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By:Gaurav Kumar Himani Chandra Siddhant Bhushan

Common Size Statements ` Financial Ratio Analysis


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Financial statement that displays all items as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company. Advantages : The percentage assets of any company can be compared to another company in the industry. The size of the companies being compared, is not important. Analyzing the operational activities of comparing companies can also be obtained. Changes in different values pertaining to company's performance can also be ascertained during a particular period.

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The Balance Sheet and the Statement of Income are essential, but they are only the starting point for successful financial management. Apply to Financial Statements to analyze the success, failure, and progress of business.

Advantages
Simplifies financial statements Facilitates inter-firm comparison Helps in planning Makes inter-firm comparison possible Help in investment decisions

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Based on Previous Records: Financial statements themselves are subject to several limitations. Thus ratios derived, there from, are also subject to those limitations. For example, non-financial changes though important for the business are not relevant by the financial statements. Comparative study required: Ratios are useful in judging the efficiency of the business only when they are compared with past results of the business. However, such a comparison only provide glimpse of the past performance and forecasts for future may not prove correct since several other factors like market conditions, management policies, etc. may affect the future operations. Problems of price level changes: A change in price level can affect the validity of ratios calculated for different time periods. Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To make a better interpretation, a number of ratios have to be calculated which is likely to confuse the analyst than help him in making any good decision. Personal bias: different people may interpret the same ratio in different way. Incomparable: Because of difference in size and accounting procedures etc. Of firms.

Cross Sectional Analysis

Based on Key Financial Ratios


Investment Valuation Ratios Liquidity Ratios Solvency Ratios Profitability Ratios Debt Coverage Ratios Management Efficiency Ratios

Profitability Ratios: Profitability ratios measure the results of business operations or overall performance and effectiveness of the firm. Liquidity Ratios: Liquidity ratios measure the short term solvency of financial position of a firm. These ratios are calculated to comment upon the short term paying capacity of a concern or the firm's ability to meet its current obligations. Debt Coverage Ratios: Convey a firm's ability to meet the interest costs and payment schedules of its long term obligations.

HUL

Dabur
Mar '10

Godrej Consumer Products


Mar '10 Mar '10

Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs)

6.5

4.25

12.82

6.34

8.88

81.45 10.7

33.05 7.14

41.34 25.8

HUL
Mar '10

Dabur
Mar '10

Godrej Consumer Products


Mar '10

Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio

0.84 0.46 ---

0.93 0.68 0.14 0.02

1.3 0.95 0.01 --

HUL
Mar '10

Dabur Godrej Consumer Products


Mar '10 Mar '10

Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Return on Assets Including Revaluations Return on Long Term Funds(%)

15.74 14.59 14.7 12.29 106.78 85.25 11.84 106.78

19.17 17.97 18.06 15.03 61.62 58.04 8.6 68.96

21.47 19.76 20.39 18.87 35.73 29.98 26.85 36.24

HUL
Mar '10

Dabur
Mar '10

r j

su r r ucts
Mar '10

Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Post Tax

395.13 -342.84

52.35 0.14 36.46

216.85 0.01 72.51

HUL
Mar '10

Dabur
Mar '10

Godrej Consumer Products


Mar 10

Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Earning Retention Ratio Earnings Per Share P/E Ratio

8.99 29.24 8.99 5.35 7.66 5.35 21.25 10.09 7.93

11.31 23.62 11.31 4.31 3.44 4.31 51.67 4.99 16.05

7.93 59.25 7.93 4.73 1.53 4.73 40.01 8.05 9.95

HUL Mar '10 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

Dabur India Godrej Consumer Mar '10 Mar '10

0.08 0.08 0.00 0.00 0.92 0.00 1.00 0.00 0.00 0.00 1.00

0.10 0.10 0.00 0.00 0.77 0.00 0.88 0.03 0.10 0.12 1.00

0.04 0.04 0.00 0.00 0.95 0.00 0.99 0.01 0.00 0.01 1.00

HUL Mar '10 Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cas and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Current Liabilities Provisions Total CL & Provisions Net Current Assets Total Assets

Dabur India Mar '10

Godrej Consumer Mar '10

1.39 0.55 0.84 0.11 0.49 0.84 0.26 0.09 1.20 0.41 0. 4 2.25 2.13 0.56 2. 8 -0.43 1.00

0.80 0.28 0.53 0.03 0.41 0.35 0.15 0.0 0.56 0.41 0.13 1.10 0.55 0.51 1.07 0.03 1.00

0.33 0.13 0.20 0.00 0.62 0.20 0.04 0.02 0.26 0.20 0.20 0. 0.42 0.06 0.48 0.18 1.00

HUL Mar '10 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

Dabur India Mar '10

Godrej Consumer Mar '10

103.90 3.90 100.00 1.12 0.11 101.23 50.67 1.38 5.27 1.43 21.03 4.58 0.00 84.36

100.82 0.82 100.00 0.97 0.34 101.31 48.61 1.24 7.41 0.79 19.43 3.62 0.00 81.10

102.15 2.15 100.00 3.37 1.19 104.56 45.73 2.58 9.49 1.60 19.56 0.76 0.00 79.72

HUL Mar '10 Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Preference Dividend Equity Dividend Corporate Dividend Tax 15.74 16.87 0.04 16.83 1.04 0.00 15.79 0.25 16.04 3.65 12.39 0.00 7.98 1.34

Dabur India Mar '10 19.23 20.21 0.46 19.75 1.11 0.20 18.44 -0.01 18.43 3.27 15.11 0.00 6.05 1.03

Godrej Consumer Mar '10 21.47 24.84 0.29 24.56 1.08 0.00 23.48 0.00 23.48 4.00 19.47 0.00 9.88 1.68

Based on Key Financial Ratios


Investment Valuation Ratios Liquidity Ratios Solvency Ratios Profitability Ratios Debt Coverage Ratios Management Efficiency Ratios

Marico
Mar '10

Dabur
Mar '10

P&G
Mar '10

Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) P/E Ratio

0.66

22.5

4.42

6.34

71.16

31.56 5.04 28.23

33.05 7.14 16.05

277.63 154.7 36.31