FINANCAIL STATEMENT ANALYSIS

INTRODUCTION
Financial Management is the specific area of finance dealing with the financial decision

corporations make, and the tools and analysis used to make the decisions. The discipline as a whole may be divided between long-term and short-term decisions and techniques. These techniques include ratio analysis of different companies and index analysis and common size analysis of companies. Through these techniques we are able to know the real positioning of the company. We can analysis the performance of the management whether it works good or perform bad. These techniques like ratios analysis we can make decisions whether to invest in that company. These analyses are also important for the shareholders they have to invest their money in the company so they use these analyses in order to get the financial positioning of the company. These analyses are very useful for creditors. By using these analyses they can come to know whether the company is able to pay its debts or not. We also learn a lot from these analyses which will help us our professional life. By doing this project we are now able to know how to make decision about investing and we come to know how these analyses are important for us.

OIL AND GAS SECTOR OF PAKISTAN

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FINANCAIL STATEMENT ANALYSIS

The oil and gas sector has a considerable impact on the economy the sector attracts by far the highest level of foreign direct investments in the country, and raises significant tax income for the government. Pakistan has an interesting Geo-dynamic history of large and prospective basin (onshore and offshore) with sedimentary area of 827,268 sq. km. So far about 844 million barrels crude oil reserves have been discovered of which 535 million barrels have already been produced. Up till now over 620 exploratory wells have been drilled by various national and international exploration and production companies, resulting in over 177 oil and gas discoveries Pakistan is among the most gas dependent economies of the world. Natural gas production was about 3.7 billion cubic feet per day. Pakistan has well developed and integrated infrastructure of transporting, distributing and utilizing natural gas with 9,063 km transmission and 67,942 km of distribution and service lines network developed progressively over 50 years.

RATIOS ANALYSIS
SHELL PAKISTAN LIMITED ANNUAL REPORT 2009 Page | 2

FINANCAIL STATEMENT ANALYSIS

CURRENT RATIO =CURRENT ASSET /CURRENT LAIBILITIES =21363250000/25169302000 =0.84 The current ratio is less then 2, it shows that management performance is not good because current ratio is very low. QUICK RATIO = QUICK ASSET/CURRENT LAIBILITIES =8036482000/25169302000 =0.31 Quick ratio is less than 1, which is not good. It shows that management performance is not good. CASH RATIO = cash & cash equivalent /current liabilities =869623000/25169302000 =0.03 Cash ratio is very low which reflects poor performance of management. RECEIVABLE TURNOVER =credit sale/average receivable =156000098000/1299496000 =120.8 times COLLECTION PERIOD (IN DAYS) =365/receivable turnover =03 DAYS Receivable turnover is higher in times and lower in days which show good collection policy and ultimately good management performance in this department. STOCK TURNOVER =cost of good sold/average inventory =143097916000/13076718000 Page | 3

FINANCAIL STATEMENT ANALYSIS =10.94 TIMES HOLDING PERIOD (IN DAYS) =365/stock turnover =34 DAYS Stock turnover is lower in times and relatively higher in days which show that the stock holding is comparatively in high. So it reflect poor management performance ASSET TURNOVER RATIO =sales / average or total asset =177619519000/33653733000 =5.28 TIMES Asset turnover is comparatively high or not too much high so it reflects reasonable satisfactory performance from management. DEBT TO EQUITY RATIO =debt/equity =25383130000/8270602000 =3.06 Debt to equity ratio is on the higher side which is good from management and shareholder point of view because its result is high leverage DEBT TO TOTAL ASSET =debt/total asset =25383130000/33653733000 =0.75 It shows that lenders can recover their debt from asset if company in unable to pay debt. LONG TERM DEBT TO TOTAL CAPITALIZATION =LTD/total capitalization =213828000/8484431000 =0.025 OR 2.5 % NET PROFIT MARGIN =profit after tax/ sales =2562948000/156000098000

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FINANCAIL STATEMENT ANALYSIS =0.016 OR 1.6% GROSS PROFIT MARGIN =Gross profit/sales =12902182000/156000098000 =0.08 OR 8% RETURN ON INVESTMENT =profit after tax/ total investment =2562948000/33653733000 =0.076 OR 7.6% RETURN ON EQUITY =profit after tax/shareholder equity =2562948000/8270603000 =0.3 OR 30% ROE is 30% which attracts the new investors to invest in this company EARNING PER SHARE =profit after tax/ no. of share outstanding =2562948000/68487912 =37.42 DIVIDEND PER SHARE =dividend declared/ no. of outstanding share =2260101096/68487912 =33 DIVIDEND PAYOUT RATIO =dividend declared/ PAT =2260101096/2562948000 =0.88 OR 88% PLOUGH BACK RATIO =1-dividendpayout =1- 0.88 =0.12 OR 12 % Page | 5

FINANCAIL STATEMENT ANALYSIS DIVIDEND YIELD =dividend per share/ market price per share =33/250.714 =0.13 EARNING YIELD =earning per share/ market price per share =37.42/250.714 =0.14 PRICE EARNING RATIO =market price per share/earning per share =250.714/37.42 =6.7 INTEREST COVERAGE RATIO =EBIT/Interest =488635000/1401221000 =3.48 TIMES

RATIOS ANALYSIS
PAKISTAN STATE OIL ANNUAL REPORT 2009 CURRENT RATIO =CURRENT ASSET /CURRENT LAIBILITIES Page | 6

FINANCAIL STATEMENT ANALYSIS =28130383000/130023120000 =1.06 The current ratio is less then 2, it shows that management performance is not good because current ratio is very low. QUICK RATIO = QUICK ASSET/CURRENT LAIBILITIES =97327369000/13002312000 =0.75 Quick ratio is less than 1, which is not good. It shows that management performance is not good. CASH RATIO = cash & cash equivalent /current liabilities =28883118000/13002312000 =0.022 OR 2.2% Cash ratio is very low which reflects poor performance of management. RECEIVABLE TURNOVER =credit sale/average receivable =612695589000/71858681000 =8.5 times COLLECTION PERIOD (IN DAYS) =365/receivable turnover =43DAYS Receivable turnover is lower in times and higher in days which show poor collection policy and ultimately good management performance in this department. STOCK TURNOVER =cost of good sold/average inventory =609685478000/51529138000 =11.8 TIMES HOLDING PERIOD (IN DAYS) =365/stock turnover Page | 7

