a study on financial analysis of tri van drum airport

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A STUDY ON FINANCIAL ANALYSIS OF TRIVANDRUM INTERNATIONAL AIRPORT ABSTRACT The project titled “A study on financial analysis of Trivandrum International Airport” has been undertaken at the Trivandrum International Airport over a period of 4 months. The primary objective of the study is to analyze and evaluate the various financial statements of Trivandrum Airport. Mainly secondary data obtained from financial statements, books of accounts and journals have been used for the study. Tools like ratio analysis, comparative income statement and DU PONT control chart have been used for the study. The data in the study is summarized by using tables and various charts. 1

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Page 1: A Study on Financial Analysis of Tri Van Drum Airport

A STUDY ON FINANCIAL ANALYSISOF

TRIVANDRUM INTERNATIONAL AIRPORTABSTRACT

The project titled “A study on financial analysis of Trivandrum International

Airport” has been undertaken at the Trivandrum International Airport over a

period of 4 months.

The primary objective of the study is to analyze and evaluate the various

financial statements of Trivandrum Airport.

Mainly secondary data obtained from financial statements, books of

accounts and journals have been used for the study.

Tools like ratio analysis, comparative income statement and DU PONT

control chart have been used for the study.

The data in the study is summarized by using tables and various charts.

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ACKNOWLEDGEMENT

At the onset, I thank the almighty of blessing me and guiding me to

complete the project within the stipulated time.

I am extremely obliged to the Finance Department of TRIVANDRUM

INTERNATIONAL AIRPORT for sparing their valuable time and providing with

best facilities and the right atmosphere for the completion of the project.

I also take the opportunity to express my sincere thanks and gratitude to

the Principal Dr. P.S.S.SRINIVASAN, the Director Prof. K. PRABAKAR and the

faculty guide Dr.K.Balanaga Gurunathan of K.S.Rangasamy College of

Technology, Tiruchengode for their excellent encouragement and support

throughout the course of this project.

I take the opportunity to thank profusely Mr. Saji Sam Accounts Manager

Trivandrum International Airport, for his excellent guidance and needful

discussions without which this project would not have been successful.

Last but not least, a bouquet of love and gratitude to my parents for

showering me with the moral support and love when ever I needed. My sincere

thanks to my friends on whom I can turn on for anything and who had been a

pillar of strength and support throughout the completion of this work. I wish to

thank all others who had encouraged me directly or indirectly for the successful

completion of this project.

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TABLE OF CONTENTS

Particulars Page No.

CHAPTER – 1

1.1 Introduction 1

1.2 Statement of the problem 3

1.3 Objectives of the study 4

1.4 Scope of the study 5

1.5 Limitations of the study 6

1.6 Chapterization of the study 7

CHAPTER – 2

2.1 Concepts of the study 8

2.2 Review of related literature 14

2.3 Industry profile 15

2.4 Company profile 21

CHARTER – 3

3.1 Research Methedology 24

3.2 Data collection details 24

3.3 Tools of the study 25

CHAPTER – 4

4.1 Analysis of the data 26

CHAPTER – 5

5.1 Findings of the study 59

5.2 Suggestions 60

5.3 Conclusion 61

APPENDICES

BIBLIOGRAPHY

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LIST OF TABLES

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S.No TITLEPAGE

No

4.1 TABLE SHOWING FIXED ASSET

TURNOVER RATIO26

4.2 TABLE SHOWING CURRENT RATIO 28

4.3 TABLE SHOWING REVENUE STAFF

COST RATIO30

4.4 TABLE SHOWING OPERATING COST

RATIO32

4.5 TABLE SHOWING REVENUE SECURITY

EXPENSES RATIO34

4.6 TABLE SHOWING DEPRECIATION COST

RATIO36

4.7 TABLE SHOWING ADMINISTRATIVE

COST RATIO38

4.8 TABLE SHOWING NET PROFIT RATIO 40

4.9 TABLE SHOWING WORKING CAPITAL

TURNOVER RATIO42

4.10 TABLE SHOWING DEBTORS TURNOVER

RATIO44

4.11 TABLE SHOWING COMPARATIVE

INCOME AND EXPENDITURE

STATEMENT FOR THE YEAR 2002-03

AND 2003-04

46

4.12 TABLE SHOWING COMPARATIVE

INCOME AND EXPENDITURE

STATEMENT FOR THE YEAR 2003-04

AND 2004-05

48

4.13 TABLE SHOWING COMPARATIVE

INCOME AND EXPENDITURE

STATEMENT FOR THE YEAR 2004-05

AND 2005-06

50

4.14 TABLE SHOWING COMPARATIVE

INCOME AND EXPENDITURE

STATEMENT FOR THE YEAR 2006-07

52

4.15 DU PONT CONTROL TABLE FOR THE

YEAR 2002-0353

4.16 DU PONT CONTROL TABLE FOR THE

YEAR 2003-0455

4.17 DU PONT CONTROL TABLE FOR THE 57

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DU PONT CONTROL TABLE FOR THE YEAR 2006-07

LIST OF CHARTS

S.No TITLEPAGE

No

4.1.1 CHART SHOWING FIXED ASSET TURNOVER

RATIO27

4.2.2 CHART SHOWING CURRENT RATIO 29

4.3.3 CHART SHOWING REVENUE STAFF COST

RATIO31

4.4.4 CHART SHOWING OPERATING COST RATIO 33

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4.5.5 CHART SHOWING REVENUE SECURITY

EXPENSES RATIO35

4.6.6 CHART SHOWING DEPRECIATION COST

RATIO37

4.7.7 CHART SHOWING ADMINISTRATIVE COST

RATIO39

4.8.8 CHART SHOWING NET PROFIT RATIO 41

4.9.9 CHART SHOWING WORKING CAPITAL

TURNOVER RATIO43

4.10.10 CHART SHOWING DEBTORS TURNOVER

RATIO45

4.15.11 DU PONT CONTROL CHART FOR THE YEAR

2002-0354

4.16.12 DU PONT CONTROL CHART FOR THE YEAR

2003-04

56

4.17.13 DU PONT CONTROL CHART FOR THE YEAR

2004-0558

4.18.14 DU PONT CONTROL CHART FOR THE YEAR

2005-0660

4.19.15 DU PONT CONTROL CHART FOR THE YEAR

2006-0762

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INTRODUCTION

Financial statement is an organized collection of data according to logical

and consistent accounting procedures. Its purpose is to convey an understanding

of some financial aspects of a business firm. It may show a position at a moment

of time as in the case of a balance sheet, or may reveal a series of activities over

a given period of time, as in the case of an income statement.

Thus the term ‘financial statements’ generally refer to two basic

statements:

1. The income statement, and

2. Balance sheet

Of course, a business may also prepare

3. A statement of retained earnings

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4. A statement of changes in financial position

Financial analysis is the process of identifying the financial strengths and

weaknesses of the firm by properly establishing relationships between the items

of the balance sheet and the profit and loss account. Financial analysis can be

undertaken by management of the firm, or by parties outside the firm, viz.

owners, creditors, investors and others. The nature of analysis will differ

depending on the purpose of the analyst.

1. Trade creditors are interested in the firm’s ability to meet their

claims over a short period of time. Their analysis will, therefore, confine

to the evaluation of the firm’s liquidity position.

2. Suppliers of long-time debt, on the other hand, are concerned

with the firm’s long-term solvency and survival. They analyze the firm’s

profitability over time, its ability to generate cash to be able to pay

interest and repay principal and the relationship between various

sources of funds.

