ITS School of Management

Session- 2021-2023 (3rd Trimester)

Subject- Financial statement Analysis

Project on Godrej Consumer Product.

Submitted to: submitted by:

DR. ANUSHA AGARWAL Vanshika Goel
(Pgdm Chairperson) Rupali Bhardwaj
Divya Bharti
Umang Agarwal
Sonali
Naitik Jain
Anubhav saxena
 ACKNOWLEDGMENT
We take great privilege to express our profound gratitude to our Institution, ITS School of
Management, which has been instrumental in helping us in the completion of our project at
Godrej.
We extend our sincere thanks to all the respondents, and sales people of Godrej who helped us for
our project.
We are highly indebted to DR. ANUSHA AGARWAL for her guidance and supervision. We would
like to thank her for providing the necessary information and resources for this project.
Last but not the least, we would like to thank our family members and friends whose unbounded
support facilitated the successful completion of the project.

Thank you
Group 5
PGDM 21-23
 EXECUTIVE SUMMARY

The report updates about financial modelling of company “Godrej Consumer Product”. The
objective this review is to study the financial data of the last five years. Overall company strategies
were reviewed and considered along with the financial analysis to come to a conclusion for
recommendation of investment.
The financial analysis covers income statements and balance sheet, cash flow statements and various
schedules for the forecasting of data from the year 2017 to year 2026. A pro forma look ahead
estimated financial performance is generated and assumptions are taken on the basis of CAGR that
helped derive the financial data for the next five year forecasting.
Conclusions are drawn from the above stated financial analysis as well as areas for improvement and
recommendations for the company to improve the performance.
 CONTENTS
 Introduction
 Company Profile
 Objectives
 Research Methodology
 Data Analysis
 Findings
 Conclusion
 Recommendation
 Limitation
 References
 Annexure
 Introduction

Godrej Group is one of the largest conglomerates based inMumbai, India, involved in various
industries that include appliances, precision equipment, machine tools, furniture, healthcare, interior
solutions, office equipment, food processing, security, materials handling and industrial storage
solutions, construction and information technology. Its products include security Systems and Safes,
Typewriters and Word processors, Rocket Launchers, Refrigerators and Furniture, Outsourcing
Services, Machine Tools and Process Equipment, Cosmetics and Detergents, Engineering
Workstations, Medical Diagnostics andAerospace Equipment, Edible Oils and Chemical,
MosquitoRepellents, Car perfumes, Chicken and Agri-products,Material Handling Equipment’s Like
FORKLIFT Trucks,Stackers, Tyre handlers, Sweeping machines, accessEquipment’s etc. The Group
is headed by Mr. Adi Godrej &Mr. Jamshyd Godrej.

Traditionally, Vikhroli, a suburb to the North east of Mumbaihas been Godrej'smanufacturing

base, butincreasingly the groups have moved significant productionfacilities away fromMumbai.The
Godrej group also ownsvast land in Vikhroli, occupying 3500 acres (14 sq km) ofland on both sides
of the Vikhroli section of the LBS marg.That makes the Godrej group the biggest private land
ownerin Mumbai by farSuch vast land can, in theory, be used tocreate at least 1500 acres of
residential floor space, which,at very modest rates (Rs.10000/sq ft), can be sold for USD16 billion .
Thus, the Godrej group is sitting on an invisible cash pile that is envy of other Indian conglomerates.
 Company Overview & Achievements

History

The Company celebrated its centenary in 1997. In 1897 a young man named Ardeshir Godrej gave
up law and turned to lock making. Ardeshir went on to make safes and security equipment of the
highest order, and then stunned the world by creating toilet soap from vegetable oil.

His brother Pirojsha Godrej carried Ardeshir's dream forward, leading Godrej towards becoming a
vibrant, multi-business enterprise. Pirojsha laid the foundation for the sprawling industrial garden
township (ISO 14001-certified) now called Pirojshanagar in the suburbs of Mumbai. Godrej
touches the lives of millions of Indians every day. To them, it is a symbol of enduring ideals in a
changing world.
`Godrej Groups of Companies
Godrej and Boyce Mfg. Co. Ltd
Godrej & Boyce manufactures a spectrum of consumer products and industrial products. The
Consumer products include Appliances (Refrigerators, Washing Machines, Air Conditioners,
Microwaves, and DVD Players), Locks, Furniture, Security Equipment, Office Automation,
Conferencing Solutions, and vending Machines. Industrial Products include Storage Solutions,
Automated Warehousing, Material Handling Equipment, Process Equipment, Precision
Components & Systems, Machine Tool Service, Electrical & Electronic, Tooling,
and Construction Material & Services.

