Goutam cost sheet report

P&GProcter&Gamble

SUBMITTED FOR PARTIAL FULFILMENT OF AWARD OF POST GRADUATE DIPLOMA IN MANAGEMENT

Prepared by

GOUTAM CHOUDHARY under guidance of

Prof. Manju Lamba

PGDM (13-15) I.T.S., Mohan Nagar

SECTION (A) Ghaziabad (U.P)

I.T.S-Management and IT InstituteMohan Nagar, Ghaziabad

Declaration Certificate

Certified that Goutam choudhary IS carried out the Dissertation work presented in this thesis entitled “PROCTEL&GAMBLE: Exploring for the award of PGDM from Institute of Technology and Science under my supervision. The dissertation embodies result of original work and studies carried out by student himself and the contents of the thesis do not form the basis for the award of any other degree to the candidate or to anybody else.

Prof. Manju Lamba

Acknowledgement

Any accomplishment requires the effort of many people and this work is no different. I have been fortunate enough to get the help and guidance from many people. It is a pleasure to acknowledge them though still it is inadequate appreciation for their contribution.

I would not have completed this journey without the help, guidance and support of certain people who acted as guides and friends along the way. we would like to express my deepest and sincere thanks to my faculty guide Prof. Manju Lamba for her invaluable guidance and help. The project could not be complete without the support and guidance.

we are also thankful to all my friends and colleagues for cooperating with me at every stage of the project. They acted as continuous source of inspiration and motivated me throughout the duration of the project helping me a lot in completion of this project.

Submitted with regards

GOUTAM CHOUDHARY

SEC-A

COST ACCOUNTIG

PGDM (13-15)

Table of Contents

Declaration CertificateAbstract AcknowledgementTable of ContentsList of Tables & Figures 1. Chapter -1

1.0.Introduction …………………………………………

1.1.Background……………………………………………..

2. Chapter – 2

2.0. Data Analysis & Interpretation…………………………..

3. Chapter – 3

3.0.Conclusion………………………………………………

BACKGROUNDHE PROCTER AND GAMBLE COMPANYHEADQUATER IN CICINNATI,OHIO,USAINTRODUCTION

Procter & Gamble Co.(P&G, NYSE: PG) is a Fortune 500, American multinational corporation headquartered in Cincinnati, Ohio, that manufactures a wide range of consumer goods. As of 2008, P&G is the 8th largest corporation in the world by market capitalization and 14th largest US company by profit.The board of directors of Procter & Gamble currently has thirteen members:Alan LafleyRobert A. McDonaldCharles Lee,Ralph Snyderman M.D.Margaret WhitmanW. J. McNerney Jr.Lynn MartinManagement and staffJohnathan RodgersErnesto ZedilloScott CookRajat Gupta(only indian)Patricia WoertzKenneth Chenault..

.

HISTORY“William Procter”, a candlemaker, and “James Gamble”, a soapmaker, immigrants from England and Ireland, respectively, who had settled earlier in Cincinnati, who met as they both married sisters, Olivia and Elizabeth Norris,formed the company initially. Alexander Norris, their father-in law, called a meeting in which he persuaded his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, Procter & Gamble was born.. In 1859, sales reached one million dollars. By this point, approximately eighty employees worked for Procter & Gamble. During the American Civil War, the company won contracts to supply the Union Army with soap and candles.in 1859, sales reached one million dollars. By this point, approximately eighty employees worked for Procter & Gamble. During the American Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products. In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory.In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products.Beauty (33% of sales, 37% of net income):The Beauty GBU includes all hair and skin products, medications, razors, electric shavers, and batteries. Proctor & Gamble's global market share in blades and razors is 70%, primarily centered around its Mach3, Fusion, Venus, and Gillette brands.

