CHAPTER-I

INTRODUCTION

“A STUDY ON FINANCIAL ANALYSIS OF BRITANNIA INDUSTRIES LIMITED”

Financial statement analysis allows analysts to identify trends by comparing ratios across
multiple time periods and statement types. These statements allow analysts to measure liquidity,
profitability, company-wide efficiency and cash flow. The preparation of financial statements. i.e.
Balance Sheet and Trading and Profit and Loss Account in the module titled ‘Financial Statements of
Profit and Not for Profit Organizations’. After preparation of the financial statements, one may be
interested in analyzing the financial statements with the help of different tools such as comparative
statement, common size statement, ratio analysis, fund flow analysis, cash flow analysis, etc.

In this lesson you will learn about analyzing the financial statements by using comparative
statement, common size statement and trend analysis. This project report covers all the aspects relating
to the Profitability ratios of Britannia industries Ltd interpreted according to standards. This project
was done with the help of secondary data as research in finance subjects is done on performance and
not potential. The project selected by me is to do statement the financial ratio analysis. The main
intention was to group or regroup the various figures and information appearing on the financial
statement (either profitability statement or balance sheet or both) to draw the fruitful conclusions there
from. Profitability ratios are valuable as they depict how are you utilizing and managing your
resources.

1
ANALYSIS OF FINANCIAL PERFORMANCE

Financial statement analysis is the procedure of scrutinizing an enterprise’s financial

statements for taking up the decisions for the purposes and to comprehend the comprehensive health
of an establishment. Financial statements document financial information, which must be assessed
through financial statement analysis to become more helpful to shareholders, managers, investors and
other interested parties. To put it in other words, the term “financial analysis” comprises both ‘analysis
and interpretation’.

SIGNIFICANCE ANALYSIS OF FINANCIAL PERFORMANCE

Financial analysis is the procedure of recognizing the financial strengths and weaknesses of
the enterprise by accordingly chartering the relationships between several items of the balance sheet
and the statement of P&L. Financial analysis can be initiated by the management of the enterprise or
by parties outside the enterprise, viz., finance manager, trade payables, lenders, labor unions and
others.

RATIO ANALYSIS

Ratio analysis is a widely used tool of monetary analysis. It may beyond to compare the risk
and return relationships of firms of various sizes. It’s defined as the systematic use of ratio to interpret
the financial statement so the strengths and weaknesses of a firm likewise as its historical performance
and current economic condition can be determined.

MEANING OF RATIO

Ratio is a simple arithmetical expression of the link of one number to a different. It should be
defined as the indicated quotient of two mathematical expressions. In keeping with Accountant’s
Handbook by Wixon Keel and Bedford, a ratio “is an expression of the quantitative relationship
between two numbers”. In simple language ratio is one number expressed in terms of another and might
be found out by dividing one number into other

2
ADVANTAGES OF RATIO ANALYSIS

 Ratio analysis reflects the working efficiency of a concern.

 Ratio analysis facilitates comparison between one firm and another in the same industry
over a number of years to ascertain profitability

 Since ratio analysis reflect the financial health of a concern, bank, insurance and other
financial institution relay on them while judging loan application and in taking vital
investment decision

 Ratio analysis helps in establishing trend, since the results are analyzed over a number
of years. Tread analysis is fruitful in preparing plans for the future.

 Ratio analysis is helpful in forecasting likely events in future.

OBJECTIVES OF THE STUDY

 To identify the financial position of Britannia industries Limited.

 To study the ratio analysis position of Britannia industries Limited.

 The financial ratio analysis and determining the financial capability of the Company.

 To know the financial position of Britannia industries.

 To bring out the results of financial strength and weakness of industry through Ratio
analysis.

 To know the correct picture of financial operation of the company in terms of liquidity

and solvency.

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SCOPE OF THE STUDY
 The scope of the study is limited to collecting financial data. published in the annual
reports of the company every year.

 The ratio analysis is done to suggest the possible solutions. The study is carried out for
10 years data of Britannia industries ltd (2014 to 2023).

 This study is confined to Britannia industries limited only.

 The study aims to analyses the liquidity, profitability, turnover, solvency position of
company the study is based on the financial position of company by using ratio analysis
take financial decision.

 The study is based on the accounting information of Britannia industries limited. The
study covers the period of 2014 to 2023 for analyzing the financial statement such as
income statements and Balance sheet.

 The scope of the study involves the various factors that affect the financial efficiency of
the company. This study finds out the operational efficiency of the organization and
allocation of resources to improve the efficiency of the organization.

 The data of the past eight years are taken into account for the study. The performance is
compared within those periods. This study finds out areas where of Britannia industries
limited improve to efficiency of its assets and funds employed.

LIMITATION OF STUDY

 This study has been carried out for the period of 10 years only.

 Firms consider only the monetary aspects of the financial statements. Non-monetary
aspects like human behavior and their relationship etc. are not considered.

 Errors in the secondary data would have affected the study.

 The time and resources available for the data are limited, so in-depth study could not be
conducted.

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RESEARCH METHODOLOGY

 SAMPLE SELECTION: For the purpose of study Britannia industries Limited has been
selected.

 PERIOD OF STUDY: The study is conducted for the period of Ten financial years i.e.,
from 2014 to 2023.

DATA AND SOURCE OF DATA

 Primary & Secondary data were collected for this study.

 The data were collected from annual reports of the company.

5
CHAPTER SCHEME

The present study "Financial Position of Britannia Industries Limited."has been focused into
five chapters.

1. The First Chapter Presents with the Introduction and Design of the Study Comprising
Introduction, Objective of the Study, Scope of the Study, Data and Source of Data, Period
of Study, Limitation of the Study, Methodology, Statement of the Problem, Chapter
Scheme.

2. The Second Chapter Deals with Review of Literature.

3. Third Chapter Presents with role of the Britannia Industries Limited and profile of Britannia
Industries Limited.

4. The Fourth Chapter Deals with Financial Performance of the Britannia Industries Limited

5. The Fifth Chapter portrays the key Findings of the Study and Based on the Analysis of the
Previous Chapters some valuable Suggestions are offered for Overall Improvement of
Britannia Industries Limited. along with conclusion.

6
CHAPTER-II

REVIEW OF LITERATURE

2.1 FINANCIAL ANALYSIS

Financial Analysis is the process of evaluating businesses, projects, budgets and other finance
related transactions to determine their performance and suitability. Typically, financial analysis is
used to analyze whether an entity is stable, solvent, liquid or profitable enough to warrant a monetary
investment. It also helps in identifying the financial strength and weaknesses of the firm by properly
establishing relationship between items of financial statements. A financial statement is an organized
collection of data according to logical and conceptual framework. Financial statement analysis is
intended to be understandable by readers who have “a reasonable knowledge of business and
economic activities and accounting and who are willing to study the information diligently”.

The literature review is a written overview of major writings and other sources on selected
topic. Sources covered in the review may include scholarly journals, articles, books, government
reports, web sites etc.

2.2 LITERATURE REVIEW

Dennis R. Heldman and Richard W. Harel (2005) In this study entitled “Principals of Food
processing” describes the food processing as conversation of raw material or ingredients into a
consumer food product. They focus on details of existing food processing industry in America is
reviewed and the steps in manufacturing has been also analyzed. The author explains the food
processing as the conversation process required to ensure food products safety and extend self-life.
However, from this literature it is found that only conceptual information has taken into consideration
without any analytical aspects.

7
Premkumar. T (2005) In this study in his paper FOOD AND DRUG INDUSTRY IN INDIA "AN
OVERVIEW" (2005) describe government policies. This paper discusses the present Government
policy, regulatory and business trends in food and pharmaceuticals Industry in India. These sectors of
industry provide multifarious opportunities to potential investors in this Sector, both domestic and
foreign. As several policy initiatives are undertaken by the Government of India since liberalization in
August 1991, the industry sectors have witnessed unprecedented growth in most of the segments.

H. DAS (2006) in this study Entitled his book “Food processing operations analysis” carried out unit
operation in food processing by identifying dependent & independent variables affecting the operations
and developing mathematical relationship among the variables. This book includes comprehensive
numerical problems, mathematical modeling, and solutions of numerical problems, exercise problems
and MATLAB problems of food processing operations. This book helps the readers to find out
responses at various levels.

