Financial Statement Analysis (FM03)

DABUR INDIA LIMITED

Submitted in Partial Fulfillment for the Award of the Degree of MBA 2019-
2021

Submitted By: Santosh kumar

University PRN: 1928100049

BHARATI VIDYAPEETH DEEMED TO BE UNIVERSITY,

PUNE SCHOOL OF DISTANCE EDUCATION, PUNE
Academic Study Center - BVIMR, New
Delhi an ISO 9001:2008 Certified Institute
Page no. 01
 NAAC Accredited Grade “A” University

Format of Student Undertaking Certificate of Originality

I Santosh kumar, Course-MBA and Semester - III would like to declare that the
Project report entitled "DABUR INDIA LTD.” Submitted to Bharatiya
Vidyapeeth University Pune, School of Distance Education Pune, Academic Study Centre
BVIMR New Delhi in partial fulfillment of the requirement for the award of the degree.

It is an original work carried out by me under the guidance of _

All respected guides, faculty member and other sources have been properly
acknowledged and the report contains no plagiarism.

To the best of my knowledge and belief the matter embodied in this project is a genuine
work done by me and it has been neither submitted for assessment to the University nor
to any other University for the fulfillment of the requirement of the course of study.

MR. SANTOSH KUMAR

Student Name with Signature

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 ACKNOWLEDGMENT

Project report inculcates applied elementary creative thinking/working. It gives us immense

pleasure to prepare this study on “DABUR INDIA LTD.”.This learning has many contours and
impacts. This learning has many contours and impacts. I wish to express my deepest gratitude for
all those people who made this project possible. I am indebted to BVUSDE honourable Director
Mr. A. R. Deshmukh without whom co-operation the project would have not been possible. Also
I would like to express my profound sense of gratitude to the project guide Ms. Surinder Kaur
Walia for guiding me as well as providing me the support to conduct this project.
Last but not the least, I take this opportunity to thank all the library members of BVIMR, New
Delhi, respondents, friends, and my parents without their concern and cooperation this project
would have not been possible.

NAME OF THE STUDENT:

Santosh kumar

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 Table of Contents

S. No. Topics. Page. No.

● Chapter 1 : Introduction to the topic. 06

Related To Subject,
Objective and Vision of Project
Limitations of the Project, Literature Review

 Chapter 2 : Financial Data Analysis

Financial Ration Analysis
Swot Analysis 13

● Chapter 3 : Findings & Analysis. 28

● Chapter 4 : Conclusions 32
● Chapter 5 : Limitation 35
● Chapter 6 : Recommendation /Suggestions 36

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● Executive Summary

1. Objectives

 The objective of this project is to analyze the financial statement of DABUR

INDIA LIMITED for the F.Y years (2018-2019) and find out whether there was
shareholders wealth maximization. Here the balance sheet and profit and loss
account of the firm has been analyzed by computing various financial ratios,
working capital, break-even analysis and the investment decision .So the study
has been conducted in One phase.

 The Second objectives of project that, how dabur use our fund, how manage their
working capital, for sustain growth in market.

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1. INTRODUCTION

 Financial management is that management activity which is concerned with the

planning and controlling of the firm’s financial resources. Finance is the lifeblood
of business. Wealth maximization is the objective of financial management in the
new era. Other objective of financial management is to arrange sufficient finances
for meeting short-term and long-term needs, these funds are procured at minimum
cost and so that profitability of the business is maximized.

 The functional areas covered by financial management are:

1. Determining financial needs

2. Selecting the sources of funds
3. Financial analysis and interpretation.
4. Cost-volume profit analysis.
5. Capital budgeting.
6. Working capital management
7. Profit planning and control, and
8. Dividend policy.

 In addition to raising funds, financial management is directly concerned with

production, marketing and other functions within an organization whenever
decisions are made about the acquisition or distribution of assets.

 Presence in overall worldwide market

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  LIMITATION OF THE PROJECT

 Alt hough it has been my endeavor to take all necessary precautions to ensure
that the in fo r ma t io n g at her ed is a ut he nt ic a nd ma x i m u m fa c t s ar e
p r e s e nt ed but I fa c e d c er t a in constraints while doing so. The constraints and
limitations faced are as mentioned below:

1. Time:

 The nature of the report required detailed and meticulous information gathering. In this
sense time was a limiting factor and a major constraint to accomplish the given task. Also
sometimes the information was not available on time. This caused a lot of pilferage of
time unnecessary of duplication of effort.

2. Human error:

 The feedback provided by the company executives, consumers and others

 approached has been assumed to be correct. But there might have been wrong and biased
facts given. The opinion of few cannot be generalized in any manner.

3. Non cooperation:

 While by and large the people approached were helpful some people were non-
cooperative. Also a lot of information was withheld due to its sensitive nature.

