2011

FINANCIAL MANAGMENT
TOPIC: PROJECT ON Fauji Fertilizer Company & Engro Corporation limited

2011
Contents

Acknowledgement .....................................................................................................2 Meaning of ratio analysis: ..........................................................................................4 Types of ratio comparisons ........................................................................................4 Cross-sectional analysis .......................................................................................5 Time -series analysis............................................................................................5 Groups of financial ratios ...........................................................................................5 FAUJI FERTILIZER CORPORATION (FFC) .........................................................6 History ........................................................................................................................6 Awards of FFC ...........................................................................................................6 Mission Statement ......................................................................................................7 Corporate Vision ........................................................................................................9 RATIO ANALYSIS .................................................................................................10 BALANCE SHEET .................................................................................................24 INCOME STATEMENT .........................................................................................26 ENGRO CORPORATION ......................................................................................27 RATIO ANALYSIS ....................................................................................................30 BALANCE SHEET .................................................................................................43 INCOME STATEMENT .........................................................................................45

2011

Acknowledgement
We have the pearl of our eyes to admire blessing of the compassionate and omnipotent because the words are bound, knowledge is limited and time is short to express His dignity. It is one of the infinite blessings of almighty ALLAH that He bestowed us with potential and ability to complete the present training and make a material contribution towards the deep oceans of knowledge. First we avail this opportunity to bow our head before ALLAH almighty in humility who given us the wisdom and perseverance for completing this piece of report. We invoke peace for Holy Prophet Muhammad (S.A.W.) who is forever torch. We feel highly privilege to ascribe the most and ever burning flame of my gratitude and deep scene of devotion to the Prof.

Ali

who taught us Financial

Management project with heart and also

gave a guideline to this report.

2011

Financial managers are always concerned with taking important decisions about the businesses of their organization. They have to consider each and every transaction of their business in order to keep track of changes in the equity. They have to present such a picture of their organization as would facilitate investors to invest in the company. Ratio analysis is one of the facilitative tools making the actual state of affairs of the business more comprehensive and explicable for the investors and potential users of the books of accounts of the company. Throughout this semester, I am conducting the ratio analysis of Engro And Fauji Fertilizer. both are pronounced companies of Pakistan. It is considered as the benchmark in power industry. In this project, we will be focusing on a brief introduction of the company followed by its ratio analysis. In designing this project, the key source of information has been the financial statements of the company. I have put up all my efforts in bringing out the true picture of both companies and making this project a true replica of the actual state of affairs of the company.

2011

MEANING OF RATIO ANALYSIS: Ratio analysis is the method or process by which the relationship of items or group of items in the financial statement are computed, determined and presented. Ratio analysis is an attempt to derive quantitative measure or guides concerning the financial health and profitability of business enterprises. Ratio analysis can be used both in trend and static analysis. There are several ratios at the disposal of an analyst but their group of ratio he would prefer depends on the purpose and the objective of analysis. While a detailed explanation of ratio analysis is beyond the scope of this section, we will focus on a technique, which is easy to use. It can provide you with a valuable investment analysis tool. This technique is called cross-sectional analysis. Cross-sectional analysis compares financial ratios of several companies from the same industry. Ratio analysis can provide valuable information about a company's financial health. A financial ratio measures a company's performance in a specific area. For example, you could use a ratio of a company's debt to its equity to measure a company's leverage. By comparing the leverage ratios of two companies, you can determine which company uses greater debt in the conduct of its business. A company whose leverage ratio is higher than a competitor's has more debt per equity. You can use this information to make a judgment as to which company is a better investment risk. However, you must be careful not to place too much importance on one ratio. You obtain a better indication of the direction in which a company is moving when several ratios are taken as a group.

Types of ratio comparisons

There are two major types of ratio comparisons: Cross-sectional analysis

2011
Time series analysis

Cross-sectional analysis
Cross-sectional analysis is the comparison of different firms financial ratios at the same point in time; comparing the firms ratio to those firms in its industry or to industry averages. Frequently, a firm will compare its ratio values to those of its key competitors of group of competitors that firm wishes to evaluate.

