HUL has a solid distribution network and brand. They have the ability to purchase goods from suppliers without paying them for months, and they can take advance money from retailers to supply goods in a future date.
This translates to having a negative cash conversion cycle.
HUL has 1.35 times current ratio. In other words, Rs. 1.35 current assets to every Rs. 1 current lia. So, that’s why have working capital of 4,700 crores.
What counts for cash flow calculation is ‘change in working capital’. That number is (-) 2,862 crores.
Hope this helps!
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