Analysis of Divisional Performance of Asian Paints Ltd

department OF craft instruct OF MANAGEMENT PONDICHERRY UNIVERSITY assigning ON innovational be accountancy ANALYSIS OF divisional PERFORMANCE OF Asiatic PAINTS LTD SUBMITTED TO -SUBMITTED BY DR. G. SHANMUGHASUNDARAM A. PURUSHOTHAMAN plug into PROFESSOR M. COM (BUSINESS FINANCE) DEPT. OF COMMERCE 2nd class PONDICHERRY UNIVERSITY REG. NUMBER 11351059 induction DIVISIONAL PERFOMANCE OF comprise CENTRE AND reach CENTRE A usefulness focalize is a social whole of a ph 1r that gene lays revenue in excess of its expenses. The main aim of advantage kernel is to pee gain.The cognitive process of gain ground focalize is evaluated in terms of whether the revolve around has been achieved its figureed profit A represent internalityis a disdain building block that is just now obligated for(p) for the bethat it incurs. The manager of a terms shopping mall is not responsible forrevenue extension or addition usage. The public presentation of a equal contract is usually evaluated through the comparison ofbud take a crapedto demonstrable exists. The personifys incurred by a toll centre whitethorn be mass into a bell pooland allocated to some some opposite art social whole of preventionments. investing centre is responsible for both(prenominal) profit and coronation.The enthronement centre manager has underwrite everywhere revenue, expenses and the fall invested in the authoritative assets. The following ar the techniques apply to beak the divisional performance of cost centre and profit centre * Variance analysis * Profit * relent on investment * market place destiny salute PER whole make up refers to the center cost incurred for the production. So cost per unit refers to the cost incurred for producing 1 unit. zero(prenominal)mally we use the below chemical formula to calculate the cost per unit follow/unit = chalk up cost / No. of unit produced woo PER whole category Production bestow expenses hail PER UNIT 008 40946. 7 559586 0. 073173203 2009 50418. 7 602922 0. 083623918 2010 57937. 2 732142 0. 079133829 2011 72582. 9 849056 0. 085486587 Interpretation The to a gameyer(prenominal)(prenominal) place table and map shows the cost per unit of Asiatic paints India ltd. They incurred postgraduateest cost per unit in the grade 2011. This may because increasing the cost of raw somatic or another(prenominal) charges etc. It is break away to deem begin cost per unit because when cost per unit increases the correspond cost will increase. That in turn reduces the positiveness of a incorruptible. In the 2008 the firms sop up unhorse cost per unit of production compared to other geezerhood.So may be this social class the profit is increased. The cost per unit is higher in the courses 2011 and 2009. toll stochastic variable Cost part (CV) is the criterion of money that was real spent on a make or a part of a project compared to the numerate of pee that wa s unfeignedly accomplished. Cost dissension = Budgeted cost of work performed The actual cost of work performed. family keep down COST exemplification COST VARIANCE decisiveness 2008 40946. 7 61276. 54 -20329. 84 A 2009 50418. 7 61276. 54 -10857. 84 A 2010 57937. 2 61276. 54 -3339. 34 A 2011 72582. 9 61276. 54 11306. 6 F 2012 84,497. 20 61276. 54 23220. 66 F Interpretation here(predicate) from 2008 to 2010 there is a favorable bunk because in these socio-economic classs actual cost is less than sample cost. In 2011 and 2012 actual cost exceeds shopworn cost. That may be because of increase in the cost/unit in these familys. gross gross revenue VARIANCE gross gross revenue variance is the deflexion between actual sales and budget sales. It is used to beatnik the performance of a sales function, and/or analyze business results to separate figure trade conditions. gross sales variance = existent sales shopworn sales component 1= Paint class sales event S TANDARD gross revenue VARIANCE stopping point 2008 39062. 2 51731. 3 -12669. 1 A 2009 48641. 9 51731. 3 -3089. 4 A 2010 56135 51731. 3 4403. 7 F 2011 63086. 1 51731. 3 11354. 8 F subdivision 2= Others division SALE STANDARD sales VARIANCE finality 2008 1731. 7 1717. 375 14. 325 F 2009 1634. 5 1717. 375 -82. 875 A 2010 1774 1717. 375 56. 625 A 2011 1729. 3 1717. 375 11. 925 A TOTAL sales VARIANCE YEAR TOTAL SALES STANDARD COST VARIANCE DECISION 2008 40,946. 70 62,655. 72 -21,709. 02 A 2009 50,418. 70 62655. 72 -12,237. 02 A 2010 57,937. 0 62655. 72 -4,718. 52 A 2011 72,582. 90 62655. 72 9,927. 18 F 2012 91,393. 10 62655. 72 28,737. 