AN ANALYSIS ON FINANCIAL PERFORMANCE OF UNILEVER

NEPAL LIMITED

A Project Work Report

By
MAN BAHADUR KHATRI
T.U. Regd. No.: 7-2-927-108-2016
Exam Roll No: 9270035
Shwoyambhu International College
Group: Account

Submitted To
Faculty of Management
Tribhuvan University
Kathmandu

In partial fulfillment of the requirements for the degree

Bachelors of Business Studies (BBS)
Kathmandu, Nepal
January, 2021
 DECLARATION

I hereby declare that the project work entitled on Analysis of Financial Performance of
Unilever Nepal Limited submitted to the Faculty of Management, Tribhuvan University,
Kathmandu is an original piece of work under the supervision of Mr. Raju Raut, faculty
member, Shwoyambhu international college, Kathmandu and is submitted in partial
fulfillment of the requirements for the degree of Bachelor of Business Studies (BBS). This
project work report has not been submitted to any other university or institution for the award
of any degree or diploma.

………………….
Man Bahadur Khatri.
Date: January-2021

i
 SUPERVISOR’S RECOMMENDATION

The project work report entitled Analysis of Financial Performance of Unilever Nepal
Limited submitted by Man bahadur Khatri of Shwoyambhu Int'l College, Kathmandu, is
prepared under my supervision as per the procedure and format requirements laid by the
Faculty of Management, Tribhuvan University, as partial fulfillment of the requirements for
the degree of Bachelor of Business Studies (BBS). I, therefore, recommend the project work
report for evaluation.

………………….

Raju Raut

Date: January-2021

ii
 ENDORSEMENT

We hereby endorse the project work report entitled ANALYSIS OF FINANCIAL

PERFORMANCE OF UNILEVER NEPAL LIMITED submitted by Man bahadur Khatri of
Shwoyambhu international College, New Baneshwor, Kathmandu in partial fulfilment of the
requirements for the degree of the Bachelor of Business Studies (BBS) for external
evaluation.

……………………… …………………….

Dr. Hari Sharan Chakhun. Suman Prasad Chaudhary.

Chairman, Research Committee Campus Chief
Date: January 2021 Date: January 20

iii
 ACKNOWLEDGEMENTS

With due respect, I would like to express my sincere gratitude to my respected supervisor,
Mr. Raju Raut, for his motivation, continuous support and immense knowledge with valuable
comments and suggestions. This study would not have been success without his constant
guidance.

I would also like to express my gratitude to Shwoyambhu Int'l College, Kathmandu for
providing the opportunity to carry out the project work. This project has been prepared in
partial fulfillment of the requirements for the degree of Bachelor of Business Studies (BBS). I
express my deep appreciation to everyone who helped me during this study. My heartfelt
thanks to the staffs- library and administration department of Shwoyambhu Int'l College for
providing their valuable support and co-operation.

Last but not the least, I would like to express my heartfelt thanks to my family, friends,
seniors for their continuous encouragement, co-operation and support for the completion of
this report. I am sincerely thankful to all those who helped me for the successful completion
of this report.

Man bahadur Khatri

January 2021

iv
 TABLE OF CONTENTS

Title Page
Declarationi
Supervisor's Recommendation...................................................................................................ii
Endorsement.............................................................................................................................iii
Acknowledgements....................................................................................................................iv
Table of Contents.......................................................................................................................v
List of Tables.............................................................................................................................vi
List of Figures..........................................................................................................................vii
Abbreviation...........................................................................................................................viii
CHAPTER ONE: INTRODUCTION1
1.1 Background of the study...................................................................................................1
1.2 Profile of Unilever Nepal Limited....................................................................................2
1.3 Statement of Problem4
1.4 Objectives of the Study4
1.5 Rationale of the study4
1.6 Review5
1.7 Methods6
1.8 Limitations of the Study8

CHAPTER TWO: RESULT AND ANALYSIS9

2.1 Data presentation and analysis of results11
2.2 Findings20

CHAPTER THREE: SUMMARY AND CONCLUSION22

3.1 Summary22
3.2 Conclusion23

BIBLIOGRAPHY..................................................................................................................25

APPENDIX ...................................................................................................................27

v
 LIST OF TABLES

Table 1 Income, expenditure and Operating profit 9

Table 2 Asseets Turnover Ratio 12

Table 3 Equity turnover ratio 14

Table 4 Net Profit Analysis of Unilever Nepal Limited. 17

vi
 LIST OF FIGURES

Figure 1 Total Income,Expenditure and Operating profit of UNL 10

Figure 2 Total Income 11

Figure 3 Relation between Total Income,Expenditure & Operating Profit 12

Figure 4. Total Turnover Ratio of Current Deposit to Total Deposit 13

Figure5. Total Assets 13

Figure6. Incremental Assets turnover ratio Analysis with linear trend 14

Figure7. Equity turnover ratio Analysis 15

Figure 8. Equity turnover ratio Analysis on Pie chart 15

Figure 9. Equity turnover ratio Analysis on linear trend. 16

Figure 10. Equity and net profit ananlysis on linear trend 16

Figure 11. Net profit analysis of UNL 17

Figure 12. Net profit Increment Analysis. 18

Figure 13. Dividend Hystory Analysis 19

Figure 14. Chart Analysis of Market Price of UNL 20

vii
 Abbreviations

% Percentage

& And

BBS Bachelor of Business Studies

B. S Bikram Sambat

i.e. That is

Ltd. Limited

UNL Uniliver Nepal Limited.

