Description
Financial analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project.
Presentation on Grand Project “ANALYTICAL STUDY ON AMUL”
UNDERTAKEN AT:KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD., ANAND
Presented by Parmar Vinit M (5039) Patel Kaustubh D (5040) Desai Harshil O (5091)
Date: 12/4/2013 Venue: K.S School of Business Management
Report on Grand project work entitled “Analytical Study of Amul Industry” is the result of our own work . We also acknowledge the other works / publications cited in the report.
Project All-About
Analytical Study ? Break something into its component parts, to see how it is put together. ? Researchers become an expert on topic so that you can restructure and present the part of the topic from your own perspective. ? For example, you could analyses the role of the mother in the ancient Indian family. Objective of the study: ? To observe and study Asia’s largest and oldest dairy co-operative system called Amul Dairy. Its history, evolution, growth and its ongoing sustainability to remain as for runner in dairy industry are the important part of the grand project. ? The main aim of Ratio Analysis of KDCMPL(AMULDAIRY)is to know the actual competitive position of the KDCMPL
Research design
? Descriptive Research ? Primary Data: We have not taken any primary data in our project work. ? Secondary data: All data are already available in the company’s financial statement and on the internet from the website of Amul dairy. 1. Last 7year balance sheet and P&L A/C 2. Necessary information collected through informal interview. ? Time budget: 4 Months from January 2013 to April 2013
? ? ? ? ?
Limitations of study The study is mainly based on secondary data and no field work is done. The area of study of this project is limited to Anand city. The data of study is around last 7years. Due to Uncertainty of Balance sheet We have only included Ratio Analysis and Strategies of Amul under the given time constraint. There would be a difference in some amount due to round off figure by Excel sheet.
GCMMF: AN OVERVIEW
Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India's largest food product marketing organization with annual turnover (2011-12) US$ 2.5 billion
PARTICULARS Members: No. of Producer Members: No. of Village Societies: Total Milk handling capacity:
DESCRIPTIONS 13 district cooperative milk producers' Union 2.6 million 12,792 10.16 million litres per day
Milk collection (Total - 2011-12):
Milk collection (Daily Average 2011-12): Milk Drying Capacity: Cattle feed manufacturing Capacity:
3.88 billion litres
10.6 million litres
647 Mts. per day 3690 Mts. per day
Amul: Organization
• AMUL is Asia’s no. 1 and world’s second number co-operative dairy. • It has large market and dairy network in every state of India and across the India, like central Asian countries, Bangladesh, Thailand, Indonesia, Malaysia, Singapore, etc.
Vision
Provide and Vanish the Problems of farmers
Motto
Motto of AMUL is to help farmers
Highest possible price to the milk producers and lowest possible price to consumer.
Co-operation of 4 main parties.
Farmers are paid money in cash payment for the milk
• Gayatri , Royal , Sardar , Uttam , Shreshtha
• Vadilal , Havmor ,Kwality Walls Max
MILK
ICE CREAM
• Gayatri, Nestle
GHEE
• Nestle
MILK POWDER
• Nestle, Cadbury
CHOCCLATE
PARTICULAR
NAME:
DESCRIPTION
KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED, ANAND. OR ANAND MILK UNION LIMITED Co-Operative sector registered under the co-operative Society Act. Kaira District Co-Operative Milk Producers Ltd, AMUL Dairy Road,Anand388001 Gujarat, India. KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER UNION LTD. ANAND – 388001 (1) SHRI TRIBHOVAN DAS PATEL (2) SHRI MORARJI DESAI (3) SHRI VALLABH BHAI PATEL (4) Dr. VARGHESE KURIEN 1. Kaira District Co- Operative Bank. 2. Axis Bank 3. State Bank of India 4. Bank of Maharashtra 5. Corporation Bank 6. Bank of Baroda 7. Bank of Saurastra Special Auditor (Milk), Milk Audit Office Anand 1st ndshift time: 08:30 A.M to 04:30 P.M 2rd shift time: 10:00 A.M to 06:00 P.M 3 shift time: 04:30 P.M to 12:30 A.M 1272 2.28 Millions 10:00A.M TO 6:00P.M 49.55Acres. TH 14 December, 1946
FORM:
LOCATION:
REG.OFFICE: PROMOTERS:
BANKERS:
AUDITORS: NO.OF SHIFT:
SOCIETIES: MEMBERS: OFFICE TIME: PREMISES: REGISTRATION:
SWOT Analysis
STRENGTH Brand strength: possible to become a market leader Product innovation: added a wide range of milk products Excellent promotional tools: advertisement, personal selling, sale promotion OPPORTUNITIES Product Variety: like Choco Flakes Exporting Product: UAE, Singapore, Australia, U.S.A. and Gulf Countries WEAKNESSES Co-operative culture: can affect the organization Diversification in Live Stocks: taken as side business
THREATS Tough competition: with Cadbury, Nestle, and Britannia etc. Stamina v/s others competitor
Michael 5 force Model
Rivalry among the firm:
Demand for the product:
Nature of Competitors:
Mergers and Acquisitions:
Threats Of Substitute
Availability of attractive priced substitutes:
Satisfaction level of substitutes:
Not immediate substitutes: :
Threats of New Entrants
Economies of Scale:
• Thus no regional competitor has grown to a national level. • Thus raw material procurement is very difficult for the new entrants. Consequently Capital requirement is also high • High level of Brand Preference in the minds of the people.
