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Balance Sheet Analysis

Obtain the latest annual report and accounts of a company of your choice.* Consult the Balance Sheet and determine the company's net asset value.

· What is the composition of the assets, i.e. the relative size of fixed and current assets?
· What is the relative size of intangible fixed and tangible fixed assets?
· What proportion of current assets is accounted for by stocks and debtors?
· What is the company's policy towards asset revaluation?
· What is its depreciation policy?

Now consult the financial press to assess the market value of the equity. This is the current share price times the number of ordinary shares issued. (The notes to the accounts will indicate the number of shares issued.)

· What difference do you find between the net asset value and the market value?
· How can you explain this?
· What is the P:E ratio of your selected company?
· How does this compare with other companies in the same sector?
· How can you explain any differences?
· Do you think your selected company's shares are under- or over-valued?

Notes:
You chosen company MUST have a full listing on the London Stock Exchange.

You MUST attach to your coursework a copy of the latest annual report and accounts of your chosen company. (This does not contribute towards the word count.)

Your coursework should be no less than 1500 words and no more than 2500.
Ratio analysis as well as company valuation methods are required, along with a critical appraisal of the techniques used.

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UNILEVER IS FULLY LISTED ON THE LONDON STOCK EXCHANGE
Unilever N.V. is the parent company of a group of companies primarily engaged in the business of supplying fast-moving consumer goods in foods, household care and personal product categories. The Company's operations are organized into two global divisions: Foods and Home and Personal Care (HPC). These divisions' operations are organized into businesses on a regional basis, with the exception of the global businesses of Prestige, the Company's fragrance business within HPC, and, within Foods, ice cream and frozen foods, Slim-Fast Worldwide and UBF Foodsolutions, which provides solutions for professional chefs and caterers. To support its consumer brands, the Company owns tea plantations in India, Kenya and Tanzania, and palm oil plantations in the Democratic Republic of Congo, Cote d'Ivoire and Ghana. Unilever N.V. and Unilever plc operate as a single entity.

Share Stock exchange Latest Prior day close % Change
NV Amsterdam (EUR) 47.46 47.45 0.02
PLC London (Pence) 483.50 484.00 -0.10
NV New York (USD) 62.17 62.17 0.00
PLC ADR New York (USD) 36.53 36.53 0.00
Last updated 24/11/2004 13:07 GMT
VALUATION MEASURES

Market Cap (intraday): N/A
Enterprise Value (24-Nov-04)³: 50.73B
Trailing P/E (ttm, intraday): 23.54

Enterprise Value/Revenue (ttm)³: 1.02
Enterprise Value/EBITDA (ttm)³: 7.87
FINANCIAL HIGHLIGHTS

Fiscal Year
Fiscal Year Ends: 31-Dec
Most Recent Quarter (mrq): 30-Sep-04

Profitability
Profit Margin (ttm): 7.88%
Operating Margin (ttm): 12.97%
Management Effectiveness
Return on Assets (ttm): 7.74%
Return on Equity (ttm): 31.00%
Income Statement
Revenue (ttm): 49.68B
Revenue Per Share (ttm): 50.376
Revenue Growth (lfy)³: 4.90%
Gross Profit (ttm)²: 27.00B
EBITDA (ttm): 6.44B
Net Income Avl to Common (ttm): 2.63B
Diluted EPS (ttm): 2.641
Earnings Growth (lfy)³: 5.80%
Balance Sheet
Total Cash (mrq): 3.46B
Total Cash Per Share (mrq): 6.06
Total Debt (mrq)²: 18.66B
Total Debt/Equity (mrq): 2.002
Current Ratio (mrq): 1.319
Book Value Per Share (mrq): 0

TRADING INFORMATION

Stock Price History
Beta: 0.166
52-Week Change: 4.47%
52-Week Change (relative to S&P500): -7.59%
52-Week High (18-Feb-04): 75.02
52-Week Low (13-Oct-04): 56.36
Share Statistics
Average Volume (3 month): 420,583
Average Volume (10 day): 357,000

Float: 565.90M
% Held by Insiders: 0.99%
% Held by Institutions: 17.27%
Shares Short (as of 8-Nov-04): 1.34M
Short Ratio (as of 8-Nov-04): 3.226
Short % of Float (as of 8-Nov-04): 0.24%
Shares Short (prior month): 1.58M