NEPSE Nepal Stock Exchange

FY Fiscal Year
ltd. Limited.
SFP Statement of Financial Position.
SPL Statement of Profit and Loss
GDP Gross Domestic Product
FMCG Fast moving consumer goods.

Rs. Rupees

viii
 1

CHAPTER ONE
INTRODUCTION

1.1 Background of Study

Financial performance is the achievement of the company's financial performance for a

certain period covering the ollection and allocation of finance measured by capital adequacy,
liquidity, solvency, efficiency, leverage and profitability. Financial performance, the
company's ability to manage and control its own resources. Cash flow, balance sheet, profit-
loss, capital change can be the basis of information for corporate managers to make decisions.
In the 20th century, performance referred only to financial operational performance of short
term. Financial ratios were then only investigated in order to assess the health of a firm.
Things have changed in the 90’ with the predominance of all stakeholders in the firms’
decisions making. Then, a more global view of performance was taken into account, with
social, economic and environmental performance being gathered (Baret, 2005).

Based on the idea that firm financial performance has an impact on its continuity, research on
firm performance starts with the DuPont Corporation in 1920s about the Return on
Investment (ROI). It has then mushroomed since 1980’, and the willingness of researchers to
prevent managers from bankruptcy (Bouquin, 1986; Bourguignon, 1995; Lebas, 1995;
Bescos et al., 1997; Bessire, 1999; Cheriet et al., 2007; Douhour et Berland, 2007). Following
their research, successful firms (i.e., firms that are present on their markets for more than ten
years) seem to register higher levels of financial performance. Financial analysis is the
process of evaluating businesses, projects, budgets, and other finance-related transactions to
determine their performance and suitability. Typically, financial analysis is used to analyze
whether an entity is stable, solvent, liquid, or profitable enough to warrant a monetary
investment. FMCG product touches every aspects of human life. These products are
frequently consumed by all sections of the society and a considerable portion of their income
is spent on these goods. Apart from this, the sector is one of the important contributors of the
Indian economy. This sector has shown an extraordinary growth over past few years, in fact it
has registered growth during recession period also. Unilever was founded on 2 September
1929, by the merger of the Dutch margarine producer Margarine Unique and the British soap
maker Lever Brothers. During the second half of the 20th century, the company increasingly
diversified from being a maker of products made of oils and fats and expanded its operations
worldwide. these product touches every aspects of human life It has made numerous
 2

corporate acquisitions, including Lipton (1971), Brooke Bond (1984), brough-Ponds

(1987), Best Foods (2000), Ben & Jerry's (2000), Alberto-Culver (2010), Dollar Shave
Club (2016) and Pukka Herbs (2017). Unilever divested its specialty chemicals businesses
to ICI in 1997. In the 2010s, under the leadership of Paul Polman, the company gradually
shifted its focus towards health and beauty brands and away from food brands showing slow
growth.

1.2 Profile of Unilever Nepal Limited.

Unilever Nepal’s (UNL) parent company Hindustan Unilever Limited has been operating in
India since 1956 and the brands were accessed to Nepal since then through imports. The
journey of Unilever Nepal started in 1992 when Nepal Lever Limited, set up a factory in
Makwanpur district with an initial investment of 73.65 million NPR. The factory started with
the production of detergents, cleaning powders, toothpaste and toilet soaps. The
manufacturing activity of UNL commenced with the commercial production of Wheel
washing powder in one kg packaging in February 1994. UNL began exporting its products
from 1995 and started to earn profits from the third year of production. The exports gradually
decreased from the early 2000 and stopped completely in 2004. UNL then explored the
option of shifting focus on expanding Nepalese markets and that was when the company was
renamed to Unilever Nepal Limited.

With over 35 brands spanning 20 distinct categories including soaps, detergents, shampoos,
skin care, toothpastes, deodorants, cosmetics, tea, and packaged foods, the Company is a part
of the everyday life of millions of consumers across Nepal. Each of our divisions - Home
Care, Beauty and Personal Care, Foods and Refreshments, includes a portfolio of brands that
aim to deliver consistent, competitive, profitable and responsible growth.UNL’s endeavor is
supported by consistent investment in product innovation and marketing activities. UNL
portfolio includes leading household brands such as Lux, Lifebuoy, Rin, Wheel, Fair &
Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, and
Brooke Bond Red Label.

Unilever Nepal Limited (UNL) is the market leader across categories for the brands
manufactured in Nepal. The market penetration of UNL is signified by the presence of its
brands across the country. The journey of Unilever Nepal started in 1992 when Nepal Lever
Limited, set up a factory in Makwanpur district with an initial investment of 73.65 million
 3

NPR. The factory started with the production of detergents, cleaning powders, toothpaste and
toilet soaps. The manufacturing activity of UNL commenced with the commercial production
of Wheel washing powder in one kg packaging in February 1994. UNL then explored the
option of shifting focus on expanding Nepalese markets and that was when the company was
renamed to Unilever Nepal Limited.

Capital Structure

Authorized Capital: NPR. 30,00,00,000

Paid up Capital: NPR .921,00,000

Board of Directors.

1) PRADEEP BANERJEE - Chairman

2) RAVI BHAKTA SHRESTHA -Promoter Director
3) BHARAT BAHADUR THAPA -Independent Director
4) DEV BAJPAI - Director
5) PRIYA NAIR -Director
6) SHANKAR LALL AGRAWAL -Director
7) SUYASH CHAUHAN Managing -Director

Organizational Chart of Unilever Nepal Limited.

