Evaluating Working Capital Management

Unilever Indofood In 2018, Indofood was better able to pay off its short-term obligations
Operating working capital
2018 2017 2018 2017 immediately than Unilever, although it was equally negative (dangerous).
However, the ability of Indofood in 2017 is better than in 2018
(Current assets - cash and
7.973.362 7.536.541 24.463.365 19.258.133
marketable securities)

- (Current liabilities - Short-term and

10.836.879 12.385.775 25.824.513 18.598.233
current portion of long-term debt)
Unilever Indofood
Operating working capital (2.863.517) (4.849.234) (1.361.148) 659.900 Working Capital Management
2018 2017 2018 2017
Persentase 73,58% 60,85% 94,73% 103,55%
Operating working capital to sales ratio -6,85% -11,77% -1,85% 0,94%

Operating working capital turnover -14,60 -8,50 -53,92 106,36

Indofood is more efficient in managing its working capital
needs, even with negative working capital. This can be Accounts receivable turnover 8,39 8,74 11,17 10,24
seen from the more productive AR turnover dan AP
turnover and the days’ receivables and days’ payables that Inventory turnover 7,79 8,35 4,57 5,15
are more efficient in generating working capital.
Accounts payable turnover 4,53 4,41 13,20 12,37
On the other hand, Unilver is more productive in using
inventory and more efficient in using its inventory to Days’ receivables 43,51 41,77 32,69 35,64
produce working capital.
Days’ inventory 46,85 43,72 79,92 70,90

Days’ payables 80,59 82,68 27,65 29,51

 Evaluating Long-Term Asset Management
Unilever Indofood
Net long-term assets Vertical analysis
2018 2017 2018 2017

Total long-term assets 11.197.941 10.964.778 63.265.178 55.452.746 Indofood has a net long term asset that is greater than Unilever
because it is related to its business entity.
-Non-interest-bearing long-term However, Unilever shows better net long-term assets and better
398.047 344.965 991.843 1.127.069
liabilities utilization of PP&E compared to Indofood as seen in the net long-
term assets turnover and higher PP&E turnover.
Net long-term assets 10.799.894 10.619.813 62.273.335 54.325.677

Horizontal analysis

In 2017, the net long-term asset turnover and PP&E turnover in the
Unilever Indofood two companies are higher than in 2018.
Long-Term Asset Management
2018 2017 2018 2017

Net long-term asset turnover 387% 388% 118% 129%

PP&E turnover 393% 395% 173% 178%