WEYTH PAKISTAN LIMITED

PROJECT: FINANCIAL STATEMENT ANALYSIS OF WPL

PROJECT:

FINANCIAL STATEMENT ANALYSIS OF WPL

SUBMMITED TO:

SIR, ASIF RAZ

SUBMMITED BY:

HAJI MOHAMMAD YASIR & UJRAT ALI

CLASS:
DATED:

FINANCE (2)
12-07-2011

ACKNOWLEDGEMENT
First and foremost thanks to the Almighty Allah who enabled us to complete this project
successfully .We would like to express our sincere gratitude to Sir, Asif raz who provided
us opportunity to learn practically about the financial statement analysis. This project
helped us a lot to understand the concepts and provided us knowledge and better
techniques to perform the analysis of financial statements

TABLE OF CONTENTS

BALANCE SHEET.............................................................................................................6
VERTICAL ANALYSIS.....................................................................................................9
INTERPRETATION..........................................................................................................11
INTERPRETATION..........................................................................................................17
INCOME STATEMENT...................................................................................................21
VERTICAL ANALYSIS...................................................................................................22
INTERPRETATIONS.......................................................................................................23
HORIZONTAL ANALYSIS.............................................................................................25
INTERPRETATIONS.......................................................................................................26
RATIOS ANALYSIS........................................................................................................28
INTERPRETATIONS.......................................................................................................29
CASH FLOW STATEMENT............................................................................................39
INVESTOR ANALYSIS...................................................................................................41

MISSION AND VISION

MISSION:
We bring to the world pharmaceutical and health care products that
improve lives and deliver outstanding value to out customers and shareholders.
VISION:
Our vision is to lead the way to a healthier world. By carrying out this vision at
every level of organization, we will be recognized by employees, customers and
shareholders as the best pharmaceutical company in the world, resulting in value for all.
We will achieve this by being accountable for:
Leading the world through innovation through pharmaceutical, biotech and
vaccine technologies.
Making trust, quality, integrity and excellence hallmarks of the way we do business.
Attracting, developing and motivating our people.
Continually growing and improving our business.
Demonstrating efficiency in how we use resources and make decisions.

BALANCE SHEET
WEYTH PAKISTAN LIMITIED
BALANCE SHEET
FOR THE YEARS ENDED DECEMBER 31, 2003-2010
PARTIC
ULARS
CURREN
T
ASSETS
:
Cash and
Bank
balance/
Cash
shortterm
investme
nt
Loans
and
advances
receivabl
e/Notes
receivabl
e
trade
debt/Acc
ounts
receivabl
e
other
receivabl
e
trade
deposits
and
prepaym
ents
interest
accrued
stock-intrade/Inv
entories
spares
taxation
net
Noncurrent
asset
classified
as held
for sale

2010(R
S"000)

2009(R
S"000)

2008(R
S"000)

2007(R
S"000)

2006(R
S"000)

2005(R
S"000)

2004(R
S"000)

2003(R
S"000)

241,928

35,648

50,911

51,993

25,506

397,411

309,999

80,701

87,000

720,000

575,000

58,407

15,744

15,907

11,121

14,124

79,671

9,306

15,594

50,431

277,447

242,804

138,572

109,399

71,915

43,330

182,462

31,277

14,890

17,860

16,128

43,265

31,059

13,830

32,168

13,472

13,462

15,655

10,054

6,470

9,295

6,246

9,464

3,746

2,269

4,673

828,388

800,768

756,391

14,411

2,921

149,149

563,189

610,803

498,684

527,910

471,063

2,912

2,231

1,811

1,935

1,915

2,118

97,687

79,912

71,315

111,495

147,580

182,933

130,526

7,100

Total
current
assets
Fixed
assets:
property /
Land
Building
Plant and
machiner
y
Furniture
and
fittings
vehicles
Office
equipme
nt
Other's
Total
fixed
Assets
long term
deposits
long term
loans to
employe
e
deferred
taxation
Total
Assets
CURREN
T
liabilities
:
trade and
others
payables
Current
maturity
of
liabilities
against
assets
subject to
finance
leases
Proposed
dividend
Total
current
liabilities

1,391,2
09

1,258,5
73

1,271,6
21

1,596,3
76

1,497,8
73

1,237,5
50

1,095,4
69

924,096

17,924
2,894

34,969
1,588

40,181
2,652

24,586
2,635

23,348
1,614

23,557
582

26,043
686

17,787
552

66,227

96,249

115,061

110,836

112,826

107,815

95,334

93,578

4,802
17,883

1,930
34,560

4,673
39,324

4,381
21,586

3,541
18,639

4,296
18,048

5,200
15,101

15,347
15,908

34,998

10,385

22,511

20,451

18,330

17,280

13,150

2,230

32,983

1,409

2,422

19,030

15,842

159

144,887

179,681

226,632

217,458

179,707

174,000

174,544

159,014

2,180

1,879

1,957

2,287

1,839

1,779

1,859

2,939

8,203

12,161

9,342

8,613

7,629

6,259

5,588

8,296

6,431

1,552,9
10

1,452,2
94

1,509,5
52

1,824,7
34

1,687,0
48

1,419,5
88

1,277,6
52

1,094,3
45

544,087

464,793

370,635

404,068

400,160

340,338

359,227

242,507

1,010

1,544

1,571

35,540

544,087

464,793

370,635

404,068

400,160

341,348

360,771

279,618

192

Long
term
liabilities
:
deferred
taxation
Liabilities
against
assets
subject to
finance
leases
Total
liabilities
Owner's
Equity:
share
capital
Reserves
Accumul
ated
losses
unapprop
riate
profit
total
stockhold
er's
Equity
Total
Liabilitie
s and
owner's
Equity

5,238

8,065

9213

8,841

6,753

544,087

470,031

378,700

413,281

409,001

142,161

142,161

142,161

927,041

926,940

940,590

142,161
1,078,2
57

-60,379

-86,838

1,008,8
23

1,552,9
10

3,277

1,039

2,583

348,101

361,810

285,478

142,161

142,161

142,161

142,161

844,000

700,000

666,000

666,000

48,101

191,035

291,886

229,326

107,681

706

982,263

1,130,8
52

1,411,4
53

1,278,0
47

1,071,4
87

915,842

808,867

1,452,2
94

1,509,5
52

1,824,7
34

1,687,0
48

1,419,5
88

1,277,6
52

1,094,3
45

VERTICAL ANALYSIS
particulars
CURRENT
ASSETS:
Cash and Bank
balance/Cash
short-term
investment
Loans and
advances
receivable/Notes
receivable
trade
debt/Accounts
receivable

