HCL TECHNOLOGIES

ABOUT THE COMPANY

HCL Technologies Limited (d/b/a HCL Tech) is an Indian multinational information technology
(IT) consulting company headquartered in Noida. Founded by Shiv Nadar, it was spun out in
1991 when HCL entered the software services business. The company has offices in 60 countries
and over 220,000 employees.
The company originally was focused on hardware but, via HCL Technologies, software and
services became the focus. On 12 November 1991, HCL Technologies was spun off as a separate
unit, being incorporated as HCL Overseas Limited, a provider of software and technology
development services.
HCL went public on 10 November 1999, with an issue of 14.2 million shares. By the early-
2000s, its wholly owned subsidiary HCL CommNet had expanded its offerings from VSAT to
wholly owned security and IT infrastructure services.

STATEMENT OF PROFIT AND LOSS

TREND ANALYSIS

Revenue from Operations:

1.Sales of Services: This category has shown strong growth, increasing from 1.09 times in 2021
to 1.48 times in 2024. This means that the company is doing a better job at providing services
which customers are increasingly interested in. The steady rise suggests that the company has
successfully attracted more clients or increased its prices, leading to higher revenue.
2.Sales of Products: In contrast, sales of products fluctuated over the years. They reached a high
of 0.93 times in 2021 but dropped to 0.72 times in 2024. This decline might mean that customers
are less interested in the products offered, or that there is increased competition affecting sales.
Total Sales:
Total sales show a mixed performance, starting at 1.09 times in 2021 and peaking at 1.04 times
in 2024. The drop in 2023 compared to 2022 indicates that while the company started strong, it
faced challenges in maintaining its sales momentum. This inconsistency could signal problems in
the sales strategy or market demand.
Cost of Goods Sold (COGS):
COGS represents the costs directly tied to producing goods. It stood at 0.88 times in 2024, which
is an increase from 0.90 times in 2021. This increase in costs may indicate rising prices for raw
materials or other production expenses.
The opening stock jumped significantly from 0.83 times in 2021 to 1.94 times in 2024. This
suggests the company may be holding more inventory than before, which could be a sign of
overstocking or anticipating higher future demand. However, if the inventory isn't sold, it could
tie up cash and affect financial health.
Gross Profit:
Gross profit, which is the money made after covering the costs of goods sold, increased to 1.04
times in 2024, up from 1.09 times in 2021. This is a positive sign as it shows the company can
maintain profitability despite rising costs. It indicates that the company’s pricing strategies and
cost management are effective to some extent, allowing it to keep more money from its sales.
Operating Expenses:
Total operating expenses rose to 1.03 times in 2024 from 1.10 times in 2021. This increase shows
that the company is spending more to operate, which can be concerning if revenue does not grow
at the same pace.
Total Administrative Expenses:
Employee Benefit Expenses significantly rose, reaching 14.29 times in 2024. This indicates that
the company is investing heavily in its workforce, which can be good for morale and
productivity but might also squeeze profits if not managed properly.
Total administrative expenses reached 1.04 times in 2024, which reflects a slight decline
compared to previous years.
Earnings Before Interest and Tax (EBIT):
EBIT, which shows earnings from operations before interest and taxes, decreased from 1.10
times in 2021 to 1.05 times in 2024. This decline suggests that while the company is generating
revenue, the costs associated with running the business are rising faster, reducing overall
profitability.
Profit After Tax:
Profit after tax has fluctuated over the years, peaking at 1.28 times in 2023 before dropping to
1.02 times in 2024. This indicates that the company is struggling to maintain its profitability
levels. The increase in costs or decrease in sales could be contributing factors, suggesting that the
company needs to reassess its strategies to improve bottom-line results.
Other Comprehensive Income:
The other comprehensive income section showed negative values, meaning there were losses that
impacted overall financial health. This could include currency fluctuations or changes in
investment values that hurt the company's financial position.
Earnings Per Share (EPS):
EPS increased slightly to 1.30 Z in 2024 from 0.97 Z in 2021. This growth means shareholders
are seeing a bit more return on their investments, which is a positive sign. However, the small
increase may not be enough to satisfy investors if the overall profitability trends downward.