Incorporation

Established in 1897, the Company was incorporated with limited liability on March 3, 1932, under
the Indian Companies Act, 1913.
Branches (Sales and Service) and Retail Showrooms
1. MUMBAI, Ahmedabad, Bhopal, Indore, Jabalpur, Pune, • Raipur
2. NEW DELHI, Chandigarh, Faridabad, Ghaziabad, Jaipur, Kanpur, • Lucknow
3. CHENNAI, Bangalore, Coimbatore, Hyderabad, Kochi, Pondicherry, •
Trivandrum, Visakhapatnam
4. KOLKATA, Bhubaneswar, Guwahati, Ranchi, • Patna

The Company has a network of 38 Company-owned Showrooms, more than 2,200 Wholesale
Dealers, and more than 18,000 Retail Outlets.
The Company has Representative Offices in Sharjah (UAE), Nairobi (Kenya), Colombo (Sri
Lanka) and Riyadh (Saudi Arab)
Description of the Company:
To the faithful the Godrej narrative starts with an event a young man gave up law and took up lock
making. What an unspecular beginning for a story!
For, have no other young men before and since taken similar decisions and made good? What was
spectacular and unique was not the event. Events in the godrej story are only the small visible
pieces of a larger, continuously emerging picture – a picture witch event in 1897 had already
formed, Invisible to the word, yet alive and palpable in the mind of one man: the young lawyer-
turned-lock maker –Ardeshir Burjorijee Godrej. Ardeshir Godrej was different. He was intensely
interested in the now but only in relation to the always. Time present was important but he was
convinced the timeless was what one should strive for.

His lock was his first demonstration of the fact that we could do it the first stroke in making his
picture a reality. It is all very well to dream of durability. Ardeshir knew that it does not just
happen. It had to be built into the very concept and design of every product. In a manner of
speaking a product had to stand the test of time, before it actually existed. Thus was he led to
develop a fireproofing compound for his new line of business-safes. This compound, he said could
deafly the most catastrophic fires. (Years later he was proved right when Bombay was rocked by
the terrible dock explosion of 1944. mortar and mangled bodies lay scattered over a mile radius.
Among the cinders and the rubble, his safes were found- contents unsigned, even the onionskin
letterheads instate!)
His locks and his safes were meeting with acceptance. The picture was taking shape; the
background was right and he perspective clear. It was left to another man to enlarge the canvas to
stunning and rewarding proportions.
Division of Godrej & Boyce Manufacturing Ltd.

There are mainly division of Godrej & Boyce mfg. ltd those are:
1. Appliances
2. Interio
3. Marketing
4. Service
5. Retail
6. Commercial

The company has been divided into 6- zones &Lucknow city comes under central zone.

As
- Appliances section is headed by Mr. Rajeev Dubey who is general manager of central zone.
- Marketing section is look after by Mr. Saurabh Surry.
- Service section is taken out by G.M. who site at Mumbai. At Luck now Mr. Deepak Nagar has
the authority who is Service Manager of central zone.
-Interio section is look after by Mr. Manoj Sadavart who is AGM.
- Commercial section look after by Mr. M.A. khan
- The retail section is dealt by Mr. R.R. Dordi who is RSM and looks after Godrej life space store
at Lucknow & Kanpur.
 CORPORATE PROFILE:

GODREJ & BOYCE MFG. CO. LTD. INSIDERS ON BOARD

OF DIRECTORS

JAMSHYD N. GODREJ
Jamshyd n. Godrej has been the “managing director” of
Godrej &Boyce manufacturing co. ltd. since 1991. Mr.
Godrej serves as the president of the world wide fund for
nature-India. He served as public interest director of Bombay stock exchange limited from
September 28, 2006 to September 28, 2008. Mr. Godrej served as president of the Indian machine
tool manufacturers' association. He has been closely associated with the confederation of Indian
industry and was its president...
During 1993-94 he has been the chairman of the board of Godrej &Boyce mfg. co. ltd. (also known
as Godrej &Boyce manufacturing co. ltd.) since 2000. He has been the chairman of geometric
software solutions co. ltd. since 2000. He also serves as the chairman of aspen institute-India. He
joined the board of Godrej &Boycemfg. co. ltd. as a director in 1974.Since April 29, 1990. He
serves as director of haldia petrochemicals limited, breach candy hospital trust, Singapore-India
partnership foundation and great lakes institute of management. He served as a director of wadala
commodities ltd. until June 10, 2008. He served as a non-executive independent director at Bajaj
holdings & investment limited. Until February 20, 2008. He served as an independent non-
executive director of Bajaj auto finance ltd. he is an ardent yachting enthusiast and has done
extensive cruising along the west coast of India. He was the recipient of Padma bhushan award in
April 2003, conferred by the president of India. Mr. Godrej completed his bachelor's degree in
mechanical engineering and master’s in business administration, both from the Illinois Institute of
Technology.
 K. A. PALIA
K. A. Palia serves as “director of finance at Godrej
&Boyce mfg. co.” ltd. dr. palia joined Godrej
&Boyce manufacturing co. ltd. (g&b) on February 2, 1970. He has considerable expertise and
experience in financial management, business strategy and corporate governance.
He heads the finance function of g&b. he is also in charge of the electrical and electronics,
construction and property development businesses of g&b. dr. palia serves as an executive director
of Godrej ... &Boyce mfg. co. ltd.
He is a fellow of the institute of chartered accountants of india and also of the institute of cost &
works accountants of india. dr. palia holds a master's degree in commerce and a diploma in
managerial accounting from the mumbai university, and a ph.d.in business administration from the
Oklahoma state university, USA.

P.D. LAM
PRESIDENT AND EXECUTIVE DIRECTOR and has
been associated with the Company since 1975. Prior to
joining Godrej, he was a partner in the Solicitors firm of
Payne & Co.
 Vijay Crishna

Vijay Crishna is the Executive Director of Lawkim Motors Group. He joined Lawkim Ltd, a
bankrupt light engineering company taken over by the Godrej Group at the behest of N.P. Godrej
in 1977 after eight years of management experience in Kolkata.

Anil Verma

Anil Verma is the Executive Director (Personnel & Administration) of the Company and has been
associated with the Company since 1983. He is an Engineering graduate and has an MBA from the
prestigious Indian Institute of Management, Ahmedabad.
 Objectives

The study was conducted to achieve the following objectives:

1. To study the performance analysis of Godrej consumer by using THREE STATEMENT MODEL.
1. To understand the concept of Financial Statement Analysis.
2. To ascertain the financial performance, position and changes in financial position of the
company.
3. To ascertain the progress of the company in the industry.
4. To ascertain the future performance the company on the basis of historical data.
 Research Methodology

Source of Data:The study is based on secondary data. Data regarding Company is collected from
the annual report of Godrej consumer industry with the help of the Financial Statement of the
company taken from the Capitaline.

Sample Size:One company taken into consideration

Company Name Industry
GODREJ CONSUMER Conglomerate

Financial Statement-
✓ Balance Sheet

✓ Profit & Loss A/c

✓ Cash Flow Statement

Tools for Analysing Data:

 MS EXCEL

 CAGR Analysis

 Trend Analysis
 Data Analysis

Future Projections of Items of Balance Sheet and Profit & Loss A/c-
 In case of Revenue, we have calculated the forecasting data as per CAGR method taking
the last 4 year average data.
 In case of Excise/Service Tax/Other Levies, since the of Excise/Service Tax/Other
Levies is ₹ 0.00 in the FY19 & FY 20, thus it is assumed that it will ₹ 0.00 in the next 5
years and the projected value is ₹ 0.00 on the same assumption for next 5 years.
 In case of Other Income, thus, the future projection of growth % is done on the basis of
CAGR of last 4 years and the Other Income is calculated on the basis of same assumption.
 In case of Raw Materials, the future projection of growth % is done on the basis of CAGR
of last 4 years.
 In case of Purchase of stock in trade, the future projection of growth % is done on the
basis of CAGR of last 4 years.
 In case of Changes In Inventories Of FG,WIP And Stock-In Trade due to drastic
changes in every year we have taken last year rate as future projection.
 In case of Employee Benefit Expenses, the future projections of growth % are done on the
basis of CAGR of last 4 years.
 In case of Finance Costs., the future projections of growth % are done on the basis of
CAGR of last 4 years.
 In case of Misc. Expenses, the future projections of growth % are done on the basis of
CAGR of last 4 years and the Misc. Expenses is calculated on the basis of expected growth
rate.
 In case of Dep., since no information is available about the disposal life of assets and
percentage of dep. charged by the company, thus we will assume and calculate the dep. on
the basis of historical data and further calculations will be done on same basis and the Dep.
is calculated on the basis of this assumption that the method is SLM method and the lofe of
asset is 10 years.
 Formula used for Calculating Inventory (Days Of Raw Materials Cost) =