2010

2009

2008

2007

2006

15.58
%

2.45%

3.37%
5.76%

2.85%
39.46
%

1.51%
34.08
%

2005

2004

2003

27.99
%

24.26
%

7.37%

3.76%

1.08%

1.05%

0.61%

0.84%

5.61%

0.73%

1.42%

3.25%

19.10
%

16.08
%

7.59%

6.48%

5.07%

3.39%

16.67
%

other receivable
trade deposits and
prepayments

2.01%

1.03%

1.18%

0.88%

2.56%

2.19%

1.08%

2.94%

0.87%

0.93%

1.04%

0.55%

0.38%

0.65%

0.49%

0.86%

interest accrued
stock-intrade/Inventories

0.24%
53.34
%

0.00%
55.14
%

0.15%
50.11
%

0.26%
30.86
%

36.21
%

35.13
%

41.32
%

43.05
%

spares

0.93%

0.20%

0.19%

0.12%

0.11%

taxation net
Non-current asset
classified as held
for sale

9.60%

6.73%

5.29%

3.91%

6.61%

0.14%
10.40
%

0.15%
14.32
%

0.19%
11.93
%

Total current
assets
Fixed assets:
property / Land
Building
Plant and
machinery
Furniture and
fittings
vehicles
Office
equipment

89.59
%

86.66
%

84.24
%

87.49
%

88.79
%

87.18
%

85.74
%

84.44
%

0.00%
1.15%
0.19%

0.00%
2.41%
0.11%

0.00%
2.66%
0.18%

0.00%
1.35%
0.14%

0.00%
1.38%
0.10%

0.00%
1.66%
0.04%

0.00%
2.04%
0.05%

0.00%
1.63%
0.05%

4.26%

6.63%

7.62%

6.07%

6.69%

7.59%

7.46%

8.55%

0.31%
1.15%

0.13%
2.38%

0.31%
2.61%

0.24%
1.18%

0.21%
1.10%

0.30%
1.27%

0.41%
1.18%

1.40%
1.45%

2.25%

0.72%

1.49%

1.12%

1.09%

1.22%

1.03%

0.15%
15.01
%

1.81%
11.92
%

0.08%
10.65
%

0.17%
12.26
%

1.49%
13.66
%

1.45%
14.53
%

0.39%

Other's
Total fixed
Assets

0.01%
9.33%

12.37
%

long term deposits

long term loans to
employee

0.14%

0.13%

0.13%

0.13%

0.11%

0.13%

0.15%

0.27%

0.53%

0.84%

0.62%

0.47%

0.45%

0.44%

0.44%

0.76%

deferred taxation

Total Assets
CURRENT
liabilities:
trade and others
payables
Current maturity of
liabilities against
assets subject to
finance leases

0.41%
0.00%
100.00
%

0.00%
100.00
%

0.00%
100.00
%

0.00%
100.00
%

0.00%
100.00
%

0.00%
35.04
%

0.00%
32.00
%

0.00%
24.55
%

0.00%
22.14
%

0.00%
23.72
%

0.00%
100.00
%

0.02%
0.00%
100.00
%

0.00%
100.00
%

0.00%
23.97
%

0.00%
28.12
%

0.00%
22.16
%

0.07%

0.12%

0.14%

Proposed dividend

Total current
liabilities
Long term
liabilities:

3.25%
35.04
%

32.00
%

24.55
%

22.14
%

23.72
%

24.05
%

28.24
%

25.55
%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.36%

0.53%

0.50%

0.52%

0.48%

35.04
%

32.36
%

25.09
%

22.65
%

24.24
%

24.52
%

0.08%
28.32
%

0.24%
26.09
%

0.00%

0.00%

0.00%

0.00%

0.00%

9.15%
59.70
%

9.79%
63.83
%

9.42%
62.31
%

7.79%
59.09
%

8.43%
50.03
%

0.00%
10.01
%
49.31
%

0.00%
11.13
%
52.13
%

0.00%
12.99
%
60.86
%

64.96
%

-5.98%
67.64
%

3.19%
74.91
%

10.47
%
77.35
%

17.30
%
75.76
%

16.15
%
75.48
%

8.43%
71.68
%

0.06%
73.91
%

100.00
%

100.00
%

100.00
%

100.00
%

100.00
%

100.00
%

100.00
%

100.00
%

deferred taxation
Liabilities against
assets subject to
finance leases

Total liabilities
Owner's
Equity:
share capital
Reserves
Accumulated
losses
unappropriate
profit
total stockholder's
Equity

Total
Liabilities and
owner's
Equity

0.30%

-3.89%

10

INTERPRETATION
Common-size analysis expresses comparisons in percentages (%). For example, if
cash is $40,000 and total assets is $1,000,000, than cash represents 4% of total assets.
The use of percentages is usually preferable to the use of absolute amounts.
If firm A earns $10,000 and firm B earns $1,000, which is more profitable? Firm A
is probably your response. However, the total owners equity of A is $1,000,000 and
Bs is $10,000.
The use of common size analysis makes comparisons of firms of different sizes much
more meaningful. Care must be exercised in the use of common size analysis with
small absolute amounts because a small change in amount can result in a very
substantial percentage change. For example, if profits last year amounted to $100
and increased this year to $500, this would be an increase of only $400 in profits, but
it would represent a substantial percentage increase.
VERTICAL ANALYSIS
Vertical analysis compares each amount with a base amount selected from the same
year, for example, if advertising expenses were $1,000 in 2010 and sales were
$100,000 the advertising would have been 1% of sales.
HORIZONTAL ANALYSIS
Horizontal analysis compares each amount with a base amount for a selected base
year. For example, if sales were $400,000 in 2003 and $600,000 in 2004, then sales
increased to 150% of the 2003 level in 2004, an increase of 50%.
ASSETS:
Cash and bank balances
particulars
Cash and Bank
balance/Cash

2010
15.58
%

2009
2.45
%

2008
3.37
%

2007
2.85
%

2006
1.51
%

2005
27.99
%

2004
24.26
%

2003
7.37
%

11

30.00%
25.00%
20.00%
Cash and
Bank
balance/Cash

15.00%
10.00%
5.00%
0.00%
2010 2008 2006 2004

As we know the definition of vertical analysis that the analysis which compares each
amount with a base amount selected from the same year, so here we have the total
assets as a base amount for each year. The above Graph shows that in 2003 cash and
bank balances were 7.37% of total asset, after that it increases for year 2004 and
2005 but it falls in 2006 up to 1.51% and at the end of 2010 it rises to 15.58%.

Total current Assets

particulars
Total current
assets

2010
89.59
%

2009
86.66
%

2008
84.24
%

2007
87.49
%

2006
88.79
%

2005
87.18
%

2004
85.74
%

2003
84.44
%

90.00%
88.00%
86.00%
Total current
assets

84.00%
82.00%
80.00%
2010 2008 2006 2004

Total current assets were 84.44% in 2003 and after that it increased tell 2007. In
2008 it decreases but in 2009 and 2010 it again increased. If firm having high
percentage of current assets it means that a firms can make an investments in
different projects through which profit can be generated.

Fixed Assets
particulars
Total fixed
Assets

2010
9.33
%

2009
12.37
%

2008
15.01
%

2007
11.92
%

2006
10.65
%

2005
12.26
%

2004
13.66
%

2003
14.53
%

12

16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%

Total fixed
Assets

2010 2008 2006 2004

The above graph shows that, the firm is having less percentage of fixed assets as
compare with current assets. In year 2003 fixed assets were 14.53% of total assets in
years 2004-2006 it decreases up to 10.65% after that it increased in 2008 and again
starting to fall in 2009 and 2010.

