“

ASTUDYONFI
NANCI
ALSTATEMENTANALYSI
SINDODLADAI
RY.LTD.
,
ATPALAMANER”
.

PROJECTREPORT

Submi
tt
edt
o

SRIPADMAVATHIMAHI
LAVI
SVAVI
DYALAYAM

I
nPar
ti
alf
ulf
il
lmentoft
he
Requi
rement
sfort
heawar
doft
hedegr
eeof
MASTEROFCOMMERCE
By
KSI
REESHA(
Reg.
No:
2019COM96022)

Undert
heGui
danceof

Mr
s.P.NI
SHI
THA

M.
Com

ASSI
STANTPROFESSOR

DEPARTMENTOFBUSI
NESSMANAGEMENT

Sr
iPadmav
athiMahi
laVi
svav
idy
alay
am

(
TIRUPATI
-517502)

(
2019-
2021)

1
 DEPARTMENTOFBUSI
NESMANAGEMENT

SRIPADMAVATHIMAHI
LAVI
SVAVI
DYALAYAM

(
TIRUPATI
-517502)

(
2019-
2020)

CERTI
FICATE

Thi
sist
hatpr
ojectwor
kent
it
led“
ASTUDYONFI
NANCI
ALSTATEMENTANALYSI
SIN
DODLA DAI
RY.
LTD AT PALAMANER,
”isa bonaf
idewor
ksubmi
tt
ed byK.
Sir
eesha
(
Reg.
No2019COM96022)i
nrequi
rement
sfort
heawar
doft
hedegr
eeMASTER OF
COMMERCEbySRIPADMAVATIMAHI
LA VI
SVAVI
DYALAYAM,TI
RUPATIdur
ingt
he
academi
cyear2019-
2021.

HEADOFTHEDEPARTMENT PROJECT

GUI
DE

Pr
of.
J.KATYAYANI Mr
s.P.Ni
shi
tha

B.Tech,
MBA,
M.Tech,
Ph.
D., M.Com,

Pr
ofessorandHead, Assi
stantpr
ofessor
,

Dept
.ofBusi
nessManagement Dept
.ofBusi
ness
Management

SPMVV, SPMVV,

2
Ti
rupat
i. Ti
rupat
i.

DECLARATI
ON

Iher
ebydecl
aret
hatt
hepr
ojectr
epor
tent
it
led"
ASTUDYANFI
NANCI
ALSTATEMENT
ANALYSI
SINDODLADAI
RY.
LTD.
,ATPALAMANER"
.Car
ri
edoutundert
hegui
danceof
Mr
s.P.NI
SHI
THA,Facul
tyi
nCommer
ce,Depar
tmentofBusi
nessManagement
,is
submi
tt
edi
npar
ti
alf
ulf
il
lmentf
orDegr
eeofMast
erofCommer
cei
nSRIPADMAVATHI
MAHI
LAVI
SVAVI
DYALAYAM,TI
RUPATI
,isent
ir
elyor
igi
nalandhasnotbeensubmi
tt
ed
t
oanyot
heruni
ver
sit
yori
nst
it
uti
onf
ort
heawar
dofanyot
herdegr
eeordi
ploma.

Pl
ace:Ti
rupat
i KSI
REESHA

Dat
e: (
Reg.
No2018COM96022)

3
 ACKNOWLEDGMENTS

Al
argenumberofi
ndi
vi
dual
shav
econt
ri
but
ed i
n doi
ng t
hisr
epor
t,Iam
t
hankf
ult
oal
lthem f
ort
hei
rhel
pandencour
agement
.

Iam v
eryhappyt
oexpr
essmypr
ofoundsensegr
ati
tudeandi
ndependencest
o
Pr
of.
J. KATYAYANI MBA,B. Tech,M.Tech,Ph.
D.,Depar
tment of Busi
ness
Management
,SPMVV,Ti
rupat
i,f
orherconst
antmot
ivat
ion and v
aluabl
e suppor
t
t
hroughoutt
hepr
ojectwor
k.

Iwoul
dli
ket
oexpr
essmypr
ofoundsenseofgr
ati
tudeandi
ndependencest
o
Pr
of.
B.VI
JAYALAKSHMI
,M.Com,MSI
S,MBAandPh.D,Headoft
heDepar
tmentof
Busi
nessManagement
,SPMVV,Ti
rupat
iforgi
vi
ngt
hisoppor
tuni
tyandhercont
inuous
suppor
tthr
oughoutt
hepr
ojectwor
k.

Iexpr
essmydeepsenseofgr
ati
tudeandsi
ncer
ethankst
omypr
ojectgui
de,
Mr
s.P.NI
SHI
THAM.Com,Depar
tmentofBusi
nessManagementSPMVV,Ti
rupat
i,f
or
herconst
antmot
ivat
ionandv
aluabl
esuppor
tthr
oughoutt
hepr
ojectwor
k.

Iwoul
dli
ket
oexpr
essmyt
hankst
omyi
ndust
ri
algui
deFi
nanceManagerf
or
gr
ant
ingmeper
missi
ont
odomypr
ojecti
nDODLADAI
RYLTD.

It
hankal
lmyf
ami
l
ymember
sfort
hei
rconst
antand cont
inuoussuppor
t
t
hroughoutt
hecour
se.

Iwoul
dli
ket
oext
endmysi
ncer
ethankst
omydear
estf
ri
endsandal
somy
cl
assmat
esf
ort
hei
rsuppor
tint
hei
rint
hesuccessf
ulcompl
eti
onoft
hepr
ojectwor
k.

4
 TABLEOFCONTENTS

S.
NO I
NDEX PAGENO.

I THEORETI
CALFRAMEWORK

1.
1Int
roduct
ion

1.
2Indust
ryPr
ofi
l
e

1.
3CompanyPr
ofi
l
e

I
I RESEARCHMETHODOLOGY

2.
1Needf
ort
hest
udy

2.
2Scopeoft
heSt
udy

2.
3Obj
ect
ivesoft
hest
udy

2.
4Resear
chMet
hodol
ogy

2.
4.1Pr
imar
ydat
a

2.
4.2Secondar
ydat
a

2.
4.3Tool
susedf
oranal
ysi
s

2.
5Li
mit
ati
onsoft
hest
udy

I
II DATAANALYSI
SANDI
NTERPRETATI
ON

I
V FI
NDI
NGS,
SUGGESTI
ONS&CONCLUSI
ONS

4.
1Fi
ndi
ngs

4.
2Suggest
ions

4.
3Concl
usi
on

V ANNEXURE

5
 VI BI
BLI
OGRAPHY

LI
STOFGRAPHS

S.
NO I
NDEX PAGENO.

3.
1 PROFI
TABI
LITYRATI
OS

A.
NetPr
ofi
tRat
io

B.Gr
osspr
ofi
trat
io

3.
2 LI
QUI
DITYRATI
OS

A.CashRat
io

B.Cur
rentRat
io

C.Qui
ckRat
io

3.
3 SOLVENCYRATI
OS

A.Debtt
oTot
alAsset
sRat
io

B.NetWort
htoTot
alAsset
s
Rat
io

3.
4 ACTI
VITYRATI
OS

A.Asset
sTur
nov
erRat
io

B.I
nvent
oryTur
nov
erRat
io

6
 CHAPTER-
I

1.THEORETI
CALFRAMEWORK

1.
1INTRODUCTI
ON

1.
2INDUSTRYPROFI
LE

1.
3COMPANYPROFI
LE

7
 1.
1INTRODUCTI
ON

I
NTRODUCTI
ONTOFI
NANCE:

Fi
nancest
hel
i
febl
ood ofev
erybusi
nessact
ivi
tywi
thoutwhi
cht
he
wheel
s of moder
n busi
ness or
gani
zat
ion sy
stem cannot be gr
eased.Fi
nance
managementi
smanager
ialact
ivi
ty,
whi
chi
sconcer
nedwi
thpl
anni
ngandcont
rol
l
ingof
t
hef
ir
m’sf
inanci
alr
esour
ces.Fi
nancei
sascar
cer
esour
ceandi
thast
obemanaged
ef
fi
ciencyf
ort
hesuccessf
ulf
unct
ionofanycompany
.Sev
eral
compani
eshav
ecomet
o
gr
iefmai
nlybecauseofi
nef
fi
cientmanagementoff
inance,i
nspi
teofot
herf
avor
abl
e
condi
ti
ons.

”Fi
nance”i
sabr
oadt
ermt
hatdescr
ibest
wor
elat
edact
ivi
ti
es:t
hest
udyof
how moneyi
smanagedandt
heact
ualpr
ocessofacqui
ri
ngneededf
unds.Because
i
ndi
vi
dual
s,busi
nessesandgov
ernmentent
it
iesal
lneedf
undi
ngt
ooper
ate,t
hef
iel
dis
of
tensepar
atedi
ntot
hreesub-
cat
egor
ies:
per
sonal
finance,
andpubl
i
cfi
nance.

Al
lthr
eecat
egor
iesar
econcer
nedwi
thact
ivi
ti
essuchaspur
sui
ngsound
i
nvest
ment
s,obt
aini
ngl
ow-
costcr
edi
t,al
l
ocat
ingf
undsf
orl
i
abi
l
iti
es,andbanki
ng.Yet
eachhasi
tsownspeci
fi
cconsi
der
ati
ons.Forexampl
e,i
ndi
vi
dual
sneedt
opr
ovi
sionf
or
r
eti
rementexpenses,whi
chmeansi
nvest
ingenoughmoneydur
ingt
hei
rwor
kingy
ear
s
andensur
ingt
hatt
hei
rassetal
l
ocat
ionf
it
sthei
rlong-
ter
m pl
ans.Al
argecompany
,on
t
heot
herhand,mayhav
etodeci
dewhet
hert
orai
seaddi
ti
onalf
undst
hroughabond
i
ssueorst
ockof
fer
ing.I
nvest
mentbanksmayadv
iset
hef
ir
m onsuchconsi
der
ati
ons
andhel
pthem mar
kett
hesecur
it
ies.

Asf
orpubl
i
cfi
nance,i
naddi
ti
ont
omanagi
ngmoneyf
ori
tsday
-to-
day
oper
ati
ons,agov
ernmentbodyal
sohasl
argersoci
alr
esponsi
bil
i
ties.I
tsgoal
sincl
ude
at
tai
ninganequi
tabl
edi
str
ibut
ionofi
ncomef
ori
tsci
ti
zensandenact
ingpol
i
ciest
hat
l
eadt
oast
abl
eeconomy
.

Fort
hepur
poseofst
art
inganynewbusi
ness/
vent
ure,anent
repr
eneurgoes
t
hrought
hef
oll
owi
ngst
agesofdeci
sionmaki
ng.

8
St
age1:-Deci
dewhi
chasset
stobuyi
.e.
,pr
emi
ses,
machi
ner
y,equi
pmentet
c.

St
age2:-Det
ermi
ningwhati
stot
ali
nvest
mentr
equi
redf
orbuy
ingasset
s.

St
age3:-Apar
tfr
om buy
ingasset
stheent
repr
eneurwoul
dal
soneedt
odet
ermi
nehow
muchcashhewoul
dneedt
orunt
hedai
l
yoper
ati
onsi
.e.
,pay
mentf
orr
aw mat
eri
al,
Sal
ari
es,
wageset
c.I
not
herwor
ds,
thi
sisal
sodef
inedaswor
kingcapi
tal
requi
rement
.

St
age4:-Thenextst
agei
stodeci
det
hatal
lsour
ces,doest
heent
repr
eneurneedt
o
t
alkt
ofi
nancet
het
otali
nvest
ment
.Thesour
cescoul
dbeshar
ecapi
tal(
incl
udi
ng
ent
repr
eneur
’s own f
und)orbar
rowi
ng f
rom bank ori
nvest
mentf
rom f
inanci
al
i
nst
it
uti
onset
c.

Whi
l
edeci
dinghow mucht
akef
rom eachsour
ce,t
heent
repr
eneurwoul
d
keepi
nmi
ndt
hecostofcapi
taleachsour
ce.Asanent
repr
eneurhewoul
dli
ket
okeep
t
hecostofcapi
tal
low.

Thus,f
inanci
almanagementi
s concer
ned wi
th ef
fi
cientacqui
sit
ion and
al
l
ocat
ionsoff
undswi
thanobj
ect
ivet
omakepr
ofi
tforowner
s.I
not
herwor
ds,f
ocus
off
inanci
almanagementi
stoaddr
esst
hreemaj
orf
inanci
aldeci
sionar
easnamel
y.

•I
nvest
ment

•Fi
nanci
ngand

•Di
vi
denddeci
sion

I
MPORTANCEOFFI
NANCE

Thedev
elopmentdur
ingpastdecadeshav
epr
ovedt
hef
inancef
unct
ionas
f
oremosti
mpor
tantmanager
ialf
unct
ion,nowaday
sthepol
i
cyst
atementofbusi
ness
concer
ninv
ari
abi
l
ityi
ncl
udest
hesef
ouract
ivi
ti
es.

•Pr
oduct
ion

•Per
sonal
orhumanr
esour
ces

•Mar
ket
ing

9
•Fi
nance

Managi
ngf
inancesi
sav
eryi
mpor
tantbusi
nessaspectoft
oday
,whi
chmeanshav
inga
chancet
owor
ktowar
dast
abl
eandr
ewar
dingcar
eeri
nfi
nanci
almanagementf
iel
d.
Fi
nanci
alpl
anni
nghel
psi
ndeci
dingwhatt
ospend,whent
ospend,how t
ospendand
howmucht
ospendaccor
dingt
othef
undsav
ail
abi
l
ity
.Fi
nancepr
ovi
dest
henecessar
y
f
orcont
inuedbusi
nessoper
ati
onsofal
lty
pe.Asamat
teroff
act
,fi
nanci
aldeci
sioni
s
i
nvol
vedsoext
ensi
vel
yineacht
ypeofbusi
nessact
ivi
tyt
hati
tmayber
ight
lycal
l
eda
bi
ndi
ng f
orce,i
tisso i
nter
mingl
ed wi
thot
herf
unct
ions-
product
ion,mar
ket
ing and
per
sonnel
etc.
,thatt
her
eisv
erydi
ff
icul
tinappr
eci
ati
ngt
hepar
titpl
ace.

FI
NANCI
ALMANAGEMENT

Fi
nanci
alManagementi
sthatmanager
ialact
ivi
tywhi
chi
sconcer
nedwi
th
t
hepl
anni
ngandcont
rol
l
ingoft
hef
ir
m’sf
inance.Fi
nancei
soneoft
hef
oundat
ionsof
al
lki
ndsofeconomi
cact
ivi
ti
es.Fi
nancei
sthel
i
fe-
bloodofabusi
ness.Thef
inanci
al
managementst
udydeal
swi
tht
hepr
ocessofpr
ocur
ingnecessar
yfi
nanci
alr
esour
ce
andt
hei
rjudi
cioususewi
thav
iewt
oFi
nanci
alst
atementanal
ysi
smaxi
mizi
ngt
hev
alue
oft
hef
ir
m andt
her
ebyt
hev
alueoft
heowner
si.
e.,equi
tyshar
ehol
der
sinacompany
.
Pr
act
ici
ng manager
sar
eint
eresti
nthi
ssubj
ectbecauseamong t
hemostcr
uci
al
deci
sionsoft
hef
ir
m ar
ethosewhi
chr
elat
etof
inance,andanunder
standi
ngoft
he
t
heor
yoff
inanci
almanagementpr
ovi
dest
hem wi
thconcept
ualandanal
yti
cali
nsi
ght
s
t
omaket
hosedeci
sionsski
l
lful
l
y.

Fi
nancemaybedef
inedast
hear
tandsci
enceofmanagi
ngmoney
.The
maj
oroff
inancei
s:

•Fi
nanci
alser
vices

•Fi
nanci
almanagement

Whi
l
efi
nanci
alser
vicesar
econcer
nwi
tht
hedesi
gnanddel
i
ver
yofadv
ice
andf
inanci
alpr
oduct
stoi
ndi
vi
dual
s,busi
nessesandgov
ernment
swi
thi
nthear
eaof

10
banki
ngandr
elat
edi
nst
it
uti
ons,per
sonalf
inanci
alpl
anni
ng,i
nvest
ment
s,r
ealest
ates,
i
nsur
anceandsoon,f
inanci
almanagementi
sconcer
nwi
tht
hedut
iesoft
hef
inanci
al
manageri
nthebusi
nessf
ir
m.

Fi
nanci
almanagementact
ivel
ymanaget
hef
inanci
alaf
fai
rsofanyt
ypeof
busi
ness,namel
y,f
inanci
alandnon-
fi
nanci
al,pr
ivat
eandpubl
i
c,l
argeandsmal
l
,pr
ofi
t-
seeki
ngandnot
-f
or-
prof
it
.Theyper
for
m suchv
ari
edt
asksasbudget
ing,f
inanci
ng
f
orecast
ing,cash management
,cr
edi
tadmi
nist
rat
ion,i
nvest
mentanal
ysi
s,f
unds
management
sandsoon.I
nrecenty
ear
s,t
hechangei
nregul
ator
yandeconomi
c
env
ironment
scoupl
edwi
tht
hegl
obal
i
zat
ionofbusi
nessact
ivi
ti
eshasi
ncr
easedt
he
compl
exi
tyaswel
last
hei
mpor
tanceoft
hef
inanci
almanager
’sdut
ies.Asar
esul
t,t
he
f
inanci
almanagementf
unct
ionshav
ebecomemor
edemandi
ngandcompl
ex.

Meani
ngofFi
nanci
alManagement

Fi
nanci
almanagementi
sthatmanager
ialact
ivi
tywhi
chi
sconcer
nedwi
th
pl
anni
ngandcont
rol
l
ingoft
hef
ir
m’sf
inanci
alr
esour
ces.I
not
herwor
ds,
iti
sconcer
ned
wi
thacqui
ri
ng,f
inanci
ngandmanagi
ngasset
stoaccompl
i
sht
heov
eral
lgoalofa
busi
nessent
erpr
ise(
mai
nlyt
omax
imi
zet
heshar
ehol
der
’sweal
th)
.

I
ntoday
’swor
ldwher
eposi
ti
vecashf
low i
smor
eimpor
tantt
hanbookpr
ofi
t,f
inanci
al
managementcanal
sodef
ineaspl
anni
ngf
ort
hef
utur
eofabusi
nessent
erpr
iset
o
ensur
eaposi
ti
vecashf
low.Someexper
tsal
sor
efert
ofi
nanci
almanagementast
he
sci
enceofmoneymanagement
.

Def
ini
ti
on

“
Financi
almanagementi
sthatar
eaofbusi
nessmanagementdev
otedt
oaj
udi
ci
oususeof
capi
tal
andacar
eful
sel
ect
ionoft
hesour
ceofcapi
tal
inor
dert
oenabl
easpendi
nguni
tto
mov
eint
hedi
rect
ionofr
eachi
ngt
hegoal
s.
”

– 
J.F.
Br
andl
ey

11
“
Financi
almanagementcompr
isest
hef
orecast
ing,
planni
ng,
organi
zi
ng,
dir
ect
ing,
coor
dinat
ingandcont
rol
l
ingofal
lact
ivi
ti
esr
elat
ingt
oacqui
sit
ionandappl
i
cat
ionoft
he
f
inanci
alr
esour
cesofanunder
taki
ngi
nkeepi
ngwi
thi
tsf
inanci
alobj
ect
ive”
.

-Ray
mond
chamber
s

“
Financi
almanagementi
sconcer
nedwi
tht
hemanager
ial
deci
sionst
hatr
esul
tint
he
acqui
sit
ionandf
inanci
ngofshor
tter
m andl
ong-
ter
m cr
edi
tfort
hef
ir
m”.

-Phi
ll
ippat
us

Assuchi
tdeal
swi
tht
hesi
tuat
ionsofspeci
fi
casset
s,t
hesel
ect
ionofspeci
fi
c
pr
obl
em ofsi
zeandgr
owt
hofanent
erpr
ise.Theanal
ysi
soft
hesedeci
sionsi
sbased
ont
heexpect
edi
nfl
owsoff
undsandt
hei
ref
fectonmanager
ial
obj
ect
ives.

Fi
nanci
alFunct
ions:

I
tmaybedi
ff
icul
ttosepar
atet
hef
inancef
unct
ionsf
rom pr
oduct
ion,mar
ket
ing
and ot
herf
unct
ions,butt
he f
unct
ions t
hemsel
ves can be r
eadi
l
yident
if
ied.The
f
unct
ionsofr
aisi
ngf
undsi
nvest
ingt
hem i
nasset
sanddi
str
ibut
ingr
etur
nsear
nedf
rom
asset
stoshar
ehol
der
sar
erespect
ivel
yknownas.
•Long–t
erm asset
s-mi
x(or
)Inv
est
mentDeci
sion.
•Capi
tal
–Mi
x(or
)Fi
nanci
ngDeci
sion.
•Pr
ofi
tal
l
ocat
ion(
or)Di
vi
dendDeci
sion.
•Shor
t–t
erm asset–Mi
x(or
)Li
qui
dit
yDeci
sion.
Goal
sofFi
nanci
alManagement
:
•Maxi
mizet
hev
alueoft
hef
ir
mtoi
tsequi
tyshar
ehol
der
s.
•Maxi
mizat
ionofpr
ofi
t.
•Maxi
mizat
ionofear
ningspershar
e.
•Maxi
mizat
ionofr
etur
nonequi
ty(
def
inedasequi
tyear
nings/
networ
th)
.
•Mai
ntenanceofl
i
qui
dasset
sint
hef
ir
m.

