chapter 4 for college
TRANSCRIPT
COST
The ICMA, London has defined cost as “the amount of expenditure (actual
or notional) incurred on or attributable to a specified thing or activity”.
COST CONTROL
Cost control refers to management’s effort to influence the actions of
individuals who are responsible for performing tasks, incurring costs, and
generating revenues. Cost control is a particularly important area of focus
for small businesses, which often have limited amounts of time and money.
VARIOUS ELEMENTS OF COST
There are three main elements of cost. They are
1. Material
2. Labour
3. Overhead
MATERIALS
The term “material” is generally, used to refer to raw materials used in the
process of production, semi-finished materials or products, components and
spare parts, consumable stores or factory suppliers, such has oils and fats,
soaps, detergents, chemicals etc. and packing material, such as boxes
cellophane papers etc. The substance from which the product is made is
known as material. It may be in raw or manufactured states. It can be direct
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 84
as well as indirect. It may be noted that the term the “materials” differs from
the term “stores” and “inventory”.
Materials are, usually, classified into two categories. They are direct
material and indirect material. This classification of materials is mostly
based on convenience rather than on any strict principle.
DIRECT MATERIALS at KSDL
Direct materials refers to those materials which become part and parcel of
the finished product, and which can be conveniently identified with and
wholly allocated to a particular cost center or cost unit. The cost of direct
materials form a major production of the total cost of the product the cost
direct material varies directly in proportion to output.
In KS & DL, Direct materials are raw materials, materials used by the cost
centers, within the geographical area of production work. All other materials
are shall be indirect materials.
All materials are components specifically purchased, Palm acid oil, other
oils and fats, Linear alkyl benzene, perfumery materials, packing
materials, sandalwood etc. The high value materials are monitored.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 85
PALM ACID OIL
Palm oil is an edible vegetable oil derived from the mesocarp (reddish pulp)
of the fruit of the oil palms, primarily the African oil palm. Palm oil is
naturally reddish in colour because of a high beta-carotene content.
Along with coconut oil, palm oil is one of the few highly saturated vegetable
fats. It is semi-solid at room temperature and contains several saturated and
unsaturated fats
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 86
TABLE: 4.1
TABLE SHOWING THE COST BREAKUP IN MATERIAL
OF PALM ACID OIL AND UNIT COST OF KS & DL.
PARTICULARS 2011 2012 2013
Palm acid oil 166960374 185607552 254262576
Total unit cost 43254 46672 48642
GRAPH: 4.1
GRAPH SHOWING THE COST BREAKUP IN MATERIAL
OF PALM ACID OIL COST
2011 2012 20130
50000000
100000000
150000000
200000000
250000000
300000000
166960374185607552
254262576
Palm acid oil
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 87
ANALYSIS AND INTERPRETATION
Graph 4.1 shows the mixed the movement of direct material cost. The
reason for increase and decrease of expenditure on material, at KS & DL is
due to the consumption of direct material. The direct material consumption
fluctuates due to the production order which the company receives that year.
Total unit cost is increased considerably over the three years. Total unit cost
in the year 2011 it was 43254 units, in the year 2012 it was 46672 units and
in the year 2013 it was 48642 units. Considering the above three year it
indicates that the company consumed more direct material. This shows that
the company spent more cost on direct material.
OILS AND FATS
Fats and oils, group of organic substances that form an important part of
the diet and also are useful in many industries. The fats are usually solid,
the oils generally liquid at ordinary room temperatures. Some tropical
products, liquids in their sites of origin, become solids in cooler climates.
Example : palm oil, coconut oil etc.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 88
TABLE: 4.2
TABLE SHOWING THE COST BREAKUP IN MATERIAL
OF OTHER OILS AND FATS AND UNIT COST OF KS&DL.
PARTICULARS 2011 2012 2013
Other oils and fats 66560497 93028630 109614504
Total unit cost 53036 73674 65340
GRAPH: 4.2
GRAPH SHOWING THE COST BREAKUP IN MATERIAL
OF OTHER OILS AND FATS COST
2011 2012 20130
20000000
40000000
60000000
80000000
100000000
120000000
66560497
93028630
109614504
Other oils and fats
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 89
Graph 4.2 shows the mixed the movement of direct material cost. The
reason for increase and decrease of expenditure on material, at KS & DL is
due to the consumption of direct material. The direct material consumption
fluctuates due to the production order which the company receives that year.
