Circle Advertising Internship Report

INTERNSHIP REPORT 2013 1
CHAPTER 1: COMPANY OVERVIEW

Introduction to The Circle Advertising Agency:
The Circle Advertising is a full-service advertising and marketing communications agency that
offers our clients a combination of on-target strategic thinking and excellent creative
development. Their staff has worked with a wide variety of clients, ranging from start-up
companies to some of the most recognized organizations in Pakistan.
They offer over 25+ years of hands-on experience working with some of the most prominent
organizations that market technology-related products and services to business and government
audiences, including Ministry of Information, Ministry of Interior, Ministry of Health, Ministry
of Planning & Development, UN Systems, Foreign High Commissions, National and
Multinational Brands, NGOs and many others.
Their offices in Karachi, Lahore, Islamabad and UK provide a range of services for organizations
marketing to business-to-business, business-to-government and business-to-consumer audiences.
They purchase and place media nationally and locally, and specialize in creative integrated
marketing campaigns for the clients with whom they work.
Vision: The Circle Advertising is dedicated to providing our clients with results-oriented
advertising, public relations, and total marketing support. We are committed to providing
products and services that benefit our clients.
They want to maintain a financially strong, growth-oriented company for the protection of our
employees and clients.
Mission: The mission of The Circle Advertsing is to provide results-oriented advertising, public
relations, and marketing designed to meet our client's objectives by providing strong marketing
concepts and excelling at customer service.
They seek to become a marketing partner with our clients.


They desire to measure success for our clients through awareness, increased sales, or other
criteria mutually agreed upon between the agency and the clients. They are committed to
maintaining a rewarding environment in which we can accomplish our mission.
Values:
To their employees, their most important resource, they offer:
A healthy, enjoyable, exciting, and motivational work atmosphere in which individuals are
empowered to take on responsibility, develop and present ideas, educate themselves and others,
and use their talents and abilities to their fullest capacity.
They want to continually promote teamwork, quality improvement, and excellence in all phases
of business.
This environment is upheld and promoted by open and direct communication, availability of
information resources, and an organizational-wide commitment to motivating employees to
reach their maximum potential in everything they do.
To their clients we offer:
A professional marketing system that provides the highest standards of quality and efficiency
where service, creativity, reliability, and integrity are the hallmarks of every aspect of our work.
They effort is to ensure that we are satisfying the client's needs and providing materials that are
strategically on target as well as having the ability to produce superior results.
Through creative thinking and strategic planning we will reach the marketing objectives of our
clients.
They want to be accountable for helping our clients obtain measurable goals, which may include
(but are not limited to) sales or awareness.
Organizational Design:
The Circle is a Pakistan based company. It is a part of The Circle Agency UK.


Division of the Organization:
The organization has been divided into three distinct regions countrywide; (The Circle Adv,
2011)
North Islamabad
Center Lahore
South Karachi
International UK

Hierarchy

National Corporate Office Regional Offices
Islamabad Karachi - Lahore
Head Office (Islamabad)
Regional Office (Lahore)
Regional Office (Karachi)
Regional Manager (Lhr & Khi)
CEO
General Manager

Media Manager
Productions Manager
Finance Manager
Creative Dept.
Art Dept.


Competitors:
Here are the direct competitors of The Circle Advertising in Pakistan, These organizations offer
more or less the same products as The Circle Advertising does. Indirect have been ignored.
1. Orient/McCann
2. Interflow Communications
3. IAL Saatchi & Saatchi
4. MPL Advertising
5. Ad Group Advertising
6. Channel 7 Communication
7. Maxim Advertising
8. M-Com
9. Ad Reach
10. JWT Asiatic Advertising
11. RLintas Communications
12. MNJ Advertising
13. Adcom Advertising
14. EMC Square

Services:
The Circle Advertising offers a wide range of services:
1. Advertising Campaigns
2. Branding & IDs
3. Multimedia Graphics Design
4. Creative Services
5. Media Productions & services
6. Corporate Image Building
7. PR Building
8. Email Marketing


Department Information:
There are six major departments in any advertising agency. These can be split into other sub-
departments. These departments are:
1. Account Service
2. Account Planning
3. Creative
4. Finance & Accounts
5. Media Buying
6. Production

Larger agencies may also separate out the following departments:
1. Human Resources & Facilities
2. Research
3. Web development
4. Traffic

Account Services:
The account service department comprises account executives, account managers and account
directors, and is responsible for liaising with the agency's many clients. This department is the
link between the many departments within the agency, and the clients who pay the bills.

