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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

DEDICATION:

I would like to thank our professor,

Mr. MUHAMMAD ADIL:

Who was always there to help and guide me when I needed help.
His perceptive criticism kept me working to make this project more
full proof. I thank full to him for his encouraging and valuable
support. Working under him was an extremely knowledgeable and
enriching experience for me. I very thankful to him for all the value
addition and enhancement done to me.
No word can adequately express my overriding debts of gratitude
to my parents whose support me in all the way.
Above all I shall thank my friends who constantly encouraged and
blessed m so as to enable me to do this work successfully.

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

ACKNOWLEDGEMENT:

To him belong the dimension of the


heavens and the earth, it is he who
gives life and death and he has power
over all things.

(Al-Quran)

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Executive summary:

For the purpose of my Financial Statement Analysis project,


I chose Atlas Battery. The purpose of this project and the whole analysis is to look at the
direction of the progress Of the company by comparing and compiling its past five years
data. The project starts off by Looking at the basic statements of the company such as Profit
and Loss Accounts, Balance Sheets and Cash Flow Statements. Later on in the project, some
important ratios such as cash flow ratios, liquidity ratios, solvency ratios, returns on capital
ratios and profit ratios will be used to get a more detailed insight of the operations of the
company. In the end the report will discuss the decisions that should be taken by banker as
well as an investor by keeping in mind the performance of the company for the last five
years. Two important facts should be kept in mind regarding the performance of the
company for the last five years. Firstly, Pakistan has been facing energy crisis and due to that
there has been tremendous increase in the demand of UPS and batteries that power these
UPS. Secondly, the number of vehicles on the road has also increased partly due to imports
from Japan and China and partly due to the general needs of the people. This increase in
demand for vehicles has increased the demand for its complimentary goods which includes
batteries as well.

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Vision:

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Mission And Core values;

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

COMPANY PROFILE

Atlas Battery Limited (the Company) was incorporated as a public limited company on
October19, 1966 and its shares are quoted on Karachi, Lahore and Islamabad Stock
Exchanges. The Companies engaged in manufacturing and sale of auto motive and
motorcycle batteries .The registered office and manufacturing facilities are located atD181, Central Avenue, S.I.T.E., Karachi.

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Financial highlights:
2015

2014

2013

2012

Sales

15,961,413

12,242,719

8,875,114

7,217,116

5,868,260

Gross Profit

2,377,705

1,621,558

1,315,488

1,167,682

860,839

Operating Profit

1,627,386

1,148,793

884,014

759,545

562,616

Profit before Tax

1,480,711

1,022,768

824,068

689,649

525,101

Profit after Tax

1,013,924

741,150

582,886

486,014

354,502

Earnings Per Share - Basic & Diluted


(Rupees)
Shareholders' Equity

58.27

42.60

33.50

33.52

29.34

3,220,775

2,384,566 1,789,742

1,326,938

1,242,919

1,127,859

Property, Plant & Equipment - Net of 1,994,955


Revaluation Reserve

982,068

2011

954745
900503

Business Growth
Rs in millions

sales revenue
20,000,000
15,000,000
10,000,000
5,000,000
0
2015

2014

2013

2012

2011

sales revenue

gross profit
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2015

2014

2013

2012

gross profit

15

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

2011

Operating Profit
2,000,000
1,500,000
1,000,000
500,000
0
2015

2014

2013

2012

2011

gross profit

Profit before Tax


2,000,000
1,500,000
1,000,000
500,000
0
2015

2014

2013

2012

2011

2012

2011

Profit before Tax

Profit after Tax


1,500,000
1,000,000
500,000
0
2015

2014

2013
Profit after Tax

Earnings Per Share


80
60
40
20
0
2015

2014

2013

2012

Earnings Per Share

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

2011

Six Years at Glance

YEARS

2015

2014

2013

2012

2011

2010

14.9
9.4
6.5
44.2

13.2
8.4
6.1
41.5

14.8
9.3
6.6
41.0

16.2
9.5
6.7
44.9

14.7
9.0
6.1
44.4

14.7
8.5
5.5
37.3

1,788.7
11.2
137.2

1,281.3
10.5
78.9

993.0
11.2
71.4

856.0
11.9
152.3

636.7
10.8
121.8

415.3
10.3
51.4

(%)
(%)
(%)
(Rs.)
(Rs.)
(Times)
(Rs.)
(High-Rs.)
(Low-Rs.)

46.0
29.7
18.8
58.27
58.27
12.1
703.5
965.0
441.0

42.9
29.0
13.9
42.60
42.60
10.6
450.0
479.0
288.0

46.0
29.7
16.0
40.15
33.50
8.4
338.0
355.0
200.0

51.5
32.1
18.5
40.22
33.52
5.0
201.7
241.5
160.0

55.0
31.4
17.0
35.21
29.34
6.2
217.0
235.9
131.0

49.9
25.9
14.7
26.52
22.10
6.8
181.0
237.0
138.0

(Rs.)

185.2

137.1

123.4

110.9

94.8

81.5

(Rs.)

