Balance Sheet Analysis

Balance Sheet Analysis:

1. What current assets are included in the balance sheet?

2. Analyze the accounts receivable and allowance account

3. Method used to value the inventory

4. Depreciation method

5. What forms the part of other assets (excluding PPE and current assets)?

6. What current liabilities are included in the balance sheet?

7. Explain provisions, if any indicated

8. Does the company have long term debt? How much?

9. Does the company have any ‘commitment’ and ‘contingencies’? Explain

10. What stockholder’s equity accounts are included in the balance sheet?

Current assets:

* Inventories

* Sundry Debtors

* Cash and bank balances

* Other assets

* Loans and advances

Accounts receivable and Allowance account: Conservative approach. HUL already created provision for doubtful debts so that if in case any problem arises in collection of debts they can manage that. And they categorized those debts into considered good and considered doubtful. Only 9.5 % of the total debts were considered doubtful which depicts that the credit policy of the company is standard. Debts which are more than six months old and still considered good signifies that those people are credit worthy and even if there is a lag in time they will still clear out the debts.

Method used to value inventory: Weighted Average

Depreciation Method: Straight Line

Other Assets:

* Income accrued on investments and deposits

* Fixed assets held for sale

Current Liabilities:

* Acceptances

* Sundry Creditors

* Security Advances

* Dividends declared pending payment/ encashment

Provisions:

* Provision for retirement and employee benefits

* Proposed dividend

* Current taxation

* Miscellaneous provisions

Long Term Debt:

No long term debt.

Commitment and Contingencies:

* Forward exchange contracts outstanding as at the period end on account of firm commitment/highly probable...