Finance Project: Sir Usman Akmal

FINANCE PROJECT
 Submitted By:
Adnan Sami butt
765
Usman Fazal 753
Ibrahim 771
 Submitted To:
Sir Usman Akmal
JUNE 1, 2017 UNIVERSITY OF EDUCATION TOWNSHIP

The United Insurance Company of Pakistan LTD.
Vision and Mission:
The United Insurance Company of Pakistan Limited was established in the year 1959 on the
Twentieth day of October. It was operational in Pakistan including East Pakistan (now
Bangladesh). UIC operating more than 100 branches all over Pakistan. UIC doing General
business including Group Health Insurance, Travel Insurance (Health), Travel Bonds &
Guarantees, Livestock and Crop Insurance.
Below is the ratio analysis of The United Insurance Company of Pakistan Ltd. for the year 2014-
2015.
Ratio Analysis of company report (2014/15)
Short term solvency ratios/liquidity ratios
 Current Ratio:
Current Ratio = Current assets = 2850938938= 5.75

(2014) Current liabilities 495762635
Current Ratio = Current assets = 2720147434 = 10.41
Analysis:
The current ratio of the company has increased in 2014 as compared to 2015 with the
change of 4.66 Point. The current ratio of the company shows that liquidity position of the
company is very good but the company wants to increase its investment because of excess liquid
cash.
 Cash Ratio:
Cash Ratio = Cash = 593770592 = 1.197

Cash Ratio = Cash = 400065630 = 1.5311

Analysis:
The cash ratio of the company has increased in 2015 as compared to 2014 because in
2015 company has more cash and bank reserves the total assets of the company is increased
overall.
Long Term Solvency Ratios/Leverage Ratios
 Total Debt Ratio:
Total Debt Ratio = Total Assets-Total Equity = 4820161562-1645022974 = 0.65

(2014) Total Assets 4820161562
Total Debt Ratio = Total Assets-Total Equity = 5058714633-2245009754= 0.53

(2015) Total Assets 5058714633
Analysis:
The total debt ratio of the company has decreased in 2015 as compared to 2014 so it can
be infer that the company is more relaying on it own financing with comparison to last year so
now it has less pressure of creditors.
 Debt to Equity Ratio:
Debt to Equity Ratio = Total Debt = 3135040511 = 1.90

(2014) Total Equity 1645022974
Debt to Equity Ratio = Total Debt = 2774469224 = 1.23

(2015) Total Equity 2245009754
Analysis:
The debt to equity ratio of the company has decreased in 2015 as compared to 2014
which means that company is now more relaying on its equity so this shows that company is now
using its own money more efficiently that must effect the company’s profit earning or earning per
share ratio.
 Equity Multiplier:
Equity Multiplier = Total Assets = 4820161562 = 2.93

(2014) Total Equity 1645022974
Equity Multiplier = Total Assets = 5058714633 = 2.25

(2015) Total Equity 2245009754
Analysis:
The Equity Multiplier of the company has decreased in 2015 as compared to 2014.the
company has decreased it equity multiplier but was not able to manage it functions properly
therefore it is earning loss.
 Interest Coverage Ratio:

Interest Coverage Ratio = Earnings before interest & tax = 515611547 = 67.1
(2014) Interest 7675541
Interest Coverage Ratio = Earnings before interest & tax = 630915304 = 52.3
(2015) Interest 12055625
Analysis:
The Interest Coverage ratio of the company has decreased in 2015 as compared to 2014.
In 2015company’s profit before interest and tax is decreased so that they are not able to pay so
much as they before. The one cause of this decreased is increased in admin and general expense.
 Cash Coverage Ratio:
Cash Coverage Ratio = EBIT +Depreciation = 515611547+ 41333656 = 72.56

(2014) Interest 7675541
Cash Coverage Ratio = EBIT +Depreciation = 630915304 +35110621= 55.24 (2015)

Interest 12055625
Analysis:
The Cash Coverage ratio of the company has increased in 2015 as compared to 2014.the
reason for this increase is increase in cash ratio.
 Receivable Turnover Ratio:
Receivable Turnover Ratio = Sales = 1536703130 = 26.09times

(2014) Account receivable 58886671
Receivable Turnover Ratio = Sales = 2151783888 = 19.36 times

Days sales in Receivable = 365 = 18.85 days
(2015) Receivable T/o Ratio

Analysis:
The Receivable Turnover Ratio of the company has decreased in 2015 as compared to
2014 this is why the company debt to equity ratio is increased because increase in debts borrowing
and then increase in credit sale which is not a good thing for company because now company is
taking more time to recover its debts as compared previous year. Now outsiders are using
company’s finances not the company.
Macro Level Ratios
 Total Asset Turnover Ratio
Total Asset Turnover Ratio = Sales = 1536703130 = 0.31 times

