Fast-Moving Consumer Goods (FMCG) - Management Assignment Help

Assignment Task

Liquidity Ratios
Current ratio of the firms per industry norms should be 0:1. as we can see that the current ratio of Britannia is better or closer to the standard ratio i.e. 1.62 as compared to Nestles current ration i.e. 1.78. the current ratio indicates short term solvency position of the firm and hence Britannia is better. Quick ratio indicates immediate solvency. The quick ratio for Nestle is higher as compared to Britannia. Quick ratio is also known as Acid-test ratio. The standard ratio is 1:1. Thus, Nestle’s ratio i.e. 1.18 is found to be more or less nearer to the standard ratio.
Operating Efficiency Ratios
Inventory turnover ratio indicates the efficiency of the firm to convert their stock inyo sales. the Inventory turnover ratio of britannia is more than that of nestle which indicates than britannia is able to convert its stock into sales faster as compared to nestle. Receivable turnover ratio is the number of times per year that a business collects its average receivable. Britannia has high receivables turnover ratio which indicate that its collection of accounts receivable is efficient and that the company has a high proportion of quality customers that pay their debts quickly as compared to that of Nestle. Debtors turnover ratio indicates how efficients the firm is to convery debtors & bill receivable to generate sales. Nestle has a higher debtor’s turnover ratio as comapred to britannia which means that it is more efficient and will lead to greater collection from debtors. The gross profit ratio of Nestle india is better than britannia in 2019 as higher ratio indicates better performance, The net profit ratio of nestle is better than britannia in all the 3 years because it is higher as compared to britannia and the net profit of nestle is increasing every year as we can see while the net profit ratio of britannia seems to be constant through the three years. Return on capital employed indicates the earning of the firm before interest and taxin total capital. As we can see Nestle india has a drastic change since the years 2018 to 2019 as thehad increased their capital structure. The Roce of Nestle is better because we can see there is a growth which indictaes that the firm is performing really well.
 

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