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Submitted TO:
Sir Ali Abbas
Submitted By:
Rukhshan Tariq
(12014854-005)

Zubair Raza
(12014854-011)

Saad Mehmood
(12014854-032)

Luqman Akram
(12014854-043)

Naveed Alam
(12014854-000)

B.Com(Hons.) 7th A
University Of Gujrat

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Acknowledgement

In the Name of Allah the most Merciful and the

most Beneficent
We are very thankful to Almighty ALLAH who gave us
the opportunity, courage and insight to explore more
knowledge to complete this whole and for his blessings
that have brightened in all parts of our lives. In
scripting this project we are guided by our experience,
knowledge and interest in the subject Analysis of
Financial Reporting

Contents
Acknowledgement....................................................................................2
INTRODUCTION......................................................................................4
HISTORY.................................................................................................5
Vision:......................................................................................................6

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Mission:....................................................................................................6
Company Profit &Loss Account and Balance Sheet................................7
Profit & Loss Account...............................................................................7
Balance Sheet..........................................................................................7
Income Statement:...................................................................................8
Financial Ratio Analysis.........................................................................10
Activity Ratios:........................................................................................10
Liquidity Ratios:......................................................................................11
Solvency Ratio:......................................................................................11
Profitability Ratios:.................................................................................12
Common Size Analysis:.........................................................................14

INTRODUCTION
Nestle is the world's leading nutrition, health and wellness
company today and was founded in 1866 by Henri Nestle.
Nestle have more than 280,000 employees
worldwide but however have more than 2500
employees in Nestle Pakistan and has factories or
operations in almost every country in the world. More
Nestle 5th largest company in the world.

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Being the world's leading bottled water company is based on a firm
economic model strong brands, global presence, innovation capacity,
environmental stewardship and passionate people.
Henri Nestle chose his own coat of arms to represent the company's
philosophy: a bird's nest, with a mother feeding her young. The image
represents our core values: care, family values, nutrition, healthy growth,
safety and comfort. It is a guarantee of quality and a commitment to our
responsibilities as a food company and experts in nutrition.
Over the years we have reaffirmed our commitment to wellness, helping
our consumers to live longer, healthier, and more productive lives, no
matter their age, gender or socioeconomic status.

Executive Name

Designation

SYED YAWAR ALI

Chairman

ROLAND DECORVET

CEO

JAN H. SASSEN

Director

ROGER STETTLER

Director

FRITZ VAN DIJK

Director

A. CANTACUZENE

Director

RAYMOND FRANKE

Director

HISTORY
The history begins back in 1866, when the first European condensed
milk factory was opened in Cham, Switzerland, by the Anglo-Swiss
Condensed Milk Company.H e n r i N e st l e , a p ha r m a c i s t ,
d e v e l o p e d a f o o d f o r b a b i e s wh o we r e unable to breastfeed.
His first success was a premature infant who could not tolerate his
mother's milk or any of the usual substitutes which eventually
became the first Nestles customer.
After Nestle's new formula saved the child's life and
soon,farmine was being sold in 1874,Jules Monnerat purchased

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Nestle and collectively tye launched the condensed milk. In 1905
Nestle merged with A n g l o - S wi s s wh i c h wa s an c o n d en s e d m i l k
c o m p a n y.
S o o n a f t e r N e s t l e established its roots all over Europe to
cater the need of the customers of Europe,as Nestle fame was
on the top so Nestle thought to start the production function all over
the world to increase the customer demand and meet or capture more
markets. Decision to go multinational was a fruitful idea, so as
now nestle has operations in America, India, England, Brazil, Australia,
Pakistan, Hungary, France, Belgium, Italy, Spain and various other
countries around the globe. Nestle are now in all seven continents &
having more than 522 factories in83 countries.
1867 In Vevey, Switzerland, the founder Henri Nestl, a German
pharmacist, launched his Farine lactee a combination of cows milk,
wheat flour and sugar, saving the life of a neighbors child. Nutrition has
been the cornerstone of our company ever since.

