They made the mistake of lowering the prices of Kit Kat bars and other localised version of their confectionaries below that of rivals. Nestle value based ideology backfired with the Chinese consumers, who once had the image of chocolate as an exotic, luxury foreign product, made their purchasing decisions largely on the basis of brand and luxury packaging. Cadbury, owned by Kraft Foods have a market share of 3.8%, had their initial presence during the colonial era under the British. Leading domestic brands LeConte, owned by COFCO, a massive Chinese food conglomerate holds 6.7% market share and Golden Monkey with 1.5% market. In spite of their aggressive effort to compete with their international competitors, they have been out- spent and out-marketed.
Total debt also increased to €16.5 billion in 2014 from €15.6 billion in 2013. The decrease in current liabilities resulted from a significant decline in its financial liabilities to €1.9 billion from €2.9 billion (-36.0 percent), despite increases in trade payables (+24.98 percent), other liabilities (+13.6 percent), and income tax liabilities (+42.9 percent). Conversely, the increase in noncurrent liabilities resulted primarily from increases in provisions for pension and similar obligations (+52.9 percent) and other liabilities (+41.1 percent) despite the cut in deferred tax liabilities (-4.9 percent) and a decline in financial liabilities (-6.9 percent). Liquidity ratios indicate strictly controlled annual liquidity levels with strong reliance on leverage (around 30 percent of current assents) for its cash needs. Current ratio [current assets/current liabilities], the least conservative of the liquidity measures, is 0.7 both in 2014 and 2013 (Weiers, 2014).
5.0 FINDINGS, SUGGESTIONS AND CONCLUSIONS: 5.1 FINDINGS: The current ratio shows that the company is having sufficient fund to meet its short term obligations. The current ratio has been increased during the year 2013-14 as compared to the previous year. The company’s liquidity ratio shows a satisfactory trend in the year 2013-14, it is 1.7 times more than the previous year. The current assets to total assets ratio implies that the company is maintaining a considerable level of current assets in proportion to total assets. The cash to current asset is having decreased trend from year to year, this situation is not good for company in every year.
Such strong revenue visibility should allow the firm to adjust production rates and ride out economic downturns (Boeing website 2012). The current ratio takes Boeing’s current assets and divides it by their current liabilities. Boeing has seen an increase in their current ratio over the last three years. In 2009, Boeing’s current ratio was 1.07. Essentially
Grand parade had store revenue dropped by 20% showing pressure on consumer spending. Taste holdings recorded a loss in 6 months due to store costs incurred and converting existing stores. Domino’s weekly sales have increased by 17% since March with 74 outlets. Starbucks is trading ahead with R18m combined revenue. Famous Brands, Taste’s big rival has been going global .Grand Parade and Taste are going to do battle.
Debt / Equity The debt to equity ratio is a measure of the relationship between the shareholders equity and debt used to finance the company’s assets. The lower this figure the more independent a company is from debt when it comes to financing the company. The industry in which the company operates also affects the way the ratio is interpreted. In the case of Sappi the debt to equity ratio increased from 1.23 in 2009 to 1.27 in 2013. This change show their debt increased to finance the company.
It has normally a maturity in the range of five to seven years. Its cost is in the range of 7%-10%. The payback of this financing can be composed of periodic interest and capital payments or periodic interest only payments and capital repayment at the end of the loan term. MEZZANINE DEBT: it has the particular characteristic, as opposed to senior debt, that interest rates payable can be paid in cash at due time or rolled out and paid in full at the end of the term of the debt. It is placed in the middle of the financing structures in terms of priority of claims.
The decrease in sales also means the cash received from debtors decreases. In April the business received R28 500 and it decreased to R21 750 in June. The credit sales decreased from R33 750 in April to R16 875 in June. Less cash was received from debtors, which means less money in the bank to pay creditors. The payment to creditors is increasing each month even though less stock is sold.
This is because new traditional businesses do not have a lot of funds to work on with and they are a less risky deal as compared innovative sectors so debt financing may be proffered by them. He further adds that business with new ideas and innovation e.g. those of technology sectors that introduce products not currently available in the market would prefer equity financing because debt would not be easy to gain due to high level of risk attached of whether it will be success or not. But the investors may be interest to fund such projects as high risk may lead to even higher
FINANCIAL RATIO ANALYSIS OF SHREE RENUKA SUGARS (YEAR 2011-2015) LIQUIDITY RATIOS Liquidity ratios are a class of financial metrics used to determine a company 's ability to pay off its short-terms debts obligations. Generally, higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. The following Table shows the ratios for Years 2011-2015 for Shree Renuka Sugars: Ratio 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 Current Ratio 1.40 1.49 0.68 0.47 0.42 Quick Ratio 0.86 0.89 0.21 0.19 0.17 Cash Ratio 0.12 0.02 0.04 0.02 0.01 Current Ratio: The current ratio is the most basic liquidity test. It signifies a company 's ability to meet its short-term liabilities with its short-term