FinancialStatements

IncomeStatement

Statement of changes in

financial position

Balance sheet

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Statement of retained earnings

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3. Investors, who have invested their money in the firm’s shares, are

most concerned about the firm’s earnings. They restore more

confidence in those firms that show steady growth in earnings.

4. Management of the firm would be interested in every aspect of the

financial analysis. It is their overall responsibility to see that the

resources of the firm are used most effectively and efficiently, and that

the firm’s financial condition is sound.

STATEMENT OF THE PROBLEM

In the present scenario of ‘modern techniques’ in compilation of various

financial statements, new systems and trends are being adopted by several

companies to present their financial status and results before the share-holders

year after year.

As a finance student it always helps to practically study and analyze the

financial statements of a company to have a thorough understanding as to how

such accounting statements are derived out of the various books of accounts

maintained by the company. It is also important to study the necessity of various

management information reports prepared by the company in addition to the

usual reports like trial balance, balance sheet etc. and the role played by such

statements in future economic planning of the company.

In this context it is felt appropriate to know as to how an upcoming aviation

industry like Airports Authority of India is preparing their financial statements with

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a particular reference to Trivandrum Airport and analyze the same with several

accounting tools like percentage analysis, ratio analysis.

The financial statement analysis includes ratio analysis, comparative

statements, common size statements, cash flow, fund flow etc.

OBJECTIVES OF THE STUDY

The objective of the report is to study the various financial statements of

the AAI and to have a clear idea about the various financial strengths and

weaknesses of the organization.

1. To study and analyze the various sources of its Cash Inflows of

Trivandrum Airport

2. To study and analyze the Cash Inflows of Trivandrum Airport

3. To make a comparative analysis of income and expenditure of

Trivandrum Airport for the financial year starting from 2002-03 to 2006-

07

4. To study and evaluate the various financial statements of Trivandrum

Airport and finding the different ratio analysis

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5. To Analyze the ratio analysis and interpretation of the same to find out

the company’s long term solvency

6. To make suggestion for further improvements based on the above

analysis

SCOPE OF THE STUDY

The recent spurt in the aviation industry, through out the world has

brought un-imaginable economic growth and India is one of the leading

developing countries to share such growth. As such the Civil Aviation Industry is

presently a happening industry in the country in view of its all-round financial

growth and Airports Authority of India, which is one of the premiere organizations

in Civil Aviation, is felt to be apt for this project work and as sample case study

Trivandrum International Airport has been selected.

It is necessary for a student of Master in Finance to understand the

financial position of an organization like Trivandrum Airport, to know its various

sources of income, to know how the money is spent, how its trial balances and

other relevant financial statements are compiled, how the surplus/deficit is

worked out before the statements are forwarded to its Corporate office in New

Delhi and such study helps to compare theory with practical one

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LIMITATIONS

Trivandrum International Airport is one of the many airport units of Airports

Authority of India. As such most of the Financial Statements are not compiled at

local level. For example the Balance Sheet of AAI is compiled only at their

Corporate Head quarters by consolidating the data in respect of all the airports in

India. Only the Trial Balance is prepared at Trivandrum. The analysis was made

only on the basis of statements available at local level.

The time constraint was yet another limitation to study all the financial

aspects of the Trivandrum airport and also since airport functions from both

Domestic and International terminals, high level of security measures are

adopted for the entry to some areas of the airport.

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CONCEPTS OF THE STUDY

Financial statement analysis

The term ‘Financial Statement Analysis” has the following detailed

explanation:-

Financial statement analysis is the process of examining relationships

among financial statement elements and making comparisons with relevant

information. It is a valuable tool used by investors and creditors, financial

analysts, and others in their decision-making processes related to stocks, bonds,

and other financial instruments. The goal in analyzing financial statements is to

assess past performance and current financial position and to make predictions

about the future performance of a company. Investors who buy stock are

primarily interested in a company's profitability and their prospects for earning a

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return on their investment by receiving dividends and/or increasing the market

value of their stock holdings. Creditors and investors who buy debt securities,

such as bonds, are more interested in liquidity and solvency: the company's

short-and long-run ability to pay its debts. Financial analysts, who frequently

specialize in following certain industries, routinely assess the profitability,

liquidity, and solvency of companies in order to make recommendations about

the purchase or sale of securities, such as stocks and bonds.

Analysts can obtain useful information by comparing a company's most

recent financial statements with its results in previous years and with the results

of other companies in the same industry. Three primary types of financial

statement analysis are there. They are commonly known as horizontal analysis,

vertical analysis, and ratio analysis.

They are method used by interested parties such as investors, creditors,

and management to evaluate the past, current, and projected conditions and

performance of the firm. Ratio analysis is the most common form of financial

analysis. It provides relative measures of the firm's conditions and performance.

Horizontal Analysis and Vertical Analysis are also popular forms.

Horizontal analysis is used to evaluate the trend in the accounts over the years,

while vertical analysis, also called a Common Size Financial Statement discloses

the internal structure of the firm. It indicates the existing relationship between

sales and each income statement account. It shows the mix of assets that

produce income and the mix of the sources of capital, whether by current or long-

term debt or by equity funding

After completing the financial statement analysis, the firm's financial

analyst will consult with management to discuss plans and prospects, any

problem areas identified in the analysis, and possible solutions.

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In this project work, the relevance of Financial Statement Analysis in

respect of Trivandrum Airport are proposed to be analyzed with the available

data and information about the income and expenditure of Trivandrum Airport so

that the various Ratio Analysis can be arrived at.

The following is the flow chart of various Ratio Analysis being worked-out

at Trivandrum Airport, to find out the company’s performances during every

financial year.

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CLASSIFICATION OF RATIOS USED BY TRIVANDRUM AIRPORT

FLOW CHART OF RATIOS

LIQUIDITY RATIOS

ACTIVITY RATIOS

PROFITABILITY RATIOS

I. Out of the Liquidity Ratios Category, Trivandrum Airport uses the following specific ratios

LIQUIDITY RATIOS

CURRENT RATIO

II. Out of the Activity Ratios Category, Trivandrum Airport uses the following specific ratios

ACTIVITY RATIOS

FIXED ASSET TURNOVER RATIO

WORKING CAPITAL TURNOVER RATIO

SUNDRY DEBTORS TURNOVER RATIO

III. Out of the Profitability Ratios Category, Trivandrum Airport uses the following specific ratios

PROFITABILITY RATIOS

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NET PROFIT/LOSS RATIO

STAFF COST RATIO

OPERATING COST RATIO

ADMINSITRATIVE EXPENSES RATIO

SECURITY EXPENSES RATIO

DEPRECIATION COST RATIO

RATIO ANALYSIS

The importance of ratio analysis has widely recognized on account of its

usefulness in different ways. Ratios convey the inter relationship between

different accounting items. Hence they are more helpful than absolute figures

shown in the financial statements. The absolute figures, shown in the financial

statements are neither significant nor able to be compared. In fact they are

dump. But ratios have power to speak.

The following are the importance of Ratio Analysis :-

It helps to measure the General Efficiency of the Organisation

It guides the top management in forecasting and planning

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It indicates the Financial Solvency of the Company

It facilitates the Finance/Marketing managers in decision making

It helps to take corrective action

It aids in making the intra-firm comparisons

It plays the role of good communicator

Ratios are very useful in cost control

COMPARATIVE STATEMENTS

Comparative statements are statements of financial position at different

periods of time. The element of financial position is shown in a comparative form

so as to give an idea of financial position at two or more periods. Comparative

statement is an important device of horizontal financial analysis. It can be

prepared for both types of financial statements – Profit and Loss Account and

Revenue and Expenditure Account.

