1

UNIVERSITY OF MUMBAI
RAYAT SHIKSHAN SANTHAS
KARMAVEER BHAURAO PATIL COLLEGE
VASHI, NAVI MUMBAI


PROJECT REPORT ON
Ratio Analysis of Close-up And Colgate


SUBMITTED BY
DATTATRAY ANNAPPA HALGE

M.Com Sem III (2013-14)
ROLL.NO 443


PROJECT GUIDE
Prof. Ms. BABITA KAKKAR



IN PARTIAL FULFILMENT FOR THE COURSE OF
MASTERS IN
COMMERCE (ADVANCED ACCOUNTANCY)
M.Com. Semester III
ACADEMIC YEAR 2013-2014

2

ACKNOWLEDGEMENT


I would sincerely like to give my heartfelt acknowledgement and
thanks to my parents. Any amount of thanks given to them will never be
sufficient.
I would like to thank the University of Mumbai, for introducing
Banking and Insurance course, thereby giving the student a platform to
abreast with changing business scenario, with the help of theory as a
base and practical as a solution.
I would sincerely like to thank our Principal Prof. K.G. Tapase . I
would also like to thank my project guide Prof. Ms. BABITA KAKKAR
or his/her valuable support and guidance whenever needed.
I would like to thank the officials of Future General Life Insurance
Co Ltd who gave me their valuable time and gave explanations for the
questions asked.

I also feel heartiest sense of obligation my library staff members &
seniors who helped in collection of Data and materials and also in this
processing as well as in drafting manuscript.

Last, but not the least, I would like to thank my friends & colleagues for
always being there.






Signature
Dattatary Halge


3



DECLARATION


I, Dattatray Annappa Halge student of KARMAVEER

BHAURAO PATIL, COLLEGE, VASHI Studying in M.com .Sem.-III

hereby declare that I have completed this project on Ratio Analysis of

Close-up And Colgate as per the requirements of University of

Mumbai as a part of the curriculum of M.com. Sem.-III course and this

project has not been submitted to any other University or institute for

the award of any degree, diploma etc. the information is submitted by

me is true and original to the best of my knowledge.









Date: - ------------ Place:- Vashi, Navi Mumbai



4

RAYAT SHIKSHAN SANTHAS
KARMAVEER BHAURAO PATIL COLLEGE
VASHI, NAVI MUMBAI 400703



CERTIFICATE


This is to certify that Dattatray Annappa Halge Student of M.com. Sem.-

III has completed this project on Ratio Analysis of Close-up And

Colgate and has submitted a satisfactory report under the guidance of

Prof Mrs BABITA KAKKAR . in the parttiial fulfillment of M.com.

Sem.-III course of University of Mumbai in the academic year 2013-

2014.








-------------------- -------------------- -------------------
Project Guide Coordinator External

5

INDEX

CHAPTER
No.
PARTICLUALRS Page
No.
1. Introduction to Ratio Analysis 6.
2. Introduction to Close-up & Colgate 9

3. Ratio Analysis of Close-up 12

4. CLOSE-UP ANNUAL REPORT FOR THE YEAR 2012-2013 16

5. COLGATE ANNUAL REPORT FOR THE YEAR 2012-2013 18

6. Comments 20

7. Conclusion 24








6


Introduction to Ratio Analysis :

Ratio Analysis is the method or process by which the relationship of items or
groups of items in the financial statement are computed, determined and presented.
Ratio Analysis is an attempt to derive quantitative measure or guides concerning
the financial health and profitability of a business enterprise. Ratio analysis can be
used both in trend and static analysis. There are several ratios at the disposal of an
analyst but the group of ratios he would prefer depends on the purpose and the
objective of analysis.

It was in 1919; Alexander Wall came out with his strong criticism of such a
restricted and narrow analysis. He maintained that, in order to get a clear picture of
the financial health of the business, one has to take into account various other
relationships besides the current ratio. Since then, ratio analysis has come a long
way in being an efficient tool of financial statement analysis.

A Ratio is one figure expressed in terms of another figure. It is a
mathematical yardstick that measures the relationship between two figures, which
are related to each other and mutually inter-dependent. Ratio is expressed by
dividing one figure by the other related figure. Thus a ratio is an expression
relating one number to another. It is simply the quotient of two numbers.
An accounting ratio is an expression relating two figures or two accounts or two
sets of account heads or groups contained in the financial statement.




