Financial analysis has always been a strength of mine throughout my studies, with business analysis being my weakness. With this in mind, I chose topic number 8, “The business and financial performance of an organization over a three year period” for my research and analysis project. The reason for this is to build on my strength of financial analysis and to improve my understanding and application skills on business models. When it came to choosing an organization, there was no other choice other than Unilever because this is the organization which has always fascinated me. This interest of mine was born by my curious nature. Whenever I use a product, I always want to know the details, such as what ingredients it has, which company manufactures it, what other varieties are available, etc. After a while, I noticed that every product from soap to tea which I used had one thing in common. This is a very unique logo which forms a ‘U’ and the name of Unilever. I started wondering, how large is this company? What types of different products it produces? What industry sector does it belong to? After some research, I found out that Unilever Pakistan limited (UPL) produces a range of products and is a part of the Fast moving consumer goods (FMCG) sector. When this opportunity arose, to choose a company of my liking, UPL was my only choice simply because I yearned to learn about it, as it has always fascinated me. Objectives and Research Questions
The main objective of my report is to analyze the performance of UPL. Both business and financial performance will be assessed over a three year period, and the results compared with a comparator. This analysis will help answer the following research questions. Does the significant advertising expenditure carried out by UPL impact its financial performance positively and is it really necessary? Do any unlawful activities affect the performance of UPL? If so, which activities? Overall Research Approach
The research approach used in this report is first to gather information from as many sources as possible and then analyze both business and financial aspects. For financial performance, I have analyzed financial statements of UPL as well as of its competitor. To analyze the business performance, I have conducted external and internal appraisal of UPL’s environment. Information Gathering
To meet the information requirements necessary for the RAP, only secondary sources of information have been used. The reason for using only secondary data is because primary data from internal management of UPL is not accessible. This non-availability of primary sources of information has not compromised the quality and research findings of this report as only secondary sources of information were deemed sufficient. Due to the limitation of primary information sources, the research carried out was extensive. Best efforts were made into gathering as much relevant information as possible in order to ensure the analysis is satisfactorily completed. Information sources include:
ACCA textbooks – Used to polish my skills on financial and business analysis and the BPP “Success in your research and analysis project” textbook was used to familiarize myself with the RAP requirements. Student Accountant magazines – Used to learn of what type of possible models can be applied, and the features of an A grade RAP. Financial statements of companies – Analyzed in depth to ensure understanding of the business. UPL’s latest financial statements were collected from the stock exchange, whereas previous year financial statements were downloaded from the internet. A limitation was faced here with UPL’s competitor, Procter & Gamble, whose financial statements of its Pakistan operations were unavailable. Due to this, Nestle Pakistan (NPL) was selected as an adequate competitor, even though its product lines are somewhat different from that of UPL. Websites – In this day and age, massive amounts of information is available on...
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