Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 1

Contents
INTRODUCTION: (UNILEVER) ............................................................................................... 3 Our Vision: ........................................................................................................................... 4 Our People: .......................................................................................................................... 4 Unilever Corporate Purpose: ............................................................................................... 5 Purpose and Principles: ....................................................................................................... 5 Common Size Financial Statements: ................................................................................... 6 Types of Common Size Financial Statement: ................................................................... 6 Common Size Income Statement: ....................................................................................... 6 Common Size Balance Sheet: .............................................................................................. 7 Advantages And Disadvantages of Common Size Statement: ............................................ 7 Disadvantages of Common Size Statement: .................................................................... 7 Analysis: ............................................................................................................................... 8 Income Statement: ........................................................................................................... 8 Net Profit:...................................................................................................................... 8 The companys net profit in 2010 as in the comparison of 2009 but slant decrement in 2011. ......................................................................................................................... 8 Balance Sheet: ..................................................................................................................... 8
Assets: ......................................................................................................................................... 8 Liabilities:................................................................................................................................... 10 Equity:........................................................................................................................................ 11 Conclusion: .................................................................................................................................... 12

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 2

INTRODUCTION: (UNILEVER)
No matter who you are, or where in the world you are, the chances are that our products are a familiar part of your daily routine. Every day, around the world, people reach for Unilever products Unilever Pakistan (70.4% Unilever equity) is the largest FMCG Company in Pakistan, as well as one of the largest multinationals operating in the country. Unilever Pakistan began its operations in 1948, the Company has been closely connected to the Pakistani people and its brands have been a fundamental feature in their daily lives. In fact, the nature of our business enables our brands to be the pulse and heartbeat of the 164 million people in Pakistan. Unilever is one of the worlds leading suppliers of fast-moving consumer goods. We aim to provide people the world over with products that are good for them and good for others.

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 3

Our Vision:
1. We work to create a better

Executive come from six different countries.

future every day. 2. We help people feel good, look good and get more out of life with brands and services that are good for them and good for others. 3. We will inspire people to take small everyday actions that can add up to a big difference for the world. 4. We will develop new ways of doing business that will allow us to double the size of our company while reducing our environmental impact.

Our People:
People are the heart of our business.

We aim to create an environment

in which all employees can fulfil their potential. Unilever is one of the worlds most culturally diverse companies. Our Board is made up of six nationalities and the nine members of the Unilever Pakistan Air force Karachi Institute of Economics and Technology Fall2012
Page 4

Unilever Corporate Purpose:

Our deep roots in local cultures and markets around the world give us our strong relationship with consumers and are the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers a truly multi-local multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, and to a willingness to embrace new ideas and learn continuously. To succeed also requires, we believe, the highest standards of corporate behaviour towards everyone we work with, the communities we touch, and the environment on which we have an impact. This is our road to sustainable, profitable growth, creating long-term value for our shareholders, our people, and our business partners.

Purpose and Principles:

Our corporate purpose states that to succeed requires "the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact." Always working with integrity Positive impact Continuous commitment Setting out our aspirations Working with others

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 5

Common Size Financial Statements:

Companys financial statement, which displays all items as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company. The values on the common size statement are expressed as percentages of a statement component such as revenue. While most firms don't report their statements in common size, it is beneficial to compute if you want to analyze two or more companies of differing size against each other. Formatting financial statements in this way reduces the bias that can occur when analyzing companies of differing sizes. It also allows for the analysis of a company over various time periods, revealing, for example, what percentage of sales is cost of goods sold and how that value has changed over time.

Types of Common Size Financial Statement:

(1)Common Size Balance Sheet (2)Common Size Income Statement:

Common Size Income Statement:

An income statement in which each account is expressed as a percentage of the value of sales. This type of financial statement can be used to allow for easy analysis between companies or between time periods of a company.

Common size income statement analysis allows an analyst to determine how the various components of the income statement affect a company's profit.

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 6

Common Size Balance Sheet:

A company balance sheet that displays all items as percentages of a common base figure. This type of financial statement can be used to allow for easy analysis between companies or between time periods of a company.