Henri Nestl, himself an immigrant from Germany, was instrumental in

turning his Company towards international expansion from the very start.
We owe more than our name, our logo and our first infant-food product
to our founder. Henri Nestl embodied many of the key attitudes and
values that form part and parcel of our corporate culture: pragmatism,
flexibility, the willingness to learn, an open mind and respect for other
people and cultures.Peter Brabeck-Letmathe, Nestle chairman.

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Vision:
Nestls vision is to be the globally recognized leading Nutrition, Health
and Wellness (NHW) Company. Nestl Pakistan subscribes fully to this
vision and the values that come with it. In particular, we envision:
Leading a dynamic, passionate and professional workforce which is
proud of our heritage and positive about the future Meeting the
nutritional needs of consumers of all ages from infancy to old age,
from nutrition to pleasure, through an innovative portfolio of branded
food and beverage products of the highest quality Delivering
shareholder value through profitable long-term growth, while continuing
to play a significant and responsible role in the social, economic, and
environmental sectors of Pakistan
Mission:
To positively enhance the quality of life of people of Pakistan by all that
we do through our people, our brands, products and our Creating
Shared Value (CSV) initiatives.

Company Profit &Loss Account and Balance Sheet

Profit & Loss Account
000

Year

2014

2013

2012

2011

2010

Sales

96,457,743

86,226,869

79,087,696

64,824,364

51,487,302

Cost Of Sales

69,133,753

62,066,072

57,564,265

48,099,046

37,608,733

Gross Profit

27,323,990

24,160,797

21,523,431

16,725,318

13,878,569

Operating Profit

14,113,463

11,471,270

10,966,120

8,457,907

6,857,854

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Other Income

523,892

194,565

160,142

159,545

170,491

Finance Cost

2,155,637

2,113,096

1,827,969

1,050,355

513,081

110,009,168

8,112,962

7,977,974

6,502,864

5,696,180

Taxation

3,079,897

2,246,199

2,113,463

1,834,507

1,583,331

Profit After Tax

7,929,271

5,866,763

5,864,511

4,668,357

4,112,849

Profit Before Tax

Balance Sheet
000

Year

2014

2013

2012

2011

2010

226,143

720,065

760,831

702,025

505,516

9,763,987

7,925,132

8,025,653

7,064,170

4,602,019

18,405,780

17,936,483

16,905,484

13,395,017

8,352,923

Investments

N/A

N/A

21,970,957

N/A

N/A

Fixed Asset

33,324,915

33,828,996

33,967,233

21,601,089

14,447,083

Total Assets

51,730,695

51,765,479

50,872,717

34,996,106

22,800,006

Current Liability

27,777,240

18,000,989

20,003,413

16,788,455

9,806,572

Fixed Liability

11,325,830

22,429,375

19,309,040

10,778,988

7,563,787

Total Liabilities

39,103,070

40,430,364

39,312,453

27,567,443

17,370,359

453,496

453,496

453,496

453,496

453,496

12,627,625

11,859,157

11,560,264

7,612,416

5,581,873

Cash
Inventory
Current Asset

Paid Up Capital
Total Equity

Income Statement:
Fiscal year is
January-December.
All values PKR
millions.
Sales/Revenue

2010

2011

2012

2013

5-year
trend

2014

51.49B

64.82B

79.09B

86.23B

96.46B

Cost of Goods Sold

(COGS) incl. D&A

37.85B

48.38B

58.36B

62.99B

70.24B

COGS
excluding D&A

36.57B

46.76B

56.23B

59.99B

67B

1.28B

1.62B

2.13B

2.99B

3.24B

Depreciation &
Amortization

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Fiscal year is
January-December.
All values PKR
millions.