12
•Ensur
ingmaxi
mum oper
ati
onalef
fi
ciencyt
hroughpl
anni
ngdi
rect
ingandcont
rol
l
ingof
t
he ut
il
izat
ionoft
hef
unds.
•Bui
l
dingupofadequat
ereser
vesf
orf
inanci
nggr
owt
handexpansi
on.

I
mpor
tanceofFi
nanci
alManagement
Fi
nanci
almanagementi
soneoft
hemosti
mpor
tantr
esponsi
bil
i
tiesof
owner
sandbusi
nessmanager
s.Theymustconsi
dert
hepot
ent
ialconsequencesof
t
hei
rmanagementdeci
sionsonpr
ofi
ts,
cashf
lowandont
hef
inanci
alcondi
ti
onoft
he
company
.The act
ivi
ti
es ofev
eryaspectofa busi
ness hav
e an i
mpacton t
he
company
'sf
inanci
alper
for
mance and mustbe ev
aluat
ed and cont
rol
l
ed by t
he
busi
nessowner
.Takeal
ookatt
heobj
ect
ivesi
nvol
ved:

 Mai
ntai
ningenoughsuppl
yoff
undsf
ort
heor
gani
zat
ion;
 Ensur
ing shar
ehol
der
s of t
he or
gani
zat
ion t
o getgood r
etur
ns on t
hei
r
i
nvest
ment
;
 Opt
imum andef
fi
cientut
il
iz
ati
onoff
unds;
 Cr
eat
ingr
eal
andsaf
einv
est
mentoppor
tuni
ti
est
oinv
esti
n.

13
 Fi
nanci
almanagementi
soneoft
hemosti
mpor
tantaspect
sinbusi
ness.
Fi
nancei
sthel
i
febl
oodofbusi
nessor
gani
zat
ion.I
tneedst
omeett
her
equi
rementof
t
he busi
nessconcer
n.Each and ev
erybusi
nessconcer
n mustmai
ntai
n adequat
e
amountoff
inancef
ort
hei
rsmoot
hrunni
ngoft
hebusi
nessconcer
nandal
somai
ntai
n
t
hebusi
nesscar
eful
l
ytoachi
evet
hegoaloft
hebusi
nessconcer
n.Thebusi
nessgoal
canbeachi
evedonl
ywi
tht
hehel
pofef
fect
ivemanagementoff
inance.Wecan’
t
negl
ectt
hei
mpor
tanceoff
inanceatanyt
imeatandatanysi
tuat
ion.Someoft
he
i
mpor
tanceoft
hef
inanci
almanagementi
sasf
oll
ows:

Fi
nanci
alPl
anni
ng:

Fi
nanci
almanagementhel
pst
odet
ermi
net
hef
inanci
alr
equi
rementoft
he
busi
nessconcer
nandl
eadst
otakef
inanci
alpl
anni
ngoft
heconcer
n.Fi
nanci
alpl
anni
ng
i
sani
mpor
tantpar
toft
hebusi
nessconcer
n,whi
chhel
pst
opr
omot
ionofanent
erpr
ise

Acqui
sit
ionofFunds:

14
 Fi
nanci
almanagementi
nvol
ves t
he acqui
sit
ion ofr
equi
red f
inance t
othe
busi
ness concer
n.Acqui
ri
ng needed f
unds pl
ay a maj
or par
tof t
he f
inanci
al
management
,whi
chi
nvol
vepossi
blesour
ceoff
inanceatmi
nimum cost
.

Pr
operUseofFunds:

Pr
operuseandal
l
ocat
ionoff
undsl
eadst
oimpr
ovet
heoper
ati
onalef
fi
ciency
oft
hebusi
nessconcer
n.Whent
hef
inancemanagerusest
hef
undspr
oper
ly,t
heycan
r
educet
hecostofcapi
tal
andi
ncr
easet
hev
alueoft
hef
ir
m.

Fi
nanci
alDeci
sion:

Fi
nanci
almanagementhel
pst
otakesoundf
inanci
aldeci
sioni
nthebusi
ness
concer
n.Fi
nanci
aldeci
sionwi
l
laf
fectt
heent
ir
ebusi
nessoper
ati
onoft
heconcer
n.
Becauset
her
eisa di
rectr
elat
ionshi
p wi
thv
ari
ousdepar
tmentf
unct
ionssuch as
mar
ket
ing,
product
ionper
sonnel
,et
c.

I
mpr
ovePr
ofi
tabi
li
ty:

Pr
ofi
tabi
l
ityoft
heconcer
npur
elydependsont
heef
fect
ivenessandpr
oper
ut
il
izat
ionoff
undsbyt
hebusi
nessconcer
n.Fi
nanci
almanagementhel
pst
oimpr
ove
t
hepr
ofi
tabi
l
ityposi
ti
onoft
heconcer
nwi
tht
hehel
pofst
rongf
inanci
alcont
roldev
ices
suchasbudget
arycont
rol
,rat
ioanal
ysi
sandcostv
olumepr
ofi
tanal
ysi
s.

I
ncr
easet
heVal
ueoft
heFi
rm:

Fi
nanci
almanagementi
sver
yimpor
tanti
nthef
iel
dofi
ncr
easi
ngt
heweal
thof
t
hei
nvest
orsandt
hebusi
nessconcer
n.Ul
ti
mat
eai
m ofanybusi
nessconcer
nwi
l
l
achi
evet
hemaxi
mum pr
ofi
tandhi
gherpr
ofi
tabi
l
ityl
eadst
omaxi
mizet
heweal
thoft
he
i
nvest
orsaswel
last
henat
ion.

Pr
omot
ingSav
ings:

Sav
ingsar
epossi
bleonl
ywhent
hebusi
nessconcer
near
nshi
gherpr
ofi
tabi
l
ity
15
and maxi
mizi
ng weal
th.Ef
fect
ivef
inanci
almanagementhel
ps t
o pr
omot
ing and
mobi
l
izi
ngi
ndi
vi
dual
andcor
por
atesav
ings.

  Nowday
sfi
nanci
almanagementi
sal
sopopul
arl
yknownasbusi
nessf
inanceor
cor
por
atef
inances.Thebusi
nessconcer
norcor
por
atesect
orscannotf
unct
ionwi
thout
t
hei
mpor
tanceoft
hef
inanci
almanagement
.

Ef
fect
iveUt
il
izat
ionofFunds:

Thef
inancemanageri
sal
sor
esponsi
blef
oref
fect
iveut
il
izat
ionoff
unds.He
hast
opoi
ntoutsi
tuat
ionswher
ethef
undsar
ebei
ngkepti
dleorwher
epr
operuseof
f
undsi
snotbei
ngmade.Al
lthef
undsar
epr
ocur
edatacer
tai
ncostandaf
terent
ail
i
ng
acer
tai
namountofr
isk.I
fthesef
undsar
enotut
il
izedi
nthemannersot
hatt
hey
gener
ateasi
ncomehi
ghert
hant
hecostofpr
ocur
ingt
hem t
her
eisnopoi
nti
nrunni
ng
t
hebusi
ness.Hence,i
tiscr
uci
alt
oempl
oyt
hef
undspr
oper
lyandpr
ofi
tabl
y.Someof
t
heaspect
soff
undsut
il
izat
ionar
e:-

 Ut
il
izat
ionf
orf
ixedasset
s:

Thef
undsar
etobei
nvest
edi
nthemannersot
hatt
hecompanycanpr
oduce
ati
tsopt
imum l
evelwi
thoutendanger
ingi
tsf
inanci
alsol
vency
.Fort
his,t
hef
inance
managerwoul
dber
equi
redt
opossesssoundknowl
edgeoft
echni
quesofcapi
tal
budget
ing.

 Ut
il
izat
ionf
orwor
kingcapi
tal
:

Thef
inancemanagermustal
sokeepi
nvi
ewt
heneedf
oradequat
ewor
king
capi
tal
andensur
ethatwhi
l
ethef
ir
msenj
oyanopt
imum l
evel
ofwor
kingcapi
tal
,

16
 t
heydonotkeept
oomuchf
undsbl
ockedi
ninv
ent
ori
es,
bookdebt
s,cashet
c.

FI
NANCI
ALSTATEMENTANALYSI
S:

Fi
nanci
alst
atementanal
ysi
sis an anal
ysi
sthathi
ghl
i
ght
sthe i
mpor
tant
r
elat
ionshi
pint
hef
inanci
alst
atement
s.Fi
nanci
alst
atementanal
ysi
sfocusesont
he
ev
aluat
ionofpastper
for
manceoft
hebusi
nessf
ir
mint
ermsofl
i
qui
dit
y,pr
ofi
tabi
l
ity
,
oper
ati
onalef
fi
ciencyandgr
owt
hpot
ent
ial
i
ty.Fi
nanci
alst
atement
sanal
ysi
sincl
udes
t
hemet
hodusei
nassessi
ngandi
nter
pret
ingt
her
esul
tofpastper
for
manceand
cur
rentf
inanci
alposi
ti
onast
heyr
elat
etopar
ti
cul
arf
act
orsofi
nter
esti
ninv
est
ment
deci
sions.Ther
efor
e,f
inanci
alst
atementanal
ysi
sisani
mpor
tantmeansofassessi
ng
pastper
for
manceandi
nfor
ecast
ingandpl
anni
ngf
utur
eper
for
mance.

Obj
ect
ivesofFi
nanci
alSt
atementAnal
ysi
s:

1.AssessmentofPastPer
for
mance

Pastper
for
mancei
sagoodi
ndi
cat
oroff
utur
eper
for
mance.I
nvest
orsor
cr
edi
tor
sar
eint
erest
ed i
nthet
rend ofpastsal
es,costofgoodssol
d,oper
ati
ng
expenses,neti
ncome,cashf
lowsandr
etur
noni
nvest
ment
.Theset
rendsof
fera
meansf
orj
udgi
ngmanagement
'
spastper
for
manceandar
epossi
blei
ndi
cat
orsof
f
utur
eper
for
mance.

2.Assessmentofcur
rentposi
ti
on

Fi
nanci
alst
atementanal
ysi
sshowst
hecur
rentposi
ti
onoft
hef
ir
mint
ermsof
t
het
ypesofasset
sownedbyabusi
nessf
ir
m andt
hedi
ff
erentl
i
abi
l
iti
esdueagai
nstt
he
ent
erpr
ise.

3.Pr
edi
cti
onofpr
ofi
tabi
li
tyandgr
owt
hpr
ospect
s
Fi
nanci
alst
atementanal
ysi
shel
psi
nassessi
ngandpr
edi
cti
ngt
heear
ning

17
pr
ospect
sandgr
owt
hrat
esi
near
ningwhi
char
eusedbyi
nvest
orswhi
l
ecompar
ing
i
nvest
mental
ter
nat
ives and ot
heruser
sinj
udgi
ng ear
ning pot
ent
ialofbusi
ness
ent
erpr
ise.

4.Pr
edi
cti
onofbankr
upt
cyandf
ail
ure
Fi
nanci
alst
atementanal
ysi
sisani
mpor
tantt
ooli
nassessi
ngandpr
edi
cti
ng
bankr
upt
cyandpr
obabi
l
ityofbusi
nessf
ail
ure.

5.Assessmentoft
heoper
ati
onalef
fi
ciency
Fi
nanci
alst
atementanal
ysi
shel
pst
oassesst
heoper
ati
onalef
fi
ciencyoft
he
managementofacompany
.Theact
ualper
for
manceoft
hef
ir
m whi
chi
srev
eal
edi
nthe
f
inanci
alst
atement
s can be compar
ed wi
th some st
andar
ds setear
li
erand t
he
dev
iat
ion ofanybet
ween st
andar
dsand act
ualper
for
mancecan beused ast
he
i
ndi
cat
orofef
fi
ciencyoft
hemanagement
.

I
mpor
tanceofFi
nanci
alSt
atementAnal
ysi
s:
1.Hol
dingofShar
e
Shar
ehol
der
sar
etheowner
soft
hecompany
.Ti
meandagai
n,t
heymayhav
eto
t
akedeci
sionswhet
hert
heyhav
etocont
inuewi
tht
hehol
dingsoft
hecompany
'sshar
e
orsel
lthem out
.Thef
inanci
alst
atementanal
ysi
sisi
mpor
tantasi
tpr
ovi
desmeani
ngf
ul
i
nfor
mat
iont
otheshar
ehol
der
sint
aki
ngsuchdeci
sions.

2.Deci
sionsandPl
ans
Themanagementoft
hecompanyi
sresponsi
blef
ort
aki
ngdeci
sionsand
f
ormul
ati
ngpl
ansandpol
i
ciesf
ort
hef
utur
e.They
,ther
efor
e,al
way
sneedt
oev
aluat
e
i
tsper
for
manceandef
fect
ivenessoft
hei
ract
iont
oreal
i
zet
hecompany
'sgoali
nthe
past
.Fort
hatpur
pose,f
inanci
alst
atementanal
ysi
sisi
mpor
tantt
othecompany
's

18
management
.
3.Ext
ensi
onofCr
edi
t
Thecr
edi
tor
sar
ethepr
ovi
der
sofl
oancapi
talt
othecompany
.Ther
efor
e,t
hey
mayhav
etot
akedeci
si
onsast
owhet
hert
heyhav
etoext
endt
hei
rloanst
othe
companyand demand f
orhi
gheri
nter
estr
ates.The f
inanci
alst
atementanal
ysi
s
pr
ovi
desi
mpor
tanti
nfor
mat
iont
othem f
ort
hei
rpur
pose.
4.I
nvest
mentDeci
sion
Thepr
ospect
ivei
nvest
orsar
ethosewhohav
esur
pluscapi
talt
oinv
esti
nsome
pr
ofi
tabl
eoppor
tuni
ti
es.Ther
efor
e,t
heyof
tenhav
etodeci
dewhet
hert
oinv
estt
hei
r
capi
tali
nthecompany
'sshar
e.Thef
inanci
alst
atementanal
ysi
sisi
mpor
tantt
othem
because t
heycan obt
ain usef
uli
nfor
mat
ion f
ort
hei
rinv
est
mentdeci
sion maki
ng
pur
pose.
Ther
ear
evar
ioust
ypesoff
inanci
alanal
ysi
s.Theyar
ebr
ief
lyment
ioned
her
ein:
Ext
ernalanal
ysi
s:
Theext
ernalanal
ysi
sisdoneont
hebasi
sofpubl
i
shedf
inanci
alst
atement
sby
t
hosewhodonothav
eaccesst
otheaccount
ingi
nfor
mat
ion,suchas,st
ockhol
der
s,
banks,
credi
tor
s,andt
hegener
alpubl
i
c.
I
nter
nalAnal
ysi
s:
Thi
sty
pe ofanal
ysi
sis done byf
inance and account
ing depar
tment
.The
obj
ect
iveofsuchanal
ysi
sist
opr
ovi
det
hei
nfor
mat
iont
othet
opmanagement
,whi
l
e
assi
sti
ngi
nthedeci
sion-
maki
ngpr
ocess.
Shor
tter
m Anal
ysi
s:
I
tisconcer
nedwi
tht
hewor
kingcapi
talanal
ysi
s.I
tinv
olv
est
heanal
ysi
sofbot
h
cur
rentasset
sand cur
rentl
i
abi
l
iti
es,so t
hatt
he cash posi
ti
on (
li
qui
dit
y)maybe
det
ermi
ned.

Hor
izont
alAnal
ysi
s:

19
 Thecompar
ati
vef
inanci
alst
atement
sar
eanexampl
eofhor
izont
alanal
ysi
s,as
i
tinv
olv
esanal
ysi
soff
inanci
alst
atement
sforanumberofy
ear
s.Hor
izont
alanal
ysi
sis
al
sor
egar
dedasDy
nami
cAnal
ysi
s.
Ver
ti
calAnal
ysi
s:
I
tisper
for
medwhenf
inanci
alr
ati
osar
etobecal
cul
atedf
oroney
earonl
y.I
tis
al
socal
l
edasst
ati
canal
ysi
s.Anassor
tmentoft
echni
quesi
sempl
oyedi
nanal
yzi
ng
f
inanci
alst
atement
s.They ar
e:Compar
ati
ve Fi
nanci
alSt
atement
s,st
atementof
changesi
nwor
kingcapi
tal
,commonsi
zebal
ancesheet
sandi
ncomest
atement
s,t
rend
anal
ysi
sandr
ati
oanal
ysi
s.

Met
hodsorTechni
quesofFi
nanci
alSt
atementAnal
ysi
s
Fi
nanci
alst
atementanal
ysi
scanbeper
for
medbyempl
oyi
nganumberofmet
hodsor
t
echni
ques.The f
oll
owi
ng ar
ethe i
mpor
tantmet
hods ort
echni
ques off
inanci
al
st
atementanal
ysi
s.
1.Rat
ioAnal
ysi
s
Rat
io anal
ysi
sist
heanal
ysi
soft
hei
nter
rel
ati
onshi
p bet
weent
wo f
inanci
al
f
igur
es.
2.CashFl
owAnal
ysi
s
Cashf
low anal
ysi
sist
heanal
ysi
soft
hechangei
nthecashposi
ti
ondur
inga
per
iod.
3.Compar
ati
veFi
nanci
alSt
atement
s
Compar
ati
vef
inanci
alst
atementi
sananal
ysi
soff
inanci
alst
atement
soft
he
companyf
ort
woy
ear
soroft
het
wocompani
esofsi
mil
art
ypes.
4.Tr
endAnal
ysi
s
Tr
endanal
ysi
sist
heanal
ysesoft
het
rendoft
hef
inanci
alr
ati
osoft
hecompany
ov
ert
he y
ear
s.The met
hods t
o be sel
ect
ed f
ort
he anal
ysi
s depend upon t
he
ci
rcumst
ancesandt
heuser
s'need.Theuserort
heanal
ystshoul
duseappr
opr
iat
e
met
hodst
oder
iver
equi
redi
nfor
mat
iont
oful
fi
ll
thei
rneeds.
Par
ti
esI
nter
est
edi
nFi
nanci
alSt
atementAnal
ysi
s

20
 Theanal
ysi
soff
inanci
alf
igur
escont
ainedi
nthecompany
'spr
ofi
tandl
oss
accountandbal
ancesheetbyempl
oyi
ngappr
opr
iat
etechni
quei
sknownaf
inanci
al
st
atementanal
ysi
s.Fi
nanci
alst
atementanal
ysi
sisusef
ult
odi
ff
erentpar
ti
est
oobt
ain
t
her
equi
redi
nfor
mat
ionaboutt
heor
gani
zat
ion.Fol
l
owi
ngar
ethepar
ti
esi
nter
est
edi
n
f
inanci
alst
atementanal
ysi
s.

1.Shar
ehol
der
s
Shar
ehol
der
s ar
eint
erest
ed i
nfi
nanci
alst
atementanal
ysi
sto know t
he
pr
ofi
tabi
l
ity oft
he or
gani
zat
ion.Pr
ofi
tabi
l
ity shows t
he gr
owt
h pot
ent
ial
i
ty ofan
or
gani
zat
ionandsaf
etyofi
nvest
mentofshar
ehol
der
s.

2.I
nvest
orsandLender
s
I
nvest
orsandl
ender
sar
eint
erest
edt
o know t
hesol
vencyposi
ti
onofan
or
gani
zat
ion.Theyanal
yzet
hef
inanci
alst
atementposi
ti
ont
oknowaboutt
hesaf
etyof
t
hei
rinv
est
mentandabi
l
ityt
opayi
nter
estandr
epay
mentofpr
inci
pleamountondue
dat
e.

3.Cr
edi
tor
s
Cr
edi
tor
sar
eint
erest
edi
nanal
yzi
ngt
hef
inanci
alst
atement
sinor
dert
oknow
t
heshor
t-
ter
m l
i
qui
dit
yposi
ti
onofanor
gani
zat
ion.Cr
edi
tor
sanal
yzet
hef
inanci
al
st
atementt
oknow ei
thert
heor
gani
zat
ioni
sunabl
etopayt
heamountofshor
t-
ter
m
l
i
abi
l
iti
esonduedat
e.

4.Management
Managementi
sint
erest
edt
oanal
yzet
hef
inanci
alst
atementf
ormeasur
ingt
he
ef
fect
ivenessofi
tspol
i
ciesanddeci
sions.I
tanal
yzest
hef
inanci
alst
atement
stoknow
shor
t-
ter
m andl
ong-
ter
m sol
vencyposi
ti
on,pr
ofi
tabi
l
ity
,li
qui
dit
yposi
ti
onandr
etur
non
i
nvest
mentf
rom t
hebusi
ness.

5.Gov
ernment
21
 Gov
ernmenti
sint
erest
edt
oanal
yzet
hef
inanci
alposi
ti
oni
ndet
ermi
ningt
he
amountoft
axl
i
abi
l
ity
.Ital
sohel
psf
orf
ormul
ati
ngef
fect
ivepl
ansandpol
i
ciesf
or
economi
cgr
owt
h.