LIABILITIES
Current liabilities:
particulars
Total current
liabilities

2010
35.04
%

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2010 2008 2006 2004

2009
32.00
%

2008
24.55
%

2007
22.14
%

2006
23.72
%

2005
24.05
%

2004
28.24
%

2003
25.55
%

Total current
liabilities

Current liabilities in 2003= 25.55%, 2004= 28.24%, 2005= 24.05%, 2006= 23.72%,
2007= 22.14%, 2008= 24.55%, 2009= 32.00% and in 2010 it is 35.04%. It indicates
the good position of the company because; firm is not having to much debt.

Total liabilities:
particulars
Total liabilities

2010
35.04
%

2009
32.36
%

2008
25.09
%

2007
22.65
%

2006
24.24
%

2005
24.52
%

2004
28.32
%

2003
26.09
%

13

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

Total
liabilitie s

2010

2008 2006 2004

Total liabilities of the weyth Pakistan limited were up to 35.04% in 2010 which
means that out of the total assets the portion of the total liabilities is 35.04%. Those
firms are good who having less percentage of total liabilities.
TOTAL LIABILITIES + OWNERS EQUITY
particulars
Total
Liabilities
and owner's
Equity

2010

2009

2008

2007

2006

2005

2004

2003

100.0
0%

100.0
0%

100.0
0%

100.0
0%

100.0
0%

100.0
0%

100.0
0%

100.0
0%

100.00%
80.00%
Total
Liabilities and
ow ner's
Equity

60.00%
40.00%
20.00%
0.00%
2010

2007

2004

The above graph indicates that the total liabilities + owners equity is equal to 100%
in each year. It is therefore 100% because the total assets and total liabilities +
owners equity will always be same.

14

HORIZONTAL ANALYSIS
particulars
CURRENT
ASSETS:
Cash and Bank
balance/Cash
short-term
investment
Loans and
advances
receivable/Notes
receivable
trade
debt/Accounts
receivable

2010

2009

2008

2007

2006

2005

2004

2003

299.78%

44.17%

63.09%

64.43%

31.61%

492.45%

384.13%

100.00%

374.55%

100.96%

102.01%

71.32%

90.57%

510.91%

59.68%

100.00%

27.64%

152.06%

133.07%

75.95%

59.96%

39.41%

23.75%

100.00%

other receivable
trade deposits
and
prepayments

97.23%

46.29%

55.52%

50.14%

134.50%

96.55%

42.99%

100.00%

142.35%

142.24%

165.42%

106.23%

68.36%

98.21%

66.00%

100.00%

interest accrued
stock-intrade/Inventorie
s

175.86%

169.99%

160.57%

119.56%

129.66%

105.86%

112.07%

100.00%

spares

680.41%

137.91%

137.49%

105.34%

85.51%

91.36%

90.42%

100.00%

taxation net
Non-current
asset classified
as held for sale
Total current
assets

114.27%

74.84%

61.22%

54.64%

85.42%

113.07%

140.15%

100.00%

150.55%

136.20%

137.61%

172.75%

162.09%

133.92%

118.54%

100.00%

property / Land

100.77%

196.60%

225.90%

138.22%

131.26%

132.44%

146.42%

100.00%

Building
Plant and
machinery
Furniture and
fittings

524.28%

287.68%

480.43%

477.36%

292.39%

105.43%

124.28%

100.00%

70.77%

102.85%

122.96%

118.44%

120.57%

115.21%

101.88%

100.00%

31.29%

12.58%

30.45%

28.55%

23.07%

27.99%

33.88%

100.00%

vehicles
Office
equipment

112.42%

217.25%

247.20%

135.69%

117.17%

113.45%

94.93%

100.00%

14.08%

208.20%

8.89%

15.29%

120.12%

100.00%

Fixed assets:

Other's
Total fixed
Assets
long term
deposits
long term loans
to employee
deferred
taxation

Total Assets
CURRENT
liabilities:
trade and others
payables

1.00%
91.12%

113.00%

142.52%

136.75%

113.01%

109.42%

109.77%

100.00%

74.17%

63.93%

66.59%

77.82%

62.57%

60.53%

63.25%

100.00%

98.88%

146.59%

112.61%

103.82%

91.96%

75.45%

67.36%

100.00%

141.90%

132.71%

137.94%

166.74%

154.16%

129.72%

116.75%

100.00%

224.36%

191.66%

152.83%

166.62%

165.01%

140.34%

148.13%

100.00%

15

Current maturity
of liabilities
against assets
subject to
finance leases
Proposed
dividend
Total current
liabilities
Long term
liabilities:
deferred
taxation
Liabilities
against assets
subject to
finance leases

64.29%

98.28%

100.00%
100.00%

194.58%

166.22%

132.55%

144.51%

143.11%

122.08%

159.84%

246.11%

281.14%

269.79%

206.07%

129.02%

100.00%

100.00%

40.22%

100.00%

Total liabilities
Owner's
Equity:

190.59%

164.65%

132.65%

144.77%

143.27%

121.94%

126.74%

100.00%

share capital

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

Reserves
Accumulated
losses
unappropriate
profit
total
stockholder's
Equity
Total Liabilities
and owner's
Equity

139.20%

139.18%

141.23%

161.90%

126.73%

105.11%

100.00%

100.00%

12300.00%

6813.17%

27058.78%

41343.63%

32482.44%

15252.27%

100.00%

124.72%

121.44%

139.81%

174.50%

158.00%

132.47%

113.23%

100.00%

141.90%

132.71%

137.94%

166.74%

154.16%

129.72%

116.75%

100.00%

16

INTERPRETATION
Common-size analysis expresses comparisons in percentages (%). For example, if
cash is $40,000 and total assets is $1,000,000, than cash represents 4% of total assets.
The use of percentages is usually preferable to the use of absolute amounts.
If firm A earns $10,000 and firm B earns $1,000, which is more profitable? Firm A
is probably your response. However, the total owners equity of A is $1,000,000 and
Bs is $10,000.
The use of common size analysis makes comparisons of firms of different sizes much
more meaningful. Care must be exercised in the use of common size analysis with
small absolute amounts because a small change in amount can result in a very
substantial percentage change. For example, if profits last year amounted to $100
and increased this year to $500, this would be an increase of only $400 in profits, but
it would represent a substantial percentage increase.
HORIZONTAL ANALYSIS
Horizontal analysis compares each amount with a base amount for a selected base
year. For example, if sales were $400,000 in 2003 and $600,000 in 2004, then sales
increased to 150% of the 2003 level in 2004, an increase of 50%.

