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PARIPEX - INDIAN JOURNAL OF RESEARCH | Volume-9 | Issue-5 | May - 2020 | PRINT ISSN No. 2250 - 1991 | DOI : 10.36106/paripex groups were following different working capital policies. The STATEMENT SHOWING CHANGES IN WORKING industries were not managing their current assets effectively. CAPITAL FOR THE YEAR 2018 Particulars 2017 2018 Increase Decrease DATA ANALYSIS AND INTERPRETATION Rs. in Rs. in Rs. in Rs. in Crs RATIO ANALYSIS Crs Crs Crs Ratio analysis is one of the powerful tools of financial Current assets: statement analysis. A ratio is defined as “the relationship Current Investments 3,519 2,855 664 between two or more things.” Inventories 2,362 2,359 3 Trade Receivables 928 1,147 219 TABLE SHOWING RATIOS OF HINDUSTAN UNILEVER Cash and Cash LIMITED equivalents 1,671 3,373 1,702 Year Current Quick Debtors Net Inventory Other current assets 885 1,405 520 Ratio Ratio Turnover Profit Turnover Total Current Assets (A) 9,365 11,139 Ratio Ratio Ratio Current Liabilities: 2016 1.43 1.05 33.64 13.31 13.25 Trade payables 6,006 7,013 1007 2017 1.30 0.97 32.02 14.07 14.60 Other Current Liabilities 809 972 163 Short term Provisions 387 651 264 2018 1.29 1.02 33.28 15.16 14.93 Total Current Liabilities 2019 1.36 1.07 27.11 15.79 15.78 (B) 7,202 8,636 2,441 2,101 2020 1.31 1.02 28.53 17.37 14.78 Net Working capital Source: Money control.com C=(A-B) 2,163 2503 Net increase in working capital 340 340 From the table above, we can see that the Current Ratio (CR) of 2,441 2,441 Hindustan Unilever Limited has moved in between 1.29 to 2,503 2,503 1.43, during the period of study. This is much below the ideal current ratio of 2:1. The Quick ratio has moved in between 0.97 Source: Annual Report of Hindustan Unilever Limited to 1.07, during the period of study. The Company's Quick ratio for four years is more than the ideal ratio of 1:1. The Quick From the above we know that the current assets of the year ratio for the year 2017 is less than the ideal ratio. Debtors' 2018 have been increased high while comparing with 2017 turnover ratio is satisfactory. The Debtors' turnover ratio has and current liabilities for the year 2018 increased from 7,202 moved in between 27.11 to 33.64. It shows a decreasing trend. to 8,636. It results in an increase in Net Working capital for the The net profit ratio of the company is satisfactory. It ranges year 2018 (340 Crs) from 13.31 to 17.37 and also it shows an increasing trend. Inventory turnover ratio or Stock turnover ratio indicates the STATEMENT SHOWING CHANGES IN WORKING highest trend for the last 5 years. CAPITAL FOR THE YEAR 2019 Particulars 2018 2019 Increase Decrease STATEMENT OF CHANGES IN WORKING CAPITAL Rs. in Rs. in Rs. in Crs Rs. in Crs The statement of changes in working capital is prepared to Crs Crs ascertain the increase or decrease in the working capital Current assets: between two financial periods. Current Investments 2,855 2,693 162 Inventories 2,359 2,422 63 STATEMENT SHOWING CHANGES IN WORKING Trade Receivables 1,147 1,673 526 CAPITAL FOR THE YEAR 2017 Cash and Cash Particulars 2016 2017 Increase Decrease equivalents 3,373 3,688 315 Rs. in Rs. in Rs. in Rs. in Crs Other current assets 1,405 898 Crs Crs Crs Total Current Assets (A) 11,139 11,374 507 Current Liabilities: Current assets: Trade payables 7,013 7,070 57 Current Investments 2,461 3,519 1,058 Other Current Inventories 2,528 2,362 166 Liabilities 972 782 190 Trade Receivables 1,064 928 136 Short term Provisions 651 501 150 Cash and Cash equivalents 2,759 1,671 1088 Total Current Liabilities Other current assets 740 885 145 (B) 8,636 8,353 1,244 726 Total Current Assets (A) 9,552 9,365 Net Working capital Current Liabilities: C=(A-B) 2,503 3,021 Trade payables 5,498 6,006 508 Increase in working Other Current Liabilities 864 809 55 capital 518 518 Short term Provisions 290 387 97 3,021 3,021 1,244 1,244 Total Current Liabilities(B) 6,652 7,202 1,258 1995 Source: Annual Report of Hindustan Unilever Limited Net Working Capital C= (A-B) 2,900 2,163 There is an increase in current assets of the year 2019 while Net decrease in working comparing with 2018 and current liabilities met by the capital 737 737 company is less than the previous year. Therefore, the Net 2,900 2,900 1,995 1,995 Working capital of the year has been increased to 518 Crs. STATEMENT SHOWING CHANGES IN WORKING Source: Annual Report of Hindustan Unilever Limited CAPITAL FOR THE YEAR 2020 Particulars 2019 2020 Increase Decrease The current assets of the year 2017 have been decreasing Rs. in Rs. in Rs. in Rs. in Crs while comparing with 2016 and current liabilities for the year Crs Crs Crs 2017 increased from 6,652 to 7,202. It results in a decrease in Current assets: net working capital for the year 2017 (737 Crs) Current Investments 2,693 1,248 1,445 60 www.worldwidejournals.com PARIPEX - INDIAN JOURNAL OF RESEARCH | Volume-9 | Issue-5 | May - 2020 | PRINT ISSN No. 2250 - 1991 | DOI : 10.36106/paripex Particulars 2019 2020 Increase Decrease Rs. in Rs. in Rs. in Rs. in Crs Crs Crs Crs Inventories 2,422 2,636 214 Trade Receivables 1,673 1,046 627 Cash and Cash equivalents 3,688 5,017 1329 Other Current assets 898 1,961 1,603 Total Current Assets (A) 11,374 11,908 Current Liabilities: Trade payables 7,070 7,399 329 Other Current Liabilities 782 1,287 505 Short term Provisions 501 418 83 Total Current Liabilities (B) 8,353 9,104 3229 2,906 Net Working Capital C-= (A-B) 3,021 2,804 Net decrease in working capital 217 217 3,021 3,021 3,229 3,229