196.4

147.1

135.4

125.3

112.1

102.3

(%)
(%)
(%)
(Times)
(%)
(%)
(%)
(Times)
(%)
(%)

120.0
1.7
4.9
20.6
79.4
1.7
4.9
20.6
79.4

100.0
2.2
4.3
23.5
76.5
2.2
4.3
23.5
76.5

100.0
20.0
3.6
3.3
29.9
70.1
3.0
4.0
24.9
75.1

100.0
20.0
5.9
3.4
29.8
70.2
5.0
4.0
24.9
75.1

100.0
20.0
5.5
2.9
34.1
65.9
4.6
3.5
28.4
71.6

100.0
20.0
6.6
2.2
45.2
54.8
5.5
2.7
37.7
62.3

(Times)
(Times)
(Times)
(Times)
(Times)
(Times)

3.0
9.3
6.2
116.5
14.2
4.9

2.3
9.5
5.1
110.1
12.0
5.0

2.4
7.8
6.3
92.3
11.0
4.6

2.7
7.1
7.5
71.5
13.6
4.9

2.8
7.1
7.7
61.8
13.5
5.2

2.7
5.8
6.8
42.6
9.8
4.6

Profitability Ratios
Gross profit
(%)
Profit before tax
(%)
Profit after tax
(%)
Return on capital employed
(%)
Earnings before interest, tax, depreciation
&amortization(EBITDA)
(Rs. In millions)
EBITDA Margin
(%)
Operating leverage
(%)
Return to Shareholders
Return on equity-before tax
Return on equity-after tax
Return on assets
Earnings per share(basic)
Earnings per share(diluted)
Price earning ratio
Market price-at yearend
Market price-during the period
Market price-during the period
Break-up value per share without
Surplus on revaluation
Break-up value per share with
Surplus on revaluation
Dividend
Cash dividend
Stock dividend
Dividend yield
Dividend cover
Dividend payout
Plough back ratio
Dividend yield(Cash)
Dividend cover(Cash)
Dividend payout(Cash)
Plough back ratio(Cash)
Asset Utilization
Total assets turnover
Fixed assets turnover
Inventory turnover
Trade debts turnover
Trade creditors turnover
Capital employed turnover
Operating Cycle
Inventory holding period
Trade debts collection period
Trade creditors payment period
Operating cycle

(No. of Days)
(No. of Days)
(No. of Days)
(No. of Days)

59
3
(26)
36

72
3
(30)
45

58
4
(33)
29

48
5
(27)
26

47
6
(27)
26

53
9
(37)
25

(Times)
(Times)
(Times)
(%)
(Times)
(Times)
(Times)

2.0
1.0
0.0
11.9
0.2
0.6
11.1

1.5
0.5
0.0
(3.9)
0.7
1.2
9.1

1.7
0.6
0.0
2.9
0.3
0.9
14.8

1.6
0.7
0.1
8.4
0.3
0.8
10.9

1.4
0.5
0.1
4.8
0.5
1.0
15.0

1.4
0.4
0.1
4.7
0.3
1.0
18.2

Liquidity/Leverage
Current ratio
Quick ratio
Cash to current liabilities
Cash flow from operations to sales
Financial leverage ratio
Total liabilities to equity
Interest coverage ratio

17

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

COMPANY FINANCIAL STATEMENT


Income statement
Atlas Battery
FOR THE YEAR ENDED JUNE 30,

2015

2014

2013

12,242,719

8,875,114

Cost of sales

15,961,413
13,583,708

-10,621,161

-7,559,626

Gross profit

2,377,705

1,621,558

1,315,488

1,167,682

860,839

Distribution cost

-449,347

-292,373

-235,264

-186,367

-165,053

Administrative expenses

-246,501

-189,754

-190,538

-151,495

-99,679

91,526

109,221

86,309

37,035

12,265

-145,997

-99,859

-91,981

-107,310

-45,756

1,627,386

1,148,793

884,014

759,545

562,616

-146,675

-126,025

-59,946

-69,896

-37,515

1,480,711

1,022,768

824,068

689,649

525,101

-466,787

-281,618

-241,182

-203,635

-170,599

1,013,924

741,150

582,886

486,014

354,502

-5,466

-1,982

1,137

1,749

654

-387

-3,717

-1,328

750

-1,010,207

739,822

583,636

486,014

354,502

33.52

29.34

Sales

Other income
Other expenses
Profit from operations
Finance cost
Profit before taxation
Taxation
Profit for the year

Other comprehensive income


Items that will not be reclassified
to profit or loss
Re-measurement of staff
retirement benefit obligations
Impact of deferred tax
Other comprehensive loss for
the year
Total comprehensive income
for the year

2012

2011

7,217,116 5,868,260
-6,049,434 5,007,421

Rupees
Earnings per share - basic and
diluted

18

58.27

42.6

33.5

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Horizontal analysis of income statement:

(in Percentage)

Atlas Battery
FOR THE YEAR ENDED JUNE 30

2015

2014

2013

2012

272.00% 208.63% 151.24% 122.99%

Sales

2011
100%

Cost of sales

-231.48

-180.99

-128.82

-103.09

100

Gross profit

40.52

27.63

22.42

19.90

100

Distribution cost

-7.66

-4.98

-4.01

-3.18

100

Administrative expenses

-4.20

-3.23

-3.25

-2.58

100

1.56

1.86

1.47

0.63

100

Other expenses

-2.49

-1.70

-1.57

-1.83

100

Profit from operations

27.73

19.58

15.06

12.94

100

Finance cost

-2.50

-2.15

-1.02

-1.19

100

Profit before taxation

25.23

17.43

14.04

11.75

100

Taxation

-7.95

-4.80

-4.11

-3.47

100

Profit for the year

17.28

12.63

9.93

8.28

100

-0.09

-0.03

0.02

0.00

0.03

0.01

-0.01

0.00

-0.06

-0.02

0.01

0.00

-17.21

12.61

9.95

8.28

100

0.00

0.00

0.00

0.00

100

Other income

Other comprehensive income


Items that will not be reclassified to profit
Re-measurement of staff retirement benefit
Impact of deferred tax
Other comprehensive loss for the year
Total comprehensive income for the year