COMMON-SIZE ANALYSIS
Net Sales
Sale of Services:
The contribution of service sales increased from 99.32% in 2020 to 99.67% in 2024. This
consistent growth indicates a strong focus on the service sector, which may be driven by
increased demand for services or successful marketing strategies. The upward trend suggests that
the company is effectively positioning itself to leverage its service offerings, potentially
enhancing customer loyalty and diversifying its revenue base.
Sale of Products:
In contrast, product sales decreased from 0.68% in 2020 to 0.33% in 2024. This declining trend
could indicate several factors: a shift in consumer preference toward services, increased
competition in the product segment, or the company’s strategic decision to prioritize service sales
over products. The significant drop suggests that management may need to reassess their product
strategy to maintain a balanced revenue stream.
Cost of Goods Sold (COGS)
Total COGS:
COGS remained low, starting at 0.28% in 2020 and slightly fluctuating to 0.28% in 2024. The
stability in COGS relative to sales indicates effective cost control measures in place, allowing the
company to maintain a healthy gross margin. This suggests that the company is efficiently
managing its production costs, which is crucial for maintaining profitability, especially if service
revenues continue to grow.
Gross profit consistently increased from 99.53% in 2020 to 99.67% in 2024. This upward trend
reflects an improvement in the efficiency of converting sales into profit. A high gross profit
margin suggests that the company is effectively controlling its direct costs and is well-positioned
to invest in operational enhancements, marketing, or other growth initiatives. It also indicates a
healthy demand for the company's services, allowing it to maintain premium pricing.
Operating Expenses
Operating expenses exhibited a slight increase from 66.46% in 2020 to 69.65% in 2024. This
indicates that the company has faced challenges in controlling its operational costs effectively,
which is critical for maintaining profitability.
Employee benefit expenses rose significantly from 30.47% in 2020 to 43.57% in 2024. This
increase underscores the company’s commitment to investing in human capital, which can lead
to enhanced employee satisfaction and higher retention rates. While this may result in elevated
short-term costs, the long-term benefits can include improved productivity, greater employee
engagement, and reduced turnover, ultimately contributing to the organization’s overall success
and stability.
Salaries and bonuses saw a significant increase from 31.22% in 2020 to 41.46% in 2024. This
upward trend may reflect a strategic decision to attract and retain top talent, which is essential for
driving innovation and maintaining competitive advantage. It also indicates a potential expansion
in workforce size or increased salary structures to reflect market conditions, which could
positively impact on overall productivity and performance.
Depreciation and amortization expenses showed a slight increase from 4.93% in 2020 to 5.92%
in 2024. This increase may reflect ongoing investments in fixed assets or changes in depreciation
methods, suggesting a commitment to improving operational capabilities or asset utilization. It’s
important to monitor these expenses as they impact net income, especially in capital-intensive
industries where significant investments in assets are required.
Non-operating income increased from 1.87% in 2020 to 2.24% in 2024. This positive trend
indicates improved returns from investments and ancillary income streams. Such non-operating
income serves as a valuable supplement to core operations, enhancing overall profitability and
providing a financial cushion during downturns in primary business activities. By diversifying
revenue sources, the company can reduce its reliance on core operations, thereby increasing
financial resilience and stability.
Earnings Before Tax (EBT) remained stable, showing a slight decline from 34.21% in 2020 to
32.12% in 2024. This stability indicates that the company has maintained a relatively consistent
level of profitability before accounting for taxes.
Tax expenses showed slight fluctuations but remained relatively stable, with current tax expenses
increasing from 6.76% in 2020 to 7.86% in 2024. A stable tax expense indicates that the
company’s taxable income has been consistent.
Profit after tax decreased from 27.46% in 2020 to 24.26% in 2024. This downward trend
indicates that while the company has maintained overall profitability, the proportion of net
income relative to sales has declined. This could suggest increasing costs or pressures on
margins, even in a growing revenue environment. The decrease could prompt a closer
examination of expense management and pricing strategies, as well as an evaluation of market
conditions affecting profitability.

