Liquidity & Leverage Ratio Analysis of Engro Fertilizer Limited, Fauji Fertilizer Company Limited And Fatima Fertilizer Company Limited for Year 2!2, 2!" and 2!#
A RE$%R '()*+E % -E E$AR*E. %F *A.A/E*E. 'C+E.CE', 0+R(AL (.+0ER'+Y %F $A1+'A. +. $AR+AL $AR+AL F(LF+LL*E. %F -E RE(+RE*E.' F%R -E E/REE %F *A'ER' +. )('+.E'' A*+.+'RA+%. A*+.+'RA+%.
'()*+E )Y .A*E3 A)(L RE-*A. '(E. +3 *C!!#!454
'u6mission ate3 278!!82!5 E$AR*E. E$AR*E. %F *A.A/E*E. 'C+E.CE' 0+R(AL (.+0ER'+Y %F $A1+'A.
Proposal for Project on (Liquidity & Leverage Ratio Analyses)- 1 -
Proposal for Project on (Liquidity & Leverage Ratio Analyses)- 2 -
A)LE %F C%.E.
1 Introduction 1!1 "opic #rief Introduction 1 ! 1 !1 $auji $ertili%er o'pany 1 ! 1 !2 ngro $ertili%er o'pany 1 ! 1 ! $ati'a $ertili%er o'pany 1!2 *escription 1! $inancial Period ,nder-onsideration for Analysis 1! .jectives 1!+ /ignificance 2 Project Proceedings 2! 1 Liquidity & Leverage Ratio Analysis 2!1!1 Liquidity Ratio 2!1!2 Leverage Ratio ! 1 ! 2 ! + 0 3 4
etodology *ata ollection /ources *ata ollection "ools *ata Processing "ools In Interpretations onclusion Re Reco''endation Introduction /tudent .i.liograpy
-+ + + + + + +-0 0 0 0 0 0-3 3 3 3 3 3
Proposal for Project on (Liquidity & Leverage Ratio Analyses)- -
!9 +ntr +ntro odu du:t :tio ion n !9!9 opi: opi: )rief +ntrodu:ti +ntrodu:tion3 on3 Ratio analysis is a tool to elp evaluate te overall financial condition of a .usiness! It is useful for preparing and analy%ing co'parison .et5een custo'er and oter .usinesses! "e creditors are i'ple'enting te decision to 'a6e ratio cart to point te potential of co'pany! "e liquidity ratio 'easure te co'pany a.ility to 'eet its o.ligation in sort ti'e period and 5ereas te leverage ratios 'easure te contri.ution of stoc6older and creditors! !9!9!9 !9!9!9 Fauji Fauji Fert Fertili ilize zerr Compa Company ny33 njoying te largest sare of fertili%er 'ar6et7 registered !3 per cent increa increase se in profit profit It also also declared declared second second interi interi' ' dividend dividend of 8 per cent 'a6ing te total payout ++ per per cent so far! far! "e 22!3 per cent increase increase in sales 'ay .e attri.uted to iger sales volu'e and per cent increase increase in in urea prices since 9anuary tis year! year! A 2: per cent increase in cost of goods sold decreased its gross 'argin! "e decline in operating 'argins igligts te relati relatively vely diffi difficul cultt operat operating ing environ' environ'ent ent for te co'pany co'pany!! "e 2 per cent decline decline in oter oter inco'e inco'e is due to enance enanced d lendin lending g to $$-9o $$-9orda rdan7 n7 te acquisitio acquisition n of P/$L and decline decline in its return return on deposits! deposits! "e 'ar6-up 'ar6-up costs of P/$L;s 'erger 'erger did not reflect reflect in alf yearly yearly results! results!
s >s fertili%e fertili%err industry industry!! It is traded traded on te stoc6 stoc6 'ar6et under te sy'.ol ?$R"! ?$R"! ngro olds a vast7 nation5ide production and 'ar6e 'ar6etin ting g infras infrastru tructu cture re and and produc produces es lead leading ing fert fertili ili%er %er .rands .rands opti'i opti'i%ed %ed for local local cultiv cultivati ation on needs needs and de'and de'and!! ngro ngro is also also a leadin leading g i'porter and seller of Pospate products7 5ic are 'ar6eted e=tensively across Pa6istan as pospatic fertili%ers! !9!9"9 !9!9"9 Fatim Fatima a Ferti Fertiliz lizer3 er3 "e $ati'a $ertili%er o'pany Li'ited 5as incorporated on *ece'.er 27 2887 as a joint venture venture .et5een .et5een t5o 'ajor .usiness .usiness groups in Pa6istan Pa6istan na'ely7 na'ely7 $ati'a $ati'a @roup and Arif Arif
Proposal for Project on (Liquidity & Leverage Ratio Analyses)- -
and aving igly possessive status in Pa6istan fertili%e 'ar6et! "e purpose oftis researc project is to 'a6e analysis of tese tree co'panies in respect of financial state'ent and liquidity and leverage ratios and co'parison of different collection of data>s! data>s! !9"9 Finan:ial Finan:ial $eriod (nder8Consideratio (nder8Consideration n for Analysis3 $28127 281 & 281 $inancial ear are to .e under consideration for analysis! !9#9 %6je %6je:ti :tives3 ves3
"e o.jectives o.jectives of tis study are to assess assess te perfor'anc perfor'ancee and co'parison co'parison of listed co'panies in regard financial situation and different ratios to .ring factual vie5 of organi%ation conditions! "e study and researc on topic 5ill .oost te 6no5ledge and 'a6e clarity7 o5 to pose te researc in 5riting style! !9#9!9 "o 'easure tat 5ic co'pany as a.ility and enoug cas to 'eet its sort and long ter' o.ligations & pay'ent of its de.ts! !9#929 "o e=a'ine tat 5ic te co'pany is 'ore profita.le and 5ic is loss! !9#9"9 "o o.serve te perfor'ance perfor'ance of co'panies and co'pare co'pare it 5it its listed years! !9#9#9 "o e=a'ine te financial position of all listed co'panies! !959 'ignifi:an:e3
"e researc 5ill .ring te facts a.out te a.ility and perfor'ance of listed organi%ation in vie5 of financial ratios analysis! "e study and researc 5ill .ring very i'portant infor'ation for sta6eolder and investor and revie5 te co'parison for teir future invest'ents purpose and for i'prove'ent of teir .usiness in ligt of tis study! "is study 5ill co'e 5it solution of different financial pro.le' and 5ill e=plore te 5ay of correctness! "e researc 5ill .e elpful for creditor and de.tor in deter'ining 5ic of te selected co'panies ave a good position for lending and .orro5ing funds! "e outco'es of te project sall .e disse'inated a'ong te sta6eolders! "e results of tis study sall sall .e provid provided ed so tat tat te resear researc c 5or6 5or6 contri contri.ut .utes es to te solution solutionss or develop'ents!