Kalamkar S.S. in his article (2007) In this study “Export opportunities & challenges for Indian organic
food” studied about Indian organic farm production & trade. He has described that an organic farm
production & trade emerged an important sector in India in other part of developing world. More than
120 countries have produce organic products & Australia is leading country to produce that type of
product. Author has described importance & problem in organic production in India.

Lucia Jenkins (2007) In this study understanding the use of various financial ratios and techniques can
help in gaining a more complete picture of a company's financial outlook. He thinks the most important
thing is fixed cost and variable cost. Fixed costs are those costs that are always present, regardless of
how much or how little is sold. Some examples of fixed costs include rent, insurance and salaries.
Variable costs are the costs that increase or decrease in ratios proportion to sales.

Kalaki Majumdar (2008) In this study in his article “Export performance of processed food in India”
describes importance of processed Indian foods for export concern. As per his opinion Indian food
processing industry is primarily export oriented. The growth rate of Indian export market is 15% in
international market. This is a matter of concern; having potential for processed food this sector is
underutilized. The present study reveals that out of eight processed food items there are four items
where India enjoys comparative advantage in the world market.

8
Susan Ward (2008) In this study emphasis that financial analysis using ratios between key values help
investors cope with the massive amount of numbers in company financial statements. For example,
they can compute the percentage of net profit a company is generating on the funds it has deployed.
All other things remaining the same, a company that earns a higher percentage of profit compared to
other companies is a better investment option.

Zafar S.M. Tariq & Khalid S.M (2009) In this study the study explored that ratios are calculated from
financial statements which are prepared as desired policies adopted on depreciation and stock valuation
by the management. Ratio is simple comparison of numerator and a denominator that cannot produce
complete and authentic picture of business. Results are manipulated and also may not highlight other
factors which affect performance of firm by promoters.

P.K. Chattopadhyay (2010) In this study stated in his book “profitable Argo Based projects with
project profile” gives guidelines to the people who newly entered in the food business. Cereals are used
for both human and animals’ food and as an industrial raw material. Major content of this book are
project profiles of projects like rice milling or rice products.

Gupta Priya, Kainth Jyoti, Sharma Nikita (2011) In this study explains about organic food in their
article “An analytical review of organic food sector-A case study on glimpse & glance. As per their
study, the foods which are produced without include synthetic inputs or not contain genetically
modified organisms that are called organic food. Due to change of lifestyle and awareness among
consumer there are create demand for organic food across the world. Here, the author has trying to take
overview of organic food industry worldwide as a categorical as well as analytical in term of micro
environmental factor.

NIIR Board (2012) In this study in the book entitle “Modern Technology of Agro processing
&Agricultural waste product” describes information on agro products and preservation of food,
some chapters provides information on the various by products of agro products like maize processing
for glucose , Bio coal Briquettes from agricultural cellulose. For vast marketing, preservation of food
product is necessary for manufacturer.

9
Vijayakumar A. (2013) In this study has studied about ‘Assessment of Corporate Liquidity - a
discriminate analysis approach’ in this research he has revealed that the growth rate of sales, leverage,
current ratio, operating expenses to sales and vertical integration was the important variables which
determine the profitability of companies in the sugar industry. Also, he has studied the short- term
liquidity position in twenty-eight selected sugar factories in co-operative and private sectors. In
research a discriminate analysis has been used by the researcher, to undertaken to distinguish the good
risk companies from poor risk companies based on current and liquidity ratios.

Shetty P.K, Ayyappan S, Swaminathan M.S (2014) In this study entitled their book “Climate
change and sustainable food security. “In this book they has discussed about changes in climate that’s
affected on quality of food products. The climate is the very important factor for agriculture. The book
emphasizes the steps to be taken to make agriculture profitable without causing much damage to nature
&gives ideas to protect the soil. The Climate is directly affected on food production in term of quality
as well as profitability.

Majumdar Kakali (2015) In this study in his article “Export performance of processed food in India”
describes importance of processed Indian foods for export concern. As per his opinion Indian food
processing industry is primarily export oriented. The growth rate of Indian export market is 15% in
international market. This is a matter of concern; having potential for processed food this sector is
underutilized. The present study reveals that out of eight processed food items there are four items
where India enjoys comparative advantage in the world market.

Pai, Vadivel & Kamala (2016) In this study have studied about the diversified companies and financial
performance. Main purpose of research was found out the relationship between diversified firms and
their financial performance. For the purpose of research, they have selected seven large firms and
analyses those firm which having different products-both related and otherwise-in their portfolio and
operating in diverse industries. In this study, a set of performance measures ratios was employed to
determine the level of financial performance and variation in performance from one firm to another has
been observed and statistically established. They revealed that the diversified firms studied have been
healthy financial performance.

10
H. Panda (2017) In this study in the book “The complete Book on Managing Food Processing Industry
Waste”(2017).deals with the reuse of food industry waste. Food industry produces large amount of
waste. For example, screening of vegetable waste, conversion of bone to edible products, production
of earth warm proteins etc. The author gives us ideas to reuse the waste in proper methods.

Sharmila (2018) In this study entitled “A Study on Financial Performance of Britannia Industries Ltd.”
View that Finance id the life-blood of business. It is rightly termed as the science of money. Finance is
very essential for the smooth running of the business. Finance controls to policies, activities and
decision of every business. Financial performance helps to measure the overall performance of the
company. This research paper examines the financial performance of Britannia Industries Ltd using
ratio analysis such as Liquidity, Solvency, profitability and Trend analysis of the company. To analysis
the financial performance of the company last Eight years data is collected for the study.

Mistry Dharmendra S. (2019) In this study understood a study to analyze the effect of various
determinants on the profitability of the selected companies. It concluded that debt equity ratio,
inventory ratio, total assets were important determinants which effect positive or negative effect on the
profitability. It suggested to improve solvency as to reduce fixed financial burden on the company
profit & give the benefit of trading on equity to the shareholders.

Manoj Kumara N V (2019) In this study the author had made attempt to determine the financial
performance of selected food companies in India by using financial performance parameters, It can be
concluded that the anticipated inputs to this study to the firm is to assist strategic thinkers pay attention
to the appropriate actions that apply latent and strong effect on their financial performance. This
research facilitates a comprehensive model for examining the financial performance of automobile
performance and the major findings of this research will give a important parameters and helps to fill
a similar gaps in the literature. Further research, need to focus on important parameters like Economic
Value added and Refined Economic Value Added to Reveal & evaluate the overall organizational
development performance.

11
Hotwani Rakhi (2019) In this study the author examines the profitability position and growth of
company in light of sales and profitability of this company. Data is analyzed through rations, standard
deviations and coefficient of variance. The study reveals that there not exists a strong relationship
between sales & profitability of company.

Tony Weis (2020) In this study Published his book “The global food economy: The battle for future of
farming “. In this book author has mentioned two words Food & Farming intentionally because of his
family background. His grandfather owned 81-hectare farm in Canada but after retirement sold his farm
& moved on to a successful business. The main aim of this book is to examine in a concise and
accessible way the major contemporary dynamics, problems and inequities of the global food economy.
As per this book, capital of the country incredibly and increasingly concentrated mainly on food
economy and in many places significant measure of unconsciousness about food. This book can play
vital role in helping to nourish them.

Dhanya and Aravindh (2022) In this study entitled “A Study on Financial Performance of Britannia
Industries Ltd.” Indicate that financial performance analysis is the process of reviewing and analysis a
company’s financial statements to make better economic decisions. The study is based on the eight
years of financial performance (2014-2015 to 2021-2022) of Britannia Industries Ltd. The tools used
for the study are Liquid ratios, profitability ratios and turnover ratios. The suggestion give after the
study is that the company has to maintain proper cash management and the company has to maintain
the same asset management.

