HERO HONDA MOTORS LTD.

C A S E A N A LY S I S HARDIK ROY 2 0 11 2 5 1

FINANCING DECISIONS
The financing policy of the company is satisfactory. Repayment of Debt : 201.76 185.78 Use of Retained Earnings

Risk is low
But, the company can increase its profits by increasing the ratio to .50 to .75.

FINANCING DECISIONS CONTD.

Low debt is not satisfactory always as capital intensive industries are required to maintain a debt equity ratio of 2 . Debt a cheaper source of finance. Tax deductible Lender does not get right to vote. Deciding which to use or emphasize, depends on the long-term goals of the business and the amount of control managers wish to maintain.

INVESTMENT POLICY

The investment Decisions taken by the company are a driving growth behind the companys success Vertical Integration Opening up of new plants

Maintaining market leadership

WORKING CAPITAL DECISIONS

I am satisfied with the management of the working capital of the company. Following can be the reasons: Negative Cash Cycle

Payments before Due Date

Increase in the Current Ratio Tight monitoring and control of Working Capital

DIVIDEND POLICIES
The decisions relating to the Dividend of the Shares is justified as the company is rolling out 1000% dividend per share for the third year in succession.Also the dividend per share on the companys share is 20 . The company is following a liberal dividend policy.