Financial Analysis of Dabur India Limited

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Financial Analysis of Dabur India Limited

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Financial Statements of Dabur India Limited for year 2018 and 2019
Consolidated Profit and Loss Statement of Dabur India Limited Year 2018-19
Particulars 31-Mar-18 31-Mar-19
Amount in Rupee in Crores
Income
Revenue from operations
$
7,748.34 $ 8,533.05
Other income
$
305.18 $ 296.17
Total income
$
8,053.52 $ 8,829.22
Expenses
Cost of materials consumed
$
3,220.05 $ 3,475.35
Excise duty
$
26.49 $ 18.06
Purchases of stock-in-trade
$
665.80 $ 802.98
Changes in inventories of finished goods, stock-in-
trade and work-in-progress
-$
65.93 $ 12.64
Employee benefits expense
$
792.79 $ 937.91
Finance costs
$
53.05 $ 59.58
Depreciation and amortisation expense
$
162.18 $ 176.90
Other expenses
Advertisement and publicity
$
606.71 $ 608.33
Others
$
884.99 $ 938.22
Total expenses
$
6,346.13 $ 7,029.97
Profit before exceptional items and tax
$
1,707.39 $ 1,799.25
Less: Exceptional items
$
14.30 $ 74.38
Profit before tax
$
1,693.09 $ 1,724.87
Tax expense
Current tax
$
371.34 $ 406.99
Deferred tax -$ -$ 128.37

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35.99
Total tax expense
$
335.35 $ 278.62
Net profit for the year
$
1,357.74 $ 1,446.25
(Annual Report, 2019)
Consolidated Statement of Financial Position of Dabur India Limited Year 2018-19
Particulars 31-Mar-18 31-Mar-19
Amount in Rupee in Crores
ASSETS
Non-current assets
Property, plant and equipment
$
1,552.10 $ 1,547.97
Capital work-in-progress
$
41.51 $ 63.76
Investment property
$
54.16 $ 52.10
Goodwill
$
411.54 $ 336.07
Other intangible assets
$
10.31 $ 32.92
Financial assets
Investments
$
3,091.78 $ 2,633.35
loans
$
18.96 $ 17.56
others
$
4.11 $ 77.66
Other current tax assets
$
3.33 $ 0.89
Other non-current assets
$
74.08 $ 88.13
Total non-current assets
$
5,261.88 $ 4,850.41
Current assets
Inventories
$
1,256.18 $ 1,300.53
Financial assets
Investments
$
713.39 $ 725.41
trade receivable
$
706.08 $ 833.56
Cash and cash equivalents $ $ 107.69

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153.80
Bank balances other than (iii) above
$
152.26 $ 220.47
Loans
$
34.88 $ 11.04
Others
$
28.27 $ 26.47
Current tax assets (net)
$
1.96 $ 1.32
Other current assets
$
391.01 $ 359.50
Asset held for sale
$
1.92 $ 0.24
Total current asset
$
3,439.75 $ 3,586.23
Total assets
$
8,701.63 $ 8,436.64
EQUITY AND LIABILITIES
Equity
Equity share capital
$
176.15 $ 176.63
Other Equity
$
5,530.37 $ 5,455.05
Non controlling interest
$
26.53 $ 31.38
Total Equity
$
5,733.05 $ 5,663.06
Liability
Non-current liabilities
Financial liabilities
Borrowings
$
364.34 $ 26.05
Other financial liabilities
$
4.25 $ 4.56
Provisions
$
56.50 $ 59.52
Deferred tax liabilities (net)
$
109.05 $ 23.14
Total non-current liabilities
$
534.14 $ 113.27
Current liabilities
Financial liabilities

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Borrowings
$
464.49 $ 498.23
Trade payables
$
1,410.32 $ 1,455.43
Other financial liabilities
$
238.20 $ 327.62
Other current liabilities
$
173.03 $ 198.14
Provisions
$
107.47 $ 130.24
Current tax liabilities (net)
$
40.93 $ 50.65
Total current liabilities
$
2,434.44 $ 2,660.31
Total liabilities
$
2,968.58 $ 2,773.58
Total equity and liabilities
$
8,701.63 $ 8,436.64
(Annual Report, 2019)
Vertical Analysis of Dabur India Limited
Common Size Profit and Loss Statement of Dabur India Limited Year 2018-19
Particulars Absolute Amount Percentage of
Balance Sheet
Total
Amount in Rupee in Crores
31-Mar-18 31-Mar-19 31-Mar-
18
31-Mar-
19
Income
Revenue from operations
$
7,748.34 $ 8,533.05 96.21% 96.65%
Other income
$
305.18 $ 296.17 3.79% 3.35%
Total income
$
8,053.52 $ 8,829.22 100.00% 100.00%
Expenses
Cost of materials consumed
$
3,220.05 $ 3,475.35 39.98% 39.36%
Excise duty
$
26.49 $ 18.06 0.33% 0.20%
Purchases of stock-in-trade
$
665.80 $ 802.98 8.27% 9.09%

