Dabur Nepal

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Bachelors of Business Administration (Tribhuvan Vishwavidalaya)
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PROFITABILITY ANALYSIS OF DABUR NEPAL
Submitted By:
Saru Maharjan
Shwoyambhu International College
T.U. Regd. No: 7-2-0927-0235-2015
Roll no: 9270219
Group: Finance
Submitted To:
The Faculty of Management
Tribhuwan University
Kathmandu
In partial Fulfillment of the Requirement for the Degree of
BACHELOR OF BUSINESS STUDIES (BBS)
New Baneshwor, Kathmandu
May 2019

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DECLARATION
I hereby declare that the project work entitled PROFITABILITY ANALYSIS OF
DABUR NEPAL PRIVATE LIMITED submitted to the Faculty of Management,
Tribhuwan University, Kathmandu is an original piece of work under the supervision
of Mr. Raju Raut, faculty member, Shwoyambhu International College, New
Baneshwor, Kathmandu, and is submitted in partial fulfillment of the requirements for
the degree of Bachelor of Business Studies (BBS). The project work report has not
been submitted to any other university or institution for the award of any degree or
diploma.
Signature:
Name of the student: Saru Maharjan
Date:
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SUPERVISOR’S RECOMMENDATION
The project work report entitled “PROFITABILITY ANALYSIS OF DABUR NEPAL
PRIVATE LIMITED” submitted by Saru Maharjan of Shwoyambhu International
College, New Baneshwor, Kathmandu, is prepared under my supervision as per the
procedure requirements laid by the Faculty of Management, Tribhuan University, as
partial fulfillment of the requirements for the award of the degree of Bachelor of
Business Studies (BBS). I, therefore, recommend the project work report for
evaluation.
Signature:
………………………
Name of Supervisor: Mr. Raju Raut
Date:
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ENDORSEMENT
We hereby endorse the project work report entitled “PROFITABILITY ANALYSIS
OF DABUR NEPAL PRIVATE LIMITED” submitted by Saru Maharjan of
Shwoyambhu International College, New Baneshwor, Kathmandu, in partial
fulfillment of the requirements for award of the Bachelor of Business Studies (BBS)
for external evaluation.
Signature: Signature:
………………………………. …………………………………
Dr. Hari Sharan Chakun Mr. Suman Chaudary
Chairman Campus Chief/Principal
Management Research Committee Date:
Date:
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ACKNOWLEDGEMENT
This field work report entitled “PROFITABILITY ANALYSIS OF DABUR NEPAL
PRIVATE LIMITED” has been prepared in partial fulfillment for the degree of
Bachelor of Business Studies (BBS) under the teachers of Shwoyambhu International
College. It is my privilege of getting helps and co-operation from different persons. It
is not possible to enumerate the names of all of them. However, it will be matter of
injustice if I forget the names of those personalities whose valuable suggestions and
co-operation escorted to complete this field work report.
First and foremost, I would like to offer special thanks to Mr. Raju Raut for their
proper suggestions. I would like to thank all the staff of the DABUR NEPAL
PRIVATE LIMITED for their full support in providing all the necessary data, which
helped me in preparing this report. I could not remain without thanking to my teachers
and lecturers who all helped me during my study of BBS and during preparation of
this report.
Saru Maharjan
BBS 4th Year
Shwoyambhu International College

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TABLE OF CONTENTS
Title………………………………………………………………………………………….….i
Declaration....................................................................................................................ii
Supervisor’s recommendation...................................................................................iii
Endorsement..............................................................................................................iv
Acknowledgement.......................................................................................................v
Table of contents........................................................................................................vi
List of tables:............................................................................................................vii
List of figures:.........................................................................................................viii
Abbreviations.............................................................................................................ix
CHAPTER ONE INTRODUCTION.........................................................................1
1.1 Background of the Study.............................................................................................1
1.2 Organizational Profile.................................................................................................2
1.3 Statement of the problem............................................................................................6
1.4 Objectives of the study................................................................................................6
1.5 Rationale of the study.................................................................................................6
1.6 Limitation of the study................................................................................................7
1.7 Conceptual Review.....................................................................................................7
1.8 Review of previous works.........................................................................................12
1.9 Research Methodology.............................................................................................13
CHAPTER TWO RESULTS AND FINDINGS.......................................................18
2.1 Introduction...............................................................................................................18
2.2 Analysis of Secondary Data......................................................................................18
2.3 Analysis of Primary Data..........................................................................................31
2.4 Major Findings..........................................................................................................34
CHAPTER THREE SUMMARY AND CONCLUSIONS......................................35
3.1 Summary...................................................................................................................35
3.2 Conclusion................................................................................................................35
BIBLOGRAPHY......................................................................................................37
APPENDIX..............................................................................................................38
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LIST OF TABLES:
Table Page
No.
Table 2.2.1: Gross profit Margin…………………………….............................. 19
Table 2.2.2: Operating Profit Margin…………………………………………... 20
Table 2.2.3: Net Profit Margin…………………………………………………. 22
Table 2.2.4: Return on Assets…………………………………………………….23
Table 2.2.5: Return on Equity………………………………………………….…25
Table 2.2.6: Mean and standard deviation of Gross profit Margin……………….27
Table 2.2.7: Mean and standard deviation of Operating Profit Margin…………..28
Table 2.2.8: Mean and standard deviation of Net Profit Margin………………….29
Table 2.2.9: Mean and standard deviation of Return on Assets…………………..30
Table 2.2.10: Mean and standard deviation of Return on Equity…………………31
Table 2.3.1: Respondent Profile……………………………….……………….…32
Table 2.3.2: Response of the Questionnaire………………………………………33
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LIST OF FIGURES:
Figure Page No.
Figure 2.2.1: Gross profit Margin………………………………..... 19
Figure 2.2.2: Net Profit Margin……………………………............ 21
Figure 2.2.3: Net Profit Margin……………………………………. 22
Figure 2.2.4: Return on Assets……………………………………...24
Figure 2.2.5: Return on Equity……………………………………...25
Figure 2.3.1: Respondent Profile…………………………………….32
Figure 2.3.2: Response of the questionnaire…………………………34
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ABBREVIATIONS
BBS : Bachelor of Business Studies
DNPL : Dabur Nepal Pvt. Ltd
FMCG : Fast Moving Consumable Goods
GPM : Gross Profit Margin
NPM : Net Profit Margin
OPM : Operating Profit Margin
ROA : Return on Assets
ROE : Return on equity
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CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Profitability Analysis measures the amount of profit earned due to the efficiency of
any operation in a business. Profitability Analysis in operations essentially includes
evaluation of market segments or Strategic business units. Profitability analysis
mainly helps in analyzing this available information to evaluate and improve the
profits in an organization. These help in decision making and internal accounting in
the fields of sales, marketing and product management for a company.
Berggren and Bernshteyn (2007), Analysis of company performance demands joint

