The attached presentation is about the ratio analysis of Unilever 2016 and 2017. which gives a quick understanding of company analysis.

1. BUSINESS FINANCE
PRESENTATION
PREPARED BY
RAHAT HIMMAT ALI (16K-2757)
MUHAMMAD BILAL (16K-2736)
SADIA NAZIR (16K-2735)
MUHAMMAD ISHTIAQUE (16K2742)

4. financial Ratio
Analysis of Unilever
2017 and 2016.

5. FINANCIAL RATIO ANALYSIS

9. LIQUIDITY RATIO
1. Current ratio
= Current assets/ current liabilities
2017
=9416/7202
= 1.30 times
2016
= 9552/6652
= 1.43 times
Interpretations:
In 2016, uniliver used its cash effectively and had strong liquidity (1.43) as
compare to 2017 (1.30). Also in 2016, uniliver had greater ability than 2017 to
meet its short term obligations. However, the profit was higher than 2016
because lesser the liquidity shows the greater profit.

10. GRAPHICAL REPRESENTATION OF CURRENT
RATIO
1.2
1.25
1.3
1.35
1.4
1.45
Current Ratio
2017
2016

11. QUICK RATIO
= Current assets – inventories /Current liabilities
2017
9416 – 2362/7202
= 0.97 times
2016
9552 – 2528/6652
= 1.05 times
Interpretations:
In 2016, uniliver had strong liquidity ( 1.05), but the profit was less.
Similarly, in 2017 it had a less liquidity (0.97) and it showed the
highest profit.

12. GRAPHICAL REPRESENTATION OF QUICK RATIO
0.92
0.94
0.96
0.98
1
1.02
1.04
1.06
quick ratio
2017
2016

13. ASSETS MANAGEMENT RATIOS
3. Inventory turn over ratio
= sales/inventories
2017
34487/2362
= 14.60 times
2016
33491/2528
= 13.24 times
Interpretation:
In 2016, uniliver was holding less inventory (13.40) as compare to
2017.Due to less production, it represents investment with law
rate of return in 2017.

14. 12.5
13
13.5
14
14.5
15
Inventory Turn over ratio
2017
2016

15. 4. FIXED ASSETS TURNOVER RATIO
= Sales/net fixed assets
2017
=34487/5340
= 6.45times
2016
=33941/4368
=7.667times
Interpretation:
Uniliver used it plant and equipment very effectively in 2017 that is 7.67
times. On the other hand, in 2016 it used plant and equipment 6.45
times effectively. It also indicates that in 2017 the company used its
fixed assets very intensively as compare to 2016.

16. GRAPHICAL REPRESENTATION OF FIXED ASSETS
TURN OVER RATIO
5.8
6
6.2
6.4
6.6
6.8
7
7.2
7.4
7.6
7.8
Fixed assets turn over ratio
2017
2016

17. 5.TOTAL ASSETS TURN OVER RATIO
= sales/total assets
2017
=34487/14751
=2.33 times
2016
= 33491/4368
=2.40 times
Interpretation:
Total turn over ratio indicates that uniliver was generating
sufficient volume of business in both year. In 2017 it had a
volume of 2.33 times to generate business. In order to
generate lager volume it should increase the sales and some
assets should be disposed.

18. TOTAL ASSETS TURN OVER RATIO
2.28
2.3
2.32
2.34
2.36
2.38
2.4
2.42
Total assets turn over ratio
2017
2016

19. 6. AVERAGE COLLECTION PERIOD
= receivables/sale/365
2017
=928/34487/3658
=9.82 days
2016
= 1064/33491/365
= 11.5 days
Interpretations:
In 2017, it indicates that the average length of time, uniliver wait
after making a sale before it receive cash was 9.82 days.
Where as in 2016, it was 11.5 days. It also showed that in
2017, uniliver had increased the sales.

20. GRAPHICAL REPRESENTATION OF DEBT RATIO
8.5
9
9.5
10
10.5
11
11.5
12
Average collection period
2017
2016

21. 7. DEBT RATIO
= total liability/total assets
2017
= 8261/14751
= 0.56=56%
2016
=7641/13920
= 0.54=54%
Interpretation:
It shows the position of a uniliver, indicates amount of other people’s
and money being used to generate profit. In 2017, it had higher
ratio and greater amount of others was used to generate 56%.
Where as in 2016, the debt ratio of uniliver was 54%.

22. GRAPHICAL REPRESENTATION OF DEBT RATIO
53
53.5
54
54.5
55
55.5
56
56.5
debt ratio
2017
2016

23. 8.TIME INTEREST EARNED RATIO
= EBIT/Interest charge
2017
= 6155/0.22
=279.77 times
2016
=6298/15
=419.86times
Interpretation
Times interest earned (TIE) or interest coverage ratio is a
measure of a company's ability to honor its debt payments.
Unilever had 279.77 times ability to meet its debt in 2017, where
as it was 419.86 times in 2016. Unilever had higher ability to meet
its debt in 2016.

