Financial Ratio Analysis Of Pso And Spl (shell) ........tahir Sami
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Financial Statement Analysis Of Pakistan State Oil Company Limited & Shell Pakistan Limited
Road Map Introduction
Aims & Objectives
Data Collection
Data Processing
Data Analysis
Conclusion
Recommendations
INTRODUCTION
Introduction
The Pakistani oil marketing sector mainly consist of three companies namely Pakistan State Oil Company, Shell Pakistan and Caltex Pakistan.
The giant oil marketing companies Pakistan State Oil and Shell Pakistan, I am trying to do in this project comparison of financial statements analysis
AIMS & OBJECTIVES
Aims and Objectives 1.Determine the significant financial strength
2. Determine
the performance
3. Financial position
• •
PSO SPL
DATA COLLECTION
Data Collection
Annual Reports of Pakistan State Oil Company Limited. Annual Reports of Shell Pakistan Limited. Article from New Papers Websites
DATA PROCESSING
Data Processing Financial statement analysis has been don for three recent years 2008, 2007 & 2006. All data bring together like recommendation of instructors. All annual reports financial statements develop in M.S Excel. All analysis has been done in M.S Excel with graphical Charts. All theory work has been done in M.S Word.
DATA ANALYSIS
Data analysis
Balance Sheets PSO
Balance Sheets
ASSETS
2008
2007
SPL 2006
2008
Rs (000) Non-Current Assets
2007
2006
Rs (000)
11231328
12224042
12133849
9444650
9498295
7900045
Current Assets
115878692
62513273
58034675
30220209
19713632
20392354
Total Net Assets
127110020
74737315
70168524
39664859
29211927
28292399
30965054
20939217
20813059
13611638
9460771
10156746
2408746
2412371
2298887
2745410
139041
157643
93736220
51385727
47056578
23307811
19612115
17978010
127110020
74737315
70168524
39664859
29211927
28292399
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
Profit & Loss Account PSO
Profit and Loss Account 2008
2007
SPL 2006
2008
Rs (000) Sales
2007
2006
Rs (000)
495278533
349706326
298250039
139844689
115045434
117262519
(465254907)
(337446896)
(281042813)
(124694471)
(108664932)
(107301071)
Gross Profit
30023626
12259430
17207226
15150218
6380502
9961448
Operating Expenses
(9283021)
(6012814)
(7337342)
(6975312)
(5461240)
(5125509)
Profit after operating expenses
20740605
6246616
9869884
8174906
919262
4835939
313860
424238
442791
1396527
1278932
950850
306453
215322
158681
Profit from operations
22450992
7949786
11263525
8481359
1134584
4994620
Finance costs
(1367898)
(1158112)
(884153)
(970267)
(878098)
(398009)
294318
330306
1038939
212248
122250
43573
profit before taxation
21377412
7121980
11418311
7723340
378736
4640184
Taxation
(7323617)
(2432182)
(3893610)
(2586246)
327923
(1493060)
4689798
7524701
5137094
706659
3147124
Cost of products sold
Other Income Other operating income
Share of profit of association net of tax
Profit for the year
14053795
Data analysis
Liquidity Ratio Analysis Current Assets Ratio 1.40
1.2 1.3
1.2
1.2
1.20
1.0
Acid test Ratio 0.70
1.1
0.60
1.00
0.50
0.80
0.40
0.60
0.30
0.40
0.20
0.20
0.10
0.00
0.00
2008
2007 Years PSO
SPL
2006
0.57
0.64 0.58
0.63 0.58
2007
2006
0.52
2008
Years PSO
SPL
Data analysis
Leverage Ratio Analysis •Time Interest Earned ( Earning before income tax / interest exp)
•Debt Ratio (Total Liabilities / Total Assets)
•Debt / Equity Ratio ( Debt / Total Equity)
Years
2008
2007
2006
PSO
98.09
53.97
94.58
SPL
49.11
2.88
60.23
Years
2008
2007
2006
PSO
0.76
0.72
0.70
SPL
0.66
0.68
0.64
Years
2008
2007
