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FINANCIAL PERFORMANCE

ANALSIS IN HATSUN
Guided by
Dr. Shailesh Rastogi
Dean of MBA program
Thiagarajar school of management.
By
Anand J
1511010
II MBA

ABOUT COMPANY
The Cornerstone of the Brand Philosophy of Hatsun Milk & Milk
products stems from the product essence in itself. Every product
coming from the stable is Made from the Purest of Cow Milk.
Milk sourced from very fine quality cows that are reared in the
pastoral heart lands. Fed on lush green grass, drinking clean water,
breathing in crisp fresh air and basking in golden sunlight, the cows
provide creamy, frothy milk that goes into the making of every dairy
product of Hatsun.

CONT
The brand commands a national presence and is
available in various product forms- Cooking & Table
Butter, Ghee, Varieties of Curd, Dairy Whitener.
Coming in various sizes and packaging formats, the
brand is rapidly expanding its frontiers and growing at a
steady pace.
Estimated market share of close to 35% in south India.

HATSUNS OTHER MILK PRODUCTS

Hatsun curd
Hatsun paneer
Hatsun Ghee
Hatsun Dairy Whitener
Hatsun Butter Milk
Hatsun Extra Cooked Ghee
Hatsun Butter
Hatsun Cooking Butter
Hatsun Skimmed Milk Powder

FINANCIAL ANALYSIS

Financial analysis refers to an assessment of the


viability, stability and profitability of a business,
sub-business or project.

OBJECTIVE

The main objective of the study is to understand the


financial performance of the company and other financial
parameters.
To understand, analyse and interpret the basic concept of
financial statement of different diary industry

RESEARCH METHODOLOGY
Research

is the systematic process of collecting and analyzing data in


order to increase our understanding of the phenomenon about which we
are concerned or interested
Research methodology involves the collection of theories, concepts or
ideas, comparative studies to different approaches and individual
methods which are conduced when a research work is performed.

RESEARCH DESIGN

Research Design is the strategy for the study and the plan by which
the strategy is to be carried out.
It is the set of decisions that make up the master plan specifying the
methods and procedures for the collection, measurement and
analysis of data. The project adopts the following research design.

TYPE OF RESEARCH - ANALYTICAL


STUDY

Analytical study is carried out when the existing information is used


to solve a problem.
In this research, using the companys financial information certain
grey areas are identified and highlighted where in the company has
to bring about improvement. So the study can be termed as
analytical in nature.

MODE OF DATA COLLECTION


The project is based on secondary data collection
method.
The secondary data were collected from Company
annual reports and Companys websites.

PERIOD OF THE STUDY

The present study deals with the data collected from the annual
reports and other relevant documents for the period commencing
from 2012-2013 to 20014-2015.

TOOLS AND TECHNIQUES

Ratio analysis.

FINANCIAL RATIO ANALYSIS


Financial ratios are mathematical comparisons of
financial statement accounts or categories. These relationships
between the financial statement accounts help investors,
creditors, and internal company management understand how
well a business is performing and areas of needing
improvement.

RATIOS USED
CURRENT RATIO
The companys ability to meet current obligations, the current assets must be
sufficient to pay current liabilities.
Current Assets/Current Liabilities
QUICK RATIO
Quick assets are those assets, which are readily convertible into cash. They include
cash and bank balances, bills receivable, debtors, short-term investments
current Assets - Inventories
Current Liability

CONT
DEBT EQUITY RATIO
Indicates what is the proportion of fixed interest bearing capital taken by the company, as compared
to the equity shareholders capital.
Total Long Term Debts / Shareholders Fund

INTEREST COVERAGE RATIO


The interest coverage ratio formula is calculated by dividing the EBIT, or earnings before interest
and taxes, by the interest expense.
EBIT/Interest

CONT
OPERATING MARGIN RATIO
The operating margin formula is calculated by dividing the operating income by the
net sales during a period.
EBIT/Net sales

GROSS PROFIT MARGIN


The difference between sales and the manufacturing cost of goods sold.
Gross profit/Sales

CONT
NET PROFIT RATIO
Obtained when operating expenses, interest and taxes are subtracted from the
gross profit.
Net profit/Sales
RETURN ON ASSET RATIO
The return on assets ratio formula is calculated by dividing net income by
average total assets.
Net income/Average assets

CONT
RETURN ON INVESTMENT
The return on investment formula is calculated by subtracting the cost from the
total income and dividing it by the total cost
Investment revenue-investment cost
Investment cost

RATIO ANALYSIS OF HATSUN


Name

Ratio

Description

1.11

> 2 is Good,
< 2 is Not Good

A liquidity ratio that measures a


companys ability to pay short-term
obligations. The higher the current ratio,
the more capable the company is of
paying its obligations.

