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COMPARATIVE FINANCIAL ANALYSIS vs.
1. Introduction 2. Company Profiles 3. Ratio Analysis 1 4. The cost of Capital 5. The working capital Model CONTENTS
2 1. Introduction The Objective of our project is to analyze the financial performance in the last 5 years; of two competing firms in the same field of business. ,[object Object],[object Object],[object Object],[object Object],Scope of Analysis vs.  1 1 2
Dabur India Limited is the fourth largest FMCG Company in India. Dabur operates in key consumer products categories like Hair Care, Oral Care,  Health Care, Skin Care, Home Care & Foods. 2. Company Profiles ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Master brands 3
2. Company Profiles ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Master brands 4 Godrej Consumer Products (GCPL) is a leader among India's  Fast Moving Consumer Goods companies, with Personal and  Home Care Products. Their brands, which include Cinthol,  No. 1, Expert and Ezee, among others, are  household names across the country.
Ratio Analysis 5
6 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Current Ratio Quick Ratio 1.12 0.95 1.11 0.93 0.78 2.04 2.5 1.54 1.24 1.13 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 0.73 0.6 0.67 0.55 0.38 1.6 1.87 0.89 0.71 0.64
7 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Cash Ratio Gross profit Ratio 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 0.22 0.12 0.14 0.12 0.03 0.14 0.93 0.11 0.06 0.06 17.8 17.11 16.91 17.37 45.03 0.14 0.93 0.11 0.06 0.06
8 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Net Profit Ratio Debt-equity Ratio 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 15.59 15.2 14.18 13.77 11.67 14.22 16.5 15.95 18.28 15.2 0.19 0.03 0.05 0.05 0.14 0.12 0.89 1.02 0.06 0.12
9 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Inventory-turnover Ratio Debtors-Turnover Ratio 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 10.94 12.52 11.11 11.65 9.64 9.25 5.7 6.53 7.54 7.67 22.63 25.94 39.7 35.3 26.95 99.37 81.1 93.26 112.08 61.07
3. Ratio Analysis DABUR GODGEJ Fixed Assets turnover Ratio 10 2008-09 2007-08 2006-07 2005-06 2004-05 4.84 4.67 8.51 7.3 7.41 4.18 4.6 9.47 11.82 8.34
The Cost Of Capital 11
12 4. The cost of capital Cost Of Equity Cost Of capital Cost Of Debt
13 DABUR GODREJ Cost Of Debt 4. Cost of CAPITAL 10.0% 8.33%
14 Cost Of Equity 1. CAPM:  k s = k RF  + (k M  - k RF )b = k RF  + (RP M )b 2. DCF:  k s  = D 1 /P 0  + g 4. Cost of capital
15 Cost Of Equity DABUR GODREJ B =0.48 Risk free return=8.0% Market Return =15.0% Risk Premium =7.0% B= 0.39 Risk free return =4.91% Market return = 20% 4. Cost of capital 11.4% 10.79%
15 Weighted Average Cost of Capital 4. Cost of capital DABUR 11.00%
The Working Capital Model 11
15 5. The working capital Model The short term operating activities of the firm & their impact on cash & working capital
15 5. The working capital Model THE OPERATING CYCLE & THE CASH CYCLE - Short Term Operating Activities : How to collect cash Collecting cash  5 Offer cash / credit term to the customer Selling the product 4 Choice of production technology Manufacture the product 3 To borrow / draw down cash balance Paying cash & purchases 2 How much inventory to order Buying raw-material 1
12 DABUR GODGEJ 5. The working capital Model Inventory   Beg 20114.69 End 26171.64     A/C Receivables   Beg 10046.43 End 11236.01     A/c Payables   Beg 17289.1 End 19384.87     Net Sales 239616.39     Cogs 196953.07 Inventory   Beg 19771.19 End 9355.62     A/C Receivables   Beg 14873.23 End 16099.98     A/c Payables   Beg 18.95 End 47.17     Net Sales 81623.72     Cogs 86745.94
13 5. The working capital Model   Dabur Godrej Avg Inventory 23143.16 14563.4 Inventory turnover 8.5 times 5.95 times Inventory pd 42.9 61.3       Avg Receivables 10641.22 15486.6 Receivables turnover 22.51 times 5.27 times Receivables pd 16.21 69.25       Avg payables 18336.98 33.06 Payables turnover 10.7 times 2623 8 times Payables pd 34.11 0.139
14 Inventory Period 42.9 Receivable Period 16.21 Operating Cycle 59.11 days + Operating Cycle 59.11 A/c Payable period 34.11 Cash Cycle 25 days = = Inventory Period 61.3 Receivable Period 69.25 Operating Cycle 130.55 days + Operating Cycle 130.55 A/c Payable period 0.139 Cash Cycle 130 days = = DABUR GODREJ 5. The working Capital Model
18 PRESENTED BY: NEHA LUTHRA  &  SAHINA PURI

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Finacial comparison Godrej & Dabur

  • 2. 1. Introduction 2. Company Profiles 3. Ratio Analysis 1 4. The cost of Capital 5. The working capital Model CONTENTS
  • 3.
