A

Project Report on

“A study of the in-bound supply chain dynamics at HUL with focus on

overhead allocation & working capital performance (Ratio analysis)”

Undertaken in
“Hindustan Unilever Limited”
By
Siddhi Prakash Shinde

IN partial fulfilment of the requirements for the award of the degree

Master of Management Studies

Financial Management

Sahydri Institute of Management &Research

1
 DECLARATION

I the undersigned “Siddhi Prakash Shinde” hereby declare that the work
embodied in this project work titled “A preliminary study of the in-bound
Supply Chain dynamics at HUL (Surf Excel) with a focus on overhead
allocation and working capital performance (Ratio Analysis)” has been
prepared by me for the partial fulfilment of the requirement for the award of the
Master of Management Studies (MMS) degree, forms my own contribution
to the research work carried out under the mentorship of my mentor Dr.
Ashwini Mahadik and Prof. Mayuresh lonshute.

Whenever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.
I, here by further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical conduct.

Date: [Date of Submission]

Place: [Your City/Location]

Place: Chiplun

Siddhi Prakash Shinde

Roll Number: 52
Program: MMS
Siddhishinde741@gmail.com
8698921140

Sahydri institute of management & research,

Signature of candidate

2
 TABLE OF CONTENTS

Content Topic Page

No
1 Title Page
2 Declaration
3 Acknowledgement
4 College Certificate
5 Company Certificate
6 Executive Summary
7 Introduction
8 Industry profile
9 Company profile
10 objectives
11 Review of literature
12 Research methodology
13 Data collection
14 Data analysis & interpretations
15 Findings
16 Suggestions
17 Bibliography

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 EXECUTIVE SUMMARY

Hindustan Unilever Limited (HUL) is a British-owned Indian final

good company headquartered in Mumbai. It is a subsidiary of the British
company Unilever. Its products include foods, beverages, cleaning
agents, personal care products, water purifiers and other fast-moving consumer
goods (FMCGs).
HUL was established in 1931 as Hindustan Vanaspati Manufacturing Co.
Following a merger of constituent groups in 1956, it was renamed Hindustan
Lever Limited. The company was renamed again in June 2007 as Hindustan
Unilever Limited. HUL is the market leader in Indian consumer products with
presence in over 20 consumer categories such as soaps, tea, detergents and
shampoos amongst others with over 700 million Indian consumers using its
products. Sixteen of HUL's brands featured in the Nielsen Corporation Brand
Equity list of 100 Most Trusted Brands Annual Survey (2014), carried out by
Brand Equity, a supplement of Times Over. the years the company has grown
with its reported recent audited turnover exceeding Rs 58,000 Crores and a
reported profit after tax in excess ofRs,9500 Crores, and a market capitalization
of Rs. 6.21 from products and services manufactured across its 29
manufacturing locations in India.

This report starts by talking about an internship at HUL’s plant in Chiplun,

Maharashtra, which mainly focuses on manufacturing. At the beginning, the
internship looks at how SAP, a computer system, is used in the plant's
operations. This helps to understand how things come into the plant and how it
all works. Then, it applies some basic lessons about managing operations to real
situations in the plant. Next, it looks at how costs are divided among the four
product lines at the Chiplun Plant. Since managing inventory, which is the stuff
the plant has on hand, is really important, the report also looks at how well HUL
manages its money and resources. It compares HUL's performance to one of its
competitors to see how it's doing. During the internship, they talked a lot about
finding the right balance between having enough money to cover everyday
expenses and making a profit. So, the report also does some math to see if
there's a relationship between how much money HUL has on hand and how
profitable it is. The report looks at how Hindustan Unilever Limited (HUL)
manages its working capital, especially focusing on inventory. It analyses how
well HUL is doing by looking at its profitability and liquidity ratios and
compares these with a close competitor. Discussions with company officials
showed the need to balance having enough cash on hand (liquidity) and making
a profit. Overall, the report gives useful and practical insights into managing
working capital effectively.

4
 Contextual Background

Hindustan Unilever Limited (HUL), founded in 1933 and headquartered in

Mumbai, is India's largest and one of its oldest consumer goods companies.
With a rich history spanning over 90 years, HUL has established itself as a
cornerstone of the country's fast-moving consumer goods (FMCG) sector. The
company's enduring success is rooted in its relentless focus on innovation,
market adaptability, and commitment to quality, which have enabled it to
maintain leadership across diverse product categories.

HUL's extensive portfolio encompasses a wide spectrum of consumer products,

including Food & Drink, Personal Care, Home Care, and Water Purification.
This broad range ensures that HUL touches the lives of millions of consumers
daily, meeting their varied needs and preferences with trusted brands that have
become household names across India. Brands like Dove, Lux, Lifebuoy, Surf
Excel, and Lipton exemplify HUL's commitment to delivering excellence and
reliability in every product category it serves.

Beyond its commercial success, HUL places a strong emphasis on social

responsibility and ethical business practices. The company actively engages in
initiatives aimed at creating positive societal impact, from promoting hygiene
and sanitation through its Lifebuoy brand to advocating for sustainable sourcing
and environmental stewardship across its operations. HUL's efforts extend to
empowering communities and supporting inclusive growth, reflecting its
broader commitment to contributing positively to Indian society.

With a customer base exceeding 700 million and a distribution network that
reaches every corner of the country, HUL's influence on the Indian consumer
landscape is profound. The company's ability to innovate and adapt to changing
consumer preferences and market dynamics has been key to its sustained
growth and leadership position in the FMCG industry. As it continues to evolve,
HUL remains dedicated to enhancing lives with products that not only meet
high standards of quality and efficacy but also uphold principles of social
responsibility and sustainability.

5
 History

Hindustan Unilever Limited (HUL) is one of the largest consumer goods

companies in India. It has a rich history that dates back over 90 years. Here's a
brief overview of HUL's history:

The company was renamed in June 2007 as “Hindustan Unilever Limited”.

Lever Brothers first commenced operations in India in the summer of 1888,
when crates full of Sunlight soap bars, embossed with the words "Made in
England by Lever Brothers" were shipped to the Kolkata harbour and it began
an era of marketing branded Fast Moving Consumer Goods (FMCG).In 1956, it
became known as Hindustan Lever Limited, as a result of a merger between
Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd.
Hindustan Unilever Limited was established in 1933 as Lever Brothers India
Limited by Lever Brothers. Hindustan Unilever Limited (HUL) is one of the
largest consumer goods companies in India. It has a rich history that dates back
over 90 years. It was a subsidiary of the British soap company Lever Brothers
(now part of Unilever) and aimed to introduce its popular brands like Sunlight
soap and Pear’s soap to the Indian market.

In 1956, Hindustan Vanaspati Manufacturing Company, a leading manufacturer

of edible oils, merged with Lever Brothers India. This merger gave birth to
Hindustan Lever Limited (HLL). Over the years, HLL expanded its product
portfolio and established itself as a dominant player in the Indian consumer
goods market. It introduced several iconic brands such as Lux, Lifebuoy, Surf,
Rin, Ponds, and Brooke Bond.
In 1993, the company changed its name to Hindustan Unilever Limited (HUL)
to reflect its association with Unilever, the global consumer goods
conglomerate. In recent years, HUL has also made strategic acquisitions to
strengthen its presence in the market. It acquired brands like Indulekha, Adityaa
Milk, and Wash, among others.
Today, HUL is a market leader in various consumer goods categories in India. It
has a wide distribution network, strong brand equity, and a reputation for quality
products. The company continues to evolve and adapt to changing consumer
needs, remaining a prominent player in the Indian FMCG (Fast-Moving
Consumer Goods) industry.

