2020 2019 2018

EQUITY AND LIABILITIES

Share capital and reserves

Authorized capital

ordinary shares 750,000 750,000 750,000

Issued, subscribed and paid up capital 453,496 453,496 453,496

Share premium 249,527 249,527 249,527

General reserve 280,000 280,000 280,000

Accumulated profit 3,207,419 2,272,943 3,037,201

Total owner's equity 4,190,442 3,255,966 4,020,224

Non-current liabilities

Long term finances - secured 12,081,975 3,780,294 9,064,730

Lease liabilities 34,682 143,004 217,530

Deferred taxation 1,332,919 1,960,850 2,443,197

 Retirement benefits 3,117,661 2,777,502 2,098,020

Total non current liabilities 16,567,237 8,661,650 13,823,477

Current liabilities

Current portion of long term liabilities 3,734,310 3,395,084 420,285

Short term borrowings - secured 6,417,473 17,217,473 15,242,800

Running finance under mark-up arrangements -

830,245 6,141,325 1,418,301
secured

Customer security deposits - interest free 222,166 192,724 195,431

Unclaimed dividend 72,121 20,608 20,608

Trade and other payables 26,563,482 25,138,313 31,745,031

Contract liabilities 562,263 382,146 0

Income tax payable 1,443,443 262,436 0

Interest and mark-up accrued 303,183 444,958 273,854

 Total current liabilities 40,148,686 53,195,067 49,316,310

TOTAL EQUITY AND LIABILITIES 60906365 65112683 67160011

ASSETS

Non-current assets

Property, plant and equipment 28,679,851 30,333,121 30,363,333

Capital work-in-progress 4,097,316 3,441,066 3,679,302

Intangible assets 0 7,396 15,464

Long term loans 179,191 239,499 305,333

Total non current assets 32,956,358 34,021,082 34,363,432

Current assets

Stores and spares 2,670,279 2,376,057 1,951,900

Stock-in-trade 16,252,021 18,876,441 19,711,784

Trade debts 1,930,333 2,164,888 3,116,948

 Current portion of long term loans 134,078 132,045 132,729

Sales tax refundable - net 4,324,260 4,599,004 4,552,598

Advances, deposits, prepayments and other

1,849,981 2,624,413 2,584,926
receivables

Cash and bank balances 789,055 318,753 745,694

Total current assets 27,950,007 31,091,601 32,796,579

TOTAL ASSETS 60,906,365 65,112,683 67,160,011

 NESTLE PAKISTAN LIMITED
BALANCE SHEET

Horizontal analysis V
2020 2019 Analysis 2020

0.0% 0% 1.2%

0.0% 0% 1%

0.0% 0% 0.4%

0.0% 0% 0.5%

the accumulated profit was -25 % in 2019 and it

41.1% -25% became 41.1% in 2020. This shows that accumulated 5%
profit increased by 66.3%

the total owner's equity was -19 % in 2019 and it

28.7% -19% became 28.7% in 2020. This shows that total owner's 7%
equity increased by % 47.7%

The long term finances were -58% in 2019 and

219.6% -58% became 219.6% in 2020. This shows that long term 20%
finances are increased by 277.6%.

The lease labilities were -34% in 2019 and became

-75.7% -34% -75.7% in 2020. This shows that lease labilities are 0.1%
decreased by 41.7%.

The deferred taxation was -20% in 2019 and became

-32.0% -20% -32% in 2020. This shows that deferred taxation are 2%
decreased by 12%.
 The retirement benefits were 32% in 2019 and
12.2% 32% became 12.2% in 2020. This shows that retirement 5%
benefit are decreased by 19.8%.

The total non current liabilities were -37% in 2019

91.3% -37% and it became 91.3% in 2020. This shows that total 27%
non current liabilities are increased by %. 128.3%

The current portion of long term liabilities were 708%

in 2019 and it became 10% in 2020. This shows that
10.0% 708% 6%
current portion in long term liabilities are decreased
by 698%.

