A PROJECT REPORT

ON

Financial Statement of Marico Pvt. Ltd.

In Partial Fulfillment Of
Requirement For The Award Of The
Degree

Of

Bachelor Degree of Commerce

Under The Guidance Of: Submitted By:

Miss .Rekha Agrawalla Preeti Bai

(Lecturer in Commerce) Roll no:-1802ACOMM068

TALCHER AUTONOMOUS COLLEGE, TALCHER

Affiliated To Utkal University, Vani Vihar

2020-2021
 CERTIFICATE

Certified that the project work with the title “Financial analysis of
Marico Pvt. Ltd.”, undertaken by PREETI BAI, 1802ACOMM068,
was conducted under my guidance and supervision. He has designed the
research, collected the data, analysed the results, interpreted the findings
and observations and prepared the report.

(MISS. REKHA AGRAWALLA)

Academic Guide
 DECLARATION

I hereby declare that the project report with the title “Financial analysis of Marico
Pvt. Ltd.”, being submitted to TALCHER AUTONOMOUS COLLEGE,
TALCHER in partial fulfilment of the requirements for award of the degree of
Bachelor of Commerce, is an original piece of research work carried out by me. It
has not been published/awarded elsewhere, nor has it been submitted in full or part
for any other degree.

Date:17/07/21
PREETI BAI
+3 3Rd YEAR COMMERCE
SEMESTER ROLL NO: 1802ACOMM068
 ACKNOWLEDGEMENT

The success of any project depends on the encouragement and guidelines of

many others. I take this opportunity to express my gratitude to the people who
are directly and indirectly related to this project. I take this opportunity to convey
my sincere regards and deepest sense of gratitude to my faculty guide MAJOR.
SUBRAT DAS (HOD OF commerce). Department of commerce , TALCHER
AUTONOMOUS COLLEGE, TALCHER for giving me the opportunity to
prepare my Final report as he has provided me with all relevant data that was
required for my project i.e.; Financial analysis of Marico Pvt. Ltd. who was a
constant source of inspiration during this period. I am obliged towards his
valuable comments and suggestions throughout the project making period. He
judged my academic interest and professional aptitude & provided me most
valuable guidance to make my project successful.

PREETI BAI
+3 3Rd YEAR COMMERCE
SEMESTER ROLL NO: 1802ACOMM068
 CONTENTS

CHAPTER PAGES. NO.

Chapter 1: Introduction

Chapter 2: Data collection, Analysis &

Interpretation

Chapter 3: Findings

Chapter 4: Recommendation

Chapter 5: Conclusion

Chapter 6: Bibliography
CHAPTER -1
INTRODUCTION
Company Profile

Marico Limited is one of India's leading consumer goods companies providing

consumer products and services in the areas of
health, beauty and wellness. With its headquarters
in Mumbai, Maharashtra, India, Marico is present in
over 25 countries across Asia and Africa. Harsh
Mariwala is the Chairman and Saugata Gupta
assumed the role of the Managing Director in
March 2014 and is currently the MD and CEO of
this organisation. Marico Limited was established on 13th October 1988 under the
name of Marico Foods Limited. Later in 1989 the name of the company was
changed from Marico Foods Limited to Marico Industries Limited. The first
International office for Marico was set up in Dubai in year 1992. Marico was first
listed on Indian stock exchange in 1996. It touches the lives of one out of every
three Indians through its portfolio of brands such as Parachute, Saffola, hair &
Care, Parachute Advanced, Nihar Naturals, Mediker and many more. It owns
brands in categories of hair care, skin care, edible oils, health foods, male
grooming, and fabric care. Marico Limited (ML), a leading Fast Moving
Consumer Goods (FMCG) player was incorporated on 13th October 1988 under
the name of Marico Foods Limited. The name of the company was changed from
Marico Foods Limited to Marico Industries Limited with effect from 31st October
of the year 1989. During the same year 1989, in December, the company had
entered into an agreement with M/s. Rasoi Industries Limited for purchase of its
unit located at M.I.D.C. Industrial Estate, Jalgaon. After a year, in 1990, ML made
a Registered Users Agreement with Bombay Oil Industries Ltd (BOIL) for the use
of the brands Parachute and Saffola for an initial period of 3 years commenced
from 1st April of the same year. The Company established a new plant at
Kanjikode, Palghat District of Kerala to manufacture Parachute Coconut Oil with
capacity of 24000 tonnes of coconut oil per annum, began commercial operation in
May of the year 1993. During the year 1995, ML had acquired the Brand SIL' from
KFL for the consideration of Rs 3 crores. Marico had extended its Sweekar oil
brand during the year 1997, by the way of two new refined oils entry namely
Sweekar cotton seed oil and Sweekar mustard oil. In the identical year of 1997, the
company had set up a factory near Jalgaon to process the cotton seeds and another
factory near Jaipur for the mustard oil.