COMPARATIVE STATEMENT ANALYSIS

Gross Profit:
In the years 2023 and 2022 significant increase in Gross profit by 14% and in between 2024 and
2023 there is a 4.04% increase. This growth could be attributed to better cost management,
increased revenue, or a combination of both. It reflects the company's ability to capitalize on
market conditions, possibly through effective pricing strategies or a boost in demand.
Between 2022 and 2023, the 15.54% increase suggests the company faced significant cost
pressures. This spike in operating expenses could be due to various factors, such as inflation,
higher labor costs, increased marketing and administrative expenses, or expansion-related costs.
Such a sharp rise in costs could have impacted on the overall operating margins, potentially
limiting the positive effects of the substantial 14% growth in Gross Profit during the same
period.
Between 2022 and 2023, the 10.91% increase in EBT reflects significant growth in the
company’s profitability. This growth suggests that despite the sharp 15.54% increase in operating
expenses during the same period, the company successfully boosted its earnings, likely due to
strong Gross Profit growth of 14%. The company may have managed to offset rising costs
through increased revenue or improved operational efficiencies, contributing to a solid rise in
EBT.
Between 2022 and 2023, the 5.38% increase in EAT suggests that the company successfully
managed its tax obligations while benefiting from a strong 10.91% increase in EBT. Although
the growth in EAT is slower than the rise in EBT, it still reflects a healthy improvement in the
company’s bottom line. This could imply that tax expenses or other post-tax adjustments might
have limited the full impact of the operating and pre-tax profit growth on net earnings.
From 2023 to 2024, the 1.88% increase in EAT is much smaller, signaling a stabilization phase.
This slight increase, following a 5.03% rise in EBT, indicates that despite the consistent growth
in earnings before tax, post-tax profitability faced some constraints. The lower growth in EAT
could be the result of higher tax liabilities or other financial factors that impacted net profits in
this period.

BALANCE SHEET

TREND ANALYSIS
The analysis of Total Shareholder's Funds shows a fluctuating trend with periods of growth and
decline. The trend coefficients reveal a generally positive trajectory, with notable recoveries in
the later years following a dip in the initial period. The consistent upward trend in the latter years
suggests that despite temporary setbacks, the company has managed to enhance shareholder
value effectively. Overall, the trend reflects a resilient financial performance with potential for
continued growth as it stands at 1.13 times with respect to the base year.
The analysis of Total Borrowed Funds shows a significant downward trend over the observed
years. The trend values begin at 1.0000 in the final period, reflecting a stable state after previous
fluctuations. Before this, the values exhibit substantial growth, peaking at 1.2938 and 1.025,
indicating a period of aggressive borrowing. However, the trend values decline sharply from
0.31875 to 0.1625, highlighting a notable reduction in borrowed funds. Overall, the data
illustrates a transition from increased borrowing to a significant decrease, culminating in
stabilization at the end.
The analysis of Total Non-Current Liabilities reveals an upward trend over the observed years.
The values show a gradual decrease, reaching 0.7438 and 0.7640. Ultimately, the trend
culminates in 1.1034 in 2024, demonstrating a return to higher levels of non-current liabilities.
This shows that non-current liabilities were higher initially, experienced some reductions, and are
now stabilizing, with a slight upward movement in recent years.
The trend analysis of Total Capital Employed indicates a positive upward trajectory over recent
periods. The growth factors show consistent values around 1.1, suggesting stable increases
relative to previous periods. This steady rise reflects effective capital utilization and a solid
investment strategy. Overall, the data highlights confidence in the company's operational
capacity and financial management. Such trends are promising for future growth and stability.
The trend analysis of Total Fixed Assets indicates a consistent upward growth pattern over recent
period. The growth factors reflect steady increases, highlighting effective investment strategies.
This trend suggests that the company is successfully enhancing its operational capacity and long-
term stability. Overall, the rise in fixed assets positions the company favorably for future growth
and improved asset utilization. The positive trajectory is a strong indicator of ongoing financial
health and strategic planning.
The trend analysis of Total Current Assets shows values starting from approximately 1.16 in the
second year and increasing to about 1.24 in the last year. This indicates fluctuations with an
overall positive trajectory, reflecting effective management of short-term resources. The growth
factors suggest a recovery and strengthening of liquidity, despite some declines in between.
Overall, this trend underscores the company’s good financial health and effective asset
management strategies.
The trend analysis of Total Current Liabilities reveals a generally stable but concerning pattern,
starting with a value of approximately 0.71 in 2021 and rising to about 0.75 in the last year. The
fluctuations indicate periods of both increases and decreases, with a notable spike in the last year.
This trend suggests that while the company has managed its liabilities, the recent increase may
signal rising financial pressures. Overall, it highlights the need for careful management of
current obligations moving forward.
The trend analysis of Total Working Capital shows values starting at approximately 1.00 in the
first year and increasing to about 1.94 in the last year. This upward trend indicates an
improvement in the company’s liquidity position over time. Despite some fluctuations in the
middle years, the overall increase suggests effective management of short-term assets against
liabilities. The rising working capital reflects positively on the company’s operational flexibility.
Continued focus on managing working capital will be important for sustaining financial health.
e trend analysis of Total Capital Utilized shows values gradually increasing year by year and
declining to about 1.02 in the last year. This indicates a modest improvement in capital utilization
over time. The steady increase reflects effective management of resources, suggesting that the
company is gradually enhancing its operational efficiency. While the growth is limited, it
underscores a focus on optimizing capital use. Continued attention to this area will be important
for maintaining financial performance and supporting future growth.

