Professional Documents
Culture Documents
SUBMITTED BY
YAMINI SAINI Enrollment No. 09750601712
AFFILIATED TO:
ACKNOWLEDGMENT
There is always a sense of gratitude which one express to other for the helpful so needy services they render during all phrases of life. I would like to express my gratitude towards all those who have been helpful to me in getting this mighty task to a successful end.
With the deepest sense of esteem and gratitude, I express my sincere thanks to MRS.DEEPTI GAUR, under whose able guidance I was able to learn much and successfully complete my project.
I would take this opportunity to thank all my family members for their help & suggestions during the course of project work.
I am also thankful to all my friends who gave me constant & continuous inspiration to complete this project.
YAMINI SAINI
CERTIFICATE
This is to certify that YAMINI SAINI has successfully completed the Research project titled Ratio Analysis of Dabur India as the partial fulfillment of the requirement for the award of degree of Bachelor of Business Administration (BBA) by Guru Gobind Singh Indraprastha University, batch 2012-15.
To best of my knowledge the report is original and has not been copied or submitted anywhere else. It is an independent work done by her.
TABLE OF CONTENTS
CHAPTER.
CH: 1
PARTICULAR
INTRODUCTION TO THE STUDY 1.1 Brief Overview of the study 1.2 Objectives of the study 1.3 Scope and significance of the study 1.4 Limitations of the study RESEARCH METHODOLOGY 2.1 Research Design 2.2 Research and presentation tools used INDUSTRY OVERVIEW 3.1 Past, Present & future trends 3.2 Major Players of Dabur India COMPANY PROFILE 4.1 History 4.2 Mission, vision & objectives of study 4.3 Organizational structure/ Management Hierarchy 4.4 Products and services offered 4.5 Future plans THEORETICAL PERSPECTIVE (An introduction to ratio analysis) FINDINGS & ANALYSIS
PAGE NO.
6-10
CH:2
11-13
CH:3
15-18
CH: 4
19-28
CH:5
29-32
CH: 6
33-44
CH: 7
45-48
Financial statements as the major means through which firms present their financial situations to stockholders, creditors, and the general public. The majority of firms include extensively financial statements in their annual report, which receive wide distribution. A financial statement is a compliance of data, which is logically & consistently organized according to accounting principle. It is proposed to convey an understanding of some financial aspects of a business firm. It may show a position at a moment in time, as in case of a balance sheet, or may reveal a series of activities over a given period of time, as in case of an income statement. 1.2 : OBJECTIVES OF THE STUDY To analyze the financial performance of Dabur India Ltd. Projection of financial performance of the company for the last five years.
To measure the overall performance and effectiveness of Dabur India Ltd- Using Profitability Ratios. To measure the efficiency of Dabur India Ltd- Using Activity Ratios. To measure the Dabur India Ltd. Ability to meet the interest cost and repayments schedules of its long term obligations- Using Solvency ratios. To measure the contribution of financing by owners as compared to Financing by outsiders- Using ratios of Capital Structure.
1.3- SCOPE AND SIGNIFICANCE OF THE STUDY The scope of the study is limited to collecting financial data published in the annual reports of the company every year. The analysis is done to suggest the possible solutions. The study is carried out for 4 years (2008 13). Using the ratio analysis, firms past, present and future performance can be analyzed and this study has been divided as short term analysis and long term analysis. The firm should generate enough profits not only to meet the expectations of owner, but also to expansion
1.4 LIMITATIONS TO THE STUDY reports of company that gives only limited information regarding performance of the company. Analysis is only a means and not an end itself. The researcher has to make interpretation and show his own conclusion. Financial statements are prepared on the basis of certain accounting concepts and conventions any change in the method or procedure of accounting limits the utility of financial statement. The data taken for analysis covers only a period of 2008-2013, so study is about past only, it needs not be indicative of future. Time is major limiting factor of study. It is not possible to analyze all the aspects in details within time allowed because of lack of time; the study does not cover the areas relating to industrial analysis and economic growth of Bharat Oil Company.