DU PONT CONTROL CHART

Return on investment (ROI) represents the earning power of the company.

ROI depends on two ratios:

1. Net profit ratio

2. Capital turnover ratio

A change in any of these ratios will change the firm’s earning power.

These two ratios are affected by many factors. A change in any of these factors

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will change these ratios also. The various factors affecting the ROI can be put

through a chart given below.

20

Return on Investment

(ROI)

Capital Employed

Net Profit

Sales

Capital Turnover

Net Profit Ratio

Sales

Fixed Asset

Working Capital

Expenses Sale

Current Assets

Current liabilities

Administration, Selling and Distribution expenses

Cost of Goods Sold

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REVIEW OF RELATED LITERATURE

GEENA.I of All Saints College Trivandrum has done her project in

Trivandrum International Airport on the topic “ Financial Performance of

Trivandrum Airport”

In that she has stated that Trivandrum Airport has been running in a loss

for the years starting from 2001-02 to 2005-06. The profit can be further

increased by focusing more on increasing the revenue and also reducing the

expenditure at the same time.

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INDUSTRY PROFILE

AIRPORTS AUTHORITY OF INDIA

The beginning:

The International Airports Authority of India (IAAI) an Autonomous body

under ministry of civil aviation was formed in 1972 with the aim to develop and

manage the four International Airports situated in Bombay (now Mumbai) New

Delhi, Calcutta (now Kolkata) and Madras (now Chennai) IAAI lived up to its

expectation and remarkable improvement was visible at these Airports.

In 1986 The Ministry of Civil Aviation created another Autonomous body

called National Airports Authority of India (NAA) for the development and

management of Domestic Airports including Civil Enclaves (small passenger

terminals) at defense Airports. This body was also responsible for air traffic,

services and the related communications, navigation and surveillance facilities in

the country. In 1991, Trivandrum airport was also designated as International

Airport under IAAI.

In 1995, with a view to ensure better co-ordination and optimum use of

recourses, both IAAI and NAA were merged. The unified body called the Airports

Authority of India (AAI).

PROFILE:

Airports Authority of India its ever growing spectrum of operations

provides Air Navigator Services over 2.8 million square nautical miles of

airspace, reaching far beyond the continental airspace.

AAI manages 126 Airports, which include 11 international airports 89

domestic airports and civil enclaves at defense airfields. AAI also provides Air

traffic management services over entire Indian air space and adjoining oceanic

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areas with ground installations at all airports and 25 other locations to ensure

safety of aircraft operations. It also facilitates passenger services at 28 defense

aerodromes. Last year the authority successfully ensured safe and orderly

movement of 4.9lac aircraft, 42 million passengers and 8.4 lac tonnes of cargo at

Indian Airports.

All major air- routes over Indian landmass are Radar covered (24 Radar

installations at 11 locations) along with VOR/DVOR coverage (72 installations)

co-located with Distance Measuring Equipment(71 installations) 39 runways

provided with ILS installations with Night Landing Facilities at 36 Airports and

Automatic message switching system at 15 Airports.

AAI’s successful implementation of Automatic Dependence Surveillance

system, using indigenous technology, at Kolkata and Chennai air traffic control

centres, gave India the distinction of being the first country to use this advanced

technology in the South East Asian region enabling effective Air Traffic Control

over oceanic areas using satellite mode of communication. Use of remote

controlled VHF coverage, along with satellite communication links, has given

added strength to AAI’s Air Traffic Management system. Linking of 80 locations

by V-Sat installations during 2005 shall vastly enhance Air Traffic Management

and in turn safety of aircraft operations besides enabling administrative and

operational control over AAI’s extensive Airport network. More than 2 lac over

flying flights, using Indian Airspace were immaculately handled by ADI in the

same year.

Extending beyond it’s inundating to function on business principles; AAI

proudly asserts its social obligation of a corporate citizen, entrusted to import

infrastructural facilities and services to bolster civil aviation in the country.

Development of Airports in the NE and the inaccessible region has always been

a priority over commercial considerations. The Authority has invested profoundly

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in all Airports across the country to realize the latent potential of these regions

and to integrate them with respect to the country.

MODEL AIRPORT

AAI has identified 12 important domestic Airports which are developed as

model airport based on the traffic potential, important of the city tourist potential

and coverage of the entire region in the country.

The runway at the airport is designed to cater for A-320 operations with

standard approach and landing aids, modern communication and navigational

facilities. The terminal building offer excellent facilitation keeping in the view the

ecology and the local environment. The model Airports are Jaipur, Lucknow,

Nagpur, Vadodara, Calicut, Coimbaore, Patna, Bhubaneshwar, Guwahati,

Hyderabad and Imphal. Apart from this, AAI is developing some of the cardinal

Airports which operate tourist traffic. These include Goa, Bangalore, Varanasi

and Agra.

CUSTOMER SATISFACTION AND SAFETY

Customer satisfaction and safety are the core priorities of AAI. In its

endeavor to provide world class passenger amenities and services, the authority

is developing more international Airports in the country and improving facilities in

Domestic Airports.

MODERNISATION

Developing world class Air Navigational infrastructure to effectively

manage Air Traffic is an identified trust area. As part of this drive the authority is

in the process of implementing a VSAT based satellite communication Network

to connect 80 airports in the country to support all operational communication in

the present as well as CNS/ATM environment.

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Satellite Navigational has also been one of the initiatives for enhancing the

accuracy and reliability of GPS signal which could be gainfully used by other

transport sectors like road transport, railway, forestry, resources exploration,

environmental management etc.

A phased induction of ATC automation systems and also induction of new

facilities to improve standards of safety at Airports and in the Air are in progress.

IT IMPLEMENTATION

Information technology holds the key to operational and managerial

efficiency, transparency and employee productivity. AAI website with domain

name WWW.airportindia.org.in or www.aai.aero is a popular Website giving a

host of information.

OFFICIAL LANGUAGE

Progressive use of Hindi for effective implementation of official language

Act and Rules is constantly encouraged. AAI has bagged a number of prizes for

successful implementation of Rashtra Bhasha.

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COMPANY PROFILE

TRIVANDRUM INTERNATIONAL AIRPORT

Apart from being the Capital city of the State of Kerala,

Thiruvananthapuram (named after the Deity of Thiru Anantha Padmnabhan in

the city) has much historical, geographical and cultural significance, which makes

the city very special in the state as compared to other cities in the state. Though

not so bigger as compared to the city of Cochin in terms of area and population,

the fact of being the Capital city of the erstwhile State of Travancore proved to be

very vital in making the city as Capital State of Kerala on its formation on the 1st

November, 1956.

Originally the people of Kerala, who are said to be having the best

emigrational qualities in the country, were mostly travelling across the seas to the

countries like Sri Lanka, Malaysia, Indonesia and other South-East Asia nations

either through Cochin Port or through Vizhinjam Port, when the air-travel was not

so popular and affordable (one has to go all the way to Madras to catch a flight).

But the rulers of Travancore state with their foresight about the people’s

requirements, seriously thought about the need for building an airport at

Trivandrum, the first in the state. Thus happened the Trivandrum Airport in the

1930s.

