Common Size Analysis for

the year 2006-07

Analysis of Financial Statements
[Type the author name]

The report contains the consolidated financial statements of Fauji Fertilizer

Company for the year 2006 and 2007 and its common size analysis along with the
write up justifying the increase/decrease in the various accounts of the company
in the year 2006 and 2007.

The change in the depreciation method has caused a 26% increase in

the deferred taxation moreover the measurement of investments
available for sale has also plummet these figures to as high as 26%.
The trade and other payables figure has taken a drastic jump of 30%
from last year this is mainly due to the increase in advances from
customers from Rs. 841,746 to Rs. 2,519,292.
The interest and mark up figures have inflated by 29% this is largely
due to the increase in the amount of interest on the long term loans
from Rs. 80,827 to Rs. 158,713.
The company also shows a 10% increase in its current portion of the
long term financing this is mainly due to the increase in loans from the
banking companies.
Overall the company has increased its current liabilities up to 11%
from last year generally due to the reasons stated above.
On the assets side the companys balance sheet shows a 9% increase
in its plant property and equipment section mainly due to the various
additions in the year 2007.
The long term loans and advances figures have increased by 86%
largely due to an increase in loans given to the employees.
The stores spares and loose tools figures have increased by 23%
mainly due to the large number of spares purchased during the year
2007.
The stock in trade figure has depleted by 30% mainly due to the
decrease in the finished goods in the year 2007.
Due to a large increase in the trade debts on the secured goods the
trade debt figures have rocketed by 65% in the year 2007.
The company has tightened its cash management in the year 2007 due
to which its short term investments have sky rocketed by 135% and its
cash has seen a slump of 42% in the year 2007.
On the income statement side the company has seen a drop of 9% and
15% in its sales and cost of goods sold respectively in the year 2007
largely due to the decrease in the demand of fertilizer in the country.
The company has strived towards better management of its
administrative expenses and has decreased them by 15% in the year
2007. The major chunk of these expenses was saved from product
transportation.
However the companys finance cost and other expenses have seen an
incline of 45% and 21% respectively in the year 2007. The finance cost
has increased mainly due to an increase in the figures of mark up on
short term borrowings whereas the other expenses have increased due
to an increase in the workers welfare fun, workers profit participation
fun and loss on sale of fixed assets.

Overall the company has done well in managing its resources by

showing an increase of 5.5% in its net profit even though its sales has
decreased in the year 2007.