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CERTIFICATE -I

This is to certify that the project report entitled ³Comparative Analysis of Nestle V/S Cadbury´ undertaken at ³Nestle India Ltd.´ is a bonafide work carried out by ³Lalita Kumari´ for partial fulfillment of the requirements for Master in Commerce (M.Com) during the academic year 2005 - 2007 under my supervision and guidance. It is also certified that the form and content of the above mentioned project are original and have not been submitted in any part or full, for any other degree or diploma of this organization or other organization/institute/university according to the best of my knowledge and belief. I am fully satisfied with her work & wish her Best of Luck in future endeavors. Internal Examiner Prof. Avtar Singh External Examiner

Major Advisor & Head of Commerce Department G.T.B.National College, Dakha

ACKNOWLEDGEMENT
It was indeed a great pleasure & a most cherish able learning experience for me in acknowledging valuable assistance & cooperation by people around me. ³If words are considered as symbol of approval & token of appreciation then let the words play the heralding role of expressing my gratitude´. First of all I am thankful to almighty God & my dear parents because without their blessings this project was not possible for me. ³No endeavor is a one man show´, it is a contributing effort of all those who helped me directly or indirectly in completion of this project. I wish to take this opportunity to express our deepest & immense thanks to all the talented people who contributed to this project by providing their valuable guidance. I am extremely grateful to Mr. Paul Stienkamp (Factory Manager), Mr. Mahesh Karandikar (H.R. Manager) & Mr.J.K.Singla (Finance Manager) of ³Nestle India Ltd.´ for providing valuable information in spite of their busy schedules. My sincere thanks to Prof. Avtar Singh for his encouragement & continuous support which has made me to abstain from being hackneyed by showing me a new way & whole new dimensions in the analysis and design of my project. Last but not the least I would like to thanks to all of them who helped me directly or indirectly in completion of this project by their brains, hearts & hands from core of my heart. In the end, I can state about my practical training in brief by recalling the ancient Chinese proverb:

´I hear, I forgot« understand«µ Lalita Kumari M.Com. (2nd Sem)

I see, I remember«. I do, I

ANNEXURE
Title of the Thesis/Dissertation : ³Comparative Analysis Of Nestle V/S Cadbury´ Name of Student Registration No. : Lalita Kumari. : 02-GTD-53.

Name & Designation of Advisor : S. Avtar Singh. (Professor) Degree to Be Awarded : M.Com. Session : 2005-2007. : Panjab University, Chandigarh.

Name of University

PREFACE
This report is basically undertaken to meet two main objectives. The first serves to bridge the gap between practical aspects & theoretical knowledge. The second being the syllabus requirements for the post graduate degree in Commerce (M.Com) course of Panjab University, Chandigarh. As a part of M.Com, a student has to pursue a project duly approved by the director of the institute. I had the privilege of

undertaking a project on ³Comparative Analysis of Nestle V/S Cadbury´At ³Nestle India Ltd.´ This project was undertaken to make the analysis of financial statement & also to get an experience of working with the concern itself. This project is divided into ³12 Chapters´ which cover different aspects relating to this project. I hope that this project gives the reader an overview about Analysis of financial statements of ³Nestle India Ltd.´ & ³Cadbury´: CHAPTER 1 Deals with Introduction & History of Nestle in detail. CHAPTER India. 2 Deals CHAPTER Factory. with Nestle in

3 Deals with Introduction & features of Moga

CHAPTER 4 Deals with Introduction, History, Products, Brands & Historical Development of Cadbury in detail. CHAPTER 5 Deals with Objectives of Analysis of financial statements. CHAPTER 6 Deals with Ratio Analysis. CHAPTER 7 Deals with SWOT Analysis. CHAPTER 8 Deals with Best Performing Firm with Reasons. CHAPTER 9 Deals with Research Methodology. CHAPTER 10 Deals with limitations & findings of study. CHAPTER 11 Deals with Appendix containing Financial Statements. CHAPTER 12 Gives an idea about Websites visited & Book referred.

TABLE OF CONTENTS
Chapter No. Description Page No

Chapter 1 INTRODUCTION & HISTORY TO NESTLE. Chapter 2 NESTLE IN INDIA. Chapter 3 INTRODUCTION & FACTORY. SALIENT FEATURES OF MOGA

Chapter 4 INTRODUCTION & HISTORY TO CADBURY. Chapter 5 OBJECTIVES OF ANALYSIS OF FINANCIAL STATEMENTS. Chapter 6 RATIO ANALYSIS. Chapter 7 SWOT ANALYSIS. Chapter 8 CONCLUSION:
a. BEST

PERFORMANCE COMPANY SHAREHOLDER PERSPECTIVE.

FROM

a. REASON FOR GOOD PERFOMANCE

Chapter 9 RESEARCH METHODOLOGY. Chapter 10 Chapter 11 LIMITATIONS & FINDINGS OF STUDY. APPENDIX: BALANCE SHEETS. PROFIT & LOSS A/C. BIBLIOGRAPHY.

Chapter 12

INTRODUCTION
(HENRY NESTLE - FOUNDER OF NESTLE) (1814 ± 1890)

30. one can see a lot of investment R&D and risk taken in new product areas. Nestle has almost 500 factories world wide out of which 220 are located in Europe. Nestle is the world¶s largest food company with its international headquarters at Vevey. Founder of Nestle was German born ³Henry Nestle´ who was living in a small town of Switzerland named ³Vevey´. in Switzerland. It has always taken a long-term view in the countries in which it operates. Nestlé is often quoted by most as ³Multinational of Multinationals. based on common senses & a strong set of moral principals emphasizing a lot of respect for fellow beings. It is more of a people & products oriented company rather than systems oriented company. at that time Switzerland faced one of the highest infant mortality rate & the milk formula act as nectar that saved the lives of many infants whose mothers were un-able to breast feed successfully. ³Necessity is mother of invention´ is applicable in the invention of a special food product ³Farine Lactee´ made from Cereals & milk to saved the lives of many infants because.´ There is a good reason. Nestle has always adapted to the local conditions and at the same time integrates its Swiss heritage. 150 in America and 130 in Africa. Switzerland. Nestlé is very much decentralized in its operations & most of the markets are given considerable autonomy in its operation.NESTLES PROFILE Nestle India is a multinational company with its worldwide operations in over 84 countries. Asia and Oceania. Therefore. There are ³unwritten guidelines´ which are to be followed. Today its product brand name µNestle¶ is associated with µquality products¶ in worldwide consumer markets. NESTLE . At present Nestle is the world¶s largest food company. It believes in rewarding and promoting people from within. It employs almost 2. Since than Company have always looked forward and have achieved set targets & goals. There is a great emphasis placed on training by the company. with its international head quarters at Vevey.000 people. From a modest beginning he founded the company in 1866 at Switzerland for manufacturing milk powders for babies. as less than 2% of the turnover comes from domestic market in Switzerland.

1995 Bicholim (Goa) : Noodles and Cold Sauces. at Bicholim (Goa) in 1997.Cerelac. family and tradition. graphic translation of his name. at Ponda(Goa) in 1995.2006 Beginning with its first investment in Moga(Panjab) in 1961. nature and nourishment. which personifies the company¶s business.1962 Choladi (Tamilnadu) : Instant Tea Export . Milkmaid Deserts . Other factories were set up at Choladi (Tamil Nadu) in 1969. at Nanajangad (Karnataka) in 1989. he also created a symbol of the ³Bird¶s Nest´. 1997 Pant Nagar (Uttaranchal) : Noodles and Coffee. at Samlakha (Haryana) in 1992.1989 Samalkha (Haryana) : Cereals. PLANT LOCATIONS Moga (Panjab) : Milkmaid. PRODUCT RANGE OF NESTLÉ Its activities include manufacturing and marketing of: y y CONDENSED MILK POWDERED MILK . The symbol.1992 Ponda (Goa) : Chocolates & Confectionery.1969 Nanjangud (Karnatka) : Coffee & Milo .THE NEST When Henry Nestle introduced the first commercial infant formula in 1867. evokes security. Nestle India is now putting up the 7th factory at Pant Nagar in Uttaranchal. Today it is the central element of Nestlé¶s corporate identity and closely parallels the company¶s corporate values and culture. motherhood and affection.Culinary. which is universally understood.

