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Financial analysis of co-operative marketing federations--a comparative study of MARKFED and HAFED.

Introduction

Agriculture is the backbone of the Indian economy. In India, agricultural development is a precondition for the national prosperity. So, each and every aspect of agriculture should be developed. Agricultural marketing occupies an important place in the perspective of agricultural development in India. Marketing of agricultural produce is considered as an integral part of agriculture. Agricultural marketing covers the services involved in moving an agricultural product from the farm to the consumer. Various development activities in agriculture are now carried on through co-operatives. The role of co-operatives and their contribution to agricultural progress has particularly been significant. The co-operative agricultural marketing system is playing an important role in agricultural marketing through co-operative marketing societies. These societies are formed by the farmers on the basis of mutual trust for the sale of their produce and purchase of various inputs. These societies perform variety of functions like they sell the products of their members at the appropriate prices and at appropriate time, offer storage facility to the members, provide information related to market price, provide necessary inputs, etc. The co-operative marketing societies have both two-tier and three-tier structure. In a two-tier pattern there is primary marketing societies at taluka level and state marketing federation as an apex body at the state level whereas in three-tier system along with the primary marketing societies and state marketing federation there occurs district marketing society in the middle. The state marketing federation serves the state as a whole. Their members are both the primary co-operative marketing societies and the central co-operative unions of the state. The basic function of these is to coordinate the activities of the affiliated societies and conduct such activities as inter-state trade, export-import, procurement, distribution of inputs and essential consumer goods, dissemination of market information and rendering expert advice on the marketing of agricultural produce. In the states of Punjab and Haryana, The Punjab State Cooperative Supply and Marketing Federation (MARKFED) and The Haryana State Cooperative Supply and Marketing Federation (HAFED) are playing an important role in building up an integrated structure for remunerative marketing and storing of agricultural produce. These federations are engaged in the various activities like supply of agricultural inputs to the farmers, storage and procurement of food grains, processing, marketing of variety of products, import and export of agriculture produce and other consumer goods etc. Financial efficiency is recognized as an important dimension for such organisations which are engaged in trade of commodities. Hence, it becomes significant to analyse the financial performance and the financial health of the MARKFED and the HAFED. It is with these considerations in view that the present paper has been undertaken.

An Overview of MARKFED and HAFED

The MARKFED is an Apex Co-operative Marketing Federation of Punjab and is the largest marketing co-operative in Asia. It was set up in 1954. MARKFED provides innumerable services to the farmers in terms of procurement, storage, processing and marketing of agricultural produce, formulation of high quality agrochemicals, soil and water sample testing through mobile laboratories for optimum use of fertilizers to increase farm productivity and processing and marketing of high quality edible products like basmati rice, canned products etc. in domestic and international markets. Products marketed by the federation include--Canned products, Bottled products, Agro chemicals, Edible/Refined oils, Animal feeds and Rice. MARKFED has been declared as the nodal agency of Punjab for the exports of fruits, vegetables and food grains by the Government of India. MARKFED has also been awarded National Productivity Awards in various fields like co-operative marketing activities, food processing, cattle feed production etc.

The HAFED is the largest apex co-operative federation in the State of Haryana. It was established on 1st November 1966. It is playing a leading role in serving the farmers of the State as well as the customers in India and overseas by providing hygienic and safe quality consumer products. The main objectives of the HAFED are- supply of agricultural inputs like fertilisers, insecticides, pesticides, certified seeds etc.; making arrangements for marketing, processing of agricultural and allied products and facilitating the working of affiliated co-operative societies. So, the operations of the HAFED include- purchase/manufacturing/distribution of agri- inputs, procurement/sale of agri-produce, preservation of agri-wealth, agri-processing for value addition and marketing of consumer products. Products marketed by HAFED include consumer products, pesticides/ agro chemicals and cattle feeds. HAFED has also received various certifications like: 9001:2000 Quality Management Certifications for its processing units, warehouses and marketing offices and Food Safety Warranty for its oil mills and rice mills.

