HUL vs DABUR - Financial Analysis Snapshot
Transcript of HUL vs DABUR - Financial Analysis Snapshot
Financial Statement Analysis
FMCG INDUSTRY – RECENT PERFORMANCE
MARKET SHARE OF TOP PLAYERS
SALES TURNOVER
OBJECTIVE
Perform vertical analysis of the Balance Sheet and P&L account
Interpret significant changes in reserves and surplus, current liabilities, debtors, cash and bank balances
Compare common size statements for different years to reveal important changes in the Balance Sheet and P&L account.
Perform ratio analysis Analyze the companies from an investor’s
and creditor’s point of view
HUL INTERPRETATION
Reserves & Surplus of the company has decreased in the given period.
Secured Loans – Percentage increase due to disproportionate decrease in total assets. Reduction in absolute terms.
Unsecured loans taken have increased - utilized in the current liabilities.
Increase in net block of assets – high profits earned invested in assets.
Investments – Percentage increase, reduction in absolute terms. Used to payoff secured loans.
DABUR INDIA LTD.INTERPRETATION
Reserves & Surplus of the company has increased due to higher profits.
Short term as well as the Long term loans of the company have decreased due to payoffs from higher profits.
Increase in the net block of assets – Investments from higher profits.
Cash & Bank balance of the company has increased by more than 70%.
COMPARISON OF DABUR INDIA & HUL
Reserves & Surplus, and Net worth for Dabur India is slightly greater than that for HUL.
Percentage of secured/unsecured loans as well as current liabilities is greater for HUL as compared to Dabur India - former uses greater debt financing than latter.
Although liabilities of HUL are far greater than those of Dabur India, so are its current assets and investments
FINANCIAL RATIO ANALYSIS - HUL
FINANCIAL RATIO ANALYSIS – DABUR
COMPARISON OF HUL AND DABUR INDIA LTD.
Interest coverage ratios - Dabur Less than HUL – Safer to give loans to HUL
Gross profit margin of Dabur is more than HUL
– More efficient production processes ROE of HUL is higher than Dabur -
investments made by HUL are more justified as gross profit margin of Dabur is more than HUL but the ROE is still less.
EPS of HUL is better than Dabur – Investors should invest in HUL as compared to Dabur.
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