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Strategy Management

Aayush Sharma – 1927501


Arun S - 1927505
Neshanth - 1927561
Suganesh S - 1927623
HUL
2020 - 2019 2019 - 2018 2018 - 2017

Current Ratio 1.3 1.4 1.3


Quick Ratio 0.83 0.73 0.68
Debt Equity Ratio 1.4 1.3 1.4
Times Interest Earned 88.63 313.46 363.65
Inventory Turnover 15.1 15.8 14.7
Fixed Asset Turnover (No. of Times) 7.6 8 6.9
Total Assets Turnover 3.13 2.679 3.166
Gross Profit Margin 22.3 21.22 19.69
Operating Profit Margin 24.75 22.59 21.07
Net Profit Margin 17.6 16 15.1
ROA - Return on Total Assets 37.1 35.38 32.69
EPS 31.3 27.8 24.2
Price Earnings Ratio 70.57
DPS 34.5 22 20
Annual % Gowth in Gross Sales 1.6 8.78  
Net Income 25.1 22.9 21
Inference

• Current ratio computed is greater than 1, it means that the company has adequate
current assets to settle its current liabilities.

• Debt to equity ratio is greater that 1 for 3 years, the company’s assets are more
funded by the debt.

• High operating profits resulted that the company has effective control of costs, or that
sales are increasing faster than operating costs.

•  Increasing ROA shows that the company has a solid performance as far as finance
and operation of the company is concerned and earning more money on less
investment.
Inference (Contd)

• Gross profit has been increasing year by year, it indicates HUL efficiently uses labor
and supplies in the production process

• Higher EPS shows a sign of better earnings, strong financial position and therefore
shows reliable for the investors to invest in the company.

• Increased level of DPS is considered to be a positive signal as it shows that company


has more confidence in its future earnings.

• Net Income above 20% which makes them more advantage over their competitor
and protect themselves during hard times.
Strategies

Recommended strategies

• Diversification strategy
• Integration strategy

As the company performance is good, defensive strategy and intensive strategy is not
preferred.
Integration:

Integration Strategy also called as Management Control Strategy

Integration strategies allows a firm to gain control over distributors, suppliers and
competitors.

Horizontal integration: since, the increased in last year sales in very less at 1.6 %, so only
way to increase the sales would be to go for HI

Not vertical integration, because HUL’s profit margin is increasing on you. These shows
the costs are under control
Diversification:

Diversification strategy allows a firm to enter additional line of business that are
different from current products, services and markets.

Related and unrelated diversification,

Related diversification in health and beauty care because the 45% revenue share is from
this category

Unrelated diversification in food and refreshments as this segment only has 19%
revenue share