Table of contents

Chapter# 1.Introduction
Chapter# 2.Trennd Analysis
(Vertical and Horizontal)
Chapter# .!e"era#e Analysis
Chapter# $.%rofitability Analysis
Chapter# &.Cash 'lo( Analysis
Chapter# ).Acti"ity*+fficiency Analysis
,iblio#raphy * Appendi-

Chapter#1

Introduction
All financial statements are essentially historically historical documents. They tell what
has happened during a particular period of time. However most users of financial
statements are concerned about what will happen in the future. Stocholders are
concerned with future earnings and dividends. Creditors are concerned with the
company!s future ability to repay its debts. "anagers are concerned with the company!s
ability to finance future e#pansion. $espite the fact that financial statements are
historical documents% they can still provide valuable information bearing on all of these
concerns.
&inancial statement analysis involves careful selection of data from financial statements
for the primary purpose of forecasting the financial health of the company. This is
accomplished by e#amining trends in ey financial data% comparing financial data
across companies% and analy'ing ey financial ratios.
"anagers are also widely concerned with the financial ratios. &irst the ratios provide
indicators of how well the company and its business units are performing. Some of
these ratios would ordinarily be used in a balanced scorecard approach. The specific
ratios selected depend on the company!s strategy. &or e#ample a company that wants
to emphasi'e responsiveness to customers may closely monitor the inventory turnover
ratio. Since managers must report to shareholders and may wish to raise funds from
e#ternal sources% managers must pay attention to the financial ratios used by e#ternal
inventories to evaluate the company!s investment potential and creditworthiness.
About co.pany/
History/
(nilever was formed in 1)*+ when the $utch "argarine Company "argarine (nie
merged with ,ritish soap maer -ever ,rothers.Companies were competing for the
same raw materials% both were involved in large.scale mareting of household products
and both used similar distribution channels. ,etween them% they had operations in over
/+ countries.
"argarine (nie grew through mergers with other margarine companies in the 1)0+s.
-ever ,rothers was founded in 1112 by 3illiam Heseth -ever. -ever established soap
factories around the world. In 1)14% he began to diversify into foods% ac5uiring fish% ice
cream and canned foods businesses.
In the Thirties% (nilever introduced improved technology to the business. The business
grew and new ventures were launched. The entrepreneurial spirit of the founders and
their caring approach to their employees and their communities remain at the heart of
(nilever!s business today.
It is the world!s third.largest consumer goods company measured by 0+11 revenues
6after 7rocter 8 9amble and :estle;. (nilever 7aistan is the largest fast.moving
consumer goods 6&"C9; company with more than 2+ brands in 7aistan. The
(nilever!s Head <ffice was shifted to =arachi from the >ahim ?ar =han site in the mid
@+!s.
(nilever is dedicated to fulfill the needs of customers everywhere .Around the world
unilever foods and home and personal care brands are chosen by millions individuals
consumers every day. They were providing their best services through their best brands
in local and in international maret.
(nilever has been providing their 5uality products and services for more than 4+ years.
(nilevrAs most popular brands are $ove% HellmannAs% -ipton% -u#% "agnum% <mo and
Baseline in the world. (nileverAs strategy is to focus research and development and
mareting on our top performing brands% that is% those that are most in demand from
consumers.
So unilever creates its different brands they vary from customer to customer and vary
country to country for the consumers according to their taste and choices. &or e#ample%
among (nileverAs many teas% it produces around 0+ separate brands of blac tea
specifically tailored for consumption in over 0+ different countries and also introduces its
new flavors to the consumers.
0ur "ision/
3e wor to create a better future every day. 3e help people feel good% loo good and
get more out of life with brands and services that are good for them and good for others.
3e will inspire people to tae small everyday actions that can add up to a big difference
for the world. 3e will develop new ways of doing business with the aim of doubling the
si'e of our company while reducing our environmental impact.
Co.pany Infor.ation/
,oard of 1irectors/ Co.pany 2ecretary/
"r. Chsan A."ali "r.Amar :aseer
Chairman
"s. &ariyha Subhani Audit Co..ittee/
Chief C#ecutive <fficer "ian.Dulfi5ar H."annoo 6Chairman;
"r. Imran Husain "ian ".Adil "annoo
$irector E Chief &inancial <fficer "ember
"ian.Dulfi5ar H."annoo "r. ". Faysar Alam
$irector "ember
"ian ".Adil "annoo "r. A'har Shahid
$irector Secretary 8 Head of internal audit
"r.amal "annoo 3e#istered 0ffice/
$irector Avari 7la'a. &atima Ginnah >oad%
=arachi
"r.,adaruddin &.Bellani
$irector
"r. ". Faysar Alam
$irctor
"s. Sha'ia Syed
$irector
Auditors/
"essrs A.&.&erguson 8 Co
Charter Accountants
State -ife ,uilding :o. 1.C
I.I.Chundrigar >oad =arachi
Chapter# 2
Trend Analysis (Vertical and Horizontal)
Trend analysis is one of the tools for the analysis of the companyAs monetary
statements for the investment purposes. Investors use this analysis tool a lot in order to
determine the financial position of the business. In a trend analysis% the financial
statements of the company are compared with each other for the several years after
converting them in the percentage. In the trend analysis% the sales of each year from the
0++1 to 0+11 will be converted into percentage form in order to compare them with each
other.
Apart from trend analysis% the investors also use other techni5ues for the analysis
purposes% and this helps them in achieving complete data and updated view on the
companyAs current financial position.
Trend analysis has a great advantage that it can also be used to predict the future
events. This is possible by forecasting the future cash flow based on the data available
of the past. 3ith the help of trend analysis% you can predict the future and trac the
variances to add performance.
However% in management accountancy% the calculation of trends is based on the data of
the past. This is favorable in deducing the current situation of the company and the
increase in the financial position of the company and growth over the past years.
Apart from investments and financial data of the company% the trend analysis is also a
useful tool that can be used effectively for the proHections. This allows the company to
conduct maret research and draw trends to forecast the demand of different products.
This helps in the mareting purposes% and company can deduce results to select the
right mareting approach to address the issues. Trend analysis can pretty much apply to
all the techni5ues% which re5uires forecasting therefore% that it is a very useful tool in
business.
Common si'e analysis based on vertical and hori'ontal. The two simplest ways to
analy'e the financial statements are vertically and hori'ontally. A vertical analysis shows
the relationships among components of one financial statement% measured as
percentages. <n your balance sheet% each asset is shown as a percentage of total
assetsI each liability or e5uity item is shown as a percentage of total liabilities and
e5uity. <n your statement of profit and loss% each line item is shown as a percentage of
net sales.
A hori'ontal analysis provides you with a way to compare your numbers from one period
to the ne#t% using financial statements from at least two distinct periods. Cach line item
has an entry in a current period column and a prior period column. Those two entries
are compared to show both the dollar difference and percentage change between the
two periods
(1)Vertical Analysis
'or.ula 4 A.ount* Total sales5166 ('or inco.e state.ent)
Income statement ?ear 0++1
Sales *+1114)E*+1114)J1++K
Cost of sale 61)00/4@@;E*+1114)J@0./2/K
9ross profit 112411*E*+1114)J*4.2/2K
$istribution cost 62*@1//;E*+1114)J14.*)@K
Administrative e#penses 6/2/01; E*+1114)J1./4*K
<ther operating e#penses 6/*)/+; E*+1114)J1./02K
<ther operating income 0+)*@E*+1114)J+.@4)K
>estructuring cost .
7rofit from operations 2202//E*+1114)J14.)01K
&inance cost 6000**;E*+1114)J+.401K
7rofit before ta#ation 2*+*11E*+1114)J14.0+4K
Ta#ation 61114@2; E*+1114)J2.1)4K
7rofit after ta#ation */12/@J11.*+)K
'or the further left years sa.e procedure (ill be adopted.
Trend Analysis of Inco.e 2tate.ents of 7nile"er %a8istan 'oods
!i.ited
Vertical Analysis
Income
statement 0++1 0++) 0+1+ 0+11
Sales 1++K 1++K 1++K 1++K
Cost of sale @0./2/K @0.12+K @0.+1@K @1.+*)K
9ross profit *4.2/2K *4.1/)K *4.)1*K *1.)@+K
$istribution cost 14.*)@K 0*.@1*K 1)./@2K 14.0+2K
Administrative
e#penses 1./4*K 1./14K 1.042K 0.114K
<ther operating
e#penses 1./02K *.2@0K 0.+@4K 1./*0K
<ther operating
income +.@4)K +.1)*K +.21*K 1.@41K
>estructuring
cost . 1.22@K +.020K +.@1/K
7rofit from
operations 14.)01K 4.10*K 1@.)01K 11.2@K
&inance cost +.401K +.@@@K +.*+1K +.1*1K
7rofit before
ta#ation 14.0+4K 4.12@K 12.)1*K 11./00K
Ta#ation 2.1)4K 1.)01K 2.124K 2.)*)K
7rofit after
ta#ation 11.*+)K 2.0*2K 1+.102K 10./1*K
Co..ents/
1. 2ales/