2010

2011

2012

2013

5-year
trend

2014

Expense
Depreciatio
n

1.27B

1.61
B

2.12
B

2.99
B

3.23
B

Amortizatio
n of
Intangibles

9.5M

4.78
M

4.78
M

4.78
M

2.39
M

13.64B

16.45B

20.73B

23.24B

26.22B

Gross Income

2010

SG&A Expense

2011

2012

2013

5year
trend

2014

6.94B

8.17B

10.26B

12.29B

12.92B

6.94B

8.17B

10.26B

12.29B

12.92B

19.2M

75.57M

166.77M

59.4M

253.95M

106.55M

149.64M

75.35M

448.44M

EBIT after Unusual

Expense

(253.95
M)

(106.55M)

(149.64M)

(75.35M)

(448.44M)

Non Operating
Income/Expense

(470.68
M)

(688.6M)

(573.7M)

(28.02M)

356.14M

Non-Operating
Interest Income

18.26M

18.98M

Equity in Affiliates
(Pretax)

264.98M

903.47M

1.77B

2.59B

2.16B

264.98M

903.47
M

2.12B

2.59B

2.16B

350.17
M

5.7B

6.5B

7.98B

8.11B

11.01B

1.58B

1.83B

2.11B

2.25B

3.08B

Research &
Development
Other SG&A
Other Operating
Expense
Unusual Expense

Interest Expense
Gross Interest
Expense
Interest
Capitalized
Pretax Income
Income Tax

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2010

Income Tax Current

Domestic

2011

2012

2013

5year
trend

2014

1.41B

1.78B

1.29B

1.45B

3.91B

Income Tax Deferred

Domestic

173.56M

52.35M

827.22
M

798.07
M

(831.25
M)

Income Tax Deferred

Foreign

Income Tax
Credits

Equity in Affiliates

Other After Tax

Income (Expense)

4.11B

4.67B

5.86B

5.87B

7.93B

4.11B

4.67B

5.86B

5.87B

7.93B

Extraordinaries
& Discontinued
Operations

Extra Items
& Gain/Loss
Sale Of
Assets

Cumulati
ve Effect
Accounti
ng Chg

4.11B

4.67B

5.86B

5.87B

7.93B

Income Tax Current Foreign

Consolidated Net
Income
Minority Interest
Expense
Net Income

Discontinued
Operations
Net Income After
Extraordinaries

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2010

Preferred Dividends

2013

5year
trend

2014

4.11B

4.67B

5.86B

5.87B

7.93B

90.69

102.94

129.32

129.37

174.85

45.35M

45.35M

45.35M

45.35M

45.35M

90.69

102.94

129.32

129.37

174.85

45.35M

45.35M

45.35M

45.35M

45.35M

7.96B

9.82B

12.6B

13.78B

16.47B

EPS (Basic)

EPS (Diluted)
Diluted Shares
Outstanding

2012

Net Income Available

to Common

Basic Shares
Outstanding

2011

EBITDA

Financial Ratio Analysis

Activity Ratios:
Inventory Turnover = COGS\ Average Inventory.
Total Assets Turnover = Revenue\ Average Total Assets.
Year
Inventory
Turnover
Asset
Turnover

2014
9.88

2013
10.88

2012
9.85

2011
9.18

2010
11.19

186.46

166.57

155.46

185.23

225.82

Liquidity Ratios:
Quick Ratio = Quick Assets / C. Liabilities
Solved: (2014)= 8641813/ 27777240 =0.31
Solved: (2013)= 10011351/ 18000989 =0.55
Solved: (2012) = 8879831\20003413 =0.44

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Solved: (2011)= 6330847/ 16788455 =0.38
Solved: (2010)= 3750904/ 9806572 =0.38
Current Ratio = Current Assets/ Current Liabilities.
Solved: (2014)= 18405780/27777240 =0.66
Solved: (2013)= 17936483/18000989 =1.00
Solved: (2012)= 16905484/20003413 =0.85
Solved: (2011)= 13395017/16788455 =0.80
Solved: (2010)= 8352923/9806572 =0.85
Year
Quick
Ratio
Current
Ratio

