Afs Project

7/25/2019 Afs Project

1/37

MID &FINAL PROJECT

SUBMITTED BY

STUDENT NAMEABDULREHMAN ROLL NUMBER13262

SUBMITTED TOSIRSALMAN

TOPICFINANCIAL RATIOS DEFINATIONS (MID

PHASE)&

CROSS SECTIONALANALYSIS BETWEENFAUJI FERTLIZER&

ENGRO FERTLIZER(FINAL PHASE)

SUBMISSION DATE3!DECEMBER!21"

AC#NOWLEDGEMENT1 $ P % '

F I N A N C I A L S T A T E M E N T A N A LYSIS


2/37

MID &FINAL PROJECTFirst of all I am grateful to Almighty Allah who

in spite of all my weaknesses enabled me to complete thi

project.

I am also indebted to my teacher SIR SALMANfor his kin

of guidance and supervision. Under their direction I get th

opportunity to polish my concealed ualities and ski

moreover! his timely help paved a way for me to complet

this work. It was surely their method of teaching " eagernes

for imparting knowledge that I did not #nd much di$culty t

give in to my thoughts and information. %e motivated us t

work hard and to achieve high&level performance. 'h

development of this project has enabled me to bette

comprehend the contents of #nancial analysis. I feel highl

privilege to ascribe the most and ever burning (ame of m

gratitude and deep scene of devotion to MR SALMAN wh

taught us FINANCIAL STATEMENT ANALYSIS with hear

and also gave several guidelines regarding accomplishmen

of this project. Further on! am grateful to my parent

it is the result of their prayer

that I am succeeded for what I have done today.

2 $ P % '



3/37

MID &FINAL PROJECT

I dedica

this project to my highly regarded teacher Mr. Salman Masood wh

provided me all guidelines to prove myself. I am grateful to him for giving m

this opportunity to e)plore new dimensions which will help me in a long run. %

guided us and taught us with di*erent techniues! which enabled us t

complete this project! as well as for unconventional style of teaching an

maintaining very open and competitive atmosphere within the class! whic

made the subject very interesting for me the most important thing is that th

knowledge which we have studied in our subject was all that same which w

have observed practically.

May god bless youAmeen!

3 $ P % '



4/37

MID &FINAL PROJECT

M*'+, -.+*./L0*

D%4 4%5'4 / +''7%85'4

It is the ratio of gross receivables to net sales/365 also known as the number of days

receivables it tells number of days it will take to collect an account receivable against yo

sale. Its formula is:

Gross receivables

Net sales/365

D%4 4%5'4 / /7'/*.+

It is the ratio of inventory to CG/365 this ratio basically measures average time re!uired

com"any to transform its inventory into sales. Its formula is:

Endinginventory

CGS /365

A./* +''7%85' *+/.7'+

#ccount receivable turnover is a com"any$s annual sales divided by the com"any$s averag

gross balance in its #ccounts %eceivable account generally is a ratio which tells that numb

of times a business collects its average receivables. Its formula is:

Net sales

AverageGross Receivables

7 I/7'/*.+ *+/.7'+

It is the ratio of cost of goods sold to average inventory in sim"le sense a ratio whi

calculates number of times a business sells o& its entire inventory in a year. Its formula is:

CGS

Average Inventory

9 $ P % '



5/37

MID &FINAL PROJECT7 A./* +''7%85' *+/.7'+ / %4

It is the ratio of average gross receivables to net sales/365 moreover this ratio s"eci'es th

li!uidity of the com"any$s receivables in days. Its formula is:

AverageGross ReceivablesNet Sales /365

7 I/7'/*.+ *+/.7'+ / %4

It is the ratio of average inventory to cost of goods sold/365 generally this ratio s"eci'es th

li!uidity of the com"any(s inventory in days. Its formula is+

Averageinventory

CGS /365

7 O-'+%*/ 5'

)his ratio is the sum of accounts receivables turnover in days and inventory turnover in day

mostly o"erating cycle is less than one year this ratio tells the di&erence of times betwee

the ac!uisition of inventory and recognition of cash from sales of inventory. Its formula is:

*

(Accounts receivableturnoverdays)+(Inventory turnove rdays)

7 W.+:/ %-*%5

It is the di&erence of current assets of the com"any with current liabilities it com"ar

current assets to current liabilities. Its formula is:

= Curren asses "urren l#ab#l##es

; S%5'4 *.


6/37

MID &FINAL PROJECT; C%4= +%*.

It is the ratio of cash and its e!uivalent to total current liabilities moreover this is a rat

which determines a com"any(s ability to "ay o& its current obligations with only cash and

e!uivalent. Its formula is

Cash+Cash equivalent+Marketable Securities

Total current liabilities

; C++'/* +%*.