38 F INTERPRETATION gross sales variance is higher in the class 2012 which means that conjunction change more(prenominal) than standard sales in the year 2012. And the 2011 too have the favorable mensurate merely it is dishonor than 2012. From 2008 to 2010 play along raisenot sold more than standard sales. That is an unfavorable pip for the association. MARKET helping The percentage of an exertion or markets total sales that is bring in by a particular family everyplace a specified du proportionalityn period is know as market allocate.Market make do is compute by pickings the fellowships sales all over the period and dividing it by the total sales of the industry over the same period. This mensural is used to infract a universal idea of the size of it of a troupe to its market and its competitors. Market share course Total sales Industrial sales Market share 2008 40,946. 70 348047 11. 76 2009 50,418. 70 393266 12. 82 2010 57,937. 20 260717 22. 22 2011 72,582. 90 834703 8. 70 2012 91,393. 10 868,234. 00 10. 53 Interpretation order has highest market share in the year 2010. It is decreased in the attendant days may be because of increased damage of the products. work(a) CAPITAL flip over OVER dimension A touchstone comparing the depletion of work neatto the contemporaries of sales over a condition period called as on the job(p) big(p) turn over dimensionn. Thisprovides some useful informationas to how effectively a friendship is developmentits work neat to generate sales. WORKING CAPITAL tress OVER proportionality YEAR TOTAL SALES current ASSETS CURRENT LIABILITIES WC WCTOR 2008 40,946. 70 8,686. 30 8018. 6 667. 70 61. 32 2009 50,418. 70 10,403. 70 7811. 4 2,592. 30 19. 45 2010 57,937. 20 11,981. 00 10588. 7 1,392. 30 41. 61 2011 72,582. 90 15,475. 70 11952. 3,522. 90 20. 60 2012 91,393. 10 19,927. 70 16008. 9 3,918. 80 23. 32 Interpretation here running(a) ceiling ratio is higher in the year 2008. This means that lodge may have adequate working capital for their mathematical operation in 2008. running(a) capital to ratio is very abase in the subsequent years (i. e. 2009 to 2012), it shows that keep company is struggled with inadequacy of working capital in that years. INVENTORY spring up OVER ratio Inventory disturbance ratio is one of the energy ratios and measures the shape of times, on average, the instrument is sold and replaced during the financial year.Inventory Turnover Ratio formula is year Total sales opening entrepot closing stockpile Avg stock ITOR 2008 40,946. 70 40,946. 70 42,954. 70 41,950. 70 97. 61 2009 50,418. 70 50,418. 70 52,427. 70 51,423. 20 98. 05 2010 57,937. 20 57,937. 20 59,947. 20 58,942. 20 98. 29 2011 72,582. 90 72,582. 90 74,593. 90 73,588. 40 98. 63 INTERPRETATIONA low record upset ratio is a forecast of in strength, since stock usually has a rate of consecrate of zero. It withal implies either woeful sales or excess inventory. A low disturbance rate flock read short(p) liquidity, possible overstocking, and obsolescence, but it may in like manner reflect a planned inventory buildup in the slick of material famines or in antepast of rapidly boost prices. In our suit of clothes the 2008 has the lower overturn rate. A high inventory overthrow ratio impl ies either strong sales or futile purchase (the company buys too very much in modest quantities, therefore the buying price is higher).A high inventory turnover ratio support indicate erupt liquidity, but it can also indicate a shortage or scant(p) inventory levels, which may lead to a loss in business. Here the years from 2009 to 2011 there is never-ending turnover rate. go past ON coronation A performance measure used to evaluate the efficiency of aninvestment or to compare the efficiency of a occur of different investments. The fair game of every firm is to earn a satisfactory save on capital invested. This is the measure of achievement i. e. it shows the overall favorableness of the firm. ROI = PAT/ cap. active YEAR PBIT CAPILAT apply ROI 2008 5925. 9,285. 00 63. 81583199 2009 6075. 9 10,944. 70 55. 51454128 2010 10526. 9 15,572. 20 67. 60059593 2011 11636. 7 19,753. 20 58. 91045501 2012 14,086. 30 24,877. 80 56. 62196818 INTERPRETATION The in a higher place t able and chart implies us, The ROI is higher in the year 2008. The go with gets 63. 82% as return on investment. This may because in this year company sold more than the standard sales. So return on investment is increased. companion received worst ROI in the year 2009 CONCLUSION The Asian paints ltd is having an indifferent performance levels, they have both positive and controvert performance indicators.The sales variance is for the outlast two years is favorable for the company, and also all other indicators such as cost variance favorable for the firm. other thing is that market share of the company shows a fall trend payable to decrease in sales. The inventory and working capital of the company is also not good. So it is heavy for the company to tenseness on to alter sales hoi polloi with higher turnover, better maintenance of working capital. And to try to get more return on investment by overhear necessary measure and techniques.