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INDEX
SR CONTENTS PAGE NO
1
Chapter 1
Executive Study
Research Methodology
Objective of the study
Limitation of the study
2-8
2
3-5
6
7
2
Chapter 2
Introduction of Ratio Analysis
Advantages of Ratio Analysis
Disadvantages of Ratio analysis
Importance of Ratio Analysis
Components of Ratio Analysis
Types of Ratio in Ratio Analysis
8-23
8-9
10-12
13-14
15-16
17-19
20-23
3
Chapter 3
Profile of Company
Balance Sheet of Godrej
Profit & Loss account of Godrej
Cash Flow of Godrej
Key Financial Ratios of Godrej
Data Analysis and Interpretations
24-38
24-27
28-29
30-31
32
33-35
36-37
5
Chapter 5
Findings
Recommendations
Conclusions
38-40
38
39
40
6.
Wibliography
41

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1. INTRODUCTION
Executive Summary
Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication
of a firm's financial performance in several key areas. The ratios are categorized as Short-term
Solvency Ratios, Debt Management Ratios, Asset Management Ratios, Profitability Ratios, and
Market Value Ratios. Because Ratio Analysis is based upon accounting information, its
effectiveness is limited by the distortions which arise in financial statements due to such things as
Historical Cost Accounting and inflation. Therefore, Ratio Analysis should only be used as a first
step in financial analysis, to obtain a quick indication of a firm's performance and to identify areas
which need to be investigated further.
The Godrej Group is an Indian conglomerate headquartered in Mumbai, Maharashtra, India,
managed and largely owned by the Godrej family. It was founded by Ardeshir Godrej and Pirojsha
Godrej in 1897, and operates in sectors as diverse as real estate, consumer products, industrial
engineering, appliances, furniture, security and agricultural products. Subsidiaries and affiliated
companies include Godrej Industries and its subsidiaries Godrej Consumer Products, Godrej
Agrovet, and Godrej Properties, as well as the private holding company Godrej & Boyce.
This project is specially designed to understand the subject matter of Financial Statement Analysis
through various ratios in the company. This project gives us information and report about
companys Financial Position. Throughout the project the focus has been on presenting
information and comments in easy and intelligible manner. This project is very useful for those
who want to know about company and financial position of the company.
In this project I have mentioned all the financial and accounting aspects of the company. The first
few pages talk about the introduction of the subject and also of the organization. This is followed
by literature review followed by the objectives of the study and research methodology. Then
comes real part of the study in which I have written all about the main topic i.e. Ratio Analysis of
Godrej. The objectives of the is to know the financial structure of Godrej for this I have used the
Ratio analysis and balance sheet of the company presenting it in very effective manners by tables,
chart and interpretation for the same has been done and also in order to make it more effective I
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have used tables and line charts. My study was to know the actual results given by comparing
various years balance sheet and profit and loss account of last five year.


[4]

Research Methodology
Research
Research means search for facts in order to find answers to certain questions or to find solutions to
certain problems. It is often referred to as scientific inquiry or scientific investigation into a
specific problem or situation. This is because the search for facts should be made by scientific
method rather than by arbitrary method. The scientific method uses systematic rational approach to
search for facts, whereas, the arbitrary method attempts to find answers to questions on the basis of
imagination and ones own beliefs and judgments.
William C. Emory in his book Business Research Methods defines research as any organized
inquiry designed and carried out to provide information for solving a problem.
Methodology
In simple terms methodology can be defined as, it is used to give a clear cut idea on what the
researcher is carrying out his or her research. In order to plan in a right point of time and to
advance the research work methodology makes the right platform to the researcher to mapping out
the research work in relevance to make solid plans.
More over methodology guides the researcher to involve and to be active in his or her particular
field of enquiry. Most of the situations the aim of the research and the research topic wont be
same at all time it varies from its objectives and flow of the research but by adopting a suitable
methodology this can be achieved.
Right from selecting the topic and carrying out till recommendations research methodology drives
the researcher in the right track. The entire research plan is based on the concept of right
methodology.
More over through methodology the external environment constitutes the research by giving a
depth idea on setting the right research objective, followed by literature point of view, based on
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that chosen analysis through interviews or questionnaires findings will be obtained and finally
concluded message by this research.
On the other hand from the methodology the internal environment constitutes by understanding
and identifying the right type of research, strategy, philosophy, time horizon, approaches, followed
by right procedures and techniques based on his or her research work. In other hand the research
methodology acts as the nerve center because the entire research is bounded by it and to perform a
good research work, the internal and external environment has to follow the right methodology
process.
Research Methodology
Research methodology is a set of various methods to be followed to find out various information
regarding market strata of different products. Research methodology required in every industry for
acquiring knowledge of their products.
Sources of Data
There are two types of data namely primary data and secondary data.
Primary data
Primary data refers to those data that are collected newly and they are not used earlier. The
researcher has to gather the primary data freshly for the specific study undertaken by him.
Secondary data
The secondary data refers to those data which were gathered for some other purpose and are
already available in the firms internal records and commercial trade or government publications.
This project is based on secondary data which is collected from internet and various books.


