Pakistan Tobacco Company internship report finance department

Pakistan Tobacco Company

Dedicated To My Sweat Mother, whose prays, affection and Support is always besides me, and My friends who were always there to help me and to the one Who taught me life.

Ifzal Ahmed BBA Batch-4 COMSATS Institute Of Information Technology, Lahore.

- 1 -

Internship Report

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Acknowledgment

It has been a great source of information and learning for me to remain an internee in Pakistan Tobacco Company.

I am grateful to my Allah for providing me all the skill and support to be able to comprehend and conduct this task.

It was a true guidance and trust of my Head Supervisor Sir Naseer (FSM AKF) Ali and my Line Manager Sir Sarfaraz Khan in me which led me to carry out this Report and exercises for the first time in my life, which I was quite hesitant to do. Surely the Boss has the in sight, which makes an internee fly rather than just to hop. A bundle of thanks to Sir Shakeel Aslam (Internship Advisor) who led me throughout my entire internship period.

This Report has inculcated in me a high degree of sense for management, and I now have the knowledge for that how an organization operates their activities. Being a student of business now I feel more confident and capable to deal with finance activities.

May God bless my teachers and my Boss for making me what I am today.




























EXECUTIVE SUMMARY

One can learn through different ways. But to get the first hand knowledge, one should put itself in practical and natural environment. This is the utmost purpose of internship, which we supposed to do for at least six to eight weeks.

Pakistan Tobacco Company (PTC) a member of British American Tobacco (BAT) group is a well-reputed multinational organization. PTC uses state of art technology in every department. It is great prestige and honor for me to work in an environment, which has utilized our energies to fullest. Being internee here I have learnt a lot, and environment here was friendly and conducive for learning. In finance department learnt about the manufacturing expenses which mainly consist of production expenses, production wages, and depreciation and other part of my work I spent with leaf financing, accounts payable and vouchers section. This introduction is regarding to report, which consists of Background of study, Purpose of Study, Scope of Study, Methodology of Research.

I spend 6 weeks of my internship at AKF. I visited each and every section of the factory. First week was introductory, I visited different departments i.e. SECURITY, GLT, PMD, SMD, QUALITY, SCD, HRD. The rest of all weeks I worked at finance department. All the employees and the unionized worker that I met with were very co-operative.




























CHAPTER – 1 INTRODUCTION




























OBJECTIVES: Objective is to understand the background, purpose and scope of the report. To study the methods and tools used in report.

1.1BACKGROUND OF STUDY COMSATS Institute of information technology Lahore requires its student of business administration to undergo six to eight-weeks internship programme. Selection of organization depends upon the interest of the student as well as the field of specialization. This six week practical experience is then documented in the written form known as “Internship Report” which is based on theoretical and practical learning of the internee. To-Day professional fields are becoming more and more challenging. To survive and get success in any field, you should have the deep knowledge and appropriate skills of the concern field. In fact this is very true about the field of management studies. Knowledge and skills of a person can be polished, if he goes through some practical experiences. Internship provides an excellent opportunity to students of professional field especially management studies, to polish their skills and concrete their theoretical knowledge. Student gets the opportunity to match their knowledge with the actual happening of the fields. Internship program is the exposure for the students to the real working condition, and the chance to learn the practical work and know about the culture, working conditions, processes, and procedures of an organization to fulfill the demand of a job. All these things are very important for the student to pursue a good career.

1.2

PURPOSE OF THE STUDY

The purpose of the report is to study the management practices, processes and procedures followed by PTC. The study is intended to analyze PTC in terms of its




























1.3

SCOPE OF THE STUDY

The reader can have a brief introduction to the PTC Akora Khattak Complex form this report. It encompasses the various departments of Akora Khattak Complex, their processes and procedures, and the various human resources policies adopted by PTC. It also encompasses the SWOT analysis of the company, and recommendations.

1.3.1 LIMITATION OF THE STUDY Up-to-date information is one of the limitations of the study because the information, which is available, is not sufficient to fulfill the requirement of the report, and as all know PTC is such a large organization and the span of operation is too big so to cover it in little time is one of the limitation of the study, because it is very difficult to cover each and every aspect of an organization in allotted tome. The internship program was limited to the Akora Khattak Complex only so the review section only contains data about the AKF Complex and does not cover the whole of the organization .

1.3.2 DELIMITATION OF THE STUDY The report has authentic data of managerial position of the company, and this analysis will of great usage to management, creditors, investors and the students of management sciences and for those who are interested in management particularly.