Mr. Mathew Georg and Dr Shamsi Sukumaran K (2022) In this study entitled “STUDY ON THE
OVERALL FINANCIAL PERFORMANCE OF BRITANNIA INDUSTRIES LTD.” View that A
business organization needs proper allocation of funds for their proper functioning of activities. A lack
of proper management of this would result in financial crisis. So proper allocation and utilization of
resources are very important. Therefore, analysis and better understanding of financial statements are
crucial. A financial statement is used for collecting data. For calculating the financial stability of a firm,
it is very important to analyses the data in financial statements in detail. This would help in
understanding the strength and weakness of a firm. Financial statements also help investors to get a
clear picture of the organization as it helps them to make appropriate decision regarding the firm.

12
 CHAPTER-III

PROFILE OF THE COMPANY

Britannia Industries Limited is an Indian company specialized in food industry, part of the Wadia
group headed by Nusli Wadia. Founded in 1892 and headquartered in Kolkata. It is one of India’s oldest
existing companies and best known for its biscuit products. The company sells its Britannia and tiger brands
of biscuits, breads and dairy products throughout India and abroad. Beginning with the circumstances of its
takeover by the Wadia group in the early 1990’s the company has been mired in several controversies
connected to its management. However, it Still has a large market share and it is profitable.

Britannia Biscuits Limited

Formerly Britannia Biscuit Company Limited

Type Public

Traded as BSE: 500825, NSE: BRITANNIA NSE NIFTY

50 Constituent

ISIN INE216A01030

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Industry Food processing

Founded 1892; 132 years ago, in Calcutta

1918; 106 years ago as Britannia Biscuit Company Limited

Headquarters Whitefield, Bangalore, Karnataka, India

Area served Worldwide

Key people • Nusli Wadia (Chairman)

• Varun Berry (Executive Vice-Chairman & MD)
• Rajneet Kohli (CEO)
• N Venkataraman (Executive Director & CFO)
Products • Bakery products including biscuits, bread, cakes and rusk
• Dairy products including milk, butter, cheese, ghee and dahi
Revenue ₹16,301 crore (2023)

Operating income ₹2,605 crore (2023)

Net income ₹2,322 crore (2023)

Total assets ₹8,638.46 crore (2023)

Number of 4,480 (as on 31 March 2019)

employees
Parent Wadia Group

Subsidiaries • Manna Foods Private Limited

• International Bakery Products Limited

Website www.britannia.co.in

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HISTORY

Britannia Industries is one of India’s leading food companies with a 100 year legacy and
annual revenues in excess or Rs. 9000 cr. Britannia is among the most trusted food brands, and
manufactures India’s favorite brands like Goodday, Tiger, Nutrichoice, Milk bikis and marie gold
which are household names in India. Britannia product portfolio includes biscuits, bread, cakes, rusk,
and dairy products including cheese, beverages milk and yoghurt.

The company’s Dairy business contributes close to 5 per cent of revenue and Britannia dairy
products directly reach 100,000 outlets. Britannia Bread is the largest brand in the organized bread
market with an annual turnover of over 1 lac tons in volume and Rs.450 crores in value. The business
operates with 13 factories and 4 franchisees selling close to 1 Mn loaves daily across more than 100
cities and towns of India.

We have a presence in more than 60 countries across the globe. Our international footprint
includes presence in Middle East through local manufacturing in UAE and Oman, are the No 2
biscuit player in UAE with a strong contention to leadership and have a similarly strong market
position in the other GCC countries. We are also the market leaders in Nepal and are in the process
of investing a manufacturing facility in the country

Our foot print spreads across North America, Europe, Africa and South East Asia through
exports and we are investing in a state- of- the- art facility in Mundra SEZ, Gujarat, to service the
exports markets. Our strategic expansion plan is based on the principle of ‘One new market a year’.
We plan to expand through local operations in Africa and South East Asia in the coming years.

Britannia takes pride in having stayed true to its credo, ‘Eat Healthy, Think Better’. Having
removed over 8500 tones of Trans Fats from products, Britannia became India’s first Zero Trans Fat
Company. Over 50% of the Company’s portfolio is enriched with essential micro- nutrients which
nourish the body.

The company set up the Britannia Nutrition Foundation in 2009, and began working on public
private partnership to address malnutrition amongst under-privileged children and women.

The company was established in 1892 by a group of British businessmen with an initial
investment of ₹295. Initially, biscuits were manufactured in a small house in central Kolkata. Later,
15
the enterprise was acquired by the Gupta brothers, mainly Nalin Chandra Gupta, an attorney, and
operated under the name, V.S. Brothers. In 1918, C.H. Holmes, an English businessman based in
Kolkata, was taken on as a partner and The Britannia Biscuit Company Limited (BBCo) was
launched. The Mumbai factory was set up in 1924 and Peek freans UK, acquired a controlling interest
in BBCo. During the Second World War, the government of British India needed a continuous supply
of biscuits for British soldiers. The Britannia Biscuit Company started supplying biscuits to British
Army for several years, and the company sometimes devoted 95% of its capacity to produce biscuits
for the armed forces. Biscuits were in high demand during World War II, which gave a boost to the
company's sales. The company name was changed to the current Britannia Industries Limited in
1979. In 1982, the American company Nabisco brands,inc. acquired the parent of Peek Freans and
became a major foreign shareholder. In 1978, Britannia came out with its public issue, and its Indian
shareholding had increased to 62%, which firmly established Britannia as an Indian company. The
38% foreign stake was owned by the UKbased Associated Biscuits International Limited (ABIL).

In 1993, textile tycoon Nusli Wadia of Bombay Dyeing took control of the company from
Britannia's thenchairman Rajan Pillai, with the help of French food giant Danone. In 2009, Wadia
Group became the largest shareholder in BIL after acquiring a 25% stake owned by Group Danone.
In December 2018, it launched a new category, Treat Crème Wafers.

Britannia acquired a controlling stake in Kenya's Kenafric Biscuits in October 2022. In

September 2022, Varun Berry was appointed as Executive Vice-Chairman and Managing Director
of Britannia Industries Limited and Ranjeet Kohli was also appointed as Executive Director and
CEO. As of December 2022, Britannia Industries Limited had a market capitalization of Rs.
1,08,992.90 crore.

In December 2022, Britannia Industries entered into a joint venture agreement with Bel SA
of France and Britannia Dairy Private Limited (BDPL) to develop, manufacture and sell cheese
products in India and other markets. Under the joint venture, Bel SA acquired a 49% stake in BDPL,
a subsidiary of Britannia Industries, for ₹262 crore and infused an additional ₹215 crore in the joint
venture.

In August 2022, the company expanded its product portfolio by entering the Western
Snacking market with the launch of its new product, Treat Croissant. It also released a TV
commercial featuring choreographer, actor and director, Prabhu Deva.

16
BUSINESS

The company's principal activity is the manufacture and sale of biscuits, bread, rusk, cakes
and dairy products.

BISCUITS

The company's factories have an annual capacity of 433,000 tones. The brand names of
Britannia's biscuits include Vita Marie Gold, Tiger, Nutrichoice, Good Day, 50 50, Treat, Pure
Magic, Milk Bikes, Bourbon, Nice Time and Little Hearts among others. In 2006, Tiger, the mass
market brand, realised $150.75 million in sales, including exports to the U.S. and Australia. This
amounts to 20% of Britannia's revenues for that year.

DAIRY PRODUCTS

Dairy products contribute close to 10% to Britannia's revenue. The company not only markets
dairy products to the public but also trades dairy commodities business-to-business. Its dairy
portfolio grew to 47% in 2000-01 and by 30% in 2001-02.

Its main competitors are Nestlé India, the National Dairy Development Board (NDDB), and
Amul (GCMMF).

Britannia holds an equity stake in Dynamix Dairy and outsources the bulk of its dairy
products from its associate.

On 27 October 2001, Britannia announced a joint venture with Fonterra Co-operative Group
of New Zealand, an integrated dairy company which handles all aspects of the value chain from
procurement of milk to making value-added products such as cheese and buttermilk. Britannia
intends to source most of the products from New Zealand, which they would market in India.

17
 The joint venture will allow technology transfer to Britannia. Britannia and New Zealand
Dairy each hold 49% of the JV, and the remaining 2 percent will be held by a strategic investor.
Britannia has also tentatively announced that its dairy business (probably including Dynamix) would
be transferred to the joint venture. However, the authorities' approval to the joint venture obliged the
company to start manufacturing facilities of its own. It would not be allowed to trade, except at the
wholesale level, thus pitching it in competition with Danone, which had recently established its own
dairy business.

