umer kahlid khokhar financial analysis

1. Name:
Umer Khalid khokhar
Father Name:
Khalid mehmood khokhar
G1S12MCOM0032
Class
MCOM (A)
Final project
AFS
Submit to : Sir sarwer
Data:
2o.1 .2012

3. Dedicated to:
“The Teacher of the Universe’’ (Peace be upon Him)
With whose existence…….
By having the charity of His knowledge
the cosmos got illuminated with the light of insight and
wisdom and the journey of human enlightenment was made possible.
ACKNOWLEDGMENT
I WOULD LIKE TO THANKS TO ALLAH WHO GIVE ME STRENGTH
TO WORK ON THIS PROJECT AND ALSO THANKS TO MY FAMILY
WHO ASSISTED ME WITH THIS PROJECT

5. S.No.
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11b
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Contents
Executive summary
Vision and strategies
Mission Statement
History
Nestlé Pakistan
Values
Product Line
Audit reports
Summary of audit reports
Shareholding pattern
Financial Statements
Balance Sheet
Cash flow Statement
Profit and Loss Account
Ratio Analysis
Liquidity Ratio
Assets utilization Ratio
Capital Structure Ratio
Profitability Ratio
Market value Ratios
Recommendation
conclusion

6. NESTLE PAKISTAN
Executive Summary:
Nestle is undoubtedly one of the most proficient food leading companies in not only
Pakistan but all over the world. The employees at Nestle have finagled to retain their standards to
the most high-pitched level possible in the market. They make sure of the fact that the product of
Nestle is definitely the BEST TO USE. Nestle has an assortment of products to offers and they
have best to offer their product.
I have assign the project by me Sir to identify the company position. For this project
our main concern was to study the financial position or performance of the Nestle .I get the
information about the Nestle Company from the internet. We study the company financial
position and performance through RATIO ANALYSIS of the company. The ratios analysis is
also help to the investor whether it is good to invest in the Nestle company or not and also to the
financial institution that they finance to the Nestle company or not. Like Debt Management Ratio
help to financial institutions, Market value ratio is provide the information to investors or
Shareholders.
In the end I made some Recommendations based on me my analyses is to make them improve
their overall revenue rate or performance.

7. Vision and strategies:
The Nestle global vision is to be the leading health, wellness, and Nutrition Company in the
world. Nestle Pakistan subscribes fully to this vision. In particular, they envision to: Lead a
dynamic motivated and professional workforce - proud of its heritage and bullish about the
future. Meet the nutritional needs of consumers of all age groups - from infancy to old age, from
nutrition to pleasure, through an innovative portfolio of branded food and beverage products of
the highest quality. Deliver shareholder value through profitable long-term growth, while
continuing to play a significant and responsible role in the social, economic and environmental
sectors of the country. Nestle have profitable and diversified high quality food and beverage
product portfolio, delivering60:40+ advantage to consumers, available across all sales
channels. Nestle brands are the preferred choice in their categories. Consumer insight drives all
aspects of their marketing and communication efforts. Their company is seen as the No. 1 career
destination for talented, motivated and ambitious professionals. Their result-oriented
organizational structure ensures effective communication and empowered self-management
Mission Statement:
Since Nestle came into being, health, nutrition and wellness have been central to the Nestle
vision. 140years after Henri Nestle, nutrition is, more than ever, the key to the company's future.
. Consumers are at the heart of all that Nestle does. Their philosophy is summed up in four
words:
Good Food, Good life.
In their quest to become the world's leading health, nutrition and wellness company, they do
everything they can to help people live more fulfilling lives.
Good Food, Good Life
Henri Nestle chose his own coat of arms to represent the company's philosophy: a bird's nest,
with a mother feeding her young. The image represents their core values: care, family values,
nutrition, and healthy growth. Safety and comfort. It is a guarantee of quality and a commitment
to their responsibilities as a food company and experts in nutrition. Over the years they have
reaffirmed their commitment to wellness. Helping their consumers to live longer, healthier and
more productive lives, no matter their age, gender or socioeconomic status.
Good Ingredients
Three vital ingredients lie at the heart of Nestle and come together in their brands: their people,
their research and development, and their commitment to quality. The 250,000 dedicated people
who make up the Nestle family are the source of strength and energy. Realizing this, Nestle offer
them constant professional development. Nestle is one of the largest investors in food
technology. R&D is the cornerstone of the Nestle guarantee of quality. They consider quality in
three key dimensions: health, sensory pleasure, and social applicability. Thus they try to provide
nutritious. Tasty meals that offer value and arc culturally relevant.