 4

1.3 Statement of Problem

The industry is highly competitive. The products of Uniliver Nepal variety of choices. Every
company is trying to attract the customers by providing different products with different
features. The stiff competition in the market of FMCG industry has forced the marketers to
adopt a variety of marketing tools and techniques in the market place. They are using
different types of advertisement in newspaper, television, social media, and other media. The
Industries are trying their best to differentiate their products in terms of features and choices
and customer needs,

The marketing and managerial protocols adopted by Unilever Nepal should aim to get
attention of each and every target market and reduce the uncertainties faced by them as fast as
possible. It should also be focused on straightforward enough to match the expectations of
product consumers.

While presenting the facts about Unilever Nepal operation in market, following queries
are necessarily to be met based upon criteria:

1) Does the UNL able to maintain the present growth and future prospective
growth as per vision?
2) Does the extent of organizational structure of Unilever Nepal can grab risk
associated with growth of business?

1.4 Objectives of the Study

The main objective of this study is to analyze the financial performance of Uniliver Nepal
Limited. The specific objectives of this study are listed below.

1) To examine the overall present growth and future prospective growth financial
position of Unilever Nepal Ltd.
2) To measure the trend of financial growth of Unilever Nepal Ltd and how the Unilever
will grab the risk associated with the growth of business.

1.5 Rationale of the Study

This study is useful to understand the reasons behind the good or bad performance of the
concerned Organization. Some significances of the study are presented below:
 5

1) The analysis enables the public to assess the financial performance of the organization
for informed decision making.
2) It tries to give more information about the organization, its objectives, products and its
activities
3) It can be used as the secondary data for conducting future research by other students.

1.6 Literature Review

Review of Literature is a foundation of any kinds of research work. Generally, the purpose of
a review is to analyze critically a segment of a published body of knowledge through
summary, classification, and comparison of prior research studies, reviews of literature, and
theoretical articles. It highlights relevant literature to make the base of knowledge that can be
contribute to get some idea for developing a research design. Review of literature helps to
understand the conceptual issues related to research which will help to get clear ideas,
opinions and other concepts.

Review of previous works

Analysis of various aspect of the organization has been done by previous researchers. The
research done by previous researcher ACNDHU (2011) entitled “Organizational analysis of
Unilever Nepal Limited”, has the objective to find out the working styles of Unilever Nepal
and to determine the proper techniques for the management of their target-oriented
performance. The study reveals that Unilever have increasing growth rate. Since the
organization has increasing growth on turnover and profit, Organization should explore
alternative production opportunities.

The study is conducted by ACNDHU (2011) entitled “Organizational analysis of Unilever

Nepal Limited”. The objectives of this research are to provide conceptual framework of
different deposit, to provide suggestion and guideline to improve problems regarding
performance and to know whether different kinds of targets are in increasing or decreasing
trends. The research was mainly based on secondary data. The major findings of the study
reveal that the current position of UNL is satisfactory. The Organization is progressing very
well. It is able to increase its growth each year. It has opened most of its business area so it is
running smoothly. UNL has good policy, performance to attract its customers also it has
 6

strong position in Manufacturing sector. It can use the correspondence network of UNL on its
operation and it has already established itself as an enormous organization.

Research gap

In the globalization of the financial scenario, the effectiveness of the banks has been changed
in due period of time because of increased number of Industries in Nepalese economy so it is
essential to study effectiveness of analysis of financial performance of Industries. The
purpose of research work is different from the studies done by previous researcher. Financial
tools are used in this study as a ratio analysis. The research report is distinct in the sense of
presenting secondary data which will show concise figure of data. In addition, the study is
limited to the numerical data for measuring the financial performance.

1.7 Methods

Research method is a way to systematically solve the research problem. It refers to the
various sequential steps to adopt by a researcher in studying a problem with certain objective
in a view. It is the process of arriving to the solution of the problem through planned and
systematic dealing with the collection, analysis and interpretation of facts and figures
(Adhikari, 2016). Research method is the main step that carried out during the field report.
Research method evaluates the performance of study. The methods of the study include
research design, population and sample, nature and sources of data, data processing and tools
of data analysis.

Research Design

The descriptive research design is used to conduct deposit analysis of the Unilever Nepal
Limited. For the purpose of the study, the quantitative research technique has been used
where the performance of the organization has been analyzed and evaluated on the basis of
turnover, expenditure to total operating profit, turnover & Equity, yearly net profit analysis
and relation of the profit with the turnover, assets, equity as well are presented along with its
prospects and its position in context of Nepal as well as the recommended suggestions for its
improvement.

Population and Sample

A population is the entire group of subjects. The word “population” simply means the total
number of in habitant of the same species in a place. It holds the total subject of interest.
 7

Under the study of financial performance of the UNL it is a related party of Hindustan
unilever limited and UNL has highest position in respect of per share value in secondary
market. So, it is the most interesting organization in order to analyze its financial
performance. Among long year of its establishment, I have taken data only of last 5 years.

Nature and Sources of Data

The data is collected from the secondary sources like published annual report and quarterly
report of the Unilever Nepal Limited. For the preparation of this report, different kinds of
books have been followed. The data is collected from the official website of the concerned
organization. Similarly, the articles, journals, previous field reports, and banking related
books has been used.

Data Processing

Obtained data are entered into the spread sheet to work out the financial ratios and prepare
the necessary figures. Finally, different financial tools as well as statistical tools has been
carried out with the help of computer programmers.