The Company made the join venture between a Lever group company and Nissin
of Japan in the year 1998, and its products were distributed through HLL's
channels. During the year 2000, the company made a tie up with the International
Association of Trichologists (IAT), a non-profit organisation based in Australia. In
the identical year, ML had launched Parachute Dandruff Solution Coconut Hair Oil
in Calcutta, the first oil to combine coconut oil with antidandruff properties in
single hair oil. After a year, in 2001, the company had introduced the Revive Anti-
Bacteria starch. Marico had acquired a controlling equity interest in Sundari LLC
during the period of 2003. High Court of Judicature at Bombay approves the
Scheme of Amalgamation of Anandita Arnav Trading & Investment Private Ltd,
Madhav Nandini Trading & Investment Private Ltd, Rajvi Rishabh Trading &
Investment Private Ltd and Rishabh Harsh Trading & Investment Private Ltd with
the company on 12th February 2004. In the same year of 2004, the company had
forayed into the beauty products segment with the launch of Silk-n-Shine, a post-
wash hair care product. During the year 2006, Marico had acquired Hindustan
Lever Limited's Nihar for the consideration of Rs 216 crores.
Type Public
Traded as  BSE: 531642
 NSE: MARICO
Industry Consumer goods
Predecessor Bombay Oil Industries Limited (BOIL)[1]
Founded 2 April 1990; 31 years ago
Founder Harsh Mariwala
Headquarters Santacruz, Mumbai, Maharashtra, India
Area served Worldwide
Key people Harsh Mariwala (Chairman)[2]
Saugata Gupta (MD & CEO)[3]
Products  Personal care
 Skin care
 Convenience food
Revenue ₹7,439 crore (US$1.0 billion) (2020)[4]
Operating ₹1,424 crore (US$200 million) (2020)[4]
income
Net income ₹1,043 crore (US$150 million) (2020)[4]
Total assets ₹5,002 crore (US$700 million) (2020)[4]
Total equity ₹2,869 crore (US$400 million) (2020)[4]

Number of 1,631 (2020)[4]

employees

Website www.marico.com
History of Marico Pvt. Ltd.
2017– Marico acquires South Africa's leading hair styling business
– Isoplus; launches Saffola Active Slimming Nutri-shake (marking
entry into nutraceuticals category) and makes a strategic
investment in Zed Lifestyle (Beardo)

2018 – Marico invests Revolutionary Fitness (Revofit); launches a

new brand – True Roots that delays hair greying and launches its
first digital exclusive brand – Studio X; launched Saffola Fittify.

2019 – Marico announces association with Kaya, to create a

skincare sub-brand, Kaya Youth.
Source of Data collection

Source of data collection is a systematic way to solve the research problems. It

refers to search for knowledge a scientific and systematic search for information.
Research of productivity indication of a FMCG Company. is the systematic design,
collection, analysis.

Research Design
Research design is a comprehensive plan of the sequence of operation that a
researcher intends to carryout to achieve the objective of a research study and
provides the blueprint of the entire process involved in conducting a research. This
research is descriptive to determine the various process of Financial Analysis.