Review of Literature

Rayudu (1985) in his paper titled, "Ratio Analysis and Financial Performance" examined the financial performance and the financial operations of industrial co-operatives with reference to six co-operative spinning mills located in the state of Andhra Pradesh through tool of ratio analysis and by studying financial structure and asset structure pattern during the period from 1977-78 to 1981-82. The study found that the government contributed bulk of share capital, liquidity position of the mills was not satisfactory as the mills were unable to meet all current obligations immediately, heavy dependence of mills on outsider's funds and losses in mills.

Murthy and Nagabhushanam (1990) in their research paper titled, "Performance of MARKFED, Karnataka--An Economic Analysis", evaluated the performance of the MARKFED during the period of 25 years from 1960-61 to 1984-85, which was divided into four sub-periods i.e. Pre -Green Revolution Period (PRE-GRP 1960-61 to 1966-67), Green Revolution Period (GRP1967-68 to 1972-73), Post-Green Revolution Period (POST -GRP1973-74 to 1978-79), Extended Post-Green Revolution Period (E-POST-GRP 1979-80to 1984-85). Physical indicators (membership, depots and recruitment) and financial indicators (share capital, owned funds, total assets, long-term investments, fixed assets, working capital, total liabilities, sales etc.) were selected. Financial ratio analysis was used to test solvency, liquidity, profitability, turnover, efficiency and strength. The study revealed substantial increase in both physical and financial indicators during the period, but operational efficiency of the federation was found unsatisfactory. The gross ratio was fluctuating and the net profit to total assets ratio indicated that the total assets of the federation had grown faster than profits. The study viewed that the federation was adhering to service motto.

Abraham and Ajjan (1996) in their research paper titled, "An Analysis of Performance of Tamil Nadu Cooperative Marketing Federation" studied the performance of TANFED during 1982-83 to 1991-92 and projected its performance to 2000 A.D. The variables selected to analyze the performance were total share capital, working capital, value of agricultural product transacted, value of fertilizers sold and value of other agricultural inputs transacted namely seeds, pesticides and agricultural implements and profits earned through these transactions. The growth rate figures indicated that in coming years TANFED would emerge as a major supplier of agricultural implements, seeds and pesticides and the study suggested to strengthen its activities in above mentioned areas.

Rao, Joseph and Vanniarajan (2004) in their research paper "Predicting Corporate Failures: A Study of Selected Sugar Mills in Tamil Nadu" analysed the financial performance of sugar mills in Tamil Nadu. The study was based on secondary data covering period of ten years from 1993-94 to 2002-03. The three sugar mills from three different sectors i.e. public, private and co-operative were selected for the study. The data was examined by Altman Z-score analysis. It was found that the public sector sugar mill showed more consistent financial health as compared to the sugar mills of other two sectors. The sugar mill under co-operative sector was very weak and subject to very huge fluctuations inspite of highest average Z-score.

Jayachandra (2005) in his paper titled, "Financial Management in Cooperative Sugar Industry- A Case Study" studied financial management in sugar industry by selecting Kovur Cooperative Sugar Factory Ltd., Nellore, Andhra Pradesh during the period of five years from 1999-00 to 2003-04. The study examined fixed assets management, inventory management, cash management and profitability. The study was based on both primary and secondary data and was analysed with the techniques like ratio analysis, fund flow analysis, averages and percentages. It was revealed that amount of fixed assets increased but were not properly utilized, inventory formed major part in current assets, there were small proportion of cash and bank balances, liquidity position was not good and society was not in position to meet its obligation out of cash flows. It was also found that cost of production and selling and administrative expenses increased but in last two years (2003 and 2004) operating expenses were controlled so net operating profits were very high. It was recommended that society should do proper evaluation of investment proposals on fixed assets, proper cash planning, set up a purchase committee for inventory, raise funds through long term sources to reduce interest charges, control cost of production and operating expenses etc.

Dheenadhayalan and Devianbarasi (2009) in their research paper titled "Financial Health of Cooperative Sugar Mills--A Case Study of NPKRR Cooperative Sugar Mill Ltd." examined the financial health of Nadippisai Pulavar K.R. Ramasamy (NPKRR) Cooperative Sugar Mill in Tamil Nadu during the period of ten years from 1997-98 to 2006-07. The study was based on secondary sources of information and tools like ratios and Altman Z- score were used for analysis. The study found that the financial health of the sugar mill was very weak and was subject to huge fluctuations. The study suggested sugar mill to put efforts to improve financial condition to avoid financial distress and bankruptcy in the future.

