“ECONOMIC ANALYSIS OF COTTON OIL WITH REFERENCE TO VINAY INDUSTRIES LTD.”2459
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Date
2017-09
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JAU,JUNAGADH
Abstract
Key words: Economic analysis, cotton oil, working capital management
The Indian edible oil industry is highly fragmented with extreme variation in the consumption pattern of Indian consumers. Apart from cooking, edible oils can be used for a number of other uses and have applications in different industries. Vegetable oil consumption has increased due to rise in increasing health awareness, industrial development, growing population and increasing demand. The study was undertaken to study the economic analysis of cotton oil with reference to Vinay Industries Ltd. The primary data for processing cost of various items like raw materials, labour, storage cost etc. was collected from processing unit.The secondary data related to cotton oil sales, current assets, current liabilities, liquid assets, debtors etc.was collected through directly from the company’s annual reports.Economic analysis of groundnut oil was calculated by tabular analysis. Efficiency of working capital management practices was examined by ratio analysis, correlation and regression was also applied to test whether different accounting ratios have any significant impact on return on assets and net profit margin. Processing cost of cotton oil was Rs. 36.14 per kg.with the net return of Rs. 27.08 per kg. The benefit cost ratio observed to the 1.75 per cent. So, there was good relationship between cost and benefit and indicated benefit cost ratio show that project is viable. In the growth rate observed in quantity term was 16.26 per cent where, in value term it was 21.16 per cent. The different in growth rate was due to change in price of cotton oil.There is highly positive correlation between debtor’s turnover ratio (0.82) and inventory turnover ratio (0.75), these are statistically significant at 5 and 10 percent level in net profit margin ratio. The coefficients for two variables, inventory turnover ratio and working capital turnover ratio, were statistically significant with respect to return on assets ratio. The also coefficients for two variables, debtors turnover ratio and working capital turnover ratio, were statistically significant with respect to net profit margin ratio.