FINANCAIL STATEMENT ANALYSIS =32 DAYS Stock turnover is lower in times and relatively higher in days which show that the stock holding is comparatively is high. So it reflect poor management performance ASSET TURNOVER RATIO =sales / average or total asset =612695589000/153421643000 =3.99 TIMES Asset turnover is comparatively high or not too much high so it reflects reasonable satisfactory performance from management. DEBT TO EQUITY RATIO =debt/equity =132550858000/20870785000 =6.3 Debt to equity ratio is on the higher side which is good from management and shareholder point of view because its result is high leverage DEBT TO TOTAL ASSET =debt/total asset =132550858000/153421643000 =0.86 OR 86% It shows that lenders can recover their debt from asset if company in unable to pay debt. LONG TERM DEBT TO TOTAL CAPITALIZATION =LTD/total capitalization =252738000/23398523000 =0.1 OR 10% NET PROFIT MARGIN =profit after tax/ sales =(6698538000)/612695585000 =(0.01) OR (1%) GROSS PROFIT MARGIN =Gross profit/sales Page | 8

FINANCAIL STATEMENT ANALYSIS =3010111000/612695585000 =0.49 RETURN ON INVESTMENT =profit after tax/ total investment =(6698538000)/153421643000 =(0.04) OR( 4%) RETURN ON EQUITY =profit after tax/shareholder equity =(6698538000)/20870785000 =0.32 OR 32% ROE is 32% which attracts the new investors to invest in this company EARNING PER SHARE =profit after tax/ no. of share outstanding =(6698538000)/171518901 =(39.05) DIVIDEND PER SHARE =dividend declared/ no. of outstanding share =8575694505/171518901 =5 DIVIDEND PAYOUT RATIO =dividend per share/ earning per share =5/(39.05) =(0.12) DIVIDEND YIELD =dividend per share/ market price per share =5/213.675 =2.34% EARNING YIELD =earning per share/ market price per share =(39.42)/213.675 Page | 9

FINANCAIL STATEMENT ANALYSIS =(18.27%) PRICE EARNING RATIO =market price per share/earning per share =213.675/(39.05) =(5.47) INTEREST COVERAGE RATIO =EBIT/Interest =488635000/1401221000 =3.48 TIMES

RATIOS ANALYSIS
BYCO PETROLEUM PAKISTAN LTD ANNUAL REPORT 2009 CURRENT RATIO =CURRENT ASSET /CURRENT LAIBILITIES =16744472000/23129180000 =0.72

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FINANCAIL STATEMENT ANALYSIS The current ratio is less then 2, it shows that management performance is not good because current ratio is very low. QUICK RATIO = QUICK ASSET/CURRENT LAIBILITIES =11475980000/23129180000 =0.49 Quick ratio is less than 1, which is not good. It shows that management performance is not good. CASH RATIO = cash & cash equivalent /current liabilities =2078445000/23129180000 =0.08 OR 8% Cash ratio is very low which reflects poor performance of management. RECEIVABLE TURNOVER =credit sale/average receivable =44621016000/6254328000 =7.13 times COLLECTION PERIOD (IN DAYS) =365/receivable turnover =51 DAYS Receivable turnover is lower in times and higher in days which show poor collection policy and ultimately good management performance in this department. STOCK TURNOVER =cost of good sold/average inventory =48530050000/8211022000 =5.91 TIMES HOLDING PERIOD (IN DAYS) =365/stock turnover =62 DAYS

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FINANCAIL STATEMENT ANALYSIS Stock turnover is lower in times and relatively higher in days which show that the stock holding is comparatively is high. So it reflect poor management performance ASSET TURNOVER RATIO =sales / average or total asset =44621016000/31618793000 =1.41 TIMES Asset turnover is comparatively not high so it reflects unsatisfactory performance from management. DEBT TO EQUITY RATIO =debt/equity =34210513000/(2591720000) =(13.19) Debt to equity ratio is in negative which shows that company debt is too much high as compared to its equity which is not good for company as well as its stakeholders. LONG TERM DEBT TO TOTAL CAPITALIZATION =LTD/total capitalization =11081333000/8489613000 =1.3 OR 130% NET PROFIT MARGIN =profit after tax/ sales =(10332945000)/44621016000 =(0.23) OR (23%) It shows that company suffering 23% loss in 2009. It results or makes poor impact on management performance GROSS PROFIT MARGIN =Gross profit/sales =(3909034000)/44621016000 =0.08 OR 8% RETURN ON INVESTMENT =profit after tax/ total investment =(10332945000)/31618793000

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FINANCAIL STATEMENT ANALYSIS =(0.326) OR( 32.6%) Return of investment is negative which is not good for investors RETURN ON EQUITY =profit after tax/shareholder equity =(10332945000)/2951720000 =3.98 ROE is negative i.e 3.98 it means that creditors money is been utilized in order to run operations. EARNING PER SHARE =profit after tax/ no. of share outstanding =(10332945000)/392104396 =(26.35) EPS is in negative means that shareholders earning is nothing.

RATIOS ANALYSIS
ATTOCK REFINERY LTD ANNUAL REPORT 2009 CURRENT RATIO =CURRENT ASSET /CURRENT LAIBILITIES =28130383000/32296945000 =0.87

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FINANCAIL STATEMENT ANALYSIS The current ratio is less then 2, it shows that management performance is not good because current ratio is very low. QUICK RATIO = QUICK ASSET/CURRENT LAIBILITIES =22884273000/32296945000 =0.70 Quick ratio is less than 1, which is not good. It shows that management performance is not good. CASH RATIO = cash & cash equivalent /current liabilities =6802306000/32296945000 =0.21 OR 21% RECEIVABLE TURNOVER =credit sale/average receivable =77260500000/12668915000 =6.09 times COLLECTION PERIOD (IN DAYS) =365/receivable turnover =60 DAYS Receivable turnover is lower in times and higher in days which show poor collection policy and ultimately good management performance in this department.

