Research Project Synopsis

Name Amisha Patel

USN

Elective

Date of Submission
 Title
 Assessing the Financial Performance of Nestle India Limited: An In-Depth Analysis of
Financial Statements

 Problem Statement (200 words)

 Introduction:
In the fast-paced and competitive world of fast-moving consumer goods (FMCG),
financial performance plays a critical role in determining a company's success and
sustainability. Nestle India LTD, a subsidiary of the global FMCG giant Nestle, has
been a prominent player in the Indian market for decades. However, the intense
competition and evolving market dynamics warrant a comprehensive analysis of
Nestle India LTD's financial performance to understand its current position and
future prospects.

 Problem Statement:
The problem statement is: "How has Nestle India LTD's financial performance
changed over the past few years, and what are the key drivers of its financial success
or challenges?"

 Specialized Niche:
The specialized niche within which this research will be conducted is the financial
analysis of FMCG companies in India, with a specific focus on Nestle India
Limited's financial performance evaluation using financial statements.

 Objectives of the Research (2 or more objectives)

 1. To evaluate the financial performance of Nestle India LTD using financial
statements, analyzing key performance indicators such as revenue growth,
profitability, efficiency, and solvency.

 2. To contribute to the existing body of knowledge on financial performance analysis

in the FMCG industry, providing insights for investors, analysts, and other
stakeholders.

 Significance of the Project:

 This research project is significant because it:
- Provides a comprehensive analysis of Nestle India LTD's financial performance,
which can inform investment decisions and strategic planning.
- Contributes to the development of a framework for financial performance analysis
in the FMCG industry.
- Enhances understanding of financial statement analysis and its applications in the
industry.

 Final Objective:
This research aims to contribute to the field of financial performance analysis by
providing a comprehensive framework for evaluating the financial health of FMCG
companies in India, thereby enhancing the understanding of financial statement
analysis and its applications in the industry.

 Research Methodology (500 words)

 Overview:
The financial performance of a company provides critical insights into its operational
efficiency, profitability, and overall health. In this research, we aim to assess the
financial performance of Nestle India Limited using a comprehensive analysis of its
financial statements. Nestle India, a prominent player in the FMCG sector, presents an
intriguing case for financial evaluation due to its long-standing presence and
significant market influence in India. This methodology outlines the systematic
approach adopted to conduct an in-depth analysis of the company’s financial health
over the past few years. The study is designed to identify trends, evaluate financial
ratios, and understand the key drivers of the company’s financial performance.

 Type of Research:
This study is both descriptive and empirical in nature:
 Descriptive Research:
 The primary goal of descriptive research is to provide a detailed description of
Nestle India’s financial performance. This involves examining the company’s
financial statements to narrate the state of its financial health, key financial
metrics, and trends over the specified period.
 Descriptive research helps in presenting a clear picture of how Nestle India has
performed financially in recent years, providing a foundation for deeper
analysis and interpretation.

 Empirical Research:
  The study is empirical as it relies on verifiable and objective data from Nestle
India’s financial statements. The analysis is based on actual data collected
from reliable sources, allowing for conclusions to be drawn from observable
and measurable evidence.
 By examining the company’s financial records, the research evaluates real-
world financial performance, ensuring that the findings are grounded in factual
information.

 Data Collection Methods:

To conduct a thorough and accurate analysis, this research employs a combination of
primary and secondary data collection methods:

 Primary Data Collection:

Financial Statements: The core primary data for this research includes the financial
statements of Nestle India Limited, specifically the Balance Sheet, Income Statement,
and Cash Flow Statement. These documents provide detailed insights into the
company’s financial position, performance, and cash flows over the past five years.
Annual Reports: Nestle India’s annual reports are critical as they offer not only the
financial statements but also management’s commentary on performance, strategic
directions, and significant events impacting the company. These reports help
contextualize the raw financial data within the broader operational and strategic
landscape.
Investor Presentations: These presentations often highlight key financial metrics,
business performance, and future outlook, providing a condensed and focused view of
the company’s financial health and strategic priorities.

 Secondary Data Collection:

Industry Reports: Reports and research studies on the FMCG sector in India are
essential to understand the competitive and market dynamics that influence Nestle
India’s financial performance. These reports provide benchmarking data and industry
averages for a comparative analysis.

 Sampling:
 Since the focus of the study is on a single company, Nestle India Limited, no sampling
technique is required. The analysis is comprehensive and covers the entire financial
data available for the company over the chosen period (last five years).
 Data Collection Tools:
 Financial Statements and Annual Reports: The primary sources for collecting financial
data.
 Online Databases and Financial Software: Tools like Bloomberg and Thomson
Reuters for accessing detailed financial metrics and market data.
 News Articles and Research Studies: Sources for contextual and qualitative
information.
 Ethical Considerations:
  The study exclusively uses publicly available data and information, ensuring that there
is no breach of confidentiality or use of sensitive information.
 All data sources are properly cited and acknowledged, adhering to academic and
research ethics.
 The analysis is conducted objectively and transparently, with conclusions drawn from
verifiable evidence.

 Limitation (200 words)

 This research study, "Assessing the Financial Performance of Nestle India Limited:
An In-Depth Analysis of Financial Statements", has several limitations that are
important to acknowledge.
 Firstly, the study only focuses on the financial performance of Nestle India Limited
and does not consider other factors such as operational efficiency, marketing
strategies, and organizational culture.
 Secondly, the study relies solely on financial statements and annual reports, and does
not consider other sources of data such as industry reports, market research, and
customer feedback.
 Thirdly, the study only analyzes the financial performance of Nestle India Limited
over a period of five years, and does not consider the company's historical
performance or future prospects.
 Fourthly, the study does not compare the financial performance of Nestle India
Limited with its competitors or industry benchmarks.
 Lastly, the study does not consider the impact of external factors such as economic
downturns, regulatory changes, and global events on the financial performance of
Nestle India Limited.
 By acknowledging these limitations, this study recognizes that there are aspects of
the problem that will not be addressed, and provides a clear scope for future research
studies to build upon.
 Provides an understanding of the subject knowledge by specifying aspects of the
problem that will not be addressed by this research study.
 Work Plan (Week 1 to Week 8)
 Provide an outline of planned research tasks that will be conducted during eight
weeks of the research project.

Week No. Activities Completed

a) Research Design and Literature Review

Week 1 b) Define research objectives and scope
c) Identify research gaps and develop a research
framework
a) Data Collection
Week 2 b) Collect financial statements and annual reports of Nestle
India Limited
c) Collect news articles and publications on Nestle India
Limited's financial performance
a) Clean and preprocess financial data
Week 3 b) Remove missing or irrelevant data
c) Normalize financial data for analysis
a) Financial Ratio Analysis
Week 4 b) Calculate financial ratios (liquidity, profitability,
efficiency, solvency)
c) Analyze and interpret financial ratios
a) Trend Analysis and Comparison
Week 5 b) Analyze trends in financial performance over five years
c) Compare financial performance with industry averages
and benchmarks
a) Data Analysis and Interpretation
Week 6 b) Analyze financial data using statistical tools (SPSS)
c) Interpret results and identify key findings
a)
Week 7 b)
c)
a)
Week 8 b)
c)