Fundamentals of accounting-1

Final project
 Submitted by:
 Ali Afraz Mehdi (2183007)
 Sanan Ahmad (2183043)
 Maliha Wajid (2181059)
 Shehryar Atiq (2183365)
Submitted To:
 Sir Athar Ikram Khan
Financial Analysis
Tandliawala Sugar Mills LTD.
Table Of Contents
Project Exercise
 Introduction Tandliawala
 Vision.
 Balance sheet
 Profit and loss statement.
 Income statement.
 Cash Flow Statement.

Ratio Analysis with Conclusion.

Introduction
a) Current Ratio g) Pretax profit Margin Ratio.
b) Quick Ratio. h) Return on assets Ratio.
c) Cash Ratio. i) Return on Equity Ratio.
d) Gross profit Margin Ratio. j) Debt Ratio.
e) Operating Profit Margin Ratios.
f) Net Profit Margin Ratio
CEO OF TANDLIAWALA SUGAR MILL LTD
MR HAROON KHAN.
INTRODUCTION OF TSML.
 Tandlianwala Sugar is a public limited company incorporated in
Pakistan on November 1, 1988 under the Companies Ordinance,
1984. Shares of the company are quoted on Karachi and Lahore
Stock Exchanges. The company is principally engaged in
production and sale of white crystalline sugar.

 Tandliawala Sugar Mill has 3 production units

 1st is in Faisalabad
 2nd is in Dera Ismail Khan
 3rd is in Muzaffargarh
TANDLIAWALA SUAGR MILL LIMITED

Information:
 Tandlianwala Sugar Mills Limited (PSX: TSML) is the
third largest sugar mill in Punjab province as well as the
country, after Jdw and Hamza Sugar Mills. The
company was incorporated in 1988 as a public limited.
The registered office of the company is located in
provincial capital, Lahore.
To produce sugar which is of highest international
standards.

To be amongst the most efficient and lowest cost of in the

industry.
The company commenced production activities of its 1st
Unit at Miran in Dera Ismail Khan during last week of September
2001
 BALANCE SHEET OF TANDLIAWALA SUAGR MILL
LIMITED.
PROFIT AND LOSS STATEMENT OF TANDLIAWALA SUGAR MILL
LIMITED .
INCOME STATEMENT OF TANDLIAWALA SUGAR MILL LIMITED .
CASH FLOW STATEMENT OF TANDLIAWALA SUGAR MILL LIMITED.
 RATIO ANALYSIS

DEFINITION:

Ratio analysis is the process of examining and

comparing financial information by calculating the
meaningful financial statement figure percentages
instead of comparing line item from each financial
statement.
WHY WE USE THE RATIO ANALYSIS OF ANY
COMPANY:

Ratio analysis is a useful management

tool that will improve our understanding
of financial results and trends over time,
and provide key indicators of
organizational performance.
1 CURRENT RATIO :

The current ratio measure the ability of company to cover

its liabilities with its current assets.

FORMULA:
Current ratio

Current Assets

Current Liabilities
 When we put the values of Current Assets
and Current liabalities values in formula
their result is this
Current
Year Assets Liabilities Ratio

2013 4,075,591,408.000 5,886,869,129.00 0.692

2014 6,542,750,557.000 9,029,243,377.00 0.725

2015 5,980,907,352.000 9,116,615,435.00 0.656

2016 4,927,451,914.000 7,509,686,582.00 0.656

2017 11,928,201,618.000 15,533,941,741.00 0.768

 Chart Title
0.78

0.76

0.74

0.72

0.7

0.68

0.66

0.64

0.62

0.6
2013 2014 2015 2016 2017
Explanation:

In 2013 we see that company is not doing well its

current ratio is .692 and as we see in case 2014
their current ratio is .725 is much better but 2015
and 2016 their current ratio is decrease again .656
and in 2017 current ratio increase due to increase in
assets.
2 QUICK RATIO :

Quick ratio mean how well a company can meet

their short term financial liabilities also knows as
acid test ratio.

FORMULA:
QUICK RATIO

Cash + short term investment+ Accts.

Rec.

Current Liabilities
When we put the values of Cash and Current
liabilities in formula we have the values

Cash + Short Term Invest+ Acc Quick

Year Rec Current Labilities Ratio

2013 798,592,921.000 5,886,869,129.00 0.136

2014 379,601,033.000 9,029,243,377.00 0.042

2015 389,459,765.000 9,116,615,435.00 0.043

2016 88,183,182.000 7,509,686,582.00 0.012

2017 707,879,969.000 15,533,941,741.00 0.046

 Chart Title
0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2013 2014 2015 2016 2017
Explanation:

In 2013 the quick ratio is not good

but in 2014 there is gradually
decrease as compare to 2013 but in
2016 their value is .012 in last year
2017 its value is .046
3 CASH RATIO :

The cash ratio is the indicator of of a company’s

liquidity that further refine both the current ratio
and the quick ratio by measuring the cash ,cash
equivalent or invested funds these are in current
assets to cover the current liabilities .

FORMULA : Cash Ratio

Cash + Cash Equilent + Invested Funds

Current Liabilities
When we put the values in cash ratio the
result is this from 2013 to 2017.

Year Cash + Cash Equilent + Invested Funds Current liabilities Cash Ratio

2013 765,360,058.00 5,886,869,129.00 0.130

2014 349,344,281.00 9,029,243,377.00 0.039

2015 155,532,534.00 916,615,435.00 0.170

2016 66,936,567.00 7,509,686,582.00 0.009

2017 687,766,245.00 15,533,941,741.00 0.044

 Chart Title
0.18

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2013 2014 2015 2016 2017
4 GROSS PROFIT MARGIN:

Gross profit is the profitability ratio measures

how much of every dollar is left over after
paying the cost of good sold.

FORMULA:
Gross Profit Margin

Gross Profit

Net Sales
When we put the values in profit margin
the result is this from 2013 to 2017.
Gross
Gross Profit Profit
Year Net Sales Margin

2013 859,581,048.00 12,294,795,993.00 7%

2014 1,425,271,236.00 12,999,788,942.00 11%

2015 2,219,112,980.00 16,520,294,399.00 13%

2016 2,416,920,213.00 18,675,054,125.00 13%

2017 2,134,369,472.00 13,903,985,479.00 15%

16%

14%

12%

10%

8%

6%

4%

2%

0%
2013 2014 2015 2016 2017
EXPLANATION:

As we see that gross profit margin in

2013 is 7% and increase year wise in
2015 and 2016 profit margin remain
same as 13% but in 2017 profit margin
increase 2 % and it will reached at 15%.
5 Operating profit margin :
Operating profit is
the profitability ratio that measure how
much of dollar of revenue is left over after
both cost of good sold and operating
expenses are considered.

FORMULA:
Operating Profit Margin

Operating Profit

Net Sales
When we put the values in formula the
result is from 2013 to 2017

Operating Profit Operating

Year Net Sales Profit

2013 358,424,005.00 12,294,795,993.00 3%

2014 986,055,088.00 12,999,788,942.00 8%

2015 1,635,963,166.00 16,520,294,399.00 10%

2016 1,843,418,847.00 18,675,054,125.00 10%

2017 1,378,514,965.00 13,903,985,479.00 10%

 Operating profit
12%

10%

8%

6%

4%

2%

0%
2013 2014 2015 2016 2017
EXPLANATION:

As we see after putting the values in formula

there is 3%increase in operating profit and it
will increase from 3% to 10 % in 2013 to
2017.
6 PRETAX PROFIT MARGIN:

The pretax profit margin is the ratio of a

company's pre-tax earnings to its total sales.
The higher the pretax profit margin, the
more profitable the company.

FORMULA:
Pretax Profit Margin

Pretax profit

Net Sales
After putting the values in formula the
result is

Pretax Profit Pretax Profit

Year Net Sales Margin

2013 (2,844,908,813.00) 12,294,795,993.00 -23%

2014 81,196,772.00 12,999,788,942.00 1%

2015 583,793,518.00 16,520,294,399.00 4%

2016 933,636,407.00 18,675,054,125.00 5%

2017 461,125,962.00 13,903,985,479.00 3%

 Pretax profit
10%

5%

0%
2013 2014 2015 2016 2017

-5%

-10%

-15%

-20%

-25%
EXPLANATION:

As we see that in 2013 pretax profit is

negative but in next year mean 2014 it
will increase and profit will increase
from negative to positive and it will
increase from 2014 to 2016 as a percent
from 1 to 5 but in 2017 it will decrease 2
%.
7 NET PROFIT MARGIN:

Net profit margin, or net margin, is equal to

net income or profits divided by total
revenue, and represents how much profit
each dollar of sales generates. Net profit
margin is the ratio of net profits or net
income to revenues for a company,
business segment or product.
FORMULA:

Net Profit Margin

Net Income

Net Sales
PUTTING THE VALUESOF 213 TO 2017 IN
FORMULA RESULT WILL BE THIS

Net Income
Net Profit
Year Net Sales Margin

2013(382,719,050.00) 12,294,795,993.00 -3%

2014251,661,268.00 12,999,788,942.00 2%

2015596,419,542.00 16,520,294,399.00 4%

2016890,324,352.00 18,675,054,125.00 5%

2107450,184,811.00 13,903,985,479.00 3%
 NET PROFIT
6%

5%

4%

3%

2%

1%

0%
2013 2014 2015 2016 2017
-1%

-2%

-3%

-4%
EXPLANATION:

We see that in 2013 net profit is negative

3% but it will increase from negative to
positive from -3% to 2 % in 2014 and
increase in next 2 year but 2017 it will
decrease 2 %.
8 RETURN ON ASSETS:

Return on assets measures the amount

of profit the company generates as a
percentage of the value of its total assets.

FORMULA:
Return on Assets

Net income

Average Total Assets

PUTTING THE VALUES OF LAST 5 YEAR
IN FORMULA RESULT WILL BE

Net income Return on

Year Average Total Assets Assets

2013 (382,719,050.00) 64,787,275,845.50 -1%

2014 251,661,268.00 14,192,867,699.50 2%

2015 596,419,542.00 16,765,189,787.50 4%

2016 890,324,352.00 93,307,736,517.00 1%

2017 450,184,811.00 21,025,835,262.50 2%

 RETURN ON ASSETS
5%

4%

3%

2%

1%

0%
2013 14 2015 2016 2017

-1%

-2%
EXPLANATION:

We see that in 2013 the return on

assets will be negative 1% but it
will be positive in 2014 and
increase 2 % in 2015 but in 2016 it
will decrease 3% and in 2017 it will
increase 1% before previous year
9 RETURN ON EQUITY :

Return on equity (ROE) is a measure of

profitability that calculates how many dollars
of profit a company generates with each
dollar of shareholders' equity.

FORMULA:
Return on Equity

Net Income

Average Share Holder

 PUTTING THE VALUES OF 2013 TO 2017
IN FORMULA RESULT WILL BE

Net Income Return on

Year Average Shareholder Equity Equity

2013 (382,719,050.00) 1,177,063,000.00 -33%

2014 251,661,268.00 1,177,063,000.00 21%

2015 596,419,542.00 1,177,063,000.00 51%

2016 890,324,352.00 1,177,063,000.00 76%

2017 450,184,811.00 1,177,063,000.00 38%

 RETURN ON EQUITY
100%

80%

60%

40%

20%

0%
2013 2014 2015 2016 2017

-20%

-40%
EXPLANATION:

we see that in 2013 return on equity

is negative but in next year it will
increase from negative to positive
and consistence increase from 2014
to 2016 but in 2017 it will decrease
10 DEBT RATIO:

The debt ratio is a financial ratio that

measures the extent of a company’s
leverage. The debt ratio is defined as the
ratio of total debt to total assets, expressed
as a decimal or percentage.

FORMULA: Debt Ratio

Total Liabilities

Total Assets
 PUTTING THE VALUES OF 2013 TO 2017
IN FPORMULA RESULT WILL BE

Year Total Liabilities Total Assets Debit Ratio

20138,503,012,369.00 11,896,546,958.00 71%

201413,079,359,622.00 16,489,188,441.00 79%

201512,164,783,239.00 17,041,191,134.00 71%

201610,473,741,319.00 16,203,561,700.00 65%

201719,668,103,633.00 25,848,108,825.00 76%

 DEBT RATIO
90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
2013 2014 2015 2016 2017
EXPLANATION:

We see that in 2013 the debt ratio is

71% and in 2014 it will increase
from 71% to 79% but it will
decrease in 2015 and 2016 but in
2017 it will increase 10%.
11 DEBT EQUITY RATIO:

He debt-to-equity ratio is a measure of the

relationship between the capital contributed
by creditors and the capital contributed by
shareholders. It also shows the extent to
which shareholders' equity can fulfill a
company's obligations to creditors in the
event of a liquidation.
FORMULA:

Debt Equity Ratio

Total Liabilities

Shareholder's Equity
PUTTING THE VALUES IN FORMULA
RESULT WILL BE THIS

Total Liabilities Debt Equity

Year Shareholder's Equity Ratio

2013 8,503,012,369.00 1,177,063,000.00 722.39%

2014 13,079,359,622.00 1,177,063,000.00 1111%

2015 12,164,783,239.00 1,177,063,000.00 1033%

2016 10,473,741,319.00 1,177,063,000.00 890%

2017 19,668,103,633.00 1,177,063,000.00 1671%

 DEBT EQUITY RATIO
1800.00%

1600.00%

1400.00%

1200.00%

1000.00%

800.00%

600.00%

400.00%

200.00%

0.00%
2013 2014 2015 2016 2017
EXPLANATION:

The debt equity ratio is 722 % in

2013 but it will increase in next 2
year but in 2016 it will decrease and
in 2017 it will increase from 890%
to 1671%.
12 CAPITALIZATION RATIO:

The capitalization ratio, often called the Cap

ratio, is a financial metric that measures a
company’s solvency by calculating the total
debt component of the company’s capital
structure of the balance sheet. In other
words, it calculates the financial leverage of
the company by comparing the total debt
with total equity or a section of equity.
FORMULA:

Capitalization Ratio

Long Term Debts

Long Term Debts+ Share Holder Equity

PUTTING THE VALUES OF 2013 TO 2017
IN FORMULA WE HAVE THE VALUE

Long Term Debts+ Share Holder Capitalizati

Long term Debts
Equity on Ratio
Year

2013 2,616,143,240.00 3,816,143,240.00 69%

2014 4,050,116,245.00 5,250,116,245.00 77%

2015 3,048,167,804.00 4,248,167,804.00 72%

2016 2,964,054,737.00 4,164,054,737.00 71%

2017 4,134,161,892.00 5,334,161,892.00 78%

 CHAPITALIZATION RATIO
80%

78%

76%

74%

72%

70%

68%

66%

64%
2013 2014 2015 2016 2017
EXPLANATION:

We see that in 2013 the ratio is

69% but it will increase in 2014
but in 2015 it will decrease 5%
and also decrease 1% in 2016
but it will increase 7 % in 2017
13 INTEREST COVERAGE RATIO:
The interest coverage ratio (ICR) is a measure
of a company's ability to meet its interest
payments. Interest coverage ratio is equal to
earnings before interest and taxes (EBIT) for
a time period, often one year, divided by
interest expenses for the same time period.
The interest coverage ratio is a measure of
the number of times a company could make
the interest payments on its debt with its
EBIT. It determines how easily a company can
pay interest expenses on outstanding debt.
FORMULA:

Interest Coverage Ratio

Earning Before Interest and Taxis (EBIT)

Interest Expense
PUTTING THE VALUES OF 2013 TO 2017
IN FORMULA THE RESULT WILL BE

