FM Project of Shell Pakistan

8/8/2019 FM Project of Shell Pakistan

1/18

Shell Pakistan for the year 2008

Liquidity Ratios

Working Capital:

=Current Assets Current Liabilities

=30220209-23307811=6912398

Current Ration:

=Current Assets/Current Liabilities

=30220209/23307811=1.297

Acid Test Ratio:

=(Current Assets-Inventories)/Current Liabilities

=30220209-18095523/23307811=0.520

Solvency Ratios

Debt to Equity Ration:

=Long Term Debt/Shareholders Equity

=2745410/13611638=0.202

Debt to Assets Ration:

=Long Term Debt/Total Assets

=2745410/39664859=0.069


2/18

Debt to Capitalization Ratio:

=Long Term Debt/Total Capitalization

=2745410/16357048=0.168

Total Capitalization= Long Term Debt+ Shareholders Equity

Coverage Ratios

Interest Coverage:

=Earning Before Interest and Taxes/Interest Expenses

=8481359/970267=8.741

Activity Ratios

Inventory Turnover Ratio:

=Cost of Goods Sold/Inventory

=124694471/18095523=6.891

No. ofDays Average Inventory is Sold:ss

=No. of Days in a Year/Turnover Ratio

=365/6.891=53 Days

Total Assets Turnover Ratio:

=Net Sales/Total Assets

=139844689/39664859=3.526

Profitability Ratios


3/18


4/18

Dividend per Share:

=Dividend/No. of Shares Outstanding

=2739516000/54790313= Rs. 50/Share

Dividend Yield Ratio:

=Dividend per Share/Market Value per Share

=50/422=0.118

Book Value of Share:

=Shareholders Equity/No. of Shares Outstanding

=13611638000/54790313=248.431

Total Assets-Total Liabilities= Shareholders Equity

Dividend Pay Out Ratio:

=Dividend per Share/Earning per Share

=50/93.76=0.533

Market Book Value:

=Market Value of Share/Book Value of Share

=422/248.431=1.699

Price Earning Ratio:

=Market Value per Share/Earning per Share

=422/93.76=4.50


5/18

Shell Pakistan for the Year 2007

Liquidity Ratios

Working Capital:

=Current Assets- Current Liabilities

=19713632-19612115=101517

Current Ration:

=Current Assets/Current Liabilities

=19713632/19612115=1.005

Acid Test Ration:

=Current Assets-Inventory/Current Liabilities

=19713632-8244054/19612115=0.584

Solvency Ratios

Debt to Equity:

=Long Term Debt/Shareholders Equity

=139041/9460771=0.015

Debt to Assets:

=Long Term Debt/Total Assets


6/18

=139041/29211927=0.0005

Debt to Capitalization:

=Long Term Debt/Total Capitalization

=1390421/9599812=0.014

Capitalization=Long Term Debt+Shareholders Equity

Coverage Ratios

Interest Coverage Ratio:

=EBIT/Interest Charges

=1134584/878098=1.292

Activity Ratios


=Cost of Goods Sold/Inventory

=1086664932/8244054=13.181

Age of Average Inventory:

=No. of Days in a Year/Activity Ratio

=365/13.181=27.691

Assets Turnover Ratio:

=Net Sales/Total Assets

=115045434/29211927=3.938


7/18

Note Credit sales and credit purchases so no receivable and payable

turnover ratios

Profitability Ratios

GP to Net Sales:

=Gross Profit/Net Sales

=6380502/115045434=0.055

Net Profit Margin:

=Net Profit before Taxes/Net Sales

=3781736/115045434=0.033

Return on Investment:

=NP before Taxes/Total Assets

=706659/29211927=0.024

Return on Equity:

=EAT/Sales* Sales/Total Assets* Total Assets/Share Equity

=706659/115045434* 115045434/29211927* 29211927/9460771

=0.006* 3.938* 3.088=0.075

Market Ratios

Earning per Share:

=Earning after Taxes/No. of Shares Outstanding

=706659/54780=12.90


8/18

Dividend per Share:

=Dividend/No. of Shares Outstanding

=876480000/54780000=16

Dividend Yield Ratio:

=Dividend per Share/Market Value per Share

=16/410.22=0.039

Balance Sheet Value of Share:

=Shareholders Equity/No. of Shares Outstanding

=9460771/54780=172.705

Dividend Payout Ratio:

=Dividend per Share/Earning per Share

=16/12.90=1.240

Market Book Value:

=Market Value of Share/Book Value of Share

=410.22/172.705=2.375

Price Earning Ratio:

=Market Value of Share/Earning of Shared

=410.22/12.90=31.80


9/18

InternalComparison

Ratios 2008 2007

iquidity Ratios:

Net Working Capital 6912398 101517

Current Ratio 1.297 1.005

Acid Test Ratio 0.520 0.584

Solvency Ratios:

Long Term Debt to Equity 0.202 0.015

Long Term Debt to Assets 0.069 0.0005

Long Term Debt to Capitalization 0.168 0.014

Coverage Ratio:

Interest Coverage Ratio 8.741 1.292

Activity Ratios:

Inventory Turnover Ratio 6.891 13.181

Average Age ofInventory 53 28

Total Assets Turnover Ratio 3.526 3.938

Profitability:

Gross Profit Margin 0.108 0.055

Net Profit Margin 0.055 0.003

Return on Investment 0.129 0.024

Return on Equity 0.377 0.075

Market Ratios:

Earning per Share 93.76 12.90

Dividend per Share 50 16

Dividend Yield Ratio 0.118 0.039

Book Value of Share 248.431 172.705

Dividend Payout Ratio 0.533 1.240

Market Book Value 1.699 2.375

Price Earning Ratio 4.50 31.80

Now Let US See These One by One


10/18

Working Capital

Findings: From the above diagram we can see that company is in most liquid position as compared

to previous year.

Current Ratio

Findings: From the above diagram we see that the current ratio of this year is more as compared to

previous year. To pay one current liability the company has 1.296 current assets.

Acid Test Ratio

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2008 2007

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2008

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Current Ratio

Current Ratio


11/18

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12/18

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Coverage Ratios

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13/18

Activity Ratios


Findings: Inventory turnover ratio of the company is less as compared to previous year. Turn over

ratio of this year is 6.891 which means average inventory of the company is sold near about seven

times in a year. But in previous year it was 13.

Average Age ofInventory:

Findings: Average age of inventory means, before selling the average inventory how many days it is

kept in warehouses. Average age of inventory of this year is high which is negative sign, because

inventory is kept many days before selling. Because when inventory is kept company has to bear

many expenses like carrying expenses.

Total Assets Turnover:

0

5

10

15

2008 2007

Inventory Turnover

Inventory Turnover

0

20

40

60

2008 2007

Avg Age ofInventory

Avg Age of Inventory

3

3.5

4

2008 2007

Assets Turnover

Assets Turnover


14/18

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Profitabilit Ratios

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ReturnonIn estment:

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2008

2007

GP Ratio

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2008

2007

Net Profit Ratio

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15/18

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ar etRatios

Earning Per Share:

ROI0

0

02

2008

2007

ROI

ROI

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0 2

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04

2008 2007

ROE

ROE


16/18

F

sEarning per s

are is muc

higher from las

year , which is9376, it meanseach share of the

companyearns rupees93 76

Di idendper Share:

Findings

ividend per share ratio is also is greater ascompared to last year which is50It means on

each sharecompany pays dividend of rupees fifty

Di idend Yield Ratio:

Findings Dividend yield ratio is also higher ascompared to previousyear which is0 118 it means

If there is one rupee of market value then the dividend is0 118

0

50

100

2008 2007

Earning per Share

Earning per Share

0 10 20 30 40 50

2008

2007

Di idendper Share

Dividend per Share

0

0

05

01

0 15

2008 2007

Di idend Yield Ratio

Dividend Yield Ratio


17/18

Boo Value ofShare:

FindingsBook value ofshare is also is higher ascompared to last year which is248

431 which means

in the books of account thevalue ofeach share is248431

if thecompany is dissolved on book value

amount, per sharevalue will be given 248431

Di idend Payout Ratio:

Findings Dividend payout ratio is less ascompared to previousyear which is0 533, which means if

one rupee isearned, from one rupee0533 is distributed among share holders and remaning 1-

0533=0

467 is kept as retained earnings

MarketBook Value:

0

100

200

300

2008 2007

Book Value ofShare

Book Value of

Share

0

05

1

1 5

2008 2007

Di idend Payout Ratio

Dividend Payout Ratio


18/18

FindingsMarket book value of thecompany is also less ascompared from last year, which is1

699

it means if the book value ofshare is rupee one then the market value is1 699

Pri e Earning Ratio:

FindingsPriceearning ratio of thecompany is higher ascompared to last year which is4

50, which

means if theearning per share is rupee one then the market value is4 50

Market B

k Value0

2

4

200

200

MarketBook Value

Market Book Value

0

10

20

30

40

2008 2007

Pri e Earning Ratio

Price Earning

Ratio

Documents

FM Project of Shell Pakistan