Summer project work.

Conduct a trend analysis to predict the future

business trends for an FMCG company.
INTROUCTION:
Name: K. Sonia Grace
Class: NMBA
UID: 111718044235
Industry: Finance
Company: HUL
Component-1:
 Introduction of company.
 Income statement trend analysis report.
 Balance sheet trend analysis report.
INTRODUCTION:

Conduct a Trend Analysis to predict for future business trends of

an FMCG Company in India. Collecting data from the given
information of a company final accounts and make annual reports
from a top listed company of an FMCG company to know the
prediction of their financial position. Selected a top listed company
from FMCG i.e; HUL (Hindustan Unilever limited company) to
know their trends from three consecutive years. Trend analysis is a
method of collecting data of a company and make a trend analysis
for each year to know the positions from past to current of a
company financial year.
INTRODUCTION:
Hindustan Unilever Limited
Company (HUL) in India. It is
an India’s largest fast-moving of
Consumers Good companies
with a heritage of household use
of products every day to feel
good, look good and get more
out of life.
 1. Prepare a common size income statement in a
vertical analysis of an HUL company for the year ending
2016-18.
Particulars 2015-16 percentage 2016-17 percentage 2017-18 percentage

Sales 32,929 100% 33,895 100% 34,619 100%

Net sales 32,929 100% 33,895 100% 34,619 100%

Other income 1,126 3.42% 1,118 3.29% 1,168 3.37%

Total income 34,055 103.41% 35,013 103.29% 35,787 103.37%

Interest -15 0.05% -22 0.06% -20 0.06%

Total interest 34,040 103.37% 34,991 103.23% 35,767 103.32%

Profit before tax 5,977 18.15% 6,155 18.16% 7,347 21.22%

PBT 28,063 85.22% 28,836 85.07% 28,420 82.09%

Profit after tax 4,116 12.59% 4,247 12.53% 5,135 14.83%

PAT 23,947 72.72% 24,589 72.54% 23,285 67.26%

Equity:

Earnings 19.12 0.06% 20.75 0.06% 24.2 0.70%

Dividend 16 0.05% 17 0.05% 20 0.06%

Total equity 23,911 72.61% 24,551 72.43% 23,240 67.13%

 Report on income statement:
• In the year 2015-16 there is high increase in total income with 103.41% and less in other
total analysis with 85%-72% that means the company has been in a good position as per
there is a less interest and as well as in tax and in equity shares in financial of a company.
• In the year 2016-17 there is increase in profit and as well increased in total income with
103.29% and less in other total analysis with 85%-72% that means the company has been in
a good position as per there is a less interest and as well as in tax and in equity shares in
financial of a company.
• In the year 2017-18 there is increase in profit and as well increased in total income with
103.37% and less in other total analysis with 82%-67% that means the company has been in
a good position as per there is a less interest and as well as in tax and in equity shares in
financial of a company.
As per after completion of trend analysis of income statement we got to know that
the company is running in a very good position.
2. Prepare a common size balance sheet in a vertical analysis of
an HUL company for the year ending 2015-17.

Particular 2015-16 percentage 2016-17 percentage 2017-18 percentage

A)ASSETS:

Cash and other bank balances 2,759 43.94% 1,671 25.75% 3,373 47.67%

Investments 2,780 44.35% 3,779 58.23% 3,111 43.97%

Property, plant equipment &

intangible assets 3,300 52.56% 4,227 65.13% 4,572 64.62%
Net assets (current and non-
current assets) -2,560 -40.77% -3,187 -49.11% -3,981 -56.37%

Total Assets 6,279 100% 6,490 100% 7,075 100%

B)LIABILITIES:

