Comparison & Ratio Analysis of two FMCG (Fast-Moving Consumer Goods) Companies.

1. Tarai Foods Limited.

2. Tata Global
Beverages.





Balance Sheet of Tarai Foods (Rs. In Crores)
Mar '13 Mar '12 Mar '11 Mar '10
Sources Of Funds
Total Share Capital 14.34 14.34 14.34 14.34
Equity Share Capital 14.34 14.34 14.34 14.34
Share Application Money 0 0 0 0
Preference Share Capital 0 0 0 0
Reserves -55.13 -60.76 -59.76 -58.81
Revaluation Reserves 0 0 0 0
Networth -40.79 -46.42 -45.42 -44.47
Secured Loans 42.63 49.47 49.47 49.8
Unsecured Loans 1.43 0.56 0.56 0.56
Total Debt 44.06 50.03 50.03 50.36
Total Liabilities 3.27 3.61 4.61 5.89
Mar '13 Mar '12 Mar '11 Mar '10
Application Of Funds
Gross Block 13.98 13.98 13.97 13.97
Less: Accum. Depreciation 9.96 9.41 8.86 8.31
Net Block 4.02 4.57 5.11 5.66
Capital Work in Progress 0.13 0.13 0.13 0.13
Investments 0 0 0 0
Inventories 0.44 0.06 0.12 0.24
Sundry Debtors 0.04 0.03 0.26 0.56
Cash and Bank Balance 0.13 0.06 0.15 0.37
Total Current Assets 0.61 0.15 0.53 1.17
Loans and Advances 0.43 0.43 0.4 0.37
Fixed Deposits 0 0 0 0
Total CA, Loans & Advances 1.04 0.58 0.93 1.54
Deferred Credit 0 0 0 0
Current Liabilities 1.85 1.59 1.51 1.4
Provisions 0.07 0.08 0.05 0.05
Total CL & Provisions 1.92 1.67 1.56 1.45
Net Current Assets -0.88 -1.09 -0.63 0.09
Miscellaneous Expenses 0 0 0 0
Total Assets 3.27 3.61 4.61 5.88
Contingent Liabilities 1.3 1.3 1.31 1.31
Book Value (Rs) -23.01 -26.19 -25.62 -25.09
Tata Global Beverage (Rs. In Crores)
Mar '13 Mar '12 Mar '11 Mar '10
Sources Of Funds
Total Share Capital 61.84 61.84 61.84 61.84
Equity Share Capital 61.84 61.84 61.84 61.84
Share Application Money 0 0 0 0
Preference Share Capital 0 0 0 0
Reserves 2,256.45 2,148.27 1,972.75 1,994.14
Revaluation Reserves 0 0 21.86 21.86
Networth 2,318.29 2,210.11 2,056.45 2,077.84
Secured Loans 108.57 366.85 505.47 496.45
Unsecured Loans 75 0 0 3.21
Total Debt 183.57 366.85 505.47 499.66
Total Liabilities 2,501.86 2,576.96 2,561.92 2,577.50
Mar '13 Mar '12 Mar '11 Mar '10
Application Of Funds
Gross Block 256.85 246.21 224.39 210.89
Less: Accum. Depreciation 110.17 106.12 112.37 105.1
Net Block 146.68 140.09 112.02 105.79
Capital Work in Progress 3.77 2.69 3.03 5.57
Investments 2,225.14 2,205.70 2,290.91 2,309.05
Inventories 651.56 453.47 429.91 378.14
Sundry Debtors 109.11 90.64 101.9 116.39
Cash and Bank Balance 50.52 17.47 6.87 5.36
Total Current Assets 811.19 561.58 538.68 499.89
Loans and Advances 253.42 225.52 160.61 165.38
Fixed Deposits 0 30 0 0
Total CA, Loans & Advances 1,064.61 817.1 699.29 665.27
Deffered Credit 0 0 0 0
Current Liabilities 663.14 324.29 365.45 319.14
Provisions 275.21 264.33 177.87 189.04
Total CL & Provisions 938.35 588.62 543.32 508.18
Net Current Assets 126.26 228.48 155.97 157.09
Miscellaneous Expenses 0 0 0 0





