2006
PSO
3.10
2.57
2.37
SPL
1.91
2.09
1.79
Data analysis
Profitability Ratio Analysis •Net Profit Margin (Net Profit / Net Sales)*100
•Return on Assets (Net Income / Total Assets)*100
•Operating Income Margin (Operating Income / Sales)*100
Years
2008
2007
2006
PSO
2.84%
1.34%
2.52%
SPL
3.67%
0.61%
2.68%
2008
2007
2006
PSO
11.06%
6.28%
10.72%
SPL
12.95%
2.42%
11.12%
2008
2007
2006
PSO
4.53%
2.27%
3.78%
SPL
6.06%
0.99%
4.26%
Years
Years
Data analysis
Activity Ratio Analysis •Average collection period ( 365 Days / Account Receivable Turnover)
•Average payment period (365 Days / Account Payable Turnover)
•Average age of inventory (365days / Inventory Turnover)
Years
2008
2007
2006
PSO
Days =
21
12
12
SPL
Days =
11
12
14
2008
2007
2006
Years PSO
Days =
64
45
48
SPL
Days =
48
40
41
2008
2007
2006
Years PSO
Days =
19
14
10
SPL
Days =
13
16
11
Data analysis
Market Ratio Analysis •Dividend per share
•Earning per Share (Net Income /No of Shares)
Years
2008
2007
2006
PSO
Rs.23.5
Rs.21
Rs.34
SPL
Rs.50
Rs.16
Rs.30
2008
2007
2006
PSO
5.1
14.3
7
SPL
8.5
31.0
8.4
2008
2007
2006
Years
•Price/Earning Ratio
Years
(Market Price Per Share/ Earning Per Share)
PSO
81.94
27.34
43.87
SPL
93.76
12.90
57.44
•Dividend Payout
Years
2008
2007
2006
PSO
28.68%
76.80%
77.50%
SPL
53.33%
124.05%
52.23%
•(Dividend Per Share/ Earning Per Share)*100
Data analysis
Cash flow Ratio Analysis •Operating cash flow / current maturity Years of long term debt and current notes PSO payables
2008
2007
2006
0.37
0.41
0.21
17.50
3.36
34.24
Years
2008
2007
2006
PSO
0.04
0.07
0.03
SPL
0.04
0.01
0.05
Years
2008
2007
2006
PSO
0.24
0.22
0.10
SPL
0.02
0.00
0.02
Years
2008
2007
2006
PSO
0.01
0.01
0.00
SPL
0.0003
0.0001
0.0005
SPL
•Operating cash flow / Total debt
•Operating cash flow per share
•Operating cash flow /cash dividends
Data analysis
PSO Balance Sheet Vertical Analysis Balance Sheets ASSETS
PSO 2008
Vertical Analysis 2007
2006
Rs (000)
Non-Current Assets Current Assets Total Net Assets
2008
2007
2006
%
%
%
11231328
12224042
12133849
8.84
16.36
17.29
115878692
62513273
58034675
91.16
83.64
82.71
127110020
74737315
70168524
100.00
100.00
100.00
30965054
20939217
20813059
24.36
28.02
29.66
2408746
2412371
2298887
1.90
3.23
3.28
93736220
51385727
47056578
73.74
68.76
67.06
127110020
74737315
70168524
100.00
100.00
100.00
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
SPL Balance Sheet Vertical Analysis Balance Sheets ASSETS
SPL 2008
Vertical Analysis 2007
2006
Rs (000)
Non-Current Assets Current Assets Total Net Assets
2008
2007
2006
%
%
%
9444650
9498295
7900045
23.81
32.52
27.92
30220209
19713632
20392354
76.19
67.48
72.08
39664859
29211927
28292399
100.00
100.00
100.00
13611638
9460771
10156746
34.32
32.39
35.90
2745410
139041
157643
6.92
0.48
0.56
23307811
19612115
17978010
58.76
67.14
63.54
39664859
29211927
28292399
100.00
100.00
100.00
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
PSO Profit & Loss Account Vertical Analysis
Profit and Loss Account
PSO 2008
Vertical Analysis 2007
2006
Rs (000)
2008
2007
2006
%
%
%
Sales
583213959
411057592
352514873
100.00
100.00
100.00
Net Sales
495278533
349706326
298250039
84.92
85.07
84.61
(465254907)
(337446896)
(281042813)
(79.77)
(82.09)
(79.73)
Gross Profit
30023626
12259430
17207226
5.15
2.98
4.88
Operating Expenses
(9283021)
(6012814)
(7337342)
(1.59)
(1.46)
(2.08)
Profit after operating expenses
20740605
6246616
9869884
3.56
1.52
2.80
313860
424238
442791
0.05
0.10
0.13
1396527
1278932
950850
0.24
0.31
0.27
Profit from operations
