Lovely faculty of business n arts

Term paper
On
Nestle India limited

SUBMITTED TO, SUBMITTED BY,

MISS. ASHU KAKKAR name- Keshav mishra

Roll no- B48

Reg.no- 11009116
About company
A Nestle India ltd. was established in 1959. And its chairman is Antonio helio waszyk.
And its seceratry is b murli . Nestle india is a subsidiary Of nestle sa of swizerland . With
seven factories and a large number of co-packers. Brands of the company are grouped
under four categories, Milk Products & Nutrition, Prepared Dishes & Cooking Aids,
Beverages and Chocolates & Confectionery. Nestle has been a cohort in India's growth
and has built a very special relationship of trust and commitment with the people of
India. The Company's activities in India have facilitated direct and indirect employment
and afforded livelihood to about one million people together with farmers, suppliers of
packaging materials, services and other goods. Nestle India manufactures products of
truly international quality under internationally famous brand names and in recent
years the company has also introduced products of daily consumption and use such as
aaNESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh 'n' Natural Dahi and NESTLE Jeera
Raita . Nestle India manufactures products of truly international quality under
internationally famous brand names such as NESCAF, MAGGI, MILKYBAR, MILO, KIT KAT,
BAR-ONE, MILKMAID and NESTEA. The company continuously focuses its efforts to better
understand the changing lifestyles of India and anticipate consumer needs in order to
provide Taste, Nutrition, Health and Wellness through its product offerings. The culture of
innovation and renovation within the company and access to the Nestle Group's proprietary
technology/Brands expertise and the extensive centralized Research and Development
facilities gives it a distinct advantage in these efforts. During the year 2007, CNBC Asia
presented the company with the India Innovator of the year award. In the year 2007, Nestle
continued to upgrade its production capacity, new production lines/technology were put up
at the plants in Pantnagar, Moga, Ponda and Nanjangud. As in the same year, CRISIL
assigned Nestle India a credit rating `AAA' with stable outlook and also in the identical year
2007, the company's four factories were awarded the internationally recognised external
certification ISO 14001 for adherence to environmental processes and OSHAS 18001 for
Health and Safety. The Moga Milk district model has been highly appreciated; it was started
with collection of only 511 kgs of milk from 180 farmers, even, now the milk collection is
stood up to 1.2 million liters per day from 1,00,000 farmers prosper. The collection agencies
are 2400 as of 2007; it's a tremendous growth in this sector of the company.

History
. Nestle aspects. Nestle's regular and substantial investments established that it was here to
stay. In 1967, Nestle set up its next factory at Choladi (Tamil Nadu) as a pilot plant to
process the tea grown in the area into soluble tea. The Nanjangud factory (Karnataka)
became operational in the year 1989. In 1990, the company entered into the chocolate
business by introducing Nestle Premium Chocolate. During begin with its first Investment in
Moga in 1961, where the Government wanted Nestle to develop the milk economy.
Progress in Moga required the introduction of Nestle's Agricultural Services to educate,
advise and help the farmer in a variety of the period of 1991, the company entered in JV
floated by the parent in collaboration with BM Khaitan group to set up facilities to
manufacturing a range of Soya based products. The Samalkha factory (Haryana) was started
its operation in 1993. Kitkat, the company's worldwide legendary brand chocolate was
launched in the year 1995. Nestle commissioned two factories in Goa at Ponda and Bicholim
in the year 1995 and 1997 respectively. Nestle Growing Up Milk was launched nationally in
the year 1999.  In April 2000, the company forayed into the Ultra Heat Treated (UHT) liquid
milk market. Launched Nestle Pure Life bottled water in the year 2001 by the company,
within few months, again launched its second water brand-San Pellegrino-- in the Indian
market. The company also made its foray into the iced tea segment. Iced tea has already
been soft-launched in Mumbai in two flavours, one being peach. The company commenced
participation in this global Nestle initiative in the year 2003 to create and adapt common
business process, permitting adoption of best practices, standardization of internal and
external master data and standardization of the information systems infrastructure. During
the year 2004, a project has been initiated to upgrade the production technology for infant
nutrition products at the Samalkha factory. Nestle India Ltd recognised for its outstanding
performance in Exports by the Coffee Board of India in the Export Awards 2004-05 as the
Best Exporter of Instant Coffee, Best Exporter to Russia & CIS Countries (coffee) and Best
Exporter for Far East Countries (coffee). The company bestowed the UDYOG RATNA award
by the PHD Chamber of Commerce and Industry to recognise Nestle's significant
contribution to the economic development of Punjab for the year 2005. A new department
-the Channel & Category Sales Development (CCSD) was set up to develop new solutions for
the various channels and customers and improve the implementation of commercial plans
in the market.
The factory in Moga was also conferred the Punjab Government's award for `Environmental
Excellence'. Again recognised for its outstanding performance in Exports by the Coffee
Board of India in the Export Awards 2005-06 as the Second Highest Exporter of Instant
Coffee and Second Highest Exporter of Coffee to the Far East countries. The Company has
received the highest coffee exporter awards from the Coffee Board of India for many years.
It is also an honour for the company that in a survey conducted by A.C.Nielsen for CNBC,
consumers voted NESCAFE as the most preferred coffee brand of the nation during 2005-06.
Nestle India has commissioned its 7th factory at Pant Nagar in Uttarakhand during the
period 2006 for the purpose of manufacture culinary products with cost of around Rs.100
crore.

