SUMMER TRAINING REPORT ON

“Financial Statement Analysis”

SUBMITTED TO

IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE DEGREE OF
BACHELOR OF BUSSINESS ADMINISTRATION

UNDER THE GUIDENCE OF: SUBMITTED BY:

MS. SUCHITRA YADAV RICHA
Assistant Professor Roll no: 1222018
MMIM, MM(DU) BBA 5Th

MAHARISHI MARKANDESHWAR INSTITUTE OF MANAGEMENT

i
 PREFACE

As a part of the BBA Curriculum in order to gain practical knowledge in the field of
management, I required to make a report on "Financial Statement Analysis”. The Basic
Objective behind doing this project report is to get knowledge of different tools of Financial
Statement.

In this project report I have included various concepts, effects implications regarding the
respondent’s attitude towards financial and recruitment strategies.

Doing this Project report helped me to enhance my knowledge regarding the work in to the
attitude a consumer towards celebrity advertisement Vs non celebrity doing undergo many
experiences related with my topic concepts. 'Through this report I meant to know about
importance a team work and role of devotion towards the work.

ii
CERTIFICATE

iv
 ACKNOWLEDGMENT

I am Richa, a student pursuing BBA in Maharishi Markandeshwar University, Mullana,

Ambala, would like to express my heartfelt gratitude to, for providing me with the opportunity
to work for the project titled " Financial Statement Analysis”.

First and foremost, I extend my sincere thanks to Mr. Vikash Shahi, my mentor and guide at the
SHINJIRU ENGEINEERING PVT. LTD, for his invaluable support, guidance, and
encouragement throughout my internship period. His expertise, patience, and insightful feedback
have been instrumental in shaping my learning experience and enhancing my understanding of
the industry.

I extend my appreciation to the faculty, college mentor Ms. Suchitra Yadav and staff at MMDU
who have been a constant source of inspiration and knowledge throughout my academic journey.
Their teachings and guidance have laid the foundation for my internship experience and the
preparation of this report.

In conclusion, this internship has been a transformative experience, and I am grateful for the
guidance, knowledge, and opportunities I have received. This report stands as a testament to
the collective efforts of all those who have contributed to my growth and learning.

Date- ……...………………………

Place- …………M…M
…I…
M…………....

Signature ……...…………………

v
 DECLARATION

I am Richa student of BBA belongs to Maharishi Markandeshwar Institute Of

Management, MM(DU) declare that this Project Report Dissertation entitled A PROJECT
REPORT " to SHINJIRU ENGEINEERING PVT. LTD..” is the result of project /
dissertation work done by me under the supervision of Ms. Suchitra Yadav at MMIM,
MAHARISHI MARKANDESHWAR (DEEMED TO BE UNIVERSITY). I am submitting
this
Project Report / Dissertation in partial fulfilment of the requirements for the award of the degree
of BACHELORS OF BUSINESS ADMINISTRATION from MAHARISHI
MARKANDESHWAR (DEEMED TO BE UNIVERSITY) MULLANA, AMBALA
during the academic year 2022-2025. I further declare that this project / dissertation report or
any part of it has not been submitted for award of any other Degree / Diploma of this University
or any other University/ Institution.

Date- ……...………………………….
M…M…I M
Place- …………… ……………....
Signature ……...……………………

vi
 EXECUTIVE SUMMARY

Shinjiru Engineering India Private Limited is a Private company incorporated on 22 June 2021.
It is classified as Non-government company and is registered at Registrar of Companies, Delhi. Its
authorized share capital is Rs. 100,000 and its paid up capital is Rs. 100,000. It's NIC code is 291
(which is part of its CIN). As per the NIC code, it is inolved in Manufacture of general purpose
machinery.

Shinjiru Engineering India's Annual General Meeting (AGM) was last held on N/A and as per
records from Ministry of Corporate Affairs (MCA), its balance sheet was last filed on 31 March
2023.

Directors of Shinjiru Engineering India are VIKASH KUMAR, PRAVEEN SHAHI, MANISHA
BHARTI, POOJA KUMARI, ATUL GUPTA, SUSHANT KUMAR and RAVINDRA NATH
VERMA.

Shinjiru Engineering India's Corporate Identification Number (CIN) is U29100HR2021PTC09

5741 and its registration number is 95741. Users may contact Shinjiru Engineering India on its
Email address - [email protected]. Registered address of Shinjiru
Engineering India is 3rd Floor, Flat No.302, Plot No. 2977A Gali No. 149, Laxman Vihar,
Phase-2 , GURGAON, Haryana, India - 122001.

All companies in India are required to file various documents like financials, loan
agreements, list of shareholders, details of directors, details of funding rounds and a lot
more. These documents are credible and offer incredible insights about a company.
However, understanding a company by viewing its documents is an extremely difficult
and time consuming process.
Our reports are designed to save you significant time by surfacing key information easily
and structuring it in a way that helps in your research.
You will be able to access all documents filed by Shinjiru Engineering India in a way
that was never possible before.

vii
 INDEX OF CONTANT

SR. CHAPTER PAGE NO.

NO.
1. INTRODUCTION TO THE TOPIC 01-19

2. COMPANY PROFILE 20-21

3. LITERATURE REVIEW 22-23

4. RESEARCH AND METHODOLOGY 24-27

5. ANALYSIS AND FINDINGS 28-37

6. CONCLUSION 38-40

7. SUGGESTIONS & 41-42

RECOMMENDATIONS
8. QUESTIONNAIRE 43

9. BIBLOGRAPHY 44

vii
CHAPTER – I

INTRODUCTION
TO
TOPIC
 INTRODUCTION OF THE TOPIC

A financial statement is a formal record of a business's financial activities, detailing its financial
performance and position over a specified period. It typically includes the balance sheet,
income statement, and cash flow statement. The balance sheet shows assets, liabilities, and
equity at a specific point in time, reflecting the company’s net worth. The income statement
reports revenues, expenses, and profits, indicating profitability. The cash flowstatement
tracks cash inflows and outflows, highlighting liquidity and operational efficiency.

