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P2- CORPORATE FINANCIAL REPORTING


Ratios Analysis of Neslte Pakistan
Submitted To:
Sir Imran Khalid
Submitted By:
Mohtashim Ali Khan
Roll No. 15011
Mohsin Rafique
Roll No. 15051
Semester: 3rd
Session: 2015-17

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Acknowledgement

In the Name of Allah the most Merciful and the


most Beneficent
We are very thankful to Almighty ALLAH who gave us the
opportunity, courage and insight to explore more knowledge to
complete this whole and for his blessings that have brightened in all
parts of our lives. In scripting this project we are guided by our
experience, knowledge and interest in the subject Analysis of
Financial Reporting

Contents
Acknowledgement................................................................................................2
INTRODUCTION................................................................................................3
HISTORY.............................................................................................................4
Vision:...................................................................................................................6
Mission:................................................................................................................6
Company Profit &Loss Account and Balance Sheet............................................6
Profit & Loss Account..........................................................................................6
Balance Sheet........................................................................................................7

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Financial Ratio Analysis.......................................................................................8
Liquidity Ratios:...................................................................................................8
Solvency Ratio:.....................................................................................................8
Profitability Ratios:...............................................................................................9

INTRODUCTION
Nestle is the world's leading nutrition, health and wellness
company today and was founded in 1866 by Henri Nestle.
Nestle have more than 280,000 employees worldwide
but however have more than 2500 employees in Nestle
Pakistan and has factories or operations in almost every country
in the world. More Nestle 5th largest company in the world.
Being the world's leading bottled water company is based on a firm economic
model strong brands, global presence, innovation capacity, environmental
stewardship and passionate people.
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 our core
values: care, family values, nutrition, healthy growth, safety and comfort. It is a
guarantee of quality and a commitment to our responsibilities as a food
company
and
experts
in
nutrition.
Over the years we have reaffirmed our commitment to wellness, helping our
consumers to live longer, healthier, and more productive lives, no matter their
age, gender or socioeconomic status.

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Executive Name

Designation

SYED YAWAR ALI

Chairman

ROLAND DECORVET

CEO

JAN H. SASSEN

Director

ROGER STETTLER

Director

FRITZ VAN DIJK

Director

A. CANTACUZENE

Director

RAYMOND FRANKE

Director

HISTORY
The history begins back in 1866, when the first European condensed milk
factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk
Company.H e n r i N e s t l e , a p h a r ma c i s t , d e v e l o p e d a f o o d f o r b a b i e s
w h o w e r e unable to breastfeed. His first success was a premature infant who
could not tolerate his mother's milk or any of the usual substitutes
which eventually became the first Nestles customer.
After Nestle's new formula saved the child's life and soon,farmine
was being sold in 1874,Jules Monnerat purchased Nestle and
collectively tye launched the condensed milk. In 1905 Nestle merged with
A n g l o - S w i s s w h i c h w a s a n c o n d e n s e d m i l k c o mp a n y.
S o o n a f t e r N e s t l e established its roots all over Europe to cater the
need of the customers of Europe,as Nestle fame was on the top so
Nestle thought to start the production function all over the world to increase
the customer demand and meet or capture more markets. Decision to go
multinational was a fruitful idea, so as now nestle has operations in
America, India, England, Brazil, Australia, Pakistan, Hungary, France, Belgium,
Italy, Spain and various other countries around the globe. Nestle are now in all
seven continents & having more than 522 factories in83 countries.
1867 In Vevey, Switzerland, the founder Henri Nestl, a German pharmacist,
launched his Farine lactee a combination of cows milk, wheat flour and sugar,

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saving the life of a neighbors child. Nutrition has been the cornerstone of our

company ever since.


Henri Nestl, himself an immigrant from Germany, was instrumental in turning
his Company towards international expansion from the very start. We owe more
than our name, our logo and our first infant-food product to our founder. Henri
Nestl embodied many of the key attitudes and values that form part and parcel
of our corporate culture: pragmatism, flexibility, the willingness to learn, an
open mind and respect for other people and cultures.Peter Brabeck-Letmathe,
Nestle chairman.
Vision:
Nestls vision is to be the globally recognized leading Nutrition, Health and
Wellness (NHW) Company. Nestl Pakistan subscribes fully to this vision and
the values that come with it. In particular, we envision: Leading a dynamic,
passionate and professional workforce which is proud of our heritage and
positive about the future Meeting the nutritional 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 of the highest quality
Delivering shareholder value through profitable long-term growth, while
continuing to play a significant and responsible role in the social, economic, and
environmental sectors of Pakistan
Mission:
To positively enhance the quality of life of people of Pakistan by all that we do
through our people, our brands, products and our Creating Shared Value (CSV)
initiatives.