1.4 METHODOLOGY OF RESEARCH The method for data collection is central theme of the study. No study is completed without using the scientific and systematic ways to get latest knowledge about the study. So the methodology for data collection is based on the traditional categories i.e. 1. Primary Data Collection






























1.4.1 PRIMARY DATA COLLECTION

In primary data collection I used the techniques of: i.

Personal observation.

ii.

Briefing and discussion during the internship with BSO’s and MTO’s departments.

iii.

Unstructured interview technique is also used when I faced any problem during work.

1.4.2 SECONDARY DATA COLLECTION

In secondary data collection method I get information from: i. Annual reports of different years. ii. Brochures for information to customers. iii. Inter organization memos.






























CHAPTER – 2 ORGANIZATIONAL SET-UP AND FUNCTIONS OF PTC






























2.1

INTRODUCTION TO THE ORGANIZATION

The business of British American Tobacco was originally established in 1902, whento end an intense trade war. The Imperial Tobacco Company of the United Kingdom and the American Tobacco Company of the United States agreed to form a joint venture, the ‘British-American Tobacco Company Limited’.

The BAT business began life in countries as diverse as Canada, China, Japan, Denmark, Germany, New Zealand, South Africa and Australia – but not the UK or the USA. By 1910, its operations had extended to the West Indies, India, Ceylon (now Sri Lanka). East Africa, Java, Malaya (now Malaysia) and Nigeria. BAT listed on the London Stock Exchange in 1912 and British investors acquired most of its American parent’s shares.

BAT held strong market positions around the world and had leadership in more then 50 markets. Since 1994, the group has grown global market share from 10.7 percent to over 15 percent. BAT has 86 factories in 64 countries. BAT uses more than 700 million kilos of tobacco and has 25 leaf growing projects and 23 leaf processing plants, with over 300 brands in BAT portfolio and a market share of 15 percent, make the cigarette chosen by one in seven of the world’s one billion adult smokers. BAT differentiated portfolio of brands included well established international brands such as Lucky Strike, Kent, Dunhill, Benson & Hedges, 555, Viceroy, Pall Mall. John Player Gold Leaf (JPGL). BAT is the second largest quoted






























100,000 people, operates in 180 countries and is one of the top 5 FMCG trademarketing companies in the world.

2.2.1 History of Pakistan Tobacco Company PTC was incorporated in Pakistan and is listed on the three stock exchanges of the country. It was established in the same year when Pakistan took its birth in 1947, and took over the business of Imperial Tobacco Company (India). It had three branches – Karachi, Jehlum and Akora Khattak, but Karachi factory however has been closed since 1992 due to heavy losses and some other reasons.

The first plant was set in a warehouse in Karachi port with monthly production of 30 million cigarettes against sales of 60 million, the gaps being filled up by import. When Pakistan came into being all tobacco was imported in for production of cigarettes. But in 1952, a development project was initiated in N.W.F.P. and the top quality American Tobacco found way to Pakistan.

A factory was established in 1955 at Jehlum, and PTC became a Public Limited Company in the same year. In1975 a new cigarette factory was set up at Akora Khattak to meet the increasing demand. Akora Khattak factory is now one of the largest factories of N.W.F.P.






























nonetheless, rose sharply by 175 % to Rs.417 million, from Rs.152 million and after tax profit showed growth of 92 % to Rs.248 million, from Rs.129 Million.

New products introduced during the past two years accounted for 33 % of PTC's sales during the six months under review, during which the company said to have unparalleled performance in new product innovation in the cigarette industry. The company has continued to claim that four out of the five top selling brands in Pakistan are those of PTC. They include Gold Flake, Capstan, John Players Gold Leaf and Embassy. The company had paid the last cash dividend in 1995. The 10- rupee share in PTC had hit its record high at Rs.162 in 1994. The price slipped over the years to hit the lowest Rs8.50 in 2000; but the stock has now recovered to Rs60.25.

The Board did not declare a dividend for shareholders for 2001 and used all of the profit to wipe out the huge accumulated deficit of Rs.337 million on the balance sheet. But the important thing is that the shareholders' equity is back in the black. At end-June 2002, shareholders' equity amounted to Rs2.820 billion, with Rs.2.555 billion being the paid up capital. For PTC, it isn't still a smooth journey. "We reiterate that tax evading sector remains a major threat to the government revenue and to our business," directors complain in their half term report, adding that the steps taken by the government in the past to check evasion had been encouraging. However, recent increase in activities of the tax-evading sector was stated to be alarming; the company urging government support in the matter.
