Account Planning:
The account planning department provides consumer insights, strategic direction, research, focus
groups and assists helps keep advertising campaigns on target and on brand. To be truly
effective, advertising must be both distinctive and relevant, and planning helps on both counts."


Creative:
This is the engine of any advertising agency. It's the lifeblood of the business, because the
creative department is responsible for the product. And an ad agency is only as good as the ads
the creative department puts out. The roles within the creative department are many and varied,
and usually include:

Copywriters
Art Directors
Designers
Production Artists
Web Designers
Associate Creative Directors
Creative Director(s)

In many agencies, copywriters and art directors are paired up, working as teams. They will also
bring in the talents of other designers and production artists as and when the job requires it.
Sometimes, traffic is handled by a position within the creative department, although that is
usually part of the production department. Everyone within creative services reports to the
Creative Director. It is his or her role to steer the creative product, making sure it is on brand, on
brief and on time.

Finance & Accounts:
At the end of the day, both ad agencies and clients want money, at the center of all the money
coming into, and going out of, the agency is the finance and accounts department. This
department is responsible for handling payment of salaries, benefits, vendor costs, travel, day-to-
day business costs and everything else you'd expect from doing business. It's been said that
approximately 70% of an ad agency's income pays salary and benefits to employees. However,
this figure varies depending on the size and success of the agency in question.


Media Buying:
It is the function of the media buying department to procure the advertising time and/or space
required for a successful advertising campaign. This includes TV and radio time, outdoor
(billboards, posters, guerrilla), magazine and newspaper insertions, internet banners and
takeovers, and, well, anywhere else an ad can be placed for a fee. This usually involves close
collaboration with the creative department who came up with the initial ideas, as well as the
client and the kind of exposure they want. This department is usually steered by a media director.

Production:
Ideas are just ideas until they're made real. This is the job of the production department. During
the creative process, the production department will be consulted to talk about the feasibility of
executing certain ideas. Once the ad is sold to the client, the creative and account teams will
collaborate with production to get the campaign produced on budget. This can be anything from
getting original photography or illustration produced, working with printers, hiring typographers
and TV directors, and a myriad of other disciplines needed to get an ad campaign published.
Production also works closely with the media department, who will supply the specs and
deadlines for the jobs.

In small to mid-sized agencies, traffic is also a part of the production department. It is the job of
traffic to get each and every job through the various stages of account management, creative
development, media buying and production in a set timeframe. Traffic will also ensure that work
flows through the agency smoothly, preventing jams that may overwhelm creative teams and
lead to very long hours, missed deadlines and problematic client relationships. Traffic keeps the
agency's heart beating
.


CHAPTER 2: ORGANIZATIONAL ANALYSIS
The organizational analysis is completed on my own personal impressions and observations. I
used the internet as a source for visions, goals etc to better understand the organization and its
functioning/ I talked to various employees working there in different departments to gather my
information for this part of the analysis.
Despite having limited branches in Pakistan, the organization has a large chain of customers
attached to it. The agency has been operational in Pakistan since 1999 but it was a rebirth of the
organization. It had operations in Pakistan before as well but due to political and other reasons
the agency had to wrap up operations in the country subsequently then but as the conditions got
better they decided to re-launch their operations here.
They came back with a renewed vigor, a better structure and better employees. They decided to
keep their focus on customers more limited this time in line with the corporate strategy that has
been implemented worldwide. They opened limited branches and kept employees who had more
experience regarding advertising and had much more desire in them than the previous ones.
The organizational culture encapsulates all the elements of an informal environment with fusion
to a sense of integrity and professionalism. All the employees with full motivation are absorbed
and incredibly elated by the prevailing dominant culture. Freedom of expression is another
element of the culture that counts a lot.
An environment with no defined offices is demonstrated; even a director is as easy accessible as
an executive is. There are open spaces instead of closed cabins. Brand colors and their blend
demonstrate a sense of joy and rapture especially in every department.
SWOT Analysis:
SWOT analysis is a part of strategic planning process. With rapidly changing environment, the
organization needs to know where it stands. What resources it has within, and what resources it


needs to acquire. In order to survive, the organization must respond to the changes, grab
available opportunities and overcome its weaknesses. For that SWOT analysis needs to be done.

