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Shezan Company Of Pakistan

Balance Sheet
As on Dec 31,…….
Rupees in thousand
2014 2015 2016
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 6 847,625 1,199,334 1,187,011

Long term investments 7 1,830 2,358 2,121

Long term deposits and prepayments 8 4,342 3,561 4,253


853,797 1,205,253 1,193,385

CURRENT ASSETS
Stores and spares 9 46,458 57,967 66,718

Stock in trade 10 1,147,773 1,453,506 1,238,081

Trade debts 11 323,208 305,770 269,494

Loans and advances 12 34,968 27,062 75,312

Trade deposits and short term prepayments 13 19,258 15,798 15,131

Interest accrued 14 516 292 268

Income tax recoverable 108,348 206,677 306,463

Cash and bank balances 15 153,416 143,255 102,906


1,833,945 2,210,327 2,074,373

TOTAL ASSETS 2,687,742 3,415,580 3,267,758

Shezan Company Of Pakistan


Balance Sheet
As on Dec 31,…….
2014 2015 2016
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Share capital 16 72,600 79,860 79,860

Reserves 17 1,104,315 1,254,843 1,454,606

Unappropriated profi 328,341 393,459 299,899

TOTAL EQUITY 1,505,256 1,728,162 1,834,365

NON-CURRENT LIABILITIES
Long term loan - secured 18 210,000 90,000

Deferred taxation 19 68,522 74,498 69,374


68,522 284,498 159,374

CURRENT LIABILITIES
Trade and other payables 20 704,928 778,894 668,625

Interest accrued on borrowings 5,573 10,677 1,454

Current portion of long term loan 18 90,000 120,000


Short term borrowings - secured 21 164,530 280,000 226,277

Provision for taxation 238,933 243,349 257,663


1,113,964 1,402,920 1,274,019

TOTAL LIABILITIES 1,182,486 1,687,418 1,433,393

CONTINGENCIES AND COMMITMENTS 22


TOTAL EQUITY AND LIABILITIES 2,687,742 3,415,580 3,267,758

Shezan Company Of Pakistan


Income Statement
For the period ended Dec 31,….
Rupees in thousand
2014 2015 2016
Sales - net 23 6,760,527 6,817,635 6,816,540
Cost of sales 24 4,735,740 4,877,580 4,931,776
Gross profit 2,024,787 1,940,055 1,884,764
Distribution cost 25 1,272,778 1,245,656 1,249,860
Administrative expenses 26 214,310 217,741 244,291
Other operating expenses 27 162,188 161,177 186,818
Other income 28 -53,592 -59,796 -51,859
1,595,684 1,564,778 1,629,110
Operating profit 429,103 375,277 255,654
Finance cost 29 28,571 60,967 52,178
Profit before taxation 400,532 314,310 203,476
Taxation 30 141,000 19,332 9,190
Net profit for the year 259,532 294,978 194,286

Liquidity Ratio
1: Current Ratio

Current Ratio = Current Assets / Current Liabilities

2014 (000) 2015 (000) 2016 (000)


Current assets 1,833,945 2,210,327 2,074,373

Current liabilities 1,113,964 1,402,920 1,274,019


Current ratio 1.64 1.57 1.62
Interpretation
A Measure of liquidity calculated by dividing the firm`s current assets by current liabilities.
If company have 1 rupees current liabilities than in 2014 company have 1.64 rupees
available for paying its current liabilities at any time. If company have 1 rupees current
liabilities than in 2015 company have 1.57 rupees available for paying its current liabilities
at any time. If company have 1 rupees current liabilities than in 2016 company have
1.62rupees available for paying its current liabilities at any time. So 2014 is the best year
to paying current liabilities.

2: Quick Ratio
Quick ratio = Current Assets - Inventory / Current Liabilities

2014 (000) 2015 (000) 2016 (000)


Current assets 1,833,945 2,210,327 2,074,373
Inventory 1,147,773 1,453,506 1,238,081
Sub total 686,172 756,821 836,292
Current liabilities 1,113,964 1,402,920 1,274,019
Quick ratio 0.61 0.53 0.65

Interpretation
A Measure of liquidity calculated by dividing the firm`s current assets minus inventory by
current liabilities. If company have 1 rupees current liabilities than in 2014 company
have0.61 rupees available for paying its current liabilities at any time. If company have 1
rupees current liabilities than in 2015 company have0.53 rupees available for paying its
current liabilities at any time. If company have 1 rupees current liabilities than in 2016
company have0.65 rupees available for paying its current liabilities at any time.
So 2016 is the best year to pay the current liabilities.