STOCK TURNOVER =cost of good sold/average inventory =75342096000/4856914000 =15.5 TIMES HOLDING PERIOD (IN DAYS) =365/stock turnover =24 DAYS Page | 14

FINANCAIL STATEMENT ANALYSIS Stock turnover is higher in times and relatively lower in days which show that the stock holding is comparatively is low. So it reflect good management performance ASSET TURNOVER RATIO =sales / average or total asset =77260500000/44487543000 =1.73 TIMES DEBT TO EQUITY RATIO =debt/equity =32417075000/12070468000 =2.68 TIMES Debt to equity ratio is on the higher side which is good from management and shareholder point of view because its result is high leverage DEBT TO TOTAL ASSET =debt/total asset =32417075000/44487543000 =0.72 OR 72% It shows that lenders can recover their debt from asset if company in unable to pay debt. LONG TERM DEBT TO TOTAL CAPITALIZATION =LTD/total capitalization =120130000/12190598000 =0.98% NET PROFIT MARGIN =profit after tax/ sales =1016758000/77260500000 =0.013 OR 1.3% GROSS PROFIT MARGIN =Gross profit/sales =1918404000/77260500000 =0.02 OR 2% Page | 15

FINANCAIL STATEMENT ANALYSIS RETURN ON INVESTMENT =profit after tax/ total investment =1016758000/44487543000 =0.022 OR 2.2%

RETURN ON EQUITY =profit after tax/shareholder equity = 1016758000/12070468000 =0.08 OR 8% ROE is although positive but not too high which reflects poor management performance EARNING PER SHARE =profit after tax/ no. of share outstanding =1016758000/85293000 =11.92 PER SHARE

RATIOS ANALYSIS
NATIONAL REFINERY PAKISTAN LTD ANNUAL REPORT 2009 CURRENT RATIO =CURRENT ASSET /CURRENT LAIBILITIES =39155717000/24856323000 =1.57

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FINANCAIL STATEMENT ANALYSIS The current ratio is less then 2, it shows that management performance is satisfactory but still they need to improve. QUICK RATIO = QUICK ASSET/CURRENT LAIBILITIES =26850787000/24856323000 =1.08 Quick ratio is greater than 1, which is good. It shows that management performance is good. CASH RATIO = cash & cash equivalent /current liabilities =7800079000/24856323000 =0.31 OR 31% RECEIVABLE TURNOVER =credit sale/average receivable =109578364000/12545293000 =8.73 times

COLLECTION PERIOD (IN DAYS) =365/receivable turnover =41 DAYS Receivable turnover is lower in times and higher in days which show poor collection policy and ultimately good management performance in this department. STOCK TURNOVER =cost of good sold/average inventory =104304898000/12769736000 =8.168 TIMES HOLDING PERIOD (IN DAYS) =365/stock turnover =45 DAYS

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FINANCAIL STATEMENT ANALYSIS Stock turnover is lower in times and relatively high in days which show poor management performance ASSET TURNOVER RATIO =sales / average or total asset =109578364000/42344611000 =2.58 TIMES DEBT TO EQUITY RATIO =debt/equity =24991870000/17352741000 =1.44 TIMES Debt to equity ratio is on the higher side which is good from management and shareholder point of view because its result is high leverage DEBT TO TOTAL ASSET =debt/total asset =24991870000/42344611000 =0.59 OR 59% It shows that lenders can recover their debt from asset if company in unable to pay debt. LONG TERM DEBT TO TOTAL CAPITALIZATION =LTD/total capitalization =135547000/17488288000 =0.77%

NET PROFIT MARGIN =profit after tax/ sales =1533028000/109578364000 =0.01 OR 1% GROSS PROFIT MARGIN =Gross profit/sales =5273466000/109578364000 Page | 18

FINANCAIL STATEMENT ANALYSIS =0.04 OR 4% RETURN ON INVESTMENT =profit after tax/ total investment =1533028000/42344611000 =0.03 OR 3% RETURN ON EQUITY =profit after tax/shareholder equity = 1533028000/17352741000 =0.08 OR 8% ROE is although positive but not too high which reflects poor management performance EARNING PER SHARE =profit after tax/ no. of share outstanding =1533028000/79966560 =19.17 PER SHARE DIVIDEND PER SHARE =dividend declared/ no. of outstanding share =999582000/79966560 =12.5 DIVIDEND PAYOUT RATIO =dividend per share/ earning per share =12.5/19.17 =0.65 OR 65% DIVIDEND YIELD =dividend per share/ market price per share =12.5/220.02 =0.05 EARNING YIELD =earning per share/ market price per share =19.17220.02 =0.08 Page | 19

FINANCAIL STATEMENT ANALYSIS PRICE EARNING RATIO =market price per share/earning per share =220.02/19.17 =11.47

INDEX AND COMMON SIZE ANALYSIS COMMON SIZE SHELL PAKISTAN LTD PROFIT AND LOSS STATEMENT
SHELL PAKISTAN LTD 2007.00 2008.00 100.00 100.00 94.45 96.05 5.55 3.95 2009.00 100.00 91.73 8.27

Sales Cost of Sales Gross Profit

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FINANCAIL STATEMENT ANALYSIS Selling and Distribution Cost Admin & Gen Expenses Other Operating Expenses Operating Income Operating Profit Finance Cost Profit Before taxation Provision for taxes Profit After Taxation 2.93 1.77 0.02 1.96 1.71 1.66 2.16 2.47 0.82

0.19 1.01 0.79 0.33

0.37 1.01 0.93 1.87

0.32 3.13 0.90 2.51

0.29 0.61

0.81 1.06

0.86 1.64

INDEX ANALYSIS SHELL PAKISTAN LTD PROFIT AND LOSS STATEMENT

2007 100.00 100.00 2008 141.81 144.20 2009 135.60 131.69

Sales Cost of Sales

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FINANCAIL STATEMENT ANALYSIS Gross Profit

