Financial Statement Analysis of Financial Statement Analysis of

Pakistan Hotels Developers Limited Pakistan Hotels Developers Limited

and Pakistan Services Limited and Pakistan Services Limited
ntroduction of the Project ntroduction of the Project
'e 'e presentation presentation is is based based on on te te financial financial data data
analysis analysis of of two two Pakistani Pakistani listed listed companies companies engaged engaged
in in te te business business of of otel otel industry, industry, Pakistan Pakistan Hotels Hotels
Developers Developers Limited Limited (ereinafter (ereinafter referred referred to to as as
PHDL) PHDL) and and Pakistan Pakistan Services Services Limited Limited (ereinafter (ereinafter
referred referred to to as as PSL) PSL). .
'ree 'ree years years data data as as been been analyzed analyzed in in order order to to
reac reac at at aa compreensive compreensive conclusion conclusion to to avoid avoid any any
unusual unusual fluctuation fluctuation confront confront te te company company. .
-jectives and Significance -jectives and Significance
Objectives Objectives
e e will will discuss discuss balance balance seet, seet, PP SS L L accounts, accounts,
Cas Cas flow flow statement statement and and eac eac and and every every
important important aspect aspect of of bot bot te te companies companies. . So So
tat tat we we can can be be in in aa better better position position to to
comments comments on on otel otel industry industry of of our our country country
Significance Significance
Hotel Hotel industry industry is is te te back back bone bone of of tourism, tourism, and and
it it is is an an industry industry of of uge uge dimensions dimensions in in its its own own
place place. . !t !t consumes consumes large large amounts amounts of of inputs inputs and and
services, services, tus, tus, creating creating strong strong economic economic stimuli stimuli
for for te te economy economy of of te te country country. .
Data Collection Data Collection
a) a) Data Data CoIIection CoIIection Sources Sources: :- -
Primary Primary Sources Sources: :
Following Following are are te te two two main main primary primary sources sources used used: :
11)) Annual Annual Reports Reports
22)) !nterviews !nterviews
Secondary Secondary Sources Sources: :
Secondary Secondary sources sources used used are are: :
11)) Study Study text text
22)) Articles Articles
33)) !nternet !nternet
b) b) Data Collection Tools Data Collection Tools: :
!nterviews, books, and websites are main tools wic ave been !nterviews, books, and websites are main tools wic ave been
described above under te eading of data collection sources. described above under te eading of data collection sources.
Data Processing Data Processing
Data Data Processing Processing: :
'e 'e evaluation evaluation process process will will primarily primarily involve involve te te use use of of ratio ratio
analysis analysis wic wic will will furter furter be be broken broken down down in in to to: :
) ) Craphical Craphical Analysis Analysis: : Use Use of of graps graps to to sow sow comparison comparison of of past past
wit wit current current data, data, wit wit competitors, competitors, using using financial financial statement statement
absolute absolute figures figures. .
22)) vertical vertical Analysis Analysis: : Eac Eac expense expense is is analyzed analyzed on on te te basis basis of of
turnover turnover in in respect respect of of income income statement statement wereas wereas balance balance seet seet
items items are are analyzed analyzed over over total total of of assets assets and and equities equities in in respect respect of of
any any individual individual asset asset or or equity equity. .
33)) Horizontal Horizontal Analysis Analysis: : 'o 'o analyze analyze trend trend of of components components of of financial financial
statements statements using using 2006 2006 as as base base year year. .
44)) Future Future Planning Planning: : !t !t will will broadly broadly include include te te company's company's future future
plans plans in in terms terms of of increasing increasing financial financial performance performance and and acieving acieving
financial financial goals goals. .
Data Analysis Data Analysis
Financial analysis views te financial or commercial wort of te Financial analysis views te financial or commercial wort of te
entity from te perspective of all stakeolders. !t elps to measure entity from te perspective of all stakeolders. !t elps to measure
te progress made by an enterprise troug analyzing te needs of te progress made by an enterprise troug analyzing te needs of
eac individual wo as a financial interest in te company. eac individual wo as a financial interest in te company.
'rends and performance can be represented pictorially in te form 'rends and performance can be represented pictorially in te form
of absolute figures wic provides us wit te opportunity to of absolute figures wic provides us wit te opportunity to
evaluate te growt and decline in businesses activities: evaluate te growt and decline in businesses activities:
8uities side of Balance Sheet of PHDL 8uities side of Balance Sheet of PHDL
Assets side of Balance Sheet of PHDL Assets side of Balance Sheet of PHDL
P S L of PHDL P S L of PHDL
Cash Flow Statement of PHDL Cash Flow Statement of PHDL
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PHDL %atio Analysis of PHDL
Note: (%upees '000) Note: (%upees '000)
Common Size Analysis PHDL Common Size Analysis PHDL
Horizontal Analysis Horizontal Analysis Equities side of Balance Seet Equities side of Balance Seet
Common Size Analysis PHDL Common Size Analysis PHDL
Horizontal Analysis Horizontal Analysis Assets side of Balance Seet Assets side of Balance Seet
Common Size Analysis PHDL Common Size Analysis PHDL
Horizontal Analysis Horizontal Analysis P S L Account P S L Account
vertical Analysis Analysis PHDL vertical Analysis Analysis PHDL
Equities side of Balance Seet Equities side of Balance Seet
vertical Analysis Analysis PHDL vertical Analysis Analysis PHDL
Assets side of Balance Seet Assets side of Balance Seet
Craphical Analysis Craphical Analysis
Sales S Services Sales S Services PHDL PHDL
Cost of Sales S Services Cost of Sales S Services PHDL PHDL
!DL
160,000
165,000
170,000
175,000
180,000
185,000
2008 2007 2006
Year
R
s
.

i
n

T
h
o
u
s
a
n
d
s
Cost of sales and services
!DL
-
100,000
200,000
300,000
400,000
500,000
600,000
2008 2007 2006
Year
R
s
.

i
n

T
h
o
u
s
a
n
d
s
Sales and services
Craphical Analysis Craphical Analysis
ross Profit ross Profit PHDL PHDL
Net Profit Nargin Net Profit Nargin PHDL PHDL
8uities side of Balance Sheet of PSL 8uities side of Balance Sheet of PSL
Assets side of Balance Sheet of PSL Assets side of Balance Sheet of PSL
P S L of PSL P S L of PSL
Cash Flow Statement of PSL Cash Flow Statement of PSL
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
%atio Analysis of PSL %atio Analysis of PSL
Note: (%upees '000) Note: (%upees '000)
Common Size Analysis PSL Common Size Analysis PSL
Horizontal Analysis Horizontal Analysis Equities side of Balance Seet Equities side of Balance Seet
Common Size Analysis PSL Common Size Analysis PSL
Horizontal Analysis Horizontal Analysis Assets side of Balance Seet Assets side of Balance Seet
Common Size Analysis PSL Common Size Analysis PSL
Horizontal Analysis Horizontal Analysis P S L P S L
vertical Analysis Analysis PSL vertical Analysis Analysis PSL
Equities side of Balance Seet Equities side of Balance Seet
vertical Analysis Analysis PSL vertical Analysis Analysis PSL
Assets side of Balance Seet Assets side of Balance Seet
vertical Analysis Analysis PSL vertical Analysis Analysis PSL
P S L Account P S L Account
Craphical Analysis Craphical Analysis
Sales S Services Sales S Services PSL PSL
Cost of Sales S Services Cost of Sales S Services PSL PSL
Craphical Analysis Craphical Analysis
ross Profit ross Profit PSL PSL
Net Profit Nargin Net Profit Nargin PSL PSL
ConcIusion/Findings ConcIusion/Findings
'e 'e objective objective of of tis tis report report was was to to analyze analyze te te current current financial financial position position of of
PHDL PHDL SS PSL PSL in in te te ligt ligt of of financial financial data data of of preceding preceding tree tree years years of of its its
performance performance. .
'e 'e analysis analysis concluded concluded: :
rapical rapical analysis analysis of of sales sales revenue, revenue, cost cost of of sales sales and and gross gross profit profit reflected reflected
sound sound financial financial position position of of PSL PSL as as compare compare to to PHDL PHDL. . But But if if we we see see tese tese
analysis analysis wit wit due due consideration consideration ten ten PHDL PHDL is is in in muc muc better better position position
because because its its current current gross gross profit profit is is about about S4 S4 of of sales sales wile wile tis tis ratio ratio of of
PSL PSL is is only only about about 34 34 . .
'e 'e liquidity liquidity situation situation of of te te PHDL PHDL as as been been tremendously tremendously improved improved over over its its
prior prior years, years, altoug altoug it it is is aa good good sign sign but but it it migt migt also also indicate indicate tat tat
PHDL PHDL is is not not using using its its current current resources resources adequately adequately to to generate generate profits profits as as
compared compared to to PSL PSL. .
PHDL PHDL as as sound sound financial financial position position indicating indicating tat tat it it as as aa good good credit credit rating, rating,
would would ave ave no no problems problems if if it it plans plans to to obtain obtain furter furter loan loan for for expansion expansion
but but even even for for tis tis lender lender would would first first need need to to assess assess te te norms norms of of industry industry
SS risks risks associated associated wit wit project project before before providing providing tem tem furter furter loan loan. .
ConcIusion/Findings ConcIusion/Findings
'e competitor was a market leader so its performance was obviously better 'e competitor was a market leader so its performance was obviously better
tan PHDL in almost all ways, but PHDL is making efforts to improve its tan PHDL in almost all ways, but PHDL is making efforts to improve its
existing performance, it ave not yet been able to come to te standard existing performance, it ave not yet been able to come to te standard
of PSL but wit te continuous efforts from management it will soon be of PSL but wit te continuous efforts from management it will soon be
able to raise its standards. able to raise its standards.
By interviewing few personnel in management, ! came to know PHDL is By interviewing few personnel in management, ! came to know PHDL is
making future plans for expansion by setting up a new otel project in making future plans for expansion by setting up a new otel project in
Laore city wic will contribute greatly to te financial growt of te Laore city wic will contribute greatly to te financial growt of te
company, owever tis plan as been deferred for some period. company, owever tis plan as been deferred for some period.
Pakistan is a beautiful country wit oliday resorts and otels like regent Pakistan is a beautiful country wit oliday resorts and otels like regent
plaza. 'roug better and improved facilities for marketing, te world plaza. 'roug better and improved facilities for marketing, te world
as come to know of tis fact. As a result, foreign tourism as been on a as come to know of tis fact. As a result, foreign tourism as been on a
rise causing te increase in te demand and consequently, te rise causing te increase in te demand and consequently, te
appreciation of Pakistani currency. !t is possible tat te appreciation of appreciation of Pakistani currency. !t is possible tat te appreciation of
currency would make otelling expensive and migt lead to a reduction currency would make otelling expensive and migt lead to a reduction
in te overall in te overall foreign demand of te otel industry in te future. foreign demand of te otel industry in te future.
Recommendations Recommendations
PHDL PHDL is is working working very very efficiently efficiently in in terms terms of of inventory inventory control, control, but but it it needs needs
to to give give attention attention to to improving improving its its credit credit control control system system or or revise revise te te
payment payment terms terms of of te te debtors debtors, , wereas wereas te te working working capital capital period period also also
need need to to be be improved improved. .
Altoug Altoug being being listed listed in in two two stock stock excanges excanges PHDL's PHDL's investment investment ratio ratio does does
not not promotes promotes te te investors investors to to invest, invest, if if it it wants wants to to expand expand it it sould sould provide provide
opportunities opportunities for for general general public public to to invest invest. . Hence, Hence, PHDL PHDL will will be be able able to to
obtain obtain furter furter finances finances for for expansion expansion from from te te sareolders sareolders instead instead of of te te
lending lending institutes institutes. .
%hank You %hank You