Introduction:

The word 'Agriculture' is derived from the Latin word 'Ager' means Land or field and 'Culture'
means cultivation.“It means the science and Art of producing crops and livestock for economic
purpose” Agriculture is an art of raising plant life from the soil for the use of mankind. Pakistan's
principal natural resources are arable land and water.

About 25% of Pakistan's agriculture accounts for about 21% of GDP and employs about 43% of
the labour force. In Pakistan, the most agricultural province is Punjab where wheat and cotton
are the most grown. Mango orchards are mostly found in Sindh and Punjab provinces that make
Pakistan the world's 4th largest producer of mangoes.
The agriculture sector occupies a pivotal position in the Pakistan’s economy, accounting for 21%
of GDP with a significant potential for growth. The agriculture industry is considered to be the
bone of the Islamic Republic of Pakistan’s economy. Leading producers of wheat and cotton
include USA, China, India, Pakistan, Uzbekistan and Turkey.

Both Punjab and Sindh are the major agriculture growing provinces.

FINANCIAL STATEMENTS

By doing the financial statements analysis, it will help the analyst to understand the performance
of any company. The analysis of the financial statement is a study of establishing meaningful
relationship between various financial facts and figure given in the financial statements and
identifying the financial weaknesses and strengths of a company.

MEANING OF RATIO ANALYSIS

Ratio analysis has been viewed as a primary technique of the analysis of financial statement
from various aspects of the business analysis of financial statement from various aspects of the
business. Company’s ratios are compared with those of other firms in the same industry to
industry average figures

Issued Faced By Pakistan Agriculture Industry.

Agricultural sector is the backbone of our economy. But the growth of agriculture in Pakistan is
facing a lot of problems. Due to various causes, per acre yield is very low in Pakistan as compare
to other developed countries.

Water Logging and Salinity

Water logging and salinity are twin problems of agricultural sector due to salinity, deposits of salt
in land have appeared on the surface of land and they have adversely affected the performance of
agricultural sector. Water logging and salinity affect about 0.10 million acre of land in every
year. It is not only waste of land but also reduction in productivity.

Inadequate Infrastructure
Rural infrastructure like, roads, storage facilities, transport, electricity, education, sanitation and
health facilities etc. is inadequate to meet the requirement of growth of agriculture. Total length
of farm-to-market road is not only shorter but their condition is also poor. Many villages have no
metal-led road at all. Electricity is available to only 3/4 rural populations.

Uneconomic Land Holdings

Due to increasing population and division of land under the law of inheritance, landholdings are
subdivided over and over again. The result is that very large number of farmers has less than 2
hectares of area. Moreover holdings are scattered. It is difficult to use modern machinery on
small pieces of land.

Old Methods of Production

No doubt, mechanization of agriculture is increasing in Pakistan, but in most of the areas, the old
implements are still being used for agricultural production. Old and orthodox techniques of
production cannot increase the production according to international levels.

Inadequate Supply of Agricultural Inputs

The supply of modern inputs like high yielding variety (HYV) seeds, chemical fertilizers,
pesticides, mechanized machinery etc. not only costly but also inadequate and irregular in
Pakistan. Numbers of fertilizer producing units are just 10 in Pakistan.

Lack of Irrigation Facilities

Shortage of irrigation facilities causes a serious limitation in the expansion of crop area in
Pakistan. The lower water supplies, loses from watercourse in the fields are the serious problems
of farm sector. Actual surface water availability is 91.8 million acre fee

Various Plant Diseases

Various agricultural crops like cotton, sugarcane, tobacco, wheat and rice often come under
attack of pests and insects. Pests and plant diseases reduce the annual productivity of agriculture.

Natural Calamities
Labour is in the hand of mankind but its result is in the hands of ALLAH in agriculture sector.
So, growth of agriculture is dominated by nature. In case if there is too much rain, reduction in
the productivity. There is 20% reduction in productivity due to unnecessary rain and
unfavourable climatic situations in Pakistan.
Poor Financial Position of Farmers
It is a common saying about our farmer that he born in debts, grows in debts and dies in debts. It
means that financial position of Pakistani farmer is weak and poor. According to “Pakistan
Human Development Report 2003”, about 57.4% poor are working for feudal-lords without
wages.

