Financial Statements Of Nestle Accountancy Project CBSE Class 12

Portfolio of diversified products: Nestle’s portfolio of diversified products covers a range of food and drink items. Understanding how various business divisions function and contribute to the overall success of the firm can be learned by studying the financial statements of a company that sells a variety of items.

Performance on the financial front: Nestle is one of the biggest and most successful food and beverage corporations in the world. Understanding financial terms like revenue, expenses, profitability, and cash flow can be accomplished by looking at the financial statements of a prosperous business like Nestle.

Social Responsibility: Nestle is committed to social and environmental responsibility. As a student, understanding how businesses can balance financial success with social and environmental responsibility can be gained by studying the financial statements of a company that places a high value on sustainability.

These are just a few of the reasons you might have selected Nestle for your project on accounting.

Ratio Analysis

The following details relate to ratio analysis for Nestle:

By investigating connections between various financial statements, ratio analysis is a technique for analysing a company’s financial performance. Liquidity ratios, solvency ratios, profitability ratios, and efficiency ratios are the most often utilised ratios. Examples of ratios that can be used to evaluate Nestle’s financial performance are provided below:

Liquidity ratios: These measures show whether a business can pay short-term debts. Current ratio, quick ratio, and cash ratio are a few examples of liquidity ratios.

Solvency Ratios: Solvency ratios are measures that gauge a company’s capacity to pay down long-term debt. The debt-to-equity ratio, the debt-to-assets ratio, and the interest coverage ratio are a few examples of solvency ratios.

Profitability Ratios: Profitability ratios are ratios that gauge a business’s capacity for making a profit. The return on equity, return on assets, and gross profit margin are a few examples of profitability ratios.

Efficiency Ratios: Efficiency ratios gauge how well a business manages its assets and liabilities. Inventory turnover ratios, accounts receivable turnover ratios, and accounts payable turnover ratios are a few examples of efficiency ratios.

You may learn more about Nestle’s financial performance, including its capacity to turn a profit, control its debt, and fulfil its commitments, by examining these ratios. Ratio analysis is only one tool available for examining a company’s financial performance, thus it must be used in concert with other techniques like trend analysis and industry benchmarks.

Balance Sheet

A balance sheet is a financial statement that shows a company’s assets, liabilities, and equity at a particular point in time. Here is an example of what Nestle’s balance sheet might look like (numbers are for illustrative purposes only):

Nestle Balance Sheet as of December 31, 2022

Assets:

• Cash and cash equivalents: $5,000,000
• Accounts receivable: $10,000,000
• Inventory: $15,000,000
• Property, plant, and equipment: $30,000,000
• Intangible assets: $20,000,000
• Other assets: $5,000,000
• Total assets: $85,000,000

Liabilities:

• Accounts payable: $10,000,000
• Short-term debt: $5,000,000
• Long-term debt: $25,000,000
• Other liabilities: $10,000,000
• Total liabilities: $50,000,000

Equity:

• Common stock: $10,000,000
• Retained earnings: $25,000,000
• Other equity: $500,000
• Total equity: $35,500,000

Total liabilities and equity: $85,000,000

In this example, Nestle’s balance sheet shows that it has total assets of $85,000,000 and total liabilities of $50,000,000, leaving it with total equity of $35,500,000. This means that Nestle’s assets are financed by a combination of debt and equity, and the company has a positive net worth.

It’s important to note that the figures in the balance sheet can vary from year to year, and they should be analyzed in conjunction with other financial statements and metrics to get a complete picture of Nestle’s financial performance.

P&l Report

A profit and loss (P&L) statement, also known as an income statement, is a financial statement that shows a company’s revenues, expenses, and net income or loss over a period of time. Here is an example of what Nestle’s P&L statement might look like (numbers are for illustrative purposes only):

Nestle P&L Statement for the year ending December 31, 2022

Revenue:

• Sales: $100,000,000
• Other revenue: $5,000,000
• Total revenue: $105,000,000

Expenses:

• Cost of goods sold: $50,000,000
• Selling, general, and administrative expenses: $20,000,000
• Research and development expenses: $5,000,000
• Other expenses: $5,000,000
• Total expenses: $80,000,000

Operating income: $25,000,000

Other income and expenses:

• Interest income: $1,000,000
• Interest expense: $2,000,000
• Other income: $500,000
• Other expense: $1,000,000
• Total other income and expenses: -$1,500,000

Income before taxes: $23,500,000

Income tax expense: $5,000,000

Net income: $18,500,000

In this example, Nestle’s P&L statement shows that it had total revenue of $105,000,000 and total expenses of $80,000,000, leaving it with operating income of $25,000,000. After accounting for other income and expenses and income taxes, Nestle had net income of $18,500,000 for the year.

Again, it’s important to note that the figures in the P&L statement can vary from year to year, and they should be analyzed in conjunction with other financial statements and metrics to get a complete picture of Nestle’s financial performance.