Trivandrum airport has a long history of almost 7 decades. The modern

flight services to Trivandrum Airport have commenced on the 29th October,

1935, with the introduction of new passenger air service between Trivandrum

and Bombay. An extract from the pages of the book on the History of Kerala

depicts the photograph of the original Aerodrome of Trivandrum along with the

news item about the first commercial flight to Trivandrum Airport (Annexure-I).

The land required for the construction of runway for landing and take-off of the

aircrafts, was donated by the then Maharajah of Travancore Shri Godha Varma

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at free of cost.

The Management of the airport has changed many hands over the years

from Civil Aviation Department to National Airports Authority of India to

International Airports Authority of India and finally to the present organisation

“Airports Authority of India – International Airports Division”.

It is one of the five International Airports in India. The Trivandrum Airport

was started after independence. It was built in 1985. The Trivandrum Airport is

situated at a place called ‘Thope’ in the capital city of Kerala -Trivandrum Late

Mr.Rajiv Gandhi, Prime Minster of India, inaugurated the Trivandrum Terminal

building on 5th September 1985.This Airport has been declared as Trivandrum

International Airport with affect from January 1st, 1991 by Sri Harmohan Dhawan,

the then Union minister of Civil Aviation at a function presided over by the Sri

E.K.Nayanar the then Chief Minister of Kerala. The Airport is operated by the

Airport Authority of India.

The Trivandrum Airport is presently handling nearly one million

passengers in international and domestic sectors per annum. The average

annual growth of passenger over nine years period has been about 6 per cent.

The following are the airlines operating from this airport:-

Air India

Indian Airlines

Gulf Air

Srilankan Airlines

Oman Air

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Qatar Airways

Kuwait Airways

Jet Airways

Silk Air

In addition to the above airlines, some chartered aircraft operated by

private foreign airlines M/S. Monarch Air and M/S. Pulkovo Air are also plying at

Trivandrum during the tourist season on weekly basis.The following are the

various destinations from Trivandrum Airport.

INTERNATIONAL DESTINATIONS

Dubai, Doha, Bahrain, Sharjah, Abu Dubai, Riyadh, Colombo, Singapore,

Male, Kuwait, Muscat and some other indirect destination for European and

North American cities like London, Paris, Frankfurt, New York, New Jersey, Los

Angels etc. through connecting flights

DOMESTIC DESTINATIONS

Mumbai, Chennai, Trichy, Bangalore ,Cochin, Delhi.

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FACTS AND FIGURES OF TRIVANDRUM INTERNATIONAL

AIRPORT

SL

NO.PARTICULARS SPECIFICATION

1 LAND AREA 583 ACRES

2 RUNWAY LENGTH 3398 MTRS

3 TERMINAL BUILDING TWO(FULLY AIRCONDITIONED)

4 PLINTH AREA-DOMESTIC 5358 SQ.M.

5 PLINTH AREA-INTERNATIONAL 11271SQ.M.

6 TAXIWAY 05

7 PARKING BAYS 08

8 CHECKING COUNTERS-DOMESTIC 07

9 CHECKINGCOUNTERS-INTERNATIONAL 17

10 IMMIGRATION COUNTERS 20

11 CUSTOMS COUNTERS 15

12 SECURITY COUNTERS 07

13 BIGGEST AIRCRAFT THAT CAN LAND BOEING-747(JUMBO JET)

14 SURVEILLANCE AIDS AVAILABLE ARSR+MSSR (120.9MHZ.

ASR+MSSR 119.6MHZ)

15 NAVIGATIONAL AIDS AVAILABLE DVOR(115.1MHZ)

DME(1185MHZ)

NDB(229KHZ)

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RESEARCH METHODOLOGY

Data Collection

Since the project is aimed at compiling the analysis of various financial

statements of Trivandrum Airport the same have to be derived mainly from the

Secondary data available in the Trial Balances/Balance Sheets/Annual Reports

of the company. However, Primary Data has also been employed in collecting

the Operations and Functions of Airport, which are not readily available on

record.

Primary Data:

The modus operandi includes discussions with:-

Managers and Finance Executives

Non-executives in the departments

Who have guided me in understanding the financial activities of the

airport, the sources of cash inflows/outflows etc.

Secondary Data:

Secondary data collected from Trivandrum Airport’s Trial

Balances/Balance Sheets/Annual Reports for the period from 2002-03 to 2006-

07, budget and by referring to Traffic magazines of AAI, various

booklets/presentations etc. Some of the information has also been gathered from

the Airports Authority of India’s official websites .

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TOOLS OR TECHNIQUES:

All data collected were summarily tabulated and presented so as to

facilitate proper understanding and comparison. Percentages have been used to

show the relative significance of each variable. Bar Diagrams and Line Diagrams

have been used to pectoris.

Ratio analysis

Comparative income and expenditure statement.

PERIOD OF THE STUDY:

The accounting year of the company commences from 1st April and closes

by 31st March of the next year. The duration of the study is for five years from

2002-03 to 2006-07

32

Page 33: A Study on Financial Analysis of Tri Van Drum Airport

ANALYSIS AND INTERPRETATION.

RATIO ANALYSIS

TABLE NO – 4.1

TABLE SHOWING FIXED ASSET TURNOVER RATIO.

FINANCIAL YEAR

TOTAL REVENUE

FIXED ASSETS RATIO

2002-03 2,361.36 5,277.11 0.452003-04 2,671.43 5,116.69 0.522004-05 2,357.95 7,059.45 0.332005-06 3,584.98 7,200.17 0.502006-07 4406.75 7170.81 0.61

INTERPRETATION

Highest ratio -- 3.01 during the year 2004-05.

Lowest ratio -- 0.61 during the year 2006-07.

The fixed asset turn-over ratio generally indicates the

performances of f ixed assets in generating the levels of revenue.

The more generation of revenue, the better performances of f ixed

assets. From 2002-03 onwards there is an increasing trend of the

performances ti l l 2003-04 and it peaked in 2006-07.

33

Page 34: A Study on Financial Analysis of Tri Van Drum Airport

CHART NO – 4.1.1

0.45

0.52

0.33

0.5

0.61

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING FIXED ASSET TURNOVER RATIO

RATIO

34

Page 35: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.2

TABLE SHOWING CURRENT RATIO.

FINANCIAL YEAR

CURRENT ASSET

CURRENT LIABILITIES

RATIO

2002-03 1,731.34 1,147.26 1.51

2003-04 1,843.16 1,097.24 1.68

2004-05 2,176.26 722.18 3.01

2005-06 2,157.32 831.57 2.59

2006-07 5410.38 868.01 6.23

INTERPRETATION

Highest ratio -- 6.23 during the year 2006-07.

Lowest ratio -- 1.51 during the year 2002-03.

The above table reveals that the current ratio of Trivandrum

airport is on an increasing trend from 1.51 in the year 2002-03 to

3.01 in the year 2004-05.

35

Page 36: A Study on Financial Analysis of Tri Van Drum Airport

36

Page 37: A Study on Financial Analysis of Tri Van Drum Airport

CHART NO – 4.2.2

1.511.68

3.01

2.59

6.23

0

1

2

3

4

5

6

7

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING CURRENT RATIO

RATIO

37

Page 38: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.3

TABLE SHOWING REVENUE STAFF COST RATIO

FINANCIAL YEAR

STAFF COSTTOTAL

REVENUERATIO

2002-03 1,383.60 2,361.36 0.59

2003-04 1,351.40 2,671.43 0.51

2004-05 1,508.96 2,357.95 0.64

2005-06 1,678.96 3,584.98 0.47

2006-07 1711.50 4406.75 0.39

INTERPRETATION

Highest ratio -- 0.64 during the year 2004-05.