Sales are 1++K all the year because in vertical analysis sales used as base.
2. Cost of sale/

In 0++1 C9S is @0./2/K then in 0++) become @0.12+K minor increase or in 0+1+
become @0.+1@K that is minor decrease and in 0+11 most decreasing C9S is @1.+*)K
as compared to previous year that company bears.

9. :ross profit/

In 0++1 gross profit is *4.2/2K that little decrease in 0++) by *4.1/)K and increase in
0+1+ is *4.)1*K and in 0+11 higher gross profit *1.)@+K company earned.
. Ad.inistrati"e e-penses/
in 0++1 administrative e#penses 1./4*K or in 0++) minor increase e#penses by
1./14K or in 0+1+ e#penses 1.042K or in 0+11 company e#penses more increase by
0.114K.It means company have to improve their policies in dealing with e#penses.
.
$. %rofit fro. operation/

In 0++1 company earned profit 14.)01K. in 0++) company earned profit 4.10*K that is
low as compared to previous year company should improve their policy.in 0+1+
company earned profit 1@.)01K good policy and company should carry on their policy.
0+11 company earned high profit 11.2@1K good policy and company should carry on
their policy.
&. 'inance cost/

In 0++1 company bear cost +.401K. In 0++) company bear cost +.@@@K. In 0+1+
company bear cost +.*+1K. In 0+11 company bear cost +.1*1K. it means company
adopted good strategy to minimi'e their finance cost every year.
). Ta-ation/

In 0++1 company pays ta# 2.1)4K. In 0++) company ta# 1.)01K company pay low ta#
due low profit. In 0+1+ company pays ta# 2.124K company pays high ta# due to high
profit. In 0+11 pays ta# 2.)*)K. It means company pays more high ta# due to more high
profit.
(2)Horizontal Analysis/
Inco.e state.ent ;ear 266< as co.pared to 266)
Sales Sales L Sales J1++K
Cost of sale Cost of sale L Cost of sale J1++K
9ross profit 9ross profit L 9ross profit J1++K
$istribution cost $istribution cost L $istribution cost J1++K
Administrative
e#penses Administrative e#penses L Administrative e#penses J1++K
<ther operating
e#penses
<ther operating e#penses L <ther operating e#penses
J1++K
<ther operating income <ther operating income L <ther operating income J1++K
>estructuring cost >estructuring cost L >estructuring cost J1++K
7rofit from operations 7rofit from operations L 7rofit from operations J1++K
&inance cost &inance cost L &inance cost J1++K
7rofit before ta#ation 7rofit before ta#ation L 7rofit before ta#ation J1++K
Ta#ation Ta#ation L Ta#ation J1++K
7rofit after ta#ation 7rofit after ta#ation L 7rofit after ta#ation J1++K
'or the further left years sa.e procedure (ill be adopted.
Hori'ontal analysis
Income
statement 0++1 0++) 0+1+ 0+11
Sales 1++K 1+).2@+K 11).@4@K 100.02@K
Cost of sale 1++K 11*.112K 111.+11K 10+.**1K
9ross profit 1++K 1+*.)04K 100.*@*K 102./++K
$istribution cost 1++K 1*1./1@K )@.@2@K 1+1.+4@K
Administrative
e#penses 1++K 1+.22*K 1+0.@//K 04+.+/+K
<ther operating
e#penses 1++K 01).1+1K /*.+4@K 1*@.21)K
<ther operating
income 1++K 1//.+@0K 41.1@4K *2+.04)K
>estructuring
cost ......... 1++K 1)./11K 0)4.241K
7rofit from
operations 1++K /4.11+K 0/).1)2K 1*).0)2K
&inance cost 1++K 1+1.044K 22.014K 22.101K
7rofit before
ta#ation 1++K /2.221K 0@4.0@*K 1/+.)11K
Ta#ation 1++K *2.@12K *01.011K 1/+.1+4K
7rofit after
ta#ation 1++K 2+.400K 0/4.//2K 1/+.)4+K
Co..ents/
0++1 is the base year so all the items in 0++1 are 1++K.
1. 2ales/


In 0++) company sales are 1+).2@+K. In 0+1+ company sales are 11).@4@K company
adopted good policy and carry on. In 0+11 company generate high sales of 100.20@K.It
means good policy and should carry on this policy.
2. Cost of sales/

In 0++) company bears cost 11*.112K. In 0+1+ company bears cost 111.+11K that is
high as compared to previous year. In 0+11 company bears cost 10+.**1K that is high
as compared to all previous years. Company should improve their policy.
9. :ross profit/

In 0++) company earned gross profit 1+*.)04K. In 0+1+ company earned profit
100.*@*K that is higher as compared to previous year. In 0+11 company earned high
profit of 102./++K.it means company adopted overall good policy.
.
. Ad.inistrati"e e-penses/


In 0++) company bears administrative e#pense @+.22*K. In 0+1+ increased by
1+0.@//K. in 0+11 more increased 04+.+/+K.company shows wea performance.
$. %rofit fro. operation/

In 0++) company earned profit from operation /4.11+K. :e#t year in 0+1+ high profit
earned from operation is 0/).1)2K. In 0++1 company earned low profit from operation
as compared to previous year 1*).0)2K.

&. 'inance cost/

In 0++)company bears finance cost 1+1.044K. In 0+1+ company performance is better
as compared to previous year and bears low finance cost. In 0+11 little wea but
appro#imately same performance is 22.101K.
). Ta-ation/

In 0++) company pays ta# *2.@12K. In 0+1+ pays more ta# *01.011K due to more
profit and company performance wea as compared to previous year. In 0+11
company performance is better as compared to previous year and pays low ta#
1/+.)4+K.


