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Nishat IS
Nishat IS
Final Project
Submission # 2
Submitted to: Ms Mehwish Jawaad
Submitted By: Hina Naveed
19P00033
21-Feb-2020
There was a large decrease in revenue from 2015 to 2016 (approximately 38% decrease in sales)
Later on there was increase of 8.24% and 12.55% in 2017 and 2018 but again there was a
decrease of 7.96% decrease in 2019. The main reason seems to be increase in electric prices
which reduce the consumption along with a reduction in load factor in 206 and 2019.
Percentage Sales w.r.t 2015 as Base Year 100.00 62.28 67.41 75.87 69.83
100.00
80.00
60.00
40.00
20.00
0.00
2015 2016 2017 2018 2019
Percentage Change in Sales (increase/Decreas)
20
10
0
2015 2016 2017 2018 2019
-10
-20
-30
-40
-50
Overall there is a decrease in cost of goods sold from 2015 to 2019 showing increase in
productive efficiency of the business. And in this way business was able to increase its gross
profit margin. Anyhow there seems a slight increase in Cost of sales percentage from 2016 to
2018. It also shows the increased efficiency of the production plant.
Overall there is increasing trend of gross profit margin due to increased efficiency of the
business. There is an overall 11% increase in gross margin over the 5 years period.
Gross Profit Margin
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
2015 2016 2017 2018 2019
A consistent increase in administrative expenses from 2015 to 2018 from 0.80% to 1.89% in
2019 there is a decrease again to 1.76% to the level of 2017 administrative expenses.
There is a consistent decrease in advertising cost from 2015 to 2019. Anyhow pattern of advertising cost
is in line with sales pattern. Showing a correlation between the two even though Power production is
not a consumer good.
Chart Title
0.0120
0.0100
0.0080
0.0060
0.0040
0.0020
0.0000
2015 2016 2017 2018 2019
There is a consistent decrease in depreciation expense to sales ratio as well as depreciation to cost of
Noncurrent asset ratio from 2015 to 2019.
Chart Title
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2015 2016 2017 2018 2019
There is a consistent increase in other expenses from 2015 to 2018. But there was a large increase in
other expenses in 2019. It is important to note that other expenses majorly consists of exchange rate
losses. Due to massive currency depreciation in Pakistan other expenses in 2019 showed a dramatic
jump. More over another major contribution in other expenses in 2019 is due to losses on disposal of
noncurrent assets.
Changes in other expenses
0.1200
0.1000
0.0800
0.0600
0.0400
0.0200
0.0000
2015 2016 2017 2018 2019
Changes in operating profit margin are consistent with the changes in gross margin in so far pattern of
graph is considered. Therefor there is a 10% increase in operating profit over the 5 years. Moreover one
also need to compare it with rise in inflation over the 5 year period of time.
30.00
25.00
20.00
15.00
10.00
5.00
0.00
2015 2016 2017 2018 2019
Other incomes shows no particular trend over the 5 years. There is increase in 2016 and decrease in
2017 and 2018 but again a decrease in 2019.
Chart Title
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
2015 2016 2017 2018 2019
Company have not paid any taxes except 2017 in any of the 5 years. In 2017 tax was 0.094% of sales
value. Tax relief was available to IPP in Pakistan over this period of time.
Despite decrease in sales net profit margin have shown a consistent increase from 13.97% to 24 %.
Which is consistent with increase in gross profit and operating profit. This indicate that business was
able to manage its overheads according to its level of operations. Moreover it is also due to the fact that
majority of the cost are direct cost. Overheads are very small percentage of sales.
25.00
20.00
15.00
10.00
5.00
0.00
2015 2016 2017 2018 2019
10.000
8.000
6.000
4.000
2.000
0.000
2015 2016 2017 2018 2019