7


Different Modes of Expressing an Accounting Ratio
Ratio may be expressed in different ways. They are as follows:
A. Simple or Pure Ratios
B. Percentages
C. Rate
Simple or Pure ratio is merely a quotient by simple division of one number by
another.
Ratios are expressed as percentage relations when the simple or pure ratios are
multiplied by 100. The resulting ratios are known as percentage ratios.
Sometimes, ratios are expressed as rates which refer to ratios over a period of time.

Comparisons by Ratios
Accounting ratios are very useful in assessing the financial position and
profitability of a business enterprise. This can be achieved through comparison by
ratios. Such a comparison may take any of the under-mentioned forms:

a. For the same enterprise over a number of years.

b. For one enterprises against in the same industry


c. For one enterprises against the industry the industry as a whole.

d. For one enterprise against the pre-determined standards.


e. For inter-departmental comparison within an organization.
8


OBJECTIVE OF RATIOS

Ratio analysis to be more effective requires certain standard ratios. This facilities
the comparison and evaluation of actual ratios. These standards are very much
useful in the above mention comparison of ratio are:

a) Solvency:

1) Long term
2) Short term
3) Immediate

b) Stability

c) Profitability


d) Operational efficiency

e) Credit standing


f) Structural analysis

g) effective utilization of resource


h) leverage

i) external financing
9


Introduction to Close-up


Close-up is a brand of toothpaste which is marketed by Unilever. Launched
in 1967, it is the first gel toothpaste in the world. In 2003, Unilever sold the
exclusive licensing rights of Close-Up in United States and Canada to Church &
Dwight. This sale did not affect the brand in other countries, like India where
Unilever and its subsidiaries continue marketing Close-Up. The brand is positioned
to target the youth segment with a lifestyle appeal in its advertising campaigns.

Close Up is the original youth oral care brand of Unilever Arabia and Middle East.
It is one of the first brands targeting youth in the oral care market globally, with an
edgy and youthful image which stays relevant till date.
Unlike the typical opaque, mint-flavored toothpaste of the time, Close Up debuted
in 1967 as a clear red gel with a spicy cinnamon taste and mouthwash right in the
10

toothpaste. A unique brand identity was developed, with Close-Up positioned as
the toothpaste that gives people confidence in those very "up close and personal"
situations.
Couples with bright smiles in very "close" situations were featured on the
packaging, and commercials depicted youthful adults blowing kisses at each other.
The idea of toothpaste that could give them fresh breath, white teeth and,
subsequently, a little extra self-confidence and sex appeal provided instant appeal
to consumers. Over the years, Close-Up briefly flirted with a few variations, from a
green mint-flavored version to a trendy clear gel.
In 2006, Close-up Limited Edition launch in Arabia redefined the toothpaste
market with its unique new flavors: Choco-loko, Tangerine Burst, and Lychee. It
brought excitement and life into the rather boring toothpaste category and helped
the brand achieve record sales and shares. One thing remains constant: Close-up is
still symbolized by attractive white smiles in very close situations.

KEY FACTS

First toothpaste in US to combine mouthwash and toothpaste in one formula

First gel toothpaste in the world

The Fluoride in Close Up called monofluorophospate, makes the entire tooth
structure more resistant to delay. It also strengthens teeth, which aids in repairing
early delay before the damage can even be seen.

Close-Up is the number 2 brand in the GCC
11

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer
Goods Company with a heritage of over 75 years in India and touches the lives of
two out of three Indians.
HUL works to create a better future every day and helps people feel good, look
good and get more out of life with brands and services that are good for them and
good for others.
With over 35 brands spanning 20 distinct categories such as soaps, detergents,
shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged
foods, ice cream, and water purifiers, the Company is a part of the everyday life of
millions of consumers across India.
Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf
Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus,
Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality
Walls and Pureit.
The Company has over 16,000 employees and has an annual turnover of around
Rs.25,206 crores (financial year 2012 - 2013). HUL is a subsidiary of Unilever,
one of the worlds leading suppliers of fast moving consumer goods with strong
local roots in more than 100 countries across the globe with annual sales of 51
billion in 2012. Unilever has about 52% shareholding in HUL.