Internal Potency or Strengths:

The Circle Advertising is dedicated to providing our clients with results-oriented
advertising, public relations, and total marketing support. We are committed to providing
products and services that benefit our clients.

They want to maintain a financially strong, growth-oriented company for the protection
of our employees and clients.

The mission of The Circle Advertsing is to provide results-oriented advertising, public
relations, and marketing designed to meet our client's objectives by providing strong
marketing concepts and excelling at customer service.

They seek to become a marketing partner with our clients.

They desire to measure success for our clients through awareness, increased sales, or
other criteria mutually agreed upon between the agency and the clients. They are
committed to maintaining a rewarding environment in which we can accomplish our
mission.

For success in any field, leadership is the most vital part. Leaders are present everywhere
in this organization. During my time there, I witnessed how greatly even the clerks had
been performing when needed. Sometimes early morning, when no one was present to


handle customers, the guards even had enough training to guide the customers. Taking
the initiative.

Since the agency functions through an MIS (Management Information System) everyone
working there has to be well familiar with the system.
The HR department functions primarily through their head office in Islamabad and has
small sub departments in every branch to handle administrative issues that may arise.
Recruitment and selection is done through the head office which maintains a proper
portfolio of all the active employees working at the branches across Pakistan.

Weaknesses:
Lacks of certain strengths are viewed as weaknesses;
Weaknesses are:
Understaffed at times; No backup in case of absences.
During the internship the main weakness I found was lack of staff, many times when there was
burden or urgent work, there was not sufficient strength of senior resources to handle the
situation timely.
Compensation packages arent in line with the amount of work that is put in by
some of the employees.
Employees late hour sitting were in most practice, but I found no compensations in term of bonus, some
extra allowance or overtime wages.
Structure too linear; too highly dependent upon the head office in Islamabad.
I found system was not decentralized and was so dependent on head office management for making
decisions, which causes wastage of time usually.


Sometimes a bit too much complacency on part of the employees
Like all other organizations, The Circle has its issues, but these are not any issues which cannot
be eradicated over time.

Opportunities:
Opportunities present themselves in different ways for different organizations.
From what I observed the following are the opportunities for The Circle:
Affiliations with international advertising agencies
The firm is affiliated with several International bodies which give it a competitive edge, as most of the
other similar organizations are not linked with outside agencies. Such affiliations provide the firm with
the opportunity to even serve for international clients and grow globally as well as internationally.
They should take more advantage of international advertising networks and tools
As the western countries are far more ahead us Pakistanis in every field, the firm has an opportunity to
learn new skills and technologies that can be used as advertising tools. The international networks can
also be used by the firm to expand its business in the international market.
Introducing new technologies such as 3-D video mapping
Threats:
As well all know, the advertising sector of Pakistan is one of the largest operational sectors in the
market.
Therefore, the pertaining threats are:
Local and International ad agencies currently operating in Pakistan
Political and Economic Conditions
PID regulations
Security concerns in the country


Recent issues with the organization regarding downsizing worldwide
Information Access
The organization should provide information to all the present and potential customers relating to the new
advertising tools and technologies, services, some services fee structure and other matters, which are
likely to affect the customers. It should be made sure that all the customers have access to this
information. Conveying information is of no use, unless, there is some feedback from the customers.
Identification of Main Problems Areas:
From the above written analysis I have derived the following main areas of problems that The
Circle faces:
Hierarchy too flat: Hierarchy of the company is flat there are no as such set rules and
pattern of employees that who reports to whom .this aspect needs to be improved as it can
become a problem

Chain of command is too dense: As there are many departments in this organization
which makes the chain of command very dense.

Competition in the market is very high: As we have plenty of ad agencies working in
the market which makes competition very tough. So we have to expertise and mold our
self to the upcoming modern trends in order to survive and have a market edge over our
competitors.

Some of the employees need to be paid way more than they actually are: as
mentioned above the market competition is very tough so we have very few talented staff
and it is difficult to get hold of employees with required skills thats why you have to pay
more to the talented staff in order to retain them


The management from Islamabad can be too strict at times for no particular
reasons: chain of command in the head office Islamabad is very strict in terms of work.
Which sometimes becomes a hurdle in co-ordination& accomplishment of tasks?