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Chiplun Factory HUL

The Chiplun Factory of HUL is located in MIDC Lote Parshuram Tal. Khed,
Ratnagiri. It produces 2 lakh tonnes of products annually and employs around
400 people. The factory has 4 units: Unit 1 makes Surf excel, Unit 2 makes Rin
& Wheel, Unit 3 makes Vim, and Unit 4 produces Wheel powder.

In terms of their Home Care brands, they believe that having a clear purpose
and making high-quality products are crucial for success. For example, Surf
excel promotes the idea that "Dirt is good," encouraging people to care about
social and environmental issues. This year, Surf excel became the first Home
and Personal Care brand in India to reach a turnover of over US$1 billion.
Wheel also saw growth in its consumer base and performed well in the mass
detergents market. The internship began with a comprehensive overview of the
SAP integration within the plant's operations, allowing for a deeper
understanding of the inbound supply chain dynamics and providing a suitable
environment to apply concepts of Operations Management in a real-world.

Unit 1: Surf Excel This unit specializes in the production of Surf Excel powder.
Unit 2 Wheel: The Old bar unit focuses on manufacturing of Rin bar and Wheel
bar products. Unit 3 - Vim unit is responsible for the production of Vim bar.I
had an opportunity to witness the operations of vim bar plant. A short overview
of manufacturing of vim bar. The materials add on by sequence that is dolomite,
labsa, sodium silicate, soda then next step add colour green sulphate (solution),
AA Homopolymers(acusol), water mix for 90 sec, China clay, calcite in a dump
mix it till good consistence dough is formed. Then add Athena perfume by
adding all the ingredients and then cut according to the weight then it is packed
Unit 4 - Wheel Powder: The Wheel Powder unit is dedicated to the production
of Wheel Powder. HUL maintains warehouses and distribution centres
strategically located to store finished goods. Effective inventory management
ensures adequate stock levels while minimizing excess inventory and associated
costs.

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COMPETITOR ANALYSIS:

The above-named companies are the competitors of HUL.Dabur was named as

one of competitor’s for HUL by the company officials.

Dabur India Limited, commonly known as Dabur, is one of India's leading

FMCG (Fast-Moving Consumer Goods) companies, with a rich heritage
spanning over 135 years. Established in 1884 by Dr. S.K. Burman, Dabur began
as a small pharmacy in Calcutta, specializing in Ayurvedic medicines. Today, it
has evolved into a multinational corporation with a diverse portfolio of products
across healthcare, personal care, food, and beverages.

At the heart of Dabur's success lies its commitment to Ayurveda, the ancient
Indian system of medicine. Dabur has leveraged Ayurvedic principles to
develop a wide range of products that cater to consumers' health and wellness
needs. From traditional formulations to modern innovations, Dabur's products
are known for their natural ingredients and efficacy.

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 Dabur’s product portfolio is extensive and includes well-known brands such as
Dabur Chyavanprash, Dabur Honey, Dabur Red Toothpaste, Dabur Amla Hair
Oil, and Dabur Lal Tail, among others. These products have become household
names in India and have earned the trust of millions of consumers over
generations. In addition to its focus on Ayurveda, Dabur has embraced
innovation and technology to stay ahead in the competitive FMCG market. The
company invests heavily in research and development to create products that
meet the evolving needs of consumers. It also employs state-of-the-art
manufacturing facilities and stringent quality control measures to ensure the
highest standards of safety and efficacy.

Dabur’s commitment to sustainability and corporate social responsibility is

another cornerstone of its business philosophy. The company strives to
minimize its environmental footprint through eco-friendly practices and
initiatives. It also actively engages in community development projects,
focusing on health, education, and livelihood enhancement in the areas where it
operates.

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ROLE AND ACTIVITES PERFORMED DURING THE INTERNSHIP IN
HUL

Worked as a Summer Finance Intern for a period 45 days, and the work
activities done are the following:

 Getting a working knowledge of SAP

 Posting GRR and making Purchase order in SAP

 Understanding the inbound-Supply Chain logistics in HUL

 Allocation of Overheads to different Products

 Evaluating the working capital management through a Ratio analysis

and making a comparison with the closest competitor.Production
process

 Quality checking process in finished goods

 I also went in VIM Bar plant & I analysed the procedure of making vim
bar of different grams.

 I also went through packing process.

Remaining……

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OBJECTIVES:

To apply the concepts, in-bound supply chain logistics, studied in the

Business School to real work life situations.

 To understand the basic operations of Surf Excel plant of HUL and relate
it to the Cost Management processes adopted in the factory.

 To get acquainted to the workplace environment by handling well defined

and time bound projects in a Company.

 To assess my strengths and overcome weaknesses while adjusting to a

corporate work environment.

 To suggest some measures which can lead to better working

capital management for the company.

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SUMMARY OF THE ACTIVITIES PERFORMED DURING THE
INTERNSHIP:
In-bound supply chain drivers at HUL:
A supply chain transforms raw materials and components into a finished
product that's delivered to a customer. It is made up of a complex network of
organizations and activities, such as raw materials suppliers, manufacturers,
distributors, retailers and the customer.

SUPPLY CHAIN MANAGEMENT:

Hindustan Unilever Limited (HUL) is one of India's leading consumer goods
companies and follows a robust supply chain management process to ensure the
smooth flow of products from suppliers to customers. The general overview of
the typical steps involved in supply chain management processes.
Here's the sequence of steps involved in the supply chain management process
at Hindustan Unilever Limited (HUL):
1. Planning and Forecasting:

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 - Analysing market demand, sales trends, and historical data to create accurate
forecasts.
- Determining production levels, inventory requirements, and distribution
plans based on the forecasts.

2. Procurement:
- Sourcing raw materials, packaging materials, and other necessary inputs
from a network of suppliers.
- Maintaining relationships with suppliers focusing on quality, cost, and
sustainability.
- Creating Material Requirement Planning (MRP) based Bill of Material
(BOM) every Saturday to determine materials needed for production and
schedule procurement.

3. Transportation of Raw Materials to HUL Factory:

a. Security Gate Check: Verifying necessary documents presented by the
truck driver.
b. Gate Entry: Making manual entry and weighing the truck, then directing it
to the storage area for unloading.
c. Purchase Order (PO) and Challan Check: Store personnel verifying PO
number and document challans for correct material reception.
d. Document Submission: Truck submitting documents to RM department,
registering entry manually, and recording information on invoices.
e. Quality Control (QC) Check: QC personnel sampling materials for quality
inspection. Accepting or rejecting based on parameters, with rejected materials
kept in blocked stock and returned to vendor.
f. GRR Posting: Posting in SAP and recording SAP document number on
paper, then allocating raw material to plants.
g. Empty Truck Weighing: Weighing empty truck to determine net weight of
received materials, attaching weight slips to invoice for record-keeping.
j. Payment and Exit: Transporter receiving payment receipt and empty truck
allowed to leave premises. Payments made by Head Office.