However, some of the advantages of using secondary data for market research include both cost and time savings. Data that has been published by government agencies is readily available and free of charge, while data collected and analyzed by private companies may require permission for use. Secondary data can be found through company reports, government agencies such as USDAs Economic Research Service (USDA-ERS) and Agricultural Marketing Service (USDAAMS), newspaper articles, Extension publications, etc. Further information on secondary data can be found in the additional resources section at the end of this fact sheet, as well as in fact sheet WEMC FS#8-08, Estimating Market Potential Using Published Data: A Trade Area Analysis Example included in this publication. Primary data is collected specifically to address the problem in question and is conducted by the decision maker, a marketing firm, a university or Extension researcher, etc. Unlike secondary data, primary data cannot be found elsewhere. Primary data may be collected through surveys, focus groups or in-depth interviews, or through experiments such as taste tests.
The information of the present study has been collected from Secondary data sources. Secondary data was obtained from the Havells India Ltd Annual Reports, audit reports, brochures and company website.
MR.SUNIL DUGGAL
Independent Directors
MR.P. N. VIJAY
MR.R.C BHARGAVA
DR.S. NARAYAN
DR.AJAY DUA
S.K. BHATTARCHARYA
4.1- HISTORY
In 1884 birth of dabur, In 1896 setting up a manufacturing plant, In early 1900s ayurvedic medicines,In 1919 establishment of research laboratories, In 1920 expands further, In 1936 daburindia (dr.s. k burman) pvt ltd, In 1972 shift to delhi, In 1979 sahibabad factory/ dabur research & dev centre (DRDC), in 1986 public limited company, In 1992 joint venture with aarolimen of spain, In 1993 cancer treatment,In 1994 public issues, In 1995 joint ventures, In 1996 3 separate divisions, In 1997 foods division/ project STARS, In 1998 professionals to manage the company, In 2000 turnover of Rs 1,000 crores, In 2003 dabur demerges pharma business, In 20005 dabur acquires balsara, In 2006 dabur crosses $2 bin market cap, adopts US GAAP, In 2006 approves FCCB/GDR/ADR upto $200 million, In 2007 dabur foray into organized retail, In 2008 dabur acquires fem care pharma,In 2009 dabur red toothpaste joins billion rupee brand club, in 2010 dabur makes its first overseas acquisition, In 2011 dabur enters professional skin care market, In 2012 dabur india aquires 30- plus from Ajanta pharma
Board of Directors
Management Committee
CEO
Business Unit Heads Health Care Personal Care Ayurvedic Specialist Pharmaceuticals Oncology Foods R&D Quality Control Finance Corporate Communication
Operational Heads
Workers
Leading consumer goods company in India with 4th largest turnover of Rs.1268.7 Crore (FY02) 3 major strategic business units (SBU) - Family Products Division (FPD), Health Care Products Division (HCPD) and Dabur Ayurvedic Specialties (DASL) 5 Subsidiary Group companies Dabur Foods, Dabur Nepal, Dabur Oncology, Dabur Pharma and Dabur Egypt 13 ultra-modern manufacturing units spread across 4 countries Products marketed in over 50 countries Wide and deep market penetration with 47 C&F agents, more than 5000 distributors and over 1.5 million retail outlets all over India.
*Sat Isabgol *Shilajit *Ring Ring *Itch Care *Back Aid *Shankha Pushpi *Dabur Balm *Sarbyna
Corporate Office
Dabur India Ltd. Dabur Tower, Kaushambi, Sahibabad Ghaziabad-201010 (U.P), India.
FMCG Business
Sahibabad (U.P.) Baddi (H.P.) Chyawanprash Unit I Hajmola Unit II
Dabur has also made continuous efforts towards technology absorption and innovation, which have contributed towards preserving natural resources. These efforts include:
Minimum use of water in process by pre-concentration of herbal extract and reduction in concentration time Uniform heating in VTDs by hot water as against steam earlier, resulting in 30% reduction in bulk wastage by using non-stick coating and formulation change Improvement in water treatment plant through introduction of RO (Reverse Osmosis) system for DM water, reutilization of waste water from pump seal cooling and RO reject waste-water management Introduction of water efficient CIP system with recycling of water in fruit juice manufacturing Development of in-house technology to convert fruit waste into organic manure by using the culture Lactobacilus burchi
The Company has achieved a host of significant benefits in terms of product improvement, cost reduction, product development, import substitution, cleaner environment and waste disposal, amongst others.
