RAtios Analysis

Balance Sheet 2014 to 2018
2014 2015 2016

ASSETS In Thousands
NON-CURRENT ASSETS
Property, plant and equipment 1,239,996 1,518,286 1,965,391
Intangibles 36,128 39,089 61,295
Long Term Investement 31,719 31,719 31,719
Long term deposits 22,125 34,768 30,979
Total Non-Current Assets 1,329,968 1,623,862 2,089,384
CURRENT ASSETS
Stores, spare parts and loose tools 5,534 5,897 6,605
Stock in trade 2,226,562 2,254,723 3,280,590
Trade debts 796,624 1,150,666 933,274
Advances 52,307 50,404 138,928
Trade Deposits and Prepayments 18,076 29,736 38,870
Other recievables 13,375 13,452 5,071
Sales tax refundable 0 0 0
fair value through profit or loss 461,585 389,245 0
cash and bank balances 78,418 37,041 249,667
Total Current Assets 3,652,481 3,931,164 4,653,005
TOTAL ASSETS 4,982,449 5,555,026 6,742,389
LIABILITIES
NON-CURRENT LIABILITIES
Long-term finance - secured 0 0 0
Deferred taxation 114,920 93,414 80,934
Deferred liabilities 0 0 0
Retirement benefits obligations 29,735 19,495 13,634
Total Non-Current Liabilities 144,655 112,909 94,568
CURRENT LIABILITIES
Trade and other Payables 1,372,410 1,672,683 2,067,587
Unclaimed dividend
Accrued intrest 11,341 2,520 8,974
Short-term borrowning 953,789 384,094 1,311,326
Long term finance classified as current 0 0 0
Taxation - Provision less payments 168,004 484,578 622,721
Sales tax payable 124,332 141,354 93,457
Total Current Liabilities 2,629,876 2,685,229 4,104,065
TOTAL LIABILITIES 2,774,531 2,798,138 4,198,633
EQUITY
SHARE CAPITAL AND RESERVES
Isseud, subscribed and paid up capital 518,034 518,034 518,034
unappropriated profit 1,689,884 2,238,854 2,022,873
Exchange revaluation reserve 2,849
Total Equity 2,207,918 2,756,888 2,543,756
TOTAL LIABILITIES AND EQUITY 4,982,449 5,555,026 6,742,389
Income Statement from 2014 to 2018

2014 2015 2016
Sales 9,725,258 11,604,290 13,569,350
Cost of sales -6,316,132 -7,541,804 -9,073,765
Gross Profit 3,409,126 4,062,486 4,495,585
Distribution cost -1,921,722 -2,125,366 -2,682,631

Admin expenses -347,532 -458,844 -521,821
other expenses -91,176 -120,719 -99,217
Other icome 71,148 111,965 32,694
Operating Profit 1,119,844 1,469,522 1,224,610
Finance costs -87,513 -37,269 -89,143

Profit Before Taxation 1,032,331 1,432,253 1,135,467
Taxation -323,839 -438,690 -338,277

Profit After Taxation 708,492 993,563 797,190
Other Comprehensive Income

Remeasurement of retirement benefit liability -5,461 -41,148 -14,712
Related deffered tax 1,911 10,982 3,989
Items that reclassified to P/L 0 0 1,910
-3,550 -30,166 -8,813
Total Comprehensive Income 704,942 963,397 788,377
MOHAMMED MANZOOR FA18-MBO-003
ABDUL FATAKH FA18-MBO-001
RATIOS ANALYSIS ASSIGNMENT
Ratio Analysis of National Foods Pakistan
Ratios Calcula
2017 2018
Thousands 1. Internal Liquidity Ratios:
3,049,019 4,150,606 C
Current Ratio =
85,564 85,652
31,719 31,719
33,612 40,473
Acid-Test Ratio =
3,199,914 4,308,450
Cash and
Cash Ratio =
10,880 41,880
3,008,831 3,072,291
1,273,826 889,385
209,476 102,144 2. Leverage Ratios:
13,779 36,863
70,982 5,764
Debt-to-Equity =
40,633 121,424
90,288 229,728
Debt-to-Total Asset Ratio =
4,718,695 4,499,479
7,918,609 8,807,929
Debt=to-Total Capitalization Ratio =
141,794 0 3. Coverage Ratios:

142,393 117,010
6,023 42,366
Interest Coverage Ratio =
0 0
290,210 159,376
4. Activity Ratios:
2,364,134 2,330,786
10,471 18,323
Receivable Turnover Ratio =
8,691 14,766
1,549,528 2,148,720
0 193,152
Receivable Turnover in Days =
515,886 284,513
0 0
4,448,710 4,990,260
Payable Turnover Ratio =
4,738,920 5,149,636 In Days Payable Turnover =
Inventory Turnover Ratio =
518,034 518,034
Inventory Turnover in Days =
2,661,655 3,140,259
3,179,689 3,658,293
5. Operating Profitability Ratios:
7,918,609 8,807,929
Gross Profit Margin =
8 Net Profit Margin =

2017 2018
14,767,390 16,178,301
-9,910,728 -10,614,639
Return on Investment (ROI) =
4,856,662 5,563,662
-2,940,098 -3,468,766
Return on Equity =
-515,662 -767,127
-101,661 -210,531
82,344 53,920
Operating Profit Margin =
1,381,585 1,171,158
-68,567 -108,388
Return on Total Equity =
1,313,018 1,062,770
-328,121 -116,164
984,897 946,606 6. Operationg Effeciency Ratios:
Total Asset Turnover Ratio =

-5,530 -37,491
1,496 9,818
Net Fixed Asset Turnover Ratio =
-4,034 -27,673
980,863 918,933
Tangible Fixed Asset Turnover Ratio =
Equity Turnover Ratio =

7.Dupont Analysis:
Return on Equity (ROE) =
8. Risk Analysis
Business Risk =
Sales Volatility =
Operating Leverage =
03
stan
Ratios Calculations of 2018
Current Assets/ Current Liabilities

0.9016522185
Current Assets-Inventories/ Current Liabilities

0.2859947177
Cash and Marketable Securities/ Current Liabilities

0.0460352767
Total Debt/ Shareholder's Equity

1.4076608954
Total Debt/ Total Assets

0.5846591179
Total Debt/ Total Capitalization

1.34889536
EBIT/ Interest Expense

9.8052367421
Annual Net Credit Sales/ Average Receivables

10.3207362048
No. of Days in a year/ Receivable Turnover

35.365694148
Annual Net Credit Purchases/ Average Account Payable
4.5349607661
79.3832667067
CGS/ Average Inventory
3.491013336
No. of Days in a year/ Inventory Turnover

104.5541694824
Gross Profit/ Net Sales

34.39%
Net Profit after Taxes/ Net Sales

5.85%
Net Profit after Taxes/ Total Assets

10.75%
Net Profit after Taxes/ Shareholder's Equity

25.88%
Operating Profit/ Net Sales

7.24%
Net Income/ Average Total Equity

26.88%
Net Sales/ Average Total Net Assets

1.9344470446
Net Sales/ Average Net Fixed Assets

4.3094077485
Net Sales/ Average Net Tangible Assets

4.4942065733
Net Sales/ Average Equity

4.7318934153
Net Income/ Common Equity = Net Income/ Net Sales * Net Sales/ Co
0.2511917443
Standard Deviation of Operating Earnings/ Mean of Operating Earnings
Related Calculations:
(Loss) / profit before

Years taxtation
2,018.00 918,933.00
2,017.00 980,863.00
2,016.00 788,377.00
2,015.00 963,397.00
2,014.00 704,942.00
Standard Deviation of Sales/ Mean of Sales
Years Sales
2,018.00 9,725,258
2,017.00 11,604,290
2,016.00 13,569,350
2,015.00 14,767,390
2,014.00 16,178,301
∑(Percentage change in operating Earning/ Percentage Change in Sales)
(Loss) / profit before

Years taxtation
2,018.00 918,933.00
2,017.00 980,863.00
2,016.00 788,377.00
2,015.00 963,397.00
2,014.00 704,942.00
Years Sales
2,018.00 16,178,301.00
2,017.00 14,767,390.00
2,016.00 13,569,350.00
2,015.00 11,604,290.00
2,014.00 9,725,258.00
Retention Rate = (1-Dividends declared/ Net Earnings)
Dividend Declared by the Company:
Dividend Declared =
Total Shares Issued =
Total Dividend Declared =
Liabilities
ity
on
Calculation of Average Receivables:
Average Receivables for 2017,18 = 1,567,55

ceivables
Calculation of purchases
urnover
Purchases for 2018 = 10,645,63
count Payable Calculation of Average Inventory:
Average Inventory for 2017,18 = 3,040,56
Calculation of Avg Payables
urnover Avg Payables for 2017, 18 = 2,347,46
Gross Profit/ Net Sales

