Essay Example on Analysis of the Financial Statements of Unilever Pakistan

Acknowledgement

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For the wisdom and knowledge of writing this research report, I thank God the creator. Thank you for the breath of life and may all glory and honor be your name. I wish to thank the staff of the Coventry University for the provision of all necessary materials for conducting this research. May the Almighty God bless each one of you and may you continue helping future generations. I wish also to acknowledge my supervisors in this entire period of research for the guidance they accorded me. My special thanks also go to my friends and family members for the moral support they shown me when undertaking this research. For all those who played a part in ensuring the success of this research, I wish to recognize you and say thank you for the support.

Abstract

This research was structured to conduct an analysis of the financial statements of a company operating in the Fast Moving Consumer Goods in the Pakistan Market. The chosen company that the research has been undertaken on is Unilever Pakistan.

The research focuses on the importance of financial ratios in assessing the performance of a company. Additionally, the result focused on analyzing the performance of Unilever Pakistan using the financial ratios. Furthermore, the research has analysed the impact of external and internal factors to the survival and endurance of Unilever in the Pakistan FMCG industry. Another aspect that the research focused on is the standing of Unilever Pakistan in the past, presently and in the future. The research was conducted using a descriptive method utilizing both qualitative and quantitative data. The research has relied on secondary sources of data such as the company annual reports, reference books and journals. Some factors limited this report however, they were all overcome contributing to the final findings of the report.

Findings of the research have revealed that Unilever Pakistan has less current assets than current liabilities which makes it unable to meet its obligations within the required time. The main challenge, which is highlighted in the analysis of the report, is the rising debt that the company has. The company, however, has strong strengths such as strong international reputation and a wide range of brands enabling it to continue operating in Pakistan amid political and economic instability. It is important to conduct a future study on the marketing strategies that FMCG companies should pursue in international markets.

CHAPTER ONE

1.1 The Introduction

The research is based on one of the top and leading FMCG organizations i.e. Unilever that has its headquarters in the UK. Unilever has its presence in more than 190 countries but for this research, Unilever Pakistan is chosen (Unilever 2015). Unilever is among the worlds most old multinational company owning over 400 brands having a focus on only 14 brands, which generate sales of approximately 1 billion Euros. Unilever was formed initially as a merger between two companies, Lever Brothers that was a British soap-maker and a Netherlands based margarine producer Margarine Unie in the year 1929 (Unilever 2015).

The company started growing in the 1930s when it started launching new ventures into other continents using the strategy of acquisitions. In Pakistan, the company started its operations in the year 1948 after renaming to Unilever Pakistan Limited from the previous name Lever Brothers Pakistan Limited (Unilever 2015). The company chose Rahim Yar Khan as the best site to set up a vegetable oil factory. It happens that Unilever Pakistan is one of the largest Multinational operating in the country as well as being the largest FMCG Company in the country. Presently, the head office of the company in Pakistan is in Karachi after it was moved from Rahim Yar Khan in the 60s (Unilever 2015). In Pakistan, the company offers food and beverages, personal care products, and home care products that are among the numerous categories of products that the company offers in other countries (Unilever 2015).

Among the products, which are offered in the category of personal care, include; Clear, Close-up, Fair and Lovely, Lifebuoy shampoo, Lifebuoy soap, Lux, Rexona, Sunsilk in addition to other products. In the category of Home Care, the company offers; Comfort which is a fabric softener, Rin, which is a detergent, and Surf Excel, which is a detergent, and at the same time a gentle wash (Unilever 2015). The company continues to operate in a country, which is continuously faced with internal political disputes, which makes the country unfavorable for foreign investors to enter the market (The CIA 2015).

Unilever Pakistan has been protective of its employees in terms of provision of quality working conditions. The company has been developing various employees initiatives such as the health passport with the purpose of their well-being. The company provides a gym facility as well...