analysis, where they assess one measure relative to another. The relation between
income and invested capital, referred to as return on invested capital or return on
investment, is probably the most widely recognized measure of company
performance. It allows us to compare companies on their success with invested
capital. It also allows us to assess a company’s return relative to its capital investment
risk.
In pace of increasing complexity and horizon of business, Dabur Nepal Pvt. Ltd is the
company’s line of business includes the manufacturing, fabricating, or processing of
drugs in pharmaceutical preparations of human or veterinary use. Realization of the
growing significance of the business corporate in modern economy develops an
interest within me to analyze and understand the procedure and its profitability. So, as
to fulfill the partial fulfillment of the academic course of the Bachelor of Business
Studies (BBS), I have selected to study and prepare report on “Profitability Analysis
of Dabur Nepal Pvt. Ltd.”. The detail regarding my field work project are summarized
as follows which include meaning of FMCG Industry, introduction of Dabur Nepal
Pvt. Ltd and profitability review of Dabur Nepal Pvt. Ltd.
1.1.1 Introduction to FMCG
Fast-moving consumer goods (FMCG) are products that are sold quickly and at
relatively low cost. Examples include non-durable goods such as soft drinks,
toiletries, over-the-counter drugs, processed foods and many other consumables.
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Many fast-moving consumer goods have a short shelf life, either as a result of high
consumer demand or as the result of fast deterioration. Some FMCGs, such as meats,
fruits, vegetables, dairy products, and baked goods are highly perishable. Other goods,
such as pre-packaged foods, soft drinks, candies, and toiletries have
high turnover rates. Sales are sometimes influenced by holiday and/or seasonal
periods and also by the discounts offered. The profit margin on FMCG products can be
relatively small, but they are generally sold in large quantities; thus, the cumulative
profit on such products can be substantial.
1.2 Organizational Profile
Dabur Nepal Private Ltd. is a private company incorporated under the Companies Act,
2063 of Nepal on Baisakh 26, 2046 with registered no. 3506/045-46. On Bhadra 26,
2049, Dabur India ltd acquired DNPL with 97.5%of its shareholding, thus, making
DNPL a foreign subsidiary of Dabur India Limited. The administrative office is
situated at TNT Building, Tinkune, Kathmandu.
Utilizing local nature and natural resources for manufacturing, Dabur Nepal has been
manufacturing and selling Ayurvedic medicine for over a century now. Established
with the vision of eco-sustenance and expanding Dabur’s resource and production
base, Dabur Nepal Private Limited was set up in Nepal in the year 1992 as an
independent group company. Dabur Nepal has been involved in various fields and
sectors such as health care, personal care, food products, home care and consumer
health- ethical along with professional range.
Established with the objective of producing and dispensing Ayurvedic medicine to a

wide mass of people who had no access to proper treatment, Dabur was the result of
commitment and ceaseless efforts of Dr. S.K. Burman, a physician living in Bengal, in
1884. He carried the mission of providing effective and affordable cure for ordinary
people in far-flung villages and for that purpose, he started preparing natural cures for
some of the killer disease of the time that are cholera, malaria and plague among
others. His efforts paid up and he soon, became famous as ‘Daktar’ (Doctor) who had
effective cures. The word “Daktar Burman” gave name to one of the biggest ventures
in South Asia, known as Dabur. The small medicine manufacturer company based in a
small house in Calcutta soon became a household name all over India and Nepal.
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For its commitment and dedication to high quality services and products, Dabur Nepal
Private Limited has received several awards and honors such as Overall Excellence
Award of Nepal-India Chamber of Commerce and Industries in the year 2000 along
with Best Exporter Award of Export Promotion Board, Ministry of Commerce, His
Majesty Government Nepal (now Nepal Government) in the same year. Two years
later, in the year 2002 it received the Certificate of Hazard Analysis and Critical
Control Point (HACCP) plan verification for manufacturing of fruit juices and tomato
puree. In the same year, it also managed to increase its turnover by over 19 percent. In
January 2003, its manufacturing facilities and systems got certified for having met the
requirements of Codex Alimentarious Commission Guidelines, Recommended
International Code of Practices, General Principles of Food Hygiene.
Under its health care sector, the company offers wide variety of Ayurvedic and natural
products which offers complete care for varying needs of many individuals. The
products that are made in traditional Ayruvedic ways are tested and tried using most
modern scientific methods which ensures the quality and safety from the product.
Some of the products under this division are Pudin Hara and Hajmola for digestives,
Chyawanprash and Honey for health supplements and Dabur Honiturs, Gripe water
and Dabur Lal Tail for OCT health care.
Dabur home products Established with the objective of making you look and feel
good, Dabur Nepal Private Limited has a wide variety of herbal and Ayurvedic
Personal Care products on offer, categorized into various groups such as Hair Care
(hair oil and shampoo – Dabur Amla hair oil, Dabur Vatika Coconut hair oil and
Dabur Almond hair oil; Dabur Vatika – black olive and almond/ henna and olive/
lemon and henna/ lemon and tea tree oil shampoo), Skin Care (Dabur Gulabari
Gulabjal/Face Refresher/Moist, Fem Fairness Bleach, Dabur Uveda Range) and Baby
Care (Dabur Lal Tel, etc.) along with Oral Care (Dabur Red toothpaste, Dabur Babool
toothpaste).
Established with the objective of providing packaged fruit juices (a new concept in
India as well as Nepal that started in the year 1997), Dabur started the processing and
packaging food industry to take over the responsibility. Abiding by its commitment, it
has been successful to provide quality food products to the people, however, in Nepal,
it had gotten in controversy for not following the quality standards in the context of
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packaging and distribution of Real Juice. The wide variety of choices that it offers for
food products are Real Fruit Juice, Real Active Fruit and Vegetable Juice, Burrst Fruit
Beverage, Hommade, Lemoneez and Capsico.
Dabur Nepal Home care product was initiated with the objective of making the living
space not only feel good but also smell good all day long. Moreover, it also helps in
keeping the family healthy along with keeping the house clean and fresh. Some of the
products offered under this division include Odonil to keep home fresh with good
smell, Odomos to protect you from mosquitoes, Odopic for clean and fresh smelling
dishes, Sanifresh Shine for keeping the toilet sparkling clean and germ free and Dazzl
to give shiny and germ free mirror, floors, kitchen and glass surfaces.
Dabur Nepal has also been involved in the production of consumer health products by
blending the traditional knowledge of drug manufacturing with scientific update.
Redefining Ayurvedic market and healthcare promotion activities, Dabur’s Consumer
Health division looks after marketing of Ayurvedic medicines and other products.
More than 350 classical Ayurvedic preparation methods at Dabur forms an important
part of every Ayurvedic practitioner’s daily practice. The products under this division
are categorized as General Health care products (Stresscom, Broncorid and
Madhuvaani), Digestive support (Trifgol and Lipistat) and Joint support (Rheumatil
Gel, Rheumatil Tab, Rheumatil Oil and Mensta).
The Personal Range products of Dabur Company have made an immense contribution
to the professional grooming market. These products strive to meet the personal
grooming needs of the consumers who want to protect their skin from various factors.
The personal products are made available to the consumers through parlors, salons
and some of its outlets all across the country. Some of the products under this division
are Oxylife Facial, Fem Queen’s Pearl Facial, Fem Gold Facial and Fem Body
Bleach.
The company is also involved in many environmental conservation and other social
activities to stay committed to its Corporate Social Responsibility. Some of them are
Medicinal Plants Project (which attempts to protect the medicinal plants that have
immense values in Ayurvedic medicines), Nursery and Bee-keeping Development
Program (for production of medicinal plants and honey).
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1.2.1 Share composition of DNPL
Following is the share capital composition of the bank as at 31st March, 2018:
Authorized Capital : NRs 140,000,000 (1,400,000 shares of NRs 100 each)
Issued Capital : NRs 8, 00, 00,000 (8, 00,000 shares of NRs 100 each)
Paid up Capital : NRs 798, 52,000 (798,520 shares of NRs 100 each)
1.2.2 Boards of Directors
 Dr. Anand Burman - Chairman