(2014) Total Assets 4820161562

(2015) Total Assets 5058714633
Analysis:
Now assets are more battery used by the company. So that the turnover is increased. And sales are
increased as total assets.
 Capital intensity Ratio:
Capital intensity Ratio = Total Assets = 4820161562 = 3.13 times

(2014) Sales 1536703130

(2015) Sales 2151783888
Analysis:
The capital intensity ratio is decreased in 2015 so it signifies that now less assets are required to
generate the sale if one rupees.
Profitability Ratios
 Net Profit Margin:
Net Profit Margin = Net Profit = 460887143 = 0.299

(2014) Sales 1536703130
Net Profit Margin = Net Profit = 620025776= 0.288

(2015) Sales 2151783888
Analysis:
The net Profit Margin of the company has decreased in 2015 as compared to 2014
because admin expenses is increased and finance cost is also increased.
 Return on Assets:
Return on Assets = Net Profit = 460887143 = 0.095 or 9.5%

(2014) Total Assets 4820161562
Return on Assets = Net Profit = 620025776 = 0.122 or 12.2%

(2015) Total Assets 5058714633
Analysis:
The Return on Assets of the company has increased in 2015 as compared to 2014
because now they are using there assets efficiently and cost of finance is also decreased and they
have decreased the time for account receivable.
 Return on Equity:
Return on Equity = Net Profit = 620025776 = 0.276 or 27.6%

(2015) Total Equity 2245009754
Return on Equity = Net Profit = 460887143 = 0.280 or 28.0%

(2014) Total Equity 1645022974
Analysis:
The Return on Assets of the company has decreased in 2015 as compared to
2014.bacause finance cost is increased .debt to equity ratio is increased so the portion which is
borrowed for business is must be paid so that return on equity is decreased.
 Earning per share:
Earning per share = Net Profit = 620025776 = 4.81 RS

(2015) No. of shares outstanding 128800000
Earning per share (2014) = Net profit = 460887143 = 5.009 RS

Shares outstanding 92000000
Analysis
The return on equity is also effect on earning per share. Which decreases in 2015
.
 Book value per share:
Book value per share = Total Equity = 2245009754 = 17.43

Book value per share = total equity = 1645022974 = 17.88

(2014) No of shares outstanding 92000000
Analysis
This shows that the company book value is decreasing because the reserve kept by the
company is decreasing
United Insurance company
Index Analysis for Income statement
For the year 2015-2014
2015 2014 Index
Net sales 2151783888 1536703130 140.026
Net claims 742328636 419432375 176.9841
change in premium deficiency reserve 5261422 #DIV/0!
Management Expense 404891299 377599888 107.2276

Net commission 201284689 629073642 31.997
Underwriting result 798284689 629073642 126.8984
Add:
Investment income 60728726 63404022 95.78056
rental income 1392000 1392000 100
other income 21388587 31451605 68.00476
profit from window takaful operations 69794020 28455780 245.2719
Less:
Share loss from Associate 10992111 282459 3891.578
General and admin expense 248951918 237883043 104.6531
Finance charge on lease rentals 12055625 7675541 157.0655
Profit before tax 679588368 507936006 133.7941
provision for taxation 59562592 47084863 126.5005
Profit After tax 620025776 460887143 134.5288
Common Size Analysis of Balance sheet of the year 2014
Amount of total % of total

Particulars Amount assets assets
Non-Current Assets
Land freehold 140735600 4820161562 2.91972786
Buildings 117430664 4820161562 2.436239169
Furniture,Fixture,office and computer

equipment 106926813 4820161562 2.218324254
Motor vehicles 129412361 4820161562 2.684813763
Motor tracking devices 38867426 4820161562 0.806351105
capital work in progress 19134958 4820161562 0.396977524
computer software 0 4820161562 0
leased Motor vehicles 72699404 4820161562 1.508235835
Current assets
Premium Due but unpaid 449545585 4820161562 9.326359277
Amount due from other insurers 684203233 4820161562 14.19461203
Prepaid reinsurance premium ceded 565466498 4820161562 11.73127686
Reinsurance recoveries against claims 932418605 4820161562 19.34413594
deferred commission expense 129823217 4820161562 2.69333746
Accrued investment income 30595180 4820161562 0.634733496
Sundry receivables 58886671 4820161562 1.221674217
482016156
Total assets 2 4820161562 100
Share & Capital reserves
200000000
Authorized capital 0 4820161562 41.49238515
Paid-up share capital 920000000 4820161562 19.08649717