Dividends & Splits
Annual Dividend: 2.1689
Dividend Yield: 2.59%
Dividend Date: 26-Nov-04
Ex-Dividend Date: 29-Oct-04
Last Split Factor (new per old)²: 4:1
Last Split Date: 21-Oct-97

Splits:14-Jul-87 [5:1], 21-Oct-97 [4:1]

Last Trade: 62.17
Trade Time: Nov 23
Change: 0.00 (0.00%)
Prev Close: 62.17
52wk Range: 56.36 - 75.02
Volume: 0
Avg Vol (3m): 420,583
P/E (ttm): 23.54
EPS (ttm): 2.641
Div & Yield: 2.1689 (2.59%)
Last Trade: 62.17
Trade Time: Nov 23
Change: 0.00 (0.00%)
Prev Close: 62.17
52wk Range: 56.36 - 75.02
Volume: 0
Avg Vol (3m): 420,583
Market Cap: N/A
P/E (ttm): 23.54
EPS (ttm): 2.641
Div & Yield: 2.1689 (2.59%)
All numbers in thousands
PERIOD ENDING 31-Dec-03 31-Dec-02 31-Dec-01
Net Income 4,780,450 4,517,125 1,334,316

Operating Activities, Cash Flows Provided By or Used In
Depreciation 2,559,117 2,706,711 2,520,670
Adjustments To Net Income (3,882,624) (3,473,018) (4,212,930)
Changes In Accounts Receivables 686,868 92,250 (35,440)
Changes In Liabilities (803,648) 485,363 389,840
Changes In Inventories (134,360) (102,733) (156,822)
Changes In Other Operating Activities - - -

Total Cash Flow From Operating Activities 5,310,355 4,993,053 3,089,482

Investing Activities, Cash Flows Provided By or Used In
Capital Expenditures (1,303,417) (1,357,548) (1,360,896)
Investments (301,368) (1,205,545) 11,518
Other Cashflows from Investing Activities 1,048,510 1,993,867 4,206,728

Total Cash Flows From Investing Activities (556,275) (569,227) 2,857,350

Financing Activities, Cash Flows Provided By or Used In
Dividends Paid (2,153,526) (1,656,314) (1,258,120)
Sale Purchase of Stock (10,046) 9,435 (2,658)
Net Borrowings (3,652,831) (2,725,580) (4,514,170)
Other Cash Flows from Financing Activities - - -

Total Cash Flows From Financing Activities (5,816,402) (4,372,459) (5,774,948)
Effect Of Exchange Rate Changes - - -

Change In Cash and Cash Equivalents ($1,062,322) $51,367 $171,884
All numbers in thousands
PERIOD ENDING 31-Dec-03 31-Dec-02 31-Dec-01
Total Revenue 53,609,600 51,115,108 46,254,516
Cost of Revenue 26,610,794 25,704,316 24,501,444

Gross Profit 26,998,806 25,410,792 21,753,072

Operating Expenses
Research Development 1,337,320 - 1,043,708
Selling General and Administrative 16,217,366 20,126,312 13,604,530
Non Recurring 138,127 (94,347) 15,948
Others 2,559,117 - 2,520,670

Total Operating Expenses 20,251,930 - 17,184,856

Operating Income or Loss 6,746,876 5,378,827 4,568,216

Income from Continuing Operations
Total Other Income/Expenses Net 1,148,966 2,163,691 (234,790)
Earnings Before Interest And Taxes 7,895,842 6,888,379 3,909,918
Interest Expense 1,120,084 1,596,561 1,507,086
Income Before Tax 6,775,757 5,291,818 2,402,832
Income Tax Expense 1,682,638 1,648,976 1,274,954
Minority Interest (312,669) (327,070) (211,754)

Net Income From Continuing Ops 4,780,450 3,969,912 1,339,632

Effect Of Accounting Changes - 547,213 (5,316)
Other Items - - -

Net Income 4,780,450 4,517,125 1,334,316
Preferred Stock And Other Adjustments (2,145,991) (1,783,158) (1,400,766)

Net Income Applicable To Common Shares $2,634,459 $2,733,966 ($66,450)