Data Collection
Data collection means collection of information, facts or figure for the problem.
Because of the uniqueness of research, the researcher collected secondary sources
of data for the study.
Secondary data is collected by others already and the researcher is using that
information for his own research purpose. In this study, data was collected through
online survey..

Sampling
In the present study purposive sampling was adopted. So that four berths were
chosen out of nineteen berths presently actively running for the operation purpose
by consulting with the Financial department of Marico Pvt. Ltd.

Data Analysis
Data analysis is a significant function of the study. After collection of data, the
researcher focused in his attention on analysis and interpretation. For analyzing
data, it involves data processing and data analysis. The study used simple
tabulation and cross tabulation for presenting findings. Also suitable charts were
used to present the data graphically.
Objective of study

Based on the inputs from the various literature studies, a research study was carried
out with the following objectives:

The main objective of the study is to find out the financial Statement Analysis of
Marico Pvt. Ltd.

Also know about the Balance Sheet, Profit & Loss account & also know the Asset
& Liability of the Marico Pvt. Ltd.

.
Literature review

The Literature review of this study will emphasis on the related studies on
comparing and analyzing financial statements to make an investment.

The basis of financial planning analysis and decision making is the financial
information (Statements). Financial statements are needed to predict, compare and
evaluate a firm’s earning ability. It is also required to aid in economic decision
making investment and financing decision making. The use of financial statement
analysis in investment decision has been addressed by a series of authors.

According to Gautam, U. S. (2005) Accountancy (P#215) Financial Statement is

generally explained as financial information which is the information relating to
financial position of any firm in a capsule form.

Financial statement according to J. A Ohison (1999) was defined as a written

report that summarizes the financial status of an organization for a stated period of
time. It includes an income statement and balance sheet or statement of the
financial position describing the flow of resources, profit and loss and the
distribution or retention of profit.

According to Pandey, I.M. (2005 Financial management) profitability is the ability

of an entity to earn income. It can be assessed by computing various relevant
measures including the ratio of net sales to assets, the rate earned on total assets
etc.

According to Meigns et al. (2001), Financial Statement simply means a declaration

of what is believed to be true and which, communicated in terms of monetary unit.
It describes certain attributes of a company that is considered to fairly represent its
financial activities
Limitation of the Study

Transactions are initially recorded at their cost. This is a concern when

reviewing the balance sheet, where the values of assets and liabilities may
change over time. Some items, such as marketable securities, are altered to
match changes in their market values, but other items, such as fixed assets, do
not change. Thus, the balance sheet could be misleading if a large part of the
amount presented is based on historical costs.

If the inflation rate is relatively high, the amounts associated with assets and
liabilities in the balance sheet will appear inordinately low, since they are not
being adjusted for inflation. This mostly applies to long-term assets.

A company may significantly change its operational structure, anything from

their supply chain strategy to the product that they are selling. When significant
operational changes occur, the comparison of financial metrics before and after the
operational change may lead to misleading conclusions about the company’s
performance and future prospects.

Ratio analysis is based on information that is reported by the company in its

financial statements. This information may be manipulated by the company’s
management to report a better result than its actual performance. Hence, ratio
analysis may not accurately reflect the true nature of the business, as the
misrepresentation of information is not detected by simple analysis. It is important
that an analyst is aware of these possible manipulations and always complete
extensive due diligence before reaching any conclusions.
CHAPTER-2
Data collection

Analysis
&

interpretation
Marico Limited is one of India's leading consumer goods companies providing
consumer products and services in the areas of health, beauty and wellness. With
its headquarters in Mumbai, Maharashtra, India, Marico is present in over 25
countries across Asia and Africa. Harsh Mariwala is the Chairman and Saugata
Gupta assumed the role of the Managing Director in March 2014 and is currently
the MD and CEO of this organisation. Marico Limited was established on 13th
October 1988 under the name of Marico Foods Limited. Later in 1989 the name of
the company was changed from Marico Foods Limited to Marico Industries
Limited. The first International office for Marico was set up in Dubai in year 1992.
Marico was first listed on Indian stock exchange in 1996.