2.2.2 Mission statement of Pakistan Tobacco Company
































Diagram 1: vision, Mission, and key Objectives of PTC

No

First choice For every one

Transform PTC to perform with speed, flexibility and enterprising sprit of

Regain volume leadership by positioning viable brands in all consumer- relevant segments
































2.2.3 Business Principles

PTC follows three fundamental business principles: •

Mutual Benefit

•

Responsible Product Stewardship

•

Good corporate Conduct

Each Principle is supported by a series of core Beliefs, which are explained below

Mutual Benefit: The principle of mutual benefit is the basis on which we build our relationship with our stakeholders. We are primarily in business to build long term shareholder value and we believe the best way to do this to understand and take account of the needs and desires of all our stakeholders. Core Beliefs:

I. Creating long term shareholder value
































Core Beliefs: I. Provision of accurate, clear health messages about risks of tobacco consumption. II. Reduction of the health impact of tobacco consumption whilst respecting the right of informed adults to choose the products they prefer. III. Continued availability of relevant and meaningful information about our products. IV. Underage people should not consume tobacco. V. Responsible marketing of our brands and products and directed at adult consumer. VI. Appropriate taxation of tobacco products and elimination of illicit trade. VII. Regulation that balances the interests of all sections of society, including tobacco consumers and the tobacco industry. VIII. Approach public smoking in a way that balances the interest of smokers smokers and nonsmokers.

Good Corporate Conduct: The principle of Good Corporate Conduct id the basis on which all our business should
































2.2.4 Guiding Principles

PTC follow four guiding principle that represents: •

Strength from diversity

•

Open minded

•

Freedom through Responsibility

•

Enterprising spirit

Our guiding principles describe the organization we are and the type of organization we want to be. They represent the common value at the heart of our success.

•

Strength from diversity:

Strength from diversity reflects the culture mix within the company and the work environment that respects employees’ individual differences. It also reflects our vision of harnessing diversity-of people, cultures, viewpoints, brands, markets and ideas.

•

Open minded:


































2.2.5 Business Process Re-engineering

Appreciating the importance to change the status quo for continuous improvement and deliver strong business results in a sustainable way, PTC has always been on the lookout for opportunities to enhance the speed, efficiency and reliability of PTC’s Process. Several BPR projects were undertaken during 2006 and 2007 including the setting up of the Enterprise Programme Office (EPO), project slender at Akora Khattak Factory and the supply chain Operations References (SCOR) Model implementation. EPO puts in Place a new way working, which keeps corporate strategy at the forefront and ensure that all the initiatives are aligned to support the strategy though effective


































2.2.7

Environment, Health & Safety (EH&S)

Being fully alive to its role as a responsible corporate citizen PTC has implemented a well structured EH&S programme in addition to embedding internationally recognized best practices. PTC is committed to ensure that it nurture an environment where its employees and surrounding communities are safe from any hazards that may affect their health and minimize the impact of its operation on biodiversity. PTC’s commitment to EH&S was further strengthened during 2006 as PTC achieved significant improvements on the EH&S road map. Both its production facilities were rectified with ISO 14001 earning the “Evergreen” status. PTC has consistently sustained


































Environment, Health & Safety (EH&S) Policy: It is PTC’s Policy to:



Provide and maintain a safe and healthy working environment including use of cleaner technologies and safe systems of work for all its employees and noncompany personnel on the company premises.



Pay due regard to all impact of its activities on the physical environment.



Comply with all applicable National laws and regulations and BAT policy pertaining to Environment Health and Safety.















































































































































































































ORGANIZATION STRUCTURE (DIRECTORS)




































ORGANIZATION STRUCTURE (AKF MOM Chart)
















































































































































































































































































































































































































































































































































































































































































































































































































































































































5.4.12 MANAGEMENT AND UNION AGREEMENT: The CBA and management sign agreement regarding the working conditions, wages, and other affairs likely. The validity of an agreement is 25 month after it a new is signed, the stepwise procedure is following: 1. Informal Character of Demand. 2. Formal Character of Demand. 3. By Lateral Recognition. 4. If fails conciliation. 5. If fails judicial process start with NIRC. (National Industrial Relation Commission), which is federal labor institution with powers equal to trial court or lower court of labor while the while the process is speedy and stead fast. 6. After conciliator another way is arbitrator who is usually a retire judge appointed by the Govt. 7. Finally agreement reached which is a 25 months agreement with a fact from expiry of previous agreements. Copies of agreement are sent to provincial and central labor departments.