Ratio analysis is one of the popular tools of financial statement analysis. A ratio is defined as The indicated quotient of two mathematical expression and as the relationship between two or more things Usually ratio is stated as percentage i.e., distribution expenses might be stated as 20 percent of sales. Often, however, the ratio is expressed in units, thus sales might be expressed as 20 times inventory. It is a mathematical yardstick that measures relationship between two financial figures. It involves the break down for the examined financial report into component parts, which are than evaluated in relation to each other and exogenous factors. Ratio analysis involves calculation of ratios and then comparing them with some predetermined standards. The standard ratio may be the past ratios of the same firm or industrys average ratio or a project.
(A)- ADVANTAGES:
1. It simplifies the financial statements. 2. It helps in comparing companies of different size with each other. 3. It helps in trend analysis which involves comparing a single company over a period. 4. It highlights important information in simple form quickly. A user can judge a company by just looking at few numbers instead of reading the whole financial statements.
(B)- DISADVANTAGES:
1. Ratio analysis information is historic it is not current. 2. Ratio analysis does not take into account external factors such as a worldwide recession. 3. Ratio analysis does not measure the human element of a firm.
(C)- SIGNIFICANCE:
Ratios facilitate comparison of: 1. One company over time 2. One company versus other companies 3. Ratios are used by: * Lenders to determine creditworthiness * Stockholders to estimate future cash flows and risk * Managers to identify areas of weakness and strength
(D)- LIMITATIONS:
Limited Use of Single Ratio Sometime, we can not compare our ratios with others. For example, we have started new business and our financial results are not still normal. At that time, our profitability ratio will have limited use because there is not any past data of profitability ratios.
Lack of Adequate Standards We could not make standards of all ratios. For example, we can not tell what is rule of them of our net profit ratio because there are lots of factors affect it. In the lack of adequate standards of ratios, we can not give exact comment on the basis of ratio analysis. Inherent Limitation of Financial Accounting Ratio analysis is just like simplification of financial accounting data. But there are lots of limitations of financial accounting which you can read at. All these limitation will be absorbed by ratios. This is the one of the important limitation of ratio. I can say if base is not good, everything will be wrong. If there is small portion of poison in milk, its effect will be in everything what you will make. Changes of Accounting Procedures If accounting procedures will change, our accounting ratio will be changed. At that time, we can not compare our current year ratios with our past year ratios. For example, in past year, we had used lifo but current year, we are using FIFO for inventory valuation. Due to this, figures of closing stock will be different.
Window Dressing Because we have shown our financial data through Window dressing. Our ratios will also be affected from it. Personal Bias This is reality, I saw many CAs who waste their time to optimize different ratios by changing the project financial statements figures for making attractive projects. All these activities are done for getting loan. So, this will make the drawback of ratio analysis. Matchless Different companies uses different accounting policies, so, we can not compare their ratios. Price Level Changes Inflation effect is ignored in calculation of ratios. So, ratio will not give perfect answer in changing of price level. Ratios are not Substitute of Financial Statements Ratio analysis is important part of financial statements analysis. It can never become a substitute of financial statements. We just use it with cash flow analysis, fund flow analysis and other analysis. Wrong Interpretation We can interpretate wrongly. For explaining the effect on company's position with ratios, there is big need of experience. Wrong interpretation will be helpful for wrong decisions. So, it is limitation of ratio analysis that it does not explain all the facts, it has to explain. For a new accounts manager
6.1 (A) LIQUIDITY RATIOS CURRENT RATIO = CURRENT ASSET/CURRENT LIABILITIES The ratio is the indicator of the firms commitment to meet its short-term liabilities. It is an index of the concerns financial stability since it shows the extent to which the Current Asset exceeds Current Liabilities. A very high ratio is not desirable which means less efficient use of funds, slow moving stock, and increase in debtors, Cash and Bank balance lying idle. It also means excessive dependence on long-term sources of fund, which are costlier than Current Liabilities and can results in lowering down the profitability of the concern. A very low ratio can mean that the concern is not maintaining adequate Cash balances that can result in Bad Credit Image, loss of Creditors confidence. An ideal ratio is 2:1,which means creditors will be able to get their payment in full.