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CHAPTER SCHEME
Chapter 1
It deals with introduction, research methodology, objectives of the study, scope of study, and
limitation of study.
Chapter 2
It contains Introduction about the Ratio analysis its meaning, advantages, disadvantages,
objectives, importance and components.
Chapter 3
It deals with company profile, financial statements and Ratio analysis of Godrej.
Chapter 4
It deals with findings, suggestions and conclusion.



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Objective of the Study
The major objectives of the resent study are to know about financial strengths and weakness of
Godrej.
To study ratio analysis of Godrej Industry.
To study various types of ratios.
To analyze the various ratios of Godrej Industry.
To understand the liquidity, profitability and efficiency positions of the company during the
study period.
To evaluate and analyze various facts of the financial performance of the company. To
make comparisons between the ratios during different periods.




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Limitation of the Study
The time period of the study was not sufficient to measure the consumers response
effectively and reach to a more valid conclusion.



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2. RATIO ANALYSIS
Introduction
Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication
of a firm's financial performance in several key areas. The ratios are categorized as Short-term
Solvency Ratios, Debt Management Ratios, Asset Management Ratios, Profitability Ratios, and
Market Value Ratios.
Ratio Analysis as a tool possesses several important features. The data, which are provided by
financial statements, are readily available. The computation of ratios facilitates the comparison of
firms which differ in size. Ratios can be used to compare a firm's financial performance with
industry averages. In addition, ratios can be used in a form of trend analysis to identify areas where
performance has improved or deteriorated over time.
Because Ratio Analysis is based upon accounting information, its effectiveness is limited by the
distortions which arise in financial statements due to such things as Historical Cost Accounting
and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis, to
obtain a quick indication of a firm's performance and to identify areas which need to be
investigated further.
The term ratio simply means one number expressed in terms of another. It describes in
mathematical terms the quantitative relationship that exists between two numbers, the terms
accounting ratio. J. Batty points out, is used to describe significant relationships between figures
shown on a Balance Sheet, in a Profit and Loss Account, in a Budgetary control System or in any
other Part of the accounting organisation. Ratio Analysis, simply defined, refers to the analysis and
interpretation of financial statements through ratios. Nowadays it is used by all business and
industrial concerns in their financial analysis. Ratios are considered to be the best guides for the
efficient execution of basic managerial functions like planning, forecasting, control etc.

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Ratios are designed to show how one number is related to another. It is worked out by dividing one
number by another. Ratios are customarily presented either in the form of a coefficient or a
percentage or as a proportion. For example, the current Assets and current Liabilities of a business
on a particular date are Rs. 2.5 Lakhs and Rs. 1.25 lakhs respectively. The resulting ratio of current
Assets and current Liabilities could be expressed as (i.e. Rs. 2,00,000/1,25,000) or as 200 per cent.
Alternatively in the form of a proportion the same ratio may be expressed as 2:1, i.e. the current
assets are two times the current liabilities.
Ratios are invaluable aids to management and others who are interested in the analysis and
interpretation of financial statements. Absolute figures may be misleading unless compared, one
with another. Ratios provide the means of showing the relationship which exists between figures.
Though there is no special magic in ratio analysis, many prefer to base conclusions on ratios as
they find them highly useful for making judgments more easily. However, the numerical
relationships of the kind expressed by ratio analysis are not an end in them, but are a means for
understanding the financial position of a business. Generally, simple ratios or ratios compiled from
a single year financial statements of a business concern may not serve the real purpose. Hence,
ratios are to be worked out from the financial statements of a number of years.
Ratios, by themselves, are meaningless. They derive their status partly from the ingenuity and
experience of the analyst who uses the available data in a systematic manner. Besides, in order to
reach valid conclusions, ratios have to be compared with some standards that are established with a
view to represent the financial position of the business under review. However, it should be borne
in mind that after computing the ratios one cannot categorically say whether a particular ratio is
god or bad as the conclusions may vary from business to business. A single ideal ratio cannot be
applied for all types of business. Speedy compiling of ratios and their presentations in the
appropriate manner are essential. A complete record of ratios employed in advisable and
explanation of each, and actual ratios year by year should be included. This record may be treated
as a part of an Accounts Manual or a special Ratio Register may be maintained.

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Advantages of Ratio Analysis

Ratio analysis is very useful tool of management accounting. With this, we can analyze business's
financial position. We also check company's short term and long term solvency with ratio analysis.
Following are the main advantages of ratio analysis.

1. Helpful in Decision Making
All our financial statements are made for providing information. But this information is not helpful
for decision making because financial statements provide only raw information. When we
calculate different ratios in ratio analysis, at that time, we get useful information. I can explain it
with simple example. Suppose, we calculate our interest coverage ratio which is 10times but our
competitor company's interest coverage ratio is 15 times. It means capacity of the profit of our
competitor company is more than us. By seeing this, we can take decisions for increasing our
profitability.