Political and Economical conditions are losing customers: Political and economic
situation has also become a problem for the agency as there is no new company ready to
invest in Pakistan.
PEST Analysis:
Political Analysis:
Business decisions are influenced by political factors. Although Pakistan is currently under
democratic rule, still the political condition is quite volatile. At the one side we can say there is
weak and unpopular government, on the other side war against terrorist going on. With such
political conditions no business can withstand. In such circumstances, agency face the challenges
of lower profits, insecurity among the investors, Thats why the agency had to wrap up
operations in the country before but as the conditions got better they decided to re-launch their
operations here.

Economic Analysis:
Economic factors change rapidly and are sometimes difficult to predict especially in case of
Pakistan. During a recession customers spend less on optional items such as cars and appliances
so companies does not make a new logos and banners. As a result, the business environment
suffers.

Social Analysis:
Social factors reflect the constant change in societys interests, beliefs and actions. In Pakistan
we find a lot of variety in the social structure. Pakistan is a densely populated country with high


birth rates and bigger families. High unemployment prevails in the population. There is a high
trend of moving from rural to urban areas for making the income. Population is strongly bonded
to the religious and cultural norms. The Circle agency aware of their social responsibilities, thats
why they work for the betterment of country,.

Technological Analysis:
Now a days technology has played a vital role. Pakistan is keeping up with the technological
advancements in almost all fields. To remain competitive The Circle must ensure that its
processes and systems support innovation and creativity for itself and its customers and provider
sustainable services.


CHAPTER 3: INTERSHIP EXPERIENCE
Position Title
Internee, The Circle Advertising
Starting Date: 2nd July, 2012
Ending Date: 12
th
August, 2012
Duration: 40 Days
Concerned department information:
I joined The Circle Advertising at the position of intern. During my six weeks I worked mainly
in the Accounts and Finance Department. Its a large scale department that handles everything
related to client accounts. This department is the link between the many departments within the
agency, and the clients who pay the bills. In the past they were referred to as "the suits," and
there have been many battles between the account services department and the creative
department. But as most creatives known, a good account services team is essential to a good
advertising campaign. A solid creative brief is one of the main duties of account services.

Working Experience (duties and Responsibilities):
The Circle Advertising arranged various learning sessions for all of its interns. Every department
further arranged separate learning and training sessions for the interns posted in the department.
This strengthened the apprenticeship relationship that interns had with the organizations and the
departments.
1. Account Service
2. Account Planning
3. Finance & Accounts
All these sessions were beyond the text book experiences. The work in practical life is very
much different from what we study in books yet the knowledge we gained from books has
certain applications in real world. During these sessions, the mentors focus was to depart as


much information to the interns as they could. No base line concepts were involved and we
became familiar the organizational practices.
Job Description:
It includes the daily tasks that were assigned to me. I shall proceed to list them on weekly basis
as I learnt them.
Week 1 and 2:
In the first and second week I was given an overall and in depth preview into the business
development and the various products that the agency has to offer, they took this process slow to
help me absorb the information gradually and in detail so that before I started customer
interaction I was familiar with all the services that could be offered.

Week 3 and 4:
In these two weeks I was allowed to interact with client services to answer and solve any queries
that they had. These were hard weeks as I was faced with many different challenges and
situations that I had to handle. I was assisted well by the staff. I spend whatever spare time I had
to sit down with the various personnels in the accounts dept to learn how these processes are
carried out.
Week 5 and 6:
In these two weeks I was given tougher tasks as compared to the week before, I was asked to join
different departments of agency where I had to attend few meetings and meet few clients for
account service. In last week, I had become more familiar with the processes so the difficulty
level had decreased and I was comfortable working by myself


Learning/Achievements:
As a student of Finance Primarily, it was a difficult decision for me to initially shun all other
opportunities and accept this offer from The Circle. It helped me learning lot of new thing that I
would never be able to learn if I did not choose The Circle for my internship. As an internee I spent good
time in the organization, I learnt to deal with different situations. I learnt many problem solving
techniques in difficult times. The key learnings of my internship include:

Confidence: after my 6 weeks internship experience I can handle issues and work responsibilities more
confidently as I could do before my work experience.

Hardworking: As we all know hard work leads to success. I now work dedicatedly for the projects that
are assigned to me.

Team work: Working with teams is always an issue in most of the organizations as it is difficult to cope
up with the mind sets of different people. In my internship duration, I worked with teams of different
people and learnt how to adapt to different work settings.

Seeking success out of dark: The organization teaches us all the required skills and competencies that
would help us grow in our career and lead to success.