12

Introduction to Colgate


Colgate-Palmolive (India) Ltd is engaged in the personal care business,
which includes oral care. The oral care products manufactured by the company
include toothpastes, toothbrushes, toothpowder, whitening products and
mouthwash. The personal care products manufactured by the company include
body wash, liquid hand wash, shave preps, skin care and hair care.
The household care product manufactured by the company includes surface
care. The other products and treatments provided by the company include
gingivitis treatment, sensitivity treatment, tooth whitening, fluoride therapy, mouth
ulcer treatment and specialty cleaning. Colgate-Palmolive Company is the
company's ultimate holding company.
Colgate-Palmolive (India) Ltd was incorporated in the year 1937. In the year
1983, the company introduced their successful product Colgate Plus toothbrush in
the market. In the year 1988, CPIL received a licence for producing 24,000 tonnes
per annum of fatty acids.
13

They also registered with DGTD for production of 30,000 tones of toilet
soap per annum. In June 1988, the company established a wholly owned subsidiary
at Hatbands in Nepal to manufacture the toothpaste and tooth powder initially.
In the year 1991, the company launched new Colgate Gel Toothpaste,
Palmolive Extra Care and new Palmolive soap. They also re-launched a high
quality Colgate Plus and other toothbrushes. In the year 1994, the company
acquired the oral hygiene business of Hindustan Ciba-Geigy Ltd. In the year 1996,
the company introduced the Colgate fresh stripe toothpaste and Palmolive naturals
soap in personal care products segments, Keratin Treatment Shampoo and
Palmolive optima in Hair care segment.
In the year 1999, the company launched three new products, such as Colgate
Double Protection, Colgate Total and Colgate Sensation. They started a new
research and development centre, a manufacturing facility in Nepal. Also, they
completed a dicalcium phosphate facility in Aurangabad. In the year 2000, the
company introduced two new variants to their Palmolive Naturals soap range and
revitalised their sandalwood soap.
During the year, the company entered into a strategic tie-up with Calcutta-
based First-net Solutions Ltd for joint sales promotion of Colgate Fresh Energy
Gel toothpaste on the Web portal called www.yantram.com. They made a foray
into a new category of herbal care with the launch of Colgate Herbal touted to be a
vehicle for increasing the company's rural market penetration over a period of time.
During the year 2000-01, the company launched Colgate Herbal Toothpaste,
Economy Toothpaste, Colgate Zig Zag Toothbrush, Colgate Navigator Toothbrush
and Transparent Skin Care Soap in the year market.
14

They came out with a mega promotion, 'Colgate ke andar kya hai', which
was one of the key drivers in strengthening the consumer bond with the Company's
oral care and personal care brands. During the year 2001-02, the company re-
launched Colgate Fresh Energy Gel with a refreshing falvour in a unique first-of-
its king transparent tube and economy toothpaste. During the year 2002-03, the
company re-launched their flagship brand, Colgate Dental Cream. Also, they re-
launched their premium toothpaste, Colgate Total, in a green and white striped
paste format.
They launched Colgate Navigator Plus toothbrush to deliver excellent
cleaning with a high degree of comfort and control. Also, they re-launched Colgate
Super Flexible with the consumer promise of '3-way action for a comfortable
clean'. During the year, the company divested their entire shareholding in Camelot
Investments Company Ltd (Camelot), a wholly owned subsidiary of the company.
During the year 2003-04, the company launched Colgate Herbal White striped
toothpaste with lemon extracts, eucalyptus and mint.
They launched Colgate Navigator Plus Toothbrush in the market. During the
year 2004-05, the company established a state-of-the-art additional toothpaste
manufacturing facility at Baddi, Himachal Pradesh to meet the growing market
demand. The first phase of the facility became operational in April, 2005 During
the year 2005-06, the company established Oral Care Category Innovation Centre
works closely with the Technology Centres in India and U.S.A. to shape ideas into
products that meet today's consumer needs.
They launched Colgate Advanced Whitening, Colgate Active Salt, Colgate
Max Fresh Gel and Colgate Super Flexible Toothbrush with Unique Tongue
Cleaning Feature. During the year 2006-07, Sewri manufacturing facility
15

discontinued its operations with effect from September 27, 2006. During the year
2007-08, the company acquired 75% shareholdings in three companies, namely,
Advanced Oral Care Products Pvt Ltd, Professional Oral Care Products Pvt Ltd
and SS Oral Hygiene Products Pvt Ltd and thus they became subsidiaries of the
company with effect from November 1, 2007. In April 2008, the company acquired
75% shareholding in CC Health Care Products Pvt Ltd at Hyderabad for a total
consideration of Rs 1,93.83 lakh.
Also, as per the scheme of amalgamation, Professional Oral Care Products Pvt Ltd
and CC Health Care Products Pvt Ltd were amalgamated with the company with
effect from April 1, 2009. In June 2011, Essel Propack Ltd signed a long-term
agreement with the company to set up a plant in Goa at an investment of Rs 400
million.
The company has decided to set up a greenfield facility at an upcoming industrial
estate in Sanand in Gujarat with an estimated investment of Rs 200 crore. The
company has been allotted 100,000 sq metres of land at the upcoming GIDC
industrial estate in Bol village in Sanand-II by the Government.