Retained earning 649907057 4820161562 13.48309696
Reserves 75115917 4820161562 1.558369279
164502297
Total Equity 4 4820161562 34.12796341
Current liabilities
Staff Retirement benefits 61339710 4820161562 1.272565436
Deferred tax liabilities 6878414 4820161562 0.142700901
Amount due to other insurers 370295656 4820161562 7.682224988
Accrued Expense 22503412 4820161562 0.466860119
Provision for taxation 38619506 4820161562 0.801207709
Other creditors and Accruals 64344061 4820161562 1.33489428
Total current liability 495762635 4820161562 10.2851871
482016156
Total liabilities 2 4820161562 100
Adamjee Insurance Company Limited (AICL)
Adamjee Insurance Company Limited (AICL) is a general insurance giant, incorporated as a

Public Limited Company on September 28, 1960. AICL, one of the leading insurance companies
in Pakistan, has a regional presence in United Arab Emirates (UAE) and maintains its standing
through an unwavering commitment to its corporate philosophy. AICL’s competitive
competency is achieved by combinations of voluminous assets, notable paid-up capital, sizable
reserves, a varied portfolio and consequently, remarkable growth rates. AICL is listed with all
three stock exchanges of Pakistan, establishing its credibility. The Company retains a strong
regional presence in the UAE (Dubai and Abu Dhabi).
It is providing the following service to their customers
 Fire and Property

 Marine Aviation and Transport
 Motor
 Miscellaneous Insurance
Current Ratio:
Current Ratio = Current assets = 11,247,600,000= 3.38

(2014) Current liabilities 3,318,761,000
Current Ratio = Current assets = 12,562,283,000 = 2.79

Analysis:
The current ratio of the company has increased in 2014 as compared to 2015 with the
change of 0.59 Point. The current ratio of the company shows that liquidity position of the
company is very good but the company wants to increase its assets because of excess liability.
Cash Ratio:
Cash Ratio = Cash = 2,876,630,000 = 0.866

Cash Ratio = Cash = 2,898,132,000 = 0.64

Analysis:
The cash ratio of the company has decreased in 2015 as compared to 2014 because in
2015 company has less cash and bank reserves the total assets of the company is decreased
overall.
Total Debt Ratio:
Total Debt Ratio = Total Assets-Total Equity = 28,832,011,000 -14,104,244,000 = 0.51

(2014) Total Assets 28,832,011
Total Debt Ratio = Total Assets-Total Equity = 32,255,979,000 -15,646,569,000 = 0.51

(2015) Total Assets 32,255,979,000
Analysis:
The total debt ratio of the company has same as in 2015 as compared to 2014 so there
will be no change in total debt ratio.
Debt to Equity Ratio:
Debt to Equity Ratio = Total Debt = 14,727,767,000= 1.04

(2014) Total Equity 14,104,244,000
Debt to Equity Ratio = Total Debt = 16,609,410,000 = 1.06

(2015) Total Equity 15,646,569,000
Analysis:
The debt to equity ratio of the company has slightly increased in 2015 as compared to
2014 which means that company is now less relaying on its equity so this shows that company is
slightly not using its own money more efficiently that must effect the company’s profit earning or
earning per share ratio.
Equity Multiplier:
Equity Multiplier = Total Assets = 28,832,011,000 = 2.04

(2014) Total Equity 14,104,244,000
Equity Multiplier = Total Assets = 32,255,979,000 = 2.06

(2015) Total Equity 15,646,569,000
Analysis:
The Equity Multiplier of the company has increased in 2015 as compared to 2014.the
company has increased it equity multiplier and able to manage it functions properly.
Receivable Turnover Ratio:

Receivable Turnover Ratio = Sales = 6,302,550,000 = 0.56 times
(2014) Account receivable 11,247,600,000
Receivable Turnover Ratio = Sales = 6,302,550,000 = 0.50 times

(2015) Account receivable 12,562,283,000
Days sales in Receivable = 365 = 730 days

Days sales in Receivable = 365 = 651 days

Analysis:
The Receivable Turnover Ratio of the company has increased in 2015 as compared to
2014 this is why the company debt to equity ratio is decreased because decrease in debts borrowing
and then decrease in credit sale which is not a good thing for company because now company is
Macro Level Ratios
Total Asset Turnover Ratio
Total Asset Turnover Ratio = Sales = 6,302,550,000 = 0.21 times

(2014) Total Assets 28,832,011,000
Total Asset Turnover Ratio = Sales = 6,302,550,000 = 0.19 times

(2015) Total Assets 32,255,979,000
Analysis:
Now assets are more battery used by the company. So that the turnover is decreased. And sales are
decreased as total assets.
Capital intensity Ratio:
Capital intensity Ratio = Total Assets = 28,832,011,000 = 4.57 times

(2014) Sales 6,302,550,000
Capital intensity Ratio = Total Assets = 6,302,550,000 = 0.19 times

(2015) Sales 32,255,979,000
Analysis:
The capital intensity ratio is decreased in 2015 so it signifies that now less assets are required to
generate the sale if one rupees.
Net Profit Margin:
Net Profit Margin = Net Profit = 1,879,098,000 = 0.29