 Mr. Amit Burman - Vice chairman
 Mr. P.D Narang - Whole time Director
 Mr. Sunil Duggal - Whole time Director and CEO
 Mr. Mohit Burman - Director
 Mr. Saket Burman - Director
 Mr. P. N. Vijay - Director
 Mr. R C Bhargava - Director
 Dr. S. Narayan - Director
 Dr. Ajay Dua - Director
 Mr. S. K. Bhattacharyya - Director
 Ms. Falguni Nayar - Director
1.2.3 Organizational Structure of DNPL

Marketing Head
Dabur Nepal Private Limited

Executive Director
Finance Head
(operations)
Chairman
Chief Executive Human Resource
Officer Head
Units Heads Quality Control Head
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1.3 Statement of the problem Production Head
Dabur Nepal Pvt. Ltd is a subsidiary of Dabur India Ltd one of the India’s leading fast
moving consumer goods companies with revenue over 7,680crore and market
capitalization of over 48,800crore. Even if they are leading fast moving consumer
goods company they have to face some issues due to different political issues in
context to Nepal. They fail to maintain same level of position in its financial report.
This study will focus on the following problems:
 What is the situation of sales and production activities related to profit?
 Is Dabur Nepal Pvt. Ltd producing a return on investment that’s

acceptable, given the resources employed?
1.4 Objectives of the study
The study is concerned with evaluating the profitability of Dabur Nepal Pvt. during
last five years. So, the objectives of the study are as follows:
 To know about the situation of sales and production activities related to

profit.
 To find out the position of Dabur Nepal Pvt. Ltd in terms of

profitability generated in last five years.
1.5 Rationale of the study
Fast moving consumer goods plays a vital role in community, society, nation and
global. FMCG companies are identified by their ability to give the consumer the
products that are highly demanded, while also developing a relationship with them
that involves trust and loyalty. At the moment, the Fast Moving Consumer Goods
Industry has a value of over $570.1 billion. 2015 was said to have been one of the best
for the industry. This study has proposed to understand the situation of FMCG
industries in country. This study also adds new ideas and findings about FMCGs
industries. This study can be fruitful to various readers and groups who are willing to
know about the FMCGs industries.
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 This study will provide information to those who are willing or

planning to invest in FMCGs companies.
 Important to the group of interested parties for the evaluation of

FMCGs company performance.
 Important to the government bodies or the policy makers.
 The study will help general public to know about the overall financial
status of Dabur Nepal Pvt. Ltd.
So, this study will help to identify its strength and weakness of the FMCGs as well as
DNPL regarding financial position.
1.6 Limitation of the study
The finding of the study is subject to various limitations and may not be applicable in
area other than specified. Despite of the effort to collect all the information data for
overall analysis of organization and system, there are still some limitations of the
study because of various reasons and they are as follows:
 The data used for the study will be historical and it will cover the period of
recent five years.
 The concentration of the study will be on statistical, accounting and financial

perspectives.
 The truth of the study will be based upon the available data from the company
in the form of annual reports, broachers, and information received with the
related personnel of the company.
 The accuracy and correctness of ratio depends upon the reliability of data.
1.7 Conceptual Review
The literature review means, the process of reading, analyzing, evaluating and
summarizing scholarly materials about a specific topic. The results of a literature
review may be compiled in a report or they may serve as part of a research article,
thesis, or grant proposal. Literature review is accounts that have been publish on a
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research area. Literature review is secondary sources of new research conducted by

the previous researcher. This also highlighted on critical points that related to the new
research as well as strength and weakness of previous studies. A literature review is a
step-by-step process that involves the identification of published and unpublished
work from secondary data sources on the topic interest, the evaluation of this work in
relation to the problem and the documentation of this work (Sekaran, 2010).
Review of supportive text provides the fundamental theoretical framework and

foundation to the present study. For this various books, research papers, articles, blogs
etc. dealing with the theoretical aspects of investment and portfolio analysis are taken
into consideration.
In marketing, a product is anything that can be offered to a market that might satisfy a
want or need. In retailing, products are called merchandise. In manufacturing,
products are purchased as raw materials and sold as finished goods. Commodities are
usually raw materials such as metals and agricultural products, but a commodity can
also be anything widely available in the open market. Similarly, FMCGs are the
products which are consumed by its consumers rapidly all over the world. The
“consumer” is the one who consumes the goods and services produced. As such,
consumer play a vital role in the economic system of a nation because in the absence
of the effective demand that emanates from them, the economy virtually collapses.
These ratios, much like the operational performance ratios, give users a good
understanding of how well the company utilized its resources in generating profit and
shareholder value. The long-term profitability of a company is vital for both the
survivability of the company as well as the benefit received by shareholders. It is
these ratios that can give insight into the all-important "profit".
According to Easton Peter (1991), we will look at four important profit margins,
which display the amount of profit a company generates on its sales at the different
stages of an income statement. The three ratios which are Return on Assets, Return on
Equity and Return on Capital Employed - detail how effective a company is at
generating income from its resources.
Based on Patrick R. Barton (2002), he states financial ratios are useful indicators of a
firm’s performance and financial situation. Most ratios can be calculated from
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information provided by the financial statement, financial ratios are calculated from
one or more pieces of information from a company’s financial statements. In context a
financial ratio can give a financial analyst an excellent picture of a company’s
situation and the trends that are developing.
Bossidy et al., (2002), the level of return on invested capital depends primarily on the
skill, resourcefulness, ingenuity and motivation of management. Management is
responsible for a company’s business activities. Information about the efficiency of
portfolio investment, in this context, unit trust funds, is important to investors, simply
because investors are motivated to ensure the maximum return on their investments.
According to Pamela Petterson Drake (2004), financial analysis is the evaluation

selection and interpretation of financial data, along with other pertinent information,
to assist an investment and financial decision making. Financial analysis may be used
internally to evaluate issues such as employee performance, the efficiency of
operations and credit policy and also externally to evaluate potential investment and
the credit worthiness of borrowers among other things. As we know, we used past
financial statement to evaluate the company current condition and financial future. By
analyzing the statement, we can assess the company’s financial strength and
weakness.
The use of ratios enables comparisons to be made between figures of

