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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal, ISSN NO. 2456-1037

Available Online: www.ajeee.co.in/index.php/AJEEE

Vol. 06, Special Issue 07, (ICMR-2021) October 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL)

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FINANCIAL APPRAISAL OF FMCG COMPANIES IN INDIA

Prof. (Dr.) Kabeer Sharma

Professor, Faculty of Commerce & Management, Shri Khushal Das University, Hanumangarh, Rajastha

Pardeep Kumar

Research Scholar, Department of Commerce, Shri Khushal Das University, Hanumangarh, Rajastha

Abstract - FMCG’s are the product which is consumed very fast and have very low cost.

There are so many examples of FMCG in our daily life such as toiletries, packaging food, candies etc. These products we can find in each and every field of daily activity such as medicine, confectionery, small electronic appliances etc.

In fourth largest sector of Indian Economy is Fast Moving Consumer Goods Industry. FMCG contributes significant part to Indian Economy especially in GDP of India.

Most of MNC’s focus to India became it has large population potential and also have largest market. The Indian rural market emerged no FMCG can be ignored. Recently they show huge interest in this market. It is the beginning of FMCG in India.

During the financial year 2015, the revenue generated by FMCG sector was around US$ 9.7 billion. Compounded annual growth of the FMCG market is expected to reach at 13% from financial year 2005 to 2020. Well established distribution networks, as well as intense competition between the organized and unorganized segments are the characteristics of this sector. FMCG in India has a strong competitive MNC presence across the entire value chain. It has been predicted that the FMCG market size in 2016 the market size of FMCG is $49 billion and it is expected that the share of modern retail will be $180 billion in 2020.

In recent years it is founded that middle class and rural class are mostly using branded products which is used into day to day activities.

Per capital income of India has increased and literacy rate has also increased their Indian population turned towards FMCG.

1 THE TOP 10 COMPANIES IN FMCG SECTOR S.No. Company

1 Hindustan Unilever Ltd.

2 Colgate Pamolive

3 ITC (Indian Tobacco Company)

4 Nestle India

5 Parle Agro

6 Britannia Industries Limited

7 Marico Industries

8 Procter & Gamble Hygiene and Health Care

9 Godrej Group

10 AMUL

2 INTRODUCTION

2.1 Meaning of Financial Appraisal

Financial appraisal defines that financial and profitability of a business with respect to time. It is also called the financial statement analysis. It consists of various parameters such as relevant approach, comparative and critical evaluation of profitability of the Business Basically financial appraisal classifies the data according to their business to improve healthy business.

3 REVIEW OF LITERATURE

In the field of FMCG lots of work has been done since beginning to till date by researchers.

Few are discussed below:

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David Mathuva (2010) – The emphasis of David et. al. on the working capital. The collection of revenue should be according to time showing that supply chain could not be broken from both sides.

Sahu (2002) et.al. shows the relation between company management and short term liquidity. If short term liquidity loosed by company, then company cannot be sustained long.

Vishnani and Shah (2007) – was worked on Indian consumer electronics industry where it found that regression analysis enhances the profitability of company also relates that huge fund may be returned the more profitability.

Bhunia (2010) studied that, improper short term liquidity affects the day to day operation of company. Which is very harmful for supply chain management.

Saleem and Rehman (2011) et.al. in 2011 worked on oil and gas companies where they found the profitability depends upon the ROA, ROI and ROE parameter. Basically all parameter interlinked to liquidity except ROI.

Hafiza Malik (2011) studied or insurance companies and found that the volume capital directly affects the profitability of company irrespective to the size of company.

Kamarjeet and Firew (2011) – studied about relative solvency of firm and their adequate capital difference is more in Indian context.

According to Marimuthu (2012) – Marimuthu reviewed the ratio analysis techniques which give exact financial position of firm also emphasis or working capital and its return ratio.

Panigrahi (2013) – studied about small firms and large firm liquidity ratio. He found that big firms should maintain high liquidity ratio.