Tools of Data Analysis

Data analysis tools means which tools the research used for present and analyzed the data.
The statistical and financial ratio tools are used for data analysis. The various tools used are:

Total Income, Total expenditure and Operating Profit Relation Analysis: In this
Analysis Actual data of the organization for past few years is collected and evaluated the
trend of turnover, expenditure and Operating Profit through Chart presentation.

Net profit Increment %: In this Analysis Actual data of the organization for past few years
is collected and evaluated. It can be calculated by the following formula: -

{(New Year profit-previous year profit)/Previous year Profit} *100

Equity turnover ratio Analysis: Assets turnover ratio actually reflects the use of equity is
being efficiently or not. This ratio resembles how many times the sales volume is performed
in compared to available equity. In this Analysis Actual data of the organization for past few
years is collected and evaluated. It can be calculated by the following formula: -
 8

(Total Turnover/Equity) *100

Assets Turnover Ratio: Assets turnover ratio actually reflects the use of assets is being
efficiently or not. This ratio resembles how many times the sales volume is performed in
compared to available assets. In this Analysis Actual data of the organization for past few
years is collected and evaluated. It can be calculated by the following formula: -

(Total Turnover/Average Assets) *100

1.8 Limitations of The Study

A research is the vast investigation for the setline of the problems. It is not far from several
limitations such as inadequate coverage of the Organization, time periods taken, reliability of
statistical and financial tools used and other variations. This study is limited by the following
factors.

1) The sample size is limited in this study.

2) The study was mainly based on secondary data which may not accurately predict
future performance.
3) Time constraint has created obstacle to conduct in-depth study of the matter.
 9

CHAPTER TWO

RESULTS AND ANALYSIS

The most valuable tool to show the true position of any organization is its past data. By
analyzing the data, one can identify its strengths and weaknesses. Therefore, this chapter
focuses on presenting the data related to financial performance of Unilever Nepal limited. In
this chapter, Turnover, Assets turnover ratio, equity turnover ratio, yearly total turnover
analysis, total expenditure and Operating income increment ratio and it’s trend is evaluated
through chart. Net profit of the organization is also yearly presented to the financial year
76/77. Covid-19 Pandemic has been affecting the large-scale business to all over the world
and we can see this sample in the operation of Unilever Nepal Limited also. This chapter first
explains methods of organizing data by tabulation and then placing that data in presentable
form by using figures.

2.1 Data Presentation and Analysis of Results

Total income, Total expenditure and Operating Profit position of UNL.

Unilever Nepal limited has been performing well known since the early establishing in Nepal
despite the covid-19 pandemic effect to all over the world, it has shown the better
performance with respect to income and operating profit. Data are presented as below
Table 1
Income, expenditure and Operating profit. (Rs. In lakhs)

Year Total Income Total Expenditure Operating profit

71/72 54,828 40,333 14,495

72/73 44,800 29,901 14,899
73/74 50,181 36,888 13,293
74/75 52,792 38,763 14,029
75/76 62,719 49,004 13,715
76/77 56,680 50,929 5,751
Note. from UNL Annual Report 2071/72- 2076/77.
 10

Table 1 shows the total Income, expense and Operating profit mix of Unilever Nepal Ltd
during the period of six years from the FY 2071/72- 2076/77. The total income in 2071/72
was 54,828 lakhs, expenditure was 40,333 lakhs due to which the operating profit results of
NPR.14,495 lakhs. The total income in 2072/73 was 44,800 lakhs, expenditure was 29,901
lakhs due to which the operating profit results of NPR 14,899. Lakhs. The total income of
2071/72 was 54,828 lakhs and which decreased to 44,800 lakhs decreasing by the volume of
10,028 lakhs and resulting operating profit was increased by 404 lakhs. On 2073/74 total
income was 50,181 lakhs expenditure was NPR.36,888 lakhs resulting the increasing
operating profit of NPR.1,606 lakhs than year 72/73. Similar ups and down was running on
the years. Mainly on analyzing the data of 2076/77. On covid-19 pandemic period which was
started fully lockdown from Chaitra 8 2076 to tentatively Ashadh end 2077, the performance
of UNL represents that the total turnover of NPR.56,680 lakhs which was 6,039 lakhs less
than the turnover of 2075/76 i.e.,62,719 lakhs. Total expenditure of 2075/76.

The Income of Unilever Nepal limited represents the sales income and other income
including foreign exchange gain as well the above result reveals that within the period of six
years from 2071/72- 2076/77, the amount of Turnover was highest on 75/76 which was
62,719 lakhs. And total expenditure was highest on financial year 2076/77 i.e., 50,929 lakhs.
On the whole years of analysis total operating profit was highest on the financial year72/73
i.e., 14,899 lakhs However, the turnover and operating profit has fluctuated throughout this
period.
(Amount in lakhs)

Performance Evaluation of UNL

70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
71/72 72/73 73/74 74/75 75/76 76/77

Total Income Total Expenditure Operating profit

Figure 1. Total Income,Expenditure and Operating profit of UNL.

