Final Report on Attock- Ibf
-
Upload
sanam-aamir -
Category
Documents
-
view
222 -
download
0
Transcript of Final Report on Attock- Ibf
-
8/3/2019 Final Report on Attock- Ibf
1/25
Muhammad Ali JinnahMuhammad Ali Jinnah
UniversityUniversity
Report On Attock PetroleumReportOn Attock Petroleum
LimitedLimited
Prepared by Faraz SaleemPrepared by Faraz Saleem
(Fa09-Mb-0033)(Fa09-Mb-0033)
Submitted toSubmitted to
Sir Umair BaigSir Umair Baig
-
8/3/2019 Final Report on Attock- Ibf
2/25
TABLE OF CONTENT
1. COMPANY PROFILE
2. BALANCE SHEET
3. INCOME STATEMENT
4. FINANCIAL RATIOS & GRAPH
5. INTERPRETATION
6. COMMON SIZE INCOME STATEMENT
7. COMMON SIZE BALANCE SHEET
8. IGR
9. SGR
10. PROFORMA INCOME STATEMENT
11. CONCLUSION
12. RECOMMNDATIONS
-
8/3/2019 Final Report on Attock- Ibf
3/25
COMPANY PROFILE
Attock Petroleum Limited (APL) is the 4th Oil Marketing Company in Pakistan to be
granted a marketing license in February 1998. Though a new entrant in the field of oil
marketing, APL has managed to establish its presence and reputation as a progressive
and dynamic organization focusing on providing quality and environment friendly
petroleum products and services in Pakistan and abroad. Its steady and substantially
growing market share and customer confidence, which it enjoys, are manifestations of
APL's successful policies.
APL is part of the first fully integrated Oil Company of the sub-continent, APLs
sponsors include Pharaon Commercial Investment Group Limited (PCIGL) and Attock
Group of Companies.
Pharaon Group is engaged internationally in diversified entrepreneurial activities,
including Hotels, Oil Exploration, Production and Refining, Manufacturing of
Petroleum Products, Chemicals, Manufacturing and Trading of Cement, Real Estate
etc.
The Attock Group of companies consist of The Attock Oil Company Limited (AOC),
Pakistan Oilfields Limited (POL), Attock Refinery Limited (ARL), Attock Petroleum
Limited (APL), Attock Information Technology Services (Pvt) Limited (AITSL), Attock
Cement Pakistan Limited (ACPL) etc. AOC was incorporated with limited liability in
England on December 01, 1913. The company is principally engaged in exploration,
drilling and production of petroleum and related activities in Pakistan. AOC is the
pioneer in the oil sector in Pakistan. Its first oil discovery in Pakistan was made in
Khaur district Attock in 1915. The refining operations were started in 1922 at Morgah
near Rawalpindi. (For other group companies information please visit Group Profile)
-
8/3/2019 Final Report on Attock- Ibf
4/25
Liquidity Ratios
Liquidity ratios measure the availability of cash to pay debt.It have two subtypes current
ratio and quick ratio. The current ratio is an indication of a firm's market liquidity and
ability to meet creditor's demands. Acceptable current ratios vary from industry to
industry.Attock Petrolium showing potive trent in Current ration because it is rises from1.41 Fy08 to 1.50 FY 09 due to rise in current asset from 13881634000 to 16406083000
which is very benificial for any organisation.However if current ratio rises to high it
mean company is not utilizing their assest in best way.
While Generally, the acid test ratio should be 1:1 or better, however this varies widely by
industry. In general, the higher the ratio, the greater the company's liquidity (i.e., the
better able to meet current obligations using liquid assets). Therefore atoock petroliumQuick Ratio also increasing which is making the company repotation stronger and
stronger.
Positive working capital means that the company is able to pay off its short-termliabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory). Similarly APLIncreasing from previous year it means company can work after paying their liabilities.
WORKING CAPITAL
Total Asset Total liabilities
2008 2009
15513336-9977487 18270355-11188087
5535849 7082268
0
1000000
2000000
3000000
4000000
5000000
6000000
70000008000000
2008 2009
Workin capital
http://en.wikipedia.org/wiki/Market_liquidityhttp://en.wikipedia.org/wiki/Market_liquidity -
8/3/2019 Final Report on Attock- Ibf
5/25
CURRENT RATIO
Current Assets
Current Liabilities
ACID-TEST/ QUICK/ LIQUID RATIOACID-TEST/ QUICK/ LIQUID RATIO
.
.
Quick Assets
Current Liabilities
2008 2009
13881634
9842350
16406083
10936549
1.41 1.50
2008 2009
13484019
9842350
162326287
10936549
1.37 1.48
1.4
1.42
1.44
1.46
1.48
1.5
2009 2008
C.R
1.3
1.35
1.4
1.45
1.5
2009 2008
Q.R
-
8/3/2019 Final Report on Attock- Ibf
6/25
PROFITABILITY RATIO
Profitability ratios measure the firm's use of its assets and control of its expenses to
generate an acceptable rate of return.Similarly ATP little bit increses in GP but due to its
same COGS rate which is almost 94% of its sale, although sales increses by 16% fromprevious year but it cannot imposed its much effect on GP due to high rate of COGS.
Operating profit ratio decrease from 0.061 to 0.058 due to high rate of operating expensein 2009, which is 0.81% higher than that of 0.69% in 2008.however due to high other
income which include commission and interest net profit ratio rises from 0.0496 to 0.498
GROSS PROFIT MARGIN
Gross Profit
Total Net Sales
2008 2009
2748401
53242330
3292350
61863152
0.051 0.053
0.05
0.0505
0.051
0.0515
0.052
0.0525
0.053
2009 2008
Gross Profit
Margin
-
8/3/2019 Final Report on Attock- Ibf
7/25
Operating Profit Margin
Operating income
Net sales
Net Profit MarginNet income
Net Sales
Return on Asset
2008 2009
3272090
53242330
3630256
61863152
0.061 0.058
2008 2009
2641552
53242330
3082419
61863152
0.496 0.0498
0.056
0.057
0.058
0.059
0.06
0.061
2009 2008
Operating Profit
Margin
0
0.1
0.2
0.3
0.4
0.5
2009 2008
NET PROFIT
MARGIN
-
8/3/2019 Final Report on Attock- Ibf
8/25
Net Income
Total Asset
2008 2009
264155215513336
308241918270355
0.170 0.168
Return on Equity
Net income
Total SHE
2008 2009
2641552
5535849
3082419
7082268
0.0477 0.435
0.1
0.11
0.12
0.13
0.14
0.15
0.16
0.17
2008 20009
Return on asset
0.41
0.42
0.43
0.44
0.45
0.46
0.47
0.48
2008 2009
Return on Equity
-
8/3/2019 Final Report on Attock- Ibf
9/25
EARNING PER SHARE
Net income
No of share
ACTIVITY RATIO
An indicator of how rapidly a firmconverts various accounts into cash orsales. In general, the sooner management can convert assets intosales or cash, the more effectively the firmis being run. Analysis of each rationis following:
A/P turnover times means how many times a firm paid their liabilities in a year this ratiomay differ from industry to industry but generally stockholders attracts towards the organizationwho paid their liabilities quickly in the same way ATC A\P turn over slightly moved downwardfrom 54 to 63.
Asset turnover measures a firm's efficiency at using its assets in generating sales orrevenue - the higher the number the better the performance of company.. But here you can seethat asset turnover is decreasing from 3.43 to 3.38 which is somewhat bit lower than previousyear.
By maintaining accounts receivable, firms are indirectly extending interest-free loans totheir clients. A high ratio implies either that a company operates on a cash basis or that itsextension of credit and collection of accounts receivable is efficient. A low ratio implies the
company should re-assess its credit policies in order to ensure the timely collection of impartedcredit that is not earning interest for the firm .APL improving in account receivable because in2008 its collected asset days are 49 which become 45 in 2010.
Inventory ratio showing how many times a company's inventory is sold and replaced
over a period. This ratio should be compared against industry averages. A low turnover
implies poor sales and, therefore, excess inventory. A high ratio implies either strong
sales or ineffective buying likewise APL showing very high ration of inventory almost
20082009
2641552
57600
3082419
57604
45.8653.51
42
44
46
48
50
52
54
2008 2009
EPS
-
8/3/2019 Final Report on Attock- Ibf
10/25
double of previous year if we kept eye on inventory turnover days then we know that in
almost every 1 and half day the inventory is updating because of high ratio of sales.
A/P TURNOVER TIMES
Net Purchases
Average A-P
20082009
50451319_____
(5296183+9813929/2)
58413217____
(10728556+9813929/2)
6.675.68
ACCOUNT PAYABLE TURNOVER DAYS
360A-P turnover times
20082009
360
6.67
360
5.68
54 63
TOTAL ASSET TURNOVER
Net Sale
Total. Asset
5
5.5
6
6.5
7
2009 2008
A/P turnover
times
48
50
52
54
56
58
60
6264
2008 2009
Accout Py
days
-
8/3/2019 Final Report on Attock- Ibf
11/25
2008 2009
53242330
15513336
61863152
18270355
3.43 3.38
ACCOUNT RECEIVABLE TURNOVER TIMES
Net Cr Sale
Average A/R
2008 2009
53242330____
(6721529+878498/2)
61863152_____
(8592508+6721529/2)
7.43 8.07
3.34
3.36
3.38
3.4
3.42
3.44
2009 2008
Total asse t turnover
7
7.2
7.4
7.6
7.8
8
8.2
2009 2008
A/R Turnover
-
8/3/2019 Final Report on Attock- Ibf
12/25
ACCOUNT RECEIVABLE DAYS
360
A/R Times
2008 2009
360
7.43
360
8.07
49 45
43
44
45
46
47
48
49
2008 2009
A/R Days
INVENTORY TURNOVER TIMES
COGS ____
Average Inventory
2008 2009
50493929___
(341702+299092/2)
58570802____
(141507+299092/2)
157 265
0
50
100
150
200
250
300
2009 2008
Inventory
turnover times
-
8/3/2019 Final Report on Attock- Ibf
13/25
INV TURNOVER DAYS
360
INV Times
2008 2009
360
157
360
265
2.32 1.35
AVERAGE DAYS OF OPERATING CYCLE.
A/R Days +Inv Days
2008 2009
2.32+49 1.35+45
51.32 46.35
0
0.5
1
1.5
2
2.5
2008 2009
INV Turover
Days
0
50
100
150
200
250
300
350
2008 2009
Average Daysof
operatin Cycle
-
8/3/2019 Final Report on Attock- Ibf
14/25
LONG TERM DEBT PAYING ABILITY
Ratio that indicates what proportion of debt a company has relative to its assets. The measuregives an idea to the leverage of the company along with the potential risks the company faces interms of its debt-load. A debt ratio of greater than 1 indicates that a company has more debt thanassets, meanwhile, a debt ratio of less than 1 indicates that a company has more assets than
debt. Used in conjunction with other measures of financial health, the debt ratio can helpinvestors determine a company's level of risk. Debt ratio of APL showing that it has more assetsthan its liabilities, which is good sign for company. A measure of a company's financial leveragecalculated by dividing its total liabilities by stockholders' equity. It indicates what proportion ofequity and debt the company is using to finance its assets. A high debt/equity ratio generallymeans that a company has been aggressive in financing its growth with debt. This can result involatile earnings as a result of the additional interest expense. However APL debt to companyration showing that debt is almost 57% more than its liabilities but lower than previous year, whichindicating that equity is gradually increased in contrast with their liabilities in current year
DEBT RATIO
Total Liabilities
Total Asset
20082009
9977487
15513336
11188087
7082268
0.64 0.61
0.59
0.6
0.61
0.62
0.63
0.64
2009 2008
Debt ratio
-
8/3/2019 Final Report on Attock- Ibf
15/25
DEBT TO EQUITY
Total Debt
Total Equity
2008 2009
9977487
5535849
11188087
7082268
1.801.57
DIVIDEND PER SHARE.DIVIDEND PER SHARE.
Dividends
No. Of Shares
20082009
960000
48000
1440000
57600
20 25
1.4
1.5
1.6
1.7
1.8
2009 2008
Debt to equity
0
5
10
15
20
25
2008 2009
Divident per
share
-
8/3/2019 Final Report on Attock- Ibf
16/25
SUMMARY OF RATIOS
Liquidity2009 2008
Working capital7082268 5535849
CURRENT RATIO1.50 1.41
QUICK RATIO1.48 1.37
Profitability2009 2008
Gross Profit Margin0.053 0.051
Operating Profit
Margin 0.058 0.061
Net Profit Margin0.0498 0.0496
Return on Asset0.168 0.170
Return on Equity0.435 0.477
Earning Per Share53.51 45.86
A/P turnover times 5.68 6.67
A/P turnover days63 dys 54
Total asset turnover3.38 3.43
-
8/3/2019 Final Report on Attock- Ibf
17/25
A/R Turnover times8.07 7.43
A/R Days45 49
Inventory Turnover
times265 157
Inv turnover Days 1.35 2.27
Avg Day of operating
cycle.46.35 51.27
Debt ratio0.61 0.64
Debt to equity1.57 1.80
Dividend per share25 20
-
8/3/2019 Final Report on Attock- Ibf
18/25
COMMON SIZE
INCOME STATEMENT
2009 % 2008 %
Sales 61863152 100 53242330 100
Cost of sales (58570802) 94.7 (50493929) 94.8
Gross profit 3292353 5.3 2748104 5.2
Other operating Income 843967 1.4 896359 1.7
Operating Expense (506061) 8.0 (372670) 0.7
Operating Profit 3630256 5.9 3272090 6.1
Income on bank Deposits and
Investment848852 1.4 381910 0.7
Share of Profit of Associated
Companies26510 0.042 58918 0.1
Workers Profit ParticipationFund
(225199) 0.4 (183366) 0.3
PROFIT BEFORE TAXATION 4280419 6.9 3529552 6.6
Provision for taxation (1198000) 1.9 (888000) 1.7
PROFIT FOR THE YEAR 3082419 5.0 2641552 5.0
-
8/3/2019 Final Report on Attock- Ibf
19/25
COMMON SIZE
BALANCE SHEET
SHARE CAPITAL AND RESERVES 2009 2008
Issue subscribed and paid up capital 3.1% 3.09%
Reserves
Special reserve
Revenue reserve
Inappropriate profit
38.76%35.68%
NON-CURRENT LIABILITIES
Long-term deposit
Deferred income tax
Liability
1.37%
0.87%
CURRENT-LIABILITIES
Trade and Other Payables
Provision for income tax
58.85%
63.44%
TOTAL LIABILITIES 100% 100%
0.18%
35%
0.34%
32.24%
0.87%
0.50%
0.78%
0.09%
57.72%
1.13%
63.26%
0.18%
-
8/3/2019 Final Report on Attock- Ibf
20/25
& EQUITIES
2009 2008
PROPERTY, PLANT
AND EQUIPMENT
LONG TERM INVESTMENTIN ASSOCIATED COMPANIES
10.11% 10.51%
CURRENT ASSETS
Stores and spares
Stock in trade
Trade debts
Advances, deposits prepayment
And other receivable.
Short term Investments
6.1% 5.94%
4.01% 4.57%
0.015% 0.033%
0.77% 1.92%
42.88% 37.55%
5.42% 8.40%
- 2.12%
-
8/3/2019 Final Report on Attock- Ibf
21/25
Cash and bank balances
89.68%
89.44%
INTERPRETATION:
Common size Income statement defines the percentage of each item with respect to
Net Sales so that we can easily analysis that which item % is increasing or
decreasing.