incommensurable size and therefore acts as an indicator of performance. They provide
management with a tool, which when used in conjunction with other data, can be used
for evaluating their own company's performance. Ratios may be used to illustrate the
broad aspects of financial and managerial performance. According to K. R.
Subramaniam and John Wild (2009), ratios can also be used to help assess the effects
of internal and external environmental factors upon the company, for example
managerial decisions, governmental legislation, economic factors and so on.
Dr. S.K. khartik titto Varghese, (2011) they found the profitability more or less
depends upon the better utilization of resources and to manpower. It is worthwhile to
increase production capacity and use advance technology to cut down cost of
production and wage cost in order to increase profitability, not only against the
investment, but also for investor’s return points of view.
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Asha Sharma and R.B. Sharma, (2011) these attempts identify and study the
movement of key financial parameters and their relationship with profitability of
textile industry. It is an attempt to and the study whether the key identified parameters
move in a synchronous way going up and coming down with basic profitability
parameters. All three comparably profit-making companies have been taken as the
sample for the study for the period of 2006 to 2010.
The term FMCG (Fast moving consumer goods), although popular and frequently
used does not have a standard definition and is generally used in the world to refer to
products of everyday use. Conceptually, however, the term refers to relatively fast
moving items that are used directly by the consumer. Thus, a significant gap exists
between the general use and the conceptual meaning of the term FMCG.
Profitability Analysis measures the amount of profit earned due to the efficiency of
any operation in a business. Profitability Analysis in operations essentially includes
evaluation of market segments or strategic business units. Profitability analysis
mainly helps in analyzing this available information to evaluate and improve the
profits in an organization. These helps in decision making and internal accounting in
the fields of sales, marketing and product management for a company.
1.7.1 Concept of FMCG Industries
FMCG refers to consumer non-durable goods required for daily or frequent use.
Typically, a consumer buys these goods at least once a month. FMCG companies sell
their products directly to consumers. Most product categories in FMCG require
relatively minor investment in plant and machinery and other fixed assets. Also, the
business has low working capital intensity as bulk of sales from manufacturing take
place on cash basis. Fast moving consumer goods (FMCG) or also called consumer
packaged goods (CPG) are products that are sold quickly and at relatively low cost.
Many fast-moving consumer goods have a short shelf life, either as a result of high
consumer demand or as the result of fast deterioration. Some FMCGs, such as meats,
fruits, vegetables, dairy products, and baked goods are highly perishable. Other goods,
such as pre-packaged foods, soft drinks, candies, and toiletries have
high turnover rates. Sales are sometimes influenced by holiday and seasons.
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The profit margin on FMCG products can be relatively small, but they are generally
sold in large quantities; thus, the cumulative profit on such products can be
substantial. FMCG is a classic case of low margin and high volume business.
FMCG (fast moving consumer goods) is an industry which is highly dynamic and
innovative. To succeed in this industry, you need to be adaptable, quick-learning, and
entrepreneurial, traits which are attractive to many of our young candidates. There are
some great opportunities in FMCG – China is the world’s biggest consumer market,
estimated to be worth over $1.7 trillion dollars, and a huge part of this market is still
untapped. There is huge growth potential in the market, and working in the FMCG
industry allows you the opportunity to be on the cutting-edge of new products and
innovative marketing schemes.
1.7.2 Functions of FMCG industries
As already mentioned FMCGs are those products which are consumed by its
consumer within short period of time, they are to be critically examined before and
after its packaging. FMCGs industries have its many primary functions in market as
well as society. FMCG industry is the most wide spread industry of the world, that
deals with the production, packaging, distribution and marketing of consumer goods.
Not to mention the consumers of FMCG is the population around the globe.
The major functions of FMCGs industries are:
 Serving its customer, dealing with any queries and providing consumable
goods is the main function of FMCGs industries.
 Recruiting a new staffs in its company or we can say providing employment

opportunities for the public is also its function. There are number of good
employment prospects in this industry.
 It also has another responsibility towards society known as CSR. As working

in within the society they need to come up with helping attitude towards the
society.
 As investments, FMCG stocks are a generally low-growth, but safe bets with
predictable margins, stable returns and regular dividends.
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 Innovation is a consistent process in the FMCG industry. They continually

need to come up with new ideas.
1.8 Review of previous works
Many researchers have shown keen interest towards the FMCGs financial position in
its market and FMCGs scope in worldwide market. They also have published their
articles, blogs, findings and research. However, I must be thankful to all these groups
for sharing their findings and letting me know about their findings.
Neupane and Agrawal, (2013) have conducted case study on the title of Assessment of
Capital Tied Up in Finished Inventory And its Impact on Profitability (Case of Real
Fruit Juice: A product of Dabur Nepal Pvt. Ltd.).The basic objective of their case
study were:
 To examine the variance between target and actual sales and production to
analyze the trends of finished inventory periodically.
 To analyze the financial performance with some financial ratios.
 To provide recommendation and suggestions for improving the finished

inventory management with regards to cost of capital tied up.
Major findings of his study are given below:
 Sales performance of the company seems satisfactory but it could be more

improved over the years than what they were. The company has not been able
to meet the peak season sales target successfully over the years.
 Company is found to be struggling with the utilizing production capacity.

Production function of the company is dependent on sales performance.
 Regarding finished inventory, the company does not have a practice of

keeping large quantity of the product. Rather it has been operating with
comparatively lower inventory levels. Due to fast moving nature of the
product, the company has been able to avoid excessive investment in finished
inventory. But it could be risky to operate with such lower inventory level.
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 Profitability of an enterprise is dependent on several factors related to sales,

production, inventory, working capital utilization etc. but basically profits are
dependent on revenues and expenses of the enterprise.
Shrestha, (2013). Has prepared PowerPoint slides entitled “Profitability Analysis of

Dabur Nepal” which is also relevant in our research. In his study he has included
Working Capital Management as a tool kit to measure profitability of DNPL. The
objectives of his study were to analyze the relationship between working capital
efficiency and profitability in DNPL. To examine the relationship between leverage
and profitability of DNPL. Further he has used Descriptive Statistics, Correlation
Analysis and Regression Analysis techniques to complete his study on profitability
analysis of Dabur Nepal.
The major findings of his study were:
 DNPL has significant Return of Assets. This is reflected in increasing

profitability of DNPL.
 Leverage has negative correlation with liquidity as shown by negative

correlation with Quick ratio and Current ratio.
 The level of Debt in DNPL has reached high levels some years ago; however
DNPL were able to regain better position.
1.9 Research Methodology
Research methodology is a way to systematically solve the research problem. It may

be understood as a science of studying how research is done scientifically. In it we
study various steps that are generally adopted by a researcher in studying his research
problem along with the logic behind them. It is necessary for the researcher to know
not only the research methods/techniques but also the methodology. (Kothari, 2004)
The major contents of research methodology followed in course of this study includes
research design, nature and source of data, research variables, statistical tools used,
research procedure followed.
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1.9.1 Research design
The research design of this proposed study is analytical as well as descriptive. The
main objective of this analytical and descriptive study is to highlight the degree of
impact of different variables on profitability in DNPL with respect to different aspects
such as sales, production, profit, cost, structures etc. This study is also an examination
and evaluation of existing practices on the management of total revenues and
expenses in DNPL. The present work is mainly related with DNPL’s profitability so,
analytical approach has been considerably adopted to present and analyze the data. In
this way, this study will be considered to comprise both qualitative and quantitative
aspects of the study to reach in fulfilling the objectives.
1.9.2 Population and sample
Sampling is the process of obtaining information about an entire population by

