Financial Analysis Of Nestle: A Case Study Of Nestle
Question 3.5.1
Nestle
Nestle is a multinational food company founded by Henri Nestle in 1860. Many of the Swiss company 's brands are internationally renowned, such as Kit Kat (confectionery), Nescafe, Nestea and Perrier (beverages), Dreyer 's (ice cream) and Gerber (baby food products). A significant proportion of Nestle 's revenues come from the sale of confectionery, a market also dominated by rival brands such as Mars (with brands such as Snickers and M&Ms) and Cadbury 's (which owns brands such as Time Out, Crème Eggs and Diary Milk). Nestle is listed on the Swiss stock exchange in Zurich. It also owns a large share in L 'Oreal, the world 's largest cosmetics company.
a Identify two stakeholder groups of Nestle from the case study. [2 marks]
It can be shareholders and customers or traders. This is because the word “share” is appeared in the Nestle case study
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TRADING AND PROFIT AND LOSS ACCOUNTS
The trading, profit and loss account (sometimes referred to as an income statement) is a financial statement of a firm 's trading activity over a period of time, usually one year. Most businesses that operate in the private sector aim to make a profit. Even for non-profit organizations and those in the public sector, it is important to make a surplus for the business to survive. The main purpose of producing this account is to show the amount of profit or loss that a business has made during a particular trading period.
Profit creates an incentive for most businesses to do well. If a business does not earn profit, it will struggle to survive in the future. Profit, in its simplest form, is the difference between a firm 's revenues and its costs. Revenue refers to the inflow of money to the business from ordinary trading activities. Revenue can come in the form of cash sales, credit sales, fees and royalties. Costs represent the outflow of money from a business due to its operations. Costs of production are likely to include wages, salaries, rent and the purchase
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