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4. Manufacturing:
- Operating multiple manufacturing facilities to transform raw materials into
finished goods.
- Optimizing production processes for efficiency, quality control, and
regulatory compliance.
- Four plants in HUL Chiplun Detergent factory.

a. Unit 1 - Surf Excel: This unit specializes in the production of Surf Excel
powder.
b. Unit 2 - Wheel: The Old bar unit focuses on manufacturing of Rin bar and
Wheel bar products.
c. Unit 3 - Vim unit is responsible for the production of Vim bar. I had an
opportunity to witness the operations of vim bar plant. A short overview of
manufacturing of vim bar. The materials add on by sequence that is dolomite,
labsa, sodium silicate, soda then next step add colour green sulphate (solution),
AA Homopolymers(acusol), water mix for 90 sec, China clay, calcite in a dump
mix it till good consistence dough is formed. Then add Athena perfume by
adding all the ingredients it is cut according to the weight then it is packed.
d. Unit 4 - Wheel Powder: The Wheel Powder unit is dedicated to the
production of Wheel Powder.

5.Warehousing and Inventory Management:

HUL maintains warehouses and distribution centres strategically located to
store finished goods. Effective inventory management ensures adequate stock
levels while minimizing excess inventory and associated costs.

6.Transportation and Logistics:

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(a)Demand Posting: The despatch team at HUL receives demand requests from
retailers and Distribution Point Owners (DPOs). These demands are posted in
the SAP system, which reflects the requirements in the Chiplun factory.
(b)Allocation of Vehicles:
Based on the demand posted in the system, the despatch team, allocates
appropriate vehicle for transportation. Factors such as vehicle capacity, delivery
locations, and route optimization are taken into consideration during the
allocation process.
(c) Loading Team:
Once the vehicles are allocated, the dock shipping team and forklift operators
come into action. They load the products on to the trucks, ensuring proper
handling and secure packaging to prevent any damage during transit.

(d)delivery to DPOs and Retailers: The loaded trucks are now ready to deliver
the goods to the designated DPOs and retailers. The logistics team ensures that
the trucks are dispatched according to the planned routes and schedules.

(c) Transportation Execution: During transportation, the logistics team closely

monitors the movement of goods. They track the trucks using GPS systems
or other tracking mechanisms to ensure on-time delivery and to address any
unexpected situations or delays.

(d)Collaboration with Logistics Partners: HUL collaborates with logistics

partners who are responsible for the actual transportation of goods. These

15
 partners may include freight forwarders, carriers, and third-party logistics
providers. HUL maintains strong coordination with these partners to ensure
smooth and efficient transportation operations.
(e) Delivery Confirmation and Documentation: Once the trucks reach their
destination, the goods are unloaded and delivered to the respective DPOs and
retailers. The delivery confirmation is recorded, and necessary
documentation such as delivery receipts and invoices are completed.

HUL's transportation and logistics process involves selecting the appropriate

mode of transportation, optimizing routes, coordinating with logistics partners,
and ensuring timely and efficient delivery of goods to DPOs and retailers. The
use of the SAP system helps in managing demand, allocating vehicles, and
tracking deliveries, ensuring a streamlined and organized logistics operation.

Allocation of overheads through various product line manufactured at

HUL homecare unit Chiplun:

Product cost management (PCM) is about ensuring products meet profit

targets by controlling expenses. It involves tools, processes, and methods to
manage direct labour, materials, and factory overhead. PCM aims to keep costs
in check during product development and manufacturing. It's crucial for
maintaining competitiveness and profitability. Essentially, PCM helps
companies balance quality and cost effectively.

Conversion cost:

Conversion costs are what it takes to turn raw materials into finished goods,
including labour and overhead. Unlike prime costs, which cover only labor and
materials, conversion costs also include overhead expenses. In production, there
are three main costs: materials, labour, and overhead. Materials are the actual
stuff used, labour is the workers' cost directly tied to production, and overhead
includes other expenses like rent and utilities. Conversion costs specifically
focus on labour and overhead required for production.

Product costing consist of:

Product costing involves several key components:

16
1. Raw Material Packing Material Cost: This encompasses adding up the
expenses of all raw materials used in production, including packaging materials
like bales, sacks, and boxes.

2. Make Cost: The make cost covers production expenses, including:

(a)Overhead Costs: These are indirect expenses associated with production,

such as factory rent, equipment maintenance, and utilities.

(b)Utility Costs: Expenses related to utilities like electricity, water, and gas
necessary for manufacturing.

(c)Job Work Costs: Expenses incurred when outsourcing tasks to external

parties.

These components are calculated separately and then combined to determine

the total make cost.

3.Total Cost: This is the sum of the raw material packing material cost and the
make cost. Adding these two costs together provides the overall expense
incurred in production.

4. Cost per Tonne: To find the cost per tonne, divide the total cost by the total
quantity produced in tonnes. This calculation helps assess the average cost of
each unit produced.

By carefully evaluating these elements, businesses can gain insights into their
production expenses, aiding in pricing strategies and cost management
decisions.

Factory Product Costing

Rin,Wheel,Vi Wheel
Surf Excel m powder Factory
68% 28% 4%
4000.00 25,00
12000.00 9000.00
0.00
Volume
Particulars Unit 1 Unit 2 & Unit 3 Unit 4 Total
Raw Material Purchase

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 29,00,00,000.00 15,00,00,000.00 6,00,00,000.00 50,00,00,000.00

Packing Material 4,75,00,000.00 2,80,00,000.00 55,00,000.00 7,25,00,000.00

Make Cost:
Overheads

Management salaries 4,90,000.00 2,00,000.00 60,000.00 7,50,000.00

Non-Management
Salaries 70,00,000.00 35,00,000.00 6,00,000.00 1,11,00,000.00
TOTAL SALARIES /
WAGES 74,90,000.00 37,00,000.00 6,60,000.00 11,850,000.00

Depreciation 40,00,000.00 19,00,000.00 4,00,000.00 63,00,000.00

Specified Repairs 66,000.00 31,000.00 3,500.00 1,00,500.00

MAIN MAN-MACHINE
OVERHEADS 1,15,56,000.00 56,31,000.00 10,03,500.00 1,82,50,500.00

Management Travel 67,000.00 32,000.00 6000.00 1,05,000.00

Non-management 52,500.00
Travel 33,500.00 16,000.00 3,000.00
Motor Vehicle
Expenses 3,27,000.00 1,52,000.00 26,000.00 5,05,000.00
Total Travel 4,27,500.00 2,00,000.00 35,000.00 6,62,500.00

Routine Repairs 6,55,000.00 3,10,000.00 55,000.00 10,20,000.00

Engg Spares Co
1,97,000.00 92,000.00 16,000.00 3,05,000.00
Welfare Expenses 21,66,000.00
14,00,000.00 7,00,000.00 66,000.00
Selection & Training
-
Expenses - - -
PR/Legal Expenses
66,000.00 31,000.00 6,000.00 1,03,000.00
Handling/Rent Expense
s 9,76,000.00 4,55,000.00 76,000.00 15,07,000.00
IFRS
3,26,000.00 1,51,000.00 26,000.00 5,03,000.00
Postage/Telephone
52,000.00
Expenses 33,000.00 16,000.00 3,000.00
Purchased Services
6,50,000.00 3,00,000.00 50,000.00 10,00,000.00
EDP Expenses
4,55,000.00 2,10,000.00 35,000.00 7,00,000.00
1,23,000.00
Printing & Stationery 70,000.00 45,000.00 8,000.00

