Danone Financial Statement Analysis

2638 Words Nov 11th, 2012 11 Pages
DANONE Case
- Financial analysis of Danone group
PENG Bo (e113110) GE Chuxiao(e113051) JIANG Yihong(e113066)

Fiancial Statement Analysis – Danone Case

Agenda
• Introduction
• Capital structure

• Profitability
• Return • Liquidity • Solvency • Conclusions & Recommendations
Fiancial Statement Analysis – Danone Case

Introduction of DANONE Group

History

Initiate in 1966, DANONE evolved from the original glass manufacturer to the international leader in fresh diary products.

Mission

“bringing health through food to as many people as possible”

Divisions

the Fresh Dairy Products Division the Waters Division the Baby Nutrition Division the Medical Nutrition Division

Global Approach

The group now
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Danone should consider taking some internal cost control process to offset the effect.

Fiancial Statement Analysis – Danone Case

Profitability Analysis

Relatively stable profitability

From the graph:
 EBIT margin grew from 2007 to 2008 then kept it on a stable level.

Hypothesis:
 In 2007, Danone’s high level of OWC result in the low EBIT margin.  The low elasticity of food & beverage industry enable Danone keep its steady level of operating margin.

Conclusion:
 It is good for the group to keep a steady EBIT margin. To achieve further increase in EBIT margin. Danone can take the product development into consideration which can lead to a higher profit margin.

*According to the company annual report we consider trading operating income as EBIT

Fiancial Statement Analysis – Danone Case

Profitability Analysis

Relatively stable return on equity
From the chart on the right, we can obviously see a dramatic decrease on the ROE from 2007 to 2008. After a careful check of the notes in the annual report, we found during 2007, the group dropped its “Biscuits and cereal product” business activities. The sale of the business was
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