examining only a part of it. In most of the research work and surveys, the usual
approach happens to be to make generalizations or to draw inferences based on
samples about the parameters of population from which the samples are taken. The
researcher quite often selects only a few items from the universe for his study
purposes. All this is done on the assumption that the sample data will enable him to
estimate the population parameters.
1.9.3 Sources of data
The selection for the suitable tools is of vital importance for successful research. The
research work may use one or more of the tools in combination. To attain the
objectives of this study, both primary and secondary sources of data have been used.
The data and information that have been used in this study have been collected from
the following sources:
 Official records and publications of DNPL
 Published and unpublished related document
 Books, booklets, magazines published
 Observation
 Questionnaire
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1.9.4 Methods of data analysis
Various financial, graphical and statistical tools are used to analyze, present and
interpret data in the study work. Data collected from various sources are managed,
analyzed and presented in proper format and are interpreted and explained whenever
necessary. The tools used in this study to describe and analyze are mostly related with
accounting, finance and statistics which are as follows:
I. Financial tools
Profitability Ratio: Ratio Analysis is one of the major financial analysis to get the
effectiveness of each item in comparison to another item extracted from balance sheet
or income statement.
1. Gross Profit Margin Ratio (GPM)
Gross profit is what is left after the costs of goods sold have been subtracted from net
sales. (Cost of goods sold, also called “cost of sales”, is the price paid by your
company for the products it sold during the period you are looking at. It is the price of
the goods, including inventory or raw materials and labor used in the production, but
it does not include selling or administrative expenses.)
The ratio of gross profit as a percentage of sales is an important indicator of your

company’s financial health. Without an adequate gross margin, a company will be
unable to pay its operating and other expenses and build for the future.
Gross Profit Margin Ratio= (Gross profit/ sales)*100
(Multiplying by 100 converts the ratio into a percentage)
2. Operating Profit Margin (OPM)
The operating profit margin is an indicator of your company’s earning power from its
current operations. This is the core source of your company’s cash flow, and an
increase in the operating profit margin from one period to the next is considered a
sign of healthy, growing company.( If your company’s operating income is not
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sufficient to generate the cash you need to keep operating, you must find other source
of cash.)
Here is the formula to compute the operating profit margin ratio:
Operating Profit Margin = (Operating Income/ Sales)*100
3. Net Profit Margin Ratio (NPM)
Net profit is the income of the bank has after deducting interest paid to creditors and
taxes paid to the government. Net profit margin is the measure of the company net
interest and other operating income over all other expenses calculated in terms of
operating income. Higher NPM is preferable.
The formula for the net profit margin ratio is as follows:
Net Profit Margin Ratio = (Net Income / Sales)*100
4. Return On Assets (ROA)
You use the return on assets ratio to measure the relationship between the profits your
company generates and assets that are being used. You compute it using data from
both the income statement and the balance sheet.
The formula for computing return on assets is as follows:
Return on Assets = (Net income before taxes / Total assets)*100
This ratio is useful when you compare the figure for the most recent period with
results from earlier periods in your company’s history. It can also be very informative
when you compare your company’s return on assets with the returns generated by
other business in your industry.
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If your company’s return on assets ratio is lower than those of other companies, this
may indicate that your competitors have found ways to operate more efficiently. If
your company’s current return on assets is lower than it was a year ago, you should
look at what has changed in the way your company is using its resources.
5. Return on Equity (ROE)
Return on equity (ROE) is the amount of net income returned as a percentage of

shareholder’s equity. Return on equity measures a corporation’s profitability by
revealing how much profit a company generates with the money shareholders have
invested.
Net income is for the full fiscal year (before dividends paid to common stock holders
but after dividends to preferred stock). Shareholder’s equity does not include
preferred shares.
ROE is expressed as a percentage and calculated as:
Return on Equity = (Net Income / Shareholder’s equity)*100
(Multiplying by 100 converts the ratio into percentage)
II. Statistical tools
Various statistical tools are used to establish relationship between different variables
and derive trend of financial performance of DNPL. At the same time such tools are
used to forecast the possible growth and prospects of the industry in near future.
1. Mean
The mean is the average of the numbers: a calculated “central” value

of a set of numbers. The statistical mean refers to the mean or average
that is used to derive the central tendency of the data in question. It is
determined by adding all the data points in a population and then
dividing the total by the number of points. The resulting number is
known as the mean or average.
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2. Standard deviation
Standard deviation is a measure of the dispersion of a set of data from

its mean. It is calculated as the square root of variance by determining
the variation between each data point relative to the mean. If the data
points are further from the mean, there is higher deviation within the
data set.
III. Graphical tools
It includes:
1. Bar Diagram
Bar graphs consist of two axes. On a vertical bar graph, as shown above,
the horizontal axis (or x-axis) shows the data categories. They are years.
The vertical axis (or y-axis) is the scale. The colored bars are the data
series. Bar graphs are an extremely effective visual to use in presentations
and reports. They are popular because they allow the reader to recognize
patterns or trends far more easily than looking at a table of numerical data.
CHAPTER TWO
RESULTS AND FINDINGS
2.1 Introduction
This chapter deals with the presentations, analysis and interpretation of the data. In
this, data collected from different sources are first presented in tables, graphs and
charts, then these data are analyzed by developing various analyzing tools and results
are then interpreted to find out the reason of happening.
Five year’s data period covering from the F/Y 2013/2014 to 2017/18 have been
analyzed and interpreted as per the research methodology defined in chapter three. In
the following section, the relevant and generated data (i.e. both primary and
secondary) relating to the study is presented in tabular form and analyzed it in
systematic way.
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2.2 Analysis of Secondary Data
Secondary data refers to data which is collected by someone who is someone other
than the user. Common sources of secondary data for social science include censuses,
information collected by government departments, organizational records and data
that was originally collected for other research purposes.
2.2.1 Financial analysis
Finance is the language of business. Business goals and objectives are set in financial
terms and their outcomes are measured in financial terms. Financial analysis is an
aspect of the overall business finance function that involves examining historical data
to gain information about the current and future financial health of a company.
1. Gross Profit Margin
Gross margin is the difference between revenue and cost of goods sold divided by
revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the
selling price of an item, less the cost of goods sold. Gross Margin is often used
interchangeably with Gross Profit, but the terms are different. Gross profit margin of
Dabur Nepal Pvt. Ltd for the last five years has been presented in the table and figure
below:
Table 2.1
Calculation of Gross Profit Margin
(Rs. In lakh)
Year Gross Profit Sales Gross Profit Ratio

2013/2014 16,322 54,107 30.17
2014/2015 18,032 58,756 30.69
2015/2016 15,733 50,239 31.32
2016/2017 30,142 1,01,643 29.65
2017/2018 33,062 97,763 33.82
Source: Annual Report of DNPL
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From table 2.1, we can see that Gross Profit Margin has fluctuated over the last five
years. DNPL has the highest gross profit of Rs. 33,062 lakh on 2017/2018 whereas the
sales of 1, 01,643 lakh on 2016/2017. It has been observed that percentage change in
sales is higher than the percentage change in gross profit
Figure 2.1
Gross Profit Margin
Gross Profit Margin

35 33.82
34
Gross profit ratio
33
32 31.32
31 30.69
30.17
30 29.65
29
28
27
2013/2014 2014/2015 2015/2016 2016/2017 2017/2018
Year
The figure 2.1 reveals that the ratio of GP to sale has slightly increased from 30.17%
in 2013/2014 to 30.69% and 31.32% in 2014/2015 and 2015/2016 respectively.
However, it has decreased to 29.65% in 2016/2017 and then increased to 33.82% in
2017/2018. DNPL has highest GPM of 33.82% in 2017/2018 and lowest of 29.65% in
2016/2017.
2. Operating Profit Margin
Operating Profit Margin is a profitability or performance ratio used to calculate the

percentage of profit a company produces from its operations, prior to subtracting
taxes and interest charges. It is calculated by dividing the operating profit by total
revenue. Operating Profit Margin of Dabur Nepal Pvt. L for the last five years have
been presented in table and figure below:
Table 2.2
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Calculation of Operating Profit Margin