ASSETS:
Cash and bank balances
particulars
CURRENT
ASSETS:
Cash and
Bank
balance/Cas
h

2010

2009

2008

2007

2006

2005

2004

2003

299.78%

44.17%

63.09%

64.43%

31.61%

492.45%

384.13%

100.00%

500.00%
400.00%
300.00%

Cash and
Bank
balance/Cash

200.00%
100.00%
0.00%
2010

2007

2004

As we know that in horizontal analysis we have to select a base amount or base year.
In this firm we have select a 2003 as a base year. We will compare all the others
17

amount with base years. The 2003 is our base year therefore; all the amounts of this
year will be 100%. The above graph shows that the amount of cash and bank
balance is increasing in 2004 and 2005 by 284.13% and 392.45% simultaneously
after that it start to fall up to year 2009 and again increase in 2010. It means that
firm is having a more cash balance that it has in 2003.

Total current Assets

particulars
Total
current
assets

2010

2009

2008

2007

2006

2005

2004

2003

150.55%

136.20%

137.61%

172.75%

162.09%

133.92%

118.54%

100.00%

200.00%
150.00%
100.00%

Total current
assets

50.00%
0.00%
2010

2007

2004

The above graph shows that the total current assets of the firm are increasing every
year up to year 2007. In year 2008 and 2009 it falls but rises in 2010. It means that
the firm having 50.55% more total current asset that it has in 2003.

LIABILITIES
CURRENT LIABILITIES
particulars
Total
current
liabilities

2010

2009

2008

2007

2006

2005

2004

2003

194.58%

166.22%

132.55%

144.51%

143.11%

122.08%

129.02%

100.00%

18

200.00%
150.00%
100.00%

Total current
liabilities

50.00%
0.00%
2010

2007

2004

The above graph is explaining the total current liabilities, it shows that the total
current liabilities is continuously increasing from year 2004 to 2007 in year 2008 it
slightly decreased but still greater than in the base year 2003 and again increased in
2009 and 2010. It means that company is having more current liabilities that it has
in 2003. It is almost 100% of 2003.
TOTAL LIABILITIES
particulars
Total
liabilities

2010

2009

2008

2007

2006

2005

2004

2003

190.59%

164.65%

132.65%

144.77%

143.27%

121.94%

126.74%

100.00%

200.00%
150.00%
100.00%

Total
liabilitie s

50.00%
0.00%
2010 2008 2006 2004

The total liabilities having a same explanation as total current liabilities have
because, with an increase in current liabilities the total liabilities will automatically
increased.
TOTAL LIABILITIES + OWNERS EQUITY
particulars
Total
Liabilities
and
owner's
Equity

2010

2009

2008

2007

2006

2005

2004

2003

141.90%

132.71%

137.94%

166.74%

154.16%

129.72%

116.75%

100.00%

19

200.00%
150.00%
Total
Liabilities and
ow ner's
Equity

100.00%
50.00%
0.00%
2010

2007

2004

The above graph of total liabilities + owners equity shows that it is increasing each
year up to 2007. After that it decreased but still more than the base year and in year
2010 it increases again.

20

INCOME STATEMENT
WEYTH PAKISTAN LIMITIED
INCOME STATEMENT
FOR THE YEARS ENDED DECEMBER 31, 2003-2010
PARTIC
ULARS
Net
sales
Cost of
goods
sold
Gross
profit
selling,
marketin
g and
distributi
on
expense
s
administr
ative
expense
s
other
operatin
g income
other
operatin
g
expense
s
finance
cost
profit/
(loss)
before
taxation
Taxation
:

2010(R
S"000)
2,310,1
91

2009(R
S"000)
2,306,3
23

2008(R
S"000)
2,383,6
39

2007(R
S"000)
2,107,5
85

2006(R
S"000)
1,945,4
94

2005(R
S"000)
1,775,5
14

2004(R
S"000)
1,705,2
56

2003(R
S"000)
1,859,0
37

1,829,6
53

1,805,2
62

1,678,9
89

1,372,3
25

1,188,3
89

1,111,4
72

1,053,4
27

1,112,9
69

480,538

501,061

704,650

735,260

757,105

664,042

651,829

746,068

340,214

332,283

328,361

310,883

305,081

250,292

252,883

251,005

107,938

167,871

122,210

99,456

84,361

91,154

102,739

93,542

19,979

15,174

66,789

72,050

61,422

39,439

44,750

70,491

6,122

43,922

90,673

37,043

36,095

33,315

165,707

32,498

3,014

3,752

1,106

861

845

1,611

14,163

7,943

43,229

-31,593

229,089

359,067

392,145

327,109

161,087

431,571

Current

28,439

58,083

85,945

108,435

62,660

93,439

57,581

114,026

Deferred

11,669

2,827

1,148

5561

2,088

6,945

3,469

15,992

16,770

55,256

84,797

113,996

64,748

100,384

54,112

130,018

26,459

-86,849

144,292

245,071

327,397

226,725

106,975

301,553

Profit/
(loss)
after
taxation

21

VERTICAL ANALYSIS
PARTICULARS

2010

2009

2008

2007

2006

2005

2004

2003

Net sales

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

Cost of goods sold

79.20%

78.27%

70.44%

65.11%

61.08%

62.60%

61.78%

59.87%

Gross profit

20.80%

21.73%

29.56%

34.89%

38.92%

37.40%

38.22%

40.13%

14.73%

14.41%

13.78%

14.75%

15.68%

14.10%

14.83%

13.50%

administrative expenses

4.67%

7.28%

5.13%

4.72%

4.34%

5.13%

6.02%

5.03%

other operating income

0.86%

0.66%

2.80%

3.42%

3.16%

2.22%

2.62%

3.79%

other operating expenses

0.26%

1.90%

3.80%

1.76%

1.86%

1.88%

9.72%

1.75%

finance cost

0.13%

0.16%

0.05%

0.04%

0.04%

0.09%

0.83%

0.43%

1.87%

-1.37%

9.61%

17.04%

20.16%

18.42%

9.45%

23.21%

Taxation:

Current

1.23%

2.52%

3.61%

5.14%

3.22%

5.26%

3.38%

6.13%

Deferred

0.51%

0.12%

0.05%

0.26%

0.11%

0.39%

0.20%

0.86%

0.73%

2.40%

3.56%

5.41%

3.33%

5.65%

3.17%

6.99%

1.15%

-3.77%

6.05%

11.63%

16.83%

12.77%

6.27%

16.22%

selling, marketing
distribution expenses

profit/(loss)
taxation

and

before

Profit/(loss) after taxation

22

INTERPRETATIONS

PARTICULARS

2010

2009

2008

2007

2006

2005

2004

2003

Net sales

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

Cost of goods sold

79.20%

78.27%

70.44%

65.11%

61.08%

62.60%

61.78%

59.87%

Gross profit

20.80%

21.73%

29.56%

34.89%

38.92%

37.40%

38.22%

40.13%

100.00%
80.00%

Net sales

60.00%
40.00%

Cost of goods
sold

20.00%

Gross profit

0.00%
2010

2007

2004

This chart show as company in year 2003-2010 sales is 100% in vertical

analysis. Cost of goods sold in 2003 is 59.87% in 2004 is 61.78% in 2005 is
62.60% in 2006 is 61.11% in 2007 is 65.11% 2008 is 70.44%in 2009 is 78.27%
in 2010 is 79.20%.
Gross profit percentages from 2003-2010 is 40.13%, 38.22%,37.40%,
38.92%,34.89%, 29.56%, 21.73%,20.80% respectively.
The percentage of cost of goods sold is increasing each year which means that
company is spending more on cost due to which Gross profit is generating less and
less. The company must use the economies of scale.
PARTICULARS