Skills used and acquired:
Analytical Skills
As a Finance intern I had used analytical skills to investigate the root cause of a problem and
work toward a solution in an organization. I used creativity and financial knowledge to resolve
problems for the company.


Interpersonal Skills
I used to interact with workers and management in all aspects of department; this would be
possible just because of good interpersonal skills. Interpersonal skills are also an important skill
when working on a team to resolve financial problems and issues in the organization.
Job Knowledge
I have an education in finance, accounting or economics to work in the finance department. As
an The Cricle advertising with an international reach, we must have knowledge and expertise in
international finance and global economics. International finance and global economics requires
a strong knowledge of compliance laws and regulation.


CHAPTER 4: FINANCIAL ANALYSIS

Balance sheet:
2007 2006 2005 2004 2003

CURRENT Assets
Cash and cash equivalents 1,477,342 3354597 446,142 208,860 19,664
Accounts receivable 325714 1259850 500122 441362 139,644
Prepaid expenses 221419 128967 57172 48499 103,309
Other current assets 10913 6743 344 2400 1,700

Total current assets 2,035,388 4,750,157 1003780 701121 264,317
PROPERTY AND
EQUIPMENT
Furniture and fixtures 40,674 36,870 24931 16572 16,572
Computer equipment and
software 93,045 74,875 51,975 48,031 47,126
Less: accumulated
depreciation -95,076 -75,678 -61,135 -50,179 -32,994
Total property and
equipment, net 38,643 36,067 15,771 14,424 30,704
GOODWILL 250,000 250000 250,000 250,000 250000

OTHER ASSETS 6,922 6,922 6,922 11,500 11500

TOTAL ASSETS 2,330,953 5,043,146 1,276,473 977,045 556,521

CURRENT
LIABILITIES
Accounts payable 116,837 257,717 271,751 489,961 372,223


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Customer advance
payments 3,650 89,804 11,050 80,784 114,707
Accrued salaries and
wages 95,348 110,643 907,785 618,688 367,415
Accrued liabilities 47,822 267,887 80,855 29,888 127,267
Other current liabilities 373 8,430 1,739 33 1,263
Obligations under capital
leases 887 3,165 4,841 2,342 2,201
Total current liabilities 264,917 737,646 1,525,629 1,553,174 1,197,830
leases, long-term 0 887 4,052 2,211 4,553
Total liabilities 264,917 738,533 1,529,681 1,555,385 1,202,383

Commitments and
contingencies
Shareholders equity
(DEFICIT)
Preferred stock series A, 3 3 14 14 14
Preferred stock series B, 0 0 0 0 0
Common stock, 10,881 10,881 19,095 18,892 18,859
Additional paid-in capital 6,735,101 6,735,101 2,126,685 2,099,928 2,033,534
Accumulated deficit -4,679,949 -2,441,372 -2,399,002 -2,697,174 -2,698,269
Total shareholders equity
(deficit) 2,066,036 4,304,613 -253,208 -578,340 -645,862
TOTAL LIABILITIES
AND
SHAREHOLDERS
EQUITY (DEFICIT) 2,330,953 5,043,146 1,276,473 977,045 556,521


Income Statement:
2007 2006 2005 2004 2003
REVENUES 3,434,654 4,824,614 5477086 3668871 1,955,404
COST OF GOODS
SOLD 2,307,500 3,000,207 3554352 2594344 1,447,225
Gross profit 1,127,154 1,824,407 1,922,734 1,074,527 508,179
OTHER OPERATING
EXPENSE
3,484,863 2,339,950

Selling, administrative
and other operating
expenses 1587877 999,338 1,743,113
Income (from
operations -2,357,709 -515,543 -36,685 75,189 -1,684,934
OTHER INCOME
(EXPENSE)
Interest expense -1,341 -12,573 -36,685 -77,128 -51,316
Interest and other
income 112,454 31,006 0 3,034 754
Total other income
(expense) 111,113 18,433 -36685 -74,094 -50,562

Income before income
taxes -2,246,596 (497,110) 298,172 1,095 -1,735,496
Income Taxes 0 0 0 0 0

NET INCOME
(LOSS) - 2,238,577 -42,370 298,172 1,095 -1,735,496

NET INCOME (LOSS)
PER SHARE, basic (0.21) (0.01) 0.02 0 (0.09)
WEIGHTED
AVERAGE NUMBER
OF SHARES 10,880,867 6,439,802 19008175 18,878,549 18,807,762