2. Helpful in Financial Forecasting and Planning
Every year we calculate lots of accounting ratios. When we make trend of all these ratios, we can
get useful information for our future forecasting and planning. For example, we can tell five year
collection period with following way

2007 = 90 days
2008 = 70 days
2009 = 60 days
2010 = 50 days
2011 = 30 days
From this trend, we know that we are decreasing the days for collection money from our debtors.
With this information, we can make two plans. One is effective use of money which we are getting
from our debtors more fastly and second we can also check the behavior of our debtors by
comparing this with sales trend. Like this, there are lots of ratios which are also useful for better
planning.

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3. Helpful in Communication
Ratio analysis are more important from communication point of view. Suppose, we have to
appoint new sales agents for our company. At that time, we can communicate them by using our
company's sales and profit related ratios. There is no need of hi-tech for understanding the
meaning of any specific ratio. For example, our gross profit in 2010 is 26.6% and in 2011, it is
28.55%. By just telling this ratio, we can understand whether our company is growing or falling.

4. Helpful in Co-ordination
No company has all the strength points. Company's financial results shows some strength points
and some weak points. Ratio analysis can create co-ordination between strength points and weak
points.

5. Helps in Control
Ratio analysis can also use for controlling our business. We can easily create the standard of each
financial item of our balance sheet and profit and loss account. On this basis, we can also calculate
standard ratios. By comparing standard ratios with actual accounting ratios, we can find variance.
These variance may be favorable and unfavorable. On this basis, we can control our business from
financial point of view.

6. Helpful for Shareholder's decisions
For example, I am a shareholder. I want to invest in any company's shares. Before buying any
company's shares, I will be interested to know company's long term solvency. So, I have to
calculate long term solvency ratios. In which, I have to calculate fixed assets to net worth ratio,
fixed assets to long term debt ratio. On this basis, I can know the level of fixed assets and its main
resource. After checking my money's security, I will be interested to know my return on this
investment. ROI, EPS and DPS are most useful ratios which I can calculate for knowing this.

7. Helpful for Creditors' decisions
Creditors are those persons who provide goods on credit to company or provides short period loan
to company. All the creditors are interested to know whether company will repay their debt or not.
For this, they calculate current ratio and quick liquid ratio and average payment period. On this
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basis, they take decisions.

8. Helpful for employees' decisions
Every employee wants to increase his salary. He also wants to get more and more incentives from
company. For this, he takes help from company's profitability ratios. Profitability ratios will be
helpful for employees to pressure on the company for increasing their salary.

9. Helpful for Govt. decisions
Different companies analyze their accounting ratios and publish on the net and print newspapers.
Govt. collects all these information. On this basis, Govt. makes policies. If ratios will wrong, Govt.
policies will become wrong. For example, Govt. collects income data of all companies in different
industries for calculation the national income.



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Disadvantages of Ratio analysis
Ratio analysis is used by almost all the accounts managers for strategic planning and decision
making. It also very helpful tool to know the effect of each item of financial statements by creating
relationship with other items. There is big list of benefits of ratio analysis but it has also some
limitations. So, account managers and other parties who use ratio and its analysis should remember
these limitations when they take any decision.

Following are main drawbacks or limitations of ratio analysis:
Limited Use of Single Ratio
Sometime, we cannot compare our ratios with others. For example, we have started new
business and our financial results are not still normal. At that time, our profitability ratio will
have limited use because there is not any past data of profitability ratios.

Lack of Adequate Standards
We could not make standards of all ratios. For example, we cannot tell what is rule of them
of our net profit ratio because there are lots of factors affect it. In the lack of adequate
standards of ratios, we cannot give exact comment on the basis of ratio analysis.

Inherent Limitation of Financial Accounting
Ratio analysis is just like simplification of financial accounting data. But there are lots of
limitations of financial accounting. All these limitation will be absorbed by ratios. This is the
one of the important limitation of ratio. I can say if base is not good, everything will be
wrong. If there is small portion of poison in milk, its effect will be in everything what you
will make.

Changes of Accounting Procedures
If accounting procedures will change; our accounting ratio will be changed. At that time, we
cannot compare our current year ratios with our past year ratios. For example, in past year,
we had used LIFO but current year; we are using FIFO for inventory valuation. Due to this,
figures of closing stock will be different. On this basis, if we have calculated current ratio, it
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will not be comparable with past current ratio.

Window Dressing
Because we have shown our financial data through window dressing. Our ratios will also be
affected from it.

Personal Bias
This is reality, I saw many CAs who waste their time to optimize different ratios by changing
the project financial statements figures for making attractive projects. All these activities are
done for getting loan. So, this will make the drawback of ratio analysis.

Matchless
Different companies use different accounting policies, so, we cannot compare their ratios.

Price Level Changes
Inflation effect is ignored in calculation of ratios. So, ratio will not give perfect answer in
changing of price level.

Ratios are not Substitute of Financial Statements
Ratio analysis is important part of financial statements analysis. It can never become
a substitute of financial statements. We just use it with cash flow analysis, fund flow analysis
and other analysis.