Nestle plans R&D centre in india-

On sept.22 Fmcg major nestle on Wednesday announced that it would invest
rs. 230 crore to set up it first research and development centre in india .the
r&d centre will come up at maneswar and is expected to be operational by
July 2012. Mr. Klaus zimmermann head of nestle r&d centre in indiawould be
used for facilitating innovation in a wide variety of foods including culinary ,
cerals ,beverages and dairy products . “nestle india need and deserve an r&d
centre .we will focus on developing popularity positioned products . india will
be the worldwide centre for developing products which make nutrition
affordable”he added.
The centre would be built an area of 200000sq ft and house 40 scientist and
engineer initially .
Nestle new strategy in India has been to develop more indigenous product
for the domestic market. Mr. Antonio halio waszyk chairman and managing
director nestle India added that product like munch and ultra magi would be
export from india soon.
Our continous access to nestle global r&d has significantly contributed to our
performance
And nestle decision to establishan r&d centre in India will be an additional
competitive advantage in the future . it will help us to accelerate the
company growth rate and contribution towards reducing nutritional
deficiencies in India

General directors of the nestle India ltd.

Director (Finance & Control) Shobinder Duggal 1,33,67,000.00
Director Pradip Baijal 5,90,000.00
Director Micheel W O Garrett 4,10,000.00
Director Ravinder Narain 6,10,000.00
Alternate Director Richard Sykes -
Senior Vice President & CS B Murli -
Antonio Helio
Chairman & Managing Director Waszyk 1,25,91,000.00
Director Rakesh Mohan -
Non Executive Director Swati A Piramal -
Director (Technical) Christian Schmid -

Company >> Finance >> Balance Sheet

Nestle India Ltd

Industry :Food And Dairy Products – Multinational

(Rs in Crs)
   Year Dec 09  Dec 08 
  SOURCES OF FUNDS :
 Share Capital 96.42 96.42
  Reserves Total 484.85 376.93
  Equity Share Warrants 0 0
  Total Shareholders Funds 581.27 473.35
  Current Liabilities 587.59 507.46
 Provisions 834.79 677.32
   Total Current Liabilities 1,422.38 1,184.78
   Equity Application Money 0 0
  Secured Loans 0 0
 Unsecured Loans 0 0
   Total Debt 0 0
  Total Liabilities 2,003.65 1,658.13
   APPLICATION OF FUNDS :
  Gross Block 1,640.79 1,404.84
 Less : Accumulated Depreciation 744.59 651.54
   Less:Impairment of Assets 0 0.31
 Net Block 896.2 752.99
   Lease Adjustment 0 0
 Capital Work in Progress 79.63 109.17
  Investments 203.26 34.9
  Current Assets, Loans & Advances
 Inventories 498.74 434.91
  Sundry Debtors 64.19 45.59
 Cash and Bank 155.58 193.69
  Loans and Advances 138.05 123.76
  Total Current Assets 856.56 797.95
  Net Current Assets -565.82 -386.83
  Miscellaneous Expenses not written off 0 0
  Deferred Tax Assets 46.8 38.91
   Deferred Tax Liability 78.8 75.79
  Net Deferred Tax -32 -36.88
   Total Assets 2003.65 1658.13
 Contingent Liabilities 0 0

