BACKGROUND OF COMPANYHeadquarters Address: Nestle House, 22-1, 22/F, MenaraSurian, 1, Jln PJU 7/3 MutiaraDamansara; Petaling Jaya;Selangor;47810.Status: Listed in Bursa Malaysia Main Board.13 December 1989.Legal Form: Public Limited CompanyOperational Status: OperationalIncorporation Date: November 30, 1983Total Employees: 3,818 and more peoplesTelephone Number: (603)79656000
BACKGROUND OF COMPANYThe main activity of Nestle (Malaysia) Berhad isinvestment holding, and main activities of thesubsidiaries are marketing and sale in bothlocally and for export, those products are ice-cream, powdered milk and drinks, instantcoffee and other beverages, chocolateconfectionery products, instant noodles,culinary products, cereals and yogurt.[ NESTLE (MALAYSIA) BERHAD ]
Liquidity RatioLiquidity Ratio Year 2011 Year 2010 Year 2009Current Ratio=Current Asset/CurrentLiability1.097 x 1.0873 x 1.0843 xQuick Ratio=(Current Asset-Inventory)/CurrentLiability0.5439 x 0.5595 x 0.5771 xCash Ratio=(Cash + CashEquivalents)/CurrentLiability0.0574 x 0.0675 x 0.0369 x
Liquidity Ratio• Liquidity Ratio is unsatisfied.• Quick Ratio is decreased year by year :0.5771 times in year 20090.5595 times in year 20100.5439 times in year 2011• Every RM 1 of current liability generated RM 0.54current assets in year 2011 compare to RM 0.57in year 2009 without considering inventory.• Liquidity Ratio measures how fast the companygain cash in less than one year.
Activity RatioActivity Ratio Year 2011 Year 2010 Year 2009Inventory Turnover=Cost Of GoodsSold/Inventory6.1032 x 7.0480 x 6.9494 xAverage CollectionPeriod=AccountReceivable/(Sales/360)34 days 32 days 36 daysFixed Assets Turnover=Sales/Fixed Assets4.7617 x 4.0473 x 3.9205 xTotal Assets Turnover=Sales/Total Assets2.3478 x 2.2637 x 2.1861 x
Activity Ratio /Asset Management Ratio• Activity Ratio is satisfied.• Every RM 1 of fixed assets generated RM 4.76 salesin year 2011 compare to RM 3.92 in year 2009.• Fixed Assets Turnover is increased year by year:3.9205 times in year 20094.0473 times in 20104.7617 times in year 2011.• Activity ratio measures how well a firm is managingits assets.
Leverage RatioLeverage Ratio Year 2011 Year 2010 Year 2009Debt Ratio=Total Liability/TotalAsset x10067.9912% 65.5174% 82.6487%Debt-Equity Ratio=Long-TermDebt/Equity0.6971 x 0.7246 x 0.7877 xTimes InterestEarned=Earning BeforeInterest &Tax/InterestExpense72 x 62 x 60 x
Leverage Ratio• Leverage Ratio is satisfied.• Debt Equity Ratio is slightly decreased year by year :0.7877 times in year 2009,0.7246 times in year 20100.6971 times in year 2011.• Every RM 1 of equity will supported by RM 0.70 oflong-term debt compare to RM 0.79 in year 2009.• Leverage Ratio measures the amount of debt beingused to support production and the ability of thefirm to settle its debt properly.
Profitability RatioProfitability Ratio Year 2011 Year 2010 Year 2009Gross Profit Margin=Gross Profit/Salesx10032.8041% 33.3876% 34.2258%Operating ProfitMargin=operatingincome/sales x10011.8870% 11.5675% 11.7584%Net Profit Margin=Profit aftertax/Sales x1009.7065% 9.7210% 9.3956%
Profitability RatioProfitability Ratio Year 2011 Year 2010 Year 2009Return of Asset=Net profit AfterTax/TA x10022.7886% 22.0050% 20.5401%Return On Equity=Net Profit AfterTax/Equity x10071.2014% 63.8146% 62.0250%
Profitability RatioProfitability Ratio is satisfied. ROA is increased year byyear:20.5401% in year 2009,22.0050% in year 201022.7886% in year 2011.Every RM 1 of total assets generated RM 0.23 of netprofit after tax compare to RM 0.20 in year 2009.Profitability Ratio measures a firm’s return byconsidering company profits to sales, assets, andequity.
Conclusion• Overall ratio is satisfied.• Asset is managed very well.• Used debt to support production & settleits debt properly.• Gain the positive return.