Time -series analysis

Time series analysis is applied when a financial analyst evaluates performance overtime. Comparison of current to past performance, using ratio analysis, allows the firm to determine whether it is progressing as planned. Developing trends can be seen by using multi year comparison and knowledge of these trends should assist the firm in planning future operations.

Groups of financial ratios

Liquidity ratios Activity ratios Debt analysis ratios Profitability ratios Marketability ratio

2011

FAUJI FERTILIZER CORPORATION (FFC)

AWARDS OF FFC

2011 Introduction
With a vision to acquire self - sufficiency in fertilizer production in the country, FFC was incorporated in 1978 as a private limited company. This was a joint venture between Fauji Foundation (a leading charitable trust in Pakistan) and Haldor Topsoe A/S of Denmark. The initial share capital of the company was 813.9 Million Rupees. The present share capital of the company stands above Rs. 8.48 Billion. Additionally, FFC has more than Rs. 8.3 Billion as long term investments which include stakes in the subsidiaries FFBL, FFCEL and associate FCCL. FFC commenced commercial production of urea in 1982 with annual capacity of 570,000 metric tons.

Through De-Bottle Necking (DBN) program, the production capacity of the existing plant increased to 695,000 metric tons per year. Production capacity was enhanced by establishing a second plant in 1993 with annual capacity of 635,000 metric tons of urea. FFC participated as a major shareholder in a new DAPS/Urea manufacturing complex with participation of major international/national institutions. The new company Fauji Fertilizer Bin Qasim Limited (formerly FFC-Jordan Fertilizer Company Limited) commenced commercial production with effect from January 01, 2000. The facility is designed with an annual capacity of 551,000 metric tons of urea and 445,500 metric tons of DAP, revamped to 670,000 metric tons of DAP. In the year 2002, FFC acquired ex Pak Saudi Fertilizers Limited (PSFL) Urea Plant situated at Mirpur Mathelo, District Ghotki from National Fertilizer Corporation (NFC) through privatization process of the Government of Pakistan. It has annual production capacity of 574,000 metric tons urea which has been revamped to 718,000 metric tons urea in 2009. This acquisition at Rs. 8,151 million represented the largest industrial sector transactions in Pakistan at that time.

Mission Statement

2011

FFC is committed to play its leading role in industrial and agricultural advancement in Pakistan by providing quality fertilizers and allied services to its customers and given the passion to excel, take on fresh challenges, set new goals and take initiatives for development of profitable business ventures.

2011
Corporate Vision
FFC's vision for the 21st Century remains focused on harmonizing the Company with fresh challenges and encompasses diversification and embarking on ventures within and beyond the territorial limits of the Country in collaboration with leading business partners.

2011
RATIO ANALYSIS ASSETS TEST RATIO:
NO.OF YEARS ASSETS TEST RATIO 2006 2007 2008 2009 2010 0.966853 0.157412 0.053526 0.021681 0.033736

1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 4 5 Series1

1. Quick ratio or acid test ratio

o

This is a ratio between quick current assets and current liabilities (alternatively quick liabilities).

It is calculated by dividing quick current assets by current liabilities (quick current liabilities)

o o o

Quick ratio = quick assets where Current liabilities/(quick liabilities) Conventionally a quick ratio of 1:1 is considered satisfactory.

2011
Current Ratio:
NO OF YEARS CURRENT RATIO 2006 2007 2008 2009 0.893458 0.942059 0.821195 0.835498 2010 0.83699

0.96 0.94 0.92 0.9 0.88 0.86 0.84 0.82 0.8 0.78 0.76 1 2 3 4 5 Series1

2. Current ratio
o o o o

It is calculated by dividing current assets by current liabilities. Current ratio = current assets Current liabilities Conventionally a current ratio of 2:1 is considered satisfactory

Cash to Current Assets:

2011
NO.OF YEARS CASH TO CURRENTASSETS 2006 2007 2008 2009 2010 0.009775 0.007762 0.014104 0.008729 0.019524

0.02 0.018 0.016 0.014 0.012 0.01 0.008 0.006 0.004 0.002 0 1 2 3 4 5

Series1

3. Current assets
o

Include Inventories of raw material, finished goods, Stores and spares, Sundry debtors/receivables, Short term loans deposits and advances, Cash in hand and bank, Prepaid expenses, Incomes receivables and Marketable investments and short term securities.

