Financial Statment

7/29/2019 Financial Statment

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Packages limited LahoreStatement of profit and loss

For the year ended December 31, 2006(Rupees in thousands)

Local sales 8,869,068Export sales 158,820Total sales 9,027,907Less: sales tax and excise duty 1,172,430Commission 8,878

1,181,308Net sales 7,846,599Cost of sales (6,551,995)Gross profit 1,294,604Adminstrative expenses (349,934)Distabution and marketing cost (255,587)Other operating expenses (213,475)Other operating income 252,005

Profit from operations 757,613Finance costs (78,909)Investment income 5,669,136Profit before tax 6,347,840Taxation (247,060)Profit for the year 6,100,780

Earnings per share Rupees 87.30

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For the year ended December 31, 2007(Rupees in thousands )

Local sales 10,365,224

Export sales 174,771Total sales 10,539,995Less: sales tax and excise duty 1,501,230Commission 10,130

1,511,360Net sales 9,028,635Cost of sales (7,829,362)Gross profit 1,199,273Administrative expenses (348,064)Distribution and marketing cost (240,357)Other operating expenses (145,439)

Other operating income 122,185Profit from operations 587,598Finance costs (367,378)Investment income 4,412,728(Loss)/Profit before tax 4,632,948

Taxation (307,000)(Loss)/Profit for the year 4,325,948

(Loss)/Earnings per share Rupees 51.27

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Local sales 13,697,837Export sales 603,086Total sales 14,300,923Less: sales tax and excise duty 2,056,475Commission 19,669

2,076,144Net sales 12,224,779Cost of sales (11,281,480)Gross profit 943,299Administrative expenses (512,189)Distribution and marketing cost (362,425)Other operating expenses (324)

Other operating income 336,965Profit from operations 405,326Finance costs (1,662,094)

Investment income 948,879(Loss)/Profit before tax (307,889)Taxation (112,064)

(Loss)/Profit for the year (195,825)

(Loss)/Earnings per share Rupees (2.32)

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Packages limited lahoreStatament of profit and loss

For the year ended december 31,2010(Rupees in thousands)

Local sales 20,598,198Export sales 1,239,235

Total sales 21,837,433Less:sales tax and excise duty 3,266,556Commisison 34,969

3,301,525Net sales 18,535,908Cost of sales (17,740,467)Gross profit 795,441Adminstrative expenses (521,269)Distribution and marketing cost (565,638)Other operating expenses (15,185)Other operating income 202,368

Impairment charged on available for sale investment -Loss from operations (104,283)Finance costs (1,210,323)Investment income 997,260(Loss) before tax (317,346)Taxation (15,079)(Loss) for the year (332,425) (Loss)/Earnings per share

Basic Rupees (3.94)Diluted Rupees (3.94)

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Packages limited lahoreStatament of profit and loss

For the year ended december 31,2009(Rupees in thousands)

Local sales 15,775,713Export sales 757,575

Total sales 16,533,288Less:sales tax and excise duty 3,266,556Commisison 34,969

2,489,455Net sales 14,043,833Cost of sales (13,736,498)Gross profit 307,335Adminstrative expenses (467,582)Distribution and marketing cost (444,210)Other operating expenses (118,682)Other operating income 385,299

Impairment charged on available for sale investment (1,793,991)Loss from operations (2,131,831)Finance costs (1,278,433)Investment income 9,179,837Profit before tax 5,769,573Taxation (1,705,649)Profit for the year 4,063,924 Earnings per share

Basic Rupees 48.16Diluted Rupees 44.72

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Packages limited LahoreBALANCE SHEET


ASSETS:NON-CURRENT ASSETS

Property, plant and equipment 3,071,115Intangible assets 2,532Investment property 14,423Assets Subject to finance lease 1,901Capital work-in-progress 10,143,195Investments 5,775,665Long-term loans and deposits 180,618Retirement benefits 69,805

Total Non current assets 19,259,254 CURRENT ASSETS: Stores and spares 485,665

Stock-in-trade 1,647,173Trade debts 821,160Loans, advances, deposits, prepayments

And other receivables 353,521Cash and blank balance 106,703Total current assets 3,414,222Total current and non current assets 22,673,476

EQUITY AND LIABILITIES:CAPITAL AND RESERVES

Authorized capital 1,000,000

Issued, subscribed, and paid up capital 698,795Reserves 6,872,336Unappropriated profit 6,101,666Total Equity 13,672,797

NON-CURRENT LIABILITES Long term finances 6,000,000

Liabilites against assets subject to finance lease _ Deferred liabilities 688,455Total Non current liabilites 6,688,455

CURRENT LIABILITES: Current portion of liabilites against

Assets subject to finance lease 851Finances under mark up arrangements-secured 1,280,857Derivation foreign currency forward options _ Creditors , accured and other liabilities 1,030,516Provisions for taxation _

Total current liabilites 2,312,224 Contingences and commitments _

Total liabilities and equity 22,673,476

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Packages limited Lahore

BALANCE SHEETFor the year ended December 31, 2007

(Rupees in thousands)ASSETS:

NON-CURRENT ASSETS

Property, plant and equipment 10,361,253Intangible assets 363Investment property 26,055

Capital work-in-progress 7,800,683Investments 10,080,259Long-term loans and deposits 244,166Retirement benefits 88,262

Total Non current assets 28,601,041CURRENT ASSETS:

Stores and spares 715,840Stock-in-trade 2,206,191

Trade debts 1,288,928Loans, advances, deposits, prepaymentsAnd other receivables 525,421

Cash and blank balance 101,022 Total current assets 4,837,402 Total current and non current assets 33,438,443


Authorized capital 1,500,000Issued, subscribed, and paid up capital 733,735Reserves 13,110,240

Unappropriated profit 4,326,797 Total Equity 18,170,772 NON-CURRENT LIABILITES Long term finances -secured 12,346,500

Deferred liabilities 955,790Total Non current liabilities 13,302,290CURRENT LIABILITES:

Current portion of long term finances-secured _ Finances under mark up arrangements-secured 401,019Trade and other payables 1,564,362

Total current liabilities 1,965,381Total liabilities and equity 33,438,443

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Property, plant and equipment 11,285,293Intangible assets 241Investment property 25,294

Capital work-in-progress 8,155,293Investments 8,362,485Long-term loans and deposits 155,102Retirement benefits 127,518Total non current assets 28,111,172

CURRENT ASSETS: Stores and spares 841,487

Stock-in-trade 3,652,261

Trade debts 1,523,049Loans, advances, deposits, prepaymentsAnd other receivables 692,076

Cash and blank balance 199,188 Total current assets 6,908,061

Non current assets classified as heldFor sale-investment in related party 15,400

6,923,461Total current and non current assets 35,034,633

EQUITY AND LIABILITIES:

CAPITAL AND RESERVES Authorized capital 1,500,000Issued, subscribed, and paid up capital 843,795Reserves 15,624,602Unappropriated profit /(Loss) (195,825)Total Equity 16,272,572

NON-CURRENT LIABILITES Long term finances secured 12,304,400

Deferred liabilities 840,788Total Non current liabilities 13,145,188

CURRENT LIABILITES:

Current portion oflong term finances secured 550,000Finances under mark up arrangements-secured 2,587,819Trade and other payables 1,461,904

Total current liabilities 4,599,723Liabilities associated with non current asssets -

Classified as held for sale advance against sale of shares 1,017,150Total current liabilities 5,616,873Total liabilities and equity 35,034,633

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Property, plant and equipment 19,161,332Intangible assets 137Investment property 55,335Capital work-in-progress 65,578Investments 8,099,401Long-term loans and deposits 139,577Retirement benefits 107,900

Total Non current assets 27,629,260 CURRENT ASSETS:

Stores and spares 870,951

Stock-in-trade 4,102,396Trade debts 1,752,216Loans, advances, deposits, prepayments

And other receivables 203,817Income tax receivable 593,669

Cash and blank balance 455,720Total current assets 7,978,769

Total current and non current assets 35,608,029

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Authorized capital150,000,000 (2009:150,000,000) ordinary share of Rs. 10 each 1,500,00022,000,000(2009:22,000,000) 10% non-voting cumulative

Preference shares/convertible stock of Rs. 190 each 4,180,000Issued, subscribed, and paid up capital

84,379,504(2009:84,379,504) ordinary share of Rs. 10 each 843,795Reserves 17,099,138

Preference shares/convertible stock reserve 1,605,875Unappropriated profit 3,868,099Total Equity 23,416,907


Deferred income tax liabilites 2,353,000Retirement benefits -Deferred liabilities 124,852

Total Non current liabilites 10,488,429 CURRENT LIABILITES: Current portion of long-term finances-secured -

Finances under mark up arrangements-secured 86,496Trade and payables 1,406,516

Accured finance cost 249,681Total current liabilites 1,742,693

Contingences and commitments _ Total liabilities and equity 35,608,029

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Property, plant and equipment 17,861,486Intangible assets 2,392Investment property 31,588Capital work-in-progress 753,328Investments 12,219,037Long-term loans and deposits 128,429Retirement benefits 94,557

Total Non current assets 31,090,817 CURRENT ASSETS:

Stores and spares 1,049,950

Stock-in-trade 3,669,151Trade debts 1,643,275Loans, advances, deposits, prepayments

And other receivables 265,361Income tax receivable 766,107

Cash and blank balance 1,140,143Total current assets 8,533,987

Total current and non current assets 39,624,804

EQUITY AND LIABILITIES:CAPITAL AND RESERVES Authorized capital

150,000,000 (2009:150,000,000) ordinary share of Rs. 10 each 1,500,00022,000,000(2009:22,000,000) 10% non-voting cumulative

Preference shares/convertible stock of Rs. 190 each 4,180,000Issued, subscribed, and paid up capital

84,379,504(2009:84,379,504) ordinary share of Rs. 10 each 843,795Reserves 24,218,774

Preference shares/convertible stock reserve 1,605,875

Unappropriated profit 261,441Total Equity 26,929,885

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Deferred income tax liabilites 2,168,000Retirement benefits 167Deferred liabilities 149,173Total Non current liabilites 10,273,631

CURRENT LIABILITES: Current portion of long-term finances-secured 14,286

Finances under mark up arrangements-secured 141,231Trade and payables 1,794,059

Accured finance cost 471,712Total current liabilites 2,421,288

Contingences and commitments _ Total liabilities and equity 39,624,804

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Packages limited LahoreCASH FLOW STATEMENTS

For the last five years

Operatingactivities:

2010 2009 2008 2007 2006

Cash generatedfrom operations 2,048,790 618,112 -708,816 326,117 774,099Finance costpaid -988,292 -1,479,667 -1,800,985 -1,051,738 -38,270

Taxes paid -490,263 -285,615 -220,937 -139,191 -194,335Payments foraccumulatingcompensatedabsences -16,805 -6,971 -12,268 -6,783 -7,299Retirementbenefits paid -50,488 -44,236 -35,564 -30,339 -27,384Net cash fromoperatingactivities 502,942 -1,198,377 -2,778,570 -901,936 506,811Cash flow from investing activities:fixed capitalexpenditure -633,758 -972,975 -2,447,617 -4,841,392 -7,325,683Investments 50,968 -10,000 -12,903 -20,504advanceagainstdisposal of investments - --- 1,017,150 - -Net dec./inc. inlong term loansand deposit 11,148 15,525 89,064 -63,548 -164,418

proceeds fromdisposal of property,plantand equipment 25,034 23,543 21,252 48,401 12,493proceed fromdisposal&investment 7,865,000 71,428Dividendsreceived 946,292 313,087 948,879 646,650 822,990Net cash 399,684 7,234,180 -371,272 -4,151,364 -6,675,122

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genreatedfrom/used ininvesting act.Cash flow from financing activities:payment of long termfinances - -7,354,400 -Proceeds fromlong-termfinances 6,346,500 5,000,000proceeds fromissuence of preferenceshares/convertible stock/net 4,076,452proceeds fromissue finance - - 1,061,208 - -Payment of finance leaseliabilities - - - -851 -5,159proceeds fromissuance of ordenary shares

- - - - -

DIVIDENT PAID -272,938 - - -418,194 -417,914Net (decrease)/ increase incash and cashequivalents

629,688

2,7

57,855

(2,088,634

) 874,157

(1,591,384

)Net cash(usedin)/genratedfrom financingactivites

-272,938 -3,277,948 1,061,208 5,927,455 4,576,927Netincrease/decrease in cash andcash equivalent

369,224 -2,388,631 -299,997 -1,174,154 417,230Cash and cashquivalent at thebeginning of theyear

629,688 2,757,855 -2,088,634 874,157 -1,591,384cash and cash 998,912 369,224 - -299,997 -

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quivalent at theend of the year

2,388,631

1,174,154

Statement of Owners Equity

Rupees in Thousands ) Share Share Fair Value General HedgingCapital Premium Reserve Reserve reserve

Balance as on 698,795 2,986,953 19,500 3,090,936 (76,902)December 31, 2005

Final Dividend for the year endedDecember 31,2005 _ _ _ _ _ Rs. 6.00 Per share

Transferred fromProfit And loss _ _ _ 596,000 _ Account

Fair value gain during _ _ 178,250 _ _ The year

Transferred from _ _ 697 _ _ Profile And lossAccount on disposal of Shares of the resourceGroup (TRG) PakistanLimited

Gain arising on foreign _ _ _ _ 1,905Currency forward optionsEntered into as part of Cash flow hedge for the

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Purchase of plant

Transferred to CWIPOn expiry of foreign _ _ _ _ 74,187Currency forwardOptions (note 110)

Profit for the year _ _ _ _ _

Balance as on 698,795 2,968,953 198,477 3,686,936 _ December 31, 2006

(continued)


(Rupees in thousands) Unappropriated TotalProfit & loss

Account

Balance as on 1,016,163 7,736,255December 31, 2005

Final Dividend for (419,277) (491,277)The year endedDecember 31,2005Rs. 6.00 Per share

Transferred fromProfit and loss (596,000) _ Account

Fair value gain duringThe year _ 178,250

Transferred fromProfit And lossAccount on disposal of

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Shares of the resourcegroup (TRG) Pakistan _ 697Limited

Gain arising on foreignCurrency forward optionsEntered into as part of Cash flow hedge for thePurchase of plant _ 1,905 Transferred to CWIPOn expiry of foreignCurrency forwardOptions (note 110) _ 74,185 Profit for the year 6,100,780 6,100,780

Balance as onDecember 31, 2006 6,101,666 13,672,797

Statement of owners Equity

(Rupees in Thousands) Share Share Fair Value GeneralCapital Premium Reserve Reserve

Balance as on 698,795 2,968,953 198,477 3,686,936December 31, 2006

Final Dividend for the year endedDecember 31,2005Rs. 6.00 Per share _ _ _ _

Transferred fromProfit And lossAccount _ _ _ 5,646,600 3,493,975 ordinaryShares of Rs, 10Each issued as fully 34,940 _ _ _ Paid bonus sharesFair value gain

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during The year _ _ 2,476,829 _

Transferred fromProfit And lossAccount on disposalof Shares of theresource group(TRG) PakistanLimited & NestlePakistan limited _ _ (1,885,525) _

Profit for the year _ _ _ _ Balance as onDecember, 31 2007 733,735 2,986,953 789,751 9,333,536


(Rupees in Thousands ) Unappropriated Profit Total& Loss account

Balance as onDecember 31, 2006 6,101,666 13,672,797

Final Dividend for the year endedDecember 31,2005Rs. 6.00 Per share (419,277) (419,277)

Transferred fromProfit And lossAccount (5,646,600) _

3,493,975 ordinaryShares of Rs, 10Each issued as fullyPaid bonus shares (34,940) _

Fair value gain

during The year _ 2,476,829

Transferred fromProfit And lossAccount on disposalof Shares of theresource group(TRG) PakistanLimited & NestlePakistan limited _ (1,885,525)

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Profit for the year 4,325,948 4,325,948

Balance as onDecember, 31 2007 4,326,797 18,170,772


(Rupees in Thousands) Share Share Fair Value GeneralCapital Premium Reserve Reserve

Balance as onDecember, 31 2007 733,735 2,986,953 789,751 9,333,536

11,006,022 ordinary

Shares of Rs, 10Each issued as fullyPaid bonus shares 110,060 (110,060) _ _

Transferred fromProfit And lossAccount _ _ _ 4,326,797

Fair value lossduring The year _ _ (1,072,375) _

Loss for the year _ _ _ _

Balance as onDecember, 31 2008 843,795 2,876,893 (912,624) 13,660,333

( continued)

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Statements of Owners Equity

(Rupees in Thousands ) Unappropriated Profit Total& Loss account

Balance as onDecember, 31 2007 4,326,797 18,170,772

11,006,022 ordinary

Shares of Rs, 10Each issued as fullyPaid bonus shares _ _

Transferred fromProfit And lossAccount (4,326,797) _

Fair value lossduring The year _ (1,702,375)

Loss for the year (195,825) (195,825)

Balance as onDecember, 31 2008 (195,825) 16.272,572

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Profit & Loss account

(Rupees in thousands) 2009

Local Sales 15,775,713Exports sales 757,575

16,533,288

Less; Sales & Excise Duty 2,466,027Commission 23,4282,489,455

(14,043,833)Cost of sales 13,736,498

Gross Profit 307,335

Administrative expenses (467,582)Distribution & marketing cost (444,210)Other operating expenses (118,682)Other operating income 385,299Impairment charged on available for sale investment (1,793,991)

Loss from operations ( 2,131,831)

Finance costs (1,278,433)Investment Income 9,179,837

(Loss)/Profit before tax 5,769,573

Taxation (1,705,649)

(Loss) / Profit for the year 4,063,924

(Loss) / earning per share

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Basic 48.16Diluted 44.72

Statement of Comprehensive Income


(Loss) / Profit after taxation 4,063,924

Other Comprehensive income;

Surplus / (Deficit) on re-measurement of availableFor sale financial assets 319,455

Implement loss transferred to profit & loss account 1,793,991

Other comprehensive income for the year 1,474,536

Total comprehensive income for the year 5,538,460


(Rupees in Thousands ) Share Share Fair Value General PreferenceCapital Premium Reserve Reserve Shares/

ConvertibleStock

Reserve

Balances on December 31, 2008 843,795 2,876,993 (912,624) 13,660,333 _

Equity components of Preference shares/ con-Vertable stock as referredTo in note 72 (net of Transaction cost) _ _ _ _ 1,605,875

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Total comprehensiveIncome for the year _ _ 1,474,536 _ _

Balance on December 31, 2009 843,795 2,876,993 561912 13,660,333 1,605,875

(continued)


(Rupees in Thousands ) Unappropriated (loss) / TotalProfit

Balances on December (195,825) 16,272,57231, 2008

Equity components of Preference shares/ con- 1,605,875Vertable stock as referredTo in note 72 (net of Transaction cost)

Total comprehensive 4,063,924 5,538,460Income for the year

Balance on December 3,868,099 23,416,90731, 2009

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Profit & Loss account

(Rupees in thousands 2010

Local Sales 20,598,198Exports sales 1, 239,235

21,837,433

Less; Sales & Excise Duty 3,266,556Commission 34,969

3,301,52518,535,908

Cost of sales (17,740,467)

Gross Profit 795,441

Administrative expenses (521,269)Distribution & marketing cost (565,638)Other operating expenses (15,185)Other operating income 202,368Impairment charged on available for sale investment .

Loss from operations (104,283)

Finance costs (1,210,323)Investment Income 997,260

(Loss)/Profit before tax (317,346)

Taxation (15,079)

(Loss) / Profit for the year (332,425)

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(Loss) / earning per shareBasic (3.94)

Diluted (3.94)

Statement of Comprehensive Income


(Loss) / Profit after taxation (332,425)

Other Comprehensive income;

Surplus / (Deficit) on re-measurement of availableFor sale financial assets 4,119,636

Implement loss transferred to profit & loss account .

Other comprehensive income for the year 4,119,636

Total comprehensive income for the year 3,787,211

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For the year ended 2010

(Rupees in Thousands ) Share Share Fair Value General PreferenceCapital Premium Reserve Reserve Shares/

ConvertibleStock

Reserve

Balance on December 843,795 2,876,993 561912 13,660,333 1,605,87531, 2009

Transfers from profit& loss account _ _ _ 3,000,000 _

Final dividend for theYear ended December 31, 2009 Rs. 3.25 per Share _ _ _ _ _

Total comprehensiveIncome or ( loss) for theYear _ _ 4,119,636 _ _

Balance on December 843,795 2,876,993 4,681,548 16,660,333 1,605,87531, 2010

(continued)

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(Rupees in Thousands ) Unappropriated (loss) / TotalProfit

Balances on December 3,868,099 23,416,907

Transfers from profit& loss account (3,000,000) _

Final dividend for theYear ended December 31, 2009 Rs. 3.25 per (274,233) (274,233)Share

Total comprehensiveIncome or ( loss) for the (332,425) 3,787,211Year

Balance on December 261,441 26,929,88531, 2010

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Chapter 6

29

Horizontal &vertical analysi s


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Financial Analysis

Financial analysis means that the analysis of the financial statements i.e Analysis of income

statement, balance sheet etc. in financial analysis various ratios and graphs are shown. Which depict the past

performance of last 4 or 5 years? The question may arise that what is the benefit of financial analysis? The

answer is quite simple that many parties are interested in financial analysis like the investors before makinginvestment in the company see the financial trends of business, because they will invest in those firms which

will give them low risk and high return.

Moreover the financial institutions before sanctioning loans also evaluate the solvency of the

applicant through financial analysis. There are two main tools of financial analysis.

Vertical Analysis

Vertical as name shows it is y axis analysis of financial statements. It is a useful way of

analyzing statements and to convert them into common size statement by expressing absolute rupee amounts

into percentages of a base figure. The income statement thus exhibits expense as a percentage of sales, and each

asset/liability as a percentage of total assets and total liabilities. Statements so prepared are called common size

statements the analysis facilitates the comparison with prior period and also highlights the relative importance

of each item the analysis can be equally useful for inter firm comparison.

Horizontal Analysis

Horizontal as the name shows it is the x axis analysis. The computation of percentage and

changes in the same item over time is referred to as a trend analysis this spotlights trends and establishes

relationships between items that appear on the same row of a comparative statement there by disclosing changes

on items in financial statements.

Vertical Analysis

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(Profit and Loss Account)2010

%2009

%2008

%2007

%2006

%local sales 94.33 95.42 95.78 98.34 98.24export sales 5.67 4.58 4.22 1.66 1.76gross sales 100 100 100 100 100

Less :sales tax and excise duty-14.96

-14.92

-14.38

-14.24

-12.99

comission -0.16 -0.14 -0.14 -0.1 -0.1Net sales 84.88 84.94 85.48 85.66 86.91

Cost of sales-81.24

-83.08

-78.89

-74.28

-72.57

Gross profit 3.64 1.86 6.6 11.38 14.34Administrative expenses -2.39 -2.83 -3.58 -3.3 -3.88Distribution and marketing costs -2.59 -2.69 (2.53) -2.28 -2.5Other operating expenses -0.07 -0.72 0 -1.38 -2.36Other operating income 0.93 2.33 2.36 1.16 2.79Impairment charged on available for

sale investment --10.85 0 0 0

(Loss) / profit from operations -0.48-12.89 2.83 5.57 8.39

Finance costs (5.54) -7.73-11.62 -3.49 -0.87

Investment income 4.57 55.52 6.64 41.87 62.8(Loss) / profit before tax -1.45 34.9 -2.15 43.96 70.31

taxation -0.07-10.32 0.78 -2.91 -2.74

(Loss) / profit for the year -1.52 24.58 -1.37 41.04 67.58EPS - basic 0 0 0 0 0EPS - diluted 0 0 0 0 0

Comments:Local sales are continuously decreasing in every year but export sales are increasing.Operating income increase in 2009 but again decrease in 2010.Company faced loss from operations in 2009 and 2010 and also face

Loss before tax in 2010.Company is facing net loss in 2008 and 2010.

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Profit and loss account of horizontal/trend analysis

Local sales2006%

2007 % 2008 % 2009 % 2010%

Local sales 100 116.8 154.4 177.8 232.2Exportsales 100 110 379.7 477 780.2

Total sales 100 116.7 158.4 183.1 241.8Less: salestax andexciseduty 100 128 175.4 210.3 278.6commission 100 114 221.5 263.8 393.8

100 127.9 175.7 210.7 279.4Net sales 100 115 155.7 178.9 236.2Cost of sales 100 119.4 172.1 209.6 270.7Grossprofit 100 92.6 72.8 23.7 61.4Adminstrativeexpenses 100 99.4 146.3 133.6 148.9Distabution and

marketingcost 100 94 141.8 173.7 221.3Otheroperatingexpenses 100 68.1 0.15 55.5 7.1Otheroperatingincome 100 48.4 133.7 152.8 80.3Loss/Profitfrom

operations 100 77.5 53.5 -281.3 13.7Financecosts 100 465.5 2106.3 1620.1 1533.8Investmentincome 100 77.8 16.7 161.9 17.5Loss/Profitbefore

100 72.9 -4.8 90.8 4.9

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tax Taxation 100 124.2 45.3 690.3 6.1Loss/Profit forthe year

100

70.9 -3.20 66.6 5.4Earningper share

10058.7 -2.65 55.1 4.5

Comments: Net sales of packages limited are continuously increasing as compared to base year.Gross profit is continuously decreasing due to increase in cost of sales.Profit from operations is decreasing due increase in distribution and marketing cost and administrative expenses.

Net profit of company is less as compared base year and in 2008 company has to face loss.

Horizontal/Trend analysis of balance sheet:

2006 2007 2007 2008 2008 2009 2009 20102010


Property, plantandequipment

3,071,115

10,361.25

0.337377565

11,285,293

367.4656599

19,161,332

623.9210189

17,861,486

581.5961

Intangibleassets 2,532 363

14.33649289 241

9.518167457 137

5.410742496 2,392

94.47077

Investmentproperty

14,423

26,055

180.6489635

25,294

175.3726687

55,335

383.6580462

31,588

219.0113

AssetsSubjectto

financelease 1,901 0 0 0 0 0 0 0 0 Capitalwork-in-progress

10,143,195

7,800,683

76.90558054

8,155,293

80.40161902

65,578

0.646522126

753,328

7.42693

Investments

5,775,665

10,080,259

174.529842

8,362,485

144.7882625

8,099,401

140.2332199

12,219,037

211.5607

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Long-termloansanddeposits

180,618

244,166

135.1836473

155,102

85.87294733

139,577

77.2774585

128,429

71.10532

Retirementbenefits

69,805

88,262

126.4407994

127,518

182.6774586

107,900

154.5734546

94,557

135.4588

TotalNoncurrentassets

19,259,254

28,601,041

148.5054457

28,111,172

145.9618945

27,629,260

143.4596584

31,090,817

161.4331

CURRENT ASSETS:Storesandspares

485,665

715,840

147.3937797

841,487

173.2649048

870,951

179.3316381

1,049,950

216.1881

Stock-in-trade

1,647,173

2,206,191

133.9380259

3,652,261

221.7290473

4,102,396

249.0567779

3,669,151

222.7544

Tradedebts

821,160

1,288,928

156.9642944

1,523,049

185.4753032

1,752,216

213.3830191

1,643,275

200.1163

Loans, advances, deposits, prepayments

Andotherrceivabl

es

353,5

21

525,4

21

148.6

25117

692,0

76

195.766588

1

203,8

17

57.6534350

2

265,3

61

75.0

623 Cashandblankbalance

106,703

101,022

94.67587603

199,188

186.6751638

455,720

427.0920218

1,140,143

1068.52

Totalcurrentassets

3,414,222

4,837,402

141.6838741

6,923,461

202.7829766

7,978,769

233.6921559

8,533,987

249.9541

Total

current andNONcurrentassets

22,673,476

33,438,443

147.4782384

35,034,633

154.5181383

35,608,029

157.0470668

39,624,804

174.7628


Authori 1,000 1,500 150 1,500 150 1,500 150 1,500 150

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zedcapital ,000 ,000 ,000 ,000 ,000Issued,subscribed,andpaid upcapital

698,795

733,735

105.0000358

843,795

120.7500054

843,795

120.7500054

843,795

120.75

Reserves

6,872,336

13,110,240

190.768321

15,624,602

227.3550362

17,099,138

248.8111466

24,218,774

352.4096

Unappropriated profit

6,101,666

4,326,797

70.91173132

-195,825

-3.209369376

3,868,099

63.39414514

261,441

4.284748

TotalEquity

13,672,797

18,170,772

132.8972558

16,272,572

119.0142149

23,416,907

171.2663985

26,929,885

196.9596

NON-CURRENT LIABILITES Longtermfinances

6,000,000

12,346,500

205.775

12,304,400

205.0733333

7,970,577

132.84295

7,956,291

132.6049

Liabilitesagainstassetssubject

tofinancelease 0 0 0 0 0Deferredliabilities

688,455

955,790

138.8311509

840,788

122.1267911

124,852

18.13509961

149,173

21.66779

TotalNoncurrent

liabilites 6,688,455 13,302,290

198.8

843462 13,145,188

196.5

354929 10,448,429

156.2

158824 10,273,631

153.