Source: Annual Report of Hindustan Unilever Limited

The current assets of the year 2020 have been increasing while comparing with 2019 and current liabilities of the year 2020 is 9,104. It results in a decrease in net working capital for the year 2020 (217 Crs)

SUGGESTIONS The company Hindustan Unilever Limited may improve its liquidity position by investing more in current assets. To bring the current ratio close to the ideal ratio of 2:1. The company has to maintain an adequate amount of working capital to keep a good amount of liquidity throughout the years. The company should exercise control over the variable cost and must find out the ways to reduce its cost of production. This will increase the profitability of the company.

CONCLUSION The present study entitled “A study on working capital management of Hindustan Unilever Limited” was undertaken with the main objective of studying working capital management and liquidity position through Ratio analysis and Statement of changes in working capital. This study provides an idea of working capital management of Hindustan Unilever Limited. The company maintaining good profitability over the years.

Based on the analysis of the financial statement of Hindustan Unilever Limited, conclude that the overall working stability and soundness have improved over the years and improve the overall financial performance in the forthcoming years.

REFERENCES Books 1. Management Accounting Theory and Practice – Dr. A. Murthy and Dr. S. Gurusamy Journals 1. Annual report of Hindustan Unilever Limited from 2016 to 2020 2. Akash B. Selkari and Omdeo Ghyar (2019), “ Study on working capital of Mahindra & Mahindra Ltd”, ISOR Journal of Engineering, Vol. 09, Issue 5, May 2019, pp. 41-46. 3. Prof. Y.P. Mahajan, “Study on working capital management of TATA Motors Ltd”, Brihan Research Journal, Vol. 1, pp. 43-52. Websites 1. www.moneycontrol.com 2. www.hul.co.in 3. www.dnb.com

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