22450992
7949786
11263525
3.85
1.93
3.20
Finance costs
(1367898)
(1158112)
(884153)
(0.23)
(0.28)
(0.25)
294318
330306
1038939
0.05
0.08
0.29
profit before taxation
21377412
7121980
11418311
3.67
1.73
3.24
Taxation
(7323617)
(2432182)
(3893610)
(1.26)
(0.59)
(1.10)
14053795
4689798
7524701
2.41
1.14
2.13
Cost of products sold
Other Income Other operating income
Share of profit of association net of tax
Profit for the year
Data analysis
SPL Profit & Loss Account Vertical Analysis
Profit and Loss Account
SPL 2008
Vertical Analysis 2007
2006
Rs (000)
2008
2007
2006
%
%
%
Sales
157626491
130129844
132840460
100.00
100.00
100.00
Net Sales
139844689
115045434
117262519
88.72
88.41
88.27
(124694471)
(108664932)
(107301071)
(79.11)
(83.51)
(80.77)
Gross Profit
15150218
6380502
9961448
9.61
4.90
7.50
Operating Expenses
(6975312)
(5461240)
(5125509)
(4.43)
(4.20)
(3.86)
8174906
919262
4835939
5.19
0.71
3.64
0
0
0
0.00
0.00
0.00
306453
215322
158681
0.19
0.17
0.12
Profit from operations
8481359
1134584
4994620
5.38
0.87
3.76
Finance costs
(970267)
(878098)
(398009)
(0.62)
(0.67)
(0.30)
212248
122250
43573
0.13
0.09
0.03
7723340
378736
4640184
4.90
0.29
3.49
(2586246)
327923
(1493060)
(1.64)
0.25
(1.12)
3.26
0.54
2.37
Cost of products sold
Profit after operating expenses Other Income Other operating income
Share of profit of association net of tax profit before taxation Taxation
Profit for the year
5137094
706659
3147124
Data analysis
PSO Balance sheet Horizontal Analysis Balance Sheets ASSETS
PSO 2008
2007
Horizontal Analysis 2006
Rs (000)
Non-Current Assets
Changes
2008
2007
2006
2008
2007
%
%
%
%
%
11231328
12224042
12133849
92.56
100.74
100
(7.44)
0.74
Current Assets
115878692
62513273
58034675
199.67
107.72
100
99.7
7.72
Total Net Assets
127110020
74737315
70168524
181.15
106.51
100
81.1
6.51
30965054
20939217
20813059
148.78
100.61
100
48.8
0.61
2408746
2412371
2298887
104.78
104.94
100
4.78
4.94
93736220
51385727
47056578
199.20
109.20
100
99.2
9.2
127110020
74737315
70168524
181.15
106.51
100
81.1
6.51
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
SPL Balance sheet Horizontal Analysis Balance Sheets ASSETS
SPL 2008
2007
Horizontal Analysis 2006
Rs (000)
Non-Current Assets
Changes
2008
2007
2006
2008
2007
%
%
%
%
%
9444650
9498295
7900045
119.55
120.23
100
19.6
20.2
Current Assets
30220209
19713632
20392354
148.19
96.67
100
48.2
(3.33)
Total Net Assets
39664859
29211927
28292399
140.20
103.25
100
40.2
3.25
13611638
9460771
10156746
134.02
93.15
100
34
(6.85)
2745410
139041
157643
1741.54
88.20
100
1642
(11.8)
Current Liabilities
23307811
19612115
17978010
129.65
109.09
100
29.6
9.09
Total Equity and Liabilities
39664859
29211927
28292399
140.20
103.25
100
40.2
3.25
EQUITY AND LIABILITIES Equity Non-Current Liabilities
Data analysis
PSO Profit & Loss Account Horizontal Analysis
Profit and Loss Account
PSO 2008
2007
Horizontal Analysis 2006
Rs (000)
Changes in %
2008
2007
2006
%
%
%
2008
2007
%
%
Sales
583213959
411057592
352514873
165.44
116.607
100.00
48.84
16.61
Net Sales
495278533
349706326
298250039
166.06
117.253
100.00
48.81
17.25
Cost of products sold
-465254907
-337446896
-281042813
165.55
120.070
100.00
45.48
20.07
Gross Profit
30023626
12259430
17207226
174.48
71.246
100.00
103.24
(28.75)
Operating Expenses
-9283021
-6012814
-7337342
126.52
81.948
100.00
44.57
(18.05)
Profit after operating expenses
20740605
6246616
9869884
210.14
63.290
100.00
146.85
(36.71)
313860
424238
442791
70.88
95.810
100.00
(24.93)
(4.19)
1396527
1278932
950850