The Shor term borrowings were 13% in 2019 and it

-62.7% 13% became -62,7% in 2020. This shows that short term 11%
borrowings are decreased by 75.7%

The Running finance under mark-up arrangements

was 333% in 2019 and it became 86.5% in 2020.
-86.5% 333% 1%
This shows that Running finance under mark-up
arrangements are decreased by 419.5%

The Customer security deposits - interest free were

-1% in 2019 and it became 15.3% in 2020. This
15.3% -1% 0.4%
shows that Customer security deposits - interest free
are increased by 14.3%.

The Unclaimed dividend was 0% in 2019 and it

250.0% 0.0% became 250% in 2020. This shows that unclaimed 0.1%
dividend is increased by 250%.

The trade and other payables were -21% in 2019 and

5.7% -21% it became 5.7% in 2020. This shows that they are 44%
decreased by 15.3%.

The contract liabilities were 0% in 2019 and it

47.1% 0% became 47.1% in 2020. This shows that they are 1%
increased by 47.1%.

The income tax payable was 0% in 2019 and it

450.0% 0% became 450% in 2020. This shows that income tax 2%
payable is increased by 450%.

The Interest and mark-up accrued was 62% in 2019

and it became -31.9% in 2020. This shows that
-31.9% 62% 0.5%
Interest and mark-up accrued is decreased by
93.9%.
 The total current liabilities were 8% in 2019 and it
-24.5% 8% became-24.5 % in 2020. This shows that they are 66%
decreased by 32.5%.

The total equity and liabilities were -3% in

2019 and they became -6.5% in 2020. This
-0.064601 -0.0304843 100%
shows that total equity and liabilities are
decreased by -3.5.%.

The Property, plant and equipment were -0.1 % in

-5.8% -0.1% 2019 and it became -5.8% in 2020. This shows that 47%
are decreased by 5.9%.

The Capital work-in-progress were -6.9% in 2019 and

16.0% -6.9% it became16% in 2020. This shows that are increased 7%
by 9.1%.

The Intangible assets were -109.1% in 2019 and it

0.0% -109.1% became 0% in 2020. This shows that are increased 0.0%
by -109.1%.

The Long term loans were -27.5% in 2019 and it

-33.7% -27.5% .became -33.7% in 2020. This shows that are 0.3%
decreased by -6,2 %.

The Total non current assets were -1.0% in 2019 and

-3.2% -1.0% it became -3.2% in 2020. This shows that are 54%
decreased by -2.2%.

The Stores and spares were17.9 % in 2019 and it

11.0% 17.9% became 11.0% in 2020. This shows that are 4%
decreased by 6.9%.

The Stock-in-trade was -4.4% in 2019 and it became

-16.1% -4.4% -16.1% in 2020. This shows that are decreased by 27%
11.7%.

The Trade debts were -44.0% in 2019 and it became

-12.2% -44.0% -12.2% in 2020. This shows that are increased by 3%
31.8%.
 The Current portion of long term loans were -0.5%
1.5% -0.5% in 2019 and it became 1.5% in 2020. This shows that 0.2%
are increased by 1.55%.

The Sales tax refundable - net were 1.0% in 2019

-6.4% 1.0% and it became -6.4% in 2020. This shows that are 7%
decreased by 5.4 %.

The Advances, deposits, prepayments and other

receivables were.1.5% in 2019 and it became
-41.9% 1.5% 3%
-41.9% in 2020. This shows that are decreased by
40.4%.

The Cash and bank balances were -133.9% in 2019

59.6% -133.9% and it became 59.6% in 2020. This shows that are 1%
increased by 193.5%.

The total current assets were -5.5% in 2019 and it

-11.2% -5.5% became -11.2% in 2020. This shows that are 46%
decreased by 5.7%.

