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    SM - HUL Financials

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    AAYUSH SHARMA 1927501
    This document analyzes the financial performance of HUL from 2020 to 2017. It provides key financial ratios like current ratio, debt equity ratio, times interest earned, inventory turnover, and profit margins. The analysis shows that HUL has adequate current assets, assets are more funded by debt, effective cost control, solid financial performance, increasing profits, and high earnings. The document recommends integration and diversification strategies. Integration allows control over distributors and suppliers through horizontal integration. Diversification suggests related diversification in health/beauty and unrelated in food due to revenue share.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    SM - HUL Financials

    Uploaded by

    AAYUSH SHARMA 1927501
    41 views7 pages
    This document analyzes the financial performance of HUL from 2020 to 2017. It provides key financial ratios like current ratio, debt equity ratio, times interest earned, inventory turnover, and profit margins. The analysis shows that HUL has adequate current assets, assets are more funded by debt, effective cost control, solid financial performance, increasing profits, and high earnings. The document recommends integration and diversification strategies. Integration allows control over distributors and suppliers through horizontal integration. Diversification suggests related diversification in health/beauty and unrelated in food due to revenue share.

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    SM_HUL Financials

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    This document analyzes the financial performance of HUL from 2020 to 2017. It provides key financial ratios like current ratio, debt equity ratio, times interest earned, inventory turnover, and profit margins. The analysis shows that HUL has adequate current assets, assets are more funded by debt, effective cost control, solid financial performance, increasing profits, and high earnings. The document recommends integration and diversification strategies. Integration allows control over distributors and suppliers through horizontal integration. Diversification suggests related diversification in health/beauty and unrelated in food due to revenue share.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    41 views7 pages

    SM - HUL Financials

    Uploaded by

    AAYUSH SHARMA 1927501
    This document analyzes the financial performance of HUL from 2020 to 2017. It provides key financial ratios like current ratio, debt equity ratio, times interest earned, inventory turnover, and profit margins. The analysis shows that HUL has adequate current assets, assets are more funded by debt, effective cost control, solid financial performance, increasing profits, and high earnings. The document recommends integration and diversification strategies. Integration allows control over distributors and suppliers through horizontal integration. Diversification suggests related diversification in health/beauty and unrelated in food due to revenue share.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    Strategy Management

    Aayush Sharma – 1927501


    Arun S - 1927505
    Neshanth - 1927561
    Suganesh S - 1927623
    HUL
    2020 - 2019 2019 - 2018 2018 - 2017

    Current Ratio 1.3 1.4 1.3


    Quick Ratio 0.83 0.73 0.68
    Debt Equity Ratio 1.4 1.3 1.4
    Times Interest Earned 88.63 313.46 363.65
    Inventory Turnover 15.1 15.8 14.7
    Fixed Asset Turnover (No. of Times) 7.6 8 6.9
    Total Assets Turnover 3.13 2.679 3.166
    Gross Profit Margin 22.3 21.22 19.69
    Operating Profit Margin 24.75 22.59 21.07
    Net Profit Margin 17.6 16 15.1
    ROA - Return on Total Assets 37.1 35.38 32.69
    EPS 31.3 27.8 24.2
    Price Earnings Ratio 70.57
    DPS 34.5 22 20
    Annual % Gowth in Gross Sales 1.6 8.78  
    Net Income 25.1 22.9 21
    Inference

    • Current ratio computed is greater than 1, it means that the company has adequate
    current assets to settle its current liabilities.

    • Debt to equity ratio is greater that 1 for 3 years, the company’s assets are more
    funded by the debt.

    • High operating profits resulted that the company has effective control of costs, or that
    sales are increasing faster than operating costs.

    •  Increasing ROA shows that the company has a solid performance as far as finance
    and operation of the company is concerned and earning more money on less
    investment.
    Inference (Contd)

    • Gross profit has been increasing year by year, it indicates HUL efficiently uses labor
    and supplies in the production process

    • Higher EPS shows a sign of better earnings, strong financial position and therefore
    shows reliable for the investors to invest in the company.

    • Increased level of DPS is considered to be a positive signal as it shows that company


    has more confidence in its future earnings.

    • Net Income above 20% which makes them more advantage over their competitor
    and protect themselves during hard times.
    Strategies

    Recommended strategies

    • Diversification strategy
    • Integration strategy

    As the company performance is good, defensive strategy and intensive strategy is not
    preferred.
    Integration:

    Integration Strategy also called as Management Control Strategy

    Integration strategies allows a firm to gain control over distributors, suppliers and
    competitors.

    Horizontal integration: since, the increased in last year sales in very less at 1.6 %, so only
    way to increase the sales would be to go for HI

    Not vertical integration, because HUL’s profit margin is increasing on you. These shows
    the costs are under control
    Diversification:

    Diversification strategy allows a firm to enter additional line of business that are
    different from current products, services and markets.

    Related and unrelated diversification,

    Related diversification in health and beauty care because the 45% revenue share is from
    this category

    Unrelated diversification in food and refreshments as this segment only has 19%
    revenue share

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