SUMMER TRAINNING REPORT ON ORGANIZATIONAL STUDY AT DIGJAM LTD & RESEARCH WORK ON COMPARISON OF RATIO ANALYSIS OF DIGJAM LTD V/S RAYMONDLTD SUBMITTED BY NIRAV MEHTA MBA Sem-III Guided by PROF. ASHISH NATHWANI ACADEMIC YEAR 2009-2011 SUBMITTED TO JAYSUKHLAL VADHAR INSTITUTE OF MANAGEMENT STUDIES (JVIMS) BIPIN T. VADHAR COLLEGE OF MANAGEMENT JAMNAGAR AFFILIATED TO GUJARAT TECHNOLOGICAL UNIVERSITY AHMEDABAD 1 JVIMS - JAMNAGAR INDIAN TEXTILE INDUSTRY INTRODUCTION The Indian textile industry has a significant presence in the economy as well as in the international textile economy. Its contribution to the Indian economy is manifested in terms of its contribution to the industrial production, employment generation and foreign exchange earnings. It contributes 20 percent of industrial production, 9 percent of excise collections, 18 percent of employment in the industrial sector, nearly 20 percent to the countries total export earning and 4 percent to the Gross Domestic Product. In human history, past and present can never ignore the importance of textile in a civilization decisively affecting its destinies, effectively changing its social scenario. A brief but thoroughly researched feature on Indian textile culture. HISTORY OF TEXTILE INDUSTRY: - India has been well known for her textile goods since very ancient times. The traditional textile industry of India was virtually decayed during the colonial regime. However, the modern textile industry took birth in India in the early nineteenth century when the first textile mill in the country was established at fort gloster near Calcutta in 1818. The cotton textile industry, however, made its real beginning in Bombay, in 1850s. The first cotton textile mill of Bombay was established in 1854 by a Parsi cotton merchant then engaged in overseas and internal trade. Indeed, the vast majority of the early mills were the handiwork of Parsi merchants engaged in yarn and cloth trade at home and Chinese and African markets. The first cotton mill in Ahmedabad, which was eventually to emerge as a rival centre to Bombay, was established in 1861. The spread of the textile industry to Ahmedabad was largely due to the Gujarati trading class. The cotton textile industry made rapid progress in the second half of the nineteenth 2 JVIMS - JAMNAGAR century and by the end of the century there were 178 cotton textile mills; but during the year 1900 the cotton textile industry was in bad state due to the great famine and a number of mills of Bombay and Ahmedabad were to be closed down for long periods. However, during the period 1922 to 1937 the industry was in doldrums and during this period a number of the Bombay mills changed hands. The second World War, during which textile import from Japan completely stopped, however, brought about an unprecedented growth of this industry. The number of mills increased from 178 with 4.05 lakh looms in 1901 to 249 mills with 13.35 lakh looms in 1921 and further to 396 mills with over 20 lakh looms in 1941. By 1945 there were 417 mills employing 5.10 lakh workers. The cotton textile industry is rightly described as a Swadeshi industry because it was developed with indigenous entrepreneurship and capital and in the pre-independence era the Swadeshi movement stimulated demand for Indian textile in the country. The partition of the country at the time of independence affected the cotton textile industry also. The Indian union got 409 out of the 423 textiles mills of the undivided India. 14 mills and 22 per cent of the land under cotton cultivation went to Pakistan. Some mills were closed down for some time. For a number of years since independence, Indian mills had to import cotton from Pakistan and other countries. After independence, the cotton textile industry made rapid strides under the Plans. Between 1951 and 1982 the total number of spindles doubled from 11 million to 22 million. It increased further to well over 26 million by 1989-90. 3 JVIMS - JAMNAGAR H. Birla Group Company. The name of mill was ³Shri Karansingh Woolen Mills´ which was promoted by Mr. When he learnt about Mr.BRIEF HISTORY Formally. In 1948.A.K. The name of the company now stands change to DIGJAM LIMITED in which ³DIG´ for Digvijay Wollen Mills and ³JAM´ for Jamnagar unit.A. he permitted Mr.K. Jam Sahib used to rule over Jamnagar. Wattel starts mill and give the name ³Shri Digvijay Wollen Mill´ to give honor to Jamsaheb which is today famous with the name of DIGJAM LIMITED. the king of Bhavnagar.Watter. when Pakistan attacked on Jammu-Kashmir.A.JAMNAGAR . During those days.K. Around 1954 BIRLA took over the reigns of mills in their hands and since Digjam is a Birla managed company a unit of Birla VXL Ltd as S.Watter came towards this area with the view to set a mill somewhere in Gujarat in the coasted areas.K. this mill was established in the area of Shrinagar-Kashmir.A. Krishna Kumar Singh. He gave: 1) 2) 3) 4) 40 acres of land free of charge 20 lacks loan towards equity Free import of raw material Exception from state taxes This A.Watter to set up mill within his provinces. In 1949 civil construction of mills was commenced and in 1952 the trial production was started. Besides he also offered attractive concessions.K. Mr.Watter. In the year of 1948 the foundation store was laid by Shri H. 4 JVIMS .K. A complete vertically integrated plant. Digjam Limited is a leading textile company in India. The company has also initiated steps to strengthen its organization and induct the youth and skills necessary to attain results from this strategic shift-cum-consolidation exercise. Digjam has ultra modern production facilities to convert wool tops to finished fabrics through different processes of Dyeing. recommendations were made which now form the basis of our strategic marketing and manufacturing thrusts spanning the coming 3-4 years. 5 JVIMS . Stringent quality checks at every stage and process enabled Digjam to bag the prestigious ISO 9001 certification. undertook a major review of the operational parameters of our textile company. Since then. Spinning. Following a thorough review of the operating and marketing practices.JAMNAGAR . the company restructured its business portfolios to focus as a textile company manufacturing and marketing fabrics and readyto-wear clothing under its own brands. manufacturer of fabrics for suiting and casual wear. Weaving and Finishing using state-of-the-art machinery imported from France. began its activites nearly 60 years back in Jamnagar. Germany. Gujarat. an S K Birla Group Company. it has been catering to the ever-growing demands of the Clothing and Fashion industry. Keeping pace with the complex requirements of the industry. Switzerland and Italy. Andersen Consulting.Company Profile DIGJAM Limited. of which 35%-40% (approximately) is exported to major countries across the globe. in the domestic as well as the international markets. In recent years. a leading management and corporate advisors agency. Digjam expanded its production capacity to over 5 million meters. reputed for its finish and quality. DIGJAM products and their ranges are available at its exclusive showrooms and over 3000 other retail outlets across the country 6 JVIMS . In the new millennium. This segment offers a high potential in terms of market size and also presents a tougher challenge to us in terms of providing satisfaction. DIGJAM has a high-end fabric brand presence in the domestic market. DIGJAM introduced superpremium fabrics designed by European experts (with whom we work regularly and extensively) comprising fine wool yarn of Super 150s and Super 120s and occasionally blended with exotic fibres like Silk or Cashmere. Europe. A major proportion of our output is exported to USA. but one where we are determined to make and sustain our mark.While the company lays uniform stress on all fundamental aspects such as quality. designs and cost-friendliness for products under all its brands. both tradition and modernity in its positioning. The DIGJAM brand will increasingly reflect. Constant research on designs ensures creation of innovative future trends. increased media exposure of international fashions and a growing tendency towards self-indulgence have all contributed to it. but demanding clientele with special emphasis on becoming the preferred premium choice for the youthful consumer.JAMNAGAR . This bodes well for our future as our preeminent position as one of the largest manufacturer of textiles from India. The company manufactures over 3000 design-shade combinations each year in Light Wool. product range and marketing approach. Polyester Wool and Woolen fabrics for the DIGJAM brand alone. The all round impact is visible with the influx of international. We intend to position the brand as the clear favorite for a wider. DIGJAM is undoubtedly its premium fabrics brand. DIGJAM's superior product quality is at par with global standards and many of the world's best readymade brands use fabrics produced by us. Indian customer has choice today.rising affluence levels. formal and casual wear. and domestic products and brands in both. Dressing in India has come of age . Middle East and Far East. 7 JVIMS . which is one of the highest in the textile industry. By using the best technology and machineries available.JAMNAGAR . y Bureau of Indian Standards License for the Quality Management Systems Certification y For four consecutive years DIGJAM has received the highest Exporter Award in the woolen worsted category from the Export Promotion Council of India. They have even achieved the Certificate of Recognition. DIGJAM has achieved the ISO 9001 International Quality Certificates. y The first and only woolen worsted mill in India to be awarded the status of ³ACCREDIATED MILL´ from internationally renewed DuPont. y They have got Wool mark wool blend licenses from international wool secretariat. y The present production capacity is of 20000 meters of woolen per day.ACHIEVEMENTS y y y Digjam has achieved also the certificate of Confidence in Textiles. Senior Officer 9. Manager 7.ORGANISATION STRUCTURE: 1. Trainee 8 JVIMS . Vice President Sales export 3. Junior Supervisor 12. Deputy General Manager Raw Material & Store Mechanical Engineer Sulzer Management Information System Electric Data Processing 5.JAMNAGAR . Senior Manager 6. President 2. Officer 10. Assistant Manager 8. General Manager Personnel HRD Sulzer & Weaving Spinning Finishing Financing 4. Supervisor 11. JAMNAGAR .PRODUCTION DEPARTMENT 9 JVIMS . ) Product Layout 2. The total weaving capacity of the plant is 14000 meter per day.) Process Layout 3. The selection of place for locating a plant is one of the most important functions which are handled by the entrepreneur while launching a new enterprise. because this land is given by H.Plant Location: Plant location may be understood as the function of determining where the plant should be located for maximum operation. Plant Layout: Plant layout refers to the arrangement of the production facilities in a scientific way such that the production continues softly and without any interruption.JamSaheb.JAMNAGAR . The layout is designed in such a way that the not required movement of machines is eliminated.) Fixed Position Layout 4. The layout can be classified into four types: 1. 515 employees and executives and dedicated force of 1300 employees.H.) Combined / Mixed Layout 10 JVIMS . This place is helpful to import raw material like wool and export finished products and also helpful in transportation facilities because of remote town. economy and effectiveness. The plant spread over 47 acres. Plant Layout is the concept in which the arrangement of different sections of the production dept is done. DIGJAM is located at the coastal region of Jamnagar at Gujarat. JAMNAGAR . It comes in bales of approximately 350 Kg.) Trilobal 2. DIGJAM covers more than 19000 square meters of plant area with nearly 220 machines for manufacturing high quality suiting at Jamnagar. The raw material ³polyester tow´ in a firm is bought from Reliance Industries Limited. Some qualities of polyester are imported from Germany and packing of 200 Kg is bought. 11 JVIMS . The polyester in DIGJAM is received from IOCL Pondicherry and RIL Patalganga.The company operates in the woolen worsted textile segment and has composite mill with having a certificate of ISO 9001. The type of layout used at DIGJAM is Process Layout. The sequence of the machines is not changed frequently. Raw Material: - At DIGJAM unit major raw material manufactured of fabric is as follows: POLYESTER: It is man made fiber. There are two types of Polyester Available: 1.) Circular The Trilobal polyester is more lustrous as compared to other one. The machinery remains at the fixed place and material flows to one machine to another. ) At the time of maintaining stocks we should also consider the self-life of material. 3. The wool is received in the form of bales weighting 125-150 Kg of each.e. This wool is tested and certified for its quality by IWTO (International Wool Testing Organization).) To maintain stock after considering purchase lead time 5.) To keep stock according to the space availability. 4. 12 JVIMS . The raw material. for the control of inventory they use ABC method i.JAMNAGAR .BASIC RAW MATERIAL: It is a natural fiber. In DIGJAM the raw material used are woolen and polyester. Always Better Control. Inventory Management:Inventory control is also an essential aspect in production management.) To maintain inventory by involving minimum funds. 2. There are few sectors which DIGJAM considers: 1.) Average periodical requirement of a production Dept. greasy wool is imported from Australia and New Zealand and is extracted from a breed of sheep called ³Marino´ by shearing machines in these countries. co-coordinating activities from the time of procurement of order to delivery up to warehouse. In the planning dept. Depending on the order given by the party.g. depending upon the manufacturing order the process takes place. In the planning dept. they consider the allowance percentage depending upon the quality.Production Planning:- It is the nerve center. In the domestic market the delivery time: 70 to 75 days In the export market the delivery time : 60 to 65 days 13 JVIMS . It also ensures timely delivery of all fabrics in the stipulated frame and in assortment. planning dept.JAMNAGAR . [a] Recombing [b] Dyeing [c] Spinning [d] Warping [e] Weaving [f] Mending [g] Finishing 6 8 15 2 10 7 12 days days days days days days days Total 60 days Planning dept also follow up the material process. plans the first to the last stage. For e. JAMNAGAR .PRODUCTION PROCESS Scouring Carding Gilling Combing Dyeing Recombing Spinning Weaving Finishing 14 JVIMS . 2 Gilling .JAMNAGAR .1 Polyester Top Gilling .3 Combing Gilling (Post Combing) Grey Wool Tops Hydro for Polyester Top Dyeing Blend Preparation Back Wash for wool Recombing Recombed Tops 15 JVIMS .Flow Chart of Grey Combing. Dyeing & Recombing Greasy Wool Sorting / Trapping Polyester Tow Scouring Convertor Carding 3 Gilling Gilling . with Soda ±ash & hot water.10% 1% Vegetable Matters ± 16 JVIMS .20% 8 % . Scouring removes the dirt.650 C) Process flow of Scouring Re.JAMNAGAR . grease. grease which has to be removed. Grey wool contains following: Grease Dirt & Dust ± ± 15% . (600 . perspiration & salt from the wool by washing the wool fiber in non ± ionic detergent.GREY COMBING: SCOURING: The wool contains dirt.Opening Washing Squeezing Drying The Detergent used in the washing process is SAPCO ± 1735 or RVKMA .950. mud. remaining 2 bowls are of plain water. In dryer chamber hot air is passed form downward direction. wool is fed which is then moved to washing bowls by means of horizontal & vertical conveyor lattice. It¶s done in scouring machine.To remove the above impurities from the wool scouring is done. which consists of 3 units : 1. Out of these five bowls 3 bowls are of detergent (non-ionic) or soap and soda solution. Three times washing with the help of Non-ionic Detergent and Two times with plain water. Washing Bowls : There are 5 washing bowls in scouring machine. Drying Units : A drying chamber is provided at the end of machine which consists of steam heated coils & fan. 2. leaving the wool as a continuous web called ³SLIVERS´ Purpose of carding: To remove the vegetable matter To remover Burr and Shoddy wast 17 JVIMS . Here. CARDING: Carding breaks open the entangled scoured wool and remove the ³BURR´ and ³SHODDY´. It dries up the wool. Hooper or Feeding Zone : In Hooper.JAMNAGAR . 