INTRODUCTION

A financial statement is a crucial document that provides a structured summary of a company’s

financial activities and status over a specific period. Comprised of three main reports— the
balance sheet, income statement, and cash flow statement—it offers a comprehensive view of
the organization’s financial health, performance, and cash management.

The balance sheet, also known as the statement of financial position, lists assets, liabilities, and
shareholder equity at a particular date, revealing what the company owns versus what it owes.
The income statement, often called the profit and loss statement,
displays revenue, expenses, and net income or loss, illustrating the company’s
profitability. Meanwhile, the cash flow statement tracks the flow of cash in and out of
the business, segmented into operating, investing, and financing activities, and
highlights liquidity and cash reserves.

Together, these statements allow stakeholders—such as investors, creditors,

and management—to assess the company’s financial performance, profitability, stability,and
potential for growth. By analyzing these statements, stakeholders can make more
informed decisions on financial statements, lending, or strategic planning, ensuring that
resources are allocated effectively and any potential risks are identified and managed. Financial
statements, therefore, are essential for transparency, accountability.

1
WHAT IS FINANCIAL STATEMENT ANALYSIS ?
Financial statement analysis is the process of evaluating a company’s financial statements to
gain insights into its performance, financial health, and potential for growth. This analysis
involves reviewing and interpreting key financial documents—the balance sheet, income
statement, and cash flow statement—to understand profitability, liquidity, efficiency, and
solvency.

Analysts use various tools and ratios, such as the debt-to-equity ratio, current ratio, and gross
profit margin, to assess the company's ability to generate profit, meet obligations, and sustain
operations. Techniques like trend analysis (observing changes over time) and comparative
analysis (benchmarking against industry peers) help highlight strengths, weaknesses, and trends
in the company’s financial standing.

Financial statement analysis is essential for stakeholders, including investors, creditors, and
management, as it provides critical information for making informed decisions. Through this
analysis, stakeholders can evaluate risk, assess growth opportunities, and plan strategies to
enhance financial stability and performance.

FINANCIAL STATEMENT - WHAT IT INVOLVES?

A financial statement involves three primary components that collectively provide a

comprehensive view of a company’s financial condition:

1. Balance Sheet : This statement shows the company's financial position at a specific
point in time by listing its assets, liabilities, and shareholders’ equity. It reflects what the

2
 company owns, owes, and the residual ownership interest.

2. Income Statement : Also known as the profit and loss statement, it summarizes the company’s
revenues, expenses, and net profit or loss over a reporting period. It reveals the company’s
profitability and operating performance.

3. Cash Flow Statement : This statement details the cash inflows and outflows from
operating, investing, and financing activities. It highlights the company's liquidity, cash
management, and ability to generate cash to support operations and growth.

ROLE OF FINANCIAL STATEMENT:

Financial statements play a vital role in providing a clear and standardized view of a company’s
financial health, performance, and cash flow management. They serve as theprimary source of
financial information for stakeholders, including investors, creditors, management, and
regulatory bodies, helping them make well-informed decisions.

The balance sheet offers insights into a company's stability and solvency by detailing assets,
liabilities, and equity, allowing stakeholders to assess its net worth and financial resilience. The
income statement, by tracking revenues and expenses, indicates profitability and operational
success, helping investors and management gauge the effectiveness of business strategies. The
cash flow statement, by summarizing cash inflows and outflows, shows the company’s liquidity,
helping assess whether it can meet short- term obligations and fund futuregrowth.

Moreover, financial statements foster transparency and accountability, as they follow

standardized accounting principles, enabling easier comparisons across different periods or
companies within an industry. They are also essential for compliance, helping businesses meet
regulatory requirements and maintain investor confidence. For management, these statements
serve as tools for planning, performance measurement, and risk assessment, guiding decision-
making and strategic direction. In summary, financial statements are essential for understanding,
evaluating, and managing a company’s financial position and future prospects.

3
 NATURE -

The nature of financial statements is rooted in their role as structured, formalized summaries
of acompany’s financial activities and status. Here are the key characteristics that define their
nature:

1. Historical Record: Financial statements primarily reflect past financial transactions And
performance over a specific period. They offer a backward-looking perspective on a
company's financial activities, enabling stakeholders to assess previous performance and
trends.

2. Quantitative and Monetary: Financial statements are based on quantitative data, presenting
information in monetary terms. This enables standardized measurement and comparison across
companies and industries.

3. Standardized and Regulated: Financial statements follow specific accounting standards (such as
GAAP or IFRS), ensuring consistency, reliability, and comparability. These standards are essential
for maintaining transparency and regulatory compliance.

4. Accuracy and Objectivity: Although based on historical data, financial statements aim for
accuracy and impartiality, using verifiable information wherever possible. This enhances trust and
credibility among users.

5. Limited Scope: Financial statements focus on quantitative financial data and may not capture
qualitative factors (like employee satisfaction or brand reputation) that can also affect a company’s
performance.

6. Decision-Support Tool: Financial statements support informed decision-making for a range of

stakeholders, helping in financial statement, lending, and strategic planning.

4
 CHARACTERISTICS

The characteristics of financial statements are fundamental in ensuring they serve their
purpose effectively for various stakeholders. Key characteristics include:

1. Relevance: Financial statements must provide information that is useful for decision-
Making . Relevant data helps stakeholders assess the company's financial performance and
future prospects.

2. Reliability: The information presented should be accurate and verifiable, enabling

Users to trust the statements. Reliability ensures that the data is free from significant
errors and bias.

3. Comparability: Financial statements should allow users to compare the financial

performance of a company over time and against industry benchmarks. This
characteristic is facilitated by adherence to consistent accounting principles.

4. Consistency: Companies should apply the same accounting policies and practicesfrom
one period to another , enhancing the comparability of financial information across
reporting periods.

5. Understandability: Financial statements should be presented clearly and concisely,

allowing users, even those without extensive financial expertise, to
comprehend the information.

6. Timeliness: Information should be reported promptly to ensure it is relevant for

decision-making. Delayed financial data can lose its usefulness.

Together, these characteristics enhance the utility of financial statements, making them
Critical tools for stakeholders, including investors , creditors, and management, in
evaluating a company’s financial health and performance.

