Professional Documents
Culture Documents
OF UNILEVER
PAKISTAN
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HISTORY
HELPING PEOPLE GET MORE OUT OF LIFE In the
1890s, William Hesketh Lever, founder of Lever Bros, wrote down his
ideas for Sunlight Soap his revolutionary
new product that helped popularize cleanliness and hygiene in
Victorian England. It was 'to make cleanliness commonplace; to lessen work for women;
to foster health and contribute to
invented, but these.E ven if their language - and the notion
of only women doing housework has become outdated.
In a history that now crosses three centuries, Unilever's success has been influenced
by the major events of the day economic boom, depression, world wars, changing consumer
lifestyles and advances in technology. And throughout They've created products that help
people get more out of life cutting the time spent on household chores, improving nutrition,
enabling people to enjoy food and take care of their homes, their clothes and themselves.
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1970s: Hard economic conditions and high inflation make the '70s a tough time for
everyone, but things are particularly difficult in the Fast Moving Consumer Goods
(FMCG) sector as the big retailers start to flex their muscles.
1980s: Unilever is now one of the world's biggest companies, but takes the decision to
focus its portfolio, and rationalize its businesses to focus on core products and brands.
1990s: The business expands into Central and Eastern Europe and further sharpens its
focus on few product categories, leading to the sale or withdrawal of two-thirds of its
brands.
ssttrategic plan, and in 2004 further sharpens its focus on the needs of 21st
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Liquidity Ratios:
Liquidity ratios tell us about the companys short term debt paying ability, or
the companys short term financial situation or the companys short term
solvency.
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Efficiency/Turnover Ratios:
Efficiency Ratios are used in order to determine that how quickly and efficiently
certain assets are converted in to cash.
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Leverage Ratios:
The Leverage Ratios measure the long term solvency and ability of the company
to pay to its long term creditors.
Profitability Ratios:
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Directors Review
The directors present the 2014 Annual Report together with audited financial
statements of the Company for the year ended December 31, 2014.Sales grew by
8.5% in a challenging economic and operational environment, with significant
commodity deflation headwind. Growth was broad-based and volume led. In the case
of Tea, commodity deflation and the resulting price reductions offset the
strong volume growth. The improvement in gross margin through higher volume, cost
efficiencies and better mix, was offset by restructuring charges. The business
continued to invest strategically behind key brands and increased spend by177 bps to
12.1% of Sales. Profit after tax grew by 3%.
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Cont..
RATIO ANALYSIS
COMPARISON OF CURRENT YEAR WITH PREVIOUS
YEAR: LIQUIDITY RATIOS
Current Ratio:
Current Ratio = Current Assets/Current Liabilities
Current Ratio for 2014 = 17,021,156/ 23,874,046 = 0.71 times or. 0.71:1.00
Current Ratio for 2013 = 12,086,992/ 18,033,609 = 0.67 times or. 0.67:1.00
Interpretation:
In 2013, to pay off Current liabilities of Rs. 1 the company has Current
Assets of Rs. 0.71, which means that the company is not capable of paying its
current liabilities, when they fall due.
In 2014, to pay off Current liabilities of Rs. 1 the company has Current
Assets of Rs. 0.67 which means that the company is not capable of paying its
current liabilities when they fall due.
The companys current ratio was down in 2013 and it is still not
capable to pay off its current liabilities when they fall due. Although the
companys current ratio got better in 2014 but in both years the company is
not in a good position to pay off its current liabilities.
Current Ratio
2014
2013
2012
2011
2010
Times
0.71
0.67
0.82
0.79
0.83
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Acid Test Ratio for 2014 = 12,008,898/23,874,046 = 0.50 times or. 0.50:1.00
Acid Test Ratio for 2013 = 5,410,082/18,033,609 = 0.30 times or. 0.30:1.00
Interpretation:
In 2014, to pay off Current Liabilities of Rs. 1, the company has Quick
Assets of Rs. 0.50, which means that the company is not capable of paying its
current liabilities with its Quick Assets, when they fall due.
In 2013, to pay off Current Liabilities of Rs. 1, the company has Quick
Assets of Rs. 0.30 which means that the company is not capable of paying its
current liabilities with its Quick Assets when they fall due.
is still not capable to pay off its current liabilities when they fall due. In
both years the company is not in a good position to pay off its current
liabilities.
