d.However, owing to business limitations their receivables increasedduring year 2011 due to which their DSO rose up to one day which waslower in 2009 and 2010 respectively.e.However, the figure is not alarming and is within the manageablerange.f.Unilever has an excellent credit policy.4.
Evaluating the FATO and TATO
Unilever had good turn over of its fixed assets in year 2010. However,same has reduced in 2011.
Though the company had higher sales in comparison to last two yearsbut still it had higher number of net fixed assets. Due to which its Fixed Assets Turn Over remained below the expectations. Which could havebeen higher owing to number of increased fixed assets.
In a similar fashion, company’s sales increased but it did not match thenumber of total assets it had for running the business. Therefore, itsTotal Assets Turn Over remained below as compared to last two yearsturn over.d.Company needs to dish out its excessive current assets.5.
Appraisal of Debt Ratio and Times Earned Interest Ratio
201120102009D/A68.5 %73.5 %71.1 %TIE27.4 x26.2x11.6x
Unilever had lowered its debt in 2011, therefore its debt ratio hasdecreased. This is a positive sign towards company’s uplift.b.Still it needs to lower its debt to a point where its debt ratio should notget higher that 50%.c.Since the interest is within the manageable range therefore the factor of interest is negligible.d.Company has prospered due to its commercial paper deeds or thelowering of interest through banks.
Analysis of Annual Report – Unilever 2