Company >> Finance >> Profit & Loss

Nestle India Ltd

Industry :Food And Dairy Products – Multinational

(Rs in Crs)
    Year Dec 09(12)  Dec 08(12) 
  INCOME :
 Sales Turnover 5,222.42 4,471.06
   Excise Duty 90.68 143.39
  Net Sales 5,131.74 4,327.67
  Other Income 37.8 33.89
 Stock Adjustments 6.29 31.12
   Total Income 5,175.83 4,392.68
  EXPENDITURE :
 Raw Materials 2,073.25 1,785.51
  Power & Fuel Cost 158.87 159.76
 Employee Cost 432.39 306.92
  Other Manufacturing Expenses 524.8 476.36
 Selling and Administration Expenses 868.96 723.32
  Miscellaneous Expenses 87.91 73.99
 Less: Pre-operative Expenses Capitalised 0 0
   Total Expenditure 4,146.18 3,525.86
  Operating Profit 1,029.65 866.82
  Interest 1.4 1.64
  Gross Profit 1,028.25 865.18
  Depreciation 111.27 92.36
  Profit Before Tax 916.98 772.82
  Tax 265.34 222.31
 Fringe Benefit tax 1.52 8.25
  Deferred Tax -4.88 8.18
  Reported Net Profit 655 534.08
  Extraordinary Items -2.17 -1.91
  Adjusted Net Profit 657.17 535.99
  Adjst. below Net Profit 0 0
  P & L Balance brought forward 100.11 12.52
  Statutory Appropriations 0 0
 Appropriations 612.59 446.49
   P & L Balance carried down 142.52 100.11
  Dividend 467.62 409.77
   Preference Dividend 0 0
  Equity Dividend % 485 425
   Earnings Per Share-Unit Curr 59.69 48.17
  Earnings Per Share(Adj)-Unit Curr
   Book Value-Unit Curr 60.29 49.09

common size balance sheet

Nestle India Ltd
Industry :Food And Dairy Products –
Multinational
(Rs in
Crs)
%change200
   Year Dec 09  Dec 08  9 %change2008
  SOURCES OF FUNDS :
 Share Capital 96.42 96.42 4.812218 5.814984
  Reserves Total 484.85 376.93 24.19834 22.73223
  Equity Share Warrants 0 0 0 0
   Equity Application Money 0 0 0 0
  Total Shareholders Funds 581.27 473.35 29.01056 28.54722
  Secured Loans 0 0 0 0
  Current Liabilities 587.59 507.46 29.32598 30.60436
 Provisions 834.79 677.32 41.66346 40.84843
   Total Current Liabilities 1,422.38 1,184.78 70.98944 71.45278
 Unsecured Loans 0 0 0 0
   Total Debt 0 0 0 0
  Total Liabilities 2,003.65 1,658.13 100 100
   APPLICATION OF FUNDS : 0 0
  Gross Block 1,640.79 1,404.84 81.89005 84.72436
 Less : Accumulated Depreciation 744.59 651.54 37.16168 39.29366
   Less:Impairment of Assets 0 0.31 0 0.018696
 Net Block 896.2 752.99 44.72837 45.412
   Lease Adjustment 0 0 0 0
 Capital Work in Progress 79.63 109.17 3.974247 6.583923
  Investments 203.26 34.9 10.14449 2.104781
  Current Assets, Loans & Advances 0 0
 Inventories 498.74 434.91 24.89157 26.22894
  Sundry Debtors 64.19 45.59 3.203653 2.749483
 Cash and Bank 155.58 193.69 7.764829 11.68123
  Loans and Advances 138.05 123.76 6.889926 7.46383
  Total Current Assets 856.56 797.95 42.74998 48.12349
  Miscellaneous Expenses not written off 0 0 0 0
  Deferred Tax Assets 46.8 38.91 2.335737 2.346619
   Deferred Tax Liability 78.8 75.79 3.932823 4.570812
  Net Deferred Tax -32 -36.88 -1.59709 -2.22419
   Total Assets 2003.65 1658.13 100 100

Interpretation of common size

 COMPANY TOTAL SHARHOLDER FUNDS ARE INCREASING COMPARE TO 2008 its

shareholder fund in 2008 28.54 and 2009 29.01 .
  Company total liabilities are increasing compare to previous year.

