NESTLE LIMITED

Nestl S.A is a Swiss multinational food and beverage company headquartered in

Vevey, Switzerland. It is the largest food company in the world measured by revenues,
and ranked #72 on the Fortune Global 500 in 2014.
Nestls products include baby food, bottled water, breakfast cereals, coffee and tea,
confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twentynine of Nestls brands have annual sales of over CHF1 billion (about US$1.1
billion), "Nestl: Tailoring products to local niches". CNN, 2 July 2010 including
Nespresso, Nescaf, Kit Kat, Smarties, Nesquik, Stouffers, Vittel, and Maggi. Nestl
has 447 factories, operates in 194 countries, and employs around 339,000 people. It is
one of the main shareholders of LOreal, the worlds largest cosmetics company.
Nestl was formed in 1905 by the merger of the Anglo-Swiss Milk Company,
established in 1866 by brothers George Page and Charles Page, and Farine Lacte
Henri Nestl, founded in 1866 by Henri Nestl (born Heinrich Nestle). The company
grew significantly during the First World War and again following the Second World
War, expanding its offerings beyond its early condensed milk and infant formula
products. The company has made a number of corporate acquisitions, including
Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh
in 1988, and Gerber in 2007.
Nestl has a primary listing on the SIX Swiss Exchange and is a constituent of the
Swiss Market Index. It has a secondary listing on Euronext. In 2011, Nestl was listed
No. 1 in the Fortune Global 500 as the worlds most profitable corporation. With a
market capitalisation of US$239.6 billion, Nestl ranked No. 11 in the FT Global 500
2014.

Balance sheet
As at December 31st2011

Assets:

2011(Rs)

Tangible fixed assets

Property, plant and equipment
Capital work in progress
Total tangible assets

16,230,528
5,370,561
21,601,089

Intangible assets
Long term loan and advances
Long term security deposits
Total intangible assets

11,954
161,982
9,817
183,753

Current assets
Stores and spares
Stock in trade
Trade debts
Current portion of long term loans and advances
Advances, deposits, prepayments and other receivables
Cash and bank balances
Total current assets
Total assets

1,278,416
7,064,170
276,858
30,914
4,042,634
702,025
13,395,017
35,179,859

Equity and Liabilities:

2011(RS)

Owners Equity
Share capital and reserves
Authorized capital 75,000,000 Shares of Rs 10 Each
Issued, subscribed and paid up capital
Share premium
General reserve
Accumulated profit
Total Owners Equity

750,000
453,496
249,527
280,000
6,629,393
7,612,416

Non-current liabilities
Long term finances
Deferred taxation
Retirement benefits
Liabilities against assets Subject to finance lease
Total non-current liabilities

7,848,050
2,476,871
440,377
13,690
10,778,988

Current liabilities
Current portion of non-current liabilities
Short term borrowings from associated company unsecure
Short term borrowings secured
Short term running finance under markup arrangements-secured
Customer security deposit Interest free
Trade and other payables
Interest and markup accrued
Total current liabilities
Total Equity and Liabilities

41,587
000000
4,950,000
4,175,236
149,791
7,343,507
128,334
16,788,455
35,179,859

Income statement
For the year ended December 31st 2011

2011(Rs)
Net sales
Cost of goods sold
Gross profit
Distribution and selling expenses
Administration expenses
Operating profit
Finance cost
Other operating expenses
Other operating income
Profit before taxation
Taxation
Profit after taxation
Earnings per share

64,824,364
(48,099,046)
16,725,318
(6,862,113)
(1,405,298)
8,457,907
(1,050,355)
(1,064,233)
(2,114,588)
159,545
6,502,864
(1,834,507)
4,668,357
102.94

RATIO ANALYSIS

Current Ratio
Current Ratio = Current Assets / Current Liabilities
= 13,395,017 / 16,788,455
= 0.80

Quick Ratio
Quick Ratio = (Current Assets Inventories) / Current Liabilities
= (13,395,017 7,046,126.522) / 16,788,455
= 0.38
Asset Turnover Ratio
Asset Turnover Ratio = Net Sales / Total Assets
= 64,824,364 / 35,179,859
= 1.84

Inventory Turnover Ratio

Inventory Turnover Ratio = Cost of Goods Sold / inventory
= 48,099,046 / 7,046,126.522
=6.83
Debt to Equity Ratio
Debt to Equity Ratio = Total Liabilities / Total Stockholders' Equity
= 2,756,443 / 7,612,416
= 3.62
Price Earnings (PE) Ratio
Price Earnings (PE) Ratio = Market Priceper Share / Earnings per Share
= 4,844 / 102.94
= 47.06
Net Working Capital Ratio
Net Working Capital = (Current Assets Current Liabilities) / Total Assets
= (13,395,017 16,788,455) / 35,179,859
= 0.10

INTERPRETATION

Current Ratio

Current ratio tells us the short term solvency of the firm and tells the ability of the
firm to repay its short term obligations. In nestle the firm has 0.80 ability to repay
against the $ 1 loan.

Quick Ratio
Quick ratio measures the firms ability to pay off short term obligations without
relying on the sale of inventory. Nestle has the quick ratio of 0.38 chances of paying
off its short term obligations without relying on the level or sales of inventory.

Asset Turnover Ratio

This ratio measures the turnover of the entire firms asset. It is calculated by dividing
the sales by total assets of the firm. If firm shouldnt increase its sales so there is a
possibility that a firm will sale its some assets. There is 1.84 chances of asset turnover
in nestle against every $ 1.

Inventory Turnover Ratio

Inventory turnover is calculated by dividing the COGS by inventory. The inventory
turnover of nestle is 6.83 times.