Value added

CONSUMERS
The wealth of the Company is created by the patronage of consumers. The primary
focus of our efforts will be to understand what adds greatest value to them. We will
understand and respond to changing needs and desires of the consumer; and
translate these into marketable products and an ever–expanding base of loyal
consumers, with speed and a quality of response that surpasses the competition.
MEMBERSHIP
Wholesome membership is when a person brings his or her entire being into the
organisation. We will allow space for diversity and encourage genuine expression
of feelings, opinions and viewpoints. Equally important is the ability to listen
without bias and alter one’s view based on soundness. Interpersonal transactions
will be characterised by trust, empathy, faith, fairness and respect. Membership
gives each member a role in articulating and shaping the destiny of the
organisation which in turn builds commitment and ownership. We will encourage
teamwork and a shared approach to results as it promotes synergy, removes
communication barriers and improves the overall quality of decisions and
performance. Public acknowledgement creates recognition and also spurs others.
We will spontaneously recognise and appreciate both individuals and teams for
their contributions reflected in rising standards of performance.
EXCELLENCE
We will focus on policies and practices where people produce consistently superior
performance and where people are encouraged to discover their untapped potential.
Competent members will be careered through increased and varied role
responsibilities. They will be attractively compensated based on personal and
collective accomplishment.
WEALTH
All our efforts must culminate in the creation of wealth. We will do so by
continuously adding value in everything we do through a variety of methods. We
will use resources productively, eliminate waste, reduce cycle times and costs and
enhance the consumer base.
INNOVATION
The future of our organization rests on our willingness to experiment, push in new
and untested directions, think in uncommon ways and take calculated risks.
Continuous improvement should be a part of everyday work. We must also
innovate to achieve dramatic results. Members will be encouraged to experiment
and take calculated risks where necessary. We acknowledge that failure is inherent
in any new initiative. We will commit resources for experimentation and invest in
processes for reviewing and sharing of learning.
Brands:-

The organisation holds a number of

household brands such as Parachute,
Parachute Advansed, Saffola, Hair & Care,
Nihar, Nihar Naturals, Livon, Set Wet,
Mediker and Revive. In the international
market, Marico is represented by brands like
Parachute, HairCode, Fiancée, Caivil,
Hercules, Black Chic, Code 10, Ingwe, X-
Men and Thuan Phat.

 Male grooming – Set Wet, Beardo, Parachute Advansed Men Aftershower

Hair Cream
 Hair Care – Parachute, Parachute Advansed, Nihar Naturals, Nihar Naturals
Uttam, Hair & Care Fruit Oils, Mediker, Livon
 Edible Oils – Saffola
 Skin Care – Parachute Advansed Body Lotion
 Fabric Care – Revive
 Healthy Foods – Saffola Masala Oats & Saffola Fittify
Different Country and Products it offer’s

 INDIA:-

Coconut Oil

Parachute Coconut Oil

Nihar Naturals Coconut Oil
Nihar Naturals Uttam Coconut
Oil

Hair Oil

Parachute Advansed Coconut Hair Oil

Parachute Advansed Deep Conditioning Hot Oil
Parachute Advansed Aloe Vera Enriched Coconut Hair Oil
Parachute Advansed Jasmine Coconut Hair Oil
Nihar Naturals Sarson Kesh Tel
Nihar Naturals Shanti Amla Badam Kesh Tel
Hair & Care Fruit Oils
Nihar Naturals Shanti Jasmine Kesh Tel
Nihar Naturals Coconut Hair Oil

Anti Hairfall

Livon Hair Gain Tonic

Parachute Advanced
Ayurvedic Hair Oil
Parachute Advanced
Scalp Therapies Hair Oil
Hair Serum

