CHAPTER - 4 ANALYSIS OF PERFORMANCE OF SELECTED FMCG COMPANIES

CHAPTER - 4 ANALYSIS OF PERFORMANCE OF SELECTED FMCG COMPANIES The performance of the FMCG Companies can be evaluated in three ways, they are: (1) Solvency: This is the measure of the firm s ability to pay its debts as they come due and still be financially capable of carrying on normal operations. (2) Profitability: This is the measure of the firm s ability to earn a net income. Generally historical evidence is used as the criterion is used as the firm s success in this area. (3) Future potential: The evaluation of a firm s future potential required reference to several factors some of this cannot measure quantitatively. So the evaluation of a firm will collectively included above since they are mutually interdependent and cannot be entirely separated for appraised purpose. For the purpose of the study, financial performance analysis is made. (1) Financial performance analysis: The classification of financial analysis can be made either on the basis of material used for the some or according to modus operation of the analysis. (A) According to material used: (1) External analysis: Analysis of financial statements conducted by those who do not have access to books of accounts or carried out on the basis of published information is known as external analysis (Sharma R. 2006, P-461). This is affected by those who do not have access to the detailed accounting record of the company. This group comprising investors, credit agencies, government and the public 152

depends almost entirely on published financial statement. With the recent changes in the government regulations required business concern to make available detailed information to the public through audited concerns to make available detailed information to the public through audited accounts, the position of the external analyst has been considerably improved. (2) Internal analysis: Analysis conducted by those who have access to book of accounts is known as internal analysis (Sharma R., 2006, p. 461). It is based on detailed information available within enterprise, which is not available to the outsiders. This is affected by those who have access to the books of accounts and other information relating to the business concern. Any financial analysis is conducted with reference of a whole unit. Executives and employees of the business units as well as government agencies, which have statutory control and jurisdiction over such units, conduct this type of analysis meant for managerial purpose. Point of Difference By whom? Base Reliability Table 4.1 Difference between internal and external analysis Internal Analysis External Analysis It is conducted by the persons It is conducted by the outsiders e.g. within the business firms e.g. financial analysts, share market accounting and finance department researchers It is conducted on the basis of It is conducted on the basis of books of accounts as access of published information as access of them is possible. the books of accounts is not possible. As it is based on the books of As it is based on published accounts, it is more reliable as information, it is not conducted in compares to external analysis. depth and hence it has less reliability. 153

(B) According to modus operandi of analysis: (A) Horizontal or Dynamic Analysis: Analysis which involves comparisons and establishing relationship among related items based on financial statements of an enterprise for a number of years or financial statement of various enterprises for the same year is known as horizontal analysis. (Sharma R., 2006, P-461). As the data of more than one year are used in such a type of analysis, it is possible to generate the trend of each item of financial statements. As the data of various years are used in horizontal analysis, it is known as dynamic analysis. (Sehgal Ashok & Deepak, Advanced Accounting- 2, Corporate Accounting, Taxmann s Taxmann Allied Services (p) Ltd. P-407).When financial statement for a certain number of years is analyzed the analysis is called a horizontal analysis. It is also known as Dynamic analyses. This is based on the data spread over a period of years rather than on one date or period of time as a whole. (B) Vertical Analysis: Analysis of financial data based on relationship among various items in a single period of financial statements is called vertical analysis. (Sharma R., 2006, P-461). Normally, common-size statements may be considered as a tool of vertical analysis. As the facts and figures of financial statements of given period of time are used in vertical analysis, it is also known as static analysis. This refers to analysis of ratio developed for one date or for one accounting period. This is also known as static analyses. But vertical analysis does not facilitate a proper analysis and interpretation of figures in perspective and also comparison over a period of years. As such this type of analysis is not resorted to by the financial analysis. In short, financial analysis done on the basis of only one year is known as vertical analysis. (C) Trend Analysis: The financial statements for a series of years may be analyzed to determine the trend of the data contained there in. The trend percentages are also referred to as trend ratios. This method of analysis is adopted to determine the direction upward or downward. This 154

involves the computation of the percentage relationship that each item in the statement bears to the corresponding items contained in that of the base year. For this purpose the earliest year involved in comparison or any intervening year may be considered as the base year. The trend percentages emphasize changes in the financial data from year to year and facilitate horizontal comparison and study of the data. These trend ratios can be considered as index number showing relative change in the financial data over a period of years. Table 4.2: Different between horizontal and vertical analysis Point of Horizontal Analysis Difference Requirement To conduct horizontal analysis, financial statements of two or more periods are required. Items Under such analysis, items of more than one year are taken into account. Reach It involves of comparison of items given in the financial statements. Utility It is a significant tool for inter-firm comparison or series analysis. Tool Comparative financial statements analysis is an important tool of this type. Synonyms It is also known as dynamic analysis. Vertical Analysis To conduct vertical analysis, financial statements of one year are needed. Under such analysis, items of one year taken into account. It creates a base for the purpose of conducting comparison of the items given in the financial statements. It is a significant tool for intra-firm comparison or cross-section analysis. Common-size statements may be considered as a tool of horizontal analysis. It is also known as static analysis. 155

RATIO ANALYSIS 4.1 INTRODUCTION To evaluate the financial condition and performance of a firm, the financial analyst yields certain yardstick frequently used as a ratio, or index, relating two pieces of financial data to each other. Analysis and interpretation of various ratios should give experienced, skilled analyst a better understanding of the financial conditions and performance of the firm than they would obtain from analysis of financial data alone. 4.2 WHAT IS RATIO? Ratio analysis is a powerful tool of financial analysis. A Ratio is defined as The indicated quotient of two mathematical expressions and as the relationship between two or more things. In financial analysis a ratio is used as benchmark for evaluating the financial position and performance of a firm. Ratios help to summarize large quantities of financial data and to make qualitative judgments about the firm s financial performance. The financial statements are prepared and presented annually are of little use for guidance of prospective investors, creditors and even management. If relationships between various related items in the financial statement are established, they can provide useful clues to gauge accurately the financial health and ability of business to make profit. This relationship between two related items of financial statement is known as Ratio. Ratio can be expressed in three different ways such as- Percentage- for example, the Return on Investment is 30%. Rates- for example, Price Earning Ratio is 5 times. Proportion- for example, Debt-Equity Ratio is 1:2 156