5.4.13 RETIREMENT: There is a limit in individual life for doing a job. No individual can work throughout his life therefore every one. In PTC the age of compulsory retirement is 58 years for workers and managers, first extension is given at the age of fifty-five years, second at 56, third at 57, subjected to his performance and medical fitness. The retirement can also be on medical board examination/ recommendation basis. 5.4.14 VOLUNTARILY SEPARATION SCHEME (VSS):




























provident fund. The %age of salary to be paid to them depends upon the years remaining to his retirement. The percentage is as below: •

Up to 5 years 75%

•

to 8 years 40%

•

9 to 10 years 36%

•

11 to 15 years 25%

•

16 to 20 years 18%

•

1 to 25 years 15%

2

5.5 DEMOTIVATING FACTORS IN THE ORGANIZATIONS 

Boredom



Noise of machinery and smell of leaf



Excessive downsizing



Job insecurity




























CHAPTER – 6 FINANCE




























6.1 BRIEF ON THE DEPARTMENT WORKED

Mission: “To excel as a first choice value adding business partner.”

Product: Value adding finance services to our customers. To provide accurate, timely and relevant information for strategic decision-making.

For every business enterprise the management of the finance is considered to be the most important and demanding task. Because it depends on your budget what you ought to do and what ought not to do. But more important than this is the management of your finance. No matter how much money you have got if it is not managed properly, loss is inevitable. It is the function of the Finance department of a company to keep a close check on the inflow and outflow of the fund, to allocate the budgets properly, to maintain all the records and above all to keep itself clean. The Finance department of the Pakistan Tobacco Company has a very wide range of activities. A hard working and enthusiastic team is managing quite efficiently. The head of the Finance department is the Finance Manager. Under him is one Cost accountant, one leaf finance manager and seven BSO’s.

The major functions of this department are:

•

Performance measurement and reporting.

•

Excise management.

•

Funds management.

•

Strategic planning input.

•

Investment analysis.




























•

Risk management.

•

Internal audit.

•

Maintenance of financial records.

•

Fixed assts management.

The Finance department of the AKF has been divided into seven major sections

1.

Production expenses.

2.

Cash.

3.

Variable cost and Excise duty

4.

Ledger.

5.

The Leaf section.

6.

Fixed assets.

7.

Payroll

6.1.1 Production Expenses:

This section of the finance department deals with the recording of all the expenses that are related to the production. The expenses are recorded by the concerned person of the production expenses section and punched into the CS/3 system, which transfers the data directly into the general ledger. When these expenses are verified any rectification required takes place and posting into the trial balance is done. The production expenses are divided into three basic categories.

1.

The process related expenses

2.

Supporting expenses

3.

Other expenses






























6.1.2 Cash Section:

Cash is one of the important sections of finance department. It deals with all the incoming and outgoing cash in the AKF. Any kind of entry related to cash is punched into the CS/3 system, which makes a direct recording into the ledger account and then recorded in the trial balance. The inflow of cash in the AKF is basically done through three sources. It either arrives through the sales revenues, auctions or through selling. The sales revenue is generated through the sales department situated in Bahawalpur, Faisalabad and Peshawar. They transfer their reserves to the AKF. Other sources of cash include the auction. There are certain items that are either wasted to protect the rectification and ensure the security. These items are put to auction by the MMD and the cash is sent to the Finance department. Similarly some products that cannot be auctioned like dust, wastes of wrapping materials etc are sold to different parties. That amount is also sent to the cash section of Finance department. The Finance department makes payments of cash to the Leaf grower. This section also pays the different expense incurred by different people in the AKF. These expenses are called PETTY CASH. It is allowed to make payment up to five lacks. Amount greater than five lacks is paid through the head office.

6.1.3 Variable cost and excise duty:






























The excise rates per ten cigarettes are as follow:

1. If retail price of locally produced cigarettes exceed 13 Rupees per cigarettes. 63

%

of the retail price 2. If retail price of locally produced cigarettes exceed Rs 5.74 per 10 cigs but does not exceed Rs 13 per 10 cigs. Rs 2.45 per ten cigs plus 69 % per incremental Rupees or part thereof. 3. If retail price of locally produced cigarettes does not exceed Rs 5.74 per 10 cigs Rs Rs 2.45 per ten cigs

After that a summary of shipment is send to the finance department through AR-1 to inform that how many cigarettes are manufactured. AR-1 shows sales tax in addition to excise duty.