8. INTRODUCTION
Nestle is the world's leading nutrition, health and wellness company todayand was founded in
1866 by Henri Nestlé. It has employed around 250,000people and has factories or operations in
almost every country in the world.Nestle is the world's leading nutrition, health and wellness
company today.Being the world's leading bottled water company is based on a firmeconomic
model: strong brands, global presence, innovation capacity,environmental stewardship and
passionate people
HISTORY Globally
1860-1905
In the 1860s Henri Nestlé, a pharmacist, developed a food for babieswho were unable to
breastfeed. His first success was a premature infant whocould not tolerate his mother's milk or
any of the usual substitutes. Peoplequickly recognized the value of the new product, after
Nestlé's new formulasaved the child's life, and soon, Farine Lactée Henri Nestlé was being sold
inmuch of Europe.Henri Nestlé endowed his company with the symbol derived from hisname.
His family coat of arms, the nest with a mother bird protecting heryoung, became the Company's
logo and a symbol of the Company's care andattitude to life-long nutrition. The Nestlé nest
represents the nourishment,security and sense of family that are so essential to life.
1905-1938
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company.By the early 1900s, the
company was operating factories in the UnitedStates, Britain, Germany and Spain. World War I
created new demand fordairy products in the form of government contracts. By the end of the
war,Nestlé's production had more than doubled. After the war Governmentcontracts dried up and
consumers switched back to fresh milk. However,Nestlé's management responded quickly,
streamlining operations andreducing debt. The 1920s saw Nestlé's first expansion into new
products,with chocolate the Company's second most important activity.

9. 1938-1975
Nestlé felt the effects of World War II immediately. Profits dropped from$20 million in 1938 to
$6 million in 1939. Factories were established indeveloping countries, particularly Latin
America. Ironically, the war helpedwith the introduction of the Company's newest product,
Nescafé, which wasa staple drink of the US military. Nestlé's production and sales rose in
thewartime economy. The end of World War II was the beginning of a dynamic phase forNestlé.
Growth accelerated and companies were acquired. In 1947 came alot of mergers. Diversification
came with a shareholding in L'Oréal in 1974.
1975-1996
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé'simproved bottom line
allowed the Company to launch a new round of acquisitions, the most important being American
food giant Carnation.
1996-2000
The first half of the 1990s proved to be a favorable time for Nestlé:trade barriers crumbled and
world economic markets developed into a seriesof more or less integrated trading areas. The
opening of Central and EasternEurope, as well as China, and a general trend towards
liberalization of directforeign investment was good news for a company with interests as farflungand diverse as Nestlé. While progress since then has not been asencouraging, the overall
trends remain positive.Nestlé opened the 20th century by merging with the Anglo-Swiss
CondensedMilk Company to broaden its product range and widen its geographicalscope.
2000-present
In July 2000, Nestlé launched a Group-wide initiative called GLOBE(Global Business
Excellence), aimed at harmonizing and simplifying businessprocess architecture; enabling Nestlé
to realize the advantages of a globalleader while minimizing the drawbacks of size. Nestlé was
First to Produce:Infant milk, Condensed milk, Milk chocolate, Soluble coffee and Freezedriedcoffee.