5
 HISTORY OF FINANCIAL STATEMENT

The history of financial statements can be traced back to ancient civilizations, where basic
record-keeping practices began to take shape. The earliest forms of accounting can be seen
in Mesopotamia around 3500 BC, where clay tablets were used
to record transactions involving commodities. However, the concept of formal financial
statements as we know them today started to evolve in the late 15th century.

The introduction of double-entry bookkeeping by Italian mathematician Luca Pacioliin

1494 marked a significant advancement. Pacioli’s work laid the foundation for modern
accounting practices, emphasizing the importance of maintaining balance inaccounting
records. As commerce expanded during the Renaissance, the need for standardized
financial reporting became more critical.

By the 19th century, as businesses grew in complexity and size, formal financial statements
emerged. In response to increasing investor demands for transparency, companies began
publishing income statements and balance sheets. The Industrial Revolution further
accelerated this trend, necessitating more sophisticated accountingpractices.

The establishment of accounting standards began in the early 20th century, leading
to the formation of professional organizations like the American Institute of Accountants in
1887, which eventually became the American Institute of Certified Public Accountants
(AICPA).

The introduction of Generally Accepted Accounting Principles (GAAP) and

InternationalFinancial Reporting Standards (IFRS) in the late 20th century
standardized financial reporting practices globally, ensuring consistency and
comparability across different entities. Today, financial statements remain essential for
evaluating a company’s
6
 performance, supporting financial statement decisions, and promoting accountability in
thebusiness world.

Conclusion
Today, financial statements—comprising the balance sheet, income statement, and
cash flow statement—are crucial tools for stakeholders. They facilitate informed decision
making and foster transparency and accountability in financial reporting, reflecting the
ongoing evolution of accounting practices in response to the needs of the global economy.

Limitation of Financial Statement

Following are the limitations of financial statements:

1. The information being of historical nature does not reflect the future.
2. It is the outcome of accounting concept, convention combined with personal
judgement
3. The statement portrays the position in monetary term. The profit or loss position excludes
from their purview things which cannot be expressed or recorded in term ofmoney.
As the information provided in the financial statements is not an end in itself as no meaningful
conclusions can be drawn from these statements alone. However, the information provided in
the financial statements is of immense use in making decisions through analysis and
interpretation of financial statements. To overcome from the limitations it becomes necessary
to analyse the financial statements. The analytical toolsgenerally available to an analyst for
this purpose are:

• Comparative financial and operating Statements.

• Common-size statement
• Trend ration and trend analysis Average
• Analysis Change
• Change in working capital
• Fund-flow and cost-flow analysis
• Ratio analysis.

7
 Preparation of Financial Statements

Let us now see the contents of financial statements and the methodology of constructing them.

Financial Statements
Financial statements consist of Revenue Account and Balance Sheet. Revenue Account refers to Profit
and Loss Account or Income and Expenditure Account or simply Income Statement. Revenue Account
may be split up or divided into „Manufacturing Account‟, „Trading Account‟,
„Profit and Loss Account‟ and „Profit and Loss Appropriation Account‟, Revenue Account isprepared
for a period, covering one year.

Objects of preparing Revenue Accounts

Manufacturing Account is prepared to find out the total „Cost of Goods Manufactured‟ in the period.
It will also reveal the cost of material consumed, labour and other manufacturing expenses or costs.
Trading Account is prepared to ascertain the trading result i.e. gross profit or gross loss made on sale
of goods. Profit and Loss Account is prepared covering the same period to ascertain the net profit or
net loss during the year under review, from the usual business. Profit and Loss Appropriation Account
is prepared wherein all other items of expenses and appropriations are reflected to reveal thenet profit
or net loss. Generally this includes items related to earlier years or charge of interest or salary payable
to proprietor or partners. Sole proprietary concerns, partnership firms and companies prepare the above
mentioned accounts.In case of companies, the Revenue Account i.e. profit and loss account is to be
prepared taking note of the requirements of Schedule VI Part II to the CompaniesAct refers to profit
and loss account only.

Manufacturing Account
A manufacturing concern may prepare the Manufacturing Account and Trading Account is prepared
separately. But in small manufacturing concerns, only one combined account known as Manufacturing
and Trading Account may be prepared. The distinction between a Trading Account and a
Manufacturing Account is that a Manufacturing Account deals only with all costs and expenses of
manufacture. Trading Account deals only with finished goods and expenses relating to them showing
the cost of manufacture. Finished goods are those goods which are ready for sale. Such goods may be
manufactured in the concern or may be purchased from outside. The cost of goods manufactured as
shown by the 22 Manufacturing Account, is transferred to the Trading Account. The purpose of
preparing the Manufacturing Account, as already mentioned, is to ascertain the cost of goods
manufactured. It should therefore include all the expenses relating to manufacture of goods,
i.e. purchase of raw materials, expenses such as carriage, freight etc. and all others expenses incurred
to convert raw materials into finished goods. To give a clear idea the elements of cost are enumerated
under various heads like prime cost, factory cost etc. Manufacturing or Production A/c is prepared to
describe the various elements of cost in creating the finished goods.

8
Cost Elements:
There are three major elements of production cost viz. a) Direct materials, b) Direct labour, and
c) Factory overheads direct material and direct labour constitute direct cost„ and the latter
constitutes indirect cost.
a) Direct Materials: It refers to such materials which are incorporated into the physical unitsof
product manufactured. It is readily and definitely ascertainable.

b) Direct Labour: It refers to the labour performed in physical contact with the product. It is the
amount of wages paid to the workers who are engaged in converting raw materials into finishedgoods.
It can be easily ascertained.

c) Factory or Production overhead: It is not easily assignable to a particular product. It is an indirect

cost and includes: i) Indirect labour (foremen, Works manager, Storekeeper etc.) ii) Indirect
materials (factory supplies) iii) Depreciation of factory Building, Plant and machinery.
iv) Amortization of parents. v) on building, machinery and materials etc. vi) Maintenance of
factory, and vii) Water, heat, light and parts used in factory.

Important point regarding Manufacturing Account:

a. Stocks: The distinguishing feature of a manufacturing concern is the type of stock held. A
trading concern holds only stock of finished goods. A manufacturing concern holds stock of
materials, semi finished or work in process as well as finished goods. Financial Statements.

b. Direct Material Consumed: Introduction to Financial Accounting and Financial Statements

It is customary to show in the Manufacturing A/c the value of raw materials consumed for
manufacturing goods during a particular period. It is computed as follows:

Rs.