 11

Figure 1 shows the Bar diagramatically representing data related to the financial performance
of Unilever Nepal limited. Total Income, Expenditue and operting profit are shown in
diagram in yearly basis. X-axis of the diagram represent the financial year on which we are
analysing the data related to our study and the Y-axis represents the volume of the respective
indices.Bar diagramatic presentation specifies the clear indication of ups and downs of the
organizatio regarding the indices throughout the period of our study.Different representation
of the color of the bar helps to eye catching fast analysing and understanding of the figures of
the respective indices on the respective financial year. Here I am trying to represent the above
mentioned data with the bar diagramatice representation as presented above for the
better,easy,effective and efficient analysis of the reader and also helps for those who are
referring it as a material for literal review.
(Amount in lakhs)

Total Income
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
71/72 72/73 73/74 74/75 75/76 76/77

Figure 2. Total Income

Figure 2 shows the linearly representing data related to the financial performance of Unilever
Nepal limited. Total Income is shown in diagram in yearly basis. X-axis of the diagram
represent the financial year on which we are analysing the data related to our study and the
Y-axis represents the volume of the respective indices. Linear trend presentation specifies the
clear indication of ups and downs of the organizatio regarding the indices throughout the
period of our study. Representation with linear point helps to eye catching fast analysing and
understanding of the figures of the respective indices on the respective financial year. Here I
am trying to represent the above mentioned data with the bar diagramatice representation as
presented above for the better,easy,effective and efficient analysis of the reader and also
helps for those who are referring it as a material for literal review.
 12

(Amount in lakhs)

Operational Chart of UNL

70,000 16,000

60,000 14,000
12,000
50,000
10,000
40,000
8,000
30,000
6,000
20,000
4,000
10,000 2,000
- -
71/72 72/73 73/74 74/75 75/76 76/77

Total Income Total Expenditure Operating profit

Figure 3. Relation between Total Income,Expenditure & Operating Profit.

Figure 3 shows the mix representation of Bar diagram and linear trend which is based on the
data related to the financial performance of Unilever Nepal limited. Total Income,
Expenditue

Assets Turnover and its Utilization Analysis.

Formula:
Assets Turnover = Turnover × 100 %
Avg. Assets.

Table2
Asseets Turnover Ratio (Rs.in lakhs)
Year Turnover Assets Assets turnover

71/72 48,892.00 28,126.00 174%

72/73 39,675.00 30,464.00 130%
73/74 44,424.00 33,218.00 134%
74/75 48,683.00 32,021.00 152%
75/76 57,541.00 38,572.00 149%
76/77 55,472.00 39,302.00 141%
Note. from UNL Annual Report 2071/72- 2076/77.
 13

(Amount in lakhs)

Figure 4. Total Turnover.

(Amount in lakhs)

Assets
76/77; 39,302.00 71/72; 28,126.00

72/73; 30,464.00

75/76; 38,572.00

73/74; 33,218.00
74/75; 32,021.00

71/72 72/73 73/74 74/75 75/76 76/77

Figure5. Total Assets.

Assets turnover ratio actually reflects the use of assets is being efficiently or not. This ratio
resembles how many times the sales volume is performed in compared to available assets. In
this Analysis Actual data of the organization for past few years is collected and evaluated. On
our evaluation Assets turnover is high in financial year 71/72. Which is 174%. Then next
high is on the financial year 74/75. i.e., 152% which represents that organization was able to
 14

utilize its available assts to the optimum utilization point and made turnover more than assets
value.

(Amount in lakhs)

Turnover increment
70,000.00 25%

60,000.00 20%
50,000.00
15%
40,000.00
10%
30,000.00
5%
20,000.00

10,000.00 0%

- -5%
72/73 73/74 74/75 75/76 76/77

turnover Turnover increment %

Figure6. Incremental Assets turnover ratio Analysis with linear trend.

Figure 6 shows the mix representation of Bar diagram and linear trend which is based on the
data related to the financial performance of Unilever Nepal limited. Turnover, Assets and
Assets turnover ratio are shown in diagram in yearly basis. On analysing the above figure
assets turnover of 74/75 and 76/77 has declined than preceeding years.

Equity turnover Ratio

Formula:
Turnover .
× 100 %
Avg. Equity.

Table.3
Equity turnover ratio (Amoumt: in
lakhs)
Year Turnover Total Equity Equity Ratio

71/72 48,892.00 18,430.00 2.652848616

72/73 39,675.00 20,490.00 1.936310395
73/74 44,424.00 20,743.00 2.141638143
 15

74/75 48,683.00 19,035.00 2.557551878

75/76 57,541.00 23,444.00 2.454401979
76/77 55,472.00 19,709.00 2.814551728

Note. from UNL Annual Report 2071/72- 2076/77

Equity turnover ratio actually reflects the use of equity is being efficiently or not. This ratio
resembles how many times the sales volume is performed in compared to available financial
resources. In this Analysis Actual data of the organization for past few years is collected and
evaluated. On our evaluation Equity turnover is high in financial year 76/77 Which is 2.814.
Then next high is on the financial year 71/72. i.e., which represents2.65 such refers to the
organization was able to utilize its available financial resources to the optimum utilization
point and made turnover more than equity.
(Amount in lakhs)

Turnover and Equity

Turnover Total Equity
70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
-
71/72 72/73 73/74 74/75 75/76 76/77

Figure 7. Equity turnover ratio Analysis

.
Figure 7 shows the mix representation of Bar diagram and linear trend which is based on the
data related to the financial performance of Unilever Nepal limited.
 16

Equity turnover Ratio Analysis

2.81455172763712 2.65284861638633

1.93631039531479
2.45440197918444

2.141638142988
2.55755187811925
71/72 72/73 73/74 74/75 75/76 76/77

Figure 8. Equity turnover ratio Analysis on Pie chart.