OUTSTANDING, basic
NET INCOME (LOSS)
PER SHARE, diluted (0.21) (0.01) 0.02 0 (0.09)
WEIGHTED
AVERAGE NUMBER
OF SHARES
OUTSTANDING,
diluted 10,880,867 6,439,802 1907785 18,947,459 18,807,762

Ratio Analysis:
Ratio analysis is basically used to understanding the financial health of a business entity. With
the help of ratios we can easily calculate from current year performance of the companies and are
then compared to previous years. Ratio analysis conducts a quantitative analysis of information
in a companys financial statements

Liquidity Analysis:
Liquidity is a companys ability to meet its maturing short term obligations. Liquidity is
essential to conducting business activity, particularly in times of adversity, such as when
business is shut down by strike or when operating losses ensue due to an economic recession etc.
Liquidity ratios are static in nature as of year-end. Therefore, it is important for management to
look at expected future cash flows. If future cash outflows are expected to be high relative to
inflows, the liquidity position of the company is deteriorate.

Current Ratio:
Current ratio is equal to current assets divided by current liabilities. This ratio is used to measure
the ability of an enterprise to meet its current liabilities out of current assets. The formula can be
written as:
2003 2004 2005 2006 2007

0.220 0.451 0.657 6.439 7.683


Quick Ratio:
The quick ratio, also known as the acid-test ratio is strongest test of liquidity. In it more liquid
current assets are divided by current liabilities. It can be written as:

2003 2004 2005 2006 2007
0.220 0.451 0.657
6.439
7.683

Debtor Turnover Ratio:
The relationship of net sales to total debt is known as the Debtors Turnover Ratio.

2003 2004 2005 2006 2007
0 12.629 11.635 5.482 4.332

Fixed Asset Turnover:
The relationship of net sales to total assets is known as the Fixed Asset Turnover.

2003 2004 2005 2006 2007
63.685 254.358 347.288 133.76 88.88

Leverage Ratio
Leverage equivalent to solvency or long-term debt. Solvency is a companys ability to meet its
long-term obligations as they become due. An analysis of solvency concentrates on the long-term


financial and operating structure of the business. The degree of long-term debt in the capital
structure is also considered. Further, solvency is dependent upon profitability since in the long
run firm will not be able to meet its debts unless it is profitable.

Debt/ Equity Ratio:
The debt/equity ratio is a significant measure of solvency since the high degree of debt in capital
structure makes difficult for organizations. Excessive debt will result in less financial flexibility
.Debt/equity ratio equals to total liabilities divided by equity.

2003 2004 2005 2006 2007
-1.861 -2.689 -5.901 0.171 0.128

Total Asset Turnover:
The total asset turnover ratio is useful in evaluating a companys ability to use its asset base
efficiently to generate revenue. A low ratio may be due to many factors, and it is important to
identify the underlying reasons.

2003 2004 2005 2006 2007
3.513 3.755 4.290 0.956 1.473

Net Working Capital:


Net working capital is equal to current assets less current liabilities. Current assets are those
assets that are expected to convert into cash or used up within 1 year. Current liabilities are those
liabilities that must be paid within 1 year; they are paid out of current assets. Net working capital
is a safety cushion to creditors.

2003 2004 2005 2006 2007
-933513 -852053 -521849 401254 1770471

Profitability Ratio:
It is used to assess a business's ability to generate earnings as compared to its expenses and other
relevant costs incurred during a specific period of time.

Gross Profit Margin:
The gross profit margin reveals the percentage of each rupee left over after the business has paid
for its goods. The highest the gross profit earned the better. Gross profit equals net sales less cost
of goods sold.

2003 2004 2005 2006 2007
25.98% 29.28% 35.10% 37.81% 32.82%

Net Margin:
The ratio of net Profit after tax to net sales is called the Net profit margin. It indicates the
profitability generated from revenue and hence is an important measure of operating
performance.


Return on Equity:
ROE measures the overall firm performance. ROE compares net profit after taxes (minus
preferred stock dividends, if any) to the equity that shareholders have invested in the firm:

2003 2004 2005 2006 2007
-2.6 -0.0018 -1.177 -0.0098 -1.08

Return on Asset:
The return on total assets (ROA) indicates the efficiency with which management has used its
available resources to generate income.