Instability in Market Prices

The price market of agricultural goods generally remains unstable in the country. Cobweb
theorem is very popular in case of market prices; it means that a price of one commodity is much
high in this year and much low in the next year and vice versa. The farmers, do not get due
reward from the sale of their productions. Therefore, they remain unsatisfied.

Shortage of Agricultural Finance

Agricultural credit facilities are not sufficient in Pakistan. Rate of interest on agricultural credit is
high and loan is not provided in time. According to “Pakistan Human Development Report
2003” in Pakistan about 50.8% poor borrow from landlords at very high rate of interest.

Construction of Dames
Sometimes, due to heavy unwanted rains and floods agricultural productivities destroys. To
tackle this problem it is necessary to construct dames and bands on rivers.

Training of Farmers
Our farmers are illiterate and ill trained so, their efficiencies are poor. Government should start
special education programme for farmers and give them training about farming.

Conclusion:
Being an agrarian country, agricultural sector of Pakistan’s economy is still backward. Use of
modern techniques, provision of credit facilities, basic infrastructure and agriculture research
facilities are needed to remove all the problems of agriculture sector.
STRENGHTS:
• Agricultural land of Pakistan is 35% of the total land, which is its key strength.
Favorable Natural factors :-
The progress made by agriculture in Punjab state is unparalleled in the history of world
agriculture. From a food deficient state at the time of independence it turned out to be the food
basket of the country. Pakistan has great soils with potential for agricultural production
in view of their high reserves of minerals. The state has excellent surface and ground water
irrigation infrastructure. About 98% of the net sown area is irrigated. Climatic conditions of the
state are favorable for production. The climate of Pakistan is mainly influenced by the Himalayas
in the North and the Thar Desert of Rajasthan in the south and south west. Pakistan does not
have harsh weather conditions, thus helpful for vegetation.
ii)
Hard Working People :-
In Pakistan two-third of its population is indirectly dependent on agriculture. Hard working
peasantry is an important pillar of strength of the Agriculture. Pakistan’s robust growth in
agriculture sector is mainly
due to the adoption and proper execution of various strategies by its farmers, who are always
open to new ideas. Dominating rural based political power with agricultural background provide
favorable environment.
iii)

Technological Advances :-
Pakistan has made various technological advances in the field of Agriculture. Technological
adoptions need that a farmer should be aware of the benefits of the technology, finances, price
incentives and farm sizes etc. All these requirements have been fulfilled by the Pakistan farmers
adequately.
iv)

Results of Green Revolution :-

Punjab is reaping the benefits of green revolution. The strategy initiated in 1960’s is paying off
well to the Pakistan economy. Earlier developed as a model state for green revolution with HYV
seeds, Chemical fertilizers, irrigation and various institutional and technological factors, Punjab
Agriculture has shown outstanding achievements. Extension of irrigation network, rural
link roads, rural electrification, efficient delivery system of credit and other agricultural inputs
and effective implementation of agricultural price policy are the few factors that are strengths of
Pakistan Agriculture.

Weaknesses of Agriculture Industry:

 Insufficient communication between farmers, associations and policy makers
 Very low technical level (pond farming)
 Lack of information and awareness for farmers
 Lack of investment in product development. Consumer uneasy with new products
 Investment needed to meet environmental standards (Central & East Europe countries).
Companies Introduction.
United Distributor limited.
Since 2004, It has been slowly establishing our own brands and
range of agricultural pesticides along with developing a strong team
of Technical Sales Officers to provide quality field services to the
farmer’s of Pakistan. It also continue to provide distribution and
warehousing services to Food Machinery corporatin FMC (USA).