Wrong Interpretation
We can interpretate wrongly. For explaining the effect on company's position with ratios,
there is big need of experience. Wrong interpretation will be helpful for wrong decisions. So,
it is limitation of ratio analysis that it does not explain all the facts, it has to explain. For a
new accounts manager, it may be difficult.


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Importance of Ratio Analysis
The importance of Ratio analysis lies in the fact that it presents facts on a comparative basis and
enables the drawing of inference regarding the performance of a firm. Ratio analysis is relevant in
assessing the performance of a firm in respect of the following aspects:
Simplifies Accounting Figures:
The most significant objective of ratio analysis is that it simplifies the accounting figures in much
easier way by which anyone can be understood it quite easily even for those who do not know the
language of accounting.

Liquidity Portion:
The liquidity portion of a firm would be satisfactory if it is able to meet its current obligations
when they become due. A firm can be said to have the ability to meet its short maturing debt
usually within a year as well as the principal. This ability is reflected in the liquidity ratios of a
firm.

Long term Solvency
Ratio analysis is equally useful for assessing the long term financial viability of a firm. The long
term solvency is measured by the leverage or capital structure and profitability ratio which focus
on earning power and operating efficiency. Ratio analysis reveals the strength and weakness of a
firm.

Operating efficiency
Ratio Analysis throws light on the degree of efficiency in the management and utilization of its
assets. It would be recalled that the various activity ratios measures this kind of operational
efficiency.

Overall profitability
The management is constantly concerned about the over all profitability of the enterprises they are
concerned about the ability of the firm to meet its short term as well as long term obligation to its
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creditors to ensure a reasonable return to its owners and secure optimum utilization of the assets of
the firm.

Inter firm comparison
An inter firm comparison would demonstrate the relative portion vis--vis its competitors. If the
results are at variance either with the industry average or with those of the competitors the firm can
seal to identify the probable reasons and in the light take remedial measures.

Trend Analysis
Trend analysis of ratios reveals whether financial position of the firm is improving or deteriorating
over years because it enables a firm to take the time dimension into account. With the help of such
analysis one can ascertain whether the trend may be increasing.
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Components of Ratio Analysis
1. Earnings
The key element all investors look after is earnings. Before investing in a company you want to
know how much the company is making in profits. Future earnings are a key factor as the future
prospects of the company's business and potential growth opportunities are determinants of the
stock price.
Factors determining earnings of the company are such as sales, costs, assets and liabilities. A
simplified view of the earnings is earnings per share (EPS). This is a figure of the earnings which
denotes the amount of earnings for each outstanding share.
2. Profit Margins
Amount of earnings do not tell the full story, increasing earnings are good but if the cost increases
more than revenues then the profit margin is not improving. The profit margin measures how much
the company keeps in earnings out of every dollar of their revenues. This measure is therefore very
useful for comparing similar companies, within the same industry.
Higher profit margin indicates that the company has better control over its costs than its
competitors. Profit margin is displayed in percentages and a 10 percent profit margin denotes that
the company has a net income of 10 cents for each dollar of their revenues.
3. Return on Equity (ROE)
Return of equity (ROE) is a financial ratio that does not account for the stock price. Since it
ignores the price entirely it is by many thought of as THE most important financial measure. It can
basically be thought of as the parent ratio that always needs to be considered.
This ratio is a measure of how efficient a company is in generating its profits. It is a ratio of
revenue and profits to owners' equity (shareholders are the owners). Specifically it is:
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An easy example of this is that if company A and company B both generate net profits of $1
Million but company A has equity of $10 Million but company B has equity of $100 Million.
Their ROE would be 10% and 1% respectively meaning that company A is more efficient as it was
able to produce the same amount of earnings with 10 times less equity.
The reason for why this measure is so important is because it contains information about several
factors, such as:
Leverage (which is the debt of the company)
Revenue, profits and margins
Returning values to shareholders
Good approximation is that ROE should be 10-40% greater than its peer.
4. Price-to-Earnings (P/E)
When taking the current market price into consideration, the most popular ratio is the Price-to-
Earnings (P/E) ratio. As the name suggest it is the current market price divided by its earnings per
share (EPS). It is an easy way to get a quick look of a stock's value.
A high P/E indicates that the stock is priced relatively high to its earnings, and companies with
higher P/E therefore seem more expensive. However, this measure, as well as other financial
ratios, needs to be compared to similar companies within the same sector or to its own historical
P/E. This is due to different characteristics in different sectors and changing markets conditions.
This ratio does not tell the full story since it does not account for growth. Normally, companies
with high earnings growth are traded at higher P/E values than companies with more moderate
growth rate. Accordingly, if the company is growing rapidly and is expected to maintain its growth
in the future this current market price might not seem so expensive. This is the reasoning for the
existence of different investment styles; Value vs. Growth stocks.