4. Calculation error:

 The report required calculation of figures and at last have to analysis them also, so
mistake can be arises during calculations.

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  About Dabur India Limited

 Dabur India Limited is a leading Indian consumer goods company with interests
in health care, Personal care and foods. Over more than 100 years we have been
dedicated to providing nature-based solutions for a healthy and holistic lifestyle.
The original logo of the company was the Banyan Tree.

 The new Dabur identity modernizes the 100-year old equity of the Dabur brand by
subtly transforming the tree. While it retains the essence of the banyan tree, it now
projects a contemporary image, in consonance with today's lifestyle. The tree, a
symbol of nature, is indelibly regarded as a provider of shelter, food and
protection. If you observe closely, you will see that the tree trunk mirrors the form
for three people with their arms raised conveying exultation in achievement. The
broad trunk represents stability and its multiple branches represent growth.

Dabur At-a-Glanc

 Dabur India Limited has marked its presence with significant achievements and
today commands a market leadership status. Our story of success is based on
dedication to nature, corporate and process hygiene, dynamic leadership and
commitment to our partners and stakeholders. The results of our policies and
initiatives speak for themselves.

1. Leading consumer goods company in India with a turnover of Rs. 2834.11

Crore (FY09)

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2. 3 major strategic business units (SBU) - Consumer Care
Division (CCD), Consumer Health Division (CHD) and International
Business Division (IBD)
3. 3 Subsidiary Group companies - Dabur International, Fem Care
Pharma and newu and 8 step down subsidiaries: Dabur Nepal Pvt
Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian Consumer Care
(Bangladesh), Asian Consumer Care (Pakistan), African Consumer
Care (Nigeria), Naturelle LLC (Ras Al Khaimah-UAE), Weikfield
International (UAE) and Jaquline Inc. (USA).

4. Wide and deep market penetration with 50 C&F agents, more than 5000
distributors and over2.8 million retail outlets all over India

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 Dabur India Ltd. - Corporate Profile

 Dabur India Ltd is one of India’s leading FMCG Companies with Revenues of
US$1 Billion (over Rs 5,000 Crore) & Market Capitalisation of US$4 Billion (Rs
20,000 Crore). Building on a legacy of quality and experience of over 127
years, Dabur is today India’s most trusted name and the world’s largest
Ayurvedic and Natural Health Care Company.

 Dabur India is also a world leader in Ayurveda with a portfolio of over 250
Herbal/Ayurvedic products. Dabur's FMCG portfolio today includes five flagship
brands with distinct brand identities -- Dabur as the master brand for natural
healthcare products, Vatika for premium personal care,Hajmola for
digestives, Réal for fruit juices and beverages and Fem for fairness bleaches and
skin care products.

 Dabur today operates in key consumer products categories like Hair Care, Oral
Care, Health Care, Skin Care, Home Care and Foods. The company has a
wide distribution network, covering over 2.8 million retail outlets with a high
penetration in both urban and rural markets.

 Dabur's products also have a huge presence in the overseas markets and are
today available in over 60 countries across the globe. Its brands are highly
popular in the Middle East, SAARC countries, Africa, US, Europe and
Russia. Dabur's overseas revenue today accounts for over 30% of the total
turnover..

 The 125-year-old company, promoted by the Barman family, had started

operations in 1884 as an Ayurvedic medicines company. From its humble

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beginnings in the by lanes of Calcutta, Dabur India Ltd has come a long way
today to become one of the biggest Indian-owned consumer goods companies
with the largest herbal and natural product portfolio in the world. Overall, Dabur
has successfully transformed itself from being a family-run business to
become a professionally managed enterprise. What sets Dabur apart from the
crowd is its ability to change ahead of others and to always set new standards in
corporate governance & innovation.

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 WORKING CAPITAL AND COST MANAGEMENT:

 After running as a family business for over 100 years, when in late 1990s, the
management of the Dabur was handed over to a team of professional managers,
the new management faced a gigantic task of improving performance in several
critical areas. In particular, working capital and cost management required urgent
attention as the company's performance in these areas had been far from
satisfactory. The then prevailing current ratio of 3:2 and quick ratio of 2:4 were
considered too high and indicative of heavy unnecessary investments in working
capital that would have a negative effect on company's profitability.

 Efforts to improve the working capital efficiency were met with stiff resistance
from various quarters, but finally yielded results. The case study discusses the
measures taken to improve the working capital and cost management
performance, and how with concerted efforts the management turned around a
highly inefficient working capital management into one of the most efficient in
the FMCG sector of the Indian industry.

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 Financial Analysis

 Financial analysis is the process of identifying the financial strengths and

weaknesses of the firm by properly establishing relationship between the items of
the balance sheet and the profit and loss account. The nature of the analysis differ
depending on the purpose of the analyst.