Chapter# 9
!i=uidity Analysis
-i5uidity ratios are the ratios that measure the ability of a company to meet its short
term debt obligations. These ratios measure the ability of a company to pay off its short.
term liabilities when they fall due.
The li5uidity ratios are a result of dividing cash and other li5uid assets by the short term
borrowings and current liabilities. They show the number of times the short term debt
obligations are covered by the cash and li5uid assets. If the value is greater than 1% it
means the short term obligations are fully covered.
9enerally% the higher the li5uidity ratios are% the higher the margin of safety that the
company possesses to meet its current liabilities. -i5uidity ratios greater than 1 indicate
that the company is in good financial health and it is less liely fall into financial
difficulties.
"ost common e#amples of li5uidity ratios include current ratio% acid test ratio 6also
nown as 5uic ratio;% cash ratio and woring capital ratio. $ifferent assets are
considered to be relevant by different analysts. Some analysts consider only the cash
and cash e5uivalents as relevant assets because they are most liely to be used to
meet short term liabilities in an emergency. Some analysts consider the debtors and
trade receivables as relevant assets in addition to cash and cash e5uivalents. The value
of inventory is also considered relevant asset for calculations of li5uidity ratios by some
analysts.
The concept of cash cycle is also important for better understanding of li5uidity ratios.
The cash continuously cycles through the operations of a company. A companyAs cash
is usually tied up in the finished goods% the raw materials% and trade debtors. It is not
until the inventory is sold% sales invoices raised% and the debtorsA mae payments that
the company receives cash. The cash tied up in the cash cycle is nown as woring
capital% and li5uidity ratios try to measure the balance between current assets and
current liabilities.
A company must possess the ability to release cash from cash cycle to meet its financial
obligations when the creditors see payment. In other words% a company should
possess the ability to translate its short term assets into cash. The li5uidity ratios
attempt to measure this ability of a company.
1/ Current 3atio 4 Total current assets > Total current liabilities
Current >atio for the year 0++1 J 21@/*4L@40*11
J+.44M1
Co..ent and su##estion/
Company has +.44 total current assets to recover its 1 rupee liability. Current assets are
less than current liabilities.so CompanyAs li5uidity condition is poor. So Company has to
improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
Current >atio J Total current assets L Total current liabilities
Current >atio for the year 0++) J @++@1*L@1+@1*
J+.1)M1
Co..ent and su##estion/
Company has +.1) total current assets to recover its 1 rupee liability. Current assets are
less than current liabilities.so companyAs li5uidity condition is poor. So company has to
improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
Current >atio J Total current assets L Total current liabilities
Current >atio for the year 0+1+ J 4+/102L@/@1)@
J1.+)M1
Co..ent and su##estion/
Company has 1.+) total current assets to recover its 1 rupee liability. Current assets are
more than current liabilities.so companyAs li5uidity condition is good. So company has to
carry on their policy in future.
If industry averages above then our company performance is not good and vice versa.
Current >atio J Total current assets L Total current liabilities
Current >atio for the year 0+11 J 1+*@*1/ L 11411+/
J+.11M1
Co..ent and su##estion/
Company has +.11 total current assets to recover its 1 rupee liability. Current assets are
less than current liabilities.so companyAs li5uidity condition is poor. So Company has to
improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
2. ?uic8 ratio 4 Total current assets@in"entory (stores A spares B
stoc8 in trade) >Total current liability or
?uic8 ratio 4 ?uic8 assets > Total current liabilities
Fuic >atio for the year 0++1 J 21@/*4.61*1+/N*20*)/; L@40*11
J+.00M1
Co..ent and su##estion/
Company has +.00 as a 5uic asset to recover its 1 rupee as total current liabilities. So
the companyAs li5uidity condition is poor. So Company has to improve their policy in
future.
If industry averages above then our company performance is not good and vice versa.
Fuic ratioM J Total current assets.inventory 6stores 8 spares N stoc in trade; LTotal
current liability
Fuic >atio for the year 0++) J @++@1*.61/@*@N***1/+; L@1+@1*
J+.*4M1
Co..ent and su##estion/
Company has +.*4 as a 5uic asset to recover its 1 rupee as total current liabilities. So
the companyAs li5uidity condition is poor. So Company has to improve their policy in
future.
If industry averages above then our company performance is not good and vice versa.
Fuic ratioM J Total current assets.inventory 6stores 8 spares N stoc in trade; LTotal
current liability
Fuic >atio for the year 0+1+ J 4+/102.614/21N*21+)/; L@/@1)@
J+.2+M1
Co..ent and su##estion/
Company has +.2+ as a 5uic asset to recover its 1 rupee as a total current liabilities.
So the companyAs li5uidity condition is poor. So Company has to improve their policy in
future.
If industry averages above then our company performance is not good and vice versa.
Fuic ratioM J Total current assets.inventory 6stores 8 spares N stoc in trade; LTotal
current liability
Fuic >atio for the year 0+11 J 1+*@*1/.61@4++N2)*1@0; L11411+/
J+.*@M1
Co..ent and su##estion/
Company has +.*@ as a 5uic asset to recover its 1 rupee as a total current liabilities.
So the companyAs li5uidity condition is poor. So Company has to improve their policy in
future.
If industry averages above then our company performance is not good and vice versa.
9. Cash ratio 4cash > Total current liabilities
Cash ratio for the year 0++1 J 1+00L@40*11
J+.+1M1
Co..ent and su##estion/
Company has +.+1 as a hard cash to recover its 1 rupee as a l current liabilities.So the
companyAs li5uidity condition is poor. So Company has to improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
Cash ratio Jcash L Total current liabilities
Cash ratio for the year 0++) J /+@)@L@1+@1*
J+.+2M1
Co..ent and su##estion/
Company has +.+2 as a hard cash to recover its 1 rupee as a l current liabilities. So the
companyAs li5uidity condition is poor. So Company has to improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
Cash ratio Jcash L Total current liabilities
Cash ratio for the year 0+1+ J 1+/*@L@/@1)@
J+.10M1
Co..ent and su##estion/
Company has +.10 as a hard cash to recover its 1 rupee as a l current liabilities. so the
companyAs li5uidity condition is poor. So Company has to improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
Cash ratio Jcash L Total current liabilities
Cash ratio for the year 0+11 J )*010L11411+/
J+.+4M1
Co..ent and su##estion/
Company has +.+4 as a hard cash to recover its 1 rupee as a l current liabilities. So the
companyAs li5uidity condition is poor. So Company has to improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
. Cor8in# capital 4Total current assets @Total current liabilities
3oring capital for the year 0++1J21@/*4.@40*11
J 612214/;
Co..ents and su##estion/
Company has deficiency by 612214/; rupees to cover our current liabilities.
HintM more net negative woring capital means poor li5uidity condition. So company has
to improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
3oring capital JTotal current assets .Total current liabilities
3oring capital for the year 0++)J@++@1*.@1+@1*
J 61++++;
Co..ents and su##estion/
Company has deficiency by 61++++;rupees to cover our current liabilities.
HintM more net negative woring capital means poor li5uidity condition. So company has
to improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
3oring capital JTotal current assets .Total current liabilities
3oring capital for the year 0+1+ J 4+/102.@/@1)@
J24)0)
Co..ent and su##estion/
Company has 24)0) e#cessive amounts current assets after paying all current
liabilities.
HintM high positive woring capital mean good li5uidity condition and also favorable
condition. So company has to carry on their policy in future.
If industry averages above then our company performance is not good and vice versa.
3oring capital JTotal current assets .Total current liabilities
3oring capital for the year 0+11 J 1+*@*1/.11411+/
J61*/4)+;
Co..ents and su##estion/
Company has deficiency by 61*/4)+;rupees to cover our current liabilities.
HintM more net negative woring capital means poor. li5uidity condition. So company has
to improve their policy in future.
If industry averages above then our company performance is not good and vice versa.
Chapter#
!e"era#e Analysis
&inancial leverage ratios 6debt ratios; measure the ability of a company to meet its
financial obligations when they fall due. &inancial leverage ratios 6debt ratios; indicate
the ability of a company to repay principal amount of its debts% pay interest on its
borrowings% and to meet its other financial obligations. They also give insights into the
mi# of e5uity and debt a company is using.
&inancial leverage ratios usually compare the debts of a company to its assets. The
common e#amples of financial leverage ratios include debt ratio% interest coverage ratio%
capitali'ation ratio% debt.to.e5uity ratio% and fi#ed assets to net worth ratio.
&inancial leverage ratios indicate the long.term solvency of a company. They give
indications about the financial health of a company. These ratios give indications
whether the company has got enough financial resources to cover its financial
obligations when the creditors and lenders see their payments.
A company with adverse financial leverages ratios may not be able to cover its debts
and therefore may go banrupt. These ratios can give warnings to the shareholders and
directors of potential financial difficulties. The shareholders and directors can tae
actions to prevent the company from going banrupt.
&inancial leverage ratios help to determine the overall level of financial ris faced by a
company and its shareholders. 9enerally speaing% the greater the amount of debt of a
company the greater the financial ris is. A company with greater amount of debts and
financial obligations is more liely to fail to repay its debts
Companies need to carefully manage their financial leverage ratios to eep their
financial ris at acceptable level. Careful management of financial leverage ratios is also
important when seeing loans from bans and financial institutions. &avorable ratios can
help the company to negotiate a favorable interest rate.
1ebt@to@e=uity ratio/ It is the ey financial ratio and is used as a standard for
Hudging a company!s financial standing. It is also a measure of a company!s ability to
repay its obligations. 3hen e#amining the health of a company% it is critical to pay
attention to the debtEe5uity ratio. If the ratio is increasing% the company is being financed
by creditors rather than from its own financial sources which may be a dangerous trend.
-enders and investors usually prefer low debt.to.e5uity ratios because their interests
are better protected in the event of a business decline. Thus% companies with high debt.
to.e5uity ratios may not be able to attract additional lending capital.
!on# Ter. 1ebt to Total Asset 3atio/ It is the ratio that represents the financial
position of the company and the companyAs ability to meet all its financial re5uirements.
It shows the percentage of a companyAs assets that are financed with loans and other
financial obligations that last over a year. As this ratio is calculated yearly% decrease in
the ratio would denote that the company is fairing well% and is less dependent on debts
for their business needs.
Interest co"era#e ratio (IC3)/ The interest coverage ratio 6IC>; is a measure of
a company!s ability to meet its interest payments. Interest coverage ratio is e5ual to
earnings before interest and ta#es 6C,IT; for a time period% often one year% divided by
interest e#penses for the same time period. The interest coverage ratio is a measure of
the number of times a company could mae the interest payments on its debt with its
C,IT. It determines how easily a company can pay interest e#penses on outstanding
debt.


