Scope of the Study

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SCOPE OF THE STUDY: This study aims at providing an insight into the financial position by comparing the Balance Sheet of Auto Syndicate Private Ltd. This study confined to five years data from annual reports 2006-2010, financial statements and other records of the Auto Syndicate Private Ltd. OBJECTIVES OF THE STUDY: The study is undertaken with the following objectives * To study the liquidity position of the company. * To analyze the financial performance of the company. * To predict the general financial position and profitability of the company and to offer possible suggestions. * To identify the financial strength and weakness of the company. * To understand about the historical performance of the company.…show more content…
The relationship can be expressed in percentage , fractions and proportion of numbers. The various classifications of ratios are follows. i. Current Ratio: It is the relationship between current assets and current liability. It is measure of liquidity position and is most widely used to make the analysis of a short term financial position. A current ratio of 2:1 is considered as satisfactory level. Curret Ratio = Current Assets / Current Liabilities. ii. Quick Ratio: Quick Ratio or acid test ratio establishes relationship between quick or liquid assets and current liabilities. The ratio is called as liquid ratio. The satisfactory level of quick ratio is1:1. Quick Ratio = Quick Assets / Current Liabilities iii. Absolute Liquid Ratio: it is modified form of liquid ratio. The relationship of absolute liquid assets to liquid is called as Absolute Liquid Ratio. This is called as Super Quick Ratio. Absolute Liquid Assets means cash, bank and short term investments. Liquid Liabilities means current liabilities less bank overdraft. Absolute Liquid Ratio=Absolute Liquid Assets /Liquid Liabilities 2. PROFITABILITY RATIO i. Gross Profit Ratio: This ratio measures the relationship between gross profit and net sales. Gross Profit Ratio = Gross Profit / Sales ii. Net Profit Ratio: This ratio measures the relationship between
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