FACULTY OF MANAGEMENT AND COMMERCE

FUNDAMENTALS OF FINANCIAL ACCOUNTING

RESEARCH PROJECT
On
FINANCIAL STATEMENT ANALYSIS OF HUL AND DABUR
CORPORATION

By

ABHISHEK M M -PES2UG23BB005
BHARATH SIMHA REDDY S -PES2UG23BB020
+

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ABSTRACT:
Hindustan Unilever Limited (HUL) and Dabur were analyzed over a five-year period in this
financial research. Sales, tax, net profit, total assets, total liabilities, and share prices were all
investigated in the study for both the companies. In comparison to Dabur, the findings clearly
show HUL's better financial performance and market domination across all parameters,
demonstrating its strong expansion, strategic management, and reliability.

Keywords:

Financial statement, Trend analysis, HUL, Dabur, sales, net profit.

INTRODUCTION:
Financial statements are written documents that describe a company's commercial activity
and financial performance. Government authorities, accountants, and corporations, among
others, frequently audit financial statements to verify accuracy and for tax, financing, or
investing purposes. The balance sheet, income statement, cash flow statement, and statement
of changes in equity are the primary financial statements for for-profit businesses. Nonprofit
organizations employ a similar but distinct set of financial statements.

Financial statements are written papers that summarize the commercial activities and
financial performance of a company. Financial statements are often audited by government
authorities, accountants, and corporations, among others, to ensure correctness and for tax,
financing, or investing purposes. For-profit businesses' major financial statements include the
balance sheet, income statement, cash flow statement, and statement of changes in equity.
Nonprofits use a similar but unique set of financial statements.

Decision Making: Financial statements are used by investors and creditors to make
investment decisions. They can measure the company's stability and growth possibilities by
studying financial documents, which helps them determine whether to invest in or lend
money to the business.

Accountability: Financial statements improve organizational transparency. They provide a

comprehensive overview of the company's financial activities and enable stakeholders, such
as shareholders and the general public, to hold management accountable for financial
decisions.

Budgeting and planning: Businesses make budgets and financial forecasts using past financial
data. Companies can detect trends and patterns in before financial accounts, allowing them to
establish feasible and achievable financial strategies for the future.

Financial statement analysis is a key procedure that analyses a company's performance,

stability, and profitability by analysing financial data presented in reports such as balance
sheets, income statements, and cash flow statements. To evaluate connections and trends in

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data, analysts use a variety of techniques such as horizontal and vertical analysis, ratio
analysis, and cash flow analysis. A comparison to industry benchmarks or competitors
provides further context. This evaluation not only benefits investors and creditors in making
decisions, but it also assists management in strategic planning by identifying the business's
strengths, shortcomings, and areas for progress. Overall, financial statement analysis is useful
in comprehending a company's financial health and making sound economic decisions.

Financial statement analysis is important to many stakeholders in the business sector. It gives
important details into a company's financial health for investors, allowing them to make
informed investment decisions. Creditors use it to determine the risk of borrowing by
analysing trustworthiness. Analysis is used by management to discover opportunities for
operational improvement, which aids strategic planning. Government authorities use it to
monitor and ensure compliance. Analysts also use financial statement analysis to forecast
market trends. Stakeholders can evaluate profitability, solvency, liquidity, and overall
performance by knowing difficult financial data, enabling rational decision-making and
supporting firm stability and growth.

