A STUDY OF FINANCIAL PERFORMANCE INDICATORS OF SELECTED DAIRY COMPANIES IN GUJARAT

Abstract

The dairy industry plays a crucial role in Gujarat’s economy, with cooperative dairies like Amul, Baroda, and Panchamrut contributing significantly to the state’s milk production and processing capabilities. This study aims to analyze the financial performance indicators of selected dairy companies in Gujarat over a five-year period (2018-19 to 2022-23) using key ratios, including Return on Assets (ROA), Return on Capital Employed (ROCE), Asset Turnover Ratio (ATR), Current Ratio, and Quick Ratio. The findings reveal that Amul Dairy consistently outperforms its peers in terms of profitability and operational efficiency, as evidenced by higher ROA, ROCE, and ATR values. However, its liquidity position, particularly reflected in the quick ratio, remains significantly below the ideal benchmark, indicating heavy reliance on inventory to meet short-term obligations. Baroda Dairy exhibits weaker profitability and efficiency metrics, though it maintains a relatively stable liquidity position compared to its peers. Panchamrut Dairy demonstrates moderate profitability and asset utilization but shows a steady improvement in liquidity ratios over the years, indicating prudent financial management. The study concludes that while Amul enjoys a dominant position in terms of profitability and operational scale, it needs to strengthen its liquidity management. Baroda Dairy must improve asset utilization and profitability, while Panchamrut Dairy should focus on maintaining its liquidity improvements alongside enhancing efficiency. The findings provide critical insights for cooperative management and policymakers to devise strategies that ensure sustainable growth and financial stability in the dairy sector of Gujarat.