PROJECT REPORT on FUNDAMENTAL RATIO ANALYSIS BY Dhanush S P 1NH18MBA19 Submitted to DEPARTMENT OF MANAGEMENT STUDIES NEW HORIZON COLLEGE OF ENGINEERING, OUTER RING ROAD, MARATHALLI, BENGALURU In partial fulfilment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Under the guidance of Prof.Sainath Professor,(Dept of Management) 2018 - 2020 Sensitivity: Internal & Restricted CERTIFICATE This is to certify that Dhanush S P bearing USN 1NH18MBA19, is a bonafide student of Master of Business Administration course of the Institute 2018-20, autonomous program, affiliated to Visvesvaraya Technological University, Belgaum. The project report on “FUNDAMENTAL RATIO ANALYISIS” is prepared by him under the guidance of Prof.Sainath, in partial fulfilment of requirements for the award of the degree of Master of Business Administration of Visvesvaraya Technological University, Belgaum Karnataka. Signature of Internal Guide Signature of HOD Signature of Principal Sensitivity: Internal & Restricted DECLARATION I, Dhanush SP, hereby declare that the project report on “Fundamental Ratio Analysis” with reference to “JOHN DISTILLERS PVT LTD” prepared by me under the guidance of Prof.Sainath, faculty of M.B.A Department, New Horizon College of Engineering. I also declare that this project report is towards the partial fulfilment of the university regulations for the award of the degree of Master of Business Administration by Visvesvaraya Technological University, Belgaum. I have undergone an industry project for a period of Twelve weeks. I further declare that this report is based on the original study undertaken by me and has not been submitted for the award of a degree/diploma from any other University / Institution. Signature of Student Place: Date: 1 | P a g e 2 | P a g e ACKNOWLEDGEMENT The successful completion of the project would not have been possible without the guidance and support of many people. I express my sincere gratitude to Venu Kumar, Recovery Head, John Distillers Pvt Ltd, Bengaluru, for allowing to do my project at John Distillers Pvt Ltd. I thank the staff of John Distillers Pvt Ltd, Bengaluru for their support and guidance and helping me in completion of the report. I am thankful to my internal guide Prof.Sainath, for his constant support and inspiration throughout the project and invaluable suggestions, guidance and also for providing valuable information. Finally, I express my gratitude towards my parents and family for their continuous support during the study. DHANUSH S P 1NH18MBA19 3 | P a g e TABLE OF CONTENTS SL. NUMBER CONTENTS PAGE NUMBERS 1 Executive Summary 7 2 Theoretical Background Of The Study 8-9 3 Industry Profile &Company Profile 10-23 4 Application Of Theoretical Framework 24-33 5 Research Methodology 34-39 Analysis And Interpretation Of Financial 6 40-78 Statements And Reports Learning Experience- Findings, 7 79-83 Suggestions And Conclusion 8 Bibliography 84 4 | P a g e LIST OF FIGURES Sl.No Name of the Table Page Numbers 1 Benchmarks for comparisons of ratios 25 2 Guidelines for use of ratios 28 3 Significance of Ratio Analysis 30 4 Types of Ratios 33 5 Liquid Ratio Types 41 6 Graph of Current Ratio 45 7 Graph for Quick ratio 49 8 Types of Profitability Ratio 50 9 Graph of Gross Profit Ratio 54 10 Graph of Operating Margin 57 11 Graph for Net Profit Margin 61 12 Graph for Return on Capital Employed 66 13 Graph for Total Asset Turnover Ratio 70 14 Graph for Fixed Asset Ratio 73 15 Comparison of Current Ratio Graph 75 16 Comparison of Quick Ratio Graph 76 17 Comparison of Net Profit Graph 77 18 Comparison of Return on Asset Graph 78 5 | P a g e LIST OF TABLES Sl.No Name of the Figures Page Numbers 1 Data of Current Ratio 44 2 Data for Quick ratio 46 3 Data for Gross Profit ratio 51 4 Gross Profit Ratio 53 5 Data for Operating Ratio 55 6 Operating Margin 57 7 Data for Net profit Margin 58 8 Net Profit Margin 60 9 Data for Return on Capital Employed 63 10 Return on Capital Employed 65 11 Data for Return on Assets 67 12 Total Asset Turnover Ratio 69 13 Data for Fixed Asset Turnover Ratio 71 14 Balance Sheet of JDL 86 15 Balance Sheet of Radico Kahitan 87 16 Balance Sheet of United Breweries 88 17 Balance Sheet of GM Breweries 89 6 | P a g e PREFACE It involves incredible delight and benefit for me to put before the regarded peruses of this report on "Understanding the Financial Position of JOHN DISTILLERIES" for the years 2015-19. The report basically includes the budgetary examination of JOHN DISTILLERIES Pvt. Ltd, in the formo of ratio_ analysis. The preparation included the everyday working at JOHN DISTILLERIES. This task helped me to comprehend the working proficient condition and helped me break down the money related information very well additionally great comprehension of the Ratio Analysis and understanding and how organizations take monetary choice to reinforce their organization For this Project study, I have considered 5 years accounting report