Obtain and review the 2014 consolidated income statement and balance sheet published by Unilever, which is located online at the Unilever website.

REQUIRED:
a. Compute the profitability, solvency, leverage, and turnover ratios listed in Figure 5€“5. Comment on Unilever€™s earning power and solvency.
b. (Appendix 5A) Use the ROE analysis

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Return on equity Cost of equity Value creation 0.247 0.178 2014 Approximately 7% 2013 Common equity leverage Return on assets Capital structure leverage 0.094 | 0.079 2014 A 2013 0.892 0.884 2.96 2.54 2014 2013 2014 2013 Profit margin Asset turnover 0.054 0.048 2014 A 2013 1.74 1.63 2014 A 2013 Long-term asset Current ratio Long-term debt / Assets turnover 1.08 1.16 0.393 | 0.367 133 145 Quick ratio Rec. turnover 0.063 | 0.065 2013 NA NA 2014 Inv. turnover (days) Days of payables 89.8 92.6 50.4 50.5 2014 2013 Interest coverage 9.29 8.72 2014 2013 Sales & expense management Working capital and long-term asset management Capital structure management