(2014) Sales 6,302,550,000
Net Profit Margin = Net Profit = 2,554,810,000 = 0.07

(2015) Sales 32,255,979,000
Analysis:
The net Profit Margin of the company has decreased in 2015 as compared to 2014
because admin expenses is increased and finance cost is also increased.
Return on Assets:
Return on Assets = Net Profit = 1,879,098,000 = 0.06 or 6.51%

(2014) Total Assets 28,832,011,000
Return on Assets = Net Profit = 2,554,810,000 = 0.40 or 4.0%

(2015) Total Assets 6,302,550,000
Analysis:
The Return on Assets of the company has decreased in 2015 as compared to 2014
because now they are not using there assets efficiently and cost of finance is also increased and
they have increased the time for account receivable.
Return on Equity:
Return on Equity = Net Profit = 1,879,098,000 = 0.13 or 13%

(2015) Total Equity 14,104,244,000
Return on Equity = Net Profit = 2,554,810,000 = 0.16 or 16%

(2014) Total Equity 15,646,569,000
Analysis:
The Return on Assets of the company has decreased in 2015 as compared to
2014.bacause finance cost is increased .debt to equity ratio is increased so the portion which is
borrowed for business is must be paid so that return on equity is decreased.
Earnings per share:
Earnings per share = Net Profit = 1,879,098,000 = 5.36 RS

(2015) No. of shares outstanding 3, 50,000,000
Earnings per share (2014) = Net profit = 2,554,810,000 = 7.29 RS

Shares outstanding 3, 50,000,000
Analysis
The return on equity is also effect on earnings per share. Which decreases in 2015
.
Book value per share:
Book value per share = Total Equity = 14,104,244,000 = 40.29

(2015) No. of shares outstanding 3, 50,000,000
Book value per share = total equity = 15,646,569,000 = 44.70

(2014) No of shares outstanding 3, 50,000,000
Analysis
This shows that the company book value is decreasing because the reserve kept by the
company is decreasing
Adamjee Insurance Company Limited (AICL)
2015 2014 Index
Net sales 7,747,391 6,302,550 122.9247
Net claims 4,779,707 4,088,215 116.9143
Management Expense 1,555,751 1,483,354 104.8806
Net commission 557,997 361,771 154.2404
Underwriting result 853,936 369,210 231.2873
Add:
Investment income 2,404,312 2,060,861 116.6654
rental income 6,339 5,674 111.7201
other income 184,719 122,542 150.7393
Exchange Gain/lose 5,910 470 1257.447
Less:
worker welfare fund 57,686 41,697 138.3457
General and admin expense 570,908 485,378 117.6213
Finance charge on lease rentals 0 270 0
Profit before tax 2,826,622 2,030,472 139.2101
provision for taxation 271,812 151,374 179.5632
Profit After tax 2,554,810 1,879,098 135.9594


Rupees"000"
Non-Current Assets
Land and building 410,689 28,832,011 1.424420239

equipment 124,024 28,832,011 0.430160768
Motor vehicles 313,417 28,832,011 1.087045229
Machinery and equipmemt 106,180 28,832,011 0.368271225
computer and related accessories 109,056 28,832,011 0.378246249
computer software 48,711 28,832,011 0.168947633
capital work in progress 1,721 28,832,011 0.00596906
Current assets
Premium Due but unpaid 3,627,920 28,832,011 12.58295857
Amount due from other insurers 817,282 28,832,011 2.834634046
Prepaid reinsurance premium ceded 2,116,209 28,832,011 7.339789791
Reinsurance recoveries against claims 3,669,232 28,832,011 12.72624376
Deffered commission expense 477,296 28,832,011 1.65543777
Taxation - payments less provision 49,843 28,832,011 0.172873824
Premium and claim reserves retained by

cedants 0 28,832,011 0
Salvage recoveries accrued 207,471 28,832,011 0.719585602
Accrued investment income 26,214 28,832,011 0.090919777
Sundry receivables 256,133 28,832,011 0.888363285
28,832,01
Total assets 1 28,832,011 100
Authorized capital 3,750,000 28,832,011 13.00637684
Paid-up share capital 3,500,000 28,832,011 12.13928505
Retained earning 9,209,094 28,832,011 31.94051917
Reserves 1,395,150 28,832,011 4.838892438
14,104,24
Total Equity 4 28,832,011 48.91869665
Current liabilities
Staff Retirement benefits 106,248 28,832,011 0.368507074
Amount due to other insurers 1,226,375 28,832,011 4.253518771
Acrrued Expense 68,841 28,832,011 0.238765863
Provision for taxation 0 28,832,011 0
Other creditors and Accruals 1,819,006 28,832,011 6.308980667
14,727,76
Total current liability 7 28,832,011 51.08130335
28,832,01
Total liabilities 1 28,832,011 100