 Company fixed assets are increaing compare to previous year.

 Company invetment are increasing it means has purchased more investment.

 Company debtors are increasing it means company has increased it sales .

 Company net sales are increasing so company has increased it stock.

 Company operating profit is increasin it means company has decreaed its cost of
production.

 Company gross profit is increasing 19.99 and its grosss profit is in 2009 20.04

It means company has decresed its cost of production.

 Company net profit is increasing because company has increased its sales .

common size income statement

Nestle India Ltd
Industry :Food And Dairy Products –
Multinational
(Rs in
Crs)
Dec Dec %change
   Year 09(12)  08(12)  %change2009 2008
  INCOME :
 Sales Turnover 5,222.42 4,471.06 101.77 103.31
   Excise Duty 90.68 143.39 1.77 3.31
  Net Sales 5,131.74 4,327.67 100.00 100.00
  Other Income 37.8 33.89 0.74 0.78
 Stock Adjustments 6.29 31.12 0.12 0.72
4,392.6
   Total Income 5,175.83 8 100.86 101.50
  EXPENDITURE : 0.00 0.00
 Raw Materials 2,073.25 1,785.51 40.40 41.26
  Power & Fuel Cost 158.87 159.76 3.10 3.69
 Employee Cost 432.39 306.92 8.43 7.09
  Other Manufacturing Expenses 524.8 476.36 10.23 11.01
 Selling and Administration Expenses 868.96 723.32 16.93 16.71
  Miscellaneous Expenses 87.91 73.99 1.71 1.71
 Less: Pre-operative Expenses Capitalised 0 0 0.00 0.00
   Total Expenditure 4,146.18 3,525.86 80.79 81.47
  Operating Profit 1,029.65 866.82 20.06 20.03
  Interest 1.4 1.64 0.03 0.04
  Gross Profit 1,028.25 865.18 20.04 19.99
  Depreciation 111.27 92.36 2.17 2.13
  Profit Before Tax 916.98 772.82 17.87 17.86
  Tax 265.34 222.31 5.17 5.14
 Fringe Benefit tax 1.52 8.25 0.03 0.19
  Deferred Tax -4.88 8.18 -0.10 0.19
  Reported Net Profit 655 534.08 12.76 12.34
  Extraordinary Items -2.17 -1.91 -0.04 -0.04
  Adjusted Net Profit 657.17 535.99 12.81 12.39
  Adjst. below Net Profit 0 0 0.00 0.00
comparative balance sheet

Industry :Food And Dairy Products –

Multinational
(Rs in
Crs)
inc/dec in inc/dec
   Year Dec 09  Dec 08  amt. in%
  SOURCES OF FUNDS :
 Share Capital 96.42 96.42 0 0
  Reserves Total 484.85 376.93 107.92 28.63131
  Equity Share Warrants 0 0 0
   Equity Application Money 0 0 0
  Total Shareholders Funds 581.27 473.35 107.92 22.7992
  Secured Loans 0 0 0
 Unsecured Loans 0 0 0
  Current Liabilities 587.59 507.46 80.13 15.79041
 Provisions 834.79 677.32 157.47 23.24898
   Total Current Liabilities 1,422.38 1,184.78 237.6 20.05436
   Total Debt 0 0 0
  Total Liabilities 2,003.65 1,658.13 345.52 20.83793
   APPLICATION OF FUNDS : 0
  Gross Block 1,640.79 1,404.84 235.95 16.79551
 Less : Accumulated Depreciation 744.59 651.54 93.05 14.28155
   Less:Impairment of Assets 0 0.31 -0.31 -100
 Net Block 896.2 752.99 143.21 19.01884
   Lease Adjustment 0 0 0
 Capital Work in Progress 79.63 109.17 -29.54 -27.0587
  Investments 203.26 34.9 168.36 482.4069
  Current Assets, Loans & Advances 0
 Inventories 498.74 434.91 63.83 14.6766
  Sundry Debtors 64.19 45.59 18.6 40.79842
 Cash and Bank 155.58 193.69 -38.11 -19.6758
  Loans and Advances 138.05 123.76 14.29 11.54654
  Total Current Assets 856.56 797.95 58.61 7.345072
  Miscellaneous Expenses not written off 0 0 0
  Deferred Tax Assets 46.8 38.91 7.89 20.27756
   Deferred Tax Liability 78.8 75.79 3.01 3.9715
  Net Deferred Tax -32 -36.88 4.88 -13.2321
   Total Assets 2003.65 1658.13 345.52 20.83793

