Professional Documents
Culture Documents
FINAL
FINAL
Presented By-
Mansi (120023)
•
Concept
Wo r k i n g c a p i t a l c o m p o n e n t s
C&B Liquidity
DIO The average time (in days) a company holds its inventory before selling it.
DRO The average time (in days) a company takes to collect payment after a sale has been made.
DPO The average time (in days) a company takes to pay its bills and invoices to its trade creditors.
OC The length of time between the purchase of inventory and the cash collected from the sale of
the inventory
NOC The length of time between paying for inventory and the cash collected from the sale of the
inventory
Net Profit Ratio Profit After Tax divided by Net Sales.
ROA Measures the profitability of a business in relation to its total assets. It is calculated by dividing
Net income by Average Total Asset.
DE Ratio The debt-to-equity (D/E) ratio is calculated by dividing a company’s total liabilities by its
shareholder equity. It reflects the ability of shareholder equity to cover all outstanding debts in the
event of a business downturn.
Sales Growth Ratio It is percentage change in net sales for the current year relative to net sales for preceding year.
Tools Used For Data Analysis
●
To summarize data and ●
To find degree and direction of ●
To find relation between two
find patterns and deviation. relation among all variables. variables.
To benchmark Working
Capital Structure of most
efficient companies in
Agriculture and Food Industry
of India.
Objective and To f in d P ro f it le a d e r s , S a le s
le a de r s a n d G ro w t h l ea d e r s .
Contribution of the To f in d Wo r k in g C ap i t a l
co m p o n e nt t h a t e f f e ct s i t s
Study ef f ic i en c y
Contribution
I nd u s t r y
Lit er a t ure
Agriculture is the primary source of
Agriculture And Food livelihood for about 58 percent of India’s
population (and 70% of rural household).
Product Industry in Gross Value Added by agriculture,
forestry and fishing is 16.50% in Indian
India economy in 2019-20. In 2014-15, it was
18.20%.
Global Standing
India is the largest producer of spices, pulses, milk, tea, cashew and jute; and the second largest
producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oil seeds.
India is currently the world’s fourth largest producer of agro-chemicals.
India has the largest livestock population of around 512 million.
Favorable Conditions
India has the 10th largest arable land resources in the world. With 20 agro-climatic regions, all 15
major climates in the world exist in India. The country also possesses 46 of the 60 soil types in the
world.
Strategic geographic location and proximity to food importing nations favour India in terms of
exporting processed foods.
Dip in consumption expenditure
Consumer spending expenditure decreased 2.6% in first quarter of 2020 than fourth quarter of
2019.
Record Production of Food Grains
Government of India is targeting food grain production of 293.3 million tonnes, which 2% more
from record output achieved in current year.
• S am p le D e s i gn
Methodology • R e s e a rc h M o d e l
Population Size: Agriculture and Food industry of India.
Sample Size: Top 100 companies of the Industry based on its net sales.
Sample Element: Yearly data of Working Capital and Net Profit was collected
during the period 2014 to 2019 was sample element of the study.
Tools used for Data Collection: Secondary data of WC and Net Profit is sourced
from Annual Financial Standalone details available on CMIE’s database; ProwessIQ.
• Descriptive Analysis
Data Analysis •
•
Correlation Analysis
Regression Analysis
GWC
180000
160000
Outlier
140000
120000
100000
80000
60000
40000
20000
0
0 20 40 60 80 100 120
Statistics
Valid 100 100 100 100 100 100 100 100 100
N
Missing 0 0 0 0 0 0 0 0 0
Median 2169 206 15% 131 84 33 45 146 86
Std. Deviation 17593 9250 55% 6061 97 41 51 114 96
Minimum 142 -8781 -228% 3 13 0 4 16 -95
Maximum 159207 86006 78% 51595 561 237 330 694 498
Due to presence of outlier and high standard deviation; median is used as measure of central location
in this sample.