3. Gilling uses a comb to blend different quality of card silver together and aligns fiver parallel to one another. The By product of carding are burrs and shoody. Gilling use a coarse comb to blend different qualities of card slivers together & align the fibre panel to one another The Sliver from carding is given 3 gilling processes before sending it to for combing to convert into tops because after carding the wool fibre takes a shape of hook.JAMNAGAR . properly mixed silver with parallel fibers. The multiple fibers are mixed to reduce variation in quality. The carded sliver follows following 3 gilling operations as under : 1st Gilling: Here 10 carded slivers are fed to the one machine drafted together to form one sliver.Carding Machine: Model Thibeau TTC RTC Thibeau No. In gilling multiple slivers from carding are fed into gilling machine & then drafted to form a more uniform. GILLING: Gilling is the process done before combing. Burrs are the bunch of fibers in ball shape with vegetable matter found in wool. Shoody has short fibers with mud & dust.. Of Machine 2 1 The Main objective of this process is Parallelization of fibers and removal of dust. 18 JVIMS . NSC machine from France is used from combing. It males the sliver more uniform & maintains the span length of fibres. Machine Gill ± 1 Gill ± 2 Gill ± 3 Model GC 13 GC 13 GN 5 No.2nd Gilling: Here 5 slivers from the first gilling machine is fed to the machine to produce uniform sliver. Of Machine 1 1 2 COMBING: Combing continuous the fibre alignments using a fine metallic pinnings circular half laps & top comb. It removes the remaining vegetable matter & short fibres during carding.JAMNAGAR . Of Machine 5 4 2 POST GILLING: - 19 JVIMS . 3rd Gilling: This is also called Bi ± Coiler. The product of combing is ³Top´ and by product is called ³Noil´ Combing is the main operation in the worsted combing further removes the short fibres & remaining vegetable matters and broken fibres during carding. It also removes the short stable fibres from the sliver which are formed by doubling & drafting during previous session. Model PB 28 PB 30 PB 31 No. Here 2 slivers are produced from 4 slivers & stored in one can. DYEING: Dyeing is the process of uniformly colouring or applying the dye at a particular temperature & pressure. QUALITY CHECKS:After the final top is made it¶s sent to lab for following testing: y y y y Mean fiber length is maintained Coefficient of variation Checks for oil & moisture content in the sample. fabric or garments. Dyeing colours the wool & can be carried out scoured wool tops. Material Polyester Wool Type of Dye Used Dispersed Dyes Metal Compexes Sulpho dyes 20 JVIMS . There are 2 types of dyes used for dyeing wool & polyester.JAMNAGAR . No. yarn. 10 Slivers are fed into this machine drafted together to produce one sliver & to form a top.This is same as gilling process. of Neps. It must be less than 1% & 14% respectively. The additional process is that the tops are formed here of desired weight from combed sliver. JAMNAGAR . Fabric/Piece Dyeing List of Machineries: - Names of Machines Ilma Dalal-1 Dalal-2 Staffi-1 Staffi-2 Staffi-3 Staffi-4 Staffi-5 Dalal-3 Dalal-4 Kg in each machine Tops formed (in each machine) 200 200 200 100 100 20 20 15 50 50 4 4 4 4 4 3 3 2 3 3 21 JVIMS . Top Dyeing 2.Here 3 Types of Dyeing are done they are as follows: 1. Yarn Dyeing 3. JAMNAGAR .For Fabric dyeing. Model Dalal Jet Back HT1 Dalal Jet Back HT2 MCS SF82 Capacity (Kgs) 100 200 200 No. generally polyester/wool blend fabrics are dyed in JET BECK machine. of machines 1 3 1 PROCESS FLOW OF TOP DYEING Tops from Grey Combing Packing in Top Dyeing Dyeing Hydro Extraction Back Washing or R.F.Dryer Defelter Recombing 22 JVIMS . PROCESS OF YARN DYEING Yarn R F Dryer Rewinding PROCESS FLOW OF DYEING ACCORDING TO DIFFERENT SHADES Dyeing Hydro Extractor WOOL Light Shade .R. Defelting 23 JVIMS .Dryer Dark Shade Back Washing Dryer POLYESTER For Both (Light & Dark Shade) Radio Frequency Dryer is used.F.JAMNAGAR . To remove the impurities. Defelting.JAMNAGAR . Polyester is dyed at 130°C. Yarn is dyed at 120°C. In Recombing department drying of wool. In Recombing we achieve this as well as remove short fibers to achieve better quality of yarn. Parallelization of fibres. To get the requires shades. Light and Medium Shades are dyed for 30 minutes. certain degree of disturbances takes place in the fiber. Dark shades are dyed for 45 minutes. Blend Produces: Polyester (%) 55 70 80 40 0 Wool % 45 30 20 60 100 24 JVIMS . Hence parallelization is required. Objective of Recombing: y y y y To get blended wool & polyester. Gilling and Combing is done. Some important points for Dyeing : Wool is dyed at 100°C. RECOMBING: - During dyeing process. 6 Machine PB 29 .5 Machine PB 31 . Defelter Selection 2. Recombing 4.3 Machine GN 5 .JAMNAGAR .1 Machine Auto Leveler (NSC France) Auto Looper (NSC France) 2 - 2 - 25 JVIMS . Gilling 3.Process of Recombing: 1. Auto Leveler 5.4 Machine 12 PB 28 . Auto Looper List of Machineries: - Name Of Machine / Name Of Producer Defelter (NSC France) Gill Box (NSC France) Comber (NSC France) No Of Machine Model 3 GN 6 7 GN 6 . F.JAMNAGAR . Twisting Two Fold Yarn Steaming Two Fold Yarn Winding 26 JVIMS .O.SPINNING: Recombed Top Gilling 1 Gilling 2 Gilling 3 Gilling 4 Flyer Frame / Rubbing Frame Ring Frame (Spinning) Single Yarn Steaming Auto Corner (Single Yarn Winding) Assembly & Winding T. Frame sections. It is the art of using fibers of variable length to twist then together in order to produce continuous yarn with characteristics adapted to their subsequent use weaving. The Spinning department has seven sections: NSC preparatory. Twisting wool strands increases the strength of yarn & creates continuous unbroken yarn necessary for weaving.To achieve the better quality and improve the yarn.JAMNAGAR . Ring frame Section Auto corner Twisting-TFO Steaming Final winding and delivery. The purpose of Spinning is the conversion of recombed tops into the yarn of desired quality. Spinning converts ³TOP´ into ³Yarn´. Then apply twist to bind the fiber together to make continuous yarn. Spinning Process takes the worsted roving and twists it into thread or yarn. 27 JVIMS . Spinning is required. Spinning further reduces the thickness of roving. Flyer Frame is manufactured by NSC-France makers from 1980. To make fibers more parallel as far as possible which is done by the high drafting machine. To make suitable package for Ring frame. The basic principle of Rubbing Frame is same as of Flyer Frame. weight unit /length of the Sliver. each with the capacity of 48 spindles and having speed of 60 meters per minute.JAMNAGAR . The Objective of the Flyer Frame is as Follows: y y y y To reduce the wrapping i. the set of Gill Box ³GNs´ is included.e. This machine is used for rubbing and twisting. Frame Section: The Flyer Frame is a machine used for Drafting and Twisting. There are three machines of Flyer Frame in spinning dept. A false twist is given to roving bobbin in Rubbing Frame. There are total eight machines in spinning department. 28 JVIMS . Flyer frame is the conversion from sliver to import a slight twist in order to increase its strength. The main purpose of Gilling is as follows: y y y To reduce the wrapping To parallelize the fiber To increase the Sliver uniformity.NSC Prepatory: - In NSC Prepatory. Auto Corner: This machine is used to remove the yarn faults.List of Machine: - Machines Flying Frame Flying Frame Flying Frame Rubbing Frame Models BM12 BM12 BM14 FM7N Spindles 32 spindles 32 spindles 48 spindles 32 spindles Meter/Minute 60 meter/minute 60 meter/minute 60 meter/minute 160 meter/minute Ring frame Section: Ring frame machines are used for Drafting and Twisting. Cone is the bundling of the yarn. The total cone capacity is 300.800 Speed of the machine-7000to 9000 per minute. these machines are from India and Nether land.JAMNAGAR . Some of the important points about this machine: y y y y This is required to make a yarn of required count and of required twist. These machines are imported from Germany. It is used to make a suitable or bigger package for further process which is known as Cone. Total spindle capacity of shed=37*400=14. Spindle capacity of ring frame is 400. There are 37 machines of Ring Frame in spinning dept. There are 5 machines of Auto corner in spinning dept. 29 JVIMS . It is done in order to make yarn strong. if at all present. These machines are from India.JAMNAGAR . of assembly. 30 JVIMS . There are 19 machines in all in spinning dept. Final Winding Machine and Delivery: This is the final process where the yarns are winded in order to remove knot. There are three machines in the spinning dept. Steaming: Steaming is done to fix the yarn from doubling. In this the two yarn mixed can be seen separately. Twisting TFO: It is a Two for One machine. these machines are from India.Assembly: The job of assembly machine is to mix any two color of yarn. In this machine yarn is twisted and it is seen as one. The object of the Steaming is to recover the winding from high twist yarn. In this process first the material which comes from single and double frame are put in one trolley and then this trolley is put into the trolley machine and accordingly the pressure and vacuum is controlled. Weaving take place on a loom.In this process the bunch of cones are wound on the drum and yarn section is made according to the requirement. Weaving consist of two things that is Warping and Wefting. Two sets of yarn move in two motions. Warping process is divided in two namely: Warping: . In wefting process. Longtudinal moving yarn is warp & widthwise moving yarn is weft. a complete warp is made for a loom from the individual cones.JAMNAGAR . Warp yarn runs the length of fabric & weft yarn runs across the fabric.After warping. The process of interlacement is called weaving. lengthwise & widthwise. In wrapping process. Weaving interlaces yarn at right angles to one another forming a fabric. 31 JVIMS .WEAVING : - Weaving is done by the interlacement of warp & weft. all sections are fixed up on the wrapper beam. Beaming: . the horizontal layer is formed with the help of yarn in fabric. Width of the beam is maintained by flange of the beam. FINISHING: FABRIC WOOL BLEND Fixation Thermofixation Scouring Singeing Hydro Extraction Hydro Extraction Drying Drying Decatising Sheraring/Cropping Shrinkage Decatizing Pressing Pressing Kier Decatizing Kier Decatizing Finishing describe a number of processes designed to impart the required drape handle and aesthetic properties to a wool fabric .JAMNAGAR . 32 JVIMS .Wet finishing involves liquors and chemical being applied to the fabric while dry finishing involves mechanical treatments. In this dept. at first the fabric is finally inspected.. Here the fabrics which are defective are given identification by placing a red and white flag (thread).JAMNAGAR . systematic and creative activity. the fabric comes in to folding dept. If the fabric is having defect but can be mended is given the identification of white flag.. The fabrics having the red flag cannot be exported so these fabrics are sold at less cost. 1] Final inspection 2] Stamping 3] Measuring & Cutting 4] Folding 5] Weight and piece according in production sheet 6] Wrapping pkg.FOLDING: Process of Folding. DESIGNING: What is Design? They define deign as purposeful. if the fabric is having defect but it can¶t be mended than it is given the identification of red flag. Similarly. The purpose is purposeful designers give form to products. After finishing and checking in perching m/c. 33 JVIMS . interior and visual communication satisfies the fundamental psychological and aesthetic needs of users. 34 JVIMS .Stage through the design: Survey of market Feed back of Dealers Season wise Decision on the shades Sampling Sample cutting Handloom card preparation Send to market and dealers for approval Sort book entry Yarn order by PPC.JAMNAGAR . 3] To find out count value of yarn. Market Survey. Functions of Quality Control Department : The main functions of the quality control department are: 1] To find out micron value of wool. Fastness. Designers Intuition and Past Experience. stretch & growth percentage. In quality control some of the checking is done.JAMNAGAR . To continually improve the effectiveness of the Management System. etc. Customer Requirement (they also design for Institutions). The types of Checking are as follows: 35 JVIMS . Relaxation Shrinkage. QUALITY CONTROL: - The Quality Policy of DIGJAM is: Our Company is Committed: To achieve the highest quality standards of its fabrics and services for maximum customer satisfaction by following systematic quality management system. as designers must posses the expertise to create the compelling forms for product spaces and information systems and to advance application of new techniques in our everyday life. Sources of Design: International Magazines which contains fabric cuttings.Design is creative. 4] To find out the fabric properties like steam shrinkage. 2] To find out blend composition. JAMNAGAR .L Neps Yarn Checking: (1) (2) (3) (4) Count & Its C.V % (3) Oil % (4) Shade Final Top: (1) (2) (3) (4) (5) C.V % Shade checking Dyeing: (1) Fastness (a) (b) (c) (d) Washing fastness Dry cleaning fastness Light fastness Rubbing fastness 36 JVIMS .V % Short fiber % Oil % M.Tow: (1) Denier (2) C.F.V % Neps Twist & its C. JAMNAGAR .Fabric Checking: (1) (2) (3) (4) (5) (6) Weight Width (cms) Blends Composition Pilling test Crease Recovery Angel Shrinkage (a) (b) (c) Relaxation shrinkage Steam shrinkage M/C Wash shrinkage (7) (8) (9) (10) (11) (12) Drape Coefficient Martindale abrasion test Fabric Strength Fabric tear strength Fabric stretch & Growth Color fastness 37 JVIMS . HUMAN RESOURCE DEPARTMENT 38 JVIMS .JAMNAGAR . focus their attention and satisfying the customer and the organization. find opportunity to grow. Consider employees as a valuable asset.JAMNAGAR .HR Policy of the Company HRD POLICY STATEMENT Coming together is beginning Keeping together is progress Working together is success Some of the Policies of the company are as follows: Employees satisfaction creates an environment where people enjoy there work and realize their full potential. 39 JVIMS . Promote commitment and creativity for better performance. Consider quality consciousness as the key requirement for the products and services. Build enough flexibility to encourage and accommodate innovative thoughts. Encourage teamwork along with individual excellence. develop a sense of belonging amongst employee by carrying attitude. It is a process of determing how an organization should move from its current manpower position to its desired manpower position.Human Resource Planning: - The human resource planning is a key to the success of the organization. HRP is the process of acquiring and utilizing the human resource in organization. With the help of HRP management strives to have the right number. Human resource planning is the term used to describe how companies ensure that their staffs are the right staff to do the jobs. better individual performance and output bonus as per requirement. if it is done carefully cautionary and based on real and factual data available.JAMNAGAR . In simple terms. the right kind of people at the right place at the right time to do things which results in both the organization and individual receiving the maximum long term benefits.) HRP is motivation for better productivity. In DIGJAM human resource planning is used in following situations: 1. 