Financial Analysis of the Company

Presented to: Miss Shehla and

Introduction to Business Finance Class

Presented By: Muhammad Zeeshan Azam

Fazeel AhmadAzeemullah Wyne

Presentation Plan

Introduction to UnileverFinancial Highlights for year 2012-2013Financial AnalysisRatios AnalysisFinancial Reports AnalysisFuture OutlookConclusion

Introduction to Unilever

• The Unilever Pakistan Limited (UPL), formerly Lever Brothers Pakistan Limited was established in Pakistan in 1948

• Unilever Pakistan is the largest fast-moving consumer goods (FMCG) company in Pakistan, as well as one of the largest multinationals operating in the country.

• The Unilever's head office was shifted to Karachi from the Rahim Yar Khan site in the mid-1960s

• Their products lie under the worldwide known brand names Wheel, Surf Excel Close Up, Sunsilk, Tapal. Lipton, Pepsodent, All Clear Vim, Rexona, Axe etc.

Director’s report

• The directors present the 2013 Annual report together audited financial statements for the company year ended December 31, 2013.

• Profit after taxation improved by 11.2%. • Sales growth low at 1.3% mainly due to the volume

decline in Tea. • The reinstatement of GST on tea at full rate forced a

market dry out to reflect higher taxes in consumer price. • The election year was generally marked adverse security

environment, frequent market closure, lower GDP growth and continuing energy shortage.

Financial Highlights for Year 2012-2013

  2013 (Rupees in Millions)

2012 (Rupees in Millions)

Sales 60535 59741

Gross Profit 24422 21673

Profit from Operations

9223 8495

Profit Before Tax 8905 8065

Profit after tax 6117 5502

     

Financial Reports Analysis

Balance Sheet Analysis

• Property plant and equipment• Noncurrent assets • Current assets• Equity remains constant• Retained earnings not increasing• Noncurrent liabilities fluctuating• Current Liabilities

Income Statement Analysis

• Net sales has drastically increased from 31000 (in 2008) to more than 60000 (in 2013)

• There is no downfall up till now in the overall sales.• GP, Profit before taxes and after taxes, EBIT also

growing each year• Capital expenditure in between 2009 to 2010 was low as

there was a recessionary period

Cash flows Analysis

• It is related to cash transactions.• There is a huge amount of increased in

operating activities from year 2008 to 2013.• Their investing activities has normally

increased for the past 6 years. • Financing activities have been increased much

from year 2008 to 2013.

Ratios Analysis

Liquidity Ratios2013 2012 2011 2010 2009 2008

Current Ratio 0.67 0.82 0.79 0.83 0.78 0.69

Quick ratio 0.30 0.30 0.30 0.40 0.27 0.19

Cash to Current Liabilities

0.18 0.11 0.09 0.14 0.13 0.00

Capital Efficiency  2013 2012 2011 2010 2009 2008Inventory Turnover (days)

43 59 49 46 58 64

Operating Cycle (days)

120 43 44 34 13 16

Total Asset turnover(percent)

278 324 327 331 334 272

EPS (Rs) 460 413 308 246 230 149

Profitability Ratios

2013 2012 2011 2010 2009 2008

Gross profit (percent)

40 36 35 33 35 35

EBIT margin (Percent)

16 15 13 12 14 11

Net profit on sales (percent)

10 9 8 7 8 6

Return on Equity (percent)

200 104 101 92 93 90

2008 2009 2010 2011 2012 201300.10.20.30.40.50.60.70.80.9

Liquidity Measurements

Quick Ratio Current Ratio Cash to Liabilities

Future outlook

• The company knows very well to manage its assets whether cash or other non-current assets.

• Our analysis which we have made so far indicates that company will be able to stand even higher position in the competitive environment where other companies are also present.

• Their sales, investments, cash-flows and their liabilities are also going to have impact in their overall performance. External environment also affects this company as this company also works in FMCG (fast moving consumer goods) products

Conclusion

• Unilever is especially strong in emerging markets and innovation.

• After analyzing the strengths and weaknesses of each business, we feel confident writing that company would be excellent additions to most portfolios.

• Even though, the company is not a market leader but it can be a good market leader by doing more and more innovation in its products and obviously financial statements does matter in the company’s performance.

Thank You