Figure 8 shows the mix representation of Pie-diagram is based on the data related to the
financial performance of Unilever Nepal limited. Turnover, equity turnover ratio are shown
in diagram in yearly basis. X-axis of the diagram represent the financial year on which we are
analysing the data related to our study and the Y-axis represents the volume of the respective
indices.pie-chart presentation specifies the clear indication of ups and downs of the
organizatio regarding the indices throughout the period of our study.

(Amount in lakhs)

Turnover to Equity
70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
-
71/72 72/73 73/74 74/75 75/76 76/77

Turnover Total Equity

Figure 9. Equity turnover ratio Analysis on linear trend.

Figure 9 shows Turnover, Assets and Assets turnover ratio are shown in diagram in yearly
basis. X-axis of the diagram represent the financial year on which we are analysing the data
related to our study and the Y-axis represents the volume of the respective indices
 17

(Amount in lakhs)

Total Equity Net Profit

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

-
71/72 72/73 73/74 74/75 75/76 76/77

Figure 10. Equity and net profit ananlysis on linear trend

Figure 10 shows the linear representation of trend of equity and Net profit which is based on
the data related to the financial performance of Unilever Nepal limited. Turnover, Assets and
Assets turnover ratio are shown in diagram in yearly basis. axisrepresents the volume of the

Net profit analysis of Unilever Nepal.

I have considered few years financial data for the analysis of net profit and its performance.
since the data consideration is a limiting factor of my study, only 5 years of data are extracted
from the secondary data source which was from published annual report of Unilever Nepal
limited. It can be presented as follows.

Table 4
Net Profit Analysis of Unilever Nepal Limited. (Rs in millions)

Year Net Profit Profit increment %

72/73 12,311.00 -26%
73/74 9,652.00 -22%
74/75 9,994.00 4%
75/76 10,654.00 7%
76/77 3,554.00 -67%
Source:Annual reports of UNL

(Amount in lakhs)
 18

Net Profit of UNL

16,575.00

12,311.00
10,654.00
9,652.00 9,994.00

3,554.00

71/72 72/73 73/74 74/75 75/76 76/77

Figure 11. Net profit analysis of UNL.

Figure 11 shows the Bar diagramatically representing data related to the financial
performance of Unilever Nepal limited. Net Profit is shown in diagram in yearly basis. X-axis
of the diagram represent the financial year on which we are analysing the data related to our
study and the Y-axis represents the volume of the respective indices.Bar diagramatic presents
Net Profit of Unilever Nepal Limited for the period of five years from FY 2072/73 to
2076/77. Within this period, the net profit of the organization was highly fluctuated . the
profit on 2072/73 was decresed by 26% than financial year 71/72 and same was decreased on
73/74 by 22% . However, Net profit was incresed on 74/75 on 4% on comparison of previous
year and it shows increasing trend on 75/76 on which it was increased with 7%. However,
Due to covid-19 Pendamic impact of worldwide the unilever nepal limited was also highly
affected due to non-fulfillment of its turnover target.All the businesses were closed almost 3
months of the financial year 76/77 due to which the turnover of the UNL was highly affected.
It can be clearly seen on the net profit data of 2076/77 which reflects the decrease of overall
profit by 67% on comparison to previous year data.
 19

(Amount in lakhs)

Net profi t increment Analysis

14,000.00 20%
10%
12,000.00
0%
10,000.00 -10%
8,000.00 -20%
-30%
6,000.00 -40%
4,000.00 -50%
-60%
2,000.00
-70%
- -80%
72/73 73/74 74/75 75/76 76/77

Net Profit Profit increment %

Figure 12. Net profit Increment Analysis.

Figure 12 shows the net profit of the organization was highly fluctuated . the profit on
2072/73 was decresed by 26% than financial year 71/72 and same was decreased on 73/74 by
22% . However, Net profit was incresed on 74/75 on 4% on comparison of previous year and
it shows increasing trend on 75/76 on which it was increased with 7%. However, Due to
covid-19 Pendamic impact of worldwide the unilever nepal limited was also highly affected
due to non-fulfillment of its turnover target.All the businesses were closed almost 3 months
of the financial year 76/77 due to which the turnover of the UNL was highly affected. It can
be clearly seen on the net profit data of 2076/77 which reflects the decrease of overall profit
by 67% on comparison to previous year data.

Dividend Hystory of UNL

Following data are presented in order to reflect the picture of dividend hystory of uniliver
nepal limited. Those data were extracted from the published annual report of the organization
referring as secondary source of data.
 20

Dividend Hystory of UNL

1270
1400
1200 990 1020
1000 860
770
700
800
600
400
100
200 0 0 0 0 0 0 0
0
2070/2071 2071/2072 2072/2073 2073/2074 2074/2075 2075/2076 2076/2077

Cash dividend Bonus Dividend

Figure 13. Dividend Hystory Analysis.