Earnings per share - basic and diluted

19

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Vertical analysis of income statement:

(in Percentage)

Atlas Battery
FOR THE YEAR ENDED JUNE 30

2015

2014

2013

2012

2011

100

100

100

100

100

Cost of sales

-85.10

-86.75

-85.18

-83.82

-85.33

Gross profit

14.90

13.25

14.82

16.18

14.67

Distribution cost

-2.82

-2.39

-2.65

-2.58

-2.81

Administrative expenses

-1.54

-1.55

-2.15

-2.10

-1.70

0.57

0.89

0.97

0.51

0.21

Other expenses

-0.91

-0.82

-1.04

-1.49

-0.78

Profit from operations

10.20

9.38

9.96

10.52

9.59

Finance cost

-0.92

-1.03

-0.68

-0.97

-0.64

9.28

8.35

9.29

9.56

8.95

-2.92

-2.30

-2.72

-2.82

-2.91

6.35

6.05

6.57

6.73

6.04

-0.03

-0.02

0.01

0.00

0.00

0.01

0.01

0.00

0.00

0.00

Other comprehensive loss for the year

-0.02

-0.01

0.01

0.00

0.00

Total comprehensive income for the year

-6.33

6.04

6.58

6.73

6.04

0.00

0.00

0.00

0.00

0.00

Sales

Other income

Profit before taxation


Taxation
Profit for the year
Other comprehensive income
Items that will not be reclassified to profit or loss
Re-measurement of staff retirement benefit obligations
Impact of deferred tax

Earnings per share - basic and diluted

20

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Balance sheet :
Rupees in ,, (000)
Atlas Battery
FOR THE YEAR ENDED JUNE 30

2015

2014

2013

2012

2011

Assets;
Non-current assets;
Property, plant and equipment
Intangible assets

1,994,955

1,416,705 1,155,854 1,127,859

900503

10,743

1,117

1,736

6129

1,103

1,227

10,555

6,832

517

13,777

13,916

657

719

605

1,432,965 1,168,802 1,135,410

907754

Investments
Long term loans
Long term deposits
Total non current assts

2,020,578

Current assets;
Stores, spares and loose tools
Stock-in-trade
Trade debts

110,788
1,608,783

88,665

57,818

43,594

30933

2,551,256 1,477,258

811,490

717004

131,810

142,345

79,987

112,423

89625

Loans and advances

27,727

25,875

3,497

2,682

2884

Deposits and prepayments

11,361

6,416

6,446

5,138

4847

918,737

824,925

711,544

436,291

204863

8,913

11,398

4,121

7,023

2317

Taxation - net

481,100

237,060

94,615

29,481

26488

Bank balances

78,318

6,089

33,055

48,191

93,952
1172913

Investments
Other receivables

Total current assets

3,377,537

3,894,029 2,468,341 1,496,313

Total assets

5,398,115

5,326,994 3,637,143 2,631,723 2,080,667

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Balance sheet :
2015

2014

2013

2012

2011

EQUITY AND LIABILITIES;


Share Capital and Reserves;
Authorized capital
50,000,000 (2014: 50,000,000)
ordinary shares of Rs.10 each

500,000

500,000

500,000

500,000

500,000

Issued, subscribed and paid-up capital

173,998

173,998

144,998

120,832

100693

General reserve

2,027,500 1,477,500 1,067,500

727,500

497500

Unappropriated profit

1,019,277

478,606

356,552

Total equity

3,220,775 2,384,566 1,789,742 1,326,938

954745

Surplus on revaluation of leasehold


land;

733,068

577,244

193,886

173,786

173,786

173,786

173786

60,226

49,741

45,825

40,928

35,411

Deferred taxation

208,181

161,015

146,945

131,123

103,000

total

268,407

210,756

192,770

172,051

138,411

910,253

860,347

799,556

514,863

356874

86,647

55,319

53,488

21,066

3908

Liabilities;
Non-current liabilities
Staff retirement benefits

Current liabilities;
Trade and other payables
Sales tax payable - net
special exice duty
Accrued mark-up

13023
19,729

11,110

7,810

5222

709,763 1,622,491

616,691

415,209

434,698

Total current liability

1,715,047 2,557,886 1,480,845

958,948

813725

Total liabilities

1,983,454 2,768,642 1,673,615 1,130,999

952136

Total equity and liabilities

5,398,115 5,326,994 3,637,143 2,631,723 2,080,667

Short term borrowings

22

8,384

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Horizontal analysis of Balance sheet:

(in percentage)