Profit Leaders
2.5
143.94-243.94 343.94-443.94
443.94-543.94 543.94-643.94
643.94-743.94 743.94-843.94
843.94-943.94 1043.94-1143.94
2 1243.94-1343.94 1543.94-1643.94
1643.94-1743.94 1743.94-1843.94
1943.94-2043.94 2043.94-2143.94
2143.94-2243.94 2343.94-2443.94
2543.94-2643.94 2643.94-2743.94
1.5 2943.94-3043.94 3443.94-3543.94
3643.94-3743.94 5143.94-5243.94
5343.94-5443.94 5943.94-6043.94
6743.94-6843.94 7543.94-7643.94
7643.94-7743.94 8443.94-8543.94
1 10243.94-10343.94 10343.94-10443.94
1
10843.94-10943.94 11143.94-11243.94
12443.94-12543.94 12643.94-12743.94
14543.94-14643.94 20043.94-20143.94
21643.94-21743.94 23943.94-24043.94
0.5 25543.94-25643.94 40643.94-40743.94
159143.94-159243.94
0
Above Average Below Average (blank)
Sales Leaders
4.5
141.58-241.58 341.58-441.58
4
441.58-541.58 541.58-641.58
641.58-741.58 741.58-841.58
3.5 941.58-1041.58 1041.58-1141.58
1241.58-1341.58 1341.58-1441.58
1441.58-1541.58 1541.58-1641.58
3 1641.58-1741.58 2041.58-2141.58
2141.58-2241.58 2241.58-2341.58
2541.58-2641.58 2841.58-2941.58
2.5 2941.58-3041.58 3441.58-3541.58
3641.58-3741.58 3841.58-3941.58
4141.58-4241.58 5341.58-5441.58
2 6741.58-6841.58 7441.58-7541.58
7541.58-7641.58 8441.58-8541.58
10241.58-10341.58 10841.58-10941.58
1.5
11141.58-11241.58 14541.58-14641.58
16941.58-17041.58 21641.58-21741.58
1 23941.58-24041.58 25641.58-25741.58
1 159141.58-159241.58
0.5
0
Above Average Below Average
Growth leaders
7
6
352.42-852.42
852.42-1352.42
1352.42-1852.42
5
1852.42-2352.42
2352.42-2852.42
3352.42-3852.42
4 5352.42-5852.42
8352.42-8852.42
9852.42-10352.42
10852.42-11352.42
3
14352.42-14852.42
21352.42-21852.42
23852.42-24352.42
2 25352.42-25852.42
1
1
0
Above Average Below Average
Correlations
GWC NWC NWC/ C&B DIO DRO DPO OC NOC Avg_ Avg_
GWC S_G NPM
Pearson -.053 .134 .233 .778** -.138 -.162 .062 -.184 -.203 -.272 1
Correlation
Avg_NPM Sig. (2-
tailed) .801 .524 .263 .000 .512 .438 .767 .379 .331 .188
N 25 25 25 25 25 25 25 25 25 25 25
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
Regression Analysis
Model Summaryb
R Adjusted Std. Error Change Statistics
Model R Square R Square of the R Square F Chang df1 df2 Sig. F
Estimate Change e Change
1 .835a .697 .648 137.914% .697 14.426 7 44 .000
a. Predictors: (Constant), NOC, C&B, DPO, DRO, NWC/GWC, GWC, NWC
b. Dependent Variable: Avg_S_G
Avg_S_G= f (DIO, DPO, DRO, GWC, NWC, NWC/GWC, C&B, OC, NOC)
Avg_S_G = β0 + β1 DIO + β2 DPO + β3 DRO + β4 GWC + β5 NWC + β6 (NWC/GWC) + β7 (C&B) + β8 OC
+ β9 NOC
DRO 44 39 40
DPO 56 56 47
NOC 107 89 92
Source Of Financing
Pharmaceutical
Industry of India Indian pharmaceutical industry has
grown over the period. Currently, the market
size is estimated to be 20.83 US$ Billion
whereas the exports is estimated to be 19.14
US$ Billion.