At present there are around 500 factories in around 84 countries with 200 operating companies. mergers and purchasing of interests in other companies.000 employees. 1 food company in the world. One basic research center & 17 technological development groups and has in excess of 200. Both companies competed vigorously from 1866.1905. It is present on all five continents has an annual turnover of nearly 80 Billion Swiss Francs. Currently Mr. Nestlé operations worldwide are divides into 3 zones: y y y ZONE EUR : Europe ZONE AOA : Asia and Oceania ZONE AMS : Americas .y y y y y y y y y y y ICE CREAMS OTHER DAIRY PRODUCTS INFANT FOODS CHOCOLATES & CONFECTIONERY ITEMS TEA & COFFEE CULINARY PRODUCTS FROZEN PRODUCTS FRUIT JUICES MINERAL WATER PET FOODS PHARMACEUTICALS AND COSMETICS NESTLE`S ORGANIZATION Some names seem to belong to legend and Nestlé now synonymous with a prestigious trademark and world¶s foremost food group originally consisted of two companies Henri Nestle of Vevey Switzerland & Anglo Swiss Condensed Milk Company in Cham. Nestle is now the No. PAUL STIENKAMP is controller the Nestlé group. These groups merged in 1905 and become the starting point of the recent food group with development of different products as well as acquisitions.

} (MOGA) NESTLE IN INDIA Nestle set up its operations in India. Singapore. as a trading company.East Asian trading giants of the likes of Thailand.´ for importing &selling finished products in the Indian market.India comes under zone AOA which includes South. China etc. Malaysia. Indonesia. ORGANISATION STRUCTURE OF |NESTLE INDIA LTD. in 1912. . It began trading as ³Nestlé Anglo-Swiss Condensed Milk Company (Export) Ltd.

It processes about 500 tons of instant tea. Nestlé has been a partner in India's growth for over nine decades now and has built a very special relationship of trust and commitment with the people of India. Nestlé responded to India¶s aspirations by forming a company in India & set up its first factory in 15th of November 1961 at Moga (Panjab) to develop Moga as milk economy. emphasized the need for local production. The corporate office is located at Gurgaon & the registered office at M-5A. manufacturing 80. Ponda & Bicholim (Goa) which are successfully engaged in meeting the domestic as well as the exports demand. Cannaught Circus. culinary products. services and other goods. It contributes almost 75% of Nestlé¶s total production volume.000 tons of food products & employs 1500 people. situated in south India. CHOLADI FACTORY The factory in Choladi started production in 1967. coffee which is all exported. from Bangalore. The factory today has 80 employees. Nestlé India is now putting up the 7th factory at Pant Nagar in Uttaranchal.New Delhi. Nanajangad (Karnataka). The production started with the manufacture of Milkmaid at Moga factory in 1962 & other products were gradually brought into the fold. cereals & vending mixes is manufactured in Moga. At present Nestlé has 6 manufacturing units at Choladi (Tamil Nadu). Among them Moga factory is the largest and the oldest producing the widest range of food products. The Company's activities provide direct & indirect employment & livelihood to about one million people including farmers. .After Independence in 1947. NESTLÉ HAS SEVEN FACTORIES IN INDIA MOGA FACTORY Moga factory started production in 1962. The entire range of milk. the economic policies of the Indian Govt. suppliers of packaging materials. about 275 kms. Samlakha (Haryana).

NANJANGUD FACTORY In Nanjangud factory production started in 1989 with manufacturing of Nescafe Sunrise. SAMALKHA FACTORY Samalkha factory started production in 1993. It has been expanded into other confectionery products comprising Jellies Pastilles.It currently employees 140 people. & Chocolate based confectionery.It is situated 160 kms south of Banglore. Milo manufacture at Nanjangud began in 1996. Coffee capacity currently is 15. (Puna) Cold sauce 200 gm. Noodles & Cold Sauces are manufactured here. India has the co ±packing arrangement in: y y y y y y y Nestle Polo-Bakeman¶s (Nagpur) Chocolates-Campo (Puttur) Tasters Choice±Williamson Major company (silliguri) Toffee-Nutrine (Sunder Nagar) Pickles-Choride foods Ltd. a satellite factory of Ponda(Goa) began production in 1997. capital city of Goa. the factory has 245 employees. BICHOLIM FACTORY Bicholim Factory. (Amritsar) Dosa & Samber mix ± Indian foods & fermentation Ltd. it is situated 70 kms from Delhi and it has 203 employees & manufactures about 11. Noodles & other culinary products are manufactured here. It is located 40kms from Panjim. ± Nijjer Agro Pvt.000 tons and Milo 3000 tons p.Ltd. treated water & Nestlé Dahi are also being produced here.a. PONDA FACTORY Ponda Factory began production of Kit Kat in 1995. (Nagpur) . Pure Life. Nestum & Ethnic deserts. PANT NAGAR FACTORY This factory is situated in Pant Nagar of Uttranchal.000 tons of food products comprising Cerelac.

Product range. under the name of ³Nestlé India Ltd. ³Nestlé India Ltd. about 400kms.´ After 28 Years of the company it was realized that in order to survive in the international competition and to keep up with the changing time a better and closer relationship was required between Nestlé International and its Indian counterpart. The factory buildings are spread over an area of 57 acres. It employs about 1600 men & women. SALIENT FEATURES OF MOGA FACTORY . It is popularly known among the famous grain markets of the world. North of New Delhi.000 tons of high quality products p. Moga Factory is one of the largest Nestlé Factories in the World in terms of Area. Manpower. Nestlé took a decision to establish milk processing factory at Moga town for economic & social development of the area.MOGA FACTORY ESTABLISHMENT Moga is located in the Malwa region of Punjab State. Initially it was started as a small Milk Factory manufacturing milk product ³Milkmaid´. Moga factory was established in 15th Nov.´ was formally incorporated in 1978 & prior to which the manufacturing license was issued in the name of ³Food Specialties Ltd.a. with passage of time there has been a continuous & rapid expansion in the factory.1961 & the production commenced in early 1962. It deals with over 85. So in 1990 a unified production & marketing front.´ was conceived. It contributes 75-80 % of the total production volume of Nestlé producing 80. Thereafter. Today. In 1959. etc. The credit of bringing this town on the industrial map of the world goes to ³Nestlé ± The World Food Company´ engaged in the largest food processing operations in the world.000 farmers in 1025 villages for collection of milk through Milk agencies.

Apple.odourisation plant.plants engaged in the processing of milk & all the related activities that take place in Moga Factory includes Fresh milk reception. The factory consists of production plants as under: 1. CULINARY This plant is engaged in the production of Noodles. Egrons 2. 3. 4. Vitamins. Minerals & Fruit extracts as Wheat. Liquid plant. (Moga Factory) is the oldest & largest factory among 500 Nestle Factories worldwide with a layout spread over nearly 57 acres & having three major plants within the factory. Ghee plant. Tastemakers. INSTANT DRINKS (VENDING MIXES) 5. Soups. CULINARY These plants are briefly described as follow: 1. The plant is divided into three sections: a. INSTANT DRINKS This plant is engaged in the filling of vending pre . CEREALS 4. Lactogens. POWDER FILLING PLANT The filling & packing of milk like Everyday. CEREALS This plant is engaged in the production of cereal-based baby foods.Nestle India Ltd. MILK OPERATIONS This plant has many sub. Sauces & the like. The production process consists of the addition of various Enzymes.mixes. De . Orange & Vegetables to the cereal base. SEASONING c. Nestogen and Cerelac Tin is done in this plant. COLD SAUCES . 5. POWDER FILLING & PACKING 3. NOODLES b. MILK OPERATIONS 2.