Atlas Battery
FOR THE YEAR ENDED JUNE 30

2015

2014

2013

2012

2011

Assets;
Non-current assets;
Property, plant and equipment

221.54

157.32

128.36

125.25

100

Intangible assets

175.28

18.22

28.32

0.00

100

213.35

237.33

2041.59 1321.47

100

2277.19

2300.17

108.60

118.84

100

222.59

157.86

128.76

125.08

100

Stores, spares and loose tools

358.15

286.64

186.91

140.93

100

Stock-in-trade

224.38

355.82

206.03

113.18

100

Trade debts

147.07

158.82

89.25

125.44

100

Loans and advances

961.41

897.19

121.26

93.00

100

Deposits and prepayments

234.39

132.37

132.99

106.00

100

Investments

448.46

402.67

347.33

212.97

100

Other receivables

384.68

491.93

177.86

303.11

100

Taxation - net

1816.29

894.97

357.20

111.30

100

Bank balances

83.36

6.48

35.18

51.29

100

Total current assets

287.96

332.00

210.45

127.57

100

Total assets

259.44

256.02

174.81

126.48

100

Investments
Long term loans
Long term deposits
Total
Current assets;

23

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Horizontal analysis of Balance sheet:

(in percentage)

Atlas Battery
FOR THE YEAR ENDED JUNE 30

2015

2014

2013

2012

2011

EQUITY AND LIABILITIES;


Share Capital and Reserves;
Authorized capital
50,000,000 (2014: 50,000,000) ordinary shares of Rs.10
each

100.00

100.00

100.00

100.00

100

Issued, subscribed and paid-up capital

172.80

172.80

144.00

120.00

100

General reserve

407.54

296.98

214.57

146.23

100

Unappropriated profit

285.87

205.60

161.90

134.23

100

Total equity

337.34

249.76

187.46

138.98

100

Surplus on revaluation of leasehold land;

111.57

100.00

100.00

100.00

100

Staff retirement benefits

170.08

140.47

129.41

115.58

100

Deferred taxation

202.12

156.33

142.67

127.30

100

Total

193.92

152.27

139.27

124.30

100

255.06

241.08

224.04

144.27

100

2217.17 1415.53 1368.68

539.05

100

Liabilities;
Non-current liabilities

Current liabilities;
Trade and other payables
Sales tax payable - net
special exice duty

100

Accrued mark-up

160.55

377.81

212.75

149.56

100

Short term borrowings

163.28

373.25

141.87

95.52

100

Total

210.76

314.34

181.98

117.85

100

Total liabilities

208.32

290.78

175.77

118.79

100

Total equity and liabilities

259.44

256.02

174.81

126.48

100

24

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Vertical analysis of balance sheet:

(in percentage)

Atlas Battery
FOR THE YEAR ENDED JUNE 30

2015

2014

2013

2012

2011

Assets;
Non-current assets;
Property, plant and equipment

36.96

26.59

31.78

42.86

43.28

Intangible assets

0.20

0.02

0.05

0.00

0.29

Investments

0.00

0.00

0.00

0.00

0.00

Long term loans

0.02

0.02

0.29

0.26

0.02

Long term deposits

0.26

0.26

0.02

0.03

0.03

37.43

26.90

32.14

43.14

43.63

2.05

1.66

1.59

1.66

1.49

29.80

47.89

40.62

30.83

34.46

Trade debts

2.44

2.67

2.20

4.27

4.31

Loans and advances

0.51

0.49

0.10

0.10

0.14

Deposits and prepayments

0.21

0.12

0.18

0.20

0.23

17.02

15.49

19.56

16.58

9.85

Other receivables

0.17

0.21

0.11

0.27

0.11

Taxation - net

8.91

4.45

2.60

1.12

1.27

Bank balances

1.45

0.11

0.91

1.83

4.52

62.57

73.10

67.86

56.86

56.37

100

100

100

100

100

Current assets;
Stores, spares and loose tools
Stock-in-trade

Investments

Total assets

25

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Vertical analysis of balance sheet:

(in percentage)

Atlas Battery
FOR THE YEAR ENDED JUNE 30

2015

2014

2013

2012

2011

EQUITY AND LIABILITIES;


Share Capital and Reserves;
Authorized capital
50,000,000 (2014: 50,000,000) ordinary shares of
Rs.10 each
Issued, subscribed and paid-up capital

3.22

3.27

3.99

4.59

4.84

General reserve

37.56

27.74

29.35

27.64

23.91

Inappropriate profit

18.88

13.76

15.87

18.19

17.14

Total equity

59.66

44.76

49.21

50.42

45.89

3.59

3.26

4.78

6.60

8.35

Staff retirement benefits

1.12

0.93

1.26

1.56

1.70

Deferred taxation

3.86

3.02

4.04

4.98

4.95

4.97

3.96

5.30

6.54

6.65

16.86

16.15

21.98

19.56

17.15

Sales tax payable - net

1.61

1.04

1.47

0.80

0.19

special exice duty

0.00

0.00

0.00

0.00

0.63

Accrued mark-up

0.16

0.37

0.31

0.30

0.25

13.15

30.46

16.96

15.78

20.89

31.77

48.02

40.71

36.44

39.11

36.74

51.97

46.01

42.98

45.76

100.00

100.00

100.00

100.00

Surplus on revaluation of leasehold land;


Liabilities;
Non-current liabilities

Current liabilities;
Trade and other payables

Short term borrowings

Total liabilities
Total equity and liabilities

26

100.00

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

CASH FLOW STATEMENT


Cash flows from operating activities;
Profit before taxation
Adjustments for non-cash charges and other items:
Depreciation of operating fixed assets
Amortization of intangible assets
Provision for gratuity
Provision for compensated leave absences
Gain on sale of investments
Dividend income
Net change in fair value of investments at fair value through profit or loss
Gain on sale of operating fixed assets
Provision for doubtful debts
finance cost
Changes in working capital:
Increase) / decrease in current assets
Stores, spares and loose tools
Stock-in-trade
Trade debts
Loans and advances
Deposits and prepayments
Other receivables
sales tax net
Increase in current liabilities
Trade and other payables
Sales tax payable net
special exice duty payable net

