Report on Unilever Pakistan

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  • 1. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 1
  • 2. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 2“Contents”INTRODUCTION: (UNILEVER)...............................................................................................3Our Vision: ...........................................................................................................................4Our People:..........................................................................................................................4Unilever Corporate Purpose:...............................................................................................5Purpose and Principles: .......................................................................................................5Common Size Financial Statements: ...................................................................................6Types of Common Size Financial Statement:...................................................................6Common Size Income Statement:.......................................................................................6Common Size Balance Sheet: ..............................................................................................7Advantages And Disadvantages of Common Size Statement: ............................................7Disadvantages of Common Size Statement:....................................................................7Analysis:...............................................................................................................................8Income Statement:...........................................................................................................8Net Profit:......................................................................................................................8The company’s net profit in 2010 as in the comparison of 2009 but slant decrementin 2011. .........................................................................................................................8Balance Sheet: .....................................................................................................................8Assets: ......................................................................................................................................... 8Liabilities:................................................................................................................................... 10Equity:........................................................................................................................................ 11Conclusion:.................................................................................................................................... 12
  • 3. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 3INTRODUCTION: (UNILEVER)“No matter who you are, or where in the world you are, the chances are that ourproducts are a familiar part of your daily routine. Every day, around the world, peoplereach for Unilever products”Unilever Pakistan (70.4% Unileverequity) is the largest FMCG Company inPakistan, as well as one of the largestmultinationals operating in thecountry. Unilever Pakistan began itsoperations in 1948, the Company hasbeen closely connected to the Pakistanipeople and its brands have been afundamental feature in their daily lives.In fact, the nature of our businessenables our brands to be the pulse andheartbeat of the 164 million people inPakistan.Unilever is one of the world’s leadingsuppliers of fast-moving consumergoods. We aim to provide people theworld over with products that are goodfor them and good for others.
  • 4. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 4Our Vision:1. We work to create a betterfuture every day.2. We help people feel good, lookgood and get more out of lifewith brands and services that aregood for them and good forothers.3. We will inspire people to takesmall everyday actions that canadd up to a big difference for theworld.4. We will develop new ways ofdoing business that will allow usto double the size of ourcompany while reducing ourenvironmental impact.Our People:People are the heart of our business.We aim to create an environmentin which all employees can fulfiltheir potential.Unilever is one of the world’smost culturally diversecompanies. Our Board is made upof six nationalities and the ninemembers of the UnileverExecutive come from six differentcountries.
  • 5. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 5Unilever Corporate Purpose:Our deep roots in local cultures and markets around the world give us our strongrelationship with consumers and are the foundation for our future growth. We willbring our wealth of knowledge and international expertise to the service of localconsumers – a truly multi-local multinational.Our long-term success requires a total commitment to exceptional standards ofperformance and productivity, to working together effectively, and to a willingness toembrace new ideas and learn continuously.To succeed also requires, we believe, the highest standards of corporate behaviourtowards everyone we work with, the communities we touch, and the environment onwhich we have an impact.This is our road to sustainable, profitable growth, creating long-term value for ourshareholders, our people, and our business partners.Purpose and Principles:Our corporate purpose states that to succeed requires "the highest standards ofcorporate behavior towards everyone we work with, the communities we touch, andthe environment on which we have an impact."Always working with integrityPositive impactContinuous commitmentSetting out our aspirationsWorking with others
  • 6. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 6Common Size Financial Statements:Company’s financial statement, which displays all items as percentages of a commonbase figure. This type of financial statement allows for easy analysis betweencompanies or between time periods of a company.The values on the common size statement are expressed as percentages of a statementcomponent such as revenue. While most firms dont report their statements in commonsize, it is beneficial to compute if you want to analyze two or more companies ofdiffering size against each other.Formatting financial statements in this way reduces the bias that can occur whenanalyzing companies of differing sizes. It also allows for the analysis of a company overvarious time periods, revealing, for example, what percentage of sales is cost of goodssold and how that value has changed over time.Types of Common Size Financial Statement:(1)Common Size Balance Sheet(2)Common Size Income Statement:Common Size Income Statement:An income statement in which each account is expressed as a percentage of the valueof sales. This type of financial statement can be used to allow for easy analysis betweencompanies or between time periods of a company.Common size income statement analysis allows an analyst to determine how the variouscomponents of the income statement affect a companys profit.