REVIEW OF LITERATURE:
Financial management involves calculating ratios, equity, and debt. The set of procedures used by a business or
organization to plan, budget, examine, manage, regulate, search, and deposit funds is known as financial
management.(Hasanaj & Kuqi, 2019). Businesses and MSMEs are required to submit quarterly or annual
financial reports, which are helpful in understanding their revenue and expenses. Understanding financial
statements is crucial since they play a vital role in financial management.(Maisharoh & Riyanto, 2020).
Financial management also refers to the written records used by businesses or organizations to communicate
their financial performance and company operations. Financial statements are one of the many sources of
information about a firm. Due to the significance of financial statements in understanding a company's cash
flow, every business needs to have them.(Omar et al., 2014) Both standard setters and mainstream accounting
research concur that the creation of financial statements is primarily done for the benefit of investors. To help
investors value equity for investment objectives, accounting reports are provided.(Olugbenga & Atanda, 2014).
To determine if quarterly and annual sales are increasing or decreasing, the company provides financial data in a
transparent manner. Its financial statements can be controlled by the application of financial statement analysis.
(Ahmed, 2018) claims that analysing financial statements is the process of detecting financial features. Thus, the
organization is required to analyse the financial accounts in addition to organizing them. In order to more
effectively evaluate operational managers, (Enyi, 2019)suggest using a modified version of the traditional
DuPont model in order to eliminate the effects of financial leverage and other factors not under the control of
those managers. Using operating income to sales and asset turnover based on operating assets limits the
performance measure of management to those factors over which management has the most control. The
modified DuPont model has become widely recognized in the financial analysis literature. (Ehiedu, 2014)
proposed an additional alteration to the DuPont model. Five distinct ratios were obtained from this change, and
these ratios add together to make ROE. In their adjustment, they admit that managers making operations and
financial choices do not always find value in the financial statements companies create for their annual reports,
which are primarily read by creditors and tax collectors. It is crucial to stress that banks have different corporate
governance than companies in other, less regulated industries while conducting bank performance analyses.
Consequently, regulators, investors, depositors, bank management, and other stakeholders face new difficulties
as a result of these disparities. Because of bank rules, bank managers have to deal with a more complicated
environment than their counterparts in the industry. Regulators have tremendous incentives to influence
managerial activity in addition to the expectations made by shareholders, and this may conflict with those

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demands.(Almazari, 2012). (Yugo Hasan et al., 2022) emphasize the distinctions between the corporate
governance of manufacturing companies and banks as well as the idea that industry-specific governance systems
exist. In general, a firm's size, industry, regulations, and other factors all affect the components of its governance
structure, which in turn affects the goals and methods of performance analysis. These factors include the nature
and structure of the firm's assets and liabilities (leverage, share of financial assets, business risk, cash-flow
patterns), as well as firm size. A series of procedures known as governance is how investors and other
stakeholders protect their interests from the company. Conflicts of interest arise when managers oversee the
company. Additionally, a superb overview of current theoretical and empirical research is provided by (Hall et
al., 2013)

CONCEPTUAL FRAMEWORK:
Trend analysis is a systematic approach to look at and analyze data over a certain time period
in order to identify trends and determine the direction in which an event is trending. It
involves collecting and evaluating data points, tracking them over time, and using statistical
tools to identify trends such as upward, downward, or horizontal movement. Businesses and
analysts can obtain significant insights into market behavior, customer preferences, and
economic movements by studying these patterns. Trend analysis is critical for making
informed predictions, developing strategic plans, and responding to changing conditions,
allowing firms to stay ahead in a volatile environment.

Trend analysis is important because it provides important insights into historical and present
data, allowing organizations and researchers to predict future trends. Organizations may
make educated decisions about their goals, investments, and operations by finding patterns
and trends in data sets. It helps investors predict changes in the market and guide their
portfolio choices in finance. It aids firms in understanding consumer behavior, allowing for
focused advertising and product development. It aids in disease tracking and resource
allocation in healthcare. Trend research is critical for proactive decision-making, risk
management, and market adaption, guaranteeing that firms and professionals may efficiently
handle uncertainties and capitalize on new possibilities.

RESEARCH OBJECTIVE:
To analysis the financial performance of the Hindustan Unilever Limited's (HUL) and Dabur
pt limited for 5 years through trend analysis.

RESEARCH METHODOLOGY:
DATA COLLECTION:
The data are primarily taken from the secondary Data. It has been collected from the financial
statements of the dauber and HUL for 5 years.

