ACCOUNTING FOR MANAGEMENT

PROJECT ON
FINANCIAL STATEMENT ANALYSIS OF
HINDUSTAN UNILEVER LIMITED (HUL)

SUBMITTED TO: DR ROSY KALRA

SUBMITTED BY: GROUP 5
Saumyah Roll # B- 27
Payal

Roll # B- 28

Ruhi

Roll # B- 31

Shobhna

Roll # B- 32

Nikita

Roll # B- 33

Harpreet

Roll # B- 34

Anil

Roll # B- 45

Saikat

Roll # B- 50

Ishween

Roll # B- 51

Amity Business School

Amity University Uttar Pradesh

TABLE OF CONTENTS

Topics
Acknowledgement
Chapter-1

Introduction to HUL
Chapter-2
Profit and Loss Account of HUL
Chapter-3

Balance Sheet and Trend Analysis of HUL

Chapter-4
Common Size Balance Sheet of HUL
Chapter -5
Comparative Statements
Chapter-6
Cash Flow Statement
Chapter -7
Ratio Analysis
Chapter -8
CONCLUSION

ACKNOWLEDGEMENT

We would like to take this opportunity to extend our gratitude to our esteemed faculty

Dr

. Rosy Kalra , (Faculty at ABS , MBA-HR) for extending her full support to us throughout this project.
Our heartiest thanks to her for giving us the guidance and support to make this project possible.

We

feel privileged to offer our sincere thanks and deep sense of gratitude to our

respected

A.D.G Sir - Dr. Sanjay Srivastava , for providing us an environment that helped us in the completion of this
project.
We are grateful for the co-operation , valuable suggestions and hard work rendered by our group members.
This has been a tremendous learning experience for us.
We regret any inadvertent omissions.

Introduction

INTRODUCTION TO HINDUSTAN UNILEVER LIMITED

(HUL)
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of
over 75 years in India and touches the lives of two out of three Indians.
HUL works to create a better future every day and helps people feel good, look good and get more out of life
with brands and services that are good for them and good for others.
With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes,
deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the Company is a part of the

everyday life of millions of consumers across India. Its portfolio includes leading household brands such as
Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk,
Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit.
The Company has over 15,000 employees and has an annual turnover of Rs.17,523 crores (financial year 2009 2010). HUL is a subsidiary of Unilever, one of the worlds leading suppliers of fast moving consumer goods
with strong local roots in more than 100 countries across the globe with annual sales of about 44 billion in
2011. Unilever has about 52% shareholding in HUL.

VISION AND MISSION STATEMENT OF HUL

THEIR VISION
Unilever products touch the lives of over 2 billion people every day whether that's through feeling great
because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great
cup of tea, satisfying meal or healthy snack.

The four pillars of HULs vision set out the long term direction for the company where they want to go and
how they are going to get there:

They work to create a better future every day

They help people feel good, look good and get more out of life with brands and services that are good
for them and good for others.

They will inspire people to take small everyday actions that can add up to a big difference for the world.

They will develop new ways of doing business with the aim of doubling the size of their company while
reducing their environmental impact.

They have always believed in the power of their brands to improve the quality of peoples lives and in doing the
right thing. As their business grows, so do their responsibilities. They recognise that global challenges such as
climate change concern us all. Considering the wider impact of their actions is embedded in their values and is a
fundamental part of who they are.

MISSION STATEMENT OF HUL

HULs corporate purpose states that to succeed requires "the highest standards of corporate behaviour towards
everyone they work with, the communities they touch, and the environment on which they have an impact."

ALWAYS WORKING WITH INTEGRITY

Conducting their operations with integrity and with respect for the many people, organisations and
environments HULs business touches have always been at the heart of their corporate responsibility.

POSITIVE

IMPACT

They aim to make a positive impact in many ways: through their brands, their commercial operations and
relationships, through voluntary contributions, and through the various other ways in which they engage with
society.

CONTINUOUS

COMMITMENT

HUL is also committed to continuously improving the way they manage their environmental impacts and are
working towards their long-term goal of developing a sustainable business.

SETTING

OUT OUR ASPIRATIONS

Their corporate purpose sets out their aspirations in running their business. It's underpinned by their code of
business Principles which describes the operational standards that everyone at Unilever follows, wherever they
are in the world. The code also supports their approach to governance and corporate responsibility.

WORKING

WITH OTHERS

They want to work with suppliers who have values similar to their own and work to the same standards they do.
Their Business partner code, aligned to their own Code of business principles, comprises ten principles covering
business integrity and responsibilities relating to employees, consumers and the environment.

