PROJECT REPORT

VADILAL ENTERPRISES LTD.

M.Com IV Semester – Accounting
(Session 2020-21)

THE BHOPAL SCHOOL OF SOCIAL SCIENCES

Submitted To Submitted By
Dr. Amrita Sahu Jasmine Tirkey
Associate Professor Roll No. – 19103026
Department of Commerce

CERTIFICATE FROM THE PROJECT GUIDE

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This is to certify that the Project Report titled “Financial analysis of Vadilal Enterprises Ltd.”
is a bonafide work of Jasmine Tirkey enrollment number R170191050054 undertaken
for the partial fulfillment of Masters in Commerce (M. Com) degree of Barkatullah University under my
guidance. This project work is original and has not been submitted earlier for the award of any degree or
diploma of any other University or Institution.

Signature of the Guide

Dr. Amrita Sahu

Associate Professor

Department of Commerce,

BSSS, Bhopal

DECLARATION

I JASMINE TIRKEY daughter of Mr. John Gilver Tirkey certify that the project report entitled on
“Financial analysis of Vadilal Enterprises Ltd. ”, Financial analysis of Vadilal Enterprises Ltd. , prepared by
me is my personal and is authentic work under the guidance of Dr. Amrita Sahu, Associate Professor,
Department of Commerce.

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Date: 15/06/2021 Signature of the Student

Place: BHOPAL Name: Jasmine Tirkey

Class: M.COM (IV SEMESTER)

Roll Number: 19103026

ACKNOWLEDGEMENT

The present work is the consequence of the inspiration provided by my guide Dr. (Mrs.) Amrita Sahu,
The Bhopal School of social Sciences, Bhopal. I take this opportunity to convey my sincere indebtedness
to her for giving me valuable support and guidance. Her proficiency in the field of Commerce, constant
involvement and encouragement, compassionate and supportive outlook enabled me to conclude the
internship report work prolifically.

I take this opportunity to express my immense gratitude to thank Dr. Fr. John P.J. Principal, The Bhopal
School of Social Sciences whose support helped me in the culmination of the internship report.

I express my feelings and sense of appreciation to my family for their contribution and encouragement
in the course of my internship work.

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 TABLE OF CONTENT

List of Figures………..………………………………………………………………………. 7

Introduction………………………….…………………..…………………………………… 8-13

History
Product Details
Branches

Objective of Analysis……………………………………………………………….………….14

Analysis………………………………………..…………………………………………… 15-29

Analysis of Balance Sheet

Analysis of Statement of Profit and Loss

Analysis of Cash Flow Statement

Analysis of Ratios

Analysis of Trend

Problems……………………………………..…………………………………………… …29-30

Suggestion…………………………………………………………………………………..…..31

Conclusion……………...…………………………………………………………………..…..32

References……..……………………………………………………………………………….. 33

LIST OF TABLES

Table Page

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1. Balance Sheet of Vadilal Enterprises Ltd.………………….……………………………14-15

2. Statement of Profit and Loss of Vadilal Enterprises Ltd…..…………………………….16-17

3. Cash Flow Statement of Vadilal Enterprises Ltd ………………………………….…….19-20

4. Ratio Analysis of Vadilal Enterprises Ltd…………………………………………..…....21

5. Trend Analysis of Vadilal Enterprise Ltd…………………………………………………25-26

List of Figures

Figure Page

1. Graphical Representation of items of Balance Sheet of Vadilal Enterprise Ltd……….……. 15

2. Graphical Representation of Statement of Profit and Loss of Vadilal Enterprise Ltd ………18.

3. Graphical Representation of Cash Flow Statement of Vadilal Enterprise Ltd ………………20

4. Graphical Representation of Ratios of Vadilal Enterprise Ltd.…........................................22-23

4.1. Liquidity Ratio

4.2. Solvency Ratio

4.3. Profitability Ratio

4.4. Efficiency Ratio

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INTRODUCTION:

India being a nation of diversity has different cultures and tradition. And when it comes to food India
has a huge variety and range of sweets and desserts; and among these ice-creams becomes one such
desired option.

This preference has boosted the ice-cream industry in India and resulted as one of the fastest-growing
segments of the dairy or food processing industry. The industry is flourishing because of the
improving cold supply chain infrastructure in the country aided by the income and changing lifestyles of
the people of India.

And with the advancement of technology and various frozen alternatives the consumers can enjoy the
ice-cream throughout the year.

There are various brands in the race of ice-cream industry and on the list of top ice-cream brands in
India is Vadilal.