6.1.4 Ledger section:

The main function of this section is the closing of all accounts at the end of the month and the making of the trial balance. The activities and the information from all the departments are transferred to this section either through the CS/3 system or it is done manually. This information is then recorded and after verification it is entered into the trial balance, which is then, sent to the head office .






























1. The company cannot purchase less quantity of tobacco from a grower than that of the previous year.

2. If the Company has bought some tobacco from a grower and some of the tobacco of that grower is left un purchased, then the Company is bound to purchase the same percentage of remaining tobacco. Whether they need it or not. E.g. the Company buys 46 %. 10% of the grower’s tobacco is left un purchased. Now the Company is bound to purchase 46 % of that 10 %.

The tobacco purchased from different Depots is graded on the basis of its quality. Different grades of tobacco are

•

VFC

Virginia Flue Cured.

•

VAC

Virginia air Cured.

•

CAC

Country air Cured.

•

White Patta

•

Burley

The VFC, which is grown, is Mansehra is considered the best tobacco in Pakistan. After the tobacco is purchased its physical inspection takes place and it is brought to the GLT for processing the moisture level at this point of time is 13 to 14 %, which is brought down to 12 % in the GLT. In every 100 kilo gram of leaf, there is 70 kg of Lamina, 20 kg of stem, 2 to 3 kg of dust;






























The payment to the growers is done with in seven to thirty days of the purchase through the DPLV account. The special feature of this DPLV account is the credit allowed by the bank of about 20 million. This gives the Company the flexibility in making the payments. The payments of the other expenses of the godowns in depots are also paid through banks.

D) - The Process

The introduction of the Galaxy software has made the process of leaf (purchase and payment) quite simple. After the issuance of the agreement to the growers the crop of each grower is placed on the belts and six bale cards are issued to the grower. After the physical inspection is done, the rejected bales are returned to the grower while the accepted bales are moved further, where its price is shown on the big screen. If the grower rejects the price he takes his bales back, other wise they are moved further. But the grower least took their bails back. The computer then issues a voucher one copy of which is given to the grower and the other is send to the Pakistan Tobacco Board. It also issues form ‘A’. The copies of which are given to the AKF, Bank and the concerned depots respectively. The grower in order to get the payment takes the voucher to the bank that on the presentation of that voucher pays the amount to the grower and issues a token along with the form ‘B’ to the depot. This verifies the document and transfers them to AKF Finance department.

6.1.6 The Fixed Assets:






























6.1.7 Payroll section:

Payroll section is responsible for providing timely wages to workers and maintaining their records. Wages are paid at the last day of the month. Last two days of the month are very critical for the wage department. They have to prepare a statement, which will clarify the exact amount to be paid. This is done through the help of time office, which closes its whole monthly time cards. Summing up the wages to be paid to each one is then known and the wage department is sure that the required amount to be paid is assessed and so the amount to be draw from the bank is cleared. The amount drawn (which will actually be done at the e second last working day of the month) arrives at the office. The money is then placed in the envelops which are colored for the purpose of identification. The picks are filled in by the office staff and then actually distributed. Payroll includes the following documents

1. Payroll control and change summary. 2. Pay slips. 3. PF balance. 4. over time.

The different allowances given in the payroll section are as follows: •

House rent allowance: 100% of basic

•

Medical allowance: 7% of basic Smoking allowance: 100 rupees
































In almost all of the civilized countries of world there is the concept of Govt taxes, and where there is Govt there has to Govt levies or taxes are in different forms. Being a Pakistan we are than liable to pay certain taxes. Tax bracket of cigarette in Pakistan is in one of highest in the world. It pays the 2nd largest amount of money in government exchequer in form of different taxes. The main heads or main forms of taxes as follows.

1.

Central excise duty

2.

General sales tax

3.

Custom duty

4.

Employee old age benefit and social security.

Only to last one is not directly paid to the government. All Though Govt still gets its share from it. For payment of the each of the above-mentioned levies there is set pattern provided by the government to units of the factory. These patterns are to be strictly followed by the companies. If the company does not follow its one part it will be liable to the Govt fury, it is the form of penalties.
































with a bill of entry which is known as “In bound bill of entry” when they are cleared the BOE is turn in to “Ex Bound of Bill of Entry”.

