Ratio Danone English

Financial analysis of Danone

Danone is a multinational firm. It sells and produces different kind of food goods all over the world.
Today, we are going to compare the financial situation of Danone in 2018 and 2019, and we’ll compare it to a competitor -> Nestlé for 2019.

For the first part, we will analyze the profitability of Danone and its competitor Nestlé.

About the ROE ratio :

We can see that Danone’s Return on Equity ratio is less than Nestlé’s.
It means that Danone is not attractive for shareholders like Nestlé.

Following the 2nd position of Danone on the ROE, we can analyze the ROA ratio to understand the profitability.

As we have seen before, Danone is on the 2nd position after Nestlé. The Return on Assets ratio is not enough to have an efficient profitability.

After these 2 first ratios, we can finish this category of “Return” with the R.O.I ratio.

The Return on Investment ratio informs us about the investments by taking into account the money invested and the money earned. Here, Nestlé is already on the 1st place.

This result is linked with the others.  That’s why Danone is not on the 1st place.

We can suppose that Danone has to take care about the investments and maybe find new ways to reach the 1st place.

For the second part, we will analyze the solvency part analyzing the Debt to Equity ratio.

Here, Danone is on the top and it means that this ratio is the relative proportion of equity and debt used to finance Danone’s assets.

For the third part, we are going to analyze the liquidity of Danone.

First, the Current ratio measures a company's ability to pay short-term obligations or those due within one year is :

Both Danone and Nestlé have ratios below 1.

This means that there is still some way to go to ensure that their debts are less than what they have earned.

Linked to the Current ratio, we can analyze the Quick ratio of the firm :

This ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.

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