Li
mit
ati
onsofFi
nanci
alSt
atementAnal
ysi
s
Al
though anal
ysi
s of f
inanci
alst
atementi
s essent
ialt
o obt
ainr
elev
ant
i
nfor
mat
ionf
ormaki
ngsev
eraldeci
sionsandf
ormul
ati
ngcor
por
atepl
ansandpol
i
cies,
i
tshoul
dbecar
eful
l
yper
for
medasi
tsuf
fer
sfr
om anumberoft
hef
oll
owi
ngl
i
mit
ati
ons.
1.Mi
sleadt
heuser
The accur
acy off
inanci
ali
nfor
mat
ion l
argel
y depends on how accur
atel
y
f
inanci
alst
atement
s ar
e pr
epar
ed.I
fthei
rpr
epar
ati
on i
s wr
ong,t
he i
nfor
mat
ion
obt
ainedf
rom t
hei
ranal
ysi
swi
l
lal
sobewr
ongwhi
chmaymi
sleadt
heuseri
nmaki
ng
deci
sions.
2.Notusef
ulf
orpl
anni
ng
Si
ncef
inanci
alst
atement
sar
epr
epar
edbyusi
nghi
stor
icalf
inanci
aldat
a,
t
her
efor
e,t
he i
nfor
mat
ion der
ived f
rom such st
atement
s maynotbe ef
fect
ivei
n
cor
por
atepl
anni
ng,
ift
hepr
evi
oussi
tuat
iondoesnotpr
evai
l
.
3.Qual
it
ati
veaspect
s
Then f
inanci
alst
atementanal
ysi
s pr
ovi
des onl
yquant
it
ati
vei
nfor
mat
ion
aboutt
hecompany
'sf
inanci
alaf
fai
rs.Howev
er,
itf
ail
stopr
ovi
dequal
i
tat
ivei
nfor
mat
ion
suchasmanagementl
aborr
elat
ion,cust
omer
'ssat
isf
act
ion,andmanagement
’sski
l
ls
andsoonwhi
char
eal
soequal
l
yimpor
tantf
ordeci
sionmaki
ng.
4.Compar
isonnotpossi
ble
Thef
inanci
alst
atement
sar
ebasedonhi
stor
icaldat
a.Ther
efor
e,compar
ati
ve
anal
ysi
soff
inanci
alst
atement
sofdi
ff
erenty
ear
scannotbedoneasi
nfl
ati
ondi
stor
ts
t
hev
iewpr
esent
edbyt
hest
atement
sofdi
ff
erenty
ear
s.
5.Wr
ongj
udgment
Theski
l
lsusedi
ntheanal
ysi
swi
thoutadequat
eknowl
edgeoft
hesubj
ect

22
mat
termayl
eadt
onegat
ivedi
rect
ion.Si
mil
arl
y,bi
asedat
ti
tudeoft
heanal
ystmayal
so
l
ead t
o wr
ong j
udgmentand concl
usi
on.The l
i
mit
ati
ons ment
ioned abov
e about
f
inanci
alst
atementanal
ysi
smakei
tcl
eart
hatt
heanal
ysi
sisameanst
oanendandnot
an end t
oit
sel
f.The user
s and anal
yst
s mustunder
stand t
he l
i
mit
ati
ons bef
ore
anal
yzi
ngt
hef
inanci
alst
atement
soft
hecompany
.

Anal
ysi
soff
inanci
alper
for
mance:
Anal
yzi
ng t
he f
inanci
alper
for
mance i
s done on t
he basi
s off
inanci
al
st
atement
s and t
he i
nfor
mat
ion pr
ovi
ded by t
hese st
atement
sis subj
ectt
o be
account
ingpol
i
cies,
inf
ormat
ionneedsf
orcont
rolandr
egul
ator
ynor
mst
obecompi
l
ed.
Anal
ysi
soff
inanci
alper
for
manceofanor
gani
zat
ioni
sequal
l
yimpor
tantasaccount
ing
andi
smuchconv
eni
entt
otheuser
stoi
nter
ruptt
her
esul
tofanal
ysi
sforv
ari
ous
pur
poses.Forexampl
e,acr
edi
tormaybei
nter
est
edi
nhi
sret
urnsf
rom t
hei
nvest
ment
,
asuppl
i
erofr
awmat
eri
almayconsi
dert
hel
i
qui
dit
yoft
hebusi
nessmayconsi
dert
he
l
i
qui
dit
yoft
hebusi
ness,
andt
her
egul
ator
ymayl
ookf
ort
axandpol
i
cyi
nit
iat
ivesi
nthe
besti
nter
est
soft
hesoci
ety
.
Di
ff
erentf
inanci
alst
atement
srev
ealt
hepr
ofi
tper
for
mance,i
nvest
mentper
for
mance,
f
inanci
alsoundnessf
low off
undsandcashdur
ingaper
iodt
ogaget
hepr
ofi
tabi
l
ity
,
l
i
qui
dit
yandsol
vencyposi
ti
onofaf
ir
m.Pr
ofi
tandl
ossst
atementr
eveal
stheef
fi
ciency
i
noper
ati
onsi
nter
msofr
evenuegener
ati
onandcostr
educt
ion.Changesi
nrev
enuei
n
compar
isonwi
tht
hechangesi
ncostr
evealt
het
rendsi
npr
ofi
tabi
l
ityov
eraper
iodof
t
imeandhel
pinj
udgi
ngt
hepossi
bil
i
tyofgr
owt
handneedf
orexpansi
onofr
etr
endi
ng
t
hei
nvest
ment
.Abal
ancesheetr
eveal
sthef
inanci
alcondi
ti
onoft
hebusi
nessandt
he
sol
vencyposi
ti
on.I
tgi
vest
hel
evelofi
nvest
menti
nasset
sandwhatpar
toft
heasset
s
i
nfi
nanced f
rom owner
s’f
unds.I
tal
so r
eveal
sthe accumul
ated r
eser
ves oft
he
companyandt
heout
standi
ngdebtt
oout
sider
soft
hecompany
.
Thr
ough some i
nfor
mat
ion i
s openl
yrev
eal
ed byt
he f
inanci
alst
atement
s,
anal
ysi
sofi
nfor
mat
iongi
vesdeeperi
nsi
ght
sint
ovar
iousaspect
sofbusi
nesst
hatmay
beofspeci
fi
cint
erestt
ovar
iouspar
ti
esl
i
kecr
edi
tor
s,owner
s,pr
ospect
ivei
nvest
ors,
compet
it
orsandr
egul
ator
y.Mor
eandmor
einf
ormat
ioni
sav
ail
abl
e;anal
ysi
sismor
e

23
appr
opr
iat
e and r
eli
abl
e and i
s onl
ytr
ue when a meani
ngf
ulr
elat
ionshi
p can be
est
abl
i
shed bet
ween v
ari
ous el
ement
sofi
nfor
mat
ion av
ail
abl
efr
om t
he f
inanci
al.
St
atement
s.Ther
ear
etwoki
ndsoff
inanci
alanal
ysi
siscar
ri
edonbyt
heuser
sof
i
nfor
mat
ion.Theyar
e
A.Rat
ioanal
ysi
s
B.Compar
ati
veanal
ysi
s

A.Rat
iosAnal
ysi
s:
Rat
io anal
ysi
sis a common t
oolf
or anal
yzi
ng t
he f
inanci
al
st
atement
sofabusi
ness.Ar
ati
oisar
elat
ionshi
pbet
weent
woormor
eel
ement
sof
f
inanci
alst
atement
s.Ther
elat
ionshi
pbet
weent
het
woel
ement
sshoul
dbemeani
ngf
ul
t
orev
ealt
heper
for
mance.Theel
ement
sforar
ati
oanal
ysi
scanbepi
ckedupi
nany
or
derf
rom pr
ofi
tandl
ossaccountandbal
ancesheet
.Rat
ioanal
ysi
srev
eal
sthepr
ofi
t
per
for
mance and r
etur
n on i
nvest
mentf
ora one si
ngl
e account
ing y
ear
.The
i
nfor
mat
ionf
rom r
ati
oanal
ysi
swoul
dbehel
pfuli
nimpr
ovi
ngt
heper
for
mancef
rom
t
imeei
therbyi
mpr
ovi
ngt
heoper
ati
on,i
ncr
easi
ngt
her
evenuesandr
educi
ngt
hecost
et
c.,Rat
ioanal
ysi
sdoesnotr
evealt
hef
lowoff
undsandcashdur
ingaper
iodoft
ime
andsuchi
nfor
mat
ionmaybecr
uci
ali
ndet
ermi
ningt
hemot
ivesofmanagementand
t
hepossi
bleout
comewi
thr
espectt
ori
sk,
li
qui
dit
yandsol
vencyposi
ti
onsofabusi
ness.
Ther
esul
tsofr
ati
oanal
ysi
scannotbeusedf
ormaki
ngadeci
siont
oexpand,cont
ract
orwi
thdr
awt ness.
hebusi
Rat
ioAnal
ysi
sof
fer
ssi
mpl
eandeasi
ermat
hemat
icalsol
uti
onsf
or
st
udy
ingt
her
elat
ionshi
pbet
weenv
ari
ousel
ement
sint
hef
inanci
alst
atement
svi
z.,
Pr
ofi
tandl
ossaccountandt
hebal
ancesheet
.ARat
ioi
sthenumer
icalr
elat
ionshi
p
bet
weent
woel
ement
s.Fi
nanci
alper
for
mancesoff
ir
msar
edi
scr
eteasl
ongast
heyar
e
st
udi
ed asi
ndi
vi
dualel
ement
s.A compar
ison ofoneel
ementwi
th ot
herr
elev
ant
el
ementgi
vesabet
terunder
standi
ngoft
heper
for
mance.St
andal
onemeasur
esof
pr
ofi
tabi
l
ityandeconomi
csoundnessdoesnotpr
ovi
debet
teri
nfor
mat
iont
hant
he

24
per
for
mancei
ndi
ff
erentaspect
sinr
elat
iont
oot
heraspect
s.ForExampl
e,t
hepr
ofi
t
al
onemaynotgi
veef
fect
ivei
nfor
mat
iont
hancompar
ingt
hepr
ofi
twi
thsal
es.I
nRat
io
Anal
ysi
s,r
elat
iveper
for
manceonv
ari
ousaspect
sismeasur
edandt
heper
for
manceof
af
ir
misev
aluat
edbycompar
ingdi
ff
erentr
ati
os.Att
heout
set
,thecompet
it
iveposi
ti
on
ofaf
ir
misev
aluat
edbycompar
ingdi
ff
erentr
ati
os.Att
heout
set
,thecompet
it
ive
posi
ti
onofaf
ir
m wi
thot
herf
ir
msort
heI
ndust
ry.
Fort
hepur
poseofunder
standi
ng t
hef
inanci
alper
for
manceofaf
ir
m,Rat
iosar
e
cl
assi
fi
edi
ntot
hecat
egor
iesnamel
y
1.Pr
ofi
tabi
l
ityRat
ios
2.Li
qui
dit
yRat
ios
3.Tur
nov
erRat
io
4.Sol
vencyRat
io

1.Pr
ofi
tabi
li
tyRat
ios:
Pr
ofi
tabi
l
ityr
ati
osar
ethef
inanci
alr
ati
oswhi
cht
alkaboutt
hepr
ofi
tabi
l
ity
ofabusi
nesswi
thr
espectt
oit
ssal
esori
nvest
ment
s.Si
ncet
her
ati
osmeasur
ethe
ef
fi
ciency ofoper
ati
ons ofa busi
ness wi
tht
he hel
p ofpr
ofi
ts,t
hey ar
e cal
l
ed
pr
ofi
tabi
l
ityr
ati
os.They ar
e qui
te usef
ult
ool
sto under
stand t
he ef
fi
cienci
es /
i
nef
fi
cienci
es ofa busi
ness and t
her
ebyassi
stmanagementand owner
stot
ake

25
cor
rect
iveact
ions.Hepur
posesofcal
cul
ati
ngt
hepr
ofi
tabi
l
ityr
ati
osi
stomeasur
ethe
oper
ati
ngef
fi
ciencyofabusi
nessandr
etur
nswhi
cht
hebusi
nessgener
ates.The
di
ff
erentst
akehol
der
sofabusi
nessar
eint
erest
edi
nthepr
ofi
tabi
l
ityr
ati
osf
ordi
ff
erent
pur
poses.Thest
akehol
der
sofabusi
nessi
ncl
udeowner
s,management
,cr
edi
tor
s,
l
ender
set
c.
MostcommonPr
ofi
tabi
li
tyRat
iosar
e:
A.Gr
ossPr
ofi
tRat
io
B.
NetPr
ofi
tRat
io
D.Ret
urnonAsset
s
E.Ret
urnonCapi
tal
Empl
oyed

A.Gr
ossPr
ofi
tRat
io:
Thegr
osspr
ofi
trat
ioshowst
hepr
opor
ti
onofpr
ofi
tsgener
atedbyt
he
sal
eofpr
oduct
sorser
vices,bef
oresel
l
ingandadmi
nist
rat
iveser
vices.I
tisusedt
o
exami
net
heabi
l
ityofabusi
nesst
ocr
eat
esel
l
abl
epr
oduct
sinacost–ef
fect
ivemanner
.
Ther
ati
oisofsomei
mpor
tance,especi
all
ywhent
rackedonat
rendl
i
ne,t
oseei
fa
busi
nesscancont
inuet
opr
ovi
depr
oduct
stot
hemar
ketpl
acef
orwhi
chcust
omer
sar
e
wi
l
li
ngt
opayar
easonabl
epr
ice.Agr
osspr
ofi
trat
ioi
scal
cul
atedasf
oll
ows

GPR=Gr
ossPr
ofi
tx100
Sal
es

B.NetPr
ofi
tRat
io:
NetPr
ofi
trev
eal
stheoper
ati
ngper
for
manceofaf
ir
m dur
ingi
tsnor
mal
cour
se.Netpr
ofi
tist
her
esul
tofgr
osspr
ofi
tandoper
ati
ngexpenses.Fi
rm’
soper
ati
ng
per
for
mancedependsongener
ati
nggr
osspr
ofi
tandcont
rol
l
ingt
heoper
ati
ngexpenses.
Oper
ati
ngexpensesi
ncl
udeadmi
nist
rat
iveexpenses,sel
l
inganddi
str
ibut
ionexpenses
andf
inanci
alexpenses.Netpr
ofi
tRat
ioi
scal
cul
atedasf
oll
ows

26
 NPR=NetPr
ofi
tX100
Sal
es

D.Ret
urnonAsset
s:
I
tist
he r
ati
o bet
ween NetPr
ofi
tand t
he t
otalAsset
s oft
he f
ir
m.
Pr
ofi
tabi
l
ity measur
es abov
e ar
einsuf
fi
cientt
o make compar
ison when t
her
eis
i
ncr
easei
nthecapi
tal
orasset
soff
ir
m andi
ncompar
ingt
hepr
ofi
tabi
l
ityoft
woormor
e
f
ir
mswi
thdi
ff
erentl
evel
sofi
nvest
menti
nasset
s.

Ret
urnonAsset
s=NetPr
ofi
t
Tot
alAsset

2.Li
qui
dit
yRat
ios:
Al
lthe abov
e-ment
ioned r
ati
os ar
e der
ived f
rom t
he el
ement
sfr
om
Tr
adi
ng,Manuf
act
uri
ng,andpr
ofi
tandLossAccount
.Li
qui
dit
yRat
iosar
ecal
cul
ated
f
rom t
hei
temsofBal
ancesheet
.Li
qui
dit
yref
erst
otheabi
l
ityoff
ir
minmeet
ingi
ts
cur
rentobl
i
gat
ion.Li
qui
dit
yandpr
ofi
tabi
l
ityar
econt
radi
ctor
ytoeachot
herandf
ir
ms
needt
ost
ri
keabal
ancebet
weent
het
wo.Theyneedt
oopt
imi
zet
hel
i
qui
dit
yinor
dert
o
maxi
mizet
hepr
ofi
tabi
l
ityandv
icev
ersa.Fol
l
owi
ngr
ati
osr
evealt
hel
i
qui
dit
yposi
ti
onof
af
ir
m.

Li
qui
dit
yRat
io

Cur
rentRat
io QuickRati
o\Aci
d Cashr
ati
o
TestRati
o

27
 A.Cur
rentRat
io:
A cur
rentRat
ioi
sar
elat
ionshi
p bet
ween Cur
rentasset
s and cur
rent
l
i
abi
l
iti
esofaf
ir
m.Cur
rentasset
sar
ethosewhi
chcanbeconv
ert
edi
ntocashdur
ing
t
henor
malcour
seofbusi
nesst
hati
soney
ear
.Cur
rentAsset
sincl
udeCashAccount
r
ecei
vabl
es,I
nvent
oryet
c.,Cur
rentLi
abi
l
iti
esar
eshor
tter
m obl
i
gat
ionsmetdur
ingt
he
nor
malcour
seofbusi
nessi
.e.
,oney
ear
.Excessofcur
rentassetov
ercur
rentl
i
abi
l
iti
es
i
s known as NetWor
king capi
tal
.Cur
rentLi
abi
l
iti
es i
ncl
ude Account
s pay
abl
e or
cr
edi
tor
sforsuppl
i
es,l
ag i
n pay
mentofwages,expenses et
c.Cur
rentRat
ioi
s
cal
cul
atedasf
oll
ows:

Cur
rentRat
io=Tot
alcur
rentAsset
s

Cur
rentLi
abi
li
ti
es

B.Qui
ckRat
io/Aci
dTestRat
io:

I
tisanal
ter
nat
ivemeasur
eofl
i
qui
dit
y.Qui
ckasset
sar
ethoseasset
s
whi
chcanbequi
ckl
yconv
ert
edi
ntocash.Thesei
ncl
udecash,mar
ket
abl
esecur
it
ies
andaccount
srel
i
evabl
e.Tot
aloft
hequi
ckasset
scanbear
ri
vedatbydeduct
ing
i
nvent
oryf
rom t
hecur
rentasset
s.Qui
ckRat
ioni
sther
elat
ionshi
pbet
weenqui
ckasset
s
andcur
rentl
i
abi
l
iti
es.I
tshowst
hebusi
ness’
sabi
l
ityt
omeett
heshor
t-
ter
m cl
aims
t
hrought
hecashandnearcashasset
s.

Tot
alofQui
ckAsset
s= Cur
rentAsset
s–I
nvent
ory
Cur
rentLi
abi
li
ti
es

C.CashRat
io:

28
 CashRat
ioi
stheamountofcashandshor
t-
ter
m equi
val
ent
sacompany
hasov
ercur
rentl
i
abi
l
iti
es.Thecashi
snotef
fect
iveandqui
ckwayt
odet
ermi
nei
fa
companycoul
dhav
epot
ent
ial
shor
tter
mli
qui
dit
yissues.I
fthecashr
ati
oisunder(
over
)
1,t
hisi
mpl
i
est
hatt
hecompanywon’
t(wi
l
l)hav
eenoughcashonhandt
opayof
f
cur
rentl
i
abi
l
iti
es.

CashRat
io=CashandBankbal
ances
Cur
rentLi
abi
li
ti
es
3.Sol
vencyRat
ios:
Sol
vencyr
efl
ect
sthef
inanci
alsoundnessofaf
ir
m.I
tshowst
heabi
l
ityofa
f
ir
m i
n meet
ing l
ong t
erm obl
i
gat
ions,and suppor
ts ent
repr
eneur
’s conf
idence i
n
meet
ingt
heobl
i
gat
ions.Adi
ff
erencecanbedr
awnbet
weenaheal
thyandasi
ckuni
tin
t
ermsofsol
vencyposi
ti
on.Sev
eralaccor
dingt
otheneedsoft
heuser
soff
inanci
al
i
nfor
mat
ion.Someoft
hesol
vencyr
ati
osar
egi
venasunder
.

Sol
vencyRat
io

Debt-Equi
tyRat
io Debtt
oTot
al NetWor
tht
o

A.Debt
-Equi
tyRat
io:
I
tissi
mpl
estmeasur
eofsol
vencyandr
epr
esent
sthesol
vencyr
iskofa
f
ir
m.Accountofl
ong-
ter
m debtt
otheequi
tycapi
talr
epr
esent
sthef
ir
m’sabi
l
ityt
omeet
t
hel
ong-
ter
m obl
i
gat
ionsoft
hecompany
.Debtr
efer
stol
ongt
erm obl
i
gat
ionsoft
he
company
.Debtr
efer
stol
ongt
erm obl
i
gat
ionssuchasDebent
ures,Mor
tgageLoans,
andot
herf
ormsofl
ong-
ter
m bor
rowi
ngoft
hecompanywhet
hersecur
edorunsecur
ed.
Equi
tyCapi
talr
efer
stot
hef
undsper
tai
ningt
oowner
sint
hebusi
nesssuchasEqui
ty
shar
ecapi
tal
andundi
str
ibut
edr
eser
ves.I
tcanbedet
ermi
nedasf
oll
ows.

Debt
-Equi
tyRat
io= LongTer
m Loans X100
Equi
tyCapi
tal+Reser
vesandSur
plus

29
B.Debtt
oTot
alAsset
s:
Thi
srat
ior
eveal
sthepar
toft
heasset
sfi
nancedf
rom l
ongt
erm debt
.A
f
ir
mthatempl
oysmor
edebtf
orf
inanci
ngt
hei
rasset
satanobv
iousr
iskofi
ncr
eased
f
inanci
alexpensesandr
epay
mentdef
aul
tsonmat
uri
ty.