10. Nestlé Pakistan
Nestlé Pakistan Ltd is a subsidiary of Nestlé S.A. - a company of Swiss origin headquartered is
Vevey, Switzerland. It is a food processing company, registered on the Karachi and Lahore stock
exchanges and operating in Pakistan since 1988 under a joint venture with Milk Pak ltd and took
over management in 1992. For ten years in a row, the company has won a place among the top
25 companies of the Karachi Stock Exchange.
Headquartered in Lahore, the Company operates four production facilities. Two of its factories in
Sheikhupura and Kabirwala are multi product factories. One factory in Islamabad and one in
Karachi produce bottled water. Through its effective marketing and a vast sales and distribution
network throughout the country, it ensures that its products are made available to consumers
whenever, wherever and however.
Nestlé Pakistan operates in many ways but people, products and brands are the main flag bearers
of the Company’s image, and we continue to enhance the quality of life of people.
Nestlé Pakistan now operates the biggest milk collection operation in Pakistan, Currently, Nestlé
Pakistan collects milk from an estimated 190,000 farmers spread over 145,000 sq Km's in the
province of Punjab and Sindh.
Nestlé believes in creating shared value and is committed to the communities it works and lives
with. In Pakistan, the company is working closely with the communities in areas related to
Nutrition, Water and Rural Development, and continues to enhance the quality of life of people
throughout its value chain.
Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key focus on
Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to
serve the consumers. Nestlé Pakistan also prides itself in being the leaders in Nutrition, Health &
Wellness. Ever since 1867, when Henri Nestlé invented the first infant food, nutrition has been in
our DNA. Today more and more consumers mirror our emphasis on nutrition, as they realize that
food choices affect their health and quality of life.
The company’s strategy is guided by Nestlé’s Corporate Business Principles which are in line
with internationally accepted best practices and ethical performance culture. Nestlé’s existing
products grow through innovation and renovation while maintaining a balance in geographic
activities and product lines. Long-term potential is never sacrificed for short-term performance.
The Company’s priority is to bring the best and most relevant products to people, wherever they
are, whatever their needs are, and for all age groups.

11. In line with Nestlé’s global philosophy, Nestlé Pakistan is proud of its commitment to excellence
in product safety and quality and to providing value and aims to be the leading Nutrition, Health
and Wellness Company. As a socially responsible corporate, we always focus on environment
friendly operations, ethical business practices and our responsibility towards the communities.
Nestle product”
Nestle Pakistan Limited (NPL), formerly known as Nestle Milkpak Limited, is a subsidiary of
Nestle SA. – a company of Swiss origin headquartered in Vevey, Switzerland. It is listed on the
Karachi and Lahore stock exchanges. For 9 years in a row, the company has won a place among
the top 25 companies of the KSE.
Its principal activities include manufacturing, processing and selling food products and ancillary
equipment. The food products include dairy, confectionery, infant nutrition and culinary
products, coffee, beverage and drinking water. The major brands include MILKPAK UHT,
EVERYDAY, LACTOGEN, NESLAC, CERELAC, NESTLE PURE LIFE, NESCAFE,
MAGGI and KITKAT.
Nestle has been serving Pakistani consumers since 1988, when its parent company, the
Switzerland-based Nestle SA, first acquired a share in Milkpak Ltd. Nestle Pakistan is
headquartered in Lahore and operates four production facilities. Two of its factories in
Sheikhupura and Kabirwala are multi-product factories.
To preserve the quality of raw milk in hot weather conditions in Punjab the company has made
substantial investment in setting up an extensive cold chain by installing over 2200 chilling units
all over the milk shed area.
Nestle moto
Good food ,,,,,,good life

12. Nestle products

13. Water
Nestlé Pure Life, Nestlé Aquarel, Perrier, Vittel, Contrex, S.Pellegrino,Acqua Panna, Levissima,
Arrowhead, Poland Spring, Deer Park, Ozarka,Hépar, Ice Mountain, Zephyrhills
Other beverages
Nestea, Nesquik, Nescau, Milo, Carnation, Libby’s, Caro, Nestomalt,Nestlé
Shelf stable
Nestlé Nido, Nespray, Ninho, Carnation, Milkmaid, La Lechera, Moça,Klim, Gloria, Svelty,
Molico, Nestlé Omega Plus, Bear Brand, Coffee-Mate
Chilled
Nestlé Sveltesse, La Laitière, La Lechera, Ski, Yoco, Svelty, Molico, LC1,Chiquitin
Ice cream
Nestlé Antica Gelateria del Corso, Dreyer's/Edy's, Drumstick/Extrême,Maxibon/Tandem, Mega,
Mövenpick, Sin Parar/Sem Parar/Non Stop
Infant nutrition
Nestlé Nan, Lactogen, Beba, Nestogen, Cerelac, Neslac, Nestum,Guigoz, Good Start
HealthCare nutrition
Nutren, Clinutren, Peptamen, Modulen
Bouillons, soups, seasonings, pasta, sauces
Maggi, Buitoni, Thomy, Winiary,Torchin
Refrigerated products (cold meat products, dough, pasta, pizzas,sauces, snacks)
Nestlé, Buitoni, Herta, Toll House
Chocolate, confectionery and biscuits
Nestlé, Crunch, Cailler, Galak/Milkybar, Kit Kat, Smarties, Butterfinger,Aero, Polo