0.39

> 1 is Good,
< 1 is Not Good

The quick ratio measures a company's


ability to meet its short-term obligations
with its most liquid assets. For this
reason, the ratio excludes inventories
from current assets

3.15

> 2 is Good,
< 2 is Not Good

It is used to determine how easily a


company can pay interest on
outstanding debt. It is calculated by
dividing a company's EBIT by the
interest expenses.

Current Ratio
(x)

Quick Ratio
(x)

Interest
Coverage
Ratio (x)

Good/Not Good

RATIO ANALYSIS OF HATSUN


Name

Ratio

Description

1.27

< 2 is Good,
> 2 is Not Good

A measure of a companys financial leverage


calculated by dividing its total liabilities by
stockholders equity. The debt/equity ratio also
depends on the industry in which the company
operates.

0.57

> 5% is Good,
< 5% is Not Good

An indicator of how efficient management is at


using its assets to generate earnings.
Calculated by dividing a companys annual
earnings by its total assets

14.07

> 18% is Good,


< 18% is Not Good

Also called Return on net worth, it measures a


company's profitability by revealing how much
profit a company generates with the money
shareholders have invested, it is calculated by
dividing the net profit after tax by
shareholder's fund For high growth companies
you should expect a higher ROE.

Debt Equity
Ratio (x)

Return On
Asset (%)

Return On
Equity (%)

Good/Not Good

VARIATION OF FINANCIAL RATIOS


YEAR

HATSUN

NESTLE

KWALITY

MODERN
DIARIES

2010

0.45

0.72

4.00

1.29

2011

0.69

0.88

9.18

0.83

2012

0.58

1.31

13.40

1.23

2013

0.43

1.71

10.48

1.45

2014

1.42

1.45

7.28

2.28

2015

1.11

1.01

16.04

2.06
CURRENT RATIO

Current ratio

18
16
14
12
10
8
6
4
2
0
HATSUN

NESTLE
2010

2011

KWALITY
2012

2013

MODERN DIARIES
2014

2015

YEAR

HATSUN

NESTlE

KWALITY

MODERN
DIARIES

2010

4.01

8.83

4.57

2011

1.08

0.09

17.63

5.46

2012

1.01

0.56

-18.95

5.70

2013

1.58

0.50

3.16

6.94

2014

1.37

0.49

-0.82

8.08

2015

1.27

0.01

1.78

7.08

DEBT - EQUITY

Debt-equity ratio

20
15
10
5
0
HATSUN
-5

NESTlE

KWALITY

MODERN DIARIES

-10
-15
-20
-25
2010

2011

2012

2013

2014

2015

YEAR

HATSUN

NESTLE

KWALITY

MODERN
DIARIES

2010

0.24

13.09

0.49

-0.41

2011

1.38

12.80

1.00

-0.09

2012

1.66

12.81

3.80

103.45

2013

2.06

12.28

2.61

-0.18

2014

3.28

12.02

2.77

1.48

2015

3.61

12.89

2.67

-3.55

NET PROFIT MARGIN

Net profit margin

120
100
80
60
40
20
0
HATSUN
-20
2010

NESTLE
2011

KWALITY
2012

2013

MODERN DIARIES
2014

2015

YEAR

HATSUN

NESTLE

KWALITY

MODERN
DIARIES

2010

15.15

44.76

62.60

-7.71

2011

18.88

40.45

66.53

19.44

2012

22.30

37.74

51.58

-3.69

2013

19.95

32.74

39.61

48.53

2014

23.36

30.59

37.81

-81.61

2015

14.07

11.80

28.06

-71.65

RETURN ON INVESTMENT

Return on investment

80
60
40
20
0
HATSUN
-20

NESTLE

KWALITY

MODERN DIARIES

-40
-60
-80
-100
2010

2011

2012

2013

2014

2015

CONCLUSION

This study shows that the financial performance of Hatsun is efficient to maintain the
profitability being attained.

Inadequate working capital will lead to lack in liquidity position and it decreases the
profit of the company.

The level of current assets has to be increased in order to meet the increasing payables.

Creditors should be paid back on time.

Thus, it can be concluded that this company is performing well compare to previous year.