40 JVIMS . It is a continuous process. routine production as well as in special situation.) HRP is used in urgent production. 2. JAMNAGAR .Recruitment & Selection: - Recruitment: Recruitment is the process of identifying that the organization needs to employ someone up to the point at which application forms for the post have arrived at the organization. Recruitment has been regarded as the most important function of the personnel department because unless the right type of people are hired. The recruiting procedure of DIGJAM consists of three segments: Segments Recruitment of Workers Recruitment of Executives & Managerial Staff Recruitment of Technical Personnel 41 JVIMS . even the best plans and controls of organization would not do much good. college students. External Source: In DIGJAM the external sources for the recruitment are as follows: 1. 3.e. Workers are selected by the concern supervisor and the assistant personnel management. Mainly two sources are available for the recruitment for DIGJAM: 1. mostly inexperience. young. In DIGJAM recruitment & selection procedure for blue collar force is as per laws. 42 JVIMS .JAMNAGAR .) Internal Sources. Internal Source: In DIGJAM the internal recruitment is done by the reference of internal members of the organization. Selection: Selection consists of the processes involved in choosing from applicants a suitable candidate to fill a post. Physical fitness for the workers are considered at the time of selection. For the recruitment of the labor in the company it is essential that he should acquire the certificate of ITI examination. potential employees.Sources of Recruitment: For any organization there are various sources available. 2. company gets enough reference for the recruitment.) New entrance for the labor force i.) Experienced persons such as mechanics. accountants and welders. within the company.) The unemployed with wide range of skills and abilities.) External Sources. With the help of internal advertisement. 2. behavior and conduct rules are given. skill improvement. awareness. discipline.JAMNAGAR . In case of Management Training. all the training areas are of specific nature mainly the management development areas are been conducted. In company Employees are developed through demonstration. awareness. They are selected by departmental head. 43 JVIMS .Recruitment and Selection procedure for white collar force refers to the selection of officers and managers. multiskilling. roles and responsibilities etc. Every year in the month of March. are given. seminar and discussion process also.. after having training date identified the HRD with the approval of the top management prepares a training calendar and conducts the Training Programme. the training areas are skill development. motivation. quality improvement. training is given on safety. housekeeping. In case of Staff Category. attitude. In case of Workman. Training & Development: - In DIGJAM the HRD identifies the training of all employees with the department heads. This method is economically.JAMNAGAR . machines and equipments are carefully utilized. However this method makes the clear.There are two type of training is given to the employee in DIGJAM. who are on the machinery. The result is that. Because of this profit is also increased. In that they provide classroom training in which they invite some engineers to train the workers and they arrange different seminars. The head of the dept. Off the Job Training Off the Job Training: DIGJAM provides off the job training to the workers and the employees. They are as follows: Training at DIGJAM On the Job Training On the Job Training: DIGJAM provides on the job training to the workers. the practical and theoretical aspects of the job. Not only maintenance cost is reduced but also working life of machines and equipments are also increased. 44 JVIMS . Trained employees handle machines and equipments much carefully. as the supervisor provides the training. provides the specific training to the workers and also solves problems which are faced by the workers. The regular work is not affected as the trainee learns within the factory premises. All the trade union helps in the development of the unit. If relationship lacks goodwill and understanding workers will not be at their best. 45 JVIMS . They always try to motivate their union members and try to increase the efficiency of the members in the workers.Industrial Relationship: - ³The relationship between employees and employer or trade union is called Industrial Relations´. One thing is clear that if the relationship is good and management and workers work in good spirit of goodwill and understanding. Production will suffer. The company has not faced any strike problem in past few years. There is a family type of environment of the unit and if any problem occurs then union leader or labor officers solve the problem jointly. Industrial Relations deal with the nature of working relationship that subsists between the two particular partners in production management and workers.JAMNAGAR . production will be maximized. and losses will be inevitable. In DIGJAM there is a better co-operation between all of them and management also. Induction: Induction mainly implies familiar introduction of new employees with the work. etc. The annual & increments are decided on the basis of individual performance during the year. rest periods. which helps to make employees feel at home and reduces the initial nervousness on his part.JAMNAGAR . Performance Appraisal:- ³Performance is not a matter of chance. DIGJAM has systematic induction programme. work culture. The Performance Appraisal committee is consisting of department head and the Senior Management head personnel.) To develop a feeling of belongings and loyalty to the organization. The main objectives of an induction program of DIGJAM are: 1. leave rules. It is a thing to be achieved««´ Performance Appraisal is the step where the management fields out how effective it has been at hiring and placing employees he performs. canteen and other facilities.) To build up the new employee¶s confidence in him in lathe new organization so that he may become an efficient employer. follow workers. It is not a thing to be waited for. 3.) To give all the necessary information to employee about location of workrooms. The appraisal is being carried out on following points: 46 JVIMS . This is done normally in the month of February & March. superiors and organization. 2. In DIGJAM the Performance Appraisal is a unit for managerial level which is done on yearly basis. The prestigious Birla Institute of Technology at Pilani is recognized as the premier Institute.) Skills 5.) Efficiency 7. museums. planetarium.) Behaviors.Haria School.JAMNAGAR . From this Institute thousands of students graduate and comes out each year. DIGJAM has contributed extensively to education and research. the BIRLA Group has been involved in recreation and religious centers.G.) Achievements. They are also a great patron of Indian art and culture.) Co-operation with others. art galleries and rural development programs. 4.) Given a donation in Laboratory of L. 3.) Attendance 4. 2. Social Responsibility:The DIGJAM has not only concentrated on building an industrial empire but also they are one of the largest philanthropic groups in India. Jamnagar. 5. 3. 2. Some of the other responsibilities that DIGJAM looks after are as follows: 1.) Co-operation with the Society.1.) Build an Auditorium at Jamnagar. Over the years.) 1500 families¶ requirement is fulfilled by the Company. 47 JVIMS .) Knowledge 6.) Pay health tax and wealth tax. ³A lateral shift causing movement of individuals from one position to another usually without involving any marked change in duties.e. These step is also been taken for some workers who does not perform the job well as required. In DIGJAM demotion is also followed.JAMNAGAR . from one location to another 48 JVIMS . This is also done in case of Sales Promotion i. responsibilities. ´ In DIGJAM workmen and staff employees are normally being transferred from one department to another. skills needed or compensation. The promotion is given on the merit basis.Promotion & Transfer: - ³A promotion is the transfer of an employee to a job which pays more money or one that carries some preferred status.´ In DIGJAM the management reviews the performance of every individual on the yearly basis. There are no fix promotion schemes. m. Respective heads dept.m.m. The main functions of this department are as under: 1. They come in the general shifts of 8:30 a.) Wages & Salary 3. 3.) PF & Employee Safety Insurance (ESI) Scheme In case of workers they have three shifts.) Attendance 2. 2.m. In case of Staff and management category the records is being maintain through computerized cards and punching machine system which prepares the payroll automatically.m. to 3:30 p.Time Keeping System: Time Keeping System is very important aspect.) 3:30 a. They are provided with the attendance card is issued to them which they have to carry while reporting on the job and submit to the respective dept. Through Time Keeping System company can run smoothly and successfully with boosting profits every year. to 5:30 p.) Leave Records. with 1 hour recess. With a recess of half an hour. The timing for shifts is as follows: 1. Workmen and Staff and Management are having weekly holiday on Sundays.m.) 7:00 a.JAMNAGAR .m.) Bonus Payments 6.) 12:00 p.m. to 12:00 p. 49 JVIMS . 4.) Gratuity 5. DIGJAM has different Time Keeping System. make the present of all the workmen and deliver to the time office. for making attendance register. to 7:00 a. 2. 4.) Contract Workers. 50 JVIMS . Leave Rules for Workers: 1.) Casual Leave-10 days 3.240 days / 365 days (1 P. (for Badli workers 7 days per year) 3.) Casual Leave-7 days in a year. 3.) Permanent Workers.) Sick Leave can be carried forward up to 3 years. Leave Rules for Staff Employees: 1.L.) Privilege Leave can be enchased up to 3 years.) Badli Workers.) Privilege Leave Qualified . For Badli workers 1 day leave on 40 days.Leave Rules: Leave Rules are different for workers and for employees in DIGJAM. on 16 day basis) 2.) Temporary Workers.JAMNAGAR .) Privilege Leave-30 days 2.) Casual Leave can¶t be carried forward 2.(Substitutes) 3.) Sick Leave ± for permanent workers 7 days per year.) Sick Leave-10 days In DIGJAM there is one policy regarding leave for workers and employees that is: 1. They have four types of workers: 1. 450 each.) Badli 3.Wages & Salary: The wage is remuneration paid for the service of labor.JAMNAGAR .) Sub-Staff 4. decides the wages of workers. A person who gets the wages is called ³Blue Collar Work´.e. If the worker needs money earlier i. while salary normally refers to the clerical administration & professional employees. In DIGJAM time office dept. advance than it will be given on 25th of the month. The pay scale starts from 7000 gross salary. Trade Union: - There are 1336 employees in the DIGJAM that is there are: 1. On the other hand salary normally refers to the monthly rates paid to clerical administration & professional employees or ³White Collar Work´. The maximum general advance will be Rs. In case of Staff Category the employees gets consolidated salary on monthly calculated basis.) Staff = 751 = 260 = 52 = 273 51 JVIMS . There is attendance system and after totaling the attendance of workers they pay the workers on the 10th date of the month. In production wages usually refers to the contribution to production.) Permanent 2. the employees have complaint against the other employees. While on the other hand it is the employees who have the dispute with the employees. These unions are affiliated with the external trade unions such as: Woolen Mill Mazdur Sangh affiliated to BMS Woolen Mill Kamdar Sangh affiliated to AITUC Woolen Kamdar Manda Grievance Management: There is hardly any organization which runs smoothly all time. 2. Presently there are five trade unions.) Sometimes they discuss the problem with personnel dept.) It problem is serious then he arranges meeting between workers and supervisors and prepare an agreement of conclusion. The management mainly solves the disputes within the framework of the organization and as per the provision of industrial dispute act. There dispute may be real or imaginary. 1. 4.) They investigate the problem whether it is genuine or not.) Then they discuss the problem with supervisors of workers and try to solve the problems. 52 JVIMS . DIGJAM has its own certified standing orders.JAMNAGAR .) After confirmation they discuss the matter with the workers and listen their arguments. 5. In some companies.For the state of protection of rights they have formed the trade union. The company is having five labor unions. also. 3. In case of the unions. genuine or false. representatives of the unions put the grievance to management. valid or invalid. All employees are connected through Local Area Network (LAN) and internet for Senior Executives. Canteen facilities for workers in the campus of the unit. Quarters provided to employees. breakfast etc. coffee. doctors for workers and employees for monthly checkup. Pension fund and ESI scheme are also provided by the company. Medical facility includes ambulance. employees and executives also. Park or garden is provided in front of house of employees. Festival advances and bonus given on the basis of attendance. Petrol allowance to employees for official workers.JAMNAGAR . Separate training halls with necessary equipments for workers. PF facilities for all the workers and employees. Casual leave.Benefits & Welfare: - Benefits provided by DIGJAM are as follows: Employees at various levels are provided with tea with different intervals of time. Sick leave and Privilege Leave for all. Library facilities Welfare Facilities. Mobile Facility for staff and Managerial category. Water and Sanitary facility for all. Telephone facility is also provided to employees and above staff. Vehicle facility for managerial with driver for official purpose today. 53 JVIMS . at reasonable rates. It contains tea. JAMNAGAR .MARKETING DEPARTMENT 54 JVIMS . Organization Structure Vice President General Manager Dy. General Manager Senior Manager (4 zone) (East, West, South, North) Assistant Manager Senior Officer Officer Senior Assistant Dy. Assistant Clerk 55 JVIMS - JAMNAGAR Distribution Channel: - DIGJAM Sales /Marketing Team Selling Representative Exclusive Show Rooms MBO¶s (Multi Brand Outlet) Whole Seller / Distributors Dealers/Tag Dealers End Customer 56 JVIMS - JAMNAGAR Sales Process: - The General Manager (Sales) heads the sales function of the organization. Indian market is normally divided into four zones and the zonal sales manager who is designated as Senior Sales manager ahs many territories. Each territory is looked after by a area sales manger (ASM). The area Sales Manager is posted in a city in the territory that looks after the sales in his respective territory. Each of four has a Sales Officer. The sales officers are posted at the mill and their basic function is to co-ordinate between ASM who is on the field and the mill. The Sales Officer is an important link as he ensures smooth operation of the sales person at the field. The company operates through Sales Representatives for each territory, there is Sales Representatives appointed by the company. This Sales Representatives assists the ASM in catering to the market needs. The function include market development by making new customers, order booking, collection of payments, coordination on mills behalf on local publicity, gift items to retailers, etc. The financial liability rests with the Sales Representatives, this essentially means that in case of default in payment by a customer, the Sales Representatives will have to bear this bad debt and his account with the company is debited. The noteworthy characteristics of such a system are that the company remains safe from defaults. The company follows the system of order booking and delivery of these orders to the customers by the desired date through transport or courier service depending on the urgency of order. Order booking is done in two ways: 1.) Seasons booking (Winter and Summer Booking) 2.) Intermediate Visits and booking and mid season book. 57 JVIMS - JAMNAGAR JAMNAGAR . They also give award for top five dealers. Major Sales Promotion tools for SIGJAM are as follows: For Consumer: 2) Samples 3) Coupons 4) Premium 5) Prizes 6) Discounts For Traders: 1) Price Off 2) Allowance For Business: 1) Trade shows 2) Fashion Shows 3) Specialty adds. DIGJAM is also sending Punchang and Calendar to their dealers to know when marriage and other occasion period comes. In both types they give discount coupon (about 15% discount) of frequent year and all the discount coupons are included in lucky draw and trip is given to lucky draw winner.Sales Promotion:DIGJAM gives sales promotion in two types in which lot of dealers scheme and consumer scheme are included. Such activity is done for both winter and summer Carnival. 