Total Assets 2,501.85 2,576.96 2,561.93 2,577.50
Contingent Liabilities 148.39 86.61 81.18 71.1
Book Value (Rs) 37.49 35.74 32.9 332.47
Tarai Foods (Profit & Loss) (Rs. In Crores)
Mar '13 Mar '12 Mar '11 Mar '10
Income
Sales Turnover 1.68 1.38 1.21 2.65
Excise Duty 0 0 0 0
Net Sales 1.68 1.38 1.21 2.65
Other Income 5.98 0.05 0.54 0.65
Stock Adjustments 0.38 0 -0.13 -0.15
Total Income 8.04 1.43 1.62 3.15
Expenditure
Raw Materials 0.52 0.46 0.21 0.43
Power & Fuel Cost 0.77 0.74 1.06 1.5
Employee Cost 0.22 0.29 0.31 0.38
Other Manufacturing Expenses 0.09 0.09 0 0.32
Selling and Admin Expenses 0 0 0 0
Miscellaneous Expenses 0.26 0.3 0.44 0.33
Preoperative Exp Capitalised 0 0 0 0
Total Expenses 1.86 1.88 2.02 2.96
Mar '13 Mar '12 Mar '11 Mar '10
Operating Profit 0.2 -0.5 -0.94 -0.46
PBDIT 6.18 -0.45 -0.4 0.19
Interest 0 0 0 0
PBDT 6.18 -0.45 -0.4 0.19
Depreciation 0.55 0.55 0.55 0.55
Other Written Off 0 0 0 0
Profit Before Tax 5.63 -1 -0.95 -0.36
Extra-ordinary items 0 0 0 0
PBT (Post Extra-ord Items) 5.63 -1 -0.95 -0.36
Tax 0 0 0 0
Reported Net Profit 5.64 -1 -0.95 -0.37
Total Value Addition 1.34 1.42 1.81 2.52
Preference Dividend 0 0 0 0
Equity Dividend 0 0 0 0
Corporate Dividend Tax 0 0 0 0
Per share data (annualised)
Shares in issue (lakhs) 177.28 177.28 177.28 177.28
Earning Per Share (Rs) 3.18 -0.56 -0.54 -0.21
Equity Dividend (%) 0 0 0 0
Book Value (Rs) -23.01 -26.19 -25.62 -25.09




Tata Global Beverage (Profit & Loss) (Rs. In
Crores)
Mar '13 Mar '12 Mar '11 Mar '10
Income
Sales Turnover 2,326.10 2,035.29 1,792.93 1,698.76
Excise Duty 0 0 0.31 0.26
Net Sales 2,326.10 2,035.29 1,792.62 1,698.50
Other Income 130.85 177.22 148.47 377
Stock Adjustments 38.54 9.78 25.78 14.69
Total Income 2,495.49 2,222.29 1,966.87 2,090.19
Expenditure
Raw Materials 1,557.49 1,301.81 1,209.95 1,100.41
Power & Fuel Cost 27.91 25.31 20.65 17.02
Employee Cost 120.06 100.69 90.4 90.45
Other Manufacturing Expenses 0 33.71 37.28 30.83
Selling and Admin Expenses 0 0 227.01 206.66
Miscellaneous Expenses 420.67 351.78 104.56 84.36
Preoperative Exp Capitalised 0 0 0 0
Total Expenses 2,126.13 1,813.30 1,689.85 1,529.73
Mar '13 Mar '12 Mar '11 Mar '10
Operating Profit 238.51 231.77 128.55 183.46
PBDIT 369.36 408.99 277.02 560.46
Interest 32.01 27.04 38.97 56.34
PBDT 337.35 381.95 238.05 504.12
Depreciation 16.39 12.04 12.36 12.32
Other Written Off 0 0 0 0
Profit Before Tax 320.96 369.91 225.69 491.8
Extra-ordinary items 0 0 4.68 3.65
PBT (Post Extra-ord Items) 320.96 369.91 230.37 495.45
Tax 62.3 67.23 49.79 103.96
Reported Net Profit 258.65 302.68 180.59 391.47
Total Value Addition 568.64 511.48 479.9 429.32
Preference Dividend 0 0 0 0
Equity Dividend 132.96 132.96 123.68 123.68
Corporate Dividend Tax 20.68 20.7 17.86 19.45
Per share data (annualized)
Shares in issue (lakhs) 6,183.99 6,183.99 6,183.99 618.4
Earnings Per Share (Rs) 4.18 4.89 2.92 63.3
Equity Dividend (%) 215 215 200 200
Book Value (Rs) 37.49 35.74 32.9 332.47


Ratio Analysis
LIQUIDITY RATIO
A. Current Ratio
It is a liquidity ratio which signifies the ability of the firm to pay off its short term liabilities with its short term assets. The
ideal ratio being 2:1, meaning if the company has rupee 1/- liability then the firm should have 2/- rupees to pay off the
liabilities so that the firm is left with a little extra current assets.
CURRENT RATIO = (CURRENT ASSETS/CURRENT LIABILTIES)

Company/Years Mar 13 Mar 12 Mar 11 Mar 10 Average
Tarai Foods Ltd. 0.54 0.34 0.59 1.07 0.65
Tata Global Beverages 0.87 1.22 0.77 0.78 0.91

Here, Tata Global Beverages is more liquid to pay off its current liabilities.

