Documente Academic
Documente Profesional
Documente Cultură
Analysis
Nestle VS Engro Foods
Taimur Zaib
BBS/FA13/022/LHR
Nov 10, 2014
Submitted to
Operating expense of nestle (1064233) engro (208902) means they use more
directions to run their business. Nestle operating income is also more nestle is a well-known
brand and they generate high income.
Nestle have more tax because they have more products that is (1834, 507) whereas
engro products are limited and their tax is (471,687).
Nestle have more no of shares and more earning. so Earning per share of nestle is also
more that is 102.94 as compare to engro that is 1.22
So after analysis of income statement we see that nestle have more sales and more profit
than engro which shows that nestle company is good than engro.
Current Ratio
Current ratio tells us the short term solvency of the firm and tells the ability of
the firm to repay its short term obligations. In nestle the firm has 0.80 ability to repay
against the $ 1 loan and Engro has 1.83 so this implies that Engro food has more
ability to repay its short term obligations.
Quick Ratio
Quick ratio measures the firms ability to pay off short term obligations
without relying on the sale of inventory. Nestle has the quick ratio of 0.38 whereas
Engro foods has 0.95 chances of paying off its short term obligations without relying
on the level or sales of inventory.
Return on Investment
How much a firm is returning to its stockholder only in the case if the firm is
earning profit? Nestle have return on investment ratio 0.13 or 13% whereas Engro
foods has 0.05 or 5% means nestle is returning more than Engro foods so it is better to
invest in nestle.
12.3Activity Analysis
Conclusion
After all the findings, it is concluded that financial ratios are the basic and
most important part of any business. It describes the firms financial position. As the
data indicates that NESTLE is an international brand and has expanded its business on
the large geographical area and also offers the large range of products, but on the
other side ENGRO food offers the limited range of the products and most of them are
dairy products.
From the financial statements it is clear that the financial position of the
NESTLE is far better than ENGRO as it is more preferred by the customers and also
an internationally distributed. It also has less risk. It gives more return because it gains
more profit than ENGRO. On the other hand ENGRO deals with the limited products
in a limited geographical area but on the basis of financial ratios ENGRO has a better
financial position and also has an opportunity to expand its business. Both the
companies have some opportunities and threads and they need to work on it.
References
1.
2.
3.
4.