A Comparative Study of Cash Flow Performance of Selected Mid-Cap FMCG Companies in India

The study has analysed and compared the cash flow performance of selected mid-cap FMCG firms in India, namely Dabur India Ltd., Marico Ltd. and Godrej Consumer Products Ltd. during the study period. The analysis was based on the elements of cash flow and cash flow ratios, supported by statistical measures such as mean, standard deviation, and coefficient of variation. The results demonstrate that all the three organisations have positive operating cash flows which suggest good operational efficiency and capacity to generate cash from their core business operations. There are substantial differences with respect to the efficiency, consistency and stability of cash flow management. Dabur India Ltd. has a healthy and stable cash flow generation, supported by consistent operating cash flows, judicious investment activities, and effective utilisation of assets. Decreased variability of key measures is a reflection of sound financial discipline and effective cash management practices. Marico Ltd. has good liquidity and consistent performance especially in terms of its operating cash flow ratio and asset efficiency. The company, although marginally lower in performance than Dabur in some areas, shows a good level of consistency and is a reliable performer among the selected companies. The cash flow margins of Godrej Consumer Products Ltd. are higher, but the cash flow components and ratio analysis vary significantly. Higher variability means inconsistent performance, so strong cash generation in some periods doesn’t translate across the board. The research comprehensively indicates that the consistency and stability of cash flow performance are as important as the amount of cash produced. Lower variation in cash flow ratios are generally indicative of more stable financial performance and better operational management in organisations. In this regard, it is recommended that enterprises aim for stable and predictable operating cash flows, pursue a balanced investment strategy, and stimulate efficiency in the use of assets in order to improve long-term financial sustainability. A greater focus on cash flow-based performance evaluation, coupled with traditional profitability metrics, can lead to better financial decision making. Finally, it is found that Dabur India Ltd. is the most stable and consistent performer followed by Marico Ltd. On the other hand, it is found that Godrej Consumer Products Ltd. is performing erratically. The study highlights the importance of cash flow analysis as a key tool for evaluating financial performance and sustainability in the FMCG industry.

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