An Analysis of Financial Performance of Hero Motocorp Limited

Abstract: Financial performance analysis is the process of identifying the financial strengths and weaknesses of the company by properly establishing the relationship between the items of balance sheet and profit and loss account. Financial performance analysis is important both in the aspect of internal as well as external need. The financial performance analysis of Hero MotoCorp Limited which was formerly Hero Honda, an Indian multinational motorcycle and scooter manufacturer was conducted in this study by applying the efficiency and solvency ratios. The analysis was performed for a period of five years based on the secondary data obtained from the annual report of the company. It was found that the efficiency ratios show a diminishing trend while the solvency ratios are fluctuating and suggested the company to improve the efficiency of utilisation of its assets/capital to generate sales and maintain the current trend in favourable solvency ratios and improve solvency ratios that are not favourable.

Keywords: financial performance, ratio analysis, efficiency ratios, solvency ratios