The Total assets were-3.1 % in 2019 and it

-6.9% -3.1% became -6.9% in 2020. This shows that are 100%
decreased by -3.8%.
 Vertical analysis Trend Analysis
2019 2018 Analysis 2020 2019

the ordinary shares represent 1.1% of total

1.2% 1.1% equity and liabilities in 2018, 1.2% in 2019 0% 0%
and same 1.2% in 2020.

the issued, subscribed and paid up capital

1% 1% represent 1% of total equity and liabilities in 0% 0%
2018, 2019 and 2020.

the share premium represent 0.4% of total

0.4% 0.4% 0% 0%
equity and liabilities in 2018, 2019 and 2020.

the general reserve represent 0.4% of total

0.4% 0.4% equity and liabilities in 2018 and 2019 and 0% 0%
0.5% 2020.

the accumulated profit represent 5% of total

3% 5% equity and liabilities in 2018, 3% in 2019 and 6% -25%
5% in 2020.

the Total owner's equity represent 6% of total

5% 6% equity and liabilities in 2018, 5% in 2019 and 4% -19%
7% in 2020.

the lon term finances represent 13% of total

6% 13% equity and liabilities in 2018, 6% in 2019 and 33% -58%
20% in 2020.

the Lease liabilities represent 0.3% of total

0.2% 0.3% equity and liabilities in 2018, 0.2% in 2019 -84% -34%
and 0.1% in 2020.

the Deferred taxation represent 4% of total

3% 4% equity and liabilities in 2018, 3% in 2019 and -45% -20%
2% in 2020.
 the Retirement benefits represent 3% of total
4% 3% equity and liabilities in 2018, 4% in 2019 and 49% 32%
5% in 2020.

the Total non current liabilities represent 21%

13% 21% of total equity and liabilities in 2018, 13% in 20% -37%
2019 and 27% in 2020.

the Current portion of long term liabilities

5% 1% represent 1% of total equity and liabilities in 789% 708%
2018, 5% in 2019 and 6% in 2020.

the Short term borrowings - secured

26% 23% represent 23% of total equity and liabilities in -58% 13%
2018, 26% in 2019 and 11% in 2020.

the Running finance under mark-up

arrangements - secured represent 2% of
9% 2% -41% 333%
total equity and liabilities in 2018, 9% in 2019
and 1% in 2020.

the Customer security deposits - interest free

0.3% 0.3% represent 0.3% of total equity and liabilities in 14% -1%
2018, 0.3% in 2019 and 0.4% in 2020.

the Unclaimed dividend represent 0.0% of

0.0% 0.0% total equity and liabilities in 2018, 0.0% in 250% 0%
2019 and 0.1% in 2020.

the Trade and other payables represent

39% 47% 47% of total equity and liabilities in 2018, -16% -21%
39% in 2019 and 44% in 2020.

the Contract liabilities represent 0% of total

1% 0% equity and liabilities in 2018, 1% in 2019 and - -
1% in 2020.

the Income tax payable represent 0.0% of

0.4% 0.0% total equity and liabilities in 2018, 0.4% in - -
2019 and 2% in 2020.

the Interest and mark-up accrued represent

0.7% 0.4% 0.4% of total equity and liabilities in 2018, 11% 62%
0.7% in 2019 and 0.5% in 2020.
 the Total current liabilities represent 73% of
82% 73% total equity and liabilities in 2018, 82% in -19% 8%
2019 and 66% in 2020.

100% 100% -0.09 -0.03

the Property, plant and equipment represent

47% 45% 45% of total assets in 2018, 47% in 2019 and -6% -0.1%
47% in 2020.

the Capital work-in-progress represent5 %

5% 5% of total assets in 2018, 5% in 2019 and 7% in 11% -6%
2020.

the Intangible assets represent 0.02% of

0.01% 0.02% total assets in 2018, 0.01% in 2019 and 0.0% -100% -52%
in 2020.

the Long term loans represent 0.5% of total

0.4% 0.5% assets in 2018,0.4 % in 2019 and 0.3% in -41% -22%
2020.

the Total non current assets represent51 % of

52% 51% total assets in 2018, 52% in 2019 and 54% in -4% -1%
2020.

the Stores and spares represent 3% of total

4% 3% 37% 22%
assets in 2018, 4% in 2019 and 4% in 2020.