Standards of Comparison The ratio analysis involves comparison for a useful interpretation of the financial statement. A single ratio itself does not indicate favourable condition. It should be compared with some standards. The standards may consist of: Past ratio: Ratios calculated from the past financial statement of the same firm Competitors ratio: Ratio of some selected firms especially the most successful competitor, at the same point in time. Industry ratios: Ratios of the industry to which the firm belongs. Projected ratios: Ratios developed using the projected financial statement of the same firm. 4.3 TYPES OF RATIO ANALYSIS The ratio analysis involves comparison for useful interpretations of the financial statements a single ratio in itself does not indicate favorable or unfavorable condition. It should be compared with some standard. Standards of comparison may consist of: 4.3.1 Time Series Analysis The easiest way to evaluate the performance of a firm is to compare its current ratios with the past ratios. Such analysis is known as the time series (or trend) analysis. It gives an indication of the direction of change and reflects whether the firm s financial performance has improved, deteriorated or remained constant over time. The analyst should not simply determine change, but more importantly, he should understand why ratios have changed. The change, for example, may be affected by changes in the accounting policies without a material change in the firm s performance. 4.3.2 Pro-forma Analysis Sometimes future ratios are used as the standard of comparison. Future ratios can be developed from the projected financial statements. The comparison of current or past 157

ratios with future ratios shows the firm s relative strengths and weaknesses in the past and future. If the future ratios indicate weak financial position, corrective actions should be initiated. 4.3.3 Cross-Sectional Analysis Another way of comparison is to compare ratios of one firm with some selected firms in the same industry at the same point in time. This kind of comparison is known as the cross-sectional analysis. In most cases, it is more useful to compare the firm s ratio with ratio of few carefully selected competitors, who have similar operations. This kind of a comparison indicates the relative financial position and performance of the firm. A firm can easily resort to such a comparison, as it is not difficult to get the published financial statements of the similar firms. 4.3.4 Industry Analysis To determine the financial condition and performance of a firm, its ratios may be compared with average ratios of the industry analysis, helps to ascertain the financial standing and capability of the some point of time to determine the position of company in the industry. 4.4 TYPES OF RATIOS: Several ratios, calculate from the accounting data can be grouped into various classes according to financial activity or function to be evaluated. The ratios can be classified for the purpose of exposition. Into four broad groups, viz, Liquidity Ratio: Measure the firms ability to meet current obligations; Leverage ratios: Show the proportions of debt and equity in financing the firm s acts; Profitability Ratio: Measure overall performance and effectiveness of the firm; Activity Ratios; Reflect the firm s efficiency in utilizing its assets. 158

The present study is based on the profitability ratios which would give a clear idea how ratios are interrelated with the designing of the firm s impact of the industrial policy. However, the other ratios also directly or indirectly affect to the financial performance of the FMCG companies. Accounting ratios are relationship expressed in mathematical terms between figures which are connected with each other in some manner. Obviously, no purpose will be served by comparing two sets of figures which are not at all connected with each other. Moreover, absolute figure are also unfit for comparison. 4.5 CLASSIFICATION OF RATIOS Ratio can be classified into different categories depending upon the basis of classification. The traditional classification has been on the basis of the financial statement to which the determinants of a ratio belong. On this basis the ratios could be classified as: 1. Profitability ratios, 2. Turnover ratio, and 3. Financial ratio. 4.6 MEANING OF PROFITABILITY RATIOS Profitability is an indication of the efficiency with which the operations of the business are carried on. Poor operational performance may indicate poor sales and hence poor profits. A lower profitability may arise due to the lack of control over the expenses. Bankers, financial institutions and other creditors look at the profitability ratios as an indicator whether or not the firm earns sub stability more than it pays interest for the use of borrowed funds and whether the ultimate repayment of their debts appears reasonably certain. Owners are interested to know the profitability as it indicates the return which they can get on their investments. 159

Profit is the difference between revenues and expanses over a period of time. Profit is the ultimate output of a company and it will have no future if it fails to make sufficient profits. Therefore, the financial manager should continuously evaluate the efficiency of the company in terms of profit. The Profitability Ratios are calculated to measure the operating efficiency of the company. Generally, two major types of profitability ratios calculated Profitability in relation to sales Profitability in relation to the investment The profit is commonly measured by Profit after Tax (PAT) which is the result of the impact of all factors on the firm s earnings. Taxes are not controllable by management. To separate the influence of taxes Profit before Tax (PBT) may be computed. If the firm s profit has to be examined from the point of view of all the investors the appropriate measure of profit is operating profit. Operating profit is Earnings before Interest and Tax (EBIT). This measure of earnings shows earnings arising directly from the commercial operations of the business without the effect of financing. Comparative study of Ratios of the selected companies The study includes the following companies of the FMCG Industry, they are: 1. Britannia, Mumbai. 2. Nirma Limited., Ahmedabad. 3. Dabur India Limited, New Delhi. 4. Colgate- Palmolive (India) Limited, Mumbai 5. Godrej Consumer Product Limited, Mumbai. 6. Procter & Gamble Hygine and Health care Limited, Mumbai. 7. Hindustan Lever/ Unilever Ltd, Mumbai. 160

For the Analysis of performance of selected FMCG companies the following ratios are used: 1. Net Profit Ratio 9. Stock Turnover Ratio 2. Return on Investment Ratio 10. Debtors Turnover Ratio 3. Return on Capital Employed Ratio 11. Working Capital Turnover Ratio 4. Return on Shareholders Fund 12.Inventory to Working Capital Rat 5. Operating Profit Ratio 13. Sales to Fixed Assets Ratio 6. Debt-Equity Ratio 14. Total Assets Turnover Ratio 7. Current Ratio 15. Fixed Assets to Long term Funds Ratio 8. Quick Ratio These ratios and their trends are used to evaluate performance of selected FMCG companies. So, these ratios are serving the purpose. 1. NET PROFIT RATIO The profit margin measures the relationship between profit and sales. The Net Profit Ratio determines this relationship. This ratio is also known as Net Margin. It is arrived at by dividing the Earning after Tax with Sales. Net Profit Ratio = EAT x 100 Sales It is indicative of Management s ability to operate the business with sufficient success not only to recover from revenues of the period, the cost of merchandises or services, the expenses of operating the business (including depreciation) and the cost of borrowed funds, but also to leave a margin of reasonable compensation to the owners for providing their capital at risk. 161