Debtt
oTot
alAsset
s=Longt
erm DebtX100
Tot
alAsset
s

C.
NetWor
tht
oTot
alAsset
s:
I
tisanal
ter
nat
ivemeasur
efort
heabov
erat
io.I
tcanbedet
ermi
nedby
deduct
ingt
heabov
erat
iof
rom 100%.I
trev
eal
sthepar
toft
otalasset
sfi
nancedbyt
he
owner
’sf
unds.Amoder
atet
ohi
ghpr
opor
ti
onofi
nvest
menti
ntot
alasset
sissuggest
ed
t
obef
inancedf
rom owner
’sf
unds.Howev
er,i
tmayi
nev
itabl
eforf
ir
mst
ofi
nancepar
t
oft
heasset
sfr
om bor
rowedf
undsasi
twoul
dshi
eldt
het
axesf
orf
ir
ms.

Networ
tht
oTot
alAsset
s= Networ
th X100
Tot
alAsset
s

4.Act
ivi
tyTur
nov
erRat
ios:
Tur
nov
er r
ati
os basi
cal
l
y meant f
or ut
il
izat
ion of t
he r
esour
ces of
accompany
.Theyr
evealt
heoper
ati
ngper
for
mancei
nter
msoft
hef
ir
mint
ermsof
cy
clesort
urnt
heasset
sli
abi
l
iti
esi
ncompar
isonwi
tht
hesal
esoft
hef
ir
m.Some
i
mpor
tantt
urnov
err
ati
osar
e
A.Asset
sTur
nov
erRat
io
B.Debt
orsTur
nov
erRat
io
C.Cr
edi
tor
sTur
nov
erRat
io
D.I
nvent
oryTur
nov
erRat
io

A.Asset
sTur
nov
erRat
io:

30
 I
tist
her
ati
oofsal
est
otot
alasset
s.Ther
ati
orev
eal
sthet
imesof
t
urnov
erneededt
ocov
ert
het
otalasset
s.Lowerr
ati
oindi
cat
esunder
uti
l
izat
ionof
r
esour
cescommi
tt
edi
nthef
ir
m butneedt
obecor
rel
atedwi
tht
het
ypeofi
ndust
ryand
si
zeandt
ypeofoper
ati
onsneeded.
Asset
sTur
nov
erRat
io= Sal
es
Tot
alAsset
s
B.Debt
orsTur
nov
erRat
io:
Thi
srat
io measur
est
heaccount
srecei
vabl
esshi
ft
sint
henor
mal
cour
se ofa busi
ness.Rel
ati
vel
yhi
gherDebt
orsTur
nov
erRat
ion i
ndi
cat
esqui
cker
col
l
ect
ionofdebt
sandl
owersi
zeoff
undsl
ockedi
nbookdebt
s.Av
eragecol
l
ect
ion
per
iodf
ort
hebookdebt
scanbecal
cul
atedf
rom t
hisr
ati
oondi
vi
ding365day
swi
tht
he
r
ati
o.

Debt
orsTur
nov
erRat
io=CostofGoodsSol
d
Av
erageBookDebt

Av
erageCol
lect
ionPer
iod= 365
Debt
orsTur
nov
erRat
io

C.Cr
edi
tor
sTur
nov
erRat
io:
Thi
srat
ior
eveal
snumberoft
urnst
heaccountpay
abl
esdur
ingt
he
nor
malcour
seoft
hebusi
ness.Hi
gherr
ati
oindi
cat
esmor
elagi
npay
mentofaccount
s
t
ocr
edi
tor
sorsuppl
i
ersoft
hef
ir
m.Av
eragepay
mentper
iodf
ort
hecr
edi
tor
scanbe
det
ermi
nedbydi
vi
ding365wi
tht
her
ati
o.

Cr
edi
tor
sTur
nov
erRat
io = Cr
edi
tPur
chases
Av
erageaccount
sPay
abl
e

31
 Av
eragePay
mentPer
iod = 365
Cr
edi
tor
sTur
nov
erRat
io
D.I
nvent
oryTur
nov
erRat
io:
I
trev
eal
sthenumberoft
imest
hest
ockofi
nvent
oryt
akest
urnsdur
ing
t
he nor
malcour
se ofa busi
ness.Hi
gheri
nvent
oryt
urnov
err
ati
oindi
cat
esf
ast
er
oper
ati
ngcy
clesandl
essercapi
talt
iedupi
ninv
ent
ory
.Inv
ent
oryTur
nov
erRat
ioi
s
cal
cul
atedas

I
nvent
oryTur
nov
erRat
io=CostofGoodsSol
d
Av
erageI
nvent
ory

1.
2INDUSTYPROFI
LE

A 
dai
ry 
i
sa 
busi
nessent
erpr
ise 
est
abl
i
shedf
ort
hehar
vest
ingorpr
ocessi
ng
or bot
h of ani
mal
 
mil
k – most
ly f
rom 
cows 
or 
buf
fal
oes, but al
so
f
rom 
goat
s, 
sheep,
 
hor
ses,or
 camel
s –f
orhumanconsumpt
ion.A dai
ryi
sty
pical
l
y
l
ocat
edonadedi
cat
ed 
dai
ryf
arm 
ori
nasect
ionofamul
ti
-pur
posef
arm(
mixedf
arm)
t
hati
sconcer
nedwi
tht
hehar
vest
ingofmi
l
k.

32
 Asanat
tri
but
ive,t
hewor
d dai
ry 
ref
erst
omi
l
k-basedpr
oduct
s,der
ivat
ives
and pr
ocesses,and t
he ani
mal
s and wor
ker
sinv
olv
ed i
nthei
rpr
oduct
ion:f
or
exampl
e,
 dai
ry cat
tl
e,
 dai
ry goat
. A dai
ry 
far
m pr
oduces mi
l
k and a
dai
ry 
fact
ory
 pr
ocesses i
tint
oav
ari
ety ofdai
ry pr
oduct
s.These est
abl
i
shment
s
const
it
utet
he 
globaldai
ryi
ndust
ry,acomponentoft
he 
foodi
ndust
ry.I
ndi
ahasbeen
t
hel
eadi
ngpr
oducerandconsumerofdai
rypr
oduct
swor
ldwi
desi
nce1998wi
tha
sust
ainedgr
owt
hint
heavai
labi
li
tyofmi
lkandmi
lkpr
oduct
s.Dai
ryact
ivi
ti
esf
orm
anessent
ialpar
toft
her
uralI
ndi
aneconomy,ser
vingasani
mpor
tantsour
ceof
empl
oymentandi
ncome.I
ndi
aal
sohast
hel
argestbovi
nepopul
ati
oni
nthewor
ld.
However
,themi
lkpr
oduct
ionperani
mali
ssi
gni
fi
cant
lyl
ow ascompar
edt
othe
ot
hermaj
ordai
rypr
oducer
s.Mor
eover
,near
lyal
loft
hedai
rypr
oducei
nIndi
ais
consumeddomest
ical
ly,
wit
hthemaj
ori
tyofi
tbei
ngsol
dasf
lui
dmi
lk.

St
ruct
ureoft
hei
ndust
ry:

Whi
l
emostcount
ri
espr
oducet
hei
rownmi
l
kpr
oduct
s,t
hest
ruct
ureoft
he
dai
ryi
ndust
ryv
ari
esi
ndi
ff
erentpar
tsoft
hewor
ld.I
nmaj
ormi
l
k-pr
oduci
ngcount
ri
es
mostmi
l
kisdi
str
ibut
ed t
hroughwhol
esal
emar
ket
s.I
nIr
eland and Aust
ral
i
a,f
or
exampl
e,f
armer
s'co-
oper
ati
vesownmanyoft
hel
arge-
scal
epr
ocessor
s,whi
l
eint
he
Uni
tedSt
atesmanyf
armer
sandpr
ocessor
sdobusi
nesst
hroughi
ndi
vi
dualcont
ract
s.
I
ntheUni
tedSt
ates,
thecount
ry'
s196 
far
mer
s'cooper
ati
ves 
sol
d86%ofmi
l
kint
heU.
S.
i
n2002,wi
thf
ivecooper
ati
vesaccount
ingf
orhal
fthat
.Thi
swasdownf
rom 2,
300
cooper
ati
ves i
nthe 1940s.
In dev
elopi
ng count
ri
es,t
he pastpr
act
ice off
armer
s
mar
ket
ingmi
l
kint
hei
rownnei
ghbor
hoodsi
schangi
ngr
api
dly
.Not
abl
edev
elopment
s
i
ncl
udeconsi
der
abl
efor
eigni
nvest
menti
nthedai
ryi
ndust
ryandagr
owi
ngr
olef
ordai
ry
cooper
ati
ves.Out
putofmi
l
kisgr
owi
ngr
api
dlyi
nsuchcount
ri
esandpr
esent
samaj
or
sour
ceofi
ncomegr
owt
hformanyf
armer
s.

33
 Asi
nmanyot
herbr
anchesoft
hef
oodi
ndust
ry,dai
rypr
ocessi
ngi
nthe
maj
ordai
rypr
oduci
ngcount
ri
eshasbecomei
ncr
easi
ngl
yconcent
rat
ed,wi
thf
ewerbut
l
argerandmor
eef
fi
cientpl
ant
soper
atedbyf
ewerwor
ker
s.Thi
sisnot
abl
ythecasei
n
t
he Uni
ted St
ates, Eur
ope, Aust
ral
i
a and New Zeal
and. I
n 2009, char
ges
of
 ant
it
rust
 vi
olat
ionshav
ebeenmadeagai
nstmaj
ordai
ryi
ndust
rypl
ayer
sint
heUni
ted
St
ates,whi
chcr
it
icscal
l
 Bi
gMi
l
k.Anot
herr
oundof
 pr
icef
ixi
ng 
char
gewasset
tl
edi
n
2016.

Gov
ernmenti
nter
vent
ion 
i
nmi
l
kmar
ket
swascommoni
nthe20t
hcent
ury
.
A l
i
mit
ed ant
it
rust exempt
ion was cr
eat
ed f
or U.
S. dai
ry cooper
ati
ves by
t
he 
Capper
–Vol
stead Act
 of1922.I
nthe 1930s,some U.
S.st
ates adopt
ed pr
ice
cont
rol
s,andFeder
alMi
l
kMar
ket
ingOr
der
sst
art
edundert
he 
Agr
icul
tur
alMar
ket
ing
Agr
eementAct
 of1937andcont
inuei
nthe2000s.TheFeder
alMi
l
kPr
iceSuppor
t
Pr
ogr
am begani
n1949.The 
Nor
theastDai
ryCompact
 r
egul
atedwhol
esal
emi
l
kpr
ices

34
i
nNewEngl
andf
rom 1997t
o2001.

I
ndust
ri
alPr
ocessi
ng:

Dai
rypl
ant
spr
ocesst
her
awmi
l
ktheyr
ecei
vef
rom f
armer
ssoast
oext
end
i
tsmar
ket
abl
eli
fe.Twomai
nty
pesofpr
ocessesar
eempl
oyed:heatt
reat
mentt
o
ensur
ethesaf
etyofmi
l
kforhumanconsumpt
ionandt
olengt
heni
tsshel
f-
li
fe,and
dehy
drat
ingdai
rypr
oduct
ssuchasbut
ter
,har
dcheeseandmi
l
kpowder
ssot
hatt
hey
canbest
ored.

Cr
eam andbut
ter

Today
,mi
l
kissepar
atedbyhugemachi
nesi
nbul
kint
ocr
eam andski
m mi
l
k.
Thecr
eam i
spr
ocessedt
o pr
oducev
ari
ousconsumerpr
oduct
s,dependi
ngoni
ts
t
hickness,i
tssui
tabi
l
ityf
orcul
i
nar
yusesandconsumerdemand,whi
chdi
ff
ersf
rom
pl
acet
opl
aceandcount
ryt
ocount
ry.

Somemi
l
kisdr
ied and powder
ed,somei
scondensed (
by 
evapor
ati
on)
mi
xedwi
thv
ary
ingamount
sof
 sugar
 andcanned.Mostcr
eam f
rom NewZeal
andand
Aust
ral
i
anf
act
ori
esi
smadei
nto 
but
ter
.Thi
sisdoneby
 chur
ning 
thecr
eam unt
ilt
hef
at
gl
obul
escoagul
ateandf
orm amonol
i
thi
cmass.Thi
sbut
termassi
swashedand,
somet
imes,sal
tedt
oimpr
ovekeepi
ngqual
i
ties.Ther
esi
dual
 
but
ter
mil
k goesont
o
f
urt
herpr
ocessi
ng.Thebut
teri
spackaged(
25t
o50 
kgboxes)andchi
l
ledf
orst
orage
andsal
e.Atal
aterst
aget
hesepackagesar
ebr
okendowni
ntohome-
consumpt
ion
si
zedpacks.

Ski
mmedmi
lk

Thepr
oductl
eftaf
tert
hecr
eam i
sremov
edi
scal
l
edski
m,orski
mmed,
mil
k.
To makea consumabl
eli
qui
d a por
ti
on ofcr
eam i
sret
urned t
othe 
ski
m mi
l
k t
o
make 
l
ow f
at 
mil
k (
semi
-ski
mmed)f
orhumanconsumpt
ion.Byv
ary
ingt
heamountof
cr
eam r
etur
ned,
producer
scanmakeav
ari
etyofl
ow-
fatmi
l
kst
osui
tthei
rlocalmar
ket
.
Whol
emi
l
kisal
somadebyaddi
ngcr
eam backt
otheski
mtof
orm ast
andar
dized
pr
oduct
.Ot
herpr
oduct
s,suchas 
cal
cium,
 
vit
ami
nD,andf
lav
ori
ng,ar
eal
soaddedt
o

35
appeal
toconsumer
s.

Casei
n

Casei
n i
sthepr
edomi
nant
 phosphopr
otei
n f
oundi
nfr
eshmi
l
k.I
thasa
v
erywi
der
angeofusesf
rom bei
ngaf
il
lerf
orhumanf
oods,
suchasi
n i
cecr
eam,
tot
he
manuf
act
ureofpr
oduct
ssuchas 
fabr
ic,
 
adhesi
ves,
and 
plast
ics.

Cheese

Cheesei
sanot
herpr
oductmadef
rom mi
l
k.Whol
emi
l
kisr
eact
edt
o
f
orm 
cur
ds 
thatcanbecompr
essed,
processedandst
oredt
ofor
m cheese.I
ncount
ri
es
wher
emi
l
kisl
egal
l
yal
l
owedt
obepr
ocessedwi
thout
 past
eur
izat
ion,awi
der
angeof
cheesescanbemadeusi
ngt
hebact
eri
afoundnat
ural
l
yint
hemi
l
k.I
nmostot
her
count
ri
es,t
her
angeofcheesesi
ssmal
l
erandt
heuseofar
ti
fi
cialcheesecur
ingi
s
gr
eat
er.
 Whey
 i
s al
so t
he by
productof t
his pr
ocess.Some peopl
e wi
th 
l
act
ose
i
ntol
erance 
aresur
pri
singl
yabl
etoeatcer
tai
nty
pesofcheese.Thi
sisbecausesome
t
radi
ti
onal
l
ymadehar
d cheeses,andsof
tri
penedcheesesmaycr
eat
elessr
eact
ion
t
hant
heequi
val
entamountofmi
l
kbecauseoft
hepr
ocessesi
nvol
ved.Fer
ment
ati
on
and hi
gher f
at cont
ent cont
ri
but
etol
esser amount
s of l
act
ose.Tr
adi
ti
onal
l
y
made 
Emment
al 
or 
Cheddar
 mi
ghtcont
ain10% oft
hel
act
osef
oundi
nwhol
emi
l
k.I
n
addi
ti
on,t
heagi
ngmet
hodsoft
radi
ti
onalcheeses(
somet
imesov
ert
woy
ear
s)r
educe
t
hei
rlact
osecont
entt
opr
act
ical
l
ynot
hing.
 Commer
cialcheeses,howev
er,ar
eof
ten
manuf
act
uredbypr
ocessest
hatdonothav
ethesamel
act
ose-
reduci
ngpr
oper
ti
es.
Agei
ng ofsome cheeses i
s gov
erned byr
egul
ati
ons,
 
in ot
hercases t
her
eis no
quant
it
ati
vei
ndi
cat
ionofdegr
eeofagei
ngandconcomi
tantl
act
oser
educt
ion,and
l
act
osecont
enti
snotusual
l
yindi
cat
edonl
abel
s.

Whey

36
 I
near
li
ert
imes,
 
whey
 or
 mi
lkser
um 
wasconsi
der
edt
obeawast
epr
oduct
andi
twas,
most
ly,
fedt
opi
gsasaconv
eni
entmeansofdi
sposal
.Begi
nni
ngabout1950,
andmost
lysi
nceabout1980,
 
lact
ose 
andmanyot
herpr
oduct
s,mai
nlyf
oodaddi
ti
ves,
ar
emadef
rom bot
hcasei
nandcheesewhey
.

Yogur
t

Yogur
t 
(ory
oghur
t)maki
ngi
sapr
ocesssi
mil
art
ocheesemaki
ng,onl
ythe
pr
ocessi
sar
rest
edbef
oret
hecur
dbecomesv
eryhar
d.

Mi
lkpowder
s

Mi
l
kisal
sopr
ocessedbyv
ari
ousdr
yingpr
ocessesi
ntopowder
s.Whol
e
mi
l
k,ski
m mi
l
k,but
ter
mil
k,andwheypr
oduct
sar
edr
iedi
ntoapowderf
orm andused
f
orhuman and ani
malconsumpt
ion.The mai
n di
ff
erence bet
ween pr
oduct
ion of
powder
sforhumanorf
orani
malconsumpt
ioni
sint
hepr
otect
ionoft
hepr
ocessand
t
hepr
oductf
rom cont
ami
nat
ion.Somepeopl
edr
inkmi
l
kreconst
it
utedf
rom powder
ed
mi
l
k,becausemi
l
kisabout88% wat
erandi
tismuchcheapert
otr
anspor
tthedr
ied
pr
oduct
.

Ot
hermi
lkpr
oduct
s

Kumi
s i
s pr
oduced commer
cial
l
yin 
Cent
ralAsi
a.Al
though t
radi
ti
onal
l
y
madef
rom 
mar
e'smi
l
k,moder
nindust
ri
alv
ari
ant
smayusecow'
smi
l
k.I
nIndi
a,whi
ch
pr
oduces22%ofgl
obalmi
l
kpr
oduct
ion(
asat2018)
,ar
angeof
 t
radi
ti
onalmi
l
k-based
pr
oduct
s ar
epr
oducedcommer
cial
l
y.

Tempor
arymi
lkst
orage

Mi
l
kcomi
ngf
rom t
hecowi
str
anspor
tedt
oanear
byst
oragev
esselbyt
he
ai
rf
lowl
eaki
ngar
oundt
hecupsont
hecoworbyaspeci
al"
airi
nlet
"(5-
10l
/mi
nfr
eeai
r)
i
nthecl
aw.Fr
om t
her
eiti
spumpedbyamechani
calpumpandcool
edbya 
heat
exchanger
.The mi
l
kist
hen st
ored i
nal
arge v
at,or
 bul
ktank,whi
ch i
s usual
l
y
r
efr
iger
atedunt
ilcol
l
ect
ionf
orpr
ocessi
ng.

Wast
edi
sposal
:

37
 I
ncount
ri
eswher
ecowsar
egr
azedout
sidey
ear
-r
ound,
ther
eisl
i
ttl
ewast
e
di
sposalt
odealwi
th.Themostconcent
rat
edwast
eisatt
hemi
l
kingshed,wher
ethe
ani
malwast
emaybel
i
quef
ied(
dur
ingt
hewat
er-
washi
ngpr
ocess)orl
efti
namor
e
sol
i
dfor
m,ei
thert
ober
etur
nedt
obeusedonf
arm gr
oundasor
gani
cfer
ti
li
zer
.

I
ntheassoci
atedmi
l
kpr
ocessi
ngf
act
ori
es,mostoft
hewast
eiswashi
ng
wat
ert
hati
str
eat
ed,
usual
l
ybycompost
ing,
andspr
eadonf
armf
iel
dsi
nei
therl
i
qui
dor
sol
i
dfor
m.Thi
sismuchdi
ff
erentf
rom hal
facent
uryago,
whent
hemai
npr
oduct
swer
e
but
ter
,cheeseandcasei
n,andt
her
estoft
hemi
l
khadt
obedi
sposedofaswast
e
(
somet
imesasani
mal
feed)
.

I
ndai
ry-
int
ensi
vear
eas,
var
iousmet
hodshav
ebeenpr
oposedf
ordi
sposi
ng
ofl
argequant
it
iesofmi
l
k.Lar
geappl
i
cat
ionr
atesofmi
l
kont
oland,ordi
sposi
ngi
na
hol
e,i
spr
obl
emat
icast
her
esi
duef
rom t
hedecomposi
ngmi
l
kwi
l
lbl
ockt
hesoi
lpor
es
andt
her
ebyr
educet
hewat
eri
nfi
l
trat
ionr
atet
hrought
hesoi
lpr
ofi
l
e.Asr
ecov
eryoft
his

38
ef
fectcan t
ake t
ime,anyl
and-
based appl
i
cat
ion needs t
o be wel
lmanaged and
consi
der
ed.Ot
her wast
e mi
l
k di
sposal met
hods commonl
y empl
oyed i
ncl
ude
sol
i
dif
icat
ionanddi
sposalatasol
i
dwast
elandf
il
l,di
sposalatawast
ewat
ert
reat
ment
pl
ant
,ordi
schar
gei
ntoasani
tar
ysewer
.