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5. Price-to-Book (P/B)
A price-to-book (P/B) ratio is used to compare a stock's market value to its book value. It can be
calculated as the current share price divided to the book value per share, according to previous
financial statement. In a broader sense, it can also be calculated as the total market capitalization of
the company divided by all the shareholders equity.
This ratio gives certain idea of whether you are paying too high price for the stock as it denotes
what would be the residual value if the company went bankrupt today.
A higher P/B ratio than 1 denotes that the share price is higher than what the company's assed
would be sold for. The difference indicates what investors think about the future growth potential
of the company.

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Types of Ratio in Ratio Analysis
You have learnt that accounting ratios can be classified into five major groups viz. liquidity ratios,
activity ratios, solvency ratios, profitability ratios and leverage ratio. You have already learnt the
meaning, computations and significance of liquidity and activity ratios. In this lesson, you will
learn about the various solvency ratios, profitability ratios and leverage ratio and their significance.
SOLVENCY RATIOS
The term solvency refers to the ability of a concern to meet its long term obligations. The long-
term liability of a firm is towards debenture holders, financial institutions providing medium and
long term loans and other creditors selling goods on credit. These ratios indicate firms ability to
meet the fixed interest and its costs and repayment schedules associated with its long term
borrowings. The following ratios serve the purpose of determining the solvency of the business
firm.
Debt equity ratio
Proprietary ratio

Debt-equity ratio
It is also otherwise known as external to internal equity ratio. It is calculated to know the relative
claims of outsiders and the owners against the firms assets. This ratio establishes the relationship
between the outsiders funds and the shareholders fund.
Thus,




The two basic components of the ratio are outsiders funds and shareholders funds. The outsiders
funds include all debts/liabilities to outsiders i.e. debentures, long term loans from financial
institutions, etc.

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Shareholders funds mean preference share capital, equity share capital, reserves and surplus and
fictitious assets like preliminary expenses. This ratio indicates the proportion between
shareholders funds and the long-term borrowed funds. In India, this ratio may be taken as
acceptable if it is 2: 1. If the debt-equity ratio is more than that, it shows a rather risky financial
position from the long term point of view.

Proprietary ratio
It is also known as equity ratio. This ratio establishes the relationship between shareholders funds to
total assets of the firm. The shareholders fund is the sum of equity share capital, preference share
capital, reserves and surpluses. Out of this amount, accumulated losses should be deducted. On the
other hand, the total assets mean total resources of the concern. The ratio can be calculated as under:




PROFITABILITY RATIOS
The main aim of an enterprise is to earn profit which is necessary for the survival and growth of
the business enterprise. It is earned with the help of amount invested in business. It is necessary to
know how much profit has been earned with the help of the amount invested in the business. This
is possible through profitability ratio.
These ratios examine the current operating performance and efficiency of the business concern.
These ratios are helpful for the management to take remedial measures if there is a declining trend.
The important profitability ratios are:
(i) Gross profit ratio
(ii) Net profit ratio
(iii) Operating profit ratio
(iv) Return on investment ratio

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(i) Gross profit ratio
It expresses the relationship of gross profit to net sales. It is expressed in percentage. It is
computed as




(ii) Net profit ratio
A ratio of net profit to sales is called Net profit ratio. It indicates sales margin on sales. This is
expressed as a percentage. The main objective of calculating this ratio is to determine the overall
profitability. The ratio is calculated as




(iii) Operating profit ratio
Operating profit is an indicator of operational efficiencies. It reveals only overall efficiency. It
establishes relationship between operating profit and net sales. This ratio is expressed as a
percentage. It is calculated as:




Operating Profit = Gross Profit (Administration expenses + selling expenses)
(iv) Return on investment ratio (ROI)
ROI is the basic profitability ratio. This ratio establishes relationship between net profit (before
interest, tax and dividend) and capital employed. It is expressed as a percentage on investment.
The term investment here refers to long-term funds invested in business. This investment is called
capital employed.
Capital employed = Equity share capital + preference share capital+ Reserve and surplus + long
term liabilities fictitious assets Non trading investment.
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Capital employed = (Fixed asset depreciation) + (Current Asset Current liabilities).
Capital employed = (Fixed Assets Depreciation) + (Working capital)
This ratio is also known as Return on capital employed ratio. It is calculated as under





LEVERAGE RATIO
Leverage ratio is otherwise known as capital structure ratio. The term capital structure refers to the
relationship between various long term forms of financing such as debentures (long term),
preference share capital and equity share capital including reserves and surpluses. Financing the
firms assets is a very crucial problem in every business and as a rule there should be a proper mix
of debt and equity capital in financing the firms assets. Leverage or capital structure ratios are
calculated to test the long term financial position of a firm.
Generally capital gearing ratio is mainly calculated to analyze the leverage or capital structure of
the firm
Capital gearing ratio
The capital gearing ratio is described as the relationship between equity share capital including
reserves and surpluses to preference share capital and other fixed interest bearing loans. If
preference share capital and other fixed interest bearing loans exceed the equity share capital
including reserves, the firm is said to be highly geared. The firm is said to be low geared if
preference share capital and other fixed interest bearing loans are less than equity capital and
reserves.