Wrapping cakes in sachets along with tastemaker. Tipping of wheat flour in the hoppers at the start of the line. Frying in oil. Steaming. Main products are as follow: y y y y y y Maggi Taste Makers Sweet & Sour Maggi soups (Chicken. Strand formation. Manufacturing of Noodles is semi automatic process consists this procedure. a. Palestine of cakes. Soups & spice for use in cold sauces. Tomato. SEASONING The seasoning section is engaged it the production of Taste marker. COLD SAUCES This section is engaged in the manufacturing of a whole range of Sauces under the brand name of ³Maggi´. Mixing of dough releasing on the line. Main products of this line are: y y y y y Tomato Ketchup Hot-N-Sweet Masala Chilli Chili Garlic Italian Pizza Popping MAJOR DEPARTMENTS IN MOGA FACTORY y y Human Resources Department Production Department .d. Mushroom & Vegetable) Maggi Super Seasoning Mango Wonder-Mix Maggi Export Mixes. Sheet formation with the help of rollers. e. NOODLES It is one of the major plants of Nestle. Cooling.

clean & ironed clothes can be collected from laundry during specified hours. LAUNDRY The laundry is located near the main canteen. UNIFORMS All employees are required to be in complete uniform specified.y y y y y y y y y y Purchase Department Accounts & Administration Department Personnel Department Quality Assurance Department Security Services Industrial Engineering Services Utility Services Warehouse Field Service Factory Industrial Performance Department IMPORTANT BENEFITS & FACILITIES PROVIDED TO THE EMPLOYEES BY NESTLE CANTEEN The factory canteen provides lunch & dinner prepared under hygiene conditions for all employees at a subsidized rate against a coupon. DISPENSARY AND HEALTH CARE . In addition tea/coffee is served free of cost during specified break timings. Neat. Shirt & Cap/Turban for each department. Uniform consists of a Pant.

within prescribed limits. birth certificate with a prescribed format of the newly born is required to be submitted to the H. lavatories & resting place for break. STAFF SALES Nestle provide a standard discount rate of 10% on the wholesale price of its products to the employees.The Company has a Dispensary with a full time Pharmacist and a visiting Doctor to provide treatment of minor ailments & First aid in case of accidents. The health record of employees is maintained in the medical card kept in the Dispensary including Blood Group. MEDICAL SCHEME The company covers the medical expenses & reimbursement of the hospitalization expenses of all eligible employees. INFANT FEED SCHEME Nestlé provide infant foods free of cost to the newborns of its permanent employees only where breast-feeding is not possible. stocks all the products marketed by firm. .R. Lockers are issued against codes which are provided with Showers. in case they are hospitalized. ACCIDENTS/FIRST-AID BOXES All departments are equipped with First ±Aid Boxes which can be used in case of an accident or minor ailment.R. Money or valuables should not be kept there. The employees can purchase products after obtaining the staff sale card from the H. LOCKERS AND REST ROOMS Each employee is given a locker to keep his uniform & other clothes. In case of serious accident/emergency the employee is shifted to a near by hospital.Deptt. For this a doctor¶s prescription.Deptt. This facility can be availed during the child¶s first year of age and the facility continues for 48 weeks after that first week in which the feed is obtained. The Staff sale shop is located near the factory gate. Separate lockers & rest rooms are available for female employees.

ENVIRONMENTAL RESPONSIBILITIES: The company is highly conscious about its Environmental Responsibilities & uses various methods to create awareness among employees & consumers about their responsibilities towards environment. monitor operations & activities within the firm. CONSTRUCTION OF FACILITIES FOR DRINKING WATER: The Company is helping with construction of facilities for drinking water in village schools of district. An Environmental Committee has been constituted to study. Drinking water project involves sinking deep bore wells. construction of proper storage facility & imparting water education to the village . Factory has been awarded a Certificate from the ³Punjab State Pollution Control Board´ for air & water discharge. is not only an industrial & a commercial house but has made sustained efforts to improve economic and social environment of the people in the area. The credit of bringing this town on the industrial map of the world goes to Nestlé ± The World Food Company.LEAVES Three types of leave are granted to employees: y y y Earned Leave Sick Leave Casual Leave RETIRAL BENEFITS Retrial benefits are provided on retiring from the job on completion of 60 years of age: y y y y Provident Fund And Family Pension Scheme Employees Deposit Link Insurance Gratuity Company Pension Scheme CONTRIBUTION OF NESTLE TOWARDS ECONOMIC & SOCIAL DEVELOPMENT Nestlé India Ltd.

It improves people's health. medicines and veterinary services were provided to 2000 affected animals. when floods caused havoc in Punjab. In Sept. animal health. Green & dry fodder supplied to the farmers. . COMMUNITY SERVICE: The company is also doing a lot of community service. Fresh milk samples are tested in the presence of farmers & preserved milk samples are tested in the lab of the factory. ASSISTING DAIRY FARMERS IN INDIA: Through assistance to farmers Nestlé has helped to raise the quality. About 600 animals were vaccinated. EXTENSION EDUCATION: Every year seminars are organized in collaboration with Punjab Agriculture University (PAU) Ludhiana to provide information to the farmers relating to dairy farming. hygiene & value of the milk. Investment Milk Collection centers with proper facilities are established & farmers are advised on good breeding. breeding. FRESH MILK COLLECTION SYSTEM & PRICING POLICY: Company has opened milk collection centers with facilities to test fresh milk & preserve samples in all villages falling within its district. 1988. feeding practices. clean milk production etc. ³Changi Kheti´± a PAU publication is also made available to the farmers free of cost. lifestyles and the region's economy. fodder production. the company & the concerned people organized Langar (free food) at three most effected areas in region which continued for fifteen days. Special camps are organized for the awareness of farmers about new innovations to improve the quality & hygiene of the milk produced. fat (%) & gross amount. Milk payment is computerized & directly made to the farmers with a slip which carries detail of milk supplied by them. and on the health of dairy herds. advice & provide the services to the farmer to increase the yields of crops and dairy herds.school students. So far 44 drinking water projects have been completed & benefiting over 15000 village students. NESTLÉ AGRICULTURAL SERVICES: Nestlé's provide Agricultural Services to educate. Milk payment is based on the quantity of milk.

one of the world's largest producers of chocolate. combining the most sophisticated technology with highest standards of quality. These all come together to form the brand identity the Cadbury Master Brand Cadbury is the single largest brand in chocolate on international basis. Synonymous with word chocolate. ³John Cadbury´ opened the one-man business selling cocoa & chocolate. a young Quaker. This success has been built upon understanding the needs of our consumers. which was to be the foundation of Cadbury Limited. Cadbury story shows how a small family business developed into an international company. cocoa & chocolate as an alternative to alcohol. It is market leader of chocolate confectionery market with a 70% share. After that company . ³Cadbury´ has a unique relationship with consumer. Products of unique brands are producing & selling which give or bring pleasure to millions of consumers around the world every day which is done successfully for over 200 years.the Cadbury signature. technical skills & innovation established by founders. In 1969 the two great household named Schweppes & Cadbury merged to form ³Cadbury Schweppes plc´. the 'glass and a half' trademark. Since then business have been expanded throughout the world by a programme of organic and acquisition led growth. in Bull Street. This relationship is underpinned by the powerful visual icons of the Cadbury brands . purple colour. which was believed to be one of the causes of poverty & deprivation amongst working people. In 1824. & the chocolate itself. Birmingham.CADBURYS PROFILE Cadbury is one of the well known names in world of MNC¶S. coffee. the real foundation of the Cadbury manufacturing business. customers and other In 1831 John Cadbury became a manufacturer of drinking chocolate and cocoa. His lifelong involvement provide tea.