COMPARATIVE STATEMENT ANALYSIS

The increase in Shareholders' Funds over the past two years reflects consistent growth in the
company’s equity base.
Between 2022 and 2023, the 3.68% increase in Shareholders' Funds suggests that the company
has been able to retain profits or attract additional equity capital. This rise could be attributed to
improved profitability, possibly driven by the 10.91% increase in EBT and 5.38% increase in
EAT during the same period. The growth in shareholders' equity strengthens the company's
financial stability and provides a solid foundation for further investments or business expansion.
From 2023 to 2024, the 3.49% increase in Shareholders' Funds shows continued, albeit slightly
slower, growth. This smaller rise aligns with the more modest 5.03% increase in EBT and 1.88%
increase in EAT, indicating that while the company is still adding to its equity base, the rate of
growth is tapering off. This could be due to a reduction in retained earnings or a shift in capital
structure.
The decrease in Borrowed Funds over the past two years highlights a significant shift in the
company’s capital structure and financial strategy.
Between 2022 and 2023, the 68% decrease in Borrowed Funds indicates a substantial reduction
in reliance on debt financing. This sharp decline may reflect the company’s efforts to improve its
balance sheet by paying down debt, reducing interest expenses, or potentially refinancing
existing obligations to more favorable terms. Such a significant reduction in borrowed funds
suggests that the company is prioritizing financial stability and possibly shifting toward a more
equity-focused capital structure.
From 2023 to 2024, the 49% decrease in Borrowed Funds, while still substantial, indicates a
continued effort to reduce debt levels, albeit at a slower pace compared to the previous year. This
ongoing reduction may suggest that the company is maintaining its focus on deleveraging,
possibly in response to a changing economic environment or as part of a strategic plan to
enhance financial flexibility.
Between 2022 and 2023, the 8.43% decrease in Fixed Assets indicates that the company may
have sold off underperforming assets or undertaken asset write-downs. This reduction could also
reflect a shift in focus towards more efficient asset utilization or a strategic decision to divest
from certain areas of the business. Such a decrease may signal a reassessment of capital
expenditure, possibly in response to changing market conditions or a desire to improve cash
flow.
From 2023 to 2024, the 8.92% decrease in Fixed Assets further emphasizes this trend. The
continued decline suggests that the company remains committed to optimizing its asset base,
potentially by investing in more modern, efficient assets or reallocating resources to higher-
return projects. This could also indicate a broader strategy to reduce capital intensity and enhance
operational efficiency.
The increase in Current Assets over the past two years indicates a positive trend in the company's
liquidity and operational efficiency.
Between 2022 and 2023, the 6.26% increase in Current Assets suggests that the company is
enhancing its liquidity position, possibly through improved inventory management, increased
receivables, or cash reserves. This growth can reflect a successful strategy to ensure that the
company has adequate short-term resources to meet its operational needs and obligations. A
stronger current asset position can also enhance the company's ability to respond to unexpected
expenses or investment opportunities.
From 2023 to 2024, the 3.41% increase in Current Assets, while smaller than the previous year's
growth, still signifies a continued focus on maintaining liquidity. This more modest rise may
indicate that the company is consolidating its gains and focusing on optimizing current asset
management rather than aggressively expanding its asset base. The sustained growth in current
assets during this period suggests a stable operational environment and a strategic commitment
to financial health.
Overall, the increase of 17.96% in Current Liabilities followed by a decrease of 1.9% highlights
the company’s evolving financial strategy. While the initial rise may have supported growth
initiatives, the subsequent reduction reflects a commitment to improving financial health and
ensuring the company is well-positioned to meet its obligations without compromising its
operational capabilities.