2010

2009

2008

2007

2006

2005

2004

2003

other operating income

0.86%

0.66%

2.80%

3.42%

3.16%

2.22%

2.62%

3.79%

other
expenses

0.26%

1.90%

3.80%

1.76%

1.86%

1.88%

9.72%

1.75%

operating

23

10.00%
8.00%

other
ope rating
incom e

6.00%
4.00%

other
ope rating
expenses

2.00%
0.00%
2010 2008 2006 2004

Other income in 2003 is 3.79% and in 2007 is 3.42% except these two years the
other income of the company is not good enough. This means that company is not
making investments.
Other operating expenses are also decreasing in each year.
PARTICULARS

2010

2009

2008

2007

2006

2005

2004

2003

before

1.87%

-1.37%

9.61%

17.04%

20.16%

18.42%

9.45%

23.21%

Profit/(loss) after taxation

1.15%

-3.77%

6.05%

11.63%

16.83%

12.77%

6.27%

16.22%

profit/(loss)
taxation

25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

profit/(loss)
before
taxation
Profit/(loss)
after taxation

-5.00%
2010 2008 2006 2004

Profit before taxation was good in 2003 and 2006. While in reaming years profit
before taxation is not that good. This mean that company sales is going down and
company is making a lot of expenses.
Profit after taxation was god in year 2003 and 2006. In 2009 company is having a
loss which means that company cost of production and other expenses are more
than its sales and other income.

24

HORIZONTAL ANALYSIS
PARTICULARS

2010

2009

2008

2007

2006

2005

2004

2003

Net sales

124.27%

124.06%

128.22%

113.37%

104.65%

95.51%

91.73%

100.000%

Cost of goods sold

164.39%

162.20%

150.86%

123.30%

106.78%

99.87%

94.65%

100.000%

Gross profit

64.41%

67.16%

94.45%

98.55%

101.48%

89.01%

87.37%

100.000%

selling,
marketing
and
distribution
expenses

135.54%

132.38%

130.82%

123.86%

121.54%

99.72%

100.75%

100.000%

115.39%
28.34%

179.46%
21.53%

130.65%
94.75%

106.32%
102.21%

90.19%
87.13%

97.45%
55.95%

109.83%
63.48%

100.000%
100.000%

18.84%

135.15%

279.01%

113.99%

111.07%

102.51%

509.90%

100.000%

37.95%

47.24%

13.92%

10.84%

10.64%

20.28%

178.31%

100.000%

10.02%

-7.32%

53.08%

83.20%

90.86%

75.79%

37.33%

100.000%

Taxation:

Current

24.94%

50.94%

75.37%

95.10%

54.95%

81.95%

50.50%

100.000%

Deferred

72.97%

17.68%

7.18%

34.77%

13.06%

43.43%

21.69%

100.000%

12.90%

42.50%

65.22%

87.68%

49.80%

77.21%

41.62%

100.000%

8.77%

-28.80%

47.85%

81.27%

108.57%

75.19%

35.47%

100.000%

administrative
expenses
other
operating
income

other
expenses

operating

finance cost

profit/(loss)
taxation

Profit/(loss)
taxation

before

after

25

INTERPRETATIONS
PARTICULARS 2010

2009

2008

2007

2006

2005

2004

2003

Net sales

124.27
%

124.06
%

128.22
%

113.37
%

104.65
%

95.51
%

91.73
%

100.000%

goods 164.39
%

162.20
%

150.86
%

123.30
%

106.78
%

99.87
%

94.65
%

100.000%

67.16%

94.45%

98.55%

101.48
%

89.01
%

87.37
%

100.000%

Cost
sold

of

Gross profit

64.41%

200.00%
150.00%

Net sales

100.00%

Cost of goods
sold

50.00%
0.00%
2010

Gross profit
2007

2004

In horizontal analysis 2003 is the base year therefore this year each account is equal
to 100%.While comparing other year with 2003 the above graph showing that in
year 2004 and 2005 the sales of the company goes down by 8.23% and 5.49%
consecutively after that sales increasing every year which means that company is
doing well but we cant make any decision just on sales figures.
Cost of goods sold having the same situation as the sales having.
Gross profit is decreasing each year except in 2006 which is increased by 1.48%.
PARTICULARS

2010

2009

2008

2007

2006

2005

2004

2003

other operating
income

28.34%

21.53%

94.75%

102.21%

87.13%

55.95%

63.48%

100.000%

other operating
expenses

18.84%

135.15%

279.01%

113.99%

111.07%

102.51%

509.90%

100.000%

26

600.00%
500.00%

other
ope rating
incom e

400.00%
300.00%
200.00%
100.00%
0.00%
2010 2008 2006 2004

other
ope rating
expenses

Other operating income is decreasing in years 2004-2006 than increase in year 2007
by 2.21% after that it decreased again till year 2010.This means that firm is not
generating income from other sources.
Other operating expenses are continuously increasing which not well for a company.

PARTICULARS

2010

2009

2008

2007

2006

2005

2004

2003

profit/(loss) before
taxation

10.02%

-7.32%

53.08%

83.20%

90.86%

75.79%

37.33%

100.000%

Profit/(loss) after
taxation

8.77%

-28.80%

47.85%

81.27%

108.57%

75.19%

35.47%

100.000%

120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
-20.00%
-40.00%
2010

profit/(loss)
before
taxation
Profit/(loss)
after taxation
2007

2004

Profit before taxation and after taxation both are decreasing year by year which
means that company is not performing as well as they can.

27

RATIOS ANALYSIS
years
CURRENT RATIO =
CURRENT ASSETS /
CURRENT LIABILITIES
QUICK OR ACID-TESTRATIO = CURRENT
ASSET - INVENTORY /
CURRENT LIABILITIES
CASH RATIO = CASH +
CASH EQUALIENT /
CURRENT LIABILITIES
DAYS'
SALES
IN
RECEIVABLES = GROSS
RECEIVABLE / NET
SALES/365
A/R TURNOVER = NET
SALES
/
AVERAGE
GROSS RECEIVABLE
A/R
TURNOVER
IN
DAYS'
=
AVERAGE
GROSS RECEIVABLE /
NET SALES/365
DAYS'
SALES
IN
INVENTORY = ENDING
INVENTORY / COST OF
GOODS SOLD/365
INVENTORY
TURNOVER = COST OF
GOODS
SOLD
/
AVERAGE INVENTORY
INVENTORY
TURNOVER IN DAYS' =
AVERAGE
INVENTORY / COST OF
GOODS SOLD/365
Operating
Cycle
=
Accounts
Receivable
Turnover
in
days
+
Inventory Turnover in Days.
Working Capital = Current
Assets- Current Liabilities
Sales to Working Capital =
sales
/ average working
capital
Times Interest Earned =
EBIT / interest expense
Debt Ratio =
total
liabilities / total assets
Debt to equity ratio = total
liabilities
/
total
stockholder's equity
Net Profit Margin = net
income / sales
Total Assets Turnover =
net sales / total assets
Return on Assets = net
income / total assets
Operating Profit Margin =
EBIT / Net sales
Gross Profit Margin =
Gross profit / Net Sales

