TERM PAPER O

SUBMITTED TO
LECT. NITIKA SEHGAL
ER ON DABUR LTD

SUBMITTED TO
GAL HARPREET SINGH
ROLL NO. A18
SEC. S1001
D

TO
INGH
A18
01
INTRODUCTION OF DABUR
It is the Fourth largest FMCG company in India and is position
like health care , personal care , homecare and foods. The co
india. And now led by his great grandson Vivek C . Burman , w
India, near the Indian capital New Delhi , where it is registere
Bangladesh,Egypt and Nigeria ). Today it is a Rs 28 bn compa

Leading Brands are :-

Vatika, anmol, Hajmola, dabur Amla Chyawanprash, Dabur ho
with turnover Rs 100 each. Strategic position of various brand

BRAND NAME

Dabur Honey
Dabur Chyawanprash
Herbal Digestives
Hajmola
Dabur lal Tail tops baby massage oil

Visions
Dedicated to the health and well being

Principles Ownership
This is our company. We accept personal responsibility, and

Passion For winning

We all are leaders in our area of responsibility, with a deep commitmen
doing what matters most.
 Principles Ownership
This is our company. We accept personal responsibility, and

Passion For winning

We all are leaders in our area of responsibility, with a deep commitmen
doing what matters most.

People Development
People are our most important asset. We add value through result drive

Consumer Focus
We have superior understanding of consumer needs and d

Team Work
We work together on the principle of mutual trust & transparency in a b
in advocating proposals, including recognizing risks.

Innovation
Continuous innovation in products & processes is

Integrity
We are committed to the achievement of business success with integri
partners and with each other.
DABUR
ny in India and is positioned successfully on the specialist herbal platform. It operates in
ecare and foods. The company was founded by Dr. Burman in 1884 as a small pharmac
dson Vivek C . Burman , who is the chairman of Dabur India limited . The company headq
lhi , where it is registered. The company has over 12 branches in india and abroad ( Ne
ay it is a Rs 28 bn company with market capitalization worth Rs 106 bn .

Chyawanprash, Dabur honey and Lal Dant manjan

position of various brands in market share –

MARKET
SHARE
40%
65%
90%
75%
35%

Visions
o the health and well being of every household"

les Ownership
personal responsibility, and accountability to meet business needs.

on For winning
lity, with a deep commitment to deliver results. We are determined to be the best at
les Ownership
personal responsibility, and accountability to meet business needs.

on For winning
lity, with a deep commitment to deliver results. We are determined to be the best at

Development
dd value through result driven training, and we encourage & reward excellence.

nsumer Focus
ing of consumer needs and develop products to fulfill them better.

eam Work
al trust & transparency in a boundary-less organisation. We are intellectually honest
zing risks.

nnovation
n in products & processes is the basis of our success.

Integrity
business success with integrity. We are honest with consumers, with business
 platform. It operates in key consumer products
884 as a small pharmacy in Calcutta ( Kolkata ),
ed . The company headquarters are in Ghaziabad ,
n india and abroad ( Nepal, Dubai,
106 bn .

he best at
he best at

ence.

ly honest

ss
Comparative income Statement as on 31st march 2010
Industry :Personal Care - Indian - Large
(Rs in Crs)
Mar
   Year Mar 10(12)  09(12) 
  INCOME :
 Sales Turnover 2,880.45 2,423.68
   Excise Duty 23.58 27.52
  Net Sales 2,856.87 2,396.16
  Other Income 40.52 44.19
 Stock Adjustments 9.68 38.89
   Total Income 2,907.07 2,479.24
  EXPENDITURE :
 Raw Materials 992.21 937.13
  Power & Fuel Cost 35.43 36.63
 Employee Cost 197.62 154.7
  Other Manufacturing Expenses 432.15 358.33
 Selling and Administration Expenses 566.4 429.25
  Miscellaneous Expenses 111.04 96.32
 Less: Pre-operative Expenses Capitalised 0 0
   Total Expenditure 2,334.85 2,012.36
  Operating Profit 572.22 466.88
  Interest 13.28 14.47
  Gross Profit 558.94 452.41
  Depreciation 31.91 27.42
  Profit Before Tax 527.03 424.99
  Tax 89.66 47.48
 Fringe Benefit tax 0 6.51
  Deferred Tax 4.04 -2.55
  Reported Net Profit 433.33 373.55
  Extraordinary Items 12.08 18.8
  Adjusted Net Profit 421.25 354.75
  Adjst. below Net Profit -0.19 -0.71
  P & L Balance brought forward 428.94 323.23
  Statutory Appropriations 0 0
 Appropriations 335.17 267.13
   P & L Balance carried down 526.91 428.94
  Dividend 173.6 151.39
   Preference Dividend 0 0
  Equity Dividend % 200 175
   Earnings Per Share-Unit Curr 4.65 4.02
  Earnings Per Share(Adj)-Unit Curr
   Book Value-Unit Curr 8.64 8.53
 http://www.capitaline.com

