Ethic Case Study
Ethic Case Study
In 1866, Henri Nestle laid the foundation of Nestle in Vevey, Switzerland and today it is one of the leading nutritional, food and beverage and health snack Food Company in the world. Nestle has recorded sales of over 45,168 Million CHF until June 2013. Total number of employees of Nestle is more than 300,000 and has operations in every country of the world. Nestle has always followed its business practices with fairness, integrity, honesty and complete compliance with all applicable rules and regulations. Employees of nestle have shown full commitment towards their responsibilities. The reputation of nestle and its goodwill is the most important asset for the company. ("First half 2013:," 2013)
According to the Nestle annual report 2012, more than 75% of their products are as per the criteria and standards as defined by the Nutritional Foundation criteria. More than 6500 of the products for nutrition are renovated and redesigned. More than 650,000 farmers worldwide is working directly for nestle. In 2012, nestle has expanded their operations in developing countries and had opened their first factory in Angola and Congo. As a part of Nestle creating shared value strategy, they have expanded their relationships with farmers all across the world. In Morocco, Nestle is working with local authorities in order to enhance the production of milk. This collaboration of the Nestle and local authorities of Morocco will benefit more than 10,000 farmers. Nestle has collaborated with more than 650,000 small and medium farmers globally in the areas of coffee, cocoa and milk production. The sales of nestle vary in every region. (Boyle, 2013)
As a part of Corporate Social Responsibility, Nestle is supporting the education awareness program of the U.N. The purpose of “Education First Initiative” is designed to teach over 6 million students in more than 50 countries. This project is a part of Nestle Healthy Kids and by the end of 2016; this program will be extended to more than 70 countries. American Academy of Pediatrics has established the “Institute for Healthy Childhood Weight” that is sponsored by
Nestle. This purpose of this project is to generate the clear and accessible supply for communities, health professionals and parents that are based on scientific and government policies. (Boyle, 2013)
The growth of nestle was broad-based in all regions in 2012. In America, the organic growth was approximately 6 percent, 2.5 percent in Europe. While in the case of Asia and Africa, it was recorded up to 10 percent. Nestle is continually taking steps in order to remain the worldwide leader in nutrition, health and wellness and continuously investing in research & development to make their products more healthy and tasty and make solutions for managing diet related health issues of people. (Boyle, 2013)
The cash ratio of nestle is 0.41 that indicates that nestle has a risk of bankruptcy. As the Nestle owned resources that are shorter term, hence the company face difficulties in paying back short-term liabilities. The solvency ratio of nestle is 0.90 showing nestle has more short-term liabilities than short-term assets. Nestle is exposed to credit risk because or various financial instruments they possessed like liquid assets, trade receivables and non-financial assets etc. Nestle is also exposed to liquidity risk. This risk arises when companies fail to pay back their liabilities on time. Nestle is also exposed to market risk as it has dealt in different regions of the world. No doubt, nestle has successfully managed to control risk factor by applying various hedging policies, but the major risk they are exposed to is actual financial crises that has significantly affected their sales. (Boyle, 2013)
References
First half 2013: improving rig momentum drives profitable growth. (2013, August 08). Retrieved
Boyle, M. (2013, October 17). Nestle 2014 revenue growth may reach target, bulcke says.
Retrieved from http://www.bloomberg.com/news/2013-10-17/nestle-says-revenue-from-emerging-markets-accelerated.html
