3.

Murree brewery company LTD

Murree brewery established in 1860, the Murree brewery is Pakistan’s oldest institution.
Established to meet the beer requirements of British personnel (mainly army). At the time of its
Creation the brewery in GhoraGali in Murree was one of the Asian’s first modern beer
breweries, having undergone many changes in management and location due to natural
calamities and bureaucratic interference. The Murree brewery managed to overcome all such
challenges and emerged stronger under the late Minoobhandara's masterful leadership.

Vision statement:

“Our office is in the market”

Mission statement:

“We the people of Murree Brewery Co. LTD make a personal commitment to first understand
our customers requirement then to meet and exceed their expectations, by performing the correct
tasks on time and every time through:

Continuous improvement

Alignment of our mission and goals

Responsibility and respect of our job and each other

Educate one another”

Products:

 Murree beer
 Big Apple
 Vinegar
 Fruit juice
 Fruit squashes

Financial Highlights
Components 2019(Rs.) 2018(Rs.) 2017(Rs.) 2016(Rs.) 2015(Rs.)
Sales 9,983,292 8,861,869 7,139,601 6,657,314 6,029,292
Cost of sales 7,236,021 5,992,619 4,972,774 4,413,950 3,887,109
Gross profit 2,747,271 2,869,250 2,166,827 2,243,364 2,142,183
Operating 1,411,248 1,686,747 1,235,333 1,456,070 1,475,997
profit
Income 107,220 90,021 226,926 220,748 263,997
Finance cost 17,053 20,134 16,690 2,023 1,967
Profit before 1,662,826 1,827,868 1,350,943 1,566,695 1,629,966
tax
Taxation 439,888 531,507 430,136 415,884 633,885
Profit after 1,222,938 1,296,361 920, 807 1,150,811 996,,084
tax
Cash 1,694,452 1,998,714 1,642,306 1,701,696 3,013,619

Inventory 1,568,204 1,34,755 1,416,643 1,477,354 994,816

Current 5,376,929 4,935,767 4,781,956 4,908,050 4,280,295
assets
Investments 531,717 523,503 526,509 284,570 272,274
Fixed assets 6,375,140 5,970,269 5,574,830 4,583,668 4,199,163
Total assets 11,752,069 10,906,036 10,356,786 9,491,718 8,479,458
Currents 1,157,429 1,027,701 951,514 844,433 852,588
liabilities
Fixed 568,681 411,201 388,815 277,280 219,115
liabilities
Total 1,726,110 1,438,902 1,340,329 1,121,713 1,071,703
liabilities
Paid up 276,636 276,636 230,530 230,530 230,530
capital
Total equity 10,025,959 9,467,134 9,016,457 8,370,005 7,407,755
Vertical Analysis of Murree Brewery

Ratio Unit Year 2019 Industry Average VA

Liquidity
Current Ratios - 5.80 2.13 Good
Quick Ratios - 3.895 1.24 Good
Activity
Inventory Turnover - 0.8244 4.56 Poor
Total Assets Turnover - 0.17 1.31 Ok
Average Collection Period Days 25 30.51 Ok
Average Payment Period Days 53 90.09 Ok
Debt
Debt Ratio % 12 54.62 Poor
Time Interest Earned Ratio - 4.06 18.52 Poor
Profitability
Gross Profit Margin % 35.40 29.35 Good
Operating Profit Margin % 18.5 11.49 Good
Net Profit margin % 10.62 35.87 Poor
Earnings Per Share Rs. 47.73 122.76 Poor
Return on Assets % 18.01 33.36 Poor
Return on Equity % 15.28 74.91 Poor
Market
P/E Ratio Rs. 16.9 26.892 Poor
M/B Ratio - 2.15 34.78 Poor