0 0
Interpretation of comparative balance sheet

 Current assets are increasing 58.61(7.31%) except cash and bank are decreasing,

All current assets are increasing. Debotors are increasing by 40.79%. it means
company can pay its short term liabilties easily.
  Current liabilities are increasing by 237.6 but in % is 20.06 . company current
liabilties are increasing compare to 2008 so company should try to reduce its current
liabilities . its not satisfactory .

 Fixed assets are increasing by 143.21which is 19.01 % it means company has

increased it fixed assets so company can pay it long term liabilities .

 Company share capital is not increasing compare to previous year company has not
issued new share capital to increase its share capital. But company has increased its
reserve fund by 107.92(28.63%) it means company are increasing its reserve n
surplus fund for future contingency.

 Total assets are increasing % is 20.83 so company has in creased it capital by

345.52. so company can use it to pay its liabilities.

 Company investment are increasing it means company has increased its investment
by 168.36.and company cash are decreasing it means company used its cash to
purchase the new investment or pay short term liabilities.

 Company stock are increasing and company sales are also incresing .it means
company are incresing its stock for the sales and company debtors are also incresing
due to increase in sales of company.

comparative income
statement

Nestle India Ltd

Industr
y :Food And Dairy Products –
Multinational
(Rs in Crs)
Dec Dec inc/dec in inc/de
   Year 09(12)  08(12)  amt c in %
  INCOME :
5,222.4 4,471.0
 Sales Turnover 2 6 751.36 16.80
   Excise Duty 90.68 143.39 -52.71 -36.76
5,131.7 4,327.6
  Net Sales 4 7 804.07 18.58
  Other Income 37.8 33.89 3.91 11.54
 Stock Adjustments 6.29 31.12 -24.83 -79.79
5,175.8 4,392.6
   Total Income 3 8 783.15 17.83
  EXPENDITURE : 0.00
2,073.2 1,785.5
 Raw Materials 5 1 287.74 16.12
 P
ower & Fuel Cost 158.87 159.76 -0.89 -0.56
 Employee Cost 432.39 306.92 125.47 40.88
  Other Manufacturing Expenses 524.8 476.36 48.44 10.17
 Selling and Administration
Expenses 868.96 723.32 145.64 20.13
  Miscellaneous Expenses 87.91 73.99 13.92 18.81
 Less: Pre-operative Expenses
Capitalised 0 0 0.00
4,146.1 3,525.8
   Total Expenditure 8 6 620.32 17.59
1,029.6
  Operating Profit 5 866.82 162.83 18.78
  Interest 1.4 1.64 -0.24 -14.63
1,028.2
  Gross Profit 5 865.18 163.07 18.85
  Depreciation 111.27 92.36 18.91 20.47
  Profit Before Tax 916.98 772.82 144.16 18.65
  Tax 265.34 222.31 43.03 19.36
 Fringe Benefit tax 1.52 8.25 -6.73 -81.58
-
  Deferred Tax -4.88 8.18 -13.06 159.66
  Reported Net Profit 655 534.08 120.92 22.64
  Extraordinary Items
-2.17 -1.91 -0.26 13.61
  Adjusted Net Profit 657.17 535.99 121.18 22.61
  Adjst. below Net Profit 0 0 0.00
 P & L Balance brought forward 100.11 12.52 87.59 699.60
Interpretation of comparative income statement

 Company sales are incresing so company has incresed its stock.

 Company income are increasing because company has decreased it expenditure

compare to 2008. Because of decrease in expenidure company income are
increasing.

 Company gross profit are increasing . it means company has decreased its cost of
production. Because of decrease in cost of production company gross profit are
increasing.