Take 2009 as a base year for calculating percentage

for 2009 and 2010 for caculating percentage for 2010
1st march 2010

Absolute change Percentage

INTERPRETATION OF

456.77 18.84 In comparative statements , we have made compa

-3.94 14.31 years, of each item to itself.
460.71 19.22
Sales turnover :- sales turnover of the company me
-3.67 8.3 this is not the actual sale value, there some deductio
-29.21 75.1 sales turnover of the company it shows better positio
427.83 17.25 change was approx Rs.456.77 and in percentage it w
increased i.e. 19.22 % Because in the 2009 the excis
55.08 5.87
RAW MATERIAL :- It is the basic need of every com
-1.2 3.27
engaged . As we clearly see the raw material of the c
42.92 27.74 because company 's sales was increased which lead
73.82 20.6 more and better raw material . The approxmatiely cha
137.15 31.95
14.72 15.28 POWER AND FUEL COST :- It was used in running
0 more production means more usage of power and fue
this company their was reduction in cost from previou
322.49 16.02
scale or it may some subsidies given by govt. in rega
105.34 22.56
-1.19 8.22 OTHER MANUFACTURING EXPENSES :- As we kn
106.53 23.54 manufacturing expenses also increases. The sameth
4.49 16.37 increased from their previous year for this they must
102.04 24 previous one. The overall manufacturing exp. increas
20 % .
42.18 88.8
6.51 1 OPERATING PROFIT :- The higher the Operating P
-6.59 258.43 Profit Margin shows the company can keep its costs
59.78 16 Profit Margin can also mean sales are increasing fast
-6.72 35.7 just jump from Rs 466.88 to Rs 572.22 difference with
66.5 18.74
DEPRECIATION :- The simple reason for increasing
-0.52 73.2
to more usage of machineries , tools etc.
105.71 32.7
0 OTHER ITEMS :- As we know the company was in ov
68.04 25.47 percentage in their shareholder dividend . Like they in
97.97 22.8
22.21 14.6 Coclusion - After doing analysis of profit and loss
profitability position of the company . So we can
0 0
net profit after deducting all the expenses and div
25 14.2 and Rs 526.91 in 2010 which is very good sign for
0.63 15.67
 profitability position of the company . So we can
net profit after deducting all the expenses and div
and Rs 526.91 in 2010 which is very good sign for

0.11 1.28

ating percentage.
for 2010
RPRETATION OF COMPARATIVE P & L A/C

ents , we have made comparison between past two years it may be for more than two
tself.

turnover of the company means the overall sale he made in a particular financial year . But
e value, there some deduction in the form of duty like excise duty . if we see the overall
mpany it shows better position of the company in the eyes of investor , govt. The absolute
456.77 and in percentage it was 18.84 % but after deduction the overall percentage as
ecause in the 2009 the excise duty was Rs 27.52 and in 2010 it was reduced to Rs 23.58.

the basic need of every company or industry to produce something in which they are
see the raw material of the comapny was increased from their previous years , it was just
les was increased which lead to more production for more production there is a need of
erial . The approxmatiely change in the raw material was Rs 55.08 .

ST :- It was used in running machines to produce goods . It varies with level of production
more usage of power and fuel and vice versa. But if we see the cost of power and fuel of
eduction in cost from previous year it may be due to that company produced goods at large
bsidies given by govt. in regard to power .

ING EXPENSES :- As we know if any comapny increase its production the overall
s also increases. The samething happen with this company the overall sales of the company
vious year for this they must increase his production which leads to higher expenses from
ll manufacturing exp. increases from 2009 to 2010 was Rs.73.82 and in percentage it was

The higher the Operating Profit Margin, the better. This is because a higher Operating
company can keep its costs under control (successful cost accounting). A higher Operating
ean sales are increasing faster than costs, and the firm is in a relatively liquid position, They
8 to Rs 572.22 difference with Rs 105.34.

simple reason for increasing depreciation was increasing production and sales which leads
neries , tools etc.

know the company was in overall profitable situation so they can easily increase some
eholder dividend . Like they increase equity dividend 175 to 200.

g analysis of profit and loss a/c of the company we come to know about their
the company . So we can say that company was doing well in the corporate world its
ng all the expenses and dividend to their shareholder they earn Rs 428.94 in 2009
which is very good sign for the company.
 the company . So we can say that company was doing well in the corporate world its
ng all the expenses and dividend to their shareholder they earn Rs 428.94 in 2009
which is very good sign for the company.
Common Size income Statement as on 31st march 2010
Industry :Personal Care - Indian - Large
(Rs in Crs)
Mar
   Year 10(12)  Percentage
  INCOME :
 Sales Turnover 2,880.45
   Excise Duty 23.58
  Net Sales 2,856.87 100
  Other Income 40.52 1.41
 Stock Adjustments 9.68 0.33
   Total Income 2,907.07 101.75
  EXPENDITURE :
 Raw Materials 992.21 34.73
  Power & Fuel Cost 35.43 1.24
 Employee Cost 197.62 6.91
  Other Manufacturing Expenses 432.15 15.12
 Selling and Administration Expenses 566.4 19.82
  Miscellaneous Expenses 111.04 3.88
 Less: Pre-operative Expenses Capitalised 0 0
   Total Expenditure 2,334.85 81.72
  Operating Profit 572.22 20.02
  Interest 13.28 0.46
  Gross Profit 558.94 19.56
  Depreciation 31.91 1.11
  Profit Before Tax 527.03 18.44
  Tax 89.66 3.13
 Fringe Benefit tax 0 0
  Deferred Tax 4.04 0.14
  Reported Net Profit 433.33 15.16
  Extraordinary Items 12.08 0.42
  Adjusted Net Profit 421.25 14.74
  Adjst. below Net Profit -0.19 0.01
  P & L Balance brought forward 428.94 15.01
  Statutory Appropriations 0 0
 Appropriations 335.17 11.73
   P & L Balance carried down 526.91 18.44
  Dividend 173.6 6.07
   Preference Dividend 0 0
  Equity Dividend % 200 7
   Earnings Per Share-Unit Curr 4.65 0.16
  Earnings Per Share(Adj)-Unit Curr
   Book Value-Unit Curr 8.64
 http://www.capitaline.com
 Interpretation
ch 2010 In common size statements, the sales figure is assumed to be 1
percentage of sales in the income statement. In the Balance Sh
liabilities is taken as 100 and all the figures are expressed as a p
past theory for comparison is called as trend analysis. Trend per
Mar some important items which can be logically connected with ea
09(12)  Percentage information for a number of years is taken up and one year, whi
as the base year. Each item of the base year is taken as 100 an
2,423.68 other years are calculated. 
27.52
Gross profit (or gross margin) percentage, is calculated either
2,396.16 100
or by subtracting the cost of goods sold percentage from 100%.
44.19 1.84 sales price that exceeds the cost of goods sold. It measures the
38.89 1.62 available to cover expenses other than cost of goods sold and t
2,479.24 103.46 % to 19.56 % .