Figure 13 shows the Bar diagramatically representing data related to the financial
performance of Unilever Nepal limited. Dividend is shown in diagram in yearly basis. X-axis
of the diagram represent the financial year on which we are analysing the data related to our
study and the Y-axis represents the volume of the respective indices.Bar diagramatic
presentation specifies the clear indication of ups and downs of the organizatio regarding the
indices throughout the period of our study. Dividend was highest on the financial year
2073/74. And lowest on the financial year 76/77 which clearly known as the pendamic
effect.Throughout the period, bonus distribution was zero.
Market Price of Unilever Nepal Limited.
Following graphical representation is shown in order to reflect the picture of market price
hystory of uniliver nepal limited. Those data were extracted from the published report related
to the organization referring as secondary source of data.
 21

Figure 14. Chart Analysis of Market Price of UNL

Figure 14 shows the candle stick analysis of the market price of unilever Nepal limited as per
Nepal stock exchange(nepse). During the covid-19 pendemic scenerio, share market was
highly affected and being more volatile in nature. UNL market price was decresed from
23,000 to NPR.17,200 and again rise upto 22,500 and then now upward movement is shown
taking the support level of 18,500. So the performance of the UNL is also affects the
secondary market price of the organization

2.2 Findings

Despite the Covid-19 Pandemic, the growth of Unilever Nepal Limited for the financial year
2076-77 is satisfactory. From the information analyzed from secondary data of Unilever
Nepal Limited, it can be found that the performance of Unilever Nepal Limited would be
better than previous year if such pandemic affect does not exist.More of its customers are
willing to consume the product of Unilever Nepal Limited on comparison to others. The
major findings of the study which covers a period of six years (2071/72 to 2076/77) are listed
below:

1) Unilever Nepal limited (UNL) is Nepal’s largest fast-moving consumer goods

company with a heritage of over 26 years. Nine out of ten Nepali households use our
products every day to feel good, look good and get more out of life; giving us a
unique opportunity to build a brighter future. With over 35 brands spanning 20
 22

distinct categories including soaps, detergents, shampoos, skin care, toothpastes,

deodorants, cosmetics, tea, and packaged foods, the Company is a part of the
everyday life of millions of consumers across Nepal. Each of our divisions - Home
Care, Beauty and Personal Care, Foods and Refreshments, includes a portfolio of
brands that aim to deliver consistent, competitive, profitable and responsible growth.
2) On our evaluation Assets turnover is high in financial year 71/72. Which is 174%.
Then next high is on the financial year 74/75. i.e., 152% which represents that
organization was able to utilize its available assets.
3) UNL has Provided direct employment to 241 people and indirectly to more than
20,000 people across the value chain.

4) On covid-19 pandemic period which was started fully lockdown from Chaitra 8 2076
to tentatively Ashadh end 2077, the performance of UNL represents that the total
turnover of NPR.56,680 lakhs which was 6,039 lakhs less than the turnover of
2075/76 i.e.,62,719 lakhs. Total expenditure of 2075/76.
5) Evaluation of data reveals that within the period of six years from 2071/72- 2076/77,
the amount of Turnover was highest on 75/76 which was 62,719 lakhs. And total
expenditure was highest on financial year 2076/77 i.e., 50,929 lakhs. On the whole
years of analysis total operating profit was highest on the financial year72/73 i.e.,
14,899 lakhs However, the turnover and operating profit has fluctuated throughout
this period.
6) On our evaluation Equity turnover is high in financial year 76/77 Which is 2.814.
Then next high is on the financial year 71/72. i.e., which represents2.65 such refers to
the organization was able to utilize its available financial resources to the optimum
utilization point and made turnover more than equity.
7) Due to covid-19 Pendamic impact of worldwide the unilever nepal limited was also
highly affected due to non-fulfillment of its turnover target.All the businesses were
closed almost 3 months of the financial year 76/77 due to which the turnover of the
UNL was highly affected. It can be clearly seen on the net profit data of 2076/77
which reflects the decrease of overall profit by 67% on comparison to previous year
data.
8) Dividend was highest on the financial year 2073/74. And lowest on the financial year
76/77 which clearly known as the pendamic effect.Throughout the period, bonus
distribution was zero.
 23

CHAPTER THREE

SUMMARY AND CONCLUSION

3.1 Summary

This report is prepared with the main objective to analyze different perspective to analyze the
financial performance of Unilever Nepal Limited. By considering secondary sources of data,
the researcher has examined the overall performance and position of Unilever Nepal Ltd by
measuring the trend of Turnover growth, Operating profit growth, Net profit growth, Assets
turnover ratio, Equity utilization comparison through equity turnover ratio, Dividend history
and impact of UNL financial performance to its market value. Resercher has also considered
the data of covid-19 period to represent the most convincing and reliable data. So due to
covid-19 pandemic effect the financial indicator of the companies is seemed to have high
fluctuated.

Unilever Nepal limited (UNL) is Nepal’s largest fast-moving consumer goods company with
a heritage of over 26 years. Nine out of ten Nepali households use our products every day to
feel good, look good and get more out of life; giving us a unique opportunity to build a
brighter future. With over 35 brands spanning 20 distinct categories including soaps,
detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, and packaged foods,
the Company is a part of the everyday life of millions of consumers across Nepal. Each of our
divisions - Home Care, Beauty and Personal Care, Foods and Refreshments, includes a
portfolio of brands that aim to deliver consistent, competitive, profitable and responsible
growth. UNL has Provided direct employment to 241 people and indirectly to more than
20,000 people across the value chain.
On our evaluation Assets turnover is high in financial year 71/72. Which is 174%. Then next
high is on the financial year 74/75. i.e., 152% which represents that organization was able to
utilize its available assets. On our evaluation Equity turnover is high in financial year 76/77
Which is 2.814. Then next high is on the financial year 71/72. i.e., which represents2.65 such
refers to the organization was able to utilize its available financial resources to the optimum
utilization point and made turnover more than equity. Evaluation of data reveals that within
the period of six years from 2071/72- 2076/77, the amount of Turnover was highest on 75/76
 24

which was 62,719 lakhs. And total expenditure was highest on financial year 2076/77 i.e.,
50,929 lakhs. On the whole years of analysis total operating profit was highest on the
financial year 72/73 i.e., 14,899 lakhs However, the turnover and operating profit has
fluctuated throughout this period.