Activity Ratio
1: Inventory Turnover Ratio
Inventory Turnover Ratio = Cost of goods sold / Inventory

2014 (000) 2015 (000) 2016 (000)


C.G.S 4,735,740 4,877,580 4,931,776
Inventory 1,147,773 1,453,506 1,238,081
Inventory
4.12 3.35 3.98
Turnover Ratio
Interpretation
Measure the activity or liquidity, of a firm inventory. In 2014 liquidity of the inventory is
4.12 and in 2015 liquidity of the inventory is 3.35 and In 2016 liquidity of the inventory is
3.98. means inventory complete his inventory cycle almost 4 times in 2014 and almost
done 3 times in 2015 and almost done 4 times in 2016. More times inventory cycle
complete of the company means company is in good condition.

2: Average age of Inventory


Average age of inventory = 365 / Inventory Turnover

2014 (000) 2015 (000) 2016 (000)


Days 365 365 365
Inventory
4.126 3.355 3.983
Turnover
Average age of
88 108 91
inventory

Interpretation
Average age of inventory means that how much days are required to complete a one
inventory cycle? In 2014 88 days required to complete one inventory cycle and in 2015
108 days required to complete one inventory cycle and in 2016 91 days required to
complete one inventory cycle. Less days means more favorable for the company. 2014 is
best rather than others.

3: Average Collection Period


Average collection period = Account receivable / Annual sale per day

Annual sale per day = Annual sale / 365

2014 (000) 2015 (000) 2016 (000)


Account
143,316 233,739 381,775
Receivable
Annual sale 6,760,527 6,817,635 6,816,540
Days 365 365 365
Sub total 18,522 18,678 18,675
Average Collection
7 12 20
Period

Interpretation
The average amount of time needed to collected account receivable. In 2014 company
average period of A/R is 7 days in 2015 company average period of A/R is 12 days and
2016 company average period of A/R is 20 days . So 2014 is the best collection period for
the year.
4: Average Payment Period
A.p.p = Account Payable / Annual Purchases per day
Annual Purchases per day = Annual Purchase / 365

2014 (000) 2015 (000) 2016 (000)


Account payable 704,928 778,894 668,625
Annual purchases 1,147,773 1,453,506 1,238,081
Days 365 365 365
Sub total 3144.583562 3982.208219 3392.00274
Average Payment
224 195 197
Period

Interpretation
The average amount of time needed to pay account payable. In 2014 company average
period of A/p is 224 days in 2015 company average period of A/p is 195 days and 2016
company average period of A/R is 197 days. So the best payment period 2015 because
liabilities of the company paid with in 195days.

5: Total Assets Turnover


Total Assets Turnover = Sales / Total Assets

2014 (000) 2015 (000) 2016 (000)


Sales 6,760,527 6,817,635 6,816,540
Total Assets 2,687,742 3,415,580 3,267,758

Total Assets
2.51 1.99 2.08
Turnover

Interpretation
Indicates the efficiency with which the firm uses its assets to generate sale. In 2014
company used assets 2.51 to generate sale and In 2015 company used assets 1.99 to
generate sale In 2016 company used assets 2.08 to generate sale. So company increase
the sale in 2016 and get the more and more benefit to use of the assets.

Debt Ratios
1: Debt ratio
Debt ratio = Total Liabilities / Total Assets
2014 (000) 2015 (000) 2016 (000)
Total Liabilities 1,182,486 1,687,418 1,433,393
Total Assets 2,687,742 3,415,580 3,267,758
Debt ratio 0.43 0.49 0.43

Interpretation
Measure the proportion of total assets financed by the firm’s creditors. In 2014 company
has 0.43 total assets to pay the liabilities and 2015 company has 0.49 total assets to pay
the liabilities and 2016 company has 0.43 total assets to pay the total liabilities.2015 is the
best year to pay the total liabilities.

2: Time Interest Earned Ratio


Time Interest Earned Ratio = EBIT / Interest

2014 (000) 2015 (000) 2016 (000)


EBIT/O.P 429,103 375,277 255,654
Interest 0 0 0
TIE ratio 429,103 375,277 255,654

Interpretation
Measure the firm`s ability to make contractual interest payments sometimes
called the interest coverage ratio. In each year company earned interest 0 percent.

Profitability Ratio
1: Gross Profit Margin
Gross Profit Margin = Gross Profit / Sales * 100
Gross Profit Margin = Sales – CGS / Sales * 100

2014 2015 2016


Gross Profit 2,024,787 1,940,055 1,884,764

Sales 6,760,527 6,817,635 6,816,540

G.P Margin 29.95% 28.46% 27.65%


Interpretation
Measure the percentage of each sale rupee remaining after the firm has paid for its
goods. In 2014 company make gross profit 29.95 per 100.Next year company again make
28.46 and the last year company make gross profit 27.65 at 100 rupee.2014 is the best
year to get the gross profit margin as compare other years.
2: Operating Profit Margin
Operating Profit Margin = Operating Profit / Sales * 100
Operating Profit Margin = EBIT / Sales * 100

2014 2015 2016


Operation Profit 429,103 375,277 255,654
Sales 6,760,527 6,817,635 6,816,540
O.P Margin 6.35% 5.50% 3.75%

Interpretation
Measure the percentage of each sale rupee remaining after all cost and expenses other
than interest, taxes and preferred stock dividends are deducted, the pure profit earned
on each sales rupee. In 2014 op margin is 6.35 if 100 rupees sales by the company
remaining part of the 100 rupees contains interest, taxes and preferred stock dividends
same in 2015 op margin is 5.50 if 100 rupees sales by the company remaining part of the
100 rupees contains interest, taxes and preferred stock dividend in 2016 op margin is 3.75
if 100 rupees sales by the company remaining part of the 100 rupees contains interest,
taxes and preferred stock dividends. 2014 is best year as compared to others.