SHELL PAKISTAN LIMITED STATEMENT OF FINANCIAL POSITION 100.00 101.11 202.21 Common size analysis
2007 % 2008 % 100.29 188.86 72.28 22.6 4887.75 1.54 2.14 1.43 228.50 0 100 418.95 0.04 153.99 59.54 16.37 1032.38 0.16 0.69 20.29 410.79 0 2.91 362.69 100 2009 % 59.51 18.82 0.82 1.68 0.17 19 100 0.07 61.21 5.8 0.28 1.17 27.39 0 4.07 100

Selling and 100.00 95.02 Distribution Cost NON CURRENT ASSET Admin & Gen 100.00 136.73 69.28 FIXED ASSETS Expenses INVESTMENT LONG TERM 21.22 OtherTERM LOAN AND ADVANCES Operating 100.00 10321.18 1.12 LONG Expenses LONG TERM DEPOSITS AND PREPAYMENTS 1.17 LONG TERM DEBTORS 3.46 Operating Income 100.00 279.68 DEFFERED TAXATION 2.96 TOTAL 100 Operating Profit 100.00 140.89 CURRENT ASSETS STORES AND SPARES 0.15 Finance Cost 100.00 167.28 41.82 STOCK IN TRADE TRADE DEBTS 21.57 Profit Before 804.98 0.22 LOANS AND ADVANCES 100.00 taxation TRADE DEPOSITS 0.71 OTHER RECEIVABLES 30.29 Provision for taxes 100.00 403.49 TAXATION 1.11 CASH AND BANK BALANCE 4.13 Profit After Taxation 100.00 244.19 TOTAL 100 EQUITY AND LIABILITIES EQUITY SHARE CAPITAL 5.79 RESERVES 23.66 UNAPPROPRIATED PROFIT 70.61 TOTAL 100

4.02 16.41 79.57 100

8.28 25.34 66.38 100

This analysis shows that the management has to work hard in order to get reasonable profit as the common size analysis shows that the company have suffer loss in 2008 while in 2007 the company although have little profit but as the cost of goods goes high in 2008 which will result in decrease in gross profit which will ultimately effect the profits of the company. In 2009 company management done their job in good manner they drop down expense as well as the cost of good sold. That they earn profit in 2009 which shows the good management performance

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FINANCAIL STATEMENT ANALYSIS NON CURRENT LIABILITIES DEFFERED TAXATION LIABILITIES AGAINST ASSET SUBJECT TO FINANCE LEASE LONG TERM LOAN AND ADVANCES ASSET RETIREMENT OBLIGATION TOTAL CURRENT LIABILITIES CURRENT MATURITY OF LIABILITIES AGAINST FINANCE LEASE SHORT TERM RUNNING FINANCE UTILISED UNDER MARKUP ARRANGED SHORT TERM LOANS TRADE AND OTHER PAYABLES MARK UP ACCRUED TAXATION TOTAL

0 0.39 99.61 100 0.16 3.7 34.72 60.74 1.7 0 100

1.88 0.08 91.06 6.98 100 0.25 18.82 6.51 70.4 0.68 3.35 100

0 0.84 99.16 0 100 0.15 9.75 23.84 63.45 0.79 2.01 100

Shell Pakistan LIABILITIESSHELL PAKISTAN LIMITED NON CURRENTltd have strong mind of increasing the asset day by day. They DEFFERED TAXATION STATEMENT OF FINANCIAL POSITION 0 0 INDEX ANALYSIS LIABILITIES AGAINST ASSET SUBJECT TO FINANCE LEASE 100 405.92 327.24 2007 % 100 2008%100 2009% LONG TERM LOAN AND ADVANCES 0 NON CURRENT ASSET ASSET RETIREMENT OBLIGATION 100 138.35 153.1 FIXED ASSETS 100 103.75 TOTAL 100 1974.54 111.16 153.79 CURRENT LIABILITIES LONG TERM INVESTMENT 100 105.95 114.75 CURRENT MATURITY OF LIABILITIES 10080.17176.2 55.35 121.51 LONG TERM LOAN AND ADVANCES AGAINST FINANCE LEASE 100 SHORT TERM RUNNINGAND PREPAYMENTS UNDER MARKUP FINANCE UTILISED 100 597.7 186.08 337.96 LONG TERM DEPOSITS 100 181.74 ARRANGED DEBTORS LONG TERM 100 41.11 6.37 SHORT TERM LOANS 100 0 22.03 830.99 88.17 DEFFERED TAXATION 100 TRADE AND OTHER PAYABLES 100 138.37 134.07 TOTAL 100 99.44 129.4 MARK UP ACCRUED 100 119.53 152.02 CURRENT ASSETS TAXATION 100 100 100 STORES AND SPARES 100 44.01 51 TOTAL 100 131.91 128.3 STOCK IN TRADE 100 219.5 158.61 4 TRADE DEBTS 100 115.37 29.15 LOANS AND ADVANCES 100 110.09 141.11 TRADE DEPOSITS 100 148.22 178.3 OTHER RECEIVABLES 100 101.8 98 TAXATION 100 0 0 CASH AND BANK BALANCE 100 107.11 106.76 TOTAL 100 153.3 108.37 EQUITY AND LIABILITIES SHARE CAPITAL 100 100 125 RESERVES 100 100 93.37 UNAPPROPRIATED PROFIT 100 162.14 82.18 TOTAL 100 143.87 87.42
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FINANCAIL STATEMENT ANALYSIS

BYCO PETROLEUM LIMITED STATEMENT OF COMPREHENSIVE INCOME COMMON SIZE ANALYSIS

GROSS SALES GOVERNMENT LEVIS NET SALES COST OF SALES
2007 % 100 17.22 82.78 83.09 2008% 100 10.69 89.31 83.97 2009% 100 18.53 81.47 88.61

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FINANCAIL STATEMENT ANALYSIS

GROSS PROFIT/loss ADMINISTRATIVE EXPENSE SELLING AND DISTRIBUTION EXPENSE OPERATING PROFIT/LOSS OTHER INCOME FINANCIAL CHARGES EXCHANGE DIFFERENCE WORKERS PROFIT PARTICIPATION FUND PROFIT/LOSS BEFORE TAXATION TAXATION CURRENT YEAR PRIOR YEAR DEFERRED PROFIT LOSS AFTER TAXATION