United distributor is incorporated in Pakistan as a public limited

company and It has a nation-wide sales, marketing & distribution
network to provide products and services to the country’s farming
community.It has played a significant role in introducing and
establishing leading multinational businesses in Pakistan. Those
companies include; Dow Agro Sciences (USA), FMC Corporation
(USA), Pioneer Seeds (USA), Nichimen (Japan) and currently
DuPont (USA). The businesses of FMC United as well as Pioneer
Seeds were developed almost exclusively by UDL and It currently have Joint Ventures with both
of them.

Fauji Fertilizer Company Limited (FFCL)

Introduction:
Fauji Fertilizer Company Limited (FFCL) is a listed company on the stock exchange. It is
Pakistan’s largest urea manufacturing company, incorporated in 1978. Fauji Foundation, which
holds the majority shares 44.35%. Fauji Fertilizer Company has been providing quality farm
advisory services all over the country since 1981 for increasing the agriculture production and
the farmer’s income. The company’s focus is on the future while they work hard to make the
present more meaningful in providing better opportunities for growth.

Vision
 To be a leading national enterprise with global aspirations,
 Effectively pursuing multiple growth opportunities,
 Maximizing returns to the stakeholders,
 Remainung socially and ethically responsible.

Mission
To provide our customers with premium quality products in a safe, reliable, efficient and
environmentally sound manner, deliver exceptional services and customer support, maximizing
returns to the shareholders through core business and diversification, providing a dynamic and
challenging environment for our employees.

Principal Activities of the Company

The principal activity of the Company is manufacturing, purchasing and marketing of fertilizers
and chemicals, including investment in other fertilizers, chemicals, manufacturing and banking
operations, energy generation and food processing.
Strength of FFC
 The market leader in the fertilizer sector.
 Enjoy a very good reputation among the general public as well as the corporate sector.
 High quality products.
 Friendly atmosphere in the organization, which leads to, motivated employees and higher
productivity.

Weaknesses of FFC
 The large size of the company produces administrative problems.
 Lengthy organizational hierarchy
 Sales force faced a tough time when being moved to distant areas in other provinces to
ensure they were spread equally. This also contributed to high transportation costs for the
company.

Fatima Fertilizer Company Limited

The Fatima Fertilizer Company Limited was incorporated on December 24, 2003, as a joint
venture between two major business groups in Pakistan namely, Fatima Group and Arif Habib
Group. The fertilizer complex is a fully integrated production facility, capable of producing two
intermediate products, i.e., Ammonia and Nitric Acid and four final products which are Urea,
Calcium Ammonium Nitrate (CAN), Nitro Phosphate (NP) and Nitrogen Phosphorous
Potassium(NPK) at Sadiqabad, Rahim Yar Khan.Foundation stone was laid on April 26, 2006 by
the then Prime Minister of Pakistan. The construction of the Complex commenced in March
2007 and is housed on 950 acres of land.

The Complex, during its construction phase engaged over 4,000 engineers and technicians from
Pakistan, China, USA, Japan and Europe.
Vision:
To be a world class manufacturer of fertilizer and ancillary products, with a focus on safety
,quality and positive contribution to national economic growth and development. We will care
for the environment and the communities we work in while continuing to create shareholders'
value.
Mission:
To be the preferred fertilizer company for farmers, business associates and suppliers
by providing quality products and services
 Ratio Analysis

Liquidity Ratio
Current Ratio
Current ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 1.65% 1.45% 1.42% 1.58% 1.50%
Fauji Fertilizer Company limited. 0.96% 0.94% 0.91% 0.85% 0.67%
Fatima Fertilizer limited. 1.10% 1.03% 0.75% 0.97% 0.76%

Interpretation:
 Quick Ratio
Quick ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 0.77% 0.63% 0.60% 0.35% 0.48%
Fauji Fertilizer Company limited. 0.83% 0.93% 0.81% 0.70% 0.65%
Fatima Fertilizer limited. 0.90% 0.83% 0.48% 0.79% 0.58%