3: Net Profit Margin


Net Profit Margin = Net Profit / Sales * 100
Net Profit Margin = Earnings available for common stock holders / sales * 100

2014 2015 2016


Net Profit 259,532 294,978 194,286
Sales 6,760,527 6,817,635 6,816,540
N.P Margin 3.84% 4.33% 2.85%

Interpretation
Measure the percentage of each sale rupee remaining after all cost and expenses,
including interest taxes, and preferred stock dividend, have been deducted from the
sales.in 2014 N.p margin is 3.84 rupees on the sale of 100 rupees remaining part of 100
rupees includes cgs+taxes+interests and preferred stock dividend. In 2015 N.p margin is
4.33 rupees on the sale of 100 rupees remaining part of 100 rupees includes
cgs+taxes+interests and preferred stock dividend. In 2016 N.p margin is 2.85 rupees on
the sale of 100 rupees remaining part of 100 rupees includes cgs+taxes+interests and
preferred stock dividend. The best year is 2014 because in this year higher n.p margin
earns by the company.
4: Earnings per Share
Earnings per Share = Earnings available for common stock holders / No. of outstanding
Shares of common stock

2014 2015 2016


Earnings Per Share 35.75 36.94 24.33

Interpretation
Earnings per share is generally of interested to present or prospective stock holder and
management.in 2014 company earns per share is 35.75 rupees and in 2015 company
earns 36.94 and in 2016 company earns 24.33 rupees on per share. In 2015 is best
earnings on per share by the company. And it`s more favorable for the company.

5: Dividend per Share


Dividend per Share = Total Dividend / No. of outstanding Shares of common stock

2014 2015 2016


Dividend Per
10 11 12
Share

Interpretation
Dividend per share shows that company how much paid to their shareholders dividend on
per share. In 2014 company dividend rupees 10 on per share and in 2015 company dividend
rupees 11 on per share and in 2016 company dividend rupees 12 on per share and 2016 is
best year because dividend is more paid in 2016 which is satisfy to their investors and give
them chance to enhance their investment in the company through purchasing their more
stocks.

6: Return on Assets
Return on Assets = Earnings available for common stock holders / Total Assets * 100

2014 2015 2016

Earnings
available for
259,532 294,978 194,286
common stock
holders
Total Assets 2,687,742 3,415,580 3,267,758

Return on Assets 9.66% 8.64% 5.95%


Interpretation
Measure the overall effectiveness of management in generating profit with its available
assets also called the return on investment. In 2014 company managers used their assets
and earns 9.66 rupees on 100 rupees remaining includes cgs + taxes + interests + common
stock dividend. Same in 2015 8.64 earns by company by using 100 rupees assets in 2016
company earns 5.94 rupees by using 100 rupees assets which is decreased year to year
which is bad for the company.

7: Return on Equity

Return on Equity = Earnings available for common stock holders / Total Equity * 100

2014 2015 2016

Earnings
available for
259,532 294,978 194,286
common stock
holders
Total Equity 1,505,256 1,728,162 1,834,365

Return on Equity 17.24 17.06 10.59

Interpretation

Return on equity means that company earnings on by using its total equity. Company
more return on equity means company more favorable. In 2014 17.24 rupees earns by
using of 100 rupees total equity of the company. In 2015 17.06 rupees earns by using of
100 rupees total equity of the company. In 2016 10.59 rupees earns by using of 100
rupees total equity of the company. 2014 is best year as compared to others.

8: Return on Common Stock Equity

Return on Common Stock Equity = Earnings available for common stock holders / Total
common equity
2014 2015 2016

Earnings
available for
259,532 294,978 194,286
common stock
holders
Total common
72,600 79,860 79,860
equity
Return on
Common Stock 357.48% 369.37% 243.28%
Equity

Interpretation
Return on total common stock equity means that company earnings on by using its total
common stock equity. Company more return on total common stock equity means company
more favorable. In 2014 357 rupees earns by using of 1000 rupees total common stock
equity of the company. In 2015 369 rupees earns by using of 1000 rupees total common
stock equity of the company. In 2016 243 rupees earns by using of 1000 rupees total
common stock equity of the company. 2015 is best year as compared to others.