Cash generated from operations


Finance cost paid
intrest receive
Income taxes paid (including tax deducted at source)
Gratuity paid
Compensated leave absences paid
Long term deposits - net
Long term loans net
Net cash generated from / (used in) operating activities - carried forward
Net cash generated from / (used in) operating activities - brought forward
Cash flows from investing activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchases of intangible assets
sale proceeds from disposable intangibale assets
Investments acquired
Proceeds from sale of investments
Dividend received
Net cash used in investing activities
Cash flows from financing activities
Short term borrowings - net
Dividend paid
Net cash (used in) / generated from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents - at beginning of year
Cash and cash equivalents - at end of year

27

2015
1,480,711

2014
1,022,768

2013
824,068

2012
689,649

2011
525,101

159,221
2,094
7,241
13,759
-45,197
-1,876
-32,764
-335
797
146,675
1,730,326

130,343
2,269
6,197
4,981
-3,781

90,380
6,129
8,420
13,777
-8,235

67,972
6,130
8,144
6,612
-125

-78,657
-5,443
624
126,025
1,205,326

107,879
1,152
-68,821
-5,590
59,946
13,026
13,026
1,512
6,544
7,306
947,022

24,206
5,975

-6,379
-2,488

69896
862,975

37515
642,482

-22,123
942,473
9,738
-1,852
-4,945
2,485

-30,847
-1,073,998
-62,982
-22,378
30
-7,277

-14,224
-665,768
30,924
-815
-1,308
2,902

12,661
-94,486
-22798
202
291
4706

925,776

-1,197,452

-648,289

-134,740

-8,520
-185407
10,771
-534
1,081
-2,317
34958
-149,968

60,300
31,328

56,269
1,831

284,518
32,422

91,628
1,017,404
2,747,730
-158,020

58,100
-1,139,352
65,974
-117,406

316,940
-331,349
615,673
-56,646

135,795
17,158
-13023
139930
5190
868,165
-67,308

-661,912
-26,190
-3,358
139
124
1,898,513
1,898,513

-409,339
-7,592
-1,195
-3,361
-570
-473,489
-473,489

-290,881
-8,299
-2,495
-3,723
62
253,691
253,691

-171,742
-8,024
-7,887
-6315
-114
606775
606775

9067
-2023
-151991
490,491
-33,538
195
-168,309
-6,015
-1,613
0
-335
280876
280,876

-735,138
18,102
-11,720

-400,640
14,889
-1,650

-243,953
95,053
-2,888

-1,599,925
1,584,074
1,876
-742,731

-127,500
96,557

-380,842
180,000

-346,032
11,131
0
0
-410000
211,013

-217,946
8,298
-13,196
937
-192,459
-20,324

-418,344

-352,630

-533,888

-394042

-912,728
-170,825
-1,083,553
72,229
6,089
78,318

1,005,800
-140,933
864,867
-26,966
33,055
6,089

201,482
-117,679
83,803
-15,136
48,191
33,055

-19,489
-99159
-118648
-45,761
93952
48191

260,100
-82,851
177249
64,083
29869
93952

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

-11090

STATEMENT CHANGE IN EQUITY

28

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

RATIO
ANALYSIS
29

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

RATIO ANALYSIS
The term ratio analysis refers to the analysis of the financial statements in conjunction with the
interpretations of financial results of a particular period of operations, derived with the help of 'ratio'.
Ratio analysis is used to determine the financial soundness of a business concern.
Definition
Ratio analysis is the process of determining and interpreting numerical relationships based on financial
statements. A ratio is a statistical yardstick that provides a measure of the relationship between two
variables or figures. This relationship can be expressed as a percent or as a quotient.

Objectives of ratio analysis


These ratios have following objectives:

(1) Measuring the profitability: Profitability is the profit earning capacity of the business. This can be
measured by Gross Profit, Net Profit, Expenses and Other Ratios. If these ratios fall we can take corrective
measures.
(2) Determining operational efficiency: Operational efficiency of the business can be determined by
calculating operating / activity ratios.
(3) Measuring financial position: Short-term and long-term financial position of the business can be
measured by calculating liquidity and solvency ratios. In case of unhealthy short or long-term position,
corrective measures can be taken.
(4) Facilitating comparative analysis: Present performance can be compared with past performance to
discover the plus and minus points. Comparison with the performance of other competitive firms can also
be made.
(5) Indicating overall efficiency: Profit and Loss Account shows the amount of net profit and Balance
Sheet shows the amount of various assets, liabilities and capital. But the profitability can be known by
calculating the financial ratios.
(6) Budgeting and forecasting: Ratio analysis is of much help in financial forecasting and planning.
Ratios calculated for a number of years work as a guide for the future. Meaningful conclusions can be
drawn for future from these ratios.

30

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

SHORT TERM SOLVENCY OR LIQUIDITY RATIOS


Short-term Solvency Ratios attempt to measure the ability of a firm to meet its short-term financial
obligations. In other words, these ratios seek to determine the ability of a firm to avoid financial distress in
the short-run. The two most important Short-term Solvency Ratios are the Current Ratio and the Quick
Ratio. (Note: the Quick Ratio is also known as the Acid-Test Ratio.)