58 JVIMS . when there will be more demand for that functions. top five retailers and top five showrooms. so that dealer can make stock for it and sale at right time. Details of the product i.JAMNAGAR . how the brand owner wants the consumer to perceive the brand . Brands have become increasingly important components of culture and the economy. of which fabric the cloth has been made whether it should be washed or dry cleaned etc.and by extension the branded company.Branding & Packaging: Branding: Branding is the art and cornerstone of marketing. A brand is a complex symbol that can convey up to 6 level of meaning: Attributes Benefits Values Culture Personality User In DIGJAM the branding on the cloth a big label is stick which is known as Selvedge or Monogram. product or service.e. It contains: Name of the company is written. organization. A brand is a name or trademark connected with a product or producer. now being described as "cultural accessories and personal philosophies". or brand image are typically the attributes one associates with a brand. maintain and protect brand. 59 JVIMS . It includes all the information. A product identity. Perhaps the most distinctive skills of professional marketer is the ability to create. JAMNAGAR . and production of packages. Packaging contains.e. In case of local market it is being packed in boxes and balers. sale. In case of finished products the product is being packed in different manner that is according to its price range. transports.Packaging: Packaging is the science. evaluation. They have velvet bag. Price Decision: In general terms price is a component of an exchange or transaction that takes place between two parties and refers to what must be given up by one party (i. storage. informs. art and technology of enclosing or protecting products for distribution.e. In case of export the fabric is being packed in the form of role with a plastic cover with a proper tag. preserves. protects. and use. The container called as a package and it is growing use as a marketing tool: Self Service Consumer affluence Company and Brand Image Innovation Opportunity In DIGJAM the packaging of the final products depends on the requirement of the customer. In simple termsthe amount of money charged for the product or a service or some of values that consumer exchanges for the benefits of having or using the product or services. and sells. seller).. 60 JVIMS . buyer) in order to obtain something offered by another party (i. In case of container load the material is being pack and loaded in the container with the proper fumigation. DIGJAM define packaging as all the activities of designing and producing the container for the product. Packaging also refers to the process of design.. leather bag. plastic bag etc. 5580 per meter. In DIGJAM prices are selected on the basis of cost. which is held twice in a year.JAMNAGAR . New Product Development: For the development of any unit and for achieving continuous growth in the market. a systematic planning for the development of new product and new idea generation as well as idea screening is must.) According to the Customer Requirement and Choice dealers. They select price range in the conference. market and competitors.Pricing is a strategic element in marketing mix.) Designer book 2. 61 JVIMS . In June and December DIGJAM has different range of products available in the market from the price range of Rs. In DIGJAM Company create new product development from the following point of view: 1. Price policies are general guidelines to make future decision.) Websites 3.217 to Rs. Pricing policies and strategies are guidelines and framework within which management of a company administrates prices so as to match them with the market needs. A product cannot enter in the market without a price tag. 60% wool and 40% polyester 3) Poly Wool i.) Poly: Wool: Bamboo Wool 35 % 33 % 20 % 62 JVIMS .e.e. they are having three ratios in this: Polyester 65 % 67 % 80 % New Product Categories: 1.JAMNAGAR . they are having three ratios in this i.) Poly: Wool: Cotton 5.) Poly: Viscose: Linen 4.Mainly DIGJAM produce following products but from these they have produced many new products also: 1) All wool i.e.e.) Poly: Wool: Lycra 2.) Wool: Cashmere 95:5. 100% Linen 6.100% wool 2) Wool Rich i.e.) Poly: Wool: Linen 3. Polyester 70 % 80 % 55 % Wool 30 % 20 % 45 % 4) Poly Viscose i. Using national campaign they give advertising across the country. They advertised also through films like ³Kabhie Khushi Kabhie Gum. Time-Out (which is published mainly in Delhi. fashion shows.Advertising: - Advertising is any paid form of non-personal presentation and promotion of ideas. cinema slides. They also have advertisement in the magazines like Namashkar.JAMNAGAR . in the entire world through television.) Local publicity. neon lights. gift banners.) National Campaign 3. Exotica. carry bags. For this. it decides on advertising to be under taken by the company and supervises the functioning of the advertising agency. value and image to the consumer. They did international campaign through participating in international fairs being held in Germany. they give local publicity through hoarding. newspaper. exhibition. It ensures that the premium brand of DIGJAM brand is upheld in the market place. Italy and Hong Kong. they also give advertisement through internet. posters. goods or services by an identified sponsor. magazines etc. In DIGJAM advertising is done by mainly three ways: 1. point of purchase etc. Mumbai and Bengaluru) and Go (which is an international business magazine).) International Campaign 2.´ 63 JVIMS . Go. The department carries out the function of communicating the brand name. As we know that modern marketing cannot service without advertising. pamphlets. India on 9th February 2008 India's most desirable man .Media they are giving advertisement in News Channels only. wit and style in dazzling and sensational creations by DIGJAM In Digjam they are preparing advertising budget. 64 JVIMS . Mumbai. In T.Mr.ready to conquer the world. India World 2008 Finale at Intercontinental The Grand.JAMNAGAR . The 23 finalists totally charmed the audience with their walk. They are spending 10% of last year¶s sales for advertising purpose.V. FINANCE DEPARTMENT 65 JVIMS .JAMNAGAR . the financial condition prevent in the economy and the risk profile of both i. the company as well as industry in which the company operates. Each and every source of funds has some advantages as well as disadvantages. An effective appraisal mechanism of various sources of funds available to any company must be instituted in the company to achieve its main objectives. There are mainly two types of sources: : requirements: Internal Source includes: Depreciation Fund Profit Fund.JAMNAGAR . the leverage planned by the company.Source of Finance: There are several resources of finance/funds available to any company. tenure and cost of each and every sources of fund. Sources of finance mean a place where a company gets their finance. External Source includes: Banks Financial Institutions IDBI Bank of India Bank of America Central Bank of India State Bank of India UCO Bank Union Bank of India In DIGJAM they use both types of sources to meet their different types of 66 JVIMS .e. The selection of the fund sources is dependent on the financial strategy pursued by the company. Such a mechanism is required to evaluate risk. It is one kind of reward for shareholders for the investment made by them in the shares of a company. There are different methods of evolution capital budgeting as payback method. - Capital Budgeting consist of planning & budgeting of the available capital for the purpose of maximization the long term profitability. which is distributed by the company among its shareholders. The company had paid uninterrupted dividend for 36 years till the year 1998. And it has the policy of yearly capital budgeting. DIGJAM uses ³Pay Back Period Method´ for evaluating the investment.Capital Budgeting. which can determine the period in which investment made is recovered. In Capital Budgeting there are different methods.JAMNAGAR . Dividend refers to the part of the firms net earning which are paid to shareholders. involves the choice between distributing the profit belonging to the shareholders and retention by the firm. accounting rate of return method etc. The BOD with the help of experts does capital budgeting: Dividend Policy: Dividend is a term that refers to that part of a profit of a company. Focus is on dividend paid to ordinary shareholders because holder of preference share is entitled to a fix rate of dividend. However due to adverse market condition and lack of profitability the company has not paid any dividend since year 1999. The major decision in financial management is related to dividend policy. 67 JVIMS . DIGJAM has a policy of rewarding its shareholders by way of payment of dividend out of distribute profit of the company. 09 65.30 0.02 65.00 80.07 65.99 7.07 Less : Calls Forfeited Paid Up in Arrears 0.76 68.00 0.00 0.67 63.09 0.74 68.09 68.00 80.60 2.00 80.09 65.90 -5.09 65.00 0.00 80.07 65.12 65.02 65.76 0.07 65.00 0.76 0.07 65.03 -0.33 29.63 -1.12 68.00 0.00 80.01 65.07 65.00 0.00 80.12 65.76 68.09 0.60 -2.02 68.76 13.00 0.02 68.76 68.02 65.97 0.81 -95.20 4.13 -24.JAMNAGAR .02 65.00 80.09 0.12 65.02 65.01 65.in Cr) Year Authorized Issued Subscribed Called Up 2009 2008 2007 2006 2005 2004 2002 2001 2000 80.76 0.02 68.12 65.02 4.00 68.00 0.Equity Capital Structure (Rs.09 0.02 13. in Crores) Particulars Cash and Cash Equivalents at Begining of the year Net Cash from Operating Activities Net Cash Used In Investing Activities Net Cash Used In Financing Activities Net Inc/(Dec) In Cash And Cash Cash And Cash Equivalents At End Of The Year Mar-09 Mar-08 Mar-07 2.76 13.03 0.89 -1.20 4.00 0.02 65.74 13.00 80.76 68.09 Cash Flow (Rs.00 0.33 68 JVIMS .74 68. 64 33.02 4.23 66.61 13.83 13.00 0.97 -117.96 251.38 242.18 4.00 0.28 191.00 97.49 69 JVIMS .66 162.89 249.18 0.00 0.00 0.JAMNAGAR .90 43.21 14.00 0.96 0.92 85.17 -48.54 30.71 40.75 24.00 0.02 0.38 115.76 -137.14 50.28 48.21 0.79 21.85 31.11 0.52 97.15 26.57 0.00 0.96 0.41 127.46 54.08 4.42 2.76 43.10 -51.01 26.00 0.00 0.42 45.84 211.02 138.14 16.00 104.76 68.00 116.Balance Sheet Particulars SOURCES OF FUNDS : Share Capital Reserves Total Total Shareholders Funds Secured Loans Unsecured Loans Total Debt Total Liabilities APPLICATION OF FUNDS : Gross Block Less : Accumulated Depreciation Less:Impairment of Assets Net Block Lease Adjustment Capital Work in Progress Investments Current Assets.89 0.00 0.77 -57.23 35.76 68.87 54.06 4.63 178.28 191.15 80.82 104.50 88.86 -95.00 0.28 4.00 0.00 0.00 0. in Crores) Mar-09 Mar-08 Mar-07 Mar-06 88.37 0.54 24.93 31.63 NA 0.17 165.08 4.21 -49.23 NA 73.05 257.84 133.01 64.30 13. Loans & Advances Inventories Sundry Debtors Cash and Bank Loans and Advances Total Current Assets Less : Current Liabilities and Provisions Current Liabilities Provisions Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Net Deferred Tax Total Assets Contingent Liabilities (Rs.23 62.00 0.93 18.41 39.59 146.19 173.89 44.59 0.00 0.09 0.82 29.11 252.00 0.00 0.34 29.60 4.40 184.50 0.84 116.42 70.53 -125.95 50.78 187.24 86.30 38. 70 JVIMS .JAMNAGAR .RESEARCH ON RATIO ANALYSIS OF DIGJAM LTD V/S RAYMOND LTD. They play a dominant role in setting the framework of managerial decisions. Financial statements are prepared to meet external reporting obligations and also for decision making purposes. Financial Statements represents a summary of the financial information prepared in the required manner for the purpose of use by managers and external stakeholders.Hampton Financial statement analysis is defined as the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account.´ . In short. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. Financial Statements based on absolute value and percentage changes and trend percentages are tools for comparing information from successive time periods. Companies typically present financial information for more than one time period. An important aspect of financial statement analysis is determining relevant relationship among specific items of information.JAMNAGAR .Overview of Financial Statement Analysis: ³A Financial Statement is an organized collection of data organized according to logical and consistent accounting procedures. The Process of critical evaluation of the financial information contained in the financial statements in order to understand and make decision regarding the operations of the firm is called ³Financial Statement analysis´. It is a study of relationship among various financial facts and figures as given in a set of financial statements. and the interpretation thereof to gain an insight into the profitability and operational efficiency of the firm to assess its financial health and future prospects. which permits users of the information to make comparisons that help them understand changes over time. 71 JVIMS . the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. However. 3. Regulatory Authorities like International Accounting Standards Board can ensure whether the company is following accounting standards or not. 3. In case of balance sheet it shows the financial position of business on a particular day usually at the end of the year. To assess the current profitability and operational efficiency of the firm as a whole as well as its different departments so as to judge the financial health of the firm 2.JAMNAGAR . Limitation of Financial Statement Analysis: 1. Financial Statements reflect the recorded facts and figures. 2. To ascertain the relative importance of different components of the financial position of the firm 3. To Judge the ability of the firm to repay its debt and assessing the short-term as well as long-term liquidity position of the firm. 4. Unless the statements are audited their authenticity is under doubt and they may be misleading and fraudulent. Investors get enough idea to decide about the investments of their funds in the specific company.Objectives of Financial Statement Analysis: 1. Advantages of Financial Statement Analysis: 1. 4. 2. Company can analyze it own performance over the period time through financial statement analysis. 72 JVIMS . Hence these are not useful for control purposes. To identify the reasons for change in the profitability/financial position firm. Financial Statements only reveal financial position of the company in a summarized manner. Financial Statement s don¶t recover non-monetary transaction. as a whole. selling or holding shares in a company and. Making sound decisions relating to all the phase of operations. 