937.13 39.1 Total expenditure

36.63 1.52 common-size income statement reflects the relationship betwee
154.7 6.45 administrative expenses and net sales. Managers have substan
358.33 14.95 percentages that increase over time are usually viewed with dis
429.25 17.91
96.32 4 Operating income and Net income
the two most important are the operating income percentage a
0 0
operating income percentage is an indicator of management’s s
2,012.36 83.98 numerator, operating income (or loss), excludes both interest ex
466.88 19.48 expenses are not directly affected by operating (buying and sel
14.47 0.6 percentage is a better reflection of how management handles th
452.41 18.88 net income percentage reflects the firm’s overall profitability, af
27.42 1.14 level of activity (net sales). Both ratios are indicators of a firm’s
424.99 17.73 company shows good growth in both the years . In 2009 it was 1
47.48 1.98 in operating profit. and in net income it was 17.9 % in 2009 and
6.51 0.27
-2.55 0.1
373.55 15.58
18.8 0.78
354.75 14.8
-0.71 0.02
FORMULA FOR CALCULATING COMMON
323.23 13.48
0 0 = INDIVIDUAL ITEM / S
267.13 11.14
428.94 17.9
151.39 6.31
0 0
 175 7.3
4.02 0.16

8.53 0.35
 re is assumed to be 100 and all figures are expressed as a
ent. In the Balance Sheet, the total of the assets or
s are expressed as a percentage of this total. Using the
nd analysis. Trend percentages are calculated only for
ally connected with each other. Under this technique,
up and one year, which is usually the first year, is taken
ear is taken as 100 and on that basis, the percentage for

e, is calculated either by dividing gross profit by net sales

ercentage from 100%. It reflects the percentage of the
sold. It measures the percentage of revenue that is
st of goods sold and to contribute toward profits, i.e 18.88

he relationship between selling, general, and

anagers have substantial control over these costs, and
sually viewed with disfavor.

income percentage and the net income percentage. The

or of management’s success in operating the firm. The
cludes both interest expense and taxes. Because these
rating (buying and selling) decisions, the operating income
anagement handles the day-to-day affairs of the firm. The
overall profitability, after interest and taxes, relative to its
e indicators of a firm’s financial success. In both the Income
years . In 2009 it was 19.48 and in 2010 it was 20.02 % i.e .
as 17.9 % in 2009 and in 2010 it was 18.44 %.

ATING COMMON SIZE STATEMENT

IVIDUAL ITEM / SALE AS A BASE x 100
Common size Balancesheet as on 31st march.2010
Industry :Personal Care - Indian - Large
(Rs in Crs)
   Year Mar 10  Percentage
  SOURCES OF FUNDS :
 Share Capital 86.9 10.11
  Reserves Total 662.48 77.09
  Equity Share Warrants 0 0
   Equity Application Money 0 0
  Total Shareholders Funds 749.38 87.2
  Secured Loans 24.27 2.82
 Unsecured Loans 85.7 9.97
   Total Debt 109.97 12.79
  Total Liabilities 859.35 100
   APPLICATION OF FUNDS :
  Gross Block 687.23 79.97
 Less : Accumulated Depreciation 236.28 27.49
   Less:Impairment of Assets 0 0
 Net Block 450.95 52.47
   Lease Adjustment 0 0
 Capital Work in Progress 23.31 2.71
  Investments 348.51 40.55
  Current Assets, Loans & Advances
 Inventories 298.44 34.72
  Sundry Debtors 130.48 15.18
 Cash and Bank 163.91 19.07
  Loans and Advances 325.12 37.83
  Total Current Assets 917.95 106.8
   Less : Current Liabilities and Provisions
  Current Liabilities 432.06 50.27
 Provisions 440.1 51.21
   Total Current Liabilities 872.16 101.49
  Net Current Assets 45.79 5.32
  Miscellaneous Expenses not written off 2.74 0.31
  Deferred Tax Assets 23.82 2.77
   Deferred Tax Liability 35.77 4.16
  Net Deferred Tax -11.95 1.39
   Total Assets 859.35 100
 Contingent Liabilities 156.12
 http://www.capitaline.com
Mar 09  Percentage INTERPRETATION
86.51 9.83 Financial statements are critical in determining the financial heal
651.69 74.09 where we find information about a company's assets held and li
0 0 indicates how a company is performing at a specific period of tim
0 0 same as a regular balance sheet. In a common size balance shee
738.2 83.92 total assets. Knowing the accounting equation assets-liabilities=
common size balance sheet much easier. If you want to know if a
10.65 1.21
balance sheet makes for easy analysis when comparing one com
130.72 14.86
141.37 16.07 If we see the common size balancesheet of the company we can
879.57 100 the company was very good , they issued share capital more in 2
increases approxmatiely 77 % from 74 % . The company raise th
518.77 58.97 unsecured loans but in 2010 company company only raise their f
210.45 23.92 unsecured loans , Thats why their overall debt reduced to Rs 859
0 0 say that the overall position of the company was very good they
their liabilities and purchase more fixed assets from previous ye
308.32 35.05
expand their business in future . but company didnt invest mone
0 0 they didnt earn sufficient return which reduces their cash balanc
51.71 5.87
436.9 49.67

261.72 29.75
112.36 12.77
143.69 16.33
227.28 25.83
745.05 84.7

331.21 37.65
332.89 37.84
664.1 75.5
80.95 9.2
8.64 0.98
23.54 2.67
30.49 3.46
-6.95 0.79
879.57 100
162.41
 ing the financial health of a company. The balance sheet is
y's assets held and liabilities owed. A balance sheet
specific period of time. A common size balance sheet is the
mon size balance sheet values are listed as a percentage of
on assets-liabilities=owner's equity, makes reading the
you want to know if a company is thriving, the common size
n comparing one company to another.

the company we can say that overall financial position of

hare capital more in 2010 than 2009 and also their reserve
The company raise their funds through secured loans and
pany only raise their funds through secured loans not from
bt reduced to Rs 859.35. After doing analysis of assets we
was very good they have sufficient liquid assets to pay
ets from previous year it may be due to they want to
ny didnt invest money their money in securities from which
ces their cash balance.
Comparative size Balancesheet as on 31st march.2010

