Professional Documents
Culture Documents
SAMPLE OF STUDY:
1. Hindustan Unilever Limited
2. Imperial Tobacco Company of India Limited
3. Procter & Gamble Hygiene and Health Care Ltd
4. Nestle India Limited
5. Godrej Consumer Products Ltd
Ratio analysis is carried out for analysis of data and it has its own
limitation which also applies to the study.
The period considered for the study is last 5 years. It is not possible
to find out the life time performance of the FMCG industry.
DATA ANALYSIS
WORKING CAPITAL
WORKING CAPITAL OF HUL WORKING CAPITAL OF ITC WORKING CAPITAL OF PGHH
1,600.00 14,000.00 120,000.00
1,400.00
12,000.00 100,000.00
1,200.00
10,000.00
1,000.00 80,000.00
8,000.00
800.00 60,000.00
6,000.00
600.00
4,000.00 40,000.00
400.00
2,000.00 20,000.00
200.00
0.00 0.00
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 0.00
-200.00 2012 2013 2014 2015 2016
2,000.00 -400
0.00
2012 2013 2014 2015 2016 -500
ANALYSIS OF VARIANCE (ANOVA)
VARIABLES ANOVA (Fc VALUE) HYPOTHESIS
(Ft = 2.866081) ACCEPTED / REJECTED
1. Cash Conversion Cycle 52.44 Rejected
2. Cash Ratio 4.32 Rejected
3. Inventory Turnover Ratio 60.77 Rejected
4. Inventory Conversion Period 71.65 Rejected
5. Working Capital Turnover Ratio 2.33 Accepted
6. Operating Cycle Ratio 56.39 Rejected
7. Debtors Turnover Ratio 109.01 Rejected
8. Average Collection Period 19.81 Rejected
9. Creditors Turnover Ratio 46.29 Rejected
10. Average Payment Period 33.38 Rejected
11. Current Ratio 6.41 Rejected
12. Quick Ratio 10.13 Rejected
13. Net Profit Ratio 11.05 Rejected
14. Return On Assets Ratio 16.84 Rejected
15. Return On Equity 34.44 Rejected
16. Return On Capital Employed 49.05 Rejected
ANOVA
120
109.01
100
80
71.65
60.77
60 56.39
52.44
49.05
46.29
40 34.44
33.38
19.81
20 16.84
10.13 11.05
6.41
4.32 2.33
0
CCC CR ITR ICP WCTR OCR DTR ACP CTR APP CR QR NPR ROA ROE ROCE
FINDINGS
Important role in the company’s operations and requires the efficient
management.
The profitability and liquidity of the companies are directly linked to the
efficient management of working capital.
To resolve the uncertainty about cash flow prediction and lack of
synchronization between cash receipts and payments, the firm should
develop appropriate strategies for cash management.
The main objective of the WCM is to arrange sufficient funds needed for
it from the best available cost effective source.
ANOVA test reveals that there is significant relationship between
different variables defined in study and working capital management.
CONCLUSION
The results of ratio analysis and ANOVA; shows that there is positive
relationship between working capital variables and working capital
management of FMCG industry.
Data analysis and hypothesis testing reveals that sampled companies
manage their working capital in more efficient ways.
The managers are able to create balance between corporate profitability
and liquidity and get optimum working capital management.
Managing cash, accounts receivables and inventories will ultimately
increase profitability.
Creates value for the stockholders by managing working capital
efficiently.
THANK YOU