1. INTRODUCTION In this assignment we will conduct a business analysis on two major companies in the same industry. Nestlé and the Dutch lady. The analysis will be based on the companies' performances for both the years 2011 and 2012 and the data will be extracted from the companies' financial reports.2. PROFITABILITY2.1 Return of Ordinary Shareholders' Fund (ROSF)According to the above graph, there is an increase in Nestlé's ROSF of 6.63%. So much so that in 2011 the ROSF was 65.36% while in 2012 it was 71.99%. Analytically, in 2011, for every RM of ordinary shares contributed, it was able to generate RM65.36 in net profit. While in 2012, for every RM of ordinary share, it was able to generate RM71.99 in net profit. However, according to the balance sheet, the ordinary share capital in 2012 (RM751.2 million) was higher than that in 2011 (RM652.7 million). In fact, it is a great improvement experienced by Nestlé Berhad of RM98.5 million on share capital, with strong asset productivity, financial structure and most importantly, the business is growing rapidly (Sander & Haley, 2008). However, on the other hand; Dutch Lady also experienced an increase in ROSF. ROSF increased by 4.58% from 2011 to 2012. Furthermore, from the annual financial summary report (p. 4), it appears that Dutch Lady has seen a decline in its equity funds since 2011 (259.2 million RM). as of 2012 (RM216.1 million). Therefore, the growth of ROSF was less affected by the decline in shareholder funds.2.2 Return on Capital Employed (ROCE)ROCE refers to a company's net operating profit relative to its capital employed (Peavler, 2009).The above graph shows the return on capital and...... half of the paper ......and liquidity ratio, most of the Dutch Lady ratios decrease in value (figure) from the financial year 2011 to 2012. From our point of course, the company was experiencing some liquidity problems. As recommended, b the company should reduce its debt and consider meeting its maturing obligations as soon as possible. Apart from this, the company is expected to increase its ability to generate cash from business operations, as it is among the fast moving consumer goods (FMCG) in Malaysia. In conclusion, Nestlé has subsequently recorded a good performance in the last two financial years. And based on our recommendations, they will help the company achieve even better results for the current financial year and also for years to come. On the other hand, Dutch Lady should look more closely at the conclusion we draw, because they could help the company achieve effective liquidity results