3. Creditors use analysis as a basis of granting credit. Controlling Operations and 4. 3. Government uses it for purposes of regulations and administration. Measuring the success or the failure of the operation.Need for Financial Statement Analysis: Need for Management: 1. Determining the relative efficiency of departments and process.JAMNAGAR . Investors use it to come to a decision of buying. 2. Need for Outside Parties: 1. 73 JVIMS . 2. RESEARCH METHODOLOGY 74 JVIMS .JAMNAGAR . To Identify the reason for change in the profitability/financial position To Judge the ability of the firm to repay its debt & assessing the short-term as well as long-term liquidity position of both companies 5. 4. 75 JVIMS . ³Research is an organized enquiry designed and carried out to provide information for solving a problem´ According to Francis Rummel. 2. To Judge the financial health of both companies. analysis and interpretation of data. 1. 6. Definition of Research: The Advanced Lerner¶s Dictionary of Current English lays down the meaning of research as ³A careful investigation or inquiry especially through search for new facts in any branch of knowledge´ According to Fred Kerlinger. The term research consists of two words: Research = Re + Search ³Re´ means again and ³Search´ means to find out something. 3. To Judge the ability of the company to pay the principal and interest. arrangements for amortization of debt and the security available for the loans extended.JAMNAGAR . To analyze growth & performance of both the company. ³Research is a careful inquiry or examination to discover new information or relationships and to expand and to verify existing knowledge´ Research Objective: The objective of Financial Statement Analysis of Digjam Ltd v/s Raymond Ltd are as follows: To assess the current profitability & operational efficiency of both the company.Meaning of Research: Research is simply the process of arriving as dependable solution to a problem through the planned and systematic collection. assurance whether the company will honour obligations as and when they mature. Government: Financial Statement Analysis is also significant for govt. 76 JVIMS . Creditors: From the creditor¶s point of view Financial Statement Analysis act as magic eye highlighting the credit worthiness i. Bankers: Financial Statement Analysis is also significant for bankers because banker is primarily concerned with the ability of paying current debts and the current operation results. position and prospects of business. Significance of this research of this research from the view point of interested parties are as under: - Management: Financial Statement Analysis will help the management of Digjam & Raymond in understanding the progress.. because Central and State Governments are also interested in published financial statements in order to assess their revenues through various taxes to regulate capital issue and public utility regulation.e.Significance of Research: The Research is study about ³Comparison of Financial Statement Analysis of Digjam Ltd v/s Raymond Ltd. Investors: Financial Statement Analysis is also significant for investor both present and prospective. They will invest in the company where they feel that financial structure of a company is sound & which has bright future. He wants no only the payment of advances but he also wants that such advance should be repaid at proper time also.JAMNAGAR . JAMNAGAR . The Problem Statement for this research is: ³Comparison of Financial Statement Analysis of Digjam v/s Raymond Research Design: ³A Research Design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure´ ³Research Design is the plan. a Problem Statement refers to some difficulty. Every researcher has to face many problems while conducting any research that¶s why problem statement is defined to know which type of problems a researcher has to face while conducting any study. which researcher experiences in the context of either a theoretical or practical situation and wants to obtain solution for the same.Statement of the Problem: The first step while conducting research is careful definition of Research Problem ³To ERR IS THE HUMAN´ is a proverb which indicates that no one is perfect in this world. structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance´ . It is said that ³Problem well defined is problem half solved´ Basically.Kerlinger ³In This Research Study Experimental / Hypothesis Testing Research Design have been applied´ 77 JVIMS . This analysis is also known as Horizontal Analysis 78 JVIMS . namely.JAMNAGAR . In this research Secondary Data are collected. The financial data will be comparative only when same accounting principles are used in preparing these statements.Data Collection: There are two types of data collection method : 1. Comparative figures indicate the trend and direction of financial position and operating results. Balance Sheet and Income Statements prepared in a comparative form. Primary Data 2. Common-size statements Comparative Statements: These are the statements showing the profitability and financial position of a company for different periods of time in a comparative form to give an idea about the position of two or more periods. It usually applies to the two important financial statements. Secondary Data Primary Data: Primary data are those data which are collected fresh and for the first time and thus happen to be original in character. (Annual Reports of Digjam Ltd & Raymond Ltd. for the year 2007. Comparative Statements 2. Secondary Data: The Secondary data are those data which have been collected by someone else and which have already been passed through the statistical process. Ratio Analysis 3. 2008 & 2009 are collected) Tools/Methods of Financial Statement Analysis: 1. Ratio Analysis: It describes the significant relationship which exists between various items of a balance sheet and a profit and loss account of a company. Hypothesis is a special proposition. In other words. Hypo means composition of two or more variables which is to be varied. As a technique of financial statement analysis. This analysis is also known as ³Vertical Analysis´ Hypothesis Formulation: The word hypothesis consists of two words: Hypo + thesis = Hypothesis. Hypothesis means assumption regarding all results before going for experiment. Such statements also allow an analyst to compare the operating and financing characteristics of two companies of different sizes in the same industry. formulated to be tasted in a certain given situation as a part of research which states what the researcher is looking for. Common Size Statements: These are the statements which indicate the relationship of different items of a financial statement with some common item by expressing each item as a percentage of the common item. The percentage thus calculated can be easily compared with the results corresponding percentages of the previous year or of some other firms. common-size statements are useful. 79 JVIMS . in intra-firm comparison for the same year or for several years. accounting ratios measure the comparative significance of the individual items of the income and position statements.JAMNAGAR . Thesis means position of these variables in the specific frame of reference Thus. Thus. It is possible to assess the profitability. solvency and efficiency of an enterprise through the technique of ratio analysis. as the numbers are brought to common base. both. we are then stating what it is termed as alternate hypothesis. Level of Significance: This is very important concept in the context of hypothesis testing.JAMNAGAR . Alternative Hypothesis is symbolized by H1. thought and reason. It means that there is no significance difference between methods. It is always some percentage (usually 5%) which should be chosen with great care.Types of Hypothesis: - Null Hypothesis: If we have to compare method A with method B about its superiority and if we proceed on the assumption that both methods are equally good. 1. It means that there is a significance difference between two methods. Null Hypothesis is symbolized by HO Alternate Hypothesis: As against null hypothesis. then this assumption is termed as Null Hypothesis. we may think that the method A is superior or the method B is inferior. H0 = There is no significance difference in Gross Profit ratio of Digjam & Raymond during the study period H1 = There is significance difference in Gross Profit ratio of Digjam Ltd & Raymond 2. Thus the significance level is the maximum value of probability of rejecting HO when it is true and it usually determined in advance before the testing the hypothesis. H0 = There is no significance difference in Net Profit ratio of Digjam & Raymond during the study period H1 = There is significance difference in Net Profit ratio of Digjam Ltd & Raymond during the study period 80 JVIMS . In Context to this Research. H0 = There is no significance difference in Current ratio of Digjam & Raymond during the study period H1 = There is significance difference in Current ratio of Digjam Ltd & Raymond during the study period 81 JVIMS .3. H0 = There is no significance difference in Earning per Share of Digjam & Raymond during the study period H1 = There is significance difference in Earning Per Share of Digjam Ltd & Raymond during the study period 7. H0 = There is no significance difference in Expenditure ratio of Digjam & Raymond during the study period H1 = There is significance difference in Expenditure ratio of Digjam Ltd & Raymond during the study period 4 H0 = There is no significance difference in Return on Capital Employed of Digjam & Raymond during the study period H1 = There is significance difference in Return On Capital Employed of Digjam Ltd & Raymond during the study period 5 H0 = There is no significance difference in Return on Equity Share Capital of Digjam & Raymond during the study period H1 = There is significance difference in Return on Equity Share Capital of Digjam Ltd & Raymond during the study period 6.JAMNAGAR . H0 = There is no significance difference in Price Earning Ratio of Digjam & Raymond during the study period H1 = There is significance difference in Price Earning ratio of Digjam Ltd & Raymond during the study period 8. H0 = There is no significance difference in Fixed Assets Turnover ratio of Digjam & Raymond during the study period H1 = There is significance difference in Fixed Assets Turnover ratio of Digjam Ltd & Raymond during the study period 14. H0 = There is no significance difference in Overall Turnover ratio of Digjam & Raymond during the study period H1 = There is significance difference in Overall Turnover ratio of Digjam Ltd & Raymond during the study period 82 JVIMS .9.JAMNAGAR . H0 = There is no significance difference in Proprietary ratio of Digjam & Raymond during the study period H1 = There is significance difference in Proprietary ratio of Digjam Ltd & Raymond during the study period 11 H0 = There is no significance difference in Debt-Equity ratio of Digjam & Raymond during the study period H1 = There is significance difference in Debt-Equity ratio of Digjam Ltd & Raymond during the study period 12 H0 = There is no significance difference in Stock turnover ratio of Digjam & Raymond during the study period H1 = There is significance difference in Stock turnover ratio of Digjam Ltd & Raymond during the study period 13. H0 = There is no significance difference in Quick ratio of Digjam & Raymond during the study period H1 = There is significance difference in Quick ratio of Digjam Ltd & Raymond during the study period 10. For this a very powerful test for testing the significance of the discrepancy between frequency distribution and expected distribution.JAMNAGAR . This test is also known as Test of Goodness of Fit.Ei)2 ----------------Ei 83 JVIMS . This test was given by Karl Pearson in 1900.square Test:Suppose we have obtained an observed frequency distribution and we are interested in knowing whether the observed frequency distribution supports a particular hypothesis. The value of X2 is calculated by following formula : X2 = (Oi . Chi-square is a continuous distribution and the form of the distribution depends upon degree of freedom n.15. Chi. H0 = There is no significance difference in Debtors ratio of Digjam & Raymond during the study period H1 = There is significance difference in Debtors ratio of Digjam Ltd & Raymond during the study period Statistical Tool Used in Research: _ In this research chi-square Test is used as a statistical tool. JAMNAGAR .RATIO ANALYSIS 84 JVIMS . Return on Equity Share Capital 3. Net Profit Ratio 3. Gross Profit Ratio 2.JAMNAGAR . Price Earning Ratio 85 JVIMS . Return on Capital Employed 2.PROFITABILITY RATIOS In Relation to Sales:1. Earning Per Share 4. Expenditure Ratio In Relation to Investment:1. (Amt in Lacs.x 100 Sales Where.x 100 = 62.Cost of goods sold (COGS) COGS = Opening Stock + Purchases + Purchase Expenses . Formula: Gross Profit Ratio = Gross Profit ------------------.13 2009 = ----------------.49 6907. It is an useful indication of the profitability of business.61% 10802.34 2008 = ----------------.x 100 = 63.) 6979.89 86 JVIMS . A high ratio of gross profit to sales is a sign of a good management. while a low ratio is definitely a danger signal.x 100 = 64.20% 11104.63 8861.Closing Stock - Digjam: . It is a ratio expressing relationship between Gross Profit earned to Net Sales.JAMNAGAR .32% 13992.32 2007 = -----------------. Gross Profit = Sales .In Relation to Sales Gross Profit Ratio: Gross Profit Ration measures the percentage of each sales rupee remaining after the firm has paid for its goods. warranting a careful and detailed analysis of the factors responsible for it. 28% GROSS PROFIT RATIO 100 90 80 70 60 PERCENTAGE 50 40 30 20 10 0 2007 2008 YEAR 2009 DIGJAM RAYMOND 87 JVIMS ..38 YEAR 2007 2008 2009 DIGJAM 64.57% 132251.01 2007 = -----------------.61% 62.JAMNAGAR .21% 128419.x 100 = 95.x 100 =92.86 2009 = ----------------.32% RAYMOND 95.20% 63.21% 90.15 127267.25 2008 = ----------------.x 100 = 90.Raymond: .(Amt in Lacs.57% 92.) 122263.35 119781.28% 137919. Ho is accepted. and at 5% level of significance = 5. 88 JVIMS . Also shows fluctuating trend.32 Expected Frequency (Ei) 63.991 X2cal < X2tab .38 63. So.21%. It shows good sign of management for Raymond as it implies that cost of production of the firm is relatively low.32%.046 D.20%. Shows fluctuating trend.f = n-1 = 3-1=2 Table of Chi-square on 2 D. & again in 2009 it was increased to 92. In the year 2007 it was 64. which was decreased to 90. Chi . low selling price resulting form severe competition.18 -0.021 0.38 63.57% in 2008. In 2007 it was 95.28%.001 0.024 0.61 62.61%. The Gross Profit Ratio of Raymond Ltd. again in 2009 it was increased to 63.38 (Oi-Ei) (Oi-Ei)2 / Ei 2007 2008 2009 1.23 -1. Gross Profit Ratio of Digjam Ltd is low because High cost of production.JAMNAGAR .F.20 63. while in 2008 it was decreased to 62.square Test for DIGJAM: Year Observed Frequency (OI) 64. When we compare the ratio of both the company we can say that Raymond has High Gross Profit Ratio.Interpretation: The Gross Profit ratio of Digjam Ltd.06 TOTAL 0. Therefore it can be said that there is no significance Difference in the Gross Profit Ratio of DIGJAM Ltd during the study period. 69 92. So.21 90. Ho is accepted.57 92.069 0. and at 5% level of significance = 5.69 (Oi-Ei) (Oi-Ei)2 / Ei 2007 2008 2009 2.002 0.JAMNAGAR .048 0.28 Expected Frequency (Ei) 92.Chi .f = n-1 = 3-1=2 Table of Chi-square on 2 D.991 X2cal < X2tab .119 D.69 92.52 -2.41 TOTAL 0. 89 JVIMS .12 -0.square Test for RAYMOND: Year Observed Frequency (OI) 95.F. Therefore it can be said that there is no significance Difference in the Gross Profit Ratio of RAYMOND Ltd during the study period. 