24. GRAPHICAL REPRESENTATION OF TIMES
INTEREST EARNED RATIO
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
times interest earned ratio
2016
2017

25. PROFITABILITY RATIOS
9.Profit margin sale
= Net income/Sales
2017
= 35013/34487
= 1.01 times
2016
=34055/33491
=1.04 times
Interpretation:
Net income per dollar of sales of unilever was 1.01 times in 2017 and it was
1.04 times in 2016. A higher net profit margin means that a company is
more efficient at converting sales into actual profit.

26. GRAPHICAL REPRESENTATION OF PROFIT
MARGIN SALES
0.995
1
1.005
1.01
1.015
1.02
1.025
1.03
1.035
1.04
1.045
profit margin sales
2017
2016

27. 10. RETURN ON TOTAL ASSETS
= Net income/Total sales
2017
=35013/14751
= 2.37times
2016
= 34055/13920
=2.446 times
Interpretations:
Total return on assets of unilever was 2.37 times in 2017 and it
was 2.446 times in 2016. in 2016 it had a higher return on
total assets as compare to 2017.

28. GRAPHICAL REPRESENTATION OF RETURN ON
TOTAL ASSETS
2.32
2.34
2.36
2.38
2.4
2.42
2.44
2.46
2.48
Return on total assets
2017
2016

29. 11. RETURN ON EQUITY
= net available for common stock /total equity
2017
= 35013/6520
= 5.38 times
2016
= 34055/6279
= 5.42 times
Interpretations:
This is a most important ratio in net income to equity, which
measures the return on equity. In 2017, unilever had 5.38
times return on its equity and it was 5.42 times in 2016. In
conclusion it had higher return on its equity in 2016 which is
(5.42)

30. GRAPHICAL REPRESENTATION OF RETURN ON
EQUITY
5.36
5.37
5.38
5.39
5.4
5.41
5.42
5.43
return on equity
2017
2016

31. 12.GROSS MARGIN RATIO
Gross profit/sales
2017
= 17.72%
2016
=16.97%
Interpretation:
Unilever gross profit ratio in 2017 was 17.72%
and it was 16.97% in 2016.

33. GRAPHICAL REPRESENTATION OF GROSS
MARGIN SALES
16.4
16.6
16.8
17
17.2
17.4
17.6
17.8
Gross margin sales
2017
2016

34. 13. GROSS OPERATING PROFIT RATIO
=Operating profit/sales
2017
= 6155/34487
= 17.8%
2016
=5977/33491
= 17.8%
Interpretation:
Unilever had same gross operating profit
in both years (2017 and 2016) and it was 17.8%. Moreover, it
showed that business was successful run in term of profit in both
years.

35. GRAPHICAL REPRESENTATION OF GROSS
OPERATING PROFIT
0
2
4
6
8
10
12
14
16
18
20
Gross operating profit
2017
2016

36. MARKET BOOK VALUE RATIO
14. PRICE EARNING RATIO
= Price per share (PPS)/Earning per share (EPS)
2017
=43.77%
2016
=45.40%
Interpretation:
Unilever had 43.77% price earning ration in 2017 and it was 45.40%
in 2016. it tells that unilever had higher ratio in 2016. The PE
ratio shows current investor demand for a company share. A high
PE ratio generally indicates increased demand because
investors anticipate earnings growth in the future.

37. GRAPHICAL REPRESENTATION OF PRICE
EARNING RATIO
42.50%
43.00%
43.50%
44.00%
44.50%
45.00%
45.50%
46.00%
price earning ratio
2017
2016

38. 15.EARNING PER SHARE RATIO
= net income available for common stock/no. of outstanding
shares
2017
20.79 %
2016
= 19.19%
Interpretation
Unilever had 20.79% earning per share ratio and it was
19.19% in 2016. It had higher ratio in 2017.

40. 18.00%
18.50%
19.00%
19.50%
20.00%
20.50%
21.00%
Earning per share
2017
2016

41. MARKET BOOK VALUE RATIO
=price per share (PPS)/ Book value(B.V)
2017
=3.59times
2016
=69.69times
Interpretation:
Market book value of unilever in 2017 was 3.59times and it was
69.67 times in 2016. The market-to-book ratio helps a company
determine whether or not its asset value is comparable to the
market price of its stock. It is best to compare Market to Book
ratios between companies within the same industr

42. 0
10
20
30
40
50
60
70
80
merket book value ratio
2017
2016
0
10
20
30
40
50
60
70
80
2017
2016

43. THANK YOU