the Stock-in-trade represent 29% of total

29% 29% assets in 2018, 29% in 2019 and 27% in -18% -4%
2020.

the Trade debts represent 5% of total assets

3% 5% -38% -31%
in 2018, 3% in 2019 and 3% in 2020.
 the Current portion of long term loans
0.2% 0.2% represent 0.2% of total assets in 2018, 0.2% 1% -1%
in 2019 and 0.2% in 2020.

the Sales tax refundable - net represent 7%

7% 7% of total assets in 2018, 7% in 2019 and 7% in -5% 1%
2020.

the Advances, deposits, prepayments and

4% 4% other receivables represent 4% of total -28% 2%
assets in 2018, 4% in 2019 and 3% in 2020.

the Cash and bank balances represent 1% of

0.5% 1% total assets in 2018, 0.5% in 2019 and 1% in 6% -57%
2020.

the Total current assets represent 49% of

48% 49% total assets in 2018, 48% in 2019 and 46% in -15% -5%
2020.

100% 100% -9% -3%

 Trend Analysis
Analysis

The Accumulated profit were -25% in 2019 and

it became 6% in 2020. This shows that are
increased by 31%.

The Total owner's equity were -19% in 2019

and it became 4% in 2020. This shows that are
increased by 23%.

The Long term finances - secured were -58% in

2019 and it became 33% in 2020. This shows
that are increased by 91%.

The Lease liabilities were -34% in 2019 and it

became -84% in 2020. This shows that are
decreased by 50%.

The Deferred taxation were -20% in 2019 and it

became -45% in 2020. This shows that are
decreased by 25%.
The Retirement benefits were 32% in 2019 and
it became 49% in 2020. This shows that are
increased by 17%.

The Total non current liabilities were -37% in

2019 and it became 20% in 2020. This shows
that are increased by 57%.

The Current portion of long term liabilities were

708% in 2019 and it became 789% in 2020.
This shows that are increased by 81%.

The Short term borrowings - secured were

13% in 2019 and it became -58% in 2020. This
shows that are decreased by 59%.

The Running finance under mark-up

arrangements - secured were 333% in 2019
and it became -41% in 2020. This shows that
are decreased by 292%.

The Customer security deposits - interest free

were -1% in 2019 and it became 14% in 2020.
This shows that are increased by 15%.

The Unclaimed dividend were 0% in 2019 and

it became 250% in 2020. This shows that are
increased by 250%.

The Trade and other payables were -21% in

2019 and it became -16% in 2020. This shows
that are increased by 5%.

The Interest and mark-up accrued were 62% in

2019 and it became 11% in 2020. This shows
that are decreased by 51%.
The Total current liabilities were 8% in 2019 and
it became -19% in 2020. This shows that are
decreased by 27%.

The total equity and liabilities were

-0.03% in 2019 and it became -0.09% in
2020. This shows that are decreased by
0.06%.

The Property, plant and equipment were 0.1%

in 2019 and it became -6% in 2020. This shows
that are decreased by 5.9%.

The Capital work-in-progress were -6% in 2019

and it became 11% in 2020. This shows that are
increased by 17%.

The Intangible assets were -52% in 2019 and it

became -100% in 2020. This shows that are
decreased by 48%.

The Long term loans were -22% in 2019 and it

became -41% in 2020. This shows that are
decreased by 19%.

The Total non current assets were -1% in 2019

and it became -4% in 2020. This shows that are
decreased by 3%.

The Stores and spares were 22% in 2019 and

it became 37% in 2020. This shows that are
increased by 15%.

The Stock-in-trade were -4% in 2019 and it

became -18% in 2020. This shows that are
decreased by 14%.

The Trade debts were -31% in 2019 and it

became -38% in 2020. This shows that are
decreased by 7%.
 The Current portion of long term loans were
-1% in 2019 and it became 1% in 2020. This
shows that are increased by 2%.

The Sales tax refundable - net were 1% in

2019 and it became -5% in 2020. This shows
that are decreased by 4%.