89 90 JVIMS .JAMNAGAR .26) % 13992.) (2269.63 (1156. This ratio is valuable for the purpose of ascertaining the over-all profitability of the business & shows the efficiency or otherwise of operating the business.21) 2008 = ----------------.x 100 Sales Digjam: . A low net profit ratio has opposite implications.10) 2007 = -----------------. cost of production is rising and demand for the product is falling.24) 2009 = ----------------.Net Profit Ratio: Net Profit Ratio measures the percentage of each sales rupee remaining after all costs and expenses including interests and taxes have been deducted.(Amt in Lacs.3)% 11104. This ratio indicates what portion of sales revenue is left to the proprietors after all operating expenses are met.x 100 = (7.49 (811. Formula: Net Profit after Tax Net Profit Ratio = ---------------------------.x 100 = (8.x 100 = (21)% 10802. A high net profit ratio would ensure adequate return to the owners as well as enable a firm to withstand adverse economic conditions when selling price is declining. 60)% Net Profit Ratio 20% 15% 10% 5% 0% Percentage -5% -10% -15% -20% -25% Year 2007 2008 2009 DIGJAM RAYMOND 91 JVIMS .3)% (8.68) 2009 = ----------------.x 100 = (19.x 100 = 15.15 (27039.JAMNAGAR .35 6612.60)% 137919.28 2007 = -----------------.Raymond: .67% 5% (19.) 20125.38 YEAR 2007 2008 2009 DIGJAM (21)% (7.67% 128419.(Amt in Lacs.17 2008 = ----------------.26)% RAYMOND 15.x 100 = 5% 132251. 2008 & 2009. Shows negative trend. This shows that management is not able to operate business with sufficient success for recovering the revenues from the business. 2008 & 2009. Net Profit Ratio for Raymond shows decreasing trend. So.19 (Oi-Ei) (Oi-Ei)2 / Ei -33. Therefore it can be said that there is no significance difference in the Net Profit Ratio of DIGJAM Ltd during the study period.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) -21 -7. They are not making net profit during these 3 years Their loss shows fluctuating trend. Chi .3 -8.19 -19. When we compare the ratio of both companies we can say that for the year 2009 both company shows loss. They have net profit in 2007 & 2008.45 TOTAL -90. Their Net Profit decreases continuously during the year 2007.19 -12.30 -155.82 D.19 -12.f = n-1 = 3-1=2 Table of Chi-square on 2 D. Has net loss for the year 2007. and at 5% level of significance = 5. Ho is accepted.Interpretation: The Net Profit Ratio for Digjam Ltd. Digjam Ltd. but it has loss in the year 2009.F.49 -20. 92 JVIMS .JAMNAGAR .991 X2cal < X2tab .26 Expected Frequency (Ei) -12.16 -34.36 -31. 36 (Oi-Ei) (Oi-Ei)2 / Ei 15.f = n-1 = 3-1=2 Table of Chi-square on 2 D.64 -19.31 4.Chi .JAMNAGAR .96 TOTAL 651.80 1106. and at 5% level of significance = 5.F.60 Expected Frequency (Ei) 0.36 0.67 1817. So.10 59. 93 JVIMS .57 D.36 0.67 5 -19. Ho is rejected.991 X2cal > X2tab .square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 15. Therefore it can be said that there is significance difference in the Net Profit Ratio of RAYMOND Ltd during the study period. 15 94 JVIMS .63 14806.24 2007 = -----------------.89% 11104.x 100 = 102.(Amt in Lacs. Formula: Total Expenses Expense Ratio = -----------------------.81% 13992.19 2008 = ----------------.x 100 Sales Digjam: .) 121798.x 100 = 94.49 12314. every expenditure has to be matched with sales.x 100 = 106.89 Raymond: .62% 132251.JAMNAGAR .x 100 = 105.35 135717.50% 10802.84% 128419. For the purpose of ascertaining relationship between expenses & net sales expense ratios are computed.) 11504.(Amt in Lacs.52 2009 = ----------------.53 2007 = -----------------.x 100 = 110.51 2008 = ----------------.Expenditure Ratio:In order to determine & scrutinize the operational efficiency of the business. JAMNAGAR .41% 137919.50% 110.81% RAYMOND 94.84% 102.x 100 =111.62% 111.89 2009 = ----------------.38 YEAR 2007 2008 2009 DIGJAM 106.153654.41% Expenditure Ratio 115 110 105 Percentage 100 DIGJAM 95 90 85 2007 2008 Year 2009 RAYMOND 95 JVIMS .89% 105. IN 2007 it was 105.50 110.03 0.92 TOTAL 0. In 2007 it was 94.89 105. Expenditure ratio of Raymond Ltd also shows increasing trend.JAMNAGAR .f = n-1 = 3-1=2 Table of Chi-square on 2 D. are increasing from year 2007 to 2009. So. Thus.16 -1.50% & in 2009 it was increased to 110.81 Expected Frequency (Ei) 107. and at 5% level of significance = 5. Has more expenditure as compared to Raymond. Chi . Expenditure of Raymond Ltd.48% in 2008.Interpretation: The Expenditure ratio of Digjam Ltd. then it was increased to 106.13 D. When we compare the expenditure ratio of both company expenditures of both the companies are increasing from 2007 to 2009. 96 JVIMS .01 0.09 0.F. Therefore it can be said that there is no significance difference in the Expenditure Ratio of DIGJAM Ltd during the study period.41%.73 (Oi-Ei) (Oi-Ei)2 / Ei -1.84% the it was increased to 102.991 X2cal < X2tab . Digjam Ltd. & in 2009 it was 111.73 107. are increasing from year 2007 to 2009.73 107. Expenditure of Digjam Ltd. Shows increasing trend. Thus.23 3.89%. Ho is accepted.81%.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) 106. Therefore it can be said that there is no significance difference in the Expenditure Ratio of RAYMOND Ltd during the study period.64 0.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 94.991 X2cal < X2tab .45 TOTAL 0.96 102. 97 JVIMS .69 1.01 0.41 Expected Frequency (Ei) 102.96 (Oi-Ei) (Oi-Ei)2 / Ei -8.F.12 -0.34 D.84 102.62 111.96 102. and at 5% level of significance = 5.f = n-1 = 3-1=2 Table of Chi-square on 2 D. Ho is accepted.Chi .JAMNAGAR .34 8. So. 38) 2008 = ----------------.x 100 Capital Employed Where.In Relation to Investment Return on Capital Employed: It is an index of profitability of business & is obtained by comparing net profit with capital employed.90)% 20760.x 100 = (5. reserves & surplus and long term loans such as debentures.62)% 19660. The success of the enterprise is judge with the help of this ratio.54 (712. The term capital employed includes share capital.x 100 = (3.55)% 20177.22) 2009 = ----------------.06 (1120.JAMNAGAR . Formula: EBIT Return on Capital Employed = --------------------------. the more efficient is the use of capital employed.25 98 JVIMS .66) 2007 = -----------------.) (393. Digjam: . The higher the ratio. EBIT = Earnings before interests & tax Capital Employed = Equity Share Capital + Reserves & Surplus + Long Term Loans.(Amt in Lacs. This ratio provides a test of profitability related to the sources of long term funds & it provides sufficient insight into how efficiently the long-term funds of owners and lenders are being used.x 100 = (1. ) 23823.85% 4.66 2008 = ----------------.55)% (3.x 100 = 4.JAMNAGAR .62% (15.62)% RAYMOND 16.94 8169.17 (29755.90)% (5.23)% Return on Capital Employed 20 15 10 5 Percentage 0 -5 -10 -15 -20 Year 2007 2008 2009 DIGJAM RAYMOND 99 JVIMS .Raymond: .85% 141415.49 YEAR 2007 2008 2009 DIGJAM (1.28 2007 = -----------------.(Amt in Lacs.x 100 = 16.06) 2009 = ----------------.23) % 195363.62% 176458.x 100 = (15. Is not getting return on their capital employed.31 TOTAL -8. So.69 -3. So. Their return on capital employed are decreasing. Their performance is decreasing. 100 JVIMS . Ho is accepted.90) (5.14 -14. They are getting return in 2007 & 2008.59 9.69 (Oi-Ei) (Oi-Ei)2 / Ei -5.f = n-1 = 3-1=2 Table of Chi-square on 2 D.79 D. we can say that their operational efficiency is declining. they have less internal accruals & suppliers are not willing to extend more favorable terms. they have less efficient use of capital employed. Return on capital employed of Raymond ltd. Digjam Ltd. So. While in Raymond ltd. Shows decreasing trend.48 .47 -23. and at 5% level of significance = 5.JAMNAGAR . While in 2009 they are not getting any return on their capital employed.991 X2cal < X2tab .F.55) (3.square Test for DIGJAM: - Year 2007 2008 2009 Observed Frequency (OI) (1.62) Expected Frequency (Ei) -3. Therefore it can be said that there is no significance difference in the Return on capital employed of DIGJAM Ltd during the study period.45. Is poor as they are not getting return on their capital employed & their operational efficiency is not good.69 -3. Chi . When we compare the ratios of both the company we can say that performance of Digjam Ltd. Shows fluctuating trend.Interpretation:Return on capital employed of Digjam ltd.24 7. So. Chi - square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 16.85 4.62 (15.23) Expected Frequency (Ei) 2.08 2.08 2.08 (Oi-Ei) (Oi-Ei)2 / Ei 14.77 2.54 -17.31 TOTAL 104.88 3.10 144.05 252.03 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal >X2tab . So, Ho is rejected. Therefore it can be said that there is significance difference in the Return on capital employed of RAYMOND Ltd during the study period. 101 JVIMS - JAMNAGAR Return on Shareholder¶s Fund: This ratio indicates whether the return on shareholder¶s funds is enough in relation to the risks that they undertake. This ratio shows what amount of dividend is likely to be received on shares. It has great practical importance to be compared with that of the other company. This ratio reveals how owners fund (shareholders funds) are utilized by the firm. This ratio will throw light on the relative performance and strength of the company. Formula: Net Profit after Tax Return on Shareholders Fund = --------------------------- x 100 Shareholders fund Digjam: - (Amt in Lacs.) (2269.10) 2007 = ------------------ x 100 = (9.69) % 23413.57 (811.21) 2008 = ----------------- x 100 = (3.51) % 23092.38 (1156.24) 2009 = ----------------- x 100 = (4.91) % 23542.72 Raymond: - (Amt in Lacs.) 20125.28 2007 = ------------------ x 100 = 14.84% 135615.94 6612.17 2008 = ----------------- x 100 = 4.67% 141915.45 102 JVIMS - JAMNAGAR (27039.68) 2009 = ----------------- x 100 = (23.56) % 114798.32 YEAR 2007 2008 2009 DIGJAM (9.69)% (3.51)% (4.91)% RAYMOND 14.84% 4.67% (23.56)% Return on Shareholders Fund 20 15 10 5 0 Percentage -5 -10 -15 -20 -25 -30 Year 2007 2008 2009 DIGJAM RAYMOND 103 JVIMS - JAMNAGAR Chi .69%.95 TOTAL -40.91 D.73 -9. then it 2008 it was -3.56%.85 -75.51% and in 2009 it was -4. When we compare the ratio of return on shareholders fund we can say that Raymond Ltd is earning more return on equity share capital as compare to Digjam. So. Therefore it can be said that there is no significance difference in the Return on Shareholders Fund of DIGJAM Ltd during the study period.Interpretation: Return on shareholders fund ratio shows negative trend for Digjam ltd.84%.10 -19. In 2007 return on shareholders fund ratio was 14. Return on shareholders fund ratio shows Decreasing trend for Raymond Ltd.69) (3.JAMNAGAR .04) (6. 104 JVIMS . and at 5% level of significance = 5. Ho is accepted.55 -10.91) Expected Frequency (Ei) (6.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) (9.F.91%.67% & again in 2009 it was decreased to -23. which was decreased to 4. In 2007 it was -9.04) (6. They are getting return on shareholders fund on 2007 & 2008 but in 2009 they are not getting any return on shareholders fund.96 -15.991 X2cal < X2tab .f = n-1 = 3-1=2 Table of Chi-square on 2 D.04) (Oi-Ei) (Oi-Ei)2 / Ei -15. Their return is in negative & it is fluctuating.51) (4. Digjam ltd is not earning on their shareholders fund. JAMNAGAR . and at 5% level of significance = 5.53 D.91 TOTAL -134.35 (Oi-Ei) (Oi-Ei)2 / Ei 13. So.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 14. Ho is rejected.32 -24.35 -1.84 4.Chi .63 -602.F.991 X2cal < X2tab . 105 JVIMS .80 -8.f = n-1 = 3-1=2 Table of Chi-square on 2 D.35 -1. Therefore it can be said that there is no significance difference in the Return on Shareholders Fund of RAYMOND Ltd during the study period.49 3.67 (23.16 -459.56) Expected Frequency (Ei) -1. 08 106 JVIMS .28 2007 = -----------------. Formula: Net Profit after Tax ± Preference Dividend Return on Equity Share capital = --------------------------------------------------------.86% 6138.x 100 = (19.) 20125.21) 2008 = ----------------.79 (811.79) % 6875.10) 2007 = -----------------.x 100 Equity Capital Digjam: .JAMNAGAR .79 (1316.x 100 = 328.x 100 = (33) % 6875.(Amt in Lacs.14) % 6875.x 100 = (11. The ratio is obtained by dividing net profit after deduction of preference divided by amount of equity share capital.Return on Equity Share Capital: It shows what percentage of the profit is earned on the capital invested. This ratio measures the return on the total equity funds of ordinary shareholders.(Amt in Lacs.24) 2009 = ----------------.79 Raymond: .) (2269. 17 2008 = ----------------.6612.x 100 = 107.79)% (19.72% 6138.14)% RAYMOND 328.68) 2009 = ----------------.86% 107.52) % 6138.JAMNAGAR .52)% Return on Equity Share Capital 400 300 200 100 0 Percentage -100 -200 -300 -400 -500 Year 2007 2008 2009 DIGJAM RAYMOND 107 JVIMS .x 100 = (440.72% (440.08 (27039.08 YEAR 2007 2008 2009 DIGJAM (33)% (11. Chi . and at 5% level of significance = 5.f = n-1 = 3-1=2 Table of Chi-square on 2 D.Interpretation: Return on equity share capital of Digjam ltd.31 -21.78 -266. Ho is accepted.79) (19.41 -51.45 TOTAL -138. Shows fluctuating and negative trend. In 2007 & 2008 they are getting return on their equity share capital. So.31 (Oi-Ei) (Oi-Ei)2 / Ei -54. So.14) Expected Frequency (Ei) -21. When we compare return on equity share capital we can say that Raymond has more return on equity share capital except 2009.F.JAMNAGAR .991 X2cal < X2tab . They are not getting return on their equity share capital. Return on equity share capital of Raymond ltd.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) (33) (11.31 -21. while in 2009 they are not getting return on equity share capital. 108 JVIMS .10 -40. Therefore it can be said that there is no significance difference in the Return on Equity Share Capital of DIGJAM Ltd during the study period. we can say that for the year 2007 & 2008 Raymond has earned satisfactory return for their shareholders.60 D. Shows decreasing trend. While Digjam ltd has not earned satisfactory return for its shareholders.41 -76.31 -33. Chi .62 -3164. and at 5% level of significance = 5. So.94 -3.F.72 (440.991 X2cal < X2tab .94 -3.45 -50138.25 -81413.94 (Oi-Ei) (Oi-Ei)2 / Ei 332.8 111. Ho is rejected.66 -444.JAMNAGAR .f = n-1 = 3-1=2 Table of Chi-square on 2 D.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 328.46 TOTAL -28110.52) Expected Frequency (Ei) -3.32 D.86 107. Therefore it can be said that there is no significance difference in the Return on Equity Share Capital of RAYMOND Ltd during the study period. 109 JVIMS . 41 (1316. Of Equity Share Digjam: .Earning Per Share:EPS measures the profit available to the equity shareholders on a per share basis.30 Rs.= -3.10) 2007 = -----------------.24) 2009 = ----------------. 687.= 32.18 Rs. 687. Formula: Net Profit after tax ± Preference Dividend Earning per Share = ---------------------------------------------------------No. 687.41 (811.21) 2008 = ----------------.91 Rs.) (2269.) 20125.JAMNAGAR .(Amt in Lacs.= -1.41 Raymond: . that is.= -1.80 110 JVIMS . The EPS shows the average income that the firm earns per share if profit of the firm is more than EPS will increase and if profit of the firm is lower than EPS will decrease.79 Rs 613.(Amt in Lacs. The objective of finding this ratio is to measure the profitability of the firm on per equity share basis. the amount they can get on every share held.28 2007 = -----------------. 79 Rs. -1. -1.05 Rs 613.05 Rs.30 Rs.17 2008 = ----------------. -44. Earning Per Share 40 30 20 10 0 Rs. 10. RAYMOND 32.77 Rs 613.6612.= 10.77 Rs.18 Rs.68) 2009 = ----------------.= -44. -10 -20 -30 -40 -50 Year 2007 2008 2009 DIGJAM RAYMOND 111 JVIMS .JAMNAGAR .80 (27039.80 YEAR 2007 2008 2009 DIGJAM -3.91 Rs. 18 -1.31 -4.43 -3.04 TOTAL -13. Raymond¶s shareholders get return on every shares held by them in 2007 & 2008 but in 2009 they are not getting return on shares.64 D. So.14 -7.Interpretation: EPS of Digjam ltd shows negative trend &it is fluctuating. When we compare EPS of both company we can say that shareholders of Raymond ltd are getting more return on their share as compare to Digjam.f = n-1 = 3-1=2 Table of Chi-square on 2 D.66 -26.JAMNAGAR .991 X2cal < X2tab . and at 5% level of significance = 5. So their shareholders are not getting earnings on every share held by them.91 Expected Frequency (Ei) -2.30 -1.13 -2. Ho is accepted. Therefore it can be said that there is no significance difference in the Earning Per Share of DIGJAM Ltd during the study period. EPS of Raymond ltd is decreasing.13 (Oi-Ei) (Oi-Ei)2 / Ei -5. 