1. 1ebt@e=uity ratio 4 Total debt > Total e=uityD166
$ebt.e5uity ratio for the year 0++1 J 41/*)+L*+100*O1++
J0*4.1@*K
Co..ents and su##estion/
Company has using debt 0*4.1@*K of its total e5uity.so company using high debt
ratio and wea performance.
If industry averages above then our company performance is not good and vice
versa.
$ebt.e5uity ratio for the year 0++) J 4+@11+L0@1@2@O1++
J0@0.1@K
Co..ents and su##estion/
Company has using debt 0@0.1@K of its total e5uity. So company using high debt
ratio and wea performance.
If industry averages above then our company performance is not good and vice
versa.
$ebt.e5uity ratio for the year 0+1+ J @12+41L0@1@2@O1++
J1@)./+1K
Co..ents and su##estion/
Company has using debt 1@)./+1K of its total e5uity. So company using high debt
ratio and wea performance.
If industry averages above then our company performance is not good and vice
versa.
$ebt.e5uity ratio for the year 0+11 J 1042@**L/)12*2O1++
J02).20+K
Co..ents and su##estion/
Company has using debt 02).20+K of its total e5uity. So company using high debt
ratio and wea performance.
If industry averages above then our company performance is not good and vice
versa.
2. 1ebt@total assets ratio 4 Total debt > Total assetsD166
$ebt.total assets ratio for the year 0++1 J 41/*)+L1+12@1*O1++
J4+.*/+K
Co..ents and su##estion/
Company has using debt 4+.*/+K of its total assets. So company using high debt ratio
and wea performance.
If industry averages above then our company performance is not good and vice versa.
$ebt.total assets ratio for the year 0++) J 4+@11+L4+@11+O1++
J1*1.+/*K
Co..ents and su##estion/
Company has using debt 1*1.+/*K of its total assets. So company using high debt ratio
and wea performance.
If industry averages above then our company performance is not good and vice versa.
$ebt Ptotal assets.ratio for the year 0+1+ J@12+41L1+1)/4*O1++
J@0.111K
Co..ents and su##estion/
Company has using debt @0.111K of its total assets. So company using high debt ratio
and wea performance.
If industry averages above then our company performance is not good and vice versa.
$ebt Ptotal assets.ratio for the year 0+11 J1042@**L14@41@1O1++
J40.112K
Co..ents and su##estion/
Company has using debt 40.112K of its total assets. So company using high debt ratio
and wea performance.
If industry averages above then our company performance is not good and vice versa.
9. Interest co"era#e ratio 4 +,IT >'inance cost

Interest coverage ratio for the year 0++1 J2202//E000**
J0/.12times
Co..ents and su##estion/
Company has good interest coverage ratio more than 0/.12 times over the finance
cost.it means company using high interest coverage ratio that is good.
If industry averages above then our company performance is not good and vice versa.
Interest coverage ratio for the year 0++) J0@/14*E00214
J11.4*times
Co..ents and su##estion/
Company has good interest coverage ratio more than 11.4*times over the finance
cost.it means company using high interest coverage ratio that is good.
If industry averages above then our company performance is not good and vice versa.
Interest coverage ratio for the year 0+1+J@21*+1E0//)
J20.11times
Co..ents and su##estion/
Company has good interest coverage ratio more than 20.11 times over the finance
cost.it means company using high interest coverage ratio that is good.
If industry averages above then our company performance is not good and vice versa.
Interest coverage ratio for the year 0+11 J)1@))2E@1@*
J1**.@0times
Co..ents and su##estion/
Company has good interest coverage ratio more than 1**.@0 times over the finance
cost.it means company using high interest coverage ratio that is good.
If industry averages above then our company performance is not good and vice versa.

