PAF-Karachi Institute of Economics &

Technology

RATIOS ANALYSIS

Presented by:
TOUFEEQ AHMED
Registration # 55302

Introduction to Business Finance

Course Facilitator: Sir Sikandar Taj

Overview:

ENGRO FOODS
LIMITED

Engro Foods Limited was officially launched as a fully owned subsidiary of Engro in
2004. Using dairy as a stepping stone to enter into the food business, the Company
has established state-of-the-art processing units in Sukkur and Sahiwal, along with an
ice cream production facility in Sahiwal.
Top quality brands like Olpers, Olwell, Tarang, Omore and Owsum have been
successfully launched under the helm of Companys dairy products. To support these
brands and their highest standards of quality, Engro Foods has invested heavily in
milk processing and milk collection infrastructure.

ENGRO FOODS
Ratio Analysis

Ratio Analysis

Ratio Analysis
1.

Liquidity the ability of the firm to pay its way

2.

Investment/shareholders information to enable decisions to be made on the

extent of the risk and the earning potential of a business investment

3.

Gearing information on the relationship between the exposure of the business to

loans as opposed to share capital

4.

Profitability how effective the firm is at generating profits given sales and or its
capital assets

5.

Financial the rate at which the company sells its stock and the efficiency with
which it uses its assets

Ratio Analysis
Financial Data
Input Data
Current assets
Fixed assets
Total assets
Average total assets
Cash and cash equivalents
Inventory
Average inventory
Current liabilities
Total liabilities
Owners' equity
Number of common shares
Average number of common shares
Average owners' equity
Market price per share
Devidend Paid
Book Value per share
Total Sales
Operating expenses
Operating income
Other expense
Earnings before interest and taxes
Interest expense
Net income

Val ues in '000

2008
12,042,221
45,122,518
57,164,739
28,582,370
1,687,038
4,680,896
4,680,896
5,999,353
36,111,133
21,053,606
212,816,117
212,816,117
21,053,606
96.46
425,632
98.93
23,317,198
1,657,815
4,538,748
579,556
6,713,522
1,508,948
4,240,430

2009
10,748,871
82,960,567
93,709,438
46,854,719
3,955,342
422,607
2,551,752
6,395,469
66,821,200
26,888,238
297,942,563
255,379,340
23,970,922
183.27
595,885
105.29
30,171,520
195,176
4,986,168
424,110
6,535,525
1,320,579
3,957,250

2010
3,114,550
27,896,393
31,010,943
15,505,472
808,584
2,551,752
1,487,179
3,654,457
3,657,304
27,053,639
327,736,819
312,839,691
26,970,939
193.81
555,473
86.48
26,744,359
388,652
4,762,458
38,773
1,904,106
92,131
1,675,959

Ratio Analysis
1.

1. Liquidity
Ratio

Current Ratio:
Current Assets
Current Liabilities
2008
12,042,221
5,999,353

Comments:

2009
2.01

10,748,871
6,395,469

2010
1.68

3,114,550
3,654,457

0.85

Ratio Analysis
2.

1. Liquidity
Ratio

Quick Ratio::
Current Assets Inventory
Current Liabilities
2008
12,042,221 - 4,680,896
5,999,353

Comments:

2009
= 1.23

10,748,871

6,395,469

422,607

2010
=

1.61

3,114,550 - 2,551,752 =
3,654,457

0.15

Ratio Analysis
3.

1. Liquidity
Ratio

Net Working Capital Ratio:

Current Assets Current Liability
Total Assets
2008
12,042,221 - 5,999,353
57,164,739

Comments:

2009
= 0.11

10,748,871

6,395,469 =
93,709,438

2010
0.05

3,114,550 - 3,654,457 =
31,010,943

(0.02)

1. Liquidity
Ratio

Ratio Analysis
4.

Cash Ratio:
Cash & Cash Equivalent
Current Liability
2008
1,687,038
5,999,353

Comments:

2009
=

0.28

3,955,342
6,395,469

2010
=

0.62

808,584
3,654,457

0.22

1. Liquidity
Ratio

Ratio Analysis
5.