Vadilal Group mostly focuses on its Ice-creams and candies. They have been successful in capturing the
Indian ice-cream consumers. The very first outlet of this brand was started at Ahmedabad, Gujarat.
Today, they have more than 150+ flavors to offer to their consumers. The brand has healthy market
share in the states like Gujarat, Rajasthan, Madhya Pradesh, Uttar Pradesh and Haryana. With over a
decade in mastering the art of serving lip smacking ice-creams and frozen desserts, Vadilal has
transcended across borders, supplying its top-notch ice-creams to far away countries like USA as well.

With more than 27 Awards under its belt in the last few years, Vadilal is India’s highest awarded Ice-
cream Brand in India.

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Vadilal Enterprises Limited is a Public incorporated on 30 July 1985. It is classified as Non-government
Company and is registered at Registrar of Companies, Ahmedabad. Its authorized share capital is Rs.
20,000,000 and its paid up capital is Rs. 8,626,680. It is involved in Wholesale on a fee or contract basis.

Vadilal Enterprises Ltd. was promoted by Mr.Vadilal Gandhi who started ice-cream business in 1907.
Currently, the operations are managed by the third and fourth-generations of the family i.e. Mr. Rajesh
Gandhi, Managing Director, Mr. Devanshu Gandhi, Managing Director and Mr. Kalpit Gandhi, Director
and CFO (Son of Mr. Rajesh Gandhi). While Mr. Rajesh Gandhi looks after the overall operations of the
company, Mr. Devanshu Gandhi looks after the sales, marketing and distribution functions. Apart from
the finance function, Mr. Kalpit Gandhi looks after the plant operations on day to day basis.

Before heading to our main study, it becomes necessary to have an in depth knowledge about “Vadilal
Enterprise Ltd.”. This comprises of a brief history of the company, its branches and the products offered
by the Vadilal Enterprises Ltd.

HISTORY:

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 Vadilal Soda Fountain, Ahemdabad

1907

The foundation of the Vadilal Enterprises Ltd. was laid in the year 1907, when ice-cream was not even
an industry.

Initially, Mr. Vadilal Gandhi the founder of Vadilal Enterprises started a soda fountain in Ahemdabad as
a gruhudhyog. He practiced traditional Kothi method to make ice-creams. With a small hand-operated
ice-cream making machine he used to churn the milk with other ingredients, ice and salt.

Not only making fresh ice-creams he provided his customers with the facility of home delivery, ice-
creams packed in thermocol boxes.

1926-1973

Later Mr. Vadilal Gandhi passed on the business to his son; Ranchod Lal Gandhi. Ranchod Lal single-
handedly operated the business and started a small retail outlet in 1926. He then imported various ice-
cream making machines and expanded his small outlet to four ice-cream shops before independence. In
1950s, Vadilal introduced cassata ice-cream which became widely popular. And eventually this business
was passed to Ranchod Lal’s sons, Ramchandra and Lakshman. These two took the business to a new
level by imparting a new vision to the venture.

In 1970s, as a result to the new business model of calculated risk-taking, the company evolved into a
modern corporate entity and had in total 8 to 10 outlets in Ahmedabad.

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1985

With the time passing by in 1984-85 they decided to expand their business, outside Gujarat. And in
1987, Vadilal became the first fully automated line.

LATE 1990 TO NOW:

In the year 1993, Vadilal purchased the Bareilly unit and made major expansion
there.

In 1995, Vadilal became first Indian brand to export frozen vegetables to the US
market.

In 2000, when the entire ice cream industry was going through a low phase they
launched the iconic 1+1 scheme in the take home segment "Party Packs" and it was
a greatly successful scheme that it is now followed by all ice cream manufacturers
in the country.

In 2013, Vadilal has been voted as the "Most Trusted ice-cream brand in India" as
per the The Brand Trust Report-2013. Also, the Economic Times Survey ranked
Vadilal among the "Top 20 Food" brands in India. Vadilal Group received the most
coveted award for the Most Promising Brand of the Year in the Food & Beverage Sector at the
World Brands Summit 2014, which was attended by several big companies from the various
Industries across Asia.