Working capital
Working capital is the capital of a business which is used in its day-to-day trading operations, calculated
as the current assets minus the current liabilities.
Formula
Current Assets Current Liabilities
Data
2015

2014

2013

2012

2011
1172913

Current asset

3,377,537

3,894,029 2,468,341 1,496,313

Current liability

1,715,047

2,557,886 1,480,845

958,948

813725

working capital

1,662,490

1,336,143

987,496

537,365

359188

Graph:

2000000

1,662,490
1,336,143

1500000
987,496
1000000
500000

537,365
359188

0
2011

2012

2013

2014

2015

Working capital

Interpretation
The working capital of this company is 359188 in 2011.an it increased 537365 in 2012 and also increased
in 2013, 2014 and in 2015 working capital is increased 1662490 which is satisfactory for this company.

31

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Current ratio
The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term
obligations. To gauge this ability, the current ratio considers the current total assets of a company (both
liquid and illiquid) relative to that company's current total liabilities.
Formula
Current Assets Current Liability
Data
2015

2014

2013

2012

2011

Current asset

3,377,537

3,894,029

2,468,341

1,496,313

1172913

Current liability

1,715,047

2,557,886

1,480,845

958,948

813725

1.97

1.52

1.67

1.56

1.44

Current Ratio
Graph:

1.97
2
1.8
1.6

1.67

1.56

1.44

1.52

1.4
1

1.2

1
0.8
0.6
0.4
0.2
0
2011

2012

2013
current assets

2014

2015

Current liability

Interpretation
The standard norm for current ratio is 1:1. During the year 2011 the current ratio is 1.44 and During the
year 2012 the ratio is increased to 1.56 and it has increased to 1.67 during the y ear 2013 and decreased to
1.52 in 2014 and it is increased to 1.97 in the year 2014-15. The ratio above was standard except in the
year 2011. So the ratio was satisfactory.

32

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Acid test/quick ratio/liquid ratio


The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a company to pay
its current liabilities when they come due with only quick assets. Quick assets are current assets that can
be converted to cash within 90 days or in the short-term.
Formula
Quick assets or liquid assets Current Liability
Quick assets or liquid assets = Current assets stock prepaid expenses
Data

Current asset
Current liability

2015
2014
2013
2012
3,377,537 3,894,029 2,468,341 1,496,313
958,948
1,715,047 2,557,886 1,480,845

Inventories

1,608,783 2,551,256 1,477,258

811,490

717004

Prepaid expenses
Liquid assets
Acid Test Ratio

2011
1172913
813725

481,100

237,060

94,615

29,481

26488

1,287,654

1,105,713

896,468

655,342

429,421

0.75

0.43

0.61

0.68

0.53

Graph
1

1
0.68

0.8
0.53

0.6

0.75
0.61
0.43

0.4
0.2
0
2011

2012

2013
assets

2014

2015

liability

Interpretation
The standard norm for quick ratio is 1:1. During the year 2011 the current ratio is 0.53 and During the
year 2012 the ratio is increased to 0.68 and it has decreased to 0.61 during the y ear 2013 and decreased to
0.43 in 2014 and it is increased to 0.75 in the year 2014-15. The ratio below the standard in all the year.
So the ratio was not satisfactory.

33

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Cash Ratio
The cash ratio is the ratio of a company's total cash and cash equivalents to its current liabilities. The cash
ratio is most commonly used as a measure of company liquidity.
Formula
Cash and cash equivalent Current liability
Data
2013

2012

2011

1,715,047 2,557,886 1,480,845

958,948

813725

2015
Current liability
Cash and cash equivalents
Cash Ratio

2014

78,318

6,089

33,055

48191

93952

0.05

0.00

0.02

0.05

0.12

Graph
1

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2

0.12
0.05

0.1

0.02

0.05

0
2011

2012

2013
cash and cash equivalent

2014

2015

liability

Interpretation
The standard norm for cash ratio is 1:1. During the year 2011 the current ratio is 0.12 and During the year
2012 the ratio is decreased to 0.05 and it has more decreased to 0.02 during the year 2013 and decreased
to 0.00 in 2014 and it is decreased to 0.05 in the year 2014-15. The ratio was below the standard in all the
year. So the ratio was not satisfactory in all the year.

34

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

LONG TERM SOLVENCY RATIOS


Solvency refers to an enterprise's capacity to meet its long-term financial commitments. Liquidity refers to
an enterprises ability to pay short-term obligations; the term also refers to its capability to sell assets
quickly to raise cash.

Debt Ratio or Debt assets


Another leverage measure, this ratio measures the percentage of a companys assets that have been
financed with debt (short-term and long-term). A higher ratio indicates a greater degree of leverage, and
consequently, financial risk.
Formula
Total liability Total assets
Data
2015

2012

2011

Total liabilities

1,983,454 2,768,642 1,673,615 1,130,999

952136

Total assets

5,398,115 5,326,994 3,637,143 2,631,723 2,080,667

Debt Ratio

2014

0.37

2013

0.52

0.46

0.43

0.46

Graph
1

1
0.8
0.6

0.46

0.43

0.52

0.46

0.37

0.4
0.2
0
2011

2012

2013
liability

2014

2015

assets

Interpretation
This ratio gives results relating to the capital structure of a firm. Debt ratio is 0.46 in the year 2011 it
decreased to 0.43 & 0.46 in the corresponding years 2012 & 2013. A gain it is increased to 0.52 &
decreased to 0.37 in the year 2014 & 2015. From the above in fluctuating trend we can conclude that the
companys dependence on debt is increasing. It is not better position in collection of debt.