Cash to Current Liabilities:

NO.OF YEARS 2006 2007 2008 2009 2010

2011
CASH TO CURRENT LIABILITIES 0.008715 0.007312 0.011582 0.007293 0.016341

0.018 0.016 0.014 0.012 0.01 0.008 0.006 0.004 0.002 0 1 2 3 4 5 Series1

4. Current liabilities
o

Include Sundry creditors/bills payable, Outstanding expenses, Unclaimed dividend, Advances received, Incomes received in advance, Provision for taxation, Proposed dividend, Installments of loans payable within 12 months, Bank overdraft and cash credit

A/R TURN OVERRATIO:

NO.OF YEARS 2006 2007 2008 2009 2010

2011
A/R TURN OVERRATIO 31.15252 16.50352 61.68787 140.7752 125.3628

160 140 120 100 80 60 40 20 0 1 2 3 4 5 Series1

5. Debtors turnover ratio

o

This ratio is a test of the liquidity of the debtors of a firm. It shows the relationship between credit sales and debtors.

o o

Debtors turnover ratio = Credit sales average debtors and bills receivables

Debt to Equity:
NO.OF YEARS 2006 2007 2008 2009 2010

2011
DEBT TO EQUITY 1.120572 1.297024 1.598161 1.946818 1.787553

2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 1 2 3 4 5

Series1

6. Debt equity ratio

o

This ratio indicates the relative proportion of debt and equity in financing the assets of the firm. It is calculated by dividing long-term debt by shareholders funds.

o o o o

Debt equity ratio = long-term debts where Shareholders funds Generally, financial institutions favor a ratio of 2:1. However this standard should be applied having regarded to size and type and nature of business and the degree of risk involved.

L T D TO CAPITALIZATION:

2011
NO.OF YEARS L T D TO CAPITALIZATION 2006 2007 2008 2009 2010 0.216952 0.283413 0.388653 0.367907 0.312916

0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1 2 3 4 5 Series1

7. Debt to total capital ratio

o

In this ratio the outside liabilities are related to the total capitalization of the firm. It indicates what proportion of the permanent capital of the firm is in the form of long-term debt.

o o o

Debt to total capital ratio = long- term debt Shareholders funds + long- term debt Conventionally a ratio of 2/3 is considered satisfactory.

Interest Ratio:

2011
NO.OF YEARS INTERST RATIO 2006 14.9357 2007 2008 2009 2010 12.22182 12.92613 14.81794 16.00804

18 16 14 12 10 Series1 8 6 4 2 0 1 2 3 4 5

8. Interest coverage ratio

o

This ratio measures the debt servicing capacity of a firm in so far as the fixed interest on long-term loan is concerned. It shows how many times the interest charges are covered by edit out of which they will be paid.

o o o

Interest coverage ratio = edit Interest A ratio of 6 to 7 times is considered satisfactory. Higher the ratio greater the ability of the firm to pay interest out of its profits. But too high a ratio may imply lesser use of debt and/or very efficient operations

Payable Turnover Ratio:

2011
NO.OF YEARS PAYABLE TURN OVER RATIO 2006 2007 2008 2009 2010 1.394212 1.109039 0.928742 0.805486 0.916602

1.4 1.2 1 0.8 0.6 0.4 0.2 0 1 2 3 4 Series1

9. Creditors turnover ratio

o

This ratio shows the speed with which payments are made to the suppliers for purchases made from them. It shows the relationship between credit purchases and average creditors.

o o

Creditors turnover ratio = Credit purchases average creditors & bills payables

Total Assets Turnover:

2011
NO.OF YEARS TOTAL ASSETS TURN OVER 2006 2007 2008 2009 2010 0.39401 1.090103 0.972224 0.958452 0.938046

1.2 1 0.8 0.6 0.4 0.2 0 1 2 3 4 5 Series1

10.Asset turnover ratio

o o

Depending on the different concepts of assets employed, there are Many variants of this ratio. These ratios measure the efficiency of a firm in managing and utilizing its assets.