(Rs. In lakh)
Year Operating profit Sales Operating profit
Ratio
2013/2014 16,657 54,107 30.78
2014/2015 18,180 58,756 30.94
2015/2016 16,112 50,239 32.1
2016/2017 31,858 1,01,643 31.34
2017/2018 32,315 97,763 33.05
From table 2.2, we can see that there is slight fluctuation on operating profit margin
over the last five years. DNPL has the highest operating profit of 32,315 lakh on
2017/2018 whereas sales of 1, 01,643 lakh on 2016/2017. On 2016/2017 there is
drastic increase in both operating profit and sales.
Figure 2.2
Operating Profit Margin
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Operating profit Margin

33.5
33.05
Operating profit ratio 33
32.5 32.1
32
31.5 31.34
30.78 30.94
31
30.5
30
29.5
2013/2014 2014/2015 2015/2016 2016/2017 2017/2018
Year
The Figure 2.2 reveals the ratio of operating income to sales revenue has fluctuated
over the five years. It has increased from 30.78% to 32.1% from 2013/2014 to
2015/2016. Then, it has decreased to 31.34 in 2016/2017. However, DNPL has
managed to increase its OPM to 33.05% in 2017/2018 .DNPL has lowest ratio of
30.78% in the year 2013/2014 because of decreasing sale comparison with it
operating income. Increasing expense of DNPL is another reason for decrease in its
OPM.
3. Net Profit Margin
Net profit margin is the percentage of revenue remaining after all operating expenses,
interest, taxes and preferred stock dividends (but not common stock dividends) have
been deducted from a company's total revenue. Net profit Margin of Dabur Nepal Pvt.
Ltd for last five years has been presented in table and figure below:
Table 2.3
Calculation of Net Profit Margin

(Rs. In lakh)
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Year Net profit Sales Net Profit Ratio
2013/2014 3,800 54,107 7.02
2014/2015 5,614 58,756 9.55
2015/2016 1,461 50,239 2.91
2016/2017 9,015 1,01,643 8.87
2017/2018 9,382 97,763 9.6
From 2.3 we can observe that the Net Profit Margin has fluctuated over the last five
years. The NPM has been drastically decreased to 2.91% on 2015/2016. In the same
year the net profit and sales also has been lowest among the last five years.
Figure 2.3
Net Profit Margin
Net Profit Margin

12
10 9.55 9.6
8.87
Net profit ratio
8 7.02
6
4 2.91
2
0
2013/2014 2014/2015 2015/2016 2016/2017 2017/2018
Year
The Figure 2.3 shows that NPM of DNPL has fluctuated during last five years. It
increases from 7.02% in 2013/2014 to 9.55% in 2014/2015 and then decreases to
2.91% in 2015/2016. Again it increases from 2.91% in 2015/2016 to 8.87% in
2016/2017 and 9.6% in 2017/2018. The net profit margin is lowest at 2.91% in the
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year 2015/2016; it is because of high increase in overhead of DNPL and highest at

9.6% in 2017/2018.
4. Return on Assets
Return on Assets of Dabur Nepal Pvt. Ltd for last five years has been presented in the
table and figure below:
Table 2.4
Calculation of Return on Assets
(Rs. In lakh)
Year Net Income Assets Return on Assets

before taxes Ratio
2013/2014 4,854 37,583 12.92
2014/2015 6,238 44,959 13.87
2015/2016 2,346 49,121 4.77
2016/2017 10,409 84,651 12.29
2017/2018 10,459 92,862 11.26
From table 2.4, we can see that the return on assets has fluctuated over the last five
years. DNPL has drastic decrease in ROA on 2015/2016 with 4.77%. It has the lowest
net income before taxes of Rs 2,346 lakh on 2015/16 and lowest total assets of Rs
37,583 lakh on 2013/2014.
Figure 2.4
Return on Assets
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Return on Assets
16
13.87
14 12.92 12.29
Return on assets ratio
12 11.26
10
8
6 4.77
4
2
0
2013/2014 2014/2015 2015/2016 2016/2017 2017/2018
Year
It could be easily located from the Figure 2.4 that ROA of DNPL has fluctuated over
the last five years. It has slightly increased from 12.92% in 2013/2014 to 13.87% in
2014/2015. And then it drastically comes down to 4.77% in 2015/2016. However, it
catches the pace and increases to 12.29% in 2016/2017. But again in 2017/2018, it
slightly decreases to 11.26%. DNPL is able to gain the highest ROA of 13.87% in
2014/2015 and lowest of 4.77% in 2015/2016. Higher the volumes of the assets lower
the value of ROA. In the year 2015/2016, DNPL has its lowest ROA of 4.77%
because of the greater percentage increase in assets than the percentage increase in net
income before taxes.
5. Return on Equity
Return on Equity of Dabur Nepal Pvt. Ltd for last five years has been presented in
table and figure below:
Table 2.5
Calculation of Return on Equity
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(Rs. In lakh)
Year Net Income Equity Return on Equity
Ratio
2013/2014 2,955 15,135 19.52
2014/2015 4,487 18,480 24.28
2015/2016 1,330 19,837 6.70
2016/2017 7,285 38,648 18.85
2017/2018 7,670 46,346 16.55
From table 2.5, we can observe that return on equity has fluctuated over the last five
years. DNPL has the highest ROE of 24.28% on 2014/2015. It has the drastic change
in ROE on 2015/2016 with the lowest ROE of 6.7% among the last five years. It has
the highest net income of Rs 7,670 lakh and equity of Rs 46,346 lakh on 2017/2018.
Figure 2.5
Return on Equity
Return on Equity
30
25 24.28
Return on equity ratio
19.52 18.85
20
16.55
15
10
6.7
5
0
2013/2014 2014/2015 2015/2016 2016/2017 2017/2018
Year
The Figure 2.5 reveals that the ratio of net income and equity has fluctuated every
year. DNPL’s ROE has increases from 19.52% in the year 2013/2014 to 24.28% in the
year 2014/2015. And then it has decreases to 6.7% in the year 2015/2016. In the year
2016/2017, it has again increased to 18.85% and then decreased to 16.55% in
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2017/2018. DNPL has the highest ROE of 24.28% in the year 2014/2015 whereas the
lowest of 6.7% in 2015/2016. In the year 2015/2016 it has the lowest ROE of 6.7%
reveals that DNPL was not able to deploy its money to generate profit for its
shareholders.
2.2.2 Statistical Analysis
Statistical Analysis is the science of collecting data and uncovering patterns and
trends. It’s really just another way of saying “statistics”. It is the science of collecting,
exploring and presenting large amount of data to discover underlying patterns and
trends. Statistics are applied every day – in research, industry and government-to
become more scientific about the decisions that need to be made.
I. Mean
The mean is the average of the numbers: a calculated “central” value of a set of
numbers. The statistical mean refers to the mean or average that is used to derive the
central tendency of the data in question. It is determined by adding all the data points
in a population and then dividing the total by the number of points. The resulting
number is known as the mean or average.
Mathematically,
Mean (x̅) =
Where, N= no. of individuals
II. Standard deviation
Standard deviation is a measure of the dispersion of a set of data from its mean. It is
calculated as the square root of variance by determining the variation between each
data point relative to the mean. If the data points are further from the mean, there is
higher deviation within the data set.
In finance, standard deviation is a statistical measurement; when applied to the annual

rate of return of an investment, it sheds light on the historical volatility of that
investment. The greater the standard deviation of a security, the greater the variance
between each price and the mean, indicating a larger price range.
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Mathematically,
Standard Deviation (σ) =
A. Gross Profit Margin
The mean and standard deviation of gross profit margin of DNPL over last five years
has been presented below:
Table 2.6
Calculation of mean and standard deviation
Year GPM (x) (x- x̅ ) (x- x̅ )²