  • 7. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 7Common Size Balance Sheet:A company balance sheet that displays all items as percentages of a common basefigure. This type of financial statement can be used to allow for easy analysis betweencompanies or between time periods of a company.The image above illustrates the difference between a regular balance sheet and acommon size balance sheet. In the normal balance sheet, account values areexpressedin dollar terms, while in the common size one, each value is listed as apercentage of total assets. This is also done for liabilities, where each liability account isa percentage of total liabilities.Advantages And Disadvantages of Common Size Statement:Advantages of Common Size statement:It reveals Sources and Application of Funds in a nutshell which help in takingdecision.If common size statements of 2 or more years are compared it indicate thechanging proportion of various components of Assets, Liabilities, Cost, Net Sale &Profit.When Inter Firm Comparison is made with the help of Common size statement ithelps in doing corporate evaluation and Ranking.Disadvantages of Common Size Statement:No Established Standard Proportion:Common Size Statements are regarded as useless as there is no established standardproportion of an asset to the total asset or an item of expense to the net sales.
  • 8. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 8Consistency Required:If Financial Statement of a Particular business organization are not prepared year afteryear on a consistent basis comparative study of common size statement will bemisleading.Analysis:Income Statement:A financial statement that measures a companys financial performance over a specificaccounting period. Financial performance is assessed by giving a summary of how thebusiness incurs its revenues and expenses through both operating and non-operatingactivities. It also shows the net profit or loss incurred over a specific accounting period,typically over a fiscal quarter or year. It is also known as the "profit and loss statement"or "statement of revenue and expense".Net Profit:In business, what remains after subtracting all the costs (namelybusiness, depreciation, interest, and taxes) from a companys revenues? Net income issometimes called the bottom line. It is also called earnings or net profit. For anindividual, gross income minus taxes, allowances, and deductions. An individualsnet income is used to determine how much income tax is owed.The company’s net profit in 2010 as in the comparison of 2009 but slant decrement in2011.Balance Sheet:Assets:Non - Current Assets: Noncurrent assets are capitalized rather than expensed,meaning that the company allocates the cost of the asset over the number of years forwhich the asset will be in use, instead of allocating the entire cost to the accountingyear in which the asset was purchased.Current Assets:A balance sheet item which equals the sum of cash and cashequivalents, accounts receivable, inventory, marketable securities, prepaid expenses,and other assets that could be converted to cash in less than one year.
  • 9. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 9A companys creditors will often be interested in how much that company has in currentassets, since these assets can be easily liquidated in case the company goes bankrupt.The non-current asset in 2010 was 69.56% as it increases to 69.92% in 2011. Theelement in balance sheet which increases and decreasesin the balance sheet of 2011the company’s intangible assets increases by 2.41% in 2011, deferred tax assets whichdecreases by 0.58%, Property, plant and equipment decreases by 0.61%, the company’sgoodwill also decreases in year 2011 by 0.57% and its financial assets also decreases byin 2011 by 0.23%. Thus above mention all the fundamentals increases in the year 2011which decreases the current assets of the company. In current assets fundamentals alsofluctuate in year 2011 as inventories decreases by 0.78%, the cash and cash equivalentsincreases in 2011 and its other financial assets also increases.0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%Non- current Assets Current AssetAssetsyears 2010years 2011
  • 10. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 10Liabilities:Current liabilities:A balance sheet item which equals the sum of all money owed bya company and due within one year also called payables or current debt.Non – current liabilities:Debt not due to be paid within the next year.The non-current liabilities increases in 2011 by 0.53% and the current liabilities areincreases by 4.69% because the company’s current financial debts are increased by6.76% in 2011.0.00%5.00%10.00%15.00%20.00%25.00%30.00%35.00%40.00%Non-Current Liablities Current LiabilitiesLiabilitiesyears 2011years 2010
  • 11. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 11Equity:Equity is the residual claim or interest of the most junior class of investors in assets,after all liabilities are paid. If liability exceeds assets, negative equity exists. In anaccounting context, Shareholders equity (or stockholders equity, shareholders funds,shareholders capital or similar terms) represents the remaining interest in assets of acompany, spread among individual shareholders of common or preferred stock.The company’s equity decreases by 5.22% in the year 2011, because the company’sshareholder equity decreases.28.00%29.00%30.00%31.00%32.00%33.00%34.00%35.00%36.00%37.00%38.00%2011 201020112010
  • 12. Pakistan Air force – Karachi Institute of Economics and Technology – Fall’2012Page 12Conclusion:The common size statement helps to do the analysis of the company, at what positionthe company stands on the basis of shareholders performance and its profit orientedarea. As unilever is the multinational company, which makes so, many brands, above wehave done the analysis that at what stage company stands.