△ Livon Hair Serum

△ Hair & Care Silk n Shine Leave-In Hair Conditioner

Skincare

△ Parachute Advanced Body Lotion

Male Grooming & Styling

△ Parachute Advansed
Men Aftershower Hair
Cream

△ Set Wet Hair Gels

△ Set Wet Beard Gels and

Creams

△ Set Wet Deodorants

△ Set Wet Blast Deodorants

△ Set Wet Hair Waxes

△ Set Wet Studio X

Range

Healthy Foods

Saffola Refined Edible

Oils
Saffola Aura – Olive & Flaxseed Oil

Saffola Masala Oats

Saffola Multigrain Flakes

Saffola Active Soups

Saffola Active Slimming Nutri Shakes

BANGLADESH:-

Coconut Oil

△ Parachute Coconut Oil

Hair Care

△ Parachute Advansed Cooling

Hair Oil

△ Parachute Advansed Extra

Care Hair Oil

△ Nihar Shanti Amla Badam Hair Oil

△ Parachute Advansed Ayurvedic Gold Hair Oil

△ Parachute Advansed Beliphool Hair Oil

△ Parachute Advansed Enriched Hair Oil

△ Hair Code Hair Dye

△ Hair Code Crème Hair Color

Skincare

△ Parachute Advansed Body Lotion

Male Grooming/Styling

△ Set Wet Deodorants

△ Set Wet Styling Gel Healthy

Foods

△ Saffola Masala Oats

△ Saffola Refined Edible

Oils

SOUTH AFRICA :-

Hair Care

△ Caivil

△ Black Chic

△ IsoPlus Healthcare

△ Hercules

△ Ingwe
VIETNAM :-

Male Grooming

△ X-Men Range

△ X-Men for Boss Food

△ Thuan Phat

MALAYSIA

Male Grooming

△ Code 10

MYANMAR

Male Grooming

△ Code 10 Hair Care

△ Hair & Care Silk n Shine Leave-In

Hair Conditioner

△ Parachute Advansed Coconut Hair Oil

 MENA

Hair Care

△ Parachute Gold Range Coconut

Oil

△ Parachute Coconut Oil Male

Grooming

Financial Stement:-

The term ‘financial analysis’, also known as analysis and interpretation of financial
statements’, refers to the process of determining financial strengths and
weaknesses of the firm by establishing strategic relationship between the items of
the balance sheet, profit and loss account and other operative data.

“Analyzing financial statements,” according to Metcalf and Titard, “is a process of

evaluating the relationship between component parts of a financial statement to
obtain a better understanding of a firm’s position and performance.”

In the words of Myers, “Financial statement analysis is largely a study of

relationship among the various financial factors in a business as disclosed by a
single set-of statements and a study of the trend of these factors as shown in a
series of statements.”

The purpose of financial analysis is to diagnose the information contained in

financial statements so as to judge the profitability and financial soundness of the
firm. Just like a doctor examines his patient by recording his body temperature,
blood pressure, etc. before making his conclusion regarding the illness and before
giving his treatment, a financial analyst analysis the financial statements with
various tools of analysis before commenting upon the financial health or
weaknesses of an enterprise.

The purpose of financial analysis is to diagnose the information contained in

financial statements so as to judge the profitability and financial soundness of the
firm. Just like a doctor examines his patient by recording his body temperature,
blood pressure, etc. before making his conclusion regarding the illness and before
giving his treatment, a financial analyst analysis the financial statements with
various tools of analysis before commenting upon the financial health or
weaknesses of an enterprise.