1824 . Today Cadbury continues to hold Royal Warrants of appointment. mid. 1930 Cadbury opens a factory in New Zealand. 1938 Cadbury's Roses are launched. founder of Cadbury. cocoa & drinking chocolate. MILESTONES OF CADBURY John Cadbury. 1831 A small factory is rented in Birmingham & John Cadbury becomes a manufacturer of drinking chocolate and cocoa. opens his shop in Bull Street of Birmingham selling tea.Cadbury's Dairy Milk gains its status as brand leader in the UK. bringing cocoa and chocolate within the reach of more people. 1854 The Cadbury Brothers receive their first Royal Warrant as 'manufacturers of cocoa and chocolate to Queen Victoria'. 1897 Cadbury manufactures its first milk chocolate. 1915 Cadbury's Milk Tray is introduced. 1842 John Cadbury is selling 16 sorts of drinking chocolate and eleven cocoas. A larger factory in Bridge Street. The earliest preserved price list shows drinking chocolate in cakes and powder.receive their first Royal Warrant as 'Manufacturers of cocoa and chocolate to Queen Victoria'. 1905 Cadbury's Dairy Milk is introduced with a new recipe using fresh milk. a 1920's position that it has enjoyed ever since. coffee. The plentiful supply of cocoa butter remaining after the cocoa is pressed makes it possible to produce a wider variety of eating chocolate. 1920 Cadbury's Flake is introduced. the centre of Birmingham is rented. Under Prime Minister William Gladstone the British government reduces Mid 1850s tax on imported cocoa beans. which he prepares himself using a mortar and pestle. Today Cadbury continues to hold Royal Warrants of appointment.the forerunner of the cocoa we know today. 1866 The Cadbury brothers introduce a new process to produce a much more palatable cocoa essence . 1932 Cadbury opens factories in Canada & Ireland which compliments the manufacturing strength with other factories around the world. 1847 John Cadbury takes his brother Benjamin into partnership and the family business becomes Cadbury Brothers of Birmingham.

Pepsi.are enjoyed in almost every country around the world. Trebor. cocoa & chocolate products are regarded as essential foods for the forces & civilian population. . 1947 Cadbury opens a factory in India. Schweppes. MAJOR BRANDS Cadbury. Gatorade Snapple. CADBURY IN INDIA In 1947 Cadbury opens a factory in India as ³Cadbury India´ (formerly Hindustan Cocoa Products) which is a subsidiary of Cadbury Schweppes Overseas. Middle East and Africa (EMEA). Each region is focused on commercial operations in its geographical & product area. Mountain Dew. UK. Halls. fair dealing. Red Bull. 1969 Cadbury Group Ltd merges with Schweppes Ltd to create Cadbury Schweppes plc. it also maintains teams from each of the six functions. The company has expanded the installed capacity of Malted Foods by 700 Tonnes & with this expansion. 7 UP. total capacity has risen to 8600 Tonnes. Rationing continues until 1949. 1940's During the war years. Company has organized into four regions & six global functions. Dr Pepper. Bubblicious & Bassett . In 2004 it was the winner of Britain's most admired company award as voted by other leading businesses. 1960's Cadbury introduces the latest technologies and installs specialist plants for milk processing and cocoa bean processing in the UK.1939 Cadbury opens a factory in South Africa. Europe. Company is committed to ethical business practices. Asia Pacific. Trident. Dentyne. THE REGIONS ARE: y y y y Americas Beverages. Americas Confectionery. honesty & full compliance with laws affecting businesses.

P). Australia is 11th largest confectionery market in the world. Out of which Induri Farm is a wholly-owned subsidiary of the company which exports malted foods & chocolates to the Gulf & Asian countries. Australia. Canada. and also sells sugar confectionery.Australia & New Zealand are largest markets in the region having leading position in Australian confectionery market. France. Baddi (H. India. REGIONAL OFFICES: Cadbury has seven ragional offices in following cities: y y y y y y y Delhi Kolkatta Mumbai Kerala Chennai Banglore Cochin . Jamaica. Induri (Maharashtra). China & Singapore.) Malanpur (M. South America. Africa.P. Cadbury opens factories in New Zealand. Overall Indian business has a leading presence in chocolate with a 71% market share. Germany. with a 55% market share & in New Zealand with a 43% share. Cadbury employ around 50. FACTORIES & REGIONAL OFFICES IN INDIA Cadbury has four factories & seven Regional offices in India as follow: PLANT LOCATIONS: y y y y Thane (Maharashtra).000 people. South Africa & Ireland which compliments the manufacturing strength with other factories around the world in Malaysia. Spain. Thailand. Japan.

C.The company has received permission from the RBI for payment of royalty of 1% on domestic and exports sales for use of Trade Marks to Cadbury Schweppes Overseas. Dollops (1989) Drinking chocolate Malted foods Cocoa powder Today. Currently Mr. The Company will continue to work to our high standards of corporate and social responsibility both in the way the company conducts their business. Customer Operations. Building on our existing strong reputation with our employees and society. KEY PRODUCTS OF CADBURY y y y y y y y y y y y y y y y y Dairy Milk (largest selling chocolate in the country) 5 Star Gems Dairy milk Choclate Coated wafer biscuits Malted food Sugar confectionery Cadbury Roses. Planning & Logistics. Cadbury is the clear leader in U. Each function has a central team based at Group Headquarters & regional presences which are coordinated by the central team. UK. This enables to focus on top-line growth & allows the functions to develop global strategies & processes towards best in class performance. . Cadbury Fruits Cadbury desserts.K chocolate confectionery market with over 50 brands & 350 packaging variations to meet every need & occasion. to focus on creating a cohesive and talented workforce. and in our products and the way Cadbury sell them. In achieving this goal company will require further changes to the supply chain & IT capabilities. In 2005-06 company is trying to concentrate on improving the business planning in areas Sales & Operations.Y. Perk Eclairs.Puri is chairman of the company.

The following are main methods used for financial analysis of financial statements: o o RATIO ANALYSIS TREND ANALYSIS . stock prices to judge the profitability & financial soundness of the firm with various tools of analysis before commenting to understand the working & following informations: y y y y y y y y y Profitability Liquidity Productivity of assets Goodwill Cash management Solvency of the firm Financial soundness Strengths & weaknesses of the firm.p. ratios. METHODS OF FINANCIAL ANALYSIS Various methods are used for analysis of financial statements and result of operations as well. To study relationship between different statements. before making conclusion regarding illness & before giving treatment. As a doctor examines his patient by recording his body temperature. b. income statement.OBJECTIVE OF ANALYSIS OF FINANCIAL STATEMENTS Analysis of financial statements is systematic process of the critical examination of financial information contained in the financial statements in order to determine financial strengths & weaknesses of the firm. Thus analysis of financial statements means such a treatment of information contained in the financial statement so as to afford a full diagnosis of the profitability and financial position of the firm concerned. Similarly.etc. It helps in predicting about the firm¶s position. objective of such analysis is to diagnose the information contained in financial statements (B/S.