146.87
134.504
100.00
12.37
34.50
Profit from operations
22450992
7949786
11263525
199.32
70.580
100.00
128.74
(29.42)
Finance costs Share of profit of association net of tax
-1367898
-1158112
-884153
154.71
130.985
100.00
23.73
30.99
294318
330306
1038939
28.33
31.793
100.00
(3.46)
(68.21)
profit before taxation
21377412
7121980
11418311
187.22
62.373
100.00
124.85
(37.63)
Taxation
-7323617
-2432182
-3893610
188.09
62.466
100.00
125.63
(37.53)
14053795
4689798
7524701
186.77
62.325
100.00
124.44
(37.67)
Other Income Other operating income
Profit for the year
Data analysis
SPL Profit & Loss Account Horizontal Analysis
Profit and Loss Account
SPL 2008
Horizontal Analysis
2007
2006
Rs (000)
Changes in %
2008
2007
2006
2008
2007
%
%
%
%
%
Sales
157626491
130129844
132840460
118.66
97.96
100.00
18.66
(2.04)
Net Sales
139844689
115045434
119.26
98.11
100.00
19.26
(1.89)
(124694471)
(108664932)
117262519 (107301071 )
116.21
101.27
100.00
16.21
1.27
Gross Profit
15150218
6380502
9961448
152.09
64.05
100.00
52.09
(35.95)
Operating Expenses
(6975312)
(5461240)
(5125509)
136.09
106.55
100.00
36.09
6.55
8174906
919262
4835939
169.04
19.01
100.00
69.04
(80.99)
0
0
0
306453
215322
158681
193.13
135.69
100.00
93.13
35.69
Profit from operations
8481359
1134584
4994620
169.81
22.72
100.00
69.81
(77.28)
Finance costs Share of profit of association net of tax
(970267)
(878098)
(398009)
243.78
220.62
100.00
143.78
120.62
212248
122250
43573
487.11
280.56
100.00
387.11
180.56
profit before taxation
7723340
378736
4640184
166.44
8.16
100.00
66.44
(91.84)
(2586246)
327923
(1493060)
173.22
(21.96)
100.00
73.22
(121.96)
100.00
63.23
(77.55)
Cost of products sold
Profit after operating expenses Other Income Other operating income
Taxation
Profit for the year
5137094
706659
3147124
163.23
22.45
CONCLUSIONS
Conclusions Current Ratios 1.40 1.20 Ratio
1.00 0.80 0.60 0.40 0.20 0.00
2008
2007
2006
PSO
1.24
1.22
1.23
SPL
1.30
1.01
1.13
Years
Both companies not able to maintain the normal limit of current ratio which means their current liabilities are more than the current assets.
Conclusions Gross Profit Margin 10
5
0
2008
2007
2006
PSO
5.15
2.98
4.88
SPL
9.61
4.90
7.50
Year
Gross profit margin showing that SPL have a good and very attractive cost of goods sold and PSO not have good gross profit margin
Conclusions Net Profit Margin
Percentage of changes
4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00
2008
2007
2006
PSO
2.84
1.34
2.52
SPL
3.67
0.61
2.68
Years
In the Net profit margin SPL have the advantage over the PSO, because of their all expenses are in control and budgeted and that’s why their Net profit margin is very effective.
Conclusions Earning Per Share 100 80 Rs
60 40 20 0
2008
2007
2006
PSO
81.94
27.34
43.87
SPL
93.76
12.90
57.44
Years
Earning per share in 2008 Shell leading with Rs.93.76 per share in year 2007 PSO leading Rs.27.34 per share and in 2006 SPL Rs.57.44 per share profitability its means SPL profitability level is good.
RECOMMENDATIONS
Recommendations
Both companies current ratio not showing the normal limits their Current assets should be twice the current liabilities.
PSO cost of production is higher than the SPL. Its means that PSO not producing products effectively or efficiently PSO have to reduce their Production cost.
Both companies not able to maintain the normal limit of acid test ratio because is less then 1 which means their current liabilities are more than the current assets. Current assets should be equal to current liabilities.