2013/2014 30.17 -0.96 0.9216
2014/2015 30.69 -0.44 0.1936
2015/2016 31.32 0.19 0.0361
2016/2017 29.65 -1.48 2.1904
2017/2018 33.82 2.69 7.2361
∑x=155.65 ∑(x- x̅ )=0 ∑(x- x̅ )²=10.5778
Mean (x̅) =
=31.13
=1.45
Here, the average mean of GPM of DNPL over last five years is 31.13% and the
standard deviation is just 1.45%. Hence, it shows the smooth performance of DNPL.
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B. Operating Profit Margin
The mean and standard deviation of operating profit margin of DNPL over last five
years has been presented below:
Table 2.7
Here, the average mean of OPM of DNPL over last five years is 31.642% and the
standard deviation is just 0.839%.
C. Net Profit Margin
The mean and standard deviation of net profit margin of DNPL over last five years
has been presented below:
Table 2.8
Year NPM (x) (x- x̅ ) (x- x̅ )²

2013/2014 7.02 -0.57 0.3249
2014/2015 9.55 1.96 3.8416
2015/2016 2.91 -4.68 21.9024
2016/2017 8.87 1.28 1.6384
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2017/2018 9.6 2.01 4.0401

∑x=37.95 ∑(x- x̅ )=0 ∑(x- x̅ )²=31.7474
Mean (x̅) =
=7.59
=2.52
Here, DNPL has been able to maintain its average NPM of 7.59% over last five years
and its standard deviation is just 2.52%.
D. Return on Assets
The mean and standard deviation of return on assets of DNPL over last five years has
been presented below:
Table 2.9
Year ROA(x) (x- x̅ ) (x- x̅ )²

2013/2014 12.92 1.898 3.6024
2014/2015 13.87 2.848 8.1111
2015/2016 4.77 -6.252 39.0875
2016/2017 12.29 1.268 1.60782
2017/2018 11.26 0.238 0.05664
∑x=55.11 ∑(x- x̅ )=0 ∑(x- x̅ )²=52.4655
Mean (x̅) =
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=11.022
=3.24
Here, DNPL has been able to maintain ROA at an average of 11.022% over last five
years and the standard deviation is just 3.24%.
E. Return on Equity
The mean and standard deviation of return on equity of DNPL over last five years has
been presented below:
Table 2.10
Year ROE (x) (x- x̅ ) (x- x̅ )²

2013/2014 19.52 2.34 5.4756
2014/2015 24.28 7.1 50.41
2015/2016 6.70 -10.48 109.83
2016/2017 18.85 1.67 2.7889
2017/2018 16.55 -0.63 0.3969
∑x=85.9 ∑(x- x̅ )=0 ∑(x- x̅ )²=168.902
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Mean (x̅) =
=17.18
=5.81
Here, DNPL has been able to maintain ROA at an average of 17.18% over last five
years and the standard deviation is just 5.81%.
2.3 Analysis of Primary Data
Primary data were collected by means of questionnaire and were focused on the
certain questions so as to analyze the various areas of operations and services
provided. A total of 20 questionnaires were distributed among employees and
customers. The questionnaires consisted of 6 mixed questions such as ranking and
multiple choices. Three questions were about respondent profile and demographic
information.
2.3.1 Profile of the respondents
It contains the profile of the respondents providing primary data in terms of whether
they are customers or staffs. It is presented in the following table:
Table 2.3.1
Respondent profile
Types of No Response
S.No. Distributed Returned
Respondents response rate (%)
1. Staffs 10 6 4 60
2. Customer 10 8 2 80
Total 20 14 6 70
Sources: Responses of Survey Questionnaire in Appendix
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Out of the total 20 questionnaires, 10 were distributed to the staffs of the organization
and 10 were distributed to customers.
Figure 2.3.1
Respondent profile
Response rate (%)
Staffs;
42.86%
Customer;
57.14%
From above table, out of total respondents, 57% are found customers and 43% are
found staffs. The result reveals that the majority of the respondents are customers.
Response to each of the questionnaire as attached in the annexure is tabulated as

below:
Table 2.3.2
Response of the questionnaires:
Option 1 (Yes) Option 1 (No) Option 3 (I
S. don’t know)
Question
N Numbe % Numbe % Numbe %
r r r
1. Do you know about 8 57 6 43 - -
the financial
position and
performance of
Dabur Nepal?
2. Are there any 4 28.5 4 28.5 6 43
difficulties in the
operation of the
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company?
3. Does the latest 8 57 2 14.5 4 28.5
financial statement
shows the better
position of the
company?
4. Are you satisfied 10 71 2 14.5 2 14.5
with the service
provided by Dabur
Nepal?
5. Are you satisfied 10 71 3 21.5 1 7.5

with the profitability
position of Dabur
Nepal?
6. Do you know about 6 43 8 57 - -
the future programs
of the company?
(Source: Questionnaire Survey)
As shown in the above table, only 57% of the participants were aware of the financial
position and performance of Dabur Nepal Pvt Limited. 28.5% of the participants
thought that there were certain difficulties in the operation of the company, with the
same percentage of participants were uncertain about it.57% of the participants
thought that the latest financial statement showed the better position of the Dabur
Nepal. 71% of the participants were satisfied with the service provided by DNPL,
while 14.5% were negative on that, with the same percentage of participants were
uncertain about it. 71% of the participants were satisfied with the profitability position
of DNPL. 43% of the participants responded that they were aware about the future
programs of the company while the remaining 57% were unaware about it.
Figure 2.3.2
Response of the questionnaires:
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Response Profile(%)
80
70
60
Response rate
50
40
30
20
10
0
1. 2. 3. 4. 5. 6.
Question
2.4 Major Findings
Based on the research conducted in this study, the following are the major findings:
 The gross profit margin of DNPL seems to be quite stable for last five years.
It has been able to maintain its average ratio of 31.13%.
 The operating profit margin also seems to be stable over last five years. There
is only slight increase or decrease in its OPM over the years.
 The company has fluctuating trend of the Net Profit Margin. In first two years
it has increased and has decreased drastically in the third year and then it has
again increased in last two years
 Higher the volume of assets, lower the value of ROA and vice versa. The
return on assets ratio seems to be fluctuating over the last five years. In
2015/16, it has the lowest ROA of 4.77%.
 Higher the volume of equity, lower the value of ROE and vice versa. The
return on equity of the company has continuously fluctuated over the last five
years. . In the year 2015/2016 it has the highest ROE of 24.28%.
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CHAPTER THREE
SUMMARY AND CONCULSIONS
3.1 Summary
Dabur Nepal is a large scaled industry, which is a subsidy of Dabur India. DNPL is a
leading FMCG’s company which has different themes in its business and is able to
provide good customer service since long ago. It is also a large scaled organization to
create a great employment opportunity. It has also been involving in different CSR
related activities.
This fieldwork is basically undertaken for partial fulfillment of the requirement for the
degree of bachelor of business studies. The objectives of the field study were explored
upon the financial position of projects by determining the profitability for this
operation year with the help of five years balance sheet and profit and loss account
and cash flow statement. For the simplicity of the study, only five years of operation
was take under consideration.
The study focus on analyzing the profitability of DNPL; it has generated in last five
years to measure its efficiency of financial performance by interconnecting profit with
other variables that could affect the profit volume like assets, equity, sales and so on.
The study made through intensified research, then derives the conclusions why DNPL
is successful in being leading FMCGs companies, what are the opportunities and
threats, what is its growth potential, strength and weakness likely to face in near
future and what may be the potential remedies to overcome the threats and grab the
opportunities.
3.2 Conclusion
Dabur Nepal Pvt. Ltd has driven itself with a vision and mission of providing a better
customer care service and has been able to stand as one of the leading FMCGs in
Nepal. Its operation is widely dispersed throughout the nation with the establishment
of branches and services. The study finds out the following facts about the DNPL:
 The gross profit margin of DNPL seems to be quite stable for last five years.
It has been able to maintain its average ratio of 31.13%. However, it should
take care of its COGS which affects the revenue of the company.
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 The operating profit margin also seems to be stable over last five years. There
is only slight increase or decrease in its OPM over the years. This may be
because of comparative changes in both sales and operating profit.
 The company has fluctuating trend of the Net Profit Margin. In first two years
it has increased and has decreased drastically in the third year and then it has
again increased in last two years
 Higher the volume of assets, lower the value of ROA and vice versa. The
return on assets ratio seems to be fluctuating over the last five years. In
2015/16, it has the lowest ROA of 4.77% because of the greater percentage
increase in assets than the percentage increase in net income before taxes.
 Higher the volume of equity, lower the value of ROE and vice versa. The
return on equity of the company has continuously fluctuated over the last five
years. . In the year 2015/2016 it has the highest ROE of 24.28% because of
the higher percentage increase in net profit than the percentage increase in
equity.
DNPL is one of the reputed company which operate in a dynamic environment of