COMPANY STRUCTURE OF HUL

Hindustan Unilever Limited is India's largest Fast Moving Consumer Goods (FMCG) company. It is present in
Home & Personal Care and Foods & Beverages categories. HUL has about 15,000 employees, including over
1400 managers
The fundamental principle determining the organisation structure is to infuse speed and flexibility in decisionmaking and implementation, with empotheyred managers across the companys nationwide operations.
Board of Directors
The Board of Directors as repositories of the corporate powers act as a guardian to the Company as also the
protectors of shareholders interest.

Management Committee
The day-to-day management of affairs of the Company is vested with the Management Committee which is
subjected to the overall superintendence and control of the Board.

INVESTOR RELATIONS OF HUL

Ensuring returns through sustainable growth
The company created history when it was listed in the Bombay, Calcutta, and Madras Stock Exchanges in 1956
and offered 10% of its equity to Indian shareholders. It became the first subsidiary of a foreign company in
India to offer equity to the Indian public. Today, HUL shares are listed on the Bombay Stock Exchange and the
National Stock Exchange.

WHAT

THEY DO
With their portfolio of strong brands, HULs presence across the country, and their long-standing
commitment to shared value creation, they believe they can achieve their most ambitious

goals. They ensure a successful future by adopting good governance practices and embedding
the principle of sustainability in all their business strategies.

WELL-POISED

FOR GROWTH
HULs brands Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Sunsilk, Clinic, Close-up,
Pepsodent, Lakme, Brooke Bond, Kissan, Knorr, Annapurna, Kwality Walls, and many more are
household names across the country and span many categories, such as soaps, detergents,
personal care, tea, coffee, staples, ice-cream and culinary products.
Seven hundred million consumers use HUL brands in India in their daily lives. They hold leading
market positions in most of the categories they operate in. They are market leaders in terms of
value share in eight categories and a strong number two in three others. They have an extensive
distribution network covering 6.3 million retail outlets, including direct reach to over one million
outlets. Their structure is designed to infuse speed and flexibility in decision-making and
implementation, with empowered managers across the companys nationwide operations.

REWARDING

SHAREHOLDERS
At HUL, they believe in creating long term value for their shareholders. HUL has a history of
consistent dividend payment to its shareholders. As on March 31, 2011, HUL had over 3.5 lakh
shareholders, of which more than 3.4 lakh are retail investors.

To mark the completion of the 75th year of their operation in India, HUL, in 2007, declared a
special Platinum Jubilee Dividend to the shareholders at the rate of INR 3 per share. A share buyback scheme, announced in the same year, further strengthened the Earning Per Share (EPS) for

the shares of the Company. For 2009-10, HUL had declared a total dividend of INR 6.5 per share
of INR 1 each.

COMMUNICATION

TO SHAREHOLDERS
Effective communication of information is an essential component of corporate governance. It is
a process of sharing information, ideas, thoughts, opinions and plans to all stakeholders, and
promotes management shareholder relations. HUL regularly interacts with shareholders through
multiple channels of communication, such as the results announcement, annual report, media
releases, company website and other subject specific communications. Quarterly, half-yearly and
annual results are published in leading newspapers. The results are also made available on the
website www.hul.co.in. The website also has vital information related to the company, official
press releases and presentations for analysts.
The Annual General Meeting of Shareholders is an important annual event where the
shareholders of the Company come in direct communication with the Board of Directors and
management. The Board engages with shareholders and answers their queries on varied
subjects whether relating to financials, performance of the Company or otherwise.

Profit and Loss Account of HUL

PROFIT AND LOSS ACCOUNT

Income statement (also referred to as profit and loss statement (P&L), statement of financial performance,
earnings statement, operating statement or statement of operations) is a company's financial statement that
indicates how the revenue (money received from the sale of products and services before expenses are taken
out) is transformed into the net income (the result after all revenues and expenses have been accounted for). It
displays the revenues recognized for a specific period, and the cost and expenses charged against these
revenues, including write-offs (e.g., depreciation and amortization of various assets) and taxes. The purpose of
the income statement is to show managers and investors whether the company made or lost money during the
period being reported.
The important thing to remember about an income statement is that it represents a period of time. This contrasts
with the balance sheet, which represents a single moment in time.
The importance of Profit and Loss account lies in the fact that it provides accounting date which can be used for
some managerial decisions as given below:

Net Result:
It provides information about net profit or net loss earned or incurred by the business during a particular period.
Accounting data for determining efficiency:
Net results provided by the Profit and Loss Account can be compared with the net results of the previous years
and the efficiency of the business can be determined by such inter-period comparison of results.
Control over expenses:
Profit and Loss Account provides information about various kinds of expenses. The expenses of the current year
can be compared with the expenses of the previous year and effective steps can be taken for the control of
expenses, where it becomes necessary.
Future Profit Planning:
Net profit of various years can be taken as basis for future profit-planning. It helps the business in the allocation
of sources and future expansion.