-0.31 0.68 0.16 -1.15 0.2 1.52 0.22 ---2.69 ----0.41 0.78 0.2 -2.92

5.34 0.6 0.35 4.39 0.47 1.24 3.14 0.02 0.46 ----0.45 0.01 0.04 0.04

-7.14 0.73 0.35 -8.22 0.62 3.25 8 ----18.86 ---0.1 0.04 0.13 -18.87

BYCO PETROLEUM LIMITED STATEMENT OF COMPREHENSIVE INCOME INDEX ANALYSIS

GROSS SALES GOVERNMENT LEVIS NET SALES COST OF SALES GROSS PROFIT/loss
2007 100 100 100 100 100 2008 171.7 106.6 185.2 173.51 2954.97 2009 234.56 252.38 230.85 250.14 Page | 25

FINANCAIL STATEMENT ANALYSIS 5392.8 9 251.57 532.53 1676.7 5 731.89 501.86 8639.4 7 1643.9 2 56.97 1068.9 150.91 1516.7 3

ADMINISTRATIVE EXPENSE SELLING AND DISTRIBUTION EXPENSE OPERATING PROFIT/LOSS OTHER INCOME FINANCIAL CHARGES EXCHANGE DIFFERENCE WORKERS PROFIT PARTICIPATION FUND PROFIT/LOSS BEFORE TAXATION TAXATION CURRENT YEAR PRIOR YEAR DEFERRED PROFIT LOSS AFTER TAXATION

100 100 100 100 100 100

150.81 383.65 655.86 405.9 140.06 2482

100 100 100 100 100 100

29.29 184.84 330.82 35.47 2.22

BYCO PETROLUEM is suffering worse loss. Instead of the profits of the last year the company has gone upside down suffering loss 1500% as compared to the year 2007 the company is taking large amount of loans to continue the operations. Finance costs are rising to 500% eating up the amount of profit. This will shows that the company management in not doing their job up to the mark. Management has to think hard about the company financial position going down and down day by day. Management has to think about the company policies which they are using regarding the financial operations. Selling and distribution costs have gone up. Cost of goods sold has also gone up by 250 %. Management showing poor performance as operating expenses have gone to 500% as compared to 2007. Increase in sale is not enough as increase in other costs is greater then the increase in sales.

BYCO PETROLEUM LIMITED STATEMENT OF FINANCIAL POSITION COMMON SIZE ANALYSIS

2007 2008 2009 Page | 26

FINANCAIL STATEMENT ANALYSIS NON CURRENT ASSETS PROPERTY PLANT AND EQUIPMENT INTANGIBLE ASSET LONG TERM DEPOSITS LONG TERN DEPOSITS TOTAL CURRENT ASSET STORES AND SPARES STOCK IN TRADE TRADE DEBTS LOANS AND ADVANCES TRADE DEPOSITS, PREPAYMENTS MARK UP ACCRUED CASH AND BANK BALANCE TOTAL SHARE CAPITAL AND RESERVE ISSUED, SUBSCRIBED AND PAID UP CAPITAL ACCUMULATED LOSS TOTAL NON CURRENT LIABILITIES CONTRIBUTION TOWARDS RIGHT ISSUE OF SHARES LOAN FROM SPONSOR TERM FINANCE CERTIFICATE LONG TERM LOANS SECURED LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE LONG TERM DEPOSITS DEFERRED LIABILITY TOTAL CURRENT LIABILITIES TRADE AND OTHER PAYABLE ACCRUED MARK UP SHORT TERM BORROWINGS CURRENT PORTION OF NON CURRENT LIABILITIES PROVISION FOR TAXATION TOTAL

95.07 0.21 0.26 4.46 100 1.62 60.74 12.66 1.07 2.97 20.99 100 121.74 -21.74 100 45.41 10.18 31.18 4.61 8.62 100 87.4 1.31 2.94 7.21 1.14 100

99.35 0.12 0.53 100 0.56 50.91 13.73 0.38 0.5 0.18 33.73 100 111.12 -11.12 100

99.36 0.05 0.39 0.21 100 0.91 26.8 54.29 0.67 4.66 0.25 12.41 100 58.73 -158.73 -100

12.43 7.82 47.06 13.33 0.32 19.03 100 92.54 0.49 3.91 2.37 0.7 100

36.31 46.55 2.47 0.04 14.63 100 88.19 4.63 0.94 6.24 100

BYCO PETROLEUM LIMITED STATEMENT OF FINANCIAL POSITION INDEX ANALYSIS

2007 NON CURRENT ASSETS Page | 27 2008 2009

FINANCAIL STATEMENT ANALYSIS PROPERTY PLANT AND EQUIPMENT INTANGIBLE ASSET LONG TERM DEPOSITS LONG TERN DEPOSITS TOTAL CURRENT ASSET STORES AND SPARES STOCK IN TRADE TRADE DEBTS LOANS AND ADVANCES TRADE DEPOSITS, PREPAYMENTS MARK UP ACCRUED CASH AND BANK BALANCE TOTAL SHARE CAPITAL AND RESERVE ISSUED, SUBSCRIBED AND PAID UP CAPITAL ACCUMULATED LOSS TOTAL NON CURRENT LIABILITIES CONTRIBUTION TOWARDS RIGHT ISSUE OF SHARES LOAN FROM SPONSOR TERM FINANCE CERTIFICATE LONG TERM LOANS SECURED LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASE LONG TERM DEPOSITS DEFERRED LIABILITY TOTAL CURRENT LIABILITIES TRADE AND OTHER PAYABLE ACCRUED MARK UP SHORT TERM BORROWINGS CURRENT PORTION OF NON CURRENT LIABILITIES PROVISION FOR TAXATION TOTAL 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 134.09 75 264.68 128.31 95.6 230.51 292.17 101.12 41.09 441.98 275 160 89.67 175.29 0 0 33.32 65.43 125.45 0 95.68 43.35 319.92 112.27 401.61 99.21 184.84 302.16 231.57 50 332.73 10.44 221.38 110.12 86.68 842.28 129.63 308.75 116.19 196.45 160 2421.8 4 -331.66 0 0 0 523.88 187.9 0 595.42 350.9 275.53 968.27 87.37 236.36 0 273.08