RATIO ANALYSIS
Liquidity Ratios Analysis
1. Current Ratio:
o The current ratio improved from 1.70 in 2020 to 2.82 in 2024. This significant
increase indicates a robust enhancement in Wipro's short-term liquidity position,
suggesting that the company has effectively managed its current assets to cover its
current liabilities. A current ratio above 2 is generally considered healthy,
indicating a strong ability to meet short-term obligations.
2. Acid Test Ratio:
 o The acid test ratio rose from 1.76 in 2020 to 6.73 in 2024. This substantial
increase reflects an excellent liquidity position, as it suggests that Wipro can
comfortably cover its current liabilities without relying on inventory sales. An
acid test ratio significantly above 1 indicates that the company can meet its
obligations with its most liquid assets.
3. Absolute Liquidity Ratio:
o This ratio improved from 0.77 in 2020 to 1.49 in 2024. The rise indicates that
Wipro has increased its cash and cash equivalents relative to current liabilities,
showing a strong position in terms of liquidity. This improvement signifies better
management of cash resources.
4. Projected Daily Cash Flow:
o Projected daily cash flow increased from 59.89 in 2020 to 92.19 in 2024. This
increase suggests that Wipro has enhanced its ability to generate cash on a daily
basis, which is crucial for meeting operational expenses and short-term
obligations.
5. Defensive Internal Ratio:
o The defensive internal ratio improved from 300.64 in 2020 to 300.64 in 2024.
This indicates that the company can fund its operating expenses multiple times
over using its most liquid assets, further solidifying its strong liquidity position.

Turnover Ratios Analysis

Inventory Turnover Ratio:
The inventory turnover ratio decreased from 9.33 in 2020 to 3.86 in 2024. This
significant decline indicates that Wipro is holding inventory for a longer duration
before selling it. A lower ratio could imply overstocking, potential obsolescence, or
reduced sales efficiency. It's essential for the company to investigate the reasons
behind this drop to avoid excess inventory costs.
Average Inventory Holding Period:
The average inventory holding period increased from 39.11 days in 2020 to 94.63
days in 2024. This rise aligns with the decrease in the inventory turnover ratio,
indicating that inventory is taking longer to sell. A prolonged holding period may
suggest inefficiencies in inventory management or changes in market demand.
Debtors Turnover Ratio:
The debtors turnover ratio decreased from 5.10 in 2020 to 3.96 in 2024. This decline
shows that Wipro is collecting receivables less frequently over the years, which may
 point to slower collections or increased credit terms extended to customers.
Monitoring this trend is essential, as it affects cash flow and liquidity.
Average Collection Period:
The average collection period increased from 71.52 days in 2020 to 92.22 days in
2024. This increase reinforces the decline in the debtors turnover ratio, indicating that
Wipro takes longer to collect payments from customers. This trend may necessitate a
review of credit policies and collection processes.
Creditors Turnover Ratio:
The creditors turnover ratio decreased from 5.10 in 2020 to 3.96 in 2024. A declining
creditors turnover ratio suggests that Wipro is taking longer to pay its suppliers,
which could improve cash flow in the short term but may affect supplier
relationships.
Creditors Payment Period:
The creditors payment period increased from 71.52 days in 2020 to 92.22 days in
2024. This increase indicates that the company is extending its payment terms,
allowing it to retain cash longer but potentially straining relationships with suppliers.
Operating Cycle:
The operating cycle is not explicitly stated in the data provided, but it can be inferred
from the trends in inventory and collection periods. The increase in the average
inventory holding period and average collection period suggests that Wipro's overall
operating cycle is lengthening, which could affect liquidity and operational efficiency.

Turnover Ratios Analysis

Fixed Assets Turnover Ratio:

Values: 8.46 (2020) → 14.82 (2024)

The fixed assets turnover ratio shows a significant increase over the years. This
indicates that the company is generating more revenue per dollar of fixed assets,
suggesting improved efficiency in utilizing its fixed assets to drive sales. This
positive trend may reflect effective asset management or increased revenue from
existing assets.

Total Assets Turnover Ratio:

Values: 1.42 (2020) → 2.94 (2024)

 The total assets turnover ratio has more than doubled, indicating that the company is
effectively utilizing its total assets to generate revenue. A higher ratio reflects
efficient asset use, which is crucial for maximizing profitability.

Net Worth Turnover Ratio:

Values: 0.82 (2020) → 1.13 (2024)

The increase in the net worth turnover ratio suggests that the company is generating
more revenue relative to the equity invested by shareholders. This is a positive sign,
indicating effective use of shareholder equity to support revenue generation.