Table 4.3: Net profit Ratio (in %) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 7.80 4.75 N.A. 15.79 12.35 2000-01 N.A. N.A. 7.30 5.31 N.A. 18.45 14.96 2001-02 N.A. 8.14 6.49 6.01 8.16 18.81 17.78 2002-03 N.A. 9.02 7.75 8.39 10.16 15.53 17.48 2003-04 8.08 12.12 9.88 10.36 11.86 15.97 12.06 2004-05 9.21 13.24 11.67 10.56 14.26 18.19 12.73 2005-06 8.05 10.76 13.80 11.30 17.44 23.38 15.33 2006-07 4.64 4.30 15.75 11.56 16.59 16.24 14.04 2007-08 7.30 8.67 15.20 14.92 16.13 20.14 13.31 Average 7.45 9.46 10.62 9.24 13.51 18.05 14.44 CV (%) 23.01 31.18 33.82 36.63 26.15 14.20 14.65 Source: Computed from the annual reports of the companies. Graph 4.1: Net Profit Ratio (in %) 20.00 18.06 18.00 16.00 13.52 14.45 14.00 12.00 9.47 10.63 9.24 10.00 7.46 8.00 6.00 4.00 2.00 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.3 represents the NP ratios, average ratios and CV value of selected companies for the period understudy. The NP ratio highest was 23.38 per cent for P&G in 2005-06 and lowest was 4.3 per cent for Nirma in 2006-07 among the selected units during the period of the study. The average NP ratio highest was 18.05 per cent for P&G and lowest was 7.45 per cent for Britannia during the study period. The CV value of the NP ratios highest was 36.63% for Colgate followed by Dabur 33.82%, Nirma 31.18%, Godrej 26.15%, 162

Britannia 23.01%, HUL 14.65% and P&G 14.20% during the period understudy. Thus, it reveals that the profitability of P&G and HUL was remained consistant during the period understudy. 2. RETURN ON INVESTMENT RATIO (ROI) Efficiency or productivity measures the output of a system in relation to its input; the greater the volume of output produced from a given level of input the more efficient the system. A business invests in assets to generate sales and profits. The more sales and profit a business can generate from a given level of investment in assets the more productive it is. The term investment may refer to total assets or net assets. The conventional approach of calculating return on investment is to divide PAT by investment. Investment represents the pool of fund supplied by shareholders and lenders, while PAT represents Residue income of shareholders. Return on Investment = Earnings after tax X 100 Total Assets In general terms, the higher the ROI ratio the better; it suggests the business in utilizing its assets productively. This is very short sighted approach, as not replacing existing assets or not purchasing new assets when necessary may be more damaging in the longer term. Table 4.4: Return on Investment (ROI) (in %) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 16.35 19.87 N.A. 63.87 152.92 2000-01 N.A. N.A. 19.79 30.61 N.A. 83.80 114.96 2001-02 N.A. 9.00 18.16 41.19 51.79 86.19 127.72 2002-03 N.A. 8.83 25.29 83.50 73.10 49.31 120.64 2003-04 40.78 9.14 72.77 91.45 96.97 36.37 77.60 2004-05 45.08 10.06 104.84 625.22 154.43 42.83 216.77 2005-06 40.68 9.82 101.65 271.36 473.89 50.44 296.45 2006-07 33.63 4.18 109.63 280.01 159.78 101.92 651.28 2007-08 50.16 8.70 91.27 304.08 137.55 59.88 809.92 Average 7.45 9.46 10.63 9.24 13.51 18.05 14.45 CV (%) 14.53 23.26 66.74 102.13 87.05 34.81 92.35 Source: Computed from annual reports of the companies 163

Graph 4.2: Return on Investment (ROI) (in %) 300.00 285.36 250.00 194.14 200.00 163.93 150.00 100.00 42.06 62.19 63.85 50.00 8.53 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.4 represents the Return on Investment, average ratios and CV value of selected companies for the period understudy.the Return on Investment highest was 809.92 per cent for HUL in 2007-08 and lowest was 8.70 per cent for Nirma in 2007-08 among the selected units during the period of the study. The average Return on Investment ratio highest was 18.05 per cent for P&G and lowest was 7.45 per cent for Britannia during the study period. The CV value of the ROI ratios highest was 102.13% for Colgate followed by HUL 92.35%, Godrej 87.05%, Dabur 66.74%, P&G 34.81%, Nirma 23.26%, Britannia 14.53% during the period understudy. Thus, it reveals that the Return on Investment of P&G and Nirma was remained consistant during the period understudy. 3. RETURN ON CAPITAL EMPLOYED The fund employed in the net assets is known as capital Employed. Rate of return on capital employed is one of the means which provides a basis for testing of profitability related to the source of long term funds. There are number of sources through which a firm can acquire its total assets. Thus, the capital employed is the tool of measuring the profitability of the examined units. This ratio is yardstick for measuring the profitability of the firm. 164

Return on Capital Employed = Earning After Tax X 100 Capital Employed Capital Employed = Owner s fund + Secured Loan + Unsecured Loan. Table 4.5: Return on Capital Employed (in %) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 13.35 16.87 N.A. 36.97 50.39 2000-01 N.A. N.A. 15.26 24.79 N.A. 44.98 52.48 2001-02 N.A. 9.15 12.30 24.69 53.64 35.35 47.61 2002-03 N.A. 8.85 18.20 30.28 78.71 29.53 46.10 2003-04 24.22 10.66 35.85 43.79 87.41 37.00 33.60 2004-05 31.88 11.61 37.05 44.65 134.63 54.80 59.60 2005-06 26.14 10.07 38.97 49.96 137.70 51.00 66.36 2006-07 17.37 3.96 56.53 56.24 57.03 30.85 126.03 2007-08 22.16 7.58 55.29 138.84 50.35 37.44 108.48 Average 24.35 8.84 31.42 47.79 85.64 39.77 65.63 CV (%) 21.87 28.47 55.54 76.59 43.30 21.85 47.15 Source: Computed from the annual reports of the companies. Graph 4.3: Return on Capital Employed (in %) 90.00 85.64 80.00 70.00 65.63 60.00 47.79 50.00 39.77 40.00 30.00 24.35 31.42 20.00 8.84 10.00 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs 165

