unilever - Unilever financial ratio Here is the financial...

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Unilever financial ratio Here is the financial ratio analysis of Unilever Pakistan Limited for the year 2010. The ratios would be compared with that of the previous years to explain the changes the company’s performance. The ratios would also be compared with the industry average in order to evaluate the company’s performance with that of the industry. Liquidity Ratios: Current Ratio Current assets = 7,426,964,000 = 0.8 Current Liabilities 8,973,709,000 For this year current ratio is 0.8 which shows that the company would have still left with current liability to pay, if it sells all its current assets to cover its current liabilities. Company is in risky position. It is short of liquidity to pay for current liabilities. As compare to last year, the current ratio is same as of this year i.e. 0.8. The reason that the ratio is same for both years is that there has been increase in current asset and current liabilities have increased in same proportion. Quick Ratio Current assets – Inventories = 7,426,964,000 - 3,881,007,000 = 0.4 Current Liabilities 8,973,709,000 0.4 ratio shows that the company current liability is two times its current asset (excluding the inventory). The situation for company is under risk. Comparing this ratio with its last year ratio i.e. 0.3. There we have seen little progress in it but it doesn’t mean that we have reduced our liabilities. This is due to change in inventory. As inventory has decreased in a year and the current asset (excluding inventory) has increase so this show little progress in the quick ratio in one year time. Financial Leverage Ratios Debt to Equity Ratio Total Debt = 9,928,472,000 = 2.7 Shareholder’s Equity 3,560,318,000 This ratio is very much high for the company. It shows that for every 1 rupee of equity there is 2.7 rupee of debt financing. This means that the ¾ of company assets are financed by the debt financing. This is very unfavorable situation for the company. If we see it with last year debt to equity ratio i.e. 2.4 the situation for company is much riskier then last year. The ratio has increased because the company borrows more from the creditors as compare to the shareholders investment.
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Debt to Total-Assets Ratio Total Debt = 9,928,472,000 = 0.7 Total Assets 13,501,107,000 This ratio has showed that contribution in asset by debt financing. It shows that 70 percent of asset is financed by debt. This ratio is quite high, more then half of the financing due to debt financing and only 30 percent of assets are financed by shareholders. Comparing it to its last year ratio i.e. 0.7. This is same for both the years because there is increase in assets. This increase is financed by both the debt financing and the shareholders which results in increase in both in same proportion. Long Term Debt to Total Capitalization Ratio
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unilever - Unilever financial ratio Here is the financial...

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