16

CLOSE-UP ANNUAL REPORT FOR THE YEAR 2012-2013

Ratio Analysis of Close-up
Particulars Working Note Amt
Current Ratio =
Current Asset
Current Liabilities

11,512
8838

= 1.30: 1
Quick Ratio =
Current Asset - Closing Stock
Current Liabilities- Provisions

7,569- 2,526
7,655- 1,872

= 0.87: 1
Return on Capital Employed =
Net Profit before tax x100
Capital Employed

4,957 x100
11,512

=
43.05%
Return on Proprietors Equity =
Net Profit after tax x100
Shareholders Fund

3,796 x100
2,674

=
141.9%
Proprietors Ratio =
Shareholders Fund
Total Asset

2,674
11,512

= 0.23: 1
Debt Equity Ratio =
Debt
Equity

833
216

= 3.85: 1
Working Capital =
Current Asset Current Liabilities

11,512- 8,838

= 2764
Stock Working Capital =
Closing Stock
Working Capital

2,526
2,674


= 0.94: 1
Return on Equity Capital =
Net Profit After Tax x100
Equity Capital

3,796 x 100
2,673

= 142%
Credit Payment Ratio =
Average Creditors x 12Months
Credit purchase

4,894 x 12
3,235

= 18
days

Creditors Turnover Ratio =
Credit Purchases

3,235

= 0.16
17

Average Creditors 4,894
Earning Per Equity Share =
Net Profit After Tax
No. of Equity Share

3,796
216

= 11.57
Capital Gearing Ratio =
Loan Fund + Pref .Share Capital x 100
Equity Share Capital + Reserve & Surplus

384 x 100
216+2457

=
14.36%
Capital Turnover Ratio =
Sales
Capital Employed
Fixed Asset Turnover Ratio =
Sales
Fixed Asset

27,283
11,512

27,283
2,292

= 2.36
Times

= 11.90
Debt Service Ratio =
Net Profit Before Tax
Interest

4,957
25

= 198.28














18

COLGATE ANNUAL REPORT FOR THE YEAR 2012-2013

Ratio Analysis of Colgate

Particulars Working Note Amt
Current Ratio =
Current Asset
Current Liabilities

79,303
78,144

= 1.01: 1
Quick Ratio =
Current Asset - Closing Stock
Current Liabilities- Provisions

79,303 - 18,529
78,144 - 6464

= 0.84: 1
Return on Capital Employed =
Net Profit before tax x100
Capital Employed

66,303 x 100
1,30,677

= 50.73%
Return on Proprietors Equity =
Net Profit after tax x100
Shareholders Fund

16,627x100
48,959

= 33.96%

Proprietors Ratio =
Shareholders Fund
Total Asset

48,959
1,30,677

= 0.37: 1
Debt Equity Ratio =
Debt
Equity

8,121
48,959

= 0.165: 1
Working Capital =
Current Asset Current Liabilities

79,303 78,144

= 1159
Stock Working Capital =
Closing Stock
Working Capital

18,529
1,159

= 15.98: 1
Return on Equity Capital =
Net Profit After Tax x100
Equity Capital

49675 x100
48959

= 101.46%
Credit Payment Ratio =
Average Creditors x 12Months
Credit purchase

41,781 x 12
23,644

= 21 days
Creditors Turnover Ratio =
Credit Purchases

23,644

=0.56times
19

Average Creditors 41,781
Earning Per Equity Share =
Net Profit After Tax
No. of Equity Share

16,627
1,359

= 12.23
Capital Gearing Ratio =
Loan Fund + Pref .Share Capital x 100
Equity Share Capital + Reserve & Surplus

0
1359 + 47599

= Nil
Capital Turnover Ratio =
Sales
Capital Employed


3,32,420
1,30,677

= 2.54
Fixed Asset Turnover Ratio =
Sales
Fixed Asset

3,32,420
28,066

= 11.84
Debt Service Ratio =
Net Profit Before Tax
Interest

66,303
3,956

= 16.76













20

Comments :-

Current Ratio
Current Ratio of Closeup is 1.30 and that of Colgate is 1.01. Both
the companies are having different value of current asset for every rupee of current
liabilities. Current assets of close up company is sufficient to pay current
liabilities. Short term solvency position of close-up company is good.