PARTNERSHIP

In March 2017, it formed a joint venture with Greek firm Chipita SA for producing and
selling ready-toeat croissants in India. In September 2021, the company partnered with Accenture to
facilitate procurement, accelerate innovation and improve customer and supplier experience by
digitizing the company's manufacturing units and warehouses. During the COVID-19 pandemic in
India, it tied up with personal concierge startup Dunzo to deliver essential goods at the customer's
doorstep in April 2020.

FINANCIALS

Britannia Industries registered consolidated revenue of ₹13,731.05 crore in FY 2022. The

company registered consolidated revenue of ₹12,883 crore, a growth of 13% in FY 2021, from
₹11,444 crore in FY 2020. The company reported a 21% growth in its net profit at ₹1,402.63 crore
for the financial year ended in March 31, 2020. It registered a net profit of ₹1,159.12 crore in FY19.
The company's consolidated income grew by 5.48% to ₹11,878.95 crore in FY20 compared to
₹11,261.12 crore in the fiscal year 2019.

SPONSORSHIP :

Indian super league 2018–present by this company.

18
AWARDS AND RECOGNITION:

• In 2022, the company ranked 4th in the list of India's most chosen FMCG brands, as per
kantar India’s annual Brand Footprint report.

• Britannia won the Global Sustainability Leadership Awards by the World Sustainability
Congress in 2021.

• The economic times listed the company's Good Day biscuit brand as the Brand Equity’s Most
Trusted Brands of Indians in 2019-20.

• The company was selected for special recognition under the Leading RE Investor category
at Renewable Energy India Awards 2016.

• In 2014, the company was voted as Reader’s Digest trusted Brand in India under the food
and beverage category, part of the Reader’s Digest Trusted Brand Survey.

• In 2014, The economic times ranked the company at 11 in the 100 Most Trusted Brands of
India list 2014.

• The company was listed in India's Most Attractive Brands 2013 in a TRA Brand Trust Report
survey.

• It was awarded the Global Performance Excellence Award (GPEA) by Asia Pacific Quality
Organization (APQO) in June 2012.

• It was ranked #2 in the Brand Equity's Most Trusted Brands survey by The economic times.

• In 2012, Britannia received the Golden Peacock National Quality Award – 2012 under the
FMCG category.

• In 2011, Britannia won the Inden Merchants Chamber (IMC)'s Ramkrishna Bajaj National
Quality Award

• In 2011, the company received the CII's National Award for Food Safety 2011 in the category
of 'Large Food Businesses - Manufacturing' by the Confederation of Indian industry.

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PERFORMANCE AND PROFITABILITY

Between 1998 and 2001, the company's sales grew at a compound annual rate of 16% against
the market, and operating profits reached 18%. More recently, the company has been growing at
27% a year, compared to the industry's growth rate of 20%. At present, 90% of Britannia's annual
revenue of ₹22 billion comes from biscuits. Britannia is one of India's 100 Most Trusted brands listed
in The Brand Trust Report. Britannia has an estimated market share of 38%.

DISPUTES AND CONTROVERSIES

WADIA AND RAJAN PILLAI

Kerala businessman Rajan Pillai secured control of the group in the late 1980s, becoming
known in India as the 'Biscuit Raja'. In 1993, the Wadia Group acquired a stake in Associated Biscuits
International (ABIL), and became an equal partner with Groupe Danone in Britannia Industries
Limited.

In what The Economic Times referred to as one of [India's] most dramatic corporate sagas,
Pillai ceded control to Wadia and Danone after a bitter boardroom struggle, then fled his Singapore
base to India in 1995 after accusations of defrauding Britannia, and died the same year in Tihar Jail.

WADIA AND DANONE

The Wadias' Kalabakan Investments and Group Danone had two equal joint venture
companies, Wadia BSN and United Kingdom registered Associated Biscuits International Holdings
Ltd., which together held a 51 percent stake in Britannia. The ABIH tranche was acquired in 1992,
while the controlling stake held by Wadia BSN was acquired in 1995. It was agreed that, in case of
a deadlock between the partners, Danone was obliged to buy the Wadia BSN stake at a "fair market
value". ABIH had a separate agreement signed in 1992 and was subject to British law.
Wadia was to be Danone's partner in the food and dairy business, and product launches from
Groupe Danone's were expected but never materialised despite the JV being in existence for over 11
years in India. Under the 1995 joint venture agreement, Danone is prohibited from launching food

20
brands within India without the consent of the Wadias. In addition, the partners agreed there would
be the right of first refusal to buy out the remaining partner in the event of the other wishing to sell
its holding.

In June 2006, Wadia claimed Danone had used the Tiger brand to launch biscuits in
Bangalore. In May 2007, Nusli Wadia told the Ministry of Commerce and Industry that Danone
invested in a Bangalore based bio nutrition company, Avesthagen, in October 2006 in violation of
the government's Press Note 1, 2005, which requires a foreign company to obtain the consent of its
Indian joint venture partner before pursuing an independent business in a similar area, including joint
ventures based purely on technical collaboration. Wadia also filed a case in the Bombay High Court
for a breach of a non-competition clause in that connection. The court ordered Danone not to alienate,
encumber or sell shares of Avesthagen.

In September 2007, the Foreign Investment Promotion Board of India rejected Danone's
claims that it did not need a non-compete waiver from the Wadias to enter into business in India
alone.

After a prolonged legal battle, Danone agreed to sell its 25.48% stake in Britannia to Leila
Lands, which is a Wadia group entity based in Mauritius, and quit this line of business. The deal was
valued at $175–200 million. With this buy-out, Wadia holds a majority stake of 50.96%.

INTELLECTUAL PROPERTY DISPUTE

In a separate dispute from the shareholder matters, the company alleged in 2006 that Danone
had violated its intellectual property rights in the Tiger brand by registering and using Tiger in several
countries without its consent. Britannia claimed the company found out that Danone had launched
the Tiger brand in Indonesia in 1998, and later in Malaysia, Singapore, Pakistan and Egypt, when it
attempted to register the Tiger trademark in some of these countries in 2004. Whilst it was initially
reported in December 2006 that agreement had been reached, it was reported in September 2007 that
a solution remained elusive. In the meantime since Danone's biscuit business has been taken over by
Kraft , the Tiger brand of biscuits in Malaysia was renamed Kraft Tiger Biscuits in September 2008.

21
 Britannia initiated legal action against Danone in Singapore in September 2007. The dispute
was resolved in 2009 with Britannia securing rights to the Tiger brand worldwide, and Danone
paying ₹220 million to utilize the brand.

PRODUCT PORTFOLIO OF BRITANNIA

Britannia’s entire product offering derive their premium qualities from the principles of
health and taste. This key premise has led to the evolution of a lifetime menu where Britannia product
exists for every stage in a person’s life. The highest consumption group for biscuit are children; here
Britannia offers milk bike’s with all the ‘goodness of milk’ required by younger kids. While the tiger
brand is aimed for 7-14 year olds and provides them with the exuberant health required by winners
of tomorrow. Treat a range of delicious cream biscuit- is meant as a treat for children during fun
times.

A particularly notable success has been little hearts, meant for teenagers and kids, which has
completely dispelled an erstwhile industry axiom that this target group did not snack on sweet biscuit.

Moving on other age groups, Britannia created 50-50 as a biscuit snack for young adults. The
savory time pass brand is targeted at the same age group as well, Britannia marigold, is regarded as
a tea- time offering, packed with wheat energy with health-conscious urban adults. Good day,

22
 A cookie filled with rich ingredients is a healthy everyday treat for entire family Britannia
has a range of cakes and bread entrenched in the bakery segment. These products allow the
consumers better interactions with the brand and maintain continuity of the taste with health promise.

In 2004, the company was extremely active in rolling out new products. It introduced its
Little Hearts brand, which are referred to as “melt in the mouth” biscuits. Little Hearts Orange
(orange-flavored biscuits) and Classic retail for 10 Rupees. Britannia also added Blackcurrant Treat,
Jam Treat, Good Day Ginger nut and Good Day Chocó-Nut to its growing biscuit line in 2004. For
the bread and dairy markets, Britannia introduced Nutri Choice vitamin-enriched bread and Milk
Man low-fat cheese slices.

