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 7th
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/-
 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.
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.
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

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
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.
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.
 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.
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
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.
 Chapter 2

UNITED BANK LIMITED

COMPARITIVE 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 258456450

Balance with other banks 9985788 11386434 17699334 17187250
Lending to financial 3627557 19050791 16262504 17826109
Institutions
Investments 69244328 56516760 54953 728 74425667
Advances 72808106 160170415 146249184 169560882
Other assets 3636065 3001793 4393852 6041671
Operating fixed assets 2710892 3754236 3969006 4170585
Taxation recoverable 314712 283171 45728 74956
Deferred tax asset-net 5026457 5486357 5194892 4129977
Total assets 183003466 216924418 272612663 319262553

TOTAL LIAB. & OWNER .

EQUITY

Bills payable 1832981 2975910 3811284 5446989

Borrowing From Fin. 5347349 7710375 11975684 14124220
Institutions
Deposits & other A/c's 158263495 185071502 230256627 269130356
Sub – ordinted loans - - - -
Liabilities against assets 81548 39995 288 -
subject to finance lese
Other liabilities 544441 5707204 3513569 5923127
Deferred liabilities 861935 1535059 2191180 2257099
Share capital 5180000 518000 518000 518000
Reserves 4243352 4678317 5915928 6185214
Unappropriated profit 797100 218900 3274439 4212342
Surplus on revaluation of 2445465 3807066 2993664 2803590
asset
Total liabilities and owner 183003466 216924418 272612663 31926553
eqvity

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 2005
ASSETS

Cash and bank balance 1624900 8194874 10195889

Balance with other banks 1400646 7713546 7201462
Lending to financial 15423234 12634947 1418552
Institutions
Investments 12727568 14290600 5181339
Advances 87362309 73441078 96752776
Other assets 634272 757787 2405612
Operating fixed assets 1043344 1258114 1459693
Taxation recoverable 31541 268984 239756
Deferred tax asset-net 459900 168435 896480
Total assets 93920952 78239197 123479087

TOTAL LIAB. & OWNER .

EQUITY

Bills payable 1142929 1978303 5264008

Borrowing From Fin. 2363026 6628335 8776871
Institutions
Deposits & other A/c's 26808007 71993132 110866861
Sub – ordinted loans - 350010000 -
Liabilities against assets subject 41553 81260 378686
to finance lese
Other liabilities 162763 2030872
Deferred liabilities 673124 1329245 1395164
Share capital 0 0 0
Reserves 4324965 1672576 1941862
Unappropriated profit 578110 2477339 3415242
Surplus on revaluation of 1361601 548199 358125
assets
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 2003
ASSETS

Cash and bank balance 65.15 % 52.36 % 10.38%

Balance with other banks 72.12 77.25 14.03
Lending to financial 391.4 348.30 425.17
Institutions
Investments 7.48 20.64 17.48
Advances 132.4 100.87 119.99
Other assets 66.16 20.84 17.44
Operating fixed assets 53.85 46.41 38.48
Taxation recoverable 76.18 85.47 10.02
Deferred tax asset-net 17.84 3.35 9.15
Total assets

TOTAL LIAB. & OWNER .

EQUITY

Bills payable 287.2 107.9 62.4

Borrowing From Fin. 164.1 123.9 44.2
Institutions
Deposits & other A/c's 70.1 45.5 16.9
Sub – ordinted loans - - -
Liabilities against assets subject 50.9 99.6 -
to finance lese
Other liabilities 6.8 36.6 2.94
Deferred liabilities 161.9 154.2 78.1
Share capital 0 0 0
Reserves 45.8 39.4 10.3
Unappropriated profit 428.5 310.8 72.5
Surplus on revaluation of 14.6 22.4 55.7
assets
Total liabilities

UNITED BANK LIMITED

COMPARITIVE BALANCE SHEET SHOWING
TREND % AGES
FOR THE PERIOD ENDED Dec: 31, 2001-2004
Taking 2000 as base year
Rupees in (ooo)
2004 2003 2002 2001
ASSETS
Cash and bank balance 153.72 174.96 103.91 81.61
Lending to financial 153.94 174.96 103.91 81.61
Institutions
Investments 152.79 174.96 103.91 81.61
Financing 153.17 174.96 103.91 81.61
Other assets 152.36 174.96 103.91 81.61
TOTAL ASSETS 153.13 174.96 103.91 81.61

LIABLITIES & OWNER

EQUITY
Share holder's equity 153.61 174.96 103.91 81.61
Borrowing From Fin. 152.85 174.96 103.91 81.61
Institutions
Revaluation reserve 154.10 174.96 103.91 81.61
Deposits & other A/c's 153.04 174.96 103.91 81.61
Other liabilities 153.69 174.96 103.91 81.61
TOTAL LIAB. & OWNER 153.13 174.96 103.91 81.61
EQUITY
 UNITED BANK LIMITED
COMPARATIVE BALANCE SHEET SHOWING
COMMON SIZE % AGES
FOR THE PERIOD ENDED Dec: 31, 2000-2004

Rupees in (m)
2004 2003 2002 2001 2000
ASSETS
Cash and bank balance 5.8 5.8 5.8 5.8 5.8
Lending to financial 8.1 8.1 8.1 8.1 8.1
Institutions
Investments 18.7 18.7 18.7 18.7 18.7
Financing 59.8 59.8 59.8 59.8 59.8
Other assets 7.6 7.6 7.6 7.6 7.6
TOTAL ASSETS 100 % 100 % 100 % 100 % 100

LIABLITIES & OWNER

EQUITY
Share holder's equity 11.2 11.2 11.2 11.2 11.2
Borrowing From Fin. 14.6 14.6 14.6 14.6 14.6
Institutions
Revaluation reserve 3.1 3.1 3.1 3.1 3.1
Deposits & other A/c's 67.0 67 67 67 67
Other liabilities 4.1 4.1 4.1 4.1 4.1
TOTAL LIAB. & OWNER 100 100 100 100 100
EQUITY
Chapter 3
UNITED BANK LIMITED
COMPARATIVE INCOME STATEMENT
FOR THE PERIOD ENDED DEC,31, 2002-2005

2005 2004 2003 2002

Net markup/interest income 5497554 7162247 6493858 4901027
after provision
Non markup/interest income 1918244 4406224 4544112 3272119
Total Income 74157958 11568471 11037970 8173146

Non markup/interest
expenses
Administrative expenses 3610291 6702709 6153913 5390233
Other provision/write offs 191405 34422 551840 27353
Other charges 2704 10456 5501 24252
Total Non markup/ interest 3804400 6678743 6711254 5441838
expenses
Extraordinary items - - - -
Profit before tax 361138 4889728 4326716 2731308
Tax 1526612 1188184 1691098 1316992
Profit-after Tax/net income 2084786 3701544 2635618 1414316
 UNITED BANK LIMITED
COMPARATIVE INCOME STATEMENT
INCRESE/DECREASE IN AMOUNT
FOR THE MPERIOD ENDED DEC,31, 2002-2005

2005 2004 2003

Net markup/interest income 596.527 2261220 6493858
after provision
Non markup/interest income 1353875 1134105 1271993
Total Income 757348 3395325 2864824

Non markup/interest
expenses
Administrative expenses 1779942 1312476 5614890
Other provision/write offs 164052 7069 524487
Other charges 2704 10456 5501
Total Non markup/ interest 1637438 1236905 1269416
expenses
Extraordinary items - - -
Profit before tax 880090 2158420 1595408
Tax 209620 128808 374106
Profit-after Tax/net income 670470 2287228 1221302
 UNITED BANK LIMITED
INCOME STATEMENT SHOWING
TREND % AGE
FOR THE PERIOD ENDED Dec: 31, 2002-2005

2005 2004 2003

Net markup/interest income 112.17 % 146.14 % 132.5 %
after provision
Non markup/interest income 58.6 134.7 138.9
Total Income 90.73 134.7 138.9

Non markup/interest
expenses
Administrative expenses 66.9 % 124.3 % 114.2%
Other provision/write offs 699.8 125.8 2017.4
Other charges 11.15 43.12 22.68
Total Non markup/ interest 3804400 6678743 6711254
expenses
Extraordinary items - - -
Profit before tax 132.2 % 179.0 % 158.4 %
Tax 115.9 90.2 128.4
Profit-after Tax/net income 147.4 % 261.7 % 186.9 %
 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 74.13 % 61.9 % 58.8 % 60.0 %
after provision
Non markup/interest income 25.9 38.1 41.2 40.0
Total Income 100 % 100 % 100 % 100 %

Non markup/interest
expenses
Administrative expenses 48.68 % 57.9 % 55.8 % 65.95 %
Other provision/write offs 25.8 .3 4.99 .33
Other charges .036 .09 .04 0.3
Total Non markup/ interest 5130 57.7 60.8 66.6
expenses
Extraordinary items - - - -
Profit before tax 48.7 % 42.3 % 39.3 % 33.4 %
Tax 20.6 10.3 15.3 16.1
Profit-after Tax/net income 28.1 % 31.9 % 23.9 % 17.3%
 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
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
Net Working Capital

Rupees in (m)
Year 2003 2004 2005
 2635618 3701544 2084786
Net Income(a)
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:

Year 2003 2004 2005

Current Liabilities (a) 188047412 234067911 274577345
Total Liabilities (b) 216924418 272612663 319262553
Relationship of C.L to T.L
86.0 86.0 86.0
(a/b)*100

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
(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

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
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

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