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Dabur

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Dabur

  1. 1. A Project Report On Financial Statement Analysis Of Dabur India Ltd Semester-I Shah And Anchor Kutchhi College Of Engineering, Department Of Management Studies
  2. 2. ABOUT THE COMPANY  Dabur India Limited is the fourth largest FMCG Company in India with Revenues of over Rs 6,146 Crore & Market Capitalization of US $5 Billion. Building on a legacy of quality and experience of over 127 years, Dabur operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care & Foods.  German company Fresenius SE bought a 73.27% equity stake in Dabur Pharma in June 2008 at Rs76.50 a share. The German company had also purchased another 17.62% shares from the market through an open offer at the same price. Dr. Burman designed Ayurvedic medication for diseases such as cholera and malaria  DABUR the name is derived from DAKTAR BURMAN , was founded by Dr. S.K Burman.  Dr. S. K. Burman's commitment and ceaseless efforts resulted in the company growing from a fledgling medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and reliability.  From its humble beginnings in the bylanes of Calcutta way back in 1884 as an Ayurvedic medicines company, Dabur India Ltd has come a long way today to become a leading consumer products manufacturer in India.  Dabur's Ayurvedic Specialities Division has over 260 medicines for treating a range of ailments and body conditions, from common cold to chronic paralysis. Dabur International, a fully owned subsidiary of Dabur India formerly held shares in the UAE based Weikfield International, which it disposed of on 25 June 2012
  3. 3. History 1884 Birth of Dabur 1896 Setting up a manufacturing plant 1900 Ayurvedic medicines 1919 Establishment of research laboratories 1920 Expands further 1936 Dabur India (Dr. S.K. Burman) Pvt. Ltd. 1972 Shift to Delhi 1979 Sahibabad factory / Dabur Research & Development Centre (DRDC) 1986 Public Limited Company 1992 Joint venture with Agrolimen of Spain 1993 Cancer treatment 1994 Public issues 1995 Joint Ventures 1996 3 separate divisions 1997 Foods Division / Project STARS 1998 Professionals to manage the Company 2000 Turnover of Rs.1,000 crores 2003 Dabur demerges Pharma Business 2005 Dabur aquires Balsara 2005 Dabur announces Bonus after 12 years 2006 Dabur crosses $2 Bin market Cap, adopts US GAAP 2006 Approves FCCB/GDR/ADR up to $200 million 2007 Celebrating 10 years of Real 2007 Foray into organised retail 2007 Dabur Foods Merged With Dabur India 2008 Acquires Fem Care Pharma 2009 Dabur Red Toothpastejoins 'Billion Rupee Brand' club 2010 Dabur makes its first overseas acquisition 2011 Dabur enters professional skin care market 2011 Dabur India acquires 30-Plus from Ajanta Pharma 2012 Dabur crosses Billion-Dollar Turnover Mark
  4. 4. Various aspects of financial statement analysis of Dabur India Ltd Reading of Balance Sheet Ratio Analysis a)Liquidity Ratio - Current Ratio - Inventory Turnover Ratio - Debtors Turnover Ratio - Creditors Turnover Ratio - Assets Turnover Ratio - Capital Turnover Ratio b)Solvency Ratio - Total Debt Equity Ratio - ProprietorsRatio - Interest Coverage Ratio c)Profitability Ratio - Gross Profit Ratio - Net Profit Ratio - Operating Ratio - Return on Investment Ratio - Earning Per Share
  5. 5. Profit And Loss Account Parameters MAR'13 (₹ Cr.) MAR'12 (₹ Cr.) MAR'11 (₹ Cr.) MAR'10 (₹ Cr.) Gross Sales 4,399.11 3,796.26 3,311.60 2,879.54 Less :Inter divisional transfers 0.00 0.00 0.00 0.00 Less: Sales Returns 0.00 0.00 0.00 0.00 Less: Excise 49.72 38.72 30.99 23.58 Net Sales 4,349.39 3,757.54 3,280.61 2,855.96 EXPENDITURE: Increase/Decrease in Stock 25.83 -59.33 -78.31 -9.68 Raw Materials Consumed 2,288.34 2,086.64 1,728.96 992.21 Power & Fuel Cost 46.41 46.41 42.39 35.43 Employee Cost 294.34 233.19 208.93 197.62 Other Manufacturing Expenses 59.87 52.43 49.90 432.15 General and Administration Expenses 280.25 225.21 182.62 187.38 Selling and Distribution Expenses 621.57 505.57 487.61 474.79 Miscellaneous Expenses 9.89 37.81 38.87 15.27 Expenses Capitalised 0.00 0.00 0.00 0.00 Total Expenditure 