Comparative Balance Sheet

A comparative balance sheet is a financial statement that shows a company’s assets, liabilities, and equity for two or more periods side by side, allowing for a comparison of changes over time. Here is an example of what Nestle’s comparative balance sheet might look like (numbers are for illustrative purposes only):

Nestle Comparative Balance Sheet as of December 31, 2021 and December 31, 2022

Assets:

December 31, 2022:

• Cash and cash equivalents: $5,000,000
• Accounts receivable: $10,000,000
• Inventory: $15,000,000
• Property, plant, and equipment: $30,000,000
• Intangible assets: $20,000,000
• Other assets: $5,000,000
• Total assets: $85,000,000

December 31, 2021:

• Cash and cash equivalents: $3,000,000
• Accounts receivable: $8,000,000
• Inventory: $12,000,000
• Property, plant, and equipment: $28,000,000
• Intangible assets: $18,000,000
• Other assets: $3,000,000
• Total assets: $72,000,000

Liabilities:

December 31, 2022:

• Accounts payable: $10,000,000
• Short-term debt: $5,000,000
• Long-term debt: $25,000,000
• Other liabilities: $10,000,000
• Total liabilities: $50,000,000

December 31, 2021:

• Accounts payable: $8,000,000
• Short-term debt: $3,000,000
• Long-term debt: $20,000,000
• Other liabilities: $8,000,000
• Total liabilities: $39,000,000

Equity:

December 31, 2022:

• Common stock: $10,000,000
• Retained earnings: $25,000,000
• Other equity: $500,000
• Total equity: $35,500,000

December 31, 2021:

• Common stock: $9,000,000
• Retained earnings: $21,000,000
• Other equity: $400,000
• Total equity: $30,400,000

Total liabilities and equity:

• December 31, 2022: $85,000,000
• December 31, 2021: $72,000,000

In this example, Nestle’s comparative balance sheet shows that the company’s total assets increased from $72,000,000 in 2021 to $85,000,000 in 2022. The company’s liabilities also increased from $39,000,000 in 2021 to $50,000,000 in 2022. However, Nestle’s total equity also increased from $30,400,000 in 2021 to $35,500,000 in 2022, indicating that the company’s net worth increased over the period.

Comparative balance sheets can help investors and analysts understand the trends and changes in a company’s financial position over time.

Conclusion

Nestle is a reputable business with a lengthy track record of achievement in the food and beverage sector. We can show that the company has a strong financial position with consistent growth throughout the years by using ratio analysis and financial statements like the balance sheet and P&L statement. In order to provide light on the company’s financial trends, the comparative balance sheet also demonstrates how Nestle’s assets, liabilities, and equity have changed over time. Overall, Nestle is a dependable and successful business that keeps up with market competition by adapting and innovating.

Certificate of Completion

I, [Student’s Full Name], hereby certify that I have successfully completed the Accountancy project on “Financial Statements of Nestle” as part of the CBSE Class 12 curriculum at School Name. The project was undertaken during the academic year [Year], and I am thrilled to share my learnings and experiences.

Project Title: Financial Statements of Nestle – An Accountancy Project
Class: CBSE Class 12
Subject: Accountancy
Academic Year: [Year]

Throughout this project, I had the incredible opportunity to explore the financial aspects of Nestle, a renowned international food and beverage corporation. My journey began by researching the rich history and objectives of Nestle, understanding how it evolved into a global powerhouse providing wholesome and premium food and beverages to people worldwide.

By choosing Nestle as the subject of my project, I was fascinated to learn about the company’s immense market valuation and its presence in over 190 countries. It was truly inspiring to delve into the diverse portfolio of products Nestle offers, ranging from coffee and dairy goods to pet food, infant formula, and sweets.

One of the most thrilling aspects of the project was analyzing Nestle’s financial statements, including the Balance Sheet and Profit and Loss (P&L) Statement. These statements provided me with valuable insights into the company’s financial health, revenue generation, and expense management.

Additionally, I had the privilege of conducting Ratio Analysis, a critical technique for evaluating a company’s financial performance. I explored liquidity ratios, solvency ratios, profitability ratios, and efficiency ratios, which gave me a holistic view of Nestle’s operations and growth prospects.

Studying the comparative balance sheet for Nestle allowed me to observe changes in the company’s assets, liabilities, and equity over time. It was intriguing to witness how Nestle’s financial position evolved from one year to another and understand the factors contributing to its success.

Throughout the project, I was deeply impressed by Nestle’s commitment to social and environmental responsibility. The company’s efforts to create shared value, operational sustainability, and investment in its people left a lasting impact on me as a student aspiring to understand how businesses can contribute positively to society.

In conclusion, I am immensely grateful for the opportunity to undertake this project on “Financial Statements of Nestle. ” It has been an enlightening experience that has strengthened my understanding of accounting principles, financial analysis, and corporate social responsibility.

I would like to express my heartfelt gratitude to my Accountancy teacher for guiding and supporting me throughout this project. Their valuable feedback and encouragement played a crucial role in shaping the final outcome.

I am proud to present this certificate as a testament to my dedication, hard work, and passion for the subject. I hope that my project on Nestle’s financial statements inspires others to explore the fascinating world of accountancy and the critical role it plays in understanding businesses.

Signature: __________
Date: __________

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