All numbers in thousands
PERIOD ENDING 31-Dec-03 31-Dec-02 31-Dec-01

Assets
Current Assets
Cash And Cash Equivalents 2,328,068 2,360,772 1,649,732
Short Term Investments 1,872,249 1,285,216 388,954
Net Receivables 6,692,881 7,147,309 7,645,294
Inventory 5,242,548 4,717,350 4,733,898
Other Current Assets 691,891 1,481,248 1,297,990

Total Current Assets 16,827,636 16,991,895 15,715,868
Long Term Investments 332,760 788,322 669,816
Property Plant and Equipment 8,356,684 7,795,159 8,186,640
Goodwill 20,981,491 18,841,096 18,739,786
Intangible Assets 8,629,170 8,101,262 8,202,588
- - -
Other Assets 1,877,272 348,036 1,040,164
- - -

Total Assets 57,005,013 52,865,769 52,554,862

Liabilities
Current Liabilities
Accounts Payable 12,104,948 11,626,695 10,572,638
Short/Current Long Term Debt 9,334,874 9,970,381 9,993,194
Other Current Liabilities - - -

Total Current Liabilities 21,439,822 21,597,077 20,565,832
Long Term Debt 10,630,756 11,461,064 12,599,806
Other Liabilities 6,681,580 6,356,891 4,790,602
Deferred Long Term Liability Charges 938,008 528,343 2,002,360
Minority Interest 552,508 658,332 588,304
Negative Goodwill - - -

Total Liabilities 40,242,674 40,601,707 40,546,904

Stockholders' Equity

Common Stock 806,159 673,009 568,812
Retained Earnings 7,772,783 6,056,029 5,864,434
Treasury Stock - - -
Capital Surplus 1,921,221 1,615,430 1,374,186
Other Stockholder Equity 6,262,176 3,919,594 4,200,526

Total Stockholder Equity 16,762,339 12,264,062 12,007,958

Net Tangible Assets ($12,848,322) ($14,678,297) ($14,934,416)

RELATED NEWS CLIPPINGS
Weak dollar may boost firms with overseas revenues
Tue Nov 23, 2004 04:10 PM ET

NEW YORK, Nov 23 (Reuters) - Investors in U.S. stocks may look to shares of companies that make revenues in foreign currencies as safe havens if the dollar's decline proves to be prolonged, investment strategists said on Tuesday.
However, simply buying those stocks may not be enough to make up for the dollar's weakness, because the hedging practices of some U.S. companies and funds may mute any currency gains, the experts said.
A weaker dollar can help U.S. companies that export and make revenues in foreign currencies, as it makes their goods more competitive in world markets.
Sam Stovall, chief investment strategist at Standard & Poor's, wrote in a research note that information technology companies in the S&P 500 index made 53 percent of their revenues overseas in 2003.
Consumer staples companies in the S&P 500 made 41 percent of their revenues overseas last year, while industrial companies made 35 percent in foreign markets, Stovall wrote.
Michael Metz, chief investment strategist at Oppenheimer & Co., said, "Generally, dollar assets will be under pressure, but you could argue those (companies) with big foreign operations like some information technology companies will gain from translation profits, because a stronger euro will be translated into more dollars."
The dollar resumed its decline on Tuesday after news that Russia might increase its euro reserves, with the greenback falling to a record low against the euro at $1.3103.
NO SIMPLE SOLUTION
Andrew Clark, a senior research analyst with fund research firm Lipper Inc., cautioned that stock picking in a low dollar environment is not as simple as choosing big U.S. exporters for a currency gain.
"Its very difficult to, let's say, do this based upon buying Kodak or Microsoft, because their hedging strategies are pretty much cloaked," Clark said.
"This also plays into funds. You can't necessarily buy a large-cap growth fund or large-cap value fund which may be dominated by, let's say, GE or Kodak and expect to get a currency play that way. That's unknown."
Frank Holmes, chief executive of U.S. Global Investors Inc., said exporters like consumer goods giant Procter & Gamble Co. , computer maker Dell Inc., heavy equipment maker Caterpillar Inc. (and software behemoth Microsoft Corp. may attract investors looking for currency gains.
"I would also take a look at steel companies," Holmes said. "As the U.S. dollar falls, our steel prices in the U.S. become very competitive on the global scene."
Other U.S. investors are simply buying more foreign stocks.
Gordon Fowler, chief investment officer at Glenmede Trust Co., which manages assets for people with $3 million or more to invest, said, "We are quite oriented at this point towards investing overseas. Not just because of the dollar but because the valuations look quite attractive.
"We are recommending an allocation of about 25 percent of equity weighting overseas, which for high-net-worth individuals is a relatively high level in the United States."
Lipper is a unit of Reuters Group Plc