Health and Well-Being (23% of sales, 25% of net income):The Health and Well-Being GBU provides oral care, feminine health, pharmaceuticals, snacks, coffee,and pet care products.oral care, the company has the number two market share position at 20% globally.In potato chips and coffee, the company holds a market share of approximately 10% and 33%. Household Care (46% of sales, 42% of net income): The Household Care GBU manufactures a wide range of products from snack food to laundry detergent to diapers. The company's baby care market share in 2008 was 29%.Procter & Gamble Co. was the world's top advertiser in 2007, spending almost $9.4 billion worldwide. The company outspent its largest competitor, Unilever, the second-highest advertiser, by almost two-to-one (Unilever spent $5.2 billion). According to the Nielsen Company, in 2007 P&G spent more on U.S. advertising than any other company; the $2.62 billion spent by P&G is almost twice as much as that

spent by General Motors, the next company on the Nielsen list.P&G was named 2008 Advertiser of the Year by Cannes International Advertising Festival.OperationsEffective July 1, 2007, the company's operations are categorized into three "Global Business Units" with each Global Business Unit divided into "Business Segments" according to the company's March 2009 earnings release.Beauty Care Beauty segmentGrooming segment.Household Care Baby Care and Family Care segmentFabric Care and Home Care segmentHealth and Well-Being Health Care segmentSnacks, Coffee, and Pet Care segment.

RESEARCH OBJECTIVES

The following are the objectives-

1. To study the financial position of the company2. To apply marginal costing concept on companies financial data.3. To analyze the company’s financial position before recession and after

recession4. To find out the magnitude of relationship between sales and profit,

variable cost and profit, and, total cost and profit.

RESEARCH METHODOLOGY

NATURE OF RESEARCH

Since source of primary data directly relevant was scare. It was decided that the analysis had to be secondary data analysis, collected directly from the Internet, News Paper, & Magazine. This is an exploratory research

SAMPLE COMPANY: ONGC

SAMPLE SIZE: 10 years Balance Sheet, Profit and Loss and Cash Flow statement of the company.

TIME PERIOD: 20 Days

DATA COLLECTION: Data is collected from secondary sources like capitaline database, Internet, News paper, & Magazine.

SOFTWARE USED: Microsoft Excel, MS word.

TOOLS: Marginal costing, Mean, Median, Correlation and Regression analysis

ANALYSIS: The analysis is been done through table, graphs and pie charts

CHAPTER -1

INTRODUCTIONProctor & Gamble India

Procter & Gamble Co. (P&G) is an American company based in Cincinnati, Ohio that manufactures a wide range of consumer goods. In India Proctor & Gamble has two subsidiaries: P&G Hygiene and Health Care Ltd. and P&G Home Products Ltd. P&G Hygiene and Health Care Limited is one of India's fastest growing Fast Moving Consumer Goods Companies with a turnover of more than Rs. 500 crores. It has in its portfolio famous brands like Vicks & Whisper. P&G Home Products Limited deals in Fabric Care segment and Hair Care segment. It has in its kitty global brands such as Ariel and Tide in the Fabric Care segment, and Head & Shoulders, Pantene, and Rejoice in the Hair Care segment.

Procter & Gamble's relationship with India started in 1951 when Vicks Product Inc. India, a branch of Vicks Product Inc. USA entered Indian market. In 1964, a public limited company, Richardson Hindustan Limited (RHL) was formed which obtained an Industrial License to undertake manufacture of Menthol and de mentholised peppermint oil and VICKS range of products such as Vicks VapoRub, Vicks Cough Drops and Vicks Inhaler. In May 1967, RHL introduced Clearsil, then America's number one pimple cream in Indian market. In 1979, RHL launches Vicks Action 500 and in 1984 it set up an Ayurvedic Research Laboratory to address the common ailments of the people such as cough and cold.

In October 1985, RHL became an affiliate of The Procter & Gamble Company, USA and its name was changed to Procter & Gamble India. In 1989, Procter & Gamble India launched Whisper - the breakthrough technology sanitary napkin.

In 1991, P&G India launched Ariel detergent. In 1992, The Procter & Gamble Company, US increased its stake in Procter & Gamble India to 51% and then to 65%. In 1993, Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products and started marketing Old Spice Brand of products. In 1999 Procter & Gamble India Limited changed the name of the

Company to Procter & Gamble Hygiene and Health Care Limited.