6025 CURRENT LIABILITES:Current portion of liabilites against

Assetssubjecttofinance

851 0 0 550,000

64629.84724

0 0 14,286

1678.731

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lease

Finances undermarkuparrangements-secured

1,280,857

401,019

31.30864726

2,587,819

202.0380886

86,496

6.75297867

141,231

11.02629

Derivationforeigncurrencyforwardoptions 0 0 0 0 0Creditors ,accuredandotherliabilities

1,030,516 0 0 0 0 0 0 0 0

Provisions fortaxation 0 0 0 0 0Totalcurren

tliabilites

2,312,224

1,965,381

84.99959346

5,616,873

242.9207983

1,742,693

75.36869265

2,421,288

104.7168

Contingencesandcommitments 0 0 0 0 0Totalliabilities and

equity

22,67

3,476

33,438,44

3

147.478238

4

35,03

4,633

154.518138

3

35,60

8,029

157.047066

8

39,62

4,804

174.762

8

Comments for trend analysis of balance sheet:Property plants and equipment are decreas in 2008and again increase in2009 and again decrease in2010.

Capital work in progress increase in 2010 as compared to previous years.Cash and bank balances also increase in 2010 as compared to previous years.

Long term finances decrease but current portion of finances increases, trade and other payables also increase.Reserves decrease in 2007 to 2009 but again increase in 2010.In 2007, 2008 and 2010 company has faced inappropriate loss and in 2009 has faced inappropriate profit.

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Chapter 7Chapter 7

37

RATIO

ANALY SIS


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Ratios Analysis:

Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the

firms performance.

1. Liquidity ratios :

The liquidity of a firm is measured by its ability to satisfy its short term obligations as they come due.

Liquidity refers to the solvency of the firms over all financial position the ease with which it can pay its bills.

a) Net Working Capital:

The formula for Net Working Capital is:

Net Working Capital = Current Assets Current Liabilities

It is a safety cushion to creditors. A large balance is required when the entity has difficulty on short

notice.

s

years 2006 2007 2008 2009 2010

Networkingcapital(Rsinthousands)

1102998 2872,021 1306,588 6236,000 6113,000

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Interpretation:

It is a safety cushion to creditors. A large balance is required when the entity has difficulty on shortnotice.Net working capital has increased from 2006 to 2007, but again decrease in 2008,because in 2008

its current liabilites increased as compared to previous years to greater extent.again in 2009 this ratio

increased due to incresase in current assets and decrease in current liabilites.company paid its current

liabilites and purchase some new current assets which is a good sign for packages.in 2010 current assets

are greater than 2009 but current liabilites are also increased due to which this ratio is less than 2009.

b) Current ratio:

This ratio, which is subject to seasonal fluctuations, is used to measure the ability of a firm to meet its

current liabilities out of current assets. Generally, the higher the current ratio, the more liquid the firm is

considered to be.

The formula for Current Ratio is:

Current Ratio = Current Assets /Current liabilites

years 2006 2007 2008 2009 2010

CurrentRatio(times)

1.48 2.46 1.23 4.58 3.52

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Interpretation:

This ratio, is used to measure the ability of a firm to meet its current liabilities out of current assets.

Generally, the higher the current ratio, the more liquid the firm is considered to be.Current ratio hasincreased from 2006 to 2007, but again decrease in 2008,because in 2008 its current liabilites

increased as compared to previous years to greater extent.again in 2009 this ratio increased which

means packages is more liquid in 2009.in 2010 current assets are greater than 2009 but current

liabilites are also increased due to which this ratio is less than 2009.

c)Quick or acid test ratio:

Acid-test or quick ratio or liquid ratio measures the ability of a company to use its near cash or quick assets to extinguish or retire its currentliabilities immediately. Quick assets include those current assets that presumably can bequickly converted to cash at close to their book values . A company with a Quick Ratio of less than 1 can not currently pay back its current liabilities.

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http://en.wikipedia.org/wiki/Current_liabilityhttp://en.wikipedia.org/wiki/Current_liabilityhttp://en.wikipedia.org/wiki/Current_assethttp://en.wikipedia.org/wiki/Book_valuehttp://en.wikipedia.org/wiki/Current_liabilityhttp://en.wikipedia.org/wiki/Current_liabilityhttp://en.wikipedia.org/wiki/Current_assethttp://en.wikipedia.org/wiki/Book_value


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years 2006 2007 2008 2009 2010

Quick Ratio

(times) 0.55 0.97 0.43 1.72 1.57

Interpretation:

Quick ratio of packages limited is increasing from 2006 to 2007 but decrease in 2008 which means company

can not pay back its liabilites in this year.in 2009 this ratio again increases which means company has enoughassets to pay back its current liabilities.in 2010 this ratio is again more than 1.

2) Activity ratio:

Activity Ratios are used to determine how quickly various accounts are converted into sales or cash.

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a) Inventory turnover ratio:

If a company is holding a access inventory it means that funds which could be invested else where are

being tied up in inventory. In addition, there will be high carrying cost for storing the goods, as well as

the risk of obsolescence on the other hand, if inventory is too low the company may loose customers

because it has run out of merchandise.

The formula for inventory turnover is:

Inventory turnover= cost of goods sold/average inventory

years 2006 2007 2008 2009 2010

InventoryTurnover

6.14 5.36 5.02 5.52 7.52

b)Fixed Assets Turnover Ratio:

Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratiomeasures the efficiency and profit earning capacity of the firm.Higher the ratio,greater is the intensive utilization of fixed assets. Lower ratio means under-utilization of fixed assets.

Formula of Fixed Assets Turnover

Fixed Assets Turnover Ratio = Cost of Sales / Net Fixed Assets42


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years 2006 2007 2008 2009 2010

Fixed AssetsTurnover Ratio(times)

2.92 1.01 0.86 0.86 1.22

Interpretation:

Fixed asset turnover ratio is higher in 2006,after that it tends to decrease in 2007,2008 and 2009 againincrease in 2010 but this increase is less than 2006.which means packages has to incraese its efficiencyto utilize its fixed assets to earn profit.

b) Total Asset turnover:

It is helpful in evaluating a companys ability to use its asset efficiently to

generate revenue. The formula for total asset turnover is:

Total Asset turnover = Sales / Total Assets

years 2006 2007 2008 2009 2010

Total AssetsTurnover Ratio(times)

0.4 0.32 0.46 0.46 0.55

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Interpretation:

Total assets turnover ratio is continuously increasing from 2008 to 2010.

3. Profitability Ratios:

An indication of good financial health and how effectively the firm is being managed is

the companys ability to earn a satisfactory profit and return on investment.

a) Gross profit margin:

The gross profit margin measures the percentage of each sales rupee remaining after the firm has paid

for its goods. The higher the gross profit margin, the better position of company would be.

The formula for gross Profit Margin is:

Gross Profit Margin = Gross Profit / Sales

years 2006 2007 2008 2009 2010

Gross Profit Ratio(%)

14.34 11.38 1.86 1.86 3.64

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Interpretation:Gross profit margin is decreasing from 2006 to 2010.which is not a good sign for packages limited.

b)Return on Assets:

The return on total assets (ROA) indicates the efficiency with which management has used its available

resources to generate income. It is also called Return on Investment. If ROA ratio decreases over the

year, it indicates inefficient use of assets.

The formula for ROA is:

ROA = Net Income / Average Total Assets

years 2006 2007 2008 2009 2010

Return onAssets(%)

27 13 11 11 (1)

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Interpretation:Return on assets ratio is continuously decreasing from 2006 to 2010 .which shows inefficiency of its employees.

b) Return on Equity:

ROE measures the return on common stockholders investment in the firm. Generally, the higher this

return, the better off is the owners.

The formula for ROE is:

ROE = Earnings available for common stockholders / common stock equity

years 2006 2007 2008 2009 2010

Return onEquity (%)

14.8 4.39

(1.20)

(13.05) (1.23)

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Interpretation:

Debt ratio of packages is increasing from 2006 to 2009 which is good for stockholders of packages.but not for

its creditors. In 2009 and 2010 debt ratio again decreased.which is not good sign for packages stock holders.

5. Market Value Ratios:

Market ratios relate to the firms market value as measured by its current share price, to certain accounting

values.

a) Earning Per Share:

It indicates how much amount firm is earning on its one share. Earning per share is useful indicator of

the operating performance of the company as well as of the dividends that may be expected.

The formula for EPS is:

EPS = (Net income Preferred Dividends) / Common stock outstanding

years 2006 2007 2008 2009 2010

Basic EPS(Rs.)

30.05 40.6

(2.32)

48.16 (3.94)

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Interpretation:

Earning per share increase in 2007 but decrease in 2008,again increase in 2009. In 2010 earning per share again

decrease.ss

b) Price/Earning Ratio:

It measures the amount that investors are willing to pay for each dollar of a firms earning; the higher

the price earning ratio, the greater the investors confidence.

The formula for Price Earning Ratio is:

Price Earning Ratio = Market Price per share / Earning per share

years 2006 2007 2008 2009 2010

Price -EarningRatio 58.96 58.96

(34.98)

2.99 (32.65)

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Interpretation :

Price to earning ratio is continuously decreasing from 2007 to 2010.which is not a good sign for packageslimited.s

Dividend Yield Ratio:

Dividend yield ratio is the relationship between dividends per share and the marketvalue of the shares.Share holders are real owners of a company and they are interestedin real sense in the earnings distributed and paid to them as dividend. Therefore,dividend yield ratio is calculated to evaluate the relationship between dividends pershare paid and the market value of the shares.

Formula of Dividend Yield Ratio:

Following formula is used for the calculation of dividend yield ratio:

Dividend Yield Ratio = Dividend Per Share / Market Value Per Share

years 2006 2007 2008 2009 2010

DividendYield (%)

2.41 6.17

-

2.26 2.53

Financial Statment

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