3,626.50 3,127.93 2,660.97 2,325.17 PBIDT (Excl OI) 722.89 629.61 619.64 530.79 Other Income 94.23 55.14 26.35 41.64 Operating Profit 817.12 684.75 645.99 572.43 Interest 18.40 14.10 12.00 13.49 PBDT 798.72 670.65 633.99 558.94 Depreciation 49.05 38.72 37.73 31.91 Profit Before Taxation & Exceptional Items 749.67 631.93 596.26 527.03 Exceptional Income / Expenses 0.00 -44.90 0.00 0.00 Profit Before Tax 749.67 587.03 596.26 527.03 Provision for Tax 158.69 123.79 124.85 93.70 PAT 590.98 463.24 471.41 433.33 Extraordinary Items 0.00 0.00 0.00 0.00 Adj to Profit After Tax 0.00 0.00 0.00 -0.19 Profit Balance B/F 864.11 714.22 526.91 428.94 Appropriations 1,455.09 1,177.46 998.32 862.08 Equity Dividend (%) 150.00 130.00 115.00 200.00 Earnings Per Share (in ₹) 3.39 2.66 2.71 4.99 Book Value (in ₹) 8.55 6.56 5.18 8.44
  6. 6. Balance Sheet Parameters MAR'13 (₹ Cr.) MAR'12 (₹ Cr.) MAR'11 (₹ Cr.) MAR'10 (₹ Cr.) EQUITY AND LIABILITIES Share Capital 174.29 174.21 174.07 86.76 Share Warrants & Outstandings Shareholder's Funds 1,565.61 1,303.27 1,101.16 749.38 Long-Term Borrowings 0.00 0.00 0.00 0.00 Secured Loans 0.00 0.00 3.39 24.27 Unsecured Loans 0.84 1.14 2.12 85.70 Deferred Tax Assets / Liabilities 34.18 27.11 17.40 11.95 Other Long Term Liabilities 0.00 0.00 0.00 0.00 Long Term Trade Payables 0.00 0.00 0.00 0.00 Long Term Provisions 312.01 362.84 360.00 0.00 Total Non-Current Liabilities 347.03 391.09 382.91 121.92 Trade Payables 573.61 522.28 494.86 408.51 Current Liabilities Other Current Liabilities 135.62 122.40 37.77 23.55 Short Term Borrowings 240.74 272.13 246.50 0.00 Short Term Provisions 294.14 230.57 144.71 440.10 Total Current Liabilities 1,244.11 1,147.38 923.84 872.16 Total Liabilities 3,156.75 2,841.74 2,407.91 1,743.46 Non-Current Assets 0.00 0.00 0.00 0.00 ASSETS Gross Block 959.11 883.23 766.88 687.23 Less: Accumulated Depreciation 342.53 297.90 269.32 236.28 Less: Impairment of Assets 0.00 0.00 0.00 0.00 Net Block 616.58 585.33 497.56 450.95 Lease Adjustment A/c 0.00 0.00 0.00 0.00 Capital Work in Progress 17.07 11.58 4.37 23.31 Intangible assets under development 0.00 0.00 0.00 0.00 Pre-operative Expenses pending 0.00 0.00 0.00 0.00 Assets in transit 0.00 0.00 0.00 0.00 Non Current Investments 260.70 159.48 102.11 98.65 Long Term Loans & Advances 286.27 340.92 323.61 0.00 Other Non Current Assets 38.00 30.01 82.94 0.00 Total Non-Current Assets 1,218.62 1,127.32 1,010.59 572.91 Total Reserves 1,320.84 1,023.97 810.28 647.93 Current Assets Loans & Advances Currents Investments 765.45 393.24 417.38 249.86 Inventories 500.32 528.57 460.59 298.44 Cash and Bank 168.39 261.29 192.41 163.91 Other Current Assets 59.25 32.21 21.97 4.68
  7. 7. Short Term Loans and Advances 189.40 221.11 102.51 320.44 Total Current Assets 1,938.13 1,660.59 1,397.32 1,167.81 Net Current Assets (Including Current Investments) 694.02 513.21 473.48 295.65 Total Current Assets Excluding Current Investments 1,172.68 1,267.35 979.94 917.95 Miscellaneous Expenses not written off 0.00 53.83 0.00 2.74 Total Assets 3,156.75 2,841.74 2,407.91 1,743.46 Contingent Liabilities 97.72 102.04 1,013.30 164.29 Total Debt 242.04 277.16 252.01 109.97 Book Value (in ₹) 0.00 6.56 5.65 8.44 Adjusted Book Value (in ₹) 0.00 6.56 5.65 4.22 These are Profit and Loss Account and balance sheet records of Dabur India Ltd for last 5 years. But, to understand the balance sheet properly, we will have to find the different ratios from it. For finding the Ratios, We are considering 2009 data as well. According to the Balance Sheet, from 2009-2014 Share Capital is gradually increasing and also shareholders funds are also increasing. Dabur India Ltd has increased their Investments in the business as well as their Cash at bank is also increased. But, they have reduced their Loans and Advances long term as well as Short term. Though their liabilities, payables and borrowings has increased at the same time they were able to increase their Gross and Net Profit because they were increasing their Inventories. Dabur India Ltd is continuously increasing their assets and their contingent liabilities and Total debt is continuously fluctuating.
