FINANCIAL MANAGEMENT

PRESENTATION

HINDUSTAN UNILEVER LIMITED

HINDUSTAN UNILEVER LIMITED (HUL)

HINDUSTAN UNILEVER LIMITED (HUL) ☆ 85 years of heritage in India

Indian consumer good company ☆ Operates in 190 countries
Parent – Unilever (Unilever has 61.9% shareholding ☆ 44 brands spanning 14 distinct categories
in HUL) ☆ Employees – 21000
☆ Sales of INR 45,311 crore (Financial Year
Founded in 2020-21)
1933 ☆ Forbes rates HUL as the most innovative
Headquarter company in India and #8 globally
Mumbai, India

Chairman and Managing director

▪︎Working with integrity
Sanjiv Mehta
▪︎Living by code
▪︎Partnering responsibly
FINANCIAL RATIOS
HUL FINANCIAL RATIOS FOR FY 17 - 18

⊳ Current Ratio = Current Assets / Current Liabilities

= 11139 / 8638 = 1.2
Quick Ratio = Current Assets – Inventories / Current Liabilities
= 11139 - 2359 / 8638 = 1.02
⊳ Debt Equity Ratio = Total Liabilities / Total Equity
= 10074 / 7075 = 1.42
⊳ Receivable Turnover Ratio = Revenue from sales / Average Account Receivable
= 34619 / 1037.5 = 33.36
⊳ Net Profit = Total Revenue – Total Expense
= 35094 – 27747 = 7347
HUL FINANCIAL RATIOS FOR FY 18 - 19

⊳ Current Ratio = Current Assets / Current Liabilities

= 11374 / 8353 = 1.36
⊳ Quick Ratio = Current Assets – Inventories / Current Liabilities
= 11374 – 2422 / 8353 = 1.07
⊳ Debt Equity Ratio = Total Liabilities / Total Equity
= 10206 / 7659 = 1.33
⊳ Receivable Turnover Ratio = Revenue from sales / Average Account Receivable
= 38224 / 1410 = 27.11
⊳ Net Profit = Total Revenue – Total Expenses
= 38888 - 30139 = 8749
HUL FINANCIAL RATIOS FOR FY 19- 20

⊳ Current Ratio = Current Assets / Current Liabilities

= 11908 / 9104 = 1.31
⊳ Quick Ratio = Current Assets – Inventories / Current Liabilities
= 11908 - 2636 / 9104 = 1.02
⊳ Debt Equity Ratio = Total Liabilities / Total Equity
= 11571 8031 = 1.44
⊳ Receivable Turnover Ratio = Revenue from sales / Average Account Receivable
= 38273 / 1359.5 = 28.15
⊳ Net Profit = Total Revenue – Total Expenses
= 39518 - 30229 = 9289
 INTERPRETATION
Current Ratio

⊳ HUL current ratio has been Current Ratio

more volatile, jumping 1.4

1.36
from 1.2 to 1.36 in a single 1.35

year, which could indicate 1.3

1.31

increased operational risk 1.25

and likely drag on the 1.2 1.2
company’s value.
1.15

1.1
2017-18 2018-19 2019-20
Quick Ratio

1.08
Quick Ratio ⊳ The quick ratio reveals that the
1.07 1.07
liquid assets of the company are
1.06
1.05 just about sufficient to cover the
1.04 current liabilities and that is not a
1.03
1.02 1.02 1.02
very comfortable scenario. This
1.01 finer aspect of the company’s
1
liquidity position becomes clear
0.99
2017-18 2018-19 2019-20 only when one looks at the quick
ratio.
 Debt Equity Ratio

⊳ A higher debt-equity ratio indicates

Debt Equity Ratio
a levered firm, which is quite 1.46
1.44 1.44
preferable for a company that is 1.42 1.42
stable with significant cash flow 1.4
1.38
generation, but not preferable when 1.36
1.34
a company is in decline. 1.33
1.32
Conversely, a lower ratio indicates 1.3
1.28
a firm less levered and closer to
1.26
2017-18 2018-19 2019-20
being fully equity financed. The
appropriate debt to equity ratio
varies by industry.
Receivables Turnover Ratio

⊳ HUL collected its average accounts

Receivables Turnover Ratios receivable approximately 28.15 times over
40
35 the fiscal year ended 2019-20.
33.36
30
28.15 ⊳ A company could also determine the
27.11
25 average duration of accounts receivable or
20
the number of days it takes to collect them
15
during the year. In our example above, we
10
would divide 365 by 28.15 to arrive at the
5
average duration. The average accounts
0
2017-18 2018-19 2019-20 receivable turnover in days would be 365 /
28.15, which is 12.96 days.
 Net Profit

Net Profits
⊳ Net profit helps Investors,
10000
shareholders and business owners 9000 8749
9289
8000
to review the firm’s net profit 7000 7347
6000
margin to analyze its growth 5000
trends effectively. And also help 4000
3000
them to plan sales. 2000
1000
0
2017-18 2018-19 2019-20
THANK YOU
12