Rupees"000"
Non-Current Assets
Land and building 701,882 32,255,979 2.175974879

equipment 105,726 32,255,979 0.327771791
Motor vehicles 296,657 32,255,979 0.919696159
Machinery and equipmemt 80,081 32,255,979 0.248267151
computer and related accessories 76,391 32,255,979 0.236827411
computer software 33,684 32,255,979 0.104427151
capital work in progress 6,776 32,255,979 0.021006958

Current assets
Premium Due but unpaid 4,539,734 32,255,979 14.0740853
Amount due from other insurers 814,284 32,255,979 2.524443608
Prepaid reinsurance premium ceded 2,255,149 32,255,979 6.991413902
Reinsurance recoveries against claims 3,966,157 32,255,979 12.29588164
deferred commission expense 538,268 32,255,979 1.668738686
Taxation - payments less provision 0 32,255,979 0
Premium and claim reserves retained by

cedants 0 32,255,979 0
Salvage recoveries accrued 250,602 32,255,979 0.776916428
Accrued investment income 23,601 32,255,979 0.07316783
Sundry receivables 174,488 32,255,979 0.540947773
32,255,97
Total assets 9 32,255,979 100
Share & Capital reserves 32,255,979
Authorized capital 3,750,000 32,255,979 11.62575162
Paid-up share capital 3,500,000 32,255,979 10.85070151
10,709,98
Retained earning 3 32,255,979 33.20309391
Reserves 1,436,586 32,255,979 4.453704536
15,646,56
Total Equity 9 32,255,979 48.50749996
Current liabilities
Staff Retirement benefits 61339710 32,255,979 190.1653954
Deferred tax liabilities 6878414 32,255,979 21.32446205

37029565
Amount due to other insurers 6 32,255,979 1147.990752
Accrued Expense 22503412 32,255,979 69.76508758
Provision for taxation 38619506 32,255,979 119.7282091
Other creditors and Accruals 64344061 32,255,979 199.4794856
49576263
Total current liability 5 32,255,979 1536.963535
32,255,97
Total liabilities 9 32,255,979 100

Non-Current Assets
3.25635288
Land freehold 164729600 5058714633 7
2.55414243
Buildings 129206777 5058714633 3
Furniture,Fixture,office and computer 2.26335757
equipment 114496801 5058714633 8
2.34060208
Motor vehicles 118404380 5058714633 2
0.86705072
Motor tracking devices 43861622 5058714633 7
capital work in progress 0 5058714633 0
0.16474319
computer software 8333888 5058714633 3
2.46833322
leased Motor vehicles 124865934 5058714633 4
Current assets
13.7497729
Premium Due but unpaid 695561774 5058714633 1
10.1838260
Amount due from other insurers 515170699 5058714633 6
10.2255062
Prepaid reinsurance premium ceded 517279181 5058714633 5
13.5758066
Reinsurance recoveries against claims 686761318 5058714633 6
3.50399626
deferred commission expense 177257172 5058714633 9
0.33595393
Accrued investment income 16994951 5058714633 8
2.19665166
Sundry receivables 111122339 5058714633 1
505871463
Total assets 3 5058714633 100
200000000 39.5357347
Authorized capital 0 5058714633 7
128800000 25.4610131
Paid-up share capital 0 5058714633 9
17.4331604
Retained earning 881893837 5058714633 2
1.48488148
Reserves 75115917 5058714633 6
224500975 44.3790550
Total Equity 4 5058714633 9
Current liabilities
Staff Retirement benefits 62669003 5058714633 1.23883254
2.24756534
Amount due to other insurers 113697917 5058714633 5
0.50881472
Accrued Expense 25739485 5058714633 6
1.17751237
Provision for taxation 59566991 5058714633 9
1.23104945
Other creditors and Accruals 62275279 5058714633 7
5.16494190
Total current liability 261279672 5058714633 6
505871463
Total liabilities 3 5058714633 100
Final Analysis:
Final analysis of Insurance sector companies of Pakistan in which we discussed about 2
companies.
 United Insurance Company
 Adamjee Insurance Company
Financial Ratios:
Below is the ratio analysis of Insurance sector of Pakistan for the year 2014-2015.
Liquidity ratios:
Current Ratio:
The largest current ratio of 2015 in insurance sector is of united insurance Company with ratio of
10.41 But overall its increase in the current ratio of this company as compared to 2014. Then at
2nd number there is Adamjee Company with ratio 2.79 . There is increase in United inc. assets
and decrease in Adamjee Inc. assets. Overall liquidity ratios of all the two companies are not
bad.
.
Cash Ratio:
Highest cash ratio of insurance sector in 2015 is of United insurance Company with ratio 1.53.
Then it comes to Adamjee insurancewith ratio 0.64 The increase or decrease in cash ratio
depends upon the cash and cash reserves of the company so that the company assets overall
increase or decrease.

