Thursday, October 26, 2006

Management’s most important job is to make wise choices in allocating its resources

If one were to do a sector-wise bifurcation, the FMCG companies rule the roost. GCPL tops the list, followed by Nestle India. Hindustan Lever Limited and Colgate Palmolive are neck-to-neck with each other on RoA. While both the companies have a 3-year average ROA of 0.46, HLL scores over Colgate in the FY 2006. HLL has a RoA of 0.59 for FY 2006, while Colgate Palmolive generated Rs.49 for every Rs.100 invested in assets.

Management’s most important job is to make wise choices in allocating its resources. Anybody can make a profit by throwing a ton of money at a problem, but very few managers excel at making large profits with little investment.

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Source:- IIPM Editorial

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