Due to covid-19 Pandemic impact of worldwide the Unilever Nepal limited was also highly
affected due to non-fulfillment of its turnover target. All the businesses were closed almost 3
months of the financial year 76/77 due to which the turnover of the UNL was highly affected.
It can be clearly seen on the net profit data of 2076/77 which reflects the decrease of overall
profit by 67% on comparison to previous year data. Dividend was highest on the financial
year 2073/74. And lowest on the financial year 76/77 which clearly known as the pandemic
effect. Throughout the period, bonus distribution was zero. As the prescribed scenario, share
market was highly affected and being more volatile in nature. UNL market price was
decreased from 23,000 to NPR.17,200 and again rise up to 22,500 and then now upward
movement is shown taking the support level of 18,500. So, the performance of the UNL is
also affects the secondary market price of the organization.

3.2 Conclusion

The study focuses on the analysis of financial performance of Unilever Nepal Limited for the
period of five years (FY 2071/72-2076/77). The study found that Unilever nepal limited
(UNL) is Nepal’s largest fast-moving consumer goods company with a heritage of over 26
years. Nine out of ten Nepali households use our products every day to feel good, look good
and get more out of life; giving us a unique opportunity to build a brighter future. With over
35 brands spanning 20 distinct categories including soaps, detergents, shampoos, skin care,
toothpastes, deodorants, cosmetics, tea, and packaged foods, the Company is a part of the
everyday life of millions of consumers across Nepal. Each of our divisions - Home Care,
Beauty and Personal Care, Foods and Refreshments, includes a portfolio of brands that aim to
deliver consistent, competitive, profitable and responsible growth. UNL has Provided direct
employment to 241 people and indirectly to more than 20,000 people across the value chain

Thus, due to covid-19 Pandemic impact of worldwide the Unilever Nepal limited was also
highly affected due to non-fulfillment of its turnover target. All the businesses were closed
almost 3 months of the financial year 76/77 due to which the turnover of the UNL was highly
affected. It can be clearly seen on the net profit data of 2076/77 which reflects the decrease of
 25

overall profit by 67% on comparison to previous year data. Dividend was highest on the
financial year 2073/74. And lowest on the financial year 76/77 which clearly known as the
pandemic effect. Throughout the period, bonus distribution was zero. As the prescribed
scenario, share market was highly affected and being more volatile in nature. UNL market
price was decreased from 23,000 to NPR.17,200 and again rise up to 22,500 and then now
upward movement is shown taking the support level of 18,500. So, the performance of the
UNL is also affects the secondary market price of the organization.
 26

BIBLIOGRAPHY

Books:
Agrawal, G.R. (2000). Dynamics of Human Resource Management in Nepal. Kathmandu:
M.K. Publishers and Distributors.
Bajracharya, P., Goet, J., & Sharma, S. (2005). Managerial Accounting: Nepalese
Prospective. (2nd ed). Kathmandu: Asmita Books Publishers & Distributors.
Belkaoui, A.R. (2000). Accounting Theory. (4th ed). USA: Business Press (Thomson
Learning).
Dangol, R.M. & Prajapati, K. (2000). Accounting for Financial Analysis and Planning.
Kathmandu:
Taleju Prakashan. Fago, G. (2003). Profit Planning & Control. Kathmandu: Buddha
Academic Publishers & Distributors.
Gautam, C.M. & Ojha, K. (2008). Profit Planning & Control. Kathmandu: Asmita Publishers
& Distributors.
Gupta, R.L. and Sharma, N. (1992). Management Accounting. New Delhi: Agra Sahitya
Bhawan.
Hilton, R.W., Waher, M.W., & Selto, F.H. (2002). Cost Management Strategies for Business
Decision. (2nd ed). New Delhi: Tata McGraw-Hill Publishing Co. Ltd.
Joshi, S. (2000), Managerial Economics. Kathmandu: Taleju Prakashan.
Khan, M.Y. & Jain, P.K. (1993). Financial Management. New Delhi: Tata McGraw-Hill
Publishing Co. Ltd.
Lynch, R.W. & Williamson, R.W. (1991). Accounting for Management Planning and
Control. (5th ed). New Delhi: Tata McGraw-Hill Publishing Co. Ltd.
Maheshwari, S.N. (2002). Advanced Accounting. New Delhi: Vikash Publishing House Pvt.
Ltd.
Munakarmi, S. P. (2000). Accounting for Financial Analysis and Planning. Kathmandu:
Educational Enterprises (P) Ltd.
Ojha, K., Sharma, N., Shrestha, B.P., & Singh, Y.M. (2003), Accounting for Financial
Analysis and Planning. Kathmandu: Buddha Academic Publishers and Distributors
Pvt. Ltd
Pandey, I.M. (1994). Financial Management. New Delhi: Vikash Publishing House.
 27

Articles:
1) Annual Report and Account of UNL.
2) CIMA (2002). Financial Reporting, UK Standards. Middlesex: Fouls Lynch Ltd.
3) Nepal Accounting Standards (2005). Kathmandu: Accounting Standards Board

Important website links

1. https://www.unilevernepal.com.
2. https://www.sharesansar.com.
3. https://www.merolanagni.com.
4. https://www.hul.co.in
5. https://www.investopedia.com
 28

APPENDIX
Statement of Financial Performance of UNL of last five years is presented as follows:
29
30
31
32