THANK YOU
Road Map Introduction
Aims & Objectives
Data Collection
Data Processing
Data Analysis
Conclusion
Recommendations
INTRODUCTION
Introduction
The Pakistani oil marketing sector mainly consist of three companies namely Pakistan State Oil Company, Shell Pakistan and Caltex Pakistan.
The giant oil marketing companies Pakistan State Oil and Shell Pakistan, I am trying to do in this project comparison of financial statements analysis
AIMS & OBJECTIVES
Aims and Objectives 1.Determine the significant financial strength
2. Determine
the performance
3. Financial position
• •
PSO SPL
DATA COLLECTION
Data Collection
Annual Reports of Pakistan State Oil Company Limited. Annual Reports of Shell Pakistan Limited. Article from New Papers Websites
DATA PROCESSING
Data Processing Financial statement analysis has been don for three recent years 2008, 2007 & 2006. All data bring together like recommendation of instructors. All annual reports financial statements develop in M.S Excel. All analysis has been done in M.S Excel with graphical Charts. All theory work has been done in M.S Word.
DATA ANALYSIS
Data analysis
Balance Sheets PSO
Balance Sheets
ASSETS
2008
2007
SPL 2006
2008
Rs (000) Non-Current Assets
2007
2006
Rs (000)
11231328
12224042
12133849
9444650
9498295
7900045
Current Assets
115878692
62513273
58034675
30220209
19713632
20392354
Total Net Assets
127110020
74737315
70168524
39664859
29211927
28292399
30965054
20939217
20813059
13611638
9460771
10156746
2408746
2412371
2298887
2745410
139041
157643
93736220
51385727
47056578
23307811
19612115
17978010
127110020
74737315
70168524
39664859
29211927
28292399
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
Profit & Loss Account PSO
Profit and Loss Account 2008
2007
SPL 2006
2008
Rs (000) Sales
2007
2006
Rs (000)
495278533
349706326
298250039
139844689
115045434
117262519
(465254907)
(337446896)
(281042813)
(124694471)
(108664932)
(107301071)
Gross Profit
30023626
12259430
17207226
15150218
6380502
9961448
Operating Expenses
(9283021)
(6012814)
(7337342)
(6975312)
(5461240)
(5125509)
Profit after operating expenses
20740605
6246616
9869884
8174906
919262
4835939
313860
424238
442791
1396527
1278932
950850
306453
215322
158681
Profit from operations
22450992
7949786
11263525
8481359
1134584
4994620
Finance costs
(1367898)
(1158112)
(884153)
(970267)
(878098)
(398009)
294318
330306
1038939
212248
122250
43573
profit before taxation
21377412
7121980
11418311
7723340
378736
4640184
Taxation
(7323617)
(2432182)
(3893610)
(2586246)
327923
(1493060)
4689798
7524701
5137094
706659
3147124
Cost of products sold
Other Income Other operating income
Share of profit of association net of tax
Profit for the year
14053795
Data analysis
Liquidity Ratio Analysis Current Assets Ratio 1.40
1.2 1.3
1.2
1.2
1.20
1.0
Acid test Ratio 0.70
1.1
0.60
1.00
0.50
0.80
0.40
0.60
0.30
0.40
0.20
0.20
0.10
0.00
0.00
2008
2007 Years PSO
SPL
2006
0.57
0.64 0.58
0.63 0.58
2007
2006
0.52
2008
Years PSO
SPL
Data analysis
Leverage Ratio Analysis •Time Interest Earned ( Earning before income tax / interest exp)
•Debt Ratio (Total Liabilities / Total Assets)
•Debt / Equity Ratio ( Debt / Total Equity)
Years
2008
2007
2006
PSO
98.09
53.97
94.58
SPL
49.11
2.88
60.23
Years
2008
2007
2006
PSO
0.76
0.72
0.70
SPL
0.66
0.68
0.64
Years
2008
2007
2006
PSO
3.10
2.57
2.37
SPL
1.91
2.09
1.79
Data analysis
Profitability Ratio Analysis •Net Profit Margin (Net Profit / Net Sales)*100
•Return on Assets (Net Income / Total Assets)*100
•Operating Income Margin (Operating Income / Sales)*100
Years
2008
2007
2006
PSO
2.84%
1.34%
2.52%
SPL
3.67%
0.61%
2.68%
2008
2007
2006
PSO
11.06%
6.28%
10.72%
SPL
12.95%
2.42%
11.12%
2008
2007
2006
PSO
4.53%
2.27%
3.78%
SPL
6.06%
0.99%
4.26%
Years
Years
Data analysis
Activity Ratio Analysis •Average collection period ( 365 Days / Account Receivable Turnover)
•Average payment period (365 Days / Account Payable Turnover)
•Average age of inventory (365days / Inventory Turnover)
Years
2008
2007
2006
PSO
Days =
21
12
12
SPL
Days =
11
12
14
2008
2007
2006
Years PSO
Days =
64
45
48
SPL
Days =
48
40
41
2008
2007
2006
Years PSO
Days =
19
14
10
SPL
Days =
13
16
11
Data analysis
Market Ratio Analysis •Dividend per share
•Earning per Share (Net Income /No of Shares)
Years
2008
2007
2006
PSO
Rs.23.5
Rs.21
Rs.34
SPL
Rs.50
Rs.16
Rs.30
2008
2007
2006
PSO
5.1
14.3
7
SPL
8.5
31.0
8.4
2008
2007
2006
Years
•Price/Earning Ratio
Years
(Market Price Per Share/ Earning Per Share)
PSO
81.94
27.34
43.87
SPL
93.76
12.90
57.44
•Dividend Payout
Years
2008
2007
2006
PSO
28.68%
76.80%
77.50%
SPL
53.33%
124.05%
52.23%
•(Dividend Per Share/ Earning Per Share)*100
Data analysis
Cash flow Ratio Analysis •Operating cash flow / current maturity Years of long term debt and current notes PSO payables
2008
2007
2006
0.37
0.41
0.21
17.50
3.36
34.24
Years
2008
2007
2006
PSO
0.04
0.07
0.03
SPL
0.04
0.01
0.05
Years
2008
2007
2006
PSO
0.24
0.22
0.10
SPL
0.02
0.00
0.02
Years
2008
2007
2006
PSO
0.01
0.01
0.00
SPL
0.0003
0.0001
0.0005
SPL
•Operating cash flow / Total debt
•Operating cash flow per share
•Operating cash flow /cash dividends
Data analysis
PSO Balance Sheet Vertical Analysis Balance Sheets ASSETS
PSO 2008
Vertical Analysis 2007
2006
Rs (000)
Non-Current Assets Current Assets Total Net Assets
2008
2007
2006
%
%
%
11231328
12224042
12133849
8.84
16.36
17.29
115878692
62513273
58034675
91.16
83.64
82.71
127110020
74737315
70168524
100.00
100.00
100.00
30965054
20939217
20813059
24.36
28.02
29.66
2408746
2412371
2298887
1.90
3.23
3.28
93736220
51385727
47056578
73.74
68.76
67.06
127110020
74737315
70168524
100.00
100.00
100.00
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
SPL Balance Sheet Vertical Analysis Balance Sheets ASSETS
SPL 2008
Vertical Analysis 2007
2006
Rs (000)
Non-Current Assets Current Assets Total Net Assets
2008
2007
2006
%
%
%
9444650
9498295
7900045
23.81
32.52
27.92
30220209
19713632
20392354
76.19
67.48
72.08
39664859
29211927
28292399
100.00
100.00
100.00
13611638
9460771
10156746
34.32
32.39
35.90
2745410
139041
157643
6.92
0.48
0.56
23307811
19612115
17978010
58.76
67.14
63.54
39664859
29211927
28292399
100.00
100.00
100.00
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
PSO Profit & Loss Account Vertical Analysis
Profit and Loss Account
PSO 2008
Vertical Analysis 2007
2006
Rs (000)
2008
2007
2006
%
%
%
Sales
583213959
411057592
352514873
100.00
100.00
100.00
Net Sales
495278533
349706326
298250039
84.92
85.07
84.61
(465254907)
(337446896)
(281042813)
(79.77)
(82.09)
(79.73)
Gross Profit
30023626
12259430
17207226
5.15
2.98
4.88
Operating Expenses
(9283021)
(6012814)
(7337342)
(1.59)
(1.46)
(2.08)
Profit after operating expenses
20740605
6246616
9869884
3.56
1.52
2.80
313860
424238
442791
0.05
0.10
0.13
1396527
1278932
950850
0.24
0.31
0.27
Profit from operations
22450992
7949786
11263525
3.85
1.93
3.20
Finance costs
(1367898)
(1158112)
(884153)
(0.23)
(0.28)
(0.25)
294318
330306
1038939
0.05
0.08
0.29
profit before taxation
21377412
7121980
11418311
3.67
1.73
3.24
Taxation
(7323617)
(2432182)
(3893610)
(1.26)
(0.59)
(1.10)
14053795
4689798
7524701
2.41
1.14
2.13
Cost of products sold
Other Income Other operating income
Share of profit of association net of tax
Profit for the year
Data analysis
SPL Profit & Loss Account Vertical Analysis
Profit and Loss Account
SPL 2008
Vertical Analysis 2007
2006
Rs (000)
2008
2007
2006
%
%
%
Sales
157626491
130129844
132840460
100.00
100.00
100.00
Net Sales
139844689
115045434
117262519
88.72
88.41
88.27
(124694471)
(108664932)
(107301071)
(79.11)
(83.51)
(80.77)
Gross Profit
15150218
6380502
9961448
9.61
4.90
7.50
Operating Expenses
(6975312)
(5461240)
(5125509)
(4.43)
(4.20)
(3.86)
8174906
919262
4835939
5.19
0.71
3.64
0
0
0
0.00
0.00
0.00
306453
215322
158681
0.19
0.17
0.12
Profit from operations
8481359
1134584
4994620
5.38
0.87
3.76
Finance costs
(970267)
(878098)
(398009)
(0.62)
(0.67)
(0.30)
212248
122250
43573
0.13
0.09
0.03
7723340
378736
4640184
4.90
0.29
3.49
(2586246)
327923
(1493060)
(1.64)
0.25
(1.12)
3.26
0.54
2.37
Cost of products sold
Profit after operating expenses Other Income Other operating income
Share of profit of association net of tax profit before taxation Taxation
Profit for the year
5137094
706659
3147124
Data analysis
PSO Balance sheet Horizontal Analysis Balance Sheets ASSETS
PSO 2008
2007
Horizontal Analysis 2006
Rs (000)
Non-Current Assets
Changes
2008
2007
2006
2008
2007
%
%
%
%
%
11231328
12224042
12133849
92.56
100.74
100
(7.44)
0.74
Current Assets
115878692
62513273
58034675
199.67
107.72
100
99.7
7.72
Total Net Assets
127110020
74737315
70168524
181.15
106.51
100
81.1
6.51
30965054
20939217
20813059
148.78
100.61
100
48.8
0.61
2408746
2412371
2298887
104.78
104.94
100
4.78
4.94
93736220
51385727
47056578
199.20
109.20
100
99.2
9.2
127110020
74737315
70168524
181.15
106.51
100
81.1
6.51
EQUITY AND LIABILITIES Equity Non-Current Liabilities Current Liabilities Total Equity and Liabilities
Data analysis
SPL Balance sheet Horizontal Analysis Balance Sheets ASSETS
SPL 2008
2007
Horizontal Analysis 2006
Rs (000)
Non-Current Assets
Changes
2008
2007
2006
2008
2007
%
%
%
%
%
9444650
9498295
7900045
119.55
120.23
100
19.6
20.2
Current Assets
30220209
19713632
20392354
148.19
96.67
100
48.2
(3.33)
Total Net Assets
39664859
29211927
28292399
140.20
103.25
100
40.2
3.25
13611638
9460771
10156746
134.02
93.15
100
34
(6.85)
2745410
139041
157643
1741.54
88.20
100
1642
(11.8)
Current Liabilities
23307811
19612115
17978010
129.65
109.09
100
29.6
9.09
Total Equity and Liabilities
39664859
29211927
28292399
140.20
103.25
100
40.2
3.25
EQUITY AND LIABILITIES Equity Non-Current Liabilities
Data analysis
PSO Profit & Loss Account Horizontal Analysis
Profit and Loss Account
PSO 2008
2007
Horizontal Analysis 2006
Rs (000)
Changes in %
2008
2007
2006
%
%
%
2008
2007
%
%
Sales
583213959
411057592
352514873
165.44
116.607
100.00
48.84
16.61
Net Sales
495278533
349706326
298250039
166.06
117.253
100.00
48.81
17.25
Cost of products sold
-465254907
-337446896
-281042813
165.55
120.070
100.00
45.48
20.07
Gross Profit
30023626
12259430
17207226
174.48
71.246
100.00
103.24
(28.75)
Operating Expenses
-9283021
-6012814
-7337342
126.52
81.948
100.00
44.57
(18.05)
Profit after operating expenses
20740605
6246616
9869884
210.14
63.290
100.00
146.85
(36.71)
313860
424238
442791
70.88
95.810
100.00
(24.93)
(4.19)
1396527
1278932
950850
146.87
134.504
100.00
12.37
34.50
Profit from operations
22450992
7949786
11263525