Financial Analysis

Financial analysis is the process of evaluating businesses, projects, budgets, and

other finance-related transactions to determine their performance and suitability.
Typically, financial analysis is used to analyze whether an entity is
stable, solvent, liquid, or profitable enough to warrant a monetary investment.
Financial analysis involves using financial data to assess a company’s performance
and make recommendations about how it can improve going forward. Financial
Analysts primarily carry out their work in Excel, using a spreadsheet to analyze
historical data and make projections of how they think the company will perform
in the future. This guide will cover the most common types of financial analysis
performed by professionals.
Financial analysis is the procedure of assessing organizations, projects, financial
plans, and other account-related exchanges to decide their performance and
appropriateness. Commonly, financial analysis is used to break down whether an
element is steady, fluid, or productive enough to warrant a financial investment.
Whenever conducted internally, financial analysis can assist administrators with
settling on future business choices or review historical trends for past triumphs. If
directed externally, financial analysis can assist investors in picking the best
possible investment opportunities.

Financial analysis is a fundamental piece of all business tasks as it encourages

litigable insights into the health and limit of the association later on. Thus, there
are several familiar means to analyze financial data such as measuring ratios from
financial statements and correlating these ratios to historical data of companies or
other opponent corporations.

There are some key elements of financial analysis, such as

 Income statement which indicates the performance of any business gains for
a particular period,
 Balance sheet which indicates the financial statements like assets and
liabilities, and
 Cash flow statement which indicates the cash inflows and outflows.

Types of Financial Analysis

 Horizontal Analysis
 Vertical Analysis
 Trend Analysis
 Liquidity Analysis
 Leverage Analysis
 Profitability Analysis
  Scenario & Sensitivity Analysis
 Variance Analysis
 Valuation Analysis

Horizontal Analysis

Horizontal analysis is an approach used

to analyze financial statements by
comparing specific financial information
for a certain accounting period with
information from other periods. Analysts
use such an approach to analyze
historical trends. Trends or changes are measured by comparing the current year’s
values against those of the base year. The goal is to determine any increase or
decline in specific values that has taken place. A percentage or an absolute
comparison may be used in horizontal analysis.

Pros – It helps to analyze the growth of the company from year on year or quarter
on quarter with the increase in operations of the company.

Cons – The company operates in the industrial cycle, and if the industry is
downgrading in spite of the company is performing better, due to specified factors
that affect the industry, trend analysis will
show negative growth in the company.

Vertical Analysis

Horizontal analysis involves taking several

years of financial data and comparing them
to each other to determine a growth rate. This will help an analyst determine if a
company is growing or declining, and identify important trends.

For example, in Income Statement, to disclose all the line items in percentage form
by taking base as Net sales. Likewise, in the Balance sheet on the asset side to
disclose all the line items in the percentage form of total assets.

Pros – The vertical analysis helps in comparing the entities of different sizes, as it
presents the financial statements in absolute form.

Cons – It represents the data of a single period only, so miss comparison across
different time phase

Trend Analysis

Trend analysis evaluates an organization’s financial information over a period of

time. Periods may be measured in months, quarters, or years, depending on the
circumstances. The goal is to calculate and analyze the amount change and percent
change from one period to the next.

Cons

Trend analysis helps the analyst to make a proper comparison between the two or
more firms over a period of time. It can also be compared with industry average.
That is, it helps to understand the strength or weakness of a particular firm in
comparison with other related firm in the industry.

Pros
It is not so easy to select the base year. Usually, a normal year is taken as the base
year. But it is very difficult to select such a base year for the propose of
ascertaining the trend. Otherwise, comparison or trend analyses will be of no value.

Liquidity Analysis

Liquidity Ratios consist of Current Ratio (Also known as Working Capital Ratio),
Quick Ratio (Also known as Acid Test), Operating Cash Flow Ratios, and
solvency ratio. The current ratio tells a company’s ability to pay off the debt
obligations. The quick ratio, also known as the acid test, is used for the same
purpose as the current ratio. The key difference is that Quick Ratio does not take
inventories into account. That means, it only takes cash and cash equivalent assets
like short-term investment securities to calculate Quick Ratio. Operating Cash
Flow Ratio shows how much strength a company has to cover all of its current
liabilities by the cash flow generated by the company’s operations.
The short-term analysis is carried out using the technique of ratio analysis, which
uses various ratios like liquidity ratio, current ratio, quick ratio, etc

Pros

It helps to get an idea on the liquidity position of the company.