It is a ratio of total current assets to total current liabilities it is an im"ortant ratio whic

calculates a com"any(s ability to "ay o& its short term liabilities. Its formula is:

Total current assetsTotal current libilities

; A *'4* +%*.

#cid test ratio is also known as !uick ratio it is the ratio of total current assets e+clud

inventory to total current liabilities it com"ares the cash "lus cash e!uivalents and accoun

receivable to the current liabilities. Its formula is:

Total current assetsinventories

Total current libilities

L./ *'+, '8* -%/ %85* +%*.

T,' /*'+'4* '%+/' +%*.

It is the ratio of o"erating "ro't to interest amount in black and white following rat

s"eci'es com"any ca"acity to meet its interest "ayments. Its formula is:

Recurring earnings e!cluding interest e!pense ta! e!pense equity earnings

including non contorlling interest

Interest e!pense including capitili"ed interest

F;' =%+' .7'+%' +%*.

6 $ P % '



7/37

MID &FINAL PROJECTIt is the ratio of o"erating "ro't "lus interest "ortion of rental to interes

amount and interest "ortion of rental in a clear sense following ratio measures a 'rm abili

to "ay all of its '+ed charges or lease amounts from its o"erating "ro't. Its formula is:


including non contorlling interest+interest portion o# rentalInterest e!pense including capitili"ed interest+interest portion o# rental

D'8* +%*.

It is the ratio of total liabilities to total assets of the com"any moreover a ratio whic

calculate a 'rm "ortion of liabilities in com"are with total assets. Its formula is:

Total libilities

Total assets

7 D'8* '0* +%*.

It is the ratio of total liabilities to total e!uity moreover, this ratio calculate a 'rm tot

liabilities in com"are to its e!uity in order to 'nance com"any(s assets. Its formula is:

Total libilities

Total equities

7 D'8* *. *%/85' /'*


8/37

MID &FINAL PROJECTIt(s the ratio of net "ro't to net sales generally a ratio which

calculate amount of net income earned by a com"any by using each dollar of sales. I

formula is:

Net inco$e be#ore nonrecurringite$sn on controllinginterest

net sales

G+.44 -+.>* ,%+/ +%*.

It is the ratio of gross "ro't to net sales and a kind of ratio which tells gross "ro't as

"ro"ortion of sales after subtracting cost of goods sold e+"ense. Its formula is:

Gross pro#it

Net sales

O-'+%*/ /.,' ,%+/

It is the ratio of o"erating income to net sales in a clear sense a ratio which shows o"eratin

income generated by each dollar of sales. Its formula is:

%peratin g inco$e

net sales

7 T.*%5 %44'* *+/.7'+

It is the ratio of net sales to average total assets it tells how e-ciently a 'rm used its assets

order to "roduce sales. Its formula is:

Net sales

Averagetotal asse ts

7 O-'+%*/ %44'* *+/.7'+

It is the ratio of net sales to average o"erating assets this ratio indicates the "ro"ortion

o"erating assets in order to generate net sales. Its formula is:

Net sales

Average operating assets

@ $ P % '



9/37

MID &FINAL PROJECT7 S%5'4 *. >;' %44'*

It is the ratio of net sales to average '+ed assets following ratio calculate ability of a 'rm

"roduce net sales by using its '+ed assets. Its formula is:

Average

Net sales assets

7 R'*+/ ./ %44'*4

It(s the ratio of net income after ta+ to average total assets it tells how e-ciently a com"an

is using its assets in order to "roduce its earning. Its formula is:

Net inco$e be#ore nonrecurringite$snon controllinginterest

Average totalassets

7 R'*+/ ./ *.*%5 '0*

It is the ratio of net incometo average total e!uity following ratio calculates the income a 'r

earned by using its shareholders investment. Its formula is:

Net inco$ebe#ore non recurringite$snon controllinginterest & dividendon redee$able pre#erred stock

Average totalequity

; R'*+/ ./ .,,./ '0*

It is the ration of net income to average total common e!uity this ratio calculate net incom

a com"any "roduce by using its common shareholder investment in com"any. Its formula is

Net inco$e be#ore nonrecurringite$snon controllinginterest & pre#erred dividend

Averagetotal co$$onequity

; R'*+/ ./ /7'4*,'/*

$ P % '



10/37

MID &FINAL PROJECTIt is the ratio of net income to average total investment

generally this ratio s"eci'es amount of net income a com"any generates by using its tot

investment. Its formula is:

Net inco$e be#ore non recurringite$snon controlling interest

+erest e!pense(1ta!)Average( longter$liabilities+ totalequity)

; E%+//4 -'+ 4=%+'

It is the ratio of net income after "referred dividend to number of common shares this rat

indicates how many dollars of net income have been earned by each share of common stoc

Its formula is:

Net inco$e & pre#erred dividend

Nu$ber o# shares outstanding

; D7'/ -%.* +%*.