199.32
70.580
100.00
128.74
(29.42)
Finance costs Share of profit of association net of tax
-1367898
-1158112
-884153
154.71
130.985
100.00
23.73
30.99
294318
330306
1038939
28.33
31.793
100.00
(3.46)
(68.21)
profit before taxation
21377412
7121980
11418311
187.22
62.373
100.00
124.85
(37.63)
Taxation
-7323617
-2432182
-3893610
188.09
62.466
100.00
125.63
(37.53)
14053795
4689798
7524701
186.77
62.325
100.00
124.44
(37.67)
Other Income Other operating income
Profit for the year
Data analysis
SPL Profit & Loss Account Horizontal Analysis
Profit and Loss Account
SPL 2008
Horizontal Analysis
2007
2006
Rs (000)
Changes in %
2008
2007
2006
2008
2007
%
%
%
%
%
Sales
157626491
130129844
132840460
118.66
97.96
100.00
18.66
(2.04)
Net Sales
139844689
115045434
119.26
98.11
100.00
19.26
(1.89)
(124694471)
(108664932)
117262519 (107301071 )
116.21
101.27
100.00
16.21
1.27
Gross Profit
15150218
6380502
9961448
152.09
64.05
100.00
52.09
(35.95)
Operating Expenses
(6975312)
(5461240)
(5125509)
136.09
106.55
100.00
36.09
6.55
8174906
919262
4835939
169.04
19.01
100.00
69.04
(80.99)
0
0
0
306453
215322
158681
193.13
135.69
100.00
93.13
35.69
Profit from operations
8481359
1134584
4994620
169.81
22.72
100.00
69.81
(77.28)
Finance costs Share of profit of association net of tax
(970267)
(878098)
(398009)
243.78
220.62
100.00
143.78
120.62
212248
122250
43573
487.11
280.56
100.00
387.11
180.56
profit before taxation
7723340
378736
4640184
166.44
8.16
100.00
66.44
(91.84)
(2586246)
327923
(1493060)
173.22
(21.96)
100.00
73.22
(121.96)
100.00
63.23
(77.55)
Cost of products sold
Profit after operating expenses Other Income Other operating income
Taxation
Profit for the year
5137094
706659
3147124
163.23
22.45
CONCLUSIONS
Conclusions Current Ratios 1.40 1.20 Ratio
1.00 0.80 0.60 0.40 0.20 0.00
2008
2007
2006
PSO
1.24
1.22
1.23
SPL
1.30
1.01
1.13
Years
Both companies not able to maintain the normal limit of current ratio which means their current liabilities are more than the current assets.
Conclusions Gross Profit Margin 10
5
0
2008
2007
2006
PSO
5.15
2.98
4.88
SPL
9.61
4.90
7.50
Year
Gross profit margin showing that SPL have a good and very attractive cost of goods sold and PSO not have good gross profit margin
Conclusions Net Profit Margin
Percentage of changes
4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00
2008
2007
2006
PSO
2.84
1.34
2.52
SPL
3.67
0.61
2.68
Years
In the Net profit margin SPL have the advantage over the PSO, because of their all expenses are in control and budgeted and that’s why their Net profit margin is very effective.
Conclusions Earning Per Share 100 80 Rs
60 40 20 0
2008
2007
2006
PSO
81.94
27.34
43.87
SPL
93.76
12.90
57.44
Years
Earning per share in 2008 Shell leading with Rs.93.76 per share in year 2007 PSO leading Rs.27.34 per share and in 2006 SPL Rs.57.44 per share profitability its means SPL profitability level is good.
RECOMMENDATIONS
Recommendations
Both companies current ratio not showing the normal limits their Current assets should be twice the current liabilities.
PSO cost of production is higher than the SPL. Its means that PSO not producing products effectively or efficiently PSO have to reduce their Production cost.
Both companies not able to maintain the normal limit of acid test ratio because is less then 1 which means their current liabilities are more than the current assets. Current assets should be equal to current liabilities.
THANK YOU
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