Chapter# $
%rofitability Analysis
7rofitability ratios measure a companyAs ability to generate earnings relative to sales%
assets and e5uity. These ratios assess the ability of a company to generate earnings%
profits and cash flows relative to relative to some metric% often the amount of money
invested. They highlight how effectively the profitability of a company is being manage.
&or most of these ratios% a higher value is desirable. A higher value means that the
company is doing well and it is good at generating profits% revenues and cash flows.
7rofitability ratios are of little value in isolation. They give meaningful information only
when they are analy'ed in comparison to competitors or compared to the ratios in
previous periods. Therefore% trend analysis and industry analysis is re5uired to draw
meaningful conclusions about the profitability of a company.
Some bacground nowledge of the nature of business of a company is necessary
when analy'ing profitability ratios. &or e#ample sales of some businesses are seasonal
and they e#perience seasonality in their operations. The retail industry is e#ample of
such businesses. The revenues of retail industry are usually very high in the fourth
5uarter due to Christmas. Therefore% it will not be useful to compare the profitability
ratios of this 5uarter with the profitability ratios of earlier 5uarters. &or meaningful
conclusions% the profitability ratios of this 5uarter should be compared to the profitability
ratios of similar 5uarters in the previous years.
:ross profit a measure of a company!s efficiency by taing gross profit and dividing
it by net sales to show the level of income remaining after all e#penses related to a
transaction have been accounted for
+,IT (+arnin#s ,efore Interest and Ta-es) is a measure of a entity!s
profitability that e#cludes interest and income ta# e#penses. Interest and ta#es are
e#cluded because they include the effect of factors other than the profitability of
operations. C,IT 6also called operating profit; shows an entity!s earning power from
ongoing operations.
+arnin#s before ta-es (+,T) can be defined as the money retained by a
company before deducting the money due to be paid as ta#es. The Carnings before Ta#
5uantifies the operating and non.operating profits of a company before ta#es are
considered. It is similar to profits before ta#es. "oreover% this performance indicator
provides a level measure to compare companies in distinctive ta# Hurisdictions.
The amount of money that an individual or company has left over after all federal% state
and withholding ta#es have been deducted from ta#able income. After.ta# income
represents the amount of disposable income that a consumer or firm has to spend on
future investments or on present consumption.
Eet profit .ar#in 6or profit margin% net margin% return on revenue; is a ratio of
profitability calculated as after.ta# net income 6net profits; divided by sales 6revenue;.
:et profit margin is displayed as a percentage. It shows the amount of each sales dollar
left over after all e#penses have been paid.
:et profit margin is a ey ratio of profitability. It is very useful when comparing
companies in similar industries. A higher net profit margin means that a company is
more efficient at converting sales into actual profit.
3eturn on in"est.ent (30I) is performance measure used to evaluate the
efficiency of investment. It compares the magnitude and timing of gains from investment
directly to the magnitude and timing of investment costs. It is one of most commonly
used approaches for evaluating the financial conse5uences of business investments%
decisions% or actions. If an investment has a positive ><I and there are no other
opportunities with a higher ><I% then the investment should be undertaen. A higher
><I means that investment gains compare favorably to investment costs.
3eturn on assets (30A) is a financial ratio that shows the percentage of profit that
a company earns in relation to its overall resources 6total assets;. >eturn on assets is a
ey profitability ratio which measures the amount of profit made by a company per dollar
of its assets. It shows the company!s ability to generate profits before leverage% rather
than by using leverage. (nlie other profitability ratios% such as return on e5uity 6><C;%
><A measurements include all of a company!s assets P including those which arise
from liabilities to creditors as well as those which arise from contributions by investors.
So% ><A gives an idea as to how efficiently management use company assets to
generate profit% but is usually of less interest to shareholders than some other financial
ratios such as ><C.
>eturn on assets gives an indication of the capital intensity of the company% which will
depend on the industry. Capital.intensive industries 6such as railroads and thermal
power plant; will yield a low return on assets% since they must possess such valuable
assets to do business. Shoestring operations 6such as software companies and
personal services firms; will have a high ><AM their re5uired assets are minimal. The
number will vary widely across different industries. This is why% when using ><A as a
comparative measure% it is best to compare it against a company!s previous ><A figures
or the ><A of a similar company.
3eturn on e=uity (30+) is the amount of net income returned as a percentage of
shareholders e5uity. It reveals how much profit a company earned in comparison to the
total amount of shareholder e5uity found on the balance sheet.
><C is one of the most important financial ratios and profitability metrics. It is often said
to be the ultimate ratio or the Qmother of all ratiosA that can be obtained from a
companyAs financial statement. It measures how profitable a company is for the owner
of the investment% and how profitably a company employs its e5uity.

1. :ross %rofit ratio 4 :ross profit > net sales D166
9ross 7rofit ratio for the year 0++1 J112411*L*+1114)O1++
J*4.2/K
Co..ents and su##estion/
Company earned gross *4.2/K profit of its total net sales. 9ood performance but
needed more improvement.
If industry averages above then our company performance is not good and vice versa.
9ross 7rofit ratio for the year 0++) J102/*@4L**4@211O1++
J*4.12K
Co..ents and su##estion/
Company earned gross *4.12K profit of its total net sales. 9ood performance but
needed more improvement and little wea as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
9ross 7rofit ratio for the year 0+1+J12*/11/L/+/+114O1++
J*4.)1K
Co..ents and su##estion/
Company earned gross *4.)1K profit of its total net sales. 9ood performance but
needed more improvement and little improve as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
9ross 7rofit ratio for the year 0+11J1)0/4/)L/)/+021O1++
J*1.)@K
Co..ents and su##estion/
Company earned gross *1.)@K profit of its total net sales. 9ood performance but
needed more improvement and little more increase as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
2. +,IT ratio 4 +,IT > net sales D166
C,IT ratio for the year 0++1 J2202//L*+1114)O1++
J14.)0K
Co..ents and su##estion/
Company earned C,IT 14.)0K of its total net sales. "ore improvement needed.
If industry averages above then our company performance is not good and vice versa.
C,IT ratio for the year 0++)J0@/14*L**4@211O1++
J 4.10K
Co..ents and su##estion/
Company earned C,IT 4.10K of its total net sales. That decreases as compared to
previous year. Company has to change or better their policy.
If industry averages above then our company performance is not good and vice versa.
C,IT ratio for the year 0+1+J@21*+1L/+/+114O1++
J1@.0)K
Co..ents and su##estion/
Company earned C,IT 1@.0)K of its total net sales. So in this year company better their
performance.
If industry averages above then our company performance is not good and vice versa.
C,IT ratio for the year 0+11J)1@))2L/)/+021O1++
J11.4@K
Co..ents and su##estion/
Company earned C,IT 11.4@K of its total net sales. So in this year company more
better their performance as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
9. +,T ratio 4 +,T > net sales D166
C,T ratio for the year 0++1 J2*+*11L*+1114)O1++
J14.0+K
Co..ents and su##estion/
Company earned C,T 14.0+K of its total net sales. ,ut company needed more
improvement.
If industry averages above then our company performance is not good and vice versa.
C,T ratio for the year 0++)J 0/1@2@L**4@211O1++
J4.1@K
Co..ents and su##estion/
Company earned C,T 4.1@K of its total net sales. That decreases as compared to
previous year. ,ad performance and needed to improve.
If industry averages above then our company performance is not good and vice versa.
C,T ratio for the year 0+1+J@/212)L/+/+114O1++
J12.)1K
Co..ents and su##estion/
Company earned C,T 12.)1K of its total net sales. Improve as compared to previous
year. High ratio means good performance.
If industry averages above then our company performance is not good and vice versa.
C,T ratio for the year 0+11J)1+1*0L/)/+021O1++
J11./0K
Co..ents and su##estion/
Company earned C,T 14.0+K of its total net sales. Higher ratio means more good
performance as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
. +AT ratio 4 +AT > net sales D 166
CAT ratio for the year 0++1 J*/12/@L*+1114)O1++
J11.*1K
Co..ents and su##estion/
Company has earned CAT 11.*1K of its total net sales.
If industry averages above then our company performance is not good and vice versa.
CAT ratio for the year 0++)J14@4)0L**4@211O1++
J2.0/K
Co..ents and su##estion/
Company has earned CAT 2.0/K of its total net sales. -ow ratio means wea
performance as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
CAT ratio for the year 0+1+J/*4/@*L/+/+114O1++
J1+.1*K
Co..ents and su##estion/
Company has earned CAT 1+.1*K of its total net sales. Higher ratio means more good
performance as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
CAT ratio for the year 0+11J@1@@)2L/)/+021O1++
J10./1K
Co..ents and su##estion/
Company has earned CAT 1+.1*K of its total net sales. Higher ratio means more good
performance as compared to previous year
If industry averages above then our company performance is not good and vice versa.

