Exam (elaborations)
BUS 5110 Unit 7 Discussion Assignment
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A guide to assignment on trend analysis on Unilever Nigeria Plc. With calculations on turnover, operating profit, and net profit. All calculations are correct
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Trend analysis is a technique used in technical analysis that attempts to predict future stock pricemovements based on recently observed trend data (Hayes, 2021c). It is also used to analyze the
market trend to make better decisions on the results of the analysis done. Unilever Nigeria Plc. is
the company I've chosen in the second week and I will show the income statement and balance
sheet trend analysis for the recent four years. The trend analysis will not include this year
because the annual report has not been reported yet.
The three most important line items for both financial statements were chosen. For income
statement turnover, operating profit and net income are chosen. Operating profit serves as a
highly accurate indicator of a business’s health because it removes all extraneous factors from
the calculation (Investopedia, 2021). As for the balance sheet current assets, total liabilities, and
total stockholders' equity are chosen. These line items are chosen because they are efficient to
evaluate a company's stability, decision to expand or pay down debt, and assess asset
liquidations.
2020 % 2019 % 2018 % 2017 %
Turnover € 50,724 94.4% € 51,980 96.8% € 50,982 94.9% € 53,715 100.0%
Operating Profit € 8,303 93% € 8,708 97.2% € 12,639 141% € 8,957 100%
Net Profit € 6,073 94.1% € 6,026 93.3% € 9,788 151.6% € 6,456 100.0%
The calculation is based on the Unilever Annual Report and Accounts and it is done with the
values in 2017 taken as base values and the euro amounts are in millions. The turnover shows a
general decrease with last year's amount being the lowest linked to currency related items.
Similarly, there is a decrease in operating profit and net profit except in 2018 where there is a
significant increase (51%). This was attributed to a strong performance in India and other Asian
markets.
2020 2019 2018 2017
Current Assets € 16,157 95.2% € 16,430 96.8% € 15,478 91.2% € 16,980 100.0%
Total Liabilities € 50,004 104% € 50,920 106.4% € 48,994 102% € 47,860 100%
Total Stockholders' Equity € 17,665 124.4% € 13,886 97.8% € 12,117 85.3% € 14,198 100.0%
The current assets show slight decrease while the current liabilities increased correspondingly.
The total stockholders' equity shows great increase in the last year as a result of increase in
retained earnings.
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