It is the ratio of dividend "er common share to earnings "er share this ratio indicat

"ercentages of earnings given to share holders in dividends. Its formula is:

'ividend per co$$on shareEarnings per share

; D7'/ '5

It is the ratio of dividend "er common share to market value of share this ratio indicate

amount of dividend given to shareholders relative to market value "er share. Its formula is:

'ividend per co$$on share

Market price per co$$on share

;7 P!E +%*.

/ ratio is the one of the most "owerful tool to look how highly value a com"any stock is it

the ratio of market "rice "er common share relative to its earnings "er share. Its formula is

1 $ P % '



11/37

MID &FINAL PROJECT

Market price o# co$$onshare

Earnings per share

;7 . +'*%/' '%+//4 +%*.

It is the ratio of net earnings after all dividend to net income this ratio s"eci'es "ercentag

of net earnings not "aid out as dividend and retained by com"any. Its formula is:

Net inco$e & alldividends

Net inco$e

;7 B..: 7%5' -'+ 4=%+' +%*.

It is the ratio of total stock holders( e!uity after "referred stock to total number of shar

outstanding this ratio com"ares the amount of stockholders$ e!uity to the number of share

outstanding. Its formula is:

Total stockholders ( equity & pre#erred stock

Totalnu$ber o# shares outstanding

11 $ P % '



12/37

0#12I0/%)3I4/

%/5G%6

0/%)3I4/%

0/%)3I4

/%

MID &FINAL PROJECT

SLELECTED COMPANIES

INDUSTRIAL SECTOR

C++'/* /4*+%5 4*%*4*

7a8or 0ertili9ers industries of akistan "roduced di&erent kind of fertili9ers with ranking

ngro akistan 331rea roduction share 0au8i 0ertili9ers Goth 7achi; 3@0au8i 0ertili9e

awo

?ercules k"; 6nly 00 "roduces >#.

12 $ P % '



13/37

?65/)@/AC/33/5C

/0#I%5/

C65I)/5

C@

MID &FINAL PROJECTABOUT FAUJI FERTILIZER

0au8i 0ertili9er Com"any imited 00C; is the largest

chemical fertili9er "roducer of akistan with biggest

market share in the country. 0au8i 0ertili9er Com"an

imited 00C;, the largest urea manufacturer in t

country, was incor"orated on 7ay B, DEFas a 8oint venture between 0au8i 0oundatio

akistan and 7/s ?aldor )o"soe #/ of >enmark. It was established to 'll the "ro8ected ga"

demand and indigenous "roduction. Com"any shares are held by 0au8i 0oundation 3H; a

various investment com"anies, 'nancial institutions and individuals. )he Com"any was liste

on arachi and ahore tock +changes in DEEDand on Islamabad tock +change in DEE

Com"any em"loyees were also allotted shares for motivation and "romoting a sense "artici"ation.


14/37

00C/5/%G@3I7I)/>

##%I

0#12I0%/? K0%//4/3I7I)/>

0#12I0/%)3I4/

%

/ngro fertli9er

unland Cro"scare

.rime #groChemical K0ertli9ers

arshima0ertli9er

MID &FINAL PROJECT

C.,-'**.+4

P+.*4

19 $ P % '



15/37

>#.

13.?I#)/ 60.6)#?

65#


16/37

Commtment

#""reciation

3eadershi"=uality

Innovation

/ngro 0oods3imited

/ngro /+em".rivate 3imited

/ngro .owergenlimited

/ngro .olymersK Chemical

3imited

/ngro Qo"ak3imited

/lengy )erminal.akistan3imited

MID &FINAL PROJECTO)o be the "remier akistani enter"rise with a global reach keen

"ursuing value creation for all stakeholdersP

C.+' 7%5'4

S84%+'4

P+.*4

16 $ P % '



17/37

/ngro 1rea

/ngro >#.

/ngro 5.