14. 2008

15. 2009

17. 2011

22. Nestly
SUMMARY OF AUDUTORS’ REPORTS TO MEMBERS:
2008
It was also unqualified report because no ambiguity was find in financial documents.Proper books of
accounts have been kept by the company. The financial statements together with the notes thereon
has been drawn up with conformity with insurance Ordinance, 2000 & companies Ordinance, 1984,
and accurately reflects books and records of the company, in all material respects ,and are in
accordance with the accounting policies consistently applied. The apportionment of assets, liabilities,
revenue and expenses has been performed in accordance along with Zakat deductible at source and
deposited under central zakat fund.
2009
It was unqualified report statements are free of any material misstatement and proper books of
account have been kept by the Company as required by the Companies Ordinance, 1984.
the books of account and are further in accordance with accounting policies consistently applied
except for change referred to in note 2.1 to the financial statements.
The apportionment of assets, liabilities, revenue and expenses has been performed in accordance
along with Zakat deductible at source.
2010
It was also unqualified report because Proper books of accounts have been kept by the company. The
financial statements together with the notes thereon has been drawn up with conformity with
insurance Ordinance, 2000 & companies Ordinance, 1984, The apportionment of assets, liabilities,
revenue and expenses has been performed in accordance along with Zakat deductible at source.
2011
Proper books of accounts have been kept by the company. The financial statements together with the
notes thereon has been drawn up with conformity with insurance Ordinance, 2000 & companies
Ordinance, 1984, and accurately reflects books and records of the company, in all material respects
,and are in accordance with the accounting policies consistently applied. The apportionment of assets,
liabilities, revenue and expenses has been performed in accordance along with Zakat deductible at
source.
2012
Proper books of accounts have been kept by the company. The financial statements together with the
notes thereon has been drawn up with conformity with insurance Ordinance, 2000 & companies
Ordinance, 1984, and accurately reflects books and records of the company, in all material respects
and are in accordance with the accounting policies consistently applied. The apportionment of assets,
liabilities, revenue and expenses has been performed in accordance along with Zakat deductible at
source.

23. Financial Statements
Balance Sheet
EQUITY AND LIABILITIES
Share Capital and Reserves
Authorized Capital
Issued, subscribed and paid up capital
Share premium
General reserve
Accumulated profit
Noncurrent liabilities
Long term finances
Deferred taxation
Retirement benefits
Liabilities against assets subject to finance lease
Current liabilities
Current portion of:
Current portion of non current liabilities
Short term borrowings from associated company – unsecured
Short term borrowings – secured
Short term running finance under mark–up arrangements – secured
Customer security deposits – interest free
Trade and other payables
Interest and mark–up accrued
2008
2009
2010
2011
2012
RS.(000)
750,000
453,496
249,527
280,000
3,405,824
4,388,847
750,000
453,496
249,527
280,000
3,443,932
4,426,955
750,000
453,496
249,527
280,000
4,598,850
5,581,873
5,139,875
1,319,333
351,968
77,582
6,988,758
4,210,750
1,531,945
215,925
118,275
6,076,895
5,573,750 7,848,050 15,366,964
1,705,508 2,476,871 3,304,091
229,114 44,03,077 6,37,985
55,415
13,690 -7,563,787 10,778,988 19,309,040
54,042
1,322,442
2,105,375
756,362
105,686
3,746,286
46,979
8,083,130
57,786
41,587
41,686
2,143,750
4,950,000 3,900,000
2,780,843 41,75,236 5,937,374
128,857
149,791
184,441
4,633,932 7,343,507 9,743,567
61,404
128,334
196,345
9,806,572 16,788,455 20,003,413
300,000
1,924,287
127,884
2,798,185
102,173
5,306,571
750,000
750,000
453,496
453,496
249,527
249,527
280,000
280,000
6,629,393 10,577,241
7,612,416 11,560,264
CONTINGENCIES AND COMMITMENTS:
16,684,176 18,586,980 22,952,232 35,179,859 50,872,717
Rupe