Elangkumaran and karthika (2013) – Analysed that correlation between profitability and liquidity impact on financial activities of firms.

3.1 Importance of work

The main objective of the research work is to observe and analyse the financial performance of FMCG firms in certain time frame in between 2015 – 16 to 2019 – 20.

The research work shows the future aspects in the following ways:

1. There are few ratio which can be improve by adjusting some parameter accordingly in my point of view.

2. This study also help in business activities which is related to FMCG firm. They will understand the liquidity and profitability concept in FMCG field. Therefore they can take the right decision.

3. Present work gives the direction to industries in which they can control the management according to real situations and able to maintain their liquidity and profitability.

4. This work promotes the researcher to conduct study in this field more and more.

4 LIMITATIONS

Noting is perfect in the world. So every work shows some limitations. According to this study there are some limitations

1. The entire study is based on secondary data which has been collected by annual reports and previous year data. Therefore their findings are upon published data.

2. There is need of common consensus of experts become every expert find all ratio and profitability with different approach.

3. Time frame is limited to five year only for the study.

4. Formula and analytical approach are different to each expert which affects the results.

4.1 Hypothesis and Objectives:

Objective of study:

1. To study the financial performance specific and selected companies.

2. The analysis of profitability should be selected companies.

3. Idea sampled companies should be for suggestions to improve financial performance.

4. Focus on growth of FMCG companies.

5. Real problem solution should be considered.

6. Consider the different area of financing to improve financial performance.

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7. To suggest measures the speedy growth of FMCG companies in India.

8. The idea and solution should be speedy, growthful for FMCG companies.

4.2 Hypothesis

It is assumed that profit making by FMCG companies are very high therefore government of India’s rule and regulations are very strict in this field in last few years.

There are some hypothesis related to FMCG as follows:

1. The use of resources by sampled units very effectively.

2. The rate profit is increasing year by year.

3. Investors are investing huge money in this field.

5 RESEARCH METHODOLOGY & ANALYSIS

The research methodology is a science and art of studying in a problem systematically. With a view to achieving the objectives of the proposed study entitled “FMC Industry in India – Financial appraisal of select FMCG companies in India”, and testing the hypothesis both primary and secondary data would be collected from the various sources. Mainly secondary data will be utilized for making the study more comprehensive, comparable and result oriented. Various financial tools have been used to analyzed the collected data such as ratio analysis, comparative statement and common statement and statistical tools, like average, correlation analysis, regression analysis, graphs, diagrams etc.

6 CONCLUSION

Examine the basic of the organization on the grounds that the essential goes about as the base for the organization. The more number of rooms can be developed at the point when the establishment for a structure is solid. Like that at the point when the establishment of the organization is solid then the execution of the organization will be never-ending nature.

On the off chance that the principal turns out badly, the financial backer's abundance creation will gets influenced because of reasonable endurance of the organization.

Evaluating of the scrips’ don't rely upon the happiness worked among the market members, however the valuation matters. To esteem the market appropriately, key examination must be finished.

BIBLIOGRAPHY

1. Dr. Tulsian P.C., "Financial Management", New Delhi, S. Chand & Company Ltd., 2009.

2. Kothari C. R., "Research Methodology Methods & Techniques", Second Edition, New Delhi, New Age International publisher, 2004.

3. Singh Yogesh Kumar, "Fundamental of Research Methodology and statistics", New Age International (P) Limited, Publishers, New Delhi, 2006.

4. Rao P. Mohana, "Financial Reporting and Disclosure Practices", New Delhi, Deep & Deep Publications Pvt.

Ltd., 2000.

5. Umit S. Bititci,"Managing Business Performance: The Science and the Art", John Wiley & Sons, Ltd. 2015 6. Annual Reports of P & G Limited

7. Annual Reports of Colgate- Palmolive Limited 8. Annual Reports of Dabur India Limited

9. Annual Reports of Godrej Consumer Products Limited 10. Annual Reports of Hindustan Unilever Limited 11. Annual Reports of Indian Tobacco Company