Opening stock of Raw Materials XX

Add: Purchase of raw materials X

Add: Carriage of freight inwards X
Less: Rejected on returned materials X
Less: Closing stock of raw materials X
X
X
X
X
XX

c. Work in Process: This represents materials put in process which is not completely
converted in Finished Goods. Opening and closing works in process are shown in the
Manufacturing A/c on Debit side and Credit side respectively.
9
d. Sale of Scrap:
In manufacturing operations there may be certain scrap which may or may not have a sale
value. In order to find out correct cost of manufacturing the goods it is necessary to credit
manufacturing A/c by the amount of scrap.

e. Factory Expenses: These expenses include for processing or manufacturing goods i.e.
converting raw materials into finished goods. These include expenses like (1) Power andFuel,
(2) Rent, Rates, Taxes, , Repairs and Depreciation on assets used for manufacture,
(3) Factory Stores and Spares, (4) Factory Supervision.

f. Balance Sheet
Balance Sheet defined It is not possible to define the whole Balance Sheet except in vague
terms. The definition of the balance sheet given by the American Institute Certified Public
Accountants is as follows: Balance Sheet is a list of balances in the asset, liability or net worth
accounts. This definition is accurate but not meaningful. Accounting Standards Board, India
has defined balance Sheet as a statement of the financial position of an enterprise as at agiven
date which exhibits its assets, liabilities, capital, reserves and other account balances at their
respective book values.

A more meaningful definition of balance Sheet will be as under: Balance Sheet shows
the sources from which funds currently used to operate the business have been obtained (i.e.
liabilities and owners equity) and the types of property and property rights, in which these
funds are currently locked up (i.e. assets). Balance Sheet may be considered as a summarised
sheet of balances remaining in the books of account, after the preparation of the profit and
Loss Account. Thus a Balance Sheet can be rightly calledas a statement of position as it now
contains assets and liabilities generally. It is a document of the financial position of an
enterprise, as it indicates what the business owns and what it owes on a particular date. The
things that the business owns are calledAssets and the various sums of money that it owes are
called liabilities (including that of the owners). The term Balance Sheet comes from the fact
that the total assets must be equal to total liabilities, they balance each other. The liabilities
side shows the various sources from which money made available for the assets, and the assets
side shows the way those funds are employed in the business. While preparing final accounts,
all nominal accounts from the trial Balance are closed by transferring them to Trading
andProfit and Loss Account. The other account balances, not transferred to RevenueAccounts,
will be either personal or real accounts a collection of all these balances is known as a Balance
Sheet. So, we can rightly term the Balance sheet asa sheet of balances. As we have seen earlier,
a balance Sheet is so called because its two aides mustalways balance, i.e., the assetsmust be
equal The Liabilities plus owner‟s funds. This can be expressed in the formof an equation.
Assets = Liabilities + Net Capital A = L + NC (Capital + Reserves – Fictitious Assets). The
entire balance sheet rests on the above equation. Thus, the above equation is called the Balance
Sheet Equation or Accounting Equations.

10
The Balance Sheet is given various titles as follows:

• General Balance Sheet.

• Statement of Financial position.
• Statement of Financial Condition.
• Statement of Asset and Liabilities.
• Statement of Resources and Liabilities.
• Statement of Availability of Resources and their application.
• Statement of Assets, Liabilities and Capital.
• Statement of worth.
• Statement of Net worth.
• Financial statement, etc.

Thus, Balance Sheet may be rightly called as the Statement of Assets and Liabilities
that shows the financial position of a business enterprise on a particular date. All items
appearing in Balance Sheet are either capital receipts or capital payments or personal accounts
and balance of undistributed profits. Why Balance Sheet? Balance sheet is a statement of assets
and liabilities. Are business transaction are recorded in the books of accounts under the double
entry system recording both the credit and debit aspects of each and every business transaction.
The total of all debits must be equal to

11
 the total of all credit and therefore, the resulting balance also must be agreed. This can also
be explained thus: since the liabilities side (left hand side) on the balance sheet shows the
sources of fund and the assets side (right hand side) show the employment offunds the total
assets must be equal to total liabilities.

Function of the Balance Sheets:

The three important functions performed by balance sheet are:
i. It gives the summery of the firm‟s assets and liabilities.
ii. It is a measure of the firm liquidity.
iii. It is measure of the firm‟s solvency.

Format of Balance Sheets: A balance sheet may be presented in various forms.

They are:
a. Conventional format
b. Vertical format
c. Step format.

1. Conventional Format : The conventional from or the customary form of balance sheets
is also called horizontal form or account form or T form of the balance sheets. It shows the
assets i.e. debit balance on the right and side and liabilities i.e. the creditbalances and
owners equity on the left hand side. But in countries like the U.S. and Canada, the assets
(debit items) are shown on the left hand side and liabilities (credititems) on the right hand
side of the balance sheet. This method of presenting the balance sheet is also known
asbalance array form.
Arrangement of assets and liabilities: In the horizontal form of balance sheet presentation,
the assets are shown either in order of liquidity or in order of permanence. The arrangement
in order of liquidity shows the order in which the assets could be realized to satisfy business
liabilities and the liabilities in the order of earliest, relative maturity or discharge. The order
of liquidity is adopted by concern whose operations are mostly cash like banking
companies, financial statement and finance companies, etc. Theorder of permanency of
assets and liabilities.

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 MISSION/VISION

MISSION
The mission of financial statements is to provide accurate, relevant, and timely financial information
that enables stakeholders—such as investors, creditors, management, and regulatory agencies—to
make informed decisions. Financial statements aim to enhance transparency and accountability in
business operations by offering a clear and structured viewof a company's financial health,
performance, and cash flow management. They serve as a critical tool for evaluating profitability,
assessing risks, and guiding strategic planning, ensuring that all stakeholders have access to essential
data necessary for evaluating a
company’s viability and potential for growth.