/ngro4arkhe9

4ingro

0au8i fertli9er

unland Cro"scare

.rime #groChemical K0ertli9ers

arshima0ertli9er

MID &FINAL PROJECT

C.,-'**.+4

CROSS SECTIONAL FINANCIAL ANALYSIS

BETWEEN ENGRO & FAUJI FERTLIZER

COMPANY (219 FY)

L0*

1 D%4 4%5'4 / +''7%85'4 Gross receivables

Net sales/365

1? $ P % '



18/37

MID &FINAL PROJECT

=uantitativ

e

0au8i

fertili9erJJD ! DJBDF/365 9 %4 %+./

ngro

fertili9erFD !6DJE3/365 " %4 %+./

=ualitative

Rhile considering both above 'gures of day(s sales in

receivables of both com"anies it is clear that both com"anies

collect it receivables against its credit sales !uickly and not

having "roblems related collection of receivables as fau8i

fertili9er is collecting more s"eedily than engro and having one

day di&erence.

2 D%4 4%5'4 / /7'/*.+ Endinginventory

CGS /365

=uantitativ

e

0au8i

fertili9erEDF5B ! 5BD36FE/365 ? %4

ngro

fertili9erDDBBEJJ !3JJJ3/365 1 %4

=ualitative

?ereby, fau8i fertili9er is converting its inventory into sales

within F days whereas, engro is converting it into DB days

means fau8i fertili9er more swiftly convert its inventory into

revenue.

3 A./* +''7%85' *+/.7'+ Net sales

AverageGross Receivables

=uantitativ

e

0au8i

fertili9erDJBDF ! F63J5E 16 *,'4

ngro

fertili9er6DJE3 !F335 ?@ %4

=ualitative

#s considering above 'gures of both com"anies fau8i fertili9er

is su"erior than engro as it is collecting its average receivables

DB6 times in a year than engro fertili9er which have F times

'gure a di&erence of J.

9 I/7'/*.+ *+/.7'+ CGS

Average Inventory

1@ $ P % '



19/37

MID &FINAL PROJECT

=uantitativ

e

0au8i

fertili9er

5BD36FE! 6D5 @ *,'4

ngro

fertili9er

3JJJ3 !DJDJE3 31 *,'4

=ualitative

#fter com"aring both 'gures engro fertili9er is far leading in it

as it is selling 3D times its inventory in a whole year than fau8i

fertili9er who sold it out 8ust times in a year.

" A./* +''7%85' *+/.7'+ / %4 AverageGross Receivables

Net Sales /365

=uantitativ

e

0au8i

fertili9er

F63J5E ! DJBDF/365 392 %4

ngro

fertili9er

F335 !6DJE3/365 96" %4

=ualitative

#fter having a look u"on above derived 'gures its clear fau8i

fertili9er is swifter to li!uidate its average receivables as it

takes 8ust 3 days while engro has to take around 5 days to

li!uidate its average %eceivables.

6 I/7'/*.+ *+/.7'+ / %4 Averageinventory

CGS /365

=uantitativ

e

0au8i

fertili9er

6D5 ! 5BD36FE/365 96? %4

ngro

fertili9er

DJDJE !3JJJ3/365 116 %4

=ualitative

Rhile com"aring both 'gures fau8i fertili9er takes fewer days in

order to li!uidate its inventory whereas engro fertili9er takes

more days in order to li!uidate its inventory.

? O-'+%*/ 5'

* (Accounts receivableturnoverdays )+(Inventory turnoverdays)

=uantitativ

e

0au8i fertili9er 3.J S .6F @1 %4

ngro .65 S DD.6F 1632 %4

1 $ P % '



20/37

MID &FINAL PROJECTfertili9er

=ualitative

"erating cycle of fau8i fertili9er is days whereas, for engro

its D6 days means double of fau8i fertili9er which sim"li'es that

fau8i fertili9er o"erating cycle is faster than engro. 0au8i

fertili9er is far better than engro in this sense.@ W.+:/ %-*%5 = Curren asses "urren l#ab#l##es

=uantitativ

e

0au8i

fertili9er

353JJ L 53DDB3 (1?39@?")

ngro

fertili9er

36JE65D M 35556JJ ?9313

=ualitative

#fter deriving both 'gures of working ca"ital its vivid that fau8i

fertili9er not having enough working ca"ital in order for its daily

re!uirement as it goes negative because its current liabilities

are much higher than its current assets in contrast, engro has

enough resources and amount of current assets are higher

than current liabilities which is why its working ca"ital is

"ositive.

S%5'4 *.


21/37

MID &FINAL PROJECT

=uantitativ

e

0au8i

fertili9er

DDF3F6F ! 53DDB3 2

ngro

fertili9er

D5J !35556JJ 11

=ualitative

0au8i fertili9er has not much cash or its e!uivalent to "ay o& its

current liabilities as they have 8ust J H in accordance of it on

the other hand engro fertili9er is su"erseding by E times than

fau8i fertili9er and has much ability to "ay o& its current

obligations by using cash or cash e!uivalent.