 Trade creditors are interested in firm’s ability to meet their claims over a very
short period of time .They are interested in evaluating the firms' liquidity
position.

 Suppliers of the long term debt are concerned with the firm’s long term solvency
and survival. They analyze the firm’s profitability over time, its ability to
generate cash to be able to pay interest and repay principal and relationship
between various sources of fund. The firm’s future profitability and the solvency
are the prime concern.

 Investors are more concerned about the firm’s earnings.

 Management of the firm is interested in every aspect of the financial analysis.
They see that the resources of the firm are most effectively and efficiently utilized
and that the firm’s financial condition is sound.

 Dabur India Limited (Dabur) is a consumer care and health care products
company. Product portfolio offered by the company includes personal care
products, health care products, home care products and foods. Dabur also offers
ayurveda-based healthcare products. It markets its products in India as well as in
International markets as Middle East, South-East Asia, Africa, the European
Union and America.

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 DABUR INCOME STATEMENT 2018-19
No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 77,219 85,150 10.3%
Other income Rs m 3,052 2,962 -3.0%
Total Revenues Rs m 80,270 88,112 9.8%
Gross profit Rs m 16,177 17,405 7.6%
Depreciation Rs m 1,622 1,769 9.1%
Interest Rs m 531 596 12.3%
Profit before tax Rs m 17,076 18,002 5.4%
Tax Rs m 3,354 2,786 -16.9%
Profit after tax Rs m 13,577 14,463 6.5%
Gross profit margin % 20.9 20.4
Effective tax rate % 19.6 15.5
Net profit margin % 16.9 16.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster

 Operating income during the year rose 10.3% on a year-on-year (YoY) basis.
 The company's operating profit increased by 7.6% YoY during the fiscal. Operating
profit margins witnessed a fall and stood at 20.4% in FY19 as against 20.9% in FY18.
 Depreciation charges increased by 9.1% and finance costs increased by 12.3% YoY,
respectively.
 Other income declined by 3.0% YoY.
 Net profit for the year grew by 6.5% YoY.
 Net profit margins during the year declined from 16.9% in FY18 to 16.4% in FY19.

Page no. 14
 DABUR Balance Sheet as on March 2019
No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 57,065 56,317 -1.3

Current Liabilities Rs m 24,344 26,603 9.3

Long-term Debt Rs m 3,643 261 -92.9
Total Liabilities Rs m 87,016 84,366 -3.0

Current assets Rs m 34,398 35,862 4.3

Fixed Assets Rs m 16,478 20,328 23.4
Total Assets Rs m 87,016 84,366 -3.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster

DABUR Balance Sheet Analysis

 The company's current liabilities during FY19 stood at Rs 27 billion as compared to Rs 24
billion in FY18, thereby witnessing an increase of 9.3%.
 Long-term debt down at Rs 261 million as compared to Rs 4 billion during FY18, a fall of
92.9%.
 Current assets rose 4% and stood at Rs 36 billion, while fixed assets rose 23% and stood at
Rs 20 billion in FY19.
 Overall, the total assets and liabilities for FY19 stood at Rs 84 billion as against Rs 87
billion during FY18, thereby witnessing a fall of 3%.

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 DABUR Cash Flow Statement 2018-19
No. of months 12 12
Particulars % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 10,915 14,991 37.3%
Cash Flow from Investing Activities Rs m -5,400 3,369 -
Cash Flow from Financing Activities Rs m -5,771 -18,882 -
Net Cash Flow Rs m -265 -515 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster

 DABUR Cash Flow Statement Analysis

 DABUR's cash flow from operating activities (CFO) during FY19 stood at Rs 15 billion, an
improvement of 37.3% on a YoY basis.
 Cash flow from investing activities (CFI) during FY19 stood at Rs 3 billion on a YoY basis.
 Cash flow from financial activities (CFF) during FY19 stood at Rs -19 billion on a YoY
basis.
 Overall, net cash flows for the company during FY19 stood at Rs -515 million from the Rs -
265 million net cash flows seen during FY18.

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  FINANCIAL RATION ANALYSIS

 Ratio analysis is a powerful tool of financial analysis. In financial analysis, a ratio

is used as a bench mark for evaluating the financial position and performance of a
firm. The relationship between the two accounting figures, expressed
mathematically, is known as a financial ratio .they help summarize large
quantities of financial data and to make qualitative judgments about the firm’s
financial performance.