Profit & Loss account of HUL

------------------- in Rs. Cr. ------------------Mar '11

Mar '10

Mar '09

Dec '07

Dec '06

12 mths

12 mths

15 mths

12 mths

12 mths

20,598.8
9
908.98

18,462.34

21,927.23

14,937.88

13,189.70

693.22

1,422.95

1,057.32

945.68

19,689.9
1
439.48

17,769.12

20,504.28

13,880.56

12,244.02

199.73

276.54

428.37

512.60

295.08

19.47

434.33

162.06

129.97

20,424.4
7

17,988.32

21,215.15

14,470.99

12,886.59

10,494.3
3
274.74

9,003.97

11,380.05

7,542.78

6,687.30

244.34

301.37

198.89

180.79

Employee Cost

961.27

936.30

1,152.12

767.81

642.81

Other Manufacturing Expenses

551.25

412.19

297.34

204.10

187.37

4,366.30

3,737.52

3,857.48

2,561.12

2,328.51

672.61

656.57

985.31

691.49

541.52

Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost

Selling and Admin Expenses

Miscellaneous Expenses

Total Expenses

17,320.5
0
Mar '11

14,990.89

17,973.67

11,966.19

10,568.30

Mar '10

Mar '09

Dec '07

Dec '06

12 mths

12 mths

15 mths

12 mths

12 mths

Operating Profit

2,664.49

2,797.70

2,964.94

2,076.43

1,805.69

PBDIT

3,103.97

2,997.43

3,241.48

2,504.80

2,318.29

0.24

6.98

25.32

25.50

10.73

3,103.73

2,990.45

3,216.16

2,479.30

2,307.56

220.83

184.03

195.30

138.36

130.16

2,882.90

2,806.42

3,020.86

2,340.94

2,177.40

-3.06

43.97

48.53

1.67

-0.21

2,879.84

2,850.39

3,069.39

2,342.61

2,177.19

573.87

648.36

572.94

417.14

321.80

Reported Net Profit

2,305.97

2,202.03

2,500.71

1,769.06

1,855.37

Total Value Addition

6,826.17

5,986.92

6,593.62

4,423.41

3,881.00

Equity Dividend

1,410.60

1,417.94

1,634.51

1,976.12

1,325.48

231.36

238.03

277.79

355.50

185.90

21,594.7
2
10.68

21,816.87

21,798.76

21,774.63

22,067.76

10.09

11.47

8.12

8.41

650.00

650.00

750.00

900.00

600.00

12.19

11.84

9.45

6.61

12.34

Interest
PBDT
Depreciation
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax

Corporate Dividend Tax

Per share data (annualised)
Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)

BALANCE SHEET OF HUL

&

TREND ANALYSIS OF HUL

BALANCE SHEET
In financial accounting, a balance sheet or statement of financial position is a summary of the financial
balances of a sole proprietorship, a business partnership or a company. Assets, liabilities and ownership equity
are listed as of a specific date, such as the end of its financial year. A balance sheet is often described as a
"snapshot of a company's financial condition". Of the four basic financial statements, the balance sheet is the
only statement which applies to a single point in time of a business' calendar year.
A standard company balance sheet has three parts: assets, liabilities and ownership equity. The main categories
of assets are usually listed first, and typically in order of liquidity. Assets are followed by the liabilities. The
difference between the assets and the liabilities is known as equity or the net assets or the net worth or capital
of the company and according to the accounting equation, net worth must equal assets minus liabilities.
The balance sheet assists external users of financial statements in assessing a company's liquidity, financial
flexibility, and operating capabilities, as well as in evaluating the earnings performance for the period. Liquidity
describes the amount of time that is expected to elapse until an asset is realized or otherwise converted into cash

or until a liability has to be paid. Financial flexibility is the ability of an enterprise to take effective action to
alter the amounts and timing of cash flows so it can respond to unexpected needs and opportunities. Operating
and performance capabilities refer to the capability and effectiveness of a company related to its major or
ongoing revenue producing activities.

TREND ANALYSIS
The term "trend analysis" refers to the concept of collecting information and attempting to spot a pattern, or trend, in the
information. In some fields of study, the term "trend analysis" has more formally-defined meanings. Although trend
analysis is often used to predict future events.
Trend analysis is by observing the successive phases of the accounting statements, comparing the amount of the related
projects, analyze changes in some indicators of change, on this basis, determine trends, which may occur in the future to
anticipate the results of an analytical method. The use of trend analysis, report users can learn the basic trend of changes
in the project to determine whether or not this is a favorable trend of change, and to predict the future development of
enterprises.
Trend analysis is a method of preparation of financial statements over the years, at least the last 3 years or 5 years, or even
10 years of financial statements are to be tied together in order to observe trends. Observed for several of the financial
statements, more than just look at a report on the financial statements, can learn more information and circumstances, and
facilitate the analysis of trends.
Trend analysis should be calculated using the percentage trend. There are two trends in the percentage of that ratio and
chain set. Fixed ratio is selected as the base period of a year, and then the rest of the year and the base period to calculate
the trends in percentage, this can clearly reflects the project and the base period had not changed much. Chain refers to the
number of projects this year compared to the number of the previous year, while the percentage of the calculated trend.
Because of its previous one as a base, which more clearly illustrates the development of the project the rate of change.
Balance Sheet of HUL