The Advances, deposits, prepayments and

other receivables were 2% in 2019 and it
became -28% in 2020. This shows that are
decreased by 30%.

The Cash and bank balances were -57% in

2019 and it became 6% in 2020. This shows
that are increased by 63%.

The Total current assets were -5% in 2019 and

it became -15% in 2020. This shows that are
decreased by %.

The Total assets were -3% in 2019 and

it became -9% in 2020. This shows that
are decreased by 10%.
 Ho
2020 2019 2018 2020

Net Sales 118,781,274 115,962,473 120,701,038 2.4%

Cost of goods sold 84,016,549 82,613,501 81,887,248 1.7%

Gross profit 34,764,725 33,348,972 38,813,790 4.2%

Distribution and selling expense 14,256,719 14,656,501 15,625,633 -2.7%

Administration expenses 4,447,506 3,667,718 3,108,623 21.3%

Operating profit 16,060,500 15,024,753 20,079,534 6.9%

Finance cost 2,805,015 3,187,695 1,855,789 -12.0%

Other operating expenses 1,019,221 1,390,138 1,512,112 -26.7%

3,824,236 4,577,833 3,367,901 -16.5%

Other income 354,830 268,790 255,308 32.0%

Profit before taxation 12,591,094 10,715,710 16,966,941 17.5%

Taxation 3,706,499 3,361,243 5,355,382 10.3%

Profit after taxation 8,884,595 7,354,467 11,611,559 20.8%
 NESTLE PAKISTAN LIMITED
INCOME STATEMENT

Horizontal analysis vertical analysis

2019 Analysis 2020 2019 2018

The Net Sales were -3.9% in 2019 and it

became 2.4% in 2020. This shows that they are
-3.9% increased by 6.3%. 100.0% 100.0% 100.0%
The Cost of goods sold was 0.9% in 2019 and it
became 1.7% in 2020. This shows that it is
0.9% increased by 0.8%. 70.7% 71.2% 67.8%

The Gross profit was -14.4% in 2019 and it

became 4.2% in 2020. This shows that it is
increased by 18.3%.
-14.1% 29.3% 28.8% 32.2%

The Distribution and selling expense were -6.2%

in 2019 and it became -2.7% in 2020. This
shows that they are increased by 3.5%.
-6.2% 12.0% 12.6% 12.9%

The Administration expenses were 18% in 2019

and it became 21.3% in 2020. This shows that
they are increased by 3.3%.
18.0% 3.7% 3.2% 2.6%

The Operating profit was -25.2% in 2019 and it

became 6.9% in 2020. This shows that it is
-25.2% increased by 32.1%. 13.5% 13.0% 16.6%
The Finance cost was 71.8% in 2019 and it
became -12% in 2020. This shows that it is
decreased significantly by 83.8%.
71.8% 2.4% 2.7% 1.5%
The Other operating expenses were -8.1% in
2019 and it became -26.7% in 2020. This shows
-8.1% that they are decreased by 18.6%. 0.9% 1.2% 1.3%
35.9% 3.2% 3.9% 2.8%
The Other income was 5.3% in 2019 and it
became % in 2020. This shows that it is
5.3% increased by 26.7%. 0.3% 0.2% 0.2%

The Profit before taxation was -36.8% in 2019

and it became 17.5% in 2020. This shows that it
-36.8% is increased by 54.3%. 10.6% 9.2% 14.1%
The tax was -37.2% in 2019 and it became
10.3% in 2020. This shows that it is increased
-37.2% by 47.5%. 3.1% 2.9% 4.4%
 The Profit after taxation was -36.7% in 2019 and
it became 20.8% in 2020. This shows that profit
after taxation is increased by 57.5%.
-36.7% 7.5% 6.3% 9.6%
vertical analysis Trend analysis
Analysis 2020 2019