Capital Turnover Ratio:

Values: 2.02 (2020) → 1.07 (2024)

The capital turnover ratio has decreased significantly, which may indicate that the
company is not generating as much revenue for each dollar of capital employed. This
decline could warrant a closer examination of capital structure and operational
efficiency.

Working Capital Turnover Ratio:

Values: 3.32 (2020) → 2.52 (2024)

The working capital turnover ratio has also declined, which suggests that the
company is generating less revenue for each dollar of working capital. This could
indicate a build-up in inventory or receivables, potentially affecting liquidity and
efficiency. The company may need to review its working capital management
strategies.

Profitability Ratios Analysis

 Gross Profit Margin:

o Values: 99.53% (2020) → 99.72% (2024)
o The gross profit margin remains consistently high, showing a slight upward trend.
This suggests that the company is effective in managing its cost of goods sold
relative to its revenue, indicating strong pricing power and efficient production.
 Operating Profit Margin:
o Values: 33.07% (2020) → 30.07% (2024)
o There is a noticeable decline in the operating profit margin. This suggests that
while revenue has grown, operating expenses (selling, general, and administrative
costs) have risen, potentially impacting profitability. The company may need to
focus on controlling operational costs.
 Net Profit Margin:
o Values: 27.46% (2020) → 24.26% (2024)
o The net profit margin has also decreased, indicating that net income is not keeping
pace with revenue growth. This trend may raise concerns regarding overall
profitability, highlighting the need for better expense management or strategic
adjustments.
 Return on Capital Employed (ROCE):
o Values: 28.66% (2020) → 34.57% (2024)
o The increase in ROCE indicates improved efficiency in generating profits from
capital employed. This positive trend suggests that the company is becoming
more effective in utilizing its capital for profitable activities.

Du Pont Analysis is a financial performance framework that helps analyze the components of
return on equity (ROE) by breaking it down into its constituent factors. Here, we'll analyze
both the 3-factor and 5-factor models using the provided data.

3-Factor Du Pont Analysis

 Net Profit Margin:

The net profit margin fluctuated over the years, showing a peak in 2021 (27.88%) but declining
in 2023 (20.07%) before rebounding slightly in 2024 (23.89%). This indicates volatility in
profitability which could stem from changes in costs, pricing strategies, or market conditions.
 Total Assets Turnover:
The assets turnover ratio generally increased from 2020 to 2022 but dipped in 2023 before
recovering in 2024. This suggests improved efficiency in utilizing assets to generate sales,
although the decline in 2023 indicates possible inefficiencies or lower sales.
 Equity Multiplier:
The equity multiplier increased significantly in 2024 (1.46) after being stable at 1.25 for the
previous two years. This suggests that the company is increasing its leverage, which could
enhance ROE but also increase financial risk.
5-Factor Du Pont Analysis
 Operating Profit Margin:
The operating profit margin shows a decline from 2020 to 2023 but increased slightly in
2024, suggesting ongoing challenges in operational efficiency but a potential recovery.
Interest Burden:
 The interest burden has gradually decreased, indicating that the company may be
experiencing increased interest expenses relative to its operating income. This could be due
to rising debt levels or interest rates.
Tax Burden:
The tax burden appears consistent with the net profit margin, demonstrating the company’s
effective tax management despite fluctuations in profitability.
Total Assets Turnover:
As previously discussed, this shows improvement in asset utilization with some
inconsistency.
Equity Multiplier:
As noted, the equity multiplier has increased, indicating more reliance on debt financing.

Both analyses indicate that while the company shows strong asset utilization and has
improved its leverage position, it faces challenges related to profit margins and interest
expenses. Strategic measures to enhance operational efficiency and manage financial
leverage would be prudent moving forward to maintain a strong ROE.

CONCLUSION
From this comprehensive analysis, the company in order to improve their overall performance
can focus on certain areas of importance.
 Cost Management: Identify and reduce unnecessary costs to enhance profitability. This
could involve streamlining operations or renegotiating supplier contracts.
 Pricing Strategies: Evaluate pricing strategies to ensure they align with market demand and
competition while maximizing margins.
 Product Mix: Analyze the profitability of different products/services and focus on those that
yield higher margins.
 Inventory Management: Optimize inventory levels to reduce carrying costs and increase
turnover. Implement just-in-time (JIT) inventory systems if feasible.
 Efficient Asset Deployment: Ensure that assets are being utilized effectively to generate
sales. This might involve divesting underperforming assets or investing in higher-yielding
assets.