Summary and Conclusion

Summary

Bottlers Nepal is one of the largest FMCG (Fast Moving Consumer Goods). It was established in
1979 in Nepal and has been able to become one of the largest company in Nepal. Bottlers Nepal
is part of Coca Cola. Bottlers Nepal has been working from community level to national level for
preserving water resources, recycling waste produced from their products, women empowerment
and more. The Company publishes its quarterly financials and has been recognized by the
Institute of Chartered Accountants of Nepal (ICAN) for 4 consecutive years for its strong
accounting and relationship with board members and shareholders. This report is based on
comparison of financial statement of Bottlers Nepal. We compared ratio analysis of two fiscal
years i.e. 2073/2074 and 2074/2075. This report shows how ratio analysis is used to study the
performance of company in brief manner of time.

In other words, we studied about importance of financial statement used in an organization and
their short comings. We also studied about ration analysis which indicated asset position, debt
position etc. of Bottlers Nepal. This report consists of 14 comparison of ratio analysis and their
interpretation which showed position of company in 2 fiscal years.

Conclusion

In this report, we have compared the data of two years i.e. 2074 and 2075.By comparing report
of 73/74 and 74/75 we found out that 74/75 revenue for the company increased by 13%, EBIT
for 74/75 increased by 27%% and Profit was increased by 26% for year 74/75. During the year
2073/74, current ratio and quick ratio was 1.15:1 and 0.63:1 whereas in the year 2074/75, current
ratio and quick ratio was 1.39:1 and 0.60:1. This shows that there is a positive ratio increment
from year 1 to year 2 which indicate that the company have been capable and have enough
resources to meet the its short term liquidity. Talking about the profitability status of the
company, Gross Profit Margin, Net Profit Margin, Operating Profit Margin, Return on Assets
and Return on Capital Employed during the year 2073/74 was 33.17%, 8.90%, 10.58%, 8.87%
and 17.17% respectively whereas during the year 2074/75 those profitability rate of returns was
33.77%, 9.94%, 10.90%, 11.08% and 19.64% respectively. The result generated from those data
shows positive increase in the profit of the company which represents that the company have
positive profit earning capacity.

In order to analyze the operational efficiency or turnover rate and leverage or long term solvency
capacity of the firm, ratios like Stock Turnover Ratio, Debtor Turnover Ratio, Fixed Asset
Turnover Ratio, Assets Turnover Ratio, Creditor Turnover Ratio, Proprietary Ratio and Fixed
Asset Ratio were calculated. Talking about the turnover rate or operational efficiency of the
company, a bit of fluctuation can be seen. Stock Turnover Ratio, Debtor Turnover Ratio, Fixed
Asset Turnover Ratio, Assets Turnover Ratio, Creditor Turnover Ratio during the year 2073/74
was 5.6 times, 5.64 times, 1.95 times, 0.9 times and 1.2 times whereas during the year 2074/75, it
was 4.6 times, 8.39 times, 1.98 times, 0.8 times and 1.02 times. This shows that though the
company is successful in achieving the operational efficiency during particular year individually
but while comparing both the year, it is seen that company needs to slightly work on its turnover
rates which will help them to achieve a required operational efficiency. And, by looking at the
leverage ratio of the company, it can be understood that long term solvency of the firm is having
a positive change as the leverage ratio, indicated by Proprietary Ratio and Fixed Asset Ratio
which was 0.35:1 and 0.15:1 during 2073/74 and 0.49:1 and 0.33:1 during the year 2074/75.

Looking upon the cash flow of the company during the year 2073/74, the net cash flow from
operating activities were positive which means that the core business activities of the company is
thriving whereas the net cash flow from investing and financing activities were negative which
means that the significant amount of cash is being invested in long term health of the company.
But the overall cash flow was resulted positive. Similarly, from the data of cash flow from the
year 2074/75, it can be said that the company is spending much more than that of its sales during
the year which is indicated by negative operating activities. Due to which it is seen that the
company had invested more in other investing and financing activities. Though the operating
cash flow is negative it was recovered through the previous year’s cash balance.

Therefore, it can be said that the company was able to manage its liquidity, leverage and
profitability ratio/ positon during the year as well as next year. The available data show that
company performance was better in 2074/2075 than that of 2073/2074. Management increased
their efficiency which can be confirmed by the interpretation of ratio analysis which shows a
higher score in year 2074/2075 than that in 2073/2074. So, we can conclude that Bottlers Nepal
fiscal year 2074/2075 outperformed 2073/2074.