Nestle - An Assessment of Financial Performance, Sustainability and Strategy

Topics: Financial ratio, Financial statements, Sustainability Pages: 36 (6353 words) Published: December 13, 2014


Nottingham University Business School
MBA Programme

Accounting and Finance
N14M01

Nestle Malaysia Bhd
An Assessment of Financial Performance,
Sustainability and Strategy

Sirsanath, BANERJEE, ID : 014803
Alwyn Chee Hua, KOAY, ID : 015855
Shen Yang, KUAH, ID : 016302
Ling Kim, LEE, ID : 015871
Shing Loo, LIM, ID : 016301

(Word count 4223)
COPY 1

Nottingham University Business School
MBA Programme

Accounting and Finance
N14M01

Nestle Malaysia Bhd
An Assessment of Financial Performance,
Sustainability and Strategy

Sirsanath, BANERJEE, ID : 014803
Alwyn Chee Hua, KOAY, ID : 015855
Shen Yang, KUAH, ID : 016302
Ling Kim, LEE, ID : 015871
Shing Loo, LIM, ID : 016301

(Word count 4223)
COPY 2

Executive Summary
This report serves to outline our review and findings of the company’s financial position and performance, strategic and sustainability initiatives within the packaged foods of the F&B industry within Malaysia, in order to provide recommendation for future improvements. The main findings of the review are as follows:

Overview:
Volatile global economy since 2008 has given rise to unstable growth in industries worldwide, nonetheless, Malaysia and the F&B industry are generally resilient towards this volatility, and the general outlook for future performance is on a moderately positive direction. Our SWOT analysis indicates multiple strengths and concurrent opportunities and threats to be addressed, while the Porter’s 5 Forces Analysis has shown that the industry outlook is generally favourable towards our company, largely due to our strong brand name and position.

Key Financial Ratio Analysis:
Overall, the financial ratios fall within an average industry performance, however, more attention should be directed towards the liquidity position which could potentially affect the overall performance in the near term. Generally operating efficiencies and return on equities are well-managed for maximising shareholder’s value.

Corporate Governance:
Corporate governance is well addressed within the company although more efforts towards transparency in terms of figure justifications in the company financial statements should be strictly adhered to boost shareholder’s confidence.

Sustainability:
We have pioneered the Malaysian F&B manufacturing industry in terms of implementing GRI reporting practices, while actively integrating CSR activities into our value chain. This has significantly added value to our business performance in terms of operational efficiencies and added brand equity.

Moving forward, we have highlighted the recommendations for future improvements which are outlined at the end of the report. Contents
List of Figures3
List of Tables3
List of Abbreviations4
1)Introduction5
2)Environmental Overview5
2.1) Global and Malaysian Economy Outlook5
2.2) The Industry Outlook6
3)Company’s Information6
3.1) Company’s Background6
3.2) Product and Service Offerings and Segmental Analysis7 3.3) Industry Analysis8
3.4) SWOT Analysis10
3.5) Future Prospects11
4)Quantitative Analysis (Financial Ratios)12
4.1) Profitability Ratio12
4.2) Activity Ratio14
4.3) Liquidity Ratio16
4.4) Leverage Ratio18
4.5) Checklist of Ratio19
4.6) Trend Analysis20
4.7) Common Size Analysis21
5)Qualitative Analysis21
5.1) Integrated Reporting – Creating Shared Value21
5.1)Corporate Governance23
5.2)Earnings Management24
5.3) Sustainability24
6)Conclusion and Recommendations26
7)Reference28

List of Figures
Figure 1 Nestlé Operative Functions5
Figure 2 Nestlé Sales by Product6
Figure 3 Nestlé Channel Sales7
Figure 4 Porter’s 5-Forces for Nestlé7
Figure 5 Return on Equity Ratio11
Figure 6 Gross Operating Margin12
Figure 7 Profit Margin Ratio12
Figure 8 Average Collection Period13
Figure 9 Average Age of Payables14
Figure 10 Average Number of Days in Stock14...
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