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Power, Light, Water
etc. 97,500.00 45,000.00 7,500.00 1,50,000.00

Bank Charges 65,000.00 30,000.00 5,000.00 1,00,000.00

Rates/Taxes/Stamp
Duties 65,000.00 30,000.00 5,000.00 1,00,000.00

Books & Periodicals 32,500.00 15,000.00 50,000.00 50,000.00

TPM/UQCSRM/CSR - - - -

Insurance 3,250.00 1,500.00 250.00 5,000.00

Other Expenses 2,27,500.00 1,05,000.00 17,500.00 3,50,000.00

TOTAL
DISCRETIONARY 53,18,750.00 25,36,500.00 4,21,250.00 82,34,000.00

Central OH 9,75,000.00 4,50,000.00 75,000.00 15,00,000.00

TOTAL OVERHEADS 1,80,51,250.00 80,71,500.00 13,45,250.00 2,69,05,000.00

Utility

Power 32,50,000.00 15,00,000.00 2,50,000.00 50,00,000.00

HAG (Briquette) 40,00,000.00 - - 40,00,000.00

Diesel 2,60,000.00 1,20,000.00 20,000.00 4,00,000.00

TOTAL UTILITY COST 80,10,000.00 16,30,000.00 2,80,000.00 12,44,000.00

Job Work Cost - 1,30,000.00 - 1,30,000.00

Total Make Cost 2,69,98,250.00 99,11,500.00 16,20,250.00 3,90,25,000.00

Make Cost per Tonne: 2,888.58 1,639.25 809.35 2,142.65

TOTAL COST 31,77,98,250.00 14,50,11,500.00 2,415,250.00 47,64,25,000.00

4000.00
12000.00 9000.00
TOTAL TONNE 25,000.00

37,300.58 25,136.30 15,057.66 77,494.54

Cost Per Tonne
(Including RM, PM)

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(The above figures are assumed numbers and not the financials of HUL,
the percentages are given by the finance executive at HUL as per the
company’s ratio)

Total Make Cost

45,000,000.00
40,000,000.00
35,000,000.00
30,000,000.00
25,000,000.00
20,000,000.00
15,000,000.00
10,000,000.00
5,000,000.00
0.00
1 2 3 4

Cost Per Tonne (Including RM, PM)

90,000.00
80,000.00
70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
0.00
1 2 3 4

20
1. Cost per Tonne Analysis: Product costing helps calculate how much it costs
to make one tonne of a product. This helps management pinpoint where they're
spending the most and find ways to cut costs. It's useful for comparing costs
between different parts of the production process or different products.

2.Cost Control and Reduction: By understanding which parts of production

are most expensive, factories can take steps to control costs. They might change
suppliers, find cheaper materials, or make production more efficient. This focus
on cost drivers helps them spend less money overall.

3. Pricing Decisions: Knowing the exact costs of making a product helps

factories set prices that cover these costs while still being competitive. This
means they can make money while making sure customers find their prices fair.

4. Profitability Analysis: Product costing shows which products are making

the most money and which ones might be losing money. This helps
management decide where to focus resources to make more profit. They can
also stop making products that aren't profitable or find ways to make them
cheaper.

5. Decision-Making Support: Detailed cost information helps management

make smart choices. They can decide if it's worth making a new product,
changing how they make things, or even hiring outside help. This helps them
make decisions that keep the company's finances healthy.

ANALYSIS OF THE WORKING CAPITAL MANAGEMENT ISSUES

THROUGH RATIO ANALYSIS: HUL & DABUR

Working capital management is significant in Financial Management due to

the fact that it plays a pivotal role in keeping the wheels of a business
enterprise running. Working capital management is concerned with short-
term financial decisions.

Shortage of funds for working capital has caused many businesses to fail and
in many cases, has retarded their growth. Lack of efficient and effective
utilization of working capital leads to earn low rate of return on capital
employed or even compels to sustain losses .

The need for skilled working capital management has thus become greater in
recent years. A firm invests a part of its permanent capital in fixed assets and
keeps a part of it for working capital i.e., for meeting the day-to-day
21
requirements. We will hardly find a firm which does not require any amount
of working capital for its normal operations.

The requirement of working capital varies from firm to firm depending upon
the nature of business, production policy, market conditions, seasonality of
operations, conditions of supply etc. Working capital to a company is like
the blood to human body. It is the most vital ingredient of a business.

Working capital formula:

Current assets / Current liabilities = Working capital ratio
Current assets – Current liabilities = Net working capital
Your net working capital tells you how much money you have readily available to
meet current expenses
Short-term working capital:
1.Cash: Liquid funds available for immediate expenses and obligations.
2.Accounts Receivable: Amounts owed to the company by customers for goods or
services provided on credit.
3.Inventory: Goods or materials held by the company for production or sale.
4.Marketable Securities: Short-term investments that can be easily converted into
cash, such as stocks or bonds with maturity dates within a year.
5.Short-term Investments: Investments expected to be converted into cash within a
year, excluding marketable securities.
6.Prepaid Expenses: Expenses paid in advance for goods or services that will be
received in the future.

long-term working capital:

1.Fixed Assets: Assets like property, machinery, and equipment used for long-term
operations.
2.Long-term Investments: Holdings like stocks or bonds expected to provide
returns beyond a year.

22
3.Permanent Working Capital: Minimum capital needed for continual operation.
4.Equity Capital: Funds raised by selling ownership shares.
5.Long-term Debt: Borrowed funds with repayment schedules over a year.
6.Retained Earnings: Profits reinvested into the company.
7.Intangible Assets: Assets lacking physical form but holding long-term value.

8.Reserch&Devlopment Investments: Spending on research and development for

future growth and innovation.

9.Accrued Expenses: Expenses incurred but not yet paid, such as wages, utilities, or
taxes.

10.Short-term Loans or Lines of Credit: Borrowed funds that need to be repaid

within a year, typically used to finance short-term operational needs.

Shortage of working capital leads to:

 Delayed payments: Badly affects the relationship with suppliers, brings
down the profit and additional financing at higher interest rate.

 Missed sales opportunities: Not having enough cash in hand will lead to
inability to exploit such opportunities.

 Employee Dissatisfaction: Delays in payment of the salaries and bonus

and lead to employee dissatisfaction.
Operating inefficiencies creep into the company when it becomes difficult to
meet everyday commitments due to a shortage of working capital. When daily
operations are disrupted, the company can’t meet its sales targets and thereby its
profits.
Excess working capital:
 Reinvested: If there is excess working capital it can be reinvested in the
business or to expand the business.

 Idle funds: Shareholder receives less return if the funds are not utilized

23
  Excessive inventory: Higher working capital could also mean money
blocked in unsold inventory. Companies with excessive inventory also
need to bear high storage costs, which results in unnecessary expenditure
and decreased profits.

 High Debtors: Excessive working capital might be the outcome of

excessive debtors.

