Finance for Managers - Financial Performance of Unilever - Case Study Example

The paper "Finance for Managers - Financial Performance of Unilever" is a brilliant example of a case study on finance and accounting. Unilever is one of the largest organizations in the industry of fast-moving consumer goods. The company is well known for the reliability of its products under trusted brand names. These brands include Walls, Marmite, Vaseline, Dove, Bovril, Comfort, and Impulse, etc. (Unilever UK, 2014).

The company was founded in 1890 under the name Lever Bros. Since inception, the company managed to build its reputation and won consumer’s trust. Unilever’s head office is situated in London (Unilever UK, 2014).

Sources of Information

For the purpose of financial analysis for this report, most of the information has been collected from the financial statement and the company’s website. In addition to this, few other sources were also consulted. These sources are mentioned below.

• Websites (Google, Yahoo Finance, etc.)
• Course Books
• Other related sources on the Internet

Ethical Issues

In preparation of this report, it was aimed to carry all the essential task within the ethical framework and the conclusion has been drawn only on the basis of information obtained from the reliable sources,

Further, it is important to mention that, all the referees have been properly incorporated and none of the information in this report has been self-created.

Answer to Question 1

Sources of Finance and their Advantage and Disadvantages

There are only two types of finance that are; equity and debt. Normally most of the companies in the world use a combination of both equity and debt.

There are advantages and disadvantages of both debt and equity. Debt is a cheaper source of finance since the interest paid on the debt is allowed as an expense for tax purposes but, on the other hand, it is mandatory for the company to pay the cost of debt in any situation even when the company sustains a loss. Equity in comparison to debt is expensive since the amount paid to shareholders in form of dividends is not treated as an expense so it is not allowed for tax purposes. However, payment of the dividend is not mandatory.  If the company sustains a loss in any financial year the director may decide not to pay dividends (Dlabay. Les & Burrow. James, 2008).