Total unit cost is fluctuating considerably over the three years. Total unit
cost in the year 2011 it was 53036, in the year 2012 it was73674 and in the
year 2013 it was 65340. Considering the above three year it indicates that
the company spent less cost in the year 2011 when compared to 2012.
When compared to 2012 and 2013 the company spent less cost in 2013
compared to 2012.
Linear alkyl benzene
Linear alkyl benzene is a family of organic compounds. They are mainly
produced as intermediate in the production of surfactants, for use in
detergent. They are sometimes called LABs. LAB sulfonic acid is the
largest-volume synthetic surfactant because of its relatively low cost, good
performance, the fact that it can be dried to a stable power and the
biodegradable environmental friendliness as it has straight chain.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 90
TABLE: 4.3
TABLE SHOWING THE COST BREAKUP IN MATERIAL
OF LINEAR ALKYL BENZENE AND UNIT COST OF
KS&DL.
PARTICULARS 2011 2012 2013
Linear alkyl benzene 18507418 19655620 21362735
Total unit cost 63772 83140 87209
GRAPH: 4.3
GRAPH SHOWING THE COST BREAKUP IN MATERIAL
OF OTHER LINEAR ALKYL BENZENE AND COST
2011
2012
2013
17000000175000001800000018500000190000001950000020000000205000002100000021500000
18507418
19655620
21362735
Linear alkyl benzene
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 91
Graph 4.3 shows the mixed the movement of direct material cost. The
reason for increase and decrease of expenditure on material, at KS & DL is
due to the consumption of direct material. The direct material consumption
fluctuates due to the production order which the company receives that year.
Total unit cost is increased considerably over the three years. Total unit cost
in the year 2011 it was 63772, in the year 2012 it was 83140 and in the year
2013 it was 87209. Considering the above three year it indicates that the
company consumed more direct material. This shows that the company
spent more cost on direct material.
Packing materials
Packing material any material used especially to protect something.
Packaging is the box or wrapping in which a product is offered for sale.
Packing materials in KS&DL are MSG 125 CARTONS, BT stickers, MRS
Wrappers, SBT (S) CBS, Carbolic CBS, Gift Pack 6x1 CBS etc..
TABLE: 4.4
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 92
TABLE SHOWING THE COST BREAKUP IN MATERIAL
OF PACKING MATERIALS AND UNIT COST OF KS&DL.
PARTICULARS 2011 2012 2013
Packing materials 94893095 107435742 117505203
Total unit cost 94893095 107435742 117505203
GRAPH: 4.4
GRAPH SHOWING THE COST BREAKUP IN MATERIAL
OF PACKING MATERIALS AND COST
2011 2012 20130
20000000
40000000
60000000
80000000
100000000
120000000
94893095107435742
117505203
Packing materials
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 93
Graph 4.4 shows the mixed the movement of direct material cost. The
reason for increase and decrease of expenditure on material, at KS & DL is
due to the consumption of direct material. The direct material consumption
fluctuates due to the production order which the company receives that year.
Total unit cost is increased considerably over the three years. Total unit cost
in the year 2011 it was 94893095, in the year 2012 it was 107435742 and in
the year 2013 it was 117505203. Considering the above three year it
indicates that the company consumed more direct material. This shows that
the company spent more cost on direct material.
SANDALWOOD
Sandalwood is the name of a class of fragrant woods from trees in the genus
Santalum. The woods are heavy, yellow and fine-grained, and unlike many
other aromatic woods, they retain their fragrance for decades. Sandalwood
oil is extracted from the woods for use. Both the wood and oil produce a
distinctive fragrance that has been highly valued for centuries.
TABLE: 4.5
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 94
TABLE SHOWING THE COST BREAKUP IN MATERIAL
OF SANDAL WOOD AND UNIT COST OF KS & DL.