Just like inadequate working capital, excessive working capital also leads to
decreased profits. So, we need to maintain balanced working capital.
FINANCIAL RATIO ANALYSIS

Financial ratio analysis is a method used by investors, analysts, and

managers to evaluate a company's financial health and performance by
examining relationships between various financial data points. These
ratios provide insights into different aspects of a company's operations,
profitability, liquidity, solvency, and efficiency.

Profitability ratios, such as return on equity (ROE) and gross profit

margin, assess the company's ability to generate profits relative to its
revenue and equity. Liquidity ratios, like the current ratio and quick
ratio, measure the company's ability to meet short-term financial
obligations with its current assets. Solvency ratios, such as debt-to-
equity ratio and interest coverage ratio, evaluate the company's ability
to meet long-term financial obligations and its reliance on debt
financing. Efficiency ratios, such as asset turnover and inventory
turnover, gauge how effectively the company utilizes its assets to
generate sales and manage inventory. Interpreting these ratios involves
comparing them to industry benchmarks, historical trends, and
competitors' performance. Significant deviations from industry norms
or historical trends can signal potential strengths or weaknesses within
the company. Ratio analysis facilitates decision-making processes,
including investment decisions, credit assessments, and strategic
planning. However, it's important to consider the limitations of ratio
analysis, such as differences in accounting methods and industry norms,
which may affect comparability across companies. Overall, financial
ratio analysis provides valuable insights into a company's financial
position and performance, aiding stakeholders in making informed

24
decisions.

(A)Profitability Ratios in HUL:

31st 31st 31st

March March March
Profitability Ratios: 2024 2023 2022
1.Gross Profit Ratio:
Note 1 Gross profit *100 21.65% 23.87% 25.00%
Net Revenue

2.Net profit ratio PAT 16.72% 16.84% 17.09%

Net Sales

3.ROCE: EBIT *100 27.59% 26.36% 22.48%

Capital Employed

4..EPS: Net Profit 43.05% 42.40% 37.53%

Total no of share
outstanding

 The Gross Profit Ratio measures the profitability of a company's core

operations by comparing the gross profit to net revenue. HUL's Gross
Profit Ratio has decreased marginally from 25.00% in 2022 to 23.87% in
2023 to 21.65% in 2024. This decline, though not substantial, (20.52%)
only partially indicates that the company's ability to generate profit from
its primary activities has decreased. This is not currently alarming,
provided the profitability does not further reduce in the future years. The
marginal reduction could be attributed to various factors such as
increased production costs, pricing pressures, or changes in the sales mix.

 The decrease in the Gross Margin has had an impact on HUL's Net Profit
Ratio which decreased from 16.84% in 2023 to 16.72% in 2024 but in
2022 the betnet profit will be higher that is 17.09. Since the decrease has
not been substantial a further analyse for the reasons behind this decline
was not warranted.

 HUL's ROCE has improved from 2022 in 22.48% to 26.36% in 2023 to

27.59% in 2024. This increase indicates that the company has generated
higher returns on the capital employed in its operations. It is pertinent to
note that the company had not increased its share capital in 2024, and the
increase in the Shareholder’s funds is fully attributable to the increase in
retained earnings. The Non-Current Liabilities has reduced and the

25
 company has no reported interest-bearing long-term debt. The reduction
in the non-current liabilities can partially explain the likely reasons for
the increase in the ROCE.

 HUL's EPS has increased from 2022 in 37.53% to 42.40 in 2023 to 43.05
in 2024. Despite a decrease in the Net Profit margin as highlighted
earlier, the companies’ absolute value of its Net profits has gone up. With
no change in the Shares outstanding (that is no dilution in reported EPS)
the EPS has increased. This rise signifies that the company has generated
higher earnings for each outstanding share. It indicates positive growth
and can be seen as a favourable indicator for existing shareholders and
potential investors (with better PE Multiples and a consequent impact on
the market price). A detailed analysis of this is beyond the scope of this
Report.

Profitability Ratio comparison between HUL and DABUR:

In order to understand how HUL has performed an analysis of a close

competitor (DABUR). has been carried out in this section. DABUR had
different financial year as compared to HUL.

DABUR
Profitability Ratios: HUL 2024 2024
1.Gross Profit Ratio: Gross profit *100 21.65% 12.40%
Net Revenue

2.Net profit ratio PAT 16.72% 16.52%

Net Sales

3.ROCE: EBIT *100 27.24% 26.79%

Capital Employed

4..EPS: Net Profit 43.05 8.52

Total no of share
outstanding

 The Gross Profit Ratio of HUL is significantly higher than Dabur. This
suggests that HUL has a higher ability to generate profit from its core
operations in comparison to DABUR. HUL may have better cost
management, pricing strategies, or a more favourable product mix.

26
  HUL has a higher Net Profit Ratio compared to Dabur. This indicates that
HUL is more efficient in generating profit after considering all expenses
and taxes, in relation to its net sales. HUL's higher net profit margin
suggests better cost control or higher revenue generation in comparison to
Dabur.

 The Return on Capital Employed for HUL is significantly higher than

that of DABUR. HUL ROCE indicates that it has been able to generate
substantially higher returns on its capital employed in comparison to
DABUR. This suggests that HUL is more efficient in utilizing its
resources and investments to generate profits.

 HUL has a significantly higher EPS than DABUR, indicating higher

earnings generated per outstanding share. HUL has higher EPS suggests
better profitability and potentially a higher market valuation compared to
DABUR.

(B) Liquidity Ratio HUL:

Liquidity 31st March 31st March 31st March

Ratios 2024 2023 2022
Current Ratio Current Assets 1.64 1.38 1.34
Current Liabilities
(Current Assets-
Quick Ratio Inventory) 1.329 1.033 0.9829
Current Liabilities
Cash & Cash
Cash Ratio Equivalents 0.581 0.380 0.330
Current Liabilities
 For the purpose the analysis of current ratio, the Current Assets did not
include Investments and Other Bank Balances (only considered the Cash
and Cash Equivalents). Investments excluded because some of them may
not be relevant to determine operational liquidity and other Bank
Balances (since this could have some restricted cash viz advances
received or bank margin moneys maintained)

 HUL's Current Ratio has increased from 1.34 in 2022 to 1.38 in 2023 to
1.64 in 2024. This indicates a slight improvement in the company's ability
to cover its short-term liabilities with its current assets.

 HUL's Quick Ratio has increased from 1.033 in 2023 to 1.329 in 2024 but
in 2022 it decreases 0.982. A clear reflection of the company’s overall
liquidity improvement as shown in Current Ratio analysis). This indicates

27
 a slight improvement in the company's ability to cover its short-term
liabilities with its quick assets, excluding inventory.

 As highlighted earlier by only considering the Cash and Cash Equivalents

(and not the other Bank Balances) HUL's Cash Ratio has decreased from
2022 in 0.330 to 0.380 in 2023 to 0.581 in 2024.

Liquidity Ratio Comparison between HUL and P&G:

Liquidity
Ratios HUL 2024 DABUR 2024
Current Ratio Current Assets 1.64 0.842
Current Liabilities
Quick Ratio (Current Assets- Inventory) 1.329 0.789
Current Liabilities
Cash Ratio Cash & Cash Equivalents 0.581 0.245
Current Liabilities

 The Current Ratio of both HUL and Dabur are below 1, marginally
higher for HUL Theoretically it has a better ability to cover its short-term
liabilities with its current assets. A higher CR or that matter a lower CR
may not be cause for any Liquidity anxieties for both the companies.

