Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
PROJECT REPORT
ON
FINANCIAL STATEMENT ANALYSIS
1
Financial statement Analysis
FINANCIAL STATEMNET
ANALYSIS
OF
RAFHAN MAIZE co ltd
2
Financial statement Analysis
Group Introduction
NAME Roll#
Zonash Ghaffar 41
Sameen Sajjad 42
Beenish Mukhtar 43
Sara Bashir 31
Qasira Shaukat 23
Maliha Saleem 20
3
Financial statement Analysis
ACKNOWLEDGMENT
We would like to admit that we completed this project due to parents who
pray for our success.
We also wish to express our appreciation to our supervisor Sir Shahid Imdad
who helps us a lot and introduce us to new dimensions of knowledge.
Last but not the least our team efforts, support, cooperation and
encouragement showed by each member in the group with each other.
4
Financial statement Analysis
DEDICATION
5
Financial statement Analysis
RESEARCH METHODOLOGY
The research techniques that are adopted for the purpose of this
study is
www.rafhanmaize.com
PRFEACE
6
Financial statement Analysis
As the world is growing rapidly, the businesses are also moving to become
the huge one. And by that result, more and more people want to become a
master in these businesses. The main purpose in the finance field is to know
how the financial analysis is done. We all know that finance is the blood of
any business and without it no business can run. Financial analysis of a
company is very difficult and the most important task and by doing this I am
able to know the whole financial position and financial structure of the
company.
Simply by looking at how much cash a company has does not provide
enough information. The financial statements need to be analyzed to
measure a company’s performance and to compare it with other firms in the
same industry. The resulting information is intended to be useful to owners,
potential investors, creditors, analysts, and others as the analysis evaluates
the past performance, future potential and financial position of the firm.
7
Financial statement Analysis
Company Information
Rafhan Maize Products Company Ltd., is located at Faisalabad,
about 1100 kilometers north of Karachi, in Pakistan. The Company
processes thousands of tons of corn every year to produce high
quality food ingredients and industrial products.
8
Financial statement Analysis
Integrity
We adhere to a code of conduct, which produces consistently
ethical behavior.
Excellence
We do the right things in a superior manner while striving for
continuous improvement.
Respect
9
Financial statement Analysis
We deal with and treat others the way we want to be dealt with
and treated.
Financial Success
We consistently focus on our business to create economic value
today and into the future.
BUSINESS REVIEW
Rafhan maize come a long way in producing agriculturally based products
and ingredients and have established ourselves as a progressive trendsetter
and a reliable solution provider to various types of industries. A major key to
success has been constant innovation in the product line, catering services
to different functionalities in the market. We strive to meet and exceed
customer expectations by delivering the best products and services to our
valued customers through value, dependability, technical service, consistent
quality and long term relationships.
FOOD BUSINESS
The food business displayed favorable growth due to sustained performance
of the confectionery industry, which consumed good volumes of liquid
glucose. The export led confectionery sector performed better, whereas
unorganized units faced the issue of the energy crisis. The vibrant demand
for food grade starches from different applications in food processing also
contributed to volume growth. However, inflationary pressures on the prices
of utilities and essential food items are unsettling consumers' buying
patterns and squeezing their purchasing power.
10
Financial statement Analysis
INFORMATION TECHNOLOGY
Information technology is considered the backbone of our Company.
Dealings with such a large number of suppliers, dealers, customers and other
contractors can only be conducted in a fair manner with the help of strong IT
system. Your Company has a custom designed IT system which integrates all
sorts of operations to ensure smooth, timely and fair flow of information. The
production facilities and our offices in different locations are connected
through dedicated communication channels.
11
Financial statement Analysis
The government has increased the minimum support price of wheat from
Rs.625 to Rs.950 to induce the farmers to grow more wheat. With the
increase in the price of wheat, the same price trend is foreseen for maize
having the same cultivation season. The high price of wheat may also shift
demand of livestock sector to maize, creating a tough competition and
increase in prices. Continuous energy crisis and high labor costs, coupled
with above factors, are likely to continue to affect the manufacturing sector
resulting in an increase in cost of other raw materials, manufacturing
supplies and engineering.
