24 - ruchika singh -nestle

8/8/2019 24 - Ruchika Singh -Nestle

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OVERVIEWNestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle India manufactudishes & cooking aids, and chocolates & confectionary. Some of the famous braNESTEA, NESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh 'n' Natural Dahi and NESHISTORY

Nestle was founded in 1867 in Geneva, Switzerland by Henri Nestle. Nestle's firAnglo-Swiss Condensed Milk Company. Nestle's relationship with India started 1Limited, importing and selling finished products in the Indian market.

Today, Nestle is the world's largest and most diversified food company. It has arcountries and offers over 8,000 products to millions of consumers universally.

NESTLE INDIAAfter independence, in response to the then economic policies, which emphasizup its first factory in 1961 at Moga, Punjab, where the Government wanted Nestbasic farming and animal husbandry practices such as increasing the milk yieldmanagement practices etc. Nestle set up milk collection centres that ensured pand vibrant milk district.

PROGRESSNestle India Limited has grown over the years into the most desired brand in thexpectations of the Indian government in bringing a marked change in the milkimprove the milk yield. Nestle India Limited gave directions to the farmers in inirrigation. The company proposed the set up of centers that not only catered toNestl has been a partner in India's growth for over nine decades now and hasCompany's activities in India have facilitated direct and indirect employment anpackaging materials, services and other goods.Nestl India is a responsible organization and facilitates initiatives that help to i


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res a variety of food products such as infant food, milk products, beverages, preparedds of Nestle are NESCAFE, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID,

TLE Jeera Raita.

t product was "Farine Lactee Nestle", an infant cereal. In 1905, Nestle acquired the912, when it began trading as The Nestle Anglo-Swiss Condensed Milk Company (Export)

ound 2,50,000 employees worldwide, operated 500 factories in approximately 100

ed local production, Nestle formed a company in India, namely Nestle India Ltd, and setle to develop the milk economy. In Moga, Nestle educated and advised farmers regardingof the cows through improved dairy farming methods, irrigation, scientific cropompt collection and paid fair prices. Thus, Nestle transformed Moga into a prosperous

food and beverage sector in India. The company has succeeded in meeting theindustry through its suggestion on latest dairy farming techniques and upkeep of cows toorporating the advanced technological methods with regard to crop maintenance andthe storing and selling of milk, but also maintained contacts with the farmers.uilt a very special relationship of trust and commitment with the people of India. The

d provides livelihood to about one million people including farmers, suppliers of

prove the quality of life in the communities where it operates.


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CURRENT RATIOYear Current Asset

2004 3,639,992

2005 3,581,752

2006 5,353,738

2007 6,378,5412008 7,979,532

WORKING CAPTIAL RATIOYear Cost of Sales

2004 22,275,739

2005 24,769,0102006 28,160,646

2007 28,160,646

2008 35,043,532

QUICK RATIOYear Quick Asset

2004 3639992

2005 3581752

2006 5353738

2007 6378541

2008 7979532

DEBTORS TURNOVER RATIOYear Net Credit Annual Sales

2004 22,275,739

2005 24,769,010

2006 28,160,646

2007 35,043,532

2008 43,242,450


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Year Total Trade Debtors

2004 5787002005 566930

2006 862816

2007 1092470

2008 990834

CREDITORS TURNOVER RATIO

Year Net Credit Annual Purchases2004 324239

2005 282971

2006 267906

2007 346,677

2008 502,268

AVERAGE PAYMENT PERIODYear Total Trade Creditors

2004 5022858

2005 5826939

2006 6861593

2007 8222328

2008 9573743

GROSS PROFIT RATIOYear Gross profit

2004 38,64,931

2005 46,90,574

2006 48,05,239

2007 62,86,138

2008 77,28,268

AVERAGE COLLECTION PERIOD


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NET PROFIT RATIO

Year Net profit

2004 25,19,158

2005 30,95,715

2006 31,50,965

2007 41,38,122

2008 53,40,882

RETURN ON EQUITYYear Profit after tax

2004 25,19,158

2005 30,95,715

2006 31,50,965

2007 41,38,122

2008 53,40,882

EARNINGS PER SHAREYear Profit after tax

2004 25,19,158

2005 30,95,715

2006 31,50,965

2007 41,38,122

2008 53,40,882

PRICE EARNING RATIOYear Market price

2004 589

2005 955

2006 1122


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2007 1422

2008 1397

RETURN OF GROSS CAPITAL EMPYear Adjusted net profit

2004 25,19,158

2005 30,95,715

2006 31,50,965

2007 41,38,122

2008 53,40,882

DEBT EQUITY RATIOYear Secured + Unsecured loans

2004 7,49,157

2005 9,88,056

2006 10,51,369

2007 11,61,883

2008 12,27,983

INTEREST COVERYear Profit before interest and tax

2004 38,64,931

2005 46,90,574

2006 48,05,239

2007 62,86,138

2008 77,28,268


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Current Liabilities Current Ratio

4,923,285 0.74

6,182,349 0.58

7,688,725 0.70

9,577,693 0.6711,839,651 0.67

Net working capital Working capital turnover ratio

-2,600,597 -9

-2,226,330 -11-2,334,987 -12

-3,199,152 -9

-3,860,119 -9

Current Liabilities Quick Ratio

4,923,285 0.74

6,182,349 0.58

7,688,725 0.70

9,577,693 0.67

11,839,651 0.67

Average Trade debtors Debtors Turnover Ratio

289,350 76.986

283465 87.379

431408 65.276

546235 64.155

495417 87.285


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Sales per Day Average Collection Period