Lowest ratio -- 0.39 during the year 2006-07.

The revenue staff cost ratio generally indicates the level of

staff cost in generating the levels of revenue. The less the staff cost

in generating more revenue is good for the company. The

Trivandrum airport has shown a tremendous performance by

38

Page 39: A Study on Financial Analysis of Tri Van Drum Airport

reducing the ratio to 0.39. The ideal ratio for any company should be

around 0.4.

CHART NO – 4.3.3

0.59

0.51

0.64

0.47

0.39

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING REVENUE STAFF COST RATIO

RATIO

39

Page 40: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.4

TABLE SHOWING OPERATING COST RATIO

FINANCIAL YEAR

OPERATING COST

TOTAL REVENUE

RATIO

2002-03 482.92 2,361.36 0.20

2003-04 567.93 2,671.43 0.21

2004-05 832.29 2,357.95 0.35

2005-06 681.00 3,584.98 0.19

2006-07 896 4406.75 0.20

INTERPRETATION

Highest ratio -- 0.35 during the year 2004-05.

Lowest ratio -- 0.19 during the year 2005-06.

40

Page 41: A Study on Financial Analysis of Tri Van Drum Airport

The operating cost ratio generally indicates the level of

operating cost in generating the levels of revenue. The less the

operating cost in generating more revenue is good for the company.

In 2004-05 the trivandrum airports operating cost has jumped to 0.35

which is considered to be very high compared to the revenue. It has

bettered its performance by reducing it to 0.19 in the year 2005-06.

Which is an all t ime low ratio and indicates the best performance so

far.

CHART NO – 4.4.4

41

Page 42: A Study on Financial Analysis of Tri Van Drum Airport

0.2 0.21

0.35

0.19 0.2

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING OPERATING COST RATIO

RATIO

TABLE NO – 4.5

TABLE SHOWING REVENUE SECURITY EXPENSES RATIO

42

Page 43: A Study on Financial Analysis of Tri Van Drum Airport

FINANCIAL YEARSECURITY EXPENSES

TOTAL REVENUE

RATIO

2002-03 184.39 2,361.36 0.08

2003-04 273.89 2,671.43 0.10

2004-05 284.64 2,357.95 0.12

2005-06 316.80 3,584.98 0.09

2006-07 330.00 4406.75 0.07

INTERPRETATION

Highest ratio -- 0.12 during the year 2004-05.

Lowest ratio -- 0.07 during the year 2006-07.

This ratio shows an increase from the year 2002-03 to 2004-

05. The ratio earned in the year 2004-05 is the highest mainly

because the revenue earned during that year is comparatively very

less. The lower the ratio the better the performance.

CHART NO – 4.5.5

43

Page 44: A Study on Financial Analysis of Tri Van Drum Airport

0.08

0.1

0.12

0.09

0.07

0

0.02

0.04

0.06

0.08

0.1

0.12

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING REVENUE SECURITY EXPENSE RATIO

RATIO

TABLE NO – 4.6

44

Page 45: A Study on Financial Analysis of Tri Van Drum Airport

TABLE SHOWING DEPRECIATION COST RATIO

FINANCIAL YEAR DEPRECIATION TOTAL REVENUE RATIO

2002-03 628.34 2,361.36 0.27

2003-04 595.88 2,671.43 0.22

2004-05 806.71 2,357.95 0.34

2005-06 694.18 3,584.98 0.19

2006-07 720.00 4406.75 0.16

INTERPRETATION

Highest ratio -- 0.34 during the year 2004-05.

Lowest ratio -- 0.16 during the year 2006-07.

This ratio shows an decline from the year 2002-03 to 2003-04.

The ratio earned in the year 2004-05 is the highest mainly because

the revenue earned during that year is comparatively very less. The

lower the ratio the better the performance.

45

Page 46: A Study on Financial Analysis of Tri Van Drum Airport

CHART NO – 4.6.6

0.27

0.22

0.34

0.19

0.16

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING DEPRECIATION COST RATIO

RATIO

46

Page 47: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.7

TABLE SHOWING ADMINISTRATIVE COST RATIO

FINANCIAL YEAR

ADMINISTRATIVE COST

TOTAL REVENUE RATIO

2002-03 140.83 2,361.36 0.06

2003-04 179.95 2,671.43 0.07

2004-05 205.87 2,357.95 0.09

2005-06 256.21 3,584.98 0.07

2006-07 237.00 4406.75 0.05

INTERPRETATION

Highest ratio -- 0.09 during the year 2004-05.

Lowest ratio -- 0.05 during the year 2006-07.

Average ratio -- 0.07

The administrative cost ratio is almost steady in all the years

with not much difference between the average ratio and the

lowest/highest ratio. As such this ratio in respect of Trivandrum

airport is within control and is acceptable.

47

Page 48: A Study on Financial Analysis of Tri Van Drum Airport

CHART NO – 4.7.7

0.06

0.07

0.09

0.07

0.05

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING ADMINISTRATIVE COST RATIO

RATIO

48

Page 49: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.8

TABLE SHOWING NET PROFIT RATIO

FINANCIAL YEAR

NET PROFIT TOTAL

REVENUERATIO

2002-03 (458.72) 2,361.36 (0.19)

2003-04 (297.62) 2,671.43 (0.11)

2004-05 (1,002.88) 2,357.95 (0.43)

2005-06 (54.59) 3,584.98 (0.02)

2006-07 512.25 4406.75 0.12

INTERPRETATION

Highest ratio -- 0.12 during the year 2006-07.

Lowest ratio -- (0.02) during the year 2005-06.

The Trivandrum airport is continuously on a loss form the year

2002-03 to 2005 -06. There has been a profit of 0.12 in the year

2006-07. This shows that the company is improving its performance.

The highest loss was in the year 2004-05 mainly due to the major

49

Page 50: A Study on Financial Analysis of Tri Van Drum Airport

building maintenance work executed by the airport, which is done

once in 5 years.

CHART NO – 4.8.8

-0.19

-0.11

-0.43

-0.02

0.12

-0.5

-0.4

-0.3

-0.2

-0.1

0

0.1

0.2

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING NET PROFIT RATIO

RATIO

50

Page 51: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.9

TABLE SHOWING WORKING CAPITAL TURNOVER RATIO

FINANCIAL YEARTOTAL

REVENUENET-WORKING

CAPITALRATIO

2002-03 2,361.36 584.08 4.04

2003-04 2,671.43 745.92 3.58

2004-05 2,357.95 1,454.08 1.62

2005-06 3,584.98 1,325.75 2.70

2006-07 4406.75 4542.37 0.97

INTERPRETATION

Highest ratio -- 4.04 during the year 2002-03.

Lowest ratio -- 0.97 during the year 2004-05.

51

Page 52: A Study on Financial Analysis of Tri Van Drum Airport

The table shows that the working capital turnover ratio is on a

decreasing trend from 2002-03 to 2004-05. The higher the ratio the

better is the performance of the company.