PRODUCT DETAIL:

Vadilal has become famous for its authentic and wide variety of flavored Ice-cream. Vadilal has
evolved experimenting with new flavors

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and varieties to create delicacies enjoyed by many. Today, Vadilal Ice-creams have the widest
range of ice-creams in the country with 150 plus flavors available in more than 250 packs and
forms. The range includes Cups, Cones, and Candies, Juices, Family packs and Economy packs.
Vadilal is offers a wide range of Frozen Desserts, Premium & Super Premium Ice-creams. They
have Super-premium, exquisite range of ice-creams and frozen delights. Right from the classic
flavours and real fruit ice-creams to no-sugar delights. Vadilal Parlours serving scrumptious
scoops, flawlessly fashioned sundaes & tasty concoctions crafted from the best quality
ingredients and ice cream.
Vadilal Ice-cream range includes Cups, Cones, and Candies, juices, Family packs and Economy Packs.
Apart from ice-cream and frozen dessert, VIL also ventured into processed food business under the
brand ‘Quick Treat’. Also, Vadilal launched Badabite, Flingo and Gourmet which created a
storm in the Indian Ice-cream Market in 2011.

BRANCHES:

Vadilal ice-creams are prepared at its state-of-the-art factories located at Pundhra (Gandhinagar) and
Bareilly (U.P.). Each factory is equipped with technology of
international standards, and governed by strict Quality and
Food safety requirements. Vadilal makes sure that each
product undergoes careful scrutiny right from selecting each
of the ingredients, to their final dispatch from the factory. The
daily production capacity is around 3.25 lakh litres of ice-
cream. The production process is indicated through the
combined capacities of over 8 lakhs of cones and over 15
lakhs of cups per day. Each of the products go through more
than 50 quality checks ensuring only the best products reach
the consumers. Owing to the constant efforts towards plant
modernization, it has achieved high level of automatization in Vadilal Ice-cream Factory at Gandhinagar
the ice-cream production. Vadilal is among the few ice-cream
manufacturers in India wherein Kulfis are also made through 100% atomization.

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 They have established several ice-cream parlours
and more. Currently, they boast of several Vadilal
Scoop Shops & Vadilal Hangouts across India.
Nearly 300 SKUs (Stock Keeping Units) in leading
modern trade outlets like Reliance Fresh, More,
Hyper City, D-Mart, Food Bazaar and Star Bazaar,
etc

Vadilal ice-creams have its presence Pan-India and

are exported globally to USA, UK, Australia, New
Vadilal Ice-cream Shop Zealand, Gulf countries, and Nepal. Vadilal’s other
business interests include Frozen Foods under the
Vadilal Quick Treat brand. Vadilal has ventured in the artisanal gelato segment by opening its first gelato
store called ‘Melt In’ in Ahmedabad.

OBJECTIVE OF ANALYSIS:

❖ To put into practice the theoretical knowledge in the real working business scenario.
❖ To know the financial status of “VADILAL ENTERPRISE LTD.” before Covid19 and after Covid19.
❖ To evaluate the Vadilal Enterprise Ltd.’s financial information over a period of time.
❖ To calculate and analyze the amount change and percent change from one period to the next of
Vadilal Enterprise Ltd.
❖ To know the various problems faced by the Vadilal Enterprise Ltd. amid the hit of Covid19.
❖ To know the various solutions to the problems faced during the Covid19 pandemic
❖ To know the future steps taken by the Vadilal Enterprise Ltd. to cope up in the market after Covid19.
❖ To draw the conclusion on the basis of the analyzed data for the Vadilal Enterprises Ltd.

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ANALYSIS:

Without analyzing the collected data means a mere piece of information. Thus, Data Analysis is the
process of assigning meaning to the collected information and thereafter determining the conclusions,
significances and implications of the findings. This process of analyzing the data helps to make informed
decisions and not just through guessing or predictions. The insights obtained can be used to set and
identify trends in data.

The data used in the study are taken from the official website of the Vadilal Enterprise Ltd., where the
annual financial reports are published.

Assessment has been done on the basis of 6 years financial statement of the Vadilal Enterprise Ltd. The
data has been taken for the year 2015-16, 2016-17, 2017-18, 2018-19, 2019-20 and 2020-21
respectively.

Also, various tools of analysis of financial statements have been used such as Ratio Analysis, etc.

For the purpose of analysis, combined Balance Sheet has been made of 5 years.

Also, Statement of Profit And Loss has been made of 5 years, all combined.

And the cash flows from different activities namely Operating Activity, Investing Activity and Financing
Activity have been show for the above mentioned years.

Thus, the analysis part of the internship report consists of following sub-sections:

3.1. Analysis of Balance Sheet

3.2. Analysis of Statement of Profit and Loss

3.3. Analysis of Cash flow Statement

3.4. Analysis of Ratios

3.5. Analysis of Trend

3.1. ANALYSIS OF BALANCE SHEET:

A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders'
equity at a specific point in time, and provides a basis for computing rates of return and evaluating
its capital structure. It is a financial statement that provides a snapshot of what a company owns and
owes, as well as the amount invested by shareholders.