B. Quick Ratio
Also known as Acid Test Ratio. Comparatively it is more liquid than current ratio. Higer the ratio, more the liquidity and it
will better ability to pay off its immediate liabilities when the firm is closing down.
Quick Ratio =
Current assets (stock + bills receivable + prepaid expenses)
Current Liabilities (Bills Payable + Bank Overdraft)

Company/Years Mar 13 Mar 12 Mar 11 Mar 10 Average
Tarai Foods Ltd. 0.31 0.31 0.52 0.90 0.51
Tata Global Beverages 0.42 0.59 0.48 0.53 0.50

The average of both the firms is almost same. With minor differences. The ideal ratio being 1:1, because the
goods of these firms are perishable in nature, the liquidity maintained is low. Which majorly depends on the
nature of the goods & services as well.




TURNOVER RATIOS
A.Inventory Turnover Ratio
It reflects that how fast the company is using its inventory or stock to convert it to sales. Higer the number,
better is the rolling of inventories.
Inventory turnover ratio = (Cost of goods sold/average inventory)
Company/Years Mar 13 Mar 12 Mar 11 Mar 10 Average
Tarai Foods Ltd. 3.79 24.44 10.23 10.82 12.32
Tata Global Beverages 3.57 4.49 4.48 4.71 4.31

Here, Tarai Foods has the better inventory ratio i.e 12.32 which is really good for the firm.
B. Debtors Turnover Ratio
It shows the details regarding of how efficiently the firm is using its assets.
Debtors turnover ratio = (Net credit sales/average debtors)
Company/Years Mar 13 Mar 12 Mar 11 Mar 10 Average
Tarai Foods Ltd. 48.54 9.62 2.97 3.29 16.10
Tata Global Beverages 23.29 21.14 16.42 16.31 19.29

Here, Tata Global Beverages has better debtors turnover ratio on an average as compared to Tarai Foods Ltd.
Which eventually rose drastically in 2013. Therefore, Tata has utilized its assets better than Tarai.
C. Creditors Turnover Ratio.
A measure used to determine the rate at which the firm pays the money to its creditors i.e the suppliers. Lower
payable turnover ratio is an advantage to the firm, as it can properly utilize its credit purchases.
Creditors turnover ratio = (Net credit purchases/average creditors)
Company/Years Mar 13 Mar 12 Mar 11 Mar 10 Average
Tarai Foods Ltd. 3.79 24.44 10.23 10.82 12.32
Tata Global Beverages 3.57 4.49 4.48 4.71 4.31

Here, we can interpret that Tata Global Beverages has a lower ratio on an average which is a pretty good sign
for the firm presently as well as for future.
Profitability Ratios
The basic motive of a firm is to generate profits, as they are of prime importance to the firms managers &
shareholders, as they have to show what is the profit generated by the firm to the investors.
A. Gross Profit Margin
It is calculated on the basis of the cost of goods sold by the firm or the net sales made by the firm. It considers
at how well the firm finances its inventories & the cost of production of the goods & makes a price value of the
final good/service to the customers. It is represented in percentage & the formula is
Gross Profit Margin = (Gross profit/sales)*100
Company/Years Mar 13 Mar 12 Mar 11 Mar 10 Average
Tarai Foods Ltd. -20.84 -75.85 -122.95 -38.14 -64.45
Tata Global Beverages 9.54 10.79 6.48 10.07 9.22

Tarai foods had negative gross profit margin, which is not a good sign for the firm. Which means either they
are not generating adequate sales or they have a lot of piled up inventory, which we saw above that they have
a lot of piled up inventory. Tata has maintained its G/P Margin adequately.
B. Net Profit Margin
It calculates the profits after deducting all direct & indirect expenses. The remaining is the Net Profit for the
firm which is either distributed as dividend to the shareholders or is transferred to the Reserves & Surplus a/c.
Net Profit Margin = (Net profit/sales)*100
Company/Years Mar 13 Mar 12 Mar 11 Mar 10 Average
Tarai Foods Ltd. 334.52

-70.18

-56.32

-11.18

49.21

Tata Global Beverages 10.6

14.21

9.4

21.22

13.85


Average N/P margin of Tarai was huge in 2013, which has created a lot of difference for them, in turn
increasing their average for the past 4 years. While Tata has partially maintained the N/P margin.



Financial Ratios
These ratios are used to calculate, how well the firm is performing & the areas where it can improve it financial
resources.
A.Earnings per Share (EPS)
This ratio shows how much the shareholders are liable to earn, which is to be distributed from the profits
available after paying taxes & interests.