KEY FINANCIAL RATIOS OF DABUR MAR MAR MAR MAR MAR

INDIA (in Rs. Cr.) '19 '18 '17 '16 '15

INVESTMENT VALUATION RATIOS

Face Value 1.00 1.00 1.00 1.00 1.00

Dividend Per Share 2.75 7.50 2.25 2.25 2.00

Operating Profit Per Share (Rs) 7.74 6.98 6.31 6.25 5.34

Net Operating Profit Per Share (Rs) 35.52 31.75 30.03 32.69 30.92

Free Reserves Per Share (Rs) -- -- -- -- --

Bonus in Equity Capital 92.41 92.66 92.66 92.79 92.87

PROFITABILITY RATIOS

Operating Profit Margin(%) 21.79 21.97 21.00 19.10 17.27

Profit Before Interest And Tax Margin(%) 19.21 19.16 18.61 17.25 15.66

Gross Profit Margin(%) 20.06 20.14 19.58 17.84 16.06

Cash Profit Margin(%) 20.97 20.23 19.29 17.02 15.30

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Adjusted Cash Margin(%) 20.97 20.23 19.29 17.02 15.30

Net Profit Margin(%) 20.15 19.17 18.86 16.33 14.04

Adjusted Net Profit Margin(%) 19.30 18.24 17.93 15.79 13.69

Return On Capital Employed(%) 37.36 31.23 33.25 41.32 40.98

Return On Net Worth(%) 32.46 25.36 27.29 32.71 32.64

Adjusted Return on Net Worth(%) 32.46 25.70 27.29 32.71 33.66

Return on Assets Excluding Revaluations 22.05 24.00 20.77 16.32 13.30

Return on Assets Including Revaluations 22.05 24.00 20.77 16.32 13.30

Return on Long Term Funds(%) 39.11 31.83 33.96 42.57 43.24

LIQUIDITY AND SOLVENCY RATIOS

Current Ratio 0.92 0.95 0.83 0.83 0.89

Quick Ratio 0.56 0.48 0.42 0.47 0.54

Debt Equity Ratio 0.03 0.07 0.08 0.03 0.06

Long Term Debt Equity Ratio 0.01 0.05 0.05 -- --

DEBT COVERAGE RATIOS

Interest Cover 51.45 64.39 80.75 124.37 102.16

Total Debt to Owners Fund 0.03 0.07 0.08 0.03 0.06

Financial Charges Coverage Ratio 55.10 69.08 85.40 131.78 108.83

Financial Charges Coverage Ratio Post Tax 47.08 54.66 67.16 103.98 84.78

MANAGEMENT EFFICIENCY RATIOS

Inventory Turnover Ratio 8.56 7.96 8.96 9.48 10.00

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Debtors Turnover Ratio 16.67 17.09 14.03 15.14 16.41

Investments Turnover Ratio 8.56 7.96 8.96 9.48 10.00

Fixed Assets Turnover Ratio 3.69 3.48 3.55 5.05 5.06

Total Assets Turnover Ratio 1.53 1.24 1.35 1.97 2.22

Asset Turnover Ratio 1.46 1.32 1.53 2.12 2.46

Average Raw Material Holding -- -- -- -- --

Average Finished Goods Held -- -- -- -- --

Number of Days In Working Capital -9.31 -5.15 - -12.30 -2.19

14.20

PROFIT & LOSS ACCOUNT RATIOS

Material Cost Composition 52.12 53.58 53.00 49.61 52.94

Imported Composition of Raw Materials -- -- -- 3.34 1.95

Consumed

Selling Distribution Cost Composition 7.82 8.26 7.90 8.27 11.90

Expenses as Composition of Total Sales 3.99 3.62 2.98 3.27 3.68

CASH FLOW INDICATOR RATIOS

Dividend Payout Ratio Net Profit 126.31 44.49 39.70 42.12 46.06

Dividend Payout Ratio Cash Profit 116.30 40.61 36.91 39.09 42.39

Earning Retention Ratio -26.31 56.10 60.30 57.88 55.34

Cash Earning Retention Ratio -16.30 59.89 63.09 60.91 58.80

AdjustedCash Flow Times 0.10 0.24 0.26 0.09 0.15

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FY 2018-19 8,533 FY 2018-19 1,442 FY 2018-19 1,740

FY 2017-18 7,748 FY 2017-18 1,354 FY 2017-18 1,617

FY 2016-17 7,701 FY 2016-17 1,277 FY 2016-17 1,509

Net Cash* Net Worth Earnings per share

( in Crore) ( in Crore) (in )

FY 2018-19 3,066 FY 2018-19 5,663 FY 2018-19 8.17

FY 2017-18 3,176 FY 2017-18 5,733 FY 2017-18 7.69

FY 2016-17 2,571 FY 2016-17 4,872 FY 2016-17 7.25

Revenue from operation PAT (in cr.) Operation profit (in cr.)

 SWOT ANALYSIS

 SWOT stands for Strengths, Weaknesses, Opportunities and Threats, and is an

important tool often used to highlight where a business or organisation is, and
where it could be in the future. It looks at internal factors, the strengths and
weaknesses of a business, and external factors, the opportunities and threats
facing the business. The process can give you on overview of where the business,
and the environment it operates in, is strategically.

