Comparative Financial Study - Danone Vs Nestlé Essay

2002 WordsMar 8, 20129 Pages
Versus Executive Summary Founded in 1867, Nestlé is a prominent food manufacturer who benefits a lot form the accumulated experiences gained from its long history and now it is ranked No.1 in food industry. Comparatively, Danone is a dynamic emerging company with a high reputation. The financial hurricane which was triggered by subprime crisis and later swept the world has caused considerable impact on global economy, and the food industry is no exceptions. The economic situation has been patched up since the first quarter of 2009, thus the reviving post-crisis era, the critical period of companies’ development, commence. Moreover, it’s high time to test both companies’ business philosophies and the abilities of conducting those conceptions. Facing huge uncertainties accompanied with opportunities, both companies strive to attain their objective and to successfully conduct their business philosophy. Intending to give suggestions on investments, this paper first expounds the current and futre economic situation of food industry, then analyzes both companies’ business philosophy and long-run objectives and valuates DCF to provide assistance to make buying desicion, finally discusses the risks that are likely to affect each company’s ability to achieve their goals. After using financial analysis techniques to analyze the performances of the companies, we decided to buy both companies, for Nestlé provides a higher return with higher volatility while Danone yields less but has lower risks. Keywords Nestlé, Danone, economic conditions, business philosophy, long-run objectives, risks Executive Summary Part 14 Part 25 Business philosophy and long-term objective5 Pro-Forma Analysis5 Analysis of Nestlé6 Analysis of Danone6 Part 38 1. General risks8 2. Specific risks8 a) Existing share holders8 b) Potential institutional equity investors8

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