Deswal, Mehra, Khandelwal and Kablana (2009) in their article examined the financial health of cooperative sugar mills in Tamil Nadu for the period 2002-03 to 2006-07. The study was based on secondary data and two sugar mills in the state of Tamil Nadu namely MRK Co-operative Sugar Mills Ltd. and NPKRR Co-operative Sugar Mills Ltd. were selected. Techniques used for analyzing the data was Z-score model, mean, standard deviation, co-efficient of variation and graphs. The study concluded that the financial condition of both the firms was not satisfactory however when compared with each other performance of MRK Co-operative Sugar Mills Ltd. was better than that of NPKRR Co-operative Sugar Mills Ltd.

Amuthan (2010) in his research paper titled "Performance of the Cuddalore District Central Cooperative Bank in Tamil Nadu--A Ratio Analysis" evaluated the financial performance of Cuddalore district central cooperative bank during the period 1998-99 to 2007-08. The study was based on secondary data and financial ratio analysis was used as tool to view the performance of bank. The key solvency, liquidity, efficiency, profitability and ratios of strength were calculated. Solvency and liquidity ratios revealed bank's inability to meet its short and long term obligation. Efficiency and profitability ratios also revealed inefficiency and less profit. The ratio of strength further indicated weakness as the ratio of net worth to total liabilities was below standard norm and the total assets were also not sufficient to satisfy the total liabilities of the bank throughout the study period.

Pillai and Johnson (2012) in their paper analysed the financial performance of Weavers' Co-operative Society Ltd. Kanhirode, Kerala in terms of both liquidity and solvency during the period from 2007-08 to 2010-11. The technique of ratios and averages was used for analysis. The study found fluctuating liquidity and solvency position due to the excess of current liabilities and high amount of borrowed funds. The study recommended to enhance the liquidity position of the society by improving status of its current assets and improving solvency position by increasing the share capital by attracting more members within the jurisdiction of the society.

Objectives of the Study

The main objectives of the present paper are:

1. To undertake the financial analysis of MARKFED and HAFED.

2. To examine and compare the financial health of MARKFED and HAFED.

Research Methodology

The study is based on secondary data collected from the annual reports and the annual accounts of MARKFED and HAFED. The period of study is from 2000-01 to 2010-11. The financial analysis of MARKFED and HAFED has been studied on the basis of various financial parameters of growth. The data has been analysed by using statistical tools like averages, standard deviation, coefficient of variation and T-Test. Edward Altman model, Z-score has been applied as multi discriminant analysis for studying the financial health of the federations. It uses weighted sum of five financial ratios in calculation of Z-score. The Z- score is calculated by multiplying each of several financial ratios by an appropriate coefficient and then summing the results. The model is defined as Z = 1.20(X1) +1.40(X2) + 3.30(X3) +0.60(X4) + 0.999(X5) where, X1= Net Working capital / Total Assets, X2 = Retained Earnings / Total Assets, X3= Earnings before Taxes / Total Assets, X4 = Book Value of Equity / Total Debt and X5 = Turnover/ Total Assets.

Interpretation of Z-score model

Category   Z-score value   Inference/Implications

I           Below 1.81     Distress Zone
                             /Bankruptcy zone
II           1.81-2.99     Grey Zone
III         Above 2.99     Safe Zone


Financial Analysis of MARKFED and HAFED

The financial analysis of MARKFED and HAFED has been studied on the basis of various financial indicators and financial ratios. Financial indicators are used to compare the financial position of the federations in absolute terms whereas financial ratios have been used to compare the financial position of the federations in relative terms. Financial indicators used are business turnover, fixed assets, investments, current assets, own funds, long term loans and current liabilities and financial ratios used are business turnover to total assets, fixed assets to total assets, investments to total assets, current assets to total assets, own funds to total assets, long term loans to total assets and current liabilities to total liabilities. Table 1 presents the financial analysis of MARKFED and HAFED during the period of study.