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Changes in inventories of finished
goods, stock-in-trade and work-in-
progress
-$
65.93 $ 12.64 -0.82% 0.14%
Employee benefits expense
$
792.79 $ 937.91 9.84% 10.62%
Finance costs
$
53.05 $ 59.58 0.66% 0.67%
Depreciation and amortisation
expense
$
162.18 $ 176.90 2.01% 2.00%
Other expenses 0.00% 0.00%
Advertisement and publicity
$
606.71 $ 608.33 7.53% 6.89%
Others
$
884.99 $ 938.22 10.99% 10.63%
Total expenses
$
6,346.13 $ 7,029.97 78.80% 79.62%
Profit before exceptional items
and tax
$
1,707.39 $ 1,799.25 21.20% 20.38%
Less: Exceptional items
$
14.30 $ 74.38 0.18% 0.84%
Profit before tax
$
1,693.09 $ 1,724.87 21.02% 19.54%
Tax expense 0.00% 0.00%
Current tax
$
371.34 $ 406.99 4.61% 4.61%
Deferred tax
-$
35.99 -$ 128.37 -0.45% -1.45%
Total tax expense
$
335.35 $ 278.62 4.16% 3.16%
Net profit for the year
$
1,357.74 $ 1,446.25 16.86% 16.38%
(Annual Report, 2019)
Common Size Statement of Financial Position of Dabur India Limited Year 2018-19
Particulars Absolute Amounts Percentage of balance
sheet total
31-Mar-
18 31-Mar-19 31-Mar-
18
31-Mar-
19
ASSETS
Non-current assets
Property, plant and equipment
$
1,552.10 $ 1,547.97 17.84% 18.35%
Capital work-in-progress
$
41.51 $ 63.76 0.48% 0.76%
Investment property $ $ 52.10 0.62% 0.62%

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54.16
Goodwill
$
411.54 $ 336.07 4.73% 3.98%
Other intangible assets
$
10.31 $ 32.92 0.12% 0.39%
Financial assets
Investments
$
3,091.78 $ 2,633.35 35.53% 31.21%
loans
$
18.96 $ 17.56 0.22% 0.21%
others
$
4.11 $ 77.66 0.05% 0.92%
Other current tax assets
$
3.33 $ 0.89 0.04% 0.01%
Other non-current assets
$
74.08 $ 88.13 0.85% 1.04%
Total non-current assets
$
5,261.88 $ 4,850.41 60.47% 57.49%
Current assets
Inventories
$
1,256.18 $ 1,300.53 14.44% 15.42%
Financial assets
Investments
$
713.39 $ 725.41 8.20% 8.60%
trade receivable
$
706.08 $ 833.56 8.11% 9.88%
Cash and cash equivalents
$
153.80 $ 107.69 1.77% 1.28%
Bank balances other than (iii)
above
$
152.26 $ 220.47 1.75% 2.61%
Loans
$
34.88 $ 11.04 0.40% 0.13%
Others
$
28.27 $ 26.47 0.32% 0.31%
Current tax assets (net)
$
1.96 $ 1.32 0.02% 0.02%
Other current assets
$
391.01 $ 359.50 4.49% 4.26%
Asset held for sale
$
1.92 $ 0.24 0.02% 0.00%
Total current asset
$
3,439.75 $ 3,586.23 39.53% 42.51%
Total assets $ $ 8,436.64 100.00% 100.00%

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8,701.63
EQUITY AND LIABILITIES
Equity
Equity share capital
$
176.15 $ 176.63 2.02% 2.09%
Other Equity
$
5,530.37 $ 5,455.05 63.56% 64.66%
Non controlling interest
$
26.53 $ 31.38 0.30% 0.37%
Total Equity
$
5,733.05 $ 5,663.06 65.88% 67.12%
Liability
Non-current liabilities
Financial liabilities
Borrowings
$
364.34 $ 26.05 4.19% 0.31%
Other financial liabilities
$
4.25 $ 4.56 0.05% 0.05%
Provisions
$
56.50 $ 59.52 0.65% 0.71%
Deferred tax liabilities (net)
$
109.05 $ 23.14 1.25% 0.27%
Total non-current liabilities
$
534.14 $ 113.27 6.14% 1.34%
Current liabilities
Financial liabilities
Borrowings
$
464.49 $ 498.23 5.34% 5.91%
Trade payables
$
1,410.32 $ 1,455.43 16.21% 17.25%
Other financial liabilities
$
238.20 $ 327.62 2.74% 3.88%
Other current liabilities
$
173.03 $ 198.14 1.99% 2.35%
Provisions
$
107.47 $ 130.24 1.24% 1.54%
Current tax liabilities (net)
$
40.93 $ 50.65 0.47% 0.60%
Total current liabilities
$
2,434.44 $ 2,660.31 27.98% 31.53%
Total liabilities
$
2,968.58 $ 2,773.58 34.12% 32.88%

