UBL Report

37
Chapter INTRODUCTION ABOUT THE UNITIED BANK LIMITED To properly fulfill the requirements of the commercial banking and exercise control over banking sector, State Bank of Pakistan was established in 1948. After the introduction of State bank different commercial banks came into progress amongst which one was United bank limited. Real turn took place in the banking section when we renowned banker Agha Hassan Abidi took initiate step of opening a bank. His dream true when the first branch of UBL was opened at Macloed Road (Now I.I Chundrigar Road) on 7 th November 1959. This achievement was secured after passing through many problems and after completion of a lot of legal formalities. UBL was established on 24/07/1959 as a public limited company with registered office at I.I Chundrigar road Karachi. The Authorized capital was Rs.20,000,000/- issued, subscribed and paid up capital was Rs.10,000,000/- divided into shares of Rs.10/-

description

internship report of UBL

Transcript of UBL Report

Page 1: UBL Report

Chapter

INTRODUCTIONABOUT THE UNITIED BANK LIMITED

To properly fulfill the requirements of the commercial banking and exercise

control over banking sector, State Bank of Pakistan was established in 1948.

After the introduction of State bank different commercial banks came into

progress amongst which one was United bank limited.

Real turn took place in the banking section when we renowned banker Agha

Hassan Abidi took initiate step of opening a bank. His dream true when the first

branch of UBL was opened at Macloed Road (Now I.I Chundrigar Road) on 7 th

November 1959.

This achievement was secured after passing through many problems and

after completion of a lot of legal formalities. UBL was established on 24/07/1959

as a public limited company with registered office at I.I Chundrigar road Karachi.

The Authorized capital was Rs.20,000,000/- issued, subscribed and paid up capital

was Rs.10,000,000/- divided into shares of Rs.10/-

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INTRODUCTION OF FINANCIAL STATEMENT.

The ACPA (American Institute of Certified Public Accountants) has said

this about financial statements: Financial Statements are prepared for the purpose

of presenting a periodical review or report on progress by the management and

clear with the status of the investment in the business and results achieved during

the period under review.

Financial Statements are a major source of information about a firm the statements

are accounting derived compilations of the firm activities as of a point in time or

for a particular period of time these accounting transactions are based on the

accrual concept, reflect primarily historical costs and are prepared according to

generally accepted accounting principles.

As firm financial statements typically are part of the annual rep that the

firm sends its stockholders the financial statements are presented along with any

footnotes needed to explain or elaborate upon items in the statement themselves.

The footnotes contain considerable detail and often cover several pages. By

analyzing the United Bank limited financial Statements and the foot notes as,

necessary, we can obtain a useful assessment of the firm form an accounting

standpoint, including its recent performance, its current financial] position and its

general financial health.

MEANINGS OF FINANCIAL STATEMENTS.

1) “Financial Statements are the statements which show the financial position of a

business at the end of an accounting year”

2) Financial Statements are those statements, which give information about the

Economic resources and obligation of a business.

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IMPORTANCE OF FINANCIAL STATEMENTS.

The study of financial statement discloses the profitability and financial

soundness of a company. Such study provides various accounting

information. The following points disclose the importance of financial

statement analysis.

1. Financial stability.

2. Profitability

3. Operational efficiency.

4. Firm solvency position.

5. Future growth of the business

6. Comparative study.

7. Evaluation tool.

8. Provide information to the taxation authorities.

9. Screening tool for investment.

10. Provide information’s about the sources and uses of the funds.

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TYPES OF FINANCIAL. STATEMENT.

1) Balance Sheet.

2) Income Statement

3) Statement of Changes in Financial position.

4) Statement of Retained earnings.

1) BALANCE SHEET.

It has two sides one is called debit side" which shows assets and the other is credit

side showing liabilities and owners equity at the date.

2) INCOME STATEMENT.

Income statement is also known as profit and loss account. A statement

showing the profit end loss of a company for a particular period, is known as income

statement. In income Statement the positive result represent the net income and the

negative

result represent the net loss.

3) STATEMENT OF CHANGES IN FINANCIAL POSITION.

1) Statement of changes is also known as such names.

2) Working capital Statement.

3 ) Funds flow statement.

Sources and Application of funds statements. Statement of changes in

financial position shows the flow of working capital during a stated period of time.

4) STATEMENT OF RETAINED EARNINGS.

Retained Earnings represents the profit that has been kept by the company and not

distributed the shareholders of the company.

At the end of Fiscal period a statement of retained earnings is prepared statement

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of retained earnings prepared for sole proprietorship and partnership.

DIFFERENT GROUPS INTERESTED IN FINANCIAL

STATEMENTS:

With Business Corporation numerous people are involved directly or indirectly.

They all are interested in its financial statements to know the information from there own

point of view making certain decisions. They may broadly be grouped into two major

categories.

Those with direct interest.

Those with indirect interest in business enterprise.

Those with direct interest:1. Owners:

It consists of promoters, common stock holders and preferred stock holders. Their

basic aim is to increase their wealth, which they have invested in the business enterprise.

Therefore, they are interested in all those information in financial statements that reveal

whether their capital and increasing or decreasing. On the basis of such information they

make decision whether to make additional investment or to reduce their investment.

2. Creditors:

Those who extend loans or provide goods or render services on credit are known

as “creditors”. Bankers and other creditors who have loaned money to business concern

or who are considering making such loans will be vitally interested in the balance sheet

of the business by studying the amount and kinds of assets in relation to the amount and

payment dates of the liabilities, they can form an opinion as to the ability of the business

to pay the debits promptly. Another major groups making constant use of financial

statements consist of the credit managers of manufacturing and whole sailing firms, who

must decide whether prospective customers are to be allowed to buy merchandise on

credit. By studying the information that highlight the debt paying ability , creditors

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determine the extent to provide loans or goods or render services on credit, credit terms &

discount policies.

3.Investors.

They use the financial statement to know the growth and stability of the business

enterprise. On the basis of such information they determine the extent of their investment

in the business enterprise. The financial statement helps them to make a profitable use of

their capital by providing important information.

4.Management:

It is another group, which make extensive use of financial statements in order to analyze

in depth the economic activities of the business enterprise. It studies both explicit and

implicit factors that has affected the business favorably or unfavorably .the financial

statements also help the management to decide the nature and extent of financing

requirements and in preparing future plans for the expansion and progress of the business.

5. Government Agencies:

It includes income tax department, excise and taxation and custom authorities. They are

invested in financial statements in order to evaluate tax return, impose excise duties and

penalties of deemed necessary.

6. Employees AND Labor unions:

They use financial statements to know that financial stability profitability position of a

company and positions of other necessary records such as employee’s participation and

welfare fund and provision of gratuity etc. They use all these information in preparing

charter of demand. The information obtained through financial statements help them in

getting accepting their due rights.

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Those with indirect interest:

1. Competitors:

They use financial statements to have the information about the rival company’s product,

prices, working capital --------, efficiency and capability of management, the nature of

fixed and current assets to devise comparative polices and strategies and to capture wide

share of market and earn greater profit.

2. Customers and Consumers:

They use financial statements to know the per unit cost and per unit selling price

of the company’s product in order to know the profit margin of the company for deciding

the suitability of product price for making purchases.

3. Financial Analysts and Advisors:

N.I..J, I.C.P And other experts needs financial statements to conduct analysis to

advice not only existing but also potential investors, creditors and suppliers to retain,

increase, decrease or abandon their investment in the organization and also highlight the

future prospects of the company.

4. Trade Associations And Reporting Agencies:

These are invested in financial statements to prepare description reports, select

information to publish the reports, compute trends and ratios, industry statistics and

analyze industry results.

5. Students:

The students particularly of M.B.A, M.com in order to become successful future analyst,

use financial statements to learn the way to analyse the financial statements and interpret

the results and their findings.

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LIMITATIONS OF FINANCIAL STATEMENTS:

The financial statements published by the business concern are subject to certain

limitations, which are as under

1. They reflect only those factors, which can be measured in monitory terms.

They do not indicate non-monitory factors, whish definitely affect the

financial conditions, operating results. Such factors include

a. General reputation of directors and managers

b. Effects of favorable location.

c. Cooperation between management and workers.

d. Efficiency, loyalty and integrity of management and employees.

2. They are essentially interim reports and therefore cannot be final because the

actual gain or loss of a business can be determined only when it is used or

liquidated.

3. Most of the faces reflected by financial statements are mere estimation e.g.,

inventory valuation,.

4. The financial statements report historical data and therefore they don’t give an

accurate indication of the present “worth” of a business. The fixed assets are

shown at original cost less depreciation. However, the market price of these

assets keeps changing. The channel is more that if these assets were sold, the

prices realized would be substantially different from their valuation on balance

sheet.

5. Different methods for the valuation of stocks or raw materiel and depreciation

are used by different business concerns. All these methods give varying results,

which affect value of current assets in balance sheet and profit figure in the

income statement. The profit results of one firm cannot therefore be accurately

compared with the other.

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STANDARD OF COMPARISON

The most commonly used Standard of comparison are as under:

1) RULES OF THUMB MEASURES:

Much financial analysis uses rules of thumb measures for key financial ratio

e.g. a current ratio 2:1 and quick ratio 1:1 is considered satisfactory. This Standard

doesn’t provide complete proof and suggest that the analyst should make further

investigation about the company. It is so because a company with a larger than 2:1

current ratio may have a poor credit policy resulting in too large A/R may have poor

cash mgt. Another company may have a current ratio less than 2:1 resulting from

excellent mgt.: in this area. Therefore standard of comparison should be used with

great care.

2) PAST PERFORMANCE OF THE COMPANY:

In this parameter financial ratios of the same company are compared over a

p nod of time. This standard gives some basis of judging and the analyst can know

that whether ratio is getting better result.

TECHNIQUES/TOOLS/METHODS OF ANALYSIS

Analytical tools are used to ascertain or measure the relationship among the

financial statement of a single set of statements and the changes that have taken place in

these items as reflected by successive financial statements. The objective of any

analytical method is to simplify or reduces the data under review to more understandable

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terms. The analyst first computes and organises his data, and then analysed and interprets

them to make them more meaningful.

Analytical methods are techniques used in analysing financial statements

include the following:

1. Comparative balance sheets, income statements, and statements

of retained earnings, showing:

a) Absolute data (Amount in Rupees)

b) Increase and decrease in rupee amounts.

c) Increase and decrease in percentages.

d) Comparison expressed in ratios.

e) Percentages of totals.

2. Statement of changes in financial condition.

3. Trend ratios of selected (related) financial and operating data.

4. Common-size percentages - balance sheets, income statements,

and individual sections of these statements.

5. Ratios expressing the relationships of items selected from the

balance sheet, the income statement, and both statements.

6. Composite industry ratios.

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Chapter 2

UNITED BANK LIMITEDCOMPARITIVE BALANCE SHEET

FOR THE PERIOD ENDED Dec: 31, 2002-2005 .

Rupees in (000)2002 2003 2004 2005

ASSETS

Cash and bank balance 15649561 17274461 23844435 258456450Balance with other banks 9985788 11386434 17699334 17187250Lending to financial Institutions

3627557 19050791 16262504 17826109

Investments 69244328 56516760 54953 728 74425667Advances 72808106

160170415 146249184

169560882

Other assets 3636065 3001793 4393852 6041671Operating fixed assets 2710892 3754236 3969006 4170585Taxation recoverable 314712 283171 45728 74956Deferred tax asset-net 5026457 5486357 5194892 4129977 Total assets 183003466 216924418 272612663 319262553

TOTAL LIAB. & OWNER EQUITY

.

Bills payable 1832981 2975910 3811284 5446989Borrowing From Fin. Institutions

5347349 7710375 11975684 14124220

Deposits & other A/c's 158263495 185071502 230256627 269130356

Sub – ordinted loans - - - -Liabilities against assets subject to finance lese

81548 39995 288 -

Other liabilities 544441 5707204 3513569 5923127Deferred liabilities 861935 1535059 2191180 2257099Share capital 5180000 518000 518000 518000Reserves 4243352 4678317 5915928 6185214Unappropriated profit 797100 218900 3274439 4212342Surplus on revaluation of 2445465 3807066 2993664 2803590

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asset

Total liabilities and owner eqvity

183003466 216924418 272612663 31926553

UNITED BANK LIMITED BALANCE SHEET SHOWING ABSOLUTE

INCREASE / DECREASE IN AMOUNT FOR THE PERIOD ENDED Dec 31, 2002-2005

Taking 2002 as base year Rupees in (000)

2003 2004 2005ASSETS

Cash and bank balance 1624900 8194874 10195889Balance with other banks 1400646 7713546 7201462Lending to financial Institutions

15423234 12634947 1418552

Investments 12727568 14290600 5181339Advances 87362309 73441078 96752776Other assets 634272 757787 2405612Operating fixed assets 1043344 1258114 1459693Taxation recoverable 31541 268984 239756Deferred tax asset-net 459900 168435 896480 Total assets 93920952 78239197 123479087

TOTAL LIAB. & OWNER EQUITY

.

Bills payable 1142929 1978303 5264008Borrowing From Fin. Institutions

2363026 6628335 8776871

Deposits & other A/c's 26808007 71993132 110866861Sub – ordinted loans - 350010000 -Liabilities against assets subject to finance lese

41553 81260 378686

Other liabilities 162763 2030872Deferred liabilities 673124 1329245 1395164Share capital 0 0 0Reserves 4324965 1672576 1941862Unappropriated profit 578110 2477339 3415242Surplus on revaluation of assets

1361601 548199 358125

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Total liabilities 30965151 88014997

UNITED BANK LIMITED BALANCE SHEET SHOWING

INCREASE / DECREASE IN % AGES FOR THE PERIOD ENDED Dec 31 2002-2005

Taking 2002as base year Rupees in (000)

2005 2004 2003ASSETS

Cash and bank balance 65.15 % 52.36 % 10.38%

Balance with other banks 72.12 77.25 14.03Lending to financial Institutions

391.4 348.30 425.17

Investments 7.48 20.64 17.48Advances 132.4 100.87 119.99Other assets 66.16 20.84 17.44Operating fixed assets 53.85 46.41 38.48Taxation recoverable 76.18 85.47 10.02Deferred tax asset-net 17.84 3.35 9.15 Total assets

TOTAL LIAB. & OWNER EQUITY

.

Bills payable 287.2 107.9 62.4Borrowing From Fin. Institutions

164.1 123.9 44.2

Deposits & other A/c's 70.1 45.5 16.9Sub – ordinted loans - - -Liabilities against assets subject to finance lese

50.9 99.6 -

Other liabilities 6.8 36.6 2.94Deferred liabilities 161.9 154.2 78.1Share capital 0 0 0Reserves 45.8 39.4 10.3Unappropriated profit 428.5 310.8 72.5Surplus on revaluation of assets

14.6 22.4 55.7

Total liabilities

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UNITED BANK LIMITEDCOMPARITIVE BALANCE SHEET SHOWING

TREND % AGES FOR THE PERIOD ENDED Dec: 31, 2001-2004

Taking 2000 as base yearRupees in (ooo)

2004 2003 2002 2001ASSETSCash and bank balance 153.72 174.96 103.91 81.61Lending to financial Institutions

153.94 174.96 103.91 81.61

Investments 152.79 174.96 103.91 81.61Financing 153.17 174.96 103.91 81.61Other assets 152.36 174.96 103.91 81.61TOTAL ASSETS 153.13 174.96 103.91 81.61

LIABLITIES & OWNER EQUITYShare holder's equity 153.61 174.96 103.91 81.61Borrowing From Fin. Institutions

152.85 174.96 103.91 81.61

Revaluation reserve 154.10 174.96 103.91 81.61Deposits & other A/c's 153.04 174.96 103.91 81.61Other liabilities 153.69 174.96 103.91 81.61TOTAL LIAB. & OWNER EQUITY

153.13 174.96 103.91 81.61

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UNITED BANK LIMITEDCOMPARATIVE BALANCE SHEET SHOWING

COMMON SIZE % AGES FOR THE PERIOD ENDED Dec: 31, 2000-2004

Rupees in (m)

2004 2003 2002 2001 2000ASSETSCash and bank balance 5.8 5.8 5.8 5.8 5.8Lending to financial Institutions

8.1 8.1 8.1 8.1 8.1

Investments 18.7 18.7 18.7 18.7 18.7Financing 59.8 59.8 59.8 59.8 59.8Other assets 7.6 7.6 7.6 7.6 7.6TOTAL ASSETS 100 % 100 % 100 % 100 % 100

LIABLITIES & OWNER EQUITYShare holder's equity 11.2 11.2 11.2 11.2 11.2Borrowing From Fin. Institutions

14.6 14.6 14.6 14.6 14.6

Revaluation reserve 3.1 3.1 3.1 3.1 3.1Deposits & other A/c's 67.0 67 67 67 67Other liabilities 4.1 4.1 4.1 4.1 4.1TOTAL LIAB. & OWNER EQUITY

100 100 100 100 100

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Chapter 3

UNITED BANK LIMITEDCOMPARATIVE INCOME STATEMENT

FOR THE PERIOD ENDED DEC,31, 2002-2005

2005 2004 2003 2002Net markup/interest income after provision

5497554 7162247 6493858 4901027

Non markup/interest income

1918244 4406224 4544112 3272119

Total Income 74157958 11568471 11037970 8173146

Non markup/interest expensesAdministrative expenses 3610291 6702709 6153913 5390233Other provision/write offs 191405 34422 551840 27353Other charges 2704 10456 5501 24252Total Non markup/ interest expenses

3804400 6678743 6711254 5441838

Extraordinary items - - - -Profit before tax 361138 4889728 4326716 2731308Tax 1526612 1188184 1691098 1316992Profit-after Tax/net income

2084786 3701544 2635618 1414316

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UNITED BANK LIMITEDCOMPARATIVE INCOME STATEMENT

INCRESE/DECREASE IN AMOUNT FOR THE MPERIOD ENDED DEC,31, 2002-2005

2005 2004 2003

Net markup/interest income after provision

596.527 2261220 6493858

Non markup/interest income

1353875 1134105 1271993

Total Income 757348 3395325 2864824

Non markup/interest expensesAdministrative expenses 1779942 1312476 5614890Other provision/write offs 164052 7069 524487 Other charges 2704 10456 5501Total Non markup/ interest expenses

1637438 1236905 1269416

Extraordinary items - - -Profit before tax 880090 2158420 1595408Tax 209620 128808 374106Profit-after Tax/net income

670470 2287228 1221302

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UNITED BANK LIMITED

INCOME STATEMENT SHOWING TREND % AGE

FOR THE PERIOD ENDED Dec: 31, 2002-2005

2005 2004 2003Net markup/interest income after provision

112.17 % 146.14 % 132.5 %

Non markup/interest income

58.6 134.7 138.9

Total Income 90.73 134.7 138.9

Non markup/interest expensesAdministrative expenses

66.9 % 124.3 % 114.2%

Other provision/write offs 699.8 125.8 2017.4Other charges 11.15 43.12 22.68Total Non markup/ interest expenses

3804400 6678743 6711254

Extraordinary items - - -Profit before tax 132.2 % 179.0 % 158.4 %Tax 115.9 90.2 128.4Profit-after Tax/net income

147.4 % 261.7 % 186.9 %

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UNITED BANK LIMITED

COMPARATIVE INCOME STATEMENT SHOWING COMMON SIZE % AGES

FOR THE PERIOD ENDED Dec: 31, 2002-2005

Rupees in (m)2005 2004 2003 2002

Net markup/interest income after provision

74.13 % 61.9 % 58.8 % 60.0 %

Non markup/interest income

25.9 38.1 41.2 40.0

Total Income 100 % 100 % 100 % 100 %

Non markup/interest expensesAdministrative expenses

48.68 % 57.9 % 55.8 % 65.95 %

Other provision/write offs 25.8 .3 4.99 .33Other charges .036 .09 .04 0.3Total Non markup/ interest expenses

5130 57.7 60.8 66.6

Extraordinary items - - - -Profit before tax 48.7 % 42.3 % 39.3 % 33.4 %Tax 20.6 10.3 15.3 16.1Profit-after Tax/net income

28.1 % 31.9 % 23.9 % 17.3%

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Chapter 6

RATIO ANALYSIS

The term ratio means a numerical relationship between items or group of items

and is determined simply by dividing one item in relationship by the other.

In this chapter only such ratios will be taken into consideration, which help in

analysing and interpreting the current financial position of the industry. The analysis of

current financial are beneficial both for owners and creditors particularly short term

creditors.

A business has strong financial position if it is able:

1. To meet the claims of short-term creditors.

2. To meet current interest and dividend requirements.

3. To maintain sufficient working capital for effective normal position.

4. To utilize working capital efficiently.

5. To maintain favorable credit rating.

A. Current Position Analysis:

Following are the ratios, which are used in analyzing the current financial position

such as:

1. WORKING CAPITAL .

Working capital is the excess of current assets over current liabilities. In other

words working capital is the amount of current asset after deducting the current liabilities

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represent a margin of safety that is a claim of protection for the current creditors. Larger

the amount of working capital the position would be satisfactory to meet current debts,

fixed investment and absorb operating loses while the inadequacy of working capital is

harmful for the operation of business as well as the policy of the firm . It is computed by

following formula:

Net Working Capital = Current Assets - Current Liabilities.

Rupees In (m)

Year 2002 2003 2004 2005

Current Assets (a) 15649561 17274461 23844435 25845450

Current Liabilities (b) 1600964760 188047412 234067911 274577345

Working Capital (a-b) (1585285199) (170772951) (210223476) (248731895)

2 . CURRENT RATIO OR WORKING CAPITAL RATIO.

Current Ratio is use to measure current liquidity position. It is computed by following

formula.

= Total current assets/Total current liabilities

Rupees in (m)

Year 2002 2003 2004 2005

Current Assets (a) 15649561` 17274461 2384435 25845450

Current Liabilities (b) 1600964760 188047412 234067911 274577345

Current Ratio (a/b) .009 0.092 0.01 0.09

3. WORKING CAPITAL TURNOVER

It is computed to know the utilization of working capital during the period under analysis.

It is calculated by following formula:

Working Capital Turnover = Net Income

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Net Working Capital

Rupees in (m)

Year 2003 2004 2005

Net Income(a)2635618 3701544 2084786

Working Capital (b) (170772951) (210223476) (248731895)

W.C. Turnover (a/b) 1.54 1.76 0.08

I

4. RELATIONSHIP OF CURRENT LIABILITIES TO TOTAL

LIABILITIES.

This relationship shows the current maturity of obligation. It enables the creditor to get

information about three participation in the business. It is computed by dividing the

current liability by total liabilities and multiplied by 100 as shown below:

5.

RELATIONSHIP OF CURRENT ASSET TO TOTAL ASSETS.

This relationship will indicate the percentage of investment in current assets. it is

computed by divisions current assets by total asserts.

Rupees in (m)

Year 2003 2004 2005

Current Assets (a) 17274461 23844435 25845450

Total Assets (b) 216924418 272612663 319262553

Relationship of C.A toT. A 7.96 8.75 8.09

Year 2003 2004 2005

Current Liabilities (a) 188047412 234067911 274577345

Total Liabilities (b) 216924418 272612663 319262553

Relationship of C.L to T.L

(a/b)*10086.0 86.0 86.0

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(a/b)*100

B. Stability Analysis:

Generally short term creditor are interested in the current financial position of the

business whereas long term creditors and stockholders are much concerned with the long

term financial position of the company.

