CHAPTER-4
ANALYSIS AND INTERPRETATION
CREDIT MANAGEMENT AT KAR MOBILES PVT LTD:
Very few companies have attempted a systematic articulation and formalization of their credit policy and KAR MOBILES PVT LTD is one among them.
TERMS OF PAYMENT:
Terms of payment at KAR MOBILES PVT LTD are open account. Credit sales at the company can be As per the purchase order the amount is taken at the time of delivery.
• The company excise duty is 12%.
• Letter of credit is also followed.
• Mode of payment DD/Cheque.
Credit policy variables:
• Credit standard:KAR MOBILES PVT LTD practices moderate credit standard it is neither liberal nor stiff.
• Credit period: credit period offered by KAR MOBILES PVT LTD ranges from 15-60 days.
• Cash discount: …show more content…
Comparatively the total liabilities from the year 2011 to 2013 is decreasing.
2. Total assets is decreased up to 82% year 2013 and 95% in the year 2012.
3. Total receivables have been decreased to 44% in the year 2013 and 70% in year 2012.
4. Comparative analysis for the year 2011-12is states 21% of profit for the year 2012.
5. Comparative analysis for the year 2013-14 states a negative profit for the year 2013.
6. Comparative analysis for the year 2011-12 is states a negative profit there is 35.27% for the year 2011.
7. Common size income statement shows a profit of 5.6% in the year 2011 and 7.6% in the year 2012 and 6.64% in the year 2013.
8. A trend % of good debts have been decreased to 17.09% which is very least compared to the year 2011-2012.
9. A trend of bad debts is increasing consistency from year to year.
10. Doubtful debts is 67.83% in the year 2011 and 2012 and 64.16% in 2012-13.
SUGGESTIONS:
• The company needs, to make still more improvements in its credit policy variables in order to reduce the sundry debtors.
• The company can go for providing cash discount to its customers for making prompt …show more content…
• Other liabilities and provisions as on March 31, 2013 comprise creditors for good of Rs. 582.30 lakh and other current liabilities and provisions of Rs. 274.22 lakh.
• Investments as on March 31, 2013 comprise fixed deposits.
• Other current assets as on March 31, 2013 comprise loans and advances of Rs. 16.12 lakh, advances to suppliers of Rs. 24.23 lakh, deposits of Rs. 20.58 lakh, and receivables of Rs. 11.98 lakh.
PROFIT AND LOSS ACCOUNT:
Particulars 31-Mar-201231-Mar-201131-Mar-2010
(in lakhs) (in lakhs) (in lakhs)
Number of months 12 12
ANALYSIS AND INTERPRETATION
CREDIT MANAGEMENT AT KAR MOBILES PVT LTD:
Very few companies have attempted a systematic articulation and formalization of their credit policy and KAR MOBILES PVT LTD is one among them.
TERMS OF PAYMENT:
Terms of payment at KAR MOBILES PVT LTD are open account. Credit sales at the company can be As per the purchase order the amount is taken at the time of delivery.
• The company excise duty is 12%.
• Letter of credit is also followed.
• Mode of payment DD/Cheque.
Credit policy variables:
• Credit standard:KAR MOBILES PVT LTD practices moderate credit standard it is neither liberal nor stiff.
• Credit period: credit period offered by KAR MOBILES PVT LTD ranges from 15-60 days.
• Cash discount: …show more content…
Comparatively the total liabilities from the year 2011 to 2013 is decreasing.
2. Total assets is decreased up to 82% year 2013 and 95% in the year 2012.
3. Total receivables have been decreased to 44% in the year 2013 and 70% in year 2012.
4. Comparative analysis for the year 2011-12is states 21% of profit for the year 2012.
5. Comparative analysis for the year 2013-14 states a negative profit for the year 2013.
6. Comparative analysis for the year 2011-12 is states a negative profit there is 35.27% for the year 2011.
7. Common size income statement shows a profit of 5.6% in the year 2011 and 7.6% in the year 2012 and 6.64% in the year 2013.
8. A trend % of good debts have been decreased to 17.09% which is very least compared to the year 2011-2012.
9. A trend of bad debts is increasing consistency from year to year.
10. Doubtful debts is 67.83% in the year 2011 and 2012 and 64.16% in 2012-13.
SUGGESTIONS:
• The company needs, to make still more improvements in its credit policy variables in order to reduce the sundry debtors.
• The company can go for providing cash discount to its customers for making prompt …show more content…
• Other liabilities and provisions as on March 31, 2013 comprise creditors for good of Rs. 582.30 lakh and other current liabilities and provisions of Rs. 274.22 lakh.
• Investments as on March 31, 2013 comprise fixed deposits.
• Other current assets as on March 31, 2013 comprise loans and advances of Rs. 16.12 lakh, advances to suppliers of Rs. 24.23 lakh, deposits of Rs. 20.58 lakh, and receivables of Rs. 11.98 lakh.
PROFIT AND LOSS ACCOUNT:
Particulars 31-Mar-201231-Mar-201131-Mar-2010
(in lakhs) (in lakhs) (in lakhs)
Number of months 12 12