A Study On Break Even Analysis And Computation Of Ratio Analysis With Special Reference To Simta Machinery Manufacturing Private Limited

• Author(s):

  SYED IBRAHIM J | Felisiya.M

• Keywords:

  Break-even Analysis, Ratio Analysis, Financial Stability, Operational Efficiency, Cost Management.

• Abstract:

  This Study Evaluates Break-even Analysis And Ratio Analysis Within The Framework Of Financial Performance Management At Simta Machinery Manufacturing Private Limited. The Research Investigates The Organization’s Financial Stability, Profitability, And Operational Efficiency Through These Analytical Tools, Emphasizing Their Impact On Strategic Decision-making. Break-even Analysis Identifies The Sales Volume Needed To Cover Fixed And Variable Costs, Offering Insights Into Cost Control And Pricing Strategies. Meanwhile, Ratio Analysis, Using Metrics Such As Liquidity, Solvency, And Profitability Ratios, Examines The Company's Financial Health And Performance Relative To Industry Benchmarks. Secondary Data, Including Balance Sheets And Audit Reports From The Past Three Years, Forms The Research Basis. The Findings Reveal A Robust Financial Position, With Simta Machinery Demonstrating Strong Liquidity Levels And Conservative Debt Management. The Current Ratio Consistently Exceeds The Standard Benchmark Of 1.5, And The Quick Ratio Shows A Marked Improvement Over Time, Reaching 1.30 In The Most Recent Fiscal Year. Debt Metrics, Such As The Debt-equity Ratio And Debt Ratio, Indicate Minimal Financial Risk, Reflecting A Prudent Financial Strategy. Operational Efficiency Is Evidenced By An Improved Inventory Turnover Ratio And A Reduced Break-even Point, Showcasing Better Inventory Management And Cost Efficiency. Notably, Profitability Metrics Such As The Operating Profit Ratio And Net Profit Ratio Show Significant Recovery In The Latest Year, Underscoring Enhanced Revenue Generation And Cost Optimization. Despite These Strengths, Areas For Improvement Include Receivables Turnover Ratio, Which Suggests Scope For Better Credit And Collection Practices. The Study’s Recommendations Advocate For Advanced Inventory Management Techniques, Streamlined Credit Policies, And Sustained Efforts To Enhance Profitability. Additionally, It Highlights The Importance Of Technology Adoption To Support Data-driven Decision-making And Operational Enhancements. By Leveraging Financial Ratios And Break-even Analysis, This Research Contributes Actionable Insights Into Simta Machinery’s Financial Practices, Aligning Its Strategies With Goals Of Sustainable Growth And Resilience. These Tools Collectively Reinforce The Company’s Ability To Navigate Competitive Market Dynamics And Drive Long-term Success.

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Other Details

• Paper id:

  IJSARTV11I4103143

• Published in:

  Volume: 11 Issue: 4 April 2025

• Publication Date:

  2025-04-15

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