PARTICULARS 2011 2012 2013
Sandal wood 141487562 179787025 265845294
Total unit cost 3917587 4204266 4610567
GRAPH: 4.5
GRAPH SHOWING THE COST BREAKUP IN MATERIAL
OF SANDAL WOOD AND COST
20112012
2013
0
50000000
100000000
150000000
200000000
250000000
300000000
141487562179787025
265845294
Sandal wood
Sandal wood
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 95
Graph 4.5 shows the mixed the movement of direct material cost. The
reason for increase and decrease of expenditure on material, at KS & DL is
due to the consumption of direct material. The direct material consumption
fluctuates due to the production order which the company receives that year.
Total unit cost is increased considerably over the three years. Total unit cost
in the year 2011 it was 3917587, in the year 2012 it was 4204266 and in the
year 2013 it was 4610567. Considering the above three year it indicates that
the company consumed more direct material. This shows that the company
spent more cost on direct material.
INDIGENOUS RAW MATERIALS AT KS&DL
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 96
Indigenous materials are raw material from the environment. Indigenous
may refer to the (ecology) presence in a region as the result of only natural
processes, with no human intervention. Raw materials are the components
that are used in the making of a product. It is the basic material that is used
in the manufacture of a final product. For instance, the main ingredient of
chocolate is cocoa, thus making it its raw material.
Examples of indigenous materials are leaves, sticks, old clothe etc. Some of
the examples of indigenous material at KS&DL for Perfumery materials are
sandalwood oil clove leaf oil, sandalwood oil booster/BBA, sandalwood oil
fraction, sandal Mysore core, lemon grass oil etc.
Example of indigenous material at KS&DL for chemicals are soap
noodles70:30, soap noodles 85:15, talc 300 mesh cosmetic, white clay,
HCL, china clay, urea, sodium hydrochloride, pigment yellow paste etc.
TABLE: 4.6
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 97
TABLE SHOWING THE COST BREAKUP IN
INDIGENOUS MATERIAL AT KS & DL
PARTICULARS 2011 2012 2013
Indigenous material (%) 89.14 89.85 91.9
AMOUNT 729245646 881097126 1151750758
GRAPH: 4.6
GRAPH SHOWING THE COST BREAKUP IN
INDIGENOUS MATERIAL
2011 2012 2013
89.14
89.85
91.9
Indigenous material (%)Indigenous material (%)
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 98
Graph 4.6 shows the consumption indigenous raw materials cost. The
reason for increase and decrease of expenditure on material, at KS&DL is
due to the consumption of indigenous raw material. The indigenous raw
material consumption fluctuates due to the production order.
Consumption of indigenous raw material has been considerably increased
over the 3 years. Material consumed in the year 2011, it was 89.14%, in the
year 2012, it was 89.85% and in the year 2013, it was 91.90%. Therefore it
indicates that the company has incurred more of indigenous material when
compared to imported materials, which means there is a cost control during
the years.
LABOUR AT KS & DL
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 99
Direct labour is the most important element in production, it is the second
most important of cost analysis. Labour takes an active direct part in
production of an item. Labour influences the cost of production not only
through its cost but also through its influence on other elements of cost such
as inefficient labour results (low efficiency) increase in wastage, spoil, scrap
etc. Therefore labour influences the cost of production both directly and
indirectly through its influence on cost control.
At KS&DL, the earnings and incentives of employee are considered as
direct labour. If an employee is working with in the geographical area of
production. Statutory welfare requirements have been met. Workmen and
staff have been encouraged with all help and assistance to take part in sports,
fine, arts and cultural activities. In order to motivate the workmen for better
productivity, workers education/training programmes were conducted during
the year. Labour charges are calculated based upon the number of hours the
work through fully biometric system. Fringe benefits are paid to the
employees as per the Memorandum of Understanding (MOU) concluded
between the Management and the Employees.
TABLE: 4.7
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 100
TABLE SHOWING THE COST BREAKUP IN SALARIES
AND WAGES, BONUS AND EX-GRATIA AT KS & DL
PARTICULARS 2011 2012 2013
Salaries and wages, bonus &
ex-gratia
29234299
6
30171384
8
32091271
5
GRAPH: 4.7
GRAPH SHOWING BREAKUP IN SALARIES AND
WAGES, BONUS AND EX-GRATIA
20112012
2013
Salaries and wages,bonus & ex-gratia
Salaries and wages,bonus & ex-gratia
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 101
Graph 4.7 shows the comparison of the direct labour i.e, salaries and wages,
bonus and ex-gratia of the three years 2011, 2012, 2013. In 2011, the cost of
salaries and wages of employee benefit is 292342996, in the year 2012 it
was 301713848. When compared to 2011, in 2012 there is an increase in the
salaries and wages, bonus and ex-gratia.
