A Presentation on Financial Statement Analysis of Godrej Consumer Products Limited

Submitted to Prof. Megha mam

Prepared by :
Malhar Bhatt (NR10011) Kunal Maheria (NR10047) Manish Modi (NR10053) Hardik Patel (NR10070) Vishal Shah (NR10094) Vandana Vyas ( NR10124)

PROFILE OF GODREJ
    ESTABLISHMENT FOUNDER OF THE COMPANY ABOUT GCPL CORPORATE INFORMATION

1) board of directors 2) management committee 3) company secretary 4) auditors

MISSION AND VISION

MISSION:
GCPL, they are driven by their mission to continuously enhance the quality of life of consumers in high-growth markets with superior-quality and affordable personal care and hygiene products.

VISION:
We are dedicated to Deliver Superior Stakeholder Value by providing solutions to existing and emerging consumer needs in the Household & Personal Care Business. We will achieve this through Enduring Trust and Relentless Innovation delivered with Passion and Entrepreneurial Spirit. is the vision of the company.

FINANCIAL STATEMENT ANALYSIS

MEANING:
Financial statement analysis seeke to evaluate the perfomance , financial strength, ability to generate enough cash and the growth outlook of a company.A number of tools are available in the tool kit of the analyst for this purpose.

OBJECTIVES OF ANALYSIS:
1. Financial statement is to provide information about financial position ,perfomance and cash flow of an enterprise 2. To evaluate the adequacy or otherwise of the profits earned by the company 3. To evaluate the adequacy or otherwise of its financial srength 4. The future growth outlook of the company

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STANDARDS OF COMPARISIONS:
In using the results of financial statement analysis, financial analysts look for pertinent standards of comparisons to determine whether the results of their analysis are favourable of unfavourable.

For this purpose, comparisons are made with,

1. General rule-of-thumb indicators/ benchmark. 2. Past performance of the company. 3. Industry standards

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SOURCES OF INFORMATION: Company Reports Company Website Business Periodicals Information Services

Techniques of Financial Statement Analysis: 1. Horizontal Analysis 2. Trend Analysis 3. Vertical Analysis 4. Analytical Balance-sheet 5. Multi-step income statement

Analysis of the financial statements of Godrej consumer product ltd

Multistep profit and loss account Horizontal analysis of profit and loss account Horizontal analysis of balance sheet Vertical analysis of profit and loss account Vertical analysis of balance sheet Analytical balance sheet Trend analysis

Multi-step profit & loss account of Godrej Consumers Product Ltd for the year ended on 31 March, 2010
Particulars Gross sales Less: Excise Duty Net Sales Material Cost Manufacturing Expenses Cost of goods sold (COGS) Gross Profit (GP) Employee remuneration (other than factory) Admin, Selling & other expenses (+) Other income (operating) Profit before depreciation, Interest and Tax (PBDIT) Depreciation & Amortization Operating Profit (OP) (PBIT) Interest & finance charges (+) Other income (non operating) Profit before tax and EO items (PBTEOT) Profit before tax (PBT) Provision for tax: Current income tax (+)/(-) Deferred Income tax liab/asset (+) Fringe benefit tax (+)/(-) Tax adjustments for previous years Total Income tax Profit after Tax (NP) (PAT) Current year amount (Amt. In Lac) 129433.98 2645.86 126788.12 56217.41 2385.94 58603.35 68184.77 12094.42 29495.46 2529.95 29124.84 1374.94 27749.9 366.22 2530.53 29914.21 29914.21 4886.78 215.80 -Previous year amount (Amt. In Lac) 112660.41 4226.17 108434.23 62208.93 2194.49 64403.42 44030.81 5843.6 22042.19 1278.84 17423.86 1436.92 15986.94 882.31 3487.73 18592.36 18592.36 2106.67 320.74 74

5102.58 24811.64

2501.41 16090.97

140000 120000 100000 80000 60000 40000 20000 0 Net sales COGS Gross Profit Profit after Tax Current Year Previous Year