VISION
The vision of financial statements is to be recognized as the standard reference for financial
communication, promoting integrity and trust in the financial markets. This vision encompasses
the goal of evolving continuously to meet the changing needs of stakeholders, adopting
advancements in technology, and aligning with global best practices. By providing clear and
comparable financial information, financial statements aim to facilitate sustainablebusiness
practices and foster a deeper understanding of economic activities. Ultimately, the vision seeks to
enhance the role of financial statements as indispensable tools for supportingsound financial
statement decisions and effective corporate governance in a dynamic and interconnected world.

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 Relationship between Constituents Of Financial Statements

The three financial statements are inter-related; they present a comprehensive financial picture
only when read together in entirety. The income statement describes how the assets and liabilities
were used in the stated accounting period? The cash flow statement explains cash inflows and
outflows, and it will ultimately reveal the amount of cash the company has on hand, which is also
reported in the balance sheet.

Balance Sheet

Balance Sheet is directly related to the income statement and cash flow statement as a balance sheet
at the end of an accounting period relies for information on these statements and balances at the
beginning of the accounting period. The net profit (or loss) reported
in the profit and loss statement helps in determining the increase (or decrease) in equity of the
company. The profit and loss statement, together with the cash flow statement determine
the trade receivables and trade payables reflected in the balance sheet at the end of an accounting

14
period. A balance sheet also consists of the change in composition of balances arising frominter
balance sheet transactions like purchase of fixed assets, receipt of bank loan, issue ofequity.

Income Statement

Profit and Loss Statement is also directly linked to balance sheet and cash flow statement.The
increase or decrease in net assets of an entity arising from the profit or loss reported in the
income statement is incorporated in the balances reported in the balance sheet at the end of the
period. Net profit or loss during the year is also presented in the Balance Sheet under
Shareholders' equity.

The profit and loss recognised in income statement is included in the cash flow
statement under the segment of cash flows from operation after adjustment of
non-cash transactions.

Cash Flow Statement

Cash Flow Statement is primarily linked to balance sheet as it explains the effects of change in
cash and cash equivalents balance at the beginning and end of the reporting period in terms of
the cash flow impact of changes in the components of balance sheetincluding assets, liabilities
and equity reserves.

Cash flow statement therefore reflects the increase or decrease in cash flow arising from:
• Change in share capital reserves arising from share capital issues and redemption;
• Change in retained earnings as a result of net profit or loss recognised in the profitand
loss statement (after adjusting non-cash items) and dividend payments;
• Change in long term loans due to receipt or repayment of loans;
• Working capital changes as reflected in the increase or decrease in net current assets
recognised in the balance sheet;
• Change in non-current assets due to receipts and payments upon the acquisitions and
disposals of assets.

Let we look at few examples, how the financial statements are interconnected:

1. An entity engaged in automobile manufacturing sold 40 units at the rate of INR 10,00,000
on credit, so it will record a total sales of INR 40.00 crore. This transaction would result
in increase in sales (an income, a profit and loss account item) and corresponding increase
in debtors (an asset; a balance sheet item). Now,the entity receives part payment for 35
units. So it will record it as reduction in debtors (an asset; a balance sheet item) and
increase in cash (another asset; a balance sheet item). Now, suppose the debtors for
balance 5 units i.e. INR 50,00,000 turn out to be bad debts. Thiswould result in a decrease
in asset (debtors) and increase in an expense (bad debts), this in turn will decrease the
profits and thereby net worth (liability).

2. Now assume that the company has borrowed 1NR 10 crore on January 1, 2013 and
INR5 crore on March 1, 2013 both at 12% per annum interest rate, with interest

15
 payable on last date of every 3 months. So first interest payable date for first loan is
March 31, 2013 and for second loan it is May 31, 2013. Now on March 31, 2013, the
entity will record interest on first loan as reduction in cash and increase in expense. For
the second loan interest is accrued but is not due, this would result in accrual entry on
March 31, 2013. One month interest will be recorded as interest expenses and an
increase in liability as accrued interest.

Structure Of Financial Statements

(I) Balance Sheet (Format as per Revised Schedule VI of the Companies Act, 1956).
(II) Name of the Company - XYZ Ltd
(III) Balance Sheet as at March 31, 2012.

16
17
Generally assets are listed in increasing order of their liquidity or case of conversion intocash,
while liabilities are listed based on reducing duration of the liability. For example, fixed
assets are listed first while inventory (which is relatively more liquid) is listed later. Similarly
on the liabilities side, long-term liabilities are listed above short term liabilitieslike creditors.

Corporate Financial Statements

Introduction

Section 129(1) of the Companies Act, 2013 provides that the financial
statement shall give a true and fair view of the state of affairs of the company
or companies, (ii) comply with the accounting standards notified under S.
133, (iii) shall be in the form or forms as may be provided for different class
or classes of companies in Schedule III and (iv) the items contained in such
financial statements shall be in accordance with the accounting standards.

However, the aforesaid provisions of S. 129(1) shall not apply to any or

banking company or any company engaged in the generation or supply of
electricity, or to any other class of company for which form of financial
statement has been specified in or under the Act governing such class of
company.

Section 129(2) provides that at every general meeting of a company, the

Board of Directors of the Company shall lay before such meeting financial
statements for the financial year.

Fixed assets comprise a significant portion of the total assets of the

business. Therefore, their presentation in the financial statements is
important. The fixed assets also play an important role in the determination
of profit and depicting the financial position of the business.Tangible assets
are subjected to depreciation and Intangible assets are amortized. In this
unit, features and importance of corporate financial statements, vertical
formats of balance sheet and statement of profit and loss, and concept of
depreciation and amortization are discussed.

Types of Corporate Financial Statements

There are the following four primary corporate financial statements:

• Balance Sheet

18
 • Statement of Profit & Loss

• Cash Flow Statement

• Statement of Changes in Equity

Features of Corporate Financial Statements

The need and demand for accounting information by various users such as investors,
lenders, Government bodies, Tax authorities, creditors, etc., creates fundamental
qualitative characteristics that are desirable in accounting information provided through
corporate financial statements.