Total Debt Ratio:
The Debt ratio of United insurance Insurance Company is highest in overall two companies with
ratio of 0.53. And the lowest debt ratio is of Adamjee Insurance Company with ratio of 0.51. The
increase in Debt Ratio depends upon the increase in liabilities. The company who is relaying on
other people money but overall United insurance company debt ratio decreased in 2015 as
compared to 2014.
Debt to Equity ratio of United insurance Company is highest in overall two companies with ratio
of 1.23. And the lowest debt to equity ratio is of Adamjee insurance with ratio of 1.06. The
increase in Debt to equity Ratio depends upon the increase in liabilities. The company who is
relaying on other people money but overall United insurance Foundation’s debt ratio id
decreased in 2015 as compared to 2014.
Equity Multiplier:
The highest equity multiplier in 2015 is United insurance company with ratio of 2.25 , and then it
comes to Adamjee insurance with ratio 2.06.
Coverage Ratios:
Interest Coverage Ratio:
The highest interest coverage ratio is of united insurance company in 2015 with ratio 52.3. at
second number, there is Adamjee insurance with no interest . The increase or decrease in interest
coverage ratio depends upon company’s profit before interest and tax is increased or decreased
so that they are able to pay so much as them before.
Cash Coverage Ratio:
Cash coverage ratio of united insurance company decreased as compared to 2014 and in 2015
with ratio of 55.24 and the highest ratio in overall insurance sector. There is Adamjee Company
with 0 ratio. The reasons for this increase or decreased is increase or decrease in cash ratio.
Activity Ratios:
Receivable Turnover:
Receivable turnover of United insurance is highest among the two insurance companies with
19.36 times. At second number there is Adamjee Insurance Company with ratio of 0.50 times..
The increase or decrease in receivable turnover ratio depends upon the debt borrowing
Capital Intensity Ratio:
The highest capital Intensity Ratio in 2015 is of United insurance with ratio of 2.35 and in
second number there is Adamjee Insurance Company with ratio 0.19.
The highest Asset Turnover Ratio in 2015 is of United insurance Company with ratio of 0.42 and
in second number there is Adamjee insurance with ratio 0.19
Profitability:
Net Profit Margin:
Net profit Margin of United insurance Company is highest with 28%. Then there is Adamjee
Insurance Company with 7% .Margin depends upon the increase or decrease in admin or selling
or finance cost expense.
Return on Investment:
The highest return on investment in 2015 of insurance sector is of United insurance with 12.2%.
At second number, there is Adamjee Insurance Company with 4%. The increase or decrease in
return on investment depends upon the increase or decrease in admin or selling or finance cost
expense.
Return on Equity:
The highest return on equity in 2015 of insurance sector is of United insurance with 27.6%. Then
it comes to Adamjee Insurance Company with 4% .The increase or decrease in return on equity
depends upon the increase or decrease in admin or selling or finance cost expense.
Earnings per share:
Earnings per share of ADAMJEE Insurance Company is highest among the two companies of
insurance sector with 5.36. Then we have United insurance with 4.81. The return on equity is
also effect on earnings per share.
Book value per share of ADAMJEE insurance Company is highest among the two companies of
insurance sector with 40. Then we have united insurance with 17.43.
Conclusion:
Overall Adamjee insurance is in profit all the two companies are going towards success or to do
better in 2015 as compared to 2014.Because of its share value in market In all companies there is
increase in assets, decrease in liabilities as compared to 2014.and profit of Adamjee Insurance
company is 2,554,810,000 and of united is 620,025,776 which is much greater than of UIC. So
Adamjee Insurance company is best in the comparison and United insurance need more
investment in order to meet with their liabilities and improve their performance.
Jubilee General Insurance
Company vision & mission statement

Jubilee general insurance vision statement is to enable people overcome uncertainty
And provide solution to protect the future of our customer.
Below is the ratio analysis of Jubilee General Insurance for the year 2014-2015.
Current Ratio:
Current Ratio = Current assets = 4,072,332 = 2.449766469

(2015) Current liabilities 2,026,176
Current Ratio = Current assets = 3,900,746 = 2.00986094

Analysis:
The current ratio of the company has increased in 2015 as compared to 2014. The
current ratio of the company shows that liquidity position of the company is going up.
Cash Ratio:
Cash Ratio = Cash = 3817 = 0.001883844

Cash Ratio = Cash = 3583 = 0.002250214

Analysis:
The cash ratio of the company has increased in 2015 as compared to 2014 because
company has more cash and bank reserves in 2015.
Total Debt Ratio:
Total Debt Ratio = Total Assets-Total Equity = 15,070,527- 5,906,404 = 0.6080

(2015) Total Assets 15,070,527
Total Debt Ratio = Total Assets-Total Equity = 13,538,781-5,422,877 = 0.5994