34.39%
rofit after Taxes/ Net Sales

5.85%
ofit after Taxes/ Total Assets

10.75%
fter Taxes/ Shareholder's Equity

25.88%
erating Profit/ Net Sales

7.24%
come/ Average Total Equity Average Total Equity= 3,418,99

26.88%
es/ Average Total Net Assets

1.9344470446 Calculation of Average Total Assets:
es/ Average Net Fixed Assets Average Total Assets = 8363269

4.3094077485
Calculation of Average Fixed Assets:

/ Average Net Tangible Assets
4.4942065733 Average Net Fixed Assets = 3754182
Calculation of Average Tangible Fixed Assets:

t Sales/ Average Equity
4.7318934153 Average Tangible Fixed Assets = 3599812
mmon Equity = Net Income/ Net Sales * Net Sales/ Common Equity
0.2511917443
rating Earnings/ Mean of Operating Earnings 0.1373729467
Standard Deviation of OE Mean of OE
119,693.38 871,302.40
viation of Sales/ Mean of Sales 0.19
Standard Dev. Of Sales Mean of Sales
2,553,365.40 13,168,917.80
erating Earning/ Percentage Change in Sales) 0.67
Percentage Change in OE
-6.31%
24.42%
-18.17%
36.66%
0.00%
Percentage Change in
Sales
9.55%
8.83%
16.93%
19.32%
0.00%
nds declared/ Net Earnings) 0.86
Rupes 10/ Share

12,433,000.00
124,330,000.00
1,567,553
10,645,639
3,040,561
2,347,460
3,418,991
8363269
3754182
3599812.5
2014 2015 2016
ASSETS In Thousands
NON-CURRENT ASSETS
Intangibles 36,128 39,089 61,295
CURRENT ASSETS
Stock in trade 2,226,562 2,254,723 3,280,590
Trade debts 796,624 1,150,666 933,274
Advances 52,307 50,404 138,928
TOTAL ASSETS 4,982,449 5,555,026 6,742,389
LIABILITIES
CURRENT LIABILITIES
Unclaimed dividend
EQUITY
Total Equity 2,207,918 2,756,888 2,543,756

2014 2015 2016
Sales 9,725,258 11,604,290 13,569,350
Cost of sales -6,316,132 -7,541,804 -9,073,765
Gross Profit 3,409,126 4,062,486 4,495,585

Admin expenses -347,532 -458,844 -521,821
other expenses -91,176 -120,719 -99,217
Other icome 71,148 111,965 32,694
Finance costs -87,513 -37,269 -89,143

Taxation -323,839 -438,690 -338,277


-3,550 -30,166 -8,813
Horizontal Analysis with base year 2014
2017 2018 2014
n Thousands ASSETS
NON-CURRENT ASSETS
3,049,019 4,150,606 Property, plant and equipment
85,564 85,652 Intangibles
31,719 31,719 Long Term Investement
33,612 40,473 Long term deposits
3,199,914 4,308,450 Total Non-Current Assets
CURRENT ASSETS
10,880 41,880 Stores, spare parts and loose tools
3,008,831 3,072,291 Stock in trade
1,273,826 889,385 Trade debts
209,476 102,144 Advances
13,779 36,863 Trade Deposits and Prepayments
70,982 5,764 Other recievables
40,633 121,424 Sales tax refundable
fair value through profit or loss
90,288 229,728 cash and bank balances
4,718,695 4,499,479 Total Current Assets
7,918,609 8,807,929 TOTAL ASSETS
LIABILITIES
141,794 0 Long-term finance - secured
142,393 117,010 Deferred taxation
6,023 42,366 Deferred liabilities
0 0 Retirement benefits obligations
290,210 159,376 Total Non-Current Liabilities
CURRENT LIABILITIES
2,364,134 2,330,786 Trade and other Payables
10,471 18,323 Unclaimed dividend
8,691 14,766 Accrued intrest
1,549,528 2,148,720 Short-term borrowning
0 193,152 Long term finance classified as current
515,886 284,513 Taxation - Provision less payments
0 0 Sales tax payable
4,448,710 4,990,260 Total Current Liabilities
4,738,920 5,149,636 TOTAL LIABILITIES
EQUITY
518,034 518,034 Isseud, subscribed and paid up capital
2,661,655 3,140,259 unappropriated profit
Exchange revaluation reserve
3,179,689 3,658,293 Total Equity
7,918,609 8,807,929 TOTAL LIABILITIES AND EQUITY
018 Horizontal Analysis of Income ststement with Base year

2017 2018 2014
14,767,390 16,178,301 Sales
-9,910,728 -10,614,639 Cost of sales
4,856,662 5,563,662 Gross Profit
-2,940,098 -3,468,766 Distribution cost

-515,662 -767,127 Admin expenses
-101,661 -210,531 other expenses
82,344 53,920 Other icome
1,381,585 1,171,158 Operating Profit
-68,567 -108,388 Finance costs