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Company Profit &Loss Account and Balance Sheet


Profit & Loss Account
000

Year

2014

2013

2012

2011

2010

Sales

96,457,743

86,226,869

79,087,696

64,824,364

51,487,302

Cost Of Sales

69,133,753

62,066,072

57,564,265

48,099,046

37,608,733

Gross Profit

27,323,990

24,160,797

21,523,431

16,725,318

13,878,569

Operating Profit

14,113,463

11,471,270

10,966,120

8,457,907

6,857,854

Other Income

523,892

194,565

160,142

159,545

170,491

Finance Cost

2,155,637

2,113,096

1,827,969

1,050,355

513,081

Profit Before Tax

110,009,168

8,112,962

7,977,974

6,502,864

5,696,180

Taxation

3,079,897

2,246,199

2,113,463

1,834,507

1,583,331

Profit After Tax

7,929,271

5,866,763

5,864,511

4,668,357

4,112,849

Balance Sheet
000

Year

2014

2013

2012

2011

2010

Cash

226,143

720,065

760,831

702,025

505,516

Inventory

9,763,987

7,925,132

8,025,653

7,064,170

4,602,019

Current Asset

18,405,780

17,936,483

16,905,484

13,395,017

8,352,923

Investments

N/A

N/A

21,970,957

N/A

N/A

Fixed Asset

33,324,915

33,828,996

33,967,233

21,601,089

14,447,083

Total Assets

51,730,695

51,765,479

50,872,717

34,996,106

22,800,006

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Current Liability

27,777,240

18,000,989

20,003,413

16,788,455

9,806,572

Fixed Liability

11,325,830

22,429,375

19,309,040

10,778,988

7,563,787

Total Liabilities

39,103,070

40,430,364

39,312,453

27,567,443

17,370,359

Paid Up Capital

453,496

453,496

453,496

453,496

453,496

Total Equity

12,627,625

11,859,157

11,560,264

7,612,416

5,581,873

Financial Ratio Analysis


Liquidity Ratios:
Quick Ratio = Quick Assets / C. Liabilities
Solved: (2014)= 8641813/ 27777240 =0.31
Solved: (2013)= 10011351/ 18000989 =0.55
Solved: (2012) = 8879831\20003413 =0.44
Solved: (2011)= 6330847/ 16788455 =0.38
Solved: (2010)= 3750904/ 9806572 =0.38

Current Ratio = Current Assets/ Current Liabilities.


Solved: (2014)= 18405780/27777240 =0.66
Solved: (2013)= 17936483/18000989 =1.00
Solved: (2012)= 16905484/20003413 =0.85
Solved: (2011)= 13395017/16788455 =0.80
Solved: (2010)= 8352923/9806572 =0.85
Year
Quick
Ratio
Current

2014
0.31

2013
0.56

2012
0.44

2011
0.38

2010
0.38

0.66

1.00

0.85

0.80

0.85

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Ratio
Solvency Ratio:
Total Debt to Equity = Total debt\ Total share holders Equity
Solved: (2014)= 39103070/12627625 = 309.66
Solved: (2013)= 40430364/11859157 = 340.92
Solved: (2012)= 39312453/11560264 = 340.07
Solved: (2011)= 27567443/7612416 = 362.14
Solved: (2010)= 17370359/5581873 = 311.19

Total Debt to Assets = Total Debt \ Total Assets


Solved: (2014)= 39103070/51730695 = 75.59
Solved: (2013)= 40430364/51765479 = 78.10
Solved: (2012)= 39312453/50872717 = 77.28
Solved: (2011)= 27567443/34996106 = 78.77
Solved: (2010)= 17370359/22800006 = 76.19

Year
2014
Total Debt 309.66
to Equity
Ratio
Total Debt 75.59
to
Asset
Ratio

2013
340.92

2012
340.07

2011
362.14

2010
311.19

78.10

77.28

78.77

76.19

Profitability Ratios:
Net Profit margin = Net income\ Revenue
Solved: (2014)= 7929271/96457743 =8.22

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Solved: (2013)= 5866763/86226869 =6.80
Solved: (2012)= 5864511/79087696 =7.42
Solved: (2011)= 4668357/64824364 =7.20
Solved: (2010)= 4112849/51487302 =7.99
Gross Profit margin = Gross Profit\ Revenue
Solved: (2014)= 27323990/96457743 =28.33
Solved: (2013)= 24160797/86226869 =28.02
Solved: (2012)= 21523431/79087696 =27.21
Solved: (2011)= 16725318/64824364 =25.80
Solved: (2010)= 13878569/51487302 =26.96
Operating Profit Margin = EBIT\ Revenue
Solved: (2014)= 14113463/96457743 =14.63
Solved: (2013)= 11471270/86226869 =13.30
Solved: (2012)= 10966120/79087696 =13.87
Solved: (2011)= 8457907/64824364 =13.05
Solved: (2010)= 6857854/51487302 =13.32
ROE = Net Income\ Share Holders Equity
Solved: (2014)= 7,929,271/12627625 =62.79
Solved: (2013)= 5,866,763/11859157 =49.47
Solved: (2012)= 5,864,511/11560264 =50.73
Solved: (2011)= 4,668,357/7612416 =61.33
Solved: (2010)= 4,112,849/5581873 =73.68'
Year
2014
Net Profit 8.22
Margin

2013
6.80

2012
7.42

2011
7.20

2010
7.99

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Gross
Profit
Margin
Operating
Profit
Margin
ROE

28.33

28.02

27.21

25.80

26.96

14.63

13.30

13..87

13.05

13.32

62.79

49.47

50.73

61.33

73.68

Assets Turnover Ratio = Revenue\ NCA X 100


Solved: (2014)= 96,457,743/33,324,915 X 100 =289%
Solved: (2013)= 86,226,869/33,828,996 X 100 =255%
Solved: (2012)= 79,087,696/33,967,233 X 100 =233%
Solved: (2011)= 64,824,364/21,601,089 X 100 =300%
Solved: (2010)=51,487,302/14,447083 X 100 =356%