2010

2009

2008

2007

2006

2005

2004

2003

2.557

2.708

3.431

3.951

3.743

3.625

3.036

3.305

1.034

0.985

1.390

2.557

2.217

2.165

1.573

1.620

0.445

0.077

0.372

1.911

1.501

1.164

0.859

0.289

22

49

42

29

31

38

14

45

49

22

26

38

35

29

77

24

7.379

16.252

14.117

9.573

10.431

12.516

4.742

15.067

165

162

164

150

188

164

183

154

2.246

2.319

2.545

2.338

-2.142

2.165

2.109

4.725

163

157

143

156

170

169

173

77

170

174

158

166

181

181

178

92

847,122

793,780

900,986

1,192,308

1,097,713

896,202

734,698

644,478

2.727

2.905

2.646

1.768

1.772

1.981

2.321

2.885

2.578

-0.572

2.702

3.150

6.056

3.259

2.977

3.319

0.350

0.324

0.251

0.226

0.242

0.245

0.283

0.261

0.539

0.479

0.335

0.293

0.320

0.325

0.395

0.353

0.011

-0.038

0.061

0.116

0.168

0.128

0.063

0.162

1.488

1.588

1.579

1.155

1.153

1.251

1.335

1.699

0.017

-0.060

0.096

0.134

0.194

0.160

0.084

0.276

0.019

-0.014

0.096

0.170

0.202

0.184

0.094

0.232

0.208

0.217

0.296

0.349

0.389

0.374

0.382

0.401

28

INTERPRETATIONS

Gross Receivable s
Net Sales/365

Days Sales in Receivables =

Years
DAYS' SALES IN RECEIVABLES =
GROSS RECEIVABLE / NET SALES/365

2010

2009

2008

2007

2006

2005

2004

2003

22

49

42

29

31

38

14

45

60
50
DAYS'
SALES IN
RECEIVAB
LES =
GROSS

40
30
20
10
0
2010 2008 2006 2004

Days sales in receivables indicate how efficiently company manages its

receivables. WPL collected its receivables very late in 2003 and 2009.
Except these two years in the reaming all years the company days sales in
receivables is good. Minimum days of collection of account receivable is
better for the company
Accounts Receivable Turnover in Days =
Years
A/R TURNOVER IN DAYS' =
AVERAGE
GROSS
RECEIVABLE
/
NET
SALES/365

Average Gross Receivable s

Net Sales/365

2010

2009

2008

2007

2006

2005

2004

2003

7.379

16.252

14.117

9.573

10.431

12.516

4.742

15.067

20
15

A/R
TURNOVER
IN DAYS' =
AVERAGE
GROSS

10
5

20
04

20
06

20
08

20
10

Account receivable turnover in days is same as days sales in receivables

except that the account recevables turnover in days is computed using
29

average gross receivables. Graph shows that accout receivable turnover in

days Is better in 2003 and 2010 comparing with others years.The firm
should collect receivables in minimum days.
Net Sales

Accounts Receivable Turnover= Average Gross Receivable s

Years
A/R TURNOVER = NET SALES /
AVERAGE GROSS RECEIVABLE

2010

2009

2008

2007

2006

2005

2004

2003

49

22

26

38

35

29

77

24

100
80

A/R
TURNOVER
= NET
SALES /
AVERAGE

60
40
20
0
2010 2008 2006 2004

The Account receivable turnover ratio is an indication to how many times

the accounts receivables are turned over. The higher the value of the ratio,
the better the company is in terms of collecting their accounts
receivables. WPLs receivables turnover was very low during 2003 but
afterwards it boosted up in 2004 and showing highest receivables turnover
in this year. Then it slightly decreased in and again increased in 2010.
Days Sales in Inventory =

Ending Inventory
Cost of Goods Sold/365

Years
DAYS' SALES IN INVENTORY =
ENDING INVENTORY / COST OF
GOODS SOLD/365

2010

2009

2008

2007

2006

2005

2004

2003

165

162

164

150

188

164

183

154

200
150

DAYS'
SALES IN
INVENTOR
Y = ENDING
INVENTOR

100
50
0
2010 2008 2006 2004

Days sales in inventory show the length of time that it will take to use up
the inventory through sales. The lower the number of days sales in

30

inventory, the better the inventory control. The days sales in inventory of
WPL were better in 2003 and 2007.
Cost of Goods Sold

Inventory Turnover = Average Inventory

Years
INVENTORY TURNOVER = COST
OF GOODS SOLD / AVERAGE
INVENTORY
6
5
4
3
2
1
0
-1 2010 2008 2006 2004
-2
-3

2010
2.246

2009
2.319

2008
2.545

2007
2.338

2006
-2.142

2005
2.165

2004
2.109

2003
4.725

INVENTOR
Y
TURNOVER
= COST OF
GOODS

The Inventory turnover is a measure of the number of times inventory is

sold or used in a time period the inventory turnover of WPL is very good in
all years except in 2006.Higher turn over time is good for the company.
Inventory Turnover in Days =

Average Inventory
Cost of Goods Sold/365

Years
INVENTORY TURNOVER IN DAYS' =
AVERAGE INVENTORY / COST OF
GOODS SOLD/365

2010

2009

2008

2007

2006

2005

2004

2003

163

157

143

156

170

169

173

77

200
150

INVENTOR
Y
TURNOVER
IN DAYS' =
AVERAGE

100
50
0
2010 2008 2006 2004

Inventory turnover in days is same as days sales in inventory except that it

uses the average inventory. Inventory turnover in days of WPL in 2003 was
77 days which is low but it shows increasing trend in the number of days
till year 2010 which is not good for the company.
Operating Cycle = Accounts Receivable Turnover in days + Inventory Turnover
in Days
31

Years
Operating Cycle = Accounts Receivable
Turnover in days + Inventory Turnover in
Days.

2010
170

2009
174

2008
158

2007
166

2006
181

2005
181

2004
178

2003
92

200
150

Operating
Cycle =
Accounts
Receivabl
e

100
50
0
2010 2008 2006 2004

Operating cycles shows the average time between purchasing or acquiring

inventory and receiving cash proceeds from its sales. Operating cycle of
WPL is very much accepted in 2003 afterwards it is increasing till year
2010.It shows that WPL is completing its operating cycle normally WPL
should make it better.