350 300 250 200 150 100 50 0 CURRENTCURRENT C.RATIO ASSET LIB.
INTERPRETATION: In 2008-09,2009-2010 and 2010-2011 ratio was 2.66,2.32 & 2.08 resp. which indicate that company has sound financial position. But in the year 2011-2012 and 2012-2013 current ratio goes down to 1.01 and .79 ,which indicate inadequate working capital.
in current liability & decrease in liquid assets, which may lead to unsound financial position of the concern. The ratio was initially high, as deposits in form of Cash/Bank were high.
1400 1200 1000 800 600 400 200 0 CREDIT AVG. D.T.R. SALES DEBTOR
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
INTERPRETATION:
The debtor turnover ratio was remains somewhat constant from the year 2008-2009 to 2009-2010. In 2010-2011 the ratio improved as Sales increased while Avg. Debtors declined and was at 10.41 In the year 2011-2012 sale decrease by 6.8% while average debtor decrease by 33% , which reasult in rise in debtor turnover ratio to 14.5.
In 2012-2013 debtor turnover ratio increase to 27.8, mainly as a reasult of increase in sale by 10.5% while average debtor decrease by 42.5%. There is no ideal ratio. In Dabur the policy they follow is that the Credit given to Debtors should be less than the Credit given by the Creditors to the Company. Since the ratio is on increase it is Positive sign for the company, indicate that collection from debtor is quick & efficient.
It indicates the speed with which the payments for Credit Purchases are made to the Creditors. YEAR 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
600 500 400 300 200 100 0 CREDIT PUR. C.T.R.
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
INTERPRETATION:
In 2008-09 and 2009-10 CTR remained somewhat constant, as there was not muchfluctuations in Credit Purchase and Avg. Creditors. In 2010-11 CTR declined to 6.71, as there was increase in Avg. Creditors, as Average Creditors increased by 30% while Credit Purchase by 1%. In 2011-2012, C.T.R decrease to 4.95 as average creditor increase to 97.76 while creditor reduce to 484.27. In 2012-2013, C.T.R decrease to 4.50 due to increase in average creditor by 27% while credit purchase increase by 15.5%. There is no ideal ratio. In Dabur the policy they follow is that the Credit given to Debtors should be less than the Credit given by the Creditors to the Company. Since the ratio is on decrease it is a Positive sign for the company as it enables them to improve their liquidity by holding payments.
1000 800
600 400 200 0 NET SALES FIXED ASSET FA.T.R.
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
INTERPRETATION:
In 2008-2009 fixed asset turnover ratio was 4.80 In year 2009-2010 there was a slight decline in the ratio as with the increase in Fixed Asset & decrease in sales revenue. In the year 2010-11 Fixed Asset Turnover Ratio increased significantly and was 6.02 as sales increased but Fixed Asset declined as in the year 2011-12 there was a decline in BUILDING, PLANT, FURNITURE and OFFICE EQUIPMENTS by 23%, and depreciation increased by 20%. In 2011-12 fixed asset turnover ratio has significantly increase to 7.41 which decline to 6.62 in 2012-13.As the ratio is decline in 2012-13, it is not a good sign for the Dabur, as
it show that fixed investment in fixed assets has not been utilized efficiently as compared to previous year.