VADILAL ENTERPRISES LTD.

STANDALONE BALANCESHEET

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 (₹ in Lacs)
As at As at As at As at As at
PARTICULARS March 31 March 31 March 31 March 31 March 31
,2020 ,2019 ,2018 ,2017 ,2016

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 86.27 86.27 86.27 86.27 86.27
Reserves and Surplus 184.61 299.4 312.77 325.09 310.4
Total Shareholders Funds 270.88 385.67 399.04 411.36 396.67
NON-CURRENT LIABILITIES
Long Term Borrowings 972.04 1337.46 981.38 563.68 132.63
Other Long Term Liabilities 9.6 7.61 9.18 0 0
Long Term Provisions 55.77 51.43 17.62 45.49 45.16
Total Non-Current Liabilities 1037.41 1396.5 1008.18 609.17 177.79
CURRENT LIABILITIES
Short Term Borrowings 1087.49 809.99 555.81 799.13 80.37
Trade Payables 4457.22 3610.88 4707.67 3232.63 5105.57
Other Current Liabilities 8665.92 9083.93 7468.46 5959.33 5724.64
Short Term Provisions 214.79 192.24 171.17 126.4 110.99
Total Current Liabilities 14425.42 13697.04 12903.11 10117.49 11021.57
Total Capital And Liabilities 15733.71 15479.21 14310.33 11138.02 11596.03
ASSETS
NON-CURRENT ASSETS
Tangible Assets 6383.99 6022.93 4829.17 4754.28 4373.63
Intangible Assets 123.95 117.98 89.37 92.88 95.39
Capital Work-In-Progress 589.5 856.48 857.06 165.74 514.77
Fixed Assets 7097.44 6997.39 5775.6 5012.9 4983.79
Non-Current Investments 11.64 15.77 15.24 7.56 4.48
Deferred Tax Assets [Net] 305.7 262.84 184.69 184.09 183.15
Long Term Loans And Advances 1621.88 1546.79 1481.76 2543.15 2537.04
Other Non-Current Assets 767.31 831.66 895.47 15.88 40.13
Total Non-Current Assets 9803.97 9654.45 8352.76 7763.58 7748.59
CURRENT ASSETS
Inventories 2535.45 2152.05 2099.65 119.3 98.2
Trade Receivables 2503.44 2813.99 2492.9 2190.08 2240.3
Cash And Cash Equivalents 124.92 218.33 614.71 286.64 571.07
Short Term Loans And Advances 11.4 10.1 11.01 642.16 668.69
Other Current Assets 754.53 630.29 739.3 136.26 269.18
Total Current Assets 5929.74 5824.76 5957.57 3374.44 3847.44
Total Assets 15733.71 15479.21 14310.33 11138.02 11596.03

Table 1: Balance Sheet of Vadilal Enterprises Ltd.

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 Balance Sheet of Vadilal Enterprises Ltd.
16000

14000

12000
₹ in Lacs

10000

8000

6000

4000

2000

0 Equity Reserves Total Non- Total Total Non- Total

Fixed
Share and Current Current Current Current
Assets
Capital Surplus Liabilities Liabilities Assets Assets
As at March 31 ,2020 86.27 184.61 1037.41 14425.42 7097.44 9803.97 5929.74
As at March 31 ,2019 86.27 299.4 1396.5 13697.04 6997.39 9654.45 5824.76
As at March 31 ,2018 86.27 312.77 1008.18 12903.11 5775.6 8352.76 5957.57
As at March 31 ,2017 86.27 325.09 609.17 10117.49 5012.9 7763.58 3374.44
As at March 31 ,2016 86.27 310.4 177.79 11021.57 4983.79 7748.59 3847.44

Figure 1: Graphical Representation of items of Balance Sheet of Vadilal Enterprise Ltd.

Interpretation: The Table1 shows the Balance Sheet of Vadilal Enterprise Ltd. for year ending 2020,
2019, 2018, 2017, and 2016. Also, the Fig 1 shows graphical representation of various items from the
Balance Sheet.

3.2. ANALYSIS OF STATEMENT OF PROFIT AND LOSS

An income statement or statement of profit or loss is one of the financial statements of a

company and shows the company's revenues and expenses during a particular period.

It indicates how the revenues are transformed into the net income or net profit. The purpose of
the income statement is to show managers and investors whether the company made money
(profit) or lost money (loss) during the period being reported.