   Year Mar 10  Mar 09  Absolute change

  SOURCES OF FUNDS :
 Share Capital 86.9 86.51 0.39
  Reserves Total 662.48 651.69 10.79
  Equity Share Warrants 0 0 0
   Equity Application Money 0 0 0
  Total Shareholders Funds 749.38 738.2 11.18
  Secured Loans 24.27 10.65 13.62
 Unsecured Loans 85.7 130.72 -45.02
   Total Debt 109.97 141.37 -31.4
  Total Liabilities 859.35 879.57 -20.22
   APPLICATION OF FUNDS :
  Gross Block 687.23 518.77 168.46
 Less : Accumulated Depreciation 236.28 210.45 25.83
   Less:Impairment of Assets 0 0 0
 Net Block 450.95 308.32 141.68
   Lease Adjustment 0 0 0
 Capital Work in Progress 23.31 51.71 -28.4
  Investments 348.51 436.9 -88.39
  Current Assets, Loans & Advances
 Inventories 298.44 261.72 36.72
  Sundry Debtors 130.48 112.36 18.12
 Cash and Bank 163.91 143.69 20.22
  Loans and Advances 325.12 227.28 97.84
  Total Current Assets 917.95 745.05 172.9
   Less : Current Liabilities and Provisions
  Current Liabilities 432.06 331.21 100.85
 Provisions 440.1 332.89 107.21
   Total Current Liabilities 872.16 664.1 208.06
  Net Current Assets 45.79 80.95 -35.16
  Miscellaneous Expenses not written off 2.74 8.64 -5.9
  Deferred Tax Assets 23.82 23.54 0.28
   Deferred Tax Liability 35.77 30.49 5.28
  Net Deferred Tax -11.95 -6.95
   Total Assets 859.35 879.57 -20.22
 Contingent Liabilities 156.12 162.41
h.2010

INTERPRETATION
Percentage
SHARE CAPITAL :- Company raise their share capital from prv
0.45 behind the issuing more capital may be they want to expand to
1.66 RESERVE TOTAL :- Reserves are created to pay future liabilities,
company from their profits . Company usally retain some part o
2010 company reserves are increased to Rs 662.48 from Rs 651
1.51 10.79.
127.89 LOANS :- Secured loans are those loans which is secured with s
-34.44 loan amount. It increase the liabilities of the company but also i
-22.21 2010 company was mostly dependent upon loans funds because
-2.3 business and also they getting loans easily because of good ima
money lenders.
32.47
FIXED ASSETS :- These are capital in nature for the company ,
12.27
can start their production . company purcahses more fixed asse
absolutechange was Rs 168.46 reason behind it they expand the
45.95
produce more goods .
-54.92 CURRENT ASSETS :- Thses assets play an very important role
-20.23 these they cann't pay their liabilities , purchase aseets , pay div
current aseests position of the company we can say that from 2
14.03 current assets with an absolute change Rs 172.9 Comapny debt
16.13 sell their goods on credit to their customers which is not very go
14.07 should given more emphasis on cash sale which leads to increas
43.05
23.21

30.45
32.21
31.33
-43.43
-68.29
1.19
17.32
0
-2.3
0
are capital from prvious year by Rs 0.39 reason
want to expand to their business .
ay future liabilities, these reserves are created by
y retain some part of their profits as a reserve . In
662.48 from Rs 651.69 with an difference of

ch is secured with some security as against the

company but also increase their cash position. In
loans funds because they want to expand their
because of good image in the eyes of investors or

e for the company , without fixed assests nobody

ses more fixed assets in 2010 than in 2009 and
d it they expand their business or they want to

very important role in any company without

ase aseets , pay dividend etc. As we see the
can say that from 2009 there was increase in
72.9 Comapny debtors are increasing means they
which is not very good sign for the company they
hich leads to increase their cash position.
Industry :Personal Care - Indian -
Large
(Rs in Crs)
INTERPRETATIONS O
Year 10-Mar 9-Mar
Sources of Funds Cash profit : - The comp
Cash profit 459.16 394.23 very good , it works on th
Increase in equity 0.25 0.11
Increase in other networth 0 0 Increase in equity :- Th
Increase in loan funds 0 124.03 expand its business or ma
Decrease in gross block 0 0
Decrease in investments 88.39 0 Increase in loan funds
liabilities but in 2010 the
Decrease in working capital 40.16 0
company. In other word w
Others 6.04 5.31
Total Inflow 594 523.68 Decrease in investmen
implies that , the compna
Application of funds shares of other compnay
also enhance their cash p
Cash loss 0 0
Decrease in networth 248.94 12.39 Decrease in working ca
Decrease in loan funds 31.4 0 Company has sufficent liq
Increase in gross block 139.43 86.28
INTERPRETATIONS OF A
Increase in investments 0 166.53
Increase in working capital 0 107.09 Increase in gross block
Dividend 173.6 151.39 and 139.43 in 2010 , the
Others 0.63 0
Total Outflow 594 523.68 Decrease in loan funds
 http://www.capitaline.com 1. Company used his loan
borrow money.
2. Company used his loan

Dividend :- From the pre

cash profit than previous
the mind of shareholder a
INTERPRETATIONS OF SOURCES OF FUNDS

Cash profit : - The company's cash profit from 2009 to 2010 is increasing . It implies that company's o
very good , it works on their maximum level .

Increase in equity :- The company raise its equity from its previous year by 0.14 Rs. it may be due to
expand its business or may be due to purcahse some assests for the company .

Increase in loan funds :- In previous year company mostly dependent upon loan from their lenders w
iabilities but in 2010 the company doesnt want to expand their business or regarding some purchasing
company. In other word we can say that in 2010 company not dependent upon loans.

Decrease in investment :- In previous year investment level of the compnay was zero but in 2010 it
mplies that , the compnay invest his money in some other company's share or may be in govt. securit
shares of other compnay from where they earn return which was giving benefit to the company to mee
also enhance their cash position.