DATA ANALYSIS TECHNIQUES:

 Tables
 Line graph
 Pai chart
 Bar Graph

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DATA ANALYSIS AND INTERPRETATION:
HUL HINDUSTAN UNILEVER LIMITED'S:
SALES:
Year Sales (in crores)
2019 15144
2020 15597
2021 15215
2022 15496
2023 15623

Sales
15700
15623
15597
15600
15496
15500

15400

15300
15215
15200 15144
15100

15000

14900
2019 2020 2021 2022 2023

Interpretation:

Hindustan Unilever Limited's (HUL) sales appear to have increased significantly between
2019 and 2023. Sales climbed from 15144 crores in 2019 to 15623 crores in 2023, indicating
a significant growth in income throughout this time frame. This growth could be the result of
a number of things, including rising product demand, market expansion, the introduction of
new products, better marketing techniques, or even mergers and acquisitions that may have
helped the company's sales numbers rise.

TAX:
Year TAX (in crores)
2019 2544
2020 2409
2021 2606
2022 2987
2023 3201

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 TAX
3500
3201
2987
3000
2544 2606
2500 2409

2000

1500

1000

500

0
2019 2020 2021 2022 2023

Interpretation:

HUL reported a tax expense of 2544 crores in 2019; by 2023, this amount had grown to 3201
crores. This suggests that HUL's taxes over this period have increased significantly.

Such an increase may result from a number of circumstances, such as modifications to the
company's financial structure, changes in tax regulations, revenue growth that raises tax
obligations, or other variables that affect the company's tax responsibilities.

NET PROFIT
Year NET PROFIT (in crores)
2019 6060
2020 6764
2021 8000
2022 8887
2023 10145

NET PROFIT
12000
10145
10000
8887
8000
8000
6764
6060
6000

4000

2000

0
2019 2020 2021 2022 2023

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Interpretation:

Between 2019 and 2023, Hindustan Unilever Limited's (HUL) net profit will expand
significantly. From 6060 crores in 2019 to 10145 crores in 2023, the net profit increased. This
indicates a notable rise of 22,865 crores within this time frame.

To determine the actual rise in net profit between 2019 and 2023:

Net profit in 2019 = 6060 crores - Net profit in 2023 = 10145 crores equals 4082 crores.

This demonstrates a notable rise in HUL's net profit over the specified years.

TOTAL ASSETS:
Year Total Assets (in crores)
2019 18629
2020 20,153
2021 68757
2022 70,517
2023 73,087

Total Asset
80000
73,087
68,757 70,517
70000

60000

50000

40000

30000
18,629 20,153
20000

10000

0
2019 2020 2021 2022 2023

Interpretation:

Hindustan Unilever Limited (HUL) had a rise in total assets from 18629 crores in 2019 to
73087 crores in 2023. This represents a 350.2% increase within this time frame. We can
observe a jump in total assets of 48604 crores in just one year that is financial year 2020-
2021.

An asset is a financial resource that a person, business, or nation owns or controls and that it
is anticipated will yield advantages in the future.

TOTAL LIABILITIES :
Year Total Liabilities (in crores)
2019 10786

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 2020 11939
2021 21083
2022 21260
2023 22783

Total Liability
25000
22783
21083 21260
20000

15000
11939
10786
10000

5000

0
2019 2020 2021 2022 2023

Interpretation:

According to the data you have given, Hindustan Unilever Limited's (HUL) total liabilities
are expected to rise from 10786 crores in 2019 to 22783 crores in 2023. This shows that
while the corporation has grown over this time, its total liabilities have also increased.

SHARE PRICES:
Year Share price
2019 1781
2020 1927
2021 2387
2022 2416
2023 2576

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Interpretation:

HUL's (Hindustan Unilever Limited) share price continues to rise over the years. It began at
1781 rupees in 2019 and increased over time to 2576 rupees in 2023. This steady increase
reflects investor confidence, which is likely supported by HUL's good financial performance
and market domination, making it an appealing and dependable stock market investment.