There were no new product launches in 2005, instead the company worked on strengthening
existing brands. It released Premium Assorted Exotic Creme Biscuits, which feature varieties of
some of the most popular biscuits – Pure Magic Chocolate, Pure Magic Vanilla, Pure Magic
Strawberry & Vanilla and Jam Treat. The pack retails for 100 Rupees. The company also
reformulated its 50:50 Maska Chaska biscuits.

23
 This promotion gave the consumers a chance to interact with the film stars and also get to pay
cricket with them. The match had over 40,000 spectators and made the headlines of leading
newspapers and news channels and was found to be the most unbeaten promotional act of that year.
So we understand that sports and the sporting events are the key promotional tools of Britannia.

BISCUITS SUCH AS :

Marie Gold, Treat, Milk Bikis, Time Pass, tiger, 50-50NutriChoice also available for
Diabetic people.

DAIRY DELIGHTS INCLUDE FEW PRODUCTS LIKE :

Cheese, Milk, Dahi (Yoghurt), Ghee, Butter.

BREAD TYPES HAVE :

Sandwiches, Coffee, Confectionary, Assorted Breads, Benefits of Branding PLACE

Britannia had started selling products in India, but now it has expanded overseas to places
like Middle East and Sri Lanka.

They have even started to export their goods to places such as:

USA, GHANA, SAUDI ARABIA, KUWAIT, BAHRAIN, QATAR, UAE, OMAN, SEYCHELLES,
SINGAPORE.

PRICE :

Britannia has adopted the Market Penetration Method of pricing. It focuses on the quality of
the products keeping in mind the pricing strategy. This helps improve and generate large sale volume
for their products. It aims at maximizing the market share and to produce new product lines. A few
examples are:

a) Vegetarian Cakes are available at Rs. 15/- for a 75gm pack.

b) Nutri choice Health Starter Kit is for Rs 100.
c) Britannia Tiger Banana packed with IRON ZOR priced at Rs.2, Rs.4 andRs.10.

24
PROMOTIONS :

To attract the consumers of Britannia, they very innovatively came up with ideas to promote
their brand in numerous different ways, and now they have leveraged India’s two most successful
passions of all times:

Cricket

Movies

Nearly every Indian’s dream was to be present at a stadium while India is playing cricket
During the world Cup, so Britannia created the ‘Britannia Khao, World Cup Jao’ contest in 1999.
They made it very simple for their target market to enter this contest, which was to purchase more
products to win a scratch and win lucky card and winning an all expenses paid trip to England to
watch the World Cup Match. They held it again in 2002- 2003 held in South Africa which
successfully set a unique trend of their own. They even came up with another creative promotion of
‘Britannia Khao, Cricketer Ban Jao’ that was fueled by the need of every Indian to be a part of the
passion called Cricket followed by a promotion called ‘Britannia Lagaan Match’ in 2001 that
revolved around a movie called Lagaan was based on a cricket match.

25
 CHAPTER- IV

DATA ANALYSIS AND INTERPRETATION

SATISTIAL TOOLS USED

To bring out the relevant facts effectively, the data analysis requires the use of statistical tools.
In the present study, both descriptive statistics as well as inferential statistics have been adopted.

DESCRIPTIVE STATISTICS

The descriptive statistics such as Mean, Standard Deviation, Co – Efficient of Variation and
Compound Annual Growth Rate have been computed to have a comparative idea of Britannia
Industries Ltd. with regard to their performance indices like Working Capital, Profitability and so on.

The Descriptive Statistics includes the following:

1. ARITHMETIC MEAN ( x̄ )

Mean is a central tendency measure representing the arithmetic average of a set of observations. It
gives a single value to describe the whole data. It has been obtained by adding the values of all observations
and dividing it by the number of observations.

It is calculated by the following formula

𝚺𝐗
̅
𝐗=
𝐍
Where;
ΣX = Sum of Variables
N = Number of Observations

26
2. STANDARD DEVIATION (σ)
Standard deviation is the square root of variance; it is a measure of dispersion in the same
units as a original data. Higher the SD, greater is the dispersion.
It is calculated by the following formula

√𝜮𝒙𝟐 √(𝜮𝒙)𝟐
σ= −
𝑵 𝑵

Where;
σ = Standard Deviation
Σx2 = Sum of Variables
N = Number of Observations

3. CO – EFFICIENT OF VARIATIONS (C. V)

It is a relative measure of dispersion, comparable across distribution, which express the standard
deviation as percentage of the mean. It is used in problems, which requires comparing the variability of two
or more than two series. The series, for which co – efficient of variations is greater, is said to be more variable
or conversely less consistent, less stable or less homogenous. It is calculated by the following formula: In
ratio analysis of financial data less co – efficient of variation indicates relatively better control of the
management on that ratio.
It is calculated by the following formula

σ
CV = 𝑋 100
X̅
Where;
σ = Standard Deviation
X̅ = Mean

27
4. COMPOUND ANNUAL GROWTH RATE
The annual growth rate shows the rate of growth of a variable at a point of time in the study period.

𝟏⁄
𝑬𝑽 𝒏
𝑪𝑨𝑮𝑹 = ( ) −𝟏
𝑩𝑽

Where;
EV = Ending Value
BV = Beginning Value
N = Number of Compounding Period

28
6. RATO ANALYSIS

Ratio analysis is one of the tool or technique used for analysis of financial statements. Financial
executives need certain yardstick to evaluate the financial position and performance of the business. Ratio
analysis is considered a significant yardstick in this direction. The financial statements can be analyzed with
the help of ratio analysis and quality decisions are also taken by top management from such analysis.

I am currently using the below mentioned ratios in this project.

1. PROFITABILITY RATIOS
A. Return on Shareholders Fund Ratio
B. Operating profit ratio

2. TURNOVER RATIOS
A. working capital turnover ratio
B. Fixed Assets Turnover Ratio

3. SOLVENCY RATIOS

3.1. SHORT – TERM SOLVENCY RATIO LIQUIDITY RATIO |

A. Current Ratio
B. Liquidity ratios
C. Cash Position Ratio

3.2. LONG – TERM SOLSVENCY RATIO DEBT RATIO |

A. Debt Equity Ratio
B. Proprietary Ratio
C. Total Assets to Debt Ratio

29
1. PROFITABILITY RATIO

A. RETURN ON SHAREHOLDERS FUND RATIO

The return on shareholders' equity ratio shows how much money is returned to the owners as a
percentage of the money they have invested or retained in the company. It is one of five calculations
used to measure profitability.

COMPONENTS :

 The higher the percentage, the more money is being returned to investors.

 This ratio helps business owners and financing professionals determine a company’s
financial health.

FORMULA:

𝐍𝐞𝐭 𝐩𝐫𝐨𝐟𝐢𝐭 𝐚𝐟𝐭𝐞𝐫 𝐭𝐚𝐱

𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐟𝐮𝐧𝐝 = 𝐗 𝟏𝟎𝟎
𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫 𝐟𝐮𝐧𝐝𝐬

The Return on Shareholders Funds Ratio of Britannia Industries Ltd during the study period
is computed and presented in table 4.1.

30
 Table 4.1

Analysis of Return on Shareholders Fund Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)

NET PROFIT
AFTER SHAREHOLDERS
YEAR RATIO
INTEREST & FUND
TAX
2014 369.83 853.5 0.433
2015 622.41 1,235.6 0.504
2016 749.09 1,700.2 0.441
2017 843.69 2,582 0.327
2018 947.89 3,235.3 0.293
2019 1,122.20 4,039.5 0.278
2020 1,484.30 4,274.7 0.347
2021 1,760.03 3,319.5 0.530
2022 1,603.19 2,402.5 0.667
2023 2,139.30 3,181.1 0.673
Arithmetic Mean ( x̄) 0.449
Standard Deviation (σ) 0.144
Co – Efficient of Variation (C. V) 0.320
CAGR% -0.043
Source: Computed From Annual Report

INTERPRETATION

The Shareholders Fund Ratio has decreased in 2014 to 2019 & then it’s multiplied into 2.42
times in 2019 and 2023.