 This is an important, yet to simple to understand, tool used by many

students, businesses and organisations for analysis . The SWOT analysis will give
you a clear picture of the business environment Dabur india is operating in at the
present time . Strengths :The strengths of a business or organisation are positive
elements, something they do well and is under their control .

 The strengths of a company or group and value to it, and can be what gives itthe
edge in some areas over the competitors.


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 STRENGTH

 Having alliances with other strong and popular businesses is a major plus point for
Dabur india as it helps bring in new customers and make business more effective.

 Being a market leader, as Dabur india is, is key to their success as it boosts
reputation, profit and market share.
 competitive pricing is a vital element of Dabur india’s overall success, as this keeps the
minimum line with their rivals, if not above them.

 Riding high in the niche market in FMCG industry has helped boost Dabur india and
raise dreputation and turnover.

 Keeping costs lower than their competitors and keeping the cost advantages helps
Dabur india pass on some of the benefits to consumers.

 The services/products offered by Dabur india are original, meaning many people will
return to Dabur india to obtain them.

 Dabur india’s marketing strategy has proved to be effective, helping to raise profiles
and profits and standing out as a major strength.

 Dabur india’s innovation keeps it a front-runner in FMCG as it is regularly turning out

new patents/proprietary technology.

 Experienced employees are key to the success of Dabur india helping to drive them
forward with expertise and knowledge.

 High quality machinery, staff, offices and equipment ensure the job is done to the utmost
standard, and is a strength of Dabur india.

 Dabur india has an extensive customer base, which is a major strength regarding sales
and profit.

 Dabur india’s reputation is strong and popular, meaning people view it with
respect and believe in it.

 Being financially strong helps Dabur India deal with any problems, ride any dip in profit
sand out perform their rivals.

 A strong brand is an essential strength of Dabur India as it is recognized and respected.

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 Dabur India has a high percentage of the market share, meaning it is ahead of many
competitors

 Dabur India’s distribution chain can be listed as one of their strengths and links to
success.

 High quality products/services is a vital strength, helping to ensure customers return to

Dabur India.

 Dabur India’s international operations mean a wider customer base, a stronger brand
and a bigger chunk of the global market.

 Development and innovation are high at Dabur India with regard to

their products/services, which is a sure strength in its overall performance.

 Dabur India’s position in the market is high and strong – a major strength in this
industry’s they are ahead of many rivals.

 Having little competition, being one of very few companies providing thisservice/product
is a major factor in Dabur India’s performance.

 The online presence of Dabur India is strong, meaning it is ahead of many competitors.

 The lucrative location of Dabur India adds to its strengths due to its accessibility (road,
rail, air etc).

Supplier relationships are strong at dabur india, which can only be seen as strength intheir
overall performance.

 WEAKNESS

Weaknesses of a company or organization are things that need to be improved or perform

better, which are under their control. Weaknesses are also things that place you
behind competitors, or stop you being able to meet objectives.

Page no. 22
 Reputation is important, and a damaged one like Dabur India’s is a major weakness as
consumers will not trust the firm enough to spend money with them.

 A serious weakness for Dabur India is the fact their products/services are of low quality,
meaning people will have better-quality substitutes.

 Not reducing costs in the same way as their competitors means Dabur india is outlaying
more of their profits. Having higher costs than competitors is a major weakness.

 Dabur India’s R&D work is low and insignificant, which is a major weakness in FMCG
as it is constantly creating new products.

 The lack of staff experience is a major downfall for Dabur india as it could lead to
mistakes or negligence.

 Old and outdated technologies hold Dabur india back and limits success, as other firm
sare making use of better and more reliable technologies.

 Not having an effective marketing strategy seriously hampers the success of dabur india.

 Over pricing, setting too high prices for dabur india products/services makes
themuncompetitive, which is a major weakness.

 The lack of business alliances is a major weakness for Dabur india, as they will struggle
to get deals, favours and partnerships.

Dabur india is in a poor financial position which makes it weaker than its competitors.

 Dabur india’s lack of innovation limits its success, as there is no forward thinking.

 Good companies need loyal employees, but Dabur India has a poor relationship with
staff which affects performance.

 Dabur India does not function internationally, which has an effect on success, as they do
not reach consumers in overseas markets.

 Problems with stock are a weakness for Dabur India as they need to keep up with
demand.

 Online presence is vital for success these days, and lack of one is a limitation for Dabur
India.

 Dabur India underdeveloped distribution chain has a marked effect on performance as it

affects the distribution of their products/services.

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 The lack of original products/services is a major flaw in Dabur India’s future success, as
it shows a blinkered outlook.

 Dabur India's location is weakness for the firm, as it means they miss out on many
opportunities.

 Dabur India’s lack of patents proprietary technology puts it behind its rivals and is
deemed as one of their weaknesses.