 Consequently, HUL also has a higher Quick Ratio compared to Dabur.

HUL’S higher quick ratio indicates a marginally better ability to cover
short.

 The Cash Ratio of Dabur is significantly higher than that of HUL. The
maintenance of cash balances could reflect on the company’s aggressive
or conservative policies of cash balances. Excessive cash may have signs
of better liquidity but lower profitability as the cash balances do not
generate any returns unless invested judiciously. Theoretically a higher
cash ratio suggests better immediate liquidity and the ability to meet
immediate obligations without relying on other assets.

(c) Activity Ratios HUL:

Activity Ratios:
Working Capital Formula HUL HUL HUL
31st March 31st March 31st March
2024 2023 2022
1.Receivable Turnover Sales 20.6526 21.6249 26.4974
Receivables
2.Receivable Days 365 17.673 16.879 13.775
Receivables Turn Over

28
  A higher ratio is generally favourable, as it implies faster and efficient
utilization of the asset. In this case, the receivable turnover decreased
from 2022 to 2024, suggesting a slight decrease in the efficiency of
receivables collection. Two factors contributing to this are apparent, one
sale has decreased by 0.97% in 2024, however the decreases in the trade
receivables has been 45%. The combined effect has lowered the
turnover ratio in 2024.

 The receivable days ratio represents the average number of days it takes
for the company to collect its accounts receivable. For HUL the lowering
of the Turnover ratio has increased the Receivable days. In this case, the
receivable days increased from 2022 is 13.77 days to 2023 is 16.87 Days
& 2024 is 17.67 days indicating higher receivable days in 2024.

3.Inventory Turnover COGS 15.86 8.38 7.07

Inventory
4.Inventory Days 365 43.452 43.518 51.588
Inventory Turnover

 A higher ratio could suggest better inventory management. The ratio

increased from 7.07 in 2022 & 8.38 in 2023 multiple in 15.86 in 2024.

 The inventory days ratio represents the average number of days it takes
for the company to sell its inventory. As a consequence of a higher
inventory turnover the inventory days decreased from say 43.45 Days in
2024 & 43.51 Days 2023 but in 2022 the inventory day will higher
51.58, a lower number indicates a shorter period and thus suggests more
efficient inventory turnover.

5.Payables Turnover Purchases 3.322 2.837

Payables
6.Payable Days 365 132.60 109.9 128.7
Payables Turnover

Inventory period+ 68.

7.Operating Cycle Accounts Receivable 65 60.397 65.363

Inventory period+
8.Cash Conversion Accounts Receivable -52.13 -49.476 -63.316

29
  The payables turnover ratio shows how quickly the company pays its
suppliers. A higher ratio suggests faster payment. In this case, the
payables turnover increased from 2.8x in 2022 & 3.3x in 2023, indicating
a slight improvement in the speed of paying suppliers

 A higher number of payable days suggests slower payment. In this case,

the payable days increased from an average 132 Days in 2024 & 109
Days 2023 and in 2022 is 128 Days, indicating a fairly higher
improvement in the speed of paying payables.

Operating Cycle and Cash Conversion:

 The operating cycle represents the average time it takes for the company
to convert its inventory into cash through sales. It is calculated by adding
the inventory days and the receivable days. In this case, the operating
cycle increased from 68 Days in 2024 & 60 Days in 2023 and 2022 is 65,
indicating a slight improvement in the efficiency of the company's
operating cycle.

 The cash conversion cycle is the time it takes for the company to convert
its investments in inventory and accounts receivable into cash. It is
calculated by subtracting the payable days from the operating cycle. A
negative value indicates that the company receives cash from customers
before it needs to pay its suppliers. Using trade credit to supplement the
working capital needs of the company. In this case, the cash conversion
cycle moved from negative 52 Days in 2024 & a negative 49 Days
2023&63 negative Days in 2022 , largely on account of the quicker
payment to the trade creditors.

Activity Ratio comparison Between HUL and Dabur:

Activity Ratios: HUL DABUR

Working Capital 2024 2024

1.Receivable
Sales
Turnover 20.6526 10.1619
Receivables
2.Receivable Days 365 17.6755 35.9184
Receivables Turn Over

3.Inventory Turnover COGS 15.86 2.78

Inventory
4.Inventory Days 365 43.452 76.164
Inventory Turnover

30
5.Payables Turnover Purchases
Payables

6.Payable Days 365 132.60 137

Payables Turnover

Inventory period+ Accounts

7.Operating Cycle Receivable 68.65 2013.47

8.Cash Conversion Inventory Period+ Accounts

Period receivable-payable -70 -0.80

1.Receivable Turnover:

The receivable turnover ratio indicates how quickly the companies collect their
accounts receivable. A higher ratio is generally favourable, as it implies faster
collection. In this case, HUL has a higher receivable turnover of 20.65 x as
compared to Dabur of 10.16 x, indicating that HUL churns its receivables more
quickly as compared to Dabur.

2. Receivable Days:

The receivable days ratio represents the average number of days it takes for the
companies to collect their accounts receivable. A lower number indicates
quicker collection. As a consequence of a higher turnover ratio for HUL, it has a
lower receivable days 17.67 Days compared to Dabur’s 35.91 Days, indicating
that HUL collects its receivables relatively more quickly.

3. Inventory Turnover:

The inventory turnover ratio measures how efficiently the companies manage
their inventory. A higher ratio suggests better inventory management. In this
case, HUL has a higher inventory turnover 15.86 x compared to Dabur’s 2.78x,
indicating that HUL marginally manages its inventory more efficiently.

4. Inventory Days:

The inventory days ratio represents the average number of days it takes for the
companies to sell their inventory. A lower number suggests faster turnover. In
this case, Dabur has lower inventory days 76 Days compared to HUL’s 43,
indicating that Dabur has a slightly lower holding period for inventory.

5. Payables Turnover:

31
The payables turnover ratio shows how quickly the companies pay their
suppliers. A higher ratio suggests faster payment. In this case, HUL has a higher
payables turnover compared to Dabur, indicating that HUL pays its suppliers
more quickly.

6. Payable Days:

The payable days ratio represents the average number of days it takes for the
companies to pay their payables. A higher number suggests slower payment. In
this case, HUL has a lower payable day’s ratio compared to Dabur, indicating
that HUL pays its payables more quickly.

7. Operating Cycle:

The operating cycle represents the average time it takes for the companies to
convert their inventory into cash through sales. It is calculated by adding the
inventory days and the receivable days. In this case, both companies have a
similar operating cycle, with a slightly longer operating cycle for Dabur.