------------------- in Rs. Cr. ------------------Mar '11

Mar '10

Mar '09

Dec '07

Dec '06

12 mths

12 mths

15 mths

12 mths

12 mths

Total Share Capital

215.95

218.17

217.99

217.75

220.68

Equity Share Capital

215.95

218.17

217.99

217.75

220.68

Reserves

2,417.3
0
0.67

2,364.68

1,842.85

1,220.82

2,502.14

0.67

0.67

0.67

0.67

2,633.9
2
0.00

2,583.52

2,061.51

1,439.24

2,723.49

0.00

144.65

25.52

37.13

Unsecured Loans

0.00

0.00

277.30

63.01

35.47

Total Debt

0.00

0.00

421.95

88.53

72.60

2,633.9
2
Mar '11

2,583.52

2,483.46

1,527.77

2,796.09

Mar '10

Mar '09

Dec '07

Dec '06

12 mths

12 mths

15 mths

12 mths

12 mths

3,759.6
2
1,590.4
6

3,581.96

2,881.73

2,669.08

2,462.69

1,419.85

1,274.95

1,146.57

1,061.94

Sources Of Funds

Revaluation Reserves
Networth
Secured Loans

Total Liabilities

Application Of Funds
Gross Block
Less: Accum. Depreciation

Net Block

2,169.1
6
299.08

2,162.11

1,606.78

1,522.51

1,400.75

273.96

472.07

185.64

110.26

1,264.08

332.62

1,440.81

2,522.22

2,179.93

2,528.86

1,953.60

1,547.71

Sundry Debtors

1,260.6
8
2,811.2
6
943.20

678.44

536.89

443.37

440.37

Cash and Bank Balance

281.91

231.37

190.59

200.11

170.80

4,036.3
7
1,099.7
2
1,358.1
Mar '11
0
6,494.1
9
12 mths
0.00

3,089.74

3,256.34

2,597.08

2,158.88

1,068.31

1,196.95

1,083.28

1,150.06

1,660.84
Mar '10

1,586.76

5,818.89

6,040.05

The0.75
TREND VALUES
246.15
shown in the 3rd column
3,681.11
3,555.09
were obtained as follows

Capital Work in Progress

Investments
Inventories

Total Current Assets

Loans and Advances
Fixed Deposits
TREND ANALYSIS OF HUL
Total CA, Loans & Advances
Deffered Credit
Current Liabilities

12 mths
0.00

Contingent Liabilities
Total Debt

6,264.2
1
1,324.9
215.95 8
7,589.1
215.95 9
2,417.30
1,095.0
0.67 0
2,633.9
2,633.92
2
663.00
0.00

Book Value (Rs)

Total Liabilities

12.19
2,633.92

11.84
2,583.52

Mar '11

Mar '10

12 mths

12 mths

Gross Block

3,759.62

3,581.96

104.96

Less: Accum. Depreciation

1,590.46

1,419.85

112.02

Net Block

2,169.16

2,162.11

100.33

Capital Work in Progress

299.08

273.96

109.17

Investments

1,260.68

1,264.08

99.73

Inventories

2,811.26

2,179.93

128.96

Sundry Debtors

943.20

678.44

139.02

Cash and Bank Balance

281.91

231.37

121.84

Total Current Assets

4,036.37

3,089.74

130.64

Loans and Advances

1,099.72

1,068.31

102.94

Fixed Deposits

1,358.10

1,660.84

81.77

Total CA, Loans & Advances

6,494.19

5,818.89

111.61

Current Liabilities

6,264.21

5,493.97

114.02

Provisions

1,324.98

1,441.55

91.91

Total CL & Provisions

7,589.19

6,935.52

109.42

Net Current Assets

-1,095.00

-1,116.63

98.06

Total Assets

2,633.92

2,583.52

101.95

663.00
12.19

468.49
11.84

141.52
102.96

ProvisionsSources Of Funds
Total Share Capital
Total CL & Provisions
Equity Share Capital
Net Current Assets
Reserves
Revaluation Reserves
Total Assets
Networth

5,493.97

TREND
0.00
VALUES IN %
4,440.08

0.00

Amount of3,362.52
2011
4,028.41

X 100
Amount of 2010

1,441.55

1,527.98

218.17
6,935.52
218.17

98.98
5,968.06
98.98

5,302.31

-1,116.63
2,364.68

71.99
102.23

-1,621.20

0.67
2,583.52
2,583.52

100
2,483.46
101.95

1,527.76

2,796.09

6.61

12.34

468.49
0.00

417.26
9.45
101.95

1,273.90

1,429.71

4,792.23
eg Total share
capital=
-1,237.14

215.95
X 100= 98.98
494.46
476.40
218.17

Similarly we found the

%s for the following:

LIABILITIES SIDE:

Application Of Funds

Contingent Liabilities
Book Value (Rs)

0.00

SOURCEs OF FUND :
Total share capital ,
Reserves , Net worth ,
Secured
loans
,
Unsecured loans , Total
debt , Total Liabilities .