The image above illustrates the difference between a regular balance sheet and a common size balance sheet. In the normal balance sheet, account values are expressed in dollar terms, while in the common size one, each value is listed as a percentage of total assets. This is also done for liabilities, where each liability account is a percentage of total liabilities.

Advantages And Disadvantages of Common Size Statement:

Advantages of Common Size statement: It reveals Sources and Application of Funds in a nutshell which help in taking decision. If common size statements of 2 or more years are compared it indicate the changing proportion of various components of Assets, Liabilities, Cost, Net Sale & Profit. When Inter Firm Comparison is made with the help of Common size statement it helps in doing corporate evaluation and Ranking. Disadvantages of Common Size Statement: No Established Standard Proportion: Common Size Statements are regarded as useless as there is no established standard proportion of an asset to the total asset or an item of expense to the net sales. Pakistan Air force Karachi Institute of Economics and Technology Fall2012
Page 7

 Consistency Required: If Financial Statement of a Particular business organization are not prepared year after year on a consistent basis comparative study of common size statement will be misleading.

Analysis:
Income Statement:
A financial statement that measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year. It is also known as the "profit and loss statement" or "statement of revenue and expense".

Net Profit:
In business, what remains after subtracting all the costs (namely business, depreciation, interest, and taxes) from a company's revenues? Net income is sometimes called the bottom line. It is also called earnings or net profit. For an individual, gross income minus taxes, allowances, and deductions. An individual's net income is used to determine how much income tax is owed.

The companys net profit in 2010 as in the comparison of 2009 but slant decrement in 2011.

Balance Sheet:
Assets:
Non - Current Assets: Noncurrent assets are capitalized rather than expensed,
meaning that the company allocates the cost of the asset over the number of years for which the asset will be in use, instead of allocating the entire cost to the accounting year in which the asset was purchased.

Current Assets: A balance sheet item which equals the sum of cash and cash
equivalents, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that could be converted to cash in less than one year.

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 8

A company's creditors will often be interested in how much that company has in current assets, since these assets can be easily liquidated in case the company goes bankrupt.

Assets
80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Non- current Assets Current Asset years 2010 years 2011

The non-current asset in 2010 was 69.56% as it increases to 69.92% in 2011. The element in balance sheet which increases and decreases in the balance sheet of 2011 the companys intangible assets increases by 2.41% in 2011, deferred tax assets which decreases by 0.58%, Property, plant and equipment decreases by 0.61%, the companys goodwill also decreases in year 2011 by 0.57% and its financial assets also decreases by in 2011 by 0.23%. Thus above mention all the fundamentals increases in the year 2011 which decreases the current assets of the company. In current assets fundamentals also fluctuate in year 2011 as inventories decreases by 0.78%, the cash and cash equivalents increases in 2011 and its other financial assets also increases.

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 9

Liabilities:
40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Non-Current Liablities Current Liabilities years 2011 years 2010

Liabilities

Current liabilities: A balance sheet item which equals the sum of all money owed by a company and due within one year also called payables or current debt. Non current liabilities: Debt not due to be paid within the next year. The non-current liabilities increases in 2011 by 0.53% and the current liabilities are increases by 4.69% because the companys current financial debts are increased by 6.76% in 2011.

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 10

Equity:
38.00% 37.00% 36.00% 35.00% 34.00% 33.00% 32.00% 31.00% 30.00% 29.00% 28.00% 2011 2010 2011 2010

Equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists. In an accounting context, Shareholders' equity (or stockholders' equity, shareholders' funds, shareholders' capital or similar terms) represents the remaining interest in assets of a company, spread among individual shareholders of common or preferred stock. The companys equity decreases by 5.22% in the year 2011, because the companys shareholder equity decreases.

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 11

Conclusion:
The common size statement helps to do the analysis of the company, at what position the company stands on the basis of shareholders performance and its profit oriented area. As unilever is the multinational company, which makes so, many brands, above we have done the analysis that at what stage company stands.

Pakistan Air force Karachi Institute of Economics and Technology Fall2012

Page 12