DABUR:
SALES:
Year Sales (in crores)
2019 6189
2020 6241
2021 7138
2022 8110
2023 8597

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Interpretation:

Dauber's sales have increased by 8597 crores (2019 - 6189 crores) or 2408 crores between
2019 and [Link] a result, Dauber's sales increased by 2408 crores between 2019 and 2023.
This growth could be the result of a number of things, including rising product demand,
market expansion, the introduction of new products, better marketing techniques, or even
mergers and acquisitions that may have helped the company's sales numbers rise.

TAX:
Year TAX (in crores)
2019 239
2020 238
2021 301
2022 468
2023 455

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Interpretation:

The increase in Dauber tax revenue from 239 crores in 2019 to 455 crores by 2023 signifies a
significant growth in tax collection within this specific category over the mentioned time
span. This jump indicates a substantial rise of 216 crores over the course of four years.

THERE COULD BE VARIOUS REASONS FOR SUCH A DRASTIC INCREASE IN TAX REVENUE.
FACTORS CONTRIBUTING TO THIS EXPANSION MIGHT INCLUDE ECONOMIC GROWTH, TAX
POLICY CHANGES AND MARKET DEMAND , ETC .

NET PROFIT:

Year NET PROFIT (in crores)

2019 1445
2020 1447
2021 1695
2022 1744
2023 1702

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Interpretation:

Dabur's net profit increased significantly during this time, rising from 1445 crores in 2019 to
1744 crores by 2023. This indicates that the company's financial performance is on the rise.
The company's improved profitability is demonstrated by the rise in net profit, which shows
the company's capacity to produce greater earnings after deducting all costs, taxes, and other
costs.

TOTAL ASSETS:
Year Total Assets (in crores)
2019 5578
2020 6100
2021 7504
2022 8592
2023 9352

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 Total Assets:

10000 9352
9000 8592
8000 7504
7000
6100
6000 5578
5000
4000
3000
2000
1000
0
2019 2020 2021 2022 2023

Interpretation:

During the years 2019 to 2023, the well-known consumer products company Dabur had a
notable increase in its overall assets. By 2023, the entire assets had increased to 9352 crores
from 5278 crores in 2019. This indicates a noteworthy rise in income of 4074 crores during
the course of the four years.

Dabur's assets rise throughout this period is indicative of a high financial performance and
enhanced profitability.

TOTAL LIABILITIES :
Year Total Liability (in crores)
2019 1609
2020 1529
2021 2112
2022 2727
2023 3065

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 Total Liabilities
3500
3065
3000
2727
2500
2112
2000
1609 1529
1500

1000

500

0
2019 2020 2021 2022 2023

Interpretation:

The term "total liabilities" describes all of a company's commitments and indebtedness to
outside parties. Dabur's total liabilities increased from 1609 crores in 2019 to 3065 crores by
2023, pointing to a number of possible outcomes are Debt as well as loans, Operating
Expenses and Accrued Liabilities, Investments and Capital Expenditure, etc.

SHARE PRICES:
Year Share price
2019 421
2020 455
2021 534
2022 587
2023 552

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Interpretation:

Dabur's share price increased from 2019 to 2023. It increased from 421 rupees in 2019 to 534
rupees in 2021, reflecting a positive market attitude. However, a decline occurred, with the
price falling to 552 rupees in 2023. This fluctuation shows that opinions among investors are
shifting, which could be influenced by market dynamics or corporate performance.

CONCLUSION:
COMPARISON OF HUL AND DABUR:
Sales:

Companies Sales (average in crores)

HUL 15415
Dabur 7255

Sales

HUL
32% Dabur

68%

According to the data provided, HUL (Hindustan Unilever Limited) and Dabur are two
corporations with average annual sales mentioned in crores.

HUL, with an average annual sales figure of 15,415 crores, beats Dabur, which has an
average yearly sales figure of 7,255. This means HUL has a larger market presence and earn
more income than Dabur.