TREND
ASSET
SIDE:
ANALYSIS
OF
APPLICATION
OF
HUL
FUNDS : Gross Profit ,
LESS:
Accum.
Trend analysis, calculates
Depreciation
Net Blockthe,
percentage change
for one(or)
account
Working
capital
Capital
workofintime
progress
over a period
of two ,years
Investments
or more.
,Inventories
,
Sundry
Debtors , Cash and bank
balance , Total current
assets
,
Loans
and
advances , Fixed deposits
, Total CA , Loans and
advances
,
Current

INTREPRETATION OF TREND ANALYSIS

The base year trend percentage is always 100.0%. A trend percentage of less than 100.0% means the balance
has decreased below the base year level in that particular year. A trend percentage greater than 100.0% means
the balance in that year has increased over the base year. A negative trend percentage represents a negative
number.

COMMON SIZE BALANCE SHEET OF HUL

COMMON SIZE BALANCE SHEET OF HUL

A common size balance sheet presents not only the standard information contained in a balance sheet, but also a
column that notes the same information as a percentage of the total assets (for asset line items) or as a
percentage of total liabilities and shareholders' equity (for liability or shareholders' equity line items).
It is extremely useful to construct a common size balance sheet that itemizes the results as of the end of multiple
time periods, so that you can construct trend lines to ascertain changes over longer time periods. The common

size balance sheet is also useful for comparing the proportions of assets, liabilities, and equity between different
companies, particularly as part of an industry analysis.
Comparative Balance Sheet of HUL

Mar '11

% of balance
sheet total 11

Mar '10

% of balance
sheet total 10

12 mths
12 mths
Sources Of Funds
Total Share Capital

215.95

8.19

218.17

8.44

Equity Share Capital

215.95

8.19

218.17

8.44

Reserves

2,417.30

91.78

2,364.68

91.53

Networth

2,633.92

100

2,583.52

100

Total Liabilities

2,633.92

100

2,583.52

100

Mar '11

Mar '10

12 mths

12 mths

3,759.62

3,581.96

Less: Accum. Depreciation

Net Block

(1,590.46)

Hence we take
total
liabilities
and total assets as
100 %

(1,419.85)

2,169.16

82.35

2,162.11

83.69

299.08

11.35

273.96

10.60

Investments

1,260.68

47.86

1,264.08

48.93

Inventories

2,811.26

106.73

2,179.93

84.38

Sundry Debtors

943.20

35.81

678.44

26.26

Cash and Bank Balance

281.91

10.70

231.37

8.96

Total Current Assets

4,036.37

153.25

3,089.74

119.60

Loans and Advances

1,099.72

41.75

1,068.31

41.35

Fixed Deposits

1,358.10

51.56

1,660.84

64.29

Total Assets

2,633.92

100

2,583.52

100

Capital Work in Progress

Here we need to
calculate the % of
the
following
items out of 100.

Eg) to calculate
for total share
capital we do:

Application Of Funds
Gross Block

METHOD

215 . 95
X 100
2633 . 92
8.19

Thus we write
8.19 in the
column of %
of balance sheet
therefore total
share capital is
8.19% of 100 %
and so on wedo

COMPARATIVE STATEMENT OF HUL

COMPARATIVE STATEMENT ANALYSIS

Comparative Financial Statement analysis provides information to assess the direction of change in the
business. Financial statements are presented as on a particular date for a particular period. The financial
statement Balance Sheet indicates the financial position as at the end of an accounting period and the financial
statement Income Statement shows the operating and non-operating results for a period. But financial managers
and top management are also interested in knowing whether the business is moving in a favorable or an
unfavorable direction. For this purpose, figures of current year have to be compared with those of the previous
years. In analyzing this way, comparative financial statements are prepared.
Comparative Financial Statement Analysis is also called as Horizontal analysis. The Comparative Financial
Statement provides information about two or more years' figures as well as any increase or decrease from the

previous year's figure and it's percentage of increase or decrease. This kind of analysis helps in identifying the
major improvements and weaknesses. For example, if net income of a particular year has decreased from its
previous year, despite an increase in sales during the year, is a matter of serious concern. Comparative financial
statement analysis in such situations helps to find out where costs have increased which has resulted in lower
net income than the previous year.