Working Capital = Current Assets- Current Liabilities

Years
Working Capital =
Current
AssetsCurrent Liabilities

2010
847,122

2009
793,780

2008
900,986

2007
1,192,308

2006
1,097,713

2005
896,202

2004
734,698

2003
644,478

1,400,000
1,200,000
1,000,000

Working
Capital =
Curre nt
AssetsCurre nt

800,000
600,000
400,000
200,000
0
2010

2007

2004

Working capital shows the short run solvency of the company. If current
assets are less than current liabilities, the company has a working capital
deficiency. WPL working capital has an increasing trend up to 2007
afterward it slightly decreased but, company is still able to pay its current
liabilities efficiently.
Current Ratio =

Current Assets
Current Liabilitie s

32

Years
CURRENT RATIO = CURRENT
ASSETS / CURRENT LIABILITIES

2010
2.557

2009
2.708

2008
3.431

2007
3.951

2006
3.743

2005
3.625

2004
3.036

2003
3.305

5
4

CURRENT
RATIO =
CURRENT
ASSETS /
CURRENT

3
2
1
0
2010

2008

2006

2004

Current ratios indicate the short term debt paying ability of the company. It
shows how much assets company have against its short term liabilities.
Higher ratio shows better performance. The current ratio of WPL is 3.951 in
2007 after that it slightly decreased by 2.557 in 2010. The overall ratio
shows the good performance of WPL.

Quick Ratio =

Current asset - Inventory

Current Liabilitie s.

Years

2010

2009

2008

2007

2006

2005

2004

2003

QUICK OR ACID-TEST-RATIO =
CURRENT ASSET - INVENTORY /
CURRENT LIABILITIES

1.034

0.985

1.390

2.557

2.217

2.165

1.573

1.620

3
2.5
QUICK OR
ACIDTESTRATIO =
CURRENT

2
1.5
1
0.5
0
2010 2008 2006 2004

Quick ratio relates most liquid assets to current liabilities. The quick ratio is more
conservative than the current ratio because it excludes inventory. Higher ratio
means a more liquid current position. WPL quick ratio in 2003 is 1.620 and
1.573 in 2004 after that increased remarkably till 2007 but in 2008 and 2009it
dropped to 1.390 and 0.985 and slightly increasing in year 2010.

33

Sales

Sales to Working Capital = Average Working Capital

Years

2010

2009

2008

2007

2006

2005

2004

2003

Sales to Working Capital = sales /

average working capital

2.727

2.905

2.646

1.768

1.772

1.981

2.321

2.885

20
04

20
06

Sale s to
Working
Capital =
sale s /
average

20
08

20
10

3.5
3
2.5
2
1.5
1
0.5
0

Sales to Working Capital ratio indicate that how many times the working
capital contributes to generate sales. In 2003 sales to working capital ratio
is 2.885 and it is dereasing till 2007 and then increased from 2008 to
2010.Over all ratio is positive and shows good performance of the
company.
EBIT

Times Interest Earned = Interest expense

Years

2010

2009

2008

2007

2006

2005

2004

2003

Times Interest Earned = EBIT /

interest expense

2.578

-0.572

2.702

3.150

6.056

3.259

2.977

3.319

7
6
5
4
3
2
1

Tim es
Interest
Earned =
EBIT /
interest

0
-1

Times interest earned indicates the companys longterm debt paying

ability.WPL times interest earned ratio is 3.319 times in 2003 which is
considered good.In 2009 it drops to -0.572 which is not a good sing for a
company but in 2010 it improved and increased to 2.578.
Debt Ratio =

Total Liabilitie s
Total Assets

34

Years

2010

2009

2008

2007

2006

2005

2004

2003

Debt Ratio = total liabilities / total assets

0.350

0.324

0.251

0.226

0.242

0.245

0.283

0.261

0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0

Debt Ratio
= total
liabilities /
total
assets

2010 2008 2006 2004

The

debt ratio compares a company's total debt to its total assets. The
lower the value of debt ratio the better the companys position. WPL debt
ratio is 0.251 in 2007 and after that it increased which means that company
is not maintaining its debt well.
Total Liabilitie s

Debt to equity ratio = Total stockholde r' s equity

Years

2010

2009

2008

2007

2006

2005

2004

2003

Debt to equity ratio = total liabilities /

total stockholder's equity

0.539

0.479

0.335

0.293

0.320

0.325

0.395

0.353

0.6
0.5
Debt to
equity
ratio =
total
liabilities /

0.4
0.3
0.2
0.1
0
2010 2008 2006 2004

Debt to equity ratio compares the total debt with total stockholders
equity.The lower the ratio the better the companys debt position.WPL debt
to equity ratio shoes that it has low debt as compared to its equity in 2007
but from 2008 to 2010 it is increasing which means that company is not
maintainig its debt as well as they should do.
Net Profit Margin =

Net Income
Sales

Years

2010

2009

2008

2007

2006

2005

2004

2003

Net Profit Margin = net income / sales

0.011

-0.038

0.061

0.116

0.168

0.128

0.063

0.162

35

0.2
0.15
Net Profit
Margin =
net
incom e /
sales

0.1
0.05
0
-0.05

2010 2008 2006 2004

Net profit margin indicates the return on sales.This ratio gives the measure
of net income dollors generated by each dollors of sales.It is desireable for
this ratio to be high.In 2003 and 2006 WPL has high net profit margin
comare with other years. After 2006 the net profit margin of WPL starts to
dcreased and in 2009 it goes to minus which is -0.038 which means that
company is not generating enough profit to pay the dividend and company
perofrmance is going down year to year.
Net Sales

Total Assets Turnover = Average total assets

Years

2010

2009

2008

2007

2006

2005

2004

2003

Total Assets Turnover = net sales /

total assets

1.488

1.588

1.579

1.155

1.153

1.251

1.335

1.699

2
1.5

Total
Assets
Turnover
= net
sales /

1
0.5
0
2010 2008 2006 2004

Total asset turnover measures the activity of the assets and ability of the
company to generate its sales through the use of the assets.WPL total
asset turnover has the lowest value in 2006 that is 1.153 after that there
is
an increasing trend till 2009.In 2010 and it has again slightly
dropped.Highr ratio shows the efficient utilization of the resources of a
company.WPL total asset turnover is relatively low.

36

Net Income

Return on Assets = Average Total Assets

Years

2010

2009

2008

2007

2006

2005

2004

2003

Return on Assets = net income / total

assets

0.017

-0.060

0.096

0.134

0.194

0.160

0.084

0.276

0.3
0.25
0.2

Return on
Assets =
net
income /
total

0.15
0.1
0.05
0
-0.05 2010 2008 2006 2004
-0.1

Return on assets indicates the

companys ability to utilize its assests to create profits by comparing profits with the
assets that generate the profit. The higher the return, the more efficient company is in
utilizing its assets.WPL ROA is very low in 2009 i.e -0.060.This shows the poor
performance of WPL.

Operating Profit Margin =

EBIT
Net Sales

Years

2010

2009

2008

2007

2006

2005

2004

2003

Operating Profit Margin = EBIT /

Net sales

0.019

-0.014

0.096

0.170

0.202

0.184

0.094

0.232

0.25
0.2
Operating
Profit
Margin =
EBIT / Net
sale s

0.15
0.1
0.05
0
-0.05

2010 2008 2006 2004

Operating profit margin includes only operating income. The operating

profit margin of WPL is 23.2% in 2003 which was good but after that
company is not performing well because of which operating profit goes
done to -1.4% which shows the very poor performance of the company.