There are a number of Ratios which can be calculated from information given in financial statements. a : b (a is to b). It is one of the most powerful techniques of financial analysis. It expresses quantitative relationship between figures & group of figures. It is not an end in itself but a means of better understanding of financial strengths & weaknesses of the firm. It may be defined as relation of one amount(a) to another(b) which can be expressed as ratio of a to b. decimal. RATIO ANALYSIS A ratio is a simple arithmetical expression of the relationship of one number to another. or as a simple fraction. fraction or percentage(%) ACCORDING TO ACCOUNTANTS HANDBOOK BY WIXON KELL & BEDFORD ³A ratio is an expression of the quantitative relationship between two numbers´. With help of ratios financial statements can be analyzed more clearly & decisions can be made from such analysis. The financial statements of business enterprises bring out the absolute figures which will be too lengthy to remember and come to meaningful conclusions.o o o o o FUND FLOW ANALYSIS CASH FLOW ANALYSIS COMPARATIVE STATEMENTS COST-VOLUME-PROFIT ANALYSIS COMMON ­ SIZE STATEMENTS. In finance. It is the process of establishing & interpreting various ratios for helping in making certain decision. ratio is used as a bench mark for evaluating the financial position & performance of the concern. It is a means of better understanding financial strengths and weaknesses of a firm are company. NATURE OF RATIO ANALYSIS Ratio Analysis is a technique of analysis and interpretation of financial statements. integer. The institutions conduct an inter-firm comparison at the time of appraisal and also a .

decision making. The ratios bring absolute figures closer to judgment as certain benchmarks in ratio¶s based on experience are set as standards.Controlling Co-ordination. INTERPRETATION: Interpretation of ratio is most important factor without which collected data does not convey any sense.comparison of past with present. Interpretation needs skill. CALCULATION: Calculation of appropriate ratios from the data. position or weakness of an enterprise. These are pointers or indicators of financial strength. USE & ANALYSIS: SIGNIFICANCES OF RATIO MANAGERIAL USES OF RATIO ANALYSIS: It is helpful for managers in Financial forecasting-planning. intelligence & foresightedness. Analysis & interpretation. COMPARISON: Comparison of the calculated ratios with the ratios of the same firm in the past/ratios of some other firms or with ratios of the industry to which the firm belong. The absolute figures as such may not indicate any thing. UTILITY TO CREDITORS: Creditors/Suppliers extend short-term loan to the concern so financial position of firm warrants their payments at time. The ratios provide information about financial position of a concern. STEPS INVOLVED IN RATIO ANALYSIS: y y y y SELECTION: Selection of relevant data from the financial statement depending upon the objective of the analysis.Communicating. UTILITY TO SHAREHOLDERS: Investors want to know about financial position of firm before investing for security of his investment & return in form of dividend /interest. UTILITY TO EMPLOYEES: . soundness.

It does not reflect the future. investors etc. ratios also suffer from inherent weakness of accounting records such as their historical nature. 5. Persons like shareholders.Profitability of firm enables employees to put forward their viewpoint for increase of wages & other benefit. Ratios of past are necessarily not true indicators of future. Rations have to interpret and different people may interpret the same ratio in different ways. LACK OF ADEQUATE STANDARDS: There are no well accepted standards or rules of thumb for all ratios to be accepted. It analysis what had happened till date . Hence one has to be very careful in making a decision from the ratios calculated from such financial statements. may base its future policies on basis of information of units in private sector & to submit audit report for tax purposes. INHERENT LIMITATIONS OF ACCOUNTING: Like financial statements. 2. UTILITY TO GOVERNMENT: Govt. WINDOW DRESSING: Financial statements can easily be window dressed to present a better picture of its financial and profitability position to outsiders. 3. are more interested in knowing the likely position in future. . HISTORICAL ANALYSIS: - Financial statement analysis is historical analysis. It makes interpretation of ratios difficult. LIMITATIONS OF RATIO ANALYSIS 1. PERSONAL BIAS: Ratios are only means of financial analysis and not an end in itself. 4.

Net profit ratio Turnover Ratio 3. Return on equity capital 4. Price-Earning ratio (A) In relation to Sales : LIQUIDITY RATIOS . 8. Operating profit Turnover Ratio ratio Working Capital 5. 4.FUNCTIONAL CLASSIFICATION OF RATIOS 1. Liquid Ratio 3. Cash Flow 4. 7. 5. Debt to Total Capital Ratio 3. 6. Debt Equity 1. Operating ratio Total Asset 4. Capital Gearing Turnover Ratio Debtor¶s 1. Gross profit Turnover Ratio ratio Fixed Asset 2. Current Ratio 2. Liquid Ratio Ratio 2. Expense ratio Turnover Ratio Payable Turnover (B) In relation to Ratio Capital Investment: Employed Turnover Ratio 1. 3. Earning per share 5. Return on investment 2. Absolute 1. Inventory 2. Return on capital 3.

83 0.24 0. Idle assets earn nothing.Liquidity ratio measures the ability of firm to meet its current obligations as and when they become due & firm ensures that it does not suffer from lack of liquidity or excess of liquidity. legal tangles. It defines the relationship between current assets & current liability.68 0. Lack of sufficient liquidity will result in poor credit worthiness. High liquidity is also bad.60 1. Current Ratio = Current Assets Current Liabilities YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 0. Liquidity Ratios are: o o o o CURRENT RATIO LIQUID RATIO ABSOLUTE LIQUID RATIO INTERNAL MEASURE CURRENT RATIO Current ratio is measure of firm¶s short-term solvency.84 1. Therefore it is necessary to strike a proper balance between high liquidity & lack of liquidity.91 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) .76 0. It is a measure of general liquidity & widely used for analysis of financial position of a firm. loss of creditor¶s confidence or even resulting in closure of the company.73 0.92 1.74 1.

but financial position of Cadbury is still better than Nestle. No one of the ratios is nearer to the rule.23 0. So. ABSOLUTE LIQUID RATIO Absolute liquid ratio includes cash in hand & cash at bank &marketable securities or temporary investments. An asset is liquid if it can be converted into cash immediately or reasonably soon. Inventories are considered to be less liquid. QUICK RATIO This ratio establishes a relationship between quick/liquid assets and current liabilities.32 1. Absolute liquid ratio = Absolute liquid assets YEAR 2001 2002 2003 2004 2005 . A firm should ensure that it does not suffer from lack of liquidity.31 0. The ratio of 1:2 is acceptable.26 1.40 Current liabilities ANALYSIS (NESTLE INDIA LTD V/S CADBURY As rule of thumb or as a convention a quick ratio of 1:1 is considered to represent satisfactory current financial conditions. Less than 1:1 ratio shows that inventories are higher. Current ratio of 2:1 is considered satisfactory. Nestle should try to improve its current financial position.26 0. From the data & graph we analyze that the quick ratio of Nestle is not satisfactory as compared to Cadbury.29 0. Above table & graphical representation of Nestle & Cadbury is showing that ratios of both the companies have a declining trend. It shows that Nestle has high inventory.00 0. So. Quick/Liquid/Acid Test Ratio = Current assets ± Inventories YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 0. company has to depend on sales in order to meet its immediate obligations.75 0. which is less liquid.49 0.Generally.

27 0.COMPANY Nestle Cadbury 0.2 worth C. It shows that Cadbury is in better position than Nestle. Solvency Ratio: = Total Liabilities to outsiders .011 0.26 0.08 Current liabilities ANALYSIS (NESTLE INDIA LTD V/S CADBURY Generally absolute liquid ratio of 1:2 is considered to represent satisfactory current financial conditions.) are interested to know about ability of firm to pay regularly interest on borrowings & repayment of principal amount. company should try to improve its liquidity position to meet its immediate obligations. Ratios are calculated to know about financial risk and ability of the firm using debts to shareholder¶s advantage. Longterms creditors (debentures holders.Re. As shown in above data & graph we can analyze that absolute liquid ratio of Nestle & Cadbury is not satisfactory according to rule. financial institutions etc. Solvency ratios are as follow: y y y SOLVENCY RATIO PROPRIETORY RATIO DEBT EQUITY RATIO SOLVENCY RATIO This ratio indicates the relationship between total liabilities to the outsiders & total assets of the firm.014 0.1 worth absolute liquid assets are considered adequate to pay Rs.43 0. Lower the ratio.024 0. Liabilities in time. more satisfactory or stable is the long-term solvency position of a firm. SOLVENCY RATIOS ³Solvency´ refers to ability of concern to meet its long term obligation.053 0.06 0.015 0. So.

ratios of Cadbury are lower than Nestle which shows that solvency position of Cadbury is more satisfactory. From Data & Table defined above ratios of Cadbury is .7 52.48 66. more satisfactory or stable is the long-term solvency position of a firm & according to this rule. PROPRIETORY RATIO This ratio establishes the relationship between shareholders funds to total assets of firm.7 52 63.8 29 34. Nestle should try to improve its Long-term solvency or to decrease its liabilities.2 71 65.8 50. better will be the long term solvency of a firm. Higher the ratio or the share of the shareholders in the total capital of the company.4 46.6 53.27 33.52 33. This ratio represents the relationship of owners fund to total assets.73 66.3 47.Total Assets YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 66.14 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) This Ratio is very important for determining long term solvency of a firm.2 49.86 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) Ratios indicate relationship between total liabilities & total assets of a firm.3 48 36. Proprietory Ratio = Shareholder¶s funds Total assets YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 33. Normally lower the ratio.

