Review the 2012 consolidated income statement and balance sheet published by Unilever, which is located at the end of Chapter 2 in this text.

REQUIRED:
a. Compute the profitability, solvency, leverage, and turnover ratios listed in Figure 5€“3. Comment on Unilever's earning power and solvency.
In Figure 5€“3

b. Use the ROE analysis described in Appendix 5A and discuss the reasons for the change in ROE from 2011 to2012.

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Formula Ratio PROFITABILITY RATIOS Return on equity Return on assets Return on sales (profit margin) Net Income Interest Expense(1 Tax Rate)]/Net Sales LEVERAGE RATIOS Common equity leverage Capital structure leverage Debt/equity ratio Long-term debt ratio SOLVENCY RATIOS Current ratio Quick ratio Net Income/Average Shareholders' Equity Net Income Interest Expense Tax Rate)]|/Average Total Assets Net Income/ Net Income Interest ExpenseTax Rate)l Average Total Assets/Average Shareholders' Equity Average Total Liabilities/Average Shareholders' Equity Long-Term Liabilities/Total Assets Current Assets/Current Liabilities (Cash + Marketable Securities +Net Accounts Receivable)/ Current Liabilities Interest coverage Accounts payable turnover*Cost of Goods Sold/Average Accounts Payable ASSET TURNOVER RATIOS* Receivables turnover Inventory turnover Fixed assets turnover Total asset turnover OTHER RATIOS (Net Income Tax Expense Interest Expense Interest Expense Net Credit Sales/Average Accounts Receivable Cost of Goods Sold/Average Inventory Sales/Average Fixed Assets Sales/Average Total Assets Earnings per share Price/earnings ratio Dividend yield ratio Stock price return Net Income/Average Number of Common Shares Outstanding Market Price per Share/Earnings per Share Dividends per Share/Market Price per Share (Market Pric Market Price+ Dividends)/Market Price