BYCO PETROLEUM cash and bank balance is also decreasing due to the increase in costs. Company is suffering continuous losses which have turned the equity into negative. Any dealing
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FINANCAIL STATEMENT ANALYSIS

with the company is not advised. Lenders dont trust on the company the investors dont want to invest in the company just because of the poor performance of the company. Its also shows that the management have to change in order to be competent in the market

NATIONAL REFINERY LIMITED STATEMENT OF COMPREHENSIVE INCOME COMMON SIZE ANALYSIS

GROSS SALES 2007 100 2008 100 2009 100 Page | 29

FINANCAIL STATEMENT ANALYSIS TRADE DISCOUNTS,TAXES,DUTIES & LEVIES NET SALES COST OF PRODUCT SOLD GROSS PROFIT DISTRIBUTION & MARKETING EXPENSE ADMINISTRATIVE EXPENSE OTHER OPERATING INCOME OTHER OPERATING EXPENSE OPERATING PROFIT FINANCE COST PROFIT BEFORE TAXATION TAXATION PROFIT AFTER TAXATION

16.33 83.67 77.97 5.74 0.31 0.32 0.91 0.42 5.6 0.02 5.58 1.73 3.85

11.52 88.48 81.18 7.3 0.61 0.26 0.96 0.45 6.95 0.91 6.04 1.93 4.11

21.79 78.21 74.44 3.76 0.6 0.27 0.97 0.15 3.72 1.72 2.01 0.91 1.1

NATIONAL REFINERY LIMITED STATEMENT OF COMPREHENSIVE INCOME INDEX ANALYSIS

GROSS SALES TRADE DISCOUNTS,TAXES,DUTIES & LEVIES NET SALES COST OF PRODUCT SOLD GROSS PROFIT DISTRIBUTION & MARKETING EXPENSE ADMINISTRATIVE EXPENSE OTHER OPERATING INCOME OTHER OPERATING EXPENSE OPERATING PROFIT FINANCE COST PROFIT BEFORE TAXATION TAXATION PROFIT AFTER TAXATION 2007 100 100 100 100 100 100 100 100 100 100 100 100 100 100 2008 133.98 94.55 141.67 139.5 170.52 260.35 108.96 141.47 145.01 166.15 6054.69 144.9 149.35 142.8 2009 128.37 171.35 119.94 122.62 84.19 247.22 107.66 137.52 47.44 85.14 10886.55 46.16 67.67 36.46

National |Refinery has high profits in the year 2007 and 2008 in 2009 the have less profit as compared to the previous years. Finance costs for the company are the most threatening as increase rate is 11000% as compared to 2007 finance costs are absorbing the profits but the company is still profitable at the end. The sales are increasing but the company is maintaining
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FINANCAIL STATEMENT ANALYSIS

the relative low increase in the cost of goods sold. The operating expenses are well managed by the company which decreased in handsome amount. This all shows that the company has doing its job but not as much as they have to take serious steps in order to in profit as they were in last years they have to cut down they finance cost which will effect the company profit.

NATIONAL REFINERY LIMITED STATEMENT OF FINANCIAL POSITION COMMON SIZE ANALYSIS

NON CURRENT ASSETS 2007 % 2008 % 2009 % Page | 31

FINANCAIL STATEMENT ANALYSIS PROPERTY PLANT AND EQUIPMENT INTANGIBLE ASSETS DEFERRED TAXATION LONG TERM INVESTMENT LONG TERM LOANS AND DEPOSITS TOTAL CURRENT ASSETS STORES AND SPARES STOCK IN TRADE TRADE DEBTS LOANS AND ADVANCES DEPOSITS AND PREPAYMENTS ACCRUED INTEREST OTHER RECEIVABLES INVESTMENTS TAX REFUNDS DUE FROM GOVERNMENT CASH AND BANK BALANCE TOTAL SHARE CAPITAL AND RESERVE ISSUED, SUBSCRIBED AND PAID UP CAPITAL RESERVE TOTAL NON CURRENT LIABILITIES RETIREMENT BENEFIT OBLIGATION TOTAL CURRENT LIABILITIES TRADE AND OTHER PAYABLES PROVISIONS TAXATION TOTAL 90.58 0.7 6.23 0 2.49 100 2.67 25.58 20.4 0.07 0.14 0.15 6.06 3.2 3.5 38.24 100 5.23 94.77 100 100 100 89.88 1.52 8.6 100 91.03 0.42 5.75 0 2.8 100 1.78 30.38 23.25 0.12 0.22 0.07 5 8.26 0.93 30 100 4.59 95.41 100 100 100 92.34 1.03 6.62 100 94.68 0.19 2.65 2.48 100 2.39 31.29 37.9 0.06 0.14 0.13 6.08 0.5 1.47 19.92 100 4.61 95.39 100 100 100 92.66 1.21 6.13 100

NATIONAL REFINERY LIMITED STATEMENT OF FINANCIAL POSITION INDEX ANALYSIS

NON CURRENT ASSETS PROPERTY PLANT AND EQUIPMENT 2007 % 100 2008 % 111 2009 % 128.85 Page | 32

FINANCAIL STATEMENT ANALYSIS INTANGIBLE ASSETS DEFERRED TAXATION LONG TERM INVESTMENT LONG TERM LOANS AND DEPOSITS TOTAL CURRENT ASSETS STORES AND SPARES STOCK IN TRADE TRADE DEBTS LOANS AND ADVANCES DEPOSITS AND PREPAYMENTS ACCRUED INTEREST OTHER RECEIVABLES INVESTMENTS TAX REFUNDS DUE FROM GOVERNMENT CASH AND BANK BALANCE TOTAL SHARE CAPITAL AND RESERVE ISSUED, SUBSCRIBED AND PAID UP CAPITAL RESERVE TOTAL NON CURRENT LIABILITIES RETIREMENT BENEFIT OBLIGATION TOTAL CURRENT LIABILITIES TRADE AND OTHER PAYABLES PROVISIONS TAXATION TOTAL 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 65.74 102.05 --124 110.46 97.05 172.86 165.95 257.39 222.4 68.03 119.89 375.78 38.85 114.18 145.56 120 137.58 136.66 131.8 131.8 150.9 99.8 113.16 146.88 32.76 52.44 --122.92 123.27 116.67 159.37 242.1 127.21 124.65 202.31 130.84 20.54 54.81 67.87 130.28 120 137.03 136.14 57.21 57.21 130.35 100.78 90.1 126.44

Fixed assets are in big amounts which can be utilized to take loan by giving charge etc. cash in hand is also in good condition and the liabilities are less which gives a good reason to invest money. This will show the satisfactory performance of the company.