(Average Raw Material Inventory/Raw material purchase)*365

And thus on the basis of this formula the future projections of next 5 years is
done the basis of CAGR of the value and on the basis of this formula the
amount of Inventory of next 5 years is calculated.
 Formula used for Calculating Accounts Receivables (Days Of Sales) =
(Average A/R/Total Net Sales)*365\
And thus on the basis of this formula the future projections of next 5 years is
done the basis of CAGR of the value and on the basis of this formula the
amount of Sundry Debtors of next 5 years is calculated.

 For the preparation of Cash Flow Statement, different items had been used under three
main heads that are-

1- Cash Flow from Operating Activities,

2- Cash Flow from Investing Activities,
3- Cash Flow from Financing Activities,
 Findings

1. Net Sales- From the graph below we can see that there is minimal fluctuations in the net sales
of the company which is a good sign that the company is trying to maintain its sales year by
year and it is not declining.

Net Sales
9,000.00 8,390.66
7,911.15
8,000.00 7,345.80
6,967.10
7,000.00 6,599.51
6,254.33
5,679.31
6,000.00 5,261.02 5,474.45
4,748.10
5,000.00
4,000.00
3,000.00
2,000.00
1,000.00
0.00
1 2 3 4 5 6 7 8 9 10

2. Shareholders’ Fund- From the following graph it can be seen that the shareholders’ fund is
increasing year by year which is a good sign because when an increase occurs in a company's
earnings or capital, the overall result is an increase to the company's stockholder's equity balance.
But in the FY 2025 – 26 the shareholders’ funds is decreasing which is adverse sign.

Total Shareholders Funds

12,000.00 10,497.64
9,884.63 9,672.46
10,000.00 8,849.89

8,000.00
6,359.18
6,000.00 5,127.62
4,926.16
4,373.614,641.59
4,000.00 2,952.02

2,000.00

0.00
1 2 3 4 5 6 7 8 9 10
3. CAPEX: From the following graph below, it can be seen that the CAPEX is constant
throughout all the years which indicates stable sign in the Assets of the company.

CAPEX

4. Net Profit : The company is showing profit for the starting year and for the FY 2024 – 25
and FY 2025 – 26, companies net profit is showing adverse amount and company is going
on losses.
 Conclusions

 Godrej Consumer Products Limited (GCPL) is a consumer goods company under the
Godrej Group. As a leading emerging markets company, GCPL enjoys the patronage of 1.2
billion customers globally.
 Godrej has needed to give more attention to all the major players to survive in the practical
market because the company’s from worldwide are playing the best role in the market also
most of the companies are providing goods at the least prices and best values to the
customers. 
 Godrej Consumer Products has been reporting a very gradual yet consistent increase in
revenues and profits since 2016. Its total revenue has grown at a CAGR of 3.68% over the
last 5 years, whereas the industry average stood at 3.6%. The firm’s Return on Capital
Employed (ROCE) stands at 18.65%, which is quite low when compared to peers. This
means that for every Rs 100 worth of capital employed, GCPL earns Rs 18.65 on it.
Moreover, the company is virtually debt-free.
 Limitations

Due to the limitations of unavailability of historical data the calculation of Acc. Dep. and Closing Bal. of Cash
A/c is done on the basis of historical data available in the Balance Sheet and Profit & Loss A/c, due to which
the forecasted data of next five years is showing some negative values and the company is showing loss for
the FY 2025- 26. For matching the total assets and total liabilities, suspense A/c is created.
 References
 https://www.godrej.com/
 https://en.wikipedia.org/wiki/Godrej_Group
 https://www.godrejindustries.com/
 https://awsone.capitaline.com/Externel-Access-IPLogin.html