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Total equity and liabilities
$
8,701.63 $ 8,436.64 100.00% 100.00%
(Annual Report, 2019)
Financial Analysis using ratio analysis
Liquidity Analysis
Liquidity Ratios of Dabur India Limited for years 2018 and 2019
Liquidity Ratios Formula 2019 2018
Amount in Rupee in Crores
Current Assets $ 3,586.23 $ 3,439.75
Current Liabilities $ 2,660.31 $ 2,434.44
Inventory $ 1,300.53 $ 1,256.18
Current Ratio Total current assets /
Total current liabilities
Total current
assets / Total
current liabilities
Total current
assets / Total
current liabilities
1.35 1.41
1.35 1.41
Times Times
Quick Ratio
(Total current assets -
Inventory) / Total
current liabilities
(Total current assets
- Inventory) / Total
current liabilities
(Total current assets
- Inventory) / Total
current liabilities
0.86 0.90
0.86 0.90
Times Times
(Annual Report, 2019)
Current Ratio: This liquidity ratio provides a measure of the ability of a company to meet its
short-term obligations due within a year. It has decreased from 1.41 to 1.35 during the financial
period 2018-2019 which means that there is slight decrease in the current asset resources over
the selected period.
Quick Ratio: This ratio provides a depiction of the effectiveness of a company to use its cash
resources for meeting its current liabilities. This ratio has also slightly decreased from 0.90 to
0.86 over the financial years 2018-2019 which means that there is decrease in the cash resources
over the selected period (Davies & Crawford, 2011).
Solvency Ratios

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Solvency Ratios of Dabur India Limited for years 2018 and 2019
Gearing Ratios Formula 2019 2018
Amount in Rupee in Crores
Long Term
Liabilities/debt $ 2,773.58 $ 2,968.58
Shareholder's
Funds/equity $ 5,663.06 $ 5,733.05
Total Assets $ 8,436.64 $ 8,701.63
Debt to Equity Debt/ equity Debt/ equity Debt/ equity
0.490 0.518
0.49 0.52
In Times In Times
Debt ratio Debt/Total Assets Debt/Total Assets Debt/Total Assets
0.33 0.34
0.33 0.34
In Times In Times
(Annual Report, 2019)
Debt Ratio: It depicts the proportion of company assets that are financed by the debt sources.
The ratio for the company has remained relatively constant between the two years 2018-2019 to
0.34 which means that it has not increased financing from debt sources.
Debt to equity ratio: It depicts the equity and debt proportion that is used for financing the
assets of a company. The ratio has decreased from 0.52 to 0.49 over the financial years 2018-
2019 which means that it has decreased the proportion of debt resources as compared to equity
within its capital structure (Davies & Crawford, 2011).
Profitability ratio
Profitability of Dabur India Limited for years 2018 and 2019
Profitability and
Market Ratios Formula 2019 2018
Amount in Rupee in Crores
Net profit $
1,446.25
$
1,357.74
Shareholder's
Funds/equity $ 5,663.06 $ 5,733.05
Total Assets $ 8,436.64 $ 8,701.63

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$
-
$
-
Return on assets Net Profit/Total
Assets
Net Profit/Total
Assets
Net Profit/Total
Assets
0.17 0.16
17.14% 15.60%
In % In %
Return on equity
Net profit /
Shareholder's
equity
Net profit /
Shareholder's equity
Net profit /
Shareholder's equity
0.26 0.24
25.54% 23.68%
In % In %
(Annual Report, 2019)
Return on assets: The ratio provides the percentage of profit that a company realized by the use
of its asset resources. It has decreased from 15.60% to 17.14% over the financial years 2018-
2019 which means that it has improved profits realized with the use of asset resources.
Return on equity: It illustrates the effectiveness of a company in using its investments for
generating earnings and supporting its long-term growth. The ratio has increased from 23.68% to
25.54% between the financial years 2018-2019 which means that the company is bale to increase
its profit by effectively deploying the shareholder’s capital (Davies & Crawford, 2011).
Activity Ratio
Activity Ratios of Dabur India Limited for years 2018 and 2019
Efficiency Ratios Formula 2019 2018 2017
Amount in Rupee in Crores
Sales Revenue $
8,829.22
$
8,053.52
Inventory $
1,300.53
$
1,256.18
$
1,106.71
Average
Inventory
$
1,278.36
$
1,181.45
Cost of goods sold $
4,309.03
$
3,846.41
Trade Receivables $
833.56
$
706.08
$
650.42
Avg. Trade
Receivables
$
769.82
$
678.25
Account Payables $ $