The benefits of a comparative statement are varied for a corporation. Because of the uniform format of the
statement, it is a simple process to compare the gross sales of a given product or all products of the
company with the gross sales generated in a previous month, quarter, or year. Comparing generated revenue
from one period to a different period can add another dimension to analyzing the effectiveness of the sales
effort, as the process makes it possible to identify trends such as a drop in revenue in spite of an increase in
units sold.To calculate the Comparative Financial Statement percentage change between two periods:

Calculate the amount of the increase/(decrease) for the period by subtracting the earlier year(2010) from
the later year(2011). If the difference is negative, the change is a decrease and if the difference is
positive, it is an increase.

Divide the change by the earlier year's balance(,i.e., 2010). The result is the percentage change.

2010 is the earlier year so the amount in the 2010 column is subtracted from the amount in the 2011
column.

The percent change is the increase or decrease divided by the earlier amount (20X0 in this example)
times 100. Written as a formula, the percent change is:

If the earliest year is zero or negative, the percent calculated will not be meaningful. N/M is used in the
above table for not meaningful.

Comparative Statement of HUL

Mar '11

Mar '10

12 mths

12 mths

INCREASE
Positive
Balance

DECREASE
Negative
Balance

% of
INCREASE or
DECREASE

215.95

218.17

-2.22

(1.0%)

215.95

218.17

-2.22

(1.0%)

2.2%

Sources Of Funds
Total Share Capital
Equity Share Capital
Reserves
Networth
Total Liabilities

METHOD

2,417.30

2,364.68

52.62

2,583.522010: If THE
50.4 DIFFERENCE
1.9%
SUBTRACT values2,633.92
of 2011 from
SO OBTAINED
IS
2,633.92
2,583.52
50.4
1.9%
NEGATIVE THEN WE PUT THAT AMOUNT IN THE DECREASE COLOUMN AND IF THE
DIFFERENCE OBTAINED IS POSITIVE THEN WE PUT THAT FIGURE IN THE INCREASE
Mar '11
Mar '10
Mar '11
Mar '10
COLOUMN.

EG) 215.95 218.17 = -2.22

12 mths

12 mths

SINCE THE amount obtained is negative thus we put this amount in the DECREASE
COLOUMN.

Application Of Funds
Gross Block

3,759.62

3,581.96

177.66

4.9%

Less: Accum. Depreciation

Further
Net Block

1,419.85
170.61
12% obtained for
on for % 1,590.46
increase or
decreas we
divide the difference
so
each item by the 2,169.16
amount of2,162.11
2010 and multiply
with- 100.
7.05
0.003%

Capital Work in Progress

Investments
Inventories
Sundry Debtors

299.08

273.96

25.12

9.1%

1,260.68

1,264.08

-3.4

2,811.26

2,179.93

631.33

28.96%

943.20

678.44

264.76

39.02%

x 100) = (1.0%)
281.91

231.37

50.54

21.84%

For eg) % decrease of Total Share Capital from 2010 to 2011 is

(-2.22/218.7
Cash and Bank Balance

(0.2%)

Total Current Assets

4,036.37

3,089.74

946.63

30.63%

Loans and Advances

1,099.72

1,068.31

31.41

2.94%

Fixed Deposits

1,358.10

1,660.84

Total CA, Loans & Advances

6,494.19

5,818.89

675.3

11.6%

Current Liabilities

6,264.21

5,493.97

770.24

14%

Provisions

1,324.98

1,441.55

Total CL & Provisions

7,589.19

6,935.52

-1,095.00

-1,116.63

2,633.92

2,583.52

50.4

1.9%

663.00

468.49

194.51

41.5%

12.19

11.84

0.34

2.8%

Net Current Assets

Total Assets
Contingent Liabilities
Book Value (Rs)

-302.74

-116.57
653.67

(18.22%)

(8.0%)
9.4%

-21.63

(1.9%)

CASH FLOW STATEMENT OF HUL

CASH FLOW STATEMENT

Complementing the balance sheet and income statement, the cash flow statement (CFS), a mandatory part of a
company's financial reports since 1987, records the amounts of cash and cash equivalents entering and leaving a
company. The CFS allows investors to understand how a company's operations are running, where its money is
coming from, and how it is being spent.
The cash flow statement is partitioned into three segments, namely: 1) cash flow resulting from operating
activities; 2) cash flow resulting from investing activities;and 3) cash flow resulting from financing activities.
The money coming into the business is called cash inflow, and money going out from the business is called cash
outflow.
Operating activities

Operating activities include the production, sales and delivery of the company's product as well as collecting
payment from its customers. This could include purchasing raw materials, building inventory, advertising, and
shipping the product
Investing activities