Business Turnover

Business turnover means revenue generated from business activities. The business turnover in the MARKFED has been obtained by taking sales/income/accretion plus purchases/expenses/decretion whereas in the HAFED business turnover includes sales (domestic and export), sales by transfer, sales by shortage, sales by gift/business promotion, sales by consumption, and gross bales issued on loan. There is significant difference between business turnover of MARKFED and HAFED at 5 per cent level of significance (t=6.446). Business turnover on an average of MARKFED is Rs. 1 1508.51crore and of HAFED is Rs. 3212.81 crore. Thus, the business turnover of MARKFED is significantly more as compared to HAFED.

The business turnover to total assets ratio indicates how efficiently the firm generates sales revenue on its assets. It basically indicates effectiveness in managing firm's assets. The table reveals that the mean value of the ratio in MARKFED is 2.820 whereas in HAFED it is 1.692. The ratio is significantly more in MARKFED as compared to HAFED which indicates that the MARKFED is more efficient in generating sales through its assets.

Fixed Assets

Fixed assets are the long-term tangible property of a federation and are used in the production of its income. The analysis reveals that there is significant difference between fixed assets of MARKFED and HAFED at 5 per cent level of significance (t=3.937). The fixed assets on an average in MARKFED and HAFED are Rs. 123.39 crore and Rs. 230.65 crore respectively. Fixed assets of HAFED are significantly more than of MARKFED.

The fixed assets to total assets ratio shows how much a federation depends on its fixed assets to run their business. The analysis reveals that the mean value of fixed assets to total assets ratio in HAFED is 0.115 which is more than MARKFED i.e. 0.032. This further indicates that HAFED is more dependent on fixed assets to run its business.

Investments are an asset or item purchased with the hope of generation in income in the future. Both MARKFED and HAFED are indulged in making investments in various institutions like Indian Farmers Fertiliser Cooperative Limited (IFFCO), Krishak Bharati Cooperative Limited (KRIBHCO), National Agricultural Cooperative Marketing Federation of India (NAFED) etc. Investments in MARKFED and HAFED are also significantly different at 5 per cent level of significance (t=11.851). The average value of investments in MARKFED is Rs. 8.09 crore and HAFED is Rs. 106.23 crore. Thus, amount of investments in HAFED are significantly more than in MARKFED.

Investment to total assets ratio reveals how efficiently a firm is using its total assets base to generate income. Table further reveals that the mean value of the ratio is in MARKFED is 0.002 whereas in HAFED it is 0.058. The ratio is significantly more in HAFED as compared to MARKFED which indicates the HAFED is investing more of its assets for future income.

Current assets are all assets that can readily be converted into cash in normal course of business, generally a period of one year to pay outstanding debts and cover liabilities without having to sell fixed assets. Current assets in MARKFED include inventories, debtors & other recoverable, cash and bank and others including loans & advances, security deposits, income tax paid & others and prepaid expenses & others whereas in HAFED current assets include inventories, debtors & other receivables, cash and bank balances and others which include loans and advances and deposits. There is significant difference between current assets of MARKFED and HAFED. The mean value of current assets in MARKFED and HAFED is Rs. 4575.90 crore and Rs.1962.93 crore respectively. The level of current asset in MARKFED is significantly more than in HAFED.

The current assets to total assets ratio represents the structure of assets and the amount in form of current assets invested in assets. The analysis further reveals that the MARKFED invests more funds in current assets as a part of total assets than HAFED. There is significant difference in the amount invested by both the federations in current assets as a part of total assets (t=5.147).

Own Funds

The own funds represent the total ownership funds of an enterprise. The own funds in the MARKFED include share capital, reserves and surplus, and profit and loss appropriation and in the HAFED include share capital, reserves and surplus, net profit and unappropriated profit. The analysis reveals that there is significant difference between own funds of MARKFED and HAFED at 5 per cent level of significance (t=5.20). The own funds on an average in MARKFED is Rs. 311.89 crores and HAFED are Rs. 517.96 crores. Thus, own funds of HAFED are significantly more than in MARKFED.