o o o o o o o o

Total asset turnover ratio = sales/cost of goods sold Average total assets Fixed asset turnover ratio = sales/cost of goods sold Average fixed assets Capital turnover ratio = sales/cost of goods sold Average capital employed Working capital turnover ratio = sales/cost of goods sold Net working capital

GROSS PROFIT MARGIN:

2011
NO.OF YEARS GROSS PROFIT MARGIN 2006 2007 2008 2009 2010 0.324153 0.355886 0.403955 0.432709 0.435972

0.45 0.4 0.35 0.3 0.25 Series1 0.2 0.15 0.1 0.05 0 1 2 3 4 5

11.Gross profit margin

o o o o

This ratio is calculated by dividing gross profit by sales. It is expressed as a percentage. Gross profit is the result of relationship between prices, sales volume and costs. Gross profit margin = gross profit x 100 net sales A firm should have a reasonable gross profit margin to ensure coverage of its operating expenses and ensure adequate return to the owners of the business i.e. the shareholders. To judge whether the ratio is satisfactory or not, it should be compared with the firms past ratios or with the ratio of similar firms in the same industry or with the industry average.

NET PROFIT MARGIN:

2011
NO.OF YEARS NET PROFIT MARGIN 2006 2007 2008 0.154792 0.189277 0.156151 2009 0.24398 2010 0.245772

0.25 0.2 0.15 Series1 0.1 0.05 0 1 2 3 4 5

12.Net profit margin

o o

This ratio is calculated by dividing net profit by sales. It is expressed as a percentage. This ratio is indicative of the firms ability to leave a margin of reasonable compensation to the owners for providing capital, after meeting the cost of production, operating charges and the cost of borrowed funds.

o o o o o o

Net profit margin = Net profit after interest and tax x 100 Another variant of net profit margin is operating profit margin which is calculated as: Operating profit margin = Net profit before interest and tax x 100 Higher the ratio, greater is the capacity of the firm to withstand adverse economic conditions and vice versa

RETURN ON INVESTMENT:

2011
NO.OF YEARS RETURN ON INVESTMENT 2006 2007 2008 2009 2010 0.168739 0.184019 0.149663 0.228865 0.096836

0.25 0.2 0.15 Series1 0.1 0.05 0 1 2 3 4 5

13.Return on assets
o

This ratio measures the profitability of the total funds of a firm. It measures the relationship between net profits and total assets. The objective is to find out how efficiently the total assets have been used by the management.

o o o o

Return on assets = Net profit after taxes plus interest x 100 Total assets Total assets exclude fictitious assets. As the total assets at the beginning of the year and end of the year may not be the same, average total assets may be used as the denominator.

RETURN ON EQUITY:

2011
YEARS RETURN ON EQUITY 2006 2007 2008 2009 2010 0.357823 0.422697 0.388482 0.067442 0.713955

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 4 5 Series1

14.Return on shareholders equity

o

This ratio measures the relationship of profits to owners funds. Shareholders fall into two groups i.e. Preference shareholders and equity shareholders. So the variants of return on shareholders equity are Return on total shareholders equity = Net profits after taxes x 100 Total shareholders equity Total shareholders equity includes preference share capital plus equity share capital plus reserves and surplus less accumulated losses and fictitious assets. To have a fair representation of the total shareholders funds, average total shareholders funds may be used as the denominator

o o o o

2011
BALANCE SHEET
2006 2007 2008 2009 2010

ASSETS
NON-CURRENT ASSETS Property, plant and equipment Good will Long term Investment Long term loans and advantages Long term deposit and prepayments other assets

9607957 1569234 6409382 76647 2474 45000

10390490 1569234 6325129 142782 2144 0

12730813 1569234 7744779 163102 1524 0

13993518 1569234 7727528 337541 6305 0

15933588 1569234 78700727 455328 9037

17710694

18429779

22209452

23634126

96667914

CURRENT ASSETS Store spare losses tools Stock in trade Trade debts Loan and advantages deposit and prepayments other receivable short term investment cash and bank balances 2202053 952905 961427 95245 25488 1451390 2452850 1623229 2407988 642836 1722602 83917 33665 1542763 3027664 1350000 3034268 258094 495929 136944 107369 1233479 3511563 931865 2996633 144087 256886 130219 37653 734062 6768568 3849348 2440201 211720 357956 336269 50188 617664 12020581 1189063