Decrease in working capital :- In short we can say that was well capable of meeting their day to day
Company has sufficent liquid assests to meet their expenses i.e. day to day expenses or liabilities.

INTERPRETATIONS OF APPLICATION OF FUNDS

Increase in gross block :- From the previous year the gross block of the company has increased whic
and 139.43 in 2010 , the reason behind this company purchased new fixed assests to expand their bus

Decrease in loan funds :- There may be two reason behind the dec. in loan funds which are given be
1. Company used his loan funds to meet their liabilities but it also increased his liabilities from which th
borrow money.
2. Company used his loan funds to purchase new assests .

Dividend :- From the previous year , company giving more dividend to their shareholder because com
cash profit than previous year . So they can easily distribute more dividend from previous year. It aslo
the mind of shareholder and security also.
es that company's operating efficiency is

Rs. it may be due to company wants to

from their lenders which enhance their

ng some purchasing assests for the
s.

zero but in 2010 it was 88.39 which

y be in govt. securities or purchase some
he company to meet their liabilities and

ting their day to day expenses .

es or liabilities.

has increased which was 86.28 in 2009

to expand their business .

which are given below:-

ilities from which they

older because company has now more

evious year. It aslo build confidence in
Industry :Personal Care - Indian - Large
(Rs in Crs)
10-Mar 9-Mar
Cash Flow Summary
Cash and Cash Equivalents at Beginning of the year 151.84 68.26
Net Cash from Operating Activities 481.49 323.57
Net Cash Used in Investing Activities -267.54 -238.38
Net Cash Used in Financing Activities -201.88 -9.77
Net Inc/(Dec) in Cash and Cash Equivalent 12.07 75.42
Cash and Cash Equivalents at End of the year 163.91 143.68

 Intranet Version of Capitaline Corporate Databases

Cash from investing: Some businesses will invest outside their core operations or acqu
Interpretation: This portion of the cash flow statement accounts for cash used to make new
investments. But if we see the position of this company it shows very bad sign because wh
share or in some securities they didn't get any earn return from that in both the years their
2009 it was Rs 238.38 and in 2010 it was Rs 267.54. In nut shell they nothing earn from the

Cash from financing: This last section refers to the movement of cash from financing a
loan or issuing stock to new investors. Dividends to current investors also fit in here.
Interpretation: Investors will like these last two items, since they reap the dividends, and it s
and wants to keep it for the company’s gain. A simple formula for this section: cash from iss
acquire stock.

Conclusion :- After doing analysis of cash flow statement of company ,we come to know th
activities due to their operating efficiency but they didnt earn from their remaining activitie
reduction in cash balance from their previous year. which is Rs 75.42 in 2009 to Rs 12.07 in
 INTREPRETATION
The cash flow statement discloses how a company raised money and how it spent those
an analytical tool, measuring an enterprise’s ability to cover its expenses in the near term
consistently bringing in more cash than it spends, that company is considered to be of go
A cash flow statement is divided into three parts: operations, investing and financing.

Cash from operations: This is cash that was generated over the year from the com
Note how the statement starts with net earnings and works backward, adding in deprecia
accounts receivable. In simple terms, this is earnings before interest and taxes (EBIT) plu
Interpretation:This may serve as a better indicator than earnings, since noncash earning
say that operating efficiency of the company was very good , they generate more cash
proper their resources in planned way which leads to more cash from operating activitie

core operations or acquire new companies to expand their reach.

sh used to make new investments, as well as proceeds gained from previous
bad sign because whatever they invest their money in some other company's
n both the years their cash balance from their return was in negative i.e . in
nothing earn from their investing activities.

f cash from financing activities. Two common financing activities are taking on a
also fit in here.
the dividends, and it signals that Target is confident in its stock performance
section: cash from issuing stock minus dividends paid, minus cash used to

y ,we come to know that company is generating cash only from their operating
heir remaining activities i.e. investing and financing which leads to their
n 2009 to Rs 12.07 in 2010.
 how it spent those funds during a given period. It is also
nses in the near term. Generally speaking, if a company is
nsidered to be of good value.
g and financing.

e year from the company’s core business transactions.

, adding in depreciation and subtracting out inventory and
and taxes (EBIT) plus depreciation minus taxes.
ce noncash earnings can’t be used to pay off bills. We can
enerate more cash from their previous year , they utilise
operating activities i.e Rs 151.84 in 2010.
MEANING OF ACCOUNTING RATIO:
A ratio is a mathematical relationship between two related items expressed in quan
calculate a Ratio. One number is put as a numerator and the other as a denominato
variables expressed in either percentage or in multiples or in periods. Ratio helps in
performance of the firm can be gauged from four angles
Profitability
Liquidity
Asset Efficiency
Solvency
The overall performance of firm is a function of these factors and we can say that pr
depends upon efficient utilization of asset, which is managed only through well form
 
OBJECTIVES OF RATIO ANALYSIS
1 Helps in identification of significant accounting data relationship
2 Simplifies financial statements
3 Helps in planning and forecasting
4 Helps in simplifying accounting figures
5 Helps in Inter-firm comparison
6 Helps the investor to evaluate their investment
7 Helps the marketing manager to evaluate the sale and return from it
 
 
CLASSIFICATION OF RATIOS
The particular purpose of a user is determining the particular ratios that might be used for f
as under:

1 LIQUIDITY RATIOS
Current ratio
Quick ratio
Absolute liquid ratio
 
2 PROFITABILITY RATIOS
Gross Profit Ratio
Net Profit Ratio
Operating Ratio
Return on Investment
Return on Equity
Earning per share
 
3 TURNOVER/ACTIVITY/EFFICIENCY RATIOS
Inventory Turnover Ratio
Debtors Turnover Ratio
Creditors Turnover Ratio
 
4 SOLVENCY RATIOS
Debt to equity ratio
Interest Coverage Ratio
Debtors Turnover Ratio
Creditors Turnover Ratio
 
4 SOLVENCY RATIOS
Debt to equity ratio
Interest Coverage Ratio
 expressed in quantitative form. Two numbers are needed to
er as a denominator. Ratio refers to relationship between two
iods. Ratio helps in analyzing the financial performance of firm. The

we can say that profitability depends upon liquidity and liquidity

y through well formulated capital structure.

