Literature Review

Financial Department
The first article is based on the impacts of covid 19 on financial statements of unilever and its
disclosure requirements. Due to this pandemic, world is facing huge crisis and many businesses
are changing from traditional selling to online selling and their sales and operations patterns have
changed drastically which also caused magnificent change in the finance departments of the
businesses. It is stated that the government also imposes legislations due to this shift and requires
a significant change in IFRS (International Financial Reporting Standards) implications
concerning pandemic to improve the situation. As pandemic extended all the companies had
downturn in every sector in their financial situations and most people lost jobs due to which the
liquidity crunch resulted which mean the shortage of cash. It also involved changing the
accounting policies and methods as well as making provisions from the most affecting parts of
the financial reporting in general. Areas which were impacted due to covid 19 are Cash forecast
plans, Goodwill impairment process, inventories, fixed overhead accounting, impacts on sales
and profitability. The areas where there was little to no change due to this pandemic accounting
for estimates and classification of lease, working capital standing and Assessment of Going
Concern.
The methodology used in this case study was that 31 questionnaires were given to the company
officials for getting the feedback. These questionnaires were based of 31 IFRS workings and
implications in pandemic.
To conclude the covid 19 had huge negative externalities which in turn had a lot of negative
implications on financial reporting since accounting is the main method of communication of
economic events of an organization, that reflects both the economic and social changes of a
nation or its level of development. Unilever adopted cash focused approach for maintaining
liquidity for smooth operations and avoid working capital issues. The study analyzes how
Unilever Pakistan Limited adopted these changes or in which areas still following the same
policies.

The second article mainly focuses on significant analysis on financial statements of National and
unilever foods. The study aims to analyze the performance on financial statements. So, for better
understanding, the financial statements of two company are selected so that both can be
compared and have thorough analysis on it. The overall analysis is based on the Vertical
analysis, Horizontal analysis, DuPont analysis, Ratio analysis.
Results show that vertical analysis can be a little doubtful analysis as its total assets and sales
fluctuate gradually. Horizontal analysis is somehow better analysis than vertical analysis as it
shows negative or positive trend of variables. DuPont analysis is a reliable analysis, but it is
taken into consideration only two years. However, ratio analysis seems to be best analysis as it
gives concise and more accurate review of firm’s performance.
The main objectives of this study were to show unproblematic financial statement analysis and to
verify the most significant and reliable analysis on financial statements. All the analysis methods
were applied using the balance sheet and profit and loss statements of both the companies. The
net present value has also been evaluated to check the reliability of the company for investment.
The results were presented graphically, and financial based analysis was done because of which
the data can be easily interpreted, and the decision can be made more efficiently.
To conclude, selecting an authentic and uncomplicated analysis for assessing financial
performance of a firm is sometimes frustrated situation for managers and financiers. For that
reason, this study showed different effortless analyses to perform on financial statements of a
firm. Vertical analysis declared Unilever foods as better company as compared to National
Foods, same case in horizontal analysis. DuPont analysis showed that Asset utilization was
efficient in case of National foods though weak financial leverage. Profitability analysis, long
term analysis and short-term analysis favor Unilever foods. However, capital management ratio
was higher in National foods as they are much aggressive about growing their business through
debts. Vertical analysis is somehow a suspicious analysis as total assets and sales fluctuate
gradually. Horizontal analysis is bit better analysis than vertical analysis as it shows increasing
and decreasing trend of variables. The results shows that Unilever foods is better corporate then
National foods.