Horizontal profit & loss account of Godrej Consumers Product Ltd for the year ended on 31 March, 2010
Gross sales Less: Excise Duty Net Sales Material Cost Manufacturing Expenses Cost of goods sold (COGS) Gross Profit (GP) Employee remuneration (other than factory) Admin, Selling & other expenses (+) Other income (operating) Profit before depreciation, Interest and Tax (PBDIT) Depreciation & Amortization Operating Profit (OP) (PBIT) Current year amount (Amt. In Lac) 129433.98 2645.86 126788.12 56217.41 2385.94 58603.35 68184.77 12094.42 29495.46 2529.95 29124.84 1374.94 27749.9 Previous year amount (Amt. In Lac) 112660.41 4226.17 108434.23 62208.93 2194.49 64403.42 44030.81 5843.6 22042.19 1278.84 17423.86 1436.92 15986.94 882.31 3487.73 18592.36 18592.36 2106.67 320.74 74 Increase or Decrease (Amt. In Rs.) 16773.57 (1580.31) 18353.89 (5991.52) 191.45 (5800.07) 24153.96 6250.82 7453.27 1251.11 11700.98 (61.98) 11762.96 (516.09) (957.2) 11321.85 11321.85 2780.11 (104.94) (74) Increase or Decrease (Amt. In %) 14.89 (37.39) 16.93 (9.63) 8.72 (9.01) 54.86 106.97 33.81 97.83 67.15 (4.31) 73.58 (58.49) (27.44) 60.90 60.90 131.97 (32.72) (100)

Interest & finance charges 366.22 (+) Other income 2530.53 (non operating) Profit before tax and EO items (PBTEOT) 29914.21 Profit before tax (PBT) Provision for tax: Current income tax (+)/(-) Deferred Income tax liab/asset (+) Fringe benefit tax (+)/(-) Tax adjustments for previous years Total Income tax Profit after Tax (NP) (PAT) 29914.21 4886.78 215.80 --

5102.58 24811.64

2501.41 16090.97

2601.17 8720.67

103.99 54.20

INTERPRETATION:  Sales & other income growth is 16.93%. Other income consists of dividend and interest received which is increased compare to previous year.  Increase in expenses like Employee remuneration by 106.97% and Administrative & Selling expenses by 33.81% compared to previous year.  There is a decrease in expenses like Material consumed by 9.63% compare to previous year.  There is a decrease in Cost of goods sold by 9.01% compare to previous year.  Depreciation even down by 4.31% despite higher net sales.  Growth of other income (operating) by 97.83% much more than growth in net sales. Tax provision increased by 103.99% whereas profit before tax increased by 60.90%.  Profit after tax increased by 54.20% compare with sales and other income is increase by 16.93%.

Horizontal Balance-sheet of Godrej Consumers Product Ltd as on 31 March, 2010

Particulars SOURCES OF FUNDS: Shareholder s Funds Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Liability (Net) TOTAL APPLICATION OF FUNDS: Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets TOTAL 37816.77 1375.43 39192.19 15790.77 84618.45 23816.19 3293.75 27109.94 33379.96 60397.29 14000.58 (1918.32) 12082.25 (17589.19) 24221.16 58.79 (58.24) 44.57 (52.69) 40.10 27379.54 10823.75 16555.79 83.72 16639.51 52188.17 16804.82 3314.95 18570.42 604.42 15688.35 54982.97 26654.29 9675.20 16979.08 249.67 17228.75 9788.59 12667.41 981.04 34456.81 900.64 11483.99 60489.89 725.25 1148.55 (423.29) (165.95) (589.24) 42399.58 4137.41 2333.91 (15886.39) (296.22) 4204.36 (5506.92) 2.72 11.87 (2.49) (66.47) (3.42) 433.15 32.66 237.90 (46.11) (32.89) 36.61 (9.10) 3081.90 79664.63 82746.53 1239.80 1239.80 632.12 84618.45 2569.54 51122.41 53691.94 1489.03 4800.00 6289.03 416.32 60397.29 512.36 28542.22 29054.59 (249.23) (4800) (5049.23) 215.8 24221.16 19.94 55.83 54.11 (16.74) (100) (80.29) 51.84 40.10 Current Year Rs. in Lac Previous Year Rs. In Lac Increase or Decrease (Amt. Increase or Decrease In Rs.) (Amt. In %)