The sales data reflect these companies, financial strengthen and market position. Increased
sales can indicate a greater consumer base, stronger brand recognition, and even a broader
selection of products or services. It can also show strong marketing techniques, distribution
networks, and customer pleasure, all of which are critical components in a company’s market
success.

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Tax:

Companies Tax (average in crores)

HUL 2749
Dabur 340.2

TAX

12%

HUL
Dabur

88%

Based on the tax data presented, it is clear that HUL (Hindustan Unilever Limited) spends
substantially more taxes than Dabur. Dabur's 340.2 crores is compared to by HUL's average
annual tax payment of 2,749 crores. Because of its bigger scale and profitability, HUL may
operate in a higher profit bracket or face different tax requirements. Such a huge tax
contribution shows HUL's important economic significance and financial soundness. Dabur's
reduced tax payments, on the other hand, could be related to the company's less valuable
scope of activities or to differing taxing laws. This information highlights the two companies'
different financial capacities and market positioning in the given setting.

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Net Profit:

Companies Net Profit (average in crores)

HUL 7971
Dabur 1606

Net Profi t
HUL Dabur

17%

83%

The net profit data provided shows a significant gap between HUL (Hindustan Unilever
Limited) and Dabur. HUL's average yearly net profit is 7,971 crores, well above Dabur's
1,606 crores. This significant gap highlights HUL's better profitability and financial
performance when compared to Dabur. HUL's excellent net profit shows effective cost
control, strong revenue growth, and market control. Dabur's reduced net profit, on the other
hand, shows that similar levels of profitability will be difficult to achieve, maybe due to
operating costs, market competition, or other considerations. HUL's significantly higher net
profit maintains its market leadership, due to a better bottom line and overall
financial soundness.

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Total Assets:

Companies Total assets (average in crores)

HUL 50228
Dabur 7425

Total assets (average in crores)

13%

HUL
Dabur

87%

The total assets data shows an apparent difference between HUL (Hindustan Unilever
Limited) and Dabur. HUL's total assets average 50,228 crores, which is substantially greater
than Dabur's 7,425 crores. This substantial gap reflects HUL's dominance in terms of scale,
resources, and market presence. HUL's broad assets represent a strong infrastructure,
significant investments, and varied commercial operations, highlighting its stability and
capacity for future growth. Dabur's significantly lower total assets, on the other hand, imply a
smaller scope of operations and less resources at its disposal. HUL's significant asset base
highlights its competitive advantage and financial strength, establishing it as a powerful
market participant.

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Total Liabilities:

Companies Total Liabilities (average in crores)

HUL 17570
Dabur 2208

Total Liabilities (average in crores)

11%

HUL
Daber

89%

HUL (Hindustan Unilever Limited) and Dabur have significant differences in total liabilities.
HUL's average total liabilities are 17,570 crores, well above Dabur's 2,208 crores. This
substantial difference shows HUL's bigger financial commitments, which could be the result
of several things such as loans, debts, or operational expenses. With the increased liabilities,
HUL's strong revenue and assets shows that it will be able to manage these responsibilities
well. Dabur's reduced overall liabilities, on the other hand, show a significantly lower
financial load, thus allowing for greater flexibility and financial stability. The higher
liabilities of HUL highlight the complicated details of its financial structure, whereas Dabur's
lower liabilities show a more straightforward financial picture.

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Share prices:

Companies Share Prices

HUL 2217
Dabur 509

Share Prices

19%
HUL
Dabur

81%

Conclusion:

Hindustan Unilever Limited (HUL) outperforms Dabur across multiple key performance
indicators or categories, which encompass sales, tax, net profit, total assets, total liabilities,
and share prices.

If HUL does actually outperform Dabur in all of these categories, it indicates a stronger
financial performance, a stronger market position, and maybe better methods of management.
In comparison to Dabur, this total control across numerous critical areas would position HUL
as a stronger and more profitable corporation.

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