The DE ratio is the basic and the most common measure of studying the indebtedness of the firm, it indicates the percentage of funds being financed through borrowings. The Debt-Equity ratio is determined to ascertain the soundness of the long-term financial policies of the company. The ratio indicates the proportion of owners stake in business. Excessive liabilities tend to cause insolvency. The ratio indicates the extent to which the firm depends upon outsiders for its existence. It tells the owners the extent to which they can gain benefits or maintain control with a limited investment. The greater the ratio higher is the risk to the lenders and vice versa. YEAR 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 TOTAL DEBT 308.95 342.41 269.87 204.33 287.01 OWNER EQUITY 354.81 396.89 408.69 262.06 332.26 RATIO 0.87 0.86 0.66 0.78 0.86
450 400 350 300 250 200 150 100 50 0 TOTAL OWNER RATIO DEBT EQUITY
INTERPRETATION:
In 2008-09 the ratio was 0.87 which continuously declined for two period and was at 0.66 in the year 2009-10. Decrease in the ratio is mainly due to assets being financed more by shareholders funds then by external equities. Total debt decreased by 21% from 2009-10 to 2010-11 while owners equity increased in the same period leading to fall in debt equity ratio by 23%. In 2011-12 ratio increase to 0.78 mainly due to significant decrease in owner equity by 36% while total debt decrease only by 24%. In 2012-13ratio again increase to 0.86 as owner equity increase by only 27% while total debt increase by 40.5%.
The larger the ratio, the more is the amount of risk assumed by creditors, and the claims of the creditors against the assets of the firm. As the ratio is increasing for the past two year in case of Dabur it is not a good sign for the creditors as well as company.
1400
1200 1000 800 600 400 200 0 G.PROFIT NET SALES RATIO
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
INTERPRETATION:
The Gross profit ratio for the company is on an increase mainly due to the continuous increase in the Gross profit, which is mainly due to the increase in sales as a percentage of direct expenses is more. A gross profit ratio of 50% means that on every 1-rupee sale, the firm is earning a gross profit of 50paise.
This ratio indicates the degree to which the selling price of goods per unit may decline without resulting in losses from operations to the firm.
CONCLUSION:
Industry is yet to capture the beverage market in full swing. PackedChyawanprash followed by Amla, Ashwagandha, Hareetaki, Dashmul, Ghrit and several.Other herbs and herbal extracts. The consumers patriotic love for tea and coffee is unfired. Chyawanprash are yet to establish their supplement use in the average householdhere in lays the great opportunities. Within the market, it is safe to conclude that dabur has hitoff rather well with the masses. Dabur has clearly lost it head start advantage and therebyacquiring just 35% of the market share while others enjoy rest of the market share. This couldbe well attributed to dabur successful ATA (Availability, Taste and Affordability) marketingmodule, the attributes most rated by the consumers. Lack of publicity has hampered thegrowth progress of the brand so aggressive advertising is needed to promote Chyawanprashand vatika hair oil brand .The brands such as that of Chyawanprash by vednath, Chyawanprashwith its sonacahndi, Minute- made and also US food giantssDel Monte are ready to hit theChyawanprash market very soon.Vatika hair oil has no major competition except AustralianProduct Tabasco.As a new product so people are not able to digest it yet Dabur is getting 8 crores from Vatikahair oil in which accounts for 4 crores, Lemoneez 1 Crore & others 3 Crores. As the strategiesof the companies keeps on changing, be it in Chyawanprash industry, a company has to create perceptions and cover them into realities. It is an expensive proposition requiring hugeexpenditure on advertising, sponsorships and media. Thus, the ideal company will be the one, which combines the high-end technology withconsumer insight. As 16% of the excise duty is exempted on food products in this budget,many food companies including Dabur got benefited from it. On the analysis of survey it wasfound that target Market of Chyawanprash want quality benefit rather than Price benefit.
RECOMMENDATIONS:
Focus on growing core brands across category: 1. Reaching out to new geographies, within and outside India 2. Improve operational efficiencies by leveraging technology 3. Be the preferred company to meet the health and personal grooming needs of our target consumers with safe, efficacious, natural solutions by synthesizing the deep knowledge of Ayurveda and herbs with modern science. 4. Provide consumers with innovative products within easy reach. 5. Position Dabur Chyawanprash as not more of a medicine but as something, which is necessary for health 6. More initiatives like Dabur ki Deewar to increase brand visibility. It is an initiative to occupy shelf space.
ANNEXURE
BIBLOGRAPHY
BOOKS
Financial Management Financial And Cost Accounting Management Accounting Non-Executive Finance Analysis R. P. RUSTOGI DR. S. N MAHESHWARI M. A SAHAF P. CHANDRA
WEBSITES
www.Dabur.com www.Daburindia.com www.Business.com www.Indiafoline.com