The following are the features or qualitative characteristics of corporate financial statements
that should be adhered to by the company at the time of preparing them

• . Understandability

• Materiality or relevance

• Reliability or Faithful representation

• Comparability

• Full Disclosure or Completeness

• Prudence • Standardized Format

• Timeliness

• General Acceptability

• Consistency

• Compliance

• Substance over form

• Verifiability

• Neutrality

19
CHAPTER – II
COMPANY
PROFILE

20
 INTRODUCTION TO COMPANY
ORIGIN OF SEIP:
Shinjiru Engineering India Private Limited is a Private company incorporated on 22 June 2021.
It is classified as Non-government company and is registered at Registrar of Companies, Delhi. Its
authorized share capital is Rs. 100,000 and its paid up capital is Rs. 100,000. It's NIC code is 291
(which is part of its CIN). As per the NIC code, it is inolved in Manufacture of general purpose
machinery.

Shinjiru Engineering India's Annual General Meeting (AGM) was last held on N/A and as per
records from Ministry of Corporate Affairs (MCA), its balance sheet was last filed on 31 March 2023.

WHERE SEIP STAND IN THE MARKET?

Shinjiru is a highly innovative engineering company that designs, develops and manufactures
installations for the treatment and painting of surfaces for the industrial sector. The department is
made up of engineers and technicians with consolidated experience and knowledge in industrial
paint lines and booths.

Shinjiru is one of the Indian company in the sector that since its inception offers a total integration
of different technologies in all its projects: mechanical engineering, electrical engineering, automation
engineering and communications

SERVICES PROVIDED :
Solution for the management of industrial gas emission waste air conditioning and ventilation.

Air Treatment Efficiency

We help you reduce the environmental impact of industrial processes by offering cutting-edge, energy-
efficient solutions tailored for auto, pharma, printing and packaging.

Auxiliar Automotive

We are experts in adsorption-based air filtration systems that use activated carbon to keep Volatile
Organic Compounds (VOCs) and odors out of air streams carrying solvents from cleaning, painting and
coating processes.

Automotive

We design, build and install Thermal Oxidation Systems (TOS) for emissions treatment in paint
installations such as liquid paint booths, flash off rooms, paint kitchens, curing ovens and others.

Air & Space

We offer end-to-end Air Handling Units (AHU), ventilation and conditioning systems for clean rooms.

Packaging
We provide turn-key emission treatment solutions for processes such as film lamination with adhesives,
flexible packaging printing, food packaging manufacturing and others.

21
CHAPTER- III

LITERATURE
REVIEW

22
LITERATURE REVIEW

The literature on financial statement analysis provides critical insights into its role in evaluating a
company's financial health, performance, and potential risks. Financial statements, primarily
consisting of the balance sheet, income statement, and cash flow statement, are essential tools for
various stakeholders, including investors, creditors, and management, to make informed economic
decisions.

Research highlights that financial statement analysis aids in understanding a company's

liquidity, profitability, and solvency, thereby enabling comparative assessments both
across periods and against industry benchmarks. Ratio analysis, trend analysis, and horizontaland
vertical analyses are commonly used methodologies in examining financial statements.
Studies suggest that ratio analysis, including metrics like current ratio, debt-to-equity ratio, and
return on assets, allows stakeholders to gauge operational efficiency and financial stability.

Furthermore, academic discussions emphasize the significance of transparency and qualityof

financial reporting in reducing information asymmetry, particularly in capital
markets. Transparent financial statements increase investor confidence and lower the cost of
capital.
However, research also identifies limitations in financial statement analysis, especiallydue
to differences in accounting standards (e.g., IFRS vs. GAAP) and the potential for
earnings management practices, which can obscure true financial performance.

Overall, financial statement analysis remains indispensable in financial decision-making,

though evolving accounting regulations and advances in data analytics continue to
influence its application and effectiveness in capturing a company’s economic reality.

23
CHAPTER-IV

RESEARCH
METHDOLOGY

24
 RESEARCH METHODOLOGY-
The research methodology serves as the blueprint for the systematic and structured approach
employed to investigate a research question or problem. It outlines the methods, techniques,
data sources, and procedures that will be utilized to collect, analyze, and interpret data,
providing the framework for the study's design and execution. This section offers a clear and
organized plan for conducting the research, ensuring its validity, reliability, and the ability to
draw meaningful conclusions.
Methodology is a systematic way of solving a problem. It includes the research methods for
solving the problem.

Statement of problem
There are a number of advantages to prepare financial statement in accounting which leaves
businesses decided on to use them.

Hypothesis
The positives of a financial statement analysis clearly out number the drawbacks. Despite the
fact that many foreign rules have been developed, developing a single unified law on
documentary credits has proven problematic due to the complexities of any business.

Objectives Of Research
• To read more about financial statement and their meaning in accounting

• To weigh the benefits and drawbacks of using a financial statement

• To compare the benefits and drawbacks of a financial statement in order to

comment on its reliability.

• To analyses the legal position of financial statement in various countries.

Methodology of the study

The methodology of the study is as follows:

Scope of study
The study is conducted among the topic of financial statement analysis.

25
Nature of the study
The study adopted is analytical

Nature of data
The study requires both primary and secondary data.

Source of the study

The primary data have been collected by using questionnaires as a tool. It helps in collection of
primary data in a simple and understandable manner so as to fulfill the prime and other
objectives of the study and secondary data is collected from books, articles, internet and other
works of similar nature.

Method of sampling
Data is collected through Google forms. Response collected from firm employee.

Sample unit
The study is conducted among the firm employee of T-RMC PRIVIATE LIMITED.

SAMPLING TECHNIQUE
Stratified sampling is used to collect data in such a way that 20 Respondents from the main
office are included in the sample.

Tools For Analysis

Data is analyzed using some statistical tools for interpreting the raw data. These tools will make
raw data into processed data. The analysis is done based on data collected from therespondents
by using percentage analysis. Tables and graphs are used for presenting analysis.

Limitation of the study

The research is restricted to aspects of Accounts & Finance, particularly financial

26
statement. This research was conducted in T-RMC PRIVIATE LIMITED. The number of
participants was limited to 50 for the collection of data.

SCOPE OF THE STUDY:-

The result of this research would help the company to have a better understanding aboutthe
client’s perception towards ready mix concrete offered by T-RMC.