1,313,018 1,062,770 Profit Before Taxation
-328,121 -116,164 Taxation

984,897 946,606 Profit After Taxation

-5,530 -37,491 Remeasurement of retirement benefit liability
1,496 9,818 Related deffered tax
Items that reclassified to P/L
-4,034 -27,673
980,863 918,933 Total Comprehensive Income
with base year 2014
2015 2016 2017 2018
22.44% 58.50% 145.89% 234.73%

8.20% 69.66% 136.84% 137.08%
0.00% 0.00% 0.00% 0.00%
57.14% 40.02% 51.92% 82.93%
22.10% 57.10% 140.60% 223.95%
6.56% 19.35% 96.60% 656.78%

1.26% 47.34% 35.13% 37.98%
44.44% 17.15% 59.90% 11.64%
-3.64% 165.60% 300.47% 95.28%
64.51% 115.04% -23.77% 103.93%
0.58% -62.09% 430.71% -56.90%
0.00% 0.00% 0.00% 0.00%
-15.67% -100.00% -100.00% -100.00%
-52.76% 218.38% 15.14% 192.95%
7.63% 27.39% 29.19% 23.19%
11.49% 35.32% 58.93% 76.78%
0.00% 0.00% 0.00% 0.00%

-18.71% -29.57% 23.91% 1.82%
0.00% 0.00% 0.00% 0.00%
-34.44% -54.15% -100.00% -100.00%
-21.95% -34.63% 100.62% 10.18%
21.88% 50.65% 72.26% 69.83%

0.00% 0.00% 0.00% 0.00%
-77.78% -20.87% -23.37% 30.20%
-59.73% 37.49% 62.46% 125.28%
0.00% 0.00% 0.00% 0.00%
188.43% 270.66% 207.07% 69.35%
13.69% -24.83% -100.00% -100.00%
2.10% 56.06% 69.16% 89.75%
0.85% 51.33% 70.80% 85.60%

0.00% 0.00% 0.00% 0.00%
32.49% 19.70% 57.51% 85.83%
0.00% 0.00% 0.00% 0.00%
24.86% 15.21% 44.01% 65.69%
11.49% 35.32% 58.93% 76.78%
ststement with Base year 2014

2015 2016 2017 2018
19.32% 39.53% 51.85% 66.35%
19.41% 43.66% 56.91% 68.06%
19.17% 31.87% 42.46% 63.20%
10.60% 39.60% 52.99% 80.50%

32.03% 50.15% 48.38% 120.74%
32.40% 8.82% 11.50% 130.91%
57.37% -54.05% 15.74% -24.21%
31.23% 9.36% 23.37% 4.58%
-57.41% 1.86% -21.65% 23.85%

38.74% 9.99% 27.19% 2.95%
35.47% 4.46% 1.32% -64.13%

40.24% 12.52% 39.01% 33.61%
653.49% 169.40% 1.26% 586.52%

474.67% 108.74% -21.72% 413.76%
0.00% 0.00% 0.00% 0.00%
749.75% 148.25% 13.63% 679.52%
36.66% 11.84% 39.14% 30.36%
2014 2015 2016
ASSETS In Thousands
NON-CURRENT ASSETS
Intangibles 36,128 39,089 61,295
CURRENT ASSETS
Stock in trade 2,226,562 2,254,723 3,280,590
Trade debts 796,624 1,150,666 933,274
Advances 52,307 50,404 138,928
TOTAL ASSETS 4,982,449 5,555,026 6,742,389
LIABILITIES
CURRENT LIABILITIES
Unclaimed dividend
EQUITY
Total Equity 2,207,918 2,756,888 2,543,756

2014 2015 2016
Sales 9,725,258 11,604,290 13,569,350
Cost of sales -6,316,132 -7,541,804 -9,073,765
Gross Profit 3,409,126 4,062,486 4,495,585

Admin expenses -347,532 -458,844 -521,821
other expenses -91,176 -120,719 -99,217
Other icome 71,148 111,965 32,694
Finance costs -87,513 -37,269 -89,143

Taxation -323,839 -438,690 -338,277


-3,550 -30,166 -8,813
Vertical Analysis
2017 2018 2014
n Thousands ASSETS
NON-CURRENT ASSETS
3,049,019 4,150,606 Property, plant and equipment 24.89%
85,564 85,652 Intangibles 0.73%
31,719 31,719 Long Term Investement 0.64%
33,612 40,473 Long term deposits 0.44%
3,199,914 4,308,450 Total Non-Current Assets 26.69%
CURRENT ASSETS
10,880 41,880 Stores, spare parts and loose tools 0.11%
3,008,831 3,072,291 Stock in trade 44.69%
1,273,826 889,385 Trade debts 15.99%
209,476 102,144 Advances 1.05%
13,779 36,863 Trade Deposits and Prepayments 0.36%
70,982 5,764 Other recievables 0.27%
40,633 121,424 Sales tax refundable 0.00%
fair value through profit or loss 9.26%
90,288 229,728 cash and bank balances 1.57%
4,718,695 4,499,479 Total Current Assets 73.31%
7,918,609 8,807,929 TOTAL ASSETS 100.00%
LIABILITIES
141,794 0 Long-term finance - secured 0.00%
142,393 117,010 Deferred taxation 2.31%
6,023 42,366 Deferred liabilities 0.00%
0 0 Retirement benefits obligations 0.60%
290,210 159,376 Total Non-Current Liabilities 2.90%
CURRENT LIABILITIES
2,364,134 2,330,786 Trade and other Payables 27.54%
10,471 18,323 Unclaimed dividend 0.00%
8,691 14,766 Accrued intrest 0.23%
1,549,528 2,148,720 Short-term borrowning 19.14%
0 193,152 Long term finance classified as current 0.00%
515,886 284,513 Taxation - Provision less payments 3.37%
0 0 Sales tax payable 2.50%
4,448,710 4,990,260 Total Current Liabilities 52.78%
4,738,920 5,149,636 TOTAL LIABILITIES 55.69%
EQUITY
518,034 518,034 Isseud, subscribed and paid up capital 10.40%
2,661,655 3,140,259 unappropriated profit 33.92%
Exchange revaluation reserve 0.00%
3,179,689 3,658,293 Total Equity 44.31%
7,918,609 8,807,929 TOTAL LIABILITIES AND EQUITY 100.00%
18 Vertical Analysis
2017 2018 2014
14,767,390 16,178,301 Sales 100.00%
-9,910,728 -10,614,639 Cost of sales 64.95%
4,856,662 5,563,662 Gross Profit 35.05%
-2,940,098 -3,468,766 Distribution cost 19.76%

-515,662 -767,127 Admin expenses 3.57%
-101,661 -210,531 other expenses 0.94%
82,344 53,920 Other icome 0.73%
1,381,585 1,171,158 Operating Profit 11.51%
-68,567 -108,388 Finance costs 0.90%

1,313,018 1,062,770 Profit Before Taxation 10.61%
-328,121 -116,164 Taxation 3.33%

984,897 946,606 Profit After Taxation 7.29%

-5,530 -37,491 Remeasurement of retirement benefit liabili -0.06%
1,496 9,818 Related deffered tax 0.02%
Items that reclassified to P/L 0.00%
-4,034 -27,673 -0.04%
980,863 918,933 Total Comprehensive Income 7.25%
tical Analysis
2015 2016 2017 2018
27.33% 29.15% 38.50% 47.12%

0.70% 0.91% 1.08% 0.97%
0.57% 0.47% 0.40% 0.36%
0.63% 0.46% 0.42% 0.46%
29.23% 30.99% 40.41% 48.92%
0.11% 0.10% 0.14% 0.48%

40.59% 48.66% 38.00% 34.88%
20.71% 13.84% 16.09% 10.10%
0.91% 2.06% 2.65% 1.16%
0.54% 0.58% 0.17% 0.42%
0.24% 0.08% 0.90% 0.07%
0.00% 0.00% 0.51% 1.38%
7.01% 0.00% 0.00% 0.00%
0.67% 3.70% 1.14% 2.61%
70.77% 69.01% 59.59% 51.08%
100.00% 100.00% 100.00% 100.00%
0.00% 0.00% 1.79% 0.00%

1.68% 1.20% 1.80% 1.33%
0.00% 0.00% 0.08% 0.48%
0.35% 0.20% 0.00% 0.00%
2.03% 1.40% 3.66% 1.81%
30.11% 30.67% 29.86% 26.46%

0.00% 0.00% 0.13% 0.21%
0.05% 0.13% 0.11% 0.17%
6.91% 19.45% 19.57% 24.40%
0.00% 0.00% 0.00% 2.19%
8.72% 9.24% 6.51% 3.23%
2.54% 1.39% 0.00% 0.00%
48.34% 60.87% 56.18% 56.66%
50.37% 62.27% 59.85% 58.47%

9.33% 7.68% 6.54% 5.88%
40.30% 30.00% 33.61% 35.65%
0.00% 0.04% 0.00% 0.00%
49.63% 37.73% 40.15% 41.53%
100.00% 100.00% 100.00% 100.00%
tical Analysis
2015 2016 2017 2018
100.00% 100.00% 100.00% 100.00%
64.99% 66.87% 67.11% 65.61%
35.01% 33.13% 32.89% 34.39%
18.32% 19.77% 19.91% 21.44%

3.95% 3.85% 3.49% 4.74%
1.04% 0.73% 0.69% 1.30%
0.96% 0.24% 0.56% 0.33%
12.66% 9.02% 9.36% 7.24%
0.32% 0.66% 0.46% 0.67%

12.34% 8.37% 8.89% 6.57%
3.78% 2.49% 2.22% 0.72%

8.56% 5.87% 6.67% 5.85%
-0.35% -0.11% -0.04% -0.23%

0.09% 0.03% 0.01% 0.06%
0.00% 0.01% 0.00% 0.00%
-0.26% -0.06% -0.03% -0.17%
8.30% 5.81% 6.64% 5.68%
Intrepretation of Financial Ratios of National Foods
1 Current Ratio
The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its sho
company analysis the ratio is 0.90 which means only 90% of our liabilities can be paid with
2 Acid- Test Ratio

the quick ratio, also known as the acid-test ratio is a type of liquidity ratio which measures the ability of a
assets to extinguish or retire its current liabilities immediately. In case of national foods the ratio is 0.28 w
can be paid through quick assets.
4 Receivable Turnover Ratio
Receivable Turnover Ratio or Debtor's Turnover Ratio is an accounting measure used to measure how effe
as well as collecting debts.The faster these accounts are paid, the sooner the firm gets the funds to pay o
national foods the company recives 10.3 times payment during an accountin
5 Receivable Turnover in Days:
This ratios show that after how many days of credit sales the payment is received the higher the ratio th
recievables to be received in case of national foods the company recieves the payment after 3
6 Payable Turnover Ratio:
The accounts payable turnover ratio is a short-term liquidity measure used to quantify the rate at whic
Accounts payable turnover shows how many times a company pays off its accounts payable during a p
comapany pays 4 times in an accounting period.
7 Payable Turnover in Days:
It tells us about the number of days for which the account payable remain outstanding.for national food
days of their credit purchases which shows a bad performance of the com
8 Inventory Turnover Ratio:
This ratio basically shows the effectiveness of inventory management practices of a firm. In other words,
the firm had sold and replaced its inventory during a year. As far as National Foods is concerned, the in
which portrays that it had sold its inventory 3.49 times in an accounting
9 Inventory Turnover in Days:
It tells us about the sale and replace of inventory of firm in days. In case of National Food, the inventory
depicts that it takes 104 days in order to sell the inventory during an accounting period
11 Total Asset Turnover Ratio:
The asset turnover ratio is an efficiency ratio that measures a company's ability to generate sales from it
average total assets. In other words, this ratio shows how efficiently a company can use its assets to gene
company generates 1.9 times of sales from the available total assets
12 Net Fixed Asset Turnover Ratio:
The net fixed asset turnover ratio reflects the firm’s utilization of fixed assets to generate sales. National fo
available fixed assets.
13 Tangible Fixed Asset Turnover Ratio:
This ratio indicates the use of tangible fixed assets by the firm in order to generate the sales. It depicts
revenue while making use of tangible fixed assets like property, plant and equipment. For National foods
which shows that they generate 4.49 times of sales from the available tangible fi
14 Equity Turnover Ratio:
Equity turnover is a ratio that measures the proportion of a company's sales to its stockholders' equity.
determine the efficiency with which management is using equity to generate revenue.National food gene
the available shareholder equity.
Equity turnover is a ratio that measures the proportion of a company's sales to its stockholders' equity.
determine the efficiency with which management is using equity to generate revenue.National food gene
the available shareholder equity.
15 Gross Profit Margin Ratio:
Gross margin is the difference between revenue and cost of goods sold divided by revenue. Gross ma
Furthermore, it also depicts the efficiency of firm’s operation and pricing policies. National food Gross pro
34% of their sales is converted into gross profit and rest 66% is cost of goo
16 Net Profit Margin Ratio:
Profit margin, net margin, net profit margin or net profit ratio is a measure of profitability. It is calcul
percentage of the revenue. National food net profit margin is 5.85% which mean 6% of sales
17 Return on Investment:
Return on investment (ROI) measures the gain or loss generated on an investment relative to the amou
expressed as a percentage and is typically used for personal financial decisions, to compare a compan
efficiency of different investments. For NAtional foods the company is generating profit of
18 Operating Profit Margin Ratio:
The operating profit margin shows that how much profit have been earned after deducting every type of
case of national food the company generates profit of around 7.24% of s
19 Return on Equity (ROE):
the return on equity is a measure of the profitability of a business in relation to the equity, also known a
ROE is a measure of how well a company uses investments to generate earnings growth. National food g
invested by the shareholders.
the return on equity is a measure of the profitability of a business in relation to the equity, also known a
ROE is a measure of how well a company uses investments to generate earnings growth. National food g
invested by the shareholders.
21 Debt-to-Equity Ratio:
Debt-to-Equity ratio is basically used to measure the financial leverage of any firm, mean how much prop
by the firm to finance its assets. Debt-to-Equity ratio for National Food in year 2018, is 1.40, which port
22 Debt-to-Total Assets Ratio:
This ratio is usually used to identify the financial leverage. National food 58% of total assets a
23 Debt-to-Total capitalization ratio:
This ratio shows the relative importance of long term debt to the long term financing of the firm.it is the
of the firm. In our scenario, the debt to total capitalization ratio is 1.34, which is 134 times, which show
portion through debt, specifically through long term debt.
24 Business Risk:
This ratio is used to measure the uncertainty of operating income caused by the firm’s nature of busines
which is considerably low.
25 Sales Volatility:
This ratio is used to determine the volatility of operating income. The variability of sales is mainly caus
outside the control of management. In our case the sales volatility is 0.19 which is low qhich
26 Operating Leverage:
Operating leverage is a ratio that measures the degree to which a firm or project can increase operatin
business that generates sales with a high gross margin and low variable costs has high operating levera
leverage which is High which means comapany ius generating better gross
27 Interest Coverage RATIO:
This ratio indicates the firm ability to cover its interest charges. This ratio shows how many times a compa
case of national food the company can pay 10 times interest from its availa
29 Horizontal Analysis of Balance Sheet and Income Statem
Horizontal analysis (also known as trend analysis) is a financial statement analysis technique that sh
corresponding financial statement items over a period of time. It is a useful tool to evaluate the trend s
more periods are used in horizontal analysis. The earliest period is usually used as the base period and th
periods are compared with items on the statements of the base period. The changes are generally sho
According to the horizontal analysis of balancesheet of national food it can be seen that majority of the as
means that the companies investment is increasing as well as the total assets of the company are incr
decreasing which shows a good effort of the business in reducing debts of the business. the total asset
shows that a business is well growing and its growth rate is very high and
30
Vertical Analysis of Balance sheet and Income Statem
Vertical analysis is a method of financial statement analysis in which each line item is listed as a perc
statement. In vertical analysis, every item of balance sheet is divided by the total assets, and by net sa
basically shows the percentage increase or decrease in the every item of financial statements in comparis
as according to our company vertical analysis of balance sheet it can be seen that the companies major pa
mainly in 4 years there is an average of 56% of liability and 44% of equity which means the company is u
income statement vertical analysis it can be seen that the cost of sales % is increasing which means that t
they are not efficinetly using its resources which is resulting in higher cost
income statement vertical analysis it can be seen that the cost of sales % is increasing which means that t
they are not efficinetly using its resources which is resulting in higher cost
ational Foods Pakistan
esources to meet its short-term obligationsAccording to our

bilities can be paid with or available resourses.
measures the ability of a company to use its near cash or quick

foods the ratio is 0.28 which means only 28% of our liabilities
assets.
Ratio
ed to measure how effective a company is in extending credit

gets the funds to pay off its own current liabilities. in case of
ent during an accounting period.
n Days:
d the higher the ratio the greater the days of waiting for the
eves the payment after 35 days of the credit sales.
atio:
quantify the rate at which a company pays off its suppliers.

ounts payable during a period. In case of national food the
unting period.
Days:
nding.for national food the company pays its supplier after 80

performance of the company.
Ratio:
a firm. In other words, it simply shows that how many times

ods is concerned, the inventory turnover ratio is 3.49 times,
times in an accounting year.
n Days:
onal Food, the inventory turnover in days is 104 days, which

ng an accounting period which is not good.
Ratio:
o generate sales from its assets by comparing net sales with

an use its assets to generate sales. in case of national food the
he available total assets.
er Ratio:
nerate sales. National food generates 4 times of sales from the

.
over Ratio:
rate the sales. It depicts the efficiency of firm in generating

ent. For National foods, the tangible fixed assets ratio is 4.49,
m the available tangible fixed asssets.
atio:
ts stockholders' equity. The intent of the measurement is to

enue.National food generates around 4.73 times of sales from
equity.
Ratio:
d by revenue. Gross margin is expressed as a percentage.

National food Gross profit margin is 34.39% which means that
d rest 66% is cost of good sold.
atio:
profitability. It is calculated by finding the net profit as a

which mean 6% of sales are converted into profit.
ent:
ent relative to the amount of money invested. ROI is usually

s, to compare a company's profitability or to compare the
y is generating profit of 10% of the investment.
n Ratio:
deducting every type of interests and taxes from the profit. In

ofit of around 7.24% of sales.
ROE):
he equity, also known as net assets or assets minus liabilities.

growth. National food generates profit of 25.8% of the equity
ders.
tio:
, mean how much proportion of debt and equity is being used

018, is 1.40, which portrays that debt is 140 times of equity.
Ratio:
od 58% of total assets are financed through debt
tion ratio:
ing of the firm.it is the ratio that shows the financial leverage
134 times, which shows that the firm has financed its major
gh long term debt.
firm’s nature of business. National food business risk is 13%

ow.
y of sales is mainly caused by seasonal effects and is largely

0.19 which is low qhich means less fluctuations.
ge:
ct can increase operating income by increasing revenue. A

as high operating leverage. National food has 67% operating
generating better gross profit.
ATIO:
w many times a company can payoff its interest from it EBIT in

interest from its available EBIT.
and Income Statement:
nalysis technique that shows changes in the amounts of

to evaluate the trend situations. The statements for two or
s the base period and the items on the statements for all later
anges are generally shown both in dollars and percentage.
n that majority of the assets percentages are increasing which
of the company are increasing. The long term liabilities are
business. the total assets increased by 76% in 4 years which
wth rate is very high and good.
nd Income Statement:
e item is listed as a percentage of a base figure within the

tal assets, and by net sales in case of income statement. It
statements in comparison with the total assets and net sales.
the companies major part os asset is financed through debt as
means the company is under high debt. and according to the
sing which means that the company efficincy to reducing and
resulting in higher cost of sales.

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Balance Sheet 2014 to 2018

2014 2015 2016

TOTAL ASSETS 4,982,449 5,555,026 6,742,389

TOTAL LIABILITIES 2,774,531 2,798,138 4,198,633

TOTAL LIABILITIES AND EQUITY 4,982,449 5,555,026 6,742,389

Income Statement from 2014 to 2018

Distribution cost -1,921,722 -2,125,366 -2,682,631

Finance costs -87,513 -37,269 -89,143

Taxation -323,839 -438,690 -338,277

Other Comprehensive Income

Ratio Analysis of National Foods Pakistan

141,794 0 3. Coverage Ratios:

4,738,920 5,149,636 In Days Payable Turnover =

Inventory Turnover Ratio =

8 Net Profit Margin =

Total Asset Turnover Ratio =

Tangible Fixed Asset Turnover Ratio =

Equity Turnover Ratio =

Return on Equity (ROE) =

Ratios Calculations of 2018

Current Assets/ Current Liabilities

Current Assets-Inventories/ Current Liabilities

Cash and Marketable Securities/ Current Liabilities

Total Debt/ Shareholder's Equity

Total Debt/ Total Assets

Total Debt/ Total Capitalization

EBIT/ Interest Expense

Annual Net Credit Sales/ Average Receivables

No. of Days in a year/ Receivable Turnover

No. of Days in a year/ Inventory Turnover

Gross Profit/ Net Sales

Net Profit after Taxes/ Net Sales

Net Profit after Taxes/ Total Assets

Net Profit after Taxes/ Shareholder's Equity

Operating Profit/ Net Sales

Net Income/ Average Total Equity

Net Sales/ Average Total Net Assets

Net Sales/ Average Net Fixed Assets

Net Sales/ Average Net Tangible Assets

Net Sales/ Average Equity

Standard Deviation of Operating Earnings/ Mean of Operating Earnings

(Loss) / profit before

Standard Deviation of Sales/ Mean of Sales

∑(Percentage change in operating Earning/ Percentage Change in Sales)

(Loss) / profit before

Retention Rate = (1-Dividends declared/ Net Earnings)

Dividend Declared by the Company:

Calculation of Average Receivables:

Average Receivables for 2017,18 = 1,567,55

Average Inventory for 2017,18 = 3,040,56

Calculation of Avg Payables

urnover Avg Payables for 2017, 18 = 2,347,46

Gross Profit/ Net Sales

rofit after Taxes/ Net Sales

ofit after Taxes/ Total Assets

fter Taxes/ Shareholder's Equity

erating Profit/ Net Sales

come/ Average Total Equity Average Total Equity= 3,418,99

es/ Average Total Net Assets

es/ Average Net Fixed Assets Average Total Assets = 8363269

Calculation of Average Fixed Assets:

Calculation of Average Tangible Fixed Assets:

rating Earnings/ Mean of Operating Earnings 0.1373729467

Standard Deviation of OE Mean of OE