1

Financial Statements and Ratio Analysis of Reckitt Benckiser Ltd

Course Code: - FIN201

Course Title: - Business Finance

Section: - 3

Submitted To

Leo Vashkor Dewri

Senior Lecturer, Department of Business Administration,

East West University

Submitted By

Name ID Department
Hamid Al Hasan 2019-1-10-173 BBA
G.m Atiquzzaman Mahee 2019-2-10-152 BBA
Nayeem Mahmud 2019-1-10-190 BBA

Submission Date: 12-01-2022

2
 Index
Contents
Introduction........................................................................................................................................
Strategies and Forward
Planning..........................................................................................................
Ratio
Analysis..........................................................................................................................................
Cash
Flow ..............................................................................................................................................
Operating cost
structure.......................................................................................................................
Conclusion ........................................................................................................................................
.....
References..........................................................................................................................................
........

List of Graphs
Graph 1.1
Graph 1.2
Graph 1.3
Graph 1.4
Graph 1.5
Graph 1.6
Graph 1.7
Graph 5.1
Graph 5.2

3
Introduction:
Reckitt Benckiser (Bangladesh) Limited's distribution management is the subject of this study.
The report's goals are to provide a comprehensive picture of the organization's realistic sales and
distribution management system. It is mainly based on secondary data analysis and my
experience in the Dinajpur area and regional office in Bogra. Reckitt Benckiser (Bangladesh)
Limited's distribution strategy ensures brand availability by accepting correct orders and
maintaining appropriate stock levels. The issue has sometimes arisen as a result of distributors'
negligence.
Distributors have been known to make claims against top-level management and firm policies
for distributors, such as insufficient return on investment. Based on my little experience and
information gained while working in this industry, it is suggested that the firm maintain a careful
eye on its distribution route.
Strategies and Forward Planning
Strategy:
RB has delivered a decade of superior growth and shareholder value. However, with slower
market growth and increased competition, we need to reshape our strategy to enable us to
continue our track record of outperformance,” says Rakesh Kapoor, chief executive officer,
Reckitt Benckiser.
Under the new strategy, Reckitt Benckiser:
 Reckitt Benckiser Bangladesh Limited has a strict distribution strategy. It has two
mechanical tactics for achieving its goal: product push and consumer pull.
 Here, a product push strategy is one in which the distribution team "actively drives sell-
in" of Reckitt's product, influencing the buyer to purchase Reckitt's product.
 The customer pull approach is a mechanism that allows Reckitt's distribution team to rely
on "natural demand" for their product at the retail level. If merchants demand many
items, Reckitt can produce high-scaled income.
 The primary issues are separated into two teams, one for distribution and the other for
branding.
 The Power brand's successful approach remains, but the company's emphasis and
investment have shifted to higher-growth, higher-margin health, and hygiene products, in
addition to the home.
 Faster-growing markets are prioritized 16 "Power markets," mainly developing, are
prioritized for disproportionate investment and growth.
 Two new emerging market Area structures are developed due to the redeployment of
resources to developing markets (previously). North America and Europe were united
into a single Area.
 Maintains a steady operational margin growth approach: The company will maintain its
strategy of ongoing functional margin improvement over the medium term while
boosting brand investment. RB has reacted successfully to keep an endless supply of
supplies across the nation during these critical and unpredictable times, despite

4
 significant supply chain interruptions and protracted lockdowns. (RB-annual-report-
2019- 2020)
Forward planning:
 The plan is to maintain its current position while selling additional items of a different
kind. Reckitt Benckiser Ltd is dedicated to providing consumers with the best possible
solution. Reckitt Benckiser's goods are designed to simplify people's lives by delivering
solutions to difficulties.
 Reckitt Benckiser has implemented some initiatives as part of its social duty throughout
the globe, but they still need to invest in Bangladesh while keeping the socioeconomic
environment in mind. RB is dedicated to doing business in an ecologically responsible
and sustainable manner. Reckitt Benckiser has seven exceptional departments that have
improved the company's success.
 The Company has an underfunded gratuity plan in place. The Company's net liability for
defined benefit plans is computed for each project individually by calculating the benefit
that workers have earned in the current period, discounting that amount, and subtracting
the fair value of any plan assets. (59TH AGM-2020)
 They can give training to their labor to make products perfectly.
 Reckitt Benckiser Ltd is doing their best to respond to the disruption caused by COVID-
19 and taking all measures to ensure continuity of their business. (RB-annual-report-
2019- 2020)
Evaluation:
Reckitt Benckiser Group is a British global consumer products firm located in Slough that is
progressively working toward its objective of being one of the most trusted, respected, and
successful trading companies. Covid-19 has been slightly gift in disguise for the firm to expand
its operations, extend its influence internationally, and increase its market share as a global
consumer products corporation.
6. Operating cost structure

Operating cost Amount in Taka

Selling and distribution expenses 342579304
Administration cost 218868419
Technical services fees 151680678
Marketing expenses 657051945
Cost of Goods Manufactured 394198039
Cost of Goods Sold 619346252268.90
Total Operating Cost of 2020 1,306,056,183,920

5
  Selling and distribution costs involved those expenses related to transporting goods,
including vehicle costs, traveling, carriage outwork, Printing, stationery, etc.
 Administrative cost involves those expenses that help them monitor and adjust the
company's spending, including salary, legal expenses, office or factory rent, non-executive
director's fee, Trademarks, patents, Communication, Vehicle expenses. Travelling Printing
and stationery, etc.
 Technical services represent product design and anything related to art.
 Marketing expenses represent advertising, promotion of good advertising, distribution of
good, etc.
 Cost of goods includes raw materials of Soap Noodles, Hydrochloric acid, Isopropyl
Alcohol, Na Lauryl Ether, Castor Oil, etc., packaging material including bag, cartoon,
which is required to process the product from damage. The cost of production also includes
fuel, electricity costs.
 The cost of goods sold is the cost of resources used to make the product. It includes
material cost, labor cost, etc. It also has the cost Factory overhead and factors in Products
that are still work in progress and finished goods that are left out after selling.

Suggestion:
Reckitt-Benckiser can reduce their cost by reducing administrative expenses without affecting
their efficiency. To reduce administrative expenses, they can cut travel costs, rent different
equipment instead of buying them, and be more efficient about expenses on utility.
Conclusion
Reckitt Benckiser (Bangladesh) Limited is one of the most reputed global companies operating
in our country. Its positive image and brand equities have helped it foster growth throughout the
years since its establishment. The company focuses on presenting better solutions to the
consumers’ problems by continuously developing the existing products, introducing new
products, concentrating on new media opportunities, improving the communication system,
expanding the distribution network, and innovating new ideas. And all these activities are
undertaken by a set of superbly proficient and talented employees working with a proactive
outlook. The sales of Reckitt Benckiser (Bangladesh) Limited are mainly based on distributors.
Though the organ gram shows a good set of managers to ensure the best distribution, they have
no direct control over the sales. With the help of a solid strategic marketing plan and supports
from other departments, the distribution channel is running smoothly. Day by day, their sales
figure is increasing. Still, here they can develop their distribution efficiency if they follow the
things which have been recommended in the part of the recommendation.