8.Cash Conversion Period:

The cash conversion period is the time it takes for the companies to convert
their investments in inventory and accounts receivable into cash. It is calculated
by subtracting the payable days from the operating cycle. A negative value
indicates that the companies receive cash from customers before they need to
pay their suppliers. In this case, both companies have negative cash conversion
periods, but HUL has a higher cash conversion period compared to Dabur

(D) Solvency Ratio HUL:

31st March 31st March 31st March

Solvency Ratios 2024 2023 2022

1.Debt to Equity Total Liabilities 0.738 0.430 0.430

Equity

2.Debt Ratio Debt 0.0074 0.073 0.080

Debt+ Equity

3.Equity Ratio (1-Debt Ratio) 0.992 0.927 0.920

32
4.Interest Coverage 42.69
Ratio EBIT 130.49 120.78
Finance Cost

 HUL has a consistent Debt to Equity Ratio of 0.430 for 31st March 2022 &
2023 and 31st March 2024 is 0.738. The ratio suggests a moderate level of
leverage, with a significant portion of the company's assets financed by
equity.

 HUL's Debt Ratio has decreased by 0.007 to 2022 to 2023. The marginal
decrease indicates that the company relies less on debt to finance its assets.
A lower Debt Ratio suggests a lower financial risk and a greater reliance on
equity for financing.

 HUL's Equity Ratio has increased this in the 2022 is 0.920 to 2023 is 0.927
to 2024 is 0.992. This indicates that a larger portion of the company's assets
is funded by equity. A higher Equity Ratio suggests a stronger financial
position and a lower dependency on debt financing.

 HUL's Interest Coverage Ratio has improved from 130.49 in 2023 to 42.69
in 2024. This indicates that the company's EBIT is sufficient to cover its
interest expenses comfortably. A higher Interest Coverage Ratio signifies a
better ability to fulfil interest obligations.

Solvency Ratio comparison Between HUL and DABUR:

Solvency Ratios HUL 2024 Dabur 2024

1.Debt to Equity Total Liabilities 0.738 12.11
Equity

2.Debt Ratio Debt 0.074 0.0082

Debt + Equity

3.Equity Ratio (1-Debt Ratio) 0.992 0.991

4.Interest Coverage EBIT 42.69 20.00

33
Ratio
Finance Cost

 HUL has a lower Debt to Equity Ratio compared to Dabur. HUL's lower
ratio suggests a relatively lower reliance on debt for financing its
operations, whereas Dabur has a higher ratio indicating a higher
proportion of debt in its capital structure.

 HUL has lower Debt Ratio than Dabur. HUL’s lower ratio indicates a
lower reliance on debt financing in its capital structure compared to
Dabur.

 HUL has a higher Equity Ratio compared to Dabur. The Equity Ratio
represents the proportion of a company’s assets that are financed by
equity. HUL’s higher ratio indicates a higher reliance on equity financing
and a lower reliance on debt Financing compared to Dabur.

 HUL has a higher Interest Coverage Ratio than Dabur. HUL’s higher
ratio indicates a stronger ability to fulfil its interest obligations compared
to Dabur.

34
NEED IDENTIFICATION:

Based on the Ratio Analysis done focusing on the working capital issues a need
for further investigation on the relationship between the profitability and
liquidity of company.
This need was strengthened based on the emphasis the officials at HUL made
while interacting with them on the importance of the management of working
capital, essentially inventory. The location of the internship was at Chiplun
Factory which is one among the Home care production unit of HUL, hence the
emphasis was more on managing Inventory and Cash. At the same time
controlling costs was also a conscious exercise being carried out. This effort
emphasised the relationship between and the need to balance between liquidity
and profitability.

Before delving into the core investigation of the relationship it was considered
appropriate to look at an additional third competitor, namely P&G, along with
HUL and Dabur.

Introduction to the Research Investigation

A company's short-term financial strategy has two main goals: making

more money than it spends and ensuring it always has enough cash to
cover its bills. This balance is managed through working capital, which
involves decisions about things like pricing, inventory, and customer
payments.

One approach is a flexible policy, where the company keeps a lot of

cash and easily accessible assets on hand. This helps it handle
unexpected expenses quickly, but it can be costly because it ties up a lot
of money that could be used elsewhere. The more flexible the policy,

35
the more money it needs to keep in reserve, which can eat into profits.

The other approach is a restrictive policy, which focuses on minimizing

costs by keeping less cash tied up in assets. While this can save money,
it also means there's less cash available for emergencies, which can be
risky. However, it's cheaper because it doesn't tie up as much money in
low-yield assets.

In simple terms, companies have to balance making money with having

enough cash on hand. Flexible policies keep more cash available but
can be expensive, while restrictive policies save money but can be
riskier. It's about finding the right balance for each company's needs and
circumstances.

RESEARCH HYPOTHESIS

Hypothesis I

Null (H0): There is no significant relationship between Profitability attributed to

the Net Profit of a company and its Liquidity reflected in its Current Ratio.

Alternate (H1): There is a significant relationship between Profitability

attributed to the Net Profit of a company and its Liquidity reflected in its
Current Ratio.
Hypothesis II

36
Null (H0): There is no significant relationship between Profitability attributed to
the Gross Profit of a company and its Liquidity reflected in its Current Ratio.

Alternate (H1): There is a significant relationship between Profitability

attributed to the Gross Profit of a company and its Liquidity reflected in its
Current Rati

INTERPRETATION:

The following the corresponding interpretation have emerged during the course
of the internship and the analysis leading to the finalization of the Report.

 The importance of monitoring and managing the Supply Chain and

the usefulness of SAP in facilitating this.

 The evaluation of the overhead costs and its importance in their

allocation to determine the cost of each product lines.

 Periodically monitoring the profitability and liquidity ratios to

ensure that they do not deviate significantly from set benchmarks.

 The practical aspects of Balancing Liquidity and Profitability

particularly in emergency situations such as sudden surge in
demand for a product, supply shortage of a particular raw material,
issues regarding Vendor’s capability of maintaining a given
schedule etc.

 How dispatch works and its key performance like on time delivery,
order accuracy, truck utilization.

37
  Implementing SAP facilitates real-time monitoring and
management of the supply chain, enabling the organization to
respond swiftly to changes and maintain a competitive edge.

 Proper allocation of overhead costs ensures accurate product

pricing and financial reporting, which is vital for strategic decision-
making and maintaining profitability.

FINDINGS:

1. Effective supply chain management is critical for operational efficiency and

customer satisfaction. SAP systems provide robust tools for tracking and
optimizing supply chain processes.

2. Accurate evaluation and allocation of overhead costs are essential for

determining the true cost of each product line.

3. Regularly monitoring profitability and liquidity ratios is crucial to ensure

financial stability and adherence to benchmarks.

4. Balancing liquidity and profitability becomes particularly challenging during

emergencies, such as sudden surges in demand, supply shortages, or vendor-
related issues.

38
RECOMMENDATION:

The recommendations essentially flow from the findings emphasising the

importance of monitoring, manging and controlling the working capital
management in a Company. Related to this would be the significance and
importance be simultaneously attached to the Supply Chain management issues
at the Plant Level.

CONCLUSION:

In conclusion, the objectives outlined in this project have provided valuable

insights and practical applications of concepts related to in-bound supply chain
logistics, cost management, workplace environment, personal growth, and
working capital management.

Firstly, by applying the concepts of in-bound supply chain logistics studied in

the Business School to real work life situations, I have gained a deeper
understanding of how these concepts are implemented in practice. The
experience of working with Surf Excel plant of HUL has allowed me to witness
firsthand the operational processes and how they relate to cost management
within the factory. This has provided a practical context for learning and
applying these concepts.

