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    FMCG Sector Cost Structure

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    Manoj Kumar Meena
    This study analyzes the cost structure of nine fast-moving consumer goods (FMCG) companies in India over five years. The objectives are to analyze costs, study sales trends, and summarize findings. Cost data was collected from financial statements and ANOVA analysis was performed to determine if costs and sales trends were uniform. The analysis found raw material cost to be the most influential on profits and a significant difference in cost elements between companies. In conclusion, companies need measures to reduce raw material costs to increase profitability.

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    FMCG Sector Cost Structure

    Uploaded by

    Manoj Kumar Meena
    2K views10 pages
    This study analyzes the cost structure of nine fast-moving consumer goods (FMCG) companies in India over five years. The objectives are to analyze costs, study sales trends, and summarize findings. Cost data was collected from financial statements and ANOVA analysis was performed to determine if costs and sales trends were uniform. The analysis found raw material cost to be the most influential on profits and a significant difference in cost elements between companies. In conclusion, companies need measures to reduce raw material costs to increase profitability.

    Original Description:

    Cost Structure analysis

    Original Title

    FMCG Sector cost structure

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    This study analyzes the cost structure of nine fast-moving consumer goods (FMCG) companies in India over five years. The objectives are to analyze costs, study sales trends, and summarize findings. Cost data was collected from financial statements and ANOVA analysis was performed to determine if costs and sales trends were uniform. The analysis found raw material cost to be the most influential on profits and a significant difference in cost elements between companies. In conclusion, companies need measures to reduce raw material costs to increase profitability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    2K views10 pages

    FMCG Sector Cost Structure

    Uploaded by

    Manoj Kumar Meena
    This study analyzes the cost structure of nine fast-moving consumer goods (FMCG) companies in India over five years. The objectives are to analyze costs, study sales trends, and summarize findings. Cost data was collected from financial statements and ANOVA analysis was performed to determine if costs and sales trends were uniform. The analysis found raw material cost to be the most influential on profits and a significant difference in cost elements between companies. In conclusion, companies need measures to reduce raw material costs to increase profitability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    A Study of Cost

    Structure of FMCG
    Industry
    Presented by
    Shikha Meena

    Scope of the study


    Cost is the most important factor which effect the
    profitability of every organization

    The study helps to determine how do the


    different costs affect the profit of the organization

    Reason to chose the topic

    It helps to analyse the companies cost structure which will help


    every company to know (their day-to-day expenses) and to
    analysis the sales trends of the companies.
    The research is based on nine FMCG companies of FMCG
    sensex

    Introduction
    Cost Structure refers to the types and relative proportions of fixed and variable costs
    that a business incur
    Profit of an organization is largely dependent of the cost incurs in various activities
    Business cost structure have two classes: Cost Driven and Value Driven
    Cost Driven structure is focused on using and investing less amount of money at
    each step from manufacturing the goods to distribution channels
    This study is focused on analyzing the cost structure of the various companies

    Segment of FMCG sector


    Household Care; 10% Lighting; 2%
    Tobacco; 15%
    Food and Beverages; 53%

    Personal Care; 20%

    Objectives
    To analyze the cost structure of the companies
    To study the sales trend analysis of the company
    To summarize the main findings of the study

    Hypothesis
    The cost structure of the FMCG companies is uniform
    The trend of the sales of the FMCG companies is uniform
    Both the hypothesis has been rejected after the Anova Analysis

    Methodology
    The study in conducted purely on the basis of secondary data
    Financial statements of 9 FMCG companies has been collected
    The data which has been collected is for 5 years from 2008 to 2013
    Anova analysis has been done on the data collected from the various sources

    Companies included in the study


    Dabur India Limited

    Marico Limited

    Godrej Consume Products Ltd

    United Sprits Limited

    Hindustan Unilever Ltd

    Nestle India Ltd

    ITC Limited

    United Breweries Limited

    Tata Global Beverages Limited

    Tools used

    Methodology
    EXCEL
    SPSS

    The average of the all cost of last 5 years is


    calculated in excel and the further analysis
    is done on the data obtained from it
    Once the data has been obtained the Anova
    analysis have been done for all the type of
    costs incurred

    Type of Data and sources of data


    Data which is used in this research is basically the financial statement
    of the companies included in the study for the period of 2008 to 2013
    Data is obtained from various websites which are as follows
    www.accountingtools.com
    www.referenceforbusiness.com

    Analysis
    Anova Analysis of different costs has been done for the companies
    included in the study and significance level has been checked
    The costs which has been analyzed are as follows
    Raw Material Cost

    Salaries and Wages

    Indirect Taxes

    Power and Fuel

    Depreciation Cost

    Financial Charges

    Administration, Selling ,Distribution and other expenses


    The results of Anova
    analysis for Raw Material
    cost is shown in the table
    The null hypothesis has
    been rejected as the F
    value is greater than Fcritical. Similarly,analysis
    is done for other costs

    Source

    of Sum of df

    variation

    squares

    Between

    14395.9

    groups

    11

    Within

    5422.0

    groups
    total

    19817.9
    11

    Mean

    square
    8

    1799.489

    36

    150.611

    44

    F
    critical

    11.9 4.06
    48

    Conclusion
    Raw Material Cost is the most influencing
    factor in FMCG Industry
    To increase the profitability the companies
    need to take proper measure to reduce
    this cost
    The average raw material cost is higher
    for ITC and lowest for UBL
    There is a significant difference in the
    elements of the costs of FMCG Industry
    units considered in the research

    Limitations
    The research is conducted on the
    basis of secondary data so it is
    dependent on the authenticity of
    the data collected by concerned
    organization
    The research is limited to the
    analysis of 9 companies and
    hence it can be conducted taking
    data of more organization

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