0.211 2743702.144.177 135720.6

5.592 154304.91

5.689 192019.35

4.182 236944.93

Average Trade crditors Creditors Turnover Ratio2511429 0.1291

2913469.5 0.0971

3430796.5 0.0781

4111164 0.0843

4786871.5 0.1049

Average Daily Purchase Average Payment Period

888.33 5654.3

775.26 7516.08

733.99 9348.36

949.8 8656.9

1376.08 6957.27

Net sales Gross Profit Ratio

2,22,75,739 0.17

2,47,69,010 0.19

2,81,60,646 0.17

3,50,43,532 0.18

4,32,42,450 0.18


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Net sales Net Profit Ratio

2,22,75,739 0.11

2,47,69,010 0.13

2,81,60,646 0.11

3,50,43,532 0.12

4,32,42,450 0.12

Average shareholders' equity Return On Equity

32,72,012 0.77

33,67,701 0.92

37,15,106 0.85

40,36,560 1.03

44,58,869 1.2

Weighted average number of Equity Shares Earnings Per Share

9,64,15,716 0.03

9,64,15,716 0.03

9,64,15,716 0.03

9,64,15,716 0.04

9,64,15,716 0.06

Earnings = PAT/No. of shares Price Earning Ratio

26.13 22.54

32.11 29.74

32.68 34.33


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42.92 33.13

55.39 25.22

OYEDGross capital employed Return Of Gross Capital Employ

95,01,672 0.27

95,91,981 0.32

1,19,31,839 0.26

1,40,66,619 0.29

1,69,50,135 0.32

Equity Debt to Equity Ratio

31,94,070 0.24

35,41,333 0.28

38,88,879 0.27

41,84,241 0.28

47,33,497 0.26

Interest expense Interest Cover

7822 494

2122 2210

4408 1090

8545 736

16,430 470


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2004 2005 2006 2007

0.00

0.20

0.40

0.60

0.80

Current Ratio

Column D

2004 2005 2006 2007 2

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

Quick Ratio

Quick Ratio

2004 2005 2006 2007 2008

-14

-12

-10

-8

-6

-4

-2

0

Working capital turnover ratio

Working capitalturnover ratio

2004 2005 2006 2007

0.000

20.000

40.000

60.000

80.000

100.000

Debtors Turnover Ratio

Debtors TurnRatio


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2004 2005 2006 2007

0

500000

1000000

1500000

2000000

2500000

3000000

Average Collection Period

AverageCollection Peri

2004 2005 2006 2007

0.0000

0.0200

0.0400

0.0600

0.0800

0.10000.1200

0.1400

Creditors Turnover Ratio

CreditorsTurnover Ratio

2004 2005 2006 2007

0

2000

4000

6000

8000

10000

Average Payment Period

Average PaymPeriod


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ed


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2008

08

2008

ver


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2008

d

2008

2008

ent


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INTERPRET

A) Current Ratio

better the coverage. Generally 2:1 ratio is generally accepted. BuAnd it is more than 2 in the years 1998-99. 1999-00, 2001-02. T

enough to meet its liabilities.

B) Quick Ratio

Quick ratio is a better form of the CURRENT RATIO which exclude

cash in short period, like inventories. Its value for reliance has aC) Absolute Ratio

This ratio is the acid test ratio, which tells how much current liabalso satisfactory, around 0.70 except in the years 2002-03 and 2

D) Debtors Turnover Ratio

Debtors turnover ratio represents the speed at which cash is realthe company. Overall the value of this ratio has been over 16 tim

E) Collection PeriodThis ratio represents the number of days required to realize cashOverall this value has been above 11.

F) Inventory Turnover

This ratio indicates that how fast inventories is used or sold. A hi

versa. Here, the value of this ratio has been around 6. It has bee


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INTERPRET

INTERPRET

G) Inventory period

It is a representation of the inventories turnover ratio in the num

turnover represents the total accounting cycle. It has always bee

highest of 52 days in the year 2002-03.

A) DEBT EQUITY RATIO

This ratio indicates proportion of owners fund to total funds inve

the business is risky. Whereas a low ratio indicates that the utilizcompany. In case of Reliance, its debt-equity ratio is very high.

and even 0.8, which shows the riskiness of the business in this yReliance.

B) INTEREST COVERAGE RATIO

This indicates the extent to which, earnings may fall without caus

Charges, this ratio is very low for Reliance, which is because a la

This ratio has improved in the later years, but is still very low.


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INTERPRET

A) NET PROFIT RATIO

It indicates the firms capacity to face adverse economic conditio

higher profitability. It around 13 in the later years. Even initially

B) RETURN ON EQUITY

This ratio is more meaningful to the equity shareholders who are

profiles that can be made available. The higher the ratio, the bemiddle years, the ration is showing that is again got well in the la

C) RETURN ON CAPITALThis ratio is the most important for measuring the overall efficien

company. It should be compared with those of the other firms. H

good for the firm like Reliance.

A) Price Earnings Ratio

This indicates the expectation of equity investors about the earniearnings are they ready to pay for the share. It has generally abo

B) Price to Book Ratio

This ratio indicates the ratio of market price with book value of th

expectation of the shareholders. Price to Book ratio has been aro

24 - ruchika singh -nestle

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