Homework: Mini Case Study
A. Research the financial statements for the Nestle you chose.
a. Note: it is particularly recommended for this homework you locate the annual statements (called "10-K" forms) Nestle through the Nestle web site or by using the SEC's EDGAR system. Annual statements will often include commentary explaining recent financial challenges and plans for the future.
b. Many free financial websites, such as Morningstar, provide financial data and ratios for public companies. Search for Nestle on Morningstar and then select "Operating Performance" for a list of ratios for previous years.
c. Consider accessing Nestle reports through OCLS using the Business Insights: Essentials tool. Detailed financial and investment reports are available for hundreds of companies.
B. Prepare a paper analyzing the Nestle growth challenges and making appropriate recommendations:
a. Using the sustainable growth equation from your textbook, calculate the company's sustainable growth rate for at least the past three years. Compare your calculated sustainable growth rate to the Nestle actual growth rate in sales during this period.
b. Begin your paper by creating a table showing the Nestle actual growth rates, the sustainable growth rates you calculated, and the four components of sustainable growth: profit margin, retention ratio, asset turnover, and financial leverage (assets/equity).
c. Describe what growth challenge the company is currently facing.
d. Analyze what actions the Nestle has taken to deal with their particular growth challenge. Your analysis should be based on changes in the components of sustainable growth, on the actions reported by executives in annual reports, and on any other commentary you discover through your research.
e. Make a series of specific recommendations on what actions the Nestle could take in the future to address its growth challenges.
Format your homework according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.