Ov
erv
iewoft
heI
ndi
andai
ryi
ndust
ry:

Theov
eral
ldai
ryi
ndust
ry(
whi
chi
ncl
udesbot
hor
gani
zedandunor
gani
zed
segment
s)i
nIndi
abr
oadl
yconsi
stsofpr
ocessedmi
l
k(l
i
qui
d/f
lui
dmi
l
k)andot
herdai
ry
pr
oduct
ssuchascur
d,ghee,
ski
m mi
l
kpowder(
SMP)
,cheese,
andi
cecr
eam.Oft
hese,
t
hef
lui
dmi
l
ksegmenti
sthel
argest(
65%)andi
sexpect
edt
ogr
ow consi
stent
ly.The
mi
l
kpr
oduct
ssegment
,cur
rent
lyaccount
ingf
or35%oft
hei
ndust
ry,hasbeengr
owi
ng
atamuchf
ast
erpacet
hant
heov
eral
ldai
ryi
ndust
ry.

1.
3COMPANYPROFI
LE:

Dodl
aDai
ryLi
mit
edi
sapubl
i
cli
mit
edcompanyhav
ingi
tsr
egi
ster
edand
cor
por
ateof
fi
ceatHy
der
abadCi
tyofTel
anganaSt
atei
nIndi
a.Thecompanywas
i
ncor
por
ated i
nthey
ear1995 and pr
oduct
ion commenced i
n 1997.Cur
rent
ly,our
pr
ocur
ementi
scent
eredi
n4st
atesandourpr
oduct
sar
eav
ail
abl
eforpur
chasei
n10
st
ates.Wehav
e86mi
l
kchi
l
li
ngcent
ers.Someofourpl
ant
sar
eISO 22000:
2005
Cer
ti
fi
edwhi
l
etwoar
eISO50001:
2011(
EnMS)Cer
ti
fi
ed.

39
Ourdi
str
ibut
ion and mar
ket
ing oper
ati
ons consi
stofdi
str
ibut
ion ofourpr
oduct
s
t
hrough34sal
esof
fi
ces,4475di
str
ibut
ionagent
s,1014mi
l
kdi
str
ibut
orsand515mi
l
k
pr
oductdi
str
ibut
orsacr
ossni
nest
atesi
nIndi
a.Addi
ti
onal
l
y,asofMar
ch31 
2020,our
st

pr
oduct
sar
eal
soav
ail
abl
ethr
ough7,
365“
Dodl
aRet
ailPar
lor
s”whi
chcommenced
oper
ati
onsi
n2016andar
espr
eadacr
osst
hest
atesofAndhr
aPr
adesh,Tel
angana,
Tami
lNaduandKar
nat
aka.Ourpr
oductpor
tfol
i
oconsi
stsofMi
l
k,But
ter
,Ghee,
Paneer
,
Cur
d,Fl
avor
edMi
l
k,DoodhPeda,
IceCr
eam andMi
l
kBasedSweat
s.Thesepr
oduct
sar
e
conv
eni
ent
lypackedt
osui
tvar
iousneedsofi
tsconsumer
s.

Uni
ver
sit
y,Mr
.Suni
lReddyhascl
oset
o25y
ear
sofexper
iencei
nthedai
ryi
ndust
ryand
i
saDai
rychai
nexper
t.Hepr
ovi
desst
rat
egi
cdi
rect
ionThi
sMi
l
kPr
ocessi
nguni
twas
st
art
edi
nthey
ear2004.Thei
nst
all
edcapaci
tywas0.
38Mi
l
li
onl
i
ter
sofr
aw mi
l
kper
dayi
nFi
scal2020.Thepl
anti
sequi
ppedwi
thexcel
l
enti
nfr
ast
ruct
ureandst
ate-
of-
the-
ar
tfaci
l
iti
esf
orMi
l
kPr
ocessi
ngandmanuf
act
uri
ngofby
-pr
oduct
svi
z.,Paneer
,But
ter
,
Cur
d,But
ter
mil
kandDoodhPeda.Thi
sPl
anti
scat
eri
ngt
othedemandsofBangal
ore
andMy
sor
eci
ti
esofKar
nat
aka,
Tami
lNaduandAP.

40
Boar
dofDi
rect
ors:

 Dodl
aSeshaReddyChai
rman/Di
rect
or40y
ear
sofexper
ienceacr
ossdi
ver
se
i
ndust
ri
essuchaspaper
,const
ruct
ion,
sof
twar
eandcast
ings.Heal
soser
veson
t
heBoar
dofal
i
stedcompany
,Nel
cast
.Mr
.SeshaReddyi
sinv
olv
edi
nCSR
act
ivi
ti
esoft
hecompanyespeci
all
yint
hef
iel
dsofr
ural
educat
ion.

 Dodl
a Suni
lReddyManagi
ng Di
rect
orA B.
E.,i
nIndust
ri
alEngi
neer
ing f
rom
Mangal
oret
othecompany
.

 Ki
shor
eMi
rchandaniI
ndependentDi
rect
orHehas25y
ear
sofexper
iencei
n
f
inance & account
ing.I
n 2001 he f
ounded Out
sour
ce Par
tner
s whi
ch was
subsequent
lysol
dtoEXLSer
vicesHol
dingsi
n2011.HeHol
dssev
eralboar
d
posi
ti
onsi
ncl
udi
ngatCompl
y`Gl
obal(
Singapor
e),
Far
epor
talI
nc.andEssarSt
eel
Al
goma.Hei
sa C.
A.;C.
P.A.
;and a B.
S.,i
nIndust
ri
alChemi
str
yfr
om Ci
ty
Uni
ver
sit
y,London

 Ponnav
olu Di
vyaI
ndependentManagi
ng Di
rect
orofNC Ener
gyLi
mit
ed and
ser
vesont
heBoar
dofNel
cast-al
i
stedcompany
.Shest
art
edhercar
eerasan
Anal
ysti
nDeut
scheBank.Shei
saM.
S.,i
nNet
wor
kedI
nfor
mat
ionSy
stems,
St
evensI
nst
it
uteofTechnol
ogy
,USA;
andaB.
E.(
Hons.
),Comput
erEngi
neer
ing.

 AkshayTannaaged34y
ear
sisaVi
cePr
esi
dentatTPGGr
owt
hinMumbai
,and
hasbeenwi
thTPGsi
nce2011.Pr
iort
ojoi
ningTPGi
n2011,Mr
.AkshayTanna
wor
ked f
orMer
il
lLy
nch and Deut
sche Bank i
nthe Fi
nanci
alI
nst
it
uti
ons
I
nvest
mentBanki
ng Gr
oup.Mr
.AkshayTanna gr
aduat
ed f
rom t
he Whar
ton
School
ofUni
ver
sit
yofPennsy
lvani
awi
thHonor
s.

 Vi
shwar
upeNar
ainHei
sagr
aduat
efr
om I
ndi
anI
nst
it
uteofTechnol
ogy
,New
Del
hiandMBAf
rom St
anf
ordUni
ver
sit
y,Cal
i
for
nia.Hei
shav
inga16y
ear
sgl
obal
exper
iencei
ncl
udi
ng6y
ear
sofpr
ivat
eequi
tyf
undexper
iencei
nUSandI
ndi
a.He
i
saPar
tnerandManagi
ngDi
rect
orofTPGGr
owt
handal
soser
vesont
heboar
ds
ofv
ari
ouspubl
i
candpr
ivat
eCompani
es.Pr
iort
ojoi
ningTPGGr
owt
hin2007,
he

41
 wasani
nvest
orwi
thBessemerVent
urePar
tner
sinNewYor
k.Pr
evi
oust
othat
,
hewasanEngagementManageri
nMcKi
nsey
’sPr
ivat
eEqui
tyPr
act
icei
nPal
o
Al
toandLondon.Hej
oinedMcKi
nseyf
rom Del
oit
teConsul
ti
ng,wher
ehewasa
Seni
orConsul
tant
.

Pr
oduct
s:

Dodl
aof
fer
sawi
der
angeofpr
oduct
sinbot
hli
qui
dmi
l
kandby
-pr
oduct
cat
egor
ies.The l
i
qui
d mi
l
k compr
ises of5 t
ypes ofv
ari
ant
s and t
he by
-pr
oduct
compr
ises of14 t
ypes ofv
ari
ant
s.Dodl
a of
fer
s a wi
de r
ange ofmi
l
k pr
oduct
s
compr
isi
ngofFr
eshMi
l
k,But
ter
,Ghee,Paneer
,Cur
d,Fl
avor
edMi
l
k,DoodhPeda,I
ce
Cr
eam andSki
mmedMi
l
kPowder
.

MI
LK:

Wepr
ocur
eabout1.
03Mi
l
li
onl
i
ter
sofr
aw mi
l ch31st,
kperdayasofMar
2020f
rom ov
er1,
83,
926dai
ryf
armer
s.Fr
eshmi
l
kfr
om buf
fal
osandcowsi
sbr
oughtt
o
t
henear
estchi
l
li
ngcent
ersandt
hent
othenear
estpr
ocessi
ngpl
ant
swi
thoutbr
eaki
ng
t
hecol
dchai
n.Thechi
l
ledmi
l
kist
henpast
eur
ized.Thi
spr
ocesski
l
lspat
hogeni
c

42
mi
crobest
hatcausespoi
l
ageofmi
l
kandanyhar
mfulbact
eri
a.Dodl
ami
l
kispackedi
n
hi
gh-
qual
i
tyf
ood gr
ade pouches whi
ch ar
e user
-f
ri
endl
y.The pr
oductunder
goes
st
ri
ngentqual
i
tychecksbef
orepacki
ng.Dodl
aof
fer
sdi
ff
erentt
ypesofmi
l
kinpouches
aspercust
omerr
equi
rement
s,suchasFul
lCr
eam Mi
l
k,TonedMi
l
k,St
andar
dizedMi
l
k,
Doubl
eTonedMi
l
kandUHTMi
l
k.

CURD:

Dodl
acur
dismadef
rom past
eur
izedmi
l
kwi
thsel
ect
edst
rai
nsofl
act
icaci
d
bact
eri
a.I
tishy
gieni
cal
l
ypr
ocessedanddoesn’
tcont
ainanypr
eser
vat
ives.Thet
hick
andcr
eamyDodl
aCur
dcomeswi
thaf
ir
m andgl
ossyt
ext
ure.Dodl
acur
dcont
ainsal
l
t
hegoodnessofmi
l
ksuchaspr
otei
ns,car
bohy
drat
es,f
ats,cal
cium,phosphor
ous,
magnesi
um,
zinc,
iodi
neandv
itami
ns.

GHEE:

Dodl
aGheei
sext
ract
edf
rom cowandbuf
fal
omi
l
k.Gheei
spr
oducedi
nthr
ee
v
ari
ant
s-cow ghee,whi
teghee(
buf
fal
oghee)andpr
emi
um ghee(
ful
lboi
l
edwhi
te
ghee)
.Wecol
l
ectandt
reatcowandbuf
fal
omi
l
ksepar
atel
yanddonotmi
xthem dur
ing
pr
ocessi
ng.Bot
hcowandbuf
fal
ogheear
esol
dinj
ars,
pouches,
sachetandt
in.

BUTTER:

Dodl
aBut
teri
smadef
rom t
hef
atofcowandbuf
fal
omi
l
k.But
teri
spr
oduced
i
nthr
eev
ari
ant
s-y
ell
owsal
tedbut
termadef
rom cowmi
l
kcr
eam (
tabl
ebut
ter
),y
ell
ow
cooki
ngbut
termadef
rom cowmi
l
kcr
eam andwhi
tecooki
ngbut
termadef
rom buf
fal
o
mi
l
k.Ourwhi
tecooki
ngbut
teri
ssol
dinboxesof500gms.Oury
ell
owsal
tedbut
teri
s
sol
dinboxesof200gmsand500gmsandy
ell
owcooki
ngbut
teri
nboxesof500gms
and20kgs.Ourbut
teri
ssol
dint
hest
atesofAndhr
aPr
adesh,Tami
lNadu,Kar
nat
aka
andTel
angana.

I
CECREAM:

Ouri
cecr
eamsar
eav
ail
abl
ein62st
ockkeepi
nguni
tandar
eav
ail
abl
einbox,
bar
s,conesandcups.Ouri
cecr
eamsar
emanuf
act
uredusi
ngonl
ymi
l
kfatandcr
eam.

43
PANEER:

Ourpaneeri
s an unaged,aci
d-set
,non-
mel
ti
ng cot
tage cheese made by
coagul
ati
ngt
hepast
eur
izedmi
l
kusi
ngci
tr
icaci
d.

MI
LKBASEDSWEETS:

I
naddi
ti
ont
otheabov
e,weal
somanuf
act
uremi
l
k-basedsweet
ssuchas
doodhPeda,gul
abj
amun,basundhi
,mal
ail
addu,mi
l
kcakeandj
unnu.Ourmi
l
k-based
sweet
sar
esol
dint
hest
atesofAndhr
aPr
adesh,
Tami
lNaduandTel
angana.

DODLADAI
RYVALUECHAI
N:

Busi
nessmodel
:
Ouri
ntegr
atedbusi
nessmodelenabl
esust
opr
ovi
deendt
oendcapabi
l
iti
es
f
rom pr
ocur
ementt
il
ldi
str
ibut
ionandmar
ket
ingi
nacost
-ef
fi
cientmanner
.Thekey

44
component
sofouri
ntegr
atedbusi
nessmodel
areasf
oll
ows:

 Pr
ocur
ement

Raw mi
l
kisoneoft
hekeyr
aw mat
eri
alsf
orourbusi
ness.Ourpr
ocur
ement
oper
ati
onsar
espr
eadacr
osst
hest
atesofAndhr
aPr
adesh,
Tel
angana,
Tami
lNaduand
Kar
nat
akaandconsi
stofpr
ocur
ementofonanav
erageappr
oxi
mat
ely1.
03Mi
l
li
on
l
i
ter
sofr
awmi
l
kperdayofr
awmi
l
kfr
om appr
oxi
mat
ely1,
83,
926f
armer
sacr
oss7,
722
v
il
lagest
hrough6285DDCCs,1,
437pr
ocur
ementagent
sand86chi
l
li
ngcent
resasof
ch31st 
Mar 2020.Wepr
ocur
erawmi
l
kei
therdi
rect
lyf
rom t
hef
armer
sort
hrought
hir
d
par
tysuppl
i
ers.Ther
aw mi
l
kist
ranspor
tedt
othenear
estpr
ocessi
ngpl
antt
hrough
t
anker
sforonwar
dpr
ocessi
ngi
ntor
etai
lmi
l
kpackagesormanuf
act
ureofdai
rybased
VAPs.
 Pr
ocessi
ng:

Ourpr
ocessi
ngoper
ati
onsar
espr
eadacr
oss13pr
ocessi
ngpl
ant
s(ni
neof
whi
ch ar
e owned and t
wo ar
eleased)l
ocat
ed i
nthe st
ates ofAndhr
a Pr
adesh,
Tel
angana,Kar
nat
akaandTami
lNadui
nIndi
awi
thanaggr
egat
einst
all
edcapaci
tyof
1.
59Mi
l
li
onl
i
ter
sofr
awmi
l
kperday
,excl
udi
ngaSMPpl
antwi
thani
nst
all
edcapaci
ty
of2,
65,
000kgsperday
.Wer
egul
arl
yincurcapi
talexpendi
tur
etoupgr
adet
echnol
ogy
acr
ossourpr
ocessi
ngpl
ant
sandexpandi
ntonewgeogr
aphi
esbywayofi
ntr
oduct
ion
ofmoder
naut
omat
edpl
ant
s.Wehav
eint
roducedf
ull
yaut
omat
edpr
ocessi
ngl
i
nes.Our
pr
ocessi
ngi
nfr
ast
ruct
urei
sdesi
gnedi
namannert
oensur
eef
fi
cientoper
ati
onsand
hi
ghpr
oductqual
i
tyst
andar
ds.

 Di
str
ibut
ionandMar
ket
ing:

Wesel
lourpr
oduct
sundert
he“
Dodl
aDai
ry”br
andi
nIndi
a.Wedi
str
ibut
ed
ourmi
l
kthr
ough34sal
esof
fi
ces,4475di
str
ibut
ionagent
s,1014mi
l
kdi
str
ibut
orsand
515mi
l
kpr
oductdi
str
ibut
ors.

Mi
ssi
onSt
atement
:

45
 Tosuppl
ygoodandsaf
emi
l
k&mi
l
kpr
oduct
sconsi
stent
lyt
hroughcont
inual
i
mpr
ovementofoursy
stemsandpr
act
ices.

Vi
sionSt
atement
:

Tobeawor
ld-
classdai
rycompanybypr
ovi
dinghi
gh-
qual
i
typr
oduct
sand
ser
vices.

AWARDS:

Lakesi
deDai
rywonacer
ti
fi
cat
eofr
ecogni
ti
onf
rom UgandaExpor
tPr
omot
ionBoar
dfor
out
standi
ngexpor
tper
for
mancei
n2018/
19andal
sowont
heBl
ueWat
erCer
ti
fi
cat
e
Awar
dfor2019f
rom t
heRepubl
i
cofUgandaf
oref
fi
cientusageofWat
er.

 Hemant
hKundav
aram,CFO hasbeenawar
dedwi
thCFO 100Rol
lofHonour
pr
esent
edby9.
9gr
oupf
ort
hey
ear2018-
19f
orTr
easur
yManagement
Dodl
aDai
ry(
Gundar
mapal
l
iPl
ant
)honour
edwi
thCI
INat
ionalCol
dChai
nAwar
ds,
2018
 TV5Busi
nessLeaderAwar
d2015
 HMTVBusi
nessExcel
l
enceAwar
ds2018-BestAgr
i/
FoodPr
ocessi
ngCompany
Jur
yDodl
aDai
ryLt
d.,
 Dodl
aDai
ry,t
hewel
l
-knowndai
rybr
andf
rom Sout
hIndi
ahasbeenadj
udgedas
t
heBestEmer
gingCompanyf
orOper
ati
onalExcel
l
ence(
Lar
geCompani
es)by
Busi
nessToday
.

46
 CHAPTER-
II
2.RESEARCHMETHODOLOGY
2.
1NEEDOFTHESTUDY
2.
2SCOPEOFTHESTUDY
2.
3OBJECTI
VEOFTHESTUDY
2.
4SOURCESOFDATA
2.
5TOOLSOFANALYSI
S
2.
6LI
MITATI
ONSOFTHESTUDY

47
 2.RESEARCHMETHODOLOGY

2.
1NEEDOFTHESTUDY
Rat
io anal
ysi
sisv
eryi
mpor
tantt
ooli
nfi
nanci
alst
atementanal
ysi
sin
det
ermi
ningf
inanci
alper
for
manceofacompany
.Thi
sst
udyhel
pst
oanal
yzet
hepast
andpr
esentf
inanci
aloft
hecompany
.Tof
indt
hebusi
nessf
luct
uat
ions,t
echni
cal
dev
elopment
s,et
c.,
onf
inanci
alper
for
mance.

48
2.
2SCOPEOFTHESTUDY
Asi
tist
imeconsumi
ng,
toanal
yzet
hef
inanci
alper
for
manceofDodl
a
Dai
ryLt
d.,si
ncei
tsi
ncept
ion,t
hest
udyconf
inest
othef
inanci
alper
for
mancef
orf
ive
f
inanci
aly
ear
s(2015-
2016t
o2019-
2020)
.Thest
udyusesest
abl
i
shedmet
hodol
ogy
,
t
ool
s,andt
echni
quesofanal
yzi
ngt
hef
inanci
alper
for
mancesanddoesnotcont
ainany
i
nnov
ati
vemet
hodsofanal
yzi
ngf
inanci
alper
for
mance.
Thi
s pr
ojectdeal
s wi
th anal
ysi
s and i
nter
pret
ati
on ofdat
a col
l
ect
ed
t
hrough t
he sour
ces ofsecondar
ydat
a onl
y.Gr
aph and di
agr
ams and t
abul
ati
on
met
hodsar
eusedt
oanal
ysi
sandi
nter
prett
hedat
a.

49
2.
3OBJECTI
VESOFTHESTUDY
 Tost
udyt
heFi
nanci
alPosi
ti
onofDodl
aDai
ryLt
d.,
 ToUnder
standt
heMeansofAnal
yzi
ngFi
nanci
alPer
for
manceandt
het
ool
sand
t
echni
quesofAnal
yzi
ngFi
nanci
alSt
atement
s.
 To anal
yze t
he f
inanci
alper
for
mance ofDodl
a Dai
ryLTD.
,Usi
ng f
inanci
al
anal
ysi
stool
sandt
echni
ques.
 Tost
udyv
ari
ousel
ement
sint
heFi
nanci
alst
atement
sofDodl
aDai
ryLTD.
,
 Tosuggestf
easi
blesol
uti
onst
oimpr
ovet
heov
eral
lef
fi
ciencyoft
heDodl
aDai
ry
Lt
d.,

50
2.
4RESEARCHMETHODOLOGY

PRI
MARYDATA:
Pr
imar
ydat
aisor
igi
nal
resear
cht
hati
sobt
ainedt
hroughf
ir
sthandi
nvest
igat
ion.