In the year 2012, the cost of salaries and wages of employee benefit in
labour is 301713848, in the year 2013 it was 320912715. When compared to
2012, in 2013 there is an increase in the salaries and wages, bonus and ex-
gratia.
From the above analysis made for the years it can be inferred that labour is a
major component of cost and an effective manner also to control cost.
Overall cost for the three years, the utilization of man power in a proper way
is essential for the company’s growth.
TABLE: 4.8
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 102
TABLE SHOWING THE COST BREAKUP IN DIRECTORS
REMUNERATION AT KS & DL
PARTICULARS 2011 2012 2013
Directors Remuneration 1836576 1868957 230248
3
GRAPH: 4.8
GRAPH SHOWING THE COST BREAKUP IN DIRECTORS
REMUNERATION
2011 2012 20130
500000
1000000
1500000
2000000
2500000
18365761868957
2302483
Directors Remuneration
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 103
ANALYSIS AND INTERPRETATION
Graph 4.8 shows the comparison of the direct labour i.e, directors
remuneration of the three years 2011, 2012, 2013. In 2011, the cost of
directors remuneration is 1836576, in the year 2012 it was 1868957. When
compared to 2011, in 2012 there is an increase in directors remuneration.
In the year 2012, the cost of salaries and wages of employee benefit in
labour is 1868957, in the year 2013 it was 2302483. When compared to
2012, in 2013 there is an increase in directors remuneration.
From the above analysis made for the years it can be inferred that labour is a
major component of cost and an effective manner also to control cost.
Overall cost for the three years, the utilization of man power in a proper way
is essential for the company’s growth.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 104
TABLE: 4.9
TABLE SHOWING THE COST BREAKUP IN PROVIDENT
FUND AND OTHERS FUND AT KS & DL
PARTICULARS 2011 2012 2013
Provident fund and other
funds
2809719
8
2807329
8
3309502
0
GRAPH: 4.9
GRAPH SHOWING THE COST BREAKUP IN PROVIDENT
FUND AND OTHER FUNDS
2011 2012 2013
28097198 28073298
33095020
Provident fund and other funds
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 105
ANALYSIS AND INTERPRETATION
Graph 4.9 shows the comparison of the direct labour i.e, provident fund and
other funds of the three years 2011, 2012, 2013. In 2011, the provident fund
and other funds is 28097198, in the year 2012 it was28073298. When
compared to 2011, in 2012 there is an decrease in provident fund and other
funds.
In the year 2012, the cost provident fund for employee benefit in labour is
28097198, in the year 2013 it was 33095020. When compared to 2012, in
2013 there is an increase in provident fund and other funds.
From the above analysis made for the years it can be inferred that labour is a
major component of cost and an effective manner also to control cost.
Overall cost for the three years, the utilization of man power in a proper way
is essential for the company’s growth.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 106
TABLE: 4.10
TABLE SHOWING THE COST BREAKUP IN GRATUITY
AT KS & DL
PARTICULARS 2011 2012 2013
Gratuity 2391025
6
6175330 2800978
8
GRAPH: 4.10
GRAPH SHOWING THE COST BREAKUP IN SHOWING
GRATUITY
2011 2012 2013
23910256
6175330
28009788
GratuityGratuity
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 107
ANALYSIS AND INTERPRETATION
Graph 4.10 shows the comparison of the direct labour i.e., gratuity of the
three years 2011, 2012, 2013. In 2011, the cost of gratuity is 23910256, in
the year 2012 it was 6175330. When compared to 2011, in 2012 there is an
decrease in gratuity.
In the year 2012, the cost of gratuity in labour is 6175330, in the year 2013
it was 28009788. When compared to 2012, in 2013 there is an increase in
directors remuneration.