(2014) Total Assets 13,538,781
Analysis:
The total debt ratio of the company has increased in 2015 as compared to 2014 so it can
be infer that the company is more relaying on its own financing with comparison to last year so
now it has less pressure of creditors.
Debt to Equity Ratio = Total Debt = 8,115,904 = 7.948625183

(2014) Total Equity 5,422,877
Debt to Equity Ratio = Total Debt = 9,251,115 = 5.388448675

(2015) Total Equity 5,906,404
Analysis:
The debt to equity ratio of the company has decreased in 2015 as compared to 2014
which means that company is now more relaying on others money so this shows that company is
now using other people money more efficiently that must effect the company’s profit earning or
earning per share ratio.
Equity Multiplier:
Equity Multiplier = Total Assets = 13,538,781 = 13.25972998

(2014) Total Equity 5,422,877
Equity Multiplier = Total Assets = 15,070,527 = 8.846398795

(2015) Total Equity 5,906,404
Analysis:
The Equity Multiplier of the company has decreased in 2015 as compared to 2014.the
company has increased its equity multiplier and able to manage its functions properly.
Asset Management Turnover Ratios
Receivable Turnover Ratio:
Receivable Turnover Ratio = Sales = 4,150,808 = 43.70 times

Receivable Turnover Ratio = Sales = 3644630 = 78.02 times


(2015) 43.70
(2014) 78.02
Analysis:
The Receivable Turnover Ratio of the company has decreased in 2015 as compared to
2014 this is why the company debt to equity ratio is increased because increase in debts borrowing
and then increase in credit sale which is not a good thing for company because now company is
Macro Level Ratios

(2015) Total Assets 15187869

(2014) Total Assets 13538781
Analysis:
Now assets are more better used by the company. So that the turn over is increased. The inventory
turnover is also one of the major effect of this change. As well as our assets increase we make
more profitable activity.
Capital intensity Ratio:

(2015) Sales 4150808
(2014) Sales 3644630
Analysis:
The capital intensity ratio is decreased so it signifies that now less assets are required to generate
the sale if one rupees.
Net Profit Margin:

(2015) Sales 4150808

(2014) Sales 3644630
Analysis:
The net Profit Margin of the company has increased in 2015 as compared to 2014.
Return on Assets:
Return on Assets = Net Profit = 1352650 = 0.089

(2015) Total Assets 15187869
Return on Assets = Net Profit = 1079119 = 0.079

(2014) Total Assets 13538781
Analysis:
The Return on Assets of the company has increased in 2015 as compared to 2014
because now they are not using their assets efficiently and cost of finance is also increased and
they have increased the time for account receivable and reduce the time for paying account
payable.
Return on Equity:
Return on Equity = Net Profit = 1352650 = 0.787870986

(2015) Total Equity 5906404
Return on Equity = Net Profit = 1079119 = 1.056877023

(2014) Total Equity 5422877
Analysis:
The Return on Assets of the company has increased in 2015 as compared to
2014.bacause equity and net profit also increase.
Earning per share:
Earning per share = Net Profit = 1352650 = RS 6.877311835

Earning per share (2015) = Net profit = 8.62054681 RS

Shares out standing
Analysis
The return on equity is also effect on earning per share. Which increase in 2015 as
compares to 2014.
Book value per share = Total Equity = 1021045 = 6.507
Book value per share = total equity = 1716842 = 10.94

Analysis
This shows that the company book value is increasing because the reserve kept by the
company is increasing.
Jubilee general insurance
2015 2014 Index
Net sales 4150808 3644630 113.88
Net claims 2174381 2082704 104.40
Management Expense 1084952 957122 113.35
Net commission 423751 329657 128.54
Underwriting result 467724 275145 169.99
Add:
Investment income 1052195 803088 131.01
rental income 94353 99119 95.19
other income 6335 (2685) 235.9
Return on bank deposit 73084 63985 114.22
General and administrative expense (79575) (51085) 155.7
Share in profit of associates 112175 82253 136.3
Profit before tax 1258567 994675 126.5
Tax 360633 190703 189.1

Profit After tax 1352493 1079119 125.33
Jubilee general insurance (Balance sheet)
Assets Notes 2014 2015

Cash and bank deposit
cash and other equivalents 3583 3817
current and other account 1357129 871776
Deposit maturing within 12 month 356130 145452
Loans to employees 1716842 1021045
Investment 401 577
Investment properties 8431735 7777591
Deferred taxation-net 671653 678043
12937 22498
current assets-others
premium due but unpaid 913926 843898
amount due from insurers/re insurers 83604 122547
Reinsurers recovery due but unpaid 156908 162973
salvage recovery accrued 30005 52932
Accrued investment income 26361 23398
Reinsurance recovery again outstanding claim 1316006 1356398
Deferred commission expense 260642 203333
Prepayments 1189904 1088558
sundry receivables 94976 46714
4072332 3900746
Fixed assets
Tangible and intangible
Buildings 5467 5756
Furniture, fixture and equipment 129984 101423
Vehicles 5477 4656
Computer software 23699 26446
164627 138281
Total assets 15070527 13538781