ACTIVITY RATIOS This ratio is used to evaluate the efficiency of a firm to manage & utilise its assets. The ratio is sufficient to assess the soundness of long term financial position. Nestle should try to improve its Long-term solvency. Higher ratio of Nestle represents risky financial position while lower ratio of Cadbury indicates safer financial position. Ratio of 1:1 is considered as satisfactory. Debt equity ratio = External Equities Internal Equities YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 2 0. Higher ratio indicates risky financial position while lower ratio indicates safer financial position. larger is the amount of sales & profit.4 1. So.4 1.higher than Nestle which shows that solvency position of Cadbury is better than Nestle.72 0.5 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) Debt equity ratio indicates the proportion between shareholders fund & the long terms borrowed funds.3 1. Ratio in above data & graph indicates that ratio of Nestle is high than Cadbury.96 0.6 1. y y INVENTORY TURNOVER INVENTORY CONVERSION PERIOD . DEBT EQUITY RATIO Debt equity ratio also known as External-Internal Equity Ratio is calculated to derive an Idea of claims of outsiders & Owners. Nestle should try to improve its soundness of long term financial position.97 0. Activity ratios involve a relationship between sales and assets. of assets. Funds of creditors & owners are invested in various assets to generate sales & profits.92 0. Better the Mgt.

03 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) Inventory turnover ratio indicates the efficiency of the firm in producing and selling its product.06 9.3 11. Average position of Cadbury is better than Nestle which is now at improving stage & doing well.y y DEBTORS TURNOVER AVERAGE COLLECTION PERIOD RATIO INVENTORY TURNOVER RATIO Inventory turnover ratio indicates the efficiency of the firm to manage its Inventory. It shows how rapidly the inventory is turning into receivable through sales.9 10. High inventory turnover indicates efficient management of inventory & vice versa. Inventory turnover ratio = Sales Inventory YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 10.66 8. But there is close competition between the both firms.2 10.65 9. Every firm has to maintain sufficient level of Inventory to meet the requirements of business. Inventory conversion period = Days in a year Inventory turnover ratio .17 10. Above data & table is showing that inventory turnover ratio is increasing. of days for which a firm has to wait before receivables are converted into cash. It shows the sales of the company are increasing.39 10. INVENTORY CONVERSION PERIOD It represents average no.27 9.

Generally.35 84 57. which shows efficiency . Nestle is now at improving stage & doing well because of its efficient management.86 73 32.71 61 32. DEBTORS TURNOVER RATIO Debtors turnover ratio indicates the number of times the debtors are turned over during a year. Longer the period.06 Average Trade Debtors ANALYSIS (NESTLE INDIA LTD V/S CADBURY) Above table & graph indicates that Debtors turnover ratio of Nestle is higher than Cadbury.91 82 36. Both the firms represent increasing trend in ratios. It shows equal inventory conversion period in 2005. higher the value of Debtors turnover the more efficient is the Mgt. As shown in above data & table inventory conversion period of both the firms is decreasing. of debtors/sales & vice versa as credit is most important element for sales promotion.YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 35 36 39 31 41 36 38 40 36 36 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) There is no rule of thumb or convention for interpreting the inventory conversion period. larger will be the chances of bad debts. Normally low period indicates less investment in inventory or quick movement of inventory. But overall performance of Cadbury is better than Nestle. Debtors turnover ratio = Net Credit Annual Sales YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 33 31.

of days for which a firm has to wait before its receivables are converted into cash. longer the period larger are chances of bad debts. But both the firms should keep in mind & precautions should be used because. Otherwise shows satisfactory position. Above data & table indicates that the average collection period of Nestle is very short as compared to Cadbury which is now at improving stage as longer period indicates larger chances of bad debts. higher the ratio more are the chances of bad debts. PROFITABILITY RATIOS Profit is engine that drives the business enterprise. Now both the companies are trying to improve their position. shorter the period.of Management of debtors/sales. better is the quality of debtors as collection period implies quick payment by debtors. . Average collection period ratio = No. The profitability ratios are calculated to measure the operating efficiency of the company.of working days Debtors turnover ratio YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 11 11 6 11 5 11 4 10 4 6 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) It measures quality of debtors. AVERAGE COLLECTION PERIOD RATIO It represents the average no. Generally. Moreover. Primary objective of a company is to earn sufficient profits to survive & grow over long period of time & to contribute towards the social welfare of the society.

27 21 47.32 16.2 47. ratio.6 38.04 20.26 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) The higher the G.2 45. Gross profit Margin Ratio = Sales ±COGS Sales YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 20.25 20.6 42. Gross profit is a reliable guide to the adequacy of selling prices and efficiency of trading activities. the better is the company¶s financial position.Profitability ratios are :y y y y y GROSS PROFIT MARGIN NET PROFIT MARGIN DIVIDEND/ PAYOUT RATIO EARNING PER SHARE DIVIDEND PER SHARE GROSS PROFIT RATIO The G/P ratio reflects the efficiency with which management produces its products. It . Higher the G/P ratio better will be the results & vice versa.P ratio of Cadbury is high as compared to Nestle.P. It is seen from the data that G.

P. Higher the Net profit ratio better is the profitability of business.57 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) Objective of Net Profit ratio is to determine overall efficiency of the business. & it indicates that the company is operationally efficient. which is a good sign. It is important because ploughing back of profits enables a company to grow & pay more dividends in future. which shows that GOGS has decreased & there are less wastage of resources.22 12. Ratio which is a positive sign.52 11. ratio. This ratio is the overall measure of the firm¶s profitability.P. It indicates management¶s efficiency in manufacturing. Moreover there is an increasing trend. NET PROFIT RATIO Net profit ratio establishes a relationship between N.7 5.2 9. Nestle shows an increasing trend as compared to Cadbury in N. & sales.P.5 5.P ratio.16 10. DIVIDEND PAY OUT RATIO The dividend pay out ratio is calculated to find the extent to which EPS have been retained in the business.5 4. Net profit ratio = Profit After Tax Net Sales YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 12.3 5. Dividend Pay out ratio = Dividend Per Share Earning Per Share YEAR COMPANY 2001 2002 2003 2004 2005 .maintains a cost G. administrative & other activities of the firm.08 9. It is advised that Nestle should try to do its best to improve the G.

53 22.66 28.78 21. . EPS = Net Profit After Tax .49 24.95 0. which is not distributed to shareholders retained in the business.72 12.53 0. the company is retaining the amount in cash. This ratio shows strong position of the company in the market.e.57 0. This ratio helps in evaluating the prevailing market price of share.77 0. In other words pay out ratio helps in assessing the amount of earnings.60 12. i.54 0.78 0.59 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) This ratio is calculated to judge the overall profitability of the enterprise.3 11. The trend from the chart shows that Nestle has an increasing profitability as compared to Cadbury. It does not reflect how much is paid as dividend & how much is retained in the business.73 0.56 0.88 12. The data shows a decreasing trend in dividend pay out ratio of Nestle as compared to Cadbury. EARNING PER SHARE EPS is a good measure of profitability of the firm on a per share basis.Nestle Cadbury 0. But as a profitability index it is a Valuable and widely used ratio.5 12.83 0.57 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) Dividend pay out ratio means how much out of earning per share have dividend per share been paid out.Preference Dividends Number of Equity shares YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 27.