24. Balance Sheet
Assets:
Tangible fixed assets
Property, plant and equipment
Capital work–in–progress
Intangible assets
Long term loans and advances
Long term deposits and prepayments
Goodwill
Current assets
Stores and spares
Trade debts
Stock in trade
Current portion of long term loans and advances
Advances, deposits, prepayments and other receivables
Cash and bank balances
2008
2009
2010
2011
2012
Rupees.(000)
9,464,373 10,700,874 11,370,611 16,230,528 21,970,957
1,382,401 914,956 3,076,472
53,70,56111,549,623
10,846,774 11,615,830 14,447,083 21,601,089 33,520,580
49,744
7,106
16,735
11,954
7,173
98,544 113,490 125,674 161,982 236,639
5,036
5,026
9,817
9,817
98,663
104,178
804,647
456,813
2,488,573
26,615
1,488,103
419,327
5,684,078
16,684,176
868,984
241,715
3,895,038
21,012
1,503,009
315,770
6,845,528
18,586,980
1,050,804
126,499
4,602,019
19,149
2,048,936
505,516
8,352,923
22,952,232
1,278,416
276,858
7,064,170
30,914
4,042,634
702,025
13,395,107
35,179,859
1,373,239
491,842
8,025,653
45,735
6,208,184
760,831
16,905,484
50,872,717

25. Cash Flow Statement
Cash flow from operating activities
Cash generated from operations
(Increase) / decrease in long term security deposits
(Increase) in long term loans and advances
Retirement benefits paid
Finance cost paid
Taxes paid
Net cash generated from operating activities
Cash flow from investing activities
Fixed capital expenditure
Purchase of intangible asset
Sale proceeds of property, plant and equipment
Net cash used in investing activities
Cash flow from financing activities
Repayment of long term finances
Short term borrowings from associated company
Net movement in short term borrowings – secured
Payment of finance lease liabilities
Dividend paid
Net cash (used in ) financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
2008
4,224,959
1,052
-23,210
-89,867
-544,413
-41,697
3,526,824
2009
2010
2011
2012
6,397,615 7,618,810 8,384,781 12,722,899
10
-4,791
-88,846
-9,343
-10,321
-48,073
-89,478
-293,122 -137,122
-92,103 -136,227
-497,244 -498,656 -983,425 -2,110,131
-990,053 -1,518,903 -1,776,948 -2,042,636
4,607,863 5,449,017 5,484,232 8,255,581
-1,871,296 -2,271,269 -4,295,328 -8,940,862 -14,070,392
-19,126
-193,060
74,233
32,995
41,654
111,945
123,711
-1,797,063 -2,238,274 -4,272,800 -8,828,917 -14,139,741
2,000,000 7,084,170
1,995,375
-2,252,000
-735,000 -300,000
4,950,000 -1,050,000
-66,383
-54,132
-64,291
-57,924
-41,647
-1,201,764 -2,946,464 -2,946,661 -2,493,275 -1,811,695
-2,003,147 -1,305,221 -3,010,952 2,146,801 4,180,828
-273,386 1,064,368 -1,834,735 -1,197,884 -1,703,332
-1,231,574 -1,504,960 -440,592 -2,275,327 -3,473,211
-1,504,960 -440,592 -2,275,327 -3,473,211 -5,176,543

26. Profit and Loss Account
Sales – net
Cost of goods sold
Gross profit
Distribution and selling expenses
Administration expenses
Operating profit
Finance cost
Other operating expenses
Other operating income
Profit before taxation
Taxation
Profit after taxation
Earnings per share - basic and diluted (Rupees)
2008
2009
2010
2011
34,183,847
-25,231,532
8,952,315
-3,890,352
-956,816
4,105,147
-557,325
-1,382,138
-1,939,463
61,800
2,227,484
-674,590
1,552,894
34.24
41,155,822
-29,256,902
11,898,920
-5,238,488
-1,085,121
5,575,311
-442,050
-1,091,149
-1,533,199
144,145
4,186,257
-1,181,124
3,005,133
66.27
51,487,302
-37,608,733
13,878,569
-5,709,078
-1,311,637
6,857,854
-513,081
-819,084
-1,332,165
170,491
5,696,180
-1,583,331
4,112,849
90.69
64,824,364
-48,099,046
16,725,318
-6,862,113
-1,405,298
8,457,907
-1,050,355
-1,064,233
-2,114,588
159,545
6,502,864
-1,834,507
4,668,357
102.94
2012
Rupees(000)
79,087,696
-57,564,265
21,523,431
-8,787,508
-1,769,803
10,966,120
-1,827,969
-1,320,319
-3,148,288
160,142
7,977,974
-2,113,463
5,864,511
129.32

27. Ratio analyses:
A tool used by individuals to conduct a quantitative analysis of information in a company's
financial statements. Ratios are calculated from current year numbers and are then compared
to previous years, other companies, the industry, or even the economy to judge the
performance of the company. Ratio analysis is predominately used by proponents of
fundamental analysis.