of the organization have been picked for proportion investigation and understanding. The fundamental target of the investigation understanding this undertaking is to enhance scholastic information with outright useful presentation to everyday activity of the business association. The primary period of the task is to examine and build up a more profound comprehension of the idea of Ratio investigation of fiscal summaries and the utilization of the equivalent Second stage incorporates the investigation of the organization's budgetary position dependent on count of different ratios like liquidity ratios, profitability proportions and turnover ratios. The last stage is tied in with reaching inference about the organization's money related situation on the ratios so determined. 7 | P a g e CHAPTER –1 BACKGROUND BACKGROUNDAND NEED OF THE STUDY AND NEED OF THE STUDY 8 | P a g e NEED OF THE STUDY: The task study is likewise led to improve my insight as an understudy of finance. Ratio Analysis holds a significant spot in money related bookkeeping and monetary administration. This point is picked taking into account its hugeness in any budgetary set up. It urges the accounting information to be summarized and improved in a fundamental structure. It gives fundamental data to the administration to take brief choice identifying with business. Ratio Analysis examination uncovers gainful and unfruitful exercises. In this way, the administration can focus on beneficial exercises and thinks about improving the proficiency. Ratio Analysis is utilized as an estimating bar for successful control of execution of business exercises. To have good knowledge this concept and to get a precise presentation of this idea of financial administration, this venture study is embraced. The accompanying focuses further feature the requirement for study led: For understanding the idea of proportion examination. For understanding the financial noteworthiness of extent assessment for any association or organization Role of Ratio examination in assessing generally speaking budgetary situation of any organization For distinguishing the segments of proportion examination to have the option to perceive their commitment in administrative dynamic For estimating the exhibition of an organization's gainfulness position For estimating the presentation of an organization's liquidity position 9 | P a g e CHAPTER 2 COMPANY PROFILE 10 | P a g e 11 | P a g e INTRODUCTION John Distilleries Pvt Ltd is an Indian company that produces distilled beverages, and the company's flagship brand is Original Choice whisky. It also manufactures brandy, whisky, wines, and the award winning single malt whisky called Paul John HISTORY:- John Distilleries was established by Paul P. John, initially from Kerala and the child of a ranch and alcohol aristocrat in Karnataka. He additionally has interests in hospitality. The organization's first refinery (distillery) was set up in Bangalore, Karnataka. The organization propelled Original Choice whisky in 1996. The brand was a moment achievement, taking John Distilleries to the highest point of the portion of the Indian whisky showcase. The organization chose to take the brand national, and marked Malayalam film entertainer Mohanlal as proxy brand envoy. John Distilleries sold 4,000,000 cases in 2005. Original Choice was the biggest selling IMFL brand in Karnataka that year, selling about two lakh cases a month with John Distilleries' general IMFL deals by volume in the state adding up to around 1.2 million cases. Original Choice sold about 4.5 million cases in 2006, and 6.41-million cases in 2007. John Distilleries propelled the Big Banyan wines in 2007. Big Banyan Wines is named after the Big Banyan Tree close to Bangalore, where the corporate central command of John Distilleries is found. The main wine producer is oenologist Lucio Matricardi, who is an expert at wineries in Italy. Big Banyan at first propelled five varietals. John Distilleries authoritatively propelled two new variations under its Big Banyan brand on 7 July 2010 at The Paul, Bangalore, a business lodging possessed by Paul John. The new variations were Rosa Rossa, a rose wine, and Bellissima Late Harvest Muscat, a sweet wine. Bellissima is the Italian word for excellent. Bellissima is the first sweet wine in Quite a while to be produced using the Muscat grape. John Distilleries gained Chitali Distilleries Limited (CDL) in August 2008 for ₹288 million (US$4.0 million). It was John Distilleries first procurement outside South India, and empowered it to create amended soul and additional nonpartisan liquor. The organization was converged with JDL on 1 October 2010. Chitali Distilleries had recently been completely 12 | P a g e claimed by the Government of Maharashtra and is situated in Shrirampur in Ahmadnagar locale. John Distilleries set up itself in South India, retailing in Karnataka, Kerala, Goa, Puducherry and Andhra Pradesh.