INTERPRETATION:
 Total Assets and Liabilities increased by 40.10%.  Net worth up by 54.11% as against lower growth in loan funds by (80.29  Gross block of fixed assets increased by 2.72% and Net block of fixed assets decrease by 2.49%  There is a decrease of 66.47% in capital work-in-progress  The significant decrease of 17% in secured loans in 2009-10 compared to previous year.  The increase in deferred tax liabilities to 52% in 2009-10.  Decrease in cash and bank balances of 46% but increase of 33% in inventories in 2009-10 as compared to only 17% change in sales from 2008-09 and increase in expenses suggests that company has a large amount of work in progress which needs to be moved faster for a good cash movement cycle.  Investments grew by 433.15%  net current asset also decreased in 2009-10 by 52.69% than previous year 2008-09.

Vertical profit & loss account of Godrej Consumers Product Ltd for the year ended on 31 March, 2010
Particulars Gross sales Less: Excise Duty Net Sales Material Cost Manufacturing Expenses Cost of goods sold (COGS) Gross Profit (GP) Employee remuneration (other than factory) Admin, Selling & other expenses (+) Other income (operating) Profit before depreciation, Interest and Tax (PBDIT) Depreciation & Amortization Operating Profit (OP) (PBIT) Interest & finance charges (+) Other income (non operating) Profit before tax and EO items (PBTEOT) Profit before tax (PBT) Provision for tax: Current income tax (+)/(-) Deferred Income tax liab/asset (+) Fringe benefit tax (+)/(-) Tax adjustments for previous years Total Income tax Profit after Tax (NP) (PAT) Current year amount (Amt. In Lac) 129433.98 2645.86 126788.12 56217.41 2385.94 58603.35 68184.77 12094.42 29495.46 2529.95 29124.84 1374.94 27749.9 366.22 2530.53 29914.21 29914.21 4886.78 215.80 -Common size % 102.09 2.09 100 44.34 1.88 46.22 53.78 9.54 23.26 2.00 22.97 1.08 21.89 0.29 2.00 23.59 23.59 3.85 0.17 Previous year amount (Amt. In Lac) 112660.41 4226.17 108434.23 62208.93 2194.49 64403.42 44030.81 5843.6 22042.19 1278.84 17423.86 1436.92 15986.94 882.31 3487.73 18592.36 18592.36 2106.67 320.74 74 Common size % 103.90 3.90 100 57.37 2.02 59.39 40.61 5.39 20.33 1.18 16.09 1.33 14.74 0.81 3.22 17.15 17.15 1.94 0.30 0.07

5102.58 24811.64

4.02 19.57

2501.41 16090.97

2.31 14.84

INTERPRETATION:
 Material cost as a percentage of net sales is decrease from 57.37% to 44.34%  PBDIT is increasing from 16%to 23%  PBT is increasing constantly resulting at 24% .  Net profit is also significantly increasing from 14.84% to 19.57% .  It is reported a significant decrease from 3487.73 Lac in 2008-09 to 2530.53 Lac in 2009-10 which indicates that other income of the company in form of interest income have been decreased drastically in 2009-10 which in turn affects the profitability of the business.

Vertical Balance-sheet of Godrej Consumers Product Ltd as on 31 March, 2010

Particulars SOURCES OF FUNDS: Shareholders Funds Share Capital Reserves & Surplus Loan Funds Secured Loans Unsecured Loans Deferred Tax Liability (Net) TOTAL APPLICATION OF FUNDS: Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets TOTAL Current Year Rs. in Lac Common Size % Previous Year Rs. In Lac Common Size %

3081.90 79664.63 82746.53 1239.80 1239.80 632.12 84618.45

3.64 94.15 97.79 1.47 1.47 0.75 100

2569.54 51122.41 53691.94 1489.03 4800.00 6289.03 416.32 60397.29

4.25 84.64 88.90 2.47 7.95 10.41 0.70 100

27379.54 10823.75 16555.79 83.72 16639.51 52188.17 16804.82 3314.95 18570.42 604.42 15688.35 54982.97 37816.77 1375.43 39192.19 15790.77 84618.45

32.36 12.79 19.57 0.10 19.66 61.67 19.86 3.92 21.95 0.71 18.54 64.98 44.69 1.63 46.32 18.66 100