112 JVIMS .84 -5. EPS of Raymond shows decreasing trend.13 -2. Chi .F. Their Earning per share is negative.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) -3. 21 TOTAL -6654. Therefore it can be said that there is no significance difference in the Earning Per Share of RAYMOND Ltd during the study period.61 -44. So.16 -0. 113 JVIMS .Chi .16 -0.63 10. and at 5% level of significance = 5.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 32.77 -19573.79 10.JAMNAGAR .16 (Oi-Ei) (Oi-Ei)2 / Ei 32.57 -12215.991 X2cal < X2tab . Ho is rejected.82 D.F.48 -703.77 -44.05 Expected Frequency (Ei) -0.f = n-1 = 3-1=2 Table of Chi-square on 2 D. LIQUIDITY RATIOS 1.JAMNAGAR . Current Ratio 2. Quick Ratio / Acid Test Ratio 114 JVIMS . 71 115 JVIMS .56:1 5492.Current Ratio: This ratio is most commonly used to perform short term financial analysis. provision for taxation. This ratio is an indication of the firm¶s commitment to meet its short-term liabilities. within a year.61 8595. converted into cash within a short period of time.= 1. Current assets represents those assets which can be in the ordinary course of business.02 2009 = ----------------.79:1 4815. debtors. normally not exceeding one year and includes cash and bank balances. Normally a current ratio of 2:1 is considered satisfactory. marketable securities.40 2008 = ----------------.= 1. dividends and outstanding expenses. bills payable. and bank credit. This ratio matches the current assets of the firm to the current liabilities of the firm. bills receivables.JAMNAGAR . It is also known as working capital ratios.) 8637. as originally contemplated.34 2007 = -----------------.61:1 5464. Formula: Current Assets Current Ratio = ------------------------Current Liabilities Digjam: (Amt in Lacs.16 8814. & prepaid expenses. consist of trade creditors.= 1. Current Liabilities defined as liabilities which are short-term maturing obligations to be met. 31:1 2.03 98165.JAMNAGAR .59 2007 = -----------------.) 82490.= 2.(Amt in Lacs.80:1 35044.31:1 28210.90 93282.56:1 RAYMOND 2.= 2.5 3 2.23 YEAR 2007 2008 2009 DIGJAM 1.79:1 1.80:1 Current Ratio 3.84:1 3.61:1 1.5 2 Times 1.09 2008 = ----------------.= 3.84: 29083.Raymond: .33 2009 = ----------------.5 1 0.5 0 2007 2008 Year 2009 DIGJAM RAYMOND 116 JVIMS . 09 TOTAL 0.04 -0.65 (Oi-Ei) (Oi-Ei)2 / Ei 0. Chi .square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) 1.JAMNAGAR . Ho is accepted.56: 1.14 -0. and at 5% level of significance = 5.56 Rs are available to meet them. When we compare the current ratio of both company we can say that current ratio of Raymond is higher.80:1. Therefore it can be said that there is no significance difference in the Current Ratio of DIGJAM Ltd during the study period.It shows that in 2009 current ratio of Digjam is 1.56 Expected Frequency (Ei) 1.001 0. It is decreasing from 2007 to 2009. 117 JVIMS . In 2007 it was 2. 2.31:1 in 2008 & in 2009 it was 2.65 1.79 1. Current Ratio of Raymond ltd shows fluctuating trend.Interpretation: Current Ratio of Digjam ltd shows decreasing trend.61 1.61:1.f = n-1 = 3-1=2 Table of Chi-square on 2 D. It implies that every one rupee of current liabilities. It implies that Raymond has larger amount of rupees available per rupee of current liability & the more is firm¶s ability to meet current obligations & the greater is tha safety of funds for short term creditors. So. current assets of Rs. It implies that every one rupee of current liabilities current assets of 1.80: 1.004 0.991 X2cal < X2tab .017 D.80 are available to meet them.012 0.56:1.84:1 then it was increased to 3. then it decreases to 1.F.79:1.In 2009 current ratio of Raymond ltd is 2.65 1. & then in 2009 it was 1. In 2007 it was 1. 31 2.f = n-1 = 3-1=2 Table of Chi-square on 2 D.98 (Oi-Ei) (Oi-Ei)2 / Ei -0.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 2.Chi . Ho is accepted.98 2.007 0.011 0.JAMNAGAR .84 3. 118 JVIMS .80 Expected Frequency (Ei) 2.18 TOTAL 0. So.14 0.055 D.98 2. and at 5% level of significance = 5. Therefore it can be said that there is no significance difference in the Current Ratio of RAYMOND Ltd during the study period.037 0.F.33 -0.991 X2cal <X2tab . 79:1 5464. This ratio removes the defect of current ratio that current ratio fails to convey information on the composition of the current assets of a firm.88:1 4815.(Amt in Lacs. In this category of current assets are cash and bank balances.17 2009 = ----------------. Formula: Quick Assets Quick Ratio /Acid Test Ratio = ------------------------Current Liabilities Digjam: . It is a measurement of a firm¶s ability to convert its current assets quickly into cash in order to meet its current liabilities.61 4610.= 0.) 4266. Quick assets refers to current assets which can be converted into cash immediately or at short notice without diminution of value. short-term marketable securities.90 119 JVIMS .71 Raymond: .) 54124.Quick Ratio / Acid.JAMNAGAR .51 2008 = ----------------.test Ratio: It is a measure of liquidity. It doesn¶t include prepaid expenses & inventory.= 0.16 4313.= 0.= 1.(Amt in Lacs.86:1 29083.84:1 5492.09 2007 = -----------------. debtors/receivables.23 2007 = -----------------. JAMNAGAR .= 2.88:1 0.83:1 Quick/Acid Test Ratio 2.79:1 0.14:1 28210.5 2 1.60307.03 64124.97 2009 = ----------------.5 0 2007 2008 Year 2009 120 JVIMS .84:1 RAYMOND 1.91 2008 = ----------------.5 Times 1 DIGJAM RAYMOND 0.23 YEAR 2007 2008 2009 DIGJAM 0.83:1 35044.86:1 2.14:1 1.= 1. f = n-1 = 3-1=2 Table of Chi-square on 2 D. Ho is accepted. In 2007 it was 1. They can able to serve their short-term liabilities Chi .84: 1. and at 5% level of significance = 5.90:1 When we compare the ratio of both the company we can say that quick ratio of Raymond ltd is comparatively higher than Digjam ltd. 121 JVIMS . Therefore it can be said that there is no significance difference in the Quick/Acid Test Ratio of DIGJAM Ltd during the study period.84 (Oi-Ei) (Oi-Ei)2 / Ei 0.002 0.04 -0.05 0 TOTAL 0. It shows that Raymond ltd has good liquidity position.003 0 0. then again in 2009 it increases to 0.88: 1. in 2009 it decreases to 1.98: 1 then it increases to 2.005 D.F.88 0.79 0. So. then in 2008 it decreases to 0.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) 0.26: 1. In 2007 it was 0.84 0.84 Expected Frequency (Ei) 0.79:1 .JAMNAGAR .84 0.Interpretation: Quick Ratio of Digjam ltd shows fluctuating trend. Quick Ratio of Raymond ltd shows fluctuating trend.991 X2cal < X2tab . and at 5% level of significance = 5.83 Expected Frequency (Ei) 1.06 0.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 1.991 X2cal <X2tab . Therefore it can be said that there is no significance difference in the Quick/Acid Test Ratio of RAYMOND Ltd during the study period.JAMNAGAR .94 (Oi-Ei) (Oi-Ei)2 / Ei -0.f = n-1 = 3-1=2 Table of Chi-square on 2 D.94 1.2 -0.006 0.F.86 2.14 1. So.94 1.029 D.021 0. 122 JVIMS .11 TOTAL 0.002 0. Ho is accepted.Chi . LEVERAGE RATIOS 1. Proprietary Ratio 2. Debt Equity Ratio 123 JVIMS .JAMNAGAR . x 100 = 85. Formula : Proprietors Funds Proprietary Ratio = --------------------------.94 2007 = -----------------.57 2007 = -----------------.98 23542.32% 16000.(Amt in Lacs.Proprietary Ratio: Proprietary Ratio indicates the extent to which assets are financed by owners funds.JAMNAGAR .38 2008 = ----------------. the stronger the financial position of enterprise.x 100 Total Assets Digjam: .) 135615.x 100 = 146.) 23413.81 Raymond: . The higher the ratio.47% 158664.63% 14840.x 100 = 158.79 23092.74 124 JVIMS .x 100 = 148.81% 15517. as it signifies that the proprietors have provided larger funds to purchase the assets.(Amt in Lacs.57 2009 = ----------------. 45 2008 = ----------------.32 2009 = ----------------.x 100 = 56.20% Proprietary Ratio 180 160 140 120 100 Percentage 80 60 40 20 0 2007 2008 Year 2009 DIGJAM RAYMOND 125 JVIMS .96 114798.19% 56.141915.JAMNAGAR .32% 148.x 100 = 85.81% 158.57 YEAR 2007 2008 2009 DIGJAM 146.20% 204280.63% RAYMOND 85.47% 85.19% 166592. F.19% in 2008 and again in 2009 it was decreased to 56.32%. Proprietary ratio of Raymond ltd shows decreasing trend.f = n-1 = 3-1=2 Table of Chi-square on 2 D. So their proprietary ratio is increasing fro year 2007 to 2009.44 7. it was decreased to 85.991 X2cal < X2tab .20% When we compare the proprietary ratio of both the company we can say that proprietary of both the company we can say that proprietary ratio of Digjam ltd is comparatively high. So.81%.JAMNAGAR . & in 2009 it was 158.32 148. In 2007 it was 146.039 0.25 151. Ho is accepted.360 0. 126 JVIMS .25 (Oi-Ei) (Oi-Ei)2 / Ei -4.559 D. In 2007 it was 85.47%.Interpretation: Proprietary ratio of Digjam ltd shows increasing trend.81 158.63 Expected Frequency (Ei) 151.93 -2.25 151.63%. Therefore it can be said that there is no significance difference in the Proprietary Ratio of DIGJAM Ltd during the study period. and at 5% level of significance = 5. then in 2008 it was increased to 148.38 TOTAL 0.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) 146. Chi .160 0. 62 75. So.987 7.F.47 85. Ho is rejected.991 X2cal >X2tab .20 Expected Frequency (Ei) 75.62 75.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 85.62 (Oi-Ei) (Oi-Ei)2 / Ei 9.42 TOTAL 1. Therefore it can be said that there is significance difference in the Proprietary Ratio of RAYMOND Ltd during the study period.481 D.19 56. and at 5% level of significance = 5.211 4. 127 JVIMS .283 1.Chi .JAMNAGAR .85 9.57 -19.f = n-1 = 3-1=2 Table of Chi-square on 2 D. Formula: Long Term Debt Debt Equity Ratio = ----------------------------Shareholders Fund Digjam: .11 2007 = -----------------.Debt Equity Ratio: Debt-equity ratio measures the ratio of long-term debt to shareholder¶s fund.= 1.27 2009 = ----------------.42:1 1135615. Alternatively. It shows relationship between borrowed funds & owner¶s capital.= 0.= 1.79 Raymond: .07:1 8875. this ratio indicates the relative proportions of debt & equity in financing the assets of the firm.) 56686.) 10447.05 2007 = -----------------.(Amt in Lacs.JAMNAGAR .79 9835.44:1 6875.94 128 JVIMS . This ratio reflects the relative claims of creditors & shareholders against the asset of the firm.52:1 6875.79 9454.(Amt in Lacs.73 2008 = ----------------.= 1. 50498.44:1 1.8 0.4 1.45 86884.JAMNAGAR .6 0.6 1.2 0 2007 2008 Year 2009 DIGJAM RAYMOND 129 JVIMS .77:1 114785.= 0.35:1 141915.52:1 1.4 0.2 1 Times 0.04 2008 = ----------------.07:1 RAYMOND 0.77:1 Debt Equity Ratio 1.35:1 0.= 0.42:1 0.81 2009 = ----------------.32 YEAR 2007 2008 2009 DIGJAM 1. 34 1.77:1 which implies that every one rupee of equity Rs.991 X2cal < X2tab . 130 JVIMS .34 (Oi-Ei) (Oi-Ei)2 / Ei 0.44:1 in 2008 and again in 2009 it was decreased to 1.07:1.52 1. Therefore it can be said that there is no significance difference in the Debt Equity Ratio of DIGJAM Ltd during the study period. Chi . Debt equity ratio is declinining from 2007 to 2009. and at 5% level of significance = 5.77 debt is there. which was decreased to 1. Debt equity ratio of Raymond ltd shows fluctuating trend.085 D. In 2007 it was 1.square Test for DIGJAM : - Year 2007 2008 2009 Observed Frequency (OI) 1. 0.52:1.27 TOTAL 0.77:1 In 2009 Debt equity ratio of Raymond ltd is 0. 1.18 0.F.10 -0.054 0. Ho is accepted. It implies that every one rupee of equity Rs.024 0.07 debt is there.44 1.f = n-1 = 3-1=2 Table of Chi-square on 2 D.07 Expected Frequency (Ei) 1.35:1 & again in 2009 it was increased to 0.42: 1. In 2007 it was 0.007 0.Interpretation: Debt-equity ratio of Digjam ltd shows decreasing strand.07:1. which was decreased to 0. So. In 2009 Debt equity ratio of Digjam ltd is 1.34 1.JAMNAGAR . F.132 0.f = n-1 = 3-1=2 Table of Chi-square on 2 D.16 0.51 0.square Test for RAYMOND : - Year 2007 2008 2009 Observed Frequency (OI) 0.Chi . Ho is accepted. Therefore it can be said that there is no significance difference in the Debt Equity Ratio of RAYMOND Ltd during the study period.26 TOTAL 0.35 0.050 0.09 -0.77 Expected Frequency (Ei) 0. 131 JVIMS .51 (Oi-Ei) (Oi-Ei)2 / Ei -0.42 0.991 X2cal <X2tab .51 0. and at 5% level of significance = 5. So.016 0.JAMNAGAR .198 D. JAMNAGAR . Fixed Assets Turnover Ratio 3. Overall Turnover Ratio 4. Creditors Ratio 132 JVIMS . Stock Turnover Ratio 2.ACTIVITY RATIOS 1. Debtors Ratio 5. A high ratio is good from the viewpoint of liquidity and vice versa. Stock Turnover ration indicates how fast inventory is sold.76 2007 = -----------------.Closing Stock Opening Stock + Closing Stock Average Stock = --------------------------------------------2 Digjam: .= 1.63 4197.29 2008 = ----------------. A low ratio would signify that inventory doesn¶t sell fast and stays on the shelf or in the warehouse for a long time. Cost of goods sold (COGS) = Opening Stock + Purchases + Purchase Expenses .20 times 3497.= 1.) 5131.Stock Turnover Ratio: - This ratio indicates whether investment in inventories is within proper limits or not keeping in view the turnover of the business.(Amt in Lacs.12 133 JVIMS . Formula: Cost of Goods Sold (COGS) Stock Turnover Ratio = ---------------------------------------Average Stock Where.49 times 3448.JAMNAGAR . 3823.17 2009 = ----------------- = 1.18 times 3227.12 Raymond: - (Amt in Lacs.) 10651.52 2007 = ------------------ = 0.63 times 17020.18 12469.90 2008 = ----------------- = 0.76 times 16487.09 9454.27 2009 = ----------------- = 0.43 times 8875.79 YEAR 2007 2008 2009 DIGJAM 1.49 times 1.20 times 1.18 times RAYMOND 0.63 times 0.76 times 0.43 times Stock Turnover Ratio 1.6 1.4 1.2 1 0.6 0.4 0.2 0 2007 2008 Year 2009 R Y OND 134 JVIMS - JAMNAGAR £ ¢ £ ¢ ¡ I J Times 0.8 Interpretation: - Stock turnover ratio of Digjam ltd. Shows increasing trend. In 2007 it was 1.18 times then it increases to 1.20 times & in 2009 it is 1.49 times. Stock Turnover ratio of Raymond ltd shows fluctuating trend. IN 2007 it was 0.43 times then it increases to 0.76 times then in 2009 it was 0.63 times. When we compare the ratio of both company we can say that Digjam ltd has high stock turnover ratio , it shows that inventories are sold fast & doesn¶t stay in warehouse for a long time. While Raymond ltd has low stock turnover ratio as compare to Digjam, it shows that inventories are not sold fast & stays in warehouse for a long time. Chi - square Test for DIGJAM: - Year 2007 2008 2009 Observed Frequency (OI) 1.49 1.20 1.18 Expected Frequency (Ei) 1.29 1.29 1.29 (Oi-Ei) (Oi-Ei)2 / Ei 0.20 -0.09 -0.11 TOTAL 0.031 0.006 0.009 0.046 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Stock Turnover Ratio of DIGJAM Ltd during the study period. 135 JVIMS - JAMNAGAR Chi - square Test for RAYMOND: - Year 2007 2008 2009 Observed Frequency (OI) 0.63 0.76 0.43 Expected Frequency (Ei) 0.61 0.61 0.61 (Oi-Ei) (Oi-Ei)2 / Ei 0.02 0.15 -0.18 TOTAL 0.001 0.037 0.053 0.091 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal <X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Stock Turnover Ratio of RAYMOND Ltd during the study period. 136 JVIMS - JAMNAGAR 05 11104.) 10802. To ascertain the efficiency & profitability of business.= 1.24 times 6245.Fixed Assets Turnover Ratio: The Fixed assets turnover ratio measures the efficiency with the firm is utilizing its investment in fixed assets.89 2009 = ----------------. It also indicates the adequacy of sales in relation to the investment in fixed assets.) 128419.63 2008 = ----------------.76 Raymond: . the total fixed assets are compared to sales The greater the ratio more will be efficiency of assets usage.47 times 7363.58 13992.= 2.35 2007 = -----------------.JAMNAGAR . Formula: Sales Fixed Asset turnover Ratio = ------------------Fixed Asset Digjam: .= 1.67 times 76174.15 137 JVIMS .49 2007 = -----------------.66 times 6703.(Amt in Lacs.(Amt in Lacs.= 1. 30 times 106115.5 2 1.5 0 2007 2008 Year 2009 138 JVIMS .80 times 73310.