AMUL Distributor Evaluation \"The problem with the trade in our country is that they operate purely on a capital turnover mentality\Mr. Pani felt that the distributors were, by and large, quite effective in distributing the company's products and enhancing the image of the company. However, he felt that some of the distributors were likely to extend their business beyond their resources which could create problems for the dealers as well as the company. Similarly, he also felt that some of the distributors were not utilising their resources in the optimum level. \"Some of the distributors are prone to over-trade and others are likely to undertrade on their capital\Exhibit-1 Quarterly Statement of Sri Enterprises (All Figures in 000's) Main Line New Line Overall* Profitability Sales 142 188 500 COGS 137.6 178.6 474 Gross Profit 4.4 9.4 26 Expenses Direct Selling 3.4 4.5 12 Office Expenses Trave 0.5 3.8 7.6 Interest Net Profit 0.5 1.1 6.4 Working Capital Employed Own 5 26 40 Borrowed Bank 4 30 60 Other Sources 4 34 67 Total Working Capital 13 90 167 Average Inventroy 7 39 Average Receivables 6 31 *Including the business of companies other than AMUL handled by the distributor Exhibit-2 Quarterly Statement of Kanahaiya Enterprises (All Figures in 000's) Main Line New Line Overall* Profitability Sales 221 278 820 COGS 214.1 266.9 786 Gross Profit 6.9 11.1 34 Expenses Direct Selling 4.2 5.3 15.5 Office Expenses Trave 2.2 4.2 12.7 Interest Net Profit 0.5 1.6 5.8 Working Capital Employed Own 9 16 58 Borrowed Bank 15 32 92 This study source was downloaded by 100000838237960 from CourseHero.com on 09-16-2022 13:18:26 GMT -05:00 https://www.coursehero.com/file/97983592/AMUL-Case-1pdf/Other Sources 22 38 120 Total Working Capita 16 86 270 Average Inventory 24 61 Average Receivables 25 Exhibit-3 Desirable Standards of Performance (Annual Basis) Main Line New Line Overall* Turnover ratio (Sales/Working Capital) 25 10 Gross Profit/Sales 3% 5% Operating Expenses/Sales 2% 3% Return on Own Capital (Net Profit/Owner's Capital) 30% 30% 40% Ratio of Own/Total capital Employed (minimum) 20% 20% 20% Average Stock Leve 10 Days 20 Days Average Credit to Retailers 5 Days 15 Days Prof This study source was downloaded by 100000838237960 from CourseHero.com on 09-16-2022 13:18:26 GMT -05:00 https://www.coursehero.com/file/97983592/AMUL-Case-1pdf/