$. 3eturn on in"est.ent ratio 4 +,IT > (lon# ter. debt B e=uity) D166
>eturn on investment ratio for the year 0++1 J2202//L6/11)N*41)+;N*+100*O1++
J1@+.)2K
Co..ents and su##estionM
Company gets 1@+.)2K return on its investment.
If industry averages above then our company performance is not good and vice versa.
>eturn on investment ratio for the year 0++) J0@/14*L 64))/N142+*; N0@1@2@O1++
J1).11K
Co..ents and su##estion/
Company gets 1).11K return on its investment. As compared to previous year company
performance is wea or needed to improve.
If industry averages above then our company performance is not good and vice versa.

>eturn on investment ratio for the year 0+1+ J@21*+1L 61)*)N0)0/*; N/+/*)2O1++
J1/1.4/K
Co..ents and su##estion/
Company gets 1/1.4/K return on its investment. As compared to previous year
company performance is good.
If industry averages above then our company performance is not good and vice versa.
>eturn on investment ratio for the year 0+11 J)1@))2L 61421)N14+1+; N/)12*2O1++
J12*.1/K
Co..ents and su##estion/
Company gets 1/1.4/K return on its investment. As compared to previous year
company performance is good.
If industry averages above then our company performance is not good and vice versa.
&. 3eturn on assets ratio 4+AT (net inco.e) > total assetsD166
>eturn on assets ratio for the year 0++1 J*/12/@L1+12@1*O1++
J*/.*0K
Co..ents and su##estion/
Company gets */.*0K return on its assets.
If industry averages above then our company performance is not good and vice versa.
>eturn on assets ratio for the year 0++) J14@4)0L)4/1*)O1++
J11.1/K
Co..ents and su##estion/
Company gets 11.1/K return on its assets. As compared to previous year company
performance is wea or needed to improve.
If industry averages above then our company performance is not good and vice versa.
>eturn on assets ratio for the year 0+1+ J/*4/@*L1+1)/4*O1++
J/+.12K
Co..ents and su##estion/
Company gets /+.12K return on its assets. As compared to previous year company
performance is good.
If industry averages above then our company performance is not good and vice versa.
>eturn on assets ratio for the year 0+11 J@1@@)2L14@41@1O1++
J*/.)+K
Co..ents and su##estion/
Company gets */.)+K return on its assets. As compared to previous year company
performance is wea or needed to improve.
If industry averages above then our company performance is not good and vice versa.
). 3eturn on e=uity ratio 4 +AT> total e=uity D166
>eturn on e5uity ratio for the year 0++1 J */12/@E*+100*O1++
J112.41K
Co..ents and su##estion/
Company gets 112.41K return on its e5uity.
If industry averages above then our company performance is not good and vice versa.
>eturn on e5uity ratio for the year 0++) J14@4)0L0@1@2@O1++
J@2.11K
Co..ents and su##estion/
Company gets @2.11K return on its e5uity. As compared to previous year company
performance is wea or needed to improve.
If industry averages above then our company performance is not good and vice versa.
>eturn on e5uity ratio for the year 0+1+ J/*4/@*L/+/*)2O1++
J1+1.11K
Co..ents and su##estion/
Company gets 1+1.11K return on its e5uity. As compared to previous year company
performance is good.
If industry averages above then our company performance is not good and vice versa.
>eturn on e5uity ratio for the year 0+11 J@1@@)2L/)12*2O1++
J102./@K
Co..ents and su##estion/
Company gets 102./@K return on its e5uity. As compared to previous year company
performance is good.
If industry averages above then our company performance is not good and vice versa.
Chapter# &
Cash 'lo( Analysis
Analy'ing and managing the cash flows of a company is nown as cash flow
management. Cash flow on the other hand is an accounting statement. It shows the
amount of cash a company has generated over a certain time period. Cash flow can be
calculated monthly% semi P annually% 5uarterly and yearly. It helps a firm to analyses its
financial strength.
The inflow of cash arises from investment% operations and financing. If some donations
are made to the business% then this is also included in the cash inflows. <n the other
hand cash outflows are the e#penses of a firm.
Cash flow management helps a company to determine what amount of cash is available
to it whenever money is needed. Cash flow management also calls for the analysis of
cash outflow and inflow. This tells whether the company has more cash in hand or less
cash in hand.
If the business relates to personal finance% then cash flows are much important. They
give all the records of the past happenings of a business lie offering some service and
future financial needs of the business that is what the business will be in future and
what will be its financial re5uirements.
If a company has sufficient amount of capital in hand then it will be able to pay off the
loans to creditors and will also be able to pay the wages of the employees in time. <n
the other hand% if a business does not have enough cash to discharge its e#penses%
then it might become banrupt.
The business analysts use cash flow statements in order to measure the performance
of a business in terms of finance. The companies that have enough cash at hand can
create more cash by investing the available cash into the business. Hence% Cash flow
management is much important.
Cash ratio 6also called cash asset ratio; is the ratio of a company!s cash and cash
e5uivalent assets to its total liabilities. Cash ratio is a refinement of 5uic ratio and
indicates the e#tent to which readily available funds can pay off current liabilities.
7otential creditors use this ratio as a measure of a company!s li5uidity and how easily it
can service debt and cover short.term liabilities.
Cash ratio is the most stringent and conservative of the three li5uidity ratios 6current%
5uic and cash ratio;. It only loos at the company!s most li5uid short.term assets P
cash and cash e5uivalents P which can be most easily used to pay off current
obligations.
this ratio compares the operatin# cash flo(s a company to its sales revenue. This
ratio gives the analysts and investors indications about the ability of a company to
generate cash from its sales. In other words% it shows the ability of a company to turn its
sales into cash. It is e#pressed as a percentage.
Ideally there should be a parallel increase in operating cash flows with the increase in
sales. It will be worrisome if the changes in cash flows are not parallel to the changes in
sales revenue. If the cash flows do not increase with the increase in sales it may
indicate the following two factorsM
The change in terms of sales
Inefficient or ineffective management of trade receivables
The higher this ratio is the better it is for the company. 9reater amounts of operating
cash flows are always desirable. Although there is not any standard guideline for this
ratio but a consistent andEor increasing trend in this ratio is a positive indication of good
debtorAs management. Companies with such a trend in this ratio are good investment
opportunities.
Cash is very important for all companies. Cash is needed for payments to suppliers%
employees% shareholders% and for operating e#penses and investment in capital assets.
Therefore% cash is Hust as important as sales and profits. This ratio indicates the ability
of a company to translate its sales into cash.
1. 0peratin# cash flo( ratio 4 operatin# cash flo( > total current
liabilities
<perating cash flow ratio for the year 0++1 J/1*1* L @40*11
J+.+41
Co..ents and su##estion/
Company has generates +.+41 cash flow from its total current liabilities. So companyAs
cash flow is net negative.
If industry averages above then our company performance is not good and vice versa.
<perating cash flow ratio for the year 0++) J*21*044L@/@1)@
J+.+2/
Co..ents and su##estion/
Company has generates +.+2/ cash flow from its total liabilities. So companyAs cash
flow is more net negative as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
<perating cash flow ratio for the year 0+1+ J *@104* L 11411+/
J +.*1/
Co..ents and su##estion/
Company has generates +.*1/ cash flow from its total liabilities. So companyAs cash
flow is net negative as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
<perating cash flow ratio for the year 0+11 J )@/0+/ L @12+41
J1./+4
Co..ents and su##estion/
Company has generates 1./+4cash flow from its total liabilities. So companyAs cash flow
is net positive as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
2. 0peratin# cash flo( .ar#in 4 net operatin# acti"ity > net sales
<perating cash flow margin for the year 0++1 J /1**1* L *+1114) O1++
J 12.@1K
Co..ents and su##estion/
Company has operating cash flow margin 12.@1K from its net sales.
If industry averages above then our company performance is not good and vice versa.
<perating cash flow margin for the year 0++) J *21*44L**4@211O1++
J 1+./+K
Co..ents and su##estion/
Company has operating cash flow margin 1+./+K from its net sales. As compared to
previous year company performance is wea.
If industry averages above then our company performance is not good and vice versa.
<perating cash flow margin for the year 0+1+ J *@104*L/+/+114O1++
J ).11K
Co..ents and su##estion/
Company has operating cash flow margin ).11K from its net sales. As compared to
previous year company performance is wea.
If industry averages above then our company performance is not good and vice versa.
<perating cash flow margin for the year 0+11 J )@/0+/L/)/+021O1++
J 1).21K
Co..ents and su##estion/
Company has operating cash flow margin 1).21K from its net sales. As compared to
previous year company performance is good.
If industry averages above then our company performance is not good and vice versa.
9. Cash flo( .ar#in 4 cash flo( fro. operatin# acti"ity > total
liabilities
Cash flow margin for the year 0++1 J/1**1* L 41/*)+ O1++
J@4.@@K
Co..ents and su##estion/
Company has generating cash flow margin @4.@@K from its total liabilities.
If industry averages above then our company performance is not good and vice versa.
Cash flow margin for the year 0++) J*21*44 L 4+@11+ O1++
J/).4@K
Co..ents and su##estion/
Company has generating cash flow margin /).4@K from its total liabilities. As compared
to previous year company performance is wea.
If industry averages above then our company performance is not good and vice versa.
Cash flow margin for the year 0+1+ J*@104* L 1+1)/4* O1++
J**.1+K
Co..ents and su##estion/
Company has generating cash flow margin **.1+K from its total liabilities. As compared
to previous year company performance is wea.
If industry averages above then our company performance is not good and vice versa.
Cash flow margin for the year 0+11 J)@0+/ L 14@41@1 O1++
J2.//K
Co..ents and su##estion/
Company has generating cash flow margin 2.//K from its total liabilities. As compared
to previous year company performance is weaer.
If industry averages above then our company performance is not good and vice versa.




Chapter# )
Acti"ity*+fficiency Analysis
compare the assets of a company to its sales revenue. Asset management ratios
indicate how successfully a company is utili'ing its assets to generate revenues.
Analysis of asset management ratios tells how efficiently and effectively a company is
using its assets in the generation of revenues. They indicate the ability of a company to
translate its assets into the sales. Asset management ratios are also nown as asset
turnover ratios and asset efficiency ratios.
Asset management ratios are computed for different assets. Common e#amples of
asset turnover ratios include fi#ed asset turnover% inventory turnover% accounts payable
turnover ratio% accounts receivable turnover ratio% and cash conversion cycle. These
ratios provide important insights into different financial areas of the company and its
highlights its strengths and weanesses.
High asset turnover ratios are desirable because they mean that the company is
utili'ing its assets efficiently to produce sales. The higher the asset turnover ratios% the
more sales the company is generating from its assets.
Although higher asset turnover ratios are preferable% but what is considered to be high
for one industry% may be low for another. Therefore it is not useful to compare asset
turnover ratios of different industries. $ifferent industries have different re5uirements
with regard to assets. It would be unwise to compare an ecommerce store which
re5uires little assets to a manufacturing organi'ation which re5uires large manufacturing
facilities% plant and e5uipment.
-ow asset turnover ratios mean inefficient utili'ation of assets. -ow asset turnover ratios
mean that the company is not managing its assets wisely. They may also indicate that
the assets are obsolete. Companies with low asset turnover ratios are liely to be
operating below their full capacity.
&inancial analyses have highlighted relationship between profit margins and asset
turnover ratios. It has often been observed that companies with high profit margins have
lower asset turnover ratios. <n the other hand% companies with lower profit margins
tend to have higher asset turnover ratios.
Asset turnover ratios are not always very useful. Asset turnover ratios will not give
useful insights into the asset management of companies which sell highly profitable
products but not often.
The recei"able turno"er ratio 6debtors turnover ratio% accounts receivable turnover
ratio; indicates the velocity of a company!s debt collection% the number of times average
receivables are turned over during a year. This ratio determines how 5uicly a company
collects outstanding cash balances from its customers during an accounting period. It is
an important indicator of a company!s financial and operational performance and can be
used to determine if a company is having difficulties collecting sales made on credit
In"entory turno"er is a measure of the number of times inventory is sold or used in
a given time period such as one year. It is a good indicator of inventory 5uality 6whether
the inventory is obsolete or not;% efficient buying practices% and inventory management.
This ratio is important because gross profit is earned each time inventory is turned over.
Also called stoc turnover
Accounts payable turno"er ratio is an accounting li5uidity metric that evaluates
how fast a company pays off its creditors 6suppliers;. The ratio shows how many times
in a given period 6typically 1 year; a company pays its average accounts payable. An
accounts payable turnover ratio measures the number of times a company pays its
suppliers during a specific accounting period.
Accounts payables turnover trends can help a company assess its cash situation. Gust
as accounts receivable ratios can be used to Hudge a company!s incoming cash
situation% this figure can demonstrate how a business handles its outgoing payments
1. Account recei"able turno"er 4 sales > AF3 (trade debt B other
recei"able)
4Ti.es
49&$ > Ti.es
41ays
Account receivable turnover for the year 0++1 J *+1114) L 20/)2
J2) times
J*@2 L 2) times
J @ days
Co..ents and su##estion/
Company receives cash from account receivable appro#imately within @ days.
If industry averages above then our company performance is not good and vice versa.
Account receivable turnover for the year 0++) J **4@11 L )/)*@
J*@ times
J*@2 L *@ times
J 1+.0@ days
Co..ents and su##estion/
Company receive cash from account receivable within appro#imately 1+ days.as
compared to previous year wea performance.
If industry averages above then our company performance is not good and vice versa.
Account receivable turnover for the year 0+1+ J /+/+114 L 1+@0//
J*1 times
J*@2 L *1 times
J ).2) days
Co..ents and su##estion/
Company receives cash from account receivable within appro#imately 1+ days. As
compared to previous year little better performance.
If industry averages above then our company performance is not good and vice versa.
Account receivable turnover for the year 0+11J /)/+021 L 014/*1
J0* times
J*@2 L 0* times
J 11.@@ days
Co..ents and su##estion/
Company receives cash from account receivable within appro#imately 10 days. As
compared to previous year wea performance.
If industry averages above then our company performance is not good and vice versa.
2 .In"entory turno"er 4 C:2 > in"entory stoc8
4Ti.es
49&$ > Ti.es
41ays
Inventory turnover for the year 0++1 J 114/)01 L *20*)/
J2 times
J*@2 L 2 times
J@) days
Co..ents and su##estion/
Company converts its inventory from raw material to finished goods with in
appro#imately @) days.
If industry averages above then our company performance is not good and vice versa.
Inventory turnover for the year 0++) J01001// L ***1/+
J@.*2 times
J*@2 L@.*2 times
J24 days
Co..ents and su##estionM
Company converts its inventory from raw material to finished goods with in
appro#imately 24 days. "ore better performance as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
Inventory turnover for the year 0+1+ J02+@++* L *21+)/
J4 times
J*@2 L 4 times
J20 days
Co..ents and su##estion/
Company converts its inventory from raw material to finished goods with in
appro#imately 20 days. "ore better performance as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
Inventory turnover for the year 0+11 J*+122+0L 2)*1@0
J2.+1 times
J*@2 L 2.+1 times
J40 days
Co..ents and su##estion/
Company converts its inventory from raw material to finished goods with in
appro#imately 40 days. Company performance is wea as compared to previous year.
If industry averages above then our company performance is not good and vice versa.
9. Account payable turno"er 4 purchases > Account payable
%urchases 4C:2 G 0penin# stoc8 B +ndin# stoc8
4Ti.es
49&$ > Ti.es
41ays
7urchases JC9S . <pening stoc N Cnding stoc
J01001// P *20*)/ N ***1/+
J01+*2)+
Account payable turnover for the year 0++)J 01+*2)+ L 210110
J/.10 times
J*@2 L /.10 times
J1) days
Co..ents and su##estion/
Company pays its account payables within appro#imately 1) days.
If industry averages above then our company performance is not good and vice versa.

7urchases JC9S . <pening stoc N Cnding stoc
J02+@++* P ***1/+ N *21+)/
J02*+024
Account payable turnover for the year 0+1+J 02*+024 L /**+/4
J@ times
J*@2 L @ times
J@0 days
Co..ents and su##estion/
Company pays its account payables within appro#imately @0 days. "ore better
performance as compared to previous year.
If industry averages above then our company performance is not good and vice versa.

7urchases JC9S . <pening stoc N Cnding stoc
J*+122+0 P *21+)/ N 2)*1@0
J041@24+
Account payable turnover for the year 0+11J 041@24+ L 1+*+*1*
J0.@* times
J*@2 L 0.@* times
J1*1 days
Co..ents and su##estion/
Company pays its account payables within appro#imately 1*1 days. Company
performance is wea as compared to previous year.
If industry averages above then our company performance is not good and vice versa.

,iblio#raphy/
7nile"er %a8istan (ins t(o
a(ards in 266< year

(nilever 7aistan has once again received the 7aistan Society for Human >esource
"anagementAs 67SH>"; R"ost 7referred 9raduate Cmployer Award 0++1S 6"79CA;.
11++ graduating ",A% engineering and IT students were polled. (nileverAs reputation%
the learning and career opportunities it offers% were 5uoted by graduating students as
the main reasons for selecting (nilever 7aistan as the "ost 7referred 9raduate
Cmployer 0++1. <ther companies that were raned in the top 1+ include "icrosoft%
"obilin% Telenor% 789% Siemens% Schlumberger% I,"% <9$C and :estle 6in this order;.
This recognition reinforces our commitment to driving the business through strong
Cmployer ,randing and thus giving us an edge over our competitors.
:ot only this% (nilever 7aistan also won the award as the Q"ost 7referred Consumer
9oods Company in 7aistanA againT

2afe 'ood A(ard

(nilever &ood Solutions is one of the world!s leading global foodservice businesses. 3e
wor with customers including caterers% restaurants% clubs% cafU% maHor hotel and fast.
food chains to create food solutions that help grow their business. This combined with
local e#pertise will ensure we partner with our customer to help them succeed. At
(nilever &ood solutions we not only delight customers but grow their business by
providing cost effective and innovative solutions while enhancing the 5uality of the food
they serve. <ur vision is to become the !best solution provider for our customers!. <ur
strength comes from deep customer nowledge% both !global and local!% culinary
competence% technological e#pertise% efficient customer response and% above all% our
dedicated team of people. <ur focus lies on understanding the needs of our customers
and designing solutions to meet their specific needs% through our e#pertise in food
technology% chefmanship% service and world class products and brands.
Conducting our operations with integrity and with respect for the many people%
organi'ations and environments our business touches has always been at the heart of
our corporate responsibility. 3e aim to mae a positive impact in many waysM through
our brands% our commercial operations and relationships% through voluntary
contributions and through the various other ways in which we engage with society.
3e!re also committed to continuously improving the way we manage our environmental
impacts and are woring towards our longer.term goal of developing a sustainable
business.
<ur practices% aspirations and commitment towards the safer environment and
corporate responsibility had been recogni'ed by Safe &ood 7aistan. An annual
conference organi'ed by (>S in participation with C," to acnowledge the issue of
providing safe food% food safety and its significance in recessionary times. (nilever
&ood solutions had been represented by Hashim Shouet% Head of &ood solutions%
(ssam Siddi5ui% and Amir Tagar% &ood Service C#ecutives looing after the Ho>eCa
maret..
$ifferent academics% leading food manufacturer of the country% government and private
bodies share ideas% solutions and best practices on different topics mainly 7roduct
Safety% &ood Safety ris in supply chain% 9overnment responsibility in enforcing food
safety and effective systems to manage food safety.
Hashim Shouet has been awarded a safe food award for the relentless commitment of
(nilever &ood solution for food safety within organi'ation% along with business partners
and other stae holder of the business and community. A valuable full day conference
ended up% leveraging the integration of nowledge% identification of responsibilities and
roles% and commitment to promote food e#cellence food safety towards society and
environment.
7nile"erHs %a8istan Appeal

(nilever is providing V1 million in cash donations% food and hygiene products following
devastating floods in 7aistan.
(nilever sends aid to 7aistan
(nilever announced today that it will provide V1 million to help 7aistan combat the
devastating effects of the monsoon floods.
The donation will be divided between the 3orld &ood 7rogramme 63&7;% (:ICC&%
Save the Children% <#fam and 7opulation Services International 67SI;.
The donation will be in the form of both cash and products including soap% toothpaste
and shampoo. (nilever 7aistan will also loo to wor with these agencies over the
coming months to help with rehabilitation proHects.
3oring with partners
In addition% (nilever has wored closely with its partner% the 3orld &ood 7rogramme
63&7;% to set up a Hoint website so that its employees can help those affected by the
flooding% and the company will match all employee donations to ma#imise its
contribution.
Chsan "ali% Chairman (nilever 7aistan% says that many re5uests will be coming into
(nilever for help. W3e will act in a focused manner% supporting flood.affected persons
with cash and product donations through 3&7% (:ICC&% Save the Children% 7SI and
<#fam% distributors and sales teams.W
-ocal presence
In 7aistan% (nilever is also woring with local governments in areas where its factories
are located P the >ahim ?ar =han H7C &actory and the =hanewal Tea &actory P on
product donations. "any employees are also personally helping in these areas.
CC< 7aul 7olman saidM W<ur thoughts are with all those affected by this terrible tragedy.
(nilever!s deep roots in 7aistan mae us determined to do all we can to help%
especially through our Hoint wor with the (: agencies and :9<s.W
!in8s A Cebsite Adress/
www.unileverpaistan.com.p
www.unileverpaistanfoods.com.p