31
 Chart 4.1

Return on Shareholders Fund Ratio of Britannia Industries Ltd

RETURN ON SHAREHOLDERS RUND RATIO

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7

RETURN ON SHAREHOLDERS RUND RATIO

32
B. OPERATING PROFIT RATIO

Operating profit ratio establishes a relationship between operating Profit earned and net revenue
generated from operations (net sales) operating profit ratio is a type of profitability ratio which is
expressed as a percentage. Net sales include both Cash and Credit Sales, on the other hand, Operating
Profit is the net operating profit i.e. the Operating Profit before interest and taxes. Operating Profit ratio
helps to find out Operating Profit earned in comparison to revenue earned from operations.

COMPONENTS :

 The operating profit margin ratio indicates how much profit a company makes after paying for
variable costs of production such as wages, raw materials, etc.

 It is also expressed as a percentage ofsales and then shows the efficiency of a company
controlling the costs and expenses associated with business operations.

FORMULA:

𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐩𝐫𝐨𝐟𝐢𝐭
𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐏𝐫𝐨𝐟𝐢𝐭 𝐫𝐚𝐭𝐢𝐨 = 𝐱 𝟏𝟎𝟎
𝐍𝐞𝐭 𝐬𝐚𝐥𝐞𝐬

The Operating Profit Ratio of Britannia Industries Ltd during the study period is computed
and presented in table 4.2.

33
 Table 4.2

Analysis of Operating Profit Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)
OPERATING
YEAR NET SALES RATIO
PROFIT
2014 596.62 6,307.39 0.095
2015 771.50 7,344.79 0.105
2016 1,131.82 8,176.82 0.138
2017 1,204.5 8,684.39 0.139
2018 1,410.48 9,380.17 0.150
2019 1,662.13 10,482.45 0.159
2020 1,770.69 10,986.68 0.161
2021 2,351.32 12,378.83 0.190
2022 2,089.16 13,371.62 0.156
2023 2,741.79 15,618.42 0.176
Arithmetic Mean ( x̄) 0.147
Standard Deviation (σ) 0.029
Co – Efficient of Variation (C. V) 0.200
CAGR% -0.060
Source: Computed From Annual Report

INTERPRETATION

The Operating Profit Ratio of Britannia industries Ltd was increasing in 2014 to 2021 but its
decreasing in last two years.

34
 Chart 4.2

Operating Profit Ratio of Britannia Industries Ltd

OPERATING PROFIT RATIO

OPERATING PROFIT RATIO

0.2

0.18

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

35
2. TURNOVER RATIO

A. WORKING CAPITAL TURNOVER RATIO

Working capital turnover ratio is the ratio between the net revenue or turnover of a business
and its working capital. Working capital turnover is a ratio that measures how efficiently a company
is using its working capital to support sales and growth. Also known as net sales to working capital,
working capital turnover measures the relationship between the funds used to finance a company's
operations and the revenues a company generates to continue operations and turn a profit.

COMPONENTS :

 Working capital turnover measures how effective a business is at generating sales for every
dollar of working capital put to use.

 A higher working capital turnover ratio is better, and indicates that a company is able to
generate a large amount of sales.

FORMULA :

𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬
𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 =
𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥

The Working capital Turnover Ratio of Britannia Industries Ltd during the study period is
computed and presented in table 4.3.

36
 Table 4.3

Analysis of Working Capital Turnover Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)
WORKING
YEAR NET SALES RATIO
CAPITAL
2014 6,307.39 -98.37 -64.119
2015 7,175.99 226.85 31.633
2016 7,947.90 74.69 106.412
2017 8,414.37 915.46 9.191
2018 9,304.1 1,401.49 6.639
2019 10,482.45 1,487.91 7.045
2020 10,986.68 990.09 11.097
2021 12,378.83 687.17 18.014
2022 13,371.62 -256.41 -52.149
2023 15,618.42 575.32 27.147
Arithmetic Mean ( x̄) 10.091
Standard Deviation (σ) 46.547
Co – Efficient of Variation (C. V) 4.613
CAGR% 0.090
Source: Computed From Annual Report

INTERPRETATION :

The Working capital turnover ratio of Britannia Industries Ltd literally bad in decreasing in
every year. The ratios are fluctuating year by year.

37
 Chart 4.3

Working Capital Turnover Ratio of Britannia Industries Ltd

Working Capital Turnover Ratio

120 106.412

100

80

60

40 27.147
31.633 18.014
20 11.097
6.639 7.045
9.191
0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
-20

-40
-52.149
-60
-64.119
-80

Working Capital Turnover Ratio

38
B. FIXED ASSET TRUNOVER RATIO

Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the
value of fixed assets (on the balance sheet). It indicates how well the business is using
its fixed assets to generate sales. Generally speaking, the higher the ratio, the better,
because a high ratio indicates the business has less money tied up in fixed assets for each
unit of currency of sales revenue. A declining ratio may indicate that the business is
over-invested in plant, equipment, or other fixed assets.

COMPONENTS :

 The fixed asset turnover ratio reveals how efficient a company is at generating sales from its
existing fixed assets.
 A higher ratio implies that management is using its fixed assets more effectively.

FORMULA :

𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬
𝐅𝐢𝐱𝐞𝐝 𝐀𝐬𝐬𝐞𝐭𝐬 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 =
𝐓𝐨𝐭𝐚𝐥 𝐅𝐢𝐱𝐞𝐝 𝐀𝐬𝐬𝐞𝐭

The Fixed Asset Turnover Ratio of Britannia Industries Ltd during the study period is
computed and presented in table 4.4.

39
 Table 4.4

Analysis of Fixed Asset Turnover Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)
YEAR NET SALES FIXED ASSETS RATIO

2014 6,307.39 642.88 9.811

2015 7,175.99 574.17 12.498

2016 7,947.90 713.89 11.133

2017 8,414.37 8,69.09 9.682

2018 9,304.06 1,231.55 7.555

2019 10,482.45 1,392.51 7.528

2020 10,986.68 1,499.45 7.327

2021 12,378.83 1,515.50 8.168

2022 13,371.62 1,912.70 6.991

2023 15,618.42 2,397.93 6.513

Arithmetic Mean ( x̄) 8.721

Standard Deviation (σ) 1.975

Co – Efficient of Variation (C. V) 0.226

CAGR% 0.042
Source: Computed From Annual Report.

INTERPRETATION :

The Fixed Asset Turnover Ratio of Britannia Industries Ltd is literally decreasing in last few
years. It highly satisfied in the year of 2015 (12.498). The ratios are fluctuating year by year.

40
 Chart 4.4

Fixed Asset Turnover Ratio of Britannia Industries Ltd

Total Asset Turnover Ratio

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

0 0.5 1 1.5 2 2.5 3 3.5

Total Asset Turnover Ratio

41
3. SOLVENCY RATIO

3. 1. SHORT – TERM SOLVENCY RATIO

A. CURRENT RATIO

The ratio of current assets to current liabilities is called ‘Current ratio’. In order to measure
the short-term liquidity or solvency of a concern, comparison of current assets and current liabilities
is inevitable. Current ratio indicates the ability of a concern to meet its current obligations as and
when they are due for payment.

COMPONENTS :

 The term current assets include debtors, stock, bills receivables, bank and cash balances,
prepaid expenses, income due and short-term investments.
 The term current liabilities include creditors, bank overdraft, Bills payable, outstanding
expenses, income received in advance, etc.

FORMULA :

𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐀𝐬𝐬𝐞𝐭
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐑𝐚𝐭𝐢𝐨 =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲

The Current Ratio of Britannia Industries Ltd during the study period is computed and
presented in table 4.5.