28. Liquidity ratios:
Current ratio=
2008
1.07:1
Current Assets/ Current Liabilities
2009
0.85:1
2010
0.85:1
2011
0.80:1
2012
0.85:1
Interpretation:
In 2009 the current ratio has increasing trend, and the nestle has the ability to pay 0.85 against 1
rupees and in 2010 the company have same current ratio. In 2011 the current ratio decrease due
to increase in current liabilities as compare to current assets and the company have the ability to
pay 0.80 against 1 rupees liability. But in 2012 the current ratio increase due to increase in the
current assets as compare to current liabilities.
Quick ratio:
Quick ratio =
2008
0.60:1
Current Assets –Inventory / Current Liabilities
2009
0.37:1
2010
0.38:1
2011
0.38:1
2012
0.44:1
Interpretation:
The quick ratio is decrease in 2009 because nestle increase in current liabilities as compare
to the current assets , and the company have the ability to pay current assets without relying on
inventory . In 2010 the current ratio increase due to increase in current assets and in 2011
company have same quick ratio. In 2012 Nestle increase the quick ratio and Nestle have the
ability to pay current liability without relying on inventory.

29. Net working capital:
current Asset - current lib.
2008
2009
2010
2011
2012
377,507
-1,237,602
1,453,649
-3,393,348
-3,097,929
Net working capital is also another measure of the liquidity of the company. Net working capital
is the difference between the current assets and current liabilities. It is just like the current ratio
indicating either the company has enough current assets to pay its current liabilities. If the
current assets are more than the current liabilities then company has strong liquidity position
indicating it has the ability to discharge it current liabilities. Net working capital is also going
increase every year which means APL have enough cash after payment of current liabilities. So
the liquidity position is strong.
Cash ratio based on current liabilities
Cash and cash equivalents
Current Liabilities
2008
2009
2010
2011
2012
0.07902033
0.03906531
0.0515487
0.04181594
0.03803506
Cash and cash equivalents are current assets excluding inventory, prepayments and trade debts.
The above ratio shows variation due to inflow or outflow of cash in business. In 2010 the ratio is
very high but in 2012 ratio is very low as compared to other years which means in 2010 APL has
more cash and cash equivalents but in 2012 APL have low cash and cash equivalents to pay
current liabilities.

30. Activity Analysis
Inventory Turnover
Inventory Turnover Ratio =
2008
13.74 time
2009
10.57 time
2010
11.19 time
Sales/Inventory
2011
9.18 time
2012
9.85 time
Interpretation:
In 2008 the inventory turnover ratio reduce due to increase in inventory and inventory
converted in to sale less as compare to 2008.In 2009 inventory turnover ratio increase means
inventory is more converted into sale as compare to 2008.But in 2010 inventory turnover is also
increase. In 2011 reduce due to decrease in cost of goods sold. But also increase in 2012 as
compare to 2011.
Days Sales Outstanding (DIO)
Days sales outstanding =
2008
4.81 days
Receivables/Average Sale per day
2009
2.11 days
2010
0.88 days
2011
1.54 days
2012
2.24 days
Interpretation:
In 2009 Nestle company Days outstanding ratio is low as compare to 2008 and
company can recover the sale receivables more quickly and in 2010 the ratio is more low as
compare to 2009.In 2011 the ratio increase which show that the company sales receivable not
converted into cash quickly as compare to 2010, and this ratio also increase in 2012 .

