LEVERAGE RATIO 2021 2020 Increase or Decrease Debt to Equity Ratio 0.85 0.83 3.29% Debt to Total Assets Ratio 0.33 0.30 7.07% Interest Coverage Ratio 13.38 16.93 -20.98% Debt-to-Equity Ratio: A slight increase in the debt-to-equity ratio indicates that Nestlé has become more dependent on debt financing relative to equity in 2021. Debt-to-Total Assets Ratio: A 3.33% increase in this ratio indicates that a larger share of Nestlé's assets is being financed through debt in 2021. Interest Coverage Ratio: A decrease in the interest coverage ratio signifies that the company is less able to meet its interest obligations from its operating income in 2021 compared to 2020 PROFITABILITY RATIO 2021 2020 Increase or Decrease Gross Profit Margin 47.79% 49.05% -2.57% Operating Profit Margin 14.00% 16.88% -17.0% Net Profit Margin 19.41% 14.50% 33.85% Return on Assets (ROA) 12.15% 9.86% 23.19% Return on Equity (EOE) 31.81% 26.77% 18.5% Gross Profit Margin: A slight decrease in the gross margin indicates a small rise in the cost of goods sold, which may impact operational efficiency. Operating Profit Margin: A 17.26% decline indicates that rising costs or inefficiencies have affected Nestlé's capacity to convert sales into operating profit. This suggests that the company may be facing challenges in managing its expenses effectively, which could hinder its profitability despite sales performance. Net Profit Margin: A significant 33.85% increase indicates enhanced overall profitability, likely due to improved cost control measures or an increase in non operating income. Return on Assets (ROA): An improvement in ROA indicates that Nestlé is utilizing its assets more effectively to generate profits. Return on Equity (ROE): The increase in ROE indicates that Nestlé is providing greater value to its shareholders from equity in 2021. GROWTH RATIO 2021 2020 %Increase or Decrease Sales Growth Rate 87,088 54,343 3.25% Net Sale: 15,119 14,903 1.45% Earning Per Share 6.06% 4.29 1.77% Dividend Per Share 2.80% 2.75% 5.00% Sales Growth Rate:A positive growth rate in 2021, following a decline in 2020, indicates that Nestlé has bounced back from the downturn, achieving an improvement of 3.25%. Net Sales: The net sales grew by 1.45% in 2021 (from 14,903 to 15,119), indicating a steady but moderate improvement in overall revenue generation. Earnings Per Share (EPS): EPS by 1.77% (from 4.29% to 6.06%), suggesting enhanced profitability per share, potentially due to better cost management or increased net income. Dividend Per Share (DPS): With a 5.00% rise (from 2.75% to 2.80%), shareholders received higher returns, reflecting the company's confidence in its financial health and its commitment to rewarding investors. V. Statement of Objectives 1. Long-Term Objective: To continuously improve the product quality and alm for reduced environmental Impact by 30% of Nestle's waste within the first two years. d. Short-Term Objective 1: Reformulate Existing Products to reduce sugar, salt and fat content by 10% within the first 6 months to meet consumer demand for healthier options e. Short-Term Objective 2: Improvement for the Research and Development of Nestle's existing product lines to produce new and Improved products within the next 8 months 1. Short Term Objective 3: Aiming to reduce packaging waste by 12% to 14% within the last 8 months. 2. Long Term Objective: To attain an 8% increase in sales for Nestle's food products within 1 year in Europe and America d. Short Term Objective 1: Conducting comprehensive market research to Identify emerging consumer preferences and trends which is crucial for Nestle to adapt to various circumstances and challenges the company may encounter within 4 months. e. Short-Term Objective 2: Expanding the offerings of different products that Nestle offers by having different options like plant- based food or drinks that also alligns with its Proposed Mission within 6 months. 1. Short-Term Objective 3: Strengthening the marketing tactics In order to Increase the sales growth and the visibility of the company within two months. 3. Long-Term Objective: Increase Nestle's percentage of plant-based products in their portfollo to 25% by 2025 (in the next two years). a. Short-Term Objective 1: To Reintroduce existing products to transition into organic-based consumables by 8% within the next three years to meet consumer demand for healthier options in the next 6 months. b. Short-Term Objective 2: Introduce at least five (5) new plant-based products across various regions (Asia, Europe & America) each year for the next 10 months. c. Short-Term Objective 3: Increase and focus on Research and Development for accessible healthier food Ingredient alternatives to alm 15% In newly developed healthler products by the end of 2025 (8 months I. Financial Ratio Analysis LIQUIDITY RATIO Current Ratio Quick Ratio 2021 2020 Increase or Decrease 0.98 0.56 0.65 0.6 13.95% 13.00% Current Ratio: An increase signifies enhanced liquidity, indicating that Nestlé is better equipped to meet its short-term obligations.short-term liabilities. Quick Ratio: An increase also implies stronger short-term financial stability, particularly regarding liquid assets. ACTIVITY RATIO 2021 2020 % Increase or Decrease Fixed Assets Turnover 1.09 0.94 16.28% Total Assets Turnover 0.63 0.65 -7.96% Accounts Receivable Turnover 7.95 7.85 -1.29% Average Collection Period 45.90 46.50 -1.30% Fixed Assets Turnover: This ratio evaluates how effectively Nestle is utilizing its fixed assets to generate revenue. A 16.28% Increase in this ratio may indicate a shift in the efficiency of asset usage for business operations. These metrics are critical for assessing various aspects of Nestlé's operational efficiency Total Assets Turnover: Nestlé's Total Assets Turnover has decreased by 7.98%, suggesting that the company may have over-invested in assets during the period from 2020 to 2021. This decline indicates a less efficient use of its assets to generate revenue, which could reflect challenges in asset management or changes in market conditions affecting sales performance. Accounts Receivable Turnover: This illustrates how Nestlé is managing its collection of payments from customers. A 1.29% decrease indicates that the company is struggling with debt collection efficiency. Average Collection Period: A decrease of 1.30% indicates that Nestlé's clients are taking less time to settle their bills. This suggests that Nestlé is becoming more effective at collecting the money owed to it in a shorter time frame.