Company Assignment

1. About the company – background-products/services

2. Directors
3. Share holding pattern
4. Significant accounting policies of the company (relevant items covered under accounting policies)
a. Accounting conventions followed /Accounting basis
b. Valuation of fixed assets/ intangible assets
c. Depreciation methods and impairment of assets
d. Inventory policy
e. Valuation of investments / derivative transactions
f. Translation of foreign currency items
g. Research and development
h. Historical or current cost accounting
i. Treatment of leases
j. Recognition of profits on long term contracts
k. Expenses
l. Treatment of contingent liabilities
m. Deferred items
5. You have to present the income statement and balance sheet- redrafting it using the numbers provided in
annual report ; the example is provided below. The example shows two years data. ( 2022 an 2023 data)
6. About the financial performance of the company for past 5 years
 Growth in sales
 Growth in PAT
 Stock price
7. Comparative statement and common size statement ( 2022 an 2023 data)
8. Calculate the following ratios – for 2 years and compare the performance (consider 2021-22 annual report
and 2022-2023 annual report to calculate 2 years ratios)
 All Liquidity ratios
 All Profitability ratios
 All turnover ratios
 All Solvency ratios
 Performance indicators

Additional information: MUST FOLLOW

 You are advised to do independent research to find few relevant data points from the notes to accounts
provided in annual report.
 You have to present the contents considering the following submission guidelines
o Cover page indicating company name and name of the student-section and batch
o Index
o Presentation of document should be in the prescribed format – Font – Times new roman- size-12-
1.5 line spacing – all headings in heading 1 – 1.5 margin on left and 1 inch margin on all other side-
do not put border line

1
From the following income statement of HUL Ltd, analyse its earning based on comparative income statement and
common size income statement

Hindustan Unilever Ltd - Rs in Crore

INCOME 16-Mar 17-Mar
Revenue From Operations [Gross] 33,855.58 33,895.00
Less: Excise/Sevice Tax/Other Levies 2,430.31 2,597.00
Revenue From Operations [Net] 31,425.27 31,298.00
Other Operating Revenues 561.9 592
Total Operating Revenues 31,987.17 31,890.00
Other Income 500.63 526
Total Revenue 32,487.80 32,416.00
EXPENSES
Cost Of Materials Consumed 11,274.73 11,363.00
Purchase Of Stock-In Trade 3,951.15 4,166.00
Changes In Inventories Of FG,WIP And
Stock-In Trade 87.11 156
Employee Benefit Expenses 1,592.02 1,620.00
Finance Costs 0.18 22
Depreciation And Amortisation Expenses 320.75 396
Other Expenses 9,352.24 8,538.00
Total Expenses 26,578.18 26,261.00
Profit/Loss Before Exceptional,
ExtraOrdinary Items And Tax 5,909.62 6,155.00
Total Tax Expenses 1,788.22 1,906.00
Profit/Loss For The Period 4,082.37 4,490.00
Consider the following balance sheet of HUL along with the Income statement provided above

Balance Sheet of Hindustan Unilever Calculate the following ratios for

Rs in Crore only March 2017, considering both
Sources Of Funds Mar '16 Mar '17
income statement (2017 data) &
Equity Share Capital 216.39 216
Balance sheet
Reserves 3,470.23 6,274.00
Networth 3,686.62 6,490.00 1. Current ratio - Quick ratio - .Acid
Total Liabilities 3,686.62 6,490.00 test ratio
Application Of Funds 2 Operating ratio - Net profit
Gross Block 5,077.42 4,689.00 margin
Less: Accum. Depreciation 2,162.69 665 3. Stock turnover ratio
4.Debtors turnover and Collection
Net Block 2,914.06 4,024.00
period
Capital Work in Progress 0 0
5. Creditor turnover ratio and
Investments 2,966.55 3,779.00 payment period
Inventories 2,528.36 2,362.00 6. Capital employed
Sundry Debtors 2,758.82 928 7. Net working Capital – comment
Cash and Bank Balance 1,064.52 1,671.00 on WC financing
Total Current Assets 6,351.70 4,961.00 8. Earning per share and Book
Loans and Advances 1,548.08 1,784.00 Value per share ( Number of
equity shares are 216 crore)
9. Interest coverage ratio
Model solution

2
ANS

1. Current ratio - Quick ratio - Acid test ratio –

CR QR ATR

0.81 0.53 0.20

2 Operating ratio - Net profit margin

OR NPM

0.77 0.13

3. Stock turnover ratio -13.8 times

4.Debtors turnover and Collection period – 18 times 20 days

5. Capital employed = 11248

7. Net working Capital – comment on WC financing WC=-1516 indicates Higher ST funds

8. Earning per share and Book Value per share ( Number of equity shares are 216 crore)

EPS=20.78 BVPS= 30

9. interest Coverage ratio =279 times