Inrepetition
 Activity Ratio
Inventory Turnover
Inventory turnover
2018 2017 2016 2015 2014
United distributor Pakistan limited. 2.97% 2.77% 2.28% 1.89% 1.69%
Fauji Fertilizer Company limited. 8.24% 146.07% 17.46% 17.03% 82.75%
Fatima Fertilizer limited. 9.86% 5.41% 4.32% 13.49% 12.40%
 Total Assets Turnover
Total Asset Turnover
2018 2017 2016 2015 2014
United distributor Pakistan limited. 28.76% 27.61% 26.07% 37.56% 47.04%
Fauji Fertilizer Company limited. 61.31% 66.48% 60.47% 76.83% 93.85%
Fatima Fertilizer limited. 37.86% 30.53% 31.89% 43.51% 42.24%

Interpetition
 Total Liability Ratio
Debt Ratio
Debt Ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 19.36% 19.06% 19.64% 20.91% 29.35%
Fauji Fertilizer Company limited. 20.80% 35.65% 37.63% 37.63% 9.91%
Fatima Fertilizer limited. 45.90% 57.17% 57.56% 55.78% 58.68%

Interpetition
Time Interest Earned Ratio
Time InteresT Earned Ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 151.72% 135.24% 44.67% 16.34% 11.87%
Fauji Fertilizer Company limited. 14.25% 7.44% 8.23% 17.61% 31.91%
Fatima Fertilizer limited. 6.79% 5.24% 5.85% 4.76% 3.96%

Interpetition
 Profitability ratio
Gross profit ratio
Gross profit ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 41.42% 38.72% 29.32% 19.54 26.85%
Fauji Fertilizer Company limited 26.40% 19.95% 24.77% 34.05% 38.29%
Fatima Fertilizer limited. 54.07% 53.27% 56.30% 59.33% 59.06%

Interpetiton:
Operating profit ratio
Operating profit ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 4.82% 2.84% -6.58% -15.41 -7.36%
Fauji Fertilizer Company limited. 1.68% -0.33% 1.69% -0.93% -1.10%
Fatima Fertilizer limited. 40.73% 42.33% 36.31% 47.81% 51.51%
Net profit ratio
Net profit ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 36.90% 39.09% 32.73% 32.74% 27.38%
Fauji Fertilizer Company limited. 13.68% 11.81% 16.17% 19.76% 22.37%
Fatima Fertilizer limited. 28.12% 28.97% 30.61% 25.60% 23.95%
Earning per share
Earning per share
2018 2017 2016 2015 2014
United distributor Pakistan limited. 5.43% 5.86% 4.53% 5.50 6.01%
Fauji Fertilizer Company limited. 12.92% 9.04% 9.44% 15.27% -9.75%
Fatima Fertilizer limited. 5.04% 4.66% 4.41% 4.41% 3.82%
Return on asset
Return on asset
2018 2017 2016 2015 2014
United distributor Pakistan limited. 10.61% 10.79% 8.53% 12.30% 12.88%
Fauji Fertilizer Company limited. 9.86% 8.17% 9.64% 17.09% 20.98%
Fatima Fertilizer limited. 10.65% 8.84% 9.76% 11.14% 10.12%
Return on capital
Operating profit ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 13.16% 13.34% 10.62% 15.55% 18.23%
Fauji Fertilizer Company limited. 25.74% 12.67% 14.10% 29.66% 75.79%
Fatima Fertilizer limited. 19.38% 20.65% 23.00% 25.19% 24.49%
 Market Ratio
Price/Earning Ratio
Price ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 10.28% 12.33% 6.60% 5.90% 3.06%
Fauji Fertilizer Company limited 12.92% 9.04% 9.44% 15.27% 14.28%
Fatima Fertilizer limited. 6.66% 7.34% 9.50% 6.79% 6.59%
Market/Book Ratio (M/B) ratio
Market ratio
2018 2017 2016 2015 2014
United distributor Pakistan limited. 41.24% 43.93% 42.63% 35.39% 32.95%
Fauji Fertilizer Company limited. 45.13% 40.78% 40.37% 38.85% 20.18%
Fatima Fertilizer limited. 25.59% 22.56% 19.16% 17.50% 15.60%