Cost & Resource advt.
Brand Pref.
Distribution Channels:
• For any new entrant to enter it would be a very difficult task • Inability to match the technology and specialized know-how of firms already in the industry
Knowhow
Capital Req.
• The total investment required in the industry is huge
Bargaining power
Bargaining power of Suppliers
Olden days there were not any kind of cooperative societies as the farmer was exploited.
But, now a days the farmer’s rights are protected under the cooperative rules and regulations
Bargaining power of Buyers
Switching of brands is seen very much in products such as ice cream, curd, milk powders, milk additives etc.
Milk is a necessity product and hence is a mass product. It has a considerable share of the rupee spent by any Indian
Ratio Analysis
CURRENT RATIO
CURRENT RATIO (Times) 2.50
2.00
1.50 2.23 1.00 1.54 1.52 1.24 0.50 1.27 1.14 1.36
0.00
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
STOCK TURNOVER RATIO
Inventory Holding Period (days)
12.00
Inventory Turnover Ratio (t)
70.00
10.00
60.00
50.00
8.00
40.00 6.00 30.00 4.00 20.00
10.00
2.00
0.00 0.00
Inventory Holding Period (days) Inventory Turnover Ratio (t)
DEBTORS TURNOVER RATIO
35.00 30.00 25.00 30.00 20.00 15.00 10.30 10.00 5.00 5.00 0.00 0.00 17.15 33.34 30.68 27.68 24.64 35.00 40.00
Debtors' Turnover Ratio (t)
15.94
25.00
20.00 15.00 10.00
Collection Period (days)
Debtors' Turnover Ratio (t)
CREDITOR TURNOVER RATIO
Suppliers' Credit (days)
50.00 9.00 48.00 46.00 44.00 8.00 7.84 7.71 7.50 8.50 8.86 8.62 8.59
Creditors' Turnover Ratio (t)
7.99
42.00
40.00 38.00 36.00 6.50
7.46
7.00
Suppliers' Credit (days) Series1
GROSS PROFIT RATIO
Gross Profit Margin
25.00
20.00
15.00
10.00
5.00
0.00 2004-05 2005-06 2006-07 2007-08 Gross Profit Margin 2008-09 2009-10 2010-11
NET PROFIT RATIO
Net Profit to Sales
0.60
0.50
0.40
Percentage
0.30
0.20
0.10
0.00 Net Profit to Sales
2004-05 0.58
2005-06 0.50
2006-07 0.50
2007-08 0.42
2008-09 0.42
2009-10 0.44
2010-11 0.44
FIXED ASSETS TURNOVER RATIO
Fixed Asset Turnover Ratio
20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Fixed Asset Turnover Ratio
EARNING PER SHARE
35.00 31.98 33.22
30.00 25.40
25.00
21.15 20.00 19.84 20.78 20.25
15.00
10.00
5.00
0.00 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Earnings Per Share
RETURN ON NET WORTH
14.00 12.00 10.38 10.00 8.59 Percentage 8.00 6.20 6.00 4.00 2.00 0.00 5.99 6.46 2004-05 6.95 2005-06
11.29
2006-07
2007-08 2008-09 2009-10 2010-11
Fiscal Year
NET ASSET VALUE
Series1 325.00
315.00
305.00
Rs.