Table 4.5 represents the Return on Capital Employed, average ratios and CV value of selected companies for the period understudy.the Return on Capital Employed highest was 138.84 per cent for Colgate in 2007-08 and lowest was 3.96 per cent for Nirma in 2006-07 among the selected units during the period of the study. The average Return on Capital Employed ratio highest was 85.64 per cent for Godrej and lowest was 8.84 per cent for Nirma during the study period. The CV value of the Return on Capital Employed ratios highest was 76.59% for Colgate followed by Dabur 55.54%, HUL 47.15%, Godrej 43.30%, Nirma 28.47%, Britannia 21.87% and P&G 21.85% during the period understudy. Thus, it reveals that the Return on Capital Employed of P&G and Dabur was remained consistant during the period understudy. 4. RETURN ON SHAREHOLDER S FUNDS This Ratio expresses the net profit in terms of the equity shareholders funds. This ratio is an important yardstick of performance for equity shareholders since it indicates the return on the funds employed by them. However, this measure is based on the historical net worth and will be high for old plants and for new plants. The factor which motivates shareholders to invest in a company is the expectation of an adequate rate of return on their funds and periodically, they will want to assess the rate of return earned in order to continue with their investment. There are various factors of measuring the return including the earning yield and dividend yield which are examined at later stage. This ratio is useful in measuring the rate of return as a percentage of the book value of shareholders equity. Return on Shareholder s Fund = Net Profit after Interest and Tax X 100 Shareholders Funds 166

Table 4.6: Return on Shareholder s Funds (in %) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 25.40 17.25 N.A. 38.06 52.65 2000-01 N.A. N.A. 23.52 26.14 N.A. 44.98 53.93 2001-02 N.A. 14.85 18.86 28.18 78.95 35.35 48.37 2002-03 N.A. 15.32 23.24 32.24 117.59 29.53 82.84 2003-04 27.56 15.09 42.22 44.21 153.06 37.00 57.21 2004-05 33.55 15.18 43.78 45.36 172.63 55.22 61.07 2005-06 26.66 11.79 42.22 50.76 158.50 51.17 68.13 2006-07 17.50 4.49 62.52 57.10 119.16 30.85 133.78 2007-08 25.27 8.89 59.96 142.85 98.42 37.91 130.68 Average 26.10 12.23 37.97 49.34 128.33 40.01 76.52 CV (%) 22.05 34.13 42.72 75.68 26.65 21.89 43.36 Source: Computed from the annual reports of the companies. Graph 4.4: Return on Shareholder s Fund (in %) 140.00 128.33 120.00 100.00 76.52 80.00 60.00 37.97 49.34 40.01 40.00 20.00 26.11 12.23 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.6 represents the Return on Shareholder s Fund, average ratios and CV value of selected companies for the period understudy.the Return on Shareholder s Fund highest was 172.63 per cent for Godrej in 2004-05 and lowest was 4.49 per cent for Nirma in 2006-07 among the selected units during the period of the study. The average Return on Shareholder s Fund ratio highest was 128.33 per cent for Godrej and lowest was 12.23 per cent for Nirma during the study period. The CV value of the Return on Shareholder s 167

Fund ratios highest was 75.68% for Colgate followed by HUL 43.36%, Dabur 42.72%, Nirma 34.13%, Godrej 26.65%, Britannia 22.05% and P&G 21.89% during the period understudy. Thus, it reveals that the Return on Investment of P&G and Dabur was remained consistant during the period understudy. 5. OPERATING PROFIT RATIO Operating profit ratio is the ratio between operating profit and sales. Operating profit is the net profit earned from the business for which the concern is started. It is the excess of net sales over the operating cost. It is the net profit plus nonoperating expenses minus non-operating incomes. Operating Profit Ratio = Operating profit X 100 Net sales The operating profit ratio also indicates the operating efficiency or inefficiency of a business. The standard operation profit ratio is 10%, so, on operating profit ratio of 10% or more is an indication of the operating efficiency of the business. An operating profit ratio of less than 10% is an indication of the operating inefficiency of the business. Table 4.7: Operating profit ratio (Operating profit margin ratio) (in %) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 7.78 8.25 N.A. 17.18 15.70 2000-01 N.A. N.A. 7.30 8.99 N.A. 21.70 17.71 2001-02 N.A. 18.06 6.49 9.88 12.30 24.81 22.07 2002-03 N.A. 18.84 7.75 13.29 13.29 21.14 22.14 2003-04 13.64 26.17 9.88 14.54 14.01 22.03 15.16 2004-05 15.25 23.71 13.01 76.48 15.54 24.47 14.51 2005-06 11.43 22.30 15.65 15.43 18.97 31.17 15.38 2006-07 5.63 15.20 17.76 14.55 16.87 26.31 15.92 2007-08 9.41 14.42 17.53 81.52 18.43 27.67 14.95 Average 11.07 19.81 11.46 26.99 15.63 24.05 17.06 CV (%) 33.96 22.21 40.02 109.76 16.46 17.07 17.57 Source: Computed from the annual reports of the companies. 168

Graph 4.5: Operating Profit Ratio (in %) 30.00 26.99 24.05 25.00 19.81 20.00 15.00 10.00 10.75 11.46 15.63 17.06 5.00 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.7 represents the Operating Profit Ratio, average ratios and CV value of selected companies for the period understudy.the Operating Profit Ratio highest was 81.52 per cent for Colgate in 2007-08 and lowest was 5.63 per cent for Britannia in 2006-07 among the selected units during the period of the study. The average Operating Profit Ratio highest was 26.99 per cent for Colgate and lowest was 11.07 per cent for Britannia during the study period. The CV value of the Operating Profit Ratio highest was 109.76 for Colgate followed by Dabur 40.02%, Britannia 33.96%, Nirma 22.21%, HUL 17.57%, P&G 17.57% and Godrej 17.07% during the period understudy. Thus, it reveals that the Operating Profit Ratio of Godrej and HUL was remained consistant during the period understudy. 169