SECONDARYDATA:
Secondar
ydat
ahasbeencol
l
ect
edf
rom t
hei
nter
nalaswel
lasext
ernalsour
cesi
ncl
ude
t
hei
nfor
mat
ionf
rom t
hecompany
’sOl
dRecor
ds,Var
iousBooksandPubl
i
cat
ions,
Magazi
nes&Websi
tes.
Mydat
aispur
elybasedonsecondar
ydat
a.

51
2.
5LI
MITATI
ONSOFTHESTUDY
 Det
ail
edanal
ysi
scoul
dnotbecar
ri
edf
ort
hepr
ojectwor
kbecauseoft
hel
i
mit
ed
t
imespan.
 5y
ear
sannualr
epor
tsar
enotsuf
fi
cientt
ofi
ndt
heov
eral
lposi
ti
onoft
heDodl
a
l
td.
 Mypr
ojecti
sbasedonsecondar
ydat
a.
 Duet
oCOVI
D-19Iam notv
isi
tedt
hecompanydi
rect
ly.
 Idi
dmypr
ojectbasedononl
i
nef
inanci
alr
epor
ts.

52
 CHAPTER-I
II

DATAANALYSI
S

AND

I
NTERPRETATI
ON

53
 3.DATAANALYSI
S&I
NTERPRETATI
ON

3.
1PROFI
TABI
LITYRATI
OS

A.NETPROFI
TRATI
O

TABLE:3.
1

Year
s NetPr
ofi
tRat
ios
2015-2016 3.
26
2016-2017 3.
25
2017-2018 3.
29
2018-2019 3.
29
2019-2020 1.
43

GRAPH3.
1

I
NTERPRETATI
ON:

Thest
udyi
ndi
cat
est
hatt
her
eisanov
eral
lincr
easei
nthenetpr
ofi
trat
iof
or
t
hey
ear2017–2018(
3.29)and2018–2019(
3.29)r
ecor
dedasahi
ghestgr
owt
hrat
e
of3.
29.

54
 B.GROSSPROFI
TRATI
O

TABLE:
3.2

Year
s Rat
ios
2015-
2016 25.
61
2016-
2017 22.
15
2017-
2018 19.
29
2018-
2019 25.
73
2019-
2020 24.
37

GRAPH3.
2

I
NTERPRETATI
ON:

Gr
osspr
ofi
trat
iocanbeusedt
otestt
hebusi
nesscondi
ti
on.Theabov
e
t
abl
eshowst
hatav
eragegr
osspr
ofi
trat
ioi
nthey
ear2015-
2016(
25.
61)and2018-
2019
(
25.
71)
.Thel
owestr
ati
oint
hey
eari
s2017-
2018(
19.
29)
.

55
3.
2LI
QUI
DITYRATI
O

A.CASHRATI
O

TABLE:3.
3

Year
s CashRat
ios
2015-2016 0.
08
2016-2017 0.
058
2017-2018 0.
066
2018-2019 0.
112
2019-2020 0.
306

GRAPH3.
3

I
NTERPRETATI
ON:
Thedesirabl
ecashr at
ioi
s0.5:
1.Therat
ios0.
08,0.
058,0.
066,0.112and
0.306arebelow t
hestandar
dnor mthatt
hecompanyneedsmorethanjustit
scash
reser
vestopayoffi
tscurr
entdebt
.

56
B.CURRENTRATI
O

TABLE:3.
4

Year
s Cur
rentRat
ios
2015-2016 1.
18
2016-2017 1.
05
2017-2018 1.
08
2018-2019 1.
08
2019-2020 0.
99

GRAPH3.
4

I
NTERPRETATI
ON:

Aspert
heabov
etabl
ethecur
rentr
ati
ooft
heconcer
nfort
hest
udyper
iod
ar
elesst
hant
hest
andar
dnor
m(2:
1).I
tindi
cat
est
hel
i
qui
dit
yposi
ti
onoft
hecompany
i
snotsat
isf
act
oryandnotqui
tesuf
fi
cientt
omeeti
tsshor
t-
ter
m obl
i
gat
ionsespeci
all
y
i
nthef
inanci
aly
ear2019-2020(
0.99)
.

57
C.
QUI
CKRATI
O

TABLE3.
5

Year
s Qui
ckRat
ios
2015-2016 0.
57
2016-2017 0.
59
2017-2018 0.
44
2018-2019 0.
44
2019-2020 0.
46

GRAPH3.
5

I
NTERPRETATI
ON:

The qui
ck r
ati
oindi
cat
es t
he f
ir
ms ev
err
eadi
ness t
o meetshor
tter
m
obl
i
gat
ionsi
ncashandf
ort
hey
ear2015-
2016(
0.57),
2016-
2017(
0.59)
,2017-
2018
(
0.44)
,2018-
2019(
0.44)and2019-
2020(
0.46)i
slesst
hant
hest
andar
dnor
m(1:
1).
It
i
ndi
cat
est
hatcompani
esshor
tter
m qui
ckposi
ti
oni
snotsat
isf
act
ory
.

58
3.
3SOLVENCYRATI
O

A.DEBTTOTOTALASSETSRATI
O

TABLE3.
6

Year
s DebtToTot
alAsset
sRat
io
2015-2016 11.
13
2016-2017 10.
44
2017-2018 8.
58
2018-2019 19.
62
2019-2020 17.
82

GRAPH3.
6

I
NTERPRETATI
ON:
Thi
srat
ioshowst
hepr
opor
ti
onofacompany
’sasset
swhi
char
efi
nanced
t
hroughdebt
.Int
hey
ear2015-
2016t
her
ati
ois11.
13andi
tisdecr
easedt
o10.
44.Debt
t
otot
alasset
srat
ioi
sinf
luct
uat
ingt
rend.

59
B.NETWORTHTOTOTALASSETSRATI
O

TABLE3.
7

Year
s NetWor
thToTot
alAsset
sRat
io
2015-2016 55.
04
2016-2017 53.
51
2017-2018 56.
55
2018-2019 54.
71
2019-2020 54.
16

GRAPH3.
7

I
NTERPRETATI
ON:
Accor
ding t
o myst
udyt
he companygetav
erage f
und t
o meetcur
rent
obl
i
gat
ionsandf
ort
hey
ear2015-
2016t
her
ati
ois55.
04,
2016-
2017(
53.
51)
,2017-2018
(
56.
55)
,201-
2019(
54.
71)and2019-
2020(
54.
71)ar
etheav
erager
ati
os.Al
owr
ati
ois
i
ndi
cat
iveofgr
eat
ersol
vency
.

60
3.
4ACTI
VITYRATI
OS

A.ASSETSTURNOVERRATI
O

TABLE3.
8

Year
s Asset
sTur
nov
erRat
ios
2015-2016 2.
73
2016-2017 2.
68
2017-2018 2.
55
2018-2019 2.
14
2019-2020 2.
48

GRAPH3.
8

I
NTERPRETATI
ON:

Accor
dingt
omyst
udyt
hehi
ghestr
ati
oisi
nthey
ear2015-
2016i
s2.
73and
l
owesti
nthey
ear2018-
2019i
s2.
14.Dodl
adai
rycompany
’sst
artupi
snotv
eryef
fi
cient
wi
thi
tsuseofasset
s.

61
B.I
NVENTORYTURNOVERRATI
O

TABLE3.
9

Year
s I
nvent
oryTur
nov
erRat
ios
2015-2016 54.
17
2016-2017 100.
56
2017-2018 64.
4
2018-2019 54.
17
2019-2020 31.
38

GRAPH3.
9

I
NTERPRETATI
ON:

Accor
dingt
omyst
udyt
hel
owi
nvent
oryt
urnov
err
ati
oisi
nthey
ear2019-
2020
(
31.
38)andt
hehi
ghestr
ati
oisi
nthey
ear2016-
2017(
100.
56)
.

62
COMPARI
TIVEANALYSI
SOFBALANCESHEETFORTHEYEAR 2015&
2016

Par
ti
cul
ars Asat Asat INC/
DEC %IN
31-Mar -16 31-
Mar-15   INC/DEC
EQUI TYANDLI ABI LITI ES        
Shar ehol der s' funds        
Shar ecapi tal 32,748,230 32,
748,
230   -
Reser v esandsur plus 2, 409,200, 909 2,
136,
982,
683 272,
218,
226 12.73
  2,441,949, 139 2,
169,
730,913 272,
218,
223 12.54
Gov er nmentgr ant s 3,452,420 3,
671,
106 218,
686 5.95
Non- cur rentl iabi lities        
Long- term bor rowi ngs 323, 791,450 80,
924,
133 242,
867,
317 300.11
Def er redt axl i
abi li
ties,
86,997,302 83,
190,
810 3,
806,
492 4.
57
net
Long- term pr ov isions 52, 934,360 38,
967,
165 13,
967,
195 35.
84
  463,723, 112 203,
082,
108 260,
641,
004 128.
34
Currentl iabiliti
es        
Shor t-
ter m bor rowi ngs 707, 267,070 1,
132,
150,
090 424,
883,
020 37.
52
Tradepay abl es        
Tot al out st andi ng
dues of mi cro
- - _ _
enterpr ises and smal l
enterpr ises
Tot alout st andi ng
dues ofcr edi tor s ot her
353,786,145 362,
544,
861 8,
758,
716 2.
41
than mi cr o ent er prises
and
smal lent er prises        
Othercur rentl iabi l
iti
es 286, 022,501 207,
591,590 78,
430,
911 37.78
Shor t-
ter m pr ov isi ons 99, 520,082 30,
867,484 68,
652,
598 222.41
  1,446,595, 798 1,
733,154,025 286,
558,
227 16.53
TOTAL 4,355,720, 469 4,
109,638,152 246,
082,
317 5.98
ASSETS        
Non- cur rentasset s        
Fixedasset s        
Tangi bl ef i
xed
1,598,434, 863 1,
248,
116,
635 350,
318,
228 28.
06
asset s
I
nt angi blef ixed
1,780,365 1,
897,
355 116,
990 6.
16
asset s
Capi tal wor k-in-
357,009, 570 45,
135,
813 311,
873,
757 690.
96
progr ess
Non- cur renti nv est ment s 340, 074, 165 274,
112,
630 65,
961,535 24.
06
Long- ter ml oansand 407,854, 266 293,
812,
750 114,041,516 38.
81

63
adv ances
  2,705,153,229 1,863,075,183 842, 078, 046 45.19
Cur rentasset s        
Curr entinvestments 609,791,158 572,230,228 37, 560,930 6.
56
Invent ori
es 891,487,532 1, 416,658,232 525, 170,700 37.07
Trader ecei
vables 5,
074,599 11,
516,398 6,441, 799 55.93
Cashandbankbal ances 91,843,422 112,647,271 20, 803,849 18.46
Shor t-
terml oansand
39,786,150 121,178,584 81, 392,434 67.
16
adv ances
Othercur r
entassets 12,584,379 12,
332,256 252, 123 2.
04
  1,650,567,240 2,246,562,969 595, 995,729 26.52
TOTAL 4,355,720,469 4,109,638,152 246, 082,317 5.
98

COMPARI
TIVE ANALYSI
S OFBALANCE SHEET FOR THE YEAR 2016&
2017

Asat Asat I
NC/
DEC %IN
Par
ti
cul
ars
31-
Mar-
17 31-
Mar-
16   I
NC/ DEC
EQUITYANDLI
ABILI
TIES        
Shar
ehol
der
s'f
unds     _ _
Shar
ecapi
tal 32,
748,
230 32,
748,
230 _ _
Reserv esandsur plus 2,
760,
035,683 2,
353,
837,291 406,
198,
392 17.
25
  2,
792,783,913 2,
386,585,521 406,
198,
392 17.
02
Governmentgr ants 3,
233,
734 3,
452,
420 218,
686 6.
33
Non-cur rentliabil
it
ies        
Long-term bor rowings 315,
000,000 323,
791,450 8,
791,
450 2.
71
Deferred t ax l i
abil
i
ties,
119,
886,119 86,
997,
302 32,
888,
817 37.
8
net
Otherlong- terml i
abil
it
ies   - _ _
Long-term pr ovisi
ons 88,
664,234 52,
934,
360 35,
729,
874 67.
49
  523,
550,353 463,
723,
112 59,
827,
241 12.
9
Currentl i
abilit
ies        
Short-
ter m bor r
owings 968,
371,449 707,
267,
070 261,
104,
379 36.
91
Tradepay ables     _ _
Totalout standing dues
ofmi cr oent erpri
sesand 7, 510 - 7,
510 _
smallent erprises
Totalout standing dues
ofcr edi t
ors ot hert han 427,003,452 368,
153,
067 58,
850,
385 15.
98
micro ent erprises and

64
smal
lent
erpr
ises

Othercurrentli
abili
ti
es 378,
917,844 295,
422,074 83,
495,
770 28.
26
Short
-term provisi
ons 119,
420,509 99,
520,082 19,
908,
427 19.
99
  1,
893,720,764 1,
470,362,293 423,
358,
471 28.
79
TOTAL 5,
213,288,764 4,
324,123,346 889,
165,
418 20.
56
ASSETS        
Non-currentasset s        
Fi
xedasset s        
Tangiblefi
xedasset s 2,
571,
861,451 1,
819,
017,120 752,
844,
331 41.
38
I
ntangiblefi
xedasset s 3,
335,
629 2,
175,
504 1,
160,
125 53.
32
Capit
al work-
in-progress 304,
961,838 370,
531,302 65,
569,
464 17.
69
Non- cur r
enti nvest
ments - - _ _
Long- term l oans and
395,
019,
237 416,
124,
786 21,
105,
549 5.
07
adv ances
Othernon- cur r
entassets 500,
000 - 500,
000 _
  3,
275,678,155 2,
607,848,712 667,
829,
443 25.
6
Cur rentasset s        
Curr entinvest ments 641,
051,222 609,
791,158 31,
260,
064 5.
12
Invent ori
es 851,
959,198 904,
329,938 52,
370,
740 5.
79
Trader eceivables 14,
276,366 20,
370,170 6,
093,
804 29.
91
Cash and cash
111,
619,
371 118,
194,
980 6,
575,
609 5.
56
equi valents
Shor t-t
erm l oans and
312,
439,
246 51,
004,
009 261,
435,
237 512.
57
adv ances
Othercur r
entasset s 6,
265,
206 12,
584,
379 6,
319,
173 50.
21
  1,
937,
610,
609 1,
716,
274,
634 221,
335,
975 12.
89
TOTAL 5,
213,
288,
764 4,
324,
123,
346 889,
165,
418 20.
56

65
COMPARI
TIVE ANALYSI
S OFBALANCE SHEET FOR THE YEAR 2017&
2018

Asat Asat I
NC/
DEC %IN
Par
ti
cul
ars
31-
Mar-
18 31-
Mar-
17   I
NC/ DEC
ASSETS        
Non- cur r
entasset s        
Proper ty,plantandequi pment 3,
173.62 2,
530.00 643.
62 25.
43952569
Capi tal wor k-i
n-progress 160.
42 299.
11 138.
69 46.
36755709
Intangi bleasset s 6.
61 3.
33 3.
28 98.
4984985
Biologi calasset s ot hert han
       
bear erpl ant s
Mat ur edbi ological assets 20.
34 17.
68 2.
66 15.
04524887
Immat uredbi ologicalassets 7.
65 5.
87 1.
78 30.
32367973
Financi alasset s        
Invest ment s 71.
1 - 71.
1 0
Loans 148.
24 206.
34 58.
1 28.
1574101
Otherf inancial assets - 0.
5 0.
5 100
Incomet axasset s 46.
19 43.
54 2.
65 6.
086357373
Othernon- currentasset s 110.
4 170.
34 59.
94 35.
18844664
Tot alnon- currentasset s 3,
744.57 3,
276.71 467.
86 14.27834627
Cur rentasset s        
Invent or i
es 1,
340.83 851.
96 488.
87 57.
38180196
Financi alasset s        
Invest ment s 598.
49 683.
54 85.
05 12.
44257834
Trader ecei vables 36.
05 14.
28 21.
77 152.4509804
Loans 67 12.
5 54.
5 436
Cashandcashequi valent
s 139.
17 111.
62 27.
55 24.
68195664
Bank bal ances ot her t han
0.
7 - 0.
7 _
abov e
Der i
v atives - 4.
88 4.
88 100
Otherf inancial assets 1.
63 1.
39 0.
24 17.
26618705
Othercur r
entasset s 79.
23 300.
48 221.
25 73.
6321885
Tot alcur rentasset s 2,
263.
10 1,
980.65 282.
45 14.
26047005
Tot alasset s 6,
007.
67 5,
257.36 750.
31 14.
27161161

66
 EQUITYANDLI ABILI
TIES        
Equit
y        
Equit
ysharecapi
tal 32.
75 32.
75 0 0
OtherEqui
ty 3,
364.
84 2,
780.
59 584.
25 21.
01172773
Equityat t
ributabl
et oowner
s
3,
397.
59 2,
813.
34 584.
25 20.
76713088
oftheCompany
Non-controlli
nginterest - - _ _
Totalequity 3,
397.59 2,
813.34 584.25 20.76713088
Li
abi l
it
ies        
Non-cur r
entliabil
it
ies        
Fi
nanci all
iabil
it
ies        
Borrowings 222.
5 315 92.
5 29.36507937
Deferredtaxliabil
it
ies(Net
) 189.
72 130.
75 58.
97 45.10133843
Gover nmentgr ants 34.
52 14.
46 20.
06 138.7275242
Provisions 68.
88 88.
67 19.
79 22.31870982
Totalnon- cur r
entl i
abil
it
ies 515.
62 548.
88 33.26 6.059612301
Currentl i
abilit
ies        
Fi
nanci al l
iabil
iti
es        
Borrowi ngs 943.
13 968.
37 25.
24 2.
606441753
Tradepay ables 631.
51 514.
66 116.85 22.70430964
Otherf i
nanci alli
abil
iti
es 317.
82 244.
77 73.
05 29.84434367
Gover nmentgr ants 2.
86 1.
46 1.
4 95.89041096
Provisions 16.
15 8.
38 7.
77 92.72076372
Currentt axliabil
it
ies 132.
74 109.
42 23.
32 21.31237434
Othercur rentliabil
it
ies 50.
25 48.
08 2.
17 4.
513311148
Tot
alcurr
entli
abi
li
ti
es 2,
094.46 1,
895.14 199.32 10.51742879
Tot
all
iabi
li
ti
es 2,
610.08 2,
444.02 166.06 6.794543416
Tot
alequi
tyandli
abil
it
ies 6,
007.
67 5,
257.
36 750.
31 14.
27161161

67
COMPARI
TIVE ANALYSI
S OFBALANCE SHEET FOR THE YEAR 2018&
2019

Asat Asat INC/

DEC %I
N
Par
ti
cul
ars
31-
Mar-
19 31-
Mar-
18   I
NC/DEC
ASSETS        
Non-cur
rentasset
s        
Proper
ty,
plantandequi
pment 4,
401.
91 3,173.62 1,
228.
29 38.
70312136
Capit
alwork-
in-
progr
ess 112.
2 160.42 48.
22 30.
05859619
Goodwi
l
l 359.
37 _ 359.
37 0
I
nt angibleasset
s 133.
69 6.
61 127.
08 1922.
541604
Biologicalasset
sothert
han
       
bear erplants
Mat uredbi ol
ogi
cal
assets 20.
6 20.
34 0.
26 1.
27826942
I
mmat
uredbi
ologi
cal
asset
s 6.
4 7.
65 1.
25 16.
33986928
Fi
nanci
alasset
s        
Invest
ments 78.
63 71.1 7.
53 10.
5907173
Loans 84.
95 148.24 63.29 42.69427955
Incometaxassets 36.
48 46.
19 9.
71 21.
0218662
Deferr
edtaxassets 3.
2 18.8 15.60 82.
9787234
Ot
hernon-
cur
rentasset
s 137.
04 110.
4 26.
64 24.
13043478
Tot
alnon-
cur
rentasset
s 5,
374.
47 3,
763.
37 1,
611.
10 42.
81003462
Cur
rentasset
s        
I
nvent
ori
es 1,
248.
53 1,
340.
83 92.
30 6.
883795858
Fi
nanci
alasset
s        
I
nvest
ment
s 181.
35 598.
49 417.
14 69.
69874183
Tr
ader
ecei
vabl
es 73.
23 36.
05 37.
18 103.
1345354
Loans 156.
93 67.
00 89.
93 134.
2238806
Cashandcashequi
val
ent
s 214.
48 139.
17 75.
31 54.
11367392
Bankbal
ancesot
hert
han
0.
82 0.
70 0.
12 17.
14285714
above