Share ratio also.DIVIDEND PER SHARE RATIO Shareholders are the real owners of a company & they are interested in the earnings distributed & paid to them as dividend.Share ratio of Nestle is showing an increasing trend. business . particularly in comparison with its competitors.P.P. there is an increase in EPS. Strengths may encompass the company image. Higher the D. So.P. there is an increase in D.We see that D. higher is the confidence of shareholders in the company provided. DPS = Dividend paid to shareholders No of shares outstanding YEAR COMPANY Nestle Cadbury 2001 2002 2003 2004 2005 20 20 18 19 14 20 27 20 29 20 ANALYSIS (NESTLE INDIA LTD V/S CADBURY) DPS ratio is calculated to evaluate the relationship between per share paid & market value of the share. SWOT ANALYSIS OF NESTLE V/S CADBURY y STRENGTHS: - Strengths are internal competencies of a firm.S.Shareholders will be very much attracted towards this company & will have confidence in this company. DPS is calculated to evaluate the relationship between per share paid & market value of the share. brand image.

Access to the Groups of both firms proprietary technology/brands. Integrated and efficiency supply chain. Well-distributed product portfolio. Existing markets not fully tapped Potential for growth through increased penetration. y y y y Distribution of products from one place to another is costly process Complex supply chain configuration. Contribute positively to the society in which we operate. Rules & Regulations set out by the firm is strictly followed by all. Provide its shareholders with rapid growth & a fair return. Brand names are associated with µquality products¶ in worldwide consumer markets. & packed hygienically.strategies. y y y y y y y y y y y y y y y y y y Nestlé & Cadbury are world famous food companies producing Quality products. Provide its employees challenging & satisfying work environment. High quality & safe products. under the general license agreement. Market price of some products are high as compared to other competitors available in market. & functional areas such as marketing. endorsed by companies¶ seal of guarantee at affordable prices. poor financial position. WEAKNESSES: - Weaknesses are those factors which tend to decrease the competencies of firm particularly in comparison with its competitors. Such weaknesses may include poor product quality. Strong and well differentiated brands with leading market shares. Capable and committed manpower resources. expertise. poor distribution system. Ongoing product innovation to convert consumer insights. finance. Distribution structure allows wide reach & coverage in target markets. All the products are produced. obsolete technology. tested. Both firms have power to compete with competitors in better way. lack of R&D back up. . personnel. y y y OPPORTUNITIES: Potential for expansion in the smaller towns & other geographies. poor management etc. the extensive centralized R&D facilities. production & R&D. Exports of coffee to Russia constitute a substantial part of overall exports. Company is highly conscious about ³Environmental Responsibilities´.

Change in fiscal benefits BEST PERFORMING SHAREHOLDERS POINT OF VIEW FIRM FROM It is difficult to predict the best performing company by considering just one parameter (performance graphs) as different firms have different perspectives. Rising prices of raw materials and fuels. Solvency Ratio 5. So. . health and wellness. Net Profit Margin(NPM) 3.NESTLE shows an increasing trend in NPM as compared to Cadbury which shows less NPM in 2005 as compared to 2004. NET PROFIT MARGIN: . Sales/Turnover 2. Lower profitabity & mkt. Leverage Technology to develop more products that provide nutrition.y y Growing trend for ³out of home´ consumption. DEBT-EQUITY RATIO: -Capital structure comprises of how much debt and equity are used for the company. So we need to consider few of the following gauges: 1.Sales of Cadbury shows increasing trend than NESTLE. Cadbury shows better & safer financial position of the company than Nestle. price of shares can affect Goodwill of firms. EPS(Earning per share) ANALYSIS (NESTLE INDIA LTD V/S CADBURY) y y y SALES: . Debt-Equity ratio 4. DPS(Dividend per share) 6. profitability of NESTLE is better. y y y y y THREATS: Trend of increased consumer spends on consumer durables resulting in lower spending for FMCG products. Increase in sales shows that people has more trust in the company.

In parallel. REASONS FOR BEST PERFORMANCE MANPOWER DEVELOPMENT: The Company has consistently emphasized the need for improved white-collar productivity. 1956. NESTLE has strong position in this regard. Development & manpower policies were aligned to this objective. the Company remained committed to providing international and diverse professional to explore the employment. applicable accounting standards have been followed to give a true & fair view of state of affairs& of profits for that period at the end of the financial year for safeguarding assets& for preventing & detecting fraud. CAUTIONARY STATEMENT: Corporate Governance Report.EPS of NESTLE shows increasing trend than Cadbury. D. the Directors confirm that in preparation of annual accounts. EXPORTS: Export sales have increased positively influenced by the increase in per unit realization in exports due to higher green coffee prices.S. though partially offset by the shift towards bulk packs.: NESTLE shows increase in DPS which shows strong market position than Cadbury. respect. suppliers & others associated with Companies as trading partners. During 2005 as well all Training. describing the Company's objectives. trust & co-operation. So.S. The Directors wish to develop strong links with them based on mutuality.: . retailers.y y y SOLVENCY RATIO: . APPRECIATION: Companies have been able to operate efficiently due to culture of integrity& professionalism. E.As seen from the chart attached Cadbury has more solvent financial position than Nestle. projections. Improvement in all functions& areas ensure efficient utilization of Company's resources for sustainable& profitable growth.P. estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws & regulations. DIRECTORSRESPONSIBILITY: According to Section 217(2AA) of Companies Act. .P. TRADE RELATIONS: The Companies continued to receive co-operation & support from distributors.

|ACCORDING TO REDMAN & MOORE. RESEARCH METHODOLOGY Every project requires genuine research.} The main objectives of Research are: y y y y y y y y y y y y To bridge the gap between practical aspects & theoretical knowledge. To know about the facilities provided by companies to its employees. To gain familiarity about the contribution of companies towards the development of society. Research in common parlance refers to ³search for knowledge´. To understand the working & financial position of a business. For better understanding of financial strengths & weaknesses of the firm. Success of any project and getting genuine results from that depends upon the research method used by the researcher. To study relationship between different statements from point of view of shareholders. the overall very satisfactory performance would not have been possible. The Directors wish hereby to place on record their appreciation of the efficient and loyal services rendered by all staff and work force of the Company. To know about production procedure adopted by the firm. To know about contribution of Nestlé towards economic & social development To know about key focus areas growth and profits To know the Goodwill/Profitability/Liquidity & Solvency of firm. To know about Productivity of assets. .} RESEARCH IS A SYSTEMATIZED EFFORT TO GAIN KNOWLEDGE. To gain familiarity with a phenomenon or to achieve new insights into it. the Company continued to build on the base established in previous years. without whose wholehearted efforts.SUPPLY CHAIN: In the area of supply chain management. It continued to explore ways to improve efficiencies in supply chain & conducted some experimental pilot projects.

Ratios may be affected by window dressing means manipulation of accounts to conceal vital facts & to show better position of firm. modifications. Internet. production procedure. facilities to employees. In unstructured personal interview. data Consumers. and what people think about different products. Sample procedure Convenience sampling. Department. Source of primary H. Annual Report. Instruments used Personal interview with unstructured questionnaire. history. . question were not arranged but kept in mind and asked from respondent to get detailed information. Finance Department. pricing of different products. production policies. Books. LIMITATIONS & PROBLEMS y y y Predicting the best performing firm by analyzing & considering just one parameter (Data & graphs) is very difficult as different firms have different perspectives. Unstructured Questionnaire. questionnaire Region Moga (Panjab). contribution towards environment & society. ratio may not be definite indicator of good or bad management Sometimes people don¶t give appropriate information. NAME OF STUDY DESCRIPTION Data used Primary & secondary data.RESEARCH REPORT METHODOLOGY FOR THE Project work used with personal interview. record keeping. Magazines. secondary data Time Duration 45 Days. Retailers. So. Type of Unstructured questionnaire. The questions were asked such as methods used in preparing financial statements. Some questions are open-ended and respondent are set free to give information.R. Source of Newspaper.