The study helps the SHINJIRU ENGEINEERING PVT. LTD. to focus the client’s preferences
and expectationsonthe product which they offer.

27
CHAPTER – V

ANALYSIS
&
FINDINGS

28
 DATA ANALYSIS AND INTERPRETATION

1. Age of respondent

Classification of respondents on the basis on age

Age No Of respondents Percentage

20-30 19 31.1
31-40 19 27.9
41-50 17 31.1
51-60 06 9.8
TOTAL 61 100

It reveals the classification on the basis of age. Among 61 samples 31.1% respondents arefrom
the age category of 20 -30, 27.9% respondents are from the category of 31 -40, 31.1% of
respondents are from the age category of 41 -50, 9.8% of respondents are from the age category
of 51 -60.

2. Firm employee doing financial statement analysis work very

efficiently
(Employee Review)

Particulars No of respondents Percentage

Strongly agree 31 51.7

Agree 13 21.7
Neutral 5 8.3
Disagree 1 1.7
Strongly Disagree 10 16.7
TOTAL 60 100

Strongly agree by 51.7% of the respondents, agree by 21.7% of the respondents, 8.3% ofthe
respondents are neutral, 1.7% of the respondents disagree and16.7% of the

29
respondents strongly disagree.

3. GENDER:
TABLE NO. 02
RESPONS NO. OF % OF
E RESPONDENTS RESPONDENTS
Male 58 58%

Female 42 42%

Total 100 100%

Source: Primary data Y⬛†

GENDER
MALE FEMALE

42%

58%

FIGURE NO.- 02

INTERPRETATION-
In my research on investor perceptions of financial statement analysis, I conducted a survey
with 100 respondents. The data reveals that 42 percent of the participants are female, while 58
percent are male. This gender distribution suggests that a higher percentage of males
areinvolved in financial statement analysis, which clearly defines the gender biasness, and
which could potentially impact the marketing and targeting strategies to cater to this gender-
specific trend.

30
 4. EDUCATIONAL QUALIFICATION-
TABLE N0. 2.3
RESPONSE NO. OF % OF
RESPONDENTS RESPONDENTS
Undergraduate 17 17%

Graduate 41 41%

Post Graduate 42 42%

TOTAL 100 100%

Source: Primary data Y⬛†

EDUCATIONAL QUALIFICATION
Undergraduate Graduate Post Graduate

17%

42%

41%

FIGURE NO. 2.3

INTERPRETATION-
In my research, the educational background of the participants revealed that 17% were
undergraduates, 41% were graduates, 42% were postgraduates. This suggests that the majority
of the sample holds at least a graduate degree, indicating a relatively well- educated group of
investors participating in the study.

31
5. OCCUPATION

TABLE NO. 2.4

RESPONSE NO. OF % OF
RESPONDENTS RESPONDENTS
Student 29 29%

Service 37 37%

Self-Employed 26 26%

Others 8 8%

Total 100 100%

Source: Primary data Y⬛†

OCCUPATION
Student Service Self-Employed Others

8%

29%

26%

37%

FIGURE NO. 2.4

INTERPRETATION-
The analysis reveals that the occupation of policyholders varies significantly among the sample
group. A notable 37% are engaged in service-related professions, while 29% are students, 26%
are self-employed, and 8% fall into other categories. This diversity in occupational
backgrounds suggests that financial statement analysis appeals to a broad spectrum of
individuals, potentially driven by various financial and personal needs.

32
 5. ANNUAL INCOME:
TABLE NO. 2.5

RESPONSE NO. OF % OF RESPONDENTS

RESPONDENTS
Below 1 LPC 32 32%

1 LPC - % LPC 51 51%

5 LPC – 10 11 11%
LPC
Above 10 LPC 6 6%

Total 100 100%

Source: Primary data Y⬛†

ANNUAL INCOME
Below 1 LPC 1 LPC - % LPC 5 LPC – 10 LPC Above 10 LPC

6%
11%
32%

51%

FIGURE NO- 2.5

INTERPRETATION-

The findings indicate that 37% of investors have an annual income below 1 lakh, while 51%
fall in the income range of 1 lakh to 5 lakhs. Additionally, 11% have annual incomesbetween
5 lakhs to 10 lakhs, and only 1% have an annual income exceeding 10 lakhs. These results
suggest that a significant majority of financial statement analysis in my study belong to the
middle-income group, with the majority falling within the 1 to 5 lakh incomebrackets,
demonstrating a preference for financial statement analysis

33
 6. ARE YOU SATISFIED WITH THE PRODUCTS OF SHINJIRU ENGEINEERING PVT.
LTD. ?

TABLE NO.- 2.7

RESPONS NO. OF % OF
E RESPONDENTS RESPONDENTS
Yes 88 88%

No 12 12%

TOTAL 100 100%

Source: Primary data Y†⬛
ARE YOU SATISFIED WITH THE SERVICES OF LIC OF INDIA?

Yes No

12%

88%

FIGURE NO. 2.7

INTERPRETATION-

I found that 88% of them expressed satisfaction with T-RMC materials, while 12% were
notsatisfied. This indicates a significant level of satisfaction among clients, which could be
attributed to their positive experiences and trust in the company's offerings.

34
 7. ARE YOU AWARE ABOUT ALL THE FINANCIAL
STATEMENTANALYSIS POLICY?
TABLE NO.- 3.2
RESPONS NO. OF % OF RESPONDENTS
E RESPONDENTS
Yes 65 65%
No 35 35%
TOTAL 100 100%
Source: Primary data Y⬛†
ARE YOU AWARE ABOUT ALL THE FINANCIAL STATEMENT
ANALYSISPOLICY?
Yes No

35%

65%

FIGURE NO.- 3.2

INTERPRETATION-
I found that 86% of them are aware of various financial statement policies, while 14% arenot..

35
 FINDINGS
In light of the interpretations derived from the analysis of the data, I would like to presentthe
following findings:

1. GENDER BIAS IN FINANCIAL STATEMENT ANALYSIS FINANCIAL

STATEMENT:

The data reveals a significant gender bias in financial statement analysis , with 58 percent
ofmale investors and only 42 percent of female investors. This finding highlights the needfor
financial statement to address this gender-specific trend and adapt their marketingandtargeting
strategies to cater to both genders more effectively.

