Nestle Key Ratios

The decline in ROE from 117.72% to 87.27% suggests reduced profitability, as indicated by a slight decrease in PAT margin from 16.12% to 15.88% over the period.Asset turnover showed a significant drop from 2.39 to 1.85, indicating less efficiency in using assets to generate sales, which negatively impacts overall ROE.Leverage remained stable with a minor decrease in the assets-to-equity ratio from 3.15 to 3.09, indicating that debt levels have not heavily influenced the decline in ROE.

Inventory days increased from 30.30 to 42.94, indicating that Nestle is holding onto stock longer, which could tie up capital and suggest potential inefficiencies in inventory management.Receivable days rose from 4.36 to 5.77, reflecting longer collection times that may impact cash flow, while payable days increased significantly from 89.22 to 112.11, hinting at improved supplier credit but possibly straining relationships.The Cash Conversion Cycle worsened from -54.57 to -63.40, indicating reduced efficiency in converting investments in inventory and receivables back into cash, which could hinder liquidity.

ROE has seen a marked decline from 117.72% to 87.27%, primarily due to decreasing profitability as illustrated by falling PAT margin and asset efficiency overall, reflecting that equity returns are weakening.ROCE also fell significantly from 161.16% to 109.45%, suggesting that the company is less efficient in generating returns from all capital employed, including debt.In terms of ROA, there is a similar trend, decreasing from 37.37% to 28.24%, indicating that overall asset efficiency has deteriorated, which is vital for assessing the company's effectiveness irrespective of capital structure.