31. Fixed Asset Turnover
Fixed Assets Turnover=
2008
3.15 time
Sales/Net Fixed Assets
2009
3.54 time
2010
3.56 time
2011
3.00 time
2012
2.36 time
Interpretation:
In 2009 the fixed assets turnover ratio is high as compare to 2008 means the
company use more fixed assets as compare to 2008 and also in to 2010.But in 2011 the ratio is
reduce which show that the company use less fixed assets to generate sales and in 2012 the ratio
is reduce which is good because company use generate more sale by using less fixed assets.
Current asset turnover =
_Sale___________
current Asset
2008
2009
6.01 times
6.01 times
2010
6.16 times
2011
2012
4.83 times
4.67 times
Cash and cash equivalents are current assets excluding inventory, prepayments and trade debts.
The above ratio shows variation due to inflow or outflow of cash in business. In 2010 the ratio is
very high but in 2012 ratio is very low as compared to other years which means in 2010 APL has
more cash and cash equivalents but in 2012 they have low cash and cash equivalents to pay
current liabilities.

32. Total Asset Turnover
Total Assets Turnover=
2008
2.05 time
Sales/Total Assets
2009
2.21 time
2010
2.24 time
2011
1.84 time
2012
1.55 time
Interpretation:
The ratio show how mach total assets use to generate the sale. In 2009 the Total assets
turnover ratio is high compare to 2008 which show that the company use more fixed to generate
the sale , the ratio of 2010 is increase as compare to 2009. In 2011 the ratio reduce which show
that the company generate more sale by using less total assets and in 2012 the ratio reduce more
compare to 2011.
Solvency Ratios:
Total Debt to Total Assets
Total Debt to Total Assets=
2008
73.69%
(Total Debt/Total Assets)*100
2009
76.18%
2010
75.68%
2011
78.36%
2012
77.28%
Interpretation:
In 2009 the Total debt to total assets ratio is high as compare to 2008 which show
that the 76.18% company assets are generated from the total debt . In 2010 the ratio reduce
which show that the generate more assets from less total debt compare to 2009.But high in 2011
and produce 78.68 % total assets from total debt . In 2012 the ratio decrease from 2011 which is
good for the nestle company.

33. Time-Interest-Earned Ratio:
Time-Interest-Earned Ratio= EBIT/Interest Charges
2008
5.00 time
2009
10.47time
2010
12.10 time
2011
7.19 time
2012
5.36 time
Interpretation:
The time earned ratio is high in 2009 as compare to 2008 and which show that the
company has ability to pay its interest charges easily compare to the 2008 and also increase in
2010 which that the company is increase and pay interest charges .But the ratio is reduce in
2011 which show that the company interest charges increase and 2012 interest charges are
increase that’s way the ratio is reduce as compare to 2011.
EBITDA coverage Ratio:
EBITDA coverage Ratio= EBITDA +Lease payment/Interest charges +Lease payment+
Principle amount
2008
1.18 time
2009
1.81 time
2010
1.71 time
2011
1.41 time
2012
1.02 time
Interpretation:
In 2009 the EBITDA coverage ratio is higher than the ratio of 2008 which show that
the Nestle company earning is higher to met the loan and its charges but this ratio decrease in
2010 and show that the cash flow available is flow for the payment of fixed and financial
charges. The ratio is also decrease in 2011 and 2012.

34. LTD to fixed assets = Long term debts / fixed Asset
2008
2.04887835
2009
2.214229
2010
2.243237
2011
1.842656
2012
1.554619
Interpretation:
Long term liability to fixed asset ratio is one of the measures of the solvency of the company. It
measures that how much fixed assets are financed by the long term liabilities. This ratio is in
increasing trend throughout the five years. In 2009 2.214229 mfixed assets and in 2013 1.554619
fixed assets are financed by long term liabilities.
Profitability Ratios:
Profit Margin on Sales
2008
4.54%
= ( Net income/Sales)*100
2009
7.30%
2010
7.99%
2011
7.20%
2012
7.42%
Interpretation:
In 2009 the Profit margin on sales ratio is higher than the ratio of 2008 that show that
7.30% income is generate from 1 rupees sale .That ratio is increase in 2010 and show that the
company that the net income is increase per rupees sale. But ratio decrease in 2011 , the net
income decrease as compare to 2010.But ratio increase in 2012 and company can get 7.20% net
income from 1 rupees.