CHART NO – 4.9.9

52

Page 53: A Study on Financial Analysis of Tri Van Drum Airport

4.04

3.58

1.62

2.7

0.97

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING WORKING CAPITAL TURNOVER RATIO

RATIO

TABLE NO – 4.10

53

Page 54: A Study on Financial Analysis of Tri Van Drum Airport

TABLE SHOWING DEBTORS TURNOVER RATIO

FINANCIAL YEAR

TOTAL REVENUE DEBTORS RATIO

2002-03 2,361.36 576.81 4.09

2003-04 2,671.43 586.38 4.56

2004-05 2,357.95 381.56 6.18

2005-06 3,584.98 461.87 7.76

2006-07 4406.75 513.29 8.59

INTERPRETATION

Highest ratio -- 8.59 during the year 2006-07.

Lowest ratio -- 4.09 during the year 2002-03.

The above table indicates that the sundry debtors turnover

ratio is on an increase from the year 2002-03 to 2006-07. The

highest the ratio the better it is since it would indicate that debts are

being collected more promptly.

CHART NO – 4.10.10

54

Page 55: A Study on Financial Analysis of Tri Van Drum Airport

4.094.56

6.18

7.76

8.59

0

1

2

3

4

5

6

7

8

9

Ratio

2002-03 2003-04 2004-05 2005-06 2006-07

Date

CHART SHOWING DEBTORS TURNOVER RATIO

RATIO

TABLE NO – 4.11

55

Page 56: A Study on Financial Analysis of Tri Van Drum Airport

TABLE SHOWING COMPARATIVE INCOME AND EXPENDITURE STATEMENT

FOR THE YEAR 2002-03 AND 2003-04.

PARTICULARS 2002-03 2003-04

ABSOLUTE INCREASE OR DECREASE IN

2003-04

PERCENTAGE INCREASE OR DECREASE IN

2003-04I N C O M EA.TRAFFIC REVENUE1.Landing and parking charges 1119.55 1,310.58 191.03 17.062.Passenger service fee 663.30 700.00 36.7 5.53TOTAL (A) 1782.85 2010.58 227.73 12.77

C.NON-TRAFFIC REVENUE

1.Public admission fee 36.40 32.56 (3.84) (10.55)

2.Trading concession 267.83 284.51 16.68 6.23

3.Rent and services 172.51 201.43 28.92 16.76

4.Miscelleneous 101.77 142.35 40.58 39.87

5.Interest on investment - - - -

TOTAL ( C ) 578.51 660.85 82.34 14.23

TOTAL REVENUE : A+B+C 2361.36 2671.43 310.07 13.13

E X P E N D I T U R E

STAFF COST

1.Pay and allowances 1383.60 1,351.40 (32.2) (2.33)Pay and allowance & other staff benefit

1383.60 1351.40 (32.2) (2.33)

2.Repair and maintenance 239.12 298.80 59.68 24.963.Consumption of stores and spares

27.38 28.24 0.86 3.14

4.Electricity and water 216.42 240.89 24.47 11.31

5.Other expenses 140.83 179.95 39.12 27.78

TOTAL OTHER EXPENSES 623.75 747.88 124.13 19.901

6.Depreciation 628.34 595.88 (32.46) (5.17)

7.Financial charges - - - -

8.Security expenses 184.39 273.89 89.5 48.54

TOTAL EXPENDITURE 2820.08 2969.05 148.97 5.28

PROFIT BEFORE TAX (458.72) (297.62) (16.11) 35.12

56

Page 57: A Study on Financial Analysis of Tri Van Drum Airport

INTERPRETATION

The table shows that when comparing the income and

expenditure of the year 2003 and 2004 there has been a percentage

increase of 13.13 in the revenue and a percentage increase of 5.28

in the expenditure. The profit has also increased by 35.12 percent.

57

Page 58: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.12

TABLE SHOWING COMPARATIVE INCOME AND EXPENDITURE

STATEMENT FOR THE YEAR 2003-04 AND 2004-05

PARTICULARS 2003-04 2004-05

ABSOLUTE INCREASE

OR DECREASE IN 2003-04

PERCENTAGE INCREASE OR DECREASE IN

2003-04

I N C O M EA.TRAFFIC REVENUE1.Landing and parking charges 1,310.58 1,262.98 (47.60) (3.63)2.Passenger service fee 700.00 400.00 (300) (42.86)

TOTAL (A) 2010.58 1662.98 (347.6) (17.29)C.NON-TRAFFIC REVENUE

1.Public admission fee 32.56 29.69 (2.87) (8.81)2.Trading concession 284.51 320.60 36.09 12.683.Rent and services 201.43 192.52 (8.91) (4.42)4.Miscelleneous 142.35 152.16 9.81 6.895.Interest on investment - - -

TOTAL ( C ) 660.85 694.97 34.12 5.16

TOTAL REVENUE : A+B+C 2671.43 2357.95 (13.48) (0.504)

E X P E N D I T U R E

STAFF COST

1.Pay and allowances 1,351.40 1,508.96 157.56 11.66Pay and allowance & other staff benefit

1351.40 1508.96 157.56 11.66

2.Repair and maintenance 298.80 544.10 245.30 82.103.Consumption of stores and spares

28.24 37.50 9.26 32.79

4.Electricity and water 240.89 257.69 16.80 6.975.Other expenses 179.95 205.87 25.92 14.40

TOTAL OTHER EXPENSES 747.88 1045.16 297.28 39.75

6.Depreciation 595.88 806.71 210.83 35.387.Financial charges - -8.Security expenses 273.89 - (273.89) (100)

TOTAL EXPENDITURE 2969.05 3360.83 391.78 13.20

PROFIT BEFORE TAX (297.62) (1002.88) (705.26) 236.97

58

Page 59: A Study on Financial Analysis of Tri Van Drum Airport

INTERPRETATION

The table shows that when comparing the income and

expenditure of the year 2004 and 2005 there has been a percentage

decrease of 0.504 in the revenue and a percentage increase of

13.20 in the expenditure. The profit has also increased by

236.97percent.

59

Page 60: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.13

TABLE SHOWING COMPARATIVE INCOME AND EXPENDITURE

STATEMENT FOR THE YEAR 2004-05 AND 2005-06

PARTICULARS2004-05 2005-06

ABSOLUTE

INCREASE OR

DECREASE IN 2003-

04

PERCENTAGE INCREASE OR DECREASE IN

2003-04

I N C O M EA.TRAFFIC REVENUE

1.Landing and parking charges 1,262.98 1,398.38 135.40 10.72 2.Passenger service fee 400.00 1378.55 978.55 244.64

TOTAL (A) 1662.98 2776.93 1,113.95 66.99C.NON-TRAFFIC REVENUE

1.Public admission fee 29.69 - (29.69) (100)! 2.Trading concession 320.60 322.34 1.74 0.54 3.Rent and services 192.52 197.74 5.22 2.71 4.Miscelleneous 152.16 287.46 135.30 88.92 5.Interest on investment -

TOTAL ( C ) 694.97 807.54 112.57 16.20TOTAL REVENUE : A+B+C 2357.95 3584.47 1,226.52 52.02

E X P E N D I T U R E

STAFF COST

1.Pay and allowances 1508.96 1678.96 170.00 11.27Pay and allowance & other staff benefit

1508.96 1678.96170.00 11.27

2.Repair and maintenance 544.10 312.86 (231.24) (42.50) 3.Consumption of stores and

spares37.50 39.14

1.64 4.37 4.Electricity and water 257.69 328.99 71.30 27.67 5.Other expenses 205.87 268.13 62.26 30.24

TOTAL OTHER EXPENSES 1045.16 949.12 (96.04) (9.19) 6.Depreciation 806.71 694.18 (112.53) (13.95) 7.Financial charges - - - - 8.Security expenses - 316.80 316.80 100

TOTAL EXPENDITURE 3360.83 3639.06 278.23 8.28PROFIT BEFORE TAX (1002.88) (54.56) 948.32 (94.56)

60

Page 61: A Study on Financial Analysis of Tri Van Drum Airport

INTERPRETATION

The table shows that when comparing the income and

expenditure of the year 2005 and 2006 there has been a percentage

increase of 52.02 in the revenue and a percentage increase of 8.28

in the expenditure. The profit has also decreased by 94.56 percent.