11 C++'/* +%*. Total current assets

Total current libilities

=uantitativ

e

0au8i

fertili9er

353JJ ! 53DDB3 66

ngro

fertili9er

36JE65D !35556JJ 13

=ualitative

#fter evaluating current ratios of both com"anies its "lain that

engro fertili9er is good and in a strong "osition in order to meet

its current obligation by current assets as they have DB times

more current assets than current liabilities whereas, fau8ifertili9er has not much current assets for this regard and it has

more current obligations than its current assets which is not a

good sign for the fau8i.

12 A *'4* +%*. Total current assetsinventories

Totalcurrent libilities

=uantitativ

e

0au8ifertili9er

353JJ M EDF5B ! 53DDB3 69

ngro

fertili9er

36JE65D M DDBBEJJ !35556JJ @

=ualitative 0ollowing ratio com"ares that either com"any has enough cash

"lus cash e!uivalents and accounts receivable to the current

21 $ P % '



22/37

MID &FINAL PROJECTliabilities as engro fertili9er is also in stronger "osition than

fau8i fertili9er as after e+cluding inventory from current assets

their current assets are around alike with their current liabilities

but on the other hand fau8i fertili9er still not have good 'gures

as current assets after e+cluding inventories is still less than

current liabilities means fau8i fertili9er is not in the "osition to

"ay o& its current liabilities by using current assets as current

assets are much less than current obligations.

L./ *'+, '8* -%/ %85* +%*.

13 T,' /*'+'4* '%+/' +%*.

Recurring earnings e!cluding interes t e!pense ta! e!pense equity earnings

including non contorlling interest

Interest e!penseincluding capitili"ed interest

=uantitativ

e

0au8i

fertili9er

J6FDFFD ! EB 21 *,'4

ngro

fertili9er

DF3EFD !66J53EF 26 *,'4

=ualitative

#fter assessing time interest earned ratio of both com"anies it

is "retty much clear that fau8i fertili9er is in good health in this

regard as if it interest e+"ense am"li'ed by JE times it will

have ability to "ay it o& from its o"erating "ro't whereas,

engro fertili9er has not much ability than fau8i fertili9er to "ay

o& its interest e+"ense as they have 8ust J times ability to "ay

o& this e+"ense by using their o"erating "ro't.

19 F;' =%+' .7'+%' +%*.

22 $ P % '



23/37

MID &FINAL PROJECT


including non contorlling interest+interest portion o# rentalInterest e!pense including capitili"ed interest+interest portion o# rental

=uantitativ

e

0au8i

fertili9er

J6FDFFD S 3BDDF ! EB S 3BDDF 2@1

*,'4

ngro

fertili9er

DF3EFD S D36J3BB !66J53EF S D36J3BB

23 *,'4

=ualitative

#fter 8udging '+ed charge coverage ratio of both com"anies it

is obvious that fau8i fertili9er is far better and dominant in this

regard as well as if it interest "lus interest "ortion of rental or

lease e+"ense augmented by J times it will have ca"acity to"ay it o& from its o"erating "ro't whereas, engro fertili9er has

not much ca"ability than fau8i fertili9er to "ay o& it o& as they

have 8ust J times knack.

1" D'8* +%*. Total libilities

Total assets

=uantitativ

e

0au8ifertili9er

6BEJD3D ! 656D66J ?

ngro

fertili9er

F6EE353B !DDDFD6J5 6

=ualitative

#fter deriving debt ratio of both com"anies it disclose that fau8i

fertili9er and engro fertili9er is almost close and near to have

same debt ratio as it is around B.F which sim"li'es that both

com"anies have 3B times more assets in order to meet its total

liabilities.

16 D'8* '0* +%*. Total libilities

Total equities

=uantitativ

e

0au8i

fertili9er

6BEJD3D ! J566E53D 23?

23 $ P % '



24/37

MID &FINAL PROJECTngro

fertili9er

F6EE353B !3FBE5 223

=ualitative

#fter 'guring out debt e!uity ratios of both com"anies it

illustrates that both com"anies are 'nanced through e+ternal

debts more than its share holder e!uity as fau8i fertili9er totalliabilities are J. times more and engro fertili9er total liabilities

are J.J times more than total e!uities.

1? D'8* *. *%/85' /'*


25/37

MID &FINAL PROJECT

=ualitative

Rhile evaluating both com"anies net "ro't margin ratio

reveals that fau8i fertili9er "roduce more net income through its

net sales for the year JBD whereas, engro fertili9er is lagging

by .E and "roduce less net income through its net sales as it

stands B.D3 than fau8i fertili9er.

