2006 2007 2008 2009 RESULT REASONS

FOR
CHANGE
GROSS 6.33 7.49 8.99 9.38
PROFIT
NET PROFIT 1.50 1.27 1.64 1.24
OPERATING 8.14 7.91 8.02 7.78
RATIO
OPERATING 2.96 2.48 2.78 2.18
PROFIT
RATIO

After calculating all the ratios of Profitability of MILMA I considered that

profitability of the company is in unfavorable condition. Profitability is a tool to
check the final outcome of the firm. As ratios include in Profitability are calculated
by use of Sales and profits potential customers, investors, creditors, Govt., owner
and even all of the stakeholders of the company have shown their deep interest in
Profitability analysis.

The gross profit of the firm is not touching standard in any of the years. But
gross profit is showing a minor increase in last four years. This decrease in ratio is
also because of increase in cost of goods sold. Over the years the sales of CCL is
increasing but the expenditure is increasing at a faster pace than sales resulting in
lesser profit margin. The company is not able to effectively control its cost or
expenditure.

Net profit ratio is also not touching the standard in any of the 4years. Net profit
ratio hit the low in 2009 among last four years.

This shows the overall efficiency of the Company. The impact of increase in cost
which is reflected in gross profit margin is also impacting the net profit margin as
well. Over the year other income of the company and sales is also improving but
the expenditure of the company is too much high as compared to revenue.
The main reason for low margin is minute difference between buying and
selling price. The buying price of raw milk and selling price of packed milk has to
get final approval of Kerala government. The Government is often reluctant to
encourage a price rise of packed milk owing to fear of protest from people. The
buying price often increased by the government due pressure from farmers. So
Milma is forced to operate in a low margin leading to low profitability.

GROSS PROFIT RATIO

1.80

1.60 1.64
1.50
1.40
1.27 1.24
1.20

1.00

0.80

0.60

0.40

0.20

0.00
2006 2007 2008 2009
Operating ratio

1.80

1.60 1.64
1.50
1.40
1.27 1.24
1.20

1.00

0.80

0.60

0.40

0.20

0.00
2006 2007 2008 2009

Net profit ratio

1.80

1.60 1.64
1.50
1.40
1.27 1.24
1.20

1.00

0.80

0.60

0.40

0.20

0.00
2006 2007 2008 2009
 90000000.00
82584748.15
80000000.00

70000000.00

60000000.00 60829950.31

50000000.00
45426055.00
40000000.00
36546417.28
30000000.00

20000000.00

10000000.00

0.00
2006 2007 2008 2009

1000000000.00
900000000.00 880130567.54
800000000.00
700000000.00 676285535.35
600000000.00 576900994.57 606305522.28
500000000.00
400000000.00
300000000.00
200000000.00
100000000.00
0.00
2006 2007 2008 2009