Operating Ratio:
Operating Expenses
Operating Income
2008
1,657,815
4,538,748

Comments:

2009
=

0.37

195,176
4,986,168

2010
=

0.04

388,652
4,762,458

0.08

1. Liquidity
Ratio

Ratio Analysis
6.

Operating Expenses to Sales:

Operating Expenses
Total Net Sales
2008
1,657,815
23,317,198

Comments:

2009
= 7.11%

195,176
30,171,520

2010
=

0.65%

388,652
26,744,359

1.45%

2. Assets Ratio

Ratio Analysis
7.

Inventory Turnover Ratio:

Total Sales
Average Inventory

Comments:

2. Assets Ratio

Ratio Analysis
8.

Fixed Assets Turnover Ratio::

Total Sales
Fixed AssetsIf
2008
52%

Comments:

= 23,317,198
45,122,518

2009
36%

= 30,171,520
82,960,567

2010
96%

= 26,744,359
27,896,393

2. Assets Ratio

Ratio Analysis
9.

Total Assets Turnover Ratio:

Total Sales
Total Assets
2008
41%

= 23,317,198
57,164,739

Comments:

2009
32%

= 30,171,520
93,709,438

2010
86%

= 26,744,359
31,010,943

2. Assets Ratio

Ratio Analysis
10. Assets to Equity Ratio:
Total Assets
Owners Equity
2008
2.72

Comments:

= 57,164,739
21,053,606

2009
3.49

= 93,709,438
26,888,238

2010
1.15

= 31,010,943
27,053,639

Ratio Analysis

3. Profitability
Ratio

11. Return on Assets Ratio:

Net Income
Average Total Assets
2008
15%

Comments:

4,240,430
28,582,370

2009
8%

3,957,250
46,854,719

2010
11%

1,675,959
15,505,472

Ratio Analysis

3. Profitability
Ratio

12. Return on Equity Ratio:

Net Income
Average Owners Equity
2008
0.20

Comments:

4,240,430
21,053,606

2009
0.17

3,957,250
23,970,922

2010
0.06

1,675,959
26,970,939

Ratio Analysis

3. Profitability
Ratio

13. Profit Margin Ratio:

Net Income
Total Net Sales
2008
18%

Comments:

4,240,430
23,317,198

2009
13%

3,957,250
30,171,520

2010
6%

1,675,959
26,744,359

Ratio Analysis

3. Profitability
Ratio

14. Basic Earning Ratio:

Earning Before Interest & Taxes
Total Assets
2008
12%

Comments:

6,713,522
57,164,739

2009
7%

6,535,525
93,709,438

2010
6%

1,904,106
31,010,943

4. Debt Ratio

Ratio Analysis
15. Total Debt Ratio:
Total Liabilities
Total Assets
2008
0.63

Comments:

36,111,133
57,164,739

2009
0.71

66,821,200
93,709,438

2010
0.12

3,657,304
31,010,943

4. Debt Ratio

Ratio Analysis
16. Interest Coverage Ratio:
EBIT
Interest Expense
2008
4.45

Comments:

2009
6,713,522
1,508,948

4.95

2010
6,535,525
1,320,579

20.67

1,904,106
92,131

4. Debt Ratio

Ratio Analysis
17. Debt/Equity Ratio:
Total Liability
Owners Equity
2008
1.72

Comments:

36,111,133
21,053,606

2009
2.49

66,821,200
26,888,238

2010
0.14

3,657,304
27,053,639

Ratio Analysis

5. Market
Ratio

18. Earning Per Share (EPS) Ratio:

Net Income
Average No. of Common Stock
2008
19.93

= 4,240,430,000
212,816,117

Comments:

2009
15.50

= 3,957,250,000
255,379,340

2010
5.36

= 1,675,959,000
312,839,691

5. Market
Ratio

Ratio Analysis
19. Prince to Earning Ratio:
Market Price Per Share
Earning Per Share
2008
4.84

Comments:

2009
96.46
19.93

11.83

2010
183.27
15.50

36.18

193.81
5.36

5. Market
Ratio

Ratio Analysis
20. Dividend Payout Ratio:
Dividend Paid
Net Income
2008
0.10

Comments:

425,632
4,240,430

2009
0.15

595,885
3,957,250

2010
0.33

555,473
1,675,959

Questions