295.00
285.00
275.00
265.00
Fiscal Year
DEBT TO EQUITY RATIO
Debt to Equity Ratio (Times)
2.50 2.50 2.00 2.00 1.50
Total Debt to Equity Ratio
Axis Title
1.50
1.00 1.00 0.50
0.50
0.00
0.00
Year Total Debt to Equity Ratio Debt to Equity Ratio (Times)
INTEREST COVERAGE RATIO
Interest Coverage Ratio (times)
1.80 1.75 1.70 1.65 1.60 1.55 1.50 1.45 2007-08 2008-09 2009-10 2010-11
Interest Coverage Ratio (times)
QUICK RATIO
Quick Ratio (Times)
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00 Quick Ratio (Times)
1 0.93
2 0.95
3 1.48
4 0.57
5 0.41
6 0.62
7 0.76
Findings
Besides Ratio Analysis Finding we have find several other findings which are listed as below: ? Low profit margin, almost all retailers are not interested in selling Amul milk
? All retailers get Amul milk from company selected distributors
? More of the activities were not communicated by distributors ? Amul don’t print packaging date on pouch ? CA ratio indicate "safe" liquidity, but also it can be a signal that the company has problems getting paid on its receivable or have long inventory turnover. ? The earnings per Share ratio is comparatively better for AMUL. The shares of AMUL are distributed only to the Societies, so the main earning is distributed to its Society.
Suggestion
? AMUL should concentrate more on inventory or we can say that stock, because in the CA, inventory's demand has higher position. ? It can be said that overall financial position of the company is normal. But it is required to be improved from the point of view of profitability. ? Company should stretch the credit period given by the suppliers. ? Since more amount of debt is used to contribute in owners funds, company should not relay on Long-term debts. ? Company should try to increase Volume based sales so as to stand in the competition. ? AMUL should perform ABC analysis for each category of raw materials. Through this analysis, AMUL should control the inventory level. ? Amul must have to be more concern about the finance, since their grants decrease over the time period.
? Company should start printing packaging date on milk pouch.
? 250 ml milk pouch should make available to retailers for selling, because lower income family has intention to buy small pouch milk.
? Incentives & schemes should be given to the retailers.
? Provide reasonable margin to retailers as compared to competitors, this motivates them to promote company’s milk and milk products. ? To achieve and maintain competitive advantage, innovation in product design and delivery are increasingly essential for Amul. ? Amul must have to be innovate at each stage in value chain – production, procurement, processing, marketing and branding . ? Consider on the supply of product in the peak season.
doc_770595030.pptx
Financial analysis refers to an assessment of the viability, stability and profitability of a business, sub-business or project.
Presentation on Grand Project “ANALYTICAL STUDY ON AMUL”
UNDERTAKEN AT:KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD., ANAND
Presented by Parmar Vinit M (5039) Patel Kaustubh D (5040) Desai Harshil O (5091)
Date: 12/4/2013 Venue: K.S School of Business Management
Report on Grand project work entitled “Analytical Study of Amul Industry” is the result of our own work . We also acknowledge the other works / publications cited in the report.
Project All-About
Analytical Study ? Break something into its component parts, to see how it is put together. ? Researchers become an expert on topic so that you can restructure and present the part of the topic from your own perspective. ? For example, you could analyses the role of the mother in the ancient Indian family. Objective of the study: ? To observe and study Asia’s largest and oldest dairy co-operative system called Amul Dairy. Its history, evolution, growth and its ongoing sustainability to remain as for runner in dairy industry are the important part of the grand project. ? The main aim of Ratio Analysis of KDCMPL(AMULDAIRY)is to know the actual competitive position of the KDCMPL
Research design
? Descriptive Research ? Primary Data: We have not taken any primary data in our project work. ? Secondary data: All data are already available in the company’s financial statement and on the internet from the website of Amul dairy. 1. Last 7year balance sheet and P&L A/C 2. Necessary information collected through informal interview. ? Time budget: 4 Months from January 2013 to April 2013
? ? ? ? ?
Limitations of study The study is mainly based on secondary data and no field work is done. The area of study of this project is limited to Anand city. The data of study is around last 7years. Due to Uncertainty of Balance sheet We have only included Ratio Analysis and Strategies of Amul under the given time constraint. There would be a difference in some amount due to round off figure by Excel sheet.
GCMMF: AN OVERVIEW
Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), is India's largest food product marketing organization with annual turnover (2011-12) US$ 2.5 billion
PARTICULARS Members: No. of Producer Members: No. of Village Societies: Total Milk handling capacity:
DESCRIPTIONS 13 district cooperative milk producers' Union 2.6 million 12,792 10.16 million litres per day
Milk collection (Total - 2011-12):
Milk collection (Daily Average 2011-12): Milk Drying Capacity: Cattle feed manufacturing Capacity:
3.88 billion litres
10.6 million litres
647 Mts. per day 3690 Mts. per day
Amul: Organization
• AMUL is Asia’s no. 1 and world’s second number co-operative dairy. • It has large market and dairy network in every state of India and across the India, like central Asian countries, Bangladesh, Thailand, Indonesia, Malaysia, Singapore, etc.