Overview
Indian pharmaceutical industry is the world’s third largest producer of drugs by volume
The Pharmaceutical industry builds over USD$ 11 billion of trade surplus annually and also the pharma sector is amongst the
EY report suggests that the pharmaceutical industry provides employment to over 2.7 million people, in areas such as R&D and
manufacturing.
Indian pharmaceutical industry is the supplier to the 50 per cent of the demand across the world for different antibodies, 40
percent of nonexclusive interest in the US and 25 percent of all medication in Joined Realm.
Indian Pharmaceutical Industry is one among the quickest rising global community for contract examination
More than 80 percent of the antiretroviral drugs that is utilized across the globe to battle AIDS (Acquired
India, third biggest player over the world with 500 distinctive API's, and positions thirteenth all-inclusive in
10 10
5 5
0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
Revenue Exports
• Sample Design
Methodology • Techniques
Sample Design
Sample Size: Top 100 companies of the Pharmaceutical Industry of India based on its net sales
Sample Element: Annual data was collected from standalone balance sheet as well as Income
statement for the period of 5 years i.e. 2015 to 2019
Tools used for Data Collection: Secondary data is collected from Annual Financial
Standalone of the pharmaceutical companies available on CMIE’s database; ProwessIQ
PRIMARY TECHNIQUES
Data Analysis •
•
C o r r e l a ti o n A n a l y s i s
Regression Analysis
DESCRIPTIVE STATISTICS
NWC/ Sales_
GWC NWC GWC C&B DIO DRO DPO OC NOC NPM ROA DE ratio Size growth ROE
ROA Pearso 0.145 .264** .576** 0.136 0.167 -.323** -.218* -0.172 -0.054 .644** 1 -.286** .203* .400** -
n Cor. 0.049
Sig. (2- 0.149 0.008 0.000 0.178 0.097 0.001 0.029 0.086 0.593 0.000 0.004 0.043 0.000 0.627
tailed)
Model Summary
REGRESSION ANALYSIS
Model R R Square Adjusted R Square Std. Error of the Estimate
H0: β1 = β2 = β3 = β4 = 0
H1: β1 = β2 = β3 = β4 = β5 = β6 = 0
Coefficientsa
Unstandardized Coefficients Standardized
Model Coefficients t Sig.
B Std. Error Beta
(Constant) .679 4.493 .151 .880
NOC -.007 .015 -.047 -.464 .644
1. DE Ratio -.633 .403 -.171 -1.572 .119
Size 1.010 .545 .184 1.854 .067
Sales Growth .243 .097 .267 2.507 .014
Total 10553.210 97
2.
Regression 2379.636 6 396.606 4.416 .001c
Total 10553.210 97
The present study through the descriptive analysis showed very high standard deviation in variables of working capital. It was found
that efficiency of working capital management affects Benchmarking measures.
In Pearson correlation analysis, significant positive correlation of Return on Asset with NWC, NWC/GWC, NPM, Sales growth and
negative correlation with DRO and DE Ratio @1% significance and at @5% significance a positive strong correlation with Size and a
negative strong correlation with DPO. Though some of the variables which were used as independent variables in regression, are
found to be significantly correlated. These variables are DIO, DRO, NOC and sales growth.
In regression analysis, taking Return on Asset (ROA) as dependent variable, it was found that Sales growth is closely related to
dependent variable, contributing to high dependability.
In case of ANOVA, the p-value in both the models is below the alpha value i.e. 0.05. Hence, both the model are significant.
WHOLESALE 1. Wholesale and retail industry is an
important pillar in Indian Economy and
AND RETAIL
account for about 10 percent of its GDP and
expected to grow 25% by 2025 and
estimated to be US$ 60 billion by 2020 with
•To summarize data and •To find degree and •To find relation between two
find patterns and deviation. direction of relation among variables.
all variables.