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3. Company Profile
Godrej Group

Brighter Living
Type
Public company
Industry
Conglomerate
Founded
1897
Founders
Ardeshir Godrej
Pirojsha Godrej
Headquarters
Mumbai, Maharashtra, India
Area served
Worldwide
Key people
Adi Godrej (Chairman)
Jamshyd Godrej, Nadir Godrej
Products
Real estate, FMCG, industrial engineering, home appliances, furniture,
security, Agri care
Employees
26,000 (2013)
Subsidiaries
GCPL, Godrej Infotech Ltd, Godrej Industries Ltd, Godrej Properties
Properties, Godrej Agrovet
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The Godrej Group is an Indian conglomerate headquartered in Mumbai, Maharashtra, India,
managed and largely owned by the Godrej family. It was founded by Ardeshir Godrej and Pirojsha
Godrej in 1897, and operates in sectors as diverse as real estate, consumer products, industrial
engineering, appliances, furniture, security and agricultural products. Subsidiaries and affiliated
companies include Godrej Industries and its subsidiaries Godrej Consumer Products, Godrej
Agrovet, and Godrej Properties, as well as the private holding company Godrej & Boyce.
Social responsibility
Godrej has a philanthropic arm that has built schools, dispensaries and a residential complex for
their employees. Trusts established by Godrej continue to invest in education, healthcare and
upliftment of the underprivileged.
Operations
The Godrej group can be broadly divided into two major holding companies, working
independently:
1. Godrej Industries Ltd
2. Godrej & Boyce Mfg. Co. Ltd.
The major companies, subsidiaries and affiliates are
Chemical & commodities
Godrej Industries
Chemicals
Veg Oils
FMCG
Godrej Consumer Products
Keyline Brands UK
Rapidol South Africa
Godrej Global Mideast FZE
Godrej SCA Hygiene Limited
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Godrej Hershey Foods & Beverages Limited
Nutrine
Godrej Sara Lee
AGRI
Godrej Agrovet
Animal Feeds
Goldmohur Foods and Feeds
Golden Feed Products
Higashimaru Feed Products
Oil Palm
Agri Inputs
Godrej Aadhaar
Nature's Basket
Integrated Poultry Business
Plant Biotech
Services
Godrej HiCare (Pest Management Services)
Godrej Global Solutions (ITES)
Godrej Properties
Achievements
In 1897, Godrej introduced the first lock with lever technology in India.
In 1902, Godrej made the first Indian safe.
In 1920, Godrej made soap using vegetable oil, which was a huge hit with the vegetarian
community in India
In 1955, Godrej produced India's first indigenous typewriter
In 1989, Godrej became the first company to introduce PUF ( Polyurethane Foam)
[28]

Introduced India's first and only 100% CFC, HCFC, HFC free refrigerators (Claim to be
validated)
Awards
GCPL, the Highest Ranked Indian FMCG in Asia's Hot Growth Companies' List by Business
Week
Godrej Consumer Products Ltd. has been ranked 14th in The Best Companies to Work For
study. This study was jointly conducted by Business Today, Mercer andTaylor Nelson
Sofres (TNS)
Godrej Consumer Products Ranks 6th in ET-Hewitt Best Employers of India survey
GCPL ranked 15th in Great Places to Work 2006 survey
The Corporate Citizen of the Year Award given by Economic Times.
Flagship brands Goodknight, Cinthol and Ezee selected Superbrands by the Superbrands
Council
Godrej Sara Lee, the JV between the Godrej Group and Sara lee Corporation, USA is
acknowledged the World's largest mat manufacturers and South Asia's largest manufacturers
of Coils.
Godrej Consumer Products Limited, adjudged as a Business Superbrand by the Super Brands
Council.
The Return on Capital Employed and Return on Net Worth ratios of Godrej Consumer
Products - the highest in corporate India.
Godrej Consumer Products was awarded the "Best Managed Workforce" award given by
Hewitt Associates and CNBC TV18.
Godrej Consumer Products features in the Top 25 list of Great Places to Work (survey
conducted by GrowTalent in association with Business World) for four years in a row.
Lifetime Achievement Award for Godrej Industries from CHEMEXCIL, the Basic Chemicals
Pharmaceuticals and Cosmetics Exports Promotion Council.

[29]

Balance Sheet of Godrej
Balance Sheet of Godrej Industries ------------------- in Rs. Cr. -------------------

Mar
'14
Mar '13 Mar '12 Mar '11 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 33.12 33.52 31.76 31.76 31.76
Equity Share Capital 33.12 33.52 31.76 31.76 31.76
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves
1,401.8
1
1,590.60 1,190.23 1,046.90 978.07
Revaluation Reserves 0.00 0.00 10.56 11.50 12.86
Networth
1,434.9
3
1,624.12 1,232.55 1,090.16 1,022.69
Secured Loans 7.00 70.26 17.49 83.23 204.19
Unsecured Loans
1,332.2
0
797.36 489.23 470.99 343.42
Total Debt
1,339.2
0
867.62 506.72 554.22 547.61
Total Liabilities
2,774.1
3
2,491.74 1,739.27 1,644.38 1,570.30

