Fianncial Statements Analysis of Nestle

Task 2

Summary

This assignment is intended to make a business report along with an explanation of deep understanding of financial statements of an entity that has to be chosen specifically at student’s own discretion to express why there are structured in a unique way because of the requirements of the reporting and legal framework.

For this purpose the financial statements of Nestle have been obtained and deeply analyzed before drafting this report. It also explains that who are the major stakeholders of the financial statements? Why their interest is directly influenced by the activities of the organization? Furthermore, it justifies why they need the financial statements and the object under consideration. This assignment also explains that where the company (Nestle) has raised short term and long term finance and for what purpose. In addition, significant ratios were calculated along with reasoning justified. Moreover, it also explains different methods for appraisal of capital projects and what are their pros and cons. Lastly, the weaknesses in the published financial information were clearly indicated.

Scope of work

This report is being drafted on the basis of analysis of the financial statements of Nestlé (hereinafter refer to as ‘the company’). For the purpose obtaining an understanding, these financial statements were studied thoroughly and deeply analyzed. Since Nestlé’s financial year starts from January 01 and ends on December 31, that’s why, financials for the year ending December 31, 2012, December 31, 2011 and December 30, 2010 were reviewed. The report will cover the following key areas;

A justification as to why the Published Financial Statement is structured in that way

Before answering this question, it is very important to know what financial statements are. The answer is quite simple that financial statements are a structured representation of financial information which is intended to communicate its users or stakeholders the future...