SHELL PAKISTAN

Financial management
Final project
Abdul Rehman REG NO L1S11MCOM0055 SECTION B

2012

UNIVERSITY OF CENTRAL PUNJAB 1

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Current ratio

= =

Current Assets Current liabilities 25,489,760 30,407,710 0.83 times

In this ratio current liabilities of company are more than its current assets which is not favorable for the company. Quick ratio = Current asset (Inventories + prepaid expenses) Current Liabilities = 25,489,760-12,668,324 30,407,710 = 0.42 times

In this ratio the quick assets amounts to pay off the short term loan of the company which is not good on the behalf of the company. Cash ratio = = Cash + Cash equivalent Current Liabilities 8,941,413 30,407,710

0.30 times
January 21, 2012

In this ratio company cash and cash equivalent amounts also less than the company liabilities in case of liquidation of company the amounts of cash and cash equivalent is not so much to cover the debts and shareholders investment. Which is also not favorable for the company?

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Debt to equity ratio

total liabilities Shareholders equity = 9,986,438 7,900,035 = 1.26 times In these ratio total debts is more than the shareholders equity which means that shareholders contribution is less than the creditors and lenders.

Debt to asset ratio

= = =

total liabilities/total debts Total assets 9,986,438 38,497,511 0.26 times

Total asset amount is higher than the total liabilities which is good for the company in case of liquidation of the company total debts amount cover by the total asset. Interest coverage ratio = = = Earning before interest & tax Interest expenses 3,712,754 86,350 42.99 times
January 21, 2012

Interest should be cover 42.99 times from the earning which is favorable for the company.

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Debt-service coverage ratio = Earning before interest & tax Interest + principal 1-(tax rate) 3,712,754 86,350+9,986,438 1-35% 0.24 times

Receivable turnover ratio = Credit sales Average Account Receivable = 223,813,592 = 9,395,541 = 23.82 times

This ratio is favorable for the company because receivable is good on the behalf of the company and in this ratio company received the a/c receivable 23.82 times as this ratio increased it is good for the company. Receivable turnover (in days) = 360 Receivable turnover ratio = 360 23.82 = 15.11
January 21, 2012

Company received the amounts from the debtors after 15.11 days if the company

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Inventory turnover ratio= Cost of goods sold Average inventory = 185,403,153 12,727,689 = 14.56 times This ratio favorable for the company because as early as possible goods sold inventory should be placed. If goods replaced as goods sold than there is no chance of shortage of inventory. Inventory turnover (in days) = 360 14.56 = 24.72 This is favorable for the company to sell the inventory in no time. Holding period should be minimum. Because as early as possible goods sold company generates the revenues.

Payable turnover ratio

Credit purchases Average account payable = 6,117,414 17,953,773 = 0.34 times In this ratio company account payable has high amount but it is favorable for the company to slow down such type of payable. Payable turnover ratio (in days) = 360 Payable turnover ratio = 360 0.3407 = 1057 It is beneficial for the company to pay his payable not as early as required because this is option to company to invest that amount in other business and earns the profit.

January 21, 2012

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Net profit margin

= = =

Net profit Sales 1,615,582 223,813,592 7.2%

The amount of sales is higher than the net profit which means more expenses and taxes decreased that profit amount which is not favorable.

Gross profit margin

Gross profit Sales = 12,127,758 223,813,592 = 5.41% The amount of sales is higher than the gross profit which means that amount of cost of sale is more which is not good for the company. Return of equity = = = Profit after tax Shareholders equity 1,615,582 7,900,045 20.45%

= =

January 21, 2012

Return on investment

Profit after tax Total investment 1,615,582 38,497,511 4.20%

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Earning per shares

= = =

Profit after tax No. of outstanding shares 1,615,582 68,487,913 2.40% Dividend declared No. of outstanding shares 821,859,956 68,487,913 12.00 Dividend per share Earning per share 12.00 23.59 50.86%

Dividend per shares

= = =

Dividend payout

= = =

Retention ratio

= = =

1- Dividend payout 1-50.86% 49.14%

Price-earnings ratio

Market price per share Earning per share 142 23.59 6.02
January 21, 2012

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Earning yield

= = =

Earning per share Market price per share 23.59 142 16.61% Dividend per share Market price 12 142 8.5% Market price Book value 142 11.53% 1231.56 Shareholders equity No. of outstanding shares 7,900,035 68,487,913 11.53%

Dividend yield

= = =

Market price to book value = = = Book value = = =

January 21, 2012

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January 21, 2012

Sr No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Ratios Current ratio Quick ratio Cash ratio Debt to equity ratio Debt to asset ratio Interest coverage ratio Debt-service coverage ratio Receivable turnover ratio Receivable turnover (in days) Inventory turnover ratio Inventory turnover (in days) Payable turnover ratio Payable turnover ratio (in days) Net profit margin Gross profit margin Return of equity Return on investment Earning per shares Dividend payout Retention ratio Price-earnings ratio Earning yield Dividend yield Market price to book value Book value Dividend per shares

0.83 0.42 0.3 1.26 0.26 42.99 0.24 23.82 15.11 14.56 24.72 0.34 1057 7.20% 5.41% 20.45% 4.20% 2.40% 50.86% 49.14% 6.02 16.61% 8.50% 1231.56 11.53% 12

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January 21, 2012