India has emerged today as the largest producer of milk in the world. This has been achieved through “operation flood” one of the world’s largest dairy development programmes, which created strong linkages between the rural producers and urban consumers. The Indian dairy sector contributes a large share in the agriculture at Gross Domestic Product (GDP). The private sector companies including multi-nationals were allowed to set up milk processing and product manufacturing plants. The basic philosophy underlying delicensing was to encourage the competition in procurement and marketing of milk, thus increasing value for both producers and consumers. Now-a-days, Indian dairy industry will have to face the world dairy markets At the time in changing scenario Gujarat State is undergoing considerable modernization with latest technology. The present study deals with performance appraisal of co-operative dairy industry of Gujarat State which are engaged in processing and selling of milk and milk products. It will be right to study and analyse the performance of the district co-operative milk unions of Gujarat and to suggest measure to cost control and improve their profitability. For these purpose nine leading co-operative dairy units are selected which are associated with GCMMF. For analyzing the performance of dairy units of Gujarat state, the data related to all the nine district co-operative dairy units for the past ten years viz. 1993-94 to 2002-03 have been collected and various techniques of measuring performance like