VADILAL ENTERPRISES LTD.

STATEMENT OF PROFIT AND LOSS

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 (₹ in Lacs)
As at As at
As at As at As at
March March
PARTICULARS March 31 March 31 March 31
31 31
,2020 ,2019 ,2018
,2017 ,2016

I Revenue from Operations 59150.57 57314.39 54585.94 51795 48827

II Other Incomes 258 284.2 309.37 187.6 155

III Total Incomes (I+II) 59408.57 57598.59 54895.31 51982 48982
IV Expenses:
Purchase of stock-in-trade 44410.75 43696.27 44740.47 42345 40490
Changes in Inventories of Stock-in-trade -358.8 -34.92 -1956.13 -11.5 3.16
Employee Benefits Expenses 4059.57 3572.99 2772.46 1959 1766.3
Finance Costs 312.42 368.84 250 158.1 92.76
Depreciation and Amortization Expenses 1386.29 1195.35 1060.95 948.5 783.25
Other Expenses 9646.4 8784.61 8005.83 6533 5816.8
Total Expenses (IV) 59456.63 57583.14 54873.58 51933 48953
V Profit Before Tax (III-IV) -48.06 15.45 21.73 49.1 28.95
VI Tax Expenses
(A) Current Tax 72.77 79.71 2.39 14.98 27.49

(B) Deferred Tax Expenses -38.03 -73.16 4.54 5.02 -15.48

(C) Short/ (Excess) Provision of Tax of Earlier Years 0 0 0 13.49 4.32
Total Tax Expenses 34.74 6.55 6.93 33.49 16.33
VII Profit for the year (V-VI) -82.8 8.9 14.8 15.61 12.62

Earnings per Share (of ₹10/- each)(not annualized):

- Basic -9.6 1.03 1.72 1.81 1.46
- Diluted -9.6 1.03 1.72 1.81 1.46

Table 2: Statement of Profit and Loss of Vadilal Enterprises Ltd.

Interpretation: Table 2 shows the Statement of Profit and Loss of Vadilal Enterprise Ltd for 5
consecutive years.

For the financial year 2018-19, company reported revenues from operations at ₹573 crore as
against ₹546 crore, showing a rise of 4.99 per cent in earnings, where as its profits had stood at

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₹9 lakh for the fiscal as against ₹15 lakh reported in the previous year, showing a dip of about 40
per cent on year-on-year basis.

Also, the Figure 2 shows the graphical representation of the major items namely Revenue from
Operations, other incomes, Total Income, Total Expenditure and Profit earned for past 5 years.

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 12.62
15.61
14.8
VII Profit for the year (V-VI) 8.9
-82.8

16.33
33.49
6.93
Total Tax Expenses 6.55
34.74

28.95
49.1
21.73
V Profit Before Tax (III-IV) 15.45
-48.06

48952.71
51932.99
54873.58
Total Expenses (IV) 57583.14
59456.63

48981.66
51982.09
54895.31
III Total Incomes (I+II) 57598.59
59408.57

155
187.58
309.37
II Other Incomes 284.2
258

48826.66
51794.51
54585.94
I Revenue from Operations 57314.39
59150.57

-10000 0 10000 20000 30000 40000 50000 60000 70000

As at March 31 ,2016 As at March 31 ,2017 As at March 31 ,2018

As at March 31 ,2019 As at March 31 ,2020 As at March 31 ,2021

Figure 2: Graphical Representation of items of Statement of Profit and Loss of

Vadilal Enterprise Ltd.

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 3.3. ANALYSIS OF CASHFLOW STATEMENT

The statement of cash flows, or the cash flow statement, is a financial statement that summarizes
the amount of cash and cash equivalents entering and leaving a company. The cash flow statement
(CFS) measures how well a company manages its cash position, meaning how well the company
generates cash to pay its debt obligations and fund its operating expenses. The cash flow statement
complements the balance sheet and income statement and is a mandatory part of a company's
financial reports. The CFS allows investors to understand how a company's operations are running,
where its money is coming from, and how money is being spent. The CFS is important since it
helps investors determine whether a company is on a solid financial footing. The main components
of the cash flow statement are:

1. Cash from operating activities

2. Cash from investing activities
3. Cash from financing activities

VADILAL ENTERPRISES LTD.