From the above analysis made for the years it can be inferred that labour is
a major component of cost and an effective manner also to control cost.
Overall cost for the three years, the utilization of man power in a proper way
is essential for the company’s growth.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 108
TABLE: 4.11
TABLE SHOWING THE COST BREAKUP IN LABOUR
WELFARE EXPENSES AT KS &DL
PARTICULARS 2011 2012 2013
Labour Welfare Expenses 1859147
6
2010327
1
2566877
2
GRAPH: 4.11
GRAPH SHOWING THE COST BREAKUP IN LABOUR
WELFARE EXPENSES
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 109
2011 2012 20130
5000000
10000000
15000000
20000000
25000000
30000000
1859147620103271
25668772
Labour Welfare Expenses
ANALYSIS AND INTERPRETATION
Graph 4.11 shows the comparison of the direct labour i.e., labour welfare
expenses of the three years 2011, 2012, 2013. In 2011, the cost of labour
welfare expense it was 18591476, in the year 2012 it was 20103271. When
compared to 2011, in 2012 there is an increase in labour welfare expense.
In the year 2012, the cost of labour welfare expense it was 20103271, in the
year 2013 it was 25668772. When compared to 2012, in 2013 there is an
increase in labour welfare expenses.
From the above analysis made for the years it can be inferred that labour is
a major component of cost and an effective manner also to control cost.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 110
Overall cost for the three years, the utilization of man power in a proper way
is essential for the company’s growth.
INVENTORY MANAGEMENT
Inventory management and control refers to the task of keeping
inventory level in such a way as to maintain smooth production and sales
operations and at the same time keeping investment in inventories at the
minimum level.
TECHNIQUES IN INVENTORY MANAGEMENT
The following are the tools and techniques commonly applied for inventory
management and control.
1. Economic Order Quantity (EOQ)
2. Setting up of various stock levels
3. ABC Analysis
4. Perpetual Inventory System
5. JIT Control System
6. Inventory Turnover System
7. VED Analysis
8. Ageing Schedule
INVENTORY TURNOVER RATIO
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 111
Inventory turnover ratio is also known as stock velocity. Every firm has to
maintain a certain level of inventory of finished goods so as to be able to
meet the requirement of the business. But the level of inventory should b
neither be too high nor too low.
ITR= COSTOF SALESAVERAGE INVENTORY
INVENTORY CONVERSION PERIOD
Inventory conversion period is the average time taken for clearing the
stocks. This period is calculated by dividing the number of days by
inventory turnover.
ICP= 365INVENTORY TURNOVER RATIO
TABLE: 4.12
TABLE SHOWING INVENTORY TURNOVER RATIO AT
KS & DL
NAME OF THE
PRODUCTS
COST OF
SALES
AVERAGE
INVENTORY
INVENTORY
TURNOVER
RATIO
Soaps 2005805380 229045938 8.75
Detergents 72834174 14595203 4.99
Sandalwood oil 7284905 1128806 6.45
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 112
Agarbathies 90072105 7105748 12.67
Talcum powder 64846844 1251567 51.81
Coconut oil 43669728 2296527 19.01
Others 26719661 2560380 10.43
GRAPH: 4.12
GRAPH SHOWING INVENTORY TURNOVER RATIO
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 113
Soaps Detergents Sandalwood oil
Agarbathies Talcum powder
Coconut oil Others0
10
20
30
40
50
60
8.75
4.996.45
12.67
51.81
19.01
10.43
INVENTORY TURNOVER RATIO
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 114
From the analysis of the above table 4.12, the inventory turnover ratio of the
company for the year 2011-2012 of the product i.e. soaps it was 8.75 times,
detergents it was 4.99 times, sandalwood oil it was 6.45 times, agarbathies it
was 12.67 times, talcum powder it was 51.81 times, coconut oil it was 19.01
times and others 10.43 times.
The above graph shows that the turnover of talcum powder is more when
compared to that of all other inventory and the turnover of detergents is less
when compared to others.