The own funds to total assets ratio indicates the relative proportion of own funds used to finance a company's assets. It measures the proportion of the total assets that are financed by stockholders and not creditors. The analysis reveals that the HAFED depends more on owner's funds to finance total assets than MARKFED. The mean value of the ratio in MARKFED is 0.086 and HAFED is 0.266.

Long- Term Loans

Long-term loans indicate payments to be done in a time period longer than one year. The amount of long term loans in MARKFED and HAFED are significantly different at 5 per cent level of significance. The mean value of long term loans is significantly more in HAFED as compared to MARKFED.

The long term loan to total assets ratio indicates the percentage of a federation's assets that are financed with loans and financial obligations lasting more than one year. Ratio further reveals that the HAFED depends more on long term loans to finance total assets than MARKFED. T--value of 4.885 indicates significant difference in the ratio of both the federations.

Current Liabilities

Current liabilities are federation's debts or obligations that are due within one year from the date of their inception. Current liabilities in the MARKFED include creditors, sundry payables, short term loans or cash credit against hypothecation on stocks, and other liabilities including provisions, security deposit and unclaimed payable. Current liabilities in the HAFED include are creditors, suppliers, short term borrowings and cash credit and others (which include reserve for doubtful debts, provisions, security receipts and expenses payables). The level of current liabilities in MARKFED and HAFED are significantly different at 5 per cent level of significance (t=3.150). The amount of current liabilities on an average in MARKFED is Rs. 4394.09 crore and HAFED is Rs. 1759.95 crore. Thus, the level of current liabilities in MARKFED is significantly more than in HAFED.

The current liabilities to total liabilities ratio measures the percentage of total current liabilities to total liabilities of a concern. The mean value of ratio in MARKFED is 0.914 and HAFED is 0.722. The ratio is more in MARKFED than HAFED.

Thus, the level of turnover, current assets and current liabilities are much higher in MARKFED than HAFED whereas HAFED has higher level of fixed assets, investments, own funds and long-term loans than MARKFED. The financial ratio analysis further reveals that the MARKFED is more concerned towards day to day working of the federation as it is maintain more current assets, current liabilities and uses assets efficiently in generating sales whereas the HAFED is more concerned with maintaining assets for future.

Financial Health of MARKFED and HAFED

Financial Health of MARKFED and HAFED through Z-score analysis during the period of study has been presented in tables II to IV and in graph 1.

Table-II reveals that the value of Z-score for the MARKFED was 1.8174 in the year 2000-01 and the firm was placed on the lower side of grey zone. In the next 3-4 years, working capital, earnings, equity and retained earnings of the MARKFED increased significantly. As a result, the value of Z-score showed continuous increase and grew to 5.5525 in the year 2004-05. This high value of Z-score in 2004-05 indicated that the federation was viable and healthy in 2004- 05. However, the federation showed a declining trend of Z-score values during the period 2004-05 to 2010-11. The value of Z-score declined to 2.225 in the year 2009-10 and further to 2.0288 in the year 2010-11. This decline in the value of Z-score is attributed mainly to decline in working capital and earnings simultaneously and also due to the higher rate of increase in total assets. The mean value of Z-score of the federation during the period of study is 3.0635 which indicates that the federation is financially very safe but the continuous declining trend is a major cause of concern. This needs immediate attention for the financial betterment of the federation.

Table-III reveals that the Z-score of HAFED declined from 1.1735 in 2000-01 to 0.9438 in 2001-02 indicating unhealthy financial position of the federation. In the next 2 years the value of the Z-score increased to 5.0766 in 2003-04 due to significant increase in working capital, retained earnings, equity and turnover. The value of Z-score in 2003-04 indicated a very healthy financial position of the federation. However, the federation showed a declining trend of Z-score values during the period 2003-04 to 2008- 09. The value of Z-score declined to 1.4496 in the year 2008- 09. This decline in the value of Z-score is attributed mainly to fluctuations in turnover, and higher rate of increase in the total assets. The value of Z-score increased in next 2 years to 1.8745 in 2010-11 but it was still on lower side of grey zone. Further, HAFED has the highest value of Z- score of 5.0766 in the year 2003-04 and lowest Z- score of 0.9438 in the year 2001-02 with an average Z score of 2.4903. The average value of Z-score indicates that the federation is financially safe but the continuous declining trend and lower value of Z-score is a major cause of concern. This needs immediate attention by the federation otherwise it will have adverse financial condition in coming years.