UNILEVER THIRD QUARTER RESULTS 2004
Unaudited, Constant 2003 Average Exchange Rates, Unless Stated ENGLEWOOD CLIFFS, N.J.--(BUSINESS WIRE)--Oct. 27, 2004--Urgent action is being taken to restore top line growth, as stated in the outlook given on 20 September. Low single digit EPS (beia*) growth is expected for the year. FINANCIAL HIGHLIGHTS - EUR millionsThird Quarter Nine Months 2004 2004--------------- --------------10,641 -4 % Turnover 31,264 -3 %--------------- -------------- 1,848 -3 % Operating profit - beia* 4,916 -2 %--------------- -------------- 1,318 -2 % Pre-tax profit 3,419 +2 %--------------- -------------- 883 +6 % Net profit 2,183 +8 %--------------- -------------- 1,187 +3 % Net profit - beia* 3,074 +6 %--------------- ----------------------------- -------------- 1.23 +3 % EPS NV - beia* (Euros) 3.17 +7 %--------------- -------------- 18.38 +3 % EPS PLC - beia* (Euro cents) 47.50 +7 %--------------- --------------* Before exceptional items and amortisation of goodwill and intangible assetsAt current rates of exchange EPS (beia) was flat in the quarter and higher by 4% in the first nine months. Including exceptional items and amortisation of goodwill and intangibles, current rate EPS grew by 4% in the quarter and by 6% in the first nine months. KEY FEATURES OF THE QUARTER Underlying sales declined by 1.3% with a particularly poor performance in Western Europe including significant declines in ice cream and ready-to-drink tea and lower sales in Home & Personal Care in weaker markets. In Asia, competition remains intense in laundry and hair care in a number of key countries. Operating margin (beia) increased by 20 basis points. Continued cash generation has enabled net debt to be reduced to EUR 11.8 billion at the quarter end, down by EUR 2.5 billion over the last twelve months. EPS (beia) grew by 3%. Interim dividend of EUR 0.63 per NV ordinary share and 6.33p per PLC ordinary share. CHAIRMEN'S COMMENT In September we lowered our outlook for EPS beia growth for the year to low single digits following poorer than expected sales in July and August and pressure on some of our market positions. This revision includes an increase in the investment behind our brands from the fourth quarter to re-ignite growth. We remain fully committed to driving long-term total shareholder return through increasing Free Cash Flow and Return on Invested Capital. A strong focus on the top line is a pre-requisite for this and is our immediate priority. We are dissatisfied with our performance and actions are being taken to improve the market competitiveness of our products. We are making adjustments to price points where necessary, stepping up support behind key innovations and increasing media spend for a number of our leading brands. These actions will be sustained into 2005 and we are accelerating the savings programmes already announced. We are reviewing our assumptions for the period to 2010 and will communicate the outcome of this review together with the full year results. Antony Burgmans Patrick Cescau Chairmen of Unilever27 October 2004THIRD QUARTER AND NINE MONTHS FINANCIAL RESULTS (at constant exchange rates) Notes: Unilever uses 'constant rate', 'underlying' and 'beia' measures primarily for internal performance analysis and targeting purposes. Unilever believes that the use of such measures provides additional information for shareholders on underlying business performance trends. Such measures are not defined under UK, Netherlands or US GAAP and are not intended to be a substitute for GAAP measures of turnover and profit. Fuller definitions and reconciliations between such measures and the equivalent GAAP measures are available on our website: www.unilever.com. Underlying sales declined by 1.3% in the quarter and by 0.6% in the first nine months. Within this, leading brands, now 95% of the portfolio, declined by 0.9% in the quarter. After the impact of disposals, turnover was 4% lower than last year in the quarter and 3% lower in the year to date. Operating margin (beia) was 20 basis points higher than last year in the quarter. Gross margin was lower through the impact of poorer mix from lower ice cream sales in Europe and increased trade and consumer value promotions within pricing. These effects were offset by ongoing cost saving programmes and ...

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