CASH FLOW STATEMENT

(₹ in Lacs)

As at As at As at As at As at
PARTICULARS March 31 March 31 March 31 March 31 March 31
,2020 ,2019 ,2018 ,2017 ,2016

Net Profit/Loss Before Extraordinary Items

And Tax -48.06 15.45 21.73 49.1 28.95
(A )Net Cash Flow From Operating
Activities 2231.76 1354.72 1698.06 -392.93 2790.8
(B) Net Cash Used In Investing Activities -1639.62 -2292.03 -1524.03 -833.27 -1741.96
(C) Net Cash Used From Financing Activities -687.38 510.03 129.67 942.53 -539.09
Net Inc/Dec In Cash And Cash Equivalents
(A+B+C) -95.24 -427.28 303.7 -283.67 509.75

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Cash And Cash Equivalents Begin of Year 163.05 590.33 286.63 570.3 60.55
Cash And Cash Equivalents End Of Year 67.81 163.05 590.33 286.63 570.3

Table 3: Cash Flow Statement of Vadilal Enterprises Ltd.

4000

3000 509.75

2000 303.7
510.03 129.67
2790.8
2231.76
1000 1698.06
1354.72
942.53
-392.93
0 0
As at March 31 ,2021 As at March 31 ,2020 As at March 31 ,2019 As at March 31 ,2018 As at March 31 ,2017 As at March 31 ,2016

-1639.62 -1524.03 -833.27 -1741.96

-1000 -2292.03
-283.67

-2000 -687.38 -539.09

-95.24 -427.28
-3000

-4000
(A )Net CashFlow From Operating Activities (B) Net Cash Used In Investing Activities
(C) Net Cash Used From Financing Activities Net Inc/Dec In Cash And Cash Equivalents (A+B+C)

Figure 3: Graphical Representation of items of Cash Flow Statement of Profit and Loss of Vadilal
Enterprise Ltd.

Interpretation: Table 3 and Figure 3 show the cash flow from operating, investing and financing
activities of the Company during past 5 years.

3.4. ANALYSIS OF RATIOS:

Ratio analysis is a quantitative method of gaining insight into a company's liquidity, operational
efficiency, and profitability by studying its financial statements such as the balance sheet and income
statement. Investors and analysts employ ratio analysis to evaluate the financial health of companies by

Page | 43
 scrutinizing past and current financial statements. Comparative data can demonstrate how a company is
performing over time and can be used to estimate likely future performance.

VADILAL ENTERPRISES LTD.

RATIO ANALYSIS

(₹ in Lacs)

PARTICULARS 2020 2019 2018 2017 2016

I LIQUIDITY RATIOS:
1. Current Ratio 0.41 0.43 0.46 0.33 0.35
2. Quick Ratio 0.24 0.27 0.30 0.32 0.34
II SOLVENCY OR LEVERAGE RATIOS:
3. Debt-Equity Ratio 3.83 3.62 2.53 1.48 0.45
4. Debt-Asset Ratio 0.07 0.09 0.07 0.05 0.02
III PROFITABILITY RATIOS:
5. Return on Net Worth (RONW)(%) -30.57 2.31 3.71 3.79 3.18
6. Return on Assets (ROA)(%) -0.526 0.057 0.103 0.140 0.109
7. Net Profit Margin (%) -0.14 0.02 0.03 0.03 0.03
IV EFFICIENCY RATIOS:
8. Assets Turnover Ratio (%) 375.95 370.27 381.44 465.02 421.06
9. Inventory Turnover Ratio(in times) 25.24 26.96 49.20 476.27 497.22

Table 4: Ratio Analysis of Vadilal Enterprises Ltd.

Figure 4: Graphical Representation Ratio Analysis of Vadilal Enterprise Ltd.

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0.50 0.46
0.45 0.41 0.43

0.40
0.35 0.34
0.33 0.32
0.35
0.30
0.30 0.27
0.24
0.25
0.20
0.15
0.10
0.05
0.00
2020 2019 2018 2017 2016

1. Current Ratio 2. Quick Ratio

Figure 4.1 Liquidity Ratio

4.50
3.83
4.00 3.62
3.50
3.00 2.53
2.50
2.00
1.48
1.50
1.00
0.45
0.50 0.07 0.09 0.07 0.05 0.02
0.00
2020 2019 2018 2017 2016

3. Debt-Equity Ratio 4. Debt-Asset Ratio

Figure 4.2 Solvency Ratio

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 10.00
3.71 3.79 3.18
5.00 2.31
-0.526 0.057 0.103 0.03 0.140 0.03 0.109 0.03
0.00
2020 -0.14 2019 0.02 2018 2017 2016
-5.00