1 G+.44 -+.>* ,%+/ +%*. Gross pro#it

Net sales

=uantitativ

e

0au8i

fertili9er

3DDB33 ! DJBDF 3@

ngro

fertili9er

JJ6BJ5DD !6DJE3 36

=ualitative

Rhile considering both com"anies gross "ro't margin ratio

reveals that there is no much di&erence the ratios of both

com"anies but fau8i fertili9er hereby also have a lead of .BJ

which is not much signi'cant than the 'gure of engro fertli9er

by and large, fau8i fertili9er "roduce more gross "ro't than

engro fertili9er.

2 O-'+%*/ /.,' ,%+/ %perating inco$e

net sales

=uantitativ

e

0au8i

fertili9er

J6FDFFD ! DJBDF 3

ngro

fertili9er

DF3EFD !6DJE3 2@

=ualitative #fter 'guring out following ratios of both com"anies it shows

that fau8i fertili9er as "revious mention trend is su"erseding by

B.BJ than engro fertli9er as it "roduce more o"erating income

of B.3B than engro fertli9er which stands at B.J illustrate that

fau8i fertli9er is su"erior in generating o"erating income

through its gross "ro't by managing its e+"ense more

2" $ P % '



26/37

MID &FINAL PROJECTe&ectively.

21 T.*%5 %44'* *+/.7'+ Net sales

Averagetotal assets

=uantitativ

e

0au8i

fertili9er

DJBDF ! FFDE536B 1"

ngro

fertili9er

6DJE3 !DDBFBBJB6 ""

=ualitative

Considering the total asset turnover ratios of both com"anies

clari'es that fau8i fertili9er ratios is much higher than engro

fertli9er is im"lying that fau8i fertli9er is using its assets more

e-ciently in order to "roduce net sales in corres"onded engro

fertli9er.

22 O-'+%*/ %44'* *+/.7'+ Net sales

Average operating assets

=uantitativ

e

0au8i

fertili9er

DJBDF ! DEJ6EB3 921

ngro

fertili9er

6DJE3 !FFD3EBD @

=ualitative

)aking into consideration of both com"anies ratios 'gures

s"ecify that fau8i fertli9er is utili9ing its o"erating assets more

e-ciently in order to generate sales than engro as it 'gures

stands at .JD in contrast, engro having B.B far less than fau8i

fertli9er. 0au8i fertli9er is racing away in a sense.

23 S%5'4 *. >;' %44'*Average

Net sales

assets

=uantitativ

e

0au8i

fertili9er

DJBDF ! 6BEEB 1?6

ngro 6DJE3 !FF36EB5 ?

26 $ P % '



27/37

MID &FINAL PROJECTfertili9er

=ualitative

)aking into account of both com"anies ratios 'gures state that

fau8i fertli9er is e+ercising its '+ed assets more creatively K

e-ciently in order to generate sales than engro as it 'gures

stands at D.F6 in distinguish, engro having B.FE far less thanfau8i fertli9er.

29 R'*+/ ./ %44'*4 Net inco$ebe#ore nonrecurringite$snon controllinginterest

Average total assets

=uantitativ

e

0au8i

fertili9er

DDFBF6B ! FFDE5366 29

ngro

fertili9er

JBFE6B !DDBFBBJB6 ?

=ualitative

#fter a""raising return on asset ratio of both com"anies it is

"retty much clear that fau8i fertili9er utili9ed its assets much

e-ciently and in return "roduced more earnings as it 'gure

su"er cede by 3 times almost than engro.

2" R'*+/ ./ *.*%5 '0*

Net inco$e be#ore non recurringite$snon controllinginterest & dividendon redee$able pre#erred stock

Average total equity

=uantitativ

e

0au8i

fertili9er

DDFBF6B ! J5DB3EF ?1

ngro

fertili9er

JBFE6B !JEFF366 2?

=ualitative

Rhile evaluating both com"anies( ratios of return on total

e!uity indicates that fau8i fertli9er make their shareholders

investment more "roductive for the sake of generating net

earnings for the year than engro fertli9er.

26 R'*+/ ./ .,,./ '0*

2? $ P % '



28/37

MID &FINAL PROJECT

Net inco$e be#ore nonrecurringite$snon controllinginterest & pre#erred dividend

Averagetotal co$$onequity

=uantitativ

e

0au8i

fertili9er

DDFBF6B ! J5DB3EF M ?1

ngro

fertili9er

JBFE6B !JEFF366 M 2?