61

Page 62: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.14

TABLE SHOWING COMPARATIVE INCOME AND EXPENDITURE

STATEMENT FOR THE YEAR 2005-06 AND 2006-07

PARTICULARS2005-06 2006-07

ABSOLUTE INCREASE

OR DECREASE IN 2003-04

PERCENTAGE INCREASE OR DECREASE IN

2003-04

I N C O M EA.TRAFFIC REVENUE

1.Landing and parking charges 1,398.38 1817.50 419.12 29.97 2.Passenger service fee 1378.55 1648.25 269.70 19.56

TOTAL (A) 2776.93 3465.75 688.82 24.81C.NON-TRAFFIC REVENUE

1.Public admission fee - 23.00 23.00 100 2.Trading concession 322.34 443.00 120.66 37.43 3.Rent and services 197.74 232.00 34.26 17.33 4.Miscelleneous 287.46 243.00 -44.46 (15.47) 5.Interest on investment - - - -

TOTAL ( C ) 807.54 941.00 133.46 16.53

TOTAL REVENUE : A+B+C 3584.47 4406.75 822.28 22.94

E X P E N D I T U R E

STAFF COST

1.Pay and allowances 1678.96 1711.50 32.54 1.94Pay and allowance & other staff benefit

1678.96 1711.50 32.54 1.94

2.Repair and maintenance 312.86 482.50 169.64 54.22 3.Consumption of stores and

spares39.14 48.50 9.36 23.91

4.Electricity and water 328.99 364.50 35.51 10.79 5.Other expenses 268.13 237.50 -30.63 (11.42)

TOTAL OTHER EXPENSES 949.12 1133.00 183.88 19.37

6.Depreciation 694.18 720.00 25.82 3.72 7.Financial charges - - - - 8.Security expenses 316.80 330.00 13.20 4.17

TOTAL EXPENDITURE 3639.06 3894.50 255.44 7.02

PROFIT BEFORE TAX (54.56) 512.5 567.06 (1039.33)

62

Page 63: A Study on Financial Analysis of Tri Van Drum Airport

INTERPRETATION

The table shows that when comparing the income and

expenditure of the year 2006 and 2007 there has been a percentage

increase of 22.94 in the revenue and a percentage increase of 7.02

in the expenditure. The profit has also decreased by 1039.33

percent.

63

Page 64: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.15

DU PONT CONTROL TABLE FOR THE YEAR 2002-03

Particulars Amount

Current asset 1731.34

Current l iabil i ty 1147.26

Fixed asset 4984.57

Sales 2361.36

Administration sell ing and distribution

expenses

140.83

Working capital 584.08

Capital employed 5568.65

Expenses 140.83

Net profit 2220.53

Net profit ratio 0.94

Capital turnover 0.42

Return on investment 0.39

64

Page 65: A Study on Financial Analysis of Tri Van Drum Airport

CHART NO – 4.15.11

DU PONT CONTROL CHART FOR THE YEAR 2002-03

0.39

0.42 0.94

4984.57

65

5568.65 2220.532361.362361.36

584.08 140.83 2361.36

1731.34 1147.26 140.83

Page 66: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.16

DU PONT CONTROL TABLE FOR THE YEAR 2003-04

Particulars Amount

Current asset 1843.16

Current l iabil i ty 1097.24

Fixed asset 5277.11

Sales 2671.43

Administration sell ing and distribution

expenses

179.95

Working capital 745.92

Capital employed 6023.03

Expenses 179.95

Net profit 2491.48

66

Page 67: A Study on Financial Analysis of Tri Van Drum Airport

Net profit ratio 0.93

Capital turnover 0.44

Return on investment 0.41

CHART NO – 4.16.12

DU PONT CONTROL CHART FOR THE YEAR 2003-04

67

0.41

6023.03 2491.482671.43

0.44 0.93

2671.43

1843.16 1097.24 179.95

5277.11 745.92 179.95 2671.43

Page 68: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.17

DU PONT CONTROL TABLE FOR THE YEAR 2004-05

Particulars Amount

Current asset 2176.26

Current l iabil i ty 722.18

Fixed asset 5116.69

Sales 2357.95

Administration sell ing and distribution

expenses

205.87

Working capital 1454.08

Capital employed 6570.77

Expenses 205.87

Net profit 2291.08

Net profit ratio 0.97

Capital turnover 0.36

Return on investment 0.35

68

Page 69: A Study on Financial Analysis of Tri Van Drum Airport

CHART NO – 4.17.13

DU PONT CONTROL CHART FOR THE YEAR 2004-05

69

Page 70: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.18

DU PONT CONTROL TABLE FOR THE YEAR 2005-06

Particulars Amount

Current asset 2157.32

Current l iabil i ty 831.57

Fixed asset 7059.45

Sales 3584.98

Administration sell ing and distribution

expenses

256.21

Working capital 1325.75

Capital employed 8385.2

Expenses 256.21

Net profit 3328.77

70

Page 71: A Study on Financial Analysis of Tri Van Drum Airport

Net profit ratio 0.93

Capital turnover 0.43

Return on investment

CHART NO – 4.18.14

DU PONT CONTROL CHART FOR THE YEAR 2005-06

71

Page 72: A Study on Financial Analysis of Tri Van Drum Airport

TABLE NO – 4.19

DU PONT CONTROL TABLE FOR THE YEAR 2006-07

Particulars Amount

Current asset 3214.07

Current l iabil i ty 868.01

Fixed asset 7200.17

Sales 4406.75

72

Page 73: A Study on Financial Analysis of Tri Van Drum Airport

Administration sell ing and distribution

expenses

237.00

Working capital 2346.06

Capital employed 9546.23

Expenses 237.00

Net profit 4169.75

Net profit ratio 0.95

Capital turnover 0.46

Return on investment 0.44

CHART NO – 4.19.15

DU PONT CONTROL CHART FOR THE YEAR 2006-07

73

Page 74: A Study on Financial Analysis of Tri Van Drum Airport

FINDINGS

The current ratio of Trivandrum airport is on an increasing

trend except in the year 2005-06 it shows a slight decline.

74

Page 75: A Study on Financial Analysis of Tri Van Drum Airport

The Trivandrum airport has shown a tremendous performance

by reducing the ratio to 0.39 in the year 2006-07.

In 2004-0 the Trivandrum airports operating cost has jumped

to 0.35 which is considered to be very high compared to the

revenue.

The security expense ratio shows an increase from the year

2002-03 to 2004-05.

The depreciation cost ratio shows an increase from the year

2002-03 to 2004-05.

The administrative cost ratio is almost steady in all the years

with not much difference between the average ratio and the

lowest/highest ratio.

The Trivandrum airport is continuously on a loss form the year

2002-03 to 2005 -06. There has been a profit of 0.12 in the

year 2006-07.