Total Current Assets Total Assets

9764587 27475281

10811435 29241214

9709511 31918963

14917456 38551582

17223642 113891556

2011
EQUITY AND LIABILITIES
Issued, subscribed and paid up share capital Capital Reserves Revenue Reserves 4934742 160000 7861801 4934742 160000 7635303 4934742 160000 7190471 6785271 160000 6137171 6785271 160000 8502276

Total Equity NON-CURRENT LIABILITIES Long term borrowing deferred liabilities

12956543

12730045

12285213

13082442

15447547

1193750 2396000

2671250 2363526

5378214 2431895

4578809 3035757

3819405 3215821

3589750 CURRENT LIABILITIES Current maturity of long term loan trade and other payable interest markup accrued long term loan Short term borrowing Taxation 887327 4025926 134039 4531090 1350606

5034776

7810109

7614566

7035226

1022500 5815276 184430 3141081 1313106

743036 5993674 194570 3114000 1778361

1799405 8002897 147329 6088348 1816595

1759405 9614026 137968 5640420 3426264

Total Current Liabilities TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES

10928988 14518738 27475281

11476393 16511169 29241214

11823641 19633750 31918963

17854574 25469140 38551582

20578083 27613309 43060856

2011
INCOME STATEMENT

2006 Sales Cost of Goods Sold Gross Profit Distribution Cost Other Operating Expenses 29950873 20242194 9708679 2746782 735331 3482113 6226566 Other Operating Income Gain on Sale on Investment Profit From Operations Finance Cost Profit Before Taxation Provision For Taxation Profit After Taxation 1259819

2007 28429005 18311525 10117480 2418793 845327 3264120 6853360 1658000

2008 30592806 18234692 12358114 2668571 895647 3564218 8793896 194558

2009 36163174 20515044 15648130 3174505 1272448 4446953 11201177 2800987

2010 44874359 25310406 19563953 3944473 1376000 5320473 14243480 3153110

7486385 501241 6985144 2349000 4636144

8511360 696407 7814953 2434000 5380953

8988454 695371 8293083 3516000 4777083

14002164 944947 13057217 4234111 8823106

17396590 1086741 16309849 5281000 11028849

2011 ENGRO CORPORATION

AWARD

2011
INTRODUCTION
Engro is one of Pakistans most progressive, growth oriented organizations, yet we never forget where we came from. Our history is a part of who we are today. Our diverse range of companies represents our rich legacy of innovation and growth. Engro Corporation Limited is one of Pakistans largest conglomerates with businesses ranging from fertilizers to power generation. In the interest of better managing and overseeing businesses of subsidiaries and affiliates that are currently part of Engros capital investments, Engro Chemical Pakistan Limited converted into a holding company structure. As part of this process, two major changes occurred with effect from January 1, 2010; Engro Chemical was renamed as Engro Corporation Limited and it demerged and transferred its fertilizer business into a separate wholly owned subsidiary, Engro Fertilizers Limited. Currently Engro Corporations portfolio consists of seven businesses which include chemical fertilizers, PVC resin, a bulk liquid chemical terminal, industrial automation, foods, power generation and commodity trade. Besides providing the long term vision for the company and overseeing performance of the subsidiaries and affiliates, Engro Corporation Limited is also responsible for allocation of capital, management of talent, leadership development, HR guiding policies, leadership role in public relations and CSR activities, control structures, legal and IT support. From its inception as Esso Pakistan Fertilizer Limited in 1965 to Engro Corporation Limited in 2010, Engro has come a long way and will continue working towards its vision of becoming a premier Pakistani company with a global reach.

CULTURE
Engro is about the people who are a part of us. Our culture is dynamic and energetic, with emphasis on our core values and loyalty of our employees. Our work environment promotes leadership, integrity, teamwork, diversity and excellence. The tone for our corporate culture and the importance of employees was set after the Company was bought out by employees in 1991. As the Company grows, we are determined to keep our culture open and transparent, and inclusive for all our employees.

