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basant
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   Posted: 23/Dec/2006 at 10:51am |
No not that way working capital ratio is also known as wc TO ratio. WC is the difference of current assets - current liabilities and the ratio is found by dividing this by sales so a ratio of 5 means that for each rupee of WC we are able to generate sales of Rs 5 - very similar to asset turnover ratio.
What you have indicated above is debtor and stock calculated in terms of days and that is yet another tool.
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kulman
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Posted: 23/Dec/2006 at 11:09am |
Does it mean:
Working Capital Turnover Ratio = Sales/(current assets - current liabilities)
Now would that ratio be equal to the one I mentioned i.e.
working capital ratio = 365/(x+y)
.....where 'x' & 'y' are number of days inventory & debtors respectively.
As I understood from both these formulae, it would signify not only how efficiently the working capital is being used, but also whether debtors & inventory are well-managed/under control. So, both the ratios shall be equal, right?
Please comment.
Edited by kulman - 23/Dec/2006 at 11:11am
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basant
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Posted: 23/Dec/2006 at 11:19am |
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Yes but x and y are just two aspects of working capital a company could have cash or bank OD which is WC but not included in the x/y range but for these two items they should be equal.
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kulman
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Posted: 17/Jan/2007 at 11:58pm |
A: Carnation Nutra Analogue is a company belonging to the Cadila Group. Cadila Group acquired the shareholding of the old promoters and subsequently came out with an open offer for the other shareholders at Rs 150 in May 2006.
Cadila Group currently owns about 61% stake in this company. Now Carnation Nutra Analogue manufactures Nutralite brand of table margarine. Now margarine is nothing but a healthier alternative to butter and it is made from vegetable oils and skimmed milk.
Nutralite is the largest selling margarine in India and currently has a market share of close to 60%. After acquisition of Carnation Nutra Analogue, Cadila Group has been on an overdrive and they have started an aggressive marketing campaign for Nutralite. This includes advertising the product on various TV channels and also distribution of samples with Sugar Free, which is another brand of Cadila Group.
If you see the consumption pattern of margarine - in the west, consumption of margarine is three times more than that of butter whereas in our country it is only a small fraction of the total consumption of butter. This is probably because of lack of awareness about these products. Now what is happening is with changing lifestyle patterns, sedentary lifestyles and growing affluence, it is leading to a lot of lifestyle related diseases like cardiovascular diseases and obesity.
In such a scenario, products like Sugar Free and Nutralite are gaining greater acceptance amongst the Indian customers. This company has got all the ingredients to go up a long way. This company currently has a product which has the largest market share and is still in a very infant stage. It has good management, which is capable of considerably scaling up operations to meet the growing demand for this product.
This company has a small equity of Rs 5.45 crore and a high promoter stake of 61%. We believe that Nutralite is still in the evolution phase of the product lifecycle and it is still to start the growth phase.
The market for margarine, which is very small as of now, may see an exponential growth in the years to come. With Cadila now in the driver's seat, Nutralite may be a repeat of what Cadila did to Sugar Free.
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Basant jee
Please post our views on the above analysis as well as on this 'gem-explorer-cum-media savvy' analyst.
By the way, leave aside buying shares of Carnation, buying & eating of Nutralite doesn't seem expensive, does it?
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omshivaya
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Posted: 17/Jan/2007 at 12:12pm |
What I would like to know most of all here is: What are the plus points of Butter over margarine?
I am a simple layman and I understand only this: Ciggaretes are injurious to health and yet cigarrette is a thriving industry. People smoke and smoke and then they pay loads of money to treat diseases due to ciggy smoking. If people already know Ciggy is bad, why do they still do it?
If butter and margarine tastes the same or if margarine tastes better, then definitely margarine has an edge(even if it costs a bit more).
The 2nd point being that of the distribution network. How powerful is the distribution ntwk. of Nutralite, compared to an Amul Butter!
The 3rd point: Amul Butter may come up with a margarine based product? What then? Is the margarine some patented formula? Someone may choose an Amul based margarine product over someone else's due to brand loyalty.
If indeed Amul would come up with a margarine-based product, the only thing that I think would make THE difference is the whosoever has the stronger distribution network and marketing campaigns!
Really would love to have a detailed discussion on this. Basant sir, would you oblige? 
Edited by omshivaya - 17/Jan/2007 at 12:54pm
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sanjay3
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Posted: 17/Jan/2007 at 1:49am |
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Nutralite is widely avaliable Omji as far taste is concerned it is different but due to its benifits ,and increase in diebetic and cholestrol problems demand side is bright
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omshivaya
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Posted: 18/Jan/2007 at 12:44pm |
Thanks sanjay ji. Addressable market needs to be addressed, excluding the market already covered by Butter. I dont know how many of the butter consumers will shift to Nutralite. Can a majority do so? Maybe someone can throw in some expert light.
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s_praharaj
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Posted: 19/Jan/2007 at 11:55pm |
After Carnation was discussed in this forum, I bought a pack of Nutralite
and tasted it. It tastes just like butter.
While buying I asked the shopkeeper, How many Nutralite he is selling a day. He told hardly 2-3 daily. How many Amul butter u are selling, I asked. He told not less than 40 daily. I told him "Nutralite is a healthy alternative and people will slowly shift to it."
He told, " No-Sir, I don't see there is any competition for Amul. Those who take Amul, never ask for anything else."
But I beleive, Nutralite will definitely catchup with time, as people are becomming more health conscious day by day.
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Shashi Praharaj
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