29
$roje:t $ro:eeding3
29!9 L+(++Y & LE0ERA/E LE0ERA/E RA+% RA+% A.ALY A.ALY'E' 'E'
Proposal for Project on (Liquidity & Leverage Ratio Analyses)- + -
Liquidity ratios 'easure a fir'>s fir'>s a.ility to 'eet its cu rrent o.ligations! "ese includeB urrent Ratio Acid "est Ratio /ales to Cor6ing Cor6ing apital Cor6ing capital
29!9 29!929 29 Leve Levera rage ge Rat Ratio ioss Leverage ratios 'easure te degree of protection of suppliers of long ter' funds! "i'e Interest arned *e.t Ratio *e.t D quity Ratio *e.t to "angi.le Eet 5ort Ratio urrent Cort D Eet 5ort Ratio "otal apitali%ation Ratio "otal Long ter' Assets versus Long ter' *e.t
"9 *et; *et;od odol olog ogy3 y3 "9!9 ata Colle:t Colle:tion ion 'our:es 'our:es33 *ata 5ill .e collected fro' secondary resources suc as variou variouss pu.lis pu.lised ed financ financial ial report reports7 s7 'aga%i 'aga%ines nes77 ne5spa ne5spaper perss and etc! etc! "e financial data of listed co'panies 5ill .e captured fro' teir online 5e.site resources!
$auji $ertili%er Li'itedB "e "e .elo5 .elo5 lin6 lin6 is cont contai aine ned d all all info infor' r'at atio ion n a.out a.out te te financial data of te organi%ation! ttpBDD555!ffc!co'!p6Dannual-report!asp=
Engro Fertilizer Limited3 "e "e .elo5 .elo5 lin6 lin6 is cont contai aine ned d all all info infor' r'at atio ion n a.out a.out te te financial data of te organi%ation! <""PBDDE@R$ <""PBDD E@R$R"ILIFR/! R"ILIFR/!D*CELA D*CELA*/D */D
Fatima Fertilizer Limited3 "e "e .elo5 .elo5 lin6 lin6 is cont contai aine ned d all all info infor' r'at atio ion n a.out a.out te te financial data of te organi%ation! ;ttp3==fatima8group9:om=ff:l=page9p;p=finan:ial8results8
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Proposal for Project on (Liquidity & Leverage Ratio Analyses)- 0 -
u se of .elo5 tools and "929 ate Colle:tion Colle:tion oo ools3 ls3 "e data sall .e collected 5it use tecniques to fulfill te require'ents of project!
+nternet=Arti:les *agazines )oo>s
"9"9 ata $ro:essing $ro:essing oo ools3 ls3 *ata sall .e processed and analyse in follo5ing tools and soft5ares / Cord =cel and for'ulas #9 +nte +nterp rpre reta tati tion on33 59 Con:l n:lusio sion3 49 Re:o Re:omm mmen enda dati tion ons3 s3
?9 +ntro +ntrodu du:ti :tion on of of t; t;ee stude student3 nt3 Last *egree o.tained #!o' 2811 Al%a'il etal Cor6 Cor6 $actoryDA.dulla sta.lis'ent! Assistant of Account years
@9 )i6l )i6lio iogr grap ap;y ;y33 "e .elo5 lin6s are used for references!
Annual Report Report ! (n!d!)! Retrieved fro' $auji $ertili%er o'pany Li'itedB ttpBDD555!ffc!co'!p6Dannual-report!asp= Annual Report Report ! (n!d!)! Retrieved fro' ngro ngro $ertili%er $ertili%er o'pany Li'itedB <""PBDDE@R$R"ILIFR/!D*CELA*/D Annual Report Report ! (n!d!)! Retrieved fro' $ati'a $ati'a $ertili%er $ertili%er o'pany Li'itedB ;ttp3==fatima8group9:om=ff:l=page9p;p=finan:ial8results8ff:l /@ =pert9 (n!d!)! /@ "ea' Retrieved fro' ;ttp3==<<<9managementstudyguide9:om=liquidity8ratios9;tm
Proposal for Project on (Liquidity & Leverage Ratio Analyses)- 3 -