  8. 8. Analysis on Cost of Material Consumed As we can compare last five years data, Cost of Material Consumed is decreasing gradually from 2009 to 2011 and after that it remained almost constant till now. Analysis On Employee Cost Ratio As we can compare, In 2009 Employee cost ratio was 6.90 and after that in the very next year it is raised to 7.37and after that it again dropped down to 6.62 and then it remained constant till now. 38.12 39.49 38.84 47.70 50.44 2013 2012 2011 2010 2009 cost of material consumed 6.47 6.48 6.62 7.37 6.90 2013 2012 2011 2010 2009 employeecost ratio
  9. 9. Analysis On Finance Cost Ratio As we can compare, In 2009 it was 0.55and after that in the very next year it was dropped down to 0.19 and then after that it is gradually increasing till now. Analysis On Depreciation Ratio As we can analysed as per the available records, the depreciation ratio was 1.13 in 2009 and it remained constant in 2010 as well, but in 2011,it has raised to 2.07 and after that till now it is gradually decreasing 2.07 to 1.68. 0.42 0.38 0.37 0.19 0.55 2013 2012 2011 2010 2009 finance cost ratio 1.68 1.75 2.07 1.11 1.13 0.00 1.00 2.00 3.00 2013 2012 2011 2010 2009 depriciation ratio
  10. 10. Ratio Analysis a)Liquidity Ratio:- i)Current Ratio:- In Liquidity Ratio, the very first one is the Current Ratio. Current Ratio is defined as the ratio of Current assets to the Current Liabilities.  The company could not achieve the standard current ratio i.e 1.33:1 in 2010 but from 2011 onwards it improved on its current ratio.  There was increase in inventories and short term advances from 2011.  And they have used these things very efficiently to increase their Profits.  Even the cash position of the company was better after 2011.and its gradually constant after 2011. 2013 2012 2011 2010 2009 1.50 1.48 1.51 0.54 0.56 CURRENT RATIO
  11. 11. ii)Inventory Turnover Ratio:- The Analysis of the Inventory turnover ratio is as follows:-  In 2010 it is highest as the value of stock was less as compared to sales.  In 2011-2012 the ratio declined because there was increase in inventory.  And in 2013 it again increased because the inventories came down.  Inventory Velocity (In Days):- The Analysis of the Inventory Velocity is as follows:- It is defined as the Ratio to the No. Of Days in a year (360) to the Inventory Turnover Ratio 8.70 7.11 7.12 9.65 9.26 2013 2012 2011 2010 2009 INVENTORY TURNOVER RATIO 41.94 51.34 51.25 33.16 39.41 2013 2012 2011 2010 2009 inventoryholdingperiod
  12. 12.  Inventory holding period is minimum in 2010 i.e. 33 days, it is better for the company.  From 2011-2012, it increased to 51 days as inventory of the company increased.  In 2013, the value of inventory came down so as the inventory holding period. iii) Debtors Turnover Ratio:- The Analysis of the Debtors turnover ratio is as follows:- Debtors Turnover Ratio is defined as the ratio of Credit Sales to the Total No. Of Debtors  From the profit and loss account it is clear that sales is increasing every year, even debtors are also increasing so there is not much fluctuation in debtors turnover ratio except in 2009- 2010.  In 2009-2010, the value of debtors was significantly less. 17.04 16.76 16.20 25.64 21.57 2013 2012 2011 2010 2009 Debtors turnoverratio
  13. 13.  Debtors Velocity (In Days):- The Analysis of the Debtors Velocity is as follows:- It is defined as the Ratio to the No. Of Days in a year (360) to the Debtors Turnover Ratio  In 2011, debtors collection period was highest i.e 23 days, which is not good for the company.  In 2009-2010 it is 17 days as the average debtors were less as compared to other years, and thus it is good for the company. iv) Creditors Turnover Ratio:- The Analysis of the Creditors turnover ratio is as follows:- Creditors Turnover Ratio is defined as the ratio of Credit Sales to the Total No. Of Creditors. 21.43 21.78 22.53 16.53 16.92 2013 2012 2011 2010 2009 debtors collection period 3.79 4.00 3.49 3.18 3.69 2013 2012 2011 2010 2009 creditors turnoverratio