rom it

at might be used for financial analysis. Ratios are generally classifieds are
Key ratios of company

LIQUIDITY RATIOS
Current ratio = Current assets / Current liabilities
For 2009 = 745.05 / 664.1
= 1.12 : 1
For 2010 = 917.95 / 872.16
= 1.05 : 1

Quick ratio = Cash in hand + Cash at bank - (Prepaid expenses + St

liabilities
For 2009 = 143.69 / 664.1
= 0.21 :1
For 2010 = 163.91 / 872.16
= 0.18 :1

WORKING CAPITAL CYCLE

Debtor turnover ratio =Net Sale or Cost of goods sold / Average Debtor Or Deb
For 2009 = 2396.16 / 112.36 ( Only Debtor )
= 21.32 times
For 2010 = 2856.87 / 121.42 ( Avg. Dr. )
= 23.52 times
Avg. debtors = Opening Dr + Closing Dr / 2

Collection period = No. of days ( 365 ) / Debtor turnover ratio

For 2009 = 365 / 21.32
= 17 days approx.
For 2010 = 365 / 23.52
= 15 days approx.

Inventory turnover ratio = Cost of goods sold / Average inventory

For 2009 = 1929.28 / 261.72 ( Only 2009 stock )
= 7.37 times
For 2010 = 2297.93 / 280.08 ( avg inventory value )
= 8 times

Days inventory = 365 / Inventory turnover ratio

For 2009 = 365 /7
= 52 days
For 2010 = 365 /8
= 46 days

OPERATING RATIOS
Operating profit ratio = Operating profit / Sale x 100
For 2009 = 466.88 / 2423.68 x 100
= 19.26 %
For 2010 = 572.22 / 2880.45 x 100
= 19.86 %
 = 46 days

OPERATING RATIOS
Operating profit ratio = Operating profit / Sale x 100
For 2009 = 466.88 / 2423.68 x 100
= 19.26 %
For 2010 = 572.22 / 2880.45 x 100
= 19.86 %

Net profit = Net profit / Net sales

For 2009 = 428.94 / 2396.16 x 100
= 18 %
For 2010 = 526.91 / 2856.87 x 100
= 18.44 %

Operating ratio = Operating expenses / Net sales

For 2009 = 429.25 / 2396.16
= 0.17 :1
For 2010 = 566.4 / 2856.87
= 0.19 : 1

LEVERAGE RATIOS

Debt to equity ratio = Debt / Owners Equity

For 2009 = 603.3 / 738.2
= 81.72 : 1
For 2010 = 627.73 / 749.38
= 83.76 : 1

Interest coverage ratio = EBITDA / Interest expenses

for 2009 = 466.88 / 14.47
= 32.26
For 2010 = 572.22 / 13.28
= 43 : 1

Funded debt to total capitalisation ratio = Funded debt / total capital

For 2009 = 141.37 /879.57 X 100
= 16.07 %
For 2010 = 109.97 / 859.35 X 100
= 12.79 %

Proprietory Ratio or Equity ratio = Shareholders funds / Total assests

For 2009 = 738.2 / 879.57
=0.83
For 2010 = 749.38 /859.35
= 0.87

Overall Profitability Ratio

Return on Shareholder investment = NP after int. and taxes / Shareho
For 2009 = 428.94 / 738.2 X 100
= 58.10 %
For 2010 = 526.91 / 749.38 X 100
= 70.31 %
Overall Profitability Ratio
Return on Shareholder investment = NP after int. and taxes / Shareho
For 2009 = 428.94 / 738.2 X 100
= 58.10 %
For 2010 = 526.91 / 749.38 X 100
= 70.31 %
paid expenses + Stock) / Current

Average Debtor Or Debtor + Bills Recieveable

nover ratio

rage inventory

e)

tio

00
00

es

debt / total capitalisation X 100

nds / Total assests

and taxes / Shareholders funds X 100

and taxes / Shareholders funds X 100
LIQUIDITY RATIOS

CURRENT RATIO
These values come from your balance sheet and are a measure of your liquidity. Your current ratio in
greater your “cushion.” Although a satisfactory value for a current ratio varies from industry to indus
smaller current ratio may mean that you have successfully negotiated to pay your suppliers later tha
the current ratio of this company we can easily say that company's position was not good because t
current assets to meet their liabilities properly.
QUICK RATIO
This is a slightly more conservative measure of liquidity because it uses only your available cash and
shortterm debt. Also called Acid-Test Ratio, this is very similar to your current ratio but it includes on
receivable. The quick ratio excludes inventory, which must first be sold and the cash collected before
never converted to cash. They are simply assets you paid for in advance. As a result, the quick ratio
situation.RULE OF THUMB FOR QUICK RATIO IS 1:1. The company should try to maintain this rat
position is not good to meet their liabilities in crunch situation.

WORKING CAPITAL CYCLE RATIO'S

DEBTOR TURNOVER RATIO

(Sales/Receivables Ratio) Measures number of times AR turns over during the period. Higher
consideration seasonal fluctuations nor a large proportion of cash sales compared to total sa
If we take the Debtors turnover in terms of days which is approx. 17 days in 2009 and in 20
in terms of cash collections from their debtors because company collect cash in just within 1

CREDITORS TURNOVER RATIO

CTR = Cost of goods sold / average creditors
= 1943.75 / 331.21
= 5.86 ( 2009 )
CTR= Cost of goods sold / Average Creditors
= 229.97 / 381.35
= 6.02 (2010)
Payment period = 365 / CTR
= 365 / 5.86
= 62 days. for 2009
For 2010 = 365 / 6.02
= 60 days.
The average payment period ratio represents the number of days by the firm to pay its cred
are being paid promptly. This situation enhances the credit worthiness of the company. Howe
advantage of credit facilities allowed by the credit. If we see the creditors turnover ratio of th
not so good . The company made his payment in approx 3 months to their suppliers which is