2. AGE GROUP PREFERENCES:

A noteworthy finding is the strong presence in the financial statement analysis market, with
48 percent below 30 years of age and 34 percent between 31 and 40 years old. However,
there is a limited representation of aged 41 and above. This indicates an opportunity for concrete
materials to tailor their products and marketingstrategies to appeal to older age groups.

3. EDUCATIONAL BACKGROUND:

The data shows that the majority of the sample holds at least a graduate degree, with 42
percent being postgraduates..

4. OCCUPATIONAL DIVERSITY:

The diversity in occupational backgrounds among analyser, with a notable 37 percent engaged
in product-related , suggests that financial statement analysis appeals to a broad spectrum of
individuals, driven by various financial and personal needs.

5. INCOME GROUP PREFERENCES:

The majority of financial statement analysis in the study belong to the middle-income group,
with 51 percent falling within the 1 to 5 lakh income brackets.

36
6. SATISFACTION WITH T-RMC Products:

The majority of investors (88 percent) expressed satisfaction with T-RMC Products, indicating
positive experiences and trust in the company's offerings.

7. AWARENESS OF FINANCIAL STATEMENT:

A significant level of awareness (86 percent) among investors about various policies suggests
that a substantial majority of investors are knowledgeable about different financial statement
analysis option.

37
CHAPTER- VI

CONCLUSION

38
 CONCLUSION
In conclusion, based on the comprehensive analysis of the data pertaining to the perceptions
in the realm of financial statement analysis, I find that there are several key insights that can
significantly shape the future of the industry.

First and foremost, it is evident that gender bias exists in financial statement analysis financial
statement, witha higher percentage of male investors. To address this disparity,it is imperative
for companies to adopt gender-inclusive marketing strategies that cater to the unique needs of
both male and female investors. This not only promotes inclusivity but also unlocks a vast
untapped market. Furthermore, there is a clear trend towards younger investors, with limited
representation from older age groups. To harness the potential ofthe older demographic,
companies should create products and messaging that resonate with individuals aged 41 and
above, emphasizing the role of financial statementanalysis in retirement planning and legacy
protection.

Diversification in financial statement options is essential, given that investors value both
short- term gains and long-term security. Offering a spectrum of financial statement choices
within financial statement analysis products allows investors to align their financial statements
with their specific financial goals and risk tolerance. The well- educated profile of the sample
suggests a need for educational campaigns to inform potential investors about the intricacies
and benefits of financial statement analysis. These campaigns should aim to demystify the
landscape, empowering investors to makeinformed decisions.

The preference of middle-income groups for financial statement analysis as an financial

statement avenue indicates the necessity of income-based product customization. Tailored
packages with flexible premium options can make financial statement analysis more accessible
and attractive to this demographic. Trust and brand reputation play pivotal roles in shaping
financial statement choices, necessitating companies to maintain excellent customer service,
transparent communication, and efficient claims processing. Additionally, the preference for
policies with guaranteed returns suggests an opportunity for companies to introduce more such
products, highlighting their safety and financial security features.

Digital outreach is crucial, as a substantial portion of investors rely on online sources for
information. A robust online presence, informative content, and user-friendly online policy
purchase options can be instrumental in attracting tech-savvy investors. Encouraging regular
policy reviews and providing transparent fee structures can help investors stay engaged and
confident in their financial statements. Highlighting tax

39
benefits associated with financial statement analysis is another powerful incentive for potential
investors.

Finally, the development of innovative financial statement analysis products that align with
investor expectations for safety, capital growth, high returns, and tax benefits is essential for
the industry's continued growth and relevance.

40
CHAPTER – VII

SUGGESTIONS
&

41
 SUGGESTIONS AND RECOMMENDATIONS

Examine Revenue Growth

Analyze Profit Margins
Assess Liquidity Ratios
Evaluate Solvency with Debt Ratios
Check Return on Assets (ROA) and Return on Equity (ROE)
Analyze Cash Flow Statements
Assess Asset Turnover Ratios
Examine Expense Trends
Review Earnings Per Share (EPS) and Price-to-Earnings (P/E) Ratio
Look at Non-Recurring Items and Adjustment.

42
 QUESTIONNAIRE

“A Study On Comparative Analysis Of Various Schemes Of Mutual Fund”

Dear Respondent,
This questionnaire is aimed at understanding your perception about Life Insurance
Corporation of India .Your response will be dealt with strict confidentiality and it will
be used only for academic purpose. Thank you for spending your valuable time to fill
this questionnaire.
Name:
Gender

1. Age Group-
a) Below 30
b) 31 – 40 years
c) 41 – 50 years
d) 51 – 60 years e) 60 years and above
2. Total number of policies bought-
a) One
b) Two
c) More than two
3. Educational Qualification-
a) Undergraduate
b) Graduate
c) Post Graduate
d) Doctorate
4. Occupation-
a) Student
b) Service
c) Self Employed
d) Others
5. Annual Income:-
a) Below 1 Lac
b) 1 Lac – 5 Lac
c) 5 Lac – 10 Lac
d) Above 10
6. What Kind of Investment do you prefer?
a) Short Term
b) Long Term
c) Both
7. Are you satisfied with the services of LIC of India?
a) Yes
b) No
8. Give reasons for insuring with LIC-
a) Company Profile
b) Brand
c) Grievances Handling
d) Undue Delay in Claims
e) Public Sector
f) All of the above

43
 BIBLIOGRAPHY

FOR SUCCESSFULLY COMPLETING MY PROJECT FILE. I HAVE TAKEN HELP

FROM THE FOLLOWING WEBSITES LINKS:

ncert.nic.in/textbook/pdf/leac204.pdf
https://www.wikipedia.org/
https://www.zaubacorp.com/compan
y/SHINJIRU-ENGINEERING-
INDIA-PRIVATE-
LIMITED/U29100HR2021PTC095
741
https://shinjiru.co.in/
https://www.coursera.org/learn/financial-statement-analysis
https://www.youtube.com/
https://www.bartleby.com/essay/Literature-Review-Of-Financial-Statement

Google Images

44
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