Table-IV and the graph 1 depicts the financial consistency of both the federations. The coefficient of variation of MARKFED and HAFED were 40.03 per cent and 51.81 per cent respectively which indicates that the financial health of both the federations was subjected to huge fluctuations. But when compared with each other the overall financial health of the MARKFED is better than the HAFED. But both the federations need to pay attention towards financial condition and exercise caution.

Concluding Observations

Both the MARKFED and the HAFED are engaged in numerous activities to fulfill the needs of farmers and to satisfy the consumers. Financial efficiency is an important aspect of these organisations as these are continuously engaged in the trade of commodities. The financial analysis reveals that the selected variables have their respective separate identities in both the federations and there is significant difference in the financial position of the MARKFED and the HAFED on the basis of various financial indicators. The MARKFED has high level of members, turnover, current assets and current liabilities than HAFED whereas the HAFED has high level of fixed assets, investments, own funds and long-term loans than MARKFED. This indicates that MARKFED is more concerned towards day to day working of the federation whereas HAFED is more concerned with maintaining assets for future. The study further revealed that the financial condition of MARKFED is better than that of HAFED. But both the federations need to pay attention towards their financial condition and take effective measures to secure present as well as future of the concerns.

References

Abraham, Jaya, Anitha., & Ajjan, N. (1996, January). An analysis of performance of Tamil Nadu cooperative marketing federation during 1982-83 to 1991-92. Indian Cooperative Review, 33(3), 291-294.

Amuthan, N. (2010, January). Performance of the cuddalore district central cooperative bank in Tamil Nadu-A Ratio Analysis. Indian Cooperative Review, 47(3), 157-162.

Annual reports and Annual accounts of MARKFED and HAFED.

Chandra, Prasanna (2006). Fundamentals of financial management (6th ed.). New Delhi: Tata Mcgraw-Hill Publishing Company Limited.

Deswal, Jasbir., Mehra, Salander., Khandelwal, Vikas., & Kablana, Anand Singh (2009, December 27-29). Financial Health of Cooperative Sugar Mills in Tamil Nadu A Micro Study. The Professional Banker, The Icfai University Press.

Dheenadhayalan, V., & Devianbarasi, R. (2009, January). Financial health of cooperative sugar mills--A case study of NPKRR cooperative sugar mill Ltd. Indian Cooperative Review, 46(3) 192-197.

Gupta, S.P (2008). Statistical methods. New Delhi: Sultan Chand & Sons.

Jayachandra, K. (2005, October). Financial management in cooperative sugar industry- A case study. Indian Cooperative Review, 43 (2), 555-562.

Kothari, C.R. (2004). Research methodology: Methods & techniques. New Delhi: New Age International (P) Limited. Publishers.

Murthy, H.G. Shankara., & Nagabhushanam, T.D.J (1990, October). Performance of Markfed, Karnataka--An economic analysis. Indian Co-operative Review, 28(2), 160-178.

Pandey, I M. (2008). Financial management. New Delhi: Vikas Publishing House.

Periasamy, P (2006). Working capital management- Theory and Practice (1st ed.). New Delhi: Himalaya Publishing House.

Pillai, B. Vijaychandran., & Jhonson,.B. (2012, July). Solvency and liquidity analysis of weavers' Co-operative society Ltd. Kanhirode, Kerala. Indian Cooperative Review, 50(1), 57-61.

Rao, U. Surya., Joseph, C. Samuel., & Vanniarajan T. (2004, December). Predicting corporate failures: A study of selected sugar mills In Tamil Nadu. Indian Journal Of Accounting, 35(1), 1-6.

Rayudu, C.S. (1985, July). Ratio analysis & financial Performance. Indian Cooperative Review, 23(1), 54-70.

www.Hafed.gov.in

www.markfedpunjab.com

Navkiranjit Kaur Dhaliwal

Associate Professor, Department of Commerce, Punjabi University, Patiala.

Jasmeet Kaur

Research Scholar, Department of Commerce, Punjabi University, Patiala.