-2% -4%
the Cost of goods sold represent 67.8% of
net sales in 2018, 71.2% in 2019 and
70.7% in 2020. 3% 1%

the Gross profit represent 32.2% of net

sales in 2018, 28.8% in 2019 and 29.3% in
2020.
-10% -14%

the represent 12.9% of net sales in 2018,

12.6% in 2019 and 12% in 2020.
-9% -6%

the represent 2.6% of net sales in 2018,

3.2% in 2019 and 3.7% in 2020.
43% 18%

the Operating profit represent 16.6% of net

sales in 2018, %13 in 2019 and 13.5% in
2020. -20% -25%
the Finance cost represent 1.5% of net
sales in 2018, 2.7% in 2019 and 2.4% in
2020.
51% 72%
the Other operating expenses represent
1.3% of net sales in 2018, 1.2% in 2019
and 0.9% in 2020. -33% -8%
14% 36%
the Other income represent 0.2% of net
sales in 2018, 0.2% in 2019 and 0.3% in
2020. 39% 5%

the Profit before taxation represent 14.1%

of net sales in 2018, 9.2% in 2019 and
10.6% in 2020. -26% -37%

the tax represent 4.4% of net sales in 2018,

2.9% in 2019 and 3.1% in 2020.
-31% -37%
 the Profit after taxation represent 9.6% of
net sales in 2018, 6.3% in 2019 and 7.5% in
2020.
-23% -37%
 Trend analysis
Analysis

The Net Sales were -4% in 2019 and it became -2%

in 2020. This shows that they are increased by 2%.

The Cost of goods sold was 1% in 2019 and it

became 3% in 2020. This shows that it is increased
by 2%.

The Gross profit was -14% in 2019 and it became

-10% in 2020. This shows that it is increased by 4%.

The Distribution and selling expenses were -6% in

2019 and it became -9% in 2020. This shows that
they are decreased by 3%.

The Administration expenses were 18% in 2019 and

it became 43% in 2020. This shows that they are
increased by 25%.

The Operating profit was -25% in 2019 and it

became -20% in 2020. This shows that it is
increased by 5%.

The Finance cost was 72% in 2019 and it became

51% in 2020. This shows that it is decreased by
21%.

The Other operating expenses were -8% in 2019

and it became -33% in 2020. This shows that they
are decreased by 25%.

The Other income was 5% in 2019 and it became

39% in 2020. This shows that it is increased by 34%.

The Profit before taxation was -37% in 2019 and it

became -26% in 2020. This shows that are
increased by 11%.

The tax was -37% in 2019 and it became -31% in

2020. This shows that it was increased by 6%.
The Profit after taxation was -37% in 2019 and it
became -23% in 2020. This shows that it is
increased by 14%.
 Ratio An

Liquidity ratios

years
current assets current liabilities
2020 27,950,007 40,148,686
2019 31,091,601 53,195,067
2018 32,796,579 49,316,310

current assets Prepayments and Inventory current liabilities

2020 27,950,007 4,520,260 40,148,686
2019 31,091,601 5,000,470 53,195,067

2018 32,796,579 4,536,826 49,316,310

cash and cash equivalents current liabilities

2020 789,055 40,148,686

2019 318,753 53,195,067

2018 745,694 49,316,310

current assets current liabilities

2020 27,950,007 40,148,686
2019 31,091,601 53,195,067
2018 32,796,579 49,316,310

Activity ratios

years
net credit sales average debtors
2020 118781274 8238652
2019 115962473 9520350
2018 120701038 10387201

cost of goods sold average inventory

2020 84016549 2670279
2019 82613501 2376057
2018 81887248 1951900

net sales average assets

2020 118781274 60906365
2019 115962473 65112683
2018 120701038 67160011
 average debtors net credit sales
2020 8238652 118781274
2019 9520350 115962473
2018 10387201 120701038

average inventory cost of sales

2020 2670279 84016549
2019 2376057 82613501
2018 1951900 81887248

Profitability ratios

years
net profit net sales
2020 8884595 118781274
2019 7354467 115962473
2018 11611559 120701038