PAKISTAN STATE OIL STATEMENT OF COMPREHENSIVE INCOME COMMON SIZE ANALYSIS

2007 SALES 100 2008 100 2009 100

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FINANCAIL STATEMENT ANALYSIS 93. COST OF PRODUCT SOLD GROSS PROFIT OTHER OPERATING INCOME TRANSPORTATION COST DISTRIBUTION & MARKETING COST ADMINISTRATIVE EXPENSE DEPRECIATION AMORTISATION OTHER OPERATING EXP OTHER INCOME LOSS/PROFIT FROM OPERATIONS FINANCE COST SHARE OF PROFITS OF ASSOCIATES LOSS/PROFIT BEFORE TAXATION TAXATION LOSS/PROFIT FOR THE YEAR 96.49 3.51 0.37 0.11 0.79 0.29 0.31 0.01 0.22 0.12 2.27 0.33 0.09 2.03 0.7 1.34 94 6. 06 0. 28 0. 07 0. 70 0. 23 0. 23 0. 01 0. 68 0. 06 4. 53 0. 29 0. 06 4. 59 1. 48 2 .84 1.09 0.76 1.85 0.07 1.02 0.91 0.13 0.65 0.01 0.19 0.19 0.65 0.08 0.24 0.49 99.51

PAKISTAN STATE OIL STATEMENT OF COMPREHENSIVE INCOME INDEX ANALYSIS

2007 % 2008 % 2009 % Page | 34

FINANCAIL STATEMENT ANALYSIS

SALES COST OF PRODUCT SOLD GROSS PROFIT OTHER OPERATING INCOME TRANSPORTATION COST DISTRIBUTION & MARKETING COST ADMINISTRATIVE EXPENSE DEPRECIATION AMORTISATION OTHER OPERATING EXP OTHER INCOME LOSS/PROFIT FROM OPERATIONS FINANCE COST SHARE OF PROFITS OF ASSOCIATES LOSS/PROFIT BEFORE TAXATION TAXATION LOSS/PROFIT FOR THE YEAR

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

141.63 137.87 244.9 109.19 91.49 119.41 114.4 101.91 113.79 443.8 73.98 282.41 118.11 89.1 300.16 301.1 299.67

175.2 180.68 24.55 113.51 139.08 144.28 114.87 103.96 125.55 528.76 183.08 -70.14 538.12 136.8 -159.46 191.53 142.83

The common size and index analysis shows the sales are increasing and trade debts are also increasing this shows the sales are on credit. Cost of goods is also increasing affecting the gross profit and reducing it. Increase in sales is not enough in relation to the cost company is facing worse economic conditions which are affecting the company performance. This also shows that the management is performance is just satisfactory but they have to do a lot of hard work in order to b in high profit.

PAKISTAN STATE OIL STATEMENT OF FINANCIAL POSITION COMMON SIZE ANALYSIS

2007 2008 2009 Page | 35

FINANCAIL STATEMENT ANALYSIS NON CURRENT ASSETS PROPERTY PLANT AND EQUIPMENT INTANGIBLE ASSETS LONG TERM INVESTMENT LONG TERM LOAN LONG TERM DEPOSITS DEFERRED TAX TOTAL CURRENT ASSETS STORE AND SPARES STOCK IN TRADE TRADE DEBTS LOAN AND ADVANCES DEPOSITS AND SHORT TERM PREPAYMENTS OTHER RECEIVABLES TAXATION CASH AND BANK BALANCE TOTAL EQUITY AND LIABILITY EQUITY SHARE CAPITAL RESERVES TOTAL NON CURRENT LIABILITIES LONG TERM DEPOSITS RETIREMENT AND OTHER SERVICE BENEFITS TOTAL CURRENT LIABILITIES TRADE AND OTHER PAYABLES PROVISIONS ACCRUED INTEREST SHORT TERM BORROWINGS TAXATION TOTAL % 65.54 1.03 24.46 5.14 0.54 3.28 100 0.04 47.29 21.76 0.59 2.53 25.2 2.44 100 % 66.43 0.94 24.05 4.25 0.7 3.63 100 0.1 53.82 29.26 0.34 0.35 13.53 2.61 100 % 47.43 0.47 14.62 2.75 0.57 34.17 100 0.08 29.34 58.04 0.3 0.4 9.23 0.51 2.08 100