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1,455.43 1,410.32 $1,310.03
Avg. Trade
Payable
$
1,432.88
$
1,360.18
Purchases $
4,278.33
$
3,885.85
Inventory
turnover
Cost of goods
sold/ Average
Inventory
Cost of goods sold/
Average Inventory
Cost of goods
sold/ Average
Inventory
3.371 3.256
3.37 3.26
Times Times
Days in
inventory
365/Inventory
turnover
365/Inventory
turnover
365/Inventory
turnover
108.284 112.112
108.28 112.11
days days
Account
Receivables
Turnover Ratio
Sales/Average
Account
Receivables
Sales/Average
Account
Receivables
Sales/Average
Account
Receivables
11.47 11.87
11.47 11.87
Times Times
Accounts
receivable cycle
in days
365/Account
Receivables
Turnover Ratio
365/Account
Receivables
Turnover Ratio
365/Account
Receivables
Turnover Ratio
31.82 30.74
31.82 30.74
days days
Accounts
Payables
Turnover Ratio
Purchases/
Average Account
Payables
Purchases/Average
Account Payables
Purchases/
Average Account
Payables
2.99 2.86
2.99 2.86
Times Times

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Accounts
payable cycle in
days
365/Account
payables Turnover
Ratio
365/Account
payables Turnover
Ratio
365/Account
payables Turnover
Ratio
122.24 127.76
122.24 127.76
days days
Inventory Turnover: The ratio provides a measure of the number of times a company sold and
replaces its inventory within a given period of time. It has increased from 3.26 to 3.37 over the
financial years inferring that the company’s ability replace and sell its inventory has enhanced
within the selected financial period.
Days in Inventory: It depicts the holding period of inventory within a company. The holding
period has decreased from 112.11 to 108.28 over the financial years which mean that the
company ability to realize sales from the inventory has improved significantly.
Accounts receivable turnover: The ratio provides an assessment of the number of times a
company collects its credit amount from its customers. The ratio has slightly reduced from 11.87
to 11.47 during 2018-2019 which means that it reducing the number of days required collecting
credit from the customers (Damodaran, 2011).
Accounts receivable cycle in days: It depicts the number of outstanding days of invoice of a
company before it is collected. The ratio has increased from 30.74 to 31.82 during 2018-2019
which means that the company has reduced effectively its number of outstanding days before the
collection of credit.
Accounts payable turnover: The efficiency of a company in meeting its amount owed to the
suppliers and creditors is depicted through this ratio. It has increased from 2.86 to 2.99 over the
financial years which mean that its efficiency for repaying to its suppliers and creditors has
increased.
Accounts payable cycle in days: It depicts the number of days a company takes to meet the
amount outstanding of the suppliers. The ratio has decreased from 127.76 to 122.24 during
2018-2019 which means that the company is taking less number of days to meet the amount
owned to suppliers (Damodaran, 2011).
Market Ratio
Market Ratios of Dabur India Limited for years 2018 and 2019
Market Ratios Formula 2019 2018
Amount in Rupee in Crores
Net Profit $ 1,442.33 $ 1,354.39
WANS in crore $ 176.54 $ 176.15

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Market price $ 406.90 $ 321.95
Earnings per share
(EPS) Net profit/WANS Net profit/WANS Net profit/WANS
8.17 7.69
8.17 7.69
Times Times
Price Earnings ratio
(P/E) Market price/EPS Market price/EPS Market price/EPS
49.80 41.87
49.80 41.87
Times Times
(Annual Report, 2019)
Earnings per share: The amount of money a company realizes on its outstanding shares. This
ratio has increased from 7.69 INR in year 2018 to 8.17 INR in year 2019. It means market
performance was improved in year 2019 as compared to year 2018 and also supports wealth
maximization.
Price Earnings ratio (P/E): The ratio depicting the proportion of current share price of a
company relative to the earnings per share. This ratio has increased from 41.87 times in year
2018 to 49.80 times that reflect strong market position of Dabur India Limited in year 2019 as
compared 2018 (Damodaran, 2011).

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References
Annual Report, (2019). Dabur India Limited. Retrieved February 9, 2020, from
https://www.dabur.com/in/en-us/investor/financial-information/reports
Davies, T. & Crawford, I., (2011). Business accounting and finance. USA: Pearson.
Damodaran, A, (2011). Applied corporate finance. USA: John Wiley & sons.