Mar
'14
Mar '13 Mar '12 Mar '11 Mar '10


12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

[30]



Gross Block 944.88 713.17 718.09 677.51 615.13
Less: Accum. Depreciation 330.25 391.79 386.59 363.34 338.82
Net Block 614.63 321.38 331.50 314.17 276.31
Capital Work in Progress 382.00 489.02 164.34 5.45 21.98
Investments
2,048.2
6
1,339.25 1,353.81 1,233.75 1,147.62
Inventories 232.17 138.25 199.83 185.09 134.77
Sundry Debtors 103.66 139.62 133.28 127.75 110.87
Cash and Bank Balance 64.86 446.54 15.82 44.11 14.75
Total Current Assets 400.69 724.41 348.93 356.95 260.39
Loans and Advances 182.08 326.22 371.64 203.94 186.40
Fixed Deposits 0.00 0.00 57.69 0.00 0.34
Total CA, Loans & Advances 582.77 1,050.63 778.26 560.89 447.13
Deffered Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 773.25 624.05 813.15 394.94 253.39
Provisions 80.28 84.49 75.49 74.94 69.34
Total CL & Provisions 853.53 708.54 888.64 469.88 322.73
Net Current Assets -270.76 342.09 -110.38 91.01 124.40
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets
2,774.1
3
2,491.74 1,739.27 1,644.38 1,570.31

Contingent Liabilities 324.28 214.16 197.62 80.98 64.40
Book Value (Rs) 42.78 48.46 38.47 33.96 31.79
[31]

Profit & Loss account of Godrej

------------------- in Rs. Cr. -------------------

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10


12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 1,453.55 1,464.63 1,510.02 1,121.56 856.29
Excise Duty 0.00 0.00 72.58 65.33 41.87
Net Sales 1,453.55 1,464.63 1,437.44 1,056.23 814.42
Other Income 144.98 93.54 108.72 184.35 155.43
Stock Adjustments 53.62 -25.64 9.15 23.16 17.36
Total Income 1,652.15 1,532.53 1,555.31 1,263.74 987.21
Expenditure

Raw Materials 995.97 967.59 901.21 717.83 542.14
Power & Fuel Cost 122.77 108.82 97.48 76.77 65.62
Employee Cost 112.33 115.33 117.93 117.67 105.83
Other Manufacturing
Expenses
0.00 0.00 15.83 10.01 15.02
Selling and Admin
Expenses
0.00 0.00 83.32 77.28 64.67
Miscellaneous Expenses 176.75 155.69 40.77 36.20 25.14
Preoperative Exp
Capitalised
0.00 0.00 0.00 0.00 0.00
Total Expenses 1,407.82 1,347.43 1,256.54 1,035.76 818.42

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
[32]




12 mths 12 mths 12 mths 12 mths 12 mths

Operating Profit 99.35 91.56 190.05 43.63 13.36
PBDIT 244.33 185.10 298.77 227.98 168.79
Interest 94.84 64.82 70.53 63.12 60.42
PBDT 149.49 120.28 228.24 164.86 108.37
Depreciation 24.61 23.12 27.19 28.85 28.39
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 124.88 97.16 201.05 136.01 79.98
Extra-ordinary items 0.00 0.00 0.34 1.36 0.44
PBT (Post Extra-ord
Items)
124.88 97.16 201.39 137.37 80.42
Tax 5.19 0.42 -0.17 3.94 -0.80
Reported Net Profit 119.69 96.74 201.56 133.43 80.93
Total Value Addition 411.85 379.84 355.33 317.93 276.27
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 58.71 58.69 55.64 55.58 47.64
Corporate Dividend Tax 9.98 9.52 9.03 9.02 7.91
Per share data (annualised)

Shares in issue (lakhs) 3,354.55 3,351.66 3,176.25 3,176.25 3,176.25
Earnings Per Share
(Rs)
3.57 2.89 6.35 4.20 2.55
Equity Dividend (%) 175.00 175.00 175.00 175.00 150.00
Book Value (Rs) 42.78 48.46 38.47 33.96 31.79
[33]

Cash Flow of Godrej

------------------- in Rs. Cr. -------------------

Mar
'14
Mar
'13
Mar
'12
Mar
'11
Mar
'10


12
mths
12
mths
12
mths
12
mths
12
mths

Net Profit Before Tax 124.88 97.16 201.05 136.01 79.99
Net Cash From Operating
Activities
92.16 14.15 204.05 115.67 77.10
Net Cash (used in)/from
Investing Activities
-
314.88
-
691.01
-4.47 26.36 99.11
Net Cash (used in)/from Financing
Activities
253.19 651.22
-
183.58
-
113.01
-189.64
Net (decrease)/increase In Cash
and Cash Equivalents
30.47 -25.64 16.00 29.02 -13.43
Opening Cash & Cash Equivalents 34.06 59.50 43.57 15.09 28.51
Closing Cash & Cash Equivalents 64.53 33.86 59.57 44.11 15.09