26654.29 9675.20 16979.08 249.67 17228.75 9788.59 12667.41 981.04 34456.81 900.64 11483.99 60489.89 23816.19 3293.75 27109.94 33379.96 60397.29

44.13 16.02 28.11 0.41 28.53 16.21 20.97 1.62 57.05 1.49 19.01 100.15 39.43 5.45 44.89 55.27 100

INTERPRETATION:
 Vertical analysis of the company refers to share of one thing to Sources of funds or Application of funds as 100.  Shareholders fund is increasing from 88.90%to97.79%  Most of the funds of the company are engaged in Investment of the company only. It forms about 62% of it in 2010.  Inventories also one of the major parts formed by 20% in 2010.This shows that company is making investment of the profit of the company.  Increase in reserves' and surplus from 85% to 95%  Inventories share declined to 19% in place of last years 21%.  debtors were increased to 3314.95 Lac in place of last years 981.04 Lac.

Analytical Balance-sheet: Analytical Balance Sheet as on March 31, 2010

Particulars APPLICATION OF FUNDS: 4. Fixed Assets a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work-in-Progress 6. Investments 7. Current Assets, Loans and Advances a) Inventories b) Sundry Debtors c) Cash and Bank Balances d) Other Current Assets e) Loans and Advances 8. Less: Current Liabilities and Provisions a) Current Liabilities b) Provisions 9. Net Current Assets TOTAL Less: 2. Loan Funds a) Secured Loans b) Unsecured Loans 3. Deferred Tax Liability (Net) TOTAL ASSETS SOURCES OF FUNDS: 1. Shareholders Funds a) Share Capital b) Reserves and Surplus Less: Miscellaneous Expenditure EQUITY OWNERS FUND 27379.54 10823.75 16555.79 83.72 16639.51 52188.17 16804.82 3314.95 18570.42 604.42 15688.35 54982.97 37816.77 1375.43 39192.19 15790.77 84618.45 1239.80 1239.80 632.12 1871.92 82746.53 26654.29 9675.20 16979.08 249.57 17228.75 9788.59 12667.41 981.04 34456.81 900.64 11483.99 60489.89 23816.19 3293.75 27109.94 33379.96 60397.29 1489.03 4800.00 6289.03 416.32 6705.35 53691.94 Current Year (Rs. In Lacs) Previous Year (Rs. In Lacs)

3081.90 79664.63 82746.53 82746.53

2569.54 51122.41 53691.94 53691.94

Trend Analysis:

Trend analysis for the Godrej Consumers Product Ltd from 2007 to 2010

Particulars Results for the year Sales and other income Index Profit before tax Index Profit after tax Index Gross block Index Net block Index Investments Index Net worth Index Net current assets

2006-07

2007-08

2008-09

2009-10

75851.56 1.00 13440.18 1.00 11722.19 1.00 24364.90 1.00 14812.81 1.00 7197.07 1.00 11090.46 1.00 (2799.28)

88668.44 1.17 16923.61 1.26 14811.61 1.26 26556.21 1.08 15457.94 1.04 7760.93 1.08 15049.92 1.35 (1247.28)

108434.23 1.43 18592.38 1.38 16090.97 1.37 26656.29 1.09 16979.08 1.14 9788.59 1.36 53691.94 4.84 33379.96

126788.12 1.67 29914.22 2.23 24811.64 2.11 27379.54 1.12 16555.79 1.12 52188.17 7.25 82746.53 7.46 15790.77

INTERPRETATION:

 Year 2006-2007 has been taken as the base year for the trend analysis.  Sales and other income has increased since 2006-07 and has continued the trend till 2009-10.  Profit before tax has steadily increased since 2006-07 to 2008-09 and has seen huge increase in 2009-10  Profit after tax is following the same trend as profit before tax and it has also seen gigantic boost in the year 2009-10. The company has doubled its net profit in the given period.  Gross block of the company has increased .  Net block of the company has increased since 2006-07 till 2008-09 and has gone down in the year 2009-10  The company has steadily increased its investments from 2006-07 to 2008-09 and it has added massive amount to the investments in the year 2009-10
.