  • 4.
  • 5.
  • 7. 6 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Current Ratio Quick Ratio 1.12 0.95 1.11 0.93 0.78 2.04 2.5 1.54 1.24 1.13 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 0.73 0.6 0.67 0.55 0.38 1.6 1.87 0.89 0.71 0.64
  • 8. 7 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Cash Ratio Gross profit Ratio 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 0.22 0.12 0.14 0.12 0.03 0.14 0.93 0.11 0.06 0.06 17.8 17.11 16.91 17.37 45.03 0.14 0.93 0.11 0.06 0.06
  • 9. 8 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Net Profit Ratio Debt-equity Ratio 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 15.59 15.2 14.18 13.77 11.67 14.22 16.5 15.95 18.28 15.2 0.19 0.03 0.05 0.05 0.14 0.12 0.89 1.02 0.06 0.12
  • 10. 9 3. Ratio Analysis DABUR GODGEJ DABUR GODGEJ Inventory-turnover Ratio Debtors-Turnover Ratio 2008-09 2007-08 2006-07 2005-06 2004-05 2008-09 2007-08 2006-07 2005-06 2004-05 10.94 12.52 11.11 11.65 9.64 9.25 5.7 6.53 7.54 7.67 22.63 25.94 39.7 35.3 26.95 99.37 81.1 93.26 112.08 61.07
  • 11. 3. Ratio Analysis DABUR GODGEJ Fixed Assets turnover Ratio 10 2008-09 2007-08 2006-07 2005-06 2004-05 4.84 4.67 8.51 7.3 7.41 4.18 4.6 9.47 11.82 8.34
  • 12. The Cost Of Capital 11
  • 13. 12 4. The cost of capital Cost Of Equity Cost Of capital Cost Of Debt
  • 14. 13 DABUR GODREJ Cost Of Debt 4. Cost of CAPITAL 10.0% 8.33%
  • 15. 14 Cost Of Equity 1. CAPM: k s = k RF + (k M - k RF )b = k RF + (RP M )b 2. DCF: k s = D 1 /P 0 + g 4. Cost of capital
  • 16. 15 Cost Of Equity DABUR GODREJ B =0.48 Risk free return=8.0% Market Return =15.0% Risk Premium =7.0% B= 0.39 Risk free return =4.91% Market return = 20% 4. Cost of capital 11.4% 10.79%
  • 17. 15 Weighted Average Cost of Capital 4. Cost of capital DABUR 11.00%
  • 19. 15 5. The working capital Model The short term operating activities of the firm & their impact on cash & working capital
  • 20. 15 5. The working capital Model THE OPERATING CYCLE & THE CASH CYCLE - Short Term Operating Activities : How to collect cash Collecting cash 5 Offer cash / credit term to the customer Selling the product 4 Choice of production technology Manufacture the product 3 To borrow / draw down cash balance Paying cash & purchases 2 How much inventory to order Buying raw-material 1
  • 21. 12 DABUR GODGEJ 5. The working capital Model Inventory   Beg 20114.69 End 26171.64     A/C Receivables   Beg 10046.43 End 11236.01     A/c Payables   Beg 17289.1 End 19384.87     Net Sales 239616.39     Cogs 196953.07 Inventory   Beg 19771.19 End 9355.62     A/C Receivables   Beg 14873.23 End 16099.98     A/c Payables   Beg 18.95 End 47.17     Net Sales 81623.72     Cogs 86745.94
  • 22. 13 5. The working capital Model   Dabur Godrej Avg Inventory 23143.16 14563.4 Inventory turnover 8.5 times 5.95 times Inventory pd 42.9 61.3       Avg Receivables 10641.22 15486.6 Receivables turnover 22.51 times 5.27 times Receivables pd 16.21 69.25       Avg payables 18336.98 33.06 Payables turnover 10.7 times 2623 8 times Payables pd 34.11 0.139
  • 23. 14 Inventory Period 42.9 Receivable Period 16.21 Operating Cycle 59.11 days + Operating Cycle 59.11 A/c Payable period 34.11 Cash Cycle 25 days = = Inventory Period 61.3 Receivable Period 69.25 Operating Cycle 130.55 days + Operating Cycle 130.55 A/c Payable period 0.139 Cash Cycle 130 days = = DABUR GODREJ 5. The working Capital Model
  • 24. 18 PRESENTED BY: NEHA LUTHRA & SAHINA PURI