Hero Honda Financial Analysis
Transcript of Hero Honda Financial Analysis
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Hero Honda
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Hero Honda– At a glance.
o Company started in 1984 through JV between India’s Hero Group and Honda Motor Company Japan
o Largest Manufacturer Of Two Wheelers in the world (from 2001)
o Market Leader in the domestic two wheeler segment
o Recently the JV ended with Honda selling stake to Hero Group
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Common Size Balance SheetBalance Sheet Item 2009 2010
Sources of Funds
Shareholders Fund
Share Capital 1% 1.1%
Reserve & Surplus 93.3% 92.8%
Loan Funds 1.9% 1.8%
Deferred Tax Liabilities 3.8% 4.3%
Total 100% 100%
Application of Funds
Fixed Assets 42.1% 46.2%
Investments 83.5% 106.4%
Deferred Tax Assets 0.2% 0.2%
Net Current Assets -25.8% -52.8%
Total 100% 100%
Data Source: Annual Report 2010
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COST PIE-2009
81%
4%2%
3%3%2% 3%2%
Materials Consumed
Payments & Provisions for Employee's
Expenses for Manufacturing, Administration & Selling
Packing, Forwarding, Freight
Royalty
Advertisement & Publicity
Other Expenses & Provisions
Depreciation
Data Source: Annual Report 2010
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COST PIE-2010
81%
4%2%
3%3% 3% 3% 1%
Materials Consumed
Payments & Provisions for Employee's
Expenses for Manufacturing, administration & Selling
Packing, Forwarding, Freight
Royalty
Advertisement & Publicity
Other Expenses & Provisions
Depreciation
Data Source: Annual Report 2010
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Profitability Ratio’s
Ratio 2009 2010
Return On Capital Employed
43.39 % 76.64 %
Return On Shareholder’s Worth
33.72 % 64.41 %
Return on Equity 3209.21 % 5587.95 %
Operating Profit Ratio 15.67 % 19.05 %
Net Profit margin 14.46 % 17.96 %
Earning Per Share 64.19 111.77
Price Earning Ratio
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Liquidity Ratio’s
Ratio 2009 2010
Debt-Equity 0.02 0.019
Current Ratio 0.49 0.59
Quick Ratio 0.334 0.51
Interest Coverage (60.93) (145.61)
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Turnover Ratio’s
Ratio 2009 2010
Total Assets 3.17 times 4.46 times
Fixed Assets 7.27 times 9.23 times
Working Capital (11.85) times (8.08) times
Inventory Turnover 37.69 times 36.11 times
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Market Price
Data Source: moneycontrol.com
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Interpretation
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