Topic: Financial Statement Analysis of Hindustan Unilever Limited (HUL)
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Aspects Covered:
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Common Size Financial Statements
Accounting Ratios
ACKNOWLEDGEMENT
I would like to thank my Accountancy teacher [Teacher’s Name] for guiding me throughout
this project. I also thank my parents and friends for their support and encouragement. While
making this project, I understood how financial statement analysis helps in knowing the real
position of a company. It was a good learning experience for me.
CERTIFICATE
This is to certify that [Your Name], a student of Class 12, has successfully completed the
Accountancy project titled “Financial Statement Analysis of Hindustan Unilever Limited” as
per CBSE guidelines under my guidance.
Signature
[Teacher’s Name]
(Accountancy Teacher)
INTRODUCTION
Financial statement analysis helps to know the performance and financial position of a
company. It is done using different tools like Common Size Statements, Accounting Ratios,
Comparative Statements, etc.
In this project, I have analysed Hindustan Unilever Limited (HUL) using Common Size
Statements and Accounting Ratios to understand its financial condition in a simple way.
ABOUT HUL
Full Name: Hindustan Unilever Limited
Founded: 1933
Headquarters: Mumbai, India
Business: FMCG – Soaps, Shampoos, Detergents, Foods, Beverages, etc.
Revenue (2023-24): ₹61,800 crore
Net Profit (2023-24): ₹10,280 crore
HUL is India’s biggest FMCG company with brands like Surf Excel, Dove, Rin, Lifebuoy, Bru,
Lipton, and many more.
WHAT IS COMMON SIZE STATEMENT?
In common size statements, all items are shown as a percentage of a common base amount.
In Profit & Loss, revenue is the base. In Balance Sheet, total assets or total liabilities are the
base. It helps in easy comparison.
COMMON SIZE STATEMENT OF PROFIT & LOSS (HUL 2023-24)
Particulars Amount (₹ Crore) % of Revenue
Revenue 61,800 100%
Expenses 47,000 76%
Profit Before Tax 14,800 24%
Tax 4,520 7.3%
Net Profit 10,280 16.6%
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Simple Analysis
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Expenses are 76% of revenue, showing good cost control.
Net Profit is 16.6%, which is a strong profitability for an FMCG company.
COMMON SIZE BALANCE SHEET (HUL 2023-24)
Particulars Amount (₹ Crore) % of Total Assets
Assets:
Non-Current Assets 30,000 60%
Current Assets 20,000 40%
Total Assets 50,000 100%
Equity & Liabilities:
Equity + Reserves 35,000 70%
Non-Current Liabilities 10,000 20%
Current Liabilities 5,000 10%
Total 50,000 100%
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Simple Analysis
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Most funds come from equity (70%), so the company is financially strong.
Current assets are 40% of total assets, showing good liquidity.
WHAT ARE ACCOUNTING RATIOS?
Ratios show the relationship between two financial figures. They help in checking
profitability, liquidity, and solvency of a company easily.
IMPORTANT RATIOS OF HUL (2023-24)
1. Current Ratio
Formula: Current Assets / Current Liabilities
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Calculation: ₹20,000 crore / ₹5,000 crore = 4:1
Interpretation: For every ₹1 of current liability, HUL has ₹4. Very strong short-term
financial position.
2. Debt-Equity Ratio
Formula: Total Debt / Equity
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Calculation: ₹15,000 crore / ₹35,000 crore = 0.43:1
Interpretation: Low debt-equity ratio means the company is not highly dependent on
borrowed funds. It is financially stable.
3. Net Profit Ratio
Formula: Net Profit / Revenue × 100
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Calculation: ₹10,280 crore / ₹61,800 crore × 100 = 16.6%
Interpretation: The company keeps 16.6% of its revenue as net profit after all expenses
and taxes.
4. Return on Equity (ROE)
Formula: Net Profit / Equity × 100
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Calculation: ₹10,280 crore / ₹35,000 crore × 100 = 29.4%
Interpretation: Shareholders earn 29.4% return on their investment, which is excellent.
FINDINGS
HUL has good profitability with a net profit ratio of 16.6%.
Its current ratio (4:1) shows strong liquidity.
Debt-Equity ratio (0.43:1) is low, meaning low financial risk.
High ROE (29.4%) shows good returns to shareholders.
CONCLUSION
From the above analysis, I conclude that Hindustan Unilever Limited is financially strong and
profitable. It uses its resources efficiently and maintains a good balance between equity and
debt. Such companies are safe for investors and have potential for future growth.
BIBLIOGRAPHY
NCERT Accountancy Class 12 Textbook
HUL Annual Report 2023-24
[Link]
[Link]