 The weak brand name compromises success for Dabur India as it doesn't inspire people
to buy their products/services.

 A limited customer base is a major weakness for Dabur

India as it means they have less people to sell or market to.

 The weak market position of Dabur India is a limitation to their overall success, as they
are well behind their rivals.

 Dabur India’s limited product line is a major weakness.

 Dabur India’s weak supplier relationships also have an adverse effect on success, as it cut
stability to negotiate.

 Dabur
India is behind its competitors with a low share of the market, which in turn leads
to lower turnover.

Opportunities are external changes, trends or needs that could enhance the business
or organization’s strategic position, or which could be of a benefit to them.

 OPPORTUNITIES

 Dabur India could benefit from Governmental support, in the form of grants, allowances,
training etc.

 Looking at export opportunities is a way for Dabur India to raise profits.

Changes in technology could give Dabur India an opportunity to bolster future success.

Page no. 24
 Dabur India could benefit from expanding their online presence and making more money
from online shoppers/internet users.

 The changes in the way consumers spend and what they buy provides a big opportunity
for Dabur India to explore.

 Dabur India is in good financial position, which is an opportunity for them to explore in
terms of investment in new projects.

 Decrease in taxation gives an opportunity for Dabur India to reduce prices

or increase profits.

 The growth of the FMCG industry is an opportunity for Dabur India to grasp.

 New market opportunities could be a way to push Dabur India forward.

 As the economic climate improves, so do the opportunities for Dabur India.

 Dabur India has the opportunity to enter a niche market, gain leading position and
therefore boost financial performance.

 Reaching out into other markets is a possibility for Dabur India, and a big opportunity.

 Grasping the opportunity to expand the customer base is something Dabur India can aim
for, either geographically or through new products.

 Takeover and merger opportunities could be explored for Dabur India and used to acquire
new customers, new resources and enter new markets.

 Expanding the product/service lines by Dabur India could help them raise sales and
increase their product portfolio.

 Reduction in interest rates could benefit Dabur India as business costs would come down.

 Expanding into other markets could be a possibility for Dabur India.

 Forming strategic alliances and joint ventures is an opportunity for Dabur India to
maximize profit and gain new business.

 Dabur India has a number of highly skilled staff, which is an opportunity for them to
explore as expertise of their staff can help Dabur India to bring the business forward.

 Structural changes in the industry open other doors and opportunities for dabur india.

Page no. 25
 THREATS

 Threats are factors which may restrict, damage or put areas of the business or
organization at risk. They are factors which are outside of the company's control.
Being aware of the threats and being able to prepare for them makes this section
valuable when considering contingency plans and strategies. This section will
outline main threats Dabur India is currently facing.

 Consumer lifestyle changes could lead to less of a demand for Dabur

India products/services.

 Tax increases placing additional financial burdens on Dabur India could be a

threat.

 The financial burden of increasing interest rates could be a threat to Dabur India.

 Regulations requiring money to be spent or measures to be taken could put

financial or other pressure on Dabur India.

 New products/services from rival firms could lead to Dabur India's

products/services being less in demand.

 Changes in the way consumers shop and spend and other changing consumer
patterns could be a threat to dabur India’s performance.

 Being undercut by low-cost imports is a major threat for dabur India.

 Not keeping up with changes in technology could be detrimental to the future of

dabur india as they could slip behind their rivals.

 Slow growth and decline of the fmcg market is a threat to dabur India.

 Increased competition from overseas is another threat to dabur India as it could

lead to lack of interest in their products/services.

 Extra competition and new competitors entering the market could unsteady dabur
India and be a threat.

 The actions of a competitor could be a major threat against dabur India, for
instance, if they bring in new technology or increase their workforce to meet
demand.

Page no. 26
  Price wars between competitors, price cuts and so on could damage profits for
dabur India.

 A slow economy or financial slowdown could have a major impact on dabur

India business and profits.

 A decline in demand for dabur India products, with no likelihood of resurgence

could pose a threat.

The rise and/or fall of the foreign exchange rate could threaten dabur India with
regard to importing and exporting.

 Rising costs could be a major downfall for dabur India as it would eat into profit.

 Dabur India could be threatened by the growing power customers have to set the
price of their products/services.

 Structural changes in the industry could be a threat for dabur india

 Dabur India could be threatened by the growing power their suppliers have to set
their prices.

 Dabur India could benefit from expanding their online presence and making more money
from online shoppers/internet users.

 The changes in the way consumers spend and what they buy provides a big opportunity
for Dabur India to explore.

 Dabur India is in good financial position, which is an opportunity for them to explore in
terms of investment in new projects.

 Decrease in taxation gives an opportunity for Dabur India to reduce prices

or increase profits.
 Substitute products available on the market present a major threat to dabur india.

