income from services 4.33 2.95 -1.38 -31.8707
Other Income 49.12 59.95 10.83 22.04805
Accretion(Decretion) to stock 5.18 12.86 7.68 148.2625
TOTAL 844.78 1087.86 243.08 28.77436
EXPENDITURE
Raising & Transportation charges 4.9 5.88 0.98 20
Stores & Spares 74.41 90.23 15.82 21.26058
Power 33.35 35.71 2.36 7.076462
Royalty 26.54 33.69 7.15 26.94047
-Others 13.36 33.51
273.29 365.26 91.97 33.6529
Interest 0 0
other expenses 52.53 43.28 -9.25 -17.609
Depreciation 33.35 36.1 2.75 8.245877
Miscellaneous/Promotional/Deferred 0.07 0.07 0 0

Net Expenditure 634.52 770.68 136.16 21.45874
Year 46 77.71
47.71 81.05 33.34 69.88053
Tax

the year 0
Profit after taxes 160 234.98 74.98 46.8625
previous Year 4 0.51 -3.49 -87.25
Less: Appropriations: 165.78 237.6 71.82 43.32248
163.67 236.5 72.83 44.49808
Sheet 2.11 1.1 -1.01 -47.8673
INTERPRETATION
1. The Sales have been increased by 225.94 Crore 28.73%.
52.15%.
4. Net profit After tax is increased by 74.98 Crore 46.86%.


WE CAN SEE FINANCIAL POSITION OF THE ORGANISATION IN

THIS CHART:
5 YEARS % OF FINANCIAL POSITION

YEARS PERCENTAGE
2009-10
11.66
2010-11 11.3
2011-12 21.01
2012-13 21.8
2013-14 28.83

WE CAN SEE NET PROFIT FLOW IN THIS CHART:
5 YEARS PROFIT PERCENTAGE

YEARS PROFIT %
2009-10 46.86
2010-11 9.17
2011-12 21.7
2012-13 38.57
2013-14 74.61

CHAPTER-V
FINDINGS
&
SUGGESTIONS

FINDINGS
 The Reserves & Surplus position shows an increased 30.5% from the last
year 25.15%.
 The Profit percentage is also increasing in every year. The current year
percentage is 74.61%.
 The company maintained a steady growth from year 2010-2014
 The financial position of the company is also satisfactory.
 When compared to the previous years, NMDC has maintained a good level
of profits.
 The overall company position is good.

SUGGESTIONS
 If both the current assists and current liabilities are managed properly then the
management would be able to achieve the targets
 The company may concentrate on the movement of the inventory by using

inventory management techniques.
 The company may concentrate on the increase in profits by reducing operating

expenses.
 The company’s Fixed Assets though managed properly it is bellow the capacity
so the company should try to make them use efficiently.
 The company should maintain same current year credit management policy, if
the company is doing well.

BIBLIOGRAPHY
1. Financial Management. R.K. SHARMA
2. Financial Management. I.M. PANDEY
3. MNDC Annual Reports 2008 to 2013.
WEBSITES:
www.nmdc-india.com
www.google.com

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FINANCIAL STATEMENTS

S.D.G.S COLLEGE, HINDUPUR Page 1

NATIONAL MINERAL DEVELOPMENT CORPORATION

S.D.G.S COLLEGE, HINDUPUR Page 2

NMDC has made valuable and substantial contribution to the national

S.D.G.S COLLEGE, HINDUPUR Page 3

INTRODUCTION ABOUT NMDC:

Because of its excellent chemical and metallurgical properties, the

S.D.G.S COLLEGE, HINDUPUR Page 4

NMDC is venturing into development of high value minerals like gold,

A memorandum of understanding has been signed between NMDC, Indian

Mining of beach sands, setting up of mineral separation plant for Ilmenite

S.D.G.S COLLEGE, HINDUPUR Page 5

National mineral development corporation limited (NMDC) was formed in

It has established itself as an ‘eco-friendly mining company’. It has

NMDC’s R&D centre, an ISO 9001-2000 certified unit, undertaken in-

S.D.G.S COLLEGE, HINDUPUR Page 6

In NMDC, environment management is embedded in every activity and it is not

 Strategic planning prior to and during mining operations.

 regular physical monitoring for all environmental parameters, like micro-

 Environment predation works, like massive a forestation and reclamation of

NMDC believes in corporate governance by giving equal importance to all its

S.D.G.S COLLEGE, HINDUPUR Page 7

The development of the company’s mines has been brought fruits of

NMDC has the following range of products and services to offer

PRODUCTS & SERVICES:

a. Bailadila R O M (size : 10mm-150mm)

S.D.G.S COLLEGE, HINDUPUR Page 8

a. ultra pure ferric oxide

Mineral exploration, core drilling, preparation of feasibility reports.

 Identification of potential mineral deposits of interest.

S.D.G.S COLLEGE, HINDUPUR Page 9

Exploration is a continuous activity of NMDC. It undertakes exploration in

S.D.G.S COLLEGE, HINDUPUR Page 10

S.D.G.S COLLEGE, HINDUPUR Page 11

“The financial statements provide a summary of the accounts of a

TYPES OF FINANCIAL STATEMENTS

The term financial statement generally refers to two basic statements

It is also referred to as profit and loss account. It is the

S.D.G.S COLLEGE, HINDUPUR Page 13

CONCEPTUAL USES OF FINANCIAL STATEMENT

S.D.G.S COLLEGE, HINDUPUR Page 14

Creditors are interested in the financial statements of the purchasing

Employers and trade unions:

LIMITATIONS OF FINANCIAL STATEMENT:

1. ONLY INTERIM REPORTS:

2. DON’T GIVE EXTRA POSITION:

The financial statements are expressed in monetary values, so they appear to

S.D.G.S COLLEGE, HINDUPUR Page 15

FINANCIAL STATEMENT ANALYSIS:

Financial statements are prepared primarily for decision-making. They play

Financial analysis is “the process of identifying the financial strengths and

The term “financial statement analysis” includes both analysis, and

“Analyzing financial statements is a process of evaluating the relationship

“Financial statement analysis is largely a study of relation among the

The analysis and interpretation of financial statements is an important

2. Need of financial statements diagnose the information contained in

TYPES OF FINANCIAL STATEMENTS ANALYSIS: