Hassan Mehmood

DEBT TO EQUITY RATIO

SHELL PSO

5.34
6.00
5.00

3.16
4.00

2.83

2.82

2.81
2.74
3.00
2.00
1.00
0.00
2015 2016 2017

5.34
3.16
10.00

2.83

2.82
2.81
2.74
SHELL 3.16 2.74 2.82
PSO 5.34 2.83 2.81
0.00
2015 2016 2017

Debt to equity ratio of PSO was very high in 2015 having 5.34 whereas Shell was at 3.16. by the passage of
time, PSO lowered their D/E Ratio and closed on almost same ratio as of Shell. High D/E means the
company is relying more on debt rather than equity.
 INTEREST COVERAGE RATIO
SHELL PSO
30.00

25.30
25.00

20.00

15.83
15.00

10.00
6.89

5.85
3.19
5.00 2.06

0.00
2015 2016 2017
SHELL 6.89 25.30 15.83
PSO 2.06 3.19 5.85

PSO’s Interest Ratio Coverage is increasing year by year with a smooth increase, however Shell’s ICR is fluctuating very
much which is creating a risky situation for the shareholders as there is a swift increase and then decrease in following
3 years.
 PSO Vertical Analysis Shell Vertical Analysis
2017
2017
(Rupees '000) % Net Sales
(Rupees '000) % Net Sales
NET SALES 205,791,893 100.000%
Net Sales 878,146,786 100.000%

Cost of products sold (840,948,073) 95.764% Other Revenue 965,737 0.469%

Gross profit 37,198,713 4.236% 206,757,630

Other income 10,744,932 1.224% Sales Tax (37,909,193) 18.421%

Operating costs
Net Revenue 168,848,437 82.048%
Distribution and marketing expenses (8,822,106) 1.005% Cost of sales (153,972,023) 74.819%
Gross Profit 14,876,414 7.229%
Administrative expenses (2,478,797) 0.282%
Distribution and marketing expenses (6,018,105) 2.924%
Other operating expenses (1,980,999) 0.226%
Administrative expenses (4,146,166) 2.015%
(13,281,902) 1.512%

Profit from operations 34,661,743 3.947% other operating expenses (1,411,469) 0.686%

Finance costs (5,923,256) 0.675% Other operating Income 419,559 0.204%

Operating Profit 3,720,233 1.808%
28,738,487 3.273%
Finance Cost (235,049) 0.114%
Share of profit of associates 608,380 0.069% Profit before taxation 3,485,184 1.694%
Profit before taxation 29,346,867 3.342%
Share of associate 837,776 0.407%
Taxation (11,121,242) 1.266%
Taxation (1,140,258) 0.554%
Profit after tax 18,225,625 2.075%
Accrual Loss/Gain on post- employment benefits (348,993) 0.170%
(Loss)/ Profit after taxation 2,833,709 1.377%
 PSO PROFIT AND LOSS ACCOUNT Horizontal Analysis (Base 2015)
2015 2016 2017

Net Sales 100% -25.75% -3.83%

Cost of products sold 100% -26.32% -5.46%
Gross profit 100% -4.47% 57.76%
Other income 100% -8.74% -23.38%

Operating costs
Distribution and marketing expenses 100% -10.31% -2.18%
Administrative expenses 100% 0.91% 3.25%
Other operating expenses 100% -43.46% -43.61%
100% -16.31% -11.05%
Profit from operations 100% 0.69% 52.89%
Finance costs 100% -35.10% -46.23%
100% 34.51% 146.59%
Share of profit of associates 100% 61.46% 60.37%
Profit before taxation 100% 35.36% 143.87%
Taxation 100% 18.02% 118.18%
Profit after tax 100% 48.11% 162.75%

OTHER INFORMATION
Net Profits 100% 48.11% 162.75%
Weighted average number of ordinary shares 100% -99.00% -99.00%
Market value per share- year end 100% -2.68% 0.40%
Dividend per share 100% 25.00% 150.00%
SHELL PAKISTAN LTD- PROFIT
AND LOSS ACCOUNT Horizontal Analysis (Base 2015)
2015 2015 2016 2017
(Rupees '000)
NET SALES 248,570,957 100% (0.14) (0.17)
Other Revenue 824,840 100% 0.27 0.17
249,395,797 100% (0.13) (0.17)

Sales Tax (52,267,446) 100% (0.08) (0.27)

Net Revenue 197,128,351 100% (0.15) (0.14)

Cost of sales (186,533,476) 100% (0.18) (0.17)

Gross Profit 10,594,875 100% 0.32 0.40
Distribution and marketing expenses (4,965,781) 100% 0.10 0.21
Administrative expenses (2,995,215) 100% 0.20 0.38

other operating expenses (998,218) 100% (0.41) 0.41

Other operating Income 424,349 100% 0.81 (0.01)

Operating Profit 2,060,010 100% 1.50 0.81

Finance Cost (299,146) 100% (0.32) (0.21)

Profit before taxation 1,760,864 100% 1.81 0.98

Share of associate 583,961 100% 0.29 0.43
Taxation (1,433,855) 100% (1.74) (0.20)
Accrual Loss/Gain on post- employment benefits - 0% 76.24% 348.99%
(Loss)/ Profit after taxation 910,970 100% 651% 211%
Basic earnings/loss per share 8.51 100% 436% 122%