= 1.38 2009 = ----------------.66 times 2.15 2008 = ----------------.= 1.67 times 1.87 137919.80 times 1.JAMNAGAR .5 Times 1 DIGJAM RAYMOND 0.30 times Fixed Assets Turnover Ratio 2.24 YEAR 2007 2008 2009 DIGJAM 1.47 times 1.24 times RAYMOND 1.132251. In 2007 it was 1. So.45 TOTAL 0.f = n-1 = 3-1=2 Table of Chi-square on 2 D.square Test for DIGJAM: - Year 2007 2008 2009 Observed Frequency (OI) 1.30 times.79 1.47 times then it increases to 1.24 times. and at 5% level of significance = 5.24 Expected Frequency (Ei) 1. 139 JVIMS .179 D. In 2007 it was 1.79 1. When we compare the ratio of both company fixed assets turnover ratio was high in Raymond ltd in the year 2007 & 2008.66 2. It shows that in 2007 & 2008 efficiency of Raymond in utilizing its investment in fixed assets is good. Fixed assets turnover ratio of Raymond ltd shows fluctuating trend.32 -0.991 X2cal < X2tab .80 times in 2008 & in 2009 it decreases to 1. It shows good efficiency of Digjam in utilizing its investment in fixed assets.009 0.057 0. Ho is accepted. Therefore it can be said that there is no significance difference in the Fixed Assets Turnover Ratio of DIGJAM Ltd during the study period.Interpretation: Fixed assets turnover ratio of Digjam ltd shows increasing trend.13 0.47 1.67 times then it was 1. Chi . It shows average efficiency of Raymond in utilizing its investment in fixed assets.79 (Oi-Ei) (Oi-Ei)2 / Ei -0.F.113 0. while in 2009 fixed assets turnover ratio of Digjam ltd was high this shows good efficiency of Digjam for year 2009 in utilizing its investment in fixed assets.66 times & in 2009 it was 2.JAMNAGAR . and at 5% level of significance = 5.f = n-1 = 3-1=2 Table of Chi-square on 2 D. Therefore it can be said that there is no significance difference in the Fixed Assets Turnover Ratio of RAYMOND Ltd during the study period.21 -0.F.004 0.08 0. So. 140 JVIMS .JAMNAGAR .square Test for RAYMOND: - Year 2007 2008 2009 Observed Frequency (OI) 1.67 1.29 TOTAL 0.59 1.028 0.59 1.085 D.30 Expected Frequency (Ei) 1.991 X2cal <X2tab .053 0.59 (Oi-Ei) (Oi-Ei)2 / Ei 0.Chi .80 1. Ho is accepted. 06 11104. It obtains by dividing net sales with capital employed.JAMNAGAR .15 2008 = ----------------.17 141 JVIMS .Overall Turnover Ratio: The overall turnover ratio shows overall turnover of the business in times.91 times 141415.63 2008 = ----------------.54 13992.= 0.) 128419.89 2009 = ----------------.(Amt in Lacs.94 132251.75 times 176458.) 10802.= 0.52 times 19660.(Amt in Lacs.49 2007 = -----------------.71 times 20760. it means efficiency or total capital employed of the business against net sales of the firm.= 0. Formula: Net Sales Overall turnover Ratio = ------------------------Capital Employed Digjam: .25 Raymond: .= 0.35 2007 = -----------------.= 0. It indicates how many times business can stand against the net sales.55 times 20177. 7 0.75 times 0.8 0.4 0.2 0.3 0.71 times 0.38 2009 = ----------------.5 0.70 times Overall Turnover Ratio 1 0.91 times 0.52 times RAYMOND 0.JAMNAGAR .1 0 2007 2008 Year 2009 DIGJAM RAYMOND 142 JVIMS .49 YEAR 2007 2008 2009 DIGJAM 0.137919.6 Times 0.= 0.55 times 0.9 0.70 times 195363. 003 0. Chi .59 0.07 TOTAL 0.75 times & then in 2009 it decreased to 0. In 2007 it was 0.52 Expected Frequency (Ei) 0.59 0.F.f = n-1 = 3-1=2 Table of Chi-square on 2 D.71 0. It¶s a good sign of management for Raymond ltd & its capital employed are efficiently used.04 -0. In 2007 it was 0. So. 143 JVIMS . When we compare the ratio of both company we can say that overall turnover ratio of Raymond ltd is high.025 D. Ho is accepted.12 -0.014 0. Overall turnover ratio of Raymond ltd shows decreasing trend.008 0.55 0.71 times. and at 5% level of significance = 5.square Test for DIGJAM: - Year 2007 2008 2009 Observed Frequency (OI) 0. Therefore it can be said that there is no significance difference in the Overall Turnover Ratio of DIGJAM Ltd during the study period.91 times then it was 0.59 (Oi-Ei) (Oi-Ei)2 / Ei 0.70 times.991 X2cal < X2tab .52 times then it was increased to 0.55 times then it was increased to 0.Interpretation: Overall turnover ratio of Digjam ltd shows increasing trend.JAMNAGAR . square Test for RAYMOND: - Year 2007 2008 2009 Observed Frequency (OI) 0.91 0.002 0.09 TOTAL 0. So.79 0. and at 5% level of significance = 5.JAMNAGAR .018 0. Ho is accepted.f = n-1 = 3-1=2 Table of Chi-square on 2 D.030 D.79 (Oi-Ei) (Oi-Ei)2 / Ei 0.75 0.04 -0. 144 JVIMS . Therefore it can be said that there is no significance difference in the Overall Turnover Ratio of RAYMOND Ltd during the study period.12 -0.Chi .70 Expected Frequency (Ei) 0.010 0.79 0.F.991 X2cal <X2tab . JAMNAGAR .91 2008 = -------------.90 2007 = -------------.63 3157.89 Raymond: . It shows the efficiency or otherwise of the collection policy of the enterprise. In.x 365 = 83days 10802.20 2009 = -------------.07 2007 = -------------. The debtors turnover shows the relationship between credit sales & debtors of a firm. This ratio shows how quickly debtors are converted into cash.x 365 = 86 days 11104.(Amt in Lacs.) 2453.) 26877.(Amt in Lacs.35 145 JVIMS .x 365 = 82 days 13992. Formula: Debtors Debtors Ratio = -----------------.Debtors Ratio: The ratio shows the number of days taken to collect the dues of credit sales.49 2641. other words debtors ratio is a test of the liquidity of a firm.x 365 = 76 days 128419.x 365 Credit Sales Digjam: . 28988.56 2008 = -------------- x 365 = 80 days 132251.15 30447.61 2009 = --------------- x 365 = 81 days 137919.38 YEAR 2007 2008 2009 DIGJAM 83 days 86 days 82 days RAYMOND 76 days 80 days 81 days Debtors Ratio 88 86 84 82 Days 80 78 76 74 72 70 2007 2008 Year 2009 DIGJAM RAYMOND 146 JVIMS - JAMNAGAR Interpretation: Debtors ratio of Digjam ltd shows fluctuating trend. In 2007 they are getting payments in 83 days which was increased to 86 days in 2008 & in 2009 they are getting payments within 82 days. Debtors Ratio of Raymond ltd shows increasing trend, In 2007 they are getting payment within 76 days, the in 2008 it increases to 80 days & in 2009 it increases to 81 days. When we compare debtors ratio of both companies we can say that debtors ratio of Raymond ltd is comparatively lower as compare to Digjam. They are getting payment early from their debtors, It shows shorter time lag between credit sales & cash collection. Chi - square Test for DIGJAM: - Year 2007 2008 2009 Observed Frequency (OI) 83 86 82 Expected Frequency (Ei) 83.67 83.67 83.67 (Oi-Ei) (Oi-Ei)2 / Ei -0.67 2.33 -1.67 TOTAL 0.005 0.065 0.033 0.103 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal < X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Debtors Ratio of DIGJAM Ltd during the study period. 147 JVIMS - JAMNAGAR Chi - square Test for RAYMOND: - Year 2007 2008 2009 Observed Frequency (OI) 76 80 81 Expected Frequency (Ei) 79 79 79 (Oi-Ei) (Oi-Ei)2 / Ei -3 1 2 TOTAL 0.114 0.013 0.051 0.178 D.f = n-1 = 3-1=2 Table of Chi-square on 2 D.F. and at 5% level of significance = 5.991 X2cal <X2tab . So, Ho is accepted. Therefore it can be said that there is no significance difference in the Debtors Ratio of RAYMOND Ltd during the study period. . 148 JVIMS - JAMNAGAR SWOT ANALAYSIS 149 JVIMS .JAMNAGAR . Raid and Tailor. 2.SWOT Analysis Strength 1. Reliance.JAMNAGAR . 3. Participative leadership style of management. Co-ordination mgt. 1. No Weakness more expense in advertisement. consumer towards 4. national level 2. Change preference in 150 JVIMS . Policy. Dines etc«at 2. Give facility to employees. demands requriemnets(Ready 3. 2. Opportunity Threat 1. Digjam is going to enter into market of shirtings. Fully satisfaction among customers. Cut throught competition with Raymond. Increasing in market sales value. Good after sales service. 1. Ability to expand diversifies basis market and in the line with trends. made garments). JAMNAGAR . a. Aerodrome Road. UCO Bank b. 4. DIGJAM woolen mill 2. who is the bankers of the company Ands. where is the head office Ans. 3. Jamnagar 361 006 Gujarat. K. DIGJAM Limited. Aerodrome Road. Name of the company Ans. Jamnagar 361 006 Gujarat. who is the chairman of the company Ans. Bank of India c. Birla Chairman Siddharth Birla Vice Chairman 5. Bank of Baroda 151 JVIMS . what is the address of the company Ands.GENERAL INFORMATION 1. DIGJAM Limited. S. SBS h. of the company Ans. (0288)2712991 152 JVIMS . SBI g. who is the auditor of the company Ans. (O288)2712972 10. Standard Chartered Bank i. Punjab & Sind Bank f. 1948 49 8. what is the fax no. Deloitte Haskins & Sells 7. which are the departments available in the company Ans. which is the establishment year Ans.d. UBI 6.JAMNAGAR . PNB e. phone no of the company Ans. There are main 8 departments in the company like PPC department Production department Personnel department Finance department Sales & marketing department Quality control department Export department Design & development department 9. 24 hour. 153 JVIMS .in 12.11. 13.digjam. what is the email id of the company Ans. what is total hour acored by the company Ans.
[email protected] .co. www. what is the URL address of the company Ans.in. Blazers Trousers Sherwani Safari suiting & shirting 2. Grey combing Tow to top converting Dyeing & back washing Recombing Spinning Weaving Finishing & folding 154 JVIMS .JAMNAGAR . which are the raw materials used Ans. Greasy wool & polyester 3. how is the production process Ans. products of your company Ans.PRODUCTION DEPARTMENT 1. DIGJAM follows process layout 5. To maintain stock after considering purchase lead time. what is the waste management system Ans. ISO 9001:2009 155 JVIMS . 6. which type of technology do they use Ans. how inventory is done Ans.4. Company has a latest technological laboratory and as well as production machine. 10. For maintain the quality they test their quality in each stage of the process. 7. The total weaving capacity of the plant is 7 million meters per annum. company sale their by product and company has a etp plant for purify the waste water . 8. 9. what do they do for quality control Ans.JAMNAGAR . appoximent they keep stock 3 month Average periodical requirement of production department To maintain inventory by involving minimum funs. what is the capacity of production Ans. quality standard of the company Ans. To keep stock according to space availability. As per the requqirment and according to order they maintain inventory. which production layout does company follows Ans. 156 JVIMS .11.JAMNAGAR . how do company test their quality Ans. For maintain the quality they test their quality in each stage of the process. is to maintain a peacefull enviorment in the organization. selection are done based on requirement of different department. which are the sources of recruitment Ans. how interview is done Ans. 2. oral interview. how selection is done Ans. Telephonic interview. department wise interview. therefore company can improve worker s efficiency. And stipend are given to that worker 6. 157 JVIMS . they take person based on education and their experience 4. how is organizing done in personnel department Ans. The main function of the personnel dept. interview. 5.R. 3. medical fitness test.JAMNAGAR . how training is given to the workers apprentice training are given to the worker who are new come in their work. Internal and external sources . and final selection. H. how development is done Ands To provide a proper training to the worker and employee .PERSONNEL DEPARTMENT 1. experience. past record. how wages and salary is given to the employees Ans. Canteen facilities are available for the worker and employee at regular interval. how is performance appraisal system of the company Ans. how promotion is given to the workers Ands . Telephone facilities are available to some employee. 8. the permanent employee or worker are absent in the organization . 11.Based on experience and performance of their work promotion are given to the employee. knowledge 10. 158 JVIMS . to fill up their space or temporary work company has to appoit a person it s called BADLI . behavior. Water and sanitation facilities are available. extranet & intranet facilities. And this person regular entry done in the temporary register.7. what benefits and services are given to the employees Ans. minimum wages are given to the worker. attendance. 9. company having a performance appraisal form through which company decide some crieteria for performance appraisal. Provident fund and gratuity funds facilities. that is less absents. Internet. how transfer is given to the workers Ans. In the company.JAMNAGAR . parking area.Casual leave. 13. how many shifts are there in the company Ans. Petrol allowance to employee for office works. 12. Cable connection for T. how many hours are in one shift Ans. of their employees at rein the residences.V. There are 3 shifts 7:00AM to 3:30PM 3:30PM to12:00AM 12:00AM to7:00AM 14. Library. security guards. 8 hours & 30 minutes in one shifts and night shift have 7 hours. welfare activity. Festival advances and bonus to worker at their attendance bases. Park and garden facilities to employees in front of their residences. Training facilities are available in the unit. 515 employees & 1050workers 159 JVIMS . sick leave and privilege leave to worker and employees. Provide quarter to employees for housing to nearer to unit. Available of pollution free environment for the safety of their workers health. how many employees are working in the company Ans.JAMNAGAR . Pension fund & ESI scheme also provided by the unit. MANAGER (Shri Rajesh Sharma) WEST DY. MANAGER DY. GM (Shri Sharad Goel) SOUTH NORTH GM (Shri Amit Gupta) SR. DOMESTIC SALES VP (S&M) (Shri Ravinder Sharma) EAST SR. what is the distribution channel Ans. Company to retailer Company to direct customer. MANAGER SALES OFFICERS 160 JVIMS . Company to wholesaler 2. how is the organization in marketing department Ans.JAMNAGAR . MANAGER / ASST.MARKETING DEPARTMENT 1. 8. how transportation arrangement done Ans. By ship 2. 1. how is the company doing market research Ans. 5. through T. who are your competitors Ans. 6. By air And also company purchase their raw material from forigen country by ship which is land at nahava seva port. 4. And company transport their finished good by truck. magazine. how is the company doing their advertisement Ans. & newspaper. .JAMNAGAR . Through Research agency 161 JVIMS . Company doing their transportation in two way.V.main competitor is Raymond. 7. Yes. what is your advertisement budget Ans.3. Advertising budget of digjam is 10% of turnover of that year. Mumbai . are you dealing in global marketing Ans. 76 13.07 65.02 0. how is the management of fixed assets 162 JVIMS .12 65.07 65.00 0.09 Called Up 68.07 65.02 0.09 65.JAMNAGAR .09 3.00 0. how is the company doing their financial planning Ans.01 65.12 65.00 80.12 65.76 68.00 Issued 68.00 0.09 65.02 Paid Up 68.76 68.74 68.09 65.00 Forfeited 0.74 68.76 68.76 68.12 65.02 65.76 13.07 Less : Calls in Arrears 0. Year 2009 2008 2007 2006 2005 2004 2002 2001 Authorized 80.09 65. planning is done 2.76 68.00 0. Undertakes both the term of planning.02 0.12 Subscribed 68.76 68.00 80.00 80.02 65.09 65.02 0.76 13.74 13.FINANCE DEPARTMENT 1.01 65.09 80.09 65.00 0. Short term for current assets and long term planning is done for fixed assets.00 80.00 0.00 2000 65.00 0.00 80. what is the capital structure of the company Ans. DIGJAM Ltd.03 65.07 65.07 0.00 80.00 80.02 0.00 0.02 0.02 0. Received management 163 JVIMS . are to be managed by DIGJAM 1.JAMNAGAR . 5. Inventory management 2. Following are the fixed assets of DIGJAM Ltd. In DIGJAM Ltd. Cash management 3.Ans. what is the capital budgeting of the company Ans.. DIGJAM using pay back period method for evaluating the investment proposals. 4. They have also maintained depreciation fund on its fixed assets to purchase new assets in future. assets are being depreciated on the basis of the straight line method. There are mainly three components of working capital. how is the management of working capital Ans.