TABLE: 4.13
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 115
TABLE SHOWING INVENTORY TURNOVER
CONVERSION IN NUMBER OF DAYS FOR THE PERIOD
2011-2012 AT KS & DL
NAME OF THE
PRODUCTS
360/365
DAYS
INVENTORY
TURNOVER
RATIOS
INVENTORY
CONVERSION
PERIOD
Soaps 365 8.75 41.71
Detergents 365 4.99 73.14
Sandalwood oil 365 6.45 56.58
Agarbathies 365 12.67 28.80
Talcum powder 365 51.81 7.04
Coconut oil 365 19.01 19.2
Others 365 10.43 34.99
GRAPH: 4.13
GRAPH SHOWING INVENTORY CONVERSION PERIOD
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 116
Soaps Detergents Sandalwood oil
Agarbathies Talcum powder
Coconut oil Others
41.71
73.14
56.58
28.8
7.04
19.2
34.99
INVENTORY CONVERSION PERIODINVENTORY CONVERSION PERIOD
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 117
The above table shows the inventory conversion period of 2011-2012. In the
above year the various products like soaps, detergents, sandalwood oil,
agarbathies, talcum powder, coconut oil and other products. The inventory
conversion period of talcum powder is more in the company. The company
requires much of talcum powder for every 7.04days when compared to other
inventory. The company requires less of detergents for every 73.14days
when compared to others.
TABLE: 4.14
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 118
TABLE SHOWING INVENTORY TURNOVER RATIO FOR
THE PERIOD OF 2012-2013 AT KS & DL
NAME OF THE
PRODUCTS
COST OF
SALES
AVERAGE
INVENTORY
INVENTORY
TURNOVER
RATIO
Soaps 2490291162 190702907 13.05
Detergents 7642402 9180562 0.83
Sandalwood oil 10691327 13951224 0.76
Agarbathies 122972481 7965309 15.53
Talcum powder 72481357 10686469 6.78
Coconut oil 58065327 2609707 22.24
Others 31388762 1409742 22.26
GRAPH: 4.14
GRAPH SHOWING INVENTORY TURNOVER RATIO
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 119
Soaps Detergents Sandalwood oil
Agarbathies Talcum powder
Coconut oil Others
13.05
0.8300000000000010.760000000000003
15.53
6.78
22.24 22.26
INVENTORY TURNOVER RATIOINVENTORY TURNOVER RATIO
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 120
From the analysis of the above table 4.14, the inventory turnover ratio of the
company for the year 2011-2012 of the product i.e. soaps it was 13.05 times,
detergents it was 0.83 times, sandalwood oil it was 0.76 times, agarbathies it
was 15.53 times, talcum powder it was 6.78 times, coconut oil it was 22.24
times and others 22.26 times.
The above graph shows that the turnover of other products is more when
compared to all other inventory and the turnover of sandalwood oil is less
when compared to other inventory.
TABLE: 4.15
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 121
TABLE SHOWING INVENTORY TURNOVER
CONVERSION IN NUMBER OF DAYS FOR THE PERIOD
2012-2013 AT KS & DL
NAME OF
THE
PRODUCTS
360/365
DAYS
INVENTORY
TUNOVER
RATIO
AVERAGE
CONVERSIO
N PERIOD
Soaps 365 13.05 27.96
Detergents 365 0.83 439.75
Sandalwood oil 365 0.76 480.26
Agarbathies 365 15.53 23.5
Taclum powder 365 6.78 53.83
Cocount oil 365 22.24 16.41
Others 365 22.26 16.39
GRAPH: 4.15
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 122
GRAPH SHOWING INVENTORY TURNOVER
CONVERSION PERIOD
Soaps Detergents Sandalwood oil
Agarbathies Taclum powder
Cocount oil Others
27.96
439.75
480.26
23.5
53.83
16.41 16.39
INVENTORY CONVERSION PERIODINVENTORY CONVERSION PERIOD
ANALYSIS AND INTERPRETATION
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 123
The above table shows the inventory conversion period of 2012-2013. In the
above year the various products like soaps it is 27.96 days, detergents it is
439.75 days, sandalwood oil it is 480.26days, agarbathies it is 23.5days,
talcum powder it is 53.83days, coconut oil it is 16.41days and other products
it is 16.39days.
The inventory conversion period of sandalwood oil is more when compared
to other products.
CHAPTER 4 : DATA ANALYSIS AND INTERPRETATION Page 124