Quick Ratio
2014
2013
2012
2011
2010
Times
0.50
0.30
0.30
0.30
0.40
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PROFITABILITY RATIOS:
Gross Profit Margin:
Gross Profit Margin = 100 x Gross Profit/Net Sales
Interpretation:
In 2014, if the company makes net sales of Rs. 100, then the company
In 2013, if the company makes net sales of Rs. 100, then the company
G.P Margin
2014
2013
2012
2011
2010
40%
40%
36%
35%
33%
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Interpretation:
In 2014, if the company makes net sales of Rs. 100, then the company
In 2013, if the company makes net sales of Rs. 100, then the company
N.P Margin
2014
2013
2012
2011
2010
10%
10%
9%
8%
7%
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Interpretation:
In 2014, if the company makes net sales of Rs. 100, then the
EBIT
2014
2013
2012
2011
2010
15%
16%
15%
13%
12%
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Return on Equity:
Return on Equity = 100 x Net income after tax/Common Shareholders Equity
Interpretation:
of
Rs.100 than the companys earnings after income tax will be of Rs.196.
of
Rs.100 than the companys earnings after income tax will be of Rs.200.
The company was in a better in 2013 because it was getting some good
Return On Equity
2014
2013
2012
2011
2010
196%
200%
104%
101%
92%
Equity Ratio:
Equity Ratio = Shareholders Equity/Total Assets
Interpretation:
In 2014, the Equity Ratio of 0.12 times indicates that the Shareholders
In 2013, the Equity Ratio of 0.14 times indicates that the creditors have
The company was better in 2013 as the Shareholders had less holding
EFFICIENCY RATIOS
Inventory Turnover (Times and Days):
=8.5 times
Interpretation:
Interpretation:
The company is slightly better in 2014 as it takes fewer days for the
inventory to turnover or fewer days are required to sell the inventory in 2014.
Inventory Turnover
2014
2013
2012
2011
2010
Days
46
43
59
49
46
Interpretation:
in a year.
debtors in a year.
Interpretation:
customers or debtors.
customers or debtors.
2014
2013
2012
2011
2010
Days
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Interpretation:
or
debtors in a year.
or
debtors in a year.
Interpretation:
In 2014, after
the
the
customers or debtors.
In 2013, after
customers or debtors.
2014
2013
2012
2011
2010
Days
212
171
108
98
75
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Cash Cycle:
Cash Cycle = Inventory Turnover (days) + Accounts Receivable Turnover
(days)- Account payable (days)
Interpretation:
The company is slightly better in 2014 as it takes fewer days for the
CCC
2014
2013
2012
2011
2010
Days
(161)
(123)
43
44
34
Interpretation:
In 2012, the total assets turnover was 276 times in one year
The company was better in 2013 as the total assets turned over more
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2014
2013
2012
2011
2010
Times
236
278
324
327
331
LEVERAGE RATIOS
Debt Ratio = Total Liabilities/Total Assets
Interpretation:
In 2014, the Debt Ratio of 0.88 times indicates that the creditors have a
In 2013, the Debt Ratio of 0.86 times indicates that the creditors have a
The company is slightly better in 2014 as the Debtors have less holding
CONCLUSION
According to the above analysis of Unilever Pakistan Limited, the company is in a
good position as far as its profitability is concerned, over the past years the company
has seen a same in its Gross Profit, Net Profit, with the companys Margins in the
current year being the highest.
However Unilever Pakistan Limited is in a good position. The companys efficiency
has seen some improvement in the turnover for the inventory and decrease in the
account receivable turnover and it only takes a few days collect the money from
customers, however given the companys current liquidity position the company is
not
still converting the assets into cash quick enough to pay off its current liabilities. This
is good for a company that they are working on creditors money. They return their
money in 213 days in 2014.And unilever pakistans EPS is Rs.474 in 2014.
Conclusively, Unilever Pakistan Limited is operating effectively and efficiently on
overall basis and generating enough profit to keep its operations running in the most
effective way possible and keeping its standard of being one of the largest and most
stable multinational organizations.
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