Page no. 27
 FINDING & ANALYSIS

 BREAK-EVEN POINT ANALYSIS

Page no. 28
 INVESTMENT DECISION ANALYSIS

8.1 7.4 8.3

7.7 7.4 7.2
6 6.8
5

2.7

Sectoral GDP growth : India

Black : -2017-18
Green :-2018-19

 The investment decisions of a firm can also be called as the capital budgeting, or capital
expenditure decisions. It is a decision defined as the firm’s decision to invest its current
funds most efficiently in the long-term assets in anticipation of an expected flow of
benefits over a series of years.

 This is the most important decision to be made by the management in planning as it

involves a high risk of the uncertainty in gaining the profit in the future. Ones made it
cannot be reversed. The company, which signed an agreement with the Board of
Investment of Sri Lanka for this venture, said in a statement that the investment marks its
entry into the island nation.

 Dabur has set up Dabur Lanka Pvt Ltd, to be incorporated under its wholly-owned unit
Dabur International, which handles overseas operations.

 "The demand for fruit-based juices and beverages under the Real brand has been
reporting strong growth month-on-month. Dabur's food business had reported an over 28
percent growth despite supply constraints," Chief Executive Sunil Duggal said.

Page no. 29
  "As continued high growth is expected in the future too, we are setting up this new
facility to augment our production capacity for fruit-based beverages and meet the
growing demand." Duggal added.

 The new plant, which will be set up at Gampaha, north of Colombo, will have a monthly
capacity of 280,000 cases and will be commissioned in Aug-Sept 2018.

 Dabur has manufacturing plants in Nepal, Bangladesh, Dubai, Nigeria, Egypt and Turkey
among others.

 About 22 per cent of Dabur's sales come from international markets, including African
nations, Nepal and Bangladesh.

 "Building manufacturing facility in Sri Lanka was an important strategic decision for
Dabur as manufacturing presence here gives us a competitive edge that we intend to
utilize in full," Duggal said.

 Net Present Value (NPV) method is an economic method of evaluating the

investment
 Proposals. It recognizes the time value of money.
 NPV = Present value of cash inflow – Present value of cash outflow

 Profitability index (PI)= present value of the cash inflow / outflow

 Calculation of the weighted average:

Cost of Debt = Interest and financial charges x 100

Long term debts

In the table above the weights are given and the weighted average is calculated . The sum of the
Debt and equity weighted average is taken and the this is found to be (3.07+.0 51= 3.12%). The
PV values at 3% are taken for the five years and the inflow is discounted with the respective
values\ as shown in the table

Page no. 30
Average rate of return= Average profit after tax = - 0.533

 Suppliers of the long term debt are concerned with the firm’s long term solvency
and survival. They analyze the firm’s profitability over time, its ability to
generate cash to be able to pay interest and repay principal and relationship
between various sources of fund. The firm’s future profitability and the solvency
are the prime concern.

 Investors are more concerned about the firm’s earnings.

 Management of the firm is interested in every aspect of the financial analysis.
They see that the resources of the firm are most effectively and efficiently utilized
and that the firm’s financial condition is sound.

 Dabur India Limited (Dabur) is a consumer care and health care products
company. Product portfolio offered by the company includes personal care
products, health care products, home care products and foods. Dabur also offers
ayurveda-based healthcare products. It markets its products in India as well as in
International markets as Middle East, South-East Asia, Africa, the European
Union and America.

Page no. 31
  CONCLUSION

 The financial statements of the firm for the five consecutive years(2018-2019) were
analyzed and various ratios and analysis were done.

 Through the ratio analysis of seven admired companies in the same sector.
The various positive and negat ive results came out, on the basis of these
results I would like to recommend that-

 The company should try to increase the duration of the average collection period to
compete with its competitors, by offering the customer high cost in credit
sales.

 The company should try to maintain its net worth for having satisfactory fund for equity
share holders.

 The company should give more emphasis to sufficient utilization of the resources and
funds.

 The company should improve the return on capital employed, as a source of long term
fund.

T he co mp a ny s ho u ld r ed u c e it s va r ia b le co st t o inc r e a s e gr o s s pr o fit
ma r g in which is very low relatively other FMCG

Page no. 32
 On the basis of data and available information. Certain findings arrived that relates the
Ratio Analysis of the company.

 It is observe that the Dabur India Ltd. has operating profit 20.4% margin and
company’s l iq u id it y is a ls o go o d. I t ha s i m p o r t a nt fr o m t he vie w p o int
o f cr e d it o r s a nd shareholders’ that company have sufficient fund to pay them.

 In the comparison of profitability ratio in Dabur India Ltd. the revenue 16.9% and net
profit 0.96% both are increases in the year 2018-2019 in compare to last two year.

 The Increase in share of profit (joint venture) 0.96% is also increase in the year 2018-
2019 in compare to last two year. It shows that current assets increase over current
liabilities.