gross profit net sales

2020 34764725 118781274
2019 33348972 115962473
2018 38813790 120701038

profit after interest and tax total assets

2020 8884595 60906365
2019 7354467 65112683
2018 11611559 67160011

profit after interest and tax total owner's equity

2020 8884595 4190442
2019 7354467 3255966
2018 11611559 4020224

profit before interest and tax total fixed interest expense

2020 12591094 2805015
2019 10715710 3187695
2018 16966941 1855789

Long term solvency ratios

years
long term debt total owner's equity
2020 12081975 4190442
2019 3780294 3255966
2018 9064730 4020224

long term debt total assets

2020 12081975 60906365
2019 3780294 65112683
2018 9064730 67160011

owner's equity total assets

2020 4190442 60906365
2019 3255966 65112683
2018 4020224 67160011

interest fixed expense EBIT

2020 2805015 12591094
2019 3187695 10715710
2018 1855789 16966941

Market ratios

years
profit after interest and tax total number of common share
2020 8884595 7500000
2019 7354467 7500000
2018 11611559 7500000

total common dividend total number of common share

2020 7884667 7500000
2019 7845479 7500000
2018 12023750 7500000

total dividend EAIT

2020 7884667 8884595
2019 7845479 7354467
2018 12023750 11611559

dividend payout ratio

2020 0.9
2019 1.1
2018 1.0
Ratio Analysis

current ratio
0.7
0.6
0.7

Quick ratio/Acid test ratio

0.6
0.5

0.6

cash ratio
0.02

0.01

0.02

working capital
-12,198,679
-22,103,466
-16,519,731

debtor turnover (times)

14
12
11.6

inventory turnover(times)
31
35
42

assets turnover
2.0
1.8
1.8
 receivable collection period
(days)
25
30
31

inventory conversion period

3.2%
2.9%
2.4%

net profit margin

7%
6%
10%

gross profit ratios

29%
29%
32%

return on assets
15%
11%
17%

return on equity
2.1
2.3
2.9

interest coverage ratios

4.5
3.4
9.1

debt to equity ratio

2.9
1.2
2.3

debt to total assets ratio

 0.20
0.06
0.13

equity to total asset ratio

0.07
0.05
0.06

interest coverage ratio

0.2
0.3
0.1

Earning per share

1.2
1.0
1.5

Dividend per share

1.1
1.0
1.6

dividend payout ratio

0.9
1.1
1.0

Retention ratio
0.1
-0.1
-0.04
 Analysis

Against the Rs.1 liability Nestle has Rs.0.7 in 2020, Rs.0.6 in 2019 and Rs.
0.7 in 2017 of current assets to pay off its current liabilities. Which is not a
good sign, company is unable to pay off its current liabilities.

Nestle has Rs.0.6 in 2020. Rs.0.5 in 2019 and Rs0.6 in 2018 of quick
current assets to pay off its Rs.1 current liabilities. Which is not a good sign,
company is unable to pay off its current liabilities.

To pay off Rs.1 Current liabilities Nestle has 0.02 in 2020,0.01 in 2019 and
0.02 in 2018 cash and cash equivalents are available. Which means
Company cash position is not good. It has weak financial position.

Nestle current liabilities are more than current assets in 2020, 2019 and
2018. Negative working capital is not a good sign for company financial
position.

Analysis

Nestle is efficient in collection of receivables. The debtor turnover ratio is

increasing through the years 2018, 2019 and 2020. Which is good for
company liquidity position.

Nestle seems inefficient in converting its inventory into cost of goods sold as
the inventory turnover ratio is decreasing over the years.

Nestle assets are helping to generate its revenue. It means Company is in

good position as assets turnover is increased in 2020 as compared to 2019
and 2018.
Nestle is efficient is collecting receivables. Over the years collection period
is decreasing, which is good sign for company liquidity position.

The time in which Nestle is converting its inventory into sale is increasing
over the year, which is not good for company. It shows company's
inefficiency.

Analysis

Nestle's net profit margin is decreasing over the years, which is not good for
company growth, financial and liquidity position.

Gross profit margin of Nestle is decreasing over the years, which is not good
for company growth, financial and liquidity position.