It shows how a current asset-rich company is it.

Cons

The value of the Ratios may vary because of accounting standards/evaluation

methods of inventories.

The value of inventories changes over time, so ratio may change as well.
Leverage Analysis

Leverage ratios are one of the most common methods analysts use to evaluate
company performance. A single financial metric, like total debt, may not be that
insightful on its own, so it’s helpful to compare it to a company’s total equity to get
a full picture of the capital structure. The result is the debt/equity ratio.

Common examples of ratios include:

 Debt/equity
 Debt/EBITDA
 EBIT/interest (interest coverage)
 Dupont analysis – a combination of ratios, often referred to as the pyramid
of ratios, including leverage and liquidity analysis

Profitability Analysis

Profitability is a type of income statement analysis where an analyst assesses how

attractive the economics of a business are. Common examples of profitability
measures include:

 Gross margin
 EBITDA margin
 EBIT margin
 Net profit margin
Scenario & Sensitivity Analysis

Another component of financial modeling and valuation is performing scenario

and sensitivity analysis as a way of measuring risk. Since the task of building a
model to value a company is an attempt to predict the future, it is inherently very
uncertain.

Building scenarios and performing sensitivity analysis can help determine what the
worst-case or best-case future for a company could look like. Managers of
businesses working in financial planning and analysis (FP&A) will often prepare
these scenarios to help a company prepare its budgets and forecasts.

Variance Analysis

Business runs on estimates and budgets; after the completion of transactions, it is

of utmost importance to check the variance in between budget and estimates with
the actuals one. Such variance analysis will help in checking any loopholes in the
process, and hence it will help an entity to take corrective actions for avoidance of
the same in the future. Variance analysis can be carried out by standard
costing technique, comparing budgeted, standard, and actual costs.

Valuation Analysis

The process of estimating what a business is worth is a major component of

financial analysis, and professionals in the industry spend a great deal of time
building financial models in Excel. The value of a business can be assessed in
many different ways, and analysts need to use a combination of methods to arrive
at a reasonable estimation.
BALANCESHEET OF MARICO PVT. LTD.(2 YEARS) 2011- 2012

2012 2011
PROFIT & LOSS OF MARICO PVT. LTD.(2 YEARS) 2011- 2012

2012 2011
HORIZONTAL ANALYSIS

In general if current ratio is greater than its industry average then it is good for the
company.
Current ratio shows a firm’s ability to cover its current liabilities with its current
assets.
From the analysis, we can see that in 2012 the current ratio is 2.39 times of the
Marico Ltd whereas the Industry average is 2.01 times. It indicates that company
current ratio is in a
stronger position and the company has sufficient cash liquidity to meet its short-

term liquidity. This shows that Marico current ass ets are rising faster than current
liabilities. A higher current ratio is preferable.
VERTICAL ANALYSIS

In general, higher quick ratio is preferable than lower ratio. From the data above
, the industry‟saverage quick ratio is 0.9 times whereas the Marico‟s quick ratio is
1.26 times.

The comparison between the years 2011 and 2012 reveals that their quick ratio has
substantially decreased during the year. An in-depth analysis into the financial
statement shows that inventory has increased substantially and in contrast to the
current ratio, there is an overall reduction in the quick ratio.

So it indicates that if the quick ratio is lower that means the industry’s profit
margin was not so high that they can make some investments paying off the
liabilities that could result in an increase in assets and decrease in liabilities to
make the liquidity position far better.
Inventory Turnover Ratio

In general higher turnover ratio is better than lower. Inventory Turnover indicates
thee effectiveness of the inventory management practices of the firm.

