Ratio

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We are Group 2
We are presenting ratio analysis of companies from
FMCG: Food and beverages sector
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ABOUT FOOD & BEVERAGES SECTOR

• The food and beverages industry is a complex, global collective of
diverse businesses that supplies most of the food consumed by the world
population.
• Broadly, the food and beverage industry comprises a complex network of
activities pertaining to the supply, consumption, and catering of food
and drink products and services across the world. Finished food
products and partially prepared ‘instant’ food packets are also a part of
the food industry. While Canned soda and bottle colddrinks are also a
part of the industry.
 BRITANNIA 5

• Britannia Industries is one of India’s leading food companies with a

100 year legacy and annual revenues in excess of Rs. 9000 Cr.
Britannia is among the most trusted food brands, and manufactures
India’s favorite brands like Good Day, Tiger, NutriChoice, Milk Bikis and
Marie Gold.
• Britannia products are available across the country in close to 5 million
retail outlets and reach over 50% of Indian homes.
• 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.
 NESTLÉ 6

• NESTLÉ India is a subsidiary of NESTLÉ of Switzerland. With eight

factories and a large number of co-packers, Nestlé India is a vibrant
Company that provides consumers in India with products of global
standards and is committed to long-term sustainable growth and
shareholder satisfaction.
• Nestlé is the world’s largest food and beverage company. It has more
than 2000 brands ranging from global icons to local favourites, and it
is present in 191 countries around the world.
 KELLOGG’S 7

• Kellogg's, is an American multinational food manufacturing company.

• Kellogg's produces cereal and convenience foods, including cookies,
crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen
waffles, and vegetarian foods.
• Kellogg's products are manufactured in 18 countries and marketed in
over 180 countries.
 Coca-Cola 8

• The Coca-Cola Company is a total beverage company, offering over 500

brands in more than 200 countries and territories.
• through a strong network of over 2.6 million retail outlets, touches the
lives of millions of consumers. Its brands are some of the most preferred
and most sold beverages in the country.
• The Coca-Cola system in India directly employs over 25,000 people
including those on contract. The system has created indirect
employment for more than 1,50,000 people in related industries through
its vast procurement, supply and distribution system.
 Mondelez 9

• Mondelez India Foods Private Limited has been in India for over 6
decades, having started in 1948 as an importer of chocolates
• Some of the most loved brands include-the flagship product
Cadbury-Dairy Milk, Cadbury Bournvita, CDM Silk, Cadbury
Choclairs, Gems, 5-Star, Perk, Bournville, Celebrations, Halls, Oreo
and Tang
• Ranked 3rd amongst India’s Most Admired Companies by Fortune
India in 2013, , Mondelez India Foods Private Limited is a part of
Mondelēz International. Mondelēz International is the world's
largest chocolatier, biscuit baker and candy maker, and the second-
largest maker of gum
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Liquidity Ratios
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Current RAtio
Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.70 1.05 0.45 1.91 0.95

2017 0.67 1.34 0.48 1.74 0.83

2016 0.66 1.28 0.59 1.30 0.85

Britannia is in a better position to cover its Current Liabilities with its

current Assets, compared to other three companies.
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Quick RAtio
Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.40 0.95 0.30 1.52 0.74

2017 0.40 1.25 0.31 1.25 0.59

2016 0.38 1.18 0.42 0.96 0.63

Britannia is in a better position with Liquid assets compared to other three

companies. In 2017 both Britannia and CocaCola were in better position.
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Leverage Ratios
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Debt Equity RAtio

Kelloggs CocaCola Mondelez Britannia Nestle

2018 2.76 2.02 0.61 0.05 0.69

2017 3.76 2.32 0.63 0.04 0.48

2016 3.81 1.81 0.62 0.06 0.35

Britannia is fairly a debt free company compared to other three companies.

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Debt to Total Assets Ratio

Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.66 0.71 0.34 0.05 0.43

2017 0.70 0.73 0.35 0.04 0.31

2016 0.69 0.69 0.33 0.06 0.25

Britannia is fairly a debt free company compared to other three companies.

Shareholders of Britannia are losing out on interest benefits.
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Coverage Ratios
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Interest Coverage Ratio

Kelloggs CocaCola Mondelez Britannia Nestle

2018 5.94 9.47 7.55 201.05 16.77

2017 5.42 9.04 8.72 240.27 16.59
2016 3.65 11.81 5.28 249.10 24.24

Britannia has a good position when it comes to interest coverage ratio,

which means that Britannia can easily meet its interest burden even if the
PBIT suffers a considerable decline.
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DSCR

Kelloggs CocaCola Mondelez Britannia Nestle

2018 18.03 18.69 24.83 11.39 26.58

2017 17.76 4.20 20.15 11.24 25.56

2016 14.29 16.98 14.30 10.16 38.20

Nestle is better Debt Service Coverage Ratio compared to others which implies
that it can service its Debt + Repayment + Rentals, better than others
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Turnover Ratios
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INVENTORY TURNOVER

Kelloggs CocaCola Mondelez Britannia Nestle

2018 6.93 4.34 6.05 9.29 5.03

2017 6.64 4.97 6.31 10.14 5.19

2016 6.54 5.90 6.23 11.84 5.34

Britannia has better Inventory Turnover Ratio compared to others, which

implies that it is better able to convert its inventories into sales.
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INVENTORY HOLDING PERIOD