The long-term financial position is analysed to get the answer of the following

question such as:

1. Whether the borrowed funds and owners equity is appropriate and profitable.

2. Whether there exist a proper balance of investment in each group of assets.

3. Is the investment in operating assets commensurate with current sales prospective

sale volume and the net income.

4. Whether the long term financial strength is improving or not.

In order to give answer to the questions above we pursue the following ratios.

1. RATIO OF OWNERS EQUITY TO TOTAL ASSETS.

This ratio expresses the amount of total investment in the assets that has been

financed by shareholders. It is calculated by the following formulae.

Ratio of Owners Equity to Total Assets = Owners Equity X 100

Total Assets

Rupees in (m)

Year 2003 2004 2005

Stockholder’s Equity (a) 13884373 17364031 18381146

Total Assets (b) 216924418 272612633 319262553

Ratio (a/b)*100 6.40 6.40 5.76

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2. RATIO OF OWNERS EQUITY TO FIXED ASSETS

This ratio indicates the percentage of fixed assets financial by owners. It is

calculated by the following formulae.

Ratio of Owners Equity to Fixed Assets = Owner equity . X 100

Fixed Assets.

The ratio of owner equity of fixed assets of universal leather is shows below;

Rupees in (m)

Year 2003 2004 2005

Stockholder’s Equity (a) 13884373 17364031 18381146

Fixed Assets Net (b) 193880429 243527608 30050383

3. RATIO OF OWNER EQUITY TO TOTAL LIABILITIES

This ratio shows the owners interest in the business. It shows the position of the

shareholders as well as creditors. It is calculated by the following formulae.

Ratio of Owner Equity to Total Liabilities = Owner Equity X 100

Total Liabilities

Rupees in (m)

Year 2003 2004 2005

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Stockholder’s Equity (a) 13884373 17364031 18381146

Total Liabilities (b) 203040045 255248632 300881407

Ratio (a/b)*100 6.8 6.8 6.1

4. RATIO OF FIXED ASSETS TO LONG TERM LIABILITIES.

This ratio measure the security of the fixed obligations, when the long term liabilities are

secured by the fixed assets It is computed by the following formulae.

Ratio fixed assets to long term liabilities = Fixed Assets _____.X 100

Long Term Liabilities.

Rupees in (m)

Year 2003 2004 2005

Fixed Assets Net (a) 193880429 243527608 30050383

Long Term Liabilities (b) 14992633 21180721 26304062

Ratio (a/b)*100 1293.2 1149.8 114.2

5. RATIO OF TOTAL ASSETS TO TOTAL LIABILITIES

This ratio determine as to how much has been financed out of total assets and

hove much have been provided for financing out of owners equity. This ratio is computed

by following formulae.

Ratio of Total Assets to Total Liabilities =Total Assets . x 100

Total Liabilities

Rupees in (m)

Year 2003 2004 2005

Total Assets (a) 216924418 272612663 319262553

Total Liabilities (b) 216924418 272612663 319262553

Ratio (a/b)*100 100 100 100

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6. RATIO OF NET INCOME TO FIXED ASSETS.

This ratio measures the utilisation of fixed assets. It is computed by following formulae.

Ratio of sale to Fixed Assets = Net Income x 100

Fixed Assets

Rupees in (m)

Year 2002 2003 2004 2005

Net Income (a) 1414316 2635618 3701544 2084786

Fixed Assets Net (b) 162012736 193880429 243527608 30050383

Ratio (a/b)*100 .872 1.36 1.52 6.93

7. RATIO OF Net INCOME TO OWNER'S EQUITY.

This ratio expresses the turnover of the owner’s equity. It is calculated by the

following formulae.

Ratio of Sales to Owners Equity = Net Income X 100

Owner Equity

Rupees in (m)

Year 2003 2004 2005

Net Income (a) 2635618 3701544 2084786

Stockholder’s Equity (b)

Ratio (a/b)*100

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