ICTACT Journal on Management Studies

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Performance Evaluation of Leading FMCG Firms


Affiliations
1 Department of Accounting and Finance, Nopany Institute of Management Studies, India
     

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Performance of a company is evaluated with respect to its use of assets, shareholder equity and liability, revenue and expenses. Financial ratio analysis plays a significant role in evaluating the performance of a Company and comparison with peer group. A ratio is defined as "the indicated quotient of two mathematical expressions" and "the relationship between two or more things". In financial analysis, a ratio is used as a benchmark for evaluation the financial position and performance of a firm. The absolute accounting figures reported in the financial statements do not provide a meaningful understanding of the performance and financial position of a firm. An accounting figure conveys meaning when it is related to some other relevant information. In this paper, an attempt has been made to analyse the performance of 5 leading Indian FMCG companies in terms of various Financial Ratios and ANOVA. Profitability in long run contributes to sustained growth of the company. Therefore the Companies must focus on productivity and optimal resources utilization. The evaluation depicts that ITC Limited position is better in comparison to other FMCG Firms.

Keywords

Indian FMCG Sector, Gross Profit Margin, Operating Profit Margin, Net Profit Margin, Return on Equity, Return on Capital Employed, Dividend Per Share.
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Abstract Views: 182

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  • Performance Evaluation of Leading FMCG Firms

Abstract Views: 182  |  PDF Views: 2

Authors

Sri Ayan Chakraborty
Department of Accounting and Finance, Nopany Institute of Management Studies, India

Abstract


Performance of a company is evaluated with respect to its use of assets, shareholder equity and liability, revenue and expenses. Financial ratio analysis plays a significant role in evaluating the performance of a Company and comparison with peer group. A ratio is defined as "the indicated quotient of two mathematical expressions" and "the relationship between two or more things". In financial analysis, a ratio is used as a benchmark for evaluation the financial position and performance of a firm. The absolute accounting figures reported in the financial statements do not provide a meaningful understanding of the performance and financial position of a firm. An accounting figure conveys meaning when it is related to some other relevant information. In this paper, an attempt has been made to analyse the performance of 5 leading Indian FMCG companies in terms of various Financial Ratios and ANOVA. Profitability in long run contributes to sustained growth of the company. Therefore the Companies must focus on productivity and optimal resources utilization. The evaluation depicts that ITC Limited position is better in comparison to other FMCG Firms.

Keywords


Indian FMCG Sector, Gross Profit Margin, Operating Profit Margin, Net Profit Margin, Return on Equity, Return on Capital Employed, Dividend Per Share.

References