Kelloggs CocaCola Mondelez Britannia Nestle

2018 52.70 84.06 60.29 39.27 72.50

2017 54.94 73.39 57.83 35.99 70.40
2016 55.84 61.82 58.58 30.84 68.35

Britannia has least Inventory Holding Period compared to others, which

implies that Britannia is better able to turn its Inventory into sales
compared to others.
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DEBTORS TURNOVER RATIO

Kelloggs CocaCola Mondelez Britannia Nestle

2018 9.80 9.02 7.94 40.64 7.88

2017 9.81 9.41 7.40 51.25 7.33
2016 10.07 10.74 7.09 56.18 7.26

Britannia has better Debtors Turnover Ratio, which implies that Britannia is
better able to collect the money which was extended as credit sales.
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DEBTORS COLLECTION PERIOD

Kelloggs CocaCola Mondelez Britannia Nestle

2018 37.24 40.46 45.96 8.98 46.31

2017 37.20 38.77 49.30 7.12 49.80
2016 36.25 33.99 51.51 6.50 50.31

Britannia has lower collection period, which implies that Britannia is able to
collect the money from its debtors faster compared to other companies.
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CREDITORS TURNOVER RATIO

Kelloggs CocaCola Mondelez Britannia Nestle

2018 3.37 4.53 2.71 6.97 2.51

2017 3.20 4.90 2.88 7.32 2.43
2016 2.92 5.74 3.10 6.88 2.48

Britannia has high Creditor Turnover Ratio which means that Britannia
needs to settle its accounts faster. While Nestle has lower ratio which says
that liberal credit terms are granted by its suppliers
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CREDITORS PAYMENT PERIOD

Kelloggs CocaCola Mondelez Britannia Nestle

2018 108.45 80.49 134.64 52.34 145.24

2017 113.93 74.51 126.82 49.87 150.15
2016 124.86 63.61 117.77 53.05 147.27

Nestle has longer payment period which is better because delays in payment
means that the operations of the company are being financed interest free by
suppliers.
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Profitability Ratios
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GROSS PROFIT MARGIN

Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.35 0.63 0.40 0.38 0.50

2017 0.37 0.63 0.39 0.38 0.49
2016 0.37 0.61 0.39 0.42 0.51

CocaCola has better gross profit margins compared to others, which implies
that CocaCola is better able to manage its Direct cost compared to others.
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OPERATING PROFIT MARGIN

Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.13 0.27 0.13 0.16 0.15

2017 0.11 0.21 0.13 0.15 0.11
2016 0.11 0.21 0.10 0.14 0.15

CocaCola has better OPM compared to others, which implies that it is better
able to manage its operating expenses compared to others.
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NET PROFIT MARGIN

Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.10 0.20 0.13 0.10 0.11

2017 0.10 0.03 0.11 0.10 0.08
2016 0.05 0.16 0.06 0.09 0.10

Net Profit Margin of CocaCola is better than others, which implies that it
is better able to manage the non operating expenses (Indirect Costs)
compared to others. In 2017 Mondelez had better NPM.
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Return On Capital Employed

Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.12 0.12 0.05 0.32 0.11

2017 0.09 0.03 0.06 0.35 0.08
2016 0.12 0.11 0.05 0.43 0.09

Britannia has better ROCE compared to others, which implies that it is

better able to use its Capital Employed to earn Non Operational PAT.
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Return On Equity
Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.50 0.34 0.13 0.33 0.17

2017 0.61 0.05 0.11 0.37 0.11
2016 0.34 0.27 0.06 0.45 0.13

Kellogg’s has better ROE compared to others, which implies that Kellogg’s is
able to generate better value for shareholders as against its equity, compared
to others.
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Return On Total Assests

Kelloggs CocaCola Mondelez Britannia Nestle

2018 0.11 0.11 0.07 0.32 0.11

2017 0.11 0.02 0.06 0.36 0.08
2016 0.07 0.11 0.03 0.43 0.09

Britannia has higher ROA ratio which indicates better use of assets for
generating profits.
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Valuation Ratios
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P/E RATIO ( Price to Equity)

Kelloggs CocaCola Mondelez Britannia Nestle

2018 14.17 31.57 21.04 37.36 28.19

2017 15.16 163.28 25.93 42.38 41.00
2016 27.55 31.78 46.13 46.50 34.44

Britannia has a higher P/E Ratio compared to others, which implies that
investors are willing to pay more premium for a share of Britannia compared
to others. In 2017 CocaCola had higher P/E Ratio.
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P/BV RATIO ( Price To Book value)

Kelloggs CocaCola Mondelez Britannia Nestle

2018 7.23 10.68 3.72 10.97 4.90

2017 10.41 10.73 3.67 13.89 4.60
2016 11.85 8.77 3.80 17.91 4.33

Britannia has a better P/BV Ratio compared to others, which implies that
investors are willing to pay more premium for Britannia compared to others.
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DIVIDEND YIELD Ratio

Kelloggs CocaCola Mondelez Britannia Nestle

2018 4.05 3.29 2.00 0.85 2.49

2017 3.91 3.13 1.71 0.77 2.49
2016 3.76 2.96 1.50 0.62 2.43

Kelloggs has the highest DYR, which implies that Kelloggs pays a better
dividend with regards to its market price, compared to others.
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PAYOUT RATIO
Kelloggs CocaCola Mondelez Britannia Nestle

2018 57.44 104.00 42.11 83.56 70.23

2017 59.22 510.34 44.32 31.62 102.18
2016 103.55 93.96 69.23 32.60 83.56

CocaCola has the highest Dividend Payout Ratio, which implies that it pays a
far better dividend as regards its earning per share, compared to others. In
2016 Kelloggs had highest Dividend Payout Ratio.
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