Project Analysis Of Financial Statement

ENGRO CORPORATION
Annual Report 2020
 ENGRO CORPORATION
INCOME STATEMENT
AS OF DECEMBER 2020
(Amount in millions )

Sales 248,818
Cost of Sales -172,773
Gross Proift 76,045
Selling And Distribution Expense -7,845
Administrative Expense -7,185
61,015
Other Expense -7,655
Other Income 17,738
Operating Profit 71,098
Finance Cost -20,473
Share of Income from Joint Venture and Associates 2,796
Net Profit Before Taxation 53,421
Provison For Taxation -9,030
Loss From Discontinue Opeations -279
Net Profit After Taxation 44,112
Non Controlling Interest -19,011
Profit Attriubtions to
Owners of the holding Company 25,101
 ENGRO CORPORATION
Balance Sheet
AS OF DECEMBER 2020
(Amount in millions)
Assests
Current Assets
Store, Spare and Lose Tool 9,069
Stock-in-Trade 17,938
Trade Debts 50,617
Advances,deposits and Prepayments 3,861
Other Receivables 24,843
Current portion of Investment in lease 3,255
Cash And Bank Balances 23,353
Short-term Investments 93,493
Assets classified as held for sale 68
226,497
Non Current Assets
Property, Plant and Equipment 261,957
Right of use asset 6,992
Net investment in lease 44,557
Long-term Investments 32,045
Intangible Assets 1,087
Financial asset at amortised cost 5,161
Others 2,191
353,990
Total Assets 580,487

LIABILITIES AND EQUITY

Current Liabilities
Current Portion of
Borrowings 22,688
Current maturity of lease liability 4,906
Others 12,423
Trade and Other Payables 88,996
Accrued Interest / Mark up 1,372
Short-term Borrowings 12,505
Others 377
143,267
Non Current Liabilities
Borrowings 135,230
Lease liability 50,625
Deferred Taxation 14,568
Others 17,202
Total Non Current Liabilities 217,625
EQUITY
Share Capital 5,762
Share Premium 13,068
Unappropriated Profits 124,425
Reserves 5,161
 Non-Controlling Interest 71,179
219,595
Total Liabilities And Equity 580,487

Financial Ratios
Profitability Ratios
Gross Profit Ratio
Formula G.P
Sales

Calculation

G.P.R = 76,045
248,818

G.P.R 30.5624995
Industry G.P.R is 28%, this company has above margin from industry margin. It shows company can earn
reasonable profit if they managed to control expenses.

EBIT Margin to Sales

Formula EBIT
Sales

Calculation 53,421
248,818

EBIT Margin To Sales 21.46990973

I'm not able to find industry EBIT margin. However Fauji Fertilizer has 34.58% EBIT. Less than 34.58%
shows that company net profit may effect and investor might lose confidence
Net Profit to Sales
Formula Net Profit
Sales

Calculation 44,112
248,818

Net Profit to Sales 17.72862092

Industry Net Profit Margin is 16%, and this company has 17.72%. Stay on boderline is not a good game

Return on Capital Employed

Formula PBIT
Capital Employed

Calculation 71,098
377,513

ROCE 18.83325872
Company return 18.83% of Employed Capital from it's profit
Return on Equity
Formula Net Profit
Equity

44,112
219,595

ROE: 20.08788907

ROE of Fertilizer Industry is 16% (Sources PACRA)

ROE Of Engro is 20% which good to some extent, but if compare it with other competitor
i.e Fauji Fertilizer who have 48% ROE, investor will attract towards Fauji Fertilizer

Operating Profit Margin

Formula Operating Profit
Revenue

71,098
248,818

Opearting Profit Margin 28.57429929

Industry Operating Profit margin is 23% in 2020. However this company has 28.57%. which indicate
financial efficiency and stability.

PROFITABLITY RATIOS
GPR 30.56% Profitablity Ratios
EBIT to Margin Sales21.46% 40.00%
Net Profit to Sales 17.72% 30.00% 30.56% 28.57%
20.00% 21.46% 17.72% 18.83% 20.08%
ROCE 18.83% 10.00%
ROE 20.08% 0.00%
GPR EBIT to Net Profit ROCE ROE OPM
OPM 28.57% Margin to Sales
Sales

Liquidity Ratios
Current Ratio
Formula Current Assets
Current Liabilities

Calculations 226,479
143,267

Current Ratio 1.580817634

Industry Current ratio 2020 is 0.9, meanwhile 1.58 for this company, which shows
company have enough current Assets to pay it's short term debt.

Quick Ratio
Formula Liquid Assets
Current Liabilities
 Calculation 199,422
143,267

Quick Ratio 1.391960465

Industry Quick Ratio in 2020 is 0.7, meanwhile this company has 1.39, it indicate same thing as current ratio
Cash and Cash Equivalent to Liabilities
Formula C & CE
Current Liabilities

Calculations 64,449
143,267

0.449852374

Cash Flow From Operations to Sales

Formula
CFFOA
Sales

Calculation 63,392
248,818

0.254772565
Company cash flow from operations to sales is less than 1 which shows short term cash problem

Liquidity Ratios
Current Ratio 1.58 Liquidity Ratios
Quick Ratio 1.39 2
C & CE to CA 0.44 1.5
CFFO To Sales 0.254 1
0.5
0
Current Ratio Quick Ratio C & CE to CA CFFO To Sales

Investors Ratio
Earning Per Share
Formula Profit After Tax And Interest
Number of Ordinary Shares

25,101
576,163

EPS 43.56579648
Basic earnings per share has been calculated by dividing the profit attributable to equity holders
of the Group by weighted average number of ordinary shares in issue during the year.

Price Earning Ratio

Formula
 Share Price
EPS

307
PER 43.56
Share Price Data Extract from Google

Dividend Cover Ratio

Formula Profit Available of Ordinary Shares
Dividend For the Year

25,101
22,821

Dividend Cover Ratio 1.099907979

DCR is 1.09. Experts suggests that DCR Below 1.5 is matter of concern
Dividend Per Share
Formula Total Ordinary Dividend
Number of Share

14,404,080
576,163

DPS 25.00

Dividend Yield Ratio

Formula DPS
Market Price Share

25
357.14

Dividend Yield Ratio 7.000056

Experts says DYR in between 2% to 6% is healthy and this company has 7% which may attract investors

Interest Covering Ratio

Formula EBIT
Interest Expense

85,246
23,269

Interest Covering Ratio 3.663500795

Interest Covering Ratio is ideal
 Investors Ratios
Investors Ratios
10
PER 7.04
7.04 7
DCR 1.09 5
DYR 7 3.66
1.09
ICR 3.66 0
PER DCR DYR ICR

CONCLUDING REMARKS
Overall the performance of company is good, however according to my limited knowledge,
these points which may be matter of concern:

➢ Company needs to improve EBIT to Margin Sales. Net Profit is above the industry
margin by just only 1%. It must be increase by controlling expense or improving cost of
sales.
➢ If we Compare ROE from industry average, performance is good, however after
comparing it with other competitor, there is a difference of 18%. Investor might lose
confidence
➢ Experts suggests that Cash flow from operations to sales should not be less then 1.
Company has 0.2 which shows possible short term cash shortage. Company needs to
improve it
➢ Remaining figures are upto mark, it should be sustain and improve with the passage
of time.