Vision
Provide and Vanish the Problems of farmers
Motto
Motto of AMUL is to help farmers
Highest possible price to the milk producers and lowest possible price to consumer.
Co-operation of 4 main parties.
Farmers are paid money in cash payment for the milk
• Gayatri , Royal , Sardar , Uttam , Shreshtha
• Vadilal , Havmor ,Kwality Walls Max
MILK
ICE CREAM
• Gayatri, Nestle
GHEE
• Nestle
MILK POWDER
• Nestle, Cadbury
CHOCCLATE
PARTICULAR
NAME:
DESCRIPTION
KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LIMITED, ANAND. OR ANAND MILK UNION LIMITED Co-Operative sector registered under the co-operative Society Act. Kaira District Co-Operative Milk Producers Ltd, AMUL Dairy Road,Anand388001 Gujarat, India. KAIRA DISTRICT CO-OPERATIVE MILK PRODUCER UNION LTD. ANAND – 388001 (1) SHRI TRIBHOVAN DAS PATEL (2) SHRI MORARJI DESAI (3) SHRI VALLABH BHAI PATEL (4) Dr. VARGHESE KURIEN 1. Kaira District Co- Operative Bank. 2. Axis Bank 3. State Bank of India 4. Bank of Maharashtra 5. Corporation Bank 6. Bank of Baroda 7. Bank of Saurastra Special Auditor (Milk), Milk Audit Office Anand 1st ndshift time: 08:30 A.M to 04:30 P.M 2rd shift time: 10:00 A.M to 06:00 P.M 3 shift time: 04:30 P.M to 12:30 A.M 1272 2.28 Millions 10:00A.M TO 6:00P.M 49.55Acres. TH 14 December, 1946
FORM:
LOCATION:
REG.OFFICE: PROMOTERS:
BANKERS:
AUDITORS: NO.OF SHIFT:
SOCIETIES: MEMBERS: OFFICE TIME: PREMISES: REGISTRATION:
SWOT Analysis
STRENGTH Brand strength: possible to become a market leader Product innovation: added a wide range of milk products Excellent promotional tools: advertisement, personal selling, sale promotion OPPORTUNITIES Product Variety: like Choco Flakes Exporting Product: UAE, Singapore, Australia, U.S.A. and Gulf Countries WEAKNESSES Co-operative culture: can affect the organization Diversification in Live Stocks: taken as side business
THREATS Tough competition: with Cadbury, Nestle, and Britannia etc. Stamina v/s others competitor
Michael 5 force Model
Rivalry among the firm:
Demand for the product:
Nature of Competitors:
Mergers and Acquisitions:
Threats Of Substitute
Availability of attractive priced substitutes:
Satisfaction level of substitutes:
Not immediate substitutes: :
Threats of New Entrants
Economies of Scale:
• Thus no regional competitor has grown to a national level. • Thus raw material procurement is very difficult for the new entrants. Consequently Capital requirement is also high • High level of Brand Preference in the minds of the people.
Cost & Resource advt.
Brand Pref.
Distribution Channels:
• For any new entrant to enter it would be a very difficult task • Inability to match the technology and specialized know-how of firms already in the industry
Knowhow
Capital Req.
• The total investment required in the industry is huge
Bargaining power
Bargaining power of Suppliers
Olden days there were not any kind of cooperative societies as the farmer was exploited.
But, now a days the farmer’s rights are protected under the cooperative rules and regulations
Bargaining power of Buyers
Switching of brands is seen very much in products such as ice cream, curd, milk powders, milk additives etc.