Table--I

Financial Analysis of MARKFED and HAFED

Financial Indicators   MARKFED     HAFED      T-value
                       (n = 11)    (n = 11)

Business turnover      11508.51    3212.81    6.446 *

Fixed assets           123.39      230.65     3.937 *
Investments            8.09        106.23     11.851 *
Current assets         4575.90     1962.93    3.129 *
Own funds              311.89      517.96     5.20 *
Long term loans        1.41        21.91      5.987 *
Current liabilities    4394.09     1759.95    3.150 *

Financial Ratios                   MARKFED    HAFED      T-value
                                   (n = 11)   (n = 11)

Business turnover to total           2.820      1.692    2.539 *
  assets
Fixed assets to total assets         0.032      0.115    5.216 *
Investments to total assets          0.002      0.058    5.457 *
Current assets total assets          0.966      0.828    5.417 *
Own funds to total assets            0.086      0.266    4.875 *
Long term loans to total assets     0.0004      0.013    4.885 *
Current liabilities to               0.914      0.722    3.150 *
  total liabilities

Note: Figures are average values (in crore) and n = number of years.

* Significant at 5% level.

Table--II

Z-score of MARKFED

Years                  Weighted Z-score                 Z-score

                    X1 + X2 + X3 + X4 + X5

2000-01    0.042 + 0.077 + 0.0033 + 0.0378 + 1.6573     1.8174
2001-02   0.0324 + 0.0728 + 0.0165 + 0.0354 + 1.7233    1.8804
2002-03    0.0408 + 0.091 + 0.0099 + 0.045 + 2.6474     2.8341
2003-04    00696 + 0.1358 + 0.165 + 0.0696 + 3.7413     4.0328
2004-05    0.1212 + 0.2198 + 0.0396 + 0.12 + 5.0519     5.5525
2005-06   0.1248 + 0.2072 + 0.0363 + 0.1116 + 4.2328    4.7127
2006-07    0.0984 + 0.161 + 0.0099 + 0.0828 + 2.9061    3.2582
2007-08   0.0684 + 0.1106 + 0.0099 + 0.0546 + 2.6304    2.8739
2008-09    0.036 + 0.0672 + 0.0066+ 0.0318 + 2.3427     2.4843
2009-10   0.0264 + 0.0532 + 0.0033 + 0.0252 + 2.1169     2.225
2010-11    0.0216 + 0.0448 + 0.0003 + 0.021 + 1.9411    2.0288
Average   0.0620 + 0.1128 + 0.0138 + 0.0577 + 2.8174    3.0635

Table--III

Z-score of HAFED

Years                  Weighted Z-score                 Z-score

                    X1 + X2 + X3 + X4 + X5

2000-01    0.1248 + 0.2338 + 0.0396 + 0.123 + 0.6523    1.1735
2001-02    0.0432+ 0.1596 + 0.0231 + 0.0786 + 0.6394    0.9438
2002-03    0.078 + 0.25341 + 0.033 + 0.1356 +1.6384     2.1384
2003-04   0.1752 + 0.5852 + 0.0528 + 0.3144 + 3.9490    5.0766
2004-05    0.1752 + 0.595 + 0.0726 + 0.4578 + 2.5694     3.87
2005-06   0.1896 + 0.5096 + 0.2046 + 0.3534 + 2.4675    3.7247
2006-07    0.2076 + 0.483 + 0.2145 + 0.3252 + 1.8232    3.0535
2007-08     0.1656 + 0.413 + 0.1254 + 0.258 +1.3137     2.2757
2008-09     0.09 + 0.2562 + 0.0429+ 0.1374 + 0.9231     1.4496
2009-10    0.0864 + 0.2772 + 0.0528 + 0.1518 +1.2448     1.813
2010-11    0.0624 + 0.252 + 0.0495 + 0.135 + 1.3756     1.8745
Average    0.1271+ 0.3653 + 0.0828 + 0.2246 + 1.6906    2.4903

Table--IV

Financial Consistency of MARKFED and HAFED

Description   Value MARKFED   Value HAFED

Mean             3.0635         2.4903
STDEV             1.226          1.290
C.V (%)           40.03          51.81
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Date:Apr 1, 2014
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