Nestle Analysis - 4440 Words

Table of Contents 1. Introduction 5 1.1 Nestle 5 1.2 Dutch Lady 5 2. Ratio Analysis 6 2.1 Profitability Ratio 6 2.1.1 Gross Profit Margin 6 2.1.2 Net Profit Margin 7 2.1.3 Expenses Margin 7 2.2 Liquidity Ratio 7 2.2.1 Current Ratio 7 2.2.2 Quick Ratio 7 2.3 Efficiency Ratio 8 2.3.1 Debtor Turnover Period 8 2.3.2 Creditor Turnover Period 8 2.3.3 Stock Turnover Period 8 2.4 Capital Structure 9 2.4.1 Gearing 9 2.4.2 Interest Cover 9 2.5 Investors Ratio 9 2.5.1 Return on Capital Employed 10 2.5.2 Earnings per Share 10 2.5.3 Price Earnings Ratio 10 2.5.4 Dividend Yield 10 2.5.5 Earning Yield 11 2.6 Ratio Analysis on Nestle 11 2.6.1 Profitability Ratio of Nestle 11 2.6.2 Efficiency Ratio†¦show more content†¦Using the current year numbers from the financial report, ratio are calculated and then compared with other companies, the industry, previous years, or even the economy to evaluate the performance of the company. Ratio analysis is the most reliable technique of analyzing a com pany today. There are five types of ratio that can be calculated, profitability ratio, liquidity ratio, efficiency ratio, capital structure and investors’ ratio. (Johri, 2010) 2.1 Profitability Ratio Profitability ratio is a financial metrics that are used to evaluate a business’ capabilities to generate revenue to be compare to the business’ expenses and costs incurred over a time period. There are three types of ratio, gross profit margin, net profit margin, and the expenses margin. (Vailiev, 2010) 2.1.1 Gross Profit Margin Gross profit margin measures the percentage of gross profit that is generated from the sales of the company. This shows the proportion of money remaining from the sales after accounting for the cost of sales. (Value Click Inc, 2012) Gross Profit Margin=Gross profitsales Ãâ€"100% 2.1.2 Net Profit Margin Net profit margin measures the percentage of net profit generated from the sales of the company. This shows the proportion of money remaining from the sales after accounting for the cost of sales and expenses of the company.Show MoreRelatedNestle: Strategic Management and Swot Analysis1862 Words   |  8 Pagesanalyze the company of Nestlà © to into the Singapore market. It is going to introduce company and country background, after that it will analyze the company of Nestlà © and Singapore market by using SWOT analysis, PEST analysis and Porter’s 5 Forces. Finally, it will have recommendation and conclusion to follow it. 2. Company background Henri Nestlà © founded Nestlà © in 1866 in Switzerland. It is the largest food company in the world. 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