  14. 14.  From the graph it is clear that from 2009-2013 there was no major fluctuation in creditors turnover ratio.  As over the years both sales and creditors increased in the same proportion.  Creditors Velocity (In Days):- The Analysis of the Debtors Velocity is as follows:- It is defined as the Ratio to the No. Of Days in a year (360) to the Creditors Turnover Ratio.  Except in 2010, the payment period was higher from other years as creditors of the company was minimum in 2010 as compared to other years.  It is highest in 2011, as credit purchase increases and so as the creditors payment period. 96.36 91.36 104.47 87.99 98.89 2013 2012 2011 2010 2009 creditors paymentperiod
  15. 15. v) Assets Turnover Ratio:- The Analysis of the Assets turnover ratio is as follows:-  In 2009-2010 the assets turnover ratio is highest which is better for the company, as assets were efficiently utilized.  After 2011, it declined as the assets and revenue were not in proportion to each other. vi) Capital Turnover Ratio:- The Analysis of the Capital turnover ratio is as follows:-  In 2009-2010, it is higher as company had less share capital and reserves.  After 2010, share capital and reserves increased so the ratio declined.  In 2009-2010 it also shows that the available funds are efficiently utilized. 1.54 1.53 1.36 2.36 2.49 2013 2012 2011 2010 2009 2.73 2.88 2.96 3.78 3.26 2013 2012 2011 2010 2009 capital turnoverratio
  16. 16. vii)Acid Test Ratio:- It is nothing but the Liquid Ratio and it can be defined as the Ratio of Liquid Assets to Current Liabilities.  Except in 2009-2010, company was able to maintain Standard acid test ratio of 1:1.  In 2009-2010 it was less because the value of current assests i.e cash and debtors was less, so after deducting inventory from current assests the ratio further decreased.  From 2011 onwards company made some short term investments, which was not made in 2010,2009 so the acid test ratio increased from 2011. Overall Liquidity Ratio Analysis Overall we can say that the liquidity position of the company was satisfactory. The company started making short term investments from 2011 which is good for the liquidity position of the company. Inventory turnover ratio and debtors turnover ratio were better in 2009- 2010. Creditors turnover ratio was more or less the same from 2009-2013. 1.07 0.99 1.01 0.32 0.43 2013 2012 2011 2010 2009 acid test ratio acid test ratio
  17. 17. Assets turnover ratio, capital turnover ratio were highest in 2009-2010 because rate of increase in assets and capital employed was less in 2009- 2010. Inventory, credit and debtors holding period were unsatisfactory. b)Solvency Ratio:- i)Total Debt Equity Ratio – It is defined as the Ratio of Debt to Assets. Where, Debt = all liabilities including long term and short term And Equity = net worth + preference Capital  overall we can say that company had fair mix of short and long term loan and equity.  It is highest in 2009 and continuously fluctuating after that. So, it shows that company is not relying only on equity or loans. 0.15 0.21 0.23 0.15 0.29 2013 2012 2011 2010 2009 total debtequity ratio
  18. 18. ii)Proprietors Ratio:- This Ratio indicates the proportion of proprietor’s funds to the Total assets of the firm.  Except in 2009-2010 the ratio was more or less same.  In 2009, it is highest because funds and current assets have been invested appropriately. iii)Interest Coverage Ratio:- This Ratio indicates the proportion of Interest to the Earning Before Interest and Tax 0.56 0.53 0.46 0.61 0.76 2013 2012 2011 2010 2009 proprietoryratio 37.10 38.53 45.94 83.88 32.15 2013 2012 2011 2010 2009 Interestcoverage ratio
  19. 19.  It is highest in 2010 because the amount of interest paid is minimum.  Interest coverage ratio shows drastic fluctuations from 2009- 2010,as interest paid in 2010 was less in as compared to 2009.  After 2011, it declined as the amount of interest paid rises. Overall Solvency Ratio Analysis Total debt equity ratio was unsatisfactory as it couldn’t achieve the standard rate in any of the years. Total debt equity ratio and proprietary ratio was good. Interest coverage ratio showed major fluctuations. The company didn’t have fair mix of equity and debt. c)Profitability Ratio:- i)Gross Profit Ratio:- This Ratio indicates the efficiency of production and trading operations and it is expressed in percentage. 46.79 46.05 49.68 41.19 41.19 2013 2012 2011 2010 2009 GROSS PROFIT GROSS PROFIT