Share capital 216 3.44% 216 3.33% 216 3.15%

Other equity 6,063 96.56% 6,274 96.67% 6,859 96.94%

Total Liabilit
ies 6,279 100% 6,490 100% 7,075 100%
2. Report on balance sheet:
• · In the year 2015-16 there is high increase in liabilities with 97% in
equity share capital and less in assets with 45%-52% that means the
company shares are good in their financial of a company.
• · In the year 2016-17 there is increase in liabilities with 97% in equity
share capital and less in assets with 58%-65% that means the company
shares are good in their financial of a company.
• · In the year 2017-18 there is increase in liabilities with 97% in equity
share capital and less in assets with 58%-65% that means the company
shares are good in their financial of a company.
• As per after completion of trend analysis of balance sheet we got to
know that the company is running in a very good position.
Component-2
 Introduction.
 Identify industry averages.
 Identidfy five different industry averages.
 Identify financial of those five industry companies under
FMCG Company.
 Analysis and comaprison against industry averages.
 Compare thosefive different ratio's with HUL Company.
 Analyse and make a report.
INTRODUCTION:
Identify the industry averages that means collect all the financial ratios
of 5 different companies which are under FMCG Company to know the
competition among companies how their company position is going on.
There is a direct competition among “fast moving consumer goods”
companies. So, here we are going to collect the industry averages of five
different companies and analysis and reports on those company
averages which company is doing great. There we should do comparison
among 5 different companies with chosen comapany. Analyse and make
a report on each comparison companies averages.
Identify five different
industries.
There are five diffeent
companies under FMCG
Company where there will be
direct competition among those
coompanies. So I chosen the
companies like
BRITNNIA,ITC,DABUR,GODRE
J and MARICO. These are
competitors t HUL Company
Financial Ratio's:
 Current ratio
 Quick ratio
 Price to earnings ratio
 Earnings per share ratio
 Debt t equity ratio
 Return equtiy ratio
 2) ITC Limited company
1) Britannia company
financial ratios:
financial ratios:

RATIOS 2016 2017 2018 RATIOS 2016 2017 2018

CURRENT RATIO 1.35 1.84 2.03 CURRENT RATIO 3.66 3.59 2.77
QUICK RATIO 1 1.3 1.61 QUICK RATIO 2.32 2.44 1.95

PRICE TO EARNINGS PRICE TO EARNINGS

RATIO 42.06 48.12 31.48 RATIO 18.87 33.40 27.83

EARNINGS PER SHARE EARNINGS PER SHARE

RATIO 31.8 35.15 39.48 RATIO 7.73 8.40 9.20

DEBT TO EQUITY RATIO 0 0 0 DEBT TO EQUITY RATIO 0 0 0

RETURN ON DEBT RETURN ON DEBT

EQUITY RATIO 46.93 36.76 32.69 EQUITY RATIO 26.23 24.23 24.07
3) DABUR India limited company 4) Godrej company financial
financial ratios: ratios:

RATIOS 2016 2017 2018 RATIOS 2016 2017 2018

CURRENT RATIO 1.39 1.48 1.59 CURRENT RATIO 0.34 0.22 0.22

QUICK RATIO 1.01 0.98 1.02 QUICK RATIO 0.21 0.09 0.11

PRICE TO EARNINGS RATIO 46.76 48.90 53.73 PRICE TO EARNINGS RATIO 348.13 0 76.29

EARNINGS PER SHARE

RATIO 5.33 5.67 6.09 EARNINGS PER SHARE RATIO 1.02 -4.32 7.18

DEBT TO EQUITY RATIO 0.03 0.08 0.07 DEBT TO EQUITY RATIO 1.52 1.78 1.50

RETURN ON DEBT EQUITY RETURN ON DEBT EQUITY

RATIO 35.45 30.38 27.83 RATIO 2.01 -8.65 14.13
5) Marico company financial 6) HUL company financial ratios:
ratios:

RATIOS 2016 2017 2018 RATIOS 2016 2017 2018

CURRENT RATIO 1.71 2.45 2.46 CURRENT RATIO 1.43 1.30 1.29

QUICK RATIO 1.01 1.14 1.09 QUICK RATIO 1.05 0.97 1.01

PRICE TO EARNINGS RATIO 45.26 45.08 58.89 PRICE TO EARNINGS RATIO 45.40 43.77 55.10

EARNINGS PER SHARE EARNINGS PER SHARE

RATIO 5.36 6.53 5.57 RATIO 19.15 20.79 24.25

DEBT TO EQUITY RATIO 0.08 0.04 0.04 DEBT TO EQUITY RATIO 0 0 0

RETURN ON DEBT EQUITY RETURN ON DEBT EQUITY

RATIO 46.93 30.93 24.15 RATIO 83.43 70.73 77.56
1) Comparison between HUL and Britannia company ratios:

YEARS RATIOS HUL COMPANY BRITANNIA COMPANY

2016 CURRENT RATIO 1.43 1.35

QUICK RATIO 1.05 1

PIRCE TO EARNINGS RATIO 45.40 42.06

EARNINGS PER SAHRE RATIO 19.15 31.48

DEBT TO EQUITY RATIO 0 0

RETURN ON EQUITY RATIO 83.43 46.93

2017 CURRENT RATIO 1.30 1.84

QUICK RATIO 0.97 1.30

PIRCE TO EARNINGS RATIO 43.77 48.12

EARNINGS PER SAHRE RATIO 20.79 35.15

DEBT TO EQUITY RATIO 0 0

RETURN ON EQUITY RATIO 70.73 36.76

2018 CURRENT RATIO 1.29 2.03

QUICK RATIO 1.01 1.61

PIRCE TO EARNINGS RATIO 55.10 31.48

EARNINGS PER SAHRE RATIO 24.25 39.48

DEBT TO EQUITY RATIO 0 0

RETURN ON EQUITY RATIO 77.56 32.69

REPORT:

In the above comparison between two companies HUL & Britannia. We are going to
give analysis for each ratio’s with their financial years.

a) Current ratio: The current ratio measures whether a company has the ability to use
its current assets to pay its short-term creditors (current liabilities). Its financial
analysts deem 2:1 ratio as its acceptable.

 In the above comparison statement there is a three years of current ratios are
indicated where, we compared among those companies there is a good increase in
current ratio in 2016 of HUL Company with 1.43 when compare to Britannia .
 Where as in the 2017 there is a decrease in current ratio of HUL Company with 1.30
when compare to Britannia is with 1.84.
 As well in the year 2018 again there is increase in current ratio with 2.03 when
compared to Britannia.
b) Quick ratio: The quick ratio is same as current ratio where its
financial analysts is 1:1 ratio where quick ratio shows that company is
more “liquid” and does not have to rely heavily on selling its inventory
in order to pay its short-term debt.

 In the above table there is a three years of quick ratios where, when
we compare among those two companies quick ratio is good in HUL
Company with 1.05 when compare to Britannia in 2016.
 Where as in the year 2017 there is increase in Britannia Company
when compare to HUL with 1.30.
 As well in the year 2018 there is again increase in quick ratio with
1.61 of Britannia Company where as HUL Company look out their
assets on quick ratio.
c) Price to earnings ratio: The price to earnings ratio indicates that how
much earnings are growing in the investors company.

 In the above table price to earnings ratio is said that there is a high
earnings in 2016 45.40 of HUL Company when compared to Britannia
Company.
 In the year 2017 there is high in Britannia Company with 48.12.
 In the year 2018 again there is a high increase in HUL Company with
55.10. That means HUL Company is good in earning price.
d) Earnings per share ratio: The Earnings per share ratio indicates
that every share should be earned with 1per unit of share or 10per
unit of share it depends on how much company have brought the
shares.

 In the above table there is a high in earning per share in Britannia

Company with 31.80 in 2016.
 In the year 2017 again there is increase in per share with 35.15 of
Britannia Company.
 In the year 2018 again there is increase in Britannia Company
with 39.48 when compared to HUL. That means HUL should buy
more shares in the company.
e) Debt to equity ratio: Debt to equity ratio compares the investments made by
creditors to the investments made by the company’ shareholder’s. Investors like to see
a low debt to equity.

 In the above table there is 0 in debt to equity ratio in HUL Company as well as
Britannia Company in all the three years that means the investors are not paying a
debt to the equity’s.

f) Return on equity ratio: The return on equity ratio measures how well a company is
using owner’s investments to generate after tax profits. Investors like to see a high
return on equity since it indicates the company is using the owner’s investments
efficiently to generate after tax profits.
 In the year 2016 there is a high return on equity in HUL Company with 83.43.
 In the year 2017 again there is a high in HUL Company with 70.73
In the year 2018 high in HUL Company as we seen past two years there is a huge return on
equity in 2016 than two years there is a slightly decreased in 2017 again raised
in 2018 with 77.56 when compared to Britannia Company HUL has the best investments in
ratios as well as in business running.
CONCLUSION:
1. HUL (Hindustan Unilever Limited Company) has a very
good position in their business.
2. There is a alternatives profits in their financial years o
they have to ocus more in their shares
products,market,prices and growth.
3. There should be a more facitilies like improving in
technlogy an media.
4. There are very good products and as it's tag says that "feel
good,look good" .
5. Hope so there will be a long run in their business.
Thank you