Nestle Pakistan is a subsidiary of Nestle S.A. that has been operating in Pakistan since 1988. It operates four factories producing foods such as milk, cereals and bottled water. The document analyzes Nestle Pakistan's financial ratios for 2013 and 2014, including current ratio, acid test ratio, gearing ratio, interest coverage ratio, inventory turnover, receivables collection period, and various profitability and investment ratios to evaluate the company's liquidity, leverage, efficiency and returns.
Uneak White's Personal Brand Exploration Presentation
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Nestle financial report analysis 2013 & 2014
1.
2. RATIO ANALYSIS OFNESTLE PAKISTAM
UVAS BUSINESS SCHOOL
PRESENTED TO
SIR SHAHID MEHMOOD
PRESENTED BY
ALI RAZA
FAIZA GULAM RASOOL
IQRA IHSAN
RAMEELA SHAFIQUE
NAILA JAMEEL
SHAHRYAR AKRAM
ATTIYA SHOUKAT
5. NESTLÃâS FOUNDER, GERMAN-BORN PHARMACIST
HENRI NESTLÃ, LAUNCHES HIS âFARINE LACTÃEâ
(âFLOUR WITH MILKâ) IN VEVEY, SWITZERLAND. IT
COMBINES COWâS MILK, WHEAT FLOUR AND
SUGAR, AND NESTLÃ DEVELOPS IT FOR
CONSUMPTION BY INFANTS WHO CANNOT BE
BREASTFED, TO TACKLE HIGH MORTALITY RATES.
AROUND THIS TIME HE STARTS USING THE NOW
ICONIC âNESTâ LOGO.
HISTORY
In
1867
7. ⢠It operates four production
factories.
⢠In Sheikhupura and
Kabirwala
â multi product factories
⢠And in Islamabad and
Karachi
â produce water.
9. Ratios analysis is important for :
⢠Analyzing Financial Statements
⢠Judging Efficiency
⢠Locating Weakness
⢠Formulating Plans
⢠Comparing Performance
10. Current Ratio
(working capital Ratio )
Current
assets
Current
liabilities
Current
Ratios
â¢primary measure liquidity
â¢Relates current assets to current
liabilities
â¢2:1 or higher is satisfactory
14. Long-term Solvency Ratios
⢠Solvency ratios tellsâŠâŠ..
⢠Some major solvency ratios are:-
⢠1) Gearing Ratio
⢠2) Interest Coverage Ratio
⢠3)Debt Ratio
15. 1)Gearing Ratio:-
The gearing ratio is a general term describing
a financial ratio that compares some form of
owner's equity (or capital) to borrowed
funds.
17. Gearing Ratio:-
⢠As described below in comparison âŠâŠâŠ
2013 2014
(17464812/29323969)*100
=59.558%
6951459/19579084*100
=35.50%
18. 2) Interest coverage ratio:-
⢠This ratio tells us about the ability of
company to meet its interest
paymentsâŠâŠ
⢠If it is increasing then it is good for
business ,
⢠If it is decreasing then it is not good
for business
20. Interest coverage ratio:-
⢠Comparison over 2 years:-
2013: 2014:
11471270/2113096 =
5.4286 TIMES
14113463/2155637 =
6.547 TIMES
21. 3) DEBT Ratio:-
⢠Debt ratio measures a firmâs total
liabilities as a percentage of its total
assets.
⢠The higher percentage indicates more
leverage and more risk.
24. EFFICIENCY
The comparison of what is actually PRODUCED or
performed with what can be achieved with the
same CONSUMPTION of RESOURCES (MONEY,
time, LABOUR etc.). IT is an important FACTOR in
determination of PRODUCTIVITY.
âMeasures the Efficiency of the Businessâ
ï±TRADE RECEIVABLE COLLECTION PERIOD.
ï±TRADE PAYABLE PAYMENT PERIOD.
ï±INVENTORY PERIOD.
25. TRADE RECEIVABLE COLLECTION PERIOD
TRADE
RECEIVABLES
2013
=
ðððððð
ðððððððð
â ððð
=1.38 days
2014
=
ðððððð
ðððððððð
â ððð
= 1.03 days
365 (DAYS)
SALES
(CREDIT)
27. TRADE PAYABLE PAYMENT PERIOD
2013 2014
=
ððððððð
ðððððððð
â ððð
= 55 days
2014
=
ðððððððð
ðððððððð
â ððð
= 75 days
28. INVENTORY PERIOD
In accounting, inventory period is a
measure of the average number of
days inventory is held, calculated by
dividing the inventory by the average
daily cost of goods sold. It is also called
days in inventory.
=
ð°ðµðœð¬ðµð»ð¶ð¹ð
ðªð¶ðºð» ð¶ð ðºðšð³ð¬ðº
â ððð ð«ðšððº
29. Inventory Conversion Period
INVENTORY COST OF
SALES
2013
=
ððððððð
ðððððððð
â ððð
= 46 days
2014
=
ððððððð
ðððððððð
â ððð
= 51days
365
30. INVESTMENT RATIOS
⢠DIVIDEND YIELD (%)
⢠DIVIDEND PAYOUT(%)
⢠EARNING PER SHARE
⢠PRICE / EARNING RATIO
⢠TOTAL SHARE HOLDER RETURN
31. DIVIDEND YIELD (%)
ANNUAL
DIVIDEND
PAID PER
SHARE
MARKET
PRICE PER
SHARE
DIVIDEND
YIELD
The dividend yield is a financial ratio that
measures the amount of cash dividends
distributed to common shareholders relative to
the market value per share.
DIVIDEND PAYMENT F
TOTAL NUMBER OF
SHARE OUTSTANDING
33. DIVIDEND PAYOUT (%)
TOTAL
DIVIDEND
PAID
PROFIT
AFTER TAX &
PRFERENCE
DIVEDEND
DIVIDEND
PAYOUT
The dividend payout ratio measures the
percentage of net income that is distributed to
shareholders in the form of dividends during the
year.
49. Return On Equity
âDesired to work out the
profitability of the companyâ
Formula:
=
ð·ð¹ð¶ðð°ð» ðšðð»ð¬ð¹ ðð°ðµðšðµðªð¬ ðªð¯ðšð¹ð®ð¬ðº & ð»ðšð¿
ð¬ðžðŒð°ð»ð
â ððð
51. GROSS PROFIT RATIO
âRatio of
gross profit to Net
salesâ
Formula
=
ð®ð¹ð¶ðºðº ð·ð¹ð¶ðð°ð»
ðºðšð³ð¬ðº
â ððð
Net sales
= Sales â
Returns
Inward
55. Operating Profit Ratio
âCalculated by
dividing the
Operating Net Profit
by Salesâ
Formula:
(Operating Profit/Net
sales)*100
Determined
the Ability Of
the
Management
in Running
the Business
57. CONCLUSION
The company performance not bad
and still nestle is the market leader in
Pakistan . But the company have
more chance to increase its growth
and market share.
So we can say company performance
is satisfactory.