6. DEBT- EQUITY RATIO Debt-equity ratio is the ratio which expresses the relationship between debt and equity. Debt, generally, refers to long-term liabilities. Debt / Shareholders Equity Equity, for the purpose of this ratio, means owners, or proprietors, funds. Owners, fund comprises capital, all accumulated reserves and profits. Of course, if there are losses and fictitious assets, they should be adjusted in, i.e., deducted from, the owners, funds. The standard or ideal debt equity ratio is 2:1. As such, if the debt is less than two times the equity, the logical conclusion is that the financial structure of the concern is sound, and so, the stake or risk of the long-term creditors is relatively less. On the other hand, if the debt is more than two times the equity, the conclusion is that the financial structure of the undertaking is weak, and so, the stake of the long-term creditors is relatively more. Table 4.8: Debt- Equity Ratio Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 0.90 0.02 N.A. N.A. 0.04 2000-01 N.A. N.A. 0.54 0.05 N.A. N.A. 0.03 2001-02 N.A. 0.62 0.53 0.14 0.47 N.A. 0.02 2002-03 N.A. 0.73 0.28 0.06 0.49 N.A. 0.80 2003-04 0.14 0.42 0.18 0.01 0.75 N.A. 0.70 2004-05 0.05 0.31 0.18 0.02 0.28 N.A. 0.02 2005-06 0.02 0.17 0.08 0.02 0.15 N.A. 0.03 2006-07 0.01 0.13 0.11 0.02 1.09 N.A. 0.06 2007-08 0.14 0.17 0.08 0.03 0.95 N.A. 0.20 Average 0.07 0.36 0.32 0.04 0.59 N.A 0.21 CV (%) 88.61 64.92 87.63 98.39 57.98 N.A 147.61 Source: Computed from the annual reports of the companies. Note: Here we can t get long term liabilities of P&G. Hence we have not obtained this ratio for said FMCG. 170

Graph 4.6: Debt- Equity Ratios 0.6 0.5 0.4 0.36 0.32 0.60 0.3 0.21 0.2 0.1 0 0.04 0.07 0.01 Britania Nirma Dabur Colget Godrej P&G HLL FMCGs Table 4.8 represents the Debt-Equity Ratios, average ratios and CV value of selected companies for the period understudy.the Debt-Equity Ratios highest was 1.09 per cent for Godrej in 2006-07 and lowest was 0.01 per cent for Britannia in 2006-07 among the selected units during the period of the study. The average Debt-Equity Ratios highest was 0.59 per cent for Godrej and lowest was 0.04 per cent for Colgate during the study period. The CV value of the Debt-Equity Ratios highest was 147.61% for HUL followed by Colgate 98.39%, Britannia 88.61%, Dabur 87.63%, Nirma 64.92% and Godrej 57.98% during the period understudy. Thus, it reveals that the Debt-Equity Ratios of Colgate and HUL was remained consistant during the period understudy. 171

7. CURRENT RATIO Current ratio is the ratio which expresses the relationship between current assets and current liabilities. Current Assets / Current Liabilities Current assets refer to all those asset which change their form and substance and which are ultimately converted into cash during the normal operating cycle of business i.e., the normal course of the business, which is normally, 12 months. Current liabilities refer to all short-term obligations or liabilities which are enquired to be repaid within a period of one year out of short-term. The actual current ratio, ascertained with the help of the relevant financial figures, has to be compared with the standard or ideal current ratio of 2:1. If the current ratio is less than the standard current ratio of 2:1, the logical conclusion is that the concern does not enjoy sufficient liquidity, and there is shortage of working capital. If the actual is more than 2:1, it can reasonably be taken as a sign of the liquidity or the short-term solvency of the concern. Table 4.9: Current Ratio Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 3.90 1.36 N.A. 0.87 0.90 2000-01 N.A. N.A. 2.66 1.04 N.A. 0.88 1.09 2001-02 N.A. 2.54 2.33 1.00 0.84 0.88 1.07 2002-03 N.A. 4.35 2.08 0.80 0.82 1.45 1.07 2003-04 1.08 6.56 1.01 1.14 0.69 2.16 1.05 2004-05 0.94 11.83 0.79 0.71 0.66 2.87 0.75 2005-06 1.08 8.73 0.93 0.61 0.70 3.87 0.76 2006-07 1.23 3.64 0.97 0.65 0.69 0.93 0.68 2007-08 1.64 4.73 1.17 0.67 0.81 1.74 1.14 Average 1.19 6.05 1.76 0.89 0.74 1.74 0.95 CV (%) 22.58 53.78 60.20 29.38 10.14 60.88 18.54 Source: Computed from the annual reports of the companies. 172

Graph 4.7: Current Ratio 7.00 6.05 6.00 5.00 4.00 3.00 1.76 1.74 2.00 1.00 1.19 0.89 0.74 0.95 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.9 represents the Current Ratio, average ratios and CV value of selected companies for the period understudy.the Current Ratio highest was 11.83 per cent for Nirma in 2004-05 and lowest was 0.61 per cent for Colgate in 2005-06 among the selected units during the period of the study. The average Current Ratio highest was 6.05 per cent for Nirma and lowest was 0.74 per cent for Godrej during the study period. The CV value of the Current Ratio highest was 60.88% for P&G followed by Dabur 60.20%, Nirma 53.78%, Colgate 29.38%, Britannia (22.58%, HUL 18.54%, and Godrej 10.14% during the period understudy. Thus, it reveals that the Current Ratio of Godrej and HUL was remained consistant during the period understudy. 173

