Time Series Analysis Of Nestle And The Stock Market
A time series was a sequence of data points and are often plotted via line graph. The stock market index that investors usually used, the Dow Jones Industrial Average was one of the example of time series. Meanwhile, time series analysis which analyzing the time series data was frequently used by firms to compare the firm itself overtime. Generally forecasting and controlling performance of firm was the main goal of time series analysis. Managers can impose actions to firm once they found out that the performance of firm was not “usual” as normal.
Gross profit margin is a profitability ratio that measures the proportion of money left from revenue after the firms has paid for its goods. With higher gross profit and higher sales on year 2013, Nestle had perform better the previous year and hold 35.46% as ratio which 1.37% increase from 2012. This means that after the company pays off the inventory costs, it still has 35.46 % of sales revenue to cover the …show more content…
First of all, debt ratio which was meant to measures the proportion of total assets financed by the firm’s creditors shown Nestle would have to sell off 61% of its assets in order to pay off its liabilities in both year. The situation in Dutch Lady become worse from 2012 to 2013 as it increase from 0.46 : 1 to 0.55 : 1 due to the increase in total liability.
Times interest earned ratio measures the firm’s ability pay the interest with it’s before tax income, so obviously the larger ratios are considered more favorable than smaller ratios. Nestle with a ratio of 31.68 means that the company makes enough income to pay for its total interest expense 31.68 times over in 2012. The company seek for continuous improvement as they improve the figure to 32.78 times in later year. Meanwhile, Dutch Lady declare that they able to pay total interest expenses 57.93 times by their income level, while this figure drop to 56.29 times only at the next