2011

DIFFRENCE BUSINESS
Our diversified businesses represent our immense growth potential to generate opportunities for creating and sustaining value for our stakeholders. Engro Fertilizers Limited Engro Foods Limited Engro Polymer & Chemicals Limited Engro Powered Limited Engro EXIMP Private Limited Engro Vopak Terminal Limited

2011

RATIO ANALYSIS
CURRENT RATIO:
NO.OF YEARS CURRENT RATIO 2006 7.468622 2007 0.92006 2008 2.007253 2009 0.73266 2010 0.073614

8 7 6 5 4 3 2 1 0 1 2 3 4 5 Series1

15.Current ratio
o o o o

It is calculated by dividing current assets by current liabilities. Current ratio = current assets where Current liabilities Conventionally a current ratio of 2:1 is considered satisfactory

2011

ASSETS TEST RATIO:

NO.OF YEARS ASSETSTEST RATIO 2006 2007 2008 2009 2010 0.168678 0.049917 0.332092 0.106089 0.002094

0.35 0.3 0.25 0.2 Series1 0.15 0.1 0.05 0 1 2 3 4 5

16.Quick ratio or acid test ratio

o

This is a ratio between quick current assets and current liabilities (alternatively quick liabilities).

It is calculated by dividing quick current assets by current liabilities (quick current liabilities)

o o o

Quick ratio = quick assets where Current liabilities/(quick liabilities) Conventionally a quick ratio of 1:1 is considered satisfactory.

2011

CASH TO C.A:
NO.OF YEARS CASH TO C.A 2006 2007 2008 0.022585 0.054254 0.157705 2009 0.13668 2010 0.018203

0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 1 2 3 4 5 Series1

17.Current assets
o

Include Inventories of raw material, finished goods, Stores and spares, Sundry debtors/receivables, Short term loans deposits and advances, Cash in hand and bank, Prepaid expenses, Incomes receivables and Marketable investments and short term securities.

2011
CASH TO C.L:
NO.OF YEARS CASH TO C.L 2006 2007 2008 0.168678 0.049917 0.316555 2009 0.10014 2010 0.00134

0.35 0.3 0.25 0.2 Series1 0.15 0.1 0.05 0 1 2 3 4 5

18.Current liabilities
o

Include Sundry creditors/bills payable, Outstanding expenses, Unclaimed dividend, Advances received, Incomes received in advance, Provision for taxation, Proposed dividend, Installments of loans payable within 12 months, Bank overdraft and cash credit

2011
Debt to equity
NO.OF YEARS Debt to equity 2006 2007 2008 2009 2010 1.967592 1.305924 1.715199 4.034711 3.802106

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 1 2 3 4 5 Series1

19.Debt equity ratio

o

This ratio indicates the relative proportion of debt and equity in financing the assets of the firm. It is calculated by dividing long-term debt by shareholders funds.

o o o o

Debt equity ratio = long-term debts where Shareholders funds Generally, financial institutions favor a ratio of 2:1. However this standard should be applied having regarded to size and type and nature of business and the degree of risk involved.

2011
L.T.D.TO CAPITALIZATION:
NO.OF YEARS L.T.D.TO CAPITALIZATION 2006 2007 2008 2009 2010

0.631344 0.186259 0.588519 0.764511 0.061648

0.8 0.6 0.4 0.2 0 1 2 3 Series1 4 5 Series1

20.Debt to total capital ratio

o

In this ratio the outside liabilities are related to the total capitalization of the firm. It indicates what proportion of the permanent capital of the firm is in the form of long-term debt.

o o o

Debt to total capital ratio = long- term debt Shareholders funds + long- term debt Conventionally a ratio of 2/3 is considered satisfactory.