=ualitative

#s both com"anies have not issued any "referred shares

eventually "referred dividend will result in a sim"le 9ero for

both sides and return on common e!uity ratio will have 'gures

alike return on e!uity for both com"anies at where fau8i

fertli9er e-ciently used their common shareholders(

investment in regarding "roducing of net income for their

common shareholders.

2? R'*+/ ./ /7'4*,'/*

Net inco$e be#ore non recurringite$snoncontr ollinginterest+interest e!pense(1ta!)

Average(long ter$liabilities+total equity)

=uantitativ

e

0au8i

fertili9er

DDFBF6B ! 33DJ65E6 "9

ngro

fertili9er

JBFE6B !D55JB 1

=ualitative

#fter having a glance of both com"any(s following ratio

e+em"li'es that fau8i fertli9er "roduced much greater net

earnings after e&ectively utili9ing its total investment rather

than engro fertli9er sim"li'es that fau8i fertli9er much

"roductive than engro.

2@ E%+//4 -'+ 4=%+' Net inco$e & pre#erred dividend

Nu$ber o# shares outstanding

2@ $ P % '



29/37

MID &FINAL PROJECT

=uantitativ

e

0au8i

fertili9er

DDFBF6BBBB M B ! DJFJJ3JF 192@ RS

ngro

fertili9er

JBFE6BBBB M B !DBBBBBBBB 62 RS

=ualitative

amount of both com"anies are as fau8i fertli9er stands at

D.J and engro fertli9er it is 6.JE indicates that fau8i fertli9er

shareholder can earn more amount in against of their share in

that com"any rather than engro fertli9er. ike fau8i fertli9er can

earn D % whereas, engro fertli9er can earn 8ust 6 %. 0au8i

fertli9er shareholder has more bene't.

2 D7'/ -%.* +%*. 'ividend per co$$onshare

Earnings per share

=uantitativ

e

0au8i fertili9er D3.65 ! D.J "

ngro

fertili9er

3 !6.JE 9@

=ualitative

Rhile com"aring both com"anies ratios of dividend "ayout

shows fau8i fertli9er gives out around E5 H of their annual

earnings to their shareholders and retained very less

"ro"ortion from net earnings whereas, engro fertli9er retained

around half of their earnings and give out rest of the amount to

their shareholders.

3 D7'/ '5 'ividend per co$$on share

Market price per co$$on share

=uantitativ

e

0au8i fertili9er D3.65 ! DDF.D 12

ngro

fertili9er

3 !5 9

=ualitative #fter evaluating both com"anies dividend yield ratio indicatingthat dividend yield ratio of fau8i fertli9er have same trend as

we observe in "revious means hereby, it(s also more than

engro in a sim"le sense fau8i fertli9er is giving more dividend to

its shareholders as com"are to market "rice of its share like its

market "rice of the share is DDF % and it is giving around D

2 $ P % '



30/37

MID &FINAL PROJECT% out of it. 0or engro fertli9er its market "rice of the share is

5 % and is giving 3 % as dividend out of it.

31 P!E +%*. Market price o# co$$onshare

Earnings per share

=uantitativ

e

0au8i fertili9er DDF.D ! D.J @2

ngro

fertili9er

5 !6.JE 13"

=ualitative

Rhile considering both com"anies / ratios shows that /

ratio of engro fertli9er is more than fau8i fertli9er means engro

stock is trading multi"le of D3.5 and fau8i stock is trading a

multi"le of .J in other sense we can say an investor is ready

to give .J times more for each % earning of fau8i fertli9er andD3.5 times more for each % earning of engro. In a clear sense

/ ratio of engro is better than fau8i fertli9er.

32 . +'*%/' '%+//4 +%*. Net inco$e & all dividends

Net inco$e

=uantitativ

e

0au8i

fertili9er

DDFBF6BBBB M DF5J65BBB ! DDFBF6BBBB

9

ngrofertili9er

JBFE6BBBB M JBBBBBBBB !JBFE6BBBB 9

=ualitative

Rhile com"aring both com"anies H of retained earnings

stated that more H of earnings is retained by engro around half

of their earnings unlike fau8i fertli9er who 8ust maintained and

secured 8ust H out of total annual earnings in retained

earnings account and give out E6H of their earnings to their

shareholders as dividend.

33 B..: 7%5' -'+ 4=%+' +%*. Total stockholders ( equity & pre#erred stock

Totalnu$ber o# sharesoutstanding

=uantitativ

e

0au8i

fertili9er

J566E53DBBB M B ! DJFJJ3JF 21? RS

3 $ P % '



31/37

MID &FINAL PROJECTngro

fertili9er

3FBE5BBB M B !DBBBBBBBB 296 RS

=ualitative

#fter evaluating both ratios of the com"any of this ratio reveals

that engro fertli9er has more book value than fau8i fertli9er as

com"anies goes to li!uidate engro fertli9er shareholder will getmore amount against "er share J.D6 than fau8i fertli9er

shareholder.


