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Financial Trend analysis of
HERO MOTOCORP LTD.
Submitted by: Submitted to
Pawan kumar Dr Anjali Munde
B Com (Hons.)
Sem. 3
A3104616308
Acknowledgement
This is the final submission of my project report
on Financial trend analysis of HERO
MOTOCORP LTD. as a part of my internship.
This project would not have been possible
without the kind support and help of many
individuals. I would like to extend my sincere
thanks to all of them. I express my deep sense
of gratitude to my faculty guide Dr Anjali
Munde for her guidance and constant
supervision as well as for providing necessary
information regarding the project.
Pawan Kumar
INDEX
S.no. Topic
1. Objective Of Study
2. Background and introduction
3. Financial tools and Techniques
4. Balance sheet
5. Ratio analysis (Table Review)
6. Analysis of Ratios
7. Conclusion
OBJECTIVE OF STUDY
To study the financial performance analysis of
HERO MOTOCORP LTD..
To analyze the financial changes over a period
of three years.
To analyze the financial statements of the
company by using financial tools.
To evaluate the financial position of the
company in terms of solvency, profitability,
activity and earning ratios.
To suggest effective measures in the existing
system of the company.
BACKGROUND & INTRODUCTION
Hero Motocorp Ltd., formerly Hero Honda, is an
Indian motorcycle and scooter manufacturer based
in New Delhi, India. The company is the largest two-
wheeler manufacturer in world and also in India
where it has a market share of about 46% in the
two-wheeler category. The 2017 Forbes list of the
2000 World's Most Respected Companies has Hero
Honda Motors ranked at #1587. As of May 2017,
the market capitalisation of the company was US$
10 billion .
HISTORY
Hero Honda started its operations in 1984 as a joint
venture between Hero Cycles (sometimes called
Hero Group, not to be confused with the Hero
Group food company of Switzerland) of India
and Honda of Japan. In 2010, when Honda decided
to move out of the joint venture, Hero Group
bought the shares held by Honda. Subsequently, in
August 2011 the company was renamed Hero
MotoCorp with a new corporate identity.
In June 2012, Hero MotoCorp approved a proposal
to merge the investment arm of its parent Hero
Investment Pvt. Ltd. with the automaker. This
decision came 18 months after its split from Hero
Honda.
"Hero" is the brand name used by the Munjal
brothers for their flagship company, Hero Cycles
Ltd. A joint venture between the Hero Group and
Honda Motor Company was established in 1984 as
the Hero Honda Motors Limited at Dharuhera.
India. Munjal family and Honda group both owned
26% stake in the Company.
During the 1980s, the company introduced
motorcycles that were popular in India for their fuel
economy and low cost. A popular advertising
campaign based on the slogan 'Fill it Shut it
Forget it' that emphasized the motorcycle's fuel
efficiency helped the company grow at a double-
digit pace since inception. In 2001, the company
became the largest two-wheeler manufacturing
company in India and globally. It maintains global
industry leadership to date. The technology in the
bikes of Hero Motocorp (earlier Hero Honda) for
almost 26 years (19842010) has come from the
Japanese counterpart Honda.
FINANCIAL TOOLS AND TECHNIQUES
Classification of Ratios
Ratios may be classified into four categories as
follows:
1. Liquidity ratio
2. Solvency ratio
3. Activity or Turnover ratio
4. Profitability ratio
1. Liquidity ratio- It refers to the ability of the firm
to meet its current liabilities. These are also
called as Short term Solvency Ratios. These
ratios are used to access the short term
financial position of the concern. If the firm
wants to take the short-term loan from the
bank, the bankers also study the liquidity ratio
to access the margin of the current assets and
current liabilities. It includes two ratios-
Current ratio
Quick ratio or liquid ratio
Current ratio- The ratio explains the relationship
between current assets and current liabilities of a
business. This ratio is used to meet firms ability to
meet its short-term liabilities on time. The ideal
ratio is 2:1 which means the current assets of
business be twice the current liabilities.
Current ratio = Current assets
Current liabilities
average inventory
Working Capital*
SHAREHOLDER'S FUNDS
NON-CURRENT LIABILITIES
CONTINGENT LIABILITIES,
COMMITMENTS
Expenditure In Foreign
0 272.3 403.57
Currency
Dividend Remittance In
- - -
Foreign Currency
NON-CURRENT INVESTMENTS
Non-Current Investments
288.11 486.06 615.34
Quoted Market Value
Non-Current Investments
1,229.43 748.73 329.94
Unquoted Book Value
CURRENT INVESTMENTS
*(Source : http://www.moneycontrol.com/financials/heromotocorp/balance-
sheetVI/HHM#HHM)
Ratio Analysis Of HERO MOTOCORP LTD.
4. Profitability Ratio
The gross profit percentage in the Mar 15 was
10.88 which increased to 14 in Mar 16 and
increased to 14.54 in Mar 17 which shows that
there is an increase in the sale price of goods
without corresponding increase in in cost of
revenue from operation.
THANK-YOU !