Total assets -operating fund 117342 -
Total assets 15187869 13538781
Share capital and reserve

authorized capital 2500000 2000000
paid up share capital 1569100 1569100
retained earning 1148493 1104054
Reserves 3188811 2749723
5906404 5422877
Underwriting provision
provision for outstanding claims 2907102 2805862
provision for unearned premium 2628131 2340944
commission income unearned 118533 90579
total underwriting provisions 5653766 5237385
Deferred liability
staff retirement benefits - 53
Creditor and accruals 200563 71537

premiums received in advance
amount due to other insurers/reinsurers 862631 801807
accrued expense 39440 38535
taxation-provision less payment 266723 162638
other creditor and accruals 656819 517776
2026176 1592293
Other liability
deposit and other payable 1506839 1241324
unclaimed dividend 64334 44849
1571173 1286173
Total liability 9251115 8115904

Total liability of Takaful operation 30350 -
Total equity and liability

Contingencies 15187869 13538781

Finance Project: Sir Usman Akmal

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FINANCE PROJECT

JUNE 1, 2017 UNIVERSITY OF EDUCATION TOWNSHIP

Vision and Mission:

Ratio Analysis of company report (2014/15)

Short term solvency ratios/liquidity ratios

Current Ratio = Current assets = 2850938938= 5.75

Cash Ratio = Cash = 593770592 = 1.197

Cash Ratio = Cash = 400065630 = 1.5311

Long Term Solvency Ratios/Leverage Ratios

 Total Debt Ratio:

Total Debt Ratio = Total Assets-Total Equity = 4820161562-1645022974 = 0.65

Total Debt Ratio = Total Assets-Total Equity = 5058714633-2245009754= 0.53

Debt to Equity Ratio = Total Debt = 3135040511 = 1.90

Debt to Equity Ratio = Total Debt = 2774469224 = 1.23

Equity Multiplier = Total Assets = 4820161562 = 2.93

Equity Multiplier = Total Assets = 5058714633 = 2.25

 Interest Coverage Ratio:

 Cash Coverage Ratio:

Cash Coverage Ratio = EBIT +Depreciation = 515611547+ 41333656 = 72.56

Cash Coverage Ratio = EBIT +Depreciation = 630915304 +35110621= 55.24 (2015)

 Receivable Turnover Ratio:

Receivable Turnover Ratio = Sales = 1536703130 = 26.09times

Receivable Turnover Ratio = Sales = 2151783888 = 19.36 times

Days sales in Receivable = 365 = 13.99 days

Macro Level Ratios

 Total Asset Turnover Ratio

Total Asset Turnover Ratio = Sales = 1536703130 = 0.31 times

Total Asset Turnover Ratio = Sales = 2151783888 = 0.42 times

Capital intensity Ratio = Total Assets = 4820161562 = 3.13 times

Capital intensity Ratio = Total Assets = 5058714633 = 2.35 times

 Net Profit Margin:

Net Profit Margin = Net Profit = 460887143 = 0.299

Net Profit Margin = Net Profit = 620025776= 0.288

Return on Assets = Net Profit = 460887143 = 0.095 or 9.5%

Return on Assets = Net Profit = 620025776 = 0.122 or 12.2%

Return on Equity = Net Profit = 620025776 = 0.276 or 27.6%

Return on Equity = Net Profit = 460887143 = 0.280 or 28.0%

 Earning per share:

Earning per share = Net Profit = 620025776 = 4.81 RS

Earning per share (2014) = Net profit = 460887143 = 5.009 RS

 Book value per share:

Book value per share = Total Equity = 2245009754 = 17.43

Book value per share = total equity = 1645022974 = 17.88

United Insurance company

Index Analysis for Income statement

For the year 2015-2014

2015 2014 Index

Net sales 2151783888 1536703130 140.026

Net claims 742328636 419432375 176.9841

change in premium deficiency reserve 5261422 #DIV/0!

Management Expense 404891299 377599888 107.2276

Underwriting result 798284689 629073642 126.8984

Investment income 60728726 63404022 95.78056

rental income 1392000 1392000 100

other income 21388587 31451605 68.00476

profit from window takaful operations 69794020 28455780 245.2719

Share loss from Associate 10992111 282459 3891.578

General and admin expense 248951918 237883043 104.6531

Finance charge on lease rentals 12055625 7675541 157.0655

Profit before tax 679588368 507936006 133.7941

provision for taxation 59562592 47084863 126.5005

Profit After tax 620025776 460887143 134.5288

Common Size Analysis of Balance sheet of the year 2014