Interpretation

1) Liquidity Ratio
a) Current ratio:
The current ratio of Murree brewery from 2015 to 2016 increased and then
decreased in 2017 to 2018and again increased in 2019. But in all years the
current assets are greater than the current liabilities, because in all years the
current ratio is greater than one which is favorable and the company have the
ability to paying of their current liabilities.
b) Quick ratio:
 The quick ratio of Murree brewery in 2015 was 0.85, in 2016 it was 0.96 which
is greater than the 2015 and in 2016 the Murree brewery showed a rapid change
but in 2017 and 2018 it was decrease. But in 2019 company shows the rapidly
increases their quick ratio and the value of quick ratio is greater than 1 that’s
shows the very strong liquidity position in the market.
2) Activity Ratio
a) Inventory turnover:
The inventory turnover ratio of Murree brewery increased from 6.06 times in
2015 and sharp decline which is 4.51 times in 2016. But in 2017 and 2018 it
increased by 5.04 to 6.59 time but in 2019 the company decreased very rapidly
which means that the company moved towards the unfavorable value and it also
indicated that company are not able to generating a profit. And also mean that
the company are not using their inventories in a better way.
b) Avg. collection period:
The average collection period of Murree Brewery in 2015 is 24 days. In 2016 it
has decreased to 22 days. From 2015 there is decline in the average collection
period till 2018. In 2019 it has increased is 25 days then the rest of the years.
c) Avg. payment period:
The average payment period has increased from 2015 to 2017 which is favorable
for the business. In 2015 it was 52days, till 2017 it increased to 60 days then in
2018and 2019 it again decreases to 57 day to 53 days respectively which is an
unfavorable situation for the company.
d) Assets turn over:
The total asset turnover of Murree brewery indicated that the values fluctuate
over a time. In 2015 to 2016 the values decreased, but it slightly increased from
0.8 to 1.31 in 2017 and 2018 and again a sharp decrease, which shows the
company’s present value or present position which is worse than the past values.
It means that the company was unable to utilize its assets in an effective manner.
3) Debt Ratio
a) Debt ratio:
 The debt ratio of Murree brewery in 2015 to 2016 indicating that the company
has been used less amount of money of other people to generate profit, because
the amount decreased gradually. But in 2017 to 2018 the amount is stable which
is 13% but this amount is greater than the amount in 2016. In the next year the %
decreases from 13% to 12% in 2019. Because the amount is stable in last two
years, therefore the firm have the ability to meet its contractual debt payment.
b) Interest coverage ratio:
The interest coverage ratio of Murree brewery in 2015 increased but decreased in
2016 and 2017 but in 2018 the value of interest coverage ratio is greater but in
2019 the ratio rapidly decreases which shows company’s bad financial position.
Means that the company is unable to make contractual interest payments,
because the value of interest coverage ratio in 2019 is less than the past years
(2015, 2016, 2017, and 2019).
4) Profitability Ratio
a) Gross profit:
The gross profit margin of Murree brewery in 2015 to 2016 is 35.53% and
35.70% which indicated that the company is in good position because the
difference between the two values is minor. And again in 2017to 2018 it
decreased but in 2019 the value increased which shows a positive changes in the
Gross profit and it was hood change for the company. And it also shows a better
control of a company over the cost of their inventories.
b) Operating profit margin
The operating profit margin of Murree brewery decreased from 2015 to 2016 but
increased from 2017 to 2018. Because the amount of operating profit margin is
greater in 2019 which is favorable means that the company has enough money to
pay its expenses.
c) Net profit margin:
The Net profit margin of Murree brewery in 2015 to 2016 represent a negative
change, and from 2016 to 2017 it represent a positive change and in a next year it
represent a huge negative change but the value again increased in 2019, means
that Murree brewery is in a profitable position
d) EPS
The EPS value of Murree Brewery Company in 2015 to 2016 represented an
upward trend, but decreased from 2017 and again increased in 2018. But
company improved more in 2019, means that company had enough money after
all the cost and other expenses. And it can facilitate its shareholders with better
return.
e) Return on assets:
The ROA ratio of Murree brewery in 2015 decreases to 11.75%. It increased to
12.12% in 2016 but again decreased in 2017 but after a negative change it
increased to 11.89% and again increased in 2019, indicated that the spending on
assets is profitable and company’s sales department is working very well.
f) Return on equity:
The ROE ratios of Murree brewery was decreased in 2015 and increased in 2016
but again decreased in 2017 with greater amount as comparison to past year,
means that return on equity at that year is lesser than the others. But company
represents a positive change in 2018 and 2019, means that the company gain a
return on equity.