35. Return on Total Assets :
Return on Total Assets Ratio
2008
9.31%
= Net income/Total Assets
2009
16.17%
2010
17.92%
2011
13.27%
2012
11.53%
Interpretation:
The ratio of 2009 is increase as compare the ratio of 2008 which show that the
company net income is increase from the use of total assets .And the ratio of2010 is increase
16.17% to 17.92% and the company get more income by using its total assets .But in 2011 and
2012 the ratio is decreasing which show that the company use more debt on which the pay
interest that’s way its net income is decrease and the ratio.
Basic Earning Power Ratio :
Basic Earning Power Ratio =
2008
16.69%
2009
24.90%
(EBIT/Total Assets)*100
2010
27.05%
2011
21.47%
2012
19.28%
Interpretation:
In 2009 the Basic earnings power ratio is increase from 2008 that show that the
company total assets have the availability to generate the 24.90% EBIT and the ratio is also more
increase in 2010 which is every good as compare to 2008 and 2009.But the ratio decrease in
2011 that the company EBIT decrease which the company generated from company total assets
and also decrease in 2012.

36. Return on Common Equity :
Return on Common Equity
2008
35.38%
= (Net Income/Common equity)*100
2009
67.88%
2010
73.68%
2011
61.33%
2012
50.73%
Interpretation:
In 2009 the company ratio increase from35.38% to 67.88% that show that the
company net income increase on the investment of the shareholders and the ratio of 2010 is also
high. But the ratios of 2011 and 2012 is decreasing which show that the company net income is
reduce on the investment of the shareholders.
Market Value Ratios:
Price/Earnings per share=
2008
0.29 time
2009
0.15 time
Price per share/Earning per share
2010
0.11 time
2011
0.10 time
2012
0.08 time
Interpretation:
The price/earning per share ratio of the company reduce in 2009 and it indicate that the
investors are paying 0.15 for every rupees 1company earning .The ratio of company
continuously decreasing from 2009 to 2012, which show that the company earning per share is
continuously from year to year.

37. Price/Cash Flow Ratio :
Price/Cash Flow Ratio
2008
-301.33time
=
Price per share/Cash flow per share
2009
-1029.29 time
2010
-199.31time
2011
-130.60 time
2012
-87.61 time
Interpretation:
In 2009 cash flow per share is high as compare to 2008 but the is decreasing from 2010
which means that the denominator which cash flow per share is increasing year to year.
Cash reinvestment ratio:
2009
2.56%
2010
8.96%
2011
-18.84%
2012
3.06%
2013
12.60%
Cash reinvestment ratio measures how much cash is available for the investment in business
assets. In 2009 company has low cash to reinvest but in 2013 company has high cash to reinvest
in the business assets.
Cash flow and solvency ratio:
2009
17.88%
2010
27.52%
2011
-20.63%
2012
23.22%
2013
37.60%
This ratio is used to measure the solvency of the company either the company has enough cash to
pay its total debts. In 2013 company has 37.60% cash to pay its debts.
Cash per share:
2009
2010
2011
2012
2013
34.74
58.32
-38.61
60.96
87.32
Cash flow per share measures the availability of cash against one share of equity. The ratio is in
increasing trend except in 2011. In 2011 due to the loss in cash flow from operations company
has no cash against one share of equity. In 2012 and 2013 company has 60.96 rupees and 87.32
rupees cash against one share which shows phenomenal performance of APL.

38. Market/Book Ratio :
Market/Book Ratio
2008
66440.64 time
=
2009
65868.71 time
Market price per share/Book price per share
2010
52240.14time
2011
38305.56 time
2012
25224.15 time
Interpretation:
In2009 the Market/Book ratio is decrease as compare to 2008 which show that the company
accumulated profit of 2009 is increase from 2008.And in the ratio is decrease more quickly
in2010,11 and12 which means that the company performance is going good because its
accumulated profit increase that’s way its nominator is greater than the denominator which result
in decrease of Market/Book ratio of the company continuously .

39. Recommendations:
Employees should be trained according to the changing standards of the organization.
Company should conduct survey from time to time, according to which changes can be
introduced in the organization to stay updated in the market.
They should introduce creativity into the work, so that the employees Cando their work
active mindedly.
Employee should be given compensation in order to keep them loyal.
Employee should be more involved in decision making to become more differentiated.
Company should provide incentives to shop keepers
As far as the Liquidity ratios are concerned then liquidity position of nestle is not good
so the company should improve current ratio and should be able to pay off its current
liabilities in this regard the company should increase cash and cash equivalents
Conclusion:
the company performance not bad, and still nestle is the market leader in pak
but the company have more chance to increase its growth and market share
because uniliver is the big competitor and he give more challenge in the
market.
So we can say company performance is satisfactory