Interest
Earning Before Interest and Taxis (EBIT) Interest Expense Coverage
Year Ratio

2013 358,424,005.00 (642,832,818.00) -0.558

2014 986,055,088.00 (900,584,802.00) -1.095

2015 1,635,963,166.00 (1,021,443,673.00) -1.602

20161,843,418,847.00 (860,743,682.00) -2.142

2017 1,378,514,965.00 (888,312,066.00) -1.552

 INTREST COVERAGE
0
2013 2014 2015 2016 2017

-0.5

-1

-1.5

-2

-2.5
EXPLANATION:
In 2013 to 2016 it will
increase in negative value
but in 2017 it will decrease 1
%.
14 FIXED ASSETS TURNOVER:

The fixed asset turnover ratio is an efficiency

ratio that measures a companies return on
their investment in property, plant, and
equipment by comparing net sales with fixed
assets. In other words, it calculates how
efficiently a company is a producing sales
with its machines and equipment.
FORMULA:

Fixed Assets Turn Over

Revenue

Property, Plant & Equipment (PPE)

PUTTING THE VALUES OF 2013 TO 2017
IN FOMULA RESULT WILL BE

Fixed
Property, Plant & Equipment
Revenue Assets Turn
(PPE)
Year Over

201312,294,795,993.00 7,755,012,318.00 1.585

2014 12,999,788,942.00 9,835,688,601.00 1.322

2015 16,520,294,399.00 10,954,043,101.00 1.508

2016 18,675,054,125.00 11,247,190,642.00 1.660

2017 13,903,985,479.00 13,795,834,019.00 1.008

 Chart Title
1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2013 2014 2015 2016 2017
EXPLANATION:

We see that in 2013 it will

1.585 in 2014 it will decrease .2
but in 2015 to 2016 it will
increase
but in 2017 it will decrease the
value of fixed assets turn over .
15 OPERATING CASH FLOW :

Operating Cash Flow (OCF) is the amount of cash

generated by the regular operating activities of a
business in a specific time period. OCF begins
with net income (form the bottom of the income
statement), adds back any non-cash items, and
adjusts for changes in net working capital to arrive
at the total cash generated or consumed in the
period. When performing financial analysis,
operating cash flow should be used in conjunction
with net income, Free Cash Flow (FCF), and other
metrics to properly assess a company’s performance
FORMULA:

Operating Cash Flow

Operating Cash Flow

Net Sales (Revenue)

PUTTING THE VALUES OF 2013 TO 2017
IN FORMULA RESULT WILL BE

Operating
Year Operating Cash Flow Net Sales (Revenue) Cash Flow

2013 1,403,266,391.00 12,294,795,993.00 11%

2014 (2,046,250,876.00) 12,999,788,942.00 -16%

2015 1,028,735,241.00 16,520,294,399.00 6%

2016 2,305,377,954.00 18,675,054,125.00 12%

2017 (3,545,631,521.00) 13,903,985,479.00 -26%

 OPERATING CASH FLOW
15%

10%

5%

0%
2013 2014 2015 2016 2017

-5%

-10%

-15%

-20%

-25%

-30%
EXPLANATION:

In 2013 its value is 11% but it will decrease

in 2014 but it will increase from negative to
positive in 2015 to 2016 and in 2017 its value
is decrease from 12% to -26%.
 SUMMARY

The summary of Tandliawala Sugar Mills

Limited in 2013 to 2017 is that their
current ratio is 0.692 to 0.768 . It means that
liquidity is in good position. Profitability
indication in 2013 to 2017 is also increasing
from year to year, which shows the
excellence of company. The company debt
ratio is also increasing by the year which is
not good for the company
 CONCLUSION

The financial ratio of Tandliawala sugar mill

limited, through the ratio analysis it is
concluded that their financial position is good
from 2013 to 2017 . In our opinion if they
control their debt ratio because their debt
ratio is not good we can invest in the
company. For investing 1 million in this
company, our personal opinion is that anyone
investing should thoroughly analysis every
aspect of the company and then invest.