Milk is a necessity product and hence is a mass product. It has a considerable share of the rupee spent by any Indian
Ratio Analysis
CURRENT RATIO
CURRENT RATIO (Times) 2.50
2.00
1.50 2.23 1.00 1.54 1.52 1.24 0.50 1.27 1.14 1.36
0.00
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
STOCK TURNOVER RATIO
Inventory Holding Period (days)
12.00
Inventory Turnover Ratio (t)
70.00
10.00
60.00
50.00
8.00
40.00 6.00 30.00 4.00 20.00
10.00
2.00
0.00 0.00
Inventory Holding Period (days) Inventory Turnover Ratio (t)
DEBTORS TURNOVER RATIO
35.00 30.00 25.00 30.00 20.00 15.00 10.30 10.00 5.00 5.00 0.00 0.00 17.15 33.34 30.68 27.68 24.64 35.00 40.00
Debtors' Turnover Ratio (t)
15.94
25.00
20.00 15.00 10.00
Collection Period (days)
Debtors' Turnover Ratio (t)
CREDITOR TURNOVER RATIO
Suppliers' Credit (days)
50.00 9.00 48.00 46.00 44.00 8.00 7.84 7.71 7.50 8.50 8.86 8.62 8.59
Creditors' Turnover Ratio (t)
7.99
42.00
40.00 38.00 36.00 6.50
7.46
7.00
Suppliers' Credit (days) Series1
GROSS PROFIT RATIO
Gross Profit Margin
25.00
20.00
15.00
10.00
5.00
0.00 2004-05 2005-06 2006-07 2007-08 Gross Profit Margin 2008-09 2009-10 2010-11
NET PROFIT RATIO
Net Profit to Sales
0.60
0.50
0.40
Percentage
0.30
0.20
0.10
0.00 Net Profit to Sales
2004-05 0.58
2005-06 0.50
2006-07 0.50
2007-08 0.42
2008-09 0.42
2009-10 0.44
2010-11 0.44
FIXED ASSETS TURNOVER RATIO
Fixed Asset Turnover Ratio
20.00 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Fixed Asset Turnover Ratio
EARNING PER SHARE
35.00 31.98 33.22
30.00 25.40
25.00
21.15 20.00 19.84 20.78 20.25
15.00
10.00
5.00
0.00 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Earnings Per Share
RETURN ON NET WORTH
14.00 12.00 10.38 10.00 8.59 Percentage 8.00 6.20 6.00 4.00 2.00 0.00 5.99 6.46 2004-05 6.95 2005-06
11.29
2006-07
2007-08 2008-09 2009-10 2010-11
Fiscal Year
NET ASSET VALUE
Series1 325.00
315.00
305.00
Rs.
295.00
285.00
275.00
265.00
Fiscal Year
DEBT TO EQUITY RATIO
Debt to Equity Ratio (Times)
2.50 2.50 2.00 2.00 1.50
Total Debt to Equity Ratio
Axis Title
1.50
1.00 1.00 0.50
0.50
0.00
0.00
Year Total Debt to Equity Ratio Debt to Equity Ratio (Times)
INTEREST COVERAGE RATIO
Interest Coverage Ratio (times)
1.80 1.75 1.70 1.65 1.60 1.55 1.50 1.45 2007-08 2008-09 2009-10 2010-11
Interest Coverage Ratio (times)
QUICK RATIO
Quick Ratio (Times)
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00 Quick Ratio (Times)
1 0.93
2 0.95
3 1.48
4 0.57
5 0.41
6 0.62
7 0.76
Findings
Besides Ratio Analysis Finding we have find several other findings which are listed as below: ? Low profit margin, almost all retailers are not interested in selling Amul milk
? All retailers get Amul milk from company selected distributors
? More of the activities were not communicated by distributors ? Amul don’t print packaging date on pouch ? CA ratio indicate "safe" liquidity, but also it can be a signal that the company has problems getting paid on its receivable or have long inventory turnover. ? The earnings per Share ratio is comparatively better for AMUL. The shares of AMUL are distributed only to the Societies, so the main earning is distributed to its Society.
Suggestion
? AMUL should concentrate more on inventory or we can say that stock, because in the CA, inventory's demand has higher position. ? It can be said that overall financial position of the company is normal. But it is required to be improved from the point of view of profitability. ? Company should stretch the credit period given by the suppliers. ? Since more amount of debt is used to contribute in owners funds, company should not relay on Long-term debts. ? Company should try to increase Volume based sales so as to stand in the competition. ? AMUL should perform ABC analysis for each category of raw materials. Through this analysis, AMUL should control the inventory level. ? Amul must have to be more concern about the finance, since their grants decrease over the time period.
? Company should start printing packaging date on milk pouch.
? 250 ml milk pouch should make available to retailers for selling, because lower income family has intention to buy small pouch milk.
? Incentives & schemes should be given to the retailers.
? Provide reasonable margin to retailers as compared to competitors, this motivates them to promote company’s milk and milk products. ? To achieve and maintain competitive advantage, innovation in product design and delivery are increasingly essential for Amul. ? Amul must have to be innovate at each stage in value chain – production, procurement, processing, marketing and branding . ? Consider on the supply of product in the peak season.
doc_770595030.pptx