Question: Perform a Financial Ratio Analysis for Nestlé
Purpose: Financial ratio analysis is one of the best techniques for identifying and evaluating internal strengths and weaknesses. Potential investors and current shareholders look closely at firms' financial ratios, making detailed comparisons to industry averages and to previous periods of time. Financial ratio analysis provides vital information for developing an IFE Matrix.
Instructions:
Step 1 On a separate sheet of paper, write down numbers 1 to 20. Referring to Nestlé's income statement and balance sheet, calculate 20 financial ratios for 2015.
Step 2 In a second column, indicate whether you consider each ratio to be a strength, weakness, or neutral factor for Nestlé.