32/37

MID &FINAL PROJECTworking ca"ital to su""ort its sales on the other side engro is using

working ca"ital e&ectively in order to "roduce net sales. 0au8i

fertili9er has not much cash or its e!uivalent on the other hand eng

fertili9er has much ability to "ay o& its current obligations.

Conse!uently and likewise, Current ratio of engro is much better thfau8i fertli9er. verall engro fertli9er is in good "osition than fa

fertli9er in concerning li!uidity "oint of view as fau8i fertli9er has not enough current asse

to "ay o& its current obligations but fau8i fertli9er inventory and account receivab

management is far better than engro fertli9er.

In accordance of long term debt "aying ability it is "retty clear that fau8i fertili9er is in goo

health in this regard as it has much more ca"acity to "ay it o& than engro fertili9er it

obvious that fau8i fertili9er is dominant over here. >ebts ratios of both com"anies almo

close and near to have same debt ratio clarify both com"anies have enough assets to me

its long term liabilities.


33/37

MID &FINAL PROJECTtheir share rather than engro fertli9er. 0au8i fertli9er gives out around

E5 H of their annual earnings to their shareholders and retained very less "ro"ortion fro

net earnings whereas, engro fertli9er retained around half of their earnings of JBD ye

furthermoreT >ividend "ayout ratio of fau8i fertli9er is twice over engro.

In a nut shell, in conclusion both com"anie

"erformance remain consistent in last some years bu

on the whole fau8i fertli9er is better for followin

reasons as they have tight account receivables "olicies

better inventory and accounts receivables managemen

but somehow fau8i fertli9er is facing current asset

management "roblems but after looking its "reviou

history its current assets is much better than engro

0au8i fertli9er has much more ca"acity to "ay o& itlong term debts in contrast engro has not muc

ca"acity to "ay o& their long term debts sim"li'es tha

33 $ P % '



34/37

MID &FINAL PROJECTchances of risks more associated with

engro than fau8i fertli9er. A/ /7'4*.+will certainly w

go and would like to invest in fau8i as fau8i fertli9er ha

thirty times ca"acity to "ay o& its debts whereas engr

can 8ust "ay it o& for lesser times. )aking in accoun

fau8i fertli9er as they are e&ectively or more creativel

utili9ing their assets and owner investments in order t

generate more revenue, gross K o"erating "ro't an

net earnings rather than engro, fau8i fertli9er remaine

and raced away in this than engro. / is somehow les

of fau8i fertli9er than engro fertli9er but on the othe

hand fau8i fertli9er earning "er share ratio is aroun

doubled than engro and their dividend "er share

much attractive than engro which will de'nitely attrac

investors to invest in fau8i fertli9er additionally, fau

fertli9er gave out E6H of their annual "ro't to the

shareholders as dividend whereas engro retained ha

amount of their earnings which will lead to e+"ect a

investor to invest in fau8i fertli9er as earnings are mor

39 $ P % '



35/37

MID &FINAL PROJECTand more H of dividend is given out to

the shareholders by fau8i fertli9er and eventually a

investor will think after taking in account all abov

mentioning facts that if he invest in fau8i fertli9er ther

will be more chances to get more amount in return an

his investment will be more secured and risk free. )hus

his "reference will be more towards fau8i fertli9er tha

engro. )hat(s it.

M 5'%+//4)here are collection of things which I have learned during this kind of "ro8e

the 'rst thing which is worth mentioning here that how to "erform 'nanci

analysis in details when we are analy9ing a com"any 'nancial statement. 7a8o

learning e+"erience was advantageous I get to know a lot of other things whic

I have never have idea or e+"erienced before and I 8ust read it out theoretical

on books. )his "ro8ect hel" me out how to locate di&erent values of ratios fro3" $ P % '



36/37

MID &FINAL PROJECTcom"any(s 'nancial data after "erforming detail

analysis how much these ratios are mandatory and

im"ortant for investors when he is going to invest in a

com"any additionally these ratios elaborate

com"rehensively 'nancial statistic and "erformance of a 'rm. #fter "erformin

this analysis I understand the worth of these ratios and how much im"orta

they are. u""lementary I learnt how time management is signi'cant whi

you are engage in a lot of assignments, how to e+ecute things on time and ho

to "lan them so that we can achieve them on time.


37/37

MID &FINAL PROJECT

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Afs Project