NESTLE CASE STUDY

BY : RAJWINDER PURI MAYANK TALWAR ROHAN KIR PARTHA SARTHI ROUT ANSHUL CHABRA MBA 1st YEAR, SECTION -A

NESTLE INDIA LIMITED ‡ NESTLE INDIA LIMITED PRODUCES A VARIETY OF FOOD PRODUCTS INCLUDING BEVERAGES. SUITABLY MODIFIED FOR USE IN THIS CASE. AND CHOCOLATES. IS PRESENTED BELOW : - . PREPARED DISHES. INFORMATION FOR THE YEAR ENDED DEC 2006 AND FOR THE PREVIOUS YEAR TAKEN FROM THE COMPANY S ANNUAL REPORT.

045 4.917 3.564 8.247 366. Excise Duty Interest Expense Income Tax Expense 2006 964.424.122 1.676 5.M/c etc Investments Inventories Sundry Debtors Cash Other Current Assets Current Liabilities Other Liabilities Sales and Other Revenues Materials Consumed Manufacturing an other Exp.157 2.369 777.722 162.924.654.044.326 3.560 1.280.953 1.274 2005 964.800.270.157 2.ACCOUNTS Share Capital Reserves and surplus Secured Loans Plant.569 763.238 1.530.390.648.676.952.281.859 .408 1.424 3.305 11.577.669.185 557.862 2.198.049 1.654.176 143.594.574.453 1.762.276 2.808 29.366.993 305.272 3.732 2.969 26.063 13.621 9.317 4.965.735.

PROFIT & LOSS ACCOUNT EXPENSES INCURRED ‡ TO MATERIALS CONSUMED ‡ TO MANUFACTURING & OTHER EXPENSES ‡ TO EXCISE DUTY ‡ TO INTEREST EXPENSE ‡ TO INCOME TAX EXPENSE INCOME GENERATED ‡ BY SALES AND OTHER REVENUES .

Nestle India Ltd. Profit & Loss Account for the year ending Dec 2005 & Dec 2006 Particulars 2006 2005 Particulars 2006 2005 To Materials Consumed 13366621 11280564 By Sales 29648063 26676305 To Manufacturing & Others To Excise Duty 9574238 8390049 1281317 1669862 To Gross Profit 5425887 5335830 29648063 26676305 29648063 26676305 .

Particulars To Interest Expense To Income Tax Expense To Net Profit 4408 2006 2122 2005 Particulars By Gross Profit 2006 5425887 2005 5335830 1654274 1594859 3767205 3738849 5425887 5335830 5425887 5335830 .

Nestle India Ltd. Assets 2006 2005 964157 2924722 3767205 162676 3735917 3952808 964157 2577176 3738849 143045 3198326 3654969 5800369 777732 2762185 557569 763560 1270424 3575646 4965953 1044276 2530993 305247 366453 1424272 3639328 15507485 14276522 15507485 14276522 . Balance Sheet for the year ending Dec 2005 & Dec 2006 Liabilties Share Capital Reserves & Surplus Net Profit Secured Loan Current Liabilties Other Liabilities 2006 2005 Assets Plant & Machinery Investments Inventories Sundry Debtors Cash Current Assets Misc.

75 .68 0. Gross Profit Net Profit 29648063 26676305 11.CASE ANALYSIS Particulars 2006 2005 Change (%) Sales Materials Consumed Manufacturing & Other Exp.49 9574238 5425887 3767205 8390049 5335830 3738849 14.11 1.14 13366621 11280564 18.

14 %.Sales grew at a rate of 11. . This can be attributed to the increase in the expenditure on Materials Consumed & Manufacturing and other expenses which grew at a rate of 18.11 % It means that the company is not able to control its Materials costs and other Manufacturing Expenses resulting into much less increase in Net Profit as compared to Sales.75 %. Net Profit grew at a rate of just 0.49 % & 14.

.CASE RESULT The Company has to reduce its cost in order to increase its net profit.