39
Additionally, while adjusting to the work environment, i have gained insights
into the challenges and opportunities it presents. This experience has fostered
personal growth and equipped me with valuable skills that can be applied in
future professional endeavours.

Lastly, based on our observations and analysis during the project, we can
suggest measures to improve working capital management for the company.
These measures may include optimizing inventory levels, implementing
efficient cash flow management practices, and exploring potential cost-saving
opportunities. By adopting these suggestions, the company can enhance its
overall financial health and improve its ability to meet short-term obligations
while maximizing profitability.

Overall, this project has been instrumental in bridging the gap between
theoretical knowledge and practical application. It has provided a valuable
learning experience, enabling us to understand the intricacies of in-bound
supply chain logistics, cost management, workplace dynamics, personal growth,
and working capital management.

40
REFRENCES

https://www.hul.co.in/

hul 2022-23 annual report.pdf

toaz.info-the-ceo-factory-pr_039008df3d3de35781de07c69b3733a2.pdf

https://www.moneycontrol.com/

https://www.screener.in/

41
BALANCE SHEET OF Mar-24 Mar-23 Mar-22
HINDUSTAN
UNILEVER (in Rs. Cr.)

12 mths 12 mths 12 mths

EQUITIES AND
LIABILITIES

SHAREHOLDER'S
FUNDS

Equity Share Capital 235 235 235

TOTAL SHARE 235 235 235

CAPITAL

Reserves and Surplus 50,738.00 49,986.00 48,525.00

TOTAL RESERVES 50,738.00 49,986.00 48,525.00

AND SURPLUS

TOTAL 50,973.00 50,221.00 48,760.00

SHAREHOLDERS
FUNDS

NON-CURRENT
LIABILITIES

Long Term Borrowings 0 0 0

Deferred Tax Liabilities 6,454.00 6,325.00 6,141.00

[Net]

Other Long Term 5,695.00 2,317.00 2,339.00

Liabilities

Long Term Provisions 1,551.00 1,335.00 1,553.00

TOTAL NON-CURRENT 13,700.00 9,977.00 10,033.00

LIABILITIES

CURRENT LIABILITIES

Short Term Borrowings 0 0 0

Trade Payables 10,148.00 9,391.00 8,864.00

Other Current Liabilities 1,926.00 1,857.00 1,746.00

Short Term Provisions 329 379 334

TOTAL CURRENT 12,403.00 11,627.00 10,944.00

LIABILITIES

42
TOTAL CAPITAL AND 77,076.00 71,825.00 69,737.00
LIABILITIES

ASSETS
NON-CURRENT
ASSETS

Tangible Assets 7,178.00 6,189.00 5,813.00

Intangible Assets 45,201.00 45,216.00 45,221.00

Capital Work-In-Progress 915 1,020.00 901

Other Assets 0 0 0

FIXED ASSETS 53,294.00 52,425.00 51,935.00

Non-Current Investments 983 983 612

Deferred Tax Assets 0 0 0

[Net]
Long Term Loans And 392 339 541
Advances

Other Non-Current 2,111.00 2,029.00 2,002.00

Assets

TOTAL NON-CURRENT 56,780.00 55,776.00 55,090.00

ASSETS

CURRENT ASSETS

Current Investments 4,510.00 2,811.00 3,510.00

Inventories 3,812.00 4,031.00 3,890.00

Trade Receivables 2,690.00 2,735.00 1,932.00

Cash And Cash 7,216.00 4,422.00 3,618.00

Equivalents

Short Term Loans And 37 35 34

Advances

OtherCurrentAssets 2,031.00 2,015.00 1,663.00

TOTAL CURRENT 20,296.00 16,049.00 14,647.00

ASSETS

TOTAL ASSETS 77,076.00 71,825.00 69,737.00

Contingent Liabilities 2,836.00 3,137.00 2,814.00

CIF VALUE OF
IMPORTS

Raw Materials 0 0 0

Stores, Spares And 0 0 0

Loose Tools

43
Trade/Other Goods 0 0 0

Capital Goods 0 0 0

EXPENDITURE IN
FOREIGN EXCHANGE

Expenditure In Foreign 4,463.00 3,695.00 3,131.00

Currency

REMITTANCES IN
FOREIGN
CURRENCIES FOR
DIVIDENDS

Dividend Remittance In -- -- --
Foreign Currency

EARNINGS IN FOREIGN
EXCHANGE

FOB Value Of Goods -- -- --

Other Earnings 1,497.00 1,574.00 1,527.00

BONUS DETAILS

Bonus Equity Share 131.69 131.69 131.69

Capital

NON-CURRENT
INVESTMENTS

Non-Current Investments -- -- --
Quoted Market Value

Non-Current Investments 1 1 2
Unquoted Book Value

CURRENT
INVESTMENTS

Current Investments 4,510.00 2,811.00 3,510.00

Quoted Market Value

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KEY FINANCIAL
RATIOS OF HINDUSTAN Mar-24 Mar-23 Mar-22
UNILEVER (in Rs. Cr.)

45
PER SHARE RATIOS

Basic EPS (Rs.) 43.05 42.4 37.53

Diluted EPS (Rs.) 43.05 42.4 37.53

Cash EPS (Rs.) 47.71 46.77 41.89

Book Value
[ExclRevalReserve]/Shar 216.91 213.71 207.49
e (Rs.)

Book Value
[InclRevalReserve]/Share 216.91 213.71 207.49
(Rs.)

Dividend / Share(Rs.) 42 39 34

Revenue from
257.31 251.68 217.84
Operations/Share (Rs.)

PBDIT/Share (Rs.) 64.52 60.73 54.88

PBIT/Share (Rs.) 59.86 56.35 50.51

PBT/Share (Rs.) 58.19 55.66 49.95

Net Profit/Share (Rs.) 43.04 42.39 37.52

PROFITABILITY RATIOS

PBDIT Margin (%) 25.07 24.13 25.19

PBIT Margin (%) 23.26 22.38 23.18

PBT Margin (%) 22.61 22.11 22.93

Net Profit Margin (%) 16.72 16.84 17.22

Return on Net worth /

19.84 19.83 18.08
Equity (%)

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Return on Capital
21.74 21.99 20.19
Employed (%)

Return on Assets (%) 13.12 13.86 12.64

Total Debt/Equity (X) 0 0 0

Asset Turnover Ratio (%) 0.81 0.84 0.74

LIQUIDITY RATIOS

Current Ratio (X) 1.64 1.38 1.34

Quick Ratio (X) 1.33 1.03 0.98

Inventory Turnover Ratio

4.54 4.86 4.36
(X)

Dividend Payout Ratio

92.92 84.91 85.26
(NP) (%)

Dividend Payout Ratio

83.82 76.95 76.38
(CP) (%)

Earnings Retention Ratio

7.08 15.09 14.74
(%)

Cash Earnings Retention

16.18 23.05 23.62
Ratio (%)

VALUATION RATIOS

Enterprise Value (Cr.) 5,25,822.75 5,96,884.25 4,77,861.75

EV/Net Operating
8.7 10.09 9.33
Revenue (X)

EV/EBITDA (X) 34.68 41.82 37.06

MarketCap/Net Operating
8.82 10.17 9.41
Revenue (X)

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Retention Ratios (%) 7.07 15.08 14.73

Price/BV (X) 10.46 11.97 9.87

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