 Company net profit are increasing due to increase in sales

 TREND ANALYSIS
2009 2008 2008 2009
net sales 5,131.74 4,327.67 100 118.5797
total income 5,175.83 4,392.68 100 117.8285
operating profit 1,029.65 866.82 100 118.7848
total expenditure 4,146.18 3,525.86 100 117.5934
gross profit 1,028.25 865.18 100 118.8481
profit before tax 916.98 772.82 100 118.6538
net profit 655 534.08 100 122.6408
total shareholder fund 581.27 473.35 100 122.7992
total current liabilities 1,422.38 1,184.78 100 120.0544
net block 896.2 752.99 100 119.0188
Investment 203.26 34.9 100 582.4069
total current assets 856.56 797.95 100 107.3451
100 114.67
Inventories 498.74 434.91

Interpretation of trend analysis-

 Net sales are increasing compare to 2008 but stock is also increasing
By 14.67 it means company has increased its sales and stock.
 Total shareholder fund are increasing compare to 2008 by 22.64 . it means
company assets are increasing and liabilties are decreasing . because of increase in
assets company shareholder fund are increasing .
 Company net profit is increasing compare to 2008 . its profit is increasing by 121%
because company sales are increasing due to increase in sales company profits are
also increasing.
 Company total income are increasing due to increase in sales but company total
expenditure are also incresing compare to base year.
 Company gross profit are increasing compare to 2008. Because company cost of
good sold are decreasing .
 Company current assests are incresing and current liabilties are also increasing it
means company has increased it current assets but company current liabiltes are
also increasing so company should decrese it current liabilities.
 Company stock are increasing compare to 2008 it means company has increased it
inventory and company sales are also increasing due to increase in sales company
has increased it inventory.
 Company fixed assets are also increasing it measn company can easily pay its long
term liabilties.
RATIO ANALYSIS

LIQUIDITY RATIO 2009 2008

CURRENT RATIO 0.602202 0.673501

QUICK RATIO 0.15451 0.201962

ABSOLUT LIQUID 0.10938 0.163482

Interpretation of ratio-
LEVERAGE
RATIO current ratio=current asset/currenliabilities

 The rule
PROPRIETORY of thumb 29.01056
RATIO for current ratio is 2:1 it means that current liabilties should be half of
28.54722
Current asset .but here the
FIXED ASSETS TO NET current ratio in 2009 is .60 and
1.541796 1.590768 2008 is .67 it means
WORTH Company current asets is .60 times
to current liabilties which is not
satisfactory for the company.
ACTIVITY RATIO OR According to creditors high current
EFFICIENCY RATIO ratio is good for them but according
to shareholders high ratio is not
INVENTORY TURNOVER 8.23 7.961394 good for them.
RATIO

DEBTORS TURNOVER Quick ratio=current assets-stock-

RATIO 13.98294 94.92586 prepaid expense/current liabilities

 The rule of thumb for quick ratio is 1:1

DEBTORS COLLECTION
it means quick assets should be equal
PERIOD 26.10873 3.845343 to quick liabilties. but here the quick
ratio is .15 in 2009 and 2008 .20 which
is very less . it means quick assets is .
15 and .20 times of liabilties which is
PROFITABILITY RATIO not satisfactory and company will not
be able to pay its short term liabilties.
GROSS PROFIT RATIO 20.03706 19.99182

NET PROFIT RATIO 12.7637 12.34105

absolute liquid
OPERATING PROFIT
ratio=cash+marketable
RATIO
securities/current liabilitie
20.06434 20.02972

RETURN ON INV. 112.6843 112.8298

RETURN ON EQUITY 679.3196 553.91

 It shows relation between absolute liquid assets between liquid liabilities this ratio
shows company company quick payment financial value.the rule of thumb for
absolute liquid ratio is .50:1 .it means quick assets should be half of current
liabilities but here the ratio is .10 and .16 which is very less it means company
liquidity position is not satisfactory.

proprietry ratio=shareholders funds/total assets*100

 It shows relation between shareholder fund and total assets how much
total assets have been financed from shareholder fund . from this ratio
creditors can come to know debt % of company . if this ratio is high then
it will be good for creditors they will be more sacure.but here the ratio is
in 2009 29% and in 2008 28% which is not satisfactory it means
company has financed it assets from outside liabilities.
fixed asset to net worth =fixed asset after depreciation/net worth