At the receipt of the material the inbound bill of entry is sent to the finance department. The actual amount is in pound sterling ( ₤) which are converted in to rupees and above mention rates to each items on its assessable value. Despite a ban on advertisements promoting cigarettes, the number of cigarette users increased by over 18 percent last year, generating more money than the target fixed by the government. The cigarette industry has paid central excise duty (CED) of Rs 21.875 billion against the annual target of Rs 19.713 billion for the fiscal year 2004-2005.
































6.2 FINANCIAL STATEMENTS ANALYSIS

6.2.1 RATIO ANALYSIS

6.2.1.1 LIQUIDITY MEASURES:

Current Ratio: (current Assets / current liabilities)

2004

2005

2006

2007

1.0

1.1

1.1

1.0

There is slight decrease in the current ratio but this ratio is acceptable for the creditors because the standard ratio for any efficient firm is 1. Ratio figure has decreased because both current assets and the current liabilities have increased accordingly which has balanced out the ratio to the same level.
































Cash Ratio: (cash / current liabilities)

2004

2005

2006

2007

---

----

0.016

0.034

In 2007 the cash and bank balances of company is increased from 0.016 to 0.034 that shows that company has increased its liabilities through short term loans and financing ,where as the inventory in 2007 has been increased for the purpose of sales. Creditors are very much interested in cash ratio. The figure has increased but not so much, It has increased because cash and bank balance has increased but at the same time the current liabilities has also increased accordingly. Current liabilities have increased because trade and other payables has increased which means they purchased inventory on credit.

6.2.1.2 LONG TERM SOLVENCY MEASURES:
































dependent on shareholders. It shows that most of the firm’s financing is provided by debt not by shareholders.

Equity Multiplier: (1 + Debt-Equity Ratio)

2004

2005

2006

2007

1.5

1.3

1.3

1.3

It will be briefly discussed in Du Pont Analysis.

Interest Coverage Ratio :( : ( EBIT / Interest)

2004

2005

2006

2007

29.9

46.9

57.0

74.8


































The ratio in 2007 has increased a little from 6.7times to 7.2times. The increase in ratio is due to a decrease in inventory which has lowered the cost of goods sold. As this there is a slight increase in value, the firm has a good effect towards the liquidity.

Days sales in inventory : ( 365 / ITR)

2004

2005

2006

2007

60.83

59.83

57.47

50.69


































6.2.1.4 PROFITABILITY MEASURES:

Net profit Margin :( : ( Net income / Sales)*100

2004

2005

2006

2007

---

---

5.33

5.90

This ratio has also increased which shows that company is in favorable position.

Return on Assets :( : ( Net income / Total assets)


































6.2.1.5 MARKET RATIOS

Earning Per share :( : ( Net income / *Shares outstanding)

2004

2005

2006

2007

2.6

5.2

7.5

9.4

The earning on share is increased in 2007 from 7.5 to 9.4 because the net income is increased. This increased in earning on share has also in creased the return on common equity. The firm is earning Rs.9.4 on behalf of each share. This decrease in earning per share would positively affect the trust of the investors towards the firm and


































6.2.2 DU PONT ANALYSIS For 2006 NPM 5.33%

x

ROA 20.03

TAT 4.2

TA 8,734,400

x

/

FLM 2.02

C.S Equity 4,139,187

































Pakistan Tobacco Company 

Firstly the question is that why we why we use Du Pont system of Analysis, the answer is simple: Du Pont Analysis enables us to dissect the firm’s financial statements to assess its financial conditions.



It merge two financial system i.e. balance sheet and income statement into two summery measure of profitability ROA and ROE.



Analyzing the financial statement of Masood Textile Mill give us a sort image.



Now through Du Pont Analysis we would combine different ratios and would discuss its effects on ROA and ROE.



By going through financial of the firm we discovered that its ROE -increased by almost 8-10 points which is a good sign.



We see that in 2006 its ROA was lower than 2007 and low FLM which produced low




































6.2.3 COMMON SIZE ANALYSIS

COMPARATIVE BALANCE SHEET (2006, 2007)




































2007

2006




































COMPARATIVE PROFIT AND LOSS STATEMENT (2006, 2007)

2007

2006



































Pakistan Tobacco Company 

Common size analyses tell us how much percentage every item in balance sheet is of total assets and in income statement we take every element as percentage of sales. This gives us a picture of how much firm spends on each element last year and this year.




































6.2.4 INDEX ANALYSIS

BLANACE SHEET (2006, 2007)





































































































































































































































































































































































































































































































































































































































































































































Pakistan Tobacco Company internship report finance department

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