-10.00

-15.00

-20.00

-25.00

-30.00
-30.57
-35.00

5. Return on Net Worth (RONW)(%) 6. Return on Assets (ROA)(%) 7. Net Profit Margin (%)

Figure 4.3 Profitability Ratio

600.00
497.22
500.00 465.02476.27

375.95 370.27 381.44

400.00 421.06

300.00

200.00

100.00 49.20
25.24 26.96
0.00
2020 2019 2018 2017 2016

8. Assets Turnover Ratio(%) 9. Inventory Turnover Ratio(in times)

Figure 4.4 Efficiency Ratio

Interpretation: The various Ratios calculated can be seen in the above table and figures. The Current
Ratio of the company gradually increases firm 2016 to 2019 but it was decreased in 2020 with current
ratio to 0.41. it can be said the company lacks the safe margin of Solvency, the Current Assets not
sufficient to make payment to the liabilities of the company.

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Also, the Quick Ratio of the company is also not favorable for consecutive 5 years.

The Debt-Equity Ratio of the company was good in the year 2016 i.e., 0.44 but it started increasing
above the ideal ratio of 1. This indicates that there is more usage of creditor financing.

The RONW or ROE of the company was increasing from year 2016 to 2018 but in the year 2019 it
decreased to 2.31. And in the year the ROE turned negative 30.57 which depicts that the Shareholders
fund are insufficiently used by the company.

The ROA is also declining for all the 5 years this indicates that the company’s assets are used inefficiently
to generate the Profits.

The Net Profit Margin of the company can be seen decreasing for the years and it turned negative i.e.,
there was loss in the year 2020 of -0.14%.

The Asset Turnover Ratio of the company shows a diminishing trend form 2016 to 2020.

The Inventory Turnover Ratio of the company for five years has severely decreased, this means company
is handling too much of inventories.

3.1. ANALYSIS OF TREND:

Trend analysis is a financial statement analysis technique that shows changes in the amounts of
corresponding financial statement items over a period of time. It is a useful tool to evaluate the trend
situations. Using the previous years’ data of a business enterprise, trend analysis can be done to observe
the percentage changes over time in the selected data. The trend percentage is the percentage
relationship, in which each item of different years bear to the same item in the base year. Trend analysis
is important because, with its long run view, it may point to basic changes in the nature of the business.
From this observation, a problem is detected or the sign of good or poor management is detected.

VADILAL ENTERPRISES LTD.

TREND ANALYSIS

(Values are in %)

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 PARTICULARS /YEARS 2020 2019 2018 2017 2016

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 100 100 100 100 100
Reserves and Surplus 59 96 101 105 100
Total Shareholders Funds 68 97 101 104 100
NON-CURRENT LIABILITIES
Long Term Borrowings 733 1008 740 425 100
Other Long Term Liabilities - - - - -
Long Term Provisions 123 114 39 101 100
Total Non-Current Liabilities 584 785 567 343 100
CURRENT LIABILITIES
Short Term Borrowings 1353 1008 692 994 100
Trade Payables 87 71 92 63 100
Other Current Liabilities 151 159 130 104 100
Short Term Provisions 194 173 154 114 100
Total Current Liabilities 131 124 117 92 100
Total Capital And Liabilities 136 133 123 96 100
ASSETS
NON-CURRENT ASSETS
Tangible Assets 146 138 110 109 100
Intangible Assets 130 124 94 97 100
Capital Work-In-Progress 115 166 166 32 100
Fixed Assets 142 140 116 101 100
Non-Current Investments 260 352 340 169 100
Deferred Tax Assets [Net] 167 144 101 101 100
Long Term Loans And Advances 64 61 58 100 100
Other Non-Current Assets 1912 2072 2231 40 100
Total Non-Current Assets 127 125 108 100 100
CURRENT ASSETS
Inventories 2582 2191 2138 121 100
Trade Receivables 112 126 111 98 100
Cash And Cash Equivalents 22 38 108 50 100
Short Term Loans And Advances 2 2 2 96 100
Other Current Assets 280 234 275 51 100
Total Current Assets 154 151 155 88 100
Total Assets 136 133 123 96 100

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 (Values are in %)

PARTICULARS /YEARS 2020 2019 2018 2017 2016

Revenue from Operations 121 117 112 106 100

Other Incomes 166 183 200 121 100
Total Expenses 121 118 112 106 100
Profit -656 71 117 124 100

Table 5: Trend Analysis of Vadilal Enterprise Ltd.

