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 |
Reason for increase in net profit in contrast to decrease in sales
Decrease in sale may be due to
1. Reduction in either quantity sold or reduction of sale price
2. Inventory at the end of the period might have increased with comparison to inventory at the beginning of the period
In other words, Purchases towards the end of the period are higher
Now, due to any or some of the above, Trading Operating Profit has also reduced in terms of figure and in terms of % also.
Next comes administrative, marketing, etc cost and then Net Profit is arrived at.
Increase in Net Profit can be attributed to following factors
1. Overall reduction in administrative expenses
2. Short provision of depreciation and or expenses
3. Increase in other income
Thus, it is possible due to all or any or some of the above reasons, sales of Nestle SA have decreased in 2014 whereas net profit has increased..
3. Why do you think sales decreased from 2013 to 2014 and yet net profit increased?...
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