2003 2004 2005 2006 2007
-3.11 0.0011 0.23 -0.008 -0.96

Vertical Analysis:
A method of financial statement analysis in which each entry for each of the three major
categories of accounts (assets, liabilities and equities) in a balance sheet is represented as a
proportion of the total account. The main advantages of vertical analysis are that the balance
2003 2004 2005 2006 2007
-88.75% 0.029% 5.44% -0.87% -65.17%


sheets of businesses of all sizes can easily be compared. It also makes it easy to see relative
annual changes within one business.

Balance sheet:

2007 2006 2005 2004 2003
Cash and cash equivalents 63.37% 66.51% 34.95% 20.94% 3.53%
Accounts receivable 13.97% 24.9% 39.17% 45.1% 25.09%
Prepaid expenses 9.49% 2.55% 4.47% 4.96% 18.56%
Other current assets 0.46% 0.13% 0.026% 0.24% 0.30%
Total current assets 87.31% 94.19% 78.63% 71.75% 47.49%
PROPERTY AND
EQUIPMENT
Furniture and fixtures 1.74% 0.73% 1.95% 1.69% 2.97%
software 3.99% 1.48% 4.07% 4.91% 8.51%
Less: accumulated
depreciation -4.07% -1.50% -4.78% -5.13% -5.92%
Total property and
equipment, net 1.65% 0.71% 1.23% 1.47% 5.51%
GOODWILL 10.72% 4.95% 19.58% 25.58% 44.92%
OTHER ASSETS 0.29% 0.13% 0.54% 1.17% 2.06%
TOTAL ASSETS 100 100 100 100 100

CURRENT LIABILITIES
Accounts payable 5.012% 5.11% 21.28% 50.14% 66.88%


Customer advance payments 0.15% 1.78% 0.86% 8.26% 20.61%
Accrued salaries and wages 4.09% 2.19% 11.16% 63.32% 66.01%
Accrued liabilities 2.05% 5.31% 6.33% 3.05% 22.86%
Other current liabilities 0.016% 0.167% 0.136% 0.0033% 0.22%
leases 0.038% 0.062% 0.379% 0.239% 0.395%
Total current liabilities 11.36% 14.62% 119.51% 158.96% 215.23%

leases, long-term 0 0.017% 0.317% 0.22% 0.81%
Total liabilities 11.36% 14.64% 119.83% 159.19% 216.05%

Commitments and
contingencies

Shareholders equity
(DEFICIT)
Preferred stock series A, 0.000129% 0.000059% 0.001% 0.0014% 0.0025%
Common stock 0.466% 0.215% 1.49% 1.93% 3.38%
Additional paid-in capital 288.94% 133.54% 166.6% 214.92% 365.4%
Accumulated deficit -200.77% -48.45% -187.9% -276.0% -484.8%

Total shareholders equity
(deficit) 88.63% 85.35% -19.83% -59.19% -116.0%
TOTAL LIABILITIES
AND SHAREHOLDERS
EQUITY (DEFICIT) 100 100 100 100 100


Income Statement:
2007 2006 2005 2004 2003
REVENUES 100 100 100 100 100
COST OF GOODS SOLD 67.18% 62.18% 64.89% 70.71% 74.01%
Gross profit 32.81% 31.81% 35.104% 29.28% 25.98%
OTHER OPERATING
EXPENSE
Selling, administrative and
other operating expenses 101.46% 48.5% 28.99% 27.23% 73.8%
Income (Loss) from operations -68.64% -10.68% -0.66% 2.04% -86.16%
OTHER INCOME (EXPENSE)
Interest expense -0.036% -0.26% -0.66% -2.10% -2.62%
Interest and other income 3.27% 0.64% 0 0.082% 0.038%
Total other income (expense) 3.23% 0.382% -0.66% -2.01% -2.58%
Income before income taxes -65.4% -10.3% 0 0 -88.75%
NET INCOME (LOSS) -65.17% -0.87% -5.44% -0.02% -88.75%


Horizontal Analysis:
In this ratio companies compares ratios or line items in a company's financial statements over a
certain period of time.
Income Statement:
2003 2004 2005 2006 2007
REVENUE 100% 187.62% 280.09% 246.73% 175.64%
COST OF GOODS SOLD 100% 179.26% 245.59% 207.3% 159.44%
Gross profit 100% 211.44% 378.35% 359.0% 221.80%
OTHER OPERATING
EXPENSE
Selling, administrative and
other operating expenses 100% 57.33% 91.09% 0 0
Income from operations 100% -4.46% 2.17% 30.59% 139.92%
NET INCOME (LOSS) PER
SHARE, basic 0 0 0 0 0
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING, basic -316.7% -133.47% 5.44% 0.02% 961.83%
NET INCOME (LOSS) PER
SHARE, diluted 0 0 0 0 0
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING, diluted -316.2% -133.47% 3.65% 0 961.83%