37

Gross Profit Margin =

Gross Profit
Net Sales

Years

2010

2009

2008

2007

2006

2005

2004

2003

Gross Profit Margin

= Gross profit / Net
Sales

0.208

0.217

0.296

0.349

0.389

0.374

0.382

0.401

0.5
0.4

Gross
Profit
Margin =
Gross
profit / Ne t

0.3
0.2
0.1
0
2010 2008 2006 2004

Gross profit equals the difference between net sales revenue and the cost
of goods sold. IN 2003 and 2006 gross profit margin is 40.1% and 38.9%. In
2007 it has decreased to 34.9% and afterwards it shows decline in each
year. This could be a factor of increase in cost of sales.

38

CASH FLOW STATEMENT

WEYTH PAKISTAN LIMITED
CASHT FLOW STATEMENT
FOR THE YEAR ENDED DECEMBER31, 2003 TO 2010.
PARTICULA
RS
Cash
flow
from
operating
activities:
Cash generated
from operation/
(cash use in)
Markup
on
running finance
paid
Finance lease
charges paid
profit received
on
deposits
accounts
Decrease/increa
se in long-term
loans
to
employees
(Increase)/decre
ase in longterm deposits
Tax paid
Net
cash
inflow/
(outflow) from
operating
activities
Cash
flow
from investing
activities:
Acquisition of
property, plant
and equipment/
fixed
capital
expenditure
Proceeds from
disposal
of
property, plant
and equipment

2010
(Rs"000
)

2009
(RS'00
0)

2008
(Rs'000)

2007
(Rs'000)

2006
(Rs'000)

2005
(Rs'000)

2004
(Rs'000)

2003
(Rs'000)

279,045

61,186

130,807

360,269

332,770

232,135

410,711

355,664

-4

-4

-4,977

-64

-251

-462

-678

7,868

4,645

56,707

59,725

44,228

8,227

3,958

-2,819

-729

-984

-1,370

-671

2,708

1,701

-301

78

330

-448

-60

80

176

-79,901

-75,858

-94,542

-68,255

-26,575

-58,086

1,080
109,988

210669.
00

12768.
00

169041.
00

350307.
00

348929.
00

181430.
00

304045.
00

307800.
00

-4,979

-25,602

-49,321

-80,867

-28,860

-27,755

-41,150

-50,334

683

7,808

8,766

4,319

1,481

6,332

3,269

9,628

-44,086

39

Net
cash
outflow from
investment
activities

-4,296

-17,794

-40,555

-76,548

-27,379

-21,423

-37,881

-40,706

Dividends paid

-93

-71,701

424,486

102,272

117,445

-71,022

-35,295

-35,441

liabilities
against assets
subject
to
finance
lease
(net)

-1,010

-1,573

-1,571

-554

Net cash inflow

and
outflow
from financing
activities.

-93

-71701

-424486

-102272

-118455

-72595

-36866

-35995

Net increase/
(decrease)
in
cash and cash
equivalents

206,280

102,26
3

634,082

171,487

203,095

87,412

229,298

231,099

Cash and cash

equivalents at
beginning
of
the year/ period

35,648

137,91
1

771,993

600,506

397,411

309,999

80,701

-150,398

Cash and cash

equivalents at
end of the year/
period

241,928

35,648

137,911

771,993

600,506

397,411

309,999

80,701

Cash
flow
from financing
activities:

40

INVESTOR ANALYSIS
Degree of Financial Leverage = Earning Before Interest and Tax
Earning Before Tax
Degree of Financial Leverage = 1
The degree of financial leverage is the multiplication factor by which the net income
changes as compared to the change in EBIT.
If the answer of the degree of financial leverage is 1 it means that there is no
leverage, if the answer is more than or greater than one it means that there is
positive leverage and if the answer is less than one than its mean that there is
negative leverage.
Here in our financial statements the degree of financial leverage is one (1) it means
that there is no leverage. Higher the degree of financial leverage higher will be the
chances of more return for an investor.
Dividend yield =

DIVIDENDS PER COMMON SHARE

.
MARKET PRICE PER COMMON SHARE

Dividend yield indicates the relationship between the dividends per common share
and the market price of per common share.
There is no rule of thumb for dividend yield. The yield depends on the firm dividend
policy and the market price. If the firm successfully invests the money not
distributed as dividends, the price should rise. If the firm holds the dividends at low
amounts to allow for reinvestment of profits, the yield is likely be low. A low yield
satisfies many investors if the company has a record of above average return on
common equity. Investors that want current income prefer a high dividend yield.
years
dividend / common
share
market price / common
share
dividend yield

2010
10
914
1.09%

2009
1265
0.00%

2008

2007

2006

2005

2004

2003

250

130

65

60

50

25

2600
9.62%

2140
6.07%

2147
3.03%

1960
3.06%

1282
3.90%

1600
1.56%

41

10.00%
8.00%
6.00%
dividend yie ld

4.00%
2.00%
0.00%
2010 2008 2006 2004

The graph shows that in 2003 the dividend yield is 1.55% which is low that is
because of dividend distribution. In 2003 company is distributing its dividend after
that firm is starting to reinvest the dividend due to which dividend yield is becoming
greater and greater.
Price / Earning ratio =

MARKET PRICE PER SHARE

DILUTED EARNING/ SHARE

The price / earning (P/E) ratio express the relationship between the market price of
a share of common stock and that stocks current earnings per share.
years
market
price /
common
share
Earning /
share
price per
earning ratio

2010

2009

2008

2007

2006

2005

2004

2003

914

1265

2600

2140

2147

1960

1282

1600

18.61

-61.09
20.7072

101.5

172.39

228.17

159.48

75.25

212.12

25.61576

12.41371

9.409651

12.28994

17.03654

7.5429

49.11338

50
40
30
20
10
0
-10
-20
-30

price per
e arning ratio

2010 2008 2006 2004

The price/earning ratio of WPL is shown in the graph. The graph shows that
investment in this company is too risky because, the price/ earning ratio is very high
and we know that the higher the ratio the more the risk will be there. Graph is also
showing that the earning / share is decreasing year by year due to which the market
price of the shares is also decreasing so, the firm which shares market price is
decreasing year by year the investment in that firm will be quite risky.
42

DIVIDEND PAYOUT = DIVIDENDS PER COMMON SHARE

DILUTED EARNING/ SHARE
years
dividend /
common
share
Earning /
share
dividend pay
out ratio

2010

2009

2008

2007

2006

2005

2004

2003

10

250

130

65

60

50

25

18.61

-61.09

101.5

172.39

228.17

159.48

75.25

212.12

53.73%

246.31%

75.41%

28.49%

37.62%

66.45%

11.79%

250.00%
200.00%
150.00%

dividend pay
out ratio

100.00%
50.00%
0.00%
2010 2008 2006 2004

Through this ratio an investor can analysis that how much firm has earned and how
much they retained.

43