Nestle return on assets is decreasing, as company is in efficient in

generating sales. This is not good for company's health.

The return paid to equity holder of Nestle is decreasing over the years.

Nestle's profit are not covering its interest expense efficiently. They are
decreasing significantly over the years, which is not good for company.

Analysis

Nestle has financed more through debt rather equity as compared to 2019
and 2018 as debt to equity ratio is increasing over the time.
 Nestle assets are insufficient to meet its long term debt. The debt to total
assets ratio is increased than 2018 and 2019 but the increase is very slight
which is able to overcome its debt.

Total assets of Nestle are significantly not enough to cover its equity.. The
equity to total assets ratio is increased than 2018 and 2019 but the increase
is very slight which is not able to overcome its equity..

Nestle earnings before interest and tax are insufficient to cover its interest
expense. The interest coverage ratio is not able to overcome its interest
expense.

Analysis

The company earning per share was 1.5 in 2018 and decreased in 2019 to
1 per share and in 2020 it increases from 1 to 1.2 per share. The increase in
Eps from 2019 to 2020 is good for company but as compared to year 2018 it
is decreased.

The Nestle Dividend per share was 1.6 in 2018 and decreased in 2019 to
1.0 per share and in 2020 it increases from 1 to 1.1 per share. The increase
in dividend per share from 2019 to 2020 is good for company but as
compared to year 2018 it is decreased significantly.

The company Dividend payout ratio was 1 in 2018 and increased in 2019 to
1.1 and in 2020 it decreases from 1.1 to 0.9. The increase in dividend per
share from 2018 to 2019 was good but in 2020 it less than both year 2019
and 2018 which is not good for company reputation.

The Nestle retention ratio was negative during year 2018 and 2019 but
increased to 0.1 in year 2020.
 Expense analysis

2020 2019 2018

Selling, general and

18704225 18324219 18734256
administrative expenses

Non current assets 16567237 8661650 13823477

Expense analysis
Horizontal analysis change Analysis
2020 2019
The Nestle is capital transaction-
based company, it has invested more
0.02073791 -0.02188701809 0.0426249 in non-current assets than selling,
general and admirative expenses. It
shows that company is going for
expansion, growth and enhance
0.912711435 -0.37341017748 1.2861216 company earning capacity or net
worth.
 Bankruptcy Analysis
Years
working capital total asset X1
2020 -12198679 60906365 -0.20
2019 -22103466 65112683 -0.34
2018 -16519731 67160011 -0.25

retained earnings total assets X2

2020 3207419 60906365 0.05
2019 2272943 65112683 0.03
2018 3037201 67160011 0.05

EBIT total assets X3

2020 12591094 60906365 0.21
2019 10715710 65112683 0.16
2018 16966941 67160011 0.25

Market Capitalization book value of liabilities X4

2020 3022596189.6 56715932 53.2936
2019 3022596189.6 8661650 348.96309
2018 3022596189.6 13823477 218.65672

Sales total assets X5

2020 118781274 60906365 1.95
2019 115962473 65112683 1.78
2018 120701038 67160011 1.80
Bankruptcy Analysis
Analysis
2020 34.44 greater than 2.99
2019 211.34 greater than 2.99 It is a good indication for the
2018 133.59 greater than 2.99 Nestle. It is able to pay off its
loans and long term liabilities and
there are significant chances that
company is not going towards
Bankruptcy. But as we compare
this rate with previous years it
decreases we might moving
company towards risk.
 Growth Analysis 2020

Divident Paid 7,884,667 Internal growth rate 1.64%

EAIT 8,884,595 Sustainable growth rate 23.86%

Total assets 60,906,365

ROA 0.15
Divident Payout ratio 0.89
b rentention ratio 0.11
Shareholder Equity 4,190,442
ROE 2.12
 Analysis
The company can achieve 1.64 percent as maximum
growth without obtaining any external finance.

The Nestle can acheive growth rate of 23.86 percent

without any additional equity but with the additional
debt just enough to maintain its existing debt to equity
ratio