OTHER INCOME
(EXPENSE)
Interest expense 100% 150.30% 71.48% 24.50% 2.613%
Interest and other income
Total other income
(expense) 100% 146.54% 72.554% -36.45% -219.75%

Income before income
taxes 100% -0.063% -17.18% 28.64% 129.44%
NET INCOME (LOSS)
NET INCOME (LOSS)
PER SHARE, basic 0 0 0 0 0
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING, basic 100% 100.37% 101.06% 34.24% 57.85%
NET INCOME (LOSS)
PER SHARE, diluted 0 0 0 0 0
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING, diluted 100% 100.74% 10.14% 34.24% 57.85%

Balance sheet:
2003 2004 2005 2006 2007
CURRENT Assets
Cash and cash
equivalents 100 1062% 2268% 17059% 7512%
Accounts receivable 100 316.06% 358.14% 902.18% 233.24%
Prepaid expenses 100 46.9% 55.3% 124.8% 214.3%


Other current assets 100 141.17% 20.23% 396.64% 641.94%
Total current assets 100 265.25% 379.76% 179.7% 0.0007%
PROPERTY AND
EQUIPMENT
Furniture and fixtures 100 100% 0.042% 222.4% 245.43%
software 100 101.92% 150.4% 222.4% 197.43%
Less: accumulated
depreciation 100 -152% -121.8% -229.3% -288.1%
Total property and
equipment, net 100 46.9% 51.35% 117.46% 125.8%
GOODWILL 100 100% 100% 100% 100%
OTHER ASSETS 100 100% 60.19% 60.19% 60.19%
TOTAL ASSETS 100 175.5% 229.3% 906.1% 418.8%

CURRENT
LIABILITIES
Accounts payable 100 131.63% 73% 69.24% 31.38%
Customer advance
payments 100 70.42% 9.63% 78.28% 3.18%
Accrued salaries and
wages 100 168.3% 247% 30.11% 25.95%
Accrued liabilities 100 23.48% 63.53% 210.45% 37.57%
Other current liabilities 100 2.61% 137.68% 667.45% 29.53%
leases 100 106.4% 219.9% 143.7% 40.29%
Total current liabilities 100 129.66% 127.36% 61.58% 22.1%

leases, long-term 100 48.56% 219.94% 143.7% 40.29%
Total liabilities 100 129.3% 127.2% 61.4% 22.03%

Commitments and
contingencies

Shareholders equity
(DEFICIT)
Preferred stock series A, 100 100% 100% 21.42% 21.42%


Common stock, $0.001 100 99.82% 101.25% 57.69% 57.69%
Additional paid-in capital 100 103.26% 104.58% 331.2% 331.2%
Accumulated deficit 100 -99.95% -88.9% -90.47% 173.44%

Total shareholders
equity (deficit) 100 -89.54% -89.9% 666.49% 319.88%
TOTAL LIABILITIES
AND
SHAREHOLDERS
EQUITY (DEFICIT) 100 175.56% 229.36% 906.1% 418.84%


CHAPTER 5: RECOMMENDATIONS
Based on the departmental and organizational analysis, the following are the recommendations
that I have put forward for The Circle Pakistan:
Open new branches; if I havent said this enough before, the agency needs new branches,
there is sometimes too much pressure on the existing branches with the customers being
too many. New branches in some of the other cities like Quetta and Peshawar could not
only bring in new customer but would also help ease the pressure on the existing
branches
Some of the employees follow the policies and rules to the very core, which annoys the
customers who want their service no matter what. A little entrepreneurial behavior on
their part could prove to be a success
Staff Training would enhance the skills of employees

Management should be improvise

Internal control system also needs improvements

Staff monitoring would also be helpful

On time promotions would lead employees to perform their tasks more efficiently and
effectively

Employee incentives and bonuses would encourage employees and they would perform
their tasks efficiently

Recruitment and selection on the basis of merit should also be there


Circle Advertising Internship Report

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INTERNSHIP REPORT 2013 1

CHAPTER 1: COMPANY OVERVIEW

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