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Accountancy Class 12 Project On Ratio Analysis
Accountancy Class 12 Project On Ratio Analysis
Project Guidelines
A. Points to be kept in mind while preparing the Accountancy Project for Grade - 12
D. Here is a sample project with detailed essential points to be kept in mind while creating
your project.
Accountancy Project for Class 12
ACKNOWLEDGEMENT
I would like to convey my sincere thanks to ……… (teacher’s name), my accountancy teacher,
who always gave me valuable suggestions and guidance during the project. She/he has a
source of inspiration and helped me understand and remember important details of the
project. She/he gave me an amazing opportunity to do this wonderful project ‘(name of the
project)’.
I also thank my parents and friends for their help and support in finalising this project within
the limited time frame.
CERTIFICATE BY GUIDE
This is to certify that ________ (name of the student) of class XII of _________ (name of the
school), _______ (name of the state) has completed his/her project file under my guidance.
He/she has taken proper care and shown the utmost sincerely in completing this project.
I certify that this project is up to my expectations and as per the guidelines issued by CBSE.
CERTIFICATE BY STUDENT
I ________ (name of the student), student of class XII of ________ (name of the school),
________ (name of the state) hereby certify that the project was undertaken by me as per
the CBSE curriculum. I take it to be authentic and reliable.
CONTENTS
Sl. No. PARTICULARS PAGE NO.
1. Ratio Analysis
2. Comments
Accountancy Project for Class 12
PROJECT - 02
SPECIFIC PROJECT
(Name of the project)
I have selected two companies namely Nayan Ltd. and Nutan Ltd. They do a similar business in a
similar business environment and they are similar in size also. I have found them to be comparable and
therefore, have selected them.
Question:
The data is extracted from their annual financial statements of Nayan Ltd. and Nutan Ltd. The data is
for the financial year 2019 - 2020.
2. Profitability Ratio, i.e., Net Profit Ratio, Return on Total Assets Ratio and Return on Capital
Employed are computed.
3. Activity Ratio, i.e., Inventory Turnover Ratio, Fixed Assets Turnover Ratio, Current Assets
Turnover Ratio and Total Assets Turnover Ratio are computed.
4. Ratios for financial position, i.e., Debt to Equity Ratio, Fixed Assets to Long-term Funds Ratio
and Proprietary Ratio are computed.
5. The accounting ratios so computed are plotted in a manner that comparison is easily made.
6. The accounting ratios of the two companies are analysed and accordingly commented upon.
A. Liquidity Ratios
(i) Current Ratio: ₹18,03,000 ₹24,17,600
₹9,17,600 ₹14,02,000
= 1.96 : 1 = 1.72 : 1
B. Profitability Ratio
(i) Net Profit Ratio:
₹2,06,800 x 100 ₹2,92,800 x 100
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 (𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥) ₹68,20,000 ₹52,00,000
× 100 = 3.03% = 5.63%
𝑅𝑒𝑣𝑒𝑛𝑢𝑒 𝑓𝑟𝑜𝑚 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛 𝑖. 𝑒. 𝑁𝑒𝑡 𝑆𝑎𝑙𝑒𝑠
₹68,20,000 ₹52,00,000
₹18,03,000 ₹24,17,600
= 3.78 times = 2.15 times
D. Financial Ratios
(i) Debt to Equity Ratio:
₹14,00,000 ₹12,60,700
𝐿𝑜𝑛𝑔 − 𝑡𝑒𝑟𝑚 𝐷𝑒𝑏𝑡𝑠 ₹24,70,000 ₹28,20,900
𝐸𝑞𝑢𝑖𝑡𝑦 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠′ 𝐹𝑢𝑛𝑑
= 0.57 : 1 = 0.45 : 1
Long-term debts = Debentures
Shareholders’ funds = Equity Share Capital +
Reserves and Surplus
₹24,70,000 ₹28,20,900
₹50,61,500 ₹56,50,200
Comments
Liquidity Position:
Profitability Position:
Profitability refers to the financial performance or efficiency of the business.
All the profitability ratios of Nutan Ltd. are better than that of Nayan Ltd.It shows that Nutan
Ltd. is making better utilisation of available resources than Nayan Ltd. Due to making more
economical purchases or products are better priced, the Net Profit Ratio of a Nutan Ltd. is
better. This must be due to the better result of Gross Profit Ratio.
Activity Ratio:
Activity Ratios measure how well the resources have been used by the enterprise.
After the analysis of all the activity ratios, it shows that activity ratios of Nayan Ltd. are
better than that of Nutan Ltd. It also shows that Nayan Ltd. is making better utilisation of
available resources to achieve sales. But Nayan Ltd. is earning lower profit as compared
to Nutan Ltd.
Financial Position:
After analysing all financial ratios, it shows that both the companies' financial
position is not much different. The ratios indicate that both the companies are equally
placed.
Accountancy Project for Class 12
Teacher’s Observation
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