Quick Ratio
The ratio of Closeup is 0.88 and that of Colgate is 2.1. The ratio of Closeup
is lower. Only 88 paise liquid asset are available for every rupee of urgent
liabilities. Whereas the ratio of Colgate is quite satisfactory because the company
has sufficient liquid asset to pay the urgent liabilities. Liquidity position of Closeup
is unsatisfactory. There appears to be higher incidence of inventory in the case of
Closeup because current ratio is higher and liquid ratio is lower.

Return on Capital Employed
The return of Closeup is 43.05% which is quite unsatisfactory. And the ratio
of Colgate is 50.73% which is also unsatisfactory. Comparing both the overall
profitability position of Colgate is satisfactory.

Return on Proprietors Fund
The return of Closeup is 141.9% and the return of Colgate is 101.46%. The
return of Closeup appears to be Satisfactory. Shareholder fund is utilized
effectively in case of Closeup.


21

Proprietors Ratio
The ratio of Closeup is 0.23 and that of Colgate is 0.37 respectively. The
ratio of Colgate is higher than that of Closeup. Proprietors interest in financing the
asset of Colgate is greater. Therefore, long term financial position of Colgate is
better than that of Closeup.

Debt Equity Ratio
The ratio of Closeup is 3.85 and that of Colgate is 0.165. Colgate depends on
debts to a lesser extent. Closeup depends on debts to a greater extent. It has greater
burden of interest on earnings.

Working Capital
The working Capital of Closeup is 2764. And the working capital of Colgate
is 1159. The overall profitability position of Closeup is satisfactory.

Stock Working Capital
The ratio of Closeup is 0.94:1, whereas that of Colgate is 15.98:1. The ratio
shows investment of working capital in inventory. The ratio of Colgate is very high
which shows higher incidence of inventory in Working Capital management. The
ratio of Colgate is 0.94 which is quite satisfactory. The working capital position of
Closeup is better than that of Colgate.

Return on Equity Capital
The return of Closeup is 142% which is not quite satisfactory and of Colgate
is 33.28%. Equity capital of the company is not utilized effectively. Overall
profitability position of the Colgate is better than Closeup.

22


Credit Payment Ratio
The payment period of Closeup is 18 days and that of Colgate is 21 days.
Colgate takes 21 days to make payment to creditors. So, Colgate takes full benefit
of credit.

Credit Turnover Ratio
The credit turnover of Closeup is 0.16 and that of Colgate is 0.56. Colgate
has a good turnover as compared to Closeup. Colgate is in a good position.

Earning Per Equity Share
The ratio of Closeup is 11.57 and that of Colgate is 12.23. Colgate is in a
good position to invest. The overall profitability position of Colgate is good.

Capital Gearing Ratio
The ratio of Closeup is 14.36% and that of Colgate is Nil respectively.
Capital is nil geared in case of Colgate. The ratio of Closeup is safe from long-term
creditors point of view as the company is financially sound.

Capital Turnover Ratio
The ratio of Closeup is 2.36 and Colgate is 2.54 times respectively. Colgate
is in a good position as compared to Closeup.



23

Fixed Asset Turnover Ratio
The ratio of Closeup is 11.90 and Colgate is 11.84 respectively. Fixed asset
of Closeup is more better than Colgate. It means Closeup has more asset than
Colgate.


Debt Service Ratio
The ratio of Closeup is 198.28 and that of Colgate is 16.76. Colgate depends
on debts to a lesser extent. Closeup depends on debts to a greater extent. It has
greater burden of interest on earnings.














24

CONCULSION

Accounting ratios are effective tools of analysis. Properly used and applied,
accounting ratios are capable of providing very useful information. They are the
indicators of managerial and operational efficiency. Some of the uses of
accounting ratios are summarized below:
1. Ratios simplify and summarize numerous accounting data in systematic
manner so that the simplified data can be used effectively for analytical
studies.

2. Ratios avoid distortions that may result from the study of absolute data or
figures.


3. Ratios analyze the financial health, operating efficiency and future prospects
by inter-relating the various financial data found in the financial statement.

4. Ratios are invaluable guides to management; they assist management to
discharge their functions of planning, forecasting, etc., effectively.


5. Ratios study the past and relate the findings to the present. Thus, useful
inferences are drawn which are used to project the future.

After survey about the companies we have found out that ratio analysis plays a
vital role in an organization. With the help of ratios we can find out that which is
the strength and weakness of the organization. It helps to find out the overall
profitability position of the Companies.