Escolar Documentos
Profissional Documentos
Cultura Documentos
On
Analysis of financials of Oil and Gas
Company limited
Submitted to:
Burhan Shah
Submitted by:
Mu
mtaz Ali Hulio
MBA 3rd
Deportment of Administrative
Sciences
Quaid-i-Azam University
Islamabad
Acknowledgements
I wish to thank Almighty Allah the most beneficent and
merciful for enabling me to reach here and use His sources
to complete my project. I am also grateful to Burhan Shah
who gave me opportunity to enhance my capabilities. This
project is very helpful for me because, I have learnt a lot by
applying theoretical knowledge in practical field. In addition,
we wish to say thanks to our parents to support us and
encourage us at every step.
PURPOSE OF THE STUDY
This report is based on study carried out for the fulfillment of the subject
(AFS) requirement of the Master in business administration at the Quaid-i-
azam University Islamabad. The purpose of the study is to gather and analyze
the data with respects to the knowledge of classroom lectures to the real life
situations.
SCOPE OF THE STUDY
The scope of my work is focused on the financial conditions of OGDCL. This
report contains the ratio, vertical and horizontal analysis. During the project,
the observation was focused on financial trends, position, and condition of
OGDCL.
INTRODUCTION
Before the existence of OGDCL, exploration activities were carried out under
the label of Pakistan Petroleum Ltd (PPL) and Pakistan Oilfields Ltd (POL). In
1952, PPL discovered a giant gas field at Sui in Baluchistan. This discovery
generated massive interest in exploration and five major foreign oil
companies entered into concession agreements with the Government.
During the 1950s, these companies carried out widespread geological and
geophysical surveys and drilled 47 exploratory wells. As a result, a few small
gas fields were discovered. Despite these gas discoveries, exploration activity
after having reached its peak in mid-1950s, declined in the late fifties. Private
Companies whose main objective was to earn profit were not interested in
developing the gas discoveries especially when infrastructure and demand
for gas was non-existent. With exploration activity at its lowest ebb several
foreign exploration contracting companies terminated their operation and
either reduced or relinquished land holdings in 1961.
Establishment of OGDC
As an instrument of policy in the oil and gas sector, the Corporation followed
the Government instructions in matters of exploration and development. The
day to day management was however, vested in a five-member Board of
Directors appointed by the Government. In the initial stages the financial
resources were arranged by the GOP as the OGDC lacked the ways and
means to raise the risk capital. The first 10 to 15 years were devoted to
development of manpower and building of infrastructure to undertake much
larger exploration programmes. Later, in July 1989, as the company
progressed as a result of major oil and gas discoveries, the Government off-
loaded the Company from the Federal Budget and allowed it to manage its
activities with self generated funds. The year 1989-90 was the company's
first year of self-financing. Today, OGDCL is the largest Exploration and
Production Company in Pakistan, listed on all three exchanges of the country as well
as the London Stock Exchange.
Initial Successes:
VISION STATEMENT
MISSION STATEMENT
CORE VALUES:
• Merit
• Integrity
• Teamwork safety
• Dedication
• Innovation
GOALS:
FINANCIAL GOALS:
• Motivate our work force, and enhance their technical, managerial and
business skills through modern HR practices
CUSTMERS GOALS:
Liquidity ratios:
Liquidity reflects the ability of company to meet its short term obligations
using assets that are most readily converted into the cash. Assets that may
be converted into cash in a short period of time are referred as liquid assets
that are listed in financial assets as current assets. Current assets are often
referred as a working capital because these assets represent resources
needed for the day to day operations of the company’s long term, capital
investments. Current assets are used to satisfy short term obligations. The
amount by which current assets exceed current liabilities is referred as the
net working capital.
16
14
12
10
Acid Test Ratio
8
Current Ratio
6
4
2
0
2005 2006 2007 2008 2009
Current ratio has improved last year as the traditional value of the current
ratio is 2. In 2008 the current ratio of OGDCL was 3.72 last year in 2009 it
improved to 4.08The current ratio of the OGDCL has remained greater
then 2 during the 5 years, which bears the testimony of the better
liquidity position of the company. As if we compare current ratios of
OGDCL from 2006 to 2009 then
A/R turnover:
Inventory turnover:
600
500
400
A/R Turnover
300 Inventory Turn Over
200
100
0
2005 2006 2007 2008 2009
160
140
120
100
80 A/R turn over in Days
60 Inventory turn over in days
40
20
0
2005 2006 2007 2008 2009
Debt ratio
3.5
3
2.5 Debt Ratio
2
Debt equity Ratio
1.5
1 Debt to Tangible Net
0.5 Worth
0
2005 2006 2007 2008 2009
Profitability ratios
Ratio 2005 2006 2007 2008 2009