[34]

Key Financial Ratios of Godrej

Mar
'14
Mar
'13
Mar
'12
Mar '11
Mar
'10

Investment Valuation Ratios

Face Value 1.00 1.00 1.00 1.00 1.00

Dividend Per Share 1.75 1.75 1.75 1.75 1.50

Operating Profit Per Share (Rs) 2.96 2.73 5.98 1.37 0.42

Net Operating Profit Per Share
(Rs)
43.33 43.70 45.26 33.25 25.64

Free Reserves Per Share (Rs) -- -- 36.27 31.96 29.79

Bonus in Equity Capital 28.89 28.55 30.13 30.13 30.13

Profitability Ratios

Operating Profit Margin (%) 6.83 6.25 13.22 4.13 1.64

Profit Before Interest And Tax
Margin (%)
5.00 4.56 11.09 1.33 -1.71

Gross Profit Margin (%) 5.14 4.67 11.32 1.39 -1.84

Cash Profit Margin (%) 2.68 4.07 10.21 2.52 1.85

Adjusted Cash Margin (%) 2.68 4.07 10.21 2.52 1.85

Net Profit Margin (%) 8.00 6.45 13.73 12.04 9.22

Adjusted Net Profit Margin (%) 8.00 6.45 13.73 12.04 9.22

Return On Capital Employed
(%)
4.16 4.14 11.17 4.05 3.05

Return On Net Worth (%) 8.34 5.95 16.49 12.36 8.01

Adjusted Return on Net Worth
(%)
1.07 2.34 10.04 -0.08 -1.19

[35]

Return on Assets Excluding
Revaluations
42.78 48.46 38.47 33.96 31.79

Return on Assets Including
Revaluations
42.78 48.46 38.81 34.32 32.20

Return on Long Term Funds
(%)
5.50 5.04 13.18 5.15 3.73

Liquidity And Solvency Ratios

Current Ratio 0.38 0.86 0.66 0.67 0.69

Quick Ratio 0.41 1.29 0.64 0.78 0.93

Debt Equity Ratio 0.93 0.53 0.41 0.51 0.54

Long Term Debt Equity Ratio 0.46 0.26 0.20 0.19 0.26

Debt Coverage Ratios

Interest Cover 1.22 1.59 2.74 1.47 0.94

Total Debt to Owners Fund 0.93 0.53 0.41 0.51 0.54

Financial Charges Coverage
Ratio
1.48 1.95 3.12 1.50 1.26

Financial Charges Coverage
Ratio Post Tax
2.52 2.85 4.24 3.57 2.81

Management Efficiency Ratios

Inventory Turnover Ratio 6.26 10.59 7.89 6.53 6.97

Debtors Turnover Ratio 11.95 10.73 11.01 8.85 5.99

Investments Turnover Ratio 6.26 10.59 7.89 6.53 6.97

Fixed Assets Turnover Ratio 1.54 2.06 2.05 1.60 1.36

Total Assets Turnover Ratio 0.52 0.59 0.84 0.65 0.53

Asset Turnover Ratio 0.55 0.69 0.85 0.66 0.51

Average Raw Material Holding -- -- 36.17 38.81 36.77

[36]

Average Finished Goods Held -- -- 13.47 16.63 13.08

Number of Days In Working
Capital
-64.24 70.81 -52.34 43.84 54.99

Profit & Loss Account Ratios

Material Cost Composition 68.51 66.06 62.69 67.96 66.56

Imported Composition of Raw
Materials Consumed
39.05 32.66 47.61 49.33 48.83

Selling Distribution Cost
Composition
-- -- 4.24 5.20 6.40

Expenses as Composition of
Total Sales
35.30 50.17 39.50 39.39 36.79

Cash Flow Indicator Ratios

Dividend Payout Ratio Net
Profit
49.05 60.66 27.60 41.65 58.87

Dividend Payout Ratio Cash
Profit
40.68 48.96 24.32 34.24 43.58

Earning Retention Ratio -279.26 -54.32 54.68 6,141.30 493.70

Cash Earning Retention Ratio -46.44 4.03 62.90 -98.99 -192.53

Adjusted Cash Flow Times 33.40 14.19 3.38 19.84 33.62



Mar
'14
Mar
'13
Mar
'12
Mar '11
Mar
'10

Earnings Per Share 3.57 2.89 6.35 4.20 2.55

Book Value 42.78 48.46 38.47 33.96 31.79



[37]

WIBLIOGRAPHY
http://accountlearning.blogspot.in/2010/02/ratio-analysis.html
http://accountingexplained.com/financial/ratios/advantages-limitations
http://www.svtuition.org/2011/12/advantages-of-ratio-analysis.html
http://www.selfgrowth.com/articles/significance-of-ratio-analysis-towards-business-performance
https://www.classle.net/content-page/types-ratio-ratio-analysis
https://www.moneycontrol.com
http://www.referenceforbusiness.com/management/Ex-Gov/Financial-Ratios.html
http://en.wikipedia.org/wiki/Godrej_Group

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