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ANALYSIS
REPORT
SUBMITTED TO: SIR
ASAD ULLAH
GETTING TO KNOW NESTLE
NESTLE PAKISTAN LTD IS A SUBSIDIARY OF NESTLE S.A.
- A COMPANY OF SWISS ORIGIN HEADQUARTERED IN 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, IN SHEIKHUPURA, KABIRWALA,
ISLAMABAD AND KARACHI
ROA &ROE
Chart Title
3.5
3
2.5
2
1.5
1
0.5
0
2018 Return
2017on Assest Return On Equity
2016 2015
10
0
2018 2017 2016 2015
Total Assest TurnOver Account Receiveable Turn Over
Declining liquidity ratios:this indicates that Nestle may have problems paying its bills on time and the company
will be vulnerable to its short-term creditor demands.
LEVERAGE RATIO
Debt Ratio
1.92 2.14 2.14 2.03
Interest Ratio
(5.82) (5.78) (5.45) (5.78)
Nestle Debt Ratio shows a downward trend over the periods of 4 years, which
is a satisfying situation,and it shows the percentage of assets which are
financed by the debts are decreasing.
TREND ANALYSIS
Chart Title
150
100
50
0
2015 2016 2017 2018
Sales-net Net Income
• INCOME STATEMENT
• OVER ALL, THE COMPANY’S FINANCIAL STATUS HAS IMPROVED, WHILE MOST OF THE EXPENSES
HAVE DECREASED, WHICH INDICATES A FAVOURABLE PROSPECTIVE FROM AN INVESTMENT
PRESPECTIVE.
• BALANCE SHEET
• LONG TERM LIABILITIES, LONG TERM FINANCING HAS GONE DOWN WHICH IS A GOOD SIGN, AS
IT INDICATES THAT COMPANY TOOLS LESS LOANS IN 2018, IMPLYING LESS DEGREE OF RISK IN
FIRMS CAPITAL STRUCTURE IN TERMS OF LONG TERM DEBT.
• TOTAL LIABILITIES ARE ALMOST 93% OF ASSTES, OF WHICH MORE THSN 13% IS LONG TERM DEBT.
• CURRENT LIABILITIES ARE 74% WHICH IS LARGER THAN ITS CURRENT ASSETS, NOT A GOOD SIGN
FOR NESTLES LIQUIDITY.
CONCLUSION
• NESTLE HAS BEEN EARNING WELL FOR ITSELF AND OFFERING
• AMPLE RETURNS TO THE SOCIETY FOR OVER TWO DECADES NOW.
• STILL GROWING IT’S BUSINESS AND PRODUCT PORTFOLIO AS NO
• COMPETITOR HAS GIVEN MATCHING COMPETITION YET.
• POSITIONED AS THE PROVIDER OF HEALTHIEST AND NUTRIEST
• FOOD IN THE MARKET.
• HAS MAJOR PRODUCTS IN GOOD MARKET STRENGTH.
• NESTLE SHOULD FOCUS ON DEVELOPING MORE NEW PRODUCTS AND EXPLORING
MORE NEW MARKETS TO RETAIN IT’S LEADING
• POSITION IN THE FOOD INDUSTRY OF PAKISTAN.
THE END