Hindustan Unilever Limited

Banking Management
ALTMAN Z-SCORE - Altman’s Z-Score model is a numerical measurement that is used to predict the chances of a business going bankrupt in the
next two years. The model was developed by American finance professor EdwardAltman in 1968 as a measure of the financial stability of
companies

Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + l.0X5

X1 = working capital/total assets (%)
X2 = retained earnings/total assets (%)
X3 = EBIT/total assets (%)
X4 = market value of equity/book value of debt (%)
X5 = sales/total assets (times)

CALCULATIONS:

X1

YEAR CURRENT ASSESTS CURRENT LIABILITIES WORKING CAPITAL TOTAL ASSESTS WC/TA
2020 10,357.18 8,725.70 1631.48 34,250.65 0.047633549
2021 8,870.41 5,198.04 3672.37 31,127.69 0.117977595
2022 9,994.47 4,689.44 5305.03 31,921.94 0.166187581
2023 14,175.13 5,643.21 8531.92 31,530.20 0.270595175
2024 6,596.96 4,253.21 2343.75 24,773.30 0.094607904

X2

YEAR RETAINED EARNINGS TOTAL ASSETS RE/TA

2020 24,581.32 34,250.65 0.717689153
2021 25,142.90 31,127.69 0.807734207
2022 26,379.43 31,921.94 0.826373021
2023 24,912.89 31,530.20 0.790127877
2024 19,636.12 24,773.30 0.792632391

X3

YEAR OPERATING PROFIT Depreciation and EBIT(OP+DEP) TOTAL ASSETS EBIT/TA

Amortisation Expenses

2020 43,578.87 349.84 43928.71 34,250.65 1.282565732

2021 35,359.15 282.44 35641.59 31,127.69 1.145012367
2022 32,135.98 269.17 32405.15 31,921.94 1.015137238
2023 27,132.90 259.28 27392.18 31,530.20 0.868760109
2024 29,111.54 246.43 29357.97 24,773.30 1.185064969

X4

BOOK VALUE OF MKT OF

YEAR 0UTSTANDING SHARES SHARE PRICE MKT of EQUITY TOTAL ASSETS TOTAL LIABILITIES BOOK EQUITY DEBT BV OF DEBT IN CR. EQ/BV OF DB
2020 2,02,22,023 3444.05 69645658313.15 34,250.65 8,725.70 25524.95 8725.7 87257000000.00 0.798167005
2021 2,02,12,022 3249.25 65673912483.50 31,127.69 5,198.04 25929.65 5198.04 51980400000.00 1.263436074
2022 2,02,02,021 3616.05 73051518037.05 31,921.94 4,689.44 27232.5 4689.44 46894400000.00 1.557787668
2023 2,01,92,020 6797.25 137250207945.00 31,530.20 5,643.21 25886.99 5643.21 56432100000.00 2.432130081
2024 2,01,82,019 9961.75 201048227773.25 24,773.30 4,253.21 20520.09 4253.21 42532100000.00 4.726976278

X5

YEAR TOTAL SALES TOTAL ASSETS TS/TA

2020 29,919 34,250.65 0.873530867
2021 27,741 31,127.69 0.891200086
2022 33,145 31,921.94 1.038314087
2023 36,455 31,530.20 1.15619311
2024 44,870 24,773.30 1.811224181

ALTMAN Z SCORE

YEAR X1*1.2 X2*1.4 X3*3.3 X4*0.6 X5*1.0 ALTMAN Z SCORE

2020 0.057160258 1.004764815 4.232466917 0.478900203 0.873530867 6.64682306
2021 0.141573114 1.13082789 3.77854081 0.758061644 0.891200086 6.700203544
2022 0.199425098 1.15692223 3.349952885 0.934672601 1.038314087 6.679286901
2023 0.324714211 1.106179028 2.866908361 1.459278049 1.15619311 6.913272758
2024 0.113529485 1.109685347 3.910714398 2.836185767 1.811224181 9.781339178

DECISION RULE: YEAR Z SCORE DECISION

2020 6.64682306 Firm is financially sound

If Z>2.99,Firm is 2021 6.700203544 Firm is financially sound

Financially sound.

If Z<1.81,Firm is 2022 6.679286901 Firm is financially sound

Financially Distressed or
Bankrupt.
2023 6.913272758 Firm is financially sound

2024 9.781339178 Firm is financially sound