339 Based on this data, answer these questions: 3. Why do you think sales decrea

Question

339

Based on this data, answer these questions:

3. Why do you think sales decreased from 2013 to 2014 and yet net profit increased?

Your answer should include these main points:

analyze your current system using the three dimensions of convenience, correctness, and costs of implementation; correlate your current company’s product cost design abilities by answering the four key product design questions; and employ strategies for how businesses can better present financial statements for other businesses or financial institutions.

Nestle SA In millions (except for data per share and employees) 2013 and 2014 2013 2014 Results Sales 92 158 91 612 CHF   92,158 CHF   91,612 Trading operating profit             14,047             14,019 as % of sales 15.24% 15.30% Profit for the period attributable to shareholders of the parent (Net profit) 10015 14456 as % of sales 10.87% 15.78% Balance sheet and Cash flow statement Equity attributable to shareholders of the parent             62,575             70,130 Net financial debt             14,690             12,325 Ratio of net financial debt to equity (gearing) 23.48% 17.57% Operating cash flow             14,992             14,700 as % of net financial debt 102.06% 119.27% Free cash flow             10,486             14,137 Capital expenditure               4,928               3,914 as % of sales 5.35% 4.27% Data per share Weighted average number of shares outstanding (in millions of units)               3,191               3,188 Basic earnings per share                 3.14                 4.54 Dividend as proposed by the Board of Directors of Nestlé S.A.                 2.15                 2.20 Market capitalisation, end December 31st 208,279 231,136 Number of employees (in thousands) 333

339

Explanation / Answer

1. Nestle S.A.'s financial position has been increased from 2013.

2. Following points are in support of the above solution:

a. Operating profit as a percentage of sales has been increased from 15.24 % to 15.30 % which meand that Nestle is able to reduce its operatinf expense.

b. Financial debt to equity ratio has been decreased from 23.48 % to 17.57 % which means that Nestle has increased the percentage of equity which is positive sign for the company.

c. Earning per share has been increased significantly.

3.

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