If we kept eye on APL common size Income statement then we know that cost of
good sold declined from 94.8 to 94.7 which helped to higher the rate of gross profit
but due to high ratio of expense compare to previous year operating profit declined
from 6.1 % to 5.9.However due to other income net profit margin moves little bit
high.
On other hand common size balance sheet shows the percentage of each item with
respect to total assets, like APL Share equity has been rose from 35% to 38%, it
means that firm has the total share holder equity of 38 % of its total asset. While
APL had 63% current liabilities of total asset in 2008, which decreases to 58 % in,2009, which is somewhat, better for any company to lower down its liabilities.
Moreover APL Non current asset percentage slightly moved downward from
10.51% to 10.11% while little bit increases in current ratio from previous year.
40.6% 39.42%
0% 20% 40% 60% 80% 100%
2009
2008
current Asset Non Current Asset
0% 20% 40% 60% 80% 100%
2009
2008
share hoder equity current liabiilities
no current liabilities
-
8/3/2019 Final Report on Attock- Ibf
22/25
CALCULATION OF GROWTH RATE
Sustainable Growth Rate: (SGR)Sustainable Growth Rate: (SGR)
SGR => Return on Equity. b
1- (ROE. b)
b => retention ratio => 1 payout ratio
Payout ratio => Dividend
Net Income
PAYOUT RATIO = 14400003082419
b = 1-0.467 = 0.533
SGR= 0.435 *0.533
1-(0.435*0.533)
SGR = 0.231 = 0.231 = 30%
1-0.231 0.769
Internal Growth Rate: (IGR)Internal Growth Rate: (IGR)
IGR => Return on Assets. b
1-(ROA. b)
0.168 *0.533 =9.83%
1-(0.168*0.533)
-
8/3/2019 Final Report on Attock- Ibf
23/25
PROFORMA INCOME STATEMENT 2010
SGR 30%
Sales
80422098
Cost of sales (76142043)
Gross profit 4280055
Other operating Income 1097157
Operating Expense (657879)
Operating Profit 4719333
Income on bank Deposits and Investment 1103507
Share of Profit of Associated Companies 34463
Workers Profit Participation Fund (292759)
PROFIT BEFORE TAXATION 5564544
Provision for taxation (1557400)
PROFIT FOR THE YEAR 4007144
-
8/3/2019 Final Report on Attock- Ibf
24/25
PROFORMA INCOME STATEMENT 2010
IGR 10%
Sales 68049467
Cost of sales (64427882)
Gross profit 3621585
Other operating Income 928364
Operating Expense (556667)
Operating Profit 3993282
Income on bank Deposits and Investment 933737
Share of Profit of Associated Companies 29161
Workers Profit Participation Fund (247719)
PROFIT BEFORE TAXATION 4708461
Provision for taxation (1317800)
PROFIT FOR THE YEAR 3390661
-
8/3/2019 Final Report on Attock- Ibf
25/25
CONCLUSION
After careful consideration of the financial position of Attock petroleum
limited, I found that Sale has been increased by almost 16% of previousyear but somewhat it could not change the net profit margin massively
due to high percentage of expense.
If we kept eye on the financial ratio of company then, we know that
return on asset and equity is decreasing from previous year for the
reason that assets and equities increase by almost 18%, while income
increased by 16.5%, so it is obvious to understand that change in
income is less than change in asset and equity, which cause decline in
both the ratios.
Moreover, there is a clear increased in earning per share from 45 to 53
this increase raise question that when the net profit margin is same as
previous year then how EPS has been grown. As we know that net profit
increases almost 17% from previous year while there is no change
occurred in the number of shares, which boost up the EPS from 45 to
53.
RECOMMENDATION
Attock Petroleum must decrease their expense ratio because it is
increasing since last year.
More important thing for APL is to improve their recurring income
because since many year APL is selling their asset in order to increase
EPS which is not useful for any organization because regular selling of
their asset could caused the insolvency of firm. Therefore, APL should
increase their recurring nature income.