TOPIC: Horizontal, Vertical & Ratio

Analysis

ASSIGNMENT #04

SUBMITTED BY:

MATEE-UL-HASNAIN SP13-MBA (2-A)-032

AMAN ASGHAR SP13-MBA (2-A)-039

HAMZA NADEEM SP13-MBA (2-A)-023

SUBMISSION DATE: December 24, 2013

SUBMITTED TO: Saira Javaid

DEPARTMENT OF MANAGEMENT SCIENCES

COMSATS INSTITUTE OF INFORMATION TECHNOLOGY,

ISLAMABAD

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Table of Contents

Attock Refinery Limited...............................................................................................................................3

Vertical Analysis...........................................................................................................................................3

Horizontal Analysis......................................................................................................................................4

Ratio Analysis..............................................................................................................................................5

Liquidity Ratio..............................................................................................................................................5

Current Ratio...............................................................................................................................................5

Quick assets test ratio.................................................................................................................................5

Liquidity Ratio..............................................................................................................................................5

Assets Management Ratios..............................................................................................................................5

Inventory Turnover Ratio............................................................................................................................5

No. of Days in Inventory..............................................................................................................................6

Receivable Turnover Ratio...........................................................................................................................6

Average Collection Period...........................................................................................................................6

Payable Turnover Ratio...............................................................................................................................6

Average Payable Period..............................................................................................................................6

Total Assets Turnover Ratio.........................................................................................................................6

Assets Management Ratios..............................................................................................................................7

Profitability Ratios..........................................................................................................................................7

Gross Profit Ratios..........................................................................................................................................7

Net Profit Margin...........................................................................................................................................7

Return on Equity..........................................................................................................................................7

Profitability Ratios..........................................................................................................................................7

Capital Structure Ratio................................................................................................................................8

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Attock Refinery Limited

Vertical Analysis

All the items income statement should be divided by the net sales/ net turn over and all the items of balance sheet should be divided by the total assets/ total liabilities

Balance Sheet 2012

Rs. In Million

Vertical Analysis for 2012 (%)

2011

Rs. In Million

Vertical Analysis for 2011 (%)

Equity and reserve 14895.22 15.89 12459.06 19.56Surplus on revaluation of free hold land 8745.22 9.33 8745.22 13.73Non-current liabilities - - 158.40 0.25Total current liabilities 70074.47 74.78 42331.76 66.46

93,714.91 100.00 63,694.44 100.00Property plant & equipment 9840.29 10.50 9670.97 15.18Long term investment 13264.92 14.15 13264.92 20.83Non-current assets 105.02 0.11 169.90 0.27Loose tools 673.85 0.72 619.92 0.97Stock in trade 10650.69 11.37 10872.58 17.07Trade debts 49115.76 52.41 25053.68 39.33Loams, advances, deposits payments and other receivables

220.67 0.24 178.21 0.28

Cash and bank balances 9843.67 10.50 3864.28 6.0793,714.91 100.00 63,694.44 100.00

Income Statement 2012

Rs. In Million

Vertical Analysis for 2012

2011

Rs. In Million

Vertical Analysis for 2011

Net sales 154381.56 100.00 116397.37 100.00Cost of sales 152362.20 98.69 114900.76 98.71Gross Profit 2019.36 1.31 1496.61 1.29

Administration expenses 340.01 0.22 282.92 0.24

Distribution cost 37.62 0.02 32.88 0.03

Finance cost 994.74 0.65 45.41 0.04

Other charges 264.53 0.17 208.71 0.18

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1,636.90 1.06 569.92 0.49

382.46 0.25 926.99 0.80

Other income 2388.77 1.55 1565.59 1.35P/L before taxation from refinery operations

2771.23 1.80 2492.28 2.15

Provision for taxation 1625.18 1.06 1375.12 1.18P/L after taxation from refinery operations 1146.05 0.74 1117.16 0.97P/L after taxation from non-refinery operations

1588.64 1.03 1068.39 0.92

Profit for the year 2734.69 1.77 2185.55 1.89

Horizontal Analysis

((current year – previous year)/ previous year) X 100 = ____%age

Balance Sheet 2012

Rs. In Million

2011

Rs. In Million

Horizontal Analysis for 2012 (%)

Equity and reserves 14,895.22 12,459.06 19.55Surplus on revaluation of freehold 8,745.22 8,745.22Non-current liabilities 158.40 (100.00)Total current liabilities 70,074.47 42,331.76 65.54

93,714.91 63,694.44 47.13Property, plant and equipment 9,840.29 9,670.97 1.75Long term investments 13,264.92 13,264.92Non-current assets 105.02 169.90 (38.19)Stores, spares and loose tools 673.85 619.92 8.70Stock-in-trade 10,650.69 10,872.58 (2.04)Trade debts 49,115.76 25,053.68 96.04Loans, advances, deposits, and other receivables 220.71 178.21 23.85Cash and bank balances 9,843.67 3,864.28 154.74

93,714.91 63,694.44 47.13

Profit 8: Loss AccountNet Sales

154,381.56 116,397.37 32.63Cost of sales 152,362.20 114,900.76 32.60Gross Profit 2,019.36 1,496.61 34.93Administration expenses 340.01 282.92 20.18Distribution cost 37.62 32.88 14.41Finance cost 994.74 45.41 2,090.67

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Other charges 264.53 208.71 26.751,636.90 569.92 187.22382.46 926.69 (58.73)

Other income 2,388.77 1,565.59 52.58Profit before taxation from refinery 2,771.23 2,492.28 11.19Provision for taxation 1,625.18 1,375.12 18.18Profit after taxation from refinery 1,146.05 1,117.16 2.59Profit after taxation from non- 1,588.64 1,068.39 48.69Profit for the year 2,734.69 2,185.55 25.13

Ratio Analysis

Liquidity Ratio

Current Ratio

Current assets/ current liabilities = ______times

For 2012 20111.01 0.16

Quick assets test ratio

Quick assets/ Current liabilities = ______times

For 2012 20110.84 0.69

Liquidity Ratio

Liquidity position of the Company has improved in comparison to last year. The Company successfully met the challenges of circular debt issue by keeping a balance in its receivables and payables.

Assets Management Ratios

Inventory Turnover Ratio

Sales/ average inventory = ______times

For 2012 201114.16 12.73

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No. of Days in Inventory

No. of days in a year/ inventory turnover =______days

For 2012 201126 29

Receivable Turnover Ratio

Net sales/ average accounts receivable = ______times

For 2012 20114.90 5.04

Average Collection Period

No. of days in a year/ inventory turnover =______days

For 2012 201175 73

Payable Turnover Ratio

Net purchases/ average accounts payable = ________times

For 2012 20113.40 3.78

Average Payable Period

No. of days in a year/ inventory turnover =______days

For 2012 2011107 97

Total Assets Turnover Ratio

Net sales/ Average total assets = _______times

For 2012 20111.65 1.83

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Assets Management Ratios

There is improvement in Inventory turnover ratio and No. of days in inventory because of better capacity utilization.

Circular debt situation prevalent in the country has adversely affected our debtor turnover ratio and number of days in receivable but this effect is mitigated by the positive change in creditor turnover ratio and number of days in payables.

Profitability Ratios

Gross Profit Ratios

Gross profit/ net sales = _____%age

For 2012 20111.31 1.29

Net Profit Margin

Net income/ net sales = ______%age

For 2012 20111.77 1.88

Return on Equity

(Net income after taxes/total equity) X 100 = _____%age

For 2012 201118.36 17.54

Profitability Ratios

There is a positive trend in Gross profit margin as compared to last year due to better capacity utilization of 99.5% (June 30, 2011: 97.2%) and favorable trend in international prices of petroleum products and crude oil. This has made positive impact on Company's profitability.

However, the Net profit ratio of the company has declined

There is a positive trend of return on equity because of improvement in overall profitability of the company.

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Capital Structure Ratio

The capital structure ratios are not applicable to the company because it does not have any debts in their capital structure.

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