P&G Home Products Limited was incorporated as 100% subsidiary of The Procter & Gamble Company, USA in 1993 and it launched launches Ariel Super Soaker. In the same year Procter & Gamble India divested the Detergents business to Procter & Gamble Home Products. In 1995, Procter & Gamble Home Products entered the Haircare Category with the launch of Pantene Pro-V shampoo. In 1997 Procter & Gamble Home Products launches Head & Shoulders shampoo. In 2000, Procter & Gamble Home Products introduced Tide Detergent Powder - the largest selling detergent in the world. In 2003, Procter & Gamble Home Products Limited launched Pampers - world's number one selling diaper brand.

Today, Proctor & Gamble is the second largest FMCG company in India after Hindustan Lever Limited.

CHAPTER -2

INTERPRETAION From the above graph

shows that sales are increasing year by year. Increasing the sales also increasing revenue. Its show better financial position of the company. But in year 2006-07 to 2009-10 sales are decreasing.

year sales577.24

2005-06 684.712006-07 567.592007-08 539.642008-09 646.012009-10 774.222010-11 904.452011-12 1,002.882012-13 1,297.41

2013-14 1,686.78

year revenue growth%2004-05 02005-06 0.2893621282006-07 -0.1539039042007-08 -0.0966557542008-09 0.1836980082009-10 0.1669504262010-11 0.1434456382011-12 0.1139882482012-13 0.3138264592013-14 0.309252747

INTERPRETATION

From the above graph revenue growth% are decline as well as increasing year by year. But in 2006-07 & 2007-8 are shows negative growth. It shows better financial position of the company.

year contribution2004-05 116.792005-06 102.342006-07 115.192007-08 103.642008-09 139.742009-10 204.612010-11 230.472011-12 162.842012-13 183.512013-14 217.16

INTERPRETATION

From the above figure contribution is basically that portion of sales which remains after recovering variables costs and is available towards fixed costs and profit.In the 2005-06 contribution are low and 2007-08 contibution are negative. Its show sales are decresing in comprison of variable costs.

INTERPRETATION P/v ratio indicates the effect on profit for a given change in the sales. In the year 2009-10 p/v ratio are high &2013-14 is very low ratio . its shows huge change in profit due to change in sales.

4 Year P/V Ratio  2004-05 20.23%  2005-06 14.95%  2006-07 20.29%  2007-08 19.21%  2008-09 21.63%  2009-10 26.43%  2010-11 25.48%  2011-12 16.24%  2012-13 14.14%  2013-14 12.87%

INTERPRETATION In the above graph profit before tax are increasing year by year.But in 2007-08 & 2004-05 PBT are decline. It is shows that company has better financial position. Its mean that company has in strong position.

5 Year PBT  2004-05 127.17  2005-06 177.79  2006-07 193.34  2007-08 145.5  2008-09 180.56  2009-10 231.66  2010-11 233.63  2011-12 176.75  2012-13 223.02  2013-14 286.2     

PBT MARGIN %

INTERPRETATION In the above figure pat margin % are increasing in the year of 2005-06 but its negative in 2007-08 & 2011-12 . then its decline year by year.its shows company profit after tax are decresing year after year.

6 YearPBT Margin %

  2004-05 0  2005-06 0.398049855  2006-07 0.087462737  2007-08 -0.247439743  2008-09 0.240962199  2009-10 0.283008418  2010-11 0.008503842  2011-12 -0.243461884  2012-13 0.261782178  2013-14 0.283292978

PROFIT AFTER TAX

INTERPRETATION From the above graph profit after tax is the actual profit of the company after deducting all the expenses & taxes.it increasing as well as decreasing year by year.It is shows better financial position for the company.

PAT MARGIN %

7 Year PAT  2004-05 -169.84  2005-06 -412.44  2006-07 -196.27  2007-08 -175.04  2008-09 -132.84  2009-10 -117.66  2010-11 -117.81  2011-12 -145.64  2012-13 -116.49  2013-14 -123.85

INTERPRETATION In above figure shows pat margin % are very high in the year 2005-06 are very high but in the 2007-08,2008-09,2009-10&2012-13 its show negative &2010-11&2011-2012 its start increasing but in 2012-13 its again negative.