The working capital turnover ratio is on a decreasing trend

from 2002-03 to 2004-05.

The sundry debtor’s turnover ratio is on an increase from the

year 2002-03 to 2006-07.

In comparison to the revenue, the expenditure was more

during the last 4 years and in the year 2006-07, it appears that

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Trivandrum airport has come out of red and started to make

profits.

SUGGESTIONS

A reduction in the staff cost and operating cost can increase the revenue.

The depreciation cost ratio can be increased by increasing the revenue

It is also learnt that some more airlines like Paramount Airways, Air

Sahara, Kingfisher Airlines, Go Air etc. are going to start their operations

from Trivandrum airport very soon. This will result in more revenues for

the Trivandrum airport and its financial position appears to be fatter than

ever before

To focus on the likely avenues for generation of additional revenue for the

investors.

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CONCLUSION

From the above analysis it is seen that compared to the last

four years there has been an increase in the profit. It can be said

that the Trivandrum airport is running in a profit compared to the

previous years. The profit can be further increased by focusing more

on increasing the revenue and also reducing the expenditure at the

same time.

The revenue can be increased by:

By concentrating on earning non-aeronautical revenue (non-

traff ic revenue) by building good hotels, business centers,

shopping malls, multiplexes in the airport complex so that a

visit to airport by any one proves an enjoyable experience and

at the same time it gives good revenue to the Service

Provider.

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The more the aircraft movement, the more is the revenue for

the airports. At this juncture, the addit ional investments made

are definitely going to yield addit ional revenue for the airports.

ANNEXURE

PARTICULARS 2002-03

2003-04 2004-05 2005-06 2006-07

I N C O M EA.TRAFFIC REVENUE

1.Landing and parking charges 1119.55

1,310.58

1,262.98

1,398.38

1817.5

2.Passenger service fee 663.3 700 400 1378.55 1648.25TOTAL (A) 1782.8

52010.58 1662.98 2776.93 3465.75

C.NON-TRAFFIC REVENUE1.Public admission fee 36.4 32.56 29.69 - 23

2.Trading concession 267.83 284.51 320.6 322.34 443 3.Rent and services 172.51 201.43 192.52 197.74 232 4.Miscelleneous 101.77 142.35 152.16 287.46 243 5.Interest on investment - - - - -

TOTAL ( C ) 578.51 660.85 694.97 807.54 941TOTAL REVENUE : A+B+C 2361.3

62671.43 2357.95 3584.47 4406.75

E X P E N D I T U R ESTAFF COST

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1.Pay and allowances1383.6

1,351.40

1,508.96

1678.96 1711.5

Pay and allowance & other staff benefit

1383.6 1351.4 1508.96 1678.96 1711.5

2.Repair and maintenance 239.12 298.8 544.1 312.86 482.5 3.Consumption of stores and spares 27.38 28.24 37.5 39.14 48.5 4.Electricity and water 216.42 240.89 257.69 328.99 364.5 5.Other expenses 140.83 179.95 205.87 268.13 237.5

TOTAL OTHER EXPENSES 623.75 747.88 1045.16 949.12 1133 6.Depreciation 628.34 595.88 806.71 694.18 720 7.Financial charges - - - - - 8.Security expenses 184.39 273.89 - 316.8 330

TOTAL EXPENDITURE 2820.08

2969.05 3360.83 3639.06 3894.5

PROFIT BEFORE TAX-458.72 -297.62

-1002.88

-54.56 512.5

GG111 LAND FREEHOLD INCLUDING LAND DEVELOP.EXP

68,229,421.93

GG211 RUNWAYS 97,878,560.45

GG212 TAXIWAYS 32,336,547.22

GG213 APRONS 90,810,890.47

GG214 ROADS, BRIDGES & CULVERTS-OPS AREA 45,077,357.71

GG311 TERMINAL BUILDING 134,874,581.66

GG312 BUILDING ON THE OPERATIONAL AREA 28,998,711.94

GG313 CARGO COMPLEX 662,441.77

GG317 RESIDENTIAL BLDG. - TYPE A 244,000.00

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GG321 OTHER BUILDINGS - UNCLASSIFIED 17,772,409.50

GG411 BUILDING TEMPORARY 2,197,067.16

GG412 PURELY TEMPORARY WOODEN STRUC 13,000.00

GG511 SECURITY FENCING 8,212,104.87

GG711 PLANT & MACHINERY - GENERAL 403,888.41

KK411 AMT. RECOVERABLE FROM CLIENTS-IN INDIA 1823264.43

KK512 AMOUNT DUE FROM VARIOUS AIRLINES 35357097.75

KK513 AMOUNT DUE FROM PVT. PARTIES 4780587.91

KK514 AMOUNT DUE FROM OTHERS 4226268.83

LL111 CASH & STAMP IN HAND - IN INDIA 39427.00

LL113 CASH AT COUNTERS 7196.00

LL212 CHEQUES IN HAND 7501716.87

LL213 CASH WITH BANK CANARA BANK(DISBURSEMENT)

12750893.64

LL214 CASH WITH BANK CANARA BANK (REVENUE) 6887.00

MM111 HOUSE BUILDINGS/PURCHASE LOANS 82785158.00

MM112 MOTOR CAR LOAN 6511919.00

MM113 MOTOR CYCLE LOAN 3264601.00

MM116 COMPUTER ADVANCE 7108419.00

MM131 FESTIVAL ADVANCE 381600.00

MM133 TRAVELLING ADVANCE 678100.00

MM134 L.T.C. ADVANCE 537474.00

MM135 MEDICAL ADVANCE 48851.00

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MM191 MISCELLANEOUS ADV. TO STAFF 12394.00

MM211 ADV. TO SUPPLIERS - IN INDIA 2529.00

MM342 INCOME ACCURED BUT NOT RECEIVED 9318754.00

MM512 DEPOSITS WITH STATE ELECT. BOARDS 39458095.00

MM551 MISECELLANEOUS DEPOSITS 1024822.00

DD111 LIABILITY FOR GOODS SP/WORKDONE-CAPITAL 15581912.1

DD112 LIABILITY FOR GOODS SP/WORKDONE-REVENUE

15618172.38

DD211 LIABILITY FOR PAY & ALLW UNPAID WAGES 13507984

DD215 LIABILITY FOR REPAIRS & MAINT. 13455689

DD216 LIABILITY FOR ANTI-HIJACKING EXP 5014949

DD219 LIABILITY FOR OTHER EXPENSES. 187326

DD311 TAX DEDUCTED AT SOURCE CONTRACTORS 158526

DD319 WORKS CONTRACT SALES TAX 97099

DD321 WORKER'S WELFARE CESS FUND 141379

DD329 SERVICE TAX BILLED NOT RECEIVED 1201191

DD411 EMD - WORKS & SUPPLIES 1756394

DD412 EMD - COMMERCIAL CONTRACTS 312596

DD413 SECURITY DEPOSITS - WORKS & SUPPLIES 5851086

DD414 SECURITY DEPOSITS - COMMERICIAL CONTRACT

3456429.2

DD431 MISC DEPOSITS 6273418

DD611 INCOME RECEIVED IN ADVANCE BUT NOT DUE 188798.28

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BIBLIOGRAPHY

Khan M Y and Jain P K, “ Management Accounting”, Tata

Mc Graw Hil l 3 r d edit ion

Maheshwari S N, “ Principles of management accounting”,

Sultan Chand and sons.

www.airportsindia.org.in

www.aai.aero

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