8. QUICK RATIO Quick ratio is the ratio which expresses the relationship between quick or liquid assets and quick or liquid liabilities. Quick assets refer to those current assets which can be converted into cash quickly, i.e., within a very short period without much loss. They include all current assets excepts inventories or stocks and prepaid expenses. Quick liabilities refer to all those liabilities which should necessarily be paid within a short period of one year. They include all current liabilities expect bank overdraft and cash credit. Quick Ratio = Quick Assets Quick Liabilities The actual quick ratio has to be compared with the standard or ideal quick ratio of 1:1. If the actual quick ratio is equal to or more than the standard ratio of 1:1, the conclusion can be that the concern is liquid, and so, it can pay off its short-term liabilities out of its quickly realizable assets without any difficulty. On the other hand, if the actual quick ratio is less than the standard quick ratio of 1:1, the conclusion can be that the concern is not liquid. Table 4.10: Quick Test Ratio Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 2.20 0.85 N.A. 0.56 0.37 2000-01 N.A. N.A. 1.43 0.62 N.A. 0.60 0.58 2001-02 N.A. 1.00 1.10 0.70 0.43 0.64 0.55 2002-03 N.A. 1.70 0.96 0.58 0.36 1.19 0.52 2003-04 N.A. 3.88 0.33 0.83 0.25 1.87 0.48 2004-05 0.29 8.30 0.25 0.37 0.11 2.38 0.30 2005-06 0.53 5.37 0.34 0.35 0.13 3.48 0.27 2006-07 0.33 1.38 0.40 0.40 0.15 0.56 0.17 2007-08 0.42 1.48 0.53 0.45 0.13 1.38 0.55 Average 0.39 3.30 0.84 0.57 0.22 1.41 0.42 CV (%) 27.16 82.46 78.13 33.68 57.25 71.88 35.12 Source: Computed from the annual reports of the companies. 174

Graph 4.8: Quick Test Ratio 3.50 3.30 3.00 2.50 2.00 1.41 1.50 0.84 1.00 0.39 0.57 0.42 0.50 0.22 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.10 represents the Quick Ratio, average ratios and CV value of selected companies for the period understudy.the Quick Ratio highest was 8.30 per cent for Nirma in 2004-05 and lowest was 0.11 per cent for Godrej in 2004-05 among the selected units during the period of the study. The average Quick Ratio highest was 3.30 per cent for Nirma and lowest was 0.22 per cent for Godrej during the study period. The CV value of the Quick Ratio highest was 82.46% for Nirma followed by Dabur 78.13%, P&G 71.88%, Godrej 57.25%, HUL 35.12%, Colgate 33.68% and Britannia 27.16% during the period understudy. Thus, it reveals that the Quick Ratio of Colgate and Dabur was remained consistant during the period understudy. 175

9. STOCK TURNOVER RATIO This is also called as Inventory Turnover or Stock velocity. This ratio is calculated to consider the adequacy of the quantum of capital and its justification for investing in stock or inventory. Inventory Turnover is the number of times obtained by dividing cost of sales by average stock. The logic behind establishing the relationship between Average Stock and cost of sales seems to be that stock should be compared with cost of sales because the stock is at cost price. Stock Turnover Ratio = Cost of Goods Sold Average Stock Stock turnover is used to measure the efficiency of sales. If a concern is able to effect higher volume of sales with lower quantum of stock, then it can be concluded that marketing efficiency of the concern is very sound and high. Concerns having too high stock turnover ratio may be operating with low margin of profit. However, too high stock turnover may be a symptom of over-trading. If the stock turnover is low or of smaller magnitude then it may be assumed to indicate (i) that there is slump in the business, (ii) that there is over investment in stock, (iii) that the closing stock has been increased just to take the advantage of expected rise in selling price or to meet the estimated rise in future sales, (iv) that stock has been valued incorrectly or improperly, (v) that items of stock have been included in an unbalanced manner or in disproportionate manner. Table 4.11: Stock Turnover Ratio (in times) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. N.A. N.A. N.A. N.A. N.A. 2000-01 N.A. N.A. 8.23 14.64 N.A. 10.62 9.06 2001-02 N.A. 8.34 7.81 14.55 16.78 11.27 7.90 2002-03 N.A. 8.84 7.31 16.72 15.51 12.41 7.59 2003-04 12.03 6.85 7.91 18.12 12.64 14.15 6.93 2004-05 12.60 6.86 10.59 15.76 9.81 13.80 7.92 2005-06 11.38 7.30 11.24 16.36 8.56 14.34 8.44 176

2006-07 11.58 6.39 11.73 17.91 7.77 18.53 7.84 2007-08 10.14 4.73 11.62 19.92 6.51 16.76 9.03 Average 11.55 7.04 9.55 16.75 11.08 13.98 8.09 CV (%) 7.93 19.07 19.96 10.99 35.78 19.06 8.95 Source: Computed from the annual reports of the companies. Graph 4.9: Stock Turnover Ratio (in times) 18.00 16.75 16.00 13.99 14.00 12.00 11.55 9.56 11.08 10.00 8.00 6.00 4.00 2.00 7.05 8.09 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.11 represents the Stock Turnover Ratio, average ratios and CV value of selected companies for the period understudy.the Stock Turnover Ratio highest was 19.92 per cent for Colgate in 2007-08 and lowest was 4.73 per cent for Nirma in 2007-08 among the selected units during the period of the study. The average Stock Turnover Ratio highest was 16.75 per cent for Colgate and lowest was 7.04 per cent for Nirma during the study period. The CV value of the Stock Turnover Ratio highest was 35.78% for Godrej followed by Dabur 19.96%, Nirma 19.07%, P&G 19.06%, Colgate 10.99%, HUL 8.95%, and Britannia 7.93% during the period understudy. Thus, it reveals that the Stock Turnover Ratio of Britannia and HUL was remained consistant during the period understudy. 177

10. DEBTORS TURNOVER RATIO Receivables or debtors constitute an important item of current assets. That means the quality of debtors determines the liquidity of the firm to a great extent. To judge the quality of the debtors the receivables turnover ratio, debtors turnover ratio or debtors velocity is used. Debtors turnover ratios are the ratio which indicates the relationship between debtors and sales. It is the ratio which indicates the number of times the debts are collected in a year. Debtors Turnover Ratio= Net annual credit sales Average debtors (i.e., average debtors and bills receivables) Or Debt Collection Period Ratio = Number of days in a year, (i.e., 365days or 360 days) Debtor Turnover The collection period, as calculate above, is compared with the credit period allowed, and conclusions are drawn. If the actual period of credit allowed is more than the normal period of credit or the ideal period of credit, viz., 30 days, the indication is that credit collection is not efficient. On the other hand, if the actual period of credit allowed is less than the normal period of credit or the ideal period of credit, the indication is that credit collection is efficient. Table 4.12: Debtor s turnover ratio (in times) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 8.82 24.96 N.A. 22.93 40.09 2000-01 N.A. N.A. 9.05 19.90 N.A. 15.16 27.68 2001-02 N.A. 14.05 9.83 20.36 23.55 12.45 23.74 2002-03 N.A. 15.00 15.53 28.69 30.03 9.62 21.12 2003-04 73.90 11.46 25.13 41.71 59.33 12.45 19.62 2004-05 35.80 10.37 33.29 90.03 103.17 26.22 22.97 2005-06 87.20 9.87 31.16 154.09 84.81 50.98 27.39 2006-07 81.00 11.29 19.83 149.68 72.44 39.52 27.99 2007-08 56.50 12.25 19.06 58.79 75.26 38.32 50.51 Average 66.88 12.04 19.08 65.36 64.08 25.29 29.01 CV (%) 31.14 15.63 48.65 82.51 44.94 57.91 34.58 Source: Computed from the annual reports of the companies. 178

