analysis of unilever financial reports (1)
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Analysis of Unilever’s financial Statements
By: Thao HoClass: Myriam English practice
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Content
1. Types of financial analysis 2. Key Financial Statements3. Analysis of key financial Statements
Horizontal analysis of balance sheet Trend analysis of income statement
4. Analysis of Financial Ratios Liquidity ratios Activity Ratios Debt ratios Profitability ratios
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Types of financial analysis
3
Developing trends can be seen using multi-year comparisons
Trend analysis - performance evaluation over time
Firms’ financial ratios compared at the same point in time
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Key Financial Statements
4
Balancesheet
Income statement
Financial Managers and analystsuse financial statements to conduct:
- Performance (Ratio) Analysis
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Horizontal analysis of balance sheet
5
€ million € million € million € million € million 𝐶𝐴𝐺𝑅 2012 2011 2010 2009 2008
non-current assets 34,019 33,221 28,683 26,205 24,967 6.38%
Current assets 12,147 14,291 12,484 10,811 11,175 1.68%
Total assets 46,166 47,512 41,167 37,016 36,142 5.02%
Current liabilities 15,815 17,929 13,606 11,599 13,800 2.76%
Non-current liabilities 14,635 14,662 12,483 12,881 11,970 4.10%
Total liabilities 30,450 32,591 26,089 24,480 25,770 3.39%
Shareholders’ equity 15,159 14,293 14,485 12,065 9,948 8.79%
Non-controlling interest 557 628 593 471 424 5.61%
Total equity 15,716 14,921 15,078 12,536 10,372 8.67%
Total liabilities and equity 46,166 47,512 41,167 37,016 36,142 5.02%
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Developing trend in 2008-2012
6
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Trend analysis of income statement
7
2008 2009 2010 2011 2012 𝐶𝐴𝐺𝑅Turnover (€ million) 40,523 39,823 44,262 46,467 51,324 4.84%
Trend percentage 100% 98.27% 109.23% 114.67% 126.65%
Operating profit (€ million) 7,167 5,020 6,339 6,433 6,989 -0.50%
Trend percentage 100% 70% 88% 90% 98%
Net profit (€ million) 5,285 3,659 4,598 4,623 4,948 -1.31%
Trend percentage 100% 69% 81% 86% 93%
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Performance evaluation in 2008-2012(Teacher’s comment: Use another type of
chart to describe easier
8
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Analysis of Financial Ratios
9
•Current ratio • Quick ratio• Fixed asset turnover• Total asset turnover• Average collection period• Debt-to-equity ratio• Debs ratio• Return on sales (Gross margin) • Return on total assets• Return on equity
Activity Ratios
Debt Ratios
Profitability Ratios
Liquidity Ratios
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Balance sheet (years order should be the sames other slides)
10
€ million € million2012/2011
2012 2011Goodwill and intangible assets 21,718 21,913 -0.89%Other non-current assets 12,301 11,308 8.78%Current assets 12,147 14,291 -15.00%Total assets 46,166 47,512 -2.83%Current liabilities 15,815 17,929 -11.79%Non-current liabilities 14,635 14,662 -0.18%Total liabilities 30,450 32,591 -6.57%Shareholders’ equity 15,159 14,293 6.06%Non-controlling interest 557 628 -11.31%Total equity 15,716 14,921 5.33%Total liabilities and equity 46,166 47,512 -2.83%
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Consolidated income statement
11
€ million
2012€ million
2011 % change
Turnover (€ million) 51,324 46,467 10.50%
Operating profit (€ million) 6,989 6,433 9%
Core operating profit* (€ million) 7,062 6,289 12%
Profit before tax (€ million) 6,683 6,245 7%
Net profit (€ million) 4,948 4,623 7%
Diluted earnings per share (€) 1.54 1.46 5%
Core earnings per share* (€) 1.57 1.41 11%
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Liquidity ratios
12
€ million2012
€ million2011
Current Ratio
=Current Assets
Current Liabilities12,14715,815
0.76814,29117,929
0.797
Quick Ratio
=Current Assets - Inventory
Current Liabilities12,147 - 4,436
15,8150.488
14291-4601
179290.540
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Activity Ratios
13
€ million € million
2012 2011
Average collection
period=
Accounts receivableAverage sales per day
4,43651,324/365
31.5474,513
46,467/36535.450
Fixed Asset turnover
=Sales
Net fixed assets
51,3249,445
5.43446,4678,774
5.296
Total asset turnover
=Sales
total assets51,32446,166
1.11246,46747,512
0.978
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Debt ratios
14
€ million € million
2012 2011
Debt Ratio =Total Liabilities
Total Assets30,45046,166
0.66032,59147,512
0.686
Debt- Equity ratio
=Total debt
Stockholder's equity
30,45015,159 2.009
32,59114,293
2.280
Prof. Dr. Rainer StachuletzCorporate FinanceBerlin School of Economics
Profitability Ratios
15
€ million € million2012 2011
Return on Sales (RoS)
=Net IncomeNet Sales
4,94851,324
0.0964,623
46,4670.099
Return on total assets (RoA)
=Net Income Total assets
4,94846,166
0.1074,623
47,5120.097
Return on common Equity
(RoE)=
Net Incomestockholder's equity
4,9484480
1.1044,6234252
1.087