Volume : 2, Issue : 12, December - 2013

Financial Performance of Cotton Mills – A Special Case in Andhra Pradesh

Dr. M. A. Dhandapani, M. P. Ganesh Babu

Abstract :

A subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. This term is also used as a general measure of a firm’s overall financial health over a given period of time, and can be used to compare similar firms across the same industry or to compare industries or sectors in aggregation. There are many different ways to measure financial performance, but all measures should be taken in aggregation.The objectives of this study are two analyse the liquidity position, profitability position and the effectiveness of asset utilization in Pioneer spinning and weaving mills Ltd. For achieving objectives, annual reports of the company are collected from 2000–01 to 2009–10 and analysed by using the ratios, percentages and averages. The firm has maintained very good liquidity position. Current ratio and quick ratio are more than the standard. Therefore it is advised to deposit idle cash in marketable securities. The profitability position also good except in 2007–08 and utilsed fixed assets and current assets effectively. The efficiency ratios like stock turnover ratio, debtors turnover ratio and fixed assets turnover ratio are also static during the study period. Therefore, the firm must try to improve the performance by making various forms of internal reconstruction like alteration of share capital, reduction of share capital, writing off lost assets. The firm should also follow strategies like right person in right job to improve the productivity and overall financial performance.