42
 Table 4.5

Analysis of Current Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)

CURRENT CURRENT
YEAR RATIO
ASSET LIABILITIES
2014 860.06 958.43 0.897

2015 1,429.3 1,202.45 1.189

2016 1,417.39 1,342.7 1.056

2017 2,004.88 1,089.42 1.840

2018 2,767.52 1,366.03 2.026

2019 3,070.27 1,582.36 1.940

2020 3,205.15 2,215.06 1.447

2021 4,014.93 3,327.76 1.206

2022 3,593.06 3,849.47 0.933

2023 4,420.70 3,845.38 1.150

Arithmetic Mean ( x̄) 1.368

Standard Deviation (σ) 0.422

Co – Efficient of Variation (C. V) 0.308

CAGR% -0.024
Source: Computed From Annual Report

INTERPRETATION :

The current ratio of Britannia Industries Ltd is fluctuating in 2014 to 2018 and decreasing in
2019 to 2022. Again increasing in 2023. The ratios are fluctuating year by year.

43
 Chart 4.5

Current Ratio of Britannia Industries Ltd

C U R R E N T R AT I O
Current Ratio

2.5

1.5

0.5

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

44
B. LIQUIDITY RATIO

In finance, the quick ratio, also known as the acid-test ratio is a type of liquidity ratio, which
measures the ability of a company to use its near cash or quick assets to extinguish or retire its current
liabilities immediately.

COMPONENTS :

 Liquidity ratios are a measure of the ability of a company to pay off its short-term liabilities.

 Liquidity ratios determine how quickly a company can convert the assets and use them for
meeting the dues that arise.
 The higher the ratio, the easier is the ability to clear the debts and avoid defaulting on
payments.

FORMULA :

𝐋𝐢𝐪𝐮𝐢𝐝 𝐀𝐬𝐬𝐞𝐭
𝐋𝐢𝐪𝐮𝐢𝐝𝐢𝐭𝐲 𝐑𝐚𝐭𝐢𝐨 =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲

The Liquidity Ratio of Britannia Industries Ltd during the study period is computed and
presented in table 4.6.

45
 Table 4.6
Analysis of Liquidity ratio of Britannia Industries Ltd

(Amounts in ₹ crore)
YEAR LIQUID ASSETS CURRENT RATIO
LIABILITIES

2014 493.2 958.43 0.515

2015 1,083.56 1,202.45 0.901

2016 1,033.38 1,342.7 0.770

2017 1,402.27 1,089.42 1.287

2018 2,172.94 1,366.03 1.591

2019 2,351.38 1,582.36 1.486

2020 2,571.62 2,215.06 1.161

2021 3,023.65 3,327.76 0.909

2022 2,341.42 3,849.47 0.608

2023 3,346.08 3,845.38 0.870

Arithmetic Mean ( x̄) 1.010

Standard Deviation (σ) 0.361
Co – Efficient of Variation (C. V) 0.357
CAGR% -0.051
Source: Computed From Annual Report

INTERPRETATION :

The Liquidity ratio of Britannia Industries Ltd is good in 2017 to 2020 and literally bad in
2014 to 2016, 2021 to 2023. It indicates that quick assets are sufficient to pay off the short-term
obligations.

46
 Chart 4.6

Liquidity ratio of Britannia Industries Ltd

LIQUIDITY RATIO
1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Liquidity Ratio

47
C. CASH POSITION RATIO

As the name implies, the cash ratio determines how financially able a company is to satisfy
short – term liabilities with cash and cash equivalents.

Also referred to as the Cash asset ratio, this tells how capable a business is of satisfying
short – term debts, usually 12 months or less with cash and cash equivalents only.

COMPONENTS :

The cash ratio is most commonly used as a measure of a company’s liquidity. If the company
is forced to pay all current liabilities immediately, this metric shows the company’s ability to do so
without having to sell or liquidate other assets. A cash ratio is expressed as a numeral, greater or less
than 1.

FORMULA :

𝐂𝐚𝐬𝐡 𝐀𝐧𝐝 𝐂𝐚𝐬𝐡 𝐄𝐪𝐮𝐢𝐯𝐚𝐥𝐞𝐧𝐭𝐬

𝐂𝐚𝐬𝐡 𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧 𝐑𝐚𝐭𝐢𝐨 =
𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬

The Cash Position Ratio of Britannia Industries Ltd during the study period is computed and
presented in table 4.7.

48
 Table 4.7

Analysis of Cash Position Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)

YEAR CASH AND CASH CURRENT RATIO

EQUIVALENT LIABILITIES

2014 65.78 958.43 0.069

2015 186.67 1,202.45 0.155

2016 24.8 1,342.7 0.018

2017 53.55 1,089.42 0.049

2018 97.25 1,366.03 0.071

2019 40.48 1,582.36 0.026

2020 39.16 2,215.06 0.018

2021 110.8 3,327.76 0.033

2022 52.29 3,849.47 0.014

2023 63.85 3,845.38 0.017

Arithmetic Mean ( x̄) 0.047

Standard Deviation (σ) 0.044

Co – Efficient of Variation (C. V) 0.929

CAGR% 0.152
Source: Computed From Annual Report

INTERPRETATION :

The cash ratio of Britannia Industries Ltd is risky in 2014 to 2023. The ratios are fluctuating
year by year.

49
 Chart 4.7

Cash Position Ratio of Britannia Industries Ltd

C A S H P O S I T I O N R AT I O
Cash Position Ratio

0.18

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

50
3. 2. LONG – TERM SOLVENCY RATIO / DEBT RATIO

A. DEBT EQUITY RATIO

The debt-to-equity ratio is a financial ratio indicating the relative proportion of shareholders'
equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also
known as risk, gearing or leverage. The D/E ratio is an important metric used in corporate finance.
It is a measure of the degree to which a company is financing its operations through debt versus
wholly owned funds. More specifically, it reflects the ability of shareholder equity to cover all
outstanding debts in the event of a business downturn.

COMPONENTS :

 The debt-to-capital ratio is calculated by taking the company's interest-bearing debt, both
short- and long-term liabilities and dividing it by the total capital. Total capital is all interest-
bearing debt plus shareholders' equity, which may include items such as common stock,
preferred stock, and minority interest.
 The total debt to capitalization ratio is a solvency measure that shows the proportion of debt a
company uses to finance its assets, relative to the amount of equity used for the same purpose.
A higher ratio result means that a company is more highly leveraged, which carries a higher
risk of insolvency.

FORMULA :

𝐃𝐞𝐛𝐭
𝐃𝐞𝐛𝐭 𝐄𝐪𝐮𝐢𝐭𝐲 𝐑𝐚𝐭𝐢𝐨 =
𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐄𝐪𝐮𝐢𝐭𝐲

The Debt-to-equity Ratio of Britannia Industries Ltd during the study period is computed and
presented in table 4.8.

51
 Table 4.8

Analysis of Debt Equity Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)

SHAREHOLDERS
YEAR DEBT RATIO
FUND
2014 0.34 853.5 0.0004

2015 0.73 1,235.6 0.0006

2016 0.49 1,700.2 0.0003

2017 0.44 2,582 0.0002

2018 0.3 3,235.3 0.0001

2019 0.26 4,039.5 0.0001

2020 722.55 4,274.7 0.1690

2021 721.55 3,319.5 0.2174

2022 698.52 2,402.5 0.2907

2023 1,551.02 3,181.1 0.4876

Arithmetic Mean ( x̄) 0.117

Standard Deviation (σ) 0.171

Co – Efficient of Variation (C. V) 1.463

CAGR% -0.509
Source: Computed From Annual Report

INTERPRETATION :

This debt equity ratio of Britannia Industries Ltd is increasing for last 4 year. The ratios are
fluctuating year by year.

52
 Chart 4.8

Debt to Equity Ratio of Britannia Industries Ltd

Debt to Equity Ratio

0.6

0.4876
0.5

0.4

0.3 0.2907
0.2174

0.2 0.169

0.1

0.0004 0.0006 0.0003 0.0002 0.0001 0.0001

0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Debt to Equity Ratio

53
B. PROPREITARY RATIO

A variant to the debt – to- equity ratio is the proprietary ratio which is also known as Equity
ratio or Shareholders funds to total equity ratio or net worth to total asset ratio. This ratio establishes
relationship between shareholders’ funds and the total asset of the firm.

COMPONENTS :

This ratio shows the general soundness of the company. It is of particular interest to the
creditors of the company as it helps them to ascertain the shareholders’ funds in the total assets of
the business. A high ratio indicates safety to the creditors and a low ratio shows greater risk to the
creditors.