Nepal. Time and again, they confront with different challenges and barriers caused not
only due to external environment but also due to internal environment. So the
performance of DNPL are not only affected by their internal rules, strategies but also
very much affected with external factors like open border between India and Nepal,
different new government policies and political factors.
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BIBLOGRAPHY
Dhawan, S. (2010). Research Methodology for Business and Management Studies.

India: Global Media
Gautam (2008) Expected return, Realized return and Asset pricing tests
Joshi, P.R (2016). Research Methodology. Kathmandu: Buddha Publications Pvt. Ltd
Joshi, P.R (2016). Business Research Methods, Kathmandu: Samjhana Publication

Pvt. Ltd
Kothari, C.R. (2004). Research Methodology: Methods and Techniques India: New
Age International
Krishnaswami O.R. & Satyaprasad, B.G. (2010). Business Research Method.

Mumbai, IND: Global Media
Mukhopadhyay, A. & Amir Khalkhali, S. (2010, September). Profitability

Performance And Firm Size Growth Relationship. Journal of Business &
Economic Research, 8(9), 122.
Neupane, N & R, Agrawal, R. (2013) Assessment of Capital Tied Up in Finished

Inventory and its Impact on Profitability (Case of Real Fruit Juice: A Product of
Dabur Nepal Private Limited), 105pp
Other references:
https://en.wikipedia.org/wiki/Fast-moving_consumer_goods
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http://bossnepal.com/dabur-nepal-private-limited/
https://www.uniassignment.com/essay-samples/finance/profitability-ratio-analysis-
finance-essay.php
https://www.dabur.com/in/en-us/investor/financial-information/reports/subsidiary-co-
reports/dabur-nepal
https://www.scribd.com/doc/38671463/Literature-Review-for-profitability-analysis-
of-public-sector
APPENDIX
Survey Questionnaire
Disclaimer:
This study is an academic study conducted as a part of research project work.
We assure that utmost priority shall be given to maintain the secrecy of the
respondents.
Please tick the appropriate one:
1. Name (Optional):-…………………………………………................
2. Address:-
3. Gender:- a) Male b) Female c) Other
4. Age:- a) Below 25 b) 25-50 c) Above 50
5. Respondent profile:- a) Customers b) Staffs
Please tick the appropriate box that you believe is true.

1. Do you know about the financial position and performance of Dabur Nepal?
a) Yes
b) No
2. Are there any difficulties in the operation of the company?

a) Yes
b) No
c) I don’t know
3. Does the latest financial statement shows the better position of the company?
a) Yes
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lOMoARcPSD|26599954
b) No
c) I don’t know
4. Are you satisfied with the service provided by Dabur Nepal?
a) Yes
b) No
c) I don’t know
5. Are you satisfied with the profitability position of Dabur Nepal?
a) Yes
b) No
c) I don’t know
6. Do you know about the future programs of the company?

a) Yes
b) No
c) I don’t know
xlix

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Final report project

Bachelors of Business Administration (Tribhuvan Vishwavidalaya)

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PROFITABILITY ANALYSIS OF DABUR NEPAL

Shwoyambhu International College

T.U. Regd. No: 7-2-0927-0235-2015

Roll no: 9270219

The Faculty of Management

In partial Fulfillment of the Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

New Baneshwor, Kathmandu

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Name of the student: Saru Maharjan

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Name of Supervisor: Mr. Raju Raut

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Dr. Hari Sharan Chakun Mr. Suman Chaudary

Chairman Campus Chief/Principal

Management Research Committee Date:

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BBS 4th Year

Shwoyambhu International College

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Table 2.2.1: Gross profit Margin…………………………….............................. 19

Table 2.2.2: Operating Profit Margin…………………………………………... 20

Table 2.2.3: Net Profit Margin…………………………………………………. 22

Table 2.2.4: Return on Assets…………………………………………………….23

Table 2.2.5: Return on Equity………………………………………………….…25

Table 2.2.6: Mean and standard deviation of Gross profit Margin……………….27

Table 2.2.7: Mean and standard deviation of Operating Profit Margin…………..28

Table 2.2.8: Mean and standard deviation of Net Profit Margin………………….29

Table 2.2.9: Mean and standard deviation of Return on Assets…………………..30

Table 2.2.10: Mean and standard deviation of Return on Equity…………………31

Table 2.3.1: Respondent Profile……………………………….……………….…32

Table 2.3.2: Response of the Questionnaire………………………………………33

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Figure 2.2.1: Gross profit Margin………………………………..... 19

Figure 2.2.2: Net Profit Margin……………………………............ 21

Figure 2.2.3: Net Profit Margin……………………………………. 22

Figure 2.2.4: Return on Assets……………………………………...24

Figure 2.2.5: Return on Equity……………………………………...25

Figure 2.3.1: Respondent Profile…………………………………….32

Figure 2.3.2: Response of the questionnaire…………………………34

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DNPL : Dabur Nepal Pvt. Ltd

FMCG : Fast Moving Consumable Goods

GPM : Gross Profit Margin

NPM : Net Profit Margin

OPM : Operating Profit Margin

ROA : Return on Assets

ROE : Return on equity

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Berggren and Bernshteyn (2007), Analysis of company performance demands joint

1.1.1 Introduction to FMCG

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1.2 Organizational Profile

Established with the objective of producing and dispensing Ayurvedic medicine to a

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Downloaded by Amrit Sapkota (amritsapkota2000@gmail.com)