2014
0.31

2013
0.56

2012
0.44

2011
0.38

2010
0.38

0.66

1.00

0.85

0.80

0.85

Solvency Ratio:
Total Debt to Equity = Total debt\ Total share holders Equity
Solved: (2014)= 39103070/12627625 = 309.66
Solved: (2013)= 40430364/11859157 = 340.92
Solved: (2012)= 39312453/11560264 = 340.07
Solved: (2011)= 27567443/7612416 = 362.14
Solved: (2010)= 17370359/5581873 = 311.19

Total Debt to Assets = Total Debt \ Total Assets

Solved: (2014)= 39103070/51730695 = 75.59
Solved: (2013)= 40430364/51765479 = 78.10
Solved: (2012)= 39312453/50872717 = 77.28
Solved: (2011)= 27567443/34996106 = 78.77

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Solved: (2010)= 17370359/22800006 = 76.19
Interest Coverage Ratio = EBIT\ Interest Payments

Year
Total
Debt to
Equity
Ratio
Total
Debt to
Asset
Ratio
Interest
Cover

2014
309.66

2013
340.92

2012
340.07

2011
362.14

2010
311.19

75.59

78.10

77.28

78.77

76.19

52.03

4.84

5.36

7.19

12.10

Profitability Ratios:
Net Profit margin = Net income\ Revenue
Solved: (2014)= 7929271/96457743 =8.22
Solved: (2013)= 5866763/86226869 =6.80
Solved: (2012)= 5864511/79087696 =7.42
Solved: (2011)= 4668357/64824364 =7.20
Solved: (2010)= 4112849/51487302 =7.99

Gross Profit margin = Gross Profit\ Revenue

Solved: (2014)= 27323990/96457743 =28.33
Solved: (2013)= 24160797/86226869 =28.02
Solved: (2012)= 21523431/79087696 =27.21
Solved: (2011)= 16725318/64824364 =25.80

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Solved: (2010)= 13878569/51487302 =26.96
Operating Profit Margin = EBIT\ Revenue
Solved: (2014)= 14113463/96457743 =14.63
Solved: (2013)= 11471270/86226869 =13.30
Solved: (2012)= 10966120/79087696 =13.87
Solved: (2011)= 8457907/64824364 =13.05
Solved: (2010)= 6857854/51487302 =13.32
ROA = EBIT\ Average Total Assets
ROE = Net Income\ Share Holders Equity
Solved: (2014)= 7,929,271/12627625 =62.79
Solved: (2013)= 5,866,763/11859157 =49.47
Solved: (2012)= 5,864,511/11560264 =50.73
Solved: (2011)= 4,668,357/7612416 =61.33
Solved: (2010)= 4,112,849/5581873 =73.68'

Year
Net Profit
Margin
Gross
Profit
Margin
Operating
Profit

2014
8.22

2013
6.80

2012
7.42

2011
7.20

2010
7.99

28.33

28.02

27.21

25.80

26.96

14.63

13.30

13..87

13.05

13.32

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Margin
ROA
ROE

15.33`
62.79

11.33
49.47

11.53
50.73

13.34
61.33

18.04
73.68

Common Size Analysis:

Amount
2014

Percentage

Amount
2013

Percentage

96.46B

11.87%

86.23B

9.03%

2.39M

11.52%

4.78M

7.93%

26.22B

12.80%

23.24B

12.11%

SG&A
Interest
Expense
Pretax
income

12.92B

5.12%

12.29B

2.16B

-16.69%

11.01B

Net Income

7.93B

Particulars

Operating
Revenue
COGS
Gross
Income

Amount
2012

79.09
B

Percentage

22.00%
20.63%

19.77%

4.78M
20.73
B
10.26
B

2.59B

46.33%

1.77B

35.70%

8.11B

1.69%

35.16%

5.87B

0.04%

Amount
2011

64.82
B

Precentage

25.90%

Amount
2010

51.49
B

4.78M
16.45
B

27.83%

17.78%

95.71%

8.17B
903.47
B

240.96%

6.94B
264.9
8B

7.98B

22.68%

6.5B

14.16%

5.7B

5.86B

25.62%

4.67B

13.51%

4.11B

26.05%
25.60%

20.57%

9.5M
16.64
B