- 1 INTRODUCTION:
- 2 ABOUT NESTLE:
- 3 SWOT ANALYSIS:
- 4 NESTLE INDIA LIMITED:
- 5 RATIO ANALYSIS:
- 6 CONCLUSION:
- 7 BIBLIOGRAPHY:
- 8 CERTIFICATE:
- 9 ACKNOWLEDGEMENT:
This is the project about the financial statement analysis of two companies of the same industry. In this regard, the companies which were chosen to be analyzed are NESTLE PAKISTAN and ENGRO FOODS LIMITED. Both the companies as well-reputed in the market and deal in a very wide range of food products.
As NESTLE, a very, well-known brand started its business life with only one product and that was condensed milk for infants. As of now, it has captured everyone’s mind for its tempting products; like chocolates, coffee, bottled water, powdered milk, flavored milk, tea whitener, and many more. The company has strong marketing strategies to come up with a competitive market.
Nestle products include baby food medical, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of Nestle’s brands have an annual share of over CHF 1 billion (about US $1.1 billion), including Nespresso, Nescafe, Kit Kat, Smarties, Vittel and Maggi. Nestle has 447 factories operates in 189 countries and employs around 339, 000 people. It is one of the main shareholders of L’Oréal, the world’s largest company.
Nestle was formed in 1905 by the merger of the Anglo-Swiss Milk company established in 1886 by brothers.
Nestle’s global vision is to be the recognized leading Nutrition, Health, and wellness company. Nestlé subscribes fully to this vision of being the number one Nutrition, Health, and Wellness company. We envision to:
- Lead a dynamic, passionate and professional workforce – proud of our heritage and positive about the future.
- Meet the nutrition needs of consumers of all ages – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products.
- Deliver shareholder value through profitable long – term growth, while containing to play a significant and responsible.
Nestle is dedicated to providing the best foods to people throughout their day, throughout their lives, throughout the world. With our unique experience of anticipating consumers’ needs and creating a solution, Nestlé contributes to your Well-being and enhances your quality of life.
The goal is simple and well designed with the core strategies to meet the demand of the consumers and to fulfil the needs of the consumers.
The strength of Nestle is the presence of its factories or operations in almost every country in the world employing around 283 00 people. The sales values have touched CHF 109.9 billion. Nestle has recorded a financial growth win in times of recession.
Nestle does not have direct market outlets and this can be one of the weaknesses as it can cause a difference to profit made. There another weakness is not having enough raw material production units; they depend on either local raw material producers or through other trade channels.
Nestle’s weakness of not having a direct outlet can be concerted as an opportunity by the introduction of new direct outlets. The acquisition of Cadbury’s for example is an opportunity since they are one the main competitors for Nestle, setting up their personal farms and raw material production units is an opportunity as it would reduce the cost for nestle. By acquisition, Neste can enter into a new market.
Their weakness of not being enough raw material production units and their dependency on other producers can threaten to reduce the quality of the products they offer. The contamination of food products is a major threat to Nestle in the market. Intense competition in its market segments also possesses a major challenge.
NESTLE INDIA LIMITED:
BALANCE SHEET AS AT 31 DECEMBER 2017:
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2017:
- Current Ratio:
Current Ratio = Current Assets/Current Liabilities
= 13395017/16788455 = 0.80
- Quick Ratio:
Quick Ratio = Liquid Assests/Current Liabilities
= (13395017-7046126.522)/16788455 = 0.38
- Net Working Capital Ratio:
Net Working Capital = (Current Assets – Current Liabilities)/Total Assets
= (13395017-16788455)/3517859 = – 0.10
Profitability Analysis Ratios:
- Return on Investment (ROI):
ROI = Net Profit After Tax/Total Assets
= 4668357/3517859 = 0.13
- Return on Assets (ROA):
ROA = Net Income/Avg.Total Assets
= 4524771/10873970 = 0.42
Activity Analysis Ratio:
- Asset Turnover Ratio:
Asset Turnover Ratio = Net Sales/Total Assets
= 64824364/3517859 = 1.84
- Inventory Turnover Ratio (ITR):
ITR = Cost Of Goods Sold/Inventory
= 48099046/7046126.522 = 6.83
Capital Structure Analysis Ratio:
- Debt to Equity Ratio:
Debt to Equity Ratio = Total Liabilities/Total Shareholders Equity
= 2576.443/35179859 = 0.08
- Debt to Asset Ratio:
Debt to Asset Ratio = Total Debt/Total Assets
= 2756443/35179859 = -3.62
- Interest Coverage Ratio:
Interest Coverage Ratio = Income Before Interest & Tax/Interest
= 6586973/84109 = 78.31
- Capital Market Analysis Ratio:
Price Earnings Ratio = Market Price Per Share/Earning Per Share
= 4844/102.94 = 47.06
After all the findings, it is concluded that financial ratios are the basic and most important part of any business. It describes the firm’s financial position. As the data indicates that NESTLE is an international brand and has expanded its business in a large geographical area and also offers a large range of products and most of them are dairy products.
From the financial statements it is clear that the financial position of the NESTLE is far better than deals with the limited products in a limited geographical area but on the basis of financial ratios has a better financial position.
- http://www.en.wikipedia.org/wiki/ Tata / nestle.
- Annual report – Nestlè 2017
- nestle.com/ chocdates/sweets / en /
- http://.marketing dawn.com/swat analysis -of-nestle.
This is to certify that of class —of—-school, has completed his project under my school supervision. He has taken proper care and shown the utmost sincerity in the completion of this project. I certify that this project is up to my expectations and as per the guidelines issued by CBSE.
We would like to express our special thanks of gratitude to my teacher as well as our principal who gave us the opportunity to make this project and helped us in the research work. We get the privilege to learn about the project.