Research methodology

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no. of shares/ investment depends on debt-equity ration or net profit ratio

no. of shares/ investment depends on debt-equity ration or net profit ratio

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  • 1. RESEARCH METHODOLOGY HINDUSTAN UNILEVER LIMITED SUBMITTED BY : Shailendra Sheetal jindal , 286 Sneha bajaj , 289 Parul gupta ,297
  • 2. PROBLEM FORMULATION The problem here is the decrease in the interest of the investors in the shares of the company. The purpose of the research is to find out the reasons for the decrease in the volumes of shares.
  • 3. VARIABLES DEPENDENT INDEPENDENT Investment  Return on investment – volume of shares = net profit / share capital  Debt-equity ratio = total liability/ shareholders equity
  • 4. Return on investment A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment.
  • 5. Debt-equity ratio A measure of a companys financial leverage calculated by dividing its total liabilities by stockholders equity. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt.
  • 6. DEBT-EQUITY RATIOYEAR 2009 2010 2011TOTAL DEBT 421.95 0 0TOTAL 2061.51 2583.52 2633.92EQUITYDEBT- 0.2 0 0EQUITYRATIO
  • 7. RESEARCH HYPOTHESIS We assume that volume of shares is more dependent on debt-equity ratio then return on investment as high debt-equity ratio means high liability i.e., higher risk and in turn higher profitability. ROI may not be regular, so volume of shares are less dependent on it.
  • 8. DATA CALCULATION For this we have considered the balance sheet of year 2009,10 and 2011 of HUL. table (5).xlsx http://www.moneycontrol.com/financials/hindustanunilever/ratios/HU
  • 9.  A regression is a statistical analysis assessing the association between two variables. It is used to find the relationship between two variables. Regression Formula: Regression Equation(y) = a + bx Slope(b) = (NΣXY - (ΣX)(ΣY)) / (NΣX2 - (ΣX)2) Intercept(a) = (ΣY - b(ΣX)) / N
  • 10. VOLUME OFOF SHARES(Y) VOLUME SHARES (Y) DEBT-EQUITY RATIO (X) DEBT-EQUITY RATIO (X) 3263300 03263300 3690600 0 03690600 5449700 0.2 05449700 0.2 RESULTSlope (b) 27248500Y-intercept (a) 4134533.3333Regression equation 4134533.33+27248500x
  • 11. VOLUME OF SHARES (X) DEBT-EQUITY RATIO (Y)3263300 03690600 05449700 0.2 RESULTSlope (b) 0Y-intercept (a) -0.33825Regression equation -0.34+0x
  • 12. VOLUME OF SHARES (Y) RETURN ON INVESTMENT (X)3263300 87.573690600 85.255449700 121.34 RESULTSlope (b) 48161.95334Y-intercept (a) -569284.10952Regression equation -569284.11+48161.95x
  • 13. VOLUME OF SHARES (X) RETURN ON INVESTMENT (Y)3263300 87.573690600 85.255449700 121.34 RESULTSlope (b) .00002Y-intercept (a) 28.09768Regression equation 28.1+0x
  • 14. INTERPRETATION OF THE RESEARCH Volume of shares = f ( return on investment) The volume of shares is dependent on return on investment by 28.1%. Investment = f (debt-equity ratio) The volume of shares is related to debt- equity ratio by -0.34%.
  • 15. INTERPRETATION OF THE RESEARCH Through this research, we find out that the volume of shares is influenced by both return on investment and debt-equity ratio but debt-equity ratio has more impact on it compared to return on investment. Hence, our research hypothesis stands true.
  • 16. METHODOLOGY We have used a primary method of data collection “EXPERIMENT”. It is a relative experiment i.e., having more then one value of independent variable. Statistical tool used – regression.
  • 17. OTHER FACTORS AFFECTING INVESTMENT  Past market trend  Investors risk appetite  Investment horizon  Investible surplus  Investment need  Expected return
  • 18. THANK YOU