2011
INTREST RATIO:
NO.OF YEARS INTREST RATIO 2006 2007 2008 10.50102 8.916505 4.449141 2009 3.52158 2010 10.49967

12 10 8 6 4 2 0 1 2 3 4 5 Series1

21.Interest coverage ratio

o

This ratio measures the debt servicing capacity of a firm in so far as the fixed interest on long-term loan is concerned. It shows how many times the interest charges are covered by edit out of which they will be paid.

o o o

Interest coverage ratio = edit Interest A ratio of 6 to 7 times is considered satisfactory. Higher the ratio greater the ability of the firm to pay interest out of its profits. But too high a ratio may imply lesser use of debt and/or very efficient operations

2011
PAYABLE TURN OVER RATIO:
NO.OF YEARS PAYABLE TURN OVER RATIO 2006 2007 2008 0.47411 2009 0.30947 2010 0.181204

0.701125 0.845131

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1 2 3 4 5 Series1

22.Creditors turnover ratio

o

This ratio shows the speed with which payments are made to the suppliers for purchases made from them. It shows the relationship between credit purchases and average creditors.

o o

Creditors turnover ratio = Credit purchases average creditors & bills payables

ASSETS TURNOVER:

2011
NO.OF YEARS ASSETS TURNOVER 2006 2007 0.612249 0.60758 2008 2009 2010 0.407895 0.321969 0.262487

0.7 0.6 0.5 0.4 Series1 0.3 0.2 0.1 0 1 2 3 4 5

23.Asset turnover ratio

o o

Depending on the different concepts of assets employed, there are Many variants of this ratio. These ratios measure the efficiency of a firm in managing and utilizing its assets.

o o o o o o o o

Total asset turnover ratio = sales/cost of goods sold Average total assets Fixed asset turnover ratio = sales/cost of goods sold Average fixed assets Capital turnover ratio = sales/cost of goods sold Average capital employed Working capital turnover ratio = sales/cost of goods sold Net working capital

GROSS PROFIT:

2011
NO.OF YEARS GROSS PROFIT 2006 2007 2008 2009 2010 0.240727 0.212241 0.265751 0.229731 0.453421

0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1 2 3 4 5 Series1

24.Gross profit margin

o o o o

This ratio is calculated by dividing gross profit by sales. It is expressed as a percentage. Gross profit is the result of relationship between prices, sales volume and costs. Gross profit margin = gross profit x 100 net sales A firm should have a reasonable gross profit margin to ensure coverage of its operating expenses and ensure adequate return to the owners of the business i.e. the shareholders. To judge whether the ratio is satisfactory or not, it should be compared with the firms past ratios or with the ratio of similar firms in the same industry or with the industry average.

NET PROFIT:
NO.OF YEARS 2006 2007 2008 2009 2010

2011
NET PROFIT 0.144717 0.136072 0.181858 0.068682 0.344249

0.35 0.3 0.25 0.2 Series1 0.15 0.1 0.05 0 1 2 3 4 5

25.Net profit margin

o o

This ratio is calculated by dividing net profit by sales. It is expressed as a percentage. This ratio is indicative of the firms ability to leave a margin of reasonable compensation to the owners for providing capital, after meeting the cost of production, operating charges and the cost of borrowed funds.

o o o o o o

Net profit margin = Net profit after interest and tax x 100 Another variant of net profit margin is operating profit margin which is calculated as: Operating profit margin = Net profit before interest and tax x 100 Higher the ratio, greater is the capacity of the firm to withstand adverse economic conditions and vice versa

RETURN ON INVESTMENT:
NO.OF YEARS 2006 2007 2008 2009 2010

2011
RETURN ON INVESTMENT 0.088603 0.082675 0.074179 0.022114 0.090361

0.1 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 1 2 3 4 5 Series1

26.Return on assets
o

This ratio measures the profitability of the total funds of a firm. It measures the relationship between net profits and total assets. The objective is to find out how efficiently the total assets have been used by the management.

o o o o

Return on assets = Net profit after taxes plus interest x 100 Total assets Total assets exclude fictitious assets. As the total assets at the beginning of the year and end of the year may not be the same, average total assets may be used as the denominator.