12
Financial statement Analysis
Building On strength
• People
• Technology
• innovation
13
Financial statement Analysis
14
Financial statement Analysis
Operating Expense
Other Expenses
15
Financial statement Analysis
BALANCE SHEET
OF
RAFHAN MAIZE
16
Financial statement Analysis
CURRENT LIABILITIES
trade&other payables 552,982 589,359 765,924
mark up accrued on short term running
finance 2,197 61 8,522
short term running finance secured 493,709
provision for taxation 54,629 78,158 146,889
TOTAL CURRENT LIABILITIES (B) 609,808 667,578 1,415,044
NON-CURRENT ASSETS
property plant&equipments 1,342,425 1,501,737 1,553,156
capital work in progress 271,086 88,892 503,559
long term loans 2,511 1,460 791
employes retirement benefits 33,235 96,537 71,957
TOTAL NON-CURRENT ASSETS (D) 1,649,257 1,688,626 2,129,463
REPRESENTED BY
share capital 92,364 92,364 92,364
reserves 2,634,281 2,933,332 3,486,077
TOTAL 2,726,645 3,025,696 3,578,441
RATIO ANALYSIS
17
Financial statement Analysis
It’s a tool which enables the banker or lender to arrive at the following
factors:
• Liquidity position
• Profitability
• Solvency
• Financial Stability
• Quality of the Management
• Safety & Security of the loans & advances to be or already been provided
a) Liquidity Ratios
b) Leverage Ratios
c) Profitability Ratios
d) Activity Ratios
e) Market Ratios
Liquidity Ratios
1. Current Ratio
It is the relationship between the current assets and current liabilities of a
concern.
18
Financial statement Analysis
2. Quick Ratio
It is the relationship b/w current assets less inventories over current liabilities
of a concern
19
Financial statement Analysis
Leverage Ratios
1. Debt to Equity Ratio
The debt to equity ratio gives the proportion of a company (or person's)
assets that are financed by debt versus equity s
20
Financial statement Analysis
2. Debt Ratio
The proportion of a firm's total assets that are being financed with borrowed
funds
Capitalization Ratio
It show’s the Extent to which Long term Debts & Share holder’s
Equity involve in company’s Capitalization.
1. Coverage Ratio
Its show’s that at what level the company capable of
cover or pay off interest and financial charges.
21
Financial statement Analysis
Profitability Ratios
1. Net Profit Margin
22
Financial statement Analysis
3. Return on Investment
23
Financial statement Analysis
Activity/Turnover Ratio
Its shows at what level the company active in pay off Account
Payable and collect Account Receivable or Converting
inventory into cash.
24
Financial statement Analysis
3. Inventory turnover
Year 2006 2007 2008
Inventory 3.59 4.35 4.25
turnover
ratio
Operating Cycle
25
Financial statement Analysis
cycle
Cash Cycle
200
2008 7 2006
26
Financial statement Analysis
124
Sales 142% % 118%
120
Cost of sales 146% % 114%
134
Gross profit 131% % 131%
179
Distribution cost 84% % 128%
107
Administrative expenses 108% % 105%
133
Operating profit 138% % 135%
141
Other operating income 145% % 95%
135
Other operating expenses 137% % 145%
134
Profit before taxation 137% % 131%
134
Taxation 136% % 131%
135
Profit after taxation 137% % 132%
27
Financial statement Analysis
112
Property, plant and equipment 103% % 113%
290
EMPLOYEES RETIREMENT BENEFITS 75% % 94%
CURRENT ASSETS
125
Stores and spares 128% % 109%
117
Stock in trade 177% % 84%
123
Trade debts 105% % 123%
112
Loans, advances, deposits, prepayments and other receivables 132% % 97%
129 1631
Cash and bank balances 4% % %
112
TOTAL ASSETS 133% % 100%
CURRENT LIABILITIES
107
Trade and other payables 130% % 99%
13970
Mark up accrued on short term running finances % 3% 61%
143
Provision for taxation 188% % 84%
28
Financial statement Analysis
133
Deferred taxation 93% % 132%
100
Share capital 100% % 100%
111
Reserves 119% % 107%
112
TOTAL LIABILITIES 133% % 100%
100
Sales 100% % 100%
72.3 74.4
Cost of sales 74.5% % %
27.7 25.6
Gross profit 25.5% % %
23.2 21.6
Administrative expenses 22.5% % %
141
Other operating income 145% % 95%
22.2 20.4
Profit before taxation 21.4% % %
29
Financial statement Analysis
% %
38.2 113
Property, plant and equipment 29.6% % %
CURRENT ASSETS
34.5
Stock in trade 46.0% % 32.8%
Loans, advances, deposits, prepayments and other receivables 1.1% 1.1% 1.1%
CURRENT LIABILITIES
30
Financial statement Analysis
74.4
Reserves 66.7% % 74.7%
CONCLUSION
INDEX ANALYSIS
31
Financial statement Analysis
C U R R E N T L IA B IL IT IE S
tra d e & o th e r p a y a b le s 5 5 2 ,9 8 2 5 8 9 ,3 5 9 7 6 5 ,9 2 4 1 0 0 .0 0 % 1 0 6 .5 8 % 1 3 8 .5 1 %
m a rk u p a c cru e d o n sh o rt te rm ru n n in g
fin a n ce 2 ,1 9 7 61 8 ,5 2 2 1 0 0 .0 0 % 2 .7 8 % 3 8 7 .8 9 %
sh o rt te rm ru n n in g fin a n c e se c u re d 4 9 3 ,7 0 9 1 0 0 .0 0 % 0 .0 0 %
p ro v isio n fo r ta x a tio n 5 4 ,6 2 9 7 8 ,1 5 8 1 4 6 ,8 8 9 1 0 0 .0 0 % 1 4 3 .0 7 % 2 6 8 .8 8 %
T O T A L C U R R E N T L IA B IL IT IE S (B ) 6 0 9 ,8 0 8 6 6 7 ,5 7 8 1 ,4 1 5 ,0 4 4 1 0 0 .0 0 % 2 3 2 .0 5 %
W O R K IN G C A P IT A L (A -B ) = C 1 ,2 6 7 ,5 8 3 1 ,5 8 9 ,4 0 7 1 ,6 8 4 ,2 5 1 1 0 0 .0 0 % 1 2 5 .3 9 % 1 3 2 .8 7 %
N O N -C U R R E N T A S S E T S
p ro p e rty p la n t& e q u ip m e n ts 1 ,3 4 2 ,4 2 5 1 ,5 0 1 ,7 3 7 1 ,5 5 3 ,1 5 6 1 0 0 .0 0 % 1 1 1 .8 7 % 1 1 5 .7 0 %
c a p ita l w o rk in p ro g re ss 2 7 1 ,0 8 6 8 8 ,8 9 2 5 0 3 ,5 5 9 1 0 0 .0 0 % 3 2 .7 9 % 1 8 5 .7 6 %
lo n g te rm lo a n s 2 ,5 1 1 1 ,4 6 0 791 1 0 0 .0 0 % 5 8 .1 4 % 3 1 .5 0 %
e m p lo y e s re tire m e n t b e n e fits 3 3 ,2 3 5 9 6 ,5 3 7 7 1 ,9 5 7 1 0 0 .0 0 % 2 9 0 .4 7 % 2 1 6 .5 1 %
T O T A L N O N -C U R R E N T A S S E T S (D ) 1 ,6 4 9 ,2 5 7 1 ,6 8 8 ,6 2 6 2 ,1 2 9 ,4 6 3 1 0 0 .0 0 % 1 0 2 .3 9 % 1 2 9 .1 2 %
N O N C U R R E N T L IA B IL IT IE S
D e ffe rd lia b ilitie s 2006 2007 2008 2006 2007 2008
S a le sd e ffe rd ta x a tio n 6 , 1 2 7 , 1 277, 51 79 08 ,1
, 3931590 , 27 54 26,3, 8327160 0 2. 0305 %
,2 71 32 31. 60 09 .0
% 01%7 5 . 14 30 2%.6 7 % 1 2 3 .7 0 %
T O T A L N O N C U R R E N T L IA B IL IT IE S (F1)9 0 ,1 9 5 2 5 2 ,3 3 7 2 3 5 ,2 7 3 1 0 0 .0 0 % 1 3 2 .6 7 % 1 2 3 .7 0 %
C o s t o f G o o d s S o ld 4 , 5 5 6 , 0 658, 4 8 0 , 1 6 87 , 0 0 5 , 5 8 10 0 0 . 0 0 % 1 2 0 . 2 8 % 1 7 5 . 7 1 %
G r o sNs EPTr oWf Oi t R T H (E -F ) 1 , 5 7 1 , 0 5229, ,7
0 9286,,61 47 52 3, 7,04215,,6
2 491660 30 ,5
. 0708%,41431 31. 50 05 .0
% 01%7 4 . 14 18 0%.9 7 % 1 3 1 .2 4 %
O p e ra t i n g E x p e n s
D is t r ib u t io n c o s t 1 0 6 , 6 6 4 1 9 0 , 5 8 3 1 6 0 , 5 6 31 0 0 . 0 0 % 1 7 8 . 6 8 % 1 5 0 . 5 3 %
A d m Rin EEP xRpEeSnEsNeTs E D B Y 1 4 3 , 5 3 0 1 5 2 , 9 5 0 1 6 5 , 5 1 01 0 0 . 0 0 % 1 0 6 . 5 6 % 1 1 5 . 3 1 %
O p e rasht ai nreg cIna cp ita
o ml e 1 , 3 2 0 , 8 615, 7 95 24,3, 663429 , 4 19 25 ,3
, 167413 0 0 . 09 02 ,3
% 6143 21. 80 04 .0
% 01%8 2 . 18 05 0%.0 0 % 1 0 0 .0 0 %
re se rv e s 2 ,6 3 4 ,2 8 1 2 ,9 3 3 ,3 3 2 3 ,4 8 6 ,0 7 7 1 0 0 .0 0 % 1 1 1 .3 5 % 1 3 2 .3 4 %
O t h e Tr OO TpAe Lra t i n g In c o m e s 4 4 , 4 8 9 2 ,7
6 22,68,66 42 5 39,002, 59,61 19160 30 ,5. 0708%,41441 11. 30 00 .0
% 02%0 4 . 13 14 0%.9 7 % 1 3 1 .2 4 %
S u b t o ta l 1 , 3 6 5 , 3 514, 8 1 7 , 5 0 21 , 5 0 6 , 0 8 14 0 0 . 0 0 % 1 3 3 . 1 2 % 1 8 3 . 5 5 %
O t h e r O p e ra t i n g E x p e n s e s 9 2 , 5 5 5 1 2 4 , 5 9 3 1 7 0 , 8 9 61 0 0 . 0 0 % 1 3 4 . 6 2 % 1 8 4 . 6 4 %
E .B .I.T 1 , 2 7 2 , 7 919, 6 9 2 , 9 0 28 , 3 3 5 , 1 8 18 0 0 . 0 0 % 1 3 3 . 0 1 % 1 8 3 . 4 7 %
O th e r E x p e n s e s
F in a n c e c o s t 2 0 , 4 0 5 1 1 , 8 0 7 3 6 , 1 2 31 0 0 . 0 0 % 5 7 . 8 6 % 1 7 7 . 0 3 %
E .B .T 1 , 2INDEX
5 2 , 3 914, 6 8 1 , 1 0ANALYSIS
21 , 2 9 9 , 0 6 15 0 0 . 0 0 % 1 3 4 . 2 3 % 1 8 3 . 5 7 %
T a x a t io n 4 4 3 , 1 1 5 5 9 1 , 9 1 7 8 0 6 , 7 0 01 0 0 . 0 0 % 1 3 3 . 5 8 % 1 8 2 . 0 5 %
P r o fi t A f t e r T a x a ti o n 8 0 9 , 2 7 19 , 0 8 9 , 1 8 14 , 4 9 2 , 3 6 15 0 0 . 0 0 % 1 3 4 . 5 9 % 1 8 4 . 4 1 %
32
Financial statement Analysis
33
Financial statement Analysis
NON-CURRENT ASSETS
property plant&equipm ents 1,342,425 1,501,737 1,553,156 38.07% 38.06% 29.70%
capital work in progress 271,086 88,892 503,559 7.69% 2.25% 9.63%
long term loans 2,511 1,460 791 0.07% 0.04% 0.02%
em ployes retirem ent benefits 33,235 96,537 71,957 0.94% 2.45% 1.38%
T OT AL NO N-CURRENT ASSET S 1,649,257 1,688,626 2,129,463 46.77% 42.80% 40.73%
REPRESENT ED BY
share capital 92,364 92,364 92,364 3.39% 3.05% 2.58%
reserv es 2,634,281 2,933,332 3,486,077 96.61% 96.95% 97.42%
T OT AL 2,726,645 3,025,696 3,578,441 100.00% 100.00% 100.00%
34
Financial statement Analysis
E a rn in g P e r S h a re 88 118 162
2006 2007 2008
T o t a l A s s e ts 3 ,5 2 6 ,6 4 83 ,9 4 5 ,6 1 1 5 ,2 2 8 ,7 5 8
T o t a l L ia b ilitie s 8 0 0 ,0 0 3 9 1 9 ,9 1 5 1 ,6 5 0 ,3 1 7
35