Graph 4.10: Debtor s Turnover Ratio (in times) 70.00 66.88 65.36 64.08 60.00 50.00 40.00 29.01 30.00 19.08 25.30 20.00 12.04 10.00 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.12 represents the Debtor s Turnover Ratio, average ratios and CV value of selected companies for the period understudy.the Debtor s Turnover Ratio highest was 154.09 per cent for Colgate in 2005-06 and lowest was 8.82 per cent for Dabur in 1999-00 among the selected units during the period of the study. The average Debtor s Turnover Ratio highest was 66.88 per cent for Britannia and lowest was 12.04 per cent for Nirma during the study period. The CV value of the Debtor s Turnover Ratio highest was 82.51% for Colgate followed by P&G 57.91%, Dabur 48.65%, Godrej 44.94%, HUL 34.58%, Britannia 31.14%)and Nirma 15.63% during the period understudy. Thus, it reveals that the Debtor s Turnover Ratio of Colgate and HUL was remained consistant during the period understudy. 179

11. WORKING CAPITAL TURNOVER RATIO Working capital turnover ratio is the ratio between working capital and turnover. Working capital is the excess of current assets over current liabilities. Turnover means net sales, i.e., total sales less sales returns. Working Capital Turnover Ratio = Net Sales Working Capital This ratio indicates the efficient or inefficient utilization of the working capital of an enterprise. There is no standard or ideal working capital turnover ratio. Though there is no standard working capital turnover ratio, one can say that a higher working capital turnover ratio indicates the efficiency and a lower working capital turnover ratio indicates the inefficiency of the management in the utilization of working capital. Table 4.13: Working Capital Turnover Ratio (in times) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 3.43 13.57 N.A. 10.32 28.40 2000-01 N.A. N.A. 4.96 313.44 N.A. 8.47 146.21 2001-02 N.A. 5.16 4.45 20.42 29.02 3.66 41.51 2002-03 N.A. 4.23 6.36 35.80 22.16 2.96 27.49 2003-04 126.30 35.08 67.94 28.34 18.33 3.59 24.25 2004-05 40.76 32.95 18.06 17.07 16.10 4.95 8.16 2005-06 52.60 2.36 59.69 24.53 16.38 3.33 8.94 2006-07 37.70 2.56 39.69 20.92 28.46 3.50 7.48 2007-08 12.62 2.41 69.86 11.72 73.60 3.04 7.32 Average 53.99 12.11 30.49 53.98 29.15 4.87 33.31 CV (%) 70.56 51.23 88.82 196.91 113.04 71.93 104.28 Source: Computed from the annual reports of the companies. 180

Graph 4.11: Working Capital Turnover Ratio (in times) 60 54.00 53.98 50 40 30.49 29.15 36.56 30 20 10 3.34 4.87 0 Britania Nirma Dabur Colget Godrej P&G HLL FMCGs Table 4.13 represents the Working Capital Turnover Ratio, average ratios and CV value of selected companies for the period understudy.the Working Capital Turnover Ratio highest was 313.44 per cent for Colgate in 2000-01 and lowest was 2.36 per cent for Nirma in 2005-06 among the selected units during the period of the study. The average Working Capital Turnover Ratio highest was 53.99 per cent for Britannia and lowest was 4.87 per cent for P&G during the study period. The CV value of the Working Capital Turnover Ratio highest was 196.91% for Colgate followed by Godrej 113.04%, HUL 104.28%, Dabur 88.82%, P&G 71.93%, Britannia 70.56% and Nirma 51.23% during the period understudy. Thus, it reveals that the Working Capital Turnover Ratio of P&G and Nirma was remained consistant during the period understudy. 181

12. INVENTORY TO WORKING CAPITAL RATIO Inventory to working capital ratio is the ratio of inventory to working capital. Inventory or stock refers to closing stocks of raw materials, work-in-progress and finished goods. Working capital is the excess of current assets over current liabilities. Inventory to working capital ratio= Inventory x100 Working capital As per the standard or ideal inventory to working capital ratio, the inventories should not absorb more than 75% of the working capital. As such a low inventory to working capital ratio( i.e., a ratio of less than 75%) indicates under stocking, and so, a high liquid position, while a high inventory to working capital ratio(i.e., a ratio over 75%) indicates overstocking, and so, a low liquid position. Table 4.14: Inventory to Working Capital Ratio (in %) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 47.46 92.54 N.A. 97.86 316.60 2000-01 N.A. N.A. 59.18 2302.21 N.A. 74.32 1652.45 2001-02 N.A. 61.88 60.68 128.59 172.89 29.84 533.19 2002-03 N.A. 48.05 92.15 180.59 156.98 25.20 377.60 2003-04 1072.50 13.81 659.88 167.76 164.90 27.59 359.26 2004-05 344.59 12.50 182.22 118.53 196.91 39.68 97.53 2005-06 568.42 32.37 503.79 149.79 208.07 15.82 114.36 2006-07 368.43 48.95 390.23 121.28 418.77 19.84 106.55 2007-08 147.24 57.75 674.50 57.08 1322.16 21.63 1383.04 Average 500.24 39.33 296.67 368.71 377.24 39.08 548.95 CV (%) 18.75 10.45 19.53 32.48 23.34 34.97 18.16 Source: Computed from the annual reports of the companies. 182