RETURN ON EQUITY:

2011
NO.OF YEARS RETURN ON EQUITY 2006 2007 2008 2009 2010 0.262938 0.190641 0.201411 0.111335 0.433922

0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1 2 3 4 5 Series1

27.Return on shareholders equity

o

This ratio measures the relationship of profits to owners funds. Shareholders fall into two groups i.e. Preference shareholders and equity shareholders. So the variants of return on shareholders equity are Return on total shareholders equity = Net profits after taxes x 100 Total shareholders equity Total shareholders equity includes preference share capital plus equity share capital plus reserves and surplus less accumulated losses and fictitious assets. To have a fair representation of the total shareholders funds, average total shareholders funds may be used as the denominator

o o o o

2011
BALANCE SHEET
2006 2007 2008 2009 2010

ASSETS
NON-CURRENT ASSETS Property, plant and equipment Intangible Asset Long term investment Deferred employee compensation expenses Long term loans and advances

6557603 18062 3657596 0 63109

13811683 133867 7764482 0 49421

33552912 122858 11091857 136071 218820

69517512 122704 12988657 2787 328907

98617815 122609 26136701 5890 1623514

10296370

21759453

45122518

82960567

126506529

CURRENT ASSETS Stores and spares Stock in trade Trade debts Deferred employee compensation expenses Loans, advances, deposits, prepayments Other receivables Derivate financial instruments Tax recoverable Short term investment Cash and bank balances Other assets Total Current Assets Total Assets 688568 923448 623349 0 416758 998565 0 0 228518 1805240 12768494 18452940 28749310 740873 2690153 1408885 0 889621 2360495 0 535699 6153948 1617524 800091 4680896 261508 93213 1899124 452168 1481626 618746 67811 1687038 961117 422607 2514425 87278 1469155 275714 76209 536167 450857 3955342 1015791 467405 2413452 78728 139910 197453 70536 525716 1970603 806584

16397198 38156651

12042221 57164739

10748871 93709438

7686178 134192707

2011
EQUITY AND LIABILITIES
Issued, subscribed and paid up share capital share premium Hedging reserve General reserve unapporiated profit Employee share compensation 2000000 1068369 0 4429240 2190148 0 3000000 3963977 1037386 4429240 4116622 0 2128161 7152722 127307 4429240 6911124 305052 2979426 1055061 288258 4429240 9250972 609719 3277369 10550061 74813 4429240 8722156 890917

Total Equity NON-CURRENT LIABILITIES Borrowing Derivate financial instrument Deferred liabilities Employee housing subsidy Retirement and others benefits

9687757 15422520 0 1127139 0 41165 16590824

16547225 1800000 0 1948980 0 38560 3787540 0 0 1300000 18662 0 3752945 0 193067 12557212 17821886 21609426 38156651

21053606 27756714 918050 1319432 73319 44265 30111780 2915274 804390 0 76600 18352 1711257 155160 318320

18612676 58565354 612842 988169 211785 47581 60425731 3160852 1366022 810100 20600 195753 740043 0 102099 8275562 14671031 75096762 93709438

27944556 97425453 521482 997196 315678 1550 1835906 267044 65000 3384536 22500 205753 1020001 57247 180630 99209534 104412245 106248151 134192707

CURRENT LIABILITIES Trade and other payable Accrued interest/mark up current portion of: Borrowing Others benefits obligations Short term investment Derivate financial instrument Taxation Unclaimed dividend Other liabilities Total Current Liabilities TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES 0 0 1087500 16477 129996 1081745 72651 82360 0 2470729 19061553 28749310

5999353 36111133 57164739

2011

INCOME STATEMENT
2006 Sales Cost of Goods Sold Gross Profit Distribution Cost Administrative Expenses Other Operating Expenses 17601738 13364529 4237209 1481730 0 287176 1768906 2468303 Other Operating Income 1338854 2007 23183222 18262793 4920429 1641724 0 339430 1981154 2939275 1831260 2008 23317198 17120635 6196563 1657815 0 579556 2237371 3959192 2754330 2009 30171520 23240176 6931344 1945176 0 424110 2369286 4562058 88467 2010 35223860 19252630 15971230 2425210 388652 38773 2852635 13118595 433947

Profit From Operations Finance Cost Profit Before Taxation Provision For Taxation Profit After Taxation

3807157 362551 3444606 897330 2547276

4770535 535023 4235512 1080929 3154583

6713522 1508948 5204574 964144 4240430

4650525 1320579 3329946 1257696 2072250

13552542 1290759 12261783 136016 12125767

2011

www. engro.com

2 www.fauji fertilizer.com 3 fauji fertilizer site:wikipedia.org 4 engro site:wikipedia.org