GROSS PROFIT

YearPAT Margin %

2004-05 02005-06 1.4284032032006-07 -0.5241247212007-08 -0.1081673212008-09 -0.2410877512009-10 -0.1142728092010-11 0.001274862011-12 0.2362278242012-13 -0.2001510572013-14 0.063181389

INTERPRETATION

In the above figure gross profit are increasing year after year .It shows company direct income more than direct expenses.its show better financial position of the company and profit continusoly year after year.

year Gross Profit2004-05 599.182005-06 772.562006-07 653.662007-08 590.482008-09 698.952009-10 815.642010-11 932.642011-12 1038.952012-13 13652013-14 1787.13

ANALYSIS OF MEAN & MEDIAN

Before Recession

20003-04 2004-05 2005-06 2006-07

577.24 684.71 567.59 539.64

460.45 582.37 452.4 436

116.79 102.34 115.19 103.64

11.56 12.4 7.92 8.98

127.17 177.79 193.34 145.5

-169.84 -412.44 -196.27 -175.04

0.202325 0.149464737 0.202946 0.192054

57.13584 82.96271253 39.0252 46.75769

520.1042 601.7472875 528.5648 492.8823

Recession

2007-08 2008-09

646.01 774.22 904.45

506.27 569.61 673.98

139.74 204.61 230.47

12.12 14.37 25.03

180.56 231.66 233.63

-132.84 -117.66 -117.81

0.216312 0.264278887 0.254818

56.03006 54.3743776 98.22703

589.9799 719.8456224 806.223

After

Recession

2009-10 2010-11 2011-12

1,002.88 1,297.41 1,686.78

840.04 1113.9 1469.62

162.84 183.51 217.16

22.16 28.08 31.31

176.75 223.02 286.2

-145.64 -116.49 -123.85

0.162372 0.141443337 0.128742

136.4764 198.5247278 243.1989

866.4036 1098.885272 1443.581

CORELATION BETWEEN P/V RATIO &PROFIT

YEAR P/V RATIOPROFIT after tax

2204-05 20.23% -169.82005-06 14.95% -412.42006-07 20.29% -196.32007-08 19.21% -1752008-09 21.63% -132.82009-10 26.43% -117.72010-11 25.48% -117.82011-12 16.24% -145.62012-13 14.14% -116.52013-14 12.87% -123.9          

0.313INTERPRETATION Correlation b/w sales and profit is 0.313 its shows

highly positive correlation which means sales and profit increasing year to year.

CORELATION BETWEEN SALES &PROFITYEAR sales PROFIT after tax2004-05 577.24 -169.842005-06 684.71 -412.442006-07 792.18 -196.272007-08 899.65 -175.042008-09 1007.1 -132.842009-10 1114.6 -117.662010-11 1222.1 -117.812011-12 1329.5 -145.642012-13 1437 -116.492013-14 1544.5 -123.85

0.600536

INTERPRETATION

Correlation b/w p/v ratio & profit is 0.600536. it is a positive correlation. It shows p/v ratio and profit are increasing.

CONCLUSIONThe company had been consistently making profit during the last 5 years, mainly due to its new offers to the customers ,its produces regularly new products. Production of health care and skin care cosmatics increases regularly which are more demanding in the market and provide satisfactions to the its potential customers as well as new ones.Procter & Gamble has built an organisation with an innovative culture. Everybody can contribute to new product development either through research and development or through their focus, energy and commitment to their role.This approach to innovation is not new. For example, Procter & Gamble’s dedication to innovation led to the development of Flash, a revolutionary brand for its time. Since its launch many hundreds of innovations now enable it to cater for many more situations within the household much more efficiently. Similarly P&G created the disposable nappy business by introducing Pampers.In a fast-changing world an innovative culture helps an organisation constantly move forward. Having an innovative culture has actively helped Procter & Gamble develop and transfer technologies and bring new products to market. Creating innovations that give people products which make their lives easier and better is what creates a competitive advantage for P&G. And is what has helped P&G become the successful global business it is today.