68
Ot
herfi
nanci
alasset
s 2.
26 1.63 0.
63 38.65030675
Ot
hercurr
entasset
s 183.
41 79.23 104.
18 131.490597
Tot
alcur
rentasset
s 2,
061.
01 2,
263.
10 202.
09 8.
929786576
Tot
alasset
s 7,
435.
48 6,
026.
47 1,
409.
01 23.
38035367
EQUITYANDLI
ABI
LITI
ES        
Equi
ty        
Equi
tyshar
ecapi
tal 556.
72 32.
75 523.
97 1599.
908397
OtherEqui
ty 3,
511.
67 3,
364.
87 146.
80 4.
362724266
Equit
yattr
ibutabletoowner
s
4,
068.
39 3,
397.
59 670.
80 19.
74340636
oftheCompany
Non-cont
roll
i
ngi nter
est        
Tot
alequi
ty 4,
068.
39 3,
397.
59 670.
80 19.
74340636
Li
abi
li
ti
es        
Non-
cur
rentl
iabi
li
ti
es        
Fi
nanci
all
i
abi
l
iti
es        
Bor
rowi
ngs 1,
102.
38 222.
5 879.
88 395.
4516854
Deferredt axl i
abil
iti
es(Net) 260.75 208.52 52.23 25.04795703
Gov ernmentgr ants 31.
34 34.
52 3.
18 9.212050985
Prov i
sions 65 68.
88 3.
88 5.632984901
Totalnon- curr
entl i
abil
it
ies 1,459.47 534.42 925. 05 173.0941956
Currentl i
abi l
it
ies        
Fi
nanci al l
iabil
iti
es        
Borrowi ngs 313.65 943.13 629. 48 66.74371508
Tradepay ables        
Total outstandingduesof
microent erpri
sesandsmal l 2.
74   2.
74  
enterprises
Total outstandingduesof
creditorsot herthanmi cro
760.
86 631.
51 129.
35 20.
48265269
enterprisesandsmal l
enterprises
Otherf i
nanci alli
abil
iti
es 568. 56 317. 82 250. 74 78.89371342
Gov ernmentgr ants 2.
96 2.86 0.1 3.496503497
Prov i
sions 20.82 16.15 4.67 28.91640867
Currentt axl i
abil
it
ies 178. 49 132. 74 45. 75 34.46587314
Othercur rentliabil
it
ies 59.54 50.25 9.29 18.48756219
Totalcur rentliabil
it
ies 1,907. 62 2,094. 46 186. 84 8.
920676451
Totall i
abilit
ies 3,367. 09 2,628. 88 738. 21 28.08077965

69
Tot
alequi
tyandl
iabi
li
ti
es 7,
435.
48 6,
026.
47 1409.
01 23.
38035367

COMPARI
TIVE ANALYSI
S OFBALANCE SHEET FOR THE YEAR 2019&
2020

par
ti
cul
ars 31-Mar - 31-Mar-
19
I
NC/
DEC %I
N
20
ASSETS       INC/DEC
Non-curr
entasset
s        
Propert
y,pl
antandequi
pment 4,822.62 4,401.
91 420.71 9.
55744211
112.44 112.
2 0.
21390374
Capi
tal
wor
k-i
n-pr
ogr
ess 0.
24 3
441.
7 359.
37 22.9095361
Goodwi
l
l 82.
33 3
98.
66 133.
69 26.2024085
Otherint
angibleassets 35.
03 6
Biol
ogicalassetsothert
han    
bearerplant
s    
19.
91 20.
6 3.
34951456
Mat
uredbi
ologi
cal
asset
s 0.
69 3
I
mmat uredbiol
ogi
cal
asset
s 5.
53 6.
4 0.
87 13.59375
Fi
nancialasset
s        
3.
42 78.
63 95.6505150
I
nvest
ment
s 75.
21 7
93.
73 84.
95 10.3354914
Loans 8.
78 7
87.
58 36.
48 140.076754
I
ncome-t
axassets 51.10 4
Def
err
edtaxasset
s(net
) 0.21 3.2 2.
99 93.
4375
88.37 137.
04 35.5151780
Ot
hernon-
cur
rentasset
s 48.
67 5
5,
774.
17 5,
374.
47 7.
43701239
Tot
alnon-cur
rentasset
s 399.
7 4
Curr
entasset
s        
I
nventor
ies 1,
201.
70 1,
248.
53 3.
75081095
46.
83 4
Fi
nanci
alasset
s        
I
nvest
ments 115.22 181.35 66.
13 36.4653984
Tr
aderecei
vabl
es 72.
03 73.
23 1.
2 1.
63867267
70
 5
Loans 37.
61 156.
93 76.
0339004
119.
32 7
Cashandcashequi
val
ent
s 686.
73 214.
48 220.
183700
472.
25 1
Bankbal
ancesot
hert
hanabov
e 0.
34 0.
82 58.
5365853
0.
48 7
Ot
herf
inanci
alasset
s 6.
48 2.
26 186.
725663
4.
22 7
Ot
hercur
rentasset
s 108.
8 183.
41 40.
6793522
74.
61 7
Tot
alcur
rentasset
s 2,
228.
91 2,
061.
01 8.
14649128
167.
90 3
Tot
alasset
s 8,
003.
08 7,
435.
48 7.
63366991
567.
6 8
EQUITYANDLI ABILI
TIES        
Equit
y        
Equit
ysharecapi
tal 556.72 556.72 0 0
Otherequi
ty 3,778.24 3,511.67 7.
59097523
266.
57 4
Equit
yattri
butabletoowner
sof 4,
334.
96 4,
068.
39 6.
55222336
theCompany 266.
57 1
Non-contr
oll
inginter
est - - _  
Totalequi
ty 4,
334.
96 4,
068.
39 6.
55222336
266.57 1
Li
abil
it
ies        
Non-
cur r
entli
abil
it
ies        
Fi
nanciall
iabi
l
iti
es        
Bor
rowings 867.25 1,
102.
38 21.
3293056
235.13 8
LeaseLiabi
l
iti
es 70.
69 - 70.
69  
Defer
redtaxli
abi
li
ti
es(
net
) 365.13 260.
75 40.
0306807
104.
38 3
Gov
ernmentgr
ant
s 28.
38 31.
34 9.
44479897
2.
96 9
Pr
ovi
sions 94.
91 65 46.
0153846
29.
91 2
Tot
alnon-
cur
rentl
iabi
li
ti
es 1,
426.
36 1,
459.
47 2.
26863176
33.
11 4
Curr
entli
abil
it
ies        
Fi
nanci
alli
abil
iti
es        
Bor
rowings 400 313.65 27.
5306870
86.
35 7
LeaseLi
abi
l
iti
es 26.
45 - 26.
45  

71
 Tradepay ables        
Totaloutstandingduesofmi cro 7.
91 2.
74 188.
686131
enter
prisesandsmal lenter
prises 5.
17 4
Totaloutstandingduesof 780.
99 760.
86
credi
torsot herthanmi cr
o 2.64569040
enter
prisesandsmal l 20.
13 3
enter
prises        
Otherfi
nanci all
iabi
li
ti
es 611.33 568.56 7.52251301
42.
77 5
Governmentgr
ant
s 2.96 2.
96 0 0
Provi
sions 21.22 20.82 1.92122958
0.
4 7
Cur
rentt
axl
i
abi
l
iti
es 337.
89 178.
49 89.3047229
159.
4 5
Ot
hercur
rentl
i
abi
l
iti
es 53.
01 59.
54 10.9674168
6.
53 6
Tot
alcur
rentl
iabi
li
ti
es 2,
241.
76 1,
907.
62 17.5160671
334.
14 4
Tot
all
iabi
li
ti
es 3,
668.
12 3,
367.
09 8.
94036096
301.
03 5
Tot
alequi
tyandl
iabi
li
ti
es 8,
003.
08 7,
435.
48 7.
63366991
567.
6 8

72
 CHAPTER-
IV

4.
1FI
NDI
NGS

4.
2SUGGESTI
ONS

4.
3CONCLUSI
ON

73
 4.
1FI
NDI
NGS

 Thenetpr
ofi
trat
iof
ort
hey
ear2017–2018and2018–2019r
ecor
dedasa
hi
ghestgr
owt
hrat
eof3.
29.

 Cur
rentr
ati
odur
ingt
hey
ear
s2016-
2020i
snotsat
isf
act
ory
.Ther
efor
e,i
tcanbe
concl
udedt
hatt
hel
i
qui
dit
yper
for
manceoft
hecompanyi
spoor
.

 Thequi
ckr
ati
oisnotsat
isf
act
ory
.Ther
efor
e,i
tcanbeconcl
uded t
hatt
he
l
i
qui
dit
yper
for
manceoft
hecompanyi
snotgood.

 Thecompanyhasnotmai
ntai
nedcashr
ati
oof0.
5:1ast
her
ati
oper
cent
ageof
0.
08,0.
058,
0.066,0.
112,and0.
306.Thecompanyi
snotkeepi
ngsuf
fi
cientcash
andbankbal
ances.

 Debtt
otot
alasset
srat
ioi
sinf
luct
uat
ingt
rend.Thi
srat
ioshowst
hepr
opor
ti
on
ofacompany
’sasset
swhi
char
efi
nancedt
hroughdebt
.Int
hey
ear2015-
2016
t
her
ati
ois11.
13andi
tisdecr
easedt
o10.
44.

 Thi
scompanygetav
eragef
undt
omeetcur
rentobl
i
gat
ionsandf
ort
hey
ear2015
-
2016t
her
ati
ois55.
04,
2016-
2017(
53.
51)
,2017-2018(
56.
55)
,201-
2019(
54.
71)
and2019-
2020(
54.
71)ar
etheav
erager
ati
os.Al
owr
ati
oisi
ndi
cat
iveofgr
eat
er
sol
vency
.

 Thehi
ghestasset
stur
nov
err
ati
oisi
nthey
ear2015-
2016i
s2.
73andl
owesti
n
t
hey
ear2018-
2019i
s2.
14.

 Dodl
adai
rycompany
’si
snotv
eryef
fi
cientwi
thi
tsuseofasset
sbecauseoft
he
hi
ghestr
ati
oisi
nthey
ear2015-
2016i
s2.
73andl
owesti
nthey
ear2018-
2019i
s
2.
14.

74
 4.
2SUGGESTI
ONS

 Thecompanyshoul
dconcent
rat
eont
hei
ncr
easet
henetpr
ofi
tbecause
i
tismai
ntai
ningav
eragepr
ofi
t.

 Thecompanyhast
otakest
epst
omai
ntai
nst
andar
dcur
rent
,cashand
qui
ckr
ati
os(
li
qui
drat
ios)t
omeett
hel
i
qui
dit
yobl
i
gat
ion

 Thecompanyhasal
sot
akenst
epst
omai
ntai
ndebt
orsef
fi
cient
ly.

 The company has t

otr
ain empl
oyees on r
ecei
vabl
e management
t
echni
ques.

 The companyhast
oincr
ease t
he use ofasset
sto gener
ate sal
es
becauseofi
tnotv
eryef
fi
cientwi
thi
tsuseofasset
s.

 The or
gani
zat
ion need t
o cont
roli
tsl
ong-
ter
m debtpr
oper
lyf
ori
ts
ef
fect
iveut
il
izat
ion.

 The company needs t

o mai
ntai
n good i
nvent
oryt
urnov
err
ati
o by
i
ncr
easi
ngt
hesal
es.

 Thecompanyi
sut
il
izat
iont
hef
ixedasset
s,whi
chmaj
ori
tyhel
ptot
he

75
 gr
owt
hoft
heor
gani
zat
ion.Thecompanyshoul
dmai
ntai
nitper
fect
ly.

4.
3CONCLUSI
ON

Af
teranal
yzi
ng t
he f
inanci
alst
atement
s ofDODLA DAI
RY LTD.
,
dur
ingt
hel
ast5f
inanci
aly
ear
s,i
tiscl
eart
hatov
eral
lfi
nanci
alposi
ti
onoft
hecompany
i
snotsat
isf
act
ory
.Howev
er,t
hemanagementneedst
ofocusmor
eont
hef
inanci
al
posi
ti
on oft
he companybyi
mpr
ovi
ng cur
rentasset
s management
. The Ov
eral
l
sol
vencyposi
ti
onoft
hecompanyi
snotsound.¬¬¬

76
 ANNEXURE

BALANCESHEET

PROFI
T&LOSSACCOUNT
77
 SYNOPSI
S

BI
BOGRAPHY

78
 ANNEXURE

BALANCESHEETFORTHEYEARENDED2015-
16

Par
ti
cul
ars Asat Asat
31-
Mar-
16 31-
Mar-
15
EQUI TYANDLI ABI LITI ES    
Shar ehol ders' funds    
Shar ecapi tal 32,748,230 32,748,230
Reser v esandsur pl us 2,409,200, 909 2,136,982, 683
  2,441,949, 139 2,169,730, 913
Gov ernmentgr ant s 3,
452,420 3,
671,106
Non- cur rentliabi l
iti
es    
Long- term bor rowi ngs 323,791,450 80,924,133
Def erredt axl iabiliti
es, net 86,997,302 83,190,810
Long- term pr ovisions 52,934,360 38,967,165
  463,723, 112 203,082, 108
Currentl iabili
ties    
Shor t-term bor r
owi ngs 707,267,070 1,132,150, 090
Tradepay abl es    
Tot al outst andi ngduesofmi cro
- -
enterpr i
sesandsmal lenterpri
ses
Tot alout standi ngduesof
creditorsot hert hanmi croenterpr
ises 353,
786,
145 362,
544,
861
and
smal lenterpr ises    
Othercur rentl iabiliti
es 286,022,501 207,591,590
Shor t-term pr ov i
sions 99,520,082 30,867,484
  1,446,595,798 1,733,154,025
TOTAL 4,355,720,469 4,109,638,152
ASSETS    
Non- cur rentasset s    
Fixedasset s    
Tangi blef i
xedasset s 1,598,434,863 1,248,116,635
Intangi blef i
xedasset s 1,
780,365 1,
897,355
Capi t
al wor k-in-progress 357,009,570 45,135,813
Non- currenti nv estment s 340,074,165 274,112,630
Long- terml oansandadv ances 407,854,266 293,812,750
  2,705,153,229 1,863,075,183
Currentasset s    

79
Currentinvestments 609,791,158 572,230,228
I
nv entori
es 891,487,532 1,416,658,232
Trader ecei
vables 5,
074,599 11,
516,398
Cashandbankbal ances 91,843,422 112,647,271
Short-
terml oansandadvances 39,786,150 121,178,584
Othercur r
entassets 12,584,379 12,
332,256
  1,650,567,240 2,246,562,969
TOTAL 4,355,720,469 4,109,638,152

BALANCESHEETFORTHEYEARENDED2016-
17

Asat Asat
Par
ti
cul
ars
31-
Mar -
17 31-
Mar -
16
EQUITYANDLI
ABILI
TIES    
Shar
ehol
der
s'f
unds    
Shar
ecapi
tal 32,
748,
230 32,
748,
230
Reserv esandsur plus 2,760, 035, 683 2,353,837,291
  2,792, 783, 913 2,386,585,521
Governmentgr ants 3,
233, 734 3,
452,420
Non-cur rentliabil
iti
es    
Long-term bor rowings 315, 000, 000 323,791,450
Deferredt axliabil
iti
es,net 119, 886, 119 86,997,
302
Otherlong- terml i
abili
ti
es   -
Long-term pr ovisi
ons 88,664, 234 52,934,
360
  523,550, 353 463,723,112
Currentliabili
ties    
Short-
term bor r
owi ngs 968, 371, 449 707,267,070
Tradepay ables    
Totalout standingduesofmi cr
oent
erpr
ises
7,
510 -
andsmal lenter pr
ises
Total
outst
andingduesofcredi
tor
sother
427,
003,
452 368,
153,
067
thanmicr
oenterpr
isesandsmallent
erpr
ises
Othercurr
entli
abi
lit
ies 378,917,844 295,422,074
Short
-ter
m provi
sions 119,420,509 99,
520,082
  1,893,720,764 1,470,362,293
TOTAL 5,213,288,764 4,324,123,346
ASSETS    
Non-curr
entassets    
Fi
xedassets    

80
 Tangibl
ef i
xedassets 2,571,861,451 1,819,017,120
I
ntangiblefi
xedassets 3,335,629 2,175,504
Capit
al work-
in-
progr
ess 304,961,838 370,531,302
Non- curr
enti nvest
ment s - -
Long- t
erml oansandadv ances 395, 019, 237 416,124,786
Othernon- cur r
entassets 500, 000 -
  3,275, 678, 155 2,607,848,712
Cur r
entasset s    
Currentinvest ments 641, 051, 222 609,791,158
Inventori
es 851, 959, 198 904,329,938
Trader eceivables 14, 276, 366 20,
370,170
Cashandcashequi valents 111, 619, 371 118,194,980
Short -
ter
ml oansandadv ances 312, 439, 246 51,
004,009
Othercur r
entasset s 6,265, 206 12,
584,379
  1,937, 610, 609 1,716,274,634
TOTAL 5,213, 288, 764 4,324,123,346

BALANCESHEETFORTHEYEARENDED2017-
18

Asat Asat
Par
ti
cul
ars
31-
Mar-
18 31-
Mar-
17
ASSETS    
Non- cur r
entasset s    
Proper ty,plantandequi pment 3,173. 62 2,530. 00
Capi tal wor k-in-progress 160. 42 299. 11
Intangi bleasset s 6.
61 3.33
Biologi cal asset sotherthanbear
erpl
ant
s    
Mat ur edbi ologi cal assets 20.34 17. 68
Immat urebi ologi calassets 7.
65 5.87
Financi alasset s    
Invest ment s 71.1 -
Loans 148. 24 206. 34
Otherf inanci al assets - 0.5
Incomet axasset s 46.19 43. 54
Othernon- cur rentasset s 110. 4 170. 34
Tot alnon- cur rentasset s 3,744. 57 3,276. 71
Cur rentasset s    
Invent or i
es 1,340. 83 851. 96

81
 Financi
alasset
s    
Invest
ments 598. 49 683. 54
Traderecei
vabl
es 36. 05 14.28
Loans 67 12.5
Cashandcashequi valent
s 139. 17 111. 62
Bankbalancesotherthanabov
e 0.7 -
Deri
vati
ves - 4.
88
Otherfi
nancial
assets 1.63 1.
39
Othercurr
entassets 79. 23 300. 48
Totalcurr
entassets 2,263. 10 1,980. 65
Totalassets 6,007. 67 5,257. 36
EQUITYANDLI ABILI
TIES    
Equit
y    
Equit
ysharecapital 32. 75 32.75
OtherEquit
y 3,364. 84 2,780. 59
Equityattri
butabletoowner soft
heCompany 3,397. 59 2,813. 34
Non-controll
inginterest - -
Totalequity 3,397. 59 2,813. 34
Li
abi l
it
ies    
Non-cur r
entliabil
it
ies    
Fi
nanci all
iabil
it
ies    
Borrowings 222. 5 315
Deferredtaxliabil
it
ies(Net
) 189. 72 130. 75
Gover nmentgr ants 34. 52 14.46
Provisions 68. 88 88.67
Totalnon- cur r
entl i
abil
it
ies 515. 62 548. 88
Currentl i
abilit
ies    
Fi
nanci al l
iabil
iti
es    
Borrowi ngs 943. 13 968. 37
Tradepay ables 631. 51 514. 66
Otherf i
nanci alli
abil
iti
es 317. 82 244. 77
Gover nmentgr ants 2.86 1.
46
Provisions 16. 15 8.
38
Currentt axliabil
it
ies 132. 74 109. 42
Othercur rentliabil
it
ies 50. 25 48.08
Tot
alcurr
entli
abi
li
ti
es 2,094. 46 1,895. 14
Tot
all
iabi
li
ti
es 2,610. 08 2,444. 02
Tot
alequi
tyandli
abil
it
ies 6,
007.
67 5,
257.
36

82
BALANCESHEETFORTHEYEARENDED2018-
19

Asat Asat
Par
ti
cul
ars
31-
Mar-
19 31-
Mar-
18
ASSETS    
Non-cur
rentasset
s    
Proper
ty,
plantandequi
pment 4,
401.
91 3,173.62
Capit
alwork-
in-
progr
ess 112.
2 160.42
Goodwi
l
l 359.
37 _
I
ntangi
bleasset
s 133.
69 6.
61
Bi
ologi
cal
asset
sot
hert
hanbear
erpl
ant
s    
Mat
uredbi
ologi
cal
asset
s 20.
6 20.
34
I
mmat
urebi
ologi
cal
asset
s 6.
4 7.
65
Fi
nanci
alasset
s    
Invest
ments 78.
63 71.
1
Loans 84.
95 148. 24
Incometaxassets 36.
48 46.19
Deferr
edtaxassets 3.
2 18.
8
Ot
hernon-
cur
rentasset
s 137.
04 110.
4
Tot
alnon-
cur
rentasset
s 5,
374.
47 3,
763.
37
Cur
rentasset
s    
I
nvent
ori
es 1,
248.
53 1,
340.
83
Fi
nanci
alasset
s    
I
nvest
ment
s 181.
35 598.
49
Tr
ader
ecei
vabl
es 73.
23 36.
05
Loans 156.
93 67.
00
Cashandcashequi
val
ent
s 214.
48 139.
17
Bankbalancesotherthanabov
e 0.
82 0.
70
Otherfi
nanci
alassets 2.
26 1.
63
Othercurr
entassets 183.
41 79.23
Tot
alcur
rentasset
s 2,
061.
01 2,
263.
10

