Analyst report Uniliver PLC Essay Example | Topics and Well Written Essays - 1000 words

Analyst report Uniliver PLC - Essay Example The industry has the unique quality of having a target market of the entire global population of 7.05 billion people (Census, 2012). Unilever is a company that has achieved great success in the industry with a market penetration of 28.36% or two billion customers. The firm is positioned as one of the leading companies in the industry. This report will provide an overview of the company as well as financial analysis of Unilever for the fiscal year 2011 in order to determine whether the company is worth investing ?1 million. One of the mail analytic tools used in the paper is ratio analysis. Company Profile: Unilever Unilever was founded in the 1890s, but the actual Unilever brand was not created until 1930. The company is dedicated to the nutritional and well being industry. The firm has over 400 branded products. Some of the most popular brands of the company are Dove, Knorr, Lipton, Hellmann, and Axe. The corporate vision of the company is, â€Å"Helping people to look good, feel g ood and get more out of life† (Unilever, 2012). One of the keys to the company’s success has been its product innovation. Innovation is fostered by investing in research and development initiatives. The company has a network of scientists located across the world. The company spends over â‚ ¬1 billion a year in R&D. In 2010 the company was named advertiser of the year by Cannes Advertising Awards. The products of the company are sold across 190 countries. The firm has over two billion customers worldwide. Unilever generates 55% of its sales from emerging economies including China, Brazil, India, and Indonesia (Unilever, 2012). Dove is one of the most successful brands of the company with sales of over â‚ ¬3 billion yearly. The organization has 171,000 employees. The firm believes in the use of diversity. A lot of the firm’s products target the children population to increase their quality of life. Financial Analysis – Unilever In 2011 Unilever genera te revenues of â‚ ¬46,467 million. The revenues of the company increased by 16.68% in comparison with 2009, while it increased by 4.98% in comparison with 2010. The net income of the company was â‚ ¬4,623 million in 2011. The net income of the firm went up by 0.54% between 2010 and 2011. The cash account of the company at the end of 2011 had a balance of â‚ ¬3,484 million. Unilever’s total assets at the end of 2011 were â‚ ¬47,512 million, while its current assets were â‚ ¬14,291 million. In 2011 the total liabilities of the company were â‚ ¬32,591 million. Unilever’s total equity at the end of 2011 was â‚ ¬14,291 million. A ratio analysis of the company is illustrated below: Financial Ratios 2011 Net margin 9.95% Operating margin 13.84% Earnings per share (EPS) â‚ ¬ 1.51 Return on assets (ROA) 9.73% Return on equity (ROE) 30.98% Current ratio 0.80 Quick acid ratio 0.54 Working capital -â‚ ¬3638 million Debt to equity 218.42% Debt ratio 68.60 % The net margin of Unilever during 2011 was 9.95%, while its operating margin was 13.84%. Both financial metrics measure the profitability of the business. The net margin reflects the absolute net profitability of the business. The formula to calculate net margin is net income divided by total sales (Besley & Brigham, 2000). Unilever had earnings per share of â‚ ¬1.51. The earnings per share are the portion of a company's profit allocated to each