Graph 4.12: Inventory to Working Capital Ratio (in %) 600.00 500.00 500.23 548.95 400.00 296.68 368.71 377.24 300.00 200.00 100.00 39.33 39.09 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.14 represents the Inventory to Working Capital Ratio, average ratios and CV value of selected companies for the period understudy.the Inventory to Working Capital Ratio highest was 2302.21 per cent for Colgate in 2000-01 and lowest was 12.50 per cent for Nirma in 2004-05 among the selected units during the period of the study. The average Inventory to Working Capital Ratio highest was 548.95 per cent for HUL and lowest was 39.08 per cent for P&G during the study period. The CV value of the Inventory to Working Capital Ratio highest was 34.97% for P&G followed by Colgate 32.48%, Godrej 23.34%, Dabur 19.53%, Britannia 18.75%, HUL 18.16%, and Nirma 10.45% during the period understudy. Thus, it reveals that the Inventory to Working Capital Ratio of P&G and Nirma was remained consistant during the period understudy. 13. SALES TO FIXED ASSETS RATIO (FIXED ASSETS TURNOVER RATIO) Fixed Assets Turnover ratio is the ratio between fixed assets and turnover. Sales to Fixed Assets Ratio = Net Sales Fixed Assets 183

This ratio indicates as to what extent the fixed assets of a concern have contributed to sales. In other words, it indicates as to what extent the fixed assets have been utilized. The standard fixed assets turnover ratio is 5 times. So, fixed assets turnover ratio of 5 times or more indicates better utilization of fixed assets. In this context, it may be noted that a very high fixed assets turnover ratio means undertrading, which is not good for the business. Table 4.15: Sales to Fixed Assets Ratio (In times) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 4.16 5.24 N.A. 3.48 9.88 2000-01 N.A. N.A. 4.80 6.03 N.A. 3.88 9.07 2001-02 N.A. 1.27 4.76 6.84 5.52 3.84 8.19 2002-03 N.A. 1.14 6.02 6.77 6.00 5.90 7.83 2003-04 11.54 1.00 7.41 11.61 5.42 7.20 6.98 2004-05 16.84 1.14 6.62 13.45 5.99 8.66 7.98 2005-06 12.93 1.28 6.89 7.61 9.50 9.13 8.64 2006-07 11.68 1.24 6.70 8.26 5.38 5.88 9.01 2007-08 10.86 1.39 7.08 8.11 5.94 5.30 12.60 Average 12.77 1.21 6.05 8.21 6.25 5.92 8.91 CV (%) 9.34 9.20 28.22 36.71 36.39 17.18 50.51 Source: Computed from the annual reports of the companies. Graph 4.13: Sales to Fixed Assets Ratio (in times) 14.00 12.77 12.00 10.00 8.21 8.91 8.00 6.00 6.05 6.25 5.92 4.00 2.00 1.21 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs 184

Table 4.15 represents the Sales to Fixed Assets Ratio, average ratios and CV value of selected companies for the period understudy.the Sales to Fixed Assets Ratio highest was 16.84 per cent for Britannia in 2004-05 and lowest was 1.00 per cent for Nirma in 2003-04 among the selected units during the period of the study. The average Sales to Fixed Assets Ratio highest was 12.77 per cent for Britannia and lowest was 1.21 per cent for Nirma during the study period. The CV value of the Sales to Fixed Assets Ratio highest was 50.51% for HUL followed by Colgate 36.71%, Godrej 36.39%, Dabur 28.22%, P&G 17.18%, Britannia 9.34%, and Nirma 9.20% during the period understudy. Thus, it reveals that the Sales to Fixed Assets Ratio of Godrej and Nirma were remained consistant during the period understudy. 14. TOTAL ASSETS TURNOVER RATIO Total assets turnover ratio is the ratio between total assets and sales. Total Assets turnover ratio = Net sales Total Assets This ratio indicates the efficiency or inefficiency in the use of total resources or assets of a concern. It is a measure of the overall performance of the business. The standard or idle total assets turnover ratio is that the sales should be at least two times the value of the assets. A total assets turnover ratio more indicates that the assets of the concern have been utilized effectively. In this context, it may be noted that a very high total assets turnover ratio indicates overtrading. Table 4.16: Total Assets Turnover Ratio (in times) Years Britannia Nirma Dabur Colgate Godrej P&G HUL 1999-00 N.A. N.A. 1.71 3.55 N.A. 2.34 4.08 2000-01 N.A. N.A. 2.09 4.67 N.A. 2.44 3.51 2001-02 N.A. 1.12 1.89 4.11 6.57 1.88 2.68 2002-03 N.A. 0.98 2.35 3.61 7.75 1.90 2.64 2003-04 3.00 0.88 3.63 4.23 7.37 2.32 2.79 2004-05 3.46 0.88 3.18 4.23 9.44 3.01 4.68 185

2005-06 3.25 0.94 2.82 4.42 7.89 2.18 4.33 2006-07 3.74 0.92 3.59 4.86 3.44 1.90 8.98 2007-08 3.04 0.88 3.64 9.31 3.12 1.86 8.15 Average 3.29 0.94 2.76 4.77 6.51 2.20 4.65 CV (%) 16.42 26.24 16.12 30.27 28.84 44.89 45.15 Source: Computed from annual reports of the companies Graph 4.14: Total Assets Turnover Ratio (in times) 7.00 6.51 6.00 5.00 4.78 4.65 4.00 3.30 2.77 3.00 2.20 2.00 1.00 0.94 0.00 Britannia Nirma Dabur Colgate Godrej P&G HLL/HUL FMCGs Table 4.16 represents the Total Assets Turnover Ratio, average ratios and CV value of selected companies for the period understudy.the Total Assets Turnover Ratio highest was 9.44 per cent for Godrej in 2005-06 and lowest was 0.88 per cent for Nirma in 2007-08 among the selected units during the period of the study. The average Total Assets Turnover Ratio highest was 6.51 per cent for Godrej and lowest was 0.94 per cent for Nirma during the study period. The CV value of the Total Assets Turnover Ratio highest was 45.15% for HUL followed by P&G 44.89%, Colgate 30.27%, Godrej 28.84%, Nirma 26.24%, Britannia 16.42% and Dabur 16.12% during the period understudy. Thus, it reveals that the Total Assets Turnover Ratio Britannia and Nirma were remained consistant during the period understudy. 186