INVENTORY TURNOVER RATIO

Number of times inventory turns in period. High turn can indicate better liquidity or good merchandis
to inaccurate sales forecast – can also a planned inventory build-up in anticipation of possible mater
ratio in days it can be approx. 54 days in 2009 and 46 days in 2010 which is very good for the comp

OPERATING RATIO'S
not so good . The company made his payment in approx 3 months to their suppliers which is

INVENTORY TURNOVER RATIO

Number of times inventory turns in period. High turn can indicate better liquidity or good merchandis
to inaccurate sales forecast – can also a planned inventory build-up in anticipation of possible mater
ratio in days it can be approx. 54 days in 2009 and 46 days in 2010 which is very good for the comp

OPERATING RATIO'S

GROSS PROFIT RATIO

FORMULA = Gross profit / Sales x 100
For 2009 = 452.41 / 2396.16 x 100
= 18.88 %
For 2010 = 558.94 / 2856.87 x 100
= 19.56 %
Gross profit ratio may be indicated to what extent the selling prices of goods per unit may b
produces its products. As the gross profit is found by deducting cost of goods sold from net s
vary from business to business. However, the gross profit earned should be sufficient to reco
and dividends.

OPERATING PROFIT MARGIN

This value measures the percent of revenue remaining after paying all operating expenses (
all operating expenses) divided by your gross sales expressed as a percentage.

NET PROFIT RATIO

The net income divided by your gross sales, expressed as a percentage. The company’s afte
earns per dollar or Rs of sales. Interpretation is similar to profit margin, the aftertax profit m
often doesn't tell the entire story… Profit can increase, but it does not mean that its profit m
a lower profit margin then had been seen with a lower profit. In nutshell we can say that the
lowest cost.

OPERATING RATIO
This ratio shows management efficiency by comparing your operating expenses to your net
revenue decreases. This ratio; however, does not take into account any debt repayment or d

LEVERAGE RATIO'S
INTEREST COVERAGE RATIO
Indicates what portion of debt interest is covered by your company’s cash flow situation. A r
pay its interest expenses. Ideally you want the ratio to be over 1.5. In both the years , the in
from their profits.

DEBT TO EQUITY RATIO

Also called Debt to Worth, this ratio compares the total liabilities of your business to your tot
your balance sheet). It indicates what proportion of equity and debt your company is using t
Low indicates greater long-term financial safety and/or flexibility to borrow.

Funded debt to total capitalisation ratio = Funded debt / total capitali

A variation of the debt-to-equity ratio, this value computes the proportion of your company's
amount of your leverage and compare it to others to help analyze your company's risk expo
considered riskier than those with lower leverage ratios. Up to 50 or 55 % it was tolerable bu

Proprietory Ratio or Equity ratio = Shareholders funds / Total assests

Generally this ratio was calculate to see what portion or amount of shareholder funds was us
position of the company but the position of this company was not so good because of low ra
Funded debt to total capitalisation ratio = Funded debt / total capitali
A variation of the debt-to-equity ratio, this value computes the proportion of your company's
amount of your leverage and compare it to others to help analyze your company's risk expo
considered riskier than those with lower leverage ratios. Up to 50 or 55 % it was tolerable bu

Proprietory Ratio or Equity ratio = Shareholders funds / Total assests

Generally this ratio was calculate to see what portion or amount of shareholder funds was us
position of the company but the position of this company was not so good because of low ra

OVERALL PROFITABILITY

Return on sahreholder investment

Basically, ROE shows how much profit your company generates from a given level of shareholder inv
your industry. ROE may also be calculated by dividing net income by average shareholders' equity. C
the end of the period, then divide by two. You may also want to calculate the change in ROE for a pe
shareholders’ equity at the end of the period as the denominator. Calculating both beginning and en
 Interpretation

r liquidity. Your current ratio indicates your ability to pay your current debt out of your current assets. The highe
o varies from industry to industry, a general rule of thumb is that a current ratio of 2 to 1 or greate
to pay your suppliers later than the usual 30 days. Now according to Rule Thumb of current ratio which is 2 to
sition was not good because there liabilities increased as much as current assest increased approx . So they ha

es only your available cash and accounts receivable in the equation.. A value < 1:1 implies “dependency” on inv
current ratio but it includes only those current assets that can be most readily used to pay bills today: cash and
d and the cash collected before it can be used to pay liabilities. It also excludes current assets like prepaid expe
ce. As a result, the quick ratio is a good indication of how well you are able to meet your current liabilities in a c
should try to maintain this ratio , but if we see company ' s ratio in both years they are less than 1 which implie

er during the period. Higher the turn, shorter the time between sale and collection of the cash. Does n
h sales compared to total sales.
. 17 days in 2009 and in 2010 it was 15 days, then we can conclude that the company's position was g
y collect cash in just within 17 to 15 days from their debtors.

s by the firm to pay its creditors. A high creditors turnover ratio or a lower credit period ratio signifies t
hiness of the company. However a very favorable ratio to this effect also shows that the business is not
creditors turnover ratio of the company we can say that , the overall position regarding their payment
hs to their suppliers which is not entertained to their creditors .

er liquidity or good merchandising or shortage of needed inventory for sales. Low turn can mean overstocking, o
anticipation of possible material shortages. You still need to take seasonal fluctuations into account. If we see t
which is very good for the company.
hs to their suppliers which is not entertained to their creditors .

er liquidity or good merchandising or shortage of needed inventory for sales. Low turn can mean overstocking, o
anticipation of possible material shortages. You still need to take seasonal fluctuations into account. If we see t
which is very good for the company.

ces of goods per unit may be reduced without incurring losses on operations. It reflects efficiency with
ost of goods sold from net sales, higher the gross profit better it is. There is no standard GP ratio for e
d should be sufficient to recover all operating expenses and to build up reserves after paying all fixed in

ng all operating expenses (Operating Income). The operating profit margin is your operating income (g
a percentage.