From the analysis, it has clearly shows that Marico has relatively lower inventory
turnover ratio than industry. It indicates that the inventory level is higher that may
point to over stocking or deficiencies in the product line or marketing effort. High
inventory levels are unhealthy because they represent an investment with a zero
rate of return in addition to the increased cost associated with maintaining those
inventories. It also opens the company up to trouble should prices begin to fall.
The comparison with the past years projects a significant reduction in this ratio.
However further analysis shows that they have increased levels of inventory with
increased cost of which in turn decreases the overall ratio. An assumption can be
suggested, that increase prices in the commodities of especially raw materials
may be the cause of this increase
FIXED ASSET TURNOVER RATIO

The fixed asset turnover ratio indicates how efficiently the fixed assets are used to
generate sales. In contrast to the performance of the previous year it can be seen
that the fixed asset turnover ratio of Marico Bangladesh Limited has reduced.

A deeper analysis of the financial statements shows that the company has
purchased many fixed assets in 2012
and there also has been substantial addition during the year. In contrast to the
industry average the figures seem appropriate but it must increase its revenue to
increase this ratio
DEBT RATIO ANALYSIS

The debt ratio of Marico is 0.38, which suggests that 38 percent of their total assets
are their total liabilities. In contrast to their previous year’s ratio of 0.46, this is a
very positive sign for the company.

Their ratio is also better than the industry average which is also good for the
overall image of the company as this attribute increases the shareholder’s
confidence.
RETURN EQUITY RATIO

In general return on equity is the rate of return on the share holder equity. Higher
return on Equity is better than lower and vice versa. From the analysis, it shows
that Marico’s has higher return on equity than industry.

However in contrast to the previous year the ROE has drastically decreased and
the possible cause of this occurrence is the lower net income of 2012
Calculations
CHAPTER-3
FINDINGS
Current assets Ratio are decreased in two years.

 Current liabilities are Increasing by 52.4%

 cost ratio of the company has decreased during the period of 2011-12
 The fixed asset turnover ratio of the firm has in 2011-12 the ratio is 3.23 or
2.26 respectively and it decrease.
 Liquidity ratio of the firm is better liquidity position in over the two years. It
shows that the firm had sufficient liquid assets.
 Gross profit and net profits are decreased during the period of 2011-12,
which indicates that firm’s inefficient management in manufacturing and
trading operations
 This report work has identified how companies use financial statement
analysis and interpretation in making effective management decisions.
Overall organizational profitability and achievement of organizational
objectives were discussed. Again the difference between the returns of a
financial statement analysis and interpretation based on management
decisions were also discussed.
CHAPTER-4
RECOMANDATION

Marico Bangladesh Limited must control costs and increase their efficiency. The
distribution expenses must be decreased and some of their product lines must be
scrutinized for improvement. They should spend more efficiently in their
marketing in order to increase their customer base. They should focus more on the
products which have a declining market.

Their products compete in a highly competitive market and hence a slight loss of
market share can cause massive damages to their financial statements. In order to
cope up in the FMCG segment of the market Marico must spend more on their
marketing and promotion activities.
CHAPTER-5
CONCLUSION

The data analysis reveals some valuable findings pertinent to the financial
statements of Marico Limited. It can be observed that overall the ratios may have
declined to some
extent but they can surely be improved. The liquidity ratios have decreased in gene
ral but the currentratio has improved due to decrease in current assets. The
efficiency ratios have decreased as well due to the increase in fixed assets and the
profitability ratios has declined overall due to increased expenditures in the
plant and distribution expenses. Hence is can be stated that high turnover does not
generally indicate a good financial position.
CHAPTER-6
BIBILOGRAPHY

https://marico.com/

https://en.wikipedia.org/wiki/Marico

https://www.capitalmarket.com/Company-Information/Information/About-
Company/Marico-Ltd/12585

https://www.moneycontrol.com/financials/marico/ratiosVI/M13

https://byjus.com/commerce/5-limitations-of-financial-analysis/

https://economictimes.indiatimes.com/marico-ltd/stocks/companyid-5886.cms

https://www.business-standard.com/company/marico-12585/information/company-
history