 The debt equity ratio 0.45% is also increase in the year 2018-2019 in compare to l a s t
t wo ye a r . I t s ho w s t h at a la r g e s h ar e o f fi n a n c i n g b y c r e d it o r s
i n t h e company, which is positive sign for the company.

As Days of Sales FY 2018-19 FY 2017-18

Inventories 56 59
Receivables 36 33
Payables 63 66
Working Capital 29 26

 The return on capital employed 49.47% is having little bit of decrease in 2018-2019 in
compare to last year. But then also its better than some other FMCG
companies. It shows that Dabur India Ltd. have sufficient sources of the long
term funds.

 The fixed assets turnover ratio 6.88% has increases in 2018-2019 compare to
last two years. It shows the efficiency of Dabur India Ltd. in utilizing the fixed assets of

Page no. 33
 the company, comparing with the previous period. It also shows that company
has increases its investment in fixed assets.

 The debtors’ turnover ratio 50.83% has increases in 2018-2019 in compare to

last two years, which shows that Dabur India Ltd. is managing its credit very well.

 The average collect ion period is decreases to 10.16% in compare to last two
years. This low average collection period shows a low cost in extending credit to

Page no. 34
 LIMITATIONS

 Alt hough it has been my endeavor to take all necessary precautions to ensure
that the in fo r ma t io n g at her ed is a ut he nt ic a nd ma x i m u m fa c t s ar e
p r e s e nt ed but I fa c e d c er t a in constraints while doing so. The constraints and
limitations faced are as mentioned below:

5. Time:

 The nature of the report required detailed and meticulous information gathering. In this
sense time was a limiting factor and a major constraint to accomplish the given task. Also
sometimes the information was not available on time. This caused a lot of pilferage of
time unnecessary of duplication of effort.

6. Human error:

 The feedback provided by the company executives, consumers and others

 approached has been assumed to be correct. But there might have been wrong and biased
facts given. The opinion of few cannot be generalized in any manner.

7. Non cooperation:

 While by and large the people approached were helpful some people were non-
cooperative. Also a lot of information was withheld due to its sensitive nature.

8. Calculation error:

 The report required calculation of figures and at last have to analysis them also, so
mistake can be arises during calculations.

Page no. 35
 RECOMMENDATION & SUGGESTION

 These suggestions are based on ratio analysis and this through company may improve their
financial stability, liquidity position, operating efficiency and may restructure finance.

 1. As current ratio was less than standard ratio 2:1 in all the selected automobile companies.
Therefore these companies need to increase current ratio by investing in current assets or by
decreasing current liabilities and try to maintain standard norm of this ratio.

 2. Super Quick ratio of all companies found very negative therefore all the selected automobile
companies required to improve quick ratio immediately to improve its quick ratio. Automobile
companies need to maintain the proper level of cash, bank balance and short-term investment in
current 176 assets. At the same way try to increase reserves by investing profit or decreasing level
of current liabilities.

 3. As liquid ratio found that liquidity ratio was less than the standard ratio 1:1 in all the selected
automobile companies. Hence these companies should increase liquid ratio by investing in liquid
assets or by decreasing liquid liability. All the companies should try to maintain standard norm
(1:1) of this ratio as know well without liquid assets very difficult meet with current obligation.
For the trust of creditors and investor, companies need to make proper planning about short-term
funds and its utilization.

 4. Gross profit ratio thus reflects the margin of profit that a concern is able to earn on its trading
and manufacturing activity. All the selected companies should have to maintain this ratio at high
level as it’s indicates operating efficiency. Moreover companies should have to make the plan
about inventory or try to reduce cost of goods sold and increase the sales.

 5. Operating margin is used to measure company's pricing strategy and operating efficiency. It
gives an idea of how much a company makes (before interest and taxes) on each rupees of sales.
All the selected companies should try to maintain this ratio at high level. For the maintaining high
level of this companies need to increase operating income by net sales or increase operating
efficiency and also reduce the external funds.

 6. Return on capital employed ratio measures the profitability of a company by expressing its
operating profit as a percentage of its capital employed. From the analysis it is to be found that
return on capital employed below than 50% in all the selected automobile companies.

Page no. 36
 Accordingly, all the selected companies should try to maintain this ratio up to 50% because its
point to well-organized use of funds.

 7. Net profit ratio indicates the company’s capacity to face adverse economic conditions such as
price competition, low demand, etc. Obviously, higher the ratio the better is the profitability.
Hence, try to sustain this ratio at higher level because this ratio reflects the operating efficiency
and performance of the company. As we know this ratio is very useful for the investors.

Page no. 37
 REFERENCES

 Financial Management BY Pandey , Vikas Publishing House Pvt. Ltd, New Delhi.
 Financial Management theory and practice by Prasanna Chandra
 www.dabur.com
 www.google.com

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