entage. The company’s after-tax profit margin tells you (and investors) the percentage of money your
margin, the aftertax profit margin is more stringent as it takes into account taxes. Looking at the earnin
s not mean that its profit margin is improving. For example, if company increases sales, and if costs al
nutshell we can say that their is need to control the overall cost little bit more so that company can ear

ating expenses to your net sales. The smaller the ratio, the greater your company’s ability to generate
unt any debt repayment or debt increase. In both the years the company is well capable in generating

ny’s cash flow situation. A ratio below 1 means that your company is having problems generating eno
.5. In both the years , the interest coverage ratio of company is very good they can easily cover his in

of your business to your total owners’ equity or net worth (the value of your total assets minus your to
ebt your company is using to finance assets. Also, it expresses a degree of protection provided by own
to borrow.

ed debt / total capitalisation X 100

roportion of your company's long-term debt compared to your available capital. Investors use this ratio
e your company's risk exposure. Generally, companies who finance a greater portion of their capital vi
0 or 55 % it was tolerable but not beyond for the company.

funds / Total assests

of shareholder funds was used to finance their assets , it was considered higher the ratio means bette
t so good because of low ratio.
ed debt / total capitalisation X 100
roportion of your company's long-term debt compared to your available capital. Investors use this ratio
e your company's risk exposure. Generally, companies who finance a greater portion of their capital vi
0 or 55 % it was tolerable but not beyond for the company.

funds / Total assests

of shareholder funds was used to finance their assets , it was considered higher the ratio means bette
t so good because of low ratio.

given level of shareholder investment. The ROE is useful for comparing the profitability of your company to tha
verage shareholders' equity. Calculate by adding the shareholders’ equity at the beginning of the period to sha
ate the change in ROE for a period, first by using shareholders’ equity at the start of the period as the denomina
ulating both beginning and ending ROE enables you to determine the change in profitability over the period.
 ent assets. The higher the ratio, the
o of 2 to 1 or greater is fairly healthy. A
nt ratio which is 2 to 1 , if we compare
d approx . So they have not sufficent

“dependency” on inventory to liquidate

bills today: cash and accounts
ets like prepaid expenses, which are
urrent liabilities in a crunch
s than 1 which implies , that company's

of the cash. Does not take into

any's position was good in both years

eriod ratio signifies that the creditors

the business is not taking the full
ding their payments to creditors was

mean overstocking, obsolescence, builds

o account. If we see their Inventory
 mean overstocking, obsolescence, builds
o account. If we see their Inventory

ects efficiency with which a firm

ndard GP ratio for evaluation. It may
er paying all fixed interest  charges

operating income (gross profit minus

age of money your company actually

ooking at the earnings of a company
ales, and if costs also rise, you’ll have
at company can earn more profit at

s ability to generate a profit if

pable in generating profit.

ms generating enough cash-flow to

n easily cover his interest expenses

assets minus your total liabilities from

on provided by owners for creditors.

vestors use this ratio identify to

on of their capital via debt are

e ratio means better long term

vestors use this ratio identify to
on of their capital via debt are

e ratio means better long term

your company to that of other firms in

g of the period to shareholders’ equity at
riod as the denominator and then using
y over the period.
COST SHEET OF DABUR

PARTICULARS 2009
Raw material 937.13
PRIME COST (A) 937.13

Power and fuel cost 36.63

Employee cost 154.7
Other manufacturing expenses 358.33

FACTORY COST (B) 549.66

TOTAL ( A + B ) 1486.79

Selling and administration overhead 429.25

SELLING COST TOTAL 1916.04

PROFIT 507.64

SALES 2,423.68
 2010 INTREPERTATION
992.21 It consists of direct material, direct wages and direct expenses. In other w
992.21
aggregate of cost of material consumed, productive wages, and direct exp

35.43 basic, first, flat or direct cost of a product.

197.62
Prime Cost = Direct material + Direct Wages + Direct expenses
432.15
Direct material means cost of raw material used or consumed in productio
665.2
the material purchased in a particular period is used in production. There i

1657.41 balance at opening and closing of the period. Hence, it is necessary that t
is adjusted in the material purchased. Opening stock of material is added
the material purchased and we get material consumed or used in producti
566.4 raw material in 2010 it may be due to they want to increase their producti
2010.
2223.81 In addition to prime cost it includes works or factory overheads. Factory ov
indirect wages, and indirect expenses incurred in the factory. Factory cost
manufacturing cost. The work cost of the company is increase from Rs 549
656.64 their production for that their indirect expenses should be increased.
If office and administrative overheads are added to factory or works cost,
In nut shell we can say that due to increase their production their expense
2,880.45 earn more profit in 2010 than in 2009.
ect expenses. In other words “Prime cost represents the

ve wages, and direct expenses”. It is also known as

rect expenses

r consumed in production. It is not necessary that all

ed in production. There is some stock of raw material in

ce, it is necessary that the cost of opening and closing stock of material
ock of material is added and closing stock of raw material is deducted in
umed or used in production of a product. The company purchase more
o increase their production because company sales are increasing in

ry overheads. Factory overheads consist of cost of indirect material,

the factory. Factory cost is also known as works cost, production or
y is increase from Rs 549.66 to Rs 665.2 due to they want to increase
hould be increased.
o factory or works cost, total cost of production is arrived at.
production their expenses are also increases but apart from that they
 TREND ANALYSIS

YEAR SALE % COST OF GOODS SOLD %

2009 2,396.16 100 1943.75 100

2010 2,856.87 119 2297.93 118

INTERPRETATION
Each year’s amounts will be divided by the 2001 amounts and
percentage will be presented.
As we see the trend analysis of the company we intrepret tha
sale was 119 % of 2009 and in cost of goods sold it was 118
that comapny was expand their business or it may be due to
personally think that company should try to reduce their cost
earn more profit as we see in 2010 company's net profit was
which is not very huge But we cannt denied that company did
profit . But they should try to reduce their cost.
 PROFIT %
428.94 100

526.91 123

001 amounts and the resulting

we intrepret that in 2010 the

sold it was 118 % we can say
may be due to the inflation . I
educe their cost so that they can
s net profit was 123 % as of 2009
hat company didnt earn any
t.