83
 Tot
alasset
s 7,
435.
48 6,
026.
47
EQUITYANDLI
ABI
LITI
ES    
Equi
ty    
Equi
tyshar
ecapi
tal 556.
72 32.
75
OtherEqui
ty 3,
511.
67 3,
364.
87
Equit
yattr
ibut
abl
etoowner
soft
heCompany 4,
068.
39 3,
397.
59
Non-
cont
rol
l
ingi
nter
est    
Tot
alequi
ty 4,
068.
39 3,
397.
59
Li
abi
li
ti
es    
Non-
cur
rentl
iabi
li
ti
es    
Fi
nanci
all
i
abi
l
iti
es    
Bor
rowi
ngs 1,
102.
38 222.
5
Deferredt axliabil
it
ies(Net) 260.75 208.52
Gover nmentgr ants 31.34 34.
52
Provisions 65 68.
88
Totalnon- cur r
entliabi
li
ti
es 1,459.47 534.42
Currentl i
abili
ties    
Fi
nanci alliabil
iti
es    
Borrowi ngs 313.65 943.13
Tradepay ables    
Tot
alout
standi
ngduesofmi
croent
erpr
isesand
2.
74  
small
ent
erpri
ses
Totalout
standingduesofcr
edi
tor
sothert
han
760.
86 631.
51
microenter
prisesandsmall
ent
erpri
ses
Otherf i
nancialli
abil
iti
es 568. 56 317. 82
Gover nmentgr ants 2.96 2.
86
Provisions 20. 82 16.15
Currentt axli
abil
it
ies 178. 49 132. 74
Othercur rentli
abi
lit
ies 59. 54 50.25
Totalcur rentli
abi
lit
ies 1,907. 62 2,094. 46
Totalliabili
ti
es 3,367. 09 2,628. 88
Totalequi tyandliabil
it
ies 7,435. 48 6,026. 47

84
BALANCESHEETFORTHEYEARENDED2019-
20

par
ti
cul
ars 31-Mar -20 31-Mar-
19
ASSETS    
Non-curr
entasset
s    
Propert
y,pl
antandequi
pment 4,822.62 4,
401.
91
Capit
alwork-
in-
progress 112.44 112.
2
Goodwil
l 441.
7 359.37
Otheri
ntangi
bleassets 98.
66 133.69
Bi
ologi
cal
asset
sot
hert
hanbear
erpl
ant
s    
Mat
uredbi
ologi
cal
asset
s 19.
91 20.
6
Immat urebiologicalasset s 5.
53 6.
4
Financialasset s    
Investment s 3.42 78.63
Loans 93.73 84.95
Income- t
axasset s 87.58 36.48
Deferredtaxasset s( net) 0.21 3.2
Othernon- currentasset s 88.37 137. 04
Totalnon- currentasset s 5,774. 17 5,374. 47
Cur r
entasset s    
Inventori
es 1,201. 70 1,248. 53
Financialasset s    
Investment s 115. 22 181. 35
Trader eceivables 72.03 73.23
Loans 37.61 156. 93
Cashandcashequi v
al ent
s 686. 73 214. 48
Bankbal ancesot hert hanabov
e 0.34 0.
82
Ot
herfi
nanci
alasset
s 6.48 2.
26
Ot
hercurr
entasset
s 108.
8 183.
41
Totalcurr
entassets 2,228.91 2,061.01
Totalassets 8,003.08 7,435.48
EQUITYANDLI ABILI
TIES    
Equit
y    
Equit
yshar ecapi
tal 556.72 556.72
Otherequit
y 3,778.24 3,511.67
Equit
yat t
ri
butabl
et oowner
soft
heCompany 4,334.96 4,068.39

85
 Non-cont r
oll
inginterest - -
Totalequity 4,334.96 4,068.39
Li
abi l
it
ies    
Non-cur r
entliabil
it
ies    
Fi
nanci all
iabil
it
ies    
Borrowings 867.25 1,102.38
LeaseLi abil
i
ties 70.
69 -
Deferredtaxliabil
it
ies(net
) 365.13 260.75
Governmentgr ants 28.
38 31.
34
Provisions 94.91 65
Totalnon- cur rentli
abil
it
ies 1,
426.36 1,459.47
Currentl iabi l
it
ies    
Fi
nanci al liabil
ities    
Borrowi ngs 400 313.65
LeaseLi abi l
it
ies 26.45 -
Tradepay ables    
Total out standi ngduesofmi cr
oenter
pri
sesand 7.91 2.74
smal lent erprises
Total out standi ngduesofcredit
orsot
herthan 780.
99 760.
86
microent er pri
sesandsmal l
enterprises    
Otherf i
nanci al l
iabi
li
ti
es 611.33 568.56
Gover nmentgr ants 2.96 2.
96
Provisions 21.22 20.82
Currentt axli
abil
it
ies 337. 89 178. 49
Othercur rentl
iabi
lit
ies 53.01 59.54
Tot
alcurr
entli
abi
li
ti
es 2,
241.
76 1,
907.
62
Tot
all
iabi
li
ti
es 3,
668.
12 3,
367.
09
Tot
alequi
tyandli
abil
it
ies 8,
003.
08 7,
435.
48

86
PROFI
TANDLOSSA/
CFORTHEYEARENDED2015-
16

Par
ti
cul
ars Not
es Fortheyear Forthe
ended31Mar ch yearended31
2016 March2015
Revenuef
rom operat
ions 2.
18    
Sal
eofproduct
s 11,812,
998,42110,178,066,
38
7
Saleofser
vices 5,
094,
049 2,
400,
083
Otheroper
atingrev
enue 5,
665,
494 3,
775,
132

Tot
al 11,
823,
757,
964 10,184,
241,
60
2
Otheri
ncome 2.19 55,
900,
857 61,
603,
427
Totalr
evenue 11,
879,
658,
821 10,245,
845,
02
9
Expenses    
Costofmateri
alsconsumed 2.2 8,
788,
403,
426 9,229,
535,
424
Purchaseofst
ock-i
n-t
rade 27,
462,
454 26,
624,
682

Changesininvent
ori
esoffi
nishedgoods, 289,
882,
192 -
883,
352,
251
work-
in-
progressandst
ock-i
n-2.21tr
ade

Employ
eebenefit
sexpense 2.22 456,
854,
390 334,
094,
784
Fi
nancecosts 2.23 121,
775,
515 75,
581,
078
Depr
eciat
ionandamorti
zat
ion 2.9 158,
716,
986 127,
236,
684
Add:Tr
ansferf
rom gov
ernmentgr
ant -
218,
686 -
218,
686

Otherexpenses 2.
24 1,
275,
106,
429 1,
128,
501,
013
Provi
sionforimpai
rmentonl
i
ve 2.
38 21,
103,
303 51,
941,
192
st
ock
Totalexpenses 11,
139,
086,
009 10,089,
943,
92
0
Prof
itbefor
etax 740,
572,
812 155,
901,
109
Taxexpense:    
-Curr
enttax 242,
253,
006 48,
898,
329
-MATCr edi
tEnt
it
lement - -
41,
212,
710

-Taxforearl
i
eryear
s 2.
25 142,
268,
110 115,
791
-Defer
redtax(cr
edi
t)
/char
ge 295,
972 -
5,259,
928

  384,
817,
088 2,
541,
482
Pr
ofi
tfort
hey
ear 355,
755,
724 153,
359,
627

87
      
Earni
ngsperequi t
yshare( parvalue 2.
31 108.
63 46.
83
of`10pershar e)
Basic&di luted
Si
gnifi
cantaccountingpolicies 1    
Notestothefinancialst
atement s 2    

PROFI
TANDLOSSA/
CFORTHEYEARENDED2016-
17

Fort
hey
earended Fort
hey
earended
Par
ti
cul
ars 31March2017 31March2016

Revenuefr
om operations    
Sal
eofproduct
s 14,
107,
660,
768 11,
809,
336,
606
Sal
eofservi
ces 1,
191,
283 5,
094,
049
Ot
heroperat
ingrevenue 5,
810,
145 5,
665,
494
Tot al 14,114,662,196 11, 820,096,149
Ot herincome 44,996,724 55,900,857
Tot alincome 14,159,658,920 11, 875,997,006
Expenses    
Costofmat erialsconsumed 10,959,906,665 8,788,403,426
Purchaseofst ock- in-trade - 27,462,454
Changesi ni nv ent oriesoff ini
shed 199, 108,295 289,882,192
goods,wor k-in-progr essandst ock-
i
n-t
r ade
Manuf acturingexpenses    
Empl oy eebenef i
tsexpense 522,051,661 456,
854,390
Fi nancecost s 80,
297,005 121,
775,515
Depreci ationandamor tizati
on 189,056,169 158,
716,986
Add: Transf erfrom gov er nment -
218,686 -218,
686
grant
Ot herexpenses 1,
542,207,656 1,
271,
444,
614
Prov i
sionf orimpai rmentonl i
ve 7,807,926 21,
103,
303
stock
Tangi blefixedasset s 7,
807,926  
Capital wor k- in-progr ess -  
Tot alexpenses 13,500,216,693 11,
135,424,194
Pr ofitbef or etax 659,442, 228 740,572,812
Taxexpense:    
-Cur r
entt ax 182, 632,655 242,253,006
-MATCr edit( ent i
tl
ement )   -
-Taxf orear l
iery ear s - 142,268,110
-Def er r
edt axchar ge 32,888,817 295,972

88
 -Deferredt axchar
geinr espectof    
earl
iery
ears
  215,
521,
472 384,
817,
088
Profi
tfort
hey ear 443,
920,
756 355,
755,
724
Earni
ngsperequi tyshare(par    
valueof`10pershar e)
Basic&dilut
ed 135.
56 108.
63
PROFI
TANDLOSSA/
CFORTHEYEARENDED2017-
18

Not
e Fort
he Fort
he
Par
ti
cul
ars yearended31 yearended31
March2018 March2017
Rev enuef rom operati
ons 31 15,
372.
67 14,
099.
84
Otheri ncome 32 63.
5 71.
45
Totalincome 15,
436.
17 14,
171.
29
Expenses    
Costofmat er
ial
sconsumed 33 12,
407.
11 10,
976.
15
Changesi ninventori
esoffini
shedgoods, 34 -
417.
14 199.
11
stock-in-tr
adeandwor k-
in-
progr
ess
Empl oy eebenefit
sexpense 35 613.
13 522.
03
Depr eciati
onandamor ti
zati
onexpense 36 252.
79 177.
5
Financecost s 37 102.
74 80.
29
Otherex penses 38 1,
725.
03 1,
534.
19
Totalexpenses 14,
683.
66 13,
489.
27
Prof i
tbef oretax 752.
51 682.
02
Incomet axexpense    

-Currenttax 39 177.
19 182.
63
-Deferredt ax 39 69.
67 40.
56
Totaltaxexpense 246.
86 223.
19
Profi
tforthey ear(A) 505.
65 458.
83
Othercompr ehensivei
ncome    

I
temst hatwi l
lnotbereclassi
fi
edsubsequentl
yto    
thestat
ementofpr ofi
torloss
Remeasur ementoft henetdefinedbenefi
t 23.
4 -
4.13
obli
gati
on
I
ncomet axr elat
ingtotheseit
ems 39 -
8.1 1.43
Othercompr ehensiveincomef ortheyear(B) 15.3 -2.7
Totalcompr ehensiveincomefort heyear(
A+B) 520.95 456.
13
Earni
ngspershar
e(nomi
nalv
alueof`10 42    
each)

89
 Basic[i
n`] 154.
41 140.
11
Dil
uted[i
n` ] 154.
41 140.
11
Weightedav er
agenumberof equi
tyshar
es    
usedincomput ing ear
ningspershare:
-Basic 3,
274,
823 3,
274,
823
-Dil
uted 3,
274,
823 3,
274,
823
PROFI
TANDLOSSA/
CFORTHEYEARENDED2019-
20

Fortheyearended Note 31-

Mar-
20 31-
Mar -
19
Revenuefrom oper
ati
ons 29 19,
876.
16 15,
982.36
Otheri
ncome 30 123.
61 75.
56
Totali
ncome 19,
999.
77 16,
057.92
Expenses    
Costofmat er
ial
sconsumed 31 15,
028.
69 11,
870.
10

Changesi
ninv
entori
esoffi
nished 32 574.
29 148.
21
goodsandwork-
in-
progr
ess

Empl oy eebenef it
sexpense 33 843.
69 714.
45
Depr eciationandamor tizati
on 34 463.
35 335.
91
expense
Financecost s 35 161.
03 107.
68
Ot herex penses 36 2,
450.
03 2,
094.
99
Tot alexpenses 19,
521.
08 15,
271.
34
Pr ofi
tbef oret ax 478.
69 786.
57
Incomet axexpense    
-Cur renttax 37 119.
47 233.
23
-Def erredt ax 37 74.
51 29.
58
Tot altaxexpense 193.
98 262.
81
Pr ofi
tfort hey ear(A) 284.
71 523.
76
Ot hercompr ehensiveincome    
Itemst hatwi llnotbereclassi
fi
edsubsequent
ly    
topr ofitorloss
Remeasurementoft
henetdefi
nedbenef
it -
3.66 -
1.79
obl
igat
ion
I
ncomet axrel
ati
ngt
othesei
tems 37 1.
28 0.
63

Ot
hercompr
ehensi
vei
ncomef
ort
hey
ear(
B) -
2.38 -
1.16

Totalcomprehensi
veincomeforthey
ear 282.
33 522.
6
(A+B)
Earni
ngspershare(nominalv
alue 40    
ofequityshar
esof`10each,ful
ly
paid-
up)

90
 Basic[i
n`] 5.
11 9.
41
Dil
uted[i
n`] 5.
11 9.
4
Weightedaver
agenumberofequityshar
es    
usedincomputingear
ningspershar
e:

-Basic 55,
671,
991 55,
671,
991
-Dil
uted 55,
671,
991 55,
733,
681
SYNOPSI
S

I
NTRODUCTI
ON

Fi
nanci
alSt
atementAnal
ysi
sisast
udyaboutaccount
ingr
ati
osamongv
ari
ousi
tems
i
ncl
udedi
nthebal
ancesheet
.Theser
ati
osi
ncl
udepr
ofi
tabi
l
ityr
ati
os,l
i
qui
dit
yrat
ios,
l
ever
ager
ati
os,andt
urnov
err
ati
os.Thepur
poseoft
heFi
nanci
alSt
atementAnal
ysi
sis
t
oassesst
hef
inanci
alheal
thandper
for
manceoft
hecompany
.

I
NDUSTRYPROFI
LE

 A 
dai
ry 
i
sa 
busi
nessent
erpr
ise 
est
abl
i
shedf
ort
hehar
vest
ingorpr
ocessi
ngor
bot
h of ani
mal
 
mil
k – most
ly f
rom 
cows 
or 
buf
fal
oes, but al
so
f
rom 
goat
s, 
sheep,
 
hor
ses,
or 
camel
s –f
orhumanconsumpt
ion.

 Tosuppl
ygoodandsaf
emi
l
k&mi
l
kpr
oduct
sconsi
stent
lyt
hroughcont
inual
i
mpr
ovementofoursy
stemsandpr
act
ices.

 Tobeawor
ld-
classdai
rycompanybypr
ovi
dinghi
gh-
qual
i
typr
oduct
sand
ser
vices.

COMPANYPROFI
LE

 Dodl
aDai
ryLi
mit
edi
sapubl
i
cli
mit
edcompanyhav
ingi
tsr
egi
ster
edandcor
por
ate
of
fi
ceatHy
der
abadCi
tyofTel
anganaSt
atei
nIndi
a.

 Thecompanywasi
ncor
por
atedi
nthey
ear1995andpr
oduct
ioncommencedi
n1997.

 Thevi
sionoft st
hecompanyi obeawor
ld-
classdai
rycompanybypr
ovi
dinghi
gh-
qual
i
typr
oduct
sandser
vices.

91
  Themi
ssi
onoft st
hecompanyi osuppl
ygoodandsaf
emi
l
k&mi
l
kpr
oduct
s
consi
stent
lyt
hroughcont
inual
impr
ovementofoursy
stemsandpr
act
ices.

RESEARCHANDMETHODOLOGY

NEEDSOFTHESTUDY

 Rat
io anal
ysi
sisv
eryi
mpor
tant t
ooli
nfi
nanci
alst
atement anal
ysi
sin
det
ermi
ningf
inanci
alper
for
manceofacompany
.Thi
sst
udyhel
pst
oanal
yzet
he
pastandpr
esentf
inanci
alposi
ti
onoft
hecompany
.

SCOPEOFTHESTUDY

 Thi
spr
ojectdeal
swi
thanal
ysi
sandi
nter
pret
ati
onofdat
acol
l
ect
edt
hrought
he
sour
ceofsecondar
ydat
aonl
y.

 Thi
sst
udyi
sconf
inedt
oonl
y5y
ear
sannualr
epor
tsf
rom 2015-
2016t
o2019-
2020.

 Gr
aphsanddi
agr
amsandt
abul
ati
onmet
hodsar
eusedt
oanal
ysi
sandi
nter
pret
t
hedat
a.

OBJECTI
VESOFTHESTUDY

 Tost
udyf
inanci
alposi
ti
onoft
heDODLADAI
RYLTD.

 Tosuggestf
easi
blesol
uti
ont
oimpr
ovet
heov
eral
lef
fi
ciencyoft
heDODLA
DAI
RYLTD.

 Tounder
standt
hef
inanci
alper
for
mancebyusi
ngandappl
yi
ngdi
ff
erentt
ool
s
andt
echni
quesonf
inanci
alst
atement
soft
hecompany
.

92
RESEARCHMETHODOLOGY

PRI
MARYDATA:

Pr
imar
ydat
aisor
igi
nal
resear
cht
hati
sobt
ainedt
hroughf
ir
sthandi
nvest
igat
ion.

SECONDARYDATA:

Secondar
ydat
ahasbeencol
l
ect
edf
rom t
hei
nter
nalaswel
lasext
ernalsour
ces
i
ncl
ude t
he i
nfor
mat
ion f
rom t
he company
’s Ol
d Recor
ds,Var
ious Books and
Publ
i
cat
ions,
Magazi
nes&Websi
tes.

LI
MITATI
ONSOFTHESTUDY

 Det
ail
edanal
ysi
scoul
dnotbecar
ri
edf
ort
hepr
ojectwor
kbecauseoft
he
l
i
mit
edt
imespan.

 Duet
oCOVI
D-19Iam notv
isi
tedt
hecompanydi
rect
ly.

 5y
ear
sannualr
epor
tsar
enotsuf
fi
cientt
ofi
ndt
heov
eral
lposi
ti
onoft
hedodl
a
dai
ryLt
d.

FI
NDI
NGS

 Thenetpr
ofi
trat
iof
ort
hey
ear2017-
2018and2018-
2019r
ecor
dedasahi
ghest
gr
owt
hrat
eof3.
29

 Cur
rentr
ati
odur
ingt
hey
ear
s2016-
2020i
snotsat
isf
act
ory
.Ther
efor
e,i
tcanbe
cal
cul
atedt
hatt
hel
i
qui
dit
yper
for
manceoft
hecompanyi
spoor
.

 Thequi
ckr
ati
oisnotsat
isf
act
ory
.Ther
efor
e,i
tcanbecal
cul
ated t
hatt
he
l
i
qui
dit
yper
for
manceoft
hecompanyi
spoor
.

 Thecompanyhasnotmai
ntai
nedcashr
ati
oof0.
5:1ast
her
ati
oPer
cent
ageof
0.
08,0.
058,
0.066,0.
112,
and0.
306.Thecompanyi
snotkeepi
ngsuf
fi
cientcash
andbankbal
ance.

93
  Dodl
adai
rycompanyi
snotv
eryef
fi
cientwi
thi
tsuseofasset
sbecauseoft
he
hi
ghestr
ati
oisi
nthey
ear2015-
2016i
s2.
73andl
owestr
ati
oint
hey
ear2018-
2019i
s2.
14.

SUGGESTI
ONS

 Thecompanyhast
otakest
epst
oimpr
oveNetpr
ofi
t.

 Thecompanyhast
otakest
epst
omai
ntai
nst
andar
dcur
rent
,cashandqui
ck
r
ati
os(
li
qui
drat
ios)t
omeett
hel
i
qui
dit
yobl
i
gat
ions.

 Thecompanyhasal
sot
akenst
epst
omai
ntai
ntot
alasset
s.

 Thecompanyshoul
dconcent
rat
eont
hei
ncr
easet
henetpr
ofi
tbecausei
tis
mai
ntai
ningav
eragepr
ofi
t.

 Thecompanyneedst
omai
ntai
ngoodi
nvent
oryt
urnov
err
ati
obyi
ncr
easi
ngt
he
asset
s.

CONCLUSI
ON

Af
teranal
yzi
ngt
hef
inanci
alst
atement
sofDODLADAI
RYLTD.
,dur
ingt
hel
ast5
f
inanci
aly
ear
s,i
tis cl
eart
hatov
eral
lfi
nanci
alposi
ti
on oft
he company i
s not
sat
isf
act
ory
.Howev
er,t
hemanagementneedst
ofocusmor
eont
hef
inanci
alposi
ti
on
oft
hecompanybyi
mpr
ovi
ng cur
rentasset
smanagement
. TheOv
eral
lsol
vency
posi
ti
onoft
hecompanyi
snotsound.¬¬¬

94
 BI
BILOGRAPHY

TextBooks:

 Fi
nanci
alSt
atement
sofDODLADAI
RYLi
mit
edf
orFYs2015-
16t
o2019-
2020.

 Annual
Financi
alRepor
tsofDODLADAI
RYLi
mit
edwebsi
tewww.
dodl
dai
ry.
com

Websi
tes:

 www.
inv
est
opedi
a.com

 www.
dodl
dai
ry.
com

95
  www.
fi
nance.
com

96