  20. 20.  2009-2010: GP remains none or less same as there were individual increase in inventory, debtors but there was no overall change.  2010-2011: There is a 8.49% increase in 2011 because of increase in inventory and stock. So, Dabur India Ltd used the inventory and stock very efficiently to increase their Gross Profit  But the same trend could not be followed in 2012-13 where it declined by 3.63% because of increase in current liabilities. During this fiscal year, company’s current liabilities increased which resulted into less Gross Profit. ii)Net Profit Ratio:- Net Profit Ratio indicates the Ratio of net profit before tax and net sales which is expressed in terms of percentages.  In 2009-10 the indirect expenses were less and because of that the Net Profit Ratio of the company is high  As compared to 2009, indirect expenses were less so Net Profit Ratio increased more in 2010 13.59 12.33 14.12 19.11 17.99 2013 2012 2011 2010 2009 NET PROFIT RATIO
  21. 21.  Where as in 2011 and 2012, the indirect expenses were comparatively higher because of that the net profit ratio is less in the year 2011-2012  And in 2013, again it is gradually raised back as the expenses were less. iii)Operating Ratio:- This Ratio indicates the proportion of cost of goods sold and operating expenses to the net sales.  From 2011 onwards the company incurred more indirect expenses as compared to previous years so the ratio from 2011 increased as compared to in 2009-2010.  In 2010-2011 there is increase in finance cost, depreciation, and other expenses due to which the ratio increased by 6.95. 31.55 30.70 32.31 25.26 23.20 2013 2012 2011 2010 2009 OPERATING COST
  22. 22. iv)Return on Investment Ratio:- The Analysis of the Capital turnover ratio is as follows:-  In 2009 ROI ratio was highest as compared to other years because from 2009 onwards the total increase in assets was more as compared to total increase in profits, so the ratio decreased after 2010. v)Earning Per Share:- This Ration indicates the overall profitability of the firm and it can be calculated as Ration of Net profit after tax less preference dividend to the No. Of Equity Shares. 20.90 18.90 19.58 43.19 44.01 2013 2012 2011 2010 2009 ROI ratio 3.39 2.66 2.71 4.98 4.31 2013 2012 2011 2010 2009 EPS
  23. 23.  It can be derived from the graph that the amount earned by the company for the share holders is highest in 2010when it is compared to other years. So, company’s performance was best in 2010. Overall Profitability Ratio Analysis By looking at all the profitability ratio’s we can conclude that DABUR limited has good profitability position as the gross profit and net profit ratios are showing an increasing trend In 2009-2010, the company is earned exceptionally well on its investment which was reflected by its ROI ratio Even Company’s Earning per share is also an average throughout the 5 years and it was best in 2010 And as the Dabur Ltd were able to maintain their expenses in 2009 and 2010 less they were able to earn more profits during those years as compared to 2011,2012,2013 So, as per the Profitability Ratios, we can conclude that Dabur India Ltd is a good company to invest.
  24. 24. Conclusion Overall Analysis Of Dabur India Ltd.  Company had strong financial position to pay off its current liabilities.  After comparing balance sheet and profit and loss account of Dabur India ltd. From 2009-2013 we can say that 2009-2010 were the most profitable years for the company.  Major fluctuation were seen in 2011 as company made many changes in its operations like short term investments and increase in other operating expense.  Company didn’t had adequate capital structure i.e. it relied only on equity share capital rather than debts, a company should have fair mix of debt and equity both.  Assets of the company were less in 2009-2010 but still were most profitable for the company.

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