8.19 91.81 100 31.85 68.15 100 80.63 1.34 0.26 17.64 0.14 100

5.54 94.46 100 34.65 68.35 100 86.48 0.77 0.23 11.73 0.78 100

8.22 91.78 100 33.81 66.19 100 84.7 0.53 0.43 14.34 0 100

PAKISTAN STATE OIL STATEMENT OF FINANCIAL POSITION INDEX ANALYSIS

NON CURRENT ASSETS 2007 % 2008 % 2009 %

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FINANCAIL STATEMENT ANALYSIS PROPERTY PLANT AND EQUIPMENT INTANGIBLE ASSETS LONG TERM INVESTMENT LONG TERM LOAN LONG TERM DEPOSITS DEFERRED TAX TOTAL CURRENT ASSETS STORE AND SPARES STOCK IN TRADE TRADE DEBTS LOAN AND ADVANCES DEPOSITS AND SHORT TERM PREPAYMENTS OTHER RECEIVABLES TAXATION CASH AND BANK BALANCE TOTAL EQUITY AND LIABILITY EQUITY SHARE CAPITAL RESERVES TOTAL NON CURRENT LIABILITIES LONG TERM DEPOSITS RETIREMENT AND OTHER SERVICE BENEFITS TOTAL CURRENT LIABILITIES TRADE AND OTHER PAYABLES PROVISIONS ACCRUED INTEREST SHORT TERM BORROWINGS TAXATION TOTAL 100 100 100 100 100 100 100 100 100 100 100 100 100 0 100 100 100 100 100 100 100 100 100 100 100 100 100 100 93.11 83.59 90.32 76.08 120 101.57 91.88 90.56 210.95 249.3 108.26 25.34 99.56 0 198.3 185.37 100 152.15 147.89 108.63 95.75 99.85 195.67 105.46 165.15 121.33 1047.15 182.42 87.2 54.56 72.01 64.62 126.92 1255.06 120.52 87.69 137.67 591.86 114.22 34.84 81.34 100 189.39 221.86 100 99.64 99.67 111.25 101.76 104.78 265.8 100 421.62 205.79 0 173.97

Liabilities are increasing and in assets receivables are increasing. Under current scenario it will not be suitable to lend or invest money in the company as the risk associated with the company is at highest level. This will shows that the management have to take steps in order to b successful

ATTOCK REFINERY LTD INCOME STATEMENT INDEX ANALYSIS

2007 Sales 100.00 2008 157.50 2009 129.93

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FINANCAIL STATEMENT ANALYSIS

Cost of Sales Gross Profit Selling and Distribution Cost Admin & Gen Expenses Other Operating Expenses Operating Income Operating Profit Finance Cost Profit Before taxation Provision for taxes Profit After Taxation

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

152.99 462.68 1,192.49 10.93 230.75 90.98 342.18 504.72 300.48 192.67 268.04

128.58 221.46 124.49 127.25 121.70 156.45 210.71 596.86 111.63 146.01 54.21

ATTOCK REFINERY LTD INCOME STATEMENT COMMON SIZE ANALYSIS 2007

Sales Cost of Sales Gross Profit Selling and Distribution Cost Admin & Gen Expenses Other Operating Expenses Operating Income Operating Profit Finance Cost Profit Before taxation Provision for taxes Profit After Taxation 100.00 98.54 1.46 0.03 0.29 0.17 1.07 2.03 0.41 1.62 0.77 1.26

2008
100.00 95.72 4.28 0.21 0.02 0.25 0.62 4.41 1.33 3.08 0.94 2.14

2009
100.00 97.52 2.48 0.03 0.29 0.16 1.29 3.29 1.90 1.39 0.86 0.53

ATTOCK REFINERY LTD BALANCE SHEET COMMON SIZE ANALYSIS

Liabilities

2007

2008

2009
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FINANCAIL STATEMENT ANALYSIS

Capital Reserve surplus on revolution Total Equity Non-Current Liabilities provision for staff gratuity TOTAL NON CURRENT LIABILITES Current Liabilities Trade & Other Payables Provision for taxation TOTAL Total

1.77 9.97 5.98 17.71

1.42 17.95 3.84 23.21

1.92 20.89 4.32 27.13

0.27 0.27

0.19 0.19

0.27 0.27

78.89 3.13 82.02 100.00

73.26 3.34 76.60 100.00

68.13 4.46 72.60 100.00

Assets Non-Current Assets Property Plat & Equipment Deferred taxation Long term Investment Long Term DEPOSIT & loan TOTAL Current assets 9.22 0.49 28.77 0.03 38.52 5.85 0.44 26.23 0.03 32.54 6.56 0.41 29.77 0.03 36.77

Store, Spare & Tool Stock in Trade Other receivables Cash & Bank Balances Trade Debts TOTAL CURRENT ASSETS

1.96 11.97 0.59 27.59 19.37 61.48

1.08 9.67 0.49 37.83 18.38 67.46

1.29 10.94 0.85 15.29 34.86 63.23

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FINANCAIL STATEMENT ANALYSIS

Total

100.00

100.00

100.00

ATTOCK REFINERY LTD BALANCE SHEET INDEX ANALYSIS

Liabilities Capital Reserve surplus on revolution Total Equity Non-Current liabilities provision for staff gratuity TOTAL NON CURRENT LIABILITES Current liabilities Trade & Other Payables Provision for taxation Total Assets Non-Current Assets Property Plat & Equipment Deferred taxation Long term Investment Long Term DEPOSIT & loan Current Assets Store, Spare & Tool Stock in Trade Other receivables Cash & Bank Balances Trade Debts Total

2007 100.00 100.00 100.00 100.00 100.00

2008 125.00 280.00 100.00 203.83 112.92

2009 150.00 289.53 100.00 211.69 140.01

100.00 100.00 100.00

144.48 166.20 155.59

119.37 197.25 138.21

100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

98.70 7.49 141.83 116.23 86.00 125.75 127.94 213.34 147.67 155.59

98.25 6.29 143.00 113.54 90.86 126.38 197.19 76.60 248.74 138.21

Attock refinery ltd have high profit in 2008 as compared to 2007 the company have the less cost of good sold in 2008 which will shows that the management have done a great job in 2008 and in 2009 the company decline the profit as compared to 2007. The company have decline in current
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FINANCAIL STATEMENT ANALYSIS

asset and investor can invest their investment in that company. The management although have to work hard in order to get reasonable profit in coming year.

CONCLUSION

After doing financial analysis we have learned a lot. Its healthy and knowledgeable learning for us that we can analyze different companys financial statements. We come to know that performance of the companies that whether they are earning profit or suffering from losses and what the reason behind that the company suffer from such losses. We also come to know how the management is doing his job when we analyzed the financial statements because management has to take steps and make decision regarding all the mater of the company. They have to make decision on the basis of the performance of the company they have to keep touch with the financial performance of the companies. In the last through this project we learned a lot that this project is helpful for us in near future. Now we are able to analysis the financial statement of the companies. We can make decision whether to invest or not like that, whether the companies are going in high profits or not.

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