Chocolates of Nestle are not as popular as chocolates of Cadbury. Profitability ratio indicates that both the firms have strong market. are ignored. . Both the companies are MNC¶s & engaged in food processing units. As for as health drink mils is concerned people¶s favourite is Bournvita because of its taste and chocolate flavour. Mostly some people act rudely & don¶t want to give information. In many situations the financial statements are not free from bias.y y y y y y Financial statement analysis does not reflect the future. Mostly people consume health drink in the morning. Large number of questions were not responded due to busy schedule of company & for secret purposes. ³Maggi´ of ³Nestle´ & ³Cadbury Dairy Milk´ of ³Cadbury´ are most popular brands. Both the Companies have cut-throat competition. Financial statements are confined to monetary matters alone & quality aspect like quality of mgt. Generally people don¶t respond well for questions like suggestion FINDINGS y y y y y y y y y As for as awareness is concerned it is fine for all the main products of both the companies. labour force etc. Liquidity & Solvency position of Cadbury is better than Nestle..

00 79.9 9494.7 228.BALANCE SHEET OF |NESTLÉ LTD.5 3980.I.2 1548.9 1549.4 4756.0 0.5 3972.0 366.2 2385. 2004 & 2005 (in Millions) Particulars SOURES OF FUNDS: Capital Reserves & surplus LOAN FUNDS Secured Unsecured TOTAL APPLICATION OF FUNDS: FIXED ASSETS Gross Block Less: Depreciation Net Block Capital W.0 1068. INVESTMENT CURRENT ASSETS: Inventories Sundry Debtors Cash & bank Balance Loans & advances 2003 2004 2005 964.0 0.2 317.7 94.7 4737.7 139.00 3401.9 2577.6 1044.3 .5 1689.3 2194.4 736.4 7894.7 261.00 143.2 964.8 2166.0 3273.´ As Per Year ended 31st Dec.2 51.8 3913.1 340.1 3684.6 4409.4 8381.1 2531.2 964.8 2229.P.0 0.0 62.5 1943. 2003.

1 3684.6 7386.5 140. 2003.9 22997.9 1392.00 3311.5 4473.5 00.) Particulars INCOMES: Sales Turnover Other Income Stock Adjustments Total EXPENDITURES: Raw Material Excise Duty Power & Fuel Cost Other Manufacturing Expenses+ Employee Cost Selling & Administration Expenses Miscellaneous Expenses Less: Preoperative Expenditure Capitalised Profit before Int.7 2637.00 0. & Tax 2003 2004 2005 22798. Dep.7 65.8 23938.9 1789.Less: Current Liabilities & Provisions Current Liabilities+ Provisions Net Current Assets (-) Miscellaneous Expenses not w/o+ Total Assets Contingent Liabilities+ 2978.8 (-)78.5 263.4 0.5 8447.0 2325.8 3488.1 2962.8 2533.2 26438.0 436.3 1600.1 544.00 3401.2 1688.00 3816.1 .5 00.1 9102.2 23728.7 2588.9 278.5 4185.3 144.00 0.2 5261.0 3273.8 1039.2 1541.8 3655.9 2734.00 PROFIT & LOSS ACCOUNT OF |NESTLÉ LTD.3 4564.} As Per Year ended 31st Dec.0 1437.2 26843.6 1388.7 516.6 766.8 0.1 4057.5 850. 2004 & 2005 (In Millions.4 4364.

00 245 22.13 34.5 2362.5 3058.4 3864.2 0.9 1345.6 48. 2003.88 33.74 442.7 4033.8 62.3 1928.1 45.8 491.4 0.7 37.00 200 24.1 357.3 2927.Depreciation Profit before Tax Tax Profit after Tax Adjustment below Net Profit + P&L Balance B/F Appropriations P&L Balance C/F Equity Dividend Preference Dividend Equity Dividend (%) Earning Per Share(Rs.0 34.3 3287.0 .4 3497.7 2630.) Book Value 462.) Particulars: SOURES OF FUNDS: Capital Reserves & surplus LOAN FUNDS Secured Unsecured TOTAL APPLICATION OF FUNDS: FIXED ASSETS Gross Block 2003 2004 2005 357.60 36.´ As Per Year ended 31st Dec.2 3602.3 0.8 3981.5 442.00 250 28.7 2519.1 3222.8 10.2 568.0 74.5 1360.7 3991.0 72.4 4420.7 250.1 357.6 1594.0 2438.4 4690.72 34. 2004 & 2005 (in Millions Rs.73 BALANCE SHEET OF |CADBURY LTD.0 3955.2 2410.1 3702.9 3095.

8 183. 2003.32 433.00 982.0 2582.) Particulars INCOMES: Sales Turnover Other Income Stock Adjustments 2003 2004 2005 8272.5 8852.0 00.00 1023.7 4033.8 823.8 104.5 3702.4 1606.I.5 214.3 571.3 665.7 2519.4 4420.4 PROFIT & LOSS ACCOUNT OF |CADBURY LTD.1 337.3 588.2 2050.1 947.8 245.6 178.2 189.2 1224.1 2067. 2004 & 2005 (In Millions. INVESTMENT CURRENT ASSETS: Inventories Sundry Debtors Cash & bank Balance Loans & advances Less: Current Liabilities & Provisions Current Liabilities+ Provisions Net Current Assets Miscellaneous Expenses not w/o+ Total Assets Contingent Liabilities+ 1750.9 37.6 241.6 133.9 638.5 00.5 1273.6 127.9 134.0 273.4 2323.0 533.2 68.3 348.3 106.7 50.8 1537.P.9 2621.4 .} As Per Year ended 31st Dec.8 184.1 2037.8 10060.0 134.8 1592.8 101.6 2348.3 1459.Less: Depreciation Net Block Capital W.0 295.

3 1029.6 116.23 110.66 12.3 173.7 1245. & Tax Depreciation Profit before Tax Tax Profit after Tax Adjustment below Net Profit + P&L Balance B/F Appropriations P&L Balance C/F Equity Dividend Preference Dividend Equity Dividend (%) Earning Per Share(Rs.59 100.00 0.9 1212.0 1152.3 818.6 254.nestle.7 1893.5 2224.4 71.0 1133.4 116.00 200.7 125.0 1550.Total EXPENDITURES: Raw Material Excise Duty Power & Fuel Cost Other Manufacturing Expenses+ Employee Cost Selling & Administration Expenses Miscellaneous Expenses Less: Preoperative Expenditure Capitalised Profit before Int.00 200.9 264.8 339.3 9171.9 2320.89 121.2 462.1 338.48 BIBLIOGRAPHY y y y y y WEB SITES REFERRED www.com .7 2027.) Book Value 8512.3 161.4 196.cadbury.5 943.5 874.53 12.1 1205.9 459.00 200.0 974.com www.4 0.5 635.4 1205.2 1262.8 2583.7 1133.com www.00 12.com www.9 720.1 340.8 308.7 811.moneyoutlook.1 2462.3 168.investsmartindia.3 1931.2 1388.4 351.4 456.00 0.4 71. Dep.0 243.0 1550.2 764.8 71.2 10343.

com www.A.yahoo. Ehrhardt S.com www. Myers y Statistical Methods o Analysis of Financial Statements y y Financial Management Financial Management y Principles of Corporate Finance .com www. Gupta Finance R.y y y y y y www.investsments.K.K. Grewal I. Sharma Eugene F.in.cadburyschweppes. Gupta T. Brigham Financial Management Michael C.indiainfoline.com www. Brealey S.M. Gupta R.com www.finance.C. Sharma Shashi K.bseindia.cadburyindia.S.com y BOOKS REFFERED NAME OF THE BOOKS o NAME OF AUTHORS THE o Management Accounting & Business Shashi K. Pandey R.P.

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