DESCRIPTIVE STATISTICS
Variables Mean Std.Deviation Min. Max. Skewness Kurtosis Count
9463.5 16340.0 22.2 108811.4 3.3 14.0 100
GWC
1032.0 6037.3 -39491.3 23852.2 -2.2 22.3 100
NWC
0.0 0.8 -5.1 1.0 -3.9 21.2 100
NWC/GWC
1308.4 2772.5 0.2 15866.9 3.4 13.2 100
C&B
57.5 49.8 0.0 182.5 0.9 -0.2 100
DIO
88.2 100.6 0.2 656.4 3.4 14.6 100
DRO
71.1 63.9 0.0 388.0 2.5 8.2 100
DPO
145.7 103.3 15.7 678.3 2.4 8.4 100
OC
74.6 72.8 -79.6 302.2 1.0 1.2 100
NOC
CORRELATION ANALYSIS
NWC/ Sales_
GWC NWC GWC C&B DIO DRO DPO OC NOC NPM ROA DE ratio Size growth ROE
ROA Pearso -0.062 0.050 0.157 0.091 0.122 -.333 **
-.214 *
-.265** -0.189 0.164 1 -.203* 0.037 0.023 0.026
n Cor.
Sig. (2- 0.538 0.622 0.119 0.366 0.227 0.001 0.033 0.008 0.060 0.103 0.043 0.718 0.822 0.797
tailed)
Model Summary REGRESSION ANALYSIS
Model R R Square Adjusted R Square Std. Error of the Estimate
.380a 0.144 0.089 0.063665712372067
1
.275a 0.076 0.037 0.065470172697335
2
a. Predictors: (Constant), Sales growth, NOC, Size, DE ratio
H0: β1 = β2 = β3 = β4 = 0
H1: β1 = β2 = β3 = β4 = β5 = β6 = 0
Coefficientsa
Unstandardized Coefficients Standardized
Model Coefficients t Sig.
B Std. Error Beta
(Constant) 0.073 0.045 1.649 0.103
NOC 0.000 0.000 -0.243 -2.491 0.015
1. DE Ratio -0.004 0.001 -0.931 -4.754 0.000
Size 0.003 0.006 0.076 0.552 0.582
Sales Growth -0.003 0.003 -0.060 -0.790 0.432
2. (Constant)
-0.425 0.135 -3.143 0.002
NOC
-9.603E-07 0.000 0.000 -0.003 0.997
DE ratio
0.028 0.001 0.854 20.969 0.000
Size
0.039 0.018 0.134 2.174 0.033
Sales growth
0.011 0.011 0.035 0.989 0.326
DIO
0.000 0.000 -0.024 -0.577 0.566
DPO
0.000 0.000 0.036 0.942 0.349
a. Dependent Variable: ROA
ANOVA
Sum of
Total
0.440 99
Regression
18.702 16 1.169 50.712 .000b
2.
Residual
1.913 83 0.023
Total
20.615 99
DIO 49 59 66
DRO 53 41 43
DPO 59 68 77
NOC 42 31 32
Source Of Financing
2015 7% 93%
2016 5% 95%
2017 9% 91%
Cash Policy 7% 5% 8%
FINDINGS
The study finds out 12 Profit leaders, 13 Sales leaders and 7 Growth leaders out of sample.
Pearson Correlation Analysis and P value in correlation shows the significance. At 1% significance
level Return on Asset has positive relation with NWC, NWC/GWC, NPM, Sales growth and
negative relation with DRO and OC. At 5% significance level it shows positive relationship with
DE ration and negative relation with DRO.
In descriptive analysis, with the wide variability in standard deviation value from 63 to 16340
shows it affects company Benchmark through working capital management.
In regression NOC and Size is closely related with ROA with the value 0.015 and 0.033 which
contributing high dependability.
P value in ANOVA of both the model taken ROA as dependent variable shows significant relationship with the
value .000.
In terms of Source of Finance, Profit Leader has comparatively better than the growth and sales leader.
Thank You!