FORMULA :

𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐅𝐮𝐧𝐝
𝐏𝐫𝐨𝐩𝐫𝐢𝐞𝐭𝐚𝐫𝐲 𝐑𝐚𝐭𝐢𝐨 =
𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭

The Proprietary Ratio of Britannia Industries Ltd during the study period is computed
and presented in table 4.9.

54
 Table 4.9

Analysis of Proprietary Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)

SHAREHOLDERS
YEAR TOTAL ASSET RATIO
FUND

2014 853.5 1,844.44 0.463

2015 1,235.6 2,461.99 0.502

2016 1,700.2 3,067.26 0.554

2017 2,582 3,696.14 0.699

2018 3,235.3 4,627.30 0.699

2019 4,039.5 5,652.97 0.715

2020 4,274.7 7,253.34 0.589

2021 3,319.5 7,416.01 0.448

2022 2,402.5 7,002.95 0.343

2023 3,181.1 8,638.46 0.368

Arithmetic Mean ( x̄) 0.538

Standard Deviation (σ) 0.137

Co – Efficient of Variation (C. V) 0.254

CAGR% 0.023
Source: Computed From Annual Report

INTERPRETATION :

The Proprietary ratio of Britannia Industries. Higher ratio indicates that the firm is less
dependent on creditors for its working capital. Therefore, a higher proprietary ratio indicates a sound
financial position.

55
 Chart 4.9

Proprietary Ratio of Britannia Industries Ltd

Proprietary Ratio
2014
2022 7% 9%
7% 2015
2021 9%
8%
2016
10%

2020
11%

2017
13%
2019
13%
2018
13%
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

56
C. TOTAL ASSET TO DEBT RATIO

Total Assets to Debt Ratio is the ratio, through which the total assets of a company are
expressed in relation to its long-term debts. It is a variation of the debt-equity ratio and gives the
same indication as the debt-equity ratio.

COMPONENTS :

 The Total Assets to Debt Ratio establishes a relationship between total assets and long-term
loans. It also indicates the safety margin available to the firm’s long-term loans. In simple
terms, it shows the extent to which the long-term loans of a company are covered by its total
assets.
 A higher total assets to debt ratio represents more security to the lenders of long-term loans.
However, lower total assets to debt ratio represent less security to the lenders of long-term
loans, which indicates more dependence of the firm on long-term borrowed funds.

FORMULA :

𝐃𝐞𝐛𝐭
𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭 𝐭𝐨 𝐃𝐞𝐛𝐭 𝐑𝐚𝐭𝐢𝐨 =
𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭

The Total Assets to Debt Ratio of Britannia Industries Ltd during the study period is
computed and presented in table 4.10.

57
 Table 4.10

Analysis of Total Asset to Debt Ratio of Britannia Industries Ltd

(Amounts in ₹ crore)

YEAR TOTAL ASSETS DEBT RATIO

2014 0.34 1,844.44 0.0002

2015 0.73 2,461.99 0.0003

2016 0.49 3,067.26 0.0002

2017 0.44 3,696.14 0.0001

2018 0.3 4,627.3 0.0001

2019 0.26 5,652.97 0.0000

2020 722.55 7,253.34 0.0996

2021 721.55 7,416.01 0.0973

2022 698.52 7,002.95 0.0997

2023 1,551.02 8,638.46 0.1795

Arithmetic Mean ( x̄) 0.048

Standard Deviation (σ) 0.066

Co – Efficient of Variation (C. V) 1.377

CAGR% -0.497
Source: Computed From Annual Report.

INTERPRETATION :

The Total Assets to Debt ratio Britannia Industries Ltd is decreasing in last 3 years. The ratios
are fluctuating year by year.

58
 Chart 4.10

Total Asset to Debt Ratio of Britannia Industries Ltd

Total Asset to Debt Ratio

0.2

0.15

0.1

0.05

0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Total Asset to Debt Ratio

59
 CHAPTER – V

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS

The present study was undertaken to analyze the solvency position of the Britannia
industries limited. In order to find the solvency position of the company, where calculated to analyze
the Solvency position of the company’s current ratio, quick ratio and etc...,
The final chapter has been allocated to recapitulate the findings of the study, to offer suitable
suggestions to improve the financial position of the company and conclusion of the study.

Details of Findings:

• The Shareholders Fund Ratio has decreased in 2014 to 2019 & then it’s multiplied into 2.42
times in 2019 and 2023.

• The Operating Profit Ratio of Britannia industries Ltd was increasing in 2014 to 2021 but its
decreasing in last two years.

• The Working capital turnover ratio of Britannia Industries Ltd literally bad in decreasing in
every year. The ratios are fluctuating year by year.

• The Fixed Asset Turnover Ratio of Britannia Industries Ltd is literally decreasing in last few
years. It highly satisfied in the year of 2015 (12.498). The ratios are fluctuating year by year.

• The current ratio of Britannia Industries Ltd is fluctuating in 2014 to 2018 and decreasing in
2019 to 2022. Again increasing in 2023. The ratios are fluctuating year by year.

60
• The Liquidity ratio of Britannia Industries Ltd is good in 2017 to 2020 and literally bad in
2014 to 2016, 2021 to 2023. It indicates that quick assets are sufficient to pay off the short-
term obligations.

• The cash ratio of Britannia Industries Ltd is risky in 2014 to 2023. The ratios are fluctuating
year by year.

• This debt equity ratio of Britannia Industries Ltd is increasing for last 4 year. The ratios are
fluctuating year by year.

• The Proprietary ratio of Britannia Industries. Higher ratio indicates that the firm is less
dependent on creditors for its working capital. Therefore, a higher proprietary ratio indicates a
sound financial position.

• The Total Assets to Debt ratio Britannia Industries Ltd is decreasing in last 3 years. The ratios
are fluctuating year by year.

61
 SUGGESTIONS

• Company must try to use working capital effectively for generating sales and increasing
activity ratio.

• Company has to concentrate on debt capital to have smooth running of the company.

• The company must start using its assets efficiently as there has been decrease in the total asset
turnover ratio year by year.

• It will be better if the company decreases its current liability to improve the liquidity position.

• The company can use effective cost control methods for future growth.

62
 CONCLUSION

The project is entitled on “FINANCIAL ANALYSIS OF BRITANNIA INDUSTRIES

LIMITED”. Utmost care has been taken at all levels of the project work, right from the beginning of
analyzing accounting information provided by profit and loss account and balance sheet.

The study highlights that the financial performance of Britannia Industries Ltd is satisfactory.
This study helped you to know the financial strength and weakness of the company. Under liquidity
ratio, current ratio shows a negative sign and quick ratio shows a positive sign. The another some
ratios are showing a positive sign. Total asset turnover ratio and working capital turnover ratio shows
a negative sign.

The financial statements of the company are analyses and interpreted with the help of balance
sheet and profit& loss account of last 10 years 2014 - 23. The company has a scope of improvement
in the future.

63
 BIBLIOGRAPHY

REFERENCES

• Da-Wen-Sun (2017), “ Emerging Technologies in Food Processing”, pp 629-635.

• H. Das (1999), “ Food Processing Operations Analysis”, pp 416.
• Kakali Majumdar (2008), “ Export Performance of Processed Food in India”, Vol 3, pp
261-270.
• P.K Chattopadhyay (2018), “ Profitable Agro Based Projects with Project Profiles”, pp 216.
• Premkumar.T, (2005) „FOOD AND DRUG INDUSTRY IN INDIA "AN OVERVIEW",
pp 169.
• Tony Weis (2020), “ The Global Food Economy: The Battle for the Future of Farming”,
London: Zed Books, 2017, pp 217.

WEBSITES

• http://britannia.co.in

• https://www.moneycontrol.com

• https://www.slideshare.net

• https://shodhganga.inflibnet.ac.in

• https://en.wikipedia.org/wiki/Britannia_Industries

64
A STUDY ON FINANCIAL ANALYSIS OF BRITANNIA INDUSTRIES
LIMITED

APPENDIX – I
BALANCE SHEET OF BRITANNIA INDUSTRIES LIMITED

65
66
67
68
 APPENDIX – II
PROFIT & LOSS ACCOUNT OF BRITANNIA INDUSTRIES LIMITED

69
70