Interpretation: From Table 5 we can see the trend of various items during the period of 5 years. The
Equity Share Capital has been same for all the five years, there can be seen a reduction to 59% in
transfer of amount in the Reserve and Surplus for the year ending 2020 as this they might have used the
profit while operating the business. Also, there can seen an slow increase in Revenue of the company.
The trend of profit is a matter of concern as the profits have been decreased form year 2018 and loss
can been seen of 656% in the year 2020.

PROBLEMS:
IMPACT OF COVID-19

Vadilal, after running the business well for 5 consecutive years in the Indian economy was adversely
affected by the Novel Corona Virus in March 2020. Ice cream has not considered an essential
commodity. So, during the lockdowns, there was neither manufacturing nor transportation of ice cream.

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The ice cream industry had suffered during COVID-19 due to supply chain disruptions that
impacted the ice cream sales. Also, a lot of people were avoiding ice cream as they felt it may
make them susceptible to COVID-19.

Ice cream & food products player Vadilal Enterprises Limited has underlined a likely impact on
the company's business following the Covid-19 outbreak and the subsequent lockdown in the
country during the peak summer business season. Covid-19 has impacted the normal business
operations of the company by way of interruption in distribution, supply chain, closure of ice cream
shops and parlours during the lock-down period.

The summer season usually considered four months of March to June plays a vital role in Ice
cream business and impacts company’s sales greatly; almost 60 per cent of sales target is
achieved in the hot summer months.

However, this year, right at the onset of summer in February the corona virus presence started
being reported in India. Globally the Covid-19 cases started surging and consequent to this,
Government of India had declared lockdown on March 23, 2020.

DURING COVID-19
Apart from lockdown restrictions, ice cream sales were affected by fear or misconception that ice
cream makes one susceptible to COVID because one can catch a cold. Ice cream sales have
dropped by almost 50 percent in the lockdown period from March 24. Ice cream parlours,
restaurants are completely shut in the lockdown and also ice cream pushcarts were not allowed
adding to the woes of the ice cream industry.

Ice-cream manufacturing and distribution industry is capital intensive in nature requiring regular
investment in production facilities, innovative products in terms of flavours and packaging, as well as
marketing assets like cold storage chain, deep freezers, refrigeration equipped delivery vehicles, push
card, etc. Also, the inherent seasonality associated with the ice-cream business whereby its main raw
material (SMP) is largely available during the winter months leads to high working capital utilization as
on balance sheet dates.

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The higher cost of raw material combined with loss of sales due to Covid-19 impacted its profitability.

Further, there is large number of big and medium-sized ice-cream companies in India which leads to a
highly competitive environment. Vadilal faces high competition from various other established brands
like Amul, Havmor, Kwality Walls, Cream Bell, Mother Dairy, Top ‘N’ Town, Dinshaw’s, etc in its various
key markets. In addition, Vadilal faces competition from unorganized ice-cream manufactures at local
level.

SUGGESTIONS:

Looking upon the various hindrances in the business of the Vadilal Enterprises Ltd. they can come up in
the business in the future. The suggestions that can be followed by them to perform in the market post-
covid are:

➢ They can offer doorstep delivery to regain the consumer confidence in a very short span of
time.
➢ They may plan to list more of its ice cream
push carts on Swiggy or any such social
platform.
➢ To make up for the lost ground, ice cream
players have tied up with e-commerce websites
such as Big basket, Dunzo and also food
delivery companies such as Zomato and Swiggy.

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CONCLUSION:

Currently facing the impact of Covid-19 the Vadilal Enterprise Ltd. will surely be on track. With such
experienced promoters, long standing track record with a century-old brand ‘Vadilal’ and strong
marketing and distribution network the company will come up with the economy.

However, the company’s consolidated revenue is expected to fall 45%-50% in FY21. But with a
major success factor that can help them is their ability to carter different market segments through
multiple product ranges. And thus with its strong brand identity, good product quality, timely
supply and extensive reach will take them to a great success in a lifetime. This surely will help
them to bring them more close to their aim of becoming an Indian MNC in ice creams at an
affordable price without compromising on quality.

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REFRENCE:

http://vadilalicecreams.com/

https://www.thehindubusinessline.com/companies/covid-19-has-impacted-normal-business-
operations-vadilal-enterprises/article31736630.ece

https://www.careratings.com/upload/CompanyFiles/PR/07012021054954_Vadilal_Industries_Limite
d.pdf

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 PROJECT REPORT
SONY
M.Com IV Semester – Accounting
(Session 2020-21)

THE BHOPAL SCHOOL OF SOCIAL SCIENCES

Submitted To Submitted By
Dr. Amrita Sahu Jissa K John
Associate Professor Roll No. - 19103027
Department of Commerce

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