 How many fixed assets which we have financed from shareholder

fund .here the ratio is 1.54 and 1.59 which is good for the compay

inventory turnover ratio=cost of goods sold/average inventory

 Inventory turnover ratio shows relation between stock and sales if company stock
ratio is lhigh and company sales are high then company position is good .
High stock ratio is good for company. Here the stock ratio is 8.23 and 7.96 times it
means the stock of the cash are converted into year which is good for the firm.

debtors turn over ratio=net credit sales/average debtor

 It is also called receivables turnover ratio. It shows relation between

sales receivables thatwe are able to receive our amount from debtors
very quicklu or not. Here the ratio is 13.98 and 94.92 it means in 2009
company is able to receive its money very quickly but in 2008 its not
able to receive its money quickly.

Debtors collection period=365/debtors turnover ratio

 This ratio shows in how many days we are able to receive it money from
debtors.Here the ratio is 26 days and 3 days it means that in 2009 company able to
receive its money in 26 days and 2008 is 3 days .
 Gross profit ratio= gross profit /sales *100
 In this ratio high ratio is good but here the ratio is 20.04% and 19.99% which is not
satisfactorybecause the portion of profit in net sales is only 20.04 and 19.99% it
means that the firm is not earning much profit from its sales. So company should
should try to increase its profit and reduce their cost of production.

Net profit ratio=net profit / sales*100

 high ratio is better and it measures ralation between net profit and net sales but here the
ratio is 12.76 and 12.34 which is very less and it is not satisfactory for the company so
company should reduce their cost of production to increase their profit.

Operating ratio=cost of sales +operating exp./sales*100

 this ratio shows relation between total operating exp. and net sales
high ratio is not good for company because high ratio shows high
operating exp.here the ratio is 20.06 and 20.02 which is good for
company.

Return on investment= return on investment=net profit after interest

and taxes/shareholders fund*100

 this ratio developes the relation between the profit and investment and high ratio
is considered good but here the ratio is 122.68 and 112.84 it means company
Profit is good and satisfactory.

return on equity capital=net profit after tax-preference dividend/equity

share capital*100

 it shows relation between net profit and equity capital here the ratio is

679 and 553 which is satisfactory for company.

schedule of changes in working capital

CURRENT ASSETS 2008 2009 INCREASE DECREASE

 Inventories 498.74 434.91 63.83
  Sundry Debtors 64.19 45.59 18.6
 Cash and Bank 155.58 193.69 38.11
  Loans and Advances 138.05 123.76 14.29

  Total Current Assets 856.56 797.95

CURRENT LIABILITIES
  Current Liabilities 587.59 507.46 80.13
 Provisions 834.79 677.32 157.47

1,184.7
   Total Current Liabilities 1,422.38 8

WORKING CAPITAL -565.82 -386.83

NET INCREASE IN WORKING CAPITAL 178.99
275.71 275.71

fund from operations

net profit for the year ended 655
add- non operating exp.
Depreciation 111.27
Dividend 467.62
transfer to general reserve 107.92
provison for taxation 834.79
1521.6
fund from operation 2176.6

fund flow statement

sources of funds
fund from operations 2176.6
decrease in capital work in progress 29.54

2206.14

application of funds
increase in working cap. 178.99
purchase of fixed assets 143.21
payment of tax 1247.96
payment of dividend 467.62
purchase of investment 168.36

2206.14
cash flow
cash flow from operating
activity 2009

profit paid during the year 655

add-non operating exp.
transfer to general res. 107.92
depreciation 111.27
Interest 1.4
Tax 265.34
net profit after adjustment before
working capital changes 1140.93

adjustment for changes

add-
current liabilities 80.13
provision 157.47

less-
increase in inventory 63.83
Debtors 18.6
loan n advances 14.29

1347.5
net cash flow from operating activity 9

cash flow from investing activity

less-
purchase of fixed assets -143.21
increase in investment -1710.69

net cash flow from investing activity -1853.9

cash flow from financing activity

issue of share 0
dividend paid 467.62
net cash flow from financing activity 467.62
net cash flow -38.69
op. bal. of cash 193.69
closing bal. of cash 155.58

cost sheet

1,785.5
direct material 2,073.25 1