35

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Debt to equity ratio


This ratio indicates the degree of financial leverage being used by the business and includes both shortterm and long-term debt. A rising debt-to-equity ratio implies higher interest expenses, and beyond a
certain point it may affect a companys credit rating, making it more expensive to raise more debt.
Formula
Total liability or total long term liability total equity
Data
2015

2012

2011

Total liabilities

1,983,454 2,768,642 1,673,615 1,130,999

952136

Total equity

3,220,775 2,384,566 1,789,742 1,326,938

954745

Debt to Equity

2014

0.62

2013

1.16

0.94

0.85

1.00

Graph
1.16
1.2

0.94

0.85

0.8

0.62

0.6
0.4
0.2
0
2011

2012

2013
liability

2014

2015

equity

Interpretation

The ratio gives results relating to the capital structure of a firm. Debt equity ratio is 1.00 in the year 2011
and it decreased to 0.85 & 0.94 in the year 2012 and 2013. In the year 2014 the ratio has increased to 1.16
at this company in satisfactory position. And in 2015 debt equity ratio again decreased to 0.62.We can
conclude that the company depends on the debt fund is increasing. Company not in a satisfactory position.

36

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Time interest earned


This ratio measures the companys ability to meet the interest expense on its debt with its operating
income, which is equivalent to its earnings before interest and taxes (EBIT).The higher the ratio, the better
the companys ability to cover its interest expense.
Formula
EBIT Finance cost or interest expenses
Data
2015

2014

2013

2012

2011

EBIT

1,627,386

1,148,793

884,014

759,545

562,616

Finance cost

-146,675

-126,025

-59,946

-69,896

-37,515

-11.09

-9.11

-14.74

-10.86

-14.99

Time interest earned


Graph

2
0
2011

-2

2012

2013

2014

2015

-4
-6
-8
-9.11

-10
-10.86

-12

-11.09

-14
-16

-14.99

-14.74
EBIT

finance cost

Interpretation
Interest coverage ratio is -14.99 in the year 2011. It is increased automatically to -10.86 in the year 2012.
But, it is decreased to -14.74 in the year 2013 and increased to -9.11 in the year 2014 and it again
decreased to -11.09 in the year 2015. In this position outside investors are not interested to invest the
money in this company .Therefore the company interest coverage ratio is in negative .

37

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

ACTIVITY RATIOS
Activity ratios are accounting ratios that measure a firm's ability to convert different accounts within its
balance sheets into cash or sales. Activity ratios are used to measure the relative efficiency of a firm based
on its use of its assets, leverage or other such balance sheet items.
Inventory turnover ratio
The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by
comparing cost of goods sold with average inventory for a period. This measures how many times
average inventory is "turned" or sold during a period.
Formula
Cost of goods sold Average Inventory
Data
2015
2014
2013
2012
2011
13,583,708 10,621,161 7,559,626 6,049,434 5,007,421

Cost of sales
Stock-in-trade

1,608,783

Inventory turnover ratio

2,551,256 1,477,258

8.44

42.27

5.11

811,490

717004

7,45

6,98

Graph

42.27

50
40
30
20
6.98

7.45

10

8.44

5.11

0
2011

2012

2013

2014

2015

Inentory turnover ratio

Interpretation
Inventory turnover ratio is 6.98 Times in the year 2011.But, it is increased to 7.45 in the
Year 2012. Then, it is decreased to 5.11 in the year 2013 and again increased to 42.27 in the year
2014. But, it is decreased to 8.44 in the year 2015.Inventory turnover ratio increased for all year.
That is company production is also increased. Subsequently sales are also increased

38

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Account receivable turnover ratio


Accounts receivable turnover is the number of times per year that a business collects its average accounts
receivable. The ratio is intended to evaluate the ability of a company to efficiently issue credit to its
customers and collect funds from them in a timely manner.
Formula
Net credit sale Average account receivable
Data
2015
15,961,413

Sales

2014
2013
2012
2011
12,242,719 8,875,114 7,217,116 5,868,260

Trade debts
Other receivables

131,810
8,913

142,345
11,398

79,987
4,121

112,423
7,023

89625
2317

Total receivable
Account receivable ratio

140,723
113.42

153,743
79.63

84,108
105.52

119,446
60.42

91,942
63.83

Graph

113.42

120

105.52

100

79.63

80

63.83

60.42

60
40
20
0
2011

2012

1013

2014

2015

Account receivable ratio

Interpretation
Debtors turnover ratio is 63.83 times in the year 2011 and it is decreased to 60.42 times in the year 2012
and increased to10 5.52 times in the year 2013 and it decreased t o 79.63 times & it is increased to 113.42
times in the years 2015.

39

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Total Assets Turnover Ratio


Asset turnover ratio is the ratio of the value of a company's sales or revenues generated relative to the
value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which
a company is deploying its assets in generating revenue.
Formula
Revenue Total assets100
Data
2015
2014
2013
2012
2011
15,961,413 12,242,719 8,875,114 7,217,116 5,868,260
5,398,115 5,326,994 3,637,143 2,631,723 2,080,667
2.95
2.29
2.44
2.74
2.82

Revenue or Sale
Total assets
Total assets turnover ratio

Graph

2.82

2.95
2.74
2.44

2.29

2.5
2
1.5
1
0.5
0
2011

2012

2013

2014

2015

Total asset turnover ratio

Interpretation
Total assets turnover ratio is 2.82 in the year 2011 and it is decreased to 2.74 in the year 2012. In the year
2013 the ratio is 2.44 and it reduced to 2.29 in 2014 and to 2.95 increased in the years 2015.it means that
total assets increase in this year.

40

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

PROFITABILITY RATIOS
A profitability ratio is a measure of profitability, which is a way to measure a company's
performance. Profitability is simply the capacity to make a profit, and a profit is what is left over from
income earned after you have deducted all costs and expenses related to earning the income.
Gross Profit Ratio
Gross profit margin is a profitability ratio that calculates the percentage of sales that exceed the cost of
goods sold. In other words, it measures how efficiently a company uses its materials and labor to produce
and sell products profitably.
Formula
Gross profit Net sale 100
Data
2015
2014
2013
2012
2011
2,377,705 1,621,558 1,315,488 1,167,682
860,839
15,961,413 12,242,719 8,875,114 7,217,116 5,868,260
14.89
13.24
14.82
16.17
14.66

Gross profit
Sales
Gross profit ratio

Graph

20

14.66

16.17

14.82

15

13.24

14.89

10
5
0
2011

2012

2013

2014

2015

Gross profit ratio

Interpretation
From the above we can say that gross profit ratio is 14.66% in the year 2011 but it increased
to 16.17 % in 2012 & 14.82% decreased in 2013 & 2014 it decreased to 13.24% And in the year 2015
it is increased to 14.89% in the Year 2015.The company is maintaining proper control on
Trade Activities.

41

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Net Profit Ratio


Profit Margin, net margin, net profit margin or net profit ratio is a measure of profitability. It is calculated
by finding the net profit as a percentage of the revenue.
Formula
Net income Net sale100
Data

2015

2014

2013

2012

2011

Profit for the year

1,013,924

741,150

582,886

486,014

354,502

Sales
Net profit ratio

15,961,413
6.35

12,242,719
6.05

8,875,114
6.57

7,217,116
6.73

5,868,260
6.04

Graph

6.73

6.8

6.57
6.6
6.35
6.4
6.2

6.05

6.04

6
5.8
5.6
2011

2012

2013

2014

2015

Net profit ratio

Interpretation
During the year 2011 the net profit margin is 6.04 it suddenly increased to 6.73% in the year 2012 because
of decreased in administration and selling expenses. In the next year, it decreased to 6.57% & 6.05% in
the year 20113 & 2014 and it again increased to 6.35% in 2015.

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Operating Profit Ratio


The operating margin ratio, also known as the operating profit margin, is a profitability ratio that measures
what percentage of total revenues is made up by operating income.
Formula
Operating profit Net sale 100
Data

Profit from operations


Sales
operating profit ratio

2015
1,627,386
15,961,413
10.20

2014
2013
2012
2011
1,148,793
884,014
759,545
562,616
12,242,719 8,875,114 7,217,116 5,868,260
9.38
9.96
10.52
9.59

Graph

operating profit ratio


11

10.52
10.2

10.5

9.96

10

9.59
9.38

9.5
9
8.5
2011

2012

2013

2014

2015

operating profit ratio

Interpretation
During the year 2011 the operating profit ratio is 9.59% it suddenly increased to 10.52% in the year 2012
because of decreased in administration and selling expenses. In the next year, it decreased to 9.96% &
9.38% in the year 20113 & 2014 and it again increased to 10.2% in 2015.

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

Comparison
Ratios Name

EXIDE

BWL

sum

Industries
analysis

ATBA

Short term solvency ratios

2015

2015

2015

2015

2015

current ratio

1.41

3.69

5.10

2.55

1.97

quick ratio

0.85

0.9

1.75

0.875

0.75

cash ratio

-0.32

2.65

2.33

1.165

0.05

Debt ratio

0.58

23.84

24.42

12.21

0.37

Debt to equity ratio

1.75

0.31

2.06

1.03

0.62

Time interest earned

-3.42

13.14

9.72

4.86

-11.09

-4.64

2.63

-2.01

-1.005

8.44

9.83

12.95

22.78

11.39

113.42

1.76

3.45

5.21

2.605

2.95

Gross profit ratio

7% 19.39%

26.39

Net profit ratio

3%

6.06%

9.06

4.53

6.50%

Operating profit ratio

5% 12.53%

17.53

8.765

9.40%

17% 19.27%

36.27

Long term solvency ratios

Activity ratios
Inventory turnover ratio
Account receivable turnover
ratio
Total asset turnover ratio
Profitability Ratios

Return on equity

45

Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

13.195 14.90%

18.135 44.20%

Graph
Chart Title
120

100

80

60
industries ratio
Atlas battery
40

20

-20

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited

CONCLUSION
From the above analysis of the companys financial statements its concluded that the companys financial
position is good because the companys leverage, activity and profitability positions are good and the company
have to increase its liquidity position for better performance in future.

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Prepared by Muhammad Zubair BS-BBA (Hons) Atlas Battery limited