Examples of Investing activities are purchase or sale of an asset (assets can be land, building, equipment,
marketable securities, etc.) , loans made to suppliers or received from customers , payments related to mergers
and acquisitions
Financing activities

Financing activities include the inflow of cash from investors such as banks and shareholders, as well as the
outflow of cash to shareholders as dividends as the company generates income. Other activities which impact
the long-term liabilities and equity of the company are also listed in the financing activities section of the cash
flow statement.
A company can use a cash flow statement to predict future cash flow, which helps with matters in budgeting.
For investors, the cash flow reflects a company's financial health: basically, the more cash available for business
operations, the better. However, this is not a hard and fast rule. Sometimes a negative cash flow results from a
company's
growth
strategy
in
the
form
of
expanding
its
operations.
By adjusting earnings, revenues, assets and liabilities, the investor can get a very clear picture of what some
people consider the most important aspect of a company: how much cash it generates and, particularly, how
much of that cash stems from core operations.

Cash Flow Statement

For the year ended 31st March, 2011

A Cash Flow from

Operating Activities :
Profit before taxation
and exceptional /
extra-ordinary items
Adjustments for :
Depreciation
Surplus on disposal of
investment(net)
Deficit on disposal of
fixed assets(net)
Interest income
Dividend income
Interest expenditure

Operating Profit
before Working
Capital Changes
Adjustments for :
Trade and Other
Receivables
Inventories
Trade Payables and
Other Liabilities
Cash generated from
operations
Taxes paid (net of
refunds)
Cash flow before
exceptional /
extraordinary items
Exceptional :
Compensation paid
under Voluntary
Separation Schemes
(previous year
includes amount paid
for an industrial
dispute relating to a
closed factory)
Transitional cost due
to consolidation of
offices / factories
Amounts paid for
other restructuring
activities
Net Cash from

For the year

ended
31st March,
2011

For the year

ended
31st March,
2010

2,730.18

2,707.07

220.83
(60.21)

184.03
(19.54)

5.93

7.19

(115.68)
(76.06)
0.24
(24.95)

(93.91)
(34.65)
6.98
50.10

2,705.23

2757.17

(319.06)

(7.47)

(631.33)

348.92

796.96

1,096.14
(153.43)
2,551.80

1,437.59
4,194.76

(652.41)

(661.74)

1,899.39

3,533.02

(0.86)

(84.97)

(6.65)

(7.96)

(0.38)

1,890.57

3,441.02

Operating
Activities ..................
........A
B Cash Flow from
Investing Activities :
Purchase of fixed
assets

(309.65)

(570.08)

10.46

13.27

(15,658.70)

(6,128.94)

Investment in
subsidiary Company

(10.10)

(5.15)

Advances to
subsidiaries
Advances repaid by
subsidiaries

(18.30)

(9.65)

1.00

Sale of investments

15,743.54

5,207.15

97.00

96.55

Dividend received
Cash flow before
exceptional /
extraordinary items
Exceptional :
Consideration
received on disposal
of unused land and
building (including
residential
properties)

76.06
(69.69)

34.65
(1,361.20)

160.41

100.77

Consideration
received on disposal
of a long term
investment

44.27

91.13

Consideration
received on sale of a
business to a
subsidiary (including
non-compete fees)

3.30

Consideration
received on disposal
of a subsidiary
Net Cash from
Investing
Activities ..................
..........B

19.89

134.99

(1,146.11)

(1,420.03)

(1,523.27)

Sale of fixed assets

Purchase of
investments

Interest received

C Cash Flow from

Financing Activities :
Dividends paid

Tax on distributed
profits

(235.58)

(259.39)

(0.24)

(6.98)

Bank overdrafts, etc

(net)

(49.37)

Proceeds from share

allotment under
Employee Stock
Option Scheme

6.51

31.27

Payment towards
Buyback of Shares

(625.30)

Repayments of
borrowings
Exceptional :
Costs incurred for
Share buyback
activity

(372.58)

(3.11)

(2,277.75)

(2,180.32)

Net Increase in Cash

and Cash
equivalents.......
(A+B+C)

(252.19)

114.59

Cash and Cash

equivalents as at 1st
April (Opening
Balance)

1,892.21

1,777.35

Cash and Cash

equivalents as at
period end (Closing
Balance)

1,640.01

1,892.21

Cash on hand

1.02

1.06

Cheques on hand

1.35

49.11

Balance with
Scheduled banks

1,637.64

1,842.04

1,640.01

1,892.21

Interest paid

Net Cash used in

Financing
Activities...................
.....C

Cash and Cash

equivalents comprise:

RATIO ANALYSIS OF HUL

FINANCIAL RATIOS

A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements.
Ratios are calculated from current year numbers and are then compared to previous years, other companies, the
industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used
by proponents of fundamental analysis.
Financial Ratios can be divided into five categories:

Liquidity (Solvency) ratios

Financial Leverage (Debt) ratios

Asset Efficiency (Management or turnover) ratios

Profitability ratios

Market value ratios

The liquidity or solvency ratios focus on a firm's ability to pay its short-term debt obligations. As such,
they focus on the firm's current assets and current liabilities on the balance sheet.
The most common liquidity ratios are the current ratio, the quick ratio, and the burn rate (interval
measure).
The financial leverage or debt ratios focus on a firm's ability to meet its long-term debt obligations. It
looks at the firm's long term liabilities on the balance sheet such as bonds.
The most common financial leverage ratios are the total debt ratios, the debt/equity ratio, the long-term
debt ratio, the times interest earned ratio, the fixed charge coverage ratio, and the cash coverage ratio.
The asset efficiency or turnover ratios measure the efficiency with which the firm uses its assets to
produce sales. As a result, it focuses on both the income statement (sales) and the balance sheet (assets).
The most common asset efficiency ratios are the inventory turnover ratio, the receivables turnover ratio,
the days' sales in inventory ratio, the days' sales in receivables ratio, the net working capital ratio, the
fixed asset turnover ratio, and the total asset turnover ratio.

The profitability ratios are just what the name implies. They focus on the firm's ability to generate a
profit and an adequate return on assets and equity. They measure how efficiently the firm uses its assets
and how effectively it manages its operations.
The market value ratios can only be calculated for publicly traded companies as they relate to stock
price. The most commonly used market value ratios are the price/earnings ratio and the market-to-book
ratio.

These ratios allow you to compare your firm to others in your industry. They also allow you to compare
different time periods of data for your firm to each other.

ANALYZING THE BALANCE SHEET WITH RATIOS

With a greater understanding of the balance sheet and how it is constructed, we can look now at some
techniques used to analyze the information contained within the balance sheet. The main way this is done is
through financial ratio analysis.

Financial ratio analysis uses formulas to gain insight into the company and its operations. For the balance sheet,
using financial ratios (like the debt-to-equity ratio) can show you a better idea of the companys financial
condition along with its operational efficiency. It is important to note that some ratios will need information
from more than one financial statement, such as from the balance sheet and the income statement.
The main types of ratios that use information from the balance sheet are financial strength ratios and activity
ratios. Financial strength ratios, such as the working capital and debt-to-equity ratios, provide information on
how well the company can meet its obligations and how they are leveraged. This can give investors an idea of
how financially stable the company is and how the company finances itself. Activity ratios focus mainly on
current accounts to show how well the company manages its operating cycle (which include receivables,
inventory and payables). These ratios can provide insight into the company's operational efficiency.

RATIOS:
CURRENT RATIO =Current asset/Current liabilities

2011
4036.37/6264.21=0.64

2010
3089.74/5493.97=0.56

LIQUIDITY RATIO= liquid assets/ Current liabilities

liquid assets= Current assets-stock-prepaid expenses

2011
1225.11/6264.21=0.195

2010
910.41/5493.97=0.165

PROFITIBILITY RATIO
a) GROSS PROFIT MARGIN

Gross profit/net sales* 100

G.P. = net sales- COGS
COGS=stock+ purchases+ direct expense

b) NET PROFIT MARGIN

net profit ratio: net profit/net sales *100

2011
11.71 (2169.16/19689.91)*100

2010
12.39 (2202.3/17769.12)*100

Share holders equity ratio:

shareholders equity/ total assets
March 11
215.95/2633.92
=0.081

March 10
218.17/2583.52
=0.084

RETURN ON CAPITAL EMPLOYED= PBIT/CAPITA EMPLYOED*100

Capital employed= Net fixed asset + current assets current liabilities

March 11
3103.97/2468.24+4036.37-6264.21
=1291.16
TURNOVER RATIO

March 10
2997.43/2436.07+3089.74-5493.97
=9414.03

DEBTORS TURNOVER RATIO = NET CREDIT SALES/AVERAGE ACC RECEIVABLE

STOCK TURNOVER RATIO = COGS/AVERAGE STOCK
TOTAL ASSETS TURNOVER RATIO=NET SALES/NET FIXED ASSET

March 11
19689.91/2468.24
=7.97

March 10
17769.12/2436.07
=7.29

LEVERAGE RATIO
DEBT EQUITY RATIO= DEDT/ EQUITY

= 0/215.35+2417.30+0.67 = 0 FOR 2011 AND 2010

VALUATION RATIO
RETURN ON EQUITYEARNINGS PER SHARE=
NET PROFIT AFTER TAX- PREFERENCE DIVIDEND/NO OF EQUITY SHARE

March 11
2305.97/21594.72
=10.68

March 10
2202.03/21816.87
=10.09

PRICE TO EARNINGS RATIO =MARKET PRICE PER SHARE/EPS