Mid-Term Assignment

Subject: Accounting for Managerial Decision Making

IMRAN ALAM
MBA (FT) 1ST YEAR
ROLL NO. 26
Colgate
Palmolive (India)
Standalone Balance Sheet ------------------- in Rs. Cr. -------------------
  Mar '19 Mar '18
  12 mths 12 mths
Sources Of Funds
Total Share Capital 27.20 27.20
Equity Share Capital 27.20 27.20
Reserves 1,419.55 1,497.41
Networth 1,446.75 1,524.61
Secured Loans 77.71 0.00
Total Debt 77.71 0.00
Total Liabilities 1,524.46 1,524.61
  Mar '19 Mar '18
  12 mths 12 mths
Application Of Funds
Gross Block 1,747.60 1,545.52
Less: Accum. Depreciation 556.75 399.60
Net Block 1,190.85 1,145.92
Capital Work in Progress 198.70 158.58
Investments 31.15 31.16
Inventories 248.57 226.71
Sundry Debtors 209.79 201.03
Cash and Bank Balance 399.35 456.16
Total Current Assets 857.71 883.90
Loans and Advances 348.06 344.32
Total CA, Loans & Advances 1,205.77 1,228.22
Current Liabilities 1,019.77 959.80
Provisions 82.25 79.45
Total CL & Provisions 1,102.02 1,039.25
Net Current Assets 103.75 188.97
Total Assets 1,524.45 1,524.63
Contingent Liabilities 607.89 480.55
Book Value (Rs) 53.19 56.05

Profit & Loss - Colgate-Palmolive (India) Ltd. Rs (in Crores)

  Mar'19 Mar'18

  12Months 12Months

Sales Turnover 4462.43 4328.42

Excise Duty .00 140.45

NET SALES 4462.43 4187.98

Other Income 37.6554 38.8205

TOTAL INCOME 4500.09 4226.80

Manufacturing Expenses 46.45 44.16

Material Consumed 1580.70 1513.36

Personal Expenses 295.90 305.93

Selling Expenses 564.71 526.83

Administrative Expenses 738.61 685.32

Expenses Capitalised .00 .00

Provisions Made .00 .00

TOTAL EXPENDITURE 3226.37 3075.61

Operating Profit 1236.06 1112.37

EBITDA 1273.71 1151.19

Depreciation 159.17 156.51

Other Write-offs .00 .00

EBIT 1114.55 994.68

Interest 2.50 .00

EBT 1112.05 994.68

Taxes 366.99 309.66

Profit and Loss for the Year 745.06 685.03

Non Recurring Items 30.60 -10.57

Other Non Cash Adjustments .00 .00

Other Adjustments -.10 -1.08

REPORTED PAT 775.57 673.37

Preference Dividend .00 .00

Equity Dividend 561.80 281.60

Equity Dividend (%) 2065.56 1035.35

Shares in Issue (Lakhs) 2719.86 2719.86

EPS - Annualised (Rs) 28.52 24.76

Cash Flow Colgate-Palmolive (India) Ltd.
Rs (in Crores)

Particulars Mar'19 Mar'18

Profit Before Tax 1112.05 994.68

Net Cash Flow from Operating Activity 983.00 693.93

Net Cash Used in Investing Activity -95.71 -207.34

Net Cash Used in Financing Activity -814.68 -379.77

Net Inc/Dec In Cash and Cash Equivalent 72.61 106.83

Cash and Cash Equivalent - Beginning of the Year 305.39 198.56

Cash and Cash Equivalent - End of the Year 378.00 305.39

Ratios for financial year 2018-19

1. Current ratio = current assets/current liabilities
= 1205.77/1102.02
= 1.09

2. Quick ratio = (current assets – inventories)/current liabilities

= (1205.77 - 248.57)/1102.02
= 957.2/1102.02
= 0.87

3. Operating profit margin(%) = net operating profit/net sales * 100

= 1236.06/4462.43 * 100
= 27.69

4. Assets turnover ratio = Net sales / average total assets

=4462.43/1524.54
= 2.93

( Average total assets= total assets at the beginning of the year + at the end / 2)
=1524.45 + 1524.63/ 2
=1524.54

5. Inventory turnover ratio= Cost of goods sold/ average inventory

 = 4256.81/237.64
= 17.91

(Average inventory= Beginning inventory + Ending inventory/ 2)

= 226.71 + 248.57/ 2
= 237.64

Ratios for financial year 2017-18

1) Current ratio = current assets/current liabilities
=1228.22/1039.25
= 1.18

2) Quick ratio = (current assets – inventories)/current liabilities

=(1228.22 - 226.71)/1039.25
=1001.51/1039.25
=0.96

3) Operating profit margin(%)= net operating profit/net sales * 100

= 1112.37/ 4328.42 * 100
= 26.56

4) Assets turnover ratio = Net sales / average total assets

=4187.98/1399.22
= 2.99

( Average total assets= total assets at the beginning of the year + at the end / 2)
=1524.63+1273.81/2
=1399.22

5) Inventory turnover ratio= Cost of goods sold/ average inventory

= 3987.31/259.63
= 15.36

(Average inventory= Beginning inventory + Ending inventory)/ 2

= (292.55 + 226.71)/2
= 259.63

INTERPRETATIONS:
 Current ratio for the financial year 2017-18 was 1.18 and for the financial
year 2018-19 is 1.09 i.e. there is a decrease in current ratio because of
decrease in current assets which indicates that company needs to pay some
of its current liabilities to improve its current ratio.
 Quick ratio for the financial year 2017-18 was 0.96 and for the financial year
2018-19 is 0.87 i.e. there is a decrease in quick ratio which indicates that
companies financial position and liquidity has been decreased which further
suggests that company will struggle in paying its debts.

 Operating profit margin for the financial year 2017-18 was 26.56 and for the
financial year 2018-19 is 27.69 i.e. there is a increase which indicates that
company is improving the efficiency of controlling its overall costs.

 Assets turnover ratio for the financial year 2017-18 was 2.99 and for the
financial year 2018-19 is 2.93 i.e. there is a decrease which indicates that it is
not efficiently using its assets to generate sales. Company can increase a
low asset turnover ratio by continuously using assets, limiting purchases
of inventory, and increasing sales without purchasing new assets.